Edgar Filing: CHEFS INTERNATIONAL INC

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. 2)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e) (2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to SS. 240.14a-12

Chefs International, Inc.
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
File No. 001-08513
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Exchange Act File No.

Payment of Filing Fee (Check the appropriate box):
[ ] No fee required.
[X] Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and 0-11.
1) Title of each class of securities to which transaction applies:
Common Stock, $.01 Par Value
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2) Aggregate number of securities to which transaction applies:
1,320,638 Shares
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
$3.12 Per Share*
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4) Proposed maximum aggregate value of transaction:

$4,120,040
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5) Total fee paid:
$484.93*
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[X] Fee paid previously with preliminary material.
[X] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
1) Amount Previously Paid:
$484.93
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2) Form, Schedule or Registration Statement No.:
Schedule 13E-3
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3) Filing Party:
Chefs International, Inc. et. al.
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4) Date Filed:
December 23, 2004
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* The fee was determined by multiplying the Transaction Valuation (the number of
shares of the Issuer's Common Stock held by existing stockholders whose shares
will be canceled in the merger transaction multiplied by the $3.12 per share
cash payment to be made in cancellation of each such share) by the applicable
filing fee calculation rate of $117.70 per $1,000,000 Transaction Valuation.

CHEFS INTERNATIONAL, INC.
62 BROADWAY
POINT PLEASANT BEACH, NJ 08742
(732-295-0350)

March 9, 2005

Dear Fellow Stockholder:

You are cordially invited to attend a Special Meeting of the
Stockholders of Chefs International, Inc. (the "Company") which will be held on
Monday April 18, 2005 at 9:00 a.m. local time at the Company's Jack Baker's
Wharfside Restaurant at 101 Channel Drive, Point Pleasant Beach, New Jersey
08742. At the Special Meeting, you will be asked to consider and vote on a
proposal to approve and adopt an Agreement and Plan of Merger dated December 22,
2004 (the "Merger Agreement") providing for the merger of Lombardi Restaurant
Group, Inc. and the Company with the Company being the surviving entity.

The proposed Transaction is designed to convert the Company from a
public corporation to a privately owned entity. If the Merger Agreement is
approved and adopted and the Merger is effected, you will no longer own any
stock or have any interest in the Company but you will be entitled to receive a
cash payment of $3.12 for each share of the Company's Common Stock that you own,
without interest and without deduction of any commission. Your shares will also
be subject to appraisal rights as described in the enclosed Proxy Statement if
you do not wish to accept the $3.12 per share cash purchase price.

We cannot complete the Merger unless all of the conditions to the
closing are satisfied, including the approval of the Merger Agreement and the
proposed Merger by holders of a majority of our outstanding Common Stock. We
cannot assure you that all of the closing conditions will be satisfied or, if
satisfied, when they will be satisfied.

Based on our reasons for the Merger described in the enclosed Proxy
Statement, our Board of Directors has determined that the Merger Agreement is
fair to you. ACCORDINGLY, OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR"
APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AND THE MERGER.

The enclosed Proxy Statement provides you with detailed information
about the Special Meeting, the proposed Merger, the Merger Agreement and related
matters. WE URGE YOU TO READ THIS ENTIRE DOCUMENT CAREFULLY, INCLUDING THE
ATTACHED MERGER AGREEMENT.

Your vote is extremely important. Approval of the Merger Agreement and
the proposed Merger requires the affirmative vote of the holders of a majority
of our outstanding Common Stock, so it is important that you vote your shares.

WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING IN PERSON,
PLEASE TAKE THE TIME TO VOTE BY SIGNING AND DATING THE ENCLOSED PROXY CARD AND
MAILING IT IN THE ACCOMPANYING REPLY ENVELOPE AS PROMPTLY AS POSSIBLE.

Please do not send your stock certificates at this time. If the Merger
is completed, you will be sent instructions regarding the surrender of your
stock certificates.

Very truly yours,

Robert M. Lombardi
Chairman and President

CHEFS INTERNATIONAL, INC.
62 BROADWAY
POINT PLEASANT BEACH, NJ 08742
(732-295-0350)

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Notice of Special Meeting of Stockholders

To Be Held on April 18, 2005

To the Stockholders of Chefs International, Inc.:

Notice is hereby given that a Special Meeting of Stockholders of Chefs
International, Inc., a Delaware corporation (the "Company") will be held on
Monday, April 18, 2005 at 9:00 a.m. local time at the Company's Jack Baker's
Wharfside Restaurant at 101 Channel Drive, Point Pleasant Beach, New Jersey
08742, for the following purposes:

1. To vote on a proposal to approve and adopt an
Agreement and Plan of Merger dated December 22, 2004
(the "Merger Agreement") between the Company and the
Lombardi Restaurant Group, Inc; and

2. To transact such other business as may properly come
before the Special Meeting.

We have fixed the close of business on Friday, February 25, 2005 as the
record date for the Special Meeting (the "Record Date"). Only holders of the
Company's Common Stock of record at the close of business on that date will be
entitled to notice of and to vote at the Special Meeting. At the close of
business on the Record Date, we had 3,926,105 shares of Common Stock issued and
outstanding and entitled to vote. In accordance with the General Corporation Law
of the State of Delaware, a list of stockholders entitled to vote at the Special
Meeting will be available for inspection at our principal executive offices at
62 Broadway, Point Pleasant Beach, New Jersey 08742 commencing ten days prior to
the Special Meeting.

This Notice and the attached Proxy Statement with its three appendices
are first being mailed to stockholders on or about March 10, 2005 together with
copies of the Company's Annual Report on Form 10-KSB for the year ended January
25, 2004 and its quarterly report on Form 10-QSB for the quarterly period ended
October 24, 2004 as filed with the Securities and Exchange Commission.

A copy of the Merger Agreement is attached to the enclosed Proxy
Statement as Appendix A. The affirmative vote of the holders of a majority of
the Company's Common Stock entitled to vote at the Special Meeting is necessary
to approve and adopt the Merger Agreement and the Merger.

As a stockholder of the Company, you have a right under Delaware law to
dissent from the Merger and to demand a judicial determination as to the fair
value of your

shares of Common Stock if the Merger is completed. In order to exercise this
appraisal right, you must deliver a written demand to the Company prior to the
Special Meeting for an appraisal of your shares, and you must not vote in favor
of the approval and adoption of the Merger Agreement and the Merger. Merely
voting against the Merger Agreement and the Merger, or abstaining from voting,
is not sufficient to perfect your appraisal right. A copy of the Delaware
General Corporation Law regarding your appraisal right is attached as Appendix C
to the accompanying Proxy Statement. See "Dissenters' Rights of Appraisal" at
page 60 of the Proxy Statement for a summary of these provisions.

THE PROPOSED MERGER TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS PASSED UPON THE FAIRNESS OR MERITS OF THIS TRANSACTION OR UPON
THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

OUR BOARD OF DIRECTORS AS WELL AS A SPECIAL COMMITTEE APPOINTED BY THE
BOARD HAS DETERMINED THAT THE TERMS OF THE MERGER AGREEMENT AND THE MERGER ARE
FAIR TO OUR STOCKHOLDERS AND RECOMMEND THAT STOCKHOLDERS VOTE "FOR" APPROVAL AND
ADOPTION OF THE MERGER AGREEMENT AND THE MERGER.

By Order of the Board of
Directors,

Michael F. Lombardi
Secretary

Point Pleasant Beach, NJ

March 9, 2005

IMPORTANT

YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN, DATE AND PROMPTLY
RETURN THE ACCOMPANYING PROXY CARD USING THE ENCLOSED POSTAGE-PREPAID ENVELOPE.

CHEFS INTERNATIONAL, INC.
62 BROADWAY
POINT PLEASANT BEACH, NJ 08742

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PROXY STATEMENT FOR
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 18, 2005

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TABLE OF CONTENTS

PAGE

SUMMARY TERM SHEET .................................................... 1

SUMMARY INFORMATION IN
QUESTION AND ANSWER FORMAT ................................... 5

SPECIAL FACTORS ....................................................... 13

Purpose ...................................................... 13
Background ................................................... 13
Events Leading to the Proposal for and
the Acceptance of the Merger Offer ................... 13
Reasons for and Recommendation of the Special Committee
and the Board of Directors ........................... 23
Opinion of Houlihan Lokey Howard & Zukin Financial
Advisors, Inc......................................... 29
Certain Effects of the Merger ................................ 36
Operation of the Company after the Merger ................... 40
Operation of the Company if the Merger is not Consummated ... 41
Interests of Certain Persons in the Merger ................... 41
Common Stock-Market Prices, Trading Volume,
Stock Repurchases, Dividends, Book Value ............. 46

INFORMATION ABOUT THE COMPANY ......................................... 49

INFORMATION ABOUT ACQUISITION CO. ..................................... 52

CAUTIONARY STATEMENT AND RISKS CONCERNING
FORWARD-LOOKING STATEMENTS ................................... 53

INFORMATION ABOUT THE SPECIAL MEETING ................................. 54

Date, Time and Place of the Special Meeting .................. 54
Purpose of the Special Meeting ............................... 54
Record Date; Shares Entitled to Vote; Quorum ................. 54
Vote Required ................................................ 54
Voting of Proxies ............................................ 55
Proxy Solicitation ........................................... 55

THE MERGER AGREEMENT AND THE MERGER ................................... 56

The Merger Agreement ......................................... 56
Structure of the Merger ...................................... 58
Effective Time of the Merger ................................. 59
Exchange Procedures........................................... 59
Federal Income Tax Consequences .............................. 60
Accounting Treatment ......................................... 61
Regulatory Requirements....................................... 62
Expenses of the Merger ....................................... 62
Sources of Funding ........................................... 62

DISSENTERS' RIGHTS OF APPRAISAL ....................................... 63

WHERE YOU CAN FIND MORE INFORMATION ................................... 66

INFORMATION INCORPORATED BY REFERENCE ........................ 67

APPENDIX A ..... AGREEMENT AND PLAN OF MERGER DATED DECEMBER 22, 2004

APPENDIX B ..... OPINION OF HOULIHAN LOKEY HOWARD & ZUKIN FINANCIAL
ADVISORS, INC. DATED DECEMBER 16, 2004

APPENDIX C .... SECTION 262 OF THE DELAWARE GENERAL CORPORATION
LAW CONCERNING DISSENTERS' APPRAISAL RIGHTS

CHEFS INTERNATIONAL, INC.

SPECIAL MEETING OF STOCKHOLDERS
APRIL 18, 2005

PROXY STATEMENT

SUMMARY TERM SHEET

This summary term sheet briefly describes the most material terms of
the proposed transaction that is the subject of this Proxy Statement. Because it
is a summary, it does not contain all of the information that may be important
to you. You should read this entire Proxy Statement and its appendices before
you decide how to vote.

THE PARTIES

o Chefs International, Inc. (the "Company") is a publicly owned Delaware
corporation currently operating nine restaurants. Seven of the
restaurants are seafood restaurants (four in New Jersey and three in
Florida). The other two restaurants are each located in New Jersey.
One is a Mexican theme restaurant and the other features an eclectic
American food menu. The Company's principal office is located at 62
Broadway, Point Pleasant Beach, New Jersey 08742 where its telephone
number is (732) 295-0350. See "Information about the Company" at page
50.

o Lombardi Restaurant Group, Inc. (Acquisition Co.) is a privately owned
Delaware corporation formed for the sole purpose of effecting the
Merger. The stockholders of Acquisition Co. are Anthony M. Lombardi,
Joseph S. Lombardi, Michael F. Lombardi, Robert M. Lombardi and
Stephen F. Lombardi, (the "Lombardi Brothers"), LOMBARDI & LOMBARDI,
P.A., WHICH IS a law firm in which two of the Lombardi Brothers are
principals, LOMBARDI & LOMBARDI, P.A. DEFINED BENEFIT PENSION PLAN,
and Lee Maschler and Matthew H. Maschler (the "Maschler Brothers") who
are unrelated to the Lombardi Brothers. See "Information about
Acquisition Co." at page 53.

o The Lombardi Brothers hold five of the eight seats on the Company's
Board of Directors. One of the Lombardi Brothers, Robert M. Lombardi,
serves as the Company's Chairman and President. The Lombardi Brothers,
LOMBARDI & LOMBARDI, P.A., AND THE LOMBARDI & LOMBARDI, P.A. DEFINED
BENEFIT PENSION PLAN own approximately 61% and the Maschler Brothers
own approximately 5% of the Company's outstanding common stock, $.01
par value (the "Common Stock"). See "Special Factors - Interests of
Certain Persons in the Merger" at page 42.

THE MERGER TRANSACTION

o Acquisition Co. is proposing to merge with and into the Company
pursuant to an Agreement and Plan of Merger dated as of December 22,
2004 (the "Merger Agreement"), with the Company being the surviving
entity. See "The Merger Agreement and the Merger" at page 57.

o The proposed Merger is a "going private" transaction. If the proposed
Merger is approved and adopted and Acquisition Co. is merged into the
Company;

- The Company will no longer be a public company;

- The Common Stock will no longer trade in the
over-the-counter market or be quoted on the OTC Bulletin
Board(R);

- The stockholders of Acquisition Co. (the "Continuing
Stockholders") will own all of the Company's outstanding
Common Stock;

- As a "Public Stockholder" of the Company, which term
excludes the Continuing Stockholders, and stockholders who
properly exercise dissenters' rights of appraisal, your
stock will be canceled and converted into the right to
receive a cash payment of $3.12 per share, without interest,
and without deduction of any commission, for each share of
Common Stock that you own at the Effective Time of the
Merger; and

- As a Public Stockholder, you will no longer have any
interest in the Company's assets or its future earnings or
growth, if any.

REASONS FOR THE PROPOSED MERGER

o The Lombardi Brothers, who initiated the privatization proposal and
who are providing the bulk of the funding for the $3.12 per share
"buy-out" of the Public Stockholders, have concluded that based on the
Company's relatively small size, the fact that substantial stock
repurchases made by the Company had not had a positive effect on the
market price for the Common Stock, the illiquidity of the trading
market for the Common Stock, the Company's lack of growth and the
costs inherent in remaining a public company; it would be in all of
the stockholders' interests to "take the Company private" at a fair
price. The Lombardi Brothers decided to pursue the privatization
transaction through a Merger because they were unwilling to finance a
multi-million dollar payment to the Public Stockholders unless they
owned 100% of the Company at the conclusion of the transaction. See
"Special Factors - Events Leading to the Proposal for and Acceptance
of the Merger Offer" at page 14.

RECOMMENDATION OF THE BOARD OF DIRECTORS

o The Board of Directors of the Company, after careful consideration,
and based upon the recommendation of a Special Committee composed of
the three directors who are not Lombardi Brothers or their affiliates,
has approved the Merger Agreement and the Merger and recommends that
the Company's stockholders

vote FOR its adoption. See "Special Factors - Interests of Certain
Persons in the Merger - Actual or Potential Conflicts of Interest" at
page 42.

o The Special Committee and the Board of Directors are each of the
opinion that the proposed Merger is fair, both substantively and
procedurally, to the Public Stockholders. The Special Committee has
received an opinion from the investment banking firm of Houlihan Lokey
Howard & Zukin Financial Advisors, Inc. ("Houlihan Lokey") that as of
December 16, 2004, based upon certain assumptions, considerations and
limitations, the $3.12 per share consideration to be received by the
Public Stockholders in the event of the Merger is fair to them from a
financial point of view. See "Special Factors - Reasons For and
Recommendation of the Special Committee and the Board of Directors" at
page 23, and "Special Factors - Opinion of Houlihan Lokey Howard &
Zukin Financial Advisors, Inc." at page 29.

CONDITIONS TO THE MERGER

o The Merger Agreement is subject to adoption by the Company's
stockholders at the Special Meeting, as well as to the satisfaction or
waiver of other conditions including the condition that the opinion of
Houlihan Lokey shall not have been withdrawn; that neither the Special
Committee nor the Board of Directors shall have withdrawn, modified or
changed its favorable recommendation regarding the Merger Agreement or
the Merger, and that stockholders shall not have exercised dissenters'
rights of appraisal pursuant to Delaware law with respect to more than
10% (392,610 shares) of the outstanding Common Stock. See "The Merger
Agreement and the Merger" at page 57.

STOCKHOLDER VOTE

o The Special Meeting of Stockholders called to vote on the proposal to
approve and adopt the Merger Agreement and the Merger will be held ON
MONDAY, APRIL 18, 2005 AT 9:00 A.M. local time at the Company's Jack
Baker's Wharfside Restaurant at 101 Channel Drive, Point Pleasant
Beach, New Jersey 08742.

o In order to be approved, the Merger Agreement and the Merger must be
adopted by the affirmative vote of a majority of the shares of Common
Stock outstanding at the close of business on February 25, 2005 (the
"Record Date"). On the Record Date, there was an aggregate 3,926,105
shares of Common Stock issued and outstanding so that the affirmative
vote of an aggregate 1,963,053 shares is required to approve and adopt
the Merger Agreement and the Merger. The Continuing Stockholders who
beneficially own an aggregate 2,605,467 shares (approximately 66% of
the outstanding Common Stock), currently intend to vote in favor of
the Merger Agreement and the Merger as do two members of the Special
Committee who beneficially own an aggregate 102,000 shares
(approximately 3%) of the outstanding Common Stock. As a result, the
Continuing Stockholders possess sufficient votes to approve and adopt
the Merger

Agreement and the Merger even if a majority of the shares owned by the
Public Stockholders are voted or deemed to be voted against the
proposal. See "INFORMATION ABOUT THE Special Meeting" at page 54 and
"The Merger Agreement and the Merger" at page 57.

o Proxy cards that are properly executed and returned to the Company's
transfer agent on a timely basis will be voted at the Special Meeting
in accordance with any instruction on the proxy card. If no
instruction is provided, the signed proxy card will be voted FOR
approval and adoption of the Merger Agreement and the Merger. Shares
for which no proxy card is submitted or which are not otherwise voted
will be deemed to be voted against approval and adoption of the Merger
Agreement and the Merger.

o A stockholder may revoke his or her proxy by a writing to that effect
delivered or mailed to the corporate secretary of the Company at the
Company's executive office and received prior to the Special Meeting
or by delivery of a duly executed proxy bearing a later date, to the
corporate secretary, and received prior to the Special Meeting.

o In addition, a stockholder may revoke his or her proxy by attending
the Special Meeting and giving oral notice of his or her intention to
vote at the Special Meeting. See "Information About the Special
Meeting" at page 54.

APPRAISAL RIGHTS

o Stockholders who do not vote in favor of the Merger Agreement and the
Merger will be entitled to seek an appraisal of the fair value of
their shares under Delaware law. In order to perfect the right to an
appraisal, a stockholder must comply with the applicable requirements
of Delaware law. See "Dissenters' Rights of Appraisal" at page 64.

FEDERAL INCOME TAX CONSEQUENCES

o Generally, the Merger will be a taxable transaction for federal
(United States) income tax purposes for the Public Stockholders. It
will not be a taxable transaction for federal income tax purposes to
the Company, Acquisition Co. or the Continuing Stockholders. See "The
Merger and the Merger Agreement - Federal Income Tax Consequences" at
page 61.

ACCOUNTING TREATMENT

o For U. S. accounting purposes, the Merger will be accounted for under
the Treasury Stock Method and all of the acquired shares will be
retired. There will be no other effect on the Company's financial
statements except to reflect the issuance of replacement shares of
Common Stock to the Continuing Stockholders.

See "The Merger and the Merger Agreement - Accounting Treatment" at
page 62.

INTERESTS OF THE CONTINUING STOCKHOLDERS

o The five Lombardi Brothers hold five of the eight seats on the
Company's Board of Directors and collectively with their related
entities own approximately 61% of the outstanding Common Stock. Robert
M. Lombardi also serves as the Company's Chairman and President. The
Company leases two of its restaurants and a contiguous parking area
from an affiliate of the Lombardi Brothers. The two Maschler Brothers
own approximately 5% of the outstanding Common Stock. Assuming
completion of the Merger, the Lombardi Brothers and their affiliates
will own approximately 92.4% and the Maschler Brothers will own
approximately 7.6% of the outstanding Common Stock. See "Special
Factors - Interests of Certain Persons in the Merger" at page 42.

SUMMARY INFORMATION IN QUESTION AND ANSWER FORMAT

The following information in question and answer format, summarizes
many of the material terms of the Company's proposed Merger with Acquisition Co.
This summary may not contain all of the information that you believe is
important for you to consider before voting on the proposed Merger. For a
complete description of the terms and conditions of the Merger, you are advised
to carefully read this entire Proxy Statement and the other documents referred
to herein. The actual terms and conditions of the Merger are contained in the
Merger Agreement. The Merger Agreement is included as Appendix A to this Proxy
Statement.

WHAT IS THE PURPOSE OF THE SPECIAL MEETING?

At the Special Meeting, the Company's stockholders will vote on the
proposed Merger of the Company with Acquisition Co. pursuant to the terms of the
Merger Agreement.

WHAT VOTE IS REQUIRED TO APPROVE THE MERGER?

Approval of the Merger will require the affirmative vote of the holders
of not less than a majority of the Company's outstanding Common Stock as of the
Record Date for the Meeting.

WHAT CONSTITUTES A MAJORITY OF THE COMPANY'S OUTSTANDING COMMON STOCK?

On the Record Date, the Company had 3,926,105 shares of Common Stock
issued and outstanding. Even if 1,963,053 shares of Common Stock (representing a
majority of the outstanding Common Stock) vote in favor of the Merger, the
Merger will not take place unless the other terms and conditions to the Merger
described in this Proxy Statement and the Merger Agreement are fulfilled.

WHO ARE THE OWNERS OF ACQUISITION CO?

Acquisition Co. was formed in November 2003 as a Delaware corporation
to merge with and into the Company. Acquisition Co. was formed by Michael F.
Lombardi and his four brothers, Robert M. Lombardi, Joseph S. Lombardi, Anthony
M. Lombardi and Stephen F. Lombardi, the law firm of Lombardi & Lombardi, P.A.
and the Lombardi & Lombardi, P.A. Defined Benefit Pension Plan (collectively,
the "Lombardi Group"). Each of the five Lombardi Brothers is a director of the
Company and Robert M. Lombardi also serves as the Company's Chairman and
President. The Lombardi Group together with the two Maschler Brothers who are
unrelated to the Lombardi Group, but who are also stockholders of the Company,
namely Lee Maschler and Matthew H. Maschler (the "Maschler Group") are the sole
owners of the outstanding shares of capital stock of Acquisition Co. and are
collectively the Continuing Stockholders.

WHAT PERCENTAGES OF THE COMMON STOCK ARE OWNED BY THE CONTINUING STOCKHOLDERS?

The members of the Lombardi Group are the collective beneficial owners
(through Acquisition Co.) of approximately 61% and the members of the Maschler
Group are the collective beneficial owners (through Acquisition Co.) of
approximately 5% of the outstanding Common Stock so that the Continuing
Stockholders collectively own approximately 66% of the outstanding Common Stock.
The Continuing Stockholders collectively have sufficient votes to approve the
Merger regardless of the vote of the Public Stockholders.

DO THE CONTINUING STOCKHOLDERS CURRENTLY INTEND TO VOTE AT THE MEETING TO
APPROVE THE MERGER?

Yes. The Continuing Stockholders (as well as the two members of the
Special Committee who are stockholders but not Continuing Stockholders)
currently intend to vote at the Meeting to approve the Merger.

IS APPROVAL OF A MAJORITY OF THE SHARES OF COMMON STOCK OWNED BY THE PUBLIC
STOCKHOLDERS REQUIRED TO APPROVE THE MERGER?

No. The affirmative vote of a majority of the issued and outstanding
shares of Common Stock is a sufficient vote to approve the Merger even if a
majority of the shares of Common Stock owned by the Public Stockholders are not
voted in favor of the Merger.

SINCE THE CONTINUING STOCKHOLDERS HAVE SUFFICIENT VOTES TO APPROVE THE MERGER,
WHY IS THE MEETING BEING HELD?

Management has determined that holding the Meeting is in the best
interests of all of the Company's stockholders as it will promote a full
discussion of the arguments for and against the Merger and the conversion of the
Company into a privately owned entity. Management believes that the discussion
at the Meeting may help to clear up any

questions or misunderstandings that stockholders may have concerning the reasons
for or the mechanics of the proposed Merger transaction.

WHAT ARE THE BASIC TERMS OF THE MERGER AGREEMENT?

The Merger Agreement provides that, subject to stockholder approval and
the satisfaction or waiver of certain other conditions contained in the Merger
Agreement, Acquisition Co. will merge with and into the Company at the Effective
Time of the Merger. The Company will be the surviving corporation and is
expected to continue to operate its existing restaurants under their current
names.

If the Merger is approved and consummated, each share of Common Stock
owned at the Effective Time of the Merger by the "Public Stockholders", namely
the stockholders of the Company other than the Continuing Stockholders and those
stockholders who properly exercise dissenters' rights, will be canceled and
converted into the right to receive a cash payment of $3.12, without interest,
and without deduction of any commission. As a result, upon consummation of the
Merger, the Continuing Stockholders (the Lombardi Group and the Maschler Group)
will own all of the Company's outstanding Common Stock and the Public
Stockholders will have no equity interest in the Company.

WHY IS THE MERGER BEING PROPOSED?

The Merger is being proposed in order to convert the Company from a
publicly owned corporation, with the attendant costs of a publicly owned entity,
to a private company. If the Merger is consummated, the Continuing Stockholders
will own all of the Company's outstanding Common Stock and the Public
Stockholders will be afforded the opportunity to receive a cash payment for
their shares of Common Stock that represents a substantial premium (115%) over
the market price at which the shares were trading prior to the initial
announcement of the proposed Merger. The Lombardi Brothers decided to pursue the
privatization transaction through a Merger because they were unwilling to
finance a multi-million dollar payment to the Public Stockholders unless they
owned 100% of the Company at the conclusion of the transaction.

WHAT WILL HAPPEN TO THE COMPANY AFTER THE MERGER?

Assuming consummation of the Merger, the Company, as the surviving
corporation, is expected to continue to operate its existing restaurants under
their current names, and will no longer be a publicly owned corporation.

WHY IS THE COMPANY'S BOARD OF DIRECTORS RECOMMENDING THAT STOCKHOLDERS VOTE TO
APPROVE THE MERGER AND THE MERGER AGREEMENT?

For the past several years, the Board of Directors has attempted to
enhance the Company's value for its stockholders through the opening of
additional restaurants and the repurchase by the Company of outstanding shares
of its Common Stock. The Board

has determined that these methods have not enhanced value to a satisfactory
degree and have concluded that a "going private" transaction was the best method
to enhance value. By converting to a private company, the Company will reduce
its operating expenses as it will no longer need to incur the professional fees
and stock transfer fees required of a public company. The Board of Directors
believes that the proposed "going private" transaction represents the best
opportunity at the present time for the Public Stockholders to maximize the
value for their shares of Common Stock. For these and other reasons described in
this Proxy Statement, the Board of Directors, after taking into account the
recommendation of the Special Committee appointed by the Board to review and
evaluate the Merger proposal, recommends that stockholders vote for the Merger
because it believes the Merger terms are in the best interests of the Company
and the Public Stockholders.

WHAT STEPS HAS THE BOARD OF DIRECTORS TAKEN TO ASSURE THAT THE MERGER TERMS ARE
FAIR TO THE PUBLIC STOCKHOLDERS?

The Lombardi Brothers, who hold five of the eight seats on the Board of
Directors, will be Continuing Stockholders. In an attempt to avoid actual or
potential conflicts of interest, the Board of Directors appointed a Special
Committee to review and make a recommendation to the Board of Directors
regarding the fairness of the proposed transaction to the Public Stockholders.
The Special Committee is comprised of Kenneth Cubelli M.D. as chairman, Nicholas
B. Boxter C.P.A. and Raymond L. Dademo, Esq. who hold the remaining three seats
on the Board of Directors.

ARE THERE RELATIONSHIPS BETWEEN THE LOMBARDI BROTHERS AND THE MEMBERS OF THE
SPECIAL COMMITTEE, OUTSIDE THE COMPANY?

Kenneth Cubelli's wife and Joseph S. Lombardi's wife are sisters. The
Lombardi Brothers' mother, who passed away in 2003, was the sister of Raymond L.
Dademo's mother. Dr. Cubelli owns 100,000 shares and Mr. Dademo owns 2,000
shares of the Company's Common Stock. If the Merger is consummated, neither of
them will be Continuing Stockholders as they will each exchange their stock for
the right to receive a cash payment of $3.12 per share. Nicholas B. Boxter has
no family relationship with the Lombardi Brothers and does not own shares of
Common Stock. However, he does render accounting services to the Lombardi
Brothers and their affiliated entities.

WHAT ACTIONS HAVE BEEN TAKEN BY THE SPECIAL COMMITTEE?

The original proposal made by the Lombardi Group through Acquisition
Co. and announced by the Company on November 21, 2003, proposed a purchase price
of $1.75 per share for the shares of Common Stock owned by the Public
Stockholders. The Special Committee retained its own legal counsel to advise it
with respect to its obligations and duties and on January 30, 2004, the Company
announced that the Special Committee had retained the investment banking firm of
Houlihan Lokey to render an opinion to the Special Committee as to the fairness
from a financial point of view, of the consideration offered by the Lombardi
Group to the Public Stockholders. On March 8,

2004, the Company announced that the Special Committee had voted unanimously to
recommend the rejection of the offered purchase price of $1.75 per share as
being inadequate. On March 15, 2004, the Company announced that the Lombardi
Group had increased the offered purchase price to $2.50 per share. On April 19,
2004, the Company announced that the Special Committee had voted to recommend
the rejection of the increased offered purchase price of $2.50 per share as
inadequate. On April 21, 2004, the Company announced that the offered purchase
price had been increased to $3.00 per share. The Special Committee continued to
find the price inadequate. On June 1, 2004, the Company announced that the
Lombardi Group had once again increased the offered purchase price to the Public
Stockholders to $3.12 per share and that the Special Committee had determined
that in its judgment, the proposed increased purchase price of $3.12 per share
was fair to the Public Stockholders. As a result, the Special Committee
recommended to the Board of Directors that the Board accept the proposal of a
purchase price of $3.12 per share for the shares of the Public Stockholders. The
Board of Directors has accepted the recommendation of the Special Committee.

The recommendation of the Special Committee was based upon its own
deliberations; its consultations with its independent counsel with respect to
its legal responsibilities; with its financial advisor, Houlihan Lokey, with
respect to the fairness, from a financial point of view, of the consideration
per share to be received by the Public Stockholders in the Merger; and on the
written opinion of Houlihan Lokey. The Special Committee requested that Houlihan
Lokey render an opinion as to the fairness from a financial point of view, to
the Public Stockholders, of the consideration per share to be received by the
Public Stockholders in the Merger.

WHAT OPINION HAS BEEN DELIVERED BY HOULIHAN LOKEY?

On December 16, 2004, Houlihan Lokey delivered its written opinion to
the Special Committee that, based upon the information provided to it by the
Company and the valuation analysis it performed (see "Special Factors - Opinion
of Houlihan Lokey Howard & Zukin Financial Advisors, Inc." herein), the $3.12
per share consideration to be received by the Public Stockholders for their
shares of Common Stock in the Merger is fair to them from a financial point of
view. Houlihan Lokey's written opinion is included as Appendix B to this Proxy
Statement.

WHAT FACTORS WERE CONSIDERED BY THE SPECIAL COMMITTEE AND THE BOARD OF DIRECTORS
IN RECOMMENDING THE $3.12 PER SHARE PURCHASE PRICE FOR THE COMMON STOCK OWNED BY
THE PUBLIC STOCKHOLDERS?

The Special Committee and the Board of Directors considered a number of
factors before recommending the $3.12 per share purchase price for the Common
Stock owned by the Public Stockholders, including but not limited to, the
following:

o the nature of the restaurant business in the areas where the Company's
restaurants are located

o the Company's financial condition and operating results

o the relative lack of growth in the Company's revenues over the past
four years

o the Company's limited ability to expand the number of its seafood
restaurant units due to the difficulties in acquiring additional
waterfront sites at reasonable cost

o the required future capital investment in order to maintain certain
restaurants

o the departure (at the end of June 2004) of the Company's long-time
chief executive and chief financial officer, Anthony C. Papalia

o the costs to continue to operate as a publicly owned entity

o the relatively low market prices for the Common Stock in the
over-the-counter market over the past three years

o the decline in market conditions for low-priced stocks

o the lack of positive impact on the market price for the Common Stock
following the Company's various stock repurchases

o the lack of liquidity in the market for the Common Stock as reflected
by the low average trading volume in the stock in the over-the-counter
market over the past three years

o the terms and conditions of the proposed Merger

o the belief that after several increases in the offered purchase price,
the $3.12 per share offered purchase price was the highest price that
the Lombardi Group was willing to offer

o the fact that the offered price of $3.12 per share represents a
premium of approximately 115% over the $1.45 per share last sale price
for the Common Stock in the over-the-counter market on November 17,
2003, the last trading day on which a last sale price was available
immediately preceding the date on which the original $1.75 per share
purchase proposal was publicly announced

o the presentation and the written opinion of Houlihan Lokey delivered
to the Special Committee on December 16, 2004.

o the requirements of the Delaware General Corporation Law (the
"Delaware Law") that the affirmative vote of at least a majority of
the shares of Common Stock present in person or by proxy at the
Special Meeting is required for approval and adoption of the Merger
and the Merger Agreement, and that stockholders who properly assert
dissenters' rights in accordance with Section 262 of the Delaware Law
are entitled to demand and be paid the fair value for their shares of
Common Stock as determined pursuant to an appraisal by the Delaware
Court of Chancery.

HOW IS THE MERGER BEING FINANCED?

Acquisition Co. estimates that the total amount of funds required to
purchase all of the shares of Common Stock owned by the Public Stockholders will
be approximately $4,120,000 and that it will incur approximately $180,000 in
related fees and expenses. The Lombardi Group and the Maschler Group will pay
these amounts with personal funds and through anticipated bank borrowings. See
"The Merger Agreement and the Merger - Expenses of the Merger and Sources of
Funding."

WHAT RIGHTS DO STOCKHOLDERS HAVE TO DISSENT FROM THE MERGER?

Any stockholder who owns shares of Common Stock as of the February 25,
2005 record date, and who does not wish to accept the $3.12 per share cash
payment for his or her shares pursuant to the Merger, has the right under the
Delaware General Corporation Law to receive the "fair value" of his or her
shares of Common Stock as determined by a Delaware court. This "appraisal right"
is subject to a number of restrictions and technical requirements and therefore,
perfecting your appraisal rights can be complicated and costly. Generally, in
order to properly exercise appraisal rights, a dissenting stockholder must not
vote in favor of approving and adopting the Merger Agreement and the Merger, and
must make a written demand for an appraisal before the vote to approve and adopt
the Merger Agreement and the Merger occurs. Merely voting against the Merger
Agreement and the Merger will not perfect your right of appraisal. Furthermore,
no provision has been made to grant any Public Stockholder access to the
corporate files of the Company or to the files of any Continuing Stockholder or
to obtain counsel for or appraisal services for any Public Stockholder at the
expense of the Company or any Continuing Stockholder. See "Dissenters' Rights of
Appraisal" at page 64 herein and Appendix C to this Proxy Statement as to the
applicable provisions of the Delaware General Corporation Law relating to
appraisal rights.

VOTING AGAINST THE MERGER AND THE MERGER AGREEMENT WILL NOT PROTECT
YOUR RIGHT TO DISSENT IN THE ABSENCE OF YOUR DELIVERING A SEPARATE WRITTEN
APPRAISAL DEMAND ON A TIMELY BASIS. APPENDIX C TO THIS PROXY STATEMENT CONTAINS
SECTION 262 OF THE DELAWARE LAW REGARDING DISSENTERS' RIGHTS. STOCKHOLDERS WHO
INTEND TO DISSENT SHOULD CAREFULLY REVIEW THIS PROXY STATEMENT AND APPENDIX C
AND ARE URGED TO CONSULT WITH THEIR OWN LEGAL ADVISORS.

WHAT ARE THE CONDITIONS TO THE MERGER?

The following list includes what the Board of Directors and the
Continuing Stockholders believe are the material conditions to the Merger, all
of which must be satisfied at the time of the Merger. In view of the fact that
interpretations of "materiality" can be subjective, the list is qualified by
reference to the Merger Agreement which is attached as Appendix A to this Proxy
Statement. You are urged to carefully read this entire document including the
Merger Agreement.

o stockholders owning at least a majority of the outstanding shares of
Common Stock must approve and adopt the Merger Agreement and the
Merger.

o there are no legal restraints rendering the Merger unlawful or
preventing the consummation of the transactions contemplated
thereunder and no pending litigation that could have a material
adverse effect on the Company.

o neither the Special Committee nor the Board of Directors shall have
withdrawn, modified or otherwise changed its recommendation concerning
the terms of the Merger.

o the Houlihan Lokey fairness opinion issued to the Special Committee
and attached hereto as Appendix B shall not have been withdrawn or
revoked.

o all authorizations, consents and waivers required for the consummation
of the Merger shall have been obtained.

o the respective representations and warranties made in the Merger
Agreement by each of the parties to the Merger Agreement shall be true
and correct.

o stockholders shall not have exercised appraisal rights under the
Delaware Law with respect to more than 10% of the outstanding shares
of Common Stock (392,610 shares).

SHOULD YOU SEND IN YOUR STOCK CERTIFICATES NOW?

No. If the Merger is consummated, you will be sent written instructions
on how to forward your certificates for payment.

IF YOUR SHARES OF COMMON STOCK ARE HELD IN "STREET NAME" BY A BROKER, WILL THE
BROKER BE ABLE TO VOTE YOUR SHARES?

Your broker will vote your shares only if you provide instructions on
how to vote. Your broker should provide you with directions on how to instruct
your broker to vote your shares.

CAN YOU CHANGE YOUR VOTE AFTER YOU MAIL IN YOUR SIGNED PROXY CARD?

Yes. You can send in a signed proxy card dated at a later date or a
written revocation of your proxy prior to the Special Meeting or attend the
Special Meeting and vote in person. Any notice to revoke your proxy or any
subsequent proxy card should be delivered or mailed to Chefs International Inc.,
62 Broadway, Point Pleasant Beach, NJ 08742; Attention: Corporate Secretary and
must be received prior to the Special Meeting.

WHEN WILL YOU RECEIVE PAYMENT FOR YOUR SHARES?

If the Merger Agreement is approved and adopted and the other
conditions to the Merger are satisfied, the Company intends to consummate the
Merger shortly thereafter. As soon as practicable after consummation of the
Merger, the Company's Payment Agent will send a letter to stockholders
instructing them on how to exchange certificates for their shares of Common
Stock for the $3.12 per share cash payment. Payment will be made promptly upon
compliance with the exchange procedures. See "The Merger Agreement and the
Merger - Exchange Procedures."

WHAT ARE THE INCOME TAX CONSEQUENCES OF THE MERGER?

Receipt of the $3.12 per share cash payment upon completion of the
Merger may be a taxable event for federal income tax purposes, depending on the
recipient's cost basis for the shares exchanged. A review of the tax
consequences to stockholders appears commencing on page 61 of this Proxy
Statement. Each stockholder is urged to consult

with his or her tax advisor concerning the tax consequences of the Merger to him
or to her.

SPECIAL FACTORS

PURPOSE

The purpose of the Merger is to convert the Company into a non-public
corporation owned by the Continuing Stockholders. At the same time, the Public
Stockholders are being given the opportunity to receive a cash payment of $3.12
per share owned which represents a substantial premium over the $1.45 last sale
price per share at which the Company's Common Stock was trading in the
over-the-counter market prior to the announcement of the Merger proposal. The
privatization is being attempted to be accomplished in the form of a Merger
because the Lombardi Brothers, who initiated the privatization proposal and who
are providing the bulk of the funds for the $3.12 per share "buy-out" of the
Public Stockholders are unwilling to finance a multi-million dollar payment to
the Public Stockholders unless they own 100% of the Company at the conclusion of
the transaction. See "Events Leading to the Proposal for and the Acceptance of
the Merger Offer."

BACKGROUND

PURCHASE OF CONTROL BY THE LOMBARDI GROUP - On May 20, 1999, the five
Lombardi Brothers purchased an aggregate 1,722,445 shares of the Company's
Common Stock for an aggregate $4,306,113 or $2.50 per share from the Chapter 11
Trustee for the bankruptcy estate of the Company's former principal stockholder.
On May 25, 1999, the Company received notice that the Lombardi Group owned in
excess of 50% of the Company's issued and outstanding Common Stock and as a
result, owned voting control of the Company. On that date, Robert M. Lombardi
was elected as a director of the Company and chairman of the board at the
request of the Lombardi Group.

On July 7, 1999, the four remaining Company directors resigned as
directors and four Lombardi Group nominees, namely Anthony M. Lombardi, Joseph
S. Lombardi, Michael F. Lombardi and Stephen F. Lombardi were elected as
directors in their place. In December 1999, Nicholas Boxter, Kenneth Cubelli and
Raymond L. Dademo were elected as directors bringing the number of the Company's
directors to a total of eight. In June 2004, Robert M. Lombardi was elected as
President and Chief Executive Officer of the Company to succeed Anthony C.
Papalia who resigned from those positions effective June 28, 2004.

EVENTS LEADING TO THE PROPOSAL FOR AND THE ACCEPTANCE OF THE MERGER OFFER

In the late summer of 2003, Robert M. Lombardi and his brother Michael
F. Lombardi, Chairman of the Board and Secretary, respectively of the Company,
engaged in a series of informal discussions with their brothers, Anthony M.
Lombardi, Joseph S. Lombardi and Stephen F. Lombardi concerning whether it made
sense for the Company

to remain a public company. These informal discussions took place over a period
of several weeks. Anthony M. Lombardi, Michael F. Lombardi and Stephen F.
Lombardi all work in the same building and see each other several times each day
during the work week. Joseph S. Lombardi and Robert M. Lombardi both work in the
same medical practice in another building a few miles away and usually see each
other several times each day during the work week. Four of the five Lombardi
Brothers live in Edison Township, New Jersey. The Lombardi Brothers also
frequently see each other on weekends to discuss personal matters and business
matters. They have other business interests in addition to their interests in
the Company.

As a result of these discussions, the Lombardi Brothers concluded that
based on the Company's relatively small size, the fact that substantial stock
repurchases made by the Company had not had a significant positive effect on the
market price for the Common Stock, the illiquidity of the trading market for the
Common Stock, the Company's lack of growth and the costs inherent in remaining a
public company, it would be in all of the stockholders' interests to "take the
Company private" at a fair price. At the time, the five Lombardi Brothers
comprised five of the Company's eight directors and the Lombardi Group were the
beneficial owners of in excess of 60% of the Common Stock.

At the end of the summer of 2003, the Lombardi Brothers decided to move
forward to privatize the Company and a meeting was held in late September 2003
at the request of Robert M. Lombardi and Michael F. Lombardi with the Company's
outside counsel and proposed counsel for the Lombardi Group. At the meeting, two
forms of privatization transactions were discussed, a Merger and a tender offer.
Robert M. Lombardi and Michael F. Lombardi concluded that because the Lombardi
Group owned a sufficient number of shares of the Company's Common Stock to
authorize a Merger, certain steps should be taken to insure that the
privatization procedure would be fair to the Public Stockholders. As a result,
the Lombardi Group retained counsel separate from outside counsel for the
Company and determined that the price to be paid to the Public Stockholders for
their shares in the privatization transaction would not be less than a price
found to be fair by a reputable investment banking firm.

After the late September meeting, the Lombardi Brothers had a number of
further discussions among themselves and determined to pursue the privatization
process through a Merger. A tender offer was rejected because of the large
number of record holders of the Common Stock (more than 6,000 at fiscal 2003
year-end). In the opinion of the Lombardi Brothers, the relatively large number
of stockholders combined with the fact that the Company completed its initial
public offering almost 30 years earlier (in 1976) so that many record
stockholders might not be able to be located at this time, rendered it unlikely
that a tender offer would successfully reduce the number of record holders to
the threshold (less than 300) required to terminate the Company's reporting
obligations under the Securities Exchange Act of 1934 (the "Exchange Act").. As
a result, the Lombardi Brothers concluded that a Merger transaction would have a
better chance of achieving privatization than a tender offer. Through their
ownership of in excess of 60% of the Common Stock, the Lombardi Group held
sufficient votes to approve the Merger in

accordance with Delaware law. They concluded that the Merger transaction would
be procedurally fair to the Public Stockholders because in addition to obtaining
a fairness opinion as to the "buy-out" price, any Public Stockholder
dissatisfied with the "buy-out" price would be entitled to seek appraisal rights
under Delaware law. In addition, the Lombardi Brothers decided to pursue the
privatization transaction through a Merger because they wanted to own the entire
Company without minority stockholders at the completion of the transaction. They
did not wish to operate the Company after the transaction subject to possible
objections from minority "partners" with respect to future transactions. They
decided that they were not willing to finance a multi-million dollar payment to
the Public Stockholders unless they owned 100% of the Company at the conclusion
of the transaction.

After rejecting a tender offer for the above reasons and concluding
that a Merger transaction would best achieve the above goals, the Lombardi
Brothers decided to require the transaction to be structured in the form of a
Merger. No other alternatives to accomplish the stated purposes of taking the
Company private and enabling the Lombardi Brothers to own 100% of the Company at
the conclusion of the transaction were considered as the Lombardi Brothers
viewed the Merger structure as satisfactory to accomplish these goals.

On November 12, 2003, the Lombardi Group organized Acquisition Co. as a
Delaware corporation, Acquisition Co was organized for the purpose of merging
into the Company in a Merger transaction in which the shares of the Public
Stockholders would be canceled for a right to a cash payment, thereby converting
the Company into a private corporation to be owned solely by the stockholders of
Acquisition Co.

At the regularly scheduled meeting of the Company's Board of Directors
held on November 15, 2003 at which all eight directors were present as well as
the Company's president, its secretary and its outside counsel, Michael F.
Lombardi delivered a written proposal addressed to the Company's Board of
Directors from the Lombardi Group to acquire all of the outstanding shares of
the Company's Common Stock not owned by the Lombardi Group for a cash purchase
price of $1.75 per share. The proposal contemplated that the acquisition would
take the form of a Merger pursuant to which Acquisition Co. would be merged into
the Company and the Company's stockholders other than the members of the
Lombardi Group would receive a $1.75 per share cash payment for their shares of
the Company's Common Stock. The proposal stated that the proposed cash purchase
price of $1.75 per share represented a 20.7% premium over the last reported
closing sale price per share of the Common Stock on the OTC Bulletin Board(R) on
October 29, 2003, and that the Lombardi Group believed that the proposal was at
a fair price that reflected the Company's historical results and future
prospects.

The Lombardi Group required the transaction to be in the form of a
Merger because it believed this was the most efficient method to take the
Company private at the least cost to the Lombardi Group. It would entail one
Proxy Statement. The purchase price for the stock owned by the Public
Stockholders would not be less than the price found to be fair from a financial
point of view by an independent investment banking

firm and, in addition, would be subject to appraisal rights for dissenting
stockholders to insure, the Lombardi Group believed, procedural fairness to the
Public Stockholders. The Lombardi Group continues to hold the opinion that due
to the large number of record holders of the Company' Common Stock and the fact
that the Company's initial public offering was completed almost 30 years
earlier, a tender offer would not produce enough stock tendered to insure the
Company achieving private corporation status thereby necessitating the added
cost of a Merger Proxy Statement to achieve a successful "going private" result.
In addition, the Lombardi Group was unwilling to finance a multi-million dollar
payment to the Public Stockholders unless they owned 100% of the Company at the
conclusion of the transaction. As a result, the Lombardi Group required the
transaction to be structured in the form of a Merger.

The proposal stated that it, and the proposed acquisition would be
subject to conditions typical for transactions of such type, including without
limitation, the condition that (a) the Company's Board of Directors determines
and recommends that the acquisition price is fair to the Company's minority
stockholders; (b) such determination and recommendation is not withdrawn,
amended or qualified in any way; (c) the Company's published financial
statements, other Securities and Exchange Commission filings and any other
written information submitted to the Lombardi Group or its representatives in
connection with the acquisition shall be and remain true and correct in all
material respects; (d) there shall not have occurred certain material adverse
events of a financial, business or legal nature with respect to the Company, the
Lombardi Brothers or any of their respective affiliates, or the financial or
capital markets in the United States; (e) there shall not have been certain
other political, military, security or natural disasters or calamities anywhere
in the world; (f) the Company and its officers, directors, employees,
professional and other advisors shall at all relevant times (1) grant to the
Lombardi Group and their representatives, timely access to the books, records
and facilities of the Company and its subsidiaries, and (2) cooperate in
completing the acquisition and addressing all matters incidental thereto; (g)
all legal matters incidental to the acquisition shall be reasonably satisfactory
to the Lombardi Group and its counsel; and (h) the Company and its
representatives would not take or encourage any action to cause, promote or
authorize any transaction that may compete or interfere with, or frustrate the
acquisition. The proposal also stated that the acquisition was subject to the
condition that holders of not more than 10% of the outstanding shares of Common
Stock exercise their appraisal rights under the Delaware General Corporation
Law.

The Lombardi Brothers disqualified themselves from negotiating the
proposal on behalf of the Company and the Public Stockholders, and it was agreed
that a Special Committee consisting of the three non-Lombardi Brother directors,
namely Kenneth Cubelli, Nicholas Boxter and Raymond L. Dademo should be
appointed to review and make a recommendation to the Board of Directors
regarding the fairness of the proposed transaction to the Public Stockholders.
See "Interests of Certain Persons in the Merger" herein as to certain
relationships between the members of the Special Committee and the Lombardi
Brothers. No limitations were placed on the authority of the Special Committee,
each of whom has served without compensation. During the term of its service,
the Company did not receive and the Special Committee did not solicit any offers

from other parties to purchase the Company or its assets because no other such
transaction could be effectuated without the consent of the Lombardi Group who
owned more than 60% of the outstanding Common Stock and had indicated that they
had no intention of selling the Company or its assets to others.

At this point in the November 15, 2003 director's meeting, the Lombardi
Brothers left the room and the three members of the Special Committee met with
the Company's president, its secretary and its outside counsel. It was
determined at this meeting that the Special Committee would retain independent
counsel to represent the Committee. The Special Committee retained independent
counsel on December 20, 2003. The Special Committee engaged independent counsel
in connection with its review of the proposed Merger to advise it with respect
to its responsibilities and duties under applicable Delaware corporate law.
Throughout the process, independent counsel continued to provide oral advice to
the Special Committee. Since the rules associated with a transaction of this
nature do not require it, the Special Committee did not engage counsel to render
an opinion with respect to the proposed Merger nor was one obtained.

In late December 2003 and early January 2004, the Special Committee
reviewed proposals from several firms who provide valuation opinions and decided
to retain Houlihan Lokey to serve as its financial advisor and to render an
opinion as to the fairness from a financial point of view, to the Public
Stockholders of the consideration to be received by them in connection with the
proposed Merger. The Special Committee selected Houlihan Lokey based upon its
experience in rendering valuation opinions in transactions involving
restaurants.

On January 29, 2004, three Houlihan Lokey employees traveled to the
Company's executive offices in Point Pleasant Beach, New Jersey where they met
with the Company's president, its controller and outside counsel in order to
obtain background and financial information concerning the Company. None of the
discussions at this meeting concerned the adequacy of the Merger "buy-out"
price.

In early February 2004, Houlihan Lokey delivered a preliminary
valuation analysis to the Special Committee. After the Special Committee had
reviewed the analysis, on or about February 10, 2004, counsel to the Special
Committee advised counsel to the Lombardi Group that on the basis of Houlihan
Lokey's preliminary valuation analysis, the $1.75 offer appeared to be
inadequate but the Committee was continuing to review the offer.

In mid-February 2004, Matthew H. Maschler contacted the Company. Mr.
Maschler advised that he and his family owned a significant number of shares of
Common Stock and wanted to be certain that the Board of Directors would act
independently when evaluating and accepting the proposed Merger.

On March 1, 2004 at the request of the Lombardi Group and with the
permission of the Special Committee, a telephone conference call was arranged
for the Lombardi Group with Houlihan Lokey. The Lombardi Group wanted to
understand why Houlihan Lokey, after a preliminary valuation analysis, believed
the $1.75 offer appeared to be

inadequate when it was substantially higher than the market price for the Common
Stock immediately prior to the announcement of the offer. Participating in the
conference call were Michael F. Lombardi, counsel to the Lombardi Group, counsel
to the Special Committee and Houlihan Lokey personnel. Houlihan Lokey explained
that the market price for the Common Stock was only one factor it took into
account in evaluating the fairness from a financial point of view of the
"buy-out" price offer. Houlihan Lokey informed Mr. Lombardi that it had only
performed certain preliminary valuation analyses at that time and that based on
those analyses, it appeared to Houlihan Lokey that the $1.75 offered cash
"buy-out" price was inadequate from the financial point of view.

On or about March 8, 2004 after further discussion with each member of
the Special Committee and with Houlihan Lokey, counsel to the Special Committee
advised counsel to the Lombardi Group that the Committee had rejected the $1.75
per share offer as inadequate.

On March 11, 2004, the Lombardi Group by correspondence through counsel
advised counsel to the Special Committee that it was increasing the cash
purchase price offer to $2.50 per share. Counsel to the Lombardi Group pointed
out that the $2.50 offered purchase price represented a 30% premium over the
last reported closing sale price per share of the Common Stock on March 5, 2004
as reported on the OTC Bulletin Board(R) and a 72% premium over the last
reported sale price per share of the Common Stock prior to the initial proposal.

The Lombardi Group believed that this new proposal was at a fair price
that adequately reflected the Company's historical and future prospects. Counsel
advised that the Lombardi Group believed that the Special Committee should take
the following factors into consideration in evaluating the new offer. Any
valuation of the Company based upon a multiple of EBITDA should take into
consideration (i) the small size of the Company compared to larger, more
established publicly traded restaurant chains; (ii) the recent inability of the
Company to diversify its restaurant offerings, the closing of its Escondido's
restaurant at the Monmouth Mall and the sale of its Lobster Shanty restaurant in
Jensen Beach, Florida; (iii) Management's belief that growth of the Company's
seafood restaurants was severely constrained due to its inability to lease or
own waterfront locations which is viewed as essential for seafood restaurants;
and (iv) the high cost of acquiring new liquor-licenses in the Company's home
state of New Jersey. In addition, unlike the other restaurant companies referred
to by Houlihan Lokey in its analysis, due to the location of the Company's
restaurants, its financial results were extremely dependent on the uncertainty
of the weather and vacation trends. Furthermore, the Lombardi Group claimed, the
Company's forecasts failed to quantify the substantial sums necessary for
capital expenditures due to the Company's deteriorating plant and equipment
(which would likely exceed $1,000,000 per location). In addition, the Company's
lease of the parking facility adjacent to its Point Pleasant Beach restaurants
was due to expire in approximately 3-1/2 years and the landlord had indicated
that he may not offer a renewal of that lease. The loss of that parking facility
would materially lower the value of the Company's Point Pleasant Beach
restaurants, the Lombardi Group maintained, because of a dramatic decrease in
revenue stemming from fewer customers.

Finally, the Lombardi Group was offering to acquire a minority interest in a
highly illiquid company controlled by the Lombardi Group. As a result, the
Lombardi Group claimed that valuation comparisons to comparable, liquid, public
restaurant companies should not be made because doing so would involve including
the inherent increased value attributed to such companies. Counsel advised that
this new $2.50 per share proposal would be withdrawn in the absence of a
response by March 19, 2004. This deadline was subsequently extended by agreement
between counsel.

On April 16, 2004, counsel to the Special Committee informed counsel to
the Lombardi Group that after consultation amongst themselves and in light of
Houlihan Lokey's preliminary valuation analysis, the Special Committee had
determined that the $2.50 per share offer price was inadequate from a financial
point of view, even with the potential departure of the Company's president.

On April 20, 2004, the Lombardi Group through counsel advised counsel
to the Special Committee that it was increasing the cash purchase price offer to
$3.00 per share. Counsel to the Lombardi Group pointed out that the $3.00
offered purchase price represented a 22% premium over the last reported closing
sale price per share of the Common Stock on April 5, 2004 as reported on the OTC
Bulletin Board(R) and a 107% premium over the last reported sale price per share
of the Common Stock prior to the initial proposal (as well as a similar premium
over the Common Stock's trading range during the past several years). Counsel
advised that the Lombardi Group believed that the proposal ($3.00 per share) was
a fair price that accurately reflected the Company's historical results and
future prospects and urged the Special Committee to consider the factors cited
in the Lombardi Group's previous (March 11, 2004) correspondence. Counsel
advised that this new $3.00 per share proposal would be withdrawn in the absence
of a response by April 27, 2004.

At some time in April 2004, Matthew H. Maschler placed a telephone call
to Michael F. Lombardi and asked Mr. Lombardi the current status of the
negotiations between the Lombardi Group and the Special Committee. Mr. Lombardi
informed Mr. Maschler that he was only authorized to advise him that the
Lombardi Group was still in negotiation with the Special Committee and that no
agreement had been reached. Mr. Maschler informed Mr. Lombardi that he and his
brothers owned approximately 5% of the Company's Common Stock and did not want
to be bought out. Mr. Maschler told Mr. Lombardi that he was prepared to
litigate if necessary to prevent being bought out, but that his real desire was
to be part of the Continuing Stockholder Group in the privatization. Mr.
Lombardi told Mr. Maschler that it was unlikely that the Lombardi Brothers would
want the Maschler Brothers to be part of the privatization because the Lombardi
Brothers contemplated a "family" type situation after the privatization, without
"partners". He told Mr. Maschler that the privatization might never take place
and in addition, if the Maschler Brothers felt that the "buy-out" price was too
low, they had appraisal rights under Delaware law. Mr. Maschler ended the
conversation by asking Mr. Lombardi to present to his brothers the prospect of
the Maschler Brothers being part of the Continuing Stockholder Group. Mr.
Lombardi said that he would discuss the matter

with his brothers but that it was unlikely that the Lombardi Brothers would
respond favorably.

Subsequently, in late April or early May 2004, Michael F. Lombardi
received another telephone call from Matthew H. Maschler, this time with Matthew
Maschler's father also on the telephone. Stephen F. Lombardi was also present on
the call with Michael. The Maschlers once again advised that the Maschler
Brothers did not want to be bought out, were prepared to litigate if necessary
to prevent being bought out, but that their real desire was to be part of the
Continuing Stockholder Group in the privatization. Mr. Lombardi reiterated the
response which he had given in the earlier April 2004 call.

Michael F. Lombardi discussed both calls with his brothers. The
reaction of the Lombardi Brothers was that they did not want non-family members
in the Continuing Stockholder Group.

On or about May 4, 2004, counsel to the Special Committee, after
conferring with members of the Special Committee, informed counsel for the
Lombardi Group that the $3.00 per share offer appeared to be inadequate. At this
point, counsel for the Lombardi Group held a number of telephone discussions
with counsel to the Special Committee in which he indicated that the Lombardi
Group did not wish to continue a pattern of offer and rejection and requested an
indication from the Special Committee of an acceptable price.

After discussion with the members of the Special Committee, counsel to
the Special Committee advised counsel to the Lombardi Group that subject to
Houlihan Lokey agreeing to issue a fairness opinion at that price, the Special
Committee would accept the Lombardi Group's offer if it was raised to $3.12 per
share. On May 6, 2004 after consulting with the Lombardi Group, counsel to the
Lombardi Group advised counsel to the Special Committee that the offer would be
raised to $3.12 per share but that was the Lombardi Group's final offer.

On May 13, 2004, Houlihan Lokey advised the Special Committee that
based on the information received and analysis performed through that point
that, if asked by the Special Committee, Houlihan Lokey could opine favorably
that, as of that date and subject to the matters orally described to the Special
Committee, the consideration to be received by the Public Stockholders in
connection with the Merger ($3.12 per share) was fair to them from a financial
point of view. Subsequently, the members of the Special Committee unanimously
agreed to recommend to the Board of Directors the $3.12 per share proposal. In
reaching its unanimous agreement, the Special Committee cited its reliance on
oral communications with Houlihan Lokey, including but not limited to summary
valuation and related financial analysis; previous prices for the Common Stock;
the lack of liquidity in the Common Stock based on its relatively low trading
volume; the decline in Market Conditions (particularly Micro-Cap Stocks) since
the initial offer; increasing interest rates; the Company's prior stock
repurchases; the increased offers of the Lombardi Group; the fact that there
were no other offers or indications of interest; the Company's stagnating and
decreasing operating results; departure of the Company's

chief executive officer; the lack of a record or indication of selling the
Company's real estate; required capital investments in and continued
expenditures and improvements with respect to certain of the Company's
restaurant locations; and the Company's limited ability to expand seafood
restaurant locations due to the difficulty in acquiring waterfront properties.

A special meeting of the Company's Board of Directors was held on June
16, 2004 at a time when all of the directors were available. All eight of the
directors attended as well as the Company's outside counsel. At the meeting, the
Board acknowledged the unanimous recommendation of the Special Committee to the
Board to accept the $3.12 per share offered price and discussed the various
factors relied on by the Special Committee in recommending acceptance of the
Merger proposal at $3.12 per share. The Board noted that even with the Houlihan
Lokey opinion that the $3.12 per share "buy-out" price was fair to the Public
Stockholders from a financial point of view, any Public Stockholder not wishing
to accept the $3.12 per share offer price would be accorded dissenter's rights
to an appraisal and concluded that this insured that the proposed transaction
would be procedurally fair to the Public Stockholders. The Board unanimously
agreed to accept the Merger proposal.

Sometime in June 2004 after the Special Committee had agreed to
recommend the fairness of the $3.12 "buy-out" price to the Board of Directors,
Matthew H. Maschler called Michael F. Lombardi. Mr. Lombardi told Mr. Maschler
that the Maschler Brothers should be happy with the agreed "buy-out" price of
$3.12 per share. Mr. Maschler told Mr. Lombardi that he and his brothers were
prepared to litigate even at that price "or at any price" as their real interest
was to be a part of the Continuing Stockholder Group in the privatization. Mr.
Maschler indicated that he and his brother were long term investors who had no
need for liquidity of their investment in the Company and that they were
prepared to see the Company's operations eventually turn successful no matter
how long it may take.

In late June 2004, the Lombardi Brothers met and decided it would be in
their best interests to allow the Maschler Brothers to join the Continuing
Stockholder Group in the privatization. The reasoning was that the Maschlers
would pay their proportionate share of the privatization costs (7.6% or
approximately $327,000) thereby saving the Lombardi Brothers considerable
capital and that although the Lombardi Brothers believe that the $3.12 per share
"buy-out" price was fair from a financial point of view to the Public
Stockholders, allowing the Maschler Brothers to join the Continuing Stockholder
Group could avoid costly litigation.

After the Lombardi Brothers reached this decision, still in late June
2004, Michael F. Lombardi called Matthew H. Maschler and told him that the
Maschler Brothers could join the Continuing Stockholder Group with a share
proportionate to their proportionate stock ownership in the Company, that
Matthew H. Maschler would be elected as a director of Acquisition Co., and after
the Merger, as a director of the Company. Matthew H. Maschler expressed his
appreciation and vowed to work with the Lombardi Group to help the resulting
Company in any way that he could after the privatization. No specific

plans were discussed. Mr. Lombardi also advised Mr. Maschler that no Maschler
Brother would be admitted to the Continuing Stockholder Group who had been
subject to any sanction for a violation or alleged violation of federal or any
state securities laws. As a result, on November 24, 2004, Lee H. Maschler and
his brother Matthew H. Maschler each purchased 32,823 shares of Common Stock
from their brother Erik Maschler in a private purchase at a purchase price of
$3.03 per share.

During the summer of 2004, counsel were engaged in negotiating the
terms and in drafting the Merger Agreement and documents required to be filed
with the Securities and Exchange Commission in order to hold the stockholder
meeting to effectuate the Merger. During this time, Michael F. Lombardi and
Robert M. Lombardi were involved in arranging bank financing for the
transaction.

In September 2004, matters were put on hold due to the closing of the
Company's three Florida restaurants for approximately ten days in the case of
one restaurant, and for approximately two months and approximately two and
one-half months in the case of the other two restaurants due to the September
2004 Florida hurricanes. In October and November of calendar year 2004 after
discussions with a bank lender, the Lombardi Brothers received assurances that
the Bank would provide additional funding for the Merger. At that point the
Lombardi Group decided to proceed with the transaction and Houlihan Lokey was
contacted in order to update its opinion.

Seven of the eight directors of the Company were in attendance at the
regular meeting of the Board of Directors held on November 20, 2004. Anthony F.
Lombardi was unable to attend. Also present was the Company's executive vice
president, outside corporate counsel and the directors of the Company's Florida
and New Jersey operations. A draft Proxy Statement was delivered to each
director for his subsequent review as well as a draft Merger Agreement. After
discussion, the Board approved the Merger Agreement and the proposed "going
private" transaction subject to stockholder approval.

In December 2004, Houlihan Lokey updated its analysis with respect to
the Merger and, on December 16, 2004, provided the Special Committee with a
written opinion as of the date thereof that based on the matters described in
its opinion, the consideration to be received by the Public Stockholders in the
Merger ($3.12 per share) is fair to them from a financial point of view.
Houlihan Lokey's opinion dated December 16, 2004, is attached as Appendix B to
this Proxy Statement. A copy of Houlihan Lokey's report presented to the Special
Committee on December 16, 2004 is available for inspection and copying at the
Company's principal executive offices during regular business hours by any
stockholder or his or her representative who has been so designated in writing.
The Special Committee subsequently voted unanimously to continue to recommend
the Merger proposal at a "buy-out" price of $3.12 per share to the Board of
Directors.

At a meeting of the Board of Directors of the Company held later on
December 16, 2004 with all of the directors and outside corporate counsel
attending, the Special Committee members described the call with Houlihan Lokey
that day and reiterated the

Special Committee's recommendation to the Board of Directors approving the
Merger proposal at a "buy-out" price of $3.12 per share. The Board of Directors
once again reviewed the reasons why it believed the Merger transaction with a
$3.12 "buy-out" price continued to be fair to and in the best interests of the
Public Stockholders, unanimously approved adoption of the Merger proposal with a
$3.12 "buy-out" price and authorized the holding of this Special Meeting to
adopt and approve the Merger transaction.

On December 17, 2004, the Continuing Stockholders executed a
Contribution Agreement pursuant to which each member agreed to contribute his or
its Common Stock to Acquisition Co. prior to the Merger in exchange for an
identical number of shares of Acquisition Co. capital stock. If the Merger is
consummated, the Common Stock contributed by the Continuing Stockholders to
Acquisition Co. will be canceled, as will their shares of Acquisition Co.
capital stock, and they will each be issued new shares of Common Stock identical
in number to the shares he or it agreed to contribute to Acquisition Co.

The Agreement and Plan of Merger was executed by the Company and
Acquisition Co. on December 22, 2004.

REASONS FOR AND RECOMMENDATION OF THE SPECIAL COMMITTEE AND THE BOARD OF
DIRECTORS

The Special Committee and the Board of Directors have each unanimously
determined that the Merger Agreement and the Merger are fair, both substantively
and procedurally, to and are in the best interests of the Company's Public
Stockholders. The Special Committee and the Board recommend that you vote "For"
approval and adoption of the proposed Merger pursuant to the terms and
conditions of the Merger Agreement. See "Interests of Certain Persons in the
Merger - Actual or Potential Conflicts of Interest" as to actual or potential
conflicts of interest between the members of the Board and the Public
Stockholders.

As part of the process of recommending the proposed "buy-out", the
Special Committee continues and will continue to engage in the ongoing review
and analysis of those previously identified factors which it believed to be
relevant in making its recommendation to the Board of Directors, as well as any
additional or new considerations which may come to its attention prior to the
conclusion of the proposed transaction to ensure that no information comes to
its attention which would otherwise change its prior recommendation to the
Board.

The Special Committee and the Board believe that the Merger is a more
desirable alternative for the Public Stockholder than continuing to hold an
equity interest in the Company. In reaching the determination that the Merger
Agreement and the Merger are fair to the Public Stockholders, the Special
Committee consulted with its financial consultant, Houlihan Lokey and with its
legal advisors and the Board consulted with its legal advisors. Each member also
relied on his knowledge of the Company's business operations, properties,
financial condition, operating results, and prospects in the

restaurant business. Also reviewed were trading prices for and trading volume of
the Company's Common Stock in the over-the-counter market.

Each of the following factors, in the unanimous opinion of the Special
Committee and the Board, supported the determination that the Merger is fair to
and in the best interests of the Public Stockholders.

o Taking into account the following factors, the $3.12 per share
"buy-out" price will allow the Public Stockholders to liquidate their
investment in the Company at the highest possible price obtainable at
this time.

o After several increases in the offered purchase price, the $3.12 per
share "buy-out" purchase price is the highest price that the Lombardi
Group is willing to offer.

o The market prices for the Common Stock in the over-the-counter market
in the three years preceding the initial announcement of the Merger
proposal have been substantially less than the $3.12 "buy-out" price.
See "Common Stock" herein.

o The $3.12 per share "buy-out" price represents a premium of
approximately 115% over the $1.45 per share last sale price for the
Common Stock in the over-the-counter market immediately preceding the
public announcement of the initial $1.75 per share purchase proposal.

o The Company's previous open market stock repurchases failed to have a
positive impact on the market price for the Common Stock indicating
that future repurchase programs will probably be ineffective. See
"Common Stock" herein.

o The lack of liquidity in the market for the Common Stock as reflected
by the low trading volume and the limited public float (approximately
1,350,000 shares) indicates that any volume of sales would depress the
market price for the Common Stock. See "Common Stock" herein.

o The increasing costs of remaining a publicly traded entity will have a
negative effect on the Company's cash resources. These costs, for
legal, auditing and transfer agent fees, aggregated approximately
$160,000 for fiscal 2004, are expected to increase by at least $25,000
for fiscal 2005, and are expected to increase again in fiscal 2007 to
approximately $335,000. See "Certain Effects of the Merger" herein.

o There has been no significant growth in the Company's business as
reflected by the following relative lack of growth in its revenues
over the past four years

FISCAL 2001 FISCAL 2002 FISCAL 2003 FISCAL 2004
----------- ----------- ----------- -----------
$20,156,890 $20,798,333 $22,953,925 $22,283,169

This stagnation in the Company's revenues indicates that it is
unlikely that there will be any significant appreciation in the market
price for the Common Stock in the foreseeable future above the trading
range that existed prior to the initial public announcement of the
Merger proposal in November 2003. See "Common Stock" herein,

o The drain on the Company's cash resources to repair, maintain and
renovate its existing restaurants will inhibit the Company's ability
to expand its business and open additional restaurants. These costs
totaled approximately $1,200,000 in fiscal 2005 and are expected to
exceed $3,200,000 in fiscal 2006.

o The lack of waterfront sites at reasonable cost in the Company's
geographical areas of operation will limit the Company's ability to
expand the number of its seafood restaurants.

o The fact that the "buy-out" price of $3.12 per share to the Public
Stockholders which is being funded by the Continuing Stockholders is
substantially higher than the prices they paid for purchases of Common
Stock from January 2002 through the date of the initial public
announcement of the Merger proposal in November 2003 indicate that
they are not profiting from those purchases at the expense of the
Public Stockholders. See "Interests of Certain Persons in the Merger -
Stock Transactions" herein.

o The written opinion of Houlihan Lokey, delivered to the Special
Committee on December 16, 2004, that based upon and subject to the
limitations, qualifications and assumptions stated therein, concluded
that the $3.12 per share price to be received by the Public
Stockholders in the Merger for their shares of Common Stock is fair to
them from a financial point of view. See the information under the
caption "Opinion of Houlihan Lokey Howard & Zukin Financial Advisors,
Inc." hereunder. A copy of Houlihan Lokey's written opinion is
included as Appendix B to this Proxy Statement.

o The fact that stockholders who properly assert dissenters' rights in
connection with the Merger in accordance with Section 262 of the
Delaware Law are entitled to demand and be paid the fair value for
their shares of Common Stock as determined pursuant to an appraisal by
the Delaware Court of Chancery. See "Dissenters' Rights of Appraisal"
herein. A copy of Section 262 of the Delaware Law is attached as
Appendix C to this Proxy Statement.

o The appointment of the Special Committee to review and make a
recommendation regarding the fairness of the proposed Merger
transaction to the Public Stockholders, its retention of independent
counsel and of an independent financial advisor (Houlihan Lokey), to
opine as to the fairness from a financial point of view of the
"buy-out" price to the Public Stockholders, the extended arms-length
negotiations which resulted in the increase in the original offered
"buy-out" price of $1.75 per share to $3.12 per share and the fact
that

stockholders who do not wish to accept the "buy-out" price, have
appraisal rights under Delaware law insures that the proposed Merger
transaction is procedurally fair to the Public Stockholders. The
members of the Special Committee and the Board determined not to
require the majority vote of the Public Stockholders (who own
approximately 34% of the outstanding Common Stock) to approve the
Merger transaction because the large number of record holders of the
Common Stock combined with the fact that the Company completed its
initial public offering almost 30 years earlier (in 1976) so that many
record stockholders might not be able to be located at this time,
rendered it unlikely that the Company would receive any response from
Public Stockholders holding a majority of the shares owned by the
Public Stockholders.

o Going Concern Value - Each member of the Special Committee, each
member of the Board of Directors, Acquisition Co. (without the consent
of Houlihan Lokey) and each of the Continuing Stockholders (without
the consent of Houlihan Lokey) hereby expressly adopts the discussion
of Houlihan Lokey under both its market multiple methodology and its
comparable merger methodology hereinafter set forth as to the
"...enterprise value of our operations..." as being reflective of the
Company's value as a "going concern." They each noted that after
certain adjustments, Houlihan Lokey concluded the range of value under
its market multiple methodology was $3.09 per share to $3.37 per share
and that the range of value under its comparable merger (transaction)
methodology was $3.06 per share to $3.29 per share. These ranges
positively impacted the determination of each member of the Special
Committee, each member of the Board of Directors, Acquisition Co.
(without the consent of Houlihan Lokey) and each of the Continuing
Stockholders (without the consent of Houlihan Lokey) that the $3.12
per share consideration to be received by the Public Stockholders in
the Merger is fair to them from a financial point of view.

o Liquidation Value - The members of the Special Committee, the members
of the Board of Directors, Acquisition Co. and the Continuing
Stockholders did not independently consider the liquidation value of
the Company. However, they each noted that Houlihan Lokey performed a
financial analysis of the Company's book value to determine an
estimation of the Company's value if it were to liquidate.
(Acquisition Co. and the Continuing Stockholders took note of this
analysis without the consent of Houlihan Lokey). Houlihan Lokey did
not make, and neither the Company, any member of the Special
Committee, any member of the Board of Directors, Acquisition Co. nor
any Continuing Stockholder obtained, any independent appraisal of the
Company's properties or assets. Houlihan Lokey's financial analysis
assumed an orderly liquidation based on adjusted book value of the
Company's assets and satisfaction of the Company's liabilities to
assess for its own internal analyses whether such an analysis
contradicted its market multiple and comparable merger analyses. With
the exception of the Company's property, plant and equipment, Houlihan
Lokey relied on the book value of the Company's assets discounted at
customary recovery rates. With respect to the real estate and related
restaurants and equipment, Houlihan Lokey

relied on (i) market rents quoted by local real estate agents for
comparable restaurant space, assuming triple-net lease terms,
multiplied by regional capitalization rates from a national
real-estate publication, (ii) comparable real estate listings, (iii)
estimated recovery rates based on discussions with liquidation
professionals, and (iv) tax assessments. Houlihan Lokey assumed a
nominal value with respect to the Company's equipment. Additionally,
they deducted transaction costs estimated at 5.0% of gross proceeds
from asset sales to account for expenses (in other words, real estate
commissions and other professional fees) typically incurred in an
orderly liquidation.

Houlihan Lokey performed its financial analysis of the
Company's book value if it were to liquidate to assess for its own
internal analyses whether such an analysis contradicted its market
multiple and comparable merger analyses. Houlihan Lokey did not share
the numerical result of this analysis with the Special Committee, the
Board of Directors, Acquisition Co. or any Continuing Stockholder.
After completing this analysis, Houlihan Lokey determined that it did
not contradict its market multiple and its comparable merger analyses
and opined that the $3.12 per share consideration to be received by the
Public Stockholders in the Merger is fair to them from a financial
point of view. The fact that Houlihan Lokey conducted this internal
analysis and determined that it did not contradict its market multiple
and its comparable merger analyses (which are the only bases on which
Houlihan Lokey's opinion is based) positively impacted the
determination of each member of the Special Committee, each member of
the Board of Directors, Acquisition Co. and each Continuing Stockholder
that the $3.12 per share consideration to be received by the Public
Stockholders in the Merger was fair to them from a financial point of
view. (Acquisition Co. and the Continuing Stockholders did so without
the consent of Houlihan Lokey).

o Other Offers - During the past two years, no firm offers were received
with respect to a merger or consolidation of the Company with or into
another company or vice versa; the sale or transfer of all or any
substantial part of the Company's assets; or a purchase of the
Company's securities that would enable the holder to exercise control
of the Company.

In concluding that the Merger is fair to the Public Stockholders, the
Special Committee and the Board also considered the following factors, each
one of which they considered to be a negative factor.

o The fact that consummation of the Merger will preclude the Public
Stockholders from having the opportunity to participate in any future
growth of the Company.

o The fact that if the Merger is consummated, the Lombardi Group and the
Maschler Group, who currently own the controlling interest in the
Company, will have the sole opportunity to benefit from any increases
in the value of the Company as a result of their increased equity
ownership in the Company (from

66% to 100%) and therefore could receive a substantial economic
benefit from the transaction.

o The fact that the Company's net book value per share and net tangible
book value per share ($3.91 and $3.69 per share, respectively, as of
October 24, 2004, the last day of the Company's third fiscal quarter
in fiscal 2005) exceeds the $3.12 per share cash price being offered
to the Public Stockholders in connection with the Merger by $.79 and
$.57 per share, respectively (25% and 18%, respectively). The members
of the Special Committee and the Board do not believe that net book
value and net tangible book value are relevant indicators of the value
of the Company as a going concern but rather are indicative of
historical costs. Each member of the Special Committee and the Board
took into account the fact that the Merger consideration ($3.12 per
share) is less than the net book value per share and the net tangible
book value per share. Based upon the Company's continued expenditure
of capital to improve certain of its restaurant locations and
operations, as well as the representation of the Continuing
Stockholders to the Company that they have no "present plans" for any
extraordinary corporate transaction involving the Company after the
Merger is consummated, the Special Committee and the Board have each
assumed that the Company shall continue in operation as a viable and
going concern after the Merger is consummated, and therefore, have
neither considered (except to the extent described above) nor
performed any liquidation analysis of the Company including any
independent appraisals with respect to Company-owned properties.

o The conflicts of interest of the Lombardi Group who may realize
substantial benefits if the Merger is consummated. The five Lombardi
Brothers comprise five of the eight directors of the Company. One
brother, Robert M. Lombardi, also serves as the Company's Chairman and
President. The Lombardi Brothers, their related entities and the
Maschler Group own approximately 66% of the outstanding Common Stock
and if the Merger is consummated, will own 100% of the outstanding
Common Stock. The Company also leases two buildings in Freehold, New
Jersey in which it operates restaurants and a parking lot used for the
two restaurants from an entity affiliated with the Lombardi Group. Two
members of the Special Committee have family relationships with the
Lombardi Brothers and the third member renders accounting services to
the Lombardi Brothers and their affiliated entities. See "Interests of
Certain Persons in the Merger - Actual or Potential Conflicts of
Interest" herein. The Special Committee and the Board, being fully
aware of these conflicts, believe that the procedures followed in
considering the Merger proposal including the appointment of the
Special Committee and the retention of Houlihan Lokey resulted in a
negotiated transaction that is fair to the Public Stockholders despite
these conflicts.

The above listing of the factors considered by the Special Committee
and the Board is not meant to be exhaustive, but includes the material factors
considered by them as part of their determination that the Merger and the Merger
Agreement are fair to the Public Stockholders and their recommendation that
Stockholders approve the Merger and

the Merger Agreement. In addition to considering the above factors, the Special
Committee and the Board reviewed the analysis and conclusions of Houlihan Lokey
as described below before making the determination that the Merger and the
Merger Agreement are fair to the Public Stockholders. Based on the above
engagement of Houlihan Lokey and of separate legal counsel to negotiate on its
behalf, the Board and the Special Committee also believe that the Merger is
procedurally fair to the Public Stockholders. The members of the Special
Committee and the Board have not assigned relative weights or quantifiable
values to the above positive and negative factors and each has based his
recommendation on the totality of the information presented to and considered by
him. In the opinion of the Special Committee and the Board of Directors, the
positive factors set forth above outweigh the negative factors set forth above.

Acquisition Co. and each Continuing Stockholder affirms his and its
opinion and belief that the Merger is fair both substantively and procedurally
to the Public Stockholders for the same reasons set forth above as given by each
member of the Special Committee and of the Board in justifying his opinion that
the Merger is fair both substantively and procedurally to the Public
Stockholders. In addition, Acquisition Co. and each Continuing Stockholder is
relying upon and adopts as his or its own (without the consent of Houlihan
Lokey), Houlihan Lokey's analysis and conclusion as to the fairness, from a
financial point of view, of the consideration per share to be received by the
Public Stockholders in the Merger. Furthermore, each of the Maschler Brothers
points out that although he believes that the $3.12 per share "buy-out" price is
fair at this time to the Public Stockholders, the Maschler Brothers are long
term investors who have no need for liquidity of their investment in the Company
and are prepared to wait to see the Company's operations turn successful no
matter how long it may take, and therefore insisted on joining the Continuing
Stockholders.

OPINION OF HOULIHAN LOKEY HOWARD & ZUKIN FINANCIAL ADVISORS, INC.

On January 30, 2004, we announced that the Special Committee had
engaged the investment banking firm of Houlihan Lokey to render an opinion as to
the fairness, from a financial point of view, of the consideration to be
received by the Public Stockholders in connection with the Merger.

The Special Committee selected Houlihan Lokey based on its reputation,
experience and expertise in the valuation of businesses, and their securities,
in connection with mergers and acquisitions, particularly within the restaurant
sector. Houlihan Lokey is a nationally recognized investment banking firm that
is continually engaged in providing financial advisory services for business and
securities valuations and in rendering fairness opinions in connection with
mergers and acquisitions and leveraged buyouts for a variety of regulatory and
planning purposes, recapitalizations, financial restructurings and private
placements of debt and equity securities.

received by the Public Stockholders in connection with the Merger is fair to
them from a financial point of view. Houlihan Lokey subsequently updated its
analysis with respect to the Merger and, on December 16, 2004, provided the
Special Committee with a written opinion as of the date thereof that based on
the matters described in its opinion, the consideration to be received by the
Public Stockholders in the Merger is fair to them from a financial point of
view. Houlihan Lokey's written opinion neither addresses any other aspect of the
Merger, nor the relative merits of the Merger as compared to any alternative
business strategies that might exist for us or the effect of any other
transaction in which we might engage.

The summary of Houlihan Lokey's written opinion set forth below is
qualified by reference to the full text of the opinion attached as Appendix B to
this Proxy Statement. Houlihan Lokey provided its written opinion for the
information and assistance of the Special Committee in connection with its
consideration of the Merger. Houlihan Lokey's written opinion is not a
recommendation as to how any stockholder should vote or otherwise act (including
with respect to dissenting) at the Special Meeting. Stockholders are encouraged
to read the written opinion carefully in its entirety for a description of the
assumptions made, matters considered and limitations on the review undertaken.

No limitations were imposed by the Special Committee upon Houlihan
Lokey with respect to the investigations made or procedures followed by it in
rendering its written opinion. The opinion speaks only as of its date. Events
that could affect the fairness of the Merger to the Public Stockholders from a
financial point of view include adverse changes in industry performance or
market conditions and changes to our business, financial condition and results
of operations.

There were no material relationships or transactions between Houlihan
Lokey and us, our affiliates or any other party to the Merger prior to or at the
time that Houlihan Lokey and the Special Committee entered into the engagement
letter with respect to Houlihan Lokey's written opinion, none has since
developed and none is mutually understood to be contemplated other than the
matters contemplated by the engagement letter.

In arriving at the conclusions expressed in Houlihan Lokey's written
opinion, among other things, Houlihan Lokey undertook the following actions:

o met with certain members of our senior management to discuss our
operations, financial condition, future prospects and projected
operations and performance;

o visited certain of our restaurants and business offices;

o reviewed our publicly traded stock price history and trading volume;

o reviewed a draft of the Merger Agreement dated December 16, 2004;

o reviewed our certificate of incorporation, as amended;

o reviewed our Annual Report to shareholders on Form 10-KSB for the
fiscal years ended January 25, 1998 through January 25, 2004;

o reviewed our Form 10-QSB for the quarterly period ended October 24,
2004;

o reviewed our tax assessments of our owned properties;

o reviewed our restaurant lease agreements;

o reviewed certain publicly available financial data for certain
companies that Houlihan Lokey deemed appropriate; and

o conducted such other studies, analyses and inquiries, as Houlihan
Lokey has deemed appropriate.

ANALYSES

In connection with rendering its written opinion, Houlihan Lokey
performed the financial and comparative analyses described below to assess the
fairness of the consideration per share to be received in the Merger. The
summary of these analyses is not a complete description of the analyses
underlying Houlihan Lokey's opinion. The preparation of a financial opinion is a
complex analytical process involving various determinations as to the most
appropriate and relevant methods of financial analysis and the application of
those methods to the particular circumstances and, therefore, a financial
opinion is not readily susceptible to summary description. Houlihan Lokey
arrived at its written opinion based on the results of all analyses undertaken
by it and assessed as a whole and did not draw, in isolation, conclusions from
or with regard to any one factor or analysis or method of analysis. Accordingly,
Houlihan Lokey believes that its analyses must be considered as a whole and that
selecting portions of its analyses and factors, without considering all analyses
and factors or the narrative description of the analyses, could create a
misleading or incomplete view of the processes underlying its analyses and
opinion.

Early in calendar year 2004, the Company provided Houlihan Lokey with a
budget for the fiscal year ending January 30, 2005. This budget was prepared
prior to the hurricanes which struck Florida in September 2004 and resulted in
the temporary closure of three of the Company's restaurants. As of December 16,
2004, the Company's management had not prepared a budget for any future period
and the budget for the fiscal year ending January 30, 2005 was no longer
current. As a result, Houlihan Lokey had no financial forecast on which it could
rely in its analysis.

PUBLIC MARKET PRICING: Houlihan Lokey reviewed the historical market
prices and trading volume for our publicly held Common Stock and reviewed news
articles and press releases relating to us. For the 52-week period prior to the
Lombardi Group's initial proposal of $1.75 per share, our publicly traded Common
Stock traded at a low of $1.36 per share and high of $1.50 per share. Prior to
the announcement of the revised offer of $3.12 per share, our stock price had
not traded above $3.00 per share since May 5, 1995. Since the announcement, our
stock price has traded slightly below the revised offer price of $3.12 per
share. Additionally, our daily trading volume has been very thin averaging less
than 1,500 shares per day over the past year, and there are days in which it
does not trade at all.

MARKET MULTIPLE METHODOLOGY: Houlihan Lokey reviewed certain financial
information of publicly traded comparable companies which were similar to us in
terms of operations and product mix. Houlihan Lokey's search for comparable
publicly traded companies included a review of several databases, including
Bloomberg, Hoover's Online and FactSet. In establishing the search parameters,
three basic criteria had to be met initially:

o The company had to be primarily engaged in the casual dining
restaurant business (excluding fast food & steakhouse restaurants).

o The company had to have a stock price greater than $5.00 per share.

o The company's outstanding common stock had to be publicly held and
actively traded.

The comparable companies included:

o Buca, Inc. o Landry's Restaurant, Inc.

o Champps Entertainment, Inc. o O'Charley's Inc.

o Darden Restaurants, Inc. o Total Entertainment Restaurant
Corporation

o Famous Dave's of America, Inc.

Houlihan Lokey calculated certain financial ratios of the comparable
companies based on the most recent publicly available information. These
financial ratios include the multiples of: (i) enterprise value (the equity
value of the comparable company plus all interest-bearing debt less all cash and
cash equivalents) to latest twelve months earnings before interest, taxes,
depreciation and amortization ("EBITDA") and (ii) enterprise value to latest
twelve months earnings before interest, taxes, depreciation, amortization and
rent expense ("EBITDAR"). Houlihan Lokey derived enterprise value indications of
the Company by applying selected EBITDA and EBITDAR multiples to certain
adjusted operating results for the last twelve months ended October 24, 2004.
Based on the above, the resulting indications of the enterprise value of our
operations ranged from approximately $8.3 million to $9.3 million (after
incorporating a 20.0% premium).

After determining our enterprise value from operations, Houlihan Lokey
made certain adjustments to determine our equity value including adjustments to
reflect current holdings of cash, cash equivalents, equity in certain life
insurance policies, equity in a liquor license at Escondido's Monmouth Mall and
the fair market value of certain nonoperating real property we own and
subtracting debt obligations, as applicable for each valuation indication. The
resulting indicated range of value from the market multiple methodology was
$3.09 per share to $3.37 per share.

COMPARABLE MERGER METHODOLOGY: Houlihan Lokey reviewed the
consideration paid in fifteen restaurant sector acquisitions that occurred
between January 1, 2001 and December 10, 2004. Houlihan Lokey's search for
comparable merged or acquired companies included a review of several databases,
including Bloomberg, Mergerstat and FactSet. In establishing the search
parameters, the company had to be primarily engaged in the restaurant business
and have publicly available data to derive metrics. Given the limited number of
transactions involving casual dining restaurants, Houlihan Lokey expanded its
criteria to all restaurants, including fast food and steakhouse such as Garden
Fresh and Morton's.

Specifically, Houlihan Lokey reviewed the following transactions:

--------------------------------------------------------------------------------
TARGET ACQUIROR
Quality Dining, Inc. Quality Dining, Inc./Management
Mimi's Cafe Bob Evans Farm, Inc.
Garden Fresh Restaurants Fairmont Capital, Inc.
Ninety Nine Restaurant & Pub O'Charley's, Inc.
Tumbleweed, Inc. Private Group
Dave & Busters, Inc. Management Group
Morton's Restaurant Group, Inc. Castle Harlan, Inc.
Chart House Enterprise, Inc. Landry's Restaurants, Inc.
Shoney's, Inc. Lone Star Funds
Interfoods of America, Inc. Management
Mexican Restaurants, Inc. Wyndcrest Holdings, Inc.
Santa Barbara Restaurant Group, Inc. CKE Restaurants, Inc.
Panchos Mexican Buffet, Inc. Private Group
McCormick & Schmicks Castle Harlan
Vicorp Restaurant BancBoston Capital & Goldner Hawn
--------------------------------------------------------------------------------

In performing its analysis, Houlihan Lokey considered that the merger
and acquisition transaction environment varies over time because of, among other
things, interest rate and equity market fluctuations and industry results and
growth expectations. No company or transaction used in the analysis was directly
comparable to us. All fifteen acquisitions reviewed represent controlling
interest purchases. Accordingly, Houlihan Lokey reviewed these transactions to
understand the range of multiples of EBITDA and EBITDAR paid for companies in
the restaurant industry.

Houlihan Lokey derived enterprise value indications of the Company by
applying selected EBITDA and EBITDAR multiples to certain adjusted operating
results for the last twelve months ended October 24, 2004. Based on the above,
the resulting indications of the enterprise value of our operations ranged from
approximately $8.1 million to $9.0 million.

After determining our enterprise value, Houlihan Lokey made certain
adjustments to determine our equity value including adjustments to reflect
current holdings of cash, cash equivalents, equity in certain life insurance
policies, equity in a liquor license at Escondido's Monmouth Mall and the fair
market value of certain nonoperating real

property we own and subtracting debt obligations, as applicable for each
valuation indication. The resulting indicated range from the comparable
transaction methodology was $3.06 per share to $3.29 per share.

BOOK VALUE ANALYSIS: Houlihan Lokey also took into account that the
consideration being offered in the Merger is less than the net book value per
share and net tangible book value per share of our Common Stock as of October
24, 2004. Houlihan Lokey noted that the net book value per share and net
tangible book value per share of our Common Stock do not take into account:

o the passage of time since such book values were recorded on
our financial statements and any appreciation or
depreciation of asset values that may have occurred since
recordation;

o the inherent uncertainty and contingencies associated with
realizing those values, many of which are beyond our
control;

o the extended time that it would typically take for us to
actually sell our properties and related assets, if at all,
in order to realize any such value; or

o the transaction costs which we would incur in order to
realize any such value.

Houlihan Lokey also performed an additional financial analysis of our
book value to determine an estimation of our value if we were to liquidate.
Houlihan Lokey performed this analysis to assess for its own internal purposes
whether such an analysis contradicted its market multiple and comparable merger
analyses and not as a methodology on which its opinion was rendered. Houlihan
Lokey's financial analysis assumed an orderly liquidation based on adjusted book
values of our assets and satisfaction of our liabilities Houlihan Lokey did not
make, and we did not obtain, any independent appraisal of any of our properties
or assets. With the exception of our property, plant and equipment, Houlihan
Lokey relied on the book value of our assets discounted at customary recovery
rates. With respect to the real estate and related restaurants and equipment,
Houlihan Lokey relied on (i) market rents quoted by local real estate agents for
comparable restaurant space, assuming triple-net lease terms, multiplied by
regional capitalization rates from a national real-estate publication, (ii)
comparable real estate listings, (iii) estimated recovery rates based on
discussions with liquidation professionals, and (iv) tax assessments. Houlihan
Lokey assumed a nominal value with respect to our equipment. Additionally, they
deducted transaction costs estimated at 5.0% of gross proceeds from asset sales
to account for expenses (in other words, real estate commissions and other
professional fees) typically incurred in an orderly liquidation.

This financial analysis is qualified by the limitations identified
above. Therefore, there can be no assurance that the assumptions and estimates
employed in performing this financial analysis resulted in an accurate estimate
of the proceeds that would be realized were we to undergo an actual liquidation.
This financial analysis does not purport to be a valuation of our assets and is
not necessarily indicative of the values that may be realized

in an actual liquidation. Actual valuations realized in a liquidation could vary
materially from the estimates provided above.

Houlihan Lokey also took into account that, in the Merger Agreement,
Acquisition Co. represented to us that Acquisition Co. did not have any present
plans for and was not presently considering any proposal that contemplates or
would result in an extraordinary corporate transaction after the Merger
involving our corporate structure, business or assets such as a merger,
reorganization, liquidation, relocation or sale or transfer of a material amount
of assets.

CONCLUSION

Houlihan Lokey delivered its written opinion dated December 16, 2004 to
the Special Committee stating that, as of that date, based upon the assumptions
made, matters considered and limitations on the review described in its written
opinion, the consideration per share to be received by the Public Stockholders
in the Merger is fair to them from a financial point of view.

Houlihan Lokey's written opinion is based on the business, economic,
market and other conditions, as they existed as of December 16, 2004. In
rendering its written opinion, Houlihan Lokey relied upon and assumed, without
independent verification that the accuracy and completeness of the financial and
other information provided to Houlihan Lokey by our management was reasonably
prepared and reflects the best currently available estimates of our financial
results and condition; and that no material changes have occurred in the
information reviewed between the date the information was provided and the date
of Houlihan Lokey's written opinion. Houlihan Lokey did not independently verify
the accuracy or completeness of the information supplied to it with respect to
us and does not assume responsibility for it. Houlihan Lokey did not make any
independent appraisal of our specific properties, assets or liabilities.

Houlihan Lokey was not asked to opine and does not express any opinion
as to: (i) the tax or legal consequences of the Merger; or (ii) the fairness of
any aspect of the Merger not expressly addressed in its opinion.

Houlihan Lokey's written opinion neither addresses any other aspect of
the Merger, nor the relative merits of the Merger as compared to any alternative
business strategies that might exist for the Company or the effect of any other
transaction in which we might engage; nor does it constitute a recommendation to
any stockholder as to how they should vote or otherwise act (including with
respect to dissenting) at the Special Meeting. Houlihan Lokey has no obligation
to update its written opinion. Houlihan Lokey did not, and was not requested by
us or any other person to solicit third party indications of interest in
acquiring all or any part of the Company or to make any recommendations as to
the form or amount of consideration to be paid in connection with the
transaction. Furthermore, at the request of the Special Committee, Houlihan
Lokey neither negotiated any portion of the Merger nor advised the Special
Committee with respect to alternatives to it. Other than as described in the
preceding sentences, the Special Committee gave no other instructions to
Houlihan Lokey including with respect to the preparation of its report.

The summary set forth above describes the material points of more
detailed analyses performed by Houlihan Lokey in arriving at its written
opinion. The preparation of a fairness opinion is a complex analytical process
involving various determinations as to the most appropriate and relevant methods
of financial analysis and application of those methods to the particular
circumstances and is therefore not readily susceptible to summary description.
In arriving at its opinion, Houlihan Lokey made qualitative judgments as to the
significance and relevance of each analysis and factor. Accordingly, Houlihan
Lokey believes that its analyses and summary set forth herein must be considered
as a whole and that selecting portions of its analyses, without considering all
analyses and factors, or portions of this summary, could create an incomplete
and/or inaccurate view of the processes underlying the analyses set forth in its
opinion. In its analysis, Houlihan Lokey made numerous assumptions with respect
to us, the Merger, industry performance, general business, economic, market and
financial conditions and other matters, many of which are beyond the control of
the respective entities. The estimates contained in such analyses are not
necessarily indicative of actual values or predictive of future results or
values, which may be more or less favorable than suggested by such analyses.
Additionally, analyses relating to the value of our business or securities are
not appraisals. Accordingly, such analyses and estimates are inherently subject
to substantial uncertainty. Furthermore, Houlihan Lokey assumed that the Merger
would be consummated on the terms described in the Merger Agreement.

The full text of Houlihan Lokey's written opinion, which describes,
among other things, the assumptions made, general procedures followed, matters
considered and limitations on the review undertaken by Houlihan Lokey in
rendering its written opinion is attached hereto as Appendix B and is
incorporated herein by reference. The summary of Houlihan Lokey's written
opinion in this Proxy Statement is qualified by reference to the full text of
Houlihan Lokey's written opinion. You are urged to read Houlihan Lokey's written
opinion in its entirety.

Under our engagement letter with Houlihan Lokey, we have agreed to pay
Houlihan Lokey an aggregate fee of $225,000 as compensation for its services in
connection with the Merger, as well as reimbursement of its out-of-pocket
expenses incurred in connection with its engagement. No portion of Houlihan
Lokey's fee is contingent upon the successful completion of the Merger, any
other related transaction, or the conclusions reached in Houlihan Lokey's
written opinion. We also agreed to indemnify Houlihan Lokey and related persons
against certain liabilities, including liabilities under federal securities laws
that arise out of the engagement of Houlihan Lokey, or, if such indemnification
is not available to Houlihan Lokey or insufficient to hold it harmless, we have
agreed to contribute to the amount paid or payable by Houlihan Lokey as a result
of such liabilities in proportion to the relative benefits received by and the
fault of the parties, with the amount of Houlihan Lokey's contribution being
capped at its fee amount.

CERTAIN EFFECTS OF THE MERGER

Assuming approval and adoption of the Merger Agreement and subject to
the fulfillment or waiver of certain conditions, Acquisition Co. will be merged
with and into

the Company and the Company will continue to operate its current business as the
surviving corporation of the Merger. Each share of Common Stock (other than
shares owned by the Continuing Stockholders or owned by Dissenting Stockholders)
will be canceled and converted into the right to receive a cash payment of $3.12
without interest, as a result of the Merger. The shares of Common Stock owned by
the Continuing Stockholders will be transferred to Acquisition Co. prior to the
Merger, and canceled as a result of the Merger as will their shares of
Acquisition Co. stock. In exchange, each Continuing Stockholder will receive one
"new" share of Common Stock for each "old" share of Common Stock he owned prior
to the Merger. Each "new" share of Common Stock will be identical to each "old"
share of Common Stock. As a result, upon consummation of the Merger, the
Continuing Stockholders will own all of the outstanding Common Stock.

If the Merger is consummated, the Public Stockholders will no longer be
stockholders of, and will no longer have any equity or other interest in the
Company. As a result, they will be unable to benefit from future growth or
earnings of the Company, if any, or any increase in the market price for their
Common Stock that might have occurred if the Merger had not been consummated.
Conversely, the Public Stockholders will no longer bear the risk of any
decreases in the value of the Company or in the market price for their Common
Stock that might have occurred had the Merger not been consummated.

The Company is currently subject to the reporting requirements imposed
by the Exchange Act and its Common Stock is currently listed for trading on the
OTC Bulletin Board(R) under the symbol "CHEF". After consummation of the Merger,
the shares will be delisted from trading on the OTC Bulletin Board(R). In
addition, based upon the reduced number of record holders of its Common Stock
after the Merger, the Company intends to file the necessary certification with
the Securities and Exchange Commission to terminate the registration of its
Common Stock under the Exchange Act thereby suspending its duty to comply with
the Exchange Act reporting requirements.

Upon consummation of the Merger, the Company's Board of Directors will
be reduced from eight to six directors. The following five persons, all of whom
currently serve as directors of the Company, namely Anthony M. Lombardi, Joseph
S. Lombardi, Michael F. Lombardi, Robert M. Lombardi and Stephen F. Lombardi,
and Matthew H. Maschler who will be added to the Board after the Merger, will
then comprise all of the directors of the Company and will serve until such time
as their successors are elected and qualified. The current officers of the
Company will continue to serve in such capacities as officers of the surviving
corporation. See Information About the Company - Management" herein. Matthew H.
Maschler is and for more than the past five years has been principally engaged
as a practicing attorney in New Jersey.

The effect of the privatization on the Company is that it will no
longer be publicly owned and will no longer be required to file reports under
the Exchange Act or pay the costs associated with being publicly owned. These
costs aggregated approximately $160,000 in fiscal 2004 for legal, auditing and
transfer agent fees and are expected to

increase by at least $25,000 in fiscal 2005 (without giving effect to the costs
of this transaction). The increasing cost of remaining a publicly traded company
is expected to dramatically increase in fiscal 2007 (by at least $150,000) due
to requirements of the Sarbanes-Oxley Act of 2002 and the rules and regulations
of the Securities and Exchange Commission. Pursuant to the Commission's rules
and regulations, the Company will be required in fiscal 2007 to retain an
outside consulting firm to design a system of internal controls in compliance
with Section 404 of the Sarbanes-Oxley Act for use by management. The design of
the system will account for the bulk of such increase in costs. The elimination
of the costs of being publicly owned (estimated at $335,000 or more in fiscal
2007) is an obvious cost benefit to the Company. The effect of the privatization
could have a detrimental effect on the Company as its securities will no longer
be publicly traded and thus will be less likely to be an acceptable currency to
third parties if the Company wanted to use its Common Stock to purchase assets
or restaurants. This detrimental effect cannot be quantified.

If the privatization is completed, the Continuing Stockholders will own
100% of the Common Stock and thus will have a 100% ownership in the Company's
future growth and future net earnings (if any). In fiscal 2004 and for the nine
month period ended October 24, 2004, the Company realized net income of $38,997
($.01 per share) and $636,142 ($.16 per share) respectively. Due to seasonality
factors, the Company traditionally incurs losses in the fourth quarter of each
fiscal year. In the fourth quarter of fiscal 2004 (the three month period ended
January 25, 2004), the Company incurred a net loss of $182,902 ($.05 per share).

At October 24, 2004, the Company had an aggregate net book value of
$15,351,288 ($3.91 per share of Common Stock). At that date, the Continuing
Stockholders owned approximately 66% of the Common Stock and thus could be
deemed to own approximately $10,131,850 of the aggregate net book value. If the
privatization transaction is completed, the Continuing Stockholders will have
paid approximately $4,300,000 to fund the "buy-out" and will own 100% of the
Company. As a result, the Continuing Stockholders may be deemed to have acquired
the remaining $5,219,438 of the Company's aggregate net book value deemed
attributable to the ownership of the Public Stockholders for an investment of
approximately $4,300,000 and may be deemed to have benefited by approximately
$919,438 or 21% on their investment.

The Company's net tangible book value at October 24, 2004 aggregated
$14,481,045 ($3.69 per share of Common Stock). At that date, the Continuing
Stockholders owned approximately 66% of the Common Stock and could be deemed to
own approximately $9,557,490 of the aggregate net tangible book value. If the
privatization transaction is completed, the Continuing Stockholders will have
paid approximately $4,300,000 to fund the "buy-out" and will own 100% of the
Company. The Continuing Stockholders may be deemed to have acquired the
remaining $4,923,555 of the Company's aggregate net tangible book value deemed
attributable to ownership of the Public Stockholders for an investment of
approximately $4,300,000 and may be deemed to have benefited by approximately
$624,000 or 15% on their investment.

The following table reflects the effect of the Merger by percentage and
by dollar amount, on the interest of each Continuing Stockholder in the
Company's net earnings for the periods indicated.

Interest in Interest in
Percentage Interest Net Earnings Net earnings
Stockholders Pre-Merger Post-Merger Fiscal Year Ended 1/25/04 Three Quarters Ended 10/24/04
------------ ---------- ----------- ----------------------------- -----------------------------
Pre-Merger Post-Merger Pre-merger Post-merger
---------- ----------- ---------- -----------

Anthony M. Lombardi 2.8% 4.3% $1,092 $1,661 $17,812 $27,098
Joseph S. Lombardi 15.2% 23.0% 5,928 8,959 96,694 146,140
Michael F. Lombardi 4.4% 6.6% 1,716 2,565 27,990 41,843
Robert M. Lombardi 34.0% 51.3% 13,259 19,991 216,288 326,105
Stephen F. Lombardi .8% 1.2% 312 464 5,089 7,568
Lombardi & Lombardi, P. A. 1.2% 1.9% 468 733 7,634 11,962
Lombardi & Lombardi, P. A.
Defined Benefit
Pension Plan 2.8% 4.3% 1,092 1,671 17,812 27,261
Lee Maschler 2.5% 3.8% 975 1,476 15,904 24,082
Matthew H. Maschler 2.5% 3.8% 975 1,476 15,904 24,082
------ ------ ------- ------- -------- --------
Totals 66% 100% $25,738 $38,997 $419,854 $636,142

The following table reflects the effect of the Merger by percentage and
by dollar amount, on the interest of each Continuing Stockholder in the
Company's net book value and net tangible book value at October 24, 2004.

Interest in Interest in Net Tangible
Percentage Interest Net Book Value Book Value
Stockholders Pre-Merger Post-Merger Fiscal Year Ended 1/25/04 Three Quarters Ended 10/24/04
---------- ----------- ---------------------------- -----------------------------
Pre-Merger Post-Merger Pre-Merger Post-Merger
---------- ----------- ---------- -----------

Anthony M. Lombardi 2.8% 4.3% $429,836 $653,922 $405,469 $616,852
Joseph S. Lombardi 15.2% 23.0% 2,333,396 3,526,630 2,201,119 3,326,710
Michael F. Lombardi 4.4% 6.6% 675,457 1,009,747 637,166 952,506
Robert M. Lombardi 34.0% 51.3% 5,219,438 7,869,530 4,923,555 7,423,418
Stephen F. Lombardi .8% 1.2% 122,810 182,631 115,848 172,278
Lombardi & Lombardi, P. A. 1.2% 1.9% 184,215 288,666 173,773 272,302
Lombardi & Lombardi, P. A.
Defined Benefit
Pension Plan 2.8% 4.3% 429,836 657,852 405,469 620,559
Lee Maschler 2.5% 3.8% 383,782 581,155 362,026 548,210
Matthew H. Maschler 2.5% 3.8% 383,782 581,155 362,026 548,210
------ ------ ----------- ----------- ---------- -----------
Totals 66% 100% $10,131,850 $15,351,288 $9,557,490 $14,481,045
Per Share $3.91 $5.89 $3.69 $5.56

The privatization of the Company, by eliminating the public market for
the Common Stock, will have a detrimental effect on the Continuing Stockholders
with respect to the liquidity of their investment in the Company. The absence of
a public market for the Common Stock will have an adverse effect on the ability
of the Continuing Stockholders to sell a portion of their investment in the
Company. The extent of this detrimental effect cannot be quantified.

The Board of Directors and the Continuing Stockholders believe that the
payment of $3.12 per share to the Public Stockholders in connection with the
Merger represents a substantial benefit to the Public Stockholders. They note
that the last sale price for the Common Stock in the over-the-counter market on
the last trading day on which a last sale price was available immediately
preceding the public announcement of the original $1.75 purchase proposal, was
$1.45 per share. The $3.12 per share "buy-out" price represents a premium of
approximately 115% over the $1.45 price. Furthermore, the relatively light
trading volume for the Common Stock in the over-the-counter market in the past
four years indicates a lack of liquidity for the Common Stock raising questions
as to whether any significant position in the Common Stock could be sold in the
over-the counter market at the prevailing market prices existing in the three
years prior to the public announcement of the $1.75 purchase proposal. The Board
and the Continuing Stockholders believe that any significant sales of the Common
Stock in the over-the-counter market would have the effect of further reducing
the market price for the Common Stock. See "Reasons For and Recommendation of
the Special Committee and the Board of Directors" herein as to the reasons why
the Special Committee and the Board of Directors have unanimously determined
that the Merger Agreement and the Merger are fair to and in the best interests
of the Public Stockholders.

The proposed Merger transaction also entails certain detriments to the
Public Stockholders. Upon completion of the Merger, the Company will no longer
be a public company and the Common Stock will no longer trade in the over-the
counter market. To their detriment, the Public Stockholders will no longer have
any interest in the Company's assets or earnings and will be precluded from the
opportunity to participate in any future growth of the Company. In fiscal 2004
and for the nine month period ended October 24, 2004, the Company realized net
income of $38,997 ($.01 per share) and $636,142 ($.16 per share) respectively.
In addition, to the detriment of the Public Stockholders, the $3.12 per share
"buy-out" payment represents a 20% discount from the Company's $3.91 net book
value per share at October 24, 2004 and a 15% discount from the Company's $3.69
net tangible book value per share at that date. Also to their detriment, the
Public Stockholders who currently own approximately 34% of the outstanding
Common Stock, will own no shares of the Common Stock after the Merger.

See "The Merger Agreement and the Merger-Federal Income Tax
Consequences" herein as to the federal income tax consequences of the Merger to
the Company, the Continuing Stockholders and the Public Stockholders.

OPERATION OF THE COMPANY AFTER THE MERGER

Following consummation of the Merger, it is anticipated that the
business and operations of the Company, as the surviving corporation of the
Merger, will continue to be conducted substantially in the same manner as they
are now being conducted. The Company's management contemplates that the Company
will continue to operate its six New Jersey and three Florida restaurants at
their present locations under their current names. See "Information About the
Company".

Neither the Company nor the Continuing Stockholders have any present
plans for or are presently considering any proposals that contemplate or would
result in an extraordinary corporate transaction after the Merger involving the
Company's corporate structure, business or assets such as a merger,
reorganization, liquidation, relocation or closing of existing restaurants or
opening of additional restaurants, or sale or transfer of a material amount of
assets. However, management will continue to evaluate the Company's business and
operations after the Merger and may develop new proposals which it considers to
be in the best interests of the Company and its then stockholders.

OPERATION OF THE COMPANY IF THE MERGER IS NOT CONSUMMATED

If the Merger is not consummated for any reason, it is anticipated that
the Company's business and operations will continue to be conducted by the
Company's current management, subject to the direction of the Board of
Directors, substantially in the same manner as they are currently being
conducted. No other transaction is currently being considered by management as
an alternative to the Merger.

If the Merger is not consummated, the Company may, from time to time,
repurchase outstanding shares of its Common Stock on terms more or less
favorable to the Public Stockholders than the terms of the Merger, or offer to
sell shares of its Common Stock, from time to time, in each case subject to
availability and at prices it deems acceptable, pursuant to open market or
privately negotiated transactions, a merger transaction, a tender offer or
otherwise.

Consummation of the Merger is subject to various conditions more fully
described herein under the caption "The Merger Agreement and the Merger"
including the condition that stockholders shall not have exercised appraisal
rights under the Delaware Law with respect to more than 10% of the outstanding
shares of Common Stock (392,610 shares). Accordingly, even if the requisite
stockholder approval is obtained, there can be no assurance that the Merger will
be consummated.

INTERESTS OF CERTAIN PERSONS IN THE MERGER

Actual or Potential Conflicts of Interest - In considering the
recommendations of the Special Committee and the Board of Directors with respect
to the Merger, stockholders should be aware that members of the Board of
Directors, including members of the Special Committee, have certain interests in
the Merger as well as certain relationships, including those referred to below,
that can be considered as giving rise to divided interests in considering the
Merger. The members of the Special Committee and the Board of Directors were
aware of these potential or actual conflicts of interest and considered them in
addition to other factors before concluding to recommend the Merger to
stockholders.

Directorships and Officerships - The Company's Board of Directors
currently consists of the following eight persons, namely the five Lombardi
Brothers (Anthony M., Joseph S., Michael F., Robert M. and Stephen F.), and
Nicholas B. Boxter, Kenneth

Cubelli and Raymond Dademo. Messrs. Boxter, Cubelli and Dademo also comprise the
three members of the Special Committee. Robert M. Lombardi also serves as
Chairman of the Board and President, and Michael F. Lombardi serves as Secretary
of the Company. Assuming the Merger is consummated, the three members of the
Special Committee will resign from their positions as directors and the Board of
Directors will then consist of the five Lombardi Brothers and Matthew H.
Maschler who will be added to the Board after the Merger.

Certain relationships between the members of the Special Committee and
the Lombardi Brothers - The three members of the Special Committee have certain
relationships with the Lombardi Brothers. The Lombardi Brothers' mother, who
passed away in 2003, was the sister of Raymond L. Dademo's mother. Kenneth
Cubelli's wife and Joseph S. Lombardi's wife are sisters. Although Nicholas B.
Boxter has no family relationship with the Lombardi Brothers, he has in the past
and will continue to render accounting services after the Merger to the Lombardi
Brothers and their affiliated entities. See "Stock Transactions" as to
transactions in the Company's Common Stock by members of the Board of Directors
(including members of the Special Committee) since the beginning of the
Company's 2003 fiscal year and by the two Maschler Brothers since becoming
affiliates of the Lombardi Group.

Stock Ownership - The following table sets forth (a) the number of
shares of the Company's Common Stock owned by each of the Company's eight
directors, by the law firm of Lombardi & Lombardi, P.A., by the law firm's
Defined Benefit Pension Plan and by the Maschler Brothers, as of the February
25, 2005 Record Date; (b) the percentage such shares comprise of the total
outstanding shares of Common Stock as of the Record Date; (c) the number of
shares of Common Stock that will be beneficially owned by each of the eight
individuals, the law firm, its Pension Plan and the Maschler Group after the
Merger (assuming it is consummated) and (d) the percentage such shares will
constitute of the total outstanding shares of Common Stock after the Merger.

Owned Owned
as of the after the
Record Date Merger
--------------------- ----------------------
Name Shares Percentage Shares Percentage
---- ------ ---------- ------ ----------

Nicholas B. Boxter - - - -
Kenneth Cubelli 100,000 2.5% - (a) - (a)
Raymond L. Dademo 2,000 -- - (b) - (b)
Anthony M. Lombardi 111,001 2.8% 111,001 4.3%
Joseph S. Lombardi 598,633 15.2% 598,633 23.0%
Michael F. Lombardi 171,401 (c) 4.4% 171,401 (c) 8.8% (c)
Robert M. Lombardi 1,335,825 34.0% 1,335,825 51.3%
Stephen F. Lombardi 31,001 (c) 4.4% 31,001 (c) 1.2% (c)
Lombardi & Lombardi, P.A. 49,000 (c) 1.2% 49,000 (c) 1.9%
Lombardi & Lombardi, P.A. 111,668 (c) 2.8% 111,668 (c) 4.3%
Defined Benefit
Pension Plan
Lee Maschler 98,464 2.5% 98,464 3.8%
Matthew H. Maschler 98,464 2.5% 98,464 3.8%

(a) If the Merger is consummated, Dr. Cubelli's stock will be canceled and
converted into the right to receive a cash payment of $3.12 per share.

(b) If the Merger is consummated, Mr. Dademo's stock will be canceled and
converted into the right to receive a cash payment of $3.12 per share.

(c) Michael F. Lombardi and Stephen F. Lombardi each has voting and dispositive
power with respect to all 49,000 shares owned by Lombardi & Lombardi, P.A.
and with respect to all 111,668 shares owned by the Lombardi & Lombardi,
P.A. Defined Benefit Plan.

The Lombardi Group and the Maschler Group will each own the identical
percentages of the capital stock of Acquisition Co. as they will own in the
Company as reflected in the above table if the Merger is consummated. Prior to
the Merger, the Continuing Stockholders will transfer all of their shares of
Common Stock to Acquisition Co. Upon consummation of the Merger, Acquisition Co.
will be merged into the Company with the Company being the surviving
corporation. As a result of the Merger, the shares of Common Stock owned by the
Continuing Stockholders will be canceled as will their shares of Acquisition Co.
stock and in exchange, each Continuing Stockholder will receive one "new" share
of Common Stock for each "old" share of Common Stock owned immediately prior to
the Merger. Each "new" share of Common Stock will be identical to each "old"
share of Common Stock. As a result, upon consummation of the Merger, the
Continuing Stockholders will own all of the Company's outstanding Common Stock.

Stock Transactions - Since January 28, 2002 (the commencement of the
Company's 2003 fiscal year), through the date of this Proxy Statement, certain
of the Continuing Stockholders (and one member of the Special Committee), while
affiliates of the Company, engaged in certain transactions in the Common Stock,
as follows:

o Kenneth Cubelli - On July 23, 2002, Dr. Cubelli acquired 100,000
shares of Common Stock from Joseph S. Lombardi as consideration for
cancellation of a $250,000 loan previously extended by Dr. Cubelli to
Joseph S. Lombardi.

o Joseph S. Lombardi - In February 2002, Joseph S. Lombardi purchased an
aggregate 3,000 shares of Common Stock in open market purchases at
prices ranging from $1.99 to $2.30 per share.

- In March 2002, Joseph S. Lombardi purchased 1,000 shares of
Common Stock in an open market purchase at $1.50 per share.

- On July 23, 2002, Joseph S. Lombardi transferred 100,000
shares of Common Stock to Kenneth Cubelli as consideration
for cancellation of a $250,000 loan previously extended by
Dr. Cubelli to Joseph S. Lombardi.

- On March 25, 2003, Joseph S. Lombardi purchased 12,000
shares of Common Stock in an open market purchase at $1.35
per share.

- In view of the fact that Joseph S. Lombardi's purchases of
an aggregate 4,000 shares of Common Stock in February and
March 2002 occurred within six months of his July 2002
transfer of 100,000 shares to Dr. Cubelli and therefore
resulted in a matching short-swing profit of $1,990, Joseph
S. Lombardi reimbursed the Company for the $1,990
short-swing profit.

o Michael F. Lombardi - In March 2002, Michael F. Lombardi purchased 500
shares of Common Stock in an open market purchase at $1.45 per share.

o Robert M. Lombardi - In February 2002, Robert M. Lombardi purchased
600 shares of Common Stock in an open market purchase at $2.00 per
share.

- In September 2002, Robert M. Lombardi purchased an aggregate
2,500 shares of Common Stock in open market purchases at
$1.40 per share.

o On November 24, 2004, Lee Maschler and Matthew H. Maschler each
purchased 32,823 shares of Common Stock in a private purchase from
their brother Erik Maschler at a purchase price of $3.03 per share.

Restaurant Transactions between the Company and the Lombardi Group - At
the time of the acquisition in May 1999 of voting control of the Company by the
Lombardi Group, the Company was operating seven free-standing seafood
restaurants in New Jersey (four) and in Florida (three) and one Mexican theme
restaurant located in a New Jersey shopping mall. In February 2000, the Company
commenced the operation of an existing restaurant in Freehold, New Jersey which
was being operated by Moore's Inn, Inc., an entity affiliated with the Lombardi
Group, under the name "Moore's Inn." The Company changed the name of the
restaurant to "Moore's Tavern and Restaurant" and began restaurant operations
featuring an eclectic American food menu pursuant to a lease from Moore's Realty
Associates, a New Jersey partnership ("Moore's Realty") whose partners are
members of the Lombardi Group and other Lombardi family members.

The lease with Moore's Realty with respect to Moore's Tavern and
Restaurant, currently expires in February 2007 and contains three consecutive
five-year renewals at the Company's option. It provides for a minimum annual
rental of $90,000 during each year through February 2007; increasing to $100,000
during each year of the first five-year renewal period; further increasing to
$112,500 during each year of the second five-year renewal period; and finally
increasing to $125,500 during each year of the third five-year renewal period.
The Company is also required to pay as additional rent in each year, an amount
equal to (i) 6% of the total gross sales of food and beverages at the restaurant
for the year (excluding taxes and gratuities) (the "gross annual rental") less
(ii) the minimum annual rental for that year. The lease is a "net net" lease so
that the Company pays the real estate taxes, insurance and heating and air
conditioning costs with respect to the restaurant. Moore's Realty can terminate
the lease upon twelve months prior written notice if, for the preceding year,
the gross annual rental did not exceed the minimum annual rental for that year.

In connection with the lease, the Company purchased a New Jersey state
liquor license from Moore's Inn, Inc. for $350,000 and agreed to sell the
license back to the Seller or to Moore's Realty upon termination of the lease
for the same $350,000. In addition, the Company purchased the existing
furniture, fixtures and equipment at Moore's Inn from Moore's Inn, Inc. for
$250,000 and agreed to leave them at the premises upon the termination of the
lease.

In January 2002, the Company opened a Mexican theme restaurant under
the name "Escondido's Mexican Restaurant" in a free-standing vacant structure
next to Moore's Tavern and Restaurant in Freehold, New Jersey pursuant to a
second lease with Moore's Realty. The terms of this second lease are identical
to the terms of the lease for Moore's Tavern and Restaurant. It provides for
identical renewal options, minimum annual rental payments and additional rent.

The Company expended approximately $1,300,000 to renovate, decorate and
equip this restaurant. The Company is permitted to use the same liquor license
at this restaurant that it uses at Moore's Tavern and Restaurant.

The Company also leases an adjacent pad site from Moore's Realty for
use as a parking lot for its two Freehold, New Jersey restaurants. The site can
accommodate approximately sixty five (65) automobiles. The lease, executed in
September 2002, expires in February 2007 and contains provisions for three
consecutive five-year renewals at the Company's option. Either party has the
right to terminate the lease upon twelve months prior written notice after
February 2007 provided that if Moore's Realty elects to terminate the lease, it
must offer the Company the right to lease an adjoining paved parking area
sufficient to park at least fifty (50) automobiles on terms and conditions
similar to those contained in the lease.

The terms of the lease for the pad site are identical to the terms of
the lease for the two Freehold, New Jersey restaurants except that the minimum
annual rental during the initial term is $40,000; increasing to $44,000 during
each year of the first five-year renewal period; to $50,000 during each year of
the second five-year renewal period; and to $55,000 during each year of the
third five-year renewal period and that the additional rent in each year is
equal to 1% of the total gross food sales and beverages (excluding taxes and
gratuities) from the two Freehold, New Jersey restaurants in that year less the
minimum annual rental for that year.

During fiscal 2003, the Company installed curbing, paving and other
improvements to the pad site at a cost of approximately $134,000. Moore's Realty
has agreed to reimburse the Company's costs by applying credits against the
Company's rent obligations under the lease.

The three Freehold, New Jersey lease transactions and the Company's
purchases of the liquor license and the existing furniture, fixtures and
equipment at Moore's Inn cannot be deemed "arms length" transactions due to the
interests in each transaction of the Lombardi Group and members of the Lombardi
family. At the time of each

transaction, the Lombardi Group was in control of the Company through its
ownership of a majority of the Company's outstanding Common Stock and the fact
that the Lombardi Brothers comprised five of the eight directors of the Company.
Each transaction was negotiated on behalf of the Company by Anthony C. Papalia,
its then president and chief executive officer. Mr. Papalia and the non-Lombardi
Brother directors concluded that each of the transactions were fair and in the
best interests of the Company.

Regardless of whether the Merger is consummated, management intends
that the Company will continue to operate Moore's Tavern and Restaurant and
Escondido's Mexican Restaurant.

COMMON STOCK - MARKET PRICES, TRADING VOLUME, STOCK REPURCHASES, DIVIDENDS,
BOOK VALUE

Three of the factors cited by the Special Committee and by the Board of
Directors in supporting their recommendation of the Merger terms to the Public
Stockholders were;

o the relatively low market price for the Common Stock in the
over-the-counter market over the past three years

o the lack of liquidity in the market for the Common Stock as reflected
by the low average trading volume in the stock in the over-the-counter
market over the past three years

o the lack of positive impact on the market price for the Common Stock
following the Company's various stock repurchases

Market prices and trading volume - The Common Stock currently trades in
the over-the-counter market and is quoted on the OTC Bulletin Board(R) under the
symbol "CHEF". The following chart sets forth the range of high and low closing
bid price quotations and the trading volume for the Common Stock in the
over-the-counter market for the periods indicated, as obtained from Pink Sheets
LLC.

The price quotations represent prices between dealers and do not
include retail mark-ups, mark-downs or commissions. They do not necessarily
represent actual transactions.

Bid Prices Total Share Trading
---------- Volume during the Quarterly Period
High Low in the Over-the-counter Market
---- --- ----------------------------------
Fiscal 2002
QUARTER ENDED
April 29, 2001 $ .90 $ .70 103,900
July 29, 2001 1.37 .81 180,900
October 28, 2001 1.41 1.07 45,400
January 27, 2002 2.15 1.15 148,900

Fiscal 2003
QUARTER ENDED
April 28, 2002 $2.10 $1.42 87,400
July 28, 2002 1.72 1.42 76,900
October 27, 2002 1.46 1.33 58,700
January 26, 2003 1.50 1.35 288,100

Fiscal 2004
QUARTER ENDED
April 27, 2003 $1.42 $1.35 187,500
July 27, 2003 1.38 1.35 30,800
October 26, 2003 1.40 1.38 35,600
January 25, 2004 1.85 (a) 1.40 (a) 35,393 (a)

Fiscal 2005
QUARTER ENDED
April 25, 2004 $2.76 (b) $1.55 (b) 49,500 (b)
July 25, 2004 3.05 (c) 2.76 (c) 91,100 (c)
October 24, 2004 3.05 3.03 184,694

----------
(a) During the quarter (on November 21, 2003), the Company publicly
announced its receipt of the Merger offer from the Lombardi Group offering to
purchase the outstanding Common Stock owned by the Public Stockholders for a
cash purchase price of $1.75 per share.

(b) During the quarter, after publicly announcing on March 8, 2004, the
rejection of the $1.75 per share offered purchase price, the Company, on March
15, 2004, publicly announced the increased offer by the Lombardi Group to a cash
purchase price of $2.50 per share. After publicly announcing on April 19, 2004,
the rejection of the $2.50 per share offered purchase price, the Company, on
April 21, 2004, publicly announced the increased offer by the Lombardi Group to
a cash purchase price of $3.00 per share.

(c) During the quarter (on June 1, 2004), the Company publicly
announced that the Special Committee had advised the Board of Directors that in
the Committee's judgment, the proposed increased purchase price of $3.12 per
share (increased after discussions between counsel for the Special Committee and
counsel for the Lombardi Group), was fair to the Company's Public Stockholders,
and had determined to recommend that the Board accept the proposal.

Stock Repurchases - On June 8, 2000, the Company announced a program
authorized by the Board of Directors to repurchase up to 400,000 shares of its
Common Stock over the following 24 months. In announcing the repurchase program,
the Company stated that the Board of Directors believed that the Company's
Common Stock was undervalued and that repurchases at then market prices could
constitute an appropriate investment for the benefit of the Company's
stockholders. Through the end of fiscal 2002, the Company repurchased an
aggregate 28,191 shares of Common Stock in the over-the-counter market at
prevailing per share market prices ranging from $.73 to $1.20. In addition, on
August 29, 2001, the Company repurchased an aggregate 262,603 shares of Common
Stock from a limited group of unaffiliated stockholders in a block transaction
at a repurchase price of $2.10 per share. The block purchase was also

authorized by the Board. During the third quarter of fiscal 2002 (July 30, 2001
through October 28, 2001) the bid price for the Common Stock in the
over-the-counter market ranged from a high of $1.41 to a low of $1.07 per share.
It was the opinion of the Board that although the repurchase price for the block
transaction was greater than t(he then market price for the Common Stock, the
size of the block and the fact that the per share repurchase price of $2.10 was
substantially below the net tangible per share book value of the Common Stock
(approximately $3.36 net tangible book value per share at July 29, 2001)
rendered the repurchase an appropriate investment beneficial to the Company's
stockholders. No additional share repurchases were made pursuant to the
repurchase program announced on June 8, 2000.

On January 21, 2003, the Company announced that a second share
repurchase program had been authorized by the Board of Directors to repurchase
up to 100,000 shares of its Common Stock over the following twelve months.
During the first quarter of fiscal 2004, the Company repurchased an aggregate
40,000 shares of Common Stock in the over-the-counter market at the then market
price of $1.49 per share. No other repurchases were made pursuant to the second
share repurchase program which has since expired. No further repurchase programs
are currently contemplated (other than the offered payment by the Company of
$3.12 per share to the Public Stockholders if the Merger is approved and
adopted.)

Dividends - The Company has not paid any dividends with respect to its
Common Stock and does not currently anticipate paying any dividends in the
future.

Book Value - One factor which the Special Committee and the Board of
Directors cited as being a negative factor in considering whether the $3.12 per
share cash payment to be offered to the Public Stockholders if the Merger is
effected is fair to the Public Stockholders is the fact that the $3.12 per share
amount was exceeded by the Company's net book value per share.

The following are the net book values per share and net tangible book
values per share of the Common Stock (a) as of April 25, 2004 (the last day of
the Company's fiscal quarter immediately preceding the date on which the Special
Committee determined to recommend acceptance of the $3.12 per share offered
price to the Pubic Stockholders), and (b) as of October 24, 2004 (the last day
of the Company's third quarter of fiscal 2005).

As of Net Book Value Per Share Net Tangible Book Value Per Share
----- ------------------------ ---------------------------------
April 23, 2004 $3.75(a) $3.53(a)
October 24, 2004 $3.91(b) $3.69(b)

(a) Exceeds the $3.12 per share cash price being offered to the Public
Stockholders in connection with the Merger by $.63 per share (net book value)
and by $.41 per share (net tangible book value) or 20% and 13% respectively

(b) Exceeds the $3.12 per share cash price being offered to the Public
Stockholders in connection with the Merger by $.79 per share (net book value)
and by $.57 per share (net tangible book value) or 25% and 18% respectively.

Although management is unable to predict the Company's operating
results in the fourth quarter of fiscal 2005 at this time, the net book value
and the net tangible book value per share of the Common Stock has decreased in
the fourth quarter in each of the Company's last five fiscal years as compared
to the net book value and net tangible book value per share at the end of the
immediately preceding third quarter due to the seasonal nature of the Company's
restaurant business.

Although the Special Committee and the Board of Directors considered
the per share book value to be a negative factor, they concluded that it was
outweighed by the positive factors previously enumerated in determining that the
$3.12 per share price was fair to the Public Stockholders.

INFORMATION ABOUT THE COMPANY

CHEFS INTERNATIONAL, INC. (THE "COMPANY")

The Company was incorporated under the laws of the State of Delaware in
March 1975. The Company is publicly owned and currently files periodic reports
pursuant to Section 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act") with the Securities and Exchange Commission. The Company's Common Stock is
registered pursuant to Section 12(g) of the Exchange Act. The Company's Annual
Report on Form 10-KSB for the year ended January 25, 2004 and its quarterly
report on Form 10-QSB for the quarterly period ended October 24, 2004 as filed
with the Securities and Exchange Commission are included with this mailing and
contain additional information about the Company.

The Company currently operates nine restaurants on a year-round basis.
Seven of the restaurants are free-standing seafood restaurants (four in New
Jersey and three in Florida). The other two restaurants are located in Freehold,
New Jersey. Five of the seafood restaurants are operated under the name "Jack
Baker's Lobster Shanty", one under the name "Baker's Wharfside" and one under
the name "Mr. Manatee's Causal Grille". One of the two restaurants located in
Freehold, New Jersey is a Mexican theme restaurant operated under the name
"Escondido's Mexican Restaurant". The other is an eclectic American food
restaurant operated under the name "Moore's Tavern and Restaurant". The Company
opened its first seafood restaurant in November 1978, "Moore's Tavern and
Restaurant" in February 2000 and its Mexican theme restaurant in January 2002.
See "Special Factors - Interests of Certain Persons in the Merger" as to the
leasing by the Company of the two Freehold, New Jersey restaurant facilities and
a common parking area from an entity affiliated with the Lombardi Brothers.

The Company's principal office is located at 62 Broadway, Point
Pleasant Beach, New Jersey 08742 where its telephone number is (732) 295-0350.

MANAGEMENT

The following eight persons comprise the current Board of Directors of
the Company.

Name Position
---- --------
Robert M. Lombardi (a) Chairman of the Board (c)
Nicholas B. Boxter (b) Director
Kenneth Cubelli(b) Director
Raymond L. Dademo (b) Director
Anthony M. Lombardi (a) Director
Joseph S. Lombardi (a) Director
Michael F. Lombardi (a) Director
Stephen F. Lombardi (a) Director

----------
(a) The five Lombardis are Lombardi Brothers.

(b) Messrs. Boxter, Cubelli and Dademo comprise the Special Committee
appointed by the Board of Directors to review and analyze the Merger proposal
presented by Acquisition Co. and to determine and advise the Board whether in
its judgment, the proposed cash purchase price was fair to the Public
Stockholders. Assuming the Merger is consummated, Messrs. Boxter, Cubelli and
Dademo will resign as directors.

The following is a brief account of the business experience of each
director and executive officer of the Company during the past five years.

Robert M. Lombardi, M.D. is, and for more than the past five years has
been principally engaged as a physician and orthopedic surgeon with the
Edison-Metuchen Orthopedic Group, a medical practice group located in Edison,
New Jersey, where he also serves as a senior officer. He is also an officer of
Moore's Inn, Inc. and a partner in Moore's Realty. See "Special Factors -
Interests of Certain Persons in the Merger."

Nicholas B. Boxter, C.P.A. is, and for more than the past five years
has been principally engaged in the practice of accountancy with his own firm in
Whitehouse, New Jersey.

Kenneth Cubelli, M.D. is, and for more than the past five years has
been principally engaged as a physician and orthopedic surgeon with the Morris
County Orthopedic Group in Denville, New Jersey.

Raymond L. Dademo, Esq. is, and for more than the past five years has
been principally engaged as a practicing attorney with his own law firm in
Brick, New Jersey.

Anthony M. Lombardi, D.D.S. is, and for more than the past five years
has been principally engaged in the practice of dentistry in Edison, New Jersey.
He is also an
50

officer of Moore's Inn, Inc. See "Special Factors - Interests of Certain Persons
in the Merger."

Joseph S. Lombardi, M.D. is, and for more than the past five years has
been principally engaged as a physician and orthopedic surgeon with the
Edison-Metuchen Orthopedic Group, where he is a senior officer. He is also an
officer of Moore's Inn, Inc. and a partner in Moore's Realty. See "Special
Factors - Interests of Certain Persons in the Merger."

Michael F. Lombardi, Esq. is, and for more than the past five years has
been principally engaged as a practicing attorney and a senior officer of
Lombardi & Lombardi, P.A., an Edison, New Jersey law firm. He is also an officer
of Moore's Inn, Inc. and a partner in Moore's Realty. See "Special Factors -
Interests of Certain Persons in the Merger."

Stephen F. Lombardi, Esq. is, and for more than the past five years has
been principally engaged as a practicing attorney and a senior officer of
Lombardi & Lombardi, P.A., an Edison, New Jersey law firm. He is also an officer
of Moore's Inn, Inc. and a partner in Moore's Realty. See "Special Factors -
Interests of Certain Persons in the Merger."

Martin W. Fletcher is not a director. He serves as the Company's Vice
President and Chief Financial Officer. He was employed by the Company as its
controller for more than the past five years and in 2004, was elected as the
Company's chief financial officer. He devotes all of his working time to the
business of the Company.

STOCK OWNERSHIP

The following table sets forth as of February 25, 2005 (the "Record
Date"), the number of shares of the Company's Common Stock beneficially owned
(a) by each of the Company's eight directors; (b) all directors and executive
officers of the Company as a group; and (c) by the Lombardi Group's affiliate,
the Maschler Group. It also sets forth the percentage such shares comprise of
the total outstanding shares of the Company's Common Stock. The Company has no
knowledge of any other individual or "group" as that term is used in Section
13(d)(3)of the Exchange Act, who is the beneficial owner of more than 5% of the
Company's outstanding Common Stock.

Beneficially Owned
at the
Record Date
Name Shares Percentage

Nicholas B. Boxter - -
Kenneth Cubelli 100,000 (a) 2.5%
Raymond L. Dademo 2,000 (b) --
Anthony M. Lombardi* 111,001 2.8%
Joseph S. Lombardi* 598,633 15.2%
Michael F. Lombardi* 251,735 (c) 6.4%
Robert M. Lombardi* 1,335,825 34.0%
Stephen F. Lombardi* 111,335 (c) 2.8%
All executive officers
and directors as a group
(nine persons) 2,510,529 (c) 63.9%
Maschler Brothers* 196,938 (d) 5.0%

----------
*The address for Anthony M. Lombardi, Michael F. Lombardi Stephen F. Lombardi,
Lombardi & Lombardi, P.A. and Lombardi & Lombardi, P.A. Defined Benefit Pension
Plan is 1862 Oak Tree Road, Edison, New Jersey 08818. The address for Joseph S.
Lombardi and Robert M. Lombardi is 10 Parsonage Road, Suite 500, Edison, New
Jersey 08837. The address for the Maschler Brothers, Lee Maschler and Matthew H.
Maschler is 110 Fieldcrest Avenue, Raritan Plaza I, Edison, New Jersey 08837.

(a) If the Merger is consummated, Dr. Cubelli's stock will be canceled and
converted into the right to receive a cash payment of $3.12 per share.

(b) If the Merger is consummated, Mr. Dademo's stock will be canceled and
converted into the right to receive a cash payment of $3.12 per share.

(c) Includes with respect to each of Michael F. Lombardi and Stephen F.
Lombardi, only one-half of the 111,668 shares owned by the Lombardi & Lombardi,
P.A. Defined Benefit Pension Plan and only one-half of the 49,000 shares owned
by the law firm of Lombardi & Lombardi P.A., although each has voting and
dispositive power with respect to all 111,668 shares owned by the Pension Plan
and all 49,000 shares owned by the law firm.

(d) The Maschler Brothers, Lee Maschler and Matthew H. Maschler, each own 98,469
shares of Common Stock. They will be responsible for their proportional share of
Acquisition Co.'s expenses necessary to finance the Merger.

For more information concerning the Company, see "Where You Can Find
More Information".

INFORMATION ABOUT ACQUISITION CO.

Acquisition Co. was incorporated under the laws of the State of
Delaware on November 12, 2003. Acquisition Co. was formed for the sole purpose
of facilitating the Merger. If the Merger Agreement and the Merger is approved
by stockholders and if the Merger is effectuated, Acquisition Co. will merge
into the Company with the Company being the surviving entity. As a newly-formed
corporation, Acquisition Co. has had no operating history. Its only business
activity has been the execution and delivery of the Merger Agreement and
activities relating thereto. It is not anticipated that Acquisition Co. will
conduct any business other than in connection with its formation and
capitalization and the transactions contemplated by the Merger Agreement.

The sole directors of Acquisition Co. are the Lombardi Brothers and
Matthew H. Maschler. The sole stockholders of Acquisition Co. are the Lombardi
Brothers, the law firm of Lombardi & Lombardi, P.A., the Lombardi & Lombardi,
P.A. Pension Plan, and the two Maschler Brothers, all of whom have the same
proportional ownership to each other in Acquisition Co. as they own in the
Company.

Acquisition Co.'s office is located c/o Lombardi & Lombardi, 1862 Oak
Tree Road, Edison, New Jersey 08818 where its telephone number is (732)
906-1500.

CAUTIONARY STATEMENT AND RISKS CONCERNING FORWARD-LOOKING STATEMENTS

Except for historical information, the matters discussed in this Proxy
Statement contain forward-looking statements. These statements include, but are
not limited to: management's beliefs regarding the Company's future operations,
operating results and any plans or objectives of management regarding the future
of the Company.

No assurances can be given that future results or events anticipated by
the forward looking statements will be achieved. Important factors which may
affect the Company's future results include, but are not limited to, changing
market conditions; weather (Florida hurricanes in the third quarter of fiscal
2004 caused the closing of the Company's three Florida restaurants for
approximately ten days in the case of one restaurant, and for approximately two
months and two and one-half months in the case of the other two restaurants);
the state of the economy; substantial increases in insurance costs; the impact
of competition to the Company's restaurants; pricing; and the acceptance of the
Company's food products. In addition, the Company's future performance could be
adversely affected if it is unable to find a satisfactory successor to its
former President and Chief Executive Officer, Anthony C. Papalia, who left the
Company's employ at the end of June 2004. Although Robert M. Lombardi currently
serves in these positions, he is doing so on a part-time basis, his principal
occupation being that of a physician and orthopedic surgeon.

The above discussion together with discussions contained elsewhere in
this Proxy Statement, highlight some of the more important risks to the
Company's future performance identified by its management. Such risks should not
be assumed to be the only risks that can adversely affect the Company's future
performance. Certain risk factors may also be identified by the Company from
time to time in filings with the Securities and Exchange Commission, press
releases and other communications.

In light of the significant uncertainties inherent in the
forward-looking statements included in this Proxy Statement, the inclusion of
such forward-looking statements should not be regarded as a representation by
the Company, its management or any other person that such future objectives will
be achieved.

INFORMATION ABOUT THE SPECIAL MEETING

DATE, TIME AND PLACE OF THE SPECIAL MEETING

This Proxy Statement is being furnished to the holders of the
outstanding shares of the Company's Common Stock as of the Record Date in
connection with the solicitation of proxies by the Board of Directors for use at
the Special Meeting to be held on MONDAY, April 18, 2005, at 9:00 a.m. local
time, at the Company's Jack Baker's Wharfside Restaurant at 101 Channel Drive,
Point Pleasant Beach, New Jersey 08742, and at any adjournments or postponements
thereof.

PURPOSE OF THE SPECIAL MEETING

At the Special Meeting, the Company's stockholders will be asked (i) to
consider and vote upon a proposal to approve and adopt the Merger Agreement and
the transactions contemplated thereby, and (ii) to transact such other business
as may properly come before the Special Meeting. Additional information
concerning the Special Meeting, the Merger and the Merger Agreement is set forth
below, and a copy of the Merger Agreement is attached hereto as Appendix A.

TAKING INTO ACCOUNT THE RECOMMENDATION OF A SPECIAL COMMITTEE APPOINTED
BY THE BOARD OF DIRECTORS, THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE FOR THE APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY.

RECORD DATE; SHARES ENTITLED TO VOTE; QUORUM

The Board of Directors has fixed the close of business on February 25,
2005 as the Record Date for the Special Meeting. Only stockholders of record of
the Company's Common Stock on the Record Date are entitled to notice of and to
vote at the Special Meeting. Stockholders are entitled to one vote for each
share held on the Record Date on matters properly presented at the Special
Meeting. At the close of business on the Record Date, there were 3,926,105
shares of Common Stock issued and outstanding. The holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Special Meeting will
constitute a quorum for the transaction of business at the Special Meeting.

VOTE REQUIRED

Pursuant to Delaware Law, the affirmative vote of not less than a
majority of the outstanding shares of Common Stock whose holders are entitled to
notice of and to vote at the Special Meeting is required to approve and adopt
the Merger Agreement and the Merger. The affirmative vote of a majority of the
issued and outstanding shares of Common Stock is a sufficient vote to approve
and adopt the Merger Agreement and the Merger even if a majority of the shares
of Common Stock owned by the Public Stockholders are not voted in favor of such
approval and adoption. The Continuing Stockholders, who beneficially own an
aggregate 2,605,467 shares (approximately 66% of the outstanding Common Stock),
currently intend to vote to approve and adopt the Merger Agreement and the
Merger as do two members of the Special Committee who beneficially own an
aggregate 102,000 shares (approximately 3%) of the outstanding Common Stock. The
Continuing Stockholders possess sufficient votes to approve and adopt the

Merger Agreement and the Merger even if a majority of the shares owned by the
Public Stockholders are voted or are deemed to be voted against the proposal.
Each share of Common Stock is entitled to one vote on all matters presented to
the Special Meeting. Failure to return an executed proxy card (including broker
non-votes) or to vote in person at the Special Meeting or voting to abstain will
constitute, in effect, a vote against approval and adoption of the Merger
Agreement and the Merger.

VOTING OF PROXIES

All proxies that are properly executed and returned to the Company's
transfer agent, Continental Stock Transfer & Trust Company, 17 Battery Place,
New York, New York 10004 on or before the date of the Special Meeting, and not
subsequently revoked, will be voted at the Special Meeting or any adjournments
or postponements thereof in accordance with any instructions thereon, or, if no
instructions are provided, will be voted FOR approval and adoption of the Merger
Agreement and the transactions contemplated thereby. Any stockholder who has
given a proxy pursuant to this solicitation may revoke it by attending the
Special Meeting and giving oral notice of his or her intention to vote in
person, without compliance with any other formalities. In addition, any proxy
given pursuant to this solicitation may be revoked prior to the Special Meeting
by delivering or mailing an instrument to Chefs International, Inc., 62
Broadway, Point Pleasant Beach, New Jersey 08742; Attention: Corporate
Secretary, revoking it or by delivering or mailing a duly executed proxy bearing
a later date provided that such instrument is received prior to the Special
Meeting. A vote in favor of the Merger Agreement and the transactions
contemplated thereby means that a Stockholder will NOT have the right to dissent
and seek payment of the fair value of his or her shares of Common Stock.

Management of the Company does not know of any matters other than those
set forth herein which may come before the Special Meeting. If any other matters
are properly presented to the Special Meeting for action, it is intended that
the persons named in the enclosed form of proxy and acting thereunder will vote
in accordance with their best judgment on such matters.

PROXY SOLICITATION

The expense of preparing, printing and mailing this Proxy Statement and
the proxies solicited hereby will be borne by the Company. In addition to the
use of the mails, proxies may be solicited by officers and directors and regular
employees of the Company, without additional remuneration, by personal
interviews, written communication, telephone, telegraph or facsimile
transmission. The Company has requested brokerage firms, nominees, custodians
and fiduciaries to forward proxy materials to the beneficial owners of shares of
the Company's Common Stock held of record on the Record Date and will provide
reimbursement for the cost of forwarding the material in accordance with
customary charges.

STOCKHOLDERS SHOULD NOT SEND ANY CERTIFICATES REPRESENTING SHARES OF
COMMON STOCK WITH THEIR PROXY CARD. IF THE MERGER IS CONSUMMATED, THE PROCEDURE
FOR THE EXCHANGE OF CERTIFICATES REPRESENTING SHARES OF COMMON STOCK, WILL BE AS
SET FORTH IN THIS PROXY STATEMENT.

THE MERGER AGREEMENT AND THE MERGER

The following information describes what the Board of Directors and the
Continuing Stockholders believe are the material terms of the Merger Agreement
and the Merger. The description does not purport to be complete. It is qualified
in its entirety by the information contained in the appendices to this Proxy
Statement including the Agreement and Plan of Merger (the "Merger Agreement")
attached as Appendix A. You are urged to carefully read the Merger Agreement and
the other appendices in their entirety.

THE MERGER AGREEMENT

Covenants - The Company has agreed pursuant to the Merger Agreement to
hold a special meeting of its stockholders for the purpose of considering the
approval of the Merger Agreement and the Merger. Under the terms of the Merger
Agreement, the Company has agreed that the Board of Directors will recommend
that Stockholders vote to approve the Merger Agreement and the Merger, unless,
at any time prior to the Special Meeting, the Special Committee determines in
good faith, after consultation with Houlihan Lokey and its counsel, that
modification or withdrawal of its recommendation to the Board is required in
order to satisfy the fiduciary duties of the Special Committee under applicable
law.

The Company has also agreed in the Merger Agreement to prepare and file
a preliminary proxy statement relating to the Merger Agreement and the Merger
with the Securities and Exchange Commission (the "SEC"), to respond to the SEC's
comments with respect thereto, and to cause a definitive proxy statement (this
Proxy Statement) to be mailed to stockholders. Pursuant to the Merger Agreement,
the Company has consulted with Acquisition Co. and the Continuing Stockholders
with respect to such filings. Acquisition Co. and the Continuing Stockholders
have provided the Company with information concerning Acquisition Co. and its
stockholders for inclusion in this Proxy Statement. The Company and Acquisition
Co. and its stockholders have also agreed to file and cause any other person
deemed to be an affiliate to file any required Statement on Schedule 13E-3 under
the Exchange Act with the SEC as well as any required amendments or supplements.

Representation and Warranties - The Merger Agreement contains various
representations and warranties of the Company to Acquisition Co., including with
respect to the following matters: (i) the due organization and valid existence
of the Company and its subsidiaries and similar corporate matters; (ii) the
capitalization of the Company; (iii)

the due authorization, execution and delivery of the Merger Agreement and its
binding effect on the Company; (iv) the lack of conflicts between the Merger
Agreement and the transactions contemplated thereby with the Company's
certificate of incorporation or bylaws, contracts to which it or its
subsidiaries are parties or any law, rule, regulation, order, writ, injunction
or decree binding upon the Company or its subsidiaries; and (v) the approval of
the Merger by the Company's Board of Directors.

The Merger Agreement also contains representations and warranties of
Acquisition Co. to the Company, including with respect to the following matters:
(i) the due organization and valid existence of Acquisition Co. and similar
corporate matters; (ii) the capitalization of Acquisition Co.; (iii) the due
authorization, execution and delivery of the Merger Agreement by Acquisition Co.
and its binding effect; (iv) the lack of conflicts between the Merger Agreement
and the transactions contemplated thereby with the certificate of incorporation
or bylaws of Acquisition Co., contracts to which it is a party or any law, rule,
regulation, order, writ, injunction or decree binding upon Acquisition Co.; (v)
the availability of funds to complete the Merger; and (vi) the lack of any
future planned extraordinary transaction.

Conditions to Consummation of the Merger - The obligations of the
Company and Acquisition Co. to consummate the Merger are subject to the
fulfillment or waiver (if permissible) at or prior to the Effective Time of
certain conditions, including (i) the majority vote of the Stockholders of both
the Company and Acquisition Co., as required by the Delaware Law; (ii) there not
being in effect any statute, rule, regulation, executive order, decree, ruling
or injunction or other order of a court or agency directing than the
transactions contemplated by the Merger Agreement not be consummated; (iii) all
required consents, waivers and approvals having been obtained and continuing to
be in effect at the Effective Time; and (iv) the opinion of Houlihan Lokey shall
not have been withdrawn or revoked.

The obligation of the Company to effect the Merger is subject to the
fulfillment or waiver (if permissible) at or prior to the Effective Time of the
following conditions: (i) the representations and warranties of Acquisition Co.
contained in the Merger Agreement being true when made as of the Effective Time;
(ii) Acquisition Co. having performed in all material respect its obligations
required to be performed or complied with by Acquisition Co. at or prior to the
Effective Time; and (iii) that neither the Special Committee nor the Company's
Board of Directors has, prior to the Effective Time, withdrawn, modified or
changed its favorable recommendation regarding the Merger Agreement or the
Merger, or recommended or declared advisable any other Acquisition Offer or
Acquisition Proposal.

The obligation of Acquisition Co. to effect the Merger is subject to
the fulfillment or waiver (if permissible) at or prior to the Effective Time of
the following conditions: (i) the representations and warranties of the Company
contained in the Merger Agreement being true when made and as of the Effective
Time; and (ii) the Company having performed in all material respects its
obligations required to be performed or complied with by the Company at or prior
to the Effective Time.

Transactions, Amendments, Withdrawal of Recommendations - The Merger
Agreement provides that it may be terminated and the Merger may be abandoned at
any time prior to the Effective Time, whether before or after the requisite
approval and adoption by the Company's stockholders at the Special Meeting: (i)
by written mutual consent of the boards of directors of the Company and
Acquisition Co.; (ii) by the Company or Acquisition Co. if (a) any court or
competent jurisdiction or United States governmental authority shall have issued
an order, decree, ruling or taken any other action restraining, enjoining or
otherwise prohibiting or delaying the Merger and such order, decree, ruling or
other action shall have become final and nonappealable, or (b) if the Company's
Board of Directors or the Special Committee withdraws or modifies in a manner
adverse to Acquisition Co., its approval or recommendation of the Merger
Agreement or the Merger or recommends another merger, consolidation, business
combination with, or acquisition, of the Company or its assets, or (c) if the
requisite approval in accordance with Delaware law of the Company's stockholders
necessary to consummate the Merger is not obtained. In addition, either party
may terminate the Merger Agreement and the Merger may be abandoned in the event
of the breach by the other party of any representation, warranty or covenant
contained in the Merger Agreement which breach is not cured within fifteen days
after notice. Acquisition Co. may also elect to terminate the Merger Agreement
and the prospective Merger if stockholders exercise their dissenters' rights of
appraisal pursuant to the Delaware Law with respect to more than an aggregate
392,619 shares, (10%) of the outstanding shares of Common Stock.

The Merger Agreement further provides that it may be amended by written
agreement of the parties at any time prior to the Effective Time provided that
after approval and adoption by stockholders of the Merger Agreement and the
Merger, no amendment can be made which would reduce or change the type of
consideration into which each share of the Company's Common Stock will be
converted upon consummation of the Merger.

The Merger Agreement permits the Company's Board of Directors or the
Special Committee, at any time prior to the Effective Time, to withdraw, modify
or change its recommendation regarding the Merger or the Merger Agreement, or
recommend and declare advisable any other offer or proposal, if, in the opinion
of the Board of Directors or the Special Committee, after consultation with
their respective counsel and advisors, such withdrawal, modification or change
is required by the exercise of its fiduciary duties to the stockholders of the
Company under applicable law.

STRUCTURE OF THE MERGER

Pursuant to the Merger Agreement, Acquisition Co. will merge with and
into the Company. As a result of the Merger, Acquisition Co.'s corporate
existence will cease and the Company will continue as the surviving corporation.
At the Effective Time of the Merger, each share of Common Stock that is issued
and outstanding immediately prior thereto, other than shares owned by the
Continuing Stockholders or by stockholders who

have properly exercised their dissenters' rights, will be canceled and converted
into the right to receive a cash payment of $3.12 per share. The amounts payable
with respect to such shares is referred to as the "Common Stock Merger
Consideration". The shares of Common Stock owned by the Continuing Stockholders
will be transferred to Acquisition Co. and canceled as a result of the Merger as
will their shares of Acquisition Co. stock. In exchange, each Continuing
Stockholder will receive one "new" share of Common Stock for each "old" share of
Common Stock he owned prior to the Merger. Each "new" share of Common Stock will
be identical to each "old" share of Common Stock. As a result, upon consummation
of the Merger, the Continuing Stockholders will own all of the outstanding
Common Stock.

EFFECTIVE TIME OF THE MERGER

The Merger Agreement provides that the Merger shall be consummated
"...as promptly as practicable ..." after the satisfaction or, if permitted, the
waiver of the conditions set forth in Article V of the Merger Agreement. The
Merger will be consummated by the filing of a Certificate of Merger with the
Secretary of State of the State of Delaware, in such form as is required by, and
executed in accordance with the relevant provisions of Delaware law. The date
and time of such filing are referred to as the "Effective Time".

EXCHANGE PROCEDURES

Acquisition Co. has designated the Company's transfer agent,
Continental Stock Transfer & Trust Company, 17 Battery Place, New York, New York
10004, to act as the Paying Agent for those holders of shares of Common Stock
who become entitled to receive payment of the Common Stock Merger Consideration
pursuant to the Merger. At the Effective Time, Acquisition Co. will cause
immediately available funds to be deposited with the Paying Agent sufficient in
amount to pay the aggregate Common Stock Merger Consideration upon surrender of
the certificates representing the Common Stock. Promptly after the Effective
Time, the Company (through the Paying Agent) will mail a notice and letter of
transmittal to each record holder of the Company's Common Stock advising such
holder of the effectiveness of the Merger and providing the holder with
instructions on how to surrender his or her certificates of Common Stock in
order to be paid the $3.12 per share cash payment to which the holder is
entitled to receive as a result of the Merger. You will also receive
instructions for handling certificates which have been lost, stolen or
destroyed. YOU SHOULD NOT SUBMIT CERTIFICATES FOR SHARES OF COMMON STOCK UNTIL
YOU HAVE RECEIVED WRITTEN INSTRUCTIONS TO DO SO.

After the Effective Time of the Merger, the Company's stock transfer
books will be closed and no further transfers of Common Stock will be recorded.

Any portion of the Common Stock Merger Consideration delivered to the
Paying Agent by Acquisition Co. that remains unclaimed by the Company's
stockholders for one year after the Effective Time of the Merger will be
transferred to the Company as the surviving corporation. Any Company stockholder
who has not exchanged his or her certificates for payment within one year of the
Effective Time may look only to the Company, as the surviving corporation, for
payment of his or her share of the Common Stock Merger Consideration.

NONE OF ACQUISITION CO., THE COMPANY, THE PAYING AGENT, THEIR
AFFILIATES, OR ANY OTHER PARTY TO THE MERGER AGREEMENT SHALL BE LIABLE TO ANY
COMPANY STOCKHOLDER FOR ANY AMOUNTS PAID TO A PUBLIC OFFICIAL PURSUANT TO
APPLICABLE ABANDONED PROPERTY, ESCHEAT OR SIMILAR LAWS.

The Company, as the surviving corporation, or the Paying Agent, as the
case may be, is entitled to deduct and withhold from the consideration otherwise
payable to holders of the Company's Common Stock, any amounts which it is
required to deduct and withhold with respect to such payment under the Internal
Revenue Code or any provision of state, local or foreign tax law.

FEDERAL INCOME TAX CONSEQUENCES

The following is a discussion of the material federal income tax
consequence of the Merger based upon the Internal Revenue Code of 1986, as
amended, (the "Code"); regulations promulgated or proposed by the Treasury
Department, judicial authorities, and rulings and interpretations by the
Internal Revenue Service, as currently in effect. All of these are subject to
change at any time, possibly with retroactive effect. The discussion assumes
that you hold shares of Common Stock as a capital asset (within the meaning of
Code Section 1221), and does not address aspects of federal income taxation that
might be relevant to you if you are subject to special circumstances (e.g., a
dealer in securities, a bank, an insurance company, a financial institution, a
tax-exempt organization, a person that holds Common Stock as part of a straddle,
hedge, constructive sale, or conversion transaction, a holder subject to the
alternative minimum tax, or a United States person whose functional currency is
not the United States dollar, a person who elects to treat gains from a
disposition of shares as investment income for purposes of the limitation on the
deduction for investment interest expense, a person who acquired his or her
shares through the exercise of employee stock options or otherwise as
compensation for services, a foreign person, etc.). In addition, the discussion
does not address state, local or foreign tax consequences of the Merger.
Finally, this discussion applies only to United States persons. A United States
person is an individual U.S. citizen or resident alien; a corporation (or entity
taxable as a corporation) that was created or organized in or under the laws of
the United States, any state thereof, or the District of Columbia; an estate the
worldwide income of which is subject to U.S. federal income tax regardless of
its source; or a trust if both a court within the United States is able to
exercise primary supervision over its administration and one or more United
States persons have the authority to control all of its substantial decisions
(or if the trust otherwise has a valid election in

effect under applicable U.S. Treasury Regulations to be treated as a United
States person). If a partnership holds Common Stock, the tax treatment of a
partner will generally depend upon both the status of the partner and the
activities of the partnership.

Generally, the receipt of cash in exchange for shares of Common Stock
in the Merger will be a taxable transaction for federal income tax purposes.
Your gain or loss will be equal to the difference between the cash consideration
you receive for your shares of Common Stock pursuant to the Merger and your
adjusted tax basis in such shares. Your gain or loss from the exchange will be
characterized as capital gain or capital loss if your shares of Common Stock are
held as a capital asset. The gain or loss will be long-term if your holding
period for the shares is longer than twelve months. Under current law, net
long-term capital gains recognized by individuals are subject to a maximum
federal income tax rate of 15%. There are limitations on the deductibility of
capital losses for federal income tax purposes.

You may be subject to backup withholding at the rate of 28% on cash
amounts payable to you pursuant to the Merger in exchange for your stock
certificates, unless you (a) provide a correct taxpayer identification number
("TIN") in the manner required or (b) are exempt from such withholding and
certify this fact, when required. To prevent the possibility of backup
withholding, you must provide the Paying Agent (or the Company if payment is
being made to you by the Company more than one year after the Effective Time),
with your correct TIN by completing and transmitting a duly completed Form W-9.
This form will be provided with the letter of transmittal which will be
forwarded to stockholders of record at the Effective Time of the Merger by the
Paying Agent shortly thereafter. If you do not provide the Paying Agent with
your correct TIN, you may be subject to backup withholding as well as penalties
imposed by the Internal Revenue Service.

Your particular tax consequences will depend upon the facts and
circumstances applicable to you. Accordingly, we urge you to consult with your
own tax advisor to determine the tax consequences of the Merger to you in light
of your particular circumstances, including the applicability and effect of
state, local, foreign and other tax laws and any possible changes in those laws.

The Merger will not be a taxable transaction for federal income tax
purposes to the Company, Acquisition Co. or the Continuing Stockholders.

ACCOUNTING TREATMENT

For U.S. accounting purposes, the Merger will be accounted for under
the Treasury Stock Method and all of the acquired shares will be retired. There
will be no other effect on the Company's financial statements except to reflect
the issuance of replacement shares of Common Stock to the Continuing
Stockholders.

REGULATORY REQUIREMENTS

To effectuate the Merger, the Company and Acquisition Co. will be
required to file a Certificate of Merger with the Delaware Secretary of State in
compliance with the Delaware General Corporation Law after the approval and
adoption by stockholders of the Merger Agreement and the transactions
contemplated thereby is obtained pursuant to Delaware law. Other than compliance
with Delaware law and federal securities laws, neither the Company nor
Acquisition Co. is aware of any material federal, state or foreign governmental
regulatory requirement necessary to be complied with in connection with the
Merger.

EXPENSES OF THE MERGER

The estimated aggregate costs and fees to be incurred by the Company
and Acquisition Co. in connection with the Merger and the related transaction
are as follows:

o To be paid by the Company on behalf of the Company and on behalf of
the Special Committee;

Legal Fees and Expenses: $200,000*
Payment Agent Fees: 22,500
Houlihan Lokey Fees and Expenses: 280,000**
Printing and Distribution: 35,000
Proxy Solicitation and Other Expenses: 12,500
--------
Total: $550,000

----------
* Includes the legal fees and expenses of counsel to the Company and counsel to
the Special Committee.
** Includes the legal fees and expenses of Houlihan Lokey's counsel.

o To be paid by Acquisition Co.:

Legal Fees and Expenses: $ 155,000
Common Stock Merger Consideration: 4,120,000
Other: 25,000
----------
Total $4,300,000

SOURCES OF FUNDING

The expenses of the Transaction listed above to be paid by the Company
have been and will be paid from working capital. The expenses listed above to be
paid by Acquisition Co. will be paid with cash advances from its stockholders
(the Lombardi Group and the Maschler Group). These cash advances will be
provided from personal funds and from an aggregate of approximately $4,000,000
in five year bank loans to members of the Lombardi Group from a lending bank. No
formal loan agreements have been executed as of the date of this Proxy
Statement. These bank loans, which will be

repayable with annual interest of approximately 6.25% to 6.50% will be
collateralized by approximately 16 acres of real estate owned by the Lombardi
Group and their affiliates in Freehold, New Jersey. Included as part of the
collateral are approximately six acres containing the two restaurants and the
pad site utilized for parking by the two restaurants which have been leased to
the Company by an affiliate of the Lombardi Group. See "Special Factors -
Interests of Certain Persons in the Merger." The Lombardi Group has not
formulated any financing plans or made any financing arrangements at this date
to repay the bank loans but expects to repay the loans over time from personal
funds including funds generated from their various business interests. The
Lombardi Group does not currently intend to utilize funds generated by the
Company to repay these loans. In the event the bank loans are not consummated,
the Lombardi Group intends to make the required cash advances utilizing personal
funds and personal assets other than their interests in the Company.

DISSENTERS' RIGHTS OF APPRAISAL

As a stockholder of the Company, you have a right to dissent from the
Merger and demand a determination by the Delaware Court of Chancery as to the
fair value of your shares of Common Stock. Exercising this right to dissent as a
Dissenting Stockholder could result, in the event the Merger in consummated, in
your receiving an amount per share which is more than, the same as, or less than
the amount per share ($3.12) payable in cash to the Public Stockholders pursuant
to the Merger Agreement.

Notwithstanding any provision of the Merger Agreement to the contrary,
any shares of Common Stock held by a stockholder who does not vote to approve
the Merger and complies with all of the provisions of Section 262 of the General
Corporation Law of the State of Delaware (the "Delaware Law") concerning the
right to dissent from the Merger and require payment of fair value shall not be
converted into the right to receive $3.12 per share pursuant to the Merger
Agreement. Instead, such dissenting holder shall only be entitled to receive
such consideration as may be determined to be due to the holder pursuant to the
Delaware Law. However, if the holder of shares of Common Stock who has demanded
an appraisal of his or her shares under the Delaware Law withdraws the demand or
fails to perfect or otherwise loses his or her right to an appraisal, his or her
shares will be deemed to be canceled and converted at the Effective Time of the
Merger into the right to receive $3.12 per share pursuant to the Merger
Agreement.

The following is a summary of the principal provisions of Section 262
of the Delaware Law and does not purport to be a complete description. A copy of
Section 262 is attached to this Proxy Statement as Appendix C. Failure to take
any action required by Section 262 will result in a termination or waiver of a
stockholder's rights under Section 262. Perfecting your appraisal rights can be
complicated and costly.

Only a holder of record of the Company's Common Stock is entitled to
demand appraisal rights for Common Stock registered in that holder's name. The
demand must be executed by or for the holder of record, fully and correctly, as
the holder's name appears on the holder's stock certificates. If stock is owned
of record in a fiduciary capacity, such as by a trustee, guardian or custodian,
the demand should be executed in that capacity. If

stock is owned of record by more than one person, as in a joint tenancy or
tenancy in common, the demand should be executed by or for all owners. An
authorized agent, including one of two or more joint owners, may execute the
demand for appraisal for a holder of record; however, the agent must identify
the owner or owners of record and expressly disclose the fact that, in executing
the demand, the agent is acting as agent for the owner or owners of record. A
holder of record, such as a broker, who holds stock as nominee for beneficial
owners may exercise a holder's right of appraisal with respect to stock held for
all or less than all of such beneficial owners. In such case, the written demand
should set forth the number of shares of stock covered by the demand. Where no
number of shares of stock is expressly mentioned, the demand will be presumed to
cover all shares of stock standing in the name of the holder of record.

In order to dissent from the Merger, a stockholder (i) must NOT vote
his or her shares for the Merger Agreement and the Merger and (ii) must deliver
to the Company BEFORE the vote on the Merger is taken at the Special Meeting, a
written demand for appraisal of his or her shares (the "Appraisal Demand"). The
Appraisal Demand will be sufficient if it is in writing and reasonably informs
the Company of the stockholder's identity and that the stockholder intends
thereby to demand the appraisal for a specified number of his or her shares. A
PROXY OR VOTE AGAINST THE MERGER SHALL NOT CONSTITUTE SUCH A DEMAND.
FURTHERMORE, A STOCKHOLDER ELECTING TO DEMAND AN APPRAISAL MUST DO SO BY AN
APPRAISAL DEMAND SEPARATE FROM ANY PROXY OR BALLOT. THE APPRAISAL DEMAND MUST BE
DELIVERED OR MAILED TO THE COMPANY AT 62 BROADWAY, POINT PLEASANT BEACH, NEW
JERSEY 08742; ATT: CORPORATE SECRETARY AND MUST BE RECEIVED PRIOR TO THE SPECIAL
MEETING.

Within ten days after the Effective Time of the Merger, the Company, as
the surviving corporation, will send notice of the effectiveness of the Merger
to each person who prior to the Effective Time of the Merger satisfied the
foregoing conditions. Any stockholder entitled to appraisal rights may, within
20 days after the date of the mailing of such notice, demand in writing from the
Company, the appraisal of his or her shares of Common Stock. Such demand must
reasonably inform the Company of the name and mailing address of the holder of
record and of such stockholders' intention to demand appraisal of such holder's
shares of Common Stock.

Within 120 days after the Effective Time of the Merger, the Company as
the surviving corporation or any stockholder who has satisfied the foregoing
conditions and who is otherwise entitled to appraisal rights, may file a
petition in the Delaware Court of Chancery demanding a determination of the
value of the stock held by all stockholders entitled to appraisal. The Company
does not currently intend to file an appraisal petition and stockholders seeking
to exercise appraisal rights should not assume that the Company will file a
petition to appraise the value of their stock or that the Company will initiate
any negotiations with respect to the "fair value" of such stock. Accordingly,
holders of the Common Stock should initiate all necessary action to perfect
their appraisal rights within the time periods prescribed in Section 262.

Within 120 days after the Effective Time of the Merger, any stockholder
who has complied with the requirements for exercise of appraisal rights, as
discussed above, is entitled, upon written request, to receive from the Company,
a statement setting forth (i) the aggregate number of shares of Common Stock not
voted in favor of the Merger and with respect to which demands for appraisal
have been received and (ii) the aggregate number of holders of such shares of
stock. The Company is required to mail such statement within ten days after it
receives a written request to do so, or within ten days after expiration of the
period for delivery of demands for appraisal under Section 262, whichever is
later.

If a petition for an appraisal is timely filed and a copy is delivered
to the Company as the surviving corporation, the Company must within 20 days
after receipt of such petition file with the Delaware Court of Chancery in which
the petition was filed a list of the names and addresses of all stockholders who
have demanded appraisal rights and with whom agreements as to the value of their
shares have not been reached by the Company. After notice to the Company and
those stockholders, the Court can conduct a hearing to determine the
stockholders entitled to appraisal rights. The Court may require stockholders
who have demanded appraisal rights for their shares to submit their stock
certificates to the Court for a notation thereon, and if any stockholder fails
to comply with this requirement, the Court may dismiss the proceedings as to
such stockholder.

At a hearing on the petition, the Court will determine the stockholders
entitled to appraisal rights and will appraise the shares of stock owned by such
stockholders, determining their "fair value" exclusive of any element of value
arising from the accomplishment or expectation of the Merger and will determine
the amount of interest, if any, to be paid upon the value of the shares of stock
of the stockholders entitled to appraisal. In determining such "fair value," the
Court shall take into account all relevant factors. Any such judicial
determination of the "fair value" of stock could be based on considerations
other than or in addition to the price paid in the Merger and the market value
of the Common Stock, including asset values, the investment value of the Common
Stock and any other valuation considerations generally accepted in the
investment community. The value so determined for the Common Stock could be more
than, less than or the same as the consideration paid pursuant to the Merger
Agreement. The Court may, in its discretion, order that all or a portion of any
stockholder's expenses incurred in connection with an appraisal proceeding,
including, without limitation, reasonable attorney's fees and fees and expenses
of experts, be charged pro rata against the value of all the shares of the
Common Stock entitled to an appraisal, but a dissenting stockholder must be
prepared to pay his or her own expenses in connection with the proceeding..

Any stockholder who has demanded an appraisal in compliance with
Section 262 will not, from and after the Effective Time of the Merger, be
entitled to vote the shares subject to such demand for any purpose or be
entitled to dividends or other distributions on those shares (other than those
payable or deemed to be payable to stockholders of record at a date which is
prior to the Effective Time of the Merger).

Holders of Common Stock lose the right to appraisal if no petition for
appraisal is filed within 120 days after the Effective Time of the Merger, or if
a stockholder delivers a written withdrawal of such stockholder's demand for an
appraisal to the Company, except that any such attempt to withdraw made more
than 60 days after the Effective Time of the Merger requires the Company's
written approval. If appraisal rights are not perfected or a demand for
appraisal rights is withdrawn, a stockholder will be entitled to receive the
$3.12 per share cash consideration otherwise payable pursuant to the Merger
Agreement.

If an appraisal proceeding is timely instituted, such proceeding may
not be dismissed without the approval of the Delaware Court of Chancery as to
any stockholder who has perfected a right of appraisal.

Failure by a stockholder to take any required step to perfect appraisal
rights may result in termination of his or her appraisal rights. BECAUSE THE
APPRAISAL PROVISIONS OF THE DELAWARE LAW ARE COMPLEX, STOCKHOLDERS WHO ARE
CONSIDERING EXERCISING THEIR APPRAISAL RIGHTS UNDER SECTION 262 SHOULD CONSULT
WITH THEIR OWN LEGAL ADVISORS.

The Merger Agreement provides that Acquisition Co. will not be
obligated to complete the Merger if the number of shares of Common Stock held by
stockholders who comply with all the provisions of Section 262 exceeds 10% of
the aggregate number of shares of the Company's Common Stock outstanding on the
closing date of the Merger.

WHERE YOU CAN FIND MORE INFORMATION

As required by the Securities Exchange Act of 1934 (the "Exchange
Act"), the Company files annual reports on Form 10-KSB, quarterly reports on
Form 10-QSB, current reports on Form 8-K, and has filed this Proxy Statement
with the Securities and Exchange Commission. These reports contain additional
information about the Company. You may read and copy any report, statements or
other information the Company files, at the public reference room of the
Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. You may obtain information about the operation of the public reference
room by calling the Securities and Exchange Commission at 1-800-SEC-0330. The
Company's Exchange Act filings with the Securities and Exchange Commission are
also available to the public from commercial document retrieval services and on
the Securities and Exchange Commission's web site at http://www.sec.gov. In
addition, a copy of any of the Company's Exchange Act filings over the past two
years

are available to any Company stockholder without charge upon written request
addressed to Chefs International, Inc., 62 Broadway, Point Pleasant Beach, New
Jersey 08742; Attn: Chief Financial Officer.

TO INSURE TIMELY DELIVERY OF ANY OF THESE DOCUMENTS BEFORE THE SPECIAL
MEETING OF STOCKHOLDERS, YOUR REQUEST SHOULD BE MADE BY APRIL 7, 2005 (seven
business days before the date of the Special Meeting).

The Company has not provided and has not authorized anyone to provide
you with any information other than the information contained in or incorporated
by reference into this Proxy Statement. This Proxy Statement is dated March 9,
2005. You should not assume that the information in this Proxy Statement is
accurate as of any other date. This Proxy Statement does not constitute a
solicitation in any jurisdiction where, or to any person to whom, it is unlawful
to make a proxy solicitation.

INFORMATION INCORPORATED BY REFERENCE

The Company's Annual Report on Form 10-KSB for the fiscal year ended
January 25, 2004 and its Quarterly Report on Form 10-QSB for the quarter ended
October 24, 2004, filed by the Company with the Securities and Exchange
Commission ('34 Act File No. 0-8513), are being delivered with this Proxy
Statement without exhibits. These reports contain additional information about
the Company and such information is incorporated by reference into this Proxy
Statement.

No person has been authorized to give any information or to make any
representation other than those contained or incorporated by reference into this
Proxy Statement and, if given or made, any such information or representation
must not be relied upon as having been authorized by the Company or any other
person. The Company has provided all of the information contained in this Proxy
Statement relating to the Company and its affiliates except for the information
relating to the Continuing Stockholders other than in their capacities as
officers and/or directors of the Company. Acquisition Co. and the Continuing
Stockholders have supplied all of the information contained in the Proxy
Statement relating to Acquisition Co. and its affiliates in such capacities.

By Order of the Board of Directors

Michael F. Lombardi
Secretary

Point Pleasant Beach, New Jersey
March 9, 2005