Exhibit 10.32

 

FIRST AMENDMENT TO RESTATED NONCOMPETITION AGREEMENT

 

THIS FIRST AMENDMENT TO RESTATED NONCOMPETITION AGREEMENT (this “Amendment”) is
made and entered into as of 28th day of December, 1998 by and among Marriott
International, Inc., a Delaware corporation (“Marriott International”), Host
Marriott Corporation, a Delaware corporation (“Host Marriott”), and Crestline
Capital Corporation, a Maryland corporation (“Crestline”).

 

RECITALS

 

WHEREAS, Host Marriott and Marriott International are parties that certain
Restated Noncompetition Agreement dated March 3, 1998 (the “1998 Agreement”);
and

 

WHEREAS, Host Marriott has determined that it will restructure its business
operations so as to qualify as a real estate investment trust for federal income
tax purposes, and, in connection therewith, on or about December 29, 1998, (i)
Host Marriott will distribute approximately 93.6% of the outstanding common
stock of Crestline to or on behalf of the stockholders of Host Marriott (the
“Crestline Distribution”) and will contribute the remaining 6.4% of such
Crestline common stock to Host Marriott, L.P. for delivery to The Blackstone
Group and certain affiliated entities thereof (or for return to Crestline if not
delivered to The Blackstone Group and its affiliated entities) and (ii) Host
Marriott will merge (the “Merger”) into HMC Merger Corporation, a Maryland
corporation (“Host REIT”); and

 

WHEREAS, the parties hereto desire to amend the 1998 Agreement in connection
with the Crestline Distribution and the Merger.

 

NOW, THEREFORE, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties intending to be legally bound agree as follows:

 

1. Crestline is hereby added as a party to the 1998 Agreement and shall be
subject to the same restrictions, obligations and benefits thereunder as Host
Marriott, it being further understood that all references to “Host Marriott” in
the 1998 Agreement (other than in the definition of “Host Marriott” in Article
One, the third sentence of the definition of “Affiliates” under Article One and
the last sentence of Section 4.1.C as set forth in Paragraph 5 below, which, in
each of the foregoing cases, shall mean only Host Marriott Corporation and its
Subsidiaries and Affiliates) shall mean each of Host Marriott and Crestline as
if each of the foregoing

 

--------------------------------------------------------------------------------

entities were parties to a separate agreement with MI having terms identical to
the 1998 Agreement as amended by this Amendment, subject to the limitations set
forth in Paragraph 5 below.

 

2. The third sentence of the definition of “Affiliates” under Article One is
hereby deleted and replaced in its entirety with the following:

 

Notwithstanding the foregoing, (i) Host Marriott’s Affiliates shall not include
Marriott International, Crestline or their respective Subsidiaries or
Affiliates, (ii) Marriott International’s Affiliates shall not include Host
Marriott, Crestline or their respective Subsidiaries or Affiliates, and (iii)
Crestline’s Affiliates shall not include Marriott International, Host Marriott
or their respective Subsidiaries or Affiliates.

 

3. The following definition shall be added to Article One after the definition
of “Conference Centers”:

 

“Crestline” means Crestline Capital Corporation, a Maryland corporation.

 

4. The following sentence shall be added to the definition of “Hotel Management
Business” at the end thereof.”

 

For purposes of this definition, it is expressly understood and acknowledged
that, with respect to the activities of any Person who is the lessee of
property, the terms “operate” and “operating” do not include the terms “lease”
and “leasing,” respectively, where such Person has engaged another Person who is
not an Affiliate of such Person to manage or operate, within the meaning of the
term “Hotel Management Business” set forth herein, the leased property.

 

5. Section 4.1.C of the 1998 Agreement is hereby amended by adding the following
sentence at the end thereof:

 

It is hereby understood for purposes of this Section 4.1.C that (i) in no event
shall Host Marriott and Crestline be permitted, on an aggregate basis, to
operate or franchise as franchisor more than ten (10) hotel properties under a
Common Name or to contract with a third party manager for operation of the
greater of (a) ten (10) hotel properties operated by such manager under a Common
Name or (b) twenty-five percent (25%) of the system operated by such manager
under a Common Name and (ii) each hotel owned by Host Marriott which is leased
to Crestline shall count as one hotel property for purpose of determining
compliance with the foregoing clause.

 

2

--------------------------------------------------------------------------------

6. The following language shall be added to the end of Section 5.11:

 

To Crestline:

 

Crestline Capital Corporation

10400 Fernwood Road

Bethesda, Maryland 20817

Attention: General Counsel

FAX NO. 240/694-2040

 

7. The following sentence shall be added to the end of Section 5.13:

 

It is further understood and agreed that the obligations of each of Host
Marriott and Crestline under this Agreement, and any liability arising
therefrom, shall be several and not joint,

 

8. The parties acknowledge that, upon the effectiveness of the Merger, Host REIT
shall succeed to all of the rights and obligations of Host Marriott under the
1998 Agreement.

 

9. Except as specifically amended hereby, the 1998 Agreement shall remain
unchanged and in full force and effect.

 

10. This Amendment shall be effective as of the effective date of the Crestline
Distribution.

 

11. This Amendment may be executed in any number of counterparts, which, when
taken together, shall constitute a single binding instrument.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered, all as of the day and year first above written.

 

MARRIOTT INTERNATIONAL, INC.

By:

 

/s/    Myron D. Wallace

--------------------------------------------------------------------------------

   

Name: Myron D. Wallace

    Title: Vice President

 

3

--------------------------------------------------------------------------------

HOST MARRIOTT CORPORATION

By:

 

/s/    Christopher G. Townsend

--------------------------------------------------------------------------------

   

Name: Christopher G. Townsend

   

Title: Vice President

 

CRESTLINE CAPITAL CORPORATION

By:

 

/s/    Bruce Wardinski

--------------------------------------------------------------------------------

   

Name: Bruce Wardinski

   

Title: President and CEO

 

 

The undersigned is executing this Amendment solely for the purpose of
acknowledging and consenting to the provisions of paragraph 8 above.

 

HMC MERGER CORPORATION

By:

 

/s/    Christopher G. Townsend

--------------------------------------------------------------------------------

   

Name: Christopher G. Townsend

   

Title: Vice President and Secretary

 

4