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<SEC-DOCUMENT>0000910680-04-001113.txt : 20041025
<SEC-HEADER>0000910680-04-001113.hdr.sgml : 20041025
<ACCEPTANCE-DATETIME>20041025145051
ACCESSION NUMBER:		0000910680-04-001113
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20041119
FILED AS OF DATE:		20041025
DATE AS OF CHANGE:		20041025
EFFECTIVENESS DATE:		20041025

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DRYCLEAN USA INC
		CENTRAL INDEX KEY:			0000065312
		STANDARD INDUSTRIAL CLASSIFICATION:	TELEPHONE & TELEGRAPH APPARATUS [3661]
		IRS NUMBER:				112014231
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-14757
		FILM NUMBER:		041093805

	BUSINESS ADDRESS:	
		STREET 1:		290 NE 68 STREET
		CITY:			MIAMI
		STATE:			FL
		ZIP:			33138
		BUSINESS PHONE:		3057544551

	MAIL ADDRESS:	
		STREET 1:		290 NE 68 STREET
		CITY:			MIAMI
		STATE:			FL
		ZIP:			33138

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	METRO TEL CORP
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>def14a111904.txt
<DESCRIPTION>DEFINITIVE PROXY STATEMENT
<TEXT>

                            SCHEDULE 14A INFORMATION

                Proxy Statement Pursuant to Section 14(a) of the
                        Securities Exchange Act of 1934

Filed by the Registrant [X]

Filed by a party other than the Registrant [   ]

Check the appropriate box:

[ ]      Preliminary Proxy Statement
[ ]      Confidential,  for Use of the  Commission  Only (as  permitted  by Rule
         14a-6(e)(2))
[X]      Definitive Proxy Statement
[ ]      Definitive Additional Materials
[ ]      Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12

                               DRYCLEAN USA, Inc.
                (Name of Registrant as Specified in Its Charter)

    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X]      No fee required

[ ]      Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

         1)       Title  of  each  class  of  securities  to  which  transaction
                  applies:

         2)       Aggregate number of securities to which transaction applies:

         3)       Per  unit  price  or other  underlying  value  of  transaction
                  computed  pursuant  to  Exchange  Act Rule 0-11 (Set forth the
                  amount on which the filing fee is calculated  and state how it
                  was determined):

         4)       Proposed maximum aggregate value of transaction:

         5)       Total fee paid:

[ ]      Fee paid previously with preliminary materials.

[ ]      Check box if any part of the fee is offset as provided by Exchange  Act
         Rule  0-11(a)(2)  and identify the filing for which the  offsetting fee
         was paid  previously.  Identify  the  previous  filing by  registration
         statement number, or the Form or Schedule and the date of its filing.

         1)       Amount Previously Paid:

         2)       Form, Schedule or Registration Statement No.:

         3)       Filing Party:

         4)       Date Filed:


<PAGE>


                               DRYCLEAN USA, Inc.
                              290 N.E. 68th Street
                              Miami, Florida 33138

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

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                         TO BE HELD ON NOVEMBER 19, 2004

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

                                                                  Miami, Florida
                                                                October 25, 2004
To the Stockholders of
DRYCLEAN USA, Inc.:

         NOTICE IS HEREBY GIVEN that the 2004 Annual Meeting of  Stockholders of
DRYCLEAN USA,  Inc., a Delaware  corporation  (the  "Company"),  will be held on
Friday,  November 19, 2004, at 11:00 A.M., Eastern standard time, at the offices
of the Company and the Company's  subsidiary,  Steiner-Atlantic  Corp., 290 N.E.
68th Street,  Miami, Florida, for the purpose of considering and acting upon the
following matters:

         (1) The election of seven (7)  directors to serve until the next annual
meeting  of  stockholders  and until the  election  and  qualification  of their
respective successors; and

         (2) The  transaction  of such other business as may properly be brought
before the meeting or any adjournments or postponements thereof.

         The Board of  Directors  has fixed the close of  business on October 8,
2003 as the record date for the determination of stockholders entitled to notice
of, and to vote at, the meeting.

                                    By Order of the Board of Directors,

                                             Lloyd Frank,
                                               Secretary

The return of your signed proxy as promptly as possible will greatly  facilitate
arrangements for the meeting. No postage is required if the proxy is returned in
the enclosed envelope and mailed in the United States.


<PAGE>


                               DRYCLEAN USA, Inc.
                              290 N.E. 68th Street
                              Miami, Florida 33138

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

                                 PROXY STATEMENT
                       For Annual Meeting of Stockholders
                         To be Held on November 19, 2004
                                ----------------

                                  INTRODUCTION

         This Proxy Statement,  to be mailed to stockholders on or about October
25, 2004,  is  furnished in  connection  with the  solicitation  by the Board of
Directors of DRYCLEAN USA,  Inc., a Delaware  corporation  (the  "Company"),  of
proxies in the accompanying  form (the "Proxy" or "Proxies") for use at the 2004
Annual  Meeting of  Stockholders  of the Company (the  "Meeting")  to be held on
Friday, November 19, 2004, and at any adjournments or postponements thereof. The
Meeting will be held at the place and time stated in the notice attached hereto.

         All Proxies  properly and timely  received  will be voted in accordance
with the  specifications  made thereon or, in the absence of any  specification,
for the election of all of the nominees named herein to serve as directors.  Any
Proxy given pursuant to this solicitation may be revoked by the person giving it
provided  such notice or new proxy is received  before the vote by (i) notice in
writing or by a later  dated  proxy  received  by the  Company at 290 N.E.  68th
Street, Miami, Florida 33138, Attention:  President, or (ii) by voting in person
at the Meeting.

         Only  holders of record of the  Company's  Common  Stock  (the  "Common
Stock") as of the close of business on October 8, 2004 (the  "Record  Date") are
entitled  to notice  of,  and to vote at, the  Meeting  or any  adjournments  or
postponements  thereof for which a new record date is not fixed. As of the close
of business on the Record  Date,  there were  issued and  outstanding  7,024,450
shares of Common Stock. Stockholders whose Common Stock is held in "street name"
(that is, whose shares are held by, and  registered  in the name of, a broker or
other  nominee) who wish to vote at the Meeting will need to obtain a proxy form
from the institution that holds their shares and follow the voting  instructions
on that form.

         The presence,  in person or represented by proxy,  of a majority of the
outstanding  Common  Stock  will  constitute  a quorum  for the  transaction  of
business at the Meeting. Brokers that are members of the New York Stock Exchange
have  discretion  to vote the shares of their  clients  that the broker holds in
street name for its  customers but as to which the broker has received no voting
direction from the beneficial  owner of the shares with respect to non-contested
elections of  directors  and certain  other  matters.  Brokers  are,  therefore,
expected to vote such shares on the election of directors.  If a broker, nominee
or other  fiduciary  holding shares in "street name" votes some, but not all, of
the shares held by it as record owned for one or more beneficial owner of shares
on one or more  matters,  the  shares  not  voted by it on a matter  are  called
"broker  non-votes."  Proxies  submitted  which  contain  abstentions  or broker
non-votes will be deemed present at the Meeting for  determining the presence of
a quorum.

         Each share of Common  Stock held as of the Record  Date is  entitled to
one vote on each  matter to be acted upon at the  Meeting.  A  plurality  of the
votes (that is, the seven persons  receiving the highest  number of  affirmative
votes) of the shares  present in person or  represented  by proxy at the Meeting
and  entitled to vote on the  election  of  directors  will be required  for the
election of  directors.  Accordingly,  shares as to which  authority  to vote is
withheld from Proxies,  abstentions

<PAGE>

and  broker  non-votes  will have no effect  on the  outcome  of the vote on the
election  of  directors.  While the Company  knows of no matters  other than the
election of directors to be brought  before the Meeting  (see  "Miscellaneous  -
Other  Matters"),  if any other  matters are brought  before the Meeting,  under
Delaware  law  approval  thereof  will  require the  affirmative  vote of either
(depending  on the nature of the matter) a majority of the Common Stock  present
in person or  represented  by proxy at the Meeting  and  entitled to vote on the
subject  matter  or a  majority  of all  outstanding  shares  of  Common  Stock.
Abstentions will have the effect of a negative vote on all such matters.  Broker
non-votes  will have no effect on the outcome of the vote on a matter  requiring
approval  by a majority of those  entitled to vote on the matter,  but will have
the effect of a negative vote on any matter requiring  approval by a majority of
all outstanding shares of Common Stock.

                         OWNERSHIP OF CERTAIN BENEFICIAL
                              OWNERS AND MANAGEMENT

         The following table sets forth  information,  as at September 30, 2004,
with  respect to the shares of Common Stock that are  beneficially  owned by (i)
any person  (including any "group," as that term is used in Section  13(d)(3) of
the  Securities  Exchange  Act of 1934)  who is known to the  Company  to be the
beneficial owner of more than five percent of the Company's  outstanding  Common
Stock,  (ii)  the  executive  officers  of the  Company  named  in  the  Summary
Compensation Table under the caption "Executive Compensation," below, (iii) each
director  and  nominee  to  serve  as a  director  of the  Company  and (iv) all
executive officers and directors of the Company as a group:

<TABLE>
<CAPTION>
                                                     Amount and
                                                     Nature of
                                                     Beneficial                  Percent
         Beneficial Owner                            Ownership (1)              of Class (2)
         ----------------                            -------------              ------------
<S>                                                   <C>                         <C>
         William K. Steiner                           1,550,977                   22.1% (3)
         290 N.E. 68th Street
         Miami, FL  33138

         Alan I. Greenstein                           1,518,200                   21.6% (3)
         290 N.E. 68th Street
         Miami, FL  33138

         Michael S. Steiner                           1,510,577                   21.5% (3)
         290 N.E. 68th Street
         Miami, FL  33138

         Venerando J. Indelicato                        304,937  (4)                4.3%

         David Blyer                                     10,000  (5)                 *

         Lloyd Frank                                     34,119  (6)                 *

         Alan M. Grunspan                                21,500  (7)                 *

         Stuart Wagner                                   15,000  (8)                 *

         Executive officers and                        4,965,310 (9)               70.4%
         directors as a group
         (7 persons)
</TABLE>

- ---------------------------
Footnotes appear on the following page.


                                      -2-
<PAGE>

(1)      Except as noted in the  following  footnotes,  all  beneficially  owned
         shares are owned with sole voting and investment power.

(2)      Asterisk indicates less than one percent.

(3)      See  "Stockholders  Agreement,"  below,  for  information  regarding  a
         Stockholders  Agreement entered into among William K. Steiner,  Michael
         S. Steiner and Alan I. Greenstein pursuant to which they have agreed to
         vote  an  aggregate  of  4,520,954  shares  (64.4%)  of  the  Company's
         outstanding  Common Stock for the election of those persons  designated
         between them as the directors of the Company.  As a result,  and giving
         effect to the  additional  shares owned by each that are not subject to
         the  Stockholders  Agreement,  Messrs.  William K. Steiner,  Michael S.
         Steiner  and Alan I.  Greenstein  may be,  deemed to be the  beneficial
         owners of 4,561,454  (64.9%),  4,521,054 (64.5%) and 4,539,154 (64.7%),
         respectively,  of the Company's Common Stock, of which 40,500,  100 and
         18,200 shares of the Company's Common Stock, respectively,  are held by
         them with sole  voting  power and, in each case,  4,520,954  shares are
         held with shared voting power.  Each has sole dispositive  power of all
         of the shares reflected as beneficially owned by him in the table.

(4)      Includes (a) 163,718 shares (2.3% of the Company's  outstanding  Common
         Stock) owned by Mr.  Indelicato and his wife as  co-trustees  under his
         living  trust  under  which  the  sole  lifetime   beneficiary  is  Mr.
         Indelicato  and (b) 141,219  shares (2.0% of the Company's  outstanding
         Common Stock) owned by Mr. Indelicato and his wife as co-trustees under
         the living trust of Mr. Indelicato's wife under which the sole lifetime
         beneficiary  is  Mr.   Indelicato's  wife.  Mr.  Indelicato   disclaims
         beneficial ownership of the shares owned by his wife's living trust.

(5)      Represents  shares which are not  outstanding  but which are subject to
         issuance  upon  the  exercise  of a  stock  option  that  is  presently
         exercisable in full.

(6)      Includes 21,494 shares owned by Mr. Frank's wife, as to which Mr. Frank
         disclaims beneficial ownership.

(7)      Includes  10,000 shares which are not outstanding but which are subject
         to  issuance  upon the  exercise of a stock  option  that is  presently
         exercisable in full.

(8)      Represents (a) 5,000 shares owned by Mr. Wagner's wife, as to which Mr.
         Wagner disclaims beneficial ownership,  and (b) 10,000 shares which are
         not  outstanding but which are subject to issuance upon the exercise of
         a stock option that is presently exercisable in full.

(9)      Includes (a) 26,494 shares owned by spouses of  directors,  as to which
         such directors  disclaim  beneficial  ownership,  and (b) 30,000 shares
         which are not  outstanding  but which are subject to issuance  upon the
         exercise of stock options that are presently exercisable in full.

Stockholders Agreement

         On July 22, 2004,  Alan I. Greenstein  purchased  750,000 shares of the
Company's  Common Stock from each of William K. Steiner and Michael S.  Steiner.
Contemporaneously   therewith,   these  three   stockholders   entered   into  a
Stockholders Agreement (the "Stockholders  Agreement") pursuant to which William
K. and Michael S. Steiner  (together with any transferees to whom either of them
transfers  Shares, as defined below, to the extent of the Shares so transferred,
collectively,  the "Steiner Family  Stockholders") and Mr. Greenstein  (together
with any transferee to whom he transfers  Shares, to the extent of the Shares so
transferred, collectively, the "Greenstein Stockholders") have agreed, except to
the extent  otherwise  agreed from time to time by (a) the holders of a majority
of the  Shares  held by the  Greenstein  Stockholders  and (b) the  holders of a
majority  of the Shares  held by the Steiner  Family  Stockholders,  to vote the
1,510,477,  1,510,477  and  1,500,000  shares  of the

                                      -3-
<PAGE>

Company's'  Common Stock currently own of record by William K. Steiner,  Michael
S. Steiner and Mr.  Greenstein,  respectively  (collectively  the "Shares"),  to
elect as  directors  of the Company  (x) one  designee as may be selected by the
holders of a majority of the Shares held by the Greenstein  Stockholders and (y)
such other  designees  as may be  selected  by the  holders of a majority of the
Shares  held by the  Steiner  Family  Stockholders.  Should any  designee of the
Greenstein Stockholders or the Steiner Family Stockholders resign, determine not
to seek re-election to the Company's Board of Directors, be removed from office,
die, become  incapacitated  or otherwise cease to serve on the Board, and should
such  designee not be replaced by the Board with the a designee  recommended  to
the Board by the  stockholder  group who designated the director being replaced,
or should such designee's term of office expire, the parties to the Stockholders
Agreement  are to take all such action as may be permitted  under the  Company's
Certificate of  Incorporation  or By-laws and laws of its state of incorporation
to promptly call a special or other meeting of  stockholders  of the Company and
vote,  or execute a written  consent,  to elect as the  successor to such former
director a person  designated by the holders of a majority of the Shares held by
the  stockholder  group  whose  designee  is to be  replaced.  The  Stockholders
Agreement  is to terminate on the earliest to occur of (i) the date agreed to in
writing  by the  owners of  record  of a  majority  of the  Shares  and (ii) the
liquidation   of  the  Company  or  the  Company's   merger  with,  or  sale  of
substantially  all of its assets to, or  another  change in control  transaction
with, another entity that is approved by the Board,  following which transaction
or series of transactions the stockholders of the Company  immediately  prior to
the  first  of such  transactions  do not own more  than 50% of the  outstanding
voting power of the resulting  entity at the effective  date of the last of such
transactions. The slate of nominees proposed in this Proxy Statement to serve as
directors  was  approved by each of William K.  Steiner,  Michael S. Steiner and
Alan I. Greenstein.


                              ELECTION OF DIRECTORS

         Unless  otherwise  directed,  the persons  named in the enclosed  Proxy
intend to cast all votes  pursuant  to  Proxies  received  for the  election  of
Messrs. Michael S. Steiner, William K. Steiner,  Venerando J. Indelicato,  David
Blyer,  Lloyd Frank,  Alan M.  Grunspan and Stuart  Wagner (said  persons  being
hereinafter referred to as the "nominees") as directors upon their nomination at
the Meeting.  Directors  elected at the Meeting will serve until the next Annual
Meeting of Stockholders  and until their  respective  successors are elected and
qualified.  All nominees  were elected by  stockholders  at the  Company's  2003
Annual Meeting of Stockholders.

         In the event that any of the  nominees  should  become  unavailable  to
serve as a director for any reason,  the holders of Proxies  have  discretionary
authority to vote for one or more  alternate  nominees who may be  designated by
the Board of  Directors.  The  Company  believes  that all of the  nominees  are
available to serve as directors.

Background of Nominees

         Michael S. Steiner, 48, has been President, Chief Executive Officer and
a  director  of  the  Company   since  the   effectiveness   of  the  merger  of
Steiner-Atlantic  Corp. ("Steiner") with and into a subsidiary of the Company on
November 1, 1998 (the  "Merger") and President  and Chief  Executive  Officer of
Steiner since 1988.

         William K.  Steiner,  74, has been Chairman of the Board and a director
of the  Company  since the  effectiveness  of the Merger on November 1, 1998 and
Chairman of the Board of Steiner since he founded Steiner in 1960.

         Venerando J. Indelicato, 71, was President of the Company from December
1967 until the  effectiveness  of the Merger on  November 1, 1998 and since that
time  has been  Treasurer  and  Chief  Financial  Officer  of the  Company.  Mr.
Indelicato has been a director of the Company since 1966.

                                      -4-
<PAGE>

         David  Blyer,  44, has served as a director  of the  Company  since the
effectiveness  of the Merger on November 1, 1998. Mr. Blyer was Chief  Executive
Officer and President of Vento Software, a developer of software for specialized
business  applications,  from  1994,  when he  co-founded  that  company,  until
mid-2002. Since that time, Mr. Blyer has been an independent consultant.

         Lloyd  Frank,  79, has been a director of the Company  since 1977.  Mr.
Frank was a member of Jenkens & Gilchrist  Parker Chapin LLP and its predecessor
from 1977 until the end of 2003 and has been counsel to that firm since  January
2004.  The Company  retained  Jenkens & Gilchrist  Parker  Chapin LLP during the
Company's  last fiscal  year and is  retaining  that firm  during the  Company's
current fiscal year. Mr. Frank is also a director of Park Electrochemical  Corp.
and Volt Information Sciences, Inc.

         Alan M. Grunspan, 44, has served as a director of the Company since May
1999.  Mr.  Grunspan  has been a member of the law firm of Kaufman  Dickstein  &
Grunspan P.A. since 1991.

         Stuart  Wagner,  72, has served as a director of the Company  since the
effectiveness  of the Merger on November 1, 1998.  From 1975 to 1997, Mr. Wagner
served as President of Wagner Products Corp., a manufacturer  and distributor of
products  in the HVAC  industry,  a company  which he  founded,  and served as a
consultant to Diversified Corp., which acquired Wagner Products Corp., from 1997
until 1999.

         Michael S. Steiner is the son of William K. Steiner. There are no other
family  relationships  among any of the directors and executive  officers of the
Company.  All directors serve until the next annual meeting of stockholders  and
until  the  election  and  qualification  of their  respective  successors.  All
officers serve at the pleasure of the Board of Directors.

Directors' Independence

         The Board of Directors has  determined  that David Blyer,  Lloyd Frank,
Alan  Grunspan  and  Stuart  Wager  (constituting  a  majority  of the  Board of
Directors) are "independent directors" pursuant to Section 121A of the standards
for listing of the American Stock Exchange LLC ("AMEX"),  on which the Company's
Common Stock is listed.  In reaching its conclusion,  the Board  determined that
these  individuals  do not have a material  relationship  with the Company  that
would interfere with their exercise of independent judgment, and do not have any
of the specific  relationships  set forth in that Section that would  disqualify
them from being considered independent directors.

Controlled Company

         As a result of the Stockholders Agreement,  Messrs. William K. Steiner,
Michael S. Steiner and Alan I.  Greenstein  are a group with shared voting power
over an aggregate of 64.4% of the Company's Common Stock. They own an additional
..8% of the  Company's  Common  Stock  which is not  subject to the  Stockholders
Agreement.  Accordingly, the Company is a "controlled company" under the listing
standards  of AMEX.  Therefore,  the  Company  is not  subject  to AMEX's  rules
otherwise  requiring  companies  like the  Company to have a Board of  Directors
consisting of at least 50% "independent  directors," governing the determination
of executive compensation and governing the nomination of directors. The Company
has, however,  voluntarily complied with AMEX's minimum independent director and
executive compensation determination rules.

                                      -5-
<PAGE>

Meetings of the Board of Directors

         During the  Company's  fiscal  year ended June 30,  2004,  its Board of
Directors held five meetings. Each director attended each of the meetings of the
Board of Directors  and the  committees on which he served that were held during
that fiscal year.

         It is the Company's policy that, absent extenuating circumstances,  all
members of the Board of Directors  attend  meetings of  stockholders.  All seven
members of the Board attended the Company's 2003 Annual Meeting of Stockholders.

Committees of the Board

         The Board of Directors has standing Audit and Compensation  Committees.
The Board does not have a standing Nominating Committee.

         The Board's Audit  Committee  consists of Alan M. Grunspan  (Chairman),
David Blyer and Stuart Wagner.  The Audit Committee  provides  assistance to the
Company's   Board   of   Directors   in   fulfilling   the   Board's   oversight
responsibilities.  The Audit Committee  operates under a written charter adopted
by the Board of Directors,  which the Committee annually reviews,  assesses and,
with respect to which,  if it deems it  appropriate,  recommends  changes to the
Board.  A copy of the  Audit  Committee's  charter  is  attached  to this  Proxy
Statement as Appendix "A." Under its charter,  the Audit Committee  serves as an
independent  and  objective  party  to  monitor  the  Company's   financial  and
accounting reporting process and internal control system;  reviews and appraises
the performance,  qualifications  and independence of the Company's  independent
auditor;  and  provides  an open  avenue of  communication  among the  Company's
independent auditor,  financial and senior management and the Board. Among other
things,  the Audit Committee  reviews the financial  reports and other financial
information  provided by the Company to the Securities  and Exchange  Commission
and the public;  the Company's systems of internal  controls;  and the Company's
auditing,  accounting and financial  reporting  processes  generally.  The Audit
Committee also is responsible for the appointment and retention of, and oversees
the work of, the Company's independent auditor, confirms the independence of the
independent  auditor and approves the fees and other  compensation to be paid to
the  independent  auditors.  A report of the Audit  Committee  appears under the
caption "Audit Committee  Report," below. The Audit Committee held five meetings
during the year ended June 30, 2004.

         The Board of Directors  has  concluded  that each of the members of the
Audit Committee is an "independent director" under Section 121A of the standards
for listing of the AMEX, as well as Rule 10A-3 promulgated by the Securities and
Exchange  Commission (the "SEC") under the Securities  Exchange Act of 1934, and
is able to read and understand  fundamental  financial  statements,  including a
company's balance sheet, income statement and cash flow statement.  The Board of
Directors has concluded that Stuart Wagner, a member of the Audit Committee,  is
an "audit  committee  financial  expert,"  within the  meaning of Item 401(h) of
Regulation S-K promulgated by the SEC, and is independent.

         The members of the Compensation  Committee are David Blyer, Lloyd Frank
and Stuart Wagner,  each of whom are "independent  directors" under Section 121A
of the  AMEX  listing  standards  for  purposes  of  sitting  on  the  Company's
Compensation  Committee.  This  Committee  determines  the  compensation  of all
executive  officers,  administers  the  Company's  employee  stock  option plans
(including  granting options),  approves changes in the Company's Section 401(k)
profit  sharing  plan  and  reviews  the  Company's   other   employee   benefit
arrangements.  The  Company's  Chief  Executive  Officer is not  permitted to be
present during the deliberations or voting on his compensation. The Compensation
Committee did not meet during the year ended June 30, 2004.

                                      -6-
<PAGE>

Director Nomination Process

         As a "controlled  company" under AMEX's listing standards,  the Company
is not  required  to cause  nominees  to serve as  directors  to be  selected or
recommended to the Board by either a nominating  committee  comprised  solely of
independent directors or by a majority of the Company's  independent  directors.
The Board of Directors has determined not to form a nominating committee because
it is a "controlled  company," with more than a majority of the Company's Common
Stock  owned by three  stockholders  who have  agreed  to vote  together  in the
election of directors and can, therefore, elect all directors (see "Stockholders
Agreement" and "Controlled  Company,"  above) and because there has historically
been few vacancies on the Board.

         Instead,  the full  Board of  Directors,  a  majority  of whom meet the
"independent  director" criteria under the AMEX listing standards,  participates
in the  consideration  of director  nominees.  The Board does not have a charter
governing its nomination process.

         While the Board will consider nominees recommended by stockholders,  it
has not actively solicited recommendations from stockholders. Although the Board
has not established  specific minimum  qualifications,  or specific qualities or
skills for prospective nominees,  the Board will consider,  among other things a
potential nominee's financial and business experience,  educational  background,
understanding  of  the  Company's  business  and  industry,  skills  that  would
complement rather than duplicate skills of existing Board members,  demonstrated
ability in his or her professional field, integrity and reputation,  willingness
to work productively with other members of the Board and represent the interests
of  stockholders  as a whole,  and time  availability to perform the duties of a
director,  as well as the then current  size and  composition  of the Board.  No
weight is assigned  to any of the factors and the Board may change its  emphasis
on  certain  of these  factors  from  time to time in light of the  needs of the
Company at the time. The Board will evaluate nominees of stockholders  using the
same criteria as it uses in evaluating other nominees to the Board.

         A stockholder  seeking to recommend a prospective nominee should submit
the  recommendation  to the Board in the  manner  described  under  "Stockholder
Communications  with  Directors,"  below, and within the time frame described in
the second sentence under the caption  "Miscellaneous - Stockholder  Proposals,"
below. The recommendation  should include,  in addition to the name and business
or  residence  address of the nominee,  the written  consent of the person being
recommended  to being named in the  Company's  proxy  statement  relating to the
stockholder vote on his or her election and to serving as a director if elected.
The  recommendation  must also include all information that would be required to
be  disclosed  concerning  such  nominee in  solicitations  of  proxies  for the
election  of  directors  pursuant  to  Regulation  14A under the  Exchange  Act,
including,  but not limited to, the information  required by Items 103, 401, 403
and 404 of Regulation S-K of the SEC. In addition, the stockholder  recommending
the proposed nominee must provide the recommending  stockholder's  name, address
and number of shares of the Company's  Common Stock owned by such stockholder as
they  appear on the  Company's  stockholder  records  and the length of time the
shares have been owned by the  recommending  stockholder (or, if held in "street
name," a written  statement from the record holder of the shares  confirming the
information concerning such stock ownership of the recommending stockholder) and
whether the  recommendation is being made with or on behalf of one or more other
stockholders  (and,  if so,  similar  information  with  respect  to each  other
stockholder with or on behalf of whom the recommendation is being made).

         Each nominee for election named in this Proxy Statement is standing for
re-election.  William K. Steiner, Michael S. Steiner and Alan I. Greenstein, who
are  parties to a  Stockholders  Agreement  relating  the voting of 64.4% of the
Company's Common Stock, have agreed to vote for the nominees named in this Proxy
Statement.  See  "Ownership  of  Certain  Beneficial  Owners  and  Management  -
Stockholders Agreement," above.

                                      -7-
<PAGE>

Stockholder Communications with Directors

         Stockholders  may  communicate  directly  with the Board or one or more
specific directors by sending a written  communication to: Board of Directors or
a specific director,  c/o the Company's President,  290 N.E. 68th Street, Miami,
Florida 33138.  The Company's  President will forward the  communication  to the
director or directors to whom it is addressed,  except for  communications  that
are (1)  advertisements  or  promotional  communications,  (2) related solely to
complaints  by users of the  Company's  products or services  that are  ordinary
course of  business  customer  service  and  satisfaction  issues or (3) clearly
unrelated to the Company's business,  industry,  management,  Board or committee
matters.  The President will make all communications not specifically address to
any one  director  available  to each  member of the Board at the  Board's  next
regularly scheduled meeting.

Codes of Business Conduct and Ethics

         The  Company  has  adopted a Code of  Business  Conduct and Ethics that
applies to all of its directors,  officers and employees,  which is supplemented
by a Code of Conduct that  additionally  applies to its Chief Executive  Officer
and  senior  financial  officers.  Copies of these  codes are  available  on the
Company's website at www.drycleanusa.com by clicking on "Investors."

Audit Committee Report

         Management has the primary  responsibility for the Company's  financial
reporting process,  including its consolidated  financial statements,  while the
Board is  responsible  for  overseeing  the Company's  accounting,  auditing and
financial reporting  practices and the Company's  independent public accountants
have the responsibility for the examination of the Company's annual consolidated
financial statements, expressing an opinion on the conformity of those financial
statements with accounting  principles  generally  accepted in the United States
and issuing a report thereon. In assisting the Board in fulfilling its oversight
responsibility with respect to the Company's year ended June 30, 2004, the Audit
Committee:

o    Reviewed and discussed the audited  consolidated  financial  statements for
     the fiscal year ended June 30, 2004 with  management  and BDO Seidman,  LLP
     ("BDO Seidman"), the Company's independent public accountants;

o    Discussed  with  BDO  Seidman  the  matters  required  to be  discussed  by
     Statement  on  Auditing  Standards  No. 61  relating  to the conduct of the
     audit; and

o    Received the written  disclosures and the letter from BDO Seidman regarding
     its  independence as required by Independence  Standards Board Standard No.
     1,  "Independence  Discussions with Audit  Committees." The Audit Committee
     also discussed BDO Seidman's  independence  with BDO Seidman and considered
     whether the  provision  of non-audit  services  rendered by BDO Seidman was
     compatible with maintaining its independence  under SEC rules governing the
     independence  of  a  company's  outside  auditors  (see   "Miscellaneous  -
     Auditors").

         Based on the  foregoing  review and  discussions,  the Audit  Committee
recommended  to the Board  that the  Company's  audited  consolidated  financial
statements  for the fiscal year ended June 30, 2004 be included in the Company's
Annual Report on Form 10-KSB filed with the SEC that year.

                                              Respectfully,

                                              David Blyer
                                              Alan M. Grunspan
                                              Stuart Wagner


                                      -8-
<PAGE>

                             EXECUTIVE COMPENSATION

Summary Compensation Table

         The following table sets forth information  concerning the compensation
of  Michael  S.  Steiner,  the  Company's  only  executive  officer  whose  cash
compensation  exceeded  $100,000 during the Company's fiscal year ended June 30,
2004 for services in all  capacities to the Company  during the Company's  2004,
2003 and 2002 fiscal years:

<TABLE>
<CAPTION>
                                                                        Long-Term
                                      Annual Compensation             Compensation
      Name and                        -------------------------       ------------               All Other
Principal Position                    Year               Salary          Options               Compensation(1)
- -------------------                   ----               ------       -----------------------------------------
<S>                                   <C>             <C>                  <C>                     <C>
Michael S. Steiner,                   2004            $250,000               --                    $1,000 (1)
President and Chief                   2003             250,000               --                     1,000
Executive Officer                     2002             225,000               --                       875
</TABLE>
- ----------------------
(1)      "All Other  Compensation"  for fiscal  2004  represents  the  Company's
         matching  contribution  in fiscal 2004 for Michael S. Steiner under the
         Company's  Profit  Sharing  Plan  pursuant  to  Section  401(k)  of the
         Internal Revenue Code of 1986, as amended.

Option Grants and Exercises in Last Fiscal Year and Year-end Values

         No options were granted to, or exercised by,  Michael S. Steiner during
the  Company's  fiscal year ended June 30, 2004 nor were any options held by Mr.
Steiner at June 30, 2004.

Standard Remuneration of Directors

         Each  non-employee  director  receives a fee of $5,000  per annum.  The
Chairman  of the  Audit  Committee  (presently  Alan M.  Grunspan)  receives  an
additional fee of $5,000 per annum for services in that capacity.  Directors are
also  reimbursed  for   out-of-pocket   expenses  incurred  in  connection  with
performing  their  duties.  In the event that the Board of Directors  holds more
than four meetings  during a fiscal year in addition to its annual  meeting held
on the date of the Annual Meeting of Stockholders,  each director  receives $750
for each such additional meeting such director attends.

         The Company's 1994  Non-Employee  Director Stock Option Plan expired as
to future grants on August 23, 2004. Prior to its expiration,  each non-employee
director  of the  Company  serving on August 24,  1994 was  granted an option to
purchase  10,000  shares  of the  Company's  Common  Stock and each  person  who
subsequently  became a  non-employee  director was also granted,  at the time of
election to the Board,  an option to  purchase  10,000  shares of the  Company's
Common Stock at an exercise  price equal to 100% of the fair market value of the
Company's  Common  Stock on the date of grant.  Each option is for a term of ten
years and vests over a four-year  period  commencing  one year after the date of
grant (with vesting credit given for any service on the Board of Directors prior
to the date of grant).

Certain Relationships and Related Transactions

         The Company leases  warehouse and office space from William K. Steiner,
a principal  stockholder,  Chairman of the Board of Directors  and a director of
the Company, under a lease which expires on October 31, 2004. The lease includes
a renewal option for a ten-year term at a rent to be agreed upon by the parties.
Annual rental under this lease is approximately  $83,200.  The Company is in the
process of negotiating a renewal of this lease.


                                      -9-
<PAGE>

                                  MISCELLANEOUS

Auditors

         BDO Seidman, LLP ("BDO Seidman") has acted as the Company's independent
auditors  since the  Company's  1999  fiscal  year.  The 2004  Annual  Report to
Stockholders of the Company,  including financial  statements and report thereon
of BDO Seidman,  accompanies this Proxy Statement but is not incorporated in and
is not to be  deemed  a part  of  this  Proxy  Statement.  The  Company's  Audit
Committee  has  selected  BDO  Seidman to act as  independent  auditors  for the
Company during the year ending June 30, 2005. The Audit  Committee  nevertheless
retains the discretion to select  different  auditors  should it then deem it in
the  Company's  interests.  Representatives  of BDO Seidman  are  expected to be
present at the Meeting with the  opportunity  to make a statement if they desire
to do so and are expected to be available  to respond to  appropriate  questions
addressed by stockholders.

Audit Fees

         BDO Seidman's fees for its audit of the Company's  annual  consolidated
financial  statements for the year ended June 30, 2004,  review of the Company's
quarterly interim  financial  statements for fiscal 2004 and fiscal 2003 and the
audit of a  subsidiary's  financial  statements  required  to be included in the
subsidiaries  Uniform  Franchise  Offering  Circular  were  $57,000 and $55,000,
respectively.

Audit-Related Fees

         BDO Seidman  rendered no audit related  services to the Company  during
either fiscal 2004 or fiscal 2003.

Tax Fees

         BDO  Seidman's  fees  billed  for tax  compliance,  tax  advise and tax
planning  during fiscal 2004,  relating to preparing and filing of the Company's
federal,  state and local  income tax returns  for fiscal 2004 and fiscal  2003,
were $5,500 and $5,000, respectively.

All Other Fees

         BDO Seidman  provided no other  services to the Company  during  either
fiscal 2004 or fiscal 2003.

         In  connection  with the  standards  for  independence  of a  company's
independent  public  auditions,  the Audit Committee has considered  whether the
provision of such services is compatible with  maintaining  the  independence of
BDO Seidman.

Pre-Approval of Audit and Non-Audit Services

         It is the policy of the Audit Committee that all audit,  audit related,
tax  and  other  permissible   non-audit  services  provided  by  the  Company's
independent  auditor be pre-approved.  It is expected that  pre-approval will be
for periods up to one year and be set forth in an engagement  letter approved by
the Audit Committee of the Board that is detailed as to the particular  services
or category of services  to be provided  and subject to a specific  budget.  The
policy also requires  additional approval of any engagements that was previously
approved but is anticipated  to exceed the  pre-approved  fee budget level.  The
policy  permits the Chair of the Audit  Committee to  pre-approve  the Company's
principal independent auditor's services where the Company deems it necessary or
advisable  that such services  commence  prior to the next  regularly  scheduled
meeting  of the  Audit  Committee  provided  that the Audit  Committee  Chair is
required   to  report  to  the  full  Audit   Committee   on  any   pre-approval
determinations made in this manner.

                                      -10-
<PAGE>

Section 16(a) Beneficial Ownership Reporting Compliance

         Section  16(a) of the  Securities  Exchange  Act of 1934  requires  the
Company's  executive  officers and directors,  and persons who  beneficially own
more  than  10% of the  Company's  Common  Stock,  to file  initial  reports  of
ownership,  and  reports  of  changes  of  ownership,  of the  Company's  equity
securities  with the SEC and  furnish  copies of those  reports to the  Company.
Based  solely on a review of the copies of the reports  furnished to the Company
to date and written  representations  that no other reports were  required,  the
Company  believes  that all reports  required to be filed by such  persons  with
respect to the Company's fiscal year ended June 30, 2004 were timely filed.

Stockholder Proposals

         From time to time  stockholders may present proposals for consideration
at a meeting of  stockholders  which may be proper subjects for inclusion in the
Company's   proxy  statement  and  form  of  proxy  relating  to  that  meeting.
Stockholder  proposals  intended to be included in the Company's proxy statement
and form of proxy  relating  to the  Company's  Annual  Meeting of  Stockholders
presently  scheduled to be held in November 2005 must be received by the Company
at its principal executive offices, 290 N.E. 68th Street,  Miami, Florida 33138,
by June 27, 2005. Any such proposals, as well as any questions relating thereto,
should be directed to the President of the Company. As to any proposals intended
to be presented  by a  stockholder  without  inclusion  in the  Company's  proxy
statement  and  form  of  proxy  for  the  Company's   next  Annual  Meeting  of
Stockholders,  the proxies named in the Company's form of proxy for that meeting
will be entitled to exercise discretionary authority on that proposal unless the
Company receives notice of the matter on or before September 10, 2005.  However,
even if such  notice  is timely  received,  such  proxies  may  nevertheless  be
entitled  to  exercise  discretionary  authority  on that  matter to the  extent
permitted by SEC regulations.

Additional Information

         The cost of solicitation of Proxies,  including the cost of reimbursing
banks and brokers for forwarding proxy soliciting  material to their principals,
will  be  borne  by  the  Company.   Proxies  may  be  solicited  without  extra
compensation  by certain  officers and regular  employees of the Company by mail
and, if  determined  to be  necessary,  by  telephone,  telecopy,  telegraph  or
personal interviews.

Other Matters

         The Board of Directors  does not intend to bring before the Meeting any
matters other than those  specifically  described  above and knows of no matters
other than the  foregoing  to come before the Meeting.  If any other  matters or
motions  properly  come before the Meeting,  it is the  intention of the persons
named in the  accompanying  form of Proxy to vote such Proxy in accordance  with
their  judgment on such matters or motions,  including any matters  dealing with
the conduct of the Meeting.

                                    By Order of the Board of Directors,

                                                Lloyd Frank,
                                                  Secretary

Dated:  October 25, 2004


                                      -11-
<PAGE>

                                                                      APPENDIX A

                               DRYCLEAN USA, Inc.

                              AMENDED AND RESTATED
                             AUDIT COMMITTEE CHARTER


I. PURPOSE

         The primary  function of the Audit  Committee (the  "Committee") of the
Board of Directors (the "Board") of DRYCLEAN USA, Inc. (the "Corporation") is to
assist the Board in fulfilling its oversight  responsibilities  by reviewing the
financial reports and other financial information provided by the Corporation to
any  governmental  body or the  public;  the  Corporation's  systems of internal
controls over financial reporting;  and the Corporation's  auditing,  accounting
and financial reporting processes generally.  Consistent with this function, the
Committee  should  encourage  continuous   improvement  of,  and  should  foster
adherence  to, the  Corporation's  policies,  procedures  and  practices  at all
levels. The Committee's primary duties and responsibilities are to:

o        Serve  as  an   independent   and   objective   party  to  monitor  the
         Corporation's  financial and accounting  reporting process and internal
         control system.

o        Review and appraise the performance, qualifications and independence of
         the Corporation's independent auditor.

o        Provide an open avenue of communication among the independent  auditor,
         financial and senior management and the Board.

         The Committee will fulfill these  responsibilities  by carrying out the
activities  enumerated in this Charter and such other activities consistent with
this Charter as may from time to time be necessary or  appropriate  and assigned
to it by the Board.

         The Committee's  function is one of oversight only, it being understood
that the  Company's  management  is  responsible  for  preparing  the  Company's
financial  statements and its  independent  auditor is responsible  for auditing
those financial statements. Nothing contained in this Charter is intended to, or
should be construed as, creating any  responsibility or liability of the members
of the Committee  except to the extent  otherwise  provided  under  Delaware law
which shall  continue to be the legal standard for the conduct of the members of
the Committee.

II. COMPOSITION OF THE AUDIT COMMITTEE

         The Committee  shall be comprised of at least two members of the Board,
as  determined  by the Board.  Subject to such  exceptions  as may pertain under
applicable  rules of the American Stock Exchange LLC, (the "AMEX"),  each member
of the Committee shall be an independent director and free from any relationship
that, in the opinion of the Board,  would  interfere with the exercise of his or
her  independent  judgment as a member of the  Committee.  For  purposes of this
Charter,  the definition of independent  directors will be based on the rules of
the  Securities  and  Exchange  Commission  (the  "SEC")  and the AMEX for audit
committees, in each case as amended, modified or supplemented from time to time.
All members of the  Committee  must be

                                      A-1
<PAGE>

able to read  and  understand  fundamental  financial  statements,  including  a
company's balance sheet, income statement and cash flow statement or become able
to do so within a reasonable  period of time after his or her appointment to the
Committee.  At least one  member  of the  Committee  must  have past  employment
experience in finance or accounting,  requisite  professional  certification  in
accounting,  or other comparable  experience or background which results in such
member's  financial  sophistication,  including  being  or  having  been a chief
executive  officer,  chief  financial  officer  or  other  senior  officer  with
financial oversight responsibilities.

         The  members  of the  Committee  shall be  elected  by the Board at the
annual  organizational  meeting of the Board and shall serve at the  pleasure of
the Board or until their successors shall be duly elected and qualified.  Unless
a  chairperson  of the  Committee  (the  "Chair")  is elected by the Board,  the
members of the  Committee  may  designate a Chair by  majority  vote of the full
Committee membership.

III.     MEETINGS

         The Committee shall meet from time to time as called by the Chair or as
requested  by the  Corporation's  independent  auditor  but at least  once  with
respect to the financial  statements for each of the  Corporation's  first three
fiscal  quarters  and at least  once with  respect to the  Corporation's  annual
financial  statements.  The Committee may ask members of management or others to
attend meetings of the Committee and provide pertinent information as necessary.
As part of its responsibility to foster open communication,  the Committee shall
meet at least annually with management and the  independent  auditor in separate
executive  sessions to discuss any matters  that the  Committee  or any of these
groups believe should be discussed privately.  In addition, the Committee or its
Chair  shall  discuss  with   management   and  the   independent   auditor  the
Corporation's annual and quarterly financial statements  consistent with Section
IV below.  The Committee shall maintain minutes or other records of meetings and
activities of the Committee.

IV.      RESPONSIBILITIES AND DUTIES

         The duties of the Committee shall include the following:

Documents/Reports Review

o        Review,  prior to its filing or prior to its  release,  as the case may
         be, the Corporation's Annual and Quarterly Reports to be filed with the
         SEC on  Forms  10-K,  10-KSB,  10-Q or  10-QSB  and  annual  report  to
         stockholders.

o        Review  such  other  reports  or  other  financial  information  to  be
         submitted  to the  SEC or  the  public  as  the  Committee  shall  deem
         appropriate.

o        In  connection  with the  review  of all  such  reports  and  financial
         information,  consult with the Corporation's management and independent
         auditor  as to the  completeness  and  accuracy  of  such  reports  and
         financial  information  and  discuss  any  significant  changes  in the
         Corporation's  selection or application of accounting  principles,  the
         items  required by Statement  of Auditing  Standards 61 as in effect at
         that  time in the  case  of the  annual

                                      A-2
<PAGE>

         statements and Statement of Auditing Standards 100 as in effect at that
         time in the case of the quarterly statements.

o        Review  with  management  and  the  independent  auditor  major  issues
         regarding  accounting  principles,  critical  accounting  policies  and
         practices used and to be used in the  preparation of the  Corporation's
         financial  statements,   significant  judgments  made  in  management's
         preparation   of  the   financial   statements,   financial   statement
         presentations,  major  issues as to the  adequacy of the  Corporation's
         internal  controls  and any  special  audit  steps  adopted in light of
         material control deficiencies  therein, the effects of alternative GAAP
         methods on the financial  statements,  off-balance sheet structures and
         the type and  presentation  of  information to be included in financial
         statements  and  earnings  press  releases  (including  any use of "pro
         forma" or "adjusted" non-GAAP, information).

o        Review disclosures made to the Committee by the Corporation's principal
         executive   officer  and  principal   financial  officer  during  their
         certification  process  with  respect  to the  Reports on Forms 10-K or
         10-KSB,  and 10-Q or 10-Q5B about any  significant  deficiencies in the
         design or operation of internal controls or material weaknesses therein
         and any  fraud  involving  management  or  other  employees  who have a
         significant role in the Corporation's internal controls.

o        Recommend to the Board of Directors whether the Corporation's financial
         statements  for the year  covered by such report  should be included in
         the Corporation's Annual Report on Form 10-K or 10-KSB.

Independent Auditor

o        Be directly  responsible for the appointment,  compensation,  retention
         and  oversight  of the  work  of  the  independent  auditor  (including
         resolution of  disagreements  between  management  and the  independent
         auditor regarding financial reporting).

o        Review the performance of the independent auditor.

o        Have sole authority to appoint, discharge and replace the Corporation's
         independent  auditor,  which shall report  directly  and be  ultimately
         accountable to the Board and the Committee.

o        Receive the written statements from the independent auditor required by
         Independence  Standards  Board Standard No. 1, as amended,  modified or
         supplemented from time to time and, on at least an annual basis, review
         and engage in a dialogue with the auditor with respect to any disclosed
         relationships   or  services  that  may  impact  the   objectivity  and
         independence  of the auditor and take, or recommend that the full Board
         take, appropriate action to oversee the independence of the auditor.

o        Review the  qualifications  and  performance  of the lead  partner  and
         balance  of the  auditor's  staff  for the  audit of the  Corporation's
         financial statements.

o        Discuss  with  the  independent  auditor  at  least  annually  (a)  the
         independent  auditor's  internal  quality-control  procedures,  (b) any
         material  issues  raised by the most  recent

                                      A-3
<PAGE>

         internal  quality-control  review,  or peer review,  of the independent
         auditor,  or  by  any  inquiry  or  investigation  by  governmental  or
         professional  authorities,  within the preceding five years  respecting
         one or more independent  audits carried out by the independent  auditor
         and (c) any steps  taken by the  independent  auditor  to deal with any
         such issues.

o        Pre-approve all audit and permitted  non-audit services to be performed
         by the independent  auditor (including the terms of its engagement with
         respect  thereto),  explicitly  and/or through  policies and procedures
         adopted by the Committee;  consider  whether the provision of non-audit
         services is  compatible  with  maintaining  the  independent  auditor's
         independence;   and  approve  all   engagement   letters   between  the
         Corporation  and the  independent  auditor for both audit and permitted
         non-audit  services.   The  Committee  may  delegate  to  one  or  more
         designated   members  of  the   Committee   the   authority   to  grant
         pre-approvals  required by this Section  provided that the decisions of
         the member or  members to whom such  authority  is  delegated  shall be
         presented to the full Committee at its next scheduled meeting.

o        Discuss  with  the  independent  auditor  the  rotation  of  the  audit
         partners,   including,   without  limitation,   the  lead  partner  and
         concurring  or  reviewing  partner,  pursuant  to  Rule  2-01(c)(6)  of
         Regulation S-X promulgated by the SEC.

o        Set  hiring   policies  for  employees  or  former   employees  of  the
         independent auditor which shall, at a minimum,  comply with Section 206
         of the Sarbanes-Oxley Act of 2002.

o        Present its conclusions with respect to the independent  auditor to the
         full Board.

Financial Reporting Processes

o        Review with the  independent  auditor its opinion about the quality and
         appropriateness of the Corporation's  accounting  principles as applied
         in its financial reporting.

o        Consider   and  approve,   if   appropriate,   major   changes  to  the
         Corporation's  auditing  and  accounting  principles  and  practices as
         suggested by the independent auditor or management.

o        Review and discuss  with  management  and the  independent  auditor and
         others  involved  in the  preparation  thereof,  the  internal  control
         procedures to be developed by the  Corporation  in order to comply with
         Section 404 of the Sarbanes-Oxley Act of 2002.

Process Improvement

o        Following  completion of the annual audit,  review separately with each
         of management and the independent auditor any significant  difficulties
         encountered during the course of the audit,  including any restrictions
         on the scope of work or access to required information.

o        Review  any  significant   disagreement   between  management  and  the
         independent  auditor in connection  with the  preparation of any of the
         Corporation's financial statements.

                                      A-4
<PAGE>

o        Periodically  consult with the independent  auditor out of the presence
         of management about internal controls and the completeness and accuracy
         of the Corporation's financial statements.

o        Review with the independent  auditor and management the extent to which
         changes or  improvements  in  financial  or  accounting  practices,  as
         approved by the Committee, have been implemented.

Legal Compliance

o        Review,  with the  Corporation's  counsel,  legal  compliance  matters,
         including corporate securities trading policies.

o        Review with the Corporation's  counsel any legal matter that could have
         a significant impact on the Corporation's financial statements.

Ethical Compliance

o        Establish  procedures  for (i) the receipt,  retention and treatment of
         complaints received by the Corporation regarding  accounting,  internal
         accounting  controls or auditing  matters;  and (ii) the  confidential,
         anonymous  submission  by  employees  of the  Corporation  of  concerns
         regarding questionable accounting or auditing matters.

Self-Review

o        Review the Committee's performance at least annually.

o        Review and reassess the adequacy of this Charter  periodically,  but at
         least annually, and update this Charter as conditions dictate.

Certain Other Authorities

o        Have the authority to engage independent counsel, accountants and other
         advisers, as it determines necessary to carry out its duties.

o        Have the authority to provide for appropriate funding, as determined by
         the  Committee,  in its capacity as a committee  of the Board,  for the
         payment of (i) compensation to any independent  auditor engaged for the
         purpose of  preparing or issuing an audit  report or  performing  other
         audit, review or attest services for the Corporation; (ii) compensation
         to  any  advisers  employed  by  the  Committee;   and  (iii)  ordinary
         administrative   expenses  of  the  Committee  that  are  necessary  or
         appropriate, in the Committee's discretion, in carrying out its duties.

Other Responsibilities

o        Perform any other  activities  consistent  with this  Charter,  and the
         Corporation's Certificate of Incorporation,  By-laws and governing law,
         as the Committee or the Board deems necessary or appropriate.



                                      A-5
<PAGE>

                               DRYCLEAN USA. Inc.
|X| PLEASE MARK VOTES
    AS IN THIS EXAMPLE

PROXY FOR ANNUAL MEETING OF STOCKHOLDERS

                    November 19, 2004

This proxy is solicited on behalf of the Board of Directors

         The  undersigned  hereby  appoints  Michael S.  Steiner,  Venerando  J.
Indelicato  and Lloyd  Frank,  and each of them,  proxies,  with  full  power of
substitution,  to vote at the Annual  Meeting of  Stockholders  of DRYCLEAN USA,
Inc. to be held on Friday,  November 19, 2004  (including  any  adjournments  or
postponements  thereof)  according to the number of votes the undersigned  might
cast and with all powers the  undersigned  would possess if personally  present,
upon the matter  specified  hereon,  as more fully described in the accompanying
Notice  of such  meeting  and  Proxy  Statement,  receipt  of  which  is  hereby
acknowledged,  and with discretionary power upon such other business as may come
before the meeting, hereby revoking any proxies heretofore given.

<TABLE>
<S>                                                                            <C>
Election of Directors:

         MICHAEL S. STEINER, WILLIAM K. STEINER,                               For       With-      For All
         VENERANDO J. INDELICATO, DAVID BLYER,                                           hold       Except
         LLOYD FRANK, ALAN M. GRUNSPAN AND
         STUART WAGNER                                                         [ ]        [ ]         [ ]


         INSTRUCTION:     To    withhold
         authority   to  vote   for  any
         individual   nominee(s),   mark
         "For All Except" and write that
         nominee's  name  in  the  space
         provided below.


Please be sure to sign and date            Date                              Each  properly  executed  proxy
this Proxy in the box below                                                  will be voted this Proxy in the
                                                                             box  below in  accordance  with
- -------------------------------------------------------------------          the specifications  made above.
                                                                             If no specifications  are made,
                                                                             the shares  represented by this
- -------------------------------------------------------------------          proxy  will be voted  "FOR" all
                                                                             listed nominees.

Stockholder sign above           Co-holder (if any) sign above


- ------------------------------------------------------------------------------------------------------------------------------------
                              Detach above card, sign, date and mail in postage paid envelope provided.

</TABLE>

                               DRYCLEAN USA, Inc.

- --------------------------------------------------------------------------------
     Please sign your name or names exactly as set forth  hereon.  When stock is
in the name of more than one  person,  each such  person  should sign the proxy.
When signing as attorney, executor,  administrator,  trustee or guardian, please
indicate the capacity in which you are acting.  Proxies executed by corporations
should be signed by a duly authorized officer.

     Stockholders who desire to have stock voted at the meeting are requested to
fill in, date, sign and return this proxy. No postage is required if returned in
the enclosed envelope and mailed in the United States.

                               PLEASE ACT PROMPTLY
                     SIGN, DATE & MAIL YOUR PROXY CARD TODAY
- --------------------------------------------------------------------------------

IF YOUR ADDRESS HAS CHANGED,  PLEASE  CORRECT THE ADDRESS IN THE SPACE  PROVIDED
BELOW AND RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.


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

</TEXT>
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</SEC-DOCUMENT>
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