MODIFICATION AGREEMENT TO THE
                   REORGANIZATION AND STOCK EXCHANGE AGREEMENT

                                      AMONG

                     THE RATTLESNAKE HOLDING COMPANY, INC.,

                                       AND

                 OTTOMANELLI BROTHERS WEST, LTD., OTTOMANELLI'S
                      CAFE FRANCHISING CORP., 34TH ST. CAFE
                    ASSOCIATES, INC., GARDEN STATE CAFE CORP.



                             AND THEIR SHAREHOLDERS



                                FEBRUARY 26, 1998



<PAGE>


                             MODIFICATION AGREEMENT


     Modification  Agreement  made as of  February  26,  1998,  by and among THE
RATTLESNAKE  HOLDING  COMPANY,  INC.,  a Delaware  corporation  and  OTTOMANELLI
BROTHERS  WEST,  LTD.,  OTTOMANELLI'S  CAFE  FRANCHISING  CORP.,  34TH ST.  CAFE
ASSOCIATES,  INC.,  AND GARDEN  STATE CAFE CORP.  (Terms used but not defined in
this  Modification  Agreement have the meanings set forth in the 1997 Agreement,
as defined below.)

     WHEREAS,  the  parties  hereto  entered  into a  Reorganization  and  Stock
Exchange  Agreement  (the "1997  Agreement"),  dated  August 21,  1997 (the 1997
Agreement  and this  Modification  Agreement  being  referred  to  herein as the
"Agreement".

     WHEREAS,  the parties to the 1997 Agreement  desire to modify and amend the
1997 Agreement.

     NOW  THEREFORE,  in  consideration  of the  promises  and mutual  covenants
hereinafter set forth, it is agreed as follows:

     1.  Modification of Preamble.  The Preamble to the 1997 Agreement is hereby
amended to alter the definition of  "Ottomanelli  Corporations"  to include only
Ottomanelli's Cafe Franchising Corp. and Garden State Cafe Corp.

     2.  Modification  of Section 2.  Section 2 of the 1997  Agreement is hereby
deleted and the following is inserted:

     2. Merger of Ottomanelli Corporations with Subsidiaries of RHC.

     (a)  The  Merger.  On and  subject  to the  terms  and  conditions  of this
Agreement,  Ottomanelli's  Cafe  Franchising  Corp,  and Garden State Cafe Corp.
shall be merged with  Franchising  Acquisition  Corp.  and Otto-GSC  Acquisition
Corp., respectively, (the "RHC Subsidiaries"), each a newly formed subsidiary of
RHC with only nominal  assets and  liabilities  (referred to  hereinafter as the
"Merger"),  in  accordance  with the laws of their  respective  jurisdiction  of
organization  and pursuant to the Plans of Merger annexed hereto as Exhibits A-1
and A-2,  respectively.  The  Ottomanelli  Corporations  shall be the  surviving
corporations.  If there is any inconsistency between the Agreement and the Plans
of Merger, the Plans of Merger shall control.

     (b)  The  Merger  Consideration.  The  merger  consideration  (the  "Merger
Consideration") payable to the Shareholders by RHC shall be as follows:

<PAGE>

     (i)  Consideration  Deliverable at Closing.  RHC shall issue and deliver to
the Shareholders at the Closing (subject to Section 1(e) hereof), such number of
shares of RHC Common Stock as shall equal,  after the issuance  thereof 37.5% of
the RHC Common Stock issued and  outstanding,  (including for such purpose,  all
shares of Common Stock issuable  under  outstanding  convertible  RHC securities
except for the Existing  Preferred  described in Section 2 (b)(ii)  below) as of
the  date  which  is one day  prior  to the  Closing.  For the  purposes  of the
preceding  sentence,  the shares issuable to J.B.L. of Nevada,  Inc. and Michael
Lauer shall be deemed  issuable at $.30 per share. If the shares are issued at a
different price,  there shall be an appropriate,  retroactive  adjustment to the
number of shares of Common Stock issued to the Shareholders at Closing.

     (ii) Consideration  Deliverable at Private Placement.  Reference is made to
the  existing  Series A Preferred  Stock of RHC and the rights  related  thereto
(collectively the "Existing  Preferred").  The holders of the Existing Preferred
have agreed to exchange the Existing  Preferred for RHC  preferred  stock in the
Private  Placement  of a type simllar to the type being sold to investors in the
Private Placement (the preferred stock to be issued in exchange for the Existing
Preferred is referred to herein as the "New Preferred"). Simultaneously with the
closing  of  the  Private  Placement,   RHC  shall  issue  and  deliver  to  the
Shareholders  (subject  to Section  1(e)  hereof),  such number of shares of RHC
Common Stock as shall equal 60.0% of the maximum  number of shares of RHC Common
Stock into which the New Preferred could be converted as of that time.

     (iii)  Consideration  Deliverable  at Subsequent  Date. RHC shall issue and
deliver to the Shareholders at the closing of the private placement described in
Section 2(d)(I)(b) below (the "Private Placement"),  or April 1, 1998, whichever
is later, (subject to Section 1(e) hereof) either of the following,  at the sole
election of RHC:

     (A) RHC common stock purchase warrants ("Ottomanelli Warrants") to purchase
at the same  exercise  price (1) such number of shares of Common  Stock as shall
equal  60.0%  of the  Common  Stock  underlying  all RHC  warrants  and  options
outstanding at the Closing Date, but only when and if those warrants and options
are  exercised by their holders and (2) such number of shares of Common Stock as
shall equal  60.0% the Common  Stock  underlying  the  Preferred  Stock or other
securities to be issued by RHC in connection with the Private  Placement (except
for the New Preferred described in Section 2(b)(ii) above), but only when and if
those  securities are converted by the holders of the  securities  issued in the
Private Placement; or

     (B) Such  number of shares of RHC Common  Stock,  in addition to the Common
Stock (the "Other Ottomanelli Issuances") issued to the Shareholders pursuant to
Sections  2(b)(i) and (ii) above, as shall equal,  after issuance,  12.5% of the
RHC Common Stock issued and outstanding,  including for such purpose,  the Other
Ottomanelli Issuances and all shares of Common stock issuable under (1) existing
outstanding  convertible RHC securities (other than the Existing  Preferred) and
(2) the New Preferred, as of the closing date of the Private Placement.

     The Merger  Consideration  shall be  allocated  among the  Shareholders  in
proportion to their respective holdings of the Ottomanelli Corporations' Capital
Stock as set forth in Section 4(b) of the Disclosure Schedule. RHC covenants and
agrees not to issue any shares of RHC Common Stock or any securities convertible
into RHC Common Stock during the period commencing one day prior to the Closing.

<PAGE>

     (c) The  Closing.  The  closing of the  transactions  contemplated  by this
Agreement  (the  "Closing")  shall take place at the offices of Robinson,  Brog,
Leinwand, Greene, Genovese & Gluck, P.C., 1345 Sixth Avenue, New York, New York,
commencing at 2:00 p.m. local time on date hereof (the "Closing Date").

     (d) Recission by the Shareholders.  Notwithstanding the Closing, and unless
both of the following shall occur:

     (i) the completion of a private  placement within three business days after
Closing resulting in gross proceeds to RHC of at least $250,000; and

     (ii) the  completion  of the  Private  Placement,  which shall be an equity
security  placement,  within  60 days of the date on which a  private  placement
memorandum  reasonably   acceptable  to  RHC  and  Commonwealth   Associates  is
available,  in the gross amount of at least $2,000,000  (which Private Placement
shall include a refinancing  or payment of the September  1997  placement in the
amount of $150,000  and the  post-closing  placement  referred to in (i) of this
subsection),  the  Shareholders  shall have the right for  fifteen  (15) days to
rescind the transaction  contemplated by this Agreement and have  transferred to
them all of the stock of the Ottomanelli  Corporations,  upon delivery of all of
the  Merger  Consideration  (other  than as held in escrow  pursuant  to Section
1(e)),  to RHC.  RHC  shall,  in any  event,  bear  all of the  expenses  of the
transactions  contemplated hereby and this Agreement shall otherwise be null and
void.

     (e)  Escrow  of  Portion  of  Merger  Consideration.   Notwithstanding  the
provisions of subsection (b) above, and because Ottomanelli Bros. West, Ltd. and
34th Street Cafe  Associates,  Inc.  have been  excluded  from this  transaction
because Macy's East, Inc. has terminated their licenses  effective  February 21,
1998, one half (1/2) of any Merger  Consideration  otherwise  deliverable to the
Shareholders shall instead be placed in escrow with Hollenberg,  Levin, Solomon,
Ross,  Beisky & Daniels,  LLP pursuant to an escrow agreement  annexed hereto as
Exhibit  B. It is  anticipated  that  RHC  will  acquire  or  build  one or more
restaurants  following  the Closing  (those  acquired or built  within 12 months
after the Closing are referred to as the "Subject Restaurants"). If and when the
sales (net of taxes and tips) of each  Subject  Restaurant  for the first twelve
months of its operations,  when  aggregated for all of the Subject  Restaurants,
totals  at  least  $4,500,000,  the  Merger  Consideration  in  escrow  shall be
delivered to the  Shareholders.  If such condition is not satisfied,  the Merger
Consideration in escrow shall instead be delivered to RHC.

     3.  Modification  to  Section  3.  Section  3(b) of the 1997  Agreement  is
modified to add Section 3(b)(xiii) which shall read as follows:

     "(xiii) Schedule  3(b)(xiii)  annexed hereto sets forth as of one day prior
to the  Closing  Date:  (a) the  capitalization  of RHC;  (b)  all  current  and
long-term debt of RHC; (c) all contingent  obligations of RHC; (d) the amount of
authorized capital stock of RHC; (e) the number of issued and outstanding shares
of Common  Stock  and  preferred  stock of RHC;  (f) the  number  of issued  and
outstanding  options  and  warrants;  and (g) a  description  of the  terms  and
principal amount of all outstanding debt securities of RHC."

<PAGE>

     4. Modification to Section 7.

     (a) Section 7(a)(xiii) of the 1997 Agreement is amended to read as follows:

     "(xiii) RHC shall have received a commitment  letter in usual and customary
form from  Commonwealth  Associates to effect and close the Private Placement of
equity  securities  with gross proceeds of at least  $2,000,000 on behalf of RHC
within 60 days of the date on which a private  placement  memorandum  reasonably
acceptable to RHC and Commonwealth Associates is available."

     (b) Section 7(b)(vii) of the 1997 Agreement is amended to read as follows:

     "(vii) There shall be in fill' force and effect agreements  entered into by
RHC with respect to (a) $150,000 of RHC Debt held by J.L.B. of Nevada,  Inc. and
Michael Lauer,  the conversion of which into Common Stock shall be automatically
effected by the Closing; and (b) a contract of sale for the Fairfield restaurant
having a purchase price of at least $350,000 and a cash payment at closing of at
least  $120,000 with the balance in the form of a second  promissory  note (said
cash at closing to be paid to the holder of the debt on the Fairfield restaurant
and said  promissory  note to be pledged to the holder of such  debt),  with the
balance to be paid to the holder of the debt from the  proceeds  of the  Private
Placement."

     (c) Section 7(b)(viii) of the 1997 Agreement is amended to read as follows:

     "(viii) RHC shall have received a commitment  letter in usual and customary
form from  Commonwealth  Associates to effect and close the Private Placement of
equity  securities  with gross proceeds of at least  $2,000,000 on behalf of RHC
within 60 days of the date on which a private  placement  memorandum  reasonably
acceptable to RHC and Commonwealth Associates is available."

     (d) Section 7(b)(x) of the 1997 Agreement is amended to read as follows:

     "(x) RHC shall  have  entered  into an  agreement  with the  holders of the
Existing  Preferred to exchange the same for the New Preferred,  as contemplated
by Section 2(a)(ii) hereof."

     (e) Section 7(b)(xii) of the 1997 Agreement is hereby deleted.

<PAGE>

     5.  Exhibits  D and  E.  With  respect  to  Exhibits  E and F of  the  1997
Agreement, Article IV of each Exhibit, entitled "Options", any reference to same
contained in Exhibits E and F, is hereby deleted.

     6. Interim  Financial  Statements.  The balance  sheets of the  Ottomanelli
Corporations  as of  September  30, 1997 (the  "Balance  Sheet  Date") and their
income  statements for the period from January 1, 1997 to the Balance Sheet Date
(collectively the "Interim Financial Statements") have heretofore been delivered
by the  Shareholders  to  RHC.  The  Shareholders  represent  that  the  Interim
Financial  Statements present fairly the financial  condition of the Ottomanelli
Corporations  as of  such  dates  and  the  results  of  the  operations  of the
Ottomanelli  Corporations  for such periods,  and shall be  consistent  with the
books and records of the Ottomanelli  Corporations  (which books and records are
correct and complete in all material respects).

     7.  Representation  Letters.  At Closing,  the  Shareholders  shall execute
representation  letters  concerning the Merger  Consideration  in customary form
necessary to permit  counsel to RHC to opine on the  conformity  of the issuance
thereof with applicable securities laws and to confirm the statements made about
them and the Ottomanelli Corporations in a private offering memorandum addressed
to the holder of RHC Preferred  Stock  (including the  termination of the Macy's
operations on or about February 21, 1998).

     8. Committee of the Board. The Shareholders,  as directors of RHC, agree to
vote for the creation of a committee of the Board of Directors to administer the
interest  of RHC  in,  and to take  action  on  behalf  of RHC  concerning,  the
Agreement, of which they shall not be members.

     9. Further  Modification  to Section 3.  Notwithstanding  the provisions of
Section 3(b)(vi) hereof, RHC has advised the other parties that it has not filed
certain exhibits with the Securities and Exchange Commission.  In addition,  RHC
has advised the other parties that the RHC Common Stock is not presently  traded
on either the NASDAQ Small Cap Market or the Boston Stock  Exchange,  and may no
longer be registered under Section 12(b) or 12(g) of the Securities Exchange Act
of 1934.

     10.  Modification to Section 4(h). The  introduction to Section 4(h) of the
1997 Agreement is modified as follows: "Since September 30, 1997".

     11.  Modification to Section 4(i). With respect to Section 4(i) of the 1997
Agreement,  the term  "Financial  Statements"  includes  the  Interim  Financial
Statements.

     12. Full Force and Effect. Except as modified hereunder, the 1997 Agreement
shall continue in full force and effect in accordance with its terms.


<PAGE>



     IN  WITNESS  WHEREOF,  the  undersigned  have  executed  this  Modification
Agreement as of the day and year first above written.

                                        THE RATTLESNAKE HOLDING COMPANY INC.


                                     By:/s/Louis Malikow
                                        ----------------------------
                                        Name:Louis Malikow
                                        Title:   President

                                        /s/Joseph Ottomanelli
                                        ----------------------------
                                        JOSEPH OTTOMANELLI, Individually

                                        /s/Nicolo Ottomanelli
                                        -----------------------------
                                        NICOLO OTTOMANELLI, Individually

OTTOMANELLI BROTHERS WEST, LTD.

By:/s/Nicolo Ottomanelli
   ----------------------------
   Name:    Nicolo Ottomanelli
   Title:   President


OTTOMANELLI'S CAFE FRANCHISING CORP.

By:/s/Nicolo Ottomanelli
   ----------------------------
   Name:    Nicolo Ottomanelli
   Title:   President

34TH ST. CAFE ASSOCIATES, INC.

By:/s/Nicolo Ottomanelli
   ----------------------------
   Name:    Nicolo Ottomanelli
   Title:   President

GARDEN STATE CAFE CORP.

By:/s/Nicolo Ottomanelli
   ----------------------------
   Name:    Nicolo Ottomanelli
   Title:   President