Chicago Pizza & Brewery Inc. Thursday announced that BJ Chicago, LLC (``LLC''), has signed an agreement to acquire 2,206,500 shares of common stock of the company from ASSI, Inc. and Louis Habash, representing approximately 28 percent of the company's outstanding common stock, for a purchase price of $4.00 per share.

The acquiring entity is a newly-formed company which is an affiliate of The Jacmar Companies (``Jacmar''). Jacmar is a privately held company which operates a specialty wholesale foodservice distributor serving Central and Southern California and various restaurants, performs property management services and makes investments. Jacmar is the company's largest restaurant supplier.

Prior to this acquisition, Jacmar had recently acquired ownership of more than 15 percent of the company's common stock through open market purchases.

In connection with the transaction, Paul Motenko and Jerry Hennessy, the co-chief executive officers of the company, have agreed to sell to LLC an aggregate of 661,358 shares of the company's common stock, representing an aggregate of eight percent of the total outstanding shares of the company and one-half of the shares owned by each of the co-chief executive officers, at a purchase price of $2.75 per share.

As a result of these transactions, Jacmar and its affiliates will own approximately 51 percent of the company's common stock.

In connection with its purchase of shares, LLC has committed to obtaining replacement financing for the company's current bank debt of approximately $4.8 million, and additional financing of up to $1.2 million for new restaurant projects, subject to LLC's reasonable prior approval.

Also in connection with the sale of stock by ASSI, two directors of the company nominated by ASSI, Mark James and Allyn Burroughs have resigned effective Thursday. The vacancies left by these resignations are expected to be filled sometime within the next two weeks.

Motenko and Hennessy, in reporting the acquisition of shares by LLC, stated that, ``We are very pleased to have Jacmar and LLC become major shareholders in the company. Jacmar's depth of experience in the restaurant industry, and its access to financing, will provide the company with a strong basis for continuing its growth through the opening of new restaurants and breweries in our target market areas. We are also grateful for the past support which ASSI, Mark James and Allyn Burroughs have provided to the company in the past, and wish to acknowledge their contribution to the company's current success and profitability. We hope and believe that the company will continue its success with the support of Jacmar and its affiliates.''

As a result of the prior purchase by Jacmar of more than 15 percent of the company's common stock, certain change in control provisions of the employment agreements of the company with each of Motenko, Hennessy and Ernest Klinger, chief financial officer of the company, were triggered, which gives each of them the right to terminate their contracts and receive compensation for the full remaining term of their contract. Motenko and Hennessy have waived the right to terminate their employment agreements, and the company has entered into new employment agreements with each of them substantially identical to their prior agreements, except that: the term of their employment has been extended from March 26, 2004 to Dec. 31, 2006; the base salary has been increased from $150,000 to $225,000 per year; and the company has agreed to grant options to each executive exercisable for a number of shares equal to the number of shares of common stock of the company sold by each executive to LLC, at a purchase price of $2.75 per share, subject to prior shareholder approval or, if such approval is not obtained before Dec. 31, 2001, the executive's base salary will be increased by $170,000 per year in lieu of the options. Klinger has not waived his right to terminate his employment agreement, and is currently in discussions with the company regarding this matter.

Also in connection with the sale of shares by ASSI to LLC, the company requested and received a release from any claims by ASSI or Habash as a result of any prior agreements, negotiations or otherwise. As consideration for the release, the company issued a five-year term option to ASSI exercisable for 200,000 shares of common stock of the company at a purchase price of $4.00 per share.

The company's transactions with LLC, ASSI and Habash, and Motenko and Hennessy, as described herein, were approved by an independent committee of the board of directors.

Chicago Pizza & Brewery Inc. operates 30 casual dining restaurants, some of which incorporate brewpubs. Fifteen of the restaurants are located in Southern California, one is located in Lahaina, Maui and one is located in Boulder, Colo. The company operates six BJ's restaurants and seven Pietro's restaurants in Oregon. BJ's restaurants offer customers a moderately priced menu that includes deep-dish Chicago-style pizza as well as sandwiches, salads, fabulous desserts, critically acclaimed hand-crafted beers and more. Visit Chicago Pizza & Brewery Inc. on the Web at http://www.bjsbrewhouse.com.

The information presented herein contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, which are intended to be covered by the safe harbors created thereby. The company's results may differ significantly from the results indicated by such forward-looking statements. Factors that might cause such differences include, but are not limited to: (i) the company's ability to manage growth and conversions, (ii) construction delays, (iii) restaurant and brewery industry competition and other such industry considerations, (iv) marketing and other limitations based on the company's concentration in Southern California and the the Northwest, (v) consumer trends, (vi) increased food costs and wages, including, without limitation, the recent increase in the minimum wage, and (vii) other general economic and regulatory conditions, as more fully described in the company's reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934.