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. (admitted pro hac vice) Marc J. Carmel (admitted pro hac vice) KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, IL 60654-3406 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Counsel to the Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: INNKEEPERS USA TRUST, et al.,1 Debtors. ) ) ) ) ) ) ) Chapter 11 Case No. 10-10-13800 (SCC) Jointly Administered

SUPPLEMENTAL DECLARATION OF NATHAN COOK, CHIEF FINANCIAL OFFICER OF INNKEEPERS USA TRUST, IN SUPPORT OF THE DEBTORS CASH COLLATERAL MOTION AND CASH MANAGEMENT MOTION AND IN RESPONSE TO OBJECTIONS THERETO
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The Debtors in these Chapter 11 Cases, along with the last four digits of each Debtors federal tax identification number, are: GP AC Sublessee LLC (5992); Grand Prix Addison (RI) LLC (3740); Grand Prix Addison (SS) LLC (3656); Grand Prix Albany LLC (3654); Grand Prix Altamonte LLC (3653); Grand Prix Anaheim Orange Lessee LLC (5925); Grand Prix Arlington LLC (3651); Grand Prix Atlanta (Peachtree Corners) LLC (3650); Grand Prix Atlanta LLC (3649); Grand Prix Atlantic City LLC (3648); Grand Prix Bellevue LLC (3645); Grand Prix Belmont LLC (3643); Grand Prix Binghamton LLC (3642); Grand Prix Bothell LLC (3641); Grand Prix Bulfinch LLC (3639); Grand Prix Campbell / San Jose LLC (3638); Grand Prix Cherry Hill LLC (3634); Grand Prix Chicago LLC (3633); Grand Prix Columbia LLC (3631); Grand Prix Denver LLC (3630); Grand Prix East Lansing LLC (3741); Grand Prix El Segundo LLC (3707); Grand Prix Englewood / Denver South LLC (3701); Grand Prix Fixed Lessee LLC (9979); Grand Prix Floating Lessee LLC (4290); Grand Prix Fremont LLC (3703); Grand Prix Ft. Lauderdale LLC (3705); Grand Prix Ft. Wayne LLC (3704);

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I, Nathan Cook, declare as follows: 1. I am the Chief Financial Officer2 of Innkeepers USA Trust (Innkeepers), a

self-administered real estate investment trust organized under the laws of Maryland, which is the direct subsidiary of debtor Grand Prix Holdings LLC and the direct or indirect parent of each of the other debtors and debtors in possession (collectively, the Debtors) in the above-captioned chapter 11 cases (the Chapter 11 Cases). I am currently a Managing Director with

AlixPartners, LLC and have served as the Chief Financial Officer of Innkeepers since August 1, 2010. I have worked as a restructuring and financial consultant for over 15 years serving various industries including, among others, Real Estate, Manufacturing, Energy and Utilities, Construction, Consumer Packaged Goods, and Retail. I have substantial knowledge and

experience advising large companies and assisting troubled companies with stabilizing their

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. See Order Authorizing and Approving the Retention and Employment of AP Services, LLC and Designating Nathan J. Cook as Interim Chief Financial Officer to the Debtors Nunc Pro Tunc to the Petition Date [Docket No. 192].

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financial condition, analyzing their options, and developing appropriate business plans to accomplish restructuring initiatives. If called and sworn as a witness, I could and would testify competently to the matters set forth herein. 2. I submit this supplemental declaration (this Supplemental Declaration) in

accordance with Rule 1007-2 of the Local Bankruptcy Rules for the Southern District of New York (the Local Bankruptcy Rules) in support of the Debtors Cash Collateral Motion and Cash Management Motion and in Response to Objections Thereto (the Reply), which was filed on August 27, 2010.3 3. The facts set forth in this Supplemental Declaration are based upon my personal

knowledge, upon information and belief, or upon records kept in the ordinary course of business. 4. I have reviewed the Second Declaration of Ronald Greenspan in support of the

Midland Objection4 and attached as Exhibit A thereto (the Second Greenspan Declaration). As noted in my Initial Declaration,5 Mr. Greenspans analysis in support of Midlands cash management proposal is flawed and based on a number of faulty assumptions. It is my

understanding that Mr. Greenspan testified during his deposition about the bases for his assertion that the cash collateral of the Floating Rate Pool will fall short of the estimated obligations to be

Debtors Omnibus Reply in Support of the Debtors Cash Collateral Motion, Cash Management Motion, Lehman DIP Motion, and Five Mile DIP Motion, and in Response to Objections Thereto (the Reply) [Docket No. 337]. Amended Objection of Midland Loan Services, Inc., Special Servicer for the Fixed Rate Trustee to (1) the Motion (A) Authorizing the Debtors to (i) Use the Adequate Protection Parties Cash Collateral and (ii) Provide Adequate Protection to the Adequate Protection Parties Pursuant to 11 U.S.C. 361, 362, and 363 and (B) Scheduling a Final Hearing Pursuant to Bankruptcy Rule 4001(B) and (2) Motion for Entry of an Order Authorizing the Continued Use of (I) Existing Cash Management System, as Modified Herein, (II) Existing Bank Accounts, (III) Existing Business Forms, and (IV) Certain Existing Investment Guidelines [Docket No. 259] (the Midland Objection). Declaration of Nathan Cook, Chief Financial Officer of Innkeepers USA Trust, in Support of the Debtors Cash Collateral Motion and Cash Management Motion and in Response to Objections Thereto [Docket No. 338] (the Initial Declaration).

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incurred by the Floating Rate Debtors in the first six months of these cases. Second Greenspan Decl. at 2. Mr. Greenspan projects the Floating Rate will incur approximately $1.9 million of obligations in excess of its cash flow . . . . Id. at 3. As noted in my Initial Declaration, Mr. Greenspan makes several faulty assumptions that, when corrected, actually demonstrate that the Floating Rate Pool is expected to generate $1.6 million of net cash flow through December 31, 2010, and that do not support Midlands drastic cash management segregation proposal. 5. First, Mr. Greenspans analysis is predicated on an accrual accounting method;

however, the appropriate method is a cash-based method, which is the basis for excess cash flow distributions under the cash flow waterfall. Second, the analysis assumes a cash flow period of July 1, 2010 through December 31, 2010, and, therefore, failed to remove the pre-petition period of July 1 through July 18, 2010. Third, the Debtors now have actual cash flow figures for the period July 19 through July 31, 2010 that demonstrate the Debtors outperformed their initial 13Week Cash Forecast. In fact, the Debtors have estimated that during the postpetition period in July (July 19 through July 31, 2010), they generated approximately $8.8 million of excess cash flow, and that every Tranche of Debt was cash positive.6 Fourth, Mr. Greenspan includes capital expenditures at 4% of revenues, whereas the Debtors have only budgeted 1.5% for maintenance and emergency capital expenditures, as is clearly reflected in the initial 13-Week Forecast. Fifth, Mr. Greenspan had included professional fees associated with an Equity

Committee, whereas no such committee has been appointed. In fact, I understand that the U.S. Trustee has rejected the request for the appointment of an Equity Committee. Sixth, Mr. Greenspan included accrued professional fees in his calculation, whereas only actual cash payments to professionals during this period would impact potential inter-tranche borrowing.
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We believe Hilton Ontario is cash flow positive during this period and this will be confirmed upon receipt of financial statements from the receiver.

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More specifically, Mr. Greenspan assumed that there would not be a 20% holdback of fees paid to Kirkland & Ellis LLP, Moelis & Company LLC, Jefferies & Company, Inc., and Morrison & Foerster LLP when in fact there will be such a holdback. Mr. Greenspan also assumed that all professional fees are paid the moment when they accrue, when in actuality there will be a delay from the time of accrual to payment due to the normal process of submitting monthly invoices after the end of the month, with payment of such invoices thereafter. 6. Accounting for Mr. Greenspans flawed assumptions and still applying his

methodology leads to an analysis that shows that properties collateralizing the Floating Rate Pool will generate positive cash flows of approximately $1.6 million through December 31, 2010. I have provided an analysis supporting this conclusion, attached hereto as Exhibit A. In addition, and as noted in my Initial Declaration, the hotels in each Tranche of Debt generally perform similarly to the other hotels within the enterprise. During the period from July 19 to July 31, the only postpetition period for which the Debtors have a reliable estimate, the Floating Rate Loan properties, which comprise approximately 27% of the Debtors collateral based on relative number of hotels, generated a similar percentage of the excess cash generated by the enterprise (after accounting for disbursements for operating expenses).

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Pursuant to 28 U.S.C. 1746, I declare under penalty of perjury that the foregoing statements are true and correct.

Dated: August 30, 2010

By:

Nathan Cook ChiefFinancial Officer Innkeepers USA Trust

EXHIBIT A

InnkeepersUSATrust IllustrativeFloatingPoolCashFlowsthrough12/31/10

GreenspanAnalysis 7/1/10Through12/31/10
Revenue Expenses EBITDA $ 36.8 (29.0) $ 7.8

CorrectedGreenspanAnalysis 7/19/10Through 12/31/10[1]

$ 33.4 (25.5) $ 8.0

DIPInterest[2] AllocatedCorporateOverhead[3] Capex[4] AllocatedProfessionalFees[5]

$ (0.4) (1.1) (1.5) (6.7)

$ (0.4) (1.0) (0.4) (4.5)

NetCashFlow

$(1.9)

$1.6

[1]IncludesactualcashflowresultsfortheperiodJuly19,2010throughJuly31,2010. [2]$5.4MMdrawnatclose.Includes7.0%interestfor4monthsand1.5%offees. [3]AllocationpercentagesbasedonFlashReportprovidedonAugust16,2010. [4]IncludesactualCapexthroughJuly31,2010and1.5%ofRevenuesforAugustthroughDecember(asbudgetedinJuly19,201013WeekForecast). [5]ProfessionalFeesadjustedto:(a)removefeesassociatedwithEquityCommittee,(b)reflect20%holdbackforKirkland&Ellis,Moelis, Morrison&Foerster,andJefferies&Co.,and(c)reflect45daysonaveragebetweenthedatethatfeesandexpensesareincurredand thedateonwhichtheyarepaid.