TAM RESTAURANTS INC, SB-2/A, 1998-01-13

TAM RESTAURANTS INC
SB-2/A, 1998-01-13
EATING PLACES

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As filed with the Securities and Exchange Commission on January 13, 1998
Registration No. 333-39937

===============================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
Amendment No. 1
To
Form SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------

TAM RESTAURANTS, INC.
(Exact name of small business issuer as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Delaware 5812 133905598
(Primary Standard Industrial (State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Classification No.) Identification No.)
</TABLE>
1163 Forest Avenue
Staten Island, New York 10310
(718) 720-5959
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
----------------
Frank Cretella
President and Chief Executive Officer
TAM Restaurants, Inc.
1163 Forest Avenue
Staten Island, New York 10310
(718) 720-5959
(Name, address and telephone number of agent for service)
----------------
Copies of all communications to:

ROBERT J. MITTMAN, ESQ. ALAN H. ARONSON, ESQ.
Tenzer Greenblatt LLP Akerman, Senterfitt & Eidson, P.A.
The Chrysler Building One Southeast 3rd Avenue
405 Lexington Avenue Miami, Florida 33131-1704
New York, New York 10174-0208 Telephone: (305) 374-5600
Telephone: (212) 885-5000 Facsimile: (305) 374-5095
Facsimile: (212) 885-5001

Approximate date of proposed sale to the public: As soon as practicable
after this Registration Statement becomes effective.

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]_________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]_________

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

===============================================================================
<PAGE>
TAM RESTAURANTS, INC.

Cross Reference Sheet Pursuant to Rule 404
<TABLE>
<CAPTION>
Registration Statement Item Number and Caption Prospectus Caption
---------------------------------------------- ------------------
<S> <C>
1. Front of the Registration Statement and Outside
Front Cover Page of Prospectus .................... Forepart of the Registration Statement and Outside
Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages of
Prospectus ......................................... Inside Front and Outside Back Cover Pages of
Prospectus

3. Summary Information and Risk Factors ............... Prospectus Summary; Risk Factors

4. Use of Proceeds .................................... Use of Proceeds

5. Determination of Offering Price ..................... Outside Front Cover Page of Prospectus; Risk Factors;
Underwriting

6. Dilution .......................................... Risk Factors; Dilution

7. Selling Securityholders ........................... Selling Securityholders and Plan of Distribution

8. Plan of Distribution .............................. Outside Front Cover Page of Prospectus; Underwriting

9. Legal Proceedings ................................. Not Applicable

10. Directors, Executive Officers, Promoters and
Control Persons ................................... Management

11. Security Ownership of Certain Beneficial
Owners and Management ............................... Principal Stockholders

12. Description of Securities ........................... Outside and Inside Front Cover Pages of Prospectus;
Prospectus Summary; Capitalization; Description of
Securities

13. Interest of Named Experts and Counsel ............... Legal Matters

14. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities ..... Exculpatory Provisions and Indemnification Matters

15. Organization Within Last Five Years ............... Prospectus Summary; Management's Discussion and
Analysis of Financial Condition and Results of
Operations

16. Description of Business ........................... Prospectus Summary; Risk Factors; Use of Proceeds;
Business

17. Management's Discussion and Analysis or Plan
of Operation ...................................... Management's Discussion and Analysis of Financial
Condition and Results of Operations

18. Description of Property ........................... Business

19. Certain Relationships and Related Transactions ...... Certain Transactions

20. Market for Common Equity and Related Stockholder
Matters ............................................ Outside Front Cover Page; Risk Factors; Dividend
Policy; Description of Securities

21. Executive Compensation .............................. Management

22. Financial Statements .............................. Financial Statements

23. Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure ................ Not Applicable
</TABLE>
<PAGE>

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

PRELIMINARY PROSPECTUS DATED JANUARY 13, 1998

[LOGO] SUBJECT TO COMPLETION

TAM RESTAURANTS, INC.
1,000,000 Shares of Common Stock and Redeemable Warrants
to Purchase 500,000 Shares of Common Stock

The Company is offering hereby 1,000,000 shares (the "Shares") of the
common stock of the Company (the "Common Stock") and redeemable warrants to
purchase 500,000 shares of Common Stock (the "Warrants"). The Shares and
Warrants may be purchased separately and will be separately transferrable
immediately upon issuance. Each Warrant entitles the registered holder thereof
to purchase one share of Common Stock at a price of $6.00, subject to adjustment
in certain circumstances, at any time commencing , 1999 (13 months
following the date of this Prospectus) (or on such earlier date as to which the
Underwriter consents) until , 2003. The Warrants are redeemable by the
Company at any time commencing , 1999 (13 months following the date of this
Prospectus) upon notice of not less than 30 days, at a price of $.10 per
Warrant, provided that the closing bid quotation of the Common Stock on all 20
trading days ending on the third trading day prior to the day on which the
Company gives notice (the "Call Date") has been at least 150% (currently $9.00,
subject to adjustment) of the then effective exercise price of the Warrants and
the Company obtains the written consent of the Underwriter to such redemption
prior to the Call Date. See "Description of Securities." Prior to this offering
there has been no public market for the Common Stock or Warrants and there can
be no assurance that any such market will develop. It is anticipated that the
Common Stock and Warrants will be quoted on the Nasdaq SmallCap Market
("Nasdaq") under the symbols "TAMR" and "TAMRW," respectively. The offering
prices of the Shares and Warrants, and the exercise price of the Warrants, were
determined pursuant to negotiations between the Company and the Underwriter and
do not necessarily relate to the Company's book value or any other established
criteria of value. For a discussion of the factors considered in determining the
offering prices of the Shares and Warrants, see "Underwriting." This Prospectus
also relates to the offer and sale by certain persons (the "Selling
Securityholders") of up to 310,000 warrants (the "Selling Securityholders'
Warrants"), which are identical to the Warrants and will be issued to the
Selling Securityholders upon the consummation of this offering upon the
conversion of outstanding warrants, and up to 310,000 shares (the "Selling
Securityholders' Shares") of Common Stock issuable upon exercise of the Selling
Securityholders' Warrants. The Selling Securityholders' Warrants are not part of
the underwritten offering, however, and may not be offered or sold prior to, at
the earliest, 15 months following the date of this Prospectus without the prior
written consent of the Underwriter. The Company will not receive any of the
proceeds from the sale of the Selling Securityholders' Warrants and Selling
Securityholders' Shares. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources" and
"Selling Securityholders and Plan of Distribution."
-------------------
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK
AND IMMEDIATE SUBSTANTIAL DILUTION AND SHOULD NOT BE PURCHASED BY INVESTORS WHO
CANNOT AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS" COMMENCING
ON PAGE 8 AND "DILUTION" ON PAGE 18.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
===============================================================================
Price Underwriting Proceeds
to Discounts and to
Public Comissions(1) Company(2)
- -------------------------------------------------------------------------------
Per Share ......... $5.00 $.50 $4.50
- -------------------------------------------------------------------------------
Per Warrant ...... $ .10 $.01 $ .09
- -------------------------------------------------------------------------------
Total (3) ......... $5,050,000 $505,000 $4,545,000
===============================================================================

<PAGE>

(1) The Company has agreed to pay to the Underwriter a 3% nonaccountable
expense allowance, to sell to the Underwriter warrants (the "Underwriter's
Warrants") to purchase up to 100,000 shares of Common Stock and/or 50,000
warrants and to retain the Underwriter as a financial consultant. The
Company has also agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting expenses payable by the Company, including the
Underwriter's nonaccountable expense allowance in the amount of $151,500
($174,225 if the Underwriter's over-allotment option is exercised in full),
estimated at $645,000.
(3) The Company has granted to the Underwriter an option, exercisable within 45
days from the date of this Prospectus, to purchase up to 150,000 additional
shares of Common Stock and/or 75,000 additional Warrants on the same terms
set forth above, solely for the purpose of covering over-allotments, if
any. If the Underwriter's over-allotment option is exercised in full, the
total price to public, underwriting discounts and commissions and proceeds
to Company will be $5,807,500, $580,750 and $5,226,750, respectively. See
"Underwriting."
-------------------
The Shares and Warrants are being offered, subject to prior sale, when, as
and if delivered to and accepted by the Underwriter and subject to approval of
certain legal matters by counsel and to certain other conditions. The
Underwriter reserves the right to withdraw, cancel or modify this offering and
to reject any order in whole or in part. It is expected that delivery of
certificates representing the Shares and Warrants will be made against payment
therefor at the offices of the Underwriter, 7 Hanover Square, New York, New York
10004, on or about , 1998.
-------------------

[LOGO]

The date of this Prospectus is , 1998

<PAGE>

-------------------
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
ON NASDAQ, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE, WHICH STABILIZE,
MAINTAIN OR OTHERWISE AFFECT THE PRICES OF THE COMMON STOCK AND WARRANTS.
SPECIFICALLY, THE UNDERWRITER MAY OVER-ALLOT IN CONNECTION WITH THE OFFERING AND
MAY BID FOR AND PURCHASE SHARES OF COMMON STOCK AND WARRANTS IN THE OPEN MARKET.
FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
<PAGE>
PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus. Each prospective investor is urged to read this
Prospectus in its entirety. Unless otherwise indicated, all share and per share
data and information in this Prospectus (i) gives retroactive effect to a 1 for
1.8135268 reverse split of the Common Stock effected in December 1997 and (ii)
assumes no exercise of the Underwriter's over-allotment option to purchase up to
150,000 additional shares of Common Stock and/or 75,000 additional Warrants. See
"Underwriting" and Note Q to Notes to Financial Statements.

This Prospectus contains forward-looking statements that involve risks and
uncertainties. The Company's actual results may differ materially from the
results discussed in the forward-looking statements. Factors that might cause
such a difference include, but are not limited to, those discussed in "Risk
Factors."

The Company

TAM Restaurants, Inc. (the "Company") operates Lundy Bros. Restaurant
("Lundy's"), a high-volume, casual, upscale seafood restaurant located in
Brooklyn, New York, and The Boathouse in Central Park ("The Boathouse"), a
multi-use facility which features an upscale restaurant and catering pavilion,
located on the lake in New York City's Central Park. Lundy's and The Boathouse
are high-profile locations which host many special events and receive extensive
press coverage. The Company is also constructing American Park at the Battery
("American Park"), which has been designed as a high-volume premium-quality
restaurant to be located at the water's edge in Battery Park, a New York City
landmark visited by approximately 4 million visitors during 1996. In addition,
the Company's restaurants offer high-quality professional, on-premise and
off-premise catering services.

The Lundy's concept is designed to appeal to a broad range of guests by
serving generous portions of premium-quality seafood and other menu items and by
combining a grand dining experience with friendly and efficient service in a
high-energy environment. Lundy's menu features a wide variety of fresh seafood
items, including lobster, crab, shrimp, oysters, clams and daily fish specials,
cooked to order in a variety of ways: steamed, sauteed, broiled, grilled,
blackened and fried. In addition, Lundy's offers a selection of steaks, chicken
dishes, pasta dishes, pizzas, appetizers, chowders, salads and fresh-baked
desserts, as well as full bar service. Dinner entrees range in price from $7.95
to $28.95 and the average dinner check is approximately $32.00 per person.
Lundy's is open for lunch and dinner seven days a week.

Lundy's interior has been designed with a contemporary decor, rich polished
woods and granite surfaces, accented with copper, pottery and brushed-stainless
steel and earth tones, to impart "Old World" elegance and comfort. Lundy's
commitment to offering its guests a casual, exciting dining experience is
highlighted by its "exhibition" kitchen where all meals are cooked to order in
view of its guests, a lobster pool from which guests can select their lobsters,
an experienced waitstaff uniformed in crisp white linen jackets, a high
waitstaff-to-customer ratio to assure attentive service and tables and multiple
layers of colored linens covered with pristine white butcher paper.

Lundy's offers guests several seating selections in its multi-level
interior, which consists of an expansive, high-ceiling main dining area; a large
upstairs dining room which is also used for special events and to cater private
functions; a mezzanine-level cigar room which overlooks the main dining area;
and a 30 foot long oyster and beverage bar; as well as outdoor seating. Lundy's
also houses a seafood laboratory where seafood is tested to assure premium
quality and freshness, and a gift shop which carries a variety of "Lundy's" and
"Brooklyn" themed merchandise, such as T-shirts and other clothing items, hats,
books, plates and coffee and beer mugs, as well as Lundy's chowders and sauces
and seafood related products, such as lobster bibs, crackers and forks.

The Boathouse is a multi-use, lakeside facility which features an upscale
restaurant with primarily al fresco (outdoor) seating and offers guests a
comfortable, relaxed and romantic atmosphere. The Boathouse

3
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serves eclectic American cuisine that changes according to season and consumer
trends, emphasizing herbs grown fresh on-site. The menu is limited in scope to
permit the greatest attention to quality while offering sufficient breadth to
appeal to a variety of taste preferences. Dinner entrees range in price from
$19.00 to $28.00 and the average dinner check is approximately $44.00 per
person. Other attractions of The Boathouse include a glass-enclosed, tented
catering pavilion for private functions; a cocktail area with a jazz band
performing live five nights a week; The Boathouse Express, a cafeteria-style
convenience counter with indoor and outdoor seating which serves specialty
sandwiches, salads, baked goods, and juices, as well as traditional fast-food
items, such as hamburgers, hot dogs, french fries and sodas; carts and kiosks
strategically located on the facility's grounds offering a variety of food and
beverage items, such as fresh fruit drinks, New York-style pretzels, pita
sandwiches and espresso and cappuccino; rowboat and bicycle rentals and Venetian
gondola rides; and a merchandise counter. The restaurant is open for lunch and
dinner on a seasonally adjusted basis, while the catering pavilion and The
Boathouse Express are open year-round.

American Park has been designed with an urban mountain lodge motif,
incorporating natural fabrics, slate, stone, wood and brick with modern-style
furnishings, vibrant colors and designer lighting, and providing panoramic views
of the New York City harbor and downtown Manhattan skyline. American Park will
offer seating selections in its main dining room, second floor dining room and
bi-level outdoor patio. American Park is expected to serve contemporary American
cuisine featuring wood-burning menu selections, such as steaks, whole fish,
chicken and veal dishes. The lower-level outdoor patio will extend to the
water's edge and is expected to incorporate a separate kitchen which serves
selected items from the main restaurant menu and an expanded bar area. In
addition, the Company intends to operate a free-standing kiosk as part of
American Park which is expected to serve appetizers, sandwiches, cold beverages,
beer and wine.

The Company believes that providing friendly, courteous, efficient service
is critical to the long-term success of each location. The Company maintains a
guest service department which, among other things, contacts several customers
from each location's previous night's reservation list to inquire about their
dining experiences. The Company utilizes guest feedback to continually improve
its service, update its menu selections and otherwise improve its operations.
The Company also believes that the selection and training of its employees
result in friendly, courteous, efficient guest service which contributes to a
pleasurable dining experience for the guest.

Lundy's and The Boathouse are approximately 16,500 and 20,000 square feet
in size, respectively, and have a seating capacity of approximately 730 and 790
seats, respectively. American Park is approximately 18,300 square feet in size
and is expected to have a seating capacity of approximately 750 seats. Sales for
Lundy's and The Boathouse were $5,676,382 and $6,152,706, respectively, during
the fiscal year ended September 29, 1996, and $6,791,707 and $7,217,655,
respectively, during the fiscal year ended September 28, 1997. The Company's
food and liquor sales accounted for 76.8% and 15.3% of revenues, respectively,
for the fiscal year ended September 29, 1996, and 76.4% and 17.3% of revenues,
respectively, for the fiscal year ended September 28, 1997.

The Company's strategy is to initially develop and operate a limited number
of additional Lundy's restaurants in the New York City metropolitan area and
other urban and upscale suburban areas, particularly those with a large
population of transplanted New Yorkers, such as Southern Florida, Los Angeles,
Chicago and Washington D.C. With a substantial portion of the proceeds of this
offering (approximately $3,500,000), projected cash flow from operations and
anticipated financing, including equipment and vendor financing and landlord
development concessions and rent allowances, the Company intends to open three
additional Lundy's restaurants during the 12 months following the consummation
of this offering. The Company is currently analyzing several possible locations
but does not have any commitments or understanding with respect to any proposed
location or other sources of financing. In addition, in connection with its
expansion strategy, the Company may seek to open additional high-volume
landmark-type restaurants, as appropriate opportunities arise. The Company has
limited experience in expanding its operations and there can be no assurance
that it will be able to successfully do so.

4
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The Company was formed to act as a holding company and was incorporated
under the laws of the State of Delaware in July 1996 under the name TAM
Restaurant Holding Corp. and, in December 1997, changed its name to TAM
Restaurants, Inc. Effective September 29, 1996, the Company acquired (the
"Acquisition") all of the outstanding capital stock of TAM Restaurant Group,
Inc. ("TAM") and Shellbank Restaurant Corp. ("Shellbank"). Unless the context
requires otherwise, all references to "the Company" include its wholly-owned
subsidiaries, TAM, Shellbank, Bay Landing Restaurant Corp., a wholly-owned
subsidiary of Shellbank ("Bay Landing"), and Plum Third Street Corp., a
wholly-owned subsidiary of Bay Landing. The Company's executive offices are
located at 1163 Forest Avenue, Staten Island, New York 10310 and its telephone
number is (718) 720-5959.

Recent Financing

In October 1997, Kayne Anderson Non-Traditional Investments, L.P. and ARBCO
Associates, L.P., affiliates of Kayne Anderson Investment Management, Inc.
(collectively, "Kayne Anderson"), loaned the Company an aggregate of $1,000,000.
The loans bear interest at the rate of 10% per annum, payable quarterly
commencing December 31, 1997, and are due May 31, 1999. Upon an event of default
under the loans, the interest rate increases to 15% per annum and the Company
would be required to pay to Kayne Anderson 50% of the operating profits from
American Park on a monthly basis until the loan is fully repaid. The loan is
guaranteed by Frank Cretella, President, Chief Executive Officer, a director and
a principal stockholder of the Company, and the guarantee is secured by a pledge
of 200,000 shares of Common Stock owned by Frank Cretella and Jeanne Cretella,
Vice President, a director and principal stockholder of the Company. As partial
consideration for the loans, the Company issued to Kayne Anderson warrants (the
"KA Warrants") to purchase 200,000 shares of Common Stock. The KA Warrants are
exercisable at a price of $5.00 per share (subject to adjustment under certain
circumstances) and are exercisable at any time commencing 90 days following the
date of this Prospectus until October 31, 2002. In connection with the loan, the
Company agreed to use its best efforts to cause a representative designated by
Kayne Anderson to be elected to the Company's Board of Directors. Kenneth L.
Harris is Kayne Anderson's initial designee.

The Offering

Securities offered....... 1,000,000 Shares and Warrants to purchase 500,000
shares of Common Stock. The Shares and Warrants may
be purchased separately and will be separately
transferable immediately upon issuance. See
"Description of Securities."

Common Stock to be
outstanding after
this offering(1)..... 3,500,000 shares of Common Stock

Warrants(2):

Number to be outstanding
after this offering..... 500,000 Warrants

Exercise terms.......... Exercisable at any time commencing , 1999 (13
months following the date of this Prospectus) (or on
such earlier date as to which the Underwriter
consents), each to purchase one share of Common
Stock at a price of $6.00, subject to adjustment in
certain circumstances. See "Description of
Securities -- Redeemable Warrants."

Expiration date....... , 2003

Redemption.............. Redeemable by the Company at any time commencing
, 1999 (13 months following the date of this
Prospectus), upon notice of not less than 30 days,
at a price of $.10 per Warrant, provided

5
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that the closing bid quotation of the Common Stock
on all 20 trading days ending on the third trading
day prior to the day on which the Company gives
notice (the "Call Date") has been at least 150%
(currently $9.00, subject to adjustment) of the then
effective exercise price of the Warrants and the
Company obtains the written consent of the
Underwriter with respect to such redemption prior to
the Call Date. The Warrants will be exercisable
until the close of business on the date fixed for
redemption. See "Description of Securities --
Redeemable Warrants."

Use of proceeds.......... The Company intends to use the net proceeds of
this offering for the construction of new
restaurants; and for working capital and general
corporate purposes. See "Use of Proceeds."

Risk factors............. The securities offered hereby are speculative and
involve a high degree of risk and immediate
substantial dilution and should not be purchased by
investors who cannot afford the loss of their entire
investment. See "Risk Factors" and "Dilution."

Proposed Nasdaq symbols... Common Stock -- TAMR
Warrants -- TAMRW

- -------------
(1) Does not include: (i) 500,000 shares of Common Stock reserved for issuance
upon exercise of the Warrants; (ii) an aggregate of 150,000 shares of
Common Stock reserved for issuance upon exercise of the Underwriter's
Warrants and the warrants included therein; (iii) an aggregate of 310,000
shares of Common Stock (the "Selling Securityholders' Shares") reserved for
issuance upon exercise of outstanding warrants which will be converted into
warrants (the "Selling Securityholders' Warrants") identical to the
Warrants; (iv) 203,000 shares of Common Stock reserved for issuance upon
exercise of other outstanding warrants; (v) 259,250 shares of Common Stock
reserved for issuance upon exercise of outstanding options granted under
the Company's 1997 Stock Option Plan (the "Option Plan"); and (vi) 265,750
shares of Common Stock reserved for issuance upon exercise of options
available for future grant under the Option Plan. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Management -- 1997 Stock Option Plan," "Certain Transactions,"
"Description of Securities" and "Underwriting."

(2) Does not include any of the warrants referred to in clauses (ii), (iii) or
(iv) of footnote 1 above.

----------------------
For California Residents Only: Each purchaser of Shares and Warrants in
California must satisfy one of the following suitability standards: (i) a
minimum net worth (exclusive of home, home furnishings and automobiles) of at
least $250,000 and, during the last taxable year (or such purchaser estimates
that he or she will have during the current taxable year), gross income of at
least $65,000; (ii) minimum net worth (exclusive of home, home furnishings and
automobiles) of $500,000 or $1,000,000 (inclusive of home, home furnishings and
automobiles); or (iii) during the last taxable year (or such purchaser estimates
that he or she will have during the current taxable year) gross income of at
least $200,000.

6
<PAGE>

Summary Financial Information

The summary financial information set forth below is derived from and
should be read in conjunction with the financial statements, including the notes
thereto, appearing elsewhere in this Prospectus.

Statement of Operations Data:

<TABLE>
<CAPTION>
Year Ended Year Ended
September 29, 1996 September 28, 1997
-------------------- -------------------
<S> <C> <C>
Sales ...................................................... $ 11,829,088 $14,025,468
Gross profit ................................................ 3,957,648 5,950,056
Income (loss) from operations .............................. (1,703,222) 1,016,031
Income (loss) from continuing operations(1) .................. (2,870,815) 261,780
Income (loss) per share from continuing operations (1) ...... (1.33) .10
Weighted average number of shares outstanding ............... 2,160,676 2,526,957
</TABLE>

Balance Sheet Data:

<TABLE>
<CAPTION>
September 29, 1996 September 28, 1997
-------------------- -----------------------------------------------------
Actual Pro Forma(2) As Adjusted(3)
---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Working capital (deficit) ............ $ (1,969,787) $ (2,551,009) $ (1,560,509) 2,467,813
Total assets ........................ 4,519,569 5,940,027 6,940,027 10,711,705
Total liabilities .................. 4,655,445 5,614,123 6,132,123 6,003,801
Stockholders' equity (deficit) ...... (135,876) 325,904 807,904 4,707,904
</TABLE>
- -------------
(1) Effective September 29, 1996, the Company transferred the assets relating to
its concession business to American Leisure Today, Inc. ("American
Leisure"), a company wholly-owned by Frank Cretella, President, Chief
Executive Officer, a director and a principal stockholder of the Company.
For the year ended September 29, 1996, net income from such operations was
$30,142 or $.01 per share. See "Management's Discussion and Analysis of
Financial Conditions and Results of Operations," "Certain Transactions" and
Consolidated Financial Statements.

(2) Gives effect to the issuance of the $1,000,000 principal amount of
promissory notes and 200,000 warrants in October 1997 to Kayne Anderson and
the receipt of the approximately $990,500 of net proceeds therefrom, of
which $482,000 represents the amount allocable to the warrants and recorded
as an original issue discount to the loans (the "Pro Forma Adjustment"). See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources," "Certain Transactions" and
Note Q to Notes to Consolidated Financial Statements.

(3) Gives effect to the sale of the Shares and Warrants offered hereby, the
application of the estimated net proceeds therefrom, including the write-off
of $128,322 of deferred stock offering costs relating to this offering. See
"Use of Proceeds."

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<PAGE>
RISK FACTORS

The securities offered hereby are speculative and involve a high degree of
risk. Prospective investors should carefully consider the following risk factors
before making an investment decision.

Operating Losses; Future Operating Results. Although the Company has
recently generated net income, during the year ended September 29, 1996, the
Company incurred a net loss from continuing operations of $2,870,815 and, at
September 28, 1997, had an accumulated deficit of $2,782,142. The Company's
operating expenses have increased and can be expected to increase significantly
in connection with the Company's proposed expansion (including capital
expenditures for construction of and rental payments for new locations prior to
their opening). The Company's future profitability will depend upon, among other
things, the Company's ability to generate a level of revenues sufficient to
offset its cost structure in addition to reducing its operating costs on a per
location basis. The Company believes that generation of that level of revenues
is dependent upon the timely opening of additional restaurants and future
restaurants achieving and maintaining market acceptance. In addition, the
Company will incur a non-cash interest charge of $482,000 representing the
original issue discount relating to the promissory notes issued to Kayne
Anderson over the life of the promissory notes. There can be no assurance that
the Company will achieve significantly increased revenues or maintain profitable
operations. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and Consolidated Financial Statements.

Significant Capital Requirements; Need for Additional Financing. The
Company's capital requirements have been and will continue to be significant and
its cash requirements have been exceeding its cash flow from operations (at
September 28, 1997, the Company had a working capital deficit of $2,551,009) due
to, among other things, costs associated with development, opening and start-up
costs of Lundy's and American Park and building a corporate infrastructure
sufficient to support the Company's proposed expanded operations. As a result,
the Company has been substantially dependent upon sales of its equity
securities, loans from financial institutions and the Company's officers,
directors and stockholders and bartering transactions with member dining clubs
to finance a portion of its working capital requirements. The Company is
dependent upon the proceeds of this offering to finance a portion of its
proposed expansion over the 12 months following the consummation of this
offering. Based on the Company's current proposed plans and assumptions relating
to the implementation of its expansion strategy (including the timetable of
opening American Park and new Lundy's locations and the costs associated
therewith), the Company anticipates that the net proceeds of this offering,
together with anticipated cash flow from operations and equipment, vendor and
landlord financing, will be sufficient to satisfy its contemplated cash
requirements for at least 12 months following the consummation of this offering.
In the event that the Company's plans change or its assumptions prove to be
inaccurate (due to unanticipated expenses, construction delays or other
difficulties) or the proceeds of this offering otherwise prove to be
insufficient to fund operations and implement the Company's proposed expansion
strategy, the Company could be required to seek additional financing sooner than
anticipated. Other than the ability to enter into bartering transactions with
member dining clubs, the Company has no current arrangements with respect to, or
potential sources of, additional financing, and it is not anticipated that any
officers, directors or stockholders will provide any additional loans to the
Company. Consequently, there can be no assurance that any additional financing
will be available to the Company when needed, on commercially reasonable terms,
or at all. Any inability to obtain additional financing when needed would have a
material adverse effect on the Company, including requiring it to curtail its
expansion efforts. In addition, any additional equity financing may involve
substantial dilution to the interests of the Company's then existing
stockholders. See "Use of Proceeds," "Dilution," "Capitalization" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

Limited Restaurant Base; Dependence Upon Principal Restaurants; High
Restaurant Failure Rate. To date, all of the Company's revenues have been
derived from only two restaurants, one of which has been in operation only since
1995 and both of which are located in New York City. The results achieved to
date by the Company's small restaurant base may not be indicative of the
prospects or market acceptance of a larger number of restaurants or of more
geographically dispersed restaurants located in areas with more varied
demographic characteristics. Moreover, the opening of new restaurants is
characterized by a very high failure rate. Although The Boathouse has operated
successfully for many years, there can be no assurance that American Park or any

8
<PAGE>

new Lundy's restaurants will be successful or operate profitably. In addition,
the Company expects that during the first several months of operation of a newly
opened restaurant, such restaurant could operate at a loss. In the event of a
prolonged period of unfavorable operating results for a restaurant, the Company
may be required to close such restaurant, which could have a material adverse
effect on the financial condition and results of operations of the Company. In
the short term, the Company will remain dependent upon a limited number of
high-volume restaurants for substantially all of its revenues. The lack of
success or closing of any of the Company's existing restaurants, or the
unsuccessful operation of a new restaurant, would have material adverse effect
upon the financial condition and results of operations of the Company. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business."

Risks Relating to Proposed Expansion. The Company is currently implementing
a strategy to expand its operations and will seek to open American Park and
additional Lundy's restaurants. The Company has limited experience in
effectuating rapid expansion and in managing a large number of locations or
locations that are geographically dispersed. The Company intends to open
American Park by March 1998 and three Lundy's restaurants during the 12 months
following the consummation of this offering. The Company's proposed expansion
will be dependent on, among other things, the proceeds of this offering, the
availability of other sources of financing, achieving significant market
acceptance for its Lundy's concept, distinguishing the Lundy's concept from
other seafood restaurants, developing customer recognition and loyalty for the
Lundy's name, identifying a sufficient number of prime locations and entering
into lease arrangements for such locations on favorable terms, timely
development and construction of American Park and new Lundy's locations,
securing required governmental permits and approvals, hiring, training and
retaining skilled management and other personnel, the Company's ability to
integrate new restaurants into its operations and the general ability to
successfully manage growth (including monitoring restaurant operations,
controlling costs and maintaining effective quality controls). In the event that
cash flow from operations is insufficient or that the Company is unable to
obtain adequate equipment, vendor or landlord financing, or other unexpected
events occur, such as delays in identifying suitable locations, negotiating
leases, obtaining permits or design and construction delays, the Company may not
be able to open all of such locations in a timely manner, or at all. Moreover,
the Company believes that consumer recognition and perception of the Lundy's
name has contributed to the success of the existing Lundy's restaurant. Consumer
recognition of the Lundy's name outside of the New York City area is likely to
be significantly less than in the New York area and, therefore, the success of
any future Lundy's restaurant will be dependent upon the Company's ability to
distinguish such location from its competitors on bases such as price, quality
and service. There can be no assurance that the Company will be successful in
opening the number of restaurants currently planned in a timely manner, or at
all, or that, if opened, those restaurants will operate profitably. See
"Business -- Expansion Strategy."

Long Start-up Cycles; Fluctuations in Operating Results; Start-up Expense.
The Company's restaurant start-up cycle, which generally commences with site
selection and ends upon the opening of the restaurant to customers, will vary by
location and could extend for periods of six months or more. Difficulties or
delays in site selection or events over which the Company will have no control,
such as delays in construction due to governmental regulatory approvals,
shortage of or the inability to obtain labor and/or materials, inability of the
general contractor or subcontractors to perform under their contracts, strikes
or availability and cost of needed debt or lease financing, could materially
adversely affect the start-up costs and completion times of new locations. The
Company expects that future quarterly operating results will fluctuate as a
result of the timing of, and expenses related to, the openings of new
restaurants (since the Company will incur significant expenses during the months
preceding the opening of a restaurant), as well as due to various other factors,
including the seasonal nature of its business, weather conditions in New York
City, the health of New York City's economy in general and its tourism industry
in particular. Accordingly, the Company's sales and earnings may fluctuate
significantly from quarter to quarter and operating results for any quarter will
not necessarily be indicative of the results that may be achieved for a full
year. In addition, the capital resources required to construct each new location
are significant. The Company estimates that the costs of constructing its future
Lundy's locations will be approximately $1.5 million per location, net of
anticipated landlord contributions. The Company expects that it will incur
approximately $300,000 in additional pre-opening costs in connection with the
opening of future sites. There can be no assurance that the costs to construct
and open any new location will not be significantly higher than currently
anticipated. See "Management's Discussion and Analysis of Results of Operations"
and "Business -- Site Selection."

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<PAGE>

Consumer Preferences; Factors Affecting the Restaurant Industry. The
restaurant industry is characterized by the introduction of new concepts and is
subject to changing consumer preferences, tastes and eating and purchasing
habits. While the demand for premium quality seafood restaurants has grown
significantly over the past several years, there can be no assurance that such
demand will continue to grow or that these trends will not be reversed.
Moreover, since prices for seafood menu items are typically higher than those
for other menu items, unfavorable national, regional or local economic factors
could adversely affect consumer willingness to pay higher prices for the
Company's menu items. The Company's success will depend on its ability to
anticipate and respond to changing consumer preferences, tastes and eating and
purchasing habits, as well as other factors affecting the food service industry,
including new market entrants, demographic trends and unfavorable national,
regional and local economic conditions, inflation, increasing seafood and other
food and labor costs. Failure to respond to such factors in a timely manner
could have a material adverse effect on the Company. See "Business."

Geographic Concentration. Both of the Company's existing restaurants are
located in New York City and the restaurant currently under construction is also
located in New York City. Given the Company's present geographic concentration,
adverse publicity relating to the Company's restaurants could have a more
pronounced adverse effect on the Company's operating results than might be the
case if the Company's restaurants were more geographically dispersed. A decline
in tourism in New York City, or in general economic conditions, which would
likely affect the New York City economy or tourism industry, particularly during
the time of peak sales, could have a material adverse effect on the Company's
operations and prospects. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business."

Seasonality. The Company's business is seasonal. The restaurant and bicycle
and rowboat rentals at The Boathouse currently are open only March through
November, with dinner served in the restaurant from May 1 through October 1. All
of the seating of The Boathouse restaurant and a portion of the seating at
Lundy's is outdoors. In addition, since Lundy's is a waterside location, it
attracts more guests during the warmer weather months. As a result, the
Company's restaurant sales generally increase from May through September, and
decrease from November through March. See "Management's Discussion and Analysis
of Results of Operations -- Seasonality and Fluctuations in Quarterly Operating
Results" and "Business."

Menu Emphasis on Seafood; Seafood Quality. Lundy's currently has a limited
product offering which specializes in seafood. Sales of seafood accounted for
approximately 58% and 62% of the Company's sales during the years ended
September 29, 1996 and September 28, 1997, respectively. The Company anticipates
that sales of seafood products will continue to account for a substantial
portion of the Company's revenues for the foreseeable future, particularly as a
result of the planned expansion of the Lundy's concept. Accordingly, a rise in
prices or decline in sales of such menu items, due to evolving consumer
preferences, industry trends, or other reasons, could have an adverse effect on
the Company. Moreover, some types of seafood have been subject to adverse
publicity because of claims of contamination by lead, mercury or other chemicals
in the oceans, which can adversely affect both market demand and supply for such
food products. Customer demand may also be negatively impacted by reports of
medical or other risks resulting from the consumption of seafood. The Company
maintains a continuous inspection program for its food purchases and believes
that it has not experienced any adverse effect from contaminated seafood.
Nevertheless, there can be no assurance that food contamination or consumer
perception of inadequate food quality, in the industry in general or as to the
Company in particular, will not have a material adverse effect on the Company's
operations and profitability. See "Business -- Lundy's Concept -- Menu" and
"--Restaurant Operations."

Fluctuations in Food and Other Costs; Supply of Seafood. The Company's
profitability is dependent on its ability to anticipate and react to increases
in food, labor, employee benefits, and similar costs over which the Company has
limited control. Specifically, the Company's dependence on frequent deliveries
of seafood, meat and produce subjects it to the risk of possible shortages or
interruptions in supply caused by adverse weather, labor, transportation or
other conditions which could adversely affect the availability and cost of such
items. In recent years, the availability of certain types of seafood has
fluctuated, resulting in corresponding fluctuations in prices. The Company has
been able to anticipate and react to fluctuations in food costs through selected
menu price adjustments, purchasing seafood directly from numerous suppliers and
promoting certain alternative menu selections (in response to price and
availability of supply). However, there can be no assurance that the Company
will be able to continue to anticipate and respond to such supply and price
fluctuations in the future or that

10
<PAGE>
the Company will not be subject to significantly increased costs in the future.
Moreover, the Company does not maintain contracts with any of its suppliers and
purchases products pursuant to purchase orders placed from time to time in the
ordinary course of business. Although the Company believes that its
relationships with its suppliers are satisfactory and that alternative sources
are readily available, the loss of certain suppliers, or substantial price
increases, could have a material adverse effect on the Company. See "Business --
Restaurant Operations."

Operating License Requirements; Audit By New York City Comptroller. The
Boathouse and American Park are located in New York City's Central Park and
Battery Park, respectively. In order to operate these restaurants, the Company
obtained licenses from the New York City Department of Parks (the "Parks
Department") through an open bidding process. The license agreements impose
certain requirements and operating restrictions on the Company, such as minimum
hours of operation. Although certain aspects of the Company's operating
practices are not in full conformity with the terms of The Boathouse license,
including the hours of operation of the facility, the Company believes that the
Parks Department is aware of its operating practices and the Parks Department
has not objected to the variances from the terms of such license. The license
agreement relating to The Boathouse expires on June 29, 2000 and each license
can nevertheless be terminated by the Parks Department on short notice. There
can be no assurance that the Company will be able to obtain an extension or a
new license to operate The Boathouse or that either license will not be
terminated. In the event that a license is terminated or not renewed (due to
non-conformity with the terms of the license or otherwise), or a new license is
not obtained upon expiration of The Boathouse license, the Company would be
required to cease operating the location, which would have a material adverse
effect on the Company. In addition, the licenses require the Company to pay a
license fee based on the greater of a minimum annual fee or a percentage of
gross sales. The Company is subject to audit by the New York City Comptroller to
determine the accuracy of license fees paid by the Company. See "Business."

Significant Outstanding Indebtedness. In order to finance its capital
requirements, the Company has incurred significant indebtedness. At September
28, 1997, there was outstanding approximately $3,737,233 of current liabilities
and, in October 1997, the Company borrowed $1,000,000. The Company has not
allocated any portion of the proceeds of this offering to repay a portion of its
outstanding indebtedness. There can be no assurance that cash flow from
operations will be sufficient to repay indebtedness, and the Company could be
required to use a portion of the proceeds of this offering to repay the amounts
then outstanding and would result in less funds available for proposed
expansion. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Liquidity and Capital Resources."

Competition. The restaurant industry is intensely competitive with respect
to price, service, location and food quality and variety. There are many
well-established competitors with substantially greater financial and other
resources than the Company, as well as a significant number of new market
entrants. Such competitors include national, regional and local full-service
casual dining chains, many of which specialize in or offer seafood products, as
well as single location restaurants. Some of the Company's competitors have been
in existence for substantially longer periods than the Company, may be better
established in the markets where the Company's restaurants are or may be located
and engage in extensive advertising and promotional campaigns, both generally
and in response to efforts by competitors to open new locations or introduce new
concepts or menu offerings. The Company can also be expected to face competition
from a broad range of other restaurants and food service establishments which
specialize in a variety of cuisines. While the Company believes that it offers a
broad variety of quality menu items, there can be no assurance that consumers
will regard the Company's menu and concepts as sufficiently distinguishable from
competitive menus and restaurant concepts or that substantially equivalent menus
and restaurant concepts will not be introduced by the Company's competitors.
Moreover, the Company believes that the start-up costs associated with opening a
seafood restaurant are not a significant impediment to enter the seafood
restaurant industry. See "Business -- Competition."

Litigation; Insurance and Potential Liability. The operation of restaurants
and rowboat and bicycle rentals subjects the Company to potential claims from
others, including consumers, employees and other service providers, for personal
injury (resulting from, among other things, contaminated or spoiled food or
beverages or accidents). The Company is a defendant in several lawsuits arising
in ordinary course of its business relating to personal injury claims by
plaintiffs which are seeking damages substantially in excess of the Company's
assets and insurance coverage. The Company is vigorously defending each action
and believes that such matters are

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<PAGE>

adequately covered by insurance or, if not so covered, are without merit or are
of such nature or involve such amounts that an unfavorable disposition would not
have a material adverse effect on the financial position or operations of the
Company. However, since these matters are in the preliminary stages, there can
be no assurance that any such action will be resolved in favor of the Company or
that the outcome of any litigation or settlement will not have a material
adverse effect on financial conditions or operations of the Company. The Company
maintains personal injury and products liability insurance (with coverage in
amounts up to $1,000,000 per occurrence and $5,000,000 ($10,000,000 for Lundy's)
of umbrella liability coverage), including insurance relating to property
insurance, in amounts which the Company currently considers adequate.
Nevertheless, a partially or completely uninsured claim against the Company, if
successful, could have a material adverse effect on the Company. See "Business
- -- Insurance" and "--Legal Proceedings."

Potential Liability for Sale of Alcoholic Beverages. The Company is subject
to "dram-shop" statutes, which generally provide a person injured by an
intoxicated person the right to recover damages from an establishment that
wrongfully served alcoholic beverages to the intoxicated person. New York law
currently provides that a vendor of alcoholic beverages may be held liable in a
civil cause of action for injury or damage caused by or resulting from the
intoxication of a minor (under 21 years of age) if the vendor willfully,
knowingly and unlawfully sells or furnishes alcoholic beverages to the minor and
knows that the minor will soon thereafter be driving a motor vehicle. A vendor
can similarly be held liable if it knowingly provides alcoholic beverages to a
person who is in a noticeable state of intoxication, knows that person will soon
thereafter be driving a motor vehicle and injury or damage is caused by that
person. In addition, significant national attention is focused on the problem of
drunk driving, which could result in the adoption of additional legislation and
increased potential liability of the Company for damage or injury caused by its
customers. See "Business -- Government Regulation."

Government Regulation. The Company is subject to extensive state and local
government regulation by various governmental agencies, including state and
local licensing, zoning, land use, construction and environmental regulations
and various regulations relating to the sale of food and beverages, sanitation,
disposal of refuse and waste products, public health, safety and fire standards.
The Company's restaurants are subject to periodic inspections by governmental
agencies to assure conformity with such regulations. Difficulties or failure in
obtaining required licensing or other regulatory approvals could delay or
prevent the opening of a new restaurant, and the suspension of, or inability to
renew, a license at an existing restaurant would adversely affect the operations
of the Company. Restaurant operating costs are also affected by other government
actions which are beyond the Company's control, including increases in the
minimum hourly wage requirements, workers compensation insurance rates, health
care insurance costs and unemployment and other taxes. The Federal Americans
With Disabilities Act ("ADA") prohibits discrimination on the basis of
disability in public accommodations and employment. The Company's restaurants
are currently designed to be accessible to the disabled, and the Company
believes that it is in compliance with all current applicable regulations
relating to accommodations for the disabled. However, there can be no assurance
that the Company will not be deemed to violate the ADA, and could be required to
expend significant funds to provide service to or make reasonable accommodations
for disabled persons. See "Business -- Government Regulation."

Uncertainty of Protection of Proprietary Information. The Company's
business prospects will depend largely on the Company's ability to capitalize on
favorable consumer recognition of the Lundy's name. Although the Company holds a
trademark registration for use of the Lundy's name by the U.S. Patent and
Trademark Office, there can be no assurance that the Company's marks do not or
will not violate the proprietary rights of others or that the Company's marks
would be upheld, or that the Company would not be prevented from using its
marks, if challenged, any of which could have an adverse effect on the Company.
In addition, the Company relies on trade secrets and proprietary know-how, and
employs various methods, to protect its concepts and recipes. However, such
methods may not afford complete protection and there can be no assurance that
others will not independently develop similar know-how or obtain access to the
Company's know-how, concepts and recipes. The Company does not maintain
confidentiality and non-competition agreements with all of its executives, key
personnel or suppliers. There can be no assurance that the Company will be able
to adequately protect its trade secrets. In the event competitors independently
develop or otherwise obtain access to the Company's know-how, concepts, recipes
or trade secrets, the Company may be adversely affected. See "Business --
Intellectual Property."

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<PAGE>

Control by Management. Upon the consummation of this offering, the
Company's current officers and directors will, in the aggregate, beneficially
own approximately 56.5% of the outstanding Common Stock of the Company.
Accordingly, such persons will be able to control the Company and generally
direct the Company's affairs, including electing a majority of the Company's
directors and causing an increase in the Company's authorized capital or the
dissolution, merger, or sale of the Company or substantially all of its assets.
See "Principal Stockholders."

Dependence Upon Key Personnel. The success of the Company will be largely
dependent upon the efforts of Frank Cretella, Chief Executive Officer and
President of the Company. Although the Company has entered into an employment
agreement with Mr. Cretella, Mr. Cretella is only required to devote a majority
of his business time to the Company's business and affairs. The loss of the
services of Mr. Cretella or other key personnel would have a material adverse
effect on the Company's business and prospects. The Company maintains key-man
insurance on the life of Mr. Cretella in the amount of $500,000. The success of
the Company will also be dependent on its ability to attract and retain
experienced management and restaurant industry personnel. The Company faces
considerable competition from other food service businesses for such personnel,
many of which have significantly greater resources than the Company. There can
be no assurance that the Company will be able to attract and retain such
personnel, and the inability to do so could have a material adverse effect on
the Company. See "Management."

Conflicts of Interest. The Company has, from time to time, entered into
transactions with certain of its officers, directors and stockholders and/or
affiliates of such persons, which could result in potential conflicts of
interest. Although in connection with the Acquisition, the assets relating to
TAM's food concession operations were transferred to American Leisure and
American Leisure assumed the Company's obligations under its agreement to
operate the concession in the Central Park Zoo, the Company is still a party to
such agreement and, in the event that American Leisure fails to pay any amounts
due under such agreement, the Company will be responsible for such obligations.
There can be no assurance that future transactions or arrangements between the
Company and its affiliates will be advantageous to the Company, that conflicts
of interest will not arise with respect thereto, or that, if conflicts do arise,
they will be resolved in a manner favorable to the Company. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources" and "Certain Transactions."

No Dividends. The Company has never paid any dividends on its Common Stock
and does not anticipate paying cash dividends in the foreseeable future. The
Company currently intends to retain all earnings for use in connection with the
expansion of its business and for general corporate purposes. The declaration
and payment of future dividends, if any, will be at the sole discretion of the
Company's Board of Directors and will depend upon the Company's profitability,
financial condition, cash requirements, future prospects, and other factors
deemed relevant by the Board of Directors. See "Dividend Policy" and
"Description of Securities -- Capital Stock."

Dilution. This offering involves an immediate and substantial dilution of
$3.66 per Share (or 73.2%) between the adjusted net tangible book value per
share of Common Stock after this offering and the initial public offering price
per Share in this offering. See "Dilution."

Shares Eligible for Future Sale. Upon consummation of this offering, the
Company will have 3,500,000 shares of Common Stock outstanding (assuming no
exercise of the Warrants), of which the 1,000,000 shares of Common Stock offered
hereby will be freely tradable without restriction or further registration under
the Securities Act of 1933, as amended (the "Securities Act"). All of the
remaining 2,500,000 shares of Common Stock outstanding are "restricted
securities," as that term is defined under Rule 144 promulgated under the
Securities Act and all of such restricted shares will become eligible for sale,
pursuant to Rule 144, 90 days following the date of this Prospectus, subject to
the agreements set forth below. The holders of 227,730 shares of Common Stock
and the holders of the 310,000 Selling Securityholders' Warrants and 3,000 other
outstanding warrants have agreed not to sell such securities for a period of 15
months from the date of this Prospectus without the Underwriter's prior written
consent; the holders of 241,592 shares of Common Stock and the holders of
200,000 outstanding warrants have agreed not to sell such securities for a
period of 18 months from the date of this Prospectus without the Underwriter's
prior written consent; and the holders of 1,979,673 shares of Common Stock have
agreed not to sell such shares for a period of 24 months from the date of this
Prospectus without the prior

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<PAGE>

written consent of the Underwriter. The Underwriter has not entered into any
agreements to waive the foregoing lockup agreements. No prediction can be made
as to the effect, if any, that sales of shares of Common Stock or even the
availability of such shares for sale will have on the market prices prevailing
from time to time. The possibility that substantial amounts of Common Stock may
be sold in the public market may adversely affect the prevailing market price
for the Common Stock and could impair the Company's ability to raise capital
through the sale of its equity securities. See "Shares Eligible for Future Sale"
and "Underwriting."

Possible Adverse Effect of Outstanding Warrants and Options. Upon the
consummation of this offering, there will be 500,000 shares reserved for
issuance upon exercise of the Warrants, approximately 310,000 shares reserved
for issuance upon the exercise of the Selling Securityholders' Warrants at an
exercise price of $6.00 per share, 3,000 shares reserved for issuance upon the
exercise of other outstanding warrants at an exercise price of $.01 per share,
200,000 shares reserved for issuance upon exercise of other outstanding warrants
at an exercise price of $5.00 per share, an aggregate of 150,000 shares of
Common Stock reserved for issuance upon exercise of the Underwriter's Warrants
and the warrants included therein and 259,250 shares reserved for issuance upon
exercise of options granted under the Option Plan at an exercise price of $5.00
per share. To the extent that any outstanding warrants or options are exercised,
dilution of the interests of the holders of the Company's Common Stock will
occur and any sales in the public market of the shares underlying such warrants
and options may adversely affect prevailing market prices for the Common Stock
and the Warrants. Moreover, the terms upon which the Company will be able to
obtain additional equity may be adversely affected since the holders of the
outstanding warrants and options can be expected to exercise them at a time when
the Company would, in all likelihood, be able to obtain capital on terms more
favorable to the Company than those provided by such securities. See
"Management" and "Description of Securities."

Indemnification and Exculpation of Officers and Directors. The Company's
Certificate of Incorporation provides for indemnification of officers and
directors to the fullest extent permitted by Delaware law. In addition, under
the Company's Certificate of Incorporation, no director shall be liable
personally to the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director, provided that the Certificate of Incorporation
does not eliminate the liability of a director for (i) any breach of the
director's duty of loyalty to the Company or its stockholders; (ii) acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law; (iii) acts or omissions in respect of certain unlawful
dividend payments or stock redemptions or repurchases; or (iv) any transaction
from which such director derives improper personal benefit. As a result of such
provisions in the Certificate of Incorporation and the By-Laws of the Company,
stockholders may be unable to recover damages against the directors and officers
of the Company for actions taken by them which constitute negligence, gross
negligence or a violation of their fiduciary duties, which may reduce the
likelihood of stockholders instituting derivative litigation against directors
and officers and may discourage or deter stockholders from suing directors,
officers, employees and agents of the Company for breaches of their duty of
care, even though such an action, if successful, might otherwise benefit the
Company and its stockholders. See "Management -- Indemnification and Exculpation
Provisions."

Delaware Anti-Takeover Statute; Possible Adverse Effects of Authorization
of Preferred Stock. As a Delaware corporation, upon the consummation of this
offering, the Company will become subject to prohibitions imposed by Section 203
of the Delaware General Corporation Law ("DGCL"). In general, this statute will
prohibit the Company from entering into certain business combinations without
the approval of its Board of Directors and/or stockholders and, as such, could
prohibit or delay mergers or other attempted takeovers or changes in control
with respect to the Company. Such provisions may discourage attempts to acquire
the Company. In addition, the Company's Certificate of Incorporation authorizes
the Company's Board of Directors to issue up to 1,000,000 shares of "blank
check" preferred stock (the "Preferred Stock") without stockholder approval, in
one or more series and to fix the dividend rights, terms, conversion rights,
voting rights, redemption rights and terms, liquidation preferences, and any
other rights, preferences, privileges, and restrictions applicable to each new
series of Preferred Stock. The issuance of shares of Preferred Stock in the
future could, among other results, adversely affect the voting power of the
holders of Common Stock and, under certain circumstances, could make it
difficult for a third party to gain control of the Company, prevent or
substantially delay a change in control, discourage bids for the Common Stock at
a premium, or otherwise adversely affect the market price of the Common Stock.
See "Description of Securities."

No Assurance of Public Market; Arbitrary Determination of Offering Prices;
Possible Volatility of Market Price of Common Stock and Warrants; Underwriter's
Potential Influence on the Market. Prior to this offering,

14
<PAGE>

there has been no public trading market for the Common Stock or Warrants. There
can be no assurance that a regular trading market for the Common Stock or
Warrants will develop after this offering or that, if developed, it will be
sustained. Moreover, the initial public offering prices of the Common Stock and
the Warrants and the exercise price of the Warrants have been determined by
negotiations between the Company and the Underwriter and, as such, are arbitrary
in that they do not necessarily bear any relationship to the assets, book value
or potential earnings of the Company or any other recognized criteria of value
and may not be indicative of the prices that may prevail in the public market.
The market prices of the Company's securities following this offering may be
highly volatile as has been the case with the securities of other emerging
companies. Factors such as the Company's operating results, openings of new
locations, announcements by the Company or its competitors and various factors
affecting the restaurant industry generally may have a significant impact on the
market price of the Company's securities. In addition, in recent years, the
stock market has experienced a high level of price and volume volatility and
market prices for the stock of many companies have experienced wide price
fluctuations which have not necessarily been related to the operating
performance of such companies. Although it has no obligation to do so, the
Underwriter intends to make a market in the Common Stock and Warrants and may
otherwise effect transactions in the Common Stock and Warrants. If the
Underwriter makes a market in the Common Stock or Warrants, such activities may
exert a dominating influence on the market and such activity may be discontinued
at any time. The prices and liquidity of the Common Stock and Warrants may be
significantly affected to the extent, if any, that the Underwriter participates
in such market. See "Underwriting."

Possible Delisting of Securities from Nasdaq System; Risks Relating to
Low-Priced Stocks. It is currently anticipated that the Company's Common Stock
and Warrants will be eligible for listing on Nasdaq upon the completion of this
offering. In order to continue to be listed on Nasdaq, however, the Company must
maintain $2,000,000 in net tangible assets (total assets, other than goodwill,
less total liabilities), and a $1,000,000 market value of the public float. In
addition, continued inclusion requires two market-makers, a minimum bid price of
$1.00 per share and adherence to certain corporate governance provisions. The
failure to meet these maintenance criteria in the future may result in the
delisting of the Company's securities from Nasdaq, and trading, if any, in the
Company's securities would thereafter be conducted in the non-Nasdaq
over-the-counter market. As a result of such delisting, an investor could find
it more difficult to dispose of, or to obtain accurate quotations as to the
market value of, the Company's securities.

In addition, if the Common Stock and Warrants were to become delisted from
trading on Nasdaq and the trading price of the Common Stock were to fall below
$5.00 per share, trading in the Common Stock would also be subject to the
requirements of certain rules promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), which require additional disclosure by
broker-dealers in connection with any trades involving a stock defined as a
penny stock (generally, any non-Nasdaq equity security that has a market price
of less than $5.00 per share, subject to certain exceptions). Such rules require
the delivery, prior to any penny stock transaction, of a disclosure schedule
explaining the penny stock market and the risks associated therewith and impose
various sales practice requirements on broker-dealers who sell penny stocks to
persons other than established customers and accredited investors (generally
defined as an investor with a net worth in excess of $1,000,000 or annual income
exceeding $200,000 individually or $300,000 together with a spouse). For these
types of transactions, the broker-dealer must make a special suitability
determination for the purchaser and have received the purchaser's written
consent to the transaction prior to the sale. The broker-dealer also must
disclose the commissions payable to the broker-dealer, current bid and offer
quotations for the penny stock and, if the broker-dealer is the sole
market-maker, the broker-dealer must disclose this fact and the broker-dealer's
presumed control over the market. Such information must be provided to the
customer orally or in writing before or with the written confirmation of trade
sent to the customer. Monthly statements must be sent disclosing recent price
information for the penny stock held in the account and information on the
limited market in penny stocks. The additional burdens imposed upon
broker-dealers by such requirements could, in the event the Common Stock were
deemed to be a penny stock, discourage broker-dealers from effecting
transactions in the Common Stock which could severely limit the market liquidity
of the Common Stock and the ability of purchasers in this offering to sell the
Common Stock in the secondary market.

Potential Adverse Effect of Warrant Redemption. The Warrants are subject to
redemption by the Company at any time upon notice of not less than 30 days, at a
price of $.10 per Warrant, provided that the closing bid quotation of the Common
Stock on all 20 trading days ending on the third trading day prior to the day on
which

15
<PAGE>

the Company gives notice (the "Call Date") has been at least 150% (currently
$9.00, subject to adjustment) of the then effective exercise price of the
Warrants and the Company obtains the written consent of the Underwriter to such
redemption prior to the Call Date. Redemption of the Warrants could force the
holders to exercise the Warrants and pay the exercise price at a time when it
may be disadvantageous for the holders to do so, to sell the Warrants at the
then current market price when they might otherwise wish to hold the Warrants,
or to accept the redemption price, which is likely to be substantially less than
the market value of the Warrants at the time of redemption. See "Description of
Securities -- Redeemable Warrants. "

Possible Inability to Exercise Warrants. The Company intends to qualify the
sale of the securities offered hereby in a limited number of states. Although
certain exemptions in the securities laws of certain states might permit the
Warrants to be transferred to purchasers in states other than those in which the
Warrants are initially qualified, the Company will be prevented from issuing
Common Stock in such states upon the exercise of the Warrants unless an
exemption from qualification is available or unless the issuance of Common Stock
upon exercise of the Warrants is qualified. The Company may decide not to seek
or may not be able to obtain qualification of the issuance of such Common Stock
in all of the states in which the ultimate purchasers of the Warrants reside. In
such a case, the Warrants held by purchasers will expire and have no value if
such Warrants cannot be sold. Accordingly, the market for the Warrants may be
limited because of these restrictions. Further, a current prospectus covering
the Common Stock issuable upon exercise of the Warrants must be in effect before
the Company may accept Warrant exercises. There can be no assurance the Company
will be able to have a current prospectus in effect when this Prospectus is no
longer current, notwithstanding the Company's commitment to use its best efforts
to do so. See "Description of Securities -- Redeemable Warrants."

Possible Restrictions on Market-Making Activities in the Company's
Securities. The Company believes that the Underwriter intends to make a market
in the Company's securities and may be responsible for a substantial portion of
the market making activities in the Company's securities. Regulation M of the
federal securities laws may prohibit the Underwriter from engaging in any
market-making activities with regard to the Company's securities for the period
from five business days (or such other applicable period as Regulation M may
provide) prior to any solicitation by the Underwriter of the exercise of
Warrants until the termination (by waiver or otherwise) of any right that the
Underwriter may have to receive a fee for the exercise of Warrants following
such solicitation; and for any period during which the Underwriter, or any
affiliated parties, participate in a distribution of any securities of the
Company for the account of the Underwriter or any such affiliate. As a result,
the Underwriter may be unable to provide a market for the Company's securities
during certain periods, including while the Warrants are exercisable. Any
temporary cessation of such market-making activities could have an adverse
effect on the liquidity and market price of the Company's securities. See
"Underwriting."

16
<PAGE>
USE OF PROCEEDS

The net proceeds to the Company from the sale of the 1,000,000 Shares and
500,000 Warrants offered hereby are estimated to be $3,900,000 ($4,559,025 if
the Underwriter's over-allotment option is exercised in full). The Company
expects to use the net proceeds over the next 12 months approximately as
follows:
<TABLE>
<CAPTION>
Approximate
Approximate Percentage of
Application of Proceeds Dollar Amount Dollar Amount
- ----------------------- --------------- -------------
<S> <C> <C>
Construction of new restaurants(1) ..................... $3,500,000 89.7%
Working capital and general corporate purposes(2) ...... 400,000 10.3
---------- -----
Total ................................................ $3,900,000 100.0%
========== =====
</TABLE>

- ------------
(1) Represents net proceeds allocated to construct three Lundy's restaurants.
The Company estimates that the cost to construct a Lundy's restaurant will
be approximately $1,500,000 per location (net of anticipated landlord
contributions) and that the cost, if any, to open such restaurants in excess
of the net proceeds of this offering allocated for such purpose will be
financed through cash flow from operations, equipment and vendor financing
and landlord development concessions and rent allowances. In connection with
its expansion strategy, to the extent appropriate opportunities arise, the
Company may use a portion of such proceeds to open high-volume landmark-type
restaurants. In the event that cash flow from operations is insufficient or
that the Company is unable to obtain adequate equipment, vendor or landlord
financing, or other unexpected events occur, such as delays in identifying
suitable locations, negotiating leases, obtaining permits or design and
construction delays, the Company will not be able to open all of such
locations in a timely manner, or at all. See "Business --Expansion Strategy"
and "-- Site Selection."

(2) Includes costs of general corporate overhead, capital expenditures for
existing restaurants and maintaining inventory. To the extent cash flow from
operations is insufficient, such proceeds may be used to finance the
pre-opening expenses of Lundy's restaurants.

If the Underwriter exercises its over-allotment option in full, the Company
will realize additional net proceeds of $659,025, which will be added to the
Company's working capital.

The allocation of the net proceeds from this offering set forth above
represents the Company's best estimate based upon its currently proposed plans
and assumptions relating to its operations and certain assumptions regarding
general economic conditions. If any of these factors change, the Company may
find it necessary or advisable to reallocate some of the proceeds within the
above-described categories or to use portions thereof for other purposes.

Based on the Company's current proposed plans and assumptions relating to
the implementation of its expansion strategy (including the timetable of opening
American Park and new Lundy's locations and the costs associated therewith), the
Company anticipates that the net proceeds of this offering, together with
anticipated cash flow from operations and equipment, vendor and landlord
financing, will be sufficient to satisfy its contemplated cash requirements for
at least 12 months following the consummation of this offering. In the event
that the Company's plans change or its assumptions prove to be inaccurate (due
to unanticipated expenses, construction delays or other difficulties) or the
proceeds of this offering otherwise prove to be insufficient to fund operations
and implement the Company's proposed expansion strategy, the Company could be
required to seek additional financing sooner than anticipated. Because the
Company's strategy is to open a limited number of high-volume restaurants, the
costs associated with opening any such restaurant may vary substantially. Other
than the ability to enter into bartering transactions with member dining clubs,
the Company has no current arrangements with respect to, or potential sources
of, additional financing, and it is not anticipated that any officers, directors
or stockholders will provide any additional loans to the Company. Consequently,
there can be no assurance that any additional financing will be available to the
Company when needed, on commercially reasonable terms, or at all. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

Proceeds not immediately required for the purposes described above will be
invested principally in United States government securities, short-term
certificates of deposit, money market funds or other short-term interest bearing
investments.

17
<PAGE>

DILUTION

The difference between the initial public offering price per Share and the
adjusted net tangible book value per share of Common Stock after this offering
constitutes the dilution to investors in this offering. Net tangible book value
per share of Common Stock on any given date is determined by dividing the net
tangible book value of the Company (total tangible assets less total
liabilities) on that date, by the number of shares of Common Stock outstanding
on that date.

As of September 28, 1997, the net tangible book value of the Company was
$176,980 or $.07 per share of Common Stock. After giving effect to the Pro Forma
Adjustment (see footnote 2 of "Prospectus Summary -- Summary Financial
Information") the net tangible book value of the Company was $658,980 or $.26
per share. After also giving effect to the sale of the 1,000,000 Shares and
500,000 Warrants being offered hereby (less underwriting discounts and
commissions and estimated expenses of this offering), the adjusted net tangible
book value of the Company as of September 28, 1997 would have been $4,687,302 or
$1.34 per share, representing an immediate increase in net tangible book value
of $1.08 per share of Common Stock to existing stockholders and an immediate
dilution of $3.66 per share (or 73.2%) to new investors. The following table
illustrates this dilution to new investors on a per share basis:
<TABLE>
<S> <C> <C>
Public offering price ....................................... $ 5.00
Net tangible book value before Pro Forma Adjustment ......... $.07
Increase attributable to Pro Forma Adjustment ............... .19
----
Pro forma net tangible book value before this offering ...... .26
Increase attributable to this offering ..................... 1.08
----
Adjusted net tangible book value after this offering ......... 1.34
------
Dilution to investors in this offering ........................ $ 3.66
======
</TABLE>

The following table sets forth, with respect to existing stockholders and
new investors in this offering, a comparison of the number of shares of Common
Stock issued by the Company, the percentage of ownership of such shares, the
total cash consideration paid, the percentage of total cash consideration paid
and the average price per share.

<TABLE>
<CAPTION>
Total Cash
Shares Purchased Consideration Paid Average
----------------------- ------------------------ Price
Number Percent Amount Percent Per Share
----------- --------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C>
Existing stockholders ...... 2,500,000 71.4% $3,108,046 38.3% $ 1.24
New investors ............... 1,000,000 28.6 5,000,000 61.7 5.00
--------- ----- ---------- -----
Total .................. 3,500,000 100.0% $8,108,046 100.0%
========= ===== ========== =====
</TABLE>
The above table assumes no exercise of the Underwriter's over-allotment
option. If such option is exercised in full, the new investors will have paid
$5,750,000 for 1,150,000 shares of Common Stock, representing approximately
64.9% of the total consideration for 31.5% of the total number of shares of
Common Stock outstanding.

In addition, the table assumes no exercise of other outstanding stock
options or warrants. As of the date of this Prospectus, there are also
outstanding Selling Securityholders' Warrants to purchase an aggregate of
310,000 shares of Common Stock at an exercise price of $6.00, warrants to
purchase 3,000 shares of Common Stock at an exercise price of $.01 per share,
warrants to purchase 200,000 shares of Common Stock at an exercise price of
$5.00 per share and outstanding stock options granted under the Option Plan to
purchase an aggregate of 259,250 shares of Common Stock at an exercise price of
$5.00 per share. To the extent that these options and warrants are exercised,
there will be further dilution to new investors. See "Management -- 1997 Stock
Option Plan," "Description of Securities" and "Underwriting."

18
<PAGE>

DIVIDEND POLICY

The Company has never paid any dividends on its Common Stock, and the Board
does not intend to declare or pay any dividends on its Common Stock in the
foreseeable future. The Board of Directors currently intends to retain all
available earnings (if any) generated by the Company's operations for the
development and growth of its business. The declaration in the future of any
cash or stock dividends on the Common Stock will be at the discretion of the
Board and will depend upon a variety of factors, including the earnings, capital
requirements and financial position of the Company and general economic
conditions at the time in question. Moreover, the payment of cash dividends on
the Common Stock in the future could be limited or prohibited by the terms of
financing agreements that may be entered into by the Company (e.g., a bank line
of credit or an agreement relating to the issuance of other debt securities of
the Company) or by the terms of any Preferred Stock that may be issued and then
outstanding. See "Description of Securities -- Capital Stock."

CAPITALIZATION

The following table sets forth the short-term debt and capitalization of
the Company as of September 28, 1997, (i) on an actual basis, (ii) on a pro
forma basis, giving effect to the Pro Forma Adjustment (see footnote 2 of
"Prospectus Summary -- Summary Financial Information") and (iii) as adjusted to
give effect to the sale of the 1,000,000 Shares and 500,000 Warrants offered
hereby and the anticipated application of the estimated net proceeds therefrom:
<TABLE>
<CAPTION>
September 28, 1997
---------------------------------------------------
Actual Pro Forma As Adjusted
--------------- --------------- ---------------
<S> <C> <C> <C>
Short-term debt (including current portion of long-term
debt and capitalized lease obligations)(1) ............... $ 574,895 $ 574,895 $ 574,895
============ ============ ============
Long term debt and capitalized lease obligations (2) ...... $ 1,644,535 $ 2,162,535 $ 2,162,535
------------ ------------ ------------
Stockholders' equity: ....................................
Common Stock, $.0001 par value, 19,000,000 authorized,
2,500,000 shares issued and outstanding (actual),
2,500,000 shares issued and outstanding (pro forma),
3,500,000 shares issued and outstanding (as adjusted)(3). 250 250 350
Preferred Stock, $.0001 par value, issuable in series:
1,000,000 shares authorized: no shares issued and
outstanding ............................................. -- -- --
Additional paid-in-capital .............................. 3,107,796 3,589,796 7,489,696
Accumulated deficit ....................................... (2,782,142) (2,782,142) (2,782,142)
------------ ------------ ------------
Total stockholders' equity .............................. 325,904 807,904 4,707,904
------------ ------------ ------------
Total capitalization ................................. $ 1,970,439 $ 2,970,439 $ 6,870,439
============ ============ ============
</TABLE>
- ------------
(1) Includes $56,680 of loans payable to related parties. See Consolidated
Financial Statements.

(2) Includes $926,550 of loans payable to related parties. See Consolidated
Financial Statements.

(3) Does not include (i) 500,000 shares of Common Stock reserved for issuance
upon exercise of the Warrants; (ii) an aggregate of 150,000 shares of Common
Stock reserved for issuance upon exercise of the Underwriter's Warrants and
the warrants included therein; (iii) an aggregate of 310,000 shares of
Common Stock reserved for issuance upon exercise of the Selling
Securityholders' Warrants; (iv) 203,000 shares of Common Stock reserved for
issuance upon exercise of other outstanding warrants; (v) 259,250 shares of
Common stock reserved for issuance upon exercise of outstanding options
under the Option Plan; and (vi) 265,750 shares of Common Stock reserved for
issuance upon exercise of options available for future grant under the
Option Plan. See "Management -- 1997 Stock Option Plan," "Description of
Securities" and "Underwriting."

19
<PAGE>

SELECTED FINANCIAL DATA

The following selected consolidated financial data with respect to the
Company's financial position at September 29, 1996 and September 28, 1997, and
its results of operations for the years ended September 29, 1996 and September
28, 1997, has been derived from the audited consolidated financial statements of
the Company included elsewhere in this Prospectus. The selected consolidated
financial data set forth below is qualified by reference to and should be read
in conjunction with the Company's consolidated financial statements, related
notes and other financial information contained in this Prospectus, as well as
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

Statement of Operations:

<TABLE>
<CAPTION>
Year Ended Year Ended
September 29, September 28,
1996 1997
--------------- --------------
<S> <C> <C>
Sales ...................................................... $ 11,829,088 $14,025,468
Cost of sales ............................................. 7,871,440 8,075,412
Gross profit ................................................ 3,957,648 5,950,056
Operating and administrative expenses ..................... 5,660,870 4,934,025
Income (loss) from operations .............................. (1,703,222) 1,016,031
Other expenses ............................................. 1,266,181 754,251
Income (loss) from continuing operations .................. (2,870,815) 261,780
Net income (loss) .......................................... (2,840,673) 261,780
Income (loss) per share from continuing operations(1) ...... (1.33) .10
Net income (loss) per share ................................. (1.32) .10
Weighted average number of shares outstanding(1) ............ 2,160,676 2,526,957
</TABLE>

Balance Sheet Data:

<TABLE>
<CAPTION>
September 29, 1996 September 28, 1997
-------------------- -------------------
<S> <C> <C>
Working capital (deficit) ............ $ (1,969,787) $ (2,551,009)
Total assets ........................ 4,519,569 5,940,027
Total liabilities .................. 4,655,445 5,614,123
Stockholders' equity (deficit) ...... (135,876) 325,904
</TABLE>
- ------------
(1) Effective September 29, 1996, the Company transferred the assets relating to
its concession business to American Leisure, a company wholly-owned by Frank
Cretella, President, Chief Executive Officer, a director and a principal
stockholder of the Company. For the year ended September 29, 1996 net income
from such discontinued operations was $30,142 or $.01 per share. See
"Management's Discussion and Analysis of Financial Conditions and Results of
Operations," "Certain Transactions" and Consolidated Financial Statements.

20
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

The Company operates Lundy's, a high-volume, casual, upscale seafood
restaurant located in Brooklyn, New York, and The Boathouse, a multi-use
facility featuring an upscale restaurant and catering pavilion, located on the
lake in New York City's Central Park. Lundy's and The Boathouse are high-profile
locations which host many special events and receive extensive press coverage.
The Company is also constructing American Park, which has been designed as a
high-volume premium-quality restaurant to be located at the water's edge in
Battery Park, a New York City landmark visited by approximately 4 million
visitors during 1996.

Results of Operations

Year Ended September 28, 1997 Compared to Year Ended September 29, 1996

Sales for the year ended September 28, 1997 ("fiscal 1997") were
$14,025,468, an increase of $2,196,380, or 18.6%, as compared to $11,829,088 for
the year ended September 29, 1996 ("fiscal 1996"). Sales for Lundy's and The
Boathouse for fiscal 1997 were $6,791,707 and $7,217,655, respectively, compared
to $5,676,382 and $6,152,706, respectively, during fiscal 1996. The increase in
sales for Lundy's was primarily due to Lundy's being opened for approximately
ten months during fiscal 1996 (Lundy's opened in December 1995) and catering an
increased number of special events. The increase in sales for The Boathouse were
primarily due to catering an increased number of special events. The Company's
food, liquor and other sales accounted for 76.8%, 15.3% and 7.9% of sales,
respectively, for fiscal 1996 and 76.4%, 17.3% and 6.3% of sales, respectively,
for fiscal 1997.

Cost of sales for fiscal 1997 were $8,075,412, an increase of $203,972 or
2.6%, as compared to $7,871,440 for fiscal 1996. The increase in cost of sales
was attributable to increased sales.

Gross profit for fiscal 1997 was $5,950,056, or 42.4% of sales, as compared
to $3,957,648, or 33.5% of sales for fiscal 1996. The increase in gross profit
as a percentage of sales was primarily attributable to reduced food and labor
costs and the Company's restructuring of its menu to encourage customers to
purchase food items with higher gross profit margins. Food costs for fiscal 1997
were reduced as a result of the Company's ability to favorably renegotiate
certain supply arrangements and expand the number of vendors and suppliers from
which the Company solicits bids for food products. Labor costs for fiscal 1997
were reduced as a result of the Company's implementation of a labor management
program during fiscal 1997 whereby the Company began to actively manage
restaurant level staffing requirements and more efficiently staffed its
restaurants. In addition, the Company was able to replace certain higher
salaried restaurant positions with lower salaried personnel.

Operating and administrative expenses for fiscal 1997 were $4,934,025, a
decrease of $726,845, or 12.8%, as compared to $5,660,870 for fiscal 1996.
Operating and administrative expenses for fiscal 1997 were lower primarily as a
result of a non-cash compensation expense of approximately $561,000 in fiscal
1996 resulting from the issuance of securities as consideration for services
rendered to the Company. During fiscal 1997 and fiscal 1996, operating and
administrative expenses were reduced by $181,012 and $71,670 of management
income fee, respectively, received under the Company's operating agreement with
American Leisure. A portion of the management income fee received by the Company
during fiscal 1997, $125,000, was an initial fee relating to the formation of
American Leisure and establishment of operations relating to the operating
agreement. The Company believes that the additional expenses incurred during
fiscal 1996 are non-recurring in nature. See "Certain Transactions."

Other expenses for fiscal 1997 were $754,251, a decrease of $511,930, or
40.4%, as compared to $1,266,181 for fiscal 1996. Other expenses for fiscal 1997
consisted of $341,295 of interest expense and $412,956 of barter expense. Other
expenses for fiscal 1996 consisted of a write-off of an advance to an affiliate
of $558,943, $363,994 of interest expense and $304,135 of barter expense. The
write-off of an advance represents cash advances and equipment transferred to
Forest Avenue Corporation ("Forest") and deferred management fees due from
Forest, an affiliate of Mr. Cretella and Jeanne Cretella, Vice President, a
director and a principal stockholder of the Company, upon the sale of the assets
of Forest to an unrelated third party, since the Company determined that such
advances were uncollectible. See "Certain Transactions."

During fiscal 1996, the Company received an income tax benefit of only 3.3%
due to a deferred tax valuation allowance.

21
<PAGE>

As a result of the foregoing, income from continuing operations for fiscal
1997 was $261,780 as compared to a loss from continuing operations of $2,870,815
for fiscal 1996.

Income from discontinued operations for fiscal 1996 was $30,142 (net of
income taxes of $20,093). Discontinued operations were TAM's concession
business which were transferred to American Leisure in connection with the
Acquisition. See "Certain Transactions."

Net income for fiscal 1997 was $261,780, as compared to a net loss of
$2,840,673 for fiscal 1996.

Liquidity and Capital Resources

The Company's capital requirements have been and will continue to be
significant and its cash requirements have been exceeding its cash flow from
operations (at September 28, 1997, the Company had a working capital deficit of
$2,551,009), due to, among other things, costs associated with development,
opening and start-up costs of Lundy's and American Park and building a corporate
infrastructure sufficient to support the Company's proposed expanded operations.
As a result, the Company has been substantially dependent upon sales of its
equity securities, loans from financial institutions and the Company's officers,
directors and stockholders and bartering transactions with member dining clubs
to finance a portion of its working capital requirements.

During fiscal 1997, net cash increased by $215,009. Net cash provided by
operating activities was $1,044,290, net cash used in investing activities was
$1,117,856, relating to the acquisition of property and equipment primarily for
American Park, and net cash provided from financing activities was $288,575,
consisting primarily of long-term borrowings of $905,158 and proceeds of
$200,000 from sales of equity securities, which was partially offset by
principal payments on long-term debt and capitalized lease obligations of
$527,558.

During the year ended September 29, 1996, net cash decreased by $81,138.
Net cash used in operating activities was $342,820, net cash used in investing
activities was $2,458,971, consisting primarily of the acquisition of property
and equipment for Lundy's in connection with its opening in December 1995, and
net cash provided by financing activities was $2,720,653, consisting primarily
of proceeds of $1,613,933 from the sale of equity securities and $1,215,470 of
long-term borrowings.

The Company enters into bartering agreements with member dining clubs
whereby member dining clubs advance cash to the Company in exchange for the
Company's agreement to provide to the clubs' members food and beverages at a
designated Company restaurant. The restaurant must permit the clubs' members to
purchase food and beverages at rates between 160% and 200% of the amount
advanced. Upon entering into the agreement, the Company records its obligation
to provide food and beverages at the amount of the advance it receives. Upon a
guest purchasing food or beverages, the Company records revenue for the amount
of food and beverage purchased by the guest, and the barter discount as a barter
expense.

During 1995 and 1996, the Company borrowed an aggregate of $840,000 from
Fleet Bank, N.A. Such loans were collateralized by the Company's principal
executive offices, which are owned by Mr. Cretella, the warehouse leased by the
Company and owned by Leisure Time Services, Inc. ("Leisure Time"), a company
owned by Jeanne Cretella, and Mr. and Ms. Cretella's personal residence, and
guaranteed by Mr. and Mrs. Cretella and Leisure Time. In June 1997, Mr. Cretella
agreed to pay to Fleet $640,000 as payment for the amount owed by the Company
(approximately $720,000 as of October 15, 1997). In August 1997, Mr. Cretella
paid to Fleet $140,000 as part of the settlement. Mr. Cretella paid the balance
of the principal owed to Fleet and the Company paid the accrued interest of
approximately $39,000 owed to Fleet in October 1997. As consideration for
repaying the loan, the Company issued to Mr. Cretella a promissory note in the
principal amount of $720,405 which bears interest at the rate of 10% per annum.
Interest is payable in monthly installments of $6,003, with the outstanding
principal payable in November 2002 upon maturity of the note.

During fiscal 1996, the Company issued and sold an aggregate of 510,084
shares of Common Stock and warrants to purchase 181,600 shares of Common Stock
to 31 investors for which it received gross proceeds of approximately $1,925,643
and issued 59,602 shares of Common Stock and warrants to purchase 21,530 shares
of Common Stock upon conversion of $235,000 of indebtedness owed to three
individuals. Ernest and Madeline Cretella, the parents of Frank Cretella,
purchased 13,785 shares of Common Stock and warrants to purchase 1,379 shares of
Common Stock for an aggregate purchase price of $50,000. The holders of such
warrants have agreed to convert such warrants into Selling Securityholders'
Warrants upon the consummation of this offering.

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During fiscal 1997, the Company issued and sold 55,141 shares of Common
Stock and warrants to purchase 27,571 shares of Common Stock to one investor at
a purchase price of $200,000. The holders of such warrants have agreed to
convert such warrants into Selling Securityholders' Warrants upon the
consummation of this offering.

In October 1997, Kayne Anderson Non-Traditional Investments, L.P. and ARBCO
Associates, L.P. affiliates of Kayne Anderson Investment Management, Inc.
(collectively, "Kayne Anderson"), loaned the Company an aggregate of $1,000,000.
The loans bear interest at the rate of 10% per annum, payable quarterly
commencing December 31, 1997, and are due May 31, 1999. Upon an event of default
under the loans, the interest rate increases to 15% per annum and the Company
would be required to pay to Kayne Anderson 50% of the operating profits from
American Park on a monthly basis until the loan is fully repaid. The loan is
guaranteed by Frank Cretella, President, Chief Executive Officer, a director and
a principal stockholder of the Company, and the guarantee is secured by a pledge
of 200,000 shares of Common Stock owned by Frank Cretella and Jeanne Cretella,
Vice President, a director and principal stockholder of the Company. As partial
consideration for the loans, the Company issued to Kayne Anderson warrants (the
"KA Warrants") to purchase 200,000 shares of Common Stock. The KA Warrants are
exercisable at a price of $5.00 per share (subject to adjustment under certain
circumstances) and are exercisable at any time commencing 90 days following the
date of this Prospectus until October 31, 2002. The Company will incur a
non-cash interest charge of $482,000 representing the original issue discount
relating to the promissory notes issued to Kayne Anderson over the life of the
promissory notes. In connection with the loan, the Company agreed to use its
best efforts to cause a representative designated by Kayne Anderson to be
elected to the Company's Board of Directors. Kenneth Harris is Kayne Anderson's
initial designee. See "Management."

Based on the Company's current proposed plans and assumptions relating to
the implementation of its expansion strategy (including the timetable of opening
American Park and new Lundy's locations and the costs associated therewith), the
Company anticipates that the net proceeds of this offering, together with
anticipated cash flow from operations and equipment, vendor and landlord
financing, will be sufficient to satisfy its contemplated cash requirements for
at least 12 months following the consummation of this offering. In the event
that the Company's plans change or its assumptions prove to be inaccurate (due
to unanticipated expenses, construction delays or other difficulties) or the
proceeds of this offering otherwise prove to be insufficient to fund operations
and implement the Company's proposed expansion strategy, the Company could be
required to seek additional financing sooner than anticipated. Other than the
ability to enter into bartering transactions with member dining clubs, the
Company has no current arrangements with respect to, or potential sources of,
additional financing, and it is not anticipated that any officers, directors or
stockholders will provide any additional loans to the Company. Consequently,
there can be no assurance that any additional financing will be available to the
Company when needed, on commercially reasonable terms, or at all.

Seasonality and Fluctuations in Quarterly Operating Results.

The Company's business is seasonal. The restaurant and bicycle and rowboat
rentals at The Boathouse currently are open only March through November, with
dinner served in the restaurant May 1 through October 1. All of the seating of
The Boathouse restaurant and a portion of the seating at Lundy's is outdoors. In
addition, since Lundy's is a waterside location, it attracts more guests during
the warmer weather months. As a result, the Company's restaurant sales generally
increase from May through September, and decrease from November through March.
See "Business."

The Company also expects that future quarterly operating results will
fluctuate as a result of the timing of and expenses related to the openings of
new restaurants (as the Company will incur significant expenses during the
months preceding the opening of a restaurant), as well as due to various
factors, including the seasonal nature of its business, weather conditions in
New York City, the health of New York City's economy in general and its tourism
industry in particular. Accordingly, the Company's sales and earnings may
fluctuate significantly from quarter to quarter and operating results for any
quarter will not necessarily be indicative of the results that may be achieved
for a full year.

Inflation
The effect of inflation on the Company has not been significant during the
last two fiscal years.

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BUSINESS

Lundy's

Lundy's is a high-volume, casual, upscale seafood restaurant located in
Brooklyn, New York. The Company opened Lundy's in December 1995, approximately
16 years after the original Lundy's restaurant closed. The original Lundy's, a
storied Brooklyn landmark, originally opened in 1934 and is believed to have
been the largest restaurant in the United States during the time it was open,
with seating capacity for approximately 2,400 guests. The building which Lundy's
occupies was declared a historic landmark building by the New York City
Landmarks Preservation Commission in 1992.

The Lundy' Concept

The Lundy's concept is designed to appeal to a broad range of guests by
serving generous portions of premium-quality seafood and other menu items and by
combining a grand dining experience with friendly and efficient service in a
high-energy environment. Lundy's commitment to offering its guests a casual,
exciting dining experience is highlighted by its "exhibition" kitchen where all
meals are cooked to order in view of its guests, a lobster pool from which
guests can select their lobsters, an experienced waitstaff uniformed in crisp
white linen jackets which are knowledgeable about the preparation of seafood and
the history of Lundy's, a high waitstaff-to-customer ratio to assure attentive
service and tables covered with multiple layers of colored linens and pristine
white butcher paper.

Lundy's menu features a wide variety of fresh seafood items, including
lobster, crab, shrimp, oysters, clams and daily fish specials, cooked to order
in a variety of ways: steamed, sauteed, broiled, grilled, blackened and fried.
In addition, Lundy's offers a selection of steaks, chicken dishes, pasta dishes,
pizzas, appetizers, chowders, salads and fresh-baked desserts. Lundy's also
offers full bar service, from which a variety of brand name alcohols, mixed
drinks, wines and beers, including selected micro-brewed beers, can be ordered,
at the bar or with table service. Lundy's feature menu selection is its "Shore
Dinner," which consists of a chowder or salad; steamed or baked clams, lobster
and chicken; fruit pie; and a beverage, for $21.95. The Company believes that
Lundy's is widely recognized for its "signature" biscuits, chowders and apple
and blueberry pies.

The menu mix has been carefully developed to balance the higher priced
items, such as lobster and fresh fish, with lower cost items, such as pizza and
pasta dishes. Dinner entrees range in price from $7.95 to $28.95 and the average
dinner check is approximately $32.00 per person.

Design, Decor and Atmosphere

Lundy's interior has been designed with a contemporary decor, rich polished
woods and granite surfaces, accented with copper, pottery, brushed-stainless
steel and earth tones, to impart "Old World" elegance and comfort. Lundy's
offers guests several seating selections in its multi-level interior, which
consists of an expansive, high-ceiling main dining area; a large upstairs dining
room which is also used for special events and to cater private functions; a
mezzanine level cigar room which overlooks the main dining area; and a 30-foot
long oyster and beverage bar; as well as outdoor seating.

Facility Operations

Lundy's occupies approximately 17,000 square feet and has a seating
capacity of approximately 730 seats. Lundy's is open for dinner from 5:00 P.M.
to 11:00 P.M. on weekdays (10:00 P.M. on Mondays) and for dining from 1:00 P.M.
to 12:00 midnight on Sunday. Lundy's oyster and beverage bar and outside bar
(weather permitting) are also open during such hours and also from 12:00 noon
to 5:00 P.M. on weekdays.

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In addition to the restaurant operations, Lundy's also houses a seafood
laboratory where seafood is tested to assure quality and freshness, and a gift
shop which carries a variety of "Lundy's" and "Brooklyn" themed merchandise,
such as T-shirts and other clothing, hats, plates and coffee and beer mugs, as
well as Lundy's chowders and sauces and seafood related products, such as
lobster bibs, crackers and forks.

During the year ended September 29, 1996 and year ended September 28, 1997,
Lundy's sales were $5,678,382 and $6,791,707, respectively.

The Boathouse

The Boathouse is a multi-use, lakeside facility which features an upscale
restaurant and catering pavilion, located on the lake in New York City's Central
Park.

Restaurant

The Boathouse restaurant provides customers a pleasurable dining experience
in a comfortable, relaxed and romantic atmosphere and primarily al fresco
seating. The restaurant serves eclectic American cuisine that changes according
to season and consumer trends, emphasizing herbs grown fresh on site. The menu
is limited in scope to permit the greatest attention to quality while offering
sufficient breadth to appeal to a variety of taste preferences. The restaurant
also offers full bar service. Dinner entrees range in price from $19.00 to
$28.00 and the average dinner check is approximately $44.00 per person.

The dining area occupies approximately 6,000 square feet of space and has a
seating capacity of approximately 225 seats, most of which are covered,
expanding approximately 150 feet alongside the Central Park lake. The restaurant
is open from early March until the Sunday in early November on which the New
York City Marathon is held.

Catering Pavilion

The catering pavilion is glass-enclosed, tented and heated. The catering
pavilion occupies approximately 4,600 square feet of space, is surrounded by an
english garden on two sides and resides a few feet from the Central Park lake.
The catering pavilion hosts private functions for up to 500 persons year round.

Other Attractions

The Boathouse incorporates the following additional attractions:

o Cocktail Area. The cocktail area offers full bar service at an
approximately 21-foot long bar with waitress service and features a jazz
band performing five nights a week. The cocktail area has a capacity of 150
persons, including 100 seats, and is open from March through early
November.

o The Boathouse Express. The Boathouse Express is a cafeteria-style
convenience counter which serves specialty sandwiches, salads, baked goods
and juices, as well as standard fast-food items, such as hamburgers,
hotdogs, french fries and sodas. The Boathouse Express has indoor and
outdoor seating available for approximately 75 persons year round.

o Carts and Kiosks. Approximately six to eight free standing carts and kiosks
are strategically located on the facility's grounds offering a variety of
food and beverage items, such as fresh fruit drinks, New York- style
pretzels, pita sandwiches and espresso and cappuccino, from early March to
early November.

o Rowboat and Bicycle Rentals and Venetian Gondola Rides. Approximately 110
rowboats are available for rental by the hour on the Central Park lake and
approximately 120 bicycles are available for rental by the hour or day from
early March to early November. Additionally, Venetian gondola rides on the
lake are available from early March to early November.

o Merchandise Counter. The merchandise counter carries a variety of The
Boathouse and other Central Park and New York City themed merchandised,
including T-shirts, sweatshirts, hats and coffee mugs, as well as sundry
items.

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o Shuttle Bus. The Boathouse operates a shuttle bus which transports guests
between the facility and the Fifth Avenue and 72nd Street entrance to
Central Park. The shuttle bus runs when the restaurant is opened for dinner
and during special events at the catering pavilion.

The Company operates The Boathouse pursuant to a 15-year license agreement
with the City of New York Department of Parks and Recreation (the "Parks
Department"). Pursuant to the license agreement, the Company is required to pay
a fee to the Parks Department each license year (June 30 through the following
June 29) equal to the greater of (i) $85,000 (increasing to $90,000 per year on
June 30, 1998) or (ii) the sum of 13% of gross revenue from food and merchandise
sales and 16% of gross revenues (increasing to 17% on June 30, 1999) from
rowboat and bicycle rentals. The Company is required to maintain certain minimum
levels of insurance with respect to the facility. The license agreement expires
on June 29, 2000, provided that the Parks Department may terminate the license
upon ten days written notice so long as the termination is not arbitrary or
capricious. See "Risk Factors -- Operating License Requirements; Audit By New
York City Comptroller."

During the year ended September 29, 1996 and year ended September 28, 1997,
The Boathouse's sales were $6,152,706 and $7,217,655, respectively.

American Park

American Park has been designed as a high-volume premium-quality
restaurant and is currently under construction in Battery Park, a New York City
landmark visited by approximately 4 million visitors in 1996. The Company
anticipates that American Park will open in March 1998.

American Park has been designed with an urban mountain lodge motif,
incorporating natural fabrics, slate, stone, wood and brick with modern-style
furnishings, vibrant colors and designer lighting. Guests will have panoramic
views of the New York City harbor and landmarks such as the Statute of Liberty,
Ellis Island, Governor's Island and the downtown Manhattan skyline. American
Park will offer seating selections in its main dining room, second floor dining
room and bi-level outdoor patios.

American Park is expected to serve contemporary American cuisine featuring
wood-burning menu selections, such as steaks, whole fish, chicken and veal
dishes. The lower-level outdoor patio will extend to the water's edge and is
expected to incorporate a separate kitchen which serves selected items from the
main restaurant menu and an expanded bar area. American Park will also feature a
cigar lounge which will offer waitress service, and personal humidors which can
be leased on an annual basis. The Company also intends to sell cigars and
related paraphernalia in the cigar lounge.

The Company intends to operate a free-standing kiosk as part of American
Park which is expected to serve appetizers, sandwiches, cold beverages, beer and
wine.

In December 1994, the Company entered into a license agreement with the
Parks Department to construct and operate a restaurant, American Park, in
Battery Park. The Company is required to pay to the Parks Department a fee each
license year (November 1 through the following October 31) equal to the greater
of (i) $50,000 and (ii) 8% of gross receipts from the restaurant and 10% of
gross receipts from merchandise sales (increasing to 12% on November 1, 1999).
For the license year ended October 31, 1996, the license fee was $50,000. The
Company anticipates that the license fee will increase substantially upon the
opening of American Park. The Company is required to maintain a certain level of
insurance. The license agreement expires on October 31, 2015, provided, however,
that the Parks Department may terminate the license upon 30 days written notice.

American Park is approximately 18,300 square feet in size and is expected
to have a seating capacity of approximately 750 seats, as well as capacity for
approximately 75 persons standing in the bar area located on the lower-level
outdoor patio.

Expansion Strategy

The Company's strategy is to initially develop and operate a limited number
of additional Lundy's restaurants. The Company intends to focus its expansion
efforts in the New York City metropolitan area and other urban and upscale
suburban areas, particularly those with a large population of transplanted New
Yorkers, such as Southern Florida, Los Angeles, Chicago and Washington D.C. With
a substantial portion of the proceeds of

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this offering (approximately $3,500,000), projected cash flow from operations
and anticipated financing, including equipment and vendor financing and landlord
development concessions and rent allowances, the Company intends to open three
additional Lundy's restaurants during the 12 months following the consummation
of this offering. The Company is currently analyzing several possible locations
but does not have any commitments or understanding with respect to any proposed
location. The Company has limited experience in expanding its operations and
there can be no assurance that it will be able to successfully do so.

The Company's strategy is to capitalize on what it perceives to be a high
consumer recognition of the Lundy's name in markets where there is a significant
percentage of the population which remembers and had visited the old Lundy's
restaurant. The Company anticipates that future Lundy's restaurants will
incorporate the Lundy's concept into the existing building architecture to give
each location the atmosphere of a long-standing restaurant.

The Company's long-term plans include seeking to capitalize upon the
Lundy's name by marketing food and related products by mail, such as chowders
sauces, pies, cookbooks, lobster bibs, crackers and forks and "Lundy's" and
"Brooklyn" themed T-shirts and other clothing items, hats, plates and coffee and
beer mugs. In addition, in connection with its expansion strategy, the Company
may seek to open additional, high-volume landmark type restaurants as
appropriate opportunities arise.

Site Selection

The choice of site selection is critical to the potential success of a
particular restaurant. As a result, the Company devotes a significant amount of
time and resources to identifying and analyzing potential sites. The Company
seeks to identify locations in close proximity to upscale high-traffic, suburban
residential neighborhoods, hotel complexes and/or urban business or
entertainment centers. The Company also seeks to identify large spaces in
tourist centers, such as government buildings, concession stands and offices in
municipal parks which are not utilized to their potential. Additionally, to the
extent opportunities arise, the Company seeks to identify waterfront locations,
which type of location the Company believes has a synergy with the Lundy's
concept and primarily seafood menu. The Company, however, has no commitments or
understandings with respect to any proposed location.

The Company generally seeks to lease properties with 12,000 to 20,000
square feet of total space and seating capacity for 400 to 750 persons. The
Company anticipates that three to six months will typically be required to open
a new Lundy's restaurant from the time a location is identified and a lease is
negotiated.

The Company believes that future Lundy's restaurants will be destination
restaurants, similar to its existing restaurants, and that customers will travel
by automobile up to 15 to 30 minutes to the location.

The Company anticipates that the cost of opening additional Lundy's
restaurants, other than lease expenses, will average approximately $1,500,000
(net of anticipated equipment and vendor financing and landlord contributions),
consisting of construction ($800,000), equipment ($350,000), smallwares
($100,000), furniture ($100,000), point-of-sales account and cash management
system ($75,000), inventory ($60,000), cash and deposits ($15,000). The Company
also anticipates that it will incur pre-opening expenses of approximately
$300,000 for each new Lundy's restaurant it opens, which it intends to finance
from the net proceeds of this offering allocated to working capital and general
corporate purposes to the extent cash flow from operations is insufficient.
Annual rental costs will vary significantly depending upon the geographic market
and square footage. The Company will seek to negotiate landlord development
concessions and rent allowances with respect to future locations. The Company
anticipates that leases relating to future locations will be long-term (20 to 30
years) in duration.

Restaurant Operations

Management and Employees

Each location's operations is managed by a general manager and managers for
certain operations of the location, such as kitchen, dining room (waiters and
busboys), office (administration) and catering. Each location's staff consists
of approximately 160 employees. Because the restaurant and certain other
operations at The Boathouse are not open year round, the Company is required to
hire new personnel annually for The Boathouse. The Company is currently refining
its management bonus plan which will provide for bonuses based on the financial
results of the manager's particular location.

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Service and Guest Satisfaction

The Company believes that providing friendly, courteous, efficient service
is critical to the long-term success of each location. The Company will attempt
to recruit managers for future locations with significant experience in the
restaurant industry. The Company is currently refining its training program in
anticipation of opening additional Lundy's restaurants to teach restaurant
managers to promote the Company's team-oriented atmosphere among restaurant
employees, with emphasis on preparing and serving food in accordance with strict
standards and providing friendly, courteous and attentive service. Each
location's staff is trained on site by location managers and other designated
employees. The Company believes that the selection and training of its location
managers and staff result in friendly, courteous, efficient guest service which
contributes to a pleasurable dining experience for the guest.

The Company monitors each location's service and guest satisfaction. The
Company maintains a guest service department which contacts several guests from
each location's previous night's reservation list to inquire about their dining
experiences. The guest service department also contacts each party which
utilizes the Company's catering services to obtain feedback about their
experiences. The Company also maintains a toll-free telephone line for guests to
call with complaints or suggestions about the Company's locations. All calls are
personally responded to by an executive officer of the Company. The Company
utilizes guest feedback to continually improve its service, update its menu
selections and otherwise improve its operations.

Purchasing

Obtaining a reliable supply of quality seafood and other food and beverage
items at competitive prices is critical to the Company's success. The Company
has formed long-term relationships with several seafood suppliers, fish markets
and operators of fishing boats. Each restaurant purchases its own supply of food
and beverage items through a central purchasing department which maintains a
list of approved suppliers. The Company regularly sends buyers to local seafood
markets to purchase fresh seafood. In addition, the Company regularly arranges
to purchase a fishing boat's day catch of lobsters and select fish, reducing its
price per pound and ensuring superior quality. The Company maintains a current
database of suppliers and continuously updates supplier's pricing to enable its
restaurants to obtain the lowest prices available from Company-approved
suppliers.

The Company believes its diverse menu selection reduces the risk and
minimizes the effect of the shortage of any seafood products. The Company has
been able to anticipate and react to fluctuations in food costs through selected
menu price adjustments, purchasing seafood directly from numerous suppliers,
fish markets and fishing boats and promoting certain alternative menu selections
(in response to availability and price of supply). To date, the Company
generally has not experienced any significant delays in receiving its food and
beverage inventories, restaurant supplies or equipment.

Quality Control

The Company maintains a continuous inspection program for all of its
seafood purchases. Each shipment of seafood and other food items is inspected
for quality and weight by the restaurant steward. All food items must be
purchased from Company-approved suppliers. In addition, Lundy's houses a seafood
laboratory where shipments of seafood are randomly tested to assure quality.

The restaurants' management are responsible for properly training employees
and ensuring that the Company's restaurants are operated in accordance with
strict health and quality standards. Each restaurant employee is educated as to
the correct handling and proper characteristics of each product. Compliance with
the Company's quality standards are monitored by periodic on-site visits and
formal periodic inspections by management and third-party food sanitation
consultants. The Company believes that its inspection procedure and its employee
training practices assist the Company in maintaining high standards of quality
for the food and services it provides.

Restaurant Reporting

The Company maintains financial and accounting controls for each restaurant
through a central point-of-sale, accounting and cash management systems. Sales
data is collected daily, and store managers are provided

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with daily sales, cash and inventory information for their respective
restaurants. The point-of-sale, accounting and cash management systems enables
both store-level management and senior management to quickly react to changing
sales trends, better manage food, beverage and labor costs, minimize theft and
improve the quality and efficiency of accounting and audit procedures.

Catering Operations

The Company's restaurants offer high-quality professional, on-premise and
off-premise catering services. Each restaurant provides its own catering
services and specially designs menus to the guests requirements. Lundy's
upstairs dinning room is used to cater private functions and has a capacity of
200 persons. In addition to catering private functions in the banquet area, The
Boathouse caters larger functions of up to 1,000 persons in the combined space
of the catering pavilion and restaurant. The Company anticipates offering
catering services at American Park in its upstairs dining room, as well as at
other restaurants opened in the future.

In April 1997, the Company entered into a five-year agreement with Bay
Cruises LLC ("Bay Cruises") to act as exclusive caterer for all entertainment
cruises conducted by Bay Cruises from any location in the New York metropolitan
area. Bay Cruises conducts entertainment cruises aboard the Liberty I yacht. The
Company provides several breakfast, lunch and dinner menu selections and is paid
an amount based on the number of guests for catered cruises and based on the
number of meals served for non-catered cruises. The Company may terminate the
agreement upon sixty days notice.

During the year ended September 29, 1996 and year ended September 28, 1997,
Lundy's catered 59 and 157 private functions, respectively, and The Boathouse
catered 284 and 317 private functions, respectively.

Advertising and Marketing

The Company employs a marketing strategy that seeks continuous visibility
and name recognition through the use of local radio, print and billboard
advertisements, as well as community events, for each restaurant. The Company
contracts with public relations and advertising agencies to more effectively
coordinate its advertising efforts. The Company also publishes and distributes a
quarterly newsletter which apprises readers of upcoming events at the Company's
restaurants and recent celebrity guests, answers guests' food, wine and
restaurant etiquette questions and provides recipes.

Each restaurant engages in community-based promotions designed to promote
the restaurant and foster goodwill within the community. Each restaurant
participates in the Company's "make a dent with 10%" program whereby 10% of the
proceeds from three designated tables from the restaurant are donated to local
charities.

Lundy's and The Boathouse are high-profile locations which host many
special events and receive extensive press coverage. Lundy's and The Boathouse
have been featured in several magazines, including Gourmet, Travel & Leisure and
The New York Times Magazine, and have been the subject of several television
news stories. As a result, these restaurants receive a great deal of publicity
in addition to the publicity obtained from the Company's advertising efforts.

Competition

The restaurant industry is intensely competitive with respect to price,
service, location and food quality and variety. There are many well-established
competitors with substantially greater financial and other resources than the
Company, as well as a significant number of new market entrants. Such
competitors include national, regional and local full-service casual dining
chains, many of which specialize in or offer seafood products, as well as single
location restaurants. Some of the Company's competitors have been in existence
for substantially longer periods than the Company, may be better established in
the markets where the Company's restaurants are or may be located and engage in
extensive advertising and promotional campaigns, both generally and in response
to efforts by competitors to open new locations or introduce new concepts or
menu offerings. The Company can also be expected to face competition from a
broad range of other restaurants and food service establishments which
specialize in a variety of cuisines.

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Intellectual Property

The Company's business prospects will depend largely upon the Company's
ability to capitalize on favorable consumer recognition of the Lundy's name.
Although the Company holds a trademark registration for use of the Lundy's name
by the U.S. Patent and Trademark Office, there can be no assurance that the
Company's marks do not or will not violate the proprietary rights of others or
that the Company's marks would be upheld, or that the Company would not be
prevented from using its marks, if challenged, any of which could have an
adverse effect on the Company.

The Company also relies on trade secrets and proprietary know-how, and
employs various methods, to protect its concepts and recipes. However, such
methods may not afford complete protection and there can be no assurance that
others will not independently develop similar know-how or obtain access to the
Company's know-how, concepts and recipes. The Company does not maintain
confidentiality and non-competition agreements with all of its executives, key
personnel or suppliers. There can be no assurance that the Company will be able
to adequately protect its trade secrets.

Government Regulation

The Company is subject to extensive state and local government regulation
by various governmental agencies, including state and local licensing, zoning,
land use, construction and environmental regulations and various regulations
relating to the sale of food and beverages, sanitation, disposal of refuse and
waste products, public health, safety and fire standards. The Company's
restaurants are subject to periodic inspections by governmental agencies to
assure conformity with such regulations. Difficulties or failure in obtaining
required licensing or other regulatory approvals could delay or prevent the
opening of a new restaurant, and the suspension of, or inability to renew, a
license at an existing restaurant would adversely affect the operations of the
Company. Restaurant operating costs are also affected by other government
actions which are beyond the Company's control, including increases in the
minimum hourly wage requirements, workers compensation insurance rates, health
care insurance costs and unemployment and other taxes.

The Federal Americans With Disabilities Act prohibits discrimination on the
basis of disability in public accommodations and employment. The Company's
restaurants are currently designed to be accessible to the disabled, and the
Company believes that it is in compliance with all current applicable
regulations relating to accommodations for the disabled.

The Company is subject to "dram-shop" statutes, which generally provide a
person injured by an intoxicated person the right to recover damages from an
establishment that wrongfully served alcoholic beverages to the intoxicated
person. New York law currently provides that a vendor of alcoholic beverages may
be held liable in a civil cause of action for injury or damage caused by or
resulting from the intoxication of a minor (under 21 years of age) if the vendor
willfully, knowingly and unlawfully sells or furnishes alcoholic beverages to
the minor and knows that the minor will soon thereafter be driving a motor
vehicle. A vendor can similarly be held liable if it knowingly provides
alcoholic beverages to a person who is in a noticeable state of intoxication,
knows that person will soon thereafter be driving a motor vehicle and injury or
damage is caused by that person.

Insurance

The operation of restaurants subjects the Company to possible liability
claims from others, including customers, employees and other service providers
for personal injury (resulting from, among other things, contaminated or spoiled
food or beverages, accidents or injuries caused by intoxicated persons served
alcoholic beverages by a restaurant). The Company maintains insurance (with
coverage in amounts up to $1,000,000 per occurrence and $5,000,000 of umbrella
liability coverage), including insurance relating to personal injury, in amounts
which the Company believes to be adequate. The Company also maintains property
insurance for each location it operates in amounts it believes to be adequate.
Nevertheless, a partially or completely uninsured claim against the Company, if
successful, could have a material adverse effect on the Company.

Properties

The Company leases approximately 2,500 square feet of space in Staten
Island, New York for its executive offices from Frank Cretella, Chief Executive
Officer, President, a director and a principal stockholder of the

30
<PAGE>

Company. The current annual rent payable under the lease is currently $37,500
and increased by 1.5% per annum commencing January 1998. The lease expires
December 31, 2001. The Company believes that this lease is on commercially
reasonable terms. See "Certain Transactions."

The Company leases 16,505 square feet of space in Sheepshead Bay, Brooklyn,
New York, where Lundy's is located pursuant to a lease which expires in 2014.
The current annual rent payable under the lease is $300,000 during 1997. Upon
the expiration of the lease, the Company has two 10-year renewal options.

The Company leases an approximately 6,000 square feet warehouse in Bayonne,
New Jersey, from Leisure Time Services, Inc., a company wholly-owned by Jeanne
Cretella, Vice President, a director and a principal stockholder of the Company.
The annual rent payable under the lease is currently $30,000 and increases by
1.5% per annum commencing January 1998. The Company believes that this lease is
on commercially reasonable terms. See "Certain Transactions."

The Company operates The Boathouse in Central Park, New York City pursuant
to a license from the Parks Department which expires in June 2000.

The Company has a license from the Parks Department to operate American
Park in Battery Park, New York City. The license expires in 2015.

Employees

As of September 28, 1998, the Company employed 504 persons, of whom 26 were
in management and 478 were in non-management restaurant operations.
Approximately 34 of those individuals were employed on a salary basis. The
Company believes its employee relations to be good. None of the Company's
employees is covered by a collective bargaining agreement.

Legal Proceedings

The operation of restaurants and rowboat and bicycle rentals subjects the
Company to potential claims from others, including customers, employees and
other service providers for personal injury (resulting from, among other things,
contaminated or spoiled food or beverages and accidents). The Company is a
defendant in several lawsuits arising in the ordinary course of its business
relating to personal injury claims by plaintiffs which are seeking damages
substantially in excess of the Company's assets and insurance coverage. The
lawsuits are being handled by the Company's insurance carriers. The Company is
vigorously defending each lawsuit and believes that such matters are adequately
covered by insurance or, if not so covered, are without merit or are of such
nature or involve such amounts that an unfavorable disposition would not have a
material adverse effect on the financial condition or operations of the Company.
However, since each lawsuit is in an early stage, there can be no assurance that
any of such actions will be resolved in favor of the Company or that the outcome
of any litigation or settlement will not have a material adverse effect on the
Company.

In the ordinary course of business, the Company is a party to other legal
proceedings, the outcome of which, either singly, or in the aggregate, is not
expected to be material.

31
<PAGE>
MANAGEMENT

Directors and Executive Officers

The following are the directors and executive officers of the Company:

<TABLE>
<CAPTION>
Name Age Position
---- ----- --------
<S> <C> <C>
Frank Cretella ......... 39 President, Chief Executive Officer and Director
Jeanne Cretella ......... 39 Vice President and Director
Anthony B. Golio ......... 37 Vice President
Lorenzo T. Vanore ...... 45 Chief Financial Officer
Kenneth L. Harris ...... 55 Chairman of the Board
Peter J. Salvatore ...... 60 Director
Barry E. Krantz ......... 53 Director
</TABLE>

Frank Cretella co-founded the Company's predecessor in 1981 and has been
President, Chief Executive Officer and a director of the Company since
inception.

Jeanne Cretella co-founded the Company's predecessor in 1981, and has been
Vice President, Secretary and a director of the Company since inception. Ms.
Cretella is the wife of Frank Cretella.

Anthony B. Golio has been Vice President of the Company since October 1997.
In June 1996, Mr. Golio founded The Pineapple Group Inc., a consulting company
to the restaurant industry. From February 1994 until October 1996, Mr. Golio was
director of operations of Whiskey River Restaurant Group, a restaurant holding
company. From January 1991 through February 1994, Mr. Golio was Vice President -
Operations and Marketing of HMG, Inc., a restaurant holding company. From 1988
to 1991, Mr. Golio was manager of guest services in the food service division of
the New York Zoological Society. From 1984 to 1988, Mr. Golio was area manager
of Chi-Chi's Restaurants, Inc.

Lorenzo T. Vanore has agreed to serve as Chief Financial Officer of the
Company commencing February 15, 1998. From June 1995 through January 1998, Mr.
Vanore was Chief Financial Officer of Ecce Panis, Inc., a privately-owned
wholesale and retail bakery chain. From 1984 through May 1995, Mr. Vanore was
employed by New York Cruise Lines, Inc., the operator of Circle Line and World
Yacht cruise lines, most recently as its Chief Financial Officer. From 1979 to
1984, Mr. Vanore was Vice President of Financial Services of Lifestyle
Restaurants, Inc., a publicly-traded restaurant chain.

Kenneth L. Harris has been Chairman of the Board since June 1997. Since
January 1995, Mr. Harris has been President and Chief Executive Officer of
Platinum Restaurant Group, a management consulting firm. From February 1994
through January 1995, Mr. Harris was Chief Operating Officer of HOB
Entertainment, Inc., a theme restaurant company. From January 1975 through
January 1994, Mr. Harris was employed by W.R. Grace & Co. ("Grace") and its
subsidiary, Restaurant Enterprises Group, Inc. ("REGI"), most recently as
President and Chief Executive Officer of REGI's Dinnerhouse division. In 1994,
REGI filed for bankruptcy under Chapter 11 in the United States Bankruptcy
Court, as part of a pre-packaged plan in connection with Grace's sale of such
subsidiary, and emerged as Family Restaurants, Inc. In January 1998, Mr. Harris
joined Kayne Anderson as an associate. Mr. Harris is the designee of Kayne
Anderson to the Company's Board of Directors.

Peter J. Salvatore has agreed to serve as a director of the Company upon
the consummation of this offering. Mr. Salvatore has been Managing Director of
Spear Leeds & Kellogg, an NASD member firm, since March 1991.

Barry E. Krantz has agreed to serve as a director of the Company upon the
consummation of this offering. Mr. Krantz has been an independent restaurant
industry consultant since August 1995. Mr. Krantz was Chief Operating Officer
and a director of REGI from January 1989 through January 1994 (when it filed
for bankruptcy under Chapter 11). From January 1994 to August 1995, Mr. Krantz
was President, Chief Operating Officer of Family Restaurants, Inc., the
successor of REGI. Mr. Krantz is currently a director of Sizzler International,
Inc., a publicly traded company in the restaurant industry.

All directors currently hold office until the next annual meeting of
stockholders and until their successors are duly elected and qualified.
Executive officers of the Company serve at the direction of the Board and until
their successors are duly elected and qualified. The Company reimburses
directors for reasonable travel expenses incurred in connection with their
activities on behalf of the Company but does not pay its directors any fees for
Board participation.

32
<PAGE>

In connection with this offering, the Company has agreed that it will, for
a period of three years following the date of this Prospectus, upon the request
of the Underwriter, nominate and use its best efforts to elect a designee of
the Underwriter (which designee may change from time to time) as a director of
the Company or, at the Underwriter's option, appoint such designee as a
non-voting advisor to the Company's Board of Directors. The Underwriter has not
yet exercised its rights to designate such a person. See "Underwriting."

Audit Committee

The Board of Directors has established an audit committee which, upon the
consummation of this offering, will be comprised of Messrs. Kenneth L. Harris
and Peter J. Salvatore. The audit committee will be responsible for making
recommendations concerning the engagement of independent public accountants,
reviewing the plans and results of the audit engagement with the independent
public accounts, approving professional services provided by the independent
public accounts and reviewing the adequacy of the Company's internal accounting
contracts.

Executive Compensation

The following table sets forth certain compensation paid by the Company
during the fiscal years ended September 28, 1997 and September 29, 1996 to Frank
Cretella, its President and Chief Executive Officer. No other officer of the
Company received compensation in excess of $100,000 for either such fiscal year.

Summary Compensation Table

<TABLE>
<CAPTION>
Annual Compensation
------------------------------------
Other Annual
Name and Principal Position Year Salary Bonus Compensation
--------------------------- ------ ---------- ------- ------------
<S> <C> <C> <C> <C>
Frank Cretella
President and Chief Executive Officer ...... 1997 $150,000 $ 0 $2,000
1996 $168,000 $ 0 $2,000
</TABLE>
The Company did not grant any options to its executive officers during the
years ended September 28, 1997 and September 29, 1996.

Employment Agreements

The Company has entered into three-year employment agreements with Frank
Cretella and Jeanne Cretella, effective as of the date of this Prospectus, which
is automatically renewable and provides for an annual base compensation of
$175,000 and $75,000, respectively, and such bonuses as the Board of Directors
may from time to time determine. Each of the employment agreements requires the
officer to devote a majority of such officer's business time to the Company's
business and affairs and contains a provision that such officer will not compete
or engage in a business competitive with the current or anticipated business of
the Company during the term of the employment agreement and for a period of one
year thereafter. Each of the agreements also provides that if the officer is
terminated without cause (including as a result of a change in control), such
officer will be entitled to receive severance pay equal to the base compensation
through the term of the agreement, provided that if such officer is terminated
during the third year or the last year of any renewal term, such officer will be
entitled to receive additional compensation equal to the base compensation
received from the Company during the one-year period prior to the date of
termination.

Consulting Agreement

In July 1996, the Company entered into a two-year consulting agreement with
Kenneth L. Harris, Chairman of the Board of the Company, pursuant to which Mr.
Harris (through Platinum Restaurant Group, a company wholly owned by Mr. Harris)
has provided strategic planning, restaurant operations, marketing and site
evaluation consulting services for a fee equal to $2,500 per month through
December 1997 and $5,000 per month thereafter. The agreement is automatically
renewable for successive one-year periods, unless either party gives written
notice of its intention not to renew the agreement at least 30 days prior to the
end of the term or renewal term. In addition, pursuant to the consulting
agreement, the Company agreed to pay to Mr. Harris $50,000 as payment for
consulting services rendered to the Company prior to entering into the
consulting agreement. Such payment is due in July 1998.

33
<PAGE>

1997 Stock Option Plan

In October 1997, the Company's stockholders approved a stock option plan
(the "Option Plan") pursuant to which 525,000 shares of Common Stock have been
reserved for issuance upon the exercise of options designated as either (i)
incentive stock options ("ISOs") under the Internal Revenue Code of 1986, as
amended (the "Code") or (ii) nonqualified options. ISOs may be granted under the
Option Plan to officers and employees of the Company. Non-qualified options may
be granted to consultants, directors (whether or not they are employees),
employees or officers of the Company.

The purpose of the Option Plan is to encourage stock ownership by certain
directors, officers and employees of the Company and other persons instrumental
to the success of the Company. The Option Plan is intended to qualify under Rule
16b-3 under the Exchange Act, and is administered by the Board of Directors. The
Board, within the limitations of the Option Plan, determines the persons to whom
options will be granted, the number of shares to be covered by each option,
whether the options granted are intended to be ISOs, the duration and rate of
exercise of each option, the option purchase price per share and the manner of
exercise, and the time, manner and form of payment upon exercise of an option.

ISOs granted under the Option Plan may not be granted at a price less than
the fair market value of the Common Stock on the date of grant (or 110% of fair
market value in the case of persons holding 10% or more of the voting stock of
the Company). The aggregate fair market value of shares for which ISOs granted
to any employee are exercisable for the first time by such employee during any
calendar year (under all stock option plans of the Company and any related
corporation) may not exceed $100,000. Non-qualified options granted under the
Option Plan may not be granted at a price less than the fair market value of the
Common Stock on the date of grant. Options granted under the Option Plan will
expire not more than ten years from the date of grant (five years in the case of
ISOs granted to persons holding 10% or more of the voting stock of the Company).
All options granted under the Option Plan are not transferable during an
optionee's lifetime but are transferable at death by will or by the laws of
descent and distribution. In general, upon termination of employment of an
optionee, all options granted to such person which are not exercisable on the
date of such termination immediately terminate, and any options that are
exercisable terminate 90 days following termination of employment.

The Company has granted options under the Option Plan, effective as of the
date of this Prospectus, to purchase an aggregate of 259,250 shares. Of such
options, options to purchase 50,000, 50,000, 35,000, 25,000 and 30,000 shares
were granted to Mr. Cretella, Ms. Cretella, Mr. Harris, Mr. Golio and Mr.
Vanore, respectively, at an exercise price of $5.00 per share. The options
granted to Mr. Cretella, Ms. Cretella, Mr. Harris and Mr. Golio vest as to 50%,
25% and 25% of the shares covered thereby on the date of this Prospectus and
the first and second anniversaries of the date of this Prospectus,
respectively. The options granted to Mr. Vanore vest as to one-third of the
shares covered thereby on each of the first, second and third anniversaries of
the commencement of Mr. Vanore's employment. All of such options are
exercisable upon vesting and expire ten years from the date of grant, subject
to earlier expiration upon termination.

The Company also intends to grant options under the Option Plan to purchase
5,000 shares of Common Stock to each non-employee director of the Company upon
their re-election by the Company's stockholders at each annual meeting of the
Company's stockholders. All of such options will be exercisable at the market
value of the Common Stock on the date of grant.

Indemnification and Exculpation Provisions

The Company's Certificate of Incorporation provides for indemnification of
officers and directors to the fullest extent permitted by Delaware law. In
addition, under the Company's Certificate of Incorporation, no director shall be
liable personally to the Company or its stockholders for monetary damages for
breach of fiduciary duty as a director; provided that the Certificate of
Incorporation does not eliminate the liability of a director for (i) any breach
of the director's duty of loyalty to the Company or its stockholders; (ii) acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) acts or omissions in respect of certain unlawful
dividend payments or stock redemptions or repurchases; or (iv) any transaction
from which such director derives improper personal benefit. The Company has also
obtained directors and officers insurance.

34
<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information, immediately prior to
the consummation of this offering and as adjusted to reflect the sale by the
Company of the 1,000,000 Shares offered hereby (based on information obtained
from the persons named below), relating to the beneficial ownership of shares of
Common Stock by: (i) each person or entity who is known by the Company to own
beneficially five percent or more of the outstanding Common Stock, (ii) each of
the Company's directors and (iii) all directors and executive officers of the
Company as a group.

<TABLE>
<CAPTION>
Percentage of Shares
Beneficially Owned(2)
----------------------
Number of Shares Before After
Name and Address of Beneficial Owners(1) Beneficially Owned Offering Offering
- ------------------------------------------ -------------------- ---------- ---------
<S> <C> <C> <C>
Frank Cretella ........................... 1,679,235(3) 67.2% 48.0%
Jeanne Cretella ........................ 1,679,235(3) 67.2 48.0
Peter J. Salvatore(4) .................. 176,371(5) 7.1 5.0
Kenneth L. Harris ........................ 110,282(6) 4.4 3.2
Barry E. Krantz ........................ 0 0 0
----------- ---- ----
All directors and executive officers as a
group (seven persons) .................. 1,979,673(7) 79.1% 56.5%
----------- ---- ----
</TABLE>

- ------------
(1) Unless otherwise indicated, the address for each named individual or group
is in care of TAM Restaurants, Inc., 1163 Forest Avenue, Staten Island, New
York 10310.

(2) Unless otherwise indicated, the Company believes that all persons named in
the table have sole voting and investment power with respect to all shares
of Common Stock beneficially owned by them. A person is deemed to be the
beneficial owner of securities that can be acquired by such person within 60
days from the date of this Prospectus upon the exercise of options, warrants
or convertible securities. Each beneficial owner's percentage ownership is
determined by assuming that options, warrants or convertible securities that
are held by such person (but not those held by any other person) and which
are exercisable within 60 days of the date of this Prospectus have been
exercised and converted. Assumes a base of 2,500,000 shares of Common Stock
outstanding prior to this offering and a base of approximately 3,500,000
shares of Common Stock outstanding immediately after this offering, before
any consideration is given to other outstanding options or warrants. See
"Description of Securities."

(3) Represents (i) 1,179,235 shares held jointly by Frank Cretella and Jeanne
Cretella and (ii) 500,000 shares held by trusts of which Mr. Cretella is a
co-trustee and Mr. and Mrs. Cretella's daughter is the beneficiary. Mr.
Cretella has sole voting and dispositive power over the shares held in the
trusts. Does not include (i) options to purchase 50,000 shares of Common
Stock held by Frank Cretella, (ii) options to purchase 50,000 shares of
Common Stock held by Jeanne Cretella and (iii) Selling Securityholders'
Warrants to purchase 4,724 shares of Common Stock held by Jeanne Cretella.

(4) The address for Mr. Salvatore is 35 Seagate Road, Staten Island, New York
10310.

(5) Includes 6,082 shares of Common Stock held by Peter and Gail Salvatore
Foundation, Inc., a trust of which by Mr. and Mrs. Salvatore are the
beneficiaries. Does not include Selling Securityholders' Warrants to
purchase 88,191 shares of Common Stock.

(6) Does not include options to purchase 25,000 shares of Common Stock.

(7) Does not include options to purchase an aggregate of 190,000 shares of
Common Stock and Selling Securityholders' Warrants to purchase 92,915 shares
of Common Stock.

35
<PAGE>

CERTAIN TRANSACTIONS

Prior to January 1994, Ernest Cretella, father of Frank Cretella,
President, Chief Executive Officer, a director and a principal stockholder of
the Company, loaned the Company $100,000. In January 1994, Ernest Cretella
borrowed $125,000 from a bank, which was then loaned to the Company, and secured
the loan by mortgaging his personal residence. The Company repaid $50,000 of
the outstanding indebtedness owed to Ernest Cretella and the Company agreed to
make Ernest Cretella's mortgage payments to the bank. In September 1995, Ernest
Cretella converted the additional $50,000 principal amount of indebtedness owed
to him into 25,000 shares of Common Stock and 2,500 warrants. The Company
remains obligated to make Ernest Cretella's mortgage payments. Upon consummation
of this offering, the warrants will convert into New Warrants. In July 1996,
Ernest Cretella, loaned the Company an additional $55,000. Such loan bears
interest at the rate of 10% per annum, payable quarterly, and is due June 30,
1998.

In March 1994, the Company entered into a lease agreement to sublease the
space where Lundy's is located. Frank Cretella personally guaranteed the
Company's obligations to pay rent during the time which it occupies the leased
premises.

During 1994, Frank Cretella loaned the Company $12,500. In September 1996,
Mr. Cretella borrowed $65,000 from the Company. During the nine months June 29,
1997, Mr. Cretella repaid the $52,500 owed to the Company.

During 1995 and 1996, the Company borrowed an aggregate of $840,000 from
Fleet Bank, N.A. Such loans were collateralized by the Company's principal
executive offices, which are owned by Mr. Cretella, the warehouse leased by the
Company and owned by Leisure Time Services, Inc. ("Leisure Time"), a company
owned by Jeanne Cretella, Vice President, director and a principal stockholder
of the Company, and Mr. and Ms. Cretella's personal residence, and guaranteed by
Mr. and Mrs. Cretella and Leisure Time. In June 1997, Mr. Cretella agreed to pay
to Fleet $640,000 as payment for the amount owed by the Company (approximately
$720,000 as of October 15, 1997). In August 1997, Mr. Cretella paid to Fleet
$140,000 as part of the settlement. Mr. Cretella paid the balance of the
principal owed to Fleet and the Company paid accrued interest of approximately
$39,000 owed to Fleet in October 1997. As consideration for repaying the loan,
the Company issued to Mr. Cretella a promissory note in the original principal
amount of $720,405 which bears interest at the rate of 10% per annum. Interest
is payable in monthly installments of $6,003, with the outstanding principal
balance payable in November 2002 upon maturity of the note.

Prior to his employment by the Company, from October 1996 through September
1997, Anthony Golio, Vice President of the Company, provided consulting services
to the Company through The Pineapple Group, Inc., a restaurant consulting firm,
wholly-owned by Mr. Golio, for which he was paid an aggregate of $88,000. Such
consulting services included organizational and managerial training, labor and
cost management, negotiating with vendors and creating and restructuring
management programs.

In June 1996, the Company borrowed $88,000 from Joseph De Giulio, father of
Jeanne Cretella. The loan bears interest at the rate of 10% per annum. Interest
is payable in monthly installments of $733 and the principal is due on June 22,
2001.

As of September 1996, the Company had made advances and transferred
equipment to Forest Avenue Corporation ("Forest") and deferred management fees
due from Forest in the aggregate of $558,943. In September 1996, the assets of
Forest were sold to an unrelated third party, and since the proceeds from the
sale of such assets were insufficient to repay the amounts due to the Company,
the Company deemed such amount to be uncollectible and wrote off such amount.

Effective September 29, 1996, the Company acquired all of the outstanding
capital stock of TAM and Shellbank (the "Acquisition"). Frank and Jeanne
Cretella were officers, directors and sole stockholders of TAM and Shellbank
prior to the Acquisition. In connection with the Acquisition, Mr. and Mrs.
Cretella received 1,679,235 shares of Common Stock. Immediately prior to the
Acquisition, Frank Cretella formed American Leisure Today, Inc., formerly MAT
Operating Corp. ("American Leisure"), and, in connection with the Acquisition,
the assets relating to TAM's food concession operations were transferred to
American Leisure.

36
<PAGE>

In October 1996, the Company entered into a 10-year operating agreement
with American Leisure, a company wholly-owned by Frank Cretella, to manage the
food concessions at the Central Park Zoo and the Staten Island Zoo in New York
City for which the Company receives a management fee equal to 5% of gross sales.
During the year ended September 28, 1997, the Company received $181,012 in fees
from American Leisure, consisting of an initial fee of $125,000 relating to the
formation of American Leisure and establishment of operations relating to the
operating agreement, and $56,012 of management fees. At September 28, 1997,
American Leisure owed the Company $46,184, which has no specified repayment
terms.

In October 1996, the Company loaned to Leisure Time $153,863, pursuant to a
note which is payable in monthly installments of $1,996.01, that bears interest
at a rate of 9.56% per annum and expires on October 1, 2006. At September 28,
1997, Leisure Time owed the Company an additional $24,155, representing advances
made during such fiscal year. The advances have no specified repayment terms.

In October 1996, the Company entered into a lease agreement with Mr.
Cretella, pursuant to which the Company leases its executive offices in Staten
Island, New York. Annual rent under the lease is $37,500 per year, increasing by
1.5% each year commencing January 1, 1998. The lease expires on December 31,
2001. The Company believes that this lease is on commercially reasonable terms.

In October 1996, the Company entered into a lease agreement with Leisure
Time, pursuant to which the Company leases a warehouse in Bayonne, New Jersey.
Annual rent under the lease is $30,000 per year, increasing by 1.5% each year
commencing January 1, 1998. The lease expires on December 31, 2001. The Company
believes that this lease is on commercially reasonable terms.

From time to time the Company has entered into equipment financing leases
which have been guaranteed by Mr. Cretella and/or Leisure Time.

Any future transactions with affiliates will be on terms no less favorable
to the Company than could be obtained from unaffiliated parties and will be
approved by a majority of the independent and disinterested members of the Board
of Directors, outside the presence of any interested directors and, to the
extent deemed appropriate by the Board of Directors, the Company will obtain
stockholder approval or fairness opinions in connection with any such
transaction.

37
<PAGE>

DESCRIPTION OF SECURITIES

Capital Stock

General

The Company is authorized to issue 19,000,000 shares of Common Stock, par
value $.0001 per share, and 1,000,000 shares of Preferred Stock, par value
$.0001 per share. As of the date of this Prospectus, there are 2,500,000 shares
of Common Stock outstanding, held by approximately 51 stockholders of record,
and no shares of Preferred Stock outstanding.

Common Stock

The holders of Common Stock are entitled to one vote per share on all
matters submitted to a vote of the stockholders. There is no cumulative vote
with respect to the election of directors, with the result that the holders of
50% or more of the shares vote for the election of directors can elect all of
the directors then up for election. The holders of Common Stock, subject to
preferences that may be applicable to any Preferred Stock outstanding at the
time, are entitled to receive ratably such dividends, if any, as may be declared
from time to time by the Board of Directors out of funds legally available
therefor. In the event of liquidation or dissolution of the Company, the holders
of Common Stock are entitled to receive all assets available for distribution to
the stockholders, subject to any preferential rights of any Preferred Stock then
outstanding. The holders of Common Stock have no preemptive or other
subscription rights, and there are no conversion rights or redemption or sinking
fund provisions with respect to the Common Stock. All outstanding shares of
Common Stock are, and the shares of Common Stock offered hereby upon issuance
and sale will be, fully paid and non-assessable. The rights, preferences and
privileges of the holders of Common Stock are subject to, and may be adversely
affected by, the right of the holders of any shares of Preferred Stock which the
Company may designate in the future.

Preferred Stock

The Company is authorized to issue 1,000,000 shares of Preferred Stock from
time to time in one or more series upon authorization by the Company's Board of
Directors. The Board of Directors, without further approval of the stockholders,
is authorized to fix the dividend rights and terms, conversion rights, voting
rights, redemption rights and terms, liquidation preferences, and other rights,
preferences, privileges and restrictions applicable to each series of Preferred
Stock. The issuance of Preferred Stock, while providing flexibility in
connection with possible acquisitions and other corporate purposes could, among
other things, adversely affect the voting power of the holders of Common Stock
and, under certain circumstances, make it more difficult for a third party to
gain control of the Company, prevent or substantially delay a change of control,
discourage bids for the Company's Common Stock at a premium or otherwise
adversely affect the market price of the Common Stock.

Redeemable Warrants

Each Warrant offered hereby entitles the registered holder thereof (the
"Warrant Holders") to purchase one share of Common Stock at a price of $6.00,
subject to adjustment in certain circumstances, at any time commencing
_________, 1999 (13 months following the date of this Prospectus) (or on such
earlier date as to which the Underwriter consents) until 5:00 p.m., Eastern Time
on ______ , 2003. The Warrants will be separately transferable immediately upon
issuance.

The Warrants are redeemable by the Company at any time commencing
______________, 1999 (13 months following the date of this Prospectus) upon
notice of not less than 30 days, at a price of $.10 per Warrant, provided that
the closing bid quotation of the Common Stock on all 20 trading days ending on
the third trading day prior to the day on which the Company gives notice (the
"Call Date") has been at least 150% (currently $9.00 subject to adjustment) of
the then effective exercise price of the Warrants and the Company obtains the
consent of the Underwriter to such redemption prior to the Call Date. The
Warrant Holders shall have the right to exercise their Warrants until the close
of business on the date fixed for redemption. The Warrants will be issued in
registered form under a warrant agreement by and among the Company, Continental
Stock Transfer & Trust Company, as warrant agent, and the Underwriter (the
"Warrant Agreement"). The exercise price and number of shares of Common Stock or
other securities issuable on exercise of the Warrants are subject to adjustment
in

38
<PAGE>

certain circumstances, including in the event of a stock dividend,
recapitalization, reorganization, merger or consolidation of the Company.
However, the Warrants are not subject to adjustment for issuances of Common
Stock at prices below the exercise price of the Warrants. Reference is made to
the Warrant Agreement (which has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part) for a complete description of the
terms and conditions therein (the description herein contained being qualified
in its entirety by reference thereto).

The Warrants may be exercised upon surrender of the Warrant certificate
during the exercise period at the offices of the warrant agent, with the
exercise form on the reverse side of the Warrant certificate completed and
executed as indicated, accompanied by full payment of the exercise price (by
certified check or bank draft payable to the Company) to the warrant agent for
the number of Warrants being exercised. The Warrant Holders do not have the
rights or privileges of holders of Common Stock.

No Warrant will be exercisable unless at the time of exercise the Company
has declared effective a current registration statement with the Commission
covering the shares of Common Stock issuable upon exercise of such Warrant and
such shares have been registered or qualified or deemed to be exempt from
registration or qualification under the securities laws of the state of
residence of the holder of such Warrant. The Company will use its best efforts
to have all such shares so registered or qualified on or before the exercise
date and to maintain a current prospectus relating thereto until the expiration
of the Warrants, subject to the terms of the Warrant Agreement. While it is the
Company's intention to do so, there can be no assurance that it will be able to
do so.

No fractional shares will be issued upon exercise of the Warrants. However,
if a Warrant Holder exercises all Warrants then owned of record by him, the
Company will pay to such Warrant Holder, in lieu of the issuance of any
fractional share which is otherwise issuable, an amount in cash based on the
market value of the Common Stock on the last trading day prior to the exercise
date.

Other Existing Warrants

There are currently outstanding warrants to purchase an aggregate of
310,000 shares of Common Stock all of which are being converted into Selling
Securityholders' Warrants. The Selling Securityholders' Warrants will be
identical to the Warrants. There are other outstanding warrants to purchase (i)
3,000 shares at an exercise price of $.01 which are exercisable until October
23, 2002 and (ii) 200,000 shares at an exercise price of $5.00 per share which
are exercisable commencing 90 days from the date of this Prospectus until
October 31, 2002. The Company granted certain registration right to the holder
of the warrants to purchase 200,000 shares of Common Stock.

Delaware Anti-Takeover Law

The Company is subject to certain anti-takeover provisions under Section
203 of the Delaware General Corporation Law. In general, under Section 203, a
Delaware corporation may not engage in any business combination with any
"interested stockholder" (a person that owns, directly or indirectly, 15% or
more of the outstanding voting stock of a corporation or is an affiliate of a
corporation and was the owner of 15% or more of the outstanding voting stock),
for a period of three years following the date such stockholder became an
interested stockholder, unless (i) prior to such date the board of directors of
the corporation approved either the business combination or the transaction
which resulted in the stockholder becoming an interested stockholder, or (ii)
upon consummation of the transaction which resulted in the stockholder becoming
an interested stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced, or (iii) on or subsequent to such date, the business combination is
approved by the board of directors and authorized at an annual or special
meeting of stockholders by at least 66 2/3% of the outstanding voting stock
which is not owned by the interested stockholder. The restrictions imposed by
Section 203 will not apply to a corporation if the corporation's initial
certificate of incorporation contains a provision expressly electing not to be
governed by this section or the corporation by action of its stockholders
holding a majority of outstanding stock adopts an amendment to its certificate
of incorporation or by-laws expressly electing not to be governed by Section
203.

The Company has not elected out of Section 203, and upon consummation of
this offering and the listing of Common Stock on Nasdaq. Such provision could
have the effect of discouraging, delaying or preventing a takeover of the
Company, which could otherwise be in the best interest of the Company's
stockholders, and have an adverse effect on the market price for the Company's
Common Stock.

39
<PAGE>

Transfer Agent and Warrant Agent

The transfer agent for the Common Stock and the warrant agent for the
Warrants is Continental Stock Transfer & Trust Company, Two Broadway, New York,
New York 10004.

Reports to Stockholders

The Company intends to file a registration statement with the Securities
and Exchange Commission to register its Common Stock and Warrants under the
provisions of Section 12(g) of the Exchange Act prior to the date of this
Prospectus and has agreed with the Underwriter that it will use its best efforts
to continue to maintain such registration. Such registration will require the
Company to comply with periodic reporting, proxy solicitation and certain other
requirements of the Exchange Act.

SHARES ELIGIBLE FOR FUTURE SALE

Upon the consummation of this offering, the Company will have 3,500,000
shares of Common Stock outstanding (assuming no exercise of the Warrants). All
1,000,000 of the Shares being offered hereby will be immediately tradable
without restriction or further registration under the Securities Act. The
remaining 2,500,000 shares of Common Stock outstanding are deemed to be
"restricted securities," as that term is defined under Rule 144 promulgated
under the Securities Act, in that such shares were acquired by the stockholders
of the Company in transactions not involving a public offering, and, as such,
may only be sold pursuant to a registration statement under the Securities Act,
in compliance with the exemption provisions of Rule 144, or pursuant to another
exemption under the Securities Act. All of the restricted shares will become
eligible for sale under Rule 144, subject to the volume limitations prescribed
by the Rule, 90 days following the date of this Prospectus.

In general, under Rule 144 as currently in effect, subject to the
satisfaction of certain other conditions, a person, including an affiliate of
the Company (or persons whose shares are aggregated with an affiliate), who has
owned restricted shares of Common Stock beneficially for at least one year is
entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of 1% of the total number of outstanding shares of the
same class or, if the common stock is quoted on Nasdaq, the average weekly
trading volume during the four calendar weeks preceding the sale. A person who
has not been an affiliate of the Company for at least three months immediately
preceding the sale and who has beneficially owned shares of Common Stock for at
least two years is entitled to sell such shares under Rule 144 without regard to
any of the limitations described above.

The holders of 227,730 shares of Common Stock and the holders of the
310,000 Selling Securityholders' Warrants and 3,000 other outstanding warrants
have agreed not to sell, assign, transfer, pledge, hypothecate or otherwise
dispose of any of such securities for a period of, at the earliest, 15 months
from the date of this Prospectus without the Underwriter's prior written
consent. The holders of 241,592 shares of Common Stock and the holders of
200,000 outstanding warrants have agreed not to sell, assign, transfer, pledge,
hypothecate or otherwise dispose of any of such shares for a period of 18 months
from the date of this Prospectus without the Underwriter's prior written
consent. The holders of 1,979,673 shares of Common Stock (including the officers
and directors of the Company) have agreed not to sell, assign, transfer, pledge,
hypothecate or otherwise dispose of any of such shares for a period of 24 months
from the date of this Prospectus without the Underwriter's prior written
consent. The Underwriter has not entered into any agreements to waive any of the
foregoing lock up agreements.

Prior to this offering, there has been no market for the Common Stock or
Warrants and no prediction can be made as to the effect, if any, that public
sales of shares of Common Stock or the availability of such shares for sale will
have on the market prices of the Common Stock and the Warrants prevailing from
time to time. Nevertheless, the possibility that substantial amounts of Common
Stock may be sold in the public market may adversely affect prevailing market
prices for the Common Stock and the Warrants and could impair the Company's
ability in the future to raise additional capital through the sale of its equity
securities.

40
<PAGE>

UNDERWRITING

Paragon Capital Corporation (the "Underwriter") has agreed, subject to the
terms and conditions contained in the Underwriting Agreement, to purchase the
1,000,000 Shares and 500,000 Warrants offered hereby from the Company. The
Underwriter is committed to purchase and pay for all of the Shares and Warrants
offered hereby if any of such securities are purchased. The Shares and Warrants
are being offered by the Underwriter, subject to prior sale, when, as and if
delivered to and accepted by the Underwriter and subject to approval of certain
legal matters by counsel and to certain other conditions.

The Underwriter has advised the Company that it proposes to offer the
Shares and Warrants to the public at the public offering prices set forth on the
cover page of this Prospectus. The Underwriter may allow to certain dealers who
are members of the National Association of Securities Dealers, Inc. (the "NASD")
concessions, not in excess of $ per Share and $ per Warrant, of which not in
excess of $ per Share and $ per Warrant may be reallowed to other dealers who
are members of the NASD.

The Company has granted to the Underwriter an option, exercisable for 45
days from the date of this Prospectus, to purchase up to 150,000 additional
shares of Common Stock and/or 75,000 additional Warrants at the public offering
prices set forth on the cover page of this Prospectus, less the underwriting
discounts and commissions. The Underwriter may exercise this option in whole or,
from time to time, in part, solely for the purpose of covering over-allotments,
if any, made in connection with the sale of the Shares and/or Warrants offered
hereby.

The Company has agreed to pay the Underwriter a nonaccountable expense
allowance of 3% of the gross proceeds of this offering, of which $50,000 has
been paid as of the date of this Prospectus. The Company has also agreed to pay
all expenses in connection with qualifying the Shares and Warrants offered
hereby for sale under the laws of such states as the Underwriter may designate,
including expenses of counsel retained for such purpose by the Underwriter.

The Company has agreed to sell to the Underwriter and its designees for an
aggregate of $105, warrants (the "Underwriter's Warrants") to purchase up to
100,000 shares of Common Stock at an exercise price of $6.00 per share (120% of
the public offering price per share) and up to 50,000 Warrants (each exercisable
to purchase one share of Common Stock at a price of $7.25 per share) at an
exercise price of $.12 per Warrant (120% of the public offering price per
Warrant). The Underwriter's Warrants may not be sold, transferred, assigned or
hypothecated for one year from the date of this Prospectus, except to the
officers and partners of the Underwriter and members of the selling group and
are exercisable at any time and from time to time, in whole or in part, during
the four-year period commencing one-year from the date of this Prospectus (the
"Warrant Exercise Term"). During the Warrant Exercise Term, the holders of the
Underwriter's Warrants are given, at nominal cost, the opportunity to profit
from a rise in the market price of the Common Stock. To the extent that the
Underwriter's Warrants are exercised, dilution to the interests of the Company's
stockholders will occur. Further, the terms upon which the Company will be able
to obtain additional equity capital may be adversely affected since the holders
of the Underwriter's Warrants can be expected to exercise them at a time when
the Company would, in all likelihood, be able to obtain any needed capital on
terms more favorable to the Company than those provided in the Underwriter's
Warrants. Any profit realized by the Underwriter on the sale of the
Underwriter's Warrants, the underlying shares of Common Stock or the underlying
warrants, or the shares of Common Stock issuable upon exercise of such
underlying warrants may be deemed additional underwriting compensation. The
Company has agreed, at the request of the holders of a majority of the
Underwriter's Warrants, at the Company's expense, to register the Underwriter's
Warrants, the shares of Common Stock and warrants underlying the Underwriter's
Warrants, and the shares of Common Stock issuable upon exercise of the
underlying warrants under the Securities Act on one occasion during the Warrant
Exercise Term and to include the Underwriter's Warrants and all such underlying
securities in any appropriate registration statement which is filed by the
Company during the seven years following the date of this Prospectus.

The Company has also agreed, for a period of three years from the date of
this Prospectus, if so requested by the Underwriter, to nominate and use its
best efforts to elect a designee of the Underwriter as a director of the
Company, or, at the Underwriter's option, as a non-voting advisor to the
Company's Board of Directors. The Company's officers, directors and stockholders
have agreed to vote their shares of Common Stock in favor of such designee. The
Underwriter has not yet exercised its right to designate such a person.

41
<PAGE>

In addition, the Company has agreed to enter into a consulting agreement to
retain the Underwriter as a financial consultant for a period of two years from
the consummation of this offering at an annual fee of $30,000, the entire
$60,000 payable in full, in advance. The consulting agreement will not require
the consultant to devote a specific amount of time to the performance of its
duties thereunder. In the event that the Underwriter originates a financing or a
merger, acquisition, joint venture or other transaction to which the Company is
a party, the Underwriter will be entitled to receive a finder's fee in
consideration for origination of such transaction. There are no existing plans,
proposals, amendments, understandings or agreements relating to any such
transactions for which the Underwriter would be entitled to compensation.

The Company has agreed, in connection with the exercise of the Warrants
pursuant to solicitation (commencing one year from the date of this Prospectus),
to pay to the Underwriter a fee of 5% of the exercise price for each Warrant
exercised; provided, however, that the Underwriter will not be entitled to
receive such compensation in Warrant exercise transactions in which (i) the
market price of Common Stock at the time of exercise is lower than the exercise
price of the Warrants; (ii) the Warrants are held in any discretionary account;
(iii) disclosure of compensation arrangements is not made, in addition to the
disclosure provided in this Prospectus, in documents provided to holders of
Warrants at the time of exercise; (iv) the exercise of the Warrants is
unsolicited by the Underwriter; or (v) the solicitation of exercise of the
Warrants was in violation of Regulation M promulgated under the Exchange Act.

Regulation M may prohibit the Underwriter from engaging in any market
making activities with regard to the Company's securities for the period from
nine business days (or such other applicable period as Regulation M may provide)
prior to any solicitation by the Underwriter of the exercise of Warrants until
the later of the termination of such solicitation activity or the termination
(by waiver or otherwise) of any right that the Underwriter may have to receive a
fee for the exercise of Warrants following such solicitation. As a result, the
Underwriter may be unable to continue to provide a market for the Company's
securities during certain periods while the Warrants are exercisable.

The holders of 227,730 shares of Common Stock and the holders of the
310,000 Selling Securityholders' Warrants and 3,000 other warrants have agreed
not to sell, assign, transfer, pledge, hypothecate or otherwise dispose of any
of such securities for a period of 15 months from the date of this Prospectus,
without the Underwriter's prior written consent. The holders of 241,592 shares
of Common Stock and the holders of 200,000 outstanding warrants have agreed not
to sell, assign, transfer, pledge, hypothecate or otherwise dispose of any of
such securities for a period of 18 months, without the prior written consent of
the Underwriter. The holders of 1,979,673 shares of Common Stock (including the
officers and directors of the Company), have agreed not to sell, assign,
transfer, pledge, hypothecate or otherwise dispose of any of such securities of
the Company for a period of 24 months from the date of this Prospectus, without
the prior written consent of the Underwriter. The Underwriter has not entered
into any agreements to waive any of the foregoing lockup agreements.

The Underwriter has advised the Company that it does not expect sales made
to discretionary accounts to exceed 1% of the securities offered hereby.

The Company has agreed to indemnify the Underwriter against certain civil
liabilities, including liabilities under the Securities Act.

Prior to this offering, there has been no public trading market for the
Common Stock or Warrants. Consequently, the initial public offering price of the
Common Stock and Warrants and the exercise price of the Warrants have been
determined by negotiations between the Company and the Underwriter. Among the
factors considered in determining these prices were the Company's financial
condition and prospects, market prices of similar securities of comparable
publicly-traded companies and the general condition of the securities market.

In order to facilitate the offering, the Underwriter may engage in
transactions that stabilize, maintain or otherwise affect the prices of the
Common Stock and Warrants. Specifically, the Underwriter may over-allot in
connection with the offering, creating a short position in the Common Stock
and/or Warrants for its own account. In addition, to cover over-allotments or to
stabilize the price of the Common Stock and Warrants, the Underwriter may bid
for, and purchase, shares of Common Stock and Warrants in the open market. The
Underwriter may also reclaim selling concessions allowed to a dealer for
distributing the Common Stock and Warrants in the offering, if the Underwriter
repurchases previously distributed Common Stock and Warrants in transactions to

42
<PAGE>

cover short positions, in stabilization transactions or otherwise. Any of these
activities may stabilize or maintain the market price of the Common stock and
Warrants above independent market levels. The Underwriter is not required to
engage in these activities, and may end any of these activities at any time.

SELLING SECURITYHOLDERS AND PLAN OF DISTRIBUTION

The Company has agreed to register the public offering of the Selling
Securityholders' Warrants and Selling Securityholders' Shares under the
Securities Act concurrently with this offering and to pay all expenses in
connection therewith. An aggregate of 310,000 Selling Securityholders' Warrants
and/or Selling Securityholders' Shares may be offered and sold pursuant to this
Prospectus by the Selling Securityholders. None of the Selling Securityholders'
Warrants nor Selling Securityholders' Shares may be sold by the Selling
Securityholders prior to, at the earliest, 15 months after the date of this
Prospectus, without the prior written consent of the Underwriter. None of the
Selling Securityholders has ever held any position or office with the Company or
had any other material relationship with the company. The Company will not
receive any of the proceeds from the sale of the Selling Securityholders'
Warrants and/or Selling Securityholders' Shares by the Selling Securityholders.
The following table sets forth certain information with respect to the Selling
Securityholders:
<TABLE>
<CAPTION>
Beneficial Warrants Beneficial
Ownership of Being Ownership of
Warrants Registered Warrants After
Selling Securityholder Prior to Sale For Sale Sale (1)
---------------------- --------------- ------------ ----------------
<S> <C> <C> <C>
Carmella Agostino .................. 2,433 2,433 0
Gina Ali ........................... 138 138 0
Gregory and Andrew Birch ............ 276 276 0
Ernest and Madeline Cretella(3) ... 1,379 1,379 0
Jeanne Cretella(4) .................. 4,724 4,724 0
Salvatore Cumella .................. 132 132 0
Rosita Curiale ..................... 2,757 2,757 0
Carina DeGiulio(5) .................. 6,893 6,893 0
Natalie DeGiulio(6) ............... 6,893 6,893 0
Richard DelNunzio .................. 138 138 0
Thomas DiChiara ..................... 1,379 1,379 0
Gary Duval ........................ 689 689 0
Eric Emanuel ........................ 55,141 55,141 0
John Flangan ........................ 2,206 2,206 0
Larry Frisman ..................... 12,164 12,164 0
Anselmo Gabriel ..................... 689 689 0
Paul Gilberto ..................... 276 276 0
Joseph Golio(8) ..................... 1,379 1,379 0
Linda Gullota ..................... 276 276 0
Teresa Ildebrando .................. 1,216 1,216 0
Kayne, Anderson Offshore Limited . 5,514 5,514 0
George Kaloidis ..................... 1,378 1,378 0
James Kaloidis ..................... 1,378 1,378 0
James Kriel ........................ 1,379 1,379 0
Donald and Ruth Lentnek ............ 827 827 0
Marci Lentnek ..................... 276 276 0
Ambrose MagIiocco .................. 19,462 19,462 0
David and Bryra Malitzky ............ 138 138 0
Ann Maresca ........................ 138 138 0
Mark Family Limited Partnership ... 6,082 6,082 0
Ronald Mattia ..................... 1,654 1,654 0
Marvin Menaged ..................... 24,327 24,327 0
Rose Natale ........................ 2,433 2,433 0
Offshore Group Associates, L.P. ... 38,599 38,599 0
Opportunity Associates, L.P. ...... 11,028 0 11,028
George Pantelidis .................. 1,378 1,378 0
Thomas and Margaret Powazinik ...... 276 276 0
Dhanonjoy Saha ..................... 276 276 276
Peter Salvatore(9)(10) ............ 85,145 85,145 0
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
Percentage
Beneficial Common Beneficial Beneficial
Ownership Stock Ownership Ownership
of Common Being of Common After Sale
Stock Prior Registered Stock After (Common
Selling Securityholder to Sale (2) For Sale Sale (2) Stock)
---------------------- --------------- ------------ --------------- -----------
<S> <C> <C> <C> <C>
Carmella Agostino .................. 7,299 2,433 4,866 *
Gina Ali ........................... 1,517 138 1,379 *
Gregory and Andrew Birch ............ 3,033 276 2,757 *
Ernest and Madeline Cretella(3) ... 15,164 1,379 13,785 *
Jeanne Cretella(4) .................. 1,683,962 4,724 1,679,235 48.1%
Salvatore Cumella .................. 1,455 132 1,323 *
Rosita Curiale ..................... 30,328 2,757 27,571 *
Carina DeGiulio(5) .................. 20,678 6,893 13,785 *
Natalie DeGiulio(6) ............... 20,678 6,893 13,785 *
Richard DelNunzio .................. 1,517 138 1,379 *
Thomas DiChiara ..................... 15,164 1,379 13,785 *
Gary Duval ........................ 7,582 689 6,893 *
Eric Emanuel ........................ 69,169(7) 55,141 14,028(3) *
John Flangan ........................ 24,262 2,206 22,056 *
Larry Frisman ..................... 36,491 12,164 24,327 *
Anselmo Gabriel ..................... 7,582 689 6,893 *
Paul Gilberto ..................... 3,033 276 2,757 *
Joseph Golio(8) ..................... 15,164 1,379 13,785 *
Linda Gullota ..................... 3,033 276 2,757 *
Teresa Ildebrando .................. 3,649 1,216 2,433 *
Kayne, Anderson Offshore Limited . 16,542 5,514 11,028 *
George Kaloidis ..................... 6,892 1,378 5,514 *
James Kaloidis ..................... 6,892 1,378 5,514 *
James Kriel ........................ 15,164 1,379 13,785 *
Donald and Ruth Lentnek ............ 9,098 827 8,271 *
Marci Lentnek ..................... 3,033 276 2,757 *
Ambrose MagIiocco .................. 58,386 19,462 38,924 1.1%
David and Bryra Malitzky ............ 1,517 138 1,379 *
Ann Maresca ........................ 1,517 138 1,379 *
Mark Family Limited Partnership ... 18,246 6,082 12,164 *
Ronald Mattia ..................... 18,196 1,654 16,542 *
Marvin Menaged ..................... 72,481 24,327 48,654 1.4
Rose Natale ........................ 7,299 2,433 4,866 *
Offshore Group Associates, L.P. ... 115,797 38,599 77,198 2.2%
Opportunity Associates, L.P. ...... 33,084 11,028 22,056 *
George Pantelidis .................. 6,892 1,378 5,514 *
Thomas and Margaret Powazinik ...... 3,033 276 2,757 *
Dhanonjoy Saha ..................... 0 3,033 2,757 *
Peter Salvatore(9)(10) ............ 255,434 85,145 170,289 4.9%
</TABLE>

43
<PAGE>

<TABLE>
<CAPTION>
Beneficial Warrants Beneficial
Ownership of Being Ownership of
Warrants Registered Warrants After
Selling Securityholder Prior to Sale For Sale Sale (1)
---------------------- --------------- ------------ ----------------
<S> <C> <C> <C>
Peter and Gail Salvatore Foundation,
Inc.(9) ........................... 3,047 3,047 0
Mary Tozzi ........................ 2,433 2,433 0
Simeon Vougouklis .................. 1,378 1,378 0
Klaus and Lisa Whitney ............ 276 276 0

Percentage
Beneficial Common Beneficial Beneficial
Ownership Stock Ownership Ownership
of Common Being of Common After Sale
Stock Prior Registered Stock After (Common
Selling Securityholder to Sale (2) For Sale Sale (2) Stock)
---------------------- ------------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
Peter and Gail Salvatore Foundation,
Inc.(9) ........................... 9,129 3,047 6,082 *
Mary Tozzi ........................ 7,299 2,433 4,866 *
Simeon Vougouklis .................. 6,892 1,378 5,514 *
Klaus and Lisa Whitney ............ 3,033 276 2,757 *
</TABLE>
- ------------
* Less than 1%

(1) Assumes all of the Selling Securityholders' Warrants and Selling
Securityholders' Shares are sold by the Selling Securityholders.

(2) Includes the shares of Common Stock underlying the Selling
Securityholders' Warrants.

(3) Parents of Frank Cretella, President, Chief Executive Officer and a
director of the Company.

(4) Vice President and a director of the Company.

(5) Sister of Jeanne Cretella, Vice President and a director of the Company.

(6) Mother of Jeanne Cretella, Vice President and a director of the Company.

(7) Includes 3,000 shares of Common Stock issuable upon exercise of currently
exercisable outstanding warrants.

(8) Brother of Anthony Golio, Vice President of the Company.

(9) Mr. Salvatore has agreed to serve as director of the Company upon the
consummation of this offering.

(10) Includes 48,653 shares of Common Stock and 24,327 Selling Securityholders
Warrants held by IRA-FBO Peter Salvatore. Does not include the 6,093
shares of Common Stock and 3,047 Selling Securityholders Warrants held by
Peter and Gail Salvatore Foundation, Inc.

The Selling Securityholders' Warrants and Selling Securityholders' Shares
may be offered and sold from time to time as market conditions permit in the
over-the-counter market, or otherwise, at prices and terms then prevailing or at
prices related to the then-current market price, or in negotiated transactions.
The Selling Securityholders' Warrants and Selling Securityholders' Shares may be
sold by one or more of the following methods, without limitation: (i) a block
trade in which a broker or dealer so engaged will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction; (ii) purchases by a broker or dealer as principal
and resale by such broker or dealer for its account pursuant to this Prospectus;
(iii) ordinary brokerage transactions and transactions in which broker solicits
purchases; and (iv) transactions between sellers and purchasers without a
broker/dealer. In effecting sales, brokers or dealers engaged by the Selling
Securityholders may arrange for other brokers or dealers to participate. Such
brokers or dealers may receive commissions or discounts from selling
Securityholders in amounts to be negotiated. Such brokers and dealers and any
other participating brokers and dealers may be deemed to be "underwriters"
within the meaning of the Securities Act, in connection with such sales.
<PAGE>

LEGAL MATTERS

The legality of the securities offered by this Prospectus will be passed
upon for the Company by Tenzer Greenblatt LLP, New York, New York. Akerman,
Senterfitt and Eidson, P.A., Miami, Florida, has acted as counsel to the
Underwriter in connection with this offering. Tenzer Greenblatt LLP has
represented and continues to represent the Underwriter in other matters.

EXPERTS

The financial statements of the Company included in this Prospectus have
been audited by BDO Seidman, LLP and Maltese, Potter & LaMarca LLP, independent
public accountants to the extent and for the periods set forth in their
respective reports appearing herein and have been included herein in reliance
upon the reports of said firms given upon their authority as experts in
accounting and auditing.

44
<PAGE>

CHANGE IN INDEPENDENT AUDITORS

In September 1997, the Company's Board of Directors retained BDO Seidman,
LLP as its independent public accountants and replaced the Company's former
auditors, Maltese, Potter & LaMarca LLP, as its independent public accountants.
During the period Maltese, Potter & LaMarca LLP was retained, there were no
disagreements with the former auditors on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure with
respect to the Company's financial statements for the fiscal year ended
September 29, 1996 or up through the time of replacement which, if not resolved
to the former auditors' satisfaction, would have caused them to make reference
to the subject matter of the disagreement in connection with their report. For
the past fiscal year, no accountant's report prepared by the former auditors
contained an adverse opinion or disclaimer of opinion or was qualified or
modified as to uncertainty, audit scope or accounting principles. Prior to
retaining BDO Seidman, LLP, the Company had not consulted with BDO Seidman, LLP
regarding accounting practices.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form SB-2 (the "Registration
Statement") under the Securities Act with respect to the securities offered by
this Prospectus. This Prospectus, filed as a part of such Registration
Statement, does not contain all of the information set forth in, or annexed as
exhibits to, the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulation of the Commission. For further
information with respect to the Company and this offering, reference is made to
the Registration Statement, including the exhibits filed therewith, which may be
inspected without charge at the Office of the Commission, 450 Fifth Street,
N.W., Washington D.C. 20549; and at the following regional offices: Midwest
Regional Office, Northwestern Atrium Center, 500 West Madison, Suite 1400,
Chicago, Illinois 60661-2511, and the Northeast Regional Office, 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of the Registration
Statement may be obtained from the Commission at its principal office upon
payment of prescribed fees. Statements contained in this Prospectus as to the
contents of any contract or other document are not necessarily complete and,
where the contract or other document has been filed as an exhibit to the
Registration Statement, each statement is qualified in all respects by reference
to the applicable document filed with the Commission. The Commission maintains
an Internet web site that contains reports, proxy and information statements and
other information regarding issuers that file electronically with the
Commission. The address of that site is http://www.sec.gov.

Upon consummation of this offering, the Company will become subject to the
reporting requirements of the Securities Exchange Act of 1934 and in accordance
therewith will file reports, proxy statements and other information with the
Commission. The Company intends to furnish to its stockholders with annual
reports containing audited financial statements and such other reports as the
Company deems appropriate or as may be required by law.

45
<PAGE>

TAM RESTAURANT HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 29, 1996 AND SEPTEMBER 28, 1997

<PAGE>

TAM RESTAURANTS, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page(s)
-------------
<S> <C>
Reports of Independent Certified Public Accountants .................. F-2 to F-3

Financial Statements

Consolidated Balance Sheets ....................................... F-4

Consolidated Statements of Operations .............................. F-5

Consolidated Statements of Changes in Stockholders' Equity (Deficit) F-6

Consolidated Statements of Cash Flows .............................. F-7

Notes to Consolidated Financial Statements ........................ F-8 to F-18
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders
of TAM Restaurants, Inc. and Subsidiaries
Staten Island, New York

We have audited the accompanying consolidated balance sheet of TAM Restaurants,
Inc. and Subsidiaries as of September 28, 1997, and the related consolidated
statements of operations, changes in stockholders' equity, and cash flows for
the year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of TAM
Restaurants, Inc. and Subsidiaries as of September 28, 1997, and the results of
their operations and their cash flows for the year then ended, in conformity
with generally accepted accounting principles.

/s/ BDO SEIDMAN, LLP

BDO SEIDMAN, LLP

New York, New York
December 18, 1997

F-2
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders
of TAM Restaurants, Inc. and Subsidiaries
Staten Island, New York

We have audited the accompanying consolidated balance sheet of TAM Restaurants,
Inc. and Subsidiaries as of September 29, 1996, and the related consolidated
statements of operations, changes in stockholders' equity (deficit), and cash
flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of TAM
Restaurants, Inc. and Subsidiaries as of September 29, 1996, and the results of
their operations and their cash flows for the year then ended, in conformity
with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note N to the
financial statements, the Company's significant operating losses and negative
working capital raise substantial doubt about its ability to continue as a
going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

/s/ Maltese, Potter & La Marca LLP

Maltese, Potter & La Marca LLP

Staten Island, New York
July 31, 1997, except for the first
paragraph of Note Q which is as
of December 18, 1997

F-3
<PAGE>

TAM RESTAURANTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

ASSETS
<TABLE>
<CAPTION>
September 29, September 28,
1996 1997
--------------- --------------
<S> <C> <C>
Current Assets
Cash ......................................................... $ 66,616 $ 281,625
Accounts receivable (net of allowance for doubtful accounts of
$15,546 and $-) .......................................... 235,948 287,368
Inventory ................................................... 207,978 204,706
Prepaid and other expenses ................................. 270,216 366,066
Loan receivable-officer .................................... 53,602 46,459
----------- ------------
Total Current Assets ....................................... 834,360 1,186,224
Property and Equipment-Net .................................... 3,451,596 4,290,978
Due from Affiliates .......................................... 177,438 215,284
Deferred Stock Offering Costs ................................. -- 128,322
Other Assets ................................................ 56,175 119,219
----------- ------------
TOTAL ASSETS ................................................ $ 4,519,569 $ 5,940,027
=========== ============
LIABILITIES
Current Liabilities
Revolving credit line payable .............................. $ 130,000 $ --
Current portion of long-term debt ........................ 283,938 438,970
Current portion of capitalized lease obligations ......... 81,081 79,245
Loans payable -- related parties ........................... -- 56,680
Accounts payable .......................................... 1,073,995 522,824
Contract deposits payable ................................. 238,329 263,309
Accrued expenses .......................................... 996,804 2,376,205
---------- ----------
Total Current Liabilities .............................. 2,804,147 3,737,233
---------- ----------
Long-term Liabilities
Deferred rent expense .................................... 148,084 224,536
Deferred expenses .......................................... 237,250 --
Deferred income .......................................... 43,000 7,819
Loans payable-related parties .............................. 236,000 926,550
Long-term debt-net of current portion ..................... 937,924 582,393
Capitalized lease obligations-net of current portion ...... 249,040 135,592
---------- ----------
Total Long-term Liabilities .............................. 1,851,298 1,876,890
---------- ----------
TOTAL LIABILITIES .......................................... 4,655,445 5,614,123
---------- ----------
Commitments and Contingencies ..............................

STOCKHOLDERS' EQUITY (DEFICIT)

Stockholders' Equity (Deficit)
Preferred stock; $.0001 par value; 1,000,000 shares
authorized, 0 shares issued and outstanding ............... $ -- $ --
Common stock; $.0001 par value; 19,000,000 shares authorized;
2,444,859 and 2,500,000 shares issued and outstanding as of
September 29, 1996 and September 28, 1997, respectively,.. 244 250
Additional paid-in capital ................................. 2,907,802 3,107,796
Accumulated deficit ....................................... (3,043,922) (2,782,142)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) ........................ (135,876) 325,904
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .................. $ 4,519,569 $ 5,940,027
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.

F-4
<PAGE>

TAM RESTAURANTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended Year Ended
September 29, 1996 September 28, 1997
-------------------- -------------------
<S> <C> <C>
Sales ...................................................... $ 11,829,088 $ 14,025,468
Cost of Sales ............................................. 7,871,440 8,075,412
------------- ------------
Gross Profit ............................................. 3,957,648 5,950,056
Operating and Administrative Expenses ..................... 5,660,870 4,934,025
------------- ------------
Income (loss) from Operations .............................. (1,703,222) 1,016,031
------------- ------------
Other Expense
Write-off of advance to affiliate ........................ 558,943 --
Interest expense .......................................... 363,994 341,295
Barter expense .......................................... 304,135 412,956
Other Expense ............................................. 39,109 --
------------- ------------
Total Other Expense .................................... 1,266,181 754,251
------------- ------------
Income (loss) from Continuing Operations Before Income
Tax Benefit ............................................. (2,969,403) 261,780
Income Tax Benefit ....................................... 98,588 --
------------- ------------
Income (loss) from Continuing Operations .................. (2,870,815) 261,780
Income from Discontinued Operations (Net of Income
Taxes of $20,093).......................................... 30,142 --
------------- ------------
Net Income (loss) ....................................... $ (2,840,673) $ 261,780
============= ============
Income (loss) per common share:
Income (loss) from continuing operations .................. (1.33) $.10
Income from discontinued operations ..................... .01 --
-------------- ------------
Net Income (loss) Per Common Share ........................ $ (1.32) $.10
============= ============
Weighted average number of common shares outstanding ...... 2,160,676 2,526,957
============= ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.

F-5
<PAGE>

TAM RESTAURANTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>

Common Stock Additional
---------------------- Paid-In Accumulated
Shares Amount Capital Deficit
----------- -------- ------------- ----------------
<S> <C> <C> <C> <C>
Balances at October 1, 1995 .................. 1,679,236 $168 $ 187,988 $ (203,249)
Issuance of Common Stock ..................... 510,084 51 1,925,592 --
Issuance of Common Stock for Settlement ...... 22,056 2 79,998 --
Common Stock Issued for Services ............ 173,881 17 472,833 --
Transfer of Assets in Connection with
Reorganization .............................. -- -- (1,710) --
Stock Issued for Debt ........................ 59,602 6 234,994 --
Warrants Issued for Debt ..................... -- -- 8,107 --
Net Loss for the Year ........................ -- -- -- (2,840,673)
--------- ---- ---------- ------------
Balances at September 29, 1996 ............... 2,444,859 244 2,907,802 (3,043,922)
Issuance of Common Stock ..................... 55,141 6 199,994 --
Net Income for the Year ..................... -- -- -- 261,780
--------- ---- ---------- ------------
Balances at September 28, 1997 ............... 2,500,000 $250 $3,107,796 $ (2,782,142)
========= ==== ========== ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.

F-6
<PAGE>

TAM RESTAURANTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended Year Ended
September 29, 1996 September 28, 1997
-------------------- -------------------
<S> <C> <C>
Cash Flows from Operating Activities
Net income (loss) ............................................. $ (2,840,673) $ 261,780
Adjustments to reconcile net income (loss) to net cash provided
by (used in) operating activities:
Depreciation and amortization expense ..................... 359,969 334,896
Deferred rent expense .................................... 148,083 76,452
Deferred expenses .......................................... 237,250 --
Deferred income .......................................... (7,184) (35,181)
Special compensation expense .............................. 561,114 --
Write-off of advance to affiliate ........................ 559,123 --
(Increase) decrease in:
Accounts receivable ....................................... 6,928 (51,420)
Inventory ................................................ (77,238) 3,272
Prepaid and other expenses ................................. (125,343) (95,850)
Other assets ............................................. (26,874) (65,619)
Increase (decrease) in:
Accounts payable .......................................... 418,920 (551,171)
Contract deposits payable ................................. 62,476 24,980
Accrued expenses .......................................... 380,629 1,142,151
------------- ------------
Net Cash provided by (used in) Operating Activities ............ (342,820) 1,044,290
------------- ------------
Cash Flows from Investing Activities
Acquisition of property and equipment ........................ (2,458,971) (1,117,856)
------------- ------------
Net Cash used in Investing Activities ........................ (2,458,971) (1,117,856)
------------- ------------
Cash Flows from Financing Activities
Net repayments of officer's loans ........................... 60,545 7,143
Loans receivable ............................................. 33,403 32,393
Repayment of revolving credit line ........................... -- (130,000)
Proceeds from long-term debt ................................. 1,215,470 905,158
Principal payments on long-term debt and capitalized lease
obligations ................................................ (203,840) (527,558)
Advances from affiliates and others ........................... 1,142 (70,239)
Deferred stock offering costs ................................. -- (128,322)
Proceeds from capital stock issue ........................... 1,613,933 200,000
------------- ------------
Net Cash provided by Financing Activities ..................... 2,720,653 288,575
------------- ------------
Net Increase (Decrease) in Cash .............................. (81,138) 215,009
Cash, Beginning of year ....................................... 147,754 66,616
------------- ------------
Cash, End of year ............................................. $ 66,616 $ 281,625
============= ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.

F-7
<PAGE>

TAM RESTAURANTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note A -- Summary of Significant Accounting Policies

Nature of business

TAM Restaurants, Inc. ("The Company") was incorporated under the laws of
the State of Delaware in July 1996 under the name TAM Restaurant Holding Corp.
and changed its name to TAM Restaurants, Inc. Effective September 29, 1996, the
Company acquired all of the outstanding capital stock of TAM Restaurant Group,
Inc., Bay Landing Restaurant Corp. and Shellbank Restaurant Corp. The Company
operates Lundy Bros. Restaurant, a high-volume, casual, upscale seafood
restaurant located in Brooklyn, New York, and The Boathouse in Central Park, a
multi-use facility which features an upscale restaurant and catering pavilion,
located on the lake in New York City's Central Park. The Company is also
constructing American Park at the Battery, which has been designed as a
high-volume premium-quality restaurant to be located at the water's edge in
Battery Park. In addition, the Company's restaurants offer high-quality
professional, on-premises and off-premises catering services.

Corporate restructuring

Effective September 29, 1996, the Companies completed a corporate
restructuring, whereby the concession business previously operated by TAM
Restaurant Group, Inc. was spun-off to a new corporation, American Leisure
Today, Inc. ("American Leisure "). These concessions included the Central Park
Zoo, the Staten Island Zoo, and the Wollman Ice Rink at Central Park. American
Leisure is owned by a principal stockholder who, prior to the reorganization,
was a principal stockholder of TAM Restaurant Group, Inc. In addition, the
stockholders of TAM Restaurant Group, Inc., Bay Landing Restaurant Corp. and
Shellbank Restaurant Corp. transferred all of the stock owned by them in return
for stock in the Company. This transaction has been treated in a manner similar
to a pooling of interests.

Use of estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Accounting period

The Company reports on a 52/53 week year ending on the last Sunday in
September.

The Company reports its information using a 4-4-5 week quarter which ends
on the last Sunday of the month.

Revenue recognition

Revenue is recognized at the point of sale.

Inventory

Inventory is stated at the lower of cost, first-in, first-out, or market.
Inventory consists of items used in operations and items held for resale.

Property and equipment

Property and equipment are carried at cost. Depreciation of equipment,
furniture and fixtures and amortization of leasehold improvements are provided
using the straight-line and double-declining balance methods for financial
reporting purposes at rates based on the following estimated useful lives:

Years
-----
Transportation equipment ...... 5
Furniture and fixtures ......... 5-7
Equipment ..................... 5-10
Leasehold improvements ......... Remaining life of lease

F-8
<PAGE>
TAM RESTAURANTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Note A -- Summary of Significant Accounting Policies -- (Continued)

Expenditures for major renewals and betterments that extend the useful
lives of property and equipment are capitalized. Expenditures for maintenance
and repairs are charged to expense as incurred.

Trademarks

The name Lundy Bros. (registered July 9, 1996) and the logo F.W.I.L.
(registered December 17, 1996) are registered with the United States Patent and
Technical Office. Each registration will remain in force for 10 years, subject
to the filing of a Declaration of Continuing Use between the fifth and sixth
anniversaries of the registration date. Included in other assets at September
29, 1996 and September 28, 1997 is $23,179 and $20,602 of net trademark costs,
respectively.

Barter advances

The Company has entered into various barter agreements, which it uses as a
source of financing. Under the agreements, the Company is advanced cash in
exchange to provide food and beverage to the barter companies. For every dollar
advanced, the Company must return $1.60 to $2.00 in food and beverage sales.

Contract deposits payable

Contract deposits payable are deposits received for future catering
events. Revenue is recognized when these events occur.

Income taxes

The Company accounts for its income taxes using the Financial Accounting
Standards Board ("FASB") Statement of Financial Accounting Standards ("SFAS")
No.109, "Accounting for Income Taxes" ("SFAS No. 109"), which requires the
establishment of a deferred tax asset or liability for the recognition of
future deductible or taxable amounts and operating loss carryforwards. Deferred
tax expense or benefit is recognized as a result of the changes in the assets
and liabilities during the year. Valuation allowances are established when
necessary to reduce deferred tax assets to amounts expected to be realized.

Deferred stock offering costs

Costs incurred in connection with the Company's proposed public offering
of common stock will be charged to capital in the period that the offering was
completed, or charged to operations if the offering is not successful.

Rent expense

The Company amortizes its rental space at Lundy's using the straight-line
method over the life of the lease.

Advertising expenses

Advertising expenses are charged to earnings when incurred.

Concentration of credit risk

The Company extends credit based on an evaluation of the customer's
financial condition, generally without requiring collateral. Exposure to losses
on receivables is principally dependent on each customer's financial condition.
The Company monitors its exposure for credit losses and maintains allowances
for anticipated losses. No individual customer is considered to be significant.

Net income (loss) per share

Net income (loss) per share of common stock is computed based on the
weighted average number of shares of common stock and common stock equivalents
(in 1997) outstanding during the period. Common stock and warrants issued
within twelve months of the initial public offering filing for consideration
below the proposed public offering price have been included as if they had been
outstanding for all periods presented. (See Note Q).

F-9
<PAGE>
TAM RESTAURANTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Note A -- Summary of Significant Accounting Policies -- (Continued)

Disclosure of fair value of financial instruments

The carrying amount of financial instruments including cash, accounts
receivable, accounts payable, accrued expenses and short-term debt approximated
fair value as of September 28, 1997 because of the relatively short maturity of
these instruments. The carrying value of long-term debt approximates the fair
value for similar debt issues based on quoted market prices or current rates
offered to the Company for debt of the same maturities. Due to the unspecified
payment terms, it was not practicable to estimate the fair value of amounts due
from affiliates and due from an officer. Loans due to and due from affiliates
approximate fair value because the repayment terms are subject to management's
discretion.

Stock based compensation

In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation" ("SFAS No. 123"). SFAS No. 123 encourages entities to adopt the
fair value method in place of the provisions of Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB No. 25"), for
all arrangements under which employees receive shares of stock or other equity
instruments of the employer or the employer incurs liabilities to employees in
amounts based on the price of its stock. In fiscal 1997 the Company adopted the
intrinsic value method as permitted by SFAS No. 123 and will account for such
transactions in accordance with APB No. 25 and, as required by SFAS No. 123,
will provide pro forma information regarding net income as if compensation
costs for the Company's stock system plan had been determined in accordance
with the fair value method presented by SFAS No. 123. The adoption of the
standard did not have a material effect on the consolidated financial
statements.

Long-lived assets

In fiscal 1997, the Company adopted SFAS No. 121, "Accounting for
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of."
SFAS No. 121 requires, among other things, an impairment loss on assets to be
held and gains or losses from assets that are expected to be disposed of to be
included as a component of income from continuing operations before taxes on
income. The Company's implementation of this standard did not have a material
effect on the consolidated financial statements.

Recent accounting standards

The FASB has issued SFAS No. 128, "Earnings Per Share." SFAS No. 128 is
effective for financial statements issued for periods ending after December 15,
1997. SFAS No. 128 simplifies the computation of earnings per share by
replacing the presentation of primary earnings per share with a presentation of
basic earnings per share, as defined. The statement requires dual presentation
of basic and diluted earnings per share by entities with complex capital
structures. Basic earnings per share includes no dilution and is computed by
dividing income available to common stockholders by the weighted average number
of shares outstanding for the period. Diluted earnings per share reflects the
potential dilution of securities that could share in the earnings of an entity
similar to fully diluted earnings per share. SFAS No. 128 is not expected to
have a significant impact on the Company's financial statements.

In June 1997, SFAS No. 130, "Reporting Comprehensive Income" and SFAS No.
131, "Disclosure about Segments of an Enterprise and Related Information," were
issued. SFAS No. 130 addresses standards for reporting and display of
comprehensive income and its components and SFAS No. 131 requires disclosure of
reportable operating segments. Both statements are effective for the Company's
1999 fiscal year. The Company will be reviewing these pronouncements to
determine their applicability, if any.

F-10
<PAGE>

TAM RESTAURANTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Note B -- Inventory

Inventory consisted of:
<TABLE>
<CAPTION>
September 29, September 28,
1996 1997
--------------- --------------
<S> <C> <C>
Food and beverage ........................ $ 63,480 $ 48,146
Liquor .................................... 61,645 60,171
Paper .................................... 4,353 5,114
Retail merchandise ........................ -- 9,780
Small wares, utensils, and supplies ...... 78,500 81,495
--------- ---------
$ 207,978 $ 204,706
========= =========
</TABLE>
Note C -- Prepaid and Other Expenses

Prepaid and other expenses consisted of:
<TABLE>
<CAPTION>
September 29, September 28,
1996 1997
--------------- --------------
<S> <C> <C>
Refundable rent deposit .................. $ 50,000 $ 23,850
Income taxes receivable .................. 108,723 108,723
Prepaid expenses ........................ 60,028 233,493
Other receivables ........................ 51,465 --
--------- ---------
$ 270,216 $ 366,066
========= =========
</TABLE>
Note D -- Property and Equipment

Property and equipment consisted of:
<TABLE>
<CAPTION>
September 29, September 28,
1996 1997
--------------- --------------
<S> <C> <C>
Transportation equipment and trailers ............... $ 158,406 $ 260,111
Furniture and fixtures .............................. 229,075 294,194
Equipment .......................................... 1,308,098 1,221,825
Leasehold improvements .............................. 3,146,291 3,183,590
Assets acquired under capital leases ............... 355,974 355,974
Computer software .................................... 35,469 35,469
Construction-in-progress ........................... -- 1,051,279
----------- ------------
5,233,313 6,402,442
Less accumulated depreciation and amortization ...... 1,781,717 2,111,464
----------- ------------
$ 3,451,596 $ 4,290,978
=========== ============
</TABLE>
Depreciation and amortization expense totaled $359,969 and $332,321 for
the years ended 1996 and 1997, respectively.

Construction-in-progress relates to the construction of a new restaurant
scheduled to open in March 1998 with an estimated cost of $1,700,000.

Note E -- Other Assets

Included in other assets are treasury bonds, which were purchased on
February 15, 1985 at a cost of $9,704, with a face value of $10,000. The bonds
are held in escrow by Chase Bank in lieu of a security deposit for the
Boathouse concession.

F-11
<PAGE>

TAM RESTAURANTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Note F -- Accrued Expenses

Accrued expenses consisted of:
<TABLE>
<CAPTION>
September 29, September 28,
1996 1997
--------------- --------------
<S> <C> <C>
Sales tax payable ................................. $ 477,140 $ 409,291
Accrued rent expense and related taxes ............ 353,498 329,095
Barter advances ................................. -- 683,961
Accrued payroll, payroll taxes and benefits ...... 148,651 457,625
Accrued consulting fees ........................... -- 237,250
Accrued other expenses ........................... 17,515 258,983
--------- ------------
$ 996,804 $ 2,376,205
========= ============
</TABLE>

Note G -- Borrowings

The Company's loans outstanding consisted of:
<TABLE>
<CAPTION>
September 29, September 28,
1996 1997
--------------- --------------
<S> <C> <C>
Installment loan payable to Fleet Bank in 59 monthly installments of
$1,108, plus interest at a rate of 9.56% with a balloon payment of
$67,609 due in July 1999. The loan was collateralized by property
owned by an affiliated company. (a) .................................... $ 105,290 $ --
Installment loan payable to Fleet Bank in 83 monthly installments of
$2,372, plus interest of 9.76% with a balloon payment of $230,124
due in 2001. The loan was collateralized by the Company's offices.
(a) ..................................................................... 362,956 --
Mortgage loan payable to Fleet Bank, bearing interest at the bank's
prime rate, plus 2%, which expired in 1996. Monthly installments of
interest only are due on this mortgage. The loan was secured by col-
lateral mortgage held by two principal stockholders. (a) 150,000 --
Loan to related party. (b) ............................................. 121,332 119,825
Installment loan payable in 18 equal monthly installments of $2,952 to
Central Laundry Services Corp., including interest at a rate of 6%
beginning January 10, 1996. The loan was collateralized by a secu-
rity interest in equipment with a net book value of $21,868 25,728 --
Installment loan payable in 60 monthly payments of $3,187 to Brook-
lyn Union Gas Company, including interest at a rate of 10% begin-
ning December 1, 1995. The loan is collateralized by equipment
with a net book value of $127,500 ....................................... 129,887 103,540
Unsecured loan payable to a private investor bearing interest at 21% ..... 40,000 --
Unsecured loans from private investors bearing interest at rates from
8% to 15% per annum, maturing at various times through 2002 ............ 286,669 791,800
Unsecured loan payable from Chief Executive Officer bearing interest
of 10%, due in 2002 ................................................... -- 720,405
Unsecured loan payable from related parties, bearing interest of 10%
to 15%, due June 1998 ................................................... 236,000 143,000
Installment loan payable in 12 monthly payments of $8,792 to Central
Laundry Services Corp., including interest at a rate of 10% begin-
ning September 5, 1997 -- 100,000
Other .................................................................. -- 26,023
----------- ------------
1,457,862 2,004,593
Less portion due within one year ....................................... 283,938 495,650
----------- ------------
Long-term debt ......................................................... $ 1,173,924 $ 1,508,943
=========== ============
</TABLE>

F-12
<PAGE>

TAM RESTAURANTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Note G -- Borrowings -- (Continued)

Maturities of long-term debt at September 28, 1997 are as follows:

1998 ........................ $ 495,650
1999 ........................ 497,341
2000 ........................ 51,644
2001 ........................ 23,229
2002 ........................ 98,269
Thereafter .................. 838,460
-----------
$ 2,004,593
===========

(a) The Company had a credit line with Fleet Bank, bearing interest at the
bank's prime rate plus 2%, which expired in December 1996. The loan was
collateralized by a security interest in all Company assets. (See Note Q.)

(b) This loan is secured by the personal residence of a shareholder. The
Company has agreed to make the mortgage payments to the bank. The mortgage
bears interest at 7.25% and is payable in 360 monthly installments of $853,
including interest and is due in 2024.

Note H -- Capital Lease Obligations

The Company leases equipment and various leasehold improvements under
capital leases. The assets acquired under capital leases have a cost of
$355,974 and $355,974 and accumulated amortization of $51,168 and $89,618 as of
September 1996 and 1997, respectively. Amortization of the leased assets is
included in depreciation expense.

The following is a schedule, by year, of future minimum lease payments
under capitalized leases, together with the present value of the net minimum
lease payments at September 28, 1997.

Payments for the year ending:
September, 1998 ................................. $ 115,557
September, 1999 ................................. 100,231
September, 2000 ................................. 59,395
September, 2001 ................................. 2,362
---------
Total minimum lease payments ..................... 277,545
Less amount representing interest ............... (62,708)
---------
Present value of net minimum lease payments ...... 214,837
Less current portion .............................. (79,245)
---------
Long-term lease obligation ........................ $ 135,592
=========

Note I -- Commitments and Contingencies

The Company has entered into various lease and licensing agreements, which
expire through 2016.

Certain of the Company's license and lease agreements require the payment
of rent based on a percentage of gross receipts. Future minimum rental payments
are as follows:

Year Ending September
---------------------
1998 ........................ $ 512,704
1999 ........................ 525,586
2000 ........................ 511,573
2001 ........................ 453,219
2002 ........................ 408,042
Thereafter .................. 6,050,881
-----------
$ 8,462,005
===========

F-13
<PAGE>

TAM RESTAURANTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Note I -- Commitments and Contingencies -- (Continued)

Rent expense, real estate taxes and common area charges for the years
ended September 29, 1996 and September 28, 1997 totaled $944,828 and
$1,428,079, respectively. TAM Restaurant Group, Inc. has a license agreement
with the Central Park Zoo. American Leisure has assumed the operation of the
concession granted by such license agreement as a result of a restructuring
(See Note A also). However, TAM Restaurant Group, Inc. is still responsible as
a primary concessionaire until October 1998 when the license expires. The
license requires payment of 39% of total sales as a licensing fee. Sales for
the year ended September 28, 1997 relating to this license amounted to
$920,248.

TAM Restaurant Group, Inc. is currently being audited by New York State
for sales and use taxes for the period December 1, 1989 to June 28, 1993. The
Company has accrued $50,000 for additional taxes that may be due, exclusive of
interest and penalties, if any. As of December 1997, this audit has not been
completed.

Note J -- Related Party Transactions

In April 1988, Perfect Parties, the catering division of TAM Restaurant
Group, Inc., was transferred to Forest Avenue Corporation, which is owned by
stockholders of the Company. Forest Avenue Corporation utilized equipment of
the Company at no charge. Forest Avenue Corporation also received management
services from the Company. On September 3, 1996, the assets of Forest Avenue
Corporation were sold to an unrelated third party. As a result, the Company
wrote off $558,943 representing monies advanced, as well as unpaid management
fees and equipment notes to Forest Avenue Corporation, which are uncollectible.

In March 1994, Leisure Time Services, Inc., which is owned by a
stockholder of the Company, was formed to purchase, repair and store equipment
and supplies for the Company, as well as to assist the Company in the
performance of special catering events. Rent paid by the Company for the years
ended 1996 and 1997 for utilization of a warehouse was $28,300 and $30,000,
respectively. All the income and expenses for other operations of Leisure Time
Services, Inc. are absorbed by the Company and reflected in the accompanying
financial statements. In late 1994, the Company obtained long-term financing
from Fleet Bank (see Note G). The borrowings are collateralized by a warehouse
located in New Jersey and owned by Leisure Time Services, Inc. In order to
provide the bank with the proper title, some of the funds borrowed were used to
pay off the mortgages and other related costs on the collateralized property.
As of September 29, 1996 and September 28, 1997, included in the accompanying
consolidated balance sheets under the caption "due from affiliates" is $177,438
and $145,045, respectively, which was used to secure the title on the New
Jersey warehouse. This loan is being repaid in equal monthly installments of
$1,996, including interest at 9.6% through December 2006. Additionally,
included in due from affiliates is $24,155 of additional amounts due from
Leisure Time Services, Inc. with no specific repayment term.

In obtaining long-term financing from Fleet Bank, the Company's
headquarters located in Staten Island, NY (owned by the Company's stockholder)
were used to collateralize the debt and to provide the bank with proper title.
In October 1996, the Company entered into a lease for its corporate offices
with its principal stockholders.

Additionally, the Company occasionally advanced monies to officers of the
Company. No terms of repayment or interest rates have been determined on these
advances. As of September 29, 1996 and September 28, 1997, the balance in this
account was $53,602 and $46,459, respectively.

The Company is indebted to relatives of the principal stockholder in the
amounts of $236,000 and $55,000 as of September 29, 1996 and September 28,
1997, respectively. The notes are unsecured and bare interest from 10% to 15%
per annum.

For the years ended 1996 and 1997, the Company has reduced operating
expenses by $71,670 and $181,012, respectively, representing management fee
income from American Leisure. At September 28, 1997, included in due from
affiliates is $46,184 due from American Leisure with no specific repayment term
(See Note M).

F-14
<PAGE>

TAM RESTAURANTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note K -- Capital Stock and Warrants

During fiscal 1996, the Company issued 173,881 shares and granted 55,141
warrants with an original exercise price of $5.44 per share and 3,000 warrants
with an original exercise price of $.01 per share for services received. In
addition, the Company issued 4,724 warrants with an original exercise price of
$4.53 per share to an officer of the Company for prior compensation.

Additionally, during fiscal 1996, the Company sold units consisting of
.5514 shares of common stock and .05514 warrants for $2.00 per unit and .5514
share of common stock and .11028 warrants for $2.27 per unit. The warrants had
an original exercise price of $4.53 per share. The Company sold 925,050 units.
In fiscal 1996, $235,000 of debt was converted into .59602 common shares and
.21529 warrants exercised at $4.53.

For the year ended September 29, 1996, the Company issued 22,056 shares of
common stock and .5514 warrants as part of a settlement, resulting in a
non-recurring charge of $80,000.

At September 28, 1997, there was an aggregate of 313,000 warrants
outstanding, 254,859 with an exercise price of $4.53 per share, 55,141 with an
exercise price of $5.44 per share and 3,000 with an exercise price of $.01 per
share. These warrants expire through 2001.

The Board of Directors is authorized to fix the rights, preferences,
privileges and restrictions of any series of preferred stock, including the
dividend rights, original issue price, conversion rights, voting rights, terms
of redemption, liquidation preferences and sinking fund terms thereof, and the
number of shares constituting any such series and the designation thereof and
to increase or decrease the number of shares subsequent to the issuance of
shares of such series (but not below the number of shares of such series then
outstanding).

Note L -- Income Taxes

Income tax benefit has been calculated as follows:

Year Ended Year Ended
September 29, September 28,
1996 1997
--------------- --------------
Federal taxes ............... $ 49,390 $ --
State and local taxes ...... 49,198 --
-------- ----------
$ 98,588 $ --
======== ==========

The Company's deferred tax assets, deferred tax liabilities and deferred
tax asset valuation allowance are as follows:
<TABLE>
<CAPTION>
September 29, September 28,
1996 1997
--------------- --------------
<S> <C> <C>
Deferred rent expense ........................... $ 50,593 $ 106,000
Deferred expenses .............................. 80,665 112,000
Net operating loss carryforward .................. 808,779 679,000
Depreciation .................................... 19,386 8,000
Vacation pay and officers' payroll accrual ...... 13,017 17,000
Other .......................................... -- 2,000
---------- ----------
Total deferred tax assets ........................ 972,440 924,000
Less valuation allowance ........................ (972,440) (924,000)
---------- ----------
Total deferred tax liabilities .................. -- --
---------- ----------
Net deferred tax asset ........................... $ -- $ --
========== ==========
</TABLE>

F-15
<PAGE>

TAM RESTAURANTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Note L -- Income Taxes -- (Continued)

The tax benefit from a net operating loss carryback resulted in an income
tax receivable of $108,723 at September 29, 1996 and September 28, 1997.

For tax purposes, the Company has approximately $1,438,000 of net
operating loss carryforwards as of September 28, 1997, which expire through
2011.

The difference between the amount of income tax expense that would result
from applying the federal statutory rate of 34% to pre-tax income and the
provision for federal income taxes is as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
September 29, September 28,
1996 1997
--------------- --------------
<S> <C> <C>
Income tax (benefit) at statutory rate .................................... $ (1,009,597) $ 89,005
Reduction in valuation allowance relating to tax benefit due to net
operating loss limitation ................................................ 911,009 --
Reduction of valuation allowance due to utilization of net operating loss . -- (89,005)
------------ ---------
Net Tax (Benefit) ......................................................... $ (98,588) $ --
============ =========
</TABLE>
Note M -- Discontinued Operations

As a result of a corporate restructuring (see Note A also), the concession
business previously operated by TAM Restaurant Group, Inc. was spun off to a
new corporation. The following is a summary of the financial information of the
concessions as of September 29, 1996:

Assets .................. $ 90,239
Liabilities ............ (88,529)
------------
Difference ........... $ 1,710
============
Sales .................. $ 1,433,409
Purchases ............... 309,289
------------
Gross Profit ........ 1,124,120
Operating Expenses ...... (1,073,885)
------------
Operating Income ......... 50,235
Income Taxes ............ (20,093)
------------
Net Income ............... $ 30,142
============

The operations at Wollman Rink terminated in February 1996. The operations
at the Central Park Zoo and Staten Island Zoo are still being operated by
American Leisure. Operating expenses included above reflect a 5% (of sales)
management fee charged to each location from the Company.

As a result of the transfer of assets and liabilities, additional paid-in
capital of the Company was reduced by $1,710.

Note N -- Going Concern

As shown in the accompanying financial statements, the Company incurred a
net loss of $2,840,673 during the year ended September 29, 1996 and, as of that
date, the Company's current liabilities exceeded its current assets by
$1,969,787. These factors raised doubt as to the Company's ability to continue
as a going concern. The ability of the Company to continue as a going concern
was dependent upon the success of an initial public offering, the ability of
the Company to obtain debt financing from a bank or private lenders, or raising
additional capital through a private placement offering. The financial
statements did not include any adjustments that might be necessary should the
Company be unable to continue as a going concern.

These doubts did not apply to the 1997 Financial Statements.

F-16
<PAGE>

TAM RESTAURANTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Note O -- Pending Litigation

TAM Restaurant Group, Inc. and Bay Landing Restaurant Corp. have been
named as defendants and/or co-defendants in four separate personal injury
lawsuits arising in the ordinary course of business. These cases are in the
preliminary stages and, as such, the ultimate outcome of the litigation cannot
presently be determined. In the opinion of management, all such matters are
adequately covered by insurance or, if not so covered, are entirely without
merit or are such kind or involve such amounts that an unfavorable disposition
would not have a material adverse effect on the consolidated financial position
or operations of the Company. Accordingly, no provision for any liability that
may result upon adjudication has been made in the accompanying financial
statements by the Company.

Note P -- Cash Flow Disclosure

Cash paid for interest is as follows:

Year Ended Year Ended
September 29, 1996 September 28, 1997
-------------------- -------------------
Interest ...... $ 312,366 $ 302,372

Non-cash transactions included the following:

Effective September 29, 1996, the Company exchanged debt in the amount of
$235,000 to 59,602 shares of Common Stock and Warrants to purchase 21,530
shares of Common Stock.

For the year ended September 28, 1997, the Company purchased equipment of
$36,023 for cash of $10,000 and debt of $26,023. Additionally, the Company
entered into a capitalized lease obligation of $27,824.

Note Q -- Subsequent Events

In December 1997, the Company effected a 1-for-1.8135268 reverse stock
split. All shares and per share data in the consolidated financial statements
have been adjusted to give retroactive effect to the reverse stock split.

In addition, effective as of the date of the initial public offering, the
Company will enter into three-year employment agreements with the Chief
Executive Officer and a Vice President, which are contractually renewable and
provide for an annual base compensation of $175,000 and $75,000, respectively,
and such bonuses as the Board of Directors may from time to time determine.

Also, effective as of the date of the initial public offering, the Company
will initiate a stock option plan (the "Option Plan") pursuant to which 525,000
shares of common stock have been reserved for issuance upon the exercise of
options designated as either (i) options intended to constitute incentive stock
options ("ISOs") under the Internal Revenue Code of 1986, as amended (the
"Code") or (ii) non-qualified options. ISOs may be granted under the Option
Plan to officers and employees of the Company. Non-qualified options may be
granted to consultants, directors (whether or not they are employees),
employees or officers of the Company.

During 1995 and 1996, the Company borrowed an aggregate of $840,000 from
Fleet Bank. Such loans were collateralized by the Company's principal executive
offices, which are owned by Mr. Cretella, the warehouse leased by the Company
and owned by Leisure Time Services, Inc., a company owned by Jeanne Cretella,
Vice President, Director and a principal stockholder of the Company, and Mr.
and Mrs. Cretella's personal residence. In June 1997, Mr. Cretella agreed to
settle the amounts owed to Fleet Bank of $720,405 for $640,000 plus accrued
interest through the date of payment. In August 1997, Mr. Cretella paid to
Fleet Bank $140,000 as part of the settlement, and the balance was paid in
October, 1997. As consideration for entering into the settlement, the Company
has issued to Mr. Cretella a promissory note in the principal amount of
$720,405, which bears interest at a rate of 10% per annum. Interest is payable
in monthly installments of $6,003, with the principal payable in November,
2002. The consolidated financial statements reflect the effects of this
refinancing.

F-17
<PAGE>

TAM RESTAURANTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

Note Q -- Subsequent Events -- (Continued)

In October, 1997, the Company obtained $1,000,000 in a secured loan from
an outside investment firm. The loan bears interest at 10% per annum, payable
quarterly and matures nineteen months after the funding date (May 31, 1999), if
the Company's initial public offering becomes effective prior to April 15,
1998; otherwise, the interest rate increases to 15% per annum and the Company
would be required to pay 50% of the operating profits, as defined, from
American Park on a monthly basis until the loan is fully repaid. The loan is
guaranteed by a principal stockholder of the Company and the guarantee is
secured by a pledge of 200,000 shares of common stock held by such stockholder.

Additionally, as partial consideration for the loan, the Company granted
200,000 warrants at an exercise price of $5.00 per share expiring in October
2002. The warrants are exercisable 90 days after an initial public offering.
The issuance of these warrants will give rise to an original issue discount
which has been valued at $482,000, based on the Black-Scholes option pricing
model, and will be amortized beginning on the date the warrants are exercisable
and ending on the due date of the loan.

F-18

<PAGE>
===============================================================================
No dealer, salesperson or other person has been authorized to give any
information or to make any representations not contained in this Prospectus,
and, if given or made, such information or representation must not be relied
upon as having been authorized by the Company or the Underwriter. This
Prospectus does not constitute an offer to sell, or a solicitation of an offer
to buy, any security other than the securities offered by this Prospectus, or
an offer to sell or a solicitation of an offer to buy any securities by anyone
in any jurisdiction in which such offer or solicitation is not authorized or is
unlawful. The delivery of this Prospectus shall not, under any circumstances,
create any implication that the information contained herein is correct as of
any time subsequent to the date hereof.

-----------------------------------

TABLE OF CONTENTS

Page
---------
Prospectus Summary. .................. 3
Risk Factors. ........................ 8
Use of Proceeds. ..................... 17
Dilution .............................. 18
Dividend Policy. ..................... 19
Capitalization ........................ 19
Selected Financial Data ............... 20
Management's Discussion and Analysis of
Financial Condition and Results of
Operations. ........................ 21
Business. .............................. 24
Management. ........................... 32
Principal Stockholders. ............... 35
Certain Transactions. .................. 36
Description of Securities ............ 38
Shares Eligible for Future Sale ...... 40
Underwriting. ........................ 41
Selling Securityholders and Plan of
Distribution. ..................... 43
Legal Matters ........................ 44
Experts .............................. 44
Changes in Independent Auditors. ...... 45
Additional Information. ............... 45
Index to Financial Statements ......... F-1

-----------------------------------

Until , 1998, (25 days after the date of this Prospectus), all dealers
effecting transac-tions in the shares of Common Stock or Warrants offered
hereby, whether or not participating in this distribution may be required to
deliver a Prospectus. This is in addition to the obligation of dealers to
deliver a Prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.

===============================================================================
<PAGE>
===============================================================================

TAM Restaurants, Inc.

[GRAPHIC OMITTED]

1,000,000 Shares of Common Stock
and
Redeemable Warrants to Purchase
500,000 Shares of Common Stock

-------------
PROSPECTUS
-------------

[GRAPHIC OMITTED]

, 1998

===============================================================================
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification of Directors and Officers.

Section 145 of the General Corporation Law of the State of Delaware
provides for the indemnification of officers and directors under certain
circumstances against expenses incurred in successfully defending against a
claim and authorizes Delaware corporations to indemnify their officers and
directors under certain circumstances against expenses and liabilities incurred
in legal proceedings involving such persons because of their being or having
been an officer or director.

Section 102(b) of the Delaware General Corporation Law permits a
corporation, by so providing in is certificate of incorporation, to eliminate or
limit director's liability to the corporation and its stockholders for monetary
damages arising out of certain alleged breaches of their fiduciary duty. Section
102(b)(7) provides that no such limitation of liability may affect a director's
liability with respect to any of the following: (i) breaches of the director's
duty of loyalty to the corporation or its stockholders; (ii) acts or omissions
not made in good faith or which involve intentional misconduct of knowing
violations of law; (iii) liability for dividends paid or stock repurchased or
redeemed in violation of the Delaware General Corporation law; or (iv) any
transaction from which the director derived an improper personal benefit.
Section 102(b)(7) does not authorize any limitation on the ability of the
corporation or its stockholders to obtain injunction relief, specific
performance or other equitable relief against directors.

Article Eighth of the Registrant's Certificate of Incorporation and the
Registrant's By-laws provide that all persons who the Registrant is empowered to
indemnify pursuant to the provisions of Section 145 of the General Corporation
Law of the State of Delaware (or any similar provision or provisions of
applicable law at the time in effect), shall be indemnified by the Registrant to
the full extent permitted thereby. The foregoing right of indemnification shall
not be deemed to be exclusive of any other rights to which those seeking
indemnification may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors, or otherwise.

Article Ninth of the Registrant's Certificate of Incorporation provides
that no director of the Registrant shall be personally liable to the Registrant
or its stockholders for any monetary damages for breaches of fiduciary duty of
loyalty to the Registrant or its stockholders' (ii) for acts or omission not in
good faith or which involve intentional misconduct or knowing-violation of law;
(iii) under Section 174 of the General Corporation Law of the State of Delaware;
or (iv) for any transaction from which the director derived an improper personal
benefit.

Insofar as indemnification for liabilities under the Securities Act of
1933, as amended (the "Securities Act") may be permitted to directors, officers
or persons controlling the Registrant pursuant to the foregoing provisions, the
Registrant has been informed that in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.

Reference is made to the Underwriting Agreement, the proposed form of which
is filed as Exhibit 1.1, pursuant to which the Underwriter agree to indemnify
the directors and certain officers of the Registrant and certain other persons
against certain civil liabilities.

II-1
<PAGE>

Item 25. Other Expenses of Issuance and Distribution.

The estimated expenses payable by the Registrant in connection with the
issuance and distribution of the securities being registered (other than
underwriting discounts and commissions and the Underwriter's nonaccountable
expense allowance) are as follows:

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee ......... $ 3,378.33
NASD filing fee ............................................. 1,614.85
Nasdaq listing fee .......................................... 10,000.00
Underwriter's consulting fee ................................. 60,000.00
Printing and engraving expenses .............................. 75,000.00
Legal fees and expenses .................................... 175,000.00
Accounting fees and expenses ................................. 100,000.00
Blue sky fees and expenses (including legal fees) ............ 30,000.00
Transfer agent, warrant agent and registrar fees and expenses 3,000.00
Miscellaneous ................................................ 35,506.82
-----------
Total ................................................... $493,500.00
===========
</TABLE>

- ------------
* To be filed by amendment.

Item 26. Recent Sales of Unregistered Securities

Since October 1995, the Registrant has issued securities without
registration under the Securities Act in the following transactions (in each
case giving retroactive effect to the subsequent stock splits):

1. From October 1995 to September 1996, the Registrant issued an aggregate
of 510,084 shares of Common Stock and warrants to purchase 181,600 shares of
Common Stock to 31 investors for aggregate proceeds of $1,980,000.

2. In July 1996, the Registrant issued an aggregate of 173,881 shares of
Common Stock and warrants to purchase 3,000 shares of Common Stock to 7 persons
and entities as consideration for services, valued at $480,957 in the aggregate,
rendered to the Registrant.

3. In September 1996, the Registrant issued 22,056 shares of Common Stock
and warrants to purchase 5,514 shares of Common Stock to four persons as
settlement of a dispute, valued at $80,000.

4. In February 1997, the Registrant issued 55,141 shares of Common Stock
and warrants to purchase 27,571 shares of Common Stock to one investor for
$200,000.

5. During 1997, the Registrant issued 59,602 shares of Common Stock and
warrants to purchase 21,530 shares of Common Stock to three persons upon the
conversion of $235,000 of indebtedness.

6. In October 1997, the Registrant issued warrants to purchase 4,724 shares
of Common stock to an officer and director as compensation.

7. In October 1997, the Registrant issued warrants to purchase 200,000
shares of Common Stock to three entities as partial consideration for making
loans to the Registrant. The Company valued the warrants at $482,000.

The sales and issuances of the Common Stock and warrants described above
were deemed to be exempt from registration under the Securities Act in reliance
upon Section 4(2) thereof as transactions not involving a public offering. The
purchasers in such private offerings represented they had such knowledge and
experience in financial and business matters, at all relevant times they were
capable of evaluating the merits and risks involved in the investment in the
securities and their intention to acquire the securities for investment only and
not with a view to the distribution thereof. Appropriate legends were affixed to
the stock certificates issued in such transactions. All purchasers had adequate
access, through their employment or other relationships, to sufficient
information about the Registrant to make an informed investment decision.

II-2
<PAGE>

Item 27. Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Description
- ---------- -----------
<S> <C>
*1.1 Form of Underwriting Agreement.
3.1 Certificate of Incorporation, as amended, of the Registrant.
3.2 Bylaws, as amended, of the Registrant.
4.1 Form of Registrant's Common Stock Certificate.
*4.2 Form of Underwriter's Warrant Agreement, including Form of Warrant Certificate.
*4.3 Form of Public Warrant Agreement among the Registrant, Paragon Capital Corporation, as
Underwriter and Continental Stock Transfer & Trust Company, as Warrant Agent.
4.4 Form of Registrant's Public Warrant Certificate.
5.1 Opinion of Tenzer Greenblatt LLP.
*10.1 License Agreement between TAM Restaurant Group, Inc. (formerly TAM Concessions, Inc.) and
City of New York Department of Parks and Recreation, dated February 8, 1995, as modified.
*10.2 License Agreement between Shellbank Restaurant Corp. and City of New York Parks and Recreation
dated December 14, 1994.
*10.3 Lease by and between Lundy's Management Corp. and Bay Landing Restaurant Corp. dated July 24,
1994, as amended.
*10.4 Lease by and between Mr. Frank Cretella and the Registrant dated October 1, 1996.
*10.5 Lease by and between Leasing Time Services and the Registrant dated October 1, 1996.
*10.6 Management Agreement by and between the Registrant and American Leisure Today, Inc., formerly
MAT Operating Corp., dated October 1, 1996.
*10.7 Loan Agreement by and between the Registrant and each of ARBCO Associates, L.P. and Kayne,
Anderson Non-Traditional Investments, L.P. dated as of October 31, 1997.
10.8 Form of Employment Agreement between Registrant and Frank Cretella.
10.9 Form of Employment Agreement between Registrant and Jeanne Cretella.
10.10 1997 Stock Option Plan.
10.11 Promissory Note of the Registrant dated October 15, 1997 issued to Frank Cretella.
23.1.1 Consent of BDO Seidman, LLP, Independent Certified Public Accountants.
23.1.2 Consent of Maltese, Potter & LaMarca, LLP, Independent Certified Public Accountants.
23.2 Consent of Tenzer Greenblatt LLP (will be contained in such firm's opinion filed as Exhibit 5.1).
23.3 Consent of Peter J. Salvatore.
23.4 Consent of Barry E. Krantz.
23.5 Consent of Lorenzo T. Vanore.
*24.1 A power of attorney relating to the signing of amendments hereto is
incorporated in the signature pages of this Registration Statement.
27.1 Financial Data Schedule.
</TABLE>
- ------------
* Previously filed.

Item 28. Undertakings.

The undersigned Registrant hereby undertakes to:

(1) file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:

(i) include any prospectus required by section 10(a)(3) of the
Securities Act;

(ii) reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information set forth in the
Registration Statement;

(iii) include any additional or changed material information on the plan
of distribution;

(2) for determining liability under the Securities Act, treat each such
post-effective amendment as a new registration of the securities offered, and
the offering of such securities at that time to be initial bona fide offering;
and

(3) file a post-effective amendment to remove from registration any of the
securities that remain unsold at the termination of the offering.

II-3
<PAGE>

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

The undersigned Registrant hereby undertakes (1) to provide to the
underwriters at the closing specified in the standby under writing agreement
certificates in such denominations and registered in such names as required by
the underwriters to permit prompt delivery to each purchaser; (2) that for the
purpose of determining any liability under the Securities Act, treat the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act as part of this Registration Statement as of the time
the Securities and Exchange Commission declares it effective; and (3) that for
the purpose of determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of Prospectus as a new
Registration Statement for the securities offered in the Registration Statement
therein, and treat the offering of the securities at that time as the initial
bona fide offering of those securities.

The undersigned Registrant hereby undertakes to (i) file a supplement to
the Prospectus included in this Registration Statement in accordance with Rule
424(c) under the Securities Act in the event that the Underwriter enters into
transactions with, or waives the lock-up agreements entered into by, any of the
Selling Securityholders which currently beneficially own 5% or more of the
Common Stock but less than 10% of the Common Stock; and (ii) file a
post-effective amendment to this Registration Statement in the event that the
Underwriter enters into transactions with, or waives the lock-up agreements
entered into by, any of the Selling Securityholders which currently beneficially
own 10% or more of the Common Stock.

II-4
<PAGE>

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this Registration
Statement to be signed on its behalf by the undersigned, in the city of New
York, State of New York on January 13, 1998.

TAM RESTAURANTS, INC.

By: /s/ Frank Cretella
--------------------------
President and
Chief Executive Officer

In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates stated.
<TABLE>
<CAPTION>
Signatures Title(s) Date
---------- -------- ----
<S> <C> <C>
/s/ Frank Cretella President, Chief Executive Officer January 13, 1998
- --------------------------------------- and Director (Principal Financial
Frank Cretella Officer)

* Vice President and Director
- ---------------------------------------
Jeanne Cretella

* Chairman of the Board
- ---------------------------------------
Kenneth L. Harris

/s/ Frank Cretella January 13, 1998
- ---------------------------------------
Attorney-in Fact
</TABLE>

* By Attorney-in-Fact

II-5
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
3.1 Certificate of Incorporation, as amended, of the Registrant.
3.2 Bylaws, as amended, of the Registrant.
4.1 Form of Registrant's Common Stock Certificate.
4.4 Form of Registrant's Public Warrant Certificate.
5.1 Opinion of Tenzer Greenblatt LLP.
10.8 Form of Employment Agreement between Registrant and Frank Cretella.
10.9 Form of Employment Agreement between Registrant and Jeanne Cretella.
10.10 1997 Stock Option Plan.
10.11 Promissory Note of the Registrant dated October 15, 1997 issued to
Frank Cretella.
23.1.1 Consent of BDO Seidman, LLP, Independent Certified Public Accountants.
23.1.2 Consent of Maltese, Potter & LaMarca LLP, Independent Certified Public
Accountants.
23.2 Consent of Tenzer Greenblatt LLP (will be contained in such firm's
opinion filed as Exhibit 5.1).
23.3 Consent of Peter J. Salvatore.
23.4 Consent of Barry E. Krantz.
23.5 Consent of Lorenzo T. Vanore.
27.1 Financial Data Schedule.
</TABLE>

<PAGE>

RESTATED CERTIFICATE OF INCORPORATION
OF
TAM RESTAURANT HOLDING CORP.

The original Certificate of Incorporation of TAM RESTAURANT
HOLDING CORP. was filed by the Secretary of State on July 24, 1996.

The Certificate of Incorporation is hereby amended by striking
out the whole of the Certificate of Incorporation as it now exists and replacing
it in its entirety with the following:

"FIRST: The name of the Corporation is:
TAM RESTAURANTS, INC.

SECOND: The address of the Corporation's registered office in
the State of Delaware is 1013 Centre Road, in the City of Wilmington, County of
New Castle, 19805-1297. The name of its registered agent at such address is
Corporation Service Company.

THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be organized under the laws
of the General Corporation Law of the State of Delaware.

FOURTH: The total number of shares of capital stock which the
Corporation shall have authority to issue is Twenty Million (20,000,000) shares,
of which Nineteen Million (19,000,000) shares shall be Common Stock, par value
$.0001 per share, and One Million (1,000,000) shares shall be Preferred
Stock, par value $.0001 per share.

The Preferred Stock may be issued from time to time in one or
more series. The Board of Directors of the Corporation is hereby expressly
authorized to provide, by resolution or resolutions duly adopted by it prior to
issuance, for the creation of each such series and to fix the designation and
the powers, preferences, rights, qualifications, limitations and restrictions
relating to the shares of each such series. The authority of the Board of
Directors with respect to each series of Preferred Stock shall include, but not
be limited to, determining the following:

(a) the designation of such series, the number of shares to
constitute such series and the stated value if different from the par
value thereof;

(b) whether the shares of such series shall have voting
rights, in addition to any voting rights provided by law, and, if so,
the terms of such voting rights, which may be general or limited;

<PAGE>

(c) the dividends, if any, payable on such series, whether any
such dividends shall be cumulative, and, if so, from what dates, the
conditions and dates upon which such dividends shall be payable, and
the preference or relation which such dividends shall bear to the
dividends payable on any shares of stock of any other class or any
other series of Preferred Stock;

(d) whether the shares of such series shall be subject to
redemption by the Corporation, and, if so, the times, prices and other
conditions of such redemption;

(e) the amount or amounts payable upon shares of such series
upon, and the rights of the holders of such series in, the voluntary or
involuntary liquidation, dissolution or winding up, or upon any
distribution of the assets, of the Corporation;

(f) whether the shares of such series shall be subject to the
operation of a retirement or sinking fund and, if so, the extent to and
manner in which any such retirement or sinking fund shall be applied to
the purchase or redemption of the shares of such series for retirement
or other corporate purposes and the terms and provisions relating to
the operation thereof;

(g) whether the shares of such series shall be convertible
into, or exchangeable for, shares of stock of any other class or any
other series of Preferred Stock or any other securities and, if so, the
price or prices or the rate or rates of conversion or exchange and the
method, if any, of adjusting the same, and any other terms and
conditions of conversion or exchange;

(h) the limitations and restrictions, if any, to be effective
while any shares of such series are outstanding upon the payment of
dividends or the making of other distributions on, and upon the
purchase, redemption or other acquisition by the Corporation of, the
Common Stock or shares of stock of any other class or any other series
of Preferred Stock;

(i) the conditions or restrictions, if any, upon the creation
of indebtedness of the Corporation or upon the issue of any additional
stock, including additional shares of such series or of any other
series of Preferred Stock or of any other class; and

(j) any other powers, preferences and relative, participating,
optional and other special rights, and any qualifications, limitations
and restrictions, thereof.

-2-

<PAGE>

The powers, preferences and relative, participating, optional
and other special rights of each series of Preferred Stock, and the
qualifications, limitations or restrictions thereof, if any, may differ from
those of any and all other series at any time outstanding. All shares of any one
series of Preferred Stock shall be identical in all respects with all other
shares of such series, except that shares of any one series issued at different
times may differ as to the dates from which dividends thereof shall be
cumulative.

FIFTH: Unless required by law or determined by the chairman of
the meeting to be advisable, the vote by stockholders on any matter, including
the election of directors, need not be by written ballot.

SIXTH: The Corporation reserves the right to increase or
decrease its authorized capital stock, or any class or series thereof, and to
reclassify the same, and to amend, alter, change or repeal any provision
contained in the Certificate of Incorporation under which the Corporation is
organized or in any amendment thereto, in the manner now or hereafter prescribed
by law, and all rights conferred upon stockholders in said Certificate of
Incorporation or any amendment thereto are granted subject to the aforementioned
reservation.

SEVENTH: The Board of Directors shall have the power at any
time, and from time to time, to adopt, amend and repeal any and all By-laws of
the Corporation.

EIGHTH: 1. Indemnification

The Corporation shall, and does hereby, indemnify to the
fullest extent permitted or authorized by the Delaware General Corporation Law
or judicial or administrative decisions, as the same exists or may hereafter be
amended or interpreted differently in the future (but, in the case of any such
amendment or interpretation, only to the extent that such amendment or
interpretation permits the Corporation to provide broader indemnification rights
than permitted prior thereto), each person (including the current and future
heirs, beneficiaries, personal representatives and estate of such person) who
was or is a party, or is threatened to be made a party, or was or is a witness,
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "Proceeding") and whether
the basis of such Proceeding is an allegation of an action in an official
capacity of such person related to the Corporation or any other capacity while
such person is serving as an officer, director, employee or agent of the
Corporation, against any liability (which for purposes of this Article shall
include any judgment, settlement, penalty or fine) or cost, charge or expense
(including attorneys' fees) asserted against him or incurred by him by reason of
the fact that such indemnified person (1) is or was a director, officer or

-3-

<PAGE>

employee of the Corporation or (2) is or was an agent of the Corporation as to
whom the Corporation, by action of its Board of Directors, has agreed to grant
such indemnity or (3) is or was serving, at the request of the Corporation, as a
director, officer or employee of another corporation, partnership, joint
venture, trust or other enterprise (including serving as a fiduciary of any
employee benefit plan) or (4) is or was serving as an agent of such other
corporation, partnership, joint venture, trust or other enterprise described in
clause (3) hereof as to whom the Corporation, by action of its Board of
Directors, has agreed to grant such indemnity. Each director, officer, employee
or agent of the Corporation to whom indemnification rights under this Section 1
of this Article have been granted shall be referred to as an "Indemnified
Person."

Notwithstanding the foregoing, except as specified in Section
3 of this Article, the Corporation shall not be required to indemnify an
Indemnified Person in connection with a Proceeding (or any part thereof)
initiated by such Indemnified Person unless such authorization for such
Proceeding (or any part thereof) was not denied by the Board of Directors of the
Corporation prior to sixty (60) days after receipt of notice thereof from such
Indemnified Person stating his intent to initiate such Proceeding and only upon
such terms and conditions as the Board of Directors may deem appropriate.

2. Advance of Costs, Charges and Expenses

Costs, charges and expenses (including attorneys' fees)
incurred by an officer, director, employee or agent who is an Indemnified Person
in defending a Proceeding shall be paid by the Corporation to the fullest extent
permitted or authorized by the Delaware General Corporation Law or judicial or
administrative decisions, as the same exists or may hereafter be amended or
interpreted differently in the future (but, in the case of any such future
amendment or interpretation, only to the extent that such amendment or
interpretation permits the Corporation to provide broader rights to advance
costs, charges and expenses than permitted prior thereto), in advance of the
final disposition of such Proceeding, upon receipt of an undertaking by or on
behalf of the Indemnified Person to repay all amounts so advanced in the event
that it shall ultimately be determined by final judicial decision that such
person is not entitled to be indemnified by the Corporation as authorized in
this Article and upon such other terms and conditions, in the case of an agent
as to whom the Corporation has agreed to grant such indemnity, as the Board of
Directors may deem appropriate. The Corporation may, upon approval of the
Indemnified Person, authorize the Corporation's counsel to represent such person
in any Proceeding, whether or not the Corporation is a party to such Proceeding.
Such authorization may be made by the Board of Directors by majority vote,
including directors who are parties to such Proceeding.

-4-

<PAGE>

3. Procedure for Indemnification

Any indemnification or advance under this Article shall be
made promptly and in any event within sixty (60) days upon the written request
of the Indemnified Person (except in the case of a claim for an advancement of
costs, charges or expenses, in which case the applicable period shall be twenty
(20) days). The right to indemnification or advances as granted by this Article
shall be enforceable by the Indemnified Person in any court of competent
jurisdiction if the Corporation denies such request under this Article, in whole
or in part, or if no disposition thereof is made within sixty (60) days or
twenty (20) days, as may be applicable. Such Indemnified Person's costs and
expenses incurred in connection with successfully establishing his right to
indemnification or advancement of costs, charges or expenses, in whole or in
part, in any such action shall also be indemnified by the Corporation. It shall
be a defense to any such action that the claimant has not met the standard of
conduct, if any, required by the Delaware General Corporation Law or judicial or
administrative decisions, as the same exists or may hereafter be amended or
interpreted differently in the future (but, in the case of any such future
amendment or interpretation, only to the extent that such amendment or
interpretation does not impose a more stringent standard of conduct than
permitted prior thereto), but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors or any committee thereof, its independent legal counsel, and its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant or advancement for the claimant is
proper in the circumstances because he has met the applicable standard of
conduct, if any, nor the fact that there has been an actual determination by the
Corporation (including its Board of Directors or any committee thereof, its
independent legal counsel, or its stockholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that the claimant has not met the applicable standard of conduct.

4. Non-Exclusivity; Survival of Indemnification

The indemnification and advancement provided by this Article
shall not be deemed exclusive of any other rights to which those Indemnified
Persons may be entitled under any agreement, vote of stockholders or
disinterested directors or recommendation of counsel or otherwise, both as to
actions in such person's official capacity and as to actions in any other
capacity while holding such office or position, and shall continue as to an
Indemnified Person who has ceased to be a director, officer, employee or agent
and shall inure to the benefit of the heirs, beneficiaries, personal
representatives and the estate of such person. All rights to indemnification and
advancement under this Article shall be deemed to be a contract between the

-5-

<PAGE>

Corporation and each Indemnified Person who serves or served in such capacity at
any time while this Article is in effect. Any repeal or modification of this
Article or any repeal or modification of relevant provisions of the Delaware
General Corporation Law or any other applicable laws shall not in any way
diminish any rights to indemnification of such Indemnified Person, or the
obligations of the Corporation arising hereunder, for claims relating to matters
occurring prior to such repeal or modification.

5. Insurance

The Corporation may purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise (including serving as a fiduciary of an
employee benefit plan) against any liability asserted against him and incurred
by him in any such capacity or arising out of his status as such, whether or not
the Corporation would have the power to indemnify him against such liability
under the provisions of this Article or the applicable provisions of the
Delaware General Corporation Law.

6. Savings Clause

If this Article or any portion hereof shall be invalidated on
any ground by any court of competent jurisdiction, then the Corporation shall
nevertheless indemnify and advance costs to each Indemnified Person as to costs,
charges and expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement with respect to any Proceeding, including an action by or in
the right of the Corporation, to the full extent permitted by any applicable
portion of this Article that shall not have been invalidated and as permitted by
the Delaware General Corporation Law.

NINTH: No director of the Corporation shall be personally
liable to the Corporation or its stockholders for any monetary damages for
breaches of fiduciary duty as a director, provided that this provision shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders; (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) under Section 174 of the General Corporation Law
of the State of Delaware; or (iv) for any transaction from which the director
derived an improper personal benefit. No repeal or amendment of this Article
shall adversely affect any rights of any person pursuant to this Article which
existed at the time of such repeal or amendment with respect to acts or
omissions occurring prior to such repeal or amendment."

-6-

<PAGE>

This Restated Certificate of Incorporation was duly adopted in
accordance with the provisions of Sections 228, 242 and 245 of the Delaware
General Corporation Law by the written consent of the holders of not less than a
majority of the outstanding stock entitled to vote thereon and that prompt
written notice of the corporate action shall be given to those stockholders who
have not consented in writing, all in accordance with the provisions of Section
228 of the General Corporation Law of the State of Delaware.

IN WITNESS WHEREOF, I have signed this Certificate this 22nd
day of December l997.

By: /s/ Frank Cretella
-----------------------
Name: Frank Cretella
Title: President

-7-

<PAGE>
TAM RESTAURANT HOLDING CORP.

BY-LAWS

ARTICLE I

OFFICES

1. The location of the registered office of the Corporation in
the State of Delaware is 1013 Centre Road, in the City of Wilmington, County of
New Castle, and the name of its registered agent at such address is The
Prentice-Hall Corporation System, Inc.
2. The Corporation shall in addition to its registered office
in the State of Delaware establish and maintain an office or offices at such
place or places as the Board of Directors may from time to time find necessary
or desirable.

ARTICLE II
CORPORATE SEAL

The corporate seal of the Corporation shall have inscribed
thereon the name of the Corporation and may be in such form as the Board of
Directors may determine. Such seal may be used by causing it or a facsimile
thereof to be impressed, affixed or otherwise reproduced.

ARTICLE III

MEETINGS OF STOCKHOLDERS

1. All meetings of the stockholders shall be held at the
registered office of the Corporation in the State of Delaware or at such other
place as shall be determined from time to time by the Board of Directors.

<PAGE>

2. The annual meeting of stockholders shall be held on such
day and at such time as may be determined from time to time by resolution of the
Board of Directors, when they shall elect by plurality vote, a Board of
Directors to hold office until the annual meeting of stockholders held next
after their election and their successors are respectively elected and qualified
or until their earlier resignation or removal. Any other proper business may be
transacted at the annual meeting.

3. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business, except as otherwise expressly provided by statute, by
the Certificate of Incorporation or by these By-laws. If, however, such majority
shall not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or by proxy, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting (except as otherwise provided by statute). At such
adjourned meeting at which the requisite amount of voting stock shall be
represented any business may be transacted which might have been transacted at
the meeting as originally notified.

4. At all meetings of the stockholders each stockholder having
the right to vote shall be entitled to vote in person, or by proxy appointed by
an instrument in writing subscribed by such stockholder and bearing a date not
more than three years prior to said meeting, unless such instrument provides for
a longer period.

-2-

<PAGE>

5. At each meeting of the stockholders each stockholder shall
have one vote for each share of capital stock having voting power, registered in
his name on the books of the Corporation at the record date fixed in accordance
with these By-law, or otherwise determined, with respect to such meeting. Except
as otherwise expressly provided by statute, by the Certificate of Incorporation
or by these By-laws, all matters coming before any meeting of the stockholders
shall be decided by the vote of a majority of the number of shares of stock
present in person or represented by proxy at such meeting and entitled to vote
thereat, a quorum being present.

6. Notice of each meeting of the stockholders shall be mailed
to each stockholder entitled to vote thereat not less than 10 nor more than 60
days before the date of the meeting. Such notice shall state the place, date and
hour of the meeting and, in the case of a special meeting, the purposes for
which the meeting is called.

7. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute, may be called by the President
or by the Board of Directors, and shall be called by the Secretary at the
request in writing of stockholders owning a majority of the amount of the entire
capital stock of the Corporation issued and outstanding and entitled to vote.
Such request by stockholders shall state the purpose or purposes of the proposed
meeting.

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<PAGE>

8. Business transacted at each special meeting shall be
confined to the purpose or purposes stated in the notice of such meeting.

9. The order of business at each meeting of stockholders shall
be determined by the presiding officer.

ARTICLE IV
DIRECTORS

1. The business and affairs of the Corporation shall be
managed under the direction of a Board of Directors, which may exercise all such
powers and authority for and on behalf of the Corporation as shall be permitted
by law, the Certificate of Incorporation or these By-laws. Each of the directors
shall hold office until the next annual meeting of stockholders and until his
successor has been elected and qualified or until his earlier resignation or
removal.
2. The Board is empowered to appoint a Chairman of the Board
of Directors. The Chairman shall act as chairman of all meetings of the Board of
Directors and at all special and annual meetings of stockholders, and shall have
control over the agenda of such meetings, all in accordance with the provisions
of these Bylaws and the Certificate of Incorporation. The Chairman shall perform
such other duties as may from time to time be assigned to him by the Board.

3. The Board of Directors may hold their meetings within or
outside of the State of Delaware, at such place or places as it may from time to
time determine.

-4-

<PAGE>

4. The number of directors comprising the Board of Directors
shall be such number as may be from time to time fixed by resolution of the
Board of Directors. In case of any increase, the Board shall have power to elect
each additional director to hold office until the next annual meeting of
stockholders and until his successor is elected and qualified or his earlier
resignation or removal. Any decrease in the number of directors shall take
effect at the time of such action by the Board only to the extent that vacancies
then exist; to the extent that such decrease exceeds the number of such
vacancies, the decrease shall not become effective, except as further vacancies
may thereafter occur, until the time of and in connection with the election of
directors at the next succeeding annual meeting of the stockholders.

5. If the office of any director becomes vacant, by reason of
death, resignation, disqualification or otherwise, a majority of the directors
then in office, although less than a quorum, may fill the vacancy by electing a
successor who shall hold office until the next annual meeting of stockholders
and until his successor is elected and qualified or his earlier resignation or
removal.

6. Any director may resign at any time by giving written
notice of his resignation to the Board of Directors. Any such resignation shall
take effect upon receipt thereof by the Board, or at such later date as may be
specified therein. Any such notice to the Board shall be addressed to it in care
of the Secretary.

-5-

<PAGE>
ARTICLE V
COMMITTEES OF DIRECTORS

1. By resolutions adopted by a majority of the whole Board of
Directors, the Board may designate an Executive Committee and one or more other
committees, each such committee to consist of one or more directors of the
Corporation. The Executive Committee shall have and may exercise all the powers
and authority of the Board in the management of the business and affairs of the
Corporation (except as otherwise expressly limited by statute), including the
power and authority to declare dividends and to authorize the issuance of stock,
and may authorize the seal of the corporation to be affixed to all papers which
may require it. Each such committee shall have such of the powers and authority
of the Board as may be provided from time to time in resolutions adopted by a
majority of the whole Board.

2. The requirements with respect to the manner in which the
Executive Committee and each such other committee shall hold meetings and take
actions shall be set forth in the resolutions of the Board of Directors
designating the Executive Committee or such other committee.

ARTICLE VI

COMPENSATION OF DIRECTORS

The directors shall receive such compensation for their
services as may be authorized by resolution of the Board of Directors, which
compensation may include an annual fee and a fixed sum for expense of attendance
at regular or special meetings of the Board or any committee thereof. Nothing
herein contained shall be

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<PAGE>

construed to preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor.

ARTICLE VII

MEETINGS OF DIRECTORS; ACTION WITHOUT A MEETING

1. Regular meetings of the Board of Directors may be held
without notice at such time and place, either within or without the State of
Delaware, as may be determined from time to time by resolution of the Board.

2. Special meetings of the Board of Directors shall be held
whenever called by the President of the Corporation or the Board of Directors on
at least 24 hours' notice to each director. Except as may be otherwise
specifically provided by statute, by the Certificate of Incorporation or by
these By-laws, the purpose or purposes of any such special meeting need not be
stated in such notice, although the time and place of the meeting shall be
stated.

3. At all meetings of the Board of Directors, the presence in
person of a majority of the members of the Board of Directors shall be necessary
and sufficient to constitute a quorum for the transaction of business, and,
except as otherwise provided by statute, by the Certificate of Incorporation or
by these By laws, if a quorum shall be present the act of a majority of the
directors present shall be the act of the Board.

4. Any action required or permitted to be taken at any meeting
of the Board of Directors or of any committee thereof may be taken without a
meeting if all the members of the Board or such committee, as the case may be,
consent thereto in writing and the writing or writings are filed with the
minutes of proceedings of

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<PAGE>

the Board of committee. Any director may participate in a meeting of the Board,
or any committee designated by the Board, by means of a conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to this
sentence shall constitute presence in person at such meeting.

ARTICLE VIII

OFFICERS

1. The officers of the Corporation shall be chosen by the
Board of Directors and shall be a Chief Executive Officer, a President, one or
more Vice Presidents, a Secretary, a Chief Financial Officer and a Treasurer.
The Board may also choose one or more Assistant Secretaries and Assistant
Treasurers, and such other officers as it shall deem necessary. Any number of
offices may be held by the same person.

2. The salaries of all officers of the Corporation shall be
fixed by the Board of Directors, or in such manner as the Board may prescribe.

3. The officers of the Corporation shall hold office until
their successors are elected and qualified, or until their earlier resignation
or removal. Any officer may be at any time removed from office by the Board of
Directors, with or without cause. If the office of any officer becomes vacant
for any reason, the vacancy may be filled by the Board of Directors.

4. Any officer may resign at any time by giving written notice
of his resignation to the Board of Directors. Any such resignation shall take
effect upon receipt thereof by the Board or

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<PAGE>

at such later date as may be specified therein. Any such notice to
the Board shall be addressed to it in care of the Secretary.

ARTICLE IX

CHIEF EXECUTIVE OFFICER

The Chief Executive Officer shall have general supervision and
direction of the business and affairs of the Corporation, subject, however, to
the direction and control of the Board. The Chief Executive Officer may sign and
execute in the name of the Corporation deeds, mortgages, bond, contracts or
other instruments. He shall perform all duties incident to the office of the
Chief Executive Officer and shall, when requested, counsel with and advise the
other officers of the Corporation and shall perform such other duties as the
Board may from time to time determine.

ARTICLE X

PRESIDENT

The President shall be the chief operating officer of the
Corporation. Subject to the supervision and direction of the Board of Directors,
he shall be responsible for managing the day to day affairs of the Corporation.
He shall have supervision and direction of all of the several officers, agents
and employees of the Corporation, subject, however, to the direction and control
of the Board. The President may sign and execute in the name of the Corporation
deeds, mortgages, bond, contracts or other instruments. He shall perform all
duties incident to the office of the President and shall, when requested,
counsel with and advise the other officers of the Corporation and shall perform
such other duties as the Board may from time to time determine.

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<PAGE>

ARTICLE XI

VICE PRESIDENTS

The Vice Presidents shall have such powers and duties as may
be delegated to them by the Chief Executive Officer or by the President.

ARTICLE XII

SECRETARY AND ASSISTANT SECRETARY

1. The Secretary shall attend all meetings of the Board of
Directors and of the stockholders, and shall record the minutes of all
proceedings in a book to be kept for that purpose. He shall perform like duties
for the committees of the Board when required.

2. The Secretary shall give, or cause to be given, notice of
meetings of the stockholders, of the Board of Directors and of the committees of
the Board. He shall keep in safe custody the seal of the Corporation, and when
authorized by the President, an Executive Vice President or a Vice President,
shall affix the same to any instrument requiring it, and when so affixed it
shall be attested by his signature or by the signature of an Assistant
Secretary. He shall have such other powers and duties as may be delegated to him
by the Chief Executive Officer or by the President.

3. The Assistant Secretary shall, in case of the absence of
the Secretary, perform the duties and exercise the powers of the Secretary, and
shall have such other powers and duties as may be delegated to them by the Chief
Executive Officer or by the President.

-10-

<PAGE>

ARTICLE XIII

CHIEF FINANCIAL OFFICER

1. The Chief Financial Officer shall have the custody of the
corporate funds and securities, and shall deposit or cause to be deposited under
his direction all moneys and other valuable effects in the name and to the
credit of the Corporation in such depositories as may be designated by the Board
of Directors or pursuant to authority granted by it. He shall render to the
President and the Board whenever they may require it an account of all his
transactions as Chief Financial Officer and of the financial condition of the
Corporation. He shall have such other powers and duties as may be delegated to
him by the Chief Executive Officer or by the President.

ARTICLE XIV

TREASURER AND ASSISTANT TREASURER

1. The Treasurer shall assist the Chief Financial Officer in
discharging his responsibilities and shall have such other powers and duties as
may be delegated to him by the Chief Executive Officer, the President or the
Chief Financial Officer.

2. The Assistant Treasurer shall, in case of the absence of
the Treasurer, perform the duties and exercise the powers of the Treasurer, and
shall have such other powers and duties as may be delegated to him by the Chief
Executive Officer, the President or the Chief Financial Officer.

ARTICLE XV

CERTIFICATES OF STOCK

The certificates of stock of the Corporation shall be

-11-

<PAGE>

numbered and shall be entered in the books of the Corporation as they are
issued. They shall exhibit the holder's name and number of shares and shall be
signed by the President or an Executive Vice President or Vice President, and by
the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary.

ARTICLE XVI

CHECKS

All checks, drafts and other orders for the payment of money
and all promissory notes and other evidences of indebtedness of the Corporation
shall be signed by such officer or officers or such other person as may be
designated by the Board of Directors or pursuant to authority granted by it.

ARTICLE XVII

FISCAL YEAR

The fiscal year of the Corporation shall be as determined from
time to time by resolution duly adopted by the Board of Directors.

ARTICLE XVIII

NOTICES AND WAIVERS

1. Whenever by statute, by the Certificate of Incorporation or
by these By-laws it is provided that notice shall be given to any director or
stockholder, such provision shall not be construed to require personal notice,
but such notice may be given in writing, by mail, by depositing the same in the
United States mail, postage prepaid, directed to such stockholder or director at
his address as it appears on the records of the Corporation, and such notice
shall be deemed to be given at the time when the same

-12-

<PAGE>

shall be thus deposited. Notice of regular or special meetings of the Board of
Directors may also be given to any director by telephone or by telex, telegraph
or cable, and in the latter event the notice shall be deemed to be given at the
time such notice, addressed to such director at the address hereinabove
provided, is transmitted by telex (with confirmed answerback), or delivered to
and accepted by an authorized telegraph or cable office.

2. Whenever by statute, by the Certificate of Incorporation or
by these By-laws a notice is required to be given, a written waiver thereof,
signed by the person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to notice. Attendance of any stockholder or
director at any meeting thereof shall constitute a waiver of notice of such
meeting by such stockholder or director, as the case may be, except as otherwise
provided by statute.

ARTICLE XIX

INDEMNIFICATION

All persons who the Corporation is empowered to indemnify
pursuant to the provisions of Section 145 of the General Corporation Law of the
State of Delaware (or any similar provision or provisions of applicable law at
the time in effect) shall be indemnified by the Corporation to the full extent
permitted thereby. The foregoing right of indemnification shall not be deemed to
be exclusive of any other such rights to which those seeking indemnification
from the Corporation may be entitled, including, but not limited to, any rights
of indemnification to which they may be entitled pursuant to any agreement,
insurance

-13-

<PAGE>

policy, other by-law or charter provision, vote of stockholders or directors, or
otherwise. No repeal or amendment of this Article shall adversely affect any
rights of any person pursuant to this Article which existed at the time of such
repeal or amendment with respect to acts or omissions occurring prior to such
repeal or amendment.

ARTICLE XX

ALTERATION OF BY-LAWS

The By-laws of the Corporation may be altered, amended or
repealed, and new By-laws may be adopted, by the stockholders or by the Board of
Directors.

-14-

<PAGE>

NUMBER SHARES
TR

SEE REVERSE FOR
CERTAIN DEFINITIONS

TAM RESTAURANTS, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
CUSIP 874835 10 1
THIS CERTIFIES THAT

is the owner of

FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK,
PAR VALUE $.0001 PER SHARE, OF

TAM RESTAURANTS, INC.

transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney upon surrender of this certificate properly
endorsed. This certificate is not valid unless countersigned by the Transfer
Agent and registered by the Registrar.

WITNESS the seal of the Corporation and the signatures of its duly
authorized officers.

Dated:
TAM RESTAURANTS, INC.

CORPORATE

SEAL
1996

DELAWARE
PRESIDENT SECRETARY

COUNTERSIGNED AND REGISTERED:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
(JERSEY CITY, N.J.)
TRANSFER AGENT
AND REGISTRAR
BY
AUTHORIZED OFFICER

<PAGE>
TAM RESTAURANTS, INC.

The Corporation will furnish without charge to each stockholder who so
requests a statement of the designations, powers, preferences and relative
participating, optional or other special rights of each class of stock or series
thereof of the Corporation and the qualifications, limitations or restrictions
of such preferences and/or rights. Such request may be made to the Corporation
or the Transfer Agent.

The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common UNIF GIFT MIN ACT- _____Custodian______
TEN ENT - as tenants by the entireties (cust) (Minor)
JT TEN - as joint tenants
with right of survivorship Under Uniform Gifts to Minors
and not as tenants in common Act__________________________
(State)
Additional abbreviations may also be used though not in the above list.

For value received, the undersigned hereby sells, assigns and transfers unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

_______________________________________
| |
| |
|_______________________________________|

_______________________________________________________________________________
(PLEASE PRINT OF TYPEWRITE NAME AND ADDRESS
INCLUDING POSTAL ZIP CODE OF ASSIGNEE)

_______________________________________________________________________________

________________________________________________________________________shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint____________________________________________
___________________________Attorney to transfer the said stock on the books of
the within named Corporation with full power of substitution in the premises.

Dated:________________________________

________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON
THE FACE OF THE CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATEVER.

Signature(s) Guaranteed:

________________________________________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.

<PAGE>

EXHIBIT 4.4

VOID AFTER , 2003
REDEEMABLE WARRANT CERTIFICATE TO PURCHASE COMMON STOCK OF

NUMBER WARRANTS

TRW

TAM RESTAURANTS, INC.

CUSIP 874835 11 9
THIS IS TO CERTIFY THAT,

or registered assigns, is the owner of the number of warrants set forth above.
Each Warrant (subject to adjustments as hereinafter referred to) entitles the
owner hereof to purchase at any time commencing _____ __, 1999 (or such earlier
date as to which Paragon Capital Corporation shall consent) (the "Exercise
Date") until 5:00 p.m., Eastern Time on _____, 2003 one fully paid and
non-assessable share of common stock (the "Common Stock") of TAM Restaurants,
Inc., a Delaware corporation (the "Company") (such shares of Common Stock being
hereinafter referred to as the "Shares" or a "Share"), upon payment of the
warrant price (as hereinafter described), provided, however, that under certain
conditions set forth in the Warrant Agreement hereinafter mentioned, the number
of Shares purchasable upon the exercise of this Warrant may be increased or
reduced and the warrant price may be adjusted. Subject to adjustment as
aforesaid, the warrant price per Share (hereinafter called the "Warrant Price")
shall be $6.00 per Share if exercised on or before 5:00 p.m., Eastern Time on
_____, 2003. As provided in said Warrant Agreement, the Warrant Price is payable
upon the exercise of the Warrant, either in cash or by certified check or bank
draft to the order of the Company.

Under certain conditions set forth in the Warrant Agreement, this Warrant
may be called for redemption on or after the Exercise Date at a redemption price
of $0.10 per Warrant upon 30 days' written notice.

Upon the exercise of this Warrant, the form of election to purchase on the
reverse hereof must be properly completed and executed. In the event that this
Warrant is exercised in respect to less than all of such Shares, a new Warrant
for the remaining number of Shares will be issued on such surrender.

This Warrant is issued under and the rights represented hereby are subject
to the terms and provisions contained in a Warrant Agreement dated as of
__________, 1998, by and among the Company, Continental Stock Transfer & Trust
Company, as Warrant Agent (the "Warrant Agent") and Paragon Capital Corporation,
all the terms and provisions of which the registered holder of this Warrant, by
acceptance hereof, assents. Reference is hereby made to said Warrant Agreement
for a more complete statement of the rights and limitations of rights of the
registered holders hereof, the rights and duties of the Warrant Agent and the
rights and obligations of the Company thereunder. Copies of said Warrant
Agreement are on file at the office of the Warrant Agent.

The Company shall not be required upon the exercise of this Warrant to
issue fractions of Shares, but shall make adjustment therefor in cash on the
basis of the current market value of any fractional interest as provided in the
Warrant Agreement.

This Warrant is transferable at the office of the Warrant Agent (or of its
successor as Warrant Agent) by the registered holder hereof in person or by
attorney duly authorized in writing, but only in the manner and subject to the
limitations provided in the Warrant Agreement and upon surrender of this Warrant
and the payment of any transfer taxes. Upon any such transfer, a new Warrant, or
new Warrants of different denominations, of this tenor and representing in the
aggregate the right to purchase a like number of Shares will be issued to the
transferee in exchange for this Warrant.

This Warrant, when surrendered at the office of the Warrant Agent (or its
successor as Warrant Agent) by the registered holder hereof in person or by
attorney duly authorized in writing, may be exchanged in the manner and subject
to the limitations provided in the Warrant Agreement, for another Warrant, or
other Warrants of different denominations, of like tenor and representing in the
aggregate the right to purchase a like number of Shares equal to the number of
such Warrants.

If this Warrant Certificate shall be surrendered for exercise within any
period during which the transfer books for the Company's Common Stock or other
securities purchasable upon the exercise of the Warrants are closed for any
purpose, the Company shall not be required to make delivery of certificates for
the securities purchasable upon such exercise until the date of the reopening of
said transfer books.

The holder of this Warrant shall not be entitled to any of the rights of a
shareholder of the Company prior to the exercise hereof.

This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent.

WITNESS the facsimile seal of the Company and the facsimile signature of
its duly authorized officers.

Dated:

TAM RESTAURANTS, INC.

CORPORATE

SEAL
1996

DELAWARE

PRESIDENT SECRETARY

COUNTERSIGNED:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
(JERSEY CITY, N.J.)
AS WARRANT AGENT

BY:

AUTHORIZED OFFICER

<PAGE>
TAM RESTAURANTS, INC.
ELECTION TO PURCHASE
To be executed by the Registered Holder in order to
exercise the Warrant.

The undersigned hereby irrevocably elects to exercise the right to purchase
represented by the within Warrant(s) for and to purchase thereunder,
_______________________________ shares of Common Stock provided for therein and
tenders herewith payment of the purchase price in full to the order of the
Corporation and requests that certificates for such shares be issued in the name
of and delivered to:

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________
| |
| |
|_______________________________________|

________________________________________________________________________________
(Please print name and address)

________________________________________________________________________________
If such number of shares shall not be all the shares purchasable thereunder, a
new Warrant Certificate for the balance remaining of the shares purchasable
under the within Warrant shall be registered in the name of and delivered to:

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________
| |
| |
|_______________________________________|

________________________________________________________________________________
(Please print name and address)

________________________________________________________________________________
The undersigned represents that the exercise of the within Warrant was solicited
by a member of the National Association of Securities Dealers, Inc. If not
solicited by an NASD member, please write "unsolicited" in the space below.
Unless otherwise indicated by listing the name of another NASD member firm, it
will be assumed that the exercise was solicited by Paragon Capital Corporation.

Dated: ____________________________

___________________________________ ________________________________________
Signature Print Name

(Signature must conform in all respects to name of holder as specified on the
face of this Warrant Certificate)

Signature Guaranteed:*

ASSIGNMENT
To be executed by the Registered Holder in order
to transfer the Warrant

FOR VALUE RECEIVED, __________________________________________ hereby
sells, assigns and transfers unto ______________________________________________

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
---------------------------------------

---------------------------------------

Name: _________________________________________________________________________
(Please typewrite or print in block letters)

Address: ______________________________________________________________________
(________) Warrants represented by this Warrant Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint _______________________________________________________________________
____________________________________, ttorney to transfer said Warrant on the
books of the within named Company, with ull power of substitution in the
premises.

Dated: _______________________________ X _____________________________________

______________________________________ Signature Guaranteed*
Print name

______________________________________ ______________________________________
Print address Notice: The signature to the
foregoing assignment must correspond
to the name as written upon the face
of this Warrant Certificate in every
particular, without alteration or
enlargement, or any change whatsoever
and must be guaranteed by an Eligible
Institution (as defined in Rule
17Ad-15 under the Securities Exchange
Act of 1934) which may include a
commercial bank or trust company,
savings association, credit union or
a member firm of the American Stock
Exchange, New York Stock Exchange,
Pacific Stock Exchange or Midwest
Stock Exchange.

*In case of assignment, or if the Common Stock issued upon exercise is to be
registered in the name of a person other than the holder, the holder's signature
must be guaranteed by a commercial bank, trust company or an NASD member firm.

<PAGE>

TENZER GREENBLATT LLP
THE CHRYSLER BUILDING
405 LEXINGTON AVENUE
NEW YORK, NEW YORK 10174
(212) 885-5000 NEW JERSEY OFFICE
TENZER GREENBLATT & ZUNZ, PA
CABLE: "TENGRAN NEW YORK" 15 WARREN STREET
FACSMILE: (212) 885-5001 HACKENSACK, N.J. 07601
(201) 487-7511

January 13, 1998

TAM Restaurants, Inc.
1163 Forest Avenue
Staten Island, New York 10310

Gentlemen:

You have requested our opinion in connection with the public
offering and sale (the "Offering") pursuant to a Registration Statement (the
"Registration Statement") on Form SB-2 (file no. 333-39937), of TAM Restaurants,
Inc., a Delaware corporation (the "Company"), under the Securities Act of 1933,
as amended (the "Act"), of (i) up to 1,150,000 shares (the "Offered Shares") of
the Common Stock, $.0001 par value (the "Common Stock") of the Company, to be
offered by the Company and (ii) redeemable warrants (the "Warrants") to purchase
up to 575,000 shares of Common Stock of the Company ("Warrant Shares") to be
offered by the Company. Additionally, the Company has agreed to register on
behalf of certain selling securityholders (the "Selling Securityholders") up to
310,000 warrants (the "Selling Securityholders' Warrants") issuable in exchange
for outstanding warrants previously granted to the Selling Securityholders, and
up to 310,000 shares of Common Stock of the Company (the "Selling
Securityholders' Warrant Shares") issuable upon exercise of the Selling
Securityholders' Warrants.

We have examined originals, or copies certified or otherwise
identified to our satisfaction, of such documents and corporate and public
records as we deem necessary as a basis for the opinion hereinafter expressed.
With respect to such examination, we have assumed the genuineness of all
signatures appearing on all documents presented to us as originals, the
conformity to the originals of all documents presented to us as conformed or
reproduced copies and the enforceability of all agreements and similar documents
presented to us. Where factual matters relevant to such opinion were not
independently established, we have relied upon certificates of appropriate state
and local officials, and upon certificates of executive officers and responsible
employees and agents of the Company.

<PAGE>

TAM Restaurants, Inc.
January 13, 1998
Page 2

Based upon and subject to the foregoing, it is our opinion
that:

1. The Offered Shares have been duly authorized and, when
sold, paid for and issued as contemplated by the Registration Statement, will be
validly issued, fully paid and nonassessable.

2. The Warrants, when paid for and issued as contemplated by
the Registration Statement, will be valid and binding obligations of the
Company.

3. The Warrant Shares have been duly authorized and, when
sold, paid for and issued upon exercise of the Warrants in accordance with the
terms of the Warrants, will be validly issued, fully paid and nonassessable.

4. The Selling Securityholders' Warrants, when issued in
exchange for the outstanding warrants, as contemplated by the Registration
Statement, will be valid and binding obligations of the Company.

5. The Selling Securityholders' Warrant Shares have been duly
authorized and, when sold, paid for and issued upon exercise of the Selling
Securityholders' Warrants in accordance with the terms of the Selling
Securityholders' Warrants, will be validly issued, fully paid and nonassessable.

The opinions expressed in paragraphs 2 and 4 with regard to
the valid and binding nature of the obligations referred to therein are limited
by bankruptcy, insolvency, fraudulent conveyance, moratorium or other similar
laws relating to or limiting creditors' rights generally and subject to general
principles of equity.

We hereby consent to the use of this opinion as Exhibit 5.1 to
the Registration Statement, and to the use of our name as your counsel in
connection with the Registration Statement and in the Prospectus forming a part
thereof. In giving this consent, we do not thereby concede that we come within
the categories of

<PAGE>

TAM Restaurants, Inc.
January 13, 1998
Page 3

persons whose consent is required by the Act or the General Rules and
Regulations promulgated thereunder.

Very truly yours,

/S/ TENZER GREENBLATT LLP
--------------------------
TENZER GREENBLATT LLP

<PAGE>

EXHIBIT 10-8

EMPLOYMENT AGREEMENT

AGREEMENT dated as of ____________, 1997 between TAM
RESTAURANTS, INC., a Delaware corporation (the "Employer" or the "Company"), and
Mr. Frank Cretella (the "Employee").

W I T N E S S E T H :

WHEREAS, the Employee is currently the Company's
President and Chief Executive Officer;

WHEREAS, the Employer desires to continue to employ the
Employee as its President and Chief Executive Officer and to be assured of his
services as such on the terms and conditions hereinafter set forth; and

WHEREAS, the Employee is willing to accept such
employment on such terms and conditions;

NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, and intending to be legally bound hereby, the
Employer and the Employee hereby agree as follows:

1. Term. Employer hereby agrees to continue to employ
Employee, and Employee hereby agrees to continue to serve Employer for a
three-year period commencing effective as of the effective date of an initial
public offering of the Company's securities (the "Effective Date") (such period
being herein referred to as the "Initial Term," and any year commencing on the
Effective Date or any anniversary of the Effective Date being hereinafter
referred to as an "Employment Year"). After the Initial Term, this Agreement
shall be renewable automatically for successive one year periods (each such
period being referred to as a "Renewal Term"), unless, more than thirty days
prior to the expiration of the Initial Term or any Renewal Term, either the
Employee or the Company give written notice that employment will not be renewed.

2. Employee Duties.

(a) During the term of this Agreement, the Employee
shall have the duties and responsibilities of President and Chief Executive
Officer of the Employer, reporting directly to the Board of Directors of the
Employer (the "Board"). It is understood that such duties and responsibilities
shall be reasonably related to the Employee's position.
<PAGE>

(b) The Employee shall devote a majority of his
business time, attention, knowledge and skills faithfully, diligently and to the
best of his ability, in furtherance of the business and activities of the
Company. The principal place of performance by the Employee of his duties
hereunder shall be the Company's principal executive offices or such other place
as the Board shall determine, although the Employee may be required to travel
outside of the area where the Company's principal executive offices are located
in connection with the business of the Company.

3. Compensation.

(a) During the term of this Agreement, the Employer
shall pay the Employee a salary (the "Salary") at a rate of $175,000 per annum
in respect of each Employment Year, payable in equal installments bi-weekly, or
at such other times as may mutually be agreed upon between the Employer and the
Employee. Such Salary may be increased from time to time at the discretion of
the Board.

(b) In addition to the foregoing, the Employee shall
be entitled to such other cash bonuses and such other compensation in the form
of stock, stock options or other property or rights as may from time to time be
awarded to him by the Board during or in respect of his employment hereunder.

4. Benefits.

(a) During the term of this Agreement, the Employee
shall have the right to receive or participate in all benefits and plans which
the Company may from time to time institute during such period for its employees
and for which the Employee is eligible. Nothing paid to the Employee under any
plan or arrangement presently in effect or made available in the future shall be
deemed to be in lieu of the Salary or any other obligation payable to the
Employee pursuant to this Agreement.

(b) During the term of this Agreement, the Employee
will be entitled to the number of paid holidays, personal days off, vacation
days and sick leave days in each calendar year as are determined by the Company
from time to time. Such vacation may be taken in the Employee's discretion with
the prior approval of the Employee, and at such time or times as are not
inconsistent with the reasonable business needs of the Company.

5. Travel Expenses. All travel and other expenses incident to
the rendering of services reasonably incurred on behalf of the Company by the

-2-
<PAGE>

Employee during the term of this Agreement shall be paid by the Employer. If any
such expenses are paid in the first instance by the Employee, the Employer shall
reimburse him therefor on presentation of appropriate receipts for any such
expenses.

6. Termination. Notwithstanding the provisions of Section 1
hereof, the Employee's employment with the Employer may be earlier terminated as
follows:

(a) By action taken by the Board, the Employee may be
discharged for cause (as hereinafter defined), effective as of such time as the
Board shall determine. Upon discharge of the Employee pursuant to this Section
6(a), the Employer shall have no further obligation or duties to the Employee,
except for payment of Salary through the effective date of termination, and as
provided in Sections 5 and 8, and the Employee shall have no further obligations
or duties to the Employer, except as provided in Section 7.

(b) In the event of (i) the death of the Employee or
(ii) by action of the Board and the inability of the Employee, by reason of
physical or mental disability, to continue substantially to perform his duties
hereunder for a period of 180 consecutive days, during which 180 day period
Salary and any other benefits hereunder shall not be suspended or diminished.
Upon any termination of the Employee's employment under this Section 6(b), the
Employer shall have no further obligations or duties to the Employee, except as
provided in Sections 5 and 8.

(c) In the event that Employee's employment with the
Employer is terminated by action taken by the Board without cause, including
termination upon a Change in Control (as hereinafter defined), then the Employer
shall have no further obligation or duties to Employee, except for payment of
the amounts described below and as provided in Sections 5 and 8, and Employee
shall have no further obligations or duties to the Employer, except as provided
in Section 7. In the event of such termination, the Employer shall continue to
pay Salary to the Employee for the remainder of the Initial Term, or the
remainder of the current Renewal Term if this Agreement has been renewed;
provided, however, that if such termination occurs during the third year of the
Initial Term or the final year of any Renewal Term, the Employer shall also pay
to the Employee an amount equal to the total Salary received by the Employee
during the 12 months prior to the date of termination. If such termination
occurs upon a Change in Control, all amounts payable to the Employee pursuant to
this Section 6(c) shall be paid in one lump-sum payment payable immediately upon
such termination.

-3-
<PAGE>

(d) For purposes of this Agreement, the Company shall
have "cause" to terminate the Employee's employment under this Agreement upon
(i) the failure by the Employee to substantially perform his duties under this
Agreement, (ii) the engaging by the Employee in criminal misconduct (including
embezzlement and criminal fraud) which is materially injurious to the Company,
monetarily or otherwise, (iii) the conviction of the Employee of a felony, (iv)
gross negligence on the part of the Employee or (v) other misconduct of the
Employee in the performance of his duties hereunder. The Company shall give
written notice to the Employee, which notice shall specify the grounds for the
proposed termination and the Employee shall be given thirty (30) days to cure if
the grounds arise under clauses (i) or (v) above.

(e) For purposes of this Agreement a "Change in
Control" shall be deemed to occur, unless previously consented to in writing by
the Employee, upon the election of directors constituting a majority of the
Board who have not been nominated or approved by the Employee and are not
related to the Employee.

7. Confidentiality; Noncompetition.

(a) The Employer and the Employee acknowledge that
the services to be performed by the Employee under this Agreement are unique and
extraordinary and, as a result of such employment, the Employee will be in
possession of confidential information relating to the business practices of the
Company. The term "confidential information" shall mean any and all information
(verbal and written) relating to the Company or any of its affiliates, or any of
their respective activities, other than such information which can be shown by
the Employee to be in the public domain (such information not being deemed to be
in the public domain merely because it is embraced by more general information
which is in the public domain) other than as the result of breach of the
provisions of this Section 7(a), including, but not limited to, information
relating to: trade secrets, recipes, formulas, personnel lists, financial
information, research projects, services used, pricing, customers, customer
lists and prospects, product sourcing, marketing and selling and servicing. The
Employee agrees that he will not, during or for a period of one year after the
termination of employment, directly or indirectly, use, communicate, disclose or
disseminate to any person, firm or corporation any confidential information
regarding the clients, customers or business practices of the Company acquired
by the Employee during his employment by Employer, without the prior written
consent of Employer; provided, however, that the Employee understands that
Employee will be prohibited from misappropriating any trade secret (as defined
for purposes of New York law) at any time during or after the termination of
employment.

-4-
<PAGE>

(b) The Employee hereby agrees that he shall not,
during the period of his employment and for a period of one (1) year following
such employment, directly or indirectly, within any county (or adjacent county)
in any State within the United States or territory outside the United States in
which the Company is engaged in business activities (i.e., operation of a
seafood restaurant or a restaurant at a "landmark" location) during the period
of the Employee's employment or on the date of termination of the Employee's
employment, engage, have an interest in or render any services to any business
(whether as owner, manager, operator, licensor, licensee, lender, partner,
stockholder, joint venturer, employee, consultant or otherwise) competitive with
the Company's business activities; provided however, that the operation of food
concession businesses shall not be deemed to be competitive with the Company's
business activities. Notwithstanding the foregoing, the Employee shall be
permitted to own (as a passive investment) not more than 5% of any class of
securities which is publicly traded.

(c) The Employee hereby agrees that he shall not,
during the period of his employment and for a period of one (1) year following
such employment, directly or indirectly, take any action which constitutes an
interference with or a disruption of any of the Company's business activities
including, without limitation, the solicitations of the Company's customers, or
persons listed on the personnel lists of the Company. At no time during the term
of this Agreement, or thereafter shall the Employee directly or indirectly,
disparage the commercial, business or financial reputation of the Company.

(d) For purposes of clarification, but not of
limitation, the Employee hereby acknowledges and agrees that the provisions of
subparagraphs 7(b) and (c) above shall serve as a prohibition against him,
during the period referred to therein, directly or indirectly, hiring, offering
to hire, enticing, soliciting or in any other manner persuading or attempting to
persuade any officer, employee, agent, lessor, lessee, licensor, licensee or
customer who has been previously contacted by either a representative of the
Company, including the Employee, (but only those suppliers existing during the
time of the Employee's employment by the Company, or at the termination of his
employment), to discontinue or alter his, her or its relationship with the
Company.

(e) Upon the termination of the Employee's employment
for any reason whatsoever, all documents, records, notebooks, equipment, price

-5-
<PAGE>

lists, specifications, programs, customer and prospective customer lists and
other materials which refer or relate to any aspect of the business of the
Company which are in the possession of the Employee including all copies
thereof, shall be promptly returned to the Company.

(f) (i) The Employee agrees that all processes,
technologies and inventions ("Inventions"), including new contributions,
improvements, ideas and discoveries, whether patentable or not, conceived,
developed, invented or made by him during his employment by Employer shall
belong to the Company, provided that such Inventions grew out of the Employee's
work with the Company are related in any manner to the business (commercial or
experimental) of the Company or are conceived or made on the Company's time or
with the use of the Company's facilities or materials. The Employee shall
further: (a) promptly disclose such Inventions to the Company; (b) assign to the
Company, without additional compensation, all patent and other rights to such
Inventions for the United States and foreign countries; (c) sign all papers
necessary to carry out the foregoing; and (d) give testimony in support of his
inventorship;

(ii) If any Invention is described in a patent
application or is disclosed to third parties, directly or indirectly, by the
Employee within one year after the termination of his employment by the Company,
it is to be presumed that the Invention was conceived or made during the period
of the Employee's employment by the Company; and

(iii) The Employee agrees that he will not assert
any rights to any Invention as having been made or acquired by him prior to the
date of this Agreement, except for Inventions, if any, disclosed to the Company
in writing prior to the date hereof.

(g) The Company shall be the sole owner of all
products and proceeds of the Employee's services hereunder, including, but not
limited to, all materials, ideas, concepts, formats, suggestions, developments,
arrangements, packages, programs and other intellectual properties that the
Employee may acquire, obtain, develop or create in connection with and during
the term of the Employee's employment hereunder, free and clear of any claims by
the Employee (or anyone claiming under the Employee) of any kind or character
whatsoever (other than the Employee's right to receive payments hereunder). The
Employee shall, at the request of the Company, execute such assignments,
certificates or other instruments as the Company may from time to time deem
necessary or desirable to evidence, establish, maintain, perfect, protect,
enforce or defend its right, or title and interest in or to any such properties.

-6-
<PAGE>

(h) The parties hereto hereby acknowledge and agree
that (i) the Company would be irreparably injured in the event of a breach by
the Employee of any of his obligations under this Section 7, (ii) monetary
damages would not be an adequate remedy for any such breach, and (iii) the
Company shall be entitled to injunctive relief, in addition to any other remedy
which it may have, in the event of any such breach.

(i) The parties hereto hereby acknowledge that, in
addition to any other remedies the Company may have under Section 7(h) hereof,
the Company shall have the right and remedy to require the Employee to account
for and pay over to the Company all compensation, profits, monies, accruals,
increments or other benefits (collectively, "Benefits") derived or received by
the Employee as the result of any transactions constituting a breach of any of
the provisions of Section 7, and the Employee hereby agrees to account for any
pay over such Benefits to the Company.

(j) Each of the rights and remedies enumerated in
Section 7(h) and 7(i) shall be independent of the other, and shall be severally
enforceable, and all of such rights and remedies shall be in addition to, and
not in lieu of, any other rights and remedies available to the Company under law
or in equity.

(k) If any provision contained in this Section 7 is
hereafter construed to be invalid or unenforceable, the same shall not affect
the remainder of the covenant or covenants, which shall be given full effect,
without regard to the invalid portions.

(l) If any provision contained in this Section 7 is
found to be unenforceable by reason of the extent, duration or scope thereof, or
otherwise, then the court making such determination shall have the right to
reduce such extent, duration, scope or other provision and in its reduced form
any such restriction shall thereafter be enforceable as contemplated hereby.

(m) It is the intent of the parties hereto that the
covenants contained in this Section 7 shall be enforced to the fullest extent
permissible under the laws and public policies of each jurisdiction in which
enforcement is sought (the Employee hereby acknowledging that said restrictions
are reasonably necessary for the protection of the Company). Accordingly, it is
hereby agreed that if any of the provisions of this Section 7 shall be
adjudicated to be invalid or unenforceable for any reason whatsoever, said
provision shall be (only with respect to the operation thereof in the particular

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<PAGE>

jurisdiction in which such adjudication is made) construed by limiting and
reducing it so as to be enforceable to the extent permissible, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of said provision in any other jurisdiction.

8. Indemnification. The Employer shall indemnify and hold
harmless the Employee against any and all expenses reasonably incurred by him in
connection with or arising out of (a) the defense of any action, suit or
proceeding in which he is a party, or (b) any claim asserted or threatened
against him, in either case by reason of or relating to his being or having been
an employee, officer or director of the Company, whether or not he continues to
be such an employee, officer or director at the time of incurring such expenses,
except insofar as such indemnification is prohibited by law. Such expenses shall
include, without limitation, the fees and disbursements of attorneys, amounts of
judgments and amounts of any settlements, provided that such expenses are agreed
to in advance by the Employer. The foregoing indemnification obligation is
independent of any similar obligation provided in the Employer's Certificate of
Incorporation or Bylaws, and shall apply with respect to any matters
attributable to periods prior to the Effective Date, and to matters attributable
to his employment hereunder, without regard to when asserted.

9. General. This Agreement is further governed by the
following provisions:

(a) Notices. All notices relating to this Agreement
shall be in writing and shall be either personally delivered, sent by telecopy
(receipt confirmed) or mailed by certified mail, return receipt requested, to be
delivered at such address as is indicated below, or at such other address or to
the attention of such other person as the recipient has specified by prior
written notice to the sending party. Notice shall be effective when so
personally delivered, one business day after being sent by telecopy or five days
after being mailed.

To the Employer:

TAM Restaurants, Inc.
1163 Forest Avenue
Staten Island, NY 10310

To the Employee:

Mr. Frank Cretella
81 Sharotts Road
Staten Island, New York

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<PAGE>

With, in either case, a copy in the same manner to:

Tenzer Greenblatt LLP
405 Lexington Avenue
New York, New York 10174
Attention: Robert J. Mittman, Esq.

(b) Parties in Interest. Employee may not delegate
his duties or assign his rights hereunder. This Agreement shall inure to the
benefit of, and be binding upon, the parties hereto and their respective heirs,
legal representatives, successors and permitted assigns.

(c) Entire Agreement. This Agreement supersedes any
and all other agreements, either oral or in writing, between the parties hereto
with respect to the employment of the Employee by the Employer and contains all
of the covenants and agreements between the parties with respect to such
employment in any manner whatsoever. Any modification or termination of this
Agreement will be effective only if it is in writing signed by the party to be
charged.

(d) Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Indiana. Employee
agrees to and hereby does submit to jurisdiction before any state or federal
court of record in Marion County, Indiana, or in the state and county in which
such violation may occur, at Employer's election.

(e) Warranty. Employee hereby warrants and represents
as follows:

(i) That the execution of this Agreement and the
discharge of Employee's obligations hereunder will not breach or conflict with
any other contract, agreement, or understanding between Employee and any other
party or parties.

(ii) Employee has ideas, information and know-how
relating to the type of business conducted by Employer, and Employee's
disclosure of such ideas, information and know-how to Employer will not conflict
with or violate the rights of any third party or parties.

(f) Severability. In the event that any term or
condition in this Agreement shall for any reason be held by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other term or
condition of this Agreement, but this Agreement shall be construed as if such
invalid or illegal or unenforceable term or condition had never been contained
herein.

-9-
<PAGE>

(g) Execution in Counterparts. This Agreement may be
executed by the parties in one or more counterparts, each of which shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement, and shall become effective when one or more counterparts
has been signed by each of the parties hereto and delivered to each of the other
parties hereto.

IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.

TAM RESTAURANTS, INC.

By:
------------------------------
Name:
Title:

---------------------------------

<PAGE>

EXHIBIT 10.9

EMPLOYMENT AGREEMENT

AGREEMENT dated as of ____________, 1997 between TAM
RESTAURANTS, INC., a Delaware corporation (the "Employer" or the "Company"), and
Ms. Jeanne Cretella (the "Employee").

W I T N E S S E T H :

WHEREAS, the Employee is currently the Company's Vice
President;

WHEREAS, the Employer desires to continue to employ the
Employee as its Vice President and to be assured of his services as such on the
terms and conditions hereinafter set forth; and

WHEREAS, the Employee is willing to accept such
employment on such terms and conditions;

NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, and intending to be legally bound hereby, the
Employer and the Employee hereby agree as follows:

2. Employee Duties.

(a) During the term of this Agreement, the
Employee shall have the duties and responsibilities of Vice President of the
Employer, reporting directly to the Chief Executive Officer and Board of
Directors of the Employer (the "Board"). It is understood that such duties and
responsibilities shall be reasonably related to the Employee's position.
<PAGE>

3. Compensation.

(a) During the term of this Agreement, the
Employer shall pay the Employee a salary (the "Salary") at a rate of $75,000 per
annum in respect of each Employment Year, payable in equal installments
bi-weekly, or at such other times as may mutually be agreed upon between the
Employer and the Employee. Such Salary may be increased from time to time at the
discretion of the Board.

(b) In addition to the foregoing, the Employee
shall be entitled to such other cash bonuses and such other compensation in the
form of stock, stock options or other property or rights as may from time to
time be awarded to him by the Board during or in respect of his employment
hereunder.

4. Benefits.

(a) During the term of this Agreement, the
Employee shall have the right to receive or participate in all benefits and
plans which the Company may from time to time institute during such period for
its employees and for which the Employee is eligible. Nothing paid to the
Employee under any plan or arrangement presently in effect or made available in
the future shall be deemed to be in lieu of the Salary or any other obligation
payable to the Employee pursuant to this Agreement.

(b) During the term of this Agreement, the
Employee will be entitled to the number of paid holidays, personal days off,
vacation days and sick leave days in each calendar year as are determined by the
Company from time to time. Such vacation may be taken in the Employee's
discretion with the prior approval of the Employee, and at such time or times as
are not inconsistent with the reasonable business needs of the Company.

5. Travel Expenses. All travel and other expenses incident to
the rendering of services reasonably incurred on behalf of the Company by the

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<PAGE>

6. Termination. Notwithstanding the provisions of Section 1
hereof, the Employee's employment with the Employer may be earlier terminated as
follows:

(a) By action taken by the Board, the Employee
may be discharged for cause (as hereinafter defined), effective as of such time
as the Board shall determine. Upon discharge of the Employee pursuant to this
Section 6(a), the Employer shall have no further obligation or duties to the
Employee, except for payment of Salary through the effective date of
termination, and as provided in Sections 5 and 8, and the Employee shall have no
further obligations or duties to the Employer, except as provided in Section 7.

-3-
<PAGE>

7. Confidentiality; Noncompetition.

-4-
<PAGE>

for purposes of New York law) at any time during or after the termination of
employment.

(e) Upon the termination of the Employee's employment
for any reason whatsoever, all documents, records, notebooks, equipment, price

-5-
<PAGE>

-6-
<PAGE>

-7-
<PAGE>

9. General. This Agreement is further governed by the
following provisions:

To the Employer:

TAM Restaurants, Inc.
1163 Forest Avenue
Staten Island, NY 10310

To the Employee:

Ms. Jeanne Cretella
81 Sharotts Road
Staten Island, New York

-8-
<PAGE>

With, in either case, a copy in the same manner to:

Tenzer Greenblatt LLP
405 Lexington Avenue
New York, New York 10174
Attention: Robert J. Mittman, Esq.

(e) Warranty. Employee hereby warrants and represents
as follows:

-9-
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.

TAM RESTAURANTS, INC.

By:
---------------------------------
Name:
Title:

-------------------------------------

<PAGE>
1997 STOCK OPTION PLAN
OF
TAM Restaurants, Inc.

1. Purpose
-------

TAM Restaurants, Inc. (the "Company") desires to attract and
retain the best available talent and encourage the highest level of performance
in order to continue to serve the best interests of the Company, and its
shareholder(s). By affording key personnel the opportunity to acquire
proprietary interests in the Company and by providing them incentives to put
forth maximum efforts for the success of the business, the 1997 Stock Option
Plan of TAM Restaurants, Inc. (the "1997 Plan") is expected to contribute to the
attainment of those objectives.

The word "Subsidiary" or "Subsidiaries" as used herein, shall
mean any corporation, fifty percent or more of the voting stock of which is
owned by the Company.

2. Scope and Duration
------------------

Options under the 1997 Plan may be granted in the form of
incentive stock options ("Incentive Options") as provided in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or in the form of
nonqualified stock options ("Non-Qualified Options"). (Unless otherwise
indicated, references in the 1997 Plan to "options" include Incentive Options
and Non-Qualified Options.) The maximum aggregate number of shares as to which
options may be granted from time to time under the 1997 Plan is 525,000 shares
of the Common Stock of the Company ("Common Stock"), which shares may be, in
whole or in part, authorized but unissued shares or shares reacquired by the
Company. The maximum number of shares with respect to which options may be
granted to any employee during the term of the Plan is 200,000. Except as
provided in paragraph 7(b) hereof, if an option shall expire, terminate or be
surrendered for cancellation for any reason without having been exercised in
full, the shares represented by the option or portion thereof not so exercised
shall (unless the 1997 Plan shall have been terminated) become available for
subsequent option grants under the 1997 Plan. As provided in paragraph 13, the
1997 Plan shall become effective on the date on which a registration statement
relating to an initial public offering of the Company's securities is declared
effective by the Securities and Exchange Commission (the "Effective Date"), and
unless terminated sooner pursuant to paragraph 14, the 1997 Plan shall terminate
on the tenth anniversary of the Effective Date, and no option shall be granted
hereunder after that date.

<PAGE>

3. Administration
--------------

The 1997 Plan shall be administered by the Board of Directors
of the Company, or, at their discretion, by a committee which is appointed by
the Board of Directors to perform such function (the "Committee"). The Committee
shall consist of not less than two members of the Board of Directors, each of
whom shall serve at the pleasure of the Board of Directors and shall be a
"Non-Employee Director" as defined in Rule l6b-3 pursuant to the Securities
Exchange Act of 1934 (the "Act"). Vacancies occurring in the membership of the
Committee shall be filled by appointment by the Board of Directors.

The Board of Directors or the Committee, as the case may be,
shall have plenary authority in its discretion, subject to and not inconsistent
with the express provisions of the 1997 Plan, to grant options, to determine the
purchase price of the Common Stock covered by each option, the term of each
option, the persons to whom, and the time or times at which, options shall be
granted and the number of shares to be covered by each option; to designate
options as Incentive Options or Non-Qualified Options; to interpret the 1997
Plan; to prescribe, amend and rescind rules and regulations relating to the 1997
Plan; to determine the terms and provisions of the option agreements (which need
not be identical) entered into in connection with options under the 1997 Plan;
and to make all other determinations deemed necessary or advisable for the
administration of the 1997 Plan. The Board of Directors or the Committee, as the
case may be, may delegate to one or more of its members or to one or more agents
such administrative duties as it may deem advisable, and the Board of Directors
or the Committee, as the case may be, or any person to whom it has delegated
duties as aforesaid may employ one or more persons to render advice with respect
to any responsibility the Board of Directors or the Committee, as the case may
be, or such person may have under the 1997 Plan.

4. Eligibility; Factors to be Considered in Granting
-------------------------------------------------
Options
-------

Incentive Options shall be limited to persons who are
employees of the Company or its present and future Subsidiaries and at the date
of grant of any option are in the employ of the Company or its present and
future Subsidiaries. In determining the employees to whom Incentive Options
shall be granted and the number of shares to be covered by each Incentive
Option, the Board of Directors or the Committee, as the case may be, shall take
into account the nature of employees' duties, their present and potential
contributions to the success of the Company and such other factors as it shall
deem relevant in connection with accomplishing the purposes of the 1997 Plan. An
employee who has

<PAGE>

been granted an option or options under the 1997 Plan may be granted an
additional option or options, subject, in the case of Incentive Options, to such
limitations as may be imposed by the Code on such options. Except as provided
below, a Non-Qualified Option may be granted to any person, including, but not
limited to, employees, independent agents, consultants and attorneys, who the
Board of Directors or the Committee, as the case may be, believes has
contributed, or will contribute, to the success of the Company.

5. Option Price
------------

The purchase price of the Common Stock covered by each option
shall be determined by the Board of Directors or the Committee, as the case may
be, shall not be less than 100% of the Fair Market Value (as defined in
paragraph 15 below) of a share of the Common Stock on the date on which the
option is granted. Such price shall be subject to adjustment as provided in
paragraph 12 below. The Board of Directors or the Committee, as the case may be,
shall determine the date on which an option is granted; in the absence of such a
determination, the date on which the Board of Directors or the Committee, as the
case may be, adopts a resolution granting an option shall be considered the date
on which such option is granted.

6. Term of Options
---------------

The term of each option shall be not more then ten years from
the date of grant, as the Board of Directors or the Committee, as the case may
be, shall determine (subject to paragraph 8(b) below), subject to earlier
termination as provided in paragraphs 10 and 11 below.

7. Exercise of Options
-------------------

(a) Subject to the provisions of the 1997 Plan and unless
otherwise provided in the option agreement, options granted under the 1997 Plan
shall become exercisable as determined by the Board of Directors or Committee.
In its discretion, the Board of Directors or the Committee, as the case may be,
may, in any case or cases, prescribe that options granted under the 1997 Plan
become exercisable in installments or provide that an option may be exercisable
in full immediately upon the date of its grant. The Board of Directors or the
Committee, as the case may be, may, in its sole discretion, also provide that an
option granted pursuant to the 1997 Plan shall immediately become exercisable in
full upon the happening of any of the following events; (i) the first purchase
of shares of Common Stock pursuant to a tender offer or exchange offer (other
than an offer by the Company) for all, or any part of, the Common Stock, (ii)
the approval by the shareholder(s) of the Company of an agreement for a merger
in which the Company

<PAGE>

will not survive as an independent, publicly owned corporation, a consolidation,
or a sale, exchange or other disposition of all or substantially all of the
Company's assets, (iii) with respect to an employee, on his 65th birthday, or
(iv) with respect to an employee, on the employee's involuntary termination from
employment, except as provided in Section 10 herein. In the event of a question
or controversy as to whether or not any of the events hereinabove described has
taken place, a determination by the Board of Directors or the Committee, as the
case may be, that such event has or has not occurred shall be conclusive and
binding upon the Company and participants in the 1997 Plan.

(b) Any option at any time granted under the 1997 Plan may
contain a provision to the effect that the optionee (or any persons entitled to
act under Paragraph 11 hereof) may, at any time at which Fair Market Value is in
excess of the exercise price and prior to exercising the option, in whole or in
part, request that the Company purchase all or any portion of the option as
shall then be exercisable at a price equal to the difference between (i) an
amount equal to the option price multiplied by the number of shares subject to
that portion of the option in respect of which such request shall be made and
(ii) an amount equal to such number of shares multiplied by the fair market
value of the Company's Common Stock (within the meaning of Section 422 of the
Code and the treasury regulations promulgated thereunder) on the date of
purchase. The Company shall have no obligation to make any purchase pursuant to
such request, but if it elects to do so, such portion of the option as to which
the request is made shall be surrendered to the Company. The purchase price for
the portion of the option to be so surrendered shall be paid by the Company,
less any applicable withholding tax obligations imposed upon the Company by
reason of the purchase, at the election of the Board of Directors or the
Committee, as the case may be, either in cash or in shares of Common Stock
(valued as of the date and in the manner provided in clause (ii) above), or in
any combination of cash and Common Stock, which may consist, in whole or in
part, of shares of authorized but unissued Common Stock or shares of Common
Stock held in the Company's treasury. No fractional share of Common Stock shall
be issued or transferred and any fractional share shall be disregarded. Shares
covered by that portion of any option purchased by the Company pursuant hereto
and surrendered to the Company shall not be available for the granting of
further options under the Plan. All determinations to be made by the Company
hereunder shall be made by the Board of Directors or the Committee, as the case
may be.

(c) An option may be exercised, at any time or from time to
time (subject, in the case of Incentive Options, to such restrictions as may be
imposed by the Code), as to any or all full shares as to which the option has
become exercisable until the

<PAGE>

expiration of the period set forth in Paragraph 6 hereof, by the delivery to the
Company, at its principal place of business, of (i) written notice of exercise
in the form specified by the Board of Directors or the Committee, as the case
may be, specifying the number of shares of Common Stock with respect to which
the option is being exercised and signed by the person exercising the option as
provided herein, (ii) payment of the purchase price; and (iii) in the case of
Non-Qualified Options, payment in cash of all withholding tax obligations
imposed on the Company by reason of the exercise of the option. Upon acceptance
of such notice, receipt of payment in full, and receipt of payment of all
withholding tax obligations, the Company shall cause to be issued a certificate
representing the shares of Common Stock purchased. In the event the person
exercising the option delivers the items specified in (i) and (ii) of this
Subsection (c), but not the item specified in (iii) hereof, if applicable, the
option shall still be considered exercised upon acceptance by the Company for
the full number of shares of Common Stock specified in the notice of exercise
but the actual number of shares issued shall be reduced by the smallest number
of whole shares of Common Stock which, when multiplied by the Fair Market Value
of the Common Stock as of the date the option is exercised, is sufficient to
satisfy the required amount of withholding tax.

(d) The purchase price of the shares as to which an option is
exercised shall be paid in full at the time of exercise. Payment shall be made
in cash, which may be paid by check or other instrument acceptable to the
Company; provided, however, that, subject to compliance with applicable laws and
regulations and such conditions as the Board of Directors or the Committee, as
the case may be, may impose, the Board of Directors or the Committee, as the
case may be, in its sole discretion, may on a case-by-case basis elect to accept
payment in shares of Common Stock of the Company which are already owned by the
option holder, valued at the Fair Market Value thereof (as defined in paragraph
15 below) on the date of exercise; provided, however, that with respect to
Incentive Options, no such discretion may be exercised unless the option
agreement permits the payment of the purchase price in that manner.

(e) Except as provided in paragraphs 10 and 11 below, no
option granted to an employee may be exercised at any time by such employee
unless such employee is then an employee of the Company or a Subsidiary.

8. Incentive Options
-----------------

(a) With respect to Incentive Options granted, the aggregate
Fair Market Value (determined in accordance with the provisions of paragraph 15
at the time the Incentive Option is granted) of the Common Stock or any other
stock of the Company or

<PAGE>

its current or future Subsidiaries with respect to which incentive stock
options, as defined in Section 422 of the Code, are exercisable for the first
time by any employee during any calendar year (under all incentive stock option
plans of the Company and its parent and subsidiary corporation's, as those terms
are defined in Section 424 of the Code) shall not exceed $100,000.

(b) No Incentive Option may be awarded to any employee who
immediately prior to the date of the granting of such Incentive Option owns more
than 10% of the combined voting power of all classes of stock of the Company or
any of its Subsidiaries unless the exercise price under the Incentive Option is
at least 110% of the Fair Market Value and the option expires within 5 years
from the date of grant.

(c) In the event of amendments to the Code or applicable
regulations relating to Incentive Options subsequent to the date hereof, the
Company may amend the provisions of the 1997 Plan, and the Company and the
employees holding options may agree to amend outstanding option agreements, to
conform to such amendments.

9. Non-Transferability of Options
------------------------------

Options granted under the 1997 Plan shall not be transferable
otherwise than by will or the laws of descent and distribution, and options may
be exercised during the lifetime of the optionee only by the optionee. No
transfer of an option by the optionee by will or by the laws of descent and
distribution shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and a copy of the will and such
other evidence as the Company may deem necessary to establish the validity of
the transfer and the acceptance by the transferor or transferees of the terms
and conditions of such option.

10. Termination of Employment
-------------------------

In the event that the employment of an employee to whom an
option has been granted under the 1997 Plan shall be terminated (except as set
forth in paragraph 11 below), such option may be, subject to the provisions of
the 1997 Plan, exercised (to the extent that the employee was entitled to do so
at the termination of his employment) at any time within three (3) months after
such termination, but not later than the date on which the option terminates;
provided, however, that any option which is held by an employee whose employment
is terminated for cause or voluntarily without the consent of the Company shall,
to the extent not theretofore exercised, automatically terminate as of the date
of termination of employment. As used herein, "cause" shall mean conduct
amounting to fraud, dishonesty, negligence, or engaging in competition or
solicitations in competition with the Company and

<PAGE>

breaches of any applicable employment agreement between the Company and the
optionee. Options granted to employees under the 1997 Plan shall not be affected
by any change of duties or position so long as the holder continues to be a
regular employee of the Company or any of its current or future Subsidiaries.
Any option agreement or any rules and regulations relating to the 1997 Plan may
contain such provisions as the Board of Directors or the Committee, as the case
may be, shall approve with reference to the determination of the date employment
terminates and the effect of leaves of absence. Nothing in the 1997 Plan or in
any option granted pursuant to the 1997 Plan shall confer upon any employee any
right to continue in the employ of the Company or any of its Subsidiaries or
parent or affiliated companies or interfere in any way with the right of the
Company or any such Subsidiary or parent or affiliated companies to terminate
such employment at any time.

11. Death or Disability of Employee
-------------------------------

If an employee to whom an option has been granted under the
1997 Plan shall die while employed by the Company or a Subsidiary or within one
(1) year after the termination of such employment (other than termination for
cause or voluntary termination without the consent of the Company), such option
may be exercised, to the extent exercisable by the employee on the date of
death, by a legatee or legatees of the employee under the employee's last will,
or by the employee's personal representative or distributees, at any time within
one year after the date of the employee's death, but not later than the date on
which the option terminates. In the event that the employment of an employee to
whom an option has been granted under the 1997 Plan shall be terminated as the
result of a disability, such option may be exercised, to the extent exercisable
by the employee on the date of such termination, at any time within one year
after the date of such termination, but not later than the date on which the
option terminates.

12. Adjustments Upon Changes in Capitalization, Etc.
-----------------------------------------------

Notwithstanding any other provision of the 1997 Plan, the
Board of Directors or the Committee, as the case may be, may, at any time, make
or provide for such adjustments to the 1997 Plan, to the number and class of
shares issuable thereunder or to any outstanding options as it shall deem
appropriate to prevent dilution or enlargement of rights, including adjustments
in the event of changes in the outstanding Common Stock by reason of stock
dividends, split-ups, recapitalizations, mergers, consolidations, combinations
or exchanges of shares, separations, reorganizations, liquidations and the like.
In the event of any offer to holders of Common Stock generally relating to the
acquisition of their shares, the Board of Directors or the Committee, as the
case may be, may

<PAGE>

make such adjustment as it deems equitable in respect of outstanding options and
rights, including in its discretion revision of outstanding options and rights
so that they may be exercisable for the consideration payable in the acquisition
transaction. Any such determination by the Board of Directors or the Committee,
as the case may be, shall be conclusive. Any fractional shares resulting from
such adjustments shall be eliminated.

13. Effective Date
--------------

The 1997 Plan shall become effective on October 6, 1997, the
date of adoption by the Board of Directors of the Company, subject to approval
by the shareholder(s) of the Company on or before October 6, 1997.

14. Termination and Amendment
-------------------------

The Board of Directors of the Company may suspend, terminate,
modify or amend the 1997 Plan, provided that any amendment that would increase
the aggregate number of shares which may be issued under the 1997 Plan,
materially increase the benefits accruing to participants under the 1997 Plan,
or materially modify the requirements as to eligibility for participation in the
1997 Plan, shall be subject to the approval of the Company's shareholder(s),
except that any such increase or modification that may result from adjustments
authorized by paragraph 12 does not require such approval. No suspension,
termination, modification or amendment of the 1997 Plan may, without the consent
of the employee to whom an option shall theretofore have been granted, effect
the rights of such employee under such option.

15. Miscellaneous
-------------

As said term is used in the 1997 Plan, the "Fair Market Value"
of a share of Common Stock on any day means: (a) if the principal market for the
Common Stock is a national securities exchange or the National Association of
Securities Dealers Automated Quotations System ("NASDAQ), the closing sales
price of the Common Stock on such day as reported by such exchange or market
system, or on a consolidated tape reflecting transactions on such exchange or
market system, or (b) if the principal market for the Common Stock is not a
national securities exchange and the Common Stock is not quoted on NASDAQ, the
mean between the highest bid and lowest asked prices for the Common Stock on
such day as reported by the National Quotation Bureau, Inc.; provided that if
clauses (a) and (b) of this paragraph are both inapplicable, or if no trades
have been made or no quotes are available for such day, the Fair Market Value of
the Common Stock shall be determined by the Board

<PAGE>

of Directors or the Committee, as the case may be, shall be conclusive as to the
Fair Market Value of the Common Stock.

The Board of Directors or the Committee, as the case may be,
may require, as a condition to the exercise of any options granted under the
1997 Plan, that to the extent required at the time of exercise, (i) the shares
of Common Stock reserved for purposes of the 1997 Plan shall be duly listed,
upon official notice of issuance, upon stock exchange(s) on which the Common
Stock is listed, (ii) a Registration Statement under the Securities Act of 1933,
as amended, with respect to such shares shall be effective, and/or (iii) the
person exercising such option deliver to the Company such documents, agreements
and investment and other representations as the Board of Directors or the
Committee, as the case may be, shall determine to be in the best interests of
the Company.

During the term of the 1997 Plan, the Board of Directors or
the Committee, as the case may be, in its discretion, may offer one or more
option holders the opportunity to surrender any or all unexpired options for
cancellation or replacement. If any options are so surrendered, the Board of
Directors or the Committee, as the case may be, may then grant new Non-Qualified
or Incentive Options to such holders for the same or different numbers of shares
at higher or lower exercise prices than the surrendered options. Such new
options may have a different term and shall be subject to the provisions of the
1997 Plan the same as any other option.

Anything herein to the contrary notwithstanding, the Board of
Directors or the Committee, as the case may be, may, in their sole discretion,
impose more restrictive conditions on the exercise of an option granted pursuant
to the 1997 Plan; however, any and all such conditions shall be specified in the
option agreement limiting and defining such option.

16. Compliance with SEC Regulations.
-------------------------------

It is the Company's intent that the 1997 Plan comply in all
respects with Rule 16b-3 of the Act and any regulations promulgated thereunder.
If any provision of the 1997 Plan is later found not to be in compliance with
said Rule, the provisions shall be deemed null and void. All grants and
exercises of Incentive Options under the 1997 Plan shall be executed in
accordance with the requirements of Section 16 of the Act, as amended, and any
regulations promulgated thereunder.

<PAGE>

TAM Restaurant Holding Corp.
1163 Forest Avenue
Staten Island, New York 10310

Promissory Note

$720,405.10 Date: Oct 15, 1997

TAM Restaurant Holding Corp. promises to pay to the order of Frank Cretella the
sum of Seven Hundred Twenty Thousand Four Hundred and Five Dollars and ten cents
payable at 1163 Forest Avenue, Staten Island, New York 10310. For the value
received plus interest at ten percent (10%) per annum.

The $720,405.10 value of this note combines the replacement of a note in the
amount $140,000.00 issued to Mr. Cretella on August 14, 1997, and an additional
loan of $580,405.10 made on October 15, 1997. All of the funds connected with
this transaction were used to pay off and fully satisfy TAM Restaurant Holding
Corp.'s outstanding loans with Fleet Bank (Account #'s 3587, 5080, 5202, 10697
and 12067).

Interest only payments will be made monthly, on or before the 15th of each
month, in the amount of Six Thousand Three Dollars and thirty seven cents
($6,003.37) with the initial payment due November 15, 1997. This note will
expire and the full principal value of $720,405.10 will be due and payable on
November 15, 2002.

/s/ Anthony B. Golio
-------------------------
Anthony B. Golio
as Vice President

Witness:

/s/ Unintelligible
- ----------------------
Due: November 15, 2002

<PAGE>

EXHIBIT 23.1.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

TAM Restaurants, Inc. and Subsidiaries
Staten Island, New York

We hereby consent to the use in the Prospectus constituting a part of this
Registration Statement of our report dated December 18, 1997, relating to the
consolidated financial statements of TAM Restaurants, Inc. and Subsidiaries,
which is contained in that Prospectus.

We also consent to the reference to us under the captions "Expert" and "Change
in Independent Auditors" in the Prospectus.

BDO Seidman, LLP

/s/ BDO Seidman, LLP
- -----------------------

New York, NY
January 13, 1998

<PAGE>

EXHIBIT 23.1.2

Maltese, Potter
& LaMarca LLP LOGO
Certified Public Accountants

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

TAM Restaurants, Inc. and Subsidiaries

We hereby consent to the incorporation by reference of the Prospectus
constituting a part of this Registration Statement on Form SB-2 (No. 333-39937)
of our report dated July 31, 1997 relating to the consolidated financial
statements of TAM Restaurants, Inc. and Subsidiaries which is contained in that
Prospectus. Our report contains an explanatory paragraph regarding uncertainties
as to the Company's ability to continue as a going concern.

We also consent to the reference to us under the caption "Selected Financial
Data" and "Experts" in the Prospectus.

/s/ Maltese, Potter & LaMarca LLP
- ---------------------------------
MALTESE, POTTER & LA MARCA LLP

New York, New York
January 13, 1998

<PAGE>
CONSENT OF PETER SALVATORE

I, Peter Salvatore, consent to the reference made to me as a person to
be appointed a Director of TAM Restaurants, Inc., under the caption "Management"
in the Prospectus included in the Registration Statement on Form SB-2 of TAM
Restaurants, Inc.

New York, New York
December 30, 1997

/s/ Peter Salvatore
-------------------
Peter Salvatore

<PAGE>

CONSENT OF BARRY KRANTZ

I consent to the reference to me as a person to be appointed a
Director of TAM RESTAURANTS, INC., under the caption "Management" in the
Prospectus included in the Registration Statement on Form SB-2 of TAM
RESTAURANTS, INC.

New York, New York
December 19, 1997

/s/ Barry Krantz
- ----------------
Barry Krantz

<PAGE>

CONSENT OF LORENZO VANORE

I consent to the reference to me as a person to be appointed an
Officer of TAM RESTAURANTS, INC., under the caption "Management" in the
Prospectus included in the Registration Statement on Form SB-2 of TAM
RESTAURANTS, INC.

New York, New York
January 8, 1998

/s/ Lorenzo Vanore
- ------------------
Lorenzo Vanore

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<NAME> TAM RESTAURANTS, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-28-1997
<PERIOD-START> SEP-30-1996
<PERIOD-END> SEP-28-1997
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<RECEIVABLES> 287,368
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</TABLE>