Comfort Inn 2014 Annual Report Download - page 121

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Table of Contents
approximately $90,000. During the years ended December 31, 2014 and 2013, the Company recorded approximately $90,000 and $15,000, respectively, in
rent expense associated with this lease.
Transactions with Unconsolidated Joint Ventures
In December 2012, the Company entered into a $19.5 million promissory note with Concord 46th NYC, LLC ("Concord"). The Company and Concord
are both members in a limited liability company whose sole business and purpose is to develop and operate a Cambria hotel & suites hotel in the borough of
Manhattan in New York City ("the Joint Venture"). The proceeds from the promissory note were utilized to partially finance the construction of the Cambria
Suites hotel by the Joint Venture.
The promissory note matures in two tranches with $9.5 million of the promissory note maturing during the year ended December 31, 2013 and the
remaining $10.0 million maturing on the fifth anniversary date of the promissory note. The promissory note bears interest at a fixed rate of interest which
increases from 6% to 8% after the completion of the hotel construction. Interest is payable quarterly during the hotel construction and due monthly,
thereafter. During the year ended December 31, 2013, the Company was repaid the first tranche of the promissory note or $9.5 million.
The promissory note is secured by a pledge of 100% of Concord's membership interests in the Joint Venture. In addition, the members of Concord have
unconditionally guaranteed and agreed to be fully and personally liable for the entire outstanding amount of the promissory note. If Concord defaults under
the terms of the promissory note, the Company may purchase Concord's interest in the Joint Venture for the sum of one dollar.
In July 2014, the Company sold a parcel of land to FBC-CHI Hotels, LLC ("FBC") for $6.5 million in exchange for cash and an equity investment in the
joint venture. No gain or loss was recognized on the sale. FBC is an unconsolidated limited liability company whose sole business and purpose is to develop
and operate Cambria hotel & suites hotels.
 
During the year ended December 31, 2014 the Company recorded a $1.8 million charge in SG&A and marketing and reservation expenses related to
salary and benefit continuation termination benefits provided to employees separating from service with the Company and remitted approximately $0.8
million of these benefits during the current year. At December 31, 2014, approximately $1.0 million of these salary and benefits continuation payments
remain to be remitted.
During the year ended December 31, 2013, the Company recorded a $1.7 million charge in SG&A and marketing and reservation expenses related to
salary and benefit continuation termination benefits provided to employees separating from service with the Company. During the years ended December 31,
2014 and 2013, the Company remitted $0.6 million and $1.1 million, respectively, related to these salary and benefit continuation benefits and at
December 31, 2014 all benefits incurred had been remitted.
During the year ended December 31, 2012 , the Company recorded a $2.9 million charge in SG&A and marketing and reservation expenses related to
salary and benefit continuation termination benefits provided to employees separating from service with the Company. During the years ended December 31,
2013 and 2012, the Company remitted $2.2 million and $0.7 million, respectively, related to the salary and benefit continuation benefits and at
December 31, 2013 all benefits incurred had been remitted.
At December 31, 2014, approximately $1.0 million of termination benefits remained to be paid and were included in current liabilities in the
Company’s consolidated financial statements.
 
The Company is not a party to any litigation other than litigation in the ordinary course of business. The Company's management and legal counsel do
not expect that the ultimate outcome of any of its currently ongoing legal proceedings, individually or collectively, will have a material adverse effect on the
Company's financial position, results of operations or cash flows.
Contingencies
On October 9, 2012, the Company entered into a limited payment guaranty with regards to a VIE's $18.0 million bank loan for the construction of a
hotel franchised under one of the Company's brands in the United States. Under the terms of the limited guaranty, the Company has agreed to guarantee
25.0% of the outstanding principal balance for a maximum exposure of $4.5 million and accrued and unpaid interest, as well as any unpaid expenses incurred
by the lender. The limited guaranty shall
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