Document:

Exhibit 10.76

 

	
   

  	
   

  	
  [MILLENNIUM HOTELS AND RESORTS LOGO]

  
	
  December 31, 2003

  	
   

  	
   

  

 

	
  MILLENNIUM HOTELS

  
	
  COPTHORNE HOTELS

  

 

Jim Dunn, President/COO

The Smith & Wolensky Restaurant Group, Inc.

1114 First Avenue

New York, NY 10021

 

Re:    One CPS

 

Dear Jim:

 

I have considered our recent discussions and your recent letters to me
relating to One CPS.  I am pleased to
confirm the following on behalf of Plaza Operating Partners, Ltd. (“Owner”):

 

1. Effective January 1, 2004 Owner will pay Parade 59
Restaurant LLC (“Manager”) a minimum Base Management Fee of $50,000 per quarter
in advance, on the first day of each calendar quarter.  The minimum Base Management Fee will be
credited against any “Management Fee” which Manager may become entitled to for
the year 2004 or thereafter under the terms of the Restaurant Management
Agreement dated September 7, 2000, as amended, between Manager and Owner
(the “Management Agreement”).  The
minimum Base Management Fee will be payable so long as the Management Agreement
is in effect.

 

2. Each of Owner and Manager will have the right to fund (or
refuse to fund) any necessary “Additional Working Capital Contributions” (as
defined in the Management Agreement) which may be necessary to fund the
operation of One CPS.  If neither party
is willing to fund required Additional Working Capital Contributions, either
party may terminate the Management Agreement as provided in Section 7 of
that agreement.

 

3. Except as modified in this letter the Management Agreement will
remain in full force and effect.

 

We are pleased to learn of your plans to reopen for breakfast and look
forward to receiving a revised budget to reflect the breakfast reopening.

 

 

	
  145 West 44th Street, 6th Floor

  
	
  New York, New York 10036 USA

  
	
  Telephone 212.789.0700

  
	
  Facsimile 212.789.7660

  
	
  www.millenniumhotels.com

  

 

 

Please confirm your agreement with this letter by signing in the space
provided below.

 

Very truly yours,

 

PLAZA OPERATING PARTNERS, LTD., Owner

 

	
  By:

  	
  New Plaza Associates, LLC, its general partner

  
	
   

  	
   

  
	
  By:

  	
  CDL Hotels U.S.A., Inc., its managing member

  
	
   

  	
   

  
	
  By:

  	
  /s/ Paul Underhill

  	
   

  
	
   

  	
  Paul Underhill, President

  

 

 

Agreed:

 

	
  PARADE 59 RESTAURANT, LLC, Manager

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ James Dunn

  	
   

  
	
   

  
	
   

  
	
  THE SMITH & WOLLENSKY RESTAURANT GROUP, INC, as Guarantor

  
	
   

  
	
  By:

  	
  /s/ James Dunn

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  cc:

  	
  Alan Stillman

  	
   

  
	
   

  	
  Alan Mandel

  	
   

  
	
   

  	
  Todd Noonan

  	
   

  
	
   

  	
  John Wilson

  	
   

  
	
   

  	
  Gary Schweikert

  	
   

  
	
   

  	
  Tom Felderman

  	
   

  

 

2Exhibit
10.77

 

 

LINE OF CREDIT AGREEMENT

 

Dated as of
January 30, 2004

 

Between

 

S&W OF LAS VEGAS, L.L.C.

 

as
Borrower,

 

THE SMITH & WOLLENSKY RESTAURANT
GROUP, INC.

 

as Guarantor

 

and

 

MORGAN STANLEY DEAN WITTER

COMMERCIAL FINANCIAL SERVICES, INC.

 

as
Lender

 

 

BASIC LOAN TERMS

 

	
  Note:

  	
   

  	
  See Schedule I
  below for certain definitions of terms used in these Basic Loan Terms.

  
	
   

  	
   

  	
   

  
	
  Line of Credit
  Commitment:

  	
   

  	
  $2,000,000 (the “Commitment”).

  
	
   

  	
   

  	
   

  
	
  Use of Proceeds:

  	
   

  	
  The proceeds of the
  Advances shall be available (and the Borrower agrees that it shall use such
  proceeds or cause such proceeds to be used) solely for (i) the Borrower’s
  working capital purposes and (ii) closing costs incurred in connection
  herewith. No proceeds of any Advance will be used to purchase or carry any
  such margin stock or to extend credit to others for the purpose of purchasing
  or carrying any such margin stock.

  
	
   

  	
   

  	
   

  
	
  Repayment:

  	
   

  	
  The Borrower shall
  repay to the Lender on the Termination Date the aggregate principal amount of
  the Advances then outstanding.

  
	
   

  	
   

  	
   

  
	
  Interest:

  	
   

  	
  The Borrower shall pay
  to the Lender interest on the unpaid principal amount of each Advance from
  the date of such Advance until such principal amount shall be paid in full,
  at a fluctuating rate per annum equal to the sum of (i) the LIBO Rate in
  effect from time to time plus (ii) 3.0% per annum, payable in arrears
  monthly on the last day of each month and on the date such Advance shall be
  paid in full. For purposes hereof, “LIBO  Rate” means, for any
  day, an interest rate per annum equal to the interest rate set forth in The
  Wall Street Journal (New York City edition) as the one-month London
  Interbank Offered Rate (LIBOR) (or an equivalent rate) for such day (or, if The
  Wall Street Journal shall not be published on any Business Day, any other
  publication selected in good faith by the Lender that sets forth the
  one-month London Interbank Offered Rate), or, if such interest rate shall not
  be so set forth for such day, for the then most recent day for which such
  interest rate is so set forth.

  
	
   

  	
   

  	
   

  
	
  Mandatory and Optional
  Prepayments:

  	
   

  	
  The Borrower may, at
  any time, prepay all or any part of the Advances without premium or penalty.
  If at any time the aggregate unpaid principal amount of the Advances exceeds
  the Commitment, the Borrower shall immediately prepay Advances in an amount
  sufficient to reduce such aggregate unpaid principal amount to an amount that
  is not greater than the Commitment. Such payment shall be applied by the
  Lender to repayment of Advances in such order as the Lender in its sole
  discretion shall select. Upon such prepayment by the Borrower, the Lender
  shall advise the Borrower of, and the Borrower shall immediately pay to the
  Lender, the amount of accrued and unpaid interest at the interest rate set
  forth herein on the amount of such prepayment of each Advance to the date of
  such prepayment.

  
	
   

  	
   

  	
   

  
	
  Payments and
  Computations:

  	
   

  	
  The Borrower hereby
  irrevocably authorizes Morgan Stanley DW from time to time to pay or prepay
  to the Lender on behalf of the Borrower any amount due and payable hereunder
  or under the Note, by application of funds from any Free Credit Balance
  existing at such time or from redemption or other disposition of any MS
  BusinesScape Funds in the Borrower’s MS BusinesScape Account (and

  

 

i

 

	
   

  	
   

  	
  the Borrower hereby
  authorizes Morgan Stanley DW from time to time to redeem or otherwise dispose
  of such MS BusinesScape Funds for the purpose of obtaining funds to make such
  payment or prepayment). The Borrower agrees to deposit or otherwise make
  available to the Borrower’s MS BusinesScape Account for the account of the
  Lender on the day when due and payable, the amount necessary for the purpose
  of making payment of any amount due hereunder or under the Note. To the extent
  that such Free Credit Balance and the value of such MS BusinesScape Funds are
  insufficient for Morgan Stanley DW to so pay to the Lender on behalf of the
  Borrower any such amount due hereunder, the Lender may, in its sole
  discretion, make an Advance pursuant to (and to the extent permitted under)
  Section 2.02(a)(iii) in such amount.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Borrower shall make
  each payment hereunder or under the Note in respect of interest on, principal
  of, or other amount related to the Advances, not later than 12:00 noon (New
  York City time) on the day when due and payable in United States Dollars in
  same day funds, with payments being so received by the Lender after such time
  being deemed to have been made on the next succeeding Business Day.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  All computations of
  interest hereunder or under the Note shall be made by the Lender on the basis
  of a year of 365 or 366 days, as the case may be, in each case for the actual
  number of days (including the first day but excluding the last day) occurring
  in the period for which such interest is payable. Each determination by the
  Lender of an interest rate hereunder or under the Note shall be conclusive
  and binding for all purposes, absent manifest error. Whenever any payment
  hereunder or under the Note shall be stated to be due on a day other than a
  Business Day, such payment shall be made on the next succeeding Business Day,
  and such extension of time shall in such case be included in the computation
  of payment of interest.

  
	
   

  	
   

  	
   

  
	
  Late Charge:

  	
   

  	
  If the Borrower fails
  to make any payment within 15 days after any such payment shall become due,
  the Borrower shall pay to the Lender a late charge equal to 5% of the amount
  of any such overdue payment.

  
	
   

  	
   

  	
   

  
	
  Default Rate:

  	
   

  	
  Upon the occurrence and
  during the continuance of an Event of Default, the interest on the unpaid
  principal amount of all Advances shall be increased, at the option of the
  Lender, to a rate equal to the lesser of two (2%) percent per annum above the
  rate of interest provided herein or the Maximum Rate.

  
	
   

  	
   

  	
   

  
	
  Facility Fee:

  	
   

  	
  The Borrower has or
  will pay to the Lender, on or before the date hereof, a facility fee in the
  amount of $20,000.00. An application fee of $10,000.00 (previously paid by
  the Borrower) shall be credited against such $20,000.00 facility fee.

  
	
   

  	
   

  	
   

  
	
  Unused Availability
  Fee:

  	
   

  	
  The Borrower will pay
  to the Lender an unused availability fee equal to 1.75% per annum on the
  daily unused portion of the Commitment, which fee shall be payable quarterly
  in arrears.

  
	
   

  	
   

  	
   

  
	
  Notices, Etc.:

  	
   

  	
  All notices and other
  communications provided for hereunder shall be in writing (including fax
  communication and any other method of communication authorized by the Lender)
  and mailed, faxed, or otherwise sent or delivered, if to the Borrower or the
  Guarantor, at its address at c/o The Smith & Wollensky

  

 

ii

 

	
   

  	
   

  	
  Restaurant Group, Inc.,
  1114 First Avenue, New York, New York 10021, or fax number (212) 758-6028,
  Attention: Alan M. Mandel, CFO; if to the Lender, at its address at 825 Third
  Avenue, New York, New York 10022, or fax number (212) 310-6256, Attention:
  Director of Credit; or, as to the Borrower, the Guarantor or the Lender at
  such other address or fax number as shall be designated by such party in a
  written notice to the other party. All such notices and communications shall,
  when mailed, faxed, or otherwise sent or delivered, be effective when
  deposited in the mails, faxed, or otherwise sent or delivered, respectively,
  except that notices and communications to the Lender pursuant to
  Article II shall not be effective until received by the Lender. Delivery
  by fax of an executed counterpart of any amendment or waiver of any provision
  of this Agreement or of any schedule or exhibit hereto to be executed
  and delivered hereunder shall be effective as delivery of an original
  executed counterpart thereof.

  

 

The foregoing Basic Loan
Terms are incorporated into and made a part of this Line of Credit Agreement.

 

iii

 

LINE OF CREDIT
AGREEMENT

 

LINE OF CREDIT AGREEMENT,
dated as of January 30, 2004 between S&W OF LAS VEGAS, L.L.C., a
Delaware limited liability company (the “Borrower”), THE SMITH &
WOLLENSKY RESTAURANT GROUP, INC., a Delaware corporation (the “Guarantor”),
and MORGAN STANLEY DEAN WITTER COMMERCIAL FINANCIAL SERVICES, INC., a Delaware
corporation (the “Lender”).

 

PRELIMINARY STATEMENTS:

 

(1)                                  The
Borrower and the Guarantor have requested that the Lender extend to the
Borrower a commercial line of credit.

 

(2)                                  The
Lender has agreed to extend to the Borrower a commercial line of credit on the
terms and conditions hereinafter set forth.

 

NOW, THEREFORE, based on
the foregoing premises and in consideration of the mutual covenants and
agreements contained herein, the parties hereto hereby agree as follows:

 

ARTICLE I

 

 DEFINITIONS, BASIC LOAN AND ACCOUNTING TERMS

 

Section 1.01  Certain Defined Terms.  In addition to the terms defined elsewhere
in this Agreement, the terms used herein shall have the meanings given thereto
in Schedule I annexed hereto and incorporated by reference herein.

 

Section 1.02  Basic Loan Terms, Schedules and Exhibits.  The Basic Loan Terms and all exhibits and
schedules referred to herein are incorporated herein by reference as though set
forth herein in full.

 

Section 1.03  Accounting Terms.  All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, consistent with
those applied in the preparation of the financial statements referred to in
Paragraph (a) of Schedule II.

 

ARTICLE II

 

THE ADVANCES

 

Section 2.01                                The
Advances.  The Lender agrees, on the
terms and conditions hereinafter set forth, to make advances (“Advances”)
to the Borrower from time to time on any Business Day during the period from
the Effective Date hereof until the Termination Date in an aggregate amount
outstanding not to exceed at any time the Commitment.  Within the limits of the Commitment, the Borrower may borrow,
repay and reborrow under this Section 2.01(a).

 

Section 2.02                                Making
the Advances.

 

(a)  An Advance under this Agreement may be made
by the Lender to the Borrower in any of the ways set forth in clauses (i), (ii)
and (iii) below:

 

(i)  The Borrower shall be deemed to have
requested the Lender to make an Advance hereunder on the date of, and in the
amount of, each Uncovered Debit resulting from each use of any Card or any
Check, whether or not such use by any person is authorized by the
Borrower.  The Borrower will not be
liable hereunder (x) for more than $50.00 of principal (plus interest on such
principal) in respect of any Advance made as a result of any unauthorized use
of

 

1

 

any Card by any person
other than a person authorized by the Borrower as a Cardholder (including,
without limitation, as such authorized person any person to whom such
Cardholder has permitted to use such Card) and (y) for any amount in respect of
any Advance made as a result of any unauthorized use of any Card after the
Lender or Morgan Stanley DW shall have been notified of a loss, theft or
unauthorized use of such Card (and, for purposes of this Agreement, no Advance
referred to in clause (x) shall be outstanding in a principal amount more than
$50.00, and no Advance referred to in clause (y) shall be outstanding in any
amount).  The Lender shall make
available to the Borrower, by means of a credit to the Borrower’s MS
BusinesScape Account in United States Dollars and in same day funds, the amount
of such Advance.  The Borrower hereby
authorizes Morgan Stanley DW to apply the proceeds of such Advance to pay
itself in reimbursement for the amount paid by it to Bank One Indiana or Bank
One Ohio relating to such use of such Card or such Check.

 

(ii)  The Borrower may request the Lender, and the
Lender or its Affiliates may make, at the sole and absolute discretion of the
Lender, an Advance by wire transfer (or other means agreed to by the Lender)
hereunder on written notice, given not later than 11:00 a.m. (New York City
time) one (1) Business Day prior to the date of the proposed Advance, by the
Borrower to the Lender.  Each such
notice of an Advance shall be by telephone, confirmed immediately in writing,
or fax or other method then authorized by the Lender, and shall specify therein
the requested (x) date of such Advance, (y) amount of such Advance and (z) the
deposit account to which the wire transfer of such Advance is to be sent.  If the Lender consents to make a wire
transfer, the Lender or its Affiliates shall, on such date, (A) make available
to the Borrower, by means of a credit to the Borrower’s MS BusinesScape
Account, in United States Dollars and in same day funds, the amount of such
Advance, and (B) cause the proceeds of such Advance to be sent by wire transfer
to the deposit account at a bank in the United States as the Borrower may
specify in the notice of such Advance.

 

(iii)  If any accrued interest on any Advances, or
any fee or other amount due and payable under Loan Documents (other than
principal on any Advance) payable hereunder shall not be paid by or on behalf
of the Borrower as contemplated by the Section entitled “Payments and
Computations”, as set forth in the Basic Loan Terms when such interest, fee
or other amount becomes due and payable, the Borrower shall be deemed to have
requested the Lender to make, and shall be deemed to agree to, an Advance
hereunder on the due date of, and in the amount of, such interest, fee or other
amount.  Upon fulfillment of the
applicable conditions set forth in Article III, the Lender may, in its
sole discretion on such date, (A) make available to the Borrower, by means of a
credit to the Borrower’s MS BusinesScape Account in United States Dollars and
in same day funds, the amount of such Advance and (B) cause the proceeds of
such Advance to be applied to the payment of such interest, fee or other
amount.  If, however, on such date the
aggregate outstanding principal amount of the Advances shall be $250,000 or
less, the Borrower may, on or before the 20th day of the month next following
such date, notify the Lender that the Borrower does not so request or agree to
such Advance made pursuant to this clause (iii) and that the Borrower has paid
or will pay such interest, fee or other amount by other means.  If the Borrower shall so notify the Lender,
such Advance and such application of proceeds pursuant to this clause (iii)
shall be cancelled and the Lender shall be deemed not to have so made such
Advance or applied the proceeds thereof (and, for purposes of this Agreement,
such Advance shall not be outstanding). 
If, however, the Borrower shall not so notify the Lender on or before
such 20th day, the Borrower shall be deemed to have confirmed its agreement to
such Advance.

 

(b)  The obligation of the Lender to make the
Advances is subject to fulfillment of the conditions set forth in Article III
hereof.

 

2

 

Section 2.03                                Terms
of Advances and Repayment.  The
Advances shall bear interest and be repaid in accordance with the terms and
conditions set forth in the Basic Loan Terms.

 

Section 2.04                                Taxes.  The Borrower shall pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or from the
execution, delivery or registration or recording of, performing under, or
otherwise with respect to, this Agreement, the Note, the Deed of Trust or any
other Loan Document.

 

Section 2.05                                Evidence
of Debt.  The Lender shall maintain
in accordance with its usual practice an account or accounts evidencing the indebtedness
of the Borrower to the Lender resulting from the Advances from time to time,
including the amounts of principal and interest payable and paid to the Lender
from time to time hereunder or under the Note. 
Entries made in good faith by the Lender in such account or accounts
shall be prima  facie evidence of the amount of principal and
interest due and payable or to become due and payable from the Borrower to the
Lender under this Agreement, absent manifest error, provided, however,
that the failure of the Lender to make an entry, or any finding that an entry
is incorrect, in such account or accounts shall not limit or otherwise affect
the obligations of the Borrower under the Note, this Agreement or any other
Loan Document.

 

Section 2.06.                             NRS
106.300-400.  Notwithstanding
anything to the contrary contained in this Agreement, if the Lender shall
receive a notice of termination contemplated under NRS 106.300-400 (referred to
in Paragraph 55 of the Deed of Trust), the Commitment shall immediately and
automatically terminate and the Borrower shall cease to be entitled to any
Advance hereunder.  Moreover, the Lender
shall not be required to pay any Check or to fund any use of the Card after
receipt of such notice.  The Borrower
and the Guarantor agree that no inference of a Commitment larger than
$2,000,000 shall be drawn from the $3,000,000 figure set forth in the said
Paragraph 55.

 

ARTICLE III

CONDITIONS OF LENDING

 

Section 3.01  Conditions Precedent to First Advance.  The Borrower will be entitled to receive the
first Advance on and as of the first date (the “Effective Date”) on
which all of the following conditions precedent have been satisfied:

 

(a)  The Borrower shall have established the MS
BusinesScape Account.

 

(b)  The Lender shall have received, and be
satisfied with, any amendments to the organizational documents for the Borrower
and the Guarantor since the date of the closing of the loan made pursuant to
the Second Loan Agreement, as may be requested by the Lender.

 

(c)   The Guarantor shall own all the membership
interests in the Borrower and shall be the sole member of the Borrower.

 

(d)  The Borrower shall have paid the facility
fee payable pursuant to the Basic Loan Terms, as well as the other payment
items set forth on the Closing Agenda including, without limitation, the fees
and disbursements of New York and Nevada counsel to the Lender associated
herewith.

 

(e)  The Lender shall have received, and be
satisfied with, the documents and other items listed on the Closing Agenda
including, without limitation, a copy of the rent roll for the Trust Property,
a certified copy of the Subject Lease and an estoppel certificate from the
lessor under the Subject Lease.

 

(f)  The following statements shall be true (and
the execution and delivery of this Agreement and the other Loan Documents by
the Borrower and the Guarantor shall constitute a representation and warranty
by the Borrower and the Guarantor that on the date of such execution and
delivery such statements are true):

 

3

 

(i)  the representations and warranties of the
Borrower and the Guarantor contained in Section 4.01 hereof and in each
other Loan Document are correct on and as of the date of such execution and
delivery of the Loan Documents, before and after giving effect to any Advance
made that day and to the application of the proceeds therefrom, as though made
on and as of such date, and

 

(ii)  no event has occurred and is continuing, or
would result from any Advance or from the application of the proceeds
therefrom, that constitutes a Default.

 

(g)  The Lender shall have received such other
approvals, opinions and documents as the Lender may reasonably request.

 

Upon satisfaction of such
conditions, the Borrower hereby authorizes the Lender to insert the Effective
Date of this Agreement on page 1 hereof, whereupon the requested Advances (if
any) shall be made available to the Borrower in accordance with the terms and
conditions hereof.  At any time prior to
the Effective Date, the Lender may, in its sole and absolute discretion,
terminate the obligation it may have, if any, to execute and deliver this
Agreement and make the Advances, whereupon any obligation of the Lender to make
the Advances set forth herein or in any other document executed in connection
herewith shall terminate and be void and of no force and effect.

 

Section 3.02  Conditions Precedent to Each Advance.  The obligation of the Lender to make each
Advance shall be subject to the satisfaction of the following conditions
precedent before or concurrently with the making of such Advance:

 

(a)  The following statements shall be true (and
the acceptance by the Borrower of the proceeds of such Advance shall constitute
a representation and warranty by the Borrower that on the date of such Advance
such statements are true):

 

(i)  the representations and warranties of the
Borrower and the Guarantor contained in Section 4.01 hereof and in each
other Loan Document are correct in all material respects on and as of the date
of such Advance, before and after giving effect to such Advance and to the
application of the proceeds therefrom, as though made on and as of such date,
and

 

(ii)  no event has occurred and is continuing, or
would result from such Advance or from the application of the proceeds
therefrom, that constitutes a Default.

 

(b)  The Lender shall have received such other
approvals, opinions and documents as the Lender may reasonably request.

 

ARTICLE IV

 

REPRESENTATIONS
AND WARRANTIES

 

Section 4.01  Representations and Warranties of the
Borrower and the Guarantor.  In
addition to the representations and warranties set forth in Schedule II,
each of the Borrower and the Guarantor represents and warrants as follows:

 

(a)  The Borrower and the Guarantor (i) are each
duly organized, validly existing and in good standing under the laws of the
state of its organization, (ii) are each duly qualified and in good standing as
a foreign limited liability company or corporation (as applicable) in each
other jurisdiction (including Nevada, in the case of the Borrower) in which it
owns or leases property or in which the conduct of its business requires it to
so qualify, except where the failure to so qualify would not be reasonably
likely to have a Material Adverse Effect, and (iii) has all requisite organizational
power and authority (including, without limitation, all governmental licenses,
agreements and other approvals) to own and lease and operate its respective
properties and to carry on its respective business as now conducted and as
proposed to be conducted.

 

4

 

(b)  The execution, delivery and performance by
the Borrower and the Guarantor of the Loan Documents to which each of them is a
party are within their respective organizational powers, have been duly
authorized by all necessary limited liability company or corporate action (as
applicable), and do not contravene (i) the Borrower’s or the Guarantor’s
charter, by-laws, articles of organization or incorporation or limited
liability company agreement (as applicable), (ii) any law or any contractual
restriction binding on or affecting the Borrower or the Guarantor, (iii) result
in the breach of, or constitute a default or require any payment to be made
under, any loan agreement, credit agreement, indenture, mortgage, deed of
trust, bond, note, lease or other instrument or agreement binding on or
affecting the Borrower, the Guarantor or any of their properties, or (iv)
except for the Liens created under the Loan Documents, result in or require the
creation or imposition of any Lien upon or with respect to any of the
properties of the Borrower or the Guarantor.

 

(c)  No authorization or approval or other action
by, and no notice to or filing with, any governmental authority or regulatory
body or any other third party is required for (i) the due execution, delivery
and performance by the Borrower or the Guarantor of the Loan Documents to which
either of them is a party, or (ii) the grant by the Borrower of the Liens
granted by it pursuant to the Collateral Documents to which it is a party.

 

(d)  The Loan Documents to which the Borrower or
the Guarantor are a party have been duly executed and delivered by the Borrower
and the Guarantor, and are the legal, valid and binding obligations of the
Borrower and the Guarantor enforceable against the Borrower and the Guarantor
in accordance with their respective terms. 
The “Loan Documents” (as such term is defined in each of the First Loan
Agreement and in the Second Loan Agreement, respectively)  to which the Borrower or the Guarantor are a
party remain in full force and effect, subject to the effect of the Covenants
Agreement.

 

(e)  Except as set forth in the Guarantor’s most
recent 10-K filing with the Securities and Exchange Commission, there is no
pending or threatened action or other proceeding affecting the Borrower or the
Guarantor before any court, governmental agency or arbitrator that (i) could be
reasonably likely to have a Material Adverse Effect, or (ii) purports to affect
the legality, validity or enforceability of this Agreement, the Note, the Deed
of Trust or any other Loan Document to which the Borrower or the Guarantor is a
party, or any of the “Loan Documents” as that term is used in the First Loan
Agreement and the Second Loan Agreement, or the consummation of any of the
transactions contemplated hereby or thereby.

 

(f)  The Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock, as
defined in Regulation U issued by the Board of Governors of the Federal Reserve
System, and no proceeds of any of the Advances will be used to purchase or
carry any such margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock.

 

(g)  The Guarantor owns all of the issued and
outstanding membership interests in the Borrower and is the sole manager of the
Borrower.

 

(h)  To the best of their knowledge, the Trust
Property is in material compliance with all applicable laws, rules, regulations
and orders including, without limitation, those relating to use, occupancy,
fire, safety and zoning (including those in respect of parking and set-back
requirements).  To the best of their
knowledge, the Trust Property is not the subject of any noted violation of
law.  To the best of their knowledge,
there have been no changes or introductions to, removals from or activites
conducted on the Trust Property that would adversely alter or effect the
environmental assessment of the Trust Property which was reviewed in connection
with the closing under the First Loan Agreement.

 

(i)  There have been no exterior changes to the
buildings or other improvements located at the Trust Property (and no additions
at the Trust Property) other than conversion of a garbage shed to a

 

5

 

concrete structure, since
the date of the survey certified to the Lender and insured by the Lender’s
existing title policy issued in connection with the closing under the First
Loan Agreement.

 

(j)  The License Agreement and the Sublicense
Agreement are unamended and in full force and effect, and there are no defaults
thereunder, or events which with the giving of notice and/or the passage of
time, could result in a default thereunder.

 

(k)  “S&W of Las Vegas, L.L.C.” is the proper
legal name of the Borrower and it is a Delaware limited liability company.  “The Smith & Wollensky Restaurant Group,
Inc.” is the proper legal name of the Guarantor and it is a Delaware
Corporation.  As of the Effective Date,
each of the Borrower and the Guarantor have only those Subsidiaries and
Affiliates as are listed on Schedule 4.01(k).

 

(l)                                     To
the best of their knowledge, there are no “Events of Default”, or events that
with the giving of notice, the passage of time or both, shall become “Events of
Default”, existing and/or continuing under the First Loan Agreement the Second
Loan Agreement, or under any documents entered into in connection with either
of them.  For the purposes of this
clause (l), the term “Events of Default” shall have the meaning assigned to
such term in the First Loan Agreement or the Second Loan Agreement, as
applicable.

 

(m)                               The
Borrower, each of its Affiliates and each Person who, to its knowledge has an
economic interest in the Borrower, or, to the Borrower’s knowledge, has or will
have an interest in the transaction contemplated by this Agreement or in the
Trust Property or will participate, in any manner whatsoever, in the Loan,
is:  (i) not a “blocked” person listed
in the Annex to Executive Order Nos. 12947, 13099 and 13224 and all
modifications thereto or thereof (as used in this Section only, the
“Annex”); (ii) in full compliance with the requirements of the USA Patriot Act
of 2001, 107 Public Law 56 (October 26, 2001) and in other statutes and
all orders, rules and regulations of the United States government and its
various executive departments, agencies and offices, related to the subject
matter of the Patriot Act, including Executive Order 13224 effective
September 24, 2001 (the “Patriot Act”) and all other requirements
contained in the rules and regulations of the Office of Foreign Assets Control,
Department of the Treasury (as used in this Section only, “OFAC”); (iii)
operated under policies, procedures and practices, if any, that are in
compliance with the Patriot Act and available to the Lender for the Lender’s
review and inspection during normal business hours and upon reasonable prior
notice; (iv) not in receipt of any notice from the Secretary of State or the
Attorney General of the United States or any other department, agency or office
of the United States claiming a violation or possible violation of the Patriot
Act; (v) not listed as a Specially Designated Terrorist (as defined in the
Patriot Act) or as a “blocked” person on any lists maintained by the OFAC
pursuant to the Patriot Act or any other list of terrorists or terrorist
organizations maintained pursuant to any of the rules and regulations of the
OFAC issued pursuant to the Patriot Act or on any other list of terrorists or
terrorist organizations maintained pursuant to the Patriot Act; (vi) not a
Person who has been determined by competent authority to be subject to any of
the prohibitions contained in the Patriot Act; and (vii) not owned or
controlled by or now acting and or will in the future act for or on behalf of
any Person named in the Annex or any other list promulgated under the Patriot
Act or any other Person who has been determined to be subject to the
prohibitions contained in the Patriot Act.

 

ARTICLE V

 

COVENANTS OF THE
BORROWER

 

Section 5.01  Affirmative Covenants.  So long as any Advance shall remain unpaid
or the Lender shall have any Commitment hereunder, the Borrower (and, where
specifically indicated, the Guarantor) will (in addition to those affirmative
covenants set forth on Schedule II):

 

6

 

(a)  Compliance with Laws, Etc.  Comply and cause each of its Subsidiaries to
comply, with all applicable laws, rules, regulations and orders, such
compliance to include, without limitation, compliance with ERISA.

 

(b)  Payment of Taxes, Etc.  Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent, (i)
all taxes, assessments and governmental charges or levies imposed upon it or
upon its property subject to the right to contest as set forth in the Deed of
Trust and (ii) all lawful claims that, if unpaid, might by law become a Lien
upon its property.

 

(c)  Maintenance of Insurance.  Maintain, and cause each of its Subsidiaries
to maintain, insurance as required under the Deed of Trust and the Security
Agreement, and otherwise with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Borrower or such Subsidiary operates.  Each of the Borrower and the Guarantor shall
maintain insurance coverage which complies with the workers’ compensation and
employees’ liability laws of all states in which the Borrower and the Guarantor
shall be required to maintain such insurance.

 

(d)  Preservation of Corporate or Limited
Liability Company Existence, Etc. 
Preserve and maintain, and cause each of its Subsidiaries to
preserve and maintain, the Borrower’s limited liability company existence, and
the Guarantor’s corporate existence, as well as their respective rights
(charter and statutory) and franchises.

 

(e)  Visitation Rights.  In the case of the Borrower and the
Guarantor, at any reasonable time and from time to time, upon reasonable notice
during normal business hours, permit the Lender or any agents or
representatives thereof, to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Borrower and
the Guarantor, and any of their respective Subsidiaries, and to discuss the
affairs, finances and accounts of the Borrower and the Guarantor, and any of
their respective Subsidiaries, with any of their officers or directors and with
their independent certified public accountants.

 

(f)  Keeping of Books.  In the case of the Borrower and the
Guarantor, keep, and cause each of their respective Subsidiaries to keep,
proper books of record and account, in which full and correct entries shall be
made of all financial transactions and the assets and business of the Borrower
and the Guarantor in accordance with GAAP.

 

(g)  Maintenance of Properties, Etc.  Maintain and preserve, and cause each of its
Subsidiaries to maintain and preserve, all of its properties that are used or
useful in the conduct of its business (i) as required under the Deed of Trust
and the Security Agreement with respect to the Trust Property and (ii)
otherwise in good working order and condition, ordinary wear and tear excepted.

 

(h)  Transactions with Affiliates.  Conduct, and cause each of its Subsidiaries
to conduct, all business or transactions otherwise permitted under the Loan
Documents with any of the Borrower’s Affiliates on terms that are fair and
reasonable and no less favorable to the Borrower than it would obtain in a
comparable arm’s-length transaction with a Person not an Affiliate.

 

(i)  Reporting Requirements. In the case
of the Borrower and the Guarantor, furnish to the Lender all financial statements,
reports, documents and other information at the times and in accordance with
the requirements set forth in Paragraph (b) of Schedule II.

 

(j)  Maintenance of MS BusinesScape Account.  In the case of the Borrower and the
Guarantor, maintain its MS BusinesScape Account.

 

(k)  Further Assurances.  In the case of the Borrower and the
Guarantor, promptly upon request by the Lender, do, execute, acknowledge,
deliver, record, re-record, file, re-file, register and re-register any and all
such further acts, deeds, conveyances, pledge agreements, mortgages, deeds of
trust,

 

7

 

trust deeds, assignments,
financing statements and continuations thereof, termination statements, notices
of assignment, transfers, certificates, assurances and other instruments as the
Lender may reasonably require from time to time in order to (i) carry out more
effectively the purposes of the Loan Documents, (ii) to the fullest extent
permitted by applicable law, subject the Borrower’s or any of its Subsidiaries’
properties, assets, rights or interests to the Liens now or hereafter intended
to be covered by any of the Collateral Documents, (iii) perfect and maintain
the validity, effectiveness and priority of any of the Collateral Documents and
any of the Liens intended to be created thereunder and (iv) assure, convey,
grant, assign, transfer, preserve, protect and confirm more effectively unto
the Lender the rights granted or now or hereafter intended to be granted to the
Lender under any Loan Document or under any other instrument executed in
connection with any Loan Document to which the Borrower or the Guarantor or any
of their respective Subsidiaries is or is to be a party, and cause each of its
Subsidiaries to do so.

 

(l)  Subordination of Borrower Obligations.  At the request of the Lender, all
obligations of the Borrower to the Guarantor will be subordinated to the
obligations of the Borrower to the Lender under the Loan Documents, which
subordination shall be pursuant to documentation in form and substance
satisfactory to the Lender.

 

(m)  License Agreement.  In the case of the Borrower and the
Guarantor, preserve, protect, renew and keep in full force and effect its
rights, licenses, permits, patents, trademarks, trade names and franchises,
including, without limitation, the rights granted to the Guarantor under the
License Agreement and the rights granted to the Borrower under the Sublicense
Agreement.

 

Section 5.02  Negative Covenants.  So long as any Advance shall remain unpaid
or the Lender shall have any Commitment hereunder, the Borrower (and the
Guarantor as to subparagraphs (i) and (j) below) will not (in addition to those
negative covenants set forth in Schedule II):

 

(a)  Liens, Etc.  Create or suffer to exist, any Lien on or with respect to any of
its properties, whether now owned or hereafter acquired, other than as set
forth in Paragraph (c) of Schedule II.

 

(b)  Mergers, Etc.  Merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its assets to (whether
now owned or hereafter acquired), any Person, or permit any of its Subsidiaries
to do so.

 

(c)  Debt.  Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Debt other than
as set forth in Paragraph (d) of Schedule II.

 

(d)  Change in Nature of Business, Management
or Ownership.  Make, or permit any
of its Subsidiaries to make, any material change in the nature of its business
as carried on at the date hereof, in the identity of the manager of the
Borrower (under its limited liability company agreement), or in the composition
of the current executive management of the Borrower or in its equity ownership,
or operate the restaurant at the Trust Property under any name other than
“Smith & Wollensky”. 
Notwithstanding the foregoing, the withdrawal of Alan N. Stillman from
the management of the Borrower shall not constitute a breach of this Section 5.02(d),
provided that the Lender is reasonably satisfied with the Borrower’s management
following such withdrawal.

 

(e)  Sales, Etc., of Assets.  Sell, lease, transfer or otherwise dispose
of, or permit any of its Subsidiaries to sell, lease, transfer or
otherwise  dispose of, any assets, or
grant any option or other right to purchase, lease or otherwise acquire any
assets other than (i) assets to be sold in the ordinary course of business and
(ii) assets to be sold or disposed of in the ordinary course of business which
are no longer necessary or required in the conduct of its business. The
forgoing exceptions (i) and (ii) are subject to compliance with the applicable
Collateral Documents.

 

8

 

(f)  Investments in Other Persons.  Create or acquire any Subsidiary without the
express written consent of the Lender, or make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person.

 

(g)  Restricted Payments.  Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its membership
interests now or hereafter outstanding, return any capital to its members (or
the equivalent Persons thereof) as such, make any distribution of assets,
membership interests, obligations or securities to its members (or the
equivalent Persons thereof) as such, or issue or sell any membership interests.

 

(h)  Lease Obligations.  Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to credit, incur, assume or suffer to exist, any
obligations as lessee other than as set forth in Paragraph (e) of
Schedule II.

 

(i)  Fee Ownership of Property.  Acquire, or permit or any Affiliate of the
Borrower (including the Guarantor) to acquire, fee ownership of the property
leased under the Subject Lease (and the improvements and equipment thereon)
unless simultaneously with such acquisition, the Lender obtains a first
priority fee deed of trust encumbering such property, improvements and
equipment in form and substance satisfactory to the Lender.

 

(j)  License Agreement and Sublicense
Agreement.  Enter into any amendment
to the License Agreement or the Sublicense Agreement without the written
consent of the Lender, which consent shall not unreasonably withheld.

 

ARTICLE VI

 

EVENTS OF DEFAULT

 

Section 6.01  Events of Default.  If any of the following events (“Events
of Default”) shall occur and be continuing:

 

(a)  The Borrower shall fail to pay (i) any
principal of any Advance when the same becomes due and payable; or (ii) the
Borrower shall fail to pay any interest or to make any payment of fees or other
amounts payable under this Agreement or the Note within five days after the
same becomes due and payable; or

 

(b)  Any representation or warranty made by the
Borrower or the Guarantor (or by any of their respective officers, or members)
herein or in any other Loan Document, or in connection with this Agreement or
any other Loan Document, shall prove to have been incorrect or misleading in
any material respect when made or as of the date of the Loan; or

 

(c)  (i) The Borrower or the Guarantor (as
applicable) shall fail to perform or observe any term, covenant or agreement
contained in Section 5.01(c), (d), (h), (j), (l), or (m), 5.02, or in the
Covenants Agreement; or (ii) the Borrower or the Guarantor (as applicable)
shall fail to perform or observe any other term, covenant or agreement
contained in this Agreement on its part to be performed or observed if such
failure described in this subsection (c)(ii) shall remain unremedied for
10 business days after the earlier of (x) the time the Borrower or such
Guarantor (as applicable) becomes aware or should have reasonably become aware
of such failure, or (y) notice from the Lender; or (iii) the Guarantor shall at
any time cease to own all of the membership interests in the Borrower; or (iv)
an “Event of Default” (as defined therein, where applicable) or a default
beyond applicable periods of notice and grace, if any, shall occur under a Loan
Document other than this Agreement; or

 

(d)  (i) The Borrower or the Guarantor shall fail
to pay any principal of or premium or interest on any Debt (other than the Debt
outstanding hereunder) of the Borrower or the Guarantor (as the case may be),
when the same becomes due and payable (whether by scheduled maturity, required

 

9

 

prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable
grace period, if any, specified in the agreement or instrument relating to such
Debt; or (ii) any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Debt; or any such Debt shall be declared
to be due and payable, or required to be prepaid or redeemed (other than by a
regularly scheduled required prepayment or redemption), purchased or defeased,
or an offer to prepay, redeem, purchase or defease such Debt shall be required
to be made, in each case prior to the stated maturity thereof.  The provisions of clause (i) of this
subparagraph (d) shall apply to (x) any Debt of the Borrower or the Guarantor
to the Lender or any of its Affiliates in any amount, and (y) any Debt to any
other creditor for borrowed money in excess of $100,000 with respect to the
Borrower, and $1,000,000 with respect to the Guarantor, unless the Lender
determines, in its reasonable judgment, that the default to such other creditor
is subject to a bona fide dispute; or

 

(e)                                  Either
the Borrower or the Guarantor shall voluntarily dissolve, liquidate or
terminate operations, or shall generally not pay its debts as such debts become
due, or shall admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors; or any proceeding
shall be instituted by or against the Borrower or the Guarantor seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either (A) such
proceeding shall remain undismissed or unstayed for a period of 10 days, or (B)
any of the actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or for any substantial
part of its property) shall occur; or the Borrower or the Guarantor shall take
any action to authorize any of the actions set forth above in this subsection (e);
or

 

(f)                                    Any
judgment or order for the payment of money in excess of $100,000 shall be
rendered against the Borrower, or in excess of $200,000 (or $300,000 in the
case of the lawsuit referred to in Paragraph 2(e) of the Covenants Agreement)
shall be rendered against the Guarantor and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or order or (ii)
there shall be any period of ten (10) consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or

 

(g)                                 The
Borrower, the Guarantor or any of the Borrower’s or the Guarantor’ ERISA
Affiliates shall incur one or more of the following:  (i) the occurrence of any ERISA Event; (ii) the partial or
complete withdrawal of the Borrower or the Guarantor, or any of the Borrower’s
or the Guarantor’s ERISA Affiliates from a Multiemployer Plan; or (iii) the
reorganization or termination of a Multiemployer Plan; or

 

(h)                                 Any
Lien granted pursuant to any Collateral Document shall for any reason cease to
be a valid and perfected first priority lien on and security interest in the
Collateral purported to be covered thereby; or

 

(i) The Guaranty or the
Environmental Guaranty shall for any reason cease to be a valid and binding
obligation or enforceable against the Guarantor (or the Borrower, in the case
of the Environmental Guaranty), or (ii) the Guarantor shall repudiate, revoke
or deny any liability under the Guaranty or the Environmental Guaranty (or the
Borrower shall do the same with respect to the Environmental Guaranty); or

 

10

 

(j)                                     A
default beyond any applicable notice and/or grace period shall have occurred
under the License Agreement or the Sublicense Agreement; or

 

(k)                                  A
Change in Control with respect to the Guarantor shall have occurred; or

 

(l)                                     Either
of the Borrower or the Guarantor, or an Affiliate of either of them, or a
holder of any substantial equity interest in any of the Borrower or the
Guarantor or in any such Affiliate shall (i) become named on any list of
persons who are or may be engaged in or who have been or may have been engaged
in possible criminal activity or other wrongdoing, which list is promulgated
under the Patriot Act, or (ii) be indicted, arraigned or custodially detained
on charges involving money laundering or any predicate crime to money
laundering;

 

then, and in any such
event, the Lender may, by notice to the Borrower and the Guarantor, declare the
Advances, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of
which are hereby expressly waived by the Borrower and the Guarantor; provided,
however, that upon the occurrence of any event described in
subsection (e) above, the Loan, all such interest and all such amounts
shall automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower and the Guarantor.

 

ARTICLE VII

 

MISCELLANEOUS

 

Section 7.01  Amendments, Etc.  No amendment or waiver of any provision of
this Agreement nor consent to any departure by the Borrower or the Guarantor
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Lender, the Borrower and the Guarantor, and then such waiver
or consent shall be effective only in the specific instance and for the
specific purpose for which given.

 

Section 7.02  Notices, Etc.  All notices and other communications
provided for hereunder shall be in writing (including fax communication and any
other method of communication authorized by the Lender) and mailed, faxed, or
otherwise sent or delivered as described in the Basic Loan Terms.

 

Section 7.03  No Waiver; Remedies.  No failure on the part of the Lender to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right.  The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.

 

Section 7.04  Costs and Expenses; Indemnification.

 

(a)  The Borrower and the Guarantor jointly and
severally agree to pay on demand all fees, costs and expenses reasonably
incurred by the Lender in connection with the preparation, negotiation,
execution, delivery, administration, modification and amendment of this
Agreement, the Note, the Collateral Documents and the other Loan Documents,
including, without limitation, search, filing and recording fees and taxes,
costs of reappraisals required by the Lender and the fees and expenses of
counsel for the Lender with respect thereto, and with respect to advising the
Lender as to its rights and responsibilities under such documents.  The Borrower and the Guarantor further
jointly and severally agree to pay on demand all fees, costs and expenses
reasonably incurred by the Lender, if any (including, without limitation,
counsel fees and expenses), in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the Note, the
Collateral Documents and the other Loan Documents, including, without
limitation, reasonable fees and expenses of counsel for the

 

11

 

Lender in connection with
the enforcement of rights under this Section 7.04(a).  Each of the Borrower and the Guarantor
hereby authorizes the Lender and its Affiliates at any time and from time to
time, without notice to the Borrower or the Guarantor, and whether or not the
Lender shall have made any demand or an Event of Default shall have occurred,
to charge any account of the Borrower or the Guarantor maintained by the Lender
or its Affiliates against such fees, costs and expenses.  The rights of the Lender and its Affiliates
under this Section are in addition to other rights and remedies
(including, without limitation, rights of set-off) that the Lender and its
Affiliates may have.

 

(b)  The Borrower and the Guarantor agree to
indemnify and hold harmless the Lender and each of its Affiliates and officers,
directors, employees, agents and advisors (each, an “Indemnified Party”)
from and against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in
each case arising out of or in connection with or by reason of (including,
without limitation, in connection with any investigation, litigation or
proceeding or preparation of a defense in connection therewith) this Agreement,
any of the transactions contemplated herein or the actual or proposed use of
the proceeds of the Loan except to the extent such claim, damage, loss,
liability or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party’s gross
negligence or willful misconduct.  In
the case of an investigation, litigation or other proceeding to which the
indemnity in this Section 7.04(b) applies, such indemnity shall be
effective whether or not such investigation, litigation or proceeding is
brought by the Borrower, its directors, equityholders or creditors or an
Indemnified Party or any other Person, whether or not any Indemnified Party is otherwise
a party thereto and whether or not the transactions contemplated hereby are
consummated.  Each of the Borrower and
the Guarantor also agrees not to assert any claim against the Lender, any of
its Affiliates, or any of their directors, officers, employees, attorneys and
agents, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to this Agreement, any of
the transactions contemplated herein or the actual or proposed use of the proceeds
of the Loan.

 

(c)  Without prejudice to the survival of any
other agreement of the Borrower or the Guarantor hereunder, the agreements and
obligations of the Borrower and the Guarantor contained in this
Section 7.04 shall survive the payment in full of principal, interest and
all other amounts payable hereunder, under the Note and the other Loan
Documents.

 

Section 7.05  Right of Set-off.  Upon the occurrence and during the
continuance of any Event of Default, the Lender and its Affiliates are hereby
authorized at any time and from time to time, to the fullest extent permitted
by law, to sell, liquidate, transfer or otherwise apply any assets or
securities of the Borrower or the Guarantor held by the Lender or any of its
Affiliates and set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other indebtedness at any
time owing by the Lender or such Affiliates to or for the credit or the account
of the Borrower or the Guarantor against any and all of the respective
obligations of the Borrower or Guarantor now or hereafter existing under this
Agreement, the Note, the Guaranty, the Environmental Guaranty or any other Loan
Document, whether or not the Lender shall have made any demand under this
Agreement or such other Loan Document and although such obligations may be
unmatured.  The rights of the Lender and
its Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that the
Lender and its Affiliates may have.

 

Section 7.06  Binding Effect; Successors and Assigns.  This Agreement shall become effective on the
Effective Date and thereafter shall be binding upon and inure to the benefit of
the Borrower, the Guarantor, the Lender and their respective successors and
assigns, except that neither the Borrower nor the Guarantor shall have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Lender.

 

12

 

Section 7.07  Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.

 

Section 7.08  Execution in Counterparts.  This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a
signature page to this Agreement by fax shall be effective as delivery of an
original executed counterpart of this Agreement.

 

Section 7.09  Interest Rate Limitation.  Anything herein to the contrary
notwithstanding, if at any time the applicable interest rate, together with all
fees and charges that are treated as interest under applicable law
(collectively, the “Charges”), as provided for herein or in any other
Loan Document, or otherwise contracted for, charged, received, taken or
reserved by the Lender, shall exceed the maximum lawful rate (the “Maximum
Rate”) that may be contracted for, charged, taken, received or reserved by
the Lender in accordance with applicable law, the rate of interest payable on
the Loan, together with all Charges payable to the Lender, shall be limited to
the Maximum Rate.  Neither the Borrower
nor the Guarantor shall ever be liable for unearned interest thereon or shall
ever be required to pay interest thereon in excess of the maximum amount that
may be lawfully charged under applicable law from time to time in effect, and
the provisions of this Section 7.09 shall control over all other
provisions of the Loan Documents that may be in conflict.  If (a) the maturity of the obligations of
the Borrower under Note or this Agreement is accelerated for any reason, (b)
any of such obligations are prepaid and as a result any amounts held to
constitute interest are determined to be in excess of the legal maximum or (c)
the Lender or any other holder of any or all of the obligations of the Borrower
under this Agreement shall otherwise collect moneys that are determined to
constitute interest that would otherwise increase the interest on any or all of
such obligations to an amount in excess of that permitted to be charged by
applicable law then in effect, then all such sums determined to constitute
interest in excess of such legal limit shall, without premium, penalty, be
promptly applied to reduce the then outstanding principal of such obligations
or, at the Lender’s or such holder’s option, shall be promptly returned to the
Borrower or the other payor thereof upon such determination.

 

Section 7.10  Jurisdiction, Etc.

 

(a)  Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in any such New York State court or, to the extent permitted by
law, in such federal court.  Each of the
parties hereto consents to the service of copies of any and all process which
may be served in any such action or proceeding by the mailing of copies of such
process to such party at its address specified in Section 7.02.  Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this
Agreement or any other Loan Document shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Loan Document in the courts of any other jurisdiction.

 

(b)  Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any New York State or federal court.  Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

 

13

 

Section 7.11  Assignments and Participations.  The Lender may assign to one or more Persons
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment and the Advances owing
to it), without notice to, or the consent of the Borrower or the
Guarantor.  The Lender may sell
participations to one or more Persons 
(other than the Borrower or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment and the Advances owing to
it).  The Lender may, in connection with
any assignment or participation or proposed assignment or participation
pursuant to this Section, disclose to the assignee or participant or proposed
assignee or participant, any information relating to the Borrower and the
Guarantor furnished to the Lender by or on behalf of the Borrower or the
Guarantor.  In addition, the terms of
the Note relating to participations of the Note shall be applicable to
participations of the Lender’s rights and obligations under this
Agreement.  The Lender represents that
as of the date hereof, it has no present intention of assigning its rights and
obligations under this Agreement (including, without limitation, all or a
portion of the Loan owing to it); provided, however, the foregoing shall in no
way impair or otherwise alter the Lender’s rights under this Section.

 

Section 7.12  WAIVER OF JURY TRIAL.  EACH OF THE BORROWER, THE GUARANTOR AND THE
LENDER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, THE
ADVANCES OR THE ACTIONS OF THE LENDER OR ANY OF ITS AFFILIATES IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF OR THEREOF.

 

Section 7.13  Severability of Provisions.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.

 

Section 7.14  Headings.  Article, section and paragraph headings in this Agreement
are included herein for convenience of reference only and shall not constitute
a part hereof for any other purpose.

 

Section 7.15  Conflicts.  Conflicts between this Agreement and any of the Collateral
Documents shall be resolved in favor of the latter.

 

Section 7.16  Lender Action.  The Lender shall have the right, but not the
obligation, to take any action at the Borrower’s expense if the Lender
believes, in its reasonable discretion after consultation with Borrower or the
Guarantor, that such action is necessary to avoid the occurrence of a Material
Adverse Effect with respect to the Borrower or the Guarantor, including,
without limitation, curing any defaults under the License Agreement.

 

Section 7.17  Other Loan Agreements.  The parties agree that the Advances shall be
a permitted “Debt”, and the Collateral Documents (as they relate to the
Borrower and the Trust Property) shall be permitted “Liens” as those terms are
used in that certain Term Loan Agreement dated as of August 23, 2002 among
the Borrower, the Guarantor and the Lender, as amended (the “First Loan
Agreement”) and in that certain Term Loan Agreement dated as of
December 24, 2002 among the Borrower, the Guarantor, Dallas S & W,
L.P. and the Lender, as amended (the “Second Loan Agreement”).

 

Section 7.18  Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter
forms.  The words “include”, “includes”
and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have
the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as

 

14

 

referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not
to any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.

 

Section 7.19  Secured Obligation under Security
Agreement.  The parties agree that
the obligations of the Borrower under this Agreement and the other Loan
Documents shall be one of the “Secured Obligations” under the Security
Agreement, and that: (a) the term “Deed of Trust” as used therein shall mean
the “Deed of Trust” (as defined in the First Loan Agreement), the “Deed of
Trust” (as defined in the Second Loan Agreement) and the Deed of Trust (as
defined herein); (b) the term “Assignment of Leases” as used therein shall mean
the “Assignment of Leases” (as defined in the First Loan Agreement), the
“Assignment of Leases” (as defined in the Second Loan Agreement) and the
Assignment of Leases (as defined herein); (c) the term “Credit Agreement” as
used therein shall mean the First Loan Agreement, the Second Loan Agreement and
this Agreement; and (d) all other capitalized terms used, but not defined, in
the Security Agreement (including, without limitation, “Loan Documents” and
“Note”) shall have the meanings given to such terms in the First Term Loan
Agreement, the Second Loan Agreement and in this Agreement, mutatis  mutandis.

 

Section 7.20  Tax Information.  Notwithstanding anything herein to the
contrary, the Borrower and the Guarantor (and any employee, representative or
other agent of either of them) may disclose to any and all Persons, without
limitation of any kind, the U.S. federal income tax treatment and the U.S.
federal income tax structure of the transactions contemplated hereby and all
materials of any kind (including opinions or other tax analyses) that are provided
to the Borrower or the Guarantor (or any employee, representative or other
agent of either of them) relating to such tax treatment and tax structure.  However, no disclosure of any information
relating to such tax treatment or tax structure may be made to the extent
nondisclosure is reasonably necessary in order to comply with applicable
securities laws.

 

 Section 7.21  Collateral Account. 
The covenant added to the First Loan Agreement and the Second Loan
Agreement pursuant to Section 3 of the Amendment to Term Loan Agreements
dated as of August 20, 2003 is hereby incorporated by reference, mutatis
mutandis, into this Agreement.

 

 

[rest of page
deliberately left blank]

 

15

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by their respective
representatives thereunto duly authorized, as of the date first above written.

 

	
   

  	
  S&W OF LAS VEGAS,
  L.L.C.

  
	
   

  	
  By:

  	
  The Smith &
  Wollensky Restaurant Group,

  
	
   

  	
   

  	
  Inc., Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alan M. Mandel

  	
   

  
	
   

  	
   

  	
  Name: Alan M. Mandel

  
	
   

  	
   

  	
  Title: Secretary

  

 

 

	
  STATE OF NEW YORK

  	
  )

  
	
   

  	
  ss.:

  
	
  COUNTY OF NEW YORK

  	
  )

  

 

On the 30th day of
January in the year 2004 before me, the undersigned, a Notary Public in
and for said State, personally appeared Alan M. Mandel, personally known to me
or proved to me on the basis of satisfactory evidence to be the individual
whose name is subscribed to the within instrument and acknowledged to me that
he executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.

 

	
   

  	
  /s/ Maria A. Chang

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
   

  	
  Notarized

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE SMITH &
  WOLLENSKY

  RESTAURANT GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alan M. Mandel

  	
   

  
	
   

  	
   

  	
  Name: Alan M. Mandel

  
	
   

  	
   

  	
  Title: Secretary

  
					

 

	
  STATE OF NEW YORK

  	
  )

  
	
   

  	
  ss.:

  
	
  COUNTY OF NEW YORK

  	
  )

  

 

On the 30th day of
January in the year 2004 before me, the undersigned, a Notary Public in
and for said State, personally appeared Alan M. Mandel, personally known to me
or proved to me on the basis of satisfactory evidence to be the individual
whose name is subscribed to the within instrument and acknowledged to me that
he executed the same in his capacity, and that by his signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.

 

	
   

  	
  /s/ Maria A. Chang

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
   

  	
  Notarized

  	
   

  

 

 

	
   

  	
  MORGAN STANLEY DEAN
  WITTER

  COMMERCIAL FINANCIAL SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Christopher Mayrose

  	
   

  
	
   

  	
   

  	
  Name: Christopher Mayrose

  
	
   

  	
   

  	
  Title: Executive
  Director

  

 

 

	
  STATE OF NEW YORK

  	
  )

  
	
   

  	
  ss.:

  
	
  COUNTY OF NEW YORK

  	
  )

  

 

On the 30th day of
January in the year 2004 before me, the undersigned, a Notary Public in
and for said State, personally appeared Christopher Mayrose, personally known
to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged
to me that he executed the same in his capacity, and that by his signature on
the instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.

 

	
   

  	
  /s/ Eva Marie Aromi

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
   

  	
  Notarized

  	
   

  

 

 

SCHEDULE I

TO LINE OF CREDIT AGREEMENT WITH

S&W OF LAS VEGAS, L.L.C. AND

THE SMITH & WOLLENSKY RESTAURANT GROUP, INC.

CERTAIN DEFINED TERMS

 

As used in this
Agreement, the following terms shall have the following meanings:

 

“Advance” means an
advance by the Lender to the Borrower pursuant to Article II.

 

“Affiliate” means,
as to any Person, any other Person that, directly or indirectly, controls, is
controlled by or is under common control with such Person or is a director or
officer of such Person.  For purposes of
this definition, the term “control” (including the terms “controlling”,
“controlled by” and “under common control with”) of a Person means the
possession, direct or indirect, of the power to vote 5% or more of the voting
stock of such Person or to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting stock, by
contract or otherwise.

 

“Assignment of Leases”
means the Absolute Assignment of Rents and Leases of even date herewith made by
the Borrower in favor of the Lender, as the same may be amended, replaced or
restated from time to time.

 

“Bank One Indiana”
means Bank One, Indiana, NA.

 

“Bank One Ohio”
means Bank One, Columbus , NA, Delaware, Ohio.

 

“Business Day”
means a day of the year on which banks are not required or authorized by law to
close in New York City.

 

“Card” means any
MasterCard Business Card debit card issued by Bank One Indiana for use in
connection with the Borrower’s MS BusinesScape Account applicable to the
Advances.

 

“Change in Control”
means (a) the acquisition of ownership, directly or indirectly, beneficially or
of record, by any Person or group (within the meaning of the Securities
Exchange Act of 1934 and the rules of the Securities and Exchange Commission
thereunder as in effect on the date hereof) of shares representing more than
33-1/3% of the aggregate ordinary voting power represented by the issued and
outstanding capital stock of the Guarantor, or (b) occupation of a majority of
the seats (other than vacant seats) on the board of directors of the Guarantor
by Persons who were neither (i) nominated by the board of directors of the
Guarantor nor (ii) appointed by directors so nominated.

 

“Charges” has the
meaning specified in Section 7.09.

 

“Check” means any
check drawn on Bank One Ohio for use in connection with the Borrower’s MS
BusinesScape Account applicable to the Advances.

 

“Closing Agenda”
means the Closing Agenda prepared by the Lender and delivered to the Borrower
setting forth the documents and other items to be executed and/or delivered,
and payments to be made, by the parties in connection with this Agreement.

 

“Collateral” means
all “Collateral” referred to in the Collateral Documents and all other property
that is or is intended to be subject to any Lien in favor of the Lender.

 

“Collateral Documents”
means the Security Agreement, Deed of Trust, the Assignment of Leases, all
Uniform Commercial Code financing statements with respect to the Collateral and
any other Loan Document pursuant to which any collateral is granted to the
Lender by the Borrower.

 

1

 

“Covenants Agreement”
means the Covenants Agreement and Amendment to Term Loan Agreements of even
date herewith among the Lender, the Borrower, the Guarantor and Dallas S&W,
L.P., detailing certain financial covenants made by the Borrower and/or or the
Guarantor to the Lender, which agreement also amends the First Loan Agreement
and the Second Loan Agreement.

 

“Debt” of any
Person means, without duplication, (a) all indebtedness of such Person for
borrowed money or for the deferred purchase price of property or services
(other than current trade payables incurred in the ordinary course of
business), (b) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (c) all capital lease obligations of
such Person, (d) all obligations of such Person, contingent or otherwise, in
respect of acceptances, letters of credits or similar extensions of credit, (e)
all liabilities secured by any Lien on any property owned by such Person, even
though such Person has not assumed or otherwise become liable for the payment
thereof, (f) all obligations of such Person in respect of interest rate or
currency protection agreements, and (g) all Debt of others guaranteed directly
or indirectly in any manner by such Person. 
The foregoing is intended to include any and all indebtedness arising
under each of the First Loan Agreement and the Second Loan Agreement.

 

“Deed of Trust”
means a third priority Leasehold Deed of Trust of even date herewith made by
the Borrower to the trustee thereunder for the benefit of the Lender and
encumbering the Trust Property, as the same may be amended, replaced or
restated from time to time, and shall include any new (or replacement) fee deed
of trust entered into in the event the Borrower, the Guarantor or an Affiliate
acquires the fee interest in the Trust Property.

 

“Default” means
any Event of Default or any event that would constitute an Event of Default but
for the requirement that notice be given or time elapse or both.

 

“Effective Date”
has the meaning specified in Section 3.01.

 

“Environmental
Guaranty” means the Joint and Several Hazardous Material Guaranty and
Indemnification Agreement of even date herewith made by the Borrower and the
Guarantor in favor of the Lender in respect of the Trust Property, as the same
may be amended, replaced or restated from time to time.

 

“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time,
and the regulations promulgated and rulings issued thereunder.

 

“ERISA Affiliate”
means any Person that for purposes of Title IV of ERISA is a member of the
Borrower’s or controlled group, or under common control with the Borrower or
within the meaning of Section 414 of the Internal Revenue Code.

 

“ERISA Event”
means (a) (i) the occurrence of a reportable event, within the meaning of
Section 4043 of ERISA, with respect to any Plan unless the 30-day notice
requirement with respect to such event has been waived by the PBGC, or (ii) the
requirements of subsection (1) of Section 4043(b) of ERISA (without
regard to subsection (2) of such Section) are met with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a
Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of
Section 4043(c) of ERISA is reasonably expected to occur with respect to
such Plan within the following 30 days; (b) the application for a minimum
funding waiver with respect to a Plan; (c) the provision by the administrator
of any Plan of a notice of intent to terminate such Plan pursuant to Section 4041(a)(2)
of ERISA (including any such notice with respect to a plan amendment referred
to in Section 4041(e) of ERISA); (d) the cessation of operations at a
facility of the Borrower or any ERISA Affiliate in the circumstances described in
Section 4062(e) of ERISA; (e) the withdrawal by the Borrower or The
Guarantor or any ERISA Affiliate from a Multiple Employer Plan during a plan
year for which it was a

 

2

 

substantial employer, as
defined in Section 4001(a)(2) of ERISA; (f) the conditions for the
imposition of a lien under Section 302(f) of ERISA shall have been met
with respect to any Plan; (g) the adoption of an amendment to a Plan requiring
the provision of security to such Plan pursuant to Section 307 of ERISA;
or (h) the institution by the PBGC of proceedings to terminate a Plan pursuant
to Section 4042 of ERISA, or the occurrence of any event or condition
described in Section 4042 of ERISA that constitutes grounds for the termination
of, or the appointment of a trustee to administer, a Plan.

 

“Events of Default”
has the meaning specified in Section 6.01.

 

“First Loan Agreement”
has the meaning specified in Section 7.14.

 

“Free Credit Balance”
means the amount of any cash that may be withdrawn from the Borrower’s MS
BusinesScape Account at any time without creating a negative balance therein or
giving rise to interest charges thereon.

 

“GAAP” means the
generally accepted accounting principles applied in the United States.

 

“Guarantor” means
The Smith & Wollensky Restaurant Group, Inc., a Delaware corporation.

 

“Guaranty” means
the Guaranty of Payment of even date herewith made by the Guarantor in favor of
the Lender in respect of the Loan, as the same may be amended, replaced or
restated from time to time.

 

“Internal Revenue Code”
means the Internal Revenue Code of 1986, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.

 

“Investment” in
any Person means any loan or advance to such Person, any purchase or other
acquisition of any capital stock or Debt or the assets comprising a division or
business unit for a substantial part or all of the business of such Person, any
capital contribution to such Person or any other direct or indirect investment
in such Person, including, without limitation, any acquisition by way of a
merger or consolidation.

 

“License Agreement”
means the Sale and License Agreement dated August 16, 1996 between St.
James Associates and The New York Restaurant Group, LLC pursuant to which, among
other things, the Guarantor possesses the right to use and to sublicense the
trademark “Smith & Wollensky”.

 

“Lien” means any
lien, security interest or other charge or encumbrance of any kind, or any
other type of preferential arrangement having the effect of a lien or security
interest, including, without limitation, the lien or retained security title of
a conditional vendor and any easement, right of way or other encumbrance on
title to real property.

 

“Loan Documents”
means this Agreement, the Note, the Collateral Documents, the Guaranty, the
Covenants Agreement, the Environmental Guaranty and any other documents
executed and/or delivered by the Borrower or the Guarantor in connection
therewith, in each case as amended, supplemented, replaced, restated or
otherwise modified from time to time.

 

“Material Adverse
Change” means any material adverse change in the business, condition
(financial or otherwise), operations, performance, properties or prospects of
the Borrower or the Guarantor, or the Borrower, or the Guarantor and its
Subsidiaries taken as a whole.

 

“Material Adverse
Effect” means a material adverse effect on (a) the business, condition
(financial or otherwise), operations, performance, properties or prospects of
the Borrower or the Guarantor, or the Borrower or the Guarantor and its
Subsidiaries taken as a whole, (b) the rights and remedies of the Lender under
this Agreement or (c) the ability of the Borrower or the Guarantor to perform
its obligations under any Loan Document to which it is a party.

 

“Maximum Rate” has
the meaning specified in Section 7.09.

 

3

 

“Morgan Stanley DW”
means Morgan Stanley DW Inc., a Delaware corporation, or any successor thereof.

 

“MS BusinesScape
Account” means, in respect of the Borrower, the MS BusinesScape Account for
Business maintained by the Borrower at Morgan Stanley DW, MS BusinesScape
Account No.476-040-167 and in respect of the Guarantor, the MS BusinesScape
Account for Business maintained by the Guarantor at Morgan Stanley DW, MS
BusinesScape Account No. 476-027766-427.

 

“MS BusinesScape Funds”
means any of the money market fund shares credited to the Borrower’s MS
BusinesScape Account.

 

“Multiemployer Plan”
means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to
which the Borrower or any ERISA Affiliate is making or accruing an obligation
to make contributions, or has within any of the preceding five plan years made
or accrued an obligation to make contributions.

 

“Multiple Employer
Plan” means a single employer plan, as defined in Section 4001(a)(15)
of ERISA, that (a) is maintained for employees of the Borrower, the Guarantor
or any ERISA Affiliate and at least one Person other than the Borrower, the
Guarantor and the ERISA Affiliates or (b) was so maintained and in respect of
which the Borrower, the Guarantor or any ERISA Affiliate could have liability
under Section 4064 or 4069 of ERISA in the event such plan has been or
were to be terminated.

 

“Note” means the
Promissory Note of even date herewith in the original principal amount of
$2,000,000.00 made by the Borrower in favor of the Lender.

 

“Patriot Act” has
the meaning set forth in Section 4.01(m).

 

“PBGC” means the
Pension Benefit Guaranty Corporation (or any successor).

 

“Person” means an
individual, partnership, corporation (including a business trust), joint stock
company, trust, unincorporated association, joint venture, limited liability
company or other entity, or a government or any political subdivision or agency
thereof.

 

“Plan” means a
Single Employer Plan or a Multiple Employer Plan.

 

“Second Loan Agreement”
has the meaning specified in Section 7.17.

 

“Security Agreement”
means the Security Agreement dated August 23, 2002 made by the Borrower to
the Lender, as the same may have been or may be amended, replaced or restated
from time to time.

 

“Single Employer Plan”
means a single employer plan, as defined in Section 4001(a)(15) of ERISA,
that (a) is maintained for employees of the Borrower, the Guarantor or any
ERISA Affiliate and no Person other than the Borrower, the Guarantor and the
ERISA Affiliates or (b) was so maintained and in respect of which the Borrower,
the Guarantor or any ERISA Affiliate could have liability under
Section 4069 of ERISA in the event such plan has been or were to be
terminated.

 

“Subject Lease”
has the meaning set forth in the Deed of Trust.

 

“Sublicense Agreement”
means the Sublicense Agreement dated August 23, 2002 between the Guarantor
and the Borrower.

 

“Subordinated Debt”
of any Person means all Debt completely subordinated to such Person’s
obligations to the Lender pursuant to a subordination agreement in form and
substance satisfactory to the Lender.

 

4

 

“Subsidiary” of
any Person means any corporation, partnership, joint venture, limited liability
company, trust or estate of which (or in which) more than 50% of (a) the issued
and outstanding voting stock of such corporation, (b) the interest in the
capital or profits of such limited liability company, partnership or joint
venture or (c) the beneficial interest in such trust or estate is at the time
directly or indirectly owned or controlled by such Person, by such Person and
one or more of its other Subsidiaries or by one or more of such Person’s other
Subsidiaries.

 

“Termination Date”
means the earlier of (a) the date which occurs on the second anniversary of the
date hereof, and (b) the date of termination in whole of the Commitment
pursuant to Section  6.01.

 

“Trust Property”
has the meaning given to the term “Trust Property” in the Deed of Trust.

 

“United States Dollars”
means money of the United States of America.

 

“Uncovered Debit”
means any debit that is at any time in the Borrower’s MS BusinesScape Account
resulting from any use of any Card or any Check and that exceeds the remainder
of (i) the sum of the Free Credit Balance and the value of MS BusinesScape
Funds shares in the Borrower’s MS BusinesScape Account at such time minus (ii)
any other debits at such time applicable to the Borrower’s MS BusinesScape
Account resulting from any transactions other than any use of any Card or any
Check.

 

5

 

SCHEDULE II

TO LINE OF CREDIT AGREEMENT WITH

S&W OF LAS VEGAS, L.L.C.  AND

THE SMITH & WOLLENSKY RESTAURANT GROUP, INC.

FINANCIAL REPRESENTATIONS, COVENANTS AND REPORTING

 

(a)  Representation.  The Borrower represents and warrants that
the management prepared unaudited statements of operations for the periods
ended June 30, 2003 and September 30, 2003, copies of which have been
furnished to the Lender, fairly present the financial condition of the Borrower
as at such dates, all in accordance with GAAP consistently applied.  The Guarantor represents and warrants that (i)
the 10-K statement for the 2002 fiscal year and (ii) the 10-Q statement for the
fiscal quarter ended September 30, 2003 fairly present the financial
condition of the Guarantor as at such dates, all in accordance with GAAP
consistently applied.  The Guarantor
represents and warrants that the management prepared break-down of results for
each individual restaurant operated by the Guarantor and each of its
Subsidiaries for the period ended September 30, 2003, a copy of which have
been furnished to the Lender, is true and complete in all material respects as
at such date.  Since the dates of such
statements, there has been no Material Adverse Change.

 

(b)  Reporting Requirements.  So long as any Advance shall remain unpaid
or the Lender shall have any Commitment hereunder, the Borrower and the Guarantor
(as applicable) will furnish to the Lender:

 

(i)  For the Guarantor:  as soon as available and in any event within 45 days after the
end of each quarter of each fiscal year of the Guarantor, consolidated
management prepared (10-Q) financial statements of the Guarantor and its
Subsidiaries as of the end of such quarter, duly certified by the chief
financial officer the Guarantor as having been prepared in accordance with
GAAP, together with a certificate of the chief financial officer of the
Guarantor setting forth in reasonable detail the calculations necessary to
demonstrate compliance with the Covenants Agreement;

 

(ii)  For the Borrower and the Guarantor: as soon
as available and in any event within 45 days after the end of each quarter of
each fiscal year of the Borrower, management prepared financial statements of
the Borrower as of the end of such quarter, duly certified by the sole or
managing member of the Borrower as having been prepared in accordance with
GAAP, together with a certificate of the sole or managing member of the
Borrower setting forth in reasonable detail the calculations necessary to
demonstrate compliance with the Covenants Agreement;

 

(iii)  For the Guarantor:  as soon as available and in any event within 90 days after the
end of each fiscal year of the Guarantor, a copy of the annual audited
financial statements for such year for the Guarantor and its Subsidiaries
(including the Borrower) containing a consolidated balance sheet of the
Guarantor and its Subsidiaries as of the end of such fiscal year and a
consolidated statement of income and cash flows of the Guarantor and its
Subsidiaries for such fiscal year, in each case accompanied by an opinion
acceptable to the Lender and an accountant letter, if issued, by independent public
accountants acceptable to the Lender, together with a certificate of the chief
certified financial officer of the Guarantor setting forth in reasonable detail
the calculations necessary to demonstrate compliance with the Covenants
Agreement;

 

(iv)  For the Borrower as soon as available and in
any event within 90 days after the end of each fiscal year of the Borrower, a
copy of the annual reviewed financial statements for such year for the
Borrower, containing a balance sheet of the Borrower as of the end of such
fiscal year and a

 

1

 

statement of income and
cash flows of the Borrower for such fiscal year, in each case accompanied by an
opinion acceptable to the Lender and an accountant letter, if issued, by
independent certified public accountants acceptable to the Lender, together
with a certificate of the sole or managing member of the Borrower setting forth
in reasonable detail the calculations necessary to demonstrate compliance with
the Covenants Agreement;

 

(v)  For the Borrower, not later than 90 days
after the end of each fiscal year of the Borrower, a detailed rent roll for the
Trust Property in form satisfactory to the Lender;

 

(vi)  As soon as possible and in any event within
five days after the occurrence of each Default continuing on the date of such
statement, a statement of the sole or managing member of the Borrower or the
chief financial officer of the Guarantor setting forth details of such Default
and the action that the defaulting party has taken and proposes to take with
respect thereto;

 

(vii)  together with the filing of each 10-K and
10-Q statement with the Securities and Exchange Commission, a management
prepared break-down of results for each individual restaurant operated by the
Guarantor or any of its Subsidiaries, duly certified by the chief financial
officer of the Guarantor as being true and complete; and

 

(viii)  such other information respecting the
Borrower or the Guarantor or any of the Guarantor’s Subsidiaries as the Lender
may from time to time reasonably request.

 

(c)  Liens, Etc.  So long as any Advance shall remain unpaid or the Lender shall
have any Commitment hereunder, the Borrower will not create or suffer to exist,
any Lien on or with respect to any of its properties, whether now owned or
hereafter acquired, or assign any right to receive income, other than: (i)
Liens created or expressly permitted under the Loan Documents, (ii) purchase
money Liens upon or in any real property or equipment acquired (or leased) or held
by the Borrower in the ordinary course of business to secure the purchase price
of such property or equipment or to secure Debt incurred solely for the purpose
of financing the acquisition (or lease) of such property or equipment, or Liens
existing on such property or equipment at the time of its acquisition or
extensions, renewals or replacements of any of the foregoing for the same or a
lesser amount, provided, however, that no such Lien shall extend
to or cover any properties of any character other than the real property or
equipment being acquired, and no such extension, renewal or replacement shall
extend to or cover any properties not theretofore subject to the Lien being
extended, renewed or replaced, provided further that the aggregate principal amount
of the indebtedness secured by the Liens referred to in this clause (ii) shall
not exceed the amount specified therefor in Paragraph (d) of this
Schedule II at any time outstanding, (iii) the Liens existing on the
Effective Date and described on Schedule 5.02(a) hereto and (iv) Liens
held by the Lender.

 

(d)  Debt.  So long as any Advance shall remain unpaid, the Borrower will not
create, incur, assume or suffer to exist, any Debt other than: (i) Debt
existing on the Effective Date and described on Schedule 5.02(c) hereto,
(ii) Debt secured by Liens permitted by Paragraph (c)(ii) of this
Schedule II aggregating not more than $100,000.00 at any one time
outstanding, (iii) Debt under the Loan Documents, (iv) unsecured Debt incurred
in the ordinary course of business aggregating not more than $200,000.00 at any
one time outstanding and (v) Debt owing to the Lender.

 

(e) Lease Obligations.  So long as any Advance shall remain unpaid,
the Borrower will not create, incur, assume or suffer to exist, any obligations
as lessee (i) for the rental or hire of real or personal property in connection
with any sale and leaseback transaction, or (ii) otherwise, except for the
Subject Lease and equipment leases made in the ordinary course of business, for
the rental or hire of other real or personal property of any kind under leases
or agreements to lease having an original term of one year or more.

 

2

 

SCHEDULE 4.01(k)

TO LINE OF CREDIT AGREEMENT WITH

S&W OF LAS VEGAS, L.L.C. AND

THE SMITH & WOLLENSKY RESTAURANT GROUP, INC.

SUBSIDIARIES/AFFILIATES

 

Atlantic & Pacific
Grill Associates, L.L.C.

 

La Cite Associates,
L.L.C.

 

Manhattan Ocean Club
Associates L.L.C.

 

MOC D.C., L.L.C.

 

MOC of Miami, LLC

 

Mrs. Parks Sub, L.L.C.

 

New York RGI Sub, L.L.C.

 

 Parade 59 Restaurant

 

Restaurant Group
Management Services, L.L.C.

 

S&W of Boston, LLC

 

S&W of Chicago,
L.L.C.

 

S&W D.C., L.L.C.

 

S&W of Miami, L.L.C.

 

S&W of Las Vegas,
L.L.C.

 

S&W of New Orleans,
L.L.C.

 

S&W of Philadelphia,
L.L.C.

 

S&W of Ohio, L.L.C.

 

S&W of Dallas, LLC

 

Smith & Wollensky of
Houston, LLC

 

Smith & Wollensky of
America, LLC

 

1 Washington Avenue Corp.

 

South Pointe Hospitality,
Inc.

 

1

 

SCHEDULE 5.02(a)

TO LINE OF CREDIT AGREEMENT WITH

S&W OF LAS VEGAS, L.L.C. AND

THE SMITH & WOLLENSKY RESTAURANT GROUP, INC.

EXISTING LIENS

 

 

None.

 

1

 

SCHEDULE 5.02(c)

TO LINE OF CREDIT AGREEMENT WITH

S&W OF LAS VEGAS, L.L.C. AND

THE SMITH & WOLLENSKY RESTAURANT GROUP, INC.

EXISTING DEBT

 

 

None.

 

1

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