-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RU97+mvVWOGP5mHPaoaSjJ9RaCqbk27A4vy+poTVXxSrpFOnPEg6VBnGWZcK2iX7 /OWeddXQza3Qvu5Oz/JrMw== 0000891836-98-000020.txt : 19980113 0000891836-98-000020.hdr.sgml : 19980113 ACCESSION NUMBER: 0000891836-98-000020 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19980112 SROS: NYSE GROUP MEMBERS: GOLDMAN SACHS GROUP LP GROUP MEMBERS: GOLDMAN, SACHS & CO. GROUP MEMBERS: GS ADVISORS, L.P. GROUP MEMBERS: GS CAPITAL PARTNERS, L.P. GROUP MEMBERS: THE GOLDMAN SACHS GROUP, L.P. GROUP MEMBERS: WH ADVISORS, L.P. V GROUP MEMBERS: WHITEHALL STREET REAL ESTATE LIMITED PARTNERSHIP V GROUP MEMBERS: WHWE L.L.C. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: STARWOOD LODGING CORP CENTRAL INDEX KEY: 0000316206 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 521193298 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-32050 FILM NUMBER: 98505089 BUSINESS ADDRESS: STREET 1: 2231 E CAMELBACK RD, 4TH FL STREET 2: SUITE 400 CITY: PHOENIX STATE: AZ ZIP: 85016 BUSINESS PHONE: 6028523900 MAIL ADDRESS: STREET 1: 2231 E CAMELBACK RD. 4TH FL STREET 2: SUITE 4O0 CITY: PHOENOX STATE: AZ ZIP: 85016 FORMER COMPANY: FORMER CONFORMED NAME: HOTEL INVESTORS CORP DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GOLDMAN SACHS GROUP LP CENTRAL INDEX KEY: 0000904571 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133501777 STATE OF INCORPORATION: NY FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 85 BROAD ST CITY: NEW YORK STATE: NY ZIP: 10004 BUSINESS PHONE: 2129021000 MAIL ADDRESS: STREET 1: 85 BROAD STREET CITY: NEW YORK STATE: NY ZIP: 10004 SC 13D 1 SCHEDULE 13D :--------------------------: : OMB APPROVAL : :--------------------------: :OMB Number: 3235-0145: :Expires: December 31, 1997: SECURITIES AND EXCHANGE COMMISSION :Estimated average burden : WASHINGTON, D.C. 20549 :hours per form ..... 14.90: :--------------------------: 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) 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 - ------------------------------------------------------------------------------- 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 - ------------------------------------------------------------------------------- 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 - ------------------------------------------------------------------------------- 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 - ------------------------------------------------------------------------------- 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 - ------------------------------------------------------------------------------- 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 - ------------------------------------------------------------------------------- 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 - ------------------------------------------------------------------------------- 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, 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. 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 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 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. 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 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 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, 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 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 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. 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, 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 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 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 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 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. 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. 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 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 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 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 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 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. Name Position Present Principal Occupation - ---- -------- ---------------------------- 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.
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. Name Position Present Principal Occupation - ---- -------- ---------------------------- 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.
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. CUSIP No. 855905 20 4 PAGE 35 OF 35 PAGES SCHEDULE IV Starwood Lodging Hotels and Resorts Trust
Cusip No. Purchases Sales Price Trade Date Settlement Date - ------------ ------------ ------- --------- ----------- --------------- 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 - ------------ ------------ ------- --------- ----------- ---------------
EX-3.(I) 2 ARTICLES OF MERGER 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 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 "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 "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. 4 "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 "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 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 (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 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 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 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. 11 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 12 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. 13 (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. 14 (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 15 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. 16 (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 17 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 18 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. ********************************** 19 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". 20 "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. 21 "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. 22 "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. 23 "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 24 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. 25 "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. 26 "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. 27 "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. 28 "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 29 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. 30 (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 31 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 32 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 33 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 34 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 35 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 36 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. 37 (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 38 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, 39 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 40 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 41 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 42 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 EX-4.1 3 REGISTRATION RIGHTS AGREEMENT 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: 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. -2- 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. -3- 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. -4- 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. -5- 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 -6- 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 -7- 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. -8- 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 -9- 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. -10- 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 -11- 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, -12- 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: -13- 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"): -14- (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 -15- 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 -16- 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. -17- 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. -18- 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. -19- 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. -20- 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 -21- 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 -22- 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 -23- 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 -24- 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 -25- EX-4.2A 4 EXCHANGE RIGHTS AGREEMENT 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. -1- "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. -2- "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. -3- "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 -4- 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 -5- 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 -6- 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 -7- 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 -8- 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 -9- 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 -10- 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 -11- 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- 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- 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 -14- 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): -15- (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- 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 -17- 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. -18- 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 -19- 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 -20- 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 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
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 TOTAL - ----------------------- 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.
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 -2- 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 -3- 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- 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) -5- 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- 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- 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- PAYER'S NAME: Starwood Lodging Trust
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 - --------------------------------------------------------------------------------------------------------- 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.
EX-4.2B 5 EXCHANGE RIGHTS AGREEMENT 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. "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. -2- "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- 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- "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- "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- 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- 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- 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 -9- 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 -10- 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- 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- (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 -13- 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- 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- 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 -16- 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 -17- 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 -18- States or any state thereof having subject matter jurisdiction for such action. -19- 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 -20- 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 -21- 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- 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. 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 -2- 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, -3- 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- 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) -5- 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- 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- 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- PAYER'S NAME: Starwood Lodging Corporation
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 - --------------------------------------------------------------------------------------------------------- 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.
-9- EX-4.3A 6 CERT. OF ADM. OF SLT REALTY LIMITED PARTNERSHIP 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 - 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 - 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 - "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 - (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 - 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 - (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 - 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 - 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 - EX-4.3B 7 CERT. OF ADM. OF SLC OPERATING LTD. PNTRSP 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - 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 - EX-99 8 JOINT FILING AGREEMENT 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 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 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 -----END PRIVACY-ENHANCED MESSAGE-----