10000003380

K&E 16673425
James H.M. Sprayregen, P.C.

Paul M. Basta
Jennifer L. Marines
KIRKLAND & ELLIS LLP
601 Lexington Avenue
New York, NY 10022-4611
Telephone: (212) 446-4800
Facsimile: (212) 446-4900

and

Anup Sathy, P.C. (pro hac vice pending)
Marc J. Carmel (pro hac vice pending)
KIRKLAND & ELLIS LLP
300 North LaSalle
Chicago, IL 60654-3406
Telephone: (312) 862-2000
Facsimile: (312) 862-2200

Proposed Counsel to the Debtors and Debtors in Possession
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
)
In re: ) Chapter 11
)
INNKEEPERS USA TRUST, et al.,
1
) Case No. 10-__________(___)
)
Debtors. ) Joint Administration Requested
)
DEBTORS APPLICATION FOR THE ENTRY OF AN ORDER
AUTHORIZING THE RETENTION AND EMPLOYMENT OF
MOELIS & COMPANY LLC AS FINANCIAL ADVISOR AND INVESTMENT
BANKER TO THE DEBTORS NUNC PRO TUNC TO THE PETITION DATE
1

1
The Debtors in these Chapter 11 Cases, along with the last four digits of each Debtors federal tax identification
number, are: GP AC Sublessee LLC (5992); Grand Prix Addison (RI) LLC (3740); Grand Prix Addison (SS)
LLC (3656); Grand Prix Albany LLC (3654); Grand Prix Altamonte LLC (3653); Grand Prix Anaheim Orange
Lessee LLC (5925); Grand Prix Arlington LLC (3651); Grand Prix Atlanta (Peachtree Corners) LLC (3650);
Grand Prix Atlanta LLC (3649); Grand Prix Atlantic City LLC (3648); Grand Prix Bellevue LLC (3645); Grand
Prix Belmont LLC (3643); Grand Prix Binghamton LLC (3642); Grand Prix Bothell LLC (3641); Grand Prix
Bulfinch LLC (3639); Grand Prix Campbell / San Jose LLC (3638); Grand Prix Cherry Hill LLC (3634); Grand
Prix Chicago LLC (3633); Grand Prix Columbia LLC (3631); Grand Prix Denver LLC (3630); Grand Prix East
Lansing LLC (3741); Grand Prix El Segundo LLC (3707); Grand Prix Englewood / Denver South LLC (3701);
(continued on next page)

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Innkeepers USA Trust and certain of its affiliates, as debtors and debtors in
possession (collectively, the Debtors), file this application (this Application) for the entry
of an order, substantially in the form attached hereto as Exhibit A, (a) authorizing the Debtors to
retain and employ Moelis & Company LLC (Moelis) as financial advisor and investment
banker to the Debtors nunc pro tunc to the Petition Date (as defined herein) and (b) granting such
other relief as is just and proper. In support of this Application, the Debtors respectfully state as
follows:
2

Grand Prix Fixed Lessee LLC (9979); Grand Prix Floating Lessee LLC (4290); Grand Prix Fremont LLC
(3703); Grand Prix Ft. Lauderdale LLC (3705); Grand Prix Ft. Wayne LLC (3704); Grand Prix Gaithersburg
LLC (3709); Grand Prix General Lessee LLC (9182); Grand Prix Germantown LLC (3711); Grand Prix Grand
Rapids LLC (3713); Grand Prix Harrisburg LLC (3716); Grand Prix Holdings LLC (9317); Grand Prix
Horsham LLC (3728); Grand Prix IHM, Inc. (7254); Grand Prix Indianapolis LLC (3719); Grand Prix Islandia
LLC (3720); Grand Prix Las Colinas LLC (3722); Grand Prix Lexington LLC (3725); Grand Prix Livonia LLC
(3730); Grand Prix Lombard LLC (3696); Grand Prix Louisville (RI) LLC (3700); Grand Prix Lynnwood LLC
(3702); Grand Prix Mezz Borrower Fixed, LLC (0252); Grand Prix Mezz Borrower Floating, LLC (5924);
Grand Prix Mezz Borrower Floating 2, LLC (9972); Grand Prix Mezz Borrower Term LLC (4285); Grand Prix
Montvale LLC (3706); Grand Prix Morristown LLC (3738); Grand Prix Mountain View LLC (3737); Grand
Prix Mt. Laurel LLC (3735); Grand Prix Naples LLC (3734); Grand Prix Ontario Lessee LLC (9976); Grand
Prix Ontario LLC (3733); Grand Prix Portland LLC (3732); Grand Prix Richmond (Northwest) LLC (3731);
Grand Prix Richmond LLC (3729); Grand Prix RIGG Lessee LLC (4960); Grand Prix RIMV Lessee LLC
(4287); Grand Prix Rockville LLC (2496); Grand Prix Saddle River LLC (3726); Grand Prix San Jose LLC
(3724); Grand Prix San Mateo LLC (3723); Grand Prix Schaumburg LLC (3721); Grand Prix Shelton LLC
(3718); Grand Prix Sili I LLC (3714); Grand Prix Sili II LLC (3712); Grand Prix Term Lessee LLC (9180);
Grand Prix Troy (Central) LLC (9061); Grand Prix Troy (SE) LLC (9062); Grand Prix Tukwila LLC (9063);
Grand Prix West Palm Beach LLC (9065); Grand Prix Westchester LLC (3694); Grand Prix Willow Grove
LLC (3697); Grand Prix Windsor LLC (3698); Grand Prix Woburn LLC (3699); Innkeepers Financial
Corporation (0715); Innkeepers USA Limited Partnership (3956); Innkeepers USA Trust (3554); KPA HI
Ontario LLC (6939); KPA HS Anaheim, LLC (0302); KPA Leaseco Holding Inc. (2887); KPA Leaseco, Inc.
(7426); KPA RIGG, LLC (6706); KPA RIMV, LLC (6804); KPA San Antonio, LLC (1251); KPA Tysons
Corner RI, LLC (1327); KPA Washington DC, LLC (1164); KPA/GP Ft. Walton LLC (3743); KPA/GP
Louisville (HI) LLC (3744); KPA/GP Valencia LLC (9816). The location of the Debtors corporate
headquarters and the service address for their affiliates is: c/o Innkeepers USA, 340 Royal Poinciana Way,
Suite 306, Palm Beach, Florida 33480.
2
Information regarding the Debtors business, the background of these Chapter 11 Cases (as defined herein), and
further facts and circumstances supporting this Application are set forth in the Declaration of Dennis Craven,
Chief Financial Officer of Innkeepers USA Trust, in Support of First-Day Pleadings (the First Day
Declaration), filed contemporaneously herewith.

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Jurisdiction
1. The United States Bankruptcy Court for the Southern District of New York
(the Court) has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334. This
matter is a core proceeding within the meaning of 28 U.S.C. 157(b)(2).
2. Venue is proper pursuant to 28 U.S.C. 1408 and 1409.
3. The statutory bases for the relief requested herein are sections 105(a), 327, and
328 of title 11 of the United States Code (the Bankruptcy Code), Rules 2014(a) and 2016 of
the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules), and Rules 2014-1 and
2016-1 of the Local Bankruptcy Rules for the Southern District of New York (the Local
Bankruptcy Rules).
Relief Requested
4. By this Application, the Debtors seek entry of an order (a) authorizing the
retention and employment of Moelis as the Debtors financial advisor and investment banker,
nunc pro tunc to the Petition Date, in accordance with the terms and conditions set forth in the
Engagement Letter (as defined herein), (b) approving the terms of Moeliss employment,
including the proposed Fee Structure (as defined herein) and the indemnification, contribution,
and reimbursement provisions set forth in the Engagement Letter, subject to the standards set
forth in section 328 of the Bankruptcy Code, and (c) granting such other relief as is just and
proper. In support of the application, the Debtors submit the Declaration of William Q.
Derrough, a Managing Director of Moelis (the Derrough Declaration), which is attached
hereto as Exhibit B.
Background
5. On the date hereof (the Petition Date), each of the Debtors filed a petition with
the Court under chapter 11 of the Bankruptcy Code (collectively, the Chapter 11 Cases). The

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Debtors are operating their business and managing their properties as debtors in possession
pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No request for the appointment
of a trustee or examiner has been made in the Chapter 11 Cases, and no committees have been
appointed or designated. Concurrently with the filing of this Application, the Debtors have
requested procedural consolidation and joint administration of the Chapter 11 Cases.
Moeliss Retention
6. As described in the First Day Declaration, to effectively restructure their business
and effectuate a successful plan of reorganization, the Debtors believe they require the services
of a capable and experienced investment banking and financial advisory firm such as Moelis.
Indeed, Moeliss resources and capabilities, together with its prepetition experience advising the
Debtors, complements the services offered by the Debtors other restructuring advisors and its
retention is integral to the Debtors success in these Chapter 11 Cases.
7. Accordingly, the Debtors propose to engage Moelis as their financial advisor and
investment banker in these Chapter 11 Cases, and they respectfully submit that Moeliss
retention is in the best interest of the Debtors, their estates, and other parties in interest.
I. Moeliss Qualifications
8. Moelis is a financial advisory and investment banking firm with its principal
office located at 399 Park Avenue, 5th Floor, New York, New York 10022. Moelis is a
registered broker-dealer with the United States Securities and Exchange Commission and is a
member of the Financial Industry Regulatory Authority and the Securities Investor Protection
Corporation. Moelis was founded in 2007 and is a wholly-owned subsidiary of Moelis &
Company Holdings LLC, a privately-owned company. Moelis & Company Holdings LLC,
together with its subsidiaries, has approximately 300 employees located in offices in New York,
Los Angeles, Boston, Chicago, London, and Sydney.

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9. The Debtors have selected Moelis as their financial advisor based upon, among
other things, (a) the Debtors need to retain a financial advisory firm to provide advice with
respect to the Debtors restructuring activities and (b) Moeliss recognized expertise and
extensive experience in providing advisory services to real estate investment trusts and other
companies in connection with the restructuring of distressed debt in complex chapter 11 cases
and out-of-court restructurings. Moreover, and as explained herein, Moelis advised the Debtors
on a prepetition basis and, as a result, has gained valuable knowledge about the Debtors
business and operations.
10. Moelis provides a broad range of financial advice to its clients, including, with
respect to: (a) corporate restructurings; (b) general corporate finance; (c) mergers, acquisitions,
and divestitures; (d) special committee assignments; and (e) capital raising. Moelis and its
professionals have extensive experience in the reorganization and restructuring of distressed
companies, both out-of-court and in chapter 11 proceedings. Moeliss business reorganization
professionals have served as financial and strategic advisors to various parties (including
debtors) in numerous chapter 11 cases, including, among others: In re Neenah Enters., Inc.,
Case No. 10-10360 (Bankr. D. Del. Feb. 2, 2010); In re Atrium Cos., Inc., Case No. 10-10150
(Bankr. D. Del. Mar. 18, 2010); In re Simmons Bedding Co., Case No. 09-14037 (Bankr. D. Del.
Nov. 16, 2009); In re Readers Digest Assn Inc., Case No. 09-23529 (Bankr. S.D.N.Y. Aug. 24,
2009); In re NV Broadcasting LLC, Case No. 09-12473 (Bankr. D. Del. Aug. 5, 2009); In re
Fontainebleau Las Vegas Holdings LLC, Case No. 09-21481 (Bankr. S.D. Fla. Aug. 3, 2009); In
re ION Media Networks Inc., Case No. 09-13125 (Bankr. S.D.N.Y. July 13, 2009); In re Idearc
Inc., Case No. 09-31828 (Bankr. N.D. Tex. May 27, 2009); In re Source Interlink Cos., Case No.
09-11424 (Bankr. D. Del. May 22, 2009); In re J.G. Wentworth LLC, Case No. 09-11731 (Bankr.

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D. Del. May 19, 2009); In re Dayton Superior Corp., Case No. 09-11351 (Bankr. D. Del. May
19, 2009); In re Aleris Intl Inc., Case No. 09-10478 (Bankr. D. Del. Mar. 16, 2009); In re Muzak
Holdings LLC, Case No. 09-10422 (Bankr. D. Del. Apr. 7, 2009); In re Hartmarx Corp., Case
No. 09-02046 (Bankr. N.D. Ill. Mar. 4, 2009); In re Lyondell Chemical Co., Case No. 09-10023
(Bankr. S.D.N.Y. Jan. 6, 2009); In re Tribune Co., Case No. 08-13141 (Bankr. D. Del. Mar. 13,
2008); In re Pilgrims Pride Corp., Case No. 08-45664 (Bankr. N.D. Tex. Feb. 3, 2009); In re
Greektown Holdings LLC, Case No. 08-53104 (Bankr. E.D. Mich. Oct. 15, 2008); In re Motor
Coach Indus. Intl Inc., Case No. 08-12136 (Bankr. D. Del. Sep. 15, 2008); In re Tousa Inc.,
Case No. 08-10928 (Bankr. S.D. Fla. Aug. 27, 2008); In re Pappas Telecasting Inc., Case No.
08-10916 (Bankr. D. Del. July 30, 2008); In re Tropicana Entmt LLC, Case No. 08-10856
(Bankr. D. Del. May 5, 2008); In re Delphi Corp., Case No. 05-44481 (Bankr. S.D.N.Y. Oct. 8,
2005).
II. Moeliss Prepetition Services
11. As of approximately March 24, 2010, the Debtors engaged Moelis to provide
general investment banking and financial advice in connection with the Debtors attempts to
complete a strategic restructuring, reorganization, and/or recapitalization of all or a significant
portion of the Debtors outstanding indebtedness, as well as to prepare for the potential
commencement of chapter 11 cases.
12. In rendering prepetition services to the Debtors in connection with these matters,
Moelis has worked closely with the Debtors management and other retained advisors and has
become well-acquainted with the Debtors business operations and capital structure.
Accordingly, Moelis has developed significant expertise regarding the Debtors that will assist it
in its provision of effective and efficient services during the Chapter 11 Cases.

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III. Services To Be Provided
13. The Debtors request the employment and retention of Moelis to provide financial
advisory and investment banking services under the terms of that certain engagement letter
between the Debtors and Moelis, dated as of March 24, 2010 (the Engagement Letter, a copy
of which is attached hereto as Exhibit C). Subject to further order of the Court and consistent
with the terms of the Engagement Letter, Moelis will provide the following financial advisory
and investment banking services as necessary or requested by the Debtors:
3

a. undertake, in consultation with members of management of the Debtors, a
comprehensive business and financial analysis of the Debtors;
b. evaluate the Debtors debt capacity and assist in the determination of an
appropriate capital structure for the Debtors;
c. as deemed desirable by the Debtors, identify, initiate, review, negotiate, and
evaluate any Restructuring Transaction,
4
and, if directed, develop and evaluate
alternative proposals for a Restructuring Transaction;
d. assist the Debtors in developing strategies to effectuate any Restructuring
Transaction;
e. advise and assist the Debtors in the course of their negotiation of any
Restructuring Transaction and participate in such negotiations, as requested;

3
To the extent that this Application and the terms of the Engagement Letter are inconsistent, the terms of the
Engagement Letter shall control.
4
Pursuant to the Engagement Letter, a Restructuring Transaction shall mean and include any restructuring,
reorganization, rescheduling, or recapitalization of all or any material portion of the Debtors liabilities,
however such result is achieved, including without limitation through any one or more of the following means,
whether in one or a series of transactions: a plan of reorganization or going concern liquidation (a Plan)
confirmed in connection with any case or cases commenced by or against the Debtors or any of their
subsidiaries or affiliates, whether individually or on a consolidated basis (a Bankruptcy Case) under the
Bankruptcy Code, exchange offer, consent solicitation, covenant relief, rescheduling of debt maturities, change
in interest rates, settlement or forgiveness of debt, conversion of debt into equity, other amendments to the
terms of the Debtors debt instruments, issuance of new securities (other than to Apollo Investment Corporation
or its affiliates (Apollo)), sale or other transfer of equity, assets, or other interests of the Debtors other than to
Apollo.

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f. evaluate indications of interest and proposals regarding any Restructuring
Transaction from current or potential lenders, equity investors, or strategic
partners;
g. determine and evaluate the risks and benefits of considering, initiating, and
consummating any Restructuring Transaction;
h. determine values or ranges of values (as appropriate) for the Debtors and any
securities that the Debtors offer or propose to offer in connection with a
Restructuring Transaction;
i. be available at the Debtors request to meet with Debtors management, board of
directors/trustees/managers, creditor groups, equity holders, any official
committees appointed in the Chapter 11 Cases to discuss any Restructuring
Transaction and provide such parties with information about the Debtors assets,
properties, or businesses as may be appropriate and acceptable to the Debtors,
subject to customary business confidentiality agreements in form and substance
approved by the Debtors;
j. assist the Debtors in the development, preparation, and distribution of selected
information, documents, and other materials to facilitate the consummation of any
k. if requested by the Debtors, participate in hearings before this Court and provide
relevant testimony; and
l. such other financial advisory and investment banking services as may be agreed
upon by Moelis and the Debtors, and that is within the scope of the Engagement
Letter.
IV. Professional Compensation
14. Moeliss decision to advise and assist the Debtors in connection with these
Chapter 11 Cases is conditioned upon its ability to be compensated in accordance with the
compensation arrangement set forth in the Engagement Letter (the Fee Structure).
15. In summary, the Fee Structure provides for the following compensation:
a. Monthly Fee: A monthly fee of $200,000 per month in cash for each of the first
five monthly payments due under the Engagement Letter and a cash fee of
$175,000 per month during the remainder of the term of the Engagement Letter
(the Monthly Fee). Fifty percent of all Monthly Fees shall be credited against
the Restructuring Fee.

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b. Restructuring Fee: In addition to the Monthly Fee, a cash fee of $6,000,000 to be
paid immediately upon the consummation of a Restructuring Transaction
(a Restructuring Fee).
5

16. In addition to any fees payable to Moelis, the Debtors will reimburse Moelis for
all reasonable expenses incurred in connection with the Engagement Letter, up to a $300,000
aggregate expense cap.
17. The Fee Structure is consistent with and typical of compensation arrangements
entered into by Moelis and other comparable firms in connection with the rendering of similar
services under similar circumstances. In determining the Fee Structure to be paid to Moelis and
the reasonableness of such compensation, the Debtors compared Moeliss fee proposal to other
proposals received by the Debtors in the financial advisor and investment banking selection
process. After such comparison, the Debtors believe that the Fee Structure is in fact reasonable,
market based, and designed to fairly compensate Moelis for its work and to cover fixed and
routine overhead expenses.
18. Additionally, the Fee Structure reflects the difficulty and challenging nature of
Moeliss engagement. As such, Moeliss restructuring expertise, as well as its capital markets
knowledge, financing skills, and mergers and acquisitions expertise, some or all of which may be
required by the Debtors during the term of Moeliss engagement in these Chapter 11 Cases, were
important factors in determining the Fee Structure. The Debtors believe that the ultimate benefit
of Moeliss services cannot be measured by reference to the number of hours to be expended by
Moeliss professionals in the performance of such services. Indeed, the Debtors and Moelis have
agreed upon the Fee Structure anticipating that a substantial commitment of professional time

5
The Engagement Letter, which is attached hereto as Exhibit C, provides a more detailed description of the Fee
Structure.

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and effort will be required of Moelis and its professionals in connection with the Chapter 11
Cases and in light of the fact that (a) such commitment may foreclose other opportunities for
Moelis and (b) the actual time and commitment required of Moelis and its professionals to
perform its services under the Engagement Letter may vary substantially, thereby creating peak
load issues for Moelis.
19. The Debtors believe that Moeliss compensation should not be subject to the
standard of review under section 330 of the Bankruptcy Code; provided that the United States
Trustee for the Southern District of New York (the U.S. Trustee) alone should be entitled to
review Moeliss applications for payment of compensation and reimbursement of expenses under
the standards of section 330 of the Bankruptcy Code.
20. Moelis intends to apply for compensation for professional services rendered and
reimbursement of expenses incurred in connection with the Chapter 11 Cases. Notwithstanding
that Moelis is compensated on a fixed fee and contingency fee basis (rather than an hourly basis),
the Debtors have been informed that Moeliss restructuring professionals will nonetheless keep
summary time records describing their activities in one hour increments as well as the identity of
persons who performed such tasks. The Debtors also understand that Moelis will supplement
this information with a list of the non-restructuring professionals who assist the restructuring
professionals on this matter but who do not, as a matter of general practice (and would not in the
Chapter 11 Cases), keep time records.
21. Moreover, the Debtors have been informed by Moelis that it is not the general
practice of investment banking firms to keep detailed time records similar to those customarily
kept by attorneys and Moelis does not keep time records on a project category basis. To the
extent Moelis would otherwise be required to submit more detailed time records for its

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professionals by the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules, the
U.S. Trustees guidelines (the U.S. Trustee Guidelines) or any other applicable procedures
and orders of this Court, the Debtors request that Moelis be permitted to submit summary time
records of its restructuring professionals kept in one hour increments in applications for payment
of compensation, and that such time records not be required to be maintained on a project
category basis.
22. Moelis will maintain records (in summary format) of services rendered for the
Debtors including summary descriptions of those services, the approximate time expended in
providing those services and the restructuring professionals who provided those services.
Additionally, Moelis will maintain detailed records in support of any actual, necessary costs and
expenses incurred in connection with the rendering of its services in these Chapter 11 Cases.
Moelis will present such records as required by applicable orders of this Court. Accordingly, to
the extent necessary, based on the foregoing, the Debtors respectfully seek a waiver of the
information requirements of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy
Rules, the U.S. Trustee Guidelines and other applicable guidelines and orders of this Court.
23. Moelis and the Debtors have also agreed that in the event that Moelis seeks
reimbursement for attorneys fees during the term of the Chapter 11 Cases, the invoices and
supporting time records from such attorneys shall be included in Moeliss own application and
such invoices and time records shall be subject to the guidelines established by the U.S. Trustee
for compensation and reimbursement of expenses and the approval of the Court under the
standard of sections 330 and 331 of the Bankruptcy Code, without regard to whether such
attorneys have been retained under section 327 of the Bankruptcy Code and without regard to
whether such attorneys services satisfy section 330(a)(3)(C) of the Bankruptcy Code.

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24. The Debtors do not owe Moelis any fees for services performed or expenses
incurred under the Engagement Letter prior to the Petition Date. According to the books and
records of Moelis, during the 90 days prior to commencement of the Chapter 11 Cases, Moelis
received $851,370 for professional services performed and expenses incurred.
V. Indemnification, Contribution, and Reimbursement Provisions
6

25. As part of the overall compensation payable to Moelis under the terms of the
Engagement Letter, the Debtors have agreed to certain indemnification, contribution, and
reimbursement obligations. The Engagement Letter provides that the Debtors will indemnify
and hold harmless Moelis and its divisions, affiliates, current or former directors, officers,
partners, members, agents, or employees of Moelis or any of its affiliates, or any person
controlling Moelis or its affiliates, current or former directors, officers, partners, members,
agents, or employees (each, an Indemnified Person, and collectively, the Indemnified
Persons) under certain circumstances specified in the Engagement Letter. Both the Debtors
and Moelis believe that such provisions are customary and reasonable for financial advisory and
investment banking engagements, both out-of-court, and in chapter 11 cases. See, e.g., In re
Northwest Airlines Inc., Case No. 05-17930 (Bankr. S.D.N.Y. July 20, 2006); In re Calpine
Corp., Case No. 05-60200 (Bankr. S.D.N.Y. May 2, 2006); In re Delphi Corp., Case No.

6
This Application summarizes certain material provisions of Annex A to the Engagement Letter. The failure to
explicitly describe any provision of the Engagement Letter in this Application shall not be construed to limit the
scope effectiveness or the enforceability thereof. Moreover, to the extent that this Application and the terms of
Annex A to the Engagement Letter are inconsistent, the terms of Annex A to the Engagement Letter shall
control.

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05-44481 (Bankr. S.D.N.Y. Nov. 30, 2005); In re Tower Auto., Inc., Case No. 05-10578 (Bankr.
S.D.N.Y. June 15, 2005).
7

26. The Engagement Letters reimbursement, indemnification, and contribution
provisions were negotiated by the Debtors and Moelis at arms-length and in good faith. Further,
the indemnification provisions, viewed in conjunction with the other terms of Moeliss proposed
retention, are reasonable and in the best interests of the Debtors in light of the fact that the
Debtors require Moeliss services to successfully reorganize. Accordingly, the Debtors request
that the Court approve Moeliss retention, including the reimbursement, indemnification, and
contribution provisions reflected in Annex A to the Engagement Letter.
VI. Efforts to Avoid Duplication of Services
27. The Debtors intend that the services of Moelis will complement, and not
duplicate, the services being rendered by other professionals retained in the Chapter 11 Cases.
Moelis understands that the Debtors have retained and may retain additional professionals during
the term of the engagement. Moelis will work cooperatively with such advisors, and will use its
reasonable efforts to integrate any respective work conducted by the advisors on behalf of the
Debtors.
VII. Moeliss Disinterestedness
28. To the best of the Debtors knowledge and except to the extent disclosed in the
Derrough Declaration, Moelis does not (a) hold or represent an interest adverse to the Debtors
estates or (b) have any connection to the Debtors, their creditors, or other relevant parties.

7
Because of the voluminous nature of the orders cited herein, they are not attached to the Application. Copies of
these orders are available on request of Debtors counsel.

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29. To the extent that Moelis discovers new relevant material facts or relationships
bearing on the matters described herein during the period of Moeliss retention, Moelis will use
reasonable efforts to supplement the Derrough Declaration.
Basis for Relief
30. The Debtors seek approval of the Engagement Letter, including the Fee Structure
and the indemnification, contribution, and reimbursement provisions of the Engagement Letter,
pursuant to section 328(a) of the Bankruptcy Code. Section 328(a) of the Bankruptcy Code
provides, in relevant part, that the Debtors with the courts approval, may employ or authorize
the employment of a professional person under section 327 . . . on any reasonable terms and
conditions of employment, including on a retainer, on an hourly basis, on a fixed or percentage
fee basis, or on a contingent fee basis . . . . 11 U.S.C. 328(a). Accordingly, section 328
permits the compensation of professionals, including investment bankers and financial advisors,
on more flexible terms that reflect the nature of their services and market conditions. As the
United States Court of Appeals for the Fifth Circuit recognized in Donaldson Lufkin & Jenrette
Sec. Corp. v. Natl Gypsum (In re Natl Gypsum Co.):
Prior to 1978 the most able professionals were often unwilling to
work for bankruptcy estates where their compensation would be
subject to the uncertainties of what a judge thought the work was
worth after it had been done. That uncertainty continues under the
present 330 of the Bankruptcy Code, which provides that the
court award to professional consultants reasonable compensation
based on relevant factors of time and comparable costs, etc. Under
present 328 the professional may avoid that uncertainty by
obtaining court approval of compensation agreed to with the
trustee (or debtor or committee).
123 F.3d 861, 862 (5th Cir. 1997) (internal citations and emphasis omitted).

31. Further, under the Bankruptcy Abuse Prevention and Consumer Protection Act of
2005, certain modifications were made to section 328(a), which now provides as follows:

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The trustee, or a committee appointed under section 1102 of this title, with the
courts approval, may employ or authorize the employment of a professional
person under section 327 or 1103 of this title, as the case may be, on any
reasonable terms and conditions of employment, including on a retainer, on an
hourly basis, on a fixed or percentage fee basis, or on a contingent fee basis.
See 11 U.S.C. 328(a) (emphasis added). Section 328(a), as amended, now makes clear that
debtors may retain, subject to bankruptcy court approval, a professional on a fixed-fee basis such
as the Fee Structure included in the Engagement Letter.
32. As set forth above, and notwithstanding approval of the Engagement Letter under
section 328, Moelis intends to apply for compensation for professional services rendered and
reimbursement of expenses incurred in connection with these Chapter 11 Cases subject to the
Courts approval and in compliance with applicable provisions of the Bankruptcy Code, the
Bankruptcy Rules, the Local Bankruptcy Rules, guidelines established by the Office of the
United States Trustee for the Southern District of New York (the U.S. Trustee Guidelines),
and any other applicable procedures and orders of the Court and consistent with the Fee
Structure.
33. The Debtors believe that the Fee Structure appropriately reflects the nature and
scope of services to be provided by Moelis, Moeliss substantial experience with respect to
investment banking and financial advisory services, and the fee structures typically utilized by
Moelis and other leading investment banks and financial advisors who do not bill their clients on
an hourly basis.
34. Indeed, monthly fee and transaction fee arrangements in other large
chapter 11 cases have been routinely approved and implemented by courts in this jurisdiction and
others. See, e.g., Ion Media Networks, Inc., Case No. 09-13125 (Bankr. S.D.N.Y. July 13, 2009);
In re Charter Commcns, Inc., Case No. 09-11435 (Bankr. S.D.N.Y. Apr. 15, 2009); In re
Tronox Inc., Case No. 09-10156 (Bankr. S.D.N.Y. Apr. 7, 2009); In re Northwest Airlines Inc.,

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Case No. 05-17930 (Bankr. S.D.N.Y. July 20, 2006); In re Calpine Corp., Case No. 05-60200
(Bankr. S.D.N.Y. May 2, 2006); In re Delphi Corp., Case No. 05-44481 (Bankr. S.D.N.Y. Nov.
30, 2005); In re Tower Auto., Inc., Case No. 05-10578 (Bankr. S.D.N.Y. June 15, 2005).
35. In light of the foregoing, and given the numerous issues that Moelis may be
required to address in the performance of its services hereunder, Moeliss commitment to the
variable level of time and effort necessary to address all such issues as they arise and the market
prices for Moeliss services for engagements of this nature, the Debtors believe that the terms
and conditions of the Engagement Letter (including the Fee Structure) and Annex A thereto are
fair, reasonable, and market-based under the standards set forth in section 328(a) of the
Bankruptcy Code.
Motion Practice
36. This Application includes citations to the applicable rules and statutory authorities
upon which the relief requested herein is predicated and a discussion of their application to this
Application. Accordingly, the Debtors submit that this Application satisfies Local Bankruptcy
Rule 9013-1(a).
Notice
37. The Debtors have provided notice of this Application to: (a) the Office of the
United States Trustee for the Southern District of New York; (b) the entities listed on the
Consolidated List of Creditors Holding the 50 Largest Unsecured Claims; (c) the Debtors
prepetition secured lenders or, if known, their counsel; (d) counsel to the agent for the Debtors
proposed postpetition secured lenders; (e) counsel to Apollo Investment Corporation; (f) the
parties to the Debtors franchise agreements or, if known, their counsel; (g) the attorneys general
for each of the States in which any of the Debtors conduct a substantial amount of its business

17

K&E 16673425
operations; (h) the Internal Revenue Service; and (i) those parties who have formally filed a
request for notice in the Chapter 11 Cases pursuant to Bankruptcy Rule 2002.
No Prior Request
38. No prior request for the relief sought in this Application has been made to this or
any other court.

WHEREFORE, the Debtors respectfully request that the Court enter an order,
substantially in the form attached hereto as Exhibit A, granting the relief requested herein and
granting such other relief as is just and proper.
New York, New York
Dated: , 2010
Chief Financial Officer
Innkeepers USA Trust
J
u
l
y

1
9

K&E 16673425
EXHIBIT A
Proposed Order

K&E 16673425
)
In re: ) Chapter 11
)
1
) Case No. 10-__________(___)
)
)
ORDER AUTHORIZING AND
APPROVING THE RETENTION AND EMPLOYMENT OF
BANKER TO THE DEBTORS, NUNC PRO TUNC TO THE PETITION DATE
1

1

3

K&E 16673425
Upon the application (the Application)
2
of the Debtors, as debtors and debtors
in possession (collectively, the Debtors), for the entry of an order (this Order) authorizing
the Debtors to retain and employ Moelis as financial advisor and investment banker, nunc pro
tunc to the Petition Date, all as more fully set forth in the Application and the Engagement
Letter; and upon the First Day Declaration and the Derrough Declaration; and the Court having
found that the Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334; and
the Court having found that this is a core proceeding pursuant to 28 U.S.C. 157(b)(2); and the
Court having found that venue of this proceeding and the Application in this district is proper
pursuant to 28 U.S.C. 1408 and 1409; and the Court having found that the relief requested in
the Application is in the best interests of the Debtors estates, their creditors, and other parties in
interest; and the Debtors having provided appropriate notice of the Application and the
opportunity for a hearing on the Application under the circumstances; and the Court having
reviewed the Application and having heard the statements in support of the relief requested
therein before the Court (the Hearing); and the Court having determined that the legal and
factual bases set forth in the Application and at the Hearing establish just cause for the relief
granted herein; and upon all of the proceedings had before the Court; and after due deliberation
and sufficient cause appearing therefor, it is HEREBY ORDERED THAT:
1. The Application is granted in its entirety to the extent provided herein.
2. The Debtors are authorized to retain and employ Moelis as their financial advisor
and investment banker in these Chapter 11 Cases pursuant to that certain engagement letter,

2
All capitalized terms used but otherwise not defined herein shall have the meanings set forth in the Application.

4

K&E 16673425
dated as of March 24, 2010, by and between the Debtors and Moelis (the Engagement
Letter), nunc pro tunc to the Petition Date.
3. Moelis shall be compensated in accordance with the terms of the Engagement
Letter, and, in particular, all of Moeliss fees and expenses in these Chapter 11 Cases, including
without limitation the Monthly Fee, the Restructuring Fee, and the indemnification, contribution
and reimbursement provisions of the Engagement Letter, are approved pursuant to section 328(a)
of the Bankruptcy Code.
4. All compensation and reimbursement of expenses payable to Moelis pursuant to
the Engagement Letter shall be subject to review only pursuant to the standards set forth in
section 328(a) of the Bankruptcy Code and shall not be subject to the standard of review set forth
in section 330 of the Bankruptcy Code; provided, however, that the U.S. Trustee alone shall be
entitled to review applications for payment of compensation and reimbursement of expenses by
Moelis under the standards set forth in section 330 of the Bankruptcy Code.
5. Moelis and the Debtors agree that in the event that Moelis seeks reimbursement
for attorneys fees during the term of the Chapter 11 Cases, the invoices and supporting time
records from such attorneys shall be included in Moeliss own application and such invoices and
time records shall be subject to the guidelines established by the U.S. Trustee for compensation
and reimbursement of expenses and the approval of the Court under the standard of sections 330
and 331 of the Bankruptcy Code, without regard to whether such attorneys have been retained
under section 327 of the Bankruptcy Code and without regard to whether such attorneys
services satisfy section 330(a)(3)(C) of the Bankruptcy Code.
6. Notwithstanding paragraph 4 hereof, Moelis shall file fee applications for interim
and final allowance of compensation and reimbursement of expenses pursuant to the procedures

5

K&E 16673425
set forth in sections 330 and 331 of the Bankruptcy Code and the Bankruptcy Rules and such
procedures as may be fixed by order of this Court, as may be modified or amended; provided,
however, that (a) Moeliss restructuring professionals who provide services to or on behalf of the
Debtors shall keep contemporaneous summary time records of the services they have performed
in one hour increments, (b) Moelis shall supplement this information with a list of the non-
restructuring professionals who assist the restructuring professionals on this matter, but such
non-restructuring professionals shall not be obligated to maintain time records, (c) Moeliss
restructuring professionals shall not be obligated to keep time records on a project category
basis, and (d) Moelis shall not be required to provide or conform to any schedule of hourly rates.
7. The provisions of Annex A to the Engagement Letter are approved in their
entirety.
8. Notice of the Application as provided therein shall be deemed good and sufficient
notice.
9. The terms and conditions of this Order shall be immediately effective and
enforceable upon its entry.
10. All time periods set forth in this Order shall be calculated in accordance with
Bankruptcy Rule 9006(a).
11. The Debtors are authorized to take all actions necessary to effectuate the relief
granted pursuant to this Order in accordance with the Application.

6

K&E 16673425
12. The Court retains jurisdiction with respect to all matters arising from or related to
the implementation of this Order.
New York, New York
Date: _____________, 2010 United States Bankruptcy Judge

K&E 16673425
EXHIBIT B

Derrough Declaration

K&E 16673425
)
In re: ) Chapter 11
)
1
) Case No. 10-__________(___)
)
)
DECLARATION OF
WILLIAM Q. DERROUGH IN SUPPORT OF THE
APPLICATION FOR THE ENTRY OF AN ORDER AUTHORIZING
AND APPROVING THE RETENTION AND EMPLOYMENT OF
BANKER TO THE DEBTORS, NUNC PRO TUNC TO THE PETITION DATE
1

1

2

K&E 16673425
I, William Q. Derrough, hereby declare:
1. I am over the age of 18 and competent to testify. I am a Managing Director of
Moelis & Company LLC (Moelis), resident in Moeliss New York office, located at 399 Park
Avenue, 5th Floor, New York, New York 10022. If called and sworn as a witness, I could and
would testify competently to the matters set forth herein.
2. This Declaration is made in support of the Debtors
2
Application for the Entry of
an Order Authorizing and Approving the Retention and Employment of Moelis & Company
LLC as Financial Advisor and Investment Banker to the above-captioned Debtors,

nunc pro tunc
to the Petition Date, which has been filed contemporaneously herewith (the Application). The
facts set forth in this Declaration are based upon my personal knowledge, upon information and
belief, or upon client matter records kept in the ordinary course of business that were reviewed
by me or other employees of Moelis under my supervision and direction. The procedures
pursuant to which Moelis determined whether there were any connections between Moelis and
interested parties in these cases is described below.
I. Moeliss Qualifications
3. Moelis is a financial advisory and investment banking firm with its principal
office located at 399 Park Avenue, 5th Floor, New York, New York 10022. Moelis is a
registered broker-dealer with the United States Securities and Exchange Commission and is a
member of the Financial Industry Regulatory Authority and the Securities Investor Protection
Corporation. Moelis was founded in 2007 and is a wholly-owned subsidiary of Moelis &

2
All capitalized terms used but otherwise not defined herein shall have the meanings set forth in the Application.

3

K&E 16673425
Company Holdings LLC, a privately-owned company. Moelis & Company Holdings LLC,
together with its subsidiaries, has approximately 300 employees located in offices in New York,
Los Angeles, Boston, Chicago, London, and Sydney.
4. Moelis provides a broad range of financial advice to its clients, including, with
respect to: (a) corporate restructurings; (b) general corporate finance; (c) mergers, acquisitions
and divestitures; (d) special committee assignments; and (e) capital raising. Moelis and its
professionals have extensive experience in the reorganization and restructuring of distressed
companies, both out-of-court and in Chapter 11 proceedings. Moeliss business reorganization
professionals have served as financial and strategic advisors to various parties (including
debtors) in numerous Chapter 11 cases, including, among others: In re Neenah Enters, Inc.,
Case No. 10-10360 (Bankr. D. Del. Feb. 2, 2010); In re Atrium Cos., Inc., Case No. 10-10150
(Bankr. D. Del. Mar. 18, 2010); In re Simmons Bedding Co., Case No. 09-14037 (Bankr. D. Del.
Nov. 16, 2009); In re Readers Digest Assn Inc., Case No. 09-23529 (Bankr. S.D.N.Y. Aug. 24,
2009); In re NV Broadcasting LLC, Case No. 09-12473 (Bankr. D. Del. Aug. 5, 2009); In re
Fontainebleau Las Vegas Holdings LLC, Case No. 09-21481 (Bankr. S.D. Fla. Aug. 3, 2009); In
re ION Media Networks Inc., Case No. 09-13125 (Bankr. S.D.N.Y. July 13, 2009); In re J.G.
Wentworth LLC, Case No. 09-11731 (Bankr. D. Del. May 19, 2009); In re Source Interlink Cos.,
Case No. 09-11424 (Bankr. D. Del. May 22, 2009); In re Dayton Superior Corp., Case No. 09-
11351 (Bankr. D. Del. May 19, 2009); In re Idearc Inc., Case No. 09-31828 (Bankr. N.D. Tex.
May 27, 2009); In re Aleris Intl Inc., Case No. 09-10478 (Bankr. D. Del. Mar. 16, 2009); In re
Muzak Holdings LLC, Case No. 09-10422 (Bankr. D. Del. Apr. 7, 2009); In re Hartmarx Corp.,
Case No. 09-02046 (Bankr. N.D. Ill. Mar. 4, 2009); In re Lyondell Chemical Co., Case No. 09-
10023 (Bankr. S.D.N.Y. Jan. 6, 2009); In re Tribune Co., Case No. 08-13141 (Bankr. D. Del.

4

K&E 16673425
Mar. 13, 2008); In re Pilgrims Pride Corp., Case No. 08-45664 (Bankr. N.D. Tex. Feb. 3,
2009); In re Motor Coach Indus. Intl Inc., Case No. 08-12136 (Bankr. D. Del. Sep. 15, 2008); In
re Greektown Holdings LLC, Case No. 08-53104 (Bankr. E.D. Mich. Oct. 15, 2008); In re
Pappas Telecasting Inc., Case No. 08-10916 (Bankr. D. Del. July 30, 2008); In re Tropicana
Entmt LLC, Case No. 08-10856 (Bankr. D. Del. May 5, 2008); In re Tousa Inc., Case No. 08-
10928 (Bankr. S.D. Fla. Aug. 27, 2008); In re Delphi Corp., Case No. 05-44481 (Bankr.
S.D.N.Y. Oct. 8, 2005).
5. The Debtors informed me that they have selected Moelis as their financial advisor
based upon, among other things, (a) the Debtors need to retain a financial advisory firm to
provide advice with respect to the Debtors restructuring activities and (b) Moeliss recognized
expertise and extensive experience in providing advisory services to broadcasting and other
companies in connection with the restructuring of distressed debt in complex chapter 11 cases
and out-of-court restructurings. Moreover, and as explained herein, Moelis has been advising the
Debtors on a prepetition basis and, as a result, has gained valuable knowledge about the Debtors
business and operations.
6. As of approximately March 24, 2010, the Debtors engaged Moelis to provide
general investment banking and financial advice in connection with the Debtors attempts to
complete a strategic restructuring, reorganization, and/or recapitalization of all or a significant
portion of the Debtors outstanding indebtedness, as well as to prepare for the potential
commencement of the Chapter 11 Cases.
7. In rendering prepetition services to the Debtors in connection with these matters,
Moelis has worked closely with the Debtors management and other retained professionals and
has become well-acquainted with the Debtors business operations and capital structure.

5

K&E 16673425
Accordingly, Moelis has developed significant expertise regarding the Debtors that will assist it
in its provision of effective and efficient services during the Chapter 11 Cases.
II. Services To Be Provided by Moelis
8. I understand that Moeliss resources, capabilities, and experience are crucial to
the Debtors successful restructuring. An experienced financial advisory firm and investment
bank such as Moelis fulfills a critical need that complements the services offered by the Debtors
other restructuring professionals. Primarily, Moelis will assist in the evaluation of strategic
alternatives and render financial advisory services to the Debtors in connection with their
ongoing restructuring efforts. For these reasons, I understand that the Debtors require the
services of a capable and experienced financial advisory firm and investment bank such as
Moelis.
9. Subject to further order of the Court and consistent with the Engagement Letter
(as defined below), Moelis proposes to render the following financial advisory and investment
banking services as necessary or requested by the Debtors:
3

a. undertake, in consultation with members of management of the Debtors, a
comprehensive business and financial analysis of the Debtors;
b. evaluate the Debtors debt capacity and assist in the determination of an
appropriate capital structure for the Debtors;
c. as deemed desirable by the Debtors, identify, initiate, review, negotiate, and
evaluate any Restructuring Transaction,
4
and, if directed, develop and evaluate

3
To the extent that this Declaration and the terms of the Engagement Letter are inconsistent, the terms of the
Engagement Letter shall control.
4
Pursuant to the Engagement Letter, a Restructuring Transaction shall mean and include any restructuring,
reorganization, rescheduling, or recapitalization of all or any material portion of the Debtors liabilities,
however such result is achieved, including without limitation through any one or more of the following means,
whether in one or a series of transactions: a plan of reorganization or going concern liquidation (a Plan)

6

K&E 16673425
d. assist the Debtors in developing strategies to effectuate any Restructuring
Transaction;
e. advise and assist the Debtors in the course of their negotiation of any
f. evaluate indications of interest and proposals regarding any Restructuring
Transaction from current or potential lenders, equity investors, or strategic
partners;
g. determine and evaluate the risks and benefits of considering, initiating, and
consummating any Restructuring Transaction;
h. determine values or ranges of values (as appropriate) for the Debtors and any
securities that the Debtors offer or propose to offer in connection with a
i. be available at the Debtors request to meet with Debtors management, board of
directors/trustees/managers, creditor groups, equity holders, any official
committees appointed in the Chapter 11 Cases to discuss any Restructuring
Transaction and provide such parties with information about the Debtors assets,
properties, or businesses as may be appropriate and acceptable to the Debtors,
subject to customary business confidentiality agreements in form and substance
approved by the Debtors;
j. assist the Debtors in the development, preparation, and distribution of selected
information, documents, and other materials to facilitate the consummation of any
k. if requested by the Debtors, participate in hearings before this Court and provide
l. such other financial advisory and investment banking services as may be agreed
upon by Moelis and the Debtors, and that is within the scope of the Engagement
Letter.

confirmed in connection with any case or cases commenced by or against the Debtors or any of their
subsidiaries or affiliates, whether individually or on a consolidated basis (a Bankruptcy Case) under the
Bankruptcy Code, exchange offer, consent solicitation, covenant relief, rescheduling of debt maturities, change
in interest rates, settlement or forgiveness of debt, conversion of debt into equity, other amendments to the
terms of the Debtors debt instruments, issuance of new securities (other than to Apollo Investment Corporation
or its affiliates (Apollo)), sale or other transfer of equity, assets, or other interests of the Debtors other than to
Apollo.

7

K&E 16673425
III. Professional Compensation
10. Moelis has provided and agrees to continue to provide assistance to the Debtors in
accordance with the terms and conditions set forth in that certain engagement letter dated as of
March 24, 2010, by and between the Debtors and Moelis (the Engagement Letter), a copy of
which is annexed to the Application as Exhibit C and is incorporated by reference herein.
11. It is the intention of Moelis to seek compensation for its services as described in
the Engagement Letter in accordance with the Bankruptcy Code, the Bankruptcy Rules, the U.S.
Trustee Guidelines and any other applicable procedures and orders of the Court. In summary,
the Engagement Letter provides for the following compensation:
a. Monthly Fee: A monthly fee of $200,000 per month in cash for each of the first
five monthly payments due under the Engagement Letter and a cash fee of
$175,000 per month during the remainder of the term of the Engagement Letter
(the Monthly Fee). Fifty percent of all Monthly Fees shall be credited against
the Restructuring Fee.
b. Restructuring Fee: In addition to the Monthly Fee, a cash fee of $6,000,000 to be
paid immediately upon the consummation of a Restructuring Transaction
(a Restructuring Fee).
5

12. In addition to any fees payable to Moelis, the Debtors will reimburse Moelis for
all reasonable expenses incurred in connection with the Engagement Letter, up to a $300,000
aggregate expense cap.
13. I believe that the terms of Moeliss employment and compensation are consistent
with employment and compensation arrangements typically entered into by Moelis when
providing financial advice to clients both inside and outside of bankruptcy. I also believe that
Moeliss employment and compensation arrangements are competitive with those entered into by

5
The Engagement Letter, which is attached to the Application as Exhibit C, provides a more detailed description
of the Fee Structure.

8

K&E 16673425
other financial advisory firms when rendering comparable services. Given the numerous issues
that Moelis may be required to address in these Chapter 11 Cases, Moeliss commitment to the
variable levels of time and effort necessary to address all such issues as they arise, and the
market price for Moeliss services in engagements of this nature both out-of-court and in chapter
11 contexts, I believe that the foregoing compensation requirements are both reasonable and
market-based.
14. I respectfully submit that the requirements of Bankruptcy Rule 2016 be tailored to
the nature of Moeliss engagement and its compensation structure. Moelis has requested,
pursuant to section 328(a) of the Bankruptcy Code, payment of its fees on a fixed rate and
contingency fee basis which is customary in the financial advisor and investment banking
industry. It is not the general practice of investment banking firms to keep detailed time records
similar to those customarily kept by attorneys. Moeliss restructuring professionals, when
formally retained in chapter 11 cases, and when required by local rules, do, and in these Chapter
11 Cases will, keep time records in one hour increments describing their daily activities and the
identity of persons who performed such tasks. Also, Moelis will supplement this information
with a list of the non-restructuring professionals who assist the restructuring department on this
matter but who do not, as a matter of general practice, (and would not in these Chapter 11 Cases)
keep time records. In addition, apart from the time recording practices described above,
Moeliss restructuring personnel do not maintain their time records on a project category basis.
Accordingly, to the extent necessary, based on the foregoing, Moelis respectfully seeks waiver of
the information requirements of the Bankruptcy Code, the Bankruptcy Rules, the Local
Bankruptcy Rules, the U.S. Trustee Guidelines, and any other applicable procedures and orders
of this Court.

9

K&E 16673425
15. Additionally, under the terms of the Engagement Letter, the Debtors have agreed
to reimburse Moeliss out-of-pocket expenses. Such expense reimbursement is standard in the
investment banking industry, and Moelis believes that its request is fair and reasonable. Further,
except as necessary to comply with an applicable order of this Court, all such expense billings
would be in accordance with Moeliss customary practices.
16. Moelis will maintain records (in summary format) of services rendered for the
Debtors including summary descriptions of those services, the approximate time (in hourly
increments) expended in providing those services, and the restructuring professionals who
provided those services. Additionally, Moelis will maintain detailed records in support of any
actual, necessary costs and expenses incurred in connection with the rendering of its services in
these Chapter 11 Cases. Moelis will present such records as required by applicable orders of this
Court. Moelis will file interim and final fee applications for the allowance of compensation for
services rendered and reimbursement of expenses incurred. Moelis may combine any request for
payment of any of the above listed fees with its final fee application.
17. Moelis and the Debtors have also agreed that in the event that Moelis seeks
reimbursement for attorneys fees during the term of the Chapter 11 Cases, the invoices and
supporting time records from such attorneys shall be included in Moeliss own application and
such invoices and time records shall be subject to the guidelines established by the U.S. Trustee
for compensation and reimbursement of expenses and the approval of the Court under the
standard of sections 330 and 331 of the Bankruptcy Code, without regard to whether such
attorneys have been retained under section 327 of the Bankruptcy Code and without regard to
whether such attorneys services satisfy section 330(a)(3)(C) of the Bankruptcy Code.

10

K&E 16673425
18. The Debtors do not owe Moelis any fees for services performed or expenses
incurred under the Engagement Letter prior to the Petition Date. According to the books and
records of Moelis, during the 90 days prior to commencement of the Chapter 11 Cases, Moelis
received approximately $851,370 for professional services performed and expenses incurred.
19. Pursuant to the Engagement Letter, the Debtors have agreed to reimburse,
indemnify, and hold Moelis and other Indemnified Persons (as defined in Annex A to the
Engagement Letter) harmless against, and not hold any Indemnified Person responsible for, any
losses, claims, damages, or liabilities in connection with the services it provides to the Debtors
related to these Chapter 11 Cases, except for any losses, claims, damages, or liabilities, and
expenses related thereto, that are finally determined by a court or arbitral tribunal to have
resulted primarily from the bad faith, gross negligence or willful misconduct of an Indemnified
Person.
6

20. No promises have been received by Moelis as to compensation in connection with
these Chapter 11 Cases, other than as outlined in the Engagement Letter, and Moelis has no
agreement with any other entity to share any compensation received with any person other than
the principals and employees of Moelis, pursuant to section 504 of the Bankruptcy Code.
21. Moelis agreed upon the reimbursement, indemnification, and contribution terms
and conditions of the Engagement Letter with the Debtors at arms-length and after good faith
negotiation. Further, the indemnification, contribution, and reimbursement provisions contained
in Annex A of the Engagement Letter, viewed in conjunction with the other terms of Moeliss

6
This Declaration summarizes certain material provisions of Annex A to the Engagement Letter. The failure to
explicitly describe any provision of the Engagement Letter in this Declaration shall not be construed to limit the
scope effectiveness or the enforceability thereof. Moreover, to the extent that this Declaration and the terms of
Annex A to the Engagement Letter are inconsistent, the terms of Annex A to the Engagement Letter shall
control.

11

K&E 16673425
proposed retention, are reasonable and in the best interests of the Debtors in light of the fact that
the Debtors require Moeliss services to successfully reorganize.
IV. Moeliss Disinterestedness
22. In connection with its proposed retention by the Debtors in these Chapter 11
Cases, Moelis undertook to determine whether it had any conflicts or other relationships that
might cause it not to be disinterested or to hold or represent an interest adverse to the Debtors.
Specifically, Moelis obtained from the Debtors and/or their representatives the names of
individuals and entities that may be parties in interest in the Chapter 11 Cases
(the Potential Parties in Interest) and such parties are listed on Schedule 1 attached hereto.
Moelis then (a) researched its internal records and (b) issued a general inquiry to its officers to
determine whether Moelis has any connections with the Debtors and any Potential Parties in
Interest. To the extent that I have been able to ascertain that Moelis has been retained within the
last three years to represent any of the Potential Parties in Interest (or their affiliates, as the case
may be) in matters unrelated to these cases, such facts are disclosed on Schedule 2 attached
hereto.
23. Except as otherwise set forth herein, to the best of my knowledge, neither I,
Moelis, nor any of its professionals:
a. is a creditor, equity security holder, or insider of the Debtors;
b. is or has been within two years of the Petition Date, an officer, director, or
employee of the Debtors;
c. has any interest materially adverse to the interests of the Debtors estates or of any
class of creditors or equity security holders, by reason of any direct or indirect
relationship to, connection with, or interest in, the Debtors; or
d. is related to any judge of this Court, the U.S. Trustee for this District, or the U.S.
Trustee assigned to these Chapter 11 Cases; however, Moelis has not reviewed
the relationship that the members of Moeliss engagement team serving the

12

K&E 16673425
Debtors may have against a comprehensive list of employees within the U.S.
Trustees office.
24. In addition to the facts disclosed above and on Schedule 2 hereto, Moelis (a) may
have hired, had mutual clients with or had other relationships with, (b) may currently have hired,
have mutual clients with or have relationships with and (c) may in the future hire, have mutual
clients with or have relationships with certain law firms, accounting firms, other professionals
and banks that are Potential Parties in Interest. As part of its diverse practices, Moelis appears in
numerous cases and proceedings, and participates in transactions that involve many different
parties, and may in the future unrelated to these Chapter 11 Cases perform financial advisory
services for, or have relationships with, various parties, some of whom may be Potential Parties
in Interest. Based on Moeliss current knowledge of the parties involved, and to the best of my
knowledge, none of these relationships create interests materially adverse to the Debtors in
matters upon which Moelis is to be employed, and none are in connection with the Chapter 11
Cases.
25. Moelis has been engaged in previous matters in which Apollo Investment
Corporation or one or more affiliates thereof (Apollo) was a member of a client group or was
an interested party. For example, Moelis has advised ad hoc committees of creditors (such as ad
hoc groups of bondholders and secured lenders) in restructuring engagements involving entities
other than the Debtors, where Apollo was a member of the ad hoc committee. In addition,
Moelis has advised and may in the future advise companies in restructuring and non-
restructuring transactions unrelated to these Chapter 11 Cases, where Apollo is an equity holder
of, a lender to, or another interested party of, such companies. A list of the Unrelated Apollo
Matters of which I currently am aware is attached hereto as Schedule 3. None of Moelis
services or advice in the matters described in this paragraph (collectively, the Unrelated Apollo

13

K&E 16673425
Matters) are related to the Debtors or these chapter 11 cases. Additionally, in connection with
providing investment banking services to its clients in restructuring and non-restructuring
matters, Moelis has contacted Apollo from time to time to inquire about whether Apollo would
consider making investments with or loans to Moeliss clients. Moelis has not been engaged to
advise Apollo with respect to the Debtors or these chapter 11 cases, and Moelis does not intend
to provide services or advice to Apollo with respect to the Debtors or these chapter 11 cases.
26. Moelis does not believe it is a creditor of any of the Debtors within the meaning
of section 101(10) of the Bankruptcy Code. Further, and to the best of my knowledge, neither I
nor any member of the Moeliss engagement team serving the Debtors is a holder of any of the
Debtors debt or equity securities.
27. Moelis & Company Holdings LLCs private equity business (Moelis Capital
Partners) holds investment positions in various entities, some of which may be parties in
interest in these Chapter 11 Cases. To the best of my knowledge, Moelis Capital Partners does
not hold any investment positions that constitute a conflict of interest that would disqualify
Moelis from providing services described in the Engagement Letter. Furthermore, Moelis
Capital Partners does not share any information relating to its investment activities with the
Moelis professionals seeking retention in these cases, and the Moelis professionals providing
services to the Debtors will not share confidential or otherwise non-public information they
receive in the course of this engagement with Moelis Capital Partners. Accordingly, Moelis
Capital Partners investment activities do not constitute a conflict of interest that would
disqualify Moelis from providing services described in the Engagement Letter.
28. Other than as disclosed herein, Moelis has no relationship with the Debtors of
which I am aware after due inquiry. However, given the large number of creditors and other

14

K&E 16673425
parties in interest in a chapter 11 case, there may be other creditors and parties in interest that are
served by Moelis. Despite the efforts described above to identify and disclose Moeliss
relationships with parties in interest in the Chapter 11 Cases, Moelis is unable to state with
certainty that every client relationship or other connection has been disclosed. Continued inquiry
will be made following the presentment of the Application, on a periodic basis, with additional
disclosures to this Court if necessary or otherwise appropriate.
29. Based upon all of the foregoing, I believe Moelis is a disinterested person as
that term is defined in section 101(14) of the Bankruptcy Code and does not hold or represent an
interest adverse to the Debtors or their estates.
30. I understand that the Debtors intend that the services of Moelis will complement,
and not duplicate, the services being rendered by other advisors also retained in the Chapter 11
Cases. Moelis understands that the Debtors have retained and may retain additional advisors
during the term of the engagement and will work cooperatively with such advisors, and will use
its reasonable efforts (a) to integrate any respective work conducted by the advisors on behalf of
the Debtors and (b) not to duplicate the services performed by other advisors.

[Signature Block on Next Page]
Pursuant to 28 U.S.C. 1746, I declare under the penalty of perjury that the foregoing is
true and correct.
Moelis & Company LLC
William Q. ___ _
Managing Director

K&E 16673425
Schedule 1

Apollo Investment Corp.
Apollo Investment Corp. (Maryland BDC)
Gencom Entity
Genwood Raleigh Lessee LLC
Genwood Raleigh LLC
GP AC Sublessee LLC
Grand Prix Acquisition Trust
Grand Prix Addison (RI) LLC
Grand Prix Addison (SS) LLC
Grand Prix Albany LLC
Grand Prix Altamonte LLC
Grand Prix Anaheim Orange Lessee LLC
Grand Prix Arlington LLC
Grand Prix Atlanta (Peachtree Corners) LLC
Grand Prix Atlanta LLC
Grand Prix Atlantic City LLC
Grand Prix Bellevue LLC
Grand Prix Binghamton LLC
Grand Prix Bothell LLC
Grand Prix Bulfinch LLC
Grand Prix Campbell / San Jose LLC
Grand Prix Cherry Hill LLC
Grand Prix Chicago LLC
Grand Prix Columbia LLC
Grand Prix Denver LLC
Grand Prix East Lansing LLC
Grand Prix El Segundo LLC
Grand Prix Englewood Denver South LLC
Grand Prix Fixed Lessee LLC
Grand Prix Floating Lessee LLC
Grand Prix Fremont LLC
Grand Prix Ft. Lauderdale LLC
Grand Prix Ft. Wayne LLC
Grand Prix Gaithersburg LLC
Grand Prix General Lessee LLC
Grand Prix Germantown LLC
Grand Prix Grand Rapids LLC
Grand Prix Harrisburg LLC
Grand Prix Holdings LLC
Grand Prix Horsham LLC
Grand Prix IHM Inc.
Grand Prix Indianapolis LLC
Grand Prix Islandia LLC
Grand Prix Las Colinas LLC
Grand Prix Lexington LLC
Grand Prix Livonia LLC
Grand Prix Lombard LLC
Grand Prix Louisville (RI) LLC
Grand Prix Lynnwood LLC
Grand Prix Mezz Borrower 2 Floating LLC
Grand Prix Mezz Borrower Fixed LLC
Grand Prix Mezz Borrower Floating 2 LLC
Grand Prix Mezz Borrower Floating LLC
Grand Prix Mezz Borrower Term LLC
Grand Prix Montvale LLC
Grand Prix Morristown LLC
Grand Prix Mountain View LLC
Grand Prix Mt. Laurel LLC
Grand Prix Naples LLC
Grand Prix Ontario Lessee LLC
Grand Prix Ontario LLC
Grand Prix Portland LLC
Grand Prix Richmond (Northwest) LLC
Grand Prix Richmond LLC
Grand Prix RIGG Lessee LLC
Grand Prix RIMV Lessee LLC
Grand Prix Rockville LLC
Grand Prix Saddle River LLC
Grand Prix San Jose LLC
Grand Prix San Mateo LLC
Grand Prix Schaumburg LLC
Grand Prix Shelton LLC
Grand Prix Sili I LLC
Grand Prix Sili II LLC
Grand Prix Tallahasee LLC
Grand Prix Term Lessee LLC
Grand Prix Troy (Central) LLC
Grand Prix Troy (SE) LLC
Grand Prix Tukwila LLC
Grand Prix West Palm Beach LLC
Grand Prix Westchester LLC
Grand Prix Wichita LLC
Grand Prix Willow Grove LLC
Grand Prix Windsor LLC
Grand Prix Woburn LLC
Innkeepers Financial Corp. (General
Partner)
Innkeepers Financial Corp. (Virginia Corp.)

NY\1654978.2 ION Moelis Application - K&E 5/13/09K&E 16673425
Innkeepers Hospitality Management Inc.
Innkeepers USA LP
KPA HI Ontario LLC
KPA HS Anaheim LLC
KPA Leaseco Holding Inc.
KPA Leaseco Inc.
KPA Raleigh Leaseco LLC
KPA Raleigh LLC
KPA RIGG LLC
KPA RIMV LLC
KPA San Antonio HS LLC
KPA San Antonio LLC
KPA Tysons Corner RI LLC
KPA Washington DC DT LLC
KPA Washington DC LLC
KPA/GP Ft. Walton LLC
KPA/GP Louisville (HI) LLC
KPA/GP Valencia LLC
Craven, Dennis M.
Fenton, Richard F.
Martin, Bob
Murphy, Mark A.
Price, Linda K.
Walker, Tim
Capmark Bank
Capmark Finance Inc.
CWCapital Asset Management LLC
GMAC Commercial Mortgage Bank
GMAC Commercial Mortgage Corp.
LaSalle Bank NA
Merrill Lynch Mortgage Lending Inc.
Lehman ALI Inc.
LNR Partners Inc.
Midland Loan Services Inc.
National Consumer Cooperative Bank
NCB FSB
US Bank National Association
Wachovia Bank NA
Wells Fargo Bank NA
AIG Casualty Co.
AIG Excess Liability Insurance Co. Ltd.
AIU Insurance Co.
American Home Assurance Co.
American International Pacific Insurance
Co.
American International South Insurance Co.
American International Specialty Lines
Insurance Co.
Birmingham Fire Insurance Co.
Commerce & Industry Insurance Co.
Granite State Insurance Co.
Illinois National Insurance Co.
Insurance Company of The State of
Pennsylvania, The
Landmark Insurance Co.
Lexington Insurance Co.
National Union Fire Insurance Co. of
Louisiana
National Union Fire Insurance Co. of
Pittsburgh PA
New Hampshire Insurance Co.
JPMorgan Chase Bank NA
Starr Excess Liability Insurance Co.
Zurich American Insurance Co.
Kelley Depasquale & Co.
Meritax LLC
PricewaterhouseCoopers
Skadden Arps
Lehman ALI Inc.
CSE Mortgage LLC
Grand Prix Holdings LLC
Walker, Timothy
Murphy, Mark A.
Craven, Dennis M.
Sack, Aaron
Press, Rick
128 Motel Corp.
A Action Plumbing
A-1 Asphalt Care Inc.
A-1 Fire Equipment Corp.
Able Restoration Inc.
Accurate Fire Protection Inc.
ACQI Associates LP
ACT Inc.
Adrian Carr Caradine Design Inc.
Advanced Asphalt
Advantage Fitness Products
AEF Hotel Furniture Finish
AJ Monier & Co. Inc.

Alexander's Mobility Services
All American Waste LLC
Anand Enterprises Inc.
Arch Painting Inc.
Art Horizons
Framed Picture Enterprises
Art Plumbing Co.
Ashley Lighting Inc.
Associated Builders
Barker Construction Specialities Inc.
Becht Given Service Experts Inc.
Bell Plumbing & Heating Co.
BellSouth Wireless Data LP
Cingular Interactive LP
RAM Mobile Data USA LP
Berger Transfer & Storage Inc.
Bernhardt Design
Bernstein Group Inc.
Best Western International Inc.
Binswanger Glass
Vitro America LLC
Boudreau Plumbing & Heating
Brintons Ltd.
Brunswick Corp.
Life Fitness
California Industrial
Case Handyman & Remodeing-Winter Park
Cornerstone Restorations Inc.
Castleman & Young Construction Inc.
Chapel Valley Landscape Co.
CIT Group/Commercial Services Inc.
Clayton Miller Hospitality Carpet
Climacare Inc.
Coast Sign Inc.
CoCal Landscape Services Inc.
Collective Design Associates LLC
Contour Logistics Inc.
Contract Purchasing & Design Inc.
Corporate Furniture Service LLC
Crews Landscape Management Inc.
Cummings Development Corp.
Cummings Inc., The International Sign
Service
Demartino Construction Co.
DeMoss Painting Co.
Depasquale Kelley & Co.
Designtex
Direct Service Co.
DJ's Construction Inc.
Down to Earth Communications Inc.
D'style Inc.
Eaton Irrigation
Elite Heating & Air Conditioning Inc.
Eric Ryan Corp.
Exel Transportation Services Inc.
Extreme Coatings Inc.
Eykon Wallcovering Source
FDR Construction Inc.
Federal Heath Sign Co. LLC
First Impressions Decorative Concrete
Fisher, Jeffrey H.
Flexsteel Industries Inc.
Fortessa Inc.
Friedrich Air Conditioning Co.
FS Schardein & Sons
Grand Prix Bullfinch
Grand Rapids Chair Co.
Granite Works 4U Inc.
Graphic Systems Inc.
Graybar
Group 7 Design Inc.
Harrington Bomanite Corp.
HC Integrated Systems Inc.
Hilton Ontario Airport
Hospitality Sign Co.
Intersign Corp.
Howard D Johnson Co.
I See Corp.
Indon International LLC
Instrastructure Repair Service LLC
Inter-Logic Design LLC
Interstate Hotels & Resorts
Island Hospitality Management Inc.
Jean Enterprises
JF Hotel III
JMC Global
John M Crawley LLC
Joyce Enterprises of America Inc.
Precise Interior Services International Inc.
Precise Transportation Services
Kaleidoscope Ltd.
KE Braza Construction LLC

Koala Inns Inc.
KPA HI Ontario LLC
KPA Leaseco Holding
KPA/GP Valencia LLC
KR Commercial Interiors Inc.
Kraft Power Corp.
Kustom Gifts
L&L General Contractors
Pool Man, The
L&P Financial Services
Landmark Art & Frame Inc.
M Tucker Co. Inc.
Magnus Construction Management Inc.
Maharam Fabric Corp.
Majestic Mirror & Frame
Marina Pool Spa & Patio
Marriott International Inc.
Meritax LLC
MR Smith & Co.
National Wallcovering Inc.
New York New Jersey Regional Joint
Board, Local 96, Unite/Here
NLP Furniture Industries Inc.
Nuevo Sol Partners Inc.
NYS Enterprises Inc.
Omnipoint Holdings Inc.
T-Mobile USA Inc.
TMO CA/NV LLC
Ontario Hotel Associates LLC
Otis Elevator Co.
Pacific Bell Wireless LLC
Pacific Energy Service & Facilities Inc.
Pacific Lamp & Supply Co.
Paradise Purchasing LLC
Patel, Anand
PhilMac Inc.
Polk Mechanical Co. LLC
Pool Man Inc.
Precedence Inc.
Quiltcraft Industries Inc.
Radisson Plaza Hotel
York Hannover (Greenwich) Inc.
Raleigh-Durham MSA LP
R-H Group Inc.
Rising Signs
Rockville Interiors & Fabrics
Roof Consultants Inc.
Salisbury & Moore Construction Inc.
Schiller Hardware
Scott Beck Construction Inc.
Scott Lamp Co. Inc.
Sealy Bedding
Shaw Industries Inc.
Shoreline Distributors
South City Prime
South City Prime Montvale LLC
South West Texas Environmental
Contractors Inc.
Southern California Ventures Ltd.
ST Electric Inc.
Sta-Brite Services Ltd.
Stan-Mar Building Maintenance Group LLC
Steve Marks Contractors
Studio 1200 LLC
STX Inc.
Surface Materials Inc.
T Schiefer Contractors Inc.
TBF Financial LLC
TeleSpectrum Inc.
TGI Office Automation LLC
ThyssenKrupp Elevator Co.
TMAD Taylor & Gaines
Transworld Systems Inc.
Total Audio-Visual Systems Inc.
Triangle Renovations
Unilight Ltd.
United Food & Commercial Workers Union
Local 371
Velocita Wireless LP
Warner Construction Inc.
Wells Industries
Western State Design Inc.
Windy City Construction & Design
Platte River Insurance Co.
Alamo Crane
Amalgamated National Health Fund,
Trustees of the
American HVAC
Commercial Floor Tech Inc.
Copeland's of New Orleans
Global Restaurant Design
ISS-TMC Services Inc.

Lakefront Supply
Oak Roofing
Oak Roofing & Tuckpointing Inc.
Le Tel Communications
NLP
North Creek Maintenance District
Association
Oak Roofing Inc.
Onyx Sealcoating
PDI
Precise
Ron Aton Blacktop Inc
Ross Court Plumbing Inc.
Tobin & Sons
US Wall Dcor
Wing Millwork & Supply
Ahern, Linda
Alcantara, Celeste
Bautiza, Beatriz
Brown, Kevin
Bryan, Mary
Cortamilgia, Renee
Costello, Diana
Cristo, Kevin
DaSilva, Domingo
Denson, Jessica
Devlin, Kathleen
Dukes, Charlene
Espiritu, Allan
Garcia, Hilmer
Garrettporter, Evelyn
Gonzalez-Vite, Jose
Griffin, Remell
Keller, Margaret
Koletowo, Kudi
LaFollette, Delane F.
Mayberry, Ronald
Melgar, Maria
Meserve, Rose
Mobley, David
Monroy, Alejandra
Morales, Alejandro
Morales, William
Nunez, Cecilia
O'Bannon, Patricia
Pacumio, Anthony
Pearson, Freya
Perez, Maria
Pineda, Natividad
Powers, Bob
Richardson, Nita
Ritchie, Bernie
Rodriguez, Jacqueline
Rodriquez, Jose
Romero, Jhonathan J.
Scheser, Michael
Smalz, Eileen
Summers, Linda
Tyrczyn, Tom
Williams, Fred
Wittman, Carol
Addison, Town of (TX)
Alameda County Water District (CA)
Altamonte Springs, City of (FL)
American Electric Power
Amerigas Pompano Beach
Aqua Pennsylvania
Aquarion Water Co. of CT
Arlington, City of (TX)
Atlanta, City of (GA)
Atlantic City Electric
Pepco
Atlantic City Municipal Utilities Authority
(NJ)
Atlantic City Sewerage Co., The
Atmos Energy
Bellevue, City of (WA)
BGE
Boston Water
Bothell, City of (WA)
Camden County Municipal Utilities
Authority (NJ)
Central Maine Power Co.
New York State Electric & Gas Corp.
Citizens Gas
CL&P
Columbia Gas of Kentucky
Nipsco
Consumers Energy
CPS Energy
DC Water & Sewer Authoritity
Denver Water

Dominion Virginia Power
DTE Energy
East Lansing, City of (MI)
El Paso De Robles, City of (CA)
El Segundo, City of (CA)
Falls Church, City of (VA)
Florida Public Utilities Co.
Fort Lauderdale, City of (FL)
Fort Wayne Utilities, City of (IN)
Foster City, City of (CA)
FPL
Garden Grove, City of (CA)
Gas Co., The
SDG&E
Sempra Energy
Gas South
Georgia Power Co.
Grand Rapids, City of (MI)
Great Oaks Water Co.
Gwinnett County Public Utilities (GA)
Henrico, County of (VA)
Horsham Water & Sewer Authority (PA)
Howard County (MD)
Indianapolis Power & Light Co.
Indianapolis Water
Irving Utility Billing, City of (TX)
JCP&L
Kentucky American Water
New Jersey American Water
Kentucky Utilities Company (KU)
LG&E
Lansing Board of Water & Light (MI)
Latham Water District (NY)
LIPA
Livonia, City of (MI)
Lombard, Village of (IL)
Louisville Water Co.
Lynnwood, City of (WA)
Madison Heights, City of (MI)
MDC - The Metropolitan District (CT)
Mid Peninsula Water District (CA)
MidAmerican Energy Co.
Montvale, Borough of (NJ)
Morristown, Town of (NJ)
Mount Laurel Township Municipal Utilities
Authority (NJ)
Mountain View, City of (CA)
Naples, City of (FL)
National Grid
Nicor Gas
Nstar Electric
Ontario, City of (CA)
Orange, City of (CA)
Peco Energy
PG&E
Portland Water District (ME)
PPL Electric Utilities Corp.
Progress Energy Florida Inc.
Propane Gas Service Inc.
PSE&G Co.
Puget Sound Energy
Reliant Energy
Richmond, City of (VA)
Rockland Electric Co.
Rosemont, Village of (IL)
Rural Gas Co., The
Saddle River, Borough of (NJ)
San Antonio Water System (TX)
San Diego City Treasurer, City of (CA)
San Jose Water Co.
Schaumburg, Village of (IL)
Snohomish County Public Utility District
(WA)
South Jersey Gas Co.
Southeast Morris County Municipal Utilities
Authority (SMCMA)
Southern California Edison
Suburban Propane AR Center
Suffolk County Water Authority (NY)
Sunnyvale, City of (CA)
Teco Peoples Gas
Troy Water Department, City of (MI)
Tukwila, City of (WA)
UGI Utilities Inc.
United Illuminating Co., The
United Water New Jersey
United Water Pennsylvania
Unitil
Upper Moreland Hatboro Joint Sewer
Authority (PA)
Valencia Water Co.
Vestal, Town of (NY)

Washington Gas
Washington Suburban Sanitary Commission
West Palm Beach, City of (FL)
Westchester, Village of (IL)
Woburn, City of (MA)
Xcel Energy
Ace Parking Management Inc.
Addison, Town of (TX)
ADP Inc.
Aetna - Middleton
Aetna Health Management LLC
AFCO Credit Corp.
Alameda County Tax Collector (CA)
Allen, Virginia E., as Town of Islip Tax
Collector (NY)
American Express
American Hotel Register Co.
Anaheim Transportation Network
Aon Risk Services Northeast Inc.
Arapahoe County Treasurer (CO)
Archer & Greiner
Arlington, City of (TX)
Arthur J Gallagher of Texas Inc.
Gallagher Bassett Services Inc.
AS Hospitality
Ashley Lighting
Associated Builders
At Your Service
AT&T Wi-Fi Services
Atlanta, City of (GA)
Atlantic City, City of (NJ)
Ayoub & Mansour LLC
B&B Parking Inc.
Baldor Specialty Foods
Bankdirect Capital Finance LLC
Bayscapes
Beilinson, Marc
Belmont, City of - Finance Division (CA)
Ben E Keith Foods
Benefactor Funding Corp.
Tradavo Inc.
Best Western International Inc.
Bolton Construction LLC
Boston, City of (MA)
Brickman Group Ltd.
Broome County Commissioner of Finance
(NY)
Broward County Revenue Collector (FL)
Buffington, Lee, as San Mateo County Tax
Collector (CA)
Burkett's Pool Plastering Inc.
Caler Donten & Levine PA
California Franchise Tax Board
California Travel & Tourism
Carson's Hospitality
Cass Commercial Bank
Castleman & Young Construction Inc.
Cherry Hill Township (NJ)
CIGNA Healthcare
Cintas Corp.
CitiBank SAMP
Cohen Cooper Estep & Allen LLC
Collier County Tax Collector (FL)
Color Applications Inc.
Comptroller of Public Accounts
Contract Purchasing & Design
Cook County Collector (IL)
Cummings Development
Dallas County (TX)
Dallas County Tax Assessor-Collector (TX)
Denver Manager of Revenue, City &
County of (CO)
Designer Tile & Stone LLC
Dick, Robert F., as Dauphin County
Treasurer (PA)
Director of Finance
Disneyland Resort Ticket Services
DJ's Construction
Drain Works Plumbing Service
Du Page County Collector (IL)
Ecolab
Ecolab Pest Elimination
El Segundo, City of (CA)
Emax-Resource Technology Management
Inc.
Eric Ryan Corp.
Fairfax, County of (VA)
FDR Construction Inc.
Featherstone Foods Inc.
Federal Express
Fibercare

Fire & Oak
Food Services of America
Fort Lauderdale, City of (FL)
Fremont, City of (CA)
Fulton County Tax Commissioner
Furniture Manufacturers Credit Association
Gaithersburg, City of (MD)
Galaxy Hotel Systems LLC
Garden Grove, City of (CA)
Global Restaurant Design Corp.
Goldberg & Solovy Foods Inc.
Goodman &, Attorney Trust Account of
Gordon Food Service - Troy
Green Tree Packing Co. Inc.
Greenwood Village, City of (CO)
Guest Supply Inc.
Gwinnett County Tax Commission
Hamilton Meats & Provisions Inc.
Hatboro-Horsham
HD Supply Facilities Maintenance
Henrico, County of (VA)
Hilton Hotels Corp.
Howard County Government (MD)
iBAHN
Imperial Premium Finance Inc.
Indiana Department of Revenue
Indon International
Innkeepers USA
Irving, City of (TX)
Island Hospitality Management
Jenkins Gales & Martinez
JF Capital Advisors LLC
JMC Global
Johnson & Jordan Inc.
Kaiser Foundation Health
Kentucky State Treasurer
Kentwood, City of (MI)
King County Treasurer (WA)
Kirkland & Ellis LLP
Kleisner, Fred
Klotz & McCann
KPA San Antonio HS LLC
KPA Tysons Corner RI LLC
KPA Washington DC PT LLC
KR Commercial Interiors Inc.
LA Specialty
Landmark Art & Frame
Lane Associates
Lanier Parking Solutions
Lanier Valet Solutions
Lexington Fayette County Government
(KY)
LG Electronics USA Inc.
Life Fitness A Division of Brunswick
Lina
Livonia, City of (MI)
Lodgenet Entertainment Corp.
Lombard, Village of (IL)
LORLPC
Los Angeles County Tax Collector (CA)
Los Angeles, County of (CA)
Louisville Jefferson County Me (KY)
Madison Seafood Inc.
Magnus Construction Management Inc.
Maguire Properties-500 Orange Tower LLC
Maines, Stanton
Marion County Treasurer
Marriott International Inc
Marx Realty & Improvement Co.
MDCVB-Assessment
Meritax LLC
Michigan Department of Treasury
Michigan, State of
Montgomery County (MD)
Montvale Landscaping Inc.
Montvale, Borough of (NJ)
Morgan, Susan R., as Town of Vestal
Receiver (NY)
Morris, Township of (NJ)
Morristown-TRS (NJ)
Mount Laurel Township Municipal (NJ)
Mountain View, City of (CA)
MR Smith & Co.
Multi-Systems Inc.
New Jersey, State of - AC Tax
NLP Furniture Industries Inc.
Office Depot
Office of The City Treasurer
Okaloosa County Tax Collector (FL)
Ontario,City of (CA)
Orange, City of (CA)
Orange, County of (CA)

Otis Elevator Co.
Otis Spunkmeyer Inc.
Pacific Rim Mechanical
PDQ Consulting Inc.
Perot System Corp.
Perrone Wine & Spirits
Petty Cash - Hilton Ontario
Petty Cash - Orange Grove
Petty Cash - Rockville
Philmac Inc.
PHM Hospitality
Presentation Services
Price Meese Shulman
Price, Betsy, as Tarrant County Tax
Assessor (TX)
PricewaterhouseCoopers LLP
Quiltcraft
Quoizel Inc.
R&R Marketing (Royal Division)
Raeco Seasonal LLC
Resource Technology Management
Retzko's Landscaping
Richard J Conte Attorney Trust Account
Rockville, City of (MD)
Romala Stone Inc.
Ron Aton Blacktop Inc.
Rosemont, Village of (IL)
Royal Cup Dine-Mor
RSA Realty Inc.
Ruds Inc.
Ruisi, Larry
Saddle River, Borough of (NJ)
Salisbury & Moore Construction LLC
San Antonio, City of (TX)
San Bernardino County Tax Collector (CA)
San Diego County Treasurer Tax Collector
(CA)
San Jose Treasury, City of (CA)
San Mateo, City of (CA)
Santa Clara Tax Collector (CA)
Santa Clarita, City of (CA)
Schaumburg, Village of (IL)
Schnitzer West LLC
Scott Beck Construction Inc.
Shamrock Foods Co.
Shelton Tax Collector (CT)
SimplexGrinnell LP
Skadden Arps Slate Meagher & Flom LLP
Springfield Corp.
Studio 1200 LLC
Sunnyvale Revenue, City of (CA)
Sunset Parking Service
Swank Audio Visuals LLC
Swank Audio Visuals LLC
Sysco
Sysco - Baltimore
Sysco - Louisville
Sysco - San Antonio
Sysco - San Diego
Sysco - Valencia
Sysco Food
Sysco Food Service Metro NY
Sysco Food Services - Chicago
Terminix Commercial
Texas Sales Tax, State of
Travel Click Inc.
Triangle Renovations
United Health Fund
US Foodservice
US Foodservice - Altamonte Springs
US Foodservice - Atlanta Downtown
US Foodservice - Atlantic City
US Foodservice - Belmont
US Foodservice - Cherry Hill
US Foodservice - El Segundo
US Foodservice - Fremont
US Foodservice - Ft. Lauderdale
US Foodservice - Gaithersburg
US Foodservice - Garden Grove
US Foodservice - Harrisburg
US Foodservice - Islandia
US Foodservice - Manassas
US Foodservice - Montvale
US Foodservice - Mount Laurel
US Foodservice - Mountain View
US Foodservice - Richmond Nw
US Foodservice - Rosemont
US Foodservice - Saddle River
US Foodservice - San Jose South
US Foodservice - San Mateo
US Foodservice - Sili I
US Foodservice - Sili II

US Foodservice - Tysons Corner
US Wall Decor
USA Today
Valdes, Ray, as Seminole County Tax
Collector (FL)
Van Dyke, Caleb
Vestal Central School District Tax Collector
(NY)
Walter, Robert D., as Upper Moreland
Township Tax Collector (PA)
Warner Construction Inc.
Washington Department, State of
Waste Management
West Central Produce Inc.
Westchester, Village of (IL)
Western State Design Inc.
Windsor Industries Inc.
Windsor, Town of (CT)
Worldwide Payment System SA
Albany County Director of Finance (NY)
LINA Life Insurance Co. of North America
San Diego Office of The City Treasurer
Texas Comptroller of Public Accounts

K&E 16673425
Schedule 2

K&E 16673425
Moelis is currently engaged on transactions involving these parties in interest: Capmark
Finance Inc. and LNR Partners Inc.
Moelis was previously engaged on transactions involving this party in interest: Hilton
Hotels Corp. (Moelis engagement was with this entitys parent company).
Moelis regularly does business with the following parties in interest (e.g., Moelis is a co-
advisor with such parties, such parties are clients of Moelis, and/or Moelis is a client of
such parties), and Moelis may receive payments or make payments to these parties in
interest: JPMorgan Chase Bank N.A.; Wachovia Bank N.A.; Wells Fargo Bank N.A.;
PricewaterhouseCoopers; Skadden Arps Slate Meagher & Flom LLP; and Kirkland &
Ellis LLP.
Moelis has made or is currently making payments to the following parties in interest:
California Franchise Tax Board and United Health Fund.

K&E 16673425
Schedule 3

K&E 16673425
Moelis was the restructuring adviser to Latham International. Apollo was one of Latham
Internationals sponsors.
Moelis was a co-manager on the Metals USA initial public offering. Apollo was an
equity owner of Metals USA, and continued to retain a controlling position in Metals
USA following the IPO. Moreover, Metals USA paid Moelis a fee in June 2009 for
advisory work on certain projects.
Moelis was a co-manager on the Noranda Aluminum initial public offering. Apollo was
an equity owner of Noranda Aluminum.
Moelis was the financial adviser to Quality Distribution and a dealer-manager with
respect to an exchange offer of its senior notes. Apollo was one of Quality Distributions
sponsors.
Moelis was the financial advisor to ad hoc committee of senior secured noteholders of
WIND Hellas. Apollo was a member of that ad hoc committee.
Moelis was the financial advisor to an ad hoc committee of first lien lenders of
LyondellBasell. Apollo was a member of that ad hoc committee.
Moelis advises the senior lenders committee of a portfolio company of Apollo. (This is
a current engagement and the name of the portfolio company is confidential).
Moelis is the co-manager with respect to a follow-on offering and tender offer for a
portfolio company of Apollo. (This is a current engagement and the name of the
portfolio company is confidential).

K&E 16673425

EXHIBIT C

Engagement Letter

MOELlS&_COMPANY
CONFIDENTIAL
340 Royal Poinciana Way, Suite 306
Palm Beach. Florida 33480
Attention: Marc Beilinson
Ladies & Gentlemen:
I H K ~ 7 \\ 11.!--lltltr 1101 II.\ IIIII
! \ttL II <.2'1()1i
f ~ ' I ! ; ' ' h-: ()II
As of March 24, 201 0
We are pleased to confirm the arrangements under which Innkeepers USA Trust (together
with its affiliates and subsidiaries, the .. Company" or .. you") has engaged Moelis & Company
LLC ("'Moelis," and, together with its affiliates and subsidiaries, we". ''our" or "us'') to act as its
financial advisor and investment banker in connection with a Restructuring Transaction as
defined below.
As used herein, the term "Restructuring Transaction" shall mean and include any
restructuring, reorganization, rescheduling, or recapitalization of all or any material portion of
the Company's liabilities, however such result is achieved, including without limitation through
any one or more of the following means, whether in one or a series of transactions: a plan of
reorganization or going concern liquidation (a .. Plan") confirmed in connection with any case or
cases commenced by or against the Company or any of its subsidiaries or affiliates, whether
individually or on a consolidated basis (a .. Bankruptcy Case") under title 11 of the United States
Code (the "'Bankruptcy Code"), exchange offer, consent solicitation, covenant relict:
rescheduling of debt maturities, change in interest rates, settlement or forgiveness of debt.
conversion of debt into equity, other amendments to the terms of the Company's debt
instruments. issuance of new securities (other than to Apollo Investment Corporation or its
affiliates ("Apollo")), sale or other transfer of equity, assets or other interests of the Company
other than to Apollo.
you.
1. As part of our engagement, we will perform the following services, as requested by
(a) undertake, in consultation with members of management of the Company. a
comprehensive business and financial analysis of the Company;
(b) evaluate the Company's debt capacity and assist in the determination of an
appropriate capital structure for the Company;
I !> \ \(,IJ I ' I .'\I II ) () l! ~ I f!( h ]( l'
NY\1464670.1
MOE LIS ,'\__COM I'ANY
(c) as deemed desirable by the Company, identify, initiate, review, negotiate, and
evaluate any Restructuring Transaction , and, if directed, develop and evaluate
(d) assist the Company in developing strategies to effectuate any Restructuring
Transaction,
(e) advise and assist the Company in the course of its negotiation of any
(0 evaluate indications of interest and proposals regarding any Restructuring
Transaction from current or potential lenders, equity investors or strategic
partners;
(g) determine and evaluate the risks and benefits of considering, initiating and
consummating any Restructuring Transaction ;
(h) determine values or ranges of values (as appropriate) for the Company and any
securities that the Company offers or proposes to offer in connection with a
(i) be available at your request to meet with your management, board of
directors/trustees, creditor groups, equityholders, any official committees
appointed in a Bankruptcy Case, or other parties to discuss any Restructuring
Transaction and provide such parties with information about the Company's
assets, properties or businesses as may be appropriate and acceptable to the
Company, subject to customary business confidentiality agreements in form and
substance approved by the Company;
0) assist the Company in the development, preparation and distribution of selected
information, documents and other materials to facilitate the consummation of any
(k) if requested by the Company, participate in hearings before the court having
jurisdiction over the Bankruptcy Cases (the "Bankruptcy Court") and provide
(I) such other financial advisory and investment banking services as may be agreed
upon by Moelis and the Company, and that is within the scope of this
engagement.
2. In connection with our engagement, the Company will furnish us with all information
that we reasonably deem appropriate (collectively, the "Information") and will provide us with
access to the officers, directors, employees, accountants, counsel and other representatives of the
Company. To the best of the Company's knowledge, the Information to be furnished by or on
behalf of the Company. when delivered, will be to the best knowledge of the Company true and
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MOELJS,'\.._GOMPt\NY
correct in all material respects and will not contain any material misstatement of fact or omit to
state any material fact necessary to make the statements contained therein not misleading. In
addition, the Company agrees to promptly advise us of any material event or change in the
business, affairs, condition (financial or otherwise) of the Company that occurs during the term
of our engagement hereunder. The Company understands and agrees that we, in performing our
services hereunder, will use and rely upon the Information as well as publicly available
information regarding the Company, and that we do not assume responsibility for independent
verification of any Information, whether publicly available or otherwise furnished to us,
concerning the Company, including, without limitation, any financial information, forecasts or
projections, considered by us in connection with the rendering of our services. Accordingly, we
shall be entitled to assume and rely upon the accuracy and completeness of all Information and
are not required to conduct a physical inspection of any of the properties or assets, or to prepare
or obtain any independent evaluation or appraisal of any of the assets or liabilities, of the
Company. With respect to any financial forecasts and projections made available to us by the
Company and used by us in our analysis, we shall be entitled to assume that such forecasts and
projections have been reasonably prepared on bases reflecting the best currently available
estimates and judgments of the management of the Company as to the matters covered thereby.
In connection with the services described above, the Company authorizes us, as the Company's
representative, to transmit any Information Memo to potential parties to a Restructuring
Transaction. The Company hereby acknowledges that all Information contained in any
Information Memo will be provided by or based upon Information provided by the Company or
third parties, and that the Company will be solely responsible for the contents thereof.
3. (a) As compensation for our services hereunder, the Company agrees to pay us the
following fees. If a Bankruptcy Case is commenced with respect to the Company. then the
payment of these fees shall be subject to the rules and procedures of title II of the United States
Code (the "Bankruptcy Code"), the Federal Rules of Bankruptcy Procedure (the "Bankruptcy
Rules"). and applicable local rules, guidelines and Bankruptcy Court orders:
NY\1464670.1
Monthly Fee. During the term of this agreement, a cash fee of $200,000 per month
for each of the first five monthly payments due under this agreement and a cash fee
of $150,000 per month during the remainder of the term of this agreement (the
"Monthly Fee"). Unless otherwise ordered by the Bankruptcy Court in the event a
Bankruptcy Case is commenced with respect to the Company, the first Monthly Fee
shall be paid immediately upon the execution of this agreement, and all subsequent
Monthly Fees shall be paid in advance prior to each monthly anniversary of this
agreement. Whether or not a Restructuring Transaction has taken place or will take
place, we shall earn and be paid the Monthly Fee every month during the term of this
agreement. Fifty percent (50%) of all Monthly Fees shall be credited against the
Restructuring Fee (defined below).
Restructuring Fee: In addition to the foregoing Monthly Fees, the Company shall pay
Moelis a cash fee (the "Restructuring Fee") of $6,000,000. The Restructuring Fee
shall_ be paid immediately upon the consummation of a Restructuring Transaction;
provtded, however, that in connection with a Restructuring Transaction that is
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MOELISS,COMPANY
consummated in connection with a pre-packaged plan of reorganization in a
Bankruptcy Case, the Restructuring Fee shall be earned and paid by the Company
prior to the commencement of the Bankruptcy Case.
(b) Whether or not any Restructuring Transaction is consummated, and in addition to
any fees payable to us, the Company will reimburse us, upon our written request from
time to time, for all reasonable expenses incurred by us in entering into this
agreement and in connection with our performing services pursuant to this agreement.
These expenses generally include travel costs (coach fares). document reproduction.
telephone and facsimile charges, meals while travelling out of town at the Company's
request, and other customary expenses for this type of transaction, including the
reasonable fees, disbursements and other charges of our legal counsel. We agree to
provide reasonable backup relating to such expenses to the Company and as may be
required by the Bankruptcy Court. The expenses reimbursed by the Company will
not exceed $300,000 in the aggregate.
(c) The Company's obligation to pay any fee, expense or indemnity set forth herein
shall be absolute and unconditional, and shall not be subject to any reduction by way of setoff,
recoupment or counterclaim.
(d) The parties acknowledge that a substantial professional commitment of time and
effort will be required of Moelis and its professionals hereunder, and that such commitment may
foreclose other opportunities for us. Moreover, the actual time and commitment required for the
engagement may vary substantially. In light of the numerous issues that may arise in
engagements such as this, Moelis' commitment to the time and effort necessary to address the
issues that will arise in this engagement, the expertise and capabilities of Moelis that will be
required in this engagement, and the market rate for professionals of Moelis' stature and
reputation, the parties agree that the fee arrangement provided for herein is just and reasonable,
fairly compensates Moelis, and provides the requisite certainty to the Company.
4. (a) In the event that a Bankruptcy Case is commenced, the Company shall use
commercially reasonable efforts to seek an interim and final order of the Bankruptcy Court
authorizing the employment of Moelis as its investment banker pursuant to the terms of this
agreement (including, without limitation, the fee, expense, and indemnification provisions
hereof) pursuant to, and subject to the standards of review set forth in, section 328(a) of the
Bankruptcy Code (and not subject to the standards of review set forth in section 330 of the
Bankruptcy Code), ~ pro tunc to the date first written above. The retention application and
the proposed interim and final orders authorizing Moelis' retention must be acceptable to Moelis
in its sole discretion. Prior to commencing a Bankruptcy Case, the Company shall pay all
amounts then earned and payable pursuant to this agreement in cash. In agreeing to seek Moelis'
retention under section 328(a) of the Bankruptcy Code, the Company acknowledges that it
believes that Moelis' general restructuring experience and expertise, its knowledge of the capital
markets and its restructuring capabilities will inure to the benefit of the Company, that the value
to the Company ofMoelis' services derives in substantial part from that expertise and experience
and that, accordingly, the structure and amount of the fees set forth in Section 3 herein are
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MOE LIS ,\_COMPANY
reasonable, regardless of the number of hours expended by Moelis' professionals in the
performance of the services to be provided hereunder.
(b) In the event that a Bankruptcy Case is commenced, Moelis shall have no
obligation to provide services under this or any agreement, unless Moelis' retention under such
agreement is approved by a final non-appealable order of the Bankruptcy Court (acceptable to
Moelis in its sole discretion, which order must also approve the indemnification provisions in
Annex A of this agreement) under section 328(a) of the Bankruptcy Code, within 60 days
following the filing of a voluntary chapter II case or the entry of an order for relief in any
involuntary chapter I I case. If the final non-appealable order authorizing the employment of
Moelis is not obtained within such 60-day period, or such order is later reversed. vacated. stayed
or set aside for any reason, Moelis may terminate this agreement, and the Company shall be
obligated to reimburse Moelis for all fees and expenses incurred prior to the date of termination,
subject to the requirements of any applicable orders of the Bankruptcy Court, the Bankruptcy
Code, the Bankruptcy Rules, and applicable local rules, guidelines and Bankruptcy Court orders.
Following entry of the interim order authorizing the retention of Moelis, the Company shall pay
as promptly as possible all fees and expenses due pursuant to this agreement, as approved by the
Bankruptcy Court and in accordance with the terms of this agreement, the Bankruptcy Code, the
Bankruptcy Rules, and applicable local rules, guidelines and Bankruptcy Court orders.
(c) In the event that a Bankruptcy Case is commenced, the Company agrees that
Moelis' post-petition compensation as set forth herein and payments made pursuant to the
expense reimbursements and indemnification provisions of this agreement (including, without
limitation, A11nex A hereto) shall be entitled to priority as expenses of administration under
sections 503(b)(l )(A) and 507(a)(2) of the Bankruptcy Code, and shall be entitled to the benefits
of any .. carve-outs" for professional fees and expenses in effect pursuant to one or more
financing orders entered by the Bankruptcy Court provided that a Restructuring Fee shall only
be included in the .. Carve Out" if such fee has been earned prior to the carve out being triggered.
The Company also agrees to assist Moelis in preparing, filing and serving all required fee
statements, interim fee applications, and final fee application. The Company agrees to support
Moelis' fee applications during any Bankruptcy Court hearing on such fee applications, so long
as the fees and expenses sought by Moelis therein are consistent with this agreement.
(d) The Company shall use commercially reasonable efforts to ensure that, to the
fullest extent permitted by law, any confirmed plan of reorganization or liquidation in the
Bankruptcy Case contains typical and customary release (both from the Company and from third
parties) and exculpation provisions releasing, waiving, and forever discharging Moelis and any
of its divisions, affiliates, current or former directors, officers, partners, members. agents or
employees of Moelis or any of its affiliates, or any person controlling Moelis or its affiliates,
current or former directors, oflicers, partners, members, agents or employees from any claims,
obligations, suits, judgments, damages, demands, debts, rights, causes of action, and liabilities
related to the Company or the engagement described in this agreement.
(e) The terms of this Section 4 are solely for the benefit of Moelis, and may be
waived, in whole or in part, only by Moelis.
. 5.
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M 0 E L I S ~ \ . .. C 0 M P A N Y
5. The Company understands that if we are asked to act for the Company in any
additional capacity relating to this engagement but not specifically addressed in this agreement,
then such activities shall constitute separate engagements and the terms of any such additional
engagements will be embodied in one or more separate written agreements, containing terms and
conditions to be mutually agreed upon, including, without limitation, appropriate indemnification
provisions. The indemnity provisions in A1111e.x A referred to below shall apply to any such
additional engagements, unless superseded by an indemnity provision set forth in a separate
agreement applicable to any such additional engagements, and shall remain in full force and
effect regardless of any completion, modification or termination of our engagement(s).
6. No advice or opinion rendered by us, whether formal or informal, may be disclosed, in
whole or in part, or summarized, excerpted from or otherwise referred to without our prior
written consent. In addition, we may not be otherwise referred to without our prior written
consent, which shall not be unreasonably withheld. It is understood, however, that if we are
requested to render an opinion, the opinion may be included in its entirety (including all
attachments thereto) in any communication by the Company or the board of directors/trustees to
parties in interest in the Bankruptcy Cases, if any are filed; provided, however, that we have had
the opportunity to review such communication prior to any filing with the Securities and
Exchange Commission or prior to its dissemination to parties in interest in the Bankruptcy Cases,
if any are filed. The Company acknowledges that we may, at our option and expense and after
announcement of any Restructuring Transaction, place announcements and advertisements or
otherwise publicize such transaction and our role in it (which may include the reproduction of
the Company's logo and a hyperlink to the Company's website) on our website and in such
financial and other newspapers and journals as we may choose, stating that we have acted as
exclusive financial advisor to the Company in connection with any Restructuring Transaction.
Furthermore, if requested by us, the Company shall include a mutually acceptable reference to us
in any press release or other public announcement made by the Company regarding the matters
described in this agreement.
7. Since we will be acting on behalf of the Company in connection with our engagement
hereunder, the Company and we agree to the indemnity provisions and other matters set forth in
Amte.x A, which is incorporated by reference into this agreement.
8. (a) Our engagement hereunder shall extend until the earliest of (i) the effective date
of a chapter 11 plan of reorganization or liquidation confirmed in the Bankruptcy Cases, (ii) the
conversion of the Bankruptcy Cases to chapter 7 of the Bankruptcy Code, (iii) appointment of a
chapter II trustee or an examiner with expanded powers in the Bankruptcy Cases, (iv) dismissal
of the Bankruptcy Cases, and (v) the consummation of the last Restructuring Transaction, as
agreed upon by Moelis and the Company; provided, however, that our engagement may be (x)
terminated earlier, with or without cause, either by us or by you upon 15 days' prior written
notice thereof to the other party, (y) terminated earlier as provided elsewhere herein or (z)
extended, in writing, by the Company and us. Notwithstanding the foregoing, in the event of any
expiration or termination of our engagement hereunder, (i) we will continue to be entitled to
payment by the Company (or its bankruptcy estates) of the unpaid fees pursuant to Section 3 of
this agreement, (ii) unreimbursed expenses incurred by us as a result of services rendered prior to
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MOr:LlS,"""COMPANY
the date of expiration or termination shall become immediately payable by the Company (or its
bankruptcy estates) in full, and (iii) (A) the Company's obligation to indemnify us and certain
related persons and entities as provided in A1mex A referred to above and (B) the provisions of
Sections 4(c), 4(d), 6, 7, 8, 9, 10, t 1, 12 and 13 hereof, shall remain operative and in full force
and effect regardless of any such termination or expiration.
(b) If, at any time prior to the expiration of 18 months following the expiration or
termination of our engagement hereunder (except for an expiration or termination in connection
with consummation of a Restructuring Transaction), a Restructuring Transaction is
consummated, then the Company (or its bankruptcy estates) shall pay us the appropriate fee
specified in Section 3 above immediately upon the closing of such transaction. The Company
agrees not to object to our request for allowance of such fee by the Bankruptcy Court or any
appellate court.
9. We are a securities firm engaged in a number of merchant banking and investment
banking activities. Information which is held elsewhere by us, but of which none of the
individuals involved in providing services contemplated by this agreement actually has (or
without breach of internal procedures can properly obtain) knowledge, will not for any purpose
be taken into account in determining our responsibilities to the Company under this agreement.
We will have no duty to disclose to the Company or any other party, or utilize for the Company's
or any other party's benefit any nonpublic information acquired in the course of providing
services to any other person, engaging in any transaction (on its own account or otherwise) or
otherwise carrying on our business.
1 0. The obligations of the Company hereunder shall be the joint and several obligations
of the entities comprising the Company. All aspects of the relationship created by this agreement
shall be governed by and construed in accordance with the laws of the State of New York.
applicable to contracts made and to be performed therein. All actions and proceedings arising
out of or relating to this agreement shall be heard and determined exclusively by any New York
state or federal court of competent jurisdiction sitting in the Borough of Manhattan in the City of
New York to whose jurisdiction we and the Company hereby irrevocably submit. We and the
Company hereby irrevocably waive any defense or objection to the New York forum designated
above. Notwithstanding the previous two sentences, in the event the Company is or becomes a
debtor in a Bankruptcy Case (whether voluntarily or involuntarily), during any such Bankruptcy
Case, actions and proceedings arising out of or relating to this agreement may also be heard and
determined by the Bankruptcy Court or any court having appellate jurisdiction over the
Bankruptcy Court. If the Bankruptcy Court declines to assert jurisdiction over such proceedings
or if the reference is withdrawn to the United States District Court, then such proceedings shall
be heard and determined in any New York state or federal court of competent jurisdiction sitting
in the Borough of Manhattan of the City of New York, to whose jurisdiction we and the
Company hereby irrevocably submit. Nothing herein shaH require a Bankruptcy Case to be filed
in the State of New York. WE HEREBY AGREE, AND THE COMPANY HEREBY AGREES
ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON
BEHALF OF ITS SECURITY HOLDERS, TO WAIVE ANY RIGHT TO TRIAL BY JURY
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M 0 E L I S \. C 0 M P A N Y
WITH RESPECT TO ANY CLAIM, COUNTERCLAIM OR ACTION ARISING OUT OF
THE AGREEMENT OR OUR PERFORMANCE THEREUNDER.
11. This agreement (including all Annexes hereto) embodies the entire agreement and
understanding between the parties hereto and supersedes all prior agreements and understandings
relating to the subject matter hereof. If any t e r m ~ provision, covenant or restriction herein is held
by a court of competent jurisdiction to be invalid. void, unenforceable. or against public policy.
the remainder of the terms, provisions and restrictions contained herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated. This agreement may not be
amended or otherwise modified or waived except by an instrument in writing signed by both us
and the Company. This agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same agreement. This
agreement shall be binding upon the Company and us and its and our respective successors and
permitted assigns.
12. The Company acknowledges and agrees that Moelis has been retained to act
solely as an advisor to the Company, and not as an agent of the Company or in a fiduciary
capacity with respect to the Company or as an advisor of any other person or entity. The
Company's engagement of Moelis is not intended to confer rights upon any person (including
shareholders, employees or creditors of the Company) not a party hereto as against Moelis or its
affiliates, or its directors, officers, principals, employees or agents, successors or assigns. Moe lis
shall act as an independent contractor and not in any other capacity under this Agreement, and
any duties arising out of its engagement shall be owed solely to the Company.
13. We acknowledge and agree that we may not assign our obligations and rights under,
and our consideration pursuant to, this Agreement to another registered broker dealer without the
prior written consent of the Company, which may be granted or withheld in the Company's sole
discretion. Please note the important privacy, business continuity and USA PATRIOT Act
disclosures on Amtex B hereof.
(Signature page follows)
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truly
MOELIS COMPANY LLC
By:
William Q. Dcrrough
Title: Director. C o ~ H e a d of
Recapitalization Restructuring
Accepted and to as of the date \\Titten
Innkeepers Trust
Title: Vice President. General Counsel and
MOELIS ,,COMPANY
ANNEXA
In further consideration of the agreements contained in the engagement letter dated the date
hereof (the "engagement"), in the event that Moelis & Company LLC or any of its divisions,
affiliates, current or former directors, officers, partners, members, agents or employees of Moelis
or any of its affiliates, or any person controlling Moelis or its affiliates, current or former
directors, officers, partners, members, agents or employees (collectively, "Indemnified Persons")
becomes involved in any capacity in any action, claim, suit, investigation or proceeding, actual
or threatened, brought by or against any person {including, without limitation. creditors of
Innkeepers USA Trust (together with its subsidiaries and affiliates. the ''Company"),
stockholders of the Company, a receiver, a custodian, a trustee appointed in any case or cases
under title II of the United States Code commenced by or against the Company or any of its
subsidiaries or affiliates, whether individually or on a consolidated basis (a "Bankruptcy Case''),
an official committee appointed in a Bankruptcy Case, or a litigation trust, liquidating trust or
similar vehicle created in connection with a Bankruptcy Case {or a trustee of such trust or similar
vehicle)), in connection with or as a result of the engagement or any matter referred to in the
engagement, the Company will reimburse such Indemnified Person for its reasonable and
customary legal and other expenses (including, without limitation, the costs and expenses
incurred in connection with investigating, preparing for and responding to third-party subpoenas
or enforcing the engagement) incurred in connection therewith as such expenses are incurred.
The Company will also indemnify and hold harmless any Indemnified Person from and against,
and the Company agrees that no Indemnified Person shall have any liability to any party for, any
losses, claims, liabilities, damages and expenses (including actions or proceedings in respect
thereof) (collectively, "Losses") (A) related to or arising out of (i) the Company's or its agents'
actions or failures to act (including statements or omissions made or information provided by the
Company or its agents) or (ii) actions or failures to act by an Indemnified Person with the
Company's or its agents' consent or in reliance on the Company's or its agents' actions or
failures to act or (B) otherwise related to or arising out of the engagement or our performance
thereof, except that this clause (B) shall not apply to any Losses that are finally determined by a
court or arbitral tribunal of competent jurisdiction to have resulted primarily from the bad faith,
willful misconduct or gross negligence of any Indemnified Person.
If such indemnification for any reason (other than such Indemnified Person's bad faith, willful
misconduct or gross negligence as finally determined by a court or arbitral tribunal of competent
jurisdiction to have primarily caused the Losses) is not available or is insufficient to hold an
Indemnified Person harmless, the Company agrees to contribute to the Losses involved in such
proportion as is appropriate to reflect the relative benefits received (or anticipated to be received)
by the Company, on the one hand, and by us, on the other hand, with respect to the engagement
or, if such allocation is determined by a court or arbitral tribunal of competent jurisdiction to be
unavailable, in such proportion as is appropriate to reflect other equitable considerations, such as
the relative fault of the Company on the one hand and of us on the other hand; provided,
however, that, to the extent permitted by applicable law, the Indemnified Persons shall not be
responsible for amounts which, in the aggregate, are in excess of the amount of all fees actually
received by us from the Company in connection with the engagement. Relative benefits to the
Company, on the one hand, and us, on the other hand, with respect to the engagement shall be
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MOELIS ,"-...COMPANY
deemed to be in the same proportion as (i) the total value paid or proposed to be paid or received
or proposed to be received by the Company or its security holders, as the case may be, pursuant
to the transaction(s), whether or not consummated, contemplated by the engagement, bears to (ii)
all fees actually received by us in connection with the engagement.
The Company will not, without our prior written consent, settle, compromise, consent to the
entry of any judgment in or otherwise seek to terminate any action, claim, suit, investigation or
proceeding in respect of which indemnification may be sought hereunder (whether or not any
Indemnified Person is a party thereto) unless such settlement, compromise, consent or
termination includes a release of each Indemnified Person from any liabilities arising out of such
action, claim, suit, investigation or proceeding. The Company will not permit any such
settlement, compromise, consent or termination to include a statement as to, or an admission of,
fault, culpability or a failure to act by or on behalf of an Indemnified Person, without such
Indemnified Person's prior written consent. No Indemnified Person seeking indemnification,
reimbursement or contribution under this agreement will, without the Company's prior written
consent, settle, compromise, consent to the entry of any judgment in or otherwise seek to
terminate any action, claim, suit, investigation or proceeding referred to herein.
Prior to entering into any agreement or arrangement with respect to, or effecting. any merger,
statutory exchange or other business combination or proposed sale or exchange, dividend or
other distribution or liquidation of all or a significant portion of its assets in one or a series of
transactions or any significant recapitalization or reclassification of its outstanding securities that
does not directly or indirectly provide for the assumption of the obligations of the Company set
forth herein, the Company will notify us in writing thereof (if not previously so notified) and, if
requested by us, shall arrange in connection therewith alternative means of providing for the
obligations of the Company set forth herein, including the assumption of such obligations by
another party, insurance, surety bonds or the creation of an escrow, in each case in an amount
and upon terms and conditions satisfactory to us.
The Company's obligations hereunder shall be in addition to any rights that any Indemnified
Person may have at common law or otherwise.
The Company acknowledges that in connection with the engagement we are acting as an
independent contractor and not in any other capacity, with duties owing solely to the Company.
This agreement and any other agreements relating to the engagement shall be governed by and
construed in accordance with the laws of the State of New York, applicable to contracts made
and to be performed therein. All actions and proceedings arising out of or relating to this
agreement shall be heard and determined by any New York State or federal court of competent
jurisdiction sitting in the Borough of Manhattan in the City of New York to whose jurisdiction
we and the Company irrevocably submit. Notwithstanding the foregoing, solely in the event a
Bankruptcy Case is commenced with respect to the Company, all actions and proceedings arising
out of or relating to this agreement shall be heard and determined by the Bankruptcy Court. If
the Bankruptcy Court declines to assert jurisdiction over such proceedings or if the reference is
withdrawn to the United States District Court, then such proceedings shall be heard and
determined in any New York state or federal court of competent jurisdiction sitting in the
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I 1
of i'vlanhauan of the City of York. to jurisdiction we and the
hereby irrevocably submit. Solely f()r purposes of enfbrcing the Company's
hereunder. the Company consents to personal jurisdiction. service and venue in any court
in which any subject to this agreement is brought by or against any
Indemnified Person. WE HERI:BY AGREI:. THE COl'vtPANY I IEREBY TO
WAIVE ANY RIGHT TO TRIAL BY JURY WITII RESPECT TO ANY CLAI
COUNTERCLAHvf OR ACTI ARISING OUT OF TillS AGREEMENT.
The provisions of this /tunex A shall apply to the engagement referred to in the
letter dated the date hereof (including related activities prior to the date hereof) and any
modification thereof and shall remain in full force and regardless of the completion or
termination of the If any term. covenant or restriction herein is held by a
court or competent jurisdiction to be invalid. void or unenforceable. or public policy. the
remainder of the terms. provisions and restrictions contained herein shall remain in full l(>rce and
eflcct and shall in no be aflccted, impaired or invalidated.
A. ~ t u r p h y
Title: Vice President. Cieneral Counsel and Secretary
Accepted and to as date
MOELIS
By:
Name: Willian Q. Derrough
Title: Managing Director. Co-l lead of Recapitalization & Restructuring
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MOELIS ,'\;_COMl'ANY
ANNEXB
This An11ex B is a part of and is incorporated into that certain engagement letter (the
Agreement") dated as of March 24, 2010 by and between Innkeepers USA Trust (together with
its affiliates and subsidiaries, the .. Company" or you") and Moelis & Company LLC ("Moelis,"
and, together with its affiliates and subsidiaries, .. we," our" or .. us").
PRIVACY STATEMENT
One of the most important components of our relationship with you is the trust that you have
placed in us to keep your nonpublic information private.
The information you provide to Moelis is used for the purposes of advising and guiding you
regarding certain investment transactions. The employees of Moelis do not discuss client
information with anyone outside the company unless specifically authorized to do so by you.
Information we collect and record about you is kept strictly confidential. We maintain security
procedures and standards designed to protect nonpublic information at all times.
With the exception of circumstances where we are required by law to disclose your nonpublic
information, we do not share such information with any unaffiliated entity. In the event that we
change this policy and determine that it is beneficial to share information with an unaffiliated
third party, we will notify you beforehand and give you the opportunity to of such
information sharing.
Where a client/customer and Moelis have executed a Confidentiality Agreement that agreement
will control the non-disclosure of confidential or private information.
BUSINESS CONTINUITY DISCLOSURE
Moelis maintains a business continuity plan, which addresses interruptions to our normal course
of business. This plan is reviewed annually and updated as necessary. Our disclosure statement
is available on our website at www.moelis.com and is available in written form upon request.
The plan outlines the actions Moelis will take in the event of a single-building, citywide or
regional business interruption, including the use of an office location not affected by the
interruption, retrieval of back up data, use of primary and alternate vendors for continued
communication, notification of active clients to provide interim information and relocation of
personnel to an unaffected site.
USA PATRIOT ACT
In order to comply with the USA Patriot Act, Moelis must obtain, verify and record information
that identifies each entity (or individual) that enters into a business relationship with Moelis. As
a result, in addition to obtaining our client/customer's corporate name and address, Moelis may
seek to obtain our client/customer's corporate tax identification number and certain other
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MOE LIS &._COMPANY
information. Moelis may also request relevant corporate resolutions and other identifying
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K&E 16673425

James H.M. Sprayregen, P.C.

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