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                                                                   Exhibit 10.47

                             FORWARD STOCK CONTRACT


To:                   Starwood Lodging Trust
                      2231 East Camelback Road
                      Suite 410
                      Phoenix, AZ 85016
Attn:                 Mr. Ronald Brown

To:                   Starwood Lodging Corporation
                      2231 East Camelback Road
                      Suite 400
                      Phoenix, AZ  85016
Attn:                 Mr. Alan Schnaid

From:                 Union Bank of Switzerland, London Branch
                      c/o UBS Securities LLC, as agent
                      299 Park Avenue
                      New York, NY 10171
Date:                 13 October 1997

Ladies and Gentlemen,

The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Transaction entered into between us on the Trade
Date specified below (the "Transaction"). This Confirmation constitutes a
"Confirmation" as referred to in the ISDA Master Agreement specified below.

The definitions and provisions contained in the 1991 ISDA Definitions (as
published by the International Swaps and Derivatives Association, Inc.) are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and provisions and this Confirmation, this Confirmation will
govern. References herein to the "Transaction" shall be deemed to be references
to a "Swap Transaction" solely for the purposes of the 1991 ISDA Definitions.

This Confirmation supplements, forms a part of, and is subject to, the ISDA
Master Agreement dated as of 13 October 1997, as amended and supplemented from
time to time (the "Agreement"), between you and us. All provisions contained in
the Agreement govern this Confirmation except as expressly modified below. In
the event of any inconsistency between the provisions of that agreement and this
Confirmation, this Confirmation will prevail for the purposes of this
Transaction.

The Agreement and each Confirmation thereunder will be governed by and construed
in accordance with the laws of the State of New York without reference to choice
of law doctrine.

I.      THE TRANSACTION

Starwood Lodging Trust, a Maryland real estate investment trust (the "Trust"),
Starwood Lodging Corporation, a Maryland corporation ("SLC") (the Trust and SLC
being sometimes collectively referred to as the Company) and Union Bank of
Switzerland, London Branch ("UBS") acting through UBS Securities LLC as its
agent for each purchase or sale of Securities ("UBS LLC"), hereby agree to

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                             FORWARD STOCK CONTRACT

make the payments and deliveries provided for in Sections III, IV and V hereof,
all on the terms more particularly specified herein (this "Confirmation").

II.     DEFINITIONS

For the purposes of this Confirmation, the following terms shall have the
meanings set opposite:

Adjustments:                 In the event of:

                             (a) a subdivision, consolidation or
                             reclassification of the Paired Shares, or a free
                             distribution or dividend of any Paired Shares to
                             all existing holders of Paired Shares by way of
                             bonus, capitalization or similar issue;

                             (b) a distribution or dividend to all existing
                             holders of Paired Shares of (i) additional Paired
                             Shares or (ii) other share capital or securities
                             granting right to payment of dividends and/or the
                             proceeds of liquidation of the Company equally or
                             proportionally with such payments to holders of
                             Paired Shares or (iii) any other type of
                             securities, warrants or other assets, in any case
                             for payment (cash or otherwise) at less than the
                             prevailing market price; or

                             (c) any other event that has a diluting or
                             concentrative effect on the value of the Underlying
                             Shares (other than (i) the issuance by the Company
                             to its employees, officers and directors of options
                             to purchase Paired Shares, restricted Paired Shares
                             or limited partnership units of SLC Operating
                             Limited Partnership and SLT Realty Limited
                             Partnership or (ii) the issuance by the Company of
                             Paired Shares for cash or in connection with any
                             acquisition, merger, exchange offer or similar
                             transaction, in each case approved by the Boards of
                             Directors of SLC and the Trust).

                             an adjustment shall thereupon be effected to the
                             Forward Price and/or the Underlying Shares at the
                             time of such event with the intent that following
                             such adjustment, the value of this Transaction is
                             economically equivalent to the value immediately
                             prior to the occurrence of the event causing the
                             adjustment.

Calculation Agent:           UBS, whose calculations and determinations shall be
                             made in a commercially reasonable manner and shall
                             be binding absent manifest error; provided that the
                             Company my dispute any determination, adjustment or
                             calculation by the Calculation Agent, or failure by
                             the Calculation Agent to make any determination,
                             adjustment or estimate required by this
                             Confirmation, by notice to the Calculation Agent
                             promptly following the day notice from the
                             Calculation Agent to the Company of such
                             determination, adjustment or calculation is
                             effective or at any time the Company believes that
                             the Calculation Agent has failed to make a
                             determination, adjustment or calculation required
                             by this Confirmation. If such dispute cannot be
                             resolved within three Business Days following the
                             day on which

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                             FORWARD STOCK CONTRACT



                             the Company's notice to the Calculation Agent is
                             effective, then (i) the relevant party shall pay
                             the amount, if any, that is not in dispute and (ii)
                             the parties shall agree upon and appoint an
                             independent third party to resolve the dispute, the
                             determination of which shall be final and binding
                             absent manifest error.

Calculation Period:          Means each period commencing on and including:

                             (i) in the case of the first Calculation Period,
                             the Effective Date and ending on but excluding the
                             first Interim Settlement Date, and

                             (ii) for each period thereafter, an Interim
                             Settlement Date and ending on but excluding the
                             earlier of the next following Interim Settlement
                             Date or Day S.

                             If there is a Partial Settlement, then (i) the
                             Calculation Period for the Settlement Shares
                             covered by such Partial Settlement Share shall end
                             on Day S for such Partial Settlement and (ii) the
                             Calculation Period for the remaining Underlying
                             Shares shall be determined without regard to such
                             Partial Settlement.

Collateral Release Shares:   Paired Shares delivered pursuant to Section V.C.

Collateral Valuation Date:   In the event that the Company chooses to post cash
                             collateral pursuant to Section V. or VI. any day
                             upon which the amount of collateral required is
                             calculated.

Compounding Period:          Means each period commencing on and including:

                             (i) in the case of the first Compounding Period,
                             the Effective Date and ending on but excluding the
                             first Reset Date, and

                             (ii) for each period thereafter, a Reset Date and
                             ending on (but excluding) the earlier of the next
                             following Reset Date or Day S.

                             If there is a Partial Settlement, then(i) the
                             Compounding Period for the Settlement Shares
                             covered by such Partial Settlement shall end on Day
                             S for such Partial Settlement and (ii) the
                             Compounding Period for the remaining Underlying
                             Shares shall be determined without regard to such
                             Partial Settlement.

Customer Account:            the account established in favor of the Company
                             pursuant to the Customer Account Agreement dated
                             the date hereof between the Company and UBS
                             Securities LLC

Daycount                     Actual/360

Day S:                       For Settlement pursuant to Section III. or VI. or
                             Interim Net Stock Settlement pursuant to Section
                             IV., the day upon which settlement activities shall
                             begin.

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                             FORWARD STOCK CONTRACT

Dividend Amount:             A) Means, on each Reset Date or Day S an amount in
                             U.S. Dollars equal to:

                             (i) the sum of all cash distributions paid on a
                             single Common Share during the relevant Compounding
                             Period; plus

                             (ii) an amount representing interest that could
                             have been earned on such distributions at the LIBOR
                             rate plus Spread for a Designated Maturity of 1
                             month for the period from the date that such
                             distributions would have been received by a holder
                             of such Paired Shares until such Reset Date, or Day
                             S, as the case may be.

                             B) Separately, and not included in Dividend Amount,
                             UBS will cause UBS LLC to pay to the Company on the
                             Business Day after the relevant dividend payment
                             date declared by the Company's Board of Directors,
                             (i) all cash dividends on Paired Shares that have
                             gone ex-dividend, but on which dividends have not
                             been paid, prior to the end of the final
                             Compounding Period for any settlement, based on a
                             number of Paired Shares equal to the number of
                             Settlement Shares for such settlement, (ii) all
                             cash dividends received by UBS at any time, on
                             Paired Shares delivered by the Company pursuant to
                             Section III. E. that have gone ex-dividend after
                             Day S but prior to the end of the Unwind Period for
                             any settlement, and (iii) all cash dividends paid
                             on Paired Shares held in the Customer
                             Account.


Effective Date:              15 October 1997

Exchange Trading Day:        Each day on which the Relevant Exchange is open for
                             trading.

Forward Price:               On each Reset Date or Day S, the Forward Price
                             shall be determined for such day by:

                             a) multiplying the Initial Price for the
                             Compounding Period by the sum of

                             1 plus (i) LIBOR; determined as of the previous
                             Reset Date for a Designated Maturity of 1 month,
                             plus (ii) Spread; and

                             b) subtracting the Dividend Amount at that date;

                             provided however that if the Company delivers
                             Interim Settlement Shares pursuant to Section IV.
                             or Collateral Release Shares pursuant to Section
                             V.C. during any Calculation Period, the Forward
                             Price for purposes of determining the Initial Price
                             for the first Compounding Period during such
                             Calculation Period, shall be adjusted to a price
                             equal to the closing price of the Paired Shares on
                             the Exchange Trading Day immediately prior to the
                             most recent Interim Settlement Date, adjusted up
                             for any positive result or down for any negative
                             result of the following formula:

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                             (ii) the Interim Settlement Amount for the most
                             recent Interim Settlement Date.

                             minus,

                             (i) (a) the number of Interim Settlement Shares or
                             Collateral Release Shares, as the case may be,
                             times (b) the average closing price of the Paired
                             Shares on the five (5) Exchange Trading Days
                             immediately following the receipt of the Interim
                             Settlement Shares by UBS pursuant to Section IV.A.
                             or the Collateral Release Shares pursuant to
                             Section V.C.

                             such result divided by,

                             (iii) the number of Underlying Shares.

Initial Price:               Means,

                             a) for the Compounding Period ending on the first
                             Reset Date, an amount in U.S. Dollars equal to
                             $57.25, and

                             b) for each subsequent Reset Date, the Forward
                             Price as calculated on or adjusted as of the prior
                             Reset Date.

Interim Settlement Dates:    15 January 1997, 15 April 1998, 15 July 1998,
                             subject to adjustment in accordance with the
                             Modified Following Business Day convention.

Interim Settlement Amount:   on any Interim Settlement Date, the product of (a)
                             the number of Underlying Shares, and (b) the amount
                             by which the Forward Price exceeds the closing
                             price of the Paired Shares on the Exchange Trading
                             Day immediately prior to such Interim Settlement
                             Date.

Interim Settlement Shares:   (i) 110% times (ii) Interim Settlement Amount
                             divided by (iii) the closing price of the Paired
                             Shares on the Exchange Trading Day immediately
                             prior to such Interim Settlement Date.

LIBOR                        means USD-LIBOR-BBA as such term is defined in the
                             Agreement.

Mandatory Unwind Date:       In the case of a Mandatory Unwind Event specified
                             in clause (i) or the definition thereof, 1 Exchange
                             Trading Day after such Mandatory Unwind Event
                             occurs. In the case of a Mandatory Unwind Event
                             specified in clause (ii) of such provision, the
                             date specified in the notice delivered to the
                             Company (which date shall be at least 5 Business
                             Days after the date such notice becomes effective).

Mandatory Unwind             Mandatory
Thresholds:                  Unwind Thresholds       Unwind Share Limit
                                  $40.00             up to 25% of Underlying
                                                     Shares

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                             FORWARD STOCK CONTRACT



                             $37.00             50%
                             $35.50             75%
                             $34.00            100%

Maturity Date:               One (1) year after the Effective Date, subject to
                             extension upon the written approval of UBS in its
                             sole discretion.

Paired Shares:               Shares of beneficial interest, $0.01 par value per
                             share, of the Trust (the "Trust Shares") and shares
                             of Common Stock, par value $0.01 per share, of SLC
                             (the "SLC Shares"), which are paired and traded as
                             a unit consisting of one (1) Trust Share and one
                             (1) SLC Share.

Partial Settlement:          Any contemplated settlement, pursuant to sections
                             III. or VI., in which the designated Settlement
                             Shares are less than Underlying Shares.

Preliminary Net Stock
Settlement Shares:           All Paired Shares delivered by the Company pursuant
                             to Section III.E.2 and III.E.3(b) (other than
                             Paired Shares delivered after the Unwind Period).

Relevant Exchange:           Means, with respect to any Exchange Trading Day,
                             the principal Stock Exchange on which the Paired
                             Shares are traded on that day.

Reset Dates:                 13 November 1997, 13 December 1997, 13 January
                             1998, 13 February 1998, 13 March 1998, 13 April
                             1998, 13 May 1998, 13 June 1998, 13 July 1998, 13
                             August 1998, 13 September 1998, 13 October 1998,
                             subject to adjustment in accordance with the
                             Modified Following Business Day convention.

Settlement Amount:           The product of the Settlement Price and the
                             Settlement Shares.

Settlement Disruption Event: Means an event beyond the control of the parties as
                             a result of which The Depository Trust Company
                             ("DTC") or any successor depository cannot effect a
                             transfer of the Settlement Shares or the Paired
                             Shares. If there is a Settlement Disruption Event
                             on a Valuation Date, then the transfer of the
                             Paired Shares that would otherwise be due to be
                             made by UBS LLC for the account of UBS or the
                             transfer of the Paired Shares that would otherwise
                             be due to be made by the Company, as applicable, on
                             that date shall take place on the first succeeding
                             Exchange Trading Day on which settlement can take
                             place through DTC, provided that if such a
                             Settlement Disruption Event persists for five
                             consecutive Business Days, then the Party obliged
                             to deliver such Settlement Shares shall use its
                             best efforts to cause such Shares to be delivered
                             promptly thereafter to the other Party in any
                             commercially reasonable manner.

Settlement Price:            If Day S is a Reset Date, the Forward Price. If Day
                             S is not a Reset Date, the Forward Price adjusted
                             for LIBOR breakage adjustments (either positive or
                             negative) for the Settlement Shares for the period

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                             FORWARD STOCK CONTRACT




                             from Day S to the next following Reset Date. Any
                             breakage adjustments shall be calculated by the
                             Calculation Agent in accordance with normal
                             industry standards.

Settlement Shares:           The number of shares up to the full number of
                             Underlying Shares subject to settlement under
                             Section III. or VI.

Spread:                      1.50% per annum.

Stock Exchange:              Means the New York Stock Exchange, the American
                             Stock Exchange or NASDAQ.

Stock Settlement
Unwind Price:                The daily average closing price of the Paired
                             Shares for Exchange Trading Days during the Unwind
                             Period.

Trade Date:                  13 October 1997

UBS LLC:                     UBS Securities LLC

Unwind Period:               In the event of Stock Settlement or Net Stock
                             Settlement, such number of Exchange Trading Days
                             (which shall not be more than 70; (subject to
                             change based on mutual agreement) beginning on Day
                             S; provided that UBS may extend such period (such
                             extension not to exceed 10 Exchange Trading Days)
                             or upon the occurrence of a Market Disruption
                             Event.

Underlying Shares:           2,185,000 Paired Shares of the Company (ticker
                             "HOT"), subject to adjustment in the event of
                             Partial Settlements.

Valuation Date:              In the case of determining any Cash Settlement
                             value, Net Stock Settlement Shares or Stock
                             Settlement Shares, Day S, the day preceding Day S
                             and all Exchange Trading Days during the Unwind
                             Period; in the case of determining any Preliminary
                             Stock Settlement Shares or Preliminary Net Stock
                             Settlement Shares, the Exchange Trading Day
                             immediately preceding Day S; in the case of
                             determining the Interim Settlement Amount and
                             related calculation, the day prior to the Interim
                             Settlement Date, and the 5 Exchange Trading Days
                             following receipt of Interim Settlement Shares by
                             UBS.

Valuation Time:              4:00 pm EST, or in the event the Relevant Exchange
                             closes early, such closing time.

III.    SETTLEMENT

A.      NOTICE AND PROCEDURES

1.      The Company may on any Exchange Trading Day up to and including the
Maturity Date, upon the giving of at least five (5) Business Days telephonic
notice to UBS (the "Settlement

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Notice"), settle all or part of this Transaction. The Settlement Notice shall
specify:

               (i) the Settlement Shares,

               (ii) the settlement method (Cash, Stock or Net Stock Settlement,
               as such methods are described below);

               (iii) the number of Exchange Trading Days in the Unwind Period,
               and

               (iv) Day S, which must be an Exchange Trading Day; provided
               however, that if Cash or Net Stock Settlement is selected and in
               UBS' reasonable judgement the settlement of the Settlement Shares
               would potentially violate or contravene any legal or regulatory
               prohibition or requirement applicable to UBS or cause UBS to
               contravene any established UBS corporate policy or compliance
               policy which relates to any legal or regulatory prohibition or
               requirement applicable to UBS (other than any corporate policy
               limiting the amount of UBS's investment in another entity) then
               UBS shall at least three (3) Business Days prior to the proposed
               Day S, notify the Company telephonically (confirmed by writing)
               of any such impediment and its estimate of the period during
               which such impediment will preclude UBS' ability to settle all or
               part of this Transaction.

               The Settlement Notice shall be effective only if the notice
               requirements specified above are fulfilled; provided, that if no
               settlement method is specified, then the settlement method shall
               be deemed to be Cash Settlement and provided further that the
               Company may upon telephonic notice to UBS at least one (1)
               Exchange Trading Day prior to the proposed Day S withdraw any
               Settlement Notice.

        In the case of any Partial Settlement, following such settlement the
        number of Underlying Shares to which this Transaction shall relate shall
        be adjusted, as of Day S, by subtracting the number of Settlement Shares
        from the number of Underlying Share (as the same may have been adjusted
        prior to such Partial Settlement) immediately prior to such Day S. The
        Settlement Shares shall not be subject to forward accretion and shall be
        treated separately from the remaining Underlying Shares during any
        Unwind Period.

2.      On Day S, the Settlement Price for the Settlement Shares and the
        Settlement Amount shall be determined for Day S.

3.      The Settlement Amount shall be settled pursuant to the settlement method
        (B, C, or D of this section III.) selected by the Company in its sole
        discretion.

4.      If settlement with respect to the Settlement Shares shall occur pursuant
        to Section III.A1 (but not as a result of a Mandatory Unwind Event) on
        or before the 180th day following the Effective Date, then the
        Settlement Price for purposes of such settlement shall be increased by
        any positive amount, calculated by UBS as follows:

            Spread x Forward Price  x  (180 - calendar days since Trade Date)
                                        -------------------------------------
                                                          360

5.      It shall be a condition precedent to any right of the Company to elect
        Stock Settlement (III. C. below) or Net Stock Settlement (III. D.
        below), that the Company must (i) notify UBS of such


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        election at least 5 Business Days prior to Day S and (ii) prior to Day
        S, cause to be filed with the Securities and Exchange Commission (the
        "Commission") and cause to become effective under the Securities Act of
        1933, as amended (the "Securities Act") a registration statement that
        results in UBS being able to resell all Paired Shares to be delivered by
        the Company to UBS LLC for the account of UBS in effecting such Stock
        Settlement or Net Stock Settlement without further registration under
        the Securities Act of 1933, as amended, such registration statement to
        include one or more preliminary prospectuses, prospectuses, and any
        amendments and supplements thereto such that any preliminary prospectus
        or prospectus, as amended or supplemented, shall not contain any untrue
        statement of a material fact or omit to state a material fact required
        to be stated therein or necessary to make the statements therein not
        misleading in light of the circumstances under which they are made. In
        addition, the Company shall not deliver any Paired Shares to UBS LLC for
        the account of UBS pursuant to Sections IV.A or IV.D. below unless at
        the time of such delivery a registration statement has become effective
        under the Securities Act that results in UBS being able to resell such
        Paired Shares without further registration under the Securities Act,
        such Registration Statement to include one or more preliminary
        prospectuses, prospectus and any amendments or supplements thereto such
        that any preliminary prospectus or prospectus, as amended or
        supplemented, shall not contain any untrue statement of a material fact
        or omit to state a material fact required to be stated therein or
        necessary to make the statements therein not misleading in light of the
        circumstances under which they are made. The Company further agrees that
        it will cause any such Registration Statement referred to in this
        paragraph 5 of Section III.A. to remain in effect until the earliest of
        the date on which (i) all Paired Shares issued pursuant hereto and not
        required to be delivered to the Company hereunder have been sold by UBS
        LLC for the account of UBS and UBS agrees to notify the Company of such
        fact, within two (2) Business Days of its occurrence, (ii) UBS LLC for
        the account of UBS is able to sell the Paired Shares subject thereto
        under Rule 144(k), or (iii) UBS has advised the Company that it no
        longer requires that such registration statement be effective; provided,
        however, that in no event shall the Company be obligated to keep such
        Registration Statement effective for more than 10 Exchange Trading Days
        after the end of the applicable Unwind Period.

B.      CASH SETTLEMENT

        If the Company elects Cash Settlement, the Company shall settle by
        delivering cash in an amount equal to the Settlement Amount in exchange
        for the Settlement Shares ("Cash Settlement") on the Exchange Trading
        Day immediately succeeding Day S. UBS shall cause UBS LLC for the
        account of UBS to deliver the Settlement Shares to the Company on the
        Exchange Trading Day immediately succeeding Day S upon receipt of such
        Cash Settlement.

C.      STOCK SETTLEMENT

        If the Company elects to settle the Settlement Amount by delivering
        Paired Shares in exchange for the Settlement Shares ("Stock
        Settlement"), the number of Paired Shares to be delivered (the "Stock
        Settlement Shares") shall be equal to (a) the Settlement Amount divided
        by (b) the Stock Settlement Unwind Price. The mechanics for settlement
        are set forth in Section III. E. below and Article VI.

D.      NET STOCK SETTLEMENT

        If the Company elects to settle the Settlement Amount on a net stock
        basis ("Net Stock

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        Settlement"), the number of net stock settlement shares (the "Net Stock
        Settlement Shares") shall equal:

                i) the number of Settlement Shares, times

                ii) the Settlement Price minus the Stock Settlement Unwind
                    Price, divided by

               iii) the Stock Settlement Unwind Price.

        If such calculation yields a negative number, this shall indicate the
        number of Paired Shares to be delivered from UBS LLC for the account of
        UBS to the Company. The mechanics for settlement are set forth in
        Section III. E. below and Article VI. (This section does not apply for
        purposes of Interim Net Stock Settlement.)

E.      STOCK AND NET STOCK SETTLEMENT MECHANICS

        1. Preliminary Stock Settlement:

           If the Company has chosen Stock Settlement, the Company shall deliver
           to UBS LLC for the account of UBS, by 11:00 a.m. on Day S, that
           number of Paired Shares (the "Preliminary Stock Settlement Shares"),
           equal to the product of (i)(a) the Settlement Amount divided by (b)
           the closing price of the Paired Shares on the Exchange Trading Day
           immediately preceding Day S, times (ii) 110%. Upon receipt of the
           Preliminary Stock Settlement Shares, UBS will cause UBS LLC to
           deposit the Settlement Shares in the Company's Customer Account.


        2. Preliminary Net Stock Settlement:

           If the Company has chosen Net Stock Settlement and if the Settlement
           Price exceeds the closing price of the Paired Shares on the Exchange
           Trading Day immediately preceding Day S, the Company shall deliver to
           UBS LLC for the account of UBS by 11:00 a.m. on Day S, that number of
           Paired Shares (the "Preliminary Net Stock Settlement Shares) equal to
           (i)(a) the number of Settlement Shares times (b) the difference
           between the Settlement Price and the closing price of the Paired
           Shares on the Exchange Trading Day immediately preceding Day S
           divided by (ii) the closing price of the Paired Shares on the
           Exchange Trading Day immediately preceding Day S times (iii) 125%. If
           the closing price of the Paired Shares on the Exchange Trading Day
           immediately preceding Day S exceeds the Settlement Price, the Company
           shall not be required to deliver any shares to UBS LLC for the
           account of UBS under this subsection III.E.2.

        3. By 11:00 a.m. on every fifth (5th) Exchange Trading Day (other than
           the final Exchange Trading Day) during the Unwind Period and on the
           Business Day following the final Exchange Trading Day of the Unwind
           Period:

           A. For Stock Settlement:

           Stock Settlement Shares shall be calculated as if such Exchange
           Trading Day were Day S, except that (a) there shall be no
           recalculation of the Settlement Amount and (b) for purposes of
           calculating the Stock Settlement Unwind Price, the Unwind

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           Period shall be deemed to have ended on the Exchange Trading Day for
           which the calculation is made.

           (i) if (a) Stock Settlement Shares (calculated as set forth above)
           are greater than (b) the sum of (x) Preliminary Stock Settlement
           Shares plus (y) any shares previously delivered pursuant to this
           subparagraph (i), then the Company shall deliver that number of
           Paired Shares equal to the difference between (a) and (b) to UBS LLC
           for the account of UBS, and

           (ii) as of the final day of the Unwind Period, if (a) the sum of (x)
           Preliminary Stock Settlement Shares plus (y) any shares previously
           delivered pursuant to this settlement under subparagraph (i), above
           is greater than Stock Settlement Shares, then UBS LLC, for the
           account of UBS, shall deliver that number of Paired Shares equal to
           the difference between (a) and (b) above to the Company's Customer
           Account,

           B. For Net Stock Settlement:

           Net Stock Settlement Shares shall be calculated as if such Exchange
           Trading Day were Day S except that (a) there shall be no
           recalculation of the Settlement Amount and (b) for purposes of
           calculating the Stock Settlement Unwind Price, the Unwind Period
           shall be deemed to have ended on the Exchange Trading Day for which
           the calculation is made.

           (i) if (a) Net Stock Settlement Shares are greater than (b) the sum
           of (x) Preliminary Net Stock Settlement Shares plus (y) any shares
           previously delivered pursuant to this settlement under this
           subparagraph (i), then the Company shall deliver Paired Shares (which
           Paired Shares may be delivered from its Margin Account) equal in
           number to the difference between (a) and (b) to UBS LLC for the
           account of UBS, or

           (ii) as of the final day of the Unwind Period, if (a) the sum of (x)
           Preliminary Net Stock Settlement Shares plus (y) any shares
           previously delivered pursuant to this settlement under subparagraph
           (i), above is greater than (b) Net Stock Settlement Shares, then UBS
           LLC, for the account of UBS, shall deliver that number of Paired
           Shares equal to the difference between (a) and (b) above to the
           Company's Customer Account.

        4. The Company shall cause all shares delivered by it to UBS LLC for
           the account of UBS to be fully and effectively registered under the
           Securities Act (as provided in Section III.A.5 above).

        5. On the Exchange Trading Day following the final Exchange Trading
           Day of the Unwind Period, UBS LLC for the account of UBS shall
           release all claims to Paired Shares held in the Company's Customer
           Account, including any Settlement Shares delivered pursuant to
           Preliminary Stock Settlement (Section III. E. 1. above), and deliver
           all such Paired Shares to the Company with the dollar value of all
           fractional shares settled in cash.

        6. In the event of Stock or Net Stock Settlement pursuant to Section
           III.C. or III.D., the Company shall pay an unwind accretion fee, in
           cash or stock, calculated in

                                       11


<PAGE>   12
                                    FORWARD STOCK CONTRACT



         accordance with the following formula:

         Settlement Amount x (days in Unwind Period) x (1 month LIBOR + Spread)
         ----------------    ----------------------
                  2                    360

     7. In the event of Stock or Net Stock Settlement pursuant to Section
        III.C. or III.D., the Company shall pay a placement fee to UBS LLC for
        the account of UBS calculated as: Settlement Amount x 0.50%

IV. INTERIM NET STOCK SETTLEMENT

        On each Interim Settlement Date, if the Forward Price exceeds the
        closing price of the Paired Shares on such Interim Settlement Date, then
        on the Business Day following the Fifth Exchange Trading Day thereafter
        the Company shall deliver a number of Paired Shares to UBS LLC for the
        account of UBS equal to the Interim Settlement Shares; provided,
        however, that if the Company is restricted by law or regulation or
        self-regulatory requirements or related policies and procedures, whether
        or not such requirements, policies or procedures are imposed by law
        directly or have been voluntarily adopted by the Company to insure
        compliance with applicable laws, or in its reasonable judgement is
        otherwise unable or unwilling to deliver registered Paired Shares, the
        Company shall deliver Cash Collateral to UBS as described in Section
        V.B. below.

V. COLLATERAL PROVISIONS

A.      If the Company fails to deliver an effective resale registration
        statement within 90 days of the Trade Date, then until an effective
        resale registration statement is provided and an Interim Net Stock
        Settlement can be effected, the Company shall deliver Cash Collateral in
        an amount equal to the Interim Settlement Amount to UBS. If Cash
        Collateral is delivered pursuant to this Section V.A., then until an
        Interim Net Settlement can be effected or the transaction is settled on
        a Cash Settlement basis or a registration statement becomes effective,
        the Interim Settlement Amount shall be recalculated and the amount of
        Cash Collateral shall be adjusted to equal such recalculated Interim
        Settlement Amount on a biweekly (every 2 weeks) basis.

B.      In the event that the Company does not deliver Paired Shares pursuant to
        Paragraph IV. for one or more of the reasons described in the provision
        at the end of such paragraph, then, unless Cash Collateral has been
        delivered pursuant to Section V.A. above, the Company shall deliver Cash
        Collateral in an amount equal to the Interim Settlement Amount to a Cash
        Collateral Account at UBS.

C.      If the Company has delivered Cash Collateral to UBS pursuant to
        paragraphs A. or B. above, at the Company's option, the Company may
        deliver freely saleable registered Paired Shares to UBS equal in
        saleable market value, based on closing market prices on the Exchange
        Trading Day prior to such delivery, to the value of the Cash Collateral
        held in the Cash Collateral Account at UBS. On the day after such
        Exchange Trading Day, UBS shall release all claims

                                       12


<PAGE>   13

        to Cash Collateral held in the Cash Collateral Account and deliver such
        amounts to the Company. On any subsequent Interim Settlement Date, if
        Cash Collateral is held by UBS, UBS shall deliver to the Company within
        5 Business Days after such Interim Settlement Date, the amount by which
        the amount of Cash Collateral exceeds the Interim Settlement Amount.

D.      SECURITY INTEREST

        The Company hereby pledges to UBS, as security for its obligations
        herein, a first priority continuing security interest in, lien on and
        right of set-off against all Cash Collateral Paid to UBS, or UBS
        Securities LLC, as its agent. Upon release to the Company by UBS of such
        Cash Collateral, the security interest and lien granted hereunder will
        be released immediately, and, to the extent possible, without any
        further action by either party.

E.      REPRESENTATIONS

        Each of the Trust and SLC represents to UBS (which representations will
        be deemed to be repeated as of each date that the Company Pays Cash
        Collateral to UBS) that:

        (i) it has the power to grant a security interest in and lien on any
        Cash Collateral it Pays to UBS and has taken all necessary actions to
        authorize the granting of that security interest and lien;

        (ii) it is the sole owner of or otherwise has the right to Pay all Cash
        Collateral to UBS hereunder, free and clear of any security interest,
        lien, encumbrance or other restrictions other than the security interest
        and lien created hereby;

        (iii) upon Payment of any Cash Collateral to UBS under the terms of this
        Confirmation, UBS will have a valid and perfected first priority
        security interest therein (assuming that any third-party financial
        intermediary or other entity not within its control involved in the
        transfer of the Cash Collateral gives the notices and takes the action
        required of it under applicable law for perfection of that interest),
        and

        (iv) the performance by it of its obligations under this Confirmation
        will not result in the creation of any security interest, lien or other
        encumbrance on any Cash Collateral other than the security interest and
        lien granted hereunder.

F.      OTHER COLLATERAL PROVISIONS

        Any Cash Collateral held by UBS during settlement of the Transaction
        pursuant to Sections III. or VI. shall be held until the end of the
        applicable Unwind Period and shall be released upon the final Settlement
        Date for that Unwind Period.

G.      DEFINITIONS RELATED TO COLLATERAL PROVISIONS

        "Cash Collateral" means the amount of cash denominated in USD, if any,
        Paid by the Company to or for the benefit of UBS, acting through UBS
        Securities LLC as its agent, pursuant to paragraphs IV. or V. of this
        Forward Stock Contract.

        "Local Business Day" means a day on which commercial banks in New York,
        New York are

                                       13
<PAGE>   14

        open for business (including dealings in foreign exchange)." "Paid",
        "Pays" or "Payment" means payment in same day funds in the same manner
        provided for payments to be made to UBS, or UBS Securities LLC as its
        agent under this Forward Stock Contract.

VI.     CERTAIN COVENANTS AND OTHER PROVISIONS

Ability to Settle in Stock:  As of the date hereof, each of the Trust and SLC
                             has not, and after the date hereof, each of the
                             Trust and SLC will not, enter into any obligation
                             that would contractually prohibit the Company from
                             Stock Settlement of any shares under this
                             Agreement.

Mandatory Unwind Event:      If at any time prior to the Maturity Date:

                             (i) the average closing price on the Relevant
                             Exchange of the Paired Shares on any two
                             consecutive Exchange Trading Days, other than a day
                             on which a Market Disruption Event has occurred, is
                             equal to or less than any of the Mandatory Unwind
                             Thresholds, then UBS shall have the right upon
                             written notice to the Company, to require the
                             parties to settle all or a portion of the
                             Transaction (up to the cumulative Unwind Share
                             Limit for the corresponding Mandatory Unwind
                             Threshold) on the Mandatory Unwind Date pursuant to
                             the settlement procedures set forth in Section III.
                             above,

                             Once a Mandatory Unwind Event has occurred, if the
                             closing price of the Paired Shares is less than a
                             lower Mandatory Unwind Threshold, UBS shall have
                             the right upon written notice to the Company, to
                             require the Parties to settle on the Mandatory
                             Unwind Date pursuant to Section III above, all or a
                             portion of the Transaction, up to a number of
                             Paired Shares equal to the number of Underlying
                             Shares multiplied by the corresponding cumulative
                             Unwind Share Limit, on the mandatory Unwind Date
                             pursuant to the settlement procedures set forth in
                             Section III. above.

                             or,

                             ii) if any of the following events occur:

                             (1) any Financial Covenant Default as more
                             particularly described in Exhibit A attached
                             hereto;

                             (2) any Event of Default that has not been cured or
                             waived by the respective lender(s) under the
                             Trust's Revolving and Term Loan Credit Facility by
                             and between the Trust as borrower and Bankers Trust
                             Company as lead agent and dated as of September
                             1997.

                             (3) any Event of Default that has not been cured or
                             waived by the respective lender(s) under any other
                             unsecured and/or recourse lending agreement
                             involving the Company involving Specified

                                       14
<PAGE>   15
                                  FORWARD STOCK CONTRACT


                             Indebtedness in aggregate amount of no less than
                             the Threshold Amount;

                             (4) Bankruptcy or Insolvency(as such terms are
                             defined in the Agreement); and/or

                             (5) any failure of the Company to post cash
                             collateral pursuant to IV.C. herein if such failure
                             is not remedied on or before the third Local
                             Business Day after notice of such failure is given
                             to such party.

                             then, UBS LLC for the account of UBS may, on giving
                             at least 5 Business Days prior written notice to
                             the Company require all or part of the Transaction
                             to be settled early on the Mandatory Unwind Date
                             pursuant to the settlement procedures set forth in
                             Section III.

                             For purposes of the settlement procedures set forth
                             in Section III, "Day S" shall be the Mandatory
                             Unwind Date and the "Settlement Shares" shall be
                             the number of Paired Shares to be settled pursuant
                             to clause (i) or (ii) above. The Company may elect
                             the method of settlement for such early settlement
                             in accordance with the settlement provisions set
                             forth herein; provided however, that if Stock
                             Settlement or Net Stock Settlement is elected, and
                             (1) no resale Registration Statement has been
                             provided and declared effective prior to Day S or
                             (2) any resale Registration Statement so provided
                             and declared effective becomes, on Day S or during
                             an Unwind Period, the subject of a stop order
                             suspending its effectiveness or is the subject of
                             any proceeding for that purpose or any such
                             proceeding is threatened by the Commission, then
                             the Company at its sole option may choose to (A)
                             cash collateralize 125% of its obligation to UBS in
                             a manner similar to that described in in Section
                             V., (B) effect Cash Settlement as to all of the
                             Settlement Shares in accordance with Section III.B.
                             hereof on the Exchange Trading Day immediately
                             succeeding the occurrence of one of the events
                             specified in (1) or (2) above or (C) effect
                             settlement with Paired Shares that are not subject
                             to a resale Registration Statement to allow UBS to
                             unwind the Transaction and liquidate any position
                             it may hold in such unregistered Settlement Shares
                             by means of negotiated private resales, to the
                             extent and in the manner permitted by applicable
                             federal and state securities laws. In recognition
                             that such negotiated private resales, if any, are
                             likely to be completed at prices reflective of a
                             discount to the prevailing open market prices for
                             any freely tradeable Paired Shares, the Company
                             agrees to deliver such number of supplemental
                             Paired Shares as UBS may reasonably request to
                             which UBS shall assign a dollar price in order to
                             approximate an aggregate amount equal to the
                             aggregate discount accepted by UBS in connection
                             with the resale of the Settlement Shares or the
                             Company shall pay an amount to UBS equal to the
                             aggregate discount accepted by UBS in connection
                             with the resale of the Settlement Shares.


                                       15
<PAGE>   16


                             FORWARD STOCK CONTRACT

                             Upon completion of all settlement activities, UBS
                             LLC for the account of UBS, will promptly return
                             all remaining shares in the Company's Customer
                             Account to the Company.

Market Disruption Event:     The occurrence or existence on any Exchange Trading
                             Day during the one-half hour period that ends at
                             the Valuation Time of any suspension of or
                             limitation imposed on trading on (i) any of the
                             Relevant Exchanges or (ii) any of the exchange or
                             boards of trade or futures contract market on which
                             options or future contracts on the Paired Shares of
                             the Company are traded if, in the reasonable
                             determination of the Calculation Agent, such
                             suspension or limitation is material. In the event
                             that a Market Disruption Event occurs or is
                             continuing on a Valuation Date, then any
                             determination of the closing price of the Paired
                             Shares shall be postponed to the first succeeding
                             Exchange Trading Day on which there is no Market
                             Disruption Event, provided that if there is a
                             Market Disruption Event on each of the five
                             Exchange Trading Days immediately following the
                             original Valuation Date that but for the Market
                             Disruption Event would have been a day on which the
                             closing price of the Paired Shares would have been
                             determined, such fifth Exchange Trading Day shall
                             be deemed to be such Valuation Date notwithstanding
                             the Market Disruption Event and the Calculation
                             Agent shall, in consultation with the Company,
                             determine the closing price for that Valuation Date
                             based upon the last closing price prior to such
                             Market Disruption Event. and if applicable, shall
                             effect the settlement of the Underlying Shares by
                             using such last closing price for the determination
                             of the Stock Settlement Unwind Price.

                             The Calculation Agent shall within one (1) Business
                             Day notify the other party of the existence or
                             occurrence of a Market Disruption Event on any day
                             that but for the occurrence or existence of a
                             Market Disruption Event would have been a Valuation
                             Date.

Regulatory Compliance:       Each party agrees that if the delivery of shares
                             upon settlement is subject to any restriction
                             imposed by a regulatory authority, it shall not be
                             an event of default, and the parties will negotiate
                             in good faith a procedure to effect settlement of
                             such shares in a manner which complies with any
                             relevant rules of such regulatory authority and
                             which is satisfactory in form and substance to
                             their respective counsel.

Securities Law Compliance:   Each party agrees that it will comply, in
                             connection with this T ransaction and all related
                             or contemporaneous sales and purchases of the
                             Company's Paired Shares, with the applicable
                             provisions of the Securities Act, the Securities
                             Exchange Act of 1934 (the "Exchange Act") and the
                             rules and regulations thereunder.

Settlement:                  All settlements shall occur through DTC or any
                             other mutually acceptable depository.

                                       16
<PAGE>   17

Settlement Stock Delivery:   Pursuant to the Stock Settlement and Net Stock
                             Settlement provisions under Section III. above, UBS
                             LLC for the account of UBS shall deliver all
                             Settlement Shares to the Company's Customer
                             Account. Such Paired Shares will serve as
                             collateral until released by UBS LLC for the ac
                             count of UBS in accordance with the settlement
                             mechanics noted under III.E. above, or delivered to
                             the Company pursuant to Section III.E.5. Paired S
                             hares held in the Company's Customer Account shall
                             not be voted.

                             The Company covenants and agrees with UBS that
                             Paired Shares delivered by the Company pursuant to
                             settlement events in accordance herewith will be
                             duly authorized, validly issued, fully paid and
                             non-as sessable. The issuance of such Paired Shares
                             will not require the con sent, approval,
                             authorization, registration, or qualification of
                             any government authority, except such as shall have
                             been obtained on or before the delivery date to UBS
                             LLC for the account of UBS in connection with any
                             registration statement filed with respect to any
                             share or otherwise.

Solvency:                    Immediately following the execution of this
                             agreement, the Company will be solvent and able to
                             pay its debts as they mature, will have capital
                             sufficient to carry on business and all businesses
                             in which it engages, and will have assets which
                             will have a present fair market valuation greater
                             than the amount of all of its liabilities.

Allocation between Trust
and SLC:                     As between the Trust and SLC, (i) any delivery to
                             or by the Company of the Trust Share portion of
                             Paired Shares pursuant to this Confirmation shall
                             be made by delivery to or by the Trust, (ii) any
                             delivery to or by the Company of the SLC share
                             portion of Paired Shares pursuant to this
                             Confirmation shall be made by delivery to or by
                             SLC, and (iii) any delivery to or by the Company of
                             cash pursuant to this Confirmation shall be
                             allocated between the Trust and SLC between and
                             among themselves 95% to or from the Trust and 5% to
                             or from SLC without effect on any obligation of the
                             Company to UBS or on any obligation of UBS to the
                             Company.

Trading Authorization:       The following individuals and /or any individual
                             authorized in writing by the Treasurer of the
                             Company are authorized by the Company to provide
                             trading instructions to UBS LLC for the account of
                             UBS with regard to this transaction.


                             Starwood Lodging Trust:
                                    Ronald Brown

                             Starwood Lodging Corporation:
                                    Alan Schnaid
                                    Nir Margalite

                                       17


<PAGE>   18
                                  FORWARD STOCK CONTRACT



VI. DELIVERY INSTRUCTIONS:

Party A:              Chase, NYC
                      UBS Securities LLC
                      ABA 021000021
                      A/C No. ###-##-####
                      Attn: GED

Party B:              Harris Bank               Harris Bank
                      Chicago, IL 60603         Chicago, IL 60603
                      ABA # 071000288           ABA #071000288
                      credit account:           credit account:
                      Starwood Lodging Trust    Starwood Lodging Corporation
                      # 416-255-8               # 416-258-2
                      ATTN: Charles McCain      ATTN: Charles McCain

                      Please confirm that the foregoing correctly sets forth the
                      terms of our agreement by executing the copy of this
                      Confirmation enclosed for that purpose and returning it to
                      Ms. Gale Herzing, 29th. Floor.



Yours faithfully,

Union Bank of Switzerland, London Branch:


By: /s/ MARK EVANS                        By: /s/ R. WEERASEKERA
  --------------------------------           -----------------------------------
  Name: MARK EVANS                           Name: R. WEERASEKERA
  Title: Vice President                      Title: Vice President
  Date:                                      Date:

Starwood Lodging Trust:

By:                                       By:
  --------------------------------           -----------------------------------
  Name:                                      Name:
  Title:                                     Title:
  Date:                                      Date:

Starwood Lodging Corporation

By:                                       By:
  --------------------------------           -----------------------------------
  Name:                                      Name:
  Title:                                     Title:
  Date:                                      Date:


                                       17

<PAGE>   19
                                  FORWARD STOCK CONTRACT



VI. DELIVERY INSTRUCTIONS:

Party A:              Chase, NYC
                      UBS Securities LLC
                      ABA 021000021
                      A/C No. ###-##-####
                      Attn: GED

Party B:              Harris Bank               Harris Bank
                      Chicago, IL 60603         Chicago, IL 60603
                      ABA # 071000288           ABA #071000288
                      credit account:           credit account:
                      Starwood Lodging Trust    Starwood Lodging Corporation
                      # 416-255-8               # 416-258-2
                      ATTN: Charles McCain      ATTN: Charles McCain

                      Please confirm that the foregoing correctly sets forth the
                      terms of our agreement by executing the copy of this
                      Confirmation enclosed for that purpose and returning it to
                      Ms. Gale Herzing, 29th. Floor.



Yours faithfully,

Union Bank of Switzerland, London Branch:


By:                                       By:
  --------------------------------           -----------------------------------
  Name:                                      Name:
  Title:                                     Title:
  Date:                                      Date:

Starwood Lodging Trust:

By: /s/ RONALD C. BROWN                   By:
  --------------------------------           -----------------------------------
  Name: RONALD C. BROWN                      Name:
  Title: SENIOR VICE PRESIDENT               Title:
         & CFO                               Date:
  Date:

Starwood Lodging Corporation

By: /s/ ALAN M. SCHNAID                   By:
  --------------------------------           -----------------------------------
  Name: ALAN M. SCHNAID                      Name:
  Title: VICE PRESIDENT AND                  Title:
         CORPORATE CONTROLLER                Date:
  Date:

<PAGE>   20

[UBS LOGO & LETTERHEAD]



To:                   Starwood Lodging Trust
                      2231 East Camelback Road
                      Suite 410
                      Phoenix, AZ 85016
Attn:                 Mr. Ronald Brown

To:                   Starwood Lodging Corporation
                      2231 East Camelback Road
                      Suite 400
                      Phoenix, AZ  85016
Attn:                 Mr. Alan Schnaid

From:                 Union Bank of Switzerland, London Branch
                      c/o UBS Securities LLC, as agent
                      299 Park Avenue
                      New York, NY 10171

Date:                 13 October 1997

Ladies and Gentlemen,

The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Transaction entered into between us on the Trade
Date specified below (the "Transaction"). This Confirmation constitutes a
"Confirmation" as referred to in the ISDA Master Agreement specified below.

The definitions and provisions contained in the 1991 ISDA Definitions (as
published by the International Swaps and Derivatives Association, Inc.) are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and provisions and this Confirmation, this Confirmation will
govern. References herein to the "Transaction" shall be deemed to be references
to a "Swap Transaction" solely for the purposes of the 1991 ISDA Definitions.

This Confirmation supplements, forms a part of, and is subject to, the ISDA
Master Agreement dated as of 13 October 1997, as amended and supplemented from
time to time (the "Agreement"), between you and us. All provisions contained in
the Agreement govern this Confirmation except as expressly modified below. In
the event of any inconsistency between the provisions of that agreement and this
Confirmation, this Confirmation will prevail for the purposes of this
Transaction.

The Agreement and each Confirmation thereunder will be governed by and construed
in accordance with the laws of the State of New York without reference to choice
of law doctrine.

I.      THE TRANSACTION

Starwood Lodging Trust, a Maryland real estate investment trust (the "Trust"),
Starwood Lodging Corporation, a Maryland corporation ("SLC") (the Trust and SLC
being sometimes collectively referred to as the Company) and Union Bank of
Switzerland, London Branch ("UBS") acting through UBS Securities LLC as its
agent for each purchase or sale of Securities ("UBS LLC"), hereby agree to

<PAGE>   21
make the payments and deliveries provided for in Sections III, IV and V hereof,
all on the terms more particularly specified herein (this "Confirmation").

II.     DEFINITIONS

For the purposes of this Confirmation, the following terms shall have the
meanings set opposite:

Adjustments:                 In the event of:

                             (a) a subdivision, consolidation or
                             reclassification of the Paired Shares, or a free
                             distribution or dividend of any Paired Shares to
                             all existing holders of Paired Shares by way of
                             bonus, capitalization or similar issue;

                             (b) a distribution or dividend to all existing
                             holders of Paired Shares of (i) additional Paired
                             Shares or (ii) other share capital or securities
                             granting right to payment of dividends and/or the
                             proceeds of liquidation of the Company equally or
                             proportionally with such payments to holders of
                             Paired Shares or (iii) any other type of
                             securities, warrants or other assets, in any case
                             for payment (cash or otherwise) at less than the
                             prevailing market price; or

                             (c) any other event that has a diluting or
                             concentrative effect on the value of the Underlying
                             Shares (other than (i) the issuance by the Company
                             to its employees, officers and directors of options
                             to purchase Paired Shares, restricted Paired Shares
                             or limited partnership units of SLC Operating
                             Limited Partnership and SLT Realty Limited
                             Partnership or (ii) the issuance by the Company of
                             Paired Shares for cash or in connection with any
                             acquisition, merger, exchange offer or similar
                             transaction, in each case approved by the Boards of
                             Directors of SLC and the Trust).

                             an adjustment shall thereupon be effected to the
                             Forward Price and/or the Underlying Shares at the
                             time of such event with the intent that following
                             such adjustment, the value of this Transaction is
                             economically equivalent to the value immediately
                             prior to the occurrence of the event causing the
                             adjustment.

Calculation Agent:           UBS, whose calculations and determinations shall be
                             made in a commercially reasonable manner and shall
                             be binding absent manifest error; provided that the
                             Company my dispute any determination, adjustment or
                             calculation by the Calculation Agent, or failure by
                             the Calculation Agent to make any determination,
                             adjustment or estimate required by this
                             Confirmation, by notice to the Calculation Agent
                             promptly following the day notice from the
                             Calculation Agent to the Company of such
                             determination, adjustment or calculation is
                             effective or at any time the Company believes that
                             the Calculation Agent has failed to make a
                             determination, adjustment or calculation required
                             by this Confirmation. If such dispute cannot be
                             resolved within three Business Days following the
                             day on which the Company's notice to the
                             Calculation Agent is effective, then (i) the
                             relevant party shall pay the amount, if any, that
                             is not in dispute and (ii) the parties shall agree
                             upon and appoint an independent third party to
                             resolve the dispute, the determination of which
                             shall be final and binding absent manifest error.


                                                                          Page 2

<PAGE>   22

Calculation Period:          Means each period commencing on and including:

                             (i) in the case of the first Calculation Period,
                             the Effective Date and ending on but excluding the
                             first Interim Settlement Date, and

                             (ii) for each period thereafter, an Interim
                             Settlement Date and ending on but excluding the
                             earlier of the next following Interim Settlement
                             Date or Day S.

                             If there is a Partial Settlement, then (i) the
                             Calculation Period for the Settlement Shares
                             covered by such Partial Settlement Share shall end
                             on Day S for such Partial Settlement and (ii) the
                             Calculation Period for the remaining Underlying
                             Shares shall be determined without regard to such
                             Partial Settlement.

Collateral Release Shares:   Paired Shares delivered pursuant to Section V.C.

Collateral Valuation Date:   In the event that the Company chooses to post cash
                             collateral pursuant to Section V. or VI. any day
                             upon which the amount of collateral required is
                             calculated.

Compounding Period:          Means each period commencing on and including:

                             (i) in the case of the first Compounding Period,
                             the Effective Date and ending on but excluding the
                             first Reset Date, and

                             (ii) for each period thereafter, a Reset Date and
                             ending on (but excluding) the earlier of the next
                             following Reset Date or Day S.

                             If there is a Partial Settlement, then(i) the
                             Compounding Period for the Settlement Shares
                             covered by such Partial Settlement shall end on Day
                             S for such Partial Settlement and (ii) the
                             Compounding Period for the remaining Underlying
                             Shares shall be determined without regard to such
                             Partial Settlement.

Customer Account:            the account established in favor of the Company
                             pursuant to the Customer Account Agreement dated
                             the date hereof between the Company and UBS
                             Securities LLC

Daycount Fraction:           Actual/360

Day S:                       For Settlement pursuant to Section III. or VI. or
                             Interim Net Stock Settlement pursuant to Section
                             IV., the day upon which settlement activities shall
                             begin.

Dividend Amount:             A) Means, on each Reset Date or Day S an amount in
                             U.S. Dollars equal to:

                             (i) the sum of all cash distributions paid on a
                             single Common Share during the relevant Compounding
                             Period; plus

                             (ii) an amount representing interest that could
                             have been earned on such distributions at the LIBOR
                             rate plus Spread for a Designated Maturity of 1
                             month for the period from the date that such
                             distributions would have been received by a holder
                             of such Paired Shares until such Reset Date, or Day
                             S, as the case may be.


                                                                          Page 3

<PAGE>   23

                             B) Separately, and not included in Dividend Amount,
                             UBS will cause UBS LLC to pay to the Company on the
                             Business Day after the relevant dividend payment
                             date declared by the Company's Board of Directors,
                             (i) all cash dividends on Paired Shares that have
                             gone ex-dividend, but on which dividends have not
                             been paid, prior to the end of the final
                             Compounding Period for any settlement, based on a
                             number of Paired Shares equal to the number of
                             Settlement Shares for such settlement, (ii) all
                             cash dividends received by UBS at any time, on
                             Paired Shares delivered by the Company pursuant to
                             Section III. E. that have gone ex-dividend after
                             Day S but prior to the end of the Unwind Period for
                             any settlement, and (iii) all cash dividends paid
                             on Paired Shares held in the Customer
                             Account.

Effective Date:              15 October 1997


Exchange Trading Day:        Each day on which the Relevant Exchange is open for
                             trading.

Forward Price:               On each Reset Date or Day S, the Forward Price
                             shall be determined for such day by:

                             a) multiplying the Initial Price for the
                             Compounding Period by the sum of

                             1 plus the product of (i) the appropriate Daycount
                             Fraction times the sum of (ii) LIBOR; determined as
                             of the previous Reset Date for a Designated
                             Maturity of 1 month, plus (ii) Spread; and

                             b) subtracting the Dividend Amount at that date;

                             provided however that if the Company delivers
                             Interim Settlement Shares pursuant to Section IV.
                             or Collateral Release Shares pursuant to Section
                             V.C. during any Calculation Period, the Forward
                             Price for purposes of determining the Initial Price
                             for the first Compounding Period during such
                             Calculation Period, shall be adjusted to a price
                             equal to the closing price of the Paired Shares on
                             the Exchange Trading Day immediately prior to the
                             most recent Interim Settlement Date, adjusted up
                             for any positive result or down for any negative
                             result of the following formula:

                             (ii) the Interim Settlement Amount for the most
                             recent Interim Settlement Date.

                             minus,

                             (i) (a) the number of Interim Settlement Shares or
                             Collateral Release Shares, as the case may be,
                             times (b) the average closing price of the Paired
                             Shares on the five (5) Exchange Trading Days
                             immediately following the receipt of the Interim
                             Settlement Shares by UBS pursuant to Section IV.A.
                             or the Collateral Release Shares pursuant to
                             Section V.C.

                             such result divided by,

                             (iii) the number of Underlying Shares.

Initial Price:               Means,

                                                                          Page 4

<PAGE>   24
                             a) for the Compounding Period ending on the first
                             Reset Date, an amount in U.S. Dollars equal to
                             $57.25, and

                             b) for each subsequent Reset Date, the
                             Forward Price as calculated on or adjusted as of
                             the prior Reset Date.

Interim Settlement Dates:    15 January 1997, 15 April 1998, 15 July 1998,
                             subject to adjustment in accordance with the
                             Modified Following Business Day convention.

Interim Settlement Amount:   on any Interim Settlement Date, the product of (a)
                             the number of Underlying Shares, and (b) the amount
                             by which the Forward Price exceeds the closing
                             price of the Paired Shares on the Exchange Trading
                             Day immediately prior to such Interim Settlement
                             Date.

Interim Settlement Shares:   (i) 110% times (ii) Interim Settlement Amount
                             divided by (iii) the closing price of the Paired
                             Shares on the Exchange Trading Day immediately
                             prior to such Interim Settlement Date.

LIBOR                        means USD-LIBOR-BBA as such term is defined in the
                             Agreement.

Mandatory Unwind Date:       In the case of a Mandatory Unwind Event specified
                             in clause (i) or the definition thereof, 1 Exchange
                             Trading Day after such Mandatory Unwind Event
                             occurs. In the case of a Mandatory Unwind Event
                             specified in clause (ii) of such provision, the
                             date specified in the notice delivered to the
                             Company (which date shall be at least 5 Business
                             Days after the date such notice becomes effective).

Mandatory Unwind
Thresholds:                  Mandatory
                             Unwind Thresholds    Unwind Share Limit
                             -----------------    ------------------
                                  $40.00          up to 25% of Underlying Shares
                                  $37.00                50%
                                  $35.50                75%
                                  $34.00               100%

Maturity Date:               One (1) year after the Effective Date, subject to
                             extension upon the written approval of UBS in its
                             sole discretion.

Paired Shares:               Shares of beneficial interest, $0.01 par value per
                             share, of the Trust (the "Trust Shares") and shares
                             of Common Stock, par value $0.01 per share, of SLC
                             (the "SLC Shares"), which are paired and traded as
                             a unit consisting of one (1) Trust Share and one
                             (1) SLC Share.

Partial Settlement:          Any contemplated settlement, pursuant to sections
                             III. or VI., in which the designated Settlement
                             Shares are less than Underlying Shares.

Preliminary Net Stock
Settlement Shares:           All Paired Shares delivered by the Company pursuant
                             to Section III.E.2 and III.E.3(b) (other than
                             Paired Shares delivered after the Unwind Period).

Relevant Exchange:           Means, with respect to any Exchange Trading Day,
                             the principal Stock Exchange on which the Paired
                             Shares are traded on that day.

Reset Dates:                 15 November 1997, 15 December 1997, 15 January
                             1998, 15

                                                                          Page 5

<PAGE>   25


                             February 1998, 15 March 1998, 15 April 1998, 15 May
                             1998, 15 June 1998, 15 July 1998, 15 August 1998,
                             15 September 1998, 15 October 1998, subject to
                             adjustment in accordance with the Modified
                             Following Business Day convention.

Settlement Amount:           The product of the Settlement Price and the
                             Settlement Shares.

Settlement Disruption Event: Means an event beyond the control of the parties as
                             a result of which The Depository Trust Company
                             ("DTC") or any successor depository cannot effect a
                             transfer of the Settlement Shares or the Paired
                             Shares. If there is a Settlement Disruption Event
                             on a Valuation Date, then the transfer of the
                             Paired Shares that would otherwise be due to be
                             made by UBS LLC for the account of UBS or the
                             transfer of the Paired Shares that would otherwise
                             be due to be made by the Company, as applicable, on
                             that date shall take place on the first succeeding
                             Exchange Trading Day on which settlement can take
                             place through DTC, provided that if such a
                             Settlement Disruption Event persists for five
                             consecutive Business Days, then the Party obliged
                             to deliver such Settlement Shares shall use its
                             best efforts to cause such Shares to be delivered
                             promptly thereafter to the other Party in any
                             commercially reasonable manner.

Settlement Price:            If Day S is a Reset Date, the Forward Price. If Day
                             S is not a Reset Date, the Forward Price adjusted
                             for LIBOR breakage adjustments (either positive or
                             negative) for the Settlement Shares for the period
                             from Day S to the next following Reset Date. Any
                             breakage adjustments shall be calculated by the
                             Calculation Agent in accordance with normal
                             industry standards.

Settlement Shares:           The number of shares up to the full number of
                             Underlying Shares subject to settlement under
                             Section III. or VI.

Spread:                      1.50% per annum.

Stock Exchange:              Means the New York Stock Exchange, the American
                             Stock Exchange or NASDAQ. Stock Settlement Unwind
                             Price: The daily average closing price of the
                             Paired Shares for Exchange Trading Days during the
                             Unwind Period.

Trade Date:                  13 October 1997

UBS LLC:                     UBS Securities LLC

Unwind Period:               In the event of Stock Settlement or Net Stock
                             Settlement, such number of Exchange Trading Days
                             (which shall not be more than 70; (subject to
                             change based on mutual agreement) beginning on Day
                             S; provided that UBS may extend such period (such
                             extension not to exceed 10 Exchange Trading Days)
                             or upon the occurrence of a Market Disruption
                             Event.

Underlying Shares:           2,185,000 Paired Shares of the Company (ticker
                             "HOT"), subject to adjustment in the event of
                             Partial Settlements.

Valuation Date:              In the case of determining any Cash Settlement
                             value, Net Stock Settlement Shares or Stock
                             Settlement Shares, Day S, the day


                                                                          Page 6

<PAGE>   26

                             preceding Day S and all Exchange Trading Days
                             during the Unwind Period; in the case of
                             determining any Preliminary Stock Settlement Shares
                             or Preliminary Net Stock Settlement Shares, the
                             Exchange Trading Day immediately preceding Day S;
                             in the case of determining the Interim Settlement
                             Amount and related calculation, the day prior to
                             the Interim Settlement Date, and the 5 Exchange
                             Trading Days following receipt of Interim
                             Settlement Shares by UBS.

Valuation Time:              4:00 pm EST, or in the event the Relevant Exchange
                             closes early, such closing time.

III.    SETTLEMENT

A.      NOTICE AND PROCEDURES

1.      The Company may on any Exchange Trading Day up to and including the
Maturity Date, upon the giving of at least five (5) Business Days telephonic
notice to UBS (the "Settlement Notice"), settle all or part of this Transaction.
The Settlement Notice shall specify:

                (i) the Settlement Shares,

                (ii) the settlement method (Cash, Stock or Net Stock Settlement,
                as such methods are described below);

                (iii) the number of Exchange Trading Days in the Unwind Period,
                and

                (iv) Day S, which must be an Exchange Trading Day; provided
                however, that if Cash or Net Stock Settlement is selected and in
                UBS' reasonable judgement the settlement of the Settlement
                Shares would potentially violate or contravene any legal or
                regulatory prohibition or requirement applicable to UBS or cause
                UBS to contravene any established UBS corporate policy or
                compliance policy which relates to any legal or regulatory
                prohibition or requirement applicable to UBS (other than any
                corporate policy limiting the amount of UBS's investment in
                another entity) then UBS shall at least three (3) Business Days
                prior to the proposed Day S, notify the Company telephonically
                (confirmed by writing) of any such impediment and its estimate
                of the period during which such impediment will preclude UBS'
                ability to settle all or part of this Transaction.

                The Settlement Notice shall be effective only if the notice
                requirements specified above are fulfilled; provided, that if no
                settlement method is specified, then the settlement method shall
                be deemed to be Cash Settlement and provided further that the
                Company may upon telephonic notice to UBS at least one (1)
                Exchange Trading Day prior to the proposed Day S withdraw any
                Settlement Notice.

        In the case of any Partial Settlement, following such settlement the
        number of Underlying Shares to which this Transaction shall relate shall
        be adjusted, as of Day S, by subtracting the number of Settlement Shares
        from the number of Underlying Share (as the same may have been adjusted
        prior to such Partial Settlement) immediately prior to such Day S. The
        Settlement Shares shall not be subject to forward accretion and shall be
        treated separately from the remaining Underlying Shares during any
        Unwind Period.

2.      On Day S, the Settlement Price for the Settlement Shares and the
        Settlement Amount shall be determined for Day S.

3.      The Settlement Amount shall be settled pursuant to the settlement method
        (B, C, or D of this

                                                                          Page 7

<PAGE>   27

        section III.) selected by the Company in its sole discretion.

4.      If settlement with respect to the Settlement Shares shall occur pursuant
        to Section III.A1 (but not as a result of a Mandatory Unwind Event) on
        or before the 180th day following the Effective Date, then the
        Settlement Price for purposes of such settlement shall be increased by
        any positive amount, calculated by UBS as follows:

               Spread x Forward Price  x  (180 - calendar days since Trade Date)
                                          --------------------------------------
                                                          360

5.      It shall be a condition precedent to any right of the Company to elect
        Stock Settlement (III. C. below) or Net Stock Settlement (III. D.
        below), that the Company must (i) notify UBS of such election at least 5
        Business Days prior to Day S and (ii) prior to Day S, cause to be filed
        with the Securities and Exchange Commission (the "Commission") and cause
        to become effective under the Securities Act of 1933, as amended (the
        "Securities Act") a registration statement that results in UBS being
        able to resell all Paired Shares to be delivered by the Company to UBS
        LLC for the account of UBS in effecting such Stock Settlement or Net
        Stock Settlement without further registration under the Securities Act
        of 1933, as amended, such registration statement to include one or more
        preliminary prospectuses, prospectuses, and any amendments and
        supplements thereto such that any preliminary prospectus or prospectus,
        as amended or supplemented, shall not contain any untrue statement of a
        material fact or omit to state a material fact required to be stated
        therein or necessary to make the statements therein not misleading in
        light of the circumstances under which they are made. In addition, the
        Company shall not deliver any Paired Shares to UBS LLC for the account
        of UBS pursuant to Sections IV.A or IV.D. below unless at the time of
        such delivery a registration statement has become effective under the
        Securities Act that results in UBS being able to resell such Paired
        Shares without further registration under the Securities Act, such
        Registration Statement to include one or more preliminary prospectuses,
        prospectus and any amendments or supplements thereto such that any
        preliminary prospectus or prospectus, as amended or supplemented, shall
        not contain any untrue statement of a material fact or omit to state a
        material fact required to be stated therein or necessary to make the
        statements therein not misleading in light of the circumstances under
        which they are made. The Company further agrees that it will cause any
        such Registration Statement referred to in this paragraph 5 of Section
        III.A. to remain in effect until the earliest of the date on which (i)
        all Paired Shares issued pursuant hereto and not required to be
        delivered to the Company hereunder have been sold by UBS LLC for the
        account of UBS and UBS agrees to notify the Company of such fact, within
        two (2) Business Days of its occurrence, (ii) UBS LLC for the account of
        UBS is able to sell the Paired Shares subject thereto under Rule 144(k),
        or (iii) UBS has advised the Company that it no longer requires that
        such registration statement be effective; provided, however, that in no
        event shall the Company be obligated to keep such Registration Statement
        effective for more than 10 Exchange Trading Days after the end of the
        applicable Unwind Period.

B.      CASH SETTLEMENT

        If the Company elects Cash Settlement, the Company shall settle by
        delivering cash in an amount equal to the Settlement Amount in exchange
        for the Settlement Shares ("Cash Settlement") on the Exchange Trading
        Day immediately succeeding Day S. UBS shall cause UBS LLC for the
        account of UBS to deliver the Settlement Shares to the Company on the
        Exchange Trading Day immediately succeeding Day S upon receipt of such
        Cash Settlement.

C.      STOCK SETTLEMENT

        If the Company elects to settle the Settlement Amount by delivering
        Paired Shares in exchange for the Settlement Shares ("Stock
        Settlement"), the number of Paired Shares to be delivered (the "Stock
        Settlement Shares") shall be equal to (a) the Settlement Amount divided

                                                                          Page 8

<PAGE>   28
        by (b) the Stock Settlement Unwind Price. The mechanics for settlement
        are set forth in Section III. E. below and Article VI.

D.      NET STOCK SETTLEMENT

        If the Company elects to settle the Settlement Amount on a net stock
        basis ("Net Stock Settlement"), the number of net stock settlement
        shares (the "Net Stock Settlement Shares") shall equal:

                i) the number of Settlement Shares, times

                ii) the Settlement Price minus the Stock Settlement Unwind
                Price, divided by

                iii) the Stock Settlement Unwind Price.

        If such calculation yields a negative number, this shall indicate the
        number of Paired Shares to be delivered from UBS LLC for the account of
        UBS to the Company. The mechanics for settlement are set forth in
        Section III. E. below and Article VI. (This section does not apply for
        purposes of Interim Net Stock Settlement.)

E.      STOCK AND NET STOCK SETTLEMENT MECHANICS

        1.      Preliminary Stock Settlement:

                If the Company has chosen Stock Settlement, the Company shall
                deliver to UBS LLC for the account of UBS, by 11:00 a.m. on Day
                S, that number of Paired Shares (the "Preliminary Stock
                Settlement Shares"), equal to the product of (i)(a) the
                Settlement Amount divided by (b) the closing price of the Paired
                Shares on the Exchange Trading Day immediately preceding Day S,
                times (ii) 110%. Upon receipt of the Preliminary Stock
                Settlement Shares, UBS will cause UBS LLC to deposit the
                Settlement Shares in the Company's Customer Account.


        2.      Preliminary Net Stock Settlement:

                If the Company has chosen Net Stock Settlement and if the
                Settlement Price exceeds the closing price of the Paired Shares
                on the Exchange Trading Day immediately preceding Day S, the
                Company shall deliver to UBS LLC for the account of UBS by 11:00
                a.m. on Day S, that number of Paired Shares (the "Preliminary
                Net Stock Settlement Shares) equal to (i)(a) the number of
                Settlement Shares times (b) the difference between the
                Settlement Price and the closing price of the Paired Shares on
                the Exchange Trading Day immediately preceding Day S divided by
                (ii) the closing price of the Paired Shares on the Exchange
                Trading Day immediately preceding Day S times (iii) 125%. If the
                closing price of the Paired Shares on the Exchange Trading Day
                immediately preceding Day S exceeds the Settlement Price, the
                Company shall not be required to deliver any shares to UBS LLC
                for the account of UBS under this subsection III.E.2.

        3.      By 11:00 a.m. on every fifth (5th) Exchange Trading Day (other
                than the final Exchange Trading Day) during the Unwind Period
                and on the Business Day following the final Exchange Trading Day
                of the Unwind Period:

                A. For Stock Settlement:

                Stock Settlement Shares shall be calculated as if such Exchange
                Trading Day were Day S, except that (a) there shall be no
                recalculation of the Settlement Amount and (b) for purposes of
                calculating the Stock Settlement Unwind Price, the Unwind


                                                                          Page 9

<PAGE>   29


                Period shall be deemed to have ended on the Exchange Trading Day
                for which the calculation is made.

                (i) if (a) Stock Settlement Shares (calculated as set forth
                above) are greater than (b) the sum of (x) Preliminary Stock
                Settlement Shares plus (y) any shares previously delivered
                pursuant to this subparagraph (i), then the Company shall
                deliver that number of Paired Shares equal to the difference
                between (a) and (b) to UBS LLC for the account of UBS, and

                (ii) as of the final day of the Unwind Period, if (a) the sum of
                (x) Preliminary Stock Settlement Shares plus (y) any shares
                previously delivered pursuant to this settlement under
                subparagraph (i), above is greater than Stock Settlement Shares,
                then UBS LLC, for the account of UBS, shall deliver that number
                of Paired Shares equal to the difference between (a) and (b)
                above to the Company's Customer Account,

                B. For Net Stock Settlement:

                Net Stock Settlement Shares shall be calculated as if such
                Exchange Trading Day were Day S except that (a) there shall be
                no recalculation of the Settlement Amount and (b) for purposes
                of calculating the Stock Settlement Unwind Price, the Unwind
                Period shall be deemed to have ended on the Exchange Trading Day
                for which the calculation is made.

                (i) if (a) Net Stock Settlement Shares are greater than (b) the
                sum of (x) Preliminary Net Stock Settlement Shares plus (y) any
                shares previously delivered pursuant to this settlement under
                this subparagraph (i), then the Company shall deliver Paired
                Shares (which Paired Shares may be delivered from its Margin
                Account) equal in number to the difference between (a) and (b)
                to UBS LLC for the account of UBS, or

                (ii) as of the final day of the Unwind Period, if (a) the sum of
                (x) Preliminary Net Stock Settlement Shares plus (y) any shares
                previously delivered pursuant to this settlement under
                subparagraph (i), above is greater than (b) Net Stock Settlement
                Shares, then UBS LLC, for the account of UBS, shall deliver that
                number of Paired Shares equal to the difference between (a) and
                (b) above to the Company's Customer Account.

        4.      The Company shall cause all shares delivered by it to UBS LLC
                for the account of UBS to be fully and effectively registered
                under the Securities Act (as provided in Section III.A.5 above).

        5.      On the Exchange Trading Day following the final Exchange Trading
                Day of the Unwind Period, UBS LLC for the account of UBS shall
                release all claims to Paired Shares held in the Company's
                Customer Account, including any Settlement Shares delivered
                pursuant to Preliminary Stock Settlement (Section III. E. 1.
                above), and deliver all such Paired Shares to the Company with
                the dollar value of all fractional shares settled in cash.

        6.      In the event of Stock or Net Stock Settlement pursuant to
                Section III.C. or III.D., the Company shall pay an unwind
                accretion fee, in cash or stock, calculated in accordance with
                the following formula:

                Settlement Amount x (days in Unwind Period) x (1 month LIBOR +
                -----------------   -----------------------              Spread)
                         2                     360

        7.      In the event of Stock or Net Stock Settlement pursuant to
                Section III.C. or III.D., the Company shall pay a placement fee
                to UBS LLC for the account of UBS calculated


                                                                         Page 10

<PAGE>   30
               as:

                         Settlement Amount x 0.50%

IV.     INTERIM NET STOCK SETTLEMENT

        On each Interim Settlement Date, if the Forward Price exceeds the
        closing price of the Paired Shares on such Interim Settlement Date, then
        on the Business Day following the Fifth Exchange Trading Day thereafter
        the Company shall deliver a number of Paired Shares to UBS LLC for the
        account of UBS equal to the Interim Settlement Shares; provided,
        however, that if the Company is restricted by law or regulation or
        self-regulatory requirements or related policies and procedures, whether
        or not such requirements, policies or procedures are imposed by law
        directly or have been voluntarily adopted by the Company to insure
        compliance with applicable laws, or in its reasonable judgement is
        otherwise unable or unwilling to deliver registered Paired Shares, the
        Company shall deliver Cash Collateral to UBS as described in Section
        V.B. below.

V.      COLLATERAL PROVISIONS

A.      If the Company fails to deliver an effective resale registration
        statement within 90 days of the Trade Date, then until an effective
        resale registration statement is provided and an Interim Net Stock
        Settlement can be effected, the Company shall deliver Cash Collateral in
        an amount equal to the Interim Settlement Amount to UBS. If Cash
        Collateral is delivered pursuant to this Section V.A., then until an
        Interim Net Settlement can be effected or the transaction is settled on
        a Cash Settlement basis or a registration statement becomes effective,
        the Interim Settlement Amount shall be recalculated and the amount of
        Cash Collateral shall be adjusted to equal such recalculated Interim
        Settlement Amount on a biweekly (every 2 weeks) basis.

B.      In the event that the Company does not deliver Paired Shares pursuant to
        Paragraph IV. for one or more of the reasons described in the provision
        at the end of such paragraph, then, unless Cash Collateral has been
        delivered pursuant to Section V.A. above, the Company shall deliver Cash
        Collateral in an amount equal to the Interim Settlement Amount to a Cash
        Collateral Account at UBS.

C.      If the Company has delivered Cash Collateral to UBS pursuant to
        paragraphs A. or B. above, at the Company's option, the Company may
        deliver freely saleable registered Paired Shares to UBS equal in
        saleable market value, based on closing market prices on the Exchange
        Trading Day prior to such delivery, to the value of the Cash Collateral
        held in the Cash Collateral Account at UBS. On the day after such
        Exchange Trading Day, UBS shall release all claims to Cash Collateral
        held in the Cash Collateral Account and deliver such amounts to the
        Company. On any subsequent Interim Settlement Date, if Cash Collateral
        is held by UBS, UBS shall deliver to the Company within 5 Business Days
        after such Interim Settlement Date, the amount by which the amount of
        Cash Collateral exceeds the Interim Settlement Amount.

D.      Security Interest

        The Company hereby pledges to UBS, as security for its obligations
        herein, a first priority continuing security interest in, lien on and
        right of set-off against all Cash Collateral Paid to UBS, or UBS
        Securities LLC, as its agent. Upon release to the Company by UBS of such
        Cash Collateral, the security interest and lien granted hereunder will
        be released immediately, and, to the extent possible, without any
        further action by either party.



                                                                         Page 11

<PAGE>   31


E.      Representations

        Each of the Trust and SLC represents to UBS (which representations will
        be deemed to be repeated as of each date that the Company Pays Cash
        Collateral to UBS) that:

        (i) it has the power to grant a security interest in and lien on any
        Cash Collateral it Pays to UBS and has taken all necessary actions to
        authorize the granting of that security interest and lien;

        (ii) it is the sole owner of or otherwise has the right to Pay all Cash
        Collateral to UBS hereunder, free and clear of any security interest,
        lien, encumbrance or other restrictions other than the security interest
        and lien created hereby;

        (iii) upon Payment of any Cash Collateral to UBS under the terms of this
        Confirmation, UBS will have a valid and perfected first priority
        security interest therein (assuming that any third-party financial
        intermediary or other entity not within its control involved in the
        transfer of the Cash Collateral gives the notices and takes the action
        required of it under applicable law for perfection of that interest),
        and

        (iv) the performance by it of its obligations under this Confirmation
        will not result in the creation of any security interest, lien or other
        encumbrance on any Cash Collateral other than the security interest and
        lien granted hereunder.

F.      Other Collateral Provisions

        Any Cash Collateral held by UBS during settlement of the Transaction
        pursuant to Sections III. or VI. shall be held until the end of the
        applicable Unwind Period and shall be released upon the final Settlement
        Date for that Unwind Period.

G.      Definitions related to Collateral Provisions

        "Cash Collateral" means the amount of cash denominated in USD, if any,
        Paid by the Company to or for the benefit of UBS, acting through UBS
        Securities LLC as its agent, pursuant to paragraphs IV. or V. of this
        Forward Stock Contract.

        "Local Business Day" means a day on which commercial banks in New York,
        New York are open for business (including dealings in foreign
        exchange)."

        "Paid", "Pays" or "Payment" means payment in same day funds in the same
        manner provided for payments to be made to UBS, or UBS Securities LLC as
        its agent under this Forward Stock Contract.

VI.     CERTAIN COVENANTS AND OTHER PROVISIONS

Ability to Settle in Stock:  As of the date hereof, each of the Trust and SLC
                             has not, and after the date hereof, each of the
                             Trust and SLC will not, enter into any obligation
                             that would contractually prohibit the Company from
                             Stock Settlement of any shares under this
                             Agreement.

Mandatory Unwind Event:      If at any time prior to the Maturity Date:

                             (i) the average closing price on the Relevant
                             Exchange of the Paired Shares on any two
                             consecutive Exchange Trading Days, other than a day
                             on which a Market Disruption Event has occurred, is
                             equal to or less than any of the Mandatory Unwind
                             Thresholds, then UBS shall have the right upon
                             written notice to the Company, to require the
                             parties to settle all or a portion of the
                             Transaction (up to the



                                                                         Page 12

<PAGE>   32
                             cumulative Unwind Share Limit for the corresponding
                             Mandatory Unwind Threshold) on the Mandatory Unwind
                             Date pursuant to the settlement procedures set
                             forth in Section III. above.


                             Once a Mandatory Unwind Event has occurred, if the
                             closing price of the Paired Shares is less than a
                             lower Mandatory Unwind Threshold, UBS shall have
                             the right upon written notice to the Company, to
                             require the Parties to settle on the Mandatory
                             Unwind Date pursuant to Section III above, all or a
                             portion of the Transaction, up to a number of
                             Paired Shares equal to the number of Underlying
                             Shares multiplied by the corresponding cumulative
                             Unwind Share Limit, on the mandatory Unwind Date
                             pursuant to the settlement procedures set forth in
                             Section III. above.

                             or,

                             ii) if any of the following events occur:

                             (1) any Financial Covenant Default as more
                             particularly described in Exhibit A attached
                             hereto;

                             (2) any Event of Default that has not been cured or
                             waived by the respective lender(s) under the
                             Trust's Revolving and Term Loan Credit Facility by
                             and between the Trust as borrower and Bankers Trust
                             Company as lead agent and dated as of September
                             1997.

                             (3) any Event of Default that has not been cured or
                             waived by the respective lender(s) under any other
                             unsecured and/or recourse lending agreement
                             involving the Company involving Specified
                             Indebtedness in aggregate amount of no less than
                             the Threshold Amount;


                             (4) Bankruptcy or Insolvency(as such terms are
                             defined in the Agreement); and/or

                             (5) any failure of the Company to post cash
                             collateral pursuant to IV.C. herein if such failure
                             is not remedied on or before the third Local
                             Business Day after notice of such failure is given
                             to such party.

                             then, UBS LLC for the account of UBS may, on giving
                             at least 5 Business Days prior written notice to
                             the Company require all or part of the Transaction
                             to be settled early on the Mandatory Unwind Date
                             pursuant to the settlement procedures set forth in
                             Section III.

                             For purposes of the settlement procedures set forth
                             in Section III, "Day S" shall be the Mandatory
                             Unwind Date and the "Settlement Shares" shall be
                             the number of Paired Shares to be settled pursuant
                             to clause (i) or (ii) above. The Company may elect
                             the method of settlement for such early settlement
                             in accordance with the settlement provisions set
                             forth herein; provided however, that if Stock
                             Settlement or Net Stock Settlement is elected, and
                             (1) no resale Registration Statement has been
                             provided and declared effective prior to Day S or
                             (2) any resale Registration Statement so provided
                             and declared effective becomes, on Day S or during
                             an Unwind Period, the subject of a stop order
                             suspending its effectiveness or is the subject of
                             any proceeding for that purpose or any such
                             proceeding is threatened by the Commission, then
                             the Company at its



                                                                         Page 13

<PAGE>   33


                             sole option may choose to (A) cash collateralize
                             125% of its obligation to UBS in a manner similar
                             to that described in in Section V., (B) effect Cash
                             Settlement as to all of the Settlement Shares in
                             accordance with Section III.B. hereof on the
                             Exchange Trading Day immediately succeeding the
                             occurrence of one of the events specified in (1) or
                             (2) above or (C) effect settlement with Paired
                             Shares that are not subject to a resale
                             Registration Statement to allow UBS to unwind the
                             Transaction and liquidate any position it may hold
                             in such unregistered Settlement Shares by means of
                             negotiated private resales, to the extent and in
                             the manner permitted by applicable federal and
                             state securities laws. In recognition that such
                             negotiated private resales, if any, are likely to
                             be completed at prices reflective of a discount to
                             the prevailing open market prices for any freely
                             tradeable Paired Shares, the Company agrees to
                             deliver such number of supplemental Paired Shares
                             as UBS may reasonably request to which UBS shall
                             assign a dollar price in order to approximate an
                             aggregate amount equal to the aggregate discount
                             accepted by UBS in connection with the resale of
                             the Settlement Shares or the Company shall pay an
                             amount to UBS equal to the aggregate discount
                             accepted by UBS in connection with the resale of
                             the Settlement Shares.

                             Upon completion of all settlement activities, UBS
                             LLC for the account of UBS, will promptly return
                             all remaining shares in the Company's Customer
                             Account to the Company.

Market Disruption Event:     The occurrence or existence on any Exchange Trading
                             Day during the one-half hour period that ends at
                             the Valuation Time of any suspension of or
                             limitation imposed on trading on (i) any of the
                             Relevant Exchanges or (ii) any of the exchange or
                             boards of trade or futures contract market on which
                             options or future contracts on the Paired Shares of
                             the Company are traded if, in the reasonable
                             determination of the Calculation Agent, such
                             suspension or limitation is material. In the event
                             that a Market Disruption Event occurs or is
                             continuing on a Valuation Date, then any
                             determination of the closing price of the Paired
                             Shares shall be postponed to the first succeeding
                             Exchange Trading Day on which there is no Market
                             Disruption Event, provided that if there is a
                             Market Disruption Event on each of the five
                             Exchange Trading Days immediately following the
                             original Valuation Date that but for the Market
                             Disruption Event would have been a day on which the
                             closing price of the Paired Shares would have been
                             determined, such fifth Exchange Trading Day shall
                             be deemed to be such Valuation Date notwithstanding
                             the Market Disruption Event and the Calculation
                             Agent shall, in consultation with the Company,
                             determine the closing price for that Valuation Date
                             based upon the last closing price prior to such
                             Market Disruption Event. and if applicable, shall
                             effect the settlement of the Underlying Shares by
                             using such last closing price for the determination
                             of the Stock Settlement Unwind Price.

                             The Calculation Agent shall within one (1) Business
                             Day notify the other party of the existence or
                             occurrence of a Market Disruption Event on any day
                             that but for the occurrence or existence of a
                             Market Disruption Event would have been a Valuation
                             Date.

Regulatory Compliance:       Each party agrees that if the delivery of shares
                             upon settlement is



                                                                         Page 14

<PAGE>   34


                             subject to any restriction imposed by a regulatory
                             authority, it shall not be an event of default, and
                             the parties will negotiate in good faith a
                             procedure to effect settlement of such shares in a
                             manner which complies with any relevant rules of
                             such regulatory authority and which is satisfactory
                             in form and substance to their respective counsel.

Securities Law Compliance:   Each party agrees that it will comply, in
                             connection with this T ransaction and all related
                             or contemporaneous sales and purchases of the
                             Company's Paired Shares, with the applicable
                             provisions of the Securities Act, the Securities
                             Exchange Act of 1934 (the "Exchange Act") and the
                             rules and regulations thereunder.

Settlement:                  All settlements shall occur through DTC or any
                             other mutually acceptable depository.

Settlement Stock Delivery:   Pursuant to the Stock Settlement and Net Stock
                             Settlement provisions under Section III. above, UBS
                             LLC for the account of UBS shall deliver all
                             Settlement Shares to the Company's Customer
                             Account. Such Paired Shares will serve as
                             collateral until released by UBS LLC for the ac
                             count of UBS in accordance with the settlement
                             mechanics noted under III.E. above, or delivered to
                             the Company pursuant to Section III.E.5. Paired S
                             hares held in the Company's Customer Account shall
                             not be voted.

                             The Company covenants and agrees with UBS that
                             Paired Shares delivered by the Company pursuant to
                             settlement events in accordance herewith will be
                             duly authorized, validly issued, fully paid and
                             non-as sessable. The issuance of such Paired Shares
                             will not require the con sent, approval,
                             authorization, registration, or qualification of
                             any government authority, except such as shall have
                             been obtained on or before the delivery date to UBS
                             LLC for the account of UBS in connection with any
                             registration statement filed with respect to any
                             share or otherwise.

Solvency:                    Immediately following the execution of this
                             agreement, the Company will be solvent and able to
                             pay its debts as they mature, will have capital
                             sufficient to carry on business and all businesses
                             in which it engages, and will have assets which
                             will have a present fair market valuation greater
                             than the amount of all of its liabilities.

Allocation between Trust
and SLC:                     As between the Trust and SLC, (i) any delivery to
                             or by the Company of the Trust Share portion of
                             Paired Shares pursuant to this Confirmation shall
                             be made by delivery to or by the Trust, (ii) any
                             delivery to or by the Company of the SLC share
                             portion of Paired Shares pursuant to this
                             Confirmation shall be made by delivery to or by
                             SLC, and (iii) any delivery to or by the Company of
                             cash pursuant to this Confirmation shall be
                             allocated between the Trust and SLC between and
                             among themselves 95% to or from the Trust and 5% to
                             or from SLC without effect on any obligation of the
                             Company to UBS or on any obligation of UBS to the
                             Company.

Trading Authorization:       The following individuals and /or any individual
                             authorized in writing by the Treasurer of the
                             Company are authorized by the Company to provide
                             trading instructions to UBS LLC for the account



                                                                         Page 15

<PAGE>   35


                             of UBS with regard to this transaction.


                             Starwood Lodging Trust:
                                    Ronald Brown

                             Starwood Lodging Corporation:
                                    Alan Schnaid
                                    Nir Margalite



                                                                         Page 16

<PAGE>   36


VI.     DELIVERY INSTRUCTIONS:

Party A:                  Chase, NYC
                          UBS Securities LLC
                          ABA 021000021
                          A/C No. ###-##-####
                          Attn:  GED

Party B:                  Harris Bank             Harris Bank
                          Chicago, IL 60603       Chicago, IL 60603
                          ABA # 071000288         ABA #071000288
                          credit account:         credit account:
                          Starwood Lodging Trust  Starwood Lodging Corporation
                          # 416-255-8             # 416-258-2
                          ATTN: Charles McCain    ATTN: Charles McCain

                          Please confirm that the foregoing correctly sets
                          forth the terms of our agreement by executing the
                          copy of this Confirmation enclosed for that purpose
                          and returning it to Ms. Gale Herzing, 29th. Floor.


Yours faithfully,

Union Bank of Switzerland, London Branch:


By: /s/ R. WEERASEKERA                    By: /s/ ADAM MATTHEWS
  --------------------------------           -----------------------------------
  Name: R. WEERASEKERA                       Name: ADAM MATTHEWS
  Title: Vice President                      Title: VICE PRESIDENT
  Date:                                      Date:

Starwood Lodging Trust:

By:                                       By:
  --------------------------------           -----------------------------------
  Name:                                      Name:
  Title:                                     Title:
  Date:                                      Date:


Starwood Lodging Corporation

By:                                       By:
  --------------------------------           -----------------------------------
  Name:                                      Name:
  Title:                                     Title:
  Date:                                      Date:



                                                                         Page 17
<PAGE>   37
                                    SCHEDULE

                                     TO THE
                       MASTER AGREEMENT (THE "AGREEMENT")
                      DATED AS OF OCTOBER 13, 1997 BETWEEN

             UNION BANK OF SWITZERLAND, LONDON BRANCH ("PARTY A") A
                 BANK REGISTERED UNDER THE LAWS OF SWITZERLAND,

                                       AND

STARWOOD LODGING TRUST, A MARYLAND REAL ESTATE INVESTMENT TRUST ("TRUST") AND
STARWOOD LODGING CORPORATION ("SLC"), A MARYLAND CORPORATION, (TRUST AND SLC
SOMETIMES HEREAFTER REFERRED TO AS "COUNTERPARTY" AND COLLECTIVELY AS "PARTY B")

The parties intend that the only Transaction that shall be subject to this
Agreement is the Transaction as provided for in the Forward Stock Contract dated
October 13, 1997 Party A and Party B (the "Sole Transaction"), which Forward
Stock Contract also constitutes a Confirmation hereunder.

                                     PART 1
                             TERMINATION PROVISIONS

(a)     "SPECIFIED ENTITY" means (i) in relation to Party A - none; and (ii) in
        relation to Party B: - none.

(b)     "SPECIFIED TRANSACTION" will have the meaning specified in Section 14 of
        this Agreement.

(c)     The "CROSS DEFAULT" provisions of Section 5(a)(vi) of this Agreement, as
        modified by Part 5(d) herein, will apply to Party A and to Party B.
        Notwithstanding the provisions of Section 6 of the Agreement, any Cross
        Default with respect to Party B shall constitute a Mandatory Unwind
        Event in accordance with the Forward Stock Contract. During any
        Mandatory Unwind Period resulting from a Cross Default, Party A may not
        exercise it's "Right to Terminate Following an Event of Default"
        pursuant to Section 6 of the Agreement unless and until:

        (i) Party B fails to fulfill its obligations to deliver an effective
        resale Registration Statement as required under the Forward Stock
        Contract; or

        (ii) any effective resale Registration Statement provided by Party B as
        required under the Forward Stock Contract is subject to a stop order on
        Day S or during the Unwind Period; or

        (iii) any event of default under any other unsecured and /or recourse
        lending agreement involving Party B has occurred and the obligations
        under such lending agreement have been accelerated;

        provided that the foregoing shall in no way limit Party A's rights upon
        the occurrence of any other Event of Default by Party B

        "SPECIFIED INDEBTEDNESS" means (i) with respect to Party A, any
        obligation (whether present or future, contingent or otherwise as
        principal or surety or otherwise) for the payment or repayment of any
        money but shall not include obligations in respect of deposits received
        in the ordinary course of a party's banking business and (ii) with
        respect to Party B, any obligation (whether present or future,
        contingent or otherwise, as principal or surety or otherwise) for the
        payment or repayment of any money under any unsecured and/or recourse
        lending agreement and involving the Trust and/or SLC.

        "THRESHOLD AMOUNT" means USD10,000,000 (or the equivalent in any other
        currency or currencies).

(d)     The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) of this
        Agreement will apply to Party A and Party B, as modified by Part 5(a) of
        this Agreement.



                                       19
<PAGE>   38

(e)     The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) of this
        Agreement will not apply to Party A or to Party B.

(f)     PAYMENTS ON EARLY TERMINATION for the purpose of Section 6(e) of this
        Agreement: (i) Loss shall apply; and (ii) the Second Method shall apply.

(g)     "TERMINATION CURRENCY" means one of the currencies in which payments are
        required to be made pursuant to a Confirmation in respect of a
        Terminated Transaction selected by the non-Defaulting Party or the
        non-Affected Party, as the case may be, or , in the circumstances where
        there are two Affected Parties, as agreed between the parties, or,
        failing such agreement as aforesaid, or if the currency so selected is
        not freely available, the Termination Currency shall be U.S. Dollars.

(h)     ADDITIONAL TERMINATION EVENT. Not applicable.


                                     PART 2
                               TAX REPRESENTATIONS

(a)     PAYER TAX REPRESENTATIONS. For the purpose of Section 3(e) of this
        Agreement, Party A and Party B each make the following representation:

        It is not required by any applicable law, as modified by the practice of
        any relevant governmental revenue authority, of any Relevant
        Jurisdiction to make any deduction or withholding for or on account of
        any Tax from any payment (other than interest under Section 2(e),
        6(d)(ii) or 6(e) of this Agreement) to be made by it to the other party
        under this Agreement. In making this representation, it may rely on (i)
        the accuracy of any representations made by the other party pursuant to
        Section 3(f) of this Agreement, (ii) the satisfaction of the agreement
        contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the
        accuracy and effectiveness of any document provided by the other party
        pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the
        satisfaction of the agreement of the other party contained in Section
        4(d) of this Agreement, PROVIDED that it shall not be a breach of this
        representation where reliance is placed on sub-clause (ii) above and the
        other party does not deliver a form or document under Section 4(a)(iii)
        by reason of material prejudice to its legal or commercial position.

(b)     PAYEE TAX REPRESENTATIONS. For the purpose of Section 3(f) of this
        Agreement, Party A and Party B make the representations specified below,
        if any:

        (i) The following representation will apply to Party A (except when
        acting through an Office in the United States) and will apply to Party
        B:

                It is fully eligible for the benefits of the "Business Profits"
        or "Industrial and Commercial Profits" provision, as the case may be,
        the "Interest" provision or the "Other Income" provision (if any) of the
        Specified Treaty with respect to any payment described in such
        provisions and received or to be received by it in connection with this
        Agreement and no such payment is attributable to a trade or business
        carried on by it through a permanent establishment in the Specified
        Jurisdiction. "Specified Treaty" means: Income Tax Convention between
        the United States of America and Switzerland. "Specified Jurisdiction"
        means with respect to Party A: the United States of America. "Specified
        Jurisdiction" means with respect to Party B: Switzerland.

        (ii) The following representation will apply to Party A when acting
        through an Office in the United States and will apply to Party B:

                Each payment received or to be received by it in connection with
        this Agreement will be effectively connected with its conduct of trade
        or business in the Specified Jurisdiction. "Specified Jurisdiction"
        means: the United States of America.

        (iii) The following representation will apply to Party A when acting
        through an Office in the United Kingdom and will not apply to Party B:



                                       20
<PAGE>   39

                (A) It is entering into each Transaction in the ordinary course
        of its trade as, and is, either (1) a recognized U.K. bank or (2) a
        recognized U.K. swaps dealer (in either case (1) or (2), for the
        purposes of the United Kingdom Inland Revenue extra statutory concession
        C17 on interest and currency swaps dated March 14, 1989), and (B) it
        will bring into account payments made and received in respect of each
        Transaction in computing its income for United Kingdom tax purposes.


                                     PART 3
                         AGREEMENT TO DELIVER DOCUMENTS

For the purposes of Sections 3(d), 4(a)(i) and (ii) of this Agreement, each
party agrees to supply the following documents:

(a)     Tax forms, documents or certificates to be delivered are:

        Each party agrees to complete, accurately and in a manner reasonably
        satisfactory to the other party (or any Specified Entity of the other
        party), and to execute, arrange for any required certification of, and
        deliver to the other party (or such Specified Entity) (or to such
        government or taxing authority as the other party (or such Specified
        Entity) reasonably directs), any form or document that may be required
        or reasonably requested in order to allow the other party (or such
        Specified Entity) to make a payment under this Agreement (or a Credit
        Support Document of the other party or a Specified Entity thereof)
        without any deduction or withholding for or on account of any Tax or
        with such deduction or withholding at a reduced rate, promptly upon the
        earlier of (i) reasonable demand by the other party (or such Specified
        Entity) and (ii) learning that the form or document is required.

(b)     Other documents to be delivered and covered by the Section 3(d)
        representation are:

              PARTY A:              None;

              PARTY B:              Opinion of Party B's legal counsel in a form
                                    satisfactory to Party A; and

              PARTY A AND PARTY B:  Each party shall provide to the other party
                                    evidence of the authority and true
                                    signatures of each official or
                                    representative signing this Agreement.


                                     PART 4
                                  MISCELLANEOUS

(a)     ADDRESS FOR NOTICES. For the purpose of Section 12(a) of this Agreement:

        ADDRESS FOR NOTICES OR COMMUNICATIONS TO PARTY A: To the office(s)
        specified in the relevant Confirmation with a copy of any notice or
        other communication under Section 5 or 6 to both the London and Zurich
        Branches of Party A as set out below:

        ZURICH BRANCH                       LONDON BRANCH

        Union Bank of Switzerland           Union Bank of Switzerland
        Bahnhofstrasse 45                   100 Liverpool Street
        8021 Zurich                         London EC2M 2RH
        Attn: HADP - Derivative Operations  Attn: Derivative Legal Group - DELG
        Telex: 814449 UB CH                 Telex:  923333  UBSPDW G


                                       21
<PAGE>   40
        Address for notices or communications to Party B:

            Starwood Lodging Trust             Starwood Lodging Corporation
            2231 East Camelback Road           2231 East Camelback Road
            Suite 400                          Suite 400
            Phoenix, AZ 85016                  Phoenix, AZ 85016
            Attn: Mr. Ron Brown                Attn:  Mr. Alan Schnaid
            Telecopier: 602-852-0115           Telecopier:   602-852-0115
            Phone: 602-852-3351                Phone: 602-852-3326

(b)     PROCESS AGENT. For the purpose of Section 13(c) of this Agreement: Party
        A appoints as its Process Agent: UBS Securities LLC, 299 Park Avenue,
        New York, NY 10171, Attention: Legal Department. Party B makes no
        appointment of Process Agent.

(c)     OFFICES. The provisions of Section 10(a) to this Agreement will apply to
        this Agreement.

(d)     MULTIBRANCH PARTY. For the purpose of Section 10(c) of this Agreement:
        Neither Party A or Party B is a Multibranch Party.

(e)     CALCULATION AGENT. The Calculation Agent is Party A, unless otherwise
        specified in a Confirmation in relation to the relevant Transaction.

(f)     CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document in
        relation to Party A: - not applicable, and in relation to Party B: - The
        Forward Stock Contract for the Sole Transaction.

(g)     CREDIT SUPPORT PROVIDER. Credit Support Provider means in relation to
        Party A and Party B: Not Applicable.

(h)     GOVERNING LAW. This Agreement will be governed by, and construed in
        accordance with, the laws of the State of New York (without reference to
        choice of law doctrine).

(i)     NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) of this Agreement
        does not apply.

(j)     "AFFILIATE" will have the meaning set out in Section 14 of this
        Agreement.


                                     PART 5

                                OTHER PROVISIONS


(a)     MODIFICATIONS TO THE AGREEMENT.


        (i)     MODIFICATIONS TO CERTAIN EVENTS OF DEFAULT AND TERMINATION
                EVENTS. For the Events of Default and Termination Events listed
                below, including any modifications in this Schedule, the "Right
                to Terminate Following an Event of Default", or "Right to
                Terminate Following Termination Event" shall be modified so
                that, in lieu of the remedies detailed in Section 6 for Early
                Termination, settlement shall instead, after any applicable
                grace period, be effected as if a Mandatory Unwind Event has
                occurred pursuant to Section VI of the Forward Stock Contract
                for the Sole Transaction:

                A.    Events of Default:

                      (1)    Section 5(a)(ii), Breach of Agreement
                      (2)    Section 5(a)(iv), Misrepresentation
                      (3)    Section 5(a)(viii) - Merger Without Assumption

               B.     Termination Events:

                      (1)    Section 5(b)(i), Illegality


                                       22
<PAGE>   41

                      (2)    Section 5(b)(ii), Tax Event
                      (3)    Section 5(b)(iii), Tax Event Upon Merger
                      (4)    Section 5(b)(iv), Credit Event Upon Merger

        (ii)    RELATIONSHIP BETWEEN THE PARTIES. This Agreement is hereby
                amended by the addition of a new Section 15 as follows:

                "15.   RELATIONSHIP BETWEEN THE PARTIES.

                Each party will be deemed to represent to the other party on the
                date on which it enters into a Transaction (absent a written
                agreement between the parties that expressly imposes affirmative
                obligations to the contrary for that Transaction):

                      (a) NON RELIANCE. It is acting for its own account, and it
                      has made its own independent decisions to enter into that
                      transaction and as to whether that Transaction is
                      appropriate or proper for it based upon its own judgment
                      and upon advice from such advisers as it has deemed
                      necessary. It is not relying on any communication (written
                      or oral) of the other party as investment advice or as a
                      recommendation to enter into that Transaction; it being
                      understood that information and explanations related to
                      the terms and conditions of a Transaction shall not be
                      considered investment advice or a recommendation to enter
                      into that Transaction. No communication (written or oral)
                      received from the other party shall be deemed to be an
                      assurance or guarantee as to the expected results of that
                      Transaction.

                      (b) ASSESSMENT AND UNDERSTANDING. It is capable of
                      assessing the merits of and understanding (on its own
                      behalf or through independent professional advice), and
                      understands and accepts, the terms, conditions and risks
                      of that Transaction.

                      (c) STATUS OF PARTIES. The other party is not acting as a
                      fiduciary for or an adviser to it in respect of that
                      Transaction."

        (iii)   BASIC REPRESENTATIONS. Section 3(a) of this Agreement is hereby
                amended by the deletion of "and" at the end of Section 3(a)(iv);
                the substitution of a comma for the period at the end of Section
                3(a)(v) and the addition of Sections 3(a)(vi) to (ix) as
                follows:

                      "(vi) ELIGIBLE SWAP PARTICIPANT; LINE OF BUSINESS. It is
                      an "eligible swap participant" as defined in Commodity
                      Futures Trading Commission Rule 35.1(b)(2) (17 C.F.R.
                      35.1(b)(2)) and it has entered into this Agreement and the
                      Transactions in connection with its business or a line of
                      business (including financial intermediation);

                      (vii) COMPLIANCE WITH INTERNAL INVESTMENT POLICIES. In the
                      case of each Counterparty, each Transaction entered into
                      under this Agreement will be entered into in accordance
                      with, and will at all times comply with, applicable
                      internal investment policies and guidelines from time to
                      time adopted by such Counterparty; and

                      (viii) PURPOSE. In the case of Party B, it has entered
                      into this Agreement (and it will enter into each
                      Transaction hereunder) in connection with exchange rate,
                      interest rate or other price exposures arising in the
                      conduct or financing of its business or in order to manage
                      its assets or liabilities.

        (iv)    AGREEMENTS. Section 4 of this Agreement is hereby amended by the
                addition of Sections 4(f) as follows:

                      "(f) PHYSICAL DELIVERY. In respect of any physically
                      settled Transactions, it will, at the time of delivery, be
                      the legal and beneficial owner, free of liens and other
                      encumbrances, of any securities or commodities it delivers
                      to the other Party."

        (v)     EVENTS OF DEFAULT: Section 5 of this Agreement is hereby amended
                as follows:




                                       23
<PAGE>   42

                (1)   FAILURE TO PAY OR DELIVER. Section 5(a)(i) of this
                      Agreement is hereby amended by the substitution of the
                      following therefor:

                      "FAILURE TO PAY OR DELIVER. Failure by a party to make,
                      when due, any payment under Section 2(a)(i) or 2(e) of
                      this Agreement required to be made by it if such failure
                      is not remedied on or before the third Local Business Day
                      after notice of such failure is given to the party.
                      Failure by a party to make, when due, any delivery under
                      Section 2(a)(i) of this Agreement required to be made by
                      it if such failure is not remedied on or before the first
                      day that the relevant settlement or clearance system is
                      open for the acceptance and execution of settlement
                      instructions after notice of such failure is given to the
                      party."

                (2)   BANKRUPTCY. Section 5(a)(vii) of this Agreement is hereby
                      amended as follows:

                      (A) Section 5(a)(vii)(4) of this Agreement is hereby
                      amended by the insertion of a semi-colon after
                      "liquidation" the first time it appears in such Section
                      and by the deletion of the remainder of such Section; and

                      (B) Section 5(a)(vii)(7) of this Agreement is hereby
                      amended by the substitution of "10" for "30".

         (v)    TAX EVENT. Section 5(b)(ii) of this Agreement is hereby amended
                by the deletion of "or there is a substantial likelihood that it
                will," from line four thereof.

(b)     SET-OFF.



        (i)     In addition to any rights of set-off a party may have as a
                matter of law or otherwise, upon the occurrence of an Event of
                Default with respect to Party ("X") hereof (or a provision
                analogous thereto) or a Termination Event where X is the sole
                Affected Party, the other party ("Y") shall have the right (but
                shall not be obliged) without prior notice to X or any other
                person to set off any obligation of X owing to Y (whether or not
                arising under this Agreement, whether or not matured, whether or
                not contingent and regardless of the currency, place of payment
                or booking office of the obligation) against any obligations of
                Y owing to X (whether or not arising under this Agreement,
                whether or not matured, whether or not contingent and regardless
                of the currency, place of payment or booking office of the
                obligation).

        (ii)    For the purpose of cross-currency set off, Y may convert any
                obligation to another currency at a market rate determined by Y.

        (iii)   Nothing in this paragraph will have the effect of creating a
                charge or other security interest. This paragraph shall be
                without prejudice and in addition to any right of set-off,
                combination of accounts, lien or other right to which any party
                is at any time otherwise entitled (whether by operation of law,
                contract or otherwise).

(c)     CONSENT TO RECORDING.

        Each Party (i) consents to the recording of the telephone conversations
        of trading and marketing personnel of the Parties and their Affiliates
        in connection with this Agreement or any potential Transaction and (ii)
        agrees to obtain any necessary consent of, and give notice of such
        recording to, such personnel of it and its Affiliates.

(d)     MODIFICATION TO CROSS DEFAULT.

        Section 5(a)(vi) of this Agreement is hereby amended by the addition of
        the following subparagraph at the end thereof:



                Any event of default in accordance with the "Credit Agreement"
                or "Purchase Agreement", as defined below, shall constitute an
                Event of Default with respect to Party B. "Credit Agreement"
                means the


                                       24
<PAGE>   43

                Revolving and Term Loan Credit Facility dated as of September,
                1997 among the Trust, as borrower, the Lenders identified
                therein, and Bankers Trust N.A., as lead agent, as amended,
                supplemented or restated from time to time. "Purchase Agreement"
                shall mean the Purchase Agreement dated October 13, 1997 between
                Party B, Party A and UBS Securities (Portfolio) LLC; or

                Any FINANCIAL COVENANT DEFAULT as more particularly described in
                Exhibit A attached hereto and incorporated by reference herein.

(e)     ADDITIONAL AGREEMENTS.

                Party B further agrees that Party B will deliver to Party A at
                the address for notices to Party A provided in Part 4 of this
                Schedule each notice, document, certificate or other writing as
                Party B is obligated to furnish to any party in accordance with
                the terms of the Credit Agreement until all of both parties'
                obligations under this Agreement (whether absolute or
                contingent) are fully performed.

IN WITNESS WHEREOF the parties have executed this Schedule on the respective
dates specified below with effect from the date specified on the first page of
this document.


UNION BANK OF SWITZERLAND,                STARWOOD LODGING TRUST
LONDON BRANCH

BY:                                       BY:   /s/ RONALD C. BROWN
    -----------------------------             -----------------------------
NAME:                                     NAME:  RONALD C. BROWN
TITLE :                                   TITLE: SENIOR VICE PRESIDENT & CFO
DATE:                                     DATE:

                                          STARWOOD LODGING CORPORATION

BY:                                       BY:   /s/ ALAN M. SCHNAID
    -----------------------------             -----------------------------
NAME:                                     NAME:  ALAN M. SCHNAID
TITLE :                                   TITLE: VICE PRESIDENT AND
                                                 CORPORATE CONTROLLER
DATE:                                     DATE:



                                       25
<PAGE>   44

                Revolving and Term Loan Credit Facility dated as of September,
                1997 among the Trust, as borrower, the Lenders identified
                therein, and Bankers Trust N.A., as lead agent, as amended,
                supplemented or restated from time to time. "Purchase Agreement"
                shall mean the Purchase Agreement dated October 13, 1997 between
                Party B, Party A and UBS Securities (Portfolio) LLC; or

                Any FINANCIAL COVENANT DEFAULT as more particularly described in
                Exhibit A attached hereto and incorporated by reference herein.

(e)     ADDITIONAL AGREEMENTS.

                Party B further agrees that Party B will deliver to Party A at
                the address for notices to Party A provided in Part 4 of this
                Schedule each notice, document, certificate or other writing as
                Party B is obligated to furnish to any party in accordance with
                the terms of the Credit Agreement until all of both parties'
                obligations under this Agreement (whether absolute or
                contingent) are fully performed.

IN WITNESS WHEREOF the parties have executed this Schedule on the respective
dates specified below with effect from the date specified on the first page of
this document.


UNION BANK OF SWITZERLAND,                STARWOOD LODGING TRUST
LONDON BRANCH

BY:                                       BY:
    -----------------------------             ----------------------------
NAME:                                     NAME:
TITLE:                                    TITLE:
DATE:                                     DATE:

                                          STARWOOD LODGING CORPORATION

BY:                                       BY:
    -----------------------------             -----------------------------
NAME:                                     NAME:
TITLE:                                    TITLE:
DATE:                                     DATE:



                                       25
<PAGE>   45

                                                                       EXHIBIT A

 The Company's financial covenant compliance below is based on the Company's 12
months rolling financial data:


<TABLE>
<S>                             <C>
 FINANCIAL COVENANTS
 ($ MILLION WHERE APPROPRIATE)  Threshold

 Total Outstanding Debt/Total Value(1)

        9 Months after Closing  <  60%
                                -

        Thereafter              <  50%
                                -

 Secured Debt/Total Value(1)    < 30%

 Secured Recourse Debt          < 15% of Total Value, or < $300 mio. (greater of two)(3)
                                -                        -

 Unsecured Debt                 < Facility plus (greater of 15% of Total Value or $300 mio.)(4)
                                -

 Unencumbered Assets/Unsecured Debt

        9 Months after Closing  > 1.67x
                                -

        Thereafter              > 2.00x
                                -

 Unencumbered Assets plus Secured Recourse Assets/
 Unsecured Debt plus Secured Recourse Debt

        9 Months after Closing  > 1.63x
                                -

        Thereafter              > 2.00x
                                -

 EBITDA/Interest Expense

        9 Months after Closing  > 2.00x
                                -

        Thereafter              > 2.50x
                                -

 Unencumbered EBITDA/Unsecured Interest Expense

        9 Months after Closing  > 2.00x
                                -

        Thereafter              > 2.50x
                                -

 EBITDA/Fixed Charges(2)

        9 Months after Closing  > 2.00x
                                -

        Thereafter              > 2.25x
                                -

 Unencumbered EBITDA/Unsecured Fixed Charges(2)

        9 Months after Closing  > 2.00x
                                -

        Thereafter              > 2.25x
                                -

 Minmum Equity Value            > $591.5 mio. plus 75% of new equity
                                -

 Dividends (both Preferred and  < 85% of FFO or min. amount for REIT status(whichever greater)
 Common) re Starwood Lodging    -

 Dividends (both Preferred      < 85% of FFO or min. amount for REIT status (whichever greater)
 and Common) re the REIT        -
</TABLE>



                                       26
<PAGE>   46

<TABLE>
<S>                                        <C>
 FINANCIAL COVENANTS (CONTINUED)
 ($ MILLION WHERE APPROPRIATE)             Threshold

 Investment Restrictions

 a) Mortgage Notes/Total Value             < 10%
                                           -
 b) Unimproved Land/Total Value            < 2.5%
                                           -

 c) Hotel Stock Acquistions/Total Value    < 5%
                                           -
 d) Operation Costs of Hotels/Total Value  < 15%
                                           -
 e) Non-Hotel Assets/Total Value           < 2.5%
                                           -
 f) Lines a) through e)/Total Value        < 20%
                                           -
 g) Joint Ventures/Total Value             < 20%
                                           -
</TABLE>

1)      Total Value defined as the sum of (a) EBITDA capped at 10% for
        properties owned more than 4 qtrs; plus 95% of cost of subsequent
        acquisitions;(b) Mortgage Notes;(c) Available Cash; (d) Hotel
        Renovations; (e) Properties under Construction; (f) Unimproved Land; and
        (g) Eligible Management Assets.

2)      Fixed Charges include Interest Expense, Amortization and Preferred
        Dividends.

Any above capitalized term shall be defined pursuant to the Company's $ 1.2
billion unsecured credit line, evidenced by that certain Credit Agreement by and
between the Company as borrower and Bankers Trust as lead agent and dated as of
September 10, 1997.

The Financial Covenants will be tested quarterly, only at the end of each fiscal
quarter, during the term of the Transaction.




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