-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M027KkEEFUh1ffhrA7HV6/+sEU4/V/3uaMm0mjRjRkK1XF16TJ7l/1PHewj2s/vQ VLIWg51XzyHDwdWXF2c7/Q== 0000899681-07-000171.txt : 20070301 0000899681-07-000171.hdr.sgml : 20070301 20070228174250 ACCESSION NUMBER: 0000899681-07-000171 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20070301 DATE AS OF CHANGE: 20070228 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: STILLMAN ALAN N CENTRAL INDEX KEY: 0001140862 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A MAIL ADDRESS: STREET 1: C/O SMITH WOLLENSKY RESTAURANT GROUP INC STREET 2: 1114 FIRST AVENUE CITY: NEW YORK STATE: NY ZIP: 10021 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SMITH & WOLLENSKY RESTAURANT GROUP INC CENTRAL INDEX KEY: 0001137047 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 582350980 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-61691 FILM NUMBER: 07659535 BUSINESS ADDRESS: STREET 1: 114 1ST AVENUE CITY: NEW YORK STATE: NY ZIP: 10021 BUSINESS PHONE: 2128382061 MAIL ADDRESS: STREET 1: 114 1ST AVENUE CITY: NEW YORK STATE: NY ZIP: 10021 SC 13D/A 1 smith-sc13da_022707.htm SC-13D/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 13D
(Rule 13d-1)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 1)

The Smith & Wollensky Restaurant Group, Inc.

(Name of Issuer)

Common Stock, $0.01 par value per share

(Title of Class of Securities)

831758107

(CUSIP Number)

Martin H. Neidell
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, NY 10038
212-806-5836

(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)

February 26, 2007

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [ ].

NOTE: Schedules filed in paper format shall include a signed original and five copies of the Schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (the “Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

(Continued on following pages)

(Page 1 of 7)

SCHEDULE 13D

CUSIP No.: 831758107

Page 2 of __ Pages

1	NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (Entities Only) Alan N. Stillman

2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ]

3	SEC USE ONLY

4	SOURCE OF FUNDS

5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]

6	CITIZENSHIP OR PLACE OF ORGANIZATION United States

NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH

7

8

9

10

SOLE VOTING POWER

SHARED VOTING POWER

SOLE DISPOSITIVE POWER

SHARED DISPOSITIVE POWER

1,321,119

107,500

1,321,119

107,500

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,428,619

12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [X]

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 16.36%

14	TYPE OF REPORTING PERSON IN

This Amendment No. 1 is being filed on behalf of Alan N. Stillman, relating to the common stock, par value $0.01 per share (the “Common Stock”), of The Smith & Wollensky Restaurant Group, Inc. (the “Issuer”). This amendment is being filed pursuant to Rule 13d-2 of the General Rules and Regulations under the Securities Exchange Act of 1934.

ITEM 1. SECURITY AND ISSUER.

This Amendment relates to the Common Stock of the Issuer, a Delaware corporation. The Issuer’s principal executive offices are located at 880 Third Avenue, 4th Floor, New York, NY 10022.

ITEM 2. IDENTITY AND BACKGROUND.

Mr. Stillman’s business address is c/o The Smith & Wollensky Restaurant Group, Inc., 880 Third Avenue, New York, NY 10022.

ITEM 4. PURPOSE OF TRANSACTION.

See response to Item 6.

ITEM 5. INTEREST IN SECURTIES OF THE ISSUER.

(a) Mr. Stillman beneficially owns 1,428,619 shares of Common Stock of the Issuer, representing approximately 16.36% of the issued and outstanding shares.

(b) Mr. Stillman directly owns 56,791 shares of Common Stock of the Issuer over which he has sole voting and dispositive power. Mr. Stillman owns options to purchase an aggregate of 241,667 shares of Common Stock of the Issuer, of which options to purchase an aggregate of 135,667 shares have vested.

Stillman’s First, Inc., which may be deemed to be an affiliate of Mr. Stillman, owns 107,500 shares of Common Stock of the Issuer. Mr. Stillman disclaims beneficial ownership of such shares, and this report shall not be deemed an admission that Mr. Stillman is the beneficial owner of such shares for the purposes of Section 16 or for any other purpose, except to the extent of his pecuniary interest therein. Mr. Stillman has shared voting power and shared dispositive power over such shares of Common Stock of the Issuer. Donna Stillman, Mr. Stillman’s wife, also has shared voting power and shared dispositive power over such 107,500 shares of Common Stock of the Issuer.

La Cite, Inc., which may be deemed to be an affiliate of Mr. Stillman, owns 348,191 shares of Common Stock of the Issuer. Mr. Stillman disclaims beneficial ownership of such shares, and this report shall not be deemed an admission that Mr. Stillman is the beneficial owner of such shares for the purposes of Section 16 or for any other purpose, except to the extent of his pecuniary interest therein. Mr. Stillman has sole voting power and sole dispositive power over such shares of Common Stock of the Issuer.

White & Witkowsky, Inc., which may be deemed to be an affiliate of Mr. Stillman, owns 395,070 shares of Common Stock of the Issuer. Mr. Stillman disclaims beneficial ownership of such shares, and this report shall not be deemed an admission that Mr. Stillman is the beneficial owner of such shares for the purposes of Section 16 or for any other purpose, except to the extent of his pecuniary interest therein. Mr. Stillman has sole voting power and sole dispositive power over such shares of Common Stock of the Issuer.

Thursday’s Supper Pub, Inc., which may be deemed to be an affiliate of Mr. Stillman, owns 385,400 shares of Common Stock of the Issuer. Mr. Stillman disclaims beneficial ownership of such shares, and this report shall not be deemed an admission that Mr. Stillman is the beneficial owner of such shares for the purposes of Section 16 or for any other purpose, except to the extent of his pecuniary interest therein. Mr. Stillman has sole voting power and sole dispositive power over such shares of Common Stock of the Issuer.

The Donna Stillman Trust owns 90,754 shares of Common Stock of the Issuer. These shares are not included in this filing. Mr. Stillman disclaims beneficial ownership of such shares, and this report shall not be deemed an admission that Mr. Stillman is the beneficial owner of the 90,754 shares owned by the Donna Stillman Trust for any purpose. Donna Stillman, Eugene I. Zuriff and Robert D. Villency, the trustees, have the shared power to direct the receipt of dividends and the proceeds of a sale of shares with respect to such 90,754 shares of Common Stock of the Issuer. Mr. Stillman has no voting power or dispositive power over such 90,754 shares of Common Stock of the Issuer. The address for each of Donna Stillman and Eugene I. Zuriff has changed and is c/o The Smith & Wollensky Restaurant Group, Inc., 880 Third Avenue, New York, NY 10022.

The Alan N. Stillman Grantor Retained Annuity Trust owns 175,000 shares of Common Stock of the Issuer. These shares are not included in this filing. Mr. Stillman disclaims beneficial ownership of such shares and this report shall not be deemed an admission that Mr. Stillman is the beneficial owner of such shares for the purpose of Section 16 or for any other purpose. Donna Stillman, Eugene I. Zuriff and Robert D. Villency are the trustees of this trust and share voting and dispositive power with respect to such shares. Mr. Stillman has no voting power or dispositive power over the shares of Common Stock of the Issuer owned by this trust.

ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.

Patina Restaurant Group, LLC (“Patina”) has entered into an Agreement and Plan of Merger dated February 26, 2007 (the “Merger Agreement”) with the Issuer pursuant to which the Issuer will be merged (the “Merger”) with, and become, a wholly-owned subsidiary of Patina. As an inducement for Patina to enter into the Merger Agreement, Patina and Alan Stillman entered into an agreement dated February 26, 2007 (the “Patina Agreement”).

Pursuant to the Patina Agreement, immediately after the closing of the Merger, Stillman or his designees (the “Stillman Group”) will acquire certain assets from the Issuer consisting of real property owned by the Issuer in Dallas and New Orleans, the leases relating to three New York City restaurants (Quality Meats, Cite and Park Avenue Cafe), the management agreements relating to three New York City restaurants (Smith & Wollensky, Maloney & Porcelli and Post House), the lease of the Issuer’s headquarters in New York and all assets relating to the foregoing.

In consideration for such purchase, the Stillman Group will pay $5,304,057 in cash and/or stock of the Issuer, plus assume numerous liabilities and contingent obligations of the Issuer, including the following: any sales, real property transfer or income taxes relating to the acquisition; mortgages on properties in New Orleans and Miami aggregating approximately $3.2 million; $800,000 of capital lease obligations; all expenses of the Issuer relating to the Merger, including legal, accounting, proxy fees, severance, change of control and other payments to employees of the Issuer estimated to exceed an aggregate of $4 million; contingent obligations under various lawsuits (in amounts which cannot presently be determined); certain capital improvements and other costs relating to the Smith & Wollensky restaurant in Las Vegas and to the Issuer generally; and all known and unknown obligations or liabilities relating to the assets to be acquired. The foregoing is a summary of the Patina Agreement and is qualified in its entirety by the Patina Agreement that is filed as an exhibit hereto.

Patina and the holders of the shares of Common Stock of the Issuer reported in this filing, together with the Donna Stillman Trust and the Alan N. Stillman Grantor Retained Annuity Trust, have entered into a voting agreement (the “Voting Agreement”) pursuant to which such holders have agreed to vote all their shares of Common Stock of the Issuer in favor of the Merger and against any action or agreement that would result in a breach of the Issuer under the Merger Agreement or would impede or interfere with the Merger. The Voting Agreement will terminate upon termination of the Merger Agreement in accordance with its terms. The foregoing is a summary of the Voting Agreement and is qualified in its entirety by the Voting Agreement that is filed as an exhibit hereto.

As a condition to entering into the Merger Agreement, Patina required that St. James Associates, L.P. (“St. James”) agree to amend various provisions of the Amended and Restated Sale and License Agreement dated January 1, 2006 between St. James and the Issuer (the “License Agreement”). Mr. Stillman and an unrelated party are the general partners of St. James. In order to effectuate this amendment the consent of both general partners was required. On February 26, 2007, Patina and St. James entered into a letter agreement pursuant to which the License Agreement will be amended effective on the closing of the Merger to effectuate the following: Patina has agreed to open at least two new Smith & Wollensky restaurants and to open or make advance payments of additional royalty payments for two additional such restaurants within six years; St. James will eliminate the 1% royalty fee on all restaurant and non-restaurant sales at any steakhouse owned or operated by Patina or its affiliates if such restaurant does not use the Smith & Wollensky name and is located in specified countries in Asia, provided such royalty will continue to be payable until Patina has fulfilled its build-out obligations; St. James agreed to eliminate the posting by assignees of a letter of credit in connection with the assignment of the License Agreement; and St. James agreed to other technical amendments. Based on Patina’s representations to St. James that the principals of Patina are reputable restaurant operators that have managed high quality fine dining restaurants continuously for at least five years and that Patina is a nationally known reputable company active in the food service business, St. James acknowledged that the Merger Agreement is expressly permitted by the License Agreement. The foregoing is a summary of the letter agreement and is qualified in its entirety by the letter agreement that is filed as an exhibit hereto.

The Issuer and St. James also entered into a letter agreement pursuant to which the parties acknowledged that Quality Meats is a steakhouse within the meaning of the License Agreement and Issuer must pay a 1% annual royalty on all restaurant and non-restaurant sales therefrom.

ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.

1. Agreement dated February 26, 2007, between Patina Restaurant Group, LLC and Alan Stillman.

2. Voting Agreement dated February 26, 2007, among Patina Restaurant Group, LLC and certain holders of Common Stock of The Smith & Wollensky Restaurant Group, Inc.

3. Letter Agreement dated February 26, 2007 relating to proposed amendments to Amended and Restated Sale and License Agreement dated as of January 1, 2006, by and between St. James Associates, L.P. and The Smith & Wollensky Restaurant Group, Inc.

4. Letter Agreement dated February 26, 2007, between St. James Associates, L.P. and The Smith & Wollensky Restaurant Group, Inc. relating to royalty payments for Quality Meats.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: February 28, 2007

/s/ Alan N. Stillman
Alan N. Stillman

EX-1 2 smith-ex1_022707.htm Exhibit 1

Patina Restaurant Group LLC
120 West 45th Street
New York, New York 10136

February 26, 2007

Mr. Alan N. Stillman
c/o The Smith & Wollensky Restaurant Group, Inc.
880 Third Avenue
New York, New York 10022

Dear Alan:

Patina Restaurant Group, LLC and/or its principals, Shidax Corporation, Fortunato N. Valenti and Joachim Splichal (collectively, "Patina") propose to acquire (the "Acquisition") 100% of the equity interests in The Smith & Wollensky Restaurant Group, Inc. ("SWRG"). The Acquisition is to be effected through the merger of a wholly-owned subsidiary of Patina ("Newco") with and into SWRG (the "Merger"), all as set forth in that certain Merger Agreement of even date herewith by and among Patina, SWRG Holdings, Inc. and SWRG (the "Merger Agreement").

Patina has entered into the Merger Agreement in reliance on its agreement with you (sometimes referred to herein together with your designees as the "Stillman Group") that, at the closing of the Acquisition (the "Closing" and the date of which, the "Closing Date"), the New York City operations and certain other assets and obligations of SWRG will be transferred to and assumed by the Stillman Group (the "Split-off") on the terms and conditions more fully described below.

1. Assets, Rights and Properties to be Transferred. At the Closing, and subject to the provisions of this Agreement, Patina will cause SWRG to transfer to the Stillman Group the assets, rights and properties identified on Schedule I hereto (the "Transferred Assets"). Such transfer shall be effected by a transfer of stock or of assets (or a combination thereof) or by such other means as the parties may hereafter reasonably agree upon taking into account all relevant tax and other considerations. The Transferred Assets are to be transferred, sold and assigned without any express or implied representations and warranties and, in each case, on an "as is" basis as the same exist at the Closing Date.

2. Payment. At the Closing, as partial consideration for the Transferred Assets, you or your designees shall make a payment to SWRG of $5,304,057, which payment may be made at your option (a) in cash, (b) in shares of common stock of SWRG valued at $9.25 per share, or (c) a combination of (a) and (b).

3. Liabilities to be Assumed or Indemnified. At the Closing, as additional consideration for the Transferred Assets, the Stillman Group, jointly and severally, will pay or assume the obligations and liabilities of SWRG and its subsidiaries identified on Schedule II attached hereto (the "Assumed Liabilities"), including, but not limited to, any sales, real property transfer or other similar taxes (including income taxes imposed on SWRG and its subsidiaries) directly attributable to the transfer of the Transferred Assets, all in accordance with the provisions of such Schedule II. In addition, the Stillman Group will indemnify, defend and hold SWRG and its subsidiaries harmless from and against the costs and liabilities identified in Schedule III (the "Indemnified Liabilities") in accordance with the provisions of such Schedule III. The parties shall cooperate in the identification prior to the Closing of all Transaction Expenses, Severance Obligations, and Indebtedness (as such terms are defined in the Schedules to this Agreement) and the parties agree that any cash held by SWRG or its subsidiaries at the Closing will be applied by SWRG to the payment of the same at or immediately after the Closing.

4. Post-Closing Adjustment. No later than 60 days after the Closing, SWRG will calculate SWRG's Adjusted Working Capital (as defined in Schedule II-A) as at the close of business on the day preceding the Closing and will deliver its calculation thereof to you. SWRG will provide you and your representatives with reasonable access to its records to enable you to verify the accuracy of SWRG's calculation. If within 20 business days following delivery of the calculation to you, you have not given Patina written notice of your objection to the calculation (which notice will state the basis of your objection), then the Adjusted Working Capital as calculated by SWRG shall be binding on the parties. If you give Patina written notice of your objections and within 30 days of receipt thereof we fail to resolve the outstanding issues, then we will submit the issues remaining in dispute to arbitration. Within 15 days after the final determination of the Adjusted Working Capital, (a) if the Adjusted Working Capital (as finally determined in accordance with this Section) is a positive number, then Patina shall cause SWRG to pay the amount thereof to the Stillman Group (which payment shall be treated as part of the Transferred Assets), or (b) if the Adjusted Working Capital (as finally determined in accordance with this Section) is a negative number, the Stillman Group shall pay the amount thereof to SWRG (which payment shall be treated as additional consideration for the Transferred Assets).

5. Administrative Services and Cooperative Marketing Agreement; Trademark License. At the Closing (i) Patina will, and you will cause the appropriate members of the Stillman Group to, enter into an administrative services and cooperative marketing agreement on such terms as we may hereafter reasonably agree upon, which, among other things, will provide for the cooperation and interaction of the parties in (x) the protection and enhancement of the Smith and Wollensky brand and trademarks, and (y) the shared use, on a transitional basis (and the ultimate allocation of ownership) of SWRG's record keeping, information technology, internal control and accounting systems and (ii) the Stillman Group shall grant to SWRG, for nominal consideration and no additional royalty, the right to use the trademarks Wine Week and National Wine Week for use in restaurants using the name Smith & Wollensky pursuant to a trademark license agreement in such form as we may hereafter reasonably agree upon.

6. Transfer of Personnel. At the Closing, Patina shall cause SWRG to take, and the Stillman Group shall take, the actions described in Schedule IV in respect of the employees of SWRG. In addition, SWRG and you shall terminate your individual employment and non competition agreements with SWRG as of the Closing Date and without responsibility for any further payment thereunder (other than for salary and benefits accrued through the Closing Date), and shall execute and deliver mutual releases in such form as counsel to the parties may reasonably agree upon.

7. Security for Obligations. As security for the full payment and performance of the Assumed Liabilities and Indemnified Liabilities by the Stillman Group under the provisions of this Agreement, at the Closing, the Stillman Group will grant to SWRG a security interest in (i) the Management Agreements (as such term is defined in Section 9 below, but excluding the Management Agreement for the Smith & Wollensky restaurant in New York City) and all cash flow of the Stillman Group derived or to be derived therefrom, and (ii) such of the other Transferred Assets as the parties may hereafter agree upon.

8. Inventory. Within 10 days after the Closing, Patina will cause SWRG to review the inventory (which shall include food, wine, beer, liquor and all other items included in "inventory" on the trial balances to the audited financial statements of SWRG as at December 31, 2006 (collectively, the "Inventory")) existing at the Closing at the 8 Smith & Wollensky restaurants to be operated by SWRG and its subsidiaries immediately after the Closing (the "8 SWRG Restaurants"). If the amount of the Inventory for the 8 SWRG Restaurants is less than the amount of the Inventory for those 8 locations as at December 31, 2006 (as set forth on the trial balances to the audited financial statements of SWRG as of that date), then the difference will be a negative adjustment (the "Negative Inventory Adjustment") to the Adjusted Working Capital (as set forth on Schedule II-A). If the amount of the Inventory for the 8 SWRG Restaurants is more than the amount of the Inventory for those 8 locations as at December 31, 2006 (as set forth on the trial balances to the audited financial statements of SWRG as of that date), then the difference will be a positive adjustment (the "Positive Inventory Adjustment") to the Adjusted Working Capital (as set forth on Schedule II-A).

9. Further Assurances; Failure to Obtain Consents; Required Government Approvals. Each of the parties to this Agreement shall use its or his commercially reasonable best efforts to consummate the Merger and make effective the other transactions contemplated by this Agreement as soon as practicable following the date of this Agreement. Without limiting the generality of the foregoing, each party to this Agreement shall (i) execute and deliver such further or additional documents (including but not limited to such bills of sale, forms of assignment and assumption, indemnity agreements, stock powers or other instruments of transfer) as may be reasonably required to give effect to the transactions contemplated herein, (ii) use his or its commercially reasonable best efforts to obtain any consent or approval required to be obtained (pursuant to any applicable legal requirement, contract or otherwise) by such party in connection with any of the other transactions contemplated by this Agreement, (iii) use his or its commercially reasonable best efforts to have SWRG released from any guaranties given with respect to the Transferred Assets, Assumed Liabilities or Indemnified Liabilities and (iv) if the parties mutually agree, to use commercially reasonable best efforts to enter into new management agreements relating to Smith & Wollensky (New York), Maloney & Porcelli and Post House instead of assigning the existing agreements (the existing agreements, any such new agreements and any modifications, extensions, replacements or substitutions of any thereof being herein referred to as the "Management Agreements").

This Agreement shall not constitute an agreement to assign any interest in any contract, lease, permit or other agreement or any claim, right or benefit arising thereunder or resulting therefrom ("Assigned Contract") if an assignment without the consent of a third party would constitute a breach or violation thereof. Nor shall the failure to obtain any such consent excuse any party from the performance of its obligations hereunder. If the consent of a third party is required in order to assign any such interest and such consent is not obtained prior to the Closing (i) the Stillman Group shall be entitled to the benefits of each such Assigned Contract accruing after the Closing, (ii) the Stillman Group shall assume as Assumed Liabilities all obligations and liabilities relating to or arising out of or incurred in connection with such Assigned Contract and (iii) without any expense or liability to SWRG, SWRG will assist the Stillman Group in obtaining all such consents and will cooperate with the Stillman Group until such consents are obtained or effected in any lawful and economically feasible arrangement so that the Stillman Group shall receive SWRG's interest in the benefits under any such Assigned Contract. Notwithstanding anything herein to the contrary, the obligation of the parties to this Agreement is subject to the obtaining of any consents required under the provisions of the New York State Alcoholic Beverage Control Law in connection with the consummation of the transactions contemplated herein. The Stillman Group will have the responsibility to obtain (and bear the risk of any failure to obtain) any other governmental approval required to effect the transactions contemplated herein.

10. Allocation of Purchase Price. At the Closing, Patina shall cause SWRG and you shall cause the appropriate members of the Stillman Group to prepare and file in a timely manner IRS Form 8594 and other appropriate information with respect to the allocation of the purchase price for the Transferred Assets as may be required by Section 1060 of the Internal Revenue Code and applicable U.S. Treasury Regulations and Internal Revenue Service instructions. No party shall take or permit its affiliates to take any position in any tax return, tax proceeding or tax audit that is inconsistent with such allocation.

11. Public Disclosure. Except as may be required by law, the parties to this Agreement shall consult with each other before issuing any press release or otherwise making any public statement or making any other public (or non-confidential) disclosure (whether or not in response to an inquiry) regarding the terms of this Agreement and the transactions contemplated hereby and neither party shall issue any such press release or make any such public statement or disclosure without the prior approval of the other (which approval shall not be unreasonably withheld or delayed).

12. Non-Competition. For a period of three years after the Closing, you agree not to directly or indirectly, whether as an investor, owner, franchisee, member, officer, director, spokesman, employee, consultant or otherwise, have any interest in a Competitive Business. As used herein the term Competitive Business means (i) any restaurant commonly identified or considered by the public as a steakhouse (a "Steakhouse") located in any of the cities outside of New York City in which SWRG has a Smith & Wollensky steakhouse at the time such interest is acquired by you, or (ii) any entity that owns or operates more than three Steakhouses outside of New York City, including but not limited to any entity that owns or operates The Palm, Morton's, Outback, and Ruth's Chris. Notwithstanding the preceding, nothing herein shall prevent you from owning less than 1% of the outstanding shares of any class of stock that is publicly traded.

13. Termination. This Agreement may be terminated at any time prior to the Closing by the mutual written consent of the parties, or by either party, upon written notice given to the other, if the Merger Agreement is terminated. Upon any such termination, this Agreement shall be of no further force or effect, and there shall be no liability on the part of any party hereto except to the extent that such liability results from the material breach of any of such party's covenants, agreements or obligations hereunder or except as set forth in the last sentence of this section. If this Agreement is terminated as a result of the termination of the Merger Agreement and Patina receives expense reimbursement under the Merger Agreement, within three business days of Patina's receipt of the expense reimbursement, Patina shall remit to you an amount equal to 12-1/2 % of the expense reimbursement received by Patina under the Merger Agreement.

14. Records. After the Closing, Patina shall cause SWRG, and you shall cause the appropriate members of the Stillman Group (i) to retain, in a reasonably accessible fashion, for a period consistent with all applicable legal requirements records in their possession with respect to the business of SWRG, and (ii) to provide to SWRG or appropriate members of the Stillman Group, as the case may be, upon their request, reasonable access to those records and to appropriate personnel, during normal business hours and on at least one day's prior written notice, to enable the party seeking such access to prepare financial statements or tax returns or deal with tax audits, or for any other reasonable business purpose.

15. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.

16. Entire Agreement; Nonassignability; Parties in Interest. This Agreement and the documents and instruments delivered pursuant hereto, including the attachments hereto: (a) together constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof, (b) except as otherwise expressly provided or contemplated herein, are not intended to confer upon any other person any rights or remedies hereunder, and (c) shall not be assigned by any party (by operation of law or otherwise) without the written consent of each of the parties hereto; provided, however, that any party shall be entitled to assign its rights and obligations under this Agreement, in whole or in part, and from time to time, to one or more entities or persons affiliated with such party.

17. Severability. In the event that any provision of this Agreement, or the application thereof becomes, or is declared by a court of competent jurisdiction to be, illegal, void or unenforceable, the remainder of this Agreement, and the application of such provision to other persons or circumstances other than those as to which it is determined to be illegal, void or unenforceable, will not be impaired or otherwise affected and will continue in full force and effect and be enforceable to the fullest extent permitted by law.

18. Amendment; Waiver. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. Any waiver of any of the terms or conditions of this Agreement must be in writing and must be duly executed by or on behalf of the party to be charged with such waiver. Except as expressly set forth in this Agreement, the failure of a party to exercise any of its rights hereunder or to insist upon strict adherence to any term or condition hereof on any one occasion shall not be construed as a waiver or deprive that party of the right thereafter to insist upon strict adherence to the terms and conditions of this Agreement at a later date. Further, no waiver of any of the terms and conditions of this Agreement shall be deemed to or shall constitute a waiver of any other term or condition hereof (whether or not similar).

19. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, applicable to agreements made and to be performed entirely within such State, without regard to the conflict of laws principles thereof.

20. No Third Party Beneficiaries. No third party shall have any interest in this agreement or any right to enforce any of the terms hereof.

21. Arbitration.

(a) Any dispute between the parties with respect to the meaning, interpretation or application of this Agreement and any dispute between the parties that this Agreement directs to be submitted to arbitration shall be resolved by arbitration held in The City of New York in accordance with the JAMS Comprehensive Arbitration Rules and Procedures ("JAMS") before a panel of three arbitrators selected as hereinafter provided. The decision of the panel shall be binding upon the parties and enforceable against them by any court having jurisdiction.

(b) Any party (a "Claimant") may initiate an arbitration proceeding hereunder by giving written notice (the "Arbitration Notice") to any other party (the "Respondent") (i) specifying the nature of the dispute in reasonable detail, and (ii) identifying an individual to act as such party's designated arbitrator. Not later than fifteen days after delivery of the Arbitration Notice, the Respondent shall give written notice to the Claimant identifying an individual to act as the Respondent's designated arbitrator. The third arbitrator, who shall act as Chair of the panel, shall be selected by the mutual agreement of the persons acting as the designees of the Claimant and the Respondent and if they are unable to agree within 30 days of the giving of the Arbitration Notice, the third arbitrator shall be appointed by JAMS.

(c) It is the intention of the parties that the arbitration be concluded within 120 days of the giving of the Arbitration Notice, that limited civil discovery consistent with the parties' desire for an expedited proceeding be permitted, that hearings before the arbitrators be limited to a total of not more than six business days, that each side be given not more than two business days to present its case (including opening and closing statements), and that each side be limited to no more than one day for the cross examination of the other side's witnesses. The arbitrators shall issue a written decision which shall be mailed to the parties not more than 10 business days following the completion of the arbitration hearings. The parties may alter the procedural rules set forth herein by joint written instructions given to the arbitrators. The Chair may alter the procedural rules set forth herein upon the request of either party, if the Chair determines that such alteration is fair and equitable in the circumstances.

(d) The arbitrators shall have full authority to resolve all matters in dispute between the parties and to award any remedy or relief that a court in the State of New York could order or grant, including, without limitation, equitable remedies, specific performance of any obligation created under this Agreement, the issuance of an injunction, or the imposition of sanctions for abuse or frustration of the arbitration process, but excluding the power to award punitive damages. The arbitrators shall award to the prevailing party, if any, all reasonable out- of-pocket costs and expenses incurred by such party in connection with the arbitration, including reasonable attorney's fees and disbursements, and such party's share of the administrative costs of the arbitration (including the fees of such party's designated arbitrator in an amount not to exceed the fees payable to the Chair).

[Signature page follows.]

If the above accurately reflects our understanding as to the subject matter thereof please sign the enclosed copy of this letter, and return the same to the undersigned.

Sincerely yours,

Patina Restaurant Group, LLC

By: _____________________________
Fortunato N. Valenti

Agreed:

______________________________
Alan N. Stillman

SCHEDULE I — TRANSFERRED ASSETS

Stock:

As set forth in Section 1, the transfer of the Transferred Assets may be effected by the transfer of stock or other ownership interests (instead of a transfer of assets) as the parties may reasonably agree. At the request of the Stillman Group made not less than 10 days prior to the Closing Date, Patina shall make the request pursuant to Section 1.11 of the Merger Agreement if the conditions and provisions contained therein are satisfied, and any transfer taxes that result from this transfer shall be added to and treated as an assumed liability under Schedule II.

Real Property:

(a) Real property owned by S&W of New Orleans, LLC and S&W of Dallas, LLC and all of the tangible personal property located therein (the "N.O./Dallas Properties").

(b) Leased premises relating to the following NY Restaurants: Quality Meats, Cité and Park Avenue Cafe.

Other Transferred Assets:

(a) NY Locations. Except as otherwise set forth below with respect to the Shared Assets (as such term is defined below), all of SWRG's right, title and interest in and to all of the assets, properties, rights and business of SWRG, of every kind, nature and description, real, personal and mixed, tangible and intangible and wherever situated, located at or used exclusively or primarily in the operation, ownership or maintenance of (A) the following restaurants: Smith & Wollensky (New York), Cité, Maloney & Porcelli, Park Avenue Cafe, Post House and Quality Meats (the "NY Restaurants") and (B) the executive offices of SWRG and the warehouse leased by SWRG in New York (such office and warehouse space being referred to together with the NY Restaurants as the "NY Locations"), including the following:

(i) Fixed Assets. All machinery, equipment, fixtures, furniture and furnishings, smallwares, tables, artwork, antiques, chairs, cash registers, ovens, refrigerators, cooking equipment, wine storage equipment, display cases, shelves, utensils, tools, pans, pots, uniforms, signs, menus, tablecloths, glasses, dishes, silverware, racks, towels, décor, replacement parts and accessories, air conditioners, ventilation systems, heating systems, plumbing and electric, bars, lighting, telephones and telephone systems and other tangible assets owned by SWRG and located at or purchased primarily for use at the NY Locations;

(ii) Inventory. All items of inventories and supplies, including, without limitation, all food, beverages (including liquor, wine (including wine stored in New Jersey) and other alcoholic beverages), raw materials, ingredients, recipes, paper products, cleaning supplies and other supplies in existence, spare parts, samples, models and packaging owned by SWRG and located at or purchased primarily for use at the NY Locations;

(iii) Accounts Receivable. All accounts receivable, credit card receivables, and other rights to receive payment and all prepaid expenses owned by SWRG arising out of the operations of the NY Locations, including amounts payable under the management agreements with respect to the NY Restaurants which are managed by SWRG.

(b) Shared Assets The parties agree that each of them shall have the continuing right, to the extent necessary for the normal conduct of the businesses to be operated by them, to use all intellectual property, trade secrets, confidential information, know-how, customer lists, computer software and documentation, formulae, manufacturing and production processes and techniques, research and development information, product designations, quality standards, investigations, drawings, specifications, designs, plans, improvements, proposals, technical and computer data which are owned or licensed (and in the case of licenses subject to the terms thereof) by SWRG , and that they shall hereafter agree upon reasonable terms and conditions for such use which shall be reflected in the administrative services and cooperative marketing agreement to be entered into by them; provided, however, that the Stillman Group will be granted title to and the exclusive use of those trademarks relating solely to the operations of SWRG in New York City, including but not limited to those incorporating the names Maloney & Porcelli, La Cité, Park Avenue Café, Quality Meats, Mrs. Parks Tavern, Manhattan Ocean Club, One c.p.s. and any variants thereof. The parties shall also share and enter into reasonable arrangements to provide each other access to all data processing, record keeping, information management and accounting systems (including all machinery and equipment necessary or useful to the functioning of any such systems) reasonably necessary for the conduct of their respective businesses. As soon as reasonably practicable following the Closing, the parties shall make suitable arrangements for the division of such assets between them in order to enable the Stillman Group and SWRG to be able to run their respective businesses on a "stand alone" basis.

(c) Claims. All claims, causes of action and rights of recovery or set-off, reserves, prepaid items, deposits and deferred and other charges of SWRG to the extent relating to the NY Locations.

(d) Insurance Proceeds. All insurance proceeds or claims relating exclusively or primarily to the NY Locations.

(e) Sales and other Materials. All catalogues, brochures, sales literature, advertising and promotional material and other selling material prepared for the NY Restaurants, all office supplies, production supplies and other miscellaneous supplies used by the NY Restaurants and all other property or rights of any nature customarily used in the operation of the NY Restaurants to the extent that any of the same have been prepared or acquired exclusively for use in the NY Restaurants and a reasonably allocable share of any of the same that have been prepared or acquired generally for use in the business of SWRG.

(f) Books and Records. Originals or true copies of all operating data and records, whether printed or electronic, including without limitation, customer lists, financial accounting and credit reports, personnel files, records pertaining to suppliers and distributors, correspondence, budgets and all other files, documents and records relating exclusively or primarily to the NY Restaurants (it being understood and agreed that the Stillman Group will maintain the same for at least six years following the Closing and, upon request, will provide SWRG reasonable access thereto for any reasonable business purpose).

(g) Licenses and Permits. Subject to the provisions of clause (b) above, all transferable licenses and permits owned, possessed, granted to or used by SWRG relating to the NY Restaurants.

(h) Telephone and Facsimile Numbers; E-Mail Addresses. SWRG's rights to those telephone and facsimile numbers and the E-Mail addresses used by the NY Locations.

(i) Goodwill. The goodwill and going concern value of SWRG relating to the NY Restaurants.

(j) Management Agreements. Management agreements for Smith & Wollensky (New York), Maloney & Porcelli and Post House, and all amounts due to SWRG as of the Closing thereunder.

(k) Contracts. All contracts, agreements, leases, commitments, arrangements, sales orders and purchase orders of every kind related exclusively or primarily to the NY Locations ("Assigned Contracts"), it being understood that the parties will work cooperatively to allow the NY Restaurants to continue to benefit from any contracts of SWRG not exclusively or primarily related to the NY Restaurants on the same terms and conditions as they have in the past.

(l) Merchandising Payments. Amounts due and payable as of the Closing Date under the merchandising agreement with Bryant Preserving. It is understood and agreed that the merchandising agreement is not part of the Transferred Assets and that except as provided in this clause (l), all payments received or to be received thereunder shall be for the benefit of SWRG and Patina.

(m) Claims Relating to N.O./Dallas Properties. All claims, causes of action, rights of recovery, set off, insurance proceeds, sale proceeds, contracts, leases, agreements, commitments, of every kind in existence at the Closing and arising out of or related exclusively to the N.O./Dallas Properties or the operation of the restaurants at such locations.

(n) Unamortized Loan Costs. All unamortized loan costs and prepaid amounts relating to the mortgages or other security interests encumbering the Miami and/or N.O./Dallas Properties.

(o) Banquet Deposits. All banquet deposits to the extent attributable to the NY Restaurants.

(p) Positive Adjusted Working Capital. Any positive Adjusted Working Capital (as defined in Schedule II-A and subject to the terms thereof).

SCHEDULE II — ASSUMED LIABILITIES

(a) Indebtedness, Mortgages and Capitalized Leases (collectively "Indebtedness"):

(i) All amounts payable or which may become payable (including accrued interest, fees or other charges) in respect of the outstanding mortgage on SWRG's New Orleans real property (approximately $1.8 million as at the date hereof) which must be satisfied in full at the Closing.

(ii) All amounts payable or which may become payable (including accrued interest, fees or other charges) in respect of the SBA loan and the outstanding mortgage on SWRG's Miami real property (approximately $1.4 million on the date hereof), which must be satisfied in full at the Closing.

(iii) All amounts payable or which may become payable (including accrued interest, prepayment fees or other charges, and any option payments) in respect of SWRG's outstanding capitalized equipment lease for equipment housed at the S & W restaurants located in Boston and Houston (approximately $800,000 as at the date hereof), which must be satisfied in full at the Closing so that the SWRG subsidiaries will own such equipment at the Closing free and clear of all liens and encumbrances.

(iv) All amounts accrued (including accrued interest, fees or other charges) as at the Closing in respect of SWRG's existing line of credit and any other indebtedness of SWRG for borrowed money outstanding as at the Closing (none being outstanding on the date hereof and none being anticipated to be outstanding as at the Closing), which must be satisfied in full at the Closing and terminated.

(b) Real Estate Taxes and Assessments. All accrued but unpaid real estate taxes, charges and assessments of any kind and all other liabilities outstanding as at the Closing or arising thereafter with respect to the N.O./Dallas Properties, as well as any outstanding contracts, agreements or obligations of any kind with respect to such properties.

(c) Las Vegas Property Infractions. All amounts due and owing as at the Closing and all amounts required thereafter to modify the Las Vegas property so that it does not encroach its neighbor's property line and does not sit on a gas line.

(d) Liabilities under Transferred Contracts. All of the obligations of SWRG and its subsidiaries outstanding on the Closing Date or arising from or after the Closing Date under the management agreements, leases and other contracts constituting part of the Transferred Assets.

(e) New York Liabilities. All accounts payable and all other liabilities of any kind, known or unknown, related to the NY Locations.

(f) New Orleans and Dallas Liabilities. All liabilities and obligations related to the Dallas and New Orleans locations.

(g) Employee Obligations. Severance, change of control payments, payroll, employment taxes, benefits, COBRA payments and other obligations (i) of and to the NY Employees as described in Schedule IV, or (ii) referred to in Item 6 of Part 2.14 of the Disclosure Schedule to the Merger Agreement. In addition, (A) all COBRA payments outstanding as of the Closing Date or payable after the Closing Date of or to employees who worked prior to the Closing at the Dallas or New Orleans S&W restaurant, and (B) all IBNR claims of employees of SWRG or its subsidiaries as of the Closing Date.

(h) Sales Taxes. All sales tax obligations of SWRG or its subsidiaries relating to the NY Locations or the New Orleans or Dallas restaurants.

(i) Income Taxes. All (i) income tax obligations of SWRG or its subsidiaries for the period January 1, 2007 to the Closing, and (ii) all tax obligations referred to in Items 1-6 of Part 2.14 of the Disclosure Schedule.

(j) St. James Royalties. Royalties payable to St. James at or after the Closing to the extent attributable to the NY Restaurants or the New Orleans or Dallas restaurants.

(k) POS Systems. 60% (but not more than $336,000) of any capital investment by SWRG or its subsidiaries made after the Closing Date and on or before December 31, 2007 in the POS systems in the 8 SWRG Restaurants.

(l) Air Conditioning. 60% (but not more than $300,000) of any capital investment by SWRG or its subsidiaries after the Closing Date in the air conditioning system in the Las Vegas S&W restaurant.

(m) Taxes relating to Split-Off. All sales, income, if any, and other taxes payable by SWRG or its subsidiaries in connection with the Split-off and any NY real property transfer taxes in connection with the Split-off or Merger.

(n) Transaction Expenses. The following fees, disbursements and expenses related to the Merger ("Transaction Expenses"):

Special Committee Counsel – Willkie Farr & Gallagher

Special Committee Banker — TM Capital

Compensation of Members of Special Committee

SWRG Counsel – Paul Hastings

Proxy fees — printing, SEC filing fee and proxy solicitor

One-half of the fees payable under the Hart Scott Rodino Act

Fees and expenses of the Payment Agent referred to in the Merger Agreement

Fees of counsel to St. James Associates, L.P. relating to the proposed amendment to the SWRG license agreement.

Legal fees and expenses of counsel to SWRG, if any, incurred in the drafting of new Management Agreements or modifications to the existing Management Agreements

12.5% of the uninsured portion of the fees and disbursements of the attorneys representing SWRG in connection with any litigation based upon or relating to the Merger.

SCHEDULE II-A — ADJUSTED WORKING CAPITAL

Adjusted Working Capital ("AWC") shall be determined in accordance with the provisions set forth below.

AWC shall mean:

(i) all cash on hand, bank deposits, marketable securities, and similar liquid investments of SWRG and its subsidiaries ("Cash and Cash Equivalents") as of the close of business on the day preceding the Merger (the "AWC Close"), but not including any Cash and Cash Equivalents otherwise included in the Transferred Assets; plus

(ii) the ratable portion of all prepaid expenses (including prepaid licenses but excluding prepaid supplies) attributable to the post-Closing period with respect to or arising from the 8 SWRG Restaurants; plus

(iii) the ratable portion of all rent and utilities paid prior to the Closing Date with respect to the 8 SWRG Restaurants, to the extent attributable to the post-Closing period; plus

(iv) to the extent that SWRG or its subsidiaries have paid for capital investments after the date hereof and prior to the Closing Date in the POS systems in the 8 SWRG Restaurants, 40% of such capital investments; plus

(v) to the extent that SWRG or its subsidiaries have paid for capital investments after the date hereof and prior to the Closing Date in the air conditioning system in the Las Vegas S&W restaurant, 40% of such capital investments; plus

(vi) the ratable portion of all D&O, CGL and workers compensation insurance premiums paid prior to the Closing Date and attributable to the post-Closing period but only to the extent that Patina advises you at the Closing that it intends to continue the policies after the Closing (and if Patina does not continue any such policy, SWRG will assign such policy and any return of premium claim attributable thereto to you as part of the Transferred Assets); plus

(vii) the Positive Inventory Adjustment (if any) described in Section 8 of the Agreement; plus

(viii) 87.5% of the uninsured portion of the fees and disbursements of the attorneys representing SWRG in connection with any litigation based upon or relating to the Merger that are paid by SWRG prior to the Closing Date; less

(ix) all accrued but unpaid payroll, employment taxes, benefits (including medical), bonuses and related expenses computed as of the AWC Close with respect to the employees of the 8 SWRG Restaurants (including all outstanding checks therefor); less

(x) all accrued but unpaid sales taxes computed as of the AWC Close with respect to the 8 SWRG Restaurants; less

(xi) the ratable portion of all accrued but unpaid rent obligations (including percentage rent and real estate tax and other pass-throughs), amounts due under leases (including equipment leases), utilities and service contract obligations computed as of the AWC Close with respect to the 8 SWRG Restaurants; less

(xii) all accrued but unpaid royalties to St. James computed as of the AWC Close with respect to the 8 SWRG Restaurants; less

(xiii) all operating expenses (excluding trade payables) attributable to the 8 SWRG Restaurants that are paid after the Closing Date to the extent allocable or attributable to any pre-Closing period; less

(xiv) all accrued but unpaid legal, accounting and other professional fees of SWRG and its subsidiaries (to the extent not included in Transaction Expenses) as of the Closing; less

(xvi) the Negative Inventory Adjustment (if any) described in Section 8 of the Agreement; less

(xvi) income taxes accrued but unpaid as of the AWC Close with respect to the 8 SWRG Restaurants; less

(xvii) to the extent that SWRG has paid for capital improvements during 2007 to the 8 SWRG Restaurants (other than in connection with the POS systems in the 8 SWRG Restaurants and other than in connection with the air conditioning system in the Las Vegas S&W restaurant) that aggregate less than the Capital Requirement, the difference between the amount paid for such aggregate capital improvements and the Capital Requirement; less

(xviii) the amount by which at the AWC Close the trade payables of SWRG and its subsidiaries (other than those trade payables attributable to the NY Locations, which you are assuming) including all outstanding but held checks in payment therefor exceed the Trade Payables Adjustment (as defined below); less

(xix) any unpaid advertising costs as of the AWS Close to the extent attributable to advertisements that ran prior to the Closing; less

(xx) any banquet deposits as of the Closing Date to the extent attributable to the 8 SWRG Restaurants.

For purposes of determining AWC, (A) the term "Capital Requirement" means $100,000 times the number of months (pro rated for partial months) in 2007 prior to the Closing, and (B) the term "Trade Payables Adjustment" means the product of (i) the fraction determined by dividing the aggregate amount used to determine the cost of goods sold with respect to the 8 SWRG Restaurants for the calendar month preceding the Closing by the number of days in such month, and (ii) 17.5.

SCHEDULE III — INDEMNIFIED LIABILITIES

1. The Stillman Group will indemnify, defend and hold SWRG and its subsidiaries harmless from and against all costs, liabilities and expenses (including reasonable attorneys' fees and disbursements) based upon or arising out of or relating to the following:

(a) Assumed Liabilities – Those listed or referenced on Schedule II

(b) Lawsuits and asserted claims:

(i)

Parade 59, LLC v. Plaza Operating Partners, ELAD Properties, LLC and CPSI, LLC.

(ii)

Employee lawsuit against Park Avenue Café.

(iii)

Braunstein and other claimants involving the Miami restaurant.

(iv)

The vendor claim referred to in Item 5 of Part 2.19 of the Disclosure Schedule to the Merger Agreement.

Any guaranties provided by SWRG or its subsidiaries with respect to the Transferred Assets or the Assigned Contracts.

Any guaranties provided by SWRG or its subsidiaries with respect to or related to the New Orleans restaurant or the Dallas restaurant.

(d) Gift Certificates:

Against the costs of fulfilling any gift certificates outstanding on the Closing Date and redeemed after the Closing at one of the 8 SWRG Restaurants, such costs to be determined at the full retail value thereof in the case of gift certificates that were sold by SWRG and at 30% of the retail value thereof in the case of gift certificates that were distributed for promotional purposes.

(e) Other:

Any liabilities or obligations, disclosed or undisclosed, known or unknown, fixed or contingent and of whatever nature, to the extent related solely or primarily to the Transferred Assets whether based upon any act or omission occurring, or any expense incurred, prior to or after the Closing.

2. Except for costs and expenses expressly assumed, indemnified against or otherwise accounted for in this Agreement (including the Schedules thereto) and provided that the Closing occurs, SWRG shall indemnify, defend and hold the Stillman Group harmless from and against all costs and expenses, including reasonable attorneys' fees and disbursements, to the extent of any liabilities or obligations, disclosed or undisclosed, known or unknown, fixed or contingent and of whatever nature, arising before, on or after the Closing that are based upon or arising out of the business or operations of SWRG or its subsidiaries but not those related solely or primarily to the Transferred Assets.

3. Any indemnification by the Stillman Group shall be made after taking into account any insurance recoveries by SWRG and the present value of any net tax benefits to be received by SWRG in connection with the liability. The amount of any indemnification by the Stillman Group shall be reduced by any understatement of assets or overstatement of liabilities in the calculation of the Adjusted Working Capital (whether resulting from a computational, factual inaccuracy or estimate which proves to be incorrect). The Stillman Group at its expense shall be entitled to direct the defense of any claim for which it is liable for indemnification and SWRG shall not settle any claim subject to indemnification which would impose liability on the Stillman Group without the prior consent of the Stillman Group, which consent shall not be unreasonably withheld.

4. Any indemnification by SWRG shall be made after taking into account any insurance recoveries by the Stillman Group and the present value of any net tax benefits to be received by the Stillman Group in connection with the liability. The amount of any indemnification by SWRG shall be reduced by any understatement of liabilities or overstatement of assets in the calculation of the Adjusted Working Capital (whether resulting from a computational, factual inaccuracy or estimate which proves to be incorrect). SWRG at its expense shall be entitled to direct the defense of any claim for which it is liable for indemnification and the Stillman Group shall not settle any claim subject to indemnification which would impose liability on SWRG without the prior consent of SWRG, which consent shall not be unreasonably withheld.

SCHEDULE IV — ARRANGEMENT RELATING TO EMPLOYEES

At the Closing, the Stillman Group shall assume responsibility for all employees employed by SWRG and based in New York City (the "NY Employees"). The Stillman Group will be responsible for any severance, stay bonuses, change of control payments (collectively, "Severance Obligations"), salary, bonuses, benefits (including insurance payments, COBRA payments and the payment of all insurance claims incurred but not reported prior to the Closing), and payroll and employment taxes (including the employees' and employer's shares thereof) to the NY Employees that are outstanding on the Closing Date or arise from and after the Closing Date or by reason of the transactions occurring at the Closing Date. From and after the Closing, the Stillman Group will provide to such employees benefits comparable to those presently being received, but nothing herein shall prevent the Stillman Group from thereafter modifying or terminating any such benefits. Employees who are participants in the 401(k) plan will be able to roll over their assets into a new plan to be established by the Stillman Group. Nothing herein shall require the Stillman Group to continue to employ any of the NY Employees.

EX-2 3 smith-ex2_022707.htm Exhibit 2

EXECUTION VERSION

VOTING AGREEMENT

This Voting Agreement (this "Agreement"), dated February 26, 2007, is by and among Patina Restaurant Group, LLC, a Delaware limited liability company ("Parent"), SWRG Holdings, Inc., a Delaware corporation ("Merger Sub"), and those stockholders of the Company listed on Schedule I hereto (each, a "Stockholder," and collectively, the "Stockholders").

WHEREAS, contemporaneously with the execution and delivery of this Agreement, Parent, Merger Sub and The Smith & Wollensky Restaurant Group, Inc. (the "Company") are entering into an Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which Merger Sub will be merged with and into the Company (the "Merger");

WHEREAS, each Stockholder owns beneficially and of record the number of shares of common stock (the "Common Stock") of the Company set forth opposite such Stockholder's name on Schedule I hereto;

WHEREAS, Parent, Merger Sub, the Company and the Stockholders desire to set forth their agreement with respect to the voting of the Stockholders' shares of Common Stock with respect to the Merger and the Merger Agreement; and

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Voting of Common Stock. Each Stockholder hereby agrees that, during the time this Agreement is in effect, at any meeting of the stockholders of the Company, however called, or in any other circumstance in which the vote, consent or approval of stockholders of the Company, in their capacity as stockholders, is sought, such Stockholder shall (a) vote such Stockholder's shares of Common Stock to approve and vote in favor of the Merger Agreement and the transactions contemplated by the Merger Agreement and any other actions or agreements required in furtherance thereof; (b) vote such Stockholder's shares of Common Stock against any action or agreement that would result in a breach of any covenant, representation or warranty or any other obligation or agreement of the Company under the Merger Agreement; and (c) vote such Stockholder's shares of Common Stock against any action or agreement (other than the Merger Agreement or the transactions contemplated thereby) that would impede, interfere with, delay, postpone or attempt to discourage the Merger, including, but not limited to: (i) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company or any of its subsidiaries; (ii) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries or a reorganization, recapitalization or liquidation of the Company or any of its subsidiaries; (iii) any change in the management or board of directors of the Company, except as otherwise agreed to in writing by Parent; (iv) any material change in the present capitalization or dividend policy of the Company; or (v) any other material change in the Company's corporate structure or business. Except as set forth in this Agreement, Stockholder may vote the Common Stock on all other matters.

2. Revocation of Prior Proxies. Each Stockholder represents that any proxies heretofore given in respect of such Stockholder's shares of Common Stock are revocable, and that any such proxies are hereby revoked.

3. No Inconsistent Arrangements. Each Stockholder hereby covenants and agrees that, except as contemplated by this Agreement and the Merger Agreement, it shall not (a) except to Merger Sub, transfer (which term shall include, without limitation, any sale, gift, pledge or other disposition) or consent to any transfer of any or all of such Stockholder's shares of Common Stock or any interest therein unless each Person (as defined in the Merger Agreement) to which any of such Common Stock, or any interest in any of such Common Stock, is or may be transferred shall have (i) executed a counterpart of this Agreement, and (ii) agreed in writing to hold such Common Stock subject to all of the terms and provisions of this Agreement; (b) except with Parent, enter into any contract, option or other agreement or understanding with respect to any transfer of any or all of such Stockholder's shares of Common Stock or any interest therein; (c) grant any proxy, power-of-attorney or other authorization in or with respect to such Stockholder's shares of Common Stock; (d) deposit any of such Stockholder's shares of Common Stock into a voting trust or enter into a voting agreement or arrangement with respect to such Stockholder's shares of Common Stock; or (e) take any other action, in his, her or its capacity as a stockholder, that would in any way restrict, limit or interfere with the performance of his, her or its obligations hereunder or the transactions contemplated hereby or which would make any representation or warranty of such Stockholder hereunder untrue or incorrect.

4. No Solicitation. Each Stockholder, in his, her or its capacity as a stockholder, hereby agrees that he, she or it shall not, and shall not permit or authorize any of his, her or its representatives or agents to, directly or indirectly, encourage, solicit, initiate or engage in discussions or negotiations with, or furnish any non-public information regarding the Company or the Merger to, any Person or group (other than Parent or Merger Sub or any of their affiliates or representatives) concerning any Takeover Proposal (as defined in the Merger Agreement), other than in their capacities as officers and/or directors of the Company and in accordance with the terms of the Merger Agreement. Each Stockholder will immediately cease any existing discussions or negotiations with any parties conducted heretofore with respect to any Takeover Proposal.

5. Reasonable Best Efforts. Subject to the terms and conditions of this Agreement, each Stockholder, in his, her or its capacity as a stockholder, hereby agrees to use all reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement. Each Stockholder shall promptly consult with Parent and provide any necessary information and material with respect to all filings made by such Stockholder with any Governmental Authority (as defined in the Merger Agreement) in connection with this Agreement and the Merger Agreement and the transactions contemplated hereby and thereby.

6. Waiver of Appraisal Rights. Each Stockholder hereby waives any rights of appraisal or rights to dissent from the Merger that it may have.

7. Representations and Warranties of Stockholders. Each Stockholder hereby represents and warrants to Parent and Merger Sub as follows:

(a) Title. Except as set forth on Schedule I hereto, such Stockholder has good and valid title to such Stockholder's shares of Common Stock, free and clear of any lien, pledge, charge, encumbrance or claim of whatever nature.

(b) No Other Rights. Except as set forth on Schedule I hereto, there are no outstanding options, warrants or rights to purchase or acquire the shares of Common Stock owned by such Stockholder.

(c) Ownership of Shares. On the date hereof, the shares of Common Stock owned by such Stockholder are owned of record or beneficially by such Stockholder and, on the date hereof, except as set forth on Schedule I hereto, such shares of Common Stock owned by such Stockholder constitute all of the shares of Common Stock owned of record or beneficially by such Stockholder and Stockholder does not hold any securities convertible into or exchangeable for shares of Common Stock. Except as set forth on Schedule I hereto, such Stockholder has sole voting power and sole power of disposition with respect to all of the shares of Common Stock owned by such Stockholder, with no restrictions, subject to applicable federal and state securities laws, on such Stockholder's rights of disposition pertaining thereto.

(d) No Encumbrances. The Shares listed beside the Stockholder's name on Schedule I hereto and the certificates representing such Shares are now, and at all times during the term hereof will be, held by such Stockholder, or by a nominee or custodian for the benefit of such Stockholder, free and clear of all liens, claims, security interests, proxies, voting trusts or agreements, understandings or arrangements or any other encumbrances whatsoever, except for any such encumbrances or proxies arising hereunder.

(e) Reliance by Parent. Such Stockholder understands and acknowledges that Parent and Merger Sub have entered into the Merger Agreement in reliance upon such Stockholder's execution, delivery and performance of this Agreement.

(f) Required Filings and Consents. The execution, delivery and performance of this Agreement by such Stockholder will not violate or result in a breach by such Stockholder of, or constitute a default under, or conflict with, or cause any acceleration of any obligation with respect to (a) any provision or restriction of any governing instrument or document, stockholder's agreement, voting trust, proxy, or other similar agreement, (b) any loan agreement, indenture, lease, or mortgage to which such Stockholder is a party or by which such Stockholder is bound, or (c) any order, judgment, award, decree, law, rule, ordinance, regulation, or other restriction of any kind or character to which any assets or properties of such Stockholder is subject or by which such Stockholder is bound.

(g) Power; Binding Agreement. Such Stockholder has the legal capacity, and all the necessary power and authority to enter into and perform all of his, her or its obligations under this Agreement. The execution, delivery and performance of this Agreement by such Stockholder will not violate any contract, instrument, arrangement or other agreement to which such Stockholder is a party including, without limitation, any voting agreement, stockholders agreement or voting trust. The execution, delivery and performance of this Agreement by such Stockholder will not violate any law, order, judgment or decree to which Stockholder is a party. This Agreement has been duly and validly executed and delivered by such Stockholder, and assuming this Agreement has been duly and validly authorized, executed and delivered by each party hereto other than such Stockholder, this Agreement constitutes a valid and binding agreement of such Stockholder, enforceable against such Stockholder in accordance with its terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws, now or hereafter in effect, affecting creditor rights generally; and (ii) the remedy of specific performance and injunctive and other equitable relief may be subject to equitable defenses and to the discretion of the court.

8. Binding on Subsequently Acquired Shares of Common Stock. Each Stockholder agrees that any shares of Common Stock of the Company to which Stockholder purchases or with respect to which such Stockholder otherwise acquires beneficial ownership or voting rights, directly or indirectly, after the date of this Agreement, including, without limitation, shares issued upon the conversion, exercise or exchange, as the case may be, of securities held by such Stockholder that are convertible into, or exercisable or exchangeable for, shares of Common Stock, shall be subject to the terms and conditions of this Agreement to the same extent as if such shares of Common Stock were included on Schedule I hereto.

9. Miscellaneous.

(a) Counterparts. This Agreement may be executed in one or more counterparts, each of which together shall be deemed an original, but all of which together shall constitute one and the same instrument.

(b) Governing Law. This Agreement shall be deemed to be made in, and in all respects shall be interpreted, construed and governed by and in accordance with the internal laws of, the State of Delaware, without regard to the conflicts of law principles thereof.

(c) Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise.

(d) Amendments; Waivers. This Agreement may not be amended, changed, supplemented, waived or otherwise modified, except upon the execution and delivery of a written agreement executed by all of the relevant parties hereto, provided that Schedule I attached hereto may be supplemented by Parent by adding the name and other relevant information concerning any stockholder of Parent who agrees to be bound by the terms of this Agreement without the agreement of any other party hereto, and thereafter such added stockholder shall be treated as a "Stockholder" for all purposes of this Agreement.

(e) Successors; Assigns; Transferees. The provisions of this Agreement shall be binding upon the successors, assigns and transferees of each of the parties hereto.

(f) Specific Performance. Each Stockholder acknowledges and agrees that the failure of such Stockholder to perform the provisions of this Agreement in accordance with their specific terms or to otherwise breach such provisions will cause irreparable injury to Parent and Merger Sub, for which damages, even if available, will not be an adequate remedy. Accordingly, each Stockholder hereby consents to the issuance of injunctive relief by any court of competent jurisdiction to compel performance of such Stockholder's obligations, including an injunction to prevent breaches, and to the granting by any such court of the remedy of specific performance of the terms and conditions hereof.

(g) Termination. This Agreement shall terminate, and neither Parent, Merger Sub nor any Stockholder shall have any rights or obligations hereunder and this Agreement shall become null and void and have no effect upon the termination of the Merger Agreement in accordance with its terms, except nothing in this Section 9(g) shall relieve any party of liability for breach of this Agreement.

(h) No Third Party Beneficiaries. This Agreement is not intended to be for the benefit of, and shall not be enforceable by, any Person who or which is not a party hereto.

(i) Further Assurances. From time to time, at any other party's written request and without further consideration, each party hereto shall execute and deliver such additional documents and take all such further lawful action as may be necessary or desirable to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement.

(j) Descriptive Headings. The descriptive headings used herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement.

(k) Notices. All notices or communications hereunder shall be in writing (including facsimile or similar writing) addressed as follows:

To the Stockholders:

At the addresses set forth on Schedule I hereto.

To Parent or Merger Sub:

               Patina Restaurant Group, LLC
                120 West 45^th Street
                New York NY 10036
                Attention: Fortunato N. Valenti
                Facsimile: (212) 302-8032

With a Copy to:

                Dornbush Schaeffer Strongin & Venaglia, LLP
                747 Third Avenue
                New York, NY 10017
                Attention: Landey Strongin, Esq.
                Facsimile: (212) 753-7673

With a Copy to:

                Stroock & Stroock & Lavan LLP
                180 Maiden Lane
                New York, NY 10038
                Attention: Martin H. Neidell
                Facsimile: (212) 806-7836

All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered in person, by facsimile, receipt confirmed, or on the next business day when sent by overnight courier or on the second succeeding business day when sent by registered or certified mail (postage prepaid, return receipt requested).

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written above.

PATINA RESTAURANT GROUP, LLC

By:___________________________________
       Name: Fortunato N. Valenti
       Title: Chief Executive Officer

SWRG HOLDINGS, INC.

By:___________________________________
       Name: Fortunato N. Valenti
       Title: Chief Executive Officer

ALAN N. STILLMAN

___________________________________

STILLMAN'S FIRST, INC.

By:___________________________________
       Name:
       Title:

LA CITE, INC.

By:____________________________________
       Name:
       Title:

WHITE & WITKOWSKY

By:____________________________________
       Name:
       Title:

THURSDAYS SUPPER PUB, INC.

By:____________________________________
       Name:
       Title:

ALAN N. STILLMAN GRANTOR RETAINED
ANNUITY TRUST

By:____________________________________
       Name:
       Title:

DONNA STILLMAN TRUST

By:____________________________________
       Name:
       Title:

SCHEDULE I

NAME AND ADDRESS OF STOCKHOLDER

NUMBER OF SHARES

Alan N. Stillman
c/o The Smith & Wollensky Restaurant Group, Inc.
880 Third Avenue
New York, NY 10022

56,791

Stillman's First, Inc.
c/o The Smith & Wollensky Restaurant Group, Inc.
880 Third Avenue
New York, NY 10022

107,500

La Cite, Inc.
c/o The Smith & Wollensky Restaurant Group, Inc.
880 Third Avenue
New York, NY 10022

348,191

White & Witkowsky, Inc.
c/o The Smith & Wollensky Restaurant Group, Inc.
880 Third Avenue
New York, NY 10022

395,070

Thursdays Supper Pub., Inc.
c/o The Smith & Wollensky Restaurant Group, Inc.
880 Third Avenue
New York, NY 10022

385,400

Alan N. Stillman Grantor Retained Annuity Trust
c/o The Smith & Wollensky Restaurant Group, Inc.
880 Third Avenue
New York, NY 10022

175,000

Donna Stillman Trust
c/o The Smith & Wollensky Restaurant Group, Inc.
880 Third Avenue
New York, NY 10022

90,754

EX-3 4 smith-ex3_022707.htm Exhibit 3

Patina Restaurant Group, LLC
120 West 45th Street
New York, New York 10036

February 26, 2007

St. James Associates, L.P.
c/o Levi Company
85 Larchmont Avenue
Larchmont, New York 10538

Amended and Restated Sale and License Agreement
dated as of the 1st day of January, 2006, by and
between St. James Associates, L.P., as Licensor,
and The Smith & Wollensky Restaurant Group, Inc.,
as Licensee, (the “License Agreement”)

Gentlemen:

Patina Restaurant Group, LLC and/or its principals (“Patina”) propose to acquire all of the outstanding equity interests (the “Acquisition”) in The Smith & Wollensky Restaurant Group, Inc. (“SWRG” or “Licensee”). Following the Acquisition, SWRG, as a wholly owned subsidiary of Patina, will continue to be bound by all of the terms, covenants and conditions of the License, and will continue to own and operate the existing eight Smith & Wollensky restaurants owned by SWRG and located outside of the City of New York (the “Licensed Units”). Substantially all of the other assets of SWRG (including the management agreement between St. James Associates, L.P. (“St. James”) and SWRG relating to the operation of the Smith & Wollensky restaurant in New York City) are to be transferred to Mr. Alan Stillman or his designees at the closing of the Acquisition (the “Split-off”). Following the Acquisition and the Split-off, Mr.Stillman will have no equity interest in or any management or consulting responsibilities at SWRG or Patina.

This letter sets forth the understanding between St. James and Patina as to the Acquisition and the Split-off and as to certain amendments to the License Agreement which are to become effective upon the closing of the Acquisition. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the License Agreement.

1. At the Closing of the Acquisition, Patina shall cause SWRG to execute and deliver to St. James, and St. James will execute and deliver to, SWRG, a letter agreement in the form of that attached hereto as Schedule 1, amending and clarifying certain provisions of the License Agreement.

2. The obligations of Patina and St. James under the terms of this letter agreement shall automatically terminate and be of no further force and effect (and upon such termination neither party shall have any further obligation or responsibility to the other hereunder) if the Acquisition has not been consummated by Patina (or an Affiliate of Patina) and SWRG by the earlier to occur of the following: (i) the date on which either SWRG or Patina (or an Affiliate of Patina) either (x) gives St. James or the other written notice or (y) publicly announces that either Patina (or an Affiliate of Patina) or SWRG has abandoned its efforts to conclude the Acquisition, (ii) an Acquisition occurs with an entity other than Patina (or an Affiliate of Patina) or (iii) January1, 2008, unless the Acquisition has closed prior to such date.

3. Concurrently, Patina has delivered to St. James Associates, L.P. copies of the Patina Restaurant Group, LLC unaudited balance sheet as at December 31, 2006 (the “Balance Sheet”). Patina warrants and represents that the Balance Sheet fairly presents the financial condition of Patina as of the date specified.

[Signature Page Follows]

If the above accurately reflects our understanding as to the subject matter thereof, please so indicate by signing the enclosed copy of this letter and retuning the same to the undersigned.

		Sincerely yours,
		Patina Restaurant Group, LLC
		By:________________________
		Fortunato N. Valenti
St. James Associates, L.P.
By its General Partners:
Chamblair Realty, Inc.	and	Smith & Wollensky Operating Corp.
By: _______________________		By: _______________________
Thomas J. Malmud, President		Alan N. Stillman, President

SCHEDULE 1—FORM OF AMENDMENT TO LICENSE AGREEMENT

The Smith & Wollensky Restaurant Group, Inc.
880 Third Avenue
New York, New York 10022

[Insert Closing Date] , 2007

St. James Associates, L.P.
c/o Levi Company
85 Larchmont Avenue
Larchmont, New York 10538

Gentlemen:

_________________, a Delaware ____________ (the “SWRG Parent”) has, this day, (the “Effective Date”) acquired all of the outstanding equity interests (the “Acquisition”) in The Smith & Wollensky Restaurant Group, Inc. (“SWRG” or “Licensee”). To induce St. James Associates, L.P. to execute and deliver this agreement, SWRG Parent and the Licensee jointly and severally warrant and represent to Licensor (i) that Licensee and SWRG Parent are affiliates of Patina Restaurant Group, LLC (“Patina”), (ii) that Patina and SWRG Parent are beneficially owned and controlled by Shidax Corporation, Joachim Splichal and Fortunato N. Valenti, (iii) that SWRG Parent is qualified to do business in the State of New York and (b) that SWRG Parent owns all of the issued and outstanding shares of SWRG.

This letter agreement is entered into in connection with the closing of the Acquisition and sets forth the understanding between St. James and SWRG as to certain matters relating to the License Agreement. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the License Agreement.

1. Modification of Provisions of Paragraph 4. with respect to new Restaurants.

1.1 Paragraph 4 of the License Agreement is hereby modified as follows:

1.1.1 To add the following language to Paragraph 4.b: "Any relocated Restaurant which is opened in compliance with the provisions of the last grammatical paragraph of Paragraph 4.b of the License Agreement shall not satisfy the obligations of Licensee under Paragraph 4.d of the License Agreement to open new Restaurants and make Additional Sale Price Payments (said obligations of Licensee, collectively, the “Build Out Obligations”).

1.1.2 To add a new subparagraph 4.d. to provide as follows:

d. New Restaurants.

“Between the Effective Date and the sixth (6th) anniversary of the Effective Date (said period, the “Applicable Period”), Licensee shall (i) open up at least two (2) new Restaurants and make the Additional Sale Price Payment that would be due with respect to each such Restaurant pursuant to the provisions of Paragraph 4.b.(ii) of the License Agreement calculated as of the date of each such payment and (ii) make a non refundable advance payment of Additional Sale Price Payments equal to the product of (x) the number by which four (4) exceeds the number of new Restaurants that are actually opened at that time multiplied by (y) the Additional Sale Price Payment that would be due pursuant to the provisions of Paragraph 4.b.(ii) of the License Agreement calculated as of the date of such payment. Any such non refundable advance payment shall be credited against and serve to reduce any future Additional Sale Price Payments due from Licensee under the provisions of Paragraph 4.b.(ii).”

2. Modification of Provisions of Paragraph 5.b with respect to Sales at other Steakhouses.

The License Agreement is hereby amended by adding the following sentences to the end of Paragraph 5. b.: “Notwithstanding the preceding, no one percent (1%) or other Percentage Royalty will be payable with respect to Restaurant Sales or Non-Restaurant Sales at any steakhouse owned or operated by Licensee or any of its Affiliates provided that such restaurant (a) is not operated under the Marks, and (b) is located in Japan, China, South Korea, Singapore or Thailand. The one percent (1%) Percentage Royalty shall, however, be payable under the provisions of this Paragraph 5.b. with respect to any Restaurant Sales or Non-Restaurant Sales during the Applicable Period until the fulfillment by Licensee of its Build Out Obligations. In the event that Licensee does not fulfill the Build Out Obligations during the Applicable Period, Licensee shall thereafter be obligated to pay the one percent (1%) Percentage Royalty in accordance with the provisions of the License Agreement and such obligation shall not terminate if Licensee opens up a number of additional new Restaurants after the sixth (6th) anniversary of the Effective Date so that the total of new Restaurants opened up after the Effective Date equals or exceeds four (4) new Restaurants.

3. Clarifications and Technical Amendments.

3.1 Licensee warrants and represents that attached hereto as Exhibit A is a complete listing of the restaurants owned, operated or managed by Patina as of the Effective Date. Information concerning such restaurants and typical menus for them can be found on Patina’s web site at www.patina group.com. Licensee represents and warrants to Licensor that other than Nick & Steph’s, none of such restaurants is a “steakhouse” within the meaning of Paragraph 5.b. of the License Agreement. SWRG acknowledges that Nick & Stef’s is a “steakhouse” within the meaning of Paragraph 5.b. of the License Agreement and that following the closing of the Acquisition, Licensee will be required to pay a one percent (1%) Percentage Royalty pursuant to the provisions of said Paragraph 5.b with respect to Restaurant Sales and Non-Restaurant Sales at any Nick & Stef’s restaurant which is opened on or after the Effective Date but will not be required to pay any such Percentage Royalty with respect to sales at Nick & Stef’s restaurants that were opened prior to the Effective Date. Licensee further acknowledges and agrees that if after the Effective Date any of the other restaurants now owned, operated or managed by Patina or any Affiliate of Patina or subsequently acquired by Patina or any Affiliate of Patina (or any other Affiliate of Licensee) become or are commonly identified or considered by the public as a steakhouse, then Licensee shall become liable to pay to Licensor pursuant to the provisions of said Paragraph 5.b. a one percent (1%) Percentage Royalty on the Restaurant Sales and Non-Restaurant Sales at each of such restaurants.

3.2 The Licensee hereby acknowledges that it continues to be bound by all of the terms and provisions of the License Agreement, and represents and warrants to Licensor that the principals of Patina are reputable restaurant operators that have managed high quality, fine dining restaurants continuously during the five-year period immediately preceding the date hereof and that Patina is a nationally known reputable company active in the food service business. Based on such representation, and the representations contained elsewhere herein as to the beneficial ownership of Licensee, SWRG Parent and Patina, Licensor acknowledges that the Acquisition is expressly permitted by the first sentence of Paragraph 8.b(i) of the License Agreement.

3.3 Paragraph 8. b. of the License Agreement is hereby modified by deleting all of the text after the first “provided, however” provision thereof and replacing that language with the following: “provided, however, that if Licensee shall sell or otherwise transfer its entire business (as opposed to merely its rights under this Agreement), whether simultaneously or subsequent to any assignment permitted hereby, then this Agreement and all rights of the Licensee hereunder shall terminate simultaneously with such sale unless prior thereto, Licensee or its assignee shall furnish to Licensor then current audited financial statements demonstrating that such assignee has a net worth of not less than $20 Million (determined in accordance with generally accepted accounting principles and after giving effect to the assignment but excluding the value of the assets acquired and the liabilities assumed from Licensee).

3.4 Paragraph 12.a (iv) is hereby deleted to eliminate any prohibition on the opening of steakhouses that do not utilize the Marks.

3.5 The notice provisions set forth in Paragraph 18.e. of the License Agreement are hereby amended as follows: (a) to provide that notices to SWRG be sent to it in care of Patina Restaurant Group, LLC 120 West 45th Street, New York, New York 10036, Attention: Chief Executive Officer and that copies of all such notices be sent to: Dornbush Schaeffer Strongin & Venaglia, LLP, 747 Third Avenue, New York, New York 10017, Attention: Landey Strongin, Esq. and (b) to provide that after the Effective Date all payments to Licensor shall be made to St. James Associates, L.P. c/o Smith & Wollensky Operating Corp., 880 Third Avenue, New York, New York, 10022, Attention: Alan N. Stillman.

3.6 Paragraph 18.f of the License Agreement is hereby deleted in its entirety and replaced by the following:

“f. Licensor hereby acknowledges that Licensee and its Affiliates are currently engaged in other business ventures and activities which could be considered to be competitive with the NY Restaurant and any other Restaurants and Grills which may hereafter be opened. Subject to the specific limitations contained in this Agreement, Licensee and its Affiliates may engage in other business ventures of every nature and description, independently or with others, including without limitation restaurant businesses in all its phases, even if the same compete with the NY Restaurant or any Restaurants or Grills, and except as expressly provided herein, neither Licensor nor any partner thereof shall have any rights in or claims with respect to said ventures, or the income or profits derived therefrom.”

3.7 The following definitions in the License Agreement are modified:

3.7.1 The second sentence of the definition of Affiliate contained in Paragraph 1 of the License Agreement is hereby deleted and replaced by the following: “The term “Affiliate” shall also include any limited liability company, corporation or other entity which any Affiliate of Licensee “controls”, that is (x) in the case of a corporation, where any Affiliate of Licensee possesses the power to direct the management of the entity through ownership of a majority of the voting securities, by voting trust agreement or otherwise, and (y) in the case of a partnership or limited liability company where any Affiliate of Licensee is designated as managing general partner or manager, as the case may be.”

3.7.2 The definition of Grill is modified to add, after the word "restaurant" in the first line thereof the following: “operating under the Marks and which is owned, operated or leased by Licensee or any Sublicensee or by any Affiliate of either and”.

3.7.3 The definition of Restaurant is modified to add, after the word “Sublicensee” in the second line thereof, the following: “or by any Affiliate of either”

3.8 Paragraph 18.d. is amended to provide that any arbitration proceeding provided for therein shall be held in Manhattan in the City of New York.

3.9 Paragraph 11 of the License Agreement is hereby deleted and replaced with the following:

“The parties acknowledge that it may be mutually advantageous to simultaneously advertise or promote the NY Restaurant along with the Restaurants and Grills and/or other restaurants that may be owned or operated by Licensee or its Affiliates. Licensee or its Affiliates may do so, but only after obtaining the prior written consent of Licensor, which Licensor may withhold in its sole and absolute discretion. Any request for a consent shall be accompanied by a copy of the advertisement or promotional material, the media in which it is to be used, the dates of such use, the cost thereof, and the portion of the cost which Licensee requests Licensor to bear. If Licensor shall fail to respond within ten (10) days to such request, the request shall be deemed not consented to. Notwithstanding the foregoing, if any such advertisement or promotion which is consented to by Licensor shall depict or refer to any Restaurant or Grill, whether or not the NY Restaurant is mentioned prominently, the entire cost of such promotion or advertisement shall be paid by Licensee.”

4. Ratification of License Agreement. Except as modified by this instrument, the License Agreement is ratified, confirmed and approved.

[Balance of Page Intentionally Left Blank]

If the above accurately reflects our understanding as to the subject matter thereof, please so indicate by signing the enclosed copy of this letter and retuning the same to the undersigned.

	Sincerely yours,
	The Smith & Wollensky Restaurant Group, Inc.
	By:_______________________________ Fortunato N. Valenti, President
The foregoing is agreed to:
St. James Associates, L.P. By: Chamblair Realty, Inc. General Partner
By:___________________ Thomas J. Malmud, President
By: Smith & Wollensky Operating Corp. General Partner
By:____________________ Alan N. Stillman, President
Patina Restaurant Group, LLC
By_______________________ Fortunato N. Valenti, Manager
[Add Signature Block for SWRG Parent]

EXHIBIT A—LIST OF RESTAURANTS OWNED AND MANAGED BY PATINA

NEW YORK CITY
Rockefeller Center
The Rink • The Rink Bar • Rock Center Café • The Sea Grill • Cucina & Co.
MetLife Building
Café Centro • Cucina & Co. • Cucina Express • Naples 45 • Tropica
The Metropolitan Opera House at Lincoln Center
The Grand Tier Restaurant
The Seagram Building
Brasserie
The Gordon Bunshaft Building
Brasserie 8 ½
Macy’s Herald Square
Macy’s Cellar Bar & Grill • Cucina & Co.
Madison Square Garden
Nick + Stef’s Steakhouse

GREATER METRO NEW YORK
Panevino Ristorante (Livingston, NJ)

DOWNTOWN LOS ANGELES
Cafe Pinot • Zucca Ristorante
Music Center of Los Angeles County
Patina • Concert Hall Café at Walt Disney Concert Hall
Kendall’s Brasserie and Bar • Pinot Grill • Spotlight Cafe
Wells Fargo Center
Nick & Stef’s Steakhouse • Market Cafe
Museum Of Contemporary Art
Patinette Cafe

GREATER LOS ANGELES
eat. on sunset • lounge. on sunset • Pinot Bistro
Los Angeles County Museum of Art
Pentimento • Plaza Cafe

ORANGE COUNTY
Park Privé, an exclusive event venue • Market Cafe • Pinot Provence
Orange County Performing Arts Center
Leatherby’s Cafe Rouge • Market Cafe
Bowers Museum
Tangata
Downtown Disney® District
Catal Restaurant & Uva Bar • Naples • Napolini • Tortilla Jo’s

LAS VEGAS
Pinot Brasserie at the Venetian

NORTHERN CALIFORNIA
Julia’s Kitchen at COPIA • American Market Café at COPIA

Other Museums and Performing Arts Centers
Cerritos Center for Performing Arts • Descanso Gardens • Hollywood Bowl
Norton Simon Museum • San Francisco War Memorial and Performing Arts Center

EX-4 5 smith-ex4_022707.htm Exhibit 4

The Smith & Wollensky Restaurant Group, Inc.
880 Third Avenue
New York, New York 10022

February 26, 2007

St. James Associates, L.P.
c/o Levi Company
85 Larchmont Avenue
Larchmont, New York 10538

Gentlemen:

This letter is written for the purpose of resolving a disagreement concerning the liability of The Smith & Wollensky Restaurant Group, Inc. (“SWRG”) pursuant to License Agreement to make Royalty Payments with respect to the Restaurant Sales and Non-Restaurant Sales made at the “Quality Meats” restaurant operated by SWRG since April 1, 2006. Accordingly, it is agreed as follows:

1. All terms, the initial letters of which are capitalized and not otherwise defined in this letter agreement shall have the meanings set forth in the License Agreement.

2. SWRG acknowledges that Quality Meats is a steakhouse and that Licensor is, in accordance with paragraph 5.b. of the License Agreement, owed an annual Percentage Royalty of one (1%) on all Restaurant Sales and Non-Restaurant Sales of Quality Meats beginning April 1, 2006.

3. Annexed hereto as Schedule 1 is a statement which SWRG warrants and represents shows, on a monthly basis, all Restaurant Sales and Non-Restaurant Sales made at the “Quality Meats” restaurant for the period April 1, 2006 through and including January 31, 2007, which total $6,554,562. Delivered herewith to Licensor is a check from SWRG payable to Licensor in the amount of $65,546, or one (1%) of all such Restaurant Sales and Non-Restaurant Sales. Licensor acknowledges receipt of said check, subject to collection. Commencing on the 15th day of March, 2007 and on the 15th day of each month thereafter, SWRG will continue to pay to Licensor a Percentage Royalty payment of one (1%) of all Restaurant Sales and Non-Restaurant Sales made at the “Quality Meats” restaurant for the prior month.

4. In the event that the entire business of SWRG is sold (the “Sale”), and, as part of that Sale the ownership of Quality Meats, on and after the closing of such Sale neither SWRG not any Affiliate of SWRG has any direct or indirect interest in the “Quality Meats” restaurant, Stillman may, by written notice to Licensor, elect to terminate this agreement effective on the last day of the month in which the Sale occurs; provided, however, such notice of election shall not be effective unless on the 15th day of the following month (a) all unpaid Percentage Royalty payments which are due with respect to Restaurant Sales and Non-Restaurant Sales made at the “Quality Meats” restaurant through and including the effective date of the notice of termination are paid to Licensor and (b) such payment is accompanied by supporting data establishing the Restaurant Sales and Non-Restaurant Sales for which such Percentage Royalty payment is being made.

5. SWRG warrants and represents to Licensee that the provisions of this agreement have been discussed with all members of the board of directors of SWRG.

6. This agreement shall be binding upon the parties and their respective heirs, successors and assigns. It may not be modified except by an instrument in writing signed by Licensor and Licensee. It may be signed in one or more counterparts, each of which shall be considered an original and the same instrument.

[Balance of Page Intentionally Left Blank]

If the above accurately reflects our understanding as to the subject matter thereof, please so indicate by signing the enclosed copy of this letter and returning the same to the undersigned.

	Sincerely yours,
	The Smith & Wollensky Restaurant Group, Inc.
	By:______________________ , President

The foregoing is agreed to:

St James Associates, L.P.

By: Chamblair Realty, Inc.,
General Partner

By:__________________________
Thomas J. Malmud, President

By: Smith & Wollensky Operating Corp.,
General Partner

By:__________________________
Alan N. Stillman, President

The undersigned, Alan N. Stillman, hereby agrees
that he will cause Quality Meats to make all
payments due hereunder which are not made by
SWRG, including, without limitation, any
payments payable after the Sale.

__________________________
Alan N. Stillman

Schedule 1
Restaurant Sales and Non-Restaurant Sales-Quality Meats

Apr-06
May-06
Jun-06
Jul-06
Aug-06
Sep-06
Oct-06
Nov-06
Dec-06
Jan-07

TOTAL

$
$
$
$
$
$
$
$
$
$

$

221,025
449,317
617,855
486,783
493,052
748,194
771,185
801,330
1,190,880
774,942

6,554,563

-----END PRIVACY-ENHANCED MESSAGE-----

[Signature Page Follows]

SCHEDULE 1—FORM OF AMENDMENT TO LICENSE AGREEMENT

[Balance of Page Intentionally Left Blank]

EXHIBIT A—LIST OF RESTAURANTS OWNED AND MANAGED BY PATINA

[Balance of Page Intentionally Left Blank]

Schedule 1 Restaurant Sales and Non-Restaurant Sales-Quality Meats

Schedule 1
Restaurant Sales and Non-Restaurant Sales-Quality Meats