UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 19, 2021
Sunstone Hotel Investors, Inc.
(Exact Name of Registrant as Specified in Its Charter)
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Maryland |
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001-32319 |
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20-1296886 |
(State or Other Jurisdiction of
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(Commission File Number) |
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(I.R.S. Employer
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200 Spectrum Center Drive, 21st Floor
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92618 |
(Address of Principal Executive Offices) |
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(Zip Code) |
(949) 330-4000
(Registrant’s telephone number including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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Emerging growth company |
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If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐
Item 3.03Material Modification to Rights of Security Holders.
On May 24, 2021, Sunstone Hotel Investors, Inc. (the “Company”) issued 4,600,000 shares of 6.125% Series H Cumulative Redeemable Preferred Stock, par value $0.01 per share (“Series H Preferred Stock”). As set forth in the Articles Supplementary to the Company’s Articles of Amendment and Restatement, as amended and supplemented (the “Articles Supplementary”), establishing the rights and preferences of the Series H Preferred Stock filed with the State Department of Assessments and Taxation of the State of Maryland on May 19, 2021, the Series H Preferred Stock ranks senior to the Company’s common stock, par value $0.01 per share (“Common Stock”), and on parity with the Company’s 6.950% Series E Cumulative Redeemable Preferred Stock, the Company’s 6.450% Series F Cumulative Redeemable Preferred Stock, the Company’s Series G Cumulative Redeemable Preferred Stock and future capital stock that the Company may later authorize or issue and that by their terms are on a parity with the Series H Preferred Stock. Holders of Series H Preferred Stock, when and as authorized by the board of directors of the Company, are entitled to cumulative cash dividends at the rate of 6.125% per annum of the $25.00 per share liquidation preference per share, equivalent to $1.53125 per annum per share. Dividends are payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year, commencing July 15, 2021. In addition to other preferential rights, the holders of Series H Preferred Stock are entitled to receive the liquidation preference, which is $25.00 per share, before the holders of Common Stock in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company’s affairs.
Generally, Series H Preferred Stock are not redeemable by the Company prior to May 24, 2026. However, upon the occurrence of a “Change of Control” (as defined below), holders of Series H Preferred Stock will have the right (unless, prior to the Change of Control Conversion Date (as defined below), the Company has provided or provides notice of its election to redeem the Series H Preferred Stock) to convert some or all of the Series H Preferred Stock (the “Change of Control Conversion Right”) into a number of shares of Common Stock per Series H Preferred Stock to be converted equal to the lesser of:
● | the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference plus the amount of any accrued and unpaid dividends to, but not including, the Change of Control Conversion Date (unless the Change of Control Conversion Date is after a record date for a Series H preferred dividend payment and prior to the corresponding Series H preferred dividend payment date, in which case no additional amount for such accrued and unpaid dividend will be included in this sum) by (ii) the Common Share Price (as defined below); and |
● | 4.085 (the “Share Cap”), subject to certain adjustments; |
subject, in each case, to provisions for the receipt of alternative consideration, as described in the Articles Supplementary.
If the Company has provided or provides a redemption notice, whether pursuant to the Company’s special optional redemption right in connection with a Change of Control or the Company’s optional redemption right, holders of Series H Preferred Stock will not have any right to convert their shares of Series H Preferred Stock in connection with the Change of Control Conversion Right, and any shares of Series H Preferred Stock subsequently selected for redemption that have been tendered for conversion will be redeemed on the related date of redemption instead of converted on the Change of Control Conversion Date.
A “Change of Control” is when, after the original issuance of the Series H Preferred Stock, the following have occurred and are continuing:
● | the acquisition by any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”) of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of shares of the Company entitling that person to exercise more than 50% of the total voting power of all shares of the Company entitled to vote generally in elections of directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition); and |
● | following the closing of any transaction referred to in the bullet above, neither the Company nor the acquiring or surviving entity has a class of common securities (or American Depositary Receipts representing such securities) listed on the New York Stock Exchange (the “NYSE”), the NYSE American LLC (the “NYSE American”) or the Nasdaq Stock Market (“Nasdaq”) or listed or quoted on an exchange or quotation system that is a successor to the NYSE, the NYSE American or Nasdaq. |
The “Change of Control Conversion Date” will be a business day that is no less than 20 days nor more than 35 days after the date on which the Company provides the required notice of the occurrence of a Change of Control to the holders of Series H Preferred Stock.
The “Common Share Price” will be: (i) if the consideration to be received in the Change of Control by holders of shares of the Company’s Common Stock is solely cash, the amount of cash consideration per share of Common Stock, and (ii) if the consideration to be received in the Change of Control by holders of shares of the Company’s Common Stock is other than solely cash, the average of the closing price per share of Common Stock on the 10 consecutive trading days immediately preceding, but not including, the effective date of the Change of Control. A complete description of the Series H Preferred Stock is contained in the Articles Supplementary incorporated by reference as Exhibit 3.1 to this Current Report on Form 8-K.
On May 24, 2021, the Company, as the sole managing member of Sunstone Hotel Partnership, LLC, its wholly owned subsidiary (the “Operating Partnership”), executed the Seventh Amended and Restated Limited Liability Company Agreement of the Operating Partnership (the “LLC Agreement”), among other things, creating a series of preferred units (the “Series H Preferred Units”) that mirrors the rights and preferences of the Series H Preferred Stock described above. At the closing of the offering, the proceeds were contributed by the Company to the Operating Partnership in exchange for 4,600,000 Series H Preferred Units.
Item 5.03.Amendments to Articles of Incorporation or Bylaws; Change In Fiscal Year.
Information about the Articles Supplementary under Item 3.03 of this Current Report on Form 8-K is incorporated by reference into this Item 5.03.
Item 8.01.Other Events.
On May 24, 2021, the Company completed an underwritten public offering of 4,600,000 shares of Series H Preferred Stock (the “Offering”), including the exercise in full of the underwriters’ option to purchase additional shares, for net proceeds of approximately $111.4 million after deducting the underwriting discount but before deducting any offering expenses. The Offering was made pursuant to the Company’s effective registration statement on Form S-3 (File No. 333-236538), a base prospectus, dated February 20, 2020, included as part of the registration statement, and a prospectus supplement, dated May 11, 2021, filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933, as amended. Attached hereto as Exhibit 5.1 is the opinion of Venable LLP relating to the legality of the shares of Series H Preferred Stock issued in connection with the closing of the offering.
Item 9.01Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No. |
Description |
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3.1 |
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3.2* |
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Seventh Amended and Restated Limited Liability Company Agreement of Sunstone Hotel Partnership, LLC. |
5.1* |
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23.1* |
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Consent of Venable LLP (included in Exhibit 5.1). |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
* Filed herewith
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Sunstone Hotel Investors, Inc. |
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Date: May 24, 2021 |
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By: |
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/s/ Bryan A. Giglia |
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Bryan A. Giglia Principal Financial Officer and Duly Authorized Officer |
Exhibit 3.2
SEVENTH AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
SUNSTONE HOTEL PARTNERSHIP, LLC
THIS SEVENTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT, dated as of May 24, 2021 of Sunstone Hotel Partnership, LLC (the “Company”), is entered into by Sunstone Hotel Investors, Inc., as Managing Member (the “Managing Member”);
WHEREAS, the Company was formed by the filing of a certificate of formation with the Secretary of State of the State of Delaware on June 29, 2004 by an authorized person of the Company;
WHEREAS, the Limited Liability Company Agreement, dated as of October 26, 2004, was amended and restated in its entirety by that certain First Amended and Restated Limited Liability Company Agreement, dated as of March 17, 2005 (the “First Amended and Restated Agreement”);
WHEREAS, the First Amended and Restated Liability Company Agreement, dated as of March 17, 2005, was amended and restated in its entirety by that certain Second Amended and Restated Limited Liability Company Agreement, dated as of July 8, 2005, as amended (the “Second Amended and Restated Agreement”);
WHEREAS, the Second Amended and Restated Agreement was amended and restated in its entirety by that certain Third Amended and Restated Limited Liability Company Agreement, dated as of April 6, 2011, as amended (the “Third Amended and Restated Agreement”);
WHEREAS, the Third Amended and Restated Agreement was amended and restated in its entirety by that certain Fourth Amended and Restated Limited Liability Company Agreement, dated as of March 11, 2016, as amended (the “Fourth Amended and Restated Agreement”);
WHEREAS, the Fourth Amended and Restated Agreement was amended and restated in its entirety by that certain Fifth Amended and Restated Limited Liability Company Agreement, dated as of May 17, 2016, as amended (the “Fifth Amended and Restated Agreement”);
WHEREAS, the Fifth Amended and Restated Agreement was amended and restated in its entirety by that certain Sixth Amended and Restated Limited Liability Company Agreement, dated as of April 22, 2021, as amended (the “Sixth Amended and Restated Agreement”);
WHEREAS, the Board of Directors and a duly authorized committee of the Board of Directors of the Managing Member each approved certain resolutions classifying and designating 4,600,000 shares of Preferred Stock (as defined in the charter of the Managing Member (the “Charter”)) as 6.125% Series H Cumulative Redeemable Preferred Stock (the “Series H Preferred Stock”);
WHEREAS, the Managing Member filed Articles Supplementary to the Charter (the “Series H Articles Supplementary”) with the State Department of Assessments and Taxation of
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Maryland on May 19, 2021, establishing a series of Preferred Stock, designated the Series H Preferred Stock;
WHEREAS, on May 24, 2021, the Managing Member issued 4,600,000 shares of Series H Preferred Stock;
WHEREAS, the Managing Member is the sole Managing Member of the Company and Sun SHP II, LLC is the sole Non-Managing Member of the Company, in each case, as set forth on Exhibit A hereto;
WHEREAS, the Members desire to continue the Company under the Act (as defined below) and to set forth their respective rights and duties relating to the Company on the terms as provided herein;
WHEREAS, the Managing Member, the sole Non-Managing Member and the Company believe it is desirable and in the best interest of the Company to amend and restate this Agreement as set forth herein; and
NOW, THEREFORE, for good and valuable consideration the receipt and adequacy of which is hereby acknowledged, the Managing Member and the sole Non-Managing Member, hereby amend and restate this Agreement in its entirety as follows:
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TABLE OF CONTENTS
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Section 2.1 Organization and Continuation; Application of Act |
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ARTICLE IV CAPITAL CONTRIBUTIONS; ISSUANCE OF UNITS; CAPITAL ACCOUNTS |
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Section 5.1 Requirement and Characterization of Distributions |
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Section 6.1 Allocations for Capital Account Purposes Other than the Taxable Year of Liquidation |
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Section 6.2 Allocations for Capital Account Purposes in the Taxable Year of Liquidation |
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TABLE OF CONTENTS
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Section 8.5 Rights of Non-Managing Members Relating to the Company |
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Section 11.2 Transfer of Managing Member’s Membership Interest |
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TABLE OF CONTENTS
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TABLE OF CONTENTS
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EXHIBIT A MEMBERS, CONTRIBUTIONS AND MEMBERSHIP INTERESTS |
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iv
The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.
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THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON BENEFICIAL AND CONSTRUCTIVE OWNERSHIP AND TRANSFER FOR THE PURPOSE, AMONG OTHERS, OF THE CORPORATION’S MAINTENANCE OF ITS STATUS AS A REAL ESTATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”). SUBJECT TO CERTAIN FURTHER RESTRICTIONS AND EXCEPT AS EXPRESSLY PROVIDED IN THE CORPORATION’S CHARTER, (I) NO INDIVIDUAL MAY BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF THE CORPORATION’S COMMON STOCK IN EXCESS OF 9.8 PERCENT (IN VALUE OR NUMBER OF SHARES) OF THE OUTSTANDING SHARES OF COMMON STOCK OF THE CORPORATION UNLESS SUCH INDIVIDUAL IS AN EXCEPTED HOLDER (IN WHICH CASE THE EXCEPTED HOLDER LIMIT SHALL BE APPLICABLE); (II) NO INDIVIDUAL MAY BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF CAPITAL STOCK OF THE CORPORATION IN EXCESS OF 9.8 PERCENT OF THE VALUE OF THE TOTAL OUTSTANDING SHARES OF CAPITAL STOCK OF THE CORPORATION, UNLESS SUCH INDIVIDUAL IS AN EXCEPTED HOLDER (IN WHICH CASE THE EXCEPTED HOLDER LIMIT SHALL BE APPLICABLE); (III) NO PERSON MAY BENEFICIALLY OR CONSTRUCTIVELY OWN CAPITAL STOCK THAT WOULD RESULT IN THE CORPORATION BEING “CLOSELY HELD” UNDER SECTION 856(h) OF THE CODE OR OTHERWISE CAUSE THE CORPORATION TO FAIL TO QUALIFY AS A REIT; AND (IV) NO PERSON MAY TRANSFER SHARES OF CAPITAL STOCK IF SUCH TRANSFER WOULD RESULT IN THE CAPITAL STOCK OF THE CORPORATION BEING OWNED BY FEWER THAN 100 PERSONS. ANY PERSON WHO BENEFICIALLY OR CONSTRUCTIVELY OWNS OR ATTEMPTS TO BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF CAPITAL STOCK WHICH CAUSES OR WILL CAUSE A PERSON TO BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF CAPITAL STOCK IN EXCESS OR IN VIOLATION OF THE ABOVE LIMITATIONS MUST IMMEDIATELY NOTIFY THE CORPORATION. IF ANY OF THE RESTRICTIONS ON TRANSFER OR OWNERSHIP ARE VIOLATED, THE SHARES OF CAPITAL STOCK REPRESENTED HEREBY WILL BE AUTOMATICALLY TRANSFERRED TO A TRUSTEE OF A TRUST FOR THE BENEFIT OF ONE OR MORE CHARITABLE BENEFICIARIES. IN ADDITION, THE CORPORATION MAY REDEEM SHARES UPON THE TERMS AND CONDITIONS SPECIFIED BY THE BOARD OF DIRECTORS IN ITS SOLE DISCRETION IF THE BOARD OF DIRECTORS DETERMINES THAT OWNERSHIP OR A TRANSFER OR
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OTHER EVENT MAY VIOLATE THE RESTRICTIONS DESCRIBED ABOVE. FURTHERMORE, UPON THE OCCURRENCE OF CERTAIN EVENTS, ATTEMPTED TRANSFERS IN VIOLATION OF THE RESTRICTIONS DESCRIBED ABOVE MAY BE VOID AB INITIO. ALL CAPITALIZED TERMS IN THIS LEGEND HAVE THE MEANINGS DEFINED IN THE CHARTER OF THE CORPORATION, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON TRANSFER AND OWNERSHIP, WILL BE FURNISHED TO EACH HOLDER OF CAPITAL STOCK OF THE CORPORATION ON REQUEST AND WITHOUT CHARGE. REQUESTS FOR SUCH A COPY MAY BE DIRECTED TO THE SECRETARY OF THE CORPORATION AT ITS PRINCIPAL OFFICE.
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sufficient amounts to enable the Managing Member, for so long as the Managing Member has determined to qualify as a REIT, to pay stockholder dividends that will (a) satisfy the requirements for qualifying as a REIT under the Code and Regulations (“REIT Requirements”), and (b) except to the extent otherwise determined by the Managing Member, avoid any federal income or excise tax liability of the Managing Member, except to the extent that a distribution pursuant to clause (b) would prevent the Company from making a distribution to the Holders of Series E Preferred Units in accordance with Section 17.2, the Holders of Series F Preferred Units in accordance with Section 18.2, the Holders of Series G Preferred Units in accordance with Section 19.2 and the Holders of Series H Preferred Units in accordance with Section 20.2.
FIRST, pro rata to the Members holding Series E Preferred Units, Members holding Series F Preferred Units, Members holding Series G Preferred Units and Members holding Series H Preferred Units to the extent of, and in proportion to, losses allocated to such Members under Section 6.1(b);
SECOND, pro rata to the Members holding Series E Preferred Units, Members holding Series F Preferred Units, Members holdings Series G Preferred Units, Members holding Series H Preferred Units and holders of Common Units who received such Common Units upon a conversion of Series E Preferred Units, Series F Preferred Units or Series H Preferred Units up to and in proportion to the accumulated amount of the accrued Series E Priority Return, Series F Priority Return, Series G Priority Return and Series H Priority Return (irrespective of whether such accrued amounts are actually paid) with respect to such Member;
THIRD, to the Members holding Common Units in accordance with their Membership Interests.
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FIRST, to the Members holding Common Units pro rata among such Common Units until such Members’ Capital Accounts shall equal zero;
SECOND, to the Members holding Series E Preferred Units, Series F Preferred Units, Series G Preferred Units and Series H Preferred Units pro rata among such Series E Preferred Units, Series F Preferred Units, Series G Preferred Units and Series H Preferred Units until such Members’ Capital Accounts shall equal zero; and
THIRD, to the Members holding Common Units in accordance with their Percentage Interests.
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The Managing Member shall use all reasonable efforts to cause to be filed such other certificates or documents as may be reasonable and necessary or appropriate for the formation, continuation, qualification and operation of a limited liability company (or an entity in which the Non-Managing Members have limited liability) in the State of Delaware and any other jurisdiction in which the Company may elect to do business or own property.
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executing and delivering such certificate, document or instrument was duly authorized and empowered to do so for and on behalf of the Company and (c) such certificate, document or instrument was duly executed and delivered in accordance with the terms and provisions of this Agreement and is binding upon the Company.
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or from providing services relating to the purchase, sale, rental, management or operation of real or personal property (including real estate brokerage services) and receiving compensation therefor, from any Persons who have transacted business with the Company or other third parties. Nothing in this Section 8.3 is intended to alter any fiduciary obligations of any Person under applicable Delaware law.
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The taking of any action and the incurring of any expense by the tax matters Member in connection with any such proceeding, except to the extent required by law, is a matter in the sole and absolute discretion of the tax matters Member, and the provisions relating to indemnification of the
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Managing Member set forth in Section 7.7 of this Agreement shall be fully applicable to the tax matters Member in its capacity as such.
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Sections 6225 and 6232 of the Code (as amended by the Budget Act). Any amount paid on behalf of or with respect to a Non-Managing Member shall constitute a loan by the Company to such Non-Managing Member, which loan shall be repaid by such Non-Managing Member within 15 days after notice from the Managing Member that such payment must be made unless (a) the Company withholds such payment from a distribution which would otherwise be made to the Non-Managing Member or (b) the Managing Member determines, in its sole and absolute discretion, that such payment may be satisfied out of the available funds of the Company which would, but for such payment, be distributed to the Non-Managing Member. Any amounts withheld pursuant to the foregoing clauses (a) or (b) shall be treated as having been distributed to such Non-Managing Member. Each Non-Managing Member hereby unconditionally and irrevocably grants to the Company a security interest in such Non-Managing Member’s Membership Interest to secure such Non-Managing Member’s obligation to pay to the Company any amounts required to be paid pursuant to this Section 10.5. In the event that a Non-Managing Member fails to pay any amounts owed to the Company pursuant to this Section 10.5 when due, the Managing Member may, in its sole and absolute discretion, elect to make the payment to the Company on behalf of such defaulting Non-Managing Member, and in such event shall be deemed to have loaned such amount to such defaulting Non-Managing Member and shall succeed to all rights and remedies of the Company as against such defaulting Non-Managing Member (including, without limitation, the right to receive distributions). Any amounts payable by a Non-Managing Member hereunder shall bear interest at the base rate on corporate loans at large United States money center commercial banks, as published from time to time in the Wall Street Journal, plus four percentage points (but not higher than the maximum lawful rate) from the date such amount is due (i.e., 15 days after demand) until such amount is paid in full. Each Non-Managing Member shall take such actions as the Company or the Managing Member shall request in order to perfect or enforce the security interest created hereunder.
Any transfer or purported transfer of a Membership Interest not made in accordance with this Article XI shall be null and void.
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Any Member seeking to transfer or assign Membership Units pursuant to any of the foregoing disregarded transfers shall, prior to such transfer or assignment, deliver to the Company a certificate of a duly authorized officer of such Member setting forth the facts relating to such transfer or assignment and the basis for disregarding such transfer for these purposes. The Company shall, in the sole and absolute discretion of the Managing Member, determine whether to permit such transfer or assignment; provided, that any transfer that complies with any exception in Section 11.3(d)(1) through (d)(8) shall be permitted. Any attempted transfer or assignment in contravention of the provisions of this Section 11.3(d) or that is not permitted by the Managing Member pursuant to the preceding sentence shall be null and void ab initio, the purported transferor shall continue to be the Member for all purposes and the purported transferee shall not become a Member as a result of such purported transfer, and the Company shall in no event admit such purported transferee as a Member or otherwise recognize any rights of such purported transferee (including, without limitation, any right to receive distributions (directly or indirectly) or to acquire any interest in the capital or profits of the Company). Any Member seeking to transfer or assign Membership Units may request confirmation from the Company that such transfer or assignment is permissible under Section 11.3(a) or the first sentence of this Section 11.3(d).
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The Managing Member shall not receive any additional compensation for any services performed pursuant to this Article XIII other than reimbursement of its expenses as provided for in Section 7.4.
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Company, provided that such withheld or escrowed amounts shall be distributed to the Managing Member and Non-Managing Members in the manner and priority set forth in Section 13.2(a) as soon as practicable.
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The Managing Member will provide notice to the Non-Managing Members when any action under this Section 14.1(b) is taken.
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Nothing contained herein shall be construed as authorizing the Managing Member to amend this Agreement except in accordance with Article XIV hereof or as may be otherwise expressly provided for in this Agreement.
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Units”) is hereby established. The number of Series G Preferred Units shall be 2,650,000 all of which shall be owned by the Managing Member.
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parity with all Parity Preferred Units, which shall expressly include the Series E Preferred Units, the Series F Preferred Units and the Series H Preferred Units; and (iii) junior to all Membership Units which rank senior to the Series G Preferred Units.
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[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Seventh Amended and Restated Limited Liability Company Agreement of Sunstone Hotel Partnership, LLC as of the date first written above.
Managing Member:
Sunstone Hotel Investors, Inc.
By:/s/ Bryan A. Giglia
Name:Bryan A. Giglia
Title:Executive Vice President—Chief Financial Officer
Non-Managing Member:
Sun SHP II, LLC
By:/s/ Bryan A. Giglia
Name: Bryan A. Giglia
Title: Chief Financial Officer
EXHIBIT A
MEMBERS, CONTRIBUTIONS AND
MEMBERSHIP INTERESTS
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|
|
Name and Address of Member |
|
Cash Contribution (1) |
|
Agreed Value of Contributed Property |
|
Membership Units (1) |
|
Percentage Interest |
|||
Managing Member: |
|
|
|
|
|
|
|
|
|
|
|
Sunstone Hotel Investors, Inc. |
|
|
|
|
|
|
|
|
|
|
|
200 Spectrum Drive, 21st Floor |
|
|
|
|
|
|
|
|
|
|
|
Irvine, California 92618 |
|
$ |
1,978,826,682 |
(2) |
$ |
494,759,294 |
|
212,278,669 |
|
98.90 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Non-Managing Members: |
|
|
|
|
|
|
|
|
|
|
|
Sun SHP II, LLC |
|
|
|
|
|
|
|
|
|
|
|
200 Spectrum Drive, 21st Floor |
|
|
|
|
|
|
|
|
|
|
|
Irvine, California 92618 |
|
|
18,061,841 |
|
|
N/A |
|
2,358,649 |
(3) |
1.10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
1,996,888,523 |
|
$ |
494,759,294 |
|
214,637,318 |
|
100 |
% |
(1) | The Managing Member holds 4,600,000 Series E Preferred Units and has made a cash contribution of the net proceeds from the issue and sale of the corresponding Series E Preferred Shares. The net proceeds from the issuance and sale of the Series E Preferred Shares were approximately $110,984,000. The Managing Member also holds 3,000,000 Series F Preferred Units and has made a cash contribution of the net proceeds from the issue and sale of the corresponding Series F Preferred Shares. The net proceeds from the issuance and sale of the Series F Preferred Shares were approximately $72,387,500. The Managing Member also holds 2,650,000 Series G Preferred Units and has made a cash contribution of the net proceeds from the issue and sale of the corresponding Series G Preferred Shares. The net proceeds from the issuance and sale of the Series G Preferred Shares were approximately $66,250,000. The Managing Member also holds 4,600,000 Series H Preferred Units and has made a cash contribution of the net proceeds from the issue and sale of the corresponding Series H Preferred Shares. The net proceeds from the issuance and sale of the Series H Preferred Shares were approximately $111,377,500. |
(2) | Reflects gross proceeds of Common Shares issued and sold by the Managing Member and is net of amounts used to redeem Membership Units from Non-Managing Members |
(3) | Includes Membership Units of 51,570 issued for $1,204,160 and 515,704 Membership Units contributed by the Managing Member |
EXHIBITS B AND C
Exhibits B and C have not been amended in connection with this Seventh Amended and Restated Limited Liability Company Agreement and are hereby incorporated by reference from the Third Amended and Restated Agreement.
Exhibit 5.1
[LETTERHEAD OF VENABLE LLP]
May 24, 2021
Sunstone Hotel Investors, Inc.
200 Spectrum Center Drive, 21st Floor
Irvine, California 92618
Re:Registration Statement on Form S-3
Commission File No 333-236538
Ladies and Gentlemen:
We have served as Maryland counsel to Sunstone Hotel Investors, Inc., a Maryland corporation (the “Company”), in connection with certain matters of Maryland law arising out of the registration of up to 4,600,000 shares (the “Shares”) of the Company’s 6.125% Series H Cumulative Redeemable Preferred Stock, $0.01 par value per share (the “Series H Preferred Stock”), in an underwritten public offering covered by the above-referenced Registration Statement, and all amendments thereto (collectively, the “Registration Statement”), filed by the Company with the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”). The Shares will be issued pursuant to the Underwriting Agreement, dated as of May 11, 2021 (the “Agreement”), by and among the Company, Sunstone Hotel Partnership, LLC, a Delaware limited liability company, and Wells Fargo Securities, LLC, J.P. Morgan Securities LLC and BofA Securities, Inc., as representatives of the underwriters named on Schedule A thereto. This firm did not participate in the negotiation or drafting of the Agreement.
In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (hereinafter collectively referred to as the “Documents”):
Sunstone Hotel Investors, Inc.
May 24, 2021
Page 2
In expressing the opinion set forth below, we have assumed the following:
Sunstone Hotel Investors, Inc.
May 24, 2021
Page 3
Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that:
The foregoing opinion is limited to the laws of the State of Maryland and we do not express any opinion herein concerning any other law. We express no opinion as to the applicability or effect of federal or state securities laws, including the securities laws of the State of Maryland, or as to federal or state laws regarding fraudulent transfers. To the extent that any matter as to which our opinion is expressed herein would be governed by the laws of any jurisdiction other than the State of Maryland, we do not express any opinion on such matter. The opinion expressed herein is subject to the effect of any judicial decision which may permit the introduction of parol evidence to modify the terms or the interpretation of agreements.
The opinion expressed herein is limited to the matters specifically set forth herein and no other opinion shall be inferred beyond the matters expressly stated. We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof.
This opinion is being furnished to you for submission to the Commission as an exhibit to the Company’s Current Report on Form 8-K (the “Current Report”), which is incorporated by reference in the Registration Statement. We hereby consent to the filing of this opinion as an exhibit to the Current Report and the said incorporation by reference and to the use of the name of our firm therein. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act.
Very truly yours,
/s/ Venable LLP