<PAGE> 1
As filed with the Securities and Exchange Commission on November 16, 1995
Registration Nos. __________ and _________
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C>
STARWOOD LODGING TRUST STARWOOD LODGING CORPORATION
(Exact name of registrant as specified (Exact name of registrant as specified
in its governing instruments) in its governing instruments)
11845 West Olympic Blvd., Suite 550 11845 West Olympic Blvd., Suite 560
Los Angeles, California 90064 Los Angeles, California 90064
(310) 575-3900 (310) 575-3900
(Address of principal executive offices) (Address of principal executive offices)
------------
Maryland Maryland
(State or other jurisdiction (State or other jurisdiction
of incorporation or organization) of incorporation or organization)
52-0901263 52-1193298
(I.R.S. employer identification no.) (I.R.S. employer identification no.)
JEFFREY C. LAPIN KEVIN E. MALLORY
President and Chief Operating Officer Executive Vice President
11845 West Olympic Blvd., Suite 550 11845 West Olympic Blvd., Suite 560
Los Angeles, California 90064 Los Angeles, California 90064
(310) 575-3900 (310) 575-3900
(Name and address of agent for service) (Name and address of agent for service)
Copies to:
SHERWIN L. SAMUELS, Esq. JAMES M. ASHER, Esq.
Sidley & Austin ROBERT E. KING, JR., Esq.
555 West Fifth Street Rogers & Wells
Los Angeles, California 90013 200 Park Avenue
(213) 896-6000 New York, New York 10166
(212) 878-8000
</TABLE>
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Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================
Title of each class of | Proposed Maximum | Amount of
securities to be registered | Aggregate Offering Price | Registration Fee
- -------------------------------------------------------------------------------------------------------------
<S> | <C> | <C>
Shares of beneficial interest, $0.01 par | |
value, of Starwood Lodging Trust(3) Paired | |
with Shares of common stock, $0.01 par | |
value, of Starwood Lodging Corporation(3) | |
| |
Warrants to Purchase Paired Common Shares | |
| |
Shares of Preferred Stock, $0.01 par value, of| |
Starwood Lodging Trust which may be | |
paired with | |
| |
Shares of Preferred Stock, $0.01 par value, of| |
Starwood Lodging Corporation | |
| |
Debt Securities | |
| |
Total | $500,000,000 | $100,000
=============================================================================================================
</TABLE>
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The registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrants
shall file a further amendment that specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
===============================================================================
<PAGE> 3
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED NOVEMBER __, 1995
PROSPECTUS
$500,000,000
STARWOOD LODGING
STARWOOD LODGING TRUST STARWOOD LODGING CORPORATION
COMMON STOCK, WARRANTS, PREFERRED
STOCK AND DEBT SECURITIES
Starwood Lodging Trust (the "Trust") and Starwood Lodging Corporation
(the "Corporation" and, with the Trust, the "Company") may from time to time
offer in one or more series: (i) shares of beneficial interest, $.01 par value,
of the Trust (the "Trust Shares") and shares of common stock, $.01 par value,
of the Corporation (the "Corporation Shares") which are "paired" and traded as
units consisting of one Trust Share and one Corporation Share (the "Paired
Common Shares"); (ii) warrants to purchase Trust Shares and warrants to
purchase Corporation Shares which are "paired" and traded as units consisting
of one warrant to purchase Trust Shares and one warrant to purchase a like
number of Corporation Shares (the "Warrants"); (iii) shares of preferred stock,
$.01 par value, of the Trust (the "Trust Preferred Shares") and shares of
preferred stock, $.01 par value, of the Corporation (the "Corporation Preferred
Shares" and, with the Trust Preferred Shares, the "Preferred Shares") which
may, but are not required to, be "paired" with preferred stock of the other
entity; and (iv) unsecured debt securities of the Trust or the Corporation
(the "Debt Securities") with an aggregate public offering price of up to
$500,000,000 (or its equivalent in another currency based on the exchange rate
at the time of sale) in amounts, at prices and on terms to be determined at the
time of offering. The Trust or the Corporation may from time to time offer
in one or more series unsecured Debt Securities which may, but are not
required to, be paired with Debt Securities of the other entity. The Paired
Common Shares, Warrants, Preferred Shares and Debt Securities, (collectively,
the "Securities") may be offered, separately or together, in separate series
in amounts, at prices and on terms to be set forth in one or more supplements
to this Prospectus (each a "Prospectus Supplement").
The specific terms of the Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable Prospectus
Supplement and will include, where applicable: (i) in the case of Paired Common
Shares, any initial public offering price or, if applicable, information
regarding the exchange of units of partnership interest ("Units") of SLT Realty
Limited Partnership (the "Realty Partnership") and SLC Operating Limited
Partnership (the "Operating Partnership") for Paired Common Shares; (ii) in the
case of Warrants, the duration, offering price, exercise price and
detachability, if applicable; (iii) in the case of Preferred Shares, the
specific title and stated value, any dividend, liquidation, redemption,
conversion, voting and other rights, and any initial public offering price; and
(iv) in the case of Debt Securities, the specific title, aggregate principal
amount, currency, form (which may be registered or bearer, or certificated or
global), authorized denominations, maturity, rate (or manner of calculation
thereof) and time of payment of interest, terms for redemption at the option of
the issuer or repayment at the option of the holder, terms for sinking fund
payments, covenants and any initial public offering price. In addition, such
specific terms may include limitations on direct or beneficial ownership and
restrictions on transfer of the Securities, in each case as may be appropriate
to preserve the status of the Trust as a real estate investment trust ("REIT")
for United States federal income tax purposes.
<PAGE> 4
The applicable Prospectus Supplement will also contain information,
where applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the securities
covered by such Prospectus Supplement.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
---------------
NEITHER THE NEVADA GAMING COMMISSION NOR THE NEVADA STATE GAMING
CONTROL BOARD HAS PASSED ON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS OR THE INVESTMENT MERITS OF THE SECURITIES
OFFERED HEREBY. ANY REPRESENTATION TO
THE CONTRARY IS UNLAWFUL.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
The date of this Prospectus is November __, 1995.
The Securities may be offered directly, through agents designated from
time to time by the Trust or the Corporation or to or through underwriters or
dealers. If any agents or underwriters are involved in the sale of any of the
Securities, their names, and any applicable purchase price, fee, commission or
discount arrangement between or among them, will be set forth, or will be
calculable from the information set forth, in an accompanying Prospectus
Supplement. See "Plan of Distribution." No Securities may be sold without
delivery of a Prospectus Supplement describing the method and terms of the
offering of such series of Securities.
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<PAGE> 5
AVAILABLE INFORMATION
The Trust and the Corporation are subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, in accordance therewith, file reports, proxy or information
statements and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy or information statements and other
information can be inspected and copied at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the following regional
offices of the Commission: Seven World Trade Center, New York, New York 10048
and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661, and copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. Such reports, proxy statements and other
information concerning the Trust and the Corporation can also be inspected at
the offices of the New York Stock Exchange, Public Reference Section, 20 Broad
Street, New York, New York 10005.
The Company has filed with the Commission a registration statement on
Form S-3 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Securities offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. Statements contained
in this Prospectus as to the contents of any contract or other documents are
not necessarily complete, and in each instance, reference is made to the copy
of such contract or documents filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference. For further information with respect to the Trust, the Corporation
and the Securities offered hereby, reference is made to the Registration
Statement and exhibits thereto.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission under
the Securities Act and the Exchange Act are incorporated in this Prospectus by
reference and are made a part hereof:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1994.
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1995, June 30, 1995 and September 30, 1995.
3. The Company's Current Reports on Form 8-K, dated January 31, 1995,
June 8, 1995, September 20, 1995 and October 31, 1995.
4. The description of the Company's Paired Common Shares contained in
the Company's Registration Statement on Form 8-A, filed on October 3, 1986 and
any amendments or reports filed for the purpose of updating such descriptions
which have been filed by the Company with the Commission.
5. The financial statements of Embassy Suites - Tempe, Starwood
Wichita Investors, L.P., Capitol Hill Suites, French Quarter Square and
Sheraton Colony Square contained in the Company's Registration Statement on
Form S-2 filed on May 8, 1995 (Registration Nos. 33-59155 and 33-59155-01).
Each document filed by the Trust or the Corporation subsequent to the
date of this Prospectus pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act and prior to termination of the offering of all Securities to
which this Prospectus relates shall be deemed to be incorporated by reference
in this Prospectus and shall be part hereof from the date of filing of such
document. Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus (in the case of a statement in a previously-filed
document incorporated or deemed to be
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<PAGE> 6
incorporated by reference herein), in any accompanying Prospectus Supplement
relating to a specific offering of Securities or in any other subsequently
filed document that is also incorporated or deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus or any accompanying
Prospectus Supplement. Subject to the foregoing, all information appearing in
this Prospectus and each accompanying Prospectus Supplement is qualified in its
entirety by the information appearing in the documents incorporated by
reference.
Copies of all documents incorporated by reference, other than exhibits
to such documents not specifically incorporated by reference therein, will be
provided without charge to each person to whom this Prospectus is delivered,
upon oral or written request to Jayne Gordon, 11845 West Olympic Boulevard,
Suite 550, Los Angeles, California 90064.
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<PAGE> 7
THE COMPANY
The Company was reorganized, effective January 1, 1995, to combine the
hotel investment and operating businesses of the Company with certain hotel
investments of Starwood Capital Group, L.P. and certain of its affiliates
(collectively, "Starwood Capital"). Management believes that the Company's
unique "paired share" ownership structure gives it a competitive advantage over
other hotel REITs and other hotel owner/operators with respect to owning and
operating hotels, as discussed below. The Company has owned hotel assets since
1969 and has managed hotel assets since 1980. Starwood Capital has been an
active opportunistic investor in the hotel industry over the last three years.
As of September 30, 1995, the Company owned, operated and managed a
geographically diversified portfolio of hotel assets (the "Hotel Assets"),
including fee, ground lease and first mortgage interests in 46 hotel
properties, comprising over 9,829 rooms located in 20 states. Thirty-four of
such hotels are operated under licensing or franchise agreements with national
hotel organizations, including Marriott(TM), Embassy Suites(TM), Omni(TM),
Doubletree(TM), Radisson(TM), Residence Inn(TM), Holiday Inn(TM), Sheraton(TM),
Best Western(TM), Days Inn(TM), Ramada(TM), Quality Inn(TM) and Harvey(TM).
All of the Company's interests in the Hotel Assets are held by and its
operations conducted through the Realty Partnership and the Operating
Partnership, respectively. The Company is the sole general partner of each of
the Realty Partnership and the Operating Partnership and as of September 30,
1995, owned a controlling interest of approximately 69.9% in each of the Realty
Partnership and Operating Partnership. The remaining 30.1% interest in each of
the Realty Partnership and the Operating Partnership is owned by Starwood
Capital. As of September 30, 1995, Starwood Capital owned 30.5% of the equity
interests of the Company on a fully diluted basis.
The Company's paired share ownership structure is unique for a hotel
REIT because its shareholders own both the owner, the Trust, and the operator,
the Corporation, of the Company's hotels. Therefore, the Company's
shareholders retain the economic benefits of both the lease payments received
by the Trust and the operating profits realized by the Corporation while
maintaining the tax benefits of the Trust's REIT status. The pairing
arrangement creates total commonality of ownership, as the shares of beneficial
interest of the Trust (the "Trust Shares") and the shares of common stock of
the Corporation (the "Corporation Shares") are
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<PAGE> 8
paired on a one for one basis and may only be held or transferred as units
consisting of one Trust Share and one Corporation Share ("Paired Common
Shares").
The Trust was organized in 1969 as a Maryland real estate investment
trust. The Trust's executive offices are located at 11845 West Olympic
Boulevard, Suite 550, Los Angeles, California 90064; telephone (310) 575-3900.
The Corporation is a Maryland corporation formed in 1980. The
Corporation's executive offices are located at 11845 West Olympic Boulevard,
Suite 560, Los Angeles, California 90064; telephone (310) 575-3900.
USE OF PROCEEDS
The Company will contribute the entire net proceeds of any sale of
Securities to the Realty Partnership and the Operating Partnership in return
for securities of the Realty Partnership and the Operating Partnership
equivalent to the Securities being sold.
Except as otherwise provided in the applicable Prospectus Supplement,
the Company, the Realty Partnership and the Operating Partnership intend to use
any such net proceeds for working capital and general business purposes, which
may include the reduction of certain outstanding indebtedness, the financing of
future acquisitions and the improvement of certain properties in their
portfolio.
Pending application of the net proceeds, the Realty Partnership and
the Operating Partnership will invest such portion of the net proceeds in
interest-bearing accounts and short-term, interest-bearing securities, which,
in the case of the Realty Partnership, are consistent with the Trust's
intention to qualify for taxation as a REIT. Such investments may include, for
example, obligations of the Government National Mortgage Association, other
governmental and government agency securities, certificates of deposit,
interest-bearing bank deposits and mortgage loan participations.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratios of
earnings to fixed charges for the periods shown:
<TABLE>
<CAPTION>
Three Months Year Ended December 31,
Ended --------------------------------------------------------------------
September 30, 1995 1994 1993 1992 1991 1990
- ------------------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
2.04x .90x(1) .72x(1) .69x(1) .37x(1) .42x(1)
</TABLE>
(1) Earnings were inadequate to cover fixed charges by $9,439,000 in 1990,
$10,305,000 in 1991, $4,457,000 in 1992, $4,201,000 in 1993 and
$1,712,000 in 1994. These deficiencies occurred prior to the
Reorganization in January 1995.
The ratios of earnings to fixed charges were computed by dividing
earnings by fixed charges. For this purpose, earnings consist of income (loss)
before minority interest, extraordinary items, provisions for losses, gain
(loss) on sale and fixed charges (excluding capitalized interest). Fixed
charges consist of interest expense (including interest costs capitalized),
amortization of debt issuance costs and the portion of ground rent expense
representing an interest factor. To date, the Company has not issued any
preferred stock; therefore, the ratios of earnings to combined fixed charges
and preferred stock dividends are the same as the ratios presented above.
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<PAGE> 9
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under one or more indentures (an
"Indenture"), in each case among the Trust or the Corporation, as the case may
be, and a trustee (a "Trustee"). Any Indenture will be subject to, and
governed by, the Trust Indenture Act of 1939, as amended (the "TIA"). The
statements made hereunder relating to any Indenture and the Debt Securities to
be issued thereunder are summaries of the anticipated provisions thereof and do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all provisions of the Indentures and such Debt
Securities.
GENERAL
The Debt Securities will be direct, unsecured obligations of the Trust
or the Corporation, as the case may be, and will either rank equally with all
other unsecured and unsubordinated indebtedness of the issuing entity ("Senior
Securities") or, if so provided in the applicable Prospectus Supplement, be
subordinated in right of payment to the prior payment in full of the Senior
Debt as defined below) of the issuing entity as described under
"--Subordination" ("Subordinated Securities"). The Debt Securities may be
issued without limit as to aggregate principal amount, in one or more series,
in each case as established from time to time in or pursuant to authority
granted by a resolution of the governing board of the Trust or the Corporation,
respectively, or as established in one or more indentures supplemental to the
applicable Indenture. All Debt Securities of one series need not be issued at
the same time and, unless otherwise provided, a series may be reopened, without
the consent of the holders of the Debt Securities of such series, for issuances
of additional Debt Securities of such series.
It is anticipated that any Indenture will provide that there may be
more than one Trustee thereunder, each with respect to one or more series of
Debt Securities. Any Trustee under an Indenture may resign or be removed with
respect to one or more series of Debt Securities, and a successor Trustee may
be appointed to act with respect to such series. In the event that two or more
persons are acting as Trustee with respect to different series of Debt
Securities, each such Trustee shall be a trustee of a trust under the
applicable Indenture separate and apart from the trust administered by any
other Trustee, and, except as otherwise indicated herein, any action described
herein to be taken by a Trustee may be taken by each such Trustee with respect
to, and only with respect to, the one or more series of Debt Securities for
which it is Trustee under the applicable Indenture.
Reference is made to the Prospectus Supplement relating to the series
of Debt Securities being offered for the specific terms thereof, including:
(1) the title of such Debt Securities and whether such Debt
Securities are Senior Securities or Subordinated Securities;
(2) the aggregate principal amount of such Debt Securities and any
limit on such aggregate principal amount;
(3) the percentage of the principal amount at which such Debt
Securities will be issued and, if other than the principal
amount thereof, the portion of the principal amount thereof
payable upon declaration of acceleration of the maturity
thereof, or (if applicable) the portion of the principal
amount of such Debt Securities that is convertible into Paired
Common Shares or Preferred Shares, or the method by which any
such portion shall be determined;
(4) if convertible, the terms on which such Debt Securities are
convertible, including the initial conversion price or rate
and the conversion period and any applicable limitations on
the
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<PAGE> 10
ownership or transferability of the Paired Common Shares or
Preferred Shares receivable on conversion;
(5) the date or dates, or the method for determining such date or
dates, on which the principal of such Debt Securities will be
payable;
(6) the rate or rates (which may be fixed or variable), or the
method by which such rate or rates shall be determined, at
which such Debt Securities will bear interest, if any;
(7) the date or dates, or the method for determining such date or
dates, from which any interest will accrue, the dates on which
any such interest will be payable, the record dates for such
interest payment dates, or the method by which any such date
shall be determined, the person to whom such interest shall be
payable, and the basis upon which interest shall be calculated
if other than that of a 360-day year of twelve 30-day months;
(8) the place or places where the principal of (and premium, if
any) and interest, if any, on such Debt Securities will be
payable, such Debt Securities may be surrendered for
conversion or registration of transfer or exchange and where
notices or demands to or upon the Trust or the Corporation, as
the case may be, in respect of such Debt Securities, and the
applicable Indenture may be served;
(9) the period or periods within which, the price or prices at
which and the terms and conditions upon which such Debt
Securities may be redeemed, as a whole or in part, at the
option of the Trust or the Corporation, as the case may be, if
the issuer is to have such an option;
(10) the obligation, if any, of the issuer to redeem, repay or
purchase such Debt Securities pursuant to any sinking fund or
analogous provision or at the option of a holder thereof, and
the period or periods within which, the price or prices at
which and the terms and conditions upon which such Debt
Securities will be redeemed, repaid or purchased, as a whole
or in part, pursuant to such obligation;
(11) if other than United States dollars, the currency or
currencies in which such Debt Securities are denominated and
payable, which may be a foreign currency or units of two or
more foreign currencies or a composite currency or currencies,
and the terms and conditions relating thereto;
(12) whether the amount of payments of principal of (and premium,
if any) or interest, if any, on such Debt Securities may be
determined with reference to an index, formula or other method
(which index, formula or method may, but need not be, based on
a currency, currencies, currency unit or units or composite
currency or currencies) and the manner in which such amounts
shall be determined;
(13) the events of default or covenants of such Debt Securities, to
the extent different from or in addition to those described
herein;
(14) whether such Debt Securities will be issued in certificated
and/or book-entry form;
(15) whether such Debt Securities will be in registered or bearer
form and, if in registered form, the denominations thereof if
other than $1,000 and any integral multiple thereof and, if in
bearer form, the denominations thereof and terms and
conditions relating thereto;
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<PAGE> 11
(16) the applicability, if any, of the defeasance and covenant
defeasance provisions described herein, or any modification
thereof;
(17) whether and under what circumstances the Trust or the
Corporation, as the case may be, will pay additional amounts
on such Debt Securities in respect of any tax, assessment or
governmental charge and, if so, whether such issuer will have
the option to redeem such Debt Securities in lieu of making
such payment; and
(18) any other terms of such Debt Securities.
The Debt Securities may provide for less than the entire principal
amount thereof to be payable upon declaration of acceleration of the maturity
thereof ("Original Issue Discount Securities"). If material or applicable,
special United States federal income tax, accounting and other considerations
applicable to Original Issue Discount Securities will be described in the
applicable Prospectus Supplement.
Except as described under "Merger, Consolidation or Sale" or as may be
set forth in any Prospectus Supplement, an Indenture will not contain any other
provisions that would limit the ability of either the Trust or the Corporation
to incur indebtedness or that would afford holders of the Debt Securities
protection in the event of (i) a highly leveraged or similar transaction
involving the Trust or the Corporation, the management of the Trust or the
Corporation, or any affiliate of any such party, (ii) a change of control, or
(iii) a reorganization, restructuring, merger or similar transaction involving
the Trust or the Corporation that may adversely affect the holders of the Debt
Securities. Restrictions on ownership and transfers of the Paired Common
Shares and Preferred Shares are designed to preserve the Trust's status as a
REIT and, therefore, may act to prevent or hinder a change of control. See
"Description of Paired Common Shares--Ownership Limits; Restrictions on
Transfer; Repurchase and Redemption of Shares" and "Description of Preferred
Shares--Ownership Limits; Restrictions on Transfer; Repurchase and Redemption
of Shares." Reference is made to the applicable Prospectus Supplement for
information with respect to any deletions from, modifications of or additions
to the events of default or covenants that are described below, including any
addition of a covenant or other provision providing event risk or similar
protection.
DENOMINATIONS, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement,
the Debt Securities of any series which are registered securities (other than
registered securities issued in global form, which may be of any denomination),
shall be issuable in denominations of $1,000 and any integral multiple thereof.
Unless otherwise specified in the applicable Prospectus Supplement,
the principal of (and premium, if any) and interest on any series of Debt
Securities will be payable at the corporate trust office of the Trustee, the
address of which will be stated in the applicable Prospectus Supplement,
provided that, at the option of the Trust or the Corporation, as the case may
be, payment of interest may be made by check mailed to the address of the
person entitled thereto as it appears in the applicable register for such Debt
Securities or by wire transfer of funds to such person at an account maintained
within the United States.
Any interest not punctually paid or duly provided for on any interest
payment date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the holder on the applicable regular record
date and may either be paid to the person in whose name such Debt Security is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to the holder of such Debt Security not
less than 10 days prior to such Special Record Date, or may be paid at any time
in any other lawful manner, all as more completely described in the applicable
Indenture.
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<PAGE> 12
Subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for
other Debt Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations upon surrender of such
Debt Securities at the corporate trust office of the Trustee referred to above.
In addition, subject to certain limitations imposed upon Debt Securities issued
in book-entry form, the Debt Securities of any series may be surrendered for
conversion or registration of transfer thereof at the corporate trust office of
the Trustee referred to above. Every Debt Security surrendered for conversion,
registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer. No service charge will be made for any
registration of transfer or exchange of any Debt Securities, but the Trustee,
the Trust or the Corporation may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith. If the
applicable Prospectus Supplement refers to any transfer agent (in addition to
the Trustee) initially designated by the Trust or the Corporation, as the case
may be, with respect to any series of Debt Securities, such entity may at any
time rescind the designation of any such transfer agent or approve a change in
the location through which any such transfer agent acts, except that the Trust
or the Corporation, as the case may be, will be required to maintain a transfer
agent in each place of payment for such series. The Trust or the Corporation,
as the case may be, may at any time designate additional transfer agents with
respect to any series of Debt Securities.
Neither the Trust, the Corporation nor the Trustee shall be required
(i) to issue, register the transfer of or exchange any Debt Security if such
Debt Security may be among those selected for redemption during a period
beginning at the opening of business 15 days before the day of the mailing of a
notice of redemption of the Debt Securities to be redeemed and ending at the
close of business on (A) if such Debt Securities are issuable only as
registered securities, the day of the mailing of the relevant notice of
redemption and (B) if such Debt Securities are issuable as bearer securities,
the day of the first publication of the relevant notice of redemption or, if
such Debt Securities are also issuable as registered securities and there is no
publication, the mailing of the relevant notice of redemption, or (ii) to
register the transfer of or exchange any registered security so selected for
redemption in whole or in part, except, in the case of any registered security
to be redeemed in part, the portion thereof not to be redeemed, or (iii) to
exchange any bearer security so selected for redemption except that such a
bearer security may be exchanged for a registered security of that series and
like tenor, provided that such registered security shall be simultaneously
surrendered for redemption, or (iv) to issue, register the transfer of or
exchange any Security which has been surrendered for repayment at the option of
the holder, except the portion, if any, of such Debt Security not to be so
repaid.
MERGER, CONSOLIDATION OR SALE
Any of the Trust and the Corporation may consolidate with, or sell,
lease or convey all or substantially all of its assets to, or merge with or
into, any other entity, provided that (a) either the Trust or the Corporation,
as the case may be, shall be the continuing entity, or the successor entity (if
other than the Trust or the Corporation, as the case may be) formed by or
resulting from any such consolidation or merger or which shall have received
the transfer of such assets shall expressly assume payment of the principal of
(and premium, if any) and interest on all the Debt Securities and the due and
punctual performance and observance of all of the covenants and conditions
contained in the applicable indenture (b) immediately after giving effect to
such transaction and treating any indebtedness which becomes an obligation of
the Trust, the Corporation or any subsidiary as a result thereof as having been
incurred by the Trust, the Corporation or such subsidiary at the time of such
transaction, no event of default under the indentures, and no event which,
after notice or the lapse of time, or both, would become such an event of
default, shall have occurred and be continuing; and (c) an officer's
certificate and legal opinion covering such conditions shall be delivered to
the Trustee.
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CERTAIN COVENANTS
Existence. Except as permitted under "--Merger, Consolidation or
Sale," each of the Trust and the Corporation will be required to do or cause to
be done all things necessary to preserve and keep in full force and effect its
existence, rights and franchises; provided, however, that each of the Trust and
the Corporation shall not be required to preserve any right or franchise if it
determines that the preservation thereof is no longer desirable in the conduct
of its business.
Maintenance of Properties. Each of the Trust and the Corporation will
be required to cause all of its material properties used or useful in the
conduct of its business or the business of any subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all
necessary equipment and to cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Trust or the Corporation, as the case may be, may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times.
Insurance. Each of the Trust and the Corporation will be required to,
and will be required to cause each of its subsidiaries to, keep all of its
insurable properties insured against lose or damage at least equal to their
then full insurable value with insurers of recognized responsibility and, if
described in the applicable Prospectus Supplement, having a specified rating
from a recognized insurance rating service.
Payment of Taxes and Other Claims. Each of the Trust and the
Corporation, as the case may be, will be required to pay or discharge or cause
to be paid or discharged before the same shall become delinquent, (i) all
taxes, assessments and governmental charges levied or imposed upon it or any
subsidiary or upon its income, profits or property or that of any subsidiary,
and (ii) all lawful claims for labor, materials and supplies which, if unpaid,
might by law become a lien upon the property of the Trust, the Corporation or
any subsidiary; provided, however, that the Trust and the Corporation, as the
case may be, shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith.
Provision of Financial Information. Whether or not the Trust or the
Corporation, as the case may be, is subject to Section 13 or 15(d) of the
Exchange Act, the Trust or the Corporation, as the case may be, will, be
required within 15 days of each of the respective dates by which the Company
would have been required to file annual reports, quarterly reports and other
documents with the Commission if the Company were so subject to (i) transmit by
mail to all Holders of its Debt Securities, as their names and addresses appear
in the security register for such Debt Securities, without cost to such
Holders, copies of the annual reports and quarterly reports which the Trust or
the Corporation, as the case may be, would have been required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act if the Trust or
the Corporation, as the case may be, were subject to such Sections and (ii)
file with any Trustee copies of the annual reports, quarterly reports and other
documents which the Trust or the Corporation, as the case may be, would have
been required to file with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act if the Trust or the Corporation, as the case may be, were
subject to such Sections and (iii) promptly upon written request and payment of
the reasonable cost of duplication and delivery, supply copies of such
documents to any prospective holder.
Additional Covenants. Any additional or different covenants of the
Trust or the Corporation with respect to any series of Debt Securities will be
set forth in the Prospectus Supplement relating thereto.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Each Indenture will provide that the following events are "Events of
Default" with respect to any series of Debt Securities issued thereunder: (a)
default for 30 days in the payment of any installment of
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interest on any Debt Security of such series; (b) default in the payment of the
principal of (or premium, if any, on) any Debt Security of such series at its
maturity; (c) default in making any sinking fund payment as required for any
Debt Security of such series; (d) default in the performance of any other
covenant of the Trust or the Corporation contained in the applicable Indenture
(other than a covenant added to such Indenture solely for the benefit of a
series of Debt Securities issued thereunder other than such series), such
default having continued for 60 days after written notice as provided in such
Indenture; (e) default in the payment of an aggregate principal amount
exceeding a specified amount of any evidence of indebtedness of the Trust or
the Corporation, as the case may be, or any mortgage, indenture or other
instrument under which such indebtedness is issued or by which such
indebtedness is secured, such default having occurred after the expiration of
any applicable grace period and having resulted in the acceleration of the
maturity of such indebtedness, but only if such indebtedness is not discharged
or such acceleration is not rescinded or annulled; (f) certain events of
bankruptcy, insolvency or reorganization, or court appointment of a receiver,
liquidator or trustee of the Trust or the Corporation, as the case may be, or
any Significant Subsidiary or any of their respective property; and (g) any
other event of default provided with respect to a particular series of Debt
Securities. The term "Significant Subsidiary" means each significant
subsidiary (as defined in Regulation S-X promulgated under the Securities Act)
of the Trust or the Corporation, as the case may be.
If an event of default under any Indenture with respect to Debt
Securities of any series at the time outstanding occurs and is continuing, then
in every such case the applicable Trustee or the holders of not less than 25%
in principal amount of the outstanding Debt Securities of that series may
declare the principal amount (or, if the Debt Securities of that series are
Original Issue Discount Securities or indexed securities, such portion of the
principal amount as may be specified in the terms thereof) of all of the Debt
Securities of that series to be due and payable immediately by written notice
thereof to the Trust or the Corporation, as the case may be (and to the
applicable Trustee if given by the holders). However, at any time after such a
declaration of acceleration with respect to Debt Securities of such series (or
of all Debt Securities then outstanding under any Indenture, as the case may
be) has been made, but before a judgment or decree for payment of the money due
has been obtained by the applicable Trustee, the holders of not less than a
majority in principal amount of outstanding Debt Securities of such series (or
of all Debt Securities then outstanding under the applicable Indenture, as the
case may be) may rescind and annul such declaration and its consequences if (a)
the Trust or the Corporation, as the case may be, shall have deposited with the
applicable Trustee all required payments of the principal of (and premium, if
any) and interest on the Debt Securities of such series (or of all Debt
Securities then outstanding under any Indenture, as the case may be), plus
certain fees, expenses, disbursements and advances of the applicable Trustee
and (b) all events of default, other than the non-payment of accelerated
principal of (or specified portion thereof), with respect to Debt Securities of
such series (or of all Debt Securities then outstanding under the applicable
Indenture, as the case may be) have been cured or waived as provided in the
Indenture. Any Indenture will also provide that the holders of not less than a
majority in principal amount of the outstanding Debt Securities of any series
(or of all Debt Securities then outstanding under the applicable Indenture, as
the case may be) may waive any past default with respect to such series and its
consequences, except a default (x) in the payment of the principal of (or
premium, if any) or interest on any Debt Security or such series or (y) in
respect of a covenant or provision contained in the applicable Indenture that
cannot be modified or amended without the consent of the holder of each
outstanding Debt Security affected thereby.
Each Trustee will be required to give notice to the holders of Debt
Securities within 90 days of a default under the applicable Indenture unless
such default has been cured or waived; provided, however, that such Trustee may
withhold notice to the holders of any series of Debt Securities of any default
with respect to such series (except a default in the payment of the principal
of (or premium, if any) or interest an any Debt Security of such series or in
the payment of any sinking fund installment in respect of any Debt Security of
such series) if specified responsible officers of such Trustee consider such
withholding to be in the interest of such holders.
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Each Indenture will provide that no holders of Debt Securities of any
series may institute any proceedings, judicial or otherwise, with respect to
the applicable Indenture or for any remedy thereunder, except in the ease of
failure of the applicable Trustee, for 60 days, to act after it has received a
written request to institute proceedings in respect of an event of default from
the holders of not less than 25% in principal amount of the outstanding Debt
Securities of such series, as well as an offer of indemnity reasonably
satisfactory to it. This provision will not prevent, however, any holder of
Debt Securities from instituting suit for the enforcement of payment of the
principal of (and premium, if any) and interest on such Debt Securities at the
respective due dates thereof.
Subject to provisions in each Indenture relating to its duties in case
of default, no Trustee will be under any obligation to exercise any of its
rights or powers under an Indenture at the request or direction of any holders
of any series of Debt Securities then outstanding under such Indenture, unless
such holders shall have offered to the Trustee thereunder reasonable security
or indemnity. The holders of not less than a majority in principal amount of
the outstanding Debt Securities of any series (or of all Debt Securities then
outstanding under an Indenture, as the case may be) shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the applicable Trustee, or of exercising any trust or power
conferred upon such Trustee. However, a Trustee may refuse to follow any
direction which is in conflict with any law or the applicable Indenture, which
may involve such Trustee in personal liability or which may be unduly
prejudicial to the holders of Debt Securities of such series not joining
therein.
Within 120 days after the close of each fiscal year, the Trust or the
Corporation, as the case may be, will be required to deliver to each Trustee a
certificate, signed by one of several specified officers of the Company,
stating whether or not such officer has knowledge of any default under the
applicable Indenture and, if so, specifying each such default and the nature
and status thereof.
MODIFICATION OF THE INDENTURES
Modifications and amendments of an Indenture will be permitted to be
made only with the consent of the holders of not less than a majority in
principal amount of all outstanding Debt Securities or series of outstanding
Debt Securities which are affected by such modification or amendment, provided,
however, that no such modification or amendment may, without the consent of the
holder of each such Debt Security affected thereby. (a) change the stated
maturity of the principal of, or premium (if any) or any installment of
interest on, any such Debt Security; (b) reduce the principal amount of, or the
rate or amount of interest on, or any premium payable on redemption of, any
such Debt Security, or reduce the amount of principal of an Original Issue
Discount Security that would be due and payable upon declaration of
acceleration of the maturity thereof or would be provable in bankruptcy, or
adversely affect any right of repayment of the holder of any such Debt
Security; (c) change the place of payment, or the coin or currency, for payment
of principal of, premium, if any, or interest on any such Debt Security; (d)
impair the right to institute suit for the enforcement of any payment on or
with respect to any such Debt Security; (e) reduce the above-stated percentage
of outstanding Debt Securities of any series necessary to modify or amend the
applicable Indenture, to waive compliance with certain provisions thereof or
certain defaults and consequences thereunder or to reduce the quorum or voting
requirements set forth in such Indenture; or (f) modify any of the foregoing
provisions or any of the provisions relating to the waiver of certain past
defaults or certain covenants, except to increase the required percentage to
effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the holder of such Debt Security.
The holders of not less than a majority in principal amount of a
series of outstanding Debt Securities have the right to waive compliance by the
Trust or the Corporation, as the case may be, with certain covenants relating
to such series of Debt Securities in the Indenture.
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Modifications and amendments of an Indenture will be permitted to be
made by the Trust or the Corporation, as the case may be, and the respective
Trustee thereunder without the consent of any holder of Debt Securities for any
of the following purposes: (i) to evidence the succession of another person to
the Trust, or the Corporation, as the case may be, as obligor under such
Indenture; (ii) to add to the covenants of the Trust or the Corporation, as the
case may be, for the benefit of the holders of all or any series of Debt
Securities or to surrender any right or power conferred upon the Trust or the
Corporation, as the case may be, in such Indenture; (iii) to add events of
default for the benefit of the holders of all or any series of Securities; (iv)
to add or change any provisions of an Indenture to facilitate the issuance of,
or to liberalize certain terms of, Debt Securities in bearer form, or to permit
or facilitate the issuance of Debt Securities in uncertificated form, provided
that such action shall not adversely affect the interests of the holders of the
Debt Securities of any series in any material respect; (v) to change or
eliminate any provisions of an Indenture, provided that any such change or
elimination shall become effective only when there are no Debt Securities
outstanding of any series created prior thereto which are entitled to the
benefit of such provision; (vi) to secure the Debt Securities; (vii) to
establish the form or terms of Debt Securities of any series, including the
provisions and procedures, if applicable, for the conversion of such Debt
Securities into Paired Common Shares or Preferred Shares of the Company; (viii)
to provide for the acceptance of appointment by a successor Trustee or
facilitate the administration of the trusts under the Indenture by more than
one Trustee; (ix) to cure any ambiguity, defect or inconsistency in an
Indenture, provided that such action shall not adversely affect the interests
of holders of Debt Securities of any series in any material respect; or (x) to
supplement any of the provisions of an Indenture to the extent necessary to
permit or facilitate defeasance and discharge of any series of such Debt
Securities, provided that such action shall not adversely affect the interests
of the holders of the Debt Securities of any series in any material respect.
Each Indenture will provide that in determining whether the holders of
the requisite principal amount of outstanding Debt Securities of a series have
given any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity thereof, (ii) the principal amount
of a Debt Security denominated in a foreign currency that shall be deemed
outstanding shall be the United States dollar equivalent, determined on the
issue date for such Debt Security, of the principal amount (or, in the case of
an Original Issue Discount Security, the United States dollar equivalent on the
issue date of such Debt Security of the amount determined as provided in (i)
above), (iii) the principal amount of an indexed security that shall be deemed
outstanding shall be the principal face amount of such indexed security at
original issuance, unless otherwise provided with respect to such indexed
security pursuant to such indenture, and (iv) Debt Securities owned by the
Trust, the Corporation or any other obligor upon the Debt Securities or any
affiliate of the Trust, the Corporation or of such other obligor shall be
disregarded.
Each Indenture will contain provisions for convening meetings of the
holders of Debt Securities of a series. A meeting will be permitted to be
called at any time by the Trustee, and also, upon request, by the Trust, the
Corporation, or other obligor of such Debt Securities or the holders of at
least 10% in principal amount of the outstanding Debt Securities of such
series, in any such case upon notice given as provided in such Indenture.
Except for any consent that must be given by the holder of each Debt Security
affected by certain modifications and amendments of an Indenture, any
resolution presented at a meeting or adjourned meeting duly reconvened at which
a quorum is present will be permitted to be adopted by the affirmative vote of
the holders of a majority in principal amount of the outstanding Debt
Securities of that series; provided, however, that, except as referred to
above, any resolution with respect to any request, demand, authorization,
direction, notice, consent, waiver or other action that may be made, given or
taken by the holders of a specified percentage, which is less than a majority,
in principal amount of the outstanding Debt Securities of a series may be
adopted at a meeting or adjourned meeting duly reconvened at which a quorum is
present by the affirmative vote of the holders of such specified percentage in
principal amount of the outstanding Debt
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Securities of that series. Any resolution passed or decision taken at any
meeting of holders of Debt Securities of any series duly held in accordance
with an Indenture will be binding on all holders of Debt Securities of that
series. The quorum at any meeting called to adopt a resolution, and at any
reconvened meeting, will be persons holding or representing a majority in
principal amount of the outstanding Debt Securities of a series; provided,
however, that if any action is to be taken at such meeting with respect to a
consent or waiver which may be given by the holders of not less than a
specified percentage in principal amount of the outstanding Debt Securities of
a series, the persons holding or representing such specified percentage in
principal amount of the outstanding Debt Securities of such series, will
constitute a quorum.
Notwithstanding the foregoing provisions, any Indenture will provide
that if any action is to be taken at a meeting of holders of Debt Securities of
any series with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that such Indenture expressly provides
may be made, given or taken by the holders of a specified percentage in
principal amount of all outstanding Debt Securities affected thereby, or of the
holders of such series and one or more additional series: (i) there shall be no
minimum quorum requirement for such meeting and (ii) the principal amount of
the outstanding Debt Securities of such series that vote in favor of such
request, demand, authorization, direction, notice, consent, waiver or other
action shall be taken into account in determining whether such request, demand,
authorization, direction, notice, consent, waiver or other action has been
made, given or taken under such Indenture.
SUBORDINATION
Upon any distribution to creditors of the Trust or the Corporation, as
the case may be, in a liquidation, dissolution or reorganization, the payment
of the principal of and interest on any Subordinated Securities will be
subordinated to the extent provided in the applicable Indenture in right of
payment to the prior payment in full of all Senior Debt (as defined below), but
the obligation of the Trust or the Corporation, as the case may be, to make
payment of the principal and interest on such Subordinated Securities will not
otherwise be affected. No payment of principal or interest will be permitted
to be made on Subordinated Securities at any time if a default on Senior Debt
exists that permits the holders of such Senior Debt to accelerate its maturity
and the default is the subject of judicial proceedings or the Trust or the
Corporation, as the case may be, receives notice of the default. By reason of
such subordination, in the event of a distribution of assets upon insolvency,
certain general creditors of the Trust or the Corporation, as the case may be,
may recover more, ratably, than holders of Subordinated Securities.
Unless otherwise specified in the applicable Prospectus Supplement,
Senior Debt will be defined in the applicable Indenture as the principal of and
interest on, or substantially similar payments to be made by the Trust or the
Corporation, as the case may be, in respect of, the following, whether
outstanding at the date of execution of the applicable indenture or thereafter
incurred, created or assumed: (a) indebtedness of the Trust or the Corporation,
as the case may be, for money borrowed or represented by purchase-money
obligations, (b) indebtedness of the Trust or the Corporation, as the case may
be, evidenced by notes, debentures, or bonds, or other securities issued under
the provisions of an indenture, fiscal agency agreement or other agreement, (c)
obligations of the Trust or the Corporation, as the case may be, as lessee
under leases of property either made as part of any sale and leaseback
transaction to which the Trust or the Corporation, as the case may be, is a
party or otherwise, (d) indebtedness of partnerships and joint ventures which
is included in the consolidated financial statements of the Trust or the
Corporation, as the case may be, (e) indebtedness, obligations and liabilities
of others in respect of which the Trust or the Corporation, as the case may be,
is liable contingently or otherwise to pay or advance money or property or as
guarantor, endorser or otherwise or which the Trust or the Corporation, as the
case may be, has agreed to purchase or otherwise acquire, and (f) any binding
commitment of the Trust or the Corporation, as the case may be, to fund any
real estate investment or to fund any investment in any entity making such real
estate investment, in each case other than (1) any such indebtedness,
obligation or liability referred to in clauses (a) through (f) above as to
which, In the instrument creating or evidencing the same pursuant to which the
same is outstanding, it is
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provided that such indebtedness, obligation or liability is not superior in
right of payment to the subordinated Securities or ranks pari passu with the
Subordinated Securities, (2) any such indebtedness, obligation or liability
which is subordinated to indebtedness of the Trust or the Corporation, as the
case may be, to substantially the same extent as or to a greater extent than
the Subordinated Securities are subordinated, and (3) the Subordinated
Securities. There will not be any restrictions in an Indenture relating to
Subordinated Securities upon the creation of additional Senior Debt.
If this Prospectus is being delivered in connection with a series of
Subordinated Securities, the accompanying Prospectus Supplement or the
information incorporated herein by reference will set forth the approximate
amount of Senior Debt outstanding as of the end of the most recent fiscal
quarter of the Trust or Corporation, as the case may be.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Trust or the Corporation, as the case may be, may be permitted
under the applicable Indenture to discharge certain obligations to holders of
any series of Debt Securities that have not already been delivered to the
Trustee for cancellation and that either have become due and payable or will
become due and payable within one year (or scheduled for redemption within one
year) by irrevocably depositing with the Trustee, in trust, funds in such
currency or currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are payable in an amount sufficient to
pay the entire indebtedness on such Debt Securities in respect of principal
(and premium, if any) and interest to the date of such deposit (if such Debt
Securities have become due and payable) or to the stated maturity or redemption
date, as the case may be.
An Indenture may provide that, if certain provisions thereof are made
applicable to the Debt Securities of or within any series pursuant to such
Indenture, each of the Trust or the Corporation, as the case may be, may elect
either (a) to defease and be discharged from any and all obligations with
respect to such Debt Securities except for the obligation to pay additional
amounts, if any, upon the occurrence of certain events of tax, assessment or
governmental charge with respect to payments on such Debt Securities and the
obligations to register the transfer or exchange of such Debt Securities, to
replace temporary or mutilated, destroyed, lost or stolen Debt Securities, to
maintain an office or agency in respect of such Debt Securities and to hold
moneys for payment in trust) ("defeasance") or (b) to be released from its
obligations with respect to such Debt Securities under certain sections, of
such Indenture (including the restrictions described under "Certain Covenants")
and, if provided pursuant to such Indenture, its obligations with respect to
any other covenant, and any omission to comply with such obligations shall not
constitute a default or an event of default with respect to such Debt
Securities "covenant defeasance"), in either case upon the irrevocable deposit
by the Trust or the Corporation, as the case may be, with the Trustee, in
trust, of an amount, in such currency or currencies, currency unit or units or
composite currency or currencies in which such Debt Securities are payable at
stated maturity, or Government Obligations (as defined below), or both,
applicable to such Debt Securities which through the scheduled payment of
principal and interest in accordance with their terms will provide money in an
amount sufficient to pay the principal of (and premium, if any) and interest on
such Debt Securities, and any mandatory sinking fund or analogous payments
thereon, an the scheduled due dates therefor.
Such a trust will only be permitted to be established if, among other
things, the Trust or the Corporation, as the case may be, has delivered to the
Trustee an opinion of counsel (as specified in the applicable indenture) to the
effect that the holders of such Debt Securities will not recognize income, gain
or loss for United States federal income tax purposes as a result of such
defeasance or covenant defeasance and will be subject to United States federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance or covenant defeasance had not
occurred, and such opinion of counsel, in the case of defeasance, must refer to
and be based upon a ruling of the Internal Revenue
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Service or a change in applicable United States federal income tax law
occurring after the date of the applicable Indenture.
"Government Obligations" means securities which are (i) direct
obligations of the United States of America or the government which issued the
foreign currency in which the Debt Securities of a particular series are
payable, for the payment of which its full faith and credit is pledged or (ii)
obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which issued
the foreign currency in which the Debt Securities of such series are payable,
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government, which, in
either case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such Government Obligation or a
specific payment of interest on or principal of any such Government Obligation
held by such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the Government
Obligation or the specific payment of interest on or principal of the
Government Obligation evidenced by such depository receipt.
Unless otherwise provided in the applicable Prospectus Supplement, if
after the Trust or the Corporation, as the case may be, has deposited funds
and/or Government Obligations to effect defeasance or covenant defeasance with
respect to Debt Securities of any series, (a) the holder of a Debt Security of
such series is entitled to, and does elect pursuant to the applicable Indenture
or the terms of such Debt Security to receive payment in a currency, currency
unit or composite currency other than that in which such deposit has been made
in respect of such Debt Security, or (b) a Conversion Event (as defined below)
occurs in respect of the currency, currency unit or composite currency in which
such deposit has been made, the indebtedness represented by such Debt Security
shall be deemed to have been, and will be, fully discharged and satisfied
through the payment of the principal of (and premium, if any) and interest on
such Debt Security as they become due out of the proceeds yielded by converting
the amount so deposited in respect of such Debt Security into the currency,
currency unit or composite currency in which such Debt Security becomes payable
as a result of such election or such Conversion Event based on the applicable
market exchange rate. "Conversion Event" means the cessation of use of (i) a
currency, currency unit or composite currency both by the government of the
country which issued such currency and for the settlement of transactions by a
central bank or other public institution of or within the international banking
community, (ii) the ECU both within the European Monetary System and for the
settlement of transactions by public institutions of or within the European
Community or (iii) any currency unit or composite currency other than the ECU
for the purposes for which it was established. Unless otherwise provided in
the applicable Prospectus Supplement, all payments of principal of (and
premium, if any) and interest on any Debt Security that is payable in a foreign
currency that erases to be used by its government of issuance shall be made in
United States dollars.
In the event the Trust or the Corporation, as the case may be, effects
covenant defeasance with respect to any Debt Securities and such Debt
Securities are declared due and payable because of the occurrence of any event
of default other than the event of default described in clause (d) under
"Events of Default, Notice and Waiver" with respect to specified sections of
the Indenture (which sections would no longer be applicable to such Debt
Securities) or described in clause (g) under "Events of Default, Notice and
Waiver" with respect to any other covenant as to which there had been covenant
defeasance, the amount in such currency, currency unit or composite currency in
which Such Debt Securities are payable, and Government Obligations on deposit
with the applicable Trustee, will be sufficient to pay amounts due on such Debt
Securities at the time of their stated maturity but may not be sufficient to
pay amounts due on such Debt Securities at the time of the acceleration
resulting from such event of default. However, the Trust or the Corporation,
as the case may be, would remain liable to make payment of such amounts due at
the time of acceleration.
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The applicable Prospectus Supplement may further describe the
provisions, if any, permitting such defeasance or covenant defeasance,
including any modifications to the provisions described above, with respect to
the Debt Securities of or within a particular series.
CONVERSION RIGHTS
The terms and conditions, if any, upon which any series of Debt
Securities is convertible into Paired Common Shares or Preferred Shares will be
set forth in the applicable Prospectus Supplement relating thereto. Such terms
will include whether such Debt Securities are convertible into Paired Common
Shares or Preferred Shares, the conversion price (or manner of calculation
thereof), the conversion period, provisions as to whether conversion will be at
the option of the holders or the Trust or the Corporation, as the case may be,
the events requiring an adjustment of the conversion price and provisions
affecting conversion in the event of the redemption of such series of Debt
Securities and any restrictions on conversion, including restrictions directed
at maintaining the Trust's REIT status.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in
the form of one or more global securities (the "Global Securities") that will
be deposited with, or on behalf of, a depositary ("the "Depositary") identified
in the applicable Prospectus Supplement relating to such series. Global
Securities may be issued in either registered or bearer form and in either
temporary or permanent form. The specific terms of the depositary arrangement
with respect to a series of Debt Securities will be described in the applicable
Prospectus Supplement relating to such series.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The Declaration of Trust authorizes the Trust to issue 135 million
shares of beneficial interests in the Trust, including (i) 100 million Trust
Shares, with a par value of $0.01 per share, (ii) 20 million excess trust
shares, with a par value of $0.01 per share ("Excess Common Trust Shares") and
(iii) 5 million excess Preferred Shares, with a par value of $0.01 per share
("Excess Preferred Trust Shares" and, together with the Excess Common Trust
Shares, the "Excess Trust Shares"). The Declaration of Trust grants the Board
of Trustees the power to create and authorize the issuance of up to 110 million
shares (less any Trust Shares) of preferred shares ("Trust Preferred Shares")
in one or more classes or series, having such voting rights, such rights to
dividends and distribution and rights in liquidation, such conversion, exchange
and redemption rights and such designations, preferences and participations and
other limitations and restrictions as are not prohibited by the Declaration of
Trust or applicable law and as are specified by the Board of Trustees in its
discretion. As of September 30, 1995, the Board of Trustees had not created or
authorized any class or series of Trust Preferred Shares and no Excess Trust
Shares were outstanding.
The Articles of Incorporation authorize the Corporation to issue 135
million shares, consisting of (i) 10 million shares of preferred stock, with a
par value of $0.01 per share ("Corporation Preferred Shares"), (ii) 100 million
Corporation Shares, (iii) 20 million shares of excess common stock, with a par
value of $0.01 per share ("Excess Corporation Common Stock"), and (iv) 5
million shares of excess preferred stock, with a par value of $0.01 per share
("Excess Corporation Preferred Stock" and, together with the Excess Corporation
Common Stock, the "Excess Corporation Stock"). The Corporation Preferred
Shares are issuable in classes or series with such rights, preferences,
privileges and restrictions as the Board of Directors may determine, including
voting rights, redemption provisions, dividend rates, liquidation preferences
and conversion rights. As of September 30, 1995, no such class or series of
Corporation Preferred Shares had been established and no Excess Corporation
Stock was outstanding.
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As of September 30, 1995 there were 13,809,658 Paired Common Shares
outstanding. Each outstanding Paired Common Share entitles the holder to one
vote on all matters presented to shareholders for a vote. The Trust and the
Corporation have reserved for issuance 5,943,578 Paired Common Shares upon
exchange of Units currently held by Starwood Capital.
PREEMPTIVE RIGHTS
Holders of Trust Shares and Corporation Shares do not have preemptive
rights with respect to the issuance of additional shares. Accordingly, any
issuance of authorized but unissued shares could have the effect of diluting
the earnings per share and book value per share of currently outstanding
shares.
DESCRIPTION OF PREFERRED SHARES
The following description of the Preferred Shares sets forth certain
general terms and provisions of the Preferred Shares to which any Prospectus
Supplement may relate. The statements below describing the Preferred Shares
are in all respects subject to and qualified in their entirety by reference to
the applicable provisions of the Declaration of Trust and the Articles of
Incorporation and any applicable amendment to the Declaration of Trust or the
Articles of Incorporation designating terms of a series of Preferred Shares (a
"Designating Amendment").
The Trust may authorize and issue Trust Preferred Shares without the
issuance by the Corporation of corresponding shares, and the Corporation may
authorize and issue Corporation Preferred Shares without the issuance by the
Trust of corresponding shares. Furthermore, the Pairing Agreement does not
limit the power of the Boards of the Trust and the Corporation to independently
determine the rights, preferences and restrictions of such shares. However, if
either the Trust or the Corporation were to issue Preferred Shares for which
the other entity did not issue corresponding (i.e., paired) shares in such an
amount that greater than 50% of such entity's beneficial equity interests were
represented by such unpaired Preferred Shares, then the Trust and the
Corporation could lose their status as "grandfathered" from the application of
Section 269B of the Code and jeopardize the Trust's ability to qualify as a
REIT. Neither the Trust nor the Corporation intends to issue unpaired
Preferred Shares in excess of such limitation.
TERMS
Subject to the limitations prescribed by the Declaration of Trust and
the Articles of Incorporation, respectively, each of the Board of Trustees and
the Board of Directors is authorized to fix the number of shares constituting
each series of Preferred Shares and the designations and powers, preferences
and relative, participating, optional or other special rights and
qualifications, limitations or restrictions thereof, including such provisions
as may be desired concerning voting, redemption, dividends, dissolution or the
distribution of assets, conversion or exchange, and such other subjects or
matters as may be fixed by resolution of the Board of Trustees and the Board of
Directors. The Preferred Shares will, when issued, be fully paid and
nonassessable by the Trust or the Corporation, as the case may be, (except as
described under "--Shareholder Liability" below) and will have no preemptive
rights.
Reference is made to the Prospectus Supplement relating to the
Preferred Shares offered thereby for specific terms, including:
(1) The title and stated value of such Preferred Shares and
whether such Preferred Shares are paired;
(2) The number of shares of such Preferred Shares offered, the
liquidation preference per share and the offering price of
such Preferred Shares;
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(3) The dividend rate(s), periodic) and/or payment date(s) or
method(s) of calculation thereof applicable to such Preferred
Shares;
(4) The date from which dividends on such Preferred Shares shall
accumulate, if applicable;
(5) The procedures for any auction and remarketing, if any, for
such Preferred Shares;
(6) The provision for a sinking fund, if any, for such Preferred
Shares;
(7) The provision for redemption, if applicable, of such Preferred
Shares;
(8) Any listing of such Preferred Shares on any securities
exchange.
(9) The terms and conditions, if applicable, upon which such
Preferred Shares will be convertible into Paired Common
Shares, including the conversion price (or manner of
calculation thereof);
(10) Whether interests in such Preferred Shares will be represented
by Depositary Shares;
(11) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Shares;
(12) A discussion of federal income tax considerations applicable
to such Preferred Shares;
(13) The relative ranking and preferences of such Preferred Shares
as to dividend rights and rights upon liquidation, dissolution
or winding up of the affairs of the Trust or the Corporation,
respectively;
(14) Any limitations on issuance of any series of Preferred Shares
ranking senior to or on a parity with such series of Preferred
Shares as to dividend rights and rights upon liquidation,
dissolution or winding up of the affairs of the Trust or the
Corporation, respectively; and
(15) Any limitations on direct or beneficial ownership and
restrictions on transfer, in each case as may be appropriate
to preserve the status of the Trust as a REIT.
RANK
Unless otherwise specified in the Prospectus Supplement, the Preferred
Shares will, with respect to dividend rights and rights upon liquidation,
dissolution or winding up of the Trust or the Corporation, respectively, rank
(i) senior to all classes or series of Paired Common Shares, and to all equity
securities ranking junior to such Preferred Shares; (ii) on a parity with all
equity securities issued by the Trust or the Corporation, respectively, the
terms of which specifically provide that such equity securities rank on a
parity with the Preferred Shares; and (iii) junior to all equity securities
issued by the Trust or the Corporation, respectively, the terms of which
specifically provide that such equity securities rank senior to the Preferred
Shares. The term "equity securities" does not include convertible debt
securities.
DIVIDENDS
Holders of the Preferred Shares of each series will be entitled to
receive, when, as and if declared by the Board of Trustees or the Board of
Directors, as the case may be, out of the respective assets of the Trust and
the Corporation legally available for payment, cash dividends at such rates and
on such dates as will
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be set forth in the applicable Prospectus Supplement. Each such dividend shall
be payable to holders of record us they appear on the share transfer books of
the Trust or the Corporation, as the case may be, on such record dates as shall
be fixed by the Board of Trustees or the Board of Directors.
Dividends on any series of the Preferred Shares may be cumulative or
noncumulative, as provided in the applicable Prospectus Supplement. Dividends,
if cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement, if the Board of Trustees or the Board of
Directors fails to declare a dividend payable on a dividend payment date on any
series of the Preferred Shares for which dividends are non-cumulative, then the
holders of such series of the Preferred Shares will have no right to receive a
dividend in respect of the dividend period ending on such dividend payment
date, and the Trust or the Corporation, as the case may be, will have no
obligation to pay the dividend accrued for such period, whether or not
dividends on such series are declared payable on any future dividend payment
date.
If Preferred Shares of any series are outstanding, no dividends will
be declared or paid or set apart for payment on any capital stock of the Trust
or the Corporation, as the case may be, of any other series ranking, as to
dividends, on a parity with or junior to the Preferred Shares of such series
for any period unless (i) if such series of Preferred Shares has a cumulative
dividend, full cumulative dividends have been or contemporaneously are declared
and paid or declared and a sum sufficient for the payment thereof set apart for
such payment on the Preferred Shares of such series for all past dividend
periods and the then current dividend period or (ii) if such series of
Preferred Shares does not have a cumulative dividend, full dividends for the
then current dividend period have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
such payment on the Preferred Shares of such series. When dividends are not
paid in full (or a sum sufficient for such full payment is not so set apart)
upon Preferred Shares of any series and the shares of any other series of
Preferred Shares ranking on a parity as to dividends with the Preferred Shares
of such series, all dividends declared upon Preferred Shares of such series and
any other series of Preferred Shares ranking on a parity as to dividends with
such Preferred Shares shall be declared pro rata so that the amount of
dividends declared per share of Preferred Shares of such series and such other
series of Preferred Shares shall in all cases bear to each other the same ratio
that accrued dividends per share on the Preferred Shares of such series (which
shall not include any accumulation in respect of unpaid dividends for prior
dividend periods if such Preferred Shares does not have a cumulative dividend)
and such other series of Preferred Shares bear to each other. No interest, or
sum of money in lieu of interest, shall be payable in respect of any dividend
payment or payments on Preferred Shares of such series which may be in arrears.
Except as provided in the immediately preceding paragraph, unless (i)
if such series of Preferred Shares has a cumulative dividend, full cumulative
dividends on the Preferred Shares of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
set apart for payment for all past dividend periods and the then current
dividend period, and (ii) if such series of Preferred Shares does not have a
cumulative dividend, full dividends on the Preferred Shares of such series have
been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for payment for the then current
dividend period, no dividends (other than in shares of Paired Common Shares or
other capital shares ranking junior to the Preferred Shares of such series as
to dividends and upon liquidation) shall be declared or paid or set aside for
payment or other distribution shall be declared or made upon the Paired Common
Shares, or any other capital shares of the Trust or the Corporation, as the
case may be, ranking junior to or on a parity with the Preferred Shares of such
series as to dividends or upon liquidation, nor shall any shares of Paired
Common Shares, or any other capital shares of the Trust or the Corporation, as
the case may be, ranking junior to or an a parity with the Preferred Shares of
such series as to dividends or upon liquidation be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any such shares) by the
Trust or the Corporation, as the case may be, except by conversion into or
exchange for other capital shares of the
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Trust or the Corporation, as the case may be, ranking junior to the Preferred
Shares of such series as to dividends and upon liquidation).
REDEMPTION
If so provided in the applicable Prospectus Supplement, the Preferred
Shares will be subject to mandatory redemption or redemption at the option of
the Trust or the Corporation, as the case may be, as a whole or in part, in
each case upon the terms, at the times and at the redemption prices set forth
in such Prospectus Supplement.
The Prospectus Supplement relating to a series of Preferred Shares
that is subject to mandatory redemption will specify the number of shares of
such Preferred Shares that shall be redeemed by the Trust or the Corporation,
as the case may be, in each year commencing after a date to be specified, at a
redemption price per share to be specified, together with an amount equal to
all accrued and unpaid dividends thereon (which shall not, if such Preferred
Shares does not have a cumulative dividend, include any accumulation in respect
of unpaid dividends for prior dividend periods) to the date of redemption. The
redemption price may be payable in cash or other property, as specified in the
applicable Prospectus Supplement. If the redemption price for Preferred Shares
of any series is payable only from the net proceeds of the issuance of capital
shares of the Trust or the Corporation, as the case may be, the terms of such
Preferred Shares may provide that, if no such capital shares shall have been
issued or to the extent the net proceeds from any issuance are insufficient to
pay in full the aggregate redemption price then due, such Preferred Shares
shall automatically and mandatorily be converted into the applicable capital
shares of the Trust or the Corporation, as the case may be, pursuant to
conversion provisions specified in the applicable Prospectus Supplement.
Notwithstanding the foregoing, unless (i) if such series of Preferred
Shares has a cumulative dividend, full cumulative dividends on all shares of
any series of Preferred Shares shall have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for payment for all past dividend periods and the then current dividend
period, and (ii) if such series of Preferred Shares does not have a cumulative
dividend, full dividends of the Preferred Shares of any series have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for payment for the then current dividend period,
no shares of any series of Preferred Shares shall be redeemed unless all
outstanding Preferred Shares of such series is simultaneously redeemed;
provided, however, that the foregoing shall not prevent the purchase or
acquisition of Preferred Shares of such series to preserve the REIT status of
the Trust or pursuant to a purchase or exchange offer made on the same terms to
holders of all outstanding Preferred Shares of such series. In addition,
unless (i) if such series of Preferred Shares has a cumulative dividend, full
cumulative dividends on all outstanding shares of any series of Preferred
Shares have been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for payment for all past
dividends periods and the then current dividend period, and (ii) if such series
of Preferred Shares does not have a cumulative dividend, full dividends on the
Preferred Shares of any series have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
payment for the then current dividend period, the Trust or the Corporation, as
the case may be, shall not purchase or otherwise acquire directly or indirectly
any shares of Preferred Shares of such series (except by conversion into or
exchange for capital shares of the Trust or the Corporation, as the case may
be, ranking junior to the Preferred Shares of such series as to dividends and
upon liquidation); provided, however, that the foregoing shall not prevent the
purchase or acquisition of Preferred Shares of such series to preserve the REIT
status of the Trust or pursuant to a purchase or exchange offer made on the
same terms to holders of all outstanding Preferred Shares of such series.
If fewer than all of the outstanding shares of Preferred Shares of any
series are to be redeemed, the number of shares to be redeemed will be
determined by the Trust or the Corporation, as the case may be, and such shares
may be redeemed pro rata from the holders of record of such shares in
proportion to the number
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of such shares held or for which redemption is requested by such holder (with
adjustments to avoid redemption of fractional shares) or by lot in a manner
determined by the Trust or the Corporation, as the case may be.
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of record of Preferred Shares
of any series to be redeemed at the address shown on the share transfer books
of the Trust or the Corporation, as the case may be. Each notice shall state:
(i) the redemption date, (ii) the number of shares and series of the Preferred
Shares to be redeemed; (iii) the redemption price; (iv) the place or places
where certificates for such Preferred Shares are to be surrendered for payment
of the redemption price; (v) that dividends on the shares to be redeemed will
cease to accrue on such redemption date; and (vi) the date upon which the
holder's conversion rights, if any, as to such shares shall terminate, if fewer
than all the shares of Preferred Shares of any series are to be redeemed, the
notice mailed to each such holder thereof shall also specify the number of
shares of Preferred Shares to be redeemed from each such holder. If notice of
redemption of any Preferred Shares has been given and if the funds necessary
for such redemption have been set aside by the Trust or the Corporation, as the
case may be, in trust for the benefit of the holders of any Preferred Shares so
called for redemption, then from and after the redemption date dividends will
cease to accrue on such Preferred Shares, and all rights of the holders of such
shares will terminate, except the right to receive the redemption price.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Trust or the Corporation, as the case may be, then,
before any distribution or payment shall be made to the holders of any Paired
Common Shares or any other class or series of capital shares of the Trust or
the Corporation, as the case may be, ranking junior to the Preferred Shares in
the distribution of assets upon any liquidation, dissolution or winding up of
the Trust or the Corporation, as the case may be, the holders of each series of
Preferred Shares shall be entitled to receive out of assets of the Trust or the
Corporation, as the case may be, legally available for distribution to
shareholders liquidating distributions in the amount of the liquidation
preference per share (set forth in the applicable Prospectus Supplement), plus
an amount equal to all dividends accrued and unpaid thereon (which shall not
include any accumulation in respect of unpaid dividends for prior dividend
periods if such Preferred Shares does not have a cumulative dividend). After
payment of the full amount of the liquidating distributions to which they are
entitled, the holders of Preferred Shares will have no right or claim to any of
the remaining assets of the Trust or the Corporation, as the case may be. In
the event that, upon any such voluntary or involuntary liquidation, dissolution
or winding up, the available assets of the Trust or the Corporation, as the
case may be, are insufficient to pay the amount of the liquidating
distributions on all outstanding Preferred Shares and the corresponding amounts
payable on all shares of other classes or series of capital shares of the Trust
or the Corporation, as the case may be, ranking on a parity with the Preferred
Shares in the distribution of assets, then the holders of the Preferred Shares
and all other such classes or series of capital shares shall share ratably in
any such distribution of assets in proportion to the full liquidating
distributions to which they would otherwise be respectively entitled.
If liquidating distributions shall have been made in full to all
holders of Preferred Shares, the remaining assets of the Trust or the
Corporation, as the case may be, shall be distributed among the holders of any
other classes or series of capital shares ranking junior to the Preferred
Shares upon liquidation, dissolution or winding up, according to their
respective rights and preferences and in each case according to their
respective number of shares. For such purposes, the consolidation or merger of
the Trust or the Corporation, as the case may be, with or into any other
corporation, trust or entity, or the sale, lease or conveyance of all or
substantially all of the property or business of the Trust or the Corporation,
as the case may be, shall not be deemed to constitute a liquidation,
dissolution or winding up of the Trust or the Corporation, as the case may be.
VOTING RIGHTS
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Holders of the Preferred Shares will not have any voting rights,
except as set forth below or as otherwise from time to time required by law or
as indicated in the applicable Prospectus Supplement.
Whenever dividends on any shares of Preferred Shares shall be in
arrears for six or more consecutive quarterly periods, the holders of such
shares of Preferred Shares (voting separately as a class with all other series
of preferred stock upon which like voting rights have been conferred and are
exercisable) will be entitled to vote for the election of two additional
trustees or directors of the Trust or the Corporation, as the case may be, at a
special meeting called by the holders of record of at least ten percent (10%)
of any series of Preferred Shares so in arrears (unless such request is
received less than 90 days before the date fixed for the next annual or special
meeting of the shareholders) or at the next annual meeting of stockholders.
Directors so elected shall serve until the next annual meeting or until their
respective successors are elected and qualify, or if sooner until all dividends
in arrears have been fully paid or declared and a sum sufficient for the
payment thereof set aside for payment. In such case, the entire board of the
Trust or the Corporation, as the case may be, will be increased by two trustees
or directors.
Unless provided otherwise for any series of Preferred Shares, so long
as any shares of Preferred Shares remain outstanding, the Trust or the
Corporation, as the case may be, will not, without the affirmative vote or
consent of the holders of at least two-thirds of the shares of each series of
Preferred Shares outstanding at the time, given in person or by proxy, either
in writing or at a meeting (such series voting separately as a class), (i)
authorize or create, or increase the authorized or issued amount of any class
or series of capital stock ranking prior to such series of Preferred Shares
with respect to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding up or reclassify any authorized capital
stock of the Trust or the Corporation, as the case may be, into such shares,
or create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such shares; or (ii) amend, alter or
repeal the provisions of the Declaration of Trust or the Articles of
Incorporation or the Designating Amendment for such series of Preferred Shares,
whether by merger, consolidation or otherwise (an "Event"), so as to materially
and adversely affect any right, preference, privilege or voting power of such
series of Preferred Shares or the holders thereof; provided, however, with
respect to the occurrence of any of the Events set forth in (ii) above, so long
as the Preferred Shares remain outstanding with the terms thereof materially
unchanged, taking into account that upon the occurrence of an Event, the Trust
or the Corporation, as the case may be, may not be the surviving entity, the
occurrence of any such Event shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting power of holders of
Preferred Shares and provided further that (x) any increase in the amount of
the authorized Preferred Shares or the creation or issuance of any other series
of Preferred Shares, or (y) any increase in the amount of authorized shares of
such series or any other series of Preferred Shares, in each case ranking on a
parity with or junior to the Preferred Shares of such series with respect to
payment of dividends or the distribution of assets upon liquidation,
dissolution or winding up shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers.
The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of such series of Preferred Shares
shall have been redeemed or called for redemption and sufficient funds shall
have been deposited in trust to effect such redemption.
CONVERSION RIGHTS
The terms and conditions, if any, upon which any series of Preferred
Shares is convertible into Paired Common Shares will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include the
number of Paired Common Shares into which the shares of Preferred Shares are
convertible, the conversion price (or manner of calculation thereof), the
conversion period, provisions as to whether conversion will be at the option of
the holders or the Trust or the Corporation, as the case may be, the events
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requiring an adjustment of the conversion price and provisions affecting
conversion in the event of the redemption of such series of Preferred Shares
and any restrictions on conversion, including restrictions directed at
maintaining the Trust's REIT status.
OWNERSHIP LIMITS; RESTRICTIONS ON TRANSFER; REPURCHASE AND REDEMPTION OF SHARES
As discussed below under "Description of Paired Common
Shares--Ownership Limits; Restrictions on Transfer; Repurchase and Redemption
of Shares," for the Trust to qualify as a REIT under the Internal Revenue Code
of 1986, as amended ("the "Code"), not more then 50% in value of its
outstanding capital shares may be owned, directly or indirectly, by five or
fewer individuals as defined in the Code to include certain entities) during
the last half of a taxable year. To assist the Trust in meeting this
requirement, the Trust may take certain actions to limit the beneficial
ownership, directly or indirectly, by a single person of the Trust's
outstanding equity securities, including any Preferred Shares of the Trust.
Therefore, the Designating Amendment for each series of Preferred Shares may
contain provisions restricting the ownership and transfer of the Preferred
Shares. The applicable Prospectus Supplement will specify any additional
ownership limitation relating to a series of Preferred Shares.
REGISTRAR AND TRANSFER AGENT
The Registrar and Transfer Agent for the Preferred Shares will be set
forth in the applicable Prospectus Supplement.
DESCRIPTION OF PAIRED COMMON SHARES
GENERAL
All Paired Common Shares offered hereby will be duly authorized, fully
paid and nonassessable. Subject to the preferential rights of any other shares
or series of shares of beneficial interest and to the provisions of the
Declaration of Trust regarding Excess Trust Shares and the Articles of
Incorporation regarding Excess Corporation Stock, holders of Paired Common
Shares will be entitled to receive dividends if, as and when authorized and
declared by the Board of Trustees or the Board of Directors, as the case may
be, out of assets legally available therefor and to share ratably in the assets
of the Trust or the Corporation legally available for distribution to its
shareholders in the event of its liquidation, dissolution or winding-up after
payment of, or adequate provision for, all known debts and liabilities of the
Trust or the Corporation.
The Paired Common Shares currently outstanding are listed for trading
on the New York Stock Exchange (the "NYSE"). The Trust and the Corporation
will apply to the NYSE to list the additional Paired Common Shares to be sold
pursuant to any Prospectus Supplement, and the Trust and the Corporation
anticipate that such shares will be so listed.
Subject to the provisions of the Declaration of Trust regarding Excess
Trust Shares and the Articles of Incorporation regarding Excess Corporation
Stock, each outstanding Paired Common Share entitles the holder to one vote on
all matters submitted to a vote of shareholders, including the election of
trustees or directors, and, except as otherwise required by law or except as
provided with respect to any other class or series of shares of beneficial
interest, the holders of such Paired Common Shares will possess the exclusive
voting power. There is no cumulative voting in the election of trustees or
directors, which means that the holders of a majority of the outstanding Paired
Common Shares can elect all of the trustees or directors then standing before
election and the holders of the remaining shares of beneficial interest, if
any, will not be able to elect any trustees or directors.
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<PAGE> 28
Holders of Paired Common Shares have no conversion, sinking fund,
redemption or preemptive rights to subscribe for any securities of the Trust of
the Corporation, as the case may be.
Subject to the provisions of the Declaration of Trust regarding Excess
Shares and the Articles of Incorporation regarding Excess Corporation Stock,
Paired Common Shares will have equal dividend, distribution, liquidation and
other rights, and will have no preference, exchange, or except as expressly
required by the Maryland statute governing real estate investment trusts formed
under Maryland law (the "Maryland REIT Law") and the Maryland General
Corporation Law, as amended (the "MGCL"), appraisal rights.
THE PAIRING AGREEMENT
The Trust and the Corporation have entered into an agreement dated
June 25, 1980, as amended (the "Pairing Agreement") pursuant to which all
outstanding Trust Shares and Corporation Shares are "paired" on a one-for-one
basis. The following is a summary of certain provisions of the Pairing
Agreement. This summary does not purport to be complete and is qualified in
its entirety by reference to the text of the Pairing Agreement, a copy of which
is incorporated by reference as an exhibit to the Registration Statement.
Transfer of Paired Common Shares. Under the Pairing Agreement, Trust
Shares are transferable only together with an equal number of Corporation
Shares, and Corporation Shares are transferable only together with an equal
number of Trust Shares. Certificates evidencing Trust Shares and Corporation
Shares are required by the Pairing Agreement to include a reference to this
transfer restriction. The Declaration of Trust and the Articles of
Incorporation contain similar restrictions on the transfer of Trust Shares and
Corporation Shares, as well as other restrictions on the transfer and ownership
of Trust Shares and Corporation Shares. The Pairing Agreement also provides
that any Excess Trust Shares and any Excess Corporation Stock which may be
issued will be paired in the same manner as the Trust Shares and Corporation
Shares are paired.
Issuance of Shares. Under the Pairing Agreement, the Trust may not
issue Trust Shares and the Corporation may not issue Corporation Shares unless
provision is made for the acquisition by the same person of the same number of
shares of the other entity. The Trust and the Corporation must agree on the
manner and basis of allocating the consideration to be received upon such
issuance, or on the payment by one entity to the other of cash or other
consideration in lieu of a portion of the consideration to be received upon
issuance of such Paired Common Shares.
Share Dividends, Reclassifications and other Similar Events. Neither
the Trust nor the Corporation may declare or pay any dividend or other
distribution payable in Trust Shares or Corporation Shares, issue any rights or
warrants to purchase Trust Shares or Corporation Shares, or subdivide, combine
or otherwise reclassify such shares, unless the other entity concurrently takes
the same action.
Amendment and Termination. The Pairing Agreement may be amended by
the Board of Trustees and the Board of Directors, provided that an amendment
permitting the separate issuance and transfer of Trust Shares and Corporation
Shares must be approved by a majority of each of the outstanding Trust Shares
and the outstanding Corporation Shares. The Pairing Agreement may be
terminated only with the affirmative vote of the holders of a majority of each
of the outstanding Trust Shares and the outstanding Corporation Shares. Upon
such termination, the Trust Shares and the Corporation Shares could be delisted
by the NYSE if the Trust and the Corporation, respectively, did not as separate
entities then meet the listing requirements of such Exchange.
Preferred Shares. The Trust may authorize and issue other classes or
series of shares of beneficial interest in addition to the Trust Shares without
the issuance by the Corporation of corresponding shares, and the Corporation
may authorize and issue shares of Corporation Preferred Stock without the
issuance by the
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<PAGE> 29
Trust of corresponding shares. Furthermore, the Pairing Agreement does not
limit the power of the Boards of the Trust and the Corporation to independently
determine the rights, preferences and restrictions of such shares.
MARYLAND TAKEOVER LEGISLATION
Under the MGCL, certain "business combinations" (including mergers,
consolidations, share exchanges, or, in certain circumstances, asset transfers
or issuances or reclassifications of equity securities) between a Maryland
corporation or a Maryland real estate investment trust and any person who
beneficially owns 10% or more of the voting power of the corporation's or
trust's shares or an affiliate of the corporation or trust who, at any time
within the two-year period prior to the date in question, was the beneficial
owner of 10% or more of the voting power of the then-outstanding voting shares
of the corporation or trust (an "Interested Stockholder") or an affiliate
thereof, are prohibited or restricted unless exempted. The Company has
exempted all "business combinations" involving any party from the business
combination provisions of the MGCL.
Under Maryland law, under certain circumstances "control shares" of a
Maryland corporation or a Maryland real estate investment trust acquired in a
"control share acquisition" may have no voting rights. The Company has
exempted all control share acquisitions involving any person from the MGCL.
OWNERSHIP LIMITS; RESTRICTIONS ON TRANSFER; REPURCHASE AND REDEMPTION OF SHARES
The Declaration of Trust and the Articles of Incorporation provide
that, subject to certain exceptions specified in the Declaration of Trust and
the Articles of Incorporation, no shareholder may own, or be deemed to own by
virtue of the attribution provisions of the Code, more than 8.0% of the capital
stock, whether measured by vote, value or number of Paired Common Shares (other
than for shareholders who owned in excess of 8.0% as of the date the
Reorganization closed, who may not so own or be deemed to own more than the
lesser of 9.9% or the number of Paired Common Shares they held on such date) of
the outstanding Paired Common Shares or Preferred Shares which may be issued,
or any combination thereof. The Board of Trustees and the Board of Directors
may waive the Ownership Limitation if evidence satisfactory to the Board of
Trustees and the Board of Directors and the tax counsel to the Trust and the
Corporation is presented that such ownership will not jeopardize the Trust's
status as a REIT. As a condition of such waiver, each of the Board of Trustees
and the Board of Directors may require opinions of counsel satisfactory to it
and/or an undertaking from the applicant with respect to preserving the REIT
status of the Trust. If shares which would cause the Trust to be beneficially
owned by fewer than 100 persons are issued or transferred to any person, such
issuance or transfer shall be null and void and the intended transferee will
acquire no rights to the stock. Any acquisition of capital stock of the Trust
or the Corporation and continued holding or ownership of capital stock of the
Trust or the Corporation constitutes, under the Declaration of Trust and the
Articles of Incorporation, a continuous representation of compliance with the
Ownership Limitation.
In the event of a purported transfer or other event that would, if
effective, result in the ownership of Paired Common Shares or Preferred Shares
in violation of the Ownership Limitation, such transfer with respect to that
number of shares that would be owned by the transferee in excess of the
Ownership Limitation would be deemed void ab initio and such Paired Common
Shares or Preferred Shares would automatically be exchanged for Excess Shares
or Excess Preferred Stock, respectively (collectively, "Excess Stock"),
authorized by the Declaration of Trust and the Articles of Incorporation,
according to rules set forth in the Declaration of Trust and the Articles of
Incorporation, to the extent necessary to ensure that the purported transfer or
other event does not result in ownership of Paired Common Shares or Preferred
Shares or Excess Stock in violation of the Ownership Limitation. Any purported
transferee or other purported holder of Excess Stock is required to give
written notice to the Trust and the Corporation of a purported transfer or
other event that would result in the issuance of Excess Stock.
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<PAGE> 30
Any Excess Trust Shares and Excess Corporation Stock which may be
issued will be "paired" in the same manner that the Trust Shares and the
Corporation Shares are currently paired. Excess Stock is not Treasury stock
but rather continues as issued and outstanding capital stock of the Trust and
the Corporation. While outstanding, Excess Stock will be held in trust. The
trustees of such trusts shall be appointed by the Trust and the Corporation and
shall be independent of the Trust, the Corporation and the holder of Excess
Stock. The beneficiary of such trust shall be one or more charitable
organizations selected by the trustee. If, after the purported transfer or
other event resulting in an exchange of Paired Common Shares or Preferred
Shares for Excess Stock and prior to the discovery by the Trust and the
Corporation of such exchange, dividends or distributions are paid with respect
to the Paired Common Shares or Preferred Shares that were exchanged for Excess
Stock, then such dividends or distributions are to be repaid to the trustee
upon demand for payment to the charitable beneficiary. While Excess Stock is
held in trust, an interest in that trust may be transferred by the trustee only
to a person whose ownership of Paired Common Shares or Preferred Shares will
not violate the Ownership Limitation, at which time the Excess Stock will be
automatically exchanged for the same number of Paired Common Shares or
Preferred Shares of the same type and class as the Paired Common Shares or
Preferred Shares for which the Excess Stock was originally exchanged. The
Declaration of Trust and the Articles of Incorporation contain provisions that
are designed to ensure that the purported transferee or other purported holder
of the Excess Stock may not receive in return for such a transfer an amount
that reflects any appreciation in the Paired Common Shares or Preferred Shares
for which such Excess Stock was exchanged during the period that such Excess
Stock was outstanding. Any amount received by a purported transferee or other
purported holder in excess of the amount permitted to be received must be
turned over to the charitable beneficiary of the trust. If the foregoing
restrictions are determined to be void or invalid by virtue of any legal
decision, statute, rule or regulation, then the intended transferee or holder
of any Excess Stock may be deemed, at the option of the Trust and the
Corporation, to have acted as an agent on behalf of the Trust and the
Corporation in acquiring or holding such Excess Stock and to hold such Excess
Stock on behalf of the Trust and the Corporation.
The Declaration of Trust and the Articles of Incorporation further
provide that the Trust and the Corporation may purchase, for a period of 90
days during the time the Excess Stock is held in trust, all or any portion of
the Excess Stock from the original transferee- shareholder at the lesser of the
price paid for the Paired Common Shares or Preferred Shares by the purported
transferee (or if no notice of such purchase price is given, at a price to be
determined by the Board of Trustees and the Board of Directors, in their sole
discretion, but no lower than the lowest market price of such stock (based on
the market price of the Paired Common Shares or Preferred Shares) at any time
during the period in which the Excess Stock is held in trust) and the closing
market price for the Paired Common Shares or Preferred Shares on the date the
Trust and the Corporation exercise their option to purchase. The 90-day period
begins on the date of the violative transfer if the original
transferee-shareholder gives notice to the Trust and the Corporation of the
transfer or (if no notice is given) the date the Board of Trustees and the
Board of Directors determine that a violative transfer has been made.
The Ownership Limitation will not be removed automatically even if the
REIT provisions of the Code are changed so as to no longer contain any
ownership concentration limitation or if the ownership concentration limitation
is increased. Except as otherwise described above, any change in the Ownership
Limitation would require an amendment to the Declaration of Trust and the
Articles of Incorporation. Amendments to the Declaration of Trust and to the
Articles of Incorporation generally require the affirmative vote of holders
owning a majority of the outstanding Trust Shares and Corporation Shares
respectively, except that changes to the Ownership Limitation require
two-thirds approval. In addition to preserving the Trust's status as a REIT,
the Ownership Limitation may have the effect of precluding an acquisition of
control of the Trust and the Corporation without the approval of the Board of
Trustees and the Board of Directors.
All persons who own, directly or by virtue of the attribution
provisions of the Code, 5% or more (or such other percentage as may be required
by the Code or regulations promulgated thereunder) of the
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<PAGE> 31
outstanding Paired Common Shares, Preferred Shares or Excess Stock must file an
affidavit with the Trust and the Corporation containing the information
specified in the Declaration of Trust and the Articles of Incorporation before
January 30 of each year. In addition, each shareholder shall upon demand be
required to disclose to the Trust and the Corporation in writing such
information with respect to the direct, indirect and constructive ownership of
shares as the Board of Trustees or the Board of Directors deems necessary to
comply with the provisions of the Declaration of Trust and the Articles of
Incorporation or the Code applicable to a REIT or to comply with the
requirements of any taxing authority or governmental agency.
CONVERTIBLE NOTES
In order to facilitate an underwritten offering by the Company of
Paired Common Shares, any underwriters will purchase a series of Starwood
Lodging Convertible Notes (the "Notes"). The Notes will be automatically
converted into Paired Common Shares (at a conversion price equal to the public
offering price of the Paired Common Shares) upon certification to the Trustee
(defined below) of the transfer of beneficial ownership of the Notes to any
person or entity which is not an underwriter or a selected dealer in the
offering or an affiliate of any of either. The automatic conversion will take
place without physical delivery of the Notes to any transferee of an
underwriter, selected dealer or affiliate: such transferee will receive only a
certificate for the Paired Common Shares issued upon such conversion. The
structure of such an offering is designed to avoid the possibility that the
underwriters, selected dealers and the affiliates of either, or any of them,
acquire 8.0% or more of the Paired Common Shares in violation of the Ownership
Limitation. See "Description of Paired Common Shares -- Ownership Limits;
Restrictions on Transfer; Repurchase and Redemption of Shares."
Because the Notes automatically will be converted into Paired Common
Shares upon sale to the public, no market for the Notes is expected to develop.
The following description of the Notes is provided in the event that any Notes
are acquired and held by any underwriter, selected dealer or affiliate of any
of either, in whose hands the Notes do not automatically convert into Paired
Common Shares.
The Notes are to be issued under an indenture (the "Note Indenture")
to be dated as of the date of such underwritten offering between the Company
and the trustee (the "Note Trustee"). The following statements relating to the
Notes and the Note Indenture are summaries, do not purport to be complete and
are qualified in their entirety by reference to the Notes and the Note
Indenture.
The Notes will not bear interest. The Notes will be issued in
registered form in denominations of the same dollar amount as a multiple of the
public offering price of the Paired Common Shares and will be unsecured,
several obligations of the Trust and the Corporation maturing on the date six
months after the date of the Note Indenture. At the option of the Company, the
maturity date of the Notes may be extended at any time or from time to time, by
written notice to the Note Trustee prior to the maturity date, including any
extension thereof, to a date not later than the second anniversary of the
initial maturity date.
There are no redemption or sinking fund provisions applicable to the
Notes and the Notes are not subject to redemption prior to maturity by the
Trust and the Corporation or either of them.
The following are Events of Default under the Note Indenture: failure
of the Trust or the Corporation to pay principal owing by it in respect of any
Note when due; failure of the Trust or the Corporation to comply with any of
its other agreements in the Notes or the Note Indenture, continued for 90 days
after notice is given as provided in the Note Indenture; and certain events of
bankruptcy, insolvency or reorganization. If an Event of Default occurs and is
continuing, either the Note Trustee or the holders of at least 25% in aggregate
principal amount of the Notes outstanding may declare the entire principal
amount of the Notes to be due and payable immediately.
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<PAGE> 32
The Note Indenture provides that, subject to the duty of the Note
Trustee during default to act with the required standard of care, the Note
Trustee will be under no obligation to exercise any of its rights or powers
under the Note Indenture unless it shall have received reasonable security and
indemnity from the holders of the Notes against any costs, expenses or
liabilities. Subject to such provisions for the indemnification of the Note
Trustee, the holders of a majority in aggregate principal amount of the
outstanding Notes will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Note Trustee or
exercising any trust or power conferred on the Note Trustee.
The Note Indenture does not require the Company to furnish to the Note
Trustee any periodic evidence as to the absence of any default under the Note
Indenture or the compliance by the Company with the terms of the Note
Indenture.
The Note Indenture or the Notes may be amended or supplemented without
the consent of the noteholders in certain circumstances and with the consent of
holders of at least a majority of the principal amount of the Notes at the time
outstanding, subject to certain exceptions. Any past default, or compliance
with any provision may be waived with the consent of the holders of a majority
of the principal amount of the Notes at the time outstanding.
REGISTRAR AND TRANSFER AGENT
The Registrar and Transfer Agent for the Paired Common Shares is First
Interstate Bank, Ltd., Los Angeles, California.
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Debt Securities,
Preferred Shares or Paired Common Shares. Warrants may be issued independently
or together with Debt Securities, Preferred Stock or Paired Common Shares
offered by any Prospectus Supplement and may be attached to or separate from
such Securities. Each series of Warrants will be issued under a separate
warrant agreement (a "Warrant Agreement") to be entered into between the
Company and a bank or trust company, as warrant agent (the "Warrant Agent"),
all as set forth in the Prospectus Supplement relating to the particular issue
of offered Warrants. The Warrant Agent will act solely as an agent of the
Company in connection with the Warrants of such series and will not assume any
obligation or relationship of agency or trust for or with any holders or
beneficial owners of Warrants. The following summaries of certain provisions
of the Warrant Agreements and Warrants do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, all the
provisions of the Warrant Agreement and the Warrant certificates relating to
each series of Warrants which will be filed with the Commission and
incorporated by reference as an exhibit to the Registration Statement of which
this Prospectus is a part at or prior to the time of the issuance of such
series of Warrants.
The applicable Prospectus Supplement will describe the terms of such
Warrants, including the following where applicable: (i) the title of such
Warrants; (ii) the aggregate number of such Warrants; (iii) the price or prices
at which such Warrants will be issued; (iv) the currencies in which the price
of such Warrants may be payable; (v) the designation, aggregate principal
amount and terms of the securities purchasable upon exercise of such Warrants;
(vi) the designation and terms of the series of Debt Securities, Preferred
Shares or Paired Common Shares with which such Warrants are being offered and
the number of such Warrants being offered with each such security; (vii) the
date, if any, on and after which such Warrants and the related securities will
be transferable separately; (viii) the price at which and currency or
currencies, including composite currencies, in which the securities purchasable
upon exercise of such Warrants may be purchased; (ix) the date on which the
right to exercise such Warrants shall commence and the date on which such right
shall expire (the "Expiration Date"); (vi) any material United States federal
income tax consequences; (vii) the terms, if any, on which the Company may
accelerate the date by which the Warrants
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<PAGE> 33
must be exercised; and (viii) any other terms of such Warrants, including
terms, procedures and limitations relating to the exchange and exercise of such
Warrants.
PLAN OF DISTRIBUTION
The Trust and the Corporation may sell Securities to or through
underwriters, and also may sell Securities directly to either purchasers or
through agents.
The distribution of the Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed,
or at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Paired Common Shares may
also be issued to certain holders of Units in exchange for their Units pursuant
to the partnership agreements of the Realty Partnership and the Operating
Partnership.
In connection with the sale of Securities, underwriters may receive
compensation from the Trust, the Corporation, or from purchasers of Securities,
for whom they may act as agents, in the form of discounts, concessions, or
commissions. Underwriters may sell Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions, or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers, and agents that
participate in the distribution of Securities may be deemed to be underwriters,
and any discounts or commissions they receive from the Trust or the Corporation
and any profit on the resale of Securities they realize may be deemed to be
underwriting discounts and commissions under the Securities Act. Any such
underwriter or agent will be identified, and any such compensation received
from the Trust or the Corporation will be described, in the Prospectus
Supplement.
Unless otherwise specified in the related Prospectus Supplement, each
series of Securities will be a new issue with no established trading market,
other than the Paired Common Shares which are listed on the NYSE. Any Paired
Common Shares sold pursuant to a Prospectus Supplement will be listed on such
exchange. The Trust or the Corporation may elect to list any series of Debt
Securities or Preferred Shares on an exchange, but is not obligated to do so.
It is possible that one or more underwriters may make a market in a series of
Securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. Therefore, no assurance can be given as to
the liquidity of the trading market for any of the Securities.
Under agreements the Trust and the Corporation may enter into,
underwriters, dealers, and agents who participate in the distribution of
Securities may be entitled to indemnification by the Trust or the Corporation
against certain liabilities, including liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, or be customers of, the Trust or the Corporation in the
ordinary course of business.
If so indicated in the applicable Prospectus Supplement, the Trust or
the Corporation, as the case may be, will authorize underwriters or other
persons acting as the Trust's or the Corporation's agents to solicit offers by
certain institutions to purchase Securities from the Trust or the Corporation
pursuant to contracts providing for payment and delivery at a future date.
Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Trust or the Corporation, as the case may
be. The obligations of any purchaser under any such contract will be subject
to the condition that the purchase of the Securities shall not at the time of
delivery be prohibited under the laws of the jurisdiction to which such
purchaser is subject. The underwriters and such other agents will not have any
responsibility in respect of the validity or performance of such contracts.
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<PAGE> 34
LEGAL MATTERS
Sidley & Austin, Chicago, Illinois, has passed upon the validity of
the issuance of the Securities offered pursuant to this Prospectus. Lawyers at
Sidley & Austin own or hold options to purchase an aggregate of 12,227 Paired
Common Shares. Rogers and Wells, New York, New York will act as counsel to any
underwriters, dealers or agents. Rogers & Wells acted as counsel to Starwood
Capital in connection with the Reorganization. Sidley & Austin and Rogers &
Wells will rely upon the opinion of Piper & Marbury, Baltimore, Maryland, as to
matters of Maryland law.
EXPERTS
The separate and combined financial statements and financial statement
schedules of Starwood Lodging Trust and Starwood Lodging Corporation as of
December 31, 1994 and 1993 and for each of the three years in the period ended
December 31, 1994, and the financial statements of the Doubletree Club Hotel of
Rancho Bernardo incorporated by reference in this Prospectus, have been audited
by Deloitte & Touche LLP, independent auditors, as stated in their reports also
incorporated by reference herein. Such financial statements and financial
statement schedules have been incorporated by reference herein in reliance upon
the reports of such firm given upon their authority as experts in accounting
and auditing.
The financial statements of Embassy Suites--Tempe, Starwood Wichita
Investors, L.P., Capitol Hill Suites, and French Quarter Square and the
Schedules of Operating Revenue and Certain Expenses for the French Quarter
Square to the extent and for the periods included in their reports (which, with
respect to French Quarter Square, contain an explanatory paragraph relating to
certain litigation disputing the ownership of the underlying real property as
more fully described in Note 7 to the financial statements), have been audited
by Price Waterhouse LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
The financial statements of Sheraton Colony Square as of December 31,
1994 and 1993 and for each of the three years in the period ended December 31,
1994 have been audited by Ernst & Young LLP, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
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<PAGE> 35
<TABLE>
<S> <C>
====================================================== =====================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL
HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE $500,000,000
ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE
OFFERING MADE BY THIS PROSPECTUS. IF GIVEN OR MAKE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY STARWOOD LODGING
OR ANY AGENT, DEALER OR UNDERWRITER. THIS TRUST
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR
A SOLICITATION OR AN OFFER TO BUY, ANY SECURITY STARWOOD LODGING
OTHER THAN THE REGISTERED SECURITIES OF THE COMPANY CORPORATION
OFFERED BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY THE SECURITIES BY ANYONE IN ANY JURISDICTION COMMON STOCK, WARRANTS,
WHERE SUCH AN OFFER WOULD BE UNLAWFUL. NEITHER THE PREFERRED STOCK AND
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE DEBT SECURITIES
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN
THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
------------------ ------------------
TABLE OF CONTENTS PROSPECTUS
------------------
PAGE
----
Available Information . . . . . . . . . . . .
Incorporation of Certain Documents
by Reference . . . . . . . . . . . . . . .
The Company . . . . . . . . . . . . . . . . . 5
Use of Proceeds . . . . . . . . . . . . . . . 6
Ratios of Earnings to Fixed Charges . . . . . 6
Description of Debt Securities . . . . . . . 7
Description of Capital Stock . . . . . . . . 18
Description of Preferred Shares . . . . . . . 19
Description of Paired Common Shares . . . . . 25
Description of Warrants . . . . . . . . . . . 30
Plan of Distribution . . . . . . . . . . . . 31
Convertible Notes . . . . . . . . . . . . . .
Legal Matters . . . . . . . . . . . . . . . . 32
Experts . . . . . . . . . . . . . . . . . . . 32
====================================================== =====================================================
</TABLE>
<PAGE> 36
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
<TABLE>
<S> <C>
Registration Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 100,000
NYSE Listing Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rating Agencies Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Printing and Engraving Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounting Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Blue Sky Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fees and Expenses of Transfer Agent, Trustee and Depositary . . . . . . . . . . . . . . . . . . . .
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
</TABLE>
* Expenses are estimated except for the registration fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Certain provisions of the MGCL provide that the Company may, and in
some circumstances must, indemnify the trustees, directors and officers of the
Company against liabilities and expenses incurred by such person by reason of
the fact that such person was serving in such capacity, subject to certain
limitations and conditions set forth in the statute. The Corporation's
Articles of Incorporation and the Trust's Declaration of Trust provide that the
Corporation and Trust shall indemnify its directors, trustees and officers to
the extent permitted by the MGCL.
The Company has entered into indemnification agreements with its
directors, trustees and executive officers providing for the maintenance of
directors, trustees and officers liability insurance, subject to certain
conditions, and the indemnification of and advancement of expenses to such
directors, trustees and executive officers.
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<PAGE> 37
ITEM 16. EXHIBITS.
The following exhibits are filed herewith or incorporated herein by
reference. Documents indicated by an asterisk *) are filed herewith.
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------
2 Formation Agreement dated as of November 11,
1994 among the Trust, the Corporation, Starwood
Capital Group, L.P., Berl Holdings L.P.,
Starwood Apollo Hotel Partners I, L.P., Starwood
Apollo Hotel Partners VIII, L.P., Starwood
Apollo Hotel Partners IX, L.P. and Starwood
Nomura Hotel Investors, L.P. (incorporated by
reference to Exhibit 2 to the Trust's and the
Corporation's Joint Current Report on Form 8-K
dated November 16, 1994 (the "November 1994 Form
8-K")).
3.1 Amended and Restated Declaration of Trust of the
Trust dated June 6, 1988, as amended
(incorporated by reference to Exhibit 3A to the
Trust's and the Corporation's Joint Current
Report on Form 8-K dated January 31, 1995 (the
"January 1995") Form 8-K")).
3.2 Amendment and Restatement of Articles of
Incorporation of the Corporation, as amended
(incorporated by referenced to Exhibit 3B to the
January 1995 Form 8-K).
3.3 Trustees' Regulations of the Trust, as amended
(incorporated by referenced to Exhibit 3.3 to
the Trust's and the Corporation's Joint Annual
Report on Form 10-K for the year ended December
31, 1994 (the "1994 Form 10-K")).
3.4 By-laws of the Corporation, as amended
(incorporated by reference to Exhibit 3.4 to the
1994 Form 10-K).
4.1(1) Form of Indenture for Convertible Notes
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<PAGE> 38
4.2(1) Form of Convertible Notes
5(1) Opinion of Counsel.
12.1(1) Computation of Ratio of Earnings to Fixed
Charges.
23.1(1) Consent of Independent Public Accountants.
23.2(1) Consent of Counsel (included in Exhibit 5).
24 Powers of Attorney (contained in the signature
pages hereto).
26(1) Form T-1 of Trustee for the Notes.
- --------------
(1) To be filed by amendment.
ITEM 17 UNDERTAKINGS.
Each of the undersigned Registrants hereby undertakes that insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of such Registrant
pursuant to the provisions described in Item 15 above, or otherwise, such
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrants of expenses incurred or paid by a director, officer or controlling
person of the Registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, each Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned Registrants hereby further undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) (Section
230.424(b) of 17 C.F.R.) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed with or furnished to the Commission by the
Registrants pursuant to
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<PAGE> 39
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrants hereby further undertake that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrants' annual reports pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrants further undertake that:
(a) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of Prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(b) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
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<PAGE> 40
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Los Angeles, State of
California, on the 16th day of November, 1995.
STARWOOD LODGING TRUST
By: /s/ Jeffrey C. Lapin
_______________________________
President and Chief Operating
Officer
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<PAGE> 41
POWER OF ATTORNEY
Each person whose signature to the Registration Statement appears
below hereby appoints Jeffrey C. Lapin and Ronald C. Brown, and each of them,
as his attorneys-in-fact, with full power of substitution and resubstitution,
to execute in the name and on behalf of such person, individually and in the
capacity stated below, and to file all amendments and post-effective amendments
to this Registration Statement, which amendment or amendments may make such
changes in and additions to this Registration Statement as such
attorneys-in-fact may deem necessary or appropriate and any registration
statement for the offering that is to be effective upon filing Pursuant to Rule
462(b) under the Securities Act of 1933, as amended.
<TABLE>
<S> <C> <C>
/s/ Barry S. Sternlicht Chairman, Chief Executive Officer and Trustee November 16, 1995
______________________________________
Barry S. Sternlicht (Principal Executive Officer)
/s/ Jeffrey C. Lapin President, Chief Operating Officer and Trustee November 16, 1995
______________________________________
Jeffrey C. Lapin
/s/ Ronald C. Brown Vice President (Principal Financial and November 16, 1995
______________________________________
Ronald C. Brown Accounting Officer)
/s/ Bruce W. Duncan Trustee November 16, 1995
______________________________________
Bruce W. Duncan
/s/ Madison F. Grose Trustee November 16, 1995
______________________________________
Madison F. Grose
/s/ Stephen R. Quazzo Trustee November 16, 1995
______________________________________
Stephen R. Quazzo
/s/ William E. Simms Trustee November 16, 1995
______________________________________
William E. Simms
/s/ Daniel H. Stern Trustee November 16, 1995
______________________________________
Daniel H. Stern
</TABLE>
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<PAGE> 42
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing a Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Los Angeles, State of California on
the 16th day of November, 1995.
STARWOOD LODGING CORPORATION
By: /s/ Kevin E. Mallory
-----------------------------------
Executive Vice President
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<PAGE> 43
POWER OF ATTORNEY
Each person whose signature to the Registration Statement appears
below hereby appoints Kevin E. Mallory and Kenneth J. Biehl, and each of them,
as his attorneys-in-fact, with full power of substitution and resubstitution,
to execute in the name and on behalf of such person, individually and in the
capacity stated below, and to file all amendments and post-effective amendments
to this Registration Statement, which amendment or amendments may make such
changes in and additions to this Registration Statement as such
attorneys-in-fact may deem necessary or appropriate and any registration
statement for the offering that is to be effective upon filing Pursuant to Rule
462(b) under the Securities Act of 1933, as amended.
<TABLE>
<S> <C> <C>
/s/ Earle F. Jones Chairman of the Board of Directors and November 16, 1995
______________________________________
Earle F. Jones Director
/s/ Kevin E. Mallory Executive Vice President (Principal Executive November 16, 1995
______________________________________
Kevin E. Mallory Officer)
/s/ Kenneth J. Biehl Vice President and Controller (Principal November 16, 1995
______________________________________
Kenneth J. Biehl Financial and Accounting Officer)
/s/ Bruce M. Ford Director November 16, 1995
______________________________________
Bruce M. Ford
/s/ Graeme W. Henderson Director November 16, 1995
______________________________________
Graeme W. Henderson
</TABLE>
II-8
