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SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ______________)*
STARWOOD HOTELS & RESORTS TRUST
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
(Name of Issuer)
Shares of Beneficial Interest, Par Value $0.01 Per Share
Share of Common Stock, par value $0.01 per share
(Title of Class of Securities)
855905 20 4
(CUSIP Number)
David J. Greenwald, Esq.
Goldman, Sachs & Co.
85 Broad Street, New York, New York 10004
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
January 2, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
SEC 1746(12-91)
<PAGE>
SCHEDULE 13D
- --------------------- ------------------
CUSIP NO. 855905 20 4 PAGE 2 OF 35 PAGES
- --------------------- ------------------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
WHWE L.L.C.
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) |_|
(B) |_|
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
OO
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
|_|
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH 2,320,215
REPORTING --------------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH -0-
--------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
2,320,215
--------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,320,215
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.7%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
OO
- -------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
- --------------------- ------------------
CUSIP NO. 855905 20 4 PAGE 3 OF 35 PAGES
- --------------------- ------------------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Whitehall Street Real Estate Limited Partnership V
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) |_|
(B) |_|
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
|_|
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH 2,230,215
REPORTING --------------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH -0-
--------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
2,230,215
--------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,230,215
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.7%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
PN
- -------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
- --------------------- ------------------
CUSIP NO. 855905 20 4 PAGE 4 OF 35 PAGES
- --------------------- ------------------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
WH Advisors, L.P. V
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) |_|
(B) |_|
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
|_|
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH 2,230,215
REPORTING --------------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH -0-
--------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
2,230,215
--------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,230,215
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.7%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
PN
- -------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
- --------------------- ------------------
CUSIP NO. 855905 20 4 PAGE 5 OF 35 PAGES
- --------------------- ------------------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GS Capital Partners, L.P.
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) |_|
(B) |_|
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
OO
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
|_|
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH 1,862,226
REPORTING --------------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH -0-
--------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
1,862,226
--------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,862,226
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.0%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
PN
- -------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
- --------------------- ------------------
CUSIP NO. 855905 20 4 PAGE 6 OF 35 PAGES
- --------------------- ------------------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
GS Advisors, L.P.
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) |_|
(B) |_|
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
|_|
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH 1,862,226
REPORTING --------------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH -0-
--------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
1,862,226
--------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,862,226
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.0%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
PN
- -------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
- --------------------- ------------------
CUSIP NO. 855905 20 4 PAGE 7 OF 35 PAGES
- --------------------- ------------------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Goldman Sachs Group, L.P.
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) |_|
(B) |_|
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
|_|
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH 4,959,276
REPORTING --------------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH -0-
--------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
4,959,276
--------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,959,276
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.8%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
HC/PN
- -------------------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
- --------------------- ------------------
CUSIP NO. 855905 20 4 PAGE 8 OF 35 PAGES
- --------------------- ------------------
- -------------------------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Goldman, Sachs & Co.
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) |_|
(B) |_|
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF; OO
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
|X|
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- -------------------------------------------------------------------------------
NUMBER OF 7. SOLE VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH 4,959,276
REPORTING --------------------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH -0-
--------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
4,959,276
--------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,959,276
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
- -------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.8%
- -------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON
PN/BD/IA
- -------------------------------------------------------------------------------
<PAGE>
CUSIP No. 855905 20 4 PAGE 9 OF 35 PAGES
Item 1. Security and Issuer.
The titles of the classes of equity securities to which this statement
relates are the shares of Beneficial Interest, par value $.01 per share (the
"Trust Shares"), of Starwood Hotels & Resorts Trust, a Maryland real estate
investment trust ("Starwood Trust"), and the shares of Common Stock, par value
$.01 per share (the "Corporation Shares"), of Starwood Hotels & Resorts
Worldwide, Inc., a Maryland corporation ("Starwood Corporation" and, together
with Starwood Trust, "Starwood"). Pursuant to a pairing agreement between
Starwood Trust and Starwood Corporation, each stockholder of Starwood owns an
equivalent number of Trust Shares and Corporation Shares, and the Trust Shares
and the Corporation Shares may be held and traded only in units consisting of
one Trust Share and one Corporation Share (the "Paired Shares"). The principal
executive offices of Starwood Trust are located at 2231 E. Camelback Road, Suite
410, Phoenix, Arizona 85016, and the principal executive offices of Starwood
Corporation are located at 2231 E. Camelback Road, Suite 400, Phoenix, Arizona
85016.
Item 2. Identity and Background.
This statement is being filed by WHWE L.L.C. ("WHWE"), Whitehall Street
Real Estate Limited Partnership V ("Whitehall"), WH Advisors, L.P. V ("WH
Advisors, L.P."), GS Capital Partners, L.P. ("GS Capital Partners"), GS
Advisors, L.P. ("GS Advisors, LP"), Goldman, Sachs & Co. ("GS&Co.") and The
Goldman Sachs Group, L.P. ("GS Group", and, together with WHWE,
<PAGE>
CUSIP No. 855905 20 4 PAGE 10 OF 35 PAGES
Whitehall, WH Advisors, L.P., GS Capital Partners, GS Advisors, L.P., and
GS&Co., the "Reporting Persons").*
The business address of each Reporting Person is 85 Broad Street, New
York, New York 10004.
WHWE is a Delaware limited liability company formed in 1995 in
connection with the acquisition of Westin Hotel Company, a Delaware corporation,
and its affiliates (collectively, "Westin") by the Reporting Persons and certain
other persons. WHWE was formed to act as a member of W&S Hotel L.L.C., a
Delaware limited liability company which previously owned Westin ("W&S L.L.C.").
Whitehall is a Delaware limited partnership that was formed for the
purpose of investing in debt and equity interests in real estate assets and
businesses. Whitehall is the controlling member of WHWE. WH Advisors, L.P., a
Delaware limited partnership, acts as the sole general partner of Whitehall.
GS Capital Partners is a Delaware limited partnership that was formed
for the purpose of investing in equity and equity-related securities primarily
acquired or issued in leveraged acquisitions, reorganizations and other private
equity transactions. GS Advisors, L.P., a Delaware limited partnership, acts as
the sole general partner of GS Capital Partners.
- --------
* Neither the present filing nor anything contained herein shall be construed
as an admission that WHWE, Whitehall, WH Advisors, L.P., GS Capital
Partners, GS Advisors, L.P., GS&Co. or GS Group constitute a "person" for
any purpose other than Section 13(d) of the Securities Exchange Act of 1934,
or that WHWE, Whitehall, WH Advisors, L.P., GS Capital Partners, GS
Advisors, L.P., GS&Co. or GS Group constitute a "group" for any purpose.
<PAGE>
CUSIP No. 855905 20 4 PAGE 11 OF 35 PAGES
GS&Co., a New York limited partnership, is an investment banking firm
and a member of the New York Stock Exchange, Inc. and other national exchanges.
GS Group, one of the general partners of GS&Co., owns a 99% interest in GS&Co.
GS&Co. is the investment manager for GS Capital Partners and Whitehall. GS Group
is a Delaware limited partnership and holding partnership that (directly or
indirectly through subsidiaries or affiliated companies or both) is a leading
investment banking organization. The other general partner of GS&Co. is The
Goldman, Sachs & Co. L.L.C. ("GS L.L.C."), which is wholly-owned by GS Group and
The Goldman Sachs Corporation, a Delaware corporation ("GS Corp."). GS Corp. is
the sole general partner of GS Group.
The name, residence or business address, present principal occupation
or employment, and the name, principal business and address of any corporation
or other organization in which such employment is conducted and the citizenship
of (i) each director of GS Corp. and GS L.L.C. and of each member of the
executive committees of GS Corp., GS L.L.C., GS Group and GS&Co. are set forth
on Schedule I hereto and are incorporated herein by reference, (ii) each
director and executive officer of WH Advisors, Inc. V, a Delaware corporation
that is the sole general partner of WH Advisors, L.P., are set forth on Schedule
II-A hereto and are incorporated herein by reference and (iii) each director and
executive officer of GS Advisors, Inc., a Delaware corporation that is the sole
general partner of GS Advisors, L.P., are set forth on Schedule II-B hereto and
are incorporated herein by reference.
None of the Reporting Persons, or to the best knowledge and belief of
the Reporting Persons, any of the individuals listed in Schedule I, Schedule
II-A or Schedule II-B has, during the
<PAGE>
CUSIP No. 855905 20 4 PAGE 12 OF 35 PAGES
past five years, been convicted in any criminal proceeding (excluding traffic
violations or similar misdemeanors) or, except as set forth in Schedule III to
this Schedule 13D, has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
This Item 2 is qualified in its entirety by reference to Schedule I,
Schedule II-A, Schedule II-B and Schedule III which are attached hereto and
incorporated into this Item by reference.
Item 3. Source and Amount of Funds or Other Consideration.
WHWE, GS Capital Partners and certain other investment limited
partnerships affiliated with GS&Co. and GS Group (the "Other Limited
Partnerships") directly and indirectly through subsidiary entities, acquired the
Starwood securities that are the subject of this statement pursuant to the
Transaction Agreement, dated as of September 8, 1997 (the "Transaction
Agreement"), by and among WHWE, Woodstar Investor Partnership, a Delaware
general partnership, Nomura Asset Capital Corporation, a Delaware corporation ,
Juergen Bartels, W&S L.L.C., Westin Hotels & Resorts Worldwide, Inc., a Delaware
corporation ("Worldwide"), W&S Lauderdale Corp., a Delaware corporation
("Lauderdale"), W&S Seattle Corp., a Delaware corporation ("Seattle"), Westin
St. John Hotel Company, Inc., a United States Virgin Islands corporation ("St.
John"), W&S Denver Corp., a Delaware corporation ("Denver"), W&S Atlanta Corp.,
a Delaware corporation ("Atlanta"), Starwood Trust, SLT Realty Limited
Partnership, a Delaware limited partnership
<PAGE>
CUSIP No. 855905 20 4 PAGE 13 OF 35 PAGES
("Starwood Realty Partnership"), Starwood Corporation and SLC Operating Limited
Partnership, a Delaware limited partnership ("Starwood Operating Partnership").
Pursuant to the Transaction Agreement, Worldwide merged with and into Starwood
Trust, and the outstanding shares of Worldwide were converted into an aggregate
of 6,285,783 shares of Class A Exchangeable Preferred Shares of Starwood Trust
("Class A EPS"), an aggregate of 5,294,783 shares of Class B Exchangeable
Preferred Shares of Starwood Trust ("Class B EPS") and cash. In addition,
pursuant to the Transaction Agreement, the stockholders of Lauderdale, Seattle
and Denver contributed all of the outstanding shares of such companies to
Starwood Realty Partnership in exchange for an aggregate of 597,844 Class A
Partnership Units of Starwood Realty Partnership ("Realty Partnership Units")
and shares of Class B EPS and the assumption of indebtedness, and the
stockholders of Atlanta and St. John contributed all of the outstanding shares
of such companies to Starwood Operating Partnership in exchange for an aggregate
of 393,156 Class B Partnership Units of Starwood Operating Partnership
("Operating Partnership Units") and shares of Class B EPS and the assumption of
indebtedness. The shares of Class A EPS, Class B EPS, Realty Partnership Units
and Operating Partnership Units acquired by such Reporting Persons reflect their
respective proportionate share of the consideration received in the transactions
contemplated by the Transaction Agreement (the "Transaction"). See Items 5 and 6
for a discussion of the terms on which the Class A EPS, Class B EPS, Realty
Partnership Units and Operating Partnership Units received in the Transaction
may be exchanged for Paired Shares or other securities issued by Starwood. The
shares of Westin beneficially owned by such Reporting Persons prior to the
consummation of the Transaction were indirectly acquired in connection with the
acquisition of Westin by W&S L.L.C. in 1995.
<PAGE>
CUSIP No. 855905 20 4 PAGE 14 OF 35 PAGES
Whitehall and WH Advisors L.P. may be deemed to beneficially own the
Paired Shares that may be deemed to be beneficially owned by WHWE. GS Advisors
L.P. may be deemed to beneficially own the Paired Shares that may be deemed to
be beneficially owned by GS Capital Partners. GS Group and GS&Co. may be deemed
to beneficially own the Paired Shares that may be deemed to be beneficially
owned by WHWE, Whitehall, WH Advisors, L.P., GS Capital Partners and GS Advisors
L.P.
In addition, GS Group and GS&Co. may be deemed to beneficially own
200,455 Paired Shares that may be deemed to be beneficially owned by the Other
Limited Partnerships. Also, as of January 2, 1998, GS&Co. and GS Group may be
deemed to own beneficially 576,380 Paired Shares and certain put options held in
client accounts with respect to which GS&Co. or employees of GS&Co. have voting
or investment discretion, or both ("Managed Accounts"). GS&Co. purchased these
Paired Shares and put options in the ordinary course of its business on behalf
of the Managed Accounts. All such transactions that were effected during the
past 60 days are set forth on Schedule IV hereto and were effected through The
New York Stock Exchange or The Chicago Board of Options Exchange. The aggregate
consideration for the purchases listed on Schedule IV was $729,256.06. GS&Co.
and GS Group each disclaims beneficial ownership of Paired Shares (i)
beneficially owned by the Reporting Persons other than GS&Co. and GS Group or by
the Other Limited Partnerships to the extent of the equity interests in such
Reporting Persons or such Other Limited Partnerships held by persons other than
GS&Co, GS Group or their affiliates and (ii) held in Managed Accounts. In
addition, each of the Reporting Persons disclaims beneficial ownership of Paired
Shares to the extent that the Class A EPS, Class B EPS, Realty Partnership Units
and
<PAGE>
CUSIP No. 855905 20 4 PAGE 15 OF 35 PAGES
Operating Partnership Units may be exchanged for cash rather than Paired Shares
at the option of Starwood as described in Item 6.
None of the persons listed on Schedules I, II-A or II-B hereto has
contributed any funds or other consideration towards the purchase of the
securities of Starwood reported in this statement, except insofar as they may be
general or limited partners of certain of the Reporting Persons or the
Other Limited Partnerships and have made capital contributions to such Reporting
Persons or such Other Limited Partnerships, as the case may be.
Item 4. Purpose of Transaction.
WHWE, GS Capital Partners and the Other Limited Partnerships acquired
their direct or indirect interests in Westin for the purpose of acquiring an
equity investment in Westin. WHWE, GS Capital Partners and the Other Limited
Partnerships, directly and indirectly through subsidiary entities, acquired the
Starwood securities described in this statement in connection with the
Transaction, which resulted in the acquisition by Starwood of Westin.
As of the date of this statement, none of the Reporting Persons, or to
the knowledge and belief of the Reporting Persons, any of the individuals listed
in Schedule I, Schedule II-A or Schedule II-B, has any present plan or intention
which relates to or would result in any of the actions set forth in parts (a)
through (j) of Item 4 of Schedule 13D, other than the following:
1. The Class A EPS is, pursuant to its terms, and the Realty
Partnership Units and the Operating Partnership Units are, pursuant to the
terms of Exchange Rights Agreements, dated as of January 2, 1998, with
Starwood Realty Partnership and Starwood Operating Partnership,
respectively (the "Exchange Rights Agreements"), exchangeable for Paired
Shares subject to the right of Starwood to deliver cash in lieu of Paired
Shares (or, in certain circumstances, to deliver a promissory note or to
cause the registered sale of such securities
<PAGE>
CUSIP No. 855905 20 4 PAGE 16 OF 35 PAGES
and the delivery of the net purchase price from such sale to the exchanging
holder). The Class B EPS is, pursuant to its terms, exchangeable for Class
A EPS, which, as described above, is exchangeable for Paired Shares,
subject to the right of Starwood to deliver cash in lieu of such Paired
Shares (or, in certain circumstances, to deliver a promissory note or to
cause the registered sale of such securities and the delivery of the net
purchase price from such sale to the exchanging holder). In addition the
Realty Partnership Units and Operating Partnership Units are, pursuant to
the Exchange Rights Agreements, exchangeable for shares of Class B EPS,
subject to the right of Starwood to deliver cash in lieu of such Starwood
securities (or, in certain circumstances, to deliver a promissory note or
to cause the registered sale of such securities and the delivery of the net
purchase price from such sale to the exchanging holder). Each Reporting
Person expects to evaluate, on an ongoing basis, whether to exercise such
exchange rights and the timing, if any, of any such exchange.
2. The Transaction Agreement provides that immediately following
consummation of the Transaction, the Board of Trustees of Starwood Trust
and the Board of Directors of Starwood Corporation will be expanded to add
one member to each of the boards. The vacancies created by this expansion
will be filled by two persons designated by affiliates of GS Group. These
designees intend to serve on their respective boards until the end of their
term (the 1998 Annual Meeting) unless removed earlier pursuant to the
charter or bylaws of, or law applicable to, Starwood Trust or Starwood
Corporation, as applicable. In these capacities, the designee to the Board
of Directors of Starwood Corporation and the designee to the Board of
Trustees of Starwood Trust will participate, and will have the opportunity
to vote, on matters that are presented to the Board of Directors or Board
of Trustees, including sales of assets, extraordinary corporate
transactions, and changes to Starwood's capitalization, dividend policy,
business or corporate structures. The Transaction Agreement provides that,
from and after the expiration of such initial terms, and as long as
affiliates of GS Group do not transfer to unaffiliated entities more than
50% of the Starwood securities received by them in the Transaction,
affiliates of GS Group will have the right to require Starwood Corporation
to include an individual designated by Goldman Sachs and approved by
Starwood Corporation in the management slate of nominees to the Board of
Directors of the Corporation. In addition, the Transaction Agreement
provides that, from and after the expiration of such initial terms, and as
long as affiliates of GS Group do not transfer to unaffiliated entities
more than 75% of the Starwood securities received by them in the
Transaction, affiliates of GS Group will have the right to require Starwood
Trust to include an individual designated by affiliates of GS Group and
approved by Starwood Trust in the management slate of nominees to the Board
of Trustees of Starwood Trust. In the event that affiliates of GS Group
transfer Starwood Securities in excess of the specified thresholds, these
rights to designate nominees will cease to exist. In addition, pursuant to
the Transaction Agreement, Juergen Bartels, formerly the chairman and chief
executive officer of Westin, will be appointed to the Board of Directors of
Starwood Corporation to fill an additional vacancy created by the expansion
of the Board of Directors of Starwood Corporation. In the event that
Starwood Trust defaults in its obligations under the Class B EPS, including
the exchange and redemption provisions,
<PAGE>
CUSIP No. 855905 20 4 PAGE 17 OF 35 PAGES
the holders of a majority of the outstanding Class B EPS will have the
right to designate two additional members of the Board of Trustees of
Starwood Trust.
3. In connection with the Transaction, the Declaration of Trust of
Starwood Trust and the Certificate of Incorporation of Starwood Corporation
were amended to permit the issuance of additional Paired Shares, including
the issuance of additional Paired Shares upon conversion of the Class A
EPS, Class B EPS, Realty Partnership Units and Operating Partnership Units
issued in connection with the Transaction. In addition, the partnership
agreement of the Realty Partnership and the partnership agreement of the
Operating Partnership were amended to provide for the issuance of the
Realty Partnership Units and the Operating Partnership Units issued in the
Transaction.
4. The terms of the Class A EPS and Class B EPS provide that the
holders of such securities will be entitled to receive dividends on such
securities in an amount equal to the amount of dividends declared on the
Paired Shares, and the terms of the Realty Partnership Units and the
Operating Partnership Units provide that the holders of such partnership
units will be entitled to participate in the receipt of distributions from
the Realty Partnership and the Operating Partnership with other holders of
partnership units of the Realty Partnership and the Operating Partnership
that do not have any preferences in the receipt of distributions. The terms
of the Class B EPS also provide for the payment of default rate dividends
at the greater of LIBOR plus 4% or the amount of dividends paid on the
Paired Shares in the event that Starwood defaults on its obligations under
the terms of the Class B EPS.
5. See Item 6 for a discussion of the anti-dilution provisions of the
Class A EPS, Class B EPS, Realty Partnership Units and Operating
Partnership Units that may result in the acquisition of additional Paired
Shares by the Reporting Persons upon the exchange of such securities for
shares of Class A EPS, Class B EPS or Paired Shares.
6. Starwood and certain of the Reporting Persons and certain Other
Limited Partnerships are also party to a Registration Rights Agreement,
dated as of January 2, 1998 (the "Registration Rights Agreement"). Under
the terms of the Registration Rights Agreement, such Reporting Persons and
other holders of Starwood securities issued in the Transaction have the
right to demand that Starwood file registration statements with respect to
Paired Shares held by such holders (and, in the event of a default by
Starwood under the terms of the Class B EPS, the Class B EPS held by such
holders). Such holders also have certain rights to participate in other
registered offerings of Paired Shares by Starwood. See Item 6.
The foregoing discussion is qualified in its entirety by reference to
the Transaction Agreement, the Registration Rights Agreement, the amendment to
the Declaration of Trust of Starwood Trust creating the Class A EPS and Class B
EPS and the Exchange Rights Agreements
<PAGE>
CUSIP No. 855905 20 4 PAGE 18 OF 35 PAGES
which are filed as exhibits hereto, each of which is incorporated by reference
in their entirety into this Item 4.
Each Reporting Person expects to evaluate on an ongoing basis
Starwood's financial condition, business operations and prospects, market price
of the Paired Shares, conditions in securities markets generally, general
economic and industry conditions and other factors. Accordingly, each Reporting
Person reserves the right to change its plans and intentions at any time, as it
deems appropriate. In particular, each Reporting Person may at any time and from
time to time acquire additional Paired Shares or securities convertible or
exchangeable for Paired Shares; may dispose of shares of Class A EPS, Class B
EPS or Paired Shares; exchange shares of Class A EPS for Paired Shares, exchange
shares of Class B EPS for shares of Class A EPS or exchange Realty Partnership
Units or Operating Partnership Units for shares of Class B EPS or Paired Shares;
and/or may enter into privately negotiated derivative transactions with
institutional counterparties to hedge the market risk of some or all of its
positions in the EPS or Paired Shares. Any such transactions may be effected at
any time and from time to time subject to any applicable limitations of the
Securities Act and the contractual restrictions described in Item 6. To the
knowledge of each Reporting Person, each of the persons listed on Schedule I,
Schedule II-A and Schedule II-B hereto may make the same evaluation and reserves
the same rights.
Item 5. Interest in Securities of the Issuer.
(a) The shares of Class A EPS are exchangeable for Paired Shares at any
time, subject to the right of Starwood to deliver cash in lieu of Paired Shares
(or, in certain circumstances, to deliver a promissory note or to cause the
registered sale of such securities and the delivery of the net purchase
<PAGE>
CUSIP No. 855905 20 4 PAGE 19 OF 35 PAGES
price from such sale to the exchanging holder). The shares of Class B EPS are
exchangeable for Class A EPS at any time after January 2, 1999, which, as
described above, are exchangeable for Paired Shares, subject to the right of
Starwood to deliver cash in lieu of such Paired Shares (or, in certain
circumstances, to deliver a promissory note or to cause the registered sale of
such securities and the delivery of the net purchase price from such sale to the
exchanging holder). The Realty Partnership Units and Operating Partnership Units
are exchangeable at any time for Paired Shares, subject to the right of Starwood
to deliver cash in lieu of Paired Shares (or, in certain circumstances, to
deliver a promissory note or to cause the registered sale of such securities and
the delivery of the net purchase price from such sale to the exchanging holder),
and are exchangeable, at any time prior to January 2, 2003, for shares of Class
B EPS, subject to the right of Starwood to deliver cash in lieu of shares of
Class B EPS (or, in certain circumstances, to deliver a promissory note or to
cause the registered sale of such securities and the delivery of the net
purchase price from such sale to the exchanging holder). The initial exchange
ratio for all such exchanges is 1:1, and such ratio is subject to equitable
adjustment in certain events, including the payment of a stock dividend by
Starwood Trust or Starwood Corporation or the completion of a recapitalization
of Starwood or a reclassification of the Starwood securities. In addition the
shares of Class B EPS may, at the option of either the holder or Starwood, be
redeemed, from and after January 2, 2003, at a price equal to $38.50 or, in
certain circumstances, Paired Shares having an equivalent value.
The information set forth below in this Item 5 is presented on the
basis that the shares of Class B EPS were immediately exchangeable into Class A
EPS, which, as noted above, is immediately exchangeable for Paired Shares,
without giving effect to any anti-dilution adjustments.
<PAGE>
CUSIP No. 855905 20 4 PAGE 20 OF 35 PAGES
In addition, the percentage of Paired Shares held by each Reporting Person
presented below is presented on the basis of the number of Paired Shares
reported to be outstanding as of January 3, 1998 (as reported in Starwood's
Quarterly Report on Form 10-Q, as amended, for the quarter ended September 30,
1997, as adjusted to give effect to the issuance of the Class A EPS and Class B
EPS issued in the Transaction and, where applicable, to give effect to the
issuance of the Realty Partnership Units and Operating Partnership Units issued
to such Reporting Person, assuming the exchange by such Reporting Person of such
Realty Partnership Units and Operating Partnership Units into Paired Shares)
(the "Percentage Basis"). For purposes of this Item 5, the term "Starwood
Transaction Securities" means the shares of Class A EPS, Class B EPS, Realty
Partnership Units and Operating Partnership Units issued in the Transaction.
As of January 2, 1998, WHWE beneficially owned, and Whitehall and WH
Advisors, L.P. may be deemed to beneficially own, 2,320,215 Paired Shares,
representing approximately 3.7% of the outstanding Paired Shares (presented on
the Percentage Basis).
As of January 2, 1998, GS Capital Partners beneficially owned, and GS
Advisors, L.P. may be deemed to beneficially own, 1,862,226 Paired Shares,
representing approximately 3.0% of the outstanding Paired Shares (presented on
the Percentage Basis).
As of January 2, 1998, GS&Co. and GS Group may be deemed to
beneficially own (i) the 4,182,441 Paired Shares that may be deemed to be
beneficially owned by the Reporting Persons as described above, (ii) 200,455
Paired Shares that may be deemed to be beneficially owned by the Other Limited
Partnerships and (iii) 576,380 Paired Shares held in Managed Accounts,
<PAGE>
CUSIP No. 855905 20 4 PAGE 21 OF 35 PAGES
representing in the aggregate approximately 7.8% of the Paired Shares (presented
on the Percentage Basis).
GS& Co. and GS Group each disclaims beneficial ownership of Paired
Shares (i) beneficially owned by the Reporting Persons other than GS&Co. and GS
Group or by the Other Limited Partnerships to the extent of the equity interests
in such Reporting Persons or such Other Limited Partnerships held by persons
other than GS&Co, GS Group or their affiliates and (ii) held in Managed
Accounts. In addition, each of the Reporting Persons disclaims beneficial
ownership of Paired Shares to the extent that the Class A EPS, Class B EPS,
Realty Partnership Units and Operating Partnership Units may be exchanged for
cash rather than Paired Shares at the option of Starwood as described in Item 6.
None of the Reporting Persons, and to the knowledge of the Reporting
Persons, none of the persons listed in Schedule I, Schedule II-A and Schedule
II-B hereto, beneficially own any Paired Shares other than as set forth herein.
(b) Each Reporting Person shares the power to vote or direct the vote and
dispose or direct the disposition of the Paired Shares beneficially owned by
such Reporting Persons as indicated in pages 2 through 8 above.
(c) Except as set forth on Schedule IV and in connection with the
Transaction, none of the Reporting Persons and, to the knowledge of the
Reporting Persons, none of the persons listed on Schedule I, Schedule II-A or
Schedule II-B hereto, has been party to any transaction in the Paired Shares
during the sixty-day period ending on January 2, 1998. Schedule IV sets forth
the transactions in the Paired Shares and certain put options which have been
effected by GS&Co. during the period
<PAGE>
CUSIP No. 855905 20 4 PAGE 22 OF 35 PAGES
from November 3, 1997 through January 2, 1998. The purchases by GS&Co. set forth
in Schedule IV were made in the ordinary course of business on behalf of Managed
Accounts.
(d) Except for clients who may with respect to Paired Shares held in
Managed Accounts, no other person has the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, any
Paired Shares that may be deemed to be beneficially owned by the Reporting
Persons.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Class A EPS and Class B EPS. The holders of the Class A EPS and Class B
EPS have identical voting rights as the holders of Trust Shares, and the shares
of Class A EPS and Class B EPS will be voted as a single class with the
outstanding Trust Shares. The Class A EPS is exchangeable, at the option of the
holder, at any time into Paired Shares on a one-for-one basis, subject to
certain anti-dilution adjustments. During the period beginning on January 2,
1999 and ending on January 2, 2003, the Class B EPS will be exchangeable on a
one-for-one basis, subject to certain anti-dilution adjustments, into Class A
EPS (which, as noted above, will be exchangeable for Paired Shares). The terms
of the Class B EPS also include certain redemption and "call" features that
require or entitle Starwood Trust to redeem or purchase the Class B EPS at a
price, which is subject to certain anti-dilution adjustments, of $38.50 per
share (or, in certain circumstances, Paired Shares having a value equal to such
price) from and after January 2, 2003. In the event that Starwood Trust defaults
in its obligations under the Class B EPS, including the exchange and redemption
provisions, the
<PAGE>
CUSIP No. 855905 20 4 PAGE 23 OF 35 PAGES
holders of a majority of the outstanding Class B EPS will have the right to
designate two additional members of the Board of Trustees of Starwood Trust.
Realty Partnership Units and Operating Partnership Units. Pursuant to
the terms of the Exchange Rights Agreements each Realty Partnership Unit and
Operating Partnership Unit is exchangeable, at the option of the holder, at any
time for one Paired Share (subject to certain anti-dilution adjustments),
subject to the right of Starwood to deliver cash in lieu of such Paired Shares
(or, in certain circumstances, to deliver a promissory note or to cause the
registered sale of such securities and the delivery of the net purchase price
from such sale to the exchanging holder). In addition, during the period
beginning on January 2, 1998 and ending on January 2, 2003, each Realty
Partnership Unit and Operating Partnership Unit will be exchangeable, at the
option of the holder, into one share of Class B EPS (subject to certain
anti-dilution adjustments), subject to the right of Starwood to deliver cash in
lieu of such shares of Class B EPS (or, in certain circumstances, to deliver a
promissory note or to cause the registered sale of such securities and the
delivery of the net purchase price from such sale to the exchanging holder).
Certain Anti-Dilution Adjustments. The number of Paired Shares, shares
of Class A EPS or Class B EPS, as applicable, that will be issuable upon
exchange or redemption of the Starwood Transaction Securities is subject to
adjustment upon (i) the payment of a dividend on the outstanding Trust Shares or
Corporation Shares that is payable in additional Trust Shares or Corporation
Shares, respectively, (ii) the subdivision of the outstanding Trust Shares or
Corporation Shares into a greater number of shares (whether by stock split or
otherwise), (iii) the combination of the outstanding Trust Shares or Corporation
Shares into a smaller number of shares (whether by
<PAGE>
CUSIP No. 855905 20 4 PAGE 24 OF 35 PAGES
reverse stock split or otherwise), or (iv) the issuance of any shares of
Starwood Trust or Starwood Corporation by reclassification of the Trust Shares
or the Corporation Shares, respectively.
Certain Restrictions on Transfer. The Transaction Agreement provides
that until January 2, 1999, the recipients of the Starwood Transaction
Securities will not sell or otherwise transfer ("Transfer") any of the Starwood
Transaction Securities received in the Transaction, or any Paired Shares
received upon conversion of exchange of any thereof (collectively, "Starwood
Securities"), to any person other than to a permitted transferee (defined to
include investors in such recipient or its or their permitted designees) that
agrees to be bound by such restrictions; provided that the Realty Partnership
Units and Operating Partnership Units received in the Transaction may not be
Transferred to any person. The Transaction Agreement further provides that
during each of the first four calendar quarters ending on or after January 2,
1997, no recipient of Starwood Transaction Securities will transfer more than
25% (as such percentage shall be determined on a cumulative basis, including any
Starwood Securities that could have, but were not, Transferred in a previous
fiscal quarter) of the Starwood Securities received by it in the Transaction, or
any Paired Shares received upon exchange of any Starwood Transaction Securities,
to any person other than a permitted transferee. In the event of a change in
control of Starwood, the foregoing restrictions on Transfer will cease to apply.
Registration Rights. Pursuant to the Registration Rights Agreement,
Starwood Trust and Starwood Corporation have granted to certain holders of
Starwood Transaction Securities, including WHWE, GS Capital Partners and the
Other Limited Partnerships, registration rights with respect to the Paired
Shares that may be issued upon exchange of the Starwood Transaction Securities
<PAGE>
CUSIP No. 855905 20 4 PAGE 25 OF 35 PAGES
issued in the Transaction and, in the event of a default by Starwood Trust of
certain of its obligations under the Class B EPS, the shares of Class B EPS
received in the Transaction (collectively, the "Registrable Securities").
Pursuant to the Registration Rights Agreement, any holder or group of
holders of more than 10% of Starwood Transaction Securities issued in the
Transaction may, subject to certain limitations, require Starwood Trust and
Starwood Corporation to file a shelf registration statement with respect to the
Registrable Securities held by such holder and any other holder that desires to
have its Registrable Securities included in such registration statement;
provided that each of the holders shall have the right to make only one election
to require Starwood Trust and Starwood Corporation to file such a shelf
registration statement. The holders of Registrable Securities also have rights,
subject to certain limitations, to require Starwood Trust and Starwood
Corporation to include Registrable Securities in other registrations of equity
securities by Starwood Trust and Starwood Corporation. The holders of
Registrable Securities have, subject to certain limitations, agreed in the
Registration Rights Agreement not to sell Paired Shares during the 90-day period
(or the 45-day period if there has been another "blackout" period during the
preceding 365 days) following the date on which another registration statement
in respect of securities of Starwood has been declared effective. The
Registration Rights Agreement provides that Starwood Trust and Starwood
Corporation will indemnify the selling holders for certain liabilities,
including liabilities arising under the Securities Act of 1933.
<PAGE>
CUSIP No. 855905 20 4 PAGE 26 OF 35 PAGES
The Registration Rights Agreement provides that all costs and expenses
(other than underwriters' discounts and commissions and the fees and expenses of
counsel to the selling holders) incurred in connection with the registration of
Registrable Securities pursuant to the Registration Rights Agreement shall be
paid by Starwood Trust and Starwood Corporation.
The foregoing discussion is qualified in its entirety by reference to
the Transaction Agreement, the Registration Rights Agreement, the amendment to
the Declaration of Trust of Starwood Trust creating the Class A EPS and Class B
EPS and the Exchange Rights Agreements of Starwood Realty Partnership and
Starwood Operating Partnership which are filed as exhibits hereto, each of which
is incorporated by reference in their entirety into this Item 6.
Item 7. Material to be Filed as Exhibits.
Exhibit No. Exhibit Page
1 Transaction Agreement, dated as of September 8,
1997, among WHWE, Woodstar, NACC, Bartels, the
L.L.C., Worldwide, W&S Lauderdale Corp., W&S
Seattle Corp., Westin St. John Hotel Company,
Inc., W&S Denver Corp., W&S Atlanta Corp.,
Starwood Trust, Starwood Realty Partnership,
Starwood Corporation and Starwood Operating
Partnership (incorporated by reference to Exhibit
2 of the current report on Form 8-K of Starwood,
dated September 9, 1997).
2 Registration Rights Agreement , dated as of
January 2, 1998 among Starwood Trust, Starwood
Corporation, the LLC, WHWE, Woodstar, and Bartels.
<PAGE>
CUSIP No. 855905 20 4 PAGE 27 OF 35 PAGES
3 Exchange Rights Agreement, dated as of January 2,
1998, between Starwood Trust, Starwood Realty
Partnership and certain Limited Partners of
Starwood Realty Partnership named therein.
4 Exchange Rights Agreement, dated as of January 2,
1998, between Starwood Trust, Starwood Operating
Partnership and certain limited partners of
Starwood Operating Partnership therein.
5 Exhibit A to Articles of Merger between Starwood
Trust and Worldwide (which amends the Declaration
of Trust of Starwood Trust to provide the terms of
the Class A EPS and the Class B EPS).
6 Certificate of Admission to SLT Realty Limited
Partnership, effective January 2, 1998 between
Starwood Realty Partnership, WHWE, Woodstar and
Nomura.
7 Certificate of Admission to SLC Operating Limited
Partnership, effective January 2, 1998 between
Starwood Operating Partnership, WHWE, Woodstar and
Nomura.
8 Joint Filing Agreement
<PAGE>
CUSIP No. 855905 20 4 PAGE 28 OF 35 PAGES
SIGNATURE
After reasonable inquiry and to our best knowledge and belief, we
certify that the information set forth in this statement is true complete and
correct.
Dated: January 12, 1998
WHWE L.L.C.
By: Whitehall Street Real Estate
Limited Partnership V,
Member and Manager
By: WH Advisors, L.P. V,
its general partner
By: WH Advisors, Inc. V,
its general partner
By: /s/ Elizabeth A. O'Brien
-----------------------------------------
Name: Elizabeth A. O'Brien
Title: Vice President
WHITEHALL STREET REAL ESTATE
LIMITED PARTNERSHIP V
By: WH Advisors, L.P. V,
its general partner
By: WH Advisors, Inc. V,
its general partner
By: /s/ Elizabeth A. O'Brien
-----------------------------------------
Name: Elizabeth A. O'Brien
Title: Vice President
<PAGE>
CUSIP No. 855905 20 4 PAGE 29 OF 35 PAGES
WH ADVISORS, L.P. V,
By: WH Advisors, Inc. V,
its general partner
By: /s/ Elizabeth A. O'Brien
-----------------------------------------
Name: Elizabeth A. O'Brien
Title: Vice President
GS CAPITAL PARTNERS, L.P.
By: GS Advisors, L.P.,
its general partner
By: GS Advisors, Inc.,
its general partner
By: /s/ Richard A. Friedman
-----------------------------------------
Name: Richard A. Friedman
Title: President
GS ADVISORS, L.P.
By: GS Advisors, Inc.,
its general partner
By: /s/ Richard A. Friedman
-----------------------------------------
Name: Richard A. Friedman
Title: President
<PAGE>
CUSIP No. 855905 20 4 PAGE 30 OF 35 PAGES
THE GOLDMAN SACHS GROUP, L.P.
By: The Goldman Sachs Corporation,
its general partner
By: /s/ Richard A. Friedman
----------------------------------------
Name: Richard A. Friedman
Title: Executive Vice President
GOLDMAN, SACHS & CO.
By: /s/ Richard A. Friedman
-----------------------------------------
Name: Richard A. Friedman
Title: Managing Director
<PAGE>
CUSIP No. 855905 20 4 PAGE 31 OF 35 PAGES
SCHEDULE I
The name of each director of The Goldman Sachs Corporation and The
Goldman, Sachs & Co. L.L.C. and of each member of the executive committees of
The Goldman Sachs Corporation, The Goldman Sachs & Co. L.L.C., The Goldman Sachs
Group, L.P. and Goldman, Sachs & Co. is set forth below.
The business address of each person listed below except John A. Thain
and John L. Thornton is 85 Broad Street, New York, NY 10004. The business
address of John A. Thain and John L. Thornton is 133 Fleet Street, London EC4A
2BB, England. Each person is a citizen of the United States of America. The
present principal occupation or employment of each of the listed persons is as a
managing director of Goldman, Sachs & Co. or another Goldman Sachs operating
entity and as a member of the executive committee.
Jon Z. Corzine
Henry M. Paulson, Jr.
Roy J. Zuckerberg
Robert J. Hurst
John A. Thain
John L. Thornton
<PAGE>
CUSIP No. 855905 20 4 PAGE 32 OF 35 PAGES
SCHEDULE II-A
The name, position and present principal occupation of each director and
executive officer of WH Advisors, Inc. V, the sole general partner of WH
Advisors, L.P. V, which is the sole general partner of Whitehall Street Real
Estate Limited Partnership V, are set forth below.
The business address of all the executive officers and directors listed
below except G. Douglas Gunn, Todd A. Williams and Richard E. Georgi III is 85
Broad Street, New York, New York 10004. The business address of G. Douglas Gunn
and Todd A. Williams is 100 Crescent Court, Suite 1000, Dallas, TX 75201. The
business address of Richard E. Georgi III is 133 Fleet Street, London EC4A 2BB,
England.
All executive officers and directors listed below are United States
citizens.
<TABLE>
Name Position Present Principal Occupation
- ---- -------- ----------------------------
<S> <C> <C>
Rothenberg, Stuart M. Director/Vice President Managing Director of
Goldman, Sachs & Co.
Neidich, Daniel M. President Managing Director of
Goldman, Sachs & Co.
O'Brien, Elizabeth A. Vice President/Assistant Vice President of
Secretary Goldman, Sachs & Co.
Georgi III, Richard E. Vice President Vice President of
Goldman Sachs International
Weil, David M. Vice President Vice President of
Goldman, Sachs & Co.
Rosenberg, Ralph F. Vice President/Assistant Vice President of
Secretary Goldman, Sachs & Co.
Williams, Todd A. Vice President/Assistant Managing Director of
Secretary/Assistant Treasurer Goldman, Sachs & Co.
Naughton, Kevin D. Vice President/ Vice President of
Secretary/Treasurer Goldman, Sachs & Co.
Siskind, Edward M. Vice President/Assistant Vice President of
Treasurer Goldman, Sachs & Co.
Klingher, Michael K. Vice President Vice President of
Goldman, Sachs & Co.
Gunn, G. Douglas Vice President Vice President of
Goldman, Sachs & Co.
</TABLE>
<PAGE>
CUSIP No. 855905 20 4 PAGE 33 OF 35 PAGES
SCHEDULE II-B
The name, position and present principal occupation of each director and
executive officer of GS Advisors, Inc., the sole general partner of GS Advisors,
L.P., which is the sole general partner of GS Capital Partners, L.P., are set
forth below.
The business address of all the executive officers and directors listed
below except Henry Cornell and Barry Volpert is 85 Broad Street, New York, New
York 10004. The business address of Henry Cornell is 3 Garden Road, Hong Kong.
The business address of Barry Volpert is 133 Fleet Street, London EC4A 2BB,
England.
All executive officers and directors listed below are United States
citizens.
<TABLE>
Name Position Present Principal Occupation
- ---- -------- ----------------------------
<S> <C> <C>
Richard A. Friedman Director/President Managing Director of
Goldman, Sachs & Co.
Terence M. O'Toole Director/Vice President Managing Director of
Goldman, Sachs & Co.
Elizabeth S. Cogan Treasurer Managing Director of
Goldman, Sachs & Co.
Joseph H. Gleberman Director/ Vice President Managing Director of
Goldman, Sachs & Co.
Henry Cornell Vice President Managing Director of
Goldman Sachs (Asia) L.L.C.
Barry S. Volpert Director/Vice President Managing Director of
Goldman Sachs International
Eve M. Gerriets Vice President/Secretary Vice President of
Goldman, Sachs & Co.
David J. Greenwald Assistant Secretary Vice President of
Goldman, Sachs & Co.
C. Douglas Fuge Assistant Treasurer Managing Director of
Goldman, Sachs & Co.
Katherine B. Enquist Vice President Vice President of
Goldman, Sachs & Co.
</TABLE>
<PAGE>
CUSIP No. 855905 20 4 PAGE 34 OF 35 PAGES
SCHEDULE III
In settlement of Securities and Exchange Commission Administrative
Proceeding File No. 3-7646 In the Matter of the Distribution of Securities
Issued by Certain Government Sponsored Enterprises, Goldman, Sachs & Co. (the
"Firm"), along with numerous other securities firms, without admitting or
denying any of the findings of the Securities and Exchange Commission (the
"SEC") consented to the entry of an Order, dated January 16, 1992. The SEC found
that the Firm, in connection with its participation in the primary distributions
of certain unsecured debt securities issued by Government Sponsored Enterprises
("GSEs"), made and kept certain records that did not accurately reflect the
Firm's customers' orders for GSEs' securities and/or offers, purchases or sales
by the Firm of the GSEs' securities effected by the Firm in violation of Section
17(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and 17 C.F.R. Sections 240.17a-3 and 240.17a-4.
The Firm was ordered to cease and desist from committing or causing future
violations of the aforementioned sections of the Exchange Act in connection with
any primary distributions of unsecured debt securities issued by the GSEs, pay a
civil money penalty to the United States Treasury in the amount of $100,000 and
maintain policies and procedures reasonably designed to ensure the Firm's future
compliance with the aforementioned sections of the Exchange Act in connection
with any primary distributions of unsecured debt securities issued by the GSEs.
In Securities and Exchange Commission Administrative Proceeding File No.
3-8282 In the Matter of Goldman, Sachs & Co., the Firm, without admitting or
denying any of the SEC's allegations, settled administrative proceedings
involving alleged books and records and supervisory violations relating to
eleven trades of U.S. Treasury securities in the secondary markets in 1985 and
1986. The SEC alleged that the Firm had failed to maintain certain records
required pursuant to Section 17(a) of the Exchange Act and had also failed to
supervise activities relating to the aforementioned trades in violation of
Section 15(b)(4)(E) of the Exchange Act.
The Firm was ordered to cease and desist from committing or causing any
violation of the aforementioned sections of the Exchange Act, pay a civil money
penalty to the SEC in the amount of $250,000 and establish policies and
procedures reasonably designed to assure compliance with Section 17(a) of the
Exchange Act and Rules 17a-3 and 17a-4 thereunder.
<PAGE>
CUSIP No. 855905 20 4 PAGE 35 OF 35 PAGES
SCHEDULE IV
Starwood Lodging Hotels and Resorts Trust
<TABLE>
<CAPTION>
Cusip No. Purchases Sales Price Trade Date Settlement Date
- ------------ ------------ ------- --------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
855905-20-4 1,000 52 13/16 13-Nov-97 18-Nov-97
855905-20-4 2,500 54 1/4 13-Nov-97 18-Nov-97
855905-20-4 1,500 53 15/16 13-Nov-97 18-Nov-97
855905-20-4 1,000 53 5/16 12-Dec-97 17-Dec-97
855905-20-4 250 55 5/16 12-Nov-97 17-Nov-97
855905-20-4 1,000 55 13-Nov-97 18-Nov-97
855905-20-4 1,000 52 5/8 11-Dec-97 16-Dec-97
855905-20-4 1,000 55 13-Nov-97 18-Nov-97
855905-20-4 1,000 52 5/8 11-Dec-97 16-Dec-97
855905-20-4 500 59 2/4 5-Nov-97 10-Nov-97
855905-20-4 2,000 58 3/4 7-Nov-97 13-Nov-97
855905-20-4 1,800 58 9/16 7-Nov-97 13-Nov-97
855905-20-4 200 58 5/8 7-Nov-97 13-Nov-97
855905-20-4 1,500 52 9/16 24-Nov-97 28-Nov-97
855905-20-4 600 52 2/4 11-Dec-97 16-Dec-97
855905-20-4 500 52 2/4 11-Dec-97 16-Dec-97
855905-20-4 400 52 3/8 17-Dec-97 22-Dec-97
855905-20-4 400 52 3/8 17-Dec-97 22-Dec-97
855905-20-4 750 52 15/16 15-Dec-97 18-Dec-97
855905-20-4 1,000 52 7/8 15-Dec-97 18-Dec-97
855905-20-4 1,800 53 3/8 12-Dec-97 17-Dec-97
855905-20-4 2,250 57 3/4 31-Dec-97 6-Jan-98
855905-20-4 1,085 56.188 1-Dec-97 4-Dec-97
855905-20-4 1,085 56.188 1-Dec-97 4-Dec-97
855905-9Q-J 50 3 3/4 17-Nov-97 18-Nov-97
855905-9W-K 3 15/16 20-Nov-97 21-Nov-97
855905-9W-K 17 1 3/8 21-Nov-97 24-Nov-97
855905-9X-J 10 2 13-Nov-97 14-Nov-97
- ------------ ------------ ------- --------- ----------- ---------------
</TABLE>
EXHIBIT 5
EXHIBIT A
to
ARTICLES OF MERGER
*******************************************
Pursuant to the authority granted to the Board of Trustees of the Trust
under Section 6.1 of the Amended and Restated Declaration of Trust of the Trust,
as heretofore amended (the "Declaration"), the Board of Trustees of the Trust,
by resolution adopted by the Board of Trustees of the Trust on September 8,
1997, classified and designated 30,000,000 shares of beneficial interest in the
Trust as Class A Exchangeable Preferred Shares, par value $.01 per share, with
the following preferences, exchange and other rights, voting powers,
restrictions, limitations as to dividends and other distributions,
qualifications and terms and conditions of redemption, such classification and
designation to become effective upon the effective time of the merger of Westin
Hotels & Resorts Worldwide, Inc., a Delaware corporation, with and into the
Trust:
6.15 Class A Exchangeable Preferred Shares Articles Supplementary
6.15.1. NUMBER OF SHARES AND DESIGNATION.
The class of shares of beneficial interest in the Trust being created
by these Articles Supplementary shall be designated as "Class A Exchangeable
Preferred Shares", par value $.01 per share ("Class A EPS"), and 30,000,000
shall be the number of shares of Class A EPS constituting such class.
6.15.2. DEFINITIONS.
For purposes of the Class A EPS, the following terms have the meanings
indicated:
"Affiliate" shall mean with respect to any Person, any other Person
which directly or indirectly controls, is controlled by or is under common
control with such Person.
"Articles Supplementary" shall mean either this Article 6.15 or Article
6.16, as the case may be, of the Declaration of Trust.
"Board of Trustees" shall mean the Board of Trustees of the Trust or
any committee authorized by the Board of Trustees from time to time to
exercise any of its powers or perform any of its responsibilities with
respect to the Class A EPS.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New York,
New York are not required to be open.
"Cash Equivalent" of Paired Shares or any other shares of beneficial
interest or other securities of the Trust or any other issuer as of any
date shall mean an amount of
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cash equal to (i) the average of the daily Current Market Prices per unit
of such Paired Shares or other shares or securities during the five (5)
consecutive Trading Days immediately preceding such date or (ii) if the
Paired Shares or such other shares or securities are not publicly traded on
such date, the fair market value of such Paired Shares or other securities
as of such date as determined by the Board of Trustees in good faith
(subject to the rights of the holders of the Class A EPS to request a
valuation from a nationally recognized investment banking firm as provided
in paragraph (g)(v) of Article 6.15.5 hereof).
"Class A Articles Supplementary" shall mean this Article 6.15.
"Class A Dividend Replacement Shares" shall have the meaning set forth
in paragraph (d)(v) of Article 6.15.5 hereof.
"Class A EPS" shall have the meaning set forth in Article 6.15.1
hereof.
"Class A Exchange Notice" shall have the meaning set forth in paragraph
(a)(i) of Article 6.15.5 hereof.
"Class A Exchange Right" shall have the meaning set forth in paragraph
(a)(i) of Article 6.15.5 hereof.
"Class A Liquidation Preference" shall have the meaning set forth in
paragraph (b) of Article 6.15.4 hereof.
"Class A Liquidation Participation Right" shall have the meaning set
forth in paragraph (a) of Article 6.15.4 hereof.
"Class A Participation Dividend" shall have the meaning set forth in
paragraph (a) of Article 6.15.3 hereof.
"Class A Preferred Dividend" shall have the meaning set forth in
paragraph (a) of Article 6.15.3 hereof.
"Class A Underlying Corporation Shares" as of any time shall mean the
Corporation Shares component of the Class A Underlying Paired Shares as of
such time.
"Class A Underlying Paired Shares" as of any time shall mean the Paired
Shares (including, unless otherwise expressly provided herein, fractional
units of Paired Shares) for which each share of Class A EPS is then
exchangeable upon exercise of the Class A Exchange Right but excluding
(except for the purposes of an actual exercise of the Class A Exchange
Right) any Class A Dividend Replacement Shares.
"Class A Underlying Trust Shares" as of any time shall mean the Trust
Shares component of the Class A Underlying Paired Shares as of such time.
2
<PAGE>
"Class B Articles Supplementary" shall mean Article 6.16 of the
Declaration of Trust pursuant to which the Trust has classified and
designated 15,000,000 shares of beneficial interest in the Trust as "Class
B Exchangeable Preferred Shares".
"Class B EPS" shall mean the Class B Exchangeable Preferred Shares, par
value $0.01 per share, of the Trust created pursuant to the Class B
Articles Supplementary.
"Class B Liquidation Preference" shall have the meaning set forth in
paragraph (b) of Articles 6.16.4 hereof.
"Class B Liquidation Participation Right" shall have the meaning set
forth in paragraph (a) of Article 6.16.4 hereof.
"Class B Participation Dividend" shall have the meaning set forth in
paragraph (a) of Article 6.16.3 hereof.
"Class B Preferred Dividend" shall have the meaning set forth in
paragraph (a) of Article 6.16.3 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Conditionally Declared Class A Dividend" shall have the meaning set
forth in paragraph (b)(i) of Article 6.15.3 hereof.
"Constituent Person" shall have the meaning set forth in paragraph
(e)(ii) of Article 6.15.5 hereof.
"Corporation" shall mean Starwood Lodging Corporation, a Maryland
corporation, and any successor.
"Corporation Common Adjustment Event" shall mean any of the following
events that occurs after the Issue Date:
(i) The payment by the Corporation of a dividend on the
outstanding Corporation Shares that is payable in additional
Corporation Shares;
(ii) The subdivision of the outstanding Corporation Shares into a
greater number of shares (whether by share split or otherwise);
(iii) The combination of the outstanding Corporation Shares into a
smaller number of shares (whether by reverse share split or otherwise);
or
(iv) The issuance of any shares of stock of the Corporation by
reclassification of the Corporation Shares.
3
<PAGE>
"Corporation Common Distribution" shall mean any dividend or
distribution paid or made by the Corporation (including, without
limitation, any distribution of assets on any liquidation, dissolution or
winding up of the Corporation) in respect of the Corporation Shares, other
than a dividend or distribution that constitutes a Corporation Common
Adjustment Event. In addition, a distribution to the holders of Corporation
Shares of rights to subscribe for or purchase additional Corporation Shares
under a shareholders protective rights plan or agreement shall not be
deemed to constitute a Corporation Common Distribution to the extent that
the Corporation makes provision so that such rights, to the extent still
outstanding with respect to the outstanding Corporation Shares, shall be
issued to the holders of any Corporation Shares issued upon exercise of the
Class A Exchange Right (and, to the extent applicable, shall attach to such
Corporation Shares) in an amount and manner and to the extent provided in
such shareholders protective rights plans or agreements with respect to
already outstanding Corporation Shares.
"Corporation Shares" shall mean the shares of common stock, par value
$.01 per share, of the Corporation or any stock of the Corporation into
which such common stock may hereafter be changed.
"Current Market Price" of publicly traded Paired Shares or any other
shares of beneficial interest or other securities of the Trust or any other
issuer as of any Trading Day shall mean the last reported sales price,
regular way, on such day, or, if no sale takes place on such day, the
average of the reported closing bid and asked prices on such day, regular
way, in either case as reported on the NYSE or, if such shares or other
securities are not listed or admitted for trading on the NYSE, on the
principal national securities exchange on which such shares or other
securities are listed or admitted for trading or, if not listed or admitted
for trading on any national securities exchange, on the NASDAQ National
Market or, if such shares or other securities are not quoted on such NASDAQ
National Market, the average of the closing bid and asked prices on such
day in the over-the-countermarket as reported by NASDAQ or, if bid and
asked prices for such shares or other securities on such day shall not have
been reported through NASDAQ, the average of the bid and asked prices on
such day as furnished by any NYSE member firm regularly making a market in
such shares or other securities selected for such purpose by the Chief
Executive Officer or Chief Financial Officer of the Trust or the Board of
Trustees.
"Declaration" shall mean the Amended and Restated Declaration of Trust
of the Trust, as amended from time to time.
"Delivered Shares" shall have the meaning set forth in paragraph
(a)(ii) of Article 6.15.5 hereof.
"Dividend Correspondence Ratio" shall have the meaning set forth in
paragraph (b)(i) of Article 6.15.3 hereof.
"Excess Shares" shall have the meaning set forth in paragraph (a)(ii)
of Article 6.15.5 hereof.
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<PAGE>
"Exchange Election Notice" shall have the meaning set forth in
paragraph (a)(i) of Article 6.15.5 hereof.
"Exchange Issuance Date" shall have the meaning set forth in paragraph
(b) of Article 6.15.5 hereof.
"Exchange Promissory Note" shall mean an unsecured promissory note of
the Trust in such form as the Trust shall reasonably prescribe with a
maturity date ninety (90) days after the date of issuance of such note.
Such Exchange Promissory Note shall bear interest in an amount equal to the
amount of any dividends paid during the period that such note remains
outstanding on a number of Paired Shares equal to the number of Excess
Shares for which such Exchange Promissory Note is being substituted
pursuant to paragraph (a)(ii) of Article 6.15.5 hereof, which interest
shall be payable on the dates of payment of the corresponding dividends.
"Exchange Ratio" shall have the meaning set forth in paragraph (d)(i)
of Article 6.15.5 hereof.
"Issue Date" shall mean the first date on which any shares of Class A
EPS are issued by the Trust.
"Junior Dividend" means a dividend payable in respect of any class or
series of shares of beneficial interest in the Trust over which the Class A
Preferred Dividends have preference or priority as to the payment of
dividends, including, without limitation, any Trust Common Dividend, any
Class A Participation Dividend and any Class B Participation Dividend.
"Junior Liquidating Distribution" shall mean any distribution of assets
of the Trust in connection with a Liquidation Event to holders of any class
or series of shares of beneficial interest in the Trust over which the
Class A Liquidation Preference has preference or priority in the
distribution of assets upon the occurrence of such Liquidation Event,
including, without limitation, any such distribution of assets to holders
of Trust Shares or in respect of the Class A Liquidation Participation
Right or the Class B Liquidation Participation Right.
"Junior Shares" shall mean the Trust Shares and any other class or
series of shares of beneficial interest in the Trust now or hereafter
issued and outstanding over which the Class A Preferred Dividends have full
preference or priority in the payment of dividends or over which the Class
A Liquidation Preference has full preference or priority in the
distribution of assets on the occurrence of any Liquidation Event,
including, without limitation, the Trust Shares but excluding the Class B
EPS.
"Liquidation Date" shall have the meaning set forth in paragraph (a) of
Article 6.15.4 hereof.
5
<PAGE>
"Liquidation Event" shall mean any liquidation, dissolution or winding
up of the affairs of the Trust, whether voluntary or involuntary. For the
purposes hereof, (i) a consolidation or merger of the Trust with one or
more entities, (ii) a statutory share exchange and (iii) a sale or transfer
of all or substantially all of the Trust's assets shall not be deemed to be
a Liquidation Event.
"Non-Electing Shares" shall have the meaning set forth in paragraph
(e)(ii) of Article 6.15.5 hereof.
"NYSE" shall mean the New York Stock Exchange.
"Offered Shares" shall have the meaning set forth in paragraph (a)(ii)
of Article 6.15.5 hereof.
"Ownership Limit" shall have the meaning set forth in Section 6.12 of
the Declaration.
"Paired Shares" shall mean units consisting of one Trust Share paired
with one Corporation Share (subject to adjustment as contemplated provided
in paragraph (e) of Article 6.15.5 hereof) and represented by a single
share certificate, as provided in the Pairing Agreement dated as of June
25, 1980, between the Trust and the Corporation, as amended from time to
time.
"Paired Shares Adjustment Event" shall have the meaning set forth in
paragraph (d)(i) of Article 6.15.5 hereof.
"Parity Liquidation Preference" shall mean the liquidation preference
of any class or series of shares of beneficial interest in the Trust that
ranks on a parity with the Class A Liquidation Preference.
"Parity Preferred Dividend" shall mean any dividend payable in respect
of any class or series of shares of beneficial interest in the Trust that
ranks on a parity in right of payment with the Class A Preferred Dividends,
whether or not the dividend rate, dividend payment dates, liquidation
preference, redemption rights, conversion or exchange rights or other
features of such class or series are different from those of the Class A
EPS.
"Person" shall mean any individual, firm, partnership, corporation,
limited liability company or other entity, and shall include any successor
(by merger or otherwise) of such entity.
"Registered Sale Option" shall have the meaning set forth in paragraph
(a)(ii) of Article 6.15.5 hereof.
"REIT Rules" shall mean the requirements (i) for the Trust to qualify
as a real estate investment trust under the Code as set forth in Sections
856(a)(5) and 856(a)(6) of the Code and (ii) for the Corporation or any
affiliate of the Corporation which is a tenant
6
<PAGE>
of the Trust to not be treated as a related party pursuant to Section
856(d)(2)(B) of the Code.
"Requested Shares" shall have the meaning set forth in paragraph
(a)(ii) of Article 6.15.5 hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Trust in its accounting
ledgers of any accounting or bookkeeping entry which indicates, pursuant to
a declaration of dividends or other distribution by the Board of Trustees,
the allocation of funds to be so paid on any series or class of shares of
beneficial interest of the Trust; provided, however, that if any funds for
any class or series of Junior Shares or any class or series of shares of
beneficial interest of the Trust ranking on a parity with the Class A EPS
as to the payment of dividends are placed in a separate account of the
Trust or delivered to a disbursing, paying or other similar agent, then
"set apart for payment" with respect to the Class A EPS shall mean placing
such funds in a separate account or delivering such funds to a disbursing,
paying or similar agent.
"Trading Day" with respect to publicly traded Paired Shares or any
other shares of beneficial interest or other securities of the Trust or any
other issuer shall mean any day on which the shares or other securities in
question are traded on the NYSE, or if such shares or other securities are
not listed or admitted for trading on the NYSE, on the principal national
securities exchange on which such shares or other securities are listed or
admitted, or if not listed or admitted for trading on any national
securities exchange, on the NASDAQ National Market, or if such shares or
other securities are not quoted on such NASDAQ National Market, in the
applicable securities market in which such shares or other securities are
traded.
"Transaction" shall have the meaning set forth in paragraph (e)(ii) of
Article 6.15.5 hereof.
"Transfer Agent" shall mean ChaseMellon Shareholder Services, L.L.C.
(or any successor thereof), or such other agent or agents of the Trust as
may be designated by the Board of Trustees or their designee as the
transfer agent for the Class A EPS and the Class B EPS.
"Trust" shall mean Starwood Lodging Trust, a Maryland real estate
investment trust, and any successor.
"Trust Common Adjustment Event" shall mean any of the following events
that occurs after the Issue Date:
(i) The payment by the Trust of a dividend on the outstanding
Trust Shares that is payable in additional Trust Shares;
7
<PAGE>
(ii) The subdivision of the outstanding Trust Shares into a
greater number of shares (whether by share split or otherwise);
(iii) The combination of the outstanding Trust Shares into a
smaller number of shares (whether by reverse share split or otherwise);
or
(iv) The issuance of any shares of beneficial interest in the
Trust by reclassification of the Trust Shares.
"Trust Common Dividend" shall mean any dividend or distribution paid or
made by the Trust pro rata on the outstanding Trust Shares other than (i) a
distribution of assets of the Trust upon the occurrence of a Trust
Liquidation Event or (ii) on a dividend or distribution that constitutes a
Trust Common Adjustment Event. In addition, a distribution to the holders
of shares of beneficial interest in the Trust of rights to subscribe for or
purchase additional Trust Shares under a shareholders protective rights
plan or agreement or any similar plan or agreement shall not be deemed to
constitute a Trust Common Dividend to the extent that the Trust makes
provision so that such rights, to the extent still outstanding with respect
to the outstanding Trust Shares, shall be issued to the holders of any
Trust Shares issued upon exercise of the Class A Exchange Right (and, to
the extent applicable, shall attach to such Trust Shares) in an amount and
manner and to the extent provided in such plans or agreements with respect
to already outstanding Trust Shares.
"Trust Shares" shall mean the common shares of beneficial interest in
the Trust, par value $.01 per share, or any shares of beneficial interest
in the Trust into which such common shares may be changed.
"Westin Transaction Agreement" shall mean the Transaction Agreement
dated as of September 8, 1997 among WHWE L.L.C., Woodstar Investor
Partnership, Nomura Asset Capital Corporation, Juergen Bartels, W&S Hotel
L.L.C., Westin Hotels & Resorts Worldwide, Inc., W&S Lauderdale Corp., W&S
Seattle Corp., Westin St. John Hotel Company, Inc., W&S Denver Corp., W&S
Atlanta Corp., the Trust, SLT Realty Limited Partnership, the Corporation
and SLC Operating Limited Partnership, as such agreement may be amended
from time to time.
"Westin Transaction Securities" shall mean, with respect to a holder of
Class A EPS or an Affiliate thereof, any shares of Class A EPS, shares of
Class B EPS, Starwood Operating Partnership Units and Starwood Realty
Partnership Units (as such terms are defined in the Westin Transaction
Agreement) received by such holder or Affiliate pursuant to the Westin
Transaction Agreement, together with any shares of Class B EPS, Class A EPS
or Paired Shares (or other securities) issued upon exchange or conversion of
any such Westin Transaction Securities.
8
<PAGE>
6.15.3. DIVIDENDS.
(a) In General. The holders of Class A EPS will be entitled (i) to
receive a preferred dividend payable as described in paragraph (b) below (a
"Class A Preferred Dividend"), when, as and if declared by the Board of Trustees
out of assets of the Trust legally available for that purpose, based on the
payment of any Corporation Common Distribution and (ii) to participate on the
basis described in paragraph (c) below in any Trust Common Dividend, when, as
and if declared by the Board of Trustees out of assets of the Trust available
for that purpose (a "Class A Participation Dividend").
(b) Class A Preferred Dividend.
(i) Upon the payment by the Corporation of any Corporation Common
Distribution prior to the occurrence of a Liquidation Event, the right to
receive a Class A Preferred Dividend will automatically accrue with respect to
each share of Class A EPS as of the payment date for such Corporation Common
Distribution in an amount equal to the value of the Corporation Common
Distribution paid on each Corporation Share multiplied by the applicable
Dividend Correspondence Ratio described below. To the extent that any
Corporation Common Distribution consists of securities or other property (other
than cash), the Trust will have the option of paying the corresponding Class A
Preferred Dividend either (A) in the same form as such Corporation Common
Distribution (i.e., by delivery of the same type of securities or other property
as distributed in the Corporation Common Distribution), (B) in cash in an amount
equal to the fair market value of such securities or other property as
determined in good faith by the Board of Trustees (subject to the rights of the
affected holders of Class A EPS to request a valuation from a nationally
recognized investment banking firm as provided in paragraph (g)(v) of Article
6.15.5 hereof) or (C) a combination thereof. Each Class A Preferred Dividend
will be cumulative from the payment date for the related Corporation Common
Distribution and will be payable to holders of record of Class A EPS on such
record date as shall be fixed by the Board of Trustees, which record date shall
be the same as the record date for the corresponding Class B Preferred Dividend
that will have accrued or will accrue based on such Corporation Common
Distribution and not earlier than the record date for such Corporation Common
Distribution. The Board of Trustees may, at any time between the declaration of
a Corporation Common Distribution and the related payment date, declare a
corresponding Class A Preferred Dividend conditioned on the actual payment of
such Corporation Common Distribution (any such Class A Preferred Dividend being
sometimes referred to herein as a "Conditionally Declared Class A Dividend"
until such time as the corresponding Corporation Common Distribution is paid, at
which time it will no longer be a Conditionally Declared Class A Dividend but
will instead be deemed to be an accrued Class A Preferred Dividend). The
"Dividend Correspondence Ratio" for the purposes of determining the amount of
any Class A Preferred Dividend shall mean the number of Class A Underlying
Corporation Shares for which each share of Class A EPS is exchangeable as of the
record date for the related Corporation Common Distribution upon exercise of the
Class A Exchange Right, as such number shall be proportionately adjusted to
reflect any share dividend, share split, reverse share split or other
combination or subdivision of the Class A EPS that becomes effective between
(or, if the record date for such event is different from the effective date
therefor, that has a record date that falls between) (A) the record date for
9
<PAGE>
the Corporation Common Distribution and (B) the date of payment of such
Corporation Common Distribution or, if earlier, the record date for such Class A
Preferred Dividend.
(ii) So long as any shares of Class A EPS are outstanding: (A) no
Junior Dividend may be declared or paid or set apart for payment unless all
accrued Class A Preferred Dividends and Conditionally Declared Class A Dividends
have been or are concurrently declared and paid, or declared and a sum
sufficient for the payment thereof set apart for payment, (B) no Parity
Preferred Dividend shall be declared or paid or set aside for payment unless a
ratable portion of all accrued but unpaid Class A Preferred Dividends and
Conditionally Declared Class A Dividends has been or is concurrently declared
and paid, or declared and a sum sufficient for the payment thereof set apart for
payment (with such ratable portion being based on the portion of the accrued but
unpaid Parity Preferred Dividends being paid) and (C) no Junior Shares may be
redeemed, purchased or otherwise acquired by the Trust (other than a redemption,
purchase or other acquisition of Trust Shares made for purposes of and in
compliance with requirements of an employee incentive or benefit plan of the
Trust or any subsidiary or upon any exchange or redemption of other securities
at the option of the holders thereof, or as required or permitted under Article
VI of the Declaration) for consideration (or any moneys paid or made available
for a sinking fund for the redemption of any Junior Shares), directly or
indirectly (except for conversion into or exchange for Junior Shares) unless all
accrued Class A Preferred Dividends and Conditionally Declared Class A Dividends
have been or are concurrently declared and paid, or declared and a sum
sufficient for the payment thereof set apart for payment.
(c) Class A Participation Dividend. No Trust Common Dividend may be
declared in respect of the Trust Shares unless the Board of Trustees
concurrently declares a Class A Participation Dividend entitling each share of
Class A EPS to receive an amount equal to the amount of the Trust Common
Dividend declared on each Trust Share multiplied by the number of Class A
Underlying Trust Shares for which each share of Class A EPS is then exchangeable
upon exercise of the Class A Exchange Right as of the record date for such Trust
Common Dividend. Such Class A Participation Dividend shall be payable on the
same date on which the corresponding Trust Common Dividend is payable, shall be
payable in the same form as the corresponding Trust Common Dividend and shall be
paid to holders of record of the Class A EPS on the same record date as is fixed
by the Board of Trustees for the payment of such Trust Common Dividend.
6.15.4. LIQUIDATION RIGHTS.
(a) In General. Upon the occurrence of any Liquidation Event, the
holders of Class A EPS will be entitled (i) to receive out of the assets of the
Trust legally available for liquidating distributions to holders of shares of
beneficial interests in the Trust, prior to the making of any Junior Liquidating
Distribution, a liquidating distribution in an amount equal to the Class A
Liquidation Preference described in paragraph (b) below determined as of the
effective date of such Liquidation Event or, if no effective date is provided,
as of the record date of the first liquidating distribution relating to such
Liquidation Event (in either such case, the "Liquidation Date") and (ii) to
participate on the basis described in paragraph (c) below in any liquidating
distribution to holders of Trust Shares (the "Class A Liquidation Participation
Right"). In determining whether a distribution (other than upon the occurrence
of a Liquidation
10
<PAGE>
Event), by dividend, redemption or other acquisition of shares of beneficial
interest in the Trust or otherwise, is permitted under Maryland law, amounts
that would be needed, if the Trust were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon dissolution of the holders
of Class A EPS whose preferential rights upon dissolution are senior to those
receiving the distribution shall not be added to the Trust's total liabilities.
(b) Class A Liquidation Preference. The "Class A Liquidation
Preference" of a share of Class A EPS as of the applicable Liquidation Date
shall mean the sum of (A) the fair market value (as determined in good faith by
the Board of Trustees, subject to the right of the holders of Class A EPS to
request a valuation from a nationally recognized investment banking firm
pursuant to paragraph (g)(v) of Article 6.15.5 hereof) as of such date of the
number of Class A Underlying Corporation Shares for which each Class A EPS is
exchangeable as of such date upon exercise of the Class A Exchange Right plus
(B) the amount of any accrued but unpaid Class A Preferred Dividends in respect
of each share of Class A EPS as of such date (other than any such accrued but
unpaid Class A Preferred Dividends that have been declared with a record date
prior to such Liquidation Date, which the Trust shall separately be obligated to
pay to the holders of record of the Class A EPS as of such record date). Until
each holder of shares of Class A EPS has received distributions equal to the
Class A Liquidation Preference, no Junior Liquidating Distributions may be paid
to holders of any other class or series of shares of beneficial interest in the
Trust. Subject to the rights of the holders of shares of beneficial interest in
the Trust with liquidation preferences ranking prior to or on a parity with the
Class A Liquidation Preference, after payment shall have been made in full of
the Class A Liquidation Preference as provided in this paragraph (b), Junior
Liquidating Distributions may be paid to the holders of any shares of beneficial
interest entitled to receive such distributions and the holders of the Class A
EPS shall not be entitled to share therein except as provided in paragraph (c)
of this Article 6.15.4. In the event that the assets of the Trust available for
liquidating distributions to holders of shares of beneficial interest in the
Trust in connection with any Liquidation Event are insufficient to pay the Class
A Liquidation Preference on all outstanding Class A EPS and any Parity
Liquidation Preferences in respect of any other classes or series of shares of
beneficial interest in the Trust, then the holders of the Class A EPS and such
other classes and series of shares of beneficial interest in the Trust shall
share ratably in any such distribution of assets in proportion to the Class A
Liquidation Preference and the Parity Liquidation Preferences to which they
would otherwise be respectively entitled.
(c) Class A Liquidation Participation Right. In addition to being
entitled to receive the Class A Liquidation Preference, upon the occurrence of
any Liquidation Event the holders of Class A EPS shall be entitled to
participate, pursuant to the Class A Liquidation Participation Right, ratably
with the holders of Trust Shares in any liquidating distributions to such
holders. For such purpose, each share of Class A EPS shall be deemed to
represent a number of Trust Shares equal to the number of Class A Underlying
Trust Shares for which each share of Class A EPS could be exchanged upon
exercise of the Class A Exchange Right as of the record date for such
distribution.
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<PAGE>
6.15.5. EXCHANGE RIGHT.
(a) Class A Exchange Right. (i) A holder of shares of Class A EPS shall
have the right to exchange such shares in whole or in part at any time for fully
paid and non-assessable Paired Shares to the extent described below (the "Class
A Exchange Right"). A holder of shares of Class A EPS desiring to exchange such
shares for Paired Shares shall surrender the certificate or certificates
evidencing such shares, duly endorsed or assigned to the Trust or in blank, to
the Transfer Agent together with a duly completed and executed exchange notice
(a "Class A Exchange Notice") in such form as the Trust shall prescribe from
time to time and such related certifications as the Trust may reasonably
prescribe from time to time. Unless any Paired Shares to be issued in exchange
for such shares of Class A EPS are to be issued in the same name as the name in
which such shares of Class A EPS are registered, each share certificate
surrendered shall be accompanied by instruments of transfer, in form reasonably
satisfactory to the Trust, duly executed by the holder or such holder's duly
authorized attorney and an amount sufficient to pay any applicable transfer or
similar tax (or evidence reasonably satisfactory to the Trust demonstrating that
such taxes have been paid). As promptly as practicable (and in any event within
five (5) Business Days after receipt of a Class A Exchange Notice and such
required certificates and documents, the Trust shall elect, pursuant to an
election notice given to the exchanging holder (an "Exchange Election Notice"),
to either: (i) deliver to such holder the number of Paired Shares corresponding
to the number of shares of Class A EPS being exchanged based on the Exchange
Ratio described in paragraph (d) of this Article 6.15.5 (including procuring the
issuance by the Corporation of the Corporation Shares component of such Paired
Shares) or (ii) pay to the holder the Cash Equivalent of such Paired Shares or
(iii) a combination of (i) and (ii).
(ii) If the delivery to such holder of the full number of Paired
Shares requested to be delivered pursuant to the Class A Exchange Notice (the
"Requested Shares") would result in a violation of either the Ownership Limit or
the REIT Rules, the Trust may elect in the Exchange Election Notice to either
(A) deliver to such holder the maximum number of Paired Shares that may be
delivered without causing such a violation (the "Delivered Shares", with the
number of Requested Shares in excess of the Delivered Shares being referred to
herein as the "Excess Shares"), together with either the Cash Equivalent
(determined as of the date of delivery of the applicable Class A Exchange Notice
and the related certificates and other documents described above) of the Excess
Shares or an Exchange Promissory Note in a principal amount equal to such Cash
Equivalent or (B) deliver to such holder the Cash Equivalent (determined as of
such notice delivery date) of the Requested Shares. Notwithstanding the
foregoing, in the event that the delivery of the full number of Requested Shares
pursuant to a Class A Exchange Notice would violate either the Ownership Limit
or the REIT Rules because the exchanging Class A EPS holder, together with such
holder's Affiliates (but without giving effect to any other applicable
attribution rules under the Code), beneficially owns, as of the date the
Exchange Election Notice is given, Paired Shares other than through the
ownership of Westin Transaction Securities, the Trust will have the option (the
"Registered Sale Option"), exercisable in the Exchange Election Notice, in lieu
of delivering an Exchange Promissory Note in a principal amount equal to the
Cash Equivalent of the Excess Shares, to procure the filing of a registration
statement under the Securities Act, and to publicly offer and sell pursuant to
such registration statement in such manner as the Trust in good faith determines
to be appropriate a
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number of Paired Shares equal to the number of such Excess Shares (the "Offered
Shares"), the net proceeds of which sale (after deducting any applicable
underwriting discounts or commissions and the expenses of such offering) shall
be paid to such holder.
(iii) In the event that the issuance of the full number of
Requested Shares upon any exercise of the Class A Exchange Right would violate
either the Ownership Limit or the REIT Rules and either (i) the Trust elects to
deliver the Delivered Shares together with an Exchange Promissory Note in a
principal amount equal to the Cash Equivalent of the Excess Shares or (ii) the
Trust exercises the Registered Sale Option, the holder of the shares of Class A
EPS being exchanged will have the right to withdraw his or her Class A Exchange
Notice as to the Excess Shares, which withdrawal must be made by written notice
to the Transfer Agent within ten (10) Business Days after receipt of the Trust's
Exchange Election Notice.
(b) Delivery of Securities and Cash. If the Exchange Election Notice
relating to an exercise of the Class A Exchange Right does not give rise to a
withdrawal right pursuant to paragraph (a)(iii) above, such Exchange Election
Notice shall be accompanied by the delivery of the Paired Shares and/or cash
required to be delivered pursuant to such Exchange Election Notice. If the
Exchange Election Notice does give rise to such a withdrawal right, but such
right is not exercised by the exchanging holder, the Trust shall deliver the
Paired Shares, Exchange Promissory Note and/or cash required to be delivered
pursuant to such Exchange Election Notice within five (5) Business Days after
the expiration of such withdrawal right. If the Exchange Election Notice
includes the exercise of the Registered Sale Option, the proceeds from the sale
of the Offered Shares shall be paid over to the applicable holder promptly upon
receipt. Any cash payable to an exchanging holder hereunder shall be payable at
the election of the Trust by check or by wire transfer to an account designated
in writing by the exchanging holder, if one has been so designated. With respect
to any Paired Shares to be issued pursuant to an Exchange Election Notice, the
Trust shall issue and deliver (and shall cause the Corporation to issue and
deliver) at the office of the Transfer Agent to the exchanging holder, or on his
or her written order, a certificate or certificates for the number of full
Paired Shares deliverable in accordance with the provisions of this Article
6.15.5, and any fractional interest in respect of a unit of Paired Shares
arising upon such exercise of the Class A Exchange Right shall be settled as
provided in paragraph (c) of this Article 6.15.5 (the date of delivery of such
certificate or certificates being sometimes referred to herein as the "Exchange
Issuance Date"). Any such Paired Shares issued upon such exercise shall be
deemed to have been issued immediately prior to the close of business on the
Exchange Issuance Date, and the Person or Persons in whose name or names any
certificate or certificates for Paired Shares shall be issuable pursuant to such
Class A Exchange Notice shall be deemed to have become the holder or holders of
record of the Paired Shares represented thereby at such time on such date unless
the share transfer records for the Paired Shares shall be closed on such date,
in which event such Person or Persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such share transfer books are open. If less than the full number of shares
of Class A EPS represented by the certificate or certificates surrendered to the
Trust in connection with an exercise of the Class A Exchange Right are being
exchanged pursuant to such exercise, the Trust shall also deliver to the
exchanging holder a new certificate or certificates evidencing the excess shares
not being exchanged.
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(c) Fractional Interests. No fractional Paired Share units or scrip
evidencing fractions of Paired Shares shall be issued upon exercise of the Class
A Exchange Right. Instead of any fractional interest in a unit of Paired Shares
that would otherwise be deliverable upon such exercise, the Trust shall pay to
the exchanging holder an amount in cash equal to the corresponding fraction of
the Current Market Price of the Paired Shares on the Trading Day immediately
preceding the Exchange Issuance Date. If more than one share of Class A EPS
shall be surrendered for exchange at one time by the same holder, the number of
full Paired Shares issuable upon exercise of the Class A Exchange Right shall be
computed on the basis of the aggregate number of shares of Class A EPS so
surrendered.
(d) Exchange Ratio and Adjustments.
(i) Initially, one unit of Paired Shares will be issuable upon
exchange of each share of Class A EPS pursuant to the exercise of the Class A
Exchange Right (the "Exchange Ratio"). If, at any time after the Issue Date, a
Trust Common Adjustment Event shall occur in conjunction with the occurrence of
a corresponding Corporation Common Adjustment Event as a result of which the
number of outstanding Paired Shares is increased or decreased but neither the
nature of the securities comprising the Paired Shares nor the ratio of
outstanding Trust Shares to Common Shares is affected (a "Paired Shares
Adjustment Event"), the Exchange Ratio in effect as of the close of business on
the record date for such Paired Shares Adjustment Event or, if no such record
date applies, the effective date of such Paired Shares Adjustment Event shall be
adjusted so that a holder of shares of Class A EPS who thereafter exercises the
Class A Exchange Right with respect to such shares will be entitled to receive
upon such exercise the number of Paired Shares that such holder would have owned
or have been entitled to receive after the happening of such Paired Shares
Adjustment Event if such holder had exercised the Class A Exchange Right
immediately prior to such record date or effective date. An adjustment pursuant
to this subparagraph (i) shall become effective (subject to subparagraph (iv)
below) immediately upon the opening of business on the Business Day next
following the record date for the applicable Paired Shares Adjustment Event or,
if no such record date applies, the Business Day next following the effective
date of such Paired Shares Adjustment Event.
(ii) No adjustment in the Exchange Ratio shall be required
pursuant to subparagraph (i) above unless such adjustment would require a
cumulative increase or decrease of at least one percent (1%) in such ratio;
provided, however, that any adjustments that by reason of this subparagraph (ii)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment until made. All calculations of the Exchange Ratio
under this paragraph (d) shall be made to the nearest one-tenth of a share (with
.05 of a share being rounded upward).
(iii) Notwithstanding any other provisions of this Article 6.15.5,
the Trust shall not be required to make any adjustment to the Exchange Ratio
based on any issuance of Paired Shares pursuant to any plan providing for the
reinvestment of dividends or interest payable on securities of the Trust (or the
Corporation) and the investment of additional optional amounts in Paired Shares
under such plan.
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(iv) In any case in which this paragraph (d) provides that an
adjustment to the Exchange Ratio shall become effective immediately following
the record date for an event, the Trust may defer until the occurrence of such
event (A) issuing to the holder of any shares of Class A EPS exchanged after
such record date but before the occurrence of such event the additional Paired
Shares (or the cash, Exchange Promissory Notes or other property to be delivered
in lieu thereof pursuant to this Article 6.15.5) issuable pursuant to such
exchange by reason of the adjustment required pursuant to this paragraph (d) in
respect of such event and (B) paying to the exchanging holder any amount of cash
in lieu of any fractional interest in Paired Shares pursuant to paragraph (c) of
this Article 6.15.5.
(v) If at the time of any exercise of the Class A Exchange Right
there are any accrued but unpaid Class A Preferred Dividends or Class A
Participation Dividends other than Class A Preferred Dividends or Class A
Participation Dividends that have been declared with a record date prior to such
exercise, the Exchange Ratio shall be adjusted so that the number of Paired
Shares into which the shares of Class A EPS being exchanged are then
exchangeable is increased by a number of Paired Shares (the "Class A Dividend
Replacement Shares") equal to (A) the aggregate amount of such accrued but
unpaid Class A Preferred Dividends and Class A Participation Dividends with
respect to each share of Class A EPS being exchanged divided by (B) the Current
Market Price of the Paired Shares during the five (5) Trading Days immediately
preceding the date of delivery of the applicable Class A Exchange Notice and all
related certificates and other documents.
(e) Adjustments to Composition of Paired Shares Issuable Upon Exchange.
(i) If, at any time after the Issue Date, a Trust Common
Adjustment Event or a Corporation Common Adjustment Event shall occur other than
as part of a Paired Shares Adjustment Event, each unit of Paired Shares issuable
upon exercise of the Class A Exchange Right shall be adjusted (subject to
subparagraph (iii) below) as of the close of business on the record date for
such event or, if no such record date applies, the effective date of such event
so as to consist of the number of Trust Shares, the number of Corporation Shares
and the number of any other shares of beneficial interest in the Trust or shares
of stock of the Corporation that a holder of one unit of Paired Shares would
have held or have been entitled to receive after giving effect to such event.
(ii) If, at any time after the Issue Date, the Trust or the
Corporation shall become a party to any transaction, including, without
limitation, a merger, consolidation, statutory share exchange, self tender offer
for all or substantially all outstanding Trust Shares and/or Corporation Shares,
sale of all or substantially all of the Trust's or the Corporation's assets or
recapitalization of the Trust Shares and/or the Corporation Shares (but
excluding any event constituting a Trust Common Adjustment Event or a
Corporation Common Adjustment Event) (each of the foregoing being referred to
herein as a "Transaction"), in each case as a result of which the outstanding
Trust Shares and/or Corporation Shares shall be converted into or exchanged for
the right to receive stock, securities or other property (including cash or any
combination thereof), effective as of the effective date of such Transaction,
each unit of Paired Shares issuable upon exercise of the Class A Exchange Right
with respect to any shares of Class A EPS that are not converted into or
exchanged for the right to receive stock, securities or other
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property in connection with such Transaction shall thereafter be deemed to
consist of the kind and amount of shares of beneficial interest in the Trust,
shares of stock of the Corporation and other securities and property (including
cash or any combination thereof) that would have been held or receivable upon
the consummation of such Transaction by a holder of a number of Paired Shares
equal to the number of Class A Underlying Paired Shares for which one share of
Class A EPS would have been exchangeable immediately prior to such Transaction,
assuming such holder of Paired Shares (A) is not a Person with which the Trust
or the Corporation consolidated or into which the Trust or the Corporation was
merged or which merged into the Trust or the Corporation or to which such sale
or transfer was made, as the case may be (a "Constituent Person"), or an
Affiliate of a Constituent Person and (B) failed to exercise his or her rights
of election, if any, as to the kind or amount of stock, securities and other
property (including cash) receivable upon such Transaction (provided that if the
kind or amount of stock, securities and other property (including cash)
receivable upon such Transaction is not the same for each unit of Paired Shares
held immediately prior to such Transaction by other than a Constituent Person or
an Affiliate thereof and in respect of which such rights of election shall not
have been exercised ("Non-Electing Shares"), then for the purposes of this
subparagraph (ii) the kind and amount of stock, securities and other property
(including cash) receivable upon such Transaction in respect of each
Non-Electing Share shall be deemed to be the kind and amount so receivable per
share by a plurality of the Non-Electing Shares). The provisions of this
paragraph (e) shall similarly apply to successive transactions.
(iii) In any case in which this paragraph (e) provides that an
adjustment to the composition of the units of Paired Shares issuable upon
exercise of the Class A Exchange Right shall become effective immediately
following the record date for an event, the Trust may defer until the occurrence
of such event (A) issuing to the holder of any shares of Class A EPS exchanged
after such record date but before the occurrence of such event the additional
Paired Shares (or the cash, Exchange Promissory Notes or other property to be
delivered in lieu thereof pursuant to this Article 6.15.5) issuable pursuant to
such exchange before giving effect to such adjustment and (B) paying to the
exchanging holder any amount of cash in lieu of any fractional interest in
Paired Shares pursuant to paragraph (c) of this Article 6.15.5.
(f) Notice of Adjustments. Whenever the Exchange Ratio or the
composition of a unit of Paired Shares is adjusted as provided in paragraph (d)
or (e) above, the Trust shall promptly file with the Transfer Agent an officer's
certificate setting forth the Exchange Ratio after such adjustment and, in the
case of an adjustment pursuant to paragraph (e), describing the kind and amount
of stock, securities and other property (including cash) then constituting a
unit of Paired Shares. Such certificate shall also set forth a brief statement
of the facts requiring such adjustment and shall be conclusive evidence of the
correctness of such adjustment absent manifest error. Promptly after delivery of
such certificate, the Trust shall prepare a notice of such adjustment setting
forth the adjusted Exchange Ratio, the effective date of such adjustment and, in
the case of an adjustment pursuant to paragraph (e), a description of the kind
and amount of stock, securities and other property (including cash) then
constituting a unit of Paired Shares, and shall mail such notice of such
adjustment to the holder of each share of Class A EPS, and to the extent that
any shares of Class B EPS are then outstanding to each holder of Class B EPS, at
such holder's last address as shown on the share records of the Trust.
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(g) Miscellaneous Provisions.
(i) There shall be no adjustment of the Exchange Ratio or the
composition of the units of Paired Shares issuable upon exercise of the Class A
Exchange Right in case of the issuance of any shares of beneficial interest in
the Trust in a reorganization, acquisition or other similar transaction except
as specifically set forth in this Article 6.15.5.
(ii) If the Trust shall take any action affecting the Trust Shares
or the Corporation shall take any action affecting the Corporation Shares, other
than an action described in this Article 6.15.5, that in the opinion of the
Board of Trustees would materially affect the exchange rights of the holders of
the Class A EPS provided for in this Article 6.15.5, the Exchange Ratio and/or
the composition of the units of Paired Shares may be adjusted, to the extent
permitted by law, in such manner, if any, and at such time, as the Board of
Trustees, in its sole discretion, may determine to be equitable in the
circumstances.
(iii) The Trust covenants that any Paired Shares issued upon
exercise of the Class A Exchange Right will be validly issued, fully paid and
non-assessable. The Trust shall reserve and shall at all times have reserved out
of its authorized but unissued Trust Shares, solely for issuance pursuant to
exercise of the Class A Exchange Right and shall use its best efforts to cause
the Corporation to reserve and at all times have, solely for issuance pursuant
to exercise of the Class A Exchange Right, sufficient Corporation shares to
permit the exercise of such Class A Exchange Right. The Trust shall use its best
efforts to cause the Corporation not to close its transfer books so as to
prevent the timely issuance of Corporation Shares upon the exercise of the Class
A Exchange Right. The Trust shall not close its transfer books so as to prevent
the timely issuance of Trust Shares upon the exercise of the Class A Exchange
Right. The Trust shall pay any and all documentary stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of Paired Shares or
other securities or property upon exercise of the Class A Exchange Right;
provided, however, that the Trust shall not be required to pay any tax that may
be payable in respect of any transfer involved in the issue or delivery of any
Paired Shares or other securities or property in a name other than that of the
holder of the shares of Class A EPS being exchanged, and no such issue or
delivery shall be made unless and until the Person requesting such issue or
delivery has paid to the Trust the amount of any such tax or established, to the
reasonable satisfaction of the Trust, that such tax has been paid.
(iv) Except as provided in paragraph (g)(v) below, any
determination required or permitted to be made by the Board of Trustees by these
Articles Supplementary shall be final, conclusive and binding on the holders of
Class A EPS.
(v) In the event that: (A) the Trust elects to pay the Cash
Equivalent of Paired Shares or other securities pursuant to an exercise of the
Class A Exchange Right and in connection therewith the Board of Trustees makes a
determination of the value of the Paired Shares or other securities at a time
when the Paired Shares or such other securities are not publicly traded, (B) the
Trust elects to pay in cash a Class A Preferred Dividend corresponding to a
Corporation Common Distribution in the form of securities or other property and
in connection therewith the Board of Trustees makes a determination of the fair
market value of such securities or other property or (C) the Board of Trustees
makes a determination of the fair market value of
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Class A Underlying Corporation Shares for the purpose of determining the amount
of the Class A Liquidation Preference in connection with a Liquidation Event,
then the Trust shall deliver to each affected holder of Class A EPS a written
notice (which, in the case of an exercise of the Class A Exchange Right may be
set forth in the related Exchange Election Notice) setting forth the valuation
determined by the Board of Trustees. At any time within ten (10) Business Days
after receipt of such notice, any affected holder of Class A EPS may request in
writing that the Trust obtain a written valuation of such Paired Shares, Class A
Underlying Corporation Shares or other securities or property from an investment
banking firm. Promptly after receipt of any such request, the Trust shall select
a nationally recognized investment banking firm to perform such valuation and
shall provide such investment banking firm with such relevant information as the
Trust may have in relation thereto. Such investment banking firm shall be
instructed to prepare a written valuation report within thirty (30) days after
its appointment, and upon receipt of such valuation report, the Trust shall mail
a copy to each affected holder of Class A EPS. If the valuation as determined by
such investment banking firm is greater than the valuation as determined by the
Board of Trustees, the Trust shall promptly pay the amount of such difference to
each affected holder of Class A EPS. If, however, the valuation as determined by
such investment banking firm is less than the valuation determined by the Board
of Trustees, the Trust may at its option require each affected holder of Class A
EPS to repay the amount of such difference to the Trust, which amount shall be
so repaid by each such holder promptly after receipt of the Trust's request. The
fees and expenses of such investment banking firm shall be paid by the Trust.
6.15.6. REACQUIRED SHARES TO BE RETIRED.
All shares of Class A EPS which shall have been issued and reacquired
in any manner by the Trust shall be restored to the status of authorized but
unissued shares of beneficial interest in the Trust without designation as to
class.
6.15.7. VOTING.
(a) General Voting Rights. The holders of shares of Class A EPS shall
be entitled to vote upon all matters upon which holders of Trust Shares have the
right to vote, and shall be entitled to the number of votes equal to the largest
whole number of Class A Underlying Trust Shares for which such shares of Class A
EPS could be exchanged pursuant to the provisions of Article 6.15.5 hereof as of
the record date for determination of the shareholders entitled to vote on such
matters, or, if no such record date is established, as of the date such vote is
taken or any written consent of shareholders is solicited, such votes to be
counted together with all other shares of beneficial interest in the Trust
having general voting powers and not separately as a class.
(b) Special Voting Rights. So long as any shares of Class A EPS are
outstanding, in addition to any other vote or consent of holders of such shares
required by the Declaration or these Articles Supplementary, the affirmative
vote of at least a majority of the votes entitled to be cast by the holders of
all outstanding shares of Class A EPS, given in person or by proxy, either in
writing without a meeting or by vote at any meeting called for that purpose,
shall be necessary for effecting or validating any amendment, alteration or
repeal of any of the provisions of the
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Declaration or these Articles Supplementary that materially and adversely
affects the voting powers, rights or preferences of the holders of the Class A
EPS disproportionately (based on the number of Underlying Class A Trust Shares
at the time) to the effect of such amendment, alteration or repeal on the
holders of Trust Shares; provided, however, that (i) any amendment of the
provisions of the Declaration so as to authorize or create, or to increase the
authorized amount of, any class or series of shares of beneficial interest in
the Trust, whether ranking prior to, on a parity with or junior to the Class A
EPS shall not be deemed to materially and adversely affect the voting powers,
rights or preferences of the holders of Class A EPS and (ii) no filing with the
State Department of Assessments and Taxation of Maryland by the Trust in
connection with a merger, consolidation or sale of all or substantially all of
the assets of the Trust shall be deemed to be an amendment, alteration or repeal
of any of the provisions of the Declaration or these Articles Supplementary
unless such filing expressly purports to amend, alter or repeal one or more of
such provisions. For the purposes of this paragraph (b), each share of Class A
EPS will have one vote per share.
6.15.8. RECORD HOLDERS.
The Trust and the Transfer Agent may deem and treat the record holder
of any shares of Class A EPS as the true and lawful owner thereof for all
purposes, and neither the Trust nor the Transfer Agent shall be affected by any
notice to the contrary.
6.15.9. RESTRICTIONS ON OWNERSHIP AND TRANSFER.
The Class A EPS constitute shares of beneficial interest in the Trust
that are governed by and issued subject to all the limitations, terms and
conditions of the Declaration applicable to shares of beneficial interest in the
Trust generally, including, without limitation, the terms and conditions
(including exceptions and exemptions) of Article VI of the Declaration
applicable to shares of beneficial interest in the Trust. The foregoing sentence
shall not be construed to limit the applicability to the Class A EPS of any
other term or provision of the Declaration. No restrictions on the
transferability of shares of Class A EPS shall be enforced by the Trust to the
extent that such restrictions would otherwise cause the Trust to fail to meet
the requirements of Section 856(a)(2) of the Code.
**********************************
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Pursuant to the authority granted to the Board of Trustees of the Trust
under Section 6.1 of the Amended and Restated Declaration of Trust of the Trust,
as heretofore amended (the "Declaration"), the Board of Trustees of the Trust,
by resolution adopted by the Board of Trustees of the Trust on September 8,
1997, classified and designated 15,000,000 shares of beneficial interest in the
Trust as Class B Exchangeable Preferred Shares, par value $.01 per share, with
the following preferences, exchange and other rights, voting powers,
restrictions, limitations as to dividends and other distributions,
qualifications and terms and conditions of redemption, such classification and
designation to become effective upon the effective time of the merger of Westin
Hotels & Resorts Worldwide, Inc., a Delaware corporation, with and into the
Trust:
6.16 Class B Exchangeable Preferred Shares Articles Supplementary
6.16.1. NUMBER OF SHARES AND DESIGNATION.
There are hereby designated 15,000,000 "Class B Exchangeable Preferred
Shares", par value $.01 per share ("Class B EPS").
6.16.2. DEFINITIONS.
For purposes of the Class B EPS, the following terms have the meanings
indicated:
"Affiliate" shall mean with respect to any Person, any other Person
which directly or indirectly controls, is controlled by or is under common
control with such Person.
"Articles Supplementary" shall mean either Article 6.15 or Article
6.16, as the case may be, of the Declaration of Trust.
"Base Preference Amount" per share of Class B EPS as of any date shall
mean the Stated Value per share as of such date.
"Board of Trustees" shall mean the Board of Trustees of the Trust or
any committee authorized by the Board of Trustees from time to time to
exercise any of its powers or perform any of its responsibilities with
respect to the Class B EPS.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New York,
New York are not required to be open.
"Class A Articles Supplementary" shall mean Article 6.15 hereof
pursuant to which the Trust has classified and designated 30,000,000 shares
of beneficial interest in the Trust as "Class A Exchangeable Preferred
Shares".
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"Class A EPS" means the Class A Exchangeable Preferred Shares, par
value $0.01 per share, created by the Class A Articles Supplementary.
"Class A EPS Adjustment Event" shall mean any of the following events
that occurs after the Issue Date:
(i) The payment by the Trust of a dividend on the outstanding
Class A EPS that is payable in additional shares of Class A EPS;
(ii) The subdivision of the outstanding Class A EPS into a greater
number of shares (whether by share split or otherwise);
(iii) The combination of the outstanding Class A EPS into a
smaller number of shares (whether by reverse share split or otherwise);
or
(iv) The issuance of any shares of beneficial interest in the
Trust by reclassification of the Class A EPS.
"Class A Exchange Right" shall have the meaning set forth in paragraph
(a) of Article 6.15.5 hereof.
"Class A Liquidation Preference" shall have the meaning set forth in
paragraph (b) of Article 6.15.4 hereof.
"Class A Liquidation Participation Right" shall have the meaning set
forth in paragraph (a) of Article 6.15.4 hereof.
"Class A Participation Dividend" shall have the meaning set forth in
paragraph (a) of Article 6.15.3 hereof.
"Class A Preferred Dividend" shall have the meaning set forth in
paragraph (a) of Article 6.15.3 hereof.
"Class B Articles Supplementary" shall mean this Article 6.16.
"Class B Conversion Notice" shall have the meaning set forth in
paragraph (b)(ii) of Article 6.16.5 hereof.
"Class B Conversion/Redemption Election Right" shall have the meaning
set forth in Article 6.16.7 hereof.
"Class B Conversion/Redemption Notice" shall have the meaning set forth
in Article 6.16.7 hereof.
"Class B Conversion Right" shall have the meaning set forth in
paragraph (b)(i) of Article 6.16.5 hereof.
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"Class B Dividend Replacement Shares" shall have the meaning set forth
in paragraph (e)(v) of Article 6.16.5 hereof.
"Class B EPS" shall have the meaning set forth in Article 6.16.1
hereof.
"Class B Liquidation Preference" shall have the meaning set forth in
paragraph (b) of Article 6.16.4 hereof.
"Class B Liquidation Participation Right" shall have the meaning set
forth in paragraph (a) of Article 6.16.4 hereof.
"Class B Participation Dividend" shall have the meaning set forth in
paragraph (a) of Article 6.16.3 hereof.
"Class B Preferred Dividend" shall have the meaning set forth in
paragraph (a) of Article 6.16.3 hereof.
"Class B Redemption Date" shall have the meaning set forth in paragraph
(c)(ii) of Article 6.16.6 hereof.
"Class B Redemption Notice" shall have the meaning set forth in
paragraph (c)(ii) of Article 6.16.6 hereof.
"Class B Redemption Right" shall have the meaning set forth in
paragraph (a) of Article 6.16.6 hereof.
"Class B Underlying Class A EPS" with respect to any shares of Class B
EPS as of a specified date shall mean the number of shares of Class A EPS
issuable on such date upon exercise of the Class B Conversion Right with
respect to such shares of Class B EPS (including fractional interests but
without taking into account any Class B Dividend Replacement Shares except
for the purposes of an actual exercise of the Class B Conversion Right).
"Class B Underlying Corporation Shares" as of any time shall mean the
Corporation Shares component of the Class B Underlying Paired Shares as of
such time.
"Class B Underlying Paired Shares" as of any time shall mean the Paired
Shares for which each share of Class B EPS is then indirectly exchangeable
assuming both (i) the conversion at such time of such share of Class B EPS
into the corresponding number of shares of Class B Underlying Class A EPS
upon exercise of the Class B Conversion Right and (ii) the simultaneous
exchange of such shares of Class A EPS for Paired Shares (including, unless
otherwise expressly provided herein, fractional shares but excluding any
Class A Dividend Replacement Shares, as defined in paragraph (d)(v) of
Article 6.15.5 hereof) upon exercise of the Class A Exchange Right.
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"Class B Underlying Trust Shares" as of any time shall mean the Trust
Shares component of the Class B Underlying Paired Shares as of such time.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Conditionally Declared Class B Dividend" shall have the meaning set
forth in paragraph (b)(i) of Article 6.16.3 hereof.
"Constituent Person" shall have the meaning set forth in paragraph (f)
of Article 6.16.5 hereof.
"Conversion Ratio" shall have the meaning set forth in paragraph (e)(i)
of Article 6.16.5 hereof.
"Corporation" shall mean Starwood Lodging Corporation, a Maryland
corporation, and any successor.
"Corporation Common Adjustment Event" shall mean any of the following
events that occurs after the Issue Date:
(i) The payment by the Corporation of a dividend on the
outstanding Corporation Shares that is payable in additional
Corporation Shares;
(ii) The subdivision of the outstanding Corporation Shares into a
greater number of shares (whether by stock split or otherwise);
(iii) The combination of the outstanding Corporation Shares into a
smaller number of shares (whether by reverse stock split or otherwise);
or
(iv) The issuance of any shares of stock of the Corporation by
reclassification of the Corporation Shares.
"Corporation Common Distribution" shall mean any dividend or
distribution paid or made by the Corporation (including, without limitation,
any distribution of assets on any liquidation, dissolution or winding up of
the Corporation) in respect of the Corporation Shares, other than a dividend
or distribution that constitutes a Corporation Common Adjustment Event. In
addition, a distribution to the holders of Corporation Shares of rights to
subscribe for or purchase additional Corporation Shares under a shareholders
protective rights plan or agreement shall not be deemed to constitute a
Corporation Common Distribution to the extent that the Corporation makes
provision so that such rights, to the extent still outstanding with respect
to the outstanding Corporation Shares, shall be issued to the holders of any
Corporation Shares issued upon exercise of the Class A Exchange Right (and,
to the extent applicable, shall attach to such Corporation Shares) in an
amount and manner and to the extent provided in such shareholders protective
rights plans or agreements with respect to already outstanding Corporation
Shares.
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"Corporation Shares" shall mean the shares of common stock, par value
$.01 per share, of the Corporation or any stock of the Corporation into
which such common stock may hereafter be changed.
"Cross-Over Date" shall mean the fifth anniversary of the Issue Date,
subject to extension as described in paragraph (a) of Article 6.16.9 hereof.
"Current Market Price" of publicly traded Paired Shares or any other
shares of beneficial interest or other securities of the Trust or any other
issuer as of any Trading Day shall mean the last reported sales price,
regular way, on such day, or, if no sale takes place on such day, the
average of the reported closing bid and asked prices on such day, regular
way, in either case as reported on the NYSE or, if such shares or other
securities are not listed or admitted for trading on the NYSE, on the
principal national securities exchange on which such shares or other
securities are listed or admitted for trading or, if not listed or admitted
for trading on any national securities exchange, on the NASDAQ National
Market or, if such shares or other securities are not quoted on such NASDAQ
National Market, the average of the closing bid and asked prices on such day
in the over-the-counter market as reported by NASDAQ or, if bid and asked
prices for such shares or other securities on such day shall not have been
reported through NASDAQ, the average of the bid and asked prices on such day
as furnished by any NYSE member firm regularly making a market in such
security selected for such purpose by the Chief Executive Officer or Chief
Financial Officer of the Trust or the Board of Trustees.
"Declaration" shall mean the Amended and Restated Declaration of Trust
of the Trust, as amended from time to time.
"Default Rate Dividends" shall have the meaning set forth in paragraph
(d) of Article 6.16.3 hereof.
"Dividend Correspondence Ratio" shall have the meaning set forth in
paragraph (b)(i) of Article 6.16.3 hereof.
"Issue Date" shall mean the first date on which any Class B EPS are
issued by the Trust.
"Junior Dividend" means a dividend payable in respect of any class or
series of shares of beneficial interest in the Trust over which the Class B
Preferred Dividends have preference or priority as to the payment of
dividends, including, without limitation, any Trust Common Dividend, any
Class B Participation Dividend and any Class A Preferred Dividend and any
Class A Participation Dividend.
"Junior Liquidating Distribution" shall mean any distribution of assets
of the Trust in connection with a Liquidation Event to holders of any class
or series of shares of beneficial interest in the Trust over which the Class
B Liquidation Preference has preference or priority in the distribution of
assets upon the occurrence of such Liquidation
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Event, including, without limitation, any such distribution of assets to
holders of Trust Shares or in respect of the Class B Liquidation
Participation Right, the Class A Liquidation Preference or the Class A
Liquidation Participation Right.
"Junior Shares" shall mean the Trust Shares and any other class or
series of shares of beneficial interest in the Trust now or hereafter issued
and outstanding over which the Class B Preferred Dividends have full
preference or priority in the payment of dividends or over which the Class B
Liquidation Preference has full preference or priority in the distribution
of assets on the occurrence of any Liquidation Event. Without limiting the
generality of the foregoing, for the purposes hereof the Class A EPS and the
Trust Shares constitute Junior Shares.
"LIBOR" as of any date shall mean the rate of interest per annum for
United States dollar deposits in the amount of $100,000,000 with a one-month
maturity which appears on "Telerate Page 3750" (as defined below) as of
11:00 a.m. (London time) on such date; provided that if such rate is no
longer published, an interest rate per annum equal to the arithmetic mean
(rounded if necessary to the nearest one-hundredth of one percent (0.01%) of
the interest rates per annum for United States dollar deposits in such
amount and with such a maturity quoted on Reuters Screen Page "LIBO" (or if
such page on such service ceases to display such information, such other
page as may replace it on that service for the purpose of displaying such
information) as of 11:00 a.m. on such date (the rate determined as aforesaid
being the "LIBO Screen Rate"). For such purposes, the term "Telerate Page
3750" shall mean the display designated as "Page 3750" on the Associated
Press-Dow Jones Telerate Service (or such other page as may replace Page
3750 on the Associated Press-Dow Jones Telerate Service or such other
service as may be nominated by the British Bankers' Association as the
information vendor for the purpose of displaying British Bankers'
Association interest rate settlement rates for United States dollar
deposits). Any LIBOR rate determined on the basis of the rate displayed on
Telerate Page 3750 or the LIBO Screen Rate determined in accordance with the
foregoing provisions of this definition shall be subject to corrections, if
any, made in such rate and displayed by the Associated Press-Dow Jones
Telerate Service or Reuters, as applicable, within one hour of the time when
such rate is first displayed by such service. For the purposes of paragraph
(d) of Article 6.16.3, the LIBOR rate shall be determined in accordance with
the foregoing as of the date on which an Uncured Default arises and on the
nearest corresponding day of each subsequent calendar month and shall apply
for the approximate one-month period between the date of such determination
and the next succeeding date of determination.
"Liquidation Date" shall have the meaning set forth in paragraph (a) of
Article 6.16.4 hereof.
"Liquidation Event" shall mean any liquidation, dissolution or winding
up of the affairs of the Trust, whether voluntary or involuntary. For the
purposes hereof, (i) a consolidation or merger of the Trust with one or more
entities, (ii) a statutory share exchange and (iii) a sale or transfer of
all or substantially all of the Trust's assets shall not be deemed to be a
Liquidation Event.
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"Non-Electing Shares" shall have the meaning set forth in paragraph (f)
of Article 6.16.5 hereof.
"NYSE" shall mean the New York Stock Exchange.
"Ownership Limit" shall have the meaning set forth in Section 6.12 of
the Declaration.
"Paired Shares" shall mean units consisting of one Trust Share paired
with one Corporation Share (subject to adjustment as contemplated in
paragraph (e) of Article 6.15.5 hereof) and represented by a single share
certificate, as provided in the Pairing Agreement dated as of June 25, 1980,
between the Trust and the Corporation, as amended from time to time.
"Parity Liquidation Preference" shall mean the liquidation preference
of any class or series of shares of beneficial interest in the Trust that
ranks on a parity with the Class B Liquidation Preference. For such
purposes: (i) the Base Preference Amount portion of the Class B Liquidation
Preference will rank on a parity with the liquidation preferences of any
class or series of Preferred Shares issued by the Trust (other than the
Class A EPS to which said portion of the Class B Liquidation Preference will
rank senior in liquidation preference), unless the articles supplementary
creating such class or series provide that such class or series will rank
junior to such portion of the Class B Liquidation Preference in the
distribution of assets upon the occurrence of a Liquidation Event, and (ii)
the Supplemental Preference Amount portion of the Class B Liquidation
Preference will rank junior to the liquidation preferences of any class or
series of Preferred Shares issued by the Trust (other than the Class A EPS),
unless the articles supplementary creating such class or series provide that
such class or series will rank junior to or on a parity with such portion of
the Class B Liquidation Preference in the distribution of assets upon the
occurrence of a Liquidation Event.
"Parity Preferred Dividend" shall mean any dividend payable in respect
of any class or series of shares of beneficial interest in the Trust that
ranks on a parity in right of payment with the Class B Preferred Dividends,
whether or not the dividend rate, dividend payment dates, liquidation
preference or redemption price are different from those of the Class B EPS.
"Person" shall mean any individual, firm, partnership, corporation,
limited liability company or other entity, and shall include any successor
(by merger or otherwise) of such entity.
"Preferred Shares" shall mean any class or series of shares of
beneficial interest in the Trust now or hereafter issued and outstanding
that have preference or priority over Trust Shares in the payment of
dividends or in the distribution of assets on the occurrence of any
Liquidation Event.
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"Redemption Price" shall have the meaning set forth in paragraph (b)(i)
of Article 6.16.6 hereof.
"Registration Rights Agreement" means the Registration Rights Agreement
entered into by the Trust, the Corporation and the other parties thereto
pursuant to the Westin Transaction Agreement.
"REIT Rules" shall mean the requirements (i) for the Trust to qualify
as a real estate investment trust under the Code as set forth in Sections
856(a)(5) and 856(a)(6) of the Code and (ii) for the Corporation or any
affiliate of the Corporation which is a tenant of the Trust to not be
treated as a related party pursuant to Section 856(d)(2)(B) of the Code.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Trust in its accounting
ledgers of any accounting or bookkeeping entry which indicates, pursuant to
a declaration of dividends or other distribution by the Board of Trustees,
the allocation of funds to be so paid on any series or class of shares of
beneficial interest in the Trust; provided, however, that if any funds for
any class or series of Junior Shares or any class or series of shares of
beneficial interest in the Trust ranking on a parity with the Class B EPS as
to the payment of dividends are placed in a separate account of the Trust or
delivered to a disbursing, paying or other similar agent, then "set apart
for payment" with respect to the Class B EPS shall mean placing such funds
in a separate account or delivering such funds to a disbursing, paying or
similar agent.
"Stated Value" of each share of Class B EPS shall initially mean
Thirty-Eight Dollars and Fifty Cents ($38.50) per share. Upon the occurrence
of any share split, reverse share split or other subdivision or combination
of the Class B EPS subsequent to the Issue Date, the Stated Amount shall be
proportionately adjusted as determined in good faith by the Board of
Trustees.
"Supplemental Preference Amount" shall have the meaning set forth in
paragraph (b) of Article 6.16.4 hereof.
"Trading Day" with respect to publicly traded Paired Shares or any
other shares of beneficial interest or other securities of the Trust or any
other issuer shall mean any day on which the securities in question are
traded on the NYSE, or if such securities are not listed or admitted for
trading on the NYSE, on the principal national securities exchange on which
such securities are listed or admitted, or if not listed or admitted for
trading on any national securities exchange, on the NASDAQ National Market,
or if such securities are not quoted on such NASDAQ National Market, in the
applicable securities market in which such securities are traded.
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"Transaction" shall have the meaning set forth in paragraph (f) of
Article 6.16.5 hereof.
"Transfer Agent" shall mean ChaseMellon Shareholder Services, L.L.C.
(or any successor thereof), or such other agent or agents of the Trust as
may be designated by the Board of Trustees or their designee as the transfer
agent for the Class B EPS and the Class A EPS.
"Trust" shall mean Starwood Lodging Trust, a Maryland real estate
investment trust, and any successor.
"Trust Common Adjustment Event" shall mean any of the following events
that occurs after the Issue Date:
(i) The payment by the Trust of a dividend on the outstanding
Trust Shares that is payable in additional Trust Shares;
(ii) The subdivision of the outstanding Trust Shares into a
greater number of shares (whether by share split or otherwise);
(iii) The combination of the outstanding Trust Shares into a
smaller number of shares (whether by reverse share split or otherwise);
or
(iv) The issuance of any shares of beneficial interest in the
Trust by reclassification of the Trust Shares.
"Trust Common Dividend" shall mean any dividend or distribution paid or
made by the Trust pro rata on the outstanding Trust Shares other than (i) a
distribution of assets of the Trust upon the occurrence of a Trust
Liquidation Event or (ii) on a dividend or distribution that constitutes a
Trust Common Adjustment Event. In addition, a distribution to the holders of
shares of beneficial interest in the Trust of rights to subscribe for or
purchase additional Trust Shares under a shareholders protective rights plan
or agreement or any similar plan or agreement shall not be deemed to
constitute a Trust Common Dividend to the extent that the Trust makes
provision so that such rights, to the extent still outstanding with respect
to the outstanding Trust Shares, shall be issued to the holders of any Trust
Shares issued upon exercise of the Class A Exchange Right (and, to the
extent applicable, shall attach to such Trust Shares) in an amount and
manner and to the extent provided in such plans or agreements with respect
to already outstanding Trust Shares.
"Trust Conversion Notice" shall have the meaning set forth in paragraph
(c)(ii) of Article 6.16.5 hereof.
"Trust Conversion Right" shall have the meaning set forth in paragraph
(c)(i) of Article 6.16.5 hereof.
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"Trust Redemption Date" shall have the meaning set forth in paragraph
(b)(ii) of Article 6.16.6 hereof.
"Trust Redemption Notice" shall have the meaning set forth in paragraph
(b)(ii) of Article 6.16.6 hereof.
"Trust Redemption Right" shall have the meaning set forth in paragraph
(a) of Article 6.16.6 hereof.
"Trust Shares" shall mean the common shares of beneficial interest in
the Trust, par value $.01 per share, or any shares of beneficial interest in
the Trust into which such common shares may be changed.
"Uncured Default" shall have the meaning set forth in paragraph (a) of
Article 6.16.9 hereof.
"Westin Transaction Agreement" shall mean the Transaction Agreement
dated as of September 8, 1997 among WHWE L.L.C., Woodstar Investor
Partnership, Nomura Asset Capital Corporation, Juergen Bartels, W&S Hotel
L.L.C., Westin Hotels & Resorts Worldwide, Inc., W&S Lauderdale Corp., W&S
Seattle Corp., Westin St. John Hotel Company, Inc., W&S Denver Corp., W&S
Atlanta Corp., the Trust, SLT Realty Limited Partnership, the Corporation
and SLC Operating Limited Partnership, as such agreement may be amended from
time to time.
6.16.3. DIVIDENDS.
(a) In General. The holders of Class B EPS will be entitled (i) to
receive a preferred dividend payable as described in paragraph (b) below (a
"Class B Preferred Dividend"), when, as and if declared by the Board of Trustees
out of assets of the Trust legally available for that purpose, based on the
payment of any Corporation Common Distribution and (ii) to participate on the
basis described in paragraph (c) below in any Trust Common Dividend, when, as
and if declared by the Board of Trustees out of assets of the Trust available
for that purpose (a "Class B Participation Dividend"). In certain circumstances,
the holders of Class B EPS will also be entitled to receive a Default Rate
Dividend, as provided in paragraph (d) below.
(b) Class B Preferred Dividend.
(i) Upon the payment by the Corporation of any Corporation Common
Distribution prior to the occurrence of a Liquidation Event, the right to
receive a Class B Preferred Dividend will automatically accrue with respect to
each share of Class B EPS as of the payment date for such Corporation Common
Distribution in an amount equal to the value of the Corporation Common
Distribution paid on each Corporation Share multiplied by the applicable
Dividend Correspondence Ratio described below. To the extent that any
Corporation Common Distribution consists of securities or other property (other
than cash), the Trust will have the option of paying the corresponding Class B
Preferred Dividend either (A) in the same form as such Corporation Common
Distribution (i.e., by delivery of the same type of securities or other
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property as distributed in the Corporation Common Distribution), (B) in cash in
an amount equal to the fair market value of such securities or other property as
determined in good faith by the Board of Trustees subject to the rights of the
holders of the Class B EPS to request a valuation from a nationally recognized
investment banking firm as provided in paragraph (h)(v) of Article 6.16.5 hereof
or (C) a combination thereof. Each Class B Preferred Dividend will be cumulative
from the payment date for the related Corporation Common Distribution and will
be payable to holders of record of Class B EPS on such record date as shall be
fixed by the Board of Trustees, which record date shall be the same as the
record date for the corresponding Class A Preferred Dividend based on such
Corporation Common Distribution and not earlier than the record date for such
Corporation Common Distribution. The Board of Trustees may, at any time between
the declaration of a Corporation Common Distribution and the related payment
date, declare a corresponding Class B Preferred Dividend conditioned on the
actual payment of such Corporation Common Distribution (any such Class B
Preferred Dividend being sometimes referred to herein as a "Conditionally
Declared Class B Dividend" until such time as the corresponding Corporation
Common Distribution is paid, at which time it will no longer be deemed to be a
Conditionally Declared Class B Dividend but will instead be deemed to be an
accrued Class A Preferred Dividend). The "Dividend Correspondence Ratio" for the
purposes of determining the amount of any Class B Preferred Dividend accrual
shall mean the number of Class B Underlying Corporation Shares for which each
share of Class B EPS is indirectly exchangeable as of the record date for the
related Corporation Common Distribution upon exercise of the Class B Exchange
Right, as such number shall be proportionately adjusted to reflect any share
dividend, share split, reverse share split or other combination or subdivision
of the Class B EPS or the Class A EPS that becomes effective between (or, if the
record date for such event is different from the effective date therefor, that
has a record date that falls between) (A) the record date for the Corporation
Common Distribution and (B) the date of payment of such Corporation Common
Distribution or, if earlier, the record date for such Class B Preferred
Dividend.
(ii) So long as any shares of Class B EPS are outstanding: (A) no
Junior Dividend may be declared or paid or set apart for payment unless all
accrued Class B Preferred Dividends and Conditionally Declared Class B Dividends
have been or are concurrently declared and paid, or declared and a sum
sufficient for the payment thereof set apart for payment, (B) no Parity
Preferred Dividend shall be declared or paid or set aside for payment unless a
ratable portion of all accrued but unpaid Class B Preferred Dividends and
Conditionally Declared Class B Dividends has been or is concurrently declared
and paid, or declared and a sum sufficient for the payment thereof set apart for
payment (with such ratable portion being based on the portion of the accrued but
unpaid Parity Preferred Dividends being paid) and (C) no Junior Shares may be
redeemed, purchased or otherwise acquired by the Trust (other than a redemption,
purchase or other acquisition of Trust Shares made for purposes of and in
compliance with requirements of an employee incentive or benefit plan of the
Trust or any subsidiary or upon any exchange or redemption of other securities
at the option of the holders thereof, or as required or permitted under Article
VI of the Declaration) for consideration (or any moneys paid or made available
for a sinking fund for the redemption of any Junior Shares), directly or
indirectly (except for conversion into or exchange for Junior Shares) unless all
accrued Class B Preferred Dividends and Conditionally Declared Class B Dividends
have been or are concurrently declared and paid, or declared and a sum
sufficient for the payment thereof set apart for payment.
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(c) Class B Participation Dividend. No Trust Common Dividend may be
declared in respect of the Trust Shares unless the Board of Trustees
concurrently declares a Class B Participation Dividend entitling each share of
Class B EPS to receive an amount equal to the amount of the Trust Common
Dividend declared on each Trust Share multiplied by the number of Class B
Underlying Trust Shares for which each share of Class B EPS is indirectly
exchangeable upon exercise of the Class B Conversion Right as of the record date
for such Trust Common Dividend. Such Class B Participation Dividend shall be
payable on the same date on which the corresponding Trust Common Dividend is
payable, shall be payable in the same form as the corresponding Trust Common
Dividend and shall be paid to holders of record of the Class B EPS on the same
record date as is fixed by the Board of Trustees for the payment of such Trust
Common Dividend.
(d) Default Rate Dividends. Notwithstanding the foregoing provisions of
this Article 6.16.3 but subject to paragraph (b) of Article 6.16.9, upon the
occurrence and during the continuation of any Uncured Default, dividends
("Default Rate Dividends") shall accrue with respect to the outstanding shares
of Class B EPS in an amount equal to the product of (i) the Stated Value of each
such share multiplied by (ii) an interest rate per annum equal to LIBOR plus
four percent (4%). Any such Default Rate Dividends shall be cumulative, shall be
deemed to constitute Class B Preferred Dividends for the purposes hereof and
shall be payable quarterly on March 1, June 1, September 1 and December 1 of
each year, when, as and if declared by the Board of Trustees out of assets of
the trust legally available for that purpose; provided that, if, at any time
when there are accrued but unpaid Default Rate Dividends on the Class B EPS, a
Class B Preferred Dividend or Class B Participation Dividend accrues pursuant to
paragraph (b) or (c) of this Article 6.16.3 in an amount per share that exceeds
the amount of such accrued but unpaid Default Rate Dividends per share, the
holders of shares of Class B EPS shall be entitled to receive such Class B
Preferred Dividend or Class B Participation Dividend in accordance with the
provisions of such paragraphs (b) and (c) and the Default Rate Dividends accrued
through the date of accrual of such Class B Preferred Dividend or Class B
Participation Dividend shall be reduced to zero (although additional Default
Rate Dividends shall again commence to accrue immediately following such date of
accrual to the extent that the Uncured Default continues unremedied).
6.16.4. LIQUIDATION RIGHTS.
(a) In General. Upon the occurrence of any Liquidation Event, the
holders of Class B EPS will be entitled (i) to receive out of the assets of the
Trust legally available for liquidating distributions to holders of shares of
beneficial interests in the Trust, prior to the making of any Junior Liquidating
Distribution, a liquidating distribution in an amount equal to the Class B
Liquidation Preference described in paragraph (b) below determined as of the
effective date of such Liquidation Event or, if no effective date is provided,
as of the record date of the first liquidating distribution relating to such
Liquidation Event (in either such case, the "Liquidation Date") and (ii) to
participate on the basis described in paragraph (c) below in any liquidating
distribution to holders of Trust Shares (the "Class B Liquidation Participation
Right"). In determining whether a distribution (other than upon the occurrence
of a Liquidation Event), by dividend, redemption or other acquisition of shares
of beneficial interest in the Trust
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or otherwise, is permitted under Maryland law, amounts that would be needed, if
the Trust were to be dissolved at the time of the distribution, to satisfy the
preferential rights upon dissolution of the holders of Class A EPS whose
preferential rights upon dissolution are senior to those receiving the
distribution shall not be added to the Trust's total liabilities.
(b) Class B Liquidation Preference. The "Class B Liquidation
Preference" of a share of Class B EPS as of the applicable Liquidation Date
shall mean the sum of (A) the Base Preference Amount as of such date and (B) the
amount of any accrued but unpaid dividends in respect of each share of Class B
EPS as of such date (other than any such accrued but unpaid Class B Preferred
Dividends that have been declared with a record date prior to such Liquidation
Date, which the Trust shall separately be obligated to pay to the holders of
record of the Class B EPS as of such record date)(the "Supplemental Preference
Amount"). Until each holder of shares of Class B EPS has received distributions
equal to the Class B Liquidation Preference, no Junior Liquidating Distributions
may be paid to holders of any other class or series of shares of beneficial
interest in the Trust. Subject to the rights of the holders of shares of
beneficial interest in the Trust with liquidation preferences ranking prior to
or on a parity with the Class B Liquidation Preference, after payment shall have
been made in full of the Class B Liquidation Preference as provided in this
paragraph (b), Junior Liquidating Distributions may be paid to the holders of
any shares of beneficial interest entitled to receive such distributions and the
holders of the Class B EPS shall not be entitled to share therein except as
provided in paragraph (c) of this Article 6.16.4. In the event that the assets
of the Trust available for liquidating distributions to holders of shares of
beneficial interest in the Trust in connection with any Liquidation Event are
insufficient to pay the Class B Liquidation Preference on all outstanding Class
B EPS and any Parity Liquidation Preferences in respect of any other classes or
series of shares of beneficial interest in the Trust, then the holders of the
Class B EPS and such other classes and series of shares of beneficial interest
in the Trust shall share ratably in any such distribution of assets in
proportion to the Class B Liquidation Preference and the Parity Liquidation
Preferences to which they would otherwise be respectively entitled.
(c) Class B Liquidation Participation Rights. In addition to being
entitled to receive the Class B Liquidation Preference, upon the occurrence of
any Liquidation Event the holders of Class B EPS shall be entitled to
participate, pursuant to the Class B Liquidation Participation Right, ratably
with the holders of Trust Shares in any liquidating distributions to such
holders. For such purpose, each share of Class B EPS shall be deemed to
represent a number of Trust Shares equal to the number of Class B Underlying
Trust Shares for which each share of Class B EPS can be indirectly exchanged as
of the record date for such distribution.
6.16.5. CONVERSION RIGHTS.
(a) In General. Shares of Class B EPS shall be convertible into shares
of Class A EPS (A) at the option of the holder upon exercise of the Class B
Conversion Right at any time after the first anniversary of the Issue Date and
on or prior to the first anniversary of the CrossOver Date, to the extent
provided in paragraph (b) of this Article 6.16.5, or (B) at the option of the
Trust upon exercise of the Trust Conversion Right at any time after the
Cross-Over Date, to the extent provided in paragraph (c) of this Article 6.16.5.
In addition, as more specifically provided in Article 6.16.7 hereof, upon
receipt of a Class B Conversion/Redemption Notice from
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any holder of shares of Class B EPS at any time after the first anniversary of
the Cross-Over Date, the Trust will be required to elect to either exercise the
Trust Conversion Right or the Trust Redemption Right with respect to the shares
specified in such Class B Conversion/Redemption Notice.
(b) Class B Conversion Right.
(i) A holder of shares of Class B EPS shall have the right,
exercisable in the manner described in paragraph (b)(ii) below, at such holder's
option at any time after the first anniversary of the Issue Date and on or prior
to the first anniversary of the Cross-Over Date, to convert such shares in whole
or in part into fully paid and non-assessable shares of Class A EPS based on the
applicable Conversion Ratio described in paragraph (e) of this Article 6.16.5
(the "Class B Conversion Right"); provided, however, that the Class B Conversion
Right may not be exercised (A) with respect to any shares of Class B EPS that
are already subject to a Trust Conversion Notice, (B) with respect to any shares
of Class B EPS that are already subject to a Class B Redemption Notice or a
Class B Conversion/Redemption Notice or (C) after the applicable Redemption Date
if the Trust has already given a Trust Redemption Notice with respect to the
applicable shares of Class B EPS, unless, in the case of either (B) or (C), the
Trust shall default in its obligations hereunder arising as a result of such
notice and such default shall not have been cured within ten (10) days
thereafter.
(ii) A holder of shares of Class B EPS desiring to exercise the
Class B Conversion Right with respect to such shares shall surrender the
certificate or certificates evidencing such shares, duly endorsed or assigned to
the Trust or in blank, to the Transfer Agent together with a duly completed and
executed conversion notice (a "Class B Conversion Notice") in such form as the
Trust shall prescribe from time to time and such related certifications as the
Trust may reasonably prescribe from time to time. Such form of Class B
Conversion Notice will also permit the holder of the Class B EPS being converted
to concurrently elect to exercise the Class A Exchange Right with respect to the
Class A EPS Shares to be issued pursuant to the exercise of the Class B
Conversion Right. Unless any shares of Class A EPS to be issued upon conversion
of such shares of Class B EPS are to be issued in the same name as the name in
which such shares of Class B EPS are registered, each share certificate
surrendered shall be accompanied by instruments of transfer, in form reasonably
satisfactory to the Trust, duly executed by the holder or such holder's duly
authorized attorney and an amount sufficient to pay any applicable transfer or
similar tax (or evidence reasonably satisfactory to the Trust demonstrating that
such taxes have been paid).
(iii) As promptly as practicable after receipt by the Transfer
Agent of a Class B Conversion Notice and the certificates and other documents
described above, the Trust shall issue and deliver at the office of the Transfer
Agent to the holder of the shares of Class B EPS being converted, or on his or
her written order, a certificate or certificates for the full number of shares
of Class A EPS issuable upon such conversion in accordance with the provisions
of this Article 6.16.5, and any fractional interest in respect of a share of
Class A EPS resulting from such conversion shall be settled as provided in
paragraph (d) of this Article 6.16.5; provided, however, that to the extent that
the holder of shares of Class B EPS with respect to which the Class B Conversion
Right has been exercised has simultaneously exercised the Class
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A Exchange Right with respect to the shares of Class A EPS issuable upon such
conversion, no such certificate or certificates shall be issued with respect to
such shares of Class A EPS (and there shall be no settlement of any such
fractional interests), but such Class A Exchange Right shall be deemed to have
been exercised with respect to such shares of Class A EPS (including any such
fractional interests) as of the date of receipt of the Class B Conversion Notice
and the certificates and other documents described above, and the rights and
obligations of the Trust and such holder arising therefrom shall be governed by
Article 6.15.5 hereof. If less than the full number of shares of Class B EPS
represented by the certificate or certificates surrendered to the Trust are to
be converted pursuant to an exercise of the Class B Conversion Right, the Trust
shall also deliver to the holder a new certificate or certificates evidencing
the excess shares not being converted.
(iv) The conversion resulting from any exercise of the Class B
Conversion Right shall be deemed to have been effected immediately prior to the
close of business on the date of receipt by the Transfer Agent of the Class B
Conversion Notice and the certificates and other documents described above, and
the Person or Persons in whose name or names any certificate or certificates for
shares of Class A EPS shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the shares of Class A EPS
represented thereby at such time on such date, unless the sharetransfer books of
the Trust for the Class A EPS shall be closed on such date, in which event such
Person or Persons shall be deemed to have become such holder or holders of
record at the close of business on the next succeeding day on which such
sharetransfer books are open.
(c) Trust Conversion Right.
(i) Shares of Class B EPS will also be convertible at any time
after the first anniversary of the Cross-Over Date in whole or in part at the
option of the Trust into fully paid and non-assessable shares of Class A EPS
based on the applicable Conversion Ratio described below (the "Trust Conversion
Right"); provided, however, that the Trust Conversion Right may not be exercised
with respect to any shares of Class B EPS with respect to which (A) the holder
has already given a Class B Redemption Notice or a Class B Conversion Notice or
(B) the Trust has already given a Trust Redemption Notice.
(ii) The Trust Conversion Right may be exercised by the Trust
giving written notice of such exercise to the holders of the shares of the Class
B EPS with respect to which the Trust desires to exercise such right (a "Trust
Conversion Notice").
(iii) The shares of Class B EPS of a holder specified in such
Trust Conversion Notice shall be deemed to have been converted as of the date of
the applicable Trust Conversion Notice into the full number of shares of Class A
EPS issuable upon such conversion in accordance with the provisions of this
Article 6.16.5, and any fractional interest in respect of a share of Class A EPS
resulting from such conversion shall be settled as provided in paragraph (d) of
this Article 6.16.5. The conversion provided for in this paragraph (c) shall be
automatic without the requirement of any action on the part of the affected
holders of shares of Class B EPS and whether or not the certificates evidencing
such shares of Class B EPS are surrendered to the Trust or the Transfer Agent;
provided that the Trust shall not be obligated to issue to any such
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holders certificates evidencing the shares of Class A EPS into which such Class
B EPS shares have been converted until certificates evidencing the shares of
Class B EPS held by such holder have been delivered to the Trust or the Transfer
Agent. If less than the full number of shares of Class B EPS represented by the
certificate or certificates surrendered to the Trust in connection with an
exercise of the Trust Conversion Right have been converted pursuant to such
exercise, the Trust shall also deliver to the holder a new certificate or
certificates evidencing the excess shares not being converted.
(d) Fractional Interests. No fractional shares or scrip evidencing
fractions of shares of Class A EPS shall be issued upon exercise of the Class B
Conversion Right or the Trust Conversion Right. Instead of any fractional
interest in a share of Class A EPS that would otherwise be deliverable upon the
conversion of shares of Class B EPS, the Trust shall pay to the holder of such
shares of Class B EPS an amount in cash equal to the product of (A) such
fraction, (B) the then current Exchange Ratio of Class A EPS for Paired Shares,
as determined pursuant to the provisions of paragraph (d) of Article 6.15.5
hereof, and (C) the Current Market Price of the Paired Shares as of the Trading
Day immediately preceding the date on which the applicable Class B Conversion
Notice or Trust Conversion Notice (as applicable) and all related certificates
and other documents were received by the Transfer Agent.
(e) Conversion Ratio and Adjustments.
(i) Initially, one share of Class A EPS will be issuable upon
conversion of each share of Class B EPS pursuant to an exercise of the Class B
Conversion Right or the Trust Conversion Right (the "Conversion Ratio"), which
Conversion Ratio will be subject to adjustment from the Issue Date through the
Cross-Over Date. After such date, the Conversion Ratio will be equal to the
Class B Liquidation Preference (determined without taking into consideration any
accrued but unpaid dividends other than Default Rate Dividends) as of the date
of exercise of the Class B Conversion Right or the Trust Conversion Right, as
applicable, divided by the product of (A) the number of Class A Underlying
Paired Shares (including fractional interests) for which each share of Class A
EPS is exchangeable as of such date pursuant to Article 6.15.5 hereof multiplied
by (B) the Current Market Price of the Paired Shares as of such date. All
calculations of the Conversion Ratio under this paragraph (e) shall be made to
the nearest one-tenth of a share (with .05 of a share being rounded upward).
(ii) If, at any time between the Issue Date and the Cross-Over
Date, a Class A EPS Adjustment Event shall occur, the Conversion Ratio in effect
as of the close of business on the record date for such Class A EPS Adjustment
Event or, if no such record date applies, the effective date of such Class A EPS
Adjustment Event shall be adjusted so that in connection with any exercise of
the Class B Conversion Right or the Trust Conversion Right the shares of Class B
EPS subject to such exercise will be converted into the number of shares of
Class A EPS that such holder would have owned or been entitled to receive after
the happening of such Class A EPS Adjustment Event if such Class B Conversion
Right or Trust Conversion Right had been exercised immediately prior to such
record date or effective date. An adjustment pursuant to this subparagraph (ii)
shall become effective (subject to subparagraph (iv) below) immediately upon the
opening of business on the Business Day next following the record date
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for the applicable Class A EPS Adjustment Event or, if no such record date
applies, the Business Day next following the effective date of such Class A EPS
Adjustment Event.
(iii) No adjustment in the Conversion Ratio shall be required
pursuant to subparagraph (ii) above unless such adjustment would require a
cumulative increase or decrease of at least one percent (1%) in such ratio;
provided, however, that any adjustments that by reason of this subparagraph
(iii) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment until made.
(iv) In any case in which subparagraph (ii) above provides that an
adjustment to the Conversion Ratio shall become effective immediately following
the record date for a Class A EPS Adjustment Event, the Trust may defer until
the occurrence of such event (A) issuing to the holder of any shares of Class B
EPS converted after such record date but before the occurrence of such event the
additional shares of Class A EPS issuable pursuant to such conversion by reason
of the adjustment required pursuant to subparagraph (ii) in respect of such
Class A EPS Adjustment Event and (B) paying to such holder any amount of cash in
lieu of any fractional interest in shares of Class EPS pursuant to paragraph (d)
of this Article 6.16.5.
(v) If at the time of any exercise of the Class B Conversion Right
on or prior to the Cross-Over Date there are any accrued but unpaid Default Rate
Dividends with respect to the shares of Class B EPS being converted, the
Conversion Ratio shall be adjusted so that the number of shares of Class A EPS
issuable upon such exercise is increased by a number of shares (the "Class B
Dividend Replacement Shares", which term shall also be deemed to refer to any
shares of Class A EPS issued upon exercise of the Class B Conversion Right in
respect of accrued but unpaid Default Rate Dividends pursuant to subparagraph
(ii) above) equal to (A) the amount of the accrued but unpaid Default Rate
Dividends with respect to the shares of Class B EPS being exchanged divided by
(B) the product of (1) the number of Paired Shares for which each share of Class
A EPS is then exchangeable upon exercise of the Class A Exchange Right
multiplied by (2) the Current Market Price of the Paired Shares during the five
(5) Trading Days immediately preceding the date of delivery of the applicable
Class B Conversion Notice or Trust Conversion Notice and all related
certificates and other documents.
(f) Effect of Mergers and Certain Other Transactions. If, at any time
after the Issue Date, the Trust shall become a party to any transaction,
including, without limitation, a merger, consolidation, statutory share
exchange, self tender offer for all or substantially all outstanding Trust
Shares, sale of all or substantially all of the Trust's assets or
recapitalization of the Class A EPS (but excluding any event constituting a
Class A EPS Adjustment Event)(each of the foregoing being referred to herein as
a "Transaction"), in each case as a result of which the outstanding shares of
Class A EPS shall be converted into or exchanged for the right to receive stock,
securities or other property (including cash or any combination thereof),
effective as of the effective date of such Transaction, each share of Class A
EPS issuable upon exercise of the Class B Conversion Right or the Trust
Conversion Right with respect to any shares of Class B EPS that are not
converted into or exchanged for the right to receive stock, securities or other
property in connection with such Transaction shall thereafter be deemed to
consist of the kind and amount of shares of stock and other securities and
property (including cash or any combination thereof) that would have been held
or receivable upon the consummation of such Transaction by a holder of a
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number of shares of Class A EPS equal to the number of Class B Underlying Class
A EPS Shares into which each share of Class B EPS would have been convertible
immediately prior to such Transaction, assuming such holder of shares of Class A
EPS (A) is not a Person with which the Trust consolidated or into which the
Trust was merged or which merged into the Trust or to which such sale or
transfer was made, as the case may be (a "Constituent Person"), or an Affiliate
of a Constituent Person and (B) failed to exercise his or her rights of
election, if any, as to the kind or amount of stock, securities an other
property (including cash) receivable upon such Transaction (provided that if the
kind or amount of stock, securities and other property (including cash)
receivable upon such Transaction is not the same for each share of Class A EPS
held immediately prior to such Transaction by other than a Constituent Person or
an Affiliate thereof and in respect of which such rights of election shall not
have been exercised ("Non-Electing Share"), then for the purposes of this
subparagraph (ii) the kind and amount of stock, securities and other property
(including cash) receivable upon such Transaction by each Non-Electing Shares
shall be deemed to be the kind and amount so receivable per share by a plurality
of the Non-Electing Shares). The provisions of this paragraph (f) shall
similarly apply to successive Transactions.
(g) Notice of Adjustment. Whenever the Conversion Ratio or the nature
and amount of the securities and other property issuable upon exercise of the
Class B Conversion Right or the Trust Conversion Right is adjusted as provided
in paragraph (e) or (f) above, the Trust shall promptly file with the Transfer
Agent an officer's certificate setting forth the Conversion Ratio after such
adjustment and, in the case of an adjustment pursuant to paragraph (f),
describing the kind and amount of stock, securities and other property
(including cash) thereafter issuable upon such exercise. Such certificate shall
also set forth a brief statement of the facts requiring such adjustment and
shall be conclusive evidence of the correctness of such adjustment absent
manifest error. Promptly after delivery of such certificate, the Trust shall
prepare a notice of such adjustment setting forth the adjusted Conversion Ratio,
the effective date of such adjustment and, in the case of an adjustment pursuant
to paragraph (f), a description of the kind and amount of stock, securities and
other property (including cash) thereafter issuable upon exercise of the Class B
Conversion Right or the Trust Conversion Right, and shall mail such notice of
such adjustment to the holder of each share of Class B EPS at such holder's last
address as shown on the sharerecords of the Trust.
(h) Miscellaneous Provisions.
(i) There shall be no adjustment of the Conversion Ratio in case
of the issuance of any shares of beneficial interest in the Trust in a
reorganization, acquisition or other similar transaction except as specifically
set forth in this Article 6.16.5.
(ii) If the Trust shall take any action affecting the Trust Shares
or the Corporation shall take any action affecting the Corporation Shares, other
than an action described in this Article 6.16.5, that in the opinion of the
Board of Trustees would materially and adversely affect the conversion rights of
the holders of the Class B EPS provided for in this Article 6.16.5, the
Conversion Ratio may be adjusted, to the extent permitted by law, in such
manner, if any, and at such time, as the Board of Trustees, in its sole
discretion, may determine to be equitable in the circumstances.
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(iii) The Trust covenants that any shares of Class A EPS issued
upon exercise of the Class B Conversion Right or the Trust Conversion Right will
be validly issued, fully paid and non-assessable. The Trust shall reserve and
shall at all times have reserved out of its authorized but unissued Class A EPS
sufficient Class A EPS to permit the exercise of the Class B Conversion Right.
The Trust shall also comply with its obligations under paragraph (g)(iii) of
Article 6.15.5 hereof as if such shares of Class A EPS issuable upon exercise of
the Class B Conversion Right were issued and outstanding. The Trust shall pay
any and all documentary stamp or similar issue or transfer taxes payable in
respect of the issue or delivery of shares of Class A EPS or other securities or
property upon exercise of the Class B Conversion Right or the Trust Conversion
Right; provided, however, that the Trust shall not be required to pay any tax
that may be payable in respect of any transfer involved in the issue or delivery
of any shares of Class A EPS or other securities or property in a name other
than that of the holder of the shares of Class B EPS being converted, and no
such issue or delivery shall be made unless and until the Person requesting such
issue or delivery has paid to the Trust the amount of any such tax or
established, to the reasonable satisfaction of the Trust, that such tax has been
paid.
(iv) Except as provided in paragraph (g)(v) below, any
determination required or permitted to be made by the Board of Trustees by these
Articles Supplementary shall be final, conclusive and binding on the holders of
Class B EPS.
(v) In the event that the Trust elects to pay in cash a Class B
Preferred Dividend corresponding to a Corporation Common Distribution in the
form of securities or other property and in connection therewith the Board of
Trustees makes a determination of the fair market value of such securities or
other property, the Trust shall deliver to each affected holder of Class B EPS a
written notice setting forth the valuation determined by the Board of Trustees.
At any time within ten (10) Business Days after receipt of such notice, any
affected holder of Class B EPS may request in writing that the Trust obtain a
written valuation of such securities or other property from an investment
banking firm. Promptly after receipt of any such request, the Trust shall select
a nationally recognized investment banking firm to perform such valuation and
shall provide such investment banking firm with such relevant information as the
Trust may have in relation thereto. Such investment banking firm shall be
instructed to prepare a written valuation report within thirty (30) days after
its appointment, and upon receipt of such valuation report, the Trust shall mail
a copy to each affected holder of Class B EPS. If the valuation as determined by
such investment banking firm is greater than the valuation as determined by the
Board of Trustees, the Trust shall promptly pay the amount of such difference to
each affected holder of Class B EPS. If, however, the valuation as determined by
such investment banking firm is less than the valuation determined by the Board
of Trustees, the Trust may at its option require each affected holder of Class B
EPS to repay the amount of such difference to the Trust, which amount shall be
so repaid by each such holder promptly after receipt of the Trust's request. The
fees and expenses of such investment banking firm shall be paid by the Trust.
6.16.6. REDEMPTION RIGHTS.
(a) In General. Shares of Class B EPS will be redeemable at the option
of the Trust at any time after the Cross-Over Date in accordance with the
provisions of paragraph (b) of
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this Article 6.16.6 (the "Trust Redemption Right") and will be redeemable at the
option of the holders at any time during the period commencing on the Cross-Over
Date and ending on the first anniversary of the Cross-Over Date in accordance
with the provisions of paragraph (c) of this Article 6.16.6 (the "Class B
Redemption Right"). Prior to the Cross-Over Date, shares of Class B EPS will not
be redeemable at the option of either the Trust or the holder. In addition, as
more specifically provided in Article 6.16.7 hereof, upon receipt of a Class B
Conversion/Redemption Notice from any holder of shares of Class B EPS at any
time after the first anniversary of the Cross-Over Date, the Trust will be
required to elect to either exercise the Trust Conversion Right or the Trust
Redemption Right with respect to the shares specified in such Class B
Conversion/Redemption Notice.
(b) Redemption at the Option of the Trust.
(i) Pursuant to the Trust Redemption Right, shares of Class B EPS
may be redeemed in cash in whole or in part at the option of the Trust at any
time and from time to time (in the case of partial redemptions) after the
Cross-Over Date at a redemption price (the "Redemption Price") equal to the
Class B Liquidation Preference of such shares as of the applicable Trust
Redemption Date; provided, however, that the Trust Redemption Right may not be
exercised with respect to any shares of Class B EPS that are already subject to
(A) a Trust Conversion Notice or (B) a Class B Conversion Notice or a Class B
Redemption Notice. Such redemption shall be deemed to have been made as of the
close of business on the applicable Trust Redemption Date, and after such Trust
Redemption Date, provided that the Trust Redemption Price has been duly paid or
set apart for payment, dividends shall cease to accrue on the shares of Class B
EPS called for redemption, such shares shall no longer be deemed to be
outstanding and all rights of the holders of such shares as shareholders of the
Trust shall cease, except the right to receive the Redemption Price, without
interest thereon, upon surrender of the certificates evidencing such shares.
(ii) Notice of any exercise of the Trust Redemption Right (a
"Trust Redemption Notice") shall be given to the holders of the shares of Class
B EPS to be redeemed not less than ten (10) nor more than sixty (60) days prior
to the date fixed for redemption (the "Trust Redemption Date"). Each Trust
Redemption Notice shall be given by first class mail to each holder of shares to
be redeemed at such holder's address as shown on the sharebooks of the Trust and
shall specify (A) the Trust Redemption Date, (B) the number of shares of Class B
EPS to be redeemed from such holder, (C) the Trust Redemption Price, (D) the
place or places where certificates for the shares of Class B EPS to be redeemed
are to be surrendered for payment of the Trust Redemption Price, (E) that
dividends will cease to accrue on the shares of Class B EPS to be redeemed on
the Redemption Date and (F) that the ability of the holders to exercise the
Class B Conversion Right with respect to the shares to be redeemed will
terminate on the Trust Redemption Date. If less than all outstanding shares of
Class B EPS are to be redeemed upon exercise of the Trust Redemption Right, the
shares to be redeemed shall be selected in such manner as the Trust deems
appropriate.
(iii) Upon receipt of a Trust Redemption Notice, each holder of
shares of Class B EPS being redeemed shall surrender to the Transfer Agent a
certificate or certificates evidencing such shares. As soon as practicable, and
in any event within five (5) Business Days,
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after such surrender, the Trust shall pay the applicable Redemption Price to
such holder and, if less than the full number of shares represented by the
certificate or certificates so surrendered are to be redeemed, the Trust shall
deliver to such holder a certificate or certificates evidencing the excess
shares not being redeemed. The Redemption Price shall be payable at the election
of the Trust by check or by wire transfer to an account designated in writing by
the holder at least two (2) Business Days prior to the applicable Trust
Redemption Date, if one has been so designated.
(c) Redemption at the Option of the Holders.
(i) Under the Class B Redemption Right, to the extent permitted
under applicable law, each holder of shares of Class B EPS shall have the right,
at his or her option, to require the Trust at any time or from time to time (in
the case of partial redemptions) after the Cross-Over Date and on or prior to
the first anniversary of the Cross-Over Date to redeem some or all of such
shares in cash at the Redemption Price (determined as of the Class B Redemption
Date); provided, however, that the Class B Redemption Right may not be exercised
with respect to any shares of Class B EPS that are already subject to (A) a
Trust Conversion Notice or a Trust Redemption Notice or (B) a Class B Conversion
Notice. Such redemption shall be deemed to have been made as of the close of
business on the applicable Class B Redemption Date, and after such Class B
Redemption Date, provided that the Redemption Price has been duly paid or set
apart for payment, dividends shall cease to accrue on the shares of Class B EPS
surrendered for redemption, such shares shall no longer be deemed to be
outstanding and all rights of the holders of such shares as shareholders of the
Trust shall cease, except the right to receive the Redemption Price, without
interest thereon.
(ii) A holder of shares of Class B EPS may exercise the Class B
Redemption Right with respect to some or all of such shares by surrendering a
certificate or certificates evidencing the shares to be redeemed, duly endorsed
or assigned to the Trust in blank, to the Transfer Agent accompanied by a
written notice (a "Class B Redemption Notice") in such form as the Trust shall
prescribe from time to time specifying the number of shares (which shall be a
whole number) to be redeemed in accordance with the provisions of this paragraph
(c). As soon as practicable, and in any event within five (5) Business Days,
after receipt of a Class B Redemption Notice and the related certificates (the
date of such receipt being sometimes referred to herein as the "Class B
Redemption Date"), to the extent permitted under applicable law, the Trust shall
pay the Redemption Price to the holder and, if less than the full number of
shares of Class B EPS represented by the certificate or certificates surrendered
together with such Class B Redemption Notice are to be redeemed, the Trust shall
deliver to such holder a certificate or certificates evidencing the excess
shares not being redeemed. The Redemption Price shall be payable at the election
of the Trust by check or by wire transfer to an account designated in writing by
the holder at least two (2) Business Days prior to the applicable Class B
Redemption Date, if one has been so designated.
6.16.7. CLASS B CONVERSION/REDEMPTION ELECTION RIGHT.
In addition to the Class B Conversion Right and the Class B Redemption
Right, at any time after the first anniversary of the Cross-Over Date, each
holder of shares of Class B EPS will have the right (the "Class B
Conversion/Redemption Election Right"), upon written notice to
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the Trust in such form as the Trust shall prescribe from time to time (a "Class
B Conversion/Redemption Notice"), to require that the Trust elect either to
exercise the Trust Conversion Right or the Trust Redemption Right described
below with respect to the shares of Class B EPS held by such holder and
designated in the Class B Conversion/Redemption Notice; provided, however, that
the Class B Conversion Right may not be exercised with respect to any shares of
Class B EPS (A) with respect to which the holder has already given a Class B
Redemption Notice or (B) after the applicable Redemption Date if the Trust has
already given a Trust Redemption Notice with respect to such shares unless, in
either such case, the Trust shall default in the payment of the applicable
Redemption Price required to be paid pursuant to Article 6.16.6 above. Within
five (5) Business Days after receipt of any such Class B Conversion/Redemption
Notice, the Trust shall either give the relevant holder a Trust Conversion
Notice or a Trust Redemption Notice with respect to the shares of Class B EPS
specified in such Class B Conversion/Redemption Notice.
6.16.8. REACQUIRED SHARES TO BE RETIRED.
All shares of Class B EPS which shall have been issued and reacquired
in any manner by the Trust shall be restored to the status of authorized but
unissued shares of beneficial interest in the Trust without designation as to
class.
6.16.9. DEFAULT RIGHTS.
(a) Consequences of Uncured Default. Subject to paragraph (b) of this
Article 6.16.9, in the event that the Trust at any time defaults in its
obligations with respect to any exercise of the Class B Redemption Right, the
Class B Conversion Right or the Class B Conversion/Redemption Election Right,
and such default shall continue for a period of thirty (30) days from the date
that performance of such obligations was due (an "Uncured Default"), then: (i)
the holders of the outstanding shares of Class B EPS will have the rights with
respect to the election of two additional members of the Board of Trustees
described in paragraph (c) of Article 6.16.10 hereof, (ii) the dividend rate on
the Class B EPS will be increased as provided in paragraph (d) of Article 6.16.3
hereof, (iii) the Registration Rights Agreement will be amended to provide the
holders of Class B EPS with registration rights thereunder and (iv) the
Cross-Over Date (if not already past) will be extended by a number of days equal
to the number of days that an Uncured Default continues unremedied. Any Uncured
Default may be waived at any time by the holders of shares of Class B EPS
constituting a majority of all shares of Class B EPS then outstanding.
6.16.10. VOTING.
(a) General Voting Rights. The holders of shares of Class B EPS shall
be entitled to vote upon all matters upon which holders of Trust Shares have the
right to vote, and shall be entitled to the number of votes equal to the largest
whole number of Class B Underlying Trust Shares for which such shares of Class B
EPS could be indirectly exchanged (assuming the exercise of the Class B
Conversion Right and the concurrent exercise of the Class A Exchange Right with
respect to the shares of Class A EPS issuable upon exercise of such Class B
Conversion Right) as of the record date for determination of the shareholders
entitled to vote on
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such matters, or, if no such record date is established, as of the date such
vote is taken or any written consent of shareholders is solicited, such votes to
be counted together with all other shares of beneficial interest in the Trust
having general voting powers and not separately as a class.
(b) Special Voting Rights. So long as any shares of Class B EPS are
outstanding, in addition to any other vote or consent of holders of such shares
required by the Declaration or these Articles Supplementary, the affirmative
vote of at least a majority of the votes entitled to be cast by the holders of
all outstanding shares of Class B EPS, given in person or by proxy, either in
writing without a meeting or by vote at any meeting called for that purpose,
shall be necessary for effecting or validating any amendment, alteration or
repeal of any of the provisions of the Declaration or these Articles
Supplementary that materially and adversely affects the voting powers, rights or
preferences of the holders of the Class B EPS disproportionately (based on the
number of Underlying Class B Trust Shares at the time) to the effect of such
amendment, alteration or repeal on the holders of the Trust Shares; provided,
however, that (i) any amendment of the provisions of the Declaration so as to
authorize or create, or to increase the authorized amount of, any class or
series of shares of beneficial interest in the Trust, whether ranking prior to,
on a parity with or junior to the Class B EPS shall not be deemed to materially
and adversely affect the voting powers, rights or preferences of the holders of
Class B EPS and (ii) no filing with the State Department of Assessments and
Taxation of Maryland by the Trust in connection with a merger, consolidation or
sale of all or substantially all of the assets of the Trust shall be deemed to
be an amendment, alteration or repeal of any of the provisions of the
Declaration or these Articles Supplementary unless such filing expressly
purports to amend, alter or repeal one or more of such provisions. For the
purposes of this paragraph (b), each share of Class B EPS will have one vote per
share.
(c) Default Voting Rights.
(i) Upon the occurrence of any Uncured Default, the number of
trustees then constituting the Board of Trustees shall be increased by two and
the holders of the outstanding shares of Class B EPS shall be entitled to elect
the two additional trustees to serve on the Board of Trustees at any annual
meeting of shareholders, or at a special meeting of the holders of Class B EPS
then outstanding called as provided in subparagraph (ii) below. If such Uncured
Default shall at any time cease to be continuing or shall be waived, then the
right of the holders of the Class B EPS to elect such additional two trustees
shall cease (but subject always to the same provision for the vesting of such
voting rights upon the occurrence of any subsequent Uncured Default) and the
terms of office of all persons elected as trustees by such holders shall
forthwith terminate and the number of trustees constituting the Board of
Trustees shall be reduced accordingly. For the purposes of this paragraph (c),
each share of Class B EPS will have one vote per share.
(ii) At any time after the voting power described in subparagraph
(i) above shall have been vested in the holders of shares of Class B EPS, the
Secretary of the Trust may, and upon the written request of any holder of Class
B EPS (addressed to the Secretary at the principal office of the Trust) shall,
call a special meeting of the holders of the Class B EPS for the election of the
two trustees to be elected by them as herein provided, such call to be made
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by notice similar to that provided in the Trustees' Regulations of the Trust for
a special meeting of the shareholders or as required by law. If any such special
meeting required to be called as above provided shall not be called by the
Secretary within twenty (20) days after receipt of such request, then any holder
of shares of Class B EPS may call such meeting, upon the notice above provided
and for that purpose shall have access to the sharebooks of the Trust. The
trustees elected at any such special meeting shall hold office until the next
annual meeting of the shareholders or special meeting held in lieu thereof if
such office shall not have previously terminated as above provided. If any
vacancy shall occur among the trustees elected by the holders of the Class B
EPS, a successor shall be elected by the Board of Trustees, upon the nomination
of the then-remaining trustee elected by the holders of the Class B EPS or the
successor of such remaining trustee, to serve until the next annual meeting of
the shareholders if such office shall not have previously terminated as provided
above.
6.16.11. RECORD HOLDERS.
The Trust and the Transfer Agent may deem and treat the record holder
of any Class B EPS as the true and lawful owner thereof for all purposes, and
neither the Trust nor the Transfer Agent shall be affected by any notice to the
contrary.
6.16.11. RESTRICTIONS ON OWNERSHIP AND TRANSFER.
The Class B EPS constitute shares of beneficial interest in the Trust
that are governed by and issued subject to all the limitations, terms and
conditions of the Declaration applicable to shares of beneficial interest in the
Trust generally, including, without limitation, the terms and conditions
(including exceptions and exemptions) of Article VI of the Declaration
applicable to shares of beneficial interest in the Trust. The foregoing sentence
shall not be construed to limit the applicability to the Class B EPS of any
other term or provision of the Declaration. No restrictions on the
transferability of shares of Class A EPS shall be enforced by the Trust to the
extent that such restrictions would otherwise cause the Trust to fail to meet
the requirements of Section 856(a)(2) of the Code.
43
EXHIBIT 2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made as of
January 2, 1998 among Starwood Lodging Trust, a real estate investment trust
organized under the laws of the State of Maryland (the "Trust"), Starwood
Lodging Corporation, a Maryland corporation (the "Corporation"), and the persons
and entities whose names appear under the heading "Holders" on the signature
pages hereto (together with their permitted assigns, the "Holders"). Unless
otherwise indicated, capitalized terms used herein are used herein as defined in
Section 1.1.
RECITALS
WHEREAS, pursuant to a Transaction Agreement dated as of September 8,
1997 (the "Transaction Agreement") among the Trust, SLT Realty Limited
Partnership, a Delaware limited partnership (the "Realty Partnership"), the
Corporation, SLC Operating Limited Partnership, a Delaware limited partnership
(the "Operating Partnership"), certain of the Holders and certain other parties,
(i) shares of common stock of Westin Hotels & Resorts Worldwide, Inc., a
Delaware corporation ("Worldwide"), are being converted into, among other
things, shares of Class A Exchangeable Preferred Stock, par value $.01 per
share, of the Trust and shares of Class B Exchangeable Preferred Stock, par
value $.01 per share, of the Trust pursuant to the merger of Worldwide with and
into the Trust provided for in the Transaction Agreement (such shares of Class A
Preferred Stock and Class B Preferred Stock issued pursuant to such merger being
hereinafter called the "Class A Preferred Stock" and "Class B Preferred Stock",
respectively), (ii) on the date hereof certain of the Holders are making capital
contributions to the Realty Partnership in return for the issuance by the Realty
Partnership to such Holders of Class A Units (as defined in the Limited
Partnership Agreement of the Realty Partnership) of the Realty Partnership (such
Class A Units issued by the Realty Partnership to the Holders on the date hereof
being hereinafter called the "Realty Units") and (iii) on the date hereof
certain of the Holders are making capital contributions to the Operating
Partnership in return for the issuance by the Operating Partnership to such
Holders of Class A Units (as defined in the Limited Partnership Agreement of the
Operating Partnership) of the Operating Partnership (such Class A Units issued
by the Operating Partnership to the Holders on the date hereof being hereinafter
called the "Operating Units");
WHEREAS, pursuant to the Transaction Agreement, the parties hereto
desire to set forth the rights of the Holders and the obligations of the Trust
and the Corporation to cause the registration of the Registrable Securities (as
defined in Section 1.1) pursuant to the Securities Act;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
<PAGE>
SECTION 1. DEFINITIONS AND USAGE.
1.1. DEFINITIONS. As used in this Agreement:
Beneficially Owning. "Beneficially Owning" means owning Trust Shares
directly, indirectly or constructively by a Person through the application of
Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code, or
Section 544 of the Code, as modified by Section 856(h) of the Code.
Business Day. "Business Day" means any day other than Saturday, Sunday
and any day on which commercial banks are not open to do business in New York,
New York.
Class A Preferred Stock. "Class A Preferred Stock" shall have the
meaning set forth in the recitals.
Class B Preferred Stock. "Class B Preferred Stock" shall have the
meaning set forth in the recitals.
Code. "Code" shall mean the Internal Revenue Code of 1986, and the
rules and regulations promulgated thereunder, as amended from time to time.
Commission. "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
Continuously Effective. "Continuously Effective", with respect to a
specified registration statement, shall mean that such registration statement
shall not cease to be effective and available for Transfers of Registrable
Securities thereunder for longer than either (i) any ten (10) consecutive
Business Days, or (ii) an aggregate of fifteen (15) Business Days during the
period specified in the relevant provision of this Agreement.
Corporation Shares. "Corporation Shares" shall mean the shares of
common stock, par value $.01 per share, of the Corporation.
Effectiveness Period. "Effectiveness Period" shall have the meaning set
forth in Section 2.2.
Effective Time. "Effective Time" shall mean the date on which the
Commission declares the Shelf Registration Statement effective or on which the
Shelf Registration Statement otherwise becomes effective.
Electing Holder. "Electing Holder" shall mean a Holder that elects to
require the Trust and the Corporation to file a Shelf Registration Statement
pursuant to Section 2 or to participate in a Piggyback Registration pursuant to
Section 3.
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Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of
1934 and the rules and regulations of the Commission thereunder, all as the same
shall be in effect at the time.
Holders. "Holders" shall have the meaning set forth in the recitals.
Operating Partnership. "Operating Partnership" shall have the meaning
set forth in the recitals.
Operating Units. "Operating Units" shall have the meaning set forth in
the recitals.
Original Securities "Original Securities" shall have the meaning set
forth in the definition of "Registrable Securities".
Ownership Limit. "Ownership Limit" when used with respect to Trust
Shares, has the meaning set forth in the Declaration of Trust of the Trust and,
when used with respect to the Corporation Shares, has the meaning set forth in
the Restated Articles of Incorporation of the Corporation, in each case as
amended from time to time.
Paired Shares. "Paired Shares" shall mean the Trust Shares and the
Corporation Shares which are "paired" pursuant to the Pairing Agreement dated
June 25, 1980 between the Trust and the Corporation, as it may be amended from
time to time.
Person. "Person" shall mean any individual, corporation, partnership,
joint venture, association, joint-stock company, limited liability company,
trust, unincorporated organization or government or other agency or political
subdivision thereof.
Prospectus. "Prospectus" shall mean the prospectus (including, without
limitation, any preliminary prospectus, any final prospectus and any prospectus
that discloses information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A under the
Securities Act) included in the Shelf Registration Statement, as amended or
supplemented by any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by the Shelf
Registration Statement and by all other amendments and supplements to such
prospectus, including all material incorporated by reference in such prospectus
and all documents filed after the date of such prospectus by the Trust and the
Corporation under the Exchange Act and incorporated by reference therein.
Piggyback Registration. "Piggyback Registration" shall have the meaning
set forth in Section 3.
Realty Partnership. "Realty Partnership" shall have the meaning set
forth in the recitals.
Realty Units. "Realty Units" shall have the meaning set forth in the
recitals.
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<PAGE>
Register, Registered and Registration. "Register", "registered", and
"registration" shall refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Securities
Act, and the declaration or ordering by the Commission of effectiveness of such
registration statement or document.
Registrable Securities. "Registrable Securities" shall mean: (i) the
Paired Shares issued or issuable upon exchange or conversion of any of the Class
A Preferred Stock, Class B Preferred Stock, Realty Units or Operating Units
issued in connection with the Transaction Agreement (the "Original Securities"),
(ii) any Paired Shares or other securities issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange by the
Trust and the Corporation generally for, or in replacement by the Trust and the
Corporation generally of, such Paired Shares (or Original Securities that are
convertible or exchangeable for Paired Shares); (iii) any securities issued in
exchange for Paired Shares (or Original Securities that are convertible or
exchangeable for Paired Shares) in any merger or reorganization of the Trust and
the Corporation; provided, however, that Registrable Securities shall not
include any securities which have theretofore been registered and sold pursuant
to the Securities Act or which have been publicly sold pursuant to Rule 144
under the Securities Act or any similar rule promulgated by the Commission
pursuant to the Securities Act and (iv) during the continuance of any default by
Starwood Trust of its obligations under the terms of the Class B EPS, the shares
of Class B EPS received in the transactions contemplated by the Transaction
Agreement; provided further, that the Trust and the Corporation shall have no
obligation under Sections 2 and 3 to register any Registrable Securities if
nationally recognized counsel for the Trust and the Corporation, experienced in
such matters and reasonably satisfactory to such Holders, delivers (after
consultation with counsel for such Holders) to the Holders of such Registrable
Securities an opinion of counsel to the effect that the proposed sale or
disposition of all the Registrable Securities for which registration was
requested does not require registration under the Securities Act for a sale or
disposition in a single public sale, and the Trust and the Corporation offer to
remove any and all legends restricting transfer from the certificates evidencing
such Registrable Securities. Notwithstanding anything to the contrary set forth
herein, Registrable Securities shall not include (x) any Realty Units, Operating
Units, Class A EPS or, except as provided above, Class B EPS or (y) securities
convertible or exchangeable for Paired Shares which are not being issued in
connection with the Transaction Agreement or Paired Shares which are acquired
other than in connection with the Transaction Agreement (which shall not be
deemed to include Paired Shares which are acquired pursuant to the conversion or
exchange of securities acquired pursuant to the Transaction Agreement).
Registrable Securities then outstanding. "Registrable Securities then
outstanding" shall mean, with respect to a specified determination date, the
Registrable Securities owned by all Holders on such date and the Registrable
Securities which are issuable upon conversion or exchange of Class A Preferred
Stock, Class B Preferred Stock, Realty Units and Operating Units owned by all
Holders on such date.
Registration Expenses. "Registration Expenses" shall have the meaning
set forth in Section 6.1.
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<PAGE>
REIT Rules. "REIT Rules" shall mean the rules under the Code, governing
ownership limits and rules under the Code applicable to related party rents.
Required Holder or Required Holders. "Required Holder" shall have the
meaning set forth in Section 2.1.
Securities Act. "Securities Act" shall mean the Securities Act of 1933
and the rules and regulations of the Commission thereunder, all as the same may
be in effect at the time.
Selling Holder. "Selling Holder" shall mean, with respect to a
specified offering pursuant to this Agreement, a Holder whose Registrable
Securities are included in such registration.
Shelf Registration Statement. "Shelf Registration Statement" shall mean
a "shelf" registration statement filed under the Securities Act providing for
the registration of, and the sale on a continuous or delayed basis by the
Holders of, all or a portion of the Registrable Securities pursuant to Rule 415
under the Securities Act and/or any similar rule that may be adopted by the
Commission, filed by the Trust and the Corporation pursuant to the provisions of
Section 2 of this Agreement, including the Prospectus contained therein, any
amendments and supplements to such registration statement, including
post-effective amendments, and all exhibits and all material incorporated by
reference in such registration statement.
Transaction Agreement. "Transaction Agreement" shall have the meaning
set forth in the recitals.
Transfer. "Transfer" shall mean and include the act of selling, giving,
transferring, creating a trust (voting or otherwise), assigning or otherwise
disposing of (other than pledging, hypothecating or otherwise transferring as
security) (and correlative words shall have correlative meanings); provided
however, that any transfer or other disposition upon foreclosure or other
exercise of remedies of a secured creditor after an event of default under or
with respect to a pledge, hypothecation or other transfer as security shall
constitute a "Transfer".
Trust Shares. "Trust Shares" shall mean the shares of beneficial
interest, $.01 par value, of the Trust.
Underwriters' Representative. "Underwriters' Representative" shall mean
the managing underwriter, or, in the case of a co-managed underwriting, the
managing underwriter designated as the Underwriters' Representative by the
co-managers.
Units. "Units" shall mean Realty Units and Operating Units.
Violation. "Violation" shall have the meaning set forth in Section 7.1.
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<PAGE>
1.2. USAGE.
(i) References to a Person are also references to its assigns and
successors in interest (by means of merger, consolidation or sale of all or
substantially all the assets of such Person or otherwise, as the case may be).
(ii) References to Registrable Securities "owned" by a Holder shall
include Registrable Securities beneficially owned by such Person but which are
held of record in the name of a nominee, trustee, custodian, or other agent, but
shall exclude Paired Shares held by a Holder in a fiduciary capacity for
customers of such Person.
(iii) References to a document are to it as amended, waived and
otherwise modified from time to time and references to a statute or other
governmental rule are to it as amended and otherwise modified from time to time
(and references to any provision thereof shall include references to any
successor provision).
(iv) References to Sections or to Schedules or Exhibits are to sections
hereof or schedules or exhibits hereto, unless the context otherwise requires.
(v) The definitions set forth herein are equally applicable both to the
singular and plural forms and the feminine, masculine and neuter forms of the
terms defined.
(vi) The term "including" and correlative terms shall be deemed to be
followed by "without limitation" whether or not followed by such words or words
of like import.
(vii) The term "hereof" and similar terms refer to this Agreement as a
whole.
(viii) The "date of" any notice or request given pursuant to this
Agreement shall be determined in accordance with Section 11.
SECTION 2. SHELF REGISTRATIONS.
2.1. Subject to Section 2.3 and 2.4, if one or more Holders (each, a
"Required Holder") of at least 1,257,156 shares or Units (or any combination
thereof) of Registrable Securities (subject to adjustment in the event the
exchange ratios of the Original Securities are adjusted pursuant to their terms)
shall make a written request to the Trust and the Corporation to file with the
Commission a Shelf Registration Statement relating to the offer and sale of the
Registrable Securities held by the Required Holder or Required Holders, the
Trust and the Corporation shall, within 60 calendar days following the date on
which such request is received, so file such Shelf Registration Statement and,
thereafter, shall use all reasonable efforts to cause such Shelf Registration
Statement to be declared effective under the Securities Act within 60 calendar
days after the date of filing of such Shelf Registration Statement. Within seven
calendar days after receiving the request from such Required Holder or Required
Holders, the Trust and the Corporation will send written notice to the other
Holders of such request. Such request shall specify the number of Registrable
Securities to which it relates and the possible intended methods
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<PAGE>
of disposition thereof and shall state that the Required Holder or Required
Holders intends to distribute publicly all such Registrable Securities within
two years after the filing of such Shelf Registration Statement. The Trust and
the Corporation shall include in such Shelf Registration Statement all or any
portion of the Registrable Securities requested by the Required Holders together
with all or such portion of the Registrable Securities of any Holder or Holders
joining in such request as are specified in a written request received by the
Trust and the Corporation within ten Business Days after written notice from the
Trust and the Corporation is given above. Prior to filing the Shelf Registration
Statement, the Trust and the Corporation will furnish a draft thereof to the
Holders and shall not file the Shelf Registration Statement (other than reports,
proxy statement and other documents filed under the Exchange Act) with the
Commission without the prior consent of the Holders, which consent shall not be
unreasonably withheld or delayed. Notwithstanding anything to the contrary in
this Agreement, the Trust and the Corporation shall have no obligation under
this Section 2 or under Section 3 to any Holder of Registrable Securities to the
extent such Holder is restricted under the Transaction Agreement or the Other
Agreement (as defined in the Transaction Agreement) from selling or otherwise
transferring such Registrable Securities; provided, however, that in the event
of any transaction constituting a Change of Control (as defined in the Other
Agreement) specified in clause (3) of such definition in which the Holders of
Registrable Securities receive securities in exchange for the Registrable
Securities, the Trust and, the Corporation agree that such transaction will be
registered under the Securities Act; provided further that in the event of any
Change of Control specified in clause (2) of the definition thereof (or any
announced proxy solicitation intended to effect such a Change of Control) this
sentence shall be deemed to be of no further force and effect.
2.2. The Trust and the Corporation shall use all reasonable efforts to
keep the Shelf Registration Statement Continuously Effective in order to permit
the Prospectus forming a part thereof to be usable by Holders for resales of
Registrable Securities until the Registrable Securities registered thereunder
have been distributed as contemplated thereby, but not later than the second
anniversary of the Effective Date; provided that such two-year period will be
extended for so long as such Holders reasonably request (based on advice of
counsel that the proposed sale or disposition of all such Registrable Securities
requires registration under the Securities Act) (such period being referred to
herein as the "Effectiveness Period").
2.3. The Trust and the Corporation shall be entitled to postpone for up
to 90 calendar days (provided that if such a 90-day postponement has occurred
previously in the prior 365 days up to 45 days but no more) the filing,
effectiveness, supplementing or amending of the Shelf Registration Statement or
any supplement to the Prospectus thereto otherwise required to be prepared and
filed pursuant to this Section 2 and may suspend any sales pursuant to the Shelf
Registration Statement, the Prospectus and any supplements to the Prospectus
(each, a "Blackout Period"), if the Board of Trustees of the Trust and the Board
of Directors of the Corporation determine in good faith and on the advice of
counsel that the disclosure required in such registration and the Transfer of
Registrable Securities contemplated thereby would materially adversely affect
any material financing, acquisition, disposition, reorganization or other
material transaction involving the Realty Partnership, the Operating
Partnership, the Trust or the Corporation or any of their respective
subsidiaries and the Trust or the Corporation, as the case
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<PAGE>
may be, promptly gives the Required Holder or Required Holders notice of such
determination. Each Blackout Period shall terminate upon the earlier to occur of
(x) the completion or abandonment of the financing, acquisition, disposition,
reorganization, or other transaction and (y) the public disclosure by either the
Trust or the Corporation or public admission by either the Trust or the
Corporation of such information.
2.4. Notwithstanding anything in this Agreement to the contrary, (a) in
no event will the Trust or the Corporation be obligated to effect more than one
Shelf Registration Statement upon the request, as a Required Holder, of each of
WHWE, Marswood or Nomura (each as defined in the Transaction Agreement), it
being understood and agreed that any Shelf Registration Statement withdrawn
prior to effectiveness shall not count as WHWE's, Marswood's or Nomura's one
Shelf Registration Statement, and (b) no registration shall be effected under
this Agreement and no Transfer of Registrable Securities may be effected if as a
result thereof the Trust would violate the REIT Rules in any respect or if such
registration or Transfer would result in any Person Beneficially Owning Paired
Shares in excess of the Ownership Limit.
2.5. The Shelf Registration Statement shall be on such appropriate
registration form of the Commission as shall be selected by the Trust and the
Corporation and shall permit the disposition of the Registrable Securities in
accordance with the intended method or methods of disposition specified in the
request pursuant to Section 2.1.
2.6. If any sale under the Shelf Registration Statement involves an
underwritten offering (whether on a "firm commitment", "best efforts" or "all
reasonable efforts" basis or otherwise), the Required Holder or Required Holders
shall select the underwriter or underwriters and manager or managers to
administer such underwritten offering. If WHWE and its Affiliates collectively
hold (i) more than 50%, or (ii) more than 30% but not more than 50%, of the
Registrable Securities to be offered in such underwritten offering, then
Goldman, Sachs & Co. or an affiliate thereof ("Goldman Sachs") shall be (i) the
underwriter or (ii) a co-manager, respectively; provided, however, that if any
Holder or Holders in addition to WHWE is a Required Holder then such additional
Holder or Holders may select a co-manager, in addition to Goldman Sachs. Each
Person so selected shall be acceptable to the Trust and the Corporation;
provided, however, that Goldman Sachs shall be deemed to be acceptable to the
Trust and the Corporation.
2.7. In connection with an underwritten offering by one or more Selling
Holders of Registrable Securities if the Underwriters' Representative advises
the Selling Holders that, in its opinion, the amount of securities requested to
be included in such offering exceeds the amount which can be sold in such
offering within a price range acceptable to the Selling Holder or Holders,
securities shall be included in such offering, to the extent of the amount which
can be sold within such price range, pro-rata based on the estimated gross
proceeds from the sale thereof.
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SECTION 3. PIGGYBACK REGISTRATION.
3.1. If, at any time, the Trust and the Corporation propose to register
securities under the Securities Act in connection with a public offering (other
than a registration statement on Form S-4 or S-8 (or any replacement or
successor forms)), the Trust and the Corporation shall promptly give the Holders
written notice of such registration. Upon the written request of each Holder
given as promptly as practicable but in any event within twenty (20) days
following the date of such notice, the Trust and the Corporation shall cause to
be included in such registration statement and use their respective reasonable
efforts to be registered under the Securities Act all the Registrable Securities
that each such Holder shall have requested to be registered; provided, however,
that such right of inclusion shall not apply to any registration statement
covering an offering of debt securities or convertible debt securities that does
not include an offering of equity securities (other than those underlying such
convertible debt securities) (any such registration in which Holders participate
pursuant to this Section 3.1 being referred to as a "Piggyback Registration").
The Trust and the Corporation shall have the absolute right to delay, withdraw
or cease to prepare or file any registration statement for any offering referred
to in this Section 3 without any obligation or liability to any Holder, it being
understood that any Registrable Securities previously included in any such
withdrawn Registration Statement shall not cease to be Registrable Securities by
reason of such inclusion or withdrawal.
3.2. If the Underwriters' Representative shall advise the Trust and the
Corporation that, in its opinion, the amount of Registrable Securities requested
to be included in a Piggyback Registration would adversely affect such offering,
or the timing thereof, then the Trust and the Corporation will include in such
registration, to the extent of the amount and class which the Trust and the
Corporation are so advised can be sold without such adverse effect in such
offering: first, all securities proposed to be sold by the Trust and the
Corporation for their own accounts; second, all securities, if any, requested to
be included in a registration statement pursuant to the exercise of demand
registration rights granted by the Trust and the Corporation; and third, the
Registrable Securities requested to be included in such registration by Holders
pursuant to this Section 3 and all other securities requested to be included in
such registration pursuant to the exercise of piggyback rights granted to other
entities, pro rata based on the estimated gross proceeds from the sale thereof.
SECTION 4. REGISTRATION PROCEDURES. In connection with the Shelf
Registration Statement the Trust and the Corporation shall, as soon as
reasonably practicable (and, in any event, subject to the terms of this
Agreement, at or before the time required by applicable laws and regulations),
but only during the Effectiveness Period:
4.1. Promptly prepare and file with the Commission such amendments and
supplements to the Shelf Registration Statement and the Prospectus as may be
necessary to comply with the provisions of the Securities Act and rules
thereunder with respect to the disposition of all securities covered by the
Shelf Registration Statement; provided, however, no such amendment or supplement
(other than reports, proxy statements and other documents filed under the
Exchange Act) shall be filed until the Holders have had a reasonable opportunity
to comment thereon and have provided their consent to such filing. If the
offering is an underwritten
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<PAGE>
offering, the Trust and the Corporation shall amend the Shelf Registration
Statement or supplement the Prospectus whenever required by the terms of the
underwriting agreement entered into pursuant to Section 4.4. The Trust and the
Corporation shall amend the Shelf Registration Statement or supplement the
Prospectus so that it will remain current and in compliance with the
requirements of the Securities Act during the Effectiveness Period and if during
such period any event or development occurs as a result of which the Shelf
Registration Statement or Prospectus contains a misstatement of a material fact
or omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, the Trust or the Corporation shall as promptly as
practicable notify each Holder, amend the Shelf Registration Statement and
supplement the Prospectus so that each will thereafter comply with the
Securities Act and furnish to each Holder, underwriter and manager such amended
or supplemented Prospectus, which each such Holder shall thereafter use and
shall use all reasonable efforts to cause any manager or underwriter to use in
the Transfer of Registrable Securities covered by the Shelf Registration
Statement. Upon receipt of notice pursuant to this Section 4.1, each such Holder
shall cease making offers or Transfers of Registrable Shares pursuant to the
prior Prospectus. In the event that any Registrable Securities included in a
registration statement subject to, or required by, this Agreement remain unsold
at the end of the period during which the Trust and Corporation are obligated to
use their respective reasonable efforts to maintain the effectiveness of such
registration statement, the Trust and the Corporation may file a post-effective
amendment to the registration statement for the purpose of removing such
Registrable Securities from registered status.
4.2. Furnish to each Holder of Registrable Securities, without charge,
such numbers of copies of the Shelf Registration Statement, any pre-effective or
post-effective amendment thereto, the Prospectus, including each preliminary
prospectus and any amendments or supplements thereto, in each case in conformity
with the requirements of the Securities Act and the rules thereunder, documents
incorporated by reference in the Shelf Registration Statement and such other
related documents as any such Holder may reasonably request in order to
facilitate the disposition of Registrable Securities owned by such Holder.
4.3. Use their respective reasonable best efforts (i) to register and
qualify the securities covered by such registration statement under such other
securities or "blue sky" laws of such states where an exemption from
registration is not available and as shall be reasonably requested by the
Underwriters' Representative or any Holder and (ii) to obtain the withdrawal of
any order suspending the effectiveness of the Shelf Registration Statement, or
the lifting of any suspension of the qualification (or exemption from
qualification) of the offer and transfer of any of the Registrable Securities in
any state, at the earliest possible moment; provided, however, that neither the
Trust nor the Corporation shall be required in connection therewith to (A)
qualify as a foreign corporation or other foreign entity or as a dealer in
securities in any jurisdiction where it would not otherwise be required to
qualify but for the requirements of this Section 4.3 or (B) consent to general
service of process in any such jurisdiction, provided that the Trust and the
Corporation shall execute consents to service of process in the forms
customarily requested in connection with the Shelf Registration Statement or
qualification of securities under any applicable state or securities or blue sky
laws.
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4.4. In the event of any underwritten offering, use their respective
reasonable efforts to enter into and perform their respective obligations under
an underwriting agreement (including indemnification and contribution
obligations of underwriters), in usual and customary form, with the managing
underwriter or underwriters of such offering and take such other actions as are
reasonably necessary in connection therewith in order to expedite or facilitate
the disposition of Registered Securities; and (A) make such representations and
warranties with respect to the Shelf Registration Statement or any
post-effective amendment or supplement thereto, Prospectus or any amendment or
supplement thereto, and documents incorporated by reference, if any, to the
Holders and the managers or underwriters of the Registered Securities in form,
substance and scope as are customary in connection with transactions of such
kind; (B) if requested by the managing underwriters or lead placement agent of
the Registered Securities, obtain an opinion of outside counsel to the
Corporation and the Trust in customary form and covering matters of the type
customarily covered by such an opinion, addressed to such placement agent or
underwriters named in the underwriting agreement and dated the date of the
closing of the sale of the Registrable Securities relating thereto; (C) if
requested by the managing underwriters or lead placement agent of the
Registrable Securities, (I) obtain "comfort" letters (or, if a "comfort" letter
or "comfort" letters may not be delivered under applicable accounting
pronouncements or standards, a "procedures" letter) and an update thereof from
each of the independent certified public accountants who have certified the most
recent audited financial statements that are incorporated by reference in the
Shelf Registration Statement, which letters shall be addressed to the sales or
placement agent or any underwriter of the Registrable Securities and shall be
dated the date of the Prospectus used in connection with an offering of
Registrable Securities and/or the date of the closing of the sale of Registrable
Securities, such letter or letters to be in customary form and covering such
matters of the type customarily covered by "comfort" letters of such type, and
(II) use their respective reasonable best efforts to have such letter addressed
to the Selling Holders of Registrable Securities (provided, however, that such
letters need not be addressed to any Holder to whom, in the reasonable opinion
of the Issuers' independent certified public accountants, addressing such letter
is not permissible under applicable accounting standards); and (D) deliver such
documents and certificates as may be reasonably requested by the Selling Holder
and the sales or placement agent or any underwriter of Securities to evidence
compliance with any conditions contained in the underwriting agreement or other
agreement entered into by the Trust and the Corporation. The Trust and the
Corporation shall also cooperate with the Selling Holders, and the Underwriters'
Representative for such offering in the marketing of the Registrable Securities,
including making available the officers, making the officers available to
participate in such "road show" presentations and conference calls as the
Selling Holders may reasonably request, accountants, counsel, premises, books
and records of the Trust and the Corporation for such purpose.
4.5. Promptly notify each Selling Holder and the Underwriter's
Representative of any stop order issued or threatened to be issued by the
Commission in connection therewith and take all reasonable actions required to
prevent the entry of such stop order or to remove it if entered.
4.6. Make available for inspection by any Selling Holder, any
underwriter participating in such offering and the representatives of such
Selling Holder and Underwriter (but
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not more than one firm of counsel to such Selling Holders), all financial and
other information as shall be reasonably requested by them, and provide any
Selling Holder, any underwriter participating in such offering and the
representatives of such Selling Holder and Underwriter the reasonable
opportunity to discuss the business affairs of the Trust and the Corporation
with their officers and independent public accountants who have certified the
audited financial statements included in such registration statement, in each
case all as necessary to enable them to exercise their due diligence
responsibility under the Securities Act; provided, however, that information
that the Trust or the Corporation determine to be confidential and which the
Trust or the Corporation advise such Person in writing, is confidential shall
not be disclosed unless such Person signs a confidentiality agreement reasonably
satisfactory to the Trust and the Corporation or the related Selling Holder of
Registrable Securities agrees to be responsible for such Person's breach of
confidentiality on terms reasonably satisfactory to the Trust and the
Corporation.
4.7. Promptly notify each Holder, each sales or placement agent and
each underwriter (A) when the Shelf Registration Statement or any related
Prospectus or any amendment or supplement has been filed, and, with respect to
the Shelf Registration Statement or any amendment thereto, when the same has
become effective or (B) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the related Prospectus or for
additional information.
4.8. Cooperate with each Holder and any sales or placement agent or
underwriter of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold
pursuant to the Shelf Registration Statement, which certificates shall not bear
any restrictive legends except as required by law or as customarily borne by
securities held by DTC or any similar depository; and, in the case of an
underwritten offering, enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriter or
underwriters thereof may request in writing at least two business days prior to
any sale of the Registrable Securities.
4.9. Make available to their respective security Holders separate and
combined earnings statements, as soon as reasonably practicable but in no event
later than 45 days after the end of the period of twelve months commencing on
the first day of any fiscal quarter next succeeding each sale by any Selling
Holder, which earnings statements shall cover such twelve month period and shall
satisfy the provisions of Section 11(a) of the Securities Act and may be
prepared in accordance with Rule 158 under the Securities Act; provided,
however, that the Trust's and the Corporation's obligations under this Section
4.9 may be satisfied by the timely filing of quarterly or annual reports under
the Exchange Act containing the information specified by Rule 158.
4.10. In the event that any broker-dealer registered under the Exchange
Act shall be an "affiliate" (as defined in Rule 2720(b)(1) of the NASD Rules (or
any successor provision thereto)) of the Trust or the Corporation or has a
"conflict of interest" (as defined in Rule 2720(b)(7) of the NASD Rules (or any
successor provision thereto)) and such broker-dealer shall underwrite,
participate as a member of an underwriting syndicate or selling group or assist
in the distribution of any Registrable Securities covered by the Shelf
Registration Statement,
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whether as a holder of such Registrable Securities or as an underwriter, a
placement or sales agent or a broker or dealer in respect thereof, or otherwise,
the Trust and the Corporation shall assist such broker-dealer in complying with
the requirements of the NASD Rules, including, without limitation, by (A)
engaging a "qualified independent underwriter" (as defined in Rule 2720(b)(15)
of the NASD Rules (or any successor provision thereto)) to participate in the
preparation of the registration statement relating to such Registrable
Securities, to exercise usual standards of due diligence in respect thereto and
to recommend the public offering price of such Registrable Securities, (B)
indemnifying such qualified independent underwriter to the extent of the
indemnification of underwriters provided in Section 7 hereof, and (C) providing
such information, known to the Trust or the Corporation to such broker-dealer as
may be required in order for such broker-dealer to comply with the requirements
of the NASD Rules.
4.11. Use their respective reasonable efforts to cause the Registrable
Securities covered by the Shelf Registration Statement (i) if the Paired Shares
are then listed on a securities exchange or included for quotation in a
recognized trading market, to continue to be so listed or included for a
reasonable period of time after the offering, and (ii) to be registered with or
approved by such other United States or state governmental agencies or
authorities as may be necessary by virtue of the business and operations of the
Trust and the Corporation to enable the Selling Holders of Registrable
Securities to consummate the disposition of such Registrable Securities.
4.12. Take such other actions as are reasonably required in order to
expedite or facilitate the disposition of Registrable Securities included in
each such offering.
SECTION 5. HOLDERS' OBLIGATIONS. It shall be a condition precedent to
the obligations of the Trust and the Corporation to take any action pursuant to
this Agreement with respect to the Registrable Securities of any Selling Holder
of Registrable Securities that such Selling Holder shall:
5.1. Furnish to the Trust and the Corporation such information
regarding such Selling Holder, the number of the Registrable Securities owned by
it, and the intended method of disposition of such securities as shall be
required to effect the offering of such Selling Holder's Registrable Securities,
and to reasonably cooperate with the Trust and the Corporation in preparing the
Shelf Registration Statement and the Prospectus (together with any amendments or
supplements thereto).
5.2. Agree to sell their Registrable Securities to the underwriters at
the same price and on substantially the same terms and conditions as the Trust
and the Corporation or the other Persons on whose behalf the Piggyback
Registration statement or supplement to the Prospectus was being filed have
agreed to sell their securities, and, in the case of a registration under
Section 3, to execute the underwriting agreement agreed to by the Trust and the
Corporation and the Selling Holders.
SECTION 6. EXPENSES OF REGISTRATION. Expenses in connection with
registrations pursuant to this Agreement shall be allocated and paid as follows:
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6.1. With respect to the Shelf Registration Statement and each offering
pursuant thereto and pursuant to the Prospectus, each of the Trust and the
Corporation shall bear and pay all expenses incurred in connection with any
registration, filing, or qualification of Registrable Securities with respect to
such Registration for each Selling Holder, including all registration, filing
and National Association of Securities Dealers, Inc. fees, all fees and expenses
of complying with securities or blue sky laws, all printing expenses, messenger
and delivery expenses, the reasonable fees and disbursements of counsel for the
Trust and the Corporation, and of the independent public accountants for the
Trust and the Corporation, including the expenses of "cold comfort" letters
required by or incident to such performance and compliance (the "Registration
Expenses"), but excluding underwriting discounts and commissions relating to
Registrable Securities (which shall be paid on a pro rata basis by the Selling
Holders) and all fees and expenses of counsel for the Selling Holders; provided,
however, that the Trust and the Corporation shall not be required to pay for any
expenses of any registration proceeding begun pursuant to Section 2 if the
registration is subsequently withdrawn by the Required Holder (in which case the
Selling Holders shall bear such expenses), unless, in the case of a Shelf
Registration, the Required Holder agrees that such withdrawn registration shall
have constituted the Shelf Registration available to it under Section 2 hereof.
The Trust and the Corporation each agree between themselves that they shall bear
and pay Registration Expenses in an amount equal to their respective Issuance
Percentage of such Registration Expenses and that they shall reimburse each
other to the extent necessary to cause each of them to so bear and pay such
respective amounts.
6.2. The Trust and the Corporation shall bear and pay all Registration
Expenses incurred in connection with any Piggyback Registrations pursuant to
Section 3, but excluding underwriting discounts and commissions relating to
Registrable Securities (which shall be paid on a pro rata basis by the Selling
Holders) and all fees and expenses of counsel for the Selling Holders.
SECTION 7. INDEMNIFICATION; CONTRIBUTION. If any Registrable Securities
are included in a registration statement under this Agreement:
7.1. To the extent permitted by applicable law, each of the Trust and
the Corporation, severally and not jointly, shall indemnify and hold harmless
each Selling Holder, each Person, if any, who controls such Selling Holder
within the meaning of the Securities Act, each Person who participates as a
sales or placement agent or underwriter in any offering of the Registered
Securities and each officer, director, partner and employee of such Selling
Holder and such controlling Person, against any and all losses, claims, damages,
liabilities and expenses (joint or several), including reasonable attorneys'
fees and disbursements and reasonable expenses of investigation, incurred by
such party or to which such party may become subject pursuant to any actual or
threatened action, suit, proceeding or investigation, or to which any of the
foregoing Persons may otherwise become subject under the Securities Act, the
Exchange Act or other federal or state laws, insofar as such losses, claims,
damages, liabilities and expenses arise out of or are based upon any of the
following statements, omissions or violations (collectively a "Violation"):
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(i) Any untrue statement or alleged untrue statement of a material fact
contained in such registration statement, including any preliminary Prospectus
or final Prospectus contained therein, or any amendments or supplements thereto;
or
(ii) the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements therein not
misleading;
provided, however, that the indemnification required by this Section 7.1 shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or expense if such settlement is effected by the indemnified person
without the consent of the Trust or the Corporation (which consent shall not be
unreasonably withheld), nor shall the Trust or the Corporation be liable in any
such case for any such loss, claim, damage, liability or expense to the extent
that it arises out of or is based upon a Violation which occurs in reliance upon
and in conformity with information furnished to the Trust or the Corporation by
the indemnified party expressly for use in connection with such registration;
and provided further that the indemnity agreement contained in this Section 7
shall not apply to the extent that any such loss is based on or arises out of an
untrue statement or alleged untrue statement of a material fact, contained in or
omitted from any preliminary Prospectus if the final Prospectus shall correct
such untrue statement or alleged untrue statement, or such omission or alleged
omission, and a copy of the final Prospectus has not been sent or given to such
person at or prior to the confirmation of sale to such person if an underwriter,
placement agent or Selling Holder was under an obligation to deliver such final
Prospectus and failed to do so.
7.2. To the extent permitted by applicable law, each Selling Holder
shall indemnify and hold harmless the Trust, the Corporation, each of the
Trustees of the Trust, each of the directors of the Corporation, each of the
officers of the Trust or the Corporation who shall have signed the registration
statement, each Person, if any, who controls the Trust or the Corporation within
the meaning of the Securities Act, any other Selling Holder, any controlling
Person of any such other Selling Holder and each officer, director, partner, and
employee of such other Selling Holder and such controlling Person, against any
and all losses, claims, damages, liabilities and expenses (joint and several),
including reasonable attorneys' fees and disbursements and reasonable expenses
of investigation, incurred by such party pursuant to any actual or threatened
action, suit, proceeding or investigation, or to which any of the foregoing
Persons may otherwise become subject under the Securities Act, the Exchange Act
or other federal or state laws, but only insofar as such losses, claims,
damages, liabilities and expenses arise out of or are based upon any Violation,
in each case to the extent that, but only to the extent that, such Violation
arises out of or is based upon and was made in reliance upon information
furnished by such Selling Holder expressly for use in connection with such
registration; provided, however, that (x) the indemnification required by this
Section 7.2 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or expense if such settlement (A) is effected without
the consent of the relevant Selling Holder (which consent shall not be
unreasonably withheld), (B) does not include an unconditional release of the
indemnified party from all liability arising out of such action or claim or (C)
includes a statement as to, or an admission of, fault, culpability or a failure
to act, by or on behalf of any indemnified party and (y) in no event shall the
amount of any
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indemnity under this Section 7.2 exceed the net proceeds from the applicable
offering received by such Selling Holder.
7.3. Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, suit, proceeding, investigation
or threat thereof made in writing for which such indemnified party may make a
claim under this Section 7, such indemnified party shall deliver to the
indemnifying party a written notice thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with nationally recognized counsel experienced in such
matters reasonably satisfactory to the indemnified party; provided, however,
that an indemnified party shall have the right to retain its own counsel and to
not have the indemnifying party assume its defense, with the fees, disbursements
and expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time following the commencement of any such action, if
materially prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
7 to the extent of such prejudice but shall not relieve the indemnifying party
of any liability that it may have to any indemnified party otherwise than
pursuant to this Section 7. Any fees and expenses incurred by the indemnified
party (including any fees and expenses incurred in connection with investigating
or preparing to defend such action or proceeding) shall be paid to the
indemnified party, as incurred, within thirty (30) days of written notice
thereof to the indemnifying party (regardless of whether it is ultimately
determined that an indemnified party is not entitled to indemnification
hereunder). Any such indemnified party shall have the right to employ separate
counsel in any such action, claim or proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be the expenses
of such indemnified party unless (i) the indemnifying party has agreed to pay
such fees and expenses or (ii) the indemnifying party shall have failed to
promptly assume the defense of such action, claim or proceeding or (iii) the
named parties to any such action (including any impleaded parties) include both
such indemnified party and the indemnifying party, and such indemnified party
shall have been advised by counsel that there may be one or more legal defenses
available to it which are different from or in addition to those available to
the indemnifying party and that the assertion of such defenses would create a
conflict of interest such that counsel employed by the indemnifying party could
not faithfully represent the indemnified party (in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such
action, claim or proceeding on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in connection with
any one such action, claim or proceeding or separate but substantially similar
or related actions, claims or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all such indemnified parties, unless
in the reasonable judgment of such indemnified party a conflict of interest may
exist between such indemnified party and any other of such indemnified parties
with respect to such action, claim or proceeding, in
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which event the indemnifying party shall be obligated to pay the fees and
expenses of such additional counsel or counsels).
7.4. If the indemnification required by this Section 7 from
the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to in
this Section 7:
(i) The indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other things,
whether any Violation has been committed by, or relates to information supplied
by, such indemnifying party or indemnified parties, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such Violation. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 7.1 and Section 7.2,
any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.
(ii) The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 7.4 were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in Section 7.4(i). No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
7.5. If indemnification is available under this Section 7, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in this Section 7 without regard to the relative fault of such
indemnifying party or indemnified party or any other equitable consideration
referred to in Section 7.4 except that no Selling Holder shall be liable for any
amount in excess of the net proceeds it receives in the offering which is the
subject of the indemnification proceeding.
7.6. The obligations of the Trust and the Corporation under this
Section 7 shall be in addition to any liability which the Trust and the
Corporation may otherwise have to the persons specified in Section 7.1 and the
obligations of the Selling Holders under this Section 7 shall be in addition to
any liability which such Persons may otherwise have to the Trust and the
Corporation. The remedies provided in this Section 7 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to an
indemnified party at law or in equity.
7.7. The obligations of the Trust, the Corporation and the Selling
Holders of Registrable Securities under this Section 7 shall survive the
completion of any offering of Registrable Securities pursuant to a registration
statement under this Agreement, and otherwise.
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SECTION 8. HOLDBACK. (a) Each Holder, if so requested by the
Underwriters' Representative in connection with an offering of any securities
covered by a registration statement filed by Trust and the Corporation, whether
or not such Holder's securities are included therein, shall not effect any
public sale or distribution of Paired Shares or any securities convertible into
or exchangeable or exercisable for Paired Shares, including a sale pursuant to
Rule 144 under the Securities act (except as part of such underwritten
registration), during the 90-day period (provided that if such a 90-day period
has previously occurred under this Section 8 (a) in the prior 365 days, the
45-day period) beginning on the date such registration statement is declared
effective under the Securities Act by the Commission. Notwithstanding the
immediately preceding sentence or Section 2.3, the 90-day and 45-day periods
referred to therein and herein shall not extend to more than 180 days in any
consecutive 365 day period. In order to enforce the foregoing covenant, the
Trust and the Corporation shall be entitled to impose stop-transfer instructions
with respect to the Registrable Securities of each Holder until the end of such
period. Holders of Registrable Securities shall have the right to participate in
any such registration on the terms provided in Section 3 hereof.
(b) Each of the Trust and the Corporation agrees not to effect any public sale
or distribution of its equity securities, or any securities convertible into or
exchangeable to or exercisable for such securities, during the 90-day (or
45-day) period beginning on the effective date of any underwritten demand
registration (except pursuant to (i) registrations on Form S-4 or any successor
form and (ii) registrations of securities in connection with a dividend
reinvestment plan on form(s) applicable to such securities) unless the
underwriters managing the registered public offering otherwise agree.
SECTION 9. AMENDMENT, MODIFICATION AND WAIVERS; FURTHER ASSURANCES.
(i) This Agreement may be amended with the consent of the Trust and the
Corporation and the Holders and the Trust and the Corporation may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Trust and the Corporation shall have obtained the
written consent of the Holders to such amendment, action or omission to act.
(ii) No waiver of any terms or conditions of this Agreement shall
operate as a waiver of any other breach of such terms and conditions or any
other term or condition, nor shall any failure to enforce any provision hereof
operate as a waiver of such provision or of any other provision hereof. No
written waiver hereunder, unless it by its own terms explicitly provides to the
contrary, shall be construed to effect a continuing waiver of the provisions
being waived and no such waiver in any instance shall constitute a waiver in any
other instance or for any other purpose or impair the right of the party against
whom such waiver is claimed in all other instances or for all other purposes to
require full compliance with such provision.
(iii) Each of the parties hereto shall execute all such further
instruments and documents and take all such further action as any other party
hereto may reasonably require in order to effectuate the terms and purposes of
this Agreement.
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SECTION 10. ASSIGNMENT; BENEFIT. This Agreement and all of the
provisions hereof shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, assigns, executors, administrators or
successors; provided, however that neither this Agreement nor any of the rights,
interests or obligations hereunder shall be directly or indirectly assigned
(including the substitution of an issuer or issuers other than the Trust and the
Corporation) or delegated by a Holder other than to a permitted transferee of
the Registrable Securities that agrees to be bound hereby.
SECTION 11. MISCELLANEOUS.
11.1. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING REGARD TO
THE CONFLICT OF LAWS PRINCIPLES THEREOF.
11.2. NOTICES. All notices and requests given pursuant to this
Agreement shall be in writing and shall be made by hand-delivery, first-class
mail (registered or certified, return receipt requested), confirmed facsimile or
overnight air courier guaranteeing next Business Day delivery to the relevant
address specified on Annex A hereto. Except as otherwise provided in this
Agreement, the date of each such notice and request shall be deemed to be, and
the date on which each such notice and request shall be deemed given shall be:
at the time delivered, if personally delivered or mailed; when receipt is
acknowledged, if sent by facsimile; and the next Business Day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next
Business Day delivery.
11.3. ENTIRE AGREEMENT; INTEGRATION. Except as expressly agreed in a
separate writing signed by the parties hereto on or after the date of this
Agreement, this Agreement, the Transaction Agreement, the Westin Disclosure
Letter (as defined in the Transaction Agreement), the Starwood Disclosure Letter
(as defined in the Transaction Agreement), the Confidentiality Agreement (as
defined in the Transaction Agreement) and the Other Agreement (as defined in the
Transaction Agreement) constitute the entire agreement, and supersede all other
prior agreements, understandings, representations and warranties both written
and oral, among the parties, with respect to the subject matter hereof.
11.4. SECTION HEADINGS. Section headings are for convenience of
reference only and shall not affect the meaning of any provision of this
Agreement.
11.5. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, and all of which shall
together constitute one and the same instrument. All signatures need not be on
the same counterpart.
11.6. SEVERABILITY. If any provision of this Agreement shall be invalid
or unenforceable, such invalidity or unenforceability shall not affect the
validity and enforceability of the remaining provisions of this Agreement,
unless the result thereof would be unreasonable, in which case the parties
hereto shall negotiate in good faith as to appropriate amendments hereto.
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11.7. TERMINATION. This Agreement may be terminated at any time by a
written instrument signed by the Trust, the Corporation and all of the Holders.
Unless sooner terminated in accordance with the preceding sentence, this
Agreement (other than Section 7 hereof) shall terminate in its entirety on such
date as there shall be (a) no Registrable Securities outstanding, and (b) no
securities outstanding which are convertible or exchangeable into Registrable
Securities; provided that any Paired Shares previously subject to this Agreement
shall not be Registrable Securities following the sale of any such shares in an
offering registered pursuant to this Agreement and provided that the rights and
obligations pursuant to Section 7 shall survive termination of this Agreement.
11.8. STARWOOD TRUST. The parties hereto understand and agree that the
name "Starwood Lodging Trust" is a designation of the Trust and its Trustees (as
Trustees but not personally) under the Declaration of Trust, and all persons
dealing with the Trust shall look solely to the Trust's assets for the
enforcement of any claims against the Trust, and that the Trustees, officers,
agents and security holders of the Trust assume no personal liability for
obligations entered into on behalf of the Trust, and their respective individual
assets shall not be subject to the claims of any person relating to such
obligations.
11.9. SUBMISSION TO JURISDICTION. Each of the parties hereto and each
of the Holders irrevocably submits and consents to the jurisdiction of the
United States District Court for the Southern District of New York in connection
with any action or proceeding arising out of or relating to this Agreement, and
irrevocably waives any immunity from jurisdiction thereof and any claim of
improper venue, forum non conveniens or any similar basis to which it might
otherwise be entitled in any such action or proceeding.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first written above.
STARWOOD LODGING TRUST,
a Maryland real estate investment
trust
By: /s/ Ronald C. Brown
Name: Ronald C. Brown
Title: Senior Vice President and
Chief Financial Officer
STARWOOD LODGING CORPORATION,
a Maryland corporation
By: /s/ Alan M. Schnaid
Name: Alan M. Schnaid
Title: Vice President and
Corporate Controller
Principal Accounting
Officer
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WHWE L.L.C.
By: Whitehall Street Real Estate
Limited Partnership V,
Member and Manager
By: /s/ Priyanka Garg
Name: Priyanka Garg
Title: Attorney-in-fact
Woodstar Investor Partnership
By: Marswood Investors, L.P.
General Partner
By: Starwood Capital Group, L.P.
General Partner
By: BSS Capital Partners, L.P.
General Partner
By: Sternlicht Holdings II, Inc.
General Partner
By: /s/ Ronald C. Brown
Name: Ronald C. Brown
Title: Attorney-in-fact
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Juergen Bartels
/s/ Juergen Bartels
Nomura Asset Capital Corporation
By: /s/ Daniel Abrams
Name: Daniel Abrams
Title: Director
GS CAPITAL PARTNERS, L.P.
By: GS Advisors, L.P.,
General Partner
By: GS Advisors, Inc.,
General Partner
By: /s/ Michael Green
Name: Michael Green
Title: Attorney-in-fact
STONE STREET FUND 1994, L.P.
By: Stone Street Funding Corp.,
General Partner
By: /s/ Michael Green
Name: Michael Green
Title: Attorney-in-fact
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STONE STREET WESTIN HOLDING, INC.
By: /s/ Michael Green
Name: Michael Green
Title: Attorney-in-fact
STONE STREET FUND 1995, L.P.
By: Stone Street Value Corp.,
General Partner
By: /s/ Michael Green
Name: Michael Green
Title: Attorney-in-fact
STONE STREET 1995 WESTIN HOLDING
INC.
By: /s/ Michael Green
Name: Michael Green
Title: Attorney-in-fact
BRIDGE STREET FUND 1994, L.P.
By: Stone Street Funding Corp.,
General Partner
By: /s/ Michael Green
Name: Michael Green
Title: Attorney-in-fact
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BRIDGE STREET FUND 1995, L.P.
By: Stone Street Value Corp.,
General Partner
By: /s/ Michael Green
Name: Michael Green
Title: Attorney-in-fact
GS CAPITAL PARTNERS WESTIN HOLDING,
L.P.
By: GS Capital Partners, L.P.
General Partner
By: GS Advisors, L.P.
General Partner
By: GS Advisors, Inc.,
General Partner
By: /s/ Michael Green
Name: Michael Green
Title: Attorney-in-fact
Richard L. Mahoney
/s/ Richard L. Mahoney
Frederick J. Kleisner
/s/ Frederick J. Kleisner
John van Hartesvelt
/s/ John van Hartesvelt
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EXHIBIT 3
EXCHANGE RIGHTS AGREEMENT
(CLASS A REALTY PARTNERSHIP UNITS)
THIS EXCHANGE RIGHTS AGREEMENT (this "Agreement") is made as of January
2, 1998 among STARWOOD LODGING TRUST, a Maryland real estate investment trust
(the "Trust"), SLT REALTY LIMITED PARTNERSHIP, a Delaware limited partnership
(the "Realty Partnership"), and certain limited partners of the Realty
Partnership listed on the signature pages hereto (the "Westin Limited
Partners"). Unless otherwise indicated, capitalized terms used herein are used
herein as defined in Section 1.
WHEREAS, pursuant to a Transaction Agreement dated as of September 8,
1997 (the "Transaction Agreement") among WHWE L.L.C., Woodstar Investor
Partnership, Nomura Asset Capital Corporation, Juergen Bartels, W&S Hotel
L.L.C., Westin Hotels & Resorts Worldwide, Inc., W&S Lauderdale Corp., W&S
Seattle Corp., Westin St. John Hotel Company, Inc., W&S Denver Corp., W&S
Atlanta Corp., the Trust, SLT Realty Limited Partnership, Starwood Lodging
Corporation and SLC Operating Limited Partnership, the Westin Limited Partners
are making capital contributions to the Realty Partnership in return for the
issuance of Class A Limited Partnership Units ("Class A RP Units");
WHEREAS, pursuant to the Transaction Agreement the parties hereto are
entering into this Agreement to provide for: (a) certain rights of the Westin
Limited Partners to tender Class A RP Units to the Trust on or prior to the
Cross-Over Date (as defined herein) in exchange for shares of Class B EPS (as
defined herein) and (b) certain rights of the Westin Limited Partners to tender
Class A RP Units to the Trust at any time in exchange for Paired Shares (as
defined herein), subject in either such case to certain rights of the Trust to
substitute cash or other forms of consideration for such shares of Class B EPS
or Paired Shares or to cause the Realty Partnership to redeem the Class A RP
Units being tendered for cash, all on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. For purposes of this Agreement, the following
terms have the meanings indicated:
"Board of Trustees" shall mean the Board of Trustees of the Trust or
any committee authorized by the Board of Trustees from time to time to
exercise any of its powers or perform any of its responsibilities with
respect to this Agreement.
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"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New York,
New York are not required to be open.
"Cash Equivalent" of Paired Shares as of any date shall mean an amount
of cash equal to (i) the average of the daily Current Market Prices per
unit of such Paired Shares during the five (5) consecutive Trading Days
immediately preceding such date or (ii) if the Paired Shares are not
publicly traded on such date, the fair market value of such Paired Shares
as of such date as determined by the Board of Trustees in good faith.
"Certificate of Admission" shall mean the Certificate of Admission of
SLT Realty Limited Partnership dated as of January 1, 1998 pursuant to
which the Class A RP Units were authorized.
"Class A Articles Supplementary" shall mean Article 6.15 of the
Declaration pursuant to which the Trust has classified and designated
30,000,000 shares of beneficial interest in the Trust as "Class A
Exchangeable Preferred Shares", as hereafter amended from time to time.
"Class A EPS" means the Class A Exchangeable Preferred Shares, par
value $0.01 per share, created by the Class A Articles Supplementary.
"Class B Articles Supplementary" shall mean Article 6.16 of the
Declaration pursuant to which the Trust has classified and designated
15,000,000 shares of beneficial interest in the Trust as "Class B
Exchangeable Preferred Shares", as hereafter amended from time to time.
"Class B EPS" shall mean the Class B Exchangeable Preferred Shares, par
value $0.01 per share, of the Trust created pursuant to the Class B
Articles Supplementary.
"Class B EPS Cash Option" shall have the meaning set forth in paragraph
(a)(ii) of Section 3 hereof.
"Class B EPS Delivery Option" shall have the meaning set forth in
paragraph (a)(ii) of Section 3 hereof.
"Class B EPS Redemption Option" shall have the meaning set forth in
paragraph (a)(ii) of Section 3 hereof.
"Class B EPS Request" shall have the meaning set forth in paragraph (a)
of Section 2 hereof.
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"Class B Liquidation Preference" shall have the meaning set forth in
paragraph (b) of Article 6.16.4 of the Declaration.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Corporation" shall mean Starwood Lodging Corporation, a Maryland
corporation, and any successor.
"Corporation Shares" shall mean the shares of common stock, par value
$.01 per share, of the Corporation or any stock of the Corporation into
which such common stock may hereafter be changed.
"Cross-Over Date" shall mean the fifth anniversary of the Issue Date;
provided that in the event that the CrossOver Date referred to in the
Declaration is extended pursuant to Article 6.16.9 thereof, the Cross-Over
Date for the purposes of this Agreement shall be similarly extended.
"Current Market Price" of publicly traded Paired Shares or any other
shares of beneficial interest or other securities of the Trust or any other
issuer as of any Trading Day shall mean the last reported sales price,
regular way, on such day, or, if no sale takes place on such day, the
average of the reported closing bid and asked prices on such day, regular
way, in either case as reported on the NYSE or, if such shares or other
securities are not listed or admitted for trading on the NYSE, on the
principal national securities exchange on which such shares or other
securities are listed or admitted for trading or, if not listed or admitted
for trading on any national securities exchange, on the NASDAQ National
Market or, if such shares or other securities are not quoted on such NASDAQ
National Market, the average of the closing bid and asked prices on such
day in the over-the-counter market as reported by NASDAQ or, if bid and
asked prices for such shares or other securities on such day shall not have
been reported through NASDAQ, the average of the bid and asked prices on
such day as furnished by any NYSE member firm regularly making a market in
such security selected for such purpose by the Chief Executive Officer or
Chief Financial Officer of the Trust or the Board of Trustees.
"Declaration" shall mean the Amended and Restated Declaration of Trust
of the Trust, as amended from time to time.
"Delivered Shares" shall have the meaning set forth in paragraph (e) of
Section 3 hereof.
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"Disinterested Members" when used with respect to the Trust has the
meaning set forth in the Code of Regulations of the Trust and, when used
with respect to the Corporation, has the meaning set forth in the By-Laws
of the Corporation, in each case as amended from time to time.
"Election Notice" shall have the meaning set forth in paragraph (a) of
Section 3 hereof.
"Excess Shares" shall have the meaning set forth in paragraph (e) of
Section 3 hereof.
"Exchange Promissory Note" shall mean an unsecured promissory note of
the Trust in such form as the Trust shall reasonably prescribe with a
maturity date ninety (90) days after the date of issuance of such note.
Such Exchange Promissory Note shall bear interest in a amount equal to (i)
in the case of the substitution of an Exchange Promissory Note for Paired
Shares constituting Excess Shares pursuant to Section 3(e) hereof, the
amount of any dividends paid during the period that such note remains
outstanding on a number of Paired Shares equal to the number of Paired
Shares for which such Exchange Promissory Note is being substituted and
(ii) in the case of the substitution of an Exchange Promissory Note for any
shares of Class B EPS constituting Excess Shares pursuant to such Section,
the amount of any dividends accrued (whether or not paid) during the period
that such note remains outstanding on a number of shares of Class B EPS
equal to the number of shares of Class B EPS for which such Exchange
Promissory Note is being substituted, which interest shall be payable on
the dates of payment of the corresponding dividends.
"Exchange Ratio" shall have the meaning set forth in paragraph (b) of
Section 3 hereof.
"Issue Date" shall mean the first date on which shares of Class A EPS
and Class B EPS are issued by the Trust pursuant to the Transaction
Agreement.
"Letter of Transmittal" shall have the meaning set forth in paragraph
(a) of Section 2 hereof.
"NYSE" shall mean the New York Stock Exchange.
"Offered Shares" shall have the meaning set forth in paragraph (e) of
Section 3 hereof.
"Ownership Limit" shall have the meaning set forth in Section 6.12 of
the Declaration.
"Paired Shares" shall mean units consisting of one Trust Share paired
with one Corporation Share and
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represented by a single share certificate, as provided in the Pairing
Agreement dated as of June 25, 1980, between the Trust and the Corporation,
as amended from time to time, subject to any changes in the securities
constituting a unit of Paired Shares under such Pairing Agreement from time
to time.
"Paired Shares Delivery Option" shall have the meaning set forth in
paragraph (a)(i) of Section 3 hereof.
"Paired Shares Cash Option" shall have the meaning set forth in
paragraph (a)(i) of Section 3 hereof.
"Paired Shares Redemption Option" shall have the meaning set forth in
paragraph (a)(i) of Section 3 hereof.
"Paired Shares Request" shall have the meaning set forth in paragraph
(a) of Section 2 hereof.
"Person" shall mean any individual, firm, partnership, corporation,
limited liability company or other entity, and shall include any successor
(by merger or otherwise) of such entity.
"Registered Sale Option" shall have the meaning set forth in paragraph
(e) of Section 3 hereof.
"REIT Rules" shall mean the requirements (i) for the Trust to qualify
as a real estate investment trust under the Code as set forth in Sections
856(a)(5) and 856(a)(6) of the Code and (ii) for the Corporation or any
affiliate of the Corporation which is a tenant of the Trust to not be
treated as a related party pursuant to Section 856(d)(2)(B) of the Code.
"Requested Shares" shall have the meaning set forth in paragraph (e) of
Section 3 hereof.
"RP Special Distribution" shall have the meaning set forth in paragraph
(f) of Section 3 hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Trading Day" with respect to publicly traded Paired Shares or any
other shares of beneficial interest or other securities of the Trust or any
other issuer shall mean any day on which the securities in question are
traded on the NYSE, or if such securities are not listed or admitted for
trading on the NYSE, on the principal national securities exchange on which
such securities are listed or admitted, or if not listed or admitted for
trading on any national securities exchange, on the NASDAQ National Market,
or if
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such securities are not quoted on such NASDAQ National Market, in the
applicable securities market in which such securities are traded.
"Transaction Agreement" shall have the meaning set forth in the
Recitals.
"Transfer Agent" shall mean ChaseMellon Shareholder Services, L.L.C.
(or any successor thereof), or such other agent or agents of the Trust as
may be designated by the Board of Trustees or their designee as the
transfer agent for the Class B EPS and/or the Paired Shares.
"Trust" shall mean Starwood Lodging Trust, a Maryland real estate
investment trust, and any successor.
"Trust Shares" shall mean the common shares of beneficial interest in
the Trust, par value $.01 per share, or any shares of beneficial interest
in the Trust into which such common shares may be changed.
"Westin Transaction Securities" shall mean, with respect to a holder of
Class A RP Units or an affiliate thereof, any shares of Class A EPS, shares
of Class B EPS, Class A RP Units and Starwood Operating Partnership Units
(as defined in the Transaction Agreement) received by such holder or
affiliate pursuant to the Transaction Agreement, together with any shares
of Class B EPS, Class A EPS or Paired Shares (or other securities) issued
upon exchange or conversion of any such Westin Transaction Securities.
SECTION 2. RIGHT TO TENDER CLASS A RP UNITS. (a) Upon the terms and
subject to the conditions of this Agreement, each registered holder of Class A
RP Units will have the right to tender outstanding Class A RP Units to the
Trust. In order for Class A RP Units to be validly tendered pursuant to this
Agreement, the registered holder thereof shall deliver to the Trust, at the
address provided pursuant to Section 9 , (i) a completed and duly executed
Letter of Transmittal in the form attached hereto as Exhibit A (the "Letter of
Transmittal") and any other documents required by the Letter of Transmittal and
(ii) a certificate (duly executed on behalf of such holder by an officer,
partner, manager or other duly authorized representative of such holder, if such
holder is not an individual) setting forth (A) the number of Trust Shares and
Corporation Shares held directly by such holder, and in the case of WHWE L.L.C.
("WHWE"), held by Whitehall Real Estate Limited Partnership ("Whitehall"), GS
Capital Partners, L.P. ("GSCP") or The Goldman Sachs Group, L.P. (other than
shares held in "street name" for third parties or shares held in accounts for
unaffiliated third parties) and (B) the number of partners in Whitehall or GSCP
with a 25% or greater interest in the profits or capital of Whitehall or GSCP,
respectively. In addition, in the event of a tender of Class A
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RP Units by WHWE, the Trust may deliver to WHWE a list of the Trust's ten
largest shareholders, in which event, WHWE shall certify to the Trust the
identity of any such shareholders that are directly partners of Whitehall
or GSCP in a partnership in which WHWE or GSCP and such shareholder are
both partners with a 25% or greater interest in the profits and capital of
such partnership. In such Letter of Transmittal, the registered holder of
the Class A RP Units being tendered shall specify which Class A RP Units
such holder desires to exchange for Paired Shares (a "Paired Shares
Request") and which Class A RP Units such holder desires to exchange for
shares of Class B EPS (a "Class B EPS Request"); provided that no Class B
EPS Request may be made unless the Letter of Transmittal is delivered to
the Trust on or prior to the Cross-Over Date. The Trust shall make all
determinations as to the validity and form of any tender of Class A RP
Units in accordance with the provisions of this Agreement and upon
rejection of a tender shall give the tendering holder written notice of
such rejection, which shall include the reasons therefor.
(b) Unless otherwise determined by agreement of the Trust, tenders of
Class A RP Units pursuant to this Agreement shall be irrevocable and shall not
be subject to withdrawal or modification; provided that in the event that the
issuance of the full number of Requested Shares pursuant to any tender of Class
A RP Units would violate either the Ownership Limit or the REIT Rules and either
(i) the Trust elects pursuant to Section 3(e) below to deliver an Exchange
Promissory Note in substitution for any Excess Shares or (ii) the Trust
exercises the Registered Sale Option with respect to any such Excess Shares, the
holder of the Class A RP Units tendered will have the right to withdraw his or
her Letter of Transmittal as to the Excess Shares for which such Exchange
Promissory Note is proposed to be substituted or with respect to which such
Registered Sale Option is being exercised, which withdrawal must be made by
written notice to the Trust within ten (10) Business Days after receipt of the
applicable Election Notice.
(c) The rights to exchange Class A RP Units pursuant to this Agreement
constitute a continuous offer and may not be withdrawn, amended or modified by
the Trust without the prior written consent of each registered holder of
outstanding Class A RP Units adversely affected by such withdrawal, amendment or
modification; provided that any withdrawal, amendment or modification that does
not adversely affect any holder of outstanding Class A RP Units may be effected
without the consent of such holder.
SECTION 3. ACCEPTANCE OF TENDER; DELIVERY OF ELECTION NOTICE. (a)
Subject to paragraph (c) below, as promptly as practicable (and in any event
within ten (10) Business Days) after receipt of a Letter of Transmittal and all
related documents and certifications, the Trust shall elect, pursuant to
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an election notice given to the registered holder who delivered such Letter of
Transmittal to the Trust (an "Election Notice"), to take one or more of the
following actions with respect to the Class A RP Units subject to such Letter of
Transmittal:
(i) with respect to any such Class A RP Units for which a Paired Shares
Request has been made, the Trust shall elect either (A) to issue to the
registered holder a number of Paired Shares equal to the number of such
Class A RP Units (including procuring the issuance by the Corporation of
the Corporation Shares component of such Paired Shares) (the "Paired Shares
Delivery Option"), (B) to pay to such holder the Cash Equivalent of such
Paired Shares determined as of the date of such Election Notice (the
"Paired Shares Cash Option"), (C) to cause the Realty Partnership to redeem
such Class A RP Units for a cash redemption price equal to such Cash
Equivalent of such Paired Shares (the "Paired Shares Redemption Option") or
(D) any combination of the actions described in the foregoing clauses (A),
(B) and (C); and
(ii) with respect to any Class A RP Units for which a valid Class B EPS
Request has been made, the Trust shall elect either (A) to issue to the
registered holder a number of shares of Class B EPS equal to the number of
such Class A RP Units multiplied by the Exchange Ratio (as determined
pursuant to paragraph (b) below) in effect as of the date of such Election
Notice (the "Class B EPS Delivery Option"), (B) to pay to such registered
holders an amount in cash equal to the Class B Liquidation Preference of
such shares of Class B EPS at such time (the "Class B EPS Cash Option"),
(C) to cause the Realty Partnership to redeem such Class A RP Units for a
cash redemption price equal to such Class B Liquidation Preference of such
shares of Class B EPS at such time (the "Class B EPS Redemption Option") or
(D) any combination of the actions described in the foregoing clauses (A),
(B) and (C).
(b) The "Exchange Ratio" of shares of Class B EPS for each Class A RP
Unit at any time shall be equal to one (1) divided by the number of Class B
Underlying Paired Shares (as defined in the Class B Articles Supplementary) for
which each share of Class B EPS is then indirectly exchangeable as of such date
(determined without taking into consideration any Class A Dividend Replacement
Shares or Class B Dividend Replacement Shares, as defined in the Class A
Articles Supplementary and Class B Articles Supplementary, respectively).
(c) (i) If, at any time after the Issue Date, the Trust or the
Corporation shall become a party to any transaction, including, without
limitation, a merger, consolidation, statutory share exchange, self tender offer
for all or substantially all outstanding Trust Shares and/or Corporation Shares,
sale of all or substantially all of the Trust's or the Corporation's assets
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or recapitalization of the Trust Shares and/or the Corporation Shares (but
excluding any event constituting a Trust Common Adjustment Event or a
Corporation Common Adjustment Event) (each of the foregoing being referred to
herein as a "Paired Shares Transaction"), in each case as a result of which the
outstanding Trust Shares and/or Corporation Shares shall be converted into or
exchanged for the right to receive stock, securities or other property
(including cash or any combination thereof), effective as of the effective date
of such Paired Shares Transaction, each unit of Paired Shares issuable upon
tender of Class A RP Units hereunder shall thereafter be deemed to consist of
the kind and amount of shares of beneficial interest in the Trust, shares of
stock of the Corporation and other securities and property (including cash or
any combination thereof) that would have been held or receivable upon the
consummation of such Paired Shares Transaction by a holder of a number of Paired
Shares equal to the number of Class A RP Units so tendered assuming such holder
of Paired Shares (A) is not a Person with which the Trust or the Corporation
consolidated or into which the Trust or the Corporation was merged or which
merged into the Trust or the Corporation or to which such sale or transfer was
made, as the case may be (a "constituent person"), or an affiliate of a
Constituent Person and (B) failed to exercise his or her rights of election, if
any, as to the kind or amount of stock, securities and other property (including
cash) receivable upon such Paired Shares Transaction (provided that if the kind
or amount of stock, securities and other property (including cash) receivable
upon such Paired Shares Transaction is not the same for each unit of Paired
Shares held immediately prior to such Paired Shares Transaction by other than a
constituent person or an affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-Electing Shares"), then for the
purposes of this subparagraph (ii) the kind and amount of stock, securities and
other property (including cash) receivable upon such Paired Shares Transaction
in respect of each Non-Electing Share shall be deemed to be the kind and amount
so receivable per share by a plurality of the Non-Electing Shares). The
provisions of this paragraph (i) shall similarly apply to successive Paired
Shares Transactions.
(ii) If, at any time after the Issue Date, the Trust shall become a
party to any transaction, including, without limitation, a merger,
consolidation, statutory share exchange, self tender offer for all or
substantially all outstanding Trust Shares, sale of all or substantially all of
the Trust's assets or recapitalization of the Class B EPS (each of the foregoing
being referred to herein as a "Class B Transaction"), in each case as a result
of which the outstanding shares of Class B EPS shall be converted into or
exchanged for the right to receive stock, securities or other property
(including cash or any combination thereof), effective as of the effective date
of such Class B Transaction, each share of Class B EPS issuable upon tender of
Class A RP Units shall thereafter be deemed to consist of the
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kind and amount of shares of stock and other securities and property (including
cash or any combination thereof) that would have been held or receivable upon
the consummation of such Class B Transaction by a holder of a number of shares
of Class B EPS equal to the number of Class A RP Units being tendered, assuming
such holder of shares of Class B EPS (A) is not a Person with which the Trust
consolidated or into which the Trust was merged or which merged into the Trust
or to which such sale or transfer was made, as the case may be, or an affiliate
of such a constituent person and (B) failed to exercise his or her rights of
election, if any, as to the kind or amount of stock, securities and other
property (including cash) receivable upon such Class B Transaction (provided
that if the kind or amount of stock, securities and other property (including
cash) receivable upon such Class B Transaction is not the same for each share of
Class B EPS held immediately prior to such Class B Transaction by other than a
constituent person or an affiliate thereof and in respect of which such rights
of election shall not have been exercised, then for the purposes of this
subparagraph (ii) the kind and amount of stock, securities and other property
(including cash) receivable upon such Class B Transaction by each Non-Electing
Share shall be deemed to be the kind and amount so receivable per share by a
plurality of the Non-Electing Shares). The provisions of this paragraph (ii)
shall similarly apply to successive Class B Transactions.
(d) Notwithstanding any other provision of this Agreement, no Paired
Shares or shares of Class B EPS shall be issued or paid in respect of any tender
of Class A RP Units prior to the expiration or termination of the waiting period
applicable to such issuance or payment, if any, under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as it may be amended from time to time.
(e) If the delivery to a registered holder tendering Class A RP Units
of the full number(s) of Paired Shares and/or shares of Class B EPS requested to
be delivered pursuant to the Letter of Transmittal (the "Requested Shares")
would result in a violation of either the Ownership Limit or the REIT Rules, the
Trust may elect in the Election Notice, in lieu of the options described in
paragraph (a) above (i) to deliver to such holder the maximum number(s) of
Paired Shares and/or shares of Class B EPS, as applicable, (which maximum
numbers, in the case of a Letter of Transmittal containing both a Paired Shares
Request and a Class B EPS Request, shall represent the same percentage of the
numbers of Paired Shares and shares of Class B EPS, respectively, comprising
such Requested Shares) that may be delivered without causing such a violation
(the "Delivered Shares", with the Requested Shares in excess of the Delivered
Shares being referred to herein as the "Excess Shares") and (ii) (A) in respect
of any Paired Shares included in such Excess Shares either (1) to pay such
holder the Cash Equivalent of such Paired Shares determined as of the date of
such Election Notice, (2) to deliver to such
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holder an Exchange Promissory Note in a principal amount equal to such Cash
Equivalent or (3) to cause the Realty Partnership to redeem a corresponding
number of Class A RP Units for a cash redemption price equal to such Cash
Equivalent and (B) in respect of any shares of Class B EPS included in such
Excess Shares, either (1) to make a cash payment to such holder equal to the
Class B Liquidation Preference of such shares as of such date, (2) to deliver to
such holder an Exchange Promissory Note in a principal amount equal to such
Class B Liquidation Preference or (3) to cause the Realty Partnership to redeem
a corresponding number of Class A RP Units for a cash redemption price equal to
such Class B Liquidation Preference. Notwithstanding the foregoing, in the event
that the delivery of the full number of Requested Shares pursuant to a Letter of
Transmittal would violate either the Ownership Limit or the REIT Rules because
the registered holder of Class A RP Units tendering Class A RP Units, together
with such holder's affiliates (but without giving effect to any other applicable
attribution rules under the Code), beneficially owns, at the date of the
Election Notice, Paired Shares and/or shares of Class B EPS other than through
the ownership of Westin Transaction Securities, the Trust will have the option
(the "Registered Sale Option"), exercisable in the Election Notice, in lieu of
delivering an Exchange Promissory Note in a principal amount equal to the Cash
Equivalent of the any Paired Shares included in the Excess Shares or the Class B
Liquidation Preference of any shares of Class B EPS included in the Paired
Shares, to procure the filing of a registration statement under the Securities
Act, and to publicly offer and sell pursuant to such registration statement in
such manner as the Trust in good faith determines to be appropriate (x) a number
of Paired Shares equal to the number of Paired Shares included in such Excess
Shares or (y) a number of Paired Shares equal to the number of Class B
Underlying Paired Shares (as defined in the Class B Articles Supplementary) for
which the shares of Class B EPS included in such Excess Shares are then
indirectly exchangeable as of such date (determined without taking into
consideration any Class A Dividend Replacement Shares or Class B Dividend
Replacement Shares, as defined in the Class A Articles Supplementary and Class B
Articles Supplementary, respectively) (in either such case, the "Offered
Shares"), the net proceeds of which sale (after deducting any applicable
underwriting discounts or commissions and the expenses of such offering) shall
be paid to such holder.
(f) If, as of the date of the Election Notice given by the Trust with
respect to any tender of Class A RP Units, there are any accrued but unpaid RP
Special Distributions (as defined in the Certificate of Admission), then: (i)
the number of shares of Class B EPS issuable in exchange for each Class A RP
Unit with respect to which a Class B EPS Request has been made shall be
increased by a number of shares equal to (A) the amount of such accrued but
unpaid RP Special Distributions divided by (B) the product of (1) the number of
Class B Underlying Paired Shares (as
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defined in the Class B Articles Supplementary) for which each share of Class B
EPS is then indirectly exchangeable as of such date (determined without taking
into consideration any Class A Dividend Replacement Shares or Class B Dividend
Replacement Shares, as defined in the Class A Articles Supplementary and Class B
Articles Supplementary, respectively) multiplied by (2) the Cash Equivalent of
each Paired Share as of such date and (ii) the number of Paired Shares issuable
in exchange for each Class A RP Unit with respect to which a Paired Shares
Request has been made shall be increased by a number of shares equal to (A) the
amount of such accrued but unpaid RP Special Distributions divided by (B) the
Cash Equivalent of each Paired Share as of such date.
SECTION 4. DELIVERY OF SECURITIES AND/OR CASH TO HOLDER. (a) If the
Election Notice relating to any tender of Class A RP Units pursuant to this
Agreement does not give rise to a withdrawal right pursuant to Section 2(b)
above, such Election Notice shall be accompanied by the delivery of the Paired
Shares, shares of Class B EPS and/or cash required to be delivered pursuant to
such Election Notice. If the Election Notice does give rise to such a withdrawal
right, but such right is not exercised by the holder that delivered the related
Letter of Transmittal, the Trust shall deliver the Paired Shares, shares of
Class B EPS, Exchange Promissory Note(s) and/or cash required to be delivered
pursuant to such Election Notice within five (5) Business Days after the
expiration of such withdrawal right.
(b) If the Election Notice includes the exercise of the Registered Sale
Option, the proceeds from the sale of the Offered Shares shall be paid over to
the applicable registered holder promptly upon receipt. Any cash payable to such
registered holder hereunder shall be payable at the election of the Trust by
check or by wire transfer to an account designated in writing by such holder, if
one has been so designated.
(c) With respect to any Paired Shares to be issued pursuant to an
Election Notice, the Trust shall issue and deliver (and shall cause the
Corporation to issue and deliver) at the office of the Trust (or, at the option
of the Trust, at the office of the Transfer Agent) to the applicable registered
holder a certificate or certificates for the number of full Paired Shares
deliverable in accordance with the provisions of Section 3 above, and any
fractional interest in respect of a unit of Paired Shares otherwise deliverable
pursuant to such provisions shall be settled as provided in paragraph (d) below.
With respect to any shares of Class B EPS to be issued pursuant to an Election
Notice, the Trust shall issue and deliver at the office of the Trust (or, at the
option of the Trust, at the office of the Transfer Agent) to the applicable
registered holder a certificate or certificates for the number of full shares of
Class B EPS deliverable in accordance with the provisions of Section 3 above,
and any fractional interest in respect of a share of Class B EPS
-12-
<PAGE>
otherwise deliverable pursuant to such provisions shall be settled as provided
in paragraph (d) below.
(d) No fractional units of Paired Shares or shares of Class B EPS or
scrip evidencing fractions of units of Paired Shares or shares of Class B EPS
shall be issued upon any tender of Class A RP Units pursuant to this Agreement.
Instead of any fractional interest in a unit of Paired Shares that would
otherwise be deliverable in connection with such tender, the Trust shall pay to
the registered holder an amount in cash equal to the corresponding fraction of
the Current Market Price of the Paired Shares on the Trading Day immediately
preceding the date of the applicable Election Notice, and instead of any
fractional interest in a share of Class B EPS that would otherwise be
deliverable in connection with such tender, the Trust shall pay to the
registered holder an amount in cash equal to the corresponding fraction of the
product of (x) the Current Market Price of the Paired Shares on the Trading Day
immediately preceding the date of the applicable Election Notice multiplied by
(y) the number of Class B Underlying Paired Shares (as defined in the Class B
Articles Supplementary) for which each share of Class B EPS is then indirectly
exchangeable as of such date (determined without taking into consideration any
Class A Dividend Replacement Shares or Class B Dividend Replacement Shares, as
defined in the Class A Articles Supplementary and Class B Articles
Supplementary, respectively). If more than one Letter of Transmittal shall be
delivered at one time by the same registered holder, the numbers of full Paired
Shares and full shares of Class B EPS which shall be issuable upon exchange of
the Class A RP Units tendered thereby shall be computed on the basis of the
aggregate number of Class A RP Units so tendered.
(e) The Trust covenants that any Paired Shares and shares of Class B
EPS issued pursuant to this Agreement will be validly issued, fully paid and
non-assessable. If a registered holder exchanges Class A RP Units pursuant to
this Agreement, the Trust shall pay any documentary, stamp or similar issue or
transfer tax due on any issuance of Paired Shares and/or shares of Class B EPS
upon such exchange. Such holder, however, shall (i) pay to the Trust the amount
of any additional documentary, stamp or similar issue or transfer tax which is
due (or shall establish to the satisfaction of the Trust the payment thereof) as
a result of Paired Shares or shares of Class B EPS being issued in a name other
than the name of such holder and (ii) be responsible for all income or other
taxes as a result of such exchange.
(f) The Trust shall have the right to affix to any certificates
evidencing Paired Shares or shares of Class B EPS issued pursuant to this
Agreement: (i) any restrictive legend required in order for such issuance to be
in compliance with the Securities Act and any applicable state securities laws,
(ii) if applicable, a legend referring to the transfer restrictions
-13-
<PAGE>
provided for in Section 6.16(f) of the Transaction Agreement and (iii) any other
legend required in order to comply with any applicable law.
SECTION 5. IMPLEMENTATION OF REDEMPTION OPTION. In the event that the
Trust exercises the Paired Shares Redemption Option or the Class B EPS
Redemption Option, the Trust shall cause the Realty Partnership to redeem the
corresponding Class A RP Units as soon as practicable after the date of the
Election Notice. The cash redemption price payable to the registered holder
pursuant to such Paired Shares Redemption Option or Class B EPS Redemption
Option shall be paid by the Realty Partnership at its election by check or by
wire transfer to an account designated in writing by such holder, if one has
been so designated.
SECTION 6. REPRESENTATIONS OF TENDERING HOLDER. Each tender of Class A
RP Units shall constitute a representation and warranty by the tendering holder
of each of the representations and warranties set forth in the form of Letter of
Transmittal. Without limiting the generality of the foregoing, unless, at the
time of a tender for exchange of Class A RP Units pursuant to this Agreement, a
registration statement relating to any Paired Shares and/or shares of Class B
EPS to be delivered upon such tender is effective under the Securities Act, such
tender shall constitute a representation and warranty by the tendering holder to
the Trust that such tendering holder (i) is an "accredited investor" within the
meaning of Rule 501 under the Securities Act, (ii) has sufficient knowledge and
experience in financial and business matters and in investing in entities
similar to the Realty Partnership, the Trust and the Corporation so as to be
able to evaluate the risks and merits of its investment in the Trust and it is
able financially to bear the risks thereof, (iii) has had an opportunity to
discuss the business, management and financial affairs of the Realty
Partnership, the Trust and the Corporation with the management of the Realty
Partnership, the Trust and the Corporation, and (iv) understands the Paired
Shares and shares of Class B EPS issuable pursuant to this Agreement have not
and will not have been registered under the Securities Act by reason of their
issuance in a transaction exempt from the registration requirements of the
Securities Act pursuant to Section 4(2) thereof or Rule 505 or 506 promulgated
under the Securities Act and such Paired Shares and shares of Class B EPS must
be held indefinitely unless a subsequent disposition thereof is registered under
the Securities Act and applicable state securities laws or is exempt from such
registration.
SECTION 7. STATUS OF TENDERING HOLDER. Until the holder of Class A RP
Units tendered pursuant to this Agreement becomes a holder of record of the
Paired Shares and/or shares of Class B EPS issued in exchange therefor (in the
case of an exercise of the Paired Shares Delivery Option and/or the Class B EPS
Delivery Option, as applicable) or until such holder has
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<PAGE>
received cash in exchange therefor (in the case of an exercise of the Paired
Shares Cash Option, the Paired Shares Redemption Option, the Class B EPS Cash
Option and/or the Class B EPS Redemption Option, as applicable) and until the
holder has received an Exchange Promissory Note in substitution for any Excess
Shares or until the holder has received the proceeds from the sale of the
corresponding Offered Shares (in the case of an exercise of the Registered Sale
Option), such holder shall continue to hold and own the corresponding Class A RP
Units for all purposes of the Realty Partnership Agreement. In the case of an
exercise of the Paired Shares Delivery Option or Class B EPS Delivery Option, no
such holder shall have any rights as a shareholder of the Trust or a stockholder
of the Corporation in respect of such Paired Shares, or as a shareholder of the
Trust in respect of such shares of Class B EPS, until such holder becomes a
holder of record of such Paired Shares or shares of Class B EPS.
SECTION 8. RESERVATION OF SHARES; CLOSING OF TRANSFER BOOKS. (a) The
Trust shall reserve and shall at all times have reserved out of its authorized
but unissued Trust Shares, solely for the purpose of effecting the exchange
pursuant to this Agreement, enough Trust Shares to permit the exchange of the
then outstanding Class A RP Units for Paired Shares pursuant to this Agreement
and shall use its best efforts to cause the Corporation to reserve and shall at
all times have, solely for the purpose of effecting such exchange, enough
Corporation Shares to permit such exchange. In addition, until the Cross-Over
Date, the Trust shall reserve and shall at all times have reserved out of its
authorized but unissued shares of Class B EPS, solely for the purpose of
effecting the exchange pursuant to this Agreement, enough shares of Class B EPS
to permit the exchange of the then outstanding Class A RP Units for shares of
Class B EPS pursuant to this Agreement.
(b) The Trust shall use its best efforts to cause the Corporation not
to close its transfer books so as to prevent the timely issuance of Corporation
Shares pursuant to this Agreement. The Trust shall not close its transfer books
so as to prevent the timely issuance of Trust Shares or shares of Class B EPS
pursuant to this Agreement.
SECTION 9. NOTICES. All notices, documents and other communications
under this Agreement shall be in writing and shall be deemed given when
delivered personally or by overnight mail or when sent by facsimile
transmission, or four days after being mailed (by registered mail, return
receipt requested) to a party at the following address (or to such other address
as such party may have specified by notice given to the other parties pursuant
to this provision):
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<PAGE>
(a) If to the Trust or the Realty Partnership, to:
Starwood Lodging Trust
2231 E. Camelback Road, Suite 410
Phoenix, AZ 85016
Attention: General Counsel
Telecopy No.: (602) 852-0686
Telephone No.: (602) 852-3900
with a copy to:
Sidley & Austin
555 West 5th Street
Los Angeles, California 90013
Attention: Sherwin L. Samuels
Telecopy No.: (213) 896-6600
Telephone No.: (213) 896-6000
(b) If to any Westin Limited Partner, to the address specified on
Schedule I hereto.
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Attention: Joseph C. Shenker
Telecopy No.: (212) 558-3588
Telephone No.: (212) 558-4000
SECTION 10. DETERMINATIONS AND INTERPRETATION. All agreements between
the Trust, the Realty Partnership and the Westin Limited Partners provided for
in (or required by or pursuant to) this Agreement shall be made on behalf of the
Trust and the Realty Partnership by their respective Disinterested Members,
including, without limitation, any agreement between the Trust, the Realty
Partnership and the Westin Limited Partners as to the election by the Trust of
the Paired Shares Delivery Option, the Paired Shares Cash Option, the Paired
Shares Redemption Option, the Class B EPS Delivery Option, the Class B EPS Cash
Option or the Class B EPS Redemption Option with respect to a tender of Class A
RP Units pursuant to Section 2(a), any agreement to permit the revocation,
withdrawal or modification of a tender of Class A RP Units pursuant to Section
2(b). All interpretations of the terms of this Agreement shall be resolved on
behalf of the Trust by its Disinterested Members.
SECTION 11. PARTIAL INVALIDITY. In case any one or more of the
provisions contained herein shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Agreement, but
this Agreement shall be
-16-
<PAGE>
construed as if such invalid, illegal or unenforceable provision or provisions
had never been contained herein unless the deletion of such provision or
provisions would result in such a material change as to cause completion of the
transactions contemplated hereby to be unreasonable.
SECTION 12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
permitted successors or assigns. In addition, and whether or not any express
assignment shall have been made, the provisions of this Agreement which are for
the benefit of the parties hereto other than the Trust, the Realty Partnership
and the Westin Limited Partners, shall also be for the benefit of and
enforceable by any subsequent holder of any Class Units.
SECTION 13. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in one or more counterparts, each of which shall be considered an original
counterpart, and shall become a binding agreement when the Trust, the Realty
Partnership and the Westin Limited Partners shall have each executed a
counterpart of this Agreement.
SECTION 14. TITLES AND HEADINGS. Titles and headings to Articles and
Sections herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
SECTION 15. EXHIBITS. The Exhibits referred to in this Agreement shall
be construed with, and as an integral part of, this Agreement to the same extent
as if the same had been set forth verbatim herein.
SECTION 16. ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This Agreement,
including the Exhibits, contains the entire understanding of the parties hereto
with regard to the subject matter contained herein. In addition to amendments
and modifications permitted by Section 2(c), the parties hereto, by mutual
agreement in writing, may amend, modify and supplement this Agreement; provided
that any such amendment, modification or supplement shall be approved by a
majority of the Disinterested Members of the Trust. The failure of any party
hereto to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of such party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to constitute a waiver of any other or subsequent
breach.
SECTION 17. GOVERNING LAW. Except to the extent that Maryland law is
mandatorily applicable to the rights and obligations of the shareholders of the
Trust and the stockholders of the Corporation, this Agreement, and the
application or
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<PAGE>
interpretation thereof, shall be governed exclusively by its terms and by the
internal laws of the State of New York, without regard to principles of
conflicts of laws as applied in the State of New York or any other jurisdiction
which, if applied, would result in the application of any laws other than the
internal laws of the State of New York.
SECTION 18. SUBMISSION TO JURISDICTION. Each of the parties hereto
irrevocably submits and consents to the jurisdiction of the United States
District Court for the Southern District of New York in connection with any
action or proceeding arising out of or relating to this Agreement, and
irrevocably waives any immunity from jurisdiction thereof and any claim of
improper venue, forum non conveniens or any similar basis to which it might
otherwise be entitled in any such action or proceeding.
SECTION 19. SPECIFIC PERFORMANCE. Each of the parties acknowledges and
agrees that in the event of any breach of this Agreement, the non-breaching
party or parties would be irreparably harmed and could not be made whole by
monetary damages. The parties hereby agree that in addition to any other remedy
to which they may be entitled at law or in equity, they shall be entitled to
compel specific performance of this Agreement in any action instituted in any
court of the United States or any state thereof having subject matter
jurisdiction for such action.
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the parties hereto or by their duly authorized officers, all as of
the date first above written.
STARWOOD LODGING TRUST,
a Maryland Trust
By:/s/ Ronald C. Brown
-------------------------
Name: Ronald C. Brown
Title: Senior Vice President and
Chief Financial Officer
SLT REALTY LIMITED PARTNERSHIP
By: STARWOOD LODGING TRUST,
general partner
By: /s/ Ronald C. Brown
-------------------------
Name: Ronald C. Brown
Title: Senior Vice President and
Chief Financial Officer
WHWE L.L.C.,
a Delaware limited liability
company
By: Whitehall Street Real Estate
Limited Partnership V,
Member and Manager
By: WH Advisors, L.P.V,
General Partner
By: WH Advisors, Inc. V,
General Partner
By: /s/ Jonathan Langer
-------------------------
Name: Jonathan Langer
Title: Attorney-in-fact
WOODSTAR INVESTOR PARTNERSHIP,
a Delaware General Partnership
By: Marswood Investors, L.P.,
General Partner
By: Starwood Capital Group, L.P.,
General Partner
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<PAGE>
By: BSS Capital Partners, L.P.,
General Partner
By: Sternlicht Holdings II, Inc.,
General Partner
By: /s/ Ronald C. Brown
-------------------------
Name: Ronald C. Brown
Title: Attorney-in-Fact
NOMURA ASSET CAPITAL CORPORATION,
a Delaware Corporation
By: /s/ Daniel Abrams
-------------------------
Name: Daniel Abrams
Title: Director
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<PAGE>
SCHEDULE I TO
EXCHANGE RIGHTS AGREEMENT
NOTICE ADDRESS FOR HOLDERS
1) If to WHWE, L.L.C., to:
85 Broad Street
New York, New York 10004
Attention: Stuart Rothenberg
Telecopier: (212) 357-5505
2) If to Woodstar Investor Partnership, to:
Three Pickwick Plaza, Suite 250
Greenwich, CT 06830
Attention: Barry S. Sternlicht
Telecopier: (203) 861-2101
3) If to Nomura Asset Capital Corporation, to:
Two World Financial Center, Building B
New York, New York 10281
Attention: Daniel S. Abrams
Telecopier: (212) 667-1666
<PAGE>
EXHIBIT A TO
EXCHANGE RIGHTS AGREEMENT
LETTER OF TRANSMITTAL
To Tender Units
of
Class A Realty Partnership Units
Pursuant to the Exchange Rights Agreement
Dated as of January 2, 1998
TO: Starwood Lodging Trust
2231 E. Camelback Road, Suite 410
Phoenix, AZ 85016
Attention: General Counsel
<TABLE>
<CAPTION>
DESCRIPTION OF UNITS
- ------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF UNITS TENDERED NUMBER OF UNITS NUMBER OF UNITS
REGISTERED OWNERS (ATTACH ADDITIONAL REQUESTED TO BE REQUESTED TO BE
LIST IF NECESSARY) EXCHANGED FOR EXCHANGED FOR
PAIRED SHARES CLASS B EPS
<S> <C> <C> <C>
TOTAL
<FN>
- -----------------------
1 For a Class B EPS Request to be valid, this letter of Transmittal must be
delivered to the Trust on or prior to the Cross-over Date.
</FN>
</TABLE>
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Starwood Lodging Trust (the "Trust")
the above-described Class A RP Units (as defined in the Exchange Rights
Agreement (Class A Realty Partnership Units) dated as of January 2, 1998 (the
"Exchange Rights Agreement")) in accordance with the terms and conditions of the
Exchange Rights Agreement and this Letter of Transmittal (which together
constitute the "Offer"), receipt of which is hereby acknowledged. All terms used
herein but not defined herein are used as defined in the Exchange Rights
Agreement.
Subject to, and effective upon the issuance of Paired Shares and/or
shares of Class B EPS and/or the delivery of cash or other specified
consideration, as the case may be, for the Class A RP Units tendered hereby, the
undersigned hereby assigns and transfers to the Trust all right, title and
interest in and to all the Class A RP Units that are being tendered hereby and
irrevocably constitutes and appoints the Trust (the "Class A Unit Agent"), with
full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to (a) transfer such Class A RP
Units on the books of the Realty Partnership and (b) receive all rights,
privileges and benefits, and any and all obligations and liabilities
appertaining thereto and otherwise exercise all rights of beneficial ownership
of such Class A RP Units, all in accordance with the terms of the Offer.
The undersigned hereby represents and warrants to the Trust that the
undersigned has full power and authority to tender, sell, assign and transfer
the tendered Class A RP Units and that upon payment therefor, the Trust will
acquire unencumbered title thereto, free and clear of all liens, restrictions,
charges and encumbrances and the same will not be subject to any adverse claim.
The undersigned will, upon request, execute any additional documents deemed by
the Trust to be reasonably necessary or desirable to complete the sale,
assignment and transfer of the tendered Class A RP Units.
Unless a registration statement relating to any Paired Shares and/or
Class B EPS to be delivered to the undersigned is effective under the Securities
Act of 1933, as amended (the "Securities Act"), the undersigned hereby
represents and warrants to the Trust that the undersigned (A) is an "accredited
investor" within the meaning of Rule 501 under the Securities Act, or (B) has
sufficient knowledge and experience in financial and business matters and in
investing in entities similar to the Realty Partnership, the Corporation and the
Trust so as to be able to evaluate the risks and merits of its investment in the
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<PAGE>
Realty Partnership, the Corporation and the Trust and it is able financially to
bear the risks thereof, and in either case (i) has had an opportunity to discuss
the business, management and financial affairs of the Realty Partnership, the
Corporation and the Trust with the management of the Realty Partnership, the
Corporation and the Trust and (ii) understands that any such Paired Shares
and/or Class B EPS have not been registered under the Securities Act by reason
of their issuance in a transaction exempt from the registration requirements of
the Securities Act pursuant to Section 4(2) thereof or Rule 505 or 506
promulgated under the Securities Act and any such Paired Shares and/or Class B
EPS must be held indefinitely unless a subsequent disposition thereof is
registered under the Securities Act and applicable state securities laws or is
exempt from such registration. If not sold pursuant to an effective registration
statement, any such Paired Shares and/or Class B EPS will bear an appropriate
legend indicating that such Paired Shares and/or Class B EPS have not been
registered under the Securities Act and resale of such Paired Shares and/or
Class B EPS is restricted under applicable securities laws.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall not be affected by, and shall survive, the death or incapacity
of the undersigned, and any obligation of the undersigned hereunder shall be
binding upon the successors, assigns, heirs, executors, administrators and legal
representatives of the undersigned.
The undersigned understands that, except as provided in Section 2(b) of
the Exchange Rights Agreement, a tender of Class A RP Units pursuant to the
Exchange Rights Agreement is irrevocable and constitutes a binding agreement
between the undersigned and the Trust upon the terms and subject to the
conditions of the Exchange Rights Agreement.
Unless otherwise indicated under "Special Delivery Instructions",
please mail any Paired Shares and/or shares of Class B EPS issuable upon
exchange of the Class A RP Units tendered hereby and/or any cash payment or
Exchange Promissory Note(s) deliverable pursuant to the terms of the Exchange
Rights Agreement to the address(es) of the registered holder(s) appearing under
"Description of Units." In the event that the Special Delivery Instructions are
completed, please issue such Paired Shares and/or shares of Class B EPS and any
such Exchange Promissory Note(s) and make any such cash payment in the name of
the registered holder(s) and transmit the same to the person or persons so
indicated.
The Trust and the undersigned agree that they will cooperate with each
other and will make, execute, acknowledge, deliver, record and file, or cause to
be made, executed, acknowledged, delivered, recorded and filed, at such times
and places as the other may reasonably deem necessary, all other and
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<PAGE>
further documents and instruments, and will take all other and further actions,
as the other may reasonably request from time to time in order to effectuate the
purposes and provisions of the tender made pursuant to this Letter of
Transmittal.
-4-
<PAGE>
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4 AND 5)
To be completed ONLY if Paired Shares and/or shares of Class B EPS
and/or cash or Exchange Promissory Note(s) deliverable pursuant to the Exchange
Rights Agreement are to be sent to someone other than the undersigned or to the
undersigned at an address other than that above.
Mail certificate(s) for Paired Shares and/or shares of Class B EPS and any
Exchange Promissory Note(s) and cash payments to:
Name___________________________________________________________________________
(please print)
Address________________________________________________________________________
_______________________________________________________________________________
(include Zip Code)
_______________________________________________________________________________
_______________________________________________________________________________
(Tax Identification or Social Security Number)
SIGN HERE
Complete Substitute Form W-9 included
_______________________________________________________________________________
_______________________________________________________________________________
(Signature(s) of holder of Units)
(Must be signed by registered holder(s) as name(s) appear(s) on books and
records of the Partnership. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of Trusts or others
acting in a fiduciary or representative capacity, please set forth full title
and see instruction 4.)
Dated__________________________________________________________________________
Name(s)________________________________________________________________________
(please print)
Capacity
(Full Title)___________________________________________________________________
Address________________________________________________________________________
(include Zip Code)
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<PAGE>
Area Code and Tel. No._________________________________________________________
Tax Identification or
Social Security No.____________________________________________________________
(Complete Substitute Form W-9)
Guarantee of Signature(s)
(See Instruction 1)
Authorized
Signature______________________________________________________________________
Name of
Firm___________________________________________________________________________
Dated__________________________________________________________________________
INSTRUCTIONS
Forming Part of the Terms and Conditions of the
Exchange Rights Agreement
1. GUARANTEE OF SIGNATURE. No signature guarantee on this Letter of
Transmittal is required unless the registered holder of the Class A RP Units has
completed the box entitled "Special Delivery Instructions". In such case all
signatures on this Letter of Transmittal must be guaranteed by a member firm of
any registered national securities exchange in the United States or of the
National Association of Securities Dealers, Inc. or by a commercial bank or
trust company (not a savings bank or a savings and loan association) having an
office, branch or agency in the United States.
2. DELIVERY OF LETTER OF TRANSMITTAL. This Letter of Transmittal is to
be completed by the holder of Class A RP Units. A properly completed and duly
executed Letter of Transmittal and any other documents required by this Letter
of Transmittal must be received by the Class A Unit Agent.
No alternative, conditional or contingent tenders will be accepted,
except as permitted pursuant to the Exchange Rights Agreement.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
Units tendered and/or other information required should be listed on a separate
schedule attached hereto.
4. SIGNATURES ON LETTER OF TRANSMITTAL. The signature must correspond
with the name as shown on the books and records of the Realty Partnership
without any change whatsoever.
-6-
<PAGE>
If any of the Class A RP Units tendered hereby are owned of record by
two or more joint owners, all such owners must sign the Letter of Transmittal.
If any tendered Class A RP Units are registered in different names, it
will be necessary to complete, sign and submit as many separate Letters of
Transmittal as there are different registrations.
If this Letter of Transmittal is signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of Trusts or others
acting in a fiduciary or representative capacity, each person should so indicate
when signing, and proper evidence satisfactory to the Class A Unit Agent of
their authority so to act must be submitted.
5. SPECIAL DELIVERY INSTRUCTIONS. If a certificate for Paired Shares
and/or shares of Class B EPS and any Exchange Promissory Note(s) and cash
payment is to be sent to someone other than the signer of this Letter of
Transmittal or to an address other than that shown above, the appropriate boxes
on this Letter of Transmittal should be completed.
6. WAIVER OF CONDITIONS. The Trust reserves the right to waive in its
sole discretion any of the specified conditions of the Offer in the case of the
Class A RP Units tendered; provided that any such waiver shall not adversely
affect any holder of outstanding Class A RP Units without the consent of such
holder.
7. BACK-UP WITHHOLDING. Under the Federal income tax law, a person
surrendering Class A RP Units must provide the Class A Unit Agent with his
correct taxpayer identification number ("TIN") on Substitute Form W-9 below
unless an exemption applies. If the correct TIN is not provided, a $50 penalty
may be imposed by the Internal Revenue Service and payments made in exchange for
the surrendered Class A RP Units may be subject to back-up withholding of that
rate provided by the Federal income tax law (such rate being at the date of the
Exchange Rights Agreement, 31%).
The TIN that must be provided is that of the registered holder of the
Class A RP Units. The TIN for an individual is his social security number.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance or additional copies of the Exchange Rights Agreement and the
Letter of Transmittal may be directed to the Class A Unit Agent at the address
set forth above.
-7-
<PAGE>
IMPORTANT TAX INFORMATION
Under Federal income tax laws, a holder whose tendered Class A RP Units
are accepted for payment is required by law to provide the Class A Unit Agent
(as payer) with his correct taxpayer identification number on Substitute Form
W-9 below. If such holder is an individual, the taxpayer identification number
is his social security number. If the Class A Unit Agent is not provided with
the correct taxpayer identification number, the holder may be subject to a $50
penalty imposed by the Internal Revenue Service. In addition, payments that are
made to such holder with respect to Class A RP Units purchased pursuant to the
Offer may be subject to back-up withholding.
If back-up withholding applies, the Class A Unit Agent is required to
withhold, at that rate provided by the Federal income tax law (such rate being
at the date of the Exchange Rights Agreement 31%), of any such payments made to
the holder of Class A RP Units. Paired Shares, shares of Class B EPS and any
Exchange Promissory Note(s) otherwise deliverable hereunder may, at the expense
(and with all risk of loss for the account) of the undersigned, be sold to pay
such amounts. Back-up withholding is not an additional tax. Rather, the tax
liability of persons subject to back-up withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent back-up withholding on payments that are made to a holder of
Class A RP Units purchased pursuant to the Offer, the holder is required to
notify the Class A Unit Agent of his correct taxpayer identification number by
completing the form below certifying that the taxpayer identification number
provided on Substitute Form W-9 is correct.
WHAT NUMBER TO GIVE THE AGENT
The holder is required to give the Class A Unit Agent the social
security number or employer identification number of the record owner of the
Class A RP Units.
-8-
<PAGE>
PAYER'S NAME:
Starwood Lodging Trust
<TABLE>
<CAPTION>
Substitute Part 1 - Please provide your TIN in the box at Social Security
Form W-9 right and certify by signing and dating below Number/Employer
Identification
Number
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Department of the Certification - Under the penalties of perjury,
Treasury/Internal (i) I certify that the information provided on this
Revenue Service form is true, correct and complete and (ii) I am
not subject to backup withholding because: (a) I
am exempt from backup Service withholding, or (b) I
have not been notified by the Internal Revenue
Service (IRS) that I am subject to backup
withholding as a result of a failure to report all
interest or dividends, or (c) the IRS has
notified me that I am no longer subject to backup
withholding.
Signature ________________________________________ Date ___________
- ---------------------------------------------------------------------------------------------------------
<FN>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACK-UP
WITHHOLDING AT THAT RATE PROVIDED BY THE FEDERAL INCOME TAX
LAW (SUCH RATE BEING AT THE DATE OF THE EXCHANGE RIGHTS
AGREEMENT 31%) OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER.
</FN>
</TABLE>
EXHIBIT 4
EXCHANGE RIGHTS AGREEMENT
(CLASS B OPERATING PARTNERSHIP UNITS)
THIS EXCHANGE RIGHTS AGREEMENT (this "Agreement") is made as of January
2, 1998 among STARWOOD LODGING CORPORATION, a Maryland Corporation (the
"Corporation"), SLC OPERATING LIMITED PARTNERSHIP, a Delaware limited
partnership (the "Operating Partnership"), and certain limited partners of the
Operating Partnership listed on the signature pages hereto (the "OP Limited
Partners"). Unless otherwise indicated, capitalized terms used herein are used
herein as defined in Section 1.
WHEREAS, pursuant to a Transaction Agreement dated as of September 8,
1997 (the "Transaction Agreement") among WHWE L.L.C., Woodstar Investor
Partnership, Nomura Asset Capital Corporation, Juergen Bartels, W&S Hotel
L.L.C., Westin Hotels & Resorts Worldwide, Inc., W&S Lauderdale Corp., W&S
Seattle Corp., Westin St. John Hotel Company, Inc., W&S Denver Corp., W&S
Atlanta Corp., the Trust, SLT Realty Limited Partnership, Starwood Lodging
Corporation and SLC Operating Limited Partnership, the OP Limited Partners are
making capital contributions to the Operating Partnership in return for the
issuance of Class B Operating Partnership Units ("Class B OP Units");
WHEREAS, pursuant to the Transaction Agreement the parties hereto are
entering into this Agreement to provide for: (a) certain rights of OP Limited
Partners to tender Class B OP Units to the Corporation on or prior to the
Cross-Over Date (as defined herein) in exchange for shares of Class B EPS (as
defined herein) and (b) certain rights of OP Limited Partners to tender Class B
OP Units to the Corporation at any time in exchange for Paired Shares (as
defined herein), subject in either such case to certain rights of the
Corporation to substitute cash or other forms of consideration for such shares
of Class B EPS or Paired Shares or to cause the Operating Partnership to redeem
the Class B OP Units being tendered for cash, all on the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. For purposes of this Agreement, the following
terms have the meanings indicated:
"Board of Directors" shall mean the Board of Directors of the
Corporation or any committee authorized by the Board of Directors from time
to time to exercise any of its powers or perform any of its
responsibilities with respect to this Agreement.
<PAGE>
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New York,
New York are not required to be open.
"Cash Equivalent" of Paired Shares as of any date shall mean an amount
of cash equal to (i) the average of the daily Current Market Prices per
unit of such Paired Shares during the five (5) consecutive Trading Days
immediately preceding such date or (ii) if the Paired Shares are not
publicly traded on such date, the fair market value of such Paired Shares
as of such date as determined by the Board of Directors in good faith.
"Certificate of Admission" shall mean the Certificate of Admission of
SLC Operating Limited Partnership dated as of January 1, 1998 pursuant to
which the Class B OP Units were authorized.
"Class A Articles Supplementary" shall mean Article 6.15 of the
Declaration pursuant to which the Trust has classified and designated
30,000,000 shares of beneficial interest in the Trust as "Class A
Exchangeable Preferred Shares", as hereafter amended from time to time.
"Class A EPS" means the Class A Exchangeable Preferred Shares, par
value $0.01 per share, created by the Class A Articles Supplementary.
"Class B Articles Supplementary" shall mean Article 6.16 of the
Declaration pursuant to which the Trust has classified and designated
15,000,000 shares of beneficial interest in the Trust as "Class B
Exchangeable Preferred Shares", as hereafter amended from time to time.
"Class B EPS" shall mean the Class B Exchangeable Preferred Shares, par
value $0.01 per share, of the Trust created pursuant to the Class B
Articles Supplementary.
"Class B EPS Cash Option" shall have the meaning set forth in paragraph
(a)(ii) of Section 3 hereof.
"Class B EPS Delivery Option" shall have the meaning set forth in
paragraph (a)(ii) of Section 3 hereof.
"Class B EPS Redemption Option" shall have the meaning set forth in
paragraph (a)(ii) of Section 3 hereof.
"Class B EPS Request" shall have the meaning set forth in paragraph (a)
of Section 2 hereof.
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<PAGE>
"Class B Liquidation Preference" shall have the meaning set forth in
paragraph (b) of Article 6.16.4 of the Declaration.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Corporation" shall mean Starwood Lodging Corporation, a Maryland
corporation, and any successor.
"Corporation Shares" shall mean the shares of common stock, par value
$.01 per share, of the Corporation or any stock of the Corporation into
which such common stock may hereafter be changed.
"Cross-Over Date" shall mean the fifth anniversary of the Issue Date;
provided that in the event that the CrossOver Date referred to in the
Declaration is extended pursuant to Article 6.16.9 thereof, the Cross-Over
Date for the purposes of this Agreement shall be similarly extended.
"Current Market Price" of publicly traded Paired Shares or any other
shares of beneficial interest or other securities of the Trust or any other
issuer as of any Trading Day shall mean the last reported sales price,
regular way, on such day, or, if no sale takes place on such day, the
average of the reported closing bid and asked prices on such day, regular
way, in either case as reported on the NYSE or, if such shares or other
securities are not listed or admitted for trading on the NYSE, on the
principal national securities exchange on which such shares or other
securities are listed or admitted for trading or, if not listed or admitted
for trading on any national securities exchange, on the NASDAQ National
Market or, if such shares or other securities are not quoted on such NASDAQ
National Market, the average of the closing bid and asked prices on such
day in the over-the-counter market as reported by NASDAQ or, if bid and
asked prices for such shares or other securities on such day shall not have
been reported through NASDAQ, the average of the bid and asked prices on
such day as furnished by any NYSE member firm regularly making a market in
such security selected for such purpose by the Chief Executive Officer or
Chief Financial Officer of the Trust or the Board of Directors.
"Declaration" shall mean the Amended and Restated Declaration of Trust
of the Trust, as amended from time to time.
"Delivered Shares" shall have the meaning set forth in paragraph (e) of
Section 3 hereof.
"Disinterested Members" when used with respect to the Trust has the
meaning set forth in the Code of Regulations
-3-
<PAGE>
of the Trust and, when used with respect to the Corporation, has the
meaning set forth in the By-Laws of the Corporation, in each case as
amended from time to time.
"Election Notice" shall have the meaning set forth in paragraph (a) of
Section 3 hereof.
"Excess Shares" shall have the meaning set forth in paragraph (e) of
Section 3 hereof.
"Exchange Promissory Note" shall mean an unsecured promissory note of
the Corporation in such form as the Corporation shall reasonably prescribe
with a maturity date ninety (90) days after the date of issuance of such
note. Such Exchange Promissory Note shall bear interest in a amount equal
to (i) in the case of the substitution of an Exchange Promissory Note for
Paired Shares constituting Excess Shares pursuant to Section 3(e) hereof,
the amount of any dividends paid during the period that such note remains
outstanding on a number of Paired Shares equal to the number of Paired
Shares for which such Exchange Promissory Note is being substituted and
(ii) in the case of the substitution of an Exchange Promissory Note for any
shares of Class B EPS constituting Excess Shares pursuant to such Section,
the amount of any dividends accrued (whether or not paid) during the period
that such note remains outstanding on a number of shares of Class B EPS
equal to the number of shares of Class B EPS for which such Exchange
Promissory Note is being substituted, which interest shall be payable on
the dates of payment of the corresponding dividends.
"Exchange Ratio" shall have the meaning set forth in paragraph (b) of
Section 3 hereof.
"Issue Date" shall mean the first date on which shares of Class A EPS
and Class B EPS are issued by the Trust pursuant to the Transaction
Agreement.
"Letter of Transmittal" shall have the meaning set forth in paragraph
(a) of Section 2 hereof.
"NYSE" shall mean the New York Stock Exchange.
"Offered Shares" shall have the meaning set forth in paragraph (e) of
Section 3 hereof.
"OP Special Distribution" shall have the meaning set forth in paragraph
(f) of Section 3 hereof.
"Ownership Limit" shall have the meaning set forth in Section 6.12 of
the Declaration.
-4-
<PAGE>
"Paired Shares" shall mean units consisting of one Trust Share paired
with one Corporation Share and represented by a single share certificate,
as provided in the Pairing Agreement dated as of June 25, 1980, between the
Trust and the Corporation, as amended from time to time, subject to any
changes in the securities constituting a unit of Paired Shares under such
Pairing Agreement from time to time.
"Paired Shares Delivery Option" shall have the meaning set forth in
paragraph (a)(i) of Section 3 hereof.
"Paired Shares Cash Option" shall have the meaning set forth in
paragraph (a)(i) of Section 3 hereof.
"Paired Shares Redemption Option" shall have the meaning set forth in
paragraph (a)(i) of Section 3 hereof.
"Paired Shares Request" shall have the meaning set forth in paragraph
(a) of Section 2 hereof.
"Person" shall mean any individual, firm, partnership, corporation,
limited liability company or other entity, and shall include any successor
(by merger or otherwise) of such entity.
"Registered Sale Option" shall have the meaning set forth in paragraph
(e) of Section 3 hereof.
"REIT Rules" shall mean the requirements (i) for the Trust to qualify
as a real estate investment trust under the Code as set forth in Sections
856(a)(5) and 856(a)(6) of the Code and (ii) for the Corporation or any
affiliate of the Corporation which is a tenant of the Trust to not be
treated as a related party pursuant to Section 856(d)(2)(B) of the Code.
"Requested Shares" shall have the meaning set forth in paragraph (d) of
Section 3 hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"SLC Limited Partnership Agreement" shall mean the second amended and
restated limited partnership agreement of SLC operating limited partnership
entered into on November 14, 1997 by and among Starwood Lodging
Corporation, a Maryland corporation, as General Partner and the persons
whose names are set forth in exhibits A and A-1 thereof, as limited
partners, pursuant to the provisions of the Delaware Revised Uniform
Limited Partnership Act.
-5-
<PAGE>
"Trading Day" with respect to publicly traded Paired Shares or any
other shares of beneficial interest or other securities of the Trust or any
other issuer shall mean any day on which the securities in question are
traded on the NYSE, or if such securities are not listed or admitted for
trading on the NYSE, on the principal national securities exchange on which
such securities are listed or admitted, or if not listed or admitted for
trading on any national securities exchange, on the NASDAQ National Market,
or if such securities are not quoted on such NASDAQ National Market, in the
applicable securities market in which such securities are traded.
"Transaction Agreement" shall have the meaning set forth in the
Recitals.
"Transfer Agent" shall mean ChaseMellon Shareholder Services, L.L.C.
(or any successor thereof), or such other agent or agents of the Trust as
may be designated by the Board of Trustees of the Trust or their designee
as the transfer agent for the Class B EPS and/or the Paired Shares.
"Trust" shall mean Starwood Lodging Trust, a Maryland real estate
investment trust, and any successor.
"Trust Shares" shall mean the common shares of beneficial interest in
the Trust, par value $.01 per share, or any shares of beneficial interest
in the Trust into which such common shares may be changed.
"Westin Transaction Securities" shall mean, with respect to a holder of
Class B OP Units or an affiliate thereof, any shares of Class A EPS, shares
of Class B EPS, Class A RP Units and Starwood Operating Partnership Units
(as defined in the Transaction Agreement) received by such holder or
affiliate pursuant to the Transaction Agreement, together with any shares
of Class B EPS, Class A EPS or Paired Shares (or other securities) issued
upon exchange or conversion of any such Westin Transaction Securities.
SECTION 2. RIGHT TO TENDER CLASS B OP UNITS. (a) Upon the terms and
subject to the conditions of this Agreement, each registered holder of Class B
OP Units will have the right to tender outstanding Class B OP Units to the
Corporation. In order for Class B OP Units to be validly tendered pursuant to
this Agreement, the registered holder thereof shall deliver to the Corporation,
at the address provided pursuant to Section 9 , (i) a completed and duly
executed Letter of Transmittal in the form attached hereto as Exhibit A (the
"Letter of Transmittal") and any other documents required by the Letter of
Transmittal and (ii) a certificate (duly executed on behalf of such holder by an
officer, partner, manager or other duly authorized representative of such
holder, if such registered holder is not an individual)
-6-
<PAGE>
setting forth (A) the number of Trust Shares and Corporation Shares held
directly by such holder, and in the case of WHWE L.L.C. ("WHWE"), held by
Whitehall Real Estate Limited Partnership ("Whitehall"), GS Capital Partners,
L.P. ("GSCP") or The Goldman Sachs Group, L.P. (other than shares held in
"street name" for third parties or shares held in accounts for unaffiliated
third parties) and (B) the number of partners in Whitehall or GSCP with a 25% or
greater interest in the profits or capital of Whitehall or GSCP, respectively.
In addition, in the event of a tender of Class B OP Units by WHWE, the
Corporation may deliver to WHWE a list of the Corporation's ten largest
stockholders, in which event, WHWE shall certify to the Corporation the identity
of any such stockholders that are directly partners of Whitehall or GSCP in a
partnership in which WHWE or GSCP and such stockholder are both partners with a
25% or greater interest in the profits and capital of such partnership. In such
Letter of Transmittal, the holder of the Class B OP Units being tendered shall
specify which Class B OP Units such holder desires to exchange for Paired Shares
(a "Paired Shares Request") and which Class B OP Units such holder desires to
exchange for shares of Class B EPS (a "Class B EPS Request"); provided that no
Class B EPS Request may be made unless the Letter of Transmittal is delivered to
the Corporation on or prior to the Cross-Over Date. The Corporation shall make
all determinations as to the validity and form of any tender of Class B OP Units
in accordance with the provisions of this Agreement and upon rejection of a
tender shall give the tendering holder written notice of such rejection, which
shall include the reasons therefor.
(b) Unless otherwise determined by agreement of the Corporation,
tenders of Class B OP Units pursuant to this Agreement shall be irrevocable and
shall not be subject to withdrawal or modification; provided that in the event
that the issuance of the full number of Requested Shares pursuant to any tender
of Class B OP Units would violate either the Ownership Limit or the REIT Rules
and either (i) the Corporation elects pursuant to Section 3(d) below to deliver
an Exchange Promissory Note in substitution for any Excess Shares or (ii) the
Corporation exercises the Registered Sale Option with respect to any such Excess
Shares, the holder of the Class B OP Units tendered will have the right to
withdraw his or her Letter of Transmittal as to the Excess Shares for which such
Exchange Promissory Note is proposed to be substituted or with respect to which
such Registered Sale Option is being exercised, which withdrawal must be made by
written notice to the Corporation within ten (10) Business Days after receipt of
the applicable Election Notice.
(c) The rights to exchange Class B OP Units pursuant to this Agreement
constitute a continuous offer and may not be withdrawn, amended or modified by
the Corporation without the prior written consent of each registered holder of
outstanding Class B OP Units adversely affected by such withdrawal, amendment
-7-
<PAGE>
or modification; provided that any withdrawal, amendment or modification that
does not adversely affect any holder of outstanding Class B OP Units may be
effected without the consent of such holder.
SECTION 3. ACCEPTANCE OF TENDER; DELIVERY OF ELECTION NOTICE. (a)
Subject to paragraph (c) below, as promptly as practicable (and in any event
within ten (10) Business Days) after receipt of a Letter of Transmittal and all
related documents and certifications, the Corporation shall elect, pursuant to
an election notice given to the registered holder who delivered such Letter of
Transmittal to the Corporation (an "Election Notice"), to take one or more of
the following actions with respect to the Class B OP Units subject to such
Letter of Transmittal:
(i) with respect to any such Class B OP Units for which a Paired Shares
Request has been made, the Corporation shall elect either (A) to issue to
the registered holder a number of Paired Shares equal to the number of such
Class B OP Units (including procuring the issuance by the Trust of the
Trust Shares component of such Paired Shares) (the "Paired Shares Delivery
Option"), (B) to pay to such holder the Cash Equivalent of such Paired
Shares determined as of the date of such Election Notice (the "Paired
Shares Cash Option"), (C) to cause the Operating Partnership to redeem such
Class B OP Units for a cash redemption price equal to such Cash Equivalent
of such Paired Shares (the "Paired Shares Redemption Option") or (D) any
combination of the actions described in the foregoing clauses (A), (B) and
(C); and
(ii) with respect to any Class B OP Units for which a Class B EPS
Request has been made, the Corporation shall elect either (A) to procure
the issuance by the Trust, to the registered holder a number of shares of
Class B EPS equal to the number of such Class B OP Units multiplied by the
Exchange Ratio (as determined pursuant to paragraph (b) below) in effect as
of the date of such Election Notice (the "Class B EPS Delivery Option"),
(B) to pay to such registered holders an amount in cash equal to the Class
B Liquidation Preference of such shares of Class B EPS at such time (the
"Class B EPS Cash Option"), (C) to cause the Operating Partnership to
redeem such Class B OP Units for a cash redemption price equal to such
Class B Liquidation Preference of such shares of Class B EPS at such time
(the "Class B EPS Redemption Option") or (D) any combination of the actions
described in the foregoing clauses (A), (B) and (C).
(b) The "Exchange Ratio" of shares of Class B EPS for each Class B OP
Unit at any time shall be equal to one (1) divided by the number of Class B
Underlying Paired Shares (as
-8-
<PAGE>
defined in the Class B Articles Supplementary) for which each share of Class B
EPS is then indirectly exchangeable as of such date (determined without taking
into consideration any Class A Dividend Replacement Shares or Class B Dividend
Replacement Shares, as defined in the Class A Articles Supplementary and Class B
Articles Supplementary, respectively).
(c) (i) If, at any time after the Issue Date, the Trust or the
Corporation shall become a party to any transaction, including, without
limitation, a merger, consolidation, statutory share exchange, self tender
offer for all or substantially all outstanding Trust Shares and/or
Corporation Shares, sale of all or substantially all of the Trust's or the
Corporation's assets or recapitalization of the Trust Shares and/or the
Corporation Shares (but excluding any event constituting a Trust Common
Adjustment Event or a Corporation Common Adjustment Event) (each of the
foregoing being referred to herein as a "Paired Shares Transaction"), in
each case as a result of which the outstanding Trust Shares and/or
Corporation Shares shall be converted into or exchanged for the right to
receive stock, securities or other property (including cash or any
combination thereof), effective as of the effective date of such Paired
Shares Transaction, each unit of Paired Shares issuable upon tender of
Class B OP Units hereunder shall thereafter be deemed to consist of the
kind and amount of shares of beneficial interest in the Trust, shares of
stock of the Corporation and other securities and property (including cash
or any combination thereof) that would have been held or receivable upon
the consummation of such Paired Shares Transaction by a holder of a number
of Paired Shares equal to the number of Class B OP Units so tendered
assuming such holder of Paired Shares (A) is not a Person with which the
Trust or the Corporation consolidated or into which the Trust or the
Corporation was merged or which merged into the Trust or the Corporation or
to which such sale or transfer was made, as the case may be (a "constituent
person"), or an affiliate of a Constituent Person and (B) failed to
exercise his or her rights of election, if any, as to the kind or amount of
stock, securities and other property (including cash) receivable upon such
Paired Shares Transaction (provided that if the kind or amount of stock,
securities and other property (including cash) receivable upon such Paired
Shares Transaction is not the same for each unit of Paired Shares held
immediately prior to such Paired Shares Transaction by other than a
constituent person or an affiliate thereof and in respect of which such
rights of election shall not have been exercised ("Non-Electing Shares"),
then for the purposes of this subparagraph (ii) the kind and amount of
stock, securities and other property (including cash) receivable upon such
Paired Shares Transaction in respect of each Non-Electing Share shall be
deemed to be the kind and amount so receivable per share by
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<PAGE>
a plurality of the Non-Electing Shares). The provisions of this
paragraph (i) shall similarly apply to successive Paired Shares
Transactions.
(ii) If, at any time after the Issue Date, the Trust shall become a
party to any transaction, including, without limitation, a merger,
consolidation, statutory share exchange, self tender offer for all or
substantially all outstanding Trust Shares, sale of all or substantially all of
the Trust's assets or recapitalization of the Class B EPS (each of the foregoing
being referred to herein as a "Class B Transaction"), in each case as a result
of which the outstanding shares of Class B EPS shall be converted into or
exchanged for the right to receive stock, securities or other property
(including cash or any combination thereof), effective as of the effective date
of such Class B Transaction, each share of Class B EPS issuable upon tender of
Class B OP Units shall thereafter be deemed to consist of the kind and amount of
shares of stock and other securities and property (including cash or any
combination thereof) that would have been held or receivable upon the
consummation of such Class B Transaction by a holder of a number of shares of
Class B EPS equal to the number of Class B OP Units being tendered, assuming
such holder of shares of Class B EPS (A) is not a Person with which the Trust
consolidated or into which the Trust was merged or which merged into the Trust
or to which such sale or transfer was made, as the case may be, or an affiliate
of such a constituent person and (B) failed to exercise his or her rights of
election, if any, as to the kind or amount of stock, securities an other
property (including cash) receivable upon such Class B Transaction (provided
that if the kind or amount of stock, securities and other property (including
cash) receivable upon such Class B Transaction is not the same for each share of
Class B EPS held immediately prior to such Class B Transaction by other than a
constituent person or an affiliate thereof and in respect of which such rights
of election shall not have been exercised, then for the purposes of this
subparagraph (ii) the kind and amount of stock, securities and other property
(including cash) receivable upon such Class B Transaction by each Non-Electing
Share shall be deemed to be the kind and amount so receivable per share by a
plurality of the Non-Electing Shares). The provisions of this paragraph (ii)
shall similarly apply to successive Class B Transactions.
(d) Notwithstanding any other provision of this Agreement, no Paired
Shares or shares of Class B EPS shall be issued or paid in respect of any tender
of Class B OP Units (i) prior to the expiration or termination of the waiting
period applicable to such issuance or payment, if any, under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as it may be amended from time
to time, or (ii) prior to the receipt of all governmental and regulatory
approvals which are required to be obtained prior to such issuance or payment,
including, without limitation, any required approvals of the gaming authorities
of
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<PAGE>
the State of Nevada and of Clark County, Nevada (the "Gaming Approvals") subject
to the limitations on transfer of any interest in the Operating Partnership as
provided in Section 9.6 of the SLC Limited Partnership Agreement.
(e) If the delivery to a registered holder tendering Class B OP Units
of the full number(s) of Paired Shares and/or shares of Class B EPS requested to
be delivered pursuant to the Letter of Transmittal (the "Requested Shares")
would result in a violation of either the Ownership Limit or the REIT Rules, the
Corporation may elect in the Election Notice, in lieu of the options described
in paragraph (a) above (i) to deliver to such holder the maximum number(s) of
Paired Shares and/or shares of Class B EPS, as applicable, (which maximum
numbers, in the case of a Letter of Transmittal containing both a Paired Shares
Request and a Class B EPS Request, shall represent the same percentage of the
numbers of Paired Shares and shares of Class B EPS, respectively, comprising
such Requested Shares) that may be delivered without causing such a violation
(the "Delivered Shares", with the Requested Shares in excess of the Delivered
Shares being referred to herein as the "Excess Shares") and (ii) (A) in respect
of any Paired Shares included in such Excess Shares either (1) to pay such
holder the Cash Equivalent of such Paired Shares determined as of the date of
such Election Notice, (2) to deliver to such holder an Exchange Promissory Note
in a principal amount equal to such Cash Equivalent or (3) to cause the
Operating Partnership to redeem a corresponding number of Class B OP Units for a
cash redemption price equal to such Cash Equivalent and (B) in respect of any
shares of Class B EPS included in such Excess Shares, either (1) to make a cash
payment to such holder equal to the Class B Liquidation Preference of such
shares as of such date, (2) to deliver to such holder an Exchange Promissory
Note in a principal amount equal to such Class B Liquidation Preference or (3)
to cause the Operating Partnership to redeem a corresponding number of Class B
OP Units for a cash redemption price equal to such Class B Liquidation
Preference. Notwithstanding the foregoing, in the event that the delivery of the
full number of Requested Shares pursuant to a Letter of Transmittal would
violate either the Ownership Limit or the REIT Rules because the registered
holder of Class B OP Units tendering Class B OP Units, together with such
holder's affiliates (but without giving effect to any other applicable
attribution rules under the Code), beneficially owns, at the date of the
Election Notice, Paired Shares and/or shares of Class B EPS other than through
the ownership of Westin Transaction Securities, the Corporation will have the
option (the "Registered Sale Option"), exercisable in the Election Notice, in
lieu of delivering an Exchange Promissory Note in a principal amount equal to
the Cash Equivalent of the any Paired Shares included in the Excess Shares or
the Class B Liquidation Preference of any shares of Class B EPS included in the
Paired Shares, to procure the filing of a registration statement under the
Securities Act, and to publicly offer and sell pursuant to such registration
-11-
<PAGE>
statement in such manner as the Corporation in good faith determines to be
appropriate (x) a number of Paired Shares equal to the number of Paired Shares
included in such Excess Shares or (y) a number of Paired Shares equal to the
number of Class B Underlying Paired Shares (as defined in the Class B Articles
Supplementary) for which the shares of Class B EPS included in such Excess
Shares are then indirectly exchangeable as of such date (determined without
taking into consideration any Class A Dividend Replacement Shares or Class B
Dividend Replacement Shares, as defined in the Class A Articles Supplementary
and Class B Articles Supplementary, respectively) (in either such case, the
"Offered Shares"), the net proceeds of which sale (after deducting any
applicable underwriting discounts or commissions and the expenses of such
offering) shall be paid to such holder.
(f) If, as of the date of the Election Notice given by the Corporation
with respect to any tender of Class B OP Units, there are any accrued but unpaid
OP Special Distributions (as defined in the Certificate of Admission), then: (i)
the number of shares of Class B EPS issuable in exchange for each Class B OP
Unit with respect to which a Class B EPS Request has been made shall be
increased by a number of shares equal to (A) the amount of such accrued but
unpaid OP Special Distributions divided by (B) the product of (1) the number of
Class B Underlying Paired Shares (as defined in the Class B Articles
Supplementary) for which each share of Class B EPS is then indirectly
exchangeable as of such date (determined without taking into consideration any
Class A Dividend Replacement Shares or Class B Dividend Replacement Shares, as
defined in the Class A Articles Supplementary and Class B Articles
Supplementary, respectively) multiplied by (2) the Cash Equivalent of each
Paired Share as of such date, and (ii) the number of Paired Shares issuable in
exchange for each Class B OP Unit with respect to which a Paired Shares Request
has been made shall be increased by a number of shares equal to (A) the amount
of such accrued but unpaid OP Special Distributions divided by (B) the Cash
Equivalent of each Paired Share as of such date.
SECTION 4. DELIVERY OF SECURITIES AND/OR CASH TO HOLDER. (a) If the
Election Notice relating to any tender of Class B OP Units pursuant to this
Agreement does not give rise to a withdrawal right pursuant to Section 2(b)
above, such Election Notice shall be accompanied by the delivery of the Paired
Shares, shares of Class B EPS and/or cash required to be delivered pursuant to
such Election Notice. If the Election Notice does give rise to such a withdrawal
right, but such right is not exercised by the holder that delivered the related
Letter of Transmittal, the Corporation shall deliver the Paired Shares, shares
of Class B EPS, Exchange Promissory Note(s) and/or cash required to be delivered
pursuant to such Election Notice within five (5) Business Days after the
expiration of such withdrawal right.
-12-
<PAGE>
(b) If the Election Notice includes the exercise of the Registered Sale
Option, the proceeds from the sale of the Offered Shares shall be paid over to
the applicable registered holder promptly upon receipt. Any cash payable to such
registered holder hereunder shall be payable at the election of the Corporation
by check or by wire transfer to an account designated in writing by such holder,
if one has been so designated.
(c) With respect to any Paired Shares to be issued pursuant to an
Election Notice, the Corporation shall issue and deliver (and shall cause the
Trust to issue and deliver) at the office of the Corporation (or, at the option
of the Corporation, at the office of the Transfer Agent) to the applicable
registered holder a certificate or certificates for the number of full Paired
Shares deliverable in accordance with the provisions of Section 3 above, and any
fractional interest in respect of a unit of Paired Shares otherwise deliverable
pursuant to such provisions shall be settled as provided in paragraph (d) below.
With respect to any shares of Class B EPS to be issued pursuant to an Election
Notice, the Corporation shall procure from the Trust and deliver at the office
of the Corporation (or, at the option of the Corporation, at the office of the
Transfer Agent) to the applicable registered holder a certificate or
certificates for the number of full shares of Class B EPS deliverable in
accordance with the provisions of Section 3 above, and any fractional interest
in respect of a share of Class B EPS otherwise deliverable pursuant to such
provisions shall be settled as provided in paragraph (d) below.
(d) No fractional units of Paired Shares or shares of Class B EPS or
scrip evidencing fractions of units of Paired Shares or shares of Class B EPS
shall be issued upon any tender of Class B OP Units pursuant to this Agreement.
Instead of any fractional interest in a unit of Paired Shares that would
otherwise be deliverable in connection with such tender, the Corporation shall
pay to the registered holder an amount in cash equal to the corresponding
fraction of the Current Market Price of the Paired Shares on the Trading Day
immediately preceding the date of the applicable Election Notice, and instead of
any fractional interest in a share of Class B EPS that would otherwise be
deliverable in connection with such tender, the Corporation shall pay to the
registered holder an amount in cash equal to the corresponding fraction of the
product of (x) the Current Market Price of the Paired Shares on the Trading Day
immediately preceding the date of the applicable Election Notice multiplied by
(y) the number of Class B Underlying Paired Shares (as defined in the Class B
Articles Supplementary) for which each share of Class B EPS is then indirectly
exchangeable as of such date (determined without taking into consideration any
Class A Dividend Replacement Shares or Class B Dividend Replacement Shares, as
defined in the Class A Articles Supplementary and Class B Articles
Supplementary, respectively). If more than one
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<PAGE>
Letter of Transmittal shall be delivered at one time by the same registered
holder, the numbers of full Paired Shares and full shares of Class B EPS which
shall be issuable upon exchange of the Class B OP Units tendered thereby shall
be computed on the basis of the aggregate number of Class B OP Units so
tendered.
(e) The Corporation covenants that any Paired Shares and shares of
Class B EPS issued pursuant to this Agreement will be validly issued, fully paid
and non-assessable. If a registered holder exchanges Class B OP Units pursuant
to this Agreement, the Corporation shall pay any documentary, stamp or similar
issue or transfer tax due on any issuance of Paired Shares and/or shares of
Class B EPS upon such exchange. Such holder, however, shall (i) pay to the
Corporation the amount of any additional documentary, stamp or similar issue or
transfer tax which is due (or shall establish to the satisfaction of the
Corporation the payment thereof) as a result of Paired Shares or shares of Class
B EPS being issued in a name other than the name of such holder and (ii) be
responsible for all income or other taxes as a result of such exchange.
(f) The Corporation shall have the right to affix to any certificates
evidencing Paired Shares or shares of Class B EPS issued pursuant to this
Agreement: (i) any restrictive legend required in order for such issuance to be
in compliance with the Securities Act and any applicable state securities laws,
(ii) if applicable, a legend referring to the transfer restrictions provided for
in Section 6.16(f) of the Transaction Agreement and (iii) any other legend
required in order to comply with any applicable law.
SECTION 5. IMPLEMENTATION OF REDEMPTION OPTION. In the event that the
Corporation exercises the Paired Shares Redemption Option or the Class B EPS
Redemption Option, the Corporation shall cause the Operating Partnership to
redeem the corresponding Class B OP Units as soon as practicable after the date
of the Election Notice. The cash redemption price payable to the registered
holder pursuant to such Paired Shares Redemption Option or Class B EPS
Redemption Option shall be paid by the Operating Partnership at its election by
check or by wire transfer to an account designated in writing by such holder, if
one has been so designated.
SECTION 6. REPRESENTATIONS OF TENDERING HOLDER. Each tender of Class B
OP Units shall constitute a representation and warranty by the tendering holder
of each of the representations and warranties set forth in the form of Letter of
Transmittal. Without limiting the generality of the foregoing, unless, at the
time of a tender for exchange of Class B OP Units pursuant to this Agreement, a
registration statement relating to any Paired Shares and/or shares of Class B
EPS to be delivered upon such tender is effective under the Securities Act, such
tender shall constitute a representation and warranty by the tendering holder
-14-
<PAGE>
to the Corporation that such tendering holder (i) is an "accredited investor"
within the meaning of Rule 501 under the Securities Act, (ii) has sufficient
knowledge and experience in financial and business matters and in investing in
entities similar to the Operating Partnership, the Corporation and the Trust so
as to be able to evaluate the risks and merits of its investment in the
Operating Partnership and it is able financially to bear the risks thereof,
(iii) has had an opportunity to discuss the business, management and financial
affairs of the Operating Partnership, the Trust and the Corporation with the
management of the Operating Partnership, the Trust and the Corporation, and (iv)
understands the Paired Shares and shares of Class B EPS issuable pursuant to
this Agreement have not and will not have been registered under the Securities
Act by reason of their issuance in a transaction exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) thereof or Rule 505
or 506 promulgated under the Securities Act and such Paired Shares and shares of
Class B EPS must be held indefinitely unless a subsequent disposition thereof is
registered under the Securities Act and applicable state securities laws or is
exempt from such registration.
SECTION 7. STATUS OF TENDERING HOLDER. Until the holder of Class B OP
Units tendered pursuant to this Agreement becomes a holder of record of the
Paired Shares and/or shares of Class B EPS issued in exchange therefor (in the
case of an exercise of the Paired Shares Delivery Option and/or the Class B EPS
Delivery Option, as applicable) or until such holder has received cash in
exchange therefor (in the case of an exercise of the Paired Shares Cash Option,
the Paired Shares Redemption Option, the Class B EPS Cash Option and/or the
Class B EPS Redemption Option, as applicable) and until the holder has received
an Exchange Promissory Note in substitution for any Excess Shares or until the
holder has received the proceeds from the sale of the corresponding Offered
Shares (in the case of an exercise of the Registered Sale Option), such holder
shall continue to hold and own the corresponding Class B OP Units for all
purposes of the Realty Partnership Agreement. In the case of an exercise of the
Paired Shares Delivery Option or Class B EPS Delivery Option, no such holder
shall have any rights as a shareholder of the Trust or a stockholder of the
Corporation in respect of such Paired Shares, or as a shareholder of the Trust
in respect of such shares of Class B EPS, until such holder becomes a holder of
record of such Paired Shares or shares of Class B EPS.
SECTION 8. RESERVATION OF SHARES; CLOSING OF TRANSFER BOOKS. (a) The
Corporation shall reserve and shall at all times have reserved out of its
authorized but unissued Corporation Shares, solely for the purpose of effecting
the exchange pursuant to this Agreement, enough Corporation Shares to permit the
exchange of the then outstanding Class B OP Units for Paired Shares pursuant to
this Agreement and shall use its best efforts
-15-
<PAGE>
to cause the Trust to reserve and shall at all times have, solely for the
purpose of effecting such exchange, enough Trust Shares to permit such exchange.
In addition, until the Cross-Over Date, the Corporation shall use its best
efforts to cause the Trust to reserve and at all times have reserved out of its
authorized but unissued shares of Class B EPS, solely for the purpose of
effecting the exchange pursuant to this Agreement, enough shares of Class B EPS
to permit the exchange of the then outstanding Class B OP Units for shares of
Class B EPS pursuant to this Agreement.
(b) The Corporation shall not close its transfer books so as to prevent
the timely issuance of Corporation Shares pursuant to this Agreement. The
Corporation shall use its best efforts to cause the Trust not to close its
transfer books so as to prevent the timely issuance of Trust Shares or shares of
Class B EPS pursuant to this Agreement.
SECTION 9. NOTICES. All notices, documents and other communications
under this Agreement shall be in writing and shall be deemed given when
delivered personally or by overnight mail or when sent by facsimile
transmission, or four days after being mailed (by registered mail, return
receipt requested) to a party at the following address (or to such other address
as such party may have specified by notice given to the other parties pursuant
to this provision):
(a) If to the Corporation or the Operating Partnership, to:
Starwood Lodging Corporation
2231 E. Camelback Road, Suite 410
Phoenix, AZ 85016
Attention: General Counsel
Telecopy No.: (602) 852-0686
Telephone No.: (602) 852-3900
with a copy to:
Sidley & Austin
555 West 5th Street
Los Angeles, California 90013
Attention: Sherwin L. Samuels
Telecopy No.: (213) 896-6600
Telephone No.: (213) 896-6000
(b) If to any OP Limited Partner, to the address specified on Schedule
I hereto.
with a copy to:
Sullivan & Cromwell
125 Broad Street
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<PAGE>
New York, NY 10004
Attention: Joseph C. Shenker
Telecopy No.: (212) 558-3588
Telephone No.: (212) 558-4000
SECTION 10. DETERMINATIONS AND INTERPRETATION. All agreements between
the Corporation, the Operating Partnership and the OP Limited Partners provided
for in (or required by or pursuant to) this Agreement shall be made on behalf of
the Corporation and the Operating Partnership by their respective Disinterested
Members, including, without limitation, any agreement between the Corporation,
the Operating Partnership and the OP Limited Partners as to the election by the
Corporation of the Paired Shares Delivery Option, the Paired Shares Cash Option,
the Paired Shares Redemption Option, the Class B EPS Delivery Option, the Class
B EPS Cash Option or the Class B EPS Redemption Option with respect to a tender
of Class B OP Units pursuant to Section 2(a), any agreement to permit the
revocation, withdrawal or modification of a tender of Class B OP Units pursuant
to Section 2(b). All interpretations of the terms of this Agreement shall be
resolved on behalf of the Corporation by its Disinterested Members.
SECTION 11. PARTIAL INVALIDITY. In case any one or more of the
provisions contained herein shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Agreement, but
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision or provisions had never been contained herein unless the deletion of
such provision or provisions would result in such a material change as to cause
completion of the transactions contemplated hereby to be unreasonable.
SECTION 12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
permitted successors or assigns. In addition, and whether or not any express
assignment shall have been made, the provisions of this Agreement which are for
the benefit of the parties hereto other than the Corporation, the Operating
Partnership and the OP Limited Partners, shall also be for the benefit of and
enforceable by any subsequent holder of any Class Units.
SECTION 13. EXECUTION IN COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be considered an original counterpart,
and shall become a binding agreement when the Corporation, the Operating
Partnership and the OP Limited Partners shall have each executed a counterpart
of this Agreement.
SECTION 14. TITLES AND HEADINGS. Titles and headings to Articles and
Sections herein are inserted for convenience of
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<PAGE>
reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
SECTION 15. EXHIBITS. The Exhibits referred to in this Agreement shall
be construed with, and as an integral part of, this Agreement to the same extent
as if the same had been set forth verbatim herein.
SECTION 16. ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This Agreement,
including the Exhibits, contains the entire understanding of the parties hereto
with regard to the subject matter contained herein. In addition to amendments
and modifications permitted by Section 2(c), the parties hereto, by mutual
agreement in writing, may amend, modify and supplement this Agreement; provided
that any such amendment, modification or supplement shall be approved by a
majority of the Disinterested Members of the Corporation. The failure of any
party hereto to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of such party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to constitute a waiver of any other or subsequent
breach.
SECTION 17. GOVERNING LAW. Except to the extent that Maryland law is
mandatorily applicable to the rights and obligations of the shareholders of the
Trust and the stockholders of the Corporation, this Agreement, and the
application or interpretation thereof, shall be governed exclusively by its
terms and by the internal laws of the State of New York, without regard to
principles of conflicts of laws as applied in the State of New York or any other
jurisdiction which, if applied, would result in the application of any laws
other than the internal laws of the State of New York.
SECTION 18. SUBMISSION TO JURISDICTION. Each of the parties hereto
irrevocably submits and consents to the jurisdiction of the United States
District Court for the Southern District of New York in connection with any
action or proceeding arising out of or relating to this Agreement, and
irrevocably waives any immunity from jurisdiction thereof and any claim of
improper venue, forum non conveniens or any similar basis to which it might
otherwise be entitled in any such action or proceeding.
SECTION 19. SPECIFIC PERFORMANCE. Each of the parties acknowledges and
agrees that in the event of any breach of this Agreement, the non-breaching
party or parties would be irreparably harmed and could not be made whole by
monetary damages. The parties hereby agree that in addition to any other remedy
to which they may be entitled at law or in equity, they shall be entitled to
compel specific performance of this Agreement in any action instituted in any
court of the United
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<PAGE>
States or any state thereof having subject matter jurisdiction for such action.
-19-
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties hereto or by their duly authorized officers, all as of the date
first above written.
STARWOOD LODGING CORPORATION,
a Maryland Corporation
By: /s/ Alan M. Schnaid
-------------------------------
Name: Alan M. Schnaid
Title: Vice President and
Corporate Controller
Principal Accounting Officer
SLC OPERATING LIMITED PARTNERSHIP
By: STARWOOD LODGING CORPORATION,
general partner
By: /s/ Alan M. Schnaid
-------------------------------
Name: Alan M. Schnaid
Title: Vice President and
Corporate Controller
Principal Accounting Officer
WHWE L.L.C.,
a Delaware limited liability
company
By: Whitehall Street Real Estate
Limited Partnership V,
Member and Manager
By: WH Advisors, L.P.V,
General Partner
By: WH Advisors, Inc. V,
General Partner
By: /s/ Jonathan Langer
-------------------------------
Name: Jonathan Langer
Title: Attorney-in-fact
WOODSTAR INVESTOR PARTNERSHIP,
a Delaware General Partnership
By: Marswood Investors, L.P.,
General Partner
By: Starwood Capital Group, L.P.,
General Partner
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<PAGE>
By: BSS Capital Partners, L.P.,
General Partner
By: Sternlicht Holdings II, Inc.,
General Partner
By: /s/ Ronald C. Brown
-------------------------------
Name: Ronald C. Brown
Title: Attorney-in-fact
NOMURA ASSET CAPITAL CORPORATION,
a Delaware Corporation
By: /s/ Daniel Abrams
-------------------------------
Name: Daniel Abrams
Title: Director
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<PAGE>
SCHEDULE I TO
EXCHANGE RIGHTS AGREEMENT
NOTICE ADDRESS FOR HOLDERS
1) If to WHWE, L.L.C., to:
85 Broad Street
New York, New York 10004
Attention: Stuart Rothenberg
Telecopier: (212) 357-5505
2) If to Woodstar Investor Partnership, to:
Three Pickwick Plaza, Suite 250
Greenwich, CT 06830
Attention: Barry S. Sternlicht
Telecopier: (203) 861-2101
3) If to Nomura Asset Capital Corporation, to:
Two World Financial Center, Building B
New York, New York 10281
Attention: Daniel S. Abrams
Telecopier: (212) 667-1666
-1-
<PAGE>
EXHIBIT A TO
EXCHANGE RIGHTS AGREEMENT
LETTER OF TRANSMITTAL
To Tender Units
of
Class B Operating Partnership Units
Pursuant to the Exchange Rights Agreement
Dated as of January 2, 1998
TO: Starwood Lodging Corporation
2231 E. Camelback Road, Suite 410
Phoenix, AZ 85016
Attention: General Counsel
DESCRIPTION OF UNITS
- -------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF UNITS TENDERED NUMBER OF UNITS NUMBER OF UNITS
REGISTERED OWNERS (ATTACH REQUESTED TO BE REQUESTED TO BE
ADDITIONAL LIST EXCHANGED FOR EXCHANGED FOR
IF NECESSARY) PAIRED SHARES CLASS B EPS1
TOTAL
- ------------------------
1 For a Class B EPS Request to be valid, this letter of Transmittal must be
delivered to the Corporation on or prior to the Cross-over Date.
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Starwood Lodging Corporation (the
"Corporation") the above-described Class B OP Units (as defined in the Exchange
Rights Agreement (Class B Operating Partnership Units) dated as of January 2,
1998 (the "Exchange Rights Agreement")) in accordance with the terms and
conditions of the Exchange Rights Agreement and this Letter of Transmittal
(which together constitute the "Offer"), receipt of which is hereby
acknowledged. All terms used herein but not defined herein are used as defined
in the Exchange Rights Agreement.
Subject to, and effective upon the issuance of Paired Shares and/or
shares of Class B EPS and/or the delivery of cash or other specified
consideration, as the case may be, for the Class B OP Units tendered hereby, the
undersigned hereby assigns and transfers to the Corporation all right, title and
interest in and to all the Class B OP Units that are being tendered hereby and
irrevocably constitutes and appoints the Corporation (the "Class B Unit Agent"),
with full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to (a) transfer such Class B OP
Units on the books of the Operating Partnership and (b) receive all rights,
privileges and benefits, and any and all obligations and liabilities
appertaining thereto and otherwise exercise all rights of beneficial ownership
of such Class B OP Units, all in accordance with the terms of the Offer.
The undersigned hereby represents and warrants to the Corporation that
the undersigned has full power and authority to tender, sell, assign and
transfer the tendered Class B OP Units and that upon payment therefor, the
Corporation will acquire unencumbered title thereto, free and clear of all
liens, restrictions, charges and encumbrances and the same will not be subject
to any adverse claim. The undersigned will, upon request, execute any additional
documents deemed by the Corporation to be reasonably necessary or desirable to
complete the sale, assignment and transfer of the tendered Class B OP Units.
Unless a registration statement relating to any Paired Shares and/or
Class B EPS to be delivered to the undersigned is effective under the Securities
Act of 1933, as amended (the "Securities Act"), the undersigned hereby
represents and warrants to the Corporation that the undersigned (A) is an
"accredited investor" within the meaning of Rule 501 under the Securities Act,
or (B) has sufficient knowledge and experience in financial and business matters
and in investing in entities similar to the
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<PAGE>
Operating Partnership, the Corporation and the Trust so as to be able to
evaluate the risks and merits of its investment in the Operating Partnership,
the Corporation and the Trust and it is able financially to bear the risks
thereof, and in either case (i) has had an opportunity to discuss the business,
management and financial affairs of the Operating Partnership, the Corporation
and the Trust with the management of the Operating Partnership, the Corporation
and the Trust and (ii) understands that any such Paired Shares and/or Class B
EPS have not been registered under the Securities Act by reason of their
issuance in a transaction exempt from the registration requirements of the
Securities Act pursuant to Section 4(2) thereof or Rule 505 or 506 promulgated
under the Securities Act and any such Paired Shares and/or Class B EPS must be
held indefinitely unless a subsequent disposition thereof is registered under
the Securities Act and applicable state securities laws or is exempt from such
registration. If not sold pursuant to an effective registration statement, any
such Paired Shares and/or Class B EPS will bear an appropriate legend indicating
that such Paired Shares and/or Class B EPS have not been registered under the
Securities Act and resale of such Paired Shares and/or Class B EPS is restricted
under applicable securities laws.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall not be affected by, and shall survive, the death or incapacity
of the undersigned, and any obligation of the undersigned hereunder shall be
binding upon the successors, assigns, heirs, executors, administrators and legal
representatives of the undersigned.
The undersigned understands that, except as provided in Section 2(b) of
the Exchange Rights Agreement, a tender of Class B OP Units pursuant to the
Exchange Rights Agreement is irrevocable and constitutes a binding agreement
between the undersigned and the Corporation upon the terms and subject to the
conditions of the Exchange Rights Agreement.
Unless otherwise indicated under "Special Delivery Instructions",
please mail any Paired Shares and/or shares of Class B EPS issuable upon
exchange of the Class B OP Units tendered hereby and/or any cash payment or
Exchange Promissory Note(s) deliverable pursuant to the terms of the Exchange
Rights Agreement to the address(es) of the registered holder(s) appearing under
"Description of Units." In the event that the Special Delivery Instructions are
completed, please issue such Paired Shares and/or shares of Class B EPS and any
such Exchange Promissory Note(s) and make any such cash payment in the name of
the registered holder(s) and transmit the same to the person or persons so
indicated.
The Corporation and the undersigned agree that they will cooperate with
each other and will make, execute, acknowledge, deliver, record and file, or
cause to be made,
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<PAGE>
executed, acknowledged, delivered, recorded and filed, at such times and places
as the other may reasonably deem necessary, all other and further documents and
instruments, and will take all other and further actions, as the other may
reasonably request from time to time in order to effectuate the purposes and
provisions of the tender made pursuant to this Letter of Transmittal.
-4-
<PAGE>
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4 AND 5)
To be completed ONLY if Paired Shares and/or shares of Class B EPS
and/or cash or Exchange Promissory Note(s) deliverable pursuant to the Exchange
Rights Agreement are to be sent to someone other than the undersigned or to the
undersigned at an address other than that above.
Mail certificate(s) for Paired Shares and/or shares of Class B EPS and any
Exchange Promissory Note(s) and cash payments to:
Name___________________________________________________________________________
(please print)
Address________________________________________________________________________
_______________________________________________________________________________
(include Zip Code)
_______________________________________________________________________________
_______________________________________________________________________________
(Tax Identification or Social Security Number)
SIGN HERE
Complete Substitute Form W-9 included
_______________________________________________________________________________
_______________________________________________________________________________
(Signature(s) of holder of Units)
(Must be signed by registered holder(s) as name(s) appear(s) on books and
records of the Partnership. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of Trusts or others
acting in a fiduciary or representative capacity, please set forth full title
and see instruction 4.)
Dated__________________________________________________________________________
Name(s)________________________________________________________________________
(please print)
Capacity
(Full Title)___________________________________________________________________
Address________________________________________________________________________
(include Zip Code)
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<PAGE>
Area Code and Tel. No._________________________________________________________
Tax Identification or
Social Security No.____________________________________________________________
(Complete Substitute Form W-9)
Guarantee of Signature(s)
(See Instruction 1)
Authorized
Signature______________________________________________________________________
Name of
Firm___________________________________________________________________________
Dated__________________________________________________________________________
INSTRUCTIONS
Forming Part of the Terms and Conditions of the
Exchange Rights Agreement
1. GUARANTEE OF SIGNATURE. No signature guarantee on this Letter of
Transmittal is required unless the registered holder of the Class B OP Units has
completed the box entitled "Special Delivery Instructions". In such case all
signatures on this Letter of Transmittal must be guaranteed by a member firm of
any registered national securities exchange in the United States or of the
National Association of Securities Dealers, Inc. or by a commercial bank or
trust company (not a savings bank or a savings and loan association) having an
office, branch or agency in the United States.
2. DELIVERY OF LETTER OF TRANSMITTAL. This Letter of Transmittal is to
be completed by the holder of Class B OP Units. A properly completed and duly
executed Letter of Transmittal and any other documents required by this Letter
of Transmittal must be received by the Class B Unit Agent.
No alternative, conditional or contingent tenders will be accepted,
except as permitted pursuant to the Exchange Rights Agreement.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
Units tendered and/or other information required should be listed on a separate
schedule attached hereto.
4. SIGNATURES ON LETTER OF TRANSMITTAL. The signature must correspond
with the name as shown on the books and records of the Operating Partnership
without any change whatsoever.
-6-
<PAGE>
If any of the Class B OP Units tendered hereby are owned of record by
two or more joint owners, all such owners must sign the Letter of Transmittal.
If any tendered Class B OP Units are registered in different names, it
will be necessary to complete, sign and submit as many separate Letters of
Transmittal as there are different registrations.
If this Letter of Transmittal is signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of Trusts or others
acting in a fiduciary or representative capacity, each person should so indicate
when signing, and proper evidence satisfactory to the Class B Unit Agent of
their authority so to act must be submitted.
5. SPECIAL DELIVERY INSTRUCTIONS. If a certificate for Paired Shares
and/or shares of Class B EPS and any Exchange Promissory Note(s) and cash
payment is to be sent to someone other than the signer of this Letter of
Transmittal or to an address other than that shown above, the appropriate boxes
on this Letter of Transmittal should be completed.
6. WAIVER OF CONDITIONS. The Corporation reserves the right to waive in
its sole discretion any of the specified conditions of the Offer in the case of
the Class B OP Units tendered; provided that any such waiver shall not adversely
affect any holder of outstanding Class B OP Units without the consent of such
holder.
7. BACK-UP WITHHOLDING. Under the Federal income tax law, a person
surrendering Class B OP Units must provide the Class B Unit Agent with his
correct taxpayer identification number ("TIN") on Substitute Form W-9 below
unless an exemption applies. If the correct TIN is not provided, a $50 penalty
may be imposed by the Internal Revenue Service and payments made in exchange for
the surrendered Class B OP Units may be subject to back-up withholding of that
rate provided by the Federal income tax law (such rate being at the date of the
Exchange Rights Agreement, 31%).
The TIN that must be provided is that of the registered holder of the
Class B OP Units. The TIN for an individual is his social security number.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance or additional copies of the Exchange Rights Agreement and the
Letter of Transmittal may be directed to the Class B Unit Agent at the address
set forth above.
-7-
<PAGE>
IMPORTANT TAX INFORMATION
Under Federal income tax laws, a holder whose tendered Class B OP Units
are accepted for payment is required by law to provide the Class B Unit Agent
(as payer) with his correct taxpayer identification number on Substitute Form
W-9 below. If such holder is an individual, the taxpayer identification number
is his social security number. If the Class B Unit Agent is not provided with
the correct taxpayer identification number, the holder may be subject to a $50
penalty imposed by the Internal Revenue Service. In addition, payments that are
made to such holder with respect to Class B OP Units purchased pursuant to the
Offer may be subject to back-up withholding.
If back-up withholding applies, the Class B Unit Agent is required to
withhold, at that rate provided by the Federal income tax law (such rate being
at the date of the Exchange Rights Agreement 31%), of any such payments made to
the holder of Class B OP Units. Paired Shares, shares of Class B EPS and any
Exchange Promissory Note(s) otherwise deliverable hereunder may, at the expense
(and with all risk of loss for the account) of the undersigned, be sold to pay
such amounts. Back-up withholding is not an additional tax. Rather, the tax
liability of persons subject to back-up withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent back-up withholding on payments that are made to a holder of
Class B OP Units purchased pursuant to the Offer, the holder is required to
notify the Class B Unit Agent of his correct taxpayer identification number by
completing the form below certifying that the taxpayer identification number
provided on Substitute Form W-9 is correct.
WHAT NUMBER TO GIVE THE AGENT
The holder is required to give the Class B Unit Agent the social
security number or employer identification number of the record owner of the
Class B OP Units.
-8-
<PAGE>
PAYER'S NAME:
Starwood Lodging Corporation
<TABLE>
<CAPTION>
Substitute Part 1 - Please provide your TIN in the box at Social Security
Form W-9 right and certify by signing and dating below Number/Employer
Identification Number
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Department of the Certification - Under the penalties of perjury,
Treasury/Internal (i) I certify that the information provided on this
Revenue Service form is true, correct and complete and (ii) I am
not subject to backup withholding because: (a) I
am exempt from backup Service withholding, or (b) I
have not been notified by the Internal Revenue
Service (IRS) that I am subject to backup
withholding as a result of a failure to report all
interest or dividends, or (c) the IRS has
notified me that I am no longer subject to backup
withholding.
Signature ________________________________________ Date _________
- ---------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACK-UP
WITHHOLDING AT THAT RATE PROVIDED BY THE FEDERAL INCOME TAX
LAW (SUCH RATE BEING AT THE DATE OF THE EXCHANGE RIGHTS
AGREEMENT 31%) OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER.
</TABLE>
-9-
EXHIBIT 6
CERTIFICATE OF ADMISSION
OF SLT REALTY LIMITED PARTNERSHIP
THIS CERTIFICATE OF ADMISSION OF SLT REALTY LIMITED PARTNERSHIP
("Certificate of Admission") is made effective January 2, 1998, by Starwood
Lodging Trust, a Maryland real estate investment trust, as the General Partner
of SLT Realty Limited Partnership, a Delaware limited partnership
("Partnership"), which was formed pursuant to the provisions of that certain
Limited Partnership Agreement of the Partnership dated as of December 15, 1994
and amended and restated as of June 29, 1995 and again as of November 14, 1997
and subsequently amended as of January 1, 1998 (as such agreement may be
hereafter amended from time to time, "Partnership Agreement"). All capitalized
terms not defined herein shall have the same meaning set forth in the
Partnership Agreement.
R E C I T A L S
WHEREAS, as of September 8, 1997, that certain Transaction Agreement
("Transaction Agreement") was entered into among the General Partner, the
Partnership, SLC, the Operating Partnership, Westin Hotels & Resorts Worldwide,
Inc. ("Westin Worldwide"), a Delaware corporation, W&S Seattle Corp.
("Seattle"), a Delaware corporation, W&S Lauderdale Corp. ("Lauderdale"), a
Delaware corporation, W&S Denver Corp. ("Denver"), a Delaware corporation, and
the other parties thereto;
WHEREAS, pursuant to the Transaction Agreement, it is contemplated
that, among other things, the Persons whose names appear below the General
Partner's name on the signature pages of this Certificate of Admission (each a
"Contributing Party" and, collectively, the "Contributing Parties") will
contribute to the Partnership certain of the outstanding shares of capital stock
of Seattle, Lauderdale and Denver in exchange for Class A Units described below;
WHEREAS, pursuant to Section 4.1(e) of the Partnership Agreement, the
General Partner is authorized to cause the Partnership to issue additional
Partnership Interests in one or more classes or one or more series of any of
such classes, with such designations, preferences and relative, participating,
optional or other special rights, powers and duties, including rights, powers
and duties senior to the then-existing Partnership Interests and Units, as shall
be determined by the General Partner in its sole and absolute discretion; and
WHEREAS, pursuant to Section 11.1(b)(3) and (4) of the Partnership
Agreement, the General Partner is authorized to amend the Partnership Agreement
without the Consent of the Limited Partners, and in accordance with Section
11.1(b) of the Partnership Agreement, the Limited Partners have received five
Business Days' notice of this Certificate of Admission.
NOW THEREFORE, the undersigned certifies that all appropriate actions
have been taken to admit the Contributing Parties to the Partnership upon the
terms and conditions set forth below:
- 1 -
<PAGE>
SECTION 1. Each Contributing Party is hereby admitted as a Limited
Partner of the Partnership and shall receive, inter alia, its share of a maximum
total of 597,844 Class A Units1 to be issued pursuant to the Transaction
Agreement. The number of Class A Units received by each Contributing Party is
set forth next to each such Contributing Party's signature block below. The
General Partner hereby consents to each such admission. If the number of Class A
Units to be received by any Contributing Party shall be adjusted after the date
hereof in accordance with the terms of or in connection with the Transaction
Agreement, the General Partner shall amend this Certificate of Admission to
reflect such adjustment.
SECTION 2. Each Contributing Party has agreed to comply with and to be
bound by the terms and conditions of the Partnership Agreement. Each
Contributing Party has represented that, to the best of its knowledge, its
admission as a Limited Partner does not violate any of the restrictions set
forth in Section 9.3 of the Partnership Agreement.
SECTION 3. The Partnership Agreement is hereby amended such that each
and every reference to the "Limited Partners" or to a "Limited Partner" includes
each Contributing Party.
SECTION 4. Exhibit A to the Partnership Agreement is hereby amended to
reflect this Certificate of Admission.
SECTION 5. Exhibit B to the Partnership Agreement is hereby amended to
reflect this Certificate of Admission. The notice address of each Contributing
Party is set forth on Exhibit A to this Certificate of Admission.
SECTION 6. Section 1.1 of the Partnership Agreement is hereby amended
by the addition of the following defined terms:
"Class A Certificate of Admission" shall mean the
Certificate of Admission of SLT Realty Limited Partnership, dated as of
January 2, 1998, that authorizes the issuance of the Class A Units.
"Class A Limited Partners" shall mean those Persons admitted
to the Partnership pursuant to the Class A Certificate of Admission,
and any Person who, at the time of reference thereto, is a Class A
Limited Partner of the Partnership.
"Class A Liquidation Preference Distribution" shall mean,
with respect to a Class A Unit, an amount equal to the "fair market
value" of one OP Ordinary Unit, which shall be payable only in the
event of the dissolution and liquidation of the Partnership not
preceded or accompanied by a liquidation and dissolution of the
Operating Partnership. Such fair market value shall be determined in
good faith by the General Partner as of the effective date of such
liquidation and dissolution or, if no such effective date applies, as
of
- --------
1 The exact number of Class A Units to be issued to each Contributing Party will
be determined on or about December 29, 1997 in a manner consistent with the
Transaction Agreement.
- 2 -
<PAGE>
the date of the first liquidating distribution pursuant to Section 8.2.
In the event of any change in (i) the nature or amount of securities
constituting a unit of Paired Shares under the pairing agreement
between the General Partner and SLC, (ii) the correspondence of the
number of non-preferred Units in the Partnership to the number of
Paired Shares outstanding or (iii) the correspondence of the number of
OP Ordinary Units to the number of Paired Shares outstanding, the
amount of the Class A Liquidation Preference that shall accrue with
respect to each Class A Unit as a function of the fair market of each
OP Ordinary Unit shall be equitably adjusted.
"Class A RP Special Distribution" shall mean, with respect
to a Class A Unit, an amount equal to the sum, in cash, of the fair
market value of all operating and liquidating distributions by the
Operating Partnership with respect to OP Ordinary Units on or after
January 2, 1998 (whether pursuant to Section 6.2 or 8.2 of the
Operating Partnership Agreement) in an amount per Class A Unit equal to
the amount so distributed in respect of each OP Ordinary Unit. In the
event of any change in (i) the nature or amount of securities
constituting a unit of Paired Shares under the pairing agreement
between the General Partner and SLC, (ii) the correspondence of the
number of non-preferred Units in the Partnership to the number of
Paired Shares outstanding or (iii) the correspondence of the number of
OP Ordinary Units to the number of Paired Shares outstanding, the
amount of the Class A Special Distribution that shall accrue with
respect to each Class A Unit as a function of the amount of the
corresponding distribution on the OP Ordinary Units shall be equitably
adjusted. Class A RP Special Distributions may only be made with
respect to Class A Units and shall be due at the same time as such
operating or liquidating distributions are made by the Realty
Partnership.
"Class A Units" shall mean, collectively, the interests of
Class A Limited Partners in capital, allocations of Net Income, Net
Loss and distributions, including Class A RP Special Distributions and
Class A Liquidation Preference Distributions, if any. The number of
Class A Units owned by each Class A Limited Partner is set forth on
Exhibit A hereto.
"OP Ordinary Units" shall mean units of the Operating
Partnership other than units entitled to receive priority distributions
under the Operating Partnership Agreement such as the Class A Units and
Class B Units (as those terms are defined in the Operating Partnership
Agreement).
"Operating Partnership Agreement" shall mean that certain
Limited Partnership Agreement of the Operating Partnership dated as of
December 15, 1994 and amended and restated as of June 29, 1995 and
again as of November 14, 1997 and subsequently amended as of January 1,
1998 pursuant to the First Amendment to Second Amended and Restated
Limited Partnership Agreement of SLC Operating Limited Partnership
Agreement and as of January 2, 1998 pursuant to the Certificate of
Admission of SLC Operating Limited Partnership, and as may hereafter be
further amended, supplemented or restated from time to time.
- 3 -
<PAGE>
"Units" shall have the meaning set forth in Section 4.1(c)
hereof, and such term shall include Class A Units except where the
context otherwise requires.
SECTION 7. Section 6.1(a) of the Partnership Agreement is hereby
amended and restated in its entirety as follows:
(a) Allocation of Net Income and Net Loss.
(i) Net Income. Except as otherwise provided
herein, Net Income for any fiscal year or other applicable period shall
be allocated in the following order and priority:
(A) first, to the General Partner, until the
cumulative Net Income allocated pursuant to this Section 6.1(a)(i)(A)
for the current and all prior periods equals the cumulative Net Loss
allocated pursuant to Section 6.1(a)(ii)(D) for all prior periods;
(B) second, to the holders of Units,
including Class A Units, to the extent of, in proportion to and in
reverse order of their prior allocations of Net Loss pursuant to
Section 6.1(a)(ii)(C) until the cumulative Net Income allocated
pursuant to this Section 6.1(a)(i)(B) for the current and all prior
periods equals the cumulative Net Loss allocated to such holders
pursuant to Section 6.1(a)(ii)(C) for all prior periods;
(C) third, to the holders of Class A Units
until each holder of Class A Units has been allocated Net Income
pursuant to this Section 6.1(a)(i)(C) in an amount equal to its accrued
Class A Special Distributions, if any;
(D) fourth, to the holders of Class A Units
until each holder of Class A Units has been allocated Net Income
pursuant to this Section 6.1(a)(i)(D) in an amount equal to the excess
of its accrued Class A Liquidation Preference Distributions, if any,
over the portion of such holder's initial Capital Account balance
allocable to the Class A Liquidation Preference;
(E) fifth, to the extent the Partnership has
made distributions pursuant to Section 6.2(c) to the holders of Units,
including Class A Units, in accordance with and in proportion to
distributions made under Section 6.2(c); and
(F) thereafter, to the holders of Units,
including Class A Units, in accordance with and in proportion to their
respective holdings of Units.
(ii) Net Loss. Except as otherwise provided
herein, Net Loss of the Partnership for each fiscal year or other
applicable period shall be allocated in the following order and
priority;
- 4 -
<PAGE>
(A) first, to the holders of Units,
including Class A Units, to the extent of, in proportion to, and in the
reverse order of, Net Income previously allocated to the Partners
pursuant to Section 6.1(a)(i)(F), until the cumulative Net Loss
allocated pursuant to this Section 6.1(a)(ii)(A) for the current and
all prior periods equals the cumulative Net Income allocated pursuant
to Section 6.1(a)(i)(F) for all prior periods;
(B) second, to the holders of Class A Units
to the extent of and in proportion to their prior allocations of Net
Income pursuant to Section 6.1(a)(i)(C) and (D) until the cumulative
Net Loss allocated pursuant to this Section 6.1(a)(ii)(B) for the
current and all prior periods equals the cumulative Net Income
allocated to such holders pursuant to Section 6.1(a)(i)(C) and (D) for
all prior periods;
(C) third, to the holders of Units,
including Class A Units, in accordance with their respective holdings
of Units, provided that Net Losses shall not be allocated pursuant to
this Section 6.1(a)(ii)(C) to the extent such allocations would cause
any Limited Partner to have an Adjusted Capital Account Deficit as of
the end of the fiscal year to which such Net Loss relates; and
(D) the balance, if any, to the General
Partner.
SECTION 8. Section 6.2 of the Partnership Agreement is hereby amended
and restated in its entirety as follows:
6.2 Distributions. The General Partner shall cause
the Partnership to distribute all, or such portion as the General
Partner may in its reasonable discretion determine, of Net Cash Flow in
accordance with the distribution rules described below to the holders
of applicable Units who are holders on the Record Date with respect to
such distribution; provided that the General Partner shall be at all
times authorized to cause the Partnership to distribute to the holders
of Units pro rata in accordance with the holders' ownership of Units,
sufficient amounts to enable the General Partner to pay shareholder
dividends that will satisfy the REIT Requirements. For such purposes,
Net Cash Flow shall be distributed:
(a) first, to the holders of Class A Units, pro rata
in accordance with the holders' ownership of Class A Units, in an
amount equal to the excess, if any, of (i) the total of all Class A RP
Special Distributions that have accrued as of the date of payment of
such distribution, less (ii) the total of all previous distributions to
the holders of Class A Units in respect of such Class A RP Special
Distributions pursuant to Section 8.2(a)(iv), if any, and this Section
6.2(a);
(b) except as otherwise provided in Sections 6.2(c),
to the holders of Units, including Class A Units, who are holders on
the Partnership Record Date
- 5 -
<PAGE>
with respect to such distribution pro rata in accordance with the
holders' ownership of Units, including Class A Units; and
(c) when the General Partner declares a distribution
to holders of Shares and the amount otherwise determined to be
distributable to each holder of a Unit, including Class A Units, under
Section 6.2(b) results in an amount that is less than the amount
distributable to each holder of a Share (on a per Share to per Unit
basis), the General Partner shall cause the Partnership to distribute
sufficient amounts to holders of Units, including Class A Units, as of
the Partnership Record Date so that such holders of Units, including
Class A Units, will receive an amount per Unit equal to the related
distributions to holders of Shares (on a per Share to per Unit basis).
The General Partner shall accomplish this by reducing the amounts
otherwise distributable to it under Section 6.2(b) and increasing the
amount otherwise distributable to holders of Units, including Class A
Units, under Section 6.2(b) and, to the extent necessary, by
contributing additional capital to the Partnership.
SECTION 9. Section 8.2(a) of the Partnership Agreement is hereby
amended and restated in its entirety as follows:
8.2 Distributions on Dissolution.
(a) In the event of the dissolution and liquidation
of the Partnership for any reason, the assets of the Partnership shall
be liquidated for distribution in the following rank and order:
(i) payment of creditors of the Partnership,
including creditors who are Partners or former Partners;
(ii) establishment of reserves as provided by the
Liquidating Trustee to provide for contingent liabilities, if any;
(iii) to the holders of Class A Units, pro rata in
accordance with the holders' ownership of Class A Units, in an amount
equal to the excess, if any, of (x) the Class A Liquidation Preference
Distribution, over (y) the sum of all prior distributions to holders of
Class A Units pursuant to this Section 8.2(a)(iii);
(iv) to the holders of Class A Units, pro rata in
accordance with the holders' ownership of Class A Units, in an amount
equal to the excess, if any, of (x) the total of all Class A RP Special
Distributions that have accrued as of the date of payment of such
liquidating distribution, less (y) the total of all previous
distributions to the holders of Class A Units in respect of such Class
A RP Special Distributions pursuant to Section 6.2(a) and this Section
8.2(a)(iv); and
- 6 -
<PAGE>
(v) to the holders of Units, including Class A Units,
in accordance with the positive balances in their Capital Accounts
after giving effect to all contributions, distributions and allocations
for all periods.
Whenever the Liquidating Trustee reasonably determines that any
reserves established pursuant to paragraph (ii) above are in excess of
the reasonable requirements of the Partnership, the amount determined
to be excess shall be distributed to the Partners in accordance with
the provisions of this Section 8.2(a). No Partner or holder of Units
shall be liable to any other Partner or holder of Units for a deficit
balance in its Capital Account.
SECTION 10. Notwithstanding Section 6.16(d) of the Transaction
Agreement, no restrictions on the transfer of the shares of Denver, Seattle or
Lauderdale shall be enforced if and only to the extent that such restriction
would cause Denver, Seattle or Lauderdale to fail to meet the requirements of
Section 856(a)(2) of the Code.
SECTION 11. As provided for in this Certificate of Admission and as
otherwise necessary or appropriate to reflect the admission of the Contributing
Parties to the Partnership, the Partnership Agreement is hereby amended
effective as of the date first written above. Except as otherwise provided in
this Certificate of Admission, each and every provision of the Partnership
Agreement remains in full force and effect.
IN WITNESS WHEREOF, the party hereto has executed this
Certificate of Admission or caused this Certificate of Admission to be executed
on its behalf as of the date first above written.
STARWOOD LODGING TRUST, a Maryland real
estate investment trust
By: /s/ Ronald C. Brown
Name: Ronald C. Brown
Title: Vice President and Chief Financial
Officer
IN WITNESS WHEREOF, the Contributing Parties hereby agree to
and acknowledge the terms of this Certificate of Admission.
117,036 Units WHWE L.L.C.
By: Whitehall Street Real Estate
Limited Partnership V,
Member and Manager
- 7 -
<PAGE>
By: WH Advisors, L.P. V,
General Partner
By: WH Advisors, Inc. V,
General Partner
By: /s/ Jonathan Langer
Name: Jonathan Langer
Title: Attorney-in-fact
221,081 Units Woodstar Investor Partnership
By: Marswood Investors, L.P.,
General Partner
By: Starwood Capital Group, L.P.,
General Partner
By: BSS Capital Partners, L.P.,
General Partner
By: Sternlicht Holdings II, Inc.,
General Partner
By: /s/ Ronald C. Brown
Name: Ronald C. Brown
Title: Attorney-in-fact
132,192 Units Nomura Asset Capital Corporation
By: /s/ Daniel Abrams
Name: Daniel Abrams
Title: Director
- 8 -
<PAGE>
EXHIBIT A
1) If to WHWE L.L.C., to:
85 Broad Street
New York, New York 10004
Attention: Stuart M. Rothenberg
Telecopier: (212) 357-5505
2) If to Woodstar Investor Partnership, to:
Three Pickwick Plaza, Suite 250
Greenwich, CT 06830
Attention: Barry S. Sternlicht
Telecopier: (203) 861-2101
3) If to Nomura Asset Capital Corporation, to:
Two World Financial Center, Building B
New York, NY 10281
Attention: Daniel S. Abrams
Telecopier: (212) 667-1666
- 9 -
EXHIBIT 7
CERTIFICATE OF ADMISSION
OF SLC OPERATING LIMITED PARTNERSHIP
THIS CERTIFICATE OF ADMISSION OF SLC OPERATING LIMITED PARTNERSHIP
("Certificate of Admission") is made effective January 2, 1998, by Starwood
Lodging Corporation, a Maryland corporation, as the General Partner of SLC
Operating Limited Partnership, a Delaware limited partnership ("Partnership"),
which was formed pursuant to the provisions of that certain Limited Partnership
Agreement of the Partnership dated as of December 15, 1994 and amended and
restated as of June 29, 1995 and again as of November 14, 1997 and subsequently
amended as of January 1, 1998 (as such agreement may hereafter be amended from
time to time, "Partnership Agreement"). All capitalized terms not defined herein
shall have the same meaning set forth in the Partnership Agreement.
R E C I T A L S
WHEREAS, as of September 8, 1997, that certain Transaction Agreement
("Transaction Agreement") was entered into among the General Partner, the
Partnership, SLT, the Realty Partnership, Westin Hotels & Resorts Worldwide,
Inc. ("Westin Worldwide"), a Delaware corporation, W&S Atlanta Corp.
("Atlanta"), a Delaware corporation, Westin St. John Hotel Company, Inc. ("St.
John"), a U.S. Virgin Islands corporation, and the other parties thereto;
WHEREAS, pursuant to the Transaction Agreement, it is contemplated
that, among other things, the Persons whose names appear below the General
Partner's name on the signature pages of this Certificate of Admission (each a
"Contributing Party" and, collectively, the "Contributing Parties") will
contribute to the Partnership certain of the outstanding shares of capital stock
of Atlanta and St. John in exchange for Class B Units described below;
WHEREAS, pursuant to Section 4.1(e) of the Partnership Agreement, the
General Partner is authorized to cause the Partnership to issue additional
Partnership Interests in one or more classes or one or more series of any of
such classes, with such designations, preferences and relative, participating,
optional or other special rights, powers and duties, including rights, powers
and duties senior to the then-existing Partnership Interests and Units, as shall
be determined by the General Partner in its sole and absolute discretion; and
WHEREAS, pursuant to Section 11.1(b)(3) and (4) of the Partnership
Agreement, the General Partner is authorized to amend the Partnership Agreement
without the Consent of the Limited Partners, and in accordance with Section
11.1(b) of the Partnership Agreement, the Limited Partners have received five
Business Days' notice of this Certificate of Admission.
NOW THEREFORE, the undersigned certifies that all appropriate actions
have been taken to admit the Contributing Parties to the Partnership upon the
terms and conditions set forth below:
- 1 -
<PAGE>
SECTION 1. Each Contributing Party is hereby admitted as a Limited
Partner of the Partnership and shall receive, inter alia, its share of a maximum
total of 393,156 Class B Units1 to be issued pursuant to the Transaction
Agreement. The number of Class B Units received by each Contributing Party is
set forth next to each such Contributing Party's signature block below. The
General Partner hereby consents to each such admission. If the number of Class B
Units to be received by any Contributing Party shall be adjusted after the date
hereof in accordance with the terms of or in connection with the Transaction
Agreement, the General Partner shall amend this Certificate of Admission to
reflect such adjustment.
SECTION 2. Each Contributing Party has agreed to comply with and to be
bound by the terms and conditions of the Partnership Agreement. Each
Contributing Party has represented that, to the best of its knowledge, its
admission as a Limited Partner does not violate any of the restrictions set
forth in Section 9.3 of the Partnership Agreement.
SECTION 3. The Partnership Agreement is hereby amended such that each
and every reference to the "Limited Partners" or to a "Limited Partner" includes
each Contributing Party.
SECTION 4. Exhibit A to the Partnership Agreement is hereby amended to
reflect this Certificate of Admission.
SECTION 5. Exhibit B to the Partnership Agreement is hereby amended to
reflect this Certificate of Admission. The notice address of each Contributing
Party is set forth on Exhibit A to this Certificate of Admission.
SECTION 6. Section 1.1 of the Partnership Agreement is hereby amended
by the addition of the following defined terms:
"Class B Certificate of Admission" shall mean the
Certificate of Admission of SLC Operating Limited Partnership dated as
of January 2, 1998 that authorizes the issuance of Class B Units.
"Class B Limited Partners" shall mean those Persons
admitted to the Partnership pursuant to the Class B Certificate of
Admission, and any Person who, at the time of reference thereto, is a
Class B Limited Partner of the Partnership.
"Class B Liquidation Preference Distribution" shall
mean, with respect to a Class B Unit, an amount equal to the "fair
market value" of one RP Ordinary Unit, which shall be payable only in
the event of the dissolution and liquidation of the Partnership not
preceded or accompanied by a liquidation and dissolution of the Realty
Partnership. Such fair market value shall be determined in good faith
by the General Partner as of the effective date of such liquidation and
dissolution or, if no such effective date applies, as of
- --------
1 The exact number of Class B Units to be issued to each Contributing Party will
be determined on or about December 29, 1997 in a manner consistent with the
Transaction Agreement.
- 2 -
<PAGE>
the date of the first liquidating distribution pursuant to Section 8.2.
In the event of any change in (i) the nature or amount of securities
constituting a unit of Paired Shares under the pairing agreement
between the General Partner and SLT, (ii) the correspondence of the
number of non-preferred Units in the Partnership to the number of
Paired Shares outstanding or (iii) the correspondence of the number of
RP Ordinary Units to the number of Paired Shares outstanding, the
amount of the Class B Liquidation Preference that shall accrue with
respect to each Class B Unit as a function of the fair market of each
RP Ordinary Unit shall be equitably adjusted.
"Class B OP Special Distribution" shall mean, with respect
to a Class B Unit, an amount equal to the sum, in cash, of the fair
market value of all operating and liquidating distributions by the
Realty Partnership with respect to RP Ordinary Units on or after
January 2, 1998 (whether pursuant to Section 6.2 or 8.2 of the Realty
Agreement) in an amount per Class B Unit equal to the amount so
distributed in respect of each RP Ordinary Unit. In the event of any
change in (i) the nature or amount of securities constituting a unit
of Paired Shares under the pairing agreement between the General
Partner and SLT, (ii) the correspondence of the number of
non-preferred Units in the Partnership to the number of Paired Shares
outstanding or (iii) the correspondence of the number of RP Ordinary
Units to the number of Paired Shares outstanding, the amount of the
Class B OP Special Distribution that shall accrue with respect to each
Class B Unit as a function of the amount of the corresponding
distribution on the RP Ordinary Units shall be equitably adjusted.
Class B OP Special Distributions may only be made with respect to
Class B Units and shall be due at the same time as such operating or
liquidating distributions are made by the Realty Partnership.
"Class B Units" shall mean, collectively, the interests of
the Class B Limited Partners in capital, allocations of Net Income,
Net Loss and distributions, including Class B OP Special Distributions
and Class B Liquidation Preference Distributions, if any. The number
of Class B Units owned by each Class B Limited Partner is set forth on
Exhibit A hereto.
"RP Ordinary Units" shall mean units of the Realty
Partnership other than units entitled to receive priority
distributions under the Realty Agreement such as the Class A Units (as
such term is defined in the Realty Agreement).
"Units" shall have the meaning set forth in Section 4.1(c)
hereof, and such terms shall include Class A Units and Class B Units
except where the context otherwise requires.
SECTION 7. The definition of "Special Class A Distribution" in Section
1.1 of the Partnership Agreement is hereby amended and restated in its entirety
as follows:
"Special Class A Distribution" shall mean, with respect to
a Class A Unit, the fair market value, in cash, of any operating or
liquidating distribution in cash or other property made by the Realty
Partnership with respect to an RP Ordinary Unit. Special
- 3 -
<PAGE>
Class A Distributions may only be made with respect to Class A Units
and shall be due at the same time as such operating or liquidating
distributions are made by the Realty Partnership.
SECTION 8. Section 6.1(a) of the Partnership Agreement is hereby
amended and restated in its entirety as follows:
(a) Allocation of Net Income and Net Loss.
(i) Net Income. Except as otherwise provided
herein, Net Income for any fiscal year or other applicable period
shall be allocated in the following order and priority:
(A) first, to the General Partner, until the
cumulative Net Income allocated pursuant to this Section 6.1(a)(i)(A)
for the current and all prior periods equals the cumulative Net Loss
allocated pursuant to Section 6.1(a)(ii)(E) for all prior periods;
(B) second, to the holders of Units, including
Class A Units and Class B Units, to the extent of, in proportion to
and in reverse order of their prior allocations of Net Loss pursuant
to Section 6.1(a)(ii)(D) until the cumulative Net Income allocated
pursuant to this Section 6.1(a)(i)(B) for the current and all prior
periods equals the cumulative Net Loss allocated to such holders
pursuant to Section 6.1(a)(ii)(D) for all prior periods;
(C) third, to the holders of Class A Units
until each holder of Class A Units has been allocated Net Income
pursuant to this Section 6.1(a)(i)(C) in an amount equal to its Class
A Preferred Return for the current and all prior periods;
(D) fourth, to the holders of Class A Units
until each holder of Class A Units has been allocated Net Income
pursuant to this Section 6.1(a)(i)(D) in an amount equal to the Net
Income (as defined in Section 1.1 of the Realty Agreement) allocated
to an RP Ordinary Unit for all prior periods (or portions thereof)
from and after February 14, 1997 pursuant to Section 6.1(a)(i)(E) and
(F) of the Realty Agreement, multiplied by the number of Class A Units
held by such holder;
(E) fifth, to the holders of Class B Units
until each holder of Class B Units has been allocated Net Income
pursuant to this Section 6.1(a)(i)(E) in an amount equal to its
accrued Class B OP Special Distributions, if any;
(F) sixth, to the holders of Class B Units
until each holder of Class B Units has been allocated Net Income
pursuant to this Section 6.1(a)(i)(F) in an amount equal to the excess
of its accrued Class B Liquidation Preference
- 4 -
<PAGE>
Distribution, if any, over the portion of such holder's initial Capital
Account balance allocable to the Class B Liquidation Preference;
(G) seventh, to the extent the Partnership has
made distributions pursuant to Section 6.2(d) to the holders of Units,
including Class A Units and Class B Units, in accordance with and in
proportion to distributions made under Section 6.2(d); and
(H) thereafter, to the holders of Units,
including Class A Units and Class B Units, in accordance with and in
proportion to their respective holdings of Units.
(ii) Net Loss. Except as otherwise provided herein,
Net Loss of the Partnership for each fiscal year or other applicable
period shall be allocated in the following order and priority;
(A) first, to the holders of Units, including
Class A Units and Class B Units, to the extent of, in proportion to,
and in the reverse order of, Net Income previously allocated to the
Partners pursuant to Section 6.1(a)(i)(H), until the cumulative Net
Loss allocated pursuant to this Section 6.1(a)(ii)(A) for the current
and all prior periods equals the cumulative Net Income allocated
pursuant to Section 6.1(a)(i)(H) for all prior periods;
(B) second, to the holders of Class B Units to
the extent of and in proportion to their prior allocations of Net
Income pursuant to Section 6.1(a)(i)(E) and (F) until the cumulative
Net Loss allocated pursuant to this Section 6.1(a)(ii)(B) for the
current and all prior periods equals the cumulative Net Income
allocated to such holders pursuant to Section 6.1(a)(i)(E) and (F) for
all prior periods;
(C) third, to the holders of Class A Units to
the extent of and in proportion to their prior allocations of Net
Income pursuant to Section 6.1(a)(i)(C) and (D) until the cumulative
Net Loss allocated pursuant to this Section 6.1(a)(ii)(C) for the
current and all prior periods equals the cumulative Net Income
allocated to such holders pursuant to Section 6.1(a)(i)(C) and (D) for
all prior periods;
(D) fourth, to the holders of Units, including
Class A Units and Class B Units, in accordance with their respective
holdings of Units, provided that Net Losses shall not be allocated
pursuant to this Section 6.1(a)(ii)(C) to the extent such allocations
would cause any Limited Partner to have an Adjusted Capital Account
Deficit as of the end of the fiscal year to which such Net Loss
relates; and
(E) the balance, if any, to the General
Partner.
- 5 -
<PAGE>
SECTION 9. Section 6.2 of the Partnership Agreement is hereby amended
and restated in its entirety as follows:
6.2 Distributions. The General Partner shall cause the
Partnership to distribute all, or such portion as the General Partner
may in its reasonable discretion determine, of Net Cash Flow to the
holders of applicable Units, including Class A Units and Class B
Units, who are holders on the Record Date with respect to such
distribution. Distributions of Net Cash Flow shall be made in the
following priority:
(a) first, to the holders of Class A Units, pro rata in
accordance with holders' ownership of Class A Units, in an amount
equal to the excess, if any, of (i)(x) the cumulative Class A
Preferred Return from February 14, 1997 to the end of such fiscal year
or other applicable period ending on the Partnership Record Date, over
(y) the sum of all prior distributions to the holders of Class A Units
pursuant to this Section 6.2(a)(i), and then (ii)(x) the cumulative
Special Class A Distributions from February 14, 1997 to the end of
such fiscal year or other applicable period ending on the Partnership
Record Date, over (y) the sum of all prior distributions to the
holders of Class A Units pursuant to this Section 6.2(a)(ii), treating
the distributed amounts as paying the oldest amounts due first;
(b) second, to the holders of Class B Units, pro rata
in accordance with holders' ownership of Class B Units, in an amount
equal to the excess, if any, of (i) the total of all Class B OP
Special Distributions that have accrued as of the date of payment of
such distribution, less (ii) the total of all previous distributions
to the holders of Class B Units in respect of such Class B OP Special
Distributions pursuant to Section 8.2(a)(v), if any, and this Section
6.2(b);
(c) third, except as otherwise provided in Sections
6.2(d), to the holders of Units, including Class A Units and Class B
Units, who are holders on the Partnership Record Date with respect to
such distribution pro rata in accordance with the holders' ownership
of Units, including Class A Units and Class B Units; and
(d) when the General Partner declares a distribution to
holders of Shares and the amount otherwise determined to be
distributable to each holder of a Unit, including Class A Units and
Class B Units, under Section 6.2(c) results in an amount that is less
than the amount distributable to each holder of a Share (on a per
Share to per Unit basis), the General Partner shall cause the
Partnership to distribute sufficient amounts to holders of Units,
including Class A Units and Class B Units, as of the Partnership
Record Date so that such holders of Units, including Class A Units and
Class B Units, will receive an amount per Unit equal to the related
distributions to holders of Shares (on a per Share to per Unit basis).
The General Partner shall accomplish this by reducing the amounts
otherwise distributable to it under Section 6.2(c) and increasing the
amount otherwise distributable to holders of Units, including Class A
Units and Class B Units, under Section 6.2(c) and, to the extent
necessary, by contributing additional capital to the Partnership.
- 6 -
<PAGE>
SECTION 10. Section 8.2(a) of the Partnership Agreement is hereby
amended and restated in its entirety as follows:
8.2 Distributions on Dissolution.
(a) In the event of the dissolution and liquidation of the
Partnership for any reason, the assets of the Partnership shall be
liquidated for distribution in the following rank and order:
(i) payment of creditors of the Partnership, including
creditors who are Partners or former Partners;
(ii) establishment of reserves as provided by the
Liquidating Trustee to provide for contingent liabilities, if any;
(iii) to the holders of Class A Units, pro rata in
accordance with the holders' ownership of Class A Units, in an amount
equal to the excess, if any, of (x) the cumulative distributions under
Section 8.2(a) of the Realty Agreement for an equivalent number of RP
Ordinary Units in the Realty Partnership from February 14, 1997 to the
date on which a distribution under this Section 8.2(a) is made, over
(y) the sum of all prior distributions to the holders of Class A Units
pursuant to this Section 8.2(a)(iii);
(iv) to the holders of Class B Units, pro rata in
accordance with the holders' ownership of Class B Units, in an amount
equal to the excess, if any, of (x) the Class B Liquidation Preference
Distribution, over (y) the sum of all prior distributions to holders
of Class B Units pursuant to this Section 8.2(a)(iv);
(v) to the holders of Class B Units, pro rata in
accordance with the holders' ownership of Class B Units, in an amount
equal to the excess, if any, of (x) the total of all Class B OP
Special Distributions that have accrued as of the date of payment of
such liquidating distribution, less (y) the total of all previous
distributions to the holders of Class B Units in respect of such Class
B OP Special Distributions pursuant to Section 6.2(a) and this Section
8.2(a)(iv); and
(vi) to the holders of Units, including Class A Units
and Class B Units, in accordance with their respective holdings of
Units.
Whenever the Liquidating Trustee reasonably determines that any
reserves established pursuant to paragraph (ii) above are in excess of
the reasonable requirements of the Partnership, the amount determined
to be excess shall be distributed to the Partners in accordance with
the provisions of this Section 8.2(a). No Partner or holder of Units
shall be liable to any other Partner or holder of Units for a deficit
balance in its Capital Account.
- 7 -
<PAGE>
SECTION 11. As provided for in this Certificate of Admission and as
otherwise necessary or appropriate to reflect the admission of the Contributing
Parties to the Partnership, the Partnership Agreement is hereby amended
effective as of the date first written above. Except as otherwise provided in
this Certificate of Admission, each and every provision of the Partnership
Agreement remains in full force and effect.
IN WITNESS WHEREOF, the party hereto has executed this Certificate of
Admission or caused this Certificate of Admission to be executed on its behalf
as of the date first above written.
STARWOOD LODGING CORPORATION, a
Maryland corporation
By: /s/ Alan M. Schnaid
Name: Alan M. Schnaid
Title: Vice President and Corporate
Controller
Principal Accounting Officer
IN WITNESS WHEREOF, the Contributing Parties hereby agree to and
acknowledge the terms of this Certificate of Admission.
77,825 Units WHWE L.L.C.
By: Whitehall Street Real Estate
Limited Partnership V,
Member and Manager
By: WH Advisors, L.P. V,
General Partner
By: WH Advisors, Inc. V,
General Partner
By: /s/ Jonathan Langer
Name: Jonathan Langer
Title: Attorney-in-fact
- 8 -
<PAGE>
147,012 Units Woodstar Investor Partnership
By: Marswood Investors, L.P.,
General Partner
By: Starwood Capital Group, L.P.,
General Partner
By: BSS Capital Partners, L.P.,
General Partner
By: Sternlicht Holdings II, Inc.,
General Partner
By: /s/ Ronald C. Brown
Name: Ronald C. Brown
Title: Attorney-in-fact
87,904 Units Nomura Asset Capital Corporation
By: /s/ Daniel S. Abrams
Name: Daniel S. Abrams
Title: Director
- 9 -
<PAGE>
EXHIBIT A
1) If to WHWE L.L.C., to:
85 Broad Street
New York, New York 10004
Attention: Stuart M. Rothenberg
Telecopier: (212) 357-5505
2) If to Woodstar Investor Partnership, to:
Three Pickwick Plaza, Suite 250
Greenwich, CT 06830
Attention: Barry S. Sternlicht
Telecopier: (203) 861-2101
3) If to Nomura Asset Capital Corporation, to:
Two World Financial Center, Building B
New York, NY 10281
Attention: Daniel S. Abrams
Telecopier: (212) 667-1666
- 10 -
JOINT FILING AGREEMENT
Each of the Reporting Persons hereby agrees to make this joint filing
pursuant to Rule 13d-1(f) of the Exchange Act of 1934.
Dated: January 12, 1998
WHWE L.L.C.
By: Whitehall Street Real Estate
Limited Partnership V,
Member and Manager
By: WH Advisors, L.P. V,
its general partner
By: WH Advisors, Inc. V,
its general partner
By: /s/ Elizabeth A. O'Brien
------------------------------------------
Name: Elizabeth A. O'Brien
Title: Vice President
WHITEHALL STREET REAL ESTATE
LIMITED PARTNERSHIP V
By: WH Advisors, L.P. V,
its general partner
By: WH Advisors, Inc. V,
its general partner
By: /s/ Elizabeth A. O'Brien
------------------------------------------
Name: Elizabeth A. O'Brien
Title: Vice President
<PAGE>
WH ADVISORS, L.P. V,
By: WH Advisors, Inc. V,
its general partner
By: /s/ Elizabeth A. O'Brien
------------------------------------------
Name: Elizabeth A. O'Brien
Title: Vice President
GS CAPITAL PARTNERS, L.P.
By: GS Advisors, L.P.,
its general partner
By: GS Advisors, Inc.,
its general partner
By: /s/ Richard A. Friedman
------------------------------------------
Name: Richard A. Friedman
Title: President
GS ADVISORS, L.P.
By: GS Advisors, Inc.,
its general partner
By: /s/ Richard A. Friedman
------------------------------------------
Name: Richard A. Friedman
Title: President
<PAGE>
THE GOLDMAN SACHS GROUP, L.P.
By: The Goldman Sachs Corporation,
its general partner
By: /s/ Richard A. Friedman
------------------------------------------
Name: Richard A. Friedman
Title: Executive Vice President
GOLDMAN, SACHS & CO.
By: /s/ Richard A. Friedman
------------------------------------------
Name: Richard A. Friedman
Title: Managing Director
