Formation Agreement

EXHIBIT 10.23


AMENDMENT NO. 1 TO
FORMATION AGREEMENT


Amendment dated as of July __, 1995 (this "Amendment") to the Formation Agreement dated as of November 11, 1994, as supplemented by a letter agreement (the "Side Letter") of even date therewith (the "Formation Agreement") among Starwood Lodging Trust (formerly Hotel Investors Trust), a Maryland real estate investment trust (the "Trust"), Starwood Lodging Corporation (formerly Hotel Investors Corporation), a Maryland corporation (the "Corporation"), Starwood Capital Group, L.P., a Delaware limited partnership ("Starwood Capital"), and Berl Holdings, L.P., Starwood-Apollo Hotel Partners VIII, L.P., Starwood-Apollo Hotel Partners IX, L.P., Starwood-Nomura Hotel Investors, L.P., Starwood/Wichita Investors, L.P., Starwood-Huntington Partners, L.P. and Woodstar Partners I, L.P. (collectively, the "Starwood Partners").


WHEREAS, on the date hereof the Trust and the Corporation are consummating an underwritten public offering of the paired shares of the Trust and the Corporation;


WHEREAS, the managing underwriters for such offering have requested that the parties hereto amend the Formation Agreement as set forth herein;


WHEREAS, Starwood Capital is executing this Agreement on its own behalf and as attorney-in-fact for each of the Starwood Partners pursuant to Section 11.14 of the Formation Agreement; and


WHEREAS, pursuant to and in compliance with Sections 11.10 and 11.14 of the Formation Agreement, the Trust, the Corporation, the Starwood Partners and Starwood Capital desire to amend the Formation Agreement as set forth in this Amendment.


NOW, THEREFORE, in consideration of the premises and the mutual agreements set forth herein and in the Formation Agreement, the parties hereto agree as follows:


SECTION 1. AMENDMENT OF SECTION 6.3 OF THE FORMATION AGREEMENT. Section 6.3 of the Formation Agreement is hereby amended to read in its entirety as follows:


Section 6.3. FURTHER CONTRIBUTIONS. Pursuant to the provisions to be
contained in the HIC Contribution Agreement and the Operating Partnership
Agreement, upon the receipt of necessary Nevada Gaming Approvals with
respect to the conveyance of the HICN Properties or such earlier time as
such Nevada Gaming Approvals are no longer required ("HICN Approval"), HICN
shall convey to the Operating Partnership


or a subsidiary of the Operating Partnership all of the HICN Properties and
all other assets of HICN, and the Operating Partnership or such subsidiary
will assume all of the liabilities and obligations of HICN on such date.
If all or a portion of the HICN Properties are disposed of prior to the
receipt of the HICN Approval, then HIC or HICN shall contribute to the
Operating partnership the net proceeds of such disposition, promptly upon
receipt thereof. If the HICN Approval is not received on or prior to
December 31, 1996, then on such date HIC or HICN will contribute to the
Operating Partnership, with respect to any HICN Properties or other assets
not previously disposed of, cash equal to the fair value of such HICN
Properties and such other assets on December 31, 1996. Such fair value
shall be conclusively determined by an independent appraiser selected by
the Board of Directors of HIC. No additional interests in the Operating
Partnership will be issued upon the transfer of any of the HICN Properties,
such other assets, such net proceeds or such cash. HIC shall contribute to
the Operating Partnership any dividends or other distributions declared or
paid by HICN to HIC prior to the receipt of the HICN Approval, such
contributions to be made upon receipt by HIC of such dividends or other
distributions. Neither HIC nor HICN shall be entitled to any additional
Units or Partnership Interests by reason of any such contribution.


SECTION 2. AMENDMENT OF SECTION 6.5 OF THE FORMATION AGREEMENT. Section 6.5 of the Formation Agreement is hereby amended to read in its entirety as follows:


Section 6.5. REIMBURSEMENT BY HIT AND HIC. In addition to the
reimbursement for Acquisition Expenses described in SECTION 11.2(a), HIT,
HIC the Realty Partnership or the Operating Partnership, as the case may
be, will reimburse Starwood for Starwood's out-of-pocket costs and expenses
for any services provided to HIT, HIC, the Realty Partnership or the
Operating Partnership, as the case may be, respectively, by Starwood,
subject to (i) in the case of reimbursement by HIT or the Realty
Partnership, the approval by a majority of the members of the Board of
Trustees of HIT (the "Independent Trustees") who are not employed by or
affiliated with Starwood, HIT or HIC or (ii) in the case of reimbursement
by HIC or the Operating Partnership, the approval by a majority of the
Board of Directors of HIC (the "Independent Directors") who are not
employed by or affiliated with Starwood, HIT or HIC, and (b) HIT, HIC, the
Realty Partnership or the Operating Partnership, as the case may be, will
reimburse Starwood for Starwood's internal costs (including allocation of
overhead of Starwood) for services provided to HIT, HIC, the Realty
Partnership or the Operating Partnership, as the case may be, respectively;
PROVIDED that, where such internal costs are required to be currently
expensed under generally


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accepted accounting principles by HIT, HIC, the Realty Partnership or the
Op ...