Exhibit 10.1(e)

 

FOURTH AMENDMENT TO THE SECOND AMENDED

AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

OF

INNKEEPERS USA LIMITED PARTNERSHIP

 

This Fourth Amendment (this “Amendment”) to the Second Amended and Restated
Agreement of Limited Partnership of Innkeepers USA Limited Partnership (the
“Partnership”) dated November 1, 1996 (the “Partnership Agreement”) is entered
into as of January 20, 2004, by and among Innkeepers Financial Corporation, a
Virginia corporation (the “General Partner”), which is the sole general partner
of the Partnership, and Innkeepers USA Trust, a Maryland real estate investment
trust (the “Trust”), which is the sole shareholder of the General Partner. All
capitalized terms used herein and not otherwise defined shall have the meanings
assigned to them in the Partnership Agreement.

 

WHEREAS, the Trust, on even date herewith, has issued 5,800,000 of its 8.0%
Series C cumulative preferred shares of beneficial interest, $.01 par value per
share, having a liquidation preference equivalent to $25.00 per share (the
“Series C Preferred Shares”), and has sold such Series C Preferred Shares in an
underwritten public offering (the “Series C Offering”);

 

WHEREAS, the Trust desires to contribute the net proceeds of the sale of the
Series C Preferred Shares through the General Partner to the Partnership in
exchange for the issuance to the General Partner of preferred partnership
interests in the Partnership as set forth herein;

 

WHEREAS, the General Partner is authorized to cause the Partnership to issue
interests in the Partnership to the General Partner in exchange for such
contribution of such net proceeds made by the Trust through the General Partner;

 

WHEREAS, the Partnership will use a portion of the net proceeds to redeem from
the General Partner currently outstanding Series A Preferred Partnership Units
in the Partnership (as set forth herein);

 

WHEREAS, on December 15, 2003, the holders of common limited partnership units
and the Class B Limited Partnership Units of the Partnership consented to the
Series C Offering and the issuance by the Partnership of corresponding preferred
partnership interests in the Partnership issued in connection with the Series C
Offering.

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree to amend the Partnership Agreement
as follows:

 

Section 1. Redemption of Series A Preferred Partnership Units.

 

The Partnership hereby redeems the Series A Preferred Units in the Partnership.

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Section 2. Contribution.

 

The Trust hereby contributes through the General Partner to the Partnership the
entire net proceeds received by the Trust from the issuance of the Series C
Preferred Shares. The Trust shall be deemed to have made a Capital Contribution
to the Partnership in an amount equal to the gross proceeds raised in connection
with the issuance of such shares of Series C Preferred Shares, which is
$145,000,000, and the Partnership shall be deemed simultaneously to have paid
for the costs and expenses relating to the offer, registration and sale of the
Series C Preferred Shares.

 

Section 3. Issuance of Series C Preferred Units.

 

In consideration of the contribution to the Partnership made by the Trust
through the General Partner pursuant to Section 2 hereof, the Partnership hereby
issues to the General Partner 5,800,000 Series C Preferred Partnership Units (as
defined below).

 

Section 4. Definitions.

 

(a) Article I of the Partnership Agreement is hereby amended by inserting in the
appropriate alphabetical locations the following definitions of Articles
Supplementary, Class B Preferred Partnership Unit, Class B Preferred Percentage
Interest, Series C Limited Partner, Series C Preference Value per Unit, Series C
Preferred Partnership Unit, Series C Preferred Percentage Interest, Series C
Preferred Return and Series C Preferred Share, as follows:

 

“Articles Supplementary” means the Articles Supplementary to the Declaration of
Trust setting forth the terms of the Series C Preferred Shares.

 

“Class B Preferred Partnership Unit” means a fractional, undivided share of the
ownership interests in the Partnership issued hereunder to the Class B Limited
Partners. The allocation of Class B Preferred Partnership Units among the
Partners shall be as set forth on Exhibit A, as it may be amended from time to
time. Upon any redemption, issuance or transfer of Class B Preferred Partnership
Units, the General Partner shall prepare a revised schedule in the form of
Exhibit A reflecting the names of the then-current Partners, their Common, Class
B Preferred, or Series C Preferred Percentage Interests, and the number of
Common Partnership Units or Preferred Partnership Units owned by each Partner.

 

“Class B Preferred Percentage Interest” means the percentage ownership interest
in the Class B Preferred Partnership Units of each Partner that holds Class B
Preferred Partnership Units, as determined by dividing the number of Class B
Preferred Partnership Units held by such Partner by the total number of Class B
Preferred Partnership Units then outstanding.

 

“Series C Limited Partner” means any Person named as a Series C Limited Partner
on Exhibit A, and any Person who becomes a Substitute or Additional Series C
Limited Partner, in such Person’s capacity as a Series C Limited Partner in the
Partnership.

 

“Series C Preference Value per Unit” means, with respect to each outstanding
Series C Preferred Partnership Unit, the liquidation preference value of $25.00.

 

“Series C Preferred Partnership Unit” means a share of the ownership interests
in the Partnership designated as Series C Preferred Partnership Units and issued
to the General Partner in exchange for the net proceeds of the issuance by the
Trust of its Series C Preferred Shares, which Series C Preferred Partnership
Units shall have the designations, preferences, privileges, limitations and

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relative rights set forth in Section 4.02(f) hereof. The allocation of Series C
Preferred Partnership Units shall be as set forth on Exhibit A, as may be
amended from time to time. Upon any redemption, issuance or transfer of Series C
Preferred Partnership Units, the General Partner shall prepare a revised
schedule in the form of Exhibit A reflecting the names of the then-current
Partners, their Common, Class B Preferred, or Series C Preferred Percentage
Interests, and the number of Common or Preferred Partnership Units owned by each
Partner.

 

“Series C Preferred Percentage Interest” means the percentage ownership interest
in the Series C Preferred Partnership Units of each Partner that holds Series C
Preferred Partnership Units, as determined by dividing the number of Series C
Preferred Partnership Units held by such Partner by the total number of Series C
Preferred Partnership Units then outstanding.

 

“Series C Preferred Return” means, on each Partnership Record Date following the
date of this Agreement, an annualized amount equal to $2.00 per Series C
Preferred Partnership Unit. The Series C Preferred Return shall be cumulative
and shall be prorated for any partial calendar year.

 

“Series C Preferred Share” means one 8.0% Series C Cumulative Preferred Share of
beneficial interest of the Company.

 

(b) Each of the definitions Class B Preference Value per Unit, Common
Partnership Units, Limited Partner and Preferred Partnership Unit set forth in
Article I of the Partnership Agreement is hereby deleted in its entirety and the
following new definition is inserted in its place:

 

“Class B Preference Value per Unit” means, with respect to each Class B
Preferred Partnership Unit held by each Class B Limited Partner, the liquidation
preference value of $11.00 per Class B Preferred Partnership Unit.

 

“Common Partnership Unit” means a fractional, undivided share of the ownership
interests in the Partnership issued hereunder to the General Partner and the
Class A Limited Partners. The allocation of Common Partnership Units among the
General Partner and the Class A Limited Partners shall be as set forth on
Exhibit A, as may be amended from time to time. Upon any redemption, issuance or
transfer of Common Partnership Units, the General Partner shall prepare a
revised schedule in the form of Exhibit A reflecting the names of the
then-current Partners, their Common, Class B Preferred, or Series C Preferred
Percentage Interests, and the number of Common Partnership Units or Preferred
Partnership Units owned by each Partner.

 

“Limited Partner” means any Person named as a Class A Limited Partner, a Class B
Limited Partner or Series C Limited Partner on Exhibit A, and any Person who
becomes a Substitute or Additional Limited Partner, in such Person’s capacity as
a Limited Partner in the Partnership.

 

“Preferred Partnership Unit” means a Class B Preferred Partnership Unit, a
Series C Preferred Partnership Unit, or any other unit of preferred partnership
interest in the Partnership.

 

Section 5. Issuance of Superior and Pari Passu Partnership Units.

 

Article IV, Section 4.02(c) of the Partnership Agreement is hereby deleted in
its entirety and the following new Section 4.02(c) is inserted in its place:

 

“(c) Issuance of Superior and Pari Passu Partnership Units. The Partnership may
issue at any time Partnership Units that have income, distribution, and
liquidation rights subordinate to the income, distribution, and liquidation
rights of the Class B Preferred Partnership Units. However, as long as the Class
B Preferred Partnership Units remain outstanding (the “Limitation

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Period”), the Partnership may issue Partnership Units with income, distribution,
or liquidation rights that are superior to (“Superior Partnership Units”) or the
same as (“Pari Passu Partnership Units”) the income, distribution, or
liquidation rights of the Class B Preferred Partnership Units if, and only if,
immediately after such issuance (i) the value of all of the Superior Partnership
Units that would be outstanding immediately after such issuance would not exceed
an amount equal to 18.7% of the aggregate value of the total outstanding
partnership interests in the Partnership immediately after such issuance (“Total
Equity”), and (ii) the value of all of the Pari Passu Partnership Units and the
Superior Partnership Units, taken together, that would be outstanding
immediately after such issuance would not exceed an amount equal to (A) 22% of
the Total Equity, plus (B) the value of the Class B Preferred Partnership Units
issued to the partnerships controlled by Jack P. DeBoer that owned the Class B
Hotels, minus (C) the value of such remaining outstanding Class B Preferred
Partnership Units. For purposes of this Section 4.02(c), Total Equity shall
include (i) all Preferred Partnership Units, (ii) all Common Partnership Units
held by the General Partner, the Company and the Class A Limited Partners and
(iii) all Superior Partnership Units and Pari Passu Partnership Units held by
(or to be issued to) the General Partner, the Company or others. For purposes of
this Section 4.02(c), (A) the deemed value of any Preferred Partnership Units,
Superior Partnership Units and Pari Passu Partnership Units outstanding and to
be outstanding shall be the aggregate liquidation preference value of such
Partnership Units, and (B) the deemed value of any Common Partnership Units
shall be the number of such Partnership Units outstanding multiplied by the
reported closing share price of one Common Share on the business day prior to
the issuance of Partnership Units on the New York Stock Exchange or the exchange
on which the Common Shares are then primarily traded. The restrictions in this
paragraph shall terminate when the Class B Preferred Partnership Units are no
longer outstanding. During the Limitation Period, the Partnership may not issue
Superior Partnership Units in exchange for non-cash property. None of the
limitations in this paragraph shall prevent the Partnership from issuing Class B
Preferred Partnership Units in connection with the acquisition of the seven
Residence Inn hotels owned by partnerships controlled by Jack P. DeBoer.

 

Section 6. Creation of Series C Preferred Partnership Units.

 

Article IV, Section 4.02 of the Partnership Agreement is hereby amended by
adding Section 4.02(f) as follows:

 

“(f) 8.0% Series C Preferred Partnership Units.

 

(1) Designation and Number. A series of Partnership Units, designated the “8.0%
Series C Preferred Partnership Units”, is hereby established. The number of
Series C Preferred Partnership Units shall be as set forth on Exhibit A hereto.

 

(2) Rank. The Series C Preferred Partnership Units will, with respect to
distribution rights and rights upon liquidation, dissolution or winding up of
the Partnership, rank (i) prior or senior to all classes or series of Common
Partnership Units of the Partnership, and to all Partnership Units ranking
junior to the Series C Preferred Partnership Units with respect to distribution
rights or rights upon liquidation, dissolution or winding up of the Partnership;
(ii) on a parity with the Class B Preferred Partnership Units and all
Partnership Units issued by the Partnership the terms of which specifically
provide that

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such Partnership Units rank on a parity with the Series C Preferred Partnership
Units with respect to distribution rights or rights upon liquidation,
dissolution or winding up of the Partnership; and (iii) junior to all existing
and future indebtedness of the Partnership. The term “Partnership Units” does
not include convertible debt securities, which will rank senior to the Series C
Preferred Partnership Units prior to conversion.

 

(3) Distributions.

 

(a) Holders of the Series C Preferred Partnership Units are entitled to receive
cumulative cash distributions in accordance with Section 5.02(a)(i)(B) hereof.
Notwithstanding the provisions of Section 5.02(a) hereof, distributions on the
Series C Preferred Partnership Units shall be cumulative from the date of
original issue and shall be payable quarterly in arrears on or before the last
Tuesday of January, April, July and October of each year, or, if not a Business
Day (as defined below), the next succeeding business day (each, a “Distribution
Payment Date”) commencing April 27, 2004. “Business Day” shall mean any day
other than a Saturday, Sunday or other day on which commercial banks in the City
of New York are authorized or required to close. The first distribution will be
payable for the period beginning January 20, 2004. Any distribution payable on
the Series C Preferred Partnership Units for any partial distribution period
will be computed on the basis of a 360-day year consisting of twelve 30 day
months. Distributions will be payable to holders of record as they appear in the
ownership records of the Partnership at the close of business on the Partnership
Record Date.

 

(b) The amount of any distributions accrued on any Series C Preferred
Partnership Units at any Distribution Payment Date shall be the amount of any
unpaid distributions accumulated thereon, to and including such Distribution
Payment Date, whether or not earned or declared, and the amount of distributions
accrued on any Series C Preferred Partnership Units at any date other than a
Distribution Payment Date shall be equal to the sum of the amount of any unpaid
distributions accumulated thereon, to and including the last preceding
Distribution Payment Date, whether or not earned or declared, plus an amount
calculated on the basis of the Series C Preferred Return for the period after
such last preceding Distribution Payment Date to and including the date as of
which the calculation is made based on a 360-day year of twelve 30-day months.

 

(c) Except as provided in subsection (a) hereof, the holder of the Series C
Preferred Partnership Units will not be entitled to any distributions in excess
of full cumulative distributions as described above and shall not be entitled to
participate in the earnings or assets of the Partnership, and no interest, or
sum of money in lieu of interest, shall be payable in respect of any
distribution payment or payments on the Series C Preferred Partnership Units
which may be in arrears.

 

(d) No distributions on Series C Preferred Partnership Units shall be declared
by the General Partner or paid or set apart for payment by the Partnership if
the terms and provisions of any agreement of the Partnership, including any
agreement relating to its indebtedness, prohibit such declaration, payment or
setting apart for payment or provide that such declaration, payment or setting
apart for payment would constitute a breach thereof or a default thereunder, or
if such declaration or payment shall be restricted or

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prohibited by law. Notwithstanding the foregoing, distributions on the Series C
Preferred Partnership Units will accrue whether or not the Partnership has
earnings, whether or not there is available cash flow for the payment of such
distributions and whether or not such distributions are declared. Accrued but
unpaid distributions on the Series C Preferred Partnership Units will not bear
interest and holders of the Series C Preferred Partnership Units will not be
entitled to any distributions in excess of full cumulative distributions
described above.

 

(e) When distributions are not paid in full (or a sum sufficient for such full
payment is not so set apart) upon the Series C Preferred Partnership Units and
any other series of Preferred Partnership Units ranking on a parity as to
distributions with the Series C Preferred Partnership Units, all distributions
declared upon the Series C Preferred Partnership Units and any other series of
Preferred Partnership Units ranking on a parity as to distributions with the
Series C Preferred Partnership Units shall be declared pro rata so that the
amount of distributions declared per Series C Preferred Partnership Unit and
such other series of Preferred Partnership Units shall in all cases bear to each
other the same ratio that accrued distributions per Series C Preferred
Partnership Unit and such other series of Preferred Partnership Units (which
shall not include any accrual in respect of unpaid distributions for prior
distribution periods if such Preferred Partnership Units do not have a
cumulative distribution) bear to each other. Except as set forth in the
preceding sentence, no distributions will be declared or paid or set apart for
payment on any Partnership Units or any other series of Preferred Partnership
Units ranking, as to distributions, on a parity with the Series C Preferred
Partnership Units for any period unless full cumulative distributions have been
or contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof is set apart for such payment on the Series C Preferred
Partnership Units for all past distribution periods and the then current
distribution period.

 

(f) Except as provided in the immediately preceding paragraph, unless full
cumulative distributions on the Series C Preferred Partnership Units have been
or contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof is set apart for payment for all past distribution periods
and the then current distribution period, no distributions (other than a
distribution of Common Partnership Units or other Partnership Units ranking
junior to the Series C Preferred Partnership Units as to distributions and upon
liquidation) shall be declared or paid or set aside for payment with respect to
Common Partnership Units, or any other Partnership Units ranking junior to the
Series C Preferred Partnership Units as to distributions or upon liquidation,
nor shall any Common Partnership Units, or any other Partnership Units in the
Partnership ranking junior to or on a parity with the Series C Preferred
Partnership Units as to distributions or upon liquidation be redeemed, purchased
or otherwise acquired (other than the conversion of the Class B Preferred
Partnership Units) for any consideration (or any monies be paid to or made
available for a sinking fund for the redemption of any such units) by the
Partnership. Holders of Series C Preferred Partnership Units shall not be
entitled to any distribution, whether payable in cash, property or securities in
excess of full cumulative distributions on the Series C Preferred Partnership
Units as provided above.

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(4) Liquidation Preference. Upon any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Partnership, the holders of
Series C Preferred Partnership Units are entitled to distributions payable in
accordance with Section 5.06(a) hereof with respect to Series C Partnership
Units. The Partnership will promptly provide to the holders of Series C
Preferred Partnership Units written notice of any event triggering the right to
receive such liquidation distributions. After payment of the full amount of such
distribution pursuant to Section 5.06 hereof, the holders of Series C Preferred
Partnership Units will have no right or claim to any of the remaining assets of
the Partnership. The consolidation or merger of the Partnership with or into any
other partnership, corporation, trust or entity or of any other partnership or
corporation with or into the Partnership, or the sale, lease or conveyance of
all or substantially all of the property or business of the Partnership, shall
not be deemed to constitute a liquidation, dissolution or winding up of the
Partnership.

 

(5) Redemption.

 

(a) The Series C Preferred Partnership Units are not redeemable by the
Partnership prior to January 20, 2009. On and after January 20, 2009, the
Partnership, at its option upon not less than 30 nor more than 60 days’ written
notice, may redeem the Series C Preferred Partnership Units, in whole or in
part, at any time or from time to time, for a cash amount equal to the Series C
Preference Value per Unit, plus all accrued and unpaid distributions thereon to
the date fixed for redemption, without interest. A holder shall surrender its
Series C Preferred Partnership Units at the place designated in such notice and
shall be entitled to the redemption price and any accrued and unpaid
distributions payable upon such redemption following such surrender. If notice
of redemption of any Series C Preferred Partnership Units has been given and if
the funds necessary for such redemption have been set aside by the Partnership
in trust for the benefit of the holders of any Series C Preferred Partnership
Units so called for redemption, then from and after the redemption date
distributions will cease to accrue on such Series C Preferred Partnership Units,
such Series C Preferred Partnership Units shall no longer be deemed outstanding
and all rights of the holders of such Series C Preferred Partnership Units will
terminate, except the right to receive the redemption price. If less than all of
the outstanding Series C Preferred Partnership Units are to be redeemed, the
Series C Preferred Partnership Units to be redeemed shall be selected pro rata
(as nearly as may be practicable without creating fractional Series C Preferred
Partnership Units) or by any other equitable method determined by the General
Partner.

 

(b) Notice of redemption will be mailed or delivered to holders of Series C
Preferred Partnership Units not less than 30 nor more than 60 days prior to the
redemption date. In addition to any information required by law, each notice
shall state: (i) the redemption date; (ii) the redemption price; (iii) the
number of Series C Preferred Partnership Units to be redeemed; (iv) the place or
places where the Series C Preferred Partnership Units are to be surrendered for
payment of the redemption price; and (v) that distributions on the Series C
Preferred Partnership Units to be redeemed will cease to accrue on such
redemption date. If less than all of the Series C Preferred Partnership Units
held by any holder are to be redeemed, the notice mailed to such holder shall
also specify the number of Series C Preferred Partnership Units held by such
holder to be redeemed.

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(c) Immediately prior to any redemption of Series C Preferred Partnership Units,
the Partnership shall pay, in cash, any accumulated and unpaid distributions
through the redemption date, unless a redemption date falls after a Partnership
Record Date and prior to the corresponding Distribution Payment Date, in which
case each holder of Series C Preferred Partnership Units at the close of
business on such Partnership Record Date shall be entitled to the distribution
payable on such shares on the corresponding Distribution Payment Date
notwithstanding the redemption of such shares before such Distribution Payment
Date.

 

(d) If the Partnership exercises its optional redemption right with respect to
the Series C Preferred Partnership Units pursuant to this Section 4.02(f)(5),
then the Trust must redeem a corresponding number of Series C Preferred Shares.
Similarly, if the Trust exercises its optional redemption right with respect to
Series C Preferred Shares, then the Partnership must redeem a corresponding
number of Series C Preferred Partnership Units.

 

(6) Conversion. Except as provided in Section 4.02(f) hereof, the Series C
Preferred Partnership Units are not redeemable for, convertible into or
exchangeable for any other property or securities of the Partnership or the
General Partner.”

 

Section 6. Percentage Interests.

 

Article IV, Section 4.05 is hereby deleted in its entirety and the following new
Section 4.05 is inserted in its place:

 

“4.05 Percentage Interests. If the number of outstanding Partnership Units
increases or decreases during a taxable year, Class B Preferred Partnership
Units are converted into Common Partnership Units pursuant to Section 8.07
hereof, or Series C Preferred Partnership Units are redeemed pursuant to Section
4.02(f)(5) hereof, (i) the General Partner and each Class A Limited Partner’s
Common Percentage Interest shall be adjusted to a percentage equal to the number
of Common Partnership Units held by such Partner divided by the aggregate number
of outstanding Common Partnership Units, (ii) each Class B Limited Partner’s
Class B Preferred Percentage Interest shall be adjusted to a percentage equal to
the number of Class B Preferred Partnership Units held by such Partner divided
by the aggregate number of outstanding Class B Preferred Partnership Units, and
(iii) each Series C Limited Partner’s Series C Preferred Percentage Interest
shall be adjusted to a percentage equal to the number of the Series C Preferred
Partnership Units held by such Partner divided by the aggregate number of the
outstanding Series C Preferred Partnership Units. If the Partners’ Common, Class
B Preferred, or Series C Preferred Percentage Interests are adjusted pursuant to
this Section 4.05, gross income of the Partnership, Profits, and Losses for the
taxable year in which the adjustment occurs shall be allocated between the part
of the year ending on the day when the Partnership’s property is revalued by the
General Partner and the part of the year beginning on the following day either
(i) as if the taxable year had ended on the date

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of the adjustment or (ii) based on the number of days in each part. The General
Partner, in its sole discretion, shall determine which method shall be used to
allocate gross income of the Partnership, Profits, and Losses for the taxable
year in which the adjustment occurs. The allocation of gross income of the
Partnership, Profits, and Losses for the earlier part of the year shall be based
on the percentage interests before adjustment, and the allocation of gross
income of the Partnership, Profits, and Losses for the later part shall be based
on the adjusted percentage interests.”

 

Section 7. Gross Income Allocation.

 

Article V, Section 5.01(a) is hereby deleted in its entirety and the following
new Section 5.01(a) is inserted in its place:

 

“(a) Gross Income. Gross income of the Partnership for each fiscal year of the
Partnership shall be allocated pari passu to (i) the Class B Limited Partners in
proportion to their Class B Preferred Percentage Interests until the aggregate
amount of gross income allocated to the Class B Limited Partners under this
Section 5.01(a) for the current and all prior years equals the aggregate amount
of the Class B Preferred Return paid to the Class B Limited Partners pursuant to
Sections 5.02(a)(i)(A), 5.06(a)(i)(A), 8.07 and 8.08 for the current and all
prior years, and (ii) the Series C Limited Partners in proportion to their
Series C Preferred Percentage Interests until the aggregate amount of gross
income allocated to the Series C Limited Partners under this Section 5.01(a) for
the current and all prior years equals the aggregate amount of the Series C
Preferred Return paid to the Series C Limited Partners pursuant to Sections
5.02(a)(i)(B) and 5.06(a)(i)(B) for the current and all prior years. In the
event that the Partnership has insufficient gross income to allocate the
appropriate amounts to both the Class B Limited Partners and the Series C
Limited Partners under this Section 5.01(a), the Partnership’s gross income will
be allocated pro rata (on the basis set forth above) between the Class B Limited
Partners, on the one hand, and the Series C Limited Partners, on the other
hand.”

 

Section 8. Distribution of Cash.

 

Article V, Section 5.02(a) is hereby deleted in its entirety and the following
new Section 5.02(a) is inserted in its place:

 

“(a) The General Partner shall distribute cash on a quarterly (or, at the
election of the General Partner, more frequent) basis, in an amount determined
by the General Partner in its sole discretion, to the Partners who are Partners
on the Partnership Record Date with respect to such quarter (or other
distribution period), as follows:

 

(i) First, (A) to the Class B Limited Partners in accordance with their
respective Class B Preferred Percentage Interests on the Partnership Record Date
until the Class B Limited Partners have received an amount equal to the excess,
if any, of (I) their Class B Preferred Return for the current and all prior
years over (II) the sum of all prior Class B Preferred Return distributions to
the Class B Limited Partners pursuant to this Section 5.02(a)(i)(A) and Sections
8.07 and 8.08 hereof, and (B) to the Series C Limited Partners in accordance
with their respective Series C Preferred Percentage Interests on the Partnership
Record Date until the Series C Limited Partners have received an amount

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equal to the excess, if any, of (I) their Series C Preferred Return for the
current and all prior years over (II) the sum of all prior Series C Preferred
Return distributions to the Series C Limited Partners pursuant to this Section
5.02(a)(i)(B); and

 

(ii) Thereafter, to the Partners in accordance with their respective Common
Percentage Interests on the Partnership Record Date;

 

provided, however, that if a new or existing Partner acquires additional
Partnership Units in exchange for a Capital Contribution on any date other than
a Partnership Record Date, the cash distribution attributable to such additional
Partnership Units for the Partnership Record Date following the issuance of such
additional Partnership Units shall be reduced in the proportion that the number
of days that such additional Partnership Units are held by such Partner bears to
the number of days in the relevant Distribution Period; and further provided,
that if a Class B Limited Partner converts all or a portion of its Class B
Preferred Partnership Units into Common Partnership Units pursuant to Section
8.07 hereof on any date other than a Partnership Record Date, on the succeeding
Partnership Record Date, such Class B Limited Partner shall receive the sum of
(i) a pro rata portion of the Class B Preferred Return for such Partnership
Record Date attributable to the portion of the Distribution Period prior to and
including the date of the conversion and (ii) a pro rata portion of the amount
such Partner is entitled to receive as a holder of Common Partnership Units,
which amount is attributable to the portion of the Distribution Period following
the date of the conversion; and further provided, that if all or a portion of
the Series C Preferred Partnership Units are redeemed pursuant to Section
4.02(f)(5) hereof on any date other than a Partnership Record Date, on the
succeeding Partnership Record Date, with respect to the shares redeemed, the
Series C Limited Partners shall receive a pro rata portion of the Series C
Preferred Return for such Partnership Record Date attributable to the portion of
the Distribution Period prior to and including the date of the redemption; and
further provided that in the event the Partnership has insufficient cash to
distribute the correct amounts to both the Class B Limited Partners and the
Series C Limited Partners under Section 5.02(a)(i), the Partnership’s
distributable cash will be distributed pro rata (on the basis set forth above)
among the Class B Limited Partners, on the one hand, and the Series C Limited
Partners, on the other hand.”

 

Section 9. Distribution Upon Liquidation.

 

Article V, Section 5.06(a) is hereby deleted in its entirety and the following
new Section 5.06(a) is inserted in its place:

 

“(a) Upon liquidation of the Partnership, after payment of, or adequate
provision for, debts and obligations of the Partnership, including any Partner
loans, any remaining assets of the Partnership shall be distributed in the
following order of priority:

 

(i) First, (A) to the Class B Limited Partners, in proportion to their
respective Class B Preferred Percentage Interests, the amount of any accrued but
unpaid Class B Preferred Return for the current and all prior years, and (B) to
the Series C Limited Partners in proportion to their respective Series C
Preferred Percentage Interests, the amount of any accrued but unpaid Series C
Preferred Return for the current and all prior years;

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(ii) Second, (A) to each Class B Limited Partner, the greater of (I) the Class B
Preference Value per Unit multiplied by the number of Class B Preferred
Partnership Units held by such Partner, (II) such Partner’s positive Capital
Account balance that is attributable to Class B Preferred Partnership Units, or
(III) the amount such Partner would have received upon the liquidation of the
Partnership if such Partner had converted its Class B Preferred Partnership
Units into Common Partnership Units pursuant to Section 8.07 hereof immediately
prior to the liquidation, and (B) to each Series C Limited Partner, the greater
of (I) the Series C Preference Value per Unit multiplied by the number of Series
A Preferred Partnership Units held by such Partner or (II) such Partner’s
positive Capital Account balance that is attributable to Series C Preferred
Partnership Units; and

 

(iii) Thereafter, to the Class A Limited Partners and the General Partner with
positive Capital Accounts in accordance with their respective positive Capital
Account balances.

 

In the event that the Partnership has insufficient assets to distribute the
appropriate amounts to both the Class B Limited Partners and the Series C
Limited Partners under Section 5.06(a)(i) or (ii), the Partnership’s assets will
be distributed pro rata (on the basis set forth above) among the Class B Limited
Partners, on the one hand, and the Series C Limited Partners, on the other hand.

 

The Capital Account of each Partner shall be determined after all adjustments
made in accordance with Sections 5.01, 5.02 and 5.06(a)(i) hereof resulting from
Partnership operations and from all sales and dispositions of all or any part of
the Partnership’s assets.”

 

Section 10. Automatic Conversion of Class B Preferred Partnership Units.

 

Article VIII, Section 8.08 is hereby deleted in its entirety and the following
new Section 8.08 is inserted in its place:

 

“8.08 Automatic Conversion of Preferred Partnership Units. On the tenth
anniversary of the First Class B Admission Date, the Class B Preferred
Partnership Units will be converted automatically into Common Partnership Units
on a one-for-one basis. If on such date any portion of the Class B Preferred
Return is accrued but unpaid, the Partnership shall pay such amount to the Class
B Limited Partners in the form of cash, a demand promissory note having an
initial principal balance equal to such amount and bearing an annual interest
rate of 10.5%, or Common Partnership Units having a value equal to such amount,
at the election of each Class B Limited Partner. For purposes of the preceding
sentence, the value of a Common Partnership Unit shall equal the “Market Price”
of a Common Share (calculated in accordance with the second and third sentences
of the definition of “Cash Amount”) on the date of the conversion. Upon the
automatic conversion of the Class B Preferred Partnership Units into Common
Partnership Units, the Class B Limited Partners shall become Class A Limited
Partners.”

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Section 11. Amendment of Partnership Agreement.

 

Article XI is hereby deleted in its entirety and the following new Article XI is
inserted in its place:

 

“ARTICLE XI

 

AMENDMENT OF AGREEMENT

 

The General Partner may amend this Agreement in any respect; provided, however,
that the following amendments shall require the consent of the following
Partners:

 

(a) any amendment affecting the operation of the Redemption Right requires the
consent of Limited Partners (other than the General Partner) holding more than
66 2/3% of the Partnership Units held by the Limited Partners (other than those
held by the General Partner);

 

(b) any amendment affecting the operation of the Class B Conversion Right, the
Class B Preferred Return, or the Class B Preference Value per Unit requires the
consent of the Class B Limited Partners holding more than 66 2/3% of the Class B
Preferred Percentage Interests;

 

(c) any amendment affecting the operation of the Series C Preferred Return or
the Series C Preference Value per Unit requires the consent of the Series C
Limited Partners holding more than 66 2/3% of the Series C Preferred Percentage
Interests; and

 

(d) any amendment that would (i) affect the operation of the Conversion Factor,
(ii) adversely affect the rights of the Limited Partners to receive the
distributions payable to them hereunder (other than as a result of an issuance
of additional Partnership Units that is otherwise permitted by this Agreement),
(iii) alter the Partnership’s allocations of Profit and Loss, or (iv) impose on
the Limited Partners any obligation to make additional Capital Contributions to
the Partnership, requires the affirmative vote of 66 2/3% of the Percentage
Interests held by each class of Limited Partner (other than the General Partner)
adversely affected by such amendment.”

 

[Signature Page Follows]

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IN WITNESS WHEREOF, the foregoing Fourth Amendment to the Second Amended and
Restated Agreement of Limited Partnership of Innkeepers USA Limited Partnership
has been signed and delivered as of this 20th day of January, 2004, by the
undersigned sole general partner of the Partnership, as general partner, and by
the Trust, for purposes of Section 2 only.

 

INNKEEPERS FINANCIAL CORPORATION, a
Virginia corporation, as sole General Partner

By:

 

/s/ Mark A. Murphy

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Name:

 

Mark A. Murphy

Title:

 

Vice President

INNKEEPERS USA TRUST, a Maryland real
estate investment trust, as sole shareholder of the
General Partner.

By:

 

/s/ Mark A. Murphy

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Name:

 

Mark A. Murphy

Title:

 

General Counsel and Secretary

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Exhibit A

 

Exhibit A shall be amended to indicate which holders of Common Partnership Units
are Class A Limited Partners and to confirm that Class A Limited Partners hold
Common Partnership Units as well as to include the following information with
respect to the Series C Preferred Partnership Units:

 

SERIES C PREFERRED PARTNERSHIP UNITS

(Effective as of January 20, 2004)

 

Partner and Address

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Cash Amount of

Capital Contribution

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   Preferred Units

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Percentage of

Series C Partnership

Preferred Units

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Innkeepers Financial Corporation
306 Royal Poinciana Way
Palm Beach, Florida 33480

   $ 145,000,000    5,800,000    100.0 %

Total

   $ 145,000,000    5,8000,000    100.0 %     

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