SMITH & WOLLENSKY RESTAURANT GROUP INC
EX. 10.86 - BUSINESS LOAN AGREEMENT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>ex10-86.txt
<DESCRIPTION>EX. 10.86 - BUSINESS LOAN AGREEMENT
<TEXT>
BUSINESS LOAN AGREEMENT                                          Exhibit 10.86

References  in the shaded  area are for  Lender's  use only and do not limit the
applicability  of this  document to any  particular  loan or item. An item above
containing "***" has been omitted due to text length limitations.


   Borrower: S & w New Orleans, L.LC.      Lender: Hibernia National Bank
   (TIN: 13-3932811)                       Attn: Loan Administration Dept.
   1114 First Ave.                         934 Third Street
   New York, NY 10021                      Alexandria, LA 71301

THIS BUSINESS LOAN AGREEMENT dated May 26, 2004, is made and executed  between S
l W New Orleans,  L.L.C.  ("Borrower"),  and  Borrower's  Members  signing below
("Members"),  and Hibernia  National Bank  ("Lender") on the following terms and
conditions.  Borrower  has  applied  to  Lender  for a loan or  loans  or  other
financial accommodations,  Including those which may be described on any exhibit
or schedule attached to this Agreement ("Loan"). Borrower understands and agrees
that: (A) in granting,  renewing,  or extending any Loan, Lender is relying upon
Borrower's  representations,  warranties,  and  agreements  as set forth in this
Agreement; (8) the granting, renewing, or extending of any Loan by Lender at all
times shall be subject to Lender's  sole  judgment and  discretion;  and (C) all
such Loans  shall be and  remain  subject  to the terms and  conditions  of this
Agreement.

EFFECT OF  AGREEMENT.  The  following  provisions  pertain to the effect of this
Agreement.

Applicability.  This  Agreement  shall  apply to any and all  present and future
Indebtedness, contracts, agreements and undertakings by and between Borrower and
Lender for any purpose whatsoever.

Amendment  to  Operating  Agreement.  This  Agreement  shall for all purposes be
considered and shall have the same effect as an amendment to, and shall comprise
a part of Borrower's Operating Agreement, and shall be binding upon Borrower and
all of  Borrower's  present  and  future  Members.  To  this  end,  all  persons
subsequently  acquiring  Membership Interests in Borrower for all purposes shall
be deemed  to be bound and  obligated  under  the terms and  conditions  of this
Agreement just as if said  subsequently  added Members had signed this Agreement
along with the Members  signing  below,  with the consent and  agreement of such
subsequently  added  Members  to be so bound and  obligated  hereunder  being an
absolute condition precedent to such persons acquiring  Membership  Interests in
Borrower.

APPLICATION  FOR AND PURPOSE OF THE LOAN.  Borrower  has applied to Lender for a
Loan in the aggregate  principal amount of $2,000,000 for the following purpose:
Property updates and term financing..

BORROWER'S NOTE. Lender has agreed to extend a Loan to Borrower in the amount of
$2,000,000  subject to the terms and conditions of this Agreement and Borrower's
attached  Note.  Borrower  agrees to be bound and obligated  under the terms and
conditions of this Agreement and Borrower's Note.

TERM.  This Agreement  shall be effective as of May 26, 2004, and shall continue
in full force and effect until such time as all of Borrower's  Loans in favor of
Lender have been paid in full, including principal,  interest,  costs, expenses,
attorneys'  fees, and other fees and charges,  or until such time as the parties
may agree in writing to terminate this Agreement.

AUTHORIZED  REPRESENTATIVES.  The following  provisions  pertain to, among other
things, the authorization of persons under this Agreement.

Resolutions.  The  Members of  Borrower  have met and have  properly  authorized
certain designated persons ("Authorized  Representatives") to represent Borrower
and to act for and on behalf of Borrower in dealing with  Lender.  To the extent
applicable,  such  Authorized  Representatives  are listed in a separate form of
Resolution or other communication delivered to Lender.

Managers.  Borrower's  present and future  Managers (to the extent that Borrower
has Managers) shall always have the full and unrestricted authority to deal with
Lender and shall be considered  Authorized  Representatives  of Borrower without
the additional necessity of being specifically  designated as such by Borrower's
Members under a formal resolution.

Unrestricted  Authority.  Notwithstanding any provision of Borrower's  Operating
Agreement to the contrary, or any resolution of Borrowers Members not previously
communicated  to  Lender  in  writing,   Borrower's  Authorized  Representatives
(including  without  limitation  Borrower's  Managers)  shall  have the full and
unrestricted  right, power and authority to deal and to contract with Lender and
to otherwise bind and  unrestricted  right,  power and  authority,  from time to
time,  one or more times,  and without the  necessity of  obtaining  the further
approval of all or a majority of Borrower's  Members:  (1) to obtain loans, loan
advances,  and to incur other Indebtedness and obligations in favor of Lender in
any amount and for any purpose,  and whether or not deemed to be in the ordinary
course of  Borrower's  business;  and (2) to sell,  exchange,  lease,  mortgage,
pledge, or otherwise  transfer or encumber or grant Security  Interests in favor
of Lender as affecting any or all or substantially all of the assets and movable
(personal)  and  immovable  (real)  properties  of Borrower,  including  without
limitation,  entering  into  mortgages  and  security  agreements  that  contain
confessions  of judgment and consents to foreclosure  remedies  under  Louisiana
executory  process  procedures;  and (3) otherwise to enter into such agreements
and  to  incur  such   obligations  in  favor  of  Lender  as  such   Authorized
Representatives may deem to be necessary and proper.

Substitute Authorized Representatives.  Lender may continue to deal and contract
with such Authorized  Representatives  on an unrestricted  basis until such time
as: (1) their authority to act for and on behalf of Borrower is formally revoked
and substitute  Authorized  Representatives are properly appointed by Borrower's
Members,  and (2)  Lender is  properly  notified  in  writing  and  accepts  and
acknowledges the same.

CONDITIONS  PRECEDENT TO EACH ADVANCE.  Lender's  obligation to make the initial
Advance and each subsequent Advance under this Agreement shall be subject to the
fulfillment to Lender's  satisfaction of all of the conditions set forth in this
Agreement and in the Related Documents.

Loan Documents. Borrower shall provide to Lender the following documents for the
Loan:  (1) the  Note;  (2)  Security  Agreements  granting  to  Lender  security
interests in the  Collateral,  (3) financing  statements and all other documents
perfecting  Lender's Security  Interests;  (4) evidence of insurance as required
below;  (5) guaranties,  (6) together with all such Related  Documents as Lender
may require for the Loan; all in form and substance  satisfactory  to Lender and
Lender's counsel.

Borrower's  Authorization.  Borrower  shall have  provided in form and substance
satisfactory  to Lender properly  certified  resolutions,  duly  authorizing the
execution and delivery of this Agreement, the Note and the Related Documents. In
addition,  Borrower shall have provided such other resolutions,  authorizations,
documents and instruments as Lender or its counsel, may require.

Payment  of Fees and  Expenses.  Borrower  shall  have paid to Lender  all fees,
charges,  and other expenses which are then due and payable as specified in this
Agreement or any Related Document.

Representations and Warranties.  The representations and warranties set forth in
this  Agreement,  in the Related  Documents,  and in any document or certificate
delivered to Lender under this Agreement are true and correct.

No Event of  Default.  There  shall  not  exist  at the  time of any  Advance  a
condition  which would  constitute an Event of Default  under this  Agreement or
under any Related Document.

REPRESENTATIONS  AND WARRANTIES.  Borrower represents and warrants to Lender, as
of the  date of this  Agreement,  as of the  date of each  disbursement  of loan
proceeds, as of the date of any renewal,  extension or modification of any Loan,
and at all times any Indebtedness exists:

Organization. Borrower is a limited liability company which is, and at all times
shall be, duly organized,  validly  existing,  and in good standing under and by
virtue of the laws of the State of  Delaware.  Borrower  is duly  authorized  to
transact  business  in the  State of  Louisiana  and all  other  states in which
Borrower is doing business, having obtained all necessary filings,  governmental
licenses  and  approvals  for each state in which  Borrower  is doing  business.
Specifically,  Borrower  is,  and at all times  shall be,  duly  qualified  as a
foreign  limited  liability  company  in all  states in which the  failure to so
qualify  would have a  material  adverse  effect on its  business  or  financial
condition.  Borrower has the full power and authority to own its  properties and
to transact the business in which it is presently engaged or presently  proposes
to engage.  Borrower maintains an office at 1114 First Ave., New York, NY 10021.
Unless Borrower has designated otherwise in writing, the principal office is the
office at which  Borrower  keeps its books and  records  including  its  records
concerning  the  Collateral.  Borrower will notify Lender prior to any change in
the location of  Borrower's  state of  organization  or any change in Borrower's
name.  Borrower  shall do all things  necessary  to preserve and to keep in full
force and effect its existence, rights and privileges, and shall comply with all
regulations, rules, ordinances, statutes, orders and decrees of any governmental
or  quasi-governmental  authority or court applicable to Borrower and Borrower's
business activities.



BUSINESS LOAN AGREEMENT (Continued)
Page 2

Assumed Business Names.  Borrower has filed or recorded all documents or filings
required  by law  relating  to all  assumed  business  names  used by  Borrower.
Excluding the name of Borrower,  the following is a complete list of all assumed
business names under which Borrower does business: None.

Authorization. Borrower's execution, delivery, and performance of this Agreement
and all the Related  Documents have been duly authorized by all necessary action
by Borrower and do not conflict with,  result in a violation of, or constitute a
default under (1) any provision of (a) Borrower's  articles of  organization  or
membership  agreements,  or (b) any agreement or other  instrument  binding upon
Borrower  or (2) any  law,  governmental  regulation,  court  decree,  or  order
applicable to Borrower or to Borrower's properties.

Financial  Information.  Each of  Borrower's  financial  statements  supplied to
Lender truly and completely  disclosed  Borrower's financial condition as of the
date of the  statement,  and  there  has  been no  material  adverse  change  in
Borrower's  financial  condition  subsequent  to the  date  of the  most  recent
financial  statement  supplied to Lender.  Borrower  has no material  contingent
obligations except as disclosed in such financial statements.

Legal  Effect.  This  Agreement  constitutes,  and any  instrument  or agreement
Borrower is required to give under this Agreement when delivered will constitute
legal, valid, and binding  obligations of Borrower  enforceable against Borrower
in accordance with their respective terms.

Properties.  Except as contemplated by this Agreement or as previously disclosed
in  Borrower's  financial  statements or in writing to Lender and as accepted by
Lender,  and  except  for  property  tax liens for taxes not  presently  due and
payable,  Borrower owns and has good title to all of Borrower's  properties free
and clear of all Security Interests, and has not executed any security documents
or  financing  statements  relating  to  such  properties.   All  of  Borrower's
properties  are titled in  Borrower's  legal name,  and Borrower has not used or
filed a financing  statement under any other name for at least the last five (5)
years.

Hazardous  Substances.  Except as  disclosed  to and  acknowledged  by Lender in
writing,  Borrower  represents  and  warrants  that;  (1)  During  the period of
Borrower's  ownership  of  Borrower's   Collateral,   there  has  been  no  use,
generation,  manufacture,  storage,  treatment,  disposal, release or threatened
release of any Hazardous Substance by any person on, under, about or from any of
the  Collateral.  (2) Borrower  has no  knowledge  of, or reason to believe that
there has been (a) any breach or violation of any  Environmental  Laws;  (b) any
use,  generation,   manufacture,   storage,  treatment,   disposal,  release  or
threatened  release of any  Hazardous  Substance  on,  under,  about or from the
Collateral by any prior owners or occupants of any of the Collateral; or (c) any
actual or threatened  litigation or claims of any kind by any person relating to
such matters.  (3) Neither Borrower nor any tenant,  contractor,  agent or other
authorized  user of any of the  Collateral  shall  use,  generate,  manufacture,
store, treat,  dispose of or release any Hazardous Substance on, under, about or
from  any of the  Collateral;  and any  such  activity  shall  be  conducted  in
compliance with all applicable federal, state, and local laws, regulations,  and
ordinances,  including  without  limitation  all  Environmental  Laws.  Borrower
authorizes  Lender  and its  agents to enter  upon the  Collateral  to make such
inspections and tests as Lender may deem appropriate to determine  compliance of
the Collateral with this section of the Agreement. Any inspections or tests made
by Lender  shall be at  Borrower's  expense and for Lender's  purposes  only and
shall not be construed to create any  responsibility or liability on the part of
Lender to Borrower or to any other person.  The  representations  and warranties
contained  herein are based on  Borrower's  due diligence in  investigating  the
Collateral for hazardous  waste and Hazardous  Substances.  Borrower  hereby (1)
releases  and  waives  any  future  claims   against  Lender  for  indemnity  or
contribution  in the event  Borrower  becomes  liable for cleanup or other costs
under any such  laws,  and (2)  agrees to  indemnify  and hold  harmless  Lender
against  any  and all  claims,  losses,  liabilities,  damages,  penalties,  and
expenses  which Lender may directly or  indirectly  sustain or suffer  resulting
from a breach of this section of the Agreement or as a  consequence  of any use,
generation,  manufacture,  storage, disposal, release or threatened release of a
hazardous waste or substance on the  Collateral.  The provisions of this section
of the  Agreement,  including the  obligation  to  indemnify,  shall survive the
payment of the Indebtedness  and the termination,  expiration or satisfaction of
this Agreement and shall not be affected by Lender's acquisition of any interest
in any of the Collateral, whether by foreclosure or otherwise.

Litigation.  There are no suits or proceedings  pending,  or to the knowledge of
Borrower,  threatened against or affecting Borrower or Borrower's assets, before
any court or by any governmental  agency,  other than those previously disclosed
to Lender in  writing,  which,  if  adversely  determined,  may have a  material
adverse effect on Borrower's financial condition or business.

Taxes.  To the best of Borrower's  knowledge,  all of Borrower's tax returns and
reports that are or were required to be filed,  have been filed,  and all taxes,
assessments and other governmental  charges have been paid in full, except those
presently  being or to be  contested  by Borrower in good faith in the  ordinary
course of business and for which adequate reserves have been provided.

Information.  All information heretofore or contemporaneously herewith furnished
by Borrower to Lender for the purposes of or in connection  with this  Agreement
or any  transaction  contemplated  hereby  is,  and  all  information  hereafter
furnished  by or on behalf of Borrower  to Lender will be, true and  accurate in
every  material  respect  on the date as of which such  information  is dated or
certified;  and none of such information is or will be incomplete by omitting to
state any material fact necessary to make such information not misleading.

Lien  Priority.  Unless  otherwise  previously  disclosed  to Lender in writing,
Borrower has not entered into or granted any Security  Agreements,  or permitted
the filing or  attachment  of any Security  Interests on or affecting any of the
Collateral  directly or indirectly  securing  repayment of  Borrower's  Loan and
Note,  that  would  be  prior or that  may in any way be  superior  to  Lender's
Security Interests and rights in and to such Collateral.

Binding Effect. This Agreement,  the Note, all Security Agreements (if any), and
all Related  Documents  are binding  upon the signers  thereof,  as well as upon
their successors,  representatives  and assigns,  and are legally enforceable in
accordance with their respective terms.

AFFIRMATIVE  COVENANTS.  Borrower covenants and agrees with Lender that, so long
as this Agreement remains in effect, Borrower will:

Good  Standing.  Maintain  its  good  standing  status  as a  Louisiana  limited
liability company and remain qualified in each additional jurisdiction where the
conduct of Borrower's business requires such qualification.

Other Events.  Promptly  notify Lender in writing of (1) the addition of any new
Members  of  Borrower,  (2)  the  death,  interdiction,  withdrawal,  expulsion,
bankruptcy,  or  dissolution  of any Member or the occurrence of any other event
which may terminate the continued  membership of any member,  (3) the expression
of any  intent or desire on the part of any Member or  Members  to  dissolve  or
liquidate Borrower,  and (4) the occurrence or any event specified in Borrower's
Articles or in  Borrower's  Operating  Agreement  that may result in  Borrower's
dissolution or liquidation.

Notices of Claims and  Litigation.  Promptly inform Lender in writing at (1) all
material adverse changes in Borrower's financial condition, and (2) all existing
and  all   threatened   litigation,   claims,   investigations,   administrative
proceedings or similar actions  affecting  Borrower or any Guarantor which could
materially affect the financial condition of Borrower or the financial condition
of any Guarantor.

Financial  Records.  Maintain  its books and  records in  accordance  with GAAP,
applied on a consistent basis, and permit Lender to examine and audit Borrower's
books and records at all reasonable times.

Financial Statements. Furnish Lender with the following:

Annual  Statements.  As soon as  available  after the end of each  fiscal  year,
Borrower's  balance sheet and income  statement for the year ended,  prepared by
Borrower in form satisfactory to Lender.

Tax Returns.  As soon as available after the applicable  filing date for the tax
reporting period ended, Federal and other governmental tax returns,  prepared by
a tax professional satisfactory to Lender.

All financial  reports  required to be provided  under this  Agreement  shall be
prepared in accordance with GAAP,  applied on a consistent  basis, and certified
by Borrower as being true and correct.

Additional Information.  Furnish such additional information and statements,  as
Lender may request from time to time.

Insurance  Maintain fire and other risk insurance,  public liability  insurance,
and such  other  insurance  as Lender may  require  with  respect to  Borrower's
properties  and  operations,  in form,  amounts,  coverages  and with  insurance
companies acceptable to Lender.  Borrower,  upon request of Lender, will deliver
to Lender from time to time the  policies or  certificates  of insurance in form
satisfactory  to  Lender,  including  stipulations  that  coverages  will not be
cancelled or diminished  without at least thirty (30) days prior written  notice
to Lender.  Each insurance  policy also shall include an  endorsement  providing
that  coverage  in favor of Lender  will not be  impaired in any way by any act,
omission or default of  Borrower or any other  person.  In  connection  with all
policies covering assets in which Lender holds or is offered a security interest
for the Loans,  Borrower will provide  Lender with such lender s loss payable or
other endorsements as Lender may require.

Insurance Reports.  Furnish to Lender,  upon request of Lender,  reports on each
existing  insurance  policy  showing such  information  as Lender may reasonably
request,  including  without  limitation  the  following:  (1)  the  name of the
insurer; (2) the risks insured; (3) the amount of the policy; (4) the properties
insured;  (5) the then current  property  values on the basis of which insurance
has been  obtained,  and the manner of  determining  those  values;  and (6) the
expiration date of the policy. In addition,  upon request of Lender (however not
more  often  than  annually),   Borrower  will  have  an  independent  appraiser
satisfactory  to Lender  determine,  as  applicable,  the  actual  cash value or
replacement cost of any Collateral.  The cost of such appraisal shall be paid by
Borrower.

Guaranties.  Prior  to  disbursement  of any  Loan  proceeds,  furnish  executed
guaranties of the Loans in favor of Lender, executed by the guarantor


BUSINESS LOAN AGREEMENT (Continued)
Page 3

named below, on Lender's  forms,  and in the amount and under the conditions set
forth in those guaranties.
Name of Guarantor                                         Amount
-----------------                                         ------
The Smith & Wollensky Restaurant Group, Inc.              Unlimited

Other Agreements.  Comply with all terms and conditions of all other agreements,
whether now or  hereafter  existing,  between  Borrower  and any other party and
notify Lender immediately in writing of any default in connection with any other
such agreements.

Loan Proceeds.  Use all Loan proceeds solely for Borrower's business operations,
unless specifically consented to the contrary by Lender in writing.

Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and
obligations,  including without limitation all assessments,  taxes, governmental
charges,  levies and liens,  of every kind and nature,  imposed upon Borrower or
its properties,  income, or profits,  prior to the date on which penalties would
attach,  and all lawful  claims that,  if unpaid,  might become a lien or charge
upon any of Borrower's properties, income, or pro5ts.

Performance. Perform and comply, in a timely manner, with all terms, conditions,
and provisions set forth in this Agreement, in the Related Documents, and in all
other  instruments and agreements  between  Borrower and Lender.  Borrower shall
notify  Lender  immediately  in writing of any  default in  connection  with any
agreement.

Operations.  Maintain executive and management  personnel with substantially the
same  qualifications  and  experience as the present  executive  and  management
personnel;  provide  written  notice to Lender of any  change in  executive  and
management  personnel;  conduct its business affairs in a reasonable and prudent
manner.

Environmental Studies. Promptly conduct and complete, at Borrower's expense, all
such  investigations,  studies,  samplings  and  testings as may be requested by
Lender or any governmental authority relative to any substance,  or any waste or
by-product  of any  substance  defined as toxic or a hazardous  substance  under
applicable federal,  state, or local law, rule, regulation,  order or directive,
at or affecting any property or any facility owned, leased or used by Borrower.

Compliance with Governmental Requirements. Comply with all laws, ordinances, and
regulations,  now  or  hereafter  in  effect,  of all  governmental  authorities
applicable to the conduct of Borrower's  properties,  businesses and operations,
and to the use or occupancy of the Collateral, including without limitation, the
Americans  With  Disabilities  Act.  Borrower may contest in good faith any such
law,  ordinance,  or regulation and withhold  compliance  during any proceeding,
including  appropriate  appeals,  so long as  Borrower  has  notified  Lender in
writing  prior to doing so and so long as, in Lender's  sole  opinion,  Lender's
interests in the Collateral are not jeopardized.  Lender may require Borrower to
post adequate security or a surety bond,  reasonably  satisfactory to Lender, to
protect Lender's interest.

Inspection.  Permit  employees  or agents of  Lender at any  reasonable  time to
inspect  any and all  Collateral  for the Loan or  Loans  and  Borrower's  other
properties and to examine or audit Borrower's books,  accounts,  and records and
to make copies and  memoranda of Borrower's  books,  accounts,  and records.  If
Borrower now or at any time hereafter  maintains any records  (including without
limitation  computer  generated  records and computer  software programs for the
generation of such records) in the possession of a third party,  Borrower,  upon
request of Lender,  shall notify such party to permit Lender free access to such
records at all reasonable times and to provide Lender with copies of any records
it may request, all at Borrower's expense.

Compliance  Certificates.  Unless waived in writing by Lender, provide Lender at
least  annually,  with a  certificate  executed by  Borrower's  chief  financial
officer,  or other officer or person  acceptable to Lender,  certifying that the
representations  and warranties set forth in this Agreement are true and correct
as of the date of the certificate and further certifying that, as of the date of
the certificate, no Event of Default exists under this Agreement.

Environmental Compliance and Reports. Borrower shall comply in all respects with
any and all Environmental  Laws; not cause or permit to exist, as a result of an
intentional  or  unintentional  action or omission on Borrower's  part or on the
part of any third  party,  on property  owned and/or  occupied by Borrower,  any
environmental  activity where damage may result to the environment,  unless such
environmental activity is pursuant to and in compliance with the conditions of a
permit  issued  by  the  appropriate   federal,   state  or  local  governmental
authorities;  shall  furnish to Lender  promptly and in any event within  thirty
(30) days after receipt thereof a copy of any notice,  summons,  lien, citation,
directive,  letter  or other  communication  from  any  governmental  agency  or
instrumentality  concerning any intentional or unintentional  action or omission
on Borrower's part in connection with any environmental  activity whether or not
there is damage to the environment and/or other natural resources.

Additional  Assurances.  Make,  execute and  deliver to Lender  such  promissory
notes, mortgages,  deeds of trust, security agreements,  assignments,  financing
statements,  instruments,  documents  and  other  agreements  as  Lender  or its
attorneys may reasonably request to evidence and secure the Loans and to perfect
all Security Interests.

LENDER'S  EXPENDITURES.  Borrower  recognizes  and agrees  that Lender may incur
certain  expenses in  connection  with  Lender's  exercise of rights  under this
Agreement. If any action or proceeding is commenced that would materially affect
Lender's  interest in the  Collateral  or if  Borrower  fails to comply with any
provision of this Agreement or any Related Documents,  including but not limited
to  Borrower's  failure to  discharge  or pay when due any  amounts  Borrower is
required to  discharge  or pay under this  Agreement  or any Related  Documents,
Lender on Borrower's  behalf may (but shall not be obligated to) take any action
that Lender  deems  appropriate,  including  but not limited to  discharging  or
paying all taxes, Encumbrances and other claims, at any time levied or placed on
any Collateral and paying all costs for insuring, maintaining and preserving any
Collateral,  including without limitation,  the purchase of insurance protecting
only  Lender's  interest in any  Collateral.  Lender may further take such other
action or actions and incur such  additional  expenditures as Lender may deem to
be  necessary  and  proper  to cure or  rectify  any  actions  or  inactions  on
Borrower's  part as may be required  under this  Agreement.  Nothing  under this
Agreement  or  otherwise  shall  obligate  Lender to take any such actions or to
incur any such additional expenditures on Borrower's behalf, or as making Lender
in any way  responsible  or  liable  for any  loss,  damage,  or  injury  to any
Collateral,  to  Borrower,  or to any other  person or persons,  resulting  from
Lender's election not to take such actions or to incur such additional expenses.
In  addition,  Lender's  election  to take any  such  actions  or to incur  such
additional  expenditures  shall not constitute a waiver or forbearance by Lender
of any Event of Default under this Agreement.  All such expenditures incurred or
paid by Lender for such  purposes  will then bear  interest at the rate  charged
under the Note from the date incurred or paid by Lender to the date of repayment
by Borrower.  All such expenses will become a part of the  Indebtedness  and, at
Lender's option,  will (A) be payable on demand;  (B) be added to the balance of
the Note and be apportioned  among and be payable with any installment  payments
to become due during either (1) the term of any applicable  insurance policy; or
(2) the remaining term of the Note; or (C) be treated as a balloon payment which
will be due and payable at the Note's maturity.

NEGATIVE  COVENANTS.  Borrower  covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:

Amendments to Articles or Operating  Agreement.  Amend its Articles or Operating
Agreement (1) to limit or restrict the permissible  activities in which Borrower
may engage,  or (2) to withdraw  the  authority  of or to limit or restrict  the
authority  of  Borrower's  Authorized   Representatives   (including  Borrower's
Managers) to deal and contract with Lender and to bind and obligate Borrower.
Withdrawal  of Members.  Permit any Member to withdraw  from the Borrower and to
receive  any  type of  withdraw  distribution.  Distributions.  Pay any  interim
distribution in cash or other assets to a Member or Members of Borrower.

Waiver or Compromise of Rights Against Members.  Waive,  compromise or forgo any
rights  that   Borrower  may  have   against  any  Member  for  unpaid   capital
contributions or any other obligation owed to Borrower.

Non-Compliance  None of the above  actions  on the part of  Borrower  (including
without limitation, any amendment to Borrower's Articles or Operating Agreement)
shall be effective as against  Lender unless and until:  (1) Borrower shall have
notified Lender in writing,  and (2) Lender shall have expressly  agreed to such
actions in writing.  Specifically,  any distribution by Borrower in violation of
this Agreement shall be considered as a 'wrongful  distribution"  for purpose of
applicable Law.

Indebtedness  and Liens. (1) Except for trade debt incurred in the normal course
of business and indebtedness to Lender  contemplated by this Agreement,  create,
incur or assume  indebtedness for borrowed money,  including capital leases, (2)
sell, transfer,  mortgage,  assign, pledge, lease, grant a security interest in,
or encumber any of Borrower's  assets (except as allowed as Permitted Liens), or
(3) sell with recourse any of Borrower's accounts, except to Lender.

Continuity of Operations.  (1) Engage in any business  activities  substantially
different  than  those  in  which  Borrower  is  presently  engaged,  (2)  cease
operations,  liquidate,  merge, transfer,  acquire or consolidate with any other
entity,  change its name,  dissolve or transfer  or sell  Collateral  out of the
ordinary course of business,  or (3) make any  distribution  with respect to any
capital account, whether by reduction of capital or otherwise.

Loans,  Acquisitions  and  Guaranties.  (1) Loan,  invest in or advance money or
assets to any other  person,  enterprise  or  entity,  (2)  purchase,  create or
acquire  any  interest  in any  other  enterprise  or  entity,  or (3) incur any
obligation as surety or guarantor other than in the ordinary course of business.

Agreements. Borrower will not enter into any agreement containing any provisions
which would be violated or breached by the performance of Borrower's obligations
under this Agreement or in connection herewith.

BUSINESS LOAN AGREEMENT (Continued)
Page 4

OBLIGATION OF MEMBERS.  So long as this  Agreement  remains in effect,  each and
every present and future Member of Borrower agrees and covenants as follows:

No  Withdrawal.  Not to  withdraw  as a  Member  of  Borrower  and to  obtain  a
withdrawal  distribution without first notifying Lender in writing and obtaining
Lender's prior written consent (which Lender shall have the  unrestricted  right
to refuse).

Compliance.  To take  whatever  steps may be necessary and proper to insure that
Borrower and each other Member complies with the terms, conditions and covenants
of this Agreement.

SECURITY  INTEAEST  GRANTED BY MEMBERS.  Borrower  and each Member  additionally
agree as follows:

Membership  Interests.  Notwithstanding  any provision of Borrower's Articles or
Operating  Agreement to the  contrary,  each Member shall have the  unrestricted
right,  power and  authority to grant a Security  Interest in favor of Lender as
affecting his Membership Interest in Borrower.

Rights of Lender.  Should Lender for any reason acquire the Membership  Interest
of any  Member,  whether as a result of  default  under a loan or  extension  of
credit or  otherwise,  then Lender or any third party to whom Lender may sell or
assign  said  Membership  Interest  shall  have all of the  rights,  powers  and
authority of a "member" of Borrower,  including the right to  participate in the
management and affairs permit that result to occur.

Redemptive Rights.  Should Lender acquire the Membership  Interest of any Member
as a result of a default under a loan, then Lender shall have the right, without
the necessity of first obtaining any type of judgment against such a Member,  to
redeem the defaulting  Member's  Membership Interest for the then value thereof,
which  sum  shall be paid by  Borrower  immediately  on  demand  by Lender to be
applied against the Member's loan obligation.

DEPOSIT  ACCOUNTS.  As collateral  security for repayment of Borrower's Note and
all  renewals  and  extensions,  as well as to secure  any and all other  loans,
notes,  indebtedness and obligations that Borrower may now and in the future owe
to Lender or incur in Lender's  favor,  whether direct or indirect,  absolute or
contingent,  due or to become due, of any nature and kind  whatsoever  (with the
exception of any indebtedness under a consumer credit card account),  and to the
extent  permitted  by law,  Borrower is granting  Lender a  continuing  security
interest  in any and all funds that  Borrower  may now and in the future have on
deposit with Lender or in certificates  of deposit or other deposit  accounts as
to which Borrower is an account holder (with the exception of IRA, pension,  and
other  tax-deferred  deposits).  Borrower  further  agrees  that,  to the extent
permitted by law,  Lender may at any time apply any funds that Borrower may have
on deposit with Lender or in certificates  of deposit or other deposit  accounts
as to which  Borrower  is an  account  holder  against  the  unpaid  balance  of
Borrower's  Note and any and all  other  present  and  future  indebtedness  and
obligations that Borrower may then owe to Lender, in principal,  interest, fees,
costs, expenses, and reasonable attorneys' fees.
EVENTS OF DEFAULT.  The following  actions or inactions or both shall constitute
Events of Default under this Agreement;  Default Under the Note. Should Borrower
default in the payment of  principal  or  interest  under the Note or any of the
Indebtedness.

Default Under this Agreement.  Should Borrower violate,  or fail to comply fully
with any of the terms and conditions of, or default under this Agreement.

Default  Under other  Agreements.  Should any  default  occur or exist under any
Related Document which directly or indirectly  secures repayment of the Loan and
any of the Indebtedness.

Other Defaults In Favor of Lender.  Borrower or any guarantor defaults under any
other loan,  extension  of credit,  security  right,  instrument,  document,  or
agreement, or obligation in favor of Lender.

Default in Favor of Third  Parties.  Should  Borrower or any  Guarantor  default
under any loan,  extension  of credit,  security  agreement,  purchase  or sales
agreement, or any other agreement, in favor of any other creditor or person that
may materially affect any of Borrower's property,  or any Guarantor's ability to
perform  their  respective  obligations  under this  Agreement,  or any  Related
Document, or pertaining to the Indebtedness.

Insolvency. Should the suspension,  failure or insolvency, however evidenced, of
Borrower or any Guarantor occur or exist.

Readjustment  of   Indebtedness.   Should   proceedings   for   readjustment  of
indebtedness,  reorganization, composition or extension under any insolvency law
be brought by or against Borrower or any Guarantor.

Assignment  for Benefit of  Creditors.  Should  Borrower or any  Guarantor  file
proceedings  for a  respite  or make a general  assignment  for the  benefit  of
creditors.
Receivership.  Should a receiver of all or any part of Borrower's  property,  or
the property of any Guarantor, be applied for or appointed.
Dissolution  Proceedings.  Proceedings  for the  dissolution or appointment of a
liquidator of Borrower or any guarantor are commenced.

False Statements. Any warranty, representation or statement made or furnished to
Lender by Borrower or on Borrower's  behalf, the Note, is false or misleading in
any  material  respect,  either now or at the time made or  furnished or becomes
false or misleading at any time thereafter.

Insecurity.  Lender  in good  faith  believes  itself  insecure  with  regard to
repayment of the Loan.

Effect of an Event of Default. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related  Documents,  all commitments
and  obligations of Lender under this Agreement or the Related  Documents or any
other  agreement  immediately  will terminate  (including any obligation to make
further  Loan  Advances  or   disbursements),   and,  at  Lender's  option,  all
Indebtedness  immediately will become due and payable, all without notice of any
kind to  Borrower,  except  that in the case of an Event of  Default of the type
described in the  "Insolvency"  subsection  above,  such  acceleration  shall be
automatic  and not optional.  In addition,  Lender shall have all the rights and
remedies  provided in the Related  Documents or available at law, in equity,  or
otherwise.

Lender  shall  have the  right at its sole  option,  to  accelerate  payment  of
Borrower's Note in full, in principal,  interest,  costs,  expenses,  attorneys'
fees,  and other fees and charges,  as well as to accelerate the maturity of any
and all other loans  and/or  obligations  that  Borrower may then owe to Lender,
whether  direct  or  indirect,  or  by  way  of  assignment  or  purchase  of  a
participation  interest,  and whether  absolute  or  contingent,  liquidated  or
unliquidated,  voluntary or involuntary,  determined or undetermined,  due or to
become due, and whether now existing or hereafter arising,  and whether Borrower
is obligated  alone or with others on a "solidary" or "joint and several" basis,
as a  principal  obligor or as a surety,  of every  nature and kind  whatsoever,
whether any such  indebtedness may be barred under any statute of limitations or
otherwise may be unenforceable or voidable for any reason whatsoever.

Lender shall have the  additional  right,  again at its sole option,  to file an
appropriate  collection  action against Borrower and/or against any guarantor or
guarantors of Borrower's Loan and Note, and/or to proceed or exercise any rights
against any  Collateral  then securing  repayment of  Borrower's  Loan and Note.
Borrower  and each  guarantor  further  agree that  Lender's  remedies  shall be
cumulative  in nature and nothing under this  Agreement or  otherwise,  shall be
construed as to limit or restrict  the options and remedies  available to Lender
following any event of default under this Agreement or otherwise.

Except as may be  prohibited  by  applicable  law,  all of  Lender's  rights and
remedies  shall be cumulative and may be exercised  singularly or  concurrently.
Election by Lender to pursue any remedy  shall not exclude  pursuit of any other
remedy,  and an  election to make  expenditures  or to take action to perform an
obligation  of  Borrower  or of any Grantor  shall not affect  Lenders  right to
declare a default and to exercise its rights and remedies.

DEFINITION OF INDEBTEDNESS EXPANDED. The word "Indebtedness" shall also mean and
include individually, collectively,  interchangeably and without limitation, any
and all present  and future  loans,  extensions  of credit,  liabilities  and/or
obligations of every nature and kind whatsoever that Borrower, and/or Grantor if
Borrower and Grantor are not the same party, may now and in the future owe to or
incur in favor of  Lender  and its  successors  or  assigns,  including  without
limitation,  indebtedness  under any Note described herein,  whether such loans,
extensions of credit liabilities and/or obligation are direct or indirect, or by
way of assignment,  and whether  related or unrelated,  or whether  committed or
purely  discretionary,   and  whether  absolute  or  contingent,   voluntary  or
involuntary,  determined or undetermined,  liquidated or unliquidated, due or to
become due, together with interest,  costs, expenses,  attorneys' fees and other
tees and charges,  whether or not any such  indebtedness may be barred under any
statute of  limitations  or may be otherwise  unenforceable  or voidable for any
reason.

ADDITIONAL  PROVISION.  Borrower  covenants and agrees with Lender that Borrower
will notify Lender if The Smith 8, Wollensky  Restaurant  Group,  Inc. or any of
its  subsidiaries  are  not  in  compliance  (default)  with  any  financial  or
non-financial  covenants with other  financial  institutions.  Failure to comply
with this  provision  shall  constitute a default  hereunder  and shall  entitle
Lender to exercise all remedies provided hereunder.

DEBT SERVICE COVERAGE  COVENANT.  Borrower covenants and agrees with Lender that
as long as this Note is in effect, Borrower shall maintain, at all times, a Debt
Service  Coverage of no less than 1.1oX,  where "Debt  Service  Coverage" is the
result of the following formula;  Cash Flow divided by Debt Service,  where Cash
Flow means the net income  (loss) of Borrower  for a period,  plus any  interest
expense,  plus any tax expense,  plus any depreciation or amortization  expense,
recorded in that same period.  Debt Service means, for a period,  the sum of all
scheduled  principal and interest  payments on debt  (including any  capitalized
leases) during the period,  including that portion of any long term debt that is
due within the period..  The determination of Net Income, the expense items, and
debt payments shall be based on the Borrower's financial statements, prepared in
accordance with Generally Accepted  Accounting  Principles (GAAP),  submitted to
Lender with the degree of diligence and timeliness as required  herein or in any
loan or other agreement relating to or governing repayment hereunder. Failure to
comply with this  provision  shall  constitute  a default  hereunder,  and shall
entitle Lender to exercise all remedies provided herein.

BUSINESS LOAN AGREEMENT (Continued)
Page 5

Miscellaneous  Provisions.  The following miscellaneous provisions are a part of
this Agreement:

Amendments. No amendment,  modifications,  consent or waiver of any provision at
this Agreement, and no consent to any departure by Borrower therefrom,  shall be
effective union the same shall be In writing signed by a duly authorized officer
of Lender,  and then shall be effective only as to the specific instance and for
the specific purpose for which given.

Attorneys'  Fees.  Expenses.  Borrower agrees to pay upon demand all of Lender's
costs and expenses,  including Lender's reasonable  attorneys' fees in an amount
not  exceeding  25.000% of the  principal  balance duo on the Loan and  Lender's
legal  expenses,  incurred in connection with the enforcement of this Agreement.
Lender may hire or pay someone else to help enforce this Agreement, and Borrower
shall pay the costs and expenses of such enforcement.  Costs and expense include
Lender's  reasonable  attorneys' fees in an amount not exceeding  25.000% of the
principal  balance due on the Loan and legal expenses  whether or not there is a
lawsuit, including reasonable attorneys' fees in an amount not exceeding 25.000%
of the  Lender's  principal  balance  due on the Loan  and  legal  expenses  for
bankruptcy proceedings (including efforts to modify or vacate any automatic stay
or injunction),  appeals, and any anticipated post-judgment collection services.
Borrower  also  shall  pay all  court  cost  and such  addi5onal  fees as may be
directed by the court

Caption  Headings.  Caption  headings  in this  Agreement  are  for  convenience
purposes  only and are not to be used to interpret or define the  provisions  of
this Agreement

Consent to Loan Participation. Borrower agrees and constants to Lender's sale or
transfer,  whether now or later, of one or more  participation  interests in the
Loan to one or more purchasers,  whether related or unrelated to Lender.  Lender
may provide,  without any limitation whatsoever,  to any one or more purchasers,
or potential  purchasers,  any  information  or knowledge  Lender may have about
Borrower or about any other matter  relating to the Loan,  and  Borrower  hereby
waives  any right to privacy  Borrower  may have with  respect to such  matters.
Borrower  additionally  waives  any and  all  notices  of sale of  participation
interests,  as well as all notices of any repurchase  ace of such  participation
interests.  Borrower also agrees that the  purchasers of any such  participation
interests  will be  considered as the absolute  owners of such  interests in the
Loan and will have all the rights granted under the  participation  agreement or
agreements governing the sale of such participation interests.  Borrower further
waives all right of offset or counterclaim that it may have now or later against
Lender  or  against  any  purchaser  of  such  a   participation   interest  and
unconditionally  agrees  that  either  Lender  or  such  purchaser  may  enforce
Borrower's  obligation under the Loan  irrespective of the failure or insolvency
of any holder of any  interest  in the Loan.  Borrower  further  agrees that the
purchaser  of  any  such  participation   interest  may  enforce  Its  interests
irrespective  of any personal  claims or defenses that Borrower may have against
Lander.

Governing  Law. This  Agreement  will be governed by,  construed and enforced in
accordance  with  federal  law and the  laws of the  State  of  Louisiana.  This
Agreement has been accepted by Lender in the State of Louisiana.

No Waiver by Lender.  Lender  shall not be deemed to have waived any right under
this Agreement  unless such waiver is given in writing and signed by Lender.  No
delay or omission on the part at Lender in exercising any right shall operate as
a waiver at such right or any other right A waiver by Lender of a  provision  of
this  Agreement  shall not  prejudice or  constitute a waiver of Lender's  right
otherwise to demand strict compliance with that provision or any other provision
of this Agreement.  No prior waiver by Lender, nor any course of dealing between
Lender and  Borrower,  or between  Lender and any  Grantor,  shall  constitute a
waiver  of any of  Lender's  rights  or of any of  Borrower's  or any  Grantor's
obligations  as to any future  transactions.  Whenever  the consent of Lender is
required  under this  Agreement,  the  granting of such consent by Lender in any
instance shall not constitute  continuing consent to subsequent  instances where
such  consent  is  required  and in all cases  such  consent  may be  granted or
withheld in the sole discretion of Lender.

Notices. To give Borrower any notices required under this Agreement,  Lender may
hand deliver or mail the notice  Borrower at Borrower's last address in Lender's
records.  If there is more than one Borrower under this  Agreement,  notice to a
single  Borrower shall be considered as notice to all Borrowers.  To give Lender
any notice  under this  Agreement,  Borrower  (or any  Borrower)  shall mail the
notice to Lander by  registered  or certified  mail at the address  specified in
this  Agreement,  or at any other address that Lender may have given to Borrower
(or any  Borrower) by written  notice as provided in this  section.  All notices
required  or  permitted  under this  Agreement  shall be in writing  and wi1s be
considered  as given on the day it is delivered by hand or deposited in the U.S.
Mail as provided herein.

Severability.  If any provision of this Agreement is held to be Illegal, Invalid
or unenforceable  under present or future laws effective during the term hereof,
such provision shall be fully  severable.  This Agreement shall be construed and
enforceable  as if the illegal,  invalid or  unenforceable  provision  had never
comprised a part of it, and the  remaining  provisions of this  Agreement  shall
remain in full  force and  effect  and shall  not be  affected  by the  illegal,
invalid or unenforceable provision or by any severance herefrom. Furthermore, in
lieu of such illegal, invalid or unenforceable  provision,  there shall be added
automatically  as a part of this  Agreement a  provision  as similar in terms to
such illegal,  invalid or unenforceable  provision as may be possible and legal,
valid and enforceable.

Subsidiaries  and  Affiliates  of  Borrower.  To the extent  the  context of any
provisions of this Agreement makes it appropriate,  including without limitation
any  representation,  warranty or covenant,  the word "Borrower" as used in this
Agreement  shall  include  all  of  Borrower's   subsidiaries   and  affiliates.
Notwithstanding  the  foregoing  however,  under  no  circumstances  shall  this
Agreement  be construed  to require  Lender to make any Loan or other  financial
accommodation to any of Borrower's subsidiaries and affiliates.

Successors and Assigns. All covenants and agreements by or on behalf of Borrower
contained  in this  Agreement  or any Related  Documents  shall bind  Borrower's
successors  and  assigns  and  shall  inure to the  benefit  of  Lender  and its
successors and assigns.  Borrower shall not,  however,  have the right to assign
Borrower's  rights under this  Agreement or any  interest  therein,  without the
prior written consent of Lender.

Survival of Representations and Warranties. Borrower understands and agrees that
in making the Loan,  Lender is relying on all  representa5ons,  warranties,  and
covenants  made by Borrower in this  Agreement  or in any  certificate  or other
instrument  delivered by Borrower to Lender under this  Agreement or the Related
Documents.  Borrower further agrees that regardless of any investigation made by
Lender,  all such  representations,  warranties  and covenants  will survive the
making of the Loan and  delivery  to Lender of the Related  Documents,  shall be
continuing in nature,  and shall remain in full force and effect until such time
as Borrower's  Indebtedness shall be paid in full, or until this Agreement shall
be terminated in the manner provided above, whichever is the last to occur.

Waive Jury.  All parties to this  Agreement  hereby  waive the right to any Jury
trial in any action,  proceeding,  or counterclaim  brought by any party against
any other party.

Definitions.  The following capitalized words and terms shall have the following
meanings  when  used  in  this  Agreement.  Unless  specifically  stated  to the
contrary, all references to dollar amounts shall mean amounts In lawful money of
the United States at America. Words and terms used in the singular shall Include
the  plural,  and the plural  shall  include  the  singular,  as the context may
require.  Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Louisiana Commercial Laws (La. R,S. 10:
9-101,  et seq.).  Accounting  words and terms  not  otherwise  defined  in this
Agreement shall have the meanings  assigned to them in accordance with generally
accepted accounting principles as In effect on the date of this Agreement:

Advance.  The word "Advance"  means a disbursement  of Loan funds made, or to be
made,  to  Borrower  or on  Borrower's  behalf on a line of  credit or  multiple
advance basis under the terms and conditions of this Agreement.

Agreement.  The word  Agreement'  means this  business Loan  Agreement,  as this
Business Loan  Agreement may be amended or modified from time to time,  together
with all exhibits and schedules attached or to be attached to this Business Loan
Agreement from time to time.

Articles.   The  word  "Articles"  means  and  includes   Borrower  Articles  of
Organization  as  presently  on file with Office of the  Louisiana  Secretary of
State, and as such Articles may subsequently be amended or modified from time to
time, one or more times.

Authorize  Representatives.  The  words  "Authorized  Representatives"  mean and
include,  Individually,  collectively,  interchangeably,  any  and  all  persons
authorized  by  Borrower's  Members  or  Managers  to act for and on  behalf  of
Borrower In dealings with Lender.

Borrower.  The word "Borrower" means S & W New Orleans,  L.L.C, and includes all
co-signers and co-makers signing the Note.


<PAGE>



Collateral.  The word  "Collateral"  means all  property  and assets  granted as
collateral  security  for a Loan,  whether  real or personal  property,  whether
granted  directly or  indirectly,  whether  granted  now or in the  future,  and
whether  granted  in the  form  of a  security  Interest,  mortgage,  collateral
mortgage,  deed at trust,  assignment,  pledge,  crop pledge,  chattel mortgage,
collateral  chattel  mortgage,  chattel trust,  factor's lien,  equipment trust,
conditional sale, trust receipt, lien, charge, lien or title retention contract,
lease or  consignment  Intended as a security  device,  or any other security or
lien interest whatsoever, whether created by law, contract, or otherwise.

Environmental  Laws.  The  words  Environmental  Laws"  mean any and all  state,
federal  end  local  statutes,   regulations  and  ordinances  relating  to  the
protection of human health or the environment,  including without limitation the
Comprehensive Environmental Response,  Compensation,  and Liability Act of 1980,
as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments
and  Reauthorization Act of 1ase, Pub. L No, 99-409 ?"), the Hazardous Materials
Transportation Act, 49 U.S.C.  Section 1801, et seq., the Resource  Conservation
and Recovery Act, 42 U.S.C.  Section 6901, at seq., or other applicable state or
federal laws, rules, or regulations adopted pursuant thereto.

Event of Default. The words "Event of Default" mean any of the events of default
set forth in this Agreement in the default section o1 this Agreement.

BUSINESS LOAN AGREEMENT (Continued)
Page 6

GAAP. The word "GAAP" means generally accepted accounting principles.

Grantor.  The word  "Grantor"  means  each and all of the  persons  or  entities
granting a Security  Interest in any Collateral for the Loan,  including without
limitation all Borrowers granting such a Security Interest.

Guarantor.  The word "Guarantor"  means any guarantor,  surety, or accommodation
party of any or all of the Loan.

Hazardous  Substances.  The words  "Hazardous  Substances"  mean materials that,
because of their  quantity,  concentration  or physical,  chemical or infectious
characteristics, may cause or pose a present or potential hazard to human health
or  the  environment  when  improperly  used,  treated,   stored,  disposed  of,
generated, manufactured,  transported or otherwise handled. The words "Hazardous
Substances" are used in their very broadest sense and include without limitation
any and all hazardous or toxic  substances,  materials or waste as defined by or
listed  under the  Environmental  Laws.  The term  "Hazardous  Substances"  also
includes,  without  limitation,  petroleum  and  petroleum  by-products  or  any
fraction thereof and asbestos.

Indebtedness.  The word "Indebtedness"  means the indebtedness  evidenced by the
Note  or  Related  Documents,  in  principal,   interest,  costs,  expenses  and
attorneys'  fees  and all  other  fees  and  charges  together  with  all  other
indebtedness and costs and expenses for which Borrower is responsible under this
Agreement or under any of the Related Documents.

Lender.  The word "Lender"  means  Hibernia  National  Bank,  its successors and
assigns,  and any subsequent  holder or holders of Borrower's  Loan and Note, or
any interest therein.

Loan. The word "Loan" means any and all loans and financial  accommodations from
Lender to Borrower  whether now or hereafter  existing,  and however  evidenced,
including without limitation those loans and financial  accommodations described
herein or described on any exhibit or schedule  attached to this  Agreement from
time to time.

Member.  The  word  "MEMBER"  means  and  include,  individually,  collectively,
interchangeably, any and all present and future member owners of Borrower.

Membership Interest. The words "MEMBERSHIP INTEREST' mean and include a Member's
ownership  rights and  interest in Borrower,  including  without  limitation,  a
Member's  share  of the  profits  and  losses  of  Borrower,  right  to  receive
distributions of Borrower's  assets, and any right to vote or participate in the
management and affairs of Borrower.

Note.  The word "Note" means the Note executed by S & W New Orleans,  L.L.C.  in
the  principal  amount of  $2,000,000.00  dated May 26, 2004,  together with all
renewals,   extensions,   modifications,    refinancings,   consolidations   and
substitutions of and for the note or credit agreement.

Operating Agreement.  The words "Operating Agreement" mean any agreement between
Borrower's  Members  governing  the affairs of  Borrower  and the conduct of its
business.


<PAGE>



Permitted  Liens.  The words  "Permitted  Liens"  mean (a)  liens  and  security
interests securing Indebtedness owed by Borrower to Lender; (b) liens for taxes,
assessments,  or similar  charges either not yet due or being  contested in good
faith; (c) liens of materialmen,  mechanics, warehousemen, or carriers, or other
like liens arising in the ordinary  course of business and securing  obligations
which  are not yet  delinquent;  (d)  purchase  money  liens or  purchase  money
security  interests upon or in any property  acquired or held by Borrower in the
ordinary  course of business to secure  indebtedness  outstanding on the date of
this Agreement or permitted to be incurred under the paragraph of this Agreement
titled  "Indebtedness and Liens";  (e) liens and security interests which, as of
the date of this Agreement, have been disclosed to and approved by the Lender in
writing;  and (1) those  liens and  security  interests  which in the  aggregate
constitute an immaterial and  insignificant  monetary amount with respect to the
net value of Borrower's assets.

Related  Documents.  The words "Related  Documents"  mean all promissory  notes,
credit  agreements,  loan  agreements,   environmental  agreements,  guaranties,
security  agreements,  mortgages,  deeds of trust,  security  deeds,  collateral
mortgages, and all other instruments,  agreements and documents,  whether now or
hereafter existing, executed in connection with the Loan.

Security   Agreement.   The  words   "Security   Agreement"   mean  and  include
individually,   collectively,   interchangeably   and  without   limitation  any
agreements,   promises,   covenants,   arrangements,   understandings  or  other
agreements,  whether  created  by  law,  contract,  or  otherwise,   evidencing,
governing, representing, or creating a Security Interest.

Security Interest.  The words "Security Interest' mean, without limitation,  any
and all types of collateral security, present and future, whether in the form of
a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment,
pledge,  crop pledge,  chattel mortgage,  collateral  chattel mortgage,  chattel
trust, factor's lien, equipment trust,  conditional sale, trust receipt, lien or
title retention contract, lease or consignment intended as a security device, or
any other security or lien interest whatsoever whether created by law, contract,
or otherwise.

BORROWER  ACKNOWLEDGES  HAVING READ ALL THE  PROVISIONS  OF THIS  BUSINESS  LOAN
AGREEMENT AND BORROWER  AGREES TO ITS TERMS.  THIS  BUSINESS  LOAN  AGREEMENT IS
DATED MAY 26, 2004.

BORROWER:
S & W NEW ORLEANS, LL.C.
THE SMITH & WOLLENSKY RESTAURANT GROUP, INC.,
Member of S & W New Orleans, L.L.C.


/ S / Alan M. Mandel
--------------------
Alan M. Mandel, Executive Vice President of The
Smith & Wollensky Restaurant Group, Inc.

LENDER:

HIBERNIA NATIONAL BANK

By: Authorized Signer






</TEXT>
</DOCUMENT>
