ELECTION NOT TO PROCEED WITH INCORPORATION MERGER. Notwithstanding anything in this Agreement to the contrary, if after the date of this Agreement Starwood reasonably determines that the consummation of the Incorporation Merger would have an adverse impact on Starwood, Starwood may elect not to proceed with the Incorporation Merger and Starwood shall provide written notice to Advisor of any such determination. In such event, (i) all references in this Agreement to "NEW STARWOOD" shall be deemed to refer to and become references to Starwood and all references to shares of common stock of New Starwood shall be deemed to refer to and become references to common shares of beneficial interest of Starwood in each case MUTATIS MUTANDIS and (ii) Starwood shall submit to its shareholders a proposal to amend its declaration of trust and bylaws in the manner provided by Maryland law substantially to conform such declaration of trust and bylaws, to the extent permitted by Maryland law governing Maryland real estate investment trusts, to the forms of charter and bylaws of New Starwood, respectively, set forth as Exhibits J and K to the Merger Agreement, including without limitation, to eliminate the Starwood Class B Common Shares and cause the conversion of all Starwood Class B Common Shares into Class A Common Shares of beneficial interest of Starwood, $1.00 par value per share, ("STARWOOD CLASS A COMMON SHARES") on the basis of 49 Starwood Class B Common Shares for one Starwood Class A Common Share. Starwood and Advisor agree to cooperate and work together in good faith to amend and restate this Agreement to give effect to any determination made by Starwood in accordance with this Section 1.7.
