FRANCHISE DISCLOSURE DOCUMENT HAMPTON INNS ...

a preliminary injunction, enjoining Hilton Inns from terminating the Woodbridge Hilton Franchise
License Agreement, but denied plaintiffs’ motion for a preliminary injunction seeking to enjoin the
termination of the Promus Homewood Suites Franchise License Agreement. The court has also
granted the motion to intervene filed by plaintiffs’ lender, LaSalle Bank N.A. The parties entered into a
Settlement Agreement in 2009 whereby (i) HLT Existing Franchise Holding LLC, as successor in
interest to the named defendants issued a cure letter with regard to the Hilton Woodbridge,
Metroplaza Two, the Lender and the Hilton parties released all claims against each other, and
dismissed all actions involving Metroplaza Two (including dissolving the preliminary injunction) with
prejudice; and (ii) all claims involving Metroplaza III were dismissed without prejudice, with mutual
releases effective if Metroplaza III applied to Homewood Suites Franchise LLC within 90 days for a
new Homewood Suites Franchise License Agreement and the application was accepted. The
application was made and approved, and all claims are released,
HLT Existing Franchise Holding, LLC v. Richfield Hotel Associates Limited Partnership, Richfield Inn
Limited Partnership, Palsco, Inc., Caps, General Partnership, Thomas W. LaSalle, Arthur J. Petrie,
William L. Brusman, Cynthia Sherman, and Susan Matzke United States District Court for the
Western District of Tennessee, Docket No. 2:08-cv-02372-tmp.
On or about May 8, 2008, HLT Existing Franchise Holding LLC (“HLT Existing”), as successor-ininterest
to Promus Hotels, Inc., filed this action against a former franchisee and its general partners
for collection of $233,325.36 in past due amounts under an expired license agreement, plus interest,
attorney fees and costs. Defendants filed counterclaims against HLT Existing for breach of contract,
breach of covenant of good faith and fair dealing, breach of fiduciary duty, conversion, and tortious
interference with contractual relationships and business advantage. All of the counterclaims related to
alleged wrongful use by Promus of customer lists and goodwill of the former franchisee. HLT Existing
denied liability under the counterclaims. The parties entered into a confidential Settlement Agreement
whereby the defendants paid $165,000 in damages, plus court cost of $500 and the parties mutually
dismissed all claims with prejudice. The Judgment of Dismissal with Prejudice was entered February
9, 2009.
C. CONCLUDED ACTIONS – INVOLVING HILTON WORLDWIDE (F/K/A HHC)
Majestic Resorts, Inc. v. HPP Hotels USA, Inc. (f/k/a Conrad Hotels USA, Inc.), Hilton Hotels
Corporation, and Conrad Hospitality, LLC, (JAMS Arbitration No. 1260000590).
On or about May 4, 2007, Majestic Resorts, Inc. (“Majestic”) initiated an arbitration against HPP
Hotels USA, Inc. (f/k/a Conrad Hotels USA) (“HPP Hotels”), HHC (now Hilton Worldwide), and Conrad
Hospitality LLC (collectively, “the Conrad Parties”) asserting claims for breach of contract, breach of
the duty of good faith and fair dealing, promissory estoppel, and intentional and/or negligent
misrepresentation. The arbitration was filed after Conrad terminated the management agreement for
a proposed Conrad condominium-hotel and Waldorf Astoria residences in Las Vegas when Majestic
repeatedly failed to meet project development deadlines. On March 6, 2008 the arbitration panel
issued a unanimous award in favor of the Conrad Parties and awarding the Conrad Parties
$1,154,601.28 in costs and attorneys’ fees. The arbitration award was confirmed in its entirety on
June 10, 2008 by the District Court of Clark County, Nevada, which also awarded the Conrad Parties
their attorneys’ fees incurred in confirming the award. Majestic appealed to the Nevada Supreme
Court. On February 26, 2010, the Nevada Supreme Court affirmed the District Court’s decision. The
time for filing a rehearing has expired.
{000011-999987 00174938.DOC; 2}
March 31, 2011 Hampton
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