Hotel Investment Contract

I. Introduction

This Hotel Investment Contract (the "Contract") is entered into as of [Date of Execution] by and between:

[Second Party], a leading investment firm specializing in hospitality ventures, organized and existing under the laws of [Jurisdiction], with its principal place of business at [Second Party Address] (hereinafter referred to as the "Investor"),

and

[Your Company Name], a reputable hotel management company with extensive experience in hotel operations, organized and existing under the laws of [Jurisdiction], with its principal place of business at [Your Company Address] (hereinafter referred to as the "Owner").

II. Definitions

A. "Hotel Property" shall refer to the upscale boutique hotel located at [Address], featuring [00] rooms, [00] suites, [Amenities], and [Features].

B. "Investment Amount" shall mean the total capital contribution committed by the Investor towards the development and operation of the Hotel Property, totaling $[000].

C. "Management Agreement" refers to the agreement between the Owner and [Second Party] governing the management and operation of the Hotel Property.

III. Investment Overview

A. Description of the Hotel Property

The Hotel Property boasts a prime location in [City/Region], renowned for its [Features]. With its elegant design, luxurious amenities, and personalized service, the Hotel Property aims to cater to discerning travelers seeking a unique and memorable experience.

B. Investment Amount

The Investor agrees to provide a total investment amount of $[000] towards the development and operation of the Hotel Property. This investment will cover various expenses, including construction costs, pre-opening marketing initiatives, working capital, and contingency funds.

C. Investment Structure

The investment shall be structured as a combination of equity investment and debt financing, with the Investor contributing $[000] as equity and arranging $[000] as debt financing through third-party lenders. The terms of the debt financing shall be mutually agreed upon by the parties and documented in a separate agreement.

D. Funding Schedule

The Investment Amount shall be disbursed in multiple tranches based on project milestones and funding requirements. The initial disbursement of $[000] shall be made upon execution of this Contract, followed by subsequent disbursements as outlined in the Funding Schedule attached as Appendix A.

E. Use of Funds

The funds provided by the Investor shall be utilized for various purposes essential for the successful development and operation of the Hotel Property. These include but are not limited to construction and renovation costs, procurement of furniture, fixtures, and equipment (FF&E), pre-opening marketing campaigns, hiring and training of staff, working capital requirements, and any other expenses necessary to ensure the timely completion and successful launch of the Hotel Property.

IV. Rights and Obligations of the Parties

A. Rights and Responsibilities of the Investor

1. The Investor shall have the right to appoint a representative to the Hotel Property's advisory board with full voting privileges, providing input on major decisions related to the development and operation of the Hotel Property.

2. The Investor shall diligently monitor the progress of the project, ensuring adherence to the agreed-upon timeline and budget, and providing necessary support to mitigate any risks or challenges encountered during the development phase.

3. The Investor shall have the right to review and approve the annual budget, business plan, and marketing strategy proposed by the Owner/Management Company, ensuring alignment with the investment objectives and maximizing returns on investment.

B. Rights and Responsibilities of the Owner

1. The Owner shall retain operational control of the Hotel Property, overseeing day-to-day operations, guest services, and strategic decision-making.

2. The Owner shall maintain the Hotel Property in accordance with industry standards and ensure compliance with all applicable laws, regulations, and licensing requirements.

3. The Owner shall provide regular updates and reports to the Investor, including financial statements, operational performance metrics, and any material developments affecting the Hotel Property.

C. Management and Operational Control

1. The day-to-day management and operation of the Hotel Property shall be the responsibility of the Owner/Management Company, which shall exercise reasonable care and diligence in carrying out its duties.

2. The Owner/Management Company shall appoint a qualified hotel manager to oversee the daily operations of the Hotel Property, ensuring the delivery of exceptional guest experiences and adherence to brand standards (if applicable).

3. The Investor shall have the right to review and approve key management decisions, including significant capital expenditures, changes to operational policies, and major marketing initiatives.

D. Decision-Making Procedures

1. Major decisions affecting the development and operation of the Hotel Property, including changes to the project scope, budget revisions exceeding $[000], and alterations to the brand affiliation (if applicable), shall require the mutual consent of both parties.

2. In the event of a disagreement on a significant decision, the parties shall endeavor to resolve the issue amicably through good-faith negotiations, seeking to achieve consensus in the best interests of the overall project.

E. Reporting Requirements

1. The Owner/Management Company shall provide comprehensive monthly financial reports, including profit and loss statements, balance sheets, and cash flow projections, to the Investor within [00] days following the end of each reporting period.

2. In addition to financial reports, the Owner/Management Company shall furnish operational updates, occupancy statistics, guest satisfaction scores, and marketing performance metrics to the Investor on a monthly basis, facilitating transparency and informed decision-making.

V. Financial Provisions

A. Profit-Sharing Arrangements

1. The parties agree to a profit-sharing arrangement whereby [00]% of the net operating income (NOI) generated by the Hotel Property shall be distributed to the Investor on a quarterly basis.

2. Net operating income shall be calculated as gross revenue minus operating expenses, including but not limited to payroll, utilities, maintenance, marketing, and management fees.

B. Distribution of Profits and Losses

1. Profits shall be distributed to the Investor within [00] days following the end of each fiscal quarter, subject to any applicable withholding taxes.

2. In the event of a net loss incurred by the Hotel Property, the Investor shall bear its proportionate share of the loss based on its ownership interest, as outlined in Section III.C.

C. Calculation of Returns

1. The Investor's return on investment (ROI) shall be calculated based on the total amount invested and the net profits generated by the Hotel Property over the investment term.

2. The parties acknowledge that ROI projections are subject to various factors, including market conditions, operational performance, and unforeseen events, and therefore actual returns may vary from projections.

D. Escrow and Disbursement Procedures

1. All funds received from the Investor shall be held in a designated escrow account until disbursed for approved project expenses in accordance with the Funding Schedule.

2. Disbursements shall be made by the escrow agent upon receipt of written authorization from both parties or as otherwise specified in this Contract.

E. Tax Considerations

1. The parties shall consult with their respective tax advisors to ensure compliance with all applicable tax laws and regulations governing the investment, including but not limited to income tax, capital gains tax, and withholding tax obligations.

2. The Investor shall be responsible for reporting its share of income or losses from the Hotel Property on its tax returns and paying any taxes due thereon.

VI. Performance Metrics and Milestones

A. Performance Targets

1. Key performance indicators (KPIs) shall be established to measure the financial and operational performance of the Hotel Property, including occupancy rates, average daily rate (ADR), revenue per available room (RevPAR), guest satisfaction scores, and employee retention rates.

2. Performance targets shall be set annually in consultation with the Investor, with a focus on achieving sustainable growth and maximizing profitability.

B. Milestone Payments (if applicable)

1. The Investor may be entitled to receive milestone payments upon the achievement of predetermined project milestones, such as completion of construction, attainment of target occupancy levels, or achievement of certain financial benchmarks.

2. Milestone payments shall be calculated based on the agreed-upon milestone criteria and disbursed within [00] days following the milestone achievement.

VII. Termination Provisions

A. Termination Events

1. This Contract may be terminated by either party upon the occurrence of a material breach of any provision herein by the other party, subject to the cure period specified in Section VII.B.

2. Additionally, either party may terminate this Contract by providing [00] days' written notice to the other party in the event of bankruptcy, insolvency, or dissolution of the other party.

B. Termination Procedures

1. In the event of termination due to a material breach, the non-breaching party shall provide written notice specifying the nature of the breach and a [00]-day cure period during which the breaching party may remedy the breach.

2. If the breach is not cured within the specified cure period, the non-breaching party may terminate this Contract by providing written notice of termination to the breaching party, effective immediately upon receipt.

C. Consequences of Termination

1. Upon termination of this Contract, the parties shall cooperate in winding down the affairs of the Hotel Property, including the orderly transfer of management responsibilities, settlement of outstanding liabilities, and distribution of remaining assets.

2. Any termination of this Contract shall not relieve the parties of their obligations accrued prior to termination, including payment obligations, indemnification obligations, and confidentiality obligations, which shall survive termination.

VIII. Dispute Resolution

A. Dispute Resolution Mechanisms

1. Any disputes arising out of or relating to this Contract shall be resolved amicably through good-faith negotiations between the parties.

2. If the parties are unable to resolve the dispute informally, either party may initiate mediation proceedings by providing written notice to the other party, requesting mediation by a neutral third party mediator agreed upon by both parties.

B. Governing Law and Jurisdiction

1. This Contract shall be governed by and construed in accordance with the laws of [Jurisdiction], without regard to its conflict of law principles.

2. Any legal action or proceeding arising out of or relating to this Contract shall be brought exclusively in the courts of [Jurisdiction], and the parties hereby consent to the jurisdiction of such courts for such purposes.

IX. Confidentiality and Non-Disclosure

A. Confidentiality Obligations

1. The parties acknowledge that they may have access to confidential and proprietary information of the other party, including but not limited to financial data, business plans, and trade secrets.

2. Each party agrees to maintain the confidentiality of such information and not to disclose it to any third party without the prior written consent of the disclosing party, except as required by law.

B. Non-Disclosure of Proprietary Information

1. The parties agree not to use any confidential information disclosed by the other party for any purpose other than the performance of their obligations under this Contract.

2. Upon termination of this Contract, each party shall return or destroy all confidential information received from the other party and provide written certification of such action upon request.

X. Indemnification

A. Indemnification of Parties

Each party agrees to indemnify, defend, and hold harmless the other party, its officers, directors, employees, and agents from and against any and all claims, damages, losses, liabilities, and expenses arising out of or resulting from any breach of this Contract or any negligent or wrongful act or omission of the indemnifying party.

B. Limitation of Liability

In no event shall either party be liable to the other party for any indirect, incidental, consequential, special, or punitive damages, including but not limited to lost profits, arising out of or relating to this Contract, regardless of the form of action, whether in contract, tort, or otherwise.

XI. Miscellaneous Provisions

A. Entire Agreement Clause

This Contract constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, whether written or oral, relating to such subject matter.

B. Amendment and Waiver

Any amendment to this Contract must be made in writing and signed by both parties. The failure of either party to enforce any provision of this Contract shall not be deemed a waiver of such provision or any other provision herein.

C. Severability

If any provision of this Contract is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such provision shall be severed from this Contract, and the remaining provisions shall remain in full force and effect.

D. Counterparts

This Contract has the option to be executed in several counterpart copies, with each counterpart being considered an original document. Nevertheless, when all the counterpart copies are combined, they shall constitute a single document, effectively working as the same legal instrument.

E. Notices

Any notices or communications required or permitted under this Contract shall be in writing and shall be deemed to have been duly given when delivered personally or sent by certified or registered mail, postage prepaid, or by reputable courier service, to the addresses provided in the preamble of this Contract.

XII. Signatures

A. Signature Blocks for the Parties

IN WITNESS WHEREOF, the parties hereto have executed this Hotel Investment Contract as of the date first above written.

[Name]

[Title]

[Second Party]

[Date]

[Your Name]

[Your Job Title]

[Your Company Name]

[Date]

B. Execution Date

This Hotel Investment Contract is hereby executed and effective as of the date first above written.

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