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<SEC-DOCUMENT>0000950144-03-011365.txt : 20031008
<SEC-HEADER>0000950144-03-011365.hdr.sgml : 20031008
<ACCEPTANCE-DATETIME>20031008164023
ACCESSION NUMBER:		0000950144-03-011365
CONFORMED SUBMISSION TYPE:	S-4/A
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20031008

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INGLES MARKETS INC
		CENTRAL INDEX KEY:			0000050493
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-GROCERY STORES [5411]
		IRS NUMBER:				560846267
		STATE OF INCORPORATION:			NC
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		S-4/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-107350
		FILM NUMBER:		03933630

	BUSINESS ADDRESS:	
		STREET 1:		PO BOX 6676
		CITY:			ASHEVILLE
		STATE:			NC
		ZIP:			28816
		BUSINESS PHONE:		7046692941

	MAIL ADDRESS:	
		STREET 1:		P O BOX 6676
		CITY:			ASHEVILLE
		STATE:			NC
		ZIP:			28816
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-4/A
<SEQUENCE>1
<FILENAME>g83939a2sv4za.htm
<DESCRIPTION>INGLES MARKETS, INCORPORATED
<TEXT>
<HTML>
<HEAD>
<TITLE>INGLES MARKETS, INCORPORATED</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center">
<B><FONT size="2">As Filed with the Securities and Exchange
Commission on October&nbsp;8, 2003</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="right">
<B><FONT size="2">Registration No.&nbsp;333-107350</FONT></B>
</DIV>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<P align="center">
<B>SECURITIES AND EXCHANGE COMMISSION</B>

<DIV align="center">
<B><FONT size="2">Washington, D.C. 20549</FONT></B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center">
<B><FONT size="5">Amendment No.&nbsp;2</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center">
<B><FONT size="4">Form S-4</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">REGISTRATION STATEMENT</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">UNDER</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">THE SECURITIES ACT OF 1933</FONT></B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="6">Ingles Markets, Incorporated</FONT></B>

<DIV align="center">
<I><FONT size="2">(Exact Name of Registrant as Specified in Its
Charter)</FONT></I>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="28%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B><FONT size="2">North Carolina</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">5411</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">56-0846267</FONT></B></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <I><FONT size="2">(State or Other Jurisdiction of<BR>
    Incorporation or Organization)</FONT></I></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <I><FONT size="2">(Primary Standard<BR>
    Industrial Classification<BR>
    Code Number)</FONT></I></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <I><FONT size="2">(I.R.S. Employer<BR>
    Identification Number)</FONT></I></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">P.O. Box 6676</FONT></B>

<DIV align="center">
<B><FONT size="2">Asheville, North Carolina 28816</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(828)&nbsp;669-2941</FONT></B>
</DIV>

<DIV align="center">
<I><FONT size="2">(Address, Including Zip Code, and Telephone
Number, including Area Code, of Registrant&#146;s Principal
Executive Offices)</FONT></I>
</DIV>

<P align="center">
<B><FONT size="2">Brenda S. Tudor</FONT></B>

<DIV align="center">
<B><FONT size="2">Chief Financial Officer</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Ingles Markets, Incorporated</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">P.O. Box 6676</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Asheville, North Carolina 28816</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(828)&nbsp;669-2941</FONT></B>
</DIV>

<DIV align="center">
<I><FONT size="2">(Name, Address, Including Zip Code, and
Telephone Number, Including Area Code, of Agent for
Service)</FONT></I>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><I><FONT size="2">Copies to:</FONT></I></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B><FONT size="2">Elizabeth Hardy Noe, Esq.<BR>
    Paul, Hastings, Janofsky &#38; Walker LLP<BR>
    600 Peachtree Street, N.E., Suite&nbsp;2400<BR>
    Atlanta, Georgia 30308<BR>
    (404) 815-2400</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">Stuart Gelfond, Esq.<BR>
    Fried, Frank, Harris, Shriver &#38; Jacobson<BR>
    One New York Plaza<BR>
    New York, New York 10004<BR>
    (212) 859-8000</FONT></B></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Approximate date of commencement of proposed
sale to the public:</FONT></B><FONT size="2"> As soon as
practicable after the effective date of this Registration
Statement.
</FONT>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the securities being registered on this Form
are to be offered in connection with the formation of a holding
company and there is compliance with General Instruction G,
check the following
box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If this form is filed to register additional
securities for an offering pursuant to Rule&nbsp;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 number of the earlier effective
registration statement for the same
offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If this Form is a post-effective amendment filed
pursuant to Rule&nbsp;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.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">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&nbsp;8(a) of the Securities Act of 1933 or until this
Registration Statement shall become effective on such date as
the Commission, acting pursuant to said Section&nbsp;8(a), may
determine.</FONT></B>

<P align="left">
<HR size="1" width="100%" align="left" noshade>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="4">$100,000,000</FONT></B>
</DIV>

<P align="center">
<B><FONT size="4">OFFER TO EXCHANGE</FONT></B>

<DIV align="center">
<B><FONT size="4">8&nbsp;7/8% Senior Subordinated Notes Due
2011</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="4">Registered under the</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="4">Securities Act of 1933</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="4">for any and all outstanding</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="4">8&nbsp;7/8% Senior Subordinated Notes Due
2011</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="4">of</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="6">Ingles Markets, Incorporated</FONT></B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="2">TERMS OF EXCHANGE</FONT></B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The exchange offer will expires at
    5:00&nbsp;P.M., New York City time,
    on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2003, unless extended.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Tenders of outstanding notes may be withdrawn any
    time prior to 5:00&nbsp;p.m. on the business day prior to the
    expiration of the exchange offer.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">We will not receive any proceeds from the
    exchange offer.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The terms of notes to be issued in exchange for
    the currently outstanding notes are substantially identical to
    the outstanding notes issued on May&nbsp;29, 2003 as additional
    notes under our indenture dated December&nbsp;11, 2001, except
    for certain transfer restrictions and registration rights
    relating to the outstanding notes.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">In addition to the notes issued on May&nbsp;29,
    2003, we have outstanding $250,000,000 principal amount of
    8&nbsp;7/8% Senior Subordinated Notes due 2011. The exchange
    notes offered by this prospectus will be of the same series as
    these outstanding notes.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">No public market exists for the outstanding notes
    or the new notes. We do not intend to list the new notes on any
    securities exchange or to seek approval for quotation through
    any automated quotation system.
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>See &#147;Risk Factors&#148; beginning on page&nbsp;13 for a
discussion of certain factors that should be considered by
holders who tender their original notes in the exchange offer
and by purchasers of the notes from persons eligible to use this
prospectus for resale.</B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">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.</FONT></B>

<P align="center">
<FONT size="2">The date of this prospectus
is &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2003.
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>

<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">ADDITIONAL INFORMATION AND INCORPORATION BY REFERENCE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">SUMMARY</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">RISK FACTORS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">FORWARD LOOKING STATEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">THE EXCHANGE OFFER</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">DESCRIPTION OF CERTAIN INDEBTEDNESS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">DESCRIPTION OF THE NOTES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">PLAN OF DISTRIBUTION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">LEGAL MATTERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">EXPERTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#011">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#012">EXHIBIT INDEX</A></TD></TR>
<TR><TD colspan="9"><A HREF="g83939a2exv23w1.txt">EX-23.1 CONSENT OF ERNST & YOUNG LLP</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">TABLE OF CONTENTS</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="85%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Page No.</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additional Information And Incorporation By
    Reference
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">i</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Summary
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Risk Factors
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Forward Looking Statements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">The Exchange Offer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Description Of Certain Indebtedness
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Description Of The Notes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Material United States Federal Income Tax
    Considerations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Plan Of Distribution
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Legal Matters
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Experts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV>&nbsp;</DIV>

<!-- link1 "ADDITIONAL INFORMATION AND INCORPORATION BY REFERENCE" -->
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="center">
<B><FONT size="2">ADDITIONAL INFORMATION AND INCORPORATION BY
REFERENCE</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have filed with the SEC a registration
statement on Form&nbsp;S-4 (File No.&nbsp;333-107350). This
prospectus, which forms part of this registration statement,
does not contain all of the information included in the
registration statement. For further information about us and the
securities offered in this prospectus, you should refer to the
registration statement and its exhibits.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We file annual, quarterly and special reports and
other information with the SEC. You may read and copy at
prescribed rates any document we file at the SEC&#146;s public
reference rooms at Room&nbsp;1024, 450&nbsp;Fifth Street, N.W.,
Washington,&nbsp;D.C. 20549, and at the SEC&#146;s regional
offices at 3475&nbsp;Lenox Road, N.E., Suite 1006, in Atlanta,
Georgia&nbsp;30326-1232. Please call the SEC at 1-800-SEC-0330
for further information on the public reference rooms. Our SEC
filings are also available to the public at the SEC&#146;s web
site at www.sec.gov.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our principal executive offices are located at
2913 U.S. Highway 70 West, Black Mountain, North Carolina 28711.
Our telephone number is (828)&nbsp;669-2941. Our website address
is www.ingles-markets.com. Information on our web site is not
part of this prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The SEC allows us to &#147;incorporate by
reference&#148; information into this prospectus, which means
that we can disclose important information to you by referring
to another document filed separately with the SEC. The
information incorporated by reference is deemed to be part of
this prospectus, except for information superseded by this
prospectus. We incorporate by reference the documents listed
below:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Our Annual Report on Form&nbsp;10-K for the
    fiscal year ended September&nbsp;28, 2002, filed on
    December&nbsp;10, 2002; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Our Quarterly Report on Form&nbsp;10-Q for the
    quarter ended December&nbsp;28, 2002, filed on February&nbsp;10,
    2003, our Quarterly Report on Form&nbsp;10-Q for the quarter
    ended March&nbsp;29, 2003, filed on May&nbsp;8, 2003 and our
    Quarterly Report on Form&nbsp;10-Q for the quarter ended
    June&nbsp;28, 2003 filed on August&nbsp;8, 2003 and amended on
    October&nbsp;8, 2003.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are also incorporating by reference additional
documents that we may file with the SEC under
Section&nbsp;13(a), 13(c), 14 or 15 (d)&nbsp;of the Exchange Act
prior to the expiration of this exchange offer. If you are a
note holder, we may have sent you some of the documents
incorporated by reference, but you can obtain any of them
through us or the SEC. Documents incorporated by reference are
available from us without charge, unless we have specifically
incorporated by reference an exhibit into a document that this
prospectus incorporates. You may obtain documents incorporated
by reference into this prospectus by requesting them in writing
or by telephone from: Ingles Markets, Incorporated, Attention:
Investor Relations at the address indicated above.
</FONT>

<P align="center">
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<!-- link1 "SUMMARY" -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="center">
<B><FONT size="2">SUMMARY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">The following summary contains a general
discussion of our business and the exchange offer. It likely
does not contain all the information that is important to you in
making a decision to tender your original notes in exchange for
new notes. For a more complete understanding of the exchange
offer, you should read this entire prospectus and the other
documents to which we refer. As used in this prospectus, all
references to &#147;Ingles,&#148; &#147;we,&#148; &#147;us&#148;
and all similar references are to Ingles Markets, Incorporated,
a North Carolina corporation, and its consolidated subsidiaries,
unless otherwise expressly stated or the context otherwise
requires.</FONT></I>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Our &#147;Ingles&#148; service mark,
&#147;Laura Lynn&#148; trademark and our service mark &#147;You
get a lot more. You pay a lot less.&#148; are federally
registered in the United States pursuant to applicable
intellectual property laws and are the property of Ingles. In
addition, we use the &#147;Sealtest,&#148;
&#147;Light&nbsp;N&#146; Lively&#148; and &#147;Pet&#148;
trademarks pursuant to agreements entered into in connection
with our milk, fruit juice and spring water processing and
packaging operations.</FONT></I>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Except as otherwise set forth in this
prospectus, the term &#147;remodel&#148; refers to both
&#147;major&#148; and &#147;minor&#148; remodelings of our
stores. A major remodel and expansion provides the quality of
facilities and product offerings identical to that of our
prototype stores described in this prospectus while minor
remodels generally include repainting, remodeling and upgrading
of the lighting throughout a store. Additionally, we refurbish
existing equipment and add selected new equipment during both
the major and minor remodeling processes.</FONT></I>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Ingles operates on a 52 or 53&nbsp;week fiscal
year ending on the last Saturday in September. Throughout this
document, references to fiscal year refer to the fiscal year
ending on the last Saturday in September of the referenced year,
and all references to the past five fiscal years refer to the
five fiscal years ended September&nbsp;28, 2002. Our comparable
store sales discussed in this prospectus are defined as sales by
grocery stores in operation for the entire duration of the
current and previous fiscal years. Replacement stores and major
and minor remodels are included in the comparable store sales
calculation.</FONT></I>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center">
<B><FONT size="2">Our Company</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are a leading supermarket chain in the
Southeast operating 199 supermarkets in Georgia (83), North
Carolina (60), South Carolina (32), Tennessee (21), Virginia (2)
and Alabama (1). Our strategy is to locate our supermarkets
primarily in suburban areas, small towns and rural communities
which are either currently experiencing, or which we believe
will experience, significant growth or in which we feel our
superior store offerings present competitive advantages over the
existing store offerings. Our supermarkets offer customers a
wide variety of nationally advertised food products, including
grocery, meat and dairy products, produce, frozen foods and
other perishables, non-food products, including health and
beauty care products and general merchandise, as well as quality
private label items. In addition, we focus on selling
high-growth, high-margin products to our customers through the
development of book sections, media centers, floral departments,
bakery departments and prepared foods, including delicatessen,
sections. Our average supermarket it approximately 45,000 square
feet, while our new &#147;prototype&#148; stores are
approximately 60,000 to 65,000 square feet. Since opening our
first store in 1963, we have developed strong name recognition
in our markets and a reputation for combining low overall prices
with high levels of quality, customer service and convenience,
which has contributed to our 38 consecutive years of net sales
growth. For the fiscal year ended September&nbsp;28, 2002, we
generated net sales of approximately $1.96&nbsp;billion.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Substantially all of our stores are located
within 250&nbsp;miles of our 780,000 square foot warehouse and
distribution center, near Asheville, North Carolina, from which
we distribute groceries, produce, meat and dairy products to all
of our Ingles stores. Our warehouse supplies our stores with
approximately 65% of the goods they sell and we purchase the
remaining 35% from third parties. The close proximity of our
purchasing and distribution operations to our stores facilitates
the timely distribution of consistently high quality meat,
produce and other perishable items.
</FONT>
</DIV>

<P align="center"><FONT size="2">1
</FONT>
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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We own and operate a milk processing and
packaging plant that supplies approximately 80% of the milk
products sold by our supermarkets, as well as a variety of
orange and other fruit juices and bottled water products. By
processing these products ourselves, we are able to control the
availability and quality of our products. In addition to
supplying our stores, as of June&nbsp;28, 2003, our milk
processing and packaging plant sells approximately 68% of its
products to third-party retailers, food service distributors and
grocery warehouses in eight states, which provides us with an
additional source of revenue.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We own and operate 76 shopping centers, 58 of
which contain an Ingles supermarket. We also own 74 additional
properties that contain a free-standing Ingles store. We have
four additional undeveloped sites suitable for a free-standing
store. The majority of land tracts which we own contains
additional acreage which may either be sold or developed in the
future. Our owned properties are generally located in the same
geographic regions as our supermarkets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have an ongoing renovation and expansion plan
to increase the number of stores we have in our target market
and to modernize the appearance and layout of our existing
stores. Over the past five fiscal years, we have spent
approximately $390.2&nbsp;million to modernize and remodel our
existing stores, relocate older stores to larger, more
convenient locations and construct new stores in order to
maintain the quality shopping experience that our customers
expect from Ingles. As part of our renovation and expansion
plan, we began in 2000 operating full-service pharmacies and gas
stations at some of our stores. As of June&nbsp;28, 2003, we had
23 in-store pharmacies and 16 gas stations in operation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Sales in our grocery segment are subject to a
slight seasonal variance due to holiday related sales. Sales are
traditionally higher in our first fiscal quarter due to the
inclusion of sales related to Thanksgiving and Christmas. Our
second fiscal quarter traditionally has the lowest sales of the
year, unless Easter falls in that quarter. The fluid dairy
segment of our business has slight seasonal variation to the
extent of its sales into the grocery industry. Our real estate
segment is not subject to seasonal variations.
</FONT>

<P align="center">
<B><FONT size="2">Industry and Market Overview</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The grocery business in the United States is a
stable business. Since 1975, real consumer spending at food
retailers has generally experienced annual growth and has not
experienced an annual decline of more than 1% in any year. We
believe that the potential impact of an economic slowdown on the
grocery sector would be mitigated by a shift of consumers from
restaurants to supermarkets and from branded products to more
profitable private label products. We operate our 199
supermarkets in the Southeast region of the United States, 196
of which are located in Georgia, North Carolina, South Carolina
and Tennessee. Over the past several years, these states have
grown faster than the United States as a whole in terms of
population, employment and per capita personal income. Since
substantially all of our existing supermarkets are, and planned
new supermarkets will be, in these states, we believe that we
will continue to benefit from the economic strength of this
region.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth the percentage
growth in certain statistical categories in our principal
markets and nationally from 1990 to 2000:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Georgia</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">North Carolina</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">South Carolina</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Tennessee</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">National</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Population(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26.4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21.4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15.1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total employment(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36.5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28.9</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24.3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26.4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21.6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Per capita annual personal income(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">57.5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56.5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51.5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56.0</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51.5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Source: United States Census Bureau
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Source: United States Bureau of Labor Statistics.
    Data is total, non-farm employment data for January 2001 versus
    January 1991, seasonally adjusted.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Source: United States Department of Commerce
    Bureau of Labor Statistics
    </FONT></TD>
</TR>

</TABLE>
</DIV>

<P align="center"><FONT size="2">2
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<P align="center">
<B><FONT size="2">Company Strengths</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Recognized Name and Distinctive
Image.</FONT></I><FONT size="2"> We have cultivated a
distinctive image as an American-owned supermarket chain that
provides quality, value and service to its customers under the
well-recognized Ingles name. Our shopping experience combines a
high level of customer service, convenience-oriented product
offerings, and low overall pricing. Our modern stores provide
products and services such as home meal replacement items,
delicatessens, bakeries, floral departments, media departments,
greeting cards and a broad selection of health and beauty care
items. In some of our locations, we have recently added
full-service pharmacies and gas stations. This
&#147;one-stop&#148; shopping concept is particularly important
in the smaller, rural markets we serve since the number of local
stores and their product offerings may be limited. Along with
these factors, we seek to promote customer loyalty by providing
quality products at competitive prices with an emphasis on
convenient locations and high levels of customer service.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Regional Focus.</FONT></I><FONT size="2"> Our
strategy is to locate our supermarkets primarily in suburban
areas, small towns and rural communities which are either
currently experiencing, or which we believe will experience,
significant growth or in which we feel our superior store
offerings present competitive advantages over the existing store
offerings. We seek to establish and maintain market leadership
and earn attractive, consistent profit margins within our target
markets by operating modern, full-service supermarkets in these
areas. We believe that our regional focus provides an in-depth
knowledge of local consumer preferences and allows for
customization of our merchandising, pricing and operational
strategies for local demographics and competition. Additionally,
our strategy of maintaining the close proximity of our
supermarkets to our warehouse and distribution facility and
headquarters is intended to promote more efficient supervision
of our operations, increased speed and frequency of distribution
and lower distribution and transportation costs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Modern Store Base.</FONT></I><FONT size="2">
Over the past five fiscal years, we have spent approximately
$390.2&nbsp;million to modernize and remodel existing stores,
relocate older stores to larger, more convenient locations and
construct new stores. Approximately 50% of our current store
base has been either newly built, renovated or remodeled in the
last five years. We strive to maintain one of the most modern
supermarket chains in the country and cater to the changing
lifestyle needs of our customers.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Extensive Real Estate
Portfolio.</FONT></I><FONT size="2"> The purchase, sale and
ownership of real estate are important components of our
operations, providing both operational and economic benefits. We
believe real estate ownership allows us to decrease occupancy
costs, maintain flexibility for future store expansion, control
the development and management of each property and benefit from
value created by developing and operating free-standing
supermarkets and shopping centers in smaller markets. Our
management team continually reviews our real estate portfolio in
order to maximize the utilization and profitability of our owned
real estate, as well as our periodic purchases and sales of real
estate. As of June&nbsp;28, 2003, our real estate has a book
value of approximately $563.1&nbsp;million of which
approximately $306.0&nbsp;million is encumbered under our
outstanding indebtedness.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Management Experience and
Depth.</FONT></I><FONT size="2"> Our management team has
substantial experience across all operating divisions of our
business. On average, our senior management team has
approximately 25&nbsp;years of experience in the supermarket
industry including approximately 17&nbsp;years with Ingles. We
believe that our management&#146;s experience in our regional
market is an important factor in the continuing success of
Ingles. In addition to our senior management team, we have
extensive management depth at the corporate, regional and store
levels.
</FONT>

<P align="center">
<B><FONT size="2">Growth Strategy</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our growth strategy is to focus on increasing
revenues and profitability by capitalizing on the following:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Expand our Store Base Within Our Target
Region.</FONT></I><FONT size="2"> We believe that it is
important to continue to expand our store base to capture new
fill-in opportunities as the population in our region continues
to grow. Our current expansion plan features 60,000 to 65,000
square foot prototype stores that have full-
</FONT>
</DIV>

<P align="center"><FONT size="2">3
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV align="left">
<FONT size="2">service amenities to meet the expanding needs of
our customers and enhance our competitive position in our
markets. During the past five fiscal years, we opened
55&nbsp;stores of 59,000 square feet or more which includes
major remodels, expansions and replacements. Management
continually evaluates opportunities to expand our store base. We
believe that there are sufficient attractive opportunities
within 250&nbsp;miles of our warehouse to support continued
expansion of our store base.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Modernize and Expand Existing
Stores.</FONT></I><FONT size="2"> We believe that the appearance
and features of our stores are an integral component of the
customer&#146;s shopping experience. We intend to continue to
position ourselves as one of the most modern supermarket chains
in the industry. Depending on the size and quality of an
existing store, competitive pressures and demographic trends, we
complete either a remodel of an existing store or a relocation
of a store to a more convenient location. When completing major
remodels, we generally expand the size of the store to provide
features similar to those in our new prototype stores.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Continue Profit Expansion Through Improved
Product Mix.</FONT></I><FONT size="2"> We believe that customers
in our markets are increasingly convenience-oriented and
interested in products in our specialty departments, such as
prepared foods and home meal replacement items, which typically
carry higher margins than other grocery products. We actively
promote these specialty department products, including products
offered in our delicatessen and bakery departments and media
centers. We also continue to focus on increasing sales of our
private label &#147;Laura Lynn&#148; and &#147;Ingles Best&#148;
brands which typically carry higher gross margins than
comparable branded products. Our improved product mix has helped
us to increase our gross margins from 24.8% in fiscal 1998 to
26.3% for the nine months ended June&nbsp;28, 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Invest in Technology to Enhance Operating
Efficiency and Customer Service.</FONT></I><FONT size="2"> In
order to improve information systems for our management,
simplify employee training and improve efficiency in store
operations and to provide our customers with the excellent
service that they have come to expect from Ingles, we are
pursuing cost-justified investments in technological
advancements. We have introduced security measures to reduce
theft in our stores and, in some stores, self-check out (which
allows one employee to monitor four customers who self-scan
their merchandise for check out) to improve labor efficiency.
</FONT>

<P align="center">
<B><FONT size="2">The Exchange Offer</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On May&nbsp;29, 2003, we completed the private
offering of $100,000,000 of our 8&nbsp;7/8% Senior Subordinated
Notes due 2011. We entered into an exchange and registration
rights agreement with the initial purchasers in the private
offering in which we agreed, among other things, to deliver this
prospectus to you and to complete the exchange offer within
180&nbsp;days of the issuance of the outstanding notes. In the
exchange offer, you are entitled to exchange your outstanding
notes for registered notes on substantially identical terms. The
following summarizes certain material terms of the exchange
offer.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Resales Without Further <BR>
     Registration
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">We believe that the new notes issued pursuant to
    the exchange offer may be offered for resale, resold or
    otherwise transferred by you without compliance with the
    registration and prospectus delivery provisions of the
    Securities Act of 1933, as amended, provided that:
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;you are acquiring the new notes
    issued in the exchange offer in the ordinary course of your
    business;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;you have not engaged in, do not
    intend to engage in, and have no arrangement or understanding
    with any person to participate in, the distribution of the new
    notes issued to you in the exchange offer; and
    </FONT></TD>
</TR>

</TABLE>
</DIV>

<P align="center"><FONT size="2">4
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;you are not our
    &#147;affiliate,&#148; as defined under Rule&nbsp;405 of the
    Securities Act of 1933.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Each of the participating broker-dealers that
    receives new notes for its own account in exchange for original
    notes that were acquired by such broker or dealer as a result of
    market-making or other activities must acknowledge that it will
    deliver a prospectus in connection with the resale of the new
    notes.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Expiration Date
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">5:00&nbsp;p.m., New York City time,
    on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2003 unless we extend the exchange offer.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Registration Rights Agreement
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">You have the right to exchange the original notes
    that you hold for new notes with substantially identical terms.
    This exchange offer is intended to satisfy these rights. Once
    the exchange offer is complete, you will no longer be entitled
    to any exchange or registration rights with respect to your
    original notes.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Accrued Interest on the New Notes and Original
    Notes
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The new notes will bear interest from
    June&nbsp;1, 2003, the last interest payment date for the
    original notes. Holders of original notes which are accepted for
    exchange will be deemed to have waived the right to receive any
    payment in respect of interest on such original notes accrued to
    the date of issuance of the new notes.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Conditions to the Exchange Offer
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The exchange offer is conditioned upon certain
    customary conditions, which we may waive, and upon compliance
    with securities law.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Procedures for Tendering Original Notes
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Each holder of original notes wishing to accept
    the exchange offer must:
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;complete, sign and date the letter of
    transmittal, or a facsimile of the letter of transmittal; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;arrange for The Depository Trust
    Company to transmit certain required information to the exchange
    agent in connection with a book-entry transfer.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">You must mail or otherwise deliver such
    documentation together with the original notes to the exchange
    agent.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Special Procedures for Beneficial Holders
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">If you beneficially own original notes registered
    in the name of a broker, dealer, commercial bank, trust company
    or other nominee and you wish to tender your original notes in
    the exchange offer, you should contact such registered holder
    promptly and instruct them to tender on your behalf. If you wish
    to tender on your own behalf, you must, before completing and
    executing the letter of transmittal for the exchange offer and
    delivering your original notes, either arrange to have your
    original notes registered in your name or obtain a properly
    completed bond power from the registered holder. The transfer of
    registered ownership may take considerable time.
    </FONT></TD>
</TR>

</TABLE>
</DIV>

<P align="center"><FONT size="2">5
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Guaranteed Delivery Procedures
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">You must comply with the applicable procedures
    for tendering if you wish to tender your original notes and:
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;time will not permit your required
    documents to reach the exchange agent by the expiration date of
    the exchange offer; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;you cannot complete the procedure for
    book-entry transfer on time; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;your original notes are not
    immediately available.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Withdrawal Rights
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">You may withdraw your tender of original notes at
    any time prior to 5:00&nbsp;p.m., New York City time, on the
    date the exchange offer expires.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Failure to Exchange Will Affect You Adversely
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">If you are eligible to participate in the
    exchange offer and you do not tender your original notes, you
    will not have further exchange or registration rights and your
    original notes will continue to be subject to some restrictions
    on transfer. Accordingly, the liquidity of the original notes
    will be adversely affected.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Certain United States Income Tax Considerations
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The exchange of original notes for new notes
    pursuant to the exchange offer will not result in a taxable
    event. Accordingly, we believe that:
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;no gain or loss will be realized by a
    U.S. holder upon receipt of a new note;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;a holder&#146;s holding period for a
    new note will include the holding period for the original note
    tendered in exchange for the new note; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;the adjusted tax basis of a new note
    will be the same as the adjusted tax basis of the original note
    exchanged at the time of such exchange.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Exchange Agent
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">U.S. Bank, N.A. is serving as exchange agent.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Use of Proceeds
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">We will not receive any proceeds from the
    exchange offer.
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">Summary Terms Of New Notes</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Issuer
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Ingles Markets, Incorporated
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Securities
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">$100.0&nbsp;million principal amount of
    8&nbsp;7/8% senior subordinated notes. The notes will be issued
    under the same indenture and have the same terms as our
    outstanding $250.0&nbsp;million principal amount of 8&nbsp;7/8%
    Senior Subordinated Notes due 2011.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Maturity
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">December&nbsp;1, 2011.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Interest
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Annual Rate: 8&nbsp;7/8%
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Payment Frequency: every six months on
    June&nbsp;1 and December&nbsp;1.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Ranking
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The notes are unsecured senior subordinated
    obligations and are subordinated to our senior credit facilities
    and other senior
    </FONT></TD>
</TR>

</TABLE>
</DIV>

<P align="center"><FONT size="2">6
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">indebtedness. The notes rank equally with our
    senior subordinated indebtedness and rank senior to our
    subordinated indebtedness. In addition, the notes effectively
    rank junior to our subsidiaries&#146; liabilities. Because the
    notes are subordinated, in the event of bankruptcy, liquidation
    or dissolution and acceleration of or payment default on senior
    indebtedness, holders of the notes will not receive any payment
    until holders of senior indebtedness have been paid in full.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Optional Redemption
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The notes may be redeemed, in whole or in part,
    at any time on or after December&nbsp;1, 2006, at the redemption
    prices described in this prospectus, plus accrued and unpaid
    interest. See &#147;Description of Notes&nbsp;&#151; Optional
    Redemption.&#148; Prior to December&nbsp;1, 2004, we may redeem
    up to 35% of the aggregate principal amount of the notes with
    the net cash proceeds from a public equity offering at the
    redemption price described in the section &#147;Description of
    Notes&nbsp;&#151; Optional Redemption.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Change of Control
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">If a change of control event occurs, each holder
    of notes may require us to repurchase all or a portion of the
    holder&#146;s notes at a purchase price equal to 101% of the
    principal amount of the notes, plus accrued interest. See
    &#147;Description of Notes&nbsp;&#151; Repurchase at the Option
    of Holders&nbsp;&#151; Change of Control.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Certain Covenants
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The indenture governing the notes contains
    covenants that, among other things, will limit our ability and
    the ability of our subsidiaries to:
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;incur additional debt;
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left">
<FONT size="2">&#146;
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;pay dividends or make other
    restricted payments;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;make investments;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;engage in transactions with
    affiliates;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;create certain liens or other
    encumbrances;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;sell or otherwise dispose of a
    portion of our assets;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;in the case of our subsidiaries,
    guarantee indebtedness or secure debt;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;in the case of our subsidiaries,
    incur obligations that restrict their ability to make dividend
    or other payments to us;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;create unrestricted subsidiaries; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;consolidate, merge or transfer all or
    substantially all of our assets and the assets of our
    subsidiaries on a consolidated basis.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">These covenants are subject to important
    exceptions and qualifications, which are described under the
    heading &#147;Description of the Notes&nbsp;&#151; Certain
    Covenants.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Changes in Interest Rate
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Under the registration rights agreement entered
    into in connection with the private placement, we agreed to use
    our commercially reasonable best efforts to complete this
    exchange offer within 180&nbsp;days after the issue date of the
    notes. The interest
    </FONT></TD>
</TR>

</TABLE>
</DIV>

<P align="center"><FONT size="2">7
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">rate on the notes will increase if we do not
    comply with the obligations under the registration rights
    agreement. See &#147;Exchange Offer; Registration Rights.&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Risk Factors
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">See &#147;Risk Factors&#148; and the other
    information in this prospectus for a discussion of factors you
    should carefully consider before deciding to tender your
    original notes.
    </FONT></TD>
</TR>

</TABLE>
</DIV>

<P align="center"><FONT size="2">8
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<P align="center">
<B><FONT size="2">Summary Consolidated Financial and Other
Data</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table contains our summary
consolidated financial and other data as of and for each of the
five fiscal years ended September&nbsp;28, 2002 and the
nine-month periods ended June&nbsp;29, 2002 and June&nbsp;28,
2003. Our summary consolidated financial data, not including our
operating data, for each of the five fiscal years ended
September&nbsp;28, 2002 were derived from our audited
consolidated financial statements. Our audited consolidated
statements of income, statements of changes in
stockholders&#146; equity and statements of cash flows for the
three years ended September&nbsp;28, 2002 and our audited
consolidated balance sheets as of September&nbsp;29, 2001 and
September&nbsp;28, 2002, together with the notes thereto and the
report of Ernst &#38; Young LLP, our independent auditors, are
incorporated by reference in this prospectus. Our summary
consolidated financial data, not including our operating data,
for the nine-month periods ended June&nbsp;29, 2002 and
June&nbsp;28, 2003 were derived from our unaudited condensed
consolidated financial statements. Our unaudited condensed
consolidated statements of income, statements of changes in
stockholders&#146; equity, and statements of cash flows for the
nine months ended June&nbsp;29, 2002 and June&nbsp;28, 2003, as
well as our unaudited consolidated balance sheet as of
June&nbsp;28, 2003 are also incorporated by reference in this
prospectus. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included
in our unaudited condensed consolidated financial statements.
Interim results for the nine-month period ended June&nbsp;28,
2003 are not necessarily indicative of results that can be
expected for the fiscal year ending September&nbsp;27, 2003. The
following table should be read in conjunction with
management&#146;s discussion and analysis of financial condition
and results of operations and the consolidated financial
statements and the related notes incorporated by reference in
this prospectus.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="27%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">Fiscal Year Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Nine Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(52 Weeks)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(53 Weeks)</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(52 Weeks)</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(39 Weeks)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;26,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;25,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;29,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;28,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;29,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;28,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="27"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="27" align="center" nowrap><B><FONT size="1">(Dollars in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Income Statement Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,647,152</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,805,375</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,916,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,953,440</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,960,462</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,475,552</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,488,130</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gross profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">408,681</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">450,445</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">490,914</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">511,556</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">520,725</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">389,683</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">390,959</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating and administrative expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">357,068</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">391,910</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">432,631</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">454,647</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">460,599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">343,339</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">347,359</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Rental income, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,078</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,149</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,302</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,355</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,099</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,530</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">44,153(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,612</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68,432</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,212</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">70,481</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,443</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,130</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other income, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,428</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,323</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,985</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,891</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,054</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,544</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,955</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,117</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,785</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41,226</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42,903</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,540</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,456</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,081</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,163(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,091</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,850</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,733</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,981</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,204</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ratio of earnings to fixed charges (unaudited)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.11x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.60x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.60x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.47x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.35x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.36x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.31x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Balance Sheet Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,121</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,960</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,176</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,345</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46,900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,449</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">71,370</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Working capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,071</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,115</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,059</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37,452</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">91,399</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">109,703</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">134,368</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">862,787</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">873,171</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">927,766</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">962,801</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,014,391</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,013,859</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,065,565</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total debt (including short-term debt)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">483,173</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">464,494</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">515,637</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">549,545</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">596,632</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">605,563</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">657,537</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">218,236</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">224,122</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">232,138</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">236,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">238,559</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">238,378</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">239,056</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Other Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,616</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41,923</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43,532</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,266</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,312</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,072</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,183</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital expenditures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">155,941</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,221</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">102,535</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">73,194</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,713</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,228</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,120</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by operating activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">71,419</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59,437</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42,279</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47,660</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,012</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,993</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">29,015</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjusted EBITDA(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">106,833</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">111,858</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">118,949</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">116,369</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">123,847</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">93,059</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">92,268</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ratio of net debt to Adjusted EBITDA(4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.3x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.0x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.2x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.6x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.4x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.8x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.4x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>
</DIV>

<P align="center"><FONT size="2">9
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="24%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">Fiscal Year Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Nine Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(52 Weeks)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(53 Weeks)</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(52 Weeks)</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(39 Weeks)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;26,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;25,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;29,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;28,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;29,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;28,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="27"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="27" align="center" nowrap><B><FONT size="1">(Dollars in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ratio of Adjusted EBITDA to interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.7x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.8x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.9x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.7x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.4x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.4x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.4x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjusted EBITDA margin(5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.5</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.0</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.3</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Operating Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Supermarkets:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">In operation at beginning of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">198</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">207</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">206</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">208</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">203</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">203</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">198</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Opened or acquired during period(6)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Closed or sold during period(6)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">In operation at end of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">207</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">206</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">208</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">203</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">198</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">201</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">199</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minor remodels during period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Major remodels and replacements during period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Average store size at end of period (sq. ft.)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,038</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,776</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42,855</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">44,726</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,454</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,140</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46,234</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">In December 2002 we adopted FASB Statement
    No.&nbsp;145, &#147;Modifications to Reporting of
    Extinguishments of Debt and Accounting for Certain Capital Lease
    Modifications and Technical Corrections&#148;
    (&#147;FAS&nbsp;145&#148;) which requires gains and losses on
    extinguishments of debt to be classified as income or loss from
    continuing operations rather than as extraordinary items. Costs
    of $0.9&nbsp;million incurred with the early retirement of
    $170.0&nbsp;million in debt during fiscal 2002 will be
    reclassified in our Annual Report on Form&nbsp;10-K for the 2003
    fiscal year from an extraordinary item to interest expense. The
    September&nbsp;28, 2002 results presented in this table do not
    reflect the reclassification; however, the results for the nine
    months ended June&nbsp;29, 2002 have been reclassified in
    accordance with FAS&nbsp;145. FAS&nbsp;145 is required to be
    applied with respect to financial statements contained in
    reports filed after the date of adoption of FAS&nbsp;145 by us.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">During fiscal 1998, we recorded a non-recurring
    charge related to a settlement of a lawsuit alleging gender
    discrimination. The charge reduced net income by
    $9.1&nbsp;million, net of an income tax benefit of
    $5.5&nbsp;million.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">EBITDA is defined as earnings before interest,
    income taxes, depreciation and amortization. Adjusted EBITDA is
    defined as earnings before interest, income taxes, depreciation,
    amortization, non-recurring charges and extraordinary items.
    Adjusted EBITDA, as used herein, refers to the same measure
    identified as EBITDA in the Company&#146;s Form&nbsp;10-K for
    the fiscal year ended September&nbsp;28, 2002 and the definition
    for EBITDA included in the Form&nbsp;10-K is the definition
    described above for adjusted EBITDA. EBITDA is a measure
    commonly used in the grocery industry and is presented on an
    adjusted basis to assist in understanding our operating results,
    specifically the ability of our operations to generate cash in
    addition to the cash needed to service existing interest
    requirements and ongoing tax obligations. By providing a measure
    of available cash, management believes that this non-GAAP
    measure enables analysts and holders of our outstanding senior
    subordinated indebtedness to better understand our cash
    performance and our ability to service our debt obligations as
    they currently exist and as additional indebtedness is incurred
    in the future. Management believes that analysts and investors
    may use adjusted EBITDA to compare the Company&#146;s operating
    performance to that of certain of our competitors who do not own
    real estate and, thus, would not have depreciation and
    amortization expense of the level experienced by the Company.
    Further, management uses this measure, among others, for
    purposes of budgeting, as an aid in determining appropriate
    capital
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>
</DIV>

<P align="center"><FONT size="2">10
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD align="left">
    <FONT size="2">expenditures each fiscal year and to evaluate our
    continuing compliance with maintenance covenants under certain
    of our lines of credit. The measure is useful in budgeting and
    determining capital expenditure levels because it enables
    management to evaluate the amount of cash that will be available
    for discretionary spending. With respect to the Company&#146;s
    debt instruments, the measure is used to evaluate our compliance
    with certain maintenance covenants in lines of credit. Several
    of our lines of credit require that we maintain a ratio of net
    debt to EBITDA of 5.25 to 1.0 through September 2004 and 5.1 to
    1.0 thereafter. These lines of credit define EBITDA in the same
    manner as adjusted EBITDA is defined above, with the exception
    of limiting extraordinary items to $15&nbsp;million. Based on
    current financial performance the calculations are identical.
    The Company is in compliance with, and expects to continue to
    comply with, these maintenance covenants.
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Adjusted EBITDA is not intended to represent cash
    flow from operations as defined by GAAP, and is not necessarily
    indicative of cash available to fund all cash flow needs.
    Furthermore, it should not be considered as an alternative to
    net income under GAAP for purposes of evaluating our results of
    operations. A reconciliation of Adjusted EBITDA to net income
    and net cash provided by operations, the most directly
    comparable GAAP measures, is provided below. Because Adjusted
    EBITDA is not calculated identically by all companies, the
    presentation herein may not be comparable to other similarly
    titled measures of other companies.
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="22%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="19"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">Fiscal Year Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Nine Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(52 Weeks)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(53 Weeks)</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(52 Weeks)</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(39 Weeks)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;26,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;25,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;29,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;28,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;29,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;28,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="27"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="27" align="center" nowrap><B><FONT size="1">(Dollars in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="1">Reconciliation of Net Income<BR>
    to Adjusted EBITDA:</FONT></B></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Net Income
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,163</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">18,750</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">21,091</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">17,850</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">14,733</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">10,981</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">10,204</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Add:
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Interest Expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">40,117</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">39,785</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">41,226</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">42,903</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">51,540</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">39,456</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">38,081</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Income Taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,300</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">11,400</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">13,100</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">10,350</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">8,700</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">6,550</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,800</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Depreciation and amortization
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">45,616</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">41,923</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">43,532</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">45,266</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">48,312</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">36,072</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">38,183</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">EBITDA
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">92,196</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">111,858</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">118,949</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">116,369</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">123,285</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">93,059</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">92,268</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Add:
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Non-recurring charge*
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">14,637</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Extraordinary Item
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">562</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Adjusted EBITDA
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">106,833</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">111,858</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">118,949</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">116,369</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">123,847</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">93,059</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">92,268</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<FONT size="2">*&nbsp;See footnote (2) above
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
</DIV>

<P align="center"><FONT size="2">11
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<FONT size="2">Reconciliation of Net Cash Provided by Operations
to Adjusted EBITDA
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="28%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">Fiscal Year Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Nine Months Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(52&nbsp;Weeks)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(53&nbsp;Weeks)</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(52&nbsp;Weeks)</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(39&nbsp;Weeks)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;26,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;25,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;29,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sept.&nbsp;28,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;29,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;28,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="27"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="27" align="center" nowrap><B><FONT size="1">(Dollars in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Net cash provided by operating activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">71,419</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">59,437</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">42,279</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">47,660</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">52,012</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">36,993</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">29,015</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Adjustments to reconcile cash provided by
    operating activities to Adjusted EBITDA:
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Interest expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">40,117</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">39,785</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">41,226</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">42,903</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">51,540</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">39,456</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">38,081</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Income tax provision
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,300</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">11,400</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">13,100</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">10,350</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">8,700</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">6,550</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">5,800</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Change in working capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(11,511</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">7,344</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">19,986</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">13,794</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">7,434</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">6,796</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">11,601</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Other, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(360</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,403</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,441</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,351</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,845</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">960</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,558</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Gains on disposals of property and equipment
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,174</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">200</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,682</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,411</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,458</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,275</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,182</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Deferred income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(3,250</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(4,700</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(5,400</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">900</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,200</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,000</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Recognition of advance payments on purchases
    contracts
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,494</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,791</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">4,579</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,675</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">3,515</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,586</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,562</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Receipt of advance payments on purchases contracts
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(800</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(8,252</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(3,644</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(1,375</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(3,557</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(2,757</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(531</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Adjusted EBITDA
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">106,833</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">111,858</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">118,949</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">116,369</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">123,847</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">93,059</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">92,268</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Net debt is calculated as total debt (including
    short-term debt) minus cash and cash equivalents. Adjusted
    EBITDA for the last twelve months is used to calculate the ratio
    of net debt to Adjusted EBITDA for the periods ending
    June&nbsp;29, 2002 and June&nbsp;28, 2003.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Adjusted EBITDA margin is calculated as Adjusted
    EBITDA as defined above divided by net sales. For a
    reconciliation of Adjusted EBITDA see footnote&nbsp;(3) above.
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(6)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The number of stores excludes replacement stores.
    </FONT></TD>
</TR>

</TABLE>
</DIV>

<P align="center"><FONT size="2">12
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "RISK FACTORS" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="center">
<B><FONT size="2">RISK FACTORS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The new notes, like the original notes, entail
the following risks. You should carefully consider these risk
factors, as well as the other information contained in this
prospectus, before exchanging the original notes for the new
notes.
</FONT>

<P align="left">
<B><FONT size="2">Risks Relating to Ingles and Our
Business</FONT></B>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
expansion and renovation plans may not be successful which may
adversely affect our business and financial condition due to the
capital expenditures and management resources required to carry
out our plans.</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have spent, and intend to continue to spend,
significant capital and management resources on the development
and implementation of our expansion and renovation plans. These
plans, if implemented, may not be successful and may not improve
operating results which could adversely affect our cash flow,
business and financial condition due to the significant amount
of capital and management resources invested.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The successful implementation of our renovation
and expansion plans is subject to several factors including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">availability of new, suitable locations on
    reasonable commercial terms, or at all;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the success of our new &#147;prototype
    stores&#148; in our markets;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the profitability of present and future new
    product offerings, including media centers, book sections,
    full-service pharmacies and gas stations;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our ability to manage expansion, including the
    effect of opening a new store on sales at existing stores
    operated nearby;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our ability to secure any necessary financing;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the receipt of necessary zoning approvals;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in regional and national economic
    conditions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changing demographics;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in the laws and government regulations
    applicable to us; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">increasing competition or changes in the
    competitive environment in our markets.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our new stores may initially operate at a loss,
depending on factors such as prevailing competition and our
market position in the surrounding community. The level of sales
and profit margins in our existing stores may not be duplicated
in our new stores. Pursuing a strategy of growth, renovation and
expansion in light of current highly competitive industry
conditions could lead to a near-term decline in earnings as a
result of opening and operating a substantial number of new
stores, particularly with respect to stores in markets where we
do not have an established presence.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our warehouse and distribution center, as
    well as all of our stores, are concentrated in the Southeastern
    United States, which makes us vulnerable to economic downturns,
    natural disasters and other adverse conditions or other
    catastrophic events in this region.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We operate in the Southeastern United States,
with a strong concentration in Georgia, North Carolina, South
Carolina and Tennessee. Our headquarters, warehouse and
distribution center are located in North Carolina and all of our
stores are located in the Southeast region. As a result, our
business is more susceptible to regional factors than the
operations of more geographically diversified competitors. These
factors include, among others, changes in the economy, weather
conditions, demographics and population.
</FONT>

<P align="center"><FONT size="2">13
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our performance is heavily influenced by economic
developments in the Southeast region. Although this area has
experienced economic and demographic growth over the past
several years, a significant economic downturn in the region
could have a material adverse effect on our business, financial
condition or results of operations. Further, a natural disaster
or other catastrophic event, such as a fire, impairing our
warehouse and distribution center in North Carolina could
significantly disrupt our operations. This warehouse and
distribution center supplies our stores with approximately 65%
of the goods sold in our stores.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Losses as a result of our owning and
    developing real estate may impair our ability to focus on and
    expand our core business as desired.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of our real estate holdings, we are
subject to varying degrees of risk and liability generally
incident to the ownership and development of real estate. These
risks and liabilities include, among other things:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">fluctuations in value caused by adverse changes
    in national, regional and local economic conditions, and local
    real estate market conditions (such as an oversupply of or a
    reduction in demand for retail space in the area);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">costs of compliance with zoning, environmental,
    tax and other laws and regulations;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">real estate development risks, such as incorrect
    cost and occupancy estimates, non-availability of financing and
    the need for mortgage lender or property partner approvals for
    certain expansion activities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the risk that our cost of development could
    exceed our revenues from the project;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the perceptions of customers and tenants and
    prospective tenants of the safety, convenience and
    attractiveness of our properties;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the illiquidity of real estate investments and
    our ability to sell or lease any of our properties for cash in a
    timely fashion;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our ability to provide adequate management,
    maintenance and insurance;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">failure to promptly renew leases;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the quality, philosophy and performance of our
    management;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">competition from comparable properties;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the occupancy rate of our properties;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">tenant defaults and the costs of enforcing our
    rights;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our ability to collect on a timely basis all rent
    from tenants;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the effects of any bankruptcies or insolvencies
    of major tenants;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the expense of periodically renovating, repairing
    and re-leasing space;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">increasing operating costs (including increased
    real estate taxes) which may not be passed through fully to
    tenants;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">fluctuations in mortgage interest rates; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the potential for casualty and other losses,
    particularly because we self-insure against such losses.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A failure to adequately deal with these risks and
liabilities could limit our revenues and available cash and
could have a material adverse effect on our business, financial
condition or results of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A significant portion of our properties are
mortgaged to secure payment of indebtedness, and if we were
unable to meet mortgage payments, losses could be sustained as a
result of foreclosure on the
</FONT>

<P align="center"><FONT size="2">14
</FONT>

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<DIV align="left">
<FONT size="2">properties by the various mortgagees. In
addition, if it becomes necessary or desirable for us to dispose
of one or more of the mortgaged properties, we might not be able
to obtain release of the lien on the mortgaged property without
payment of the associated debt. The foreclosure of a mortgage on
a property or the inability to sell a property could adversely
affect our business, financial condition or results of
operations. These considerations could make it difficult for us
to sell properties, even if a sale were in our best interests.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We maintain general liability and excess
liability coverages. We maintain casualty insurance only on
those properties where required to do so. We have elected to
self-insure other properties. Certain types of losses, such as
environmental hazards, however, may be either uninsurable or not
economically insurable. Should an uninsured loss or a loss in
excess of insured limits occur, we could lose our capital
invested in one or more of our properties although we may
continue to be obligated on the mortgage indebtedness or other
obligations related to the property. We could also lose the
anticipated profits from any property severely damaged. Any such
loss may materially adversely affect our business, financial
condition or results of operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our ability to continue to grow our
    operations and perform profitably is dependent on the continued
    services of our senior management and our ability to
    successfully attract and retain highly qualified
    personnel.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We place substantial reliance on the supermarket
industry knowledge and experience and the continued services of
our senior management, including our 69-year-old founder,
Chairman of the Board and Chief Executive Officer, Robert P.
Ingle. Our future success and our ability to manage future
growth depend in large part upon the efforts of these persons
and on our ability to attract and retain other highly qualified
personnel. We do not have employment agreements with members of
our senior management team. In addition, we do not maintain
key-person life insurance on members of our senior management
team. The loss of services of any member of our senior
management or our inability to attract and retain other highly
qualified personnel may materially adversely affect our
business, financial condition or results of operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our principal stockholder, Robert P. Ingle,
    has the ability to elect a majority of our directors, appoint
    new members of management and approve many actions requiring
    shareholder approval.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Ingle&#146;s share ownership represents:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">approximately 86% of the combined voting power of
    all classes of our capital stock;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">approximately 74% of the combined voting power
    without taking into consideration the shares attributed to
    Mr.&nbsp;Ingle in his capacity as one of three trustees of our
    Investment/Profit Sharing Plan; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">approximately 52% of the total number of shares
    of our outstanding Class&nbsp;A Common Stock and Class&nbsp;B
    Common Stock (approximately 45% without taking into
    consideration the shares held under the Investment/Profit
    Sharing Plan).
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result, Mr.&nbsp;Ingle has the power to
elect a majority of our directors and approve any action
requiring the approval of the holders of our Class&nbsp;A Common
Stock and Class&nbsp;B Common Stock, including adopting certain
amendments to our charter and approving mergers or sales of
substantially all of our assets. Currently, four of our ten
directors are members of the Ingle family. Circumstances may
occur in which the interests of Mr.&nbsp;Ingle could be in
conflict with the interests of the holders of the notes.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our ownership and development of real
    estate may subject us to liability under state and federal
    environmental laws.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under applicable environmental laws, as an owner
or developer of real estate we may be responsible for
remediation of environmental conditions and may be subject to
associated liabilities (including liabilities resulting from
lawsuits brought by private litigants) relating to our stores,
including our new gas
</FONT>

<P align="center"><FONT size="2">15
</FONT>

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<DIV align="left">
<FONT size="2">stations, and other buildings and the land on
which stores and other buildings are situated, whether we lease
or own the stores, other buildings or land and whether the
environmental conditions were created by us or by a prior owner
or tenant. The presence of contamination from hazardous or toxic
substances, or the failure to properly remediate such
contaminated property, may adversely affect our ability to sell
or rent real property or to borrow using real property as
collateral.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Federal, state and local governments could enact
laws or regulations concerning environmental matters that affect
our operations or facilities or increase the cost of producing
our products. We believe that we currently conduct operations,
and in the past have conducted operations, in substantial
compliance with applicable environmental laws. We cannot predict
the environmental liabilities that may result from legislation
or regulations adopted in the future, or the administration and
interpretation of such legislation or regulation, the effect of
which could be retroactive. Nor can we predict how existing or
future laws and regulations will be administered or interpreted
or what environmental conditions may be found to exist at
facilities or at other properties where we or our predecessors
have arranged for the disposal of hazardous substances.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Liabilities or costs resulting from noncompliance
with current or future applicable environmental laws or other
claims relating to environmental matters could have a material
adverse effect on our business, financial condition or results
of operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Various aspects of our business are subject
    to federal, state and local laws and regulations. Our compliance
    with these regulations may require additional capital
    expenditures and could adversely affect our ability to conduct
    our business as planned.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are subject to federal, state and local laws
and regulations relating to zoning, land use, environmental
protection, work place safety, public health, community
right-to-know, beer and wine sales, pharmaceutical sales and
gasoline station operations. A number of states and local
jurisdictions regulate the licensing of supermarkets, including
beer and wine license grants. In addition, under certain local
regulations, we are prohibited from selling beer and wine in
certain of our stores. Employers are also subject to laws
governing their relationship with employees, including minimum
wage requirements, overtime, working conditions, disabled access
and work permit requirements. Compliance with, or changes in,
these laws could reduce the revenue and profitability of our
supermarkets and could otherwise adversely affect our business,
financial condition or results of operations. A number of
federal, state and local laws exist which impose burdens or
restrictions on owners with respect to access by disabled
persons. Our compliance with these laws may result in
modifications to our properties, or prevent us from performing
certain further renovations, with respect to access by disabled
persons.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We are affected by increasing labor costs
    and a competitive labor market.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Historically, tight labor markets and overtime
costs have caused our labor costs to increase. We may be
affected by future tight labor markets. Moreover, all of our
stores are located in the Southeastern United States which has
experienced lower average unemployment rates than other parts of
the country, making it more difficult for us to attract and
retain qualified employees. A shortage of qualified employees
may require us to continue to enhance our wage and benefit
package in order to better compete for and retain qualified
employees. No assurance can be given that our labor costs as a
percentage of sales will not increase, that such increase can be
recovered through increased prices charged to customers, or that
we will not continue to have difficulty in hiring qualified
employees.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We are affected by fluctuating utility and
    fuel costs.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Fluctuating fuel costs adversely affect our
operating costs in that we require fuel for our fleet of
tractors and trailers which distribute goods from our warehouse
and distribution facility and our milk processing and packaging
plant to all of our stores. In addition, operations at our
stores, especially our new, larger &#147;prototype&#148; stores,
are sensitive to rising utility fuel costs due to the amount of
electricity and gas
</FONT>

<P align="center"><FONT size="2">16
</FONT>

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<DIV align="left">
<FONT size="2">required to operate our stores. We may not be
able to recover these rising utility and fuel costs through
increased prices charged to our customers.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>We share the
use of trademarks with others.</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Because we share the use of the
&#147;Sealtest,&#148; &#147;Light&nbsp;N&#146; Lively&#148; and
&#147;Pet&#148; trademarks for dairy products with others, we
face the risk that consumer preferences and perceptions with
respect to any of our products using these trademarks may be
influenced by adverse publicity affecting others&#146; products
that also use the &#147;Sealtest,&#148; &#147;Light&nbsp;N&#146;
Lively&#148; or &#147;Pet&#148; brand.
</FONT>

<P align="left">
<B><FONT size="2">Risks Relating to the Supermarket
Industry</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Our industry
is highly competitive. If we are unable to compete effectively,
our financial condition and results of operations could be
materially affected.</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The supermarket industry is highly competitive
and characterized by narrow profit margins. The number and type
of competitors vary by location and include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">national and regional supermarket chains;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">independent and specialty grocers;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">drug and convenience stores; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">&#147;alternative format&#148; food stores, such
    as specialty food stores, retail drug stores, national general
    merchandisers and discount retailers, membership clubs,
    warehouse stores and super centers.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We also face increasing competition from
restaurants and fast food chains due to the increasing
proportion of household food expenditures for food prepared
outside the home. In addition, certain of our stores also
compete with local video stores, florists, book stores,
pharmacies and gas stations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our principal competitors include national and
regional supermarket chains which compete with us on the basis
of location, quality of products, service, price, product
variety and store condition. An overall lack of inflation in
food prices and increasingly competitive markets have made it
difficult generally for grocery store operators to achieve
comparable store sales gains. Because sales growth has been
difficult to attain, our competitors have attempted to maintain
market share through increased levels of promotional activities
and discount pricing, creating a more difficult environment in
which to consistently increase year-over-year sales gains.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We face increased competitive pressure in all of
our markets, including western North Carolina where we maintain
our headquarters, from existing competitors and from the
threatened entry by one or more major new competitors. Some of
our competitors have greater financial resources and are less
leveraged and could use these resources to take measures which
could adversely affect our competitive position. Our business,
financial condition or results of operations could be adversely
affected by competitive factors, including product mix and
pricing changes which may be made in response to competition
from existing or new competitors. From time to time, the
relative strength of our competitors changes depending on
prevailing market conditions. For instance, we now face
increased competition from Wal-Mart super centers located in and
near some of the markets that we serve. These super centers draw
customers from a wide geographic area and may compete with some
of our stores even if not located in close proximity.
</FONT>

<P align="left">
<B><FONT size="2">Risks Relating to the Notes</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Our
substantial indebtedness could adversely affect our financial
health and prevent us from fulfilling our obligations under
these notes.</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have a significant amount of indebtedness and
substantial debt service obligations. As of June&nbsp;28, 2003,
our total indebtedness was approximately $657.5&nbsp;million
(including the notes), or 73% of our capitalization. We also had
$145.0&nbsp;million of availability under our credit facilities.
We and our subsidiaries may be able to incur substantial
additional indebtedness in the future. As of June&nbsp;28, 2003,
we
</FONT>

<P align="center"><FONT size="2">17
</FONT>

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<DIV align="left">
<FONT size="2">have unencumbered property and equipment with a
net book value of approximately $323.6&nbsp;million, which is
available to collateralize additional debt.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our substantial indebtedness could have important
consequences to you. For example, it could:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">make it more difficult for us to satisfy our
    obligations with respect to these notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">increase our vulnerability to general adverse
    economic and industry conditions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">require us to dedicate a substantial portion of
    our cash flow from operations to payments on our indebtedness,
    which would reduce the availability of our cash flow to fund
    working capital, capital expenditures and other general
    corporate needs;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">limit our flexibility in planning for, or
    reacting to, changes in our business and the industry in which
    we operate;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">place us at a competitive disadvantage compared
    to our competitors that have less debt; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">limit, along with the financial and other
    restrictive covenants in our indebtedness, among other things,
    our ability to borrow additional funds.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any failure to comply with covenants in the
instruments governing our debt could result in an event of
default which, if not cured or waived, could have a material
adverse effect on us.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The notes will be effectively subordinated
    to the indebtedness of our subsidiaries.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The notes will effectively be subordinated to all
existing and future liabilities (including trade payables) of
our subsidiaries. Our right to participate in any distribution
of the assets of any of our subsidiaries upon the liquidation,
reorganization or insolvency of our subsidiaries (and the
consequent right of the holders of the notes to participate in
the distribution of those assets) will be subject to the prior
claims of our subsidiaries&#146; creditors (including trade
creditors), except to the extent that we otherwise have a claim
against our subsidiary as a creditor of such subsidiary. As of
June&nbsp;28, 2003 our subsidiaries had aggregate indebtedness
of $29.6&nbsp;million.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Your right to receive payments on these
    notes is junior to our existing indebtedness and possibly all of
    our future borrowings.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These notes rank behind all of our existing
indebtedness (other than trade payables and our previously
issued 8&nbsp;7/8% senior subordinated notes due 2011) and all
of our future borrowings (other than trade payables), except any
future indebtedness that expressly provides that it ranks equal
with, or subordinated in right of payment to, the notes. The
notes will rank equally with our 8&nbsp;7/8% senior subordinated
notes due 2011. As a result, upon any distribution to our
creditors in a bankruptcy, liquidation or reorganization or
similar proceeding relating to us or our property, the holders
of senior indebtedness of our company will be entitled to be
paid in full in cash before any payment may be made with respect
to these notes. In addition, all payments on the notes could be
blocked in the event of a payment default on senior
indebtedness. See &#147;Description of the Notes&nbsp;&#151;
Ranking for Senior Subordinated Notes.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of a bankruptcy, liquidation or
reorganization or similar proceeding relating to our company,
holders of the notes will participate with trade creditors and
all other holders of subordinated indebtedness of Ingles in the
assets remaining after we have paid all of the senior
indebtedness. However, because the indenture requires that
amounts otherwise payable to holders of the notes in a
bankruptcy or similar proceeding be paid to holders of senior
indebtedness instead, holders of the notes may receive less,
ratably, than holders of trade payables in any such proceeding.
In any of these cases, we may not have sufficient funds to pay
all of our creditors and holders of notes may receive less,
ratably, than the holders of senior indebtedness.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;28, 2003, these notes were
subordinated to $307.8&nbsp;million of senior indebtedness and
indebtedness of our subsidiaries which is effectively senior to
the notes and approximately $145.0&nbsp;million would have been
available for borrowing as additional senior indebtedness under
our lines of credit. We
</FONT>

<P align="center"><FONT size="2">18
</FONT>

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<DIV align="left">
<FONT size="2">will be permitted to borrow additional
indebtedness, including senior indebtedness, in the future under
the terms of the indenture.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The notes are not secured.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to being subordinate to our other
senior indebtedness and all indebtedness of our subsidiaries,
the notes will not be secured by any of our assets. Most of our
outstanding senior indebtedness is secured by liens on our
operating assets and the assets of our subsidiaries. We may also
incur additional secured indebtedness in the future without
securing the notes. Therefore, if we become insolvent or are
liquidated, or if payment under these notes is accelerated, the
lenders under such instruments would be entitled to exercise the
remedies available to a secured lender under applicable law and
pursuant to instruments governing such indebtedness.
Accordingly, such lenders would have a prior claim on those of
our assets securing their indebtedness.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Because the notes will not be secured by any of
our assets, it is possible that there would be no assets
remaining from which claims of the holders of the notes could be
satisfied or, if any such assets remained, such assets might be
insufficient to satisfy such claims in full.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our senior debt contains a variety of
    covenants. Our failure to comply with these covenants could
    result in an event of default under the indenture relating to
    the notes.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain of our senior indebtedness requires us to
maintain specified financial ratios and tests, among other
obligations, including a minimum tangible net worth test and a
maximum leverage ratio. In addition, certain of our senior
indebtedness has affirmative and negative covenants customary
for financings of that type. A failure to comply with any of
these covenants could lead to an event of default, which could
result in an acceleration of the indebtedness. Acceleration of
our senior indebtedness would constitute an event of default
under the indenture. If an event of default exists on any of our
senior indebtedness designated in the indenture, subordination
provisions in the indenture may restrict payments to holders of
the notes until holders of senior indebtedness are paid in full
or the default is cured or waived or has ceased to exist. In
addition, the indenture restricts our ability to incur
additional indebtedness, sell assets, create liens or other
encumbrances, make specified payments, including the payment of
dividends (other than a maximum of $0.66 per share of
Class&nbsp;A Common Stock and $0.60 per share of Class&nbsp;B
Common Stock per year) or enter into a merger or consolidation.
A failure to comply with the restrictions in the indenture could
result in an event of default. For additional information see
the description under &#147;Description of Certain
Indebtedness&#148; and the &#147;Description of the
Notes&nbsp;&#151; Certain Covenants.&#148;
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We may not have the ability to raise the
    funds necessary to finance the change of control offer required
    by the indenture.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon the occurrence of certain specific kinds of
change of control events, we will be required to offer to
repurchase all outstanding notes, and each holder of the notes
will have the right to require us, subject to various
conditions, to repurchase all or any part of that holder&#146;s
notes at a price equal to 101% of the principal amount of those
notes, plus accrued and unpaid interest, if any, to the date of
repurchase. In addition, upon certain change of control events,
we may be required to prepay 30% of the outstanding principal
and interest of one of our loan agreements, which would have
been approximately $22.0&nbsp;million at June&nbsp;28, 2003 and
a prepayment penalty, which would have been approximately
$6.6&nbsp;million at June&nbsp;28, 2003, and the lender to one
of our lines of credit may terminate such line of credit.
Further, the repurchase of notes upon a change of control will
constitute a default under another of our lines of credit.
However, it is possible that we will not have sufficient funds,
or be able to obtain the necessary financing, at the time of the
change of control to make the required repurchase of notes and
repayment of debt or that restrictions in one or more of our
credit facilities will not allow such payments. If a change of
control occurred and we did not have sufficient funds or
financing available to pay for the notes and any other
indebtedness ranking equally with the notes that are tendered
for repurchase, an event of default would be triggered under the
notes and under that other outstanding indebtedness. Each of
these defaults could have a material adverse effect on us and
the holders of the notes. In addition, certain important
corporate events, such as leveraged recapitalizations that would
increase the level of our indebtedness, would not
</FONT>

<P align="center"><FONT size="2">19
</FONT>

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<DIV align="left">
<FONT size="2">constitute a &#147;Change of Control&#148; under
the indenture. We have no current intention of engaging in
transactions involving a change of control, although it is
possible that we could decide to do so in the future. For more
information see the descriptions under &#147;Description of
Certain Indebtedness&#148; and &#147;Description of the
Notes&nbsp;&#151; Purchase of Notes Upon a Change of
Control.&#148;
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">If an active trading market does not
    develop for these notes you may not be able to resell
    them.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There is currently no trading market for the
notes offered hereby. We do not intend to list the notes on any
national securities exchange or to seek the admission of the
notes for trading in the NASDAQ National Market. We cannot
assure you that an active trading market for the notes will
develop. If a trading market does not develop, you may
experience difficulty in reselling notes, or you may be unable
to sell them at all. If a market were to exist, the trading
price of notes may be adversely affected by many factors,
including prevailing interest rates and the markets for similar
securities, general economic conditions and our financial
condition, performance and prospects. The liquidity of, and the
trading market for, the notes may be adversely affected by
general declines or disruptions in the market for non-investment
grade debt.
</FONT>

<!-- link1 "FORWARD LOOKING STATEMENTS" -->
<DIV align="left"><A NAME="003"></A></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center">
<B><FONT size="2">FORWARD LOOKING STATEMENTS</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Various statements, estimates, predictions and
projections stated under &#147;Summary,&#148; &#147;Risk
Factors,&#148; &#147;Management&#146;s Discussion and Analysis
of Financial Condition and Results of Operations&#148; and
&#147;Business,&#148; appearing elsewhere and incorporated by
reference in this prospectus, are &#147;forward-looking
statements&#148; within the meaning of Section&nbsp;27A of the
Securities Act and Section&nbsp;21E of the Exchange Act. These
statements appear in a number of places in this prospectus and
the materials incorporated by reference herein and include
statements regarding the intent, belief or current expectations
of Ingles or its officers with respect to, among other things,
the ability to borrow funds under our senior credit facilities,
the ability to successfully implement our operating and growth
strategies, including trends affecting our business, financial
condition and results of operations. While these forward-looking
statements and the related assumptions are made in good faith
and reflect our current judgment regarding the direction of our
business, actual results will almost always vary, sometimes
materially, from any estimates, predictions, projections,
assumptions or other future performance suggested herein. These
statements are based upon a number of assumptions and estimates,
which are inherently subject to significant uncertainties and
contingencies, many of which are beyond our control and reflect
future business decisions, which are subject to change. Some of
these assumptions inevitably will not materialize, and
unanticipated events will occur which will affect our results.
Some important factors (but not necessarily all factors) that
could affect our revenues, growth strategies, future
profitability and operating results, or that otherwise could
cause actual results to differ materially from those expressed
in or implied by any forward-looking statement, include the
following:
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our ability to successfully implement our
    expansion and operating strategies;
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the success or failure of acquisitions and other
    opportunities that we may pursue;
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in the availability of debt or equity
    capital and increases in borrowing costs or interest rates;
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">increased labor, utility and fuel costs;
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in business and economic conditions,
    including weather and demographic changes in our markets;
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">success or failure in the ownership and
    development of real estate;
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in the laws and government regulations
    applicable to us;
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">increased competition; and
    </FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>

<P align="center"><FONT size="2">20
</FONT>

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<P>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the other matters referred to elsewhere in this
    prospectus and in the materials incorporated by reference
    herein, in particular under the heading &#147;Risk Factors.&#148;
    </FONT></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prospective investors are urged to carefully
consider these factors in connection with the forward-looking
statements. We do not intend to publicly release any revisions
to any forward-looking statements contained in this prospectus
to reflect events or circumstances occurring after the date
hereof or to reflect the occurrence of unanticipated events.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">21
</FONT>

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<!-- link1 "THE EXCHANGE OFFER" -->
<DIV align="left"><A NAME="004"></A></DIV>

<P align="center">
<B><FONT size="2">THE EXCHANGE OFFER</FONT></B>

<P align="left">
<B><FONT size="2">Terms of the Exchange Offer</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>General</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We sold the original notes on May&nbsp;29, 2003,
in a transaction exempt from the registration requirements of
the Securities Act of 1933, as amended. The initial purchasers
of the notes subsequently resold the original notes to qualified
institutional buyers in reliance on Rule&nbsp;144A under the
Securities Act.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the sale of original notes to
the initial purchasers pursuant to the Purchase Agreement, dated
May&nbsp;20, 2003, among us and Banc of America Securities LLC,
Wachovia Securities, Inc. and ABN AMRO Incorporated, the holders
of the original notes became entitled to the benefits of a
registration rights agreement dated May&nbsp;29, 2003, among us
and the initial purchasers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the registration rights agreement, we
became obligated to file a registration statement in connection
with an exchange offer within 60&nbsp;days after May&nbsp;29,
2003 and to use our commercially reasonable best efforts to have
the exchange offer registration statement declared effective
within 150&nbsp;days after May&nbsp;29, 2003. The exchange offer
being made by this prospectus, if consummated within the
required time periods, will satisfy our obligations under the
registration rights agreement. This prospectus, together with
the letter of transmittal, is being sent to all beneficial
holders of original notes known to us.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon the terms and subject to the conditions set
forth in this prospectus and in the accompanying letter of
transmittal, we will accept all original notes properly tendered
and not withdrawn prior to the expiration date. We will issue
$1,000 principal amount of new notes in exchange for each $1,000
principal amount of outstanding original notes accepted in the
exchange offer. Holders may tender some or all of their original
notes pursuant to the exchange offer.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based on no-action letters issued by the staff of
the Securities and Exchange Commission to third parties, we
believe that holders of all new notes issued in exchange for
original notes may offer for resale, resell and otherwise
transfer the new notes, other than any holder that is an
affiliate of ours within the meaning of Rule&nbsp;405 under the
Securities Act, without compliance with the registration and
prospectus delivery provisions of the Securities Act. This is
true as long as the new notes are acquired in the ordinary
course of the holder&#146;s business, the holder has no
arrangement or understanding with any person to participate in
the distribution of the new notes and neither the holder nor any
other person is engaging in or intends to engage in a
distribution of the new notes. A broker-dealer that acquired
original notes directly from us cannot exchange the original
notes in the exchange offer. Any holder who tenders in the
exchange offer for the purpose of participating in a
distribution of the new notes cannot rely on the no-action
letters of the staff of the Securities and Exchange Commission
and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale
transaction.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each broker-dealer that receives new notes for
its own account in exchange for original notes, where original
notes were acquired by such broker-dealer as a result of
market-making or other trading activities, must acknowledge that
it will deliver a prospectus in connection with any resale of
such new notes. See &#147;Plan of Distribution&#148; for
additional information.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We shall be deemed to have accepted validly
tendered original notes when, as and if we have given oral or
written notice of the acceptance of such notes to the exchange
agent. The exchange agent will act as agent for the tendering
holders of original notes for the purposes of receiving the new
notes from Ingles and delivering new notes to such holders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If any tendered original notes are not accepted
for exchange because of an invalid tender or the occurrence of
the conditions set forth under
&#147;&#151;&nbsp;Conditions&#148; without waiver by us,
certificates for any such unaccepted original notes will be
returned, without expense, to the tendering holder of any such
original notes as promptly as practicable after the expiration
date.
</FONT>

<P align="center"><FONT size="2">22
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders of original notes who tender in the
exchange offer will not be required to pay brokerage commissions
or fees or, subject to the instructions in the letter of
transmittal, transfer taxes with respect to the exchange of
original notes, pursuant to the exchange offer. We will pay all
charges and expenses, other than certain applicable taxes, in
connection with the exchange offer. See &#147;&#151;&nbsp;Fees
and Expenses.&#148;
</FONT>

<P align="left">
<B><FONT size="2">Shelf Registration Statement</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the registration rights agreement, if
the exchange offer is not completed prior to the date on which
the earliest of any of the following events occurs:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;applicable interpretations of the staff
    of the Securities and Exchange Commission do not permit us to
    effect the exchange offer,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;any holder of notes notifies us that
    either:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;such holder is not permitted to
    participate in the exchange offer, or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;such holder participates in the exchange
    offer and does not receive freely transferable new notes in
    exchange for tendered original notes, or
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;the exchange offer is not completed
    within 180&nbsp;days after May&nbsp;29, 2003, i.e. no later than
    November&nbsp;25, 2003,
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">we will, at our cost:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">file a shelf registration statement covering
    resales of the original notes,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">use our commercially reasonable best efforts to
    cause the shelf registration statement to be declared effective
    under the Securities Act at the earliest possible time, but no
    later than 90&nbsp;days (or 30&nbsp;days if the Securities and
    Exchange Commission chooses not to review the shelf registration
    statement) after the time such obligation to file arises, and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">use our commercially reasonable best efforts to
    keep effective the shelf registration statement until the
    earlier of two years after May&nbsp;29, 2003, or the time when
    all of the applicable original notes have been sold pursuant to
    the shelf registration statement or are no longer outstanding.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If any of the events described occurs, we will
refuse to accept any original notes and will return all tendered
original notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will, if and when we file the shelf
registration statement, provide to each holder of the original
notes copies of the prospectus which is a part of the shelf
registration statement, notify each holder when the shelf
registration statement has become effective and take other
actions as are required to permit unrestricted resale of the
original notes. A holder that sells original notes pursuant to
the shelf registration statement generally must be named as a
selling security holder in the related prospectus and must
deliver a prospectus to purchasers. The seller will be subject
to civil liability provisions under the Securities Act in
connection with these sales. A seller of the original notes also
will be bound by applicable provisions of the registration
rights agreement, including indemnification obligations. In
addition, each holder of original notes must deliver information
to be used in connection with the shelf registration statement
and provide comments on the shelf registration statement in
order to have its original notes included in the shelf
registration statement and benefit from the provisions regarding
any liquidated damages in the registration rights agreement.
</FONT>

<P align="left">
<B><FONT size="2">Increase in Interest Rate</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;the registration statement, of which
    this prospectus is a part, has not been declared effective by
    the Securities and Exchange Commission within 150&nbsp;days of
    May&nbsp;29, 2003, i.e. no later than October&nbsp;26, 2003, and
    we have not used or are not continuing to use our reasonable
    best efforts to cause the registration statement to become
    effective, or
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">23
</FONT>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;the exchange offer has not been
    completed within 180&nbsp;days of the issuance of the original
    notes, i.e. no later than November&nbsp;25, 2003, or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;we are required to file the shelf
    registration statement and either
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;the shelf registration statement has not
    become effective or been declared effective on or before the
    90th calendar day (or 30th calendar day if the Securities and
    Exchange Commission chooses not to review the shelf registration
    statement) following the date the obligation to file such shelf
    registration statement first arose, or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;the shelf registration statement has
    been declared effective but later becomes unusable for more than
    30&nbsp;days in the aggregate,
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">the interest rate borne by the original notes
will be increased by 0.25% per year for each 90&nbsp;days of
default with an aggregate maximum increase equal to 1.0% per
year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The sole remedy available to the holders of the
original notes will be the immediate increase in the interest
rate on the original notes as described above. Any amounts of
additional interest due as described above will be payable in
cash on the same interest payments dates as the original notes.
</FONT>

<P align="left">
<B><FONT size="2">Expiration Date; Extensions;
Amendment</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will keep the exchange offer open for not less
than 30&nbsp;days, or longer if required by applicable law,
after the date on which notice of the exchange offer is mailed
to the holders of the old notes. The term &#147;expiration
date&#148; means the expiration date set forth on the cover page
of this prospectus, unless we extend the exchange offer, in
which case the term &#147;expiration date&#148; means the latest
date to which the exchange offer is extended.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to extend the expiration date, we will
notify the exchange agent of any extension by oral or written
notice and will issue a public announcement of the extension,
each prior to 5:00&nbsp;p.m., New York City time, on the next
business day after the previously scheduled expiration date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We reserve the right
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to delay accepting any original notes, to extend
    the exchange offer or to terminate the exchange offer and not
    accept original notes not previously accepted if any of the
    conditions set forth under &#147;&#151;&nbsp;Conditions&#148;
    shall have occurred and shall not have been waived by us, if
    permitted to be waived by us, by giving oral or written notice
    of such delay, extension or termination to the exchange agent, or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">amend the terms of the exchange offer in any
    manner deemed by us to be advantageous to the holders of the
    original notes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any delay in acceptance, extension, termination
or amendment will be followed as promptly as practicable by oral
or written notice. If the exchange offer is amended in a manner
determined by us to constitute a material change, we promptly
will disclose such amendment in a manner reasonably calculated
to inform the holders of the original notes of such amendment.
Depending upon the significance of the amendment, we may extend
the exchange offer if it otherwise would expire during such
extension period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Without limiting the manner in which we may
choose to make a public announcement of any extension, amendment
or termination of the exchange offer, we will not be obligated
to publish, advertise, or otherwise communicate any such
announcement, other than by making a timely release to an
appropriate news agency.
</FONT>

<P align="left">
<B><FONT size="2">Procedures for Tendering</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To tender in the exchange offer, a holder must
complete, sign and date the letter of transmittal, or a
facsimile of the letter of transmittal, have the signatures on
the letter of transmittal guaranteed if required by
instruction&nbsp;2 of the letter of transmittal, and mail or
otherwise deliver such letter of transmittal or such
</FONT>

<P align="center"><FONT size="2">24
</FONT>

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<DIV align="left">
<FONT size="2">facsimile or an agent&#146;s message in
connection with a book entry transfer, together with the
original notes and any other required documents. To be validly
tendered, such documents must reach the exchange agent before
5:00&nbsp;p.m., New York City time, on the expiration date.
Delivery of the original notes may be made by book-entry
transfer in accordance with the procedures described below.
Confirmation of such book-entry transfer must be received by the
exchange agent prior to the expiration date.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The term &#147;agent&#146;s message&#148; means a
message, transmitted by a book-entry transfer facility to, and
received by, the exchange agent, forming a part of a
confirmation of a book-entry transfer, which states that such
book-entry transfer facility has received an express
acknowledgment from the participant in such book-entry transfer
facility tendering the original notes that such participant has
received and agrees to be bound by the terms of the letter of
transmittal and that we may enforce such agreement against such
participant.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The tender by a holder of original notes will
constitute an agreement between such holder and Ingles in
accordance with the terms and subject to the conditions set
forth in this prospectus and in the letter of transmittal.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Delivery of all documents must be made to the
exchange agent at its address set forth below. Holders may also
request their respective brokers, dealers, commercial banks,
trust companies or nominees to effect such tender for such
holders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The method of delivery of original notes and
the letter of transmittal and all other required documents to
the exchange agent is at the election and risk of the holders.
Instead of delivery by mail, it is recommended that holders use
an overnight or hand delivery service. In all cases, sufficient
time should be allowed to assure timely delivery to the exchange
agent before 5:00&nbsp;p.m., New York City time, on the
expiration date. No letter of transmittal or original notes
should be sent to Ingles.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Only a holder of original notes may tender
original notes in the exchange offer. The term
&#147;holder&#148; with respect to the exchange offer means any
person in whose name original notes are registered on our books
or any other person who has obtained a properly completed bond
power from the registered holder.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any beneficial holder whose original notes are
registered in the name of its broker, dealer, commercial bank,
trust company or other nominee and who wishes to tender should
contact such registered holder promptly and instruct such
registered holder to tender on its behalf. If such beneficial
holder wishes to tender on its own behalf, such registered
holder must, prior to completing and executing the letter of
transmittal and delivering its original notes, either make
appropriate arrangements to register ownership of the original
notes in such holder&#146;s name or obtain a properly completed
bond power from the registered holder. The transfer of record
ownership may take considerable time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Signatures on a letter of transmittal or a notice
of withdrawal, must be guaranteed by a member firm of a
registered national securities exchange or of the National
Association of Securities Dealers, Inc. or a commercial bank or
trust company having an office or correspondent in the United
States referred to as an &#147;eligible institution&#148;,
unless the original notes are tendered
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;by a registered holder who has not
    completed the box entitled &#147;Special Issuance
    Instructions&#148; or &#147;Special Delivery Instructions&#148;
    on the letter of transmittal or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;for the account of an eligible
    institution. In the event that signatures on a letter of
    transmittal or a notice of withdrawal, are required to be
    guaranteed, such guarantee must be by an eligible institution.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the letter of transmittal is signed by a
person other than the registered holder of any original notes
listed therein, such original notes must be endorsed or
accompanied by appropriate bond powers and a proxy which
authorizes such person to tender the original notes on behalf of
the registered holder, in each case signed as the name of the
registered holder or holders appears on the original notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the letter of transmittal or any original
notes or bond powers are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or
</FONT>

<P align="center"><FONT size="2">25
</FONT>

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<DIV align="left">
<FONT size="2">representative capacity, such persons should so
indicate when signing, and unless waived by us, evidence
satisfactory to us of their authority so to act must be
submitted with the letter of transmittal.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All questions as to the validity, form,
eligibility, including time of receipt, and withdrawal of the
tendered original notes will be determined by us in our sole
discretion, which determination will be final and binding. We
reserve the absolute right to reject any and all original notes
not properly tendered or any original notes our acceptance of
which, in the opinion of counsel for us, would be unlawful. We
also reserve the right to waive any irregularities or conditions
of tender as to particular original notes. Our interpretation of
the terms and conditions of the exchange offer, including the
instructions in the letter of transmittal, will be final and
binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of original notes must
be cured within such time as we shall determine. None of Ingles,
the exchange agent or any other person shall be under any duty
to give notification of defects or irregularities with respect
to tenders of original notes, nor shall any of them incur any
liability for failure to give such notification. Tenders of
original notes will not be deemed to have been made until such
irregularities have been cured or waived. Any original notes
received by the exchange agent that are not properly tendered
and as to which the defects or irregularities have not been
cured or waived will be returned without cost to such holder by
the exchange agent to the tendering holders of original notes,
unless otherwise provided in the letter of transmittal, as soon
as practicable following the expiration date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, we reserve the right in our sole
discretion to
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">purchase or make offers for any original notes
    that remain outstanding subsequent to the expiration date or, as
    set forth under &#147;&#151;&nbsp;Conditions,&#148; to terminate
    the exchange offer in accordance with the terms of the
    registration rights agreement and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to the extent permitted by applicable law,
    purchase original notes in the open market, in privately
    negotiated transactions or otherwise. The terms of any such
    purchases or offers may differ from the terms of the exchange
    offer.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">By tendering, each holder will represent to us
that, among other things,
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the new notes acquired pursuant to the exchange
    offer are being obtained in the ordinary course of business of
    such holder or other person,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">neither such holder nor such other person is
    engaged in or intends to engage in a distribution of the new
    notes,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">neither such holder or other person has any
    arrangement or understanding with any person to participate in
    the distribution of such new notes, and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">such holder or other person is not our
    &#147;affiliate,&#148; as defined under Rule&nbsp;405 of the
    Securities Act, or, if such holder or other person is such an
    affiliate, will comply with the registration and prospectus
    delivery requirements of the Securities Act to the extent
    applicable.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We understand that the exchange agent will make a
request promptly after the date of this prospectus to establish
accounts with respect to the original notes at The Depository
Trust Company for the purpose of facilitating the exchange
offer, and subject to the establishment of such accounts, any
financial institution that is a participant in The Depository
Trust Company&#146;s system may make book-entry delivery of
original notes by causing The Depository Trust Company to
transfer such original notes into the exchange agent&#146;s
account with respect to the original notes in accordance with
The Depository Trust Company&#146;s procedures for such
transfer. Although delivery of the original notes may be
effected through book-entry transfer into the exchange
agent&#146;s account at The Depository Trust Company, an
appropriate letter of transmittal properly completed and duly
executed with any required signature guarantee, or an
agent&#146;s message in lieu of the letter of transmittal, and
all other required documents must in each case be transmitted to
and received or confirmed by the exchange agent at its address
set forth below on or prior to the expiration date, or, if the
guaranteed delivery procedures described below are complied
with, within the time period provided under such procedures.
Delivery of documents to The Depository Trust Company does not
constitute delivery to the exchange agent.
</FONT>

<P align="center"><FONT size="2">26
</FONT>

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<P align="left">
<B><FONT size="2">Guaranteed Delivery Procedures</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders who wish to tender their original notes
and
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;whose original notes are not immediately
    available or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;who cannot deliver their original notes,
    the letter of transmittal or any other required documents to the
    exchange agent prior to the expiration date, may effect a tender
    if:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;the tender is made through an eligible
    institution;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;prior to the expiration date, the
    exchange agent receives from such eligible institution a
    properly completed and duly executed Notice of Guaranteed
    Delivery, by facsimile transmission, mail or hand delivery,
    setting forth the name and address of the holder of the original
    notes, the certificate number or numbers of such original notes
    and the principal amount of original notes tendered, stating
    that the tender is being made thereby, and guaranteeing that,
    within three business days after the expiration date, the letter
    of transmittal, or facsimile thereof or agent&#146;s message in
    lieu of the letter of transmittal, together with the
    certificate(s) representing the original notes to be tendered in
    proper form for transfer and any other documents required by the
    letter of transmittal will be deposited by the eligible
    institution with the exchange agent; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;such properly completed and executed
    letter of transmittal (or facsimile thereof) together with the
    certificate(s) representing all tendered original notes in
    proper form for transfer and all other documents required by the
    letter of transmittal are received by the exchange agent within
    three business days after the expiration date.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Withdrawal of Tenders</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except as otherwise provided in this prospectus,
tenders of original notes may be withdrawn at any time prior to
5:00&nbsp;p.m., New York City time, on the expiration date.
However, where the expiration date has been extended, tenders of
original notes previously accepted for exchange as of the
original expiration date may not be withdrawn.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To withdraw a tender of original notes in the
exchange offer, a written or facsimile transmission notice of
withdrawal must be received by the exchange agent at its address
set forth in this prospectus prior to 5:00&nbsp;p.m., New York
City time, on the expiration date. Any such notice of withdrawal
must:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;specify the name of the depositor, who
    is the person having deposited the original notes to be
    withdrawn,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;identify the original notes to be
    withdrawn, including the certificate number or numbers and
    principal amount of such original notes or, in the case of
    original notes transferred by book-entry transfer, the name and
    number of the account at The Depository Trust Company to be
    credited,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;be signed by the depositor in the same
    manner as the original signature on the letter of transmittal by
    which such original notes were tendered, including any required
    signature guarantees, or be accompanied by documents of transfer
    sufficient to have the trustee with respect to the original
    notes register the transfer of such original notes into the name
    of the depositor withdrawing the tender and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(d)&nbsp;specify the name in which any such
    original notes are to be registered, if different from that of
    the depositor. All questions as to the validity, form and
    eligibility, including time of receipt, of such withdrawal
    notices will be determined by us, and our determination shall be
    final and binding on all parties. Any original notes so
    withdrawn will be deemed not to have been validly tendered for
    purposes of the exchange offer and no new notes will be issued
    with respect to the original notes withdrawn unless the original
    notes so withdrawn are validly re-tendered. Any original notes
    which have been tendered but which are not accepted for exchange
    will be returned to its holder without cost to such holder as
    soon as practicable after withdrawal, rejection of tender or
    termination of the exchange offer. Properly withdrawn original
    notes may be re-tendered by following one of the
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">27
</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">procedures described above under
    &#147;&#151;&nbsp;Procedures for Tendering&#148; at any time
    prior to the expiration date.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Conditions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notwithstanding any other term of the exchange
offer, we will not be required to accept for exchange, or
exchange, any new notes for any original notes, and may
terminate or amend the exchange offer before the expiration
date, if the exchange offer violates any applicable law or
interpretation by the staff of the Securities and Exchange
Commission.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we determine in our reasonable discretion that
the foregoing condition exists, we may
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;refuse to accept any original notes and
    return all tendered original notes to the tendering holders,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;extend the exchange offer and retain all
    original notes tendered prior to the expiration of the exchange
    offer, subject, however, to the rights of holders who tendered
    such original notes to withdraw their tendered original notes, or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;waive such condition, if permissible,
    with respect to the exchange offer and accept all properly
    tendered original notes which have not been withdrawn. If such
    waiver constitutes a material change to the exchange offer, we
    will promptly disclose such waiver by means of a prospectus
    supplement that will be distributed to the holders, and we will
    extend the exchange offer as required by applicable law.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Exchange Agent</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">U.S. Bank, N.A. has been appointed as exchange
agent for the exchange offer. Questions and requests for
assistance and requests for additional copies of this prospectus
or of the letter of transmittal should be directed to U.S. Bank,
N.A. addressed as follows:
</FONT>

<P align="center">
<FONT size="2">For Information by Telephone:
</FONT>

<DIV align="center">
<FONT size="2">(800)&nbsp;934-6802
</FONT>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="66%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">By Overnight Courier
    or<BR>&nbsp;&nbsp;Registered/Certified Mail:<BR>
    U.S. Bank, N.A.<BR>
    Corporate Trust Department<BR>
    60 Livingston Avenue<BR>
    St. Paul, MN 55107-2292<BR>
    Attention: Mr.&nbsp;Frank Leslie
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By Hand:<BR>
    U.S. Bank, N.A.<BR>
    Corporate Trust Department<BR>
    60 Livingston Avenue<BR>
    St. Paul, MN 55107-2292<BR>
    Attention:&nbsp;Mr.&nbsp;Frank Leslie
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">By Facsimile Transmission:
</FONT>

<DIV align="center">
<FONT size="2">(651)&nbsp;495-8097
</FONT>
</DIV>

<DIV align="center">
<FONT size="2">(Telephone Confirmation)
</FONT>
</DIV>

<DIV align="center">
<FONT size="2">(800)&nbsp;934-6802
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">U.S. Bank, N.A. also serves as the trustee under
the indenture governing the notes.
</FONT>

<P align="left">
<B><FONT size="2">Fees and Expenses</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have agreed to bear the expenses of the
exchange offer pursuant to the exchange and registration rights
agreements. We have not retained any dealer-manager in
connection with the exchange offer and will not make any
payments to brokers, dealers or others soliciting acceptances of
the exchange offer. We, however, will pay the exchange agent
reasonable and customary fees for its services and will
reimburse it for its reasonable out-of-pocket expenses in
connection with providing the services.
</FONT>

<P align="center"><FONT size="2">28
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The cash expenses to be incurred in connection
with the exchange offer will be paid by us. Such expenses
include fees and expenses of U.S. Bank, N.A. as exchange agent,
accounting and legal fees and printing costs, among others.
</FONT>

<P align="left">
<B><FONT size="2">Accounting Treatment</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The new notes will be recorded at the same
carrying value as the original notes as reflected in our
accounting records on the date of exchange. Accordingly, no gain
or loss for accounting purposes will be recognized by us. The
expenses of the exchange offer and the unamortized expenses
related to the issuance of the original notes will be amortized
over the term of the notes.
</FONT>

<P align="left">
<B><FONT size="2">Consequences of Failure to Exchange</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders of original notes who are eligible to
participate in the exchange offer but who do not tender their
original notes will not have any further registration rights,
and their original notes will continue to be subject to
restrictions on transfer. Accordingly, such original notes may
be resold only
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">to us, upon redemption of these notes or
    otherwise,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">so long as the original notes are eligible for
    resale pursuant to Rule&nbsp;144A under the Securities Act, to a
    person inside the United States whom the seller reasonably
    believes is a qualified institutional buyer within the meaning
    of Rule&nbsp;144A in a transaction meeting the requirements of
    Rule&nbsp;144A,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">in accordance with Rule&nbsp;144 under the
    Securities Act, or under another exemption from the registration
    requirements of the Securities Act, and based upon an opinion of
    counsel reasonably acceptable to us,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">outside the United States to a foreign person in
    a transaction meeting the requirements of Rule&nbsp;904 under
    the Securities Act, or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">under an effective registration statement under
    the Securities Act,
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">in each case in accordance with any applicable
securities laws of any state of the United States.
</FONT>

<P align="left">
<B><FONT size="2">Regulatory Approvals</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We do not believe that the receipt of any
material federal or state regulatory approval will be necessary
in connection with the exchange offer, other than the
effectiveness of the exchange offer registration statement under
the Securities Act.
</FONT>

<P align="left">
<B><FONT size="2">Other</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Participation in the exchange offer is voluntary
and holders of original notes should carefully consider whether
to accept the terms and conditions of this exchange offer.
Holders of the original notes are urged to consult their
financial and tax advisors in making their own decisions on what
action to take with respect to the exchange offer.
</FONT>

<P align="center"><FONT size="2">29
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "DESCRIPTION OF CERTAIN INDEBTEDNESS" -->
<DIV align="left"><A NAME="005"></A></DIV>

<P align="center">
<B><FONT size="2">DESCRIPTION OF CERTAIN INDEBTEDNESS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise specified, Ingles Markets,
Incorporated is the sole borrower under each facility described
below.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our consolidated outstanding indebtedness as of
June&nbsp;28, 2003 aggregated $657.5&nbsp;million. Our
outstanding indebtedness as of June&nbsp;28, 2003, other than
the outstanding 8&nbsp;7/8% Senior Subordinated Notes due 2011,
included:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="61%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total Amount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total Commitment</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Facility</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Outstanding</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(Dollars in millions)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Unsecured lines of credit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">145.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Secured loans to Ingles
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">278.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">278.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Secured loan to Sky King, Inc.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Secured loans to Shopping Center Financing, LLC
    and Shopping Center Financing II, LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">307.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">452.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Lines of Credit</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Ingles has a total of five lines of credit, all
of which are unsecured. As of June&nbsp;28, 2003, there were no
borrowings outstanding under these lines of credit. Ingles used
a portion of the proceeds from the original notes to repay all
amounts outstanding under its lines of credit, and in connection
with that offering negotiated certain extensions to its lines of
credit. As of the date hereof, Ingles has aggregate availability
of $145.0&nbsp;million under our lines of credit. Of these lines
of credit, $120.0&nbsp;million of availability matures in
October 2006 and the remainder matures between November 2003 and
November 2004. Under the lines of credit, Ingles may choose
among various interest rate options. Generally, the interest
rate options are related to LIBOR plus 1% to 1.5%, the Prime
Rate or the Federal Funds Rate.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The lines of credit contain customary operational
covenants, including but not limited to, covenants:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">restricting Ingles&#146; ability to act as a
    guarantor;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">providing for cross-default provisions;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">requiring Ingles to provide periodic financial
    statements;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">granting the lenders access to Ingles&#146; books
    and records;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">requiring Ingles to maintain insurance coverage;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">restricting Ingles&#146; ability to prepay,
    purchase or redeem the notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">requiring Ingles to continue conducting its
    business in substantially the same manner as carried on prior to
    obtaining the lines of credit; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">requiring Ingles to maintain its property and
    assets in good working condition.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The lines of credit also contain financial
covenants which among other things require Ingles to maintain:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">minimum levels of consolidated tangible net worth;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a specified ratio of total liabilities to
    consolidated tangible net worth;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a specified consolidated fixed charge coverage
    ratio; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a specified consolidated net debt to EBITDA ratio.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">30
</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the most restrictive of these covenants,
Ingles is required to maintain:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a consolidated tangible net worth of at least
    $200&nbsp;million;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a total liability (excluding subordinated debt)
    to consolidated tangible net worth ratio of not more than
    3.10:1.00;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a consolidated fixed charge coverage ratio of at
    least 1.00:1.00; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a consolidated net debt to EBITDA ratio of
    5.1:1.0.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the provisions of certain of our lines of
credit, in the event that Ingles enters into or amends any
guarantee, indenture or other financing agreement containing
financial covenants more favorable to the lender than the
financial covenants contained in the line of credit, then the
lender under the line of credit has the option to amend the line
of credit to provide for those more favorable financial
covenants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The lines of credit also contain customary events
of default. An event of default under the lines of credit will
allow the lenders to accelerate or, in some cases, will
automatically cause the acceleration of the maturity of the debt
under the lines of credit. One line of credit, in particular,
allows the lender to terminate in the event that Robert P. Ingle
and the Ingles Markets, Incorporated Investment/Profit Sharing
Plan and Trust, in the aggregate, fail to maintain 51% of the
voting control of Ingles.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Many of the lines of credit require Ingles to pay
a commitment fee on the unused portion of the line of credit.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The provisions of one of our lines of credit
prohibit Ingles from obtaining letters of credit from any other
lender without the approval of the bank.
</FONT>

<P align="left">
<B><FONT size="2">Other Loans</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Ingles is a party to certain secured loan
agreements which have maturity dates ranging from
January&nbsp;1, 2004 to July&nbsp;1, 2018. In connection with
these loans, Ingles granted the lenders security interests in
the real property and personal property of many of Ingles&#146;
stores.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Many of the loan agreements described above place
restrictions on Ingles&#146; ability to dispose of the secured
property or to place additional liens on the secured property.
In addition, many of the loan agreements provide that Ingles
will be in default under a particular loan agreement if Ingles
is in default under its other loan agreements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the terms of a $50.7&nbsp;million master
lease agreement Ingles may be required to repurchase all of the
equipment subject to the agreement if:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Ingles is a party to a merger or consolidation;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Ingles conveys or leases substantially all of
    assets, as an entirety, to any person; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">as a result of, or in connection with, a material
    change in the ownership of Ingles&#146; capital stock,
    Ingles&#146; debt-to-net worth ratio equals or exceeds 2.2x.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The provisions of another loan agreement, which
as of June&nbsp;28, 2003 had an outstanding balance of
approximately $71.2&nbsp;million, allow the lender to require
Ingles to prepay 30% of the outstanding principal, as well as
interest and a pre-payment fee, in the event that there is a
change in control, which is defined as the acquisition by a
person of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">all or substantially all of Ingles&#146;
    property; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the power to elect at least a majority of
    Ingles&#146; board of directors.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Shopping Center Financing, LLC, which is
wholly-owned by Ingles, is a party to a $14.8&nbsp;million loan
agreement. The loan is secured by three shopping centers which
are managed by Ingles. Under the terms of the loan agreement,
if, among other things, the debt service coverage ratio of the
three shopping centers for the immediately preceding
12&nbsp;months is less than 1.10 to 1.0, then the lender may
replace Ingles as
</FONT>

<P align="center"><FONT size="2">31
</FONT>
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<DIV align="left">
<FONT size="2">the manager of the properties. Furthermore, the
terms of the loan agreement prohibit Shopping Center Financing,
LLC from guaranteeing the debt of any other person or entity,
including Ingles. Shopping Center Financing II, LLC, which is
wholly-owned by Ingles, is also a party to a $13.2&nbsp;million
loan agreement which is secured by four shopping centers managed
by Ingles. The terms of the loan agreement between Shopping
Center Financing&nbsp;II, LLC and the lender contain the same
restriction on Shopping Center Financing&nbsp;II, LLC&#146;s
ability to act as a guarantor and require Shopping Center
Financing&nbsp;II, LLC to maintain a debt service coverage ratio
below 1.10 to 1.0. In the event that Shopping Center
Financing&nbsp;II, LLC fails to meet the debt service coverage
ratio, the lender may replace Ingles as the manager of the four
shopping centers. Both of these shopping center loans and
mortgages are cross-defaulted and cross-collateralized with each
other.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additionally, many of the loan agreements
prohibit repayment of the loans prior to the expiration of a
certain period of time, typically, two years from the date of
the loan. Many of the loan agreements also require Ingles to pay
a penalty in the event Ingles wishes to prepay the outstanding
balance of the loan prior to maturity.
</FONT>

<P align="center"><FONT size="2">32
</FONT>

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<!-- link1 "DESCRIPTION OF THE NOTES" -->
<DIV align="left"><A NAME="006"></A></DIV>

<P align="center">
<B><FONT size="2">DESCRIPTION OF THE NOTES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The original notes were issued and the new notes
will be issued under the Indenture dated as of December&nbsp;11,
2001 between the Company and U.S. Bank, N.A., as Trustee. The
terms of the Notes include those stated in the Indenture and
those made a part of the Indenture by reference to the Trust
Indenture Act of 1939. References in this section to the
&#147;Company&#148; means Ingles Markets, Incorporated without
its subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The form and terms of the new notes are the same
in all material respects as the form and terms of the original
notes, except that the new notes will have been registered under
the Securities Act of 1933 and, therefore, will not bear legends
restricting their transfer. The original notes have not been
registered under the Securities Act of 1933 and are subject to
certain transfer restrictions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following description is a summary of the
material provisions of the Indenture. It does not restate the
Indenture in its entirety. A copy of the form of indenture will
be made available to you upon request to the Company as set
forth under &#147;&#151;&nbsp;Additional Information.&#148; For
definitions of certain capitalized terms used in the following
summary, see &#147;&#151;&nbsp;Certain Definitions.&#148;
</FONT>

<P align="left">
<B><FONT size="2">Maturity, Principal and Interest</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Indenture governing our $250.0&nbsp;million
8&nbsp;7/8% Senior Subordinated Notes due 2011 issued in
December 2001 permitted the issuance from time to time of
additional notes in the aggregate principal amount of
$100.0&nbsp;million ranking equally with any outstanding notes
issued under the Indenture. The $100.0 million principal amount
of notes issued at the original note closing were issued
pursuant to this provision of the Indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The $100.0&nbsp;million principal amount of Notes
offered in exchange for the original notes will be identical to
the original notes (except for transfer restrictions applicable
to the original notes) and our outstanding $250.0 million
principal amount of 8&nbsp;7/8% Senior Subordinated Notes due
2011. The outstanding notes and the exchange notes are treated
as a single class for all purposes under the Indenture. For
purposes of this &#147;Description of the Notes,&#148;
references to the Notes include the outstanding
$250.0&nbsp;million principal amount of 8&nbsp;7/8% Senior
Subordinated Notes due 2011, the original notes and the exchange
notes, unless otherwise indicated.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Notes are unsecured senior subordinated
obligations of the Company. Each Note will bear interest at the
rate of 8&nbsp;7/8% per annum from May&nbsp;29, 2003 or from the
most recent interest payment date on which interest has been
paid, payable semiannually in arrears on June 1 and December 1
in each year, commencing June&nbsp;1, 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company will pay interest to the Person in
whose name the Note (or any predecessor Note) is registered at
the close of business on the May&nbsp;15 or November&nbsp;15
immediately preceding the relevant interest payment date.
Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Notes will be issued only in fully registered
form without coupons, in denominations of $1,000 and any
integral multiple of $1,000. No service charge will be made for
any registration of transfer, exchange or redemption of Notes,
except in certain circumstances for any tax or other
governmental charge that may be imposed.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Settlement for the Notes will be made in same day
funds. All payments of principal and interest will be made by
the Company in same day funds. The Notes will trade in the
Same-Day Funds Settlement System of The Depository Trust Company
(the &#147;Depositary&#148; or &#147;DTC&#148;) until maturity,
and secondary market trading activity for the Notes will
therefore settle in same day funds.
</FONT>

<P align="left">
<B><FONT size="2">Guarantees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon initial issuance, the Notes will not be
guaranteed by any of our Subsidiaries. However, if any
Restricted Subsidiary of the Company subsequently becomes a
guarantor or obligor in respect of any other
</FONT>

<P align="center"><FONT size="2">33
</FONT>

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<DIV align="left">
<FONT size="2">Indebtedness of the Company or any of the
Restricted Subsidiaries, the Company shall cause such Restricted
Subsidiary to enter into a supplemental indenture in which such
Restricted Subsidiary shall agree to guarantee the
Company&#146;s obligations under the Notes jointly and severally
with any other such Restricted Subsidiary, fully and
unconditionally, on a senior subordinated basis.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the Company defaults in payment of the
principal of, premium, if any, or interest on the Notes, each of
the Guarantors will be unconditionally, jointly and severally
obligated to duly and punctually pay the principal of, premium,
if any, and interest on the Notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The obligations of each Guarantor under its
Guarantee are limited to the maximum amount which, after giving
effect to all other contingent and fixed liabilities of such
Guarantor, and after giving effect to any collections from or
payments made by or on behalf of any other Guarantor in respect
of the obligations of such other Guarantor under its Guarantee
or pursuant to its contribution obligations under the Indenture,
will result in the obligations of such Guarantor under its
Guarantee not constituting a fraudulent conveyance or fraudulent
transfer under Federal or state law. Each Guarantor that makes a
payment or distribution under its Guarantee will be entitled to
a contribution from any other Guarantor in a pro rata amount
based on the net assets of each Guarantor determined in
accordance with GAAP.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notwithstanding the foregoing, in certain
circumstances a Guarantee of a Guarantor may be released
pursuant to the provisions of subsection (c)&nbsp;under
&#147;&#151;&nbsp;Certain Covenants&nbsp;&#151; Limitation on
Issuances of Guarantees of and Pledges for Indebtedness.&#148;
The Company also may, at any time, cause a Restricted Subsidiary
to become a Guarantor by executing and delivering a supplemental
indenture providing for the guarantee of payment of the Notes by
such Restricted Subsidiary on the basis provided in the
Indenture.
</FONT>

<P align="left">
<B><FONT size="2">Optional Redemption</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After December&nbsp;1, 2006, the Company may
redeem all or a portion of the Notes, on not less than 30 nor
more than 60&nbsp;days&#146; prior notice, in amounts of $1,000
or an integral multiple thereof at the following redemption
prices (expressed as percentages of the principal amount), if
redeemed during the 12-month period beginning December 1 of the
years indicated below:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="83%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Redemption</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2006
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">104.438</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2007
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">102.903</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2008
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">101.369</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">and thereafter at 100% of the principal amount,
in each case, together with accrued and unpaid interest, if any,
to the redemption date (subject to the rights of holders of
record on relevant record dates to receive interest due on an
interest payment date).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, at any time prior to
December&nbsp;1, 2004, the Company, at its option, may use the
net proceeds of one or more Public Equity Offerings to redeem up
to an aggregate of 35% of the aggregate principal amount of
Notes issued under the Indenture at a redemption price equal to
108.875% of the aggregate principal amount of the Notes
redeemed, plus accrued and unpaid interest, if any, to the
redemption date (subject to the rights of holders of record on
relevant record dates to receive interest due on an interest
payment date). At least 65% of the aggregate principal amount of
Notes issued under the Indenture must remain outstanding
immediately after the occurrence of such redemption. In order to
effect this redemption, the Company must mail a notice of
redemption no later than 30&nbsp;days after the closing of the
related Public Equity Offering and must complete such redemption
within 60&nbsp;days of the closing of the Public Equity Offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If less than all of the Notes are to be redeemed,
the Trustee shall select the Notes to be redeemed in compliance
with the requirements of the principal national security
exchange, if any, on which the Notes are listed, or if the Notes
are not listed, on a pro rata basis, by lot or by any other
method the Trustee shall deem fair and reasonable. Notes
redeemed in part must be redeemed only in integral multiples of
</FONT>

<P align="center"><FONT size="2">34
</FONT>

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<DIV align="left">
<FONT size="2">$1,000. Redemption pursuant to the provisions
relating to a Public Equity Offering must be made on a pro rata
basis or on as nearly a pro rata basis as practicable (subject
to the procedures of DTC or any other depositary).
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Sinking Fund</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Notes will not be entitled to the benefit of
any sinking fund.
</FONT>

<P align="left">
<B><FONT size="2">Purchase of Notes Upon a Change of
Control</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a Change of Control occurs, each holder of
Notes will have the right to require that the Company purchase
all or any part (in integral multiples of $1,000) of such
holder&#146;s Notes pursuant to a Change of Control Offer. In
the Change of Control Offer, the Company will offer to purchase
all of the Notes, at a purchase price (the &#147;Change of
Control Purchase Price&#148;) in cash in an amount equal to 101%
of the principal amount of such Notes, plus accrued and unpaid
interest, if any, to the date of purchase (the &#147;Change of
Control Purchase Date&#148;) (subject to the rights of holders
of record on relevant record dates to receive interest due on an
interest payment date).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Within 30&nbsp;days of any Change of Control or,
at the Company&#146;s option, prior to such Change of Control
but after it is publicly announced, the Company must notify the
Trustee and give written notice of the Change of Control to each
holder of Notes, by first-class mail, postage prepaid, at his
address appearing in the security register. The notice must
state, among other things,
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">that a Change of Control has occurred and the
    date of such event;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the circumstances and relevant facts regarding
    such Change of Control, including information with respect to
    pro forma historical income, cash flow and capitalization after
    giving effect to such Change of Control;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the purchase price and the purchase date which
    shall be fixed by the Company on a business day no earlier than
    30&nbsp;days nor later than 60&nbsp;days from the date the
    notice is mailed, nor, in any event, earlier than the
    commencement of the Change in Control, or such later date as is
    necessary to comply with requirements under the Exchange Act;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">that any Note not tendered will continue to
    accrue interest;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">that, unless the Company defaults in the payment
    of the Change of Control Purchase Price, any Notes accepted for
    payment pursuant to the Change of Control Offer will cease to
    accrue interest after the Change of Control Purchase Date; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">other procedures that a holder of Notes must
    follow to accept a Change of Control Offer or to withdraw
    acceptance of the Change of Control Offer.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a Change of Control Offer is made, the Company
may not have available funds sufficient to pay the Change of
Control Purchase Price for all of the Notes that might be
delivered by holders of the Notes seeking to accept the Change
of Control Offer. The failure of the Company to make or
consummate the Change of Control Offer or pay the Change of
Control Purchase Price when due will give the Trustee and the
holders of the Notes the rights described under
&#147;&#151;&nbsp;Events of Default.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the obligations of the Company
under the Indenture with respect to the Notes in the event of a
Change of Control, some of the long-term Indebtedness of the
Company also contains or may in the future contain an event of
default upon events similar to those defined as a Change of
Control with respect to the Notes which allows the lender to
accelerate the repayment of amounts outstanding under such
indebtedness. The definition of a change of control in such
other indebtedness may differ from the definition included in
the Notes and, in connection with indebtedness that may be
entered into in the future, may include events which would not
trigger a Change of Control for purposes of the Notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The definition of Change of Control includes a
phrase relating to the sale, lease, transfer, conveyance or
other disposition of &#147;all or substantially all&#148; of the
assets of the Company. The term &#147;all or
</FONT>

<P align="center"><FONT size="2">35
</FONT>

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<DIV align="left">
<FONT size="2">substantially all&#148; as used in the definition
of &#147;Change of Control&#148; has not been interpreted under
New York law (which is the governing law of the Indenture) to
represent a specific quantitative test. Therefore, if holders of
the Notes elected to exercise their rights under the Indenture
and the Company elected to contest such election, it is not
clear how a court interpreting New York law would interpret the
phrase.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The existence of a holder&#146;s right to require
the Company to repurchase such holder&#146;s Notes upon a Change
of Control may deter a third party from acquiring the Company in
a transaction which constitutes a Change of Control.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The provisions of the Indenture will not afford
holders of the Notes the right to require the Company to
repurchase the Notes in the event of a highly leveraged
transaction or transactions with the Company&#146;s management
or its Affiliates, including a reorganization, restructuring,
merger or similar transaction (including an acquisition of the
Company by management or its affiliates) involving the Company
that may adversely affect holders of the Notes, if such
transaction is not a transaction defined as a Change of Control.
A transaction involving the Company&#146;s management or its
Affiliates, or a transaction involving a recapitalization of the
Company, will result in a Change of Control only if it is the
type of transaction specified by such definition.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company will comply with the applicable
tender offer rules, including Rule&nbsp;14e-1 under the Exchange
Act, and any other applicable securities laws or regulations in
connection with a Change of Control Offer.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company will not be required to make a Change
of Control Offer upon a Change of Control if a third party makes
the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements described in the
Indenture applicable to a Change of Control Offer made by the
Company and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.
</FONT>

<P align="left">
<B><FONT size="2">Ranking for Senior Subordinated
Notes</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The payment of the principal of, premium, if any,
and interest on, the Notes will rank junior to and be
subordinated, as described in the Indenture, in right of
payment, to the prior payment in full of all Senior
Indebtedness. The Notes will be senior subordinated indebtedness
of the Company ranking equal to all other existing and future
senior subordinated indebtedness of the Company and senior to
all existing and future Subordinated Indebtedness of the Company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon the occurrence of any default in the payment
of any Designated Senior Indebtedness beyond any applicable
grace period and after the receipt by the Trustee from a
representative of holders of any Designated Senior Indebtedness
(collectively, a &#147;Senior Representative&#148;) of written
notice of such default, no payment (other than payments
previously made pursuant to the provisions described under
&#147;&#151;&nbsp;Defeasance or Covenant Defeasance of
Indenture&#148;) or distribution of any assets of the Company of
any kind or character (excluding certain permitted equity
interests or subordinated securities) may be made on account of
the principal of, premium, if any, or interest on, the Notes or
on account of the purchase, redemption, defeasance or other
acquisition of or in respect of, the Notes unless and until such
default shall have been cured or waived or shall have ceased to
exist or such Designated Senior Indebtedness shall have been
discharged or paid in full after which the Company shall resume
making any and all required payments in respect of the Notes,
including any missed payments.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon the occurrence and during the continuance of
any non-payment default with respect to any Designated Senior
Indebtedness for which all cure periods have expired and
pursuant to which the maturity thereof may be accelerated
immediately other than any such default the existence of which
the Company is in good faith contesting (a &#147;Non-payment
Default&#148;) and after the receipt by the Trustee and the
Company from a Senior Representative of written notice of such
Non-Payment Default, and as to which the Company has not
provided written notice of dispute to the Trustee and such
Senior Representative, no payment (other than payments
previously made pursuant to the provisions described under
&#147;&#151;&nbsp;Defeasance or Covenant Defeasance of
Indenture&#148;) or distribution of any assets of the
</FONT>

<P align="center"><FONT size="2">36
</FONT>

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<DIV align="left">
<FONT size="2">Company of any kind or character (excluding
certain permitted equity interests or subordinated securities)
may be made by the Company on account of the principal of,
premium, if any, or interest on, the Notes or on account of the
purchase, redemption, defeasance or other acquisition of, or in
respect of, the Notes for the period specified below (the
&#147;Payment Blockage Period&#148;).
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Payment Blockage Period shall commence upon
the receipt of notice of the Non-payment Default by the Trustee
and the Company from a Senior Representative and shall end on
the earliest of
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;the 179th day after such commencement,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;the date on which such Non-payment
    Default (and all other Non-payment Defaults as to which notice
    is given after such Payment Blockage Period is initiated) is
    cured, waived or ceases to exist or on which such Designated
    Senior Indebtedness is discharged or paid in full or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;the date on which such Payment Blockage
    Period (and all Non-payment Defaults as to which notice is given
    after such Payment Blockage Period is initiated) shall have been
    terminated by written notice to the Company or the Trustee from
    the Senior Representative initiating such Payment Blockage
    Period.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">When the Payment Blockage Period ends, the
Company will promptly resume making any and all required
payments in respect of the Notes, including any missed payments.
In no event will a Payment Blockage Period extend beyond 179
days from the date of the receipt by the Company or the Trustee
of the notice initiating such Payment Blockage Period (such
179-day period referred to as the &#147;Initial Period&#148;).
Any number of notices of Non-payment Defaults may be given
during the Initial Period. However, during any period of 365
consecutive days only one Payment Blockage Period, during which
payment of principal of, or interest on, the Notes may not be
made, may commence and the duration of such period may not
exceed 179&nbsp;days and there must be a 186 consecutive day
period in any 365&nbsp;day period during which no Payment
Blockage Period is in effect. No Non-payment Default with
respect to Designated Senior Indebtedness that existed or was
continuing on the date of the commencement of any Payment
Blockage Period will be, or can be, made the basis for the
commencement of a second Payment Blockage Period, whether or not
within a period of 365 consecutive days, unless such default has
been cured or waived for a period of not less than 90
consecutive days subsequent to the commencement of such initial
Payment Blockage Period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the Company fails to make any payment on the
Notes when due or within any applicable grace period, whether or
not on account of the payment blockage provisions referred to
above, such failure would constitute an Event of Default under
the Indenture and would enable the holders of the Notes to
accelerate the maturity thereof. See &#147;&#151;&nbsp;Events of
Default.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Indenture will provide that in the event of
any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case
or proceeding, relative to the Company or its assets, or any
liquidation, dissolution or other winding up of the Company,
whether voluntary or involuntary, or any assignment for the
benefit of creditors or other marshalling of assets or
liabilities of the Company (except in connection with the
consolidation or merger of the Company or its liquidation or
dissolution following the conveyance, transfer or lease of its
properties and assets substantially as an entirety upon the
terms and conditions described under &#147;Consolidation,
Merger, Sale of Assets&#148;), all Senior Indebtedness must be
paid in full before any payment or distribution (excluding
distributions of certain permitted equity interests or
subordinated securities) is made on account of the principal of,
premium, if any, or interest on the Notes or on account of the
purchase, redemption, defeasance or other acquisition of or in
respect of the Notes (other than payments previously made
pursuant to the provisions described under
&#147;&#151;&nbsp;Defeasance or Covenant Defeasance of
Indenture&#148;).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">By reason of such subordination, in the event of
liquidation or insolvency, creditors of the Company who are
holders of Senior Indebtedness may recover more, ratably, than
the holders of the Notes, and funds which would be otherwise
payable to the holders of the Notes will be paid to the holders
of the Senior Indebtedness to the extent necessary to pay the
Senior Indebtedness in full and the Company may be unable to
meet its obligations fully with respect to the Notes.
</FONT>

<P align="center"><FONT size="2">37
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Indenture will limit, but not prohibit, the
incurrence by the Company and its Subsidiaries of additional
Indebtedness, and the Indenture will prohibit the incurrence by
the Company of Indebtedness that is subordinated in right of
payment to any Senior Indebtedness of the Company and senior in
right of payment to the Notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Notes will effectively rank behind all
Indebtedness and other liabilities and commitments (including
trade payables and lease commitments) of the Company&#146;s
Subsidiaries. Any right of the Company to receive assets of any
such Subsidiary upon the liquidation or reorganization of any
such Subsidiary (and the consequent right of the holders of the
Notes to participate in those assets) will effectively rank
behind the claims of that Subsidiary&#146;s creditors, except to
the extent that the Company is itself recognized as a creditor
of such Subsidiary, in which case the claims of the Company
would still rank behind to any security in the assets of such
Subsidiary and any Indebtedness of such Subsidiary senior to
that held by the Company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;28, 2003, the aggregate amount of
Senior Indebtedness outstanding was approximately
$307.8&nbsp;million all of which is secured. The aggregate
amount of Indebtedness of Subsidiaries to which the original
notes would have been effectively subordinated was approximately
$29.6&nbsp;million and no Subordinated Indebtedness or Pari
Passu Indebtedness would have been outstanding. See &#147;Risk
Factors&nbsp;&#151; Our substantial indebtedness could adversely
affect our financial health and prevent us from fulfilling our
obligations under these notes.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Senior
Indebtedness&#148;</FONT></I><FONT size="2"> means the principal
of, premium, if any, and interest (including interest, to the
extent allowable, accruing after the filing of a petition
initiating any proceeding under any state, federal or foreign
bankruptcy law) on any Indebtedness of the Company (other than
as otherwise provided in this definition), whether outstanding
on the date of the Indenture or thereafter created, incurred or
assumed, and whether at any time owing, actually or contingent,
unless, in the case of any particular Indebtedness, the
instrument creating or evidencing the same or pursuant to which
the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the
Notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notwithstanding the foregoing, &#147;Senior
Indebtedness&#148; shall not include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;Indebtedness evidenced by the Notes,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;Indebtedness that is subordinate or
    junior in right of payment to any Indebtedness of the Company,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;Indebtedness which when incurred and
    without respect to any election under Section&nbsp;1111(b) of
    Title&nbsp;11 United States Code, is without recourse to the
    Company,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;Indebtedness which is represented by
    Redeemable Capital Stock,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;any liability for foreign, federal,
    state, local or other taxes owed or owing by the Company to the
    extent such liability constitutes Indebtedness,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(6)&nbsp;Indebtedness of the Company to a
    Subsidiary or any other Affiliate of the Company or any of such
    Affiliate&#146;s Subsidiaries,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(7)&nbsp;to the extent it might constitute
    Indebtedness, amounts owing for goods, materials or services
    purchased in the ordinary course of business or consisting of
    trade accounts payable owed or owing by the Company, and amounts
    owed by the Company for compensation to employees or services
    rendered to the Company, and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(8)&nbsp;that portion of any Indebtedness which
    at the time of issuance is issued in violation of the Indenture.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Designated Senior
Indebtedness&#148;</FONT></I><FONT size="2"> means any Senior
Indebtedness which at the time of determination has an aggregate
principal amount outstanding of at least $25&nbsp;million and
which is specifically designated in the instrument evidencing
such Senior Indebtedness or the agreement under which such
Senior Indebtedness arises as &#147;Designated Senior
Indebtedness&#148; by the Company. With respect to any lender
</FONT>

<P align="center"><FONT size="2">38
</FONT>

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<DIV align="left">
<FONT size="2">having more than one Senior Indebtedness facility
outstanding with the Company, only those facilities that
individually have an outstanding principal amount of at least
$25&nbsp;million may qualify as Designated Senior Indebtedness.
Indebtedness under different facilities may not be aggregated to
satisfy such threshold requirement.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each Guarantee of a Guarantor, if any, will be an
unsecured senior subordinated obligation of such Guarantor,
ranking <I>pari passu</I> with, or senior in right of payment
to, all other existing and future Indebtedness of such Guarantor
that is expressly subordinated to Senior Guarantor Indebtedness.
The Indebtedness evidenced by the Guarantees will be
subordinated to Senior Guarantor Indebtedness to the same extent
as the Notes are subordinated to Senior Indebtedness and during
any period when payment on the Notes is blocked by Designated
Senior Indebtedness, payment on any Guarantees is similarly
blocked.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Senior Guarantor
Indebtedness&#148;</FONT></I><FONT size="2"> means the principal
of, premium, if any, and interest (including interest, to the
extent allowable, accruing after the filing of a petition
initiating any proceeding under any state, federal or foreign
bankruptcy law) on any Indebtedness of any Guarantor (other than
as otherwise provided in this definition), whether outstanding
on the date of the Indenture or thereafter created, incurred or
assumed, and whether at any time owing, actually or contingent,
unless, in the case of any particular Indebtedness, the
instrument creating or evidencing the same or pursuant to which
the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to any
Guarantee. Notwithstanding the foregoing, &#147;Senior Guarantor
Indebtedness&#148; shall not include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;Indebtedness evidenced by the Guarantees,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;Indebtedness that is subordinated or
    junior in right of payment to any Indebtedness of any Guarantor,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;Indebtedness which when incurred and
    without respect to any election under Section&nbsp;1111(b) of
    Title&nbsp;11 United States Code, is without recourse to any
    Guarantor,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;Indebtedness which is represented by
    Redeemable Capital Stock,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;any liability for foreign, federal,
    state, local or other taxes owed or owing by any Guarantor to
    the extent such liability constitutes Indebtedness,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(6)&nbsp;Indebtedness of any Guarantor to a
    Subsidiary or any other Affiliate of the Company or any of such
    Affiliate&#146;s Subsidiaries,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(7)&nbsp;to the extent it might constitute
    Indebtedness, amounts owing for goods, materials or services
    purchased in the ordinary course of business or consisting of
    trade accounts payable owed or owing by such Guarantor, and
    amounts owed by such Guarantor for compensation to employees or
    services rendered to such Guarantor,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(8)&nbsp;that portion of any Indebtedness which
    at the time of issuance is issued in violation of the Indenture
    and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(9)&nbsp;Indebtedness evidenced by any guarantee
    of any Subordinated Indebtedness or Pari Passu Indebtedness.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Certain Covenants</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Indenture contains, among others, the
following covenants:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Limitation on
Indebtedness.</FONT></I><FONT size="2"> (a)&nbsp;The Company
will not, and will not cause or permit any of its Restricted
Subsidiaries to, create, issue, incur, assume, guarantee or
otherwise in any manner become directly or indirectly liable for
the payment of or otherwise incur, contingently or otherwise
(collectively, &#147;incur&#148;), any Indebtedness (including
any Acquired Indebtedness), unless such Indebtedness is incurred
by the Company or any Guarantor or constitutes Acquired
Indebtedness of a Restricted Subsidiary and, in each case, the
Company&#146;s Consolidated Fixed Charge Coverage Ratio for the
most recent four full fiscal
</FONT>

<P align="center"><FONT size="2">39
</FONT>

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<DIV align="left">
<FONT size="2">quarters for which financial statements are
available immediately preceding the incurrence of such
Indebtedness taken as one period is at least equal to or greater
than 2:1.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;Notwithstanding the foregoing, the
Company and, to the extent specifically set forth below, the
Restricted Subsidiaries may incur each and all of the following
(collectively, the &#147;Permitted Indebtedness&#148;):
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;Indebtedness of the Company or any
    Guarantor (and guarantees of such Indebtedness by any
    Subsidiaries that have become Guarantors) under (x)&nbsp;one or
    more revolving credit facilities, lines of credit, letters of
    credit or term loans, (y)&nbsp;any renewal, extension,
    substitution, refunding, refinancing or replacement (a
    &#147;refinancing&#148;) of any Indebtedness described under
    clause&nbsp;(x), or (z)&nbsp;any other agreement (A)&nbsp;which
    is a Capital Lease Obligation or a Purchase Money Obligation or
    (B)&nbsp;which is secured by a Lien on assets of the Company, in
    an aggregate principal amount at any one time outstanding under
    clauses&nbsp;(x), (y) and (z) collectively not to exceed
    (i)&nbsp;the greater of (a)&nbsp;$150&nbsp;million or
    (b)&nbsp;15% of Consolidated Tangible Assets, plus (ii)&nbsp;the
    amount by which the Indebtedness outstanding under
    clause&nbsp;(2) of this definition of Permitted Indebtedness is
    less than the maximum principal amount which may be borrowed
    pursuant to such clause&nbsp;(2);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;Indebtedness of Non-Recourse Real Estate
    Subsidiaries in the aggregate principal amount collectively not
    to exceed (i)&nbsp;the greater of (a)&nbsp;$50&nbsp;million or
    (b)&nbsp;5% of Consolidated Tangible Assets, minus (ii)&nbsp;the
    principal amount of Indebtedness incurred pursuant to
    clause&nbsp;(ii) of clause&nbsp;(1) of this definition of
    Permitted Indebtedness;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;Indebtedness of the Company pursuant to
    the Notes in an aggregate principal amount not to exceed
    $250&nbsp;million and Indebtedness of any Guarantor pursuant to
    a Guarantee of the Notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;Indebtedness of the Company or any
    Restricted Subsidiary outstanding on the date of the Indenture,
    listed on a schedule to the Indenture which is mortgage
    indebtedness or not otherwise referred to in this definition of
    &#147;Permitted Indebtedness;&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;Indebtedness of the Company owing to a
    Restricted Subsidiary;
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="1%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">provided that any Indebtedness of the Company
    owing to a Restricted Subsidiary that is not a Guarantor is made
    pursuant to an intercompany note in the form attached to the
    Indenture and is unsecured and is subordinated in right of
    payment from and after such time as the Notes shall become due
    and payable (whether at Stated Maturity, acceleration or
    otherwise) to the payment and performance of the Company&#146;s
    obligations under the Notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">provided, further, that any disposition, pledge
    or transfer of any such Indebtedness to a Person (other than a
    disposition, pledge or transfer to a Restricted Subsidiary)
    shall be deemed to be an incurrence of such Indebtedness by the
    Company or other obligor not permitted by this clause&nbsp;(5);
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(6)&nbsp;Indebtedness of a Restricted Subsidiary
    (other than a Non-Recourse Real Estate Subsidiary) owing to the
    Company or another Restricted Subsidiary;
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="1%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">provided that any such Indebtedness is made
    pursuant to an intercompany note in the form attached to the
    Indenture;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">provided, further, that (a)&nbsp;any disposition,
    pledge or transfer of any such Indebtedness to a Person (other
    than a disposition, pledge or transfer to the Company or a
    Restricted Subsidiary) shall be deemed to be an incurrence of
    such Indebtedness by the obligor not permitted by this
    clause&nbsp;(6), and (b)&nbsp;any transaction pursuant to which
    any Restricted Subsidiary, which has Indebtedness owing to the
    Company or any other Restricted Subsidiary, ceases to be a
    Restricted Subsidiary shall be deemed to be the incurrence of
    Indebtedness by such Restricted Subsidiary that is not permitted
    by this clause&nbsp;(6);
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(7)&nbsp;guarantees of any Restricted Subsidiary
    made in accordance with the provisions of
    &#147;&#151;&nbsp;Limitation on Issuances of Guarantees of and
    Pledges for Indebtedness;&#148;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">40
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<P>

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    <TD width="97%"></TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(8)&nbsp;obligations of the Company or any
    Restricted Subsidiary entered into in the ordinary course of
    business;
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;pursuant to Interest Rate Agreements
    designed to protect the Company or any Restricted Subsidiary
    against fluctuations in interest rates in respect of
    Indebtedness of the Company or any Restricted Subsidiary as long
    as such obligations do not exceed the aggregate principal amount
    of such Indebtedness then outstanding,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;under any Currency Hedging Agreements,
    relating to (1)&nbsp;Indebtedness of the Company or any
    Restricted Subsidiary and/or (2)&nbsp;obligations to purchase or
    sell assets or properties, in each case, incurred in the
    ordinary course of business of the Company or any Restricted
    Subsidiary; provided, however, that such Currency Hedging
    Agreements do not increase the Indebtedness or other obligations
    of the Company or any Restricted Subsidiary outstanding other
    than as a result of fluctuations in foreign currency exchange
    rates or by reason of fees, indemnities and compensation payable
    thereunder or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;under any Commodity Price Protection
    Agreements which do not increase the amount of Indebtedness or
    other obligations of the Company or any Restricted Subsidiary
    outstanding other than as a result of fluctuations in commodity
    prices or by reason of fees, indemnities and compensation
    payable thereunder;
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(9)&nbsp;Indebtedness of the Company or any of
    its Restricted Subsidiaries constituting reimbursement
    obligations with respect to letters of credit issued in the
    ordinary course of business, including, without limitation,
    letters of credit in respect of workers&#146; compensation
    claims or self-insurance, or other Indebtedness with respect to
    reimbursement type obligations regarding workers&#146;
    compensation claims;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(10)&nbsp;Indebtedness arising from agreements of
    the Company or a Restricted Subsidiary providing for
    indemnification, earn outs, adjustments of purchase price or
    similar obligations, in each case, incurred or assumed in
    connection with the disposition of any business, assets or a
    Restricted Subsidiary; provided, however, that (i)&nbsp;such
    Indebtedness is not reflected on the balance sheet of the
    Company or any Restricted Subsidiary (contingent obligations
    referred to in a footnote to financial statements and not
    otherwise reflected on the balance sheet will not be deemed to
    be reflected on such balance sheet for purposes of this
    clause&nbsp;(i)) and (ii)&nbsp;the maximum assumable liability
    in respect of all such Indebtedness shall at no time exceed the
    gross proceeds including noncash proceeds (the Fair Market Value
    of such noncash proceeds being measured at the time received and
    without giving effect to any subsequent changes in value)
    actually received by the Company and its Restricted Subsidiaries
    in connection with such disposition;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(11)&nbsp;Indebtedness solely in respect of
    surety, performance or appeal bonds, to the extent that such
    incurrence does not result in the incurrence of any obligation
    for the payment of borrowed money to others;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(12)&nbsp;any renewals, extensions,
    substitutions, refundings, refinancings or replacements
    (collectively, a &#147;refinancing&#148;) of any Indebtedness
    described in paragraph&nbsp;(a) of this Section and
    clauses&nbsp;(3) and (4) of this paragraph&nbsp;(b) of this
    definition of &#147;Permitted Indebtedness,&#148; including any
    successive refinancings so long as the borrower under such
    refinancing is the Company or, if not the Company, the same as
    the borrower of the Indebtedness being refinanced or a
    Non-Recourse Real Estate Subsidiary in respect of the
    refinancing of Indebtedness of a Non-Recourse Real Estate
    Subsidiary and the aggregate principal amount of Indebtedness
    represented thereby (or if such Indebtedness provides for an
    amount less than the principal amount thereof to be due and
    payable upon a declaration of acceleration of the maturity
    thereof, the original issue price of such Indebtedness plus any
    accreted value attributable thereto since the original issuance
    of such Indebtedness) is not increased (i)&nbsp;in the case of
    refinancings of Indebtedness under clause&nbsp;(4), to a
    principal amount in excess of the principal amount on the date
    of the Indenture or (ii)&nbsp;in all other cases, by such
    refinancing plus the lesser of (a)&nbsp;the stated amount of any
    premium or other payment
    </FONT></TD>
</TR>

</TABLE>

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    <TD width="3%"></TD>
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    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">required to be paid in connection with such a
    refinancing pursuant to the terms of the Indebtedness being
    refinanced or (b)&nbsp;the amount of premium or other payment
    actually paid at such time to refinance the Indebtedness, plus,
    in either case, the amount of expenses of the Company incurred
    in connection with such refinancing and (1)&nbsp;in the case of
    any refinancing of Indebtedness that is Subordinated
    Indebtedness, such new Indebtedness is made subordinated to the
    Notes at least to the same extent as the Indebtedness being
    refinanced and (2)&nbsp;in the case of Pari Passu Indebtedness
    or Subordinated Indebtedness, as the case may be, such
    refinancing does not reduce the Average Life to Stated Maturity
    or the Stated Maturity of such Indebtedness; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(13)&nbsp;Indebtedness of the Company or any
    Restricted Subsidiaries in addition to that described in
    clauses&nbsp;(1) through (12) above, and any renewals,
    extensions, substitutions, refinancings or replacements of such
    Indebtedness, so long as the aggregate principal amount of all
    such Indebtedness shall not exceed $20&nbsp;million outstanding
    at any one time in the aggregate.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For purposes of determining compliance with this
&#147;Limitation on Indebtedness&#148; covenant, in the event
that an item of Indebtedness meets the criteria of more than one
of the types of Indebtedness permitted by this covenant, the
Company in its sole discretion shall classify or reclassify such
item of Indebtedness and only be required to include the amount
of such Indebtedness as one of such types. Accrual of interest,
accretion or amortization of original issue discount and the
payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, will not be deemed
to be an incurrence of Indebtedness for purposes of this
covenant; <I>provided, </I>in each such case, that the amount
thereof is included in Consolidated Interest Expense of the
Company as accrued.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Limitation on Restricted Payments.
</FONT></I><FONT size="2">(a)&nbsp;The Company will not, and
will not cause or permit any Restricted Subsidiary to, directly
or indirectly:
</FONT>
<P>

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    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;declare or pay any dividend on, or make
    any distribution to holders of, any shares of the Company&#146;s
    Capital Stock (other than dividends or distributions payable
    solely in shares of its Qualified Capital Stock or in options,
    warrants or other rights to acquire shares of such Qualified
    Capital Stock);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;purchase, redeem, defease or otherwise
    acquire or retire for value, directly or indirectly, the
    Company&#146;s Capital Stock or any Capital Stock of any
    Affiliate of the Company (other than Capital Stock of any Wholly
    Owned Restricted Subsidiary of the Company) or options, warrants
    or other rights to acquire such Capital Stock;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;make any principal payment on, or
    repurchase, redeem, defease, retire or otherwise acquire for
    value, prior to any scheduled principal payment, sinking fund
    payment or maturity, any Subordinated Indebtedness;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;declare or pay any dividend or
    distribution on any Capital Stock of any Restricted Subsidiary
    to any Person (other than (a)&nbsp;to the Company or any of its
    Wholly Owned Restricted Subsidiaries or (b)&nbsp;dividends or
    distributions made by a Restricted Subsidiary on a pro rata
    basis to all stockholders of such Restricted Subsidiary); or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;make any Investment in any Person (other
    than any Permitted Investments)
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">(any of the foregoing actions described in
clauses (1)&nbsp;through (5)&nbsp;above, other than any such
action that is a Permitted Payment (as defined below),
collectively, &#147;Restricted Payments&#148;) (the amount of
any such Restricted Payment, if other than cash, shall be the
Fair Market Value of the assets proposed to be transferred, as
determined by the board of directors of the Company, whose
determination shall be conclusive and evidenced by a board
resolution), unless
</FONT>
<P>

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    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;immediately before and immediately after
    giving effect to such proposed Restricted Payment on a pro forma
    basis, no Default or Event of Default shall have occurred and be
    continuing and such Restricted Payment shall not be an event
    which is, or after notice or lapse of time or both, would be, an
    &#147;event of default&#148; under the terms of any Indebtedness
    of the Company or its Restricted Subsidiaries;
    </FONT></TD>
</TR>

</TABLE>

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<P>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;immediately before and immediately after
    giving effect to such Restricted Payment on a pro forma basis,
    the Company could incur $1.00 of additional Indebtedness (other
    than Permitted Indebtedness) under the provisions described
    under &#147;&#151;&nbsp;Limitation on Indebtedness;&#148; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;after giving effect to the proposed
    Restricted Payment, the aggregate amount of all such Restricted
    Payments declared or made after the date of the Indenture and
    all Designation Amounts does not exceed the sum of:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(A)&nbsp;50% of the aggregate Consolidated Net
    Income of the Company accrued on a cumulative basis during the
    period beginning on the first day of the Company&#146;s fiscal
    quarter beginning after the date of the Indenture and ending on
    the last day of the Company&#146;s last fiscal quarter ending
    prior to the date of the Restricted Payment (or, if such
    aggregate cumulative Consolidated Net Income shall be a loss,
    minus 100% of such loss);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(B)&nbsp;the aggregate Net Cash Proceeds received
    after the date of the Indenture by the Company either
    (1)&nbsp;as capital contributions in the form of common equity
    to the Company or (2)&nbsp;from the issuance or sale (other than
    to any of its Subsidiaries) of Qualified Capital Stock of the
    Company or any options, warrants or rights to purchase such
    Qualified Capital Stock of the Company (except, in each case, to
    the extent such proceeds are used to purchase, redeem or
    otherwise retire Capital Stock or Subordinated Indebtedness as
    set forth below in clause (2)&nbsp;or (3)&nbsp;of paragraph (b)
    below) (and excluding the Net Cash Proceeds from the issuance of
    Qualified Capital Stock financed, directly or indirectly, using
    funds borrowed from the Company or any Subsidiary until and to
    the extent such borrowing is repaid);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(C)&nbsp;the aggregate Net Cash Proceeds received
    after the date of the Indenture by the Company (other than from
    any of its Subsidiaries) upon the exercise of any options,
    warrants or rights to purchase Qualified Capital Stock of the
    Company (and excluding the Net Cash Proceeds from the exercise
    of any options, warrants or rights to purchase Qualified Capital
    Stock financed, directly or indirectly, using funds borrowed
    from the Company or any Subsidiary until and to the extent such
    borrowing is repaid);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(D)&nbsp;the aggregate Net Cash Proceeds received
    after the date of the Indenture by the Company from the
    conversion or exchange, if any, of debt securities or Redeemable
    Capital Stock of the Company or its Restricted Subsidiaries into
    or for Qualified Capital Stock of the Company plus, to the
    extent such debt securities or Redeemable Capital Stock were
    issued after the date of the Indenture, the aggregate of Net
    Cash Proceeds from their original issuance (and excluding the
    Net Cash Proceeds from the conversion or exchange of debt
    securities or Redeemable Capital Stock financed, directly or
    indirectly, using funds borrowed from the Company or any
    Subsidiary until and to the extent such borrowing is repaid); and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(E)&nbsp;(a)&nbsp;in the case of the disposition
    or repayment of any Investment constituting a Restricted Payment
    made after the date of the Indenture, an amount (to the extent
    not included in Consolidated Net Income) equal to (x)&nbsp;the
    return of capital with respect to such Investment, plus
    (y)&nbsp;50% of any amounts received in excess of the return of
    capital to the extent such amount is not otherwise included in
    Consolidated Net Income of the Company or its Restricted
    Subsidiaries, in any case, less the cost of the disposition of
    such Investment and net of taxes, and
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;in the case of the designation of an
Unrestricted Subsidiary as a Restricted Subsidiary (as long as
the designation of such Subsidiary as an Unrestricted Subsidiary
was deemed a Restricted Payment), the Fair Market Value of the
Company&#146;s interest in such Subsidiary provided that such
amount shall not in any case exceed (x)&nbsp;the amount of the
Restricted Payment deemed made at the time the Subsidiary was
designated as an Unrestricted Subsidiary, plus (y)&nbsp;50% of
any increase in the Fair Market Value of such Company&#146;s
interest in such Subsidiary over such Subsidiary&#146;s value on
the date such Subsidiary was designated an Unrestricted
Subsidiary to the extent such amount is not otherwise included
in Consolidated Net Income of the Company or its Restricted
Subsidiaries.
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;Notwithstanding the foregoing, and in
the case of clauses (2) through (5)&nbsp;below, so long as no
Default or Event of Default is continuing or would arise
therefrom, the foregoing provisions shall not prohibit the
following actions (each of clauses (1)&nbsp;through (4)&nbsp;and
(6)&nbsp;being referred to as a &#147;Permitted Payment&#148;):
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;the payment of any dividend within
    60&nbsp;days after the date of declaration thereof, if at such
    date of declaration such payment was permitted by the provisions
    of paragraph (a)&nbsp;of this Section and such payment shall
    have been deemed to have been paid on such date of declaration
    and shall not have been deemed a &#147;Permitted Payment&#148;
    for purposes of the calculation required by paragraph
    (a)&nbsp;of this Section;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;the repurchase, redemption, or other
    acquisition or retirement for value of any shares of any class
    of Capital Stock of the Company in exchange for (including any
    such exchange pursuant to the exercise of a conversion right or
    privilege in connection with which cash is paid in lieu of the
    issuance of fractional shares or scrip), or out of the Net Cash
    Proceeds of a substantially concurrent issuance and sale for
    cash (other than to a Subsidiary) of, other shares of Qualified
    Capital Stock of the Company; provided that the Net Cash
    Proceeds from the issuance of such shares of Qualified Capital
    Stock are excluded from clause (3)(B) of paragraph (a)&nbsp;of
    this Section;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;the repurchase, redemption, defeasance,
    retirement or acquisition for value or payment of principal of
    any Subordinated Indebtedness in exchange for, or in an amount
    not in excess of the Net Cash Proceeds of, a substantially
    concurrent issuance and sale for cash (other than to any
    Subsidiary of the Company) of any Qualified Capital Stock of the
    Company, provided that the Net Cash Proceeds from the issuance
    of such shares of Qualified Capital Stock are excluded from
    clause (3)(B) of paragraph (a)&nbsp;of this Section;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;the repurchase, redemption, defeasance,
    retirement, refinancing, acquisition for value or payment of
    principal of any Subordinated Indebtedness (other than
    Redeemable Capital Stock) (a &#147;refinancing&#148;) through
    the substantially concurrent issuance of new Subordinated
    Indebtedness of the Company, provided that any such new
    Subordinated Indebtedness
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;shall be in a principal amount that does
    not exceed the principal amount so refinanced (or, if such
    Subordinated Indebtedness provides for an amount less than the
    principal amount thereof to be due and payable upon a
    declaration of acceleration thereof, then such lesser amount as
    of the date of determination), plus the lesser of (1)&nbsp;the
    stated amount of any premium or other payment required to be
    paid in connection with such a refinancing pursuant to the terms
    of the Indebtedness being refinanced or (2)&nbsp;the amount of
    premium or other payment actually paid at such time to refinance
    the Indebtedness, plus, in either case, the amount of expenses
    of the Company incurred in connection with such refinancing;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;has an Average Life to Stated Maturity
    greater than the remaining Average Life to Stated Maturity of
    the Notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;has a Stated Maturity for its final
    scheduled principal payment later than the Stated Maturity for
    the final scheduled principal payment of the Notes; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(d)&nbsp;is expressly subordinated in right of
    payment to the Notes at least to the same extent as the
    Subordinated Indebtedness to be refinanced.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;the payment of cash dividends on the
    Company&#146;s shares of Common Stock in the aggregate amount
    per fiscal quarter equal to $0.165 per share for each share of
    Class&nbsp;A Common Stock of the Company outstanding as of the
    one record date for dividends payable in respect of such fiscal
    quarter and $0.15 per share for each share of Class&nbsp;B
    Common Stock of the Company outstanding as of the one record
    date for dividends payable in respect of such fiscal quarter (as
    such $0.165 and $0.15 shall be adjusted for specified changes in
    the capitalization of the Company upon recapitalizations,
    reclassifications, stock splits, stock dividends, reverse stock
    splits, stock consolidations and similar transactions),
    provided, however, in the event a Change of Control occurs, the
    aggregate amounts
    </FONT></TD>
</TR>

</TABLE>

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    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">permitted to be paid in cash dividends per fiscal
    quarter shall not exceed the aggregate amounts of cash dividends
    paid in the same fiscal quarter most recently occurring prior to
    such Change of Control, provided, further, that for purposes of
    this exception, shares of Common Stock issued for less than Fair
    Market Value (other than shares issued pursuant to options or
    otherwise in accordance with the Company&#146;s employee stock
    option, purchase or option plans) shall not be deemed
    outstanding. (For clarity purposes, dividends paid pursuant to
    this exception will be included as Restricted Payments in
    determining whether the Company has capacity to make additional
    Restricted Payments.); and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(6)&nbsp;the repurchase, redemption or other
    acquisition or retirement for value of any Capital Stock of the
    Company or any Restricted Subsidiary of the Company held by any
    present or former employee or director of the Company (or any of
    its Restricted Subsidiaries) pursuant to any management equity
    subscription agreement or stock option agreement or other
    management or employee benefit plan or similar agreement;
    provided that (A)&nbsp;the aggregate price paid for all such
    repurchased, redeemed, acquired or retired Capital Stock shall
    not exceed $500,000 in any twelve-month period (with unused
    amounts in any calendar year being carried over to succeeding
    calendar years subject to a maximum (without giving effect to
    the following proviso) of $1.0&nbsp;million in any calendar
    year); provided further that such amount in any calendar year
    may be increased by an amount not to exceed (x) the cash
    proceeds from the sale of Capital Stock of the Company or a
    Restricted Subsidiary to members of management and directors of
    the Company and its Subsidiaries that occurs after the date of
    the Indenture, less (y)&nbsp;(i)&nbsp;the amount of any
    Restricted Payments previously made pursuant to clause
    (x)&nbsp;of this subparagraph (6)&nbsp;and (ii)&nbsp;the
    aggregate net cash proceeds received by the Company since the
    date of the Indenture upon the exercise of stock options; and,
    provided further, that cancellation of Indebtedness owing to the
    Company from members of management of the Company or any of its
    Restricted Subsidiaries in connection with a repurchase of
    Capital Stock of the Company or a Restricted Subsidiary will not
    be deemed to constitute a Restricted Payment for purposes of
    this covenant or any other provision of the Indenture, and
    (B)&nbsp;no Default or Event of Default shall have occurred and
    be continuing immediately before or after such transaction.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Limitation on Transactions with
Affiliates.</FONT></I><FONT size="2"> The Company will not, and
will not cause or permit any of its Restricted Subsidiaries to,
directly or indirectly, enter into any transaction or series of
related transactions (including, without limitation, the sale,
purchase, exchange or lease of assets, property or services)
with or for the benefit of any Affiliate of the Company (other
than the Company or a Restricted Subsidiary) unless such
transaction or series of related transactions is entered into in
good faith and in writing and
</FONT>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;such transaction or series of related
    transactions is on terms that are no less favorable to the
    Company or such Restricted Subsidiary, as the case may be, than
    those that would be available in a comparable transaction in
    arm&#146;s-length dealings with an unrelated third party,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;with respect to any transaction or
    series of related transactions involving aggregate value in
    excess of $500,000, the Company delivers an officers&#146;
    certificate to the Trustee certifying that such transaction or
    series of related transactions complies with clause
    (1)&nbsp;above, and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;with respect to any transaction or
    series of related transactions involving aggregate value in
    excess of $1&nbsp;million, either
    </FONT></TD>
</TR>

</TABLE>
<P>

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    <TD width="94%"></TD>
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<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;such transaction or series of related
    transactions has been approved by a majority of the
    Disinterested Directors of the board of directors of the
    Company, or in the event there is only one Disinterested
    Director, by such Disinterested Director, or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;the Company delivers to the Trustee a
    written opinion of an investment banking firm of national
    standing or other recognized independent expert with experience
    appraising the terms and conditions of the type of transaction
    or series of related transactions for which an opinion is
    </FONT></TD>
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    <TD align="left">
    <FONT size="2">required stating that the transaction or series
    of related transactions is fair to the Company or such
    Restricted Subsidiary from a financial point of view;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<I><FONT size="2">provided, however,</FONT></I><FONT size="2">
that this provision shall not apply to (i)&nbsp;transactions and
agreements in existence on the date of the Indenture and any
renewals, amendments, modifications and changes to such
agreements which are not adverse in any material respect to the
Company and (ii)&nbsp;employee benefit arrangements with any
officer or director of the Company, including under any stock
option or stock incentive plans, entered into in the ordinary
course of business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Limitation on Liens.</FONT></I><FONT size="2">
The Company will not, and will not cause or permit any
Restricted Subsidiary to, directly or indirectly, create, incur
or affirm any Lien of any kind securing any Pari Passu
Indebtedness or Subordinated Indebtedness (including any
assumption, guarantee or other liability with respect thereto by
any Restricted Subsidiary) upon any property or assets
(including any intercompany notes) of the Company or any
Restricted Subsidiary owned on the date of the Indenture or
acquired after the date of the Indenture, or assign or convey
any right to receive any income or profits therefrom, unless the
Notes (or a Guarantee in the case of Liens of a Guarantor) are
directly secured equally and ratably with (or, in the case of
Subordinated Indebtedness, prior or senior thereto, with the
same relative priority as the Notes shall have with respect to
such Subordinated Indebtedness) the obligation or liability
secured by such Lien except for Liens
</FONT>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(A)&nbsp;securing any Indebtedness which became
    Indebtedness pursuant to a transaction permitted under
    &#147;&#151;&nbsp;Consolidation, Merger, Sale of Assets&#148; or
    securing Acquired Indebtedness which was created prior to (and
    not created in connection with, or in contemplation of) the
    incurrence of such Pari Passu Indebtedness or Subordinated
    Indebtedness (including any assumption, guarantee or other
    liability with respect thereto by any Restricted Subsidiary) and
    which Indebtedness is permitted under the provisions of
    <I>&#147;&#151;&nbsp;Limitation on Indebtedness&#148;</I> or
    </FONT></TD>
</TR>

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    <TD>&nbsp;</TD>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(B)&nbsp;securing any Indebtedness incurred in
    connection with any refinancing, renewal, substitutions or
    replacements of any such Indebtedness described in
    clause&nbsp;(A), so long as the aggregate principal amount of
    Indebtedness represented thereby (or if such Indebtedness
    provides for an amount less than the principal amount thereof to
    be due and payable upon a declaration of acceleration of the
    maturity thereof, the original issue price of such Indebtedness
    plus any accreted value attributable thereto since the original
    issuance of such Indebtedness) is not increased by such
    refinancing by an amount greater than the lesser of (1)&nbsp;the
    stated amount of any premium or other payment required to be
    paid in connection with such a refinancing pursuant to the terms
    of the Indebtedness being refinanced or (2)&nbsp;the amount of
    premium or other payment actually paid at such time to refinance
    the Indebtedness, plus, in either case, the amount of expenses
    of the Company incurred in connection with such refinancing,
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<I><FONT size="2">provided, however,</FONT></I><FONT size="2">
that in the case of clauses&nbsp;(A) and (B), any such Lien only
extends to the assets that were subject to such Lien securing
such Indebtedness prior to the related acquisition by the
Company or its Restricted Subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notwithstanding the foregoing, any Lien securing
the Notes granted pursuant to this covenant shall be
automatically and unconditionally released and discharged upon
the release by the holders of the Pari Passu Indebtedness or
Subordinated Indebtedness described above of their Lien on the
property or assets of the Company or any Restricted Subsidiary
(including any deemed release upon payment in full of all
obligations under such Indebtedness), at such time as the
holders of all such Pari Passu Indebtedness or Subordinated
Indebtedness also release their Lien on the property or assets
of the Company or such Restricted Subsidiary, or upon any sale,
exchange or transfer to any Person not an Affiliate of the
Company of the property or assets secured by such Lien, or of
all of the Capital Stock held by the Company or any Restricted
Subsidiary in, or all or substantially all the assets of, any
Restricted Subsidiary creating such Lien.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Limitation on Sale of
Assets.</FONT></I><FONT size="2"> (a)&nbsp;The Company will not,
and will not cause or permit any of its Restricted Subsidiaries
to, directly or indirectly, consummate an Asset Sale unless
(1)&nbsp;at least 75% of the
</FONT>

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<DIV align="left">
<FONT size="2">consideration from such Asset Sale other than
Asset Swaps is received in cash and (2)&nbsp;the Company or such
Restricted Subsidiary receives consideration at the time of such
Asset Sale at least equal to the Fair Market Value of the shares
or assets subject to such Asset Sale (as determined by the board
of directors of the Company and evidenced in a board
resolution); <I>provided</I> that the amount of any Designated
Noncash Consideration received by the Company or any of its
Restricted Subsidiaries in the Asset Sale shall be deemed
&#147;cash&#148; for purposes of this provision.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">With respect to an Asset Swap constituting an
Asset Sale, the Company or any Restricted Subsidiary shall be
required to receive in cash an amount equal to 75% of the
Proceeds of the Asset Sale which do not consist of like-kind
assets acquired with the Asset Swap.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;If all or a portion of the Net Cash
Proceeds of any Asset Sale or any Real Estate Subsidiary
Financing Proceeds (collectively, a &#147;Net Cash Proceeds
Transaction&#148;) are not required to be applied to repay
permanently any Senior Indebtedness or Senior Guarantor
Indebtedness then outstanding as required by the terms thereof,
or the Company determines not to apply such Net Cash Proceeds or
any Real Estate Subsidiary Financing Proceeds to the permanent
prepayment of such Senior Indebtedness or Senior Guarantor
Indebtedness, or if no such Senior Indebtedness or Senior
Guarantor Indebtedness is then outstanding, then the Company or
a Restricted Subsidiary may within 180&nbsp;days of the Net Cash
Proceeds Transaction invest the Net Cash Proceeds or any Real
Estate Subsidiary Financing Proceeds in properties and other
assets that (as determined by the board of directors of the
Company) replace the properties and assets that were the subject
of the Net Cash Proceeds Transaction or in properties and assets
that will be used in the businesses of the Company or its
Restricted Subsidiaries existing on the date of the Indenture or
in businesses reasonably related thereto. The amount of such Net
Cash Proceeds or any Real Estate Subsidiary Financing Proceeds
not used or invested within 180&nbsp;days of the Net Cash
Proceeds Transaction as set forth in this paragraph constitutes
&#147;Excess Proceeds.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;When the aggregate amount of Excess
Proceeds exceeds $10.0&nbsp;million or more, the Company will
apply the Excess Proceeds to the repayment of the Notes and any
other Pari Passu Indebtedness outstanding with similar
provisions requiring the Company to make an offer to purchase
such Indebtedness with the proceeds from any Asset Sale as
follows:
</FONT>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(A)&nbsp;the Company will make an offer to
    purchase (an &#147;Offer&#148;) from all holders of the Notes in
    accordance with the procedures set forth in the Indenture in the
    maximum principal amount (expressed as a multiple of $1,000) of
    Notes that may be purchased out of an amount (the &#147;Note
    Amount&#148;) equal to the product of such Excess Proceeds
    multiplied by a fraction, the numerator of which is the
    outstanding principal amount of the Notes, and the denominator
    of which is the sum of the outstanding principal amount (or
    accreted value in the case of Indebtedness issued with original
    issue discount) of the Notes and such Pari Passu Indebtedness
    (subject to proration in the event such amount is less than the
    aggregate Offered Price (as defined herein) of all Notes
    tendered) and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(B)&nbsp;to the extent required by such Pari
    Passu Indebtedness to permanently reduce the principal amount of
    such Pari Passu Indebtedness (or accreted value in the case of
    Indebtedness issued with original issue discount), the Company
    will make an offer to purchase or otherwise repurchase or redeem
    Pari Passu Indebtedness (a &#147;Pari Passu Offer&#148;) in an
    amount (the &#147;Pari Passu Debt Amount&#148;) equal to the
    excess of the Excess Proceeds over the Note Amount; <I>provided
    </I>that in no event will the Company be required to make a Pari
    Passu Offer in a Pari Passu Debt Amount exceeding the principal
    amount (or accreted value) of such Pari Passu Indebtedness plus
    the amount of any premium required to be paid to repurchase such
    Pari Passu Indebtedness.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The offer price for the Notes will be payable in
cash in an amount equal to 100% of the principal amount of the
Notes plus accrued and unpaid interest, if any, to the date (the
&#147;Offer Date&#148;) such Offer is consummated (the
&#147;Offered Price&#148;), in accordance with the procedures
set forth in the Indenture. To the extent that the aggregate
Offered Price of the Notes tendered pursuant to the Offer is
less than the Note Amount relating thereto or the aggregate
amount of Pari Passu Indebtedness that is purchased in a Pari
Passu Offer is less than the Pari Passu Debt Amount, the Company
may use any remaining Excess Proceeds for general corporate
purposes. If the aggregate principal amount of Notes and Pari
Passu
</FONT>

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<DIV align="left">
<FONT size="2">Indebtedness surrendered by holders thereof
exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis. Upon the
completion of the purchase of all the Notes tendered pursuant to
an Offer and the completion of a Pari Passu Offer, the amount of
Excess Proceeds, if any, shall be reset at zero.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;If the Company becomes obligated to make
an Offer pursuant to clause&nbsp;(c) above, the Notes and the
Pari Passu Indebtedness shall be purchased by the Company, at
the option of the holders thereof, in whole or in part in
integral multiples of $1,000, on a date that is not earlier than
30&nbsp;days and not later than 60&nbsp;days from the date the
notice of the Offer is given to holders, or such later date as
may be necessary for the Company to comply with the requirements
under the Exchange Act.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(e)&nbsp;The Indenture will provide that the
Company will comply with the applicable tender offer rules,
including Rule&nbsp;14e-1 under the Exchange Act, and any other
applicable securities laws or regulations in connection with an
Offer.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Limitation on Issuances of Guarantees of and
Pledges for Indebtedness.</FONT></I><FONT size="2"> (a)&nbsp;The
Company will not cause or permit any Restricted Subsidiary,
other than a Guarantor, directly or indirectly, to secure the
payment of any Senior Indebtedness of the Company and the
Company will not, and will not permit any Restricted Subsidiary
to, pledge any intercompany notes representing obligations of
any Restricted Subsidiary (other than a Guarantor) or any
Capital Stock of a Restricted Subsidiary (other than (x)&nbsp;a
Guarantor or (y)&nbsp;Milkco, Inc.) to secure the payment of any
Senior Indebtedness unless in each case such Restricted
Subsidiary simultaneously executes and delivers a supplemental
indenture to the Indenture providing for a guarantee of payment
of the Notes by such Restricted Subsidiary, which guarantee
shall be on the same terms as the guarantee of the Senior
Indebtedness (if a guarantee of Senior Indebtedness is granted
by any such Restricted Subsidiary) except that the guarantee of
the Notes need not be secured and shall be subordinated to the
claims against such Restricted Subsidiary in respect of Senior
Indebtedness or Senior Guarantor Indebtedness to the same extent
as the Notes are subordinated to Senior Indebtedness of the
Company under the Indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;The Company will not cause or permit any
Restricted Subsidiary (which is not a Guarantor), directly or
indirectly, to guarantee, assume or in any other manner become
liable with respect to any Indebtedness of the Company or any
Restricted Subsidiary unless such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture to
the Indenture providing for a Guarantee of the Notes on the same
terms as the guarantee of such Indebtedness except that
</FONT>
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(A)&nbsp;such guarantee need not be secured
    unless required pursuant to <I>&#147;&#151;&nbsp;Limitation on
    Liens,&#148; </I>or otherwise under the Indenture,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(B)&nbsp;if such Indebtedness is by its terms
    Senior Indebtedness, any such assumption, guarantee or other
    liability of such Restricted Subsidiary with respect to such
    Indebtedness shall be senior to such Restricted
    Subsidiary&#146;s Guarantee of the Notes to the same extent as
    such Senior Indebtedness is senior to the Notes and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(C)&nbsp;if such Indebtedness is by its terms
    expressly subordinated to the Notes, any such assumption,
    guarantee or other liability of such Restricted Subsidiary with
    respect to such Indebtedness shall be subordinated to such
    Restricted Subsidiary&#146;s Guarantee of the Notes at least to
    the same extent as such Indebtedness is subordinated to the
    Notes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;Notwithstanding the foregoing, any
Guarantee by a Restricted Subsidiary of the Notes shall provide
by its terms that it (and all Liens securing the same) shall be
automatically and unconditionally released and discharged upon
</FONT>
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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;any sale, exchange or transfer, to any
    Person not an Affiliate of the Company, of all of the
    Company&#146;s Capital Stock in, or all or substantially all the
    assets of, such Restricted Subsidiary, or the designation of
    such Restricted Subsidiary as an Unrestricted Subsidiary, which
    transaction is in compliance with the terms of the Indenture and
    such Restricted Subsidiary is released from all guarantees, if
    any, by it of other Indebtedness of the Company or any
    Restricted Subsidiaries or
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">48
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    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;the release by the holders of the
    Indebtedness of the Company described in clauses&nbsp;(a) and
    (b) above of their security interest or their guarantee by such
    Restricted Subsidiary (including any deemed release upon payment
    in full of all obligations under such Indebtedness), at such
    time as (A)&nbsp;no other Indebtedness of the Company has been
    secured or guaranteed by such Restricted Subsidiary, as the case
    may be, or (B)&nbsp;the holders of all such other Indebtedness
    which is secured or guaranteed by such Restricted Subsidiary
    also release their security interest in or guarantee by such
    Restricted Subsidiary (including any deemed release upon payment
    in full of all obligations under such Indebtedness).
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Limitation on Senior Subordinated
Indebtedness.</FONT></I><FONT size="2"> The Company will not,
and will not permit or cause any Guarantor to, directly or
indirectly, create, incur, issue, assume, guarantee or otherwise
in any manner become directly or indirectly liable for or with
respect to or otherwise permit to exist any Indebtedness that is
subordinate in right of payment to any Indebtedness of the
Company or such Guarantor, as the case may be, unless such
Indebtedness is also pari passu with the Notes or the Guarantee
of such Guarantor or subordinated in right of payment to the
Notes or such Guarantee at least to the same extent as the Notes
or such Guarantee are subordinated in right of payment to Senior
Indebtedness or Senior Indebtedness of such Guarantor, as the
case may be, as set forth in the Indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries.</FONT></I><FONT size="2">
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or
otherwise cause to exist or become effective any consensual
encumbrance or restriction on the ability of any Restricted
Subsidiary to
</FONT>
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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;pay dividends or make any other
    distribution on its Capital Stock or any other interest or
    participation in or measured by its profits,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;pay any Indebtedness owed to the Company
    or any other Restricted Subsidiary,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;make any Investment in the Company or
    any other Restricted Subsidiary or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;transfer any of its properties or assets
    to the Company or any other Restricted Subsidiary.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">However, this covenant will not prohibit any
encumbrance or restriction (1)&nbsp;pursuant to an agreement in
effect on the date of the Indenture; (2)&nbsp;with respect to a
Restricted Subsidiary that is not a Restricted Subsidiary of the
Company on the date of the Indenture, in existence at the time
such Person becomes a Restricted Subsidiary of the Company and
not incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary, provided that such
encumbrances and restrictions are not applicable to the Company
or any Restricted Subsidiary or the properties or assets of the
Company or any Restricted Subsidiary other than such Subsidiary
which is becoming a Restricted Subsidiary; (3)&nbsp;pursuant to
any agreement of a Guarantor governing any Indebtedness
permitted by clause&nbsp;(1) of the definition of Permitted
Indebtedness as to the assets financed with the proceeds of, or
used to finance, such Indebtedness; (4)&nbsp;contained in any
Acquired Indebtedness or other agreement of any entity or
related to assets acquired by or merged into or consolidated
with the Company or any Restricted Subsidiaries so long as such
encumbrance or restriction was not entered into in contemplation
of the acquisition, merger or consolidation transaction;
(5)&nbsp;under any agreement related to a Non-Recourse Real
Estate Subsidiary which is only related to the assets held by
such Non-Recourse Real Estate Subsidiary; and (6)&nbsp;under any
agreement that extends, renews, refinances or replaces the
agreements containing the encumbrances or restrictions in the
foregoing clauses&nbsp;(1) through (5), or in this
clause&nbsp;(6), <I>provided </I>that the terms and conditions
of any such encumbrances or restrictions are no more restrictive
in any material respect than those under or pursuant to the
agreement evidencing the Indebtedness so extended, renewed,
refinanced or replaced.
</FONT>

<P align="center"><FONT size="2">49
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Limitation on Unrestricted
Subsidiaries.</FONT></I><FONT size="2"> The Company may
designate after the Issue Date any Subsidiary (other than a
Guarantor) as an &#147;Unrestricted Subsidiary&#148; under the
Indenture (a &#147;Designation&#148;) only if:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;no Default shall have occurred and be
    continuing at the time of or after giving effect to such
    Designation;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;the Company would be permitted to make
    an Investment (other than a Permitted Investment) at the time of
    Designation (assuming the effectiveness of such Designation)
    pursuant to the first paragraph of &#147;Limitation on
    Restricted Payments&#148; above in an amount (the
    &#147;Designation Amount&#148;) equal to the greater of
    (1)&nbsp;the net book value of the Company&#146;s interest in
    such Subsidiary calculated in accordance with GAAP or
    (2)&nbsp;the Fair Market Value of the Company&#146;s interest in
    such Subsidiary as determined in good faith by the
    Company&#146;s board of directors;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;the Company would be permitted under the
    Indenture to incur $1.00 of additional Indebtedness (other than
    Permitted Indebtedness) pursuant to the covenant described under
    &#147;&#151;&nbsp;Limitation on Indebtedness&#148; at the time
    of such Designation (assuming the effectiveness of such
    Designation);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(d)&nbsp;such Unrestricted Subsidiary does not
    own any Capital Stock in any Restricted Subsidiary of the
    Company which is not simultaneously being designated an
    Unrestricted Subsidiary;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(e)&nbsp;such Unrestricted Subsidiary is not
    liable, directly or indirectly, with respect to any Indebtedness
    other than Unrestricted Subsidiary Indebtedness, provided that
    an Unrestricted Subsidiary may provide a Guarantee for the
    Notes; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(f)&nbsp;such Unrestricted Subsidiary is not a
    party to any agreement, contract, arrangement or understanding
    at such time with the Company or any Restricted Subsidiary
    unless the terms of any such agreement, contract, arrangement or
    understanding are no less favorable to the Company or such
    Restricted Subsidiary than those that might be obtained at the
    time from Persons who are not Affiliates of the Company or, in
    the event such condition is not satisfied, the value of such
    agreement, contract, arrangement or understanding to such
    Unrestricted Subsidiary shall be deemed a Restricted Payment.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of any such Designation, the Company
shall be deemed to have made an Investment constituting a
Restricted Payment pursuant to the covenant
<I>&#147;&#151;&nbsp;Limitation on Restricted Payments&#148;
</I>for all purposes of the Indenture in the Designation Amount.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Indenture will also provide that the Company
shall not and shall not cause or permit any Restricted
Subsidiary to at any time
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;provide credit support for, guarantee or
    subject any of its property or assets (other than the Capital
    Stock of any Unrestricted Subsidiary) to the satisfaction of,
    any Indebtedness of any Unrestricted Subsidiary (including any
    undertaking, agreement or instrument evidencing such
    Indebtedness) (other than Permitted Investments in Unrestricted
    Subsidiaries) or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;be directly or indirectly liable for any
    Indebtedness of any Unrestricted Subsidiary. For purposes of the
    foregoing, the Designation of a Subsidiary of the Company as an
    Unrestricted Subsidiary shall be deemed to be the Designation of
    all of the Subsidiaries of such Subsidiary as Unrestricted
    Subsidiaries.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company may revoke any Designation of a
Subsidiary as an Unrestricted Subsidiary (a
&#147;Revocation&#148;) if:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;no Default shall have occurred and be
    continuing at the time of and after giving effect to such
    Revocation;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">50
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;all Liens and Indebtedness of such
    Unrestricted Subsidiary outstanding immediately following such
    Revocation would, if incurred at such time, have been permitted
    to be incurred for all purposes of the Indenture; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;unless such redesignated Subsidiary
    shall not have any Indebtedness outstanding (other than
    Indebtedness that would be Permitted Indebtedness), immediately
    after giving effect to such proposed Revocation, and after
    giving pro forma effect to the incurrence of any such
    Indebtedness of such redesignated Subsidiary as if such
    Indebtedness was incurred on the date of the Revocation, the
    Company could incur $1.00 of additional Indebtedness (other than
    Permitted Indebtedness) pursuant to the covenant described under
    &#147;&#151;&nbsp;Limitation on Indebtedness.&#148;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All Designations and Revocations must be
evidenced by a resolution of the board of directors of the
Company delivered to the Trustee certifying compliance with the
foregoing provisions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Provision of Financial
Statements.</FONT></I><FONT size="2"> Whether or not the Company
is subject to Section&nbsp;13(a) or 15(d) of the Exchange Act,
the Company will, to the extent permitted under the Exchange
Act, file with the Commission the annual reports, quarterly
reports and other documents which the Company would have been
required to file with the Commission pursuant to
Sections&nbsp;13(a) or 15(d) if the Company were so subject,
such documents to be filed with the Commission on or prior to
the date (the &#147;Required Filing Date&#148;) by which the
Company would have been required so to file such documents if
the Company were so subject.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company will also in any event
(a)&nbsp;within 15&nbsp;days of each Required Filing Date
(1)&nbsp;transmit by mail to all holders, as their names and
addresses appear in the security register, without cost to such
holders and (2)&nbsp;file with the Trustee copies of the annual
reports, quarterly reports and other documents which the Company
would have been required to file with the Commission pursuant to
Sections&nbsp;13(a) or 15(d) of the Exchange Act if the Company
were subject to either of such Sections and (b)&nbsp;if filing
such documents by the Company with the Commission is not
permitted under the Exchange Act, promptly upon written request
and payment of the reasonable cost of duplication and delivery,
supply copies of such documents to any prospective holder at the
Company&#146;s cost.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If any Guarantor&#146;s financial statements
would be required to be included in the financial statements
filed or delivered pursuant to the Indenture if the Company were
subject to Section&nbsp;13(a) or 15(d) of the Exchange Act, the
Company shall include such Guarantor&#146;s financial statements
in any filing or delivery pursuant to the Indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Indenture also provides that, so long as any
of the Notes remain outstanding, the Company will make available
to any prospective purchaser of Notes or beneficial owner of
Notes in connection with any sale thereof the information
required by Rule&nbsp;144A(d)(4) under the Securities Act, until
such time as the Company has either exchanged the Notes for
securities identical in all material respects which have been
registered under the Securities Act or until such time as the
holders thereof have disposed of such Notes pursuant to an
effective registration statement under the Securities Act.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Additional
Covenants.</FONT></I><FONT size="2"> The Indenture also contains
covenants with respect to the following matters:
(1)&nbsp;payment of principal, premium and interest;
(2)&nbsp;maintenance of an office or agency in The City of New
York; (3)&nbsp;arrangements regarding the handling of money held
in trust; (4)&nbsp;maintenance of corporate existence;
(5)&nbsp;payment of taxes and other claims; (6)&nbsp;maintenance
of properties; and (7)&nbsp;maintenance of insurance.
</FONT>

<P align="left">
<B><FONT size="2">Consolidation, Merger, Sale of
Assets</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company will not, in a single transaction or
through a series of related transactions, consolidate with or
merge with or into any other Person or sell, assign, convey,
transfer, lease or otherwise dispose of all or substantially all
of its properties and assets to any Person or group of Persons,
or permit any of its Restricted Subsidiaries to enter into any
such transaction or series of transactions, if such transaction
or series of transactions, in the aggregate, would result in a
sale, assignment, conveyance, transfer, lease or disposition of
all or substantially all of the properties and assets of the
Company and its Restricted
</FONT>

<P align="center"><FONT size="2">51
</FONT>

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<DIV align="left">
<FONT size="2">Subsidiaries on a Consolidated basis to any other
Person or group of Persons, unless at the time and after giving
effect thereto
</FONT>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;either (a)&nbsp;the Company will be the
    continuing corporation or (b)&nbsp;the Person (if other than the
    Company) formed by such consolidation or into which the Company
    is merged or the Person which acquires by sale, assignment,
    conveyance, transfer, lease or disposition all or substantially
    all of the properties and assets of the Company and its
    Restricted Subsidiaries on a Consolidated basis (the
    &#147;Surviving Entity&#148;) will be a corporation duly
    organized and validly existing under the laws of the United
    States of America, any state thereof or the District of Columbia
    and such Person expressly assumes, by a supplemental indenture,
    in a form reasonably satisfactory to the Trustee, all the
    obligations of the Company under the Notes and the Indenture and
    the Registration Rights Agreement, as the case may be, and the
    Notes and the Indenture and the Registration Rights Agreement
    will remain in full force and effect as so supplemented (and any
    Guarantees will be confirmed as applying to such Surviving
    Entity&#146;s obligations);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;immediately before and immediately after
    giving effect to such transaction on a pro forma basis (and
    treating any Indebtedness not previously an obligation of the
    Company or any of its Restricted Subsidiaries which becomes the
    obligation of the Company or any of its Restricted Subsidiaries
    as a result of such transaction as having been incurred at the
    time of such transaction), no Default or Event of Default will
    have occurred and be continuing;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;immediately after giving effect to such
    transaction on a pro forma basis (on the assumption that the
    transaction occurred on the first day of the four-quarter period
    for which financial statements are available ending immediately
    prior to the consummation of such transaction with the
    appropriate adjustments with respect to the transaction being
    included in such pro forma calculation), the Company (or the
    Surviving Entity if the Company is not the continuing obligor
    under the Indenture) could incur $1.00 of additional
    Indebtedness (other than Permitted Indebtedness) under the
    provisions of &#147;&#151;&nbsp;Certain Covenants&nbsp;&#151;
    Limitation on Indebtedness;&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;at the time of the transaction each
    Guarantor, if any, unless it is the other party to the
    transactions described above, will have by supplemental
    indenture confirmed that its Guarantee shall apply to such
    Person&#146;s obligations under the Indenture and the Notes; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;at the time of the transaction the
    Company or the Surviving Entity will have delivered, or caused
    to be delivered, to the Trustee, in form and substance
    reasonably satisfactory to the Trustee, an officers&#146;
    certificate and an opinion of counsel, each to the effect that
    such consolidation, merger, transfer, sale, assignment,
    conveyance, transfer, lease or other transaction and the
    supplemental indenture in respect thereof comply with the
    Indenture and that all conditions precedent therein provided for
    relating to such transaction have been complied with.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each Guarantor, if any, will not, and the Company
will not permit any Guarantor to, in a single transaction or
through a series of related transactions, consolidate with or
merge with or into any other Person (other than the Company or
any Guarantor) or sell, assign, convey, transfer, lease or
otherwise dispose of all or substantially all of its properties
and assets to any Person or group of Persons (other than the
Company or any Guarantor) or permit any of its Restricted
Subsidiaries to enter into any such transaction or series of
transactions if such transaction or series of transactions, in
the aggregate, would result in a sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of
the properties and assets of the Guarantor and its Restricted
Subsidiaries on a Consolidated basis to any other Person or
group of Persons (other than the Company or any Guarantor),
unless at the time and after giving effect thereto
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;either (a)&nbsp;the Guarantor will be
    the continuing entity in the case of a consolidation or merger
    involving the Guarantor or (b)&nbsp;the Person (if other than
    the Guarantor) formed by such consolidation or into which such
    Guarantor is merged or the Person which acquires by sale,
    assignment, conveyance, transfer, lease or disposition all or
    substantially all of the properties and assets of the Guarantor
    and its Restricted Subsidiaries on a Consolidated basis (the
    &#147;Surviving
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">52
</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Guarantor Entity&#148;) will be duly organized
    and validly existing under the laws of the United States of
    America, any state thereof or the District of Columbia and such
    Person expressly assumes, by a supplemental indenture, in a form
    reasonably satisfactory to the Trustee, all the obligations of
    such Guarantor under its Guarantee of the Notes and the
    Indenture and the Registration Rights Agreement and such
    Guarantee, Indenture and Registration Rights Agreement will
    remain in full force and effect;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;immediately before and immediately after
    giving effect to such transaction on a pro forma basis, no
    Default or Event of Default will have occurred and be
    continuing; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;at the time of the transaction such
    Guarantor or the Surviving Guarantor Entity will have delivered,
    or caused to be delivered, to the Trustee, in form and substance
    reasonably satisfactory to the Trustee, an officers&#146;
    certificate and an opinion of counsel, each to the effect that
    such consolidation, merger, transfer, sale, assignment,
    conveyance, lease or other transaction and the supplemental
    indenture in respect thereof comply with the Indenture and that
    all conditions precedent therein provided for relating to such
    transaction have been complied with; provided, however, that
    this paragraph shall not apply to any Guarantor whose Guarantee
    of the Notes is unconditionally released and discharged in
    accordance with paragraph (c)&nbsp;under the provisions of
    &#147;Certain Covenants &#151; Limitation on Issuances of
    Guarantees of and Pledges for Indebtedness.&#148;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notwithstanding the foregoing, (i)&nbsp;any
Restricted Subsidiary may consolidate with, merge into or
transfer all or part of its properties and assets to the Company
and (ii)&nbsp;the Company may merge with an Affiliate that has
no significant assets or liabilities and was formed solely for
the purpose of changing the jurisdiction of organization of the
Company in another state of the United States, so long as the
amount of Indebtedness of the Company and its Restricted
Subsidiaries is not increased thereby and provided that the
successor Person assumes all the obligations of the Company
under the Registration Rights Agreement, the Indenture and the
Notes or its Guarantee, as the case may be, pursuant to a
supplemental indenture in a form reasonably satisfactory to the
Trustee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of any transaction (other than a
lease) described in and complying with the conditions listed in
the first two paragraphs of this Section in which the Company or
any Guarantor, as the case may be, is not the continuing
corporation, the successor Person formed or remaining or to
which such transfer is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company or
such Guarantor, as the case may be, and the Company or any
Guarantor, as the case may be, would be discharged (other than
in a transaction that results in the transfer of assets
constituting or accounting for less than 95% of the Consolidated
assets (as of the last balance sheet date available to the
Company) of the Company or the Consolidated revenue of the
Company (as of the last 12-month period for which financial
statements are available)) from all obligations and covenants
under the Indenture and the Notes or its Guarantee, as the case
may be, and the Registration Rights Agreement.
</FONT>

<P align="left">
<B><FONT size="2">Events of Default</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An Event of Default will occur under the
Indenture if:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;there shall be a default in the payment
    of any interest on any Note when it becomes due and payable, and
    such default shall continue for a period of 30&nbsp;days
    (whether or not prohibited by the subordination provisions of
    the Indenture);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;there shall be a default in the payment
    of the principal of (or premium, if any, on) any Note at its
    Maturity (upon acceleration, optional or mandatory redemption,
    if any, required repurchase or otherwise) (whether or not
    prohibited by the subordination provisions of the Indenture);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;(a)&nbsp;there shall be a default in the
    performance, or breach, of any covenant or agreement of the
    Company or any Guarantor under the Indenture or any Guarantee
    (other than a default in the performance, or breach, of a
    covenant or agreement which is specifically dealt with in
    clause&nbsp;(1), (2) or in clause&nbsp;(b), (c) or (d) of this
    clause&nbsp;(3)) and such default or breach shall continue for a
    period
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">53
</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">of 30&nbsp;days after written notice has been
    given, by certified mail, (1)&nbsp;to the Company by the Trustee
    or (2)&nbsp;to the Company and the Trustee by the holders of at
    least 25% in aggregate principal amount of the outstanding
    Notes; (b)&nbsp;there shall be a default in the performance or
    breach of the provisions described in
    &#147;&#151;&nbsp;Consolidation, Merger, Sale of Assets;&#148;
    (c)&nbsp;the Company shall have failed to make or consummate an
    Offer in accordance with the provisions of
    &#147;&#151;&nbsp;Certain Covenants&nbsp;&#151; Limitation on
    Sale of Assets&#148;; or (d)&nbsp;the Company shall have failed
    to make or consummate a Change of Control Offer in accordance
    with the provisions of &#147;Purchase of Notes Upon a Change of
    Control;&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;one or more defaults shall have occurred
    under any of the agreements, indentures or instruments under
    which the Company, any Guarantor or any Restricted Subsidiary
    then has outstanding Indebtedness in excess of
    $5.0&nbsp;million, individually or in the aggregate, and either
    (a)&nbsp;such default results from the failure to pay such
    Indebtedness at its stated final maturity or (b)&nbsp;such
    default or defaults have resulted in the acceleration of the
    maturity of such Indebtedness.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;any Guarantee shall for any reason cease
    to be, or shall for any reason be asserted in writing by any
    Guarantor or the Company not to be, in full force and effect and
    enforceable in accordance with its terms, except to the extent
    contemplated by the Indenture and any such Guarantee;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(6)&nbsp;one or more judgments, orders or decrees
    of any court or regulatory or administrative agency for the
    payment of money in excess of $5.0&nbsp;million, either
    individually or in the aggregate, shall be rendered against the
    Company, any Guarantor or any Restricted Subsidiary or any of
    their respective properties and shall not be discharged or fully
    bonded and there shall have been a period of 60&nbsp;consecutive
    days during which a stay of enforcement of such judgment or
    order, by reason of an appeal or otherwise, shall not be in
    effect and the Company is not making payments or complying with
    its obligations entered into in connection with such judgment,
    order or decree;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(7)&nbsp;any holder or holders of at least
    $5.0&nbsp;million in aggregate principal amount of Indebtedness
    of the Company, any Guarantor or any Restricted Subsidiary after
    a default under such Indebtedness shall notify the Trustee of
    the sale or disposition of any assets of the Company, any
    Guarantor or any Restricted Subsidiary that have been pledged to
    or for the benefit of such holder or holders to secure such
    Indebtedness or shall commence proceedings, or take any action
    (including by way of set-off), to retain in satisfaction of such
    Indebtedness or to collect on, seize, dispose of or apply in
    satisfaction of Indebtedness, assets of the Company, any
    Guarantor or any Restricted Subsidiary (including funds on
    deposit or held pursuant to lock-box and other similar
    arrangements);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(8)&nbsp;there shall have been the entry by a
    court of competent jurisdiction of (a)&nbsp;a decree or order
    for relief in respect of the Company, any Guarantor or any
    Restricted Subsidiary in an involuntary case or proceeding under
    any applicable Bankruptcy Law or (b)&nbsp;a decree or order
    adjudging the Company, any Guarantor or any Restricted
    Subsidiary bankrupt or insolvent, or seeking reorganization,
    arrangement, adjustment or composition of or in respect of the
    Company, any Guarantor or any Subsidiary under any applicable
    federal or state law, or appointing a custodian, receiver,
    liquidator, assignee, trustee, sequestrator (or other similar
    official) of the Company, any Guarantor or any Restricted
    Subsidiary or of any substantial part of their respective
    properties, or ordering the winding up or liquidation of their
    affairs, and any such decree or order for relief shall continue
    to be in effect, or any such other decree or order shall be
    unstayed and in effect, for a period of 60&nbsp;consecutive
    days; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(9)&nbsp;(a)&nbsp;the Company, any Guarantor or
    any Restricted Subsidiary commences a voluntary case or
    proceeding under any applicable Bankruptcy Law or any other case
    or proceeding to be adjudicated bankrupt or insolvent,
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;the Company, any Guarantor or any
    Restricted Subsidiary consents to the entry of a decree or order
    for relief in respect of the Company, such Guarantor or such
    Restricted Subsidiary in an involuntary case or proceeding under
    any applicable Bankruptcy Law or to the commencement of any
    bankruptcy or insolvency case or proceeding against it,
    </FONT></TD>
</TR>

</TABLE>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;the Company, any Guarantor or any
    Restricted Subsidiary files a petition or answer or consent
    seeking reorganization or relief under any applicable federal or
    state law,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(d)&nbsp;the Company, any Guarantor or any
    Restricted Subsidiary (1)&nbsp;consents to the filing of such
    petition or the appointment of, or taking possession by, a
    custodian, receiver, liquidator, assignee, trustee, sequestrator
    or similar official of the Company, any Guarantor or such
    Restricted Subsidiary or of any substantial part of their
    respective properties, (2)&nbsp;makes an assignment for the
    benefit of creditors or (3)&nbsp;admits in writing its inability
    to pay its debts generally as they become due or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(e)&nbsp;the Company, any Guarantor or any
    Restricted Subsidiary takes any corporate action in furtherance
    of any such actions in this paragraph&nbsp;(9).
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If an Event of Default (other than as specified
in clauses&nbsp;(8) and (9) of the prior paragraph) shall occur
and be continuing with respect to the Indenture, the Trustee or
the holders of not less than 25% in aggregate principal amount
of the Notes then outstanding may, and the Trustee at the
request of such holders shall, declare all unpaid principal of,
premium, if any, and accrued interest on all Notes to be due and
payable immediately, by a notice in writing to the Company (and
to the Trustee if given by the holders of the Notes) and upon
any such declaration, such principal, premium, if any, and
interest shall become due and payable immediately. If an Event
of Default specified in clause&nbsp;(8) or (9) of the prior
paragraph occurs and is continuing, then all the Notes shall
<I>ipso facto </I>become and be due and payable immediately in
an amount equal to the principal amount of the Notes, together
with accrued and unpaid interest, if any, to the date the Notes
become due and payable, without any declaration or other act on
the part of the Trustee or any holder. Thereupon, the Trustee
may, at its discretion, proceed to protect and enforce the
rights of the holders of Notes by appropriate judicial
proceedings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After a declaration of acceleration, but before a
judgment or decree for payment of the money due has been
obtained by the Trustee, the holders of a majority in aggregate
principal amount of Notes outstanding by written notice to the
Company and the Trustee, may rescind and annul such declaration
and its consequences if
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;the Company has paid or deposited with
    the Trustee a sum sufficient to pay (1)&nbsp;all sums paid or
    advanced by the Trustee under the Indenture and the reasonable
    compensation, expenses, disbursements and advances of the
    Trustee, its agents and counsel, (2)&nbsp;all overdue interest
    on all Notes then outstanding, (3)&nbsp;the principal of, and
    premium, if any, on any Notes then outstanding which have become
    due otherwise than by such declaration of acceleration and
    interest thereon at the rate borne by the Notes and (4)&nbsp;to
    the extent that payment of such interest is lawful, interest
    upon overdue interest at the rate borne by the Notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;the rescission would not conflict with
    any judgment or decree of a court of competent jurisdiction; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;all Events of Default, other than the
    non-payment of principal of, premium, if any, and interest on
    the Notes which have become due solely by such declaration of
    acceleration, have been cured or waived as provided in the
    Indenture.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">No such rescission shall affect any subsequent
default or impair any right consequent thereon.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The holders of not less than a majority in
aggregate principal amount of the Notes outstanding may on
behalf of the holders of all outstanding Notes waive any past
default under the Indenture and its consequences, except a
default (1)&nbsp;in the payment of the principal of, premium, if
any, or interest on any Note (which may only be waived with the
consent of each holder of Notes effected) or (2)&nbsp;in respect
of a covenant or provision which under the Indenture cannot be
modified or amended without the consent of the holder of each
Note affected by such modification or amendment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No holder of any of the Notes has any right to
institute any proceedings with respect to the Indenture or any
remedy thereunder, unless the holders of at least 25% in
aggregate principal amount of the outstanding Notes have made
written request, and offered reasonable indemnity, to the
Trustee to institute
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">such proceeding as Trustee under the Notes and
the Indenture, the Trustee has failed to institute such
proceeding within 15&nbsp;days after receipt of such notice and
the Trustee, within such 15-day period, has not received
directions inconsistent with such written request by holders of
a majority in aggregate principal amount of the outstanding
Notes. Such limitations do not, however, apply to a suit
instituted by a holder of a Note for the enforcement of the
payment of the principal of, premium, if any, or interest on
such Note on or after the respective due dates expressed in such
Note.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company is required to notify the Trustee
within five business days of the occurrence of any Default. The
Company is required to deliver to the Trustee, on or before a
date not more than 60&nbsp;days after the end of each fiscal
quarter and not more than 120&nbsp;days after the end of each
fiscal year, a written statement as to compliance with the
Indenture, including whether or not any Default has occurred.
The Trustee is under no obligation to exercise any of the rights
or powers vested in it by the Indenture at the request or
direction of any of the holders of the Notes unless such holders
offer to the Trustee security or indemnity satisfactory to the
Trustee against the costs, expenses and liabilities which might
be incurred thereby.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Trust Indenture Act contains limitations on
the rights of the Trustee, should it become a creditor of the
Company or any Guarantor, if any, to obtain payment of claims in
certain cases or to realize on certain property received by it
in respect of any such claims, as security or otherwise. The
Trustee is permitted to engage in other transactions, but if it
acquires any conflicting interest it must eliminate such
conflict upon the occurrence of an Event of Default or else
resign.
</FONT>

<P align="left">
<B><FONT size="2">Defeasance or Covenant Defeasance of
Indenture</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company may, at its option and at any time,
elect to have the obligations of the Company, any Guarantor and
any other obligor upon the Notes discharged with respect to the
outstanding Notes (&#147;defeasance&#148;). Such defeasance
means that the Company, any such Guarantor and any other obligor
under the Indenture shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Notes,
except for
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;the rights of holders of such
    outstanding Notes to receive payments in respect of the
    principal of, premium, if any, and interest on such Notes when
    such payments are due,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;the Company&#146;s obligations with
    respect to the Notes concerning issuing temporary Notes,
    registration of Notes, mutilated, destroyed, lost or stolen
    Notes, and the maintenance of an office or agency for payment
    and money for security payments held in trust,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;the rights, powers, trusts, duties and
    immunities of the Trustee and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;the defeasance provisions of the
    Indenture. In addition, the Company may, at its option and at
    any time, elect to have the obligations of the Company and any
    Guarantor released with respect to certain covenants that are
    described in the Indenture (&#147;covenant defeasance&#148;) and
    thereafter any omission to comply with such obligations shall
    not constitute a Default or an Event of Default with respect to
    the Notes. In the event covenant defeasance occurs, certain
    events (not including non-payment, bankruptcy and insolvency
    events) described under &#147;Events of Default&#148; will no
    longer constitute an Event of Default with respect to the Notes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to exercise either defeasance or
covenant defeasance,
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;the Company must irrevocably deposit
    with the Trustee, in trust, for the benefit of the holders of
    the Notes cash in United States dollars, U.S. Government
    Obligations (as defined in the Indenture), or a combination
    thereof, in such amounts as will be sufficient, in the opinion
    of a nationally recognized firm of independent public
    accountants or a nationally recognized investment banking firm,
    to pay and discharge the principal of, premium, if any, and
    interest on the outstanding Notes on the Stated Maturity (or on
    any date after December&nbsp;1, 2006 (such date being referred
    to as the &#147;Defeasance Redemption Date&#148;), if at or
    prior to electing either defeasance or covenant
    </FONT></TD>
</TR>

</TABLE>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">defeasance, the Company has delivered to the
    Trustee an irrevocable notice to redeem all of the outstanding
    Notes on the Defeasance Redemption Date);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;in the case of defeasance, the Company
    shall have delivered to the Trustee an opinion of independent
    counsel in the United States stating that (A)&nbsp;the Company
    has received from, or there has been published by, the Internal
    Revenue Service a ruling or (B)&nbsp;since the date of the
    Indenture, there has been a change in the applicable federal
    income tax law, in either case to the effect that, and based
    thereon such opinion of independent counsel in the United States
    shall confirm that, the holders of the outstanding Notes will
    not recognize income, gain or loss for federal income tax
    purposes as a result of such defeasance and will be subject to
    federal income tax on the same amounts, in the same manner and
    at the same times as would have been the case if such defeasance
    had not occurred;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;in the case of covenant defeasance, the
    Company shall have delivered to the Trustee an opinion of
    independent counsel in the United States to the effect that the
    holders of the outstanding Notes will not recognize income, gain
    or loss for federal income tax purposes as a result of such
    covenant defeasance and will be subject to federal income tax on
    the same amounts, in the same manner and at the same times as
    would have been the case if such covenant defeasance had not
    occurred;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(d)&nbsp;no Default or Event of Default shall
    have occurred and be continuing on the date of such deposit or
    insofar as clauses&nbsp;(8) or (9) under the first paragraph
    under &#147;&#151;&nbsp;Events of Default&#148; are concerned,
    at any time during the period ending on the 91st day after the
    date of deposit;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(e)&nbsp;such defeasance or covenant defeasance
    shall not cause the Trustee for the Notes to have a conflicting
    interest as defined in the Indenture and for purposes of the
    Trust Indenture Act with respect to any securities of the
    Company or any Guarantor;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(f)&nbsp;such defeasance or covenant defeasance
    shall not result in a breach or violation of, or constitute a
    Default under, the Indenture or any other material agreement or
    instrument to which the Company, any Guarantor or any Restricted
    Subsidiary is a party or by which it is bound;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(g)&nbsp;such defeasance or covenant defeasance
    shall not result in the trust arising from such deposit
    constituting an investment company within the meaning of the
    Investment Company Act of 1940, as amended, unless such trust
    shall be registered under such Act or exempt from registration
    thereunder;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(h)&nbsp;the Company will have delivered to the
    Trustee an opinion of independent counsel in the United States
    to the effect that after the 91st day following the deposit, the
    trust funds will not be subject to the effect of any applicable
    bankruptcy, insolvency, reorganization or similar laws affecting
    creditors&#146; rights generally;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;the Company shall have delivered to the
    Trustee an officers&#146; certificate stating that the deposit
    was not made by the Company with the intent of preferring the
    holders of the Notes or any Guarantee over the other creditors
    of the Company or any Guarantor with the intent of defeating,
    hindering, delaying or defrauding creditors of the Company, any
    Guarantor or others;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(j)&nbsp;no event or condition shall exist that
    would prevent the Company from making payments of the principal
    of, premium, if any, and interest on the Notes on the date of
    such deposit or at any time ending on the 91st day after the
    date of such deposit; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(k)&nbsp;the Company will have delivered to the
    Trustee an officers&#146; certificate and an opinion of
    independent counsel, each stating that all conditions precedent
    provided for relating to either the defeasance or the covenant
    defeasance, as the case may be, have been complied with.
    </FONT></TD>
</TR>

</TABLE>

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</FONT>

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<P align="left">
<B><FONT size="2">Satisfaction and Discharge</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Indenture will be discharged and will cease
to be of further effect (except as to surviving rights of
registration of transfer or exchange of the Notes as expressly
provided for in the Indenture) as to all outstanding Notes under
the Indenture when
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;either
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;all such Notes theretofore authenticated
    and delivered (except lost, stolen or destroyed Notes which have
    been replaced or paid or Notes whose payment has been deposited
    in trust or segregated and held in trust by the Company and
    thereafter repaid to the Company or discharged from such trust
    as provided for in the Indenture) have been delivered to the
    Trustee for cancellation or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;all Notes not theretofore delivered to
    the Trustee for cancellation (a)&nbsp;have become due and
    payable, (b)&nbsp;will become due and payable at their Stated
    Maturity within one year, or (c)&nbsp;are to be called for
    redemption within one year under arrangements satisfactory to
    the Trustee for the giving of notice of redemption by the
    Trustee in the name, and at the expense, of the Company;
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;the Company or any Guarantor has
    irrevocably deposited or caused to be deposited with the Trustee
    as trust funds in trust an amount in United States dollars
    sufficient to pay and discharge the entire indebtedness on the
    Notes not theretofore delivered to the Trustee for cancellation,
    including principal of, premium, if any, and accrued interest at
    such Maturity, Stated Maturity or redemption date;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;the Company or any Guarantor has paid or
    caused to be paid all other sums payable under the Indenture by
    the Company and any Guarantor; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(d)&nbsp;the Company has delivered to the Trustee
    an officers&#146; certificate and an opinion of independent
    counsel each stating that (1)&nbsp;all conditions precedent
    under the Indenture relating to the satisfaction and discharge
    of such Indenture have been complied with and (2)&nbsp;such
    satisfaction and discharge will not result in a breach or
    violation of, or constitute a default under, the Indenture or
    any other material agreement or instrument to which the Company,
    any Guarantor or any Subsidiary is a party or by which the
    Company, any Guarantor or any Subsidiary is bound.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Modifications and Amendments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Modifications and amendments of the Indenture may
be made by the Company, each Guarantor, if any, and the Trustee
with the consent of the holders of at least a majority in
aggregate principal amount of the Notes then outstanding
(including consents obtained in connection with a tender offer
or exchange offer for Notes); <I>provided, however,</I> that no
such modification or amendment may, without the consent of the
holder of each outstanding Note affected thereby:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;change the Stated Maturity of the
    principal of, or any installment of interest on, or change to an
    earlier date any redemption date of, or waive a default in the
    payment of the principal of, premium, if any, or interest on,
    any such Note or reduce the principal amount thereof or the rate
    of interest thereon or any premium payable upon the redemption
    thereof, or change the coin or currency in which the principal
    of any such Note or any premium or the interest thereon is
    payable, or impair the right to institute suit for the
    enforcement of any such payment after the Stated Maturity
    thereof (or, in the case of redemption, on or after the
    redemption date);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;amend, change or modify the obligation
    of the Company to make and consummate a Change of Control Offer
    in the event of a Change of Control in accordance with
    &#147;Purchase of Notes Upon a Change of Control,&#148;
    including amending, changing or modifying any definitions
    related thereto;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">58
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;reduce the percentage in principal
    amount of such outstanding Notes, the consent of whose holders
    is required for any such supplemental indenture, or the consent
    of whose holders is required for any waiver or compliance with
    certain provisions of the Indenture;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;modify any of the provisions relating to
    supplemental indentures requiring the consent of holders or
    relating to the waiver of past defaults or relating to the
    waiver of certain covenants, except to increase the percentage
    of such outstanding Notes required for such actions or to
    provide that certain other provisions of the Indenture cannot be
    modified or waived without the consent of the holder of each
    such Note affected thereby;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;except as otherwise permitted under
    &#147;&#151;&nbsp;Consolidation, Merger, Sale of Assets,&#148;
    consent to the assignment or transfer by the Company or any
    Guarantor of any of its rights and obligations under the
    Indenture; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(6)&nbsp;amend or modify any of the provisions of
    the Indenture relating to the subordination of the Notes or any
    Guarantee in any manner adverse to the holders of the Notes or
    any Guarantee.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notwithstanding the foregoing, without the
consent of any holders of the Notes, the Company, any Guarantor,
any other obligor under the Notes and the Trustee may modify or
amend the Indenture:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;to evidence the succession of another
    Person to the Company or a Guarantor, and the assumption by any
    such successor of the covenants of the Company or such Guarantor
    in the Indenture and in the Notes and in any Guarantee in
    accordance with &#147;&#151;&nbsp;Consolidation, Merger, Sale of
    Assets;&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;to add to the covenants of the Company,
    any Guarantor or any other obligor upon the Notes for the
    benefit of the holders of the Notes or to surrender any right or
    power conferred upon the Company or any Guarantor or any other
    obligor upon the Notes, as applicable, in the Indenture, in the
    Notes or in any Guarantee;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;to cure any ambiguity, or to correct or
    supplement any provision in the Indenture, the Notes or any
    Guarantee which may be defective or inconsistent with any other
    provision in the Indenture, the Notes or any Guarantee or make
    any other provisions with respect to matters or questions
    arising under the Indenture, the Notes or any Guarantee;
    provided that, in each case, such provisions shall not adversely
    affect the interest of the holders of the Notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;to comply with the requirements of the
    Commission in order to effect or maintain the qualification of
    the Indenture under the Trust Indenture Act;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;to add a Guarantor under the Indenture;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(6)&nbsp;to evidence and provide the acceptance
    of the appointment of a successor Trustee under the Indenture; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(7)&nbsp;to mortgage, pledge, hypothecate or
    grant a security interest in favor of the Trustee for the
    benefit of the holders of the Notes as additional security for
    the payment and performance of the Company&#146;s and any
    Guarantor&#146;s obligations under the Indenture, in any
    property, or assets, including any of which are required to be
    mortgaged, pledged or hypothecated, or in which a security
    interest is required to be granted to the Trustee pursuant to
    the Indenture or otherwise.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The holders of a majority in aggregate principal
amount of the Notes outstanding may waive compliance with
certain restrictive covenants and provisions of the Indenture.
</FONT>

<P align="left">
<B><FONT size="2">Governing Law</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Indenture, the Notes and any Guarantee are
governed by, and construed in accordance with, the laws of the
State of New York, without giving effect to the conflicts of law
principles thereof.
</FONT>

<P align="center"><FONT size="2">59
</FONT>

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<P align="left">
<B><FONT size="2">Concerning the Trustee</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Indenture contains certain limitations on the
rights of the Trustee, should it become a creditor of the
Company, to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such
claim as security or otherwise. The Trustee will be permitted to
engage in other transactions; however, if it acquires any
conflicting interest it must eliminate such conflict within
90&nbsp;days, apply to the Commission for permission to continue
as Trustee with such conflict or resign as Trustee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The holders of a majority in principal amount of
the then outstanding Notes will have the right to direct the
time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event
of Default occurs (which has not been cured), the Trustee will
be required, in the exercise of its power, to use the degree of
care of a prudent man in the conduct of his own affairs. Subject
to such provisions, the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the
request of any holder of Notes unless such holder shall have
offered to the Trustee security and indemnity satisfactory to it
against any loss, liability or expense.
</FONT>

<P align="left">
<B><FONT size="2">Certain Definitions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Acquired
Indebtedness&#148;</FONT></I><FONT size="2"> means Indebtedness
of a Person (1)&nbsp;existing at the time such Person becomes a
Restricted Subsidiary or (2)&nbsp;assumed in connection with the
acquisition of assets from such Person, in each case, other than
Indebtedness incurred in connection with, or in contemplation
of, such Person becoming a Restricted Subsidiary or such
acquisition, as the case may be. Acquired Indebtedness shall be
deemed to be incurred on the date of the related acquisition of
assets from any Person or the date the acquired Person becomes a
Restricted Subsidiary, as the case may be.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Affiliate&#148;</FONT></I><FONT size="2">
means, with respect to any specified Person: (1)&nbsp;any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person; (2)&nbsp;any other Person that owns, directly or
indirectly, 5% or more of any class or series of such specified
Person&#146;s (or any of such Person&#146;s direct or indirect
parent&#146;s) Capital Stock or any officer or director of any
such specified Person or other Person or, with respect to any
natural Person, any person having a relationship with such
Person by blood, marriage or adoption not more remote than first
cousin; or (3)&nbsp;any other Person 5% or more of the Voting
Stock of which is beneficially owned or held directly or
indirectly by such specified Person. For the purposes of this
definition, &#147;control&#148; when used with respect to any
specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise; and
the terms &#147;controlling&#148; and &#147;controlled&#148;
have meanings correlative to the foregoing.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Asset
Sale&#148;</FONT></I><FONT size="2"> means any sale, issuance,
conveyance, transfer, lease or other disposition (including,
without limitation, by way of merger, consolidation or sale and
leaseback transaction) (collectively, a &#147;transfer&#148;),
directly or indirectly, in one or a series of related
transactions, of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;any Capital Stock of any Restricted
    Subsidiary;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;all or substantially all of the
    properties and assets of any division or line of business of the
    Company or any Restricted Subsidiary; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;any other properties or assets of the
    Company or any Restricted Subsidiary other than in the ordinary
    course of business.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the purposes of this definition, the term
&#147;Asset Sale&#148; shall not include any transfer of
properties and assets
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(A)&nbsp;that is governed by the provisions
    described under &#147;Consolidation, Merger, Sale of
    Assets,&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(B)&nbsp;that is by the Company to any Restricted
    Subsidiary, or by any Restricted Subsidiary to the Company or
    any Restricted Subsidiary in accordance with the terms of the
    Indenture,
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">60
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(C)&nbsp;that would be within the definition of a
    &#147;Restricted Payment&#148; under the &#147;Limitation on
    Restricted Payments&#148; covenant and would be permitted to be
    made as a Restricted Payment (and shall be deemed a Restricted
    Payment) under such covenant,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(D)&nbsp;that is of obsolete equipment in the
    ordinary course of business, or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(E)&nbsp;the Fair Market Value of which in the
    aggregate does not exceed $1&nbsp;million in any transaction or
    series of related transactions.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Asset
Swap&#148;</FONT></I><FONT size="2"> means the exchange by the
Company or a Restricted Subsidiary of a portion of its property,
business or assets, in the ordinary course of business, for
property, business or assets which, or Capital Stock of a Person
all or substantially all of whose assets, are of a type used in
the business of the Company on the date of the Indenture or in a
Permitted Business, or a combination of any property, business
or assets or Capital Stock of such a Person and cash or Cash
Equivalents.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Average Life to Stated
Maturity&#148;</FONT></I><FONT size="2"> means, as of the date
of determination with respect to any Indebtedness, the quotient
obtained by dividing (1)&nbsp;the sum of the products of
(a)&nbsp;the number of years from the date of determination to
the date or dates of each successive scheduled principal payment
of such Indebtedness multiplied by (b)&nbsp;the amount of each
such principal payment by (2)&nbsp;the sum of all such principal
payments.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Bankruptcy
Law&#148;</FONT></I><FONT size="2"> means Title&nbsp;11, United
States Bankruptcy Code of 1978, or any similar United States
federal or state law or foreign law relating to bankruptcy,
insolvency, receivership, winding up, liquidation,
reorganization or relief of debtors or any amendment to,
succession to or change in any such law.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Capital Lease
Obligation&#148;</FONT></I><FONT size="2"> of any Person means
any obligation of such Person and its Restricted Subsidiaries on
a Consolidated basis under any capital lease of (or other
agreement conveying the right to use) real or personal property
which, in accordance with GAAP, is required to be recorded as a
capitalized lease obligation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Capital
Stock&#148;</FONT></I><FONT size="2"> of any Person means any
and all shares, interests, participations, rights in or other
equivalents (however designated) of such Person&#146;s capital
stock, other equity interests whether now outstanding or issued
after the date of the Indenture, partnership interests (whether
general or limited), limited liability company interests, any
other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person, including any
Preferred Stock, and any rights (other than debt securities
convertible into Capital Stock), warrants or options
exchangeable for or convertible into such Capital Stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Cash
Equivalents&#148;</FONT></I><FONT size="2"> means
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;any evidence of Indebtedness issued or
    directly and fully guaranteed or insured by the United States or
    any agency or instrumentality thereof,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;deposits, certificates of deposit or
    acceptances of any financial institution that is a member of the
    Federal Reserve System and whose senior unsecured debt is rated
    at least &#147;A-1&#148; by Standard &#38; Poor&#146;s Ratings
    Services, a division of The McGraw-Hill Companies, Inc.
    (&#147;S&#38;P&#148;), or at least &#147;P-1&#148; by
    Moody&#146;s Investors Service, Inc. (&#147;Moody&#146;s&#148;),
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;commercial paper with a maturity of
    365&nbsp;days or less issued by a corporation (other than an
    Affiliate or Subsidiary of the Company) organized and existing
    under the laws of the United States of America, any state
    thereof or the District of Columbia and rated at least
    &#147;A-1&#148; by S&#38;P and at least &#147;P-1&#148; by
    Moody&#146;s,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;repurchase agreements and reverse
    repurchase agreements relating to marketable direct obligations
    issued or unconditionally guaranteed by the United States or
    issued by any agency thereof and backed by the full faith and
    credit of the United States maturing within 365&nbsp;days from
    the date of acquisition, and
    </FONT></TD>
</TR>

</TABLE>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;money market funds which invest
    substantially all of their assets in securities described in the
    preceding clauses (1)&nbsp;through (4).
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Change of
Control&#148;</FONT></I><FONT size="2"> means the occurrence of
any of the following events:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;any &#147;person&#148; or
    &#147;group&#148; (as such terms are used in Sections&nbsp;13(d)
    and 14(d) of the Exchange Act), other than Permitted Holders, is
    or becomes the &#147;beneficial owner&#148; (as defined in
    Rules&nbsp;13d-3 and 13d-5 under the Exchange Act, except that a
    Person shall be deemed to have beneficial ownership of all
    shares that such Person has the right to acquire, whether such
    right is exercisable immediately or only after the passage of
    time), directly or indirectly, of Voting Stock entitled to
    exercise more than 35% of the total voting power of all
    outstanding Voting Stock of the Company, provided that the
    Permitted Holders &#147;beneficially own&#148; (as so defined)
    Voting Stock entitled to exercise less than 50% of the total
    voting power of all outstanding Voting Stock of the Company;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;during any period of two consecutive
    years, individuals who at the beginning of such period
    constituted the board of directors of the Company (together with
    any new directors whose election to such board or whose
    nomination for election by the stockholders of the Company was
    approved by a vote of 66&nbsp;2/3% of the directors then still
    in office who were either directors at the beginning of such
    period or whose election or nomination for election was
    previously so approved), cease for any reason to constitute a
    majority of such board of directors then in office;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;the Company consolidates with or merges
    with or into any Person or sells, assigns, conveys, transfers,
    leases or otherwise disposes of all or substantially all of its
    assets to any Person, or any Person consolidates with or merges
    into or with the Company, in any such event pursuant to a
    transaction in which the outstanding Voting Stock of the Company
    is converted into or exchanged for cash, securities or other
    property, other than any such transaction where
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(A)&nbsp;the outstanding Voting Stock of the
    Company is changed into or exchanged for (1)&nbsp;Voting Stock
    of the surviving corporation which is not Redeemable Capital
    Stock or (2)&nbsp;cash, securities and other property (other
    than Capital Stock of the surviving corporation) in an amount
    which could be paid by the Company as a Restricted Payment as
    described under &#147;&#151; Certain Covenants &#151; Limitation
    on Restricted Payments&#148; (and such amount shall be treated
    as a Restricted Payment subject to the provisions in the
    Indenture described under &#147;&#151;&nbsp;Certain
    Covenants&nbsp;&#151; Limitation on Restricted Payments&#148;)
    and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(B)&nbsp;immediately after such transaction, no
    &#147;person&#148; or &#147;group,&#148; other than Permitted
    Holders, is the beneficial owner (as defined in Rules&nbsp;13d-3
    and 13d-5 under the Exchange Act, except that a person shall be
    deemed to have beneficial ownership of all securities that such
    person has the right to acquire, whether such right is
    exercisable immediately or only after the passage of time),
    directly or indirectly, of Voting Stock entitled to exercise
    more than 35% of the total voting power of all outstanding
    Voting Stock of the surviving corporation; or
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;the Company is liquidated or dissolved
    or adopts a plan of liquidation or dissolution other than in a
    transaction which complies with the provisions described under
    &#147;&#151;&nbsp;Consolidation, Merger, Sale of Assets.&#148;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For purposes of this definition, any transfer of
an equity interest of an entity that was formed for the purpose
of acquiring voting stock of the Company will be deemed to be a
transfer of such portion of such voting stock as corresponds to
the portion of the equity of such entity that has been so
transferred.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Class&nbsp;A Common
Stock&#148;</FONT></I><FONT size="2"> means the Company&#146;s
Class&nbsp;A Common Stock, $0.05 par value per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Class&nbsp;B Common
Stock&#148;</FONT></I><FONT size="2"> means the Company&#146;s
Class&nbsp;B Common Stock, $0.05 par value per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Commission&#148;</FONT></I><FONT size="2">
means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any
time after the execution of the Indenture such Commission
</FONT>

<P align="center"><FONT size="2">62
</FONT>

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<DIV align="left">
<FONT size="2">is not existing and performing the duties now
assigned to it under the Securities Act, Exchange Act and Trust
Indenture Act then the body performing such duties at such time.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Commodity Price Protection
Agreement&#148;</FONT></I><FONT size="2"> means any forward
contract, commodity swap, commodity option or other similar
financial agreement or arrangement relating to, or the value
which is dependent upon, fluctuations in commodity prices.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Common
Stock&#148;</FONT></I><FONT size="2"> means the Company&#146;s
Class&nbsp;A Common Stock and Class&nbsp;B Common Stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Company&#148;</FONT></I><FONT size="2">
means Ingles Markets, Incorporated, a corporation incorporated
under the laws of North Carolina, until a successor Person shall
have become such pursuant to the applicable provisions of the
Indenture, and thereafter &#147;Company&#148; shall mean such
successor Person.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Consolidated Fixed Charge Coverage
Ratio&#148;</FONT></I><FONT size="2"> of any Person means, for
any period, the ratio of
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;the sum of Consolidated Net Income
    (Loss), and in each case to the extent deducted in computing
    Consolidated Net Income (Loss) for such period, Consolidated
    Interest Expense, Consolidated Income Tax Expense, Consolidated
    Non-cash Charges and one-third of Consolidated Rental Expense
    for such period, of such Person and its Restricted Subsidiaries
    on a Consolidated basis, all determined in accordance with GAAP,
    less all noncash items increasing Consolidated Net Income for
    such period and less all cash payments during such period
    relating to noncash charges that were added back to Consolidated
    Net Income in determining the Consolidated Fixed Charge Coverage
    Ratio in any prior period to
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;the sum of Consolidated Interest Expense
    for such period, one-third of Consolidated Rental Expense and
    cash and noncash dividends paid on any Redeemable Capital Stock
    or Preferred Stock of such Person and its Restricted
    Subsidiaries during such period,
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">in each case after giving <I>pro forma</I> effect
(as calculated in accordance with Article&nbsp;11 of
Regulation&nbsp;S-X under the Securities Act of 1933 or any
successor provision) to
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;the incurrence of the Indebtedness
    giving rise to the need to make such calculation and (if
    applicable) the application of the net proceeds therefrom,
    including to refinance other Indebtedness, as if such
    Indebtedness was incurred, and the application of such proceeds
    occurred, on the first day of such period;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;the incurrence, repayment or retirement
    of any other Indebtedness by the Company and its Restricted
    Subsidiaries since the first day of such period as if such
    Indebtedness was incurred, repaid or retired at the beginning of
    such period (except that, in making such computation, the amount
    of Indebtedness under any revolving credit facility shall be
    computed based upon the average daily balance of such
    Indebtedness during such period);
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;in the case of Acquired Indebtedness or
    any acquisition occurring at the time of the incurrence of such
    Indebtedness, the related acquisition, assuming such acquisition
    had been consummated on the first day of such period; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;any acquisition or disposition by the
    Company and its Restricted Subsidiaries of any company or any
    business or any assets out of the ordinary course of business,
    whether by merger, stock purchase or sale or asset purchase or
    sale, or any related repayment of Indebtedness, in each case
    since the first day of such period, assuming such acquisition or
    disposition had been consummated on the first day of such period;
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <I><FONT size="2">provided</FONT></I><FONT size="2"> that
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;in making such computation, the
    Consolidated Interest Expense attributable to interest on any
    Indebtedness computed on a pro forma basis and (A)&nbsp;bearing
    a floating interest rate shall be computed as if the rate in
    effect on the date of computation had been the applicable rate
    for the entire period and (B)&nbsp;which was not outstanding
    during the period for which the computation is being
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">63
</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">made but which bears, at the option of such
    Person, a fixed or floating rate of interest, shall be computed
    by applying at the option of such Person either the fixed or
    floating rate and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;in making such computation, the
    Consolidated Interest Expense of such Person attributable to
    interest on any Indebtedness under a revolving credit facility
    computed on a pro forma basis shall be computed based upon the
    average daily balance of such Indebtedness during the applicable
    period.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Consolidated Income Tax
Expense&#148;</FONT></I><FONT size="2"> of any Person means, for
any period, the provision for federal, state, local and foreign
income taxes of such Person and its Consolidated Restricted
Subsidiaries for such period as determined in accordance with
GAAP.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Consolidated Interest
Expense&#148;</FONT></I><FONT size="2"> of any Person means,
without duplication, for any period, the sum of
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;the interest expense of such Person and
    its Restricted Subsidiaries for such period, on a Consolidated
    basis, including, without limitation,
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;amortization of debt discount,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;the net costs associated with Interest
    Rate Agreements, Currency Hedging Agreements and Commodity Price
    Protection Agreements (including amortization of discounts),
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;the interest portion of any deferred
    payment obligation,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;all commissions, discounts and other
    fees and charges owed with respect to letters of credit and
    bankers acceptance financing and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;accrued interest, plus
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;(1)&nbsp;the interest component of the
    Capital Lease Obligations paid, accrued and/or scheduled to be
    paid or accrued by such Person and its Restricted Subsidiaries
    during such period and
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;all capitalized interest of such Person
    and its Restricted Subsidiaries plus
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;the interest expense under any
    Guaranteed Debt of such Person and any Restricted Subsidiary to
    the extent not included under clause&nbsp;(a)(4) above, whether
    or not paid by such Person or its Restricted Subsidiaries.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Consolidated Net Income
(Loss)&#148;</FONT></I><FONT size="2"> of any Person means, for
any period, the Consolidated net income (or loss) of such Person
and its Restricted Subsidiaries for such period on a
Consolidated basis as determined in accordance with GAAP,
adjusted, to the extent included in calculating such net income
(or loss), by excluding, without duplication,
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;all extraordinary gains or losses net of
    taxes (less all fees and expenses relating thereto),
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;the portion of net income (or loss) of
    such Person and its Restricted Subsidiaries on a Consolidated
    basis allocable to minority interests in unconsolidated Persons
    or Unrestricted Subsidiaries to the extent that cash dividends
    or distributions have not actually been received by such Person
    or one of its Consolidated Restricted Subsidiaries,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;net income (or loss) of any Person
    combined with such Person or any of its Restricted Subsidiaries
    on a &#147;pooling of interests&#148; basis attributable to any
    period prior to the date of combination,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;any gain or loss, net of taxes, realized
    upon the termination of any employee pension benefit plan,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;gains or losses, net of taxes (less all
    fees and expenses relating thereto), in respect of dispositions
    of assets other than in the ordinary course of business,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(6)&nbsp;the net income of any Restricted
    Subsidiary to the extent that the declaration of dividends or
    similar distributions by that Restricted Subsidiary of that
    income is not at the time permitted, directly or indirectly, by
    operation of the terms of its charter or any agreement,
    instrument, judgment,
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">64
</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">decree, order, statute, rule or governmental
    regulation applicable to that Restricted Subsidiary or its
    stockholders,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(7)&nbsp;any restoration to net income of any
    contingency reserve, except to the extent provision for such
    reserve was made out of income accrued at any time following the
    date of the Indenture, or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(8)&nbsp;any net gain arising from the
    acquisition of any securities or extinguishment, under GAAP, of
    any Indebtedness of such Person.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Consolidated Non-cash
Charges&#148;</FONT></I><FONT size="2"> of any Person means, for
any period, the aggregate depreciation, amortization and other
non-cash charges of such Person and its Subsidiaries on a
Consolidated basis for such period, as determined in accordance
with GAAP (excluding any non-cash charge which requires an
accrual or reserve for cash charges for any future period).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Consolidated Rental
Expense&#148;</FONT></I><FONT size="2"> of any Person means, for
any period, all payments made or required to be made by the
Company or any of its Restricted Subsidiaries, as lessee or
sublessee under any operating lease of real or personal property
as rental payments and contingent rentals under operating
leases, in each case, as calculated in accordance with GAAP in
the manner set forth in the footnotes to the Company&#146;s
Annual Report on Form&nbsp;10-K for the fiscal year ended
September&nbsp;30, 2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Consolidated Tangible Assets&#148;
</FONT></I><FONT size="2">of any Person means, at any time, for
such Person and its Restricted Subsidiaries on a consolidated
basis, an amount equal to (a)&nbsp;the consolidated assets of
the Person and its Restricted Subsidiaries minus (b)&nbsp;all
Intangible Assets of the Person and its Restricted Subsidiaries
at that time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Consolidated Tangible Net Worth&#148;
</FONT></I><FONT size="2">of any Person means, at any time, for
such Person and its Restricted Subsidiaries on a consolidated
basis, an amount computed equal to (a)&nbsp;the consolidated
stockholders&#146; equity of the Person and its Restricted
Subsidiaries, minus, (b)&nbsp;all Intangible Assets of the
Person and its Restricted Subsidiaries, in each case as of such
time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Consolidation&#148;
</FONT></I><FONT size="2">means, with respect to any Person, the
consolidation of the accounts of such Person and each of its
subsidiaries if and to the extent the accounts of such Person
and each of its Subsidiaries would normally be consolidated with
those of such Person, all in accordance with GAAP. The term
&#147;Consolidated&#148; shall have a similar meaning.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Currency Hedging Agreements&#148;
</FONT></I><FONT size="2">means one or more of the following
agreements which shall be entered into by one or more financial
institutions: foreign exchange contracts, currency swap
agreements or other similar agreements or arrangements designed
to protect against the fluctuations in currency values.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Default&#148;
</FONT></I><FONT size="2">means any event which is, or after
notice or passage of time or both would be, an Event of Default.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Designated Noncash Consideration&#148;
</FONT></I><FONT size="2">means the fair market value of
non-cash consideration received by the Company or any of its
Restricted Subsidiaries in connection with an Asset Sale that is
so designated pursuant to an officer&#146;s certificate, setting
forth the basis of the valuation. The aggregate fair market
value of the Designated Noncash Consideration held by the
Company or any Restricted Subsidiary at any given time, taken
together with the fair market value at the time of receipt of
all other Designated Noncash Consideration received and still
held by the Company or any Restricted Subsidiary at such time,
may not exceed the greater of (x)&nbsp;$20&nbsp;million in
aggregate or (y)&nbsp;2% of the Company&#146;s Consolidated
Tangible Assets, at the time of the receipt of the Designated
Noncash Consideration (with the fair market value being measured
at the time received and without giving effect to subsequent
changes in value).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Disinterested Director&#148;
</FONT></I><FONT size="2">means, with respect to any transaction
or series of related transactions, a member of the board of
directors of the Company who does not have any material direct
or indirect financial interest in or with respect to such
transaction or series of related transactions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Exchange Act&#148;
</FONT></I><FONT size="2">means the Securities Exchange Act of
1934, or any successor statute, and the rules and regulations
promulgated by the Commission thereunder.
</FONT>

<P align="center"><FONT size="2">65
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Fair Market Value&#148;
</FONT></I><FONT size="2">means, with respect to any asset or
property, the sale value that would be obtained in an
arm&#146;s-length free market transaction between an informed
and willing seller under no compulsion to sell and an informed
and willing buyer under no compulsion to buy. Fair Market Value
shall be determined by the board of directors of the Company
acting in good faith and shall be evidenced by a resolution of
the board of directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Generally Accepted Accounting
Principles&#148; </FONT></I><FONT size="2">or
<I>&#147;GAAP&#148; </I>means generally accepted accounting
principles in the United States, consistently applied, which are
in effect on the date of the Indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Guarantee&#148;
</FONT></I><FONT size="2">means the guarantee by any Guarantor
of the Company&#146;s Indenture Obligations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Guaranteed Debt&#148;
</FONT></I><FONT size="2">of any Person means, without
duplication, all Indebtedness of any other Person referred to in
the definition of Indebtedness below guaranteed directly or
indirectly in any manner by such Person, or in effect guaranteed
directly or indirectly by such Person through an agreement
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;to pay or purchase such Indebtedness or
    to advance or supply funds for the payment or purchase of such
    Indebtedness,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;to purchase, sell or lease (as lessee or
    lessor) property, or to purchase or sell services, primarily for
    the purpose of enabling the debtor to make payment of such
    Indebtedness or to assure the holder of such Indebtedness
    against loss,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;to supply funds to, or in any other
    manner invest in, the debtor (including any agreement to pay for
    property or services without requiring that such property be
    received or such services be rendered),
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;to maintain working capital or equity
    capital of the debtor, or otherwise to maintain the net worth,
    solvency or other financial condition of the debtor or to cause
    such debtor to achieve certain levels of financial performance or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;otherwise to assure a creditor against
    loss;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<I><FONT size="2">provided </FONT></I><FONT size="2">that the
term &#147;guarantee&#148; shall not include endorsements for
collection or deposit, in either case in the ordinary course of
business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Guarantor&#148;
</FONT></I><FONT size="2">means any Subsidiary which becomes a
guarantor of the Notes after the date of the Indenture by
executing a guarantee of the Notes pursuant to the
&#147;Limitation on Liens&#148; covenant or the &#147;Limitation
on Issuance of Guarantees of and Pledges for Indebtedness&#148;
covenant until a successor replaces such party pursuant to the
applicable provisions of the Indenture and, thereafter, shall
mean such successor.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Indebtedness&#148;
</FONT></I><FONT size="2">means, with respect to any Person,
without duplication,
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;all indebtedness of such Person for
    borrowed money or for the deferred purchase price of property or
    services, excluding any trade payables and other accrued current
    liabilities arising in the ordinary course of business, but
    including, without limitation, all obligations, contingent or
    otherwise, of such Person in connection with any letters of
    credit issued under letter of credit facilities, acceptance
    facilities or other similar facilities,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;all obligations of such Person evidenced
    by bonds, notes, debentures or other similar instruments,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;all indebtedness created or arising
    under any conditional sale or other title retention agreement
    with respect to property acquired by such Person (even if the
    rights and remedies of the seller or lender under such agreement
    in the event of default are limited to repossession or sale of
    such property), but excluding trade payables arising in the
    ordinary course of business,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;all obligations under Interest Rate
    Agreements, Currency Hedging Agreements or Commodity Price
    Protection Agreements of such Person,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;all Capital Lease Obligations of such
    Person,
    </FONT></TD>
</TR>

</TABLE>

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</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(6)&nbsp;all Indebtedness referred to in
    clauses&nbsp;(1) through (5) above of other Persons and all
    dividends of other Persons, the payment of which is secured by
    (or for which the holder of such Indebtedness has an existing
    right, contingent or otherwise, to be secured by) any Lien, upon
    or with respect to property (including, without limitation,
    accounts and contract rights) owned by such Person, even though
    such Person has not assumed or become liable for the payment of
    such Indebtedness,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(7)&nbsp;all Guaranteed Debt of such Person,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(8)&nbsp;all Redeemable Capital Stock issued by
    such Person valued at the greater of its voluntary or
    involuntary maximum fixed repurchase price plus accrued and
    unpaid dividends,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(9)&nbsp;Preferred Stock of any Restricted
    Subsidiary of the Company or any Guarantor and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(10)&nbsp;any amendment, supplement,
    modification, deferral, renewal, extension, refunding or
    refinancing of any liability of the types referred to in
    clauses&nbsp;(1) through (9) above.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">For purposes hereof, the &#147;maximum fixed
repurchase price&#148; of any Redeemable Capital Stock which
does not have a fixed repurchase price shall be calculated in
accordance with the terms of such Redeemable Capital Stock as if
such Redeemable Capital Stock were purchased on any date on
which Indebtedness shall be required to be determined pursuant
to the Indenture, and if such price is based upon, or measured
by, the Fair Market Value of such Redeemable Capital Stock, such
Fair Market Value to be determined in good faith by the board of
directors of the issuer of such Redeemable Capital Stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Indenture Obligations&#148;
</FONT></I><FONT size="2">means the obligations of the Company
and any other obligor under the Indenture or under the Notes,
including any Guarantor, to pay principal of, premium, if any,
and interest when due and payable, and all other amounts due or
to become due under or in connection with the Indenture, the
Notes and the performance of all other obligations to the
Trustee and the holders under the Indenture and the Notes,
according to the respective terms thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Intangible Assets&#148;
</FONT></I><FONT size="2">means intellectual property, goodwill
and other intangible assets, in each case determined in
accordance with GAAP.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Interest Rate Agreements&#148;
</FONT></I><FONT size="2">means one or more of the following
agreements which shall be entered into by one or more financial
institutions: interest rate protection agreements (including,
without limitation, interest rate swaps, caps, floors, collars
and similar agreements) and/or other types of interest rate
hedging agreements from time to time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Investment&#148;
</FONT></I><FONT size="2">means, with respect to any Person,
directly or indirectly, any advance, loan (including
guarantees), or other extension of credit or capital
contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for
the account or use of others), or any purchase, acquisition or
ownership by such Person of any Capital Stock, bonds, notes,
debentures or other securities issued or owned by any other
Person and all other items that would be classified as
investments on a balance sheet prepared in accordance with GAAP.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Issue Date&#148;
</FONT></I><FONT size="2">means the original issue date of the
Notes under the Indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Lien&#148;
</FONT></I><FONT size="2">means any mortgage or deed of trust,
charge, pledge, lien (statutory or otherwise), privilege,
security interest, assignment, deposit, arrangement, easement,
hypothecation, claim, preference, priority or other encumbrance
upon or with respect to any property of any kind (including any
conditional sale, capital lease or other title retention
agreement, any leases in the nature thereof, and any agreement
to give any security interest), real or personal, movable or
immovable, now owned or hereafter acquired. A Person will be
deemed to own subject to a Lien any property which it has
acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, Capital Lease Obligation
or other title retention agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Maturity&#148;
</FONT></I><FONT size="2">means, when used with respect to the
Notes, the date on which the principal of the Notes becomes due
and payable as therein provided or as provided in the Indenture,
whether at Stated Maturity, the Offer Date or the redemption
date and whether by declaration of acceleration, Offer in
respect of
</FONT>

<P align="center"><FONT size="2">67
</FONT>

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<DIV align="left">
<FONT size="2">Excess Proceeds, Change of Control Offer in
respect of a Change of Control, call for redemption or otherwise.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Net Cash Proceeds&#148;
</FONT></I><FONT size="2">means
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;with respect to any Asset Sale by any
    Person, the proceeds thereof (without duplication in respect of
    all Asset Sales) in the form of cash or Cash Equivalents
    including payments in respect of deferred payment obligations
    when received in the form of, or stock or other assets when
    disposed of for, cash or Equivalents (except to the extent that
    such obligations are financed or sold with recourse to the
    Company or any Restricted Subsidiary) net of
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;brokerage commissions and other
    reasonable fees and expenses (including fees and expenses of
    counsel and investment bankers) related to such Asset Sale,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;provisions for all taxes payable as a
    result of such Asset Sale,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;payments made to retire Indebtedness
    where payment of such Indebtedness is secured by the assets or
    properties the subject of such Asset Sale,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;amounts required to be paid to any
    Person (other than the Company or any Restricted Subsidiary)
    owning a beneficial interest in the assets subject to the Asset
    Sale and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;appropriate amounts to be provided by
    the Company or any Restricted Subsidiary, as the case may be, as
    a reserve, in accordance with GAAP, against any liabilities
    associated with such Asset Sale and retained by the Company or
    any Restricted Subsidiary, as the case may be, after such Asset
    Sale, including, without limitation, pension and other
    post-employment benefit liabilities, liabilities related to
    environmental matters and liabilities under any indemnification
    obligations associated with such Asset Sale, all as reflected in
    an officers&#146; certificate delivered to the Trustee and
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;with respect to any issuance or sale of
    Capital Stock or options, warrants or rights to purchase Capital
    Stock, or debt securities or Capital Stock that have been
    converted into or exchanged for Capital Stock as referred to
    under &#147;&#151;&nbsp;Certain Covenants&nbsp;&#151; Limitation
    on Restricted Payments,&#148; the proceeds of such issuance or
    sale in the form of cash or Cash Equivalents including payments
    in respect of deferred payment obligations when received in the
    form of, or stock or other assets when disposed of for, cash or
    Cash Equivalents (except to the extent that such obligations are
    financed or sold with recourse to the Company or any Restricted
    Subsidiary), net of attorney&#146;s fees, accountant&#146;s fees
    and brokerage, consultation, underwriting and other fees and
    expenses actually incurred in connection with such issuance or
    sale and net of taxes paid or payable as a result thereof.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Non-Recourse Real Estate
Subsidiary&#148; </FONT></I><FONT size="2">means a Restricted
Subsidiary of the Company designated as a Non-Recourse Real
Estate Subsidiary and substantially all of whose assets consist
of real property, buildings, additions and accessions thereto
and related assets; provided that (x)&nbsp;the Company may not
designate a Restricted Subsidiary as a Non-Recourse Real Estate
Subsidiary if a Default shall have occurred and be continuing at
the time of or after giving effect to such designation,
(y)&nbsp;the Company and the Restricted Subsidiary may not be
directly or indirectly obligated to make additional Investments
in the Non-Recourse Real Estate Subsidiary after its initial
financing transaction and (z)&nbsp;neither the Company nor any
Restricted Subsidiary which is not a Non-Recourse Real Estate
Subsidiary is directly or indirectly liable as to any
Indebtedness of such Non-Recourse Real Estate Subsidiary (by
virtue of the Company or any such Restricted Subsidiary being
the primary obligor on, guarantor of, or otherwise liable in any
respect to, such Indebtedness), and which, upon the occurrence
of a default with respect to such Indebtedness of such
Non-Recourse Real Estate Subsidiary, does not result in, or
permit any holder of any Indebtedness of the Company or any
Restricted Subsidiary other than a Non-Recourse Real Estate
Subsidiary to declare, a default on such Indebtedness of the
Company or any Restricted Subsidiary other than a Non-Recourse
Real Estate Subsidiary or cause the payment of Indebtedness of
the Company or any Restricted Subsidiary other than any
Non-Recourse Real Estate Subsidiary to be accelerated or payable
prior to its Stated Maturity; provided further that
notwithstanding the foregoing any Non-Recourse
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">Real Estate Subsidiary may guarantee the Notes.
On the date of the Indenture, Shopping Center Financing, LLC and
Shopping Center Financing II, LLC are Non-Recourse Real Estate
Subsidiaries.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Pari Passu Indebtedness&#148;
</FONT></I><FONT size="2">means (a)&nbsp;any Indebtedness of the
Company that is equal in right of payment to the Notes and
(b)&nbsp;with respect to any Guarantee, Indebtedness which ranks
equal in right of payment to such Guarantee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Permitted Business&#148;
</FONT></I><FONT size="2">means the lines of business conducted
by the Company and its Restricted Subsidiaries on the date
hereof and business reasonably related, complimentary or
ancillary thereto, including reasonably related extensions or
expansions thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Permitted Holders&#148;
</FONT></I><FONT size="2">means (i)&nbsp;Robert&nbsp;P. Ingle,
(ii)&nbsp;the spouse, issue, issues&#146; spouses or
grandchildren or other members of the immediate family of
Robert&nbsp;P. Ingle or such other person; (iii)&nbsp;any trusts
created for the benefit of the Persons described in
clauses&nbsp;(i), (ii) or (iv) or any trust for the benefit of
any such trust; (iv)&nbsp;in the event of the incompetence or
death of any of the Persons described in clauses&nbsp;(i) and
(ii), such Person&#146;s estate, executor, administrator,
committee or other personal representative or beneficiaries, in
each case who at any particular date shall beneficially own or
have the right to acquire, directly or indirectly, Equity
Interests of the Company; or (v)&nbsp;the Ingles Markets,
Incorporated Investment/Profit Sharing Plan and Trust.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Permitted Investment&#148;
</FONT></I><FONT size="2">means
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;Investments in any Restricted Subsidiary
    (other than Non-Recourse Real Estate Subsidiaries) or any Person
    which, as a result of such Investment, (a)&nbsp;becomes a
    Restricted Subsidiary or (b)&nbsp;is merged or consolidated with
    or into, or transfers or conveys substantially all of its assets
    to, or is liquidated into, the Company or any Restricted
    Subsidiary;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;Indebtedness of the Company or a
    Restricted Subsidiary described under clauses&nbsp;(5), (6), (7)
    and (8) of the definition of &#147;Permitted Indebtedness;&#148;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;Investments in any of the Notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(4)&nbsp;Cash Equivalents;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(5)&nbsp;Investments in Non-Recourse Real Estate
    Subsidiaries at any one time outstanding in an aggregate amount
    not to exceed $20&nbsp;million, plus the Fair Market Value of
    the assets in Non-Recourse Real Estate Subsidiaries on the date
    of the Indenture plus any Real Estate Subsidiary Financing
    Proceeds which are either used to permanently repay Senior
    Indebtedness or invested in properties or assets of the Company
    or any Restricted Subsidiary used in their existing business
    within 180&nbsp;days after receipt of such cash.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(6)&nbsp;Investments acquired by the Company or
    any Restricted Subsidiary in connection with an Asset Sale
    permitted under &#147;&#151;&nbsp;Certain Covenants&nbsp;&#151;
    Limitation on Sale of Assets&#148; to the extent such
    Investments are non-cash proceeds as permitted under such
    covenant; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(7)&nbsp;Investments in existence on the date of
    the Indenture; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(8)&nbsp;In addition to Investments pursuant to
    clauses&nbsp;(1) through (7) above, Investments in the aggregate
    not to exceed the greater of (a)&nbsp;$25.0&nbsp;million or
    (b)&nbsp;2.5% of Consolidated Tangible Assets, at any one time
    outstanding.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">In connection with any assets or property
contributed or transferred to any Person as an Investment, such
property and assets shall be equal to the Fair Market Value (as
determined by the Company&#146;s Board of Directors) at the time
of Investment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Person&#148;
</FONT></I><FONT size="2">means any individual, corporation,
limited liability company, partnership, joint venture,
association, joint-stock company, trust, unincorporated
organization or government or any agency or political
subdivision thereof.
</FONT>

<P align="center"><FONT size="2">69
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Preferred Stock&#148;
</FONT></I><FONT size="2">means, with respect to any Person, any
Capital Stock of any class or classes (however designated) which
is preferred as to the payment of dividends or distributions, or
as to the distribution of assets upon any voluntary or
involuntary liquidation or dissolution of such Person, over the
Capital Stock of any other class in such Person.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Public Equity Offering&#148;
</FONT></I><FONT size="2">means an underwritten public offering
of common stock (other than Redeemable Capital Stock) of the
Company with gross proceeds to the Company of at least
$25&nbsp;million pursuant to a registration statement that has
been declared effective by the Commission pursuant to the
Securities Act (other than a registration statement on
Form&nbsp;S-4 (or any successor form covering substantially the
same transactions), Form&nbsp;S-8 (or any successor form
covering substantially the same transactions) or otherwise
relating to equity securities issuable under any employee
benefit plan of the Company).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Purchase Money Obligation&#148;
</FONT></I><FONT size="2">means any Indebtedness secured by a
Lien on assets related to the business of the Company or any
Restricted Subsidiary and any additions and accessions thereto,
which are purchased by the Company at any time after the Notes
are issued; <I>provided </I>that
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;the security agreement or conditional
    sales or other title retention contract pursuant to which the
    Lien on such assets is created (collectively a &#147;Purchase
    Money Security Agreement&#148;) shall be entered into
    (a)&nbsp;within 180&nbsp;days after the purchase or substantial
    completion of the construction of such assets or (b)&nbsp;at any
    time with respect to refinancings of Purchase Money Obligations,
    and shall at all times be confined solely to the assets so
    purchased or acquired, any additions and accessions thereto and
    any proceeds therefrom, and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;(A)&nbsp;the aggregate outstanding
    principal amount of Indebtedness secured thereby (determined on
    a per asset basis in the case of any additions and accessions)
    shall not at the time such Purchase Money Security Agreement is
    entered into exceed 100% of the purchase price to the Company of
    the assets subject thereto or (B)&nbsp;the Indebtedness secured
    thereby shall be with recourse solely to the assets so purchased
    or acquired, any additions and accessions thereto and any
    proceeds therefrom.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Qualified Capital Stock&#148;
</FONT></I><FONT size="2">of any Person means any and all
Capital Stock of such Person other than Redeemable Capital Stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Real Estate Subsidiary Financing
Proceeds&#148; </FONT></I><FONT size="2">means any cash
permanently received by the Company or any Restricted Subsidiary
(other than a Non-Recourse Real Estate Subsidiary) in connection
with an Investment in a Non-Recourse Real Estate Subsidiary and
the transactions contemplated thereby.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Redeemable Capital Stock&#148;
</FONT></I><FONT size="2">means any Capital Stock that, either
by its terms or by the terms of any security into which it is
convertible or exchangeable or otherwise, is or upon the
happening of an event or passage of time would be, required to
be redeemed prior to the final Stated Maturity of the principal
of the Notes or is redeemable at the option of the holder
thereof at any time prior to such final Stated Maturity (other
than upon a change of control of or sale of assets by the
Company in circumstances where the holders of the Notes would
have similar rights), or is convertible into or exchangeable for
debt securities at any time prior to such final Stated Maturity
at the option of the holder thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Restricted Subsidiary&#148;
</FONT></I><FONT size="2">means any Subsidiary of the Company
that has not been designated by the board of directors of the
Company by a board resolution delivered to the Trustee as an
Unrestricted Subsidiary pursuant to and in compliance with the
covenant described under &#147;Certain Covenants &#151;
<I>Limitation on Unrestricted Subsidiaries.</I>&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Securities Act&#148;
</FONT></I><FONT size="2">means the Securities Act of 1933, or
any successor statute, and the rules and regulations promulgated
by the Commission thereunder.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Stated Maturity&#148;
</FONT></I><FONT size="2">means, when used with respect to any
Indebtedness or any installment of interest thereon, the dates
specified in such Indebtedness as the fixed date on which the
principal of such Indebtedness or such installment of interest,
as the case may be, is due and payable.
</FONT>

<P align="center"><FONT size="2">70
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Subordinated Indebtedness&#148;
</FONT></I><FONT size="2">means Indebtedness of the Company or a
Guarantor subordinated in right of payment to the Notes or a
Guarantee, as the case may be.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Subsidiary&#148;
</FONT></I><FONT size="2">of a Person means
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;any corporation more than 50% of the
    outstanding voting power of the Voting Stock of which is owned
    or controlled, directly or indirectly, by such Person or by one
    or more other Subsidiaries of such Person, or by such Person and
    one or more other Subsidiaries thereof, or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;any limited partnership of which such
    Person or any Subsidiary of such Person is a general partner, or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;any other Person in which such Person,
    or one or more other Subsidiaries of such Person, or such Person
    and one or more other Subsidiaries, directly or indirectly, has
    more than 50% of the outstanding partnership or similar
    interests or has the power, by contract or otherwise, to direct
    or cause the direction of the policies, management and affairs
    thereof.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Trust Indenture Act&#148;
</FONT></I><FONT size="2">means the Trust Indenture Act of 1939,
or any successor statute.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Unrestricted Subsidiary&#148;
</FONT></I><FONT size="2">means any Subsidiary of the Company
(other than a Guarantor) designated as such pursuant to and in
compliance with the covenant described under &#147;Certain
Covenants&nbsp;&#151; <I>Limitation on Unrestricted
Subsidiaries.</I>&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Unrestricted Subsidiary
Indebtedness&#148; </FONT></I><FONT size="2">of any Unrestricted
Subsidiary means Indebtedness of such Unrestricted Subsidiary
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;as to which neither the Company nor any
    Restricted Subsidiary is directly or indirectly liable (by
    virtue of the Company or any such Restricted Subsidiary being
    the primary obligor on, guarantor of, or otherwise liable in any
    respect to, such Indebtedness) and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;which, upon the occurrence of a default
    with respect thereto, does not result in, or permit any holder
    of any Indebtedness of the Company or any Subsidiary to declare,
    a default on such Indebtedness of the Company or any Subsidiary
    or cause the payment thereof to be accelerated or payable prior
    to its Stated Maturity; provided that notwithstanding the
    foregoing any Unrestricted Subsidiary may guarantee the Notes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Voting Stock&#148;
</FONT></I><FONT size="2">of a Person means Capital Stock of
such Person of the class or classes pursuant to which the
holders thereof have the general voting power in the aggregate
under ordinary circumstances to elect at least a majority of the
board of directors, managers or trustees of such Person
(irrespective of whether or not at the time Capital Stock of any
other class or classes shall have or might have voting power by
reason of the happening of any contingency).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">&#147;Wholly Owned Restricted Subsidiary&#148;
</FONT></I><FONT size="2">means a Restricted Subsidiary all the
Capital Stock of which is owned by the Company or another Wholly
Owned Restricted Subsidiary (other than directors&#146;
qualifying shares).
</FONT>

<P align="left">
<B><FONT size="2">Book-Entry Delivery and Form</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except as set forth below, the Notes will be
issued only in fully registered form, without interest coupons,
in denominations of $1,000 and integral multiples thereof. Notes
will not be issued in bearer form.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Notes initially will be issued in registered,
global form without interest coupons (the &#147;Global
Notes&#148;) filed in book-entry form. The Notes will be
deposited upon issuance with the trustee, as custodian for The
Depository Trust Company (&#147;DTC&#148;), in New York, New
York, and registered in the name of DTC or its nominee, the DTC,
and the DTC or its nominee will initially be the sole registered
holder of the Notes for all purposes under the indenture. Unless
it is exchanged in whole or in part for debt securities in
definitive form as described below, a global security may not be
transferred. However,
</FONT>

<P align="center"><FONT size="2">71
</FONT>

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<DIV align="left">
<FONT size="2">transfers of the whole security between the DTC
and its nominee or their respective successors are permitted.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon the issuance of a global security, the DTC
or its nominee will credit on its internal system the principal
amount at maturity of the individual beneficial interest
represented by the global security acquired by the persons in
exchange for the original notes. Ownership of beneficial
interests in a global security will be limited to persons that
have accounts with the DTC or persons that hold interests
through participants. Ownership of beneficial interests will be
shown on, and the transfer of such ownership will be effected
only through, records maintained by the DTC or its nominee with
respect to interests of participants and the records of
participants with respect to interests of persons other than
participants. Principal and interest payments on global
securities registered in the name of the DTC&#146;s nominee will
be made in immediate available funds to the DTC&#146;s nominee
as the registered owner of the global securities. The Company
and the trustee will treat the DTC&#146;s nominee as the owner
of the global securities for all other purposes as well.
Accordingly, the Company, the trustee, any paying agent and the
initial purchasers will have no direct responsibility or
liability for any aspect of the records relating to payments
made on account of beneficial interests in the global securities
or for maintaining, supervising or reviewing any records
relating to these beneficial interests. It is the DTC&#146;s
current practice, upon receipt of any payment of principal or
interest, to credit direct participants&#146; accounts on the
payment date according to their respective holdings of
beneficial interests in the global securities. These payments
will be the responsibility of the direct and indirect
participants and not of the DTC, the Company, the trustee or the
initial purchasers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">So long as the DTC or its nominee is the
registered owner or holder of the global security, the DTC or
its nominee, as the case may be, will be considered the sole
owner or holder of the Notes represented by the global security
for the purposes of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;receiving payment on the Notes;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;receiving notices; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;for all other purposes under the
    indenture and the Notes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Beneficial interests on the Notes will be
evidenced only by, and transfers of the Notes will be effected
only through, records maintained by the DTC and its participants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except as described above, owners of beneficial
interests in a global security will not be entitled to receive
physical delivery of certificated notes in definitive form and
will not be considered the holders of the global security for
any purposes under the indenture. Accordingly, each person
owning a beneficial interest in a global security must rely on
the procedures of the DTC. And, if that person is not a
participant, the person must rely on the procedures of the
participant through which that person owns its interest, to
exercise any rights of a holder under the indenture. Under
existing industry practices, if the Company requests any action
of holders or an owner of a beneficial interest in a global
security desires to take any action under the indenture, the DTC
would authorize the participants holding the relevant beneficial
interest to take that action. The participants then would
authorize beneficial owners owning through the participants to
take the action or would otherwise act upon the instructions of
beneficial owners owning through them.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The DTC has advised the Company that it will take
any action permitted to be taken by a holder of Notes only at
the direction of one or more participants to whose account the
DTC interests in the global security are credited. Further, the
DTC will take action only as to the portion of the aggregate
principal amount at maturity of the Notes as to which the
participant or participants has or have given the direction.
Although the DTC has agreed to the procedures described above in
order to facilitate transfers of interests in global securities
among participants of the DTC, it is under no obligation to
perform these procedures, and the procedures may be discontinued
at any time. None of the Company, the trustee, any agent of the
issuers or the initial purchasers will have any responsibility
for the performance by the DTC or its participants or indirect
participants of their respective obligations under the rules and
procedures governing their operations.
</FONT>

<P align="center"><FONT size="2">72
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Exchange of Book-Entry Notes for Certificated
Notes.</FONT></I><FONT size="2"> A beneficial interest in the
Global Note may not be exchanged for a Note in certificated form
unless
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;DTC (a)&nbsp;notifies the Company that
    it is unwilling or unable to continue as Depositary for the
    Global Note or (b)&nbsp;has ceased to be a clearing agency
    registered under the Exchange Act, and in either case the
    Company thereupon fails to appoint a successor Depositary within
    90&nbsp;days,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;the Company, at its option, notifies the
    Trustee in writing that it elects to cause the issuance of the
    Notes in certificated form or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(3)&nbsp;there shall have occurred and be
    continuing an Event of Default or any event which after notice
    or lapse of time or both would be an Event of Default with
    respect to the Notes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In all cases, certificated Notes delivered in
exchange for the Global Note or beneficial interests therein
will be registered in the names, and issued in any approved
denominations, requested by or on behalf of the Depositary (in
accordance with its customary procedures). Any certificated Note
issued in exchange for an interest in the Global Note will bear
the legend restricting transfers that is borne by the Global
Note. Any such exchange will be effected through the DTC
Deposit/Withdraw at Custodian (&#147;DWAC&#148;) system and an
appropriate adjustment will be made in the records of the
Security Registrar to reflect a decrease in the principal amount
of the Global Note.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Certain Book-Entry Procedures for the Global
Note.</FONT></I><FONT size="2"> The descriptions of the
operations and procedures of DTC that follow are provided solely
as a matter of convenience. These operations and procedures are
solely within the control of the respective settlement systems
and are subject to change by them from time to time. The Company
takes no responsibility for these operations and procedures and
urges investors to contact the system or their participants
directly to discuss these matters.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DTC has advised the Company that it is:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a limited purpose trust company organized under
    the laws of the State of New York,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a &#147;banking organization&#148; within the
    meaning of the New York Banking Law,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a member of the Federal Reserve System,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a &#147;clearing corporation&#148; within the
    meaning of the Uniform Commercial Code and a &#147;Clearing
    Agency&#148; registered pursuant to the provisions of
    Section&nbsp;17A of the Exchange Act.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DTC was created to hold securities for its
participants (&#147;participants&#148;) and facilitate the
clearance and settlement of securities transactions between
participants through electronic book-entry changes in accounts
of its participants, thereby eliminating the need for physical
transfer and delivery of certificates. Participants include
securities brokers and dealers, banks, trust companies and
clearing corporations and may include certain other
organizations. Indirect access to the DTC system is available to
other entities such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly
(&#147;indirect participants&#148;).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DTC has advised the Company that its current
practice, upon the issuance of the Global Notes, is to credit,
on its internal system, the respective principal amount of the
individual beneficial interests represented by such Global Note
to the accounts with DTC of the participants through which such
interests are to be held. Ownership of beneficial interest in
the Global Note will be shown on, and the transfer of that
ownership will be effected only through, records maintained by
DTC or its nominees (with respect to interest of participants)
and the records of participants and indirect participants (with
respect to interests of persons other than participants).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As long as DTC, or its nominee, is the registered
Holder of the Global Note, DTC or such nominee, as the case may
be, will be considered the sole owner and Holder of the Notes
represented by such Global Note for all purposes under the
Indenture and the Notes. Except in the limited circumstances
described above under &#147;&#151;&nbsp;Exchanges of Book-Entry
Notes for Certificated Notes,&#148; owners of beneficial
interests in Global Note will not be entitled to have any
portions of such Global Note registered in their names, and
</FONT>

<P align="center"><FONT size="2">73
</FONT>

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<DIV align="left">
<FONT size="2">will not receive or be entitled to receive
physical delivery of Notes in definitive form and will not be
considered the owners or Holders of the Global Note (or any
Notes represented thereby) under the Indenture or the Notes.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Investors may hold their interests in the Global
Note directly through DTC, if they are participants in such
system, or indirectly through organizations which are
participants in such system. All interests in the Global Note
will be subject to the procedures and requirements of DTC.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The laws of some states require that certain
persons take physical delivery in definitive form of securities
that they own. Consequently, the ability to transfer beneficial
interests in the Global Note to such persons may be limited to
that extent. Because DTC can act only on behalf of its
participants, which in turn act on behalf of indirect
participants and certain banks, the ability of a person having
beneficial interests in the Global Note to pledge such interest
to persons or entities that do not participate in the DTC
system, or otherwise take actions in respect of such interests,
may be affected by the lack of a physical certificate evidencing
such interests.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Payments of the principal, of, premium, if any,
and interest on the Global Note will be made to DTC or its
nominee as the registered owner thereof. Neither the Company,
the Trustee nor any of their respective agents will have any
responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership
interest in the Global Note or for maintaining, supervising or
reviewing any records relating to such beneficial ownership
interests.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company expects that DTC or its nominee, upon
receipt of any payment of principal of, premium, if any, or
interest in respect of a Global Note representing any Notes held
by it or its nominee, will credit participants&#146; accounts
with payments in amounts proportionate to their respective
beneficial interests in the principal amount of the Global Note
for such Notes as shown on the records of DTC or its nominee.
The Company also expects that payments by participants to owners
of beneficial interests in such Global Note held through such
participants will be governed by standing instructions and
customary practices, as is now the case with securities held for
the accounts of customers registered in &#147;street name.&#148;
Such payments will be the responsibility of such participants.
None of the Company or the Trustee will be liable for any delay
by DTC or any of its participants in identifying the beneficial
owners of the Notes, and the Company and the Trustee may
conclusively rely on and will be protected in relying on
instructions from DTC or its nominee as the registered owner of
the Notes for all purposes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Interests in the Global Note will trade in
DTC&#146;s Same-Day Funds Settlement System and secondary market
trading activity in such interests will therefore settle in
immediately available funds, subject in all cases to the rules
and procedures of DTC and its participants. Transfers between
participants in DTC will be effected in accordance with
DTC&#146;s procedures, and will be settled in same-day funds.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DTC has advised the Company that it will take any
action permitted to be taken by a holder of Notes only at the
direction of one or more participants to whose accounts with DTC
interests in the Global Note are credited and only in respect of
such portion of the aggregate principal amount of the Notes as
to which such participant or participants has or have given such
direction. However, if there is an Event of Default under the
Notes, DTC reserves the right to exchange the Global Note for
legended Notes in certificated form, and to distribute such
Notes to its participants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although DTC has agreed to the foregoing
procedures in order to facilitate transfer of beneficial
ownership interests in the Global Notes among participants of
DTC, they are under no obligation to perform or continue to
perform such procedures, and such procedures may be discontinued
at any time. None of the Company, the Trustee nor any of their
respective agents will have any responsibility for the
performance by DTC or its participants or indirect participants
of their respective obligations under the rules and procedures
governing their operations, including maintaining, supervising
or reviewing the records relating to or payments made on account
of, beneficial ownership interests in the Global Note.
</FONT>

<P align="center"><FONT size="2">74
</FONT>

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<!-- link1 "MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS" -->
<DIV align="left"><A NAME="007"></A></DIV>

<P align="center">
<B><FONT size="2">MATERIAL UNITED STATES FEDERAL
INCOME</FONT></B>

<DIV align="center">
<B><FONT size="2">TAX CONSIDERATIONS</FONT></B>
</DIV>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a general discussion of the
material U.S. federal income tax consequences and, in the case
of a Non-United States Holder (as defined below), certain U.S.
federal estate tax consequences, of the exchange of original
notes issued on May&nbsp;29, 2003 for new notes offered hereby
and the purchase, ownership and disposition of the new notes.
Except where noted, the summary deals only with original notes
or new notes held as capital assets within the meaning of
section 1221 of the Internal Revenue Code of 1986, as amended
(the &#147;Code&#148;), and does not deal with special
situations, such as those of broker-dealers, tax-exempt
organizations, individual retirement accounts and other tax
deferred accounts, financial institutions, insurance companies,
persons holding original notes or new notes as part of a hedging
or conversion transaction, a straddle or a constructive sale,
persons who have ceased to be United States citizens or to be
taxed as resident aliens and United States Holders (as defined
below) whose functional currency is not the U.S. dollar.
Furthermore, the discussion below is based upon the provisions
of the Code, and regulations, rulings and judicial decisions
thereunder as of the date hereof, and such authorities may be
repealed, revoked or modified so as to result in U.S. federal
income tax consequences different from those discussed below. In
addition, except as otherwise indicated, the following does not
consider the effect of any applicable foreign, state, local or
other tax laws or estate or gift tax considerations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As used herein, a &#147;United States
Holder&#148; is a beneficial owner of an original note or a new
note that is: (i)&nbsp;a citizen or individual resident of the
United States; (ii)&nbsp;a corporation, or entity taxable as a
corporation, that was created or organized in or under the laws
of the United States or any political subdivision thereof;
(iii)&nbsp;an estate the income of which is subject to U.S.
federal income tax regardless of its source; or (iv)&nbsp;a
trust if: (a)&nbsp;a court within the United States is able to
exercise primary supervision over its administration and one or
more U.S. persons have the authority to control all substantial
decisions of the trust; or (b)&nbsp;the trust was in existence
on August&nbsp;20, 1996, and on August&nbsp;19, 1996 was treated
as a domestic trust and has elected to be treated as a U.S.
person.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A &#147;Non-United States Holder&#148; is a
beneficial owner of an original note or a new that is not a
United States Holder.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For U.S. federal income tax purposes, income
earned through a foreign or domestic partnership or other
flow-through entity is attributed to its owners. Accordingly, if
a partnership or other flow through entity holds notes, the U.S.
federal income tax treatment of a partner in the partnership or
owner of an equity interest in the flow-through entity will
generally depend on the status of the partner or owner and the
activities of the partnership or flow-through entity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Special rules may apply to certain Non-United
States Holders, such as &#147;controlled foreign
corporations,&#148; &#147;passive foreign investment
companies&#148; and &#147;foreign personal holding
companies,&#148; that are subject to special treatment under the
Code. Such entities should consult their own tax advisors to
determine the U.S. federal, state, local and other tax
consequences that may be relevant to them or to their
shareholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Persons considering the exchange of original
notes for new notes or the purchase of new notes should consult
their own tax advisors concerning the U.S. federal income tax
consequences of the exchange of original notes for new notes or
the purchase, ownership and disposition of the new notes in
light of their particular situations as well as any consequences
arising under the laws of any other taxing
jurisdiction.</FONT></B>

<P align="left">
<B><FONT size="2">United States Holders</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exchange of
Notes</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A United States Holder&#146;s receipt of a new
note in exchange for an original note pursuant to the exchange
offer will not result in a taxable exchange to us or the United
States Holder. Accordingly: (i)&nbsp;no
</FONT>

<P align="center"><FONT size="2">75
</FONT>

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<DIV align="left">
<FONT size="2">gain or loss will be recognized by the United
States Holder upon receipt of the new note; (ii)&nbsp;the
holding period of the new note will include the holding period
of the original note exchanged therefor; and (iii)&nbsp;the
adjusted tax basis of the new note will be the same as the
adjusted tax basis of the original note exchanged therefor at
the time of the exchange.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Stated Interest</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A United States Holder will be required to
include in gross income the stated interest on a new note at the
time such interest accrues or is received, in accordance with
the United States Holder&#146;s method of accounting for U.S.
federal income tax purposes.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Market Discount</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a United States Holder purchases a new note
(or purchased the original note for which the new note was
exchanged, as the case may be) at a price that is less than its
principal amount, the excess of the principal amount over the
United States Holder&#146;s purchase price will be treated as
&#147;market discount.&#148; However, the market discount will
be considered to be zero if it is less than &nbsp;1/4 of 1% of
the principal amount multiplied by the number of complete years
to maturity from the date the United States Holder purchased the
new note or original note, as the case may be.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the market discount rules of the Code, a
United States Holder generally will be required to treat any
principal payment on, or any gain realized on the sale,
exchange, retirement or other disposition of, a new note (or the
original note for which the new note was exchanged, as the case
may be) as ordinary income (generally treated as interest
income) to the extent of the market discount which accrued but
was not previously included in income. In addition, the United
States Holder may be required to defer, until the maturity of
the new note or its earlier disposition in a taxable
transaction, the deduction of all or a portion of the interest
expense on any indebtedness incurred or continued to purchase or
carry the new note (or the original note for which the new note
was exchanged, as the case may be). In general, market discount
will be considered to accrue ratably during the period from the
date of the purchase of the new note (or original note for which
the new note was exchanged, as the case may be) to the maturity
date of the new note, unless the United States Holder makes an
irrevocable election (on an instrument-by-instrument basis) to
accrue market discount under a constant yield method. A United
States Holder of a new note may elect to include market discount
in income currently as it accrues (under either a ratable or
constant yield method), in which case the rules described above
regarding the treatment as ordinary income of gain upon the
disposition of the new note and upon the receipt of certain
payments and the deferral of interest deductions will not apply.
The election to include market discount in income currently,
once made, applies to all market discount obligations acquired
on or after the first day of the first taxable year to which the
election applies, and may not be revoked without the consent of
the Internal Revenue Service. United States Holders should
consult their own tax advisors before making this election.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Amortizable Bond Premium</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A United States Holder that purchases a note (or
purchased the original note for which the new note was
exchanged, as the case may be) for an amount in excess of its
stated principal amount will be considered to have purchased the
new note (or original note) with &#147;amortizable bond
premium&#148; in an amount equal to such excess. A United States
Holder may elect to amortize the premium over the remaining term
of the new note under a constant yield method. The amount
amortized in any year will be treated as a reduction to the
United States Holder&#146;s interest income from the new note
and will reduce the United States Holder&#146;s tax basis in the
new note. However, because of our rights to optionally redeem
the notes during the period beginning on December&nbsp;1, 2006
and ending on November&nbsp;30, 2009 (see &#147;Description of
the Notes&nbsp;&#151; Optional Redemption&#148;), special rules
will apply that will result in the deferral of amortization of
all or some of the premium based on the assumption that we will
exercise our redemption rights so as to maximize the yield to
the holders of notes. If such optional redemption rights expire
unexercised, bond premium may be recalculated. United States
Holders that elect to amortize bond premium should consult with
their own tax advisors concerning the manner in which the bond
premium
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">may be amortized. Bond premium on a new note held
by a United States Holder that does not make such an election
will decrease the gain or increase the loss otherwise recognized
upon disposition of the new note.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The election to amortize premium on a constant
yield method, once made, applies to all debt obligations held or
subsequently acquired by the electing United States Holder on or
after the first day of the taxable year to which the election
applies and may not be revoked without the consent of the
Internal Revenue Service. United States Holders should consult
their own tax advisors before making this election.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Constant Yield Election</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As an alternative to the above-described rules
for including interest payments and market discount in income
and amortizing bond premium, a United States Holder may elect to
include in gross income all interest that accrues on a new note,
including stated interest, market discount and adjustments for
bond premium, on the constant yield method. If a United States
Holder makes such an election, it will be deemed to have made an
election to amortize bond premium, or to include market discount
under the constant yield method, as the case may be. Either of
these deemed elections will apply to all debt instruments held
or subsequently acquired by the United States Holder.
Particularly for United States Holders who are on the cash
method of accounting, a constant yield election may have the
effect of causing the United States Holder to include interest
in income earlier than would be the case if no such election
were made, and the election may not be revoked without the
consent of the Internal Revenue Service. United States Holders
should consult their own tax advisors before making this
election.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Disposition of the Notes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except as discussed above under the heading
&#147;&#151;&nbsp;Exchange of Notes&#148;, a United States
Holder generally will recognize capital gain or loss on the
sale, exchange, redemption, retirement or other disposition of a
new note in an amount equal to the difference between the amount
of cash plus the net fair market value of any property received,
other than any such amount attributable to accrued interest
(which will be taxable as such if not previously included in
income), and the United States Holder&#146;s adjusted tax basis
in the new note (or, in the case of a new note acquired in
exchange for an original note, the tax basis of such original
note, as discussed above under the caption
&#147;&#151;&nbsp;Exchange of Notes&#148;). In the absence of a
constant yield election, a United States Holder&#146;s adjusted
tax basis in a new note will generally be its cost for the new
note increased by the amount of any market discount previously
included in the United States Holder&#146;s gross income and
decreased, if applicable, by any amortized bond premium.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any gain recognized by a non-corporate United
States Holder on the sale, exchange, redemption, retirement or
other disposition of a new note that such United States Holder
has held for more than one year (taking into account, for this
purpose, in the case of a new note received in exchange for an
original note in the exchange offer, the period of time that the
original note was held), generally will be subject to a maximum
tax rate of 15%, which maximum tax rate will increase under
current law to 20% for dispositions occurring during taxable
years beginning on or after January&nbsp;1, 2009. The
deductibility of capital losses may be subject to certain
limitations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Information Reporting and Backup
    Withholding</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In general, information reporting requirements
will apply to the payment of interest and proceeds received from
the sale, exchange, redemption, retirement or other disposition
of the new notes. A United States Holder will be subject to
backup withholding at the applicable statutory rates on these
payments unless the United States Holder (i)&nbsp;is a
corporation or comes within certain other exempt categories, and
when required demonstrates such fact or (ii)&nbsp;provides a
taxpayer identification number, complies with certain
certification requirements and otherwise complies with the
backup withholding rules. United States persons required to
establish their exempt status generally must provide
certification on Internal Revenue Service Form&nbsp;W-9.
Pursuant to recently enacted legislation, the backup withholding
rate is 28%, which rate will increase under current law to 31%
for taxable years beginning on or after January&nbsp;1, 2011.
</FONT>

<P align="center"><FONT size="2">77
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any amounts withheld under the backup withholding
rules from a payment to a holder of the new notes will be
allowed as a refund or a credit against such holder&#146;s U.S.
federal income tax liability, provided that the required
information is furnished to the Internal Revenue Service.
</FONT>

<P align="left">
<B><FONT size="2">Non-United States Holders</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">U.S. Federal Withholding Tax</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The payment to a Non-United States Holder of
interest on a new note generally will not be subject to U.S.
federal withholding tax pursuant to the &#147;portfolio interest
exception,&#148; provided that (1)&nbsp;the Non-United States
Holder does not directly, indirectly or constructively own 10%
or more of the total combined voting power of all of our classes
of stock within the meaning of the Code, (2)&nbsp;the Non-United
States Holder is not a controlled foreign corporation that is
related to us through sufficient stock ownership within the
meaning of the Code, (3)&nbsp;the Non-United States Holder is
not a bank whose receipt of interest on a new note is described
in section&nbsp;881(c)(3)(A) of the Code, (4)&nbsp;the interest
is not effectively connected with the conduct by the Non-United
States Holder of a trade or business in the United States, and
(5) either (A)&nbsp;the beneficial owner of the new note
certifies to us or our paying agent, under penalties of perjury,
that it is not a United States Holder and provides its name and
address on an Internal Revenue Service Form&nbsp;W-8BEN (or a
suitable substitute form) or (B)&nbsp;a securities clearing
organization, bank or other financial institution that holds the
new notes on behalf of such Non-United States Holder in the
ordinary course of its trade or business certifies to us or our
paying agent, under penalties of perjury, that such an Internal
Revenue Service Form&nbsp;W-8BEN or W-8IMY (or suitable
substitute form) has been received from the beneficial owner by
it or by a financial institution between it and the beneficial
owner and furnishes the payor with a copy thereof. Alternative
methods may be applicable for satisfying the certification
requirement described in (5)&nbsp;above. These methods will
generally require, in the case of new notes held by a foreign
partnership, that the certificate described in (5)&nbsp;above be
provided by the partners in addition to the foreign partnership,
and that the partnership provide certain additional information.
A look through rule would apply in the case of tiered
partnerships.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a Non-United States Holder cannot satisfy the
requirements of the portfolio interest exception described
above, payments of interest made to such Non-United States
Holder will be subject to a 30% withholding tax, unless the
beneficial owner of the new note provides us or our paying agent
with a properly executed (1)&nbsp;Internal Revenue Service
Form&nbsp;W-8BEN (or successor form) claiming an exemption from
or reduction in the rate of withholding under the benefit of an
applicable income tax treaty or (2)&nbsp;Internal Revenue
Service Form W-8ECI (or successor form) stating that interest
paid on the new note is not subject to withholding tax because
it is effectively connected with the beneficial owner&#146;s
conduct of a trade or business in the United States. In
addition, the Non-United States Holder may under certain
circumstances be required to obtain a U.S. taxpayer
identification number and make certain certifications to us.
Prospective investors should consult their tax advisors
regarding the effect, if any, of the withholding regulations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">U.S. Federal Income Tax</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except for the possible application of U.S.
federal withholding tax discussed above, or backup withholding
tax discussed below, a Non-United States Holder generally will
not be subject to U.S. federal income tax on payments of
interest and principal on the new notes, or on any gain realized
upon the sale, exchange, redemption, retirement or other
disposition of a new note, provided (1)&nbsp;such gain is not
effectively connected with the conduct by such holder of a trade
or business in the United States (and, if required by an
applicable income tax treaty as a condition for subjecting the
Non-United States Holder to U.S. taxation on a net income basis,
the gain is not attributable to a permanent establishment
maintained by the Non-United States Holder in the United States)
and (2)&nbsp;in the case of gains derived by an individual, such
individual is not present in the United States for 183&nbsp;days
or more in the taxable year of disposition and certain other
conditions are met.
</FONT>

<P align="center"><FONT size="2">78
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a Non-United States Holder is engaged in a
trade or business in the United States and interest on the new
note is effectively connected with the conduct of such trade or
business, such Non-United States Holder will be subject to U.S.
federal income tax on the interest, in the same manner as if it
were a United States Holder, except to the extent that an
applicable income tax treaty otherwise provides. In addition, if
such Non-United States Holder is a foreign corporation, it may
be subject to a branch profits tax equal to 30% of its
effectively connected earnings and profits (which may include
both any interest on a new note and any gain on a disposition of
a new note), subject to adjustment, for that taxable year unless
it qualifies for a lower rate under an applicable income tax
treaty.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">U.S. Federal Estate Tax</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subject to any applicable estate tax treaty
provisions, if you are an individual and are not a citizen or
resident of the United States (as specially defined for U.S.
federal estate tax purposes) at the time of your death, your new
notes will generally not be subject to the U.S. federal estate
tax, unless, at the time of your death, (i)&nbsp;you own,
directly, indirectly or constructively, 10% or more of the total
combined voting power of all of our classes of stock or
(ii)&nbsp;payments with respect to your new notes are
effectively connected with your conduct of a trade or business
in the United States.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Information Reporting and Backup
    Withholding</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We must report annually to the Internal Revenue
Service and to each Non-United States Holder any interest that
is subject to withholding, or that is exempt from U.S.
withholding tax pursuant to a tax treaty, or interest that is
exempt from U.S. withholding tax under the portfolio interest
exception. Copies of these information returns may also be made
available under the provisions of a specific tax treaty or
agreement with the tax authorities of the country in which the
Non-United States Holder resides.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Non-United States Holders may be subject to
backup withholding and additional information reporting
requirements. However, backup withholding and additional
information reporting requirements do not generally apply to
payments of portfolio interest made by us or a paying agent to
Non-United States Holders if the certification described above
under &#147;U.S. Federal Withholding Tax&#148; is received. If
the foreign office of a foreign &#147;broker,&#148; as defined
in the applicable Treasury regulations, pays the proceeds of a
sale, exchange, redemption, retirement or other disposition of a
new note to the seller thereof outside the United States, backup
withholding and additional information reporting requirements
will generally not apply. However, additional information
reporting requirements, but not backup withholding, will
generally apply to a payment of the proceeds of a sale,
exchange, redemption, retirement or other disposition of a new
note by a foreign office of a broker that is a United States
person or a &#147;U.S. related person,&#148; unless the broker
has documentary evidence in its records that the holder is a
Non-United States Holder and certain other conditions are met or
the holder otherwise establishes an exemption. For this purpose,
a &#147;U.S. related person&#148; is (1)&nbsp;a foreign person
that derives 50% or more of its gross income from all sources in
specified periods from activities that are effectively connected
with the conduct of a trade or business in the United States,
(2)&nbsp;a &#147;controlled foreign corporation&#148; (a foreign
corporation controlled by certain U.S. shareholders), or
(3)&nbsp;a foreign partnership, if at any time during its tax
year, one or more of its partners are U.S. persons, as defined
in the regulations, who in the aggregate hold more than 50% of
the income or capital interest in the partnership, or if at any
time during its taxable year, such foreign partnership is
engaged in a trade or business in the United States. Payment of
the proceeds of a sale, exchange, redemption, retirement or
other disposition of a new note by a U.S. office of any U.S. or
foreign broker is generally subject to both backup withholding
and additional information reporting unless the holder certifies
under penalties of perjury that it is a Non-United States Holder
or otherwise establishes an exemption. Pursuant to recently
enacted legislation, the backup withholding rate is 28%, which
rate will increase under current law to 31% for taxable years
beginning on or after January&nbsp;1, 2011.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any amounts withheld under the backup withholding
rules from a payment to a holder of the new notes will be
allowed as a refund or a credit against such holder&#146;s U.S.
federal income tax liability, provided that the required
information is furnished to the Internal Revenue Service.
</FONT>

<P align="center"><FONT size="2">79
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Non-United States Holders should consult their
tax advisers concerning the possible application of the Treasury
regulations to any payments made on or with respect to the new
notes.</FONT></B>

<!-- link1 "PLAN OF DISTRIBUTION" -->
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<P align="center">
<B><FONT size="2">PLAN OF DISTRIBUTION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each broker-dealer that receives registered notes
for its own account pursuant to the exchange offer must
acknowledge that it will deliver a prospectus in connection with
any resale of such notes. This prospectus, as it may be amended
or supplemented from time to time, may be used by a
broker-dealer in connection with resales of the registered notes
received in exchange for outstanding notes where such
outstanding notes were acquired as a result of market-making
activities or other trading activities. We have agreed to allow
broker-dealers and other persons, if any, subject to similar
prospectus delivery requirements to use this prospectus to
satisfy such delivery requirements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will not receive any proceeds from any sale of
the registered notes by broker-dealers. Registered notes
received by any broker-dealer for its own account pursuant to
the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the registered
notes or accommodation of such methods of resale, at market
prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such
resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer and/or
the purchasers of any such registered notes. Any broker-dealer
that resells registered notes that were received by it for its
own account pursuant to the exchange offer and any broker or
dealer that participates in a distribution of such registered
notes may be deemed to be an &#147;underwriter&#148; within the
meanings of the Securities Act and any profit on any such resale
of the registered notes and any commissions or concessions
received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The letter of transmittal
states that by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an &#147;underwriter&#148; within the meaning
the Securities Act.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have agreed that for a period of 180&nbsp;days
from May&nbsp;20, 2003, i.e. until November&nbsp;16, 2003, we
will not, without the prior written consent of Banc of America
Securities LLC, directly or indirectly, issue, sell, offer to
sell, grant any option for the sale of, or otherwise dispose of,
any securities similar to the notes, or any securities
convertible into or exchangeable for the notes or any such
similar securities, except for the notes sold to the initial
purchasers pursuant to the purchase agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have been advised by the initial purchasers of
the outstanding notes that, following completion of the exchange
offer, they intend to make a market in the registered notes to
be issued in the exchange offer; however, they are under no
obligation to do so and any market activities with respect to
the registered notes may be discontinued at any time without any
notice.
</FONT>

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<DIV align="left"><A NAME="009"></A></DIV>

<P align="center">
<B><FONT size="2">LEGAL MATTERS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The legality of the notes offered in this
prospectus and other matters will be passed upon for us by
Kilpatrick Stockton LLP, Winston-Salem, North Carolina. The tax
matters addressed in this prospectus will be passed upon for us
by Paul, Hastings, Janofsky&nbsp;&#38; Walker LLP, New York, New
York.
</FONT>

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<DIV align="left"><A NAME="010"></A></DIV>

<P align="center">
<B><FONT size="2">EXPERTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated financial statements of Ingles
Markets, Incorporated appearing in Ingles Markets,
Incorporated&#146;s Annual Report (Form&nbsp;10-K) for the year
ended September&nbsp;28, 2002, have been audited by Ernst &#38;
Young LLP, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference.
Such consolidated financial statements are incorporated herein
by reference in reliance upon such report given on the authority
of such firm as experts in accounting and auditing.
</FONT>

<P align="center"><FONT size="2">80
</FONT>

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<P align="center">
<B><FONT size="2">PART II</FONT></B>

<P align="center">
<B><FONT size="2">INFORMATION NOT REQUIRED IN
PROSPECTUS</FONT></B>

<P align="left">
<B><FONT size="2">Item&nbsp;20.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Indemnification
of Directors and Officers</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s By-laws provide, subject to
the requirements set forth therein, that with respect to any
person who was or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other
than an action by or in right of the Company), the Company shall
indemnify such person by reason of the fact that he is or was a
director or an officer, and may indemnify such person by reason
of the fact that he is or was an employee or agent of the
Company or is or was serving at its request as a director,
officer, employee or agent in another corporation, partnership,
joint venture, trust or other enterprise or as a trustee or
administrator under an employee benefit plan, in either case
against any liability or litigation expenses (including
reasonable attorney&#146;s fees) incurred by such person in
connection with such action, suit or proceeding to the extent
and upon the terms and conditions provided by law (excluding any
such expenses that any such person may incur that were at the
time taken known or believed by them to be clearly in conflict
with the best interests of the Company or, with respect to any
criminal action or proceeding, unlawful). In addition, the
Company&#146;s Articles of Incorporation provide, subject to the
requirements set forth therein, that no director shall have
personal liability arising out of an action, whether by or in
right of the Company or otherwise, for monetary damages for
breach of his duties as a director; provided, however, that such
limitation on liability shall not affect a director&#146;s
liability for (i)&nbsp;acts or omissions not made in good faith
that were at the time taken known or believed by him to be in
conflict with the best interests of the Company,
(ii)&nbsp;unlawful distributions, (iii)&nbsp;transactions from
which he derived an improper personal benefit or (iv)&nbsp;acts
or omissions occurring prior to the effectiveness of such
Articles of Incorporation (i.e. August&nbsp;10, 1988).
</FONT>

<P align="center"><FONT size="2">II-1
</FONT>

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<P align="left">
<B><FONT size="2">Item&nbsp;21.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exhibits
and Financial Statement Schedules</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Exhibits filed as a part of this Registration
Statement are as follows:
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="85%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Document Name</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture dated as of December&nbsp;11, 2001
    between the registrant, as issuer, and U.S. Bank N.A., as
    Trustee, with respect to the registrant&#146;s 8&nbsp;7/8%
    Senior Subordinated Notes due 2011 (incorporated by reference
    herein to Exhibit&nbsp;4.3 to registrant&#146;s Annual Report on
    Form&nbsp;10-K filed on December&nbsp;20, 2001)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of registrant&#146;s 8&nbsp;7/8% Senior
    Subordinated Notes due 2011 (incorporated by reference herein to
    Exhibit&nbsp;4.4 to registrant&#146;s Annual Report on
    Form&nbsp;10-K filed on December&nbsp;20, 2001)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Opinion of Kilpatrick Stockton LLP
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">8</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Opinion of Paul, Hastings, Janofsky &#38; Walker
    LLP
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">12</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Statement re Computation of Earnings to Fixed
    Charges
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Subsidiaries of Ingles Markets, Incorporated
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Ernst &#38; Young LLP*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Kilpatrick Stockton LLP (included in
    Exhibit&nbsp;5.1)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Paul, Hastings, Janofsky &#38; Walker
    LLP (included in Exhibit&nbsp;8.1)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Power of Attorney (contained on signature page of
    Registration Statement)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form&nbsp;T-1 Statement of Eligibility and
    Qualification under the Trust Indenture Act of 1939
    (incorporated by reference herein to Exhibit&nbsp;25 to
    registrant&#146;s Registration Statement on Form&nbsp;S-4 filed
    on February&nbsp;1, 2002, Registration No.&nbsp;333-81972)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Letter of Transmittal
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Notice of Guaranteed Delivery
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Letter from the registrant to Registered
    Holders and Depository Trust Company Participants
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Letter to Clients
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">*&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Filed with this amendment. All other exhibits
    have been previously filed.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Item&nbsp;22.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Undertakings</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The undersigned registrant hereby undertakes
that, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant&#146;s
annual report pursuant to Section&nbsp;13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan&#146;s annual report pursuant
to Section&nbsp;15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial <I>bona fide</I>
offering thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to provisions pursuant to which the directors, officers
or controlling persons may be indemnified by the registrant 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 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 submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
</FONT>

<P align="center"><FONT size="2">II-2
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The undersigned registrant hereby undertakes to
respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items&nbsp;4, 10(b),
11, or 13 of Form&nbsp;S-4 within one business day of receipt of
such request, and to send the incorporated documents by first
class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the
effective date of the registration statement through the date of
responding to the request.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The undersigned registrant hereby undertakes to
supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired
involved therein, that was not the subject of and included in
the registration statement when it became effective.
</FONT>

<P align="center"><FONT size="2">II-3
</FONT>

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<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="011"></A></DIV>

<P align="center">
<B><FONT size="2">SIGNATURES</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant certifies that it has reasonable
grounds to believe that it meets all the requirements for filing
on Form&nbsp;S-4 and has duly caused this Amendment No.&nbsp;2
to its registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of
Asheville, State of North Carolina on October&nbsp;8, 2003.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">INGLES MARKETS, INCORPORATED
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">By:&nbsp;</FONT></TD>
    <TD align="center">
    <FONT size="2">/s/ ROBERT P. INGLE
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">Robert P. Ingle
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">Chairman of the Board and</FONT></I></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">Chief Executive Officer</FONT></I></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this Amendment No.&nbsp;2 to the registration
statement has been signed by the following persons in the
capacities and on the dates indicated.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="17%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ ROBERT P. INGLE<BR>
    <HR size="1" noshade>Robert P. Ingle
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Chairman of the Board, Chief Executive Officer
    and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">October&nbsp;8, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">* JAMES W. LANNING<BR>
    <HR size="1" noshade>James W. Lanning
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">President and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ BRENDA S. TUDOR<BR>
    <HR size="1" noshade>Brenda S. Tudor
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Vice President&nbsp;&#151; Finance, Chief
    Financial Officer and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">October&nbsp;8, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">* CHARLES L. GAITHER,&nbsp;JR.<BR>
    <HR size="1" noshade>Charles L. Gaither,&nbsp;Jr.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">President of Milkco, Inc. and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">* JOHN O. POLLARD<BR>
    <HR size="1" noshade>John O. Pollard
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">* CHARLES E. RUSSELL<BR>
    <HR size="1" noshade>Charles E. Russell
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">* LAURA INGLE SHARP<BR>
    <HR size="1" noshade>Laura Ingle Sharp
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">* J. ALTON WINGATE<BR>
    <HR size="1" noshade>J. Alton Wingate
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">* ROBERT P. INGLE,&nbsp;II<BR>
    <HR size="1" noshade>Robert P. Ingle,&nbsp;II
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Vice President&nbsp;&#151; Operations and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <FONT size="2">*By:
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">/s/ BRENDA S. TUDOR<BR>
    <HR size="1" noshade>Brenda S. Tudor<BR>
    Attorney-in-Fact
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">October&nbsp;8, 2003
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">II-4
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "EXHIBIT INDEX" -->
<DIV align="left"><A NAME="012"></A></DIV>

<P align="center">
<B><FONT size="2">EXHIBIT INDEX</FONT></B>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="86%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Document Name</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture dated as of December&nbsp;11, 2001
    between the registrant, as issuer, and U.S. Bank N.A., as
    Trustee, with respect to the registrant&#146;s 8&nbsp;7/8%
    Senior Subordinated Notes due 2011 (incorporated by reference
    herein to Exhibit&nbsp;4.3 to registrant&#146;s Annual Report on
    Form&nbsp;10-K filed on December&nbsp;20, 2001)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of registrant&#146;s 8&nbsp;7/8% Senior
    Subordinated Notes due 2011 (incorporated by reference herein to
    Exhibit&nbsp;4.4 to registrant&#146;s Annual Report on
    Form&nbsp;10-K filed on December&nbsp;20, 2001)
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Opinion of Kilpatrick Stockton LLP
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">8.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Opinion of Paul, Hastings, Janofsky &#38; Walker
    LLP
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">12.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Statement re: Computation of Earnings to Fixed
    Charges
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Subsidiaries of Ingles Markets, Incorporated
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Ernst &#38; Young LLP*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Kilpatrick Stockton LLP (included in
    Exhibit&nbsp;5.1)
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Paul, Hastings, Janofsky &#38; Walker
    LLP (included in Exhibit&nbsp;8.1)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Power of Attorney (contained on signature page of
    Registration Statement)
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form&nbsp;T-1 Statement of Eligibility and
    Qualification under the Trust Indenture Act of 1939
    (incorporated by reference herein to Exhibit&nbsp;25 to
    registrant&#146;s Registration Statement on Form&nbsp;S-4 filed
    on February&nbsp;1, 2002, Registration No.&nbsp;333-81972)
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Letter of Transmittal
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Notice of Guaranteed Delivery
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Letter from the registrant to Registered
    Holders and Depository Trust Company Participants
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Letter to Clients
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">*&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Filed with this amendment. All other exhibits
    have been previously filed.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">II-5
</FONT>
</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>3
<FILENAME>g83939a2exv23w1.txt
<DESCRIPTION>EX-23.1 CONSENT OF ERNST & YOUNG LLP
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.1

               CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "Experts" and
"Summary Consolidated Financial and Other Data" in Amendment No. 2 to the
Registration Statement (Form S-4 No. 333-107350) and related Prospectus of
Ingles Markets, Incorporated for the offer to exchange 8.875% Senior
Subordinated Notes Due 2011 registered under the Securities Act of 1933 for any
and all outstanding 8.875% Senior Subordinated Notes Due 2011, and to the
incorporation by reference therein of our report dated November 18, 2002 with
respect to the consolidated financial statements and schedule of Ingles Markets,
Incorporated included in its Annual Report (Form 10-K) for the year ended
September 28, 2002, filed with the Securities and Exchange Commission.


/s/ Ernst & Young LLP
- ---------------------------
Greenville, South Carolina
October 8, 2003

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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