8-K - SHO - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest eventreported): February 20, 2020

Sunstone

Hotel Investors, Inc.

(ExactName of Registrant as Specified in Its Charter)

Maryland	001-32319	20-1296886
(State or Other Jurisdictionof<br><br> <br>Incorporation or Organization)	(Commission File Number)	(I.R.S. Employer<br><br> <br>Identification Number)
200 Spectrum Center Drive, 21st Floor<br><br> <br><br><br> <br>Irvine, California	92618
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(Address of Principal Executive Offices)	(Zip Code)

(949) 330-4000

(Registrant’s telephone numberincluding area code)

N/A

(Former Name or Former Address, if ChangedSince Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant<br> to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange<br> Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value	SHO	New York Stock Exchange
Series E Cumulative Redeemable Preferred Stock, $0.01 par value	SHO.PRE	New York Stock Exchange
Series F Cumulative Redeemable Preferred Stock, $0.01 par value	SHO.PRF	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ¨

Item 8.01. Other Events.

On February 20, 2020, Sunstone Hotel Investors, Inc. (the “Company”) and its operating partnership, Sunstone Hotel Partnership, LLC, entered into amendments (collectively, the “Amendments”) to equity distribution agreements (collectively, the “Original Agreements”) with each of BofA Securities, Inc., J.P. Morgan Securities LLC and Wells Fargo Securities, LLC (together, the “Sales Agents”). The Original Agreements provided that the Company may sell the Company’s shares of common stock, par value $0.01 per share, having an aggregate offering price of up to $300,000,000 (the “Shares”), from time to time through any of the Sales Agents, acting as sales agent and/or principal. Under the Original Agreements, the Company has offered and sold Shares having an aggregate gross sales price of $124,532,115 through the date hereof. The Amendments, among other things, amend the Original Agreements to contemplate the sale of the remaining Shares pursuant to the Company’s new Registration Statement on Form S-3 (File No. 333-236538) and the related prospectus, dated February 20, 2020. The Company also filed a prospectus supplement, dated February 20, 2020, to the prospectus with the Securities and Exchange Commission in connection with the offer and sale of the Shares.

The foregoing description of the Amendments is not complete and is qualified in its entirety by reference to the entire Amendments, copies of which are attached hereto as Exhibits 1.1, 1.2 and 1.3 and incorporated herein by reference.

In connection with the filing of the Amendments, the Company is filing as Exhibit 5.1 to this Current Report on Form 8-K the opinion of its counsel, Venable LLP.

Forward-Looking Statements

This Current Report on Form 8-K may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections or other forward-looking information.

These forward-looking statements are subject to various risks and uncertainties, not all of which are known to the Company and many of which are beyond the Company’s control, which could cause actual results to differ materially from such statements. These risks and uncertainties include, but are not limited to, the state of the U.S. economy, supply and demand in the hotel industry and other factors as are described in greater detail in the Company’s filings with the Securities and Exchange Commission, including, without limitation, the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Item	9.01 Financial Statements and Exhibits
(d)	Exhibits
(d) The following exhibits are furnished herewith:
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EXHIBIT INDEX

Exhibit No.	Description
1.1	Amendment to Equity Distribution Agreement between the Company and BofA Securities, Inc., dated as of February 20, 2020.
1.2	Amendment to Equity Distribution Agreement between the Company and J.P. Morgan Securities LLC dated as of February 20, 2020.
1.3	Amendment to Equity Distribution Agreement between the Company and Wells Fargo Securities, LLC dated as of February 20, 2020.
5.1	Opinion of Venable LLP, dated February 20, 2020.
23.1	Consent of Venable LLP (included in Exhibit 5.1).
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Sunstone Hotel Investors, Inc.
Date: February 20, 2020	By:	/s/<br> Bryan A. Giglia
		Bryan A. Giglia<br><br> <br>Principal Financial Officer and Duly Authorized Officer

Exhibit 1.1

Amendment to Equity Distribution Agreement

Dated as of February 20, 2020

BofA Securities, Inc.

One Bryant Park

New York, New York 10036

Ladies and Gentlemen:

Reference is hereby made to the Equity Distribution Agreement, dated February 24, 2017 (the “Equity Distribution Agreement”), among Sunstone Hotel Investors, Inc., a Maryland corporation (the “Company”), Sunstone Hotel Partnership, LLC, a Delaware limited liability company (the “Operating Partnership”) and BofA Securities, Inc. (“BofA Securities”). Capitalized terms used herein and not defined have the respective meanings set forth in the Equity Distribution Agreement.

The Equity Distribution Agreement contemplates the offering and sale of Securities pursuant to the Company’s registration statement on Form S-3 (File No. 333-216233). The Company has filed with the Commission (i) an automatic shelf registration statement on Form S-3 (File No. 333-236538) relating to, among other things, the Company’s Common Stock (which new registration statement became effective upon the filing thereof with the Commission on the date hereof) and (ii) a prospectus supplement, dated February 20, 2020, relating to the Securities and an accompanying prospectus, dated February 20, 2020.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this agreement, and for other good and valuable consideration the receipt and sufficiency of which the parties hereto acknowledge, the parties hereto agree as follows:

The phrases “as of the date hereof” and “on the date hereof” as used in the Equity Distribution Agreement shall mean “as of February 24, 2017 and as of February 20, 2020”.
Merrill Lynch, Pierce Fenner & Smith Incorporated assigned its rights and obligations under the Equity Distribution Agreement to BofA Securities, Inc. (“BofA Securities”). References to “Merrill Lynch, Pierce, Fenner & Smith Incorporated” are hereby replaced with “BofA Securities, Inc.” and the defined term “Merrill Lynch” in the Equity Distribution Agreement refers to BofA Securities.
The second paragraph of Section 1 of the Equity Distribution Agreement shall be replaced in its entirety with the following:

“The Company has filed, in accordance with the provisions of the Securities Act, with the Commission an “automatic shelf registration statement” as defined under Rule 405 of the Securities Act on Form S-3 (File No. 333-236538), including a base prospectus, relating to certain securities, including the Securities to be issued from time to time by the Company, which incorporates by reference documents that the Company has filed or will file in accordance with the provisions of the Exchange Act. The Company has prepared a prospectus supplement specifically relating to the Securities (the “Prospectus Supplement”) to the base prospectus included as part of such registration statement. The Company shall furnish to BofA Securities, for use by BofA Securities, copies of the prospectus included as part of such registration statement, as supplemented by the Prospectus Supplement, relating to the Securities. The “Registration Statement”, as of any time, means such registration statement as amended by any post-effective amendments thereto at such time, including the exhibits and any schedules thereto at such time, the documents incorporated or deemed to be incorporated by reference therein at such time pursuant to Item 12 of Form S-3 under the Securities Act and the documents and information otherwise deemed to be a part thereof as of such time pursuant to Rule 430B of the Securities Act (“Rule 430B”); provided, however, that the “Registration Statement” without reference to a time means such registration statement as amended by any post-effective amendments thereto as of the time of the first contract of sale for the Securities, which time shall be considered the “new effective date” of the Registration Statement with respect to the Securities within the meaning of paragraph (f)(2) of Rule 430B, including the exhibits and schedules thereto at such time, the documents and information incorporated or deemed to be incorporated by reference therein at such time pursuant to Item 12 of Form S-3 under the Securities Act and the documents otherwise deemed to be a part thereof as of such time pursuant to Rule 430B. The base prospectus, including all documents incorporated therein by reference, included in the Registration Statement, as it may be supplemented by the Prospectus Supplement, in the form in which such prospectus and/or Prospectus Supplement have most recently been filed by the Company with the Commission pursuant to Rule 424(b) under the Securities Act, together with any Issuer Free Writing Prospectus (as defined below), is herein called the “Prospectus.” Any reference herein to the Registration Statement, the Prospectus or any amendment or supplement thereto shall be deemed to refer to and include the documents incorporated by reference therein, and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement or the Prospectus shall be deemed to refer to and include the filing after the execution hereof of any document with the Commission deemed to be incorporated by reference therein. For purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any amendment or supplement thereto shall be deemed to include any copy filed with the Commission pursuant to EDGAR.”

Section 5(a)(19) of the Equity Distribution Agreement shall be replaced in its entirety with the following:

“Obligations to Issue Securities. Except as disclosed in the Registration Statement or the Prospectus, and except for (A) the Common Stock, or other securities reserved for issuance in connection with the Company’s 2004 long-term incentive plan, as amended and restated effective November 1, 2019, and the Company’s senior management incentive plan described in the Prospectus, and (B) the shares of Common Stock issuable upon conversion of currently outstanding shares of the Preferred Stock, no shares of capital stock are reserved for any purpose. Except as described in the immediately preceding sentence, there are no outstanding (x) securities of the Company or any of its subsidiaries convertible into or exchangeable for (at the election of the holder thereof) any capital stock, partnership interests, membership interests or other equity interests, as the case may be, in the Company or any of its subsidiaries, (y) options, rights (preemptive or otherwise) or warrants to purchase or subscribe for shares of Common Stock or Preferred Stock or any other securities of the Company, or (z) obligations of the Company or any of its subsidiaries to issue any such securities, options, rights or warrants.”

Section 5(a)(45) of the Equity Distribution Agreement shall be replaced in its entirety with the following:

“(45) Proprietary Trading by BofA Securities. The Company and the Operating Partnership acknowledge and agree that BofA Securities has informed the Company and the Operating Partnership that BofA Securities may, to the extent permitted under the Securities Act and the Exchange Act, purchase and sell shares of Common Stock for its own account and for the account of its clients while this Agreement is in effect, and shall be under no obligation to purchase Securities on a principal basis pursuant to this Agreement, except as otherwise agreed by BofA Securities in a separate written agreement containing the terms and conditions of such sale.”

The following text is added as a new Section 5(a)(50) to the Equity Distribution Agreement:

“(50) Cybersecurity; Data Protection. Except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect or as otherwise disclosed in the Registration Statement and the Prospectus, (i) the Company and each of its subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases used to process, store, maintain and operate date, information and functions (collectively, “IT Systems”) are adequate for, and operate and perform in all material respects as required in connection with, the operation of the business of the Company and each of its subsidiaries as currently conducted, (ii) the Company and each of its subsidiaries have implemented and maintained controls, policies, procedures, and safeguards reasonably consistent with industry standards and practices, or as required by applicable regulatory standards, to maintain and protect their material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and data used in connection with their businesses, (iii) to the Company’s knowledge, there have been no breaches, violations, outages or unauthorized uses of or accesses to such IT Systems, except for those that (a) have been remedied without material cost or liability or (b) did not result in a duty to notify any regulator, and (iv) to the Company’s knowledge, the Company and each of its subsidiaries are presently in material compliance with all applicable laws, statutes and regulations and any judgments, orders or rules of any court, arbitrator or regulatory authority having lawful jurisdiction over the Company or any of its subsidiaries, and any contractual obligations relating to the privacy and security of such IT Systems.”

The following text is added as a new Section 23 of the Equity Distribution Agreement:

“SECTION 23. Recognition of the U.S. Special Resolution Regimes. In the event that BofA Securities is a Covered Entity that becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Agent of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States. In the event that BofA Securities is a Covered Entity or a BHC Act Affiliate of BofA Securities becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States. As used in this Agreement, (i) “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k), (ii) “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b), (iii) “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable, and (iv) “U.S. Special Resolution Regime” means each of (a) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (b) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.”

Section 6(b) of the Equity Distribution Agreement shall be replaced in its entirety with the following:

(b) Settlement of PlacementSecurities. Unless otherwise specified in the applicable Placement Notice (as amended by the corresponding Acceptance, if applicable), settlement for sales of Placement Securities will occur on the second (2nd) Trading Day (or such earlier day as is industry practice for regular-way trading) following the date on which such sales are made (each, a “Settlement Date”). The amount of proceeds to be delivered to the Company on a Settlement Date against receipt of the Placement Securities sold (the “Net Proceeds”) will be equal to the aggregate sales price received by BofA Securities at which such Placement Securities were sold, after deduction for (i) BofA Securities’ commission, discount or other compensation for such sales payable by the Company pursuant to Section 2 hereof, (ii) any other amounts due and payable by the Company to BofA Securities hereunder pursuant to Section 8(a) hereof, and (iii) any transaction fees imposed by any governmental or self-regulatory organization in respect of such sales.

The parties hereto agree that the deliverables described in Sections 7(q), 7(r) and 7(s) of the Equity Distribution Agreement shall be delivered to BofA Securities on or prior to the earlier of (i) the date that the Company delivers a Placement Notice to BofA Securities under the Equity Distribution Agreement or to any of the Alternative Placement Agents under any of the Alternative Distribution Agreements and (ii) the date after the date hereof that Securities are first sold pursuant to the terms of the Equity Distribution Agreement or any of the Alternative Distribution Agreements.
Section 14 of the Equity Distribution Agreement shall be replaced in its entirety with the following:

SECTION 14. Notices. Except as otherwise provided in this Agreement, all notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to BofA Securities shall be directed to BofA Securities at BofA Securities, Inc., One Bryant Park, New York, New York 10036, Attention: William Conkling and Christine Roemer, with a copy to: Fax: (212) 230-8730; notices to the Company shall be directed to it at Sunstone Hotel Investors, Inc., 120 Vantis, Suite 350, Aliso Viejo, California 92656, attention of Legal Department, Fax: (949) 330- 4090.

Exhibit B to the Equity Distribution Agreement shall be replaced in its entirety with Annex 1 hereto.

3
The parties hereto hereby further agree that the Equity Distribution Agreement, as amended hereby, shall remain in full force and effect.

THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE RELATING TO OR ARISING OUT OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS CHOICE OF LAW PROVISIONS.

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company and the Operating Partnership a counterpart hereof, whereupon this agreement, along with all counterparts, will become a binding agreement between the parties hereto in accordance with its terms.

[Remainder intentionally left blank]

Very truly yours,
SUNSTONE HOTEL INVESTORS, INC.
By:	/s/ Bryan A. Giglia
	Name: Bryan A. Giglia
	Title: Chief Financial Officer
SUNSTONE HOTEL PARTNERSHIP, LLC
By:	/s/ Bryan A. Giglia
	Name: Bryan A. Giglia
	Title: Chief Financial Officer
CONFIRMED AND ACCEPTED, as of the date first above<br>written:
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BofA SECURITIES,INC.
By:	/s/ William Conkling
	Name: William Conkling
	Title: Managing Director

Authorized Signatory

[Signature page to Amendment to EquityDistribution Agreement]

Exhibit 1.2

Amendment to Equity Distribution Agreement

Dated as of February 20, 2020

J.P. Morgan Securities LLC

383 Madison Avenue

New York, New York 10179

Ladies and Gentlemen:

Reference is hereby made to the Equity Distribution Agreement, dated February 24, 2017 (the “Equity Distribution Agreement”), among Sunstone Hotel Investors, Inc., a Maryland corporation (the “Company”), Sunstone Hotel Partnership, LLC, a Delaware limited liability company (the “Operating Partnership”) and J.P. Morgan Securities LLC (“J.P. Morgan Securities”). Capitalized terms used herein and not defined have the respective meanings set forth in the Equity Distribution Agreement.

The phrases “as of the date hereof” and “on the date hereof” as used in the Equity Distribution Agreement shall mean “as of February 24, 2017 and as of February 20, 2020”.
The second paragraph of Section 1 of the Equity Distribution Agreement shall be replaced in its entirety with the following:

“The Company has filed, in accordance with the provisions of the Securities Act, with the Commission an “automatic shelf registration statement” as defined under Rule 405 of the Securities Act on Form S-3 (File No. 333-236538), including a base prospectus, relating to certain securities, including the Securities to be issued from time to time by the Company, which incorporates by reference documents that the Company has filed or will file in accordance with the provisions of the Exchange Act. The Company has prepared a prospectus supplement specifically relating to the Securities (the “Prospectus Supplement”) to the base prospectus included as part of such registration statement. The Company shall furnish to J.P. Morgan Securities, for use by J.P. Morgan Securities, copies of the prospectus included as part of such registration statement, as supplemented by the Prospectus Supplement, relating to the Securities. The “Registration Statement”, as of any time, means such registration statement as amended by any post-effective amendments thereto at such time, including the exhibits and any schedules thereto at such time, the documents incorporated or deemed to be incorporated by reference therein at such time pursuant to Item 12 of Form S-3 under the Securities Act and the documents and information otherwise deemed to be a part thereof as of such time pursuant to Rule 430B of the Securities Act (“Rule 430B”); provided, however, that the “Registration Statement” without reference to a time means such registration statement as amended by any post-effective amendments thereto as of the time of the first contract of sale for the Securities, which time shall be considered the “new effective date” of the Registration Statement with respect to the Securities within the meaning of paragraph (f)(2) of Rule 430B, including the exhibits and schedules thereto at such time, the documents and information incorporated or deemed to be incorporated by reference therein at such time pursuant to Item 12 of Form S-3 under the Securities Act and the documents otherwise deemed to be a part thereof as of such time pursuant to Rule 430B. The base prospectus, including all documents incorporated therein by reference, included in the Registration Statement, as it may be supplemented by the Prospectus Supplement, in the form in which such prospectus and/or Prospectus Supplement have most recently been filed by the Company with the Commission pursuant to Rule 424(b) under the Securities Act, together with any Issuer Free Writing Prospectus (as defined below), is herein called the “Prospectus.” Any reference herein to the Registration Statement, the Prospectus or any amendment or supplement thereto shall be deemed to refer to and include the documents incorporated by reference therein, and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement or the Prospectus shall be deemed to refer to and include the filing after the execution hereof of any document with the Commission deemed to be incorporated by reference therein. For purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any amendment or supplement thereto shall be deemed to include any copy filed with the Commission pursuant to EDGAR.”

Section 5(a)(19) of the Equity Distribution Agreement shall be replaced in its entirety with the following:

Section 5(a)(45) of the Equity Distribution Agreement shall be replaced in its entirety with the following:

“(45) Proprietary Trading by J.P. Morgan Securities. The Company and the Operating Partnership acknowledge and agree that J.P. Morgan Securities has informed the Company and the Operating Partnership that J.P. Morgan Securities may, to the extent permitted under the Securities Act and the Exchange Act, purchase and sell shares of Common Stock for its own account and for the account of its clients while this Agreement is in effect, and shall be under no obligation to purchase Securities on a principal basis pursuant to this Agreement, except as otherwise agreed by J.P. Morgan Securities in a separate written agreement containing the terms and conditions of such sale.”

The following text is added as a new Section 5(a)(50) to the Equity Distribution Agreement:

The following text is added as a new Section 23 of the Equity Distribution Agreement:

“SECTION 23. Recognition of the U.S. Special Resolution Regimes. In the event that J.P. Morgan Securities is a Covered Entity that becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Agent of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States. In the event that J.P. Morgan Securities is a Covered Entity or a BHC Act Affiliate of J.P. Morgan Securities becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States. As used in this Agreement, (i) “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k), (ii) “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b), (iii) “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable, and (iv) “U.S. Special Resolution Regime” means each of (a) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (b) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.”

Section 6(b) of the Equity Distribution Agreement shall be replaced in its entirety with the following:

(b) Settlement of PlacementSecurities. Unless otherwise specified in the applicable Placement Notice (as amended by the corresponding Acceptance, if applicable), settlement for sales of Placement Securities will occur on the second (2nd) Trading Day (or such earlier day as is industry practice for regular-way trading) following the date on which such sales are made (each, a “Settlement Date”). The amount of proceeds to be delivered to the Company on a Settlement Date against receipt of the Placement Securities sold (the “Net Proceeds”) will be equal to the aggregate sales price received by J.P. Morgan Securities at which such Placement Securities were sold, after deduction for (i) J.P. Morgan Securities’ commission, discount or other compensation for such sales payable by the Company pursuant to Section 2 hereof, (ii) any other amounts due and payable by the Company to J.P. Morgan Securities hereunder pursuant to Section 8(a) hereof, and (iii) any transaction fees imposed by any governmental or self-regulatory organization in respect of such sales.

The parties hereto agree that the deliverables described in Sections 7(q), 7(r) and 7(s) of the Equity Distribution Agreement shall be delivered to J.P. Morgan Securities on or prior to the earlier of (i) the date that the Company delivers a Placement Notice to J.P. Morgan Securities under the Equity Distribution Agreement or to any of the Alternative Placement Agents under any of the Alternative Distribution Agreements and (ii) the date after the date hereof that Securities are first sold pursuant to the terms of the Equity Distribution Agreement or any of the Alternative Distribution Agreements.
The parties hereto hereby further agree that the Equity Distribution Agreement, as amended hereby, shall remain in full force and effect.

Very truly yours,
SUNSTONE HOTEL INVESTORS,<br> INC.
By:	/s/<br> Bryan A. Giglia
	Name: Bryan A. Giglia
	Title: Chief Financial Officer
SUNSTONE HOTEL PARTNERSHIP,<br> LLC
By:	/s/ Bryan<br> A. Giglia
	Name: Bryan A. Giglia
	Title: Chief Financial Officer
CONFIRMED<br> AND ACCEPTED, as of the date first above written:
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J.P.<br> Morgan Securities LLC
By:	/s/ Stephanie Little
	Name: Stephanie Little
	Title: Executive Director
	Authorized Signatory

[Signature page to Amendment to EquityDistribution Agreement]

Exhibit1.3

Amendment to Equity Distribution Agreement

Dated as of February 20, 2020

Wells Fargo Securities, LLC

500 West 33rd Street

New York, New York 10001

Attention: Equity Syndicate Department

Ladies and Gentlemen:

Reference is hereby made to the Equity Distribution Agreement, dated February 24, 2017 (the “Equity Distribution Agreement”), among Sunstone Hotel Investors, Inc., a Maryland corporation (the “Company”), Sunstone Hotel Partnership, LLC, a Delaware limited liability company (the “Operating Partnership”) and Wells Fargo Securities, LLC (“Wells Fargo Securities”). Capitalized terms used herein and not defined have the respective meanings set forth in the Equity Distribution Agreement.

The phrases “as of the date hereof” and “on the date hereof” as used in the Equity Distribution Agreement shall mean “as of February 24, 2017 and as of February 20, 2020”.
The second paragraph of Section 1 of the Equity Distribution Agreement shall be replaced in its entirety with the following:

“The Company has filed, in accordance with the provisions of the Securities Act, with the Commission an “automatic shelf registration statement” as defined under Rule 405 of the Securities Act on Form S-3 (File No. 333-236538), including a base prospectus, relating to certain securities, including the Securities to be issued from time to time by the Company, which incorporates by reference documents that the Company has filed or will file in accordance with the provisions of the Exchange Act. The Company has prepared a prospectus supplement specifically relating to the Securities (the “Prospectus Supplement”) to the base prospectus included as part of such registration statement. The Company shall furnish to Wells Fargo Securities, for use by Wells Fargo Securities, copies of the prospectus included as part of such registration statement, as supplemented by the Prospectus Supplement, relating to the Securities. The “Registration Statement”, as of any time, means such registration statement as amended by any post-effective amendments thereto at such time, including the exhibits and any schedules thereto at such time, the documents incorporated or deemed to be incorporated by reference therein at such time pursuant to Item 12 of Form S-3 under the Securities Act and the documents and information otherwise deemed to be a part thereof as of such time pursuant to Rule 430B of the Securities Act (“Rule 430B”); provided, however, that the “Registration Statement” without reference to a time means such registration statement as amended by any post-effective amendments thereto as of the time of the first contract of sale for the Securities, which time shall be considered the “new effective date” of the Registration Statement with respect to the Securities within the meaning of paragraph (f)(2) of Rule 430B, including the exhibits and schedules thereto at such time, the documents and information incorporated or deemed to be incorporated by reference therein at such time pursuant to Item 12 of Form S-3 under the Securities Act and the documents otherwise deemed to be a part thereof as of such time pursuant to Rule 430B. The base prospectus, including all documents incorporated therein by reference, included in the Registration Statement, as it may be supplemented by the Prospectus Supplement, in the form in which such prospectus and/or Prospectus Supplement have most recently been filed by the Company with the Commission pursuant to Rule 424(b) under the Securities Act, together with any Issuer Free Writing Prospectus (as defined below), is herein called the “Prospectus.” Any reference herein to the Registration Statement, the Prospectus or any amendment or supplement thereto shall be deemed to refer to and include the documents incorporated by reference therein, and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement or the Prospectus shall be deemed to refer to and include the filing after the execution hereof of any document with the Commission deemed to be incorporated by reference therein. For purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any amendment or supplement thereto shall be deemed to include any copy filed with the Commission pursuant to EDGAR.”

Section 5(a)(19) of the Equity Distribution Agreement shall be replaced in its entirety with the following:

Section 5(a)(45) of the Equity Distribution Agreement shall be replaced in its entirety with the following:

“(45) Proprietary Trading by Wells Fargo Securities. The Company and the Operating Partnership acknowledge and agree that Wells Fargo Securities has informed the Company and the Operating Partnership that Wells Fargo Securities may, to the extent permitted under the Securities Act and the Exchange Act, purchase and sell shares of Common Stock for its own account and for the account of its clients while this Agreement is in effect, and shall be under no obligation to purchase Securities on a principal basis pursuant to this Agreement, except as otherwise agreed by Wells Fargo Securities in a separate written agreement containing the terms and conditions of such sale.”

The following text is added as a new Section 5(a)(50) to the Equity Distribution Agreement:

The following text is added as a new Section 23 of the Equity Distribution Agreement:

“SECTION 23. Recognition of the U.S. Special Resolution Regimes. In the event that Wells Fargo Securities is a Covered Entity that becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Agent of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States. In the event that Wells Fargo Securities is a Covered Entity or a BHC Act Affiliate of Wells Fargo Securities becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States. As used in this Agreement, (i) “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k), (ii) “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b), (iii) “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable, and (iv) “U.S. Special Resolution Regime” means each of (a) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (b) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.”

Section 6(b) of the Equity Distribution Agreement shall be replaced in its entirety with the following:

“(b) Settlement of PlacementSecurities. Unless otherwise specified in the applicable Placement Notice (as amended by the corresponding Acceptance, if applicable), settlement for sales of Placement Securities will occur on the second (2nd) Trading Day (or such earlier day as is industry practice for regular-way trading) following the date on which such sales are made (each, a “Settlement Date”). The amount of proceeds to be delivered to the Company on a Settlement Date against receipt of the Placement Securities sold (the “Net Proceeds”) will be equal to the aggregate sales price received by Wells Fargo Securities at which such Placement Securities were sold, after deduction for (i) Wells Fargo Securities’ commission, discount or other compensation for such sales payable by the Company pursuant to Section 2 hereof, (ii) any other amounts due and payable by the Company to Wells Fargo Securities hereunder pursuant to Section 8(a) hereof, and (iii) any transaction fees imposed by any governmental or self-regulatory organization in respect of such sales.”

The parties hereto agree that the deliverables described in Sections 7(q), 7(r) and 7(s) of the Equity Distribution Agreement shall be delivered to Wells Fargo Securities on or prior to the earlier of (i) the date that the Company delivers a Placement Notice to Wells Fargo Securities under the Equity Distribution Agreement or to any of the Alternative Placement Agents under any of the Alternative Distribution Agreements and (ii) the date after the date hereof that Securities are first sold pursuant to the terms of the Equity Distribution Agreement or any of the Alternative Distribution Agreements.
Section 14 of the Equity Distribution Agreement shall be replaced in its entirety with the following:

SECTION 14. Notices. Except as otherwise provided in this Agreement, all notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to Wells Fargo Securities shall be directed to Wells Fargo Securities at Wells Fargo Securities, LLC, 500 West 33rd Street, New York, New York 10001, Fax: (212) 214-5918), Attention: Equity Syndicate Department; notices to the Company shall be directed to it at Sunstone Hotel Investors, Inc., 120 Vantis, Suite 350, Aliso Viejo, California 92656, attention of Legal Department, Fax: (949) 330- 4090.

The parties hereto hereby further agree that the Equity Distribution Agreement, as amended hereby, shall remain in full force and effect.

3

[Remainder intentionally left blank]

Very truly yours,
SUNSTONE HOTEL INVESTORS, INC.
By:	/s/ Bryan A. Giglia
	Name: Bryan A. Giglia
	Title: Chief Financial Officer
SUNSTONE HOTEL PARTNERSHIP, LLC
By:	/s/ Bryan A. Giglia
	Name: Bryan A. Giglia
	Title: Chief Financial Officer
CONFIRMED AND ACCEPTED,<br>as of the date first above written:
---	---
WELLS FARGOSECURITIES, LLC
By:	/s/ Elizabeth Alvarez
	Name: Elizabeth Alvarez
	Title: Managing Director

Authorized Signatory

[Signature page to Amendment to EquityDistribution Agreement]

Exhibit5.1

[LETTERHEAD OF VENABLE LLP]

February 20, 2020

Sunstone Hotel Investors, Inc.

200 Spectrum Center Drive, 21st Floor

Irvine, California 92618

Re: Registration Statement on Form S-3

Ladies and Gentlemen:

We have served as Maryland counsel to Sunstone Hotel Investors, Inc., a Maryland corporation (the “Company”), in connection with certain matters of Maryland law relating to the registration of shares (the “Shares”) of common stock, $0.01 par value per share, of the Company having a maximum aggregate offering price of $300,000,000, in at-the-market offerings, covered by the above-referenced Registration Statement, and all amendments thereto (collectively, the “Registration Statement”), filed by the Company with the United States Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”).

In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (hereinafter collectively referred to as the “Documents”):

1. The Registration Statement, in the form in which it was filed with the Commission under the Securities Act, and the related form of prospectus included therein and the supplement thereto, each in the form in which it was transmitted to the Commission under the Securities Act;

2. The charter of the Company (the “Charter”), certified by the State Department of Assessments and Taxation of Maryland (the “SDAT”);

3. The Second Amended and Restated Bylaws of the Company, as amended (the “Bylaws”), certified as of the date hereof by an officer of the Company;

4. A certificate of the SDAT as to the good standing of the Company, dated as of a recent date;

5. Resolutions adopted by the Board of Directors of the Company (the “Board”) relating to, among other matters, (i) the registration, sale and issuance of the Shares and (ii) the delegation to designated officers of the Company (the “Authorized Officers”) of the power to determine the number and price of the Shares and certain other matters in connection with the registration, sale and issuance of the Shares (collectively, the “Resolutions”), certified as of the date hereof by an officer of the Company;

Sunstone Hotel Investors, Inc.

February 20, 2020

Page 2

6. A certificate executed by an officer of the Company, dated as of the date hereof; and

7. Such other documents and matters as we have deemed necessary or appropriate to express the opinion set forth below, subject to the assumptions, limitations and qualifications stated herein.

In expressing the opinion set forth below, we have assumed the following:

1. Each individual executing any of the Documents, whether on behalf of such individual or another person, is legally competent to do so.

2. Each individual executing any of the Documents on behalf of a party (other than the Company) is duly authorized to do so.

3. Each of the parties (other than the Company) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and such party’s obligations set forth therein are legal, valid and binding and are enforceable in accordance with all stated terms.

4. All Documents submitted to us as originals are authentic. The form and content of all Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this opinion from the form and content of such Documents as executed and delivered. All Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All representations, warranties, statements and information contained in the Documents are true and complete. There has been no oral or written modification of or amendment to any of the Documents, and there has been no waiver of any provision of any of the Documents, by action or omission of the parties or otherwise.

5. The Shares will not be issued or transferred in violation of the restrictions on transfer and ownership contained in Article VII of the Charter.

6. Upon the issuance of any Shares, the total number of shares of Common Stock issued and outstanding will not exceed the total number of shares of Common Stock that the Company is then authorized to issue under the Charter.

7. Certain terms of the Shares to be issued by the Company from time to time will be authorized and approved by the Board or a duly authorized committee thereof, or by the Authorized Officers, in accordance with the Maryland General Corporation Law, the Charter, the

Bylaws and the Resolutions (with such approvals referred to hereinafter as the “Corporate Proceedings”) prior to the issuance thereof.

Sunstone Hotel Investors, Inc.

February 20, 2020

Page 3

Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that:

1. The Company is a corporation duly incorporated and validly existing under and by virtue of the laws of the State of Maryland and is in good standing with the SDAT.

2. Upon completion of all Corporate Proceedings relating to the Shares, the issuance of the Shares will be duly authorized and, when and if issued and delivered against payment therefor in accordance with the Resolutions, the Registration Statement and any other resolutions of the Board or a duly authorized committee thereof relating thereto, the Shares will be validly issued, fully paid and nonassessable.

The foregoing opinion is limited to the laws of the State of Maryland and we do not express any opinion herein concerning federal law or the laws of any state. We express no opinion as to the applicability or effect of federal or state securities laws, including the securities laws of the State of Maryland, or as to federal or state laws regarding fraudulent transfers. To the extent that any matter as to which our opinion is expressed herein would be governed by the laws of any jurisdiction other than the State of Maryland, we do not express any opinion on such matter. The opinion expressed herein is subject to the effect of any judicial decision which may permit the introduction of parol evidence to modify the terms or the interpretation of agreements.

The opinion expressed herein is limited to the matters specifically set forth herein and no other opinion shall be inferred beyond the matters expressly stated. We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof.

This opinion is being furnished to you for submission to the Commission as an exhibit to the Company’s Current Report on Form 8-K (the “Current Report”), which is incorporated by reference in the Registration Statement. We hereby consent to the filing of this opinion as an exhibit to the Current Report and the said incorporation by reference and to the use of the name of our firm therein. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act.

Very truly yours,

/s/ Venable LLP