Exhibit 10.7


 


JOINT VENTURE AGREEMENT


 


BETWEEN


 


IAN SCHRAGER HOTELS LLC


 


AND


 


CHODOROW VENTURES LLC


 


 


EFFECTIVE AS OF SEPTEMBER 7, 1999


 





















 


	
  ARTICLE 1 DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 PURPOSES AND TERM

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Purposes

  	
   

  
	
   

  	
   

  	
   

  
	
  2.2

  	
  Term of Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 OPERATIONS AT
  SCHRAGER HOTELS

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Agreements with Hotel Owner

  	
   

  
	
   

  	
   

  	
   

  
	
  3.2

  	
  Initial Venture Operations

  	
   

  
	
   

  	
   

  	
   

  
	
  3.3

  	
  Future Venture Operations

  	
   

  
	
   

  	
   

  	
   

  
	
  3.4

  	
  Limitations Regarding Bar Operations

  	
   

  
	
   

  	
   

  	
   

  
	
  3.5

  	
  Right to Purchase Existing Venturer B Restaurants

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 VENTURERS

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Venturers

  	
   

  
	
   

  	
   

  	
   

  
	
  4.2

  	
  Additional Venturers

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 ACTION OF
  VENTURERS AND COMPENSATION

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Action of Venturers

  	
   

  
	
   

  	
   

  	
   

  
	
  5.2

  	
  Compensation

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6
  REPRESENTATIONS AND COVENANTS OF VENTURER B

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Representations of Venturer B

  	
   

  
	
   

  	
   

  	
   

  
	
  6.2

  	
  Restricted Activities

  	
   

  
	
   

  	
   

  	
   

  
	
  6.3

  	
  Efforts by Venturer B

  	
   

  
	
   

  	
   

  	
   

  
	
  6.4

  	
  No Assignment

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 GENERAL PROVISIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  7.2

  	
  Further Assurances

  	
   

  
	
   

  	
   

  	
   

  
	
  7.3

  	
  Binding Effect

  	
   

  
	
   

  	
   

  	
   

  
	
  7.4

  	
  Counterparts

  	
   

  
	
   

  	
   

  	
   

  
	
  7.5

  	
  Law Governing

  	
   

  
	
   

  	
   

  	
   

  
	
  7.6

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  7.7

  	
  Integration; Amendment

  	
   

  
	
   

  	
   

  	
   

  
	
  7.8

  	
  Captions

  	
   

  



 


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  7.9

  	
  Indulgences, Etc

  	
   

  
	
   

  	
   

  	
   

  
	
  7.10

  	
  Waiver of Jury Trial

  	
   

  
	
   

  	
   

  	
   

  
	
  7.11

  	
  Consent to Jurisdiction

  	
   

  
	
   

  	
   

  	
   

  
	
  7.12

  	
  No Personal Liability

  	
   

  
	
   

  	
   

  	
   

  
	
  7.13

  	
  Conflict

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 BUY-SELL

  	
   

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  The Buy-Sell Right

  	
   

  
	
   

  	
   

  	
   

  
	
  8.2

  	
  Closing Procedure

  	
   

  
	
   

  	
   

  	
   

  
	
  8.3

  	
  Failure to Close by Seller

  	
   

  
	
   

  	
   

  	
   

  
	
  8.4

  	
  Failure to Close by Purchaser

  	
   

  



 


ii





















 


JOINT VENTURE AGREEMENT


 


This JOINT VENTURE
AGREEMENT (this “Agreement”) is effective as of September 7, 1999 by and
between Ian Schrager Hotels LLC, a New York limited liability company (“Venturer
A”) and Chodorow Ventures LLC, a Delaware limited liability company (“Venturer
B”).


 


WHEREAS, Venturer A is
engaged in the business of acquiring, owning and operating a group of hotels
located in various cities in the United States and abroad;


 


WHEREAS, Venturer B is
engaged in the business of acquiring, owning and operating restaurants and other
food and beverage operations, including operations at certain hotels of
Venturer A; and


 


WHEREAS, Venturer A and
Venturer B desire to enter into this Agreement in order to jointly establish,
own, operate and/or manage restaurants and bars and other food and beverage
operations, in Schrager Hotels (as hereinafter defined) and elsewhere, subject
to the terms and conditions set forth in this Agreement;


 


NOW, THEREFORE, in
consideration of the mutual covenants herein contained, and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:


 


ARTICLE 1



DEFINITIONS


 


The defined terms used in
this Agreement shall have the meanings specified below:


 


1.1                                 “Affiliate” of a specified Person means a Person that,
directly or indirectly, controls, is controlled by, or is under common control
with, the specified Person.  For this
purpose, “control” shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise, and “controlled” and “common control” shall have meanings
correlative thereto.


 


1.2                                 “Agreement” means this Joint Venture Agreement, as it may be
amended from time to time.


 


1.3                                 “Business Day” shall mean any day other than a Saturday or a
Sunday or a day on which banking institutions in The City of New York, New York
are authorized or required by law to close.


 


1.4                                 “Buy-Sell Notice” shall have the meaning ascribed thereto in
Section 8.1.


 


1.5                                 “Consent of the Venturers” means the consent or approval of
all of the Venturers.


 





















 


1.6                                 “Contract Date” has the meaning ascribed thereto in Section 8.2.


 


1.7                                 “EBITDA” has the meaning ascribed thereto in Section 3.5.


 


1.8                                 “Electing Venturer” has the meaning ascribed thereto in Section 8.1.


 


1.9                                 “Entity” means any general partnership, limited partnership,
limited liability company, corporation, joint venture, trust, business trust,
cooperative or association.


 


1.10                           “Hotel Owner” means the owner of a given Schrager Hotel, or
if applicable, Ian Schrager Hotel Management LLC, Ian Schrager Hotels LLC, Ian
Schrager London Limited, or any Affiliate of either of them to which such hotel
has been leased.


 


1.11                           “Immediate Family” means, with respect to any individual, his
or her spouse, parents, brothers, sisters, children, stepchildren,
grandchildren and grandparents.


 


1.12                           “Initiating Venturer” has the meaning ascribed thereto in Section 8.1.


 


1.13                           “Interest Price” has the meaning ascribed thereto in Section 8.1.


 


1.14                           “Interests” shall mean the aggregate of all of the limited
liability company and/or partnership interests issued to and owned by each
Venturer pursuant to the Venture Operating Agreement for each Owned Entity,
representing each Venturer’s aggregate rights in each Owned Entity, including,
without limitation, the Venturer’s rights to share in profits and losses of
each Owned Entity and the applicable Venture Operation, to receive
distributions from each Owned Entity and to vote on matters subject to a vote
of the Venturers, as provided in each Venture Operating Agreement.


 


1.15                           “Major Decisions” shall mean (i) all decisions defined
as a “Major Decision” pursuant to the Venture Operating Agreements of each Owned
Entity, and (ii) the decision of the Venturers to undertake an Offering.


 


1.16                           “Offering” shall have the meaning set forth in Section 3.5(b) of
this Agreement.


 


1.17                           “Owned Entity” and “Owned Entities”
have the meanings ascribed thereto in Section 3.1.


 


1.18                           “Person” means any individual or Entity, and the heirs,
executors, administrators, legal representatives, successors and assigns of
such Person where the context so requires.


 


1.19                           “Right to Purchase Period” shall have the meaning set forth
in Section 3.5(a).


 


1.20                           “Schrager Hotel” means any hotel or hospitality facility
owned or managed by an Affiliate of Ian Schrager.


 


1.21                           “Thirty-Day Period” shall have the meaning ascribed thereto
in Section 8.1.


 


1.22                           “Venture” shall mean the joint venture created by the
Venturers pursuant to the terms and conditions of this Agreement.


 


2





















 


1.23                           “Venture Operation” and “Venture Operations” shall have the
meanings ascribed thereto in Section 2.1 hereof.


 


1.24                           “Venturer” means any of Venturer A or Venturer B, and “Venturers”
means, collectively, Venturer A and

Venturer B.


 


1.25                           “Venturer A” means Ian Schrager Hotels LLC, a Delaware
limited liability company.


 


1.26                           “Venturer B” means Chodorow Ventures LLC.


 


All references herein to
Articles, Sections and Schedules shall be deemed references to Articles and
Sections of, and Schedules to, this Agreement unless the context shall
otherwise require.  All accounting terms
used herein and not otherwise defined herein shall have the respective meanings
ascribed to them in accordance with generally accepted accounting principles
and, except as expressly provided herein, all accounting determinations shall
be made in accordance with generally accepted accounting principles, as in effect
from time to time, consistently applied.


 


ARTICLE 2



PURPOSES AND TERM


 


2.1                                 Purposes.  Subject to the limitations set forth in this
Agreement, Venturer A and Venturer B desire to, through Owned Entities, (i) establish,
own, operate and/or manage restaurants and bars, in certain Schrager Hotels
designated by Venturer A and approved by the Consent of the Venturers, and,
subject to Section 3.4 below, to operate food and beverage operations at
said designated Schrager Hotels, including room service, but excluding in-room
minibars (together with those restaurants contemplated by clause (ii) below,
each, a “Venture Operation”; and collectively, the “Venture Operations”), and (ii) if
agreed upon by the Consent of the Venturers, to establish, own, operate and/or
manage restaurants unrelated to any Schrager Hotels, it being agreed that
neither Venturer A, nor Venturer B nor their respective Affiliates, nor Jeffrey
Chodorow, has any obligation to offer any such restaurant opportunities to the
Venture.


 


2.2                                 Term of Agreement.  The term of this Agreement shall end on the
first to occur of (i) the date which is forty (40) years from the date
hereof, (ii) the date on which either Venturer A or Venturer B no longer
holds any Interests in any Owned Entities, and (iii) the Consent of the
Venturers, in writing, to terminate this Agreement.


 


ARTICLE 3



OPERATIONS AT SCHRAGER HOTELS


 


3.1                                 Agreements with Hotel Owner.  Venturer A shall have the right to present to
Venturer B, and the Venture shall have the right to accept or reject, acting by
Consent of the Venturers, opportunities for the Venture to establish, own,
operate and/or manage, either directly or through entities wholly owned by the
Venturers (each an “Owned Entity”; collectively, the “Owned Entities”), Venture
Operations at Schrager Hotels designated by Venturer A, and in connection


 


3





















 


therewith to provide food
and beverage service to the applicable hotel. 
In connection with each Venture Operation to be established, owned,
operated or managed through an Owned Entity, Venturer A and Venturer B will
enter, either directly or through an Affiliate, into a limited liability
company agreement or partnership agreement, substantially in the form attached
hereto as Exhibit A, but with such modifications as may be
necessary to reflect differences in circumstances among the various Venture
Operations (each a “Venture Operating Agreement”). Venturer B or an Affiliate
of Venturer B shall receive a management fee, either directly or through an
Affiliate (as Venturer B shall elect), with respect to each such Venture
Operation equal to three percent (3%) of the gross receipts of such Venture
Operation.  Said management fee shall be
paid by the Owned Entity for the particular Venture Operation on a monthly
basis.  Notwithstanding the foregoing,
such management fee shall be paid to Venturer B or its Affiliate only to the
extent that such Venture Operation produces a positive net cash flow (after the
payment of all operating expenses, reserves and rent).  However, any management fee not paid to
Venturer B or its Affiliate shall accrue and be paid out of the next available
positive net cash flow (after the payment of all operating expenses, reserves
and rent).  With respect to any Venture
Operation in a Schrager Hotel, the Owned Entity shall enter into a lease (or,
if necessary to comply with applicable liquor laws, a management agreement or
consulting agreement) with Hotel Owner on market terms to be negotiated,
provided that it is anticipated that the rent or base fee to Hotel Owner shall
be the greater of (a) a negotiated market base rent or fee and (b) seven
(7%) percent of the gross receipts of the Venture Operation, as such percentage
may be adjusted to reflect relevant market conditions.  Any lease shall be substantially in the form
of the lease attached hereto as Exhibit B, but with such
modifications as may be necessary to reflect differences in circumstances among
the various Venture Operations.  It is
further understood that said consulting agreement or lease will set forth the
specific rent or fee arrangements and the specific obligations of the Owned
Entity and the Hotel Owner with respect to the designated Schrager Hotel, and
will further be modified to the extent necessary to conform with the law of the
jurisdiction where the applicable Venture Operation is located.


 


3.2                                 Initial Venture Operations. Schedule II
attached hereto lists those Venture Operations which are currently leased to or
managed by Venturer B or an Affiliate thereof, and which are intended to be
governed by this Agreement.  Each
applicable Venture Operating Agreement shall set forth the amount of capital
contributions by the Venturers attributable to each such Venture Operation.  With respect to Asia de Cuba (Morgans), Asia
de Cuba (Mondrian) and The Blue Door (Delano), which are subject to existing
leases or management/consulting agreements, concurrently with the execution of
this Agreement, (i) said leases or management/consulting agreements shall
be modified on terms mutually satisfactory to Venturer A and Venturer B and
otherwise to conform to the terms of this Agreement and (ii) Venturer A
and Venturer B shall enter into a Venture Operating Agreement for each Venture
Operation listed on Schedule II.


 


3.3                                 Future Venture Operations.  It is anticipated that Venturer A will offer
to Venturer B the opportunity to enter into agreements to operate five (5) Venture
Operations during the four (4) year period following the date of this
Agreement, including for purposes of determining whether Venturer A has offered
to Venturer B at least five (5) opportunities for Venture Operations,
those Venture Operations listed on Schedule II as St. Martin’s Lane and
Sanderson, but excluding for these purposes those Venture Operations listed on Schedule II
as Asia de Cuba (Morgans), Asia de Cuba (Mondrian) and Blue Door (Delano). In
addition, to the extent that Venturer A is involved in the renovation and
redevelopment of the St. Moritz in New York, New


 


4





















 


York as a hotel, one of
the opportunities expected to be offered to Venturer B is a restaurant located
in such renovated and redeveloped hotel. Venturer A will provide Venturer B
with notice as soon as Venturer A is reasonably certain that it will be
offering to Venturer B the opportunity to enter into agreements for a Venture
Operation and the particular city in which such opportunity would be
available.  It is anticipated that each
Venture Operating Agreement for future Venture Operations will provide that
capital shall be contributed as follows: 
(i) capital to fund construction or build-out of the applicable
Venture Operation, together with capital to cover pre-opening expenses, shall
be advanced eighty (80%) percent by Venturer A and twenty (20%) percent by
Venturer B; and (ii) to the extent
capital is required for the working capital needs of the applicable Venture
Operation or Owned Entity or for a concept change required under the terms of
the lease for the Venture Operation, same shall be advanced, fifty (50%)
percent by Venturer A and fifty (50%) percent by Venturer B.  Notwithstanding the foregoing, to the extent
that a Hotel Owner funds amounts which Venturer A and Venturer B agree are in
lieu of amounts that the Owned Entity would otherwise be required to fund for
construction or build out of, or pre-opening expenses in connection with, a
particular Venture Operation for use by the Owned Entity pursuant to the
applicable Venture Operating Agreement, such amounts (hereinafter referred to
as “Agreed Hotel Owner Advances”) shall reduce Venturer A’s obligation to make
capital contributions pursuant to clause (i) of the preceding sentence by
the amount of such Agreed Hotel Owner Advances.


 


3.4                                 Limitations Regarding Bar Operations.  Notwithstanding anything to the contrary in
this Agreement, unless otherwise expressly provided in any lease or consulting
agreement entered into with respect to a specific Schrager Hotel pursuant to Section 3.1
above, the Venturers acknowledge that the applicable Hotel Owner shall be
entitled to enter into an agreement which provides for any other Person
designated by Venturer A to operate any bar, nightclub or “Lobby Table facility”
within such Schrager Hotel.


 


3.5                                 Right to Purchase Existing Venturer B Restaurants.  (a) As used in this Section 3.5,
the term “Right to Purchase Period” shall mean the period of time from the date
hereof until the first to occur of the following:


 


(i)                                     such
date as is four (4) years from the effective date of this Agreement,
provided that if on the date that is four (4) years from the effective
date of this Agreement the Venturers have not completed an Offering (as
hereinafter defined) but Venturer A has retained or hired an investment advisor
or underwriter and is then actively engaged in the process of attempting to
consummate an Offering, such date shall be extended to the date that is four (4) years
and six (6) months from the effective date of this Agreement;


 


(ii)                                  such
date as Venturer B no longer owns any Interests in the Owned Entities; or


 


(iii)                               such
date as Jeffrey Chodorow is deceased or permanently incapacitated.


 


(b)  As used
in this Agreement, the term “Offering” shall mean any of the following if
approved by the Consent of the Venturers: 
a public offering of equity securities by the Venturers in the Owned
Entities, a private equity offering by the Venturers in the Owned


 


5





















 


Entities, a joint venture
by the Venturers in respect of the Owned Entities, a syndication by the Venturers
in respect of the Owned Entities, another transaction whereby a third party
investment is made in the Owned Entities or a sale of the Owned Entities.  The term “Offering” shall not include any
transaction which does not relate to all of the Owned Entities and all Venture
Operations.  The term “Offering” shall
not include any transaction pursuant to any exercise of the Buy/Sell Rights set
forth in Article 8 hereof.


 


(c) As used
in this Section 3.5, the term “Subject Venturer B Restaurants” shall mean
all restaurants then owned by Venturer B or its Affiliates (including, without
limitation, China Grill Restaurants, China Grill Cafes and Tuscan Steak
Restaurants) for which all required consents of third-party landlords to the
transfer may be obtained without payment of any consideration therefor except
for the landlord’s reasonable out-of-pocket costs in connection with reviewing
the request for transfer and without imposition of any conditions to the
transfer which are not acceptable to Venturer B in its sole discretion.
Venturer B represents that, to the best of Venturer B’s knowledge, except as
set forth on Exhibit D attached hereto, the leases with third-party
landlords for restaurants currently owned by Venturer B or its Affiliates
(including, without limitation, China Grill Restaurants, China Grill Cafes and
Tuscan Steak Restaurants) do not require landlord’s consent to transfer, or, if
landlord’s consent is required for transfer, do not require payment of any
consideration therefor except for the landlord’s reasonable out-of-pocket costs
in connection with reviewing the request for transfer and do not impose any
conditions to the transfer which are not acceptable to Venturer B.


 


(d) As used
in this Agreement, the term “EBITDA” shall mean net income, determined in
accordance with generally accepted accounting principals consistently applied,
but without deduction for: management fees of affiliates of the Venturers or
the members or partners of the Venturers; interest expense; income taxes and
other taxes based upon an Owned Entity’s income or profits regardless of how
denominated (but not any taxes based on an Owned Entity’s gross revenues);
depreciation; and amortization.  EBITDA
shall be fairly and reasonably adjusted to take into consideration any period
of time during the period for which EBITDA is being determined in which any
Subject Venturer B Operation is closed due to casualty.


 


(e) During
the Right to Purchase Period (except as provided in Section 3.5(f) below),
Venturer A shall have the right to cause an Owned Entity (i.e. an Entity owned
by Venturer A and Venturer B) to purchase, but only concurrently with the
closing of an Offering approved by Venturer B, all, but not less than all,
Subject Venturer B Restaurants.  The
purchase price for said Subject Venturer B Restaurants shall be paid in cash by
such Owned Entity to Venturer B concurrently with the closing of the Offering
and shall be equal to the aggregate of the prices for all of the Subject
Venturer B Restaurants, each of which shall be priced at an amount equal to the
greater of (i) 5.5 times the EBITDA for the particular Subject Venturer B
Restaurant, but in no event less than zero; or (ii) in the case of any
Subject Venturer B Restaurant which does not have an operating history of
twenty-four (24) months, the total amount paid for tenant improvements,
furniture, fixtures and equipment, smallwares and pre-opening expenses for the
particular Subject Venturer B Restaurant by Venturer B and its Affiliates and
any other co-owner thereof.


 


(f)  Notwithstanding
the foregoing provisions of this Section 3.5, if prior to the expiration
of the Right to Purchase Period, Venturer B or any of its Affiliates receives
an offer


 


6





















 


for the purchase of all
Subject Venturer B Restaurants representing one or more of its brands or
concepts (i.e. such offer must be for all Subject Venturer B Restaurants which
are China Grills and/or all Subject Venturer B Restaurants which are Tuscan
Steaks), which Venturer B desires to accept, Venturer B may accept said offer
and consummate such sale, and the right of Venturer A to cause an Owned Entity
to purchase said restaurant or restaurants shall be null and void as to said
restaurant or restaurants, subject only to the following:


 


(i)                                     With
respect to any offer whereby following such proposed sale Venturer B, Jeffrey
Chodorow or an Affiliate shall no longer be involved in the ownership,
operation or management of the Subject Venturer B Restaurants which are the
subject of the offer, Venturer B or its Affiliate shall provide written notice
to Venturer A of such offer, and thereafter, for a period of ten (10) days
following receipt of such notice by Venturer B, Venturer A and Venturer B shall
negotiate with respect to the purchase of the Subject Venturer B Restaurants
which are the subject of the offer.  If,
following such ten-day period, Venturer A and Venturer B have not reached
agreement satisfactory to Venturer A in its sole discretion and satisfactory to
Venturer B in its sole discretion with respect to the purchase by an Owned
Entity of the Subject Venturer B Restaurants which are the subject of the
offer, the right of Venturer A to cause a purchase of said Subject Venturer B
Restaurant or Restaurants as set forth in this Section 3.5 shall terminate
and be of no further force or effect and Venturer B and its Affiliates may sell
and convey said Subject Venturer B Restaurant or Restaurants free and clear of
any right of Venturer A to cause a purchase of same.


 


(ii)                                  With
respect to any offer whereby following such proposed sale Venturer B, Jeffrey
Chodorow or an Affiliate shall remain involved in the ownership, operation or
management of the Subject Venturer B Restaurants which are the subject of the
offer, Venturer B shall first offer Venturer A, by written notice (the “Offer
Notice”), the right to cause an Owned Entity to purchase such Subject Venturer
B Restaurant or Restaurants on the same terms and conditions as are set forth
in said offer; provided, that, if Venturer A does not accept said
offer within twenty (20) days from its receipt of said Offer Notice, then the
right of Venturer A to cause a purchase of said Subject Venturer B Restaurant
or Restaurants as set forth in this Section 3.5 shall terminate and be of
no further force or effect and Venturer B and its Affiliates may sell and
convey said Subject Venturer B Restaurant or Restaurants, for a price which is
not less than ninety percent (90%) of the price stated in the original offer
and otherwise on such terms and conditions as Venturer B shall elect, free and
clear of any right of Venturer A to cause a purchase of same.  If, following Venturer A’s failure to accept
the offer set forth in the Offer Notice, Venturer B and its Affiliates wish to
sell and convey said Subject Venturer B Restaurant or Restaurants at a price
which is less than ninety percent (90%) of the price stated in the original
offer, Venturer B must again provide an Offer Notice to Venturer A, offering
Venturer A the right to


 


7





















 


cause an Owned Entity to
purchase such Subject Venturer B Restaurant or Restaurants on the same terms
and conditions as are set forth in said revised offer, and the provisions of
this paragraph (ii) shall continue to apply.


 


The rights to
purchase as set forth in this Section 3.5(f) shall not be applicable
to any offer that Venturer B or its Affiliates may receive from any Person to
invest in or acquire an interest in any Subject Venturer B Restaurants so long
as Jeffrey Chodorow and/or Linda Chodorow and/or their Affiliates will control
the entity that owns the Subject Venturer B Restaurant or Restaurants after the
consummation of said transaction, including the ability to cause a sale or
transfer of any such Subject Venturer B Restaurants to an Owned Entity in
accordance with Section 3.5(e).


 


(g) Notwithstanding
anything to the contrary contained in this Section 3.5,  neither Venturer A nor Venturer B shall be
obligated to contribute any capital to any Owned Entity in order for Venturer A
to cause an Owned Entity to exercise any of the rights under Section 3.5
of this Agreement to purchase Subject Venturer B Restaurants, it being the
intention of the parties that any funds for the exercise of such rights will be
obtained from third party sources.


 


ARTICLE 4



VENTURERS


 


4.1                                 Venturers.  The Venturers are the Persons listed on Schedule I
attached hereto.


 


4.2                                 Additional Venturers.  Except as expressly provided herein, neither
Venturer shall have the right to assign their rights and obligations under this
Agreement to any Person without the prior written consent of the other
Venturer.


 


ARTICLE 5



ACTION OF VENTURERS AND COMPENSATION.


 


5.1                                 Action of Venturers.  Except as otherwise expressly set forth
herein, all decisions or actions contemplated by this Agreement, including,
without limitation, the decision to enter into Venture Operating Agreements and
to establish, own, operate and/or manage Venture Operations, shall require the
Consent of the Venturers.  No Venturer
may do or take any action under this Agreement which would be binding upon any
other Venturer.


 


5.2                                 Compensation.  The Venturers shall not receive any salary
for services rendered to the Venture, provided, however, that notwithstanding anything to the
contrary contained herein, Venturer B shall be entitled to receive, with
respect to each Venture Operation, the management fee provided for in Section 3.1.


 


8





















 


ARTICLE 6



REPRESENTATIONS AND COVENANTS OF VENTURER B


 


6.1                                 Representations of Venturer B.  Venturer B hereby represents and warrants to
Venturer A as follows:


 


(a) the schedule attached
hereto and made a part hereof as Exhibit C lists each restaurant,
bar, catering establishment or other food and beverage facility (whether or not
located in a hotel) that Venturer B, Jeffrey Chodorow, or their Affiliates
operate or currently plan to operate, or in which Venturer B, Jeffrey Chodorow,
or their Affiliates has or currently plans to acquire an ownership or financial
interest (collectively, the “Current Projects”).


 


(b) Jeffrey
Chodorow and/or Linda Chodorow and/or members of their Immediate Family
currently own not less than 50.1% of the ownership interests in Venturer B.


 


6.2                                 Restricted Activities.


 


(a) For
purposes of this Article 6 only, the term “Venturer B Affiliates” means
any Person who is controlled, directly or indirectly, by Jeffrey Chodorow or
Linda Chodorow.


 


(b) In
recognition of the benefits that Venturer B and its principals will derive from
this Agreement and from the opportunity, through Owned Entities, to establish,
own, operate and/or manage Venture Operations at Schrager Hotels as provided in
Section 3.1, Jeffrey Chodorow and Linda Chodorow agree that, during the
term of this Agreement, so long as Jeffrey Chodorow is alive and not disabled,
neither Jeffrey Chodorow nor Linda Chodorow, nor any Venturer B Affiliates,
will, directly or indirectly, operate, manage, provide services to or acquire a
financial or ownership interest in:


 


(i)            any
restaurant, bar or similar food or beverage facility at any hotel,
extended-stay facility, resort, spa or similar hospitality or lodging facility,
regardless of location, except (A) Venture Operations, (B) the
Current Projects, or (C) any restaurant, bar or similar food or beverage
facility at any hotel or other facility which is affiliated with or a part of a
casino; or


 


(ii)           any
restaurant, bar or similar food or beverage facility that is identical or
substantially identical in name or menu as any Venture Operation.


 


(c) In
furtherance and not in limitation of the foregoing, and except as may be
subsequently agreed in writing by Venturer A and Venturer B, neither Jeffrey
Chodorow nor Linda Chodorow, nor any Venturer B Affiliates, will, directly or
indirectly, operate, manage, provide services to or acquire a financial or
ownership interest in any restaurant, bar or similar food or beverage facility
located within the city where any Venture Operation is located (other than the
cities in which those Venture Operations listed on Schedule II hereto are
located), for a period of two years from the date of opening of such Venture
Operation (except for any restaurant, bar or similar food or beverage facility
owned, operated or in development (as evidenced by an executed lease,
consulting agreement, executed letter of intent or other binding


 


9





















 


agreement for space) by
Jeffrey Chodorow, Linda Chodorow or any Venturer B Affiliate and existing in
such city prior to the opening of such Venture Operation).


 


(d) In
addition to the restrictions set forth in Section 6.2(b) and (c) above,
each lease, management agreement or consulting agreement for a Venture
Operation will contain a restriction providing that Venturer B Affiliates will
not, directly or indirectly, operate, manage, provide services to or acquire a
financial or ownership interest in any restaurant, bar or similar food or
beverage facility, located within a geographic radius of such Venture Operation
(which geographic radius shall be more limited than the geographic radius
provided for in Section 6.2(c)) to be more particularly set forth in the
lease, management agreement or consulting agreement entered into with respect
to such Venture Operation, for so long as such lease, management agreement or
consulting agreement remains in effect and for one year thereafter (except for
any restaurant, bar or similar food or beverage facility owned, operated or in
development (as evidenced by an executed lease, consulting agreement, executed
letter of intent or other binding agreement for space) by any Venturer B
Affiliate or in which any Venturer B Affiliate has an interest and existing in
such radius area prior to the opening of such Venture Operation).


 


(e) Nothing
contained in this Section 6.2 or elsewhere in this Agreement shall be
deemed to invalidate or make ineffective any geographic restriction or other
restrictive covenant contained in any lease, management or operating agreement
with respect to any operation of Venturer B Affiliates in a Schrager Hotel, each
of which shall remain in full force and effect in accordance with its terms.


 


(f) Notwithstanding
anything to the contrary contained in this Agreement, the restrictions
contained in Section 6.2(b) and (c) shall terminate on
expiration of the Right to Purchase Period unless prior to such date Venturer A
has offered at least five (5) opportunities for Venture Operations
(including for purposes of determining whether Venturer A has offered Venturer
B at least five (5) opportunities for Venture Operations, those Venture
Operations listed on Schedule II as St. Martin’s Lane and Sanderson, but
excluding for these purposes those Venture Operations listed on Schedule II
as Asia de Cuba (Morgans), Asia de Cuba (Mondrian) and Blue Door (Delano)) in
Schrager Hotels.


 


(g) Notwithstanding
anything to the contrary contained in this Agreement, except as expressly
provided in Section 8.5 hereof, the restrictions contained in Section 6.2(b) and
(c) shall terminate on expiration of the Right to Purchase Period unless
prior to such date Venturer A and Venturer B have jointly consummated an
Offering (as said term is defined in Section 3.5(b) hereof).


 


(h) The
Venturers consider the provisions in this Section 6.2 to be reasonable and
valid with respect to duration, geographic scope and all other respects, and to
be enforceable in accordance with the requirements of all applicable laws,
statutes, orders, rules and regulations. 
Notwithstanding the foregoing, if any court of competent jurisdiction
determines, by a final and nonappealable order, that any provision in this Section 6.2,
or any portion thereof, is invalid or unenforceable, the remaining provisions
shall not thereby be affected and shall be given full effect, without regard to
any invalid provisions or portions thereof. 
Any provisions or parts thereof that are deemed to exceed the temporal,
geographic or occupational limitations permitted


 


10





















 


by applicable laws shall
be reformed to the maximum temporal, geographic or occupational limitations
permitted by law and in accordance with applicable law.


 


(i)  Venturer
B acknowledges that the provisions of this Section 6.2 are necessary for
the protection of the goodwill and other legitimate business interests of
Venturer A and the Owned Entities, and that a breach of these provisions by
Venturer B would cause Venturer A and the Owned Entities (and accordingly, the
Venture Operations) irreparable injury for which money damages would not afford
an adequate remedy.  Venturer B accordingly
agrees that Venturer A shall be entitled to seek and obtain injunctive or other
similar, equitable relief to prevent any breach of this Section 6.2.


 


(j)  The provisions of this Section 6.2 shall
be enforceable only by Venturer A; and shall be enforceable by Venturer A only
so long as Ian Schrager is involved in the management or ownership of Venturer
A; and may not be assigned, pledged or transferred by Venturer A; provided,
however, Venturer B acknowledges and agrees that, if requested by Venturer A,
Venturer B will acknowledge and agree that the provisions of this Section 6.2
will, subject to all of the terms and conditions hereof, run to the benefit of,
and be enforceable by, a Person which has acquired and continues in ownership
of substantially all of the chain of then-existing Schrager Hotels, which shall
be deemed to mean the acquisition of no less than ten (10) such Schrager
Hotels; and may not be further assigned by such Person.


 


6.3                                 Efforts by Venturer B.  Venturer B expressly acknowledges and agrees
that an essential condition of this Agreement, and a prime motivating
inducement for Venturer A to enter into this Agreement is Venturer B’s
representation and agreement that Jeffrey Chodorow (prior to his death,
insanity, incompetency or other legal incapacity), individually, will, to the
extent he is permitted by applicable law to do so, devote such time and
attention to the development and operation of the business of the Owned
Entities and the Venture Operations as is reasonably necessary to fulfill the
duties and obligations of Venturer B under each Venture Operating
Agreement.  Accordingly, Jeffrey
Chodorow, by executing this Agreement, hereby acknowledges that he shall, to
the extent he is permitted by applicable law to do so, personally devote
substantial time, effort and attention (but not his full time, effort and
attention) to the business of the Owned Entities and the Venture Operations.
The Venturers acknowledge that much of Jeffrey Chodorow’s time, effort and
attention to the business of the Owned Entities and Venture Operations will be
spent at locations other than at the physical premises of particular Venture
Operations. Notwithstanding the foregoing, the Venturers acknowledge that
Jeffrey Chodorow currently is, and may in the future be, involved in business
ventures other than the Owned Entities and Venture Operations, including
restaurants, requiring his substantial time, effort and attention; provided,
however, that Jeffrey Chodorow (i) represents and warrants that none of
such other business ventures contractually limit his ability to perform his
obligations hereunder and (ii) agrees that he will not enter into any such
business ventures contractually limiting his ability to perform his obligations
hereunder.


 


6.4                                 No Assignment. Except as expressly
set forth in Section 6.2(j), the representations, warranties and
agreements of Venturer B, Jeffrey Chodorow and Linda Chodorow set forth in this
Article 6 shall inure only to the benefit of Venturer A, and shall not be
assignable to or enforceable by any other Person.


 


11





















 


ARTICLE 7



GENERAL PROVISIONS


 


7.1                                 Notices.  Except as specifically provided elsewhere in
this Agreement, all notices, requests or consents to any Venturer hereunder
shall be in writing (including facsimile) and shall be given at the Venturer’s
address or facsimile number set forth on Schedule I (in each instance,
with a copy to McDermott, Will & Emery, 50 Rockefeller Plaza, New
York, New York 10020, Attention:  Keith
M. Pattiz, Esq. and with an additional copy to Blank Rome Comisky &
McCauley, LLP, One Logan Square, Philadelphia, Pennsylvania 19103,
Attention:  G. Craig Lord, Esq.) or
such other address or facsimile number as such Venturer may hereafter specify
by written (including facsimile) notice to the other Venturer.  Each such notice, request or consent shall be
given (a) by hand delivery, (b) by nationally recognized courier
service or (c) by facsimile, receipt confirmed.  Each such notice, request or consent shall be
effective (a) if by hand delivery or by nationally recognized courier
service, when delivered at the address specified in this Section and (b) if
by facsimile, when such facsimile is transmitted to the facsimile number
specified in this Section and the appropriate answer back or confirmation
is received.


 


7.2                                 Further Assurances.  Each Venturer hereby agrees to execute all
certificates, counterparts, amendments, instruments or documents that may be
required by the laws of the various states in which the Owned Entities do
business.


 


7.3                                 Binding Effect.  This Agreement and all of the terms and
provisions hereof shall be binding upon, and shall inure to the benefit of, the
Venturers, and their respective legal representatives, heirs, successors and
permitted assigns, except as expressly noted otherwise herein and except that
no Venturer may assign or transfer his, her or its rights or obligations under
this Agreement in any manner other than as provided herein.


 


7.4                                 Counterparts.  This Agreement and any amendment hereto may
be signed in any number of counterparts, each of which shall be an original,
but all of which taken together shall constitute one Agreement (or amendment,
as the case may be).


 


7.5                                 Law Governing.  THIS AGREEMENT AND ALL QUESTIONS RELATING TO
ITS VALIDITY, INTERPRETATION, PERFORMANCE AND ENFORCEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.


 


7.6                                 Severability.  If any provision of this Agreement shall be
finally determined to be unlawful or unenforceable as applied to any particular
case in any jurisdiction or jurisdictions, this Agreement shall be reformed and
construed in any such jurisdiction or case as if such unlawful or unenforceable
provision had never been contained herein and such provision reformed so that
it would be lawful and enforceable to the maximum extent permitted in such
jurisdiction or in such case, and every other provision of this Agreement shall
remain in full force and effect.


 


12





















 


7.7                                 Integration; Amendment.  This Agreement contains the entire
understanding among the Venturers with respect to the subject matter hereof and
supersedes any prior understandings, inducements or conditions, expressed or
implied, written or oral, among them respecting the subject matter contained
herein.  This Agreement may not be
modified or amended other than by an agreement in writing executed by all of
the Venturers.


 


7.8                                 Captions.  Captions contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit, extend or
describe the scope of this Agreement or the intent of any provision hereof.


 


7.9                                 Indulgences, Etc.  Neither the failure nor any delay on the part
of any party hereto to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. 
No waiver shall be effective unless it is in writing and is signed by
the party asserted to have granted such waiver.


 


7.10                           Waiver of Jury Trial.  Each of the Venturers hereto waive, to the
extent permitted by law, trial by jury in any action or proceeding arising out
of any matter connected with this Agreement and/or the Venture or any
controversy or dispute by, between or among any of the Venturers in connection
with any matter relating to the Venture.


 


7.11                           Consent to Jurisdiction.  Each of the Venturers (a) submits to the
jurisdiction of the courts of the State of New York with respect to any action
or proceeding arising out of or in connection with this Agreement or the
transactions herein contemplated,  (b) agrees
that it may be served with any summons, complaint, process, pleading or notice
in respect to the foregoing, relating to any such action or proceeding in the
courts of the State of New York, by mailing a copy of the same to it at the
address set forth for, and in the manner in which, a notice or communication
would be required to be mailed pursuant to the provisions hereof, and (c) agrees
that such mailing shall confer jurisdiction in personam over it with the same
force and effect as if it were personally served within the State of New York.


 


7.12                           No Personal Liability.
Notwithstanding anything to the contrary contained herein or elsewhere, neither
Jeffrey Chodorow nor Linda Chodorow shall have any personal liability for
damages or otherwise pursuant to or in connection with this Agreement, provided
that injunctive relief (and not any other relief or remedy) may be obtained
against Jeffrey Chodorow and/or Linda Chodorow in the event that they breach
any of their representations or covenants in Section 6.2 or 6.3 of this
Agreement.


 


7.13                           Conflict. In the event of any
conflict or inconsistency between the terms of this Agreement and the terms of
any Venture Operating Agreement, the terms of the Venture Operating Agreement
shall prevail as to all matters respecting the Venture Operation to which the
Venture Operating Agreement pertains.


 


13





















 


ARTICLE 8



BUY-SELL


 


8.1                                 The
Buy-Sell Right.  (a)                    In the event that the Venturers are
unable to reach an agreement with respect to a Major Decision (other than the
type of Major Decision specified in paragraph (b) below) at any time after
expiration of the Right to Purchase Period, any Venturer (the “Initiating
Venturer”) shall have the right to serve written notice (“Buy-Sell Notice”) on
the other (the “Electing Venturer”), only within the period of time ending
sixty (60) days after the initial dispute with respect to such Major Decision
arose, setting forth that the Initiating Venturer is willing to pay a price for
all of the Owned Entities’ assets equal to the amount determined by adding
together, for each Venture Operation, the greater of (i) 5.5 times the
EBITDA for the particular Venture Operation (without deduction for the
management fee paid to Venturer B or its Affiliate) for the twelve-full
calendar months immediately prior to the delivery of the Buy-Sell Notice (such
twelve-month period, the “Applicable Period”), but in no event less than zero,
and (ii) in the case of any Venture Operation which does not have an
operating history of twenty-four (24) months, the total amount paid for tenant
improvements, furniture, fixtures and equipment, smallwares and pre-opening
expenses for the particular Venture Operation by Venturer A and Venturer
B.  In calculating the price as
aforesaid, EBITDA shall be fairly and reasonably adjusted to take into
consideration any period of time during the Applicable Period in which
operations of any Venture Operation are closed due to casualty or a concept
change, provided, that, such adjustment shall be made to EBITDA
with respect to any such Venture Operations if and only if two or more Venture
Operations are closed due to casualty or a concept change for a period of time
during the Applicable Period.  The
Buy-Sell Notice shall also contain a statement of the amount of cash (the “Interest
Price”) which would be received by each Venturer if all the Owned Entities’
assets were sold for the price set forth in the Buy-Sell Notice, and (i) loans
made by any Venturer to any Owned Entity were repaid from gross proceeds
thereof, (ii) transfer taxes which would be incurred in the event of such
a sale where paid from the gross proceeds thereof and (iii) the remaining
proceeds were distributed to the Venturers in accordance with the relevant
provisions of the Venture Operating Agreements of the Owned Entities.  Any Venturer shall have the right to request,
within ten (10) Business Days after the delivery of the Buy-Sell Notice,
that the Interest Price be reviewed by an independent accounting firm
satisfactory to Venturer A and Venturer B and such review shall be conclusive
and binding absent manifest error.  Within
thirty (30) days after the later of (i) delivery of the Buy-Sell Notice or
(ii) delivery of the accountant’s report, if requested pursuant to the
preceding sentence (the “Thirty-Day Period”), the Electing Venturer shall elect
either (A) to purchase the Initiating Venturer’s Interests or (B) to
sell its Interests to the Initiating Venturer at the Interest Price of the
Electing Venturer.  Failure to deliver
written notice of election within the Thirty-Day Period shall be deemed an
irrevocable election by the Electing Venturer to sell its Interests to the
Initiating Venturer at the Interest Price of the Electing Venturer.


 


(b) Notwithstanding
the foregoing, the Venturers’ inability to reach an agreement with respect to
any decision whether to pursue an opportunity to own or operate any particular
restaurant shall not give rise to the buy-sell right set forth in this Article 8.
In addition, in the event the Venturers disagree over whether to proceed with a
particular Offering (in the case where Venturer A wishes to proceed with such
Offering and Venturer B does not wish to proceed with such Offering) at any
time after the third (3rd) anniversary of the date hereof,


 


14





















 


Venturer A may exercise
the buy-sell right set forth in this Article 8, provided, that such
buy-sell right shall only be exercisable if: (1) the Venturers have failed
to reach agreement with respect to such Offering after a good faith effort by
the Venturers to negotiate such an agreement; (2) the contemplated
Offering provided for market-level compensation to be paid to Jeffrey Chodorow,
Venturer B or an Affiliate for his or its ongoing role as manager of the Owned
Entities; and (3) Venturer A has the actual intention of proceeding with
such Offering and is prepared, in good faith, to proceed with same following
exercise of the buy-sell rights.  If
Venturer A exercises a buy-sell permitted by the immediately preceding
sentence, the restrictions set forth in Section 6.2 on the activities of
Jeffrey Chodorow and Linda Chodorow shall be null and void and of no further
force or effect.


 


8.2                                 Closing
Procedure.  If the Electing Venturer
shall elect to purchase the Initiating Venturer’s Interests, the Electing
Venturer shall make a deposit upon the delivery of its election to the
Initiating Venturer equal to the greater of $1,000,000 or five (5%) of the
Interest Price of the Initiating Venturer’s Interests.  If the Electing Venturer shall elect (or is
deemed to have elected to) sell its Interests to the Initiating Venturer, the
Initiating Venturer shall make within thirty (30) days after the Electing
Venturer’s election (or deemed election) a deposit equal to the greater of
$1,000,000 or five (5%) of the Interest Price of the Electing Venturer’s
Interests.  The foregoing deposit shall
be made in cash or by letter of credit issued by a New York clearinghouse bank
and shall be held in an interest-bearing account with the an attorney or law
firm reasonably acceptable to the Venturers, pursuant to customary escrow
provisions in a bank or trust company in New York, New York.  All interest earned on the deposit shall be
paid to the purchasing Venturer, subject to the provisions of Section 8.4
below.  On the date that the Electing
Venturer elects to buy or sell (or is deemed to have elected to sell) and the
required deposit shall have been delivered (the “Contract Date”), the Venturers
shall be deemed to have entered into a binding agreement for the purchase and
sale of the selling Venturer’s Interests. 
The closing shall be held no later than six (6) months after the
Contract Date.  Time shall be of the
essence with respect to the obligations hereunder of the Venturers.  At the closing, the selling Venturer shall
execute such instruments and documents as may be necessary or appropriate to
transfer the Interests of the selling Venturer to the purchasing Venturer free
and clear of all liens, claims or encumbrances and to withdraw the selling
Venturer from all of the Owned Entities with no further right, title or interest
therein.  At the closing, the Owned
Entities shall indemnify, defend and hold harmless the selling Venturer with
respect to any future (but not with respect to pre-existing) liabilities
arising from its interests in the Owned Entities (except to the extent caused
by such selling Venturer).


 


8.3                                 Failure
to Close by Seller. If on the closing date established above, the
purchasing Venturer shall tender the Interest Price but the selling Venturer
shall fail or refuse to transfer its Interests as required above, then the
purchasing Venturer shall have any and all rights and remedies at law or in
equity, including an action for specific performance.  All expenses incurred by the purchasing
Venturer in connection with the proposed purchase or with respect to the default
by the selling Venturer shall be offset against the Interest Price payable by
the purchasing Venturer.


 


8.4                                 Failure
to Close by Purchaser.  If on the
closing date established above, the selling Venturer shall tender the documents
required above but the purchasing Venturer shall fail or refuse to tender the
Interest Price, then the selling Venturer shall be entitled to receive and
retain


 


15





















 


the deposit, together
with interest thereon, as liquidated damages (it being agreed that the amount
of damages would be difficult to ascertain and that such amount is a fair
estimate of the actual damages), and the purchasing Venturer shall have no
further right to initiate a buy-sell pursuant to this Article 8.  In addition, at the election of the selling
Venturer, the defaulting purchasing Venturer shall be deemed to have elected,
on the date of its failure to close hereunder, to sell its Interests in
accordance with Section 8.1 above to the selling Venturer.  The selling Venturer shall make its election,
by written notice, within thirty (30) days of purchasing Venturer’s default
hereunder if it wishes to make such election in which event the procedures of Section 8.2
shall apply and all expenses incurred by the selling Venturer in connection
with the proposed purchase or with respect to the default by the selling
Venturer shall be offset against the Interest Price payable by the selling
Venturer in acquiring the defaulting purchasing Venturer’s Interests hereunder.


 


8.5                                 Restrictions
in Section 6.2.  In the event of
the closing of a buy-sell under this Article 8 wherein Venturer A is the
purchasing Venturer, notwithstanding anything to the contrary set forth in this
Agreement, the restriction contained in Section 6.2(b)(ii) shall
survive the termination of this Agreement.


 


[REMAINDER OF PAGE
INTENTIONALLY BLANK]


 


16





















 


IN WITNESS
WHEREOF, the undersigned have executed this Agreement, as of the date first
above written.


 


 


	
   

  	
  VENTURER
  A

  
	
   

  	
   

  
	
   

  	
  IAN SCHRAGER
  HOTELS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ian Schrager

  	
   

  
	
   

  	
   

  	
  Ian Schrager,
  President

  



 


 


	
   

  	
  VENTURER
  B

  
	
   

  	
   

  
	
   

  	
  CHODOROW
  VENTURES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey
  Chodorow

  	
   

  
	
   

  	
   

  	
  Jeffrey Chodorow

  



 


 


	
   

  	
  AS TO THE
  COVENANTS AND AGREEMENTS

  PURSUANT TO ARTICLE 6 OF THIS

  AGREEMENT:

  
	
   

  	
   

  
	
   

  	
  /s/ Jeffrey
  Chodorow

  
	
   

  	
  Jeffrey
  Chodorow, individually

  
	
   

  	
   

  
	
   

  	
  /s/ Linda
  Chodorow

  
	
   

  	
  Linda Chodorow,
  individually

  



 


17





















 


SCHEDULE I


 


Venturer


 


Ian
Schrager Hotels LLC

475 Tenth Avenue

New York, New York 10018


 


Chodorow
Ventures LLC

420 Lincoln Road

Suite 448

Miami Beach, Florida 33139


 


18





















 


SCHEDULE II


 


Current Venture Operations


 


1.                                       Food
and beverage operations - Morgans Hotel, New York


 


2.                                       Food
and beverage operations - Mondrian Hotel, Los Angeles


 


3.                                       Food
and beverage operations - Delano Hotel, Miami Beach


 


4.                                       Food
and beverage operations - St. Martin’s Lane Hotel, London


• Asia de Cuba


• SaintM


• Seabar


• Light Bar


 


5.                                       Food
and beverage operations - Sanderson Hotel


• To be named Spa Cuisine Restaurant


• To be named bar


 


19





















 


EXHIBIT A


 


[ATTACH FORM OF LLC OPERATING AGREEMENT]


 


20





















 


EXHIBIT B


 


[ATTACH FORM OF LEASE]


 


21





















 


EXHIBIT C


 


EXISTING/PENDING/PLANNED PROJECTS


 


New York City, New
York


 


China Grill


Asia de Cuba


Tuscan Steak (coming 2000)


 


Miami, Florida


 


China Grill


Tuscan Steak


Red Square


Blue Door


Blue Sea


 


Aventura, Florida


 


Newsroom


 


Los Angeles, California


 


Asia de Cuba


 


Las Vegas, Nevada


 


China Grill


Red Square


rumjungle


Rock Lobster


 


London, England


 


Asia de Cuba


Saint M


Sea Bar


Light Bar


 


West Palm Beach,
Florida


 


Concept to be determined


 


Note:  Jeffrey Chodorow and/or Linda Chodorow also
own interests in Chaos (a New York City nightclub), NOA (a Miami Beach noodle
shop) and Lou’s (a Miami Beach sandwich shop). 
The Joint Venture has no right to acquire these interests and ownership
of such interests shall not violate any covenant in the Joint Venture
Agreement.


 


22





















 


EXHIBIT D


 


[CONSENTS]


 


23