<HTML>
<HEAD>
<TITLE>FORM S-1</TITLE>
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">As filed with the Securities and Exchange
Commission on August&nbsp;27, 2004</FONT></B>
</DIV>

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

<DIV align="left">
<HR size="4" noshade color="#000000" style="margin-top: -5px">
</DIV>

<DIV align="left">
<HR size="1" noshade color="#000000" style="margin-top: -10px">
</DIV>

<P align="center">
<B><FONT size="4">SECURITIES AND EXCHANGE COMMISSION</FONT></B>

<DIV align="center">
<B>WASHINGTON, D.C. 20549</B>
</DIV>

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

<P align="center">
<B><FONT size="5">FORM S-1</FONT></B>

<DIV align="center">
<B>REGISTRATION STATEMENT</B>
</DIV>

<DIV align="center">
<B>UNDER</B>
</DIV>

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

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

<P align="center">
<B><FONT size="6">Buffets Holdings, Inc.</FONT></B>

<DIV align="center">
<I><FONT size="2">(Exact Name of Registrant as Specified in
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="33%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="27%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B><FONT size="2">Delaware</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">5812</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">22-3754018</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 Industrial<BR>
    Classification 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 No.)</FONT></I></TD>
</TR>

</TABLE>
</CENTER>

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

<P align="center">
<B><FONT size="2">1460 Buffet Way</FONT></B>

<DIV align="center">
<B><FONT size="2">Eagan, Minnesota 55121</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(651)&nbsp;994-8608</FONT></B>
</DIV>

<DIV align="center">
<I><FONT size="2">(Address, including zip code, and telephone
number, including area code, of registrants&#146; principal
executive offices)</FONT></I>
</DIV>

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

<P align="center">
<B><FONT size="2">See Table of Additional Registrants on
Following Page</FONT></B>

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

<P align="center">
<B><FONT size="2">H. Thomas Mitchell,&nbsp;Esq.</FONT></B>

<DIV align="center">
<B><FONT size="2">Executive Vice President</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">General Counsel and Secretary</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">1460 Buffet Way</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Eagan, Minnesota 55121</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(651)&nbsp;994-8608</FONT></B>
</DIV>

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

<P align="center">
<I><FONT size="2">(Name, address, including zip code, and
telephone number, including area code, of agent for service of
process)</FONT></I>

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

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

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

<TR>
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B><FONT size="2">John C. Kennedy,&nbsp;Esq.<BR>
    Paul, Weiss, Rifkind, Wharton&nbsp;&#38; Garrison LLP<BR>
    1285 Avenue of the Americas<BR>
    New York, New York 10019-6064<BR>
    (212)&nbsp;373-3000</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">Mark C. Smith,&nbsp;Esq.<BR>
    Skadden, Arps, Slate, Meagher&nbsp;&#38; Flom LLP<BR>
    Four Times Square<BR>
    New York, New York 10036<BR>
    (212)&nbsp;735-3000</FONT></B></TD>
</TR>

</TABLE>
</CENTER>

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

<P align="left">&nbsp;&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 this Registration Statement becomes effective.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant
to Rule&nbsp;415 under the Securities Act of 1933, check the
following
box.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&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, 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;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&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;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If this Form is a post-effective amendment filed
pursuant to Rule&nbsp;462(d) under the Securities Act, check the
following box and list the Securities Act registration number of
the earlier effective registration statement for the same
offering.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If delivery of the prospectus is expected to be
made pursuant to Rule&nbsp;434, check the following box.
<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="right">
<I><FONT size="2">(Calculation table and footnotes on following
page)</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The Registrants hereby amend this Registration
Statement on such date or dates as may be necessary to delay its
effective date until the Registrants 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 Securities and Exchange Commission, acting pursuant to said
Section&nbsp;8(a), may determine.</FONT></B>

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</DIV>

<DIV align="left">
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</DIV>

<DIV>&nbsp;</DIV>

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

<DIV align="left">
<I><FONT size="2">(Continued from cover)</FONT></I>
</DIV>

<P align="center">
<B><FONT size="2">CALCULATION OF REGISTRATION FEE</FONT></B>

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

<TR>
    <TD width="57%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="17%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="20%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
</TR>

<TR>
    <TD colspan="5" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
</TR>

<TR>
    <TD colspan="5" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Proposed Maximum</FONT></B></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Title of Each Class of Securities</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Aggregate Offering</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Amount of</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">to be Registered</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Price(1)</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Registration Fee(1)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
</TR>

<TR>
    <TD colspan="5" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income Deposit Securities (IDSs)(2)
    </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>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Class&nbsp;A Common Stock, par value
    $0.01&nbsp;per share(3)
    </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>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    &nbsp;&nbsp;<FONT size="2">%&nbsp;Senior Subordinated Notes due
    2019(4)
    </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>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Subsidiary Guarantees
    of &nbsp;&nbsp;%&nbsp;Senior Subordinated Notes(5)
    </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>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <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="center" valign="bottom">
    <FONT size="2">$550,000,000
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$69,685
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="5" align="left"><HR size="1" noshade></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">Estimated solely for the purpose of computing the
    amount of the registration fee pursuant to Rule&nbsp;457(o)
    promulgated under the Securities Act of 1933, as amended.
    </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">The IDSs
    represent &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of the Class&nbsp;A common stock and
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;aggregate
    principal amount of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;senior
    subordinated notes of Buffets Holdings, Inc. (&#147;Buffets
    Holdings&#148;),
    including &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs
    subject to the underwriters&#146; over-allotment option to
    purchase additional IDSs. Includes an indeterminate number of
    IDSs of the same series which may be received by holders of IDSs
    in the future on one or more occasions in replacement of the
    IDSs being offered hereby in the event of a subsequent issuance
    of IDSs, upon an automatic exchange of portions of the senior
    subordinated notes for identical portions of such additional
    senior subordinated notes as discussed in
    note&nbsp;(4)&nbsp;below.
    </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">Represents &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of Buffets Holdings&#146; Class&nbsp;A common stock included in
    the IDSs described above.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;aggregate
    principal amount of Buffets
    Holdings&#146; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;senior
    subordinated notes included in the IDSs described above and an
    indeterminate principal amount of notes of the same series as
    the senior subordinated notes, which will be received by holders
    of senior subordinated notes in the future on one or more
    occasions in the event of a subsequent issuance of IDSs, upon an
    automatic exchange of portions of the senior subordinated notes
    for identical portions of such additional senior subordinated
    notes. Also includes
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;principal
    amount of senior subordinated notes of the same series that will
    be issued separately (not represented by IDSs).
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The subsidiary guarantors listed in the Table of
    Additional Registrants on the next page will jointly and
    severally and fully and unconditionally guarantee the senior
    subordinated notes represented by the IDSs and the senior
    subordinated notes of the same series that will be issued
    separately from the IDSs. Pursuant to Rule&nbsp;457(n) under the
    Securities Act of 1933, no separate fee for the guarantees is
    payable.
    </FONT></TD>
</TR>

</TABLE>

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

<P align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC.</FONT></B>

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

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

<TR>
    <TD width="50%"><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>
    <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="7%"><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="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Primary Standard</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">IRS</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Jurisdiction of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Industrial</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Employer</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Incorporation or</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Classification</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Identification</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Organization</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</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>
    <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">Buffets, Inc.&nbsp;</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">Minnesota</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">5812</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">41-1462294</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">Buffets Leasing Company, 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">Minnesota</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">5812</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">42-1638138</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">Distinctive Dining, Inc.&nbsp;</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">Minnesota</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">5812</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">41-1923069</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">HomeTown Buffet, Inc.&nbsp;</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">Minnesota</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">5812</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">33-0463002</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">HomeTown Leasing Company, 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">Minnesota</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">5812</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">42-1638142</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">OCB Leasing Company, 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">Minnesota</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">5812</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">42-1638147</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">OCB Purchasing Co.&nbsp;</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">Minnesota</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">5812</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">41-1777610</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">OCB Restaurant Co.&nbsp;</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">Minnesota</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">5812</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">41-1777607</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">Restaurant Innovations, Inc.&nbsp;</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">Minnesota</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">5812</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">41-1931394</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">Tahoe Joe&#146;s, Inc.&nbsp;</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">Delaware</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">5812</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">91-1957129</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">Tahoe Joe&#146;s Leasing Company, 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">Minnesota</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">5812</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">42-1638145</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The address of the principal executive offices of
the additional registrants listed above is 1460&nbsp;Buffet Way,
Eagan, Minnesota 55121. Their telephone number at that address
is (651)&nbsp;994-8608.
</FONT>

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

<TABLE width="100%" border="1" cellpadding="5"><TR><TD>
<FONT size="2" color="#E8112D">The information in this
prospectus is not complete and may be changed without notice. We
may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective.
This prospectus is not an offer to sell these securities and we
are not soliciting offers to buy these securities in any
jurisdiction where the offer or sale is not
permitted.</FONT><FONT size="2"> <BR>
</FONT>
</TD></TR></TABLE>

<P align="center">
<FONT size="2" color="#E8112D">SUBJECT TO COMPLETION, DATED
AUGUST 27, 2004
</FONT>

<P align="left">
<B><FONT size="2">Prospectus</FONT></B>

<DIV align="center">
<FONT size="4">Income Deposit Securities (IDSs)
</FONT>
</DIV>

<DIV align="center">
<FONT size="4">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;Senior
Subordinated Notes due 2019
</FONT>
</DIV>

<DIV align="center">
<B><FONT size="5">Buffets Holdings, Inc.</FONT></B>
</DIV>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are
selling &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs
representing &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of our Class&nbsp;A common stock and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
aggregate principal amount of
our &nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;senior subordinated notes due
2019. Each IDS initially represents:
</FONT>
<P>

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

<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">one share of our Class&nbsp;A common
    stock;&nbsp;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 &nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;senior
    subordinated note with a
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;principal
    amount.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are also selling
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
aggregate principal amount of
our &nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;senior subordinated notes
separately (not represented by IDSs). The offering of IDSs and
the offering of the separate senior subordinated notes are
conditioned upon each other.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This is the initial public offering of our IDSs,
and the shares of our Class&nbsp;A common stock and senior
subordinated notes represented thereby, and our separate senior
subordinated notes. We anticipate that the public offering price
of the IDSs will be between
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
IDS and the public offering price of the senior subordinated
notes sold separately will be &nbsp;&nbsp;&nbsp;&nbsp;% of their
stated principal amount. We will apply to list our IDSs on
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;under
the trading symbol
&#147;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#148;.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders of IDSs will have the right to separate
the IDSs into the shares of our Class&nbsp;A common stock and
senior subordinated notes represented thereby at any time after
the earlier of 45&nbsp;days from the closing of this offering or
the occurrence of a change of control. Similarly, any holder of
shares of our Class&nbsp;A common stock and senior subordinated
notes may, at any time, unless the IDSs have automatically
separated, combine the applicable number of shares of
Class&nbsp;A common stock and principal amount of senior
subordinated notes to form IDSs. Separation of all of the IDSs
will occur automatically upon the continuance of a payment
default on the senior subordinated notes for 90&nbsp;days or
upon the redemption, maturity or acceleration of the senior
subordinated notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our senior subordinated notes mature
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2019. We will be permitted to defer interest payments on our
senior subordinated notes under certain circumstances and
subject to the limitations described in &#147;Description of
Senior Subordinated Notes&nbsp;&#151; Terms of the
Notes&nbsp;&#151; Interest Deferral.&#148; Deferred interest on
our senior subordinated notes will bear interest quarterly at a
rate equal to the stated annual rate of interest on the senior
subordinated notes divided by four.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon a subsequent issuance by us of IDSs or
senior subordinated notes of the same series, a portion of your
senior subordinated notes may be automatically exchanged for an
identical principal amount of the senior subordinated notes
issued in such subsequent issuance, and in that event your IDSs
will be replaced with new IDSs. In addition to the senior
subordinated notes offered hereby, the registration statement of
which this prospectus is a part also registers the senior
subordinated notes and new IDSs to be issued upon any such
subsequent issuance.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have granted the underwriters an option to
purchase up
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional
IDSs to cover over-allotments, if any. We will use all the
proceeds from the sale of additional IDSs upon exercise of the
underwriters&#146; over-allotment option to repurchase shares of
our Class&nbsp;B common stock or other securities from certain
of our existing stockholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Investing in our IDSs, shares of our
Class&nbsp;A common stock and senior subordinated notes involves
risks. See &#147;Risk Factors&#148; beginning on
page&nbsp;24.</FONT></B>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="43%"><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="5%"><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="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="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="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>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Per IDS(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Per Note(2)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</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>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Public offering price
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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">Underwriting discount
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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">Proceeds to Buffets Holdings, Inc. (before
    expenses)(3)(4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>
<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">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The price per IDS comprises
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;allocated to
    each share of Class&nbsp;A common stock and
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;allocated to
    each senior subordinated note.
    </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">Relates to the
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    aggregate principal amount of senior subordinated notes sold
    separately (not represented by IDSs).
    </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">Approximately
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    of these proceeds will be paid to our existing stockholders.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Assumes no exercise of the underwriters&#146;
    over-allotment option.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The underwriters expect to deliver the IDSs and
the senior subordinated notes in book-entry form only through
the facilities of The Depository Trust Company to purchasers on
or
about &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved
of these securities or determined if this prospectus is truthful
or complete. Any representation to the contrary is a criminal
offense.
</FONT>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

<P align="center">
<I><FONT size="2">Joint Book-Running Managers</FONT></I>

<DIV align="left">
<B><FONT size="4"> Credit Suisse First Boston</FONT></B>
</DIV>

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

<TR>
    <TD width="27%"></TD>
    <TD width="73%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <B><FONT size="4"> Banc of America Securities LLC</FONT></B></TD>
</TR>

</TABLE>

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

<TR>
    <TD width="55%"></TD>
    <TD width="45%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <B><FONT size="4"> CIBC World Markets</FONT></B></TD>
</TR>

</TABLE>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

<P align="center">
<B><FONT size="4">UBS Investment Bank</FONT></B>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

<P align="center">
<I><FONT size="2">Co-Managers</FONT></I>

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

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD align="left"><B>JPMorgan</B></TD>
    <TD align="right"><B>Piper Jaffray</B></TD>
</TR>

</TABLE>

<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;,
2004.
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>

<DIV align="left">

</DIV>

<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>

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

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="90%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

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

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#129'>PRESENTATION OF FINANCIAL
    INFORMATION</A>
    </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">ii</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">&nbsp;<A HREF='#101'>INDUSTRY AND MARKET DATA</A>
    </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">ii</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">&nbsp;<A HREF='#102'>TRADEMARKS</A>
    </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">ii</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">&nbsp;<A HREF='#103'>PROSPECTUS SUMMARY</A>
    </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>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">&nbsp;<A HREF='#104'>RISK FACTORS</A>
    </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">24</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">&nbsp;<A HREF='#105'>FORWARD-LOOKING
    STATEMENTS</A>
    </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">39</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">&nbsp;<A HREF='#106'>USE OF PROCEEDS</A>
    </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</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">&nbsp;<A HREF='#107'>DIVIDEND POLICY AND
    RESTRICTIONS</A>
    </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">42</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">&nbsp;<A HREF='#108'>CAPITALIZATION</A>
    </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">48</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">&nbsp;<A HREF='#109'>DILUTION</A>
    </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">49</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">&nbsp;<A HREF='#110'>UNAUDITED PRO FORMA
    CONDENSED FINANCIAL DATA</A>
    </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">50</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">&nbsp;<A HREF='#111'>SELECTED HISTORICAL
    CONSOLIDATED FINANCIAL DATA</A>
    </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">53</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">&nbsp;<A HREF='#112'>MANAGEMENT&#146;S DISCUSSION
    AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</A>
    </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">56</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">&nbsp;<A HREF='#113'>BUSINESS</A>
    </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">72</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">&nbsp;<A HREF='#114'>MANAGEMENT</A>
    </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">82</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">&nbsp;<A HREF='#115'>PRINCIPAL STOCKHOLDERS</A>
    </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">87</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">&nbsp;<A HREF='#116'>CERTAIN RELATIONSHIPS AND
    RELATED TRANSACTIONS</A>
    </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">88</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">&nbsp;<A HREF='#117'>RELATED PARTY TRANSACTIONS
    IN CONNECTION WITH THIS OFFERING</A>
    </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">91</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">&nbsp;<A HREF='#118'>DESCRIPTION OF OTHER
    INDEBTEDNESS</A>
    </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">94</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">&nbsp;<A HREF='#119'>DESCRIPTION OF IDSS</A>
    </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">98</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">&nbsp;<A HREF='#120'>DESCRIPTION OF CAPITAL
    STOCK</A>
    </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">103</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">&nbsp;<A HREF='#121'>DESCRIPTION OF SENIOR
    SUBORDINATED NOTES</A>
    </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">110</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">&nbsp;<A HREF='#122'>IDSS ELIGIBLE FOR FUTURE
    SALE</A>
    </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">151</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">&nbsp;<A HREF='#123'>MATERIAL U.S.&nbsp;FEDERAL
    INCOME TAX CONSEQUENCES</A>
    </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">152</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">&nbsp;<A HREF='#124'>UNDERWRITING</A>
    </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">162</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">&nbsp;<A HREF='#125'>NOTICE TO CANADIAN
    RESIDENTS</A>
    </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">166</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">&nbsp;<A HREF='#126'>LEGAL MATTERS</A>
    </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">167</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">&nbsp;<A HREF='#127'>EXPERTS</A>
    </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">167</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">&nbsp;<A HREF='#128'>WHERE YOU CAN FIND MORE
    INFORMATION</A>
    </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">168</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<!-- /TOC -->
</DIV>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">You should rely only on the information
contained in this document or to which we have referred you. We
have not authorized anyone to provide you with information that
is different. This document may only be used where it is legal
to sell these securities.</FONT></B>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

<P align="center">
<B><FONT size="2">DEALER PROSPECTUS DELIVERY
OBLIGATIONS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Until &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004, all dealers that effect transactions in these securities,
whether or not participating in this offering, may be required
to deliver a prospectus. This is in addition to the
dealer&#146;s obligation to deliver a prospectus when acting as
an underwriter and with respect to unsold allotments or
subscriptions.</FONT></B>

<P align="center">
<HR size="1" width="22%" align="center" noshade>

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

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

<DIV align="left">
<A name='129'></A>
</DIV>

<!-- link1 "PRESENTATION OF FINANCIAL INFORMATION" -->

<P align="center">
<B><FONT size="2">PRESENTATION OF FINANCIAL
INFORMATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 2002, we changed our fiscal year to 52 or
53&nbsp;weeks ending on the Wednesday nearest June&nbsp;30 of
each year. Our new fiscal year is divided into four quarters
of&nbsp;12, 12, 16 and 12 or 13&nbsp;weeks. Our transitional
period ended July&nbsp;3, 2002 consisted of 26&nbsp;weeks
divided into two periods of 16 and 10&nbsp;weeks. Prior to the
26-week transitional period ended July&nbsp;3, 2002, our fiscal
year comprised 52 or 53&nbsp;weeks ending on the Wednesday
nearest December&nbsp;31 of each year, and each fiscal year was
divided into four periods of&nbsp;16, 12, 12 and 12 or
13&nbsp;weeks. Fiscal 2004 refers to the 52&nbsp;weeks ended
June&nbsp;30, 2004; fiscal 2003 refers to the 52&nbsp;weeks
ended July&nbsp;2, 2003; the 2002 transitional period refers to
the 26-week transitional period ended July&nbsp;3, 2002; fiscal
2001 refers to the 52&nbsp;weeks ended January&nbsp;2, 2002;
fiscal 2000 refers to the 53&nbsp;weeks ended January&nbsp;3,
2001; and fiscal 1999 refers to the 52&nbsp;weeks ended
December&nbsp;29, 1999.
</FONT>

<DIV align="left">
<A name='101'></A>
</DIV>

<!-- link1 "INDUSTRY AND MARKET DATA" -->

<P align="center">
<B><FONT size="2">INDUSTRY AND MARKET DATA</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Industry and market data used throughout this
prospectus were obtained through company research, surveys and
studies conducted by third parties and industry and general
publications. The industry and market data provided by
Technomic, Inc., an independent research organization, is based
on a report issued in January 2004 covering data from 1983
through 2002. While we believe the industry and market data is
reliable and market definitions are appropriate, neither these
surveys nor these definitions have been verified by any
independent sources.
</FONT>

<DIV align="left">
<A name='102'></A>
</DIV>

<!-- link1 "TRADEMARKS" -->

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have proprietary rights to a number of
trademarks important to our business, including Old Country
Buffet&#174;, HomeTown Buffet&#174;, Granny&#146;s
Buffet<SUP>SM</SUP>, Country Roadhouse Buffet&nbsp;&#38;
Grill&#174;, Tahoe Joe&#146;s Famous Steakhouse<SUP>SM</SUP>,
Country Buffet<SUP>SM</SUP> and Soup &#145;N Salad
Unlimited&#174;. All other trademarks or service marks referred
to in this prospectus are the property of their respective
owners and are not our property.
</FONT>

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

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

<DIV align="left">
<A name='103'></A>
</DIV>

<!-- link1 "PROSPECTUS SUMMARY" -->

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">This summary highlights selected information
from this prospectus. The following summary information is
qualified in its entirety by the information contained elsewhere
in this prospectus. This summary is not complete and may not
contain all the information that you should consider before
investing in the IDSs and senior subordinated notes. You should
read the entire prospectus carefully, including the &#147;Risk
Factors&#148; section, the &#147;Unaudited Pro Forma Condensed
Financial Data&#148; and the historical financial statements of
Buffets Holdings, Inc. and the accompanying notes to those
statements.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Unless the context indicates or requires
otherwise, (i)&nbsp;the term &#147;Buffets Holdings&#148; refers
to Buffets Holdings, Inc., the issuer of the IDSs and senior
subordinated notes; (ii)&nbsp;the term &#147;Buffets&#148;
refers to Buffets, Inc., our principal operating subsidiary; and
(iii)&nbsp;the terms &#147;we,&#148; &#147;our,&#148;
&#147;ours,&#148; &#147;us&#148; and the &#147;company&#148;
refer collectively to Buffets Holdings and its subsidiaries,
including Buffets. The use of these terms is not intended to
imply that Buffets Holdings and Buffets are not separate and
distinct legal entities.</FONT></I>

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Founded in 1983, Buffets is the twentieth largest
restaurant operator in the United States and is the largest
operator of company-owned stores in the buffet/grill segment, as
measured in both sales and number of restaurants. Our
restaurants are principally operated under the names Old Country
Buffet and HomeTown Buffet. As of June&nbsp;30, 2004, we had
360&nbsp;company-owned restaurants and 20 franchised locations
in 38&nbsp;states. We offer excellent customer service, together
with a convenient, value-priced selection of home-style cooked
meals in a self-service buffet format. For fiscal 2004, we
generated net sales of $942.8&nbsp;million and served
approximately 131&nbsp;million customers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our restaurants provide a high level of food
quality and service through uniform operational standards
developed at the corporate level. Freshness is ensured by
preparing food in small batches of six to eight servings at a
time, with preparations and production adapted to current
customer traffic patterns. Our buffet restaurants utilize
uniform menus, recipes and ingredient specifications, with
certain discretion to adapt menus for regional preferences. We
offer approximately 100 menu items at each meal, including
entrees, soups, salads, fresh vegetables, non-alcoholic
beverages and desserts. Typical entrees include chicken, carved
roast beef, ham, shrimp, salmon, peppered pork loin, fish and
casseroles.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our buffet restaurants use an all-inclusive
pricing strategy designed to provide dining value to our
customers. As of June&nbsp;30, 2004, the meal price at our
buffet restaurants for dinner ranged from $8.59 to $9.59 and for
lunch from $6.49 to $7.19, with discounts offered to senior
citizens and children. The average guest check in our
restaurants, including our Tahoe Joe&#146;s Famous Steakhouses,
for fiscal 2004 was $7.22. In order to further enhance our
guests&#146; dining experience, we have focused on providing a
level of customer service designed to enhance the self-service
buffet format, including such features as limited table-side
service and our scatter-bar layout.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our buffet restaurants average approximately
9,900&nbsp;square feet in size and can generally seat between
225 and 400 people. On average, our buffet restaurants served
approximately 7,000 customers per week during fiscal 2004. While
we attract a broad demographic profile of customers, including
families, senior citizens and singles, our customer surveys
indicate that approximately two-thirds of our guests are married
and over half are between the ages of 25 and 54&nbsp;years old
(the largest segment of the population within the United States).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have a national footprint of restaurant
locations, which are strategically concentrated in particular
regions to maximize penetration within those markets and achieve
operating and advertising synergies. For example, our television
advertising program in 38 designated market areas provided media
coverage for 62% of our buffet restaurants during fiscal 2004.
In addition, our restaurants are located in high customer
traffic venues and include both freestanding units and units
located in shopping centers and malls. As of June&nbsp;30, 2004,
69% of our restaurants were located in shopping centers or malls
and 31% were freestanding units.
</FONT>

<P align="center"><FONT size="2">1
</FONT>

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

<P align="left">
<B><FONT size="2">Industry Overview</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The restaurant industry is among the largest
industries in the United States and according to Technomic,
Inc., an independent research organization, has grown at an
average annual rate of 7.3% from 1975 through 2002. The
restaurant industry can be divided into three main segments:
full-service restaurants, quick-service restaurants, and other
miscellaneous establishments. Full-service restaurants include
the mid-scale, casual dining and upscale (fine dining) segments.
The mid-scale segment, which includes buffet/grill restaurants,
is characterized by complete meals, menu variety and moderate
prices. The casual dining segment, which typically has higher
menu prices and generally offers alcoholic beverages, includes a
small number of national chains, regional chains and independent
operators. The quick-service segment is characterized by lower
average checks, portable meals, fast service and convenience. We
operate in the $3.0&nbsp;billion buffet/grill sector within the
mid-scale segment, which has grown at a compound annual growth
rate of 6.2% from 1997 through 2002. We believe the appeals of
the buffet concept are its full line of food offerings and
all-you-care-to-eat format, and that this format drives greater
price/value perception in the customer&#146;s eyes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Growth in the restaurant industry, and the
buffet/grill segment in particular, has been driven by the
increasing demands for dining ease and convenience among
today&#146;s consumers. The restaurant industry&#146;s portion
of the total food industry&#146;s dollar has grown significantly
in the past two decades. According to Technomic, the restaurant
industry&#146;s share of total food sales has increased from 23%
in 1980 to approximately 31% in 2003. This growth is expected to
continue as a result of several key lifestyle and demographic
trends, including the continued increase in spending on food
away from the home and on restaurant dining and the continued
growth in disposable incomes among the key age groups of the
population frequenting our restaurants.
</FONT>

<P align="left">
<B><FONT size="2">Our Competitive Strengths</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe our leading market position, strong
cash flow, flexible cost structure, motivated and trained
employees, centralized control measures, attractive unit level
economics and proven management team will allow us to grow sales
and increase profitability.
</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">
    <I><FONT size="2">Leading Market Position with National
    Scale.</FONT></I><FONT size="2"> We are the twentieth largest
    restaurant operator in the United States and the largest
    operator of company-owned stores in the buffet/grill sector, as
    measured in both sales and number of restaurants.
    </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">
    <I><FONT size="2">Strong Cash Flow
    Generation.</FONT></I><FONT size="2"> Our strong operating
    results and favorable working capital characteristics are key
    drivers of our strong cash flow. Over the last seven fiscal
    years, our maintenance capital expenditures have averaged
    approximately 1.2% of sales, while our ongoing maintenance
    expenses have averaged approximately 2.0% of sales.
    </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">
    <I><FONT size="2">Flexible Operating
    Model.</FONT></I><FONT size="2"> As a buffet-style restaurant
    with a broad selection of food, we are not tied to a particular
    menu item enabling us to quickly modify our offerings in
    response to changes in customer preferences and food costs.
    </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">
    <I><FONT size="2">Highly Trained and Motivated
    Employees.</FONT></I><FONT size="2"> All of our buffet
    restaurant managers receive extensive training relating to all
    aspects of restaurant management at Buffets College, our
    training program operated out of our corporate headquarters. We
    further seek to reinforce our employees&#146; commitment through
    targeted retention programs and we believe our manager and
    employee turnover rates are among the lowest in the industry.
    </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">
    <I><FONT size="2">Centralized Control
    Measures.</FONT></I><FONT size="2"> We maintain rigorous
    financial controls, service and food quality in all of our
    buffet restaurants using uniform operational standards developed
    at the corporate level and implemented at the restaurant level.
    </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">
    <I><FONT size="2">Attractive Unit Level
    Economics.</FONT></I><FONT size="2"> Over 94% of our
    company-owned stores produced positive store-level cash flow for
    fiscal 2004, and we believe that our store-level cash flow
    before occupancy costs compares favorably to other restaurants
    in the buffet/grill sector on an equivalent basis.
    </FONT></TD>
</TR>

</TABLE>

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

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<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">
    <I><FONT size="2">Proven Management Team with Equity
    Ownership.</FONT></I><FONT size="2"> Over the past
    20&nbsp;years, we have attracted and built an exceptionally
    talented and complementary executive management team with an
    average of over 20&nbsp;years of restaurant industry experience
    and significant equity ownership of our company.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Our Business Strategy</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our goal is to provide exceptional value to
maintain customer loyalty and drive increased guest traffic. We
plan to continue to improve our operating performance through
the following principal strategies:
</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">growth of same store sales and margin expansion
    through an emphasis on food quality, a focus on restaurant-level
    operations, theme-based meal promotions and a disciplined,
    return-on-investment based approach to advertising;
    </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">disciplined restaurant development;&nbsp;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">an emphasis on improving existing units that
    targets a high return on investment.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Our Background</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Buffets was founded in 1983 to develop
buffet-style restaurants under the name Old Country Buffet. In
October 1985, Buffets successfully completed an initial public
offering with seven restaurants, and by 1988 had
47&nbsp;company-owned units and nine franchised units. In
September 1996, Buffets merged with HomeTown Buffet, Inc., a
similar publicly-held scatter-bar, buffet-style restaurant
company established and developed by one of our co-founders. The
merger brought the total number of restaurants to
346&nbsp;company-owned restaurants and 24 franchised restaurants
in 36&nbsp;states at December&nbsp;31, 1996.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Buffets Holdings was formed by Caxton-Iseman
Capital, Inc. in 2000. On October&nbsp;2, 2000, we acquired
Buffets in a buyout from its public shareholders. Caxton-Iseman
Investments L.P. and certain other investors, including members
of management, made an equity investment in us and became the
beneficial owners of 100% of our existing common stock. Buffets
Holdings is a holding company whose assets consist substantially
of the capital stock of Buffets.
</FONT>

<P align="left">
<B><FONT size="2">The Transactions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with this offering:
</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">Buffets will enter into a
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    Amended Credit Facility;
    </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">Buffets will issue
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    of Senior Notes due 2014;
    </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">Buffets will conduct a tender offer and consent
    solicitation to repurchase its 11&nbsp;1/4%&nbsp;Senior
    Subordinated Notes due 2010 (&#147;Buffets&#146;
    11&nbsp;1/4%&nbsp;Notes&#148;);
    </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 conduct a tender offer and consent
    solicitation to repurchase all of our 13&nbsp;7/8%&nbsp;Senior
    Discount Notes due 2010 (our
    &#147;13&nbsp;7/8%&nbsp;Notes&#148;) and will redeem any
    13&nbsp;7/8%&nbsp;Notes that remain outstanding after such
    tender offer;&nbsp;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">we will effect a reclassification of our existing
    common stock into shares of our new Class&nbsp;A and
    Class&nbsp;B common stock and consummate other internal
    corporate transactions. See &#147;Related Party Transactions in
    Connection with this Offering.&#148;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Assuming no exercise of the underwriters&#146;
over-allotment option, we estimate that we will sell IDSs and an
additional
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
aggregate principal amount of separate senior subordinated notes
as part of this offering. Assuming an initial public offering
price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
IDS, which represents the midpoint of the range set forth on the
cover page of this prospectus, and 100% of the stated principal
amount of each separate senior subordinated note, we estimate
that we will receive aggregate net proceeds of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
from this offering of IDSs and separate senior subordinated
notes, after deducting underwriting discounts, commissions and
other estimated transaction expenses.
</FONT>

<P align="center"><FONT size="2">3
</FONT>

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We refer to the transactions described above,
collectively, as the &#147;Transactions.&#148; Other than the
internal corporate transactions, which will occur prior to the
consummation of the offering, each of the Transactions described
above is conditioned upon our completion of each of the other
Transactions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table illustrates the estimated
sources and uses of the funds for the Transactions, assuming the
Transactions all occurred on June&nbsp;30, 2004 and 100% of
Buffets&#146; 11&nbsp;1/4%&nbsp;Notes and our
13&nbsp;7/8%&nbsp;Notes are tendered and purchased in the tender
offers at a cash purchase price
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of aggregate principal amount
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of accreted value,
respectively. Actual amounts may differ.
</FONT>

<P align="center">
<B><FONT size="2">Total Sources and Uses of Funds</FONT></B>

<DIV align="center">
<B><FONT size="2">(Dollars in thousands)</FONT></B>
</DIV>

<CENTER>
<TABLE width="60%" 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="80%"><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="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Sources</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
</TR>

<TR>
    <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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash on hand
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amended Credit Facility
    </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>
</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">%&nbsp;Senior Notes offered by Buffets
    </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>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">IDSs offered hereby
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Senior subordinated notes offered hereby
    separately from the IDSs
    </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>
</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>

</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">
    <B><FONT size="2">Total sources</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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>

</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="83%"><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="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Uses</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash to pre-fund capital expenditures program
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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">Repayment of Existing Credit Facility(1)
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repurchase of Buffets&#146;
    11&nbsp;1/4%&nbsp;Notes
    </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>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repurchase or redemption of our
    13&nbsp;7/8%&nbsp;Notes
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Early redemption or premium costs and payment of
    interest
    </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>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repurchase of existing common stock, warrants and
    options
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Transaction fees and expenses
    </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>
</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>

</TR>

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

</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">The &#147;Existing Credit Facility&#148; refers
    to the $310.0&nbsp;million amended credit facility that we
    entered into on February&nbsp;20, 2004.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Exchange Rights of Class&nbsp;B Common
Stockholders</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon the closing of this offering, our existing
stockholders will hold shares of Class&nbsp;B common stock. The
holders of our Class&nbsp;B common stock will have rights to
exchange their Class&nbsp;B common stock for IDSs or, if the
IDSs have been automatically separated or if the Class&nbsp;A
common stock is listed for separate trading on a stock exchange,
Class&nbsp;A common stock and/or our senior subordinated notes,
subject to certain restrictions. Following the consummation of
the transactions and through the maturity date of the notes, and
subject to the lock-up period, each share of Class&nbsp;B common
stock will be exchangeable into IDSs at a fixed rate
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Class&nbsp;B common stock for one IDS. If the IDSs have
automatically separated or if the shares of our Class&nbsp;A
common stock are listed for separate trading on a stock
exchange, the holders of the Class&nbsp;B common stock may
convert each share of Class&nbsp;B common stock
into &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Class&nbsp;A common stock and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
senior subordinated notes. Following this offering, we expect
that there will
be &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Class&nbsp;B common stock
(or &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Class&nbsp;B common stock if the underwriters exercise their
over-allotment option with respect to the IDSs in full)
exchangeable
into &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs
(or &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs
if the underwriters exercise their over-allotment option in
full). Subject to limited exceptions, until the second
anniversary of the consummation of this offering, the investor
rights agreement to be entered into among the Class&nbsp;B
stockholders will restrict the holders of our Class&nbsp;B
common stock from exercising their exchange rights if, following
the
</FONT>

<P align="center"><FONT size="2">4
</FONT>

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<DIV align="left">
<FONT size="2">exchange, the holders of our Class&nbsp;B common
stock would hold less than 10% of the outstanding shares of our
capital stock in the aggregate. For a more complete description
of this exchange right and the terms of our Class&nbsp;A common
stock and Class&nbsp;B common stock, see &#147;Description of
Capital Stock.&#148;
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Other Information About This
Prospectus</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless the context otherwise requires, references
in this prospectus to this &#147;offering&#148; refer
collectively to the offering
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs
and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
aggregate principal amount of senior subordinated notes offered
separately. Throughout this prospectus, we have assumed an
initial public offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
IDS (comprising
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;principal
amount allocated to each senior subordinated note and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;allocated
to each share of Class&nbsp;A common stock, in each case that
form part of an IDS), which represents the mid-point of the
range set forth on the cover page of this prospectus. We have
also assumed an initial public offering price for the separate
senior subordinated notes of 100% of their stated principal
amount. The information in this prospectus, unless otherwise
indicated:
</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">does not take into account the exercise by the
    underwriters of their over-allotment option with respect to the
    IDSs;
    </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">does not give effect to the issuance of IDSs upon
    conversion of the Class&nbsp;B common stock;&nbsp;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">gives effect to the internal corporate
    transactions.
    </FONT></TD>
</TR>

</TABLE>

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

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<P align="left">
<B><FONT size="2">Our Corporate Structure After this
Offering</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The chart below illustrates in summary form our
capital and corporate structure after this offering.
</FONT>

<P align="center">
<IMG src="y00930y0093002.gif" alt="FLOW CHART">

<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">Assumes no exercise of the underwriters&#146;
    over-allotment option.
    </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">Comprises a
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    term loan, a
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    revolving credit facility (which includes a
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    letter of credit sub-facility), a
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    letter of credit facility and a
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    synthetic letter of credit facility.
    </FONT></TD>
</TR>

</TABLE>

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

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are
offering &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs
at an assumed initial public offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
IDS (comprising
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;allocated
to each note and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;allocated
to each share of Class&nbsp;A common stock), which represents
the midpoint of the range set forth on the cover page of this
prospectus. We are also offering
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
aggregate principal amount of
our &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;senior subordinated
notes separately from the IDSs. The offering of IDSs and the
offering of the separate senior subordinated notes are
conditioned upon each other.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">None of the senior subordinated notes sold
separately from the IDSs in this offering may be purchased,
directly or indirectly, by persons who are also
(1)&nbsp;purchasing IDSs in this offering or (2)&nbsp;holders of
Class&nbsp;B common stock following our internal corporate
transactions.
</FONT>

<P align="left">
<B><FONT size="2">Summary of the IDSs</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></TD>
    <TD>
    <B><I><FONT size="2">What are IDSs?</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IDSs are securities comprising Class&nbsp;A
common stock and senior subordinated notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each IDS initially 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">one share of our Class&nbsp;A common
    stock;&nbsp;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 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;senior
    subordinated note with
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;principal
    amount.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The ratio of Class&nbsp;A common stock to
principal amount of senior subordinated notes represented by an
IDS is subject to change in the event of a stock split,
combination or reclassification of our Class&nbsp;A common
stock. For example, if we effect a two-for-one stock split, from
and after the effective date of the stock split, each IDS will
represent two shares of Class&nbsp;A common stock and the same
principal amount of senior subordinated notes as it previously
represented. Likewise, if we effect a combination or
reclassification of our Class&nbsp;A common stock, each IDS will
thereafter represent the appropriate number of shares of
Class&nbsp;A common stock on a combined or reclassified basis,
as applicable, and the same principal amount of senior
subordinated notes as it previously represented.
</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">What payments can I expect to receive as a
    holder of IDSs?</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You will be entitled to receive quarterly
interest payments at an annual rate
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the aggregate principal
amount of senior subordinated notes represented by your IDSs or
approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
IDS per year, subject to our right, under certain circumstances,
to defer interest payments. For a detailed description of these
circumstances, see &#147;Description of Senior Subordinated
Notes&nbsp;&#151; Terms of the Notes&nbsp;&#151; Interest
Deferral.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You will also receive quarterly dividends on the
shares of our Class&nbsp;A common stock represented by your IDSs
if and to the extent dividends are declared by our board of
directors and permitted by applicable law and the terms of the
Amended Credit Facility, the indenture governing our senior
subordinated notes, the indenture governing Buffets&#146; senior
notes and any of our other then outstanding indebtedness,
specifically, our ability to declare and pay dividends on our
common stock as described under &#147;Dividend Policy and
Restrictions.&#148; Upon the closing of this offering, our board
of directors is expected to adopt a dividend policy which
contemplates that, subject to applicable law and the terms of
our then existing indebtedness, initial annual dividends will be
approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share of our Class&nbsp;A common stock. However, our board of
directors may, in its discretion, modify or repeal this dividend
policy. We have not paid dividends in the past and we cannot
assure you that we will pay dividends at this level in the
future or at all. Holders of our common stock do not have any
legal right to receive, or require us to pay, dividends.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We expect to make interest and dividend payments,
if any, on the 15th day of February, May, August and November of
each year to holders of record on the first day of each such
month, or, if such day is not a business day, the business day
immediately preceding such first day.
</FONT>

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

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<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">Will my rights as a holder of IDSs be any
    different from the rights of a beneficial owner of separately
    held Class&nbsp;A common stock and senior subordinated
    notes?</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No. As a holder of IDSs you are the beneficial
owner of the Class&nbsp;A common stock and senior subordinated
notes represented by your IDSs. As such, through your broker or
other financial institution and The Depository Trust Company, or
DTC, you will have exactly the same rights, privileges and
preferences, including voting rights, rights to receive
distributions, rights and preferences in the event of a default
under the indenture governing our senior subordinated notes,
ranking upon bankruptcy and rights to receive communications and
notices as a beneficial owner of separately held Class&nbsp;A
common stock and senior subordinated notes, as applicable, would
have through its broker or other financial institution and DTC.
</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">What instruments will govern my rights as
    an IDS holder?</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Your rights as an IDS holder will be governed by
a global IDS certificate which includes provisions with respect
to the separation, combination and adjustment of the
Class&nbsp;A common stock and senior subordinated notes
represented by the IDSs. The Class&nbsp;A common stock
represented by the IDSs will be governed by our restated
certificate of incorporation and the global stock certificate
for our Class&nbsp;A common stock. The senior subordinated notes
represented by the IDSs will be governed by the indenture,
including the guarantees, and the global note.
</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">Will the IDSs be listed on an
    exchange?</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will apply to list the IDSs for trading on
the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;under
the trading symbol
&#147;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#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">Will the terms of the senior subordinated
    notes represented by IDSs be the same as the notes sold
    separately from the IDSs?</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Yes. The senior subordinated notes sold
separately from the IDSs will be identical in all respects to
the senior subordinated notes represented by IDSs and will be
part of the same series of notes issued under the same
indenture. Accordingly, holders of senior subordinated notes
sold separately and holders of senior subordinated notes
represented by IDSs will vote together as a single class, in
proportion to the aggregate principal amount of senior
subordinated notes they hold, on all matters on which they were
eligible to vote under the indenture.
</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">Will the shares of our Class&nbsp;A common
    stock and senior subordinated notes represented by the IDSs be
    separately listed on an exchange?</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We currently do not expect an active trading
market for our Class&nbsp;A common stock or senior subordinated
notes to develop. However, we will use commercially reasonable
efforts to list our Class&nbsp;A common stock for separate
trading on
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if
a sufficient number of shares of our Class&nbsp;A common stock
are held separately to meet the minimum requirements for
separate trading on
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for
at least 30 consecutive trading days. The shares of Class&nbsp;A
common stock and senior subordinated notes offered hereby will
be freely tradable without restriction or further registration
under the Securities Act of 1933, unless they are held by
&#147;affiliates&#148; as that term is defined in Rule&nbsp;144
under the Securities Act.
</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">In what form will IDSs, the shares of our
    Class&nbsp;A common stock and senior subordinated notes
    represented by the IDSs and the senior subordinated notes sold
    separately be issued?</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The IDSs, the shares of our Class&nbsp;A common
stock and senior subordinated notes represented by the IDSs and
the senior subordinated notes sold separately will be issued in
book-entry form only. This means that you will not be a
registered holder of IDSs, the securities represented by the
IDSs or the senior subordinated notes sold separately and you
will not receive a certificate for your IDSs, the securities
represented by your IDSs or the senior subordinated notes sold
separately. You must rely on your broker or other financial
institution that will maintain your book-entry position to
receive the benefits and exercise the rights of a holder of IDSs
or senior subordinated notes. However, a holder of common stock,
including
</FONT>

<P align="center"><FONT size="2">8
</FONT>
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<DIV align="left">
<FONT size="2">a holder of an IDS that requests that the IDS be
separated, has a legal right under Delaware law to request that
we issue a certificate for such common stock.
</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">Can I separate my IDSs into shares of
    Class&nbsp;A common stock and senior subordinated notes or
    recombine shares of Class&nbsp;A common stock and senior
    subordinated notes to form IDSs?</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Yes. Holders of IDSs, whether purchased in this
offering or in a subsequent offering of IDSs of the same series,
may, at any time after the earlier of 45&nbsp;days from the date
of the closing of this offering or the occurrence of a change of
control, through their broker or other financial institution,
separate the IDSs into the shares of our Class&nbsp;A common
stock and senior subordinated notes represented thereby. Any
holder of shares of our Class&nbsp;A common stock and senior
subordinated notes may, at any time, through his or her broker,
custodian or other financial institution, combine the applicable
number of shares of Class&nbsp;A common stock and senior
subordinated notes to form IDSs unless the IDSs have previously
been automatically separated. Separation and combination of IDSs
may involve transaction fees charged by your broker and/or
financial intermediary. See &#147;Description of
IDSs &nbsp;&#151; Book-Entry Settlement and
Clearance&nbsp;&#151; Separation and Combination.&#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">Will my IDSs automatically separate into
    shares of Class&nbsp;A common stock and senior subordinated
    notes upon the occurrence of certain events?</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Yes. All outstanding IDSs will automatically
separate upon the occurrence of any of the following: a payment
default on the senior subordinated notes that continues without
cure for 90&nbsp;days; any redemption, whether in whole or in
part, of the senior subordinated notes; the date on which
principal on the senior subordinated notes becomes due and
payable whether at the stated maturity or upon acceleration; or
the DTC&#146;s becoming unwilling or unable to continue as
securities depositary with respect to the IDSs or ceasing to be
a registered clearing agency under the Securities Exchange Act
of 1934 and our being unable to find a successor depositary.
Following any such automatic separation, shares of Class&nbsp;A
common stock and senior subordinated notes may no longer be
combined to form IDSs.
</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">What will happen if we issue additional
    IDSs or senior subordinated notes of the same series in the
    future?</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may conduct future financings by selling
additional IDSs or senior subordinated notes of the same series,
which will have terms that are identical to those of the IDSs
being sold in this offering and will represent the same
proportion of Class&nbsp;A common stock and senior subordinated
notes as is represented by the then outstanding IDSs. In
addition, we may in the future issue IDSs in exchange for shares
of Class&nbsp;B common stock. See &#147;Description of Capital
Stock&nbsp;&#151; Class&nbsp;B Common Stock&nbsp;&#151;
Conversion.&#148; Although the senior subordinated notes
represented by such IDSs will have terms that are identical
(except for the issuance date) to the senior subordinated notes
being sold in this offering and will be part of the same series
of senior subordinated notes for all purposes under the
indenture, it is possible that the new senior subordinated notes
will be sold, issued or deemed to be issued with original issue
discount, or OID, for United States federal income tax purposes.
Upon the issuance of any such senior subordinated notes with
OID, and upon any issuance of senior subordinated notes
thereafter, all holders of IDSs of the same series (including
the IDSs being offered hereby) and of outstanding senior
subordinated notes not represented by IDSs will automatically
exchange a ratable portion of their outstanding senior
subordinated notes for a portion of the new senior subordinated
notes, whether held directly or in the form of IDSs, and will
thereafter hold an inseparable unit consisting of new senior
subordinated notes and old senior subordinated notes with a new
CUSIP number or a new IDS (consisting of such note unit and
Class&nbsp;A common stock) with a new CUSIP number. As a result
of such exchanges, we intend to allocate and report the OID
associated with the sale of the new senior subordinated notes
among all holders of senior subordinated notes on a pro rata
basis, which may adversely affect your tax treatment. See
&#147;What will be the United States federal income tax
consequences of a subsequent issuance of senior subordinated
notes?&#148; In addition, if such senior subordinated notes are
issued with OID, holders of such notes may not be able to
recover the portion of their principal amount treated as
unaccrued OID in the event of an acceleration of
</FONT>

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

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<DIV align="left">
<FONT size="2">the senior subordinated notes or a bankruptcy of
the company prior to the maturity of the senior subordinated
notes. See &#147;Risk Factors&nbsp;&#151; Risks Relating to the
IDSs, the Shares of Class&nbsp;A Common Stock and the Senior
Subordinated Notes Represented by the IDSs, and the Senior
Subordinated Notes Offered Separately&nbsp;&#151; Subsequent
issuances of senior subordinated notes may cause you to
recognize OID and may be treated as a taxable exchange by
you.&#148;
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will promptly file a Current Report on
Form&nbsp;8-K (or any other applicable form) to announce and
quantify any changes in the ratio of IDS components or changes
in OID attributable to the senior subordinated 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">What will be the United States federal
    income tax consequences of an investment in the
    IDSs?</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The United States federal income tax
consequences of the purchase, ownership and disposition of IDSs
or senior subordinated notes in this offering are not entirely
clear.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Treatment of Purchase of
IDSs.</FONT></I><FONT size="2"> The purchase of IDSs in this
offering should be treated for United States federal tax
purposes as the purchase of shares of our Class&nbsp;A common
stock and senior subordinated notes, rather than as the purchase
of a single integrated security, and, by purchasing IDSs, you
will agree to such treatment. You must allocate the purchase
price of the IDSs between those shares of Class&nbsp;A common
stock and senior subordinated notes in proportion to their
respective initial fair market values, which will establish your
initial tax basis in each component of the IDSs. Assuming an
initial public offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
IDS, which represents the mid-point of the range set forth on
the cover page of this prospectus, we expect to report the
initial fair market value of each share of Class&nbsp;A common
stock as
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
the initial fair market value of each $&nbsp;principal amount of
senior subordinated notes as
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
and by purchasing IDSs, you will agree to and be bound by such
allocation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Treatment of Senior Subordinated
Notes.</FONT></I><FONT size="2"> We believe that the senior
subordinated notes should be treated as debt for United States
federal income tax purposes. If the senior subordinated notes
were treated as equity rather than debt for United States
federal income tax purposes, then the stated interest on the
senior subordinated notes could be treated as a dividend, and
interest on the senior subordinated notes would not be
deductible by us for United States federal income tax purposes.
Such payments would likely not qualify for the special dividend
rate described below. This would adversely affect our financial
position, cash flow, and liquidity, and could affect our ability
to make interest or dividend payments on the senior subordinated
debt and the common stock and may affect our ability to continue
as a going concern. In addition, payments on the senior
subordinated notes to foreign holders would be subject to United
States federal withholding tax at rates up to 30%. Payments to
foreign holders would not be grossed-up on account of any such
taxes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under current legislation, which is scheduled to
sunset in 2008, dividends paid by us will generally be taxable
to you at long-term capital gains rates to the extent of our
&#147;earnings and profits.&#148; Any interest paid on the
senior subordinated notes will generally be taxable at ordinary
income rates. If we defer any interest payments on the notes,
holders would be required to include OID in income. See
&#147;Material U.S.&nbsp;Federal Income Tax Consequences.&#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">What will be the United States federal
    income tax consequences of a subsequent issuance of senior
    subordinated notes?</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The United States federal income tax
consequences to you of the subsequent issuance of senior
subordinated notes with OID (or any issuance of senior
subordinated notes thereafter) including an issuance of IDSs in
exchange of Class&nbsp;B common stock are not entirely
clear.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Exchange of Senior Subordinated
Notes.</FONT></I><FONT size="2"> The indenture governing the
senior subordinated notes will provide that, in the event that
there is a subsequent issuance of senior subordinated notes
having terms that are otherwise identical (other than the
issuance date) in all material respects to the senior
subordinated notes represented by the IDSs, including an
issuance of senior subordinated notes upon an exchange of shares
of Class&nbsp;B common stock, but that are issued with OID, each
holder of IDSs or
</FONT>

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

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<DIV align="left">
<FONT size="2">separately held senior subordinated notes, as the
case may be, agrees that, upon such issuance and any issuance of
senior subordinated notes thereafter, a portion of such
holder&#146;s senior subordinated notes will be automatically
exchanged for a portion of the senior subordinated notes
acquired by the holders of such subsequently issued senior
subordinated notes. Consequently, immediately following such
subsequent issuance, each holder of subsequently issued senior
subordinated notes, held either as part of IDSs or separately,
and each holder of existing senior subordinated notes, held
either as part of IDSs or separately, will own an inseparable
unit composed of a proportionate percentage of both the old
senior subordinated notes and the newly issued senior
subordinated notes. The aggregate principal amount of senior
subordinated notes owned by each holder will not change as a
result of such subsequent issuance and exchange.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">It is unclear whether the exchange of senior
subordinated notes for subsequently issued senior subordinated
notes will result in a taxable exchange for United States
federal income tax purposes, and it is possible that the
Internal Revenue Service, or IRS, might successfully assert that
such an exchange should be treated as a taxable exchange. In
such case, a holder would recognize any gain realized on such
exchange, but a loss realized might be disallowed.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Regardless of whether the exchange of senior
subordinated notes is treated as a taxable event, such exchange
could result in holders having to include OID in taxable income
prior to the receipt of cash and in other potentially adverse
U.S.&nbsp;federal income tax consequences to holders. Following
any subsequent issuance of senior subordinated notes with OID
(or any issuance of senior subordinated notes thereafter) and
resulting exchange, we (and our agents) will report any OID on
the subsequently issued senior subordinated notes ratably among
all holders of IDSs and separately held senior subordinated
notes, and each holder of IDSs and separately held senior
subordinated notes will, by purchasing IDSs or senior
subordinated notes, agree to report OID in a manner consistent
with this approach. However, we cannot assure you that the IRS
will not assert that any OID should be reported only by the
persons that initially acquired such subsequently issued senior
subordinated notes (and their transferees) and they may
challenge a holder&#146;s reporting of OID on its tax returns.
Such a challenge could create significant uncertainties in the
pricing of IDSs and senior subordinated notes and could
adversely affect the market for IDSs and senior subordinated
notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Because there is no statutory, judicial or
administrative authority directly addressing the tax treatment
of the IDSs or instruments similar to the IDSs, we urge you to
consult your own tax advisor concerning the tax consequences of
an investment in the IDSs. For additional information, see
&#147;Material U.S.&nbsp;Federal Income Tax Consequences.&#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">What is the initial and prospective
    accounting treatment of the IDSs?</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There is no explicit guidance under generally
accepted accounting principles regarding the accounting and
reporting for unit securities comprising common stock and notes
like the IDSs. Any accounting followed by us for the IDSs may be
subject to future scrutiny and challenge. Authoritative
accounting bodies such as the FASB, EITF or SEC may issue future
guidance, rules or interpretations which may require us to
adjust our accounting for our IDSs. For our interpretation of
the accounting treatment based on existing guidance available,
see &#147;Management&#146;s Discussion and Analysis&nbsp;&#151;
Critical Accounting Policies&nbsp;&#151; Accounting Treatment
for IDSs and Class&nbsp;B Common Stock.&#148;
</FONT>

<P align="center"><FONT size="2">11
</FONT>

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<P align="center">
<B><FONT size="2">Summary of the Capital Stock</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">Buffets Holdings, Inc.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Common stock
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">As a result of our internal corporate
    transactions, we will
    have &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of authorized Class&nbsp;A common stock, par value
    $0.01&nbsp;per
    share, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of authorized Class&nbsp;B common stock, par value
    $0.01&nbsp;per share
    and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of authorized Class&nbsp;C common stock, par value
    $0.01&nbsp;per share. No shares of Class&nbsp;C common stock
    will be outstanding upon the closing of this offering.
    Class&nbsp;A common stock and Class&nbsp;B common stock are
    identical in all respects, except that only Class&nbsp;A common
    stock is eligible to be included in IDSs and each class carries
    different dividend rights. See &#147;Dividend Policies and
    Restrictions.&#148; Furthermore, our by- laws provide that, as
    long as any IDSs are outstanding, we may only issue additional
    shares of Class&nbsp;A common stock as part of IDSs and pursuant
    to a registration statement that has been declared effective by
    the Securities and Exchange Commission. Unless the context
    otherwise requires, references to our &#147;common stock&#148;
    throughout this prospectus refer to our Class&nbsp;A common
    stock, Class&nbsp;B common stock and Class&nbsp;C common stock.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Exchange for IDSs
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Following the consummation of the Transactions
    and through the maturity date of the senior subordinated notes,
    and subject to the lock-up period, each share of Class&nbsp;B
    common stock will be exchangeable into IDSs at a fixed rate
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of Class&nbsp;B common stock for one IDS. If the IDSs have
    automatically separated or if the shares of our Class&nbsp;A
    common stock are listed for separate trading on a stock
    exchange, the holders of the Class&nbsp;B common stock may
    convert each share of Class&nbsp;B common stock
    into &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of Class&nbsp;A common stock and
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
    senior subordinated notes. All exchanges are subject to
    compliance with law and applicable agreements and no such
    exchange can be made if at that time a default or event of
    default under the indenture has occurred and is continuing or
    during any interest deferral period or after the end of any
    interest deferral period until all deferred interest (including
    interest accrued thereon) has been paid in full.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Shares of Class&nbsp;A common stock represented
    by IDSs being offered to the public by Buffets Holdings
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    (or &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    assuming the underwriters exercise their over-allotment option
    in full).
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Shares of common stock to be outstanding
    following the offering
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of Class&nbsp;A common stock, all of which will be represented
    by IDSs
    (or &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    assuming the underwriters exercise their over-allotment option
    in full)
    and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of Class&nbsp;B common stock. If all outstanding shares of
    Class&nbsp;B common stock were exchanged for
    IDSs, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of Class&nbsp;A common stock would be outstanding.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Voting rights
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Each outstanding share of our common stock will
    carry one vote per share and all classes of common stock will
    vote as a single
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">12
</FONT>

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<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">class on all matters presented to the
    stockholders for a vote, except that our amended and restated
    certificate of incorporation will provide that for such time as
    Caxton-Iseman Capital together with its affiliates and related
    parties beneficially own at least 10% or 5% of our equity,
    whether in the form of Class&nbsp;A or Class&nbsp;B common
    stock, it will be entitled to nominate two directors or one
    director, respectively.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Dividends
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Upon completion of this offering, our board of
    directors will adopt a dividend policy which reflects a basic
    judgment that our stockholders would be better served if we
    distributed our excess cash to them instead of retaining it in
    our business. We currently intend to pay an initial dividend
    with respect to the period commencing on the completion of this
    offering and
    ending &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;based
    on a quarterly dividend level
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
    share of Class&nbsp;A common stock and Class&nbsp;B common
    stock, respectively, and to continue to pay quarterly dividends
    at these rates for the remainder of the first full year
    following the closing, but only if and to the extent dividends
    are declared by our board of directors and permitted by
    applicable law, the terms of the Amended Credit Facility, the
    indenture governing Buffets&#146; Senior Notes and the indenture
    governing the senior subordinated notes. Dividend payments are
    not guaranteed and our board of directors may decide, in its
    absolute discretion, at any time and for any reason, not to pay
    dividends.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Our amended and restated certificate of
    incorporation will provide that in the event we declare and pay
    dividends on our Class&nbsp;A common stock we must declare and
    pay dividends on our Class&nbsp;B common stock at a level that
    is &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;times
    the dividends per share on the Class&nbsp;A common stock. This
    ratio is intended to provide our current owners with a yield on
    their Class&nbsp;B common stock in respect of the first year
    following the closing of the offering approximately equivalent
    to the yield they would receive on an equivalent value of IDSs.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Under the indenture governing the senior
    subordinated notes, the dividends we may pay are, in general,
    limited to our &#147;excess cash.&#148; Excess cash is defined
    as our EBITDA (as defined in the indenture) reduced by cash
    interest expense, deferred interest, cash income tax expense,
    maintenance capital expenditures, excess growth capital
    expenditures, certain restructuring costs included in the
    definition of EBITDA and repayment of indebtedness, plus the net
    cash proceeds from any sale of Tahoe Joe&#146;s, Inc. See
    &#147;Description of Senior Subordinated
    Notes&nbsp;&#151;&nbsp;Certain
    Covenants&nbsp;&#151;&nbsp;Limitation on Restricted
    Payments&#148;. Similar limitations on dividends and other
    distributions exist under the Amended Credit Facility and the
    Buffets&#146; Senior Notes. See &#147;Description of Other
    Indebtedness.&#148; In addition, the indenture and the Amended
    Credit Facility contain dividend suspension provisions under
    which we would be prohibited from paying dividends on our
    capital stock during any interest deferral period, while any
    deferred interest remains unpaid or if we fail to satisfy
    certain financial ratios.
    </FONT></TD>
</TR>

</TABLE>

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

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<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">See &#147;Dividend Policy and Restrictions.&#148;
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Dividend payment dates
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">If declared, dividends on our Class&nbsp;A common
    stock and Class&nbsp;B common stock will be paid quarterly on
    the 15th day of February, May, August and November of each year
    to holders of record on the first day of each such month, or, if
    such day is not a business day, the business day immediately
    preceding such first day.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Listing
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">We will apply to list the IDSs on
    the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;under
    the trading symbol
    &#147;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#148;.
    We will use commercially reasonable efforts to cause our
    Class&nbsp;A common stock to be listed for separate trading on
    the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if
    a sufficient number of shares of our Class&nbsp;A common stock
    are held separately to meet the then applicable minimum
    requirements for separate trading on
    the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for
    at least 30&nbsp;consecutive trading days. Our Class&nbsp;A
    common stock will be freely tradable without restriction or
    further registration under the Securities Act, unless held by
    &#147;affiliates&#148; as that term is defined in Rule&nbsp;144
    under the Securities Act of 1933.
    </FONT></TD>
</TR>

</TABLE>

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

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<P align="center">
<B><FONT size="2">Summary of Senior Subordinated 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">Buffets Holdings, Inc.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Senior subordinated notes being offered to the
    public represented by IDSs
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    aggregate principal amount
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;senior
    subordinated notes (or
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    aggregate principal amount assuming the underwriters exercise
    their over-allotment option in full).
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Senior subordinated notes being offered to the
    public separately (not represented by IDSs)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    aggregate principal amount
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;senior
    subordinated notes.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Senior subordinated notes to be outstanding
    following the offering
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    aggregate principal amount
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;senior
    subordinated notes (or
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    aggregate principal amount assuming the underwriters exercise
    their over-allotment option in full).
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">If all outstanding Class&nbsp;B common stock were
    exchanged for IDSs,
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    of the senior subordinated notes would be outstanding.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Interest rate
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;per
    year.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Interest payment dates
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Interest will be paid quarterly in arrears on the
    15th day of February, May, August and November of each year,
    commencing &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2004 to holders of record on the first day of each such month,
    or, if such day is not a business day, the business day
    immediately preceding such first day, of such month.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Interest deferral
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Prior
    to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2009, we may, subject to certain restrictions, defer interest
    payments on our senior subordinated notes on one or more
    occasions for up to eight quarters in the aggregate, meaning
    that the eight quarters of deferred interest must be paid no
    later
    than &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2009. In addition,
    after &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2009, we may, subject to certain restrictions, defer interest
    payments on our senior subordinated notes on up to four
    occasions for no more than two quarters per occasion, provided
    that at the end of any interest deferral period
    following &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2009, we may not further defer interest unless and until all
    deferred interest including interest accrued on deferred
    interest is paid in full. Deferred interest on the senior
    subordinated notes will bear interest at the same rate as the
    stated rate on the senior subordinated notes, compounded
    quarterly, until paid in full.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">During any interest deferral period and so long
    as any deferred interest or interest on deferred interest
    remains outstanding, we will not be permitted to make any
    payment of dividends on our capital stock. For a detailed
    description of interest deferral provisions of the indenture,
    see &#147;Description of Senior Subordinated Notes&nbsp;&#151;
    Terms of the Notes&nbsp;&#151; Interest Deferral.&#148;
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">In the event that interest payments on the senior
    subordinated notes are deferred, you would be required to
    include accrued
    </FONT></TD>
</TR>

</TABLE>

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

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<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">interest in your income for U.S.&nbsp;federal
    income tax purposes on an economic accrual basis even if you do
    not receive any cash interest payments. See &#147;Material
    U.S.&nbsp;Federal Income Tax Consequences.&#148;
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Maturity date
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The senior subordinated notes will mature
    on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2019.
    </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">We may, at our option, redeem all, but not less
    than all, of the Notes at any time, at a redemption price equal
    to 100% of the principal amount of the Notes plus accrued and
    unpaid interest to the redemption date, if for U.S.&nbsp;federal
    income tax purposes we are not, or would not be, in the opinion
    of a nationally recognized tax counsel experienced in such
    matters, permitted to deduct all or a substantial portion of the
    interest payable on the senior subordinated notes from our
    income.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Except as described above, we may not redeem the
    senior subordinated notes prior
    to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2009.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">On and
    after &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2009, we may redeem for cash all or part of the notes upon not
    less than 30 or more than 60&nbsp;days&#146; notice by mail to
    the holders of senior subordinated notes, at the redemption
    prices set forth under &#147;Description of Senior Subordinated
    Notes&nbsp;&#151; Optional Redemption.&#148; If we redeem the
    notes in whole or in part, the notes and common stock
    represented by each IDS will be automatically separated and
    cannot thereafter be combined.
    </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">Upon the occurrence of a change of control, as
    defined under &#147;Description of Senior Subordinated
    Notes&nbsp;&#151; Change of Control,&#148; each holder of senior
    subordinated notes will have the right to require us to
    repurchase that holder&#146;s senior subordinated notes at a
    price equal to 101% of the principal amount of the senior
    subordinated notes being repurchased, plus any accrued but
    unpaid interest to but not including the repurchase date. If
    senior subordinated notes are held in the form of IDSs, in order
    to exercise that right, a holder of IDSs must separate its IDSs
    into the shares of Class&nbsp;A common stock and senior
    subordinated notes represented thereby and hold the senior
    subordinated notes separately.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Guarantees of senior subordinated notes
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The senior subordinated notes will be jointly and
    severally and fully and unconditionally guaranteed, on an
    unsecured senior subordinated basis, by each of our direct and
    indirect domestic subsidiaries existing on the closing of this
    offering and each of our future domestic restricted subsidiaries
    that incur indebtedness or issue shares of preferred stock or
    certain capital stock that is redeemable at the option of the
    holder. The guarantees will be subordinated to the guarantees
    issued by the subsidiary guarantors under the Amended Credit
    Facility as well as those issued under Buffets&#146; Senior
    Notes.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Procedures relating to subsequent issuances
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The indenture governing the senior subordinated
    notes will provide that in the event we issue additional senior
    subordinated
    </FONT></TD>
</TR>

</TABLE>

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

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<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">notes having terms that are otherwise identical
    to the senior subordinated notes (except for the issuance date),
    including any issuance of IDSs in exchange for shares of
    Class&nbsp;B common stock, but that are issued with OID, each
    holder of IDSs or separately held senior subordinated notes, as
    the case may be, agrees that, upon such issuance and any
    issuance of senior subordinated notes thereafter, a portion of
    such holder&#146;s senior subordinated notes, whether held as
    part of IDSs or separately, will be automatically exchanged for
    a portion of the senior subordinated notes acquired by the
    holders of such subsequently issued senior subordinated notes,
    and the records of any record holders of senior subordinated
    notes will be revised to reflect such exchanges. Consequently,
    following each such subsequent issuance and exchange, without
    any action by such holder, each holder of IDSs or separately
    held senior subordinated notes, as the case may be, will own
    senior subordinated notes of each separate issuance in the same
    proportion as each other holder. However, the aggregate
    principal amount of senior subordinated notes owned by each
    holder will not change as a result of such subsequent issuance
    and exchange.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The automatic exchange of senior subordinated
    notes summarized above should not impair the rights any holder
    would otherwise have to assert a claim under applicable
    securities laws against the company or any of its agents,
    including the underwriters, with respect to the full amount of
    senior subordinated notes purchased by such holder. However, any
    subsequent issuance of senior subordinated notes by the company
    may adversely affect the tax and non-tax treatment of the
    holders of notes and IDSs. See &#147;Risk Factors&nbsp;&#151;
    Risks Relating to the IDSs, the Shares of Class&nbsp;A Common
    Stock and the Senior Subordinated Notes Represented by the IDSs,
    and the Senior Subordinated Notes Offered Separately&nbsp;&#151;
    Subsequent issuances of senior subordinated notes may cause you
    to recognize OID and may be treated as a taxable exchange by
    you&#148; and &#147;Material U.S.&nbsp;Federal Income Tax
    Consequences&nbsp;&#151; Consequences to
    U.S.&nbsp;Holders&nbsp;&#151; Senior Subordinated
    Notes&nbsp;&#151; Additional Issuances.&#148;
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Ranking of senior subordinated notes and
    guarantees
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Buffets Holdings is a holding company and derives
    all of its operating income and cash flow from its subsidiaries.
    The senior subordinated notes will be our and any
    guarantor&#146;s unsecured senior subordinated indebtedness and
    will be subordinated in right of payment to all our and any
    guarantor&#146;s existing and future senior indebtedness,
    including our borrowings and all guarantees under the Amended
    Credit Facility and Buffets&#146; Senior Notes and all
    guarantees thereof. The senior subordinated notes and guarantees
    will rank pari passu in right of payment with all of our and any
    guarantor&#146;s existing and future senior subordinated
    indebtedness and trade payables, except as discussed under
    &#147;Description of Senior Subordinated Notes&nbsp;&#151;
    Ranking.&#148; The senior subordinated notes will also be
    effectively subordinated to any of our and any guarantor&#146;s
    secured
    </FONT></TD>
</TR>

</TABLE>

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

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<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 to the extent of the value of the
    assets securing the indebtedness. Because we are a holding
    company, the senior subordinated notes will be structurally
    subordinated to all indebtedness of our non-guarantor
    subsidiaries. The indenture governing the senior subordinated
    notes will permit Buffets Holdings and the subsidiary guarantors
    to incur additional indebtedness, including senior indebtedness,
    subject to specified limitations. On a pro forma basis as of
    June&nbsp;30, 2004:
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;Buffets Holdings&#146; senior
    indebtedness would have been
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    of which would have been secured indebtedness;&nbsp;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 subsidiary guarantors&#146;
    senior indebtedness would have been
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
    which would have been secured indebtedness.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Restrictive covenants
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The indenture governing the senior subordinated
    notes will contain covenants with respect to us and our
    restricted subsidiaries that will restrict:
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;the incurrence of additional
    indebtedness and the issuance of preferred stock;
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;the payment of dividends on, and
    redemption of, capital stock;
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;a number of other restricted
    payments, including investments;
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;specified sales of assets;
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;specified 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;the creation of a number of
    liens;&nbsp;and
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&#149;&nbsp;consolidations, mergers and transfers
    of all or substantially all of our assets.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The indenture will also prohibit certain
    restrictions on distributions from our restricted subsidiaries.
    All the limitations and prohibitions described above are subject
    to a number of other important qualifications and exceptions
    described under &#147;Description of Senior Subordinated
    Notes&nbsp;&#151; Certain Covenants.&#148;
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Listing
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">We do not currently anticipate that our senior
    subordinated notes will be listed separately on any exchange.
    </FONT></TD>
</TR>

</TABLE>

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Investing in the IDSs and our separate senior
subordinated notes involves substantial risk. Before you invest
in the IDSs or the senior subordinated notes offered separately,
you should carefully consider all the information in this
prospectus including matters set forth under the heading
&#147;Risk Factors&#148; beginning on page&nbsp;24.
</FONT>

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

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<P align="center">
<B><FONT size="2">Summary Historical and Pro Forma</FONT></B>

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The table below provides a summary of historical
consolidated financial and other data for the:
</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">fiscal year ended January&nbsp;2, 2002,
    </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">26-week transitional period ended July&nbsp;3,
    2002,
    </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">fiscal year ended July&nbsp;2, 2003,&nbsp;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">fiscal year ended June&nbsp;30, 2004.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, the table presents pro forma balance
sheet data as of June&nbsp;30, 2004 and pro forma operating data
for fiscal 2004. The pro forma adjustments are based upon
available information and certain assumptions that we believe
are reasonable.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The summary operating data for fiscal 2001, the
2002 transitional period, fiscal 2003 and fiscal 2004 are
derived from our audited financial statements. Our audited
financial statements and related notes for fiscal 2001, the 2002
transitional period, fiscal 2003 and fiscal 2004 are contained
elsewhere in this prospectus. All fiscal years presented below
other than the 2002 transitional period represent 52&nbsp;week
periods.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise indicated, pro forma financial
information in this prospectus gives effect to the Transactions
(as described in &#147;Prospectus Summary&nbsp;&#151; The
Transactions&#148;) and the Prior Refinancing Transactions as if
these transactions had occurred on the first day of the period
indicated, in the case of operating data, and on the last day of
the period indicated, in the case of balance sheet data. The
&#147;Prior Refinancing Transactions&#148; comprise the
repurchase of a portion of Buffets&#146; 11&nbsp;1/4%&nbsp;Notes
in the open market and in privately negotiated transactions in
the amount of $45.3&nbsp;million aggregate principal amount
through August&nbsp;18, 2004, with a remaining $0.5&nbsp;million
used to repay indebtedness under the Existing Credit Facility.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The information presented below should be read in
conjunction with &#147;Use of Proceeds,&#148;
&#147;Capitalization,&#148; &#147;Selected Historical
Consolidated Financial Data,&#148; &#147;Management&#146;s
Discussion and Analysis of Financial Condition and Results of
Operations,&#148; &#147;Unaudited Pro Forma Condensed Financial
Data&#148; and the consolidated financial statements and notes
thereto included elsewhere in this prospectus.
</FONT>

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

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<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="5%"><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="5%"><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="5%"><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="5%"><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="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">26-Week</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transitional</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">January&nbsp;2,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;3,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;2,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD></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>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</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>
    <TD></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(Dollars in thousands, except average guest check and average weekly sales)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD 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>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Restaurant sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,044,734</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">527,084</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">985,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">942,831</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><FONT size="2">&nbsp;</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">Restaurant costs
    </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">886,069</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">444,917</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">850,840</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">812,662</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Advertising 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">27,640</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">14,349</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">28,589</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">25,854</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">General 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">50,569</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">25,687</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">45,382</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">42,722</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Goodwill amortization
    </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">10,942</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">&#151;</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">&#151;</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">&#151;</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Impairment of assets and site closing costs
    </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">&#151;</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">&#151;</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">4,803</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">1,878</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on sale of Original Roadhouse Grill
    restaurants
    </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">&#151;</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">&#151;</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">(7,088</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">&#151;</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss on sale-leaseback transactions
    </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">&#151;</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">&#151;</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">5,856</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">&#151;</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Financing-related compensation 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">&#151;</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">&#151;</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">&#151;</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">2,240</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><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 valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">69,514</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42,131</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56,904</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">57,475</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><FONT size="2">&nbsp;</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><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>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,555</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,517</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,927</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,970</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><FONT size="2">&nbsp;</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><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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Cash Flow and Other Financial 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>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Growth capital expenditures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,816</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,786</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,583</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,783</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Maintenance 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">10,293</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">5,231</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">8,215</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">5,684</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Re-image 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">&#151;</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">&#151;</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">2,654</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">18,218</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Corporate and systems 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">7,987</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">2,263</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">2,270</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">322</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 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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,404</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">20,409</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">36,885</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">33,807</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash flow 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">68,835</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">39,250</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">57,656</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">50,490</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash flow provided by (used in) investing
    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">2,575</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">(11,337</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">26,662</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">(28,383</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><FONT size="2">&nbsp;</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">Cash flow used in financing 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">(59,590</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">(47,164</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">(76,825</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">(11,890</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><FONT size="2">&nbsp;</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">Covenant EBITDA(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">115,931</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">60,900</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">97,123</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">100,219</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Pro Forma Balance Sheet Data (at end of
    period):</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>
</TR>

<TR>
    <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><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 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><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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total debt
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Historical Key Operating
    Statistics</FONT></B><FONT size="2">(2)<B>:</B>
    </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>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Number of company-owned restaurants (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">401</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">393</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">372</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">360</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">360</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">Average guest check
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.03</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.13</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.22</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">7.22</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">Average weekly sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,368</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">51,044</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48,953</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,949</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">49,949</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">Same store sales change
    </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">2.1</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">0.2</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">(4.2</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">1.3</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">1.3</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">We have presented Covenant EBITDA in this
    prospectus because it is a financial measure used in the
    Existing Credit Facility to determine compliance with certain
    covenants and financial ratios, and we expect it to be used in
    the Amended Credit Facility for similar purposes. In addition,
    the indentures governing Buffets&#146; 11&nbsp;1/4%&nbsp;Notes
    and our 13&nbsp;7/8%&nbsp;Notes use similar but not identical
    measures, and we expect the indenture governing Buffets&#146;
    Senior Notes to use a similar measure, to determine our ability
    to incur debt, make restricted payments and engage in certain
    transactions. Covenant EBITDA represents EBITDA (earnings before
    net interest expense, taxes, depreciation and amortization)
    adjusted to exclude the following items:
    </FONT></TD>
</TR>

</TABLE>
<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">non-cash deferred rental expense,
    </FONT></TD>
</TR>

</TABLE>

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

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<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">gain on sale of Original Roadhouse Grill,
    </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">loss on sale-leaseback transactions,
    </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">loss related to refinancing,
    </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">loss related to early extinguishment of debt,
    </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">financing-related compensation expenses,
    </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">adjusted EBITDA attributable to the Original
    Roadhouse Grill restaurants sold in fiscal 2003,
    </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">Tahoe Joe&#146;s minority interest expense,
    </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">cash appreciation plan compensation expense,
    </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">loss on disposal of assets and management fees;
    </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">and to give effect to the base rent on the
    restaurants for which sale-leaseback transactions were completed
    and accretion of the deferred gains on the sale-leaseback
    transactions.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We consider Covenant EBITDA an important
indicator to investors in IDSs because it provides information
related to our ability to provide cash flows to service debt,
pay dividends and fund capital expenditures. Covenant EBITDA is
not a measure in accordance with GAAP, and should not be
considered a substitute for, operating income (loss), net income
(loss), and other measures of financial performance reported in
accordance with GAAP. In addition, Covenant EBITDA should not be
used as a substitute for our various cash flow measures
(e.g.,&nbsp;operating, investing and financial cash flows),
which are discussed in &#147;Management&#146;s Discussion and
Analysis of Financial Condition and Results of Operations.&#148;
All companies do not calculate Covenant EBITDA in the same
manner. Accordingly, the Covenant EBITDA measure presented below
may not be comparable to similarly titled measures of other
companies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a calculation of Covenant EBITDA
for the periods indicated:
</FONT>

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

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="33%"><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="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="5%"><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="5%"><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="5%"><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="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>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">26-Week</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transitional</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">January&nbsp;2,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;3,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;2,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></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>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</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>
</TR>

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

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(Dollars in thousands)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></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">Net income (loss)</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,555</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,517</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,927</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,970</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><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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,404</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">20,409</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">36,885</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">33,807</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense, 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">42,707</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">14,876</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">40,928</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">39,185</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">Income tax expense (benefit)
    </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">15,292</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">(3,354</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">5,319</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">1,648</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjustment for sale-leaseback transactions(A)
    </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">(8,006</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">(2,107</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">3,678</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">(416</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><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">Non-cash adjustments(B)
    </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">1,064</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">1,165</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">7,246</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">3,850</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on sale of Original Roadhouse Grill(C)
    </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">&#151;</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">&#151;</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">(7,088</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">&#151;</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">Adjusted EBITDA of Original Roadhouse Grill(D)
    </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">(4,145</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">(2,643</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">(4,251</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">&#151;</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Management fees(E)
    </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">3,060</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">1,347</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">2,479</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">1,884</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">Loss related to refinancing(F)
    </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">&#151;</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">38,724</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">&#151;</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">4,776</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss related to early extinguishment of debt(G)
    </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">&#151;</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">&#151;</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">&#151;</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">5,275</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">Financing-related compensation expense(H)
    </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">&#151;</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">&#151;</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">&#151;</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">2,240</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 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>
    <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 valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Covenant EBITDA</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">115,931</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60,900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">97,123</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100,219</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><FONT size="2">&nbsp;</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>
    <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>

</TABLE>
</CENTER>

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

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a reconciliation of cash flow
provided by operating activities to Covenant EBITDA for the
periods indicated:
</FONT>

<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="39%"><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="5%"><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="5%"><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="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">26-Week</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transitional</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">January&nbsp;2,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;3,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;2,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></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>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</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>
</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">Cash flow provided by operating
    activities</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">68,835</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">57,656</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,490</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">Amortization of debt issuance costs
    </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">(3,905</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">(1,617</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">(1,182</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">(1,370</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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">Net loss related to refinancing:
    </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>
</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">Write off of debt issuance costs
    </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">&#151;</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">(11,022</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">&#151;</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">(4,201</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">Accrued redemption fees
    </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">&#151;</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">(17,000</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">&#151;</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">&#151;</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">Original issue discount expensed
    </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">&#151;</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">(4,107</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">&#151;</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Accretion of original issue discount
    </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">(773</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">(357</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">(739</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">(2,049</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">Deferred 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">(1,269</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">(614</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">&#151;</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Asset impairments
    </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">(491</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">&#151;</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">&#151;</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">&#151;</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">Loss on sale leaseback transactions
    </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">&#151;</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">&#151;</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">(5,856</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Changes in assets and liabilities
    </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">3,944</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">5,650</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">(2,110</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">7,565</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">Interest expense, 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">42,707</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">14,876</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">40,928</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">39,185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Income tax expense (benefit), current provision
    </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">15,271</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">(556</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">4,642</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">448</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">Adjustment for sale-leaseback transactions(A)
    </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">(8,006</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">(2,107</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">3,678</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">(416</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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">Other charges(I)
    </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">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">1,076</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">1,878</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">1,667</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 of Original Roadhouse Grill(D)
    </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">(4,145</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">(2,643</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">(4,251</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Management fees(E)
    </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">3,060</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">1,347</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">2,479</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">1,884</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">Loss related to refinancing(F)
    </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">&#151;</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">38,724</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">&#151;</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">4,776</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Financing-related compensation expenses(H)
    </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">&#151;</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">&#151;</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">&#151;</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">2,240</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>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Covenant EBITDA</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">115,931</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60,900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">97,123</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100,219</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>

</TR>

</TABLE>
</CENTER>

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

<DIV>&nbsp;</DIV>

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

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

<TR>
    <TD valign="top">
    <FONT size="2">(A)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Adjustments for sale-leaseback transactions
    reflects the impact of our sale-leaseback transactions, which
    have occurred in the period from January&nbsp;4, 2001 through
    June&nbsp;30, 2004, including an adjustment for minimum base
    rent as if the sale-leaseback transactions occurred on
    January&nbsp;4, 2001. The adjustment also gives effect to the
    loss on sale-leaseback transactions and accretion of deferred
    gains on the sale-leaseback transactions.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">(B)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Non-cash adjustments include:
    </FONT></TD>
</TR>

</TABLE>
<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 addition of non-cash fair market value
    adjustments to the carrying value of long-lived assets as
    reflected in the impairment of assets line item in the
    consolidated statements of operations for fiscal 2003 and fiscal
    2004;
    </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 addition of non-cash straight-line, deferred
    rent;
    </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 exclusion of the non-cash effect of minority
    interest associated with our Tahoe Joe&#146;s subsidiary;
    </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 addition of non-cash compensation expense
    recognized for a cash appreciation incentive plan;&nbsp;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 exclusion of the non-cash loss (gain)&nbsp;on
    disposal of assets as recorded in the consolidated statements of
    cash flows.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

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

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

<TR>
    <TD valign="top">
    <FONT size="2">(C)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Gain on sale of Original Roadhouse Grill reflects
    a reduction of the net proceeds from the sale of 13 Original
    Roadhouse Grill restaurants net of the related carrying value of
    these restaurants, as recorded in the consolidated statement of
    operations for fiscal 2003.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">(D)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Adjusted EBITDA of Original Roadhouse Grill,
    which includes store-level cash flow, less general and
    administrative costs, plus non-cash deferred rent, gives pro
    forma effect to the sale of the 13 Original Roadhouse Grill
    restaurants as if the sale occurred on January&nbsp;4, 2001. Net
    income, interest expense
    </FONT></TD>
</TR>

</TABLE>

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

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

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

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">and income tax expense for Original Roadhouse
    Grill restaurants include certain allocations based on a
    percentage of sales.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">(E)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Management cash fees reflects the exclusion of
    expense recognized with respect to annual advisory fees paid to
    Caxton-Iseman Capital and Sentinel Capital Partners, L.L.C. as
    discussed in &#147;Certain Relationships and Related
    Transactions.&#148;
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">(F)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Loss related to refinancing reflects transaction
    and other costs associated with our recapitalization on
    June&nbsp;28, 2002 and our refinancings on February&nbsp;20,
    2004 and May&nbsp;18, 2004, as recorded in the consolidated
    statements of operations in the 2002 transitional period and
    fiscal 2004.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">(G)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Loss related to early extinguishment of debt
    reflects the exclusion of costs associated with redeeming a
    portion of Buffets&#146; senior subordinated notes prior to
    maturing during fiscal 2004, as recorded in the consolidated
    statement of operations.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">(H)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Financing-related compensation expense represents
    payments to holders of stock options and cash incentive plan
    units in conjunction with the issuance of our 13&nbsp;7/8% Notes
    on May&nbsp;18, 2004, as recorded in the consolidated statement
    of operations in fiscal 2004.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">(I)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Other charges include:
    </FONT></TD>
</TR>

</TABLE>
<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 addition of non-cash straight-line, deferred
    rent;
    </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 exclusion of the non-cash effect of minority
    interest associated with our Tahoe Joe&#146;s
    subsidiary;&nbsp;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 addition of non-cash compensation expense
    recognized for a cash appreciation incentive plan.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

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

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

<TR>
    <TD valign="top">
    <FONT size="2">(2)
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Reflects data relating to all of our
    company-owned restaurants.
    </FONT></TD>
</TR>

</TABLE>

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

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<DIV align="left">
<FONT size="2"> <A name='104'></A>
</FONT>
</DIV>

<!-- link1 "RISK FACTORS" -->

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">In addition to the other information contained
in this prospectus, the following factors should be considered
carefully before investing in the IDSs (including the
Class&nbsp;A common stock and senior subordinated notes
represented thereby) or our senior subordinated notes. If any of
the following risks actually occur, our business, results of
operations or financial condition would likely suffer.</FONT></I>

<P align="left">
<B><FONT size="2">Risks Relating to the IDSs, the Shares of
Class&nbsp;A Common Stock and the Senior Subordinated Notes
Represented by the IDSs, and the Senior Subordinated Notes
Offered Separately</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></TD>
    <TD>
    <B><I><FONT size="2">Buffets Holdings is a holding company and
    relies on dividends, interest and other payments, advances and
    transfer of funds from its subsidiaries to meet its debt service
    and other obligations.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Buffets Holdings has no direct operations and no
significant assets other than ownership of 100% of the stock of
Buffets, all of which will be pledged to the creditors under the
Amended Credit Facility which Buffets Holdings guarantees.
Because Buffets Holdings conducts its operations through its
direct and indirect subsidiaries, Buffets Holdings depends on
those entities for dividends and other payments to generate the
funds necessary to meet its financial obligations, including
payments of principal and interest on the senior subordinated
notes, and to pay dividends with respect to the common stock.
Legal and contractual restrictions in the Amended Credit
Facility, the indenture governing Buffets&#146; Senior Notes and
other agreements governing current and future indebtedness of
Buffets Holdings&#146; subsidiaries, as well as the financial
condition and operating requirements of Buffets Holdings&#146;
subsidiaries, may limit Buffets Holdings&#146; ability to obtain
cash from its subsidiaries. The earnings from, or other
available assets of, Buffets Holdings&#146; subsidiaries may not
be sufficient to pay dividends or make distributions or loans to
enable Buffets Holdings to make payments in respect of the
senior subordinated notes when such payments are due and to pay
dividends on the common stock.
</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 rights as holders of the senior
    subordinated notes and guarantees thereof to receive payments
    will be contractually subordinated to those of holders of our
    senior indebtedness and may be otherwise adversely affected in
    the event of our bankruptcy.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the subordinated nature of the
senior subordinated notes and related guarantees, upon any
distribution to our creditors or the creditors of the subsidiary
guarantors in bankruptcy, liquidation or reorganization or
similar proceeding relating to Buffets Holdings or the
subsidiary guarantors or Buffets Holdings&#146; or their
property, the holders of Buffets Holdings&#146; senior
indebtedness and senior indebtedness of the subsidiary
guarantors will be entitled to be paid in full in cash before
any payment may be made with respect to the senior subordinated
notes or the subsidiary guarantees. Holders of the senior
subordinated notes would then participate with all other holders
of unsecured senior subordinated indebtedness of Buffets
Holdings or the subsidiary guarantors similarly subordinated in
the assets remaining after Buffets Holdings and the subsidiary
guarantors have paid all senior indebtedness. Buffets Holdings
and the subsidiary guarantors may not have sufficient funds to
pay all of our creditors, and holders of our senior subordinated
notes may receive less, ratably, than the holders of senior
indebtedness, and because of the obligation to turn over
distributions to holders of senior indebtedness, the holders of
the notes may receive less, ratably, than trade payables and
other general unsecured indebtedness. Further, in the event of
such bankruptcy proceedings, a party in interest may seek to
subordinate the senior subordinated notes to all creditors under
principles of equitable subordination or to recharacterize the
senior subordinated notes as equity. If such a subordination or
recharacterization did occur, you may not recover any amounts
owing on the senior subordinated notes or the guarantees and you
might be required to return any payments made to you on account
of the senior subordinated notes up to six years prior to our
bankruptcy.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2004, on a pro forma basis,
the senior subordinated notes and the subsidiary guarantees
would have ranked junior, on a consolidated basis, to
approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of indebtedness, including borrowings under the Amended Credit
Facility and Buffets&#146; Senior Notes. In addition, as of
June&nbsp;30, 2004, on a pro forma basis, we would have had the
ability to borrow up to an
</FONT>

<P align="center"><FONT size="2">24
</FONT>

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<DIV align="left">
<FONT size="2">additional amount of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
under the Amended Credit Facility (less amounts reserved for
letters of credit), which would have ranked senior in right of
payment to the senior subordinated notes.
</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">Payments on the senior subordinated notes
    may be blocked if we default under senior indebtedness,
    including the Amended Credit Facility.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we default in the payment of any of our senior
indebtedness, including the Amended Credit Facility and
Buffets&#146; Senior Notes, we will not make any payments on the
senior subordinated notes until the payment default has been
cured or waived. In addition, even if we are making payments on
our senior indebtedness on a timely basis, payments on the
senior subordinated notes may be blocked for up to 180&nbsp;days
if we default on our senior indebtedness in some other manner.
During any period in which payments on the senior subordinated
notes are prohibited or blocked in this manner, we and the
guarantors will be prohibited from making any payments in
respect of the senior subordinated notes and the guarantees.
</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">Claims of noteholders will be structurally
    subordinated to claims of creditors of all of our existing and
    future unrestricted subsidiaries, all of which will not
    guarantee the senior subordinated notes.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The senior subordinated notes will not be
guaranteed by any of our current or future unrestricted
subsidiaries. Our unrestricted subsidiaries are separate and
distinct legal entities and have no obligation, contingent or
otherwise, to pay any amounts due pursuant to the senior
subordinated notes, or to make any funds available therefor,
whether by dividends, loans, distributions or other payments.
Any right that we or the guarantors have to receive any assets
of any of the unrestricted subsidiaries upon the liquidation or
reorganization of those subsidiaries, and the consequent rights
of holders of senior subordinated notes to realize proceeds from
the sale of any of those subsidiaries&#146; assets, will be
structurally subordinated to the claims of that
subsidiaries&#146; creditors, including trade creditors and
holders of debt of those subsidiaries.
</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 substantial level of indebtedness could
    adversely affect our financial condition and prevent us from
    fulfilling our obligations under the senior subordinated
    notes.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have substantial indebtedness. As of
June&nbsp;30, 2004, on a pro forma basis, we would have had
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of total indebtedness.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our ability to make distributions, pay dividends
or make other payments will be subject to applicable law and
contractual restrictions contained in the instruments governing
any indebtedness of ours and our subsidiaries, including the
Amended Credit Facility and Buffets&#146; Senior Notes. Our
level of debt could have negative consequences to you and to us.
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 the senior subordinated 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, as well as increases in
    interest rates;
    </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 ability to fund future working capital,
    capital expenditures, debt service and general corporate
    requirements;
    </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 the payments on our
    indebtedness, thereby reducing the availability of our cash flow
    to fund working capital, capital expenditures and other general
    corporate purposes;
    </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;
    </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 ability to borrow additional funds;
    </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 ability to refinance our debt on terms
    acceptable to us 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">make it more difficult to comply with the
    covenants in the indentures relating to our senior subordinated
    notes and Buffets&#146; Senior Notes and the amended credit
    agreement relating to the
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">25
</FONT>

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<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></TD>
    <TD align="left">
    <FONT size="2">Amended Credit Facility, which could in turn
    result in an event of default under our indebtedness, which, if
    not cured or waived, could have a material adverse effect on
    us;&nbsp;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 our flexibility in planning for, or
    reacting to, changes in our business and future business
    opportunities.
    </FONT></TD>
</TR>

</TABLE>

<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">Servicing our debt will require a
    significant amount of cash. Our subsidiaries&#146; ability to
    generate sufficient cash depends on numerous factors which are
    beyond our control and we may be unable to generate sufficient
    cash flow to service our debt obligations, including making
    payments on the senior subordinated notes, and to pay dividends
    on the common stock.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our ability to pay our expenses, principal and
interest on the senior subordinated notes and other debt, and
dividends on the common stock depends on our ability to generate
positive cash flow in the future, which is subject to general
economic, financial, competitive, legislative and regulatory
factors and other factors that are beyond our control. Our
subsidiaries&#146; operations may not generate sufficient cash
flow from operations and future borrowings may not be available
under the Amended Credit Facility in amounts sufficient to
enable us or our subsidiaries to make payments in respect of the
senior subordinated notes, to pay our other debt, to pay
dividends on the common stock or to fund other liquidity needs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If our subsidiaries do not have sufficient cash
flow from operations, Buffets Holdings or our subsidiaries may
be required to incur additional indebtedness, refinance all or
part of our existing debt or sell assets. If Buffets Holdings or
our subsidiaries are required to refinance existing debt, or if
Buffets Holdings or our subsidiaries are required to sell some
of our assets, we may not be able to do so on terms that are
acceptable to us or at all. In addition, the terms of existing
or future debt agreements, including the indenture governing
Buffets&#146; Senior Notes and the Amended Credit Facility, may
restrict Buffets Holdings or our subsidiaries from effecting any
of these alternatives or we may fail for other reasons. If we
are required to pursue other alternatives, the value of the
senior subordinated notes and the common stock, and our
financial condition, could be significantly adversely affected.
</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">Despite our current leverage, we may still
    be able to incur substantially more debt. This could further
    exacerbate the risks that we and our subsidiaries
    face.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We, including our subsidiaries, may be able to
incur substantial additional indebtedness in the future. For
example, the Amended Credit Facility will provide commitments of
up to
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of which would have been available for future borrowings as of
June&nbsp;30, 2004, on a pro forma basis, subject to the
aggregate borrowing base availability and net of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
in outstanding letters of credit. All of such indebtedness would
have been secured and effectively senior to the senior
subordinated notes. If we incur any additional indebtedness that
ranks equally with the senior subordinated notes, the holders of
that debt will be entitled to share ratably with the holders of
the senior subordinated notes in any proceeds distributed in
connection with any insolvency, liquidation, reorganization,
dissolution or other winding-up of us. This may have the effect
of reducing the amount of proceeds paid to you. If additional
indebtedness is added to our or our subsidiaries&#146; current
levels of indebtedness, the substantial risks described above
would intensify.
</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">If we or our subsidiaries default on our or
    their obligations to pay our or their indebtedness, or fail to
    comply with other covenants thereunder, we may not be able to
    make payments on the senior subordinated notes and the common
    stock.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we or our subsidiaries are unable to generate
sufficient cash flow and are otherwise unable to obtain funds
necessary to meet required payments on our or their
indebtedness, or if we or our subsidiaries otherwise fail to
comply with the various covenants, including financial and
operating covenants, in the instruments governing our or their
indebtedness (including the Amended Credit Facility and our
guarantee
</FONT>

<P align="center"><FONT size="2">26
</FONT>

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<DIV align="left">
<FONT size="2">thereof and the indenture governing Buffets&#146;
Senior Notes), we or they could be in default under the terms of
the agreements governing such indebtedness. In the event of such
default:
</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 valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the holders of such indebtedness could elect to
    declare all the funds borrowed thereunder to be due and payable,
    together with accrued and unpaid interest and liquidated
    damages, if any. The lenders under the Amended Credit Facility
    could elect to terminate their commitments, cease making further
    loans and institute foreclosure proceedings against our or our
    subsidiaries&#146; assets. We could directly or indirectly be
    prohibited from paying principal, premium, if any, and interest
    on the senior subordinated notes, and dividends with respect to
    the common stock,&nbsp;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">we or our subsidiaries could be forced into
    bankruptcy or liquidation.
    </FONT></TD>
</TR>

</TABLE>

<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 will be subject to restrictive covenants
    in our debt agreements that may limit our ability to pursue
    strategies that may otherwise improve our
    business.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture governing the senior subordinated
notes, the indenture governing Buffets&#146; Senior Notes and
the Amended Credit Facility will impose significant operating
and financial restrictions on us.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These restrictions will limit our ability, among
other things, 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">incur additional indebtedness;
    </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">acquire the assets of, or merge or consolidate
    with, other companies;
    </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">pay dividends or make other distributions on our
    capital stock or repurchase, repay or redeem the senior
    subordinated notes, subordinated debt and 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">make certain investments;
    </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">incur liens;
    </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">make capital expenditures;
    </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">enter into certain types of transactions with our
    stockholders and affiliates;
    </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 dividends or other payments by our
    restricted subsidiaries to us;&nbsp;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">transfer or sell certain or all or substantially
    all of our assets.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These covenants in the indenture governing the
senior subordinated notes, the indenture governing Buffets&#146;
Senior Notes and the Amended Credit Facility may impair our
ability to finance future operations or capital needs or to
enter into acquisitions or joint ventures or engage in other
favorable business activities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we default under the indenture governing the
senior subordinated notes, the indenture governing Buffets&#146;
Senior Notes or the Amended Credit Facility or we fail to
satisfy the financial covenants under the Amended Credit
Facility, we could directly or indirectly be prohibited from
making any payments with respect to the IDSs or our senior
subordinated notes. In addition, the lenders under the Amended
Credit Facility and the holders of Buffets&#146; Senior Notes
could require immediate repayment of the entire principal that
is outstanding under those facilities or those notes. If those
lenders or holders require immediate repayment, our assets may
not be sufficient to repay them and also repay the senior
subordinated notes 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 dividend policy may negatively impact
    our ability to finance capital expenditure or
    operation.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon completion of this offering, our board of
directors will adopt a dividend policy under which cash
generated by our business in excess of operating needs, interest
and principal payments on indebtedness, and capital expenditures
sufficient to maintain our properties would in general be
distributed as regular quarterly dividends to the holders of our
Class&nbsp;A common stock and Class&nbsp;B common stock rather
than retained by us and used to finance growth opportunities. As
a result, we may not retain a sufficient amount of cash to
finance growth opportunities or unanticipated capital
expenditure needs or to fund our
</FONT>

<P align="center"><FONT size="2">27
</FONT>

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<DIV align="left">
<FONT size="2">operations in the event of a significant business
downturn. We may have to forgo growth opportunities or capital
expenditures that would otherwise be necessary or desirable if
we do not find alternative sources or financing. If we do not
have sufficient cash for these purposes or if the
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
in cash on hand available for capital expenditures is
insufficient, our financial condition and our business will
suffer.
</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">Federal and state laws permit a court to
    void the senior subordinated notes or the subsidiary guarantees
    under certain circumstances.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The issuance of the senior subordinated notes and
the guarantees may be subject to review under United States
federal bankruptcy law and comparable provisions of state
fraudulent conveyance laws if a bankruptcy or reorganization
case or lawsuit is commenced by or on behalf of our or the
guarantor&#146;s unpaid creditors. A court could void the
obligations under the senior subordinated notes or the
guarantees, further subordinate the senior subordinated notes or
the guarantees or take other action detrimental to holders of
the senior subordinated notes, if, among other things, at the
time the indebtedness was incurred, Buffets Holdings or the
guarantors:
</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">issued the senior subordinated notes or the
    guarantees to delay, hinder or defraud present or future
    creditors;&nbsp;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">received less than reasonably equivalent value or
    fair consideration for issuing the senior subordinated notes or
    the guarantees at the time of issuance of the senior
    subordinated notes or the guarantees 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">were insolvent or rendered insolvent by reason of
    issuing the senior subordinated notes or the guarantees;
    </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">were engaged, or about to engage, in a business
    or transaction for which the remaining unencumbered assets
    constituted unreasonably small capital to carry on our or the
    guarantor&#146;s business;&nbsp;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">intended to incur, or believed that we or the
    guarantor would incur, debts beyond our or the guarantor&#146;s
    ability to pay as they mature.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The measures of insolvency for purposes of
fraudulent transfer laws vary depending upon the law of the
jurisdiction that is being applied in any proceeding to
determine whether a fraudulent transfer had occurred. It is not
clear what standard a court would use to determine whether or
not we or a guarantor were solvent at the relevant time.
Generally, however, a person would be considered insolvent if,
at the time it incurred the debt:
</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 sum of its debts, including contingent
    liabilities, was greater than the fair saleable value of all of
    its assets;
    </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 present fair saleable value of its assets was
    less than the amount that would be required to pay its probable
    liability on its existing debts, including contingent
    liabilities, as they become absolute and mature;&nbsp;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">it could not pay its debts as they become due.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The proceeds of the offering will be used to
repurchase a portion of Buffets Holdings&#146; common stock from
our existing stockholders and to repurchase all of our
outstanding 13&nbsp;7/8%&nbsp;Notes and Buffets&#146;
11&nbsp;1/4%&nbsp;Notes, which may subject the holders of our
senior subordinated notes in this offering to the claim that we
did not receive fair consideration for the senior subordinated
notes issued in this offering. In the event that we meet any of
the financial condition fraudulent transfer tests described
above at the time of or as a result of this offering, a court
could integrate the issuance of our senior subordinated notes
with the distribution to our shareholders and the repurchase of
Buffets&#146; 11&nbsp;1/4%&nbsp;Notes, and, therefore, conclude
that we did not get fair value for the offering viewed as an
integrated transaction. In such a case, a court could hold the
debt owed to the holders of our senior subordinated notes void
or unenforceable or may subordinate it to the claims of other
creditors.
</FONT>

<P align="center"><FONT size="2">28
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The guarantee of our senior subordinated notes by
any subsidiary guarantor could be subject to the claim that,
since the guarantee was incurred for the benefit of Buffets
Holdings, and only indirectly for the benefit of the subsidiary
guarantor, the obligations of the subsidiary guarantor were
incurred for less than fair consideration. If such a claim were
successful and it was proven that the subsidiary guarantor was
insolvent at the time the guarantee was issued, a court could
void the obligations of the subsidiary guarantor under the
guarantee or subordinate these obligations to the subsidiary
guarantor&#146;s other debt or take action detrimental to the
holders of the senior subordinated notes. If the guarantee of
any subsidiary guarantor were voided, our notes would be
effectively subordinated to the indebtedness of that subsidiary
guarantor.
</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">If we defease the senior subordinated
    notes, such defeasance may be subject to preferential transfer
    laws.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture relating to the senior subordinated
notes will provide that we may, after complying with certain
conditions, defease the senior subordinated notes and be
released from our obligations under many of the covenants
contained in the indenture, or discharge all our obligations
under the indenture within a year of the maturity date or a
redemption date. One of the conditions to such defeasance or
discharge is that we deposit sufficient funds with the trustee
to pay the principal, interest and premium on the outstanding
senior subordinated notes through maturity or an applicable
redemption date. If a bankruptcy or reorganization proceeding is
initiated within the applicable preference period, which
generally varies from 90&nbsp;days to one year, the deposit
would likely be subject to review under federal bankruptcy law
and comparable provisions of state law. In such an event, a
court may void the deposit of funds with the trustee as a
preferential transfer and recover such funds for the benefit of
the bankruptcy estate and/or otherwise order that the funds be
made available to satisfy claims of other creditors. In
addition, under the fraudulent conveyance laws described above,
a court could also void the deposit of funds or take other
actions detrimental to you. The indenture will permit us to
finance the defeasance deposit by issuing secured debt that we
would not otherwise be permitted to incur under the indenture.
In the event that the payments used to defease the senior
subordinated notes are found to be a preferential transfer or a
fraudulent conveyance, any claims arising out of or relating to
the senior subordinated notes would be effectively subordinated
in right of payment to any of our secured debt, including the
secured debt incurred to finance the defeasance, to the extent
of the value of the assets securing that debt. Your ability to
recover on the senior subordinated notes after a defeasance or
discharge may be reduced or eliminated as a result of these
risks.
</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">You may not receive the level of dividends
    provided for in our dividend policy, which our board of
    directors is expected to adopt upon the closing of this
    offering, or any dividends at all.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our board of directors may, in its discretion,
amend or repeal the dividend policy it is expected to adopt upon
the closing of this offering. Our board of directors may
decrease the level of dividends provided for in this dividend
policy or entirely discontinue the payment of dividends. Future
dividends with respect to shares of our capital stock, if any,
will depend on, among other things, our results of operations,
cash requirements, financial condition, contractual
restrictions, business opportunities, provisions of applicable
law and other factors that our board of directors may deem
relevant. The Amended Credit Facility, the indenture governing
Buffets&#146; Senior Notes and the indenture governing the
senior subordinated notes will contain significant restrictions
on our ability to make dividend payments. In addition, certain
provisions of the Delaware General Corporation Law may limit our
ability to pay dividends.
</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 indenture governing the senior
    subordinated notes will permit us to pay a significant portion
    of our free cash flow to stockholders in the form of
    dividends.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture governing the senior subordinated
notes, the indenture governing Buffets&#146; Senior Notes and
the Amended Credit Facility will permit us to pay a significant
portion of our free cash flow to holders of our common stock,
including Class&nbsp;A common stock held as part of IDSs, and
Class&nbsp;B common stock in the form of dividends. Holders of
senior subordinated notes held separately from the IDSs may be
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">adversely affected by such provisions because any
amounts paid by us in the form of dividends will not be
available in the future to satisfy our obligations under the
senior subordinated notes.
</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 realizable value of our assets upon
    liquidation may be insufficient to satisfy claims.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2004, on a pro forma basis,
our total assets included intangible assets in the amount of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
representing
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of our total consolidated assets. The value of these intangible
assets will continue to depend significantly upon the continued
profitability of the respective brands. As a result, in the
event of a default on our senior subordinated notes or any
bankruptcy or dissolution of our company, the realizable value
of these assets may be substantially lower and may be
insufficient to satisfy the claims of our creditors.
</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">Subject to restrictions set forth in the
    indenture, we may defer the payment of interest to you for a
    significant period of time.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2009, we may, subject to restrictions set forth in the
indenture, defer interest payments on our senior subordinated
notes on one or more occasions for up to an aggregate period of
eight quarters. In addition,
after &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2009, we may, subject to certain restrictions, defer interest
payments on our senior subordinated notes on four occasions for
up to two consecutive quarters per each occasion. At the end of
any interest deferral period following &nbsp;&nbsp;, 2009, we
may not further defer interest unless and until all deferred
interest, including interest accrued on deferred interest, is
paid in full. Deferred interest will bear interest at the same
rate as the senior subordinated notes. For any interest deferred
during the first five years, we are not obligated to pay any
deferred interest
until &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2009; so you may be owed a substantial amount of deferred
interest that will not be due and payable until such time. For
any interest deferred
after &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2009, we are not obligated to pay all of the deferred interest
until &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2019, so you may be owed a substantial amount of deferred
interest that will not be due and payable until such time.
During any interest deferral period and so long as any deferred
interest or interest on deferred interest remains outstanding,
we will not be permitted to make any payment of dividends on our
capital stock.
</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">Deferral of interest payments would have
    adverse tax consequences for you and may adversely affect the
    trading price of the IDSs or the separately held senior
    subordinated notes.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If interest payments on the senior subordinated
notes are deferred, you will be required to recognize interest
income for U.S.&nbsp;federal income tax purposes on an economic
accrual basis in respect of interest payments on the senior
subordinated notes represented by the IDSs or the separately
held senior subordinated notes, as the case may be, held by you
before you receive any cash payment of this interest. In
addition, you will not receive the cash with respect to accrued
interest if you sell the IDSs or the separately held senior
subordinated notes, as the case may be, before the end of any
deferral period or before the record date relating to interest
payments that are to be paid. If interest is deferred, the IDSs
or the separately held senior subordinated notes may trade at a
price that does not fully reflect the value of accrued but
unpaid interest on the senior subordinated notes. In addition,
the fact that we may defer payments of interest on the senior
subordinated notes under certain circumstances may mean that the
market price for the IDSs or the separately held senior
subordinated notes may be more volatile than other securities
that do not have this term. See &#147;Material U.S.&nbsp;Federal
Income Tax Consequences&nbsp;&#151; Consequences to
U.S.&nbsp;Holders&nbsp;&#151; Senior Subordinated
Notes&nbsp;&#151; Deferral of Interest.&#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">Interest on the notes may not be deductible
    by us for U.S.&nbsp;federal income tax purposes, which could
    significantly reduce our future cash flow and impact our ability
    to make interest and dividend payments.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">While we believe that the senior subordinated
notes should be treated as debt for U.S.&nbsp;federal income tax
purposes, this position may not be sustained if challenged by
the Internal Revenue Service. If the senior subordinated notes
were treated as equity rather than debt for U.S.&nbsp;federal
income tax purposes, then the stated interest on the senior
subordinated notes would be treated as a dividend (to the extent
of our tax &#147;earnings and profits&#148;), and interest on
the senior subordinated notes would not be deductible by
</FONT>

<P align="center"><FONT size="2">30
</FONT>

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<DIV align="left">
<FONT size="2">us for U.S.&nbsp;federal income tax purposes. Our
inability to deduct interest on the senior subordinated notes
could materially increase our taxable income and, thus, our
U.S.&nbsp;federal and applicable state income tax liability.
This would reduce our after-tax cash flow, which may result in a
default under the Amended Credit Facility, and would materially
and adversely impact our ability to make interest and dividend
payments and may also affect our ability to continue as a going
concern. In the case of foreign holders, treatment of the notes
as equity for U.S.&nbsp;federal income tax purposes would
subject payments to such holders in respect of the notes to
withholding or estate taxes in the same manner as payments made
with regard to Class&nbsp;A common stock and could subject us to
liability for withholding taxes that were not collected on
payments of interest.
</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 allocation of the purchase price of the
    IDSs may not be respected.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The purchase price of each IDS must be allocated
for tax purposes between the share of Class&nbsp;A common stock
and senior subordinated note represented thereby in proportion
to their respective fair market values at the time of purchase.
We expect to report the initial fair market value of each share
of Class&nbsp;A common stock as
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
the initial fair market value of each of our senior subordinated
notes represented by an IDS as
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and,
by purchasing IDSs, you will agree to and be bound by such
allocation, assuming an initial public offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
IDS, which represents the mid-point of the range set forth on
the cover page of this prospectus. If this allocation is not
respected, it is possible that the senior subordinated notes
will be treated as having been issued with OID (if the
allocation to the senior subordinated notes were determined to
be too high) or amortizable bond premium (if the allocation to
the senior subordinated notes were determined to be too low).
You generally would have to include OID in income in advance of
the receipt of cash attributable to that income and would be
able to elect to amortize bond premium over the term of the
senior subordinated 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">Subsequent issuances of senior subordinated
    notes may cause you to recognize OID and may be treated as a
    taxable exchange by you.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture governing the senior subordinated
notes will provide that, in the event there is a subsequent
issuance of senior subordinated notes but having terms that are
otherwise identical (other than issuance date) to the senior
subordinated notes, including any issuance of IDSs in exchange
for shares of Class&nbsp;B common stock, but that are issued
with OID, each holder of IDSs or separately held senior
subordinated notes, as the case may be, agrees that, upon such
issuance and any issuance of senior subordinated notes
thereafter, a portion of such holder&#146;s senior subordinated
notes will be automatically exchanged for a portion of the
senior subordinated notes acquired by the holders of such
subsequently issued senior subordinated notes. Consequently,
immediately following such subsequent issuance and exchange,
without any action by such holder, each holder of senior
subordinated notes, held either as part of IDSs or separately,
will own senior subordinated notes of each separate issuance in
the same proportion as each other holder.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Regardless of whether the exchange is treated as
a taxable event, such exchange would result in holders having to
include OID in taxable income prior to the receipt of cash as
described below, and may result in other potentially adverse tax
consequences to holders. See &#147;Material U.S.&nbsp;Federal
Income Tax Consequences&nbsp;&#151; Consequences to
U.S.&nbsp;Holders&nbsp;&#151; Senior Subordinated
Notes&nbsp;&#151; Additional Issuances.&#148; In addition, the
potential amount of OID that would be required to be included in
taxable income by holders as a result of an automatic exchange
(as described below) is indefinite and may be a significant
amount, in part due to our ability to engage in numerous
subsequent issuances.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Following any subsequent issuance and exchange of
senior subordinated notes with OID, we (and our agents) will
report any OID on the subsequently issued senior subordinated
notes ratably among all holders of IDSs and separately held
senior subordinated notes, and each holder of IDSs and
separately held senior subordinated notes will, by purchasing
IDSs or separately held senior subordinated notes, agree to
report OID in a manner consistent with this approach. However,
the Internal Revenue Service may assert that any OID should be
reported only to the persons that initially acquired such
subsequently issued senior subordinated notes (and their
transferees) and thus may challenge the holders&#146; reporting
of OID on
</FONT>

<P align="center"><FONT size="2">31
</FONT>
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<DIV align="left">
<FONT size="2">their tax returns. In such case, the Internal
Revenue Service might further assert that, unless a holder can
establish that it is not a person that initially acquired such
subsequently issued senior subordinated notes (or a transferee
thereof), all of the senior subordinated notes held by such
holder would have OID. Any of these assertions by the Internal
Revenue Service could create significant uncertainties in the
pricing of IDSs and senior subordinated notes and could
adversely affect the market for IDSs and senior subordinated
notes.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For a discussion of these tax related risks, see
&#147;Material U.S.&nbsp;Federal Income Tax Consequences.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The aggregate stated principal amount of the
senior subordinated notes owned by each holder will not change
as a result of such subsequent issuance and automatic exchange.
However, under New York and federal bankruptcy law, holders of
subsequently issued senior subordinated notes having OID may not
be able to collect the portion of their principal face amount
that represents unamortized OID at the acceleration or filing
date in the event of an acceleration of the senior subordinated
notes or our bankruptcy prior to the maturity date of the senior
subordinated notes. As a result, an automatic exchange that
results in a holder receiving a senior subordinated note with
OID could have the effect of ultimately reducing the amount such
holder can recover from us in the event of an acceleration or
bankruptcy.
</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 have to establish a reserve for
    contingent tax liabilities in the future, which could adversely
    affect our ability to make dividend payments on the
    IDSs.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Even if the IRS does not challenge the tax
treatment of the senior subordinated notes, it is possible that
as a result of an alteration of facts relied upon at the time of
issuance of the notes, we will in the future need to change our
anticipated accounting treatment and establish a reserve for
contingent tax liabilities associated with the disallowance of
all or part of the interest deductions on the notes. If we were
required to maintain such a reserve, our ability to make
dividend payments could be materially impaired and the market
for the IDSs, Class&nbsp;A common stock and senior subordinated
notes could be adversely affected. In addition, any resulting
impact to our financial statements could lead to a default under
the Amended Credit Facility.
</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">Before this offering, there has not been a
    public market for our IDSs, shares of our common stock or the
    senior subordinated notes, which may cause the price of the
    IDSs, shares of our common stock and separate senior
    subordinated notes to fluctuate substantially and negatively
    affect the value of your investment.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">None of the IDSs, the shares of our common stock
or senior subordinated notes has a public market history. In
addition, there has not been an active market in the United
States for securities similar to the IDSs. An active trading
market for the IDSs, shares of our common stock or the senior
subordinated notes sold separately in this offering might not
develop in the future, which may cause the price of the IDSs,
shares of our common stock or the senior subordinated notes sold
separately in this offering to fluctuate substantially, and we
currently do not expect that an active trading market for the
shares of our common stock will develop until the senior
subordinated notes mature, if at all. If the senior subordinated
notes represented by your IDSs are redeemed or mature, the IDSs
will automatically separate and you will then hold the shares of
our common stock. We do not intend to list our senior
subordinated notes on any securities exchange.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The initial public offering price of the IDSs and
the senior subordinated notes sold separately in this offering
will be determined by negotiations among us, our principal
equity sponsor and the representatives of the underwriters and
may not be indicative of the market price of the IDSs and the
senior subordinated notes sold separately in this offering after
the offering. Factors such as quarterly variations in our
financial results and dividend payments, announcements by us or
others, developments affecting us, our clients and our
suppliers, general interest rate levels and general market
volatility could cause the market price of the IDSs and the
senior subordinated notes sold separately in this offering to
fluctuate significantly.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, to the extent a market develops for
our common stock or senior subordinated notes, or both, separate
from the IDSs, the price of your IDSs may be affected.
</FONT>

<P align="center"><FONT size="2">32
</FONT>

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<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 limited liquidity of the trading market
    for the senior subordinated notes sold separately may adversely
    affect the trading price of the separate senior subordinated
    notes.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are separately selling
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
aggregate principal amount of senior subordinated notes,
representing approximately 10% of the total outstanding senior
subordinated notes (including those senior subordinated notes
represented by IDSs). While the senior subordinated notes sold
separately are part of the same series of notes as, and are
identical to, the senior subordinated notes represented by the
IDSs, at the time of the issuance of the separate senior
subordinated notes, the senior subordinated notes represented by
the IDSs will not be separable for at least 45&nbsp;days and
will not be separately tradeable until separated. As a result,
the initial trading market for the senior subordinated notes
sold separately will be very limited. After the holders of the
IDSs are permitted to separate their IDSs, a sufficient number
of holders of IDSs may not separate their IDSs into shares of
our common stock and senior subordinated notes so that a sizable
and more liquid trading market for the senior subordinated notes
not represented by IDSs may not develop or may not develop in a
timely manner. Trading markets for debt securities have
generally treated debt securities issued in larger aggregate
principal amounts more favorably than similar securities issued
in smaller aggregate principal amounts because of the increased
liquidity created by potentially higher trading volumes
associated with larger debt issuances. Because approximately 10%
of the senior subordinated notes will initially be represented
by the IDSs, it is likely that the senior subordinated notes
sold separately will not trade at prices reflecting the
aggregate principal amount of the combined issuance of senior
subordinated notes included in the IDS offering and the separate
senior subordinated notes offering. Therefore, a liquid market
for the senior subordinated notes sold separately may not
develop or may not develop in a timely manner, which may
adversely affect the ability of the holders of the separate
senior subordinated notes to sell any of their separate senior
subordinated notes and the price at which these holders would be
able to sell any of the senior subordinated notes sold
separately.
</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">If interest rates rise, the trading value
    of our IDSs and the senior subordinated notes sold separately in
    this offering may decline.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If interest rates rise or should the threat of
rising interest rates develop, debt markets may be adversely
affected. As a result, the trading value of our IDSs and senior
subordinated notes may decline.
</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">Future sales or the possibility of future
    sales of a substantial amount of IDSs, shares of our common
    stock or the senior subordinated notes, together with the future
    conversion of our Class&nbsp;B common stock into IDSs, may
    depress the price of the IDSs, shares of our common stock and
    the senior subordinated notes.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Future sales or the availability for sale of
substantial amounts of IDSs or shares of our common stock or a
significant principal amount of the senior subordinated notes in
the public market could adversely affect the prevailing market
price of the IDSs, shares of our common stock and the senior
subordinated notes and could impair our ability to raise capital
through future sales of our securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After consummation of the Transactions, we
anticipate that our existing stockholders will
own &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of our Class&nbsp;B common stock
(or &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs,
if the underwriters&#146; over-allotment option is exercised in
full). Subject to satisfaction of the Conversion Conditions,
such shares of our Class&nbsp;B common stock will initially be
convertible
into &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may issue shares of our common stock and
senior subordinated notes, which will be in the form of IDSs, or
other securities from time to time as consideration for future
acquisitions and investments. In the event any such acquisition
or investment is significant, the number of shares of our common
stock and the aggregate principal amount of senior subordinated
notes, which may be in the form of IDSs, or the number or
aggregate principal amount, as the case may be, of other
securities that we may issue may in turn be significant. In
addition, we may also grant registration rights covering those
IDSs, shares of our common stock, senior subordinated notes or
other securities in connection with any such acquisitions and
investments.
</FONT>

<P align="center"><FONT size="2">33
</FONT>

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<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 amended certificate of incorporation
    and by-laws and several other factors could limit another
    party&#146;s ability to acquire us and deprive our investors of
    the opportunity to obtain a takeover premium for their
    securities.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Provisions contained in our amended and restated
certificate of incorporation and by-laws could make it more
difficult for a third party to acquire us, even if doing so
might be beneficial to our stockholders. Provisions of our
amended and restated certificate of incorporation and by-laws
impose various procedural and other requirements that make it
more difficult for stockholders to effect some corporate
actions. For example, our amended and restated certificate of
incorporation authorizes our board to determine the rights,
preferences, privileges and restrictions of unissued series of
preferred stock, without any vote or action by our stockholders.
Thus, our board can authorize and issue shares of preferred
stock with voting or conversion rights that could adversely
affect the voting or other rights of holders of our common
stock. These rights may have the effect of delaying or deterring
a change of control of our company, and could limit the price
that investors might be willing to pay in the future for shares
of our common stock. In addition, a change of control of our
company may be delayed or deferred as a result of our having
three classes of directors. We are also subject to
Section&nbsp;203 of the Delaware General Corporation Law, which
prohibits us from engaging in a &#147;business combination&#148;
with an &#147;interested stockholder&#148; for a three-year
period following the time that this stockholder becomes an
interested stockholder, unless the business combination is
approved in a prescribed manner. In addition, our amended and
restated certificate of incorporation provides that for such
time as Caxton-Iseman Capital together with its affiliates and
related parties beneficially own at least 10% or 5% of our
equity, it will be entitled to nominate two of our directors or
one director, respectively. These provisions might make an
unsolicited takeover more difficult or less likely to occur or
might prevent such a takeover, even though such a takeover might
offer our stockholders the opportunity to sell their stock at a
price above the prevailing market price and might be favored by
a majority of our stockholders.
</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">You will be immediately diluted by
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
    share of common stock if you purchase&nbsp;IDSs in this
    offering.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If you purchase&nbsp;IDSs in this offering, based
on the book value of the assets and liabilities reflected on our
balance sheet, you will experience an immediate dilution of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share of common stock represented by the IDSs, which exceeds the
entire price allocated to each share of common stock represented
by the IDSs in this offering, because there will be a net
tangible book deficit for each share of common stock outstanding
immediately after this offering. Our pro forma net tangible book
deficiency as of June&nbsp;30, 2004, after giving effect to this
offering, was approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
or
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share of Class&nbsp;A common stock.
</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 be able to repurchase the senior
    subordinated notes upon a change of control.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon the occurrence of specific kinds of change
of control events, we will be required to offer to repurchase
the outstanding senior subordinated notes at 101% of their
principal amount at the date of repurchase unless such senior
subordinated notes have been previously called for redemption.
We may not have sufficient financial resources to purchase all
of the senior subordinated notes that are tendered upon a change
of control offer. Furthermore, the Amended Credit Facility, with
certain limited exceptions, will prohibit the repurchase or
redemption of the senior subordinated notes before their stated
maturity. Consequently, lenders thereunder may have the right to
prohibit any such purchase or redemption, in which event we will
seek to obtain waivers from the required lenders. We may not be
able to obtain such waivers or refinance our indebtedness on
terms acceptable to us, or at all. Buffets&#146; Senior Notes
will have similar terms restricting the repurchase of the senior
subordinated notes while Buffets&#146; Senior Notes remain
outstanding. Finally, the occurrence of a change of control
could also constitute an event of default under the Amended
Credit Facility, which could result in the acceleration of all
amounts due thereunder. See &#147;Description of Senior
Subordinated Notes&nbsp;&#151; Change of Control.&#148;
</FONT>

<P align="center"><FONT size="2">34
</FONT>

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<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 be able to refinance the Amended
    Credit Facility or Buffets&#146; Senior Notes at maturity on
    favorable terms or at all.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The amended and restated revolving credit
facility and the senior secured term loan facility included in
the Amended Credit Facility will mature in full in 2009 and
2011, respectively and Buffets&#146; Senior Notes will mature in
2014. We may not be able to renew or refinance the Amended
Credit Facility or Buffets&#146; Senior Notes, or if renewed or
refinanced, the renewal or refinancing may occur on less
favorable terms. In particular, some of the terms of the senior
subordinated notes that may be viewed as favorable to the senior
lenders, such as our ability to defer interest and acceleration
forbearance periods, become less favorable in 2009, which may
materially adversely affect our ability to refinance or renew
the Amended Credit Facility or Buffets&#146; Senior Notes beyond
such date. If we are unable to refinance or renew the Amended
Credit Facility or Buffets&#146; Senior Notes, our failure to
repay all amounts due on the maturity date would cause a default
under the Amended Credit Facility and Buffets&#146; Senior
Notes. In addition, our interest expense may increase
significantly if we refinance the Amended Credit Facility or
Buffets&#146; Senior Notes on terms that are less favorable to
us than the terms of the Amended Credit Facility or
Buffets&#146; Senior Notes, respectively.
</FONT>

<P align="left">
<B><FONT size="2">Risks Relating to Our Business</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></TD>
    <TD>
    <B><I><FONT size="2">Our core buffet restaurants are a maturing
    restaurant concept and face intense competition.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our restaurants operate in a highly competitive
industry comprising a large number of restaurants, including
national and regional restaurant chains and franchised
restaurant operations, as well as locally-owned, independent
restaurants. Price, restaurant location, food quality, service
and attractiveness of facilities are important aspects of
competition, and the competitive environment is often affected
by factors beyond a particular restaurant management&#146;s
control, including changes in the public&#146;s taste and eating
habits, population and traffic patterns and economic conditions.
Many of our competitors have greater financial resources than we
have and there are few non-economic barriers to entry.
Therefore, new competitors may emerge at any time. We cannot
assure you that we will be able to compete successfully against
our competitors in the future or that competition will not have
a material adverse effect on our operations or earnings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have been operating our core buffet restaurant
concept for 20&nbsp;years, and our restaurant locations have a
median age of approximately 10&nbsp;years. As a result, we are
exposed to vulnerabilities associated with being a mature
concept. These include vulnerability to innovations by
competitors and out-positioning in markets where the
demographics or customer preferences have changed. Mature units
require greater expenditures for repair, maintenance,
refurbishments and re-concepting, and we will be required to
continue making such expenditures in the future in order to
preserve traffic at many of our restaurants. We cannot assure
you, however, that these expenditures, particularly for
remodeling and refurbishing, will be successful in preserving or
building guest counts, as proved to be the case with a number of
units recently upgraded as part of a two year re-imaging program.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are required to respond to changing consumer
preferences and dining frequency. Our profits are dependent upon
discretionary spending by consumers, which is markedly
influenced by variations in the economy. Our average weekly
sales declined 2.0% during fiscal 2003 due in large part to weak
economic conditions. Furthermore, if our competitors in the
casual dining, mid-scale and quick-service segments respond to
economic changes through menu engineering or by adopting
discount pricing strategies, it could have the effect of drawing
customers away from companies such as ours that do not routinely
engage in discount pricing, thereby reducing sales and
pressuring margins. Because certain elements of our cost
structure are fixed in nature, particularly over shorter time
horizons, changes in marginal sales volume can have a more
significant impact on our profitability than for a business
possessing a more variable cost structure.
</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 dependent on attracting and
    retaining qualified employees while controlling labor
    costs.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We operate in the service sector and are
therefore extremely dependent upon the availability of qualified
restaurant personnel. Availability of staff varies widely from
location to location. If restaurant
</FONT>

<P align="center"><FONT size="2">35
</FONT>

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<DIV align="left">
<FONT size="2">management and staff turnover trends increase, we
would suffer higher direct costs associated with recruiting and
retaining replacement personnel. Moreover, we could suffer from
significant indirect costs, including restaurant disruptions due
to management changeover, increased above-store management
staffing and potential delays in new store openings due to staff
shortages. Competition for qualified employees exerts pressure
on wages paid to attract qualified personnel, resulting in
higher labor costs, together with greater expense to recruit and
train them.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Many of our employees are hourly workers whose
wages may be impacted by an increase in the federal or state
minimum wage. Proposals have been made at federal and state
levels to increase minimum wage levels. An increase in the
minimum wage may create pressure to increase the pay scale for
our employees. A shortage in the labor pool or other general
inflationary pressures or changes could also increase our labor
costs. Furthermore, the operation of buffet-style restaurants is
materially different from other restaurant concepts.
Consequently, the retention of executive management familiar
with our core buffet business is important to our continuing
success. The departure of one or more key operations executives
or the departure of multiple executives in a short time period
could have an adverse impact on our business. Our former
Executive Vice President of Purchasing separated from the
company in 2004. We are currently considering the addition of
one additional position to our executive management group.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our workers&#146; compensation and employee
benefit expenses are disproportionately concentrated in states
with adverse legislative climates. Our highest per-employee
workers&#146; compensation insurance costs are in the State of
California, where we retain a large employment presence.
California also enacted legislation in October 2003 that would
require large employers to provide health insurance or
equivalent funding for workers who have traditionally not been
covered by employer health plans. While this law is currently
being challenged, other states have proposed similar
legislation. Other state and federal mandates, such as
compulsory paid absences, increases in overtime wages and
unemployment tax rates, stricter citizenship requirements and
revisions in the tax treatment of employee gratuities, could
also adversely affect our business. Any increases in labor costs
could have a material adverse effect on our results of
operations and could decrease our profitability and cash
available to service our debt obligations, if we were unable to
compensate for such increased labor costs by raising the prices
we charge our customers or realizing additional operational
efficiencies.
</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 dependent on timely delivery of
    fresh ingredients by our suppliers.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our restaurant operations are dependent on timely
deliveries of fresh ingredients, including fresh produce, dairy
products and meat. The cost, availability and quality of the
ingredients we use to prepare our food are subject to a range of
factors, many of which are beyond our control. Fluctuations in
weather, supply and demand and economic and political conditions
could adversely affect the cost, availability and quality of our
ingredients. Historically, when operating expenses increased due
to inflation or increases in food costs, we recovered increased
costs by increasing our menu prices. However, we may not be able
to recover increased costs in the future because competition may
limit or prohibit such future increases. If our food quality
declines due to the lack of, or lower quality of, our
ingredients or due to interruptions in the flow of fresh
ingredients and similar factors, customer traffic may decline
and negatively affect our restaurants&#146; results. We rely
exclusively on third-party distributors and suppliers for such
deliveries. The number of companies capable of servicing our
distribution needs on a national basis has declined over time,
reducing our bargaining leverage and increasing vulnerability to
distributor interruptions.
</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 restaurant sales are subject to
    seasonality and major world events.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our restaurant sales volume fluctuates
seasonally. Overall, restaurant sales are generally higher in
the summer months and lower in the winter months. Positive or
negative trends in weather conditions can have a strong
influence on our business. This effect is heightened because
many of our restaurants are in geographic areas that experience
extremes in weather, including severe winter conditions and
tropical storm patterns. Additionally, major world events may
adversely affect our business.
</FONT>

<P align="center"><FONT size="2">36
</FONT>

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<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 face risks associated with government
    regulations.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to wage and benefit regulatory risks,
we are subject to other extensive government regulation at a
federal, state and local level. These include, but are not
limited to, regulations relating to the sale of food in all of
our restaurants and of alcoholic beverages in our Tahoe
Joe&#146;s Famous Steakhouse restaurants. We are required to
obtain and maintain governmental licenses, permits and
approvals. Difficulty or failure in obtaining or maintaining
them in the future could result in delaying or canceling the
opening of new restaurants or the closing of current ones. Local
authorities may suspend or deny renewal of our governmental
licenses if they determine that our operations do not meet the
standards for initial grant or renewal. This risk would be even
higher if there were a major change in the licensing
requirements affecting our types of restaurants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Federal Americans with Disabilities Act
prohibits discrimination on the basis of disability in public
accommodations and employment. Mandated modifications to our
facilities in the future to make different accommodations for
disabled persons could result in material, unanticipated expense.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Application of state &#147;Dram Shop&#148;
statutes, which generally provide a person injured by an
intoxicated patron the right to recover damages from an
establishment that wrongfully served alcoholic beverages to the
intoxicated person, to our operations, or liabilities otherwise
associated with liquor service in our Tahoe Joe&#146;s Famous
Steakhouse restaurants, could negatively affect our financial
condition if not otherwise insured under our general liability
insurance policy.
</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">Negative publicity relating to one of our
    restaurants, including our franchised restaurants, could reduce
    sales at some or all of our other restaurants.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are, from time to time, faced with negative
publicity relating to food quality, restaurant facilities,
health inspection scores, employee relationships or other
matters at one of our restaurants or those of our franchisees.
Adverse publicity may negatively affect us, regardless of
whether the allegations are valid or whether we are liable. In
addition, the negative impact of adverse publicity relating to
one restaurant may extend beyond the restaurant involved to
affect some or all of our other restaurants. If a franchised
restaurant fails to meet our franchise operating standards, our
own restaurants could be adversely affected due to customer
confusion or negative publicity. A similar risk exists with
respect to totally unrelated food service businesses, if
customers mistakenly associate such unrelated businesses with
our own 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">Food-borne illness incidents could result
    in liability to us and could reduce our restaurant
    sales.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We cannot guarantee that our internal controls
and training will be fully effective in preventing all
food-borne illnesses. Furthermore, our reliance on third-party
food processors makes it difficult to monitor food safety
compliance and increases the risk that food-borne illness would
affect multiple locations rather than single restaurants. Some
food-borne illness incidents could be caused by third-party food
suppliers and transporters outside of our control. New illnesses
resistant to our current precautions may develop in the future,
or diseases with long incubation periods could arise, such as
bovine spongiform encephalopathy (&#147;BSE&#148;), sometimes
referred to as &#147;mad cow disease,&#148; that could give rise
to claims or allegations on a retroactive basis. In addition,
the levels of chemicals or other contaminants that are currently
considered safe in certain foods may be regulated more
restrictively in the future or become the subject of public
concern.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The reach of food-related public health concerns
can be considerable given the attention given these matters by
the media. Local public health developments could have a
national adverse impact on our sales, whether or not
specifically attributable to our restaurants or those of our
franchisees or competitors.
</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">Any negative development relating to our
    self-service food service approach would have a material adverse
    impact on our primary business.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our buffet restaurants utilize a service format
that is heavily dependent upon self-service by our customers.
Food tampering by customers or other events affecting the
self-service format could cause
</FONT>

<P align="center"><FONT size="2">37
</FONT>

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<DIV align="left">
<FONT size="2">regulatory changes or changes in our business
pattern or customer perception. Any development that would
materially impede or prohibit our continued use of a
self-service food service approach, or reduce the appeal of
self-service to our guests, would have a material adverse impact
on our primary business.
</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">We face risks associated with environmental
    laws.</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,
regulations and ordinances that govern activities or operations
that may have adverse environmental effects, such as discharges
to air and water, as well as handling and disposal practices for
solid and hazardous wastes. These may impose liability for the
costs of cleaning up, and damage resulting from, sites of past
spills, disposals or other releases of hazardous materials, both
from governmental and private claimants. We could incur such
liabilities regardless of whether we lease or own the
restaurants or land in question and regardless of whether such
environmental conditions were created by us or by a prior owner
or tenant. We cannot assure you that environmental conditions
relating to our prior, existing or future restaurants or
restaurant sites will not have a material adverse affect 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">We face risks because of the number of
    restaurants that we lease.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our success depends in part on our ability to
secure leases in desired locations at rental rates we believe to
be reasonable. We currently lease all of our restaurants located
in shopping centers and malls, and we lease the land for all but
one of our freestanding restaurants. By December 2007,
approximately 85 of our current leases will have expiring base
lease terms and be subject to renewal consideration. Each lease
agreement provides that the lessor may terminate the lease for a
number of reasons, including our default in any payment of rent
or taxes or our breach of any covenant or agreement in the
lease. Termination of any of our leases could harm our results
of operations and, as with a default under any of our
indebtedness, could have a material adverse impact on our
liquidity. Although we believe that we will be able to renew the
existing leases that we wish to extend, we cannot assure you
that we will succeed in obtaining extensions in the future at
rental rates that we believe to be reasonable or at all.
Moreover, if some locations should prove to be unprofitable, we
could remain obligated for lease payments even if we decided to
withdraw from those locations. See &#147;Business&nbsp;&#151;
Property.&#148; We will incur special charges relating to the
closing of such restaurants, including lease termination costs.
Impairment charges and other special charges will reduce our
profits.
</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 be able to protect our
    trademarks and other proprietary rights.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that our trademarks and other
proprietary rights are important to our success and our
competitive position. Accordingly, we devote substantial
resources to the establishment and protection of our trademarks
and proprietary rights. However, the actions taken by us may be
inadequate to prevent imitation of our brands, proprietary
rights and concepts by others, which may thereby dilute our
brands in the marketplace or diminish the value of such
proprietary rights, or to prevent others from claiming
violations of their trademarks and proprietary rights by us. In
addition, others may assert rights in our trademarks and other
proprietary rights. Our exclusive rights to our trademarks are
subject to the common law rights of any other person who began
using the trademark (or a confusingly similar mark) prior to
both the date of our registration and our first use of such
trademarks in the relevant territory. For example, because of
the common law rights of such a preexisting restaurant in
portions of Colorado and Wyoming, our restaurants in those
states use the name &#147;Country Buffet.&#148; We cannot assure
you that third parties will not assert claims against our
intellectual property or that we will be able to successfully
resolve such claims. Future actions by third parties may
diminish the strength of our restaurant concepts&#146;
trademarks or other proprietary rights and decrease our
competitive strength and performance. We could also incur
substantial costs to defend or pursue legal actions relating to
the use of our intellectual property, which could have a
material adverse affect on our business, results of operation or
financial condition.
</FONT>

<P align="center"><FONT size="2">38
</FONT>

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<DIV align="left">
<A name='105'></A>
</DIV>

<!-- link1 "FORWARD-LOOKING STATEMENTS" -->

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This prospectus, particularly the sections
entitled &#147;Prospectus 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; includes both historical and
forward-looking statements. We have based these forward-looking
statements on information available to us on the date of this
prospectus and our current expectations and projections about
future results. When we use words in this prospectus, such as
&#147;anticipate,&#148; &#147;intend,&#148; &#147;plan,&#148;
&#147;believe,&#148; &#147;estimate,&#148; &#147;expect,&#148;
&#147;project,&#148; &#147;plan&#148; and variations of such
words or similar expressions, we do so to identify
forward-looking statements. Our actual results may differ
materially from those anticipated in these forward-looking
statements. These forward-looking statements are affected by
risks, uncertainties and assumptions that we make, including,
among other things, the factors that are described in &#147;Risk
Factors&#148; and:
</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 substantial leverage, including the inability
    to generate the necessary amount of cash to service our existing
    debt and the incurrence of substantial indebtedness in the
    future,
    </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">restrictions contained in our debt agreements,
    </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">interest rate fluctuations,
    </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">future cash flows,
    </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">dependence on key employees,
    </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">general business 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">changes in business strategy, development plans
    or cost savings plans,
    </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">general economic conditions which may impact the
    level of consumer spending,
    </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">highly competitive nature of the restaurant
    industry,
    </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 consumer preferences,
    </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 seasonality of our business and the impact of
    weather 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">adverse publicity and litigation,
    </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">consumer perceptions of food safety,
    </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 continued ability to find suitable restaurant
    locations and to finance new restaurant development,
    </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">labor and benefit costs,
    </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">future regulatory actions and conditions in our
    operating areas,&nbsp;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 factors over which we have little or no
    control.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You should keep in mind that any forward-looking
statement made by us in this prospectus, or elsewhere, speaks
only as of the date on which we make it. New risks and
uncertainties come up from time to time, and it is impossible
for us to predict these events or how they may affect us. We
have no duty to, and do not intend to, update or revise the
forward-looking statements in this prospectus after the date of
this prospectus. In light of these risks and uncertainties, you
should keep in mind that any forward-looking statement made in
this prospectus or elsewhere might not occur.
</FONT>

<P align="center"><FONT size="2">39
</FONT>

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<DIV align="left">
<A name='106'></A>
</DIV>

<!-- link1 "USE OF PROCEEDS" -->

<P align="center">
<B><FONT size="2">USE OF PROCEEDS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The table below sets forth our estimate of the
sources and uses of funds required to effect the Transactions,
assuming the Transactions all occurred as of June&nbsp;30, 2004.
See &#147;Prospectus Summary&nbsp;&#151; The Transactions.&#148;
The estimated sources and uses are based on an assumed initial
public offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
IDS (which represents the mid-point of the range set forth on
the cover page of this prospectus) and the sale of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
aggregate principal amount of our senior subordinated notes that
are being sold separately from the IDSs. Actual amounts may vary
from the amounts shown below.
</FONT>

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

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="75%"><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="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Sources</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>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(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="2">Cash on hand
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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">Amended Credit Facility
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2">%&nbsp;Senior Notes
    offered by Buffets
    </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>
</TR>

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

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Senior subordinated notes offered hereby
    separately from the IDSs
    </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>
</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>

</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 sources
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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>

</TR>

</TABLE>
</CENTER>

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

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="75%"><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="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Uses</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>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(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="2">Cash to pre-fund capital expenditures program
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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">Repayment of Existing Credit Facility(1)
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repurchase of Buffets
    11&nbsp;1/4%&nbsp;Notes(2)(3)
    </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>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repurchase or redemption of our
    13&nbsp;7/8%&nbsp;Notes(2)(4)
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Early redemption or premium costs and payment of
    interest
    </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>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repurchase of existing common stock, warrants and
    options
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Transaction fees and expenses
    </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>
</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>

</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 uses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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>

</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">The Existing Credit Facility consists of a
    revolving loan facility of $30.0&nbsp;million, a letter of
    credit facility of $20.0&nbsp;million, a synthetic letter of
    credit facility of $30.0&nbsp;million, and term loan of
    $230.0&nbsp;million. Borrowings under the term loan facility
    bear interest, at Buffets&#146; option, at either adjusted LIBOR
    plus 3.50% or at the alternate base rate plus 2.50%. Borrowings
    under the revolving loan facility bear interest, at
    Buffets&#146; option, at either adjusted LIBOR plus 3.25% or at
    the alternate base rate plus 2.25%, subject to a leveraged-based
    pricing grid. Outstanding letters of credit under the revolving
    loan facility will be subject to a per annum fee equal to 3.25%,
    subject to a leveraged-based pricing grid. The alternate base
    rate is the higher of Credit Suisse First Boston&#146;s prime
    rate and the federal funds effective rate plus 0.5%. The term
    loan and the synthetic letter of credit facility will mature on
    June&nbsp;28, 2009, and the amounts due under the term loan will
    become due and payable in equal quarterly installments in an
    annual amount equal to 1% of the term loan during each of the
    first 4&nbsp;1/2&nbsp;years of the loan, with the balance
    payable in equal quarterly installments during the last year of
    the loan. The revolving facility and the letter of credit
    facility will mature on June&nbsp;28, 2007.
    </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">We have assumed that 100% of Buffets&#146;
    11&nbsp;1/4%&nbsp;Notes and our 13&nbsp;7/8%&nbsp;Notes will be
    tendered and repurchased in the tender offers or redeemed at a
    cash purchase price of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of
    aggregate principal amount
    and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
    of accreted value, respectively.
    </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">On June&nbsp;28, 2002, Buffets issued
    11&nbsp;1/4%&nbsp;senior subordinated notes in the principal
    amount of $230.0&nbsp;million due July&nbsp;15, 2010.
    Buffets&#146; 11&nbsp;1/4%&nbsp;Notes were issued at a price
    equal to 96.181% of the principal amount, resulting in an
    effective yield of 12% to the initial principal amount. Interest
    is payable semi-annually on January&nbsp;15 and July&nbsp;15 of
    each year through July&nbsp;15, 2010.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">40
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<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">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">On May&nbsp;18, 2004, we issued $132&nbsp;million
    aggregate principal amount at maturity of our
    13&nbsp;7/8%&nbsp;senior discount notes due December&nbsp;15,
    2010. Our 13&nbsp;7/8%&nbsp;Notes were issued at a discount to
    their aggregate principal amount at maturity. Prior to
    July&nbsp;31, 2008, interest will accrue on our
    13&nbsp;7/8%&nbsp;Notes in the form of an increase in the
    accreted value of those notes. The accreted value of each note
    will increase until July&nbsp;31, 2008 at a rate of
    13&nbsp;7/8%&nbsp;per annum. After this date, cash interest on
    the notes will accrue and be payable on January&nbsp;31 and
    July&nbsp;31 of each year at a rate of 13&nbsp;7/8%&nbsp;per
    annum. If we fail to meet certain leverage ratio tests on our
    about July&nbsp;31, 2006 or July&nbsp;31, 2008, additional
    interest will accrue on the notes from that date at a rate of
    1%&nbsp;per annum, up to a maximum of 2%&nbsp;per annum.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">41
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='107'></A>
</DIV>

<!-- link1 "DIVIDEND POLICY AND RESTRICTIONS" -->

<P align="center">
<B><FONT size="2">DIVIDEND POLICY AND RESTRICTIONS</FONT></B>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon completion of this offering, our board of
directors will adopt a dividend policy which reflects a basic
judgment that our stockholders would be better served if we
distributed our excess cash to them instead of retaining it in
our business. Under this policy, cash generated by our business
in excess of operating needs, interest and principal payments on
indebtedness, and capital expenditures sufficient to maintain
our restaurants and other assets would in general be distributed
as regular quarterly dividends to the holders of our
Class&nbsp;A common stock and Class&nbsp;B common stock rather
than retained by us and used to finance growth opportunities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As described more fully below, you may not
receive any dividends as a result of the following factors:
</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">nothing requires us to pay dividends;
    </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">while our current dividend policy contemplates
    the distribution of our excess cash, this policy could be
    modified or revoked at any time;
    </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">even if our dividend policy were not modified or
    revoked, the actual amount of dividends distributed under the
    policy and the decision to make any distribution is entirely at
    the discretion of our board of directors;
    </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 amount of dividends distributed is subject to
    debt covenant restrictions under our indenture, the indenture
    relating to Buffets&#146; Senior Notes and the Amended Credit
    Facility;
    </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 amount of dividends distributed is subject to
    state law restrictions;
    </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 stockholders will have no contractual or
    other legal right to dividends;&nbsp;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">we may not have enough cash to pay dividends due
    to changes to our operating earnings, working capital
    requirements and anticipated cash needs.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We currently intend to pay an initial dividend
under this policy
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;with
respect to the period commencing on the completion of this
offering and
ending &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;based
on a quarterly dividend level of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share of Class&nbsp;A common stock and Class&nbsp;B common
stock, respectively, and to continue to pay quarterly dividends
at these rates for the remainder of the first full year
following the closing of this offering. In respect of the first
year following the closing of this offering, this would be
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share, or
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
in the aggregate, on the Class&nbsp;A common stock and
Class&nbsp;B common stock, respectively. In determining our
expected initial dividend levels, we reviewed and analyzed,
among other things, our operating and financial performance in
recent years, the anticipated cash requirements associated with
our new capital structure, our anticipated capital expenditure
requirements, our expected other cash needs, the terms of our
debt instruments, including Buffets&#146; Senior Notes and the
Amended Credit Facility, other potential sources of liquidity,
including the
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
in cash on hand available for capital expenditures and various
other aspects of our business.
</FONT>

<P align="left">
<B><FONT size="2">Minimum Covenant EBITDA</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our management has prepared the estimated
financial information set forth below to present the estimated
cash available to pay dividends based on estimated minimum
Covenant EBITDA that we believe will be needed in order to fund
dividends at the levels described above. The accompanying
estimated financial information was not prepared with a view
toward complying with the Public Company Accounting Oversight
Board guidelines with respect to prospective financial
information, but, in the view of our management, was prepared on
a reasonable basis, reflects the best currently available
estimates, judgments and beliefs, and presents, to the best of
management&#146;s knowledge and belief, our expected course of
action and our expected future financial performance. However,
this information is not fact and should not be relied upon as
being necessarily indicative of future results, and readers of
this prospectus are cautioned not to place undue reliance on the
estimated financial information.
</FONT>

<P align="center"><FONT size="2">42
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Neither our independent registered public
accounting firm, nor any other independent registered public
accounting firm, has compiled, examined, or performed any
procedures with respect to the estimated financial information
contained herein, nor have they expressed any opinion or any
other form of assurance on such information or its
achievability, and assume no responsibility for, and disclaim
any association with, the estimated financial information.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The assumptions and estimates underlying the
estimated financial information below are inherently uncertain
and, though considered reasonable by our management as of the
date of its preparation, are subject to a wide variety of
significant business, economic, and competitive risks and
uncertainties. See &#147;Risk Factors.&#148; Accordingly, there
can be no assurance that the estimated financial information is
indicative of our future performance or that the actual results
will not differ materially from the estimated financial
information presented below.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that, in order to fund dividends to
holders of our Class&nbsp;A common stock and Class&nbsp;B common
stock at the levels described above from cash generated by our
business, our minimum Covenant EBITDA for the year following
this offering would need to be at least
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.
As described under &#147;&#151;&nbsp;Assumptions and
Considerations&#148; below, we believe that our minimum Covenant
EBITDA for the year following the closing of this offering will
be at least
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.
We have also determined that if our Covenant EBITDA for such
period were at or above this level, we would be permitted to pay
dividends at these levels under the restricted payment covenants
in the Amended Credit Facility (so long as the other conditions
contained therein and described below are met), the indenture
relating to Buffets&#146; Senior Notes and the indenture
relating to our senior subordinated notes. The following table
sets forth our calculation that
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of Covenant EBITDA would be sufficient to fund dividends at the
above levels and would satisfy such restricted payment covenants
(so long as the other conditions contained therein and described
below are met).
</FONT>

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

<TR>
    <TD width="78%"><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="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Estimated Cash Available to Pay Dividends Based</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">on Estimated Minimum Covenant EBITDA</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</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>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Estimated minimum Covenant EBITDA(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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">Less:
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Estimated maintenance capital expenditures(2)
    </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>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Estimated cash interest expense on senior
    subordinated notes(3)
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Estimated cash interest expense on Amended Credit
    Facility(4)
    </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>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Estimated cash interest expense on Buffets&#146;
    Senior Notes(5)
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Estimated cash income taxes(6)
    </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>
</TR>

<TR>
    <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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Estimated cash available to pay dividends on our
    outstanding common stock(7)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</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><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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Estimated consolidated coverage ratio derived
    from the above(8)
    </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">x</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">43
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table illustrates, for fiscal 2004,
the amount of excess cash that would have been available for
distributions to our stockholders, assuming, in each case, that
the offering had been consummated at the beginning of such
period, subject to the assumptions described in such table.
</FONT>

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

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="76%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><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">Fiscal Year</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Pro Forma Excess Cash for the Fiscal Year Ended June&nbsp;30, 2004</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</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>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(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="2">Cash flow provided by operating activities
    </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">50,490</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">Adjustments to reconcile cash flow provided by
    operating activities to Covenant EBITDA:
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization of debt issuance costs
    </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">(1,370</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Write off of debt issuance costs
    </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">(4,201</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">Accretion of original issue discount
    </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">(2,049</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Changes in assets and liabilities
    </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">7,565</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">Interest expense, 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">39,185</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">Income tax expense, current provision
    </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">448</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">Adjustment for sale-leaseback transactions(9)
    </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">(416</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other charges(10)
    </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">1,667</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">Management fees(11)
    </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">1,884</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">Loss related to refinancing(12)
    </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">4,776</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">Financing-related compensation expenses(13)
    </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">2,240</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">Covenant EBITDA
    </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">100,219</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">Estimated cash interest expense on senior
    subordinated notes(3)
    </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>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Estimated cash interest expense on Amended Credit
    Facility(4)
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Estimated cash interest expense on Buffets&#146;
    Senior Notes(5)
    </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>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital expenditures(2)
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash interest expense on revolving loan portion
    of Amended Credit Facility(4)
    </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>
</TR>

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

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Excess cash that would have been available to pay
    dividends
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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>

</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="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)</FONT></TD>
    <TD align="left">
    <FONT size="2">In comparing our estimated minimum Covenant
    EBITDA to our historical Covenant EBITDA, our historical
    Covenant EBITDA does not include approximately
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    in incremental ongoing expenses associated with being a public
    IDS issuer that are incremental to our existing expense as a
    public filer.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">(2)</FONT></TD>
    <TD align="left">
    <FONT size="2">Our total capital expenditures were approximately
    $33.0&nbsp;million for fiscal 2004 comprising $5.7&nbsp;million
    in maintenance capital expenditures, $8.8&nbsp;million in growth
    capital expenditures (for new store openings and relocations),
    $18.2&nbsp;million in re-image capital expenditures associated
    with approximately 50 restaurants, and $0.3&nbsp;million for
    corporate and systems capital expenditures. We will have
    approximately
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    in cash on hand available for capital expenditures and other
    aspects of our business. For a more detailed discussion of our
    capital expenditures, see &#147;Management&#146;s Discussion and
    Analysis of Financial Condition and Results of
    Operations&nbsp;&#151; Liquidity and Capital Resources.&#148;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">(3)</FONT></TD>
    <TD align="left">
    <FONT size="2">Reflects our anticipated cash interest expense
    under our new capital structure. Accordingly, it
    assumes &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
    interest on
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    of senior subordinated notes represented by IDSs and
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    on the separate senior subordinated notes not represented by
    IDSs.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">(4)</FONT></TD>
    <TD align="left">
    <FONT size="2">Reflects our anticipated cash interest expense
    under our new capital structure. Accordingly, it assumes
    interest at current rates, estimated
    as &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
    average interest on
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    of term loan borrowings under the Amended Credit
    Facility, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
    interest on the undrawn portion of the
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">44
</FONT>

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

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

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD align="left">
    <FONT size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    revolving credit facility,
    and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
    interest on the letter of credit facility and synthetic letter
    of credit facility of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">(5)</FONT></TD>
    <TD align="left">
    <FONT size="2">Reflects our anticipated cash interest expense
    under our new capital structure. Accordingly, it
    assumes &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
    interest on
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    of Buffets&#146; Senior Notes.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">(6)</FONT></TD>
    <TD align="left">
    <FONT size="2">Cash taxes are estimated to be
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    during the year following the closing of this offering, after
    giving effect to the Transactions and the deductible expenses.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">(7)</FONT></TD>
    <TD align="left">
    <FONT size="2">The estimated dividends on our outstanding common
    stock is allocated between Class&nbsp;A and Class&nbsp;B common
    stock as follows:
    </FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="56%"><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="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="4%"><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="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>
</TR>

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

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Dividends</FONT></B></TD>
</TR>

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

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Per Share</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Aggregate</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>
</TR>

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

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Estimated dividends on our outstanding
    Class&nbsp;A common stock
    </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 align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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">Estimated dividends on our outstanding
    Class&nbsp;B common stock
    </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 align="right" valign="bottom"><FONT size="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><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><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 align="left"><HR size="1" noshade></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">Estimated dividends on our outstanding common
    stock
    </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 align="right" valign="bottom"><FONT size="2">$</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><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 align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>
<P>

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

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(8)</FONT></TD>
    <TD align="left">
    <FONT size="2">Consolidated coverage ratio is calculated as
    Covenant EBITDA divided by consolidated interest expense. Under
    the indenture relating to our senior subordinated notes, we may
    not pay dividends on our capital stock if our consolidated
    coverage ratio is
    below &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;x.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">(9)</FONT></TD>
    <TD align="left">
    <FONT size="2">Adjustments for sale-leaseback transactions
    reflects the impact of our sale-leaseback transactions, which
    have occurred in the period from January&nbsp;4, 2001 through
    June&nbsp;30, 2004, including an adjustment for minimum base
    rent as if the sale-leaseback transactions occurred at the
    beginning of the year. The adjustment also gives effect to the
    loss on sale-leaseback transactions and accretion of deferred
    gains on the sale-leaseback transactions.
    </FONT></TD>
</TR>

</TABLE>
<P>

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

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(10)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Other charges include:
    </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><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the addition of non-cash straight-line, deferred
    rent;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the exclusion of the non-cash effect of minority
    interest associated with our Tahoe Joe&#146;s subsidiary; and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the addition of non-cash compensation expense
    recognized for a cash appreciation incentive plan.
    </FONT></TD>
</TR>

</TABLE>
<P>

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

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(11)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Management fees reflects the exclusion of expense
    recognized with respect to annual advisory fees paid to
    Caxton-Iseman Capital and Sentinel Capital Partners, L.L.C. as
    discussed in &#147;Certain Relationships and Related
    Transactions.&#148;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">(12)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Loss related to refinancing reflects transaction
    and other costs associated with our recapitalization on
    June&nbsp;28, 2002 and our refinancings on February&nbsp;20,
    2004 and May&nbsp;18, 2004, as recorded in the consolidated
    statements of operations in the 2002 transitional period and
    fiscal 2004.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">(13)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Financing-related compensation expense represents
    payments to holders of stock options and cash incentive plan
    units in conjunction with the issuance of our 13&nbsp;7/8% Notes
    on May&nbsp;18, 2004, as recorded in the consolidated statement
    of operations in fiscal 2004.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Assumptions and Considerations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based on a review and analysis conducted by our
management, we believe that our minimum Covenant EBITDA for the
year following the closing will be at least
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
and we have determined that the assumptions as to capital
expenditures and cash interest expense in the above tables are
reasonable. We considered numerous factors in making such
determination, including the following:
</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 Covenant EBITDA for fiscal 2004 was
    $100.2&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">for fiscal 2003 and fiscal 2001, our Covenant
    EBITDA was $97.1&nbsp;million and $115.9&nbsp;million,
    respectively;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">45
</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<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 maintenance capital expenditures for fiscal
    2004, fiscal 2003 and fiscal 2001 were $5.7&nbsp;million,
    $8.2&nbsp;million and $10.3&nbsp;million, respectively; 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">for our 26-week transitional period ended
    July&nbsp;3, 2002, our Covenant EBITDA and maintenance capital
    expenditures were $60.9&nbsp;million and $5.2&nbsp;million,
    respectively.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If our Covenant EBITDA for the first year were to
fall below the
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
level (or if our assumptions as to capital expenditures or
interest expense were too low), we would need to either reduce
or eliminate dividends or, to the extent we were permitted to do
so under the indenture relating to the senior subordinated
notes, the indenture relating to Buffets&#146; Senior Notes and
the Amended Credit Facility, to fund a portion of our dividends
with borrowings or from other sources. If we were to use working
capital or permanent borrowings to fund dividends, we would have
less cash available for future dividends and other purposes,
which could negatively impact our financial condition, our
results of operations and our ability to maintain or expand our
business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We cannot assure you that our Covenant EBITDA
will in fact equal or exceed the minimum level set forth above,
and our belief that it will equal or exceed such level is
subject to all of the risks, considerations and factors
identified in other sections of this registration statement,
including those identified in the section entitled &#147;Risk
Factors.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As noted above, we have estimated our initial
dividend level and our minimum Covenant EBITDA only for the
twelve-month period following the closing. Moreover, there can
be no assurance that during or following such period we will pay
dividends at the levels estimated above, or at all. Dividend
payments are within the absolute discretion of our board of
directors and will be dependent upon many factors and future
developments that could differ materially from our current
expectations. Indeed, over time our capital and other cash needs
will invariably be subject to uncertainties which could impact
the level of any dividends we pay in the future. While interest
on the Amended Credit Facility will be variable (subject to an
interest rate cap), the revolving credit facility and the term
loan portion of the Amended Credit Facility will need to be
refinanced on or prior
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2009
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2011, respectively. We may not be able to renew or refinance the
Amended Credit Facility, or if renewed or refinanced, the
renewal or refinancing may occur on less favorable terms, which
may materially adversely affect our ability to pay dividends. In
particular, some of the terms of the senior subordinated notes
that may be viewed as favorable to the senior lenders, such as
our ability to defer interest and acceleration forbearance
periods, become less favorable in 2009, which may materially
adversely affect our ability to refinance or renew the Amended
Credit Facility beyond that date. If we are unable to refinance
or renew the Amended Credit Facility, our failure to repay all
amounts due on the maturity date would cause a default under the
Amended Credit Facility. In addition, our interest expense may
increase significantly if we refinance the Amended Credit
Facility on terms that are less favorable to us than the terms
of the Amended Credit Facility.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The senior subordinated notes will mature in 2019
and Buffets&#146; Senior Notes will mature in 2014, and we may
not be able to refinance the senior subordinated notes or
Buffets&#146; Senior Notes when they become due. If we are
unable to refinance either the senior subordinated notes or
Buffets&#146; Senior Notes, our failure to repay all amounts due
on the maturity date would cause a default under the respective
indentures. Even if we were able to refinance the senior
subordinated notes and Buffets&#146; Senior Notes, the
refinancing may occur on terms that are less favorable to us,
which would materially adversely affect our results of
operations and our ability to pay dividends.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, to the extent we finance capital
expenditures with indebtedness, we will begin to incur
incremental debt service obligations. Our intended policy to
distribute rather than retain excess cash is based upon our
assessment of our financial performance, our cash needs and our
investment opportunities. If these factors were to change based
on, for example, competitive developments (which could increase
our need for capital expenditures), or new investment
opportunities, we would need to reassess that policy. Our board
is free to depart from or change our dividend policy at any time
and could do so, for example, if it were to determine that we
had insufficient cash to take advantage of growth opportunities.
Although management currently has no specific plans to increase
capital spending to materially expand our business,
</FONT>

<P align="center"><FONT size="2">46
</FONT>

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

<DIV align="left">
<FONT size="2">management will evaluate growth opportunities as
they arise and may pursue opportunities that it believes would
result in net increases to our cash available for distribution.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Restrictions on Payment of Dividends</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under state law, we can only pay dividends out of
&#147;surplus&#148; (which is defined as total assets at fair
market value minus total liabilities, minus statutory capital)
or out of current or the immediately preceding year&#146;s
earnings. We do not anticipate that we will have and in prior
years would not have had sufficient earnings to pay dividends at
the levels described above and therefore expect that we will pay
dividends out of surplus. Although we believe we will have
sufficient surplus to pay dividends at the anticipated levels
during the first year following this offering, our board will
seek periodically to assure itself of this before actually
declaring any dividends.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the indenture, dividends are restricted as
follows:
</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">we may use all of our excess cash accumulated
    after that date plus certain incremental funds, but we may not
    in general pay dividends in excess of such amounts. We define
    &#147;excess cash&#148; as EBITDA (as defined in the indenture)
    minus cash interest expense, deferred interest, restructuring
    expenses settled in cash (excluding charges funded with proceeds
    from this offering), cash income taxes, maintenance capital
    expenditures, growth capital expenditures (unless funded by
    debt) and repayments of our indebtedness, plus the net cash
    proceeds from any sale of Tahoe Joe&#146;s, Inc.;
    </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 may only pay dividends if our consolidated
    coverage ratio for the most recently ended four consecutive
    fiscal quarters for which internal financial statements are
    available is equal to or greater
    than &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
    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">we may not pay any dividends while interest on
    the senior subordinated notes is being deferred or, after the
    end of any interest deferral period, so long as any deferred
    interest, including interest accrued on deferred interest, has
    not been paid in full;&nbsp;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">we may not pay any dividends if a default or an
    event of default under the indenture governing the senior
    subordinated notes has occurred and is continuing.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Amended Credit Facility and the indenture
relating to Buffets&#146; Senior Notes will contain similar
provisions restricting our ability to make dividend payments.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Amended Credit Facility will limit the amount
of voluntary distributions by Buffets to our available cash plus
the initial adjustment amount. In addition, the Amended Credit
Facility will provide that Buffets may not make distributions to
enable us to pay dividends if and for so long as (a)&nbsp;a
default or an event of default under the Amended Credit Facility
has occurred and is continuing, (b)&nbsp;Buffets Holdings has
any deferred and unpaid interest outstanding on the senior
subordinated notes, or (c)&nbsp;Buffets Holdings does not meet a
minimum consolidated coverage ratio.
</FONT>

<P align="left">
<B><FONT size="2">Dividend History</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the 2002 transitional period, fiscal 2003
and fiscal 2004, Buffets Holdings made cash distributions to its
equity owners approximately $147.8&nbsp;million,
$0.4&nbsp;million and $88.3&nbsp;million, respectively. These
distributions were financed with indebtedness. We have no
history of paying dividends out of our cash flow.
</FONT>

<P align="center"><FONT size="2">47
</FONT>

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

<DIV align="left">
<A name='108'></A>
</DIV>

<!-- link1 "CAPITALIZATION" -->

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth our cash and cash
equivalents and capitalization as of June&nbsp;30, 2004, on an
actual basis and on a pro forma basis after giving effect to the
Transactions. The information should be read in conjunction with
&#147;Prospectus Summary&nbsp;&#151; The Transactions,&#148;
&#147;Use of Proceeds,&#148; &#147;Unaudited Pro Forma Condensed
Combined Financial Data,&#148; &#147;Management&#146;s
Discussion and Analysis of Financial Condition and Results of
Operations,&#148; and the unaudited historical condensed
combined financial statements and the accompanying notes thereto
appearing elsewhere in this prospectus.
</FONT>

<CENTER>
<TABLE width="80%" 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="60%"><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="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></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">At June&nbsp;30, 2004</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></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"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma for the</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Actual</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transactions</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>
</TR>

<TR>
    <TD colspan="3"></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">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" 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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,072</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Restricted cash and cash equivalents
    </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">16,228</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</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>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42,300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Indebtedness:</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Buffets and its subsidiaries:
    </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>
</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">Existing Credit Facility:
    </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>
</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">Revolving credit facilities
    </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">&#151;</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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Term loan facilities
    </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">228,850</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amended Credit Facility:
    </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>
</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">Revolving credit facilities
    </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">&#151;</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">Term loan facilities
    </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">&#151;</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">Buffets&#146; &nbsp;&nbsp;%&nbsp;Senior 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">&#151;</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">11&nbsp;1/4%&nbsp;senior subordinated notes due
    2010(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">193,189</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 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>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total indebtedness of Buffets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">422,039</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Buffets Holdings:
    </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>
</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">Senior subordinated notes offered hereby
    </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><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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">13&nbsp;7/8%&nbsp;senior discount notes due
    2010(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">76,300</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">IDS 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">&#151;</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 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>

</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">Total indebtedness of Buffets Holdings
    </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">76,300</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 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>

</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">Total indebtedness
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">498,339</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Class&nbsp;B common stock being issued
    concurrently herewith
    </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">&#151;</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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Shareholders&#146; deficit:</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>
</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">Common stock ($.01&nbsp;par value,
    3,600,000&nbsp;shares authorized; 3,185,672&nbsp;shares issued
    and outstanding)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32</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><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">Class&nbsp;A common stock being offered hereby
    </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">&#151;</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Class&nbsp;B common stock being issued
    concurrently herewith
    </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">&#151;</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">Additional paid in 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">&#151;</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated deficit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(75,948</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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>

</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">Total shareholders&#146; deficit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(75,916</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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>

</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">Total capitalization
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">422,423</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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>

</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">We have assumed that all of Buffets&#146;
    11&nbsp;1/4%&nbsp;Notes will be repurchased at a cash price
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of aggregate principal amount.
    </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">We have assumed that all of our
    13&nbsp;7/8%&nbsp;Notes will be repurchased or redeemed at a
    cash price of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of accreted value.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">48
</FONT>

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

<DIV align="left">
<A name='109'></A>
</DIV>

<!-- link1 "DILUTION" -->

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Dilution is the amount by which the portion of
the price paid by the purchasers of the IDSs in the offering
that is allocated to our shares of Class&nbsp;A common stock
exceeds the net tangible book value or deficiency per share of
our Class&nbsp;A common stock after the offering. Net tangible
book value or deficiency per share of our Class&nbsp;A common
stock is determined at any date by subtracting our total
liabilities from our total assets less our intangible assets and
dividing the difference by the number of shares of common stock
deemed to be outstanding at that date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For purposes of calculating dilution below, we
have assumed that as of June&nbsp;30, 2004 all of the
Class&nbsp;B common stock to be issued to our existing
stockholders has been converted into IDSs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our net tangible book deficiency as of
June&nbsp;30, 2004 was approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
or
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share of Class&nbsp;A common stock. After giving effect to this
offering and the other Transactions, including the use of
proceeds as described in this prospectus, and assuming that all
of Buffets&#146; 11&nbsp;1/4%&nbsp;Notes are repurchased and our
13&nbsp;7/8%&nbsp;Notes are repurchased or redeemed in the
tender offers, our pro forma net tangible book deficiency as of
June&nbsp;30, 2004 would have been approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
or
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share of common stock. This represents an immediate increase in
net tangible book value of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share of our Class&nbsp;B common stock to our existing
stockholders and an immediate dilution of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share of our Class&nbsp;A common stock to new investors
purchasing Class&nbsp;A common stock represented by the IDSs in
this offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table illustrates this substantial
and immediate dilution to new investors:
</FONT>

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

<TR>
    <TD width="54%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><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="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Per Share of Class&nbsp;A</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Per Share of Class&nbsp;A</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Common Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Common Stock</FONT></B></TD>
</TR>

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

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise of the</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise of the</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Underwriters&#146; Over-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Underwriters&#146; Over-</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Allotment Option</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Allotment Option</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Portion of the assumed initial offering price of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per IDS allocated to one
    share of Class&nbsp;A common stock
    </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>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net tangible book value (deficiency)&nbsp;per
    share as of June&nbsp;30, 2004 (actual)
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase per share attributable to cash payments
    made by investors in this offering
    </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>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net tangible book value (deficiency)&nbsp;as
    adjusted for this offering and after giving effect to the other
    Transactions
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dilution in net book value per share to new
    investors
    </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>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth on a pro forma
basis as of June&nbsp;30, 2004, assuming no exercise of the
underwriters&#146; over-allotment option:
</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 total number of shares of our Class&nbsp;A
    common stock represented by IDSs to be owned by our existing
    stockholders following the consummation of this offering and the
    other Transactions (assuming all Class&nbsp;B common stock to be
    issued to our existing stockholders is converted into IDSs);
    </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 total consideration paid by our existing
    stockholders and the total consideration to be paid by the new
    investors in this offering;&nbsp;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 average price per share of common stock paid
    by our existing stockholders (cash and stock) and to be paid by
    new investors purchasing Class&nbsp;A common stock in this
    offering:
    </FONT></TD>
</TR>

</TABLE>

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

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

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

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Shares of Common Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Average Price</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Purchased</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Net Consideration</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Per Share of</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="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Common</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Stock</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Existing stockholders
    </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 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><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 align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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">New investors
    </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>
</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><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 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><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 align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">49
</FONT>

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

<DIV align="left">
<A name='110'></A>
</DIV>

<!-- link1 "UNAUDITED PRO FORMA CONDENSED FINANCIAL DATA" -->

<P align="center">
<B><FONT size="2">UNAUDITED PRO FORMA CONDENSED FINANCIAL
DATA</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following tables present our unaudited pro
forma condensed consolidated financial information as of and for
fiscal 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The unaudited pro forma financial information
gives effect to the following transactions:
</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">entering into the Amended Credit Facility to
    provide for a
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    term loan, a
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    revolving credit facility (which includes a
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    letter of credit sub-facility), a
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    letter of credit facility and a
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    synthetic letter of credit facility;
    </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 offering of the IDSs, the senior subordinated
    notes offered separately from the IDSs and the Class&nbsp;B
    common 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">the offering of Buffets&#146; Senior 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">the application of our cash on hand, the proceeds
    from the offering, the proceeds from Buffets&#146; offering of
    its Senior Notes and the borrowings under the Amended Credit
    Facility to use cash on hand to pre-fund our capital
    expenditures program, repay indebtedness under the Existing
    Credit Facility, repurchase Buffets&#146; 11&nbsp;1/4% Notes,
    repurchase or redeem our 13&nbsp;7/8% Notes, pay early
    redemption or premium costs and payment of interest, repurchase
    existing common stock, warrants and options from our existing
    stockholders and pay transaction fees and expenses.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The unaudited pro forma balance sheet data as of
June&nbsp;30, 2004 give effect to the above transactions as if
they had occurred on June&nbsp;30, 2004. The unaudited pro forma
condensed consolidated statement of operations for fiscal 2004
give effect to the above transactions as if they had occurred on
July&nbsp;3, 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Preparation of the pro forma financial
information was based on assumptions deemed appropriate by our
management. The pro forma information is unaudited and is not
necessarily indicative of the results which actually would have
occurred if the above transactions had been consummated at the
beginning of the period presented, nor does it purport to
represent the future financial position and results of
operations for future periods. The unaudited pro forma financial
information should be read in conjunction with &#147;Use of
Proceeds,&#148; &#147;Capitalization,&#148; &#147;Selected
Historical Consolidated Financial Data,&#148;
&#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations&#148; and our historical
consolidated financial statements and the related notes included
elsewhere in this prospectus.
</FONT>

<P align="center"><FONT size="2">50
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">UNAUDITED PRO FORMA CONDENSED BALANCE
SHEET</FONT></B>

<DIV align="center">
<B><FONT size="2">As of June&nbsp;30, 2004</FONT></B>
</DIV>

<CENTER>
<TABLE width="90%" 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="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="51%"><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>
    <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="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>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Adjustments</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">for the</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Actual</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transactions</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</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>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">(Dollars in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="16" align="left" valign="top">
    <B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current assets:
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" 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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,072</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><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"><FONT size="2">$</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="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Restricted cash and cash equivalents
    </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">16,228</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Receivables
    </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">6,963</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="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventories
    </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">18,673</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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other current 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">5,244</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="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred income taxes
    </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">15,915</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 colspan="4"><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 valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Total current 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">89,095</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="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Property and equipment, 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">149,618</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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Goodwill, 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">312,163</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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred income taxes
    </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">1,033</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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other assets, 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">15,622</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 colspan="4"><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><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 align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">567,531</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><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"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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>
    <TD colspan="16"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="16" align="left" valign="top">
    <B><FONT size="2">LIABILITIES AND SHAREHOLDERS&#146;
    DEFICIT</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current liabilities:
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43,280</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><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"><FONT size="2">$</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="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other accrued liabilities
    </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">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><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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current maturities of long-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">2,300</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 colspan="4"><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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total current liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">118,774</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><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"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long-term debt:
    </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>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revolving credit facilities
    </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">&#151;</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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Buffets&#146; 11&nbsp;1/4%&nbsp;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">193,189</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="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Buffets Holdings&#146; 13&nbsp;7/8%&nbsp;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">76,300</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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Term loan facility, non-current maturities
    </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">226,550</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="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">IDS 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">&#151;</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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Buffets&#146; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
    Senior 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">&#151;</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="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Senior subordinated 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">&#151;</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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other long-term obligations
    </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">28,634</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 colspan="4"><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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">643,447</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><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"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Allocated portion of retained 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">&#151;</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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Shareholders&#146; deficit:
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common stock
    </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">32</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="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additional paid-in 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">&#151;</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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated deficit
    </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">(75,948</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><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 colspan="4"><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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Shareholders&#146; deficit
    </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">(75,916</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><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 colspan="4"><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 valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Total liabilities and shareholders&#146; deficit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">567,531</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><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"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

</TABLE>
</CENTER>

<P align="center"><FONT size="2">51
</FONT>

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

<P align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS</FONT></B>

<DIV align="center">
<B><FONT size="2">Fiscal Year Ended June&nbsp;30, 2004</FONT></B>
</DIV>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="58%"><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>
    <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>
    <TD width="3%"><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="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Adjustments</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">for the</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Actual</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transactions</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</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>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" 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="2">Restaurant sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">942,831</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><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"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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">Restaurant costs
    </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">812,662</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Advertising 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">25,854</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">General 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">42,722</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Impairment of 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">1,878</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Financing-related compensation 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">2,240</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 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>
    <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">Operating 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">57,475</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 colspan="2" 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">39,609</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest 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">(424</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><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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss related to refinancing
    </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">4,776</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss related to early extinguishment of 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">5,275</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other (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">(1,379</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><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 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>
    <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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income (loss) before income taxes
    </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">9,618</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income tax expense (benefit)
    </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">1,648</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 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>
    <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">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,970</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><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"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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>
    <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="center"><FONT size="2">52
</FONT>

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

<DIV align="left">
<A name='111'></A>
</DIV>

<!-- link1 "SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA" -->

<P align="center">
<B><FONT size="2">SELECTED HISTORICAL CONSOLIDATED FINANCIAL
DATA</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The table below provides a summary of historical
consolidated financial and other data for the:
</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">fiscal year ended December&nbsp;29, 1999,
    </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">period from December&nbsp;30, 1999 through
    October&nbsp;1, 2000,
    </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">period from October&nbsp;2, 2000 through
    January&nbsp;3, 2001,
    </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">fiscal year ended January&nbsp;2, 2002,
    </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">26-week transitional period ended July&nbsp;3,
    2002,
    </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">fiscal year ended July&nbsp;2, 2003,&nbsp;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">fiscal year ended June&nbsp;30, 2004.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The summary operating data for fiscal 1999, the
period from December&nbsp;30, 1999 through October&nbsp;1, 2000,
the period from October&nbsp;2, 2000 through January&nbsp;3,
2001, fiscal 2001, the 2002 transitional period and fiscal 2003
are derived from our audited financial statements. Our audited
financial statements and related notes for fiscal 2001, the 2002
transitional period and fiscal 2003 are contained elsewhere in
this prospectus. All fiscal years presented below other than the
2002 transitional period represent 52&nbsp;week periods.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The information presented below should be read in
conjunction with &#147;Use of Proceeds,&#148;
&#147;Capitalization,&#148; &#147;Unaudited Pro Forma Condensed
Financial Data,&#148; &#147;Management&#146;s Discussion and
Analysis of Financial Condition and Results of Operations&#148;
and the consolidated financial statements and notes thereto
included elsewhere in this prospectus.
</FONT>

<P align="center"><FONT size="2">53
</FONT>

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

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

<TR>
    <TD width="29%"><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="4%"><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="3%"><FONT size="1">&nbsp;</FONT></TD>
</TR>

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

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">Successor</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Predecessor(1)</FONT></B></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">26-Week</FONT></B></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period From</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period From</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transitional</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">December&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">October&nbsp;2,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Year</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1999 through</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2000 through</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">December 29,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">October&nbsp;1,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">January&nbsp;3,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">January&nbsp;2,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;3,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;2,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD></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>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</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>
    <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></TD>
    <TD></TD>
    <TD colspan="27"></TD>
</TR>

<TR>
    <TD></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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="1">Operating Data:</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Restaurant sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">936,854</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">781,153</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">239,370</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">1,044,734</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">527,084</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">985,286</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">942,831</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Restaurant costs
    </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">800,255</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">656,843</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">204,379</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">886,069</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">444,917</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">850,840</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">812,662</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Advertising expenses
    </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">22,491</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">21,888</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">5,726</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">27,640</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">14,349</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">28,589</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">25,854</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">General and administrative expenses
    </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">47,857</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">39,217</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">12,204</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">50,569</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">25,687</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">45,382</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">42,722</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Goodwill 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">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">878</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">2,543</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">10,942</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 valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Impairment of assets
    </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">1,966</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">4,803</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">1,878</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Gain on sale of Original Roadhouse Grill
    restaurants
    </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">&#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">(7,088</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">&#151;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Loss on sale-leaseback transactions
    </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">&#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">5,856</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Acquisition-related costs
    </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">14,902</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 valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Financing-related compensation 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">&#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>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">2,240</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><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>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Operating income
    </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">63,648</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">47,425</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">14,518</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">69,514</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">42,131</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">56,904</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">57,475</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><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>

<TR valign="bottom" bgcolor="#EEEEEE">
    <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">3,014</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">1,970</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">13,078</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">43,405</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">15,088</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">41,235</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">39,609</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Interest income
    </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">(4,929</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">(4,638</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">(267</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">(698</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">(212</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">(307</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">(424</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Loss related to refinancing
    </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">38,724</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">4,776</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Loss related to early extinguishment of debt
    </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">&#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">5,275</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Other (income)
    </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">(1,679</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">(1,126</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">(340</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">(1,040</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">(598</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">(1,270</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">(1,379</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR>
    <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>
    <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>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Income (loss) before income tax expense (benefit)
    </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">67,242</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">51,219</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">2,047</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">27,847</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">(10,871</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">17,246</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">9,618</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Income tax expense (benefit)
    </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">24,800</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">19,974</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">1,468</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">15,292</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">(3,354</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">5,319</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">1,648</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><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>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">42,442</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">31,245</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">579</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">12,555</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(7,517</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">11,927</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">7,970</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><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>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="1">Cash Flow and Other Financial Data:</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Total capital expenditures(2)
    </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">74,230</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">35,596</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">14,389</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">38,096</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">14,280</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">25,722</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">33,007</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD 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">43,026</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">32,368</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">11,311</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">53,404</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">20,409</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">36,885</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">33,807</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Cash flow provided by operating activities
    </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">90,561</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">87,822</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">25,401</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">68,835</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">39,250</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">57,656</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">50,490</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Cash flow provided by (used in) investing
    activities
    </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">(74,230</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">(37,013</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">4,540</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">2,575</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">(11,337</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">26,662</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">(28,383</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Cash flow provided by (used in) financing
    activities
    </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">(38,129</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">1,534</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">(138,751</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">(59,590</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">(47,164</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">(76,825</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">(11,890</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Ratio of earnings to fixed charges(3)
    </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">33.8</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">x</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">91.1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">x</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">1.1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">x</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">1.6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">x</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">1.4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">x</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">1.2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">x</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Pro Forma ratio of earnings to fixed charges(3)(4)
    </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 align="left" valign="bottom" nowrap><FONT size="1">x</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="1">Balance Sheet Data (at end of
    period):</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Cash and cash equivalents(5)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">72,260</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">124,603</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">15,793</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">27,613</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">8,362</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">15,855</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">26,072</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Total assets
    </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">477,635</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">530,846</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">683,866</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">637,701</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">615,672</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">552,986</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">567,531</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Total debt(6)
    </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">42,151</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">41,133</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">405,074</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">348,220</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">493,981</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">421,122</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">498,339</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Total shareholders&#146; equity (deficit)
    </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">306,383</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">346,412</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">135,993</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">148,677</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">(34,611</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">(22,810</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">(75,916</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</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">On October&nbsp;2, 2000, Buffets Holdings, Inc.
    acquired Buffets, Inc. in a management-led buyout from public
    shareholders. Due to the effects of this transaction on the
    recorded bases of goodwill, intangibles, property and
    shareholders&#146; equity, our financial statements prior to and
    subsequent to this transaction are not comparable. Periods prior
    to October&nbsp;2, 2000 represent the accounts of the
    predecessor. Accordingly, the historical financial information
    for fiscal 2000 is presented in two periods&nbsp;&#151; the
    period from December&nbsp;30, 1999 to October&nbsp;1, 2000 and
    the period from October&nbsp;2, 2000 to January&nbsp;3, 2001.
    </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">Total capital expenditures include restaurant
    facilities acquired through business combinations in fiscal 1999.
    </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">&#147;Fixed charges&#148; is the sum of our
    interest expense, less interest income, less OID amortization,
    less debt issuance cost amortization, plus capitalized interest,
    plus amortized premiums, discounts and capitalized expenses
    related to indebtedness, plus interest in rental expense.
    &#147;Earnings&#148; is the sum of
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD></TD>
    <TD align="left">
    <FONT size="2">our pre-tax income before minority interest, plus
    fixed charges, plus amortization of capitalized interest, less
    capitalized interest, less minority interest in pre-tax income
    of subsidiaries that had not incurred fixed charges. Earnings
    were insufficient to cover fixed charges in the 26-week
    transitional period ended July&nbsp;3, 2002. The deficiency was
    $11.2&nbsp;million for that period.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Pro Forma ratio of earnings to fixed charges for
    fiscal 2003 and fiscal 2004 gives effect to the Prior
    Refinancing Transactions and the Transactions as if they had
    occurred at the beginning of the period presented.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">In addition to cash and cash equivalents, we had
    $16.2&nbsp;million of restricted cash as of June&nbsp;30, 2004.
    </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">Total debt represents the amount of our long-term
    debt and capital lease obligations, including current maturities.
    </FONT></TD>
</TR>

</TABLE>

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<DIV align="left">
<A name='112'></A>
</DIV>

<!-- link1 "MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" -->

<P align="center">
<B><FONT size="2">MANAGEMENT&#146;S DISCUSSION AND ANALYSIS
OF</FONT></B>

<DIV align="center">
<B><FONT size="2">FINANCIAL CONDITION AND RESULTS OF
OPERATIONS</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">You should read the following discussion in
conjunction with &#147;Selected Historical Consolidated
Financial Data&#148; and our consolidated financial statements
and related notes included elsewhere in this prospectus. Some of
the statements in the following discussion are forward-looking
statements. See &#147;Forward-Looking
Statements.&#148;</FONT></I>

<P align="left">
<B><FONT size="2">Overview</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are the twentieth largest restaurant operator
in the United States and the largest operator of company-owned
stores in the buffet/grill sector (through Buffets and its
subsidiaries), as measured in both sales and number of
restaurants. We accounted for approximately 32% of total sales
in this estimated $3.0&nbsp;billion sector. Our restaurants are
principally operated under the names Old Country Buffet and
HomeTown Buffet. As of June&nbsp;30, 2004, we had
360&nbsp;company-owned restaurants and 20 franchised locations
in 38&nbsp;states.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Buffets was founded in 1983 to develop
buffet-style restaurants under the name Old Country Buffet. In
October 1985, Buffets completed its initial public offering and
was listed on The NASDAQ National Market. In September 1996,
Buffets merged with HomeTown Buffet, Inc., which was developed
by one of Buffets&#146; co-founders and had
80&nbsp;company-owned HomeTown Buffet restaurants in
11&nbsp;states and 19 franchised restaurants in eight states. In
October 2000, Buffets was acquired by Buffets Holdings, a
company organized by Caxton-Iseman Capital, Inc., in a buyout
from public shareholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our financial results are significantly impacted
by changes in sales at our company-owned restaurants. Changes in
sales are largely driven by changes in average weekly guest
counts and average guest check. We monitor average weekly guest
counts very closely, as they directly impact our revenues and
profits, and focus substantial efforts on growing these numbers
on a same-store basis. Same-store average weekly sales and guest
counts are affected by our ability to consistently deliver a
high-quality, value-priced selection of home-style cooked meals
in a clean and pleasant self-service buffet format, the success
of our marketing promotions and other business strategies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our business model is characterized by a
relatively fixed cost structure, particularly in the short term.
Accordingly, changes in marginal average weekly sales volume can
have a more significant impact on our profitability than for a
business possessing a more variable cost structure. Over a
longer time horizon, by virtue of our diversified food
offerings, we are able to address the semi-fixed element of food
cost by modifying our offerings or by highlighting other foods
on the menu in order to reduce consumption on the higher cost
items. In addition, we monitor our labor costs and hourly
employee productivity, as measured by the number of guests
served per labor hour, on a weekly basis to ensure that
restaurants are responsive in scheduling and managing our labor
to varying levels of guest traffic.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We devote significant resources and attention to
our marketing efforts which is evident in the level of our
advertising expenditures over the past five years. In the past
year, we adopted a more stringent, return on investment based
approach to advertising placement which has resulted in more
efficient and effective returns on our marketing investments.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Since we acquired Buffets in a buyout from its
public shareholders in October 2000, we have focused on
improving asset management and optimizing our capital structure.
As a result, we have had net closures of 44 restaurants in less
attractive locations either through early termination, or
non-renewal at lease end, since October 2000. We expect the
number of closures to abate in 2005, and reach an equilibrium
point at which new openings and select relocations will
approximate the number of restaurants which we close because
they do not meet our profitability goals.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our fiscal year comprises 52 or 53&nbsp;weeks
divided into four fiscal quarters of&nbsp;12, 12, 16 and 12 or
13&nbsp;weeks. Beginning with the transitional period ended
July&nbsp;3, 2002, we changed our fiscal year so that it ends on
the Wednesday nearest June&nbsp;30 of each year. The fiscal year
2002 transition period consisted of 26&nbsp;weeks and was
divided into two periods of 16 and 10&nbsp;weeks. Prior to that,
our fiscal year ended on the
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">Wednesday nearest December&nbsp;31 of each year
and each fiscal year was divided into periods of&nbsp;16, 12, 12
and 12 or 13&nbsp;weeks.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a description of the line items
from our consolidated statements of operations:
</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">We recognize as restaurant sales the proceeds
    from the sale of food and beverages at our company-owned
    restaurants at the time of such sale. We recognize the proceeds
    from the sale of gift certificates/cards when the gift
    certificates/cards are redeemed at our restaurants. Until
    redemption, the unearned revenue from the sale of gift
    certificates/cards is included in accrued liabilities on our
    consolidated balance sheets. Our franchise income includes
    royalty fees and initial franchise fees received from our
    franchisees. We recognize royalty fees as other income based on
    the sales reported at the franchise restaurants.
    </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">Restaurant costs reflect only direct restaurant
    operating costs, including food, labor and direct and occupancy
    costs. Labor costs include compensation and benefits for both
    hourly and restaurant management employees. Direct and occupancy
    costs consist primarily of costs of supplies, maintenance,
    utilities, rent, real estate taxes, insurance, depreciation and
    amortization.
    </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">Advertising expenses reflect all advertising and
    promotional costs.
    </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">General and administrative expenses reflect all
    costs, other than advertising expenses, not directly related to
    the operation of restaurants. These expenses consist primarily
    of corporate administrative compensation and overhead, district
    and regional management compensation and related management
    expenses and the costs of recruiting, training and supervising
    restaurant management personnel.
    </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">Goodwill amortization reflects the amortization
    of the excess of cost over fair market value of assets and was
    recognized on a straight line basis over a 30-year life through
    January&nbsp;2, 2002. Effective January&nbsp;3, 2002, we changed
    our method of accounting for goodwill in accordance with
    Statement of Financial Accounting Standards No.&nbsp;142,
    &#147;Goodwill and Other Intangible Assets.&#148;
    </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">Impairment of assets reflects fair market
    adjustments to the carrying value of long-lived assets,
    primarily comprised of leasehold improvements and equipment.
    </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">Gain on sale of Original Roadhouse Grill
    restaurants reflects the net proceeds from the sale of 13
    Original Roadhouse Grill restaurants net of the related carrying
    value of these restaurants.
    </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">Loss on sale-leaseback transactions reflects
    transaction costs and impairment losses associated with the sale
    and leaseback of the leasehold interests and leasehold
    improvements.
    </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">Financing-related compensation expenses reflect
    payments to holders of stock options and cash incentive plan
    units in conjunction with the issuance of our
    13&nbsp;7/8%&nbsp;Notes in May 2004.
    </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">Interest expense reflects interest costs
    associated with our debt, amortization of debt issuance cost and
    accretion of original issuance discount on our subordinated
    notes and bonds.
    </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">Interest income reflects interest earned on our
    short-term investments.
    </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">Loss related to refinancing reflects transaction
    and other costs associated with our recapitalization on
    June&nbsp;28, 2002 and refinancing on February&nbsp;20, 2004.
    </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">Loss related to the early extinguishment of debt
    reflects the costs associated with redeeming a portion of
    Buffets&#146; 11&nbsp;1/4% Notes prior to their maturity during
    fiscal 2004.
    </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 income primarily reflects franchise fees
    earned, less minority interest associated with our Tahoe
    Joe&#146;s subsidiary. During August 2003, we exercised our call
    option to acquire the remaining 20% interest in Tahoe
    Joe&#146;s, Inc. from the minority holder.
    </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">Income tax expense (benefit) reflects the current
    and deferred tax provision (benefit) determined in accordance
    with the provisions of Statement of Financial Accounting
    Standards (SFAS)&nbsp;No. 109, &#147;Accounting for Income
    Taxes.&#148;
    </FONT></TD>
</TR>

</TABLE>

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<P align="left">
<B><FONT size="2">Critical Accounting Policies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our consolidated financial statements have been
prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of our
financial consolidated statements requires management to make
estimates and assumptions that affect the reported amount of
assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. On an ongoing basis, management evaluates its estimates
and assumptions, including those related to recoverability of
long-lived assets, revenue recognition and goodwill. Management
bases its estimates and assumptions on historical experience and
on various other factors that are believed to be reasonable at
the time the estimates and assumptions are made. Actual results
may differ from these estimates and assumptions under different
circumstances or conditions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe the following critical accounting
policies affect management&#146;s significant estimates and
assumptions used in the preparation of our consolidated
financial statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Accounting Treatment for IDSs and Class&nbsp;B
Common Stock.</FONT></I><FONT size="2"> Our IDS units include
Class&nbsp;A common stock, senior subordinated notes and
embedded derivative features that may require bifurcation under
FASB 133. The embedded derivative features in the senior
subordinated notes include call options and a change of control
put option. Upon completion of this offering, proceeds from the
issuance of the IDSs will be allocated, based upon relative fair
value, to Class&nbsp;A common stock and the senior subordinated
notes. If it is determined at the time of issuance (or any
subsequent issuances) that any of the embedded derivatives are
required to be bifurcated from the senior subordinated notes and
separately accounted for, a portion of the proceeds from the
original issuance will also be allocated to these derivatives
equal to the combined fair value of the embedded derivatives
that require bifurcation. If a portion of the initial proceeds
is allocated to any of the derivatives, the senior subordinated
notes will initially be recorded at a discount or premium and
accreted or amortized to their redemption value as a component
of interest expense using the effective interest method. Any
such allocation will not affect the tax treatment of the IDSs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Class&nbsp;A common stock portion of the IDS
unit will be included in stockholders&#146; equity, net of
related transaction costs, and dividends paid on the
Class&nbsp;A common stock will be recorded as a reduction to
retained earnings when declared by us and will not be deductible
for tax purposes. The senior subordinated note portion of the
IDS unit will be included in long-term debt, and the related
transaction costs will be capitalized as deferred financing
costs and amortized to interest expense using the effective
interest method. Interest on the senior subordinated notes will
be charged to expense as accrued by us. The bifurcated
derivatives, if any, will be recorded as an asset or liability
and will be marked to market with changes in fair value being
recorded in earnings. We intend to determine the fair value of
the Class&nbsp;A common stock, the senior subordinated notes and
embedded derivatives, if any, through the utilization of a third
party valuation firm and the sale as part of this offering of
the separate senior subordinated notes with the same terms as
the senior subordinated notes represented by IDSs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Immediately following the closing of this
offering, our existing stockholders will hold shares of
Class&nbsp;B common stock. Under the investor rights agreement
and subject to certain conditions and restrictions, these shares
may be exchanged for IDSs after the closing date of this
offering. For each of the four full quarterly dividend payment
periods following the closing of this offering, dividends on the
Class&nbsp;B common stock will
be &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;times dividends on the
Class&nbsp;A common stock, which will cause the initial yield on
the Class&nbsp;B common stock to approximate the initial yield
on the IDSs for which each share of Class&nbsp;B common stock
ultimately may be exchanged.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Following the closing of this offering, at the
option of the holder subject to specified conditions and
restrictions, Class&nbsp;B common stock may be exchanged for
IDSs (as may be adjusted for stock splits or stock dividends).
Accordingly, at the date of issuance, a portion of the
Class&nbsp;B common stock will be classified as temporary equity
in the amount equal to the present value of the senior
subordinated note par amount that the holder will be entitled to
receive upon the earliest possible date of exchange, using a
discount rate equal to the interest rate on the senior
subordinated notes. The difference between the
</FONT>

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<DIV align="left">
<FONT size="2">amount recorded as temporary equity and the
amount the holder will receive upon exchange will be accreted as
a dividend in equity and will be treated as a reduction to
income available for common stockholders. Any such allocation is
not expected to affect the tax treatment of the IDSs.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Class&nbsp;B stockholders&#146; right to
exchange Class&nbsp;B common stock for a fixed number of IDSs is
an embedded derivative financial instrument which will require
bifurcation under SFAS&nbsp;No.&nbsp;133. We will recognize this
derivative financial instrument as a liability at fair value
with the offsetting amount as a distribution to our existing
stockholders at closing. The derivative will be adjusted to its
current fair value at each subsequent balance sheet date, with
the change in fair value recorded through earnings for so long
as the exchange rights are outstanding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Basic earnings per share is calculated based on
the respective rights of the outstanding Class&nbsp;A and
Class&nbsp;B common stock to participate in distributions,
consistent with their respective relative dividend rights. The
Class&nbsp;B common stock is expected to participate in
distributions, without preference, at a rate
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;times the dividend paid
on the Class&nbsp;A common stock during the first four full
quarterly dividend payment periods following the closing of this
offering. Diluted earning per share will reflect the
Class&nbsp;B common stock on an as-converted basis. To the
extent that holders exercise their exchange right, the senior
subordinated notes will be recorded at an amount equal to the
fair value of the senior subordinated notes at the time of
exchange, the derivative liability (conversion option) and the
amount in temporary equity will be derecognized, and any
difference will be recorded in equity. Subsequent to an
exchange, interest payments on the senior subordinated notes and
any accretion of discount or amortization of premium on the
senior subordinated notes will be recorded as interest expense.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Income Taxes.</FONT></I><FONT size="2"> We
intend to account for our issuance of the IDSs in this offering
as representing shares of Class&nbsp;A common stock and senior
subordinated notes by allocating the proceeds for each IDS unit
to the underlying Class&nbsp;A common stock or senior
subordinated note based upon the relative fair values of each.
Accordingly, we will account for the portion of the aggregate
IDSs outstanding that represents senior subordinated notes as
long term debt bearing a stated interest rate
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% maturing
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2019. We have concluded that it is appropriate and we intend to
annually deduct interest expense of approximately
$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
on the senior subordinated notes from taxable income for
U.S.&nbsp;federal and state income tax purposes. There can be no
assurances that the Internal Revenue Service will not seek to
challenge the treatment of these senior subordinated notes as
debt or the amount of interest expense deducted, although to
date we have not been notified that the senior subordinated
notes should be treated as equity rather than debt for
U.S.&nbsp;federal and state income tax purposes. If the senior
subordinated notes were required to be treated as equity for
income tax purposes, the cumulative interest expense associated
with the senior subordinated notes would not be deductible from
taxable income, and we would be required to recognize additional
tax expense and establish a related income tax liability. In
addition, to the extent any portion of the interest expense is
determined not to be deductible, we would be required to
recognize additional tax expense and establish a related income
tax liability. The additional tax due to the federal and state
authorities would be based on our taxable income or loss for
each of the years that we take the interest expense deduction.
We do not currently intend to record a liability for a potential
disallowance of this interest expense deduction. In addition,
non-U.S.&nbsp;holders could be subject to withholding taxes on
the payment of interest, which would be taxed as dividends, and
we could be subject to additional liability for the withholding
taxes that we do not intend to collect on such payments.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For more discussion of our (and our
counsel&#146;s) conclusion that the senior subordinated notes
should be treated as indebtedness for U.S. federal income tax
purposes, see &#147;Material U.S. Federal Income Tax
Consequences.&#148;
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recoverability
of Long Lived Assets</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We periodically evaluate long lived assets and
goodwill related to those assets for impairment whenever events
or changes in circumstances indicate the carrying value amount
of an asset or group of assets may not be recoverable. We
consider a history of operating losses and the other factors
described to be our primary indicator of potential impairment.
Assets are grouped and evaluated for impairment at the
</FONT>

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<DIV align="left">
<FONT size="2">lowest level for which there are identifiable
cash flows, namely individual restaurants. A restaurant is
deemed to be impaired if a forecast of undiscounted future
operating cash flows directly related to the restaurant,
including disposal value, if any, is less than its carrying
amount. If a restaurant is determined to be impaired, the loss
is measured as the amount by which the carrying amount of the
restaurant exceeds its fair value. Fair value is based on quoted
market prices in active markets, if available. If quoted market
prices are not available, an estimate of fair value is based on
the best information available, including prices for similar
assets or the results of valuation techniques such as discounted
estimated future cash flows as if the decision to continue to
use the impaired restaurant was a new investment decision. We
generally measure fair value by discounting estimated future
cash flows. Considerable management judgment is necessary to
estimate discounted future cash flows. Accordingly, actual
results could vary significantly from such estimates. We had no
impairment write-downs for the fiscal year ended January&nbsp;2,
2002. During the 26&nbsp;week transitional period ended
July&nbsp;3, 2002, we expensed approximately $1.1&nbsp;million
relating to the impairment of long-lived assets associated with
12 restaurants. During fiscal 2003, we expensed approximately
$5.6&nbsp;million relating to the impairment of long-lived
assets of 39 restaurants. This amount was partially offset by an
approximate $0.8&nbsp;million reduction in lease obligation
accrual assumptions in accrued store closing costs, based on our
receiving greater than planned sublease and other cash receipts.
In addition, we recognized approximately $5.9&nbsp;million in
impairments relating to 18 of the 30 restaurants for which we
completed sale-leaseback transactions during 2003. During fiscal
2004, we expensed approximately $1.9&nbsp;million relating to
the impairment of long-lived assets for 17 restaurants.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Results of Operations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">The following discussion reflects our
historical results for the fiscal year ended January&nbsp;2,
2002, the 28&nbsp;week period ended July&nbsp;18, 2001, the
26-week transitional period ended July&nbsp;3, 2002, the 50-week
period ended July&nbsp;3, 2002, and the fiscal years ended
July&nbsp;2, 2003 and June&nbsp;30, 2004.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Our future results may not be consistent with
our historical results. Our 2002 transitional period results
included a loss relating to our refinancing which was completed
in June 2002. Our fiscal 2003 results included the operating
results for 13 Original Roadhouse Grill restaurants that were
sold in June 2003, as well as the impact of sale and leaseback
transactions with respect to 30 restaurants completed during the
year. Our fiscal 2004 results included the impact of a sale and
leaseback transaction with respect to one restaurant completed
in December 2003, a loss related to a refinancing that we
postponed due to market conditions and the amendment and
restatement of our existing senior credit agreement in February
2004, the issuance of our 13&nbsp;7/8%&nbsp;Notes in May 2004
and the early extinguishment of approximately $29.6&nbsp;million
of 11&nbsp;1/4%&nbsp;senior subordinated notes due 2010. Most
notably, the discussion that follows does not give effect to the
Prior Refinancing Transactions or the Transactions. The
following discussion should be read in conjunction with our
condensed consolidated financial statements and related notes
included elsewhere in this report.</FONT></I>

<P align="center"><FONT size="2">60
</FONT>

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

<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">For the Year Ended June&nbsp;30, 2004
    Compared to the Year Ended July&nbsp;2, 2003</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth our results of
operations based on the percentage relationship of the items
listed to our restaurant sales during the periods shown:
</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="58%"><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>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><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>
    <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="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">July&nbsp;2, 2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">June&nbsp;30, 2004</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="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

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

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15" 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="2">Restaurant sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">985,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">942,831</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">100.0</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Restaurant costs
    </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">850,840</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">86.4</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">812,662</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">86.2</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">Advertising 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">28,589</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">2.9</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">25,854</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">2.7</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">General 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">45,382</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">4.6</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">42,722</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">4.5</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">Impairment of 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">4,803</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">0.5</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">1,878</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">0.2</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">Gain on sale of Original Roadhouse Grill
    Restaurants
    </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">(7,088</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">(0.7</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">&#151;</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">&#151;</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">Loss on sale leaseback transactions
    </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">5,856</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">0.6</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">&#151;</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">&#151;</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">Financing-related compensation 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">&#151;</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">&#151;</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">2,240</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">0.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <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="right" valign="bottom" nowrap><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><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 align="right" valign="bottom" nowrap><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><FONT size="2">&nbsp;</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">Operating 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">56,904</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">5.8</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">57,475</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">6.1</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">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">41,235</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">4.2</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">39,609</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">4.2</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">Interest 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">(307</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">&#151;</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">(424</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">&#151;</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">Loss related to refinancing
    </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">&#151;</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">&#151;</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">4,776</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">0.5</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">Loss related to early extinguishment of 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">&#151;</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">&#151;</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">5,275</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">0.6</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">Other (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">(1,270</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">(0.1</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">(1,379</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">(0.1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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="right" valign="bottom" nowrap><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><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 align="right" valign="bottom" nowrap><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><FONT size="2">&nbsp;</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">Income before income taxes
    </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">17,246</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">1.8</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">9,618</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">1.0</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">Income tax 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">5,319</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">0.5</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">1,648</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">0.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <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="right" valign="bottom" nowrap><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><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 align="right" valign="bottom" nowrap><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><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 income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,927</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,970</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">0.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <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="right" valign="bottom" nowrap><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><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 align="right" valign="bottom" nowrap><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><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

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

<P align="left">
<FONT size="2">Certain percentage amounts do not sum to total
due to rounding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Restaurant Sales.</FONT></I><FONT size="2">
Restaurant sales for the fiscal year ended June&nbsp;30, 2004
decreased $42.5&nbsp;million, or 4.3%, compared with the fiscal
year ended July&nbsp;2, 2003. The decline in sales was primarily
attributable to the closure of 15 buffet restaurants and the
sale of 13 Original Roadhouse Grill restaurants, partially
offset by the opening of 3&nbsp;units, over the past year.
Average weekly sales for fiscal 2004 were $49,949, or 2.0%
higher than the prior year. Same-store sales for fiscal 2004
increased by 1.3% compared to the prior year, reflecting a 1.6%
decline in guest traffic and a 2.9% increase in average check.
The increase in average check comprised approximately a 2.0%
price increase and a 0.9% average check increase due to a
reduction in free promotional and employee meals. We currently
expect same-store sales for the first quarter of fiscal 2005
(the 12-week period ending September&nbsp;22, 2004) to decline
by approximately zero to two percent versus the comparable
period in fiscal 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Restaurant Costs.</FONT></I><FONT size="2">
Restaurant costs for fiscal 2004 decreased by 0.2% as a
percentage of sales compared with the prior year. Food costs as
a percentage of sales increased 0.9% primarily due to our
expanded and enriched menu offerings. Labor costs as a
percentage of sales were 1.3% lower than those experienced in
the prior year, primarily due to a reduction in our restaurant
management staffing levels substantially effected during the
third quarter of fiscal 2003 and the improved productivity of
our hourly employees. Direct and occupancy costs as a percentage
of sales increased by 0.2% versus the prior year. This increase
was primarily attributable to an increase in rent expense
associated with the sale leaseback transactions. We currently
expect that restaurant costs will run approximately 0.4% higher
as a percentage of sales during the first quarter of fiscal
2005, as compared to those experienced in the most recently
completed fiscal year. This increase reflects commodity-pricing
pressure, particularly on chicken, which we expect to abate
appreciably by the end of calendar year 2004.
</FONT>

<P align="center"><FONT size="2">61
</FONT>

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Advertising
Expenses.</FONT></I><FONT size="2"> Advertising expenses
decreased 0.2% as a percentage of sales during fiscal 2004
versus the prior year. The decrease reflected a reduction in
advertising weights during fiscal 2004 to more historic levels.
Approximately 62% of our buffet restaurants received
television-advertising support during fiscal 2004 and fiscal
2003. We expect advertising expenses as a percentage of sales
during the first quarter of fiscal 2005 to remain approximately
flat as compared with those for fiscal year 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">General and Administrative
Expenses.</FONT></I><FONT size="2"> General and administrative
expenses as a percentage of sales decreased 0.1% during fiscal
2004 as compared to the prior fiscal year. This decrease was
largely due to a decrease in non-store employees largely
effected during the third quarter of fiscal 2003. We expect
general and administrative expenses during the first quarter of
fiscal 2005, measured as a percentage of sales, to remain
approximately flat as compared to those realized during fiscal
2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Impairment of
Assets.</FONT></I><FONT size="2"> During fiscal 2004, we
recognized approximately $1.9&nbsp;million in fair market
adjustments to the carrying value of our long-lived assets for
17 restaurants. During fiscal 2003, we recorded approximately
$4.8&nbsp;million of impairments to the long-lived assets for 27
restaurants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Gain on Sale of Original Roadhouse Grill
Restaurants.</FONT></I><FONT size="2"> On June&nbsp;5, 2003, we
sold 13 Original Roadhouse Grill restaurants for approximately
$28.4&nbsp;million in net proceeds. The gain associated with the
sale of these restaurants approximated $7.1&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Loss on Sale and Leaseback
Transactions.</FONT></I><FONT size="2"> During fiscal 2003, we
entered into three sale-leaseback transactions whereby we
transferred our leasehold interests and leasehold improvements
with respect to 30 restaurants to a third party for net proceeds
of approximately $26.1&nbsp;million. We simultaneously entered
into long-term leases for those restaurants with an aggregate
initial annual rent of approximately $3.7&nbsp;million. In
connection with these sale-leaseback transactions, we recorded a
loss of approximately $5.9&nbsp;million primarily to reflect the
impairment of certain of the properties for which the net
proceeds were less than the book value of the leasehold assets.
In addition, the net proceeds for certain of the properties were
greater than the book value of the leasehold assets resulting in
a deferred gain of approximately $3.6&nbsp;million. The deferred
gain will be accreted over the life of the respective restaurant
leases, ranging from 17 to 25&nbsp;years.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On December&nbsp;19, 2003, we entered into a sale
and leaseback transaction by which we transferred our leasehold
interests and leasehold improvements with respect to one
restaurant to a third party for net proceeds of
$2.7&nbsp;million. We simultaneously entered into a long-term
lease for that restaurant with an aggregate initial annual rent
of approximately $0.3&nbsp;million. The net proceeds of this
sale and leaseback transaction exceeded the book value of the
leasehold assets resulting in a deferred gain of approximately
$0.3&nbsp;million, which will be accreted over the 20-year life
of the lease.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Interest Expense.</FONT></I><FONT size="2">
Interest expense was flat as a percentage of sales during fiscal
2004 versus the prior year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Loss Related to
Refinancing.</FONT></I><FONT size="2"> On February&nbsp;20,
2004, Buffets entered into the Existing Credit Facility. In
connection with this bank refinancing, we wrote off
$4.2&nbsp;million of debt issuance cost related to the
predecessor Credit Facility. In addition, we incurred
$0.6&nbsp;million in transaction fees associated with a senior
discount note offering that we postponed due to market
conditions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Loss Related to the Early Extinguishment of
Debt.</FONT></I><FONT size="2"> We repurchased approximately
$29.6&nbsp;million of Buffets&#146; 11&nbsp;1/4%&nbsp;Notes at
an average price of 110.4%. We recognized the difference between
the premium purchase price and the discounted carrying value of
Buffets&#146; 11&nbsp;1/4%&nbsp;Notes, as well as an associated
write-off of debt issuance cost, as a loss related to the early
extinguishment of debt.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Income Taxes.</FONT></I><FONT size="2"> Income
taxes decreased 0.3% as a percentage of sales for fiscal 2004
compared to the prior year. The effective tax rate of 17.1% for
the current year compared with 30.8% for the prior year
reflected the impact of stable tax credits on pre-tax income
that was depressed by financing-related expenses, as well as a
more favorable than expected resolution to a state tax audit.
</FONT>

<P align="center"><FONT size="2">62
</FONT>

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

<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">For the Year Ended July&nbsp;2, 2003
    Compared to the 50 Week Period Ended July&nbsp;3,
    2002</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth our results of
operations based on the percentage relationship of the items
listed to our restaurant sales during the periods shown:
</FONT>

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

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="58%"><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="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="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><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="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></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">50-Week Period Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Year Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">July&nbsp;3, 2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">July&nbsp;2, 2003</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="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

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

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15" 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="2">Restaurant sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,003,997</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">985,286</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">100.0</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Restaurant costs
    </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">849,154</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">84.6</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">850,840</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">86.4</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">Advertising 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">26,281</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">2.6</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">28,589</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">2.9</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">General 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">49,556</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">4.9</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">45,382</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">4.6</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">Goodwill amortization
    </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">4,967</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">0.5</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">&#151;</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">&#151;</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">Impairment of 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">&#151;</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">&#151;</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">4,803</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">0.5</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">Gain on sale of Original Roadhouse Grill
    </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">&#151;</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">&#151;</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">(7,088</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">(0.7</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss on sale and leaseback transactions
    </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">&#151;</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">&#151;</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">5,856</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">0.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <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="right" valign="bottom" nowrap><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><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 align="right" valign="bottom" nowrap><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><FONT size="2">&nbsp;</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">Operating 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">74,039</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">7.4</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">56,904</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">5.8</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">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">33,606</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">3.3</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">41,235</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">4.2</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">Interest 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">(586</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">(0.1</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">(307</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">&#151;</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">Loss related to refinancing
    </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">38,724</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">3.9</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">&#151;</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">&#151;</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">Other (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">(1,145</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">(0.1</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">(1,270</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">(0.1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <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="right" valign="bottom" nowrap><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><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 align="right" valign="bottom" nowrap><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><FONT size="2">&nbsp;</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">Income before income taxes
    </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">3,440</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">0.3</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">17,246</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">1.8</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">Income tax 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">4,203</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">0.4</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">5,319</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">0.5</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="right" valign="bottom" nowrap><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><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 align="right" valign="bottom" nowrap><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><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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(763</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,927</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">1.2</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="right" valign="bottom" nowrap><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><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 align="right" valign="bottom" nowrap><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><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

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

<P align="left">
<FONT size="2">Certain percentage amounts do not sum to total
due to rounding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Restaurant Sales.</FONT></I><FONT size="2">
Restaurant sales for the fiscal year ended July&nbsp;2, 2003
decreased $18.7&nbsp;million, or 1.9%, compared with the
50&nbsp;weeks ended July&nbsp;3, 2002. The decline was
principally attributable to a 2.0% reduction in average weekly
sales between the respective periods coupled with a net capacity
reduction of 291 operating weeks due to 14&nbsp;unit closings
and the sale of 13 Original Roadhouse Grill units, partially
offset by 6&nbsp;unit openings. Same-store sales for the 2003
fiscal year declined by 4.2%, reflecting a 1.5% increase in
pricing and a 5.7% decline in guest traffic. The decline in
sales is due in part to the general economic downturn, as well
as increased competition partially from the quick service
industry in the form of discounting.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Restaurant Costs.</FONT></I><FONT size="2">
Restaurant costs for 2003 increased by 1.8% as a percentage of
sales compared with the comparative prior year period primarily
due to expanded and enriched menu offerings, increased
workers&#146; compensation and utility costs and leverage issues
attributable to reasonably fixed costs on a declining sales base.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Advertising
Expenses.</FONT></I><FONT size="2"> Advertising expenses
increased 0.3% as a percentage of sales for fiscal 2003 versus
the 50&nbsp;weeks ended July&nbsp;3, 2002. We increased
advertising weights in prime time, late news and Hispanic
television in a number of markets to provide greater media
exposure.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">General and Administrative
Expenses.</FONT></I><FONT size="2"> General and administrative
expenses decreased 0.3% as a percentage of sales during fiscal
2003 compared to the 50&nbsp;weeks ended July&nbsp;3, 2002. The
decrease was largely attributable to reduced bonus expense and a
workforce reduction of approximately 70 non-store employees.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Goodwill
Amortization.</FONT></I><FONT size="2"> Goodwill amortization
expense was no longer recognized as of January&nbsp;3, 2002 due
to the adoption as of that date of SFAS&nbsp;No.&nbsp;142,
&#147;Goodwill and Other Intangible Assets,&#148; and its
non-amortization provisions for goodwill.
</FONT>

<P align="center"><FONT size="2">63
</FONT>

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Impairment of
Assets.</FONT></I><FONT size="2"> During fiscal 2003, we
identified as impaired approximately $4.8&nbsp;million of
long-lived assets for 27 restaurants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Gain on Sale of Original Roadhouse Grill
Restaurants.</FONT></I><FONT size="2"> On June&nbsp;5, 2003, we
sold 13 Original Roadhouse Grill restaurants for approximately
$28.4&nbsp;million in net proceeds. The gain associated with the
sale of these restaurants approximated $7.1&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Loss on Sale and Leaseback
Transactions.</FONT></I><FONT size="2"> During fiscal 2003, we
entered into three sale-leaseback transactions whereby we
transferred our leasehold interests and leasehold improvements
with respect to 30 restaurants to a third party for net proceeds
of approximately $26.1&nbsp;million. We simultaneously entered
into long-term leases for those restaurants with an aggregate
initial annual rent of approximately $3.7&nbsp;million. In
connection with these sale leaseback transactions, we recorded a
loss of approximately $5.9&nbsp;million primarily to reflect the
impairment of certain of the properties for which the net
proceeds were less than the book value of the leasehold assets.
In addition, the net proceeds for certain of the properties were
greater than the book value of the leasehold assets resulting in
a deferred gain of approximately $3.6&nbsp;million. The deferred
gain will be accreted over the life of the respective restaurant
leases, ranging from 17 to 25&nbsp;years.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Interest Expense.</FONT></I><FONT size="2">
Interest expense increased 0.9% as a percentage of sales during
fiscal 2003 versus the comparable prior year period primarily
due to higher weighted average outstanding debt balances.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Loss Related to
Refinancing.</FONT></I><FONT size="2"> Loss related to
refinancing consisted of $20.5&nbsp;million for the prepayment
and make-whole redemption fees, $11.0&nbsp;million write off of
financing costs related to the retired debt, $4.1&nbsp;million
of unamortized debt discount related to our 16% and
Buffets&#146; 14%&nbsp;senior subordinated notes due
September&nbsp;29, 2008, $2.1&nbsp;million paid to the holders
of the common stock warrants and $1.0&nbsp;million in expenses.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Income Taxes.</FONT></I><FONT size="2"> Income
taxes increased 0.1% as a percentage of sales for fiscal 2003
compared to the 50&nbsp;weeks ended July&nbsp;3, 2002. The
effective tax rate of 30.8% for the current year compared with
122.2% for the prior year period was largely attributable to the
elimination of goodwill amortization due to the adoption of
SFAS&nbsp;No.&nbsp;142, &#147;Goodwill and Other Intangible
Assets.&#148;
</FONT>

<P align="center"><FONT size="2">64
</FONT>

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><I><FONT size="2">For the 26-Week Transitional Period Ended
July&nbsp;3, 2002 Compared to the 28 Weeks Ended July&nbsp;18,
2001</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth our results of
operations based on the percentage relationship of the items
listed to our restaurant sales during the periods shown:
</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="58%"><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>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><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>
    <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="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">26-Week</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">28-Week</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Transitional</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Period Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Period Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">July&nbsp;18, 2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">July&nbsp;3, 2002</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="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

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

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15" 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="2">Restaurant sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">567,821</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100.0</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">527,084</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">100.0</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Restaurant costs
    </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">481,832</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">84.9</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">444,917</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">84.4</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">Advertising 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">15,708</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">2.8</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">14,349</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">2.7</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">General 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">26,700</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">4.7</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">25,687</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">4.9</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">Goodwill amortization
    </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">5,975</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">1.1</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">&#151;</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">&#151;</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><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 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><FONT size="2">&nbsp;</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">Operating 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">37,606</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">6.6</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">42,131</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">8.0</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">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">24,887</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">4.4</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">15,088</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">2.9</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">Interest 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">(324</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">(0.1</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">(212</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">(0.1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">Loss related to refinancing
    </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">&#151;</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">&#151;</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">38,724</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">7.3</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">Other 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">(493</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">(0.1</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">(598</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">(0.1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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><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 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><FONT size="2">&nbsp;</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">Income (loss) before income taxes
    </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">13,536</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">2.4</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">(10,871</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">(2.1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income tax expense (benefit)
    </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">7,735</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">1.4</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">(3,354</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">(0.6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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><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 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><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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,801</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,517</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">(1.4</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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><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 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><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

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

<P align="left">
<FONT size="2">Certain percentage amounts do not sum to total
due to rounding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Restaurant Sales.</FONT></I><FONT size="2">
Restaurant sales for the 26-week transitional period ended
July&nbsp;3, 2002 declined $40.7&nbsp;million, or 7.2%, compared
with the 28&nbsp;weeks ended July&nbsp;18, 2001. The decline in
sales was mostly due to the reduced number of operating weeks in
2002 versus the comparable period in 2001 associated with our
year-end change (two fewer weeks in 2002). Average weekly sales
for the 2002 transitional period of $51,044 were up 2.5% over
average weekly sales for the comparable 28-week period for 2001.
Same-store sales for the 2002 transitional period were up 0.2%
over the comparable period in 2001, reflecting a 2.1% increase
in pricing and a 1.9% decline in guest traffic.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Restaurant Costs.</FONT></I><FONT size="2">
Restaurant costs for the 2002 transitional period improved by
0.5% as a percentage of sales compared with the prior year
period primarily due to a decrease in food costs, partially
offset by an increase in restaurant management compensation and
an increase in workers&#146; compensation insurance. The food
cost reduction was primarily attributable to significant
improvement in meat prices experienced during the 2002
transitional period as compared to large price spikes incurred
in the first half of 2001.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Advertising
Expenses.</FONT></I><FONT size="2"> Advertising expenses ran
relatively constant as a percentage of sales, approximately 2.7%
of sales in the 2002 transitional period versus 2.8% in the
comparable period in 2001. Approximately 78% of our buffet units
received advertising support in the 2002 transitional period.
Same store sales among units receiving advertising support were
up 1.9% for the 2002 transitional period, versus overall system
results of only a 0.2% increase.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">General and Administrative
Expenses.</FONT></I><FONT size="2"> General and administrative
expenses were 4.9% of sales for the 2002 transitional period
compared with a total of 4.7% for the comparable prior year
period primarily due to increased incentive compensation costs
and some severance arrangements.
</FONT>

<P align="center"><FONT size="2">65
</FONT>

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Goodwill
Amortization.</FONT></I><FONT size="2"> Goodwill amortization
expense decreased 1.1% as a percentage of sales in the 2002
transitional period versus the prior year period due to the
adoption in January 2002 of SFAS&nbsp;No.&nbsp;142,
&#147;Goodwill and Other Intangible Assets,&#148; and its
non-amortization provisions for goodwill.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Interest Expense.</FONT></I><FONT size="2">
Interest expense decreased 1.5% as a percentage of sales during
the 2002 transitional period versus the comparable prior year
period due to lower weighted average outstanding debt balances
coupled with a decrease in the senior credit facility&#146;s
variable interest rates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Loss Related to
Refinancing.</FONT></I><FONT size="2"> Loss related to
refinancing consisted of $20.5&nbsp;million for the prepayment
and make-whole redemption fees, $11.0&nbsp;million write off of
financing costs related to the retired debt, $4.1&nbsp;million
of unamortized debt discount related to the 16% and
14%&nbsp;senior subordinated notes, $2.1&nbsp;million paid to
the holders of the common stock warrants and $1.0&nbsp;million
in expenses.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Income Taxes.</FONT></I><FONT size="2"> Income
taxes decreased 2.0% as a percentage of sales for the 2002
transitional period compared to the 28&nbsp;weeks ended
July&nbsp;3, 2001 principally due to a $24.4&nbsp;million
decrease in pre tax income. The effective tax rate for the
current period was 30.9% compared with 57.1% for the prior year
period, largely due to a decrease in goodwill amortization
associated with the buyout from public shareholders.
</FONT>

<P align="left">
<B><FONT size="2">Liquidity and Capital Resources</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are a holding company with no operations or
assets of our own other than the capital stock of our
subsidiaries. Operations are conducted through our subsidiaries
and our ability to make payments on the senior subordinated
notes and distributions on the IDSs is dependent on the earnings
and the distribution of funds from our subsidiaries through
loans, dividends or otherwise. However, none of our subsidiaries
is obligated to make funds available to us for payment on the
senior subordinated notes or dividends on the IDSs. The terms of
the Amended Credit Facility may place restrictions on
Buffets&#146; ability to pay dividends and otherwise transfer
assets to us.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cash flows generated from operating activities
provide us with a significant source of liquidity. Because most
of our sales are for cash or credit with settlement within a few
days and most vendors are paid on terms ranging from 14&nbsp;to
35&nbsp;days, we operate on a significant working capital
deficit. In addition to cash flows from operations, revolving
credit loans and swingline loans are available to us under the
Amended Credit Facility. Letters of credit issued under the
letter of credit facility are also available to us to support
payment obligations incurred for our general corporate purposes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Historically, our capital requirements have been
for the development and construction of new restaurants,
restaurant refurbishment and the installation of new information
systems. We expect these requirements to continue in the
foreseeable future.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Following the completion of the Transactions, our
short-term and long-term liquidity needs will arise primarily
from: interest payments, which are expected to be between
approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
in the first year after completion of the transaction; dividends
to stockholders, which are expected to be
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
year; capital expenditures, which are expected to be
approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
per year on average in both fiscal 2005 and 2006 (of which in
each year approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
is for maintenance capital expenditures and the remainder is for
additional restaurant units and our unit image enhancement
program); potential acquisitions; and working capital
requirements as may be needed to support business growth.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Following the completion of the Transactions, we
will use net proceeds received from this offering, together with
cash on hand and the net proceeds received from the offering by
Buffets of its Senior Notes and approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of borrowings under the Amended Credit Facility, to pre-fund our
capital expenditures program in the amount of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
repay all outstanding borrowings under the Existing Credit
Facility, repurchase Buffets&#146; 11&nbsp;1/4%&nbsp;Notes,
repurchase or redeem our 13&nbsp;7/8%&nbsp;Notes, repurchase
equity interests from our existing stockholders and pay
transaction fees and expenses in connection with this offering.
</FONT>

<P align="center"><FONT size="2">66
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Operating
Activities.</FONT></I><FONT size="2"> Net cash provided by
operating activities was $50.5&nbsp;million for fiscal 2004,
$57.7&nbsp;million for fiscal 2003, $39.3&nbsp;million for the
26-week transitional period ended July&nbsp;3, 2002
and$68.8&nbsp;million for fiscal 2001. Net cash provided by
operating activities exceeded the net income for the periods due
principally to the effect of depreciation and amortization, an
increase in accrued and other liabilities for 2001, losses
related to refinancing for 2002 and 2004, impairment of assets
and losses on sale-leaseback transactions in 2003 and 2004, and
loss related to early extinguishment of debt in 2004. Net cash
provided by operating activities in 2003 was partially reduced
by a $17&nbsp;million payment of accrued redemption fees
associated with our recapitalization in June 2002. The decrease
in cash provided by operating activities between fiscal 2004 and
fiscal 2003 was largely attributable to the timing of payments
on our accounts payable.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Investing
Activities.</FONT></I><FONT size="2"> Net cash provided by
investing activities was $26.7&nbsp;million for the year ended
July&nbsp;2, 2003 and $2.6&nbsp;million for fiscal 2001. Net
cash used in investing activities was $28.4&nbsp;million for the
year ended June&nbsp;30, 2004 and $11.3&nbsp;million for the
26&nbsp;weeks ended July&nbsp;3, 2002. We completed the sale and
leaseback of certain leasehold interests and leasehold
improvements with respect to 23 restaurant locations in 2001,
one location in 2002, 30 locations in 2003 and one in 2004. Net
proceeds from the transactions were approximately
$39.1&nbsp;million in 2001, $2.3&nbsp;million in 2002,
$26.1&nbsp;million in 2003 and $2.7&nbsp;million in 2004. The
aggregate initial annual rent associated with the sale-leaseback
transactions was $3.2&nbsp;million in 2001, $0.2&nbsp;million in
2002, $3.7&nbsp;million in 2003 and $0.3&nbsp;million in 2004.
We did not recognize a gain or loss on these transactions in
2001, 2002 or 2004, but recorded a loss of $5.9&nbsp;million in
2003. The losses primarily reflected the impairment of certain
of the properties for which the net proceeds were less than the
book value of the leasehold assets. In addition, the net
proceeds for certain of the properties were greater than the
book value of the leasehold assets resulting in a deferred gain
of $3.6&nbsp;million in 2003 and $0.3&nbsp;million in 2004. This
deferred gain is being accreted over the life of the respective
restaurant leases, ranging from 17 to 25&nbsp;years. In
addition, we completed the sale of 13&nbsp;Original Roadhouse
Grill restaurants in 2003 for approximately $28.4&nbsp;million
in net proceeds, of which $2.5&nbsp;million represented a
long-term note receivable. Capital expenditures in fiscal 2004
largely comprised re image expenditures for approximately
50&nbsp;restaurants in the sum of $18.2&nbsp;million, while
capital expenditures for prior periods primarily comprised new
store outlays and minor restaurant remodels. In 2004, we
undertook a re-imaging effort on approximately 50&nbsp;units
whereby the restaurant&#146;s interiors, and in some cases the
exteriors, were significantly improved. In addition to new wall
and floor coverings and extensive d&#233;cor upgrades, display
cooking stations were added. While guest feedback on display
cooking stations was generally positive, overall returns on this
component of the re-imaging program did not meet our
expectations. We intend to continue to remodel our restaurants
with many of the materials and d&#233;cor items included in the
2004 re-imaging program, but will limit the development of
display cooking in existing restaurants. While the price per
unit for the 2004 re-image campaign was approximately $360,000
per location, the expectation for future re-image expenditures
is between $125,000 and $200,000 per unit.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Financing
Activities.</FONT></I><FONT size="2"> Net cash used in financing
activities was $11.9 million for fiscal 2004, $76.8&nbsp;million
for fiscal 2003, $47.2&nbsp;million for the 26&nbsp;weeks ended
July&nbsp;3, 2002 and $59.6&nbsp;million for fiscal 2001. On
June&nbsp;28, 2002, Buffets, Inc. entered into new debt
agreements to refinance its then existing debt, make a
distribution to Buffets Holdings and repurchase Buffets
Holdings&#146; outstanding preferred stock warrants. In
connection with the transactions, we incurred a loss of
$38.7&nbsp;million. The loss related to refinancing consisted of
$20.5&nbsp;million for the prepayment and make-whole redemption
fees, $11.0&nbsp;million in write-offs of financing costs
related to the retired debt, $4.1&nbsp;million of unamortized
debt discount write-offs related to our 16% and Buffets&#146;
14%&nbsp;senior subordinated notes, $2.1&nbsp;million paid to
the holders of the common stock warrants and $1.0&nbsp;million
in expenses.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Future Capital
Expenditures.</FONT></I><FONT size="2"> During fiscal 2005, we
plan 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">Open between seven and eight new restaurants with
    an initial capital outlay of approximately $14&nbsp;million. We
    intend to arrange forward-funding arrangements, or build-to-suit
    arrangements, to the extent possible on prospective new store
    openings to reduce or eliminate these capital requirements by
    approximately $7&nbsp;million. In those instances where we are
    unable to arrange a
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">67
</FONT>

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<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></TD>
    <TD align="left">
    <FONT size="2">forward-funding arrangement, we intend to enter
    into sale and leaseback transactions to recover our initial
    capital outlay.
    </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">Spend approximately $13&nbsp;million on
    remodeling and improvement costs that will be capitalized.
    Remodels incorporate design elements to update the d&#233;cor of
    our existing facilities including a lighter, more contemporary
    interior design and expanded dessert displays. Other improvement
    costs include a variety of outlays such as new carpet, equipment
    and minor leasehold improvements.
    </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">Spend approximately $20&nbsp;million on the
    repair and maintenance of our existing restaurant locations that
    will be expensed. This amount is comparable, as a percentage of
    sales, to historical repair and maintenance spending patterns.
    This will encompass expenditures to keep equipment in good
    working order and leasehold improvements in good condition,
    without substantially extending the economic lives of the
    underlying assets.
    </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">Spend approximately $2&nbsp;million on
    miscellaneous corporate and system investments.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are not aware of any other event or trend that
would potentially affect our capital requirements or liquidity.
For the next twelve months, we believe that cash flow from
operations, the $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million in
cash on hand available for capital expenditures, landlord
contributions, credits received from trade suppliers and
available borrowing capacity will be adequate to finance our
development plans, on going operations and debt service
obligations.
</FONT>

<P align="left">
<B><I><FONT size="2">Credit Facilities and Other Long Term
Debt</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with this offering, Buffets will
enter into an Amended Credit Facility. The Amended Credit
Facility will provide for total borrowings of up to
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
including (i)&nbsp;a
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
term loan, (ii)&nbsp;a
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
revolving credit facility (which includes a
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
letter of credit sub-facility), (iii)&nbsp;a
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
letter of credit facility and (iv)&nbsp;a
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
synthetic letter of credit facility. The borrowings under the
term loan facility will bear interest, at our option, at either
adjusted LIBOR plus % or at an alternate base rate
plus &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%, subject to a
leverage-based pricing grid. The term loan and the synthetic
letter of credit facility will mature
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2011, while the revolving facility and the letter of credit
sub-facility will mature
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2009. The Amended Credit Facility will be fully and
unconditionally guaranteed by Buffets Holdings and all of
Buffets&#146; subsidiaries and will be secured by substantially
all of Buffets&#146; assets. Availability under the Amended
Credit Facility will depend upon our continued compliance with
certain covenants and financial ratios including leverage,
interest coverage and fixed charge coverage as specifically
defined in the amended credit agreement governing the Amended
Credit Facility. On a pro forma basis, as of June&nbsp;30, 2004,
we would have had
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in
outstanding letters of credit, the total borrowing availability
under the revolving credit facility would have been
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
the total borrowing under the letter of credit facilities would
have been
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with this offering, Buffets will
issue
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
aggregate principal amount of its Senior Notes
due &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2014. See &#147;Description of Other Indebtedness&nbsp;&#151;
Senior Notes of Buffets&#148; for further discussion of
Buffets&#146; Senior Notes. Interest is payable semi-annually on
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
each year. The indenture governing Buffets&#146; Senior Notes
will contain covenants limiting our ability, and the ability of
our subsidiaries, among other things, to (1)&nbsp;incur
additional indebtedness, (2)&nbsp;make restricted payments,
(3)&nbsp;create restrictions on the payment of dividends,
(4)&nbsp;sell assets or capital stock of subsidiaries,
(5)&nbsp;engage in transactions with affiliates, (6)&nbsp;sell
or issue capital stock of subsidiaries, (7)&nbsp;incur liens,
(8)&nbsp;engage in sale/leaseback transactions, and
(9)&nbsp;consolidate, merge or transfer assets. The payment of
principal, premium and interest on Buffets&#146; Senior Notes
will be fully and unconditionally guaranteed, jointly and
severally, by Buffets Holdings and all of Buffets&#146;
subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are offering
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
aggregate principal amount of senior subordinated notes hereby.
See &#147;Description of Senior Subordinated Notes&#148; for
further discussion of the senior subordinated notes. As of
June&nbsp;30, 2004, on a pro forma basis, after giving effect to
this offering, the application of net proceeds from this
offering and the prospective repurchase of a portion of
Buffets&#146; senior subordinated notes, our
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">debt would have been
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
of which
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
would have been indebtedness of our subsidiaries.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Seasonality and Quarterly
Fluctuations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our sales are seasonal, with a lower percentage
of annual sales occurring in most of our current market areas
during the winter months. Our restaurant sales may also be
affected by unusual weather patterns, major world events or
matters of public interest that compete for customers&#146;
attention. Generally, restaurant sales per unit are lower in the
winter months, our third fiscal quarter ending in April of each
year. The impact of these reduced average weekly sales are
mitigated in our quarterly data presentations through the
inclusion of 16&nbsp;weeks in the quarter ending in April of
each year, compared to only 12&nbsp;or 13&nbsp;weeks in each of
the other fiscal quarters.
</FONT>

<P align="left">
<B><FONT size="2">New Accounting Standards</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 2003, the Financial Accounting
Standards Board (FASB)&nbsp;issued FASB Interpretation No.
(FIN)&nbsp;46, &#147;Consolidation of Variable Interest
Entities, an Interpretation of ARB&nbsp;51.&#148; The primary
objectives of FIN&nbsp;46 are to provide guidance on the
identification of entities for which control is achieved through
means other than through voting rights (variable interest
entities, or VIEs) and how to determine when and which business
enterprise should consolidate the VIE (the primary beneficiary).
In December 2003, the FASB issued FIN&nbsp;46(R),
&#147;Consolidation of Variable Interest Entities,&#148; which
represents a revision to FIN&nbsp;46. The provisions of
FIN&nbsp;46(R) are effective for interests in VIEs as of the
first interim, or annual, period ending after March&nbsp;15,
2004. In addition, FIN&nbsp;46(R) requires that both the primary
beneficiary and all other enterprises with a significant
variable interest make additional disclosure in filings issued
after January&nbsp;31, 2003. We adopted FIN&nbsp;46(R) as of
December&nbsp;17, 2003 and its adoption had no impact on the our
consolidated results of operations, financial position or cash
flow.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In May 2003, the FASB issued
SFAS&nbsp;No.&nbsp;150, &#147;Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and
Equity.&#148; SFAS&nbsp;No.&nbsp;150 modifies the accounting for
certain financial instruments that, under previous guidance,
issuers could account for as equity. SFAS&nbsp;No.&nbsp;150
requires that those instruments be classified as liabilities in
statements of financial position. Most of the guidance in
SFAS&nbsp;No.&nbsp;150 is effective for all financial
instruments entered into or modified after May&nbsp;31, 2003, or
otherwise is effective at the beginning of the first interim
period beginning after June&nbsp;15, 2003. We adopted
SFAS&nbsp;No.&nbsp;150 as of July&nbsp;3, 2003 and its adoption
had no impact on our consolidated results of operations,
financial position or cash flow.
</FONT>

<P align="left">
<B><FONT size="2">Quantitative and Qualitative Disclosures About
Market Risk</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Interest Rate Risks.</FONT></I><FONT size="2">
We have interest rate exposure relating to the variable portion
of our long-term obligations. Buffets&#146;
11&nbsp;1/4%&nbsp;Notes and our 13&nbsp;7/8%&nbsp;Notes are
fixed. The senior subordinated notes being offered hereby and
Buffets&#146; Senior Notes being offered concurrently will be
fixed. The interest rates on the term loans under Buffets&#146;
Existing Credit Facility are variable. Based on the terms of
Buffets&#146; Existing Credit Facility and assuming that credit
facility had been in effect from the beginning of fiscal 2003, a
1% change in interest rates on our variable rate debt would have
resulted in our interest rate expense fluctuating by
approximately $2.2&nbsp;million for fiscal 2003 and
$1.9&nbsp;million for fiscal 2004. Our interest rate risk under
the Existing Credit Facility was mitigated, in part, by an
interest rate cap purchased on November&nbsp;25, 2002 with a
notional value of $15&nbsp;million and a 5% LIBOR strike price
that expired on June&nbsp;30, 2004. We expect that the Amended
Credit Facility will have a variable interest rate, subject to
any hedges we may put in place.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Food Commodity
Risks.</FONT></I><FONT size="2"> Many of the food products
purchased by us are affected by commodity pricing and are,
therefore, subject to price volatility caused by weather,
production problems, delivery difficulties and other factors
that are outside our control. To control this risk in part, we
have fixed price purchase commitments with terms of one year or
less for some key food and supplies from vendors who supply our
national food distributor. In addition, we believe that
substantially all of our food and supplies
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">are available from several sources, which helps
to control food commodity risks. We believe we have the ability
to increase menu prices, or vary the menu items offered, if
needed, in response to food product price increases within the
range that has been experienced historically. To compensate for
a hypothetical price increase of 10% for food and beverages, we
would need to increase menu prices by an average of
approximately 3%. Our average menu price increases were
approximately 2% for fiscal 2003 and 2% for fiscal 2004.
Accordingly, we believe that a hypothetical 10% increase in food
product costs would not have a material effect on our operating
results.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Contractual Obligations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table provides aggregate
information about our material contractual payment obligations
and the fiscal year in which these payments are due. These
obligations are as of June&nbsp;30, 2004 and do not give effect
to the Transactions.
</FONT>

<P align="center">
<B><FONT size="2">Payments Due by Fiscal Year</FONT></B>

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

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="36%"><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="2%"><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="2%"><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="2%"><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="2%"><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="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="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2006</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2007</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2008</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Thereafter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</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>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">(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="2">Long-term debt(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">551,065</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">560,265</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">Operating leases(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">53,913</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">52,713</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">50,482</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">48,346</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">327,601</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">533,055</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">Advisory fees(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">3,504</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">3,379</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">3,266</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">3,266</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">&#151;</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">13,415</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>
    <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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total contractual cash obligations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59,717</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,392</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56,048</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,912</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">878,666</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,106,735</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>
    <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>

</TABLE>
</CENTER>

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

<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">Long-term debt payments for fiscal 2005 and
    beyond represent the required debt payments on our Existing
    Credit Facility, Buffets&#146; 11&nbsp;1/4% Notes and our
    13&nbsp;7/8% Notes.
    </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">Operating leases is comprised of minimum rents
    and contingent rents. Operating leases have not been reduced by
    minimum sublease rentals of approximately $24,902,000. See Note
    10 to our consolidated financial statements included elsewhere
    in this prospectus for details of our operating lease
    obligations.
    </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">The advisory fees comprise our contractual
    obligation to pay annual advisory fees to each of Roe&nbsp;H.
    Hatlen, Sentinel Capital Partners, L.L.C. and Caxton-Iseman
    Capital. See &#147;Certain Relationships and Related
    Transactions.&#148; Under the terms of these agreements,
    Mr.&nbsp;Hatlen and Sentinel Capital are each paid a fixed-price
    annual fee. The fee of Caxton-Iseman is calculated as a
    percentage of our earnings before interest, taxes, depreciation
    and amortization, which in fiscal 2004 resulted in a payment of
    $3.1 million. This figure has been used as an estimate for our
    obligations under that agreement for fiscal 2005 and each fiscal
    year thereafter. The agreements with Caxton-Iseman and Sentinel
    Capital are of perpetual duration, and hence no estimate of the
    aggregate amount of future obligations (represented in the
    &#147;Thereafter&#148; column, above) is provided.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">70
</FONT>

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

<P align="left">
<B><FONT size="2">Other Commercial Commitments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table provides aggregate
information about our commercial commitments and the fiscal year
in which they expire:
</FONT>

<P align="center">
<B><FONT size="2">Amount of Commitment Expiration by Fiscal
Year</FONT></B>

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

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="46%"><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="2%"><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="1%"><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="1%"><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="1%"><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="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2005</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2006</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2007</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2008</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Thereafter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</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>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">(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="2">Letters of credit(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,102</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">Management loan guarantees(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">&#151;</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">&#151;</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">&#151;</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">&#151;</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">125</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">125</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>
    <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 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 commercial commitments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">125</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,227</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>
    <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>
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    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Our outstanding letters of credit expire at
    various times with final expirations May 2005. As of
    June&nbsp;30, 2004, the total borrowing availability under the
    revolving credit facility was $30.0 million and the total
    borrowing capacity under the letter of credit facilities was
    $14.9 million.
    </FONT></TD>
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<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The management loan guarantees comprise our
    guarantee on loans provided by U.S. Bank to certain members of
    management. See &#147;Certain Relationships and Related
    Transactions.&#148;
    </FONT></TD>
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<P align="center">
<B><FONT size="2">BUSINESS</FONT></B>

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Buffets Holdings was formed to acquire Buffets in
a buyout from public shareholders on October&nbsp;2, 2000.
Buffets Holdings is a holding company whose assets consist
substantially of the capital stock of Buffets, and we conduct
virtually all of our business through Buffets and its
subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Founded in 1983, Buffets is the twentieth largest
restaurant operator in the United States and is the largest
operator of company-owned stores in the buffet/grill segment, as
measured in both sales and number of restaurants. Our
restaurants are principally operated under the names Old Country
Buffet and HomeTown Buffet. As of June&nbsp;30, 2004, we had
360&nbsp;company-owned restaurants and 20 franchised locations
in 38&nbsp;states. We offer excellent customer service, together
with a convenient, value-priced selection of home-style cooked
meals in a self-service buffet format. For fiscal 2004, we
generated net sales of $942.8&nbsp;million and served
approximately 131&nbsp;million customers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our restaurants provide a high level of food
quality and service through uniform operational standards
developed at the corporate level. Freshness is ensured by
preparing food in small batches of six to eight servings at a
time, with preparations and production adapted to current
customer traffic patterns. Our buffet restaurants utilize
uniform menus, recipes and ingredient specifications, with
certain discretion to adapt menus for regional preferences. We
offer approximately 100 menu items at each meal, including
entrees, soups, salads, fresh vegetables, non-alcoholic
beverages and desserts. Typical entrees include chicken, carved
roast beef, ham, shrimp, salmon, peppered pork loin, fish and
casseroles.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our buffet restaurants use an all-inclusive
pricing strategy designed to provide dining value to our
customers. As of June&nbsp;30, 2004, the meal price at our
buffet restaurants for dinner ranged from $8.59 to $9.59 and for
lunch from $6.49 to $7.19, with discounts offered to senior
citizens and children. The average guest check in our
restaurants, including our Tahoe Joe&#146;s Famous Steakhouses,
for fiscal 2004 was $7.22. In order to further enhance our
guests&#146; dining experience, we have focused on providing a
level of customer service designed to enhance the self-service
buffet format, including such features as limited table-side
service and our scatter-bar layout.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our buffet restaurants average approximately
9,900&nbsp;square feet in size and can generally seat between
225 and 400 people. On average, our buffet restaurants served
approximately 7,000 customers per week during fiscal 2004. While
we attract a broad demographic profile of customers, including
families, senior citizens and singles, our customer surveys
indicate that approximately two-thirds of our guests are married
and over half are between the ages of 25 and 54&nbsp;years old
(the largest segment of the population within the United States).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have a national footprint of restaurant
locations, which are strategically concentrated in particular
regions to maximize penetration within those markets and achieve
operating and advertising synergies. For example, our television
advertising program in 38 designated market areas provided media
coverage for 62% of our buffet restaurants during fiscal 2004.
In addition, our restaurants are located in high customer
traffic venues and include both freestanding units and units
located in shopping centers and malls. As of June&nbsp;30, 2004,
69% of our restaurants were located in shopping centers or malls
and 31% were freestanding units.
</FONT>

<P align="left">
<B><FONT size="2">Industry Overview</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The restaurant industry is among the largest
industries in the United States and according to Technomic,
Inc., an independent research organization, has grown at an
average annual rate of 7.3% from 1975 through 2002. The
restaurant industry can be divided into three main segments:
full-service restaurants, quick-service restaurants, and other
miscellaneous establishments. Full-service restaurants include
the mid-scale, casual dining and upscale (fine dining) segments.
The mid-scale segment, which includes buffet/grill restaurants,
is characterized by complete meals, menu variety and moderate
prices. The casual dining segment, which typically has higher
menu prices and generally offers alcoholic
</FONT>

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<FONT size="2">beverages, includes a small number of national
chains, regional chains and independent operators. The
quick-service segment is characterized by lower average checks,
portable meals, fast service and convenience. We operate in the
$3.0&nbsp;billion buffet/grill sector within the mid-scale
segment, which has grown at a compound annual growth rate of
6.2% from 1997 through 2002. We believe the appeals of the
buffet concept are its full line of food offerings and
all-you-care-to-eat format, and that this format drives greater
price/value perception in the customer&#146;s eyes.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Growth in the restaurant industry, and the
buffet/grill sector in particular, has been driven by the
increasing demands for dining ease and convenience among
today&#146;s consumers. The restaurant industry&#146;s portion
of the total food industry&#146;s dollar has grown significantly
in the past two decades. According to Technomic, the restaurant
industry&#146;s share of total food sales has increased from 23%
in 1980 to approximately 31% in 2003. This growth is expected to
continue as a result of several key lifestyle and demographic
trends, including the continued increase in spending on food
away from the home and on restaurant dining and the continued
growth in disposable incomes among the key age groups of the
population frequenting our restaurants.
</FONT>

<P align="left">
<B><FONT size="2">Our Competitive Strengths</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe our leading market position, strong
cash flow, flexible cost structure, motivated and trained
employees, centralized control measures, attractive unit level
economics and proven management team will allow us to grow sales
and increase profitability.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Leading Market Position with National
Scale.</FONT></I><FONT size="2"> We are the twentieth largest
restaurant operator in the United States and the largest
operator of company-owned stores in the buffet/grill sector, as
measured in both sales and number of restaurants. We accounted
for approximately 32% of total sales within this estimated
$3.0&nbsp;billion sector. We believe that we benefit from our
long-term operating history, significant operational
efficiencies and economies of scale due to our large number of
restaurants and our centralized operating and purchasing
systems. We believe that we are able to achieve substantial
levels of savings as a result of our size and related purchase
volumes, particularly with respect to food and beverage goods.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Strong Cash Flow
Generation.</FONT></I><FONT size="2"> Our strong operating
results and favorable working capital characteristics are key
drivers of our strong cash flow. Over the last seven fiscal
years, our maintenance capital expenditures have averaged
approximately 1.2% of sales, while our ongoing maintenance
expenses have averaged approximately 2.0% of sales. We believe
our restaurants are well-maintained and will require a
historically consistent level of required maintenance
expenditures in the future. In addition, we typically generate
cash flow from working capital as we receive cash for the
majority of our sales immediately at the point of service and
most vendors are paid on terms ranging to 35&nbsp;days.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Flexible Operating
Model.</FONT></I><FONT size="2"> As a buffet-style restaurant
with a broad selection of food, we are not tied to a particular
menu item enabling us to quickly modify our offerings in
response to changes in customer preferences and food costs. Our
food offerings are very diversified, with no individual food
product purchase cost accounting for more than 5% of our
restaurant sales. In the event of an increase in the cost of a
particular food product, we are able to highlight other foods on
the menu in order to reduce consumption of the higher cost item.
In addition to food cost tracking, we are also able to manage
our operating margins through controlling our general and
administrative expenses and varying our labor cost model by
restructuring layers of store-level management.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Highly Trained and Motivated
Employees.</FONT></I><FONT size="2"> Our most important asset is
our people. We believe a well trained and motivated workforce
results in lower turnover, lower operating costs and the ability
to consistently grow sales in existing units. Our general
managers have an average of over seven years of experience with
us. During fiscal 2004, our buffet restaurant general manager
annualized turnover was approximately 14% and total buffet
restaurant management annualized turnover was approximately 24%,
which we believe are among the lowest turnover rates in the
industry. We are deeply committed to the long-term development
of our employees. In fiscal 2004, we spent $3.4&nbsp;million on
training and development. All of our buffet restaurant managers
receive extensive training relating to all aspects of restaurant
management at Buffets College, our training program operated out
of our corporate
</FONT>

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<FONT size="2">headquarters. We further seek to reinforce our
employees&#146; commitment through targeted retention programs.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Centralized Control
Measures.</FONT></I><FONT size="2"> We maintain rigorous
financial controls, service and food quality in all of our
buffet restaurants using uniform operational standards developed
at the corporate level and implemented at the restaurant level.
Our centralized systems enable management to evaluate weekly
profit and loss statements, sales reports and supplier invoices
for each buffet restaurant, allowing us to quickly identify
performance trends and key profitability drivers. These systems
are supplemented by several performance audit and evaluation
programs, including a 1-(800) guest service line, an ongoing
system-wide guest satisfaction survey system and detailed
quarterly restaurant performance audits by multi-unit managers.
These ongoing efforts assist management in tracking restaurant
performance and customer satisfaction at the individual
restaurant level. We believe that centralized coordination of
our nationwide network of buffet restaurants assures a
consistent level of food quality in our restaurants and enables
us to negotiate pricing terms for major product purchases
directly with manufacturers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Attractive Unit Level
Economics.</FONT></I><FONT size="2"> Over 94% of our
company-owned stores produced positive store-level cash flow for
fiscal 2004. Our existing restaurants generated average weekly
restaurant sales of $49,949 for fiscal 2004. We believe that our
store-level cash flow before occupancy costs compares favorably
to other restaurants in the buffet/grill sector on an equivalent
basis and that our higher average sales volume is due to
disciplined site selection and penetration in our core markets,
providing operating and marketing synergies. Our buffet
restaurants opened in fiscal 2001 through fiscal 2004 generally
became profitable by the 4th&nbsp;week of opening and generated
average annualized sales of $3.2&nbsp;million in their first
year of operation. As measured by cash-on-cash returns, defined
as first year restaurant level cash flow as a percentage of
initial cash investment, our restaurants opened in the last four
years have produced cash-on-cash returns of over 25% in their
first year of operation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Proven Management Team with Equity
Ownership.</FONT></I><FONT size="2"> Over the past
20&nbsp;years, we have attracted and built an exceptionally
talented and complementary executive management team with an
average of over 20&nbsp;years of restaurant industry experience.
Our executive management team has demonstrated strong restaurant
operating capabilities by adapting our strategies in challenging
business climates to deliver consistent cash flow. In addition,
our senior management has significant equity ownership of our
company.
</FONT>

<P align="left">
<B><FONT size="2">Our Business Strategy</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our success has been driven by an emphasis on
food quality, a focus on restaurant level operations,
disciplined capital expenditures and adherence to uniform
system-wide operational standards. Our goal is to provide
exceptional value to maintain customer loyalty and drive
increased guest traffic. We plan to continue to improve our
operating performance through the principal strategies outlined
below:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Growth of Same Store Sales and Margin
Expansion.</FONT></I><FONT size="2"> We are focused on growing
same store sales and margins through operational initiatives at
the restaurant level. These initiatives include:
</FONT>
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    <TD align="left">
    <FONT size="2">emphasis on food quality through our
    &#147;Back-to-Scratch&#148; initiative on most protein offerings
    and our nationwide roll-out of enriched food offerings, such as
    boneless peppered pork loin, orange chicken with jasmine rice
    and baked salmon, designed to attract and retain guests through
    high quality menu offerings,
    </FONT></TD>
</TR>

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

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    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">theme promotions, where a specific cuisine, such
    as BBQ, Italian, Asian, Seafood or Mexican, is highlighted on a
    given night, designed to keep the experience fresh for repeat
    customers and to capitalize on local market preferences,
    </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 promotion of well-informed choices by
    providing nutritional information to our guests and enabling
    them to make good personal food decisions,
    </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">disciplined return-on-investment-based approach
    to advertising expenditures, designed to increase the efficiency
    of our marketing dollars by focusing on high-return markets and
    specific theme promotions,&nbsp;and
    </FONT></TD>
</TR>

</TABLE>

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    <TD align="left">
    <FONT size="2">focus on store-level operating costs by
    continuously adjusting our store level labor to minimize labor
    costs while maintaining exceptional customer service and
    high-quality food offerings.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Disciplined Capital
Spending.</FONT></I><FONT size="2"> We employ a disciplined
approach to capital expenditures that targets a high return on
its investment.
</FONT>
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    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Disciplined Restaurant
    Development</FONT></I><FONT size="2">&nbsp;&#151; We plan to
    grow in a disciplined manner by continuing to improve our
    restaurant base through strategically adding a limited number of
    restaurants in markets where we have advertising and operational
    efficiencies and closing a limited number of restaurants which
    do not meet our profitability goals. We will continue to focus
    on adding new restaurants in sites that offer high levels of
    traffic and are convenient to both lunch and dinner customers in
    our target demographic groups. Our new locations should offer
    low occupancy costs and upfront capital investments. To reduce
    our initial capital outlay for new store construction, we will
    seek to enter into build-to-suit arrangements with landlords and
    sale and leaseback programs. We have completed sale and
    leaseback transactions in respect of 55 restaurants in the last
    four fiscal years. We expect our new restaurant openings to
    require net capital investments of $1.0&nbsp;million, primarily
    for equipment and furnishings. In 2005, we plan to open seven to
    eight new restaurants and approximately five per year thereafter.
    </FONT></TD>
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    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Emphasis on Improving Existing
    Units</FONT></I><FONT size="2">&nbsp;&#151; We remain committed
    to maintaining and upgrading our restaurants to maintain
    customer appeal. We periodically update our restaurants to
    reflect a more contemporary interior design that provides a more
    visually appealing and comfortable restaurant interior. Location
    refurbishments typically occur approximately every five to seven
    years and cost approximately $125,000 to $200,000&nbsp;per unit.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Our Background</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Buffets Holdings was formed by Caxton-Iseman
Capital, Inc. in 2000. On October&nbsp;2, 2000, we acquired
Buffets in a buyout from its public shareholders. Caxton-Iseman
Investments L.P. and certain other investors, including members
of management, made an equity investment in us and became the
beneficial owners of 100% of our common stock. Buffets Holdings
is a holding company whose assets consist substantially of the
capital stock of Buffets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Buffets was founded in 1983 to develop
buffet-style restaurants under the name Old Country Buffet. In
October 1985, Buffets successfully completed an initial public
offering with seven restaurants, and by 1988 had
47&nbsp;company-owned units and nine franchised units. In
September 1996, Buffets merged with HomeTown Buffet, Inc., a
similar publicly-held scatter-bar, buffet-style restaurant
company established and developed by one of our co-founders. The
merger brought the total number of restaurants to
346&nbsp;company-owned restaurants and 24 franchised restaurants
in 36&nbsp;states at December&nbsp;31, 1996.
</FONT>

<P align="left">
<B><FONT size="2">Buffet Restaurant Operations and
Controls</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to maintain a consistently high level of
food quality and service in all of our restaurants, we have
established uniform operational standards. These standards are
developed at the corporate level and implemented by the managers
of each restaurant. We require all restaurants to be operated in
accordance with rigorous standards and specifications relating
to the quality of ingredients, preparation of food, maintenance
of premises and employee conduct.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each buffet restaurant typically employs a Senior
General Manager or General Manager, Kitchen Manager, Service
Manager and one or two assistant managers. Each of our
restaurant General Managers has primary responsibility for
day-to-day operations in one of our restaurants, including
customer relations, food service, cost controls, restaurant
maintenance, personnel relations, implementation of our policies
and the restaurant&#146;s profitability. A portion of each
general manager&#146;s and other restaurant managers&#146;
compensation depends directly on the restaurant&#146;s
profitability. Bonuses are paid to buffet restaurant managers
each period based on a formula percentage of controllable
restaurant profit. We believe that our
</FONT>

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<FONT size="2">compensation policies have been important in
attracting, motivating and retaining qualified operating
personnel.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each buffet restaurant general manager reports to
an Area Manager or a District Representative, each of whom in
turn reports to a Regional Vice President. The Regional Vice
Presidents report to one of two Vice Presidents of Operations,
who in turn report to our executive team. Our Tahoe Joe&#146;s
Famous Steakhouse restaurants, and some test efforts, are
supervised by Division Heads reporting directly to our Chief
Executive Officer.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We maintain centralized financial and accounting
controls for all of our restaurants. On a daily basis,
restaurant managers forward customer counts, sales, labor costs
and deposit information to our headquarters. On a weekly basis,
restaurant managers forward a summarized profit and loss
statement, sales report, supplier invoices and payroll data.
</FONT>

<P align="left">
<B><FONT size="2">Management Training</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have a series of training programs that are
designed to provide managers with the appropriate knowledge and
skills necessary to be successful in their current positions.
All new restaurant managers hired from outside our organization
and hourly employees considered for promotion to restaurant
management are required to complete nine days of classroom
training at our corporate headquarters in Eagan, Minnesota.
After their initial instruction, new management candidates
continue their training for four weeks in one of our certified
training restaurants. The information covered in manager
training includes basic management skills, food production,
labor management, operating programs and human resource
management.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Advancement is tied to both current operational
performance and training. Individuals designated for promotion
to the position of General Manager attend a specialized
eight-day training program conducted at our corporate
headquarters. This program focuses on advanced management skills
with emphasis on team building and performance accountability.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to these programs, we conduct a
variety of field training efforts for store management covering
topics such as new product procedures, food safety and
management development.
</FONT>

<P align="left">
<B><FONT size="2">Research and Development, Menu Selection and
Purchasing</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The processes of developing new food offerings
and establishing standard recipes and product specifications are
handled at our headquarters. Specialists drawn from the Research
and Development, Marketing, Operations and Purchasing
Departments lead this effort. Before new items are introduced or
existing products are modified, a program of testing within
limited markets is undertaken to assess customer acceptance and
operational feasibility. Food quality is maintained through
centralized supplier coordination suppliers and frequent
restaurant visits by Area Directors, District Representatives
and other management personnel.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">New product activity includes an ongoing roll-out
of new items to keep the guest experience fresh. Additionally,
we have periodic theme promotions, wherein a specific cuisine,
such as BBQ, Italian, Asian, Seafood or Mexican, is highlighted
on a given night. Each spring and fall, a seasonal menu is
introduced to provide variety and more seasonally appropriate
food. Furthermore, although most of the menu is similar for all
buffet restaurants, individual restaurants have the option to
customize a portion of the menu to satisfy local preferences.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Headquarters personnel negotiate major product
purchases directly with manufacturers on behalf of all of our
restaurants for food, beverage and supply purchasing, including
quality specifications, delivery schedules and pricing and
payment terms. Each restaurant manager places orders for
inventories and supplies with, and receives shipments directly
from, distributors and local suppliers approved by us.
Restaurant managers approve all invoices before forwarding them
to our headquarters for payment. To date, we have not
experienced any material difficulties in obtaining food and
beverage inventories or restaurant supplies.
</FONT>

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<P align="left">
<B><FONT size="2">Franchising</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We currently franchise 20 buffet restaurants
under the Old Country Buffet and HomeTown Buffet names. One
large franchisee comprises approximately 75% of the franchise
base with small operators holding the remaining units.
Franchisees must operate their restaurants in compliance with
our operating and recipe manuals. Franchisees are not required
to purchase food products or other supplies through us or our
suppliers. Each franchised restaurant is required at all times
to have a designated Manager and Assistant Manager who have
completed the required manager training program.
</FONT>

<P align="left">
<B><FONT size="2">Advertising and Promotion</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We market our buffet restaurants through a
two-tiered marketing approach including mass media advertising
and community based marketing. Mass media advertising,
predominantly television, is used when we can receive a
profitable return on expenditures. Our mass media mix includes
television advertisements and the limited use of print
advertisements, radio advertisements and tour bus marketing. For
fiscal 2004, approximately 62% of our buffet restaurants were in
markets supported by television advertisements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have instituted a disciplined approach to
advertising expenditures, designed to increase the efficiency of
our marketing dollars by focusing on high-return markets and
specific theme promotions. Our theme promotions where a specific
cuisine, such as BBQ, Italian, Asian, Seafood or Mexican is
highlighted on a given night, is designed to keep the guest
experience fresh and capitalize local market preferences.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Community based marketing is the responsibility
of each individual store. Our local marketing efforts are
designed to build relationships with the community. Most
restaurants employ a dedicated community marketing
representative who participates in an array of local events.
</FONT>

<P align="left">
<B><FONT size="2">Competition</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The food service industry is highly competitive.
Menu, price, service, convenience, location and ambiance are all
important competitive factors. The relative importance of many
such factors varies among different segments of the consuming
public. By providing a wide variety of food and beverages at
reasonable prices in an attractive and informal environment, we
seek to appeal to a broad range of value-oriented consumers. We
believe that our primary competitors in this industry segment
are other buffet and grill restaurants, as well as traditional
family and casual dining restaurants with full menus and table
service. Secondary competition arises from many other sources,
including home meal replacement and fast food. We believe that
our success to date has been due to our particular approach
combining pleasant ambiance, high food quality, wide menu
breadth, cleanliness, reasonable prices, and satisfactory levels
of service and convenience.
</FONT>

<P align="left">
<B><FONT size="2">Regulation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each of our restaurants is subject to licensing
and regulation by the health, sanitation, safety, building and
fire agencies of the respective states and municipalities in
which they are located. A failure to comply with one or more
regulations could result in the imposition of sanctions,
including the closing of facilities for an indeterminate period
of time or third-party litigation, any of which could have a
material adverse effect on us and our results of operations.
Additionally, our restaurants must be constructed to meet
federal, state and local building and zoning requirements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are also subject to laws and regulations
governing our relationships with employees, including minimum
wage requirements, overtime, reporting of tip income, work and
safety conditions and regulations governing employment. Because
a significant number of our employees are paid at rates tied to
the federal minimum wage, an increase in such minimum wage would
increase our labor costs. An increase in the federal minimum
wage, state-specific minimum wages, or employee benefits costs
could have a material adverse effect on us and our results of
operations.
</FONT>

<P align="center"><FONT size="2">77
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additionally, our operations are regulated
pursuant to state and local sanitation and public health laws.
Operating restaurants utilize electricity and natural gas, which
are subject to various federal and state regulations concerning
the allocation and pricing of energy. Our operating costs have
been and will continue to be affected by increases in the cost
of energy. These energy costs have undergone large cyclical
swings in recent years and have had a disproportionate impact in
our most favorable markets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each of our Tahoe Joe&#146;s Famous Steakhouse
restaurants is further subject to licensing and regulation by a
number of governmental authorities, including alcoholic beverage
control agencies, in the state, county and municipality in which
the restaurant is located. Difficulties or failures in obtaining
the required licenses or approvals could delay or prevent the
opening of a new restaurant in a particular area. Alcoholic
beverage control regulations require restaurants to apply to a
state authority and, in some locations, to county or municipal
authorities for a license or permit to sell alcoholic beverages
on the premises and to provide service for extended hours and on
Sundays. Typically, licenses or permits must be renewed annually
and may be revoked or suspended for cause at any time. Alcoholic
beverage control regulations relate to numerous aspects of a
restaurant&#146;s operations, including the minimum age of
patrons and employees, the hours of operation, advertising, and
the wholesale purchasing, inventory control and handling,
storage and dispensing of alcoholic beverages.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In California, we may be subject to &#147;Dram
Shop&#148; statutes, which generally provide a person injured by
an intoxicated patron the right to recover damages from an
establishment that wrongfully served alcoholic beverages to the
intoxicated person. We carry liquor liability coverage as part
of our existing comprehensive general liability insurance.
</FONT>

<P align="left">
<B><FONT size="2">New Restaurant Development</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We plan to grow in a disciplined manner by
continuing to improve our restaurant base through strategically
adding a limited number of restaurants in markets where we have
advertising and operational efficiencies and closing a limited
number of restaurants which do not meet our profitability goals.
We will continue to focus on adding new restaurants in sites
that offer high levels of traffic and are convenient to both
lunch and dinner customers in our target demographic groups. Our
new locations should offer low occupancy costs and upfront
capital investments. We plan to lease new units through build to
suit arrangements, whereby a landlord develops a free-standing
building shell for long-term single tenant rental to us, to the
extent possible. This strategy should significantly reduce our
initial capital outlay for new store construction. Additionally,
we will continue to employ a sale and leaseback program on
free-standing units not developed through a build-to-suit
program. Through this sale and leaseback process, in which the
land and/or building shell of a unit is sold to a third party
and leased back on a single tenant basis, much of the
construction cost associated with a new unit can be deferred and
recognized over a long-term rental period (generally
15-20&nbsp;years). In 2005, we plan to open between seven to
eight new restaurants.
</FONT>

<P align="left">
<B><FONT size="2">Improvement of Existing Restaurants</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We remain committed to maintaining and upgrading
our restaurants to expand our guest base and maintain our appeal
among repeat customers. Our interior remodeling program takes
advantage of scheduled maintenance capital expenditures to
update our restaurants to reflect a more contemporary interior
design that provides a more visually appealing and comfortable
restaurant interior. We plan on upgrading our units with a new
interior d&#233;cor package over the next five to seven years as
they become due for a recurring refurbishment. Through this
phased approach, we can minimize incremental capital
expenditures, while providing a better and more contemporary
dining environment for our guests. Our planned remodeling effort
will focus on interior d&#233;cor elements which have resonated
well with guests. We will also conduct limited testing on the
development of display cooking facilities or &#147;action
stations&#148; in a few of our restaurants. These action
stations provide a more interactive and exciting dining
experience for our guests through display cooking and limited
&#147;cook to order&#148; items, such as omelettes and panini
sandwiches. We will be focused on improving the rate of return
on these action stations, which will govern the extent of future
deployment.
</FONT>

<P align="center"><FONT size="2">78
</FONT>

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<P align="left">
<B><FONT size="2">Environmental Matters</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our operations are also subject to federal, state
and local laws and regulations relating to environmental
protection, including regulation of discharges into the air and
water. Under various federal, state and local laws, an owner or
operator of real estate may be liable for the costs of removal
or remediation of hazardous or toxic substances on or in such
property. Such liability may be imposed without regard to
whether the owner or operator knew of, or was responsible for,
the presence of such hazardous or toxic substances. Although we
are not aware of any material environmental conditions on our
properties that require remediation under federal, state or
local law, we have not conducted a comprehensive environmental
review of our properties or operations. We cannot assure you
that we have identified all of the potential environmental
liabilities at our properties or that such liabilities will not
have a material adverse effect on our financial condition.
</FONT>

<P align="left">
<B><FONT size="2">Property</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our restaurants are located in both urban and
suburban areas in a variety of shopping centers, malls and
freestanding buildings. We lease all of our restaurant locations
located in shopping centers and malls. All but one of the 112
freestanding restaurants are operated in company-funded
leasehold improvements located on leased land or in facilities
where we lease both the underlying land and the leasehold
improvements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our leases are generally for 10- or 15-year
terms, with two to four options exercisable at our discretion to
renew for a period of five years each. The leases provide for
rent to be paid on a monthly basis.
</FONT>

<P align="center"><FONT size="2">79
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2004, we and our franchisees
operated 380 locations as follows:
</FONT>

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

<TR>
    <TD width="54%"><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="3%"><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="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="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">Number of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total Number</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Company-Operated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Franchised</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">of</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">State</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Restaurants</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Restaurants</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Restaurants</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>
    <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">Arizona
    </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</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">12</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">California
    </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">95</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</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">96</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">Colorado
    </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">12</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">14</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">Connecticut
    </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</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">&#151;</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Delaware
    </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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</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><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>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Florida
    </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">&#151;</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Georgia
    </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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</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><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>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Idaho
    </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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</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><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">Illinois
    </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">32</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">&#151;</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">32</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">Indiana
    </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">&#151;</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Iowa
    </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">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">&#151;</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>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Kansas
    </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">&#151;</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Kentucky
    </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">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">&#151;</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Maine
    </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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</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><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">Maryland
    </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</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">&#151;</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>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Massachusetts
    </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">&#151;</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Michigan
    </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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</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><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>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minnesota
    </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">15</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">&#151;</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">15</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">Missouri
    </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">&#151;</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>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Montana
    </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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</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><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">Nebraska
    </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">&#151;</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">3</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">New Jersey
    </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">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">&#151;</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">New Mexico
    </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">&#151;</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>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">New York
    </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">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">&#151;</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">North Carolina
    </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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</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><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>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ohio
    </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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</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><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">Oklahoma
    </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">&#151;</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>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Oregon
    </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</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">&#151;</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pennsylvania
    </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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</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><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>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Rhode Island
    </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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</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><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">South Carolina
    </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">&#151;</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>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Tennessee
    </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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</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><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">Texas
    </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">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">&#151;</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>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Utah
    </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">&#151;</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">3</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">Virginia
    </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">&#151;</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>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Washington
    </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">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">&#151;</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Wisconsin
    </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">12</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">&#151;</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">12</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">Wyoming
    </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>
    <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>
    <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>
    <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 valign="bottom" bgcolor="#EEEEEE">
    <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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">360</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">20</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">380</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our corporate headquarters is located in leased
facilities in Eagan, Minnesota.
</FONT>

<P align="center"><FONT size="2">80
</FONT>

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth certain
information concerning our owned property as follows:
</FONT>

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

<TR>
    <TD width="44%"><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="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="44%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Location</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Acres</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Use and Ownership</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>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Coon Rapids, Minnesota
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2.49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">OCB Restaurant Co. property for newly relocated
    buffet restaurant.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Marshfield, Wisconsin
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5.04</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Cabinet shop owned by OCB Restaurant Co.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Mankato, Minnesota
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1.60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Undeveloped OCB Restaurant Co. property.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Trademarks and Other Intellectual
Property</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2004, we had company-owned
restaurants operating under the following trademarks or service
marks that we have registered with the United States Patent and
Trademark Office. (the number within parentheses below
represents the number of restaurants):
</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">Old Country Buffet&#174; (180),
    </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">HomeTown Buffet&#174; (168),
    </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">Country Roadhouse Buffet&nbsp;&#38; Grill&#174;
    (1), 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">Soup &#145;N Salad Unlimited&#174; (2).
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, as of June&nbsp;30, 2004, we had
company-owned restaurants operating under the following
trademarks or service marks: Granny&#146;s
Buffet<SUP>SM</SUP>&nbsp;(1) and Tahoe Joe&#146;s Famous
Steakhouse<SUP>SM</SUP>&nbsp;(8) for which we have federal
registrations for Tahoe Joe&#146;s&#174;. As far as we are
aware, our trademarks and registered service marks are generally
valid and enforceable as long as the marks are used in
connection with our restaurants and services. We regard our
service marks and trademarks as having significant value and
being an important factor in the development of our buffet and
other restaurant concepts. Our policy is to pursue and maintain
registration of our service marks and trademarks whenever
practicable and to oppose vigorously infringement or dilution of
our service marks and trademarks.
</FONT>

<P align="left">
<B><FONT size="2">Litigation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are not a party to and do not have any
property that is the subject of any legal proceedings pending
or, to our knowledge, threatened, other than ordinary routine
litigation incidental to our business and proceedings which are
not material or as to which we believe we have adequate
insurance.
</FONT>

<P align="left">
<B><FONT size="2">Employees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2004, we had approximately
23,000 employees. Except for approximately 370 corporate
employees who primarily worked at our corporate headquarters,
our employees worked at our company-owned restaurants.
Generally, each buffet restaurant operates with three to five
salaried managers and assistant managers and approximately
59&nbsp;hourly employees. Our employees are not unionized. We
have never experienced any significant work stoppages and
believe that our employee relations are good.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our average wage costs have been reasonably
stable for the past two fiscal years largely due to
macro-economic conditions. Historically, in times of increasing
average wage costs, we have been able to offset wage cost
increases through increased efficiencies in operations and, as
necessary, through retail price increases. We cannot assure you
that we will continue to be able to offset wage cost increases
in the future.
</FONT>

<P align="center"><FONT size="2">81
</FONT>

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<DIV align="left">
<A name='114'></A>
</DIV>

<!-- link1 "MANAGEMENT" -->

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

<P align="left">
<B><FONT size="2">Directors and Executive Officers</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth information
regarding our current directors and executive officers. Upon the
closing of the Transactions, we expect to restructure our board
of directors. See &#147;&#151;&nbsp;Composition of the Board of
Directors after this Offering&#148; below.
</FONT>

<CENTER>
<TABLE width="90%" 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="1%"><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="56%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Age</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Position</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>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Frederick Iseman
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">51</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Chairman of the Board and Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Kerry A. Kramp
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">President, Chief Executive Officer and Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Glenn D. Drasher
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Executive Vice President of Marketing for Buffets
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">R. Michael Andrews,&nbsp;Jr.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Executive Vice President and Chief Financial
    Officer
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">H. Thomas Mitchell
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Executive Vice President, General Counsel and
    Secretary
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Roe H. Hatlen
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Vice Chairman of the Board and Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Steven M. Lefkowitz
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Robert A. Ferris
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">62</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">David S. Lobel
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">51</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Robert M. Rosenberg
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Frederick Iseman </FONT></I><FONT size="2">has
served as Chairman of the Board and as a director of our company
and as Chairman of the Board and as a director of Buffets since
October 2000. Mr.&nbsp;Iseman is currently Chairman and Managing
Partner of Caxton-Iseman Capital, a private investment firm,
which was founded by Mr.&nbsp;Iseman in 1993. Prior to
establishing Caxton-Iseman Capital, Mr.&nbsp;Iseman founded
Hambro-Iseman Capital Partners, a merchant banking firm. From
1988 to 1990, Mr.&nbsp;Iseman was a member of Hambro
International Venture Fund. Mr.&nbsp;Iseman is Chairman of the
Board and a director of Anteon International Corporation and Ply
Gem Industries, Inc. and a member of the Advisory Board of Duke
Street Capital and the Advisory Board of STAR Capital Partners
Limited.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Kerry A. Kramp </FONT></I><FONT size="2">has
served as our President and Chief Executive Officer since
February 2004 and of Buffets since May 2000, and as a director
of our company and as a director of Buffets since October 2000.
Prior to that date, he had served as our President and Chief
Operating Officer since our merger with HomeTown Buffet in 1996.
Mr.&nbsp;Kramp was President and a director of HomeTown Buffet
from 1995 through our merger in 1996.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Glenn D. Drasher </FONT></I><FONT size="2">has
served as the Executive Vice President of Marketing for Buffets
since 1997. He has over 25&nbsp;years of operational, marketing
and executive restaurant industry experience. From 1994 until he
joined us, Mr.&nbsp;Drasher was Executive Vice President for
Country Kitchen International and Vice President of Marketing
for Country Hospitality Worldwide, both divisions of Carlson
Companies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">R.&nbsp;Michael
Andrews,&nbsp;Jr.</FONT></I><FONT size="2"> has served as our
Executive Vice President and Chief Financial Officer since
February 2004 and of Buffets since April 2000. Prior to joining
us, Mr.&nbsp;Andrews served as Chief Financial Officer of Eerie
World Entertainment, the parent company to Jekyll&nbsp;&#38;
Hyde Clubs, from 1999 to 2000. He was Chief Financial Officer of
Don Pablo&#146;s Restaurants from 1998 to 1999. Previously,
Mr.&nbsp;Andrews was with KPMG Peat Marwick LLP for
approximately 12&nbsp;years, serving most recently as Senior
Manager.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">H.&nbsp;Thomas Mitchell
</FONT></I><FONT size="2">has served as our Executive Vice
President, General Counsel and Secretary since February 2004 and
of Buffets since 1998. He joined our company in 1994 and has
13&nbsp;years of executive restaurant industry experience and
19&nbsp;years of legal practice. Mr.&nbsp;Mitchell served in the
further capacity of Chief Administrative Officer from 1998 until
2000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Roe H. Hatlen
</FONT></I><FONT size="2">co-founded our company and has served
as the Vice-Chairman of the Board and as a director of our
company since October 2000 and as the Vice-Chairman of the Board
and as a director of Buffets since June 2002. He served as our
Chairman and Chief Executive Officer from our inception in
</FONT>

<P align="center"><FONT size="2">82
</FONT>

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<DIV align="left">
<FONT size="2">1983 through May 2000 and as President from May
1989 to September 1992. He is a member of the Board of Regents
of Pacific Lutheran University.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Steven M. Lefkowitz
</FONT></I><FONT size="2">has served as a director of our
company and of Buffets since October 2000. Mr.&nbsp;Lefkowitz is
a Managing Director of Caxton-Iseman Capital and has been
employed by Caxton-Iseman Capital since 1993. From 1988 to 1993,
Mr.&nbsp;Lefkowitz was employed by Mancuso&nbsp;&#38; Company, a
private investment firm, and served in several positions
including Vice President and as a Partner of Mancuso Equity
Partners. Mr.&nbsp;Lefkowitz is a director of Anteon
International Corporation and Ply Gem Industries, Inc.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Robert A. Ferris </FONT></I><FONT size="2">has
served as a director of our company since October 2000 and of
Buffets since June 2002. Mr.&nbsp;Ferris is a Managing Director
of Caxton-Iseman Capital and has been employed by Caxton-Iseman
Capital since March 1998. From 1981 to February 1998,
Mr.&nbsp;Ferris was a General Partner of Sequoia Associates, a
private investment firm headquartered in Menlo Park, California.
Prior to founding Sequoia Associates, Mr.&nbsp;Ferris was a Vice
President of Arcata Corporation, a New York Stock
Exchange-listed company. Mr.&nbsp;Ferris is a director of Anteon
International Corporation and Ply Gem Industries, Inc.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">David S. Lobel </FONT></I><FONT size="2">has
served as a director of our company since October 2000 and of
Buffets since June 2002. Mr.&nbsp;Lobel is currently Managing
Partner of Sentinel Capital Partners, a private equity
investment firm founded by Mr.&nbsp;Lobel in 1995. Prior to
establishing Sentinel Capital Partners, Mr.&nbsp;Lobel spent
15&nbsp;years at First Century Partners, Smith Barney&#146;s
venture capital affiliate. Mr.&nbsp;Lobel joined First Century
in 1981 and served as a general partner of funds managed by
First Century from 1983 until his departure in 1995. From 1979
to 1981, Mr.&nbsp;Lobel was a consultant at Bain&nbsp;&#38;
Company. Mr.&nbsp;Lobel is Chairman of the Board and a director
of Castle Dental, Inc.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Robert M. Rosenberg
</FONT></I><FONT size="2">has served as a director of our
company since May 2001 and of Buffets since June 2002. He is the
retired Chief Executive Officer of Dunkin&#146; Donuts, a
position he held from 1963 until his retirement in 1998. He has
been a member of the Board of Directors of Sonic Corp. since
1993 and a member of the Board of Directors of Domino&#146;s
Pizza since 1999.
</FONT>

<P align="left">
<B><FONT size="2">Composition of the Board of Directors After
This Offering</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to the consummation of the Transactions, we
intend to restructure our board of directors. Our board of
directors will consist of 7&nbsp;directors, including 4 newly
appointed independent directors, as defined in
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;listing
standards. Their appointment will be subject to the consummation
of the Transactions. In connection with this offering, we will
provide in our amended and restated certificate of incorporation
that for such time as Caxton-Iseman Capital together with its
affiliates beneficially own at least 10% or 5% of our equity,
whether in the form of Class&nbsp;A or Class&nbsp;B common
stock, it will be entitled to nominate two directors or one
director, respectively.
</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">Committees of the Board</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to the consummation of this offering, we
intend to establish an audit committee, a compensation committee
and a nominating and corporate governance committee. Each
committee will consist of three persons, at least one of whom is
not employed by us, and is &#147;independent&#148; as defined by
the rules
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
Within one year of the consummation of this offering, all the
members of these committees will be independent, except for our
audit committee, which will have three independent members upon
the closing of this offering.
</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">Audit Committee</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The audit committee will consist of three newly
appointed independent directors, one of whom will serve as the
audit committee financial expert. The audit committee will
operate according to the audit committee charter duly adopted by
our board of directors.
</FONT>

<P align="center"><FONT size="2">83
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon completion of this offering, among other
functions, the principal duties and responsibilities of our
audit committee will be as follows:
</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 monitor our financial reporting process and
    internal control 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">to appoint and replace our independent outside
    auditors from time to time, determine their compensation and
    other terms of engagement and oversee their work;
    </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 oversee the performance of our internal audit
    function;
    </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 establish procedures for the receipt,
    retention and treatment of complaints regarding accounting,
    internal accounting controls, or auditing matters and the
    confidential anonymous submission by employees of concerns
    regarding questionable accounting or auditing matters;&nbsp;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 oversee our compliance with legal, ethical and
    regulatory matters.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The audit committee will be required to report
regularly to our board of directors to discuss any issues that
arise with respect to the quality or integrity of our financial
statements, our compliance with legal or regulatory
requirements, the performance and independence of our
independent auditors, and the performance of the internal audit
function.
</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">Compensation Committee</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The compensation committee will consist of three
newly appointed independent directors. The compensation
committee will operate according to the compensation committee
charter duly adopted by our board of directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon completion of this offering, among other
functions, the principal duties and responsibilities of the
compensation committee will be as follows:
</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 provide oversight on the development and
    implementation of the compensation policies, strategies, plans
    and programs for our key employees and outside directors and
    disclosure relating to these matters;&nbsp;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 review and approve the compensation of our
    chief executive officer and the other executive officers of us
    and our subsidiaries.
    </FONT></TD>
</TR>

</TABLE>

<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">Nominating and Corporate Governance
    Committee</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The nominating and corporate governance committee
will consist of three newly appointed independent directors. The
nominating and corporate governance committee will operate
according to the nominating and corporate governance committee
charter duly adopted by our board of directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon completion of this offering, among other
functions, the principal duties and responsibilities of the
nominating and corporate governance committee will be as follows:
</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 establish criteria for board and committee
    membership and recommend to our board of directors proposed
    nominees for election to the board of directors and for
    membership on committees of the board of directors;
    </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 make recommendations regarding proposals
    submitted by our stockholders;&nbsp;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 make recommendations to our board of directors
    regarding corporate governance matters and practices.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Compensation Committee Interlocks and Insider
Participation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the last fiscal year, no executive officer
of ours served as a director of or member of a compensation
committee of any entity for which any of the persons serving on
our board of directors or on the compensation committee of the
board of directors is an executive officer.
</FONT>

<P align="center"><FONT size="2">84
</FONT>

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

<P align="left">
<B><FONT size="2">Director Compensation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The members of the board of directors, except for
any member who is an executive officer, will receive a fee of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
year for serving as directors and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
year for serving on each committee of our board of directors.
All directors will be reimbursed for all reasonable expenses
they incur while acting as directors, including as members of
any committee of the board of directors.
</FONT>

<P align="left">
<B><FONT size="2">Executive Compensation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth information
relating to the compensation awarded to, earned by or paid to
our President and Chief Executive Officer, Kerry&nbsp;A. Kramp,
and each of the five other most highly compensated executive
officers whose individual compensation exceeded $100,000 during
fiscal 2004, 2003 and for the 2002 transitional period for
services rendered to us.
</FONT>

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

<TR>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><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="2%"><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="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="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><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="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Long Term Compensation</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">Annual Compensation</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Awards</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Other Annual</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Restricted</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fiscal</FONT></B></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">All Other</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name and Principal Position</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Salary($)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Bonus($)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">($)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Awards</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Compensation</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>
    <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 bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Kerry A. Kramp
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2004</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="top" nowrap><FONT size="2">491,400</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">22,487</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">President, Chief Executive
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2003</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="top" nowrap><FONT size="2">472,500</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="top" nowrap><FONT size="2">50,000</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="top" nowrap><FONT size="2">20,023</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Officer and Director
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2002</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="top" nowrap><FONT size="2">253,558</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="top" nowrap><FONT size="2">114,071</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="top" nowrap><FONT size="2">4,743</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</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">David Goronkin
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2004</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</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">Chief Operating Officer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2003</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="top" nowrap><FONT size="2">316,000</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">8,063</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</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">and Director(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2002</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="top" nowrap><FONT size="2">169,593</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="top" nowrap><FONT size="2">72,656</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="top" nowrap><FONT size="2">2,799</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 bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Glenn D. Drasher
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2004</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="top" nowrap><FONT size="2">224,786</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">1,756</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Executive Vice President
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2003</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="top" nowrap><FONT size="2">222,560</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">8,626</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">of Marketing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2002</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="top" nowrap><FONT size="2">119,511</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="top" nowrap><FONT size="2">35,820</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="top" nowrap><FONT size="2">1,958</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</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">R. Michael Andrews,&nbsp;Jr.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2004</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="top" nowrap><FONT size="2">224,640</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">11,421</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</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">Executive Vice President
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2003</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="top" nowrap><FONT size="2">216,000</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="top" nowrap><FONT size="2">75,000</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="top" nowrap><FONT size="2">18,104</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</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">and Chief Financial Officer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2002</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="top" nowrap><FONT size="2">115,692</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="top" nowrap><FONT size="2">34,765</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="top" nowrap><FONT size="2">5,165</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">H. Thomas Mitchell
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2004</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="top" nowrap><FONT size="2">194,324</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">1,761</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Executive Vice President,
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2003</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="top" nowrap><FONT size="2">192,400</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="top" nowrap><FONT size="2">50,000</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="top" nowrap><FONT size="2">7,937</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">General Counsel and Secretary
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2002</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="top" nowrap><FONT size="2">103,315</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="top" nowrap><FONT size="2">17,695</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="top" nowrap><FONT size="2">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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</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">Jean C. Rostollan
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2004</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="top" nowrap><FONT size="2">135,279</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">68,167</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">(3)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</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">Executive Vice President
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2003</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="top" nowrap><FONT size="2">192,400</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">6,569</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</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">of Purchasing(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">2002</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="top" nowrap><FONT size="2">84,730</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="top" nowrap><FONT size="2">17,530</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="top" nowrap><FONT size="2">4,862</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="top" nowrap><FONT size="2">&#151;</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="top" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</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">David Goronkin, former Chief Operating Officer
    and Director, resigned from both positions in April 2003.
    </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">Jean C. Rostollan, former Executive Vice
    President of Purchasing, separated from the company in
    February&nbsp;2004.
    </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">Includes $66,518 of severance pay.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Employee Benefit Plans</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have a 401(k) plan covering all of our
employees who have been employed for at least one year, are
21&nbsp;years or older and worked at least 1,000&nbsp;hours in
the previous year. Our discretionary contributions to the plan
are determined annually, on a calendar year basis, by our board
of directors and are used to match a portion of our
employees&#146; voluntary contributions. Our partial matching
contributions to the 401(k) fund vest over a five-year period so
long as the employee remains employed by us. We made matching
contributions of $0.9&nbsp;million in 2001 and $0.1&nbsp;million
in calendar year 2003. These contributions were paid during the
first quarter of the succeeding calendar year. There were no
matching contributions for calendar year 2002. The 2004 matching
contribution will not be authorized until the end of 2004
</FONT>

<P align="center"><FONT size="2">85
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">calendar year. We had an accrual of
$0.4&nbsp;million as of June&nbsp;30, 2004 for estimated 2004
matching contributions related to the first half of calendar
year 2004.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Employment Agreements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Kerry&nbsp;A. Kramp, Glenn&nbsp;D. Drasher,
R.&nbsp;Michael Andrews,&nbsp;Jr., H.&nbsp;Thomas Mitchell,
K.&nbsp;Michael Shrader and Jean&nbsp;C. Rostollan each entered
into a severance protection agreement with us dated as of
September&nbsp;29, 2000. Each agreement entitles the executive
to continue to receive his or her salary, medical and health
benefits, group term life insurance and long term disability
coverage on the same basis as prior to termination of employment
with us for 52&nbsp;weeks following termination of employment
with us for any reason other than for cause, disability or death
and execution of a release attached to the agreements. The
executives have no duty to mitigate the amounts payable under
the agreements. K.&nbsp;Michael Shrader and Jean&nbsp;C.
Rostollan are currently being compensated under the terms of
their respective severance protection agreements.
</FONT>

<P align="left">
<B><FONT size="2">Incentive Plans.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 2001, we adopted the Buffets Holdings,
Inc. Equity Participation Plan. Under this plan, the
Compensation Committee may grant, from time to time, options to
purchase shares of our common stock to certain restaurant
general managers, above-store field management and corporate
managers. As
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004, the total number of shares of common stock with respect to
which options may be granted under the plan is 113,750, of which
options to
purchase &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
were outstanding. In lieu of permitting employees to exercise
their options for shares of common stock, we may at our option
cash out the options using a defined formula or, in the event of
an equity exchange, provide exchange shares. Concurrently with
the closing of this offering, we plan to cash out employees who
hold less than 200&nbsp;options under this plan. For all other
option holders a portion of the options will be paid out in
cash. The remaining portion will be converted into IDSs and
Class&nbsp;B common stock, so that employees receive the same
ratio of cash proceeds to IDSs and Class&nbsp;B common stock as
our officers who are selling a portion of their shares of common
stock now held in connection with the offering, and converting
the remainder into IDSs and Class&nbsp;B common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 2001, we also adopted the Buffets
Holdings, Inc. Cash Appreciation Plan. Under this plan, the
compensation committee may award units to selected corporate
employees and store managers below the general manager level and
not otherwise eligible to participate in the Equity
Participation Plan. Units awarded under this plan are subject to
vesting and generally become non-exercisable sixty days
following termination of the award holder&#146;s employment with
us. The value of units upon exercise is generally determined
using a formula similar to that used in the Equity Participation
Plan. Our board of directors may direct that all outstanding
units be cancelled upon certain extraordinary transactions
involving us, in which case unitholders will be paid the value
of their units in the manner described in the plan. Concurrently
with the closing of this offering, we plan to cash out all
unitholders under this plan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We currently maintain a cash-based incentive plan
for key members of our management team. Participants in this
plan are eligible to receive a certain percentage of their base
compensation upon the achievement of certain financial targets
as determined by our board of directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may, concurrently with the closing of this
offering, or in the future, alter our current incentive plans
and or adopt a new long-term incentive plan to provide incentive
compensation to members of our management team.
</FONT>

<P align="center"><FONT size="2">86
</FONT>

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<DIV align="left">
<A name='115'></A>
</DIV>

<!-- link1 "PRINCIPAL STOCKHOLDERS" -->

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth information as
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004, regarding the beneficial ownership of Buffets
Holdings&#146; common stock prior to the completion of this
offering and the Transactions and Class&nbsp;A common stock and
Class&nbsp;B common stock immediately after the completion of
this offering and the Transactions and shows the number of
shares and percentage owned by (1)&nbsp;the named executive
officers and each director of Buffets Holdings individually,
(2)&nbsp;all named executive officers and directors as a group
and (3)&nbsp;the stockholders of Buffets Holdings known to us to
be the beneficial owner of more than&nbsp;5% of Buffets
Holdings&#146; common stock as of June&nbsp;30, 2004. Except as
noted below, the address of each principal stockholder of
Buffets Holdings is c/o&nbsp;Buffets Holdings, Inc.,
1460&nbsp;Buffet Way, Eagan, Minnesota,&nbsp;55121.
</FONT>

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

<TR>
    <TD width="41%"><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="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><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="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><B><FONT size="1">Shares Beneficially Owned</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="23" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Prior to Offering</FONT></B></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">After Offering</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
</TR>

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

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Common Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Class&nbsp;A</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Class&nbsp;B</FONT></B></TD>
</TR>

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

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</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>
    <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">Caxton-Iseman Investments L.P.(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">2,501,438</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">78.5</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><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 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><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 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">Sentinel Capital Partners&nbsp;II, L.P.(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">225,106</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">7.1</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Frederick Iseman(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">2,501,438</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">&#151;</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Kerry A. Kramp
    </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">130,000</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">4.1</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">R. Michael Andrews,&nbsp;Jr.
    </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">56,875</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">1.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Roe H. Hatlen(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">162,952</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">5.1</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">David Goronkin(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">&#151;</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">&#151;</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Robert M. Rosenberg(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">4,610</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">0.1</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Steven M. Lefkowitz
    </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">&#151;</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">&#151;</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Robert A. Ferris
    </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">&#151;</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">&#151;</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">David S. Lobel
    </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">&#151;</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">&#151;</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">All executive officers and directors as a group
    (9 persons)(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">3,080,981</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">96.7</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><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 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><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 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">By virtue of Mr.&nbsp;Iseman&#146;s indirect
    control of Caxton-Iseman Investments L.P., he is deemed to
    beneficially own the 2,501,438&nbsp;shares of common stock
    (&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of Class&nbsp;A and Class&nbsp;B common stock, respectively,
    after the offering). The address of Caxton-Iseman Investments
    L.P. and Mr.&nbsp;Iseman is c/o&nbsp;Caxton-Iseman Capital,
    Inc., 500 Park Avenue, New York, New York 10022.
    </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">The address of Sentinel Capital
    Partners&nbsp;II,&nbsp;L.P. is 777&nbsp;Third Avenue,
    32nd&nbsp;Floor, New&nbsp;York, New&nbsp;York,&nbsp;10017.
    </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">Mr.&nbsp;Hatlen has sole voting and dispositive
    power over 65,012&nbsp;shares of common stock
    (&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of Class&nbsp;A common stock after the offering).
    Mr.&nbsp;Hatlen may be deemed to be the beneficial owner of
    67,518&nbsp;shares of common stock
    ( &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of Class&nbsp;A common stock after the offering) held by the
    Lars&nbsp;C. Hatlen Trust, Erik&nbsp;R. Hatlen and Kari&nbsp;E.
    Hatlen, each such entity or person owning 22,506&nbsp;shares of
    common stock
    (&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of Class&nbsp;A common stock after the offering). By virtue of
    Mr.&nbsp;Hatlen&#146;s control over Eventyr Investments, he is
    deemed to beneficially own the 30,422&nbsp;shares of common
    stock
    (&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of Class&nbsp;A common stock after the offering) held by that
    entity.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">David Goronkin, former Chief Operating Officer
    and Director, resigned from both positions in April 2003.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Prior to the offering, Mr.&nbsp;Rosenberg also
    owned options to purchase&nbsp;12,600&nbsp;shares of common
    stock.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">87
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='116'></A>
</DIV>

<!-- link1 "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" -->

<P align="center">
<B><FONT size="2">CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS</FONT></B>

<P align="left">
<B><FONT size="2">Founder Advisory Agreements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Roe&nbsp;H. Hatlen has entered into an advisory
arrangement with Buffets Holdings and Buffets that expires in
2005. Under his advisory agreement, Mr.&nbsp;Hatlen received
$325,000 in fiscal 2001, $150,000 in the 2002 transitional
period, $283,000 in fiscal 2003 and $257,000 in fiscal 2004. He
will receive $238,000 in fiscal 2005 and $113,000 in fiscal
2006. In addition, Mr.&nbsp;Hatlen will receive health, medical
and other benefits comparable to those made available to our
management employees through calendar 2005. Mr.&nbsp;Hatlen
holds approximately&nbsp;5.1% of the shares of Buffets Holdings
common stock. Concurrently with the closing of the Transactions,
the advisory agreement with Mr.&nbsp;Hatlen will be terminated
and we will make a one-time payment of the amounts
Mr.&nbsp;Hatlen would have received under the advisory agreement
for fiscal 2005 and fiscal 2006.
</FONT>

<P align="left">
<B><FONT size="2">Purchase of Property by Roe Hatlen</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In November 2001, Mr.&nbsp;Hatlen purchased a
portion of the land adjoining our headquarters for
$1.02&nbsp;million. The land was sold by the entity that had
purchased the parcel at the time of the buyout from public
shareholders. Mr.&nbsp;Hatlen&#146;s purchase resulted in a
reduction of the rental amount payable by us under the sale and
leaseback transaction relating to our corporate headquarters.
</FONT>

<P align="left">
<B><FONT size="2">Caxton-Iseman Capital Advisory
Agreement</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We entered into an advisory agreement with an
affiliate of Caxton-Iseman Capital under which the affiliate of
Caxton-Iseman Capital provides various advisory services to us
in exchange for an annual advisory fee equal to 2% of our annual
consolidated earnings before interest, taxes, depreciation and
amortization and an additional 1% fee for advisory services
relating to particular transactions. Under this agreement, we
paid $2.9&nbsp;million in fiscal 2001, $1.2&nbsp;million in the
2002 transitional period, $2.8&nbsp;million in fiscal 2003 and
$3.1&nbsp;million in fiscal 2004. We have agreed to pay a fee to
Caxton-Iseman Capital of $7.5&nbsp;million and to terminate the
Caxton-Iseman Capital arrangement concurrently with the closing
of the Transactions except with respect to our indemnification
obligations towards Caxton-Iseman Capital for services provided.
As a result of the termination of this agreement, Caxton-Iseman
Capital will no longer be under any obligation to provide
services to us and we will be under no obligation to retain
Caxton-Iseman Capital for any future services.
</FONT>

<P align="left">
<B><FONT size="2">Board of Directors Advisory
Agreement</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In October 2002, we entered into an advisory
agreement with Robert M. Rosenberg, under which he provided
various advisory services to us for an advisory fee of $35,000
during fiscal 2003 and $3,500 during fiscal 2004. Concurrently
with the closing of the Transactions, the advisory agreement
with Robert M. Rosenberg will be terminated.
</FONT>

<P align="left">
<B><FONT size="2">Sentinel Capital Advisory Agreement</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We entered into an advisory agreement with
Sentinel Capital Partners, L.L.C., under which Sentinel Capital
provides various advisory services to us for an annual advisory
fee of $200,000. Under this agreement, we paid approximately
$200,000 in fiscal 2001, $108,000 in the 2002 transitional
period, $200,000 in fiscal 2003 and $200,000 in fiscal 2004.
Concurrently with the closing of the Transactions, the advisory
agreement with Sentinel Capital will be terminated.
</FONT>

<P align="left">
<B><FONT size="2">Guarantees, Promissory Notes and Pledge
Agreements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As part of the buyout from public shareholders on
October&nbsp;2, 2000, some of our management investors obtained
recourse loans from U.S.&nbsp;Bank, which allowed them to
purchase shares in Buffets Holdings. In connection with these
management investor loans, we provided guarantees of these loans
to U.S.&nbsp;Bank and we paid interest to U.S.&nbsp;Bank at
prime plus&nbsp;1% on these loans. Concurrently, each of the
</FONT>

<P align="center"><FONT size="2">88
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">management investors pledged his, or her,
respective ownership interests in the shares of Buffets Holdings
and executed a promissory note in favor of us, whereby each
agreed to repay the corresponding amount of the guarantee,
together with interest at fixed rates ranging between&nbsp;6%
and 7%&nbsp;per annum, at the earliest of (1)&nbsp;seven years,
(2)&nbsp;termination of employment with our company or
(3)&nbsp;the sale, disposition or other transfer of the
management investor&#146;s ownership interests in the shares.
Currently, none of our executive management has any outstanding
management investor loan that is guaranteed by us.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">David Goronkin was advanced $315,000 on
February&nbsp;20, 2002 for the purchase of homestead property in
Minnesota. Interest was payable annually at a rate equal to the
Buffets&#146; interest rate on its senior secured borrowing, up
to a maximum of 12%&nbsp;per annum. The principal plus accrued
but unpaid interest was repaid upon his resignation.
</FONT>

<P align="left">
<B><FONT size="2">Series&nbsp;A Senior Subordinated and
Series&nbsp;B Junior Subordinated Notes due 2011</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the June 2002 refinancing
transactions, we issued series&nbsp;A senior subordinated notes
due 2011 to our preferred stockholders as part of the redemption
of our senior preferred stock and series&nbsp;B junior
subordinated notes due 2011 as a dividend to holders of our
common stock and holders of warrants to purchase our common
stock. The subordinated notes were originally issued on
June&nbsp;28, 2002 with a maturity date of June&nbsp;25, 2011.
The subordinated notes bore interest at the rate of 3%&nbsp;per
annum from June&nbsp;28, 2002 through December&nbsp;31, 2002,
and thereafter bore interest at the rate of 4.75%&nbsp;per
annum. Payments of accrued interest on the notes were made
annually as of June&nbsp;28 of each year. In connection with
entering into the Existing Credit Facility, we redeemed all of
our outstanding series&nbsp;A senior subordinated notes. We used
a portion of the proceeds of the offering of our
137/8%&nbsp;Notes, among other things, to redeem the remaining
series&nbsp;B junior subordinated notes. The subordinated notes
were issued to holders of our preferred stock and to holders of
our common stock and holders of warrants to purchase common
stock, including the following persons in the amounts indicated:
</FONT>

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

<TR>
    <TD width="57%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount of Series&nbsp;A</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount of Series&nbsp;B</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Senior</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Junior</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name of Beneficial Owner</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subordinated&nbsp;Notes</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subordinated&nbsp;Notes</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>
    <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">Caxton-Iseman Investments L.P.(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,847,427</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,470,628</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">Sentinel Capital Partners&nbsp;II, L.P.
    </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">616,197</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">1,303,378</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">Frederick Iseman(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">6,847,427</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">14,470,628</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">Kerry A. Kramp
    </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">&#151;</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">595,941</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">R. Michael Andrews,&nbsp;Jr.
    </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">&#151;</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">186,232</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">Roe H. Hatlen(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">244,167</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">552,078</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">David Goronkin
    </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">&#151;</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">223,478</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">Glenn D. Drasher
    </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">6,162</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">87,526</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">Harold T. Mitchell
    </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">&#151;</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">74,493</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">K. Michael Shrader
    </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">&#151;</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">74,493</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">Lars C. Hatlen Trust(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">&#151;</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">130,195</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">Erik R. Hatlen(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">&#151;</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">130,195</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">Kari E. Hatlen(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">&#151;</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">130,195</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">Beverly J. Hatlen(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">23,856</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">&#151;</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">Eventyr Investments L.P.(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">125,324</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">175,989</FONT></TD>
    <TD><FONT size="2">&nbsp;</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">By virtue of Mr.&nbsp;Iseman&#146;s indirect
    control of Caxton-Iseman Investments L.P., he was deemed to
    beneficially own the $6,847,427 of series&nbsp;A senior
    subordinated notes and $14,470,628 of series&nbsp;B junior
    subordinated notes held by that entity.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">89
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<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">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Mr.&nbsp;Hatlen had sole ownership over $118,843
    of series&nbsp;A senior subordinated notes and $376,089 of
    series&nbsp;B junior subordinated notes. Mr.&nbsp;Hatlen may
    have been deemed to be the beneficial owner of the series&nbsp;B
    junior subordinated notes held by the Lars&nbsp;C. Hatlen Trust,
    Erik&nbsp;R. Hatlen and Kari&nbsp;E. Hatlen, each such entity or
    person having owned $130,195 of series&nbsp;B junior
    subordinated notes. By virtue of Mr.&nbsp;Hatlen&#146;s control
    over Eventyr Investments, he was deemed to beneficially own the
    $125,324 of series&nbsp;A senior subordinated notes and $175,989
    of series&nbsp;B junior subordinated notes held by that entity.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">90
</FONT>

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

<DIV align="left">
<A name='117'></A>
</DIV>

<!-- link1 "RELATED PARTY TRANSACTIONS IN CONNECTION WITH THIS OFFERING" -->

<P align="center">
<B><FONT size="2">RELATED PARTY TRANSACTIONS IN CONNECTION WITH
THIS OFFERING</FONT></B>

<P align="left">
<B><FONT size="2">Recapitalization</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to and in connection with the closing of
this offering, we will consummate a recapitalization in order to
implement the capital structure required for this offering.
Prior to this offering, we had issued and had outstanding a
single class of common stock held by management and affiliates
of Caxton-Iseman Capital, Inc., Sentinel Capital Partners,
L.L.C. and certain other institutional investors, which we refer
to collectively in this prospectus as the &#147;existing
stockholders.&#148; In addition, management owns a number of
options to purchase shares of common stock and certain other
financial investors hold common stock warrants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will undertake the following transaction steps
in connection with the recapitalization:
</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">We will form a wholly owned subsidiary and will
    enter into a recapitalization agreement and plan of merger with
    the subsidiary, whereby we will merge the subsidiary into 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">Under the terms of our certificate of
    incorporation, adoption of the recapitalization agreement and
    plan of merger and approval of the amended and restated
    certificate of incorporation will require the affirmative vote
    of stockholders owning a majority of the outstanding shares of
    our existing common stock. The consummation of this offering and
    the other Transactions are contingent upon our having received
    shareholder approval of these recapitalization transactions.
    </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">Upon the recapitalization, all of the outstanding
    options to purchase our common stock will cease to be
    exercisable and will be cancelled upon the recapitalization. We
    will exchange either cash, Class&nbsp;B common stock or a
    combination thereof for cancelled options to purchase our common
    stock from all option holders who hold at least
    200&nbsp;cancelled options. All other holders of cancelled
    options will receive cash in exchange for their cancelled
    options.
    </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">Upon the recapitalization, all of the outstanding
    warrants for our existing common stock will be cancelled, and
    all holders of our existing common stock warrants will receive
    Class&nbsp;B common stock in exchange for their warrants.
    </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 connection with the recapitalization, we will
    offer our existing stockholders a combination of cash and
    Class&nbsp;B common stock for each of our existing shares of
    common stock. We expect that members of our management will
    receive a greater proportion of Class&nbsp;B common stock than
    our other existing stockholders.
    </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 limited number of our existing stockholders or
    warrantholders who are institutional accredited investors or
    qualified institutional buyers (as such terms are defined in
    Regulation&nbsp;D and Rule&nbsp;144A under the Securities Act of
    1933, as amended) may also receive IDSs as part of the
    recapitalization consideration in lieu of a portion of
    Class&nbsp;B common stock otherwise receivable by them.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will offer a maximum of
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Class&nbsp;B common stock
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs
as part of the recapitalization consideration. The shares of
Class&nbsp;B common stock will
represent &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the outstanding
voting power of us and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the
overall value of our equity after giving effect to this offering
and the recapitalization. See &#147;Description of Capital
Stock&nbsp;&#151; Common Stock&#148; for a description of the
terms of the Class&nbsp;B common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To the extent the underwriters&#146;
over-allotment option is exercised, we will sell additional IDSs
to the underwriters. We will use the proceeds from the sale of
additional IDSs to repurchase securities from certain of our
existing stockholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Delaware law and subject to certain
procedures, existing stockholders who do not consent to the
merger will be entitled to exercise appraisal rights for the
fair value of their shares of common stock in lieu of accepting
the recapitalization consideration and any applicable
over-allotment consideration.
</FONT>

<P align="center"><FONT size="2">91
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The table below sets forth the consideration to
be received by certain of our affiliates that are holders of our
common stock, options to purchase shares of our common stock and
common stock warrants in connection with the internal corporate
transactions, based on an assumed initial public offering price
of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
IDS (the mid-point of the price range set forth on the cover of
this prospectus) and assuming no exercise of the
underwriters&#146; over-allotment option.
</FONT>

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

<TR>
    <TD width="26%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
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    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
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    <TD width="3%"><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">Shares of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Options to</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Common</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Purchase</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Common</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Common</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Class&nbsp;B</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Owned</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Stock Owned</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Warrants</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Common</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Prior to the</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Prior to the</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Owned Prior to</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">IDSs to</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Stock to be</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Cash</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Offering</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Offering</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">the Offering</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">be Issued</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Issued</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consideration</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>
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    <TD></TD>
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    <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">Caxton-Iseman Investments L.P.&nbsp;</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>
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    <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">Sentinel Capital Partners&nbsp;II,
    L.P.&nbsp;</FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <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">Frederick Iseman(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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</TR>

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

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">R. Michael Andrews,&nbsp;Jr.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Roe H. Hatlen(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Robert M. Rosenberg
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Steven M. Lefkowitz
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Robert A. Ferris
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">David S. Lobel
    </FONT></DIV>
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</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">Includes Caxton-Iseman Investments L.P. by virtue
    of Mr.&nbsp;Iseman&#146;s indirect control of Caxton-Iseman
    Investments L.P., he is deemed to beneficially own the
    2,501,438&nbsp;shares of common stock
    (&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of Class&nbsp;A and Class&nbsp;B common stock, respectively,
    after the offering).
    </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">Includes Lars&nbsp;C. Hatlen Trust, Erik&nbsp;R.
    Hatlen, Kari&nbsp;E. Hatlen and Eventyr Investments.
    Mr.&nbsp;Hatlen has sole voting and dispositive power over
    65,012&nbsp;shares of common stock
    (&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of Class&nbsp;B common stock after the offering).
    Mr.&nbsp;Hatlen may be deemed to be the beneficial owner of
    67,518&nbsp;shares of common stock
    ( &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of Class&nbsp;B common stock after the offering) held by the
    Lars C. Hatlen Trust, Erik R. Hatlen and Kari E. Hatlen, each
    such entity or person owning 22,506&nbsp;shares of common stock
    (&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of Class&nbsp;B common stock after the offering). By virtue of
    Mr.&nbsp;Hatlen&#146;s control over Eventyr Investments, he is
    deemed to beneficially own the 30,422&nbsp;shares of common
    stock
    ( &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of Class&nbsp;B common stock after the offering) held by that
    entity.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Investor Rights Agreement</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will enter into an investor rights agreement
with the existing stockholders immediately prior to the
consummation of this offering. It will provide that in the event
that the IDSs are automatically separated as a result of the
partial redemption of any senior subordinated notes, at such
time we will amend our by-laws to delete the restriction that we
may only issue shares of Class&nbsp;A common stock in offerings
registered with the Securities and Exchange Commission and each
share of Class&nbsp;B common stock will be exchangeable
for &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Class&nbsp;A common stock and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
senior subordinated notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subject to limited exceptions, until the second
anniversary of the consummation of this offering, the investor
rights agreement will restrict the holders of our Class&nbsp;B
common stock from exercising their exchange rights if, following
the exchange, the holders of our Class&nbsp;B common stock would
hold in the aggregate less than 10% of the outstanding shares of
our capital stock.
</FONT>

<P align="center"><FONT size="2">92
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, the investor rights agreement will
contain the following registration rights:
</FONT>
<P>

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<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 existing stockholders will collectively
    have &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;demand
    registration rights relating to the IDSs and the shares of our
    Class&nbsp;A common stock and senior subordinated notes
    represented by the IDSs that they hold as well as the IDSs into
    which such shares of Class&nbsp;B common stock may be exchanged,
    subject to the requirement that the securities covered by each
    demand registration have an aggregate public offering price of
    at least $10&nbsp;million; provided that one or more existing
    stockholders must beneficially own more
    than &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
    of our outstanding shares of Class&nbsp;A common stock,
    Class&nbsp;B common stock, senior subordinated notes, or IDSs,
    as the case may be, to initiate a demand for registration;
    provided, further, that one or more existing stockholders may
    exercise a demand right for less than an aggregate public
    offering price of $10&nbsp;million if such proposed offering is
    for all of the remaining shares of Class&nbsp;A common stock,
    senior subordinated notes or IDSs held by such existing
    stockholder or stockholders;&nbsp;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">our existing stockholders will have the right to
    include in future public offerings of securities by us or any of
    our securityholders the shares of our Class&nbsp;A common stock,
    senior subordinated notes or IDSs held by each of them as well
    as the IDSs into which such shares of Class&nbsp;B common stock
    may be exchanged.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The existing stockholders may only exercise their
demand registration rights with respect to their Class&nbsp;A
common stock once our Class&nbsp;A common stock is listed on
the &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;.
If the existing stockholders exercise their demand registration
rights, we will file a registration statement or prospectus and
undertake an offering in the United States, as requested by the
existing stockholders. The registration rights are transferable
by the existing stockholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have agreed to pay all costs and expenses in
connection with each such registration, except underwriting
discounts and commissions applicable to the securities sold, and
to indemnify the existing stockholders that have included
securities in such offering against certain liabilities,
including liabilities under the Securities Act.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Furthermore, we have agreed not to repurchase any
shares of Class&nbsp;B common stock prior to the second
anniversary of the consummation of this offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In this prospectus, we refer to all of the
transactions described in &#147;Related Party Transactions in
Connection with this Offering&#148; as our &#147;internal
corporate transactions.&#148;
</FONT>

<P align="center"><FONT size="2">93
</FONT>

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<DIV align="left">
<A name='118'></A>
</DIV>

<!-- link1 "DESCRIPTION OF OTHER INDEBTEDNESS" -->

<P align="center">
<B><FONT size="2">DESCRIPTION OF OTHER INDEBTEDNESS</FONT></B>

<P align="left">
<B><FONT size="2">Amended Credit Facility</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Concurrently with the closing of this offering,
Buffets intends to enter into an amended credit agreement with a
syndicate of lenders. Credit Suisse First Boston will act as
administrative agent and collateral agent for the syndicate and
as lead arranger and bookrunner under the amended credit
agreement. Pursuant to the amended credit agreement, and subject
to certain conditions, the lenders will provide to Buffets a
credit facility of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.
</FONT>

<DIV>&nbsp;</DIV>

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Structure</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Amended Credit Facility will consist of:
</FONT>
<P>

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    <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 revolving loan facility of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    (which includes a
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    letter of credit sub-facility),
    </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 letter of credit facility of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 synthetic letter of credit facility of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,&nbsp;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 term loan of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The undrawn portion of the revolving loan
facility will be available to Buffets for general corporate
purposes as revolving credit loans or as swingline loans.
Borrowings made as swingline loans will reduce availability
under the revolving loan facility on a dollar-for-dollar basis.
Letters of credit issued under the revolving loan facility, the
letter of credit facility or the synthetic letter of credit
facility will be available to Buffets to support payment
obligations incurred for our general corporate purposes.
</FONT>

<DIV>&nbsp;</DIV>

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Interest and Expenses</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Borrowings under the term loan facility will bear
interest, at Buffets&#146; option, at either adjusted LIBOR
plus &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% or at the alternate base
rate plus &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%. Borrowings under the
revolving loan facility will bear interest, at Buffets&#146;
option, at either adjusted LIBOR
plus &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% or at the alternate base
rate plus &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%, subject to a
leveraged-based pricing grid. Outstanding letters of credit
under the revolving loan facility will be subject to a per annum
fee equal to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%, subject to a
leveraged-based pricing grid. The alternate base rate is the
higher of Credit Suisse First Boston&#146;s prime rate and the
federal funds effective rate
plus &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%. The letter of credit
facility will be subject to a per annum fee equal
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the aggregate amount of
the letter of credit facility, subject to a leveraged-based
pricing grid, whether letters of credit are outstanding or not.
The synthetic letter of credit facility will be subject to a per
annum fee equal to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the
aggregate amount of the synthetic letter of credit facility plus
the cost of maintaining the synthetic letter of credit facility.
The letter of credit fees will be payable in arrears at the end
of each quarter and upon the termination of the revolving loan
facility, the letter of credit facility or the synthetic letter
of credit facility.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the Amended Credit Facility,
Buffets also will agree to pay administrative fees, commitment
fees and certain expenses and to provide certain indemnities,
all of which we believe are customary for financings of this
type.
</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">Maturity</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The term loan and the synthetic letter of credit
facility will mature
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2011. The revolving facility and the letter of credit facility
will mature
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2009.
</FONT>

<P align="center"><FONT size="2">94
</FONT>

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<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">Mandatory Prepayments</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will be required to prepay loans under the
term loan with:
</FONT>
<P>

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<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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of
    net cash proceeds of certain asset dispositions by us and our
    subsidiaries, subject to certain exceptions (including a
    reinvestment option),
    </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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of
    net cash proceeds of issuances of debt obligations by us and our
    subsidiaries,&nbsp;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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of
    the net cash proceeds of issuances of equity securities by us
    and our subsidiaries, in each case subject to certain
    exceptions, including all equity issued to current equity
    sponsors and their affiliates.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mandatory prepayments will be applied on an equal
basis to the remaining amortization payments under the term loan.
</FONT>

<DIV>&nbsp;</DIV>

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Voluntary Prepayments</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will be permitted to make voluntary
prepayments on outstanding principal and reduce the commitments
under the Amended Credit Facility in whole or in part, at our
option, in minimum amounts of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
without premium or penalty, subject to reimbursement of the
lenders&#146; redeployment costs in the case of a prepayment of
adjusted LIBOR borrowings other than at the end of an interest
period. All voluntary prepayments of the term loan will be
applied on an equal basis to the remaining amortization payments
under the term loan.
</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">Security and Guarantees</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Buffets Holdings, all of Buffets&#146; existing
and future domestic subsidiaries and, to the extent no adverse
tax consequences to us would result, all of Buffets&#146;
existing, and future foreign subsidiaries will unconditionally
guarantee the repayment of the Amended Credit Facility and
obligations under any hedging arrangement entered into with a
lender or an affiliate of a lender. The Amended Credit Facility
and the guarantees will be secured by substantially all of the
tangible and intangible assets of Buffets Holdings, Buffets and
each of the subsidiaries that guarantees the Amended Credit
Facility. The assets to be pledged as security will include, but
are not limited to:
</FONT>
<P>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a first-priority pledge of (1)&nbsp;all of
    Buffets&#146; capital stock and (2)&nbsp;all the capital stock
    held by Buffets or any subsidiary that guarantees the Amended
    Credit Facility, which pledge, in the case of any first-tier
    foreign subsidiary, is limited to 65% of the voting stock of
    such foreign subsidiary to the extent the pledge of any greater
    percentage would result in adverse tax consequences 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">perfected first-priority security interests in
    substantially all tangible and intangible personal assets of
    Buffets Holdings, Buffets and each subsidiary guarantor.
    </FONT></TD>
</TR>

</TABLE>

<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">Covenants</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The amended credit agreement will contain
affirmative and negative covenants customary for such
financings. The amended credit agreement will include covenants
relating to limitations on:
</FONT>
<P>

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<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">dividends on, and redemptions and repurchases of,
    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">liens and sale-leaseback transactions,
    </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">loans and investments,
    </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">debt and hedging arrangements,
    </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">mergers, acquisitions and asset sales,
    </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">transactions with affiliates,
    </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 business activities conducted by
    Buffets Holdings, Buffets and its subsidiaries,&nbsp;and
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">95
</FONT>

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<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
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<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">amendments to any of our material agreements.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">The amended credit agreement also will prohibit
Buffets from prepaying, redeeming and repurchasing certain debt.
The Amended Credit Facility generally will prohibit us and
Buffets and its subsidiaries from declaring or making, directly
or indirectly, any dividend or other distribution (whether in
cash, securities or other property) in respect of our respective
equity interests or on account of the notes, subject to certain
limited exceptions, which include, among other things, that
Buffets may, or Buffets may make distributions to us so that we
may, make dividends and distributions so long as no default then
exists under the Amended Credit Facility, Buffets Holdings does
not have any deferred and unpaid interest outstanding on the
senior subordinated notes or Buffets Holdings does not meet a
minimum consolidated coverage ratio.
</FONT>

<DIV>&nbsp;</DIV>

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Events of Default</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The amended credit agreement will contain events
of default customary for such financings, including, but not
limited 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">nonpayment of principal, interest, fees or other
    amounts when due,
    </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">violation of covenants,
    </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 of any representation or warranty to be
    true in all material respects when made or deemed made,
    </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">cross default,
    </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">certain ERISA events,
    </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">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">bankruptcy events,
    </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">material judgments,&nbsp;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">actual or asserted invalidity of the guarantees,
    security documents or the subordination provisions of
    Buffets&#146; senior subordinated notes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These events of default allow for some grace
periods and materiality concepts.
</FONT>

<P align="left">
<B><FONT size="2">Senior Notes of Buffets</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Concurrently with this offering, we expect
Buffets to issue
$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of its &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;Senior Notes
due &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2014. Interest will be payable semi-annually
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
each year
through &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2014. The payment of principal, premium and interest on
Buffets&#146; Senior Notes will be fully and unconditionally
guaranteed, jointly and severally, by Buffets Holdings and by
Buffets&#146; domestic subsidiaries. Buffets&#146; Senior Notes
will be senior in right of payment to its guarantee of our
senior subordinated notes. The guarantees of Buffets&#146;
Senior Notes will be senior in right of payment to the senior
subordinated notes and the guarantees of such notes.
Buffets&#146; Senior Notes and the guarantees of such notes will
be effectively subordinated to all secured debt of Buffets
Holdings, Buffets and its subsidiaries, including all
obligations under the Amended Credit Facility.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Buffets&#146; Senior Notes are expected to be
optionally redeemable after
their &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;anniversary of issuance at a
premium that declines ratably to zero on
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;anniversary of issuance. The
indenture governing Buffets&#146; Senior Notes is also expected
to require Buffets to offer to repurchase all or a portion of
its Senior Notes upon a change of control or following certain
asset sales.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indenture governing Buffets&#146; Senior
Notes is expected to contain covenants limiting Buffets&#146;
ability, and the ability of Buffets Holdings and its
subsidiaries, among other things, to:
</FONT>
<P>

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    <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">incur additional indebtedness,
    </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">make restricted payments,
    </FONT></TD>
</TR>

</TABLE>

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<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">create restrictions on the payment of dividends,
    </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">sell assets or capital stock of subsidiaries,
    </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">engage in transactions with affiliates,
    </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">sell or issue capital stock of subsidiaries,
    </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">incur liens,
    </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">engage in sale/leaseback transactions,&nbsp;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">consolidate, merge or transfer assets.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">11&nbsp;1/4%&nbsp;Senior Subordinated
Notes</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;28, 2002, Buffets issued
11&nbsp;1/4%&nbsp;senior subordinated notes in the principal
amount of $230.0&nbsp;million due July&nbsp;15, 2010.
Buffets&#146; 11&nbsp;1/4%&nbsp;Notes were issued at a price
equal to 96.181% of the principal amount, resulting in an
effective yield of 12% to the initial principal amount. Interest
is payable semi-annually on January&nbsp;15 and July&nbsp;15 of
each year through July&nbsp;15, 2010. The payment of principal,
premium and interest on the senior subordinated notes is fully
and unconditionally guaranteed, jointly and severally, by
Buffets Holdings and by Buffets&#146; wholly owned subsidiaries,
namely Distinctive Dining, Inc., HomeTown Buffet, Inc., OCB
Purchasing Co., OCB Restaurant Co., Restaurant Innovations,
Inc., Tahoe Joe&#146;s Inc., Buffets Leasing Company, LLC,
HomeTown Leasing Company, LLC, OCB Leasing Company, LLC and
Tahoe Joe&#146;s Leasing Company, LLC. Buffets&#146;
11&nbsp;1/4%&nbsp;Notes are subordinated to all senior debt of
Buffets and the guarantors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with this offering, Buffets will
conduct a tender offer and consent solicitation, whereby Buffets
will offer to repurchase its 11&nbsp;1/4%&nbsp;Notes at a cash
purchase price, together with accrued interest, and the holders
of Buffets&#146; 11&nbsp;1/4%&nbsp;Notes will be asked to
consent to a supplemental indenture which will remove all
restrictive covenants relating to Buffets&#146;
11&nbsp;1/4%&nbsp;Notes. The offering and the tender offer for
the 11&nbsp;1/4%&nbsp;Notes are conditional upon each other.
</FONT>

<P align="left">
<B><FONT size="2">13&nbsp;7/8%&nbsp;Notes</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On May&nbsp;18, 2004, we issued $132&nbsp;million
aggregate principal amount at maturity of our
13&nbsp;7/8%&nbsp;senior discount notes due December&nbsp;15,
2010. Our 13&nbsp;7/8%&nbsp;Notes were issued at a discount to
their aggregate principal amount at maturity. Prior to
July&nbsp;31, 2008, interest will accrue on our
13&nbsp;7/8%&nbsp;Notes in the form of an increase in the
accreted value of those notes. The accreted value of each note
will increase until July&nbsp;31, 2008 at a rate of
13&nbsp;7/8%&nbsp;per annum. After this date, cash interest on
the notes will accrue and be payable on January&nbsp;31 and
July&nbsp;31 of each year at a rate of 13&nbsp;7/8%&nbsp;per
annum. If we fail to meet certain leverage ratio tests on our
about July&nbsp;31, 2006 or July&nbsp;31, 2008, additional
interest will accrue on the notes from that date at a rate of
1%&nbsp;per annum, up to a maximum of 2%&nbsp;per annum. Our
13&nbsp;7/8%&nbsp;Notes are subordinated to all secured debt of
Buffets Holdings and are structurally subordinated to all debt
of Buffets Holdings&#146; subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with this offering, we will conduct
a tender offer and consent solicitation, whereby we will offer
to repurchase our 13&nbsp;7/8%&nbsp;Notes at a cash purchase
price of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%, together with accrued
and unpaid interest, and the holders of our
13&nbsp;7/8%&nbsp;Notes will be asked to consent to a
supplemental indenture which will remove all restrictive
covenants relating to our 13&nbsp;7/8%&nbsp;Notes. To the extent
that any of our 13&nbsp;7/8% Notes remain outstanding, we expect
to redeem such 13&nbsp;7/8%&nbsp;Notes after the tender offer
with the net cash proceeds of this offering at a redemption
price of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%.
</FONT>

<P align="center"><FONT size="2">97
</FONT>

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<DIV align="left">
<A name='119'></A>
</DIV>

<!-- link1 "DESCRIPTION OF IDSs" -->

<P align="center">
<B><FONT size="2">DESCRIPTION OF IDSs</FONT></B>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are
offering &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs,
including &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
the public. Each IDS initially represents:
</FONT>
<P>

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<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">one share of our Class&nbsp;A common
    stock;&nbsp;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 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;senior
    subordinated note with a
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;principal
    amount.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The ratio of Class&nbsp;A common stock to
principal amount of senior subordinated notes represented by an
IDS is subject to change in the event of a stock split,
combination or reclassification of our common stock. For
example, if we elect to effect a two-for-one stock split, from
and after the effective date of the stock split, each IDS will
represent two shares of Class&nbsp;A common stock and the same
principal amount of senior subordinated notes as it previously
represented. Likewise, if we effect a combination or
reclassification of our Class&nbsp;A common stock, each IDS will
thereafter represent the appropriate number of shares of
Class&nbsp;A common stock on a combined or reclassified basis,
as applicable, and the same principal amount of senior
subordinated notes as it previously represented. Promptly
following the occurrence of any such event, we will file with
the SEC a Current Report on Form&nbsp;8-K or any other
applicable form, disclosing the changes in the ratio of
Class&nbsp;A common stock to principal amount of senior
subordinated notes as a result of such event.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders of IDSs are at all times the beneficial
owners of the Class&nbsp;A common stock and senior subordinated
notes represented by such IDSs and, through their broker or
other financial institution and DTC, will each have exactly the
same rights, privileges and preferences, including voting
rights, rights to receive distributions, rights and preferences
in the event of a default under the indenture governing the
senior subordinated notes, ranking upon bankruptcy and rights to
receive communications and notices as a direct holder of
Class&nbsp;A common stock and senior subordinated notes, as
applicable.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The IDSs will be issued in book-entry form only.
As discussed below under &#147;&#151;&nbsp;Book-Entry Settlement
and Clearance,&#148; Cede&nbsp;&#38; Co., a nominee of DTC will
be the sole registered holder of the IDSs. That means you will
not be a registered holder of IDSs, and you will not receive a
certificate for your IDSs. However, a holder of common stock,
including a holder of an IDS that requests that IDSs be
separated, has a legal right under Delaware law to request that
we issue a certificate for such Class A common stock. Until such
request is made, you must rely on your broker or other financial
institution that will maintain your book-entry position to
receive the benefits and exercise the rights of a holder of IDSs
that are described below. You should consult with your broker or
financial institution to find out what those procedures are.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All IDS issuances will be registered under the
Securities Act of 1933.
</FONT>

<P align="left">
<B><FONT size="2">Voluntary Separation and Combination</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders of IDSs, whether purchased in this
offering or in a subsequent offering of IDSs of the same series
may, at any time after the earlier of 45&nbsp;days from the date
of the closing of this offering or the occurrence of a change of
control, through their broker or other financial institution,
separate the IDSs into the shares of our Class&nbsp;A common
stock and senior subordinated notes represented thereby. Unless
the IDSs have been previously automatically separated as a
result of redemption or maturity or otherwise, any holder of
shares of our Class&nbsp;A common stock and senior subordinated
notes may, at any time after the senior subordinated notes
become separable by the holders, through his or her broker or
other financial institution, combine the applicable number of
shares of Class&nbsp;A common stock and senior subordinated
notes to form IDSs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We currently do not anticipate that our Class A
common stock or our senior subordinated notes will trade on any
exchange. We will use commercially reasonable efforts to list
our common stock for separate trading on
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, if a sufficient
number of shares of our Class&nbsp;A common stock are held
separately (not represented by IDSs) to meet the minimum
requirements for separate trading on
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for
at
</FONT>

<P align="center"><FONT size="2">98
</FONT>

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<DIV align="left">
<FONT size="2">least 30&nbsp;consecutive trading days (assuming
that we otherwise continue to satisfy all other applicable
listing requirements of such stock exchange at that time).
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Automatic Separation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon the occurrence of any of the following, all
outstanding IDSs will automatically separate into the shares of
Class&nbsp;A common stock and senior subordinated notes
represented thereby:
</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 payment default on the senior subordinated
    notes continues for 90&nbsp;days (without cure),
    </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">exercise by us of our right to redeem all or a
    portion of the senior subordinated notes, which may be
    represented by IDSs at the time of such redemption,
    </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 date on which principal on the senior
    subordinated notes becomes due and payable,&nbsp;whether at the
    stated maturity date or upon acceleration thereof, 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">if the Depositary Trust Company, or DTC, no
    longer makes the IDS securities eligible for deposit or ceases
    to be a registered clearing agency under the Securities Exchange
    Act of 1934 and we are unable to find a successor depository.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Following the automatic separation of the IDSs
shares of Class&nbsp;A common stock and senior subordinated
notes may no longer be combined to form IDSs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon an automatic separation due to the exercise
by us of our right to redeem the senior subordinated notes in
part, subject to certain conditions, the holders of Class&nbsp;B
common stock will receive Class&nbsp;A common stock and senior
subordinated notes in exchange for their Class&nbsp;B common
stock.
</FONT>

<P align="left">
<B><FONT size="2">Book-Entry Settlement and Clearance</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DTC will act as securities depository for the
IDSs, the senior subordinated notes and the shares of
Class&nbsp;A common stock represented by the IDSs (collectively,
the &#147;securities&#148;). The transfer agent(s) for the
Class&nbsp;A common stock and the senior subordinated notes
represented by the IDSs (collectively, the
&#147;components&#148;) will act as custodian for the components
on behalf of the holders of the IDSs. The transfer agent for the
IDSs will act as custodians for the IDSs on behalf of holders of
IDSs. The components and the IDSs will be issued in
fully-registered form and will be represented by one or more
global notes and global stock certificates. The IDSs will be
registered in the name of DTC&#146;s nominee Cede&nbsp;&#38; Co.
and the components will be registered in the name of the
custodian for the holders of the IDSs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Book-Entry
Procedures.</FONT></I><FONT size="2"> If you intend to
purchase&nbsp;IDSs in the manner provided by this prospectus you
must do so through the DTC system or through direct and indirect
participants. The participant that you purchase through will
receive a credit for the applicable security on DTC&#146;s
records. The ownership interest of each actual purchaser of the
applicable security, who we refer to as a &#147;beneficial
owner,&#148; is to be recorded on the participant&#146;s
records. All interests in the securities will be subject to the
operations and procedures of DTC. The operations and procedures
of DTC may be changed at any time. We are not responsible for
DTC&#146;s rules, procedures and operations or for the
performance by DTC or its participants or indirect participants
of their respective obligations under the rules and procedures
governing their operations. However, we will take responsibility
for actions taken by DTC in accordance with instructions
provided by us.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">DTC has advised us as
follows:</FONT></I><FONT size="2"> DTC is a limited purpose
trust company organized under the laws of the State of New York,
a &#147;banking organization&#148; within the meaning of the New
York State Banking Law, a member of the Federal Reserve System,
a &#147;clearing corporation&#148; within the meaning of the
Uniform Commercial Code and a &#147;clearing agency&#148;
registered under Section&nbsp;17A of the Securities Exchange Act
of 1934. DTC was created to hold securities for its participants
and to facilitate the clearance and settlement of securities
transactions between its participants through electronic
book-entry changes to the accounts of its participants.
DTC&#146;s participants include securities brokers and dealers,
including the underwriters, banks and trust companies, clearing
corporations and other organizations. Indirect access to
DTC&#146;s system is also available to others such as banks,
brokers, dealers and trust
</FONT>

<P align="center"><FONT size="2">99
</FONT>

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<DIV align="left">
<FONT size="2">companies. These indirect participants clear
through or maintain a custodial relationship with a DTC
participant, either directly or indirectly. The rules that apply
to DTC and its participants are on file with the SEC.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To facilitate subsequent transfers, all IDSs
deposited by direct participants with DTC are registered in the
name of DTC&#146;s nominee, Cede&nbsp;&#38; Co. The components
will be registered in the name of the custodian for the holders
of IDSs. The deposit of IDSs with DTC and their registration in
the name of Cede&nbsp;&#38; Co. or the custodians effect no
change in beneficial ownership. DTC has no knowledge of the
actual beneficial owners of the securities. DTC&#146;s records
reflect only the identity of the direct participants to whose
accounts such securities are credited, which may or may not be
the beneficial owners. The participants and custodians will
remain responsible for keeping account of their holdings on
behalf of their customers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Transfers of ownership interests in the
securities are to be accomplished by entries made on the books
of participants acting on behalf of beneficial owners.
Beneficial owners will not receive certificates representing
their ownership interests in the applicable security except in
the event that use of the book-entry system for the securities
is discontinued.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Separation and
Combination.</FONT></I><FONT size="2"> Holders of IDSs may, at
any time after 45&nbsp;days from the date of original issuance,
through their broker or other financial institution, separate
their IDSs into the shares of Class&nbsp;A common stock and
senior subordinated notes represented thereby. Similarly, any
holder of shares of our Class&nbsp;A common stock and senior
subordinated notes may, at any time after 45&nbsp;days from the
date of original issuance, through their broker or other
financial institution, combine the applicable number of shares
of Class&nbsp;A common stock and senior subordinated notes to
form IDSs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, all outstanding IDSs will be
automatically separated into the shares of Class&nbsp;A common
stock and senior subordinated notes represented thereby upon the
occurrence of the following:
</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 payment default on the senior subordinated
    notes continues for 90&nbsp;days (without cure),
    </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">exercise by us of our right to redeem all or a
    portion of the senior subordinated notes, which may be
    represented by IDSs at the time of such redemption,
    </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 date on which principal on the senior
    subordinated notes becomes due and payable, whether at the
    stated maturity or upon acceleration,&nbsp;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">if DTC no longer makes the IDSs eligible for
    deposit or ceases to be a registered clearing agency under the
    Securities Exchange Act of 1934 and we are unable to find a
    successor depositary.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Following the automatic separation of the IDSs,
shares of Class&nbsp;A common stock and senior subordinated
notes may no longer be combined to form IDSs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon an automatic separation due to the exercise
by us of our right to redeem the senior subordinated notes in
part, subject to certain conditions, the holders of Class&nbsp;B
common stock will have the option, subject to the conditions set
forth in the indenture and the investor rights agreement, to
convert the Class&nbsp;B common stock to Class&nbsp;A common
stock and senior subordinated notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any voluntary separation of IDSs and any
subsequent voluntary recombination of IDSs from components will
be accomplished by entries made by DTC participants acting on
behalf of beneficial owners, provided that DTC receives such
instructions by 3:00&nbsp;p.m., New York time, on that trading
day. Any instructions received after 3:00&nbsp;p.m., will be
effective the next business day, if permitted by the custodian
or participant delivering the instructions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Voluntary separation or recombination of IDSs
will be accomplished via the use of DTC&#146;s Deposit/
Withdrawal at Custodian, or DWAC, transaction system.
Participants or custodians seeking to separate or recombine IDSs
will be required to enter a DWAC transaction in each of the IDS
and its underlying components.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Separation will require submission of a
Withdrawal-DWAC in the IDS in conjunction with a Deposit-DWAC in
each of the underlying components. Upon receipt of DWAC
instructions in good order, the
</FONT>

<P align="center"><FONT size="2">100
</FONT>

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<DIV align="left">
<FONT size="2">transfer agent for the IDSs and its components
will cause the IDSs to be debited from Cede&nbsp;&#38;
Co.&#146;s account in the IDS and credited to a
separation/recombination reserve account in the IDS, and will
cause an appropriate number of the components to be debited from
the custodian&#146;s account in the components and credited to
Cede&nbsp;&#38; Co.&#146;s account.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Recombination of IDSs from underlying components
will require submission of a Deposit-DWAC in the IDS in
conjunction with a Withdrawal-DWAC in each of the underlying
components. Upon receipt of DWAC instructions in good order, the
transfer agent for the IDS and its components will cause an
appropriate number of components to be debited from
Cede&nbsp;&#38; Co.&#146;s account in the components and
credited to the account of the custodian, and will cause an
appropriate number of IDSs to be debited from the
separation/re-combination reserve account and credited to
Cede&nbsp;&#38; Co.&#146;s account in the IDS.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There may be certain transactional fees imposed
upon you by brokers and other financial intermediaries in
connection with separation or combination of IDSs and you are
urged to consult your broker regarding such transactional fees.
Any transactional fees charged by the transfer agent in
connection with separation and or recombination of IDSs will be
borne by us. We have been informed by DTC that the current fee
per transaction per participant account for any separation or
recombination is $4.50. However, DTC&#146;s fee is subject to
periodic changes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Conveyance of notices and other communications by
DTC to direct participants, by direct participants to indirect
participants, and by participants to beneficial owners will be
governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Neither DTC nor Cede&nbsp;&#38; Co. will consent
or vote with respect to the IDSs or the underlying components
and the custodian will not consent or vote with respect to the
Class&nbsp;A common stock and senior subordinated notes. Under
its usual procedures, DTC would mail an omnibus proxy to
participants as soon as possible after the record date. The
omnibus proxy assigns Cede&nbsp;&#38; Co.&#146;s consenting or
voting rights to those direct participants to whose accounts the
securities are credited on the record date.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We, indirectly through the trustee, will make any
payments on the senior subordinated notes to DTC and we will
make all payments on the Class&nbsp;A common stock to the
transfer agent for the benefit of the record holders. The
transfer agent will deliver these payments to DTC. DTC&#146;s
practice is to credit direct participants&#146; accounts on the
payment date in accordance with their respective holdings shown
on DTC&#146;s records unless DTC has reason to believe that it
will not receive payment on the payment date. Payments by
participants to beneficial owners will be governed by standing
instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or
registered in &#147;street name,&#148; and will be the
responsibility of such participant and not of DTC, us or the
transfer agent and registrar, subject to any statutory or
regulatory requirements as may be in effect from time to time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will be responsible for the payment,
indirectly through the trustee, of all amounts to DTC and the
transfer agent. The transfer agent will be responsible for the
disbursement of those payments to DTC. DTC will be responsible
for the disbursement of those payments to its participants, and
the participants will be responsible for disbursements of those
payments to beneficial owners.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">DTC may discontinue providing its service as
securities depository with respect to the IDSs, the shares of
our Class&nbsp;A common stock or our senior subordinated notes
at any time by giving reasonable notice to us or the transfer
agent and registrar. If DTC discontinues providing its service
as securities depository with respect to the IDSs and we are
unable to obtain a successor securities depository, you will
automatically take a position in the component securities. If
DTC discontinues providing its service as securities depository
with respect to the shares of our Class&nbsp;A common stock
and/or our senior subordinated notes and we are unable to obtain
a successor securities depository, we will print and deliver to
you certificates for the securities that have been discontinued
and you will automatically take a position in any securities
still subject to the depository arrangement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Also, in case we decide to discontinue use of the
system of book-entry transfers through DTC (or a successor
securities depository) we will print and deliver to you
certificates for the various certificates of Class&nbsp;A common
stock and senior subordinated notes you may own.
</FONT>

<P align="center"><FONT size="2">101
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The information in this section concerning DTC
and DTC&#146;s book-entry system has been obtained from sources
that we believe to be reliable, including DTC.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except for actions taken by DTC in accordance
with our instructions, neither we nor the trustee nor the
underwriters will have any responsibility or obligation to
participants, or the persons for whom they act as nominees, with
respect 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">the accuracy of the records of DTC, its nominee
    or any participant, with respect to any record of beneficial
    ownership interest in the securities on DTC&#146;s books,&nbsp;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">any payments, or the providing of notice, to
    participants or beneficial owners.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Procedures Relating to Subsequent
Issuances.</FONT></I><FONT size="2"> The indenture governing our
senior subordinated notes will provide that, in the event there
is a subsequent issuance of senior subordinated notes having
terms that are otherwise identical to the senior subordinated
notes (except for the issuance date), including any issuance of
IDSs in exchange for shares of Class&nbsp;B common stock, but
issued with OID, each holder of senior subordinated notes or
IDSs (as the case may be) agrees that, upon such issuance and
any issuance of senior subordinated notes thereafter, a portion
of such holder&#146;s senior subordinated notes, whether held as
part of IDSs or separately, will be automatically exchanged for
a portion of the senior subordinated notes acquired by the
holders of such subsequently issued senior subordinated notes
and the records of any record holders of senior subordinated
notes will be revised to reflect such exchanges. Consequently,
following each such subsequent issuance and exchange, without
any action by such holder, each holder of senior subordinated
notes or IDSs (as the case may be) will own senior subordinated
notes of each separate issuance in the same proportion as each
other holder. However, the aggregate principal amount of senior
subordinated notes owned by each holder will not change as a
result of such subsequent issuance and exchange. Immediately
following any exchange resulting from a subsequent offering, a
new CUSIP number will be assigned to represent an inseparable
unit consisting of the senior subordinated notes outstanding
prior to the subsequent issuance and the senior subordinated
notes issued in the subsequent issuance. Accordingly, the senior
subordinated notes issued in the original offering will not be
able to be separated from the senior subordinated notes issued
in any subsequent offering. In addition, immediately following
any exchange resulting from a subsequent offering, new IDSs will
be issued in exchange for the existing IDSs which will consist
of the inseparable unit described above representing the
proportionate principal amounts of each issuance of senior
subordinated notes (but with the same aggregate principal amount
as the senior subordinated notes (or inseparable unit)
represented by the IDSs immediately prior to such subsequent
issuance and exchange) and the Class&nbsp;A common stock. All
accounts of DTC participants or custodians with a position in
the securities will be automatically revised to reflect the new
CUSIP numbers. In the event of any voluntary or automatic
separation of IDSs following any such automatic exchange,
holders will receive the then existing components which are the
Class&nbsp;A common stock and the inseparable notes unit. An
automatic exchange of the senior subordinated notes described
above should not impair the rights any holder would otherwise
have to assert a claim under applicable securities laws against
us or the underwriters with respect to the full amount of the
senior subordinated notes purchased by such holder, including
senior subordinated notes purchased in this offering and senior
subordinated notes received by such holder in an automatic
exchange. However, if such notes are issued with OID, holders of
such notes may not be able to recover the portion of their
principal amount treated as unaccrued OID in the event of an
acceleration of the notes or a bankruptcy of the issuer prior to
the maturity of the notes. See &#147;Risk Factors&nbsp;&#151;
Subsequent issuances of senior subordinated notes may cause you
to recognize OID and may be treated as a taxable exchange by
you.&#148; Promptly following any subsequent issuance, we will
file with the SEC a Current Report on Form&nbsp;8-K or any other
applicable form, disclosing the changes, if any, to the OID
attributable to your senior subordinated notes as a result of
such subsequent issuance.
</FONT>

<P align="left">
<B><FONT size="2">IDS Transfer Agent</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;is
the IDS transfer agent.
</FONT>

<P align="center"><FONT size="2">102
</FONT>

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<DIV align="center">

</DIV>

<DIV align="left">
<A name='120'></A>
</DIV>

<!-- link1 "DESCRIPTION OF CAPITAL STOCK" -->

<P align="center">
<B><FONT size="2">DESCRIPTION OF CAPITAL STOCK</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon the consummation of the Transactions, our
authorized capital stock will consist
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Class&nbsp;A common
stock, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Class&nbsp;B common
stock, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Class&nbsp;C common stock
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of preferred stock. After this offering, we will have
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Class&nbsp;A common stock
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Class&nbsp;B common stock outstanding. No shares of
Class&nbsp;C common stock and no shares of preferred stock will
be outstanding upon the closing of this offering.
</FONT>

<P align="left">
<B><FONT size="2">Common Stock</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></TD>
    <TD>
    <B><I><FONT size="2">Voting</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The holders of our Class&nbsp;A common stock are
entitled to one vote per share on all matters submitted to a
vote of stockholders. Shares of our Class&nbsp;A common stock
and shares of our Class&nbsp;B common stock are entitled to the
same voting rights per share and vote together as a class on all
matters with respect to which are entitled to vote. Our amended
and restated certificate of incorporation will provide that for
such time as Caxton-Iseman Capital together with its affiliates
and related parties beneficially own at least 10% or 5% of our
equity, it will be entitled to nominate two of our directors or
one director, respectively. To the extent that the board does
not solicit proxies for the election of Caxton-Iseman Capital
nominees as directors, Caxton-Iseman Capital will be entitled to
solicit proxies for the election of such nominees at our
expense. In addition, our amended and restated certificate of
incorporation prohibits any eligibility requirement for
directors, unless (i) required by applicable law, (ii)
established in our certificate of incorporation, or (iii)
adopted by our board of directors in the by-laws with respect to
an age qualification, or with respect to a continuing service
obligation for employee directors upon their ceasing employment
with 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">No Cumulative Voting Rights</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The common stock does not have cumulative voting
rights, which means that the holders of a majority of the
outstanding common stock voting for the election of directors
can elect all directors then being elected.
</FONT>

<DIV>&nbsp;</DIV>

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<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
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<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Rights to Dividends and on Liquidation,
    Dissolution or Winding Up</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The holders of our common stock are entitled to
receive dividends as they may be lawfully declared from time to
time by the board of directors of our company, subject to any
preferential rights of holders of any outstanding shares of
preferred stock. In the event of any liquidation, dissolution or
winding up of our company, common stockholders are entitled to
share ratably in our assets available for distribution to the
stockholders, subject to the prior rights of holders of any
outstanding preferred stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon the completion of this offering, our board
of directors will adopt a dividend policy with respect to our
Class&nbsp;A and Class&nbsp;B common stock pursuant to which
cash generated by our company in excess of operating needs and
reserves, interest and principal payments on indebtedness, and
capital expenditures sufficient to maintain our properties and
other assets would in general be distributed as regular
quarterly cash dividends to the holders of our Class&nbsp;A and
Class&nbsp;B common stock and may not be retained by us as cash
on our balance sheet. This policy reflects a basic judgment that
the holders of our common stock would be better served if we
distributed our available cash (as defined below) to them
instead of retaining it in our business. However:
</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">there is no legal or contractual requirement that
    we pay the dividends, and the dividends are neither mandatory
    nor guaranteed;
    </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 dividend policy can be modified or revoked at
    any time;
    </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 board of directors is free to make exceptions
    to the dividend policy, from time to time and at their sole
    discretion;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">103
</FONT>

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<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 payment of dividends is subject to
    limitations and restrictions under:
    </FONT></TD>
</TR>

</TABLE>
<P>

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

<TR>
    <TD width="5%"></TD>
    <TD width="1%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the indenture governing our senior subordinated
    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">the indenture governing Buffets&#146; Senior
    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">the terms of the Amended Credit Facility,&nbsp;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 terms of any other then outstanding
    indebtedness of ours;&nbsp;and
    </FONT></TD>
</TR>

</TABLE>
<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 payment of dividends is subject to
    limitations and restrictions under state law.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We intend to pay dividends quarterly on the
15<SUP>th</SUP> day of February, May, August and November of
each year. We intend to make our first dividend payment
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004 to holders of record as of the first day of such month.
Such dividend payment will include a partial quarterly dividend
payment for the period commencing on the closing of this
offering and ending
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
and a regular quarterly dividend payment for the period
commencing &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
ending
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under our dividend policy, we intend to pay
quarterly dividends 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">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
    share of Class&nbsp;A common stock,&nbsp;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">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
    share of Class&nbsp;B common stock.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The dividends on the Class&nbsp;B common stock
are intended to replicate the yield on the IDS units. Our
amended and restated certificate of incorporation will provide
that in the event we declare and pay dividends on our
Class&nbsp;A common stock, we must declare and pay dividends on
our Class&nbsp;B common stock at a level that
is &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;times
the dividends paid in respect of each share of Class&nbsp;A
common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Assuming we pay quarterly dividends as intended
under our dividend policy, this would equate to
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share of Class&nbsp;A common stock and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share of Class&nbsp;B common stock of dividends for the period
beginning &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;through &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
the first four full quarterly dividend payment periods following
the closing of this offering. However, notwithstanding the
dividend policy, the amount of dividends, if any, for each
quarterly dividend payment date, including the dividend payment
date, will be determined by our board of directors on a
quarterly basis after taking into account various factors,
including our results of operations, cash requirements,
financial condition, the dividend restrictions set forth in the
indentures governing our senior subordinated notes, the
indenture governing Buffets&#146; Senior Notes and the terms of
the Amended Credit Facility, provisions of applicable law and
other factors that our board of directors may deem relevant.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Dividend payments are not mandatory or guaranteed
and holders of our common stock do not have any legal right to
receive, or require us to pay, dividends. Our board of directors
may, in its sole discretion, amend or repeal this dividend
policy with respect to the Class&nbsp;A and Class&nbsp;B common
stock at any time. Furthermore, our board of directors may
decrease the level of dividends for the Class&nbsp;A and
Class&nbsp;B common stock below the intended dividend rate set
forth above or discontinue entirely the payment of dividends.
See &#147;Dividend Policy and Restrictions&#148; and &#147;Risk
Factors&nbsp;&#151; Risks Relating to the IDSs, the Shares of
Class&nbsp;A Common Stock and the Senior Subordinated Notes
Represented by the IDSs, and the Senior Subordinated Notes
Offered Separately&nbsp;&#151; You may not receive the level of
dividends provided for in our dividend policy, which our board
of directors is expected to adopt upon the closing of this
offering, or any dividends at all.&#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">Preemptive and Other Subscription
    Rights</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Common stockholders do not have preemptive,
subscription or redemption rights, and are not subject to
further calls or assessments.
</FONT>

<P align="center"><FONT size="2">104
</FONT>

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<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">Additional Issuance of Our Authorized
    Common Stock</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additional shares of our authorized common stock
may be issued, as determined by the board of directors of our
company from time to time, without approval of holders of our
common stock, except as may be required by applicable law or the
rules of any stock exchange or automated quotation system on
which our securities may be listed or traded. However, according
to our by-laws we may not issue any shares of Class&nbsp;A
common stock unless:
</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">they are issued as part of an IDS the issuance of
    which has been registered with the SEC;
    </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">any IDS that may result from the combination of
    the shares of Class&nbsp;A common stock and our senior
    subordinated notes have been registered with the SEC;&nbsp;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">no IDSs are currently outstanding.
    </FONT></TD>
</TR>

</TABLE>

<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">Combination to Form&nbsp;IDSs</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any holder of shares of Class&nbsp;A common stock
and senior subordinated notes may, at any time, through his or
her broker or other financial institution, combine the
applicable number of shares of Class&nbsp;A common stock and
principal amount of senior subordinated notes to form IDSs. See
&#147;Description of IDSs&nbsp;&#151; Voluntary Separation and
Combination.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The holders of shares of Class&nbsp;B common
stock may not combine their shares of Class&nbsp;B common stock
with senior subordinated notes to form IDSs.
</FONT>

<P align="left">
<B><FONT size="2">Class&nbsp;B Common Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the terms applicable to the
Class&nbsp;A and Class&nbsp;B common stock described under the
heading &#147;&#151;&nbsp;Common Stock,&#148; the Class&nbsp;B
common stock has the following features:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Conversion.</FONT></I><FONT size="2">
Following the consummation of the Transactions and through the
maturity date of the senior subordinated notes, and subject to
the lock-up period, each share of Class&nbsp;B common stock will
be exchangeable into IDSs at a fixed rate
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Class&nbsp;B common stock for one IDS. If the IDSs have
automatically separated or if the shares of our Class&nbsp;A
common stock are listed for separate trading on a stock
exchange, the holders of the Class&nbsp;B common stock may
convert each share of Class&nbsp;B common stock
into &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Class&nbsp;A common stock and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
senior subordinated notes. All exchanges are subject to
compliance with the following requirements:
</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 exchange must comply with applicable laws,
    including, without limitation, securities laws;
    </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 exchange must occur pursuant to an effective
    registration statement in the United States;
    </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 Board of Directors must determine in good
    faith that the additional senior subordinated notes issued in
    this conversion should be treated as debt for United States
    federal income tax purposes;
    </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 exchange must not conflict with or cause a
    default under any material financing agreement;
    </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 exchange must not cause a mandatory
    suspension of dividends or deferral of interest under any
    material financing agreement as of the measurement date
    immediately following the proposed exchange 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">no event of default or deferral of interest has
    occurred and is continuing under the indenture governing the
    senior subordinated notes and all deferred interest, if any,
    together with interest accrued thereon has been paid in full.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event that the IDSs are automatically
separated as a result of the partial redemption of any senior
subordinated notes, at such time we will amend our by-laws to
delete the restriction that we may only issue shares of
Class&nbsp;A common stock in offerings registered with the
Securities and Exchange Commission and each share of
Class&nbsp;B common stock will automatically be exchanged
for &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;share
of Class&nbsp;A common stock and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
senior subordinated notes.
</FONT>

<P align="center"><FONT size="2">105
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subject to limited exceptions, until the second
anniversary of the consummation of this offering, the investor
rights agreement will restrict the holders of our Class&nbsp;B
common stock from exercising their exchange rights if, following
the exchange, the holders of our Class&nbsp;B common stock would
hold in the aggregate less than 10% of the outstanding shares of
our capital stock.
</FONT>

<P align="left">
<B><FONT size="2">Class&nbsp;C Common Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following summary is qualified in its
entirety by the provisions of our amended and restated
certificate of incorporation and by-laws and the applicable
provisions of the Delaware General Corporation Law.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Dividends.</FONT></I><FONT size="2"> Holders
of shares of our Class&nbsp;C common stock will be entitled to
receive such dividends and other distributions in cash, stock or
property of ours as may be declared by our board of directors
from time to time out of our assets or funds legally available
for dividends or other distributions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Rights Upon
Liquidation.</FONT></I><FONT size="2"> In the event of our
voluntary or involuntary liquidation, dissolution or winding up,
holders of shares of our Class&nbsp;A, B and C common stock will
be entitled to share equally (as if there were only one class of
common equity) in our assets available for distribution to the
holders of shares of our common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Voting and Preemptive
Rights.</FONT></I><FONT size="2"> Shares of our Class&nbsp;C
common stock will carry one vote per share and will vote as a
class together with the holders of Class&nbsp;A common stock,
Class&nbsp;B common stock and preferred shares with respect to
which stockholder are entitled to vote.
</FONT>

<P align="left">
<B><FONT size="2">Preferred Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our preferred stock may be issued from time to
time in one or more series. Our board is authorized to fix the
dividend rights, dividend rates, any conversion rights or right
of exchange, any voting rights, rights and terms of redemption,
the redemption price or prices, the payments in the event of
liquidation, and any other rights, preferences, privileges, and
restrictions of any series of preferred stock and the number of
shares constituting such series and their designation. We have
no present plans to issue any shares of preferred stock other
than in connection with the rights distribution described below.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Depending upon the rights of such preferred
stock, the issuance of preferred stock could have an adverse
effect on holders of our common stock by delaying or preventing
a change in control, adversely affecting the voting power of the
holders of common stock, including the loss of voting control to
others, making removal of the present management more difficult,
or resulting in restrictions upon the payment of dividends and
other distributions to the holders of common stock. These
provisions could limit the price that investors might be willing
to pay in the future for shares of our common stock.
</FONT>

<P align="left">
<B><FONT size="2">Certain Certificate of Incorporation, By-Law,
Investor Rights Agreement and Statutory Provisions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The provisions of our amended and restated
certificate of incorporation and by-laws, of our investor rights
agreement and of the Delaware General Corporation Law summarized
below may have an anti-takeover effect, may delay, defer or
prevent a tender offer or takeover attempt that you might
consider in your best interest, including an attempt that might
result in your receipt of a premium over the market price for
your shares, and may make more difficult the removal of our
incumbent directors.
</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">Directors&#146; Liability; Indemnification
    of Directors and Officers</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our amended and restated certificate of
incorporation provides that a director will not be personally
liable to us or our stockholders for monetary damages for breach
of fiduciary duty as a director, except:
</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">for any breach of the duty of loyalty;
    </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">for acts or omissions not in good faith or which
    involve intentional misconduct or knowing violations of law;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">106
</FONT>

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<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">for liability under Section&nbsp;174 of the
    Delaware General Corporation Law (relating to unlawful
    dividends, stock repurchases, or stock redemptions);&nbsp;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">for any transaction from which the director
    derived any improper personal benefit.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This provision does not limit or eliminate our
rights or those of any stockholder to seek non-monetary relief
such as an injunction or rescission in the event of a breach of
a director&#146;s duty of care. The provisions will not alter
the liability of directors under federal securities laws. In
addition, our amended and restated certificate of incorporation
and by-laws provide that we indemnify each director and the
officers, employees, and agents determined by our board to the
fullest extent provided by the laws of the State of Delaware.
</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">Special Meetings of
    Stockholders</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our amended and restated by-laws provide that
special meetings of stockholders may be called only by the
chairman or by a majority of the members of our board.
Stockholders are not permitted to call a special meeting of
stockholders, to require that the chairman call such a special
meeting, or to require that our board request the calling of a
special meeting of stockholders.
</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">Stockholder Action; Advance Notice
    Requirements For Stockholder Proposals and Director
    Nominations</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our amended and restated certificate of
incorporation provides that stockholders may not take action by
written consent, but may only take action at duly called annual
or special meetings. In addition, our by-laws establish advance
notice procedures for:
</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">stockholders to nominate candidates for election
    as a director;&nbsp;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">stockholders to propose topics at
    stockholders&#146; meetings.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Stockholders must notify our corporate secretary
in writing prior to the meeting at which the matters are to be
acted upon or directors are to be elected. The notice must
contain the information specified in our by-laws. To be timely,
the notice must be received at our corporate headquarters not
less than 90&nbsp;days nor more than 120&nbsp;days prior to the
first anniversary of the date of the prior year&#146;s annual
meeting of stockholders. If the annual meeting is advanced by
more than 30&nbsp;days, or delayed by more than 70&nbsp;days,
from the anniversary of the preceding year&#146;s annual
meeting, or if no annual meeting was held in the preceding year
or for the first annual meeting following this offering, notice
by the stockholder to be timely must be received not earlier
than the 120th day prior to the annual meeting and not later
than the later of the 90th day prior to the annual meeting or
the 10th day following the day on which we notify stockholders
of the date of the annual meeting, either by mail or other
public disclosure. In the case of a special meeting of
stockholders called to elect directors, the stockholder notice
must be received not earlier than 120&nbsp;days prior to the
special meeting and not later than the later of the 90th day
prior to the special meeting or the 10th day following the day
on which we notify stockholders of the date of the special
meeting, either by mail or other public disclosure. These
provisions may preclude some stockholders from bringing matters
before the stockholders at an annual or special meeting or from
nominating candidates for director at an annual or special
meeting.
</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">Election and Removal of
    Directors</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our board is divided into three classes. The
directors in each class will serve for a three-year term, one
class being elected each year by our stockholders. This system
of electing and removing directors may discourage a third party
from making a tender offer or otherwise attempting to obtain
control of us because it generally makes it more difficult for
stockholders to replace a majority of our directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our amended and restated certificate of
incorporation and by-laws do not provide for cumulative voting
in the election of directors. Our directors may only be removed
for cause.
</FONT>

<P align="center"><FONT size="2">107
</FONT>

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<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">Anti-Takeover Provisions of Delaware
    Law</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are a Delaware corporation subject to
Section&nbsp;203 of the Delaware General Corporation Law. In
general, Section&nbsp;203 prohibits a publicly held Delaware
corporation from engaging in a &#147;business combination&#148;
with an &#147;interested stockholder&#148; for a three-year
period following the time that this stockholder becomes an
interested stockholder, unless the business combination is
approved in a prescribed manner. A &#147;business
combination&#148; includes a merger, asset sale or other
transaction resulting in a financial benefit to the interested
stockholder. An &#147;interested stockholder&#148; is a person
who, together with affiliates and associates, owns (or, in some
cases, within three years prior, did own) 15% or more of the
corporation&#146;s voting stock. Under Section&nbsp;203, a
business combination between the corporation and an interested
stockholder is prohibited unless it satisfies one of the
following conditions:
</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 board of directors must have previously
    approved either the business combination or the transaction
    which resulted in the stockholder becoming an interested
    stockholder;
    </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">upon consummation of the transaction which
    resulted in the stockholder becoming an interested stockholder,
    the interested stockholder owned at least 85% of the voting
    stock of the corporation outstanding at the time the transaction
    commenced (excluding, for purposes of determining the number of
    our shares outstanding, shares owned by (a)&nbsp;persons who are
    directors and also officers and (b)&nbsp;employee stock plans,
    in some instances);&nbsp;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 business combination is approved by the board
    of directors of the corporation and authorized at an annual or
    special meeting of the stockholders by the affirmative vote of
    at least two-thirds of the outstanding voting stock which is not
    owned by the interested stockholder.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The existence of this provision may have an
anti-takeover effect with respect to transactions not approved
in advance by our board of directors, including discouraging
takeover attempts that might result in a premium over the market
price for the shares of our common stock.
</FONT>

<P align="left">
<B><FONT size="2">Amendment to Certain Certificate of
Incorporation and By-Law Provisions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our amended and restated certificate of
incorporation provides that amendments to certain provisions of
the certificate will require the affirmative vote of the holders
of at least 66&nbsp;2/3% of the outstanding shares of our voting
stock, namely:
</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 provisions requiring a 66&nbsp;2/3%
    stockholder vote for removal of directors;
    </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 provisions requiring a 66&nbsp;2/3%
    stockholder vote for the amendment, repeal or adoption of our
    by-law provisions (described below);
    </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 provisions requiring a 66&nbsp;2/3%
    stockholder vote for the amendment of certain provisions of our
    certificate of incorporation; 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 provisions prohibiting stockholder action by
    written consent except under certain circumstances.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, our amended and restated certificate
of incorporation and by-laws provide that our by-laws are
subject to adoption, amendment or repeal either by a majority of
the members of our board or the affirmative vote of the holders
of not less than 66&nbsp;2/3% of the outstanding shares of our
voting stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The 66&nbsp;2/3% vote will allow the holders of a
minority of our voting securities to prevent the holders of a
majority or more of our voting securities from amending certain
provisions of our amended and restated certificate of
incorporation and our by-laws.
</FONT>

<P align="left">
<B><FONT size="2">Listing</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our shares of Class&nbsp;A common stock will not
be listed for separate trading on
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;until
a sufficient number of shares are held separately and not in the
form of IDSs as may be necessary to satisfy any applicable
listing requirements. If more than such required number of our
outstanding shares of Class&nbsp;A common stock is no longer
held in the form of IDSs for a period of 30 consecutive trading
days,
</FONT>

<P align="center"><FONT size="2">108
</FONT>

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<DIV align="left">
<FONT size="2">we will apply to list the shares of our
Class&nbsp;A common stock for separate trading on
the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
We will not list our shares of Class&nbsp;B common stock for
trading on any exchange.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Transfer Agent and Registrar</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The transfer agent and registrar for the common
stock
is &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
Its telephone number
is &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
</FONT>

<P align="center"><FONT size="2">109
</FONT>

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<DIV align="left">
<A name='121'></A>
</DIV>

<!-- link1 "DESCRIPTION OF SENIOR SUBORDINATED NOTES" -->

<P align="center">
<B><FONT size="2">DESCRIPTION OF SENIOR SUBORDINATED
NOTES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a description of the terms of
the indenture under which our senior subordinated notes (the
&#147;Notes&#148;) will be issued, a copy of the form of which
has been filed with the Commission as an exhibit to the
registration statement of which this prospectus is a part.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This description is subject to, and is qualified
in its entirety by reference to, all the provisions of the
indenture, including the definitions of certain terms therein
and those terms made a part thereof by the Trust Indenture Act
of 1939, as amended. The material terms used in this description
are defined under the subheading
&#147;&#151;&nbsp;Definitions.&#148; In this description, the
word &#147;Company&#148; refers only to Buffets Holdings, Inc.
and not to any of its subsidiaries.
</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 and the Notes. It does not
purport to be complete and we urge you to read the Indenture, a
copy of which will be available upon request from the Company.
</FONT>

<P align="left">
<B><FONT size="2">Terms of the Notes</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></TD>
    <TD>
    <B><I><FONT size="2">Maturity</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Notes will be unsecured senior subordinated
obligations of the Company and will mature
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2019.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Within 30&nbsp;days prior to the maturity or
redemption of the Notes, the Company will use its commercially
reasonable efforts to list or quote the outstanding shares of
its common stock on the securities exchange(s) or automated
securities quotation system(s), if any, on which the IDSs then
are listed or quoted, in addition to any other securities
exchange on which the common stock is then listed.
</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">Interest</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Notes will bear interest at a rate per year
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
from &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004, or from the most recent date to which interest has been
paid or provided for, payable quarterly in arrears on the 15th
day of February, May, August and November of each year, to
Holders of record at the close of business on
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;th
day of each such month or the immediately preceding Business Day
commencing &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004, provided that if any such day is not a Business Day,
interest shall be paid on the next Business Day.
</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">Interest Deferral</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2009, the Company will be permitted, at its election, on one or
more occasions to defer interest payments on the Notes (each, an
&#147;Initial Interest Deferral Period&#148;) by delivering to
the Trustee a copy of a resolution of the Company&#146;s Board
of Directors to the effect that, based upon a good-faith
determination of the Company&#146;s Board of Directors, such
deferral is reasonably necessary for bona-fide cash management
purposes, or to reduce the likelihood of or avoid a default
under any Designated Senior Indebtedness; provided, however,
that no such deferral may be commenced, and any on-going
deferral shall cease, if a default in payment of principal or
premium, if any, on the Notes has occurred and is continuing, an
Event of Default with respect to payment of interest on the
Notes has occurred and is continuing, or another Event of
Default with respect to the Notes has occurred and is continuing
and the Notes have been accelerated as a result of the
occurrence of such Event of Default; and provided, further, that
interest payments on the Notes may not be deferred under this
provision for more than eight quarters in the aggregate or
beyond &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2009.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2009, the Company will be permitted, at its election, on up to
four occasions to defer interest payments on the Notes (each, an
&#147;Additional Interest Deferral Period&#148; and, together
with the Initial Interest Deferral Period, an &#147;Interest
Deferral Period&#148;) with respect to up to two quarters per
occasion by delivering to the Trustee a copy of a resolution of
the Company&#146;s Board of Directors to the effect that, based
upon a good-faith determination of the Company&#146;s Board of
Directors, such deferral is reasonably necessary for bona-fide
cash management purposes, or to reduce the likelihood of or
avoid a
</FONT>

<P align="center"><FONT size="2">110
</FONT>

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<DIV align="left">
<FONT size="2">default under any Designated Senior Indebtedness;
provided, however, that no such deferral may be commenced, and
any on-going deferral shall cease, if a default in payment of
principal or premium, if any, on the Notes has occurred and is
continuing, an Event of Default with respect to payments of
interest on the Notes has occurred and is continuing, or another
Event of Default with respect to the Notes has occurred and is
continuing and the Notes have been accelerated as a result of
the occurrence of such Event of Default.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Deferred interest on the Notes will bear interest
at the same rate as the stated rate of interest applicable to
the Notes, compounded quarterly, until paid in full. No later
than &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2009, the Company must pay in full all interest deferred during
any Initial Interest Deferral Period, together with accrued
interest thereon. No later
than &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2019, the Company must pay all interest deferred during any
Additional Interest Deferral Period, together with accrued
interest thereon; provided that no Additional Interest Deferral
Period may commence, unless and until all interest deferred
pursuant to any preceding Interest Deferral Period, together
with accrued interest thereon, has been paid in full.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At the end of any Interest Deferral Period, the
Company will be obligated to resume quarterly payments of
interest on the Notes including interest on deferred interest.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During any Interest Deferral Period and so long
as any deferred interest or interest on deferred interest
remains outstanding, the Company will not be permitted to make
any payment of dividends on its common stock or make any
distribution to holders of common stock, or make certain other
Restricted Payments. See &#147;&#151;&nbsp;Certain
Covenants&nbsp;&#151; Limitation on Restricted Payments.&#148;
</FONT>

<P align="left">
<B><FONT size="2">Additional Notes</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Indenture will provide for the issuance of an
unlimited aggregate principal amount of additional senior
subordinated notes having identical terms and conditions to the
Notes offered hereby (other than issuance date) (the
&#147;Additional Notes&#148;), subject to compliance with the
covenants contained in the Indenture. Additional Notes will vote
on all matters with the Notes offered hereby. The Additional
Notes will be deemed to have the same accrued current period
interest, deferred interest and defaults as the Notes issued in
this offering and will be deemed to have expended Payment
Blockage Periods and interest deferral periods to the same
extent as the Notes issued in this offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Indenture will provide that, in the event
there is a subsequent issuance of Additional Notes, including
any issuances of IDSs in exchange for shares of Class&nbsp;B
common stock, but issued with OID, each Holder of the Notes or
the IDSs (as the case may be) agrees that, upon such issuance
and any issuance of Notes thereafter, a portion of such
Holder&#146;s Notes, whether held as part of IDSs or separately,
will be exchanged, automatically for a portion of the Additional
Notes acquired by the Holders of such Additional Notes and the
records of any record holders of Notes will be revised to
reflect such changes. Consequently, following any such
subsequent issuance and exchange, without any action by such
Holder, each Holder of the Notes or the IDSs (as the case may
be) will own the Notes and Additional Notes of each issuance in
the same proportion as each other Holder. The aggregate
principal amount of the Notes owned by each Holder will not
change as a result of such exchange. Any Additional Notes will
be guaranteed by the Guarantors on the same basis as the Notes.
See &#147;Material U.S. Federal Income Tax
Consequences&nbsp;&#151; Consequences to U.S.
Holders&nbsp;&#151; Senior Subordinated Notes&nbsp;&#151;
Additional Issuances.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There is a possibility that holders of Additional
Notes having original issue discount may not be able to collect
the unamortized portion of the original issue discount in the
event of an acceleration of the senior subordinated notes or
bankruptcy of the Company as described under &#147;Risk
Factors&nbsp;&#151; Risks Relating to the IDSs, the Shares of
Class&nbsp;A Common Stock and the Senior Subordinated Notes
Represented by the IDSs and the Senior Subordinated Notes
Offered Separately&nbsp;&#151; Subsequent issuances of senior
subordinated notes may cause you to recognize OID and may be
treated as a taxable exchange by you.&#148; Any such automatic
exchange should not impair the rights you would otherwise have
to assert a claim against us or the underwriters, under
applicable securities laws, with respect to the full amount of
Notes purchased by you.
</FONT>

<P align="center"><FONT size="2">111
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a condition to the Company&#146;s issuance of
Additional Notes, the Board of Directors shall determine in good
faith that, with respect to future issuances of Additional
Notes, the Additional Notes should be treated as debt for
U.S.&nbsp;federal income tax purposes. In addition, the Company
shall not issue Additional Notes unless it delivers to the
Trustee prior to or simultaneously with such issuance an opinion
of an independent advisor to the effect that, after giving
effect to the Incurrence of the Indebtedness evidenced by such
Additional Notes and related Guarantees, the Company and the
Guarantors are solvent.
</FONT>

<P align="left">
<B><FONT size="2">Optional Redemption</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Except as set forth below, the Company will not
be entitled to redeem the Notes at its option prior
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2009.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company may, at its option, redeem all, but
not less than all, of the Notes at any time upon not less than
30 nor more than 60&nbsp;days prior notice, at a redemption
price equal to 100% of the principal amount of the Notes plus
accrued and unpaid interest to the redemption date, if for
U.S.&nbsp;federal income tax purposes the Company is not, or
would not be, in the opinion of a nationally recognized tax
counsel experienced in such matters, permitted to deduct all or
a substantial portion of the interest payable on the Notes from
its income.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On or
after &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2009, the Company will be entitled at its option to redeem all
or a portion of the Notes upon not less than 30 nor more than
60&nbsp;days&#146; notice, at the redemption prices (expressed
in percentages of principal amount), plus accrued interest to
the redemption date (subject to the right of Holders of record
on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the 12-month
period commencing
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
the years set forth below:
</FONT>

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

<TR>
    <TD width="76%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Period</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Redemption 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">2009
    </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 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">2010
    </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 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">2011
    </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 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">2012 and thereafter
    </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">100</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Selection and Notice of Redemption</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the Company is redeeming less than all the
Notes at any time, the Trustee will select Notes as follows:
</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;if the Notes are listed on any national
    securities exchange, in compliance with the requirements of the
    principal national securities exchange on which the Notes are
    listed;&nbsp;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;if the Notes are not listed on any
    national securities exchange, on a pro rata basis, by lot or by
    such method as the trustee deems fair and appropriate.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company will cause notices of redemption to
be mailed by first-class mail at least 30 but not more than
60&nbsp;days before the redemption date to each holder of Notes
to be redeemed at its registered address, except that,
notwithstanding anything to the contrary herein, redemption
notices may be mailed more than 60&nbsp;days prior to a
redemption date if the notice is issued in connection with a
defeasance of the Notes or a satisfaction and discharge of the
Indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No Note will be redeemed in part unless all other
Notes are also redeemed in part on a pro rata basis. If any Note
is to be redeemed in part only, the notice of redemption that
relates to that Note will state the portion of the principal
amount thereof to be redeemed. The Company will issue a new Note
in a principal amount equal to the unredeemed portion of the
original Note in the name of the holder upon cancellation of the
original Note. Notes called for redemption become due on the
date fixed for redemption. On and after the redemption date,
interest ceases to accrue on Notes or portions of them called
for redemption, unless the Company defaults in making the
redemption payment.
</FONT>

<P align="center"><FONT size="2">112
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A full or partial redemption of the Notes will
result in an automatic separation of all IDSs, after which
shares of common stock and Notes may no longer be combined to
form IDSs. See &#147;Description of IDSs&nbsp;&#151; Automatic
Separation.&#148;
</FONT>

<P align="left">
<B><FONT size="2">Mandatory Redemption; Offers to Purchase; Open
Market Purchases</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company is not required to make any mandatory
redemption or sinking fund payments with respect to the Notes.
However, under certain circumstances, the Company may be
required to offer to purchase Notes as described under the
captions &#147;&#151;&nbsp;Change of Control&#148; and
&#147;&#151;&nbsp;Certain Covenants&nbsp;&#151; Limitation on
Sales of Assets and Subsidiary Stock.&#148; The Company may at
any time and from time to time purchase Notes in the open market
or otherwise.
</FONT>

<P align="left">
<B><FONT size="2">Guarantees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Subsidiary Guarantors will jointly and
severally guarantee, on a senior subordinated basis, the
Company&#146;s obligations under these Notes. Initially, the
Subsidiary Guarantors will be all of the Company&#146;s
Subsidiaries that guarantee Buffets&#146; obligations under the
Credit Agreement. The obligations of each Subsidiary Guarantor
will be limited as necessary to prevent that Subsidiary Guaranty
from constituting a fraudulent conveyance under applicable law.
See &#147;Risk Factors&nbsp;&#151; Risks Relating to the IDSs,
the Shares of Class&nbsp;A Common Stock and the Senior
Subordinated Notes Represented by the IDSs, and the Senior
Subordinated Notes Offered Separately&nbsp;&#151; Federal and
state laws permit a court to void the senior subordinated notes
or the subsidiary guarantees under certain circumstances.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each Subsidiary Guarantor that makes a payment
under its Subsidiary Guaranty will be entitled upon payment in
full of all guaranteed obligations under the Indenture to a
contribution from each other Subsidiary Guarantor in an amount
equal to such other Subsidiary Guarantor&#146;s pro rata portion
of such payment based on the respective net assets of all the
Subsidiary Guarantors at the time of such payment determined in
accordance with GAAP, <I>provided, however</I>, that during a
Default, such right of contribution shall be suspended until the
payment in full of all guaranteed obligations under the
Indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a Subsidiary Guaranty were rendered voidable,
it could be subordinated by a court to all other indebtedness
(including guarantees and other contingent liabilities) of the
applicable Subsidiary Guarantor, and, depending on the amount of
such indebtedness, a Subsidiary Guarantor&#146;s liability on
its Subsidiary Guaranty could be reduced to zero. See &#147;Risk
Factors&nbsp;&#151; Risks Relating to the IDSs, the Shares of
Class&nbsp;A Common Stock and the Senior Subordinated Notes
Represented by the IDSs, and the Senior Subordinated Notes
Offered Separately&nbsp;&#151; Federal and state laws permit a
court to void the senior subordinated notes or the subsidiary
guarantees under certain circumstances.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Subsidiary Guaranty of a Subsidiary Guarantor
will be released:
</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;upon the sale or other disposition
    (including by way of consolidation or merger) of a Subsidiary
    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">(2)&nbsp;upon the sale or disposition of all or
    substantially all the assets of a Subsidiary 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;if the Notes are defeased or discharged
    in accordance with the procedures described below under
    &#147;&#151;&nbsp;Defeasance&#148; or
    &#147;&#151;&nbsp;Satisfaction and Discharge;&#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;upon the designation of such Subsidiary
    Guarantor as an Unrestricted Subsidiary pursuant to the terms 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">(5)&nbsp;at such time as such Subsidiary
    Guarantor (i)&nbsp;no longer Guarantees any other Indebtedness
    of the Company or another Subsidiary Guarantor and (ii)&nbsp;has
    no outstanding Indebtedness for borrowed money (provided that
    for purposes of this provision, Indebtedness shall not include
    Indebtedness permitted to be Incurred pursuant to clause (3),
    (7), (8), (9), (10), (11) or (13) of paragraph&nbsp;(b) of the
    covenant described under &#147;&#151;&nbsp;Certain
    Covenants&nbsp;&#151;&nbsp;Limitation on Indebtedness&#148;);
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">113
</FONT>

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<P align="left">
<FONT size="2">in the case of (1) and (2) above, other than to
the Company or an Affiliate of the Company and as permitted by
the Indenture.
</FONT>

<P align="left">
<B><FONT size="2">Ranking</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></TD>
    <TD>
    <B><I><FONT size="2">Senior Indebtedness versus
    Notes</FONT></I></B></TD>
</TR>

</TABLE>

<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 and the payment of any Subsidiary
Guaranty will be subordinate in right of payment to the prior
payment in full of all Senior Indebtedness of the Company or the
relevant Subsidiary Guarantor, as the case may be, including the
obligations of the Company and such Subsidiary Guarantor under
the Credit Agreement and Buffets&#146; Senior Notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004, on a pro forma basis giving effect to the Refinancing
Transactions:
</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 Company&#146;s Senior Indebtedness
    would have been
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    of which would have been secured indebtedness;&nbsp;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;the Senior Indebtedness of the
    Subsidiary Guarantors would have been
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    of which would have been secured indebtedness.
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    of the Senior Indebtedness of the Subsidiary Guarantors consists
    of their respective guaranties and obligations of Senior
    Indebtedness under the Credit Agreement and
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    consists of their respective guaranties and obligations under
    Buffets&#146; Senior Notes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although the Indenture contains limitations on
the amount of additional Indebtedness that the Company and the
Subsidiary Guarantors may incur, under some circumstances the
amount of such Indebtedness could be substantial and, in any
case, such Indebtedness may be Senior Indebtedness. See
&#147;&#151;&nbsp;Certain Covenants&nbsp;&#151; Limitation on
Indebtedness.&#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">Liabilities of Subsidiaries versus
    Notes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a holding company, the Company has no
operations and, therefore, is dependent on the cash flow of its
subsidiaries and other entities to meet its own obligations,
including the payment of interest and principal obligations on
the Notes when due. All of the Company&#146;s existing
subsidiaries are guaranteeing the Notes. Future domestic
Restricted Subsidiaries that have Indebtedness are required to
guarantee the Notes. Claims of creditors of any non-guarantor
subsidiaries, including trade creditors holding indebtedness or
guarantees issued by any such non-guarantor subsidiaries, and
claims of preferred stockholders of any such non-guarantor
subsidiaries generally will have priority with respect to the
assets and earnings of any such non-guarantor subsidiaries over
the claims of the Company&#146;s creditors, including holders of
the Notes, even if such claims do not constitute Senior
Indebtedness. Accordingly, the Notes will be effectively
subordinated to creditors (including trade creditors) and
preferred stockholders, if any, of any non-guarantor
subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although the Indenture limits the incurrence of
Indebtedness and preferred stock of some of the Company&#146;s
subsidiaries, such limitation is subject to a number of
significant qualifications. Moreover, the Indenture does not
impose any limitation on the incurrence by such subsidiaries of
liabilities that are not considered Indebtedness under the
Indenture. See &#147;&#151;&nbsp;Certain Covenants&nbsp;&#151;
Limitation on Indebtedness.&#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">Other Senior Subordinated Indebtedness
    versus Notes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Only Indebtedness of the Company or a Subsidiary
Guarantor that is Senior Indebtedness will rank senior to the
Notes and the relevant Subsidiary Guaranty in accordance with
the provisions of the Indenture. The Notes and each Subsidiary
Guaranty will in all respects rank pari passu with all other
Senior Subordinated Indebtedness of the Company and the relevant
Subsidiary Guarantor and trade payables, except for the impact
of the contractual subordination provided in the indenture which
may have the effect of causing the notes to receive less,
ratably, than other general unsecured creditors, including trade
payables, that are not subject to contractual subordination, and
except for statutory priorities
</FONT>

<P align="center"><FONT size="2">114
</FONT>

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<DIV align="left">
<FONT size="2">provided under the U.S.&nbsp;federal bankruptcy
code or other applicable bankruptcy, insolvency and other laws
dealing with creditors rights generally.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company and the Subsidiary Guarantors have
agreed in the Indenture that it and they will not Incur,
directly or indirectly, any Indebtedness that is contractually
subordinate or junior in right of payment to the Company&#146;s
Senior Indebtedness or the Senior Indebtedness of such
Subsidiary Guarantors, unless such Indebtedness is Senior
Subordinated Indebtedness of the Company or the Subsidiary
Guarantors, as applicable, or is expressly subordinated in right
of payment to Senior Subordinated Indebtedness of the Company or
the Subsidiary Guarantors, as applicable. The Indenture does not
treat unsecured Indebtedness as subordinated or junior to
Secured Indebtedness merely because it is unsecured, and it does
not treat Indebtedness secured by junior liens as subordinated
or junior merely because it is secured by junior liens.
</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">Payment of Notes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company is not permitted to pay principal of,
premium, if any, or interest on the Notes or make any deposit
pursuant to the provisions described under&#148;&nbsp;&#151;
Defeasance&#148; or &#147;&#151;&nbsp;Satisfaction and
Discharge&#148; below and may not purchase, redeem or otherwise
retire any Notes (collectively, &#147;pay the Notes&#148;) if
either of the following occurs (a &#147;Payment Default&#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;any Designated Senior Indebtedness of
    the Company is not paid in full in cash when due;&nbsp;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 other default on Designated Senior
    Indebtedness of the Company occurs and the maturity of such
    Designated Senior Indebtedness is accelerated in accordance with
    its terms;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">unless, in either case, the Payment Default has
been cured or waived and any such acceleration has been
rescinded or such Designated Senior Indebtedness has been paid
in full in cash. Regardless of the foregoing, the Company is
permitted to pay the Notes if it and the Trustee receive written
notice approving such payment from the Representatives of all
Designated Senior Indebtedness with respect to which the Payment
Default has occurred and is continuing.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During the continuance of any default, other than
a Payment Default, with respect to any Designated Senior
Indebtedness of the Company pursuant to which the maturity
thereof may be accelerated without further notice, except such
notice as may be required to effect such acceleration, or the
expiration of any applicable grace periods, the Company is not
permitted to pay the Notes for a period (a &#147;Payment
Blockage Period&#148;) commencing upon the receipt by the
Trustee, with a copy to us, of written notice (a &#147;Blockage
Notice&#148;) of such default from the Representative of such
Designated Senior Indebtedness specifying an election to effect
a Payment Blockage Period and ending 179&nbsp;days thereafter.
The Payment Blockage Period will end earlier if such Payment
Blockage Period is terminated:
</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;by written notice to the Trustee and us
    from the Person or Persons who gave such Blockage Notice;
    </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;because the default giving rise to such
    Blockage Notice is cured, waived or otherwise no longer
    continuing;&nbsp;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;because such Designated Senior
    Indebtedness has been discharged or repaid in full in cash.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notwithstanding the provisions described above,
unless the holders of such Designated Senior Indebtedness or the
Representative of such Designated Senior Indebtedness have
accelerated the maturity of such Designated Senior Indebtedness,
the Company is permitted to resume paying the Notes after the
end of such Payment Blockage Period. The Notes shall not be
subject to more than one Payment Blockage Period in any
consecutive 360-day period irrespective of the number of
defaults with respect to Designated Senior Indebtedness of the
Company during such period, except that if any Blockage Notice
is delivered to the Trustee by or on behalf of holders of
Designated Senior Indebtedness of the Company (other than
holders of the Bank Indebtedness), a Representative of holders
of Bank Indebtedness may give another Blockage Notice within
such period. However, in no event may the total number of days
during which any Payment Blockage Period or Periods is in effect
exceed 179&nbsp;days in the aggregate during
</FONT>

<P align="center"><FONT size="2">115
</FONT>

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<DIV align="left">
<FONT size="2">any 360 consecutive day period, and there must be
181&nbsp;days during any 360-day consecutive period during which
no Payment Blockage Period is in effect.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon any payment or distribution of the assets of
the Company upon a total or partial liquidation or dissolution
or reorganization of or similar proceeding relating to the
Company or its property:
</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 holders of Senior Indebtedness of
    the Company will be entitled to receive payment in full in cash
    of such Senior Indebtedness before the holders of the Notes are
    entitled to receive any payment;
    </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;until the Senior Indebtedness of the
    Company is paid in full in cash, any payment or distribution to
    which holders of the Notes would be entitled but for the
    subordination provisions of the Indenture will be made to
    holders of such Senior Indebtedness as their interests may
    appear, except that holders of Notes may receive certain Capital
    Stock and subordinated debt obligations;&nbsp;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;if a distribution is made to holders of
    the Notes that, due to the subordination provisions, should not
    have been made to them, such holders of the Notes are required
    to hold it in trust for the holders of Senior Indebtedness of
    the Company and pay it over to them as their interests may
    appear.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If payment of the Notes is accelerated because of
an Event of Default, the Company or the Trustee must promptly
notify the holders of Designated Senior Indebtedness of the
Company or the Representative of such Designated Senior
Indebtedness of the acceleration. If any Designated Senior
Indebtedness of the Company is outstanding, neither the Company,
nor any Subsidiary Guarantor may pay the Notes until five
Business Days after the Representatives of all the issues of
such Designated Senior Indebtedness receive notice of such
acceleration and, thereafter, may pay the Notes only if the
Indenture otherwise permits payment at that time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A Subsidiary Guarantor&#146;s obligations under
its Subsidiary Guaranty are senior subordinated obligations. As
such, the rights of holders of Notes to receive payment by a
Subsidiary Guarantor pursuant to its Subsidiary Guaranty will be
subordinated in right of payment to the rights of holders of
Senior Indebtedness of such Subsidiary Guarantor. The terms of
the subordination provisions described above with respect to the
Company&#146;s obligations under the Notes apply equally to a
Subsidiary Guarantor and the obligations of such Subsidiary
Guarantor under its Subsidiary Guaranty.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">By reason of the subordination provisions
contained in the Indenture, in the event of a liquidation or
insolvency proceeding, creditors of the Company or a Subsidiary
Guarantor who are holders of Senior Indebtedness of the Company
or a Subsidiary Guarantor, as the case may be, may recover more,
ratably, than the holders of the Notes, and creditors of the
Company&#146;s who are not holders of Senior Indebtedness may
recover less, ratably, than holders of the Company&#146;s Senior
Indebtedness and may recover more, ratably, than the holders of
the Notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The terms of the subordination provisions
described above will not apply to payments from money or the
proceeds of U.S.&nbsp;Government Obligations held in trust by
the Trustee for the payment of principal of and interest on the
Notes pursuant to the provisions described under
&#147;&#151;&nbsp;Defeasance&#148; or
&#147;&#151;&nbsp;Satisfaction and Discharge.&#148;
</FONT>

<P align="left">
<B><FONT size="2">Methods of Receiving Payments on the
Notes</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a holder of Notes has given wire transfer
instructions to the Company, the Company will pay all principal,
interest and premium, if any, on that holder&#146;s Notes in
accordance with those instructions. All other payments on the
Notes will be made at the office or agency of the paying agent
and registrar within the City and State of New York unless the
Company elects to make interest payments by check mailed to the
holders of Notes at their address set forth in the register of
holders.
</FONT>

<P align="left">
<B><FONT size="2">Change of Control</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon the occurrence of any of the following
events (each a &#147;Change of Control&#148;), each Holder shall
have the right to require that the Company repurchase such
Holder&#146;s Notes at a purchase price in cash
</FONT>

<P align="center"><FONT size="2">116
</FONT>

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<DIV align="left">
<FONT size="2">equal to 101% of the principal amount thereof on
the date of purchase, plus accrued and unpaid interest, if any,
to the date of purchase (subject to the right of holders of
record on the relevant record date to receive interest due on
the relevant interest payment date):
</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;any &#147;person&#148; (as such term is
    used in Sections&nbsp;13(d) and 14(d) of the Exchange Act),
    other than one or more 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 for purposes of this
    clause&nbsp;(1) such person shall be deemed to have
    &#147;beneficial ownership&#148; of all shares that any such
    person has the right to acquire, whether such right is
    exercisable immediately or only after the passage of time),
    directly or indirectly, of more than 50% of the total voting
    power of the Voting Stock of the Company; provided, however,
    that the Permitted Holders beneficially own (as defined in
    Rules&nbsp;13d-3 and 13d-5 under the Exchange Act), directly or
    indirectly, in the aggregate a lesser percentage of the total
    voting power of the Voting Stock of the Company than such other
    person and do not have the right or ability by voting power,
    contract or otherwise to elect or designate for election a
    majority of the Board of Directors of the Company (for purposes
    of this clause&nbsp;(1), such other person shall be deemed to
    beneficially own any Voting Stock of a Person (the
    &#147;specified person&#148;) held by any other Person (the
    &#147;parent entity&#148;), if such other person is the
    beneficial owner (as first defined in this clause&nbsp;(1)),
    directly or indirectly, of more than 50% of the voting power of
    the Voting Stock of such parent entity and the Permitted Holders
    beneficially own (as defined in Rules&nbsp;13d-3 and 13d-5 under
    the Exchange Act), directly or indirectly, in the aggregate a
    lesser percentage of the voting power of the Voting Stock of
    such parent entity and do not have the right or ability by
    voting power, contract or otherwise to elect or designate for
    election a majority of the board of directors of such parent
    entity);
    </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;individuals who on the Issue Date
    constituted the Board of Directors of the Company (together with
    any new directors whose election by such Board of Directors of
    the Company or whose nomination for election by the stockholders
    of the Company was approved by a vote of 66&nbsp;2/3% of the
    directors of the Company then still in office who were either
    directors on the Issue Date or whose election or nomination for
    election was previously so approved or whose election was
    approved by the Permitted Holders) cease for any reason to
    constitute a majority of the Board of Directors of the Company
    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 failure at any time by the Company
    to beneficially own (as defined in Rules&nbsp;13d-3 and 13d-5
    under the Exchange Act), directly or indirectly, 100% of the
    Voting Stock of Buffets (except to the extent Buffets is merged
    with and into the Company in accordance with the terms of the
    indenture);&nbsp;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;the merger or consolidation of the
    Company with or into another Person or the merger of another
    Person with or into the Company, or the sale of all or
    substantially all the assets of the Company (determined on a
    consolidated basis) to another Person (other than, in all such
    cases, a Person that is controlled by the Permitted Holders),
    other than a transaction following which (A)&nbsp;in the case of
    a merger or consolidation transaction, holders of securities
    that represented 100% of the Voting Stock of the Company
    immediately prior to such transaction (or other securities into
    which such securities are converted as part of such merger or
    consolidation transaction) own directly or indirectly at least a
    majority of the voting power of the Voting Stock of the
    surviving Person in such merger or consolidation transaction
    immediately after such transaction and (B)&nbsp;in the case of a
    sale of assets transaction, the transferee Person becomes the
    obligor in respect of the Notes and a Subsidiary of the
    transferor of such assets; provided, however, that it shall not
    constitute a Change of Control under this clause&nbsp;(4) if,
    after giving effect to such transaction, the Permitted Holders
    beneficially own (as defined in clause&nbsp;(1) above) 35% or
    more of the total voting power of the Voting Stock of the
    surviving Person in such transaction immediately after such
    transaction.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to exercise this repurchase right, a
Holder must separate its IDSs into the shares of common stock
and Notes represented thereby.
</FONT>

<P align="center"><FONT size="2">117
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Within 30&nbsp;days following any Change of
Control, the Company will mail or otherwise deliver a notice to
each Holder with a copy to the Trustee (the &#147;Change of
Control Offer&#148;) stating:
</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;that a Change of Control has occurred
    and that such Holder has the right to require us to purchase
    such Holder&#146;s Notes at a purchase price in cash equal to
    101% of the principal amount thereof on the date of purchase,
    plus accrued and unpaid interest, if any, or premium, if any, to
    the date of purchase (subject to the right of Holders of record
    on the relevant record date to receive interest on the relevant
    interest payment 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;the circumstances and relevant facts
    regarding such Change of Control;
    </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 purchase date (which will be no
    earlier than 30&nbsp;days and no later than 60&nbsp;days from
    the date such notice is mailed);&nbsp;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 instructions, as determined by us,
    consistent with the covenant described hereunder, that a Holder
    must follow in order to have its Notes purchased.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company will not be required to make a Change
of Control Offer following 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 set forth 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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company will comply, to the extent
applicable, with the requirements of Section&nbsp;14(e) of the
Exchange Act and any other securities laws or regulations in
connection with the repurchase of Notes as a result of a Change
of Control. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of the covenant
described hereunder, the Company will comply with the applicable
securities laws and regulations and shall not be deemed to have
breached its obligations under the covenant described hereunder
by virtue of its compliance with such securities laws or
regulations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Change of Control purchase feature of the
Notes may in certain circumstances make more difficult or
discourage a sale or takeover of the Company and, thus, the
removal of incumbent management. The Change of Control purchase
feature is a result of negotiations between the Company and the
underwriters. The Company does not have the present intention to
engage in a transaction involving a Change of Control, although
it is possible that it could decide to do so in the future.
Subject to the limitations discussed below, the Company could,
in the future, enter into certain transactions, including
acquisitions, refinancings or other recapitalizations, that
would not constitute a Change of Control under the Indenture,
but that could increase the amount of indebtedness outstanding
at such time or otherwise affect the Company&#146;s capital
structure or credit ratings. Restrictions on the Company&#146;s
ability to Incur additional Indebtedness are contained in the
covenants described under &#147;&#151;&nbsp;Certain
Covenants&nbsp;&#151; Limitation on Indebtedness.&#148; Such
restrictions can only be waived with the consent of the holders
of a majority in principal amount of the Notes then outstanding.
Except for the limitations contained in such covenants, however,
the Indenture will not contain any covenants or provisions that
may afford holders of the Notes protection in the event of a
highly leveraged transaction.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Credit Agreement will prohibit us from
purchasing any Notes and will also provide that the occurrence
of certain change of control events with respect to the Company
would constitute a default thereunder. In the event a Change of
Control occurs at a time when the Company is prohibited under
the terms of any Senior Indebtedness of the Company, including
the Credit Agreement, from purchasing Notes, the Company may
seek the consent of its lenders to the purchase of Notes or may
attempt to refinance the borrowings that contain such
prohibition. If the Company does not obtain such a consent or
repay such borrowings, it will remain prohibited from purchasing
Notes. In such case, the Company&#146;s failure to offer to
purchase Notes would constitute a Default under the Indenture,
which would, in turn, constitute a default under the Credit
Agreement and the indenture governing Buffets&#146; Senior Notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Future indebtedness that the Company may incur
may contain prohibitions on the occurrence of certain events
that would constitute a Change of Control or require the
repurchase of such indebtedness
</FONT>

<P align="center"><FONT size="2">118
</FONT>

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<DIV align="left">
<FONT size="2">upon a Change of Control. Moreover, the exercise
by the holders of their right to require the Company to
repurchase the Notes could cause a default under such
indebtedness, even if the Change of Control itself does not, due
to the financial effect of such repurchase on the Company.
Finally, the Company&#146;s ability to pay cash to the holders
of Notes following the occurrence of a Change of Control may be
limited by its then existing financial resources. There can be
no assurance that sufficient funds will be available when
necessary to make any required repurchases.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The provisions under the Indenture relative to
the Company&#146;s obligation to make an offer to repurchase the
Notes as a result of a Change of Control may be waived or
modified with the written consent of the holders of a majority
in principal amount of the Notes.
</FONT>

<P align="left">
<B><FONT size="2">Covenants Relating to IDSs</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Combination of Notes and common stock into
IDSs.</FONT></I><FONT size="2"> The Indenture will provide that
as long as any Notes are outstanding, any Holder of Notes and
shares of Class&nbsp;A common stock may, at any time and from
time to time, combine these securities to form IDSs unless the
IDSs have previously been automatically separated as a result of
the continuance of a payment default on the Notes for
90&nbsp;days, or the redemption or maturity of any Notes.
</FONT>

<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 covenants including, among
others, the following:
</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">Limitation on Indebtedness</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;The Company will not, and will not
permit any Restricted Subsidiary to, Incur, directly or
indirectly, any Indebtedness; provided, however, that the
Company and its Restricted Subsidiary will be entitled to Incur
Indebtedness if, on the date of such Incurrence after giving
effect thereto on a pro forma basis, no Default has occurred and
is continuing and, the Consolidated Coverage Ratio of the
Company exceeds 2.0 to 1.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;Notwithstanding the foregoing
paragraph&nbsp;(a), the Company and the Restricted Subsidiaries
will be entitled to Incur any or all of the following
Indebtedness:
</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 Incurred by the Company and
    its Restricted Subsidiaries pursuant to any Revolving Credit
    Facility; provided, however, that, immediately after giving
    effect to any such Incurrence, the aggregate principal amount of
    all Indebtedness Incurred under this clause&nbsp;(1) and then
    outstanding does not exceed the greater of
    (A)&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    and
    (B)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
    of the consolidated revenue of the Company and its Restricted
    Subsidiaries for the most recent four consecutive fiscal
    quarters for which internal financial statements are available
    prior to the date such Indebtedness was Incurred;
    </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 Incurred by the Company and
    its Restricted Subsidiaries pursuant to any Term
    Loan&nbsp;Facility; provided, however, that, after giving effect
    to any such Incurrence, the aggregate principal amount of all
    Indebtedness Incurred under this clause&nbsp;(2) and then
    outstanding does not exceed the greater of
    (A)&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    less the sum of all principal payments with respect to such
    Indebtedness pursuant to paragraph&nbsp;(a)(3)(A) of the
    covenant described under &#147;&#151;&nbsp;Limitation on Sales
    of Assets and Subsidiary Stock&#148; and
    (B)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
    of the consolidated revenue of the Company and its Restricted
    Subsidiaries for the most recent four consecutive fiscal
    quarters for which internal financial statements are available
    prior to the date such Indebtedness was Incurred;
    </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 owed to and held by the
    Company or a Restricted Subsidiary; provided, however, that
    (A)&nbsp;any subsequent issuance or transfer of any Capital
    Stock which results in any such Restricted Subsidiary ceasing to
    be a Restricted Subsidiary or any subsequent transfer of such
    Indebtedness (other than to the Company or a Restricted
    Subsidiary) shall be deemed, in each case, to constitute the
    Incurrence of such Indebtedness by the obligor thereon and
    (B)&nbsp;if the Company is
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">119
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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">the obligor on such Indebtedness owed to a
    Restricted Subsidiary, such Indebtedness is expressly
    subordinated to the prior payment in full in cash of all
    obligations with respect to 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;the Notes (other than any Additional
    Notes) and the related 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">(5)&nbsp;Indebtedness outstanding on the Issue
    Date (other than Indebtedness described in clause&nbsp;(1), (2),
    (3)&nbsp;or (4) of this 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">(6)&nbsp;Refinancing Indebtedness in respect of
    Indebtedness Incurred pursuant to paragraph&nbsp;(a)&nbsp;or
    pursuant to clause&nbsp;(4) or (5) or this clause&nbsp;(6);
    </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;Hedging Obligations of the Company or
    any Restricted Subsidiary entered into not for the purpose of
    speculation;
    </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;obligations in respect of one or more
    standby letters of credit, performance, bid and surety bonds,
    workers&#146; compensation claims, self-insurance claims,
    self-insurance obligations, bankers&#146; acceptances and
    completion guarantees provided by the Company or any Restricted
    Subsidiary 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">(9)&nbsp;Indebtedness arising from the honoring
    by a bank or other financial institution of a check, draft or
    similar instrument drawn against insufficient funds in the
    ordinary course of business; provided, however, that such
    Indebtedness is extinguished within three Business Days of its
    Incurrence;
    </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 (including Capital Lease
    Obligations) Incurred by the Company or any of its Restricted
    Subsidiaries to finance the purchase, lease, construction or
    improvement of property (real or personal) or equipment (whether
    through the direct purchase of assets or the Capital Stock of
    any Person owning such assets) within 180&nbsp;days after such
    purchase, lease or improvement in an aggregate principal amount
    which, when added together with the amount of Indebtedness
    previously Incurred pursuant to this clause&nbsp;(10) and then
    outstanding (including any Refinancing Indebtedness with respect
    thereto) does not exceed
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million;
    </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 attributable to Permitted
    Equipment Lease Financings in an aggregate principal amount
    which, when added together with the amount of Indebtedness
    Incurred pursuant to this clause&nbsp;(11) and then outstanding
    (including any Refinancing Indebtedness with respect thereto)
    does not exceed
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
    provided, however, that the Net Available Cash from such
    Permitted Equipment Lease Financings is applied to reduce
    Indebtedness as required by the covenant described under
    &#147;&#151;&nbsp;Limitation on Sales of Assets and Subsidiary
    Stock&#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">(12)&nbsp;the Guarantee or co-issuance of any
    Indebtedness otherwise permitted to be Incurred pursuant to 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">(13)&nbsp;Indebtedness of the Company or any
    Restricted Subsidiary consisting of indemnification, adjustment
    of purchase price, earn-out or similar obligations, in each case
    incurred in connection with the acquisition or disposition of
    any assets, including shares of Capital Stock or divisions or
    lines of business, of 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">(14)&nbsp;Acquired Indebtedness, and any
    Refinancing Indebtedness thereof, which is in the aggregate
    amount not to exceed
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    at any time 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">(15)&nbsp;Indebtedness represented by the
    issuance of Additional Notes and the related Guarantees in
    connection with the issuance of shares of common stock of the
    Company provided that the ratio of the aggregate principal
    amount of such Additional Notes to the number of such additional
    shares shall not exceed the equivalent ratio with respect to the
    IDSs outstanding prior to such issuance, and, in each case, the
    related 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">(16)&nbsp;Indebtedness represented by the
    issuance of Additional Notes in connection with the exchange of
    Class&nbsp;B common stock outstanding on the Issue Date for IDSs
    as described under &#147;Related Party Transactions in
    Connection with this Offering&nbsp;&#151; Recapitalization&#148;
    and &#147;Related Party
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">120
</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">Transactions in Connection with this
    Offering&nbsp;&#151; Investor Rights Agreement,&#148; provided
    that at the time of such exchange all Exchange Conditions have
    been satisfied;&nbsp;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">(17)&nbsp;Indebtedness of the Company and its
    Restricted Subsidiaries in an aggregate principal amount which,
    when taken together with all other Indebtedness of the Company
    and its Restricted Subsidiaries outstanding on the date of such
    Incurrence (other than Indebtedness permitted by
    clauses&nbsp;(1) through (16)&nbsp;above or paragraph&nbsp;(a))
    does not exceed $ million.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;Notwithstanding the foregoing, neither
the Company nor any Subsidiary Guarantor will incur any
Indebtedness pursuant to the foregoing paragraph&nbsp;(b) if the
proceeds thereof are used, directly or indirectly, to Refinance
any Subordinated Obligations of the Company or any Subsidiary
Guarantor unless such Indebtedness shall be subordinated to the
Notes or the applicable Subsidiary Guaranty to at least the same
extent as such Subordinated Obligations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(d)&nbsp;For purposes of determining compliance
with this covenant, (1)&nbsp;in the event that an item of
Indebtedness meets the criteria of more than one of the types of
Indebtedness described above, the Company, in its sole
discretion, will classify such item of Indebtedness at the time
of Incurrence and only be required to include the amount and
type of such Indebtedness in one of the above clauses and
(2)&nbsp;the Company will be entitled to divide and classify an
item of Indebtedness in more than one of the types of
Indebtedness described above. In addition, from time to time the
Company may reclassify any Indebtedness Incurred pursuant to
this covenant such that it will be deemed as having been
Incurred under paragraph&nbsp;(a) or another clause in
paragraph&nbsp;(b), so long as such Indebtedness could have been
Incurred under paragraph&nbsp;(a) or such new clause had
paragraph&nbsp;(a) or such clause been available to the Company
at the time of the original Incurrence of such Indebtedness.
Indebtedness under the Revolving Credit Facility under the
Credit Agreement outstanding on the Issue Date shall be deemed
to have been Incurred on the Issue Date in reliance on
clause&nbsp;(1) in paragraph&nbsp;(b) above. Indebtedness under
the Term Loan&nbsp;Facility under the Credit Agreement
outstanding on the Issue Date shall be deemed to have been
Incurred on the Issue Date in reliance on clause&nbsp;(2) in
paragraph&nbsp;(b) above.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(e)&nbsp;Notwithstanding paragraphs&nbsp;(a) and
(b) above, neither the Company nor any Subsidiary Guarantor will
Incur (1)&nbsp;any Indebtedness if such Indebtedness is
subordinate or junior in right of payment to any Senior
Indebtedness of the Company or such Subsidiary Guarantor, as
applicable, unless such Indebtedness is Senior Subordinated
Indebtedness or is expressly subordinated in right of payment to
Senior Subordinated Indebtedness of the Company or such
Subsidiary Guarantor, as applicable, or (2)&nbsp;any Secured
Indebtedness that is not Senior Indebtedness of such Person
unless contemporaneously therewith such Person makes effective
provision to secure the Notes or the relevant Subsidiary
Guaranty, as applicable, senior to or equally and ratably with
such Secured Indebtedness for so long as such Secured
Indebtedness is secured by a Lien.
</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">Limitation on Restricted
    Payments</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;The Company will not, and will not
permit any Restricted Subsidiary, directly or indirectly, to
make a Restricted Payment if at the time the Company or such
Restricted Subsidiary makes such Restricted Payment:
</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;a Default shall have occurred and be
    continuing (or would result therefrom);
    </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 Dividend Suspension Period shall have
    occurred and be continuing;&nbsp;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 aggregate amount of such Restricted
    Payment and all other Restricted Payments since the Issue Date
    would exceed the sum of (without duplication):
    </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;100% of the Excess Cash of the Company
    for the period (taken as one accounting period) from the fiscal
    quarter that first begins after the Issue Date to the end of the
    Company&#146;s most recently ended fiscal quarter for which
    internal financial statements are available at the time of such
    Restricted Payment; plus
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">121
</FONT>

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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">(B)&nbsp;100% of the aggregate Net Cash Proceeds
    received by the Company from the issuance or sale of its Capital
    Stock (other than Disqualified Stock) subsequent to the Issue
    Date (other than an issuance or sale to a Subsidiary of the
    Company and other than an issuance or sale to an employee stock
    ownership plan or to a trust established by the Company or any
    of its Subsidiaries for the benefit of their employees), 100% of
    any cash capital contribution received by the Company from its
    stockholders subsequent to the Issue Date and 100% of the fair
    market value (as determined in good faith by resolution of the
    Board of Directors of the Company) of property (other than cash
    that would constitute Temporary Cash Investments) of a Related
    Business received by the Company or a Restricted Subsidiary
    subsequent to the Issue Date as a contribution to its common
    equity capital or from the issuance and sale of its Capital
    Stock (other than from a Subsidiary or that was financed with
    loans from the Company or any of its Restricted Subsidiaries);
    plus
    </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 amount by which Indebtedness of the
    Company or a Restricted Subsidiary is reduced on the
    Company&#146;s consolidated balance sheet upon the conversion or
    exchange (other than by a Subsidiary of the Company) subsequent
    to the Issue Date of any Indebtedness of the Company or a
    Restricted Subsidiary convertible or exchangeable for Capital
    Stock (other than Disqualified Stock) of the Company (less the
    amount of any cash, or the fair value of any other property,
    distributed by the Company upon such conversion or exchange);
    plus
    </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;an amount equal to the sum of
    (x)&nbsp;the net reduction in the Investments (other than
    Permitted Investments) made by the Company or any Restricted
    Subsidiary in any Person resulting from repurchases, repayments
    or redemptions of such Investments by such Person, proceeds
    realized on the sale of such Investment and proceeds
    representing the return of capital (excluding dividends and
    distributions), in each case received by the Company or any
    Restricted Subsidiary, and (y)&nbsp;to the extent such Person is
    an Unrestricted Subsidiary, the portion (proportionate to the
    Company&#146;s equity interest in such Subsidiary) of the fair
    market value of the net assets of such Unrestricted Subsidiary
    at the time such Unrestricted Subsidiary is designated a
    Restricted Subsidiary; provided, however, that the foregoing sum
    shall not exceed, in the case of any such Person or Unrestricted
    Subsidiary, the amount of Investments (excluding Permitted
    Investments) previously made (and treated as a Restricted
    Payment) by the Company or any Restricted Subsidiary in such
    Person or Unrestricted Subsidiary.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;The preceding provisions will not
prohibit:
</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 Restricted Payment made out of the
    Net Cash Proceeds of the substantially concurrent sale of, or
    made by exchange for, Capital Stock of the Company (other than
    Disqualified Stock and other than Capital Stock issued or sold
    to a Subsidiary of the Company or an employee stock ownership
    plan or to a trust established by the Company or any of its
    Subsidiaries for the benefit of their employees) or a
    substantially concurrent cash capital contribution received by
    the Company from its stockholders; provided, however, that
    (A)&nbsp;such Restricted Payment shall be excluded in the
    calculation of the amount of Restricted Payments and
    (B)&nbsp;the Net Cash Proceeds from such sale or such cash
    capital contribution (to the extent so used for such Restricted
    Payment) shall be excluded from the calculation of amounts under
    clause&nbsp;(3)(B) of paragraph&nbsp;(a) above;
    </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 purchase, repurchase, redemption,
    defeasance, satisfaction and discharge or other acquisition or
    retirement for value of Subordinated Obligations of the Company,
    the Issuer or any Subsidiary Guarantor made by exchange for, or
    out of the proceeds of the substantially concurrent sale of,
    Indebtedness which is permitted to be Incurred pursuant to the
    covenant described under &#147;&#151;&nbsp;Limitation on
    Indebtedness&#148;; provided, however, that such purchase,
    repurchase, redemption, defeasance or other acquisition or
    retirement for value shall be excluded in the calculation of the
    amount of Restricted Payments;
    </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;dividends paid within 60&nbsp;days after
    the date of declaration thereof if at such date of declaration
    such dividend would have complied with this covenant; provided,
    however, that such dividend shall be included in the calculation
    of the amount of Restricted Payments;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">122
</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">(4)&nbsp;so long as no Default has occurred and
    is continuing, the repurchase or other acquisition of shares of
    Capital Stock of the Company or any of its Subsidiaries from
    employees, former employees, directors or former directors of
    the Company or any of its Subsidiaries (or permitted transferees
    of such employees, former employees, directors or former
    directors), pursuant to the terms of the agreements (including
    employment, severance, compensation or shareholder agreements)
    or plans (or amendments thereto) approved by the Board of
    Directors of the Company under which such individuals purchase
    or sell or are granted the option to purchase or sell, shares of
    such Capital Stock; provided, however, that the aggregate amount
    of such repurchases and other acquisitions shall not exceed in
    any calendar year the sum of
    (A)&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    plus (B)&nbsp;the aggregate Net Cash Proceeds received by the
    Company from the issuance of such Capital Stock to, or the
    exercise of options to purchase such Capital Stock by, employees
    or directors of the Company or any of its Subsidiaries that
    occurs after the Issue Date (to the extent the Net Cash Proceeds
    from the sale of such Capital Stock have not otherwise been
    applied to the payment of Restricted Payments by virtue of
    clause&nbsp;(3)(B) of paragraph&nbsp;(a) above or applied
    pursuant to clause&nbsp;(b)(1) above) plus (C)&nbsp;the Net Cash
    Proceeds actually received by the Company after the Issue Date
    from insurance proceeds paid in respect of the death or
    disability of any employee or director; provided further,
    however, that such repurchases and other acquisitions shall be
    excluded in the calculation of the amount of Restricted Payments;
    </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;the exchange of Class&nbsp;B common
    stock of the Company outstanding on the Issue Date for IDSs,
    provided, however, that at the time of such exchange all
    Exchange Conditions are satisfied; provided further, however,
    that such repurchases and other acquisitions shall be excluded
    in the calculation of the amount of Restricted Payments;
    </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;Payments of intercompany subordinated
    debt, the incurrence of which was permitted under
    clause&nbsp;(3) of paragraph&nbsp;(b) of the covenant described
    under &#147;&#151;&nbsp;Limitation on Indebtedness&#148;;
    provided, however, that no Default or Event of Default has
    occurred and is continuing or would otherwise result therefrom;
    provided further, however, that such payments shall be excluded
    in the calculation of the amount of Restricted Payments;&nbsp;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;Restricted Payments not exceeding
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    in the aggregate; provided, however, that (A)&nbsp;at the time
    of such Restricted Payments, no Default shall have occurred and
    be continuing (or result therefrom) and (B)&nbsp;such Restricted
    Payments shall be excluded in the calculation of the amount of
    Restricted Payments.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For purposes of determining compliance with this
covenant, in the event that a proposed Restricted Payment meets
the criteria of more than one of the categories of Restricted
Payments described in clauses&nbsp;(1) through (7) in
paragraph&nbsp;(b) above, or is entitled to be incurred pursuant
to paragraph&nbsp;(a) above, the Issuer will be entitled to
classify such item of Restricted Payment on the date of its
payment in any manner that complies with this covenant.
</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">Limitation on Restrictions on Distributions
    from Restricted Subsidiaries</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or permit to
exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary to
(a)&nbsp;pay dividends or make any other distributions on its
Capital Stock to the Company or a Restricted Subsidiary or pay
any Indebtedness owed to the Company or a Subsidiary Guarantor,
(b)&nbsp;make any loans or advances to the Company or
(c)&nbsp;transfer any of its property or assets to the Company,
except:
</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;with respect to clauses&nbsp;(a), (b)
    and (c),
    </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">(i)&nbsp;any encumbrance or restriction pursuant
    to an agreement in effect at or entered into on the Issue Date,
    including the Credit Agreement and the indenture governing
    Buffets&#146; Senior 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">(ii)&nbsp;any encumbrance or restriction with
    respect to a Restricted Subsidiary pursuant to an agreement
    relating to any Indebtedness (including Acquired Indebtedness)
    Incurred by such
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">123
</FONT>

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<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">
    <FONT size="2">Restricted Subsidiary on or prior to the date on
    which such Restricted Subsidiary was acquired by the Company
    (other than Indebtedness Incurred as consideration in, or to
    provide all or any portion of the funds or credit support
    utilized to consummate, the transaction or series of related
    transactions pursuant to which such Restricted Subsidiary became
    a Restricted Subsidiary or was acquired by the Company) and
    outstanding on such 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">(iii)&nbsp;any encumbrance or restriction
    pursuant to an agreement effecting a Refinancing of Indebtedness
    Incurred pursuant to an agreement referred to in clause&nbsp;(i)
    or (ii)&nbsp;of clause&nbsp;(1) of this covenant or this
    clause&nbsp;(iii) or contained in any amendment to an agreement
    referred to in clause&nbsp;(i) or (ii)&nbsp;of clause&nbsp;(1)
    of this covenant or this clause&nbsp;(iii); provided, however,
    that the encumbrances and restrictions with respect to such
    Restricted Subsidiary contained in any such refinancing
    agreement or amendment are no less favorable to Noteholders than
    encumbrances and restrictions with respect to such Restricted
    Subsidiary contained in such predecessor agreements;
    </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">(iv)&nbsp;any encumbrance or restriction
    consisting of any restriction on the sale or other disposition
    of assets or property securing Indebtedness as a result of a
    Lien permitted to be Incurred under the Indenture on such asset
    or property;
    </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">(v)&nbsp;any encumbrance or restriction with
    respect to a Restricted Subsidiary imposed pursuant to an
    agreement entered into for the sale or disposition of all or a
    portion of the Capital Stock or assets of such Restricted
    Subsidiary pending the closing of such sale or 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">(vi)&nbsp;any restriction arising under
    applicable law, regulation or order;
    </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">(vii)&nbsp;any restriction on cash or other
    deposits or net worth imposed by suppliers or landlords under
    contracts entered into in the ordinary course of business; 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">(viii)&nbsp;any restriction in any agreement that
    is not materially more restrictive than the restrictions under
    the terms of the Credit Agreement and the indenture governing
    Buffets&#146; Senior Notes as in effect on the Issue Date;
    </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">(2)&nbsp;with respect to clause&nbsp;(c) only,
    </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">(i)&nbsp;any such encumbrance or restriction
    consisting of customary nonassignment provisions in leases
    governing leasehold interests to the extent such provisions
    restrict the transfer of the lease or the property leased
    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">(ii)&nbsp;restrictions contained in security
    agreements or mortgages securing Indebtedness of a Restricted
    Subsidiary to the extent such restrictions restrict the transfer
    of the property subject to such security agreements or
    mortgages;&nbsp;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">(iii)&nbsp;provisions with respect to the
    disposition or distribution of assets or property in joint
    venture agreements, asset sale agreements, stock sale agreements
    and other similar agreements entered into in the ordinary course
    of business.
    </FONT></TD>
</TR>

</TABLE>

<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">Limitation on Sales of Assets and
    Subsidiary Stock</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly,
consummate any Asset Disposition 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;the Company or such Restricted
    Subsidiary receives consideration at the time of such Asset
    Disposition at least equal to the fair market value (including
    as to the value of all non-cash consideration), as determined in
    good faith by the Board of Directors of the Company, of the
    shares and assets subject to such Asset 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">(2)&nbsp;at least 75% of the consideration
    thereof received by the Company or such Restricted Subsidiary is
    in the form of cash or cash equivalents (provided that such 75%
    requirement shall not apply to (i)&nbsp;the sale of the business
    (whether through a sale of stock or assets) conducted by Tahoe
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">124
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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">Joe&#146;s, Inc. and (ii)&nbsp;any Asset
    Disposition in which the cash or cash equivalents portion of the
    consideration received therefor is no less than an amount equal
    to the product of
    (x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
    (y)&nbsp;the amount of EBITDA for the previously completed four
    fiscal quarters directly attributable to the assets or Capital
    Stock included in such Asset Disposition); and
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(3)&nbsp;an amount equal to 100% of the Net
Available Cash from such Asset Disposition is applied by the
Company (or such Restricted Subsidiary, as the case may be)
</FONT>
<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;first, to the extent the Company elects
    (or is required by the terms of any Indebtedness), to prepay,
    repay, redeem, defease, satisfy and discharge or purchase Senior
    Indebtedness of the Company or Indebtedness (other than any
    Disqualified Stock) of a Wholly Owned Subsidiary (in each case
    other than Indebtedness owed to the Company or an Affiliate of
    the Company) within one year from the later of the date of such
    Asset Disposition or the receipt of such Net Available 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">(B)&nbsp;second, to the extent of the balance of
    such Net Available Cash after application in accordance with
    clause&nbsp;(A), to the extent the Company elects, to acquire
    Additional Assets within one year from the later of the date of
    such Asset Disposition or the receipt of such Net Available 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">(C)&nbsp;third, to the extent of the balance of
    such Net Available Cash after application in accordance with
    clauses&nbsp;(A) and (B), to make an offer to the holders of the
    Notes (and to holders of other Senior Subordinated Indebtedness
    of the Company designated by the Company) to purchase Notes (and
    such other Senior Subordinated Indebtedness of the Company)
    pursuant to and subject to the conditions contained in 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">(D)&nbsp;fourth, to the extent of the balance of
    such Net Available Cash after application in accordance with
    clauses&nbsp;(A), (B) and (C), for any purpose not prohibited by
    the terms of the Indenture;
    </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">
    <FONT size="2">provided, however, that in connection with any
    prepayment, repayment or purchase of Indebtedness pursuant to
    clause&nbsp;(A) or (C) above, the Company or such Restricted
    Subsidiary shall permanently retire such Indebtedness and shall
    cause the related loan commitment (if any) to be permanently
    reduced in an amount equal to the principal amount so prepaid,
    repaid or purchased.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notwithstanding the foregoing provisions of this
covenant, the Company and the Restricted Subsidiaries will not
be required to apply any Net Available Cash in accordance with
this covenant except to the extent that the aggregate Net
Available Cash from all Asset Dispositions which are not applied
in accordance with this covenant exceeds
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.
In addition, any Net Available Cash received in respect of
Permitted Equipment Lease Financings Incurred pursuant to
clause&nbsp;(b)(11) of the covenant described under
&#147;&#151;&nbsp;Limitation on Indebtedness&#148; may not be
applied pursuant to clause&nbsp;(3)(B) above. Pending
application of Net Available Cash pursuant to this covenant,
such Net Available Cash may be invested in Temporary Cash
Investments or applied to temporarily reduce Senior Indebtedness
of the Company or Indebtedness of any Wholly Owned Subsidiary.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the purposes of this covenant, the following
are deemed to be cash or cash equivalents:
</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 assumption of Indebtedness of the
    Company or any Restricted Subsidiary and the release of the
    Company or such Restricted Subsidiary from all liability on such
    Indebtedness in connection with such Asset 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">(2)&nbsp;any Additional Assets (so long as such
    Additional Assets are acquired for fair market value, as
    determined in good faith by the Board of Directors of the
    Company, in connection with the transaction giving rise to such
    Asset Disposition), which Additional Assets shall be deemed to
    have been acquired pursuant to clause&nbsp;(B) of the preceding
    paragraph in connection with such Asset Disposition; 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">(3)&nbsp;securities received by the Company or
    any Restricted Subsidiary from the transferee that are converted
    by the Company or such Restricted Subsidiary into cash or cash
    equivalents within 90&nbsp;days of receipt thereof.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;In the event of an Asset Disposition
that requires the purchase of Notes (and other Senior
Subordinated Indebtedness of the Company) pursuant to
clause&nbsp;(a)(3)(C) above, the Company will purchase Notes
tendered pursuant to an offer by the Company for the Notes (and
such other Senior Subordinated Indebtedness) at a purchase price
of 100% of their principal amount (or, in the event such other
Senior Subordinated Indebtedness of the Company was issued with
significant original issue discount, 100% of the accreted value
thereof), without premium, plus accrued but unpaid interest (or,
in respect of such other Senior Subordinated Indebtedness of the
Company, such lesser price, if any, as may be provided for by
the terms of such Senior Subordinated Indebtedness) in
accordance with the procedures (including prorating in the event
of oversubscription) set forth in the Indenture. If the
aggregate purchase price of the Notes tendered exceeds the Net
Available Cash allotted to their purchase, the Company will
select the Notes to be purchased on a pro rata basis but in
round denominations, which in the case of the Notes will be
denominations of $1,000 principal amount or multiples thereof.
The Company shall not be required to make such an offer to
purchase Notes (and other Senior Subordinated Indebtedness of
the Company) pursuant to this covenant if the Net Available Cash
available therefor is less than
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
(which lesser amount shall be carried forward for purposes of
determining whether such an offer is required with respect to
the Net Available Cash from any subsequent Asset Disposition).
In order to accept an Asset Sale Offer, a Holder must separate
its IDSs into the shares of common stock and Notes represented
thereby.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(c)&nbsp;The Company will comply, to the extent
applicable, with the requirements of Section&nbsp;14(e) of the
Exchange Act and any other securities laws or regulations in
connection with the repurchase of Notes pursuant to this
covenant. To the extent that the provisions of any securities
laws or regulations conflict with provisions of this covenant,
the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its
obligations under this clause by virtue of its compliance with
such securities laws or 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></TD>
    <TD>
    <B><I><FONT size="2">Limitation on Affiliate
    Transactions</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;The Company will not, and will not
permit any Restricted Subsidiary to, enter into or permit to
exist any transaction (including the purchase, sale, lease or
exchange of any property, employee compensation arrangements or
the rendering of any service) with, or for the benefit of, any
Affiliate of the Company (each of the foregoing, an
&#147;Affiliate Transaction&#148;) 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;the terms of the Affiliate Transaction
    are no less favorable to the Company or such Restricted
    Subsidiary than those that could be obtained at the time of the
    Affiliate Transaction in arm&#146;s-length dealings with a
    Person who is not an Affiliate;
    </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;if such Affiliate Transaction involves
    an amount in excess of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
    the material terms of the Affiliate Transaction are set forth in
    writing and a majority of the directors of the Company
    disinterested with respect to such Affiliate Transaction have
    determined in good faith that the criteria set forth in
    clause&nbsp;(1) are satisfied and have approved the relevant
    Affiliate Transaction as evidenced by a Board resolution; 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;if such Affiliate Transaction involves
    an amount in excess of $ million, the Board of Directors of the
    Company shall also have received a written opinion from an
    Independent Qualified Party to the effect that the financial
    terms of such Affiliate Transaction are fair, from a financial
    standpoint, to the Company and its Restricted Subsidiaries or
    not less favorable to the Company and its Restricted
    Subsidiaries than could reasonably be expected to be obtained at
    the time in an arm&#146;s-length transaction with a Person who
    was not an Affiliate.
    </FONT></TD>
</TR>

</TABLE>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;The provisions of the preceding
paragraph&nbsp;(a) will not prohibit:
</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 Investment (other than a Permitted
    Investment) or other Restricted Payment, in each case permitted
    to be made pursuant to, or not prohibited by, the covenant
    described under &#147;&#151;&nbsp;Limitation on Restricted
    Payments&#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;any issuance of securities, or other
    payments, awards or grants in cash, securities or otherwise
    pursuant to, or the funding of, employment, compensation or
    severance arrangements, stock options and stock ownership plans
    approved by the Board of Directors 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;loans or advances to employees in the
    ordinary course of business in accordance with the past
    practices of the Company or its Restricted Subsidiaries or
    otherwise approved by the Board of Directors, but in any event
    not to exceed
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million in the
    aggregate outstanding at any one time;
    </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 payment of reasonable compensation
    or employee benefit arrangements to and indemnity provided for
    the benefit of directors, officers or employees of the Company
    or its Restricted Subsidiaries 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">(5)&nbsp;the payment of reasonable fees to
    directors of the Company and its Restricted Subsidiaries who are
    not employees of the Company or its 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">(6)&nbsp;any transaction with a Restricted
    Subsidiary or joint venture or similar entity which would
    constitute an Affiliate Transaction solely because the Company
    or a Restricted Subsidiary owns an equity interest in or
    otherwise controls such Restricted Subsidiary, joint venture or
    similar entity;
    </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;the entering into of a registration
    rights agreement with the securityholders 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">(8)&nbsp;the entering into and performance of the
    Investor Rights Agreement pursuant to its terms as in effect on
    the Issue Date; 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;the issuance or sale of any Capital
    Stock (other than Disqualified Stock) of the Company.
    </FONT></TD>
</TR>

</TABLE>

<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">Limitation on the Sale or Issuance of
    Capital Stock of Restricted Subsidiaries</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company:
</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;will not, and will not permit any
    Restricted Subsidiary to, sell, lease, transfer or otherwise
    dispose of any Capital Stock of any Restricted Subsidiary to any
    Person (other than the Company or a Wholly Owned
    Subsidiary),&nbsp;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;will not permit any Restricted
    Subsidiary to issue any of its Capital Stock (other than, if
    necessary, shares of its Capital Stock constituting
    directors&#146; or other legally required qualifying shares) to
    any Person (other than to the Company or a Wholly Owned
    Subsidiary),
    </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">
    <FONT size="2">unless
    </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;immediately after giving effect to such
    issuance, sale or other disposition, neither the Company nor any
    of its Subsidiaries own any Capital Stock 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">(B)&nbsp;immediately after giving effect to such
    issuance, sale or other disposition, such Restricted Subsidiary
    would no longer constitute a Restricted Subsidiary and any
    Investment in such Person remaining after giving effect thereto
    is treated as a new Investment by the Company and such
    Investment would be permitted to be made under the covenant
    described under &#147;&#151;&nbsp;Limitation on Restricted
    Payments&#148; if made on the date of such issuance, sale or
    other disposition.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notwithstanding the foregoing, the issuance or
sale of shares of Capital Stock of any Restricted Subsidiary of
the Company will not violate the provisions of the immediately
preceding sentence if such shares are issued or sold in
connection with (x)&nbsp;the formation or capitalization of a
Restricted Subsidiary or (y)&nbsp;a single transaction or a
series of substantially contemporaneous transactions whereby such
</FONT>

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<DIV align="left">
<FONT size="2">Restricted Subsidiary becomes a Restricted
Subsidiary of the Company by reason of the acquisition of
securities or assets from another Person.
</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">Merger and Consolidation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company will not consolidate with or merge
with or into, or convey, transfer or lease, in one transaction
or a series of transactions, directly or indirectly, all or
substantially all its assets to, any Person, 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;the resulting, surviving or transferee
    Person (the &#147;Successor Company&#148;) shall be a Person
    organized or existing under the laws of the United States of
    America, any State thereof or the District of Columbia and the
    Successor Company (if not the Company) shall expressly assume,
    by an indenture supplemental thereto, executed and delivered to
    the Trustee, in form reasonably satisfactory to the Trustee, all
    the obligations of the Company under the Notes and 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;immediately after giving pro forma
    effect to such transaction (and treating any Indebtedness which
    becomes an obligation of the Successor Company or any Subsidiary
    as a result of such transaction as having been Incurred by such
    Successor Company or such Subsidiary at the time of such
    transaction), no Default shall 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 pro forma
    effect to such transaction, (A)&nbsp;the Successor Company would
    be able to Incur an additional $1.00 of Indebtedness pursuant to
    paragraph&nbsp;(a)&nbsp;of the covenant described under
    &#147;&#151;&nbsp;Limitation on Indebtedness&#148; or
    (B)&nbsp;the Consolidated Coverage Ratio for the Company (or
    Successor Company, if applicable) and its Restricted
    Subsidiaries would be equal to or greater than such ratio for
    the Company and its Restricted Subsidiaries immediately prior to
    such transaction; 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 Company shall have delivered to the
    Trustee an officers&#146; certificate and an opinion of counsel,
    each stating that such consolidation, merger or transfer and
    such supplemental indenture (if any) comply with the Indenture;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">provided, however, that clause&nbsp;(3) will not
be applicable to (A)&nbsp;a Restricted Subsidiary consolidating
with, merging into or transferring all or part of its properties
and assets to the Company or any Restricted Subsidiary or
(B)&nbsp;the Company merging with an Affiliate of the Company
solely for the purpose and with the sole effect of
reincorporating the Company in another jurisdiction.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Successor Company will be the successor to
the Company and shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under the
Indenture, and the predecessor company, except in the case of a
lease, shall be released from the obligation to pay the
principal of and interest on the Notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company will not permit any Subsidiary
Guarantor to consolidate with or merge with or into, or convey,
transfer or lease, in one transaction or a series of
transactions, all or substantially all of its assets to any
Person 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;except in the case of a Subsidiary
    Guarantor that has been disposed of in its entirety to another
    Person (other than to the Company or an Affiliate of the
    Company), whether through a merger, consolidation or sale of
    Capital Stock or assets, if in connection therewith the Company
    provides an officers&#146; certificate to the Trustee to the
    effect that the Company will comply with its obligations under
    the covenant described under &#147;&#151;&nbsp;Limitation on
    Sales of Assets and Subsidiary Stock&#148; in respect of such
    disposition, the resulting, surviving or transferee Person (if
    not such Subsidiary) shall be a Person organized and existing
    under the laws of the jurisdiction under which such Subsidiary
    was organized or existing or under the laws of the United States
    of America, or any State thereof or the District of Columbia,
    and such Person shall expressly assume, by a Guaranty Agreement,
    in a form reasonably satisfactory to the Trustee, all the
    obligations of such Subsidiary, if any, under its Subsidiary
    Guaranty;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">128
</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">(2)&nbsp;immediately after giving effect to such
    transaction or transactions on a pro forma basis (and treating
    any Indebtedness which becomes an obligation of the resulting,
    surviving or transferee Person as a result of such transaction
    as having been issued by such Person at the time of such
    transaction), no Default shall have occurred and be
    continuing;&nbsp;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;the Company delivers to the Trustee an
    officers&#146; certificate and an opinion of counsel, each
    stating that such consolidation, merger or transfer and such
    Guaranty Agreement, if any, complies with the Indenture.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notwithstanding the foregoing, any Subsidiary
Guarantor may consolidate with or merge with or into or convey,
transfer or lease, in one transaction or a series of
transactions, all or substantially all of its assets to the
Company.
</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">Future Guarantors</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Initially, all Restricted Subsidiaries of the
Company will Guarantee the Notes. The Company will cause each
future domestic Restricted Subsidiary that Incurs any
Indebtedness (other than Indebtedness permitted to be Incurred
pursuant to clause&nbsp;(3), (7), (8), (9), (10), (11)&nbsp;or
(13)&nbsp;of paragraph&nbsp;(b)&nbsp;of the covenant described
under &#147;&#151;&nbsp;Limitation on Indebtedness&#148;) to, at
the same time, execute and deliver to the Trustee a Guaranty
Agreement pursuant to which such Restricted Subsidiary will
Guarantee payment of the Notes on the same terms and conditions
as those set forth in the Indenture.
</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">SEC Reports</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Whether or not subject to the reporting
requirements of the Exchange Act, so long as any Notes are
outstanding, the Company will file with the SEC and, in any
event, provide the Trustee and Noteholders with such annual
reports and such information, documents and other reports as are
specified in Sections&nbsp;13 and 15(d) of the Exchange Act and
applicable to a U.S.&nbsp;corporation subject to such Sections,
such information, documents and other reports to be so filed and
provided at the times specified for the filings of such
information, documents and reports under such Sections.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event that (1)&nbsp;the rules and
regulations of the SEC permit the Company and any direct or
indirect parent company of the Company to report at such parent
entity&#146;s level on a consolidated basis, (2)&nbsp;such
parent entity of the Company is not engaged in any business in
any material respect other than incidental to its ownership,
directly or indirectly of the Capital Stock of the Company and
its Affiliates and (3)&nbsp;such parent entity has issued a
Guarantee in respect of the Notes, the information and reports
required by this covenant may be those of such parent company on
a consolidated basis.
</FONT>

<P align="left">
<B><FONT size="2">Defaults</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each of the following is an Event of Default:
</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;a default in the payment of interest on
    the Notes when due, continued for 30&nbsp;days, subject to the
    interest deferral provisions contained in 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;a default in the payment of principal of
    any Note when due at its Stated Maturity, upon optional
    redemption, upon required purchase, upon declaration of
    acceleration or otherwise;
    </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 failure by the Company to comply
    with its obligations under &#147;&#151;&nbsp;Certain
    Covenants&nbsp;&#151; Merger and Consolidation&#148; above;
    </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 failure by the Company to comply for
    30&nbsp;days after notice with any of its obligations in the
    covenants described above under &#147;Change of Control&#148;
    (other than a failure to purchase Notes) or under
    &#147;&#151;&nbsp;Certain Covenants&#148; under
    &#147;&#151;&nbsp;Limitation on Indebtedness&#148;,
    &#147;&#151;&nbsp;Limitation on Restricted Payments&#148;,
    &#147;&#151;&nbsp;Limitation on Restrictions on Distributions
    from Restricted Subsidiaries&#148;, &#147;&#151;&nbsp;Limitation
    on Sales of Assets and Subsidiary Stock&#148; (other than a
    failure to purchase Notes), &#147;&#151;&nbsp;Limitation on
    Affiliate Transactions&#148;, &#147;&#151;&nbsp;Limitation on
    the Sale or Issuance of Capital Stock of Restricted
    Subsidiaries&#148;, &#147;&#151;&nbsp;Future Guarantors&#148; or
    &#147;&#151;&nbsp;SEC Reports&#148;;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">129
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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;the failure by the Company or a
    Subsidiary Guarantor to comply for 60&nbsp;days after notice
    with its other agreements contained in 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;Indebtedness of the Company, any
    Guarantor or any Significant Subsidiary is not paid within any
    applicable grace period after final maturity or is accelerated
    by the holders thereof because of a default and the total amount
    of such Indebtedness unpaid or accelerated exceeds $ million
    (the &#147;cross acceleration provision&#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">(7)&nbsp;certain events of bankruptcy, insolvency
    or reorganization of the Company, a Subsidiary Guarantor or a
    Significant Subsidiary (the &#147;bankruptcy provisions&#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">(8)&nbsp;any judgment or decree for the payment
    of money in excess of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    is entered against the Company, a Subsidiary Guarantor or a
    Significant Subsidiary, remains outstanding for a period of 60
    consecutive days following such judgment and is not discharged,
    waived or stayed within 10&nbsp;days after notice (the
    &#147;judgment default provision&#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">(9)&nbsp;any Subsidiary Guaranty ceases to be in
    full force and effect (other than in accordance with the terms
    of such Guaranty) and such default continues for 10&nbsp;days or
    any Subsidiary Guarantor denies or disaffirms its obligations
    under its Guaranty;&nbsp;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">(10)&nbsp;except as expressly permitted by
    clause&nbsp;(1) under the definition of &#147;Restricted
    Payment,&#148; the Company pays any dividend on shares of the
    Company&#146;s Capital Stock (A)&nbsp;when, based on the
    then-available financial statements presented to the Board of
    Directors, such dividend exceeds the amount available to be paid
    pursuant to paragraph&nbsp;(3)&nbsp;or clause&nbsp;(b)(3) of the
    &#147;&#151;&nbsp;Certain Covenants&nbsp;&#151; Limitation on
    Restricted Payments&#148; covenant or (B)&nbsp;during a Dividend
    Suspension Period or the continuance of an Event of Default.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">However, a default under clauses&nbsp;(4),
(5)&nbsp;and (8)&nbsp;will not constitute an Event of Default
until the Trustee or the holders of 25% in principal amount of
the outstanding Notes notify the Company of the default and the
Company does not cure such default within the time specified
after receipt of such notice.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If an Event of Default occurs and is continuing,
the Trustee or the holders of at least 25% in principal amount
of the outstanding Notes may declare the principal of and
accrued but unpaid interest on all the Notes to be due and
payable. Upon such a declaration, such principal and interest
shall be due and payable immediately. If an Event of Default
relating to certain events of bankruptcy, insolvency or
reorganization of the Company occurs and is continuing, the
principal of and interest on all the Notes will ipso facto
become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any
holders of the Notes. Under certain circumstances, the holders
of a majority in principal amount of the outstanding Notes may
rescind any such acceleration with respect to the Notes and its
consequences.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subject to the provisions of the Indenture
relating to the duties of the Trustee, in case an Event of
Default occurs and is continuing, the Trustee will be under no
obligation to exercise any of the rights or powers under the
Indenture at the request or direction of any of the holders of
the Notes unless such holders have offered to the Trustee
reasonable indemnity or security against any loss, liability or
expense. Except to enforce the right to receive payment of
principal, premium (if any) or interest when due, no holder of a
Note may pursue any remedy with respect to the Indenture or the
Notes 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;such holder has previously given the
    Trustee notice that an Event of Default is 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">(2)&nbsp;holders of at least 25% in principal
    amount of the outstanding Notes have requested the Trustee to
    pursue the remedy;
    </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 holders have offered the Trustee
    reasonable security or indemnity against any loss, liability or
    expense;
    </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 Trustee has not complied with such
    request within 60&nbsp;days after the receipt thereof and the
    offer of security or indemnity;&nbsp;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;holders of a majority in principal
    amount of the outstanding Notes have not given the Trustee a
    direction inconsistent with such request within such 60-day
    period.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Subject to certain restrictions, the holders of a
majority in principal amount of the outstanding Notes are given
the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. The
Trustee, however, may refuse to follow any direction that
conflicts with law or the Indenture or that the Trustee
determines is unduly prejudicial to the rights of any other
holder of a Note or that would involve the Trustee in personal
liability.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a Default occurs, is continuing and is known
to the Trustee, the Trustee must mail to each holder of the
Notes notice of the Default within 90&nbsp;days after it occurs.
Except in the case of a Default in the payment of principal of
or interest on any Note, the Trustee may withhold notice if and
so long as a committee of its trust officers determines that
withholding notice is not opposed to the interest of the holders
of the Notes. In addition, the Company is required to deliver to
the Trustee, within 120&nbsp;days after the end of each fiscal
year, a certificate indicating whether the signers thereof know
of any Default that occurred during the previous year. The
Company is required to deliver to the Trustee, within
30&nbsp;days after the occurrence thereof, written notice of any
event which would constitute certain Defaults, their status and
what action it is taking or propose to take in respect thereof.
</FONT>

<P align="left">
<B><FONT size="2">Amendments and Waivers</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subject to certain exceptions, the Indenture may
be amended with the consent of the holders of a majority in
principal amount of the Notes then outstanding (including
consents obtained in connection with a tender offer or exchange
for the Notes) and any past default or compliance with any
provisions may also be waived with the consent of the holders of
a majority in principal amount of the Notes then outstanding.
However, without the consent of each holder of an outstanding
Note affected thereby, an amendment or waiver may not, among
other things:
</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;reduce the principal amount of Notes
    whose holders must consent to an amendment;
    </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;reduce the rate of or extend the time
    for payment of interest on any Note;
    </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;reduce the principal amount of or extend
    the Stated Maturity of any Note or amend the Company&#146;s
    right to defer interest on the Notes in a manner adverse to the
    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">(4)&nbsp;reduce the amount payable upon the
    redemption of any Note or change the time at which any Note may
    be redeemed as described under &#147;&#151;&nbsp;Optional
    Redemption&#148; above;
    </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 Note payable in money other
    than that stated in the Note;
    </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;impair the right of any holder of the
    Notes to receive payment of principal amount of and interest on
    such holder&#146;s Notes on or after the due dates therefor or
    to institute suit for the enforcement of any payment on or with
    respect to such holder&#146;s 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">(7)&nbsp;(A)&nbsp;make a change to lower the
    Consolidated Coverage Ratio threshold for a Dividend Suspension
    Period or make a change to paragraph&nbsp;(3)&nbsp;under
    &#147;&#151;&nbsp;Certain Covenants&nbsp;&#151; Limitation on
    Restricted Payments&#148; that would have the effect of
    increasing the amounts of permitted to be distributed in respect
    of the Company&#146;s Capital Stock, (B)&nbsp;make any change to
    the provisions of the indenture that prohibit the payment of
    dividends while interest is being deferred, while any previously
    deferred interest remains unpaid during a Dividend Suspension
    Period, or during the continuance of any Default or Event of
    Default or (C)&nbsp;waive an Event of Default under
    clause&nbsp;(10)&nbsp;of &#147;Defaults&#148; (in each case
    except in connection with an offer by the Company to purchase
    all of the Notes, in which case a majority in principal amount
    of Notes will be sufficient);
    </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;make any change in the amendment
    provisions which require each holder&#146;s consent or in the
    waiver provisions;
    </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">(9)&nbsp;make any change in the ranking or
    priority of any Note or any Guaranty that would adversely affect
    the Noteholders;&nbsp;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">(10)&nbsp;make any change in any Guaranty that
    would adversely affect the Noteholders in any material respect.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notwithstanding the preceding, without the
consent of any holder of the Notes, the Company, the Guarantors
and Trustee may 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 cure any ambiguity, omission, defect,
    mistake or inconsistency;
    </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 provide for the assumption by a
    successor person of the obligations of the Company or any
    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">(3)&nbsp;to provide for uncertificated Notes in
    addition to or in place of certificated Notes (provided that the
    uncertificated Notes are issued in registered form for purposes
    of Section&nbsp;163(f) of the Code, or in a manner such that the
    uncertificated Notes are described in Section&nbsp;163(f)(2)(B)
    of the Code);
    </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 add Guarantees with respect to the
    Notes, including any Subsidiary Guaranties, or to secure 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">(5)&nbsp;to add to the covenants of the Company
    or a Subsidiary Guarantor for the benefit of the holders of the
    Notes or to surrender any right or power conferred upon the
    Company or a Subsidiary 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">(6)&nbsp;to make any change that does not
    adversely affect the rights of any holder 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">(7)&nbsp;to comply with any requirement of the
    SEC in connection with the qualification of the Indenture under
    the Trust Indenture Act or to make certain changes to the
    Indenture to provide for the issuance of Additional
    Notes;&nbsp;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;to conform the text of the Indenture or
    the Notes to any provision of this &#147;Description of Senior
    Subordinated Notes&#148; section of the prospectus to the extent
    that such provision in this &#147;Description of Senior
    Subordinated Notes&#148; section of the prospectus was intended
    to be a verbatim recitation of a provision of the Indenture or
    of the Notes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">However, no amendment may be made to the
subordination provisions of the Indenture that adversely affects
the rights of any holder of Senior Indebtedness of the Company
or a Subsidiary Guarantor then outstanding unless the holders of
such Senior Indebtedness (or their Representative) consent to
such change.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consent of the holders of the Notes is not
necessary under the Indenture to approve the particular form of
any proposed amendment. It is sufficient if such consent
approves the substance of the proposed amendment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After an amendment under the Indenture becomes
effective, the Company is required to mail to holders of the
Notes a notice briefly describing such amendment. However, the
failure to give such notice to all holders of the Notes, or any
defect therein, will not impair or affect the validity of the
amendment.
</FONT>

<P align="left">
<B><FONT size="2">Defeasance</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At any time, the Company may terminate all its
obligations under the Notes and the Indenture (&#147;legal
defeasance&#148;), except for certain obligations, including
those respecting the defeasance trust and obligations to
register the transfer or exchange of the Notes, to replace
mutilated, destroyed, lost or stolen Notes and to maintain a
registrar and paying agent in respect of the Notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, at any time the Company may
terminate its obligations under &#147;&#151;&nbsp;Change of
Control&#148; and under the covenants described under
&#147;&#151;&nbsp;Certain Covenants&#148; (other than the
covenant described under &#147;&#151;&nbsp;Merger and
Consolidation&#148;), the operation of the cross acceleration
provision, the bankruptcy
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">provisions with respect to Significant
Subsidiaries and the judgment default provision described under
&#147;&#151;&nbsp;Defaults&#148; above and the limitations
contained in clause&nbsp;(3) of the first paragraph under
&#147;&#151;&nbsp;Certain Covenants&nbsp;&#151; Merger and
Consolidation&#148; above (&#147;covenant defeasance&#148;).
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant
defeasance option. If the Company exercises its legal defeasance
option, payment of the Notes may not be accelerated because of
an Event of Default with respect thereto. If the Company
exercises its covenant defeasance option, payment of the Notes
may not be accelerated because of an Event of Default specified
in clause&nbsp;(4), (6), (7) (with respect only to Significant
Subsidiaries) or (8)&nbsp;under &#147;&#151;&nbsp;Defaults&#148;
above or because of the failure of the Company to comply with
clause&nbsp;(3) of the first paragraph under
&#147;&#151;&nbsp;Certain Covenants&nbsp;&#151; Merger and
Consolidation&#148; above. If the Company exercises its legal
defeasance option or its covenant defeasance option, each
Guarantor will be released from all of its obligations with
respect to its Guaranty.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to exercise either of the Company&#146;s
defeasance options, it must irrevocably deposit in trust (the
&#147;defeasance trust&#148;) with the Trustee money or
U.S.&nbsp;Government Obligations for the payment of principal
and interest on the Notes to redemption or maturity, as the case
may be, and must comply with certain other conditions, including
delivery to the Trustee of an opinion of counsel to the effect
that holders of the Notes will not recognize income, gain or
loss for Federal income tax purposes as a result of such deposit
and defeasance and will be subject to Federal income tax on the
same amounts and in the same manner and at the same times as
would have been the case if such deposit and defeasance had not
occurred (and, in the case of legal defeasance only, such
opinion of counsel must be based on a ruling of the Internal
Revenue Service or other change in applicable Federal income tax
law).
</FONT>

<P align="left">
<B><FONT size="2">Satisfaction And Discharge</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">When (1)&nbsp;the Company delivers to the Trustee
all outstanding Notes for cancellation or (2)&nbsp;all
outstanding Notes have become due and payable, whether at
maturity or on a redemption date as a result of the mailing of a
notice of redemption, or (3)&nbsp;all outstanding Notes will
become due and payable within one year or are to be called for
redemption within one year under arrangements reasonably
satisfactory to the Trustee and, in the case of clauses&nbsp;(2)
and (3), the Company irrevocably deposits with the Trustee funds
sufficient to pay at maturity or upon redemption all outstanding
Notes, including interest thereon to maturity or such redemption
date, and if in any case the Company pays all other sums payable
hereunder by it, then the Indenture shall, subject to
exceptions, cease to be of further effect.
</FONT>

<P align="left">
<B><FONT size="2">Concerning the Trustee</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">U.S.&nbsp;Bank National Association is to be the
Trustee under the Indenture and the Registrar and Paying Agent
with regard to the Notes. An affiliate of the Trustee is
expected to be a lender under the Credit Agreement.
</FONT>

<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; <I>provided, however</I>, if it
acquires any conflicting interest it must either eliminate such
conflict within 90&nbsp;days, apply to the SEC for permission to
continue or resign.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Holders of a majority in principal amount of
the 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.
If an Event of Default occurs (and is not 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 and
then only to the extent required by the terms of the Indenture.
</FONT>

<P align="center"><FONT size="2">133
</FONT>

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<P align="left">
<B><FONT size="2">No Personal Liability of Directors, Officers,
Employees and Stockholders</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No director, officer, employee, incorporator or
stockholder of the Company or any Subsidiary Guarantor shall
have any liability for any obligations of the Company or the
Subsidiary Guarantors under the Notes, any Guaranty or the
Indenture or for any claim based on, in respect of, or by reason
of such obligations or their creation. Each Holder of the Notes
by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of
the Notes. Such waiver and release may not be effective to waive
liabilities under the U.S.&nbsp;Federal securities laws and it
is the view of the SEC that such a waiver is against public
policy.
</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 and the Notes will be governed by,
and construed in accordance with, the laws of the State of New
York without giving effect to applicable principles of conflicts
of law to the extent that the application of the law of another
jurisdiction would be required thereby.
</FONT>

<P align="left">
<B><FONT size="2">Definitions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;2002 and 2004 Refinancing
Transactions&#148; means (i)&nbsp;Buffets&#146; offering of the
Buffets Existing Notes in 2002, Buffets&#146; entering into of
the Credit Agreement in 2002, the repayment of all amounts
outstanding under Buffets&#146; then-existing credit facility,
the redemption in 2002 of all of Buffets&#146; 14%&nbsp;Senior
Subordinated Notes due 2008, the redemption in 2002 of all of
the Company&#146;s 16%&nbsp;Senior Subordinated Notes due 2008,
the payment of related prepayment fees and the payment of fees
and expenses relating to such transactions, all of which were
completed on or about June&nbsp;28, 2002, and
(ii)&nbsp;Buffets&#146; entering into the Credit Agreement in
February 2004, the repayment of all amounts outstanding under
Buffets&#146; then-existing credit facility, the Company&#146;s
offering of the Buffets Holdings Existing Notes in May 2004 and
the repurchase of a portion of Buffets Existing Notes with the
proceeds therefrom.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Acquired Indebtedness&#148; means
(1)&nbsp;with respect to any Person that becomes a Restricted
Subsidiary after the Issue Date, Indebtedness of such Person and
its Subsidiaries existing at the time such Person becomes a
Restricted Subsidiary that was not incurred in connection with,
or in contemplation of, such Person becoming a Restricted
Subsidiary and (2)&nbsp;with respect to the Company or any
Restricted Subsidiary, any Indebtedness of a Person (other than
the Company or a Restricted Subsidiary) existing at the time
such Person is merged with or into the Company or a Restricted
Subsidiary in connection with the acquisition of an asset or
assets from another Person, which Indebtedness was not, in any
case, incurred by such other Person in connection with, or in
contemplation of, such merger or acquisition.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Additional Assets&#148; 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 property, plant or equipment useful
    in a Related 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">(2)&nbsp;the Capital Stock of a Person that
    becomes a Restricted Subsidiary as a result of the acquisition
    of such Capital Stock by the Company or another Restricted
    Subsidiary;&nbsp;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;Capital Stock constituting a minority
    interest in any Person that at such time is a Restricted
    Subsidiary;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">provided, however, that any such Restricted
Subsidiary described in clause&nbsp;(2) or (3)&nbsp;above is
primarily engaged in a Related Business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Affiliate&#148; of any specified Person
means any other Person, directly or indirectly, controlling or
controlled by or under direct or indirect common control with
such specified Person. For the purposes of this definition,
&#147;control&#148; when used with respect to any Person means
the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms
&#147;controlling&#148; and &#147;controlled&#148; have meanings
correlative to the foregoing. For purposes of the covenants
described under &#147;&#151;&nbsp;Certain Covenants&nbsp;&#151;
Limitation on Restricted Payments&#148;,
&#147;&#151;&nbsp;Certain Covenants&nbsp;&#151; Limitation on
Affiliate Transactions&#148; and &#147;&#151;&nbsp;Certain
Covenants&nbsp;&#151; Limitation on Sales of Assets and
Subsidiary Stock&#148; only, &#147;Affiliate&#148; shall also
mean any
</FONT>

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<DIV align="left">
<FONT size="2">beneficial owner of Capital Stock representing
10% or more of the total voting power of the Voting Stock (on a
fully diluted basis) of the Company or of rights or warrants to
purchase such Capital Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any
such beneficial owner pursuant to the first sentence hereof.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Asset Disposition&#148; means any sale,
lease, transfer or other disposition (or series of related
sales, leases, transfers or dispositions) by the Company or any
Restricted Subsidiary, including any disposition by means of a
merger, consolidation or similar transaction (each referred to
for the purposes of this definition as a
&#147;disposition&#148;), 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 shares of Capital Stock of a
    Restricted Subsidiary (other than directors&#146; qualifying
    shares or shares required by applicable law to be held by a
    Person other than the Company or a 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 the assets of
    any division or line of business of the Company or any
    Restricted Subsidiary;&nbsp;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 assets of the Company or any
    Restricted Subsidiary outside of the ordinary course of business
    of the Company or such Restricted Subsidiary;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">other than, in the case of clauses&nbsp;(1),
(2)&nbsp;and (3)&nbsp;above,
</FONT>
<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;a disposition by a Restricted Subsidiary
    to the Company or by the Company or a Restricted Subsidiary to a
    Wholly Owned 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">(B)&nbsp;for purposes of the covenant described
    under &#147;&#151;&nbsp;Certain Covenants&nbsp;&#151; Limitation
    on Sales of Assets and Subsidiary Stock&#148; only, (x)&nbsp;a
    disposition that constitutes a Restricted Payment permitted by
    the covenant described under &#147;&#151;&nbsp;Certain
    Covenants&nbsp;&#151; Limitation on Restricted Payments&#148; or
    a Permitted Investment and (y)&nbsp;a disposition of all or
    substantially all the assets of the Company in accordance with
    the covenant described under &#147;&#151;&nbsp;Certain
    Covenants&nbsp;&#151; Merger and Consolidation&#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">(C)&nbsp;a disposition of assets with a fair
    market value of less than $1.0&nbsp;million;
    </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;entering into Hedging
    Obligations;&nbsp;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;the granting of a lien permitted under
    the Indenture.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Attributable Debt&#148; in respect of a
Sale/ Leaseback Transaction means, as at the time of
determination, the present value (discounted at the interest
rate borne by the Notes, compounded annually) of the total
obligations of the lessee for net rental payments during the
remaining term of the lease included in such Sale/ Leaseback
Transaction (including any period for which such lease has been
extended); provided, however, that if such Sale/ Leaseback
Transaction results in a Capital Lease Obligation, the amount of
Indebtedness represented thereby will be determined in
accordance with the definition of &#147;Capital Lease
Obligation.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Average Life&#148; means, as of the date of
determination, with respect to any Indebtedness, the quotient
obtained by dividing:
</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 sum of the products of the numbers
    of years from the date of determination to the dates of each
    successive scheduled principal payment of or redemption or
    similar payment with respect to Indebtedness multiplied by the
    amount of such payment by
    </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 sum of all such payments.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Bank Indebtedness&#148; means all
Obligations pursuant to the Credit Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Board of Directors&#148; with respect to a
Person means the Board of Directors of such Person or any
committee thereof duly authorized to act on behalf of such Board.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Buffets Existing Notes&#148; means the
Buffets&#146; 11&nbsp;1/4%&nbsp;Senior Subordinated Notes due
2010.
</FONT>

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</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Buffets Holdings Existing Notes&#148; means
the Company&#146;s 13&nbsp;7/8%&nbsp;Senior Discount Notes due
2010.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Business Day&#148; means each day which is
not a Legal Holiday.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Capital Lease Obligation&#148; means an
obligation that is required to be classified and accounted for
as a capital lease for financial reporting purposes in
accordance with GAAP, and the amount of Indebtedness represented
by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated
Maturity thereof shall be the date of the last payment of rent
or any other amount due under such lease prior to the first date
upon which such lease may be terminated by the lessee without
payment of a penalty.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Capital Stock&#148; of any Person means any
and all shares, interests, rights to purchase, warrants,
options, participations or other equivalents of or interests in
(however designated) equity of such Person, including any
Preferred Stock, but excluding any debt securities convertible
into such equity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Code&#148; means the Internal Revenue Code
of 1986, as amended.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Consolidated Coverage Ratio&#148; means,
with respect to any Person as of any date of determination, the
ratio of (x)&nbsp;the aggregate amount of EBITDA of such Person
and its Restricted Subsidiaries for the period of the most
recent four consecutive fiscal quarters for which internal
financial statements are available prior to the date of such
determination to (y)&nbsp;Consolidated Interest Expense of such
Person and its Restricted Subsidiaries for such four fiscal
quarters; provided, however, 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;if such Person or any of its Restricted
    Subsidiaries has Incurred any Indebtedness since the beginning
    of such period that remains outstanding or if the transaction
    giving rise to the need to calculate the Consolidated Coverage
    Ratio is an Incurrence of Indebtedness, or both, EBITDA and
    Consolidated Interest Expense for such period shall be
    calculated after giving effect on a pro forma basis to such
    Indebtedness as if such Indebtedness had been Incurred on the
    first day of such period (except that, in making such
    computation, the amount of Indebtedness under any revolving
    credit facility outstanding on the date of such calculation
    shall be computed based on (A)&nbsp;the average daily balance of
    such Indebtedness during such four fiscal quarters or such
    shorter period when such facility was outstanding or (B)&nbsp;if
    such facility was created after the end of such four fiscal
    quarters, the average balance of such Indebtedness during the
    period from the date of creation of such facility to the date of
    the computation);
    </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;if such Person or any of its Restricted
    Subsidiaries has repaid, repurchased, defeased or otherwise
    discharged any Indebtedness since the beginning of such period
    or if any Indebtedness is to be repaid, repurchased, defeased or
    otherwise discharged (in each case other than Indebtedness
    Incurred under any revolving credit facility unless such
    Indebtedness has been permanently repaid and has not been
    replaced) on the date of the transaction giving rise to the need
    to calculate the Consolidated Coverage Ratio, EBITDA and
    Consolidated Interest Expense for such period shall be
    calculated on a pro forma basis as if such discharge had
    occurred on the first day of such period and as if such Person
    or such Restricted Subsidiary has not earned the interest income
    actually earned during such period in respect of cash or
    Temporary Cash Investments used to repay, repurchase, defease or
    otherwise discharge 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">(3)&nbsp;if since the beginning of such period
    such Person or any of its Restricted Subsidiaries shall have
    made any Asset Disposition, EBITDA for such period shall be
    reduced by an amount equal to EBITDA (if positive) directly
    attributable to the assets which are the subject of such Asset
    Disposition for such period, or increased by an amount equal to
    EBITDA (if negative), directly attributable thereto for such
    period and Consolidated Interest Expense for such period shall
    be reduced by an amount equal to the Consolidated Interest
    Expense directly attributable to any Indebtedness of such Person
    or any of its Restricted Subsidiaries repaid, repurchased,
    defeased or otherwise discharged with respect to such Person and
    its continuing Restricted Subsidiaries in connection with such
    Asset Disposition for such period (or, if the Capital Stock of
    any Restricted Subsidiary is sold, the Consolidated Interest
    Expense for such period directly attributable to the
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">136
</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">Indebtedness of such Restricted Subsidiary to the
    extent such Person and its continuing Restricted Subsidiaries
    are no longer liable for such Indebtedness after such 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;if since the beginning of such period
    such Person or any of its Restricted Subsidiaries (by merger or
    otherwise) shall have made an Investment in any Restricted
    Subsidiary (or any person which becomes a Restricted Subsidiary)
    or an acquisition of assets, including any acquisition of assets
    occurring in connection with a transaction requiring a
    calculation to be made hereunder, which constitutes all or
    substantially all of an operating unit of a business, EBITDA and
    Consolidated Interest Expense for such period shall be
    calculated after giving pro forma effect thereto (including the
    Incurrence of any Indebtedness) as if such Investment or
    acquisition occurred on the first day of such period;&nbsp;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;if since the beginning of such period
    any Person (that subsequently became a Restricted Subsidiary or
    was merged with or into such Person or any of its Restricted
    Subsidiaries since the beginning of such period) shall have made
    any Asset Disposition, any Investment or acquisition of assets
    that would have required an adjustment pursuant to
    clause&nbsp;(3) or (4)&nbsp;above if made by such Person or a
    Restricted Subsidiary during such period, EBITDA and
    Consolidated Interest Expense for such period shall be
    calculated after giving pro forma effect thereto as if such
    Asset Disposition, Investment or acquisition occurred on the
    first day of such period.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">For purposes of this definition, whenever pro
forma effect is to be given to an acquisition of assets, the
amount of income or earnings relating thereto and the amount of
Consolidated Interest Expense associated with any Indebtedness
Incurred in connection therewith, the pro forma calculations
shall be determined in good faith by a responsible financial or
accounting Officer of the Company (and may include any
applicable Pro Forma Cost Savings). If any Indebtedness bears a
floating rate of interest and is being given pro forma effect,
the interest on such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the
applicable rate for the entire period (taking into account any
Interest Rate Agreement applicable to such Indebtedness if such
Interest Rate Agreement has a remaining term in excess of
12&nbsp;months).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Consolidated Interest Expense&#148; means,
with respect to any Person for any period, the total interest
expense of such Person and its consolidated Restricted
Subsidiaries for such period on a consolidated basis in
accordance with GAAP, plus, to the extent not included in such
total interest expense, and to the extent incurred by such
Person or its Restricted Subsidiaries, 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;interest expense attributable to capital
    leases and the interest expense attributable to leases
    constituting part of a Sale/ Leaseback Transaction;
    </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;amortization of debt discount and debt
    issuance cost;
    </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;capitalized interest;
    </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;non-cash interest expenses;
    </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;commissions, discounts and other fees
    and charges owed with respect to letters of credit bankers&#146;
    acceptance financing;
    </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;net payments pursuant to Hedging
    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">(7)&nbsp;dividends paid in cash or Disqualified
    Stock in respect of all Preferred Stock of Restricted
    Subsidiaries and Disqualified Stock of such Person held by
    Persons other than such Person or a Wholly Owned 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">(8)&nbsp;interest Incurred in connection with
    Investments in discontinued operations;
    </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;interest actually paid by such Person or
    a Restricted Subsidiary under a Guarantee of Indebtedness of any
    other Person;&nbsp;and
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">137
</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">(10)&nbsp;the cash contributions to any employee
    stock ownership plan or similar trust to the extent such
    contributions are used by such plan or trust to pay interest or
    fees to any Person (other than such Person) in connection with
    Indebtedness Incurred by such plan or trust;&nbsp;and
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">less, to the extent included in such total
interest expense, (A)&nbsp;the amortization during such period
of capitalized financing costs associated with the Refinancing
Transactions and the 2002 and 2004 Refinancing Transactions and
(B)&nbsp;the amortization during such period of other
capitalized financing costs; provided, however, that, in the
case of (B), the aggregate amount of amortization relating to
such capitalized financing costs deducted in calculating
Consolidated Interest Expense shall not exceed 5% of the
aggregate amount of the financing giving rise thereto.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Consolidated Net Income&#148; means, with
respect to any Person for any period, the net income of such
Person and its consolidated Subsidiaries; provided, however,
that there shall not be included in such Consolidated Net Income:
</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 net income of any Person (other than
    the referent Person) if such Person is not a Restricted
    Subsidiary, except that:
    </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;subject to the exclusion contained in
    clause&nbsp;(4) below, the referent Person&#146;s equity in the
    net income of any such Person for such period shall be included
    in such Consolidated Net Income up to the aggregate amount of
    cash actually distributed by such Person during such period to
    the referent Person as a dividend or other distribution
    (subject, in the case of a dividend or other distribution paid
    to a Restricted Subsidiary, to the limitations contained in
    clause&nbsp;(3) below);&nbsp;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;the referent Person&#146;s equity in a
    net loss of any such Person for such period shall be included in
    determining such Consolidated Net Income but only to the extent
    the referent Person or a Restricted Subsidiary funded such net
    loss with cash;
    </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">(2)&nbsp;any net income of any Restricted
    Subsidiary of such Person if such Restricted Subsidiary is
    subject to restrictions, directly or indirectly, on the payment
    of dividends or the making of distributions by such Restricted
    Subsidiary, directly or indirectly, to such Person (other than
    restrictions permitted under the covenant described under
    &#147;&#151;&nbsp;Certain Covenants&nbsp;&#151; Limitation on
    Restrictions on Distributions from Restricted
    Subsidiaries&#148;), except that:
    </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;subject to the exclusion contained in
    clause&nbsp;(4) below, the Person&#146;s equity in the net
    income of any such Restricted Subsidiary for such period shall
    be included in such Consolidated Net Income up to the aggregate
    amount of cash actually distributed by such Restricted
    Subsidiary during such period to such Person or another
    Restricted Subsidiary of such Person as a dividend or other
    distribution (subject, in the case of a dividend or other
    distribution paid to another Restricted Subsidiary, to the
    limitation contained in this clause);&nbsp;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;such Person&#146;s equity in a net loss
    of any such Restricted Subsidiary for such period shall be
    included in determining such Consolidated Net Income;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(3)&nbsp;any gain or loss realized upon the sale
or other disposition of any assets of such Person, its
consolidated Subsidiaries or any other Person (including
pursuant to any sale-and-leaseback arrangement) which is not
sold or otherwise disposed of in the ordinary course of business
and any gain or loss realized upon the sale or other disposition
of any Capital Stock of any Person;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(4)&nbsp;extraordinary gains or losses;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(5)&nbsp;to the extent included in total interest
expense, any amortization or write-offs of debt issuance costs
and prepayment penalties realized during such period to the
extent attributable to the Indebtedness being Refinanced in
connection with the Refinancing Transactions and the 2002 and
2004 Refinancing Transactions;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(6)&nbsp;the cumulative effect of a change in
accounting principles;
</FONT>

<P align="center"><FONT size="2">138
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(7)&nbsp;gains and losses realized upon the
refinancing of any Indebtedness of the Company or any Restricted
Subsidiary;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(8)&nbsp;non-cash compensation charges or other
non-cash expenses or charges arising from the grant of or
issuance or repricing of Capital Stock or other equity-based
awards or any amendment or substitution of any such Capital
Stock or other equity-based awards;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(9)&nbsp;any non-cash goodwill or non-cash asset
impairment charges subsequent to the Issue Date;&nbsp;and
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(10)&nbsp;deferred rent to the extent it is
payable after the maturity date of the Notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Credit Agreement&#148; means the Credit
Agreement dated as of June&nbsp;28, 2002, as amended and
restated as of the Issue Date, by and among Buffets, the
guarantors referred to therein, the lenders referred to therein
and Credit Suisse First Boston LLC, together with the related
documents thereto (including the term loans, revolving loans and
letter of credit facility thereunder, any guarantees and
security documents), as amended, extended, renewed, replaced,
restated, supplemented or otherwise modified (in whole or in
part, and without limitation as to amount, terms, conditions,
covenants and other provisions) from time to time, and any
agreement (and related document or instrument) governing
Indebtedness incurred to Refinance, in whole or in part, the
borrowings and commitments then outstanding or permitted to be
outstanding under such Credit Agreement or a successor Credit
Agreement, whether by the same or any other lender or group of
lenders (and whether in the form of commercial paper facilities,
revolving credit loans, term loans, receivables financing,
letters of credit, or any debt securities of other form of debt,
convertible debt or exchangeable debt financing).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Currency Agreement&#148; means in respect
of a Person any foreign exchange contract, currency swap
agreement or other similar agreement designed to protect such
Person against fluctuations in currency values.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Default&#148; 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;
<FONT size="2">&#147;Designated Senior Indebtedness&#148;, with
respect to 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;the Bank 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;Obligations, including the Guarantees,
    in respect of Buffets&#146; Senior Notes;&nbsp;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;any other Senior Indebtedness of such
    Person which, at the date of determination, has an aggregate
    principal amount outstanding of, or under which, at the date of
    determination, the holders thereof are committed to lend up to,
    at least
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    and is specifically designated by such Person in the instrument
    evidencing or governing such Senior Indebtedness as
    &#147;Designated Senior Indebtedness&#148; for purposes of the
    Indenture.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Disqualified Stock&#148; means, with
respect to any Person, any Capital Stock which by its terms (or
by the terms of any security into which it is convertible or for
which it is exchangeable at the option of the holder) or upon
the happening of any event:
</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;matures or is mandatorily redeemable
    pursuant to a sinking fund obligation or otherwise;
    </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;is convertible or exchangeable at the
    option of the holder for Indebtedness or Disqualified
    Stock;&nbsp;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;is mandatorily redeemable or must be
    purchased upon the occurrence of certain events or otherwise, in
    whole or in part;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">in each case on or prior to the first anniversary
of the Stated Maturity of the Notes; provided, however, that any
Capital Stock that would not constitute Disqualified Stock but
for provisions thereof giving holders thereof the right to
require such Person to purchase or redeem such Capital Stock
upon the
</FONT>

<P align="center"><FONT size="2">139
</FONT>

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<DIV align="left">
<FONT size="2">occurrence of an &#147;asset sale&#148; or
&#147;change of control&#148; occurring prior to the first
anniversary of the Stated Maturity of the Notes shall not
constitute Disqualified Stock if:
</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;the &#147;asset sale&#148; or
    &#147;change of control&#148; provisions applicable to such
    Capital Stock are not more favorable to the holders of such
    Capital Stock than the terms applicable to the Notes and
    described under &#147;&#151;&nbsp;Certain Covenants&nbsp;&#151;
    Limitation on Sales of Assets and Subsidiary Stock&#148; and
    &#147;&#151;&nbsp;Certain Covenants&nbsp;&#151; Change of
    Control&#148;;&nbsp;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;any such requirement only becomes
    operative after compliance with such terms applicable to the
    Notes, including the purchase of any Notes tendered pursuant
    thereto.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">The amount of any Disqualified Stock that does
not have a fixed redemption, repayment or repurchase price will
be calculated in accordance with the terms of such Disqualified
Stock as if such Disqualified Stock were redeemed, repaid or
repurchased on any date on which the amount of such Disqualified
Stock is to be determined pursuant to the Indenture; provided,
however, that if such Disqualified Stock could not be required
to be redeemed, repaid or repurchased at the time of such
determination, the redemption, repayment or repurchase price
will be the book value of such Disqualified Stock as reflected
in the most recent financial statements of such Person.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Dividend Suspension Period&#148; means any
period: (i)&nbsp;that is an Interest Deferral Period,
(ii)&nbsp;during which any interest deferred during any Interest
Deferral Period (including interest thereon) remains unpaid,
and/or (iii)&nbsp;for which the Consolidated Coverage Ratio of
the Company for the most recently ended four full fiscal
quarters for which internal financial statements are available,
is less
than &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
1.00.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;EBITDA&#148; means, with respect to any
Person, for any period, the sum of Consolidated Net Income, plus
the following to the extent deducted in calculating such
Consolidated Net Income:
</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 income tax expense of such Person
    and 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">(2)&nbsp;Consolidated Interest Expense of such
    Person and 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;depreciation and amortization expense of
    such Person and its consolidated Restricted Subsidiaries
    (excluding amortization expense attributable to a prepaid
    operating activity item that was paid in cash in a prior 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">(4)&nbsp;Restructuring Expenses;
    </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;the principal component of any Sale/
    Leaseback Transaction that constitutes an operating
    lease;&nbsp;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;all other non-cash charges of such
    Person and its consolidated Restricted Subsidiaries (including,
    without limitation, deferred rental expense, but excluding any
    such non-cash charge to the extent that it represents an accrual
    of or reserve for cash expenditures in any future period);
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">in each case for such period. Notwithstanding the
foregoing, the provision for taxes based on the income or
profits of, and the depreciation and amortization and non-cash
charges of, a Restricted Subsidiary shall be added to
Consolidated Net Income to compute EBITDA only to the extent
(and in the same proportion) that the net income of such
Restricted Subsidiary was included in calculating Consolidated
Net Income of such Person.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Excess Cash&#148; means, with respect to
any period, (A)&nbsp;EBITDA minus the sum of (i)&nbsp;cash
interest expense, (ii)&nbsp;deferred interest, if any, not
otherwise included in clause&nbsp;(i), (iii)&nbsp;Maintenance
Capital Expenditures, (iv)&nbsp;Excess Growth Capital
Expenditures, (v)&nbsp;cash income taxes, (vi)&nbsp;any items
included in clause&nbsp;(4) under the definition of EBITDA that
are settled in cash (excluding charges funded with proceeds from
the IDS public offering), and (vii)&nbsp;any payment or
repayment of indebtedness (excluding any repayments of
Indebtedness pursuant to the asset sales provisions of the
Indenture and the Credit Agreement, any refinancing and any
amounts included in (i)&nbsp;and (ii)&nbsp;above), plus
(B)&nbsp;Net Cash Proceeds from the sale of Tahoe Joe&#146;s Inc.
</FONT>

<P align="center"><FONT size="2">140
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Excess Growth Capital Expenditures&#148; is
the positive result, if any, of (A)&nbsp;capital expenditures
minus the sum of (i)&nbsp;Maintenance Capital Expenditures,
(ii)&nbsp;net cash proceeds from asset sales, including net cash
proceeds from Sale-/ Leaseback Transactions, (iii)&nbsp;net cash
proceeds from debt incurrence, plus (B)&nbsp;repayment of
Indebtedness pursuant to the asset sales provisions of the
Indenture and Credit Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Exchange Act&#148; means the Securities
Exchange Act of 1934, as amended.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Exchange Conditions&#148; mean the
following conditions all of which must be satisfied at the time
that Class&nbsp;B common stock of the Company is exchanged in
accordance with its terms into IDSs of the Company (the
&#147;Exchange&#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 Exchange must comply with all
    applicable laws, including, without limitation, securities laws;
    </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 Exchange must occur pursuant to an
    effective registration statement in the United States;
    </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 Exchange will not conflict with or
    cause a default under any material financing agreement;
    </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 Exchange will not cause a mandatory
    suspension of dividends or deferral of interest under any
    material financing agreement as of the measurement date
    immediately following the proposed exchange 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">(5)&nbsp;the Board of Directors shall determine
    in good faith that the Additional Notes represented by the IDSs
    for which the Class&nbsp;B common stock of the Company is
    exchanged should be treated as debt for U.S.&nbsp;federal income
    tax purposes;
    </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 Company delivers to the Trustee
    prior to or simultaneously with such issuance an opinion of an
    independent advisor to the effect that, after giving effect to
    the Incurrence of the Indebtedness evidenced by the Additional
    Notes represented by the IDSs for which the Class&nbsp;B common
    stock of the Company is exchanged and related Guarantees, the
    Company and the Guarantors are solvent;
    </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;no Interest Deferral Period is occurring
    and no deferred interest or accrued interest thereon from any
    previous Interest Deferral Period has not been paid in
    full;&nbsp;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;no Default or Event of Default has
    occurred and is continuing or will occur as a result of the
    Exchange under the Indenture.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;GAAP&#148; means generally accepted
accounting principles in the United States of America as in
effect as of the Issue Date, including those set forth in:
</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 opinions and pronouncements of the
    Accounting Principles Board of the American Institute of
    Certified Public Accountants;
    </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;statements and pronouncements of the
    Financial Accounting Standards Board;&nbsp;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 other statements by such other
    entity as approved by a significant segment of the accounting
    profession.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Guarantee&#148; means any obligation,
contingent or otherwise, of any Person directly or indirectly
guaranteeing any Indebtedness of any Person and any obligation,
direct or indirect, contingent or otherwise, of such Person:
</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 purchase or pay (or advance or supply
    funds for the purchase or payment of) such Indebtedness of such
    Person (whether arising by virtue of partnership arrangements,
    or by agreements to keep-well, to purchase assets, goods,
    securities or services, to take-or-pay or to maintain financial
    statement conditions or otherwise);&nbsp;or
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">141
</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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;entered into for the purpose of assuring
    in any other manner the obligee of such Indebtedness of the
    payment thereof or to protect such obligee against loss in
    respect thereof (in whole or in part);
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">provided, however, that the term
&#147;Guarantee&#148; shall not include endorsements for
collection or deposit in the ordinary course of business. The
term &#147;Guarantee&#148; used as a verb has a corresponding
meaning. The term &#147;Guarantor&#148; shall mean any Person
Guaranteeing any obligation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Guarantor&#148; means each Subsidiary
Guarantor and each other Person that thereafter Guarantees the
Notes pursuant to the terms of the Indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Guaranty&#148; means each Subsidiary
Guaranty.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Guaranty Agreement&#148; means a
supplemental indenture, in a form reasonably satisfactory to the
Trustee, pursuant to which a Subsidiary Guarantor guarantees the
Company&#146;s obligations with respect to the Notes on the
terms provided for in the Indenture and in such supplemental
indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Hedging Obligations&#148; of any Person
means the obligations of such Person pursuant to any Interest
Rate Agreement or Currency Agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Holder&#148; or &#147;Noteholder&#148;
means the Person in whose name a Note is registered on the
Registrar&#146;s books.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Incur&#148; means issue, assume, Guarantee,
incur or otherwise become liable for; provided, however, that
any Indebtedness or Capital Stock of a Person existing at the
time such Person becomes a Restricted Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed
to be Incurred by such Person at the time it becomes a
Restricted Subsidiary. The term &#147;Incurrence&#148; when used
as a noun shall have a correlative meaning. Solely for purposes
of determining compliance with &#147;&#151;&nbsp;Certain
Covenants&nbsp;&#151; Limitation on Indebtedness&#148;,
(1)&nbsp;amortization of debt discount or the accretion of
principal with respect to a non-interest bearing or other
discount security and (2)&nbsp;the payment of regularly
scheduled interest in the form of additional Indebtedness of the
same instrument or the payment of regularly scheduled dividends
on Capital Stock in the form of additional Capital Stock of the
same clause and with the same terms will not be deemed to be the
Incurrence of Indebtedness.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Indebtedness&#148; means, with respect to
any Person on any date of determination (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;the principal in respect of
    (A)&nbsp;indebtedness of such Person for money borrowed and
    (B)&nbsp;indebtedness evidenced by notes, debentures, bonds or
    other similar instruments for the payment of which such Person
    is responsible or liable, including, in each case, any premium
    on such indebtedness to the extent such premium has become due
    and payable;
    </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 Capital Lease Obligations of such
    Person and all Attributable Debt in respect of Sale/ Leaseback
    Transactions entered into by 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">(3)&nbsp;all obligations of such Person issued or
    assumed as the deferred purchase price of property, all
    conditional sale obligations of such Person and all obligations
    of such Person under any title retention agreement (but
    excluding trade accounts payable 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 of such Person for the
    reimbursement of any obligor on any letter of credit,
    banker&#146;s acceptance or similar credit transaction (other
    than obligations with respect to letters of credit securing
    obligations (other than obligations described in
    clauses&nbsp;(1) through (3)&nbsp;above) entered into in the
    ordinary course of business of such Person to the extent such
    letters of credit are not drawn upon or, if and to the extent
    drawn upon, such drawing is reimbursed no later than the tenth
    Business Day following payment on the letter of credit);
    </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;the amount of all obligations of such
    Person with respect to the redemption, repayment or other
    repurchase of any Disqualified Stock of such Person or, with
    respect to any Preferred Stock of any Subsidiary of such Person,
    the principal amount of such Preferred Stock to be determined in
    accordance with the Indenture (but excluding, in each case, any
    accrued dividends);
    </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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(6)&nbsp;all obligations of the type referred to
    in clauses&nbsp;(1) through (5)&nbsp;of other Persons and all
    dividends of other Persons for the payment of which, in either
    case, such Person is responsible or liable, directly or
    indirectly, as obligor, guarantor or otherwise, including by
    means of 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">(7)&nbsp;all obligations of the type referred to
    in clauses&nbsp;(1) through (6)&nbsp;of other Persons secured by
    any Lien on any property or asset of such Person (whether or not
    such obligation is assumed by such Person), the amount of such
    obligation being deemed to be the lesser of the value of such
    property or assets and the amount of the obligation so
    secured;&nbsp;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;to the extent not otherwise included in
    this definition, Hedging Obligations of such Person.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Notwithstanding the foregoing, in connection with
the purchase by such Person or any of its Restricted
Subsidiaries of any business, the term &#147;Indebtedness&#148;
will exclude post-closing payment adjustments to which the
seller may become entitled to the extent such payment is
determined by a final closing balance sheet or such payment
depends on the performance of such business after the closing;
provided, however, that, at the time of closing, the amount of
any such payment is not determinable and, to the extent such
payment thereafter becomes fixed and determined, the amount is
paid within 30&nbsp;days thereafter.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The amount of Indebtedness of any Person at any
date shall be the outstanding balance at such date of all
unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to
the obligation, of any contingent obligations at such date;
provided, however, that in the case of Indebtedness sold at a
discount, the amount of such Indebtedness at any time will be
the accreted value thereof at such time. Notwithstanding the
foregoing, Indebtedness shall not include any liability for
Federal, state, local or other taxes owed or owing to any
governmental entity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Independent Qualified Party&#148; means an
investment banking firm, accounting firm or appraisal firm of
national standing; provided, however, that such firm is not an
Affiliate of the Company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Interest Rate Agreement&#148; means in
respect of a Person any interest rate swap agreement, interest
rate cap agreement or other financial agreement or arrangement
designed to manage interest rate exposure.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Investment&#148; in any Person means any
direct or indirect advance, loan (other than advances to
customers in the ordinary course of business that are recorded
as accounts receivable on the balance sheet of the lender) or
other extensions of credit (including by way of Guarantee or
similar arrangement) 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 or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. Except as otherwise
provided for herein, the amount of an Investment shall be its
fair value at the time the Investment is made and without giving
effect to subsequent changes in value.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For purposes of the definition of
&#147;Unrestricted Subsidiary&#148;, the definition of
&#147;Restricted Payment&#148; and the covenant described under
&#147;&#151;&nbsp;Certain Covenants&nbsp;&#151; Limitation on
Restricted Payments&#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;&#147;Investment&#148; shall include the
    portion (proportionate to the Company&#146;s equity interest in
    such Subsidiary) of the fair market value of the net assets of
    any Subsidiary of the Company at the time that such Subsidiary
    is designated an Unrestricted Subsidiary; provided, however,
    that upon a redesignation of such Subsidiary as a Restricted
    Subsidiary, the Company shall be deemed to continue to have a
    permanent &#147;Investment&#148; in an Unrestricted Subsidiary
    equal to an amount (if positive) equal to (A)&nbsp;the
    Company&#146;s &#147;Investment&#148; in such Subsidiary at the
    time of such redesignation less (B)&nbsp;the portion
    (proportionate to the Company&#146;s equity interest in such
    Subsidiary) of the fair market value of the net assets of such
    Subsidiary at the time of such redesignation;&nbsp;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;any property transferred to or from an
    Unrestricted Subsidiary shall be valued at its fair market value
    at the time of such transfer, in each case as determined in good
    faith by the Board of Directors of the Company.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Investor Rights Agreement&#148; means the
Investor Rights Agreement
dated &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004 among the holders of Class&nbsp;B common stock of the
Company.
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Issue Date&#148; means the date on which
the Notes are originally issued, such date
being &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Lien&#148; means any mortgage, pledge,
security interest, encumbrance, lien or charge of any kind
(including any conditional sale or other title retention
agreement or lease in the nature thereof), provided that any
property that is the subject of a Sale/ Leaseback Transaction
shall be deemed to be covered by a Lien.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Maintenance Capital Expenditures&#148;
means, for any period, capital expenditures relating to
(i)&nbsp;the renovation of existing units, (ii)&nbsp;the
purchase of equipment for existing units, and (iii)&nbsp;the
purchase of information systems for the Company&#146;s offices,
units or otherwise by the Company or any of its Restricted
Subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Net Available Cash&#148; from an Asset
Disposition means cash payments received therefrom (including
any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or
otherwise and proceeds from the sale or other disposition of any
securities received as consideration, but only as and when
received, but excluding any other consideration received in the
form of assumption by the acquiring Person of Indebtedness or
other obligations relating to such properties or assets or
received in any other noncash form), in each case net 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;all legal, title and recording tax
    expenses, underwriting discounts, commissions and other fees and
    expenses incurred (including, without limitation, fees and
    expenses of counsel, accountants and investment bankers), and
    all Federal, state, provincial, foreign and local taxes required
    to be accrued as a liability under GAAP, as a consequence of
    such Asset 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">(2)&nbsp;all payments made on any Indebtedness
    which is secured by any assets subject to such Asset
    Disposition, in accordance with the terms of any Lien upon or
    other security agreement of any kind with respect to such
    assets, or which must by its terms, or in order to obtain a
    necessary consent to such Asset Disposition, or by applicable
    law, be repaid out of the proceeds from such Asset 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">(3)&nbsp;all distributions and other payments
    required to be made to minority interest holders in Restricted
    Subsidiaries as a result of such Asset 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">(4)&nbsp;the deduction of appropriate amounts
    provided by the seller as a reserve, in accordance with GAAP,
    against any liabilities associated with the property or other
    assets disposed in such Asset Disposition and retained by the
    Company or any Restricted Subsidiary after such Asset
    Disposition;&nbsp;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;any portion of the purchase price from
    an Asset Disposition placed in escrow, whether as a reserve for
    adjustment of the purchase price, for satisfaction of
    indemnities in respect of such Asset Disposition or otherwise in
    connection with that Asset Disposition; <I>provided,
    however</I>, that upon the termination of such escrow, Net
    Available Cash will be increased by any portion of funds in the
    escrow that are released to the Company or any Restricted
    Subsidiary.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Net Cash Proceeds&#148;, with respect to
any issuance or sale of Capital Stock, means the cash proceeds
of such issuance or sale net of attorneys&#146; fees,
accountants&#146; fees, underwriters&#146; or placement
agents&#146; fees, discounts or commissions and brokerage,
consultant and other fees actually incurred in connection with
such issuance or sale and net of taxes paid or payable as a
result thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Obligations&#148; means with respect to any
Indebtedness all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, and other
amounts payable pursuant to the documentation governing such
Indebtedness.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Permitted Equipment Lease Financings&#148;
means one or more Sale/ Leaseback Transactions relating to
equipment and/or leasehold improvements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Permitted Holders&#148; means
(i)&nbsp;Caxton-Iseman Investments L.P., Caxton Associates, LLC,
Sentinel Capital Partners,&nbsp;II, L.P., Frederick J. Iseman,
Robert M. Rosenberg, Steven M. Lefkowitz, Robert A,
</FONT>

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<DIV align="left">
<FONT size="2">Ferris, Roe H. Hatlen and David S. Lobel and any
other Person who is a controlled Affiliate of any of the
foregoing and any member of senior management of the Company and
(ii)&nbsp;any Related Party of any of the foregoing.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Permitted Investment&#148; means an
Investment by the Company or any Restricted Subsidiary in:
</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 Company, a Restricted Subsidiary or
    a Person that will, upon the making of such Investment, become a
    Restricted Subsidiary; provided, however, that the primary
    business of such Restricted Subsidiary is a Related 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">(2)&nbsp;another Person if as a result of such
    Investment such other Person is merged or consolidated with or
    into, or transfers or conveys all or substantially all its
    assets to, the Company or a Restricted Subsidiary; provided,
    however, that such Person&#146;s primary business is a Related
    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">(3)&nbsp;cash and Temporary Cash Investments;
    </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;receivables owing to the Company or any
    Restricted Subsidiary if created or acquired in the ordinary
    course of business and payable or dischargeable in accordance
    with customary trade terms; provided, however, that such trade
    terms may include such concessionary trade terms as the Company
    or any such Restricted Subsidiary deems reasonable under the
    circumstances;
    </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;payroll, travel and similar advances to
    cover matters that are expected at the time of such advances
    ultimately to be treated as expenses for accounting purposes and
    that are made 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;loans or advances to employees made in
    the ordinary course of business of the Company or such
    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">(7)&nbsp;stock, obligations or securities
    received in settlement of debts created in the ordinary course
    of business and owing to the Company or any Restricted
    Subsidiary or in satisfaction of judgments;
    </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 Person to the extent such Investment
    represents the non-cash portion of the consideration received
    for an Asset Disposition as permitted pursuant to the covenant
    described under &#147;&#151;&nbsp;Certain Covenants&nbsp;&#151;
    Limitation on Sales of Assets and Subsidiary Stock&#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">(9)&nbsp;any Person where such Investment was
    acquired by the Company or any of its Restricted Subsidiaries
    (a)&nbsp;in exchange for any other Investment or accounts
    receivable held by the Company or any such Restricted Subsidiary
    in connection with or as a result of a bankruptcy, workout,
    reorganization or recapitalization of the issuer of such other
    Investment or accounts receivable or (b)&nbsp;as a result of a
    foreclosure by the Company or any of its Restricted Subsidiaries
    with respect to any secured Investment or other transfer of
    title with respect to any secured Investment in default;
    </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 Person to the extent such
    Investment consists of Hedging Obligations otherwise permitted
    under the covenant described under &#147;&#151;&nbsp;Certain
    Covenants&nbsp;&#151; Limitation on Indebtedness&#148;;&nbsp;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">(11)&nbsp;additional Investments made after the
    Issue Date in an aggregate amount which, together with all other
    Investments made pursuant to this clause&nbsp;(10)&nbsp;that are
    then outstanding, do not exceed the greater of (a)
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    and (b) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of Total Assets.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Person&#148; means any individual,
corporation, partnership, limited liability company, joint
venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision
thereof or any other entity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Preferred Stock&#148;, as applied to the
Capital Stock of any Person, means 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 shares of Capital Stock of any
other class of such Person.
</FONT>

<P align="center"><FONT size="2">145
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;principal&#148; of a Note means the
principal of the Note plus the premium, if any, payable on the
Note which is due or overdue or is to become due at the relevant
time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Pro Forma Cost Savings&#148; means, with
respect to any period, the reduction in costs or other
adjustments (including, solely in the case of clause&nbsp;(3)(i)
below, an annualization of EBITDA), as applicable, that are
</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;directly attributable to an asset
    acquisition and calculated on a basis that is consistent with
    Regulation&nbsp;S-X under the Securities Act in effect and as
    applied as of the Issue 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;implemented by the Company or the
    business that was the subject of any such asset acquisition, in
    each case, within one year prior to the date of the asset
    acquisition and that are supportable and quantifiable by the
    underlying accounting records of the Company or such
    business,&nbsp;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;in connection with any acquisition of
    restaurants or a Person engaged in a Related Business,
    (i)&nbsp;the EBITDA reasonably estimated by the Company&#146;s
    chief financial officer associated with any such acquired
    restaurants that were operated for at least three months but no
    longer than twelve months by the business that was the subject
    of any such acquisition and (ii)&nbsp;cost savings reasonably
    estimated by the Company&#146;s chief financial officer and
    reasonably expected by such chief financial officer to be
    implemented within six months of the consummation of such
    acquisition directly attributable to closing such acquired
    restaurants or to headquarters consolidation, including
    consolidation of functions.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">as if, in the case of each of clauses&nbsp;(1),
(2)&nbsp;and (3), all such reductions in costs or other
adjustments had been effected as of the beginning of such period.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Refinance&#148; means, in respect of any
Indebtedness, to refinance, extend, renew, refund, repay,
prepay, redeem, defease or retire, or to issue other
Indebtedness in exchange or replacement for, in whole or in
part, such indebtedness. &#147;Refinanced&#148; and
&#147;Refinancing&#148; shall have correlative meanings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Refinancing Indebtedness&#148; means
Indebtedness that Refinances any Indebtedness of the Company or
any Restricted Subsidiary existing on the Issue Date or Incurred
in compliance with the Indenture, including Indebtedness that
Refinances Refinancing Indebtedness; provided, however, 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;such Refinancing Indebtedness has a
    Stated Maturity no earlier than the Stated Maturity of the
    Indebtedness being Refinanced;
    </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 Refinancing Indebtedness has an
    Average Life at the time such Refinancing Indebtedness is
    Incurred that is equal to or greater than the Average Life of
    the Indebtedness being Refinanced;&nbsp;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 Refinancing Indebtedness has an
    aggregate principal amount (or if Incurred with original issue
    discount, an aggregate issue price) that is equal to or less
    than the aggregate principal amount (or if Incurred with
    original issue discount, the aggregate accreted value) then
    outstanding or committed (plus (i)&nbsp;accrued interest on the
    Indebtedness being Refinanced not to exceed the amount of such
    accrued interest for one fiscal quarter and (ii)&nbsp;fees and
    expenses, including any premium and defeasance costs) under the
    Indebtedness being Refinanced;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">provided further, however, that Refinancing
Indebtedness shall not include (A) Indebtedness of a Subsidiary
that Refinances Indebtedness of the Company or (B) Indebtedness
of the Company or a Restricted Subsidiary that Refinances
Indebtedness of an Unrestricted Subsidiary.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Refinancing Transactions&#148; means the
offering of the Notes, the Class&nbsp;A common stock, the
Class&nbsp;B common stock, the exchange of Class&nbsp;A common
stock and Notes for Class&nbsp;B common stock, the amendment and
restatement of the Credit Agreement, the use of the proceeds
from these transactions to repurchase and/or redeem the
Company&#146;s 13&nbsp;7/8%&nbsp;Notes and repurchase the
Buffets Existing Notes and the entering into of the Investor
Rights Agreement and the performance of all obligations
thereunder.
</FONT>

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</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Related Business&#148; means any business
in which the Company was engaged on the Issue Date and any
business that in the good faith judgment of the Board of
Directors is related, ancillary or complementary thereto, arises
therefrom or is necessary or desirable to facilitate such
business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Related Party&#148; means (1)&nbsp;any
controlling stockholder, controlling member, general partner,
majority owned Subsidiary, or spouse or immediate family member
(in the case of an individual) of any Permitted Holder,
(2)&nbsp;any estate, trust, corporation, partnership or other
entity, the beneficiaries, stockholders, partners, owners or
Persons holding a controlling interest of which consist solely
of one or more Permitted Holders and/or such other Persons
referred to in the immediately preceding clause&nbsp;(1) or
(3)&nbsp;any executor, administrator, trustee, manager, director
or other similar fiduciary of any Person referred to in the
immediately preceding clause&nbsp;(2) acting solely in such
capacity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Representative&#148; means with respect to
a Person any trustee, agent or representative (if any) for an
issue of Senior Indebtedness of such Person.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Restricted Payment&#148; with respect to
any 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;the declaration or payment of any
    dividends or any other distributions of any sort in respect of
    its Capital Stock (including any payment in connection with any
    merger or consolidation involving such Person) or similar
    payment to the direct or indirect holders of its Capital Stock
    (other than dividends or distributions payable solely in its
    Capital Stock (other than Disqualified Stock) and dividends or
    distributions payable solely to the Company or a Restricted
    Subsidiary, and other than pro rata dividends or other
    distributions made by a Subsidiary that is not a Wholly Owned
    Subsidiary to minority stockholders (or owners of an equivalent
    interest in the case of a Subsidiary that is an entity other
    than a corporation));
    </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 purchase, redemption or other
    acquisition or retirement for value of any Capital Stock of the
    Company held by any Person or of any Capital Stock of a
    Restricted Subsidiary held by any Affiliate of the Company
    (other than a Restricted Subsidiary), including the exercise of
    any option to exchange any Capital Stock (other than into
    Capital Stock of the Company that is not Disqualified 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;the purchase, repurchase, redemption,
    defeasance or other acquisition or retirement for value, prior
    to scheduled maturity, scheduled repayment or scheduled sinking
    fund payment of any Subordinated Obligations of the Company
    (other than the purchase, repurchase or other acquisition of
    Subordinated Obligations of the Company purchased in
    anticipation of satisfying a sinking fund obligation, principal
    installment or final maturity, in each case due within one year
    of the date of such purchase, repurchase or other
    acquisition);&nbsp;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;the making of any Investment (other than
    a Permitted Investment) in any Person.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Restricted Subsidiary&#148; of any Person
means any Subsidiary of such Person that is not an Unrestricted
Subsidiary.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Restructuring Expenses&#148; means losses,
expenses and charges incurred in connection with restructuring
within the Company and/or one or more of its Restricted
Subsidiaries, including in connection with integration of
acquired businesses or Persons, disposition of one or more
Subsidiaries or businesses, exiting of one or more lines of
business and relocation or consolidation of facilities,
including severance, lease termination and other
non-ordinary-course, non-operating costs and expenses in
connection therewith.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Revolving Credit Facility&#148; means the
revolving credit facility and letter of credit facility
contained in the Credit Agreement and any other facilities or
financing arrangements (including commercial paper facilities,
revolving credit loans, term loans, receivables financing
letters of credit, or any debt securities or other form of debt,
convertible debt or exchangeable debt financing) that Refinance
or replace, in whole or in part, any such revolving credit
facility, letter of credit facility or financing arrangement.
</FONT>

<P align="center"><FONT size="2">147
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Sale/ Leaseback Transaction&#148; means an
arrangement relating to property owned by the Company or a
Restricted Subsidiary on the Issue Date or thereafter acquired
by the Company or a Restricted Subsidiary whereby the Company or
a Restricted Subsidiary transfers such property to a Person and
the Company or a Restricted Subsidiary leases it from such
Person.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;SEC&#148; means the U.S.&nbsp;Securities
and Exchange Commission.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Secured Indebtedness&#148; means any
Indebtedness of the Company secured by a Lien.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Senior Indebtedness&#148; means with
respect to any Person:
</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 such Person, whether
    outstanding on the Issue Date or thereafter Incurred;&nbsp;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;accrued and unpaid interest (including
    interest accruing on or after the filing of any petition in
    bankruptcy or for reorganization relating to such Person whether
    or not post-filing interest is allowed in such proceeding) in
    respect of (A)&nbsp;indebtedness of such Person for money
    borrowed and (B)&nbsp;indebtedness evidenced by notes,
    debentures, bonds or other similar instruments for the payment
    of which such Person is responsible or liable
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">unless, in the case of clauses&nbsp;(1) and (2),
in the instrument creating or evidencing the same or pursuant to
which the same is outstanding, it is provided that such
obligations are subordinate or pari passu in right of payment to
the Notes or the Subsidiary Guaranty of such Person, as the case
may be; provided, however, that Senior Indebtedness 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;any obligation of such Person to any
    Subsidiary 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;any liability for Federal, state, local
    or other taxes owed or owing by 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">(3)&nbsp;any accounts payable or other liability
    to trade creditors arising in the ordinary course of business
    (including guarantees thereof or instruments evidencing such
    liabilities);
    </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 Indebtedness of such Person (and any
    accrued and unpaid interest in respect thereof) which is
    subordinate or junior in right of payment to any other
    Indebtedness or other obligation 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;that portion of any Indebtedness which
    at the time of Incurrence is Incurred in violation of the
    Indenture.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Senior Subordinated Indebtedness&#148;
means, with respect to a Person, the Notes (in the case of the
Company), the Subsidiary Guaranty (in the case of a Subsidiary
Guarantor) and any other Indebtedness of such Person that
specifically provides that such Indebtedness is to rank pari
passu with the Notes or such Subsidiary Guaranty, as the case
may be, in right of payment and is not subordinated by its terms
in right of payment to any Indebtedness or other obligation of
such Person which in each case is not Senior Indebtedness of
such Person.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Significant Subsidiary&#148; means any
Restricted Subsidiary that would be a &#147;Significant
Subsidiary&#148; of the Company within the meaning of
Rule&nbsp;1-02 under Regulation&nbsp;S-X promulgated by the SEC.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Stated Maturity&#148; means, with respect
to any security, the date specified in such security as the
fixed date on which the final payment of principal of such
security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for
the repurchase of such security at the option of the holder
thereof upon the happening of any contingency unless such
contingency has occurred).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Subordinated Obligation&#148; means, with
respect to a Person, any Indebtedness of such Person (whether
outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Notes or a
Subsidiary Guaranty of such Person, as the case may be, pursuant
to a written agreement to that effect.
</FONT>

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</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Subsidiary&#148; means, with respect to any
Person, any corporation, association, partnership or other
business entity of which more than 50% of the total voting power
of shares of Voting Stock is at the time owned or controlled,
directly or indirectly, by:
</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;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">(2)&nbsp;such Person and one or more Subsidiaries
    of such Person;&nbsp;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;one or more Subsidiaries of such Person.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Subsidiary Guarantor&#148; means each
Subsidiary of the Company that executes the Indenture as a
guarantor and each other Subsidiary of the Company that
thereafter guarantees the Notes pursuant to the terms of the
Indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Subsidiary Guaranty&#148; means a Guarantee
by a Subsidiary Guarantor of the Company&#146;s obligations with
respect to the Notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Temporary Cash Investments&#148; means any
of the following:
</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 investment in direct obligations of
    the United States of America or any agency thereof or
    obligations guaranteed by the United States of America or any
    agency 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;investments in time deposit accounts,
    certificates of deposit and money market deposits maturing
    within one year of the date of acquisition thereof issued by a
    bank or trust company which is organized under the laws of the
    United States of America, any state thereof or any foreign
    country recognized by the United States of America, and which
    bank or trust company has capital, surplus and undivided profits
    aggregating in excess of $50.0&nbsp;million (or the foreign
    currency equivalent thereof) and has outstanding debt which is
    rated &#147;A&#148; (or such similar equivalent rating) or
    higher by at least one nationally recognized statistical rating
    organization (as defined in Rule&nbsp;436 under the Securities
    Act) or any money-market fund sponsored by a registered broker
    dealer or mutual fund distributor;
    </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;repurchase obligations with a term of
    not more than 30&nbsp;days for underlying securities of the
    types described in clause&nbsp;(1) above entered into with a
    bank meeting the qualifications described in clause&nbsp;(2)
    above;
    </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;investments in commercial paper,
    maturing not more than 90&nbsp;days after the date of
    acquisition, issued by a person (other than an Affiliate of the
    Company) organized and in existence under the laws of the United
    States of America or any foreign country recognized by the
    United States of America with a rating at the time as of which
    any investment therein is made of &#147;P-1&#148; (or higher)
    according to Moody&#146;s Investors Service, Inc. or
    &#147;A-1&#148; (or higher) according to Standard and
    Poor&#146;s, a division of the McGraw-Hill Companies;&nbsp;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;investments in securities with
    maturities of six months or less from the date of acquisition
    issued or fully guaranteed by any state, commonwealth or
    territory of the United States of America, or by any political
    subdivision or taxing authority thereof, and rated at least
    &#147;A&#148; by Standard&nbsp;&#38; Poor&#146;s, a division of
    the McGraw-Hill Companies, or &#147;A&#148; by Moody&#146;s
    Investors Service, Inc.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Term Loan&nbsp;Facility&#148; means the
term loan facility initially contained in the Credit Agreement
and any other facility or financing arrangement (including
commercial paper facilities, revolving credit loans, term loans,
receivables financing, letters of credit, or any debt securities
or other form of debt, convertible debt or exchangeable debt
financing) that Refinances or replaces, in whole or in part, any
such facility or financing arrangement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Total Assets&#148; means the total
consolidated assets of the Company and its Restricted
Subsidiaries, as set forth on the Company&#146;s consolidated
balance sheet for the most recently ended fiscal quarter for
which internal financial statements are available.
</FONT>

<P align="center"><FONT size="2">149
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Unrestricted Subsidiary&#148; 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 Subsidiary of the Company that at
    the time of determination shall be designated an Unrestricted
    Subsidiary by the Board of Directors of the Company in the
    manner provided below;&nbsp;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;any Subsidiary of an Unrestricted
    Subsidiary.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Board of Directors of the Company may
designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary or any of its Subsidiaries
owns any Capital Stock or Indebtedness of, or holds any Lien on
any property of, the Company or any other Subsidiary of the
Company that is not a Subsidiary of the Subsidiary to be so
designated; provided, however, that either (A)&nbsp;the
Subsidiary to be so designated has total assets of $1,000 or
less or (B)&nbsp;if such Subsidiary has assets greater than
$1,000, such designation would be permitted under the covenant
described under &#147;&#151;&nbsp;Certain Covenants&nbsp;&#151;
Limitation on Restricted Payments.&#148; In no event may the
Company designate Buffets to be an Unrestricted Subsidiary.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Board of Directors of the Company may
designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that immediately after giving
effect to such designation (A) (i)&nbsp;the Company could Incur
$1.00 of additional Indebtedness under
paragraph&nbsp;(a)&nbsp;of the covenant described under
&#147;&#151;&nbsp;Certain Covenants&nbsp;&#151; Limitation on
Indebtedness&#148; or (ii)&nbsp;the Consolidated Coverage Ratio
for the Company and its Restricted Subsidiaries would be greater
than the Consolidated Coverage Ratio for the Company and its
Restricted Subsidiaries immediately before giving effect to such
designation and (B)&nbsp;no Default shall have occurred and be
continuing. Any such designation by the Board of Directors of
the Company shall be evidenced to the Trustee by promptly filing
with the Trustee a copy of the resolution of the Board of
Directors of the Company giving effect to such designation and
an officers&#146; certificate certifying that such designation
complied with the foregoing provisions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;U.S.&nbsp;Government Obligations&#148;
means direct obligations (or certificates representing an
ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United
States of America is pledged and which are not callable at the
issuer&#146;s option.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Voting Stock&#148; of a Person means all
classes of Capital Stock or other interests (including
partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or
trustees thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;Wholly Owned Subsidiary&#148; means a
Restricted Subsidiary all the Capital Stock of which (other than
directors&#146; qualifying shares) is owned by the Company or
one or more Wholly Owned Subsidiaries.
</FONT>

<P align="center"><FONT size="2">150
</FONT>

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<DIV align="left">
<A name='122'></A>
</DIV>

<!-- link1 "IDSs ELIGIBLE FOR FUTURE SALE" -->

<P align="center">
<B><FONT size="2">IDSs ELIGIBLE FOR FUTURE SALE</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Future sales or the availability for sale of
substantial amounts of IDSs or shares of our Class&nbsp;A common
stock or a significant principal amount of our senior
subordinated notes in the public market could adversely affect
prevailing market prices and could impair our ability to raise
capital through future sales of our securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon completion of this
offering, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs
will be outstanding. The number of IDSs to be outstanding after
completion of this offering excludes IDSs issuable upon the
conversion of shares of our Class&nbsp;B common stock issued in
exchange for shares of our common stock owned by our existing
stockholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Of these securities,
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs
sold in this offering will be freely tradable without
restriction or further registration under the Securities Act,
except for any IDSs that may be acquired by an affiliate of ours
as that term is defined in Rule&nbsp;144 under the Securities
Act, which will be subject to the resale limitations of
Rule&nbsp;144. The
remaining &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs
outstanding will be restricted securities, as that term is used
in Rule&nbsp;144, and may in the future be sold without
restriction under the Securities Act to the extent permitted by
Rule&nbsp;144 or any reoffer prospectus under the Securities Act.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In general, under Rule&nbsp;144 as currently in
effect, a person (or persons whose IDSs are aggregated) who has
beneficially owned its, his or her IDSs or the underlying shares
of Class&nbsp;A common stock for at least one year from the date
such securities were acquired from us or an affiliate of ours
would be entitled to sell within any three-month period a number
of IDSs or underlying shares of Class&nbsp;A common stock that
does not exceed the greater of one percent of the then
outstanding IDSs or underlying shares of Class&nbsp;A common
stock, respectively, and the average weekly trading volume of
the IDSs or underlying shares of Class&nbsp;A common stock,
respectively, during the four calendar weeks preceding a sale by
such person. Sales under Rule&nbsp;144 are also subject to
certain manner of sale provisions, notice requirements and the
availability of current public information about us. Under
Rule&nbsp;144, however, a person who has held restricted
securities for a minimum of two years from the later of the date
such securities were acquired from us or an affiliate of ours
and who is not, and for the three months prior to the sale of
such restricted securities has not been, an affiliate of ours,
is free to sell such restricted securities without regard to
volume, manner of sale and the other limitations contained in
Rule&nbsp;144. The foregoing summary of Rule&nbsp;144 is not
intended to be a complete discussion thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We, our directors, executive officers and certain
of our existing stockholders have agreed not to offer, sell,
contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Securities and Exchange Commission
a registration statement under the Securities Act relating to,
any IDSs, shares of our Class&nbsp;A common stock, shares of our
Class&nbsp;B common stock or senior subordinated notes or any
securities convertible into or exchangeable or exercisable for
any such securities, or publicly disclose the intention to make
any offer, sale, pledge, disposition or filing, without the
prior written consent of Credit Suisse First Boston LLC for a
period of 180&nbsp;days after the date of this prospectus,
subject to certain exceptions.
</FONT>

<P align="center"><FONT size="2">151
</FONT>

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<DIV align="left">
<A name='123'></A>
</DIV>

<!-- link1 "MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES" -->

<P align="center">
<B><FONT size="2">MATERIAL U.S.&nbsp;FEDERAL INCOME TAX
CONSEQUENCES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following discussion describes the material
U.S.&nbsp;federal income tax consequences associated with the
purchase, ownership, and disposition of IDSs, senior
subordinated notes and Class&nbsp;A common stock as of the date
hereof by U.S.&nbsp;Holders (as defined below) and
Non-U.S.&nbsp;Holders (as defined below). Except where noted,
this discussion deals only with IDSs, senior subordinated notes
and common stock held as capital assets within the meaning of
Section&nbsp;1221 of the Internal Revenue Code of 1986, as
amended (the&nbsp;&#147;Code&#148;) by holders who acquired IDSs
or senior subordinated notes upon their original issuance at
their initial offering price. This discussion does not cover all
aspects of U.S.&nbsp;federal income taxation that may be
relevant to the acquisition, ownership or disposition of IDSs,
notes and Class&nbsp;A common stock by prospective investors in
light of their particular circumstances. In particular, this
discussion does not address all of the tax considerations that
may be relevant to certain types of investors subject to special
treatment under U.S.&nbsp;federal income tax laws, such as:
</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">dealers in securities or currencies,
    </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">banks and financial institutions,
    </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">broker-dealers,
    </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">regulated investment companies,
    </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 investment trusts,
    </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">tax-exempt entities,
    </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">insurance companies,
    </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">persons holding IDSs, senior subordinated notes
    or Class&nbsp;A common stock as a part of a hedging, integrated,
    conversion or constructive sale transaction or a straddle,
    </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">traders in securities that elect to use a
    mark-to-market method of accounting for their securities
    holdings,
    </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">persons liable for alternative minimum tax,
    </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">investors in pass-through entities,&nbsp;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">U.S.&nbsp;Holders (as defined below) whose
    &#147;functional currency&#148; is not the U.S.&nbsp;dollar.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Furthermore, the discussion below is based upon
the provisions of the Code, existing and proposed Treasury
regulations promulgated thereunder and administrative rulings,
official pronouncements and judicial interpretations thereof,
all as of the date hereof, and such authorities may be repealed,
revoked, modified or subject to differing interpretations,
possibly on a retroactive basis, so as to result in
U.S.&nbsp;federal income tax consequences different from those
discussed below. The statements of law and legal conclusions in
this discussion constitute the opinion of our counsel, Paul,
Weiss, Rifkind, Wharton&nbsp;&#38; Garrison LLP. the opinion is
based in part on facts described in this prospectus and on
certain other opinions, assumptions, representations and
determinations. Any alteration or incorrectness of such facts,
opinions, assumptions, representations or determinations could
adversely affect such opinion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A &#147;U.S.&nbsp;Holder&#148; of IDSs, senior
subordinated notes or Class&nbsp;A common stock means a holder
that is for U.S.&nbsp;federal income tax purposes:
</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">an individual citizen or resident of the United
    States,
    </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 corporation (or other entity taxable as a
    corporation) created or organized in or under the laws of the
    United States or any state thereof or the District of Columbia,
    </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">an estate the income of which is subject to
    U.S.&nbsp;federal income taxation regardless of its
    source,&nbsp;or
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">152
</FONT>

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<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 trust if it (1)&nbsp;is subject to the primary
    supervision of a court within the United States and one or more
    U.S.&nbsp;persons have the authority to control all substantial
    decisions of the trust or (2)&nbsp;has a valid election in
    effect under applicable Treasury regulations to be treated as a
    U.S.&nbsp;person.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If a partnership or other entity or arrangement
treated as a partnership for U.S.&nbsp;federal income tax
purposes holds IDSs, senior subordinated notes or Class&nbsp;A
common stock, the tax treatment of a partner will generally
depend upon the status of the partner and the activities of the
partnership. If you are a partner of a partnership holding IDSs,
senior subordinated notes or Class&nbsp;A common stock, we urge
you to consult your own tax advisor.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No statutory, administrative or judicial
authority directly addresses the treatment of IDSs or
instruments similar to IDSs for U.S.&nbsp;federal income tax
purposes. In addition, no rulings have been or will be sought
from the Internal Revenue Service (the &#147;IRS&#148;) with
respect to any of the U.S.&nbsp;federal income tax issues
discussed in this summary. As a result, we cannot assure you
that the IRS or the courts will agree with the tax consequences
described herein. A different treatment from that assumed below
could adversely affect the amount, timing and character of
income, gain or loss in respect of an investment in the IDSs,
and, in the case of Non-U.S.&nbsp;Holders (as defined below),
could subject such holders to U.S.&nbsp;federal withholding
taxes with regard to the senior subordinated notes in the same
manner as they will be with regard to our common stock. Payments
to Non-U.S.&nbsp;Holders would not be grossed-up for any such
taxes. In addition, a different treatment could result in the
loss by us of all or part of the deduction for interest paid on
the senior subordinated notes. If you are considering the
purchase of IDSs or senior subordinated notes, we urge you to
consult your own tax advisor concerning the particular
U.S.&nbsp;federal income tax consequences to you of the
purchase, ownership and disposition of IDSs, senior subordinated
notes, or Class&nbsp;A common stock as well as any consequences
to you arising under the laws of any other taxing jurisdiction.
</FONT>

<P align="left">
<B><FONT size="2">Consequences to U.S.&nbsp;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></TD>
    <TD>
    <B><I><FONT size="2">IDSs</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Allocation of Purchase
Price.</FONT></I><FONT size="2"> Your acquisition of IDSs should
be treated for U.S.&nbsp;federal income tax purposes as if you
actually purchased the shares of our Class&nbsp;A common stock
and the senior subordinated notes underlying the IDSs and, by
purchasing IDSs, you will agree to such treatment. The remainder
of this discussion assumes that the acquisition of IDSs will be
treated as an acquisition of shares of our common stock and
senior subordinated notes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The purchase price of each IDS will be allocated
between the share of Class&nbsp;A common stock and the senior
subordinated note in proportion to their respective fair market
values at the time of purchase. Such allocation will establish
your initial tax basis in the share of Class&nbsp;A common stock
and the senior subordinated note. We expect to report the
initial fair market value of each share of common stock as
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
the initial fair market value of each senior subordinated note
as
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
and by purchasing IDSs, you will agree to such allocation and
that you will not take a contrary position for any purpose,
including tax reporting purposes. This allocation, however, is
not binding on the IRS, and the IRS may challenge this
allocation. If this allocation is not respected, it is possible
that the senior subordinated notes will be treated as having
been issued with more than a de minimis amount of original issue
discount (referred to as OID), or amortizable bond premium, and
your initial tax basis in our Class&nbsp;A common stock would be
higher, or lower, respectively. You generally would have to
include original issue discount in income in advance of the
receipt of cash attributable to that income and would be able to
elect to amortize bond premium over the remaining term of the
notes. The remainder of this discussion assumes that this
allocation of the purchase price will be respected.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Separation and
Recombination.</FONT></I><FONT size="2"> If you separate an IDS
into a share of common stock and a senior subordinated note or
recombine a share of common stock and a senior subordinated note
to form an IDS, you generally should not recognize gain or loss
upon the separation of an IDS or a recombination of a share of
common stock and senior subordinated note into an IDS. You will
continue to take into account items of income or deduction
otherwise includible or deductible, with respect to the share of
Class&nbsp;A
</FONT>

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<DIV align="left">
<FONT size="2">common stock and the senior subordinated note,
and your tax basis in the share of Class&nbsp;A common stock and
the senior subordinated note will not be affected by the
separation or recombination.
</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">Senior Subordinated Notes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Characterization of Senior Subordinated
Notes.</FONT></I><FONT size="2"> Our counsel, Paul, Weiss,
Rifkind, Wharton&nbsp;&#38; Garrison LLP, is of the opinion that
the senior subordinated notes should be treated as debt for
U.S.&nbsp;federal income tax purposes, and based upon that
opinion, we believe that the senior subordinated notes should be
so treated. A copy of our counsel&#146;s opinion will be filed
as an exhibit to the registration statement of which this
prospectus is a part. Such opinion is based in part on facts
described in this prospectus and on various other opinions,
assumptions, on representations and determinations, (including
those discussed in more detail in the following paragraphs). Any
alteration or incorrectness of such facts, opinions,
assumptions, representations or determinations could adversely
affect such opinion, and such opinion is not binding on the IRS
or the courts. We intend and, by acquiring senior subordinated
notes (directly or in the form of IDSs), each holder agrees, to
treat the senior subordinated notes as our indebtedness for all
purposes, including tax purposes. Assuming such treatment is
respected, stated interest on the senior subordinated notes will
generally be taxable to you as ordinary income at the time it is
paid or accrued in accordance with your method of accounting for
U.S.&nbsp;federal income tax purposes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The determination of whether an instrument is
treated as debt or equity for U.S.&nbsp;federal income tax
purposes is based on all relevant facts and circumstances. There
is no clear statutory definition of debt and its
characterization is governed by principles developed in case
law, which analyzes numerous factors (with no one factor being
dispositive) that are intended to identify the economic
substance of the investor&#146;s interest in the corporation.
Our determination that the senior subordinated notes should be
treated as debt for U.S.&nbsp;federal income tax purposes, and
the opinions of counsel to this effect referred to above, rely
upon certain representations and determinations by us and
Duff&nbsp;&#38; Phelps, LLC (&#147;Duff &#38; Phelps&#148;)
including, without limitation, representations and
determinations substantially to the effect that:
</FONT>
<P>

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<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 principal amount, term, interest rate, issue
    price, security and other material provisions of the senior
    subordinated notes, when taken together and considered as a
    whole, are commercially reasonable and are substantially similar
    to the terms to which an unrelated third party lender bargaining
    at arm&#146;s length would reasonably agree;
    </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 aggregate principal amount of the senior
    subordinated notes in relation to the aggregate amount of our
    capital is commercially reasonable under the circumstances; 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 ratio of our aggregate outstanding
    indebtedness to the fair market value of our equity following
    the Transactions will not
    exceed &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to&nbsp;1.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The opinion of Duff&nbsp;&#38; Phelps relies on,
and assumes without independent investigation the accuracy of,
the financial data provided by us and the descriptions of the
securities set forth in this prospectus. Such opinion is being
provided solely for the purpose of assisting us and our special
counsel regarding certain U.S.&nbsp;federal income tax
determinations and opinions referred to in this prospectus and
certain financial accounting matters. Therefore, such opinion
does not constitute a recommendation to invest in our
securities, an expression of a viewpoint as to our business
prospects or the fairness or merits of the offering.
Duff&nbsp;&#38; Phelps is not providing any opinions as to any
legal questions or tax and accounting matters. In addition, the
opinions of Duff&nbsp;&#38; Phelps as to the commercial
reasonableness and valuation of our securities are based on the
comparison of our securities and the offering with other
securities and transactions deemed comparable, and valuation
methodologies deemed appropriate, by Duff&nbsp;&#38; Phelps. The
opinion of Duff&nbsp;&#38; Phelps is rendered at, and speaks
only as of, the closing of this offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our counsel&#146;s opinion also relies on our
representation that we expect to make all interest and principal
payments on the senior subordinated notes in accordance with
their terms.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In light of the representations and
determinations described above and their relevance to several of
the factors analyzed in case law, and taking into account the
facts and circumstances relating to the issuance of the senior
subordinated notes, we (and our counsel) are of the view that
the senior
</FONT>

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<DIV align="left">
<FONT size="2">subordinated notes should be treated as debt for
U.S.&nbsp;federal income tax purposes. However, there is no
authority that directly addresses the tax treatment of
securities with terms substantially similar to the terms of the
senior subordinated notes or offered under circumstances such as
the offering (i.e., offered as a unit consisting of senior
subordinated notes and Class&nbsp;A common stock). In light of
this absence of direct authority, neither we nor our counsel can
conclude with certainty that the senior subordinated notes will
be treated as debt for U.S.&nbsp;federal income tax purposes.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the senior subordinated notes were treated as
equity rather than debt for U.S.&nbsp;federal income tax
purposes, then the stated interest on the senior subordinated
notes would generally be treated as a dividend to the extent of
our current or accumulated earnings and profits (as determined
under U.S.&nbsp;federal income tax principles), but those
amounts would likely not qualify for the special rate described
below under &#147;&#151;&nbsp;Class&nbsp;A Common
Stock&nbsp;&#151; Dividends,&#148; and interest on the senior
subordinated notes would not be deductible by us for
U.S.&nbsp;federal income tax purposes. Our inability to deduct
interest on the senior subordinated notes could materially
increase our taxable income and, thus, our U.S.&nbsp;federal
income tax liability. This would reduce our after-tax cash flow,
thereby adversely affecting our ability to make payments on the
senior subordinated notes and the common stock. We would also be
liable for withholding taxes on any interest payments previously
made by us to Non-U.S.&nbsp;Holders that are recharacterized as
dividends for U.S.&nbsp;federal income tax purposes. In
addition, repayment of the senior subordinated notes by early
redemption or otherwise, would be treated as a redemption of
equity, which could be treated as a dividend to Holders pursuant
to applicable U.S.&nbsp;federal income tax rules.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Sale, Exchange or Retirement of Senior
Subordinated Notes.</FONT></I><FONT size="2"> Upon the sale,
exchange, retirement or other disposition of an IDS, you will be
treated as having sold, exchanged, retired or disposed of the
senior subordinated note underlying the IDS. Upon the sale,
exchange, retirement or other disposition of a senior
subordinated note, you will recognize gain or loss equal to the
difference between the portion of the proceeds allocable to, or
received for, your senior subordinated note (less an amount
equal to any accrued and unpaid interest which will be treated
as a payment of interest for U.S.&nbsp;federal income tax
purposes) and your adjusted tax basis in the senior subordinated
note. As described above under &#147;&#151;&nbsp;Consequences to
U.S.&nbsp;Holders&nbsp;&#151; IDSs&nbsp;&#151; Allocation of
Purchase Price,&#148; your tax basis in a senior subordinated
note generally will be the portion of the purchase price of your
IDSs allocable to the senior subordinated note, or your purchase
price for the senior subordinated note, as the case may be, less
any principal payments thereon and increased by any OID (if any)
previously included in your income. Such gain or loss will
generally be capital gain or loss. Capital gains of individuals
derived in respect of capital assets held for more than one year
are generally eligible for reduced rates of taxation. The
deductibility of capital losses is subject to limitations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Deferral of
Interest.</FONT></I><FONT size="2"> Based on our detailed
financial forecasts and the fact that we have no present plan or
intention to exercise our right to defer interest, we believe
the likelihood of deferral of interest payments on the senior
subordinated notes is remote under applicable U.S.&nbsp;Treasury
regulations. Under those U.S.&nbsp;Treasury regulations, a
&#147;remote&#148; contingency that stated interest will not be
timely paid is ignored in determining whether a debt instrument
is issued with OID. However, if we were to defer payments of
interest on the senior subordinated notes, you would be subject
to the special OID rules and would be required to include
amounts in income before the receipt of cash payments. If
deferral of any payment of interest were determined not to be
&#147;remote,&#148; then the senior subordinated notes would be
treated as issued with OID at the time of issuance. In such
case, all stated interest on the senior subordinated notes would
be treated as OID, with the consequence that all holders would
be required to include the yield on the senior subordinated
notes in income as it accrued on a constant yield basis,
possibly in advance of their receipt of the associated cash and
regardless of their method of tax accounting.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Additional
Issuances.</FONT></I><FONT size="2"> Subsequently issued senior
subordinated notes may be issued with more than a de minimis
amount of OID if they are issued at a discount to their face
value. The U.S.&nbsp;federal income tax consequences to you of
the subsequent issuance of senior subordinated notes with OID
(or any issuance of senior subordinated notes thereafter) upon a
subsequent offering by us of IDSs or senior subordinated notes,
including IDSs in exchange for Class&nbsp;B common stock, are
unclear. The indenture governing the senior subordinated notes
will provide that, in the event there is a subsequent issuance of
</FONT>

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<DIV align="left">
<FONT size="2">senior subordinated notes having terms that are
otherwise identical (other than issuance date) in all material
respects to the senior subordinated notes underlying the IDSs,
but that are issued with OID, each holder of senior subordinated
notes or IDSs, as the case may be, agrees that upon such
issuance or any issuance of senior subordinated notes thereafter
a portion of such holder&#146;s senior subordinated notes will
be automatically exchanged for a portion of the senior
subordinated notes acquired by the holders of such subsequently
issued senior subordinated notes. Consequently, immediately
following such subsequent issuance, without any action by such
holder each holder of subsequently issued senior subordinated
notes, held either as part of IDSs or separately, and each
holder of existing senior subordinated notes, held either as
part of IDSs or separately, will own senior subordinated notes
of each separate issuance in the same proportion as each other
holder, and, the records of any record holders of senior
subordinated notes will be amended to reflect these changes.
Because a subsequent issuance will affect the senior
subordinated notes in the same manner, regardless of whether
these senior subordinated notes are held as part of IDSs or
separately, the combination of senior subordinated notes and
shares of common stock to form IDSs, or the separation of IDSs,
should not affect your tax treatment.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The aggregate stated principal amount of senior
subordinated notes owned by each holder will not change as a
result of such subsequent issuance and exchange. Whether the
receipt of subsequently issued senior subordinated notes in
exchange for previously issued senior subordinated notes in this
automatic exchange constitutes a taxable exchange for
U.S.&nbsp;federal income tax purposes depends on whether the
subsequently issued senior subordinated notes are viewed as
differing materially from the senior subordinated notes
exchanged. Due to a lack of applicable guidance, it is unclear
whether the subsequently issued senior subordinated notes would
be viewed as differing materially from the previously issued
senior subordinated notes for this purpose. Consequently, it is
unclear whether an exchange of senior subordinated notes for
subsequently issued senior subordinated notes results in a
taxable exchange for U.S.&nbsp;federal income tax purposes, and
it is possible that the IRS might successfully assert that such
an exchange should be treated as a taxable exchange.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the IRS successfully asserted that an
automatic exchange following a subsequent issuance is a taxable
exchange, an exchanging holder would generally recognize gain or
loss in an amount equal to the difference between the fair
market value of the subsequently issued senior subordinated
notes received and such holder&#146;s adjusted tax basis in the
senior subordinated notes exchanged. See
&#147;&#151;&nbsp;Senior Subordinated Notes&nbsp;&#151; Sale,
Exchange or Retirement of Senior Subordinated Notes.&#148; It is
also possible that the IRS might successfully assert that any
such loss should be disallowed under the wash sale rules, in
which case the holder&#146;s basis in the subsequently issued
senior subordinated notes would be increased to reflect the
amount of the disallowed loss. In the case of a taxable
exchange, a holder&#146;s initial tax basis in the subsequently
issued senior subordinated notes received in the exchange would
be the fair market value of such senior subordinated notes on
the date of exchange (adjusted to reflect any disallowed loss)
and a holder&#146;s holding period in such senior subordinated
notes would begin on the day after such exchange.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Regardless of whether a subsequent issuance of
senior subordinated notes with OID results in a taxable
exchange, such issuance may increase the amount of OID, if any,
that you are required to accrue with respect to the senior
subordinated notes. Following any subsequent issuance of senior
subordinated notes with OID (or any issuance of senior
subordinated notes thereafter) and resulting exchange we (and
our agents) will report any OID on any subsequently issued
senior subordinated notes ratably among all holders of senior
subordinated notes and IDSs, and each holder of senior
subordinated notes and IDSs will, by purchasing IDSs, agree to
report OID in a manner consistent with this approach.
Consequently, holders that acquire senior subordinated notes in
this offering may be required to report OID as a result of a
subsequent issuance (even though they purchased senior
subordinated notes having no OID). This will generally result in
such holders reporting more interest income over the term of the
senior subordinated notes than they would have reported had no
such subsequent issuance occurred, and any such additional
interest income will be reflected as an increase in the tax
basis of the senior subordinated notes, which will generally
result in a capital loss (or reduced capital gain) upon a sale,
exchange or retirement of the senior subordinated notes.
However, the IRS may assert that any OID should be reported only
to the persons that initially acquired such subsequently issued
senior subordinated notes (and their transferees). In such
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">case, the IRS might further assert that, unless a
holder can establish that it is not such a person (or a
transferee thereof), all of the senior subordinated notes held
by such holder have OID. Any of these assertions by the IRS
could create significant uncertainties in the pricing of IDSs
and senior subordinated notes and could adversely affect the
market for IDSs and senior subordinated notes. You would be
required to include any OID in income as ordinary income as it
accrues, in advance of the receipt of cash attributable to such
income.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">It is possible that senior subordinated notes we
issue in a subsequent issuance will be issued at a discount to
their face value and, accordingly, may have &#147;significant
OID&#148; and thus be classified as &#147;applicable high yield
discount obligations.&#148; If any such senior subordinated
notes were so classified, a portion of the OID on such senior
subordinated notes could be nondeductible by us and the
remainder would be deductible only when paid. This treatment
would have the effect of increasing our taxable income and may
adversely affect our cash flow available for interest payments
and distributions to our equityholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Due to the complexity and uncertainty surrounding
the U.S.&nbsp;federal income tax treatment of subsequent
issuances and exchanges of senior subordinated notes,
prospective investors are urged to consult their tax advisors
regarding the applicable tax consequences to them in light of
their particular circumstances.
</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">Class&nbsp;A Common Stock</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Dividends.</FONT></I><FONT size="2"> The gross
amount of dividends paid to you will be treated as dividend
income to you to the extent of our current or accumulated
earnings and profits (as determined under U.S.&nbsp;federal
income tax principles). Such income will be includible in your
gross income as ordinary income. Distributions to you in excess
of earnings and profits will be treated first as a return of
capital that reduces your tax basis in the shares, and after
such tax basis is reduced to zero as gain from the sale or
exchange of shares of our Class&nbsp;A common stock. Dividends
paid through 2008 will generally be taxed to you at the rates
applicable to long-term capital gains, provided that a minimum
holding period and other requirements are satisfied. After 2008,
dividends will be taxed at the same rate as ordinary income.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Sale or Exchange of Class&nbsp;A Common
Stock.</FONT></I><FONT size="2"> Upon the sale, exchange,
retirement or other disposition of an IDS, you will be treated
as having sold, exchanged or disposed of the shares of our
Class&nbsp;A common stock underlying the IDS. Upon the sale,
exchange or other disposition of shares of our Class&nbsp;A
common stock, you will recognize capital gain or loss in an
amount equal to the difference between the portion of the
proceeds allocable to your shares of Class&nbsp;A common stock
and your tax basis in the shares of Class&nbsp;A common stock.
As described above under &#147;&#151;&nbsp;Consequences to U.S.
Holders&nbsp;&#151; IDSs&nbsp;&#151; Allocation of Purchase
Price,&#148; your tax basis in the shares of Class&nbsp;A common
stock generally will be the portion of the purchase price of
your IDSs allocable to the shares of Class&nbsp;A common stock,
less any prior distributions that reduced such basis. As
discussed above, capital gains of individuals derived with
respect to capital assets held for more than one year are
generally eligible for reduced rates of taxation. The
deductibility of capital losses is subject to 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></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 payments of principal, interest and dividends on
our senior subordinated notes and Class&nbsp;A common stock and
to the proceeds of sale of IDSs, our senior subordinated notes
and Class&nbsp;A common stock paid to a U.S.&nbsp;Holder other
than certain exempt recipients (such as corporations). A backup
withholding tax will apply to such payments if you fail to
provide a taxpayer identification number or certification of
other exempt status or fail to report in full dividend and
interest income.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Backup withholding is not an additional tax. Any
amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against your U.S.&nbsp;federal
income tax liability provided the required information is
furnished to the IRS.
</FONT>

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</FONT>

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<P align="left">
<B><FONT size="2">Consequences to
Non-U.S.&nbsp;Holders</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following discussion applies only to
Non-U.S.&nbsp;Holders. A &#147;Non-U.S.&nbsp;Holder&#148; is a
holder, other than an entity or arrangement classified as a
partnership for U.S.&nbsp;federal income tax purposes, that is
not a U.S.&nbsp;Holder. Special rules may apply to certain
Non-U.S.&nbsp;Holders, such as:
</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">U.S.&nbsp;expatriates,
    </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;controlled foreign corporations,&#148;
    </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;passive foreign investment companies,&#148;
    </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;foreign personal holding companies,&#148;
    </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">corporations that accumulate earnings to avoid
    U.S.&nbsp;federal income tax,&nbsp;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">investors in pass-through entities that are
    subject to special treatment under the Code.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Such Non-U.S.&nbsp;Holders are urged to consult
their own tax advisors to determine the U.S.&nbsp;federal,
state, local and other tax consequences that may be relevant to
them.
</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">Senior Subordinated Notes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Characterization of Senior Subordinated
Notes.</FONT></I><FONT size="2"> As discussed above under
&#147;&#151;&nbsp;Consequences to U.S.&nbsp;Holders&nbsp;&#151;
Senior Subordinated Notes&nbsp;&#151; Characterization of Senior
Subordinated Notes,&#148; we believe that the senior
subordinated notes should be treated as debt for
U.S.&nbsp;federal income tax purposes. However, no ruling on
this issue has been requested from the IRS and thus there can be
no assurance that such a position would be sustained if
challenged by the IRS. If the senior subordinated notes were
treated as equity rather than debt for U.S.&nbsp;federal income
tax purposes, then the senior subordinated notes would be
treated in the same manner as shares of our common stock as
described below under &#147;&#151;&nbsp;Consequences to
Non-U.S.&nbsp;Holders&nbsp;&#151; Class&nbsp;A Common
Stock,&#148; and payments on the senior subordinated notes
(which could include payments in redemption of the senior
subordinated notes) would be subject to U.S.&nbsp;federal
withholding taxes. Payments to Non-U.S.&nbsp;Holders would not
be grossed-up on account of any such taxes. In addition, we
would be liable for withholding taxes on any interest payments
previously made by us to Non-U.S.&nbsp;Holders that are
recharacterized as dividends for U.S.&nbsp;federal income tax
purposes as discussed under &#147;&#151;&nbsp;Consequences to
U.S.&nbsp;Holders&nbsp;&#151; Senior Subordinated
Notes&nbsp;&#151; Characterization of Senior Subordinated
Notes.&#148; The remainder of this discussion assumes that the
characterization of the senior subordinated notes as debt for
U.S.&nbsp;federal income tax purposes will be respected.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">U.S.&nbsp;Federal Withholding
Tax.</FONT></I><FONT size="2"> Subject to the discussion below
concerning backup withholding, no withholding of
U.S.&nbsp;federal income tax should be required with respect to
the payment of principal or interest (including OID, if any) on
a senior subordinated note owned by you under the
&#147;portfolio interest rule,&#148; provided that:
</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">you do not actually or constructively own 10% or
    more of the total combined voting power of all classes of our
    stock entitled to vote within the meaning of
    section&nbsp;871(h)(3) of the Code and the regulations
    thereunder,
    </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">you are not a controlled foreign corporation that
    is related to us through stock ownership,
    </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">you are not a bank whose receipt of interest on a
    senior subordinated note is described in
    section&nbsp;881(c)(3)(A) of the Code, 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">you satisfy the statement requirement (described
    generally below) set forth in section&nbsp;871(h) and
    section&nbsp;881(c) of the Code and the Treasury regulations
    thereunder.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To satisfy the requirement referred to in the
final bullet above, you, or a financial institution holding the
senior subordinated note on your behalf, must provide, in
accordance with specified procedures, our paying agent with a
statement to the effect that you are not a U.S.&nbsp;person.
Currently, these requirements will be met if (1)&nbsp;you
provide your name and address, and certify, under penalties of
perjury, that you are
</FONT>

<P align="center"><FONT size="2">158
</FONT>

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<DIV align="left">
<FONT size="2">not a U.S.&nbsp;person (which certification may
be made on an IRS Form&nbsp;W-8BEN), or (2)&nbsp;a financial
institution holding the note on your behalf certifies, under
penalties of perjury, that such statement has been received by
it and furnishes our paying agent with a copy thereof. The
statement requirement referred to in the final bullet above may
also be satisfied with other documentary evidence with respect
to a note held in an offshore account or through certain foreign
intermediaries.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If you cannot satisfy the requirements of the
&#147;portfolio interest rule&#148; described in the bullets
above, payments of interest (including payments in respect of
OID) made to you will be subject to a 30%&nbsp;withholding tax
unless you provide us or our paying agent, as the case may be,
with a properly executed:
</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">IRS Form&nbsp;W-8BEN claiming an exemption from
    or reduction in withholding under the benefit of an applicable
    income tax treaty, 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">IRS Form&nbsp;W-8ECI stating that interest paid
    on the senior subordinated note is not subject to withholding
    tax because it is effectively connected with your conduct of a
    trade or business in the United States.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Alternative documentation may be applicable in
special situations, such as in the case of
non-U.S.&nbsp;governments or flow-through entities organized
under non-U.S.&nbsp;law.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">U.S.&nbsp;Federal Income
Tax.</FONT></I><FONT size="2"> If you are engaged in a trade or
business in the United States and interest on the senior
subordinated note is effectively connected with the conduct of
such trade or business (and, if certain income tax treaties
apply, is attributable to a U.S.&nbsp;permanent establishment),
you, although exempt from the withholding tax discussed above
(provided the certification requirements described above are
satisfied), will be subject to U.S.&nbsp;federal income tax on
such interest on a net income basis in the same manner as if you
were a U.S.&nbsp;Holder. In addition, if you are a foreign
corporation, you may be subject to a branch profits tax equal to
30% (or lesser rate under an applicable income tax treaty) of
such amount, subject to adjustments.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Sale, Exchange or Retirement of
Notes.</FONT></I><FONT size="2"> Upon the sale, exchange,
retirement or other disposition of an IDS, you will be treated
as having sold, exchanged or disposed of the senior subordinated
note represented by the IDS. Any gain realized upon the sale,
exchange, retirement or other disposition of a senior
subordinated note generally will not be subject to
U.S.&nbsp;federal income tax unless:
</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">such gain is effectively connected with your
    conduct of a trade or business in the United States and, if
    certain tax treaties apply, is attributable to your
    U.S.&nbsp;permanent establishment,&nbsp;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">you are an individual, you are present in the
    United States for 183&nbsp;days or more in the taxable year of
    such sale, exchange, retirement or other disposition, and
    certain other conditions are met.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If you are an individual and are described in the
first bullet above, you will be subject to tax on the net gain
derived from the sale under regular graduated U.S.&nbsp;federal
income tax rates in the same manner as if you were a
U.S.&nbsp;Holder. If you are an individual and are described in
the second bullet above, you will be subject to a flat 30% tax
on the gain derived from the sale, which may be offset by
U.S.&nbsp;source capital losses (even though you are not
considered a resident of the United States). If you are a
foreign corporation and are described in the first bullet above,
you will be subject to tax on your gain under regular graduated
U.S.&nbsp;federal income tax rates in the same manner as if you
were a U.S.&nbsp;Holder and, in addition, may be subject to the
branch profits tax on your effectively connected earnings and
profits at a rate of 30% or at such lower rate as may be
specified by an applicable income tax treaty.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">U.S.&nbsp;Federal Estate
Tax.</FONT></I><FONT size="2"> A senior subordinated note
beneficially owned by an individual who at the time of death is
a Non-U.S.&nbsp;Holder should not be subject to
U.S.&nbsp;federal estate tax, provided that any payment made to
such individual on the senior subordinated notes would be
eligible for exemption from the 30% U.S.&nbsp;federal
withholding tax under the rules described above under
&#147;Consequences to Non-U.S.&nbsp;Holders&nbsp;&#151; Senior
Subordinated Notes&nbsp;&#151; U.S.&nbsp;Federal Withholding
Tax&#148; without regard to the statement requirement described
therein.
</FONT>

<P align="center"><FONT size="2">159
</FONT>

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<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">Class&nbsp;A Common Stock</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Dividends.</FONT></I><FONT size="2"> Dividends
paid to you generally will be subject to withholding of
U.S.&nbsp;federal income tax at a 30% rate or such lower rate as
may be specified by an applicable income tax treaty. However,
dividends that are effectively connected with your conduct of a
trade or business within the United States and, if certain tax
treaties apply, are attributable to your U.S.&nbsp;permanent
establishment, are not subject to the withholding tax, but
instead are subject to U.S.&nbsp;federal income tax on a net
income basis in the same manner as if you were a
U.S.&nbsp;Holder. Special certification and disclosure
requirements must be satisfied for effectively connected income
to be exempt from withholding. If you are a foreign corporation,
any such effectively connected dividends received by you may be
subject to an additional branch profits tax at a 30% rate or
such lower rate as may be specified by an applicable income tax
treaty.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If you wish to claim the benefit of an applicable
treaty rate (and also avoid backup withholding as discussed
below) for dividends, you will be required 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">complete IRS Form&nbsp;W-8BEN (or other
    applicable form) and certify under penalties of perjury that you
    are not a U.S.&nbsp;person and that you are entitled to the
    benefits of the applicable treaty, 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">if the shares of our common stock are held
    through certain foreign intermediaries, satisfy the relevant
    certification requirements of applicable U.S.&nbsp;Treasury
    regulations.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Special certification and other requirements
apply to certain Non-U.S.&nbsp;Holders that are entities rather
than individuals.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If you are eligible for a reduced rate of
U.S.&nbsp;withholding tax pursuant to an income tax treaty, you
may obtain a refund of any excess amounts withheld by timely
filing an appropriate claim for refund with the IRS.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Sale or Exchange of Common
Stock.</FONT></I><FONT size="2"> Upon the sale, exchange,
retirement or other disposition of IDSs, you will be treated as
having sold, exchanged or disposed of the shares of Class&nbsp;A
common stock underlying the IDSs. You generally will not be
subject to U.S.&nbsp;federal income tax with respect to gain
recognized on a sale or other disposition of shares of our
Class&nbsp;A common stock unless:
</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 gain is effectively connected with your
    conduct of a trade or business in the United States, or, if
    certain tax treaties apply, is attributable to your
    U.S.&nbsp;permanent establishment,
    </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">if you are an individual and hold shares of our
    common stock as a capital asset, you are present in the United
    States for 183 or more days in the taxable year of the sale or
    other disposition, and certain other conditions are met,&nbsp;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">we are or have been a &#147;U.S.&nbsp;real
    property holding corporation&#148; for U.S.&nbsp;federal income
    tax purposes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If you are an individual and are described in the
first bullet above, you will be subject to tax on the net gain
derived from the sale under regular graduated U.S.&nbsp;federal
income tax rates in the same manner as if you were a
U.S.&nbsp;Holder. If you are an individual and are described in
the second bullet above, you will be subject to a flat 30% tax
on the gain derived from the sale, which may be offset by
U.S.&nbsp;source capital losses (even though you are not
considered a resident of the United States). If you are a
foreign corporation and are described in the first bullet above,
you will be subject to tax on your gain under regular graduated
U.S.&nbsp;federal income tax rates in the same manner as if you
were a U.S.&nbsp;Holder and, in addition, may be subject to the
branch profits tax on your effectively connected earnings and
profits at a rate of 30% or at such lower rate as may be
specified by an applicable income tax treaty.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe we are not and do not anticipate
becoming a &#147;U.S.&nbsp;real property holding
corporation&#148; for U.S.&nbsp;federal income tax purposes.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">U.S.&nbsp;Federal Estate
Tax.</FONT></I><FONT size="2"> Shares of our Class&nbsp;A common
stock held by an individual Non-U.S.&nbsp;Holder at the time of
death will be included in such holder&#146;s gross estate for
U.S.&nbsp;federal estate tax purposes, unless an applicable
estate tax treaty provides otherwise.
</FONT>

<P align="center"><FONT size="2">160
</FONT>

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<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">Information Reporting and Backup
    Withholding</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The amount of interest payments and dividends
paid to you and the amount of tax, if any, withheld with respect
to such payments will be reported annually to the IRS. Copies of
the information returns reporting such interest payments,
dividends and withholding may also be made available to the tax
authorities in the country in which you reside under the
provisions of an applicable income tax treaty.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In general, backup withholding will be required
with respect to payments made by us or any paying agent to you,
unless a statement described in the fourth bullet under
&#147;&#151;&nbsp;Consequences to
Non-U.S.&nbsp;Holders&nbsp;&#151; Senior Subordinated
Notes&nbsp;&#151; U.S.&nbsp;Federal Withholding Tax&#148; has
been received (and we or the paying agent do not have actual
knowledge or reason to know that you are a U.S.&nbsp;person).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Information reporting and, depending on the
circumstances, backup withholding will apply to the proceeds of
a sale of IDSs, Class&nbsp;A common stock or senior subordinated
notes within the United States or conducted through U.S.-related
financial intermediaries unless a statement described in the
fourth bullet under &#147;&#151;&nbsp;Consequences to
Non-U.S.&nbsp;Holders&nbsp;&#151; Senior Subordinated
Notes&nbsp;&#151; U.S.&nbsp;Federal Withholding Tax&#148; has
been received (and we or the paying agent do not have actual
knowledge or reason to know that you are a U.S.&nbsp;person) or
you otherwise establish an exemption.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Backup withholding is not an additional tax. Any
amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against your U.S.&nbsp;federal
income tax liability provided the required information is
furnished to the IRS.
</FONT>

<P align="center"><FONT size="2">161
</FONT>

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<DIV align="left">
<A name='124'></A>
</DIV>

<!-- link1 "UNDERWRITING" -->

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the terms and subject to the conditions
contained in an underwriting agreement,
dated &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004, we have agreed to sell to the underwriters named below,
for whom Credit Suisse First Boston LLC, Banc of America
Securities LLC and CIBC World Markets Corp. are acting as
representatives, the following respective numbers of IDSs and
aggregate principal amount of separate senior subordinated notes:
</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="56%"><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="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="11%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Aggregate</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Principal</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount of Separate Senior</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" align="center" nowrap><B><FONT size="1">Underwriter</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">IDSs</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subordinated Notes</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 valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Credit Suisse First Boston LLC
    </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>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Banc of America Securities LLC
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CIBC World Markets Corp.&nbsp;</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>
</TR>

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

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">JP Morgan Securities, Inc.&nbsp;</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>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Piper Jaffray&nbsp;&#38; Co.&nbsp;</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>
</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><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 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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The underwriting agreement provides that the
underwriters are obligated to purchase all the IDSs and separate
senior subordinated notes in the offering if any are purchased,
other than those IDSs covered by the over-allotment option
described below. The underwriting agreement also provides that
if an underwriter defaults, the purchase commitments of
non-defaulting underwriters may be increased or the offering may
be terminated, depending on the circumstances.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">None of the senior subordinated notes sold
separately (not in the form of IDSs) in this offering, which we
refer to in this section as the &#147;separate senior
subordinated notes&#148; may be purchased, directly or
indirectly, by persons who are also (1)&nbsp;purchasing IDSs in
this offering or (2)&nbsp;holders of Class&nbsp;B common stock
following our internal corporate transactions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Furthermore, prior to the closing of this
offering, each person purchasing separate senior subordinated
notes in this offering will be required to represent to us 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">(a)&nbsp;neither such purchaser nor any entity,
    investment fund or account over which such purchaser exercises
    investment control is purchasing IDSs in this offering or owns
    or has the contractual right to acquire our equity securities
    (including securities which are convertible, exchangeable or
    exercisable into or for our equity, which we refer to
    collectively as our company equity);&nbsp;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;there is no plan or pre-arrangement by
    which (i)&nbsp;such purchaser will acquire any IDSs or our
    capital stock or (ii)&nbsp;separate senior subordinated notes
    being acquired by such purchaser will be transferred to any
    holder of the IDSs or company equity.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any subsequent issuance of IDSs and senior
subordinated notes of the same series that results in an
automatic exchange of a portion of your senior subordinated
notes for a portion of the senior subordinated notes issued in
such subsequent issuance, and/or replacement of your IDSs with
new IDSs should not impair the rights you would otherwise have
to assert claims against us or the underwriters with respect to
the full amount of the senior subordinated notes purchased by
you.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have granted the underwriters an option to
purchase on a pro rata basis up
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional
IDSs at the public offering price that appears on the cover page
of this prospectus, less the underwriting discount. The option
may be exercised by the underwriters only to cover any
over-allotments of IDSs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The underwriters propose to offer the IDSs and
separate senior subordinated notes initially at the public
offering price on the cover page of this prospectus and to the
selling group members at that price less a selling concession of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
IDS. The underwriters may allow a discount of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
IDS and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
$1,000 aggregate principal amount of the separate senior
subordinated notes on sales to other
</FONT>

<P align="center"><FONT size="2">162
</FONT>

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<DIV align="left">
<FONT size="2">broker/ dealers. After the initial public
offering the representatives may change the public offering
price and concession and discount to broker/ dealers.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes the compensation
and estimated expenses that we will pay:
</FONT>

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

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

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

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Per Share</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD></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></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Without Over-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">With Over-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Without Over-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">With Over-</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">allotment</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">allotment</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">allotment</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">allotment</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>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Underwriting Discounts and Commissions paid by us
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</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"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</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">Expenses payable by us
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</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"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We expect that our total expenses for this
offering, excluding the underwriting discount, will be
approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The representatives have informed us that the
underwriters do not expect sales to accounts over which the
underwriters have discretionary authority to exceed 5% of the
IDSs being offered. The underwriters will not confirm sales to
any accounts over which they exercise discretionary authority
without first receiving a written consent from those accounts.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have agreed that we will not offer, sell,
contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Securities and Exchange Commission
a registration statement under the Securities Act relating to,
any IDSs, shares of our Class&nbsp;A common stock, shares of our
Class&nbsp;B common stock or senior subordinated notes or any
securities convertible into or exchangeable or exercisable for
any such securities, or publicly disclose the intention to make
any offer, sale, pledge, disposition or filing, without the
prior written consent of Credit Suisse First Boston LLC for a
period of 180&nbsp;days after the date of this prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our executive officers, directors and certain of
our existing stockholders have agreed that they will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly
or indirectly, any IDSs, shares of our Class&nbsp;A common
stock, shares of our Class&nbsp;B common stock or any senior
subordinated notes or any securities convertible into or
exchangeable or exercisable for any such securities, enter into
a transaction that would have the same effect, or enter into any
swap, hedge or other arrangement that transfers, in whole or in
part, any of the economic consequences of ownership of any IDS,
our Class&nbsp;A common stock, our Class&nbsp;B common stock or
senior subordinated notes, whether any of these transactions are
to be settled by delivery of any IDS, our Class&nbsp;A common
stock, our Class&nbsp;B common stock, our senior subordinated
notes or other securities, in cash or otherwise, or publicly
disclose the intention to make any offer, sale, pledge or
disposition, or to enter into any transaction, swap, hedge or
other arrangement, without, in each case, the prior written
consent of Credit Suisse First Boston LLC for a period of
180&nbsp;days after the date of this prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have agreed to indemnify the underwriters
against liabilities under the Securities Act, or contribute to
payments that the underwriters may be required to make in that
respect.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will apply to list the IDSs on
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;under
the symbol
&#147;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#148;.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to this offering, there has been no public
market for the IDSs, the shares of our Class&nbsp;A common stock
or the senior subordinated notes. The initial public offering
price of the IDSs and the senior subordinated notes have been
negotiated between the representatives and us. In determining
the initial public offering price of our IDSs and our senior
subordinated notes, the representatives considered:
</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">prevailing market 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">our historical performance and capital structure;
    </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">estimates of our business potential and future
    revenues;
    </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">an overall assessment of our management;&nbsp;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 consideration of these factors in relation to
    market valuation of companies in related businesses.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">163
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In connection with the offering the underwriters
may engage in stabilizing transactions, over-allotment
transactions, syndicate covering transactions and penalty bids
in accordance with Regulation&nbsp;M under the Exchange Act.
</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">Stabilizing transactions permit bids to purchase
    the underlying security so long as the stabilizing bids do not
    exceed a specified maximum.
    </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">Over-allotment involves sales by the underwriters
    of IDSs in excess of the number of IDSs the underwriters are
    obligated to purchase, which creates a syndicate short position.
    The short position may be either a covered short position or a
    naked short position. In a covered short position, the number of
    IDSs over-allotted by the underwriters is not greater than the
    number of IDSs that they may purchase in the over-allotment
    option. In a naked short position, the number of IDSs involved
    is greater than the number of IDSs in the over-allotment option.
    The underwriters may close out any covered short position by
    either exercising their over-allotment option and/or purchasing
    IDSs in the open market.
    </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">Syndicate covering transactions involve purchases
    of IDSs or senior subordinated notes in the open market after
    the distribution has been completed in order to cover syndicate
    short positions. In determining the source of IDSs or senior
    subordinated notes to close out the short position, the
    underwriters will consider, among other things, the price of
    IDSs or senior subordinated notes available for purchase in the
    open market as compared to the price at which they may
    purchase&nbsp;IDSs or senior subordinated notes through the
    over- allotment option. If the underwriters sell more IDSs or
    senior subordinated notes than could be covered by the
    over-allotment option, a naked short position, the position can
    only be closed out by buying IDSs or senior subordinated notes
    in the open market. A naked short position is more likely to be
    created if the underwriters are concerned that there could be
    downward pressure on the price of the IDSs or senior
    subordinated notes in the open market after pricing that could
    adversely affect investors who purchase in the offering.
    </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">Penalty bids permit the representatives to
    reclaim a selling concession from a syndicate member when the
    IDSs or senior subordinated notes originally sold by the
    syndicate member is purchased in a stabilizing or syndicate
    covering transaction to cover syndicate short positions.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These stabilizing transactions, syndicate
covering transactions and penalty bids may have the effect of
raising or maintaining the market price of the IDSs or separate
senior subordinated notes or preventing or retarding a decline
in the market price of the IDSs or separate senior subordinated
notes. As a result the price of the IDSs or separate senior
subordinated notes may be higher than the price that might
otherwise exist in the open market. These transactions may be
effected
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or
otherwise and, if commenced, may be discontinued at any time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have been advised by the representatives that
Credit Suisse First Boston LLC and the other underwriters of the
separate senior subordinated notes currently intend to
facilitate a secondary market in the senior subordinated notes
sold separately from the IDSs and, following any separation of
the IDSs into their component pieces, any such newly separated
senior subordinated notes and shares of Class&nbsp;A common
stock, subject to applicable legal and regulatory requirements
and limitations which means that Credit Suisse First Boston LLC
and the other underwriters of the separate senior subordinated
notes will make a commercially reasonable attempt to match
buyers of the applicable securities with sellers of such
securities, in each case, as between persons of whom Credit
Suisse First Boston LLC and the other underwriters of the
separate senior subordinate notes have knowledge that they are
potential buyers or sellers of such securities. In addition,
with respect to facilitating any market for the senior
subordinated notes, Credit Suisse First Boston LLC and the other
underwriters of the separate senior subordinated notes will
consider relevant credit issues where deemed appropriate.
However, Credit Suisse First Boston LLC and the other
underwriters of the separate senior subordinated notes are not
obligated to facilitate a secondary market in the separate
senior subordinated notes and may discontinue any such efforts
at any time and without notice for any reason that would cause
them in the ordinary course of their high yield debt securities
or equity securities businesses to discontinue such
facilitation. Moreover, if and to the
</FONT>

<P align="center"><FONT size="2">164
</FONT>

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<DIV align="left">
<FONT size="2">extent that Credit Suisse First Boston LLC and
the other underwriters of the separate senior subordinated notes
facilitate any market for any such securities, there can be no
assurance that such market would provide sufficient liquidity
for any holder of such securities.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A prospectus in electronic format may be made
available on the web sites maintained by one or more of the
underwriters, or selling group members, if any, participating in
this offering and one or more of the underwriters participating
in this offering may distribute prospectuses electronically. The
representatives may agree to allocate a number of IDSs or senior
subordinated notes to underwriters and selling group members for
sale to their online brokerage account holders. Internet
distributions will be allocated by the underwriters and selling
group members that will make internet distributions on the same
basis as other allocations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain of the underwriters and their respective
affiliates have performed and expect to continue to perform
financial advisory and investment and commercial banking
services for us for which they have received and will receive
compensatory compensation. Affiliates of certain of the
underwriters are lenders under the Existing Credit Facility and
may be lenders under the Amended Credit Facility. Certain of the
underwriters may also act as the initial purchasers or
underwriters of Buffets&#146; Senior Notes. Credit Suisse First
Boston LLC acted as the initial purchaser of our
13&nbsp;7/8%&nbsp;Notes. In addition, certain of the
underwriters will serve as dealer/managers for the tender offers
of Buffets&#146; 11&nbsp;1/4%&nbsp;Notes and our
13&nbsp;7/8%&nbsp;Notes.
</FONT>

<P align="center"><FONT size="2">165
</FONT>

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<DIV align="left">
<A name='125'></A>
</DIV>

<!-- link1 "NOTICE TO CANADIAN RESIDENTS" -->

<P align="center">
<B><FONT size="2">NOTICE TO CANADIAN RESIDENTS</FONT></B>

<P align="left">
<B><FONT size="2">Resale Restrictions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The distribution of the IDSs or our senior
subordinated notes in Canada is being made only on a private
placement basis exempt from the requirement that we prepare and
file a prospectus with the securities regulatory authorities in
each province where trades of IDSs or our senior subordinated
notes are made. Any resale of the IDSs or senior subordinated
notes in Canada must be made under applicable securities laws
which will vary depending on the relevant jurisdiction, and
which may require resales to be made under available statutory
exemptions or under a discretionary exemption granted by the
applicable Canadian securities regulatory authority. Purchasers
are advised to seek legal advice prior to any resale of the IDSs
or senior subordinated notes.
</FONT>

<P align="left">
<B><FONT size="2">Representations of Purchasers</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">By purchasing IDSs or our senior subordinated
notes in Canada and accepting a purchase confirmation a
purchaser is representing to us and the dealer from whom the
purchase confirmation is received that:
</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 purchaser is entitled under applicable
    provincial securities laws to purchase the IDSs and our senior
    subordinated notes without the benefit of a prospectus qualified
    under those securities laws,
    </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">where required by law, that the purchaser is
    purchasing as principal and not as agent,&nbsp;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 purchaser has reviewed the text above under
    Resale Restrictions.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Rights of Action&nbsp;&#151; Ontario
Purchasers Only</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under Ontario securities legislation, a purchaser
who purchases a security offered by this prospectus during the
period of distribution will have a statutory right of action for
damages, or while still the owner of the IDSs or our senior
subordinated notes, for rescission against us in the event that
this circular contains a misrepresentation. A purchaser will be
deemed to have relied on the misrepresentation. The right of
action for damages is exercisable not later than the earlier of
180&nbsp;days from the date the purchaser first had knowledge of
the facts giving rise to the cause of action and three years
from the date on which payment is made for the IDSs or our
senior subordinated notes. The right of action for rescission is
exercisable not later than 180&nbsp;days from the date on which
payment is made for the IDSs or our senior subordinated notes.
If a purchaser elects to exercise the right of action for
rescission, the purchaser will have no right of action for
damages against us. In no case will the amount recoverable in
any action exceed the price at which the IDSs or our senior
subordinated notes were offered to the purchaser and if the
purchaser is shown to have purchased the securities with
knowledge of the misrepresentation, we will have no liability.
In the case of an action for damages, we will not be liable for
all or any portion of the damages that are proven to not
represent the depreciation in value of the IDSs or our senior
subordinated notes as a result of the misrepresentation relied
upon. These rights are in addition to, and without derogation
from, any other rights or remedies available at law to an
Ontario purchaser. The foregoing is a summary of the rights
available to an Ontario purchaser. Ontario purchasers should
refer to the complete text of the relevant statutory provisions.
</FONT>

<P align="left">
<B><FONT size="2">Enforcement of Legal Rights</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All of our directors and officers as well as the
experts named herein may be located outside of Canada and, as a
result, it may not be possible for Canadian purchasers to effect
service of process within Canada upon us or those persons. All
or a substantial portion of our assets and the assets of those
persons may be located outside of Canada and, as a result, it
may not be possible to satisfy a judgment against us or those
persons in Canada or to enforce a judgment obtained in Canadian
courts against us or those persons outside of Canada.
</FONT>

<P align="center"><FONT size="2">166
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Taxation and Eligibility for
Investment</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We recommend that Canadian purchasers of IDSs or
our senior subordinated notes consult their own legal and tax
advisors with respect to the tax consequences of an investment
in the IDSs or our senior subordinated notes in their particular
circumstances and about the eligibility of the IDSs or our
senior subordinated notes for investment by the purchaser under
relevant Canadian legislation.
</FONT>

<DIV align="left">
<A name='126'></A>
</DIV>

<!-- link1 "LEGAL MATTERS" -->

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The validity of the issuance of the IDSs offered
hereby and the shares of Class&nbsp;A common stock and senior
subordinated notes (including the senior subordinated notes sold
separately from the IDSs), as well as the validity of the
issuance of the subsidiary guarantees by the Delaware subsidiary
guarantor, will be passed upon for us by Paul, Weiss, Rifkind,
Wharton&nbsp;&#38; Garrison LLP, New York, New York. The
validity of the issuance of the subsidiary guarantees by the
Minnesota subsidiary guarantors will be passed upon for us by
Faegre&nbsp;&#38; Benson LLP, Minneapolis, Minnesota. Certain
legal matters relating to this offering will be passed upon for
the underwriters by Skadden, Arps, Slate, Meagher&nbsp;&#38;
Flom LLP, New York, New York.
</FONT>

<DIV align="left">
<A name='127'></A>
</DIV>

<!-- link1 "EXPERTS" -->

<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 Buffets
Holdings, Inc. and its subsidiaries as of January&nbsp;2, 2002,
July&nbsp;3, 2002 and July&nbsp;2, 2003 and for the year ended
January&nbsp;2, 2002, for the 26-week transitional period ended
July&nbsp;3, 2002, for the year ended July&nbsp;2, 2003 and for
the year ended June&nbsp;30, 2004 included in this prospectus
have been audited by Deloitte&nbsp;&#38; Touche LLP, independent
registered public accounting firm, as stated in their report
appearing herein (which report expresses an unqualified opinion
and includes an explanatory paragraph relating to the change in
its method of accounting for goodwill and other intangible
assets), and have been so included in reliance upon the report
of such firm given their authority as experts in accounting and
auditing.
</FONT>

<P align="center"><FONT size="2">167
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left">
<A name='128'></A>
</DIV>

<!-- link1 "WHERE YOU CAN FIND MORE INFORMATION" -->

<P align="center">
<B><FONT size="2">WHERE YOU CAN FIND MORE INFORMATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have filed with the Securities and Exchange
Commission a registration statement on Form&nbsp;S-1 with
respect to the securities being sold in this offering. This
prospectus constitutes a part of that registration statement.
This prospectus does not contain all the information set forth
in the registration statement and the exhibits and schedules to
the registration statement, because some parts have been omitted
in accordance with the rules and regulations of the Commission.
For further information with respect to us and the securities
being sold in this offering, you should refer to the
registration statement and the exhibits and schedules filed as
part of the registration statement. Statements contained in this
prospectus regarding the contents of any agreement, contract or
other document referred to are not necessarily complete;
reference is made in each instance to the copy of the contract
or document filed as an exhibit to the registration statement.
Each statement is qualified by reference to the exhibit.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We also file annual, quarterly and current
reports and other reports with the Commission. You may inspect a
copy of the registration statement and all other reports that we
file with the Commission without charge at the Commission&#146;s
principal office in Washington,&nbsp;D.C. Copies of all or any
part of the registration statement may be obtained after payment
of fees prescribed by the Commission from the Commission&#146;s
Public Reference Room at the Commission&#146;s principal office
at Judiciary Plaza, 450&nbsp;Fifth Street, N.W.,
Washington,&nbsp;D.C. 20549. You may obtain information
regarding the operation of the Public Reference Room by calling
the Commission at 1-800-SEC-0330. The Commission maintains an
Internet site that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the Commission. The Commission&#146;s World
Wide Web address is www.sec.gov.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You may also request a copy of these filings, at
no cost, by writing or telephoning us at:
</FONT>

<P align="center">
<B><FONT size="2">Buffets Holdings, Inc.</FONT></B>

<DIV align="center">
<B><FONT size="2">1460 Buffet Way</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Eagan, Minnesota 55121</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(651)&nbsp;994-8608</FONT></B>
</DIV>

<P align="center"><FONT size="2">168
</FONT>

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

<P align="center">
<B><FONT size="2">INDEX TO FINANCIAL STATEMENTS</FONT></B>

<P align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="90%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Page</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">Report of Independent Registered Public
    Accounting Firm
    </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">F-2</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">Consolidated Balance Sheets as of July&nbsp;3,
    2002, July&nbsp;2, 2003 and June&nbsp;30, 2004
    </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">F-3</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">Consolidated Statements of Operations for the
    Year Ended January&nbsp;2, 2002, for the Twenty-Six Week
    Transitional Period Ended July&nbsp;3, 2002, for the Year Ended
    July&nbsp;2, 2003 and for the Year Ended June&nbsp;30, 2004
    </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">F-4</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">Consolidated Statements of Shareholders&#146;
    Equity (Deficit) for the Year Ended January&nbsp;2, 2002, for
    the Twenty-Six Week Transitional Period Ended July&nbsp;3, 2002,
    for the Year Ended July&nbsp;2, 2003 and for the Year Ended
    June&nbsp;30, 2004
    </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">F-5</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">Consolidated Statements of Cash Flows for the
    Year Ended January&nbsp;2, 2002, for the Twenty-Six Week
    Transitional Period Ended July&nbsp;3, 2002, for the Year Ended
    July&nbsp;2, 2003 and for the Year Ended June&nbsp;30, 2004
    </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">F-6</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">Notes to Consolidated Financial 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">F-8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-1
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</FONT></B>

<P align="left">
<FONT size="2">To the Shareholders of Buffets Holdings, Inc. and
Subsidiaries:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have audited the accompanying consolidated
balance sheets of Buffets Holdings, Inc. (a Delaware
corporation) and Subsidiaries (the Company) as of July&nbsp;3,
2002, July&nbsp;2, 2003 and June&nbsp;30, 2004, and the related
consolidated statements of operations, shareholders&#146; equity
(deficit)&nbsp;and cash flows for the year ended January&nbsp;2,
2002, the twenty-six week transitional period ended July&nbsp;3,
2002, the year ended July&nbsp;2, 2003 and the year ended
June&nbsp;30, 2004. These financial statements are the
responsibility of the Company&#146;s management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We conducted our audits in accordance with the
standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In our opinion, such consolidated financial
statements present fairly, in all material respects, the
financial position of Buffets Holdings, Inc. and Subsidiaries as
of July&nbsp;3, 2002, July&nbsp;2, 2003 and June&nbsp;30, 2004,
and the results of their operations and their cash flows for the
year ended January&nbsp;2, 2002, the twenty-six week
transitional period ended July&nbsp;3, 2002, the year ended
July&nbsp;2, 2003 and the year ended June&nbsp;30, 2004, in
conformity with accounting principles generally accepted in the
United States of America.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As discussed in Note&nbsp;2 to the consolidated
financial statements, effective January&nbsp;3, 2002, the
Company changed its method of accounting for goodwill and
intangible assets.
</FONT>

<P align="left">
<FONT size="2">/S/ DELOITTE&nbsp;&#38; TOUCHE LLP
</FONT>

<P align="left">
<FONT size="2">Minneapolis, Minnesota
</FONT>

<DIV align="left">
<FONT size="2">August 27, 2004
</FONT>
</DIV>

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

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

<P align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED BALANCE SHEETS</FONT></B>

<CENTER>
<TABLE width="90%" 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="57%"><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="4%"><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="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;3,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;2,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></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>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</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>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">(In thousands, except share data)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="15" align="left" valign="top">
    <B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CURRENT ASSETS:
    </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>
</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">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,362</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,855</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">26,072</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">Restricted cash and cash equivalents
    </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">&#151;</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">&#151;</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">16,228</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Receivables
    </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">8,682</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">6,478</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">6,963</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">Inventories
    </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">18,632</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">18,462</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">18,673</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Prepaid expenses and other current 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">10,086</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">8,039</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">5,244</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">Assets held for sale
    </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">&#151;</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">1,390</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Deferred income taxes
    </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">19,000</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">15,216</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">15,915</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>

</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">Total current 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">64,762</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">65,440</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">89,095</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">PROPERTY AND EQUIPMENT, 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">198,350</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">154,140</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">149,618</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">GOODWILL, 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">312,163</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">312,163</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">312,163</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">ASSETS HELD FOR SALE
    </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">24,952</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">&#151;</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DEFERRED INCOME TAXES
    </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">&#151;</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">2,932</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">1,033</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OTHER ASSETS, 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">15,445</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">18,311</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">15,622</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>

</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">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">615,672</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">552,986</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">567,531</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>

</TR>

<TR>
    <TD colspan="15"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="15" align="left" valign="top">
    <B><FONT size="2">LIABILITIES AND SHAREHOLDERS&#146;
    DEFICIT</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CURRENT LIABILITIES:
    </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>
</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">Accounts payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">37,419</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43,777</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">43,280</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">Accrued liabilities (Note&nbsp;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">92,454</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">78,508</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">68,663</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Income taxes payable
    </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">2,900</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">4,787</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">4,531</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">Current maturities of long-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">2,450</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">1,735</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">2,300</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>

</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">Total current liabilities
    </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">135,223</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">128,807</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">118,774</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LONG-TERM DEBT, net of current maturities
    </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">491,531</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">419,387</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">496,039</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DEFERRED INCOME TAXES
    </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">175</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">&#151;</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DEFERRED LEASE OBLIGATIONS
    </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">18,829</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">19,713</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">21,621</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OTHER LONG-TERM LIABILITIES
    </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">4,525</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">7,889</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">7,013</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>

</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">Total liabilities
    </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">650,283</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">575,796</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">643,447</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>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">COMMITMENTS AND CONTINGENCIES
    (Note&nbsp;10)&nbsp;</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>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">SHAREHOLDERS&#146; DEFICIT:
    </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>
</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">Preferred stock, $.01&nbsp;par value;
    1,100,000&nbsp;shares authorized; none issued and outstanding as
    of July&nbsp;3, 2002, July&nbsp;2, 2003 and June&nbsp;30, 2004
    </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">&#151;</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">&#151;</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">&#151;</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">Common stock, $.01&nbsp;par value;
    3,600,000&nbsp;shares authorized; 3,228,610&nbsp;shares issued
    and outstanding as of July&nbsp;3, 2002, 3,187,985 as of
    July&nbsp;2, 2003 and 3,185,672 as of June&nbsp;30, 2004
    </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">32</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">32</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">32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Accumulated deficit
    </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">(34,643</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">(22,842</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">(75,948</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>

</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">Total shareholders&#146; deficit
    </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">(34,611</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">(22,810</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">(75,916</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>

</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">Total liabilities and shareholders&#146; deficit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">615,672</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">552,986</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">567,531</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>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these consolidated financial statements.
</FONT>

<P align="center"><FONT size="2">F-3
</FONT>

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

<P align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF
OPERATIONS</FONT></B>

<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="39%"><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="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="5%"><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="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="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>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Twenty-Six</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Week</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transitional</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">January&nbsp;2,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;3,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></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">July&nbsp;2, 2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</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>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">RESTAURANT SALES
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,044,734</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">527,084</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">985,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">942,831</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">RESTAURANT COSTS:
    </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>
</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">Food
    </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">326,271</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">163,649</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">311,891</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">307,807</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">Labor
    </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">326,423</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">164,264</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">313,532</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">287,467</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Direct and occupancy
    </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">233,375</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">117,004</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">225,417</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">217,388</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>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total restaurant costs
    </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">886,069</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">444,917</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">850,840</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">812,662</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">ADVERTISING 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">27,640</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">14,349</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">28,589</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">25,854</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">GENERAL 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">50,569</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">25,687</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">45,382</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">42,722</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">GOODWILL AMORTIZATION
    </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">10,942</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">&#151;</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">&#151;</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">IMPAIRMENT OF 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">&#151;</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">&#151;</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">4,803</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">1,878</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">GAIN ON SALE OF ORIGINAL ROADHOUSE GRILL
    RESTAURANTS
    </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">&#151;</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">&#151;</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">(7,088</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LOSS ON SALE LEASEBACK TRANSACTIONS
    </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">&#151;</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">&#151;</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">5,856</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">FINANCING-RELATED COMPENSATION 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">&#151;</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">&#151;</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">&#151;</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">2,240</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>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OPERATING 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">69,514</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">42,131</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">56,904</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">57,475</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" 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">43,405</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">15,088</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">41,235</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">39,609</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INTEREST 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">(698</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">(212</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">(307</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">(424</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">
    <FONT size="2">LOSS RELATED TO REFINANCING
    </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">&#151;</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">38,724</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">&#151;</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">4,776</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LOSS RELATED TO EARLY EXTINGUISHMENT OF 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">&#151;</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">&#151;</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">&#151;</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">5,275</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OTHER 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">(1,040</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">(598</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">(1,270</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">(1,379</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INCOME (LOSS)&nbsp;BEFORE INCOME TAXES
    </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">27,847</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">(10,871</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">17,246</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">9,618</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INCOME TAX EXPENSE (BENEFIT)
    </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">15,292</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">(3,354</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">5,319</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">1,648</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>

</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">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,555</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,517</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,927</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,970</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>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these consolidated financial statements.
</FONT>

<P align="center"><FONT size="2">F-4
</FONT>

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

<P align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF SHAREHOLDERS&#146;
EQUITY (DEFICIT)</FONT></B>

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

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="29%"><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="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><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="1%"><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="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>
    <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="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="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Retained</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Preferred Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Common Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Additional</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Earnings</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></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>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Paid-In</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Accumulated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Capital</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Deficit)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</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">(In thousands, except share data)</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">BALANCE, January&nbsp;4, 2001</FONT></B></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">975,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,250,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">135,371</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">579</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">135,993</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">Issuance of stock
    </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">1,550</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">&#151;</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">4,610</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">&#151;</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">200</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">&#151;</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">200</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">Purchase of treasury stock
    </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">&#151;</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">&#151;</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">(8,125</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">&#151;</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">(71</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">&#151;</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">(71</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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 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">&#151;</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">&#151;</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">&#151;</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">&#151;</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">&#151;</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">12,555</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">12,555</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>
    <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 valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">BALANCE, January&nbsp;2, 2002</FONT></B></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">976,550</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">3,246,485</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">33</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">135,500</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">13,134</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">148,677</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">Purchase of treasury stock
    </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">&#151;</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">&#151;</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">(17,875</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">(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">(290</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">&#151;</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">(291</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">Redemption of preferred stock
    </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">(976,550</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">(10</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">&#151;</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">&#151;</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">(97,644</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">(10,573</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">(108,227</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">Redemption of preferred stock warrants
    </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">&#151;</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">&#151;</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">&#151;</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">&#151;</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">(5,414</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">(1,786</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">(7,200</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">Dividends
    </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">&#151;</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">&#151;</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">&#151;</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">&#151;</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">(32,152</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">(27,901</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">(60,053</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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 loss
    </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">&#151;</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">&#151;</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">&#151;</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">&#151;</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">&#151;</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">(7,517</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">(7,517</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>
    <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 valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">BALANCE, July&nbsp;3, 2002</FONT></B></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">&#151;</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">&#151;</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">3,228,610</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">32</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">&#151;</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">(34,643</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">(34,611</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">Issuance of stock
    </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">&#151;</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">&#151;</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">14,625</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">&#151;</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</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">&#151;</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</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">Purchase of treasury stock
    </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">&#151;</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">&#151;</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">(55,250</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">&#151;</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</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">(126</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">(576</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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 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">&#151;</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">&#151;</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">&#151;</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">&#151;</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">&#151;</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">11,927</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">11,927</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>
    <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 valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">BALANCE, July&nbsp;2, 2003</FONT></B></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">&#151;</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">&#151;</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">3,187,985</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">32</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">&#151;</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">(22,842</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">(22,810</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">Issuance of stock
    </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">&#151;</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">&#151;</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">21,250</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">&#151;</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">241</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">&#151;</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">241</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">Purchase of treasury stock
    </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">&#151;</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">&#151;</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">(23,563</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">&#151;</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">(209</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">(171</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">(380</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">Dividends
    </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">&#151;</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">&#151;</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">&#151;</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">&#151;</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">(32</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">(60,905</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">(60,937</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">&#151;</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">&#151;</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">&#151;</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">&#151;</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">&#151;</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">7,970</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">7,970</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>
    <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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">BALANCE, June&nbsp;30, 2004</FONT></B></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">&#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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,185,672</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(75,948</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">(75,916</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>
    <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>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these consolidated financial statements.
</FONT>

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

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

<P align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF CASH
FLOWS</FONT></B>

<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="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="33%"><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="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="5%"><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="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="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>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Twenty-Six</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Week</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transitional</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">January&nbsp;2,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;3,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;2,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="5"></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>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
</TR>

<TR>
    <TD colspan="5"></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="5"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OPERATING ACTIVITIES:
    </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>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,555</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,517</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,927</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,970</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjustments to reconcile net income (loss) to net
    cash provided by operating activities:
    </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>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" 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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,404</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">20,409</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">36,885</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">33,807</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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization of debt issuance costs
    </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">3,905</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">1,617</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">1,182</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">1,370</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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss related to refinancing:
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Write-off of debt issuance costs
    </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">&#151;</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">11,022</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">&#151;</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">4,201</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><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accrued redemption fees
    </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">&#151;</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">17,000</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">&#151;</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">&#151;</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><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Original issue discount expensed
    </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">&#151;</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">4,107</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">&#151;</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">&#151;</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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accretion of original issue discount
    </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">773</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">357</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">739</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">2,049</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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss related to early extinguishment of 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">&#151;</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">&#151;</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">&#151;</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">5,275</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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred 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">1,269</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">614</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">&#151;</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">&#151;</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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Impairment of 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">&#151;</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">&#151;</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">4,803</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">1,878</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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Asset write-downs
    </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">491</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">&#151;</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">&#151;</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">&#151;</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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred income taxes
    </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">21</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">(2,798</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">677</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">1,200</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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on sale of Original Roadhouse Grill
    restaurants
    </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">&#151;</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">&#151;</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">(7,088</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">&#151;</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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss on disposal of 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">361</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">89</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">565</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">305</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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss on sale leaseback transactions
    </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">&#151;</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">&#151;</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">5,856</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">&#151;</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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Changes in assets and liabilities:
    </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>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Receivables
    </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">(1,069</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">(982</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">2,346</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">(235</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Inventories
    </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">690</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">(193</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">170</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">(674</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Prepaid expenses and other 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">(1,571</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">(1,557</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">2,047</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">2,795</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><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts payable
    </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">(7,939</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">6,399</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">8,350</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">(497</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Accrued and other liabilities
    </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">2,837</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">(7,190</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">(12,690</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">(8,698</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Income taxes payable/refundable
    </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">3,108</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">(2,127</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">1,887</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">(256</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><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><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">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">68,835</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">39,250</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">57,656</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">50,490</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><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 valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INVESTING ACTIVITIES:
    </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>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sale leaseback transactions
    </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">39,075</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">2,281</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">26,117</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">2,710</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sale of Original Roadhouse Grill
    restaurants
    </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">&#151;</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">&#151;</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">25,850</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of fixed 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">(38,096</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">(14,280</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">(25,722</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">(33,007</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Acquisition of 20% minority interest in Tahoe
    Joe&#146;s Inc.&nbsp;</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">&#151;</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">&#151;</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">&#151;</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">(370</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sale of other 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">1,596</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">662</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">417</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">2,284</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><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 valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by (used in) investing
    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">2,575</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">(11,337</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">26,662</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">(28,383</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="5"><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 colspan="5" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">FINANCING ACTIVITIES:
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repayment of debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(53,896</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(353,298</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(73,198</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(172,953</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Redemption of subordinated 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">&#151;</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">&#151;</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">(400</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">(27,364</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Redemption of preferred stock warrants
    </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">&#151;</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">(7,200</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">&#151;</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Redemption of preferred stock
    </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">&#151;</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">(108,227</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">&#151;</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repurchase of common stock
    </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</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">(291</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">(576</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">(380</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from issuance of common stock
    </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">200</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">&#151;</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</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">241</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repayment of revolving credit facility
    </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">(5,000</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">&#151;</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">&#151;</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

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

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF CASH
FLOWS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<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="39%"><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="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="5%"><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="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="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>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Twenty-Six</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Week</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transitional</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">January&nbsp;2,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;3,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;2,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></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>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</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>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">(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">Proceeds from issuance of subordinated 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">&#151;</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">221,217</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">&#151;</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">&#151;</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">Proceeds from issuance of senior discount 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">&#151;</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">&#151;</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">&#151;</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">75,073</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Unrestricted cash proceeds from credit facility
    </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">&#151;</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">245,000</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">&#151;</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">195,300</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">Initial restricted cash proceeds from credit
    facility
    </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">&#151;</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">&#151;</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">&#151;</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">34,700</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Restricted cash proceeds from credit facility
    available as of year end
    </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">&#151;</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">&#151;</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">&#151;</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">(16,228</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">Use of restricted cash for early extinguishment
    of 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">&#151;</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">&#151;</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">&#151;</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">(18,472</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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">Use of unrestricted cash for early extinguishment
    of 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">&#151;</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">&#151;</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">&#151;</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">(15,300</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">Dividends
    </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">&#151;</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">(32,289</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">&#151;</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">(60,937</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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">Debt issuance costs
    </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">(823</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">(12,076</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">(3,101</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">(5,570</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>

</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">Net cash used in financing 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">(59,590</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">(47,164</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">(76,825</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">(11,890</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">NET CHANGE IN CASH AND CASH EQUIVALENTS
    </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">11,820</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">(19,251</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">7,493</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">10,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CASH AND CASH EQUIVALENTS, 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">15,793</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">27,613</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">8,362</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">15,855</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>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CASH AND CASH EQUIVALENTS, end of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">27,613</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,362</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,855</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,072</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>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">SUPPLEMENTAL CASH FLOW INFORMATION:
    </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>
</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">Cash paid during the period for:
    </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>
</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">Interest (net of capitalized interest of $369,
    $158, $288 and $280, respectively)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,546</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,526</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,956</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">37,286</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>

</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">Income taxes
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,725</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,587</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,351</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">700</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>

</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">Non-cash investing activities during the period
    for-
    </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>
</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">Note receivable on sale of Original Roadhouse
    Grill restaurants
    </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">&#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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</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>

</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">Non-cash financing activities during the period
    for-
    </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>
</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">Issuance of subordinated notes to stockholders in
    lieu of cash payment
    </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">27,764</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</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>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">The accompanying notes are an integral part of
these consolidated financial statements.
</FONT>

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

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

<P align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<P align="left">
<B><FONT size="2">1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nature of
Organization</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></TD>
    <TD>
    <B><I><FONT size="2">Company Background</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Buffets Holdings, Inc. and Subsidiaries (Buffets
Holdings), a Delaware corporation, was formed to acquire
100&nbsp;percent of the common stock of Buffets, Inc. and its
subsidiaries in a buyout from public shareholders on
October&nbsp;2, 2000 (the Acquisition). Buffets Holdings, Inc.
and Buffets, Inc. are collectively referred to as the Company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In December 2002, Buffets, Inc. filed a
registration statement with the Securities and Exchange
Commission (SEC)&nbsp;to effect the exchange of $230.0 million
of outstanding 11&nbsp;1/4% senior subordinated notes which were
issued in June 2002 for registered 11&nbsp;1/4% senior
subordinated notes due 2010.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;20, 2004, Buffets, Inc. entered
into an amended and restated senior credit facility (the Credit
Facility) to refinance its existing debt and to make a
distribution to Buffets Holdings. Buffets, Inc. used
$230.0&nbsp;million in proceeds from term loan borrowings under
the amended Credit Facility to refinance $166.8&nbsp;million in
outstanding term loan indebtedness under the predecessor Credit
Facility, establish a $34.7&nbsp;million restricted cash
collateral account to repurchase outstanding 11&nbsp;1/4% senior
subordinated notes, make a $19.7&nbsp;million distribution to
Buffets Holdings, pay $2.7&nbsp;million in transaction fees
related to the refinancing transaction, pay $1.1&nbsp;million in
accrued term loan interest and use $5.0&nbsp;million for general
corporate purposes. The amended Credit Facility allows Buffets,
Inc. to use up to $50.0&nbsp;million in cash, comprised of the
restricted cash collateral proceeds and unrestricted cash on
hand, toward the repurchase of its outstanding 11&nbsp;1/4%
senior subordinated notes. Any unused portion of the restricted
cash collateral account must be applied within 180&nbsp;days to
repay indebtedness under the term loan portion of the amended
Credit Facility. As of June&nbsp;30, 2004, Buffets, Inc. had
expended $33.8&nbsp;million to redeem $29.6&nbsp;million of
senior subordinated notes at an average price of 110.4% and had
$16.2&nbsp;million of restricted cash and cash equivalents for
further repurchases. The Company recorded a $4.2&nbsp;million
write-off of debt issuance cost associated with the amendment of
the Credit Facility and $0.6&nbsp;million of transaction fees
associated with an uncompleted bond offering as a loss related
to refinancing. The Company also recognized a $5.3&nbsp;million
loss related to the early extinguishment of debt. Buffets, Inc.
completed its bond repurchase program in August 2004, expending
an additional $15.7&nbsp;million to redeem $14.3&nbsp;million of
senior subordinated notes at an average price of 106.7% during
fiscal 2005. The remaining $0.5&nbsp;million was paid on the
amended Credit Facility in August 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On May&nbsp;18, 2004, Buffets Holdings issued
13&nbsp;7/8% senior discount notes due 2010 in a Rule&nbsp;144A
offering with a stated aggregate principal amount at maturity
(including accreted amounts) of $132.0&nbsp;million. Buffets
Holdings used the $75.1&nbsp;million in gross proceeds from the
offering and $0.1&nbsp;million of cash on hand to redeem its
series B junior subordinated notes due 2011 plus accrued and
unpaid interest ($9.2&nbsp;million), make a distribution to its
stockholders ($60.9&nbsp;million) and pay transaction fees and
expenses related to the offering ($5.1&nbsp;million). As part of
the transaction fees and expenses related to the offering, the
Company recognized approximately $2.2&nbsp;million of bonus
payments to certain restaurant and corporate employees as
financing-related compensation expenses.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In July 2004, Buffets Holdings filed a
registration statement with the SEC to effect the exchange of
its outstanding 13&nbsp;7/8% senior discount notes for
registered 13&nbsp;7/8% senior discount notes due 2010.
</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">Description of Business</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company owns and operates a chain of
restaurants under the names of Old Country Buffet, Country
Buffet, HomeTown Buffet, Granny&#146;s Buffet, Country Roadhouse
Buffet &#38; Grill, Tahoe Joe&#146;s Famous Steakhouse and Soup
&#145;N Salad Unlimited in the United States. Until June 2003,
the Company also operated 13 Original Roadhouse Grill
restaurants. The Company, operating principally in the mid-
</FONT>

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

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">scale family dining industry segment, owned and
operated 360 restaurants (352 family buffet restaurants) and
franchised 20 restaurants operating as of June&nbsp;30, 2004.
</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">Principles of Consolidation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated financial statements include the
accounts of the Company and its subsidiaries. All significant
intercompany transactions have been eliminated in consolidation.
</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">Fiscal Year</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Beginning July&nbsp;3, 2002, the Company changed
its fiscal year so that it ends on the Wednesday nearest
June&nbsp;30 of each year. The Company&#146;s new fiscal year is
comprised of 52 or 53&nbsp;weeks divided into four fiscal
quarters of 12, 12, 16, and 12 or 13&nbsp;weeks, respectively.
Prior to July&nbsp;3, 2002, its fiscal year ended on the
Wednesday nearest December&nbsp;31 of each year and was
comprised of 52 or 53&nbsp;weeks divided into four fiscal
quarters of 16, 12, 12, and 12 or 13 weeks, respectively. All
references herein to &#147;2004&#148; represent the 52-week
period ended June&nbsp;30, 2004. All references herein to
&#147;2003&#148; represent the 52-week period ended July&nbsp;3,
2003. All references herein to &#147;2002&#148; represent the
26-week period ended July&nbsp;3, 2002. All references herein to
&#147;2001&#148; represent the 52-week period ended
January&nbsp;2, 2002.
</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">Reclassifications</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain amounts shown in the prior-period
consolidated financial statements have been reclassified to
conform with the current period consolidated financial statement
presentation. These reclassifications had no effect on net
income (loss) or shareholder&#146;s equity (deficit)&nbsp;as
previously presented.
</FONT>

<P align="left">
<B><FONT size="2">2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Summary of
Significant Accounting Policies</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></TD>
    <TD>
    <B><I><FONT size="2">Cash and Cash Equivalents</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Investments with original maturities of three
months or less are considered to be cash equivalents and are
recorded at cost, which approximates market value. Cash
equivalents consist principally of commercial paper and money
market funds.
</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">Restricted Cash and Cash
    Equivalents</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Restricted cash and cash equivalents consist of
money market funds. These funds are restricted for the
repurchase of Buffets, Inc.&#146;s outstanding 11&nbsp;1/4%
senior subordinated notes. Any unused portion of the restricted
funds must be applied to repay indebtedness under the term loan
portion of the Credit Facility by August&nbsp;18, 2004.
</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">Receivables</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Receivables primarily consist of credit card
receivables, landlord receivables and vendor rebates. Landlord
receivables represent the portion of costs for leasehold
improvements remaining to be reimbursed by landlords at
year-end. Vendor rebates result from discounts on purchases
negotiated with the vendors. Rebates are recorded as a reduction
to food costs in the statement of operations as the associated
food cost is recognized.
</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">Inventories</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Inventories, consisting primarily of food,
beverage, china and smallwares for each restaurant location, are
stated at the lower of cost or market. Cost is determined by the
first-in, first-out method for food and
</FONT>

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

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">beverage inventories. China and smallwares are
stated at their original cost and subsequent additions and
replacements are expensed as purchased.
</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">Property and Equipment</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Property and equipment are stated at cost.
Depreciation is provided using the straight-line method for
financial reporting purposes and accelerated methods for income
tax reporting purposes. Equipment is depreciated over estimated
useful lives, ranging from 3 to 10&nbsp;years. Leasehold
improvements are amortized over the terms of the related leases,
generally 10 to 15&nbsp;years. Buildings are depreciated over
estimated useful lives, generally 39&nbsp;1/2&nbsp;years.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Maintenance and repairs are charged to expense as
incurred. Major improvements, which extend the useful life of an
item, are capitalized and depreciated. The cost and accumulated
depreciation of property and equipment retired or otherwise
disposed of are removed from the related accounts, and any
residual values are charged or credited to income.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Property and equipment was as follows (in
thousands):
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="64%"><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="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="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July 3,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July 2,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June 30,</FONT></B></TD>
</TR>

<TR>
    <TD></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>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Land
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,662</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,669</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">1,137</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">Buildings
    </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">174</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">2,696</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">2,999</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">Equipment
    </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">111,611</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">117,928</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">130,938</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">Leasehold improvements
    </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">148,210</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">121,140</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">134,215</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">Less&nbsp;&#151; Accumulated depreciation and
    amortization
    </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">63,307</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">89,293</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">119,671</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><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="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">198,350</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">154,140</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">149,618</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><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>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company sold 23 restaurant locations in 2001,
one location in 2002, 30 locations in 2003 and one location in
2004. The Company leased the restaurants back applying
provisions of Statement of Financial Accounting Standards
(SFAS)&nbsp;No.&nbsp;98, &#147;Accounting for Leases.&#148; Net
proceeds from the transactions were approximately
$39.1&nbsp;million in 2001, $2.3&nbsp;million in 2002,
$26.1&nbsp;million in 2003 and $2.7&nbsp;million in 2004. The
aggregate initial annual rent associated with the sale and
leaseback transactions was $3.2&nbsp;million in 2001,
$0.2&nbsp;million in 2002, $3.7&nbsp;million in 2003 and
$0.3&nbsp;million in 2004. The Company did not recognize a gain
or loss on these transactions in 2001, 2002 or 2004, but
recorded a loss of $5.9&nbsp;million in 2003. The losses
primarily reflected the impairment of certain of the properties
for which the net proceeds were less than the book value of the
leasehold assets. In addition, the net proceeds for certain of
the properties were greater than the book value of the leasehold
assets resulting in a deferred gain of $3.6&nbsp;million in 2003
and $0.3&nbsp;million in 2004. These deferred gains are being
accreted over the lives of the respective restaurant leases,
ranging from 17 to 25&nbsp;years. The Company does not have any
continuing involvement with these sale and leaseback locations.
These leases are accounted for as operating leases.
</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">Goodwill</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Goodwill, a result of the Acquisition, represents
the excess of cost over net assets acquired. Goodwill was
amortized on a straight-line basis over 15 to 30&nbsp;years
until the adoption of SFAS No.&nbsp;142, &#147;Goodwill and
Other Intangible Assets,&#148; on January&nbsp;3, 2002. Since
the adoption of SFAS No.&nbsp;142, goodwill is no longer
amortized, but is tested at least annually for impairment.
Accumulated amortization for goodwill was $13.5 million as of
July&nbsp;3, 2002. There were no goodwill impairment charges for
any of the periods presented.
</FONT>

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

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table shows net income (loss)
adjusted to reflect the adoption of SFAS No.&nbsp;142 as of the
beginning of the respective periods (in thousands):
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="44%"><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="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="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="5%"><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="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">26-Week</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Year Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transitional</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Year Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Year Ended</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">January&nbsp;2,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;2,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD></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">July&nbsp;3, 2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Reported net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,555</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,517</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,927</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,970</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">Add: goodwill amortization
    </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">10,942</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">&#151;</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">&#151;</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">&#151;</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">Add: liquor license amortization
    </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">23</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">&#151;</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">&#151;</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">&#151;</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><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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjusted net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,520</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,517</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,927</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,970</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><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>

</TABLE>
</CENTER>

<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">Assets Held for Sale</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Assets held for sale included net assets such as
land, buildings and equipment that were in the process of being
sold and were recorded at the lower of carrying value or fair
market value less costs to sell based upon valuation estimates
from brokers and negotiations with prospective purchasers, as
follows (dollars in thousands):
</FONT>

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

<TR>
    <TD width="24%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="39%"><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>
    <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>
    <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="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Carrying Amounts as of</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Description of Assets</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Facts and Circumstances Leading</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;3,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;2,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">to be Disposed</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">to Expected Disposal</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>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2004</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD 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">Undeveloped properties
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Decision not to develop; sold two properties in
    2003; sold one property in 2004
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,843</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">698</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">&#151;</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">Non-restaurant property
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Decision to reduce fixed overhead; changed
    decision in 2003 due to increased utilization
    </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">929</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">&#151;</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">&#151;</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">Restaurant in Texas
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Decision to sell underperforming restaurant; sold
    in 2004
    </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">692</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">692</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <FONT size="2">Original Roadhouse<BR>
    Grill restaurants
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Decision to sell brand to reduce debt burden;
    sold in 2003
    </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">21,488</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">&#151;</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">&#151;</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><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 valign="bottom" bgcolor="#EEEEEE">
    <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 align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,952</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,390</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">&#151;</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><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>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The expected disposal dates of the assets to be
disposed were uncertain prior to 2003, thereby resulting in
their non-current classification for those periods.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2003, the Company recorded an adjustment
to direct and occupancy costs to reduce the carrying amount of
the non-restaurant property by approximately $0.1&nbsp;million
upon the decision to retain the facility. The restaurants held
for sale had revenues of approximately $38.6&nbsp;million and
operating income of approximately $3.2&nbsp;million for 2003.
The sale of the Original Roadhouse Grill restaurants in June
2003 resulted in a gain of approximately $7.1&nbsp;million,
which has been presented as a separate line item in the
accompanying consolidated statements of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During 2004, the Company sold one undeveloped
property and recognized a loss of approximately
$0.1&nbsp;million in direct and occupancy costs in the
consolidated statements of operations. In addition, the Company
sold one restaurant and recorded a gain of approximately
$0.6&nbsp;million in direct and occupancy costs. The restaurant
held for sale had no revenues or operating profit for 2004.
</FONT>

<P align="center"><FONT size="2">F-11
</FONT>

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</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></TD>
    <TD>
    <B><I><FONT size="2">Other Assets</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Other assets consist principally of debt issuance
costs, notes receivable and other intangibles net of accumulated
amortization of $0.1&nbsp;million, $1.3&nbsp;million and
$1.1&nbsp;million as of July&nbsp;3, 2002, July&nbsp;2, 2003,
and June&nbsp;30, 2004, respectively. Debt issuance costs are
the capitalized costs incurred in conjunction with amending the
Credit Facility and issuing senior subordinated, and senior
discount, notes. The debt issuance costs are being amortized
over the terms of the financing arrangements using the effective
interest method. Other intangibles include trademarks, franchise
fees and liquor licenses. Trademarks and franchise fees are
being amortized on a straight-line basis over 10&nbsp;years.
Liquor licenses are not amortized, as they have indefinite
lives. Notes receivable principally arose from the sale of
certain restaurant facilities. Long-term and short-term notes
receivable collectively totaled $0.8&nbsp;million as of
July&nbsp;3, 2002, $3.4&nbsp;million as of July&nbsp;2, 2003 and
$2.7&nbsp;million as of June&nbsp;30, 2004. The notes receivable
had due dates between 2006 and 2008.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The gross carrying amount and accumulated
amortization of each major intangible asset class was as follows
(in&nbsp;thousands):
</FONT>

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

<TR>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="21%"><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="1%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="1">&nbsp;</FONT></TD>
    <TD width="4%"><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="1%"><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="4%"><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="2%"><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="4%"><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="2%"><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="4%"><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="7"></TD>
    <TD></TD>
    <TD colspan="7"></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">Franchise Fees</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Trademarks</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Liquor Licenses</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Total</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="7" 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">Gross</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Gross</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Gross</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Gross</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Carrying</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Carrying</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Carrying</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Carrying</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amortization</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amortization</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amortization</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amortization</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>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></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">BALANCE, July&nbsp;3, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">69</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(30</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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">34</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(14</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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">457</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(25</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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">560</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(69</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</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">FY 2003 Activity:
    </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>
    <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">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">&#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">(14</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">&#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">(7</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">&#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">(21</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</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">Reductions
    </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">(140</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">&#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">(140</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">&#151;</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="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>
    <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">BALANCE, July&nbsp;2, 2003
    </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">69</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">(44</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">34</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">(21</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">317</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">(25</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">420</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">(90</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</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">FY 2004 Activity:
    </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>
    <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">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">&#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">(12</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">&#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">(8</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">&#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">(20</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="1">)</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">Additions
    </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">28</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">28</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="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>
    <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">BALANCE, June&nbsp;30, 2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">69</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(56</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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">34</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(29</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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">345</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(25</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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">448</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="1">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="1">(110</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="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>
    <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>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The estimated amortization expense for next year
is approximately $20,000 after which franchise fees and
trademarks are expected to be fully amortized.
</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">Recoverability of Long-Lived
    Assets</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company periodically evaluates long-lived
assets and goodwill related to those assets for impairment
whenever events or changes in circumstances indicate the
carrying value amount of an asset or group of assets may not be
recoverable. The Company considers a history of operating losses
and the other factors described to be its primary indicator of
potential impairment. Assets are grouped and evaluated for
impairment at the lowest level for which there are identifiable
cash flows, namely individual restaurants. A restaurant is
deemed to be impaired if a forecast of undiscounted future
operating cash flows directly related to the restaurant,
including disposal value, if any, are less than its carrying
amount. If a restaurant is determined to be impaired, the loss
is measured as the amount by which the carrying amount of the
restaurant exceeds its fair value. Fair value is based on quoted
market prices in active markets, if available. If quoted market
prices are not available, an estimate of fair value is based on
the best information available, including prices for similar
assets or the results of valuation techniques such as discounted
estimated future cash flows as if the decision to continue to
use the impaired restaurant was a new investment decision. The
Company generally measures fair value by discounting estimated
future cash flows. Considerable management judgment is necessary
to estimate discounted future cash flows. Accordingly, actual
results could vary significantly from such estimates. There were
no impairment charges
</FONT>

<P align="center"><FONT size="2">F-12
</FONT>

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">in 2001. During 2002, the Company expensed
approximately $1.1&nbsp;million relating to the impairment of
assets associated with 12&nbsp;restaurants (see Note&nbsp;4).
During 2003, the Company expensed approximately
$4.8&nbsp;million relating to the impairment of long-lived
assets for 27&nbsp;restaurants, as well as an additional
$0.8&nbsp;million related to the impairment of assets associated
with 12&nbsp;restaurants (see Note&nbsp;4). During 2004, the
Company expensed approximately $1.9&nbsp;million relating to the
impairment of long-lived assets for 17&nbsp;restaurants.
</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">Pre-opening Costs</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Costs incurred in connection with the opening of
new restaurants are expensed as incurred in accordance with
Statement of Position (SOP)&nbsp;98-5, &#147;Reporting on the
Costs of Start-up Activities.&#148; SOP&nbsp;98-5 requires
companies to expense as incurred all start-up and pre-opening
costs that are not otherwise capitalized as long-lived assets.
</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">Advertising Expenses</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Advertising costs are charged to expense as
incurred.
</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">Income Taxes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company utilizes SFAS No.&nbsp;109,
&#147;Accounting for Income Taxes.&#148; Under SFAS
No.&nbsp;109, the deferred tax provision is determined under the
liability method. Under this method, deferred tax assets and
liabilities are recognized based on differences between the
financial statement and tax bases of assets and liabilities
using presently enacted tax rates.
</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">Joint Ventures</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">During fiscal 2004, the Company paid $370,000 to
purchase the remaining&nbsp;20% minority interest from its lone
consolidated joint venture, Tahoe Joe&#146;s Inc., which owned
and operated Tahoe Joe&#146;s Famous Steakhouses.
</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">Revenue Recognition</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s restaurant sales include
proceeds from the sale of food and beverages at Company-owned
restaurants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company recognizes franchise income for
royalty fees and initial franchise fees received from
franchisees. Initial fees are recognized as income when required
obligations under the terms of the franchise agreement are
fulfilled. Royalty fees are based on gross sales and are
recognized in income as sales are generated. Franchise income
was $1.3&nbsp;million for 2001, $0.7&nbsp;million for 2002,
$1.2&nbsp;million for 2003 and $1.0&nbsp;million for 2004.
Franchise income is included in other income in the accompanying
consolidated statements of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company sells gift cards at its restaurants.
Revenues are recognized upon the redemption of the gift cards.
Unearned revenue represents gift cards sold and not yet redeemed
and is included in accrued liabilities in the accompanying
consolidated balance sheets.
</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">Use of Estimates</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and
liabilities at the date
</FONT>

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

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">of the financial statements and the reported
amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
</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">Fair Value Disclosure of Financial
    Instruments</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s financial instruments consist
of cash and cash equivalents, receivables, notes receivable,
accounts payable and long-term debt for which current carrying
amounts are equal to or approximate fair market values. The
following methods were used in estimating the fair value of each
class of financial instrument:
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For cash equivalents, receivables and accounts
payable, the carrying amounts approximate fair value because of
the short duration of these financial instruments. The fair
value of notes receivable is estimated based on the present
value of expected future cash flows discounted at the interest
rate currently offered by the Company, which approximates rates
currently being offered by local lending institutions for loans
of similar terms to companies of comparable credit risk. The
fair value of long-term debt is estimated by discounting future
cash flows for these instruments using the Company&#146;s
expected borrowing rate for debt of comparable risk and maturity.
</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">Segment Reporting</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company operates principally in the mid-scale
family dining industry segment in the United States, providing
similar products to similar customers. The Company&#146;s
restaurants possess similar economic characteristics resulting
in similar long-term expected financial performance
characteristics. Revenues are derived principally from food and
beverage sales. The Company does not rely on any major customers
as a source of revenue. Management believes that the Company
meets the criteria for aggregating its operations into a single
reporting segment.
</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">Stock-Based Compensation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company accounts for activity under its
stock-based employee compensation plans under the recognition
and measurement principles of APB (Accounting Principles Board)
Opinion No.&nbsp;25, &#147;Accounting for Stock Issued to
Employees.&#148; Accordingly, the Company does not recognize
compensation expense in connection with employee stock option
grants because stock options are granted at exercise prices not
less than the fair value of the common stock on the date of
grant.
</FONT>

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

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table shows the effect on net
income (loss) had the Company applied the fair value expense
recognition provisions of SFAS No.&nbsp;123, &#147;Accounting
for Stock-Based Compensation,&#148; to stock-based employee
compensation (in thousands):
</FONT>

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

<TR>
    <TD width="36%"><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="7%"><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="5%"><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="5%"><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>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">26-Week</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transitional</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">January&nbsp;2,&nbsp;2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;3,&nbsp;2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;2,&nbsp;2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30,&nbsp;2004</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income (loss)&nbsp;as reported
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,555</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,517</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,927</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,970</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">Compensation expense recorded in the financial
    statements, net of tax effect
    </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">&#151;</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">&#151;</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">&#151;</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">&#151;</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">Pro forma compensation expense under the
    provisions of SFAS No.&nbsp;123, net of tax effect
    </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">(87</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">(38</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">(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">(9</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pro forma
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,468</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,555</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,922</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,961</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><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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted-average fair value per share of options
    granted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.64</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.81</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.32</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><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>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Information on the Company&#146;s stock-based
compensation plans and data used to calculate compensation
expense in the table above are described in more detail in
Note&nbsp;6.
</FONT>

<P align="left">
<B><FONT size="2">3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recent
Accounting Pronouncements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In January 2003, the Financial Accounting
Standards Board (FASB)&nbsp;issued FASB Interpretation
No.&nbsp;(FIN)&nbsp;46, &#147;Consolidation of Variable Interest
Entities, an Interpretation of ARB 51.&#148; The primary
objectives of FIN&nbsp;46 are to provide guidance on the
identification of entities for which control is achieved through
means other than through voting rights (variable interest
entities, or VIEs) and how to determine when and which business
enterprise should consolidate the VIE (the primary beneficiary).
In December 2003, the FASB issued FIN&nbsp;46(R),
&#147;Consolidation of Variable Interest Entities,&#148; which
represents a revision to FIN&nbsp;46. The provisions of
FIN&nbsp;46(R) are effective for interests in VIEs as of the
first interim, or annual, period ending after March&nbsp;15,
2004. In addition, FIN&nbsp;46(R) requires that both the primary
beneficiary and all other enterprises with a significant
variable interest make additional disclosure in filings issued
after January&nbsp;31, 2003. The Company adopted FIN&nbsp;46(R)
as of December&nbsp;17, 2003 and its adoption had no impact on
the Company&#146;s consolidated results of operations, financial
position or cash flow.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In May 2003, the FASB issued
SFAS&nbsp;No.&nbsp;150, &#147;Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and
Equity.&#148; SFAS&nbsp;No.&nbsp;150 modifies the accounting for
certain financial instruments that, under previous guidance,
issuers could account for as equity. SFAS No.&nbsp;150 requires
that those instruments be classified as liabilities in
statements of financial position. Most of the guidance in
SFAS&nbsp;No.&nbsp;150 is effective for all financial
instruments entered into or modified after May&nbsp;31, 2003, or
otherwise is effective at the beginning of the first interim
period beginning after June&nbsp;15, 2003. The Company adopted
SFAS&nbsp;No.&nbsp;150 as of July&nbsp;3, 2003 and its adoption
had no impact on the Company&#146;s consolidated results of
operations, financial position or cash flow.
</FONT>

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

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<B><FONT size="2">4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued
Liabilities</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Accrued liabilities consisted of the following
(in thousands):
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="54%"><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="5%"><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="5%"><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>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July 3, 2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July 2, 2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June 30, 2004</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accrued compensation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,764</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,599</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">16,686</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">Redemption fee payable
    </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">17,000</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">&#151;</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">&#151;</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">Accrued workers&#146; compensation
    </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">13,468</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">16,894</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">16,916</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">Accrued 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">564</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">13,152</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">10,282</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">Accrued insurance
    </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">10,203</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">8,513</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">7,771</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">Accrued store closing costs
    </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">7,091</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">2,782</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">1,442</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">Unearned revenue
    </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">5,306</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">4,521</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">4,378</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">Accrued sales taxes
    </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">4,454</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">3,921</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">3,315</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">Accrued other
    </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">12,604</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">8,126</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">7,873</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><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="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">92,454</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">78,508</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">68,663</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><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>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Virtually all the store closing activity recorded
in the store closing cost accrual as of June&nbsp;30, 2004
relates to store closings identified and recognized prior to
December&nbsp;31, 2002. The Company provided for these store
closing costs, specifically identified and approved for closure
in the succeeding year, in accordance with EITF&nbsp;94-3,
&#147;Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring),&#148; and EITF&nbsp;95-3,
&#147;Recognition of Liabilities in Connection with a Purchase
Business Combination.&#148; Store closing costs incurred
subsequent to December&nbsp;31, 2002 have been provided in
accordance with SFAS&nbsp;No.&nbsp;146, &#147;Accounting for
Costs Associated with Exit or Disposal Activities.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The store closing costs are principally comprised
of lease termination costs and obligations, net of sublease and
other cash receipts and employee termination benefits as
summarized below (in thousands):
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="54%"><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="5%"><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="5%"><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>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July 3, 2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July 2, 2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June 30, 2004</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Lease termination costs and obligations, net of
    sublease and other cash receipts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,926</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,782</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">1,442</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">Employee termination benefits
    </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">165</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">&#151;</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">&#151;</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><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 valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total accrued store closing costs
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,091</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,782</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">1,442</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><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>

</TABLE>
</CENTER>

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

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes store closing
reserve activity by type of cost for the past three fiscal years
(in thousands):
</FONT>

<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="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="40%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><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="5%"><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="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Twenty-Six</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Week Transitional</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July 3, 2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July 2, 2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June 30, 2004</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">BALANCE, beginning of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,378</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,091</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">2,782</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additions:
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Lease obligations charged to earnings (as direct
    and occupancy costs)
    </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">450</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">167</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">467</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Employee termination benefits charged to earnings
    (as direct and occupancy costs)
    </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">112</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">83</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>
</TR>

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

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Cash payments:
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Lease termination costs and obligations
    </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">1,630</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">3,471</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">1,807</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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Employee severance benefits
    </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">127</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">248</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Change in lease obligation accrual assumptions
    </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">1,092</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">840</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">BALANCE, end of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,091</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,782</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">1,442</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The change in accrual assumptions is based on the
Company receiving greater than planned sublease and other cash
receipts during 2002 and 2003. The expense recovery was included
in the same line item in the statement of operations as the
Company&#146;s impairment of underperforming restaurant
properties.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes planned and actual
store closing activity for the past three fiscal years:
</FONT>

<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="43%"><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="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><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>
    <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 colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Twenty-Six</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Week Transitional</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July 3, 2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July 2, 2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June 30, 2004</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Number of stores:
    </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>
</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">Expected to close as of the beginning of the
    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">12</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">13</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 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 during the 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">14</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">15</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">Identified for closure during the 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">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">19</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>

</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">Expected to close as of the end of the 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">13</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">7</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>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Number of employees:
    </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>
</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">Expected to be terminated as of the beginning of
    the 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">420</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">455</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">105</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">Terminated during the 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">310</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</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">455</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Identified for termination during the 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">350</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">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">595</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">Expected to be terminated as of the end of the
    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">455</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">105</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">245</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

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

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The remaining store closing reserves are expected
to be paid, or incurred, by year as follows (in thousands):
</FONT>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="89%"><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 valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2005
    </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">378</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">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">293</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">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">229</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">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">229</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">2009
    </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">195</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">Thereafter
    </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">118</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><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><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">1,442</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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

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

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

<TR valign="top">
    <TD><B><FONT size="2">5</FONT></B></TD>
    <TD>
    <B><FONT size="2">Long-Term Debt</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Long-term debt outstanding was as follows (in
thousands):
</FONT>

<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="45%"><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="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 colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;3, 2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;2, 2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30, 2004</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>
</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">Buffets, Inc.</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>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Credit Facility:
    </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>
</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">Revolving credit facility
    </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">&#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">&#151;</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">Term loan, interest at LIBOR plus 3.50%, due
    quarterly through June&nbsp;28, 2009 (interest rate at 4.7% as
    of June&nbsp;30, 2004)
    </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">245,000</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">171,802</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">228,850</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>

</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">Total Credit Facility
    </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">245,000</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">171,802</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">228,850</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">Senior subordinated notes, interest at 11.25%,
    due July&nbsp;15, 2010, net of discount of $8,783 at
    July&nbsp;3, 2002, $8,044 at July&nbsp;2, 2003 and $6,226 at
    June&nbsp;30, 2004
    </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">221,217</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">221,956</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">193,189</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>

</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">Total long-term debt at Buffets, 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">466,217</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">393,758</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">422,039</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Buffets Holdings, Inc.</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>
</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">Series&nbsp;A senior subordinated notes, interest
    at 3% through December&nbsp;31, 2002 and 4.75% thereafter, due
    June&nbsp;25, 2011
    </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">7,764</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">7,764</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">&#151;</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">Series&nbsp;B junior subordinated notes, interest
    at 3% through December&nbsp;31, 2002 and 4.75% thereafter, due
    June&nbsp;25, 2011
    </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">20,000</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">19,600</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Senior discount notes, interest at 13.875%, due
    December&nbsp;15, 2010, net of discount of $55,700
    </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">&#151;</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">&#151;</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">76,300</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>

</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">Grand total long-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">493,981</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">421,122</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">498,339</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Less&nbsp;&#151; current maturities
    </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">2,450</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">1,735</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">2,300</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>

</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">491,531</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">419,387</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">496,039</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>

</TR>

</TABLE>
</CENTER>

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

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2004, future maturities of
long-term debt by year were as follows (in thousands):
</FONT>

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

<TR>
    <TD width="86%"><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="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><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">2005
    </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">2,300</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">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">2,300</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">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">2,300</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">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">2,300</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">2009
    </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">219,650</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">Thereafter
    </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">331,415</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><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><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">560,265</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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<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">Credit Facility</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On February&nbsp;20, 2004, Buffets, Inc. amended
and restated its Credit Facility. The amended and restated
Credit Facility provides for total borrowings of up to
$310,000,000, including (i)&nbsp;a $230,000,000 term loan,
(ii)&nbsp;a $30,000,000 revolving credit facility, (iii)&nbsp;a
$20,000,000 letter of credit facility, and (iv)&nbsp;a
$30,000,000 synthetic letter of credit facility. The terms of
the Credit Facility permit Buffets, Inc. to borrow, subject to
availability and certain conditions, incremental term loans or
to issue additional notes in an aggregate amount up to
$25,000,000. The borrowings under the term loan facility bear
interest, at Buffets, Inc.&#146;s option, at either adjusted
LIBOR plus 3.50% or at an alternate base rate plus 2.50%,
subject to a leverage-based pricing grid. The term loan and the
synthetic letter of credit facility mature on June&nbsp;28,
2009, while the revolving facility and the letter of credit
facilities mature on June&nbsp;28, 2007. The borrowings due
under the term loan are payable in equal quarterly installments
in an annual amount equal to 1% of the term loan during each of
the first four and a half years of the loan, with the remaining
balance payable due in equal quarterly installments during the
last year of the loan. The Credit Facility is fully and
unconditionally guaranteed by Buffets Holdings, which has no
independent assets or operations, and is secured by
substantially all of the Company&#146;s assets. Availability
under the Credit Facility depends upon our continued compliance
with certain covenants and financial ratios including leverage,
interest coverage and fixed charge coverage as specifically
defined in the Credit Facility. Buffets, Inc. was in compliance
with all financial ratio covenants of the Credit Facility as of
June&nbsp;30, 2004. The financial ratio covenant requirements
increase over time, however, as set forth in the senior credit
agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of June&nbsp;30, 2004, Buffets, Inc. had
$35.1&nbsp;million in outstanding letters of credit, which
expire through May&nbsp;2, 2005. As of June&nbsp;30, 2004, the
total borrowing availability under the revolving credit facility
was $30.0&nbsp;million and the total borrowing capacity under
the letter of credit facilities was $14.9&nbsp;million.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Buffets, Inc. has the option of tying its
borrowings to LIBOR or a base rate when calculating the interest
rate for the term loan. The base rate is the greater of Credit
Suisse First Boston&#146;s prime rate, or the federal funds
effective rate plus one-half of 1&nbsp;percent.
</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">11&nbsp;1/4% Senior Subordinated
    Notes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;28, 2002, Buffets, Inc. issued
11&nbsp;1/4%&nbsp;senior subordinated notes in the principal
amount of $230&nbsp;million due July&nbsp;15, 2010. Such notes
were issued at a 96.181% discount, resulting in an effective
yield of 12% to the initial principal amount. Interest is
payable semi-annually on January&nbsp;15 and July&nbsp;15 of
each year through July&nbsp;15, 2010. Accretion of the original
issue discount was approximately $10,000 during 2002,
$0.7&nbsp;million during 2003 and $0.8&nbsp;million during 2004
and is included in interest expense in the accompanying
consolidated statements of operations. Except in the event of an
initial public offering, Buffets, Inc. is not entitled to redeem
the notes at its option prior to July&nbsp;15, 2006. The
redemption price during the first twelve-month period following
July&nbsp;15, 2006 is 105.625%. The redemption price declines by
</FONT>

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

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">1.875%&nbsp;per year until July&nbsp;15, 2009, at
which point there is no redemption price premium. In the event
of an initial public offering prior to July&nbsp;15, 2006,
Buffets, Inc. may redeem up to 35% of the aggregate principal
amount of the notes at a redemption price of 111.25%.
Furthermore, in the event of a change in control, as defined in
the indenture governing those notes, the holders of the notes
may require the Company to repurchase the notes at a purchase
price of 101% of the outstanding principal amount plus accrued
and unpaid interest.
</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">Series&nbsp;A Senior Subordinated
    Notes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;28, 2002, Buffets Holdings issued
Series&nbsp;A senior subordinated notes, due June&nbsp;25, 2011,
in the principal amount of $7,764,219 to holders of the
Company&#146;s senior preferred stock to make a partial
redemption of the Company&#146;s senior preferred stock. Buffets
Holdings repurchased all outstanding notes in February 2004.
</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">Series&nbsp;B Junior Subordinated
    Notes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On June&nbsp;28, 2002, Buffets Holdings issued
Series&nbsp;B junior subordinated notes, due June&nbsp;25, 2011,
in the principal amount of $20,000,000 as a dividend to holders
of the Company&#146;s common stock and holders of its warrants
to purchase common stock. Buffets Holdings repurchased
$0.4&nbsp;million of these notes in January 2003,
$10.5&nbsp;million in February 2004 and the remaining
$8.7&nbsp;million in May 2004.
</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">13&nbsp;7/8%&nbsp;Senior Discount
    Notes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On May&nbsp;18, 2004, the Company issued
$132&nbsp;million aggregate principal amount at maturity of our
13&nbsp;7/8%&nbsp;senior discount notes due December&nbsp;15,
2010. The 13&nbsp;7/8%&nbsp;senior discount notes were issued at
a discount to their aggregate principal amount at maturity.
Prior to July&nbsp;31, 2008, interest will accrue on the
13&nbsp;7/8%&nbsp;senior discount notes in the form of an
increase in the accreted value of those notes. The accreted
value of each note will increase until July&nbsp;31, 2008 at a
rate of 13.875%&nbsp;per annum. After this date, cash interest
on the notes will accrue and be payable on January&nbsp;31 and
July&nbsp;31 of each year at a rate of 13.875%&nbsp;per annum.
Accretion of the discount was approximately $1.2&nbsp;million
during 2004 and is included in interest expense in the
accompanying consolidated statements of operations. If the
Company fails to meet certain leverage ratio tests on or about
July&nbsp;31, 2006 or July&nbsp;31, 2008, additional interest
will accrue on the notes from that date at a rate of 1%&nbsp;per
annum, up to a maximum of 2%&nbsp;per annum.
</FONT>

<DIV>&nbsp;</DIV>

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

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

<TR valign="top">
    <TD><B><FONT size="2">6</FONT></B></TD>
    <TD>
    <B><FONT size="2">Shareholders&#146; Equity (Deficit)</FONT></B></TD>
</TR>

</TABLE>

<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">Authorized Shares</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has 3,600,000 authorized shares of
common stock and 1,100,000 authorized shares of preferred stock.
</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">Stock Warrants</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On October&nbsp;2, 2000, Buffets Holdings issued
$80&nbsp;million principal amount of 14%&nbsp;senior
subordinated notes due September&nbsp;29, 2008, with detachable
warrants to purchase&nbsp;173,218&nbsp;shares of Buffets
Holdings&#146; common stock and 51,965&nbsp;shares of Buffets
Holdings&#146; preferred stock. Contemporaneously, Buffets
Holdings issued $15&nbsp;million principal amount of
16%&nbsp;senior subordinated notes due September&nbsp;29, 2008,
with detachable warrants to purchase&nbsp;32,478&nbsp;shares of
common stock and 9,744&nbsp;shares of preferred stock. Such
warrants were valued collectively at $5.4&nbsp;million. On
June&nbsp;28, 2002, all preferred stock warrants were redeemed
in conjunction with the refinancing transactions, leaving
205,696 common stock warrants outstanding. The common stock
warrants have an exercise price of $.01&nbsp;per share and
expire September&nbsp;29, 2010.
</FONT>

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

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</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">Call Rights and Put Rights</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has a call right to repurchase stock
held by the Company&#146;s management at any time following the
termination of a management stockholder&#146;s employment with
the Company. In the event of the death or disability of a
management stockholder, the management stockholder&#146;s estate
has a put right, for a period of one year following the date of
termination of employment, whereby the Company may be required
to repurchase the stock of the management stockholder at a price
that would be paid by the Company if it were exercising its call
rights. The Company may defer payment of the put right in excess
of $4.0&nbsp;million per fiscal year per stockholder and in
excess of $8.0&nbsp;million per fiscal year for all stockholders.
</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">Stock Option Plan</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In October 2000, Buffets Holdings adopted the
Equity Participation Plan, a non-qualified stock option plan
under which up to 113,750&nbsp;shares of common stock are
reserved for issuance to certain employees. The option exercise
price for each option, as determined at the date of grant, is
based on the four full fiscal quarters immediately preceding the
date of the award using the amount by which the sum of 4.5 times
earnings before interest, taxes, depreciation and amortization,
as defined in the Credit Facility, and the proceeds payable to
the Company upon the exercise of the options, exceeds the
consolidated indebtedness of the Company as of the date of the
award. Options are fully vested upon issuance and generally
expire 15&nbsp;years from the date of the grant or at an earlier
date, as determined by the Board of Directors. However, options
are only exercisable in the event of a liquidity event, as
defined in the Stockholders&#146; Agreement. The Company
reserves the right to pay the plan participant the appreciated
value of the shares rather than actually issue equity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Activity under the stock option plan is
summarized as follows:
</FONT>

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

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="36%"><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="2%"><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>
    <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="2%"><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>
    <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="2%"><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>
</TR>

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

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">For the 26-Week</FONT></B></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">Transitional Period</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">For the Year Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">For the Year Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Ended July&nbsp;3, 2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">July&nbsp;2, 2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">June&nbsp;30, 2004</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="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"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted-</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Avg</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Avg</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Avg</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Outstanding at beginning of year
    </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">51,367</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14.29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59,310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19.08</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">65,822</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">17.93</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">Granted
    </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">10,793</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">40.01</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">10,218</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">11.64</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">44,305</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">13.08</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">Exercised
    </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">&#151;</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">&#151;</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">&#151;</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">&#151;</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">&#151;</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">&#151;</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">Canceled
    </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">(2,850</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">12.42</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">(3,706</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">19.10</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">(11,985</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">12.14</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">Outstanding at end of year
    </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">59,310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19.08</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">65,822</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17.93</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">98,142</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">16.42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes the Company&#146;s
outstanding stock options as of June&nbsp;30, 2004:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="53%"><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="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="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="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="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Options Outstanding</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted-Avg</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Remaining</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Option Term</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Weighted-Avg</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Range of Exercise Price</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">(in years)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise 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>
    <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">$&nbsp;0-$10
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41,749</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.04</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.86</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">$11-$20
    </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">35,251</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">14.53</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">14.69</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">$21-$30
    </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">11,380</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">12.35</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">25.51</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">$31-$40
    </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">1,037</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">12.52</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">32.09</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">$41-$50
    </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">8,725</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">12.83</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">41.07</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">$&nbsp;0-$50
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">98,142</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13.05</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16.42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

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

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To determine compensation expense under the fair
value method, the fair value of each option grant is estimated
on the date of grant using the Black-Scholes option-pricing
model. The principal assumptions the Company used in applying
the Black-Scholes model were as follows:
</FONT>

<CENTER>
<TABLE width="90%" 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="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><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="5%"><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>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Twenty-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Six Week</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transitional</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;3, 2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;2, 2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30, 2003</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Risk-free interest rate
    </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">4.24</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">2.07</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">1.32</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">Expected volatility
    </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">0.0</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">0.0</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">0.0</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">Expected dividend yield
    </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">0.0</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">0.0</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">0.0</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">Expected life in years
    </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">3.7</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">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">1.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Information regarding the effect on net income
(loss) had the Company applied the fair value expense
recognition provisions of SFAS&nbsp;No.&nbsp;123 is included in
Note&nbsp;2.
</FONT>

<DIV>&nbsp;</DIV>

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

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

<TR valign="top">
    <TD><B><FONT size="2">7</FONT></B></TD>
    <TD>
    <B><FONT size="2">Retirement Plan</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company has a 401(k) plan covering all
employees with one year of service, age&nbsp;21 or older, who
worked at least 1,000&nbsp;hours in the prior year. The
Company&#146;s discretionary contributions to the plan are
determined annually, on a calendar year basis, by the Board of
Directors and are used to match a portion of employees&#146;
voluntary contributions. Participants are 100% vested in their
own contributions immediately and are vested in the
Company&#146;s contributions 20%&nbsp;per year of service with
the Company, such that they are fully vested at the end of five
years of service with the Company. The Board of Directors
authorized and recognized matching contributions of
$0.9&nbsp;million for 2001 and $0.1&nbsp;million for the
calendar year ended December&nbsp;31, 2003. These contributions
were paid during the first quarter of the succeeding calendar
year. There were no matching contributions for calendar year
2002. The 2004 matching contribution will not be authorized
until the end of the 2004 calendar year. The Company has an
accrual of $0.4&nbsp;million as of June&nbsp;30, 2004 for
estimated 2004 matching contributions related to the first half
of calendar year 2004.
</FONT>

<P align="center"><FONT size="2">F-22
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV>&nbsp;</DIV>

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

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

<TR valign="top">
    <TD><B><FONT size="2">8</FONT></B></TD>
    <TD>
    <B><FONT size="2">Income Taxes</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The income tax expense (benefit) consisted of the
following (in thousands):
</FONT>

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

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

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Twenty-Six</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Week</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transitional</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;3,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">January&nbsp;2, 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">July&nbsp;2, 2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30, 2004</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Federal:
    </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>
</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">Current
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,870</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(950</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,209</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(710</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">Deferred
    </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">18</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">(2,448</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">1,130</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">1,050</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>
    <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 colspan="2"><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">11,888</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">(3,398</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">4,339</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">340</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">State:
    </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>
</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">Current
    </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">3,401</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">394</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">1,433</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">1,158</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">Deferred
    </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">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">(350</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">(453</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">150</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>
    <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 colspan="2"><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">3,404</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</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">980</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">1,308</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>
    <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">Income tax expense (benefit)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,292</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,354</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,319</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,648</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>
    <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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Deferred income taxes are provided to record the
income tax effect of temporary differences that occur when
transactions are reported in one period for financial statement
purposes and in another period for tax purposes. The tax effect
of the temporary differences giving rise to the Company&#146;s
deferred tax assets and liabilities was as follows (in
thousands):
</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="31%"><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>
    <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>
    <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="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>
    <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 colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></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">July&nbsp;3, 2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">July&nbsp;2, 2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">June&nbsp;30, 2004</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="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"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Non-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Non-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Non-</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Current</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">current</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Current</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">current</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Current</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">current</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Asset</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Liability</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Asset</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Asset</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Asset</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Asset</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Property and equipment
    </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">(9,091</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,476</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,336</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred rent
    </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">&#151;</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">7,227</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">&#151;</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">7,586</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">&#151;</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">8,325</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">Self-insurance reserve
    </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">2,975</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">&#151;</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">1,832</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">&#151;</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">2,986</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">&#151;</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">Accrued workers&#146; compensation
    </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">4,929</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">&#151;</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">6,341</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">&#151;</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">6,223</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">&#151;</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">Accrued payroll and related benefits
    </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">3,034</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">&#151;</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">3,303</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">&#151;</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">1,943</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">&#151;</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">Accrued store closing costs
    </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">2,729</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">&#151;</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">1,120</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">&#151;</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">555</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">&#151;</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">Net operating loss and tax credit carryforwards
    </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">4,564</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">&#151;</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">1,934</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">&#151;</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">3,719</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">&#151;</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">Deferred gain on sale leaseback transaction
    </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">&#151;</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">1,576</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">&#151;</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">1,495</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">&#151;</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">1,298</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">Goodwill
    </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">&#151;</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">(112</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">&#151;</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">(569</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">&#151;</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">(1,348</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Other
    </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">769</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">225</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">686</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">(104</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">489</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">(906</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>
    <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 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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(175</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,216</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,932</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,915</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,033</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>
    <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>

</TABLE>
</CENTER>

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

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A reconciliation of the Company&#146;s income tax
expense (benefit) at the federal statutory rate to the reported
income tax expense (benefit) was as follows (in thousands):
</FONT>

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

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="33%"><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>
    <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>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <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="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>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Twenty-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Six Week</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transitional</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">January&nbsp;2, 2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;3, 2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;2, 2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30, 2004</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Federal income tax expense (benefit) at statutory
    rate of 35%
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,834</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,667</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,417</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,367</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">State income taxes, net of federal benefit
    </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">2,204</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</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">666</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">850</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">General business credits
    </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">(932</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">(656</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">(1,769</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">(1,396</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Goodwill amortization
    </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">3,767</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">&#151;</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">&#151;</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">&#151;</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">Other
    </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">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">940</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">(1,173</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>
    <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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income tax expense (benefit)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,292</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,354</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,319</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,648</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>
    <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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The $1.2&nbsp;million other line item above in
2004 represents a reduction in the Company&#146;s liability
resulting from a reassessment of the Company&#146;s estimates
following a favorable resolution to a state tax audit.
</FONT>

<DIV>&nbsp;</DIV>

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

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

<TR valign="top">
    <TD><B><FONT size="2">9</FONT></B></TD>
    <TD>
    <B><FONT size="2">Related-Party Transactions</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company entered an advisory agreement with
Caxton-Iseman, a majority shareholder with approximately 78.5%
of Buffets Holdings&#146; outstanding common stock under its
control, under which Caxton-Iseman provides various advisory
services to the Company in exchange for an annual advisory fee
equal to 2% of the Company&#146;s annual consolidated earnings
before interest, taxes, depreciation and amortization.
Caxton-Iseman receives an additional fee for advisory services
relating to particular financial transactions equal to 1% of the
transaction value. Under these agreements, the Company paid
Caxton-Iseman $2.9&nbsp;million for 2001, $1.2&nbsp;million for
2002, $2.8&nbsp;million for 2003 and $3.1&nbsp;million for 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company entered an advisory agreement with
Sentinel Capital Partners, L.L.C. a minority shareholder with
approximately 7.1% of Buffets Holdings&#146; outstanding common
stock under its control, under which Sentinel Capital Partners,
L.L.C. provides various advisory services to the Company for an
annual advisory fee of $200,000. Under this agreement, the
Company paid $200,000 in 2001, approximately $108,000 in 2002,
$200,000 in 2003 and $200,000 in 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Roe H. Hatlen, a founder of the Company, former
Chief Executive Officer and Chairman of the Board of Directors,
and a current member on Buffets Holdings&#146; Board of
Directors, entered into an advisory arrangement with the Company
and Buffets Holdings that expires in December 2005. Under his
advisory agreement, Mr.&nbsp;Hatlen received $325,000 in 2001,
$150,000 in 2002, $283,000 in 2003 and $257,000 in 2004. He will
receive $238,000 in fiscal 2005 and $113,000 in fiscal 2006. In
addition, Mr.&nbsp;Hatlen will receive health, medical and other
benefits comparable to those made available to the
Company&#146;s management employees through the end of calendar
year 2005. Mr.&nbsp;Hatlen holds approximately 5.1% of Buffets
Holdings&#146; outstanding common stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">C. Dennis Scott, a founder of the Company and
former Vice Chairman, entered into an advisory arrangement with
the Company and Buffets Holdings that expires in 2005. Under
Mr.&nbsp;Scott&#146;s advisory agreement, he received no cash
compensation after fiscal 2000. Mr.&nbsp;Scott purchased
approximately 0.5% of the shares of Buffets Holdings common
stock. These shares are subject to Buffets Holdings&#146; right
to repurchase these shares upon Mr.&nbsp;Scott&#146;s
termination as an advisor to Buffets Holdings at various prices
depending on whether Mr.&nbsp;Scott is terminated with or
without cause. Mr.&nbsp;Scott retains an office in
</FONT>

<P align="center"><FONT size="2">F-24
</FONT>

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">
<FONT size="2">San&nbsp;Diego at the Company&#146;s expense and
receives health, medical and other benefits comparable to those
made available to Company management through the end of calendar
year 2005. Mr.&nbsp;Scott is required to provide services to the
Company for no more than two days per month.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Robert M. Rosenberg, a director of the Buffets
Holdings&#146; Board of Directors, provided various advisory
services to the Company for an advisory fee of $35,000 during
fiscal 2003 and $3,500 during fiscal 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Buffets Holdings has entered into stockholder
agreements with certain members of management. These agreements
govern the five-year vesting of Buffets Holdings common stock,
transfer restrictions and agreements not to compete for two
years after their employment terminates. Some management
investors obtained recourse loans to purchase shares in Buffets
Holdings which were guaranteed by the Company. Each of the
management investors pledged his or her respective ownership
interests in the shares of Buffets Holdings and executed a
promissory note in favor of Buffets Holdings, whereby each
agreed to repay the corresponding amount of the guaranty,
together with interest at fixed rates ranging between 6% and
7%&nbsp;per annum at the earliest of (1)&nbsp;seven years,
(2)&nbsp;termination of employment with the Company or
(3)&nbsp;the sale, disposition or other transfer of the
management investor&#146;s ownership interest in the shares. The
guarantees totaled $0.5&nbsp;million as of July&nbsp;3, 2002,
$0.5&nbsp;million at July&nbsp;2, 2003 and $0.1&nbsp;million at
June&nbsp;30, 2004.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">An officer was advanced $315,000 on
February&nbsp;20, 2002 for a homestead purchase. Interest was
payable annually at a rate equal to the Company&#146;s interest
rate on its senior secured borrowing, up to a maximum of
12%&nbsp;per annum. The principal plus accrued but unpaid
interest was repaid in 2003 upon the officer&#146;s resignation.
</FONT>

<DIV>&nbsp;</DIV>

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

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">10</FONT></B></TD>
    <TD>
    <B><FONT size="2">Commitments and Contingencies</FONT></B></TD>
</TR>

</TABLE>

<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">Litigation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company is involved in various legal actions
arising in the ordinary course of business. In the opinion of
management, the ultimate disposition of these matters will not
have a material adverse effect on the Company&#146;s
consolidated financial position or the 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">Operating Leases</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company conducts most of its operations from
leased restaurant facilities, all of which are classified as
operating leases.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a schedule of future minimum
lease payments required under noncancelable operating leases as
of June&nbsp;30, 2004 (in thousands):
</FONT>

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

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="83%"><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="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><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">2005
    </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">53,913</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">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">52,713</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">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">50,482</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">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">48,346</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">2009
    </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">44,707</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">Thereafter
    </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">282,894</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>

</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 future minimum lease payments
    </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">533,055</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>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Minimum payments have not been reduced by minimum
sublease rentals of approximately $24.9&nbsp;million.
</FONT>

<P align="center"><FONT size="2">F-25
</FONT>

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain of these leases require additional rent
based on a percentage of net sales and may require additional
payments for real estate taxes and common area maintenance on
the properties. Many of these leases also contain renewal
options exercisable at the election of the Company. Under the
provisions of certain leases, there are certain escalations in
payments over the base lease term as well as renewal periods
which have been reflected in rent expense on a straight-line
basis over the life of the anticipated terms. Differences
between minimum lease payments and straight-line rent expense
are reflected as deferred lease obligations in the accompanying
consolidated balance sheets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Rent expense was as follows (in thousands):
</FONT>

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

<TR>
    <TD width="36%"><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>
    <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>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <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="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>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Twenty-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Six Week</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Transitional</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the Year</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">January&nbsp;2, 2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;3, 2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;2, 2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30, 2004</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Minimum rents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43,732</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">23,510</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,315</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,911</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">Contingent rents
    </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">1,343</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">943</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">2,207</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">2,983</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">Less: Sublease rents
    </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">(721</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">(440</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">(1,388</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">(2,739</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">Deferred rents
    </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">835</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">890</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">1,530</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">2,381</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">Percentage rents
    </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">2,559</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">1,419</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">1,955</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">1,954</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><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="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">47,748</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,322</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,619</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,490</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><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>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

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

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">11</FONT></B></TD>
    <TD>
    <B><FONT size="2">Transition Period Disclosure
    (Unaudited)</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following unaudited information for the
twenty-eight week period ended July&nbsp;28, 2001 and the
fifty-week period ended July&nbsp;3, 2002 are included for
comparison purposes (in thousands).
</FONT>

<CENTER>
<TABLE width="80%" 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="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="56%"><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="7%"><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 colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">For the</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Twenty-Eight</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Fifty-</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Week Period</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Week Period</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Ended</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;28, 2001</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">July&nbsp;3, 2002</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">RESTAURANT SALES
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">567,821</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,003,997</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">RESTAURANT COSTS:
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Food
    </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">180,058</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">309,862</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Labor
    </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">176,608</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">314,079</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Direct and occupancy
    </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">125,166</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">225,213</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total restaurant costs
    </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">481,832</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">849,154</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">ADVERTISING 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">15,708</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">26,281</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">GENERAL 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">26,700</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">49,556</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">GOODWILL AMORTIZATION
    </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">5,975</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">4,967</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OPERATING 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">37,606</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">74,039</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" 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">24,887</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">33,606</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INTEREST 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">(324</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">(586</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OTHER 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">(493</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">(1,145</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LOSS RELATED TO REFINANCING
    </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">&#151;</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">38,724</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INCOME BEFORE INCOME TAXES
    </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">13,536</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">3,440</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INCOME TAX 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">7,735</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">4,203</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,801</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(763</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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="center"><FONT size="2">F-26
</FONT>

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV>&nbsp;</DIV>

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

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">12</FONT></B></TD>
    <TD>
    <B><FONT size="2">Condensed Consolidating Financial
    Statements</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following condensed consolidating financial
statements are presented pursuant to Rule&nbsp;3-10 of
Regulation&nbsp;S-X. Buffets, Inc. is a subsidiary issuer of
11&nbsp;1/4%&nbsp;senior subordinated notes that are fully and
unconditionally guaranteed by its parent, Buffets Holdings, as
well as each of its subsidiaries including HomeTown Buffets,
Inc., OCB Restaurant Co., OCB Purchasing Co., Restaurant
Innovations, Inc., Distinctive Dining, Inc., Tahoe Joe&#146;s,
Inc., Buffets Leasing Company, LLC, HomeTown Leasing Company,
LLC, OCB Leasing Company, LLC, and Tahoe Joe&#146;s Leasing
Company, LLC. All guarantees are joint and several and the
subsidiary issuer and the subsidiary guarantors are 100% owned
by the parent company. There are certain restrictions on the
ability of the Company to obtain funds from its subsidiaries.
</FONT>

<P align="center"><FONT size="2">F-27
</FONT>

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="center">
<B><FONT size="2">Condensed Consolidating Balance
Sheet</FONT></B>

<DIV align="center">
<B><FONT size="2">As of July&nbsp;3, 2002</FONT></B>
</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="34%"><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="2%"><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="4%"><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="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="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>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Parent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Issuer</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Guarantors</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consolidated</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>
</TR>

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

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="23" align="left" valign="top">
    <B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CURRENT ASSETS:
    </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>
</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">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">227</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,077</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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">8,362</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">Receivables
    </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">&#151;</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">26,837</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">337,871</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">(356,026</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">8,682</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Inventories
    </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">&#151;</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">721</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">17,911</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">&#151;</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">18,632</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">Prepaid expenses and other current 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">&#151;</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">5,438</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">4,648</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">&#151;</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">10,086</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Deferred income taxes
    </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">&#151;</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">17,514</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">1,486</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">&#151;</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">19,000</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>

</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">Total current 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">58</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">50,737</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">369,993</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">(356,026</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">64,762</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">PROPERTY AND EQUIPMENT, 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">&#151;</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">11,491</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">186,859</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">&#151;</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">198,350</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">GOODWILL, 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">&#151;</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">18,730</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">293,433</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">&#151;</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">312,163</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">ASSETS HELD FOR SALE
    </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">&#151;</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">&#151;</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">24,952</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">&#151;</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">24,952</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OTHER ASSETS, 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">&#151;</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">412,192</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">5,755</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">(402,502</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">15,445</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>

</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">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">493,150</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">880,992</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(758,528</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">615,672</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>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="23"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="23" align="left" valign="top">
    <B><FONT size="2">LIABILITIES AND SHAREHOLDERS&#146; EQUITY
    (DEFICIT)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CURRENT LIABILITIES:
    </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>
</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">Accounts payable
    </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">391,901</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,243</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(356,725</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">37,419</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Accrued liabilities
    </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">12</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">56,729</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">35,713</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">&#151;</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">92,454</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">Income taxes payable
    </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">96</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">2,900</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">&#151;</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">(96</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">2,900</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Current maturities of long-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">&#151;</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">147</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">2,303</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">&#151;</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">2,450</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>

</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">Total current liabilities
    </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">108</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">451,677</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">40,259</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">(356,821</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">135,223</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LONG-TERM DEBT, net of current maturities
    </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">27,764</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">27,826</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">700,941</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">(265,000</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">491,531</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DEFERRED INCOME TAXES
    </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">&#151;</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">175</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">&#151;</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">&#151;</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">175</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DEFERRED LEASE OBLIGATIONS
    </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">&#151;</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">387</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">18,442</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">&#151;</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">18,829</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OTHER LONG-TERM LIABILITIES
    </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">&#151;</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">3,885</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">104</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">536</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">4,525</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>

</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">Total liabilities
    </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">27,872</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">483,950</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">759,746</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">(621,285</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">650,283</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>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">COMMITMENTS AND CONTINGENCIES
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">SHAREHOLDERS&#146; EQUITY (DEFICIT)
    </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>
</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">Common stock
    </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">32</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">&#151;</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">&#151;</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">&#151;</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">32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Additional paid in 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">&#151;</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">82,311</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">199,494</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">(281,805</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">&#151;</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">Retained earnings (accumulated deficit)
    </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">(27,846</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">(73,111</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">(78,248</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">144,562</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">(34,643</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>

</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">Total shareholders&#146; equity (deficit)
    </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">(27,814</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">9,200</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">121,246</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">(137,243</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">(34,611</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>

</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">Total liabilities and shareholders&#146; equity
    (deficit)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">493,150</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">880,992</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(758,528</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">615,672</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>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-28
</FONT>

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="center">
<B><FONT size="2">Condensed Consolidating Balance
Sheet</FONT></B>

<DIV align="center">
<B><FONT size="2">As of July&nbsp;2, 2003</FONT></B>
</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="34%"><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="2%"><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="4%"><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="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="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>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Parent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Issuer</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Guarantors</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consolidated</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>
</TR>

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

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="23" align="left" valign="top">
    <B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CURRENT ASSETS:
    </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>
</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">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,511</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,236</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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">15,855</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">Receivables
    </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">&#151;</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">14,965</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">341,403</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">(349,890</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">6,478</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Inventories
    </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">&#151;</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">824</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">17,638</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">&#151;</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">18,462</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">Prepaid expenses and other current 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">&#151;</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">2,981</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">5,058</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">&#151;</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">8,039</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Assets held for sale
    </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">&#151;</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">&#151;</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">1,390</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">&#151;</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">1,390</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">Deferred income taxes
    </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">&#151;</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">13,730</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">1,486</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">&#151;</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">15,216</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>

</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">Total current 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">108</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">41,011</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">374,211</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">(349,890</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">65,440</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">PROPERTY AND EQUIPMENT, 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">&#151;</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">10,427</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">143,713</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">&#151;</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">154,140</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">GOODWILL, 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">&#151;</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">18,730</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">293,433</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">&#151;</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">312,163</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DEFERRED INCOME TAXES
    </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">&#151;</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">2,932</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">&#151;</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">&#151;</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">2,932</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OTHER ASSETS, 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">&#151;</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">415,127</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">5,686</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">(402,502</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">18,311</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>

</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">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">488,227</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">817,043</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(752,392</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">552,986</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>

</TR>

<TR>
    <TD colspan="23"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="23" align="left" valign="top">
    <B><FONT size="2">LIABILITIES AND SHAREHOLDERS&#146; EQUITY
    (DEFICIT)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CURRENT LIABILITIES:
    </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>
</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">Accounts payable
    </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">391,486</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,909</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(350,618</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">43,777</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">Accrued liabilities
    </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">1,101</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">49,865</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">27,542</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">&#151;</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">78,508</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Income taxes payable
    </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">&#151;</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">3,401</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">1,386</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">&#151;</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">4,787</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">Current maturities of long-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">&#151;</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">104</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">1,631</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">&#151;</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">1,735</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>

</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">Total current liabilities
    </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">1,101</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">444,856</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">33,468</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">(350,618</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">128,807</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LONG-TERM DEBT, net of current maturities
    </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">27,364</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">23,521</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">633,502</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">(265,000</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">419,387</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DEFERRED LEASE OBLIGATIONS
    </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">&#151;</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">573</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">19,140</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">&#151;</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">19,713</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OTHER LONG-TERM LIABILITIES
    </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">&#151;</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">3,687</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">3,101</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">1,101</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">7,889</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>

</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">Total liabilities
    </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">28,465</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">472,637</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">689,211</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">(614,517</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">575,796</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>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">COMMITMENTS AND CONTINGENCIES
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">SHAREHOLDERS&#146; EQUITY (DEFICIT)
    </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>
</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">Common stock
    </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">32</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">&#151;</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">&#151;</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">&#151;</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">32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Additional paid in 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">&#151;</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">82,311</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">199,494</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">(281,805</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">&#151;</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">Retained earnings (accumulated deficit)
    </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">(28,389</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">(66,721</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">(71,662</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">143,930</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">(22,842</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>

</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">Total shareholders&#146; equity (deficit)
    </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">(28,357</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">15,590</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">127,832</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">(137,875</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">(22,810</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>

</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">Total liabilities and shareholders&#146; equity
    (deficit)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">488,227</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">817,043</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(752,392</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">552,986</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>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-29
</FONT>

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="center">
<B><FONT size="2">Condensed Consolidating Balance
Sheet</FONT></B>

<DIV align="center">
<B><FONT size="2">As of June&nbsp;30, 2004</FONT></B>
</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="34%"><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="2%"><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="4%"><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="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="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>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Parent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Issuer</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Guarantors</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consolidated</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>
</TR>

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

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="23" align="left" valign="top">
    <B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CURRENT ASSETS:
    </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>
</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">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">96</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,771</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,205</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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">26,072</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">Restricted cash and cash equivalents
    </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">&#151;</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">16,228</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">&#151;</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">&#151;</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">16,228</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Receivables
    </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">&#151;</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">41,056</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">318,430</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">(352,523</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">6,963</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">Inventories
    </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">&#151;</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">789</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">17,884</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">&#151;</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">18,673</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Income taxes receivable
    </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">1,619</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">&#151;</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">&#151;</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">(1,619</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">&#151;</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">Prepaid expenses and other current 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">&#151;</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">4,711</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">533</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">&#151;</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">5,244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Deferred income taxes
    </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">&#151;</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">14,429</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">1,486</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">&#151;</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">15,915</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>

</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">Total current 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">1,715</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">96,984</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">344,538</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">(354,142</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">89,095</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">PROPERTY AND EQUIPMENT, 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">&#151;</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">8,206</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">141,412</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">&#151;</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">149,618</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">GOODWILL, 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">&#151;</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">18,730</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">293,433</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">&#151;</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">312,163</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DEFERRED INCOME TAXES
    </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">&#151;</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">1,033</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">&#151;</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">&#151;</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">1,033</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OTHER ASSETS, 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">2,847</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">410,013</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">5,264</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">(402,502</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">15,622</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>

</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">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,562</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">534,966</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">784,647</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(756,644</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">567,531</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>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="23"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="23" align="left" valign="top">
    <B><FONT size="2">LIABILITIES AND SHAREHOLDERS&#146; EQUITY
    (DEFICIT)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CURRENT LIABILITIES:
    </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>
</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">Accounts payable
    </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">180</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">395,799</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">2,519</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">(355,218</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">43,280</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Accrued liabilities
    </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">&#151;</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">44,126</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">24,537</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">&#151;</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">68,663</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">Income taxes payable
    </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">&#151;</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">4,531</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">1,619</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">(1,619</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">4,531</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Current maturities of long-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">&#151;</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">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">2,162</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">&#151;</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">2,300</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>

</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">Total current liabilities
    </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">180</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">444,594</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">30,837</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">(356,837</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">118,774</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LONG-TERM DEBT, net of current maturities
    </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">76,300</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">25,184</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">659,555</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">(265,000</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">496,039</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DEFERRED LEASE OBLIGATIONS
    </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">&#151;</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">1,143</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">20,478</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">&#151;</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">21,621</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OTHER LONG-TERM LIABILITIES
    </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">&#151;</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">3,476</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">3,537</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">&#151;</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">7,013</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>

</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">Total liabilities
    </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">76,480</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">474,397</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">714,407</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">(621,837</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">643,447</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>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">COMMITMENTS AND CONTINGENCIES SHAREHOLDERS&#146;
    EQUITY (DEFICIT)
    </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>
</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">Common stock
    </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">32</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">&#151;</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">&#151;</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">&#151;</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">32</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Additional paid in 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">&#151;</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">82,311</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">199,494</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">(281,805</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">&#151;</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">Retained earnings (accumulated deficit)
    </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">(71,950</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">(21,742</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">(129,254</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">146,998</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">(75,948</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>

</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">Total shareholders&#146; equity (deficit)
    </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">(71,918</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">60,569</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">70,240</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">(134,807</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">(75,916</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>

</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">Total liabilities and shareholders&#146; equity
    (deficit)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,562</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">534,966</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">784,647</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(756,644</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">567,531</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>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-30
</FONT>

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="center">
<B><FONT size="2">Condensed Consolidating Statement of
Operations</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Year Ended January&nbsp;2,
2002</FONT></B>
</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="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><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="4%"><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="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="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>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Parent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Issuer</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Guarantors</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consolidated</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>
</TR>

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

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">RESTAURANT SALES
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,483</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,004,251</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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">1,044,734</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">RESTAURANT COSTS:
    </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>
</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">Food
    </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">&#151;</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">13,487</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">312,784</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">&#151;</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">326,271</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">Labor
    </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">&#151;</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">13,066</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">313,357</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">&#151;</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">326,423</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Direct and occupancy
    </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">&#151;</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">5,256</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">228,119</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">&#151;</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">233,375</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>

</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">Total restaurant costs
    </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">&#151;</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">31,809</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">854,260</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">&#151;</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">886,069</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">ADVERTISING 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">&#151;</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">1,017</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">26,623</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">&#151;</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">27,640</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">GENERAL 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">249</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">1,949</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">48,672</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">(301</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">50,569</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">GOODWILL AMORTIZATION
    </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">&#151;</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</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">10,285</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">&#151;</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">10,942</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>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OPERATING INCOME (LOSS)
    </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">(249</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">5,051</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">64,411</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">301</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">69,514</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" 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">&#151;</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">2,604</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">40,801</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">&#151;</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">43,405</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INTEREST 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">&#151;</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</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">(656</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">&#151;</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">(698</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">
    <FONT size="2">OTHER 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">&#151;</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">(420</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">(638</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</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">(1,040</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INCOME (LOSS)&nbsp;BEFORE INCOME TAXES
    </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">(249</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">2,909</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">24,904</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">283</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">27,847</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INCOME TAX EXPENSE (BENEFIT)
    </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">(96</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">1,406</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">13,982</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">&#151;</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">15,292</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>

</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">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(153</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,503</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,922</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">283</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">12,555</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>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-31
</FONT>

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="center">
<B><FONT size="2">Condensed Consolidating Statement of
Operations</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Twenty-Six Week Transitional Period
Ended July&nbsp;3, 2002</FONT></B>
</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="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><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="4%"><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="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="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>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Parent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Issuer</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Guarantors</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consolidated</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>
</TR>

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

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">RESTAURANT SALES
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,196</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">506,888</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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">527,084</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">RESTAURANT COSTS:
    </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>
</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">Food
    </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">&#151;</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">6,669</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">156,980</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">&#151;</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">163,649</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">Labor
    </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">&#151;</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">6,414</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">157,850</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">&#151;</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">164,264</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Direct and occupancy
    </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">&#151;</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">2,517</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">114,487</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">&#151;</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">117,004</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>

</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">Total restaurant costs
    </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">&#151;</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">15,600</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">429,317</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">&#151;</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">444,917</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">ADVERTISING 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">&#151;</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">525</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">13,824</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">&#151;</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">14,349</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">GENERAL 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">133</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">979</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">24,718</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">(143</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">25,687</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>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OPERATING INCOME (LOSS)
    </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">(133</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">3,092</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">39,029</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">143</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">42,131</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" 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">12</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">908</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">14,168</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">&#151;</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">15,088</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INTEREST 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">&#151;</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 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">(196</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">&#151;</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">(212</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LOSS RELATED TO REFINANCING
    </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">248</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">38,476</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">&#151;</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">&#151;</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">38,724</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OTHER 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">&#151;</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</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">(559</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">197</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">(598</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INCOME (LOSS)&nbsp;BEFORE INCOME TAXES
    </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">(393</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">(36,040</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">25,616</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">(54</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">(10,871</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">
    <FONT size="2">INCOME TAX EXPENSE (BENEFIT)
    </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">96</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">(11,866</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">8,416</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">&#151;</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">(3,354</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>

</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">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(489</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(24,174</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(54</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">(7,517</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-32
</FONT>

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="center">
<B><FONT size="2">Condensed Consolidating Statement of
Operations</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Year Ended July&nbsp;2, 2003</FONT></B>
</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="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><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="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="3%"><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="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>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Parent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Issuer</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Guarantors</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consolidated</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>
</TR>

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

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">RESTAURANT SALES
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38,983</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">946,303</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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">985,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">RESTAURANT COSTS:
    </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>
</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">Food
    </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">&#151;</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">13,122</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">298,769</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">&#151;</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">311,891</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">Labor
    </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">&#151;</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">12,570</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">300,962</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">&#151;</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">313,532</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Direct and occupancy
    </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">&#151;</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">5,189</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">220,228</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">&#151;</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">225,417</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>

</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">Total restaurant costs
    </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">&#151;</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">30,881</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">819,959</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">&#151;</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">850,840</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">ADVERTISING 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">&#151;</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">1,131</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">27,458</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">&#151;</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">28,589</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">GENERAL 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">&#151;</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">1,796</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">43,586</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">&#151;</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">45,382</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">IMPAIRMENT OF 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">&#151;</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">&#151;</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">4,803</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">&#151;</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">4,803</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">GAIN ON SALE OF ORIGINAL ROADHOUSE GRILL
    RESTAURANTS
    </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">&#151;</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">&#151;</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">(7,088</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">&#151;</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">(7,088</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">
    <FONT size="2">LOSS ON SALE LEASEBACK TRANSACTIONS
    </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">&#151;</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">&#151;</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">5,856</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">&#151;</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">5,856</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>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OPERATING 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">&#151;</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">5,175</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">51,729</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">&#151;</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">56,904</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" 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">1,089</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">2,409</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">37,737</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">&#151;</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">41,235</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INTEREST 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">&#151;</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">(307</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">&#151;</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">&#151;</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">(307</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">
    <FONT size="2">OTHER 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">&#151;</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">(1,270</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">&#151;</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">&#151;</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">(1,270</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INCOME (LOSS) BEFORE INCOME TAXES
    </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">(1,089</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">4,343</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">13,992</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">&#151;</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">17,246</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INCOME TAX 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">&#151;</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">955</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">4,364</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">&#151;</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">5,319</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>

</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">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,089</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,388</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,628</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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">11,927</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>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-33
</FONT>

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="center">
<B><FONT size="2">Condensed Consolidating Statement of
Operations</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Year Ended June&nbsp;30,
2004</FONT></B>
</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="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><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="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="3%"><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="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>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Parent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Issuer</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Guarantors</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consolidated</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>
</TR>

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

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">RESTAURANT SALES
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,851</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">902,980</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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">942,831</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">RESTAURANT COSTS:
    </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>
</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">Food
    </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">&#151;</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">14,072</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">293,735</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 align="right" valign="bottom" nowrap><FONT size="2">307,807</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">Labor
    </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">&#151;</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">12,544</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">274,923</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 align="right" valign="bottom" nowrap><FONT size="2">287,467</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Direct and occupancy
    </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">&#151;</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">5,393</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">211,995</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">&#151;</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">217,388</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>

</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">Total restaurant costs
    </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">&#151;</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">32,009</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">780,653</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">&#151;</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">812,662</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">ADVERTISING 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">&#151;</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">1,093</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">24,761</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">&#151;</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">25,854</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">GENERAL 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">&#151;</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">1,806</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">40,916</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">&#151;</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">42,722</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">IMPAIRMENT OF 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">&#151;</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">&#151;</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">1,878</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">&#151;</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">1,878</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">FINANCING-RELATED COMPENSATION 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">1,466</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">774</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">&#151;</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">&#151;</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">2,240</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>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OPERATING INCOME (LOSS)
    </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">(1,466</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">4,169</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">54,772</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">&#151;</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">57,475</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" 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">2,164</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">2,247</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">35,198</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">&#151;</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">39,609</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INTEREST 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">&#151;</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">(424</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">&#151;</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">&#151;</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">(424</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LOSS RELATED TO REFINANCING
    </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">575</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">4,201</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">&#151;</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">&#151;</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">4,776</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LOSS RELATED TO EARLY EXTINGUISHMENT OF 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">&#151;</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">5,275</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">&#151;</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">&#151;</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">5,275</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">OTHER 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">&#151;</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">(1,379</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">&#151;</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">&#151;</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">(1,379</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INCOME (LOSS)&nbsp;BEFORE INCOME TAXES
    </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">(4,205</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">(5,751</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">19,574</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">&#151;</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">9,618</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INCOME TAX EXPENSE (BENEFIT)
    </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">(1,619</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">(1,359</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">4,626</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">&#151;</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">1,648</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>

</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">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,586</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,392</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,948</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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">7,970</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>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-34
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="center">
<B><FONT size="2">Condensed Consolidating Statement of Cash
Flows</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Year Ended January&nbsp;2,
2002</FONT></B>
</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="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><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>
    <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>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><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="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>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Parent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Issuer</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Guarantors</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consolidated</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>
</TR>

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

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(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">
    <FONT size="2">OPERATING ACTIVITIES:
    </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>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(153</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,503</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,922</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">283</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">12,555</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjustments to reconcile net income (loss) to net
    cash provided by (used in) operating activities:
    </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>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" 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><FONT size="2">&nbsp;</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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,113</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">50,291</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">&#151;</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">53,404</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization of debt issuance costs
    </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">&#151;</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">234</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">3,671</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">&#151;</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">3,905</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accretion of original issue discount
    </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">&#151;</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</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">727</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">&#151;</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">773</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred 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">&#151;</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">76</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">1,193</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">&#151;</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">1,269</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Asset write-downs
    </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">&#151;</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">&#151;</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">491</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">&#151;</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">491</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred income taxes
    </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">&#151;</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">19</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">&#151;</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</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss on disposal of 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">&#151;</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">&#151;</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">361</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">&#151;</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">361</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Receivables
    </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">81</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">2,071</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">(3,221</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">&#151;</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">(1,069</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Inventories
    </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">&#151;</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">30</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">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">&#151;</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">690</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Prepaid expenses and other 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">&#151;</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">(1,068</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">(503</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">&#151;</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">(1,571</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Accounts payable
    </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">&#151;</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">22,141</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">(30,080</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">&#151;</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">(7,939</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Accrued and other liabilities
    </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">&#151;</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">3,181</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">(341</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">(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">2,837</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income taxes payable/refundable
    </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">(96</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">3,204</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">&#151;</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">&#151;</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">3,108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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><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 (used in) 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">(168</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">34,533</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">34,190</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">280</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">68,835</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INVESTING ACTIVITIES:
    </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>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sale leaseback transactions
    </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">&#151;</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">&#151;</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">39,075</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">&#151;</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">39,075</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of fixed 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">&#151;</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">(8,228</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">(29,868</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">&#151;</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">(38,096</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Corporate cash advances (payments)
    </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">&#151;</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">(18,856</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">19,136</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">(280</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sale of other 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">&#151;</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">&#151;</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">1,596</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">&#151;</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">1,596</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by (used in) investing
    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">&#151;</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">(27,084</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">29,939</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">(280</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">2,575</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">FINANCING ACTIVITIES:
    </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>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repayment of 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">&#151;</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">(3,234</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">(50,662</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">&#151;</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">(53,896</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repurchase of common stock
    </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</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">&#151;</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">&#151;</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">&#151;</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">(71</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from issuance of common stock
    </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">200</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">&#151;</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">&#151;</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">&#151;</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">200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repayment of revolving credit facility
    </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">&#151;</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">(300</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">(4,700</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">&#151;</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">(5,000</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Debt issuance costs
    </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">&#151;</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</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">(774</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">&#151;</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">(823</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Net cash provided by (used in) financing
    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">129</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">(3,583</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">(56,136</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">&#151;</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">(59,590</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">NET CHANGE IN CASH AND CASH EQUIVALENTS
    </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">(39</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">3,866</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">7,993</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">&#151;</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">11,820</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CASH AND CASH EQUIVALENTS, 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">97</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">11,806</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">3,890</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">&#151;</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">15,793</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CASH AND CASH EQUIVALENTS, end of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,672</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,883</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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">27,613</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-35
</FONT>

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="center">
<B><FONT size="2">Condensed Consolidating Statement of Cash
Flows</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Twenty-Six Week Transitional Period
Ended July&nbsp;3, 2002</FONT></B>
</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="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="33%"><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="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>
    <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>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><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="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Parent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Issuer</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Guarantors</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consolidated</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>
</TR>

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

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(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">
    <FONT size="2">OPERATING ACTIVITIES:
    </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>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(489</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(24,174</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(54</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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">(7,517</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjustments to reconcile net income (loss) to net
    cash provided by (used in) operating activities:
    </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>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" 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><FONT size="2">&nbsp;</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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,726</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">18,683</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">&#151;</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">20,409</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization of debt issuance costs
    </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">&#151;</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">97</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">1,520</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">&#151;</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">1,617</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss related to refinancing:
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Write-off of debt issuance costs
    </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">&#151;</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">11,022</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">&#151;</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">&#151;</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">11,022</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accrued redemption fees
    </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">&#151;</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">17,000</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">&#151;</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">&#151;</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">17,000</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Original issue discount expensed
    </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">&#151;</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">4,107</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">&#151;</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">&#151;</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">4,107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accretion of original issue discount
    </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">&#151;</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</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">336</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">&#151;</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">357</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss related to early extinguishment of 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">&#151;</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</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">577</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">&#151;</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">614</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred income taxes
    </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">&#151;</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">(168</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">(2,630</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">&#151;</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">(2,798</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss on disposal of 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">&#151;</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">&#151;</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">89</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">&#151;</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">89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Changes in assets and liabilities:
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Receivables
    </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">(123</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">368</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">(1,377</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">150</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">(982</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Inventories
    </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">&#151;</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">(19</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">(174</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">&#151;</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">(193</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Prepaid expenses and other 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">&#151;</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">(1,449</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">(108</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">&#151;</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">(1,557</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Accounts payable
    </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">&#151;</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">8,493</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">(2,094</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">&#151;</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">6,399</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accrued and other liabilities
    </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">12</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">13,777</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">(20,979</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">&#151;</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">(7,190</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Income taxes payable/refundable
    </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">192</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">(2,223</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">&#151;</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">(96</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">(2,127</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Net cash provided by (used in) 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">(408</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">28,615</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">11,043</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">&#151;</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">39,250</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INVESTING ACTIVITIES:
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sale leaseback transactions
    </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">&#151;</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">2,281</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">&#151;</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">&#151;</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">2,281</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of fixed 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">&#151;</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">(2,226</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">(12,054</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">&#151;</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">(14,280</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Corporate cash advances (payments)
    </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">&#151;</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">109,601</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">(109,601</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">&#151;</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sale of other 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">&#151;</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">&#151;</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">662</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">&#151;</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">662</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Net cash provided by (used in) investing
    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">&#151;</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">109,656</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">(120,993</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">&#151;</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">(11,337</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">FINANCING ACTIVITIES:
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repayment of 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">&#151;</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">(21,198</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">(332,100</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">&#151;</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">(353,298</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Redemption of preferred stock warrants
    </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">(7,200</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">&#151;</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">&#151;</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">&#151;</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">(7,200</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Redemption of preferred stock
    </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">(108,227</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">&#151;</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">&#151;</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">&#151;</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">(108,227</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repurchase of common stock
    </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">(291</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">&#151;</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">&#151;</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">&#151;</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">(291</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from issuance of subordinated 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">&#151;</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">13,273</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">207,944</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">&#151;</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">221,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from credit facility
    </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">&#151;</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">14,700</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">230,300</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">&#151;</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">245,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividends
    </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">116,126</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">(148,415</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">&#151;</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">&#151;</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">(32,289</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Debt issuance costs
    </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">&#151;</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">(12,076</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">&#151;</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">&#151;</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">(12,076</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Net cash provided by (used in) investing
    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">408</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">(153,716</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">106,144</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">&#151;</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">(47,164</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">NET CHANGE IN CASH AND CASH EQUIVALENTS
    </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">&#151;</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">(15,445</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">(3,806</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">&#151;</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">(19,251</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CASH AND CASH EQUIVALENTS, 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">58</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">15,672</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">11,883</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">&#151;</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">27,613</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CASH AND CASH EQUIVALENTS, end of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">227</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,077</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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">8,362</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-36
</FONT>

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="center">
<B><FONT size="2">Condensed Consolidating Statement of Cash
Flows</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Year Ended July&nbsp;2, 2003</FONT></B>
</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="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><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>
    <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>
    <TD width="3%"><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="3%"><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="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Parent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Issuer</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Guarantors</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consolidated</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>
</TR>

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

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(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">
    <FONT size="2">OPERATING ACTIVITIES:
    </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>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,089</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,388</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,628</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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">11,927</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjustments to reconcile net income (loss) to net
    cash provided by (used in) operating activities:
    </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>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" 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><FONT size="2">&nbsp;</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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,510</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">33,375</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">&#151;</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">36,885</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization of debt issuance costs
    </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">&#151;</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">71</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">1,111</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">&#151;</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">1,182</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accretion of original issue discount
    </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">&#151;</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</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">695</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">&#151;</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">739</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Impairment of 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">&#151;</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">&#151;</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">4,803</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">&#151;</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">4,803</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred income taxes
    </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">&#151;</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</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">636</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">&#151;</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">677</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gain on sale of Original Roadhouse Grill
    restaurants
    </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">&#151;</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">&#151;</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">(7,088</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">&#151;</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">(7,088</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss on disposal of 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">&#151;</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">&#151;</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">565</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">&#151;</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">565</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss on sale leaseback transactions
    </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">&#151;</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">&#151;</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">5,856</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">&#151;</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">5,856</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Changes in assets and liabilities:
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Receivables
    </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">96</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">4,759</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">(2,509</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">&#151;</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">2,346</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Inventories
    </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">&#151;</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">(103</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">273</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">&#151;</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">170</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Prepaid expenses and other 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">&#151;</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">2,457</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">(410</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">&#151;</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">2,047</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts payable
    </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">&#151;</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">7,684</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">666</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">&#151;</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">8,350</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accrued and other liabilities
    </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">1,089</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">(5,608</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">(8,171</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">&#151;</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">(12,690</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Income taxes payable/refundable
    </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">(96</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">501</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">1,482</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">&#151;</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">1,887</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">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">&#151;</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">16,744</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">40,912</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">&#151;</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">57,656</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INVESTING ACTIVITIES:
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sale leaseback transactions
    </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">&#151;</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">&#151;</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">26,117</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">&#151;</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">26,117</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sale of Original Roadhouse Grill
    restaurants
    </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">&#151;</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">&#151;</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">25,850</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">&#151;</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">25,850</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of fixed 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">&#151;</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">(2,423</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">(23,299</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">&#151;</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">(25,722</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Corporate cash advances (payments)
    </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">&#151;</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">(883</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">883</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">&#151;</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sale of other 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">&#151;</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">&#151;</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">417</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">&#151;</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">417</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by (used in) investing
    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">&#151;</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">(3,306</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">29,968</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">&#151;</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">26,662</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">FINANCING ACTIVITIES:
    </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>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repayment of 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">&#151;</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">(4,392</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">(68,806</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">&#151;</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">(73,198</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Redemption of subordinated 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">(400</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">&#151;</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">&#151;</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">&#151;</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">(400</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repurchase of common stock
    </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">(576</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">&#151;</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">&#151;</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">&#151;</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">(576</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from issuance of common stock
    </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">450</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">&#151;</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">&#151;</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">&#151;</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</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividends
    </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">576</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">(576</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">&#151;</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">&#151;</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Debt issuance costs
    </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">&#151;</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">(186</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">(2,915</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">&#151;</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">(3,101</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by (used in) investing
    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">50</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">(5,154</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">(71,721</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">&#151;</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">(76,825</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">NET CHANGE IN CASH AND CASH EQUIVALENTS
    </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">50</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">8,284</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">(841</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">&#151;</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">7,493</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CASH AND CASH EQUIVALENTS, 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">58</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">227</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">8,077</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">&#151;</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">8,362</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CASH AND CASH EQUIVALENTS, end of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,511</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,236</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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">15,855</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-37
</FONT>

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<P align="center">
<B><FONT size="2">Condensed Consolidating Statement of Cash
Flows</FONT></B>

<DIV align="center">
<B><FONT size="2">For the Year Ended June&nbsp;30,
2004</FONT></B>
</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="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="36%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><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>
    <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>
    <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="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subsidiary</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Parent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Issuer</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Guarantors</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Consolidated</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>
</TR>

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

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">(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">
    <FONT size="2">OPERATING ACTIVITIES:
    </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>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,586</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,392</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,948</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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">7,970</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjustments to reconcile net income (loss) to net
    cash provided by operating activities:
    </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>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" 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><FONT size="2">&nbsp;</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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,655</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">30,152</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">&#151;</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">33,807</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amortization of debt issuance costs
    </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">&#151;</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">82</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">1,288</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">&#151;</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">1,370</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss related to refinancing:
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Write-off of debt issuance costs
    </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">&#151;</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">4,201</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">&#151;</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">&#151;</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">4,201</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accretion of original issue discount
    </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">1,227</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</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">773</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">&#151;</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">2,049</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss related to early extinguishment of 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">&#151;</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">5,275</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">&#151;</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">&#151;</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">5,275</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Impairment of 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">&#151;</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">&#151;</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">1,878</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">&#151;</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">1,878</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred income taxes
    </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">&#151;</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">72</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">1,128</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">&#151;</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">1,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss on disposal of 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">&#151;</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">&#151;</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">305</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">&#151;</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">305</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Receivables
    </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">&#151;</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">75,747</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">(74,123</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">(1,859</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">(235</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Inventories
    </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">&#151;</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">(428</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">(246</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">&#151;</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">(674</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Prepaid expenses and other 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">&#151;</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">(1,730</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">4,525</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">&#151;</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">2,795</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts payable
    </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">180</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">(287</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">(390</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">&#151;</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">(497</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Accrued and other liabilities
    </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">(1,101</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">(4,592</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">(3,005</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">&#151;</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">(8,698</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Income taxes payable/refundable
    </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">(1,619</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">1,130</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">233</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">&#151;</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">(256</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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><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 (used in) 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">(3,899</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">78,782</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">(22,534</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">(1,859</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">50,490</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INVESTING ACTIVITIES:
    </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>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sale leaseback transactions
    </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">&#151;</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">&#151;</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">2,710</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">&#151;</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">2,710</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase of fixed 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">&#151;</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">(1,432</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">(31,575</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">&#151;</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">(33,007</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Corporate cash advances (payments)
    </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">&#151;</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">1,623</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">(3,482</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">1,859</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Acquisition of 20% minority interest in Tahoe
    Joe&#146;s 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">&#151;</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">&#151;</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">(370</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">&#151;</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">(370</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sale of other 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">&#151;</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">&#151;</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">2,284</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">&#151;</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">2,284</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Net cash provided by (used in) investing
    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">&#151;</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">191</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">(30,433</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">1,859</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">(28,383</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">FINANCING ACTIVITIES:
    </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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repayment of 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">&#151;</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">(10,377</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">(162,576</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">&#151;</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">(172,953</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Redemption of subordinated 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">(27,364</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">&#151;</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">&#151;</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">&#151;</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">(27,364</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repurchase of common stock
    </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">(380</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">&#151;</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">&#151;</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">&#151;</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">(380</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from issuance of common stock
    </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">241</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">&#151;</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">&#151;</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">&#151;</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">241</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from issuance of senior discount 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">75,073</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">&#151;</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">&#151;</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">&#151;</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">75,073</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Unrestricted cash proceeds from credit facility
    </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">&#151;</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">11,718</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">183,582</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">&#151;</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">195,300</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Initial restricted cash proceeds from credit
    facility
    </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">&#151;</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">2,082</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">32,618</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">&#151;</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">34,700</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Restricted cash proceeds from credit facility
    available as of year end
    </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">&#151;</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">(16,228</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">&#151;</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">&#151;</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">(16,228</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Use of restricted cash for early extinguishment
    of 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">&#151;</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">(18,472</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">&#151;</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">&#151;</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">(18,472</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Use of unrestricted cash for early extinguishment
    of 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">&#151;</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">(918</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">(14,382</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">&#151;</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">(15,300</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividends
    </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">(40,836</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">(20,101</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">&#151;</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">&#151;</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">(60,937</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Debt issuance costs
    </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">(2,847</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">(163</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">(2,560</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">&#151;</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">(5,570</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <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">Net cash provided by (used in) investing
    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">3,887</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">(52,459</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">36,682</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">&#151;</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">(11,890</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">NET CHANGE IN CASH AND CASH EQUIVALENTS
    </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">(12</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">26,514</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">(16,285</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">&#151;</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">10,217</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CASH AND CASH EQUIVALENTS, 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">108</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">8,511</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">7,236</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">&#151;</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">15,855</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="4"><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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CASH AND CASH EQUIVALENTS, end of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">96</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,025</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(9,049</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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">26,072</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-38
</FONT>

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

<DIV align="center">
<B><FONT size="2">BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151;&nbsp;(Continued)</FONT></B>

<DIV>&nbsp;</DIV>

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

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">13</FONT></B></TD>
    <TD>
    <B><FONT size="2">Subsequent Event</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On August&nbsp;27, 2004, the Company filed a
registration statement with the Securities and Exchange
Commission in relation to a planned initial public offering of
an as yet undetermined amount of Income Deposit Securities
(&#147;IDSs&#148;), common stock and senior subordinated notes.
In conjunction with this planned offering, Buffets, Inc. plans
to issue an as yet undetermined amount of senior notes as well
as borrow an as yet undetermined amount under its credit
facility which will be amended in connection with the offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company intends to use the net proceeds from
this planned offering, net proceeds from the planned offering of
senior notes by Buffets, Inc., borrowings under Buffets,
Inc.&#146;s amended credit facility and cash on hand among other
things to repay all outstanding borrowings under Buffets,
Inc.&#146;s existing credit facility, repurchase Buffets,
Inc.&#146;s 11&nbsp;1/4%&nbsp;senior subordinated notes and
repurchase or redeem Buffets Holdings&#146;
13&nbsp;7/8%&nbsp;senior discount notes.
</FONT>

<P align="center"><FONT size="2">F-39
</FONT>

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

<P align="center">
<B><FONT size="2">PART&nbsp;II</FONT></B>

<P align="center">
<B><FONT size="2">INFORMATION NOT REQUIRED IN
PROSPECTUS</FONT></B>

<DIV>&nbsp;</DIV>

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

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;13.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Other Expenses of Issuance and
    Distribution.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following sets forth the estimated expenses
and costs (other than underwriting discounts and commissions)
expected to be incurred in connection with the issuance and
distribution of the IDSs and senior subordinated notes
registered hereby:
</FONT>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="84%"><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="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><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">SEC registration fee
    </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">69,685</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">NASD fee
    </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">30,500</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">Printing and engraving 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">*</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">Accounting fees and 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">*</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">Legal fees and 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">*</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">Blue Sky fees and 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">*</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">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2">listing
    application fee
    </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">*</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">Transfer agent fees and 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">*</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">Miscellaneous
    </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">*</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>

</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
    </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">*</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>

</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="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">*&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To be completed by amendment
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

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

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;14.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Indemnification of Directors and
    Officers.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Section&nbsp;145 of the Delaware General
Corporation Law (the &#147;DGCL&#148;) grants a Delaware
corporation the power to indemnify any director, officer,
employee or agent against reasonable expenses (including
attorneys&#146; fees) incurred by him in connection with any
proceeding brought by or on behalf of the corporation and
against judgments, fines, settlements and reasonable expenses
(including attorneys&#146; fees) incurred by him in connection
with any other proceeding, if (a)&nbsp;he acted in good faith
and in a manner he reasonably believed to be in or not opposed
to the best interests of the corporation, and (b)&nbsp;in the
case of any criminal proceeding, he had no reasonable cause to
believe his conduct was unlawful. Except as ordered by a court,
however, no indemnification is to be made in connection with any
proceeding brought by or in the right of the corporation where
the person involved is adjudged to be liable to the corporation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Section&nbsp;8 of our amended certificate of
incorporation and Section&nbsp;8.1 of our by-laws provide that
we shall indemnify and hold harmless, to the extent permitted by
applicable law, any person who was or is made or is threatened
to be made a party in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a
&#147;proceeding&#148;) by reason of the fact that he, or a
person for whom he is the legal representative, is or was a
director or officer of the corporation or is or was serving at
the request of the corporation as a director or officer of any
other corporation or in a capacity with comparable authority or
responsibilities for a partnership, joint venture, trust,
employee benefit plan or other enterprise against judgments,
fines, penalties, excise taxes, amounts paid in settlement and
costs, charges and expenses (including attorney&#146;s fees,
disbursements and other charges). Persons who are not directors
or officers of the corporation (or otherwise entitled to
indemnification) may be similarly indemnified in respect of
service to the corporation or to an other entity at the request
of the corporation to the extent our board of directors at any
time specifies that such persons are entitled to such benefits.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Section&nbsp;102 of the DGCL permits the
limitation of directors&#146; personal liability to the
corporation or its stockholders for monetary damages for breach
of fiduciary duties as a director except for (i)&nbsp;any breach
of the director&#146;s duty of loyalty to the corporation or its
stockholders, (ii)&nbsp;acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
the law, (iii)&nbsp;breaches under section&nbsp;174 of the DGCL,
which relate to unlawful payments of dividends or unlawful stock
repurchase or redemptions, and (iv)&nbsp;any transaction from
which the director derived an improper personal benefit.
</FONT>

<P align="center"><FONT size="2">II-1
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Section&nbsp;7 of our amended certificate of
incorporation limits the personal liability of our directors to
the fullest extent permitted by paragraph&nbsp;(7)&nbsp;of
subsection&nbsp;(b)&nbsp;of section&nbsp;102 of the DGCL.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each of Buffets, Inc., Distinctive Dining, Inc.,
HomeTown Buffet Merger Company, Inc., OCB Purchasing Co., OCB
Restaurant Co., and Restaurant Innovations, Inc. (each, a
&#147;Minnesota Corporation&#148;) is subject to the Minnesota
Business Corporation Act (the &#147;Corporation Act&#148;).
Section&nbsp;302A.521 of the Corporation Act provides that,
subject to such prohibition or conditions as are set forth in
its articles of incorporation or bylaws, a corporation must
indemnify an officer or director who is made or threatened to be
made a party to a proceeding by reason of such person&#146;s
present or former official capacity against judgments,
penalties, fines, settlements and reasonable expenses, including
attorneys&#146; fees and disbursements, incurred by such person
in connection with the proceeding, if certain criteria are met.
These criteria, all of which must be met by the person seeking
indemnification, are (a)&nbsp;that such person has not been
indemnified by another organization or employee benefit plan for
the same judgments, penalties, fines, settlements and expenses;
(b)&nbsp;that such person acted in good faith; (c)&nbsp;that no
improper personal benefit was obtained by such person and such
person satisfied certain statutory conflicts of interest
provisions, if applicable; (d)&nbsp;that, in the case of a
criminal proceeding, such person had no reasonable cause to
believe that the conduct was unlawful; and (e)&nbsp;that such
person acted in a manner he reasonably believed was in the best
interests of the corporation, or, in the case of conduct while
serving as a director, officer, partner, trustee, employee or
agent of another organization or employee benefit plan, not
opposed to the best interests of the corporation.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The bylaws of each Minnesota Corporation requires
the corporation to provide indemnification to its officers,
directors, employees and agents to the full extent permitted by
the laws of the State of Minnesota.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The articles of incorporation of each Minnesota
Corporation eliminates the personal liability of its directors
to the corporation and its shareholders for monetary damages for
breach of fiduciary duty, other than liability of a director
(a)&nbsp;for breach of the director&#146;s duty of loyalty to
the corporation or its shareholders; (b)&nbsp;for acts or
omissions not in good faith that involve intentional misconduct
or a knowing violation of law; (c)&nbsp;under Section 302A.559
(liability for illegal distributions to shareholders) or 80A.23
(liability for violations of the anti-fraud or registration
provisions of state securities laws) of the Minnesota Statutes;
(d)&nbsp;for any transaction from which the director derived an
improper personal benefit; or (e)&nbsp;for any act or omission
occurring prior to the effective date of the articles.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each of Buffets Leasing Company, LLC, HomeTown
Leasing Company, LLC, OCB Leasing Company, LLC and Tahoe
Joe&#146;s Leasing Company, LLC (each, a &#147;Minnesota
LLC&#148;) is a limited liability company organized under the
Minnesota Limited Liability Company Act (the &#147;LLC
Act&#148;). Section&nbsp;322B.699 of the LLC Act provides that,
subject to such prohibition or conditions as are set forth in
its articles of organization or bylaws, a limited liability
company must indemnify its managers or governors who is made or
threatened to be made a party to a proceeding by reason of such
person&#146;s present or former official capacity against
judgments, penalties, fines, settlements and reasonable
expenses, including attorneys&#146; fees and disbursements,
incurred by such person in connection with the proceeding, if
certain criteria are met. These criteria, all of which must be
met by the person seeking indemnification, are (a)&nbsp;that
such person has not been indemnified by another organization or
employee benefit plan for the same judgments, penalties, fines,
settlements and expenses; (b)&nbsp;that such person acted in
good faith; (c)&nbsp;that no improper personal benefit was
obtained by such person and such person satisfied certain
statutory conflicts of interest provisions, if applicable;
(d)&nbsp;that, in the case of a criminal proceeding, such person
had no reasonable cause to believe that the conduct was
unlawful; and (e)&nbsp;that such person acted in a manner he
reasonably believed was in the best interests of the company,
or, in the case of conduct while serving as a director, officer,
partner, trustee, employee or agent of another organization or
employee benefit plan, not opposed to the best interests of the
company.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The bylaws of each Minnesota LLC requires the
company to provide indemnification to its managers and governors
for any expenses and liabilities incurred by such persons by
reason of their former or present official capacity with the
company to the fullest extent required or permitted by Section
322B.699 of the LLC Act, or as required or permitted by
applicable law.
</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 articles of organization of each Minnesota
LLC eliminates the personal liability of its governors to the
company and its members for monetary damages for breach of
fiduciary duty, other than liability of a governor (a)&nbsp;for
breach of the governor&#146;s duty of loyalty to the company or
its members; (b)&nbsp;for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law; (c)&nbsp;under Sections&nbsp;322B.56 (liability for illegal
distributions to members) or 80A.23 (liability for violations of
the anti-fraud or registration provisions of state securities
laws) of the Minnesota Statutes; (d)&nbsp;for any transaction
from which the governor derived an improper personal benefit; or
(e)&nbsp;for any act or omission occurring prior to the
effective date of the articles.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors,
officers or persons controlling the registrant pursuant to the
foregoing provisions, the registrant has been informed that in
the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is
therefore unenforceable.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We maintain directors&#146; and officers&#146;
liability insurance for our executive officers and certain of
our directors.
</FONT>

<DIV>&nbsp;</DIV>

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

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;15.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Recent Sales of Unregistered
    Securities.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the three years prior to the filing of this
registration statement, we issued and sold the following
unregistered securities:
</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;On October&nbsp;11, 2001, we granted
    options to purchase an aggregate of 3,256&nbsp;shares of our
    common stock to certain of our employees, each at an exercise
    price of $26.11&nbsp;per share.
    </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;On December&nbsp;18, 2001, we granted
    options to purchase an aggregate of 6,600&nbsp;shares of our
    common stock to certain of our employees, each at an exercise
    price of $26.11&nbsp;per share.
    </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;On January&nbsp;3, 2002, we granted
    options to purchase an aggregate of 1,268&nbsp;shares of our
    common stock to certain of our employees, each at an exercise
    price of $32.09&nbsp;per share.
    </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;On April&nbsp;25, 2002, we granted
    options to purchase an aggregate of 9,525&nbsp;shares of our
    common stock to certain of our employees, each at an exercise
    price of $41.07&nbsp;per share.
    </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;On June&nbsp;28, 2002, we issued
    $7.8&nbsp;million aggregate principal amount of Series&nbsp;A
    Senior Subordinated Notes due 2011 to our preferred stockholders
    as part of the redemption of our senior preferred stock and
    $20.0&nbsp;million aggregate principal amount of Series&nbsp;B
    Junior Subordinated Notes due 2011 as a dividend to holders of
    our common stock and holders of warrants to purchase our common
    stock. The subordinated notes bore interest at 3%&nbsp;per annum
    from June&nbsp;28, 2002 to through December&nbsp;31, 2002, and
    thereafter bore interest at the rate of 4.75%&nbsp;per annum.
    </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;On May&nbsp;22, 2002 we issued an
    aggregate of 14,625&nbsp;shares of our common stock to certain
    of our employees.
    </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;On July&nbsp;4, 2002, we granted options
    to purchase an aggregate of 1,375&nbsp;shares of our common
    stock to certain of our employees, each at an exercise price of
    $25.56&nbsp;per share.
    </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;On April&nbsp;10, 2003, we granted
    options to purchase an aggregate of 8,843&nbsp;shares of our
    common stock to certain of our employees, each at an exercise
    price of $9.47&nbsp;per share.
    </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;On July&nbsp;3, 2003, we granted options
    to purchase an aggregate of 9,206&nbsp;shares of our common
    stock to certain of our employees, each at an exercise price of
    $8.91&nbsp;per share.
    </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;On February&nbsp;4, 2004, we granted
    options to purchase an aggregate of 5,141&nbsp;shares of our
    common stock to certain of our employees, each at an exercise
    price of $11.34&nbsp;per share.
    </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;On April&nbsp;7, 2004, we granted
    options to purchase an aggregate of 10,000&nbsp;shares of our
    common stock to one of our employees, each at an exercise price
    of $11.34&nbsp;per share.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">II-3
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<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">(l)&nbsp;On April&nbsp;7, 2004 we issued an
    aggregate of 21,250&nbsp;shares of our common stock to certain
    of our employees.
    </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">(m)&nbsp;On April&nbsp;8, 2004, we granted
    options to purchase an aggregate of 19,958&nbsp;shares of our
    common stock to certain of our employees, each at an exercise
    price of $16.33&nbsp;per share.
    </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">(n)&nbsp;On May&nbsp;18, 2004, we issued
    $132,000,000 aggregate principal amount at maturity ($75,072,935
    in gross proceeds) of our 13&nbsp;7/8%&nbsp;Senior Discount
    Notes due 2010 to Credit Suisse First Boston LLC
    (&#147;CSFB&#148;), as initial purchaser, for resale to
    qualified institutional buyers under Rule&nbsp;144A of the
    Securities Act or non-U.S.&nbsp;persons pursuant to
    Regulation&nbsp;S under the Securities Act. The initial
    purchaser received a discount of $2,252,188.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The grants of options to purchase our common
stock disclosed in paragraphs&nbsp;(a), (b), (c), (d), (g), (h),
(i), (j), (k)&nbsp;and (m)&nbsp;were made under our Equity
Participation Plan. Each of the above-described transactions
were exempt from registration pursuant to Section&nbsp;4(2) of
the Securities Act as transactions by an issuer not involving a
public offering and/or Rule&nbsp;701 under the Securities Act as
exempt offers and sales of securities under a written
compensatory benefit plan. Appropriate legends were or will be
affixed to the share certificates and other instruments issued
in such transactions. All recipients either have received or
will receive adequate information about us or had or have
access, through director or employment relationships, to such
information.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The issuances disclosed in
paragraph&nbsp;(e)&nbsp;were exempt from registration in
reliance upon Section&nbsp;3(a)(9) of the Securities Act and, in
the case of the dividend, because it did not involve an offer or
sale of a security. The securities had appropriate legends
affixed to them.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The issuances disclosed in
paragraphs&nbsp;(f)&nbsp;and (l)&nbsp;were exempt from
registration in reliance upon Section&nbsp;4(2) of the
Securities Act or promulgated thereunder as transactions by an
issuer not involving a public offering. All recipients were
accredited or sophisticated investors. Appropriate legends were
affixed to the share certificates issued in such transactions.
All recipients have received adequate information about us or
had access, through director or employment relationships, to
such information.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The issuances disclosed in paragraph&nbsp;(n)
were exempt from registration in reliance upon Section&nbsp;4(2)
of the Securities Act or promulgated thereunder as transactions
by an issuer not involving a public offering. All recipients
represented that they were accredited investors, as that term is
defined in the Securities Act and the regulations promulgated
thereunder. The recipients of securities in the transaction
represented their intention to transfer the securities only in
compliance with Rule&nbsp;144A promulgated under the Securities
Act or Regulation&nbsp;S promulgated under the Securities Act
and appropriate legends were affixed to the notes and issued in
such transactions.
</FONT>

<DIV>&nbsp;</DIV>

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

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;16.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Exhibits and Financial Statement
    Schedules.</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(a)&nbsp;<B>Exhibits</B>
</FONT>

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

<TR>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="76%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">&nbsp;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">Description</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">1</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 Underwriting Agreement.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</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">Amended Certificate of Incorporation of Buffets
    Holdings, Inc. (incorporated by reference to Exhibit&nbsp;3.1 to
    Buffets Holdings, Inc.&#146;s Registration Statement on
    Form&nbsp;S-4, filed with the Commission on June&nbsp;25, 2004
    (SEC file No.&nbsp;333-116897)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</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">By-Laws of Buffets Holdings, Inc. (incorporated
    by reference to Exhibit&nbsp;3.2 to Buffets Holdings,
    Inc.&#146;s Registration Statement on Form&nbsp;S-4, filed with
    the Commission on June&nbsp;25, 2004 (SEC file
    No.&nbsp;333-116897)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</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">Articles of Incorporation of Buffets, Inc.
    (incorporated by reference to Exhibit&nbsp;3.1 to Buffets,
    Inc.&#146;s Registration Statement on Form&nbsp;S-4, filed with
    the Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-4
</FONT>

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

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

<TR>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="76%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">&nbsp;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">Description</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">3</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">By-laws of Buffets, Inc. (incorporated by
    reference to Exhibit&nbsp;3.2 to Buffets, Inc.&#146;s
    Registration Statement on Form&nbsp;S-4, filed with the
    Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.5**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Incorporation of Distinctive Dining,
    Inc. (incorporated by reference to Exhibit&nbsp;3.3 to Buffets,
    Inc.&#146;s Registration Statement on Form&nbsp;S-4, filed with
    the Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.6**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of Distinctive Dining, Inc. (incorporated
    by reference to Exhibit&nbsp;3.4 to Buffets, Inc.&#146;s
    Registration Statement on Form&nbsp;S-4, filed with the
    Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Incorporation of HomeTown Buffet, Inc.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of HomeTown Buffet, Inc.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.9**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Incorporation of OCB Purchasing Co.
    (incorporated by reference to Exhibit&nbsp;3.7 to Buffets,
    Inc.&#146;s Registration Statement on Form&nbsp;S-4, filed with
    the Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.10**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of OCB Purchasing Co. (incorporated by
    reference to Exhibit&nbsp;3.8 to Buffets, Inc.&#146;s
    Registration Statement on Form&nbsp;S-4, filed with the
    Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.11**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Incorporation of OCB Restaurant Co.
    (incorporated by reference to Exhibit&nbsp;3.9 to Buffets,
    Inc.&#146;s Registration Statement on Form&nbsp;S-4, filed with
    the Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.12**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of OCB Restaurant Co. (incorporated by
    reference to Exhibit&nbsp;3.10 to Buffets, Inc.&#146;s
    Registration Statement on Form&nbsp;S-4, filed with the
    Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.13**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Incorporation of Restaurant
    Innovations, Inc. (incorporated by reference to
    Exhibit&nbsp;3.11 to Buffets, Inc.&#146;s Registration Statement
    on Form&nbsp;S-4, filed with the Commission on August&nbsp;16,
    2002 (SEC file No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.14**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of Restaurant Innovations, Inc.
    (incorporated by reference to Exhibit&nbsp;3.12 to Buffets,
    Inc.&#146;s Registration Statement on Form&nbsp;S-4, filed with
    the Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Certificate of Incorporation of Tahoe Joe&#146;s,
    Inc.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of Tahoe Joe&#146;s, Inc.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Organization of Buffets Leasing
    Company, LLC
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of Buffets Leasing Company, LLC
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Organization of OCB Leasing Company,
    LLC
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of OCB Leasing Company, LLC
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Organization of HomeTown Leasing
    Company, LLC
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of HomeTown Leasing Company, LLC
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Organization of Tahoe Joe&#146;s
    Leasing Company, LLC
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of Tahoe Joe&#146;s Leasing Company, LLC
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.25*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Amended and Restated Certificate of
    Incorporation of Buffets Holdings, Inc. to be adopted
    concurrently with the closing of this offering.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.26*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Amended and Restated By-laws of Buffets,
    Inc. to be adopted concurrently with the closing of this
    offering.
    </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">.1**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture, dated as of June&nbsp;28, 2002, among
    Buffets, Inc., the Guarantors and U.S.&nbsp;Bank National
    Association, as Trustee (incorporated by reference to
    Exhibit&nbsp;4.1 to Buffets, Inc.&#146;s Registration Statement
    on Form&nbsp;S-4, filed with the Commission on August&nbsp;16,
    2002 (SEC file No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

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

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

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

<TR>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="76%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">&nbsp;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">Description</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">.2**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Exchange Note (incorporated by reference
    to Exhibit&nbsp;A to Exhibit&nbsp;4.1 to Buffets, Inc.&#146;s
    Registration Statement on Form&nbsp;S-4, filed with the
    Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </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">.3**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First Supplemental Indenture (&#147;Subsidiary
    Guaranty&#148;), dated as of September&nbsp;26, 2003, among
    HomeTown Buffet Merger Company, Inc., Buffets, Inc. and
    U.S.&nbsp;Bank National Association, as trustee (incorporated by
    reference to Exhibit&nbsp;4.1 to Buffets, Inc.&#146;s Quarterly
    Report on Form&nbsp;10-Q filed with the Commission on
    November&nbsp;7, 2003 (SEC file No.&nbsp;033-00171)).
    </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">.4**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Second Supplemental Indenture, dated as of
    November&nbsp;5, 2003, between Tahoe Joe&#146;s, Inc. and
    U.S.&nbsp;Bank National Association, as trustee (incorporated by
    reference to Exhibit&nbsp;4.2 to Buffets, Inc.&#146;s Quarterly
    Report on Form&nbsp;10-Q filed with the Commission on
    November&nbsp;7, 2003 (SEC file No.&nbsp;033-00171)).
    </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">.5**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Third Supplemental Indenture, dated as of
    December&nbsp;10, 2003 among NSHE Bennington, LLC, Buffets, Inc.
    and U.S.&nbsp;Bank National Association, as trustee
    (incorporated by reference to Exhibit&nbsp;4.1 to Buffets,
    Inc.&#146;s Quarterly Report on Form&nbsp;10-Q filed with the
    Commission on January&nbsp;27, 2004 (SEC file
    No.&nbsp;033-00171)).
    </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">.6**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Fourth Supplemental Indenture, dated as of
    February&nbsp;20, 2004 among Buffets Holdings, Inc., Buffets,
    Inc., and U.S.&nbsp;Bank National Association, as trustee
    (incorporated by reference to Exhibit&nbsp;4.1 to Buffets,
    Inc.&#146;s Quarterly Report on Form&nbsp;10-Q filed with the
    Commission on May&nbsp;12, 2004 (SEC file No.&nbsp;033-00171)).
    </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">.7**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture, dated as of May&nbsp;18, 2004, between
    Buffets Holdings, Inc. and U.S.&nbsp;Bank National Association,
    as Trustee (incorporated by reference to Exhibit&nbsp;4.1 to
    Buffets Holdings, Inc.&#146;s Registration Statement on
    Form&nbsp;S-4, filed with the Commission on June&nbsp;25, 2004
    (SEC file No.&nbsp;333-116897)).
    </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">.8**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Exchange Security (incorporated by
    reference to Exhibit&nbsp;B to Exhibit&nbsp;4.1 to Buffets
    Holdings, Inc.&#146;s Registration Statement on Form&nbsp;S-4,
    filed with the Commission on June&nbsp;25, 2004 (SEC file
    No.&nbsp;333-116897)).
    </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">.9*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Indenture among Buffets Holdings, Inc.,
    the subsidiary guarantors named therein and U.S.&nbsp;Bank
    National Association, as trustee, relating to the senior
    subordinated notes.
    </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">.10*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Senior Subordinated Note (included in
    Exhibit&nbsp;4.9).
    </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">.11*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Investor Agreement by and between Buffets
    Holdings, Inc. and Caxton-Iseman Investments L.P. and certain
    other parties named therein.
    </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">.12*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Stock Certificate for Buffets Holdings,
    Inc. Class&nbsp;A Common Stock.
    </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">.13*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Stock Certificate for Buffets Holdings,
    Inc. Class&nbsp;B Common Stock.
    </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">.14*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Global IDS Certificate.
    </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">Legality Opinion of Paul, Weiss, Rifkind,
    Wharton&nbsp;&#38; Garrison LLP.
    </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">.2*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Legality Opinion of Faegre&nbsp;&#38; Benson 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, Weiss, Rifkind,
    Wharton&nbsp;&#38; Garrison LLP as to certain tax matters.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</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">Credit Agreement, dated as of June&nbsp;28, 2002,
    among Buffets, Inc., Buffets Holdings, Inc., the lenders party
    thereto and Credit Suisse First Boston, as administrative agent
    and as collateral agent for the lenders (incorporated by
    reference to Exhibit&nbsp;10.1 to Buffets, Inc.&#146;s
    Registration Statement on Form&nbsp;S-4, filed with the
    Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</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">Amendment Agreement, dated as of
    February&nbsp;20, 2004, to the Credit Agreement dated as of
    July&nbsp;28, 2002, among Buffets, Inc., Buffets Holdings, Inc.,
    the Subsidiaries named therein, the Lenders named therein and
    Credit Suisse First Boston, as Administrative Agent and
    Collateral Agent (incorporated by reference to Exhibit&nbsp;10.1
    to Buffets, Inc.&#146;s Quarterly Report on Form&nbsp;10-Q filed
    with the Commission on May&nbsp;12, 2004 (SEC file
    No.&nbsp;033-00171)).
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

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

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

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

<TR>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="76%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">&nbsp;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">Description</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">10</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">Management and Fee Agreement, dated
    October&nbsp;2, 2000, by and among Buffets, Inc. and
    Caxton-Iseman Capital, Inc. (incorporated by reference to
    Exhibit&nbsp;10.2 to Buffets, Inc.&#146;s Registration Statement
    on Form&nbsp;S-4, filed with the Commission on August&nbsp;16,
    2002 (SEC file No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</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">Amended and Restated Management and Fee
    Agreement, dated as of February&nbsp;20, 2004, by and between
    Buffets, Inc. and CxCIC LLC (the &#147;Amended Management
    Agreement&#148;) (incorporated by reference to Exhibit&nbsp;10.2
    to Buffets Inc.&#146;s Quarterly Report on Form&nbsp;10-Q filed
    with the Commission on May&nbsp;12, 2004 (SEC file
    No.&nbsp;033-00171)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.5*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Termination Agreement in respect of the
    Amended Management Agreement by and between Buffets, Inc. and
    CxCIC LLC.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.6**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Management and Fee Agreement, dated
    October&nbsp;2, 2000, by and between Buffets, Inc. and Sentinel
    Capital Partners, L.L.C. (incorporated by reference to
    Exhibit&nbsp;10.3 to Buffets, Inc.&#146;s Registration Statement
    on Form&nbsp;S-4, filed with the Commission on August&nbsp;16,
    2002 (SEC file No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.7**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Advisory Agreement, dated September&nbsp;28,
    2000, by and among Buffets Holdings, Inc., Buffets, Inc. and Roe
    E. Hatlen (incorporated by reference to Exhibit&nbsp;10.4 to
    Buffets, Inc.&#146;s Registration Statement on Form&nbsp;S-4,
    filed with the Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.8**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Advisory Agreement, dated September&nbsp;28,
    2000, by and among Buffets Holdings, Inc., Buffets, Inc. and C.
    Dennis Scott (incorporated by reference to Exhibit&nbsp;10.5 to
    Buffets, Inc.&#146;s Registration Statement on Form&nbsp;S-4,
    filed with the Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.9**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Guaranty, dated September&nbsp;28, 2000, from
    Buffets, Inc. to U.S.&nbsp;Bank National Association in
    connection with a Promissory Note and Pledge Agreement by and
    among U.S.&nbsp;Bank National Association and David Goronkin
    (incorporated by reference to Exhibit&nbsp;10.7 to Buffets,
    Inc.&#146;s Registration Statement on Form&nbsp;S-4, filed with
    the Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.10**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Guaranty, dated September&nbsp;28, 2000, from
    Buffets, Inc. to U.S.&nbsp;Bank National Association in
    connection with a Promissory Note and Pledge Agreement by and
    among U.S.&nbsp;Bank National Association and R. Michael
    Andrews,&nbsp;Jr. (incorporated by reference to
    Exhibit&nbsp;10.8 to Buffets, Inc.&#146;s Registration Statement
    on Form&nbsp;S-4, filed with the Commission on August&nbsp;16,
    2002 (SEC file No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.11**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Promissory Note and Pledge Agreement, dated
    February&nbsp;20, 2002, among David Goronkin, Pamela Goronkin
    and Buffets, Inc. (incorporated by reference to
    Exhibit&nbsp;10.9 to Buffets, Inc.&#146;s Registration Statement
    on Form&nbsp;S-4, filed with the Commission on August&nbsp;16,
    2002 (SEC file No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.12**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Severance Protection Agreements, dated
    September&nbsp;29, 2000, between Buffets, Inc. and each of Kerry
    A. Kramp, David Goronkin, R. Michael Andrews,&nbsp;Jr., Glenn D.
    Drasher, K. Michael Shrader and H. Thomas Mitchell (incorporated
    by reference to Exhibit&nbsp;10.10 to Buffets, Inc.&#146;s
    Registration Statement on Form&nbsp;S-4, filed with the
    Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.13**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Severance Protection Agreement, dated
    September&nbsp;29, 2000, between Buffets, Inc. and Jean C.
    Rostollan (incorporated by reference to Exhibit&nbsp;10.9.1 to
    Buffets, Inc.&#146;s Annual Report on Form&nbsp;10-K filed with
    the Commission on September&nbsp;30, 2003 (SEC file
    No.&nbsp;033-00171)).
    </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 of Computation of Ratios 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">List of Subsidiaries of Buffets Holdings, Inc.
    </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 Deloitte&nbsp;&#38; Touche 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 Paul, Weiss, Rifkind,
    Wharton&nbsp;&#38; Garrison LLP (included in Exhibits&nbsp;5.1
    and 8.1 to this Registration Statement).
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

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

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

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

<TR>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="76%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">&nbsp;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">Description</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">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 Faegre&nbsp;&#38; Benson LLP (included
    in Exhibit&nbsp;5.2 to this Registration Statement).
    </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">Powers of Attorney (included on signature pages
    of this Part&nbsp;II).
    </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="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">&nbsp;*&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To be provided by amendment.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">**&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Previously provided or incorporated by reference.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;<B>Financial Statement Schedules</B>
</FONT>

<DIV>&nbsp;</DIV>

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

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;17.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Undertakings</FONT></B></TD>
</TR>

</TABLE>

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

<P align="left">
<FONT size="2">The undersigned registrant hereby undertakes that:
</FONT>
<P>

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

<TR>
    <TD width="6%"></TD>
    <TD width="4%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">For purposes of determining any liability under
    the Securities Act of 1933, the information omitted from the
    form of prospectus filed as part of this registration statement
    in reliance upon Rule&nbsp;430A and contained in a form of
    prospectus filed by the registrant pursuant to
    Rule&nbsp;424(b)(1) or (4)&nbsp;or 497(h) under the Securities
    Act shall be deemed to be part of this registration statement as
    of the time it was declared effective.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">For the purpose of determining any liability
    under the Securities Act of 1933, each post-effective amendment
    that contains a form of prospectus shall be deemed to be a new
    registration statement relating to the securities offered
    therein, and the offering of such securities at that time shall
    be deemed to be the initial bona fide offering thereof.
    </FONT></TD>
</TR>

</TABLE>

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

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

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August&nbsp;27, 2004.
</FONT>
<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">BUFFETS HOLDINGS, INC.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">/s/ R. MICHAEL ANDREWS, JR.
    </FONT></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="left">
    <FONT size="2">Name: R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
</TR>

</TABLE>

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

<TR>
    <TD width="40%"></TD>
    <TD width="5%"></TD>
    <TD width="55%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Title:&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Executive Vice President and <BR>
     Chief Financial Officer
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">POWER OF ATTORNEY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry A. Kramp or R. Michael Andrews,&nbsp;Jr. or
either of them his true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i)&nbsp;act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule&nbsp;462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii)&nbsp;act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii)&nbsp;act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule&nbsp;462(b) under the Securities Act of 1933,
as amended, and (iv)&nbsp;take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="7%"><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="40%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><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/ FREDERICK ISEMAN<BR>
    <HR size="1" noshade>Frederick Iseman
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Chairman of the Board and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </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/ KERRY A. KRAMP<BR>
    <HR size="1" noshade>Kerry A. Kramp
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">President, Chief Executive Officer (principal
    executive officer) and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </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/ R. MICHAEL ANDREWS,&nbsp;JR.<BR>
    <HR size="1" noshade>R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Executive Vice President and Chief Financial
    Officer (principal financial and accounting officer)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <BR>
    <HR size="1" noshade><FONT size="2">Roe H. Hatlen
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Vice Chairman of the Board and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

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

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

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="7%"><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="40%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><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/ STEVEN M. LEFKOWITZ<BR>
    <HR size="1" noshade>Steven M. Lefkowitz
    </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 align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </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/ ROBERT A. FERRIS<BR>
    <HR size="1" noshade>Robert A. Ferris
    </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 align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <BR>
    <HR size="1" noshade><FONT size="2">David S. Lobel
    </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">/s/ ROBERT M. ROSENBERG<BR>
    <HR size="1" noshade>Robert M. Rosenberg
    </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 align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

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

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

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August&nbsp;27, 2004.
</FONT>
<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">BUFFETS, INC.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">/s/ R. MICHAEL ANDREWS, JR.
    </FONT></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="left">
    <FONT size="2">Name: R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
</TR>

</TABLE>

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

<TR>
    <TD width="40%"></TD>
    <TD width="5%"></TD>
    <TD width="55%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Title:&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Executive Vice President and <BR>
     Chief Financial Officer
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">POWER OF ATTORNEY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry A. Kramp or R. Michael Andrews,&nbsp;Jr. or
either of them his true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i)&nbsp;act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule&nbsp;462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii)&nbsp;act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii)&nbsp;act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule&nbsp;462(b) under the Securities Act of 1933,
as amended, and (iv)&nbsp;take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="7%"><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="40%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><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/ FREDERICK ISEMAN<BR>
    <HR size="1" noshade>Frederick Iseman
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Chairman of the Board and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </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/ KERRY A. KRAMP<BR>
    <HR size="1" noshade>Kerry A. Kramp
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">President, Chief Executive Officer (principal
    executive officer) and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </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/ R. MICHAEL ANDREWS,&nbsp;JR.<BR>
    <HR size="1" noshade>R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Executive Vice President and Chief Financial
    Officer (principal financial and accounting officer)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <BR>
    <HR size="1" noshade><FONT size="2">Roe H. Hatlen
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Vice Chairman of the Board and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-11
</FONT>

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

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="7%"><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="40%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><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/ STEVEN M. LEFKOWITZ<BR>
    <HR size="1" noshade>Steven M. Lefkowitz
    </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 align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </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/ ROBERT A. FERRIS<BR>
    <HR size="1" noshade>Robert A. Ferris
    </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 align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <BR>
    <HR size="1" noshade><FONT size="2">David S. Lobel
    </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">/s/ ROBERT M. ROSENBERG<BR>
    <HR size="1" noshade>Robert M. Rosenberg
    </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 align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-12
</FONT>

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

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August&nbsp;27, 2004.
</FONT>
<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">DISTINCTIVE DINING, INC.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">/s/ R. MICHAEL ANDREWS,&nbsp;JR.
    </FONT></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="left">
    <FONT size="2">Name: R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
</TR>

</TABLE>

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

<TR>
    <TD width="40%"></TD>
    <TD width="5%"></TD>
    <TD width="55%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Title:&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Executive Vice President and <BR>
     Chief Financial Officer
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">POWER OF ATTORNEY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry A. Kramp or R. Michael Andrews,&nbsp;Jr. or
either of them his true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i)&nbsp;act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule&nbsp;462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii)&nbsp;act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii)&nbsp;act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule&nbsp;462(b) under the Securities Act of 1933,
as amended, and (iv)&nbsp;take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
</FONT>

<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="39%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="15%"><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/ KERRY A. KRAMP<BR>
    <HR size="1" noshade>Kerry A. Kramp
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">President, Chief Executive Officer (principal
    executive officer) and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August 27, 2004
    </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/ R. MICHAEL ANDREWS,&nbsp;JR.<BR>
    <HR size="1" noshade>R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Executive Vice President, Chief Financial Officer
    (principal financial and accounting officer) and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August 27, 2004
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

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

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

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August&nbsp;27, 2004.
</FONT>
<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">HOMETOWN BUFFET, INC.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">/s/ R. MICHAEL ANDREWS,&nbsp;JR.
    </FONT></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="left">
    <FONT size="2">Name: R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
</TR>

</TABLE>

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

<TR>
    <TD width="40%"></TD>
    <TD width="5%"></TD>
    <TD width="55%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Title:&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Executive Vice President and <BR>
     Chief Financial Officer
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">POWER OF ATTORNEY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry&nbsp;A. Kramp or R.&nbsp;Michael
Andrews,&nbsp;Jr. or either of them his true and lawful agent,
proxy and attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i)&nbsp;act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule&nbsp;462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii)&nbsp;act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii)&nbsp;act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule&nbsp;462(b) under the Securities Act of 1933,
as amended, and (iv)&nbsp;take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
</FONT>

<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="39%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="15%"><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="3" align="center" valign="top">
    <FONT size="2">/s/ KERRY A. KRAMP<BR>
    <HR size="1" noshade>Kerry A. Kramp
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">President, Chief Executive Officer (principal
    executive officer) and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August 27, 2004
    </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/ R. MICHAEL ANDREWS,&nbsp;JR.<BR>
    <HR size="1" noshade>R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Executive Vice President, Chief Financial Officer
    (principal financial and accounting officer) and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August 27, 2004
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-14
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August 27, 2004.
</FONT>
<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">OCB PURCHASING CO.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">/s/ R. MICHAEL ANDREWS, JR.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

</TABLE>

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

<TR>
    <TD width="40%"></TD>
    <TD width="5%"></TD>
    <TD width="55%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Name:</FONT></TD>
    <TD align="left">
    <FONT size="2">R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Title:&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Executive Vice President and <BR>
     Chief Financial Officer
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">POWER OF ATTORNEY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry&nbsp;A. Kramp or R.&nbsp;Michael
Andrews,&nbsp;Jr. or either of them his true and lawful agent,
proxy and attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i)&nbsp;act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule&nbsp;462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii)&nbsp;act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii)&nbsp;act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule&nbsp;462(b) under the Securities Act of 1933,
as amended, and (iv)&nbsp;take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
</FONT>

<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="39%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="15%"><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="3" align="center" valign="top">
    <FONT size="2">/s/ KERRY A. KRAMP<BR>
    <HR size="1" noshade>Kerry A. Kramp
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">President, Chief Executive Officer (principal
    executive officer) and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August 27, 2004
    </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/ R. MICHAEL ANDREWS,&nbsp;JR.<BR>
    <HR size="1" noshade>R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Executive Vice President, Chief Financial Officer
    (principal financial and accounting officer) and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August 27, 2004
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

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

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

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August&nbsp;27, 2004.
</FONT>
<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">OCB RESTAURANT CO.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">/s/ R. MICHAEL ANDREWS,&nbsp;JR.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

</TABLE>

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

<TR>
    <TD width="40%"></TD>
    <TD width="5%"></TD>
    <TD width="55%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Name:</FONT></TD>
    <TD align="left">
    <FONT size="2">R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Title:&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Executive Vice President and <BR>
     Chief Financial Officer
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">POWER OF ATTORNEY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry&nbsp;A. Kramp or R.&nbsp;Michael
Andrews,&nbsp;Jr. or either of them his true and lawful agent,
proxy and attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i)&nbsp;act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule&nbsp;462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii)&nbsp;act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii)&nbsp;act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule&nbsp;462(b) under the Securities Act of 1933,
as amended, and (iv)&nbsp;take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="7%"><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="40%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><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="3" align="center" valign="top">
    <FONT size="2">/s/ KERRY A. KRAMP<BR>
    <HR size="1" noshade>Kerry A. Kramp
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">President, Chief Executive Officer (principal
    executive officer) and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </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/ R. MICHAEL ANDREWS,&nbsp;JR.<BR>
    <HR size="1" noshade>R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Executive Vice President, Chief Financial Officer
    (principal financial and accounting officer) and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

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

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

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August&nbsp;27, 2004.
</FONT>
<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">RESTAURANT INNOVATIONS, INC.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">/s/ R. MICHAEL ANDREWS,&nbsp;JR.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

</TABLE>

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

<TR>
    <TD width="40%"></TD>
    <TD width="5%"></TD>
    <TD width="55%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Name:</FONT></TD>
    <TD align="left">
    <FONT size="2">R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Title:&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Executive Vice President and <BR>
     Chief Financial Officer
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">POWER OF ATTORNEY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry&nbsp;A. Kramp or R.&nbsp;Michael
Andrews,&nbsp;Jr. or either of them his true and lawful agent,
proxy and attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i)&nbsp;act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule&nbsp;462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii)&nbsp;act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii)&nbsp;act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule&nbsp;462(b) under the Securities Act of 1933,
as amended, and (iv)&nbsp;take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="7%"><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="40%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><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="3" align="center" valign="top">
    <FONT size="2">/s/ KERRY A. KRAMP<BR>
    <HR size="1" noshade>Kerry A. Kramp
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">President, Chief Executive Officer (principal
    executive officer) and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </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/ R. MICHAEL ANDREWS,&nbsp;JR.<BR>
    <HR size="1" noshade>R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Executive Vice President, Chief Financial Officer
    (principal financial and accounting officer) and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

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

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

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August&nbsp;27, 2004.
</FONT>
<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">TAHOE JOE&#146;S, INC.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">/s/ R. MICHAEL ANDREWS, JR.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

</TABLE>

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

<TR>
    <TD width="40%"></TD>
    <TD width="5%"></TD>
    <TD width="55%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Name:</FONT></TD>
    <TD align="left">
    <FONT size="2">R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Title:&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Executive Vice President and <BR>
     Chief Financial Officer
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">POWER OF ATTORNEY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry&nbsp;A. Kramp or R.&nbsp;Michael
Andrews,&nbsp;Jr. or either of them his true and lawful agent,
proxy and attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i)&nbsp;act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule&nbsp;462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii)&nbsp;act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii)&nbsp;act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule&nbsp;462(b) under the Securities Act of 1933,
as amended, and (iv)&nbsp;take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="7%"><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="36%"><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="3" align="center" valign="top">
    <FONT size="2">/s/ KERRY A. KRAMP<BR>
    <HR size="1" noshade>Kerry A. Kramp
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">President, Chief Executive Officer (principal
    executive officer) and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </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/ R. MICHAEL ANDREWS,&nbsp;JR.<BR>
    <HR size="1" noshade>R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Executive Vice President, Chief Financial Officer
    (principal financial and accounting officer) and Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-18
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August&nbsp;27, 2004.
</FONT>
<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">BUFFETS LEASING COMPANY, LLC
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">By:&nbsp;Buffets, Inc.,
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">its sole member
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">/s/ R. MICHAEL ANDREWS, JR.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

</TABLE>

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

<TR>
    <TD width="40%"></TD>
    <TD width="5%"></TD>
    <TD width="55%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Name:</FONT></TD>
    <TD align="left">
    <FONT size="2">R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Title:&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Executive Vice President and <BR>
     Chief Financial Officer
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">POWER OF ATTORNEY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry A. Kramp or R. Michael Andrews,&nbsp;Jr. or
either of them his true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i)&nbsp;act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule&nbsp;462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii)&nbsp;act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii)&nbsp;act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule&nbsp;462(b) under the Securities Act of 1933,
as amended, and (iv)&nbsp;take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="7%"><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="40%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><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/ FREDERICK ISEMAN<BR>
    <HR size="1" noshade>Frederick Iseman
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Chairman of the Board and<BR>
    Director of Buffets, Inc.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </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/ KERRY A. KRAMP<BR>
    <HR size="1" noshade>Kerry A. Kramp
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">President, Chief Executive Officer (principal
    executive officer) and Director of Buffets, Inc.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </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/ R. MICHAEL ANDREWS,&nbsp;JR.<BR>
    <HR size="1" noshade>R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Executive Vice President and<BR>
    Chief Financial Officer (principal financial and accounting
    officer)<BR>
    of Buffets, Inc.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

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

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

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="7%"><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="40%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><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">
    <BR>
    <HR size="1" noshade><FONT size="2">Roe H. Hatlen
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Vice Chairman of the Board and Director of
    Buffets, Inc.
    </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/ STEVEN M. LEFKOWITZ<BR>
    <HR size="1" noshade>Steven M. Lefkowitz
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director of Buffets, Inc.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </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/ ROBERT A. FERRIS<BR>
    <HR size="1" noshade>Robert A. Ferris
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director of Buffets, Inc.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <BR>
    <HR size="1" noshade><FONT size="2">David S. Lobel
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director of Buffets, Inc.
    </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/ ROBERT M. ROSENBERG<BR>
    <HR size="1" noshade>Robert M. Rosenberg
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director of Buffets, Inc.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

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

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

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August&nbsp;27, 2004.
</FONT>
<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">OCB LEASING COMPANY, LLC
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">By:&nbsp;OCB Restaurant Co.,
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">its sole member
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">/s/ R. MICHAEL ANDREWS, JR.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

</TABLE>

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

<TR>
    <TD width="40%"></TD>
    <TD width="5%"></TD>
    <TD width="55%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Name:</FONT></TD>
    <TD align="left">
    <FONT size="2">R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Title:&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Executive Vice President and <BR>
     Chief Financial Officer
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">POWER OF ATTORNEY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry A. Kramp or R. Michael Andrews,&nbsp;Jr. or
either of them his true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i)&nbsp;act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule&nbsp;462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii)&nbsp;act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii)&nbsp;act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule&nbsp;462(b) under the Securities Act of 1933,
as amended, and (iv)&nbsp;take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="7%"><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="40%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="13%"><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/ KERRY A. KRAMP<BR>
    <HR size="1" noshade>Kerry A. Kramp
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">President, Chief Executive Officer (principal
    executive officer) and Director of OCB Restaurant Co.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </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/ R. MICHAEL ANDREWS,&nbsp;JR.<BR>
    <HR size="1" noshade>R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Executive Vice President,<BR>
    Chief Financial Officer (principal financial and accounting
    officer) and<BR>
    Director of OCB Restaurant Co.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

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

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

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August&nbsp;27, 2004.
</FONT>
<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">HOMETOWN LEASING COMPANY, LLC
    </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="left">
    <FONT size="2">HomeTown Buffet, Inc.,
    </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">
    <FONT size="2">its sole member
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">/s/ R. MICHAEL ANDREWS, JR.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

</TABLE>

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

<TR>
    <TD width="40%"></TD>
    <TD width="5%"></TD>
    <TD width="55%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Name:</FONT></TD>
    <TD align="left">
    <FONT size="2">R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Title:&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Executive Vice President and <BR>
     Chief Financial Officer
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">POWER OF ATTORNEY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry A. Kramp or R. Michael Andrews,&nbsp;Jr. or
either of them his true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i)&nbsp;act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule&nbsp;462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii)&nbsp;act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii)&nbsp;act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule&nbsp;462(b) under the Securities Act of 1933,
as amended, and (iv)&nbsp;take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
</FONT>

<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="39%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="15%"><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/ KERRY A. KRAMP<BR>
    <HR size="1" noshade>Kerry A. Kramp
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">President, Chief Executive Officer (principal
    executive officer) and Director of HomeTown Buffet, Inc.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </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/ R. MICHAEL ANDREWS,&nbsp;JR.<BR>
    <HR size="1" noshade>R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Executive Vice President,<BR>
    Chief Financial Officer (principal financial and accounting
    officer) and<BR>
    Director of HomeTown Buffet, Inc.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

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

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

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

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August&nbsp;27, 2004.
</FONT>
<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">TAHOE JOE&#146;S LEASING COMPANY, LLC
    </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="left">
    <FONT size="2">Tahoe Joe&#146;s, Inc.,
    </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">
    <FONT size="2">its sole member
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">/s/ R. MICHAEL ANDREWS, JR.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

</TABLE>

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

<TR>
    <TD width="40%"></TD>
    <TD width="5%"></TD>
    <TD width="55%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Name:</FONT></TD>
    <TD align="left">
    <FONT size="2">R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">Title:&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Executive Vice President and <BR>
     Chief Financial Officer
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">POWER OF ATTORNEY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry A. Kramp or R. Michael Andrews,&nbsp;Jr. or
either of them his true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i)&nbsp;act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule&nbsp;462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii)&nbsp;act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii)&nbsp;act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule&nbsp;462(b) under the Securities Act of 1933,
as amended, and (iv)&nbsp;take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
</FONT>

<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="39%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="15%"><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/ KERRY A. KRAMP<BR>
    <HR size="1" noshade>Kerry A. Kramp
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">President, Chief Executive Officer (principal
    executive officer) and Director of Tahoe Joe&#146;s, Inc.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </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/ R. MICHAEL ANDREWS,&nbsp;JR.<BR>
    <HR size="1" noshade>R. Michael Andrews,&nbsp;Jr.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Executive Vice President,<BR>
    Chief Financial Officer (principal financial and accounting
    officer) and<BR>
    Director of Tahoe Joe&#146;s, Inc.
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top">
    <FONT size="2">August&nbsp;27, 2004
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

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

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

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

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="71%"><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="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">&nbsp;Exhibit</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></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">Description</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></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 colspan="3"></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1</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 Underwriting Agreement.
    </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="right" valign="top" nowrap><FONT size="2">3</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">Amended Certificate of Incorporation of Buffets
    Holdings, Inc. (incorporated by reference to Exhibit&nbsp;3.1 to
    Buffets Holdings, Inc.&#146;s Registration Statement on
    Form&nbsp;S-4, filed with the Commission on June&nbsp;25, 2004
    (SEC file No.&nbsp;333-116897)).
    </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="right" valign="top" nowrap><FONT size="2">3</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">By-Laws of Buffets Holdings, Inc. (incorporated
    by reference to Exhibit&nbsp;3.2 to Buffets Holdings,
    Inc.&#146;s Registration Statement on Form&nbsp;S-4, filed with
    the Commission on June&nbsp;25, 2004 (SEC file
    No.&nbsp;333-116897)).
    </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="right" valign="top" nowrap><FONT size="2">3</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">Articles of Incorporation of Buffets, Inc.
    (incorporated by reference to Exhibit&nbsp;3.1 to Buffets,
    Inc.&#146;s Registration Statement on Form&nbsp;S-4, filed with
    the Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </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="right" valign="top" nowrap><FONT size="2">3</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">By-laws of Buffets, Inc. (incorporated by
    reference to Exhibit&nbsp;3.2 to Buffets, Inc.&#146;s
    Registration Statement on Form&nbsp;S-4, filed with the
    Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.5**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Incorporation of Distinctive Dining,
    Inc. (incorporated by reference to Exhibit&nbsp;3.3 to Buffets,
    Inc.&#146;s Registration Statement on Form&nbsp;S-4, filed with
    the Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.6**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of Distinctive Dining, Inc. (incorporated
    by reference to Exhibit&nbsp;3.4 to Buffets, Inc.&#146;s
    Registration Statement on Form&nbsp;S-4, filed with the
    Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Incorporation of HomeTown Buffet, Inc.
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of HomeTown Buffet, Inc.
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.9**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Incorporation of OCB Purchasing Co.
    (incorporated by reference to Exhibit&nbsp;3.7 to Buffets,
    Inc.&#146;s Registration Statement on Form&nbsp;S-4, filed with
    the Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.10**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of OCB Purchasing Co. (incorporated by
    reference to Exhibit&nbsp;3.8 to Buffets, Inc.&#146;s
    Registration Statement on Form&nbsp;S-4, filed with the
    Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.11**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Incorporation of OCB Restaurant Co.
    (incorporated by reference to Exhibit&nbsp;3.9 to Buffets,
    Inc.&#146;s Registration Statement on Form&nbsp;S-4, filed with
    the Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.12**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of OCB Restaurant Co. (incorporated by
    reference to Exhibit&nbsp;3.10 to Buffets, Inc.&#146;s
    Registration Statement on Form&nbsp;S-4, filed with the
    Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.13**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Incorporation of Restaurant
    Innovations, Inc. (incorporated by reference to
    Exhibit&nbsp;3.11 to Buffets, Inc.&#146;s Registration Statement
    on Form&nbsp;S-4, filed with the Commission on August&nbsp;16,
    2002 (SEC file No.&nbsp;333-98301)).
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.14**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of Restaurant Innovations, Inc.
    (incorporated by reference to Exhibit&nbsp;3.12 to Buffets,
    Inc.&#146;s Registration Statement on Form&nbsp;S-4, filed with
    the Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Certificate of Incorporation of Tahoe Joe&#146;s,
    Inc.
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of Tahoe Joe&#146;s, Inc.
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Organization of Buffets Leasing
    Company, LLC
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of Buffets Leasing Company, LLC
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Organization of OCB Leasing Company,
    LLC
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of OCB Leasing Company, LLC
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Organization of HomeTown Leasing
    Company, LLC
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of HomeTown Leasing Company, LLC
    </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>

</TABLE>
</CENTER>

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

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="71%"><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="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">&nbsp;Exhibit</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></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">Description</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></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 colspan="3"></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Articles of Organization of Tahoe Joe&#146;s
    Leasing Company, LLC
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">By-laws of Tahoe Joe&#146;s Leasing Company, LLC
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.25*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Amended and Restated Certificate of
    Incorporation of Buffets Holdings, Inc. to be adopted
    concurrently with the closing of this offering.
    </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="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.26*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Amended and Restated By-laws of Buffets,
    Inc. to be adopted concurrently with the closing of this
    offering.
    </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="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 June&nbsp;28, 2002, among
    Buffets, Inc., the Guarantors and U.S.&nbsp;Bank National
    Association, as Trustee (incorporated by reference to
    Exhibit&nbsp;4.1 to Buffets, Inc.&#146;s Registration Statement
    on Form&nbsp;S-4, filed with the Commission on August&nbsp;16,
    2002 (SEC file No.&nbsp;333-98301)).
    </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="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 Exchange Note (incorporated by reference
    to Exhibit&nbsp;A to Exhibit&nbsp;4.1 to Buffets, Inc.&#146;s
    Registration Statement on Form&nbsp;S-4, filed with the
    Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </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="right" valign="top" nowrap><FONT size="2">4</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">First Supplemental Indenture (&#147;Subsidiary
    Guaranty&#148;), dated as of September&nbsp;26, 2003, among
    HomeTown Buffet Merger Company, Inc., Buffets, Inc. and
    U.S.&nbsp;Bank National Association, as trustee (incorporated by
    reference to Exhibit&nbsp;4.1 to Buffets, Inc.&#146;s Quarterly
    Report on Form&nbsp;10-Q filed with the Commission on
    November&nbsp;7, 2003 (SEC file No.&nbsp;033-00171)).
    </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="right" valign="top" nowrap><FONT size="2">4</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">Second Supplemental Indenture, dated as of
    November&nbsp;5, 2003, between Tahoe Joe&#146;s, Inc. and
    U.S.&nbsp;Bank National Association, as trustee (incorporated by
    reference to Exhibit&nbsp;4.2 to Buffets, Inc.&#146;s Quarterly
    Report on Form&nbsp;10-Q filed with the Commission on
    November&nbsp;7, 2003 (SEC file No.&nbsp;033-00171)).
    </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="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.5**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Third Supplemental Indenture, dated as of
    December&nbsp;10, 2003 among NSHE Bennington, LLC, Buffets, Inc.
    and U.S.&nbsp;Bank National Association, as trustee
    (incorporated by reference to Exhibit&nbsp;4.1 to Buffets,
    Inc.&#146;s Quarterly Report on Form&nbsp;10-Q filed with the
    Commission on January&nbsp;27, 2004 (SEC file
    No.&nbsp;033-00171)).
    </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="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.6**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Fourth Supplemental Indenture, dated as of
    February&nbsp;20, 2004 among Buffets Holdings, Inc., Buffets,
    Inc., and U.S.&nbsp;Bank National Association, as trustee
    (incorporated by reference to Exhibit&nbsp;4.1 to Buffets,
    Inc.&#146;s Quarterly Report on Form&nbsp;10-Q filed with the
    Commission on May&nbsp;12, 2004 (SEC file No.&nbsp;033-00171)).
    </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="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.7**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture, dated as of May&nbsp;18, 2004, between
    Buffets Holdings, Inc. and U.S.&nbsp;Bank National Association,
    as Trustee (incorporated by reference to Exhibit&nbsp;4.1 to
    Buffets Holdings, Inc.&#146;s Registration Statement on
    Form&nbsp;S-4, filed with the Commission on June&nbsp;25, 2004
    (SEC file No.&nbsp;333-116897)).
    </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="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.8**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Exchange Security (incorporated by
    reference to Exhibit&nbsp;B to Exhibit&nbsp;4.1 to Buffets
    Holdings, Inc.&#146;s Registration Statement on Form&nbsp;S-4,
    filed with the Commission on June&nbsp;25, 2004 (SEC file
    No.&nbsp;333-116897)).
    </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="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.9*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Indenture among Buffets Holdings, Inc.,
    the subsidiary guarantors named therein and U.S.&nbsp;Bank
    National Association, as trustee, relating to the senior
    subordinated notes.
    </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="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.10*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Senior Subordinated Note (included in
    Exhibit&nbsp;4.9).
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</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">.11*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Investor Agreement by and between Buffets
    Holdings, Inc. and Caxton-Iseman Investments L.P. and certain
    other parties named therein.
    </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="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.12*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Stock Certificate for Buffets Holdings,
    Inc. Class&nbsp;A Common Stock.
    </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="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.13*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Stock Certificate for Buffets Holdings,
    Inc. Class&nbsp;B Common Stock.
    </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="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.14*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Global IDS Certificate.
    </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="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">Legality Opinion of Paul, Weiss, Rifkind,
    Wharton&nbsp;&#38; Garrison LLP.
    </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="right" valign="top" nowrap><FONT size="2">5</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">Legality Opinion of Faegre&nbsp;&#38; Benson LLP.
    </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="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, Weiss, Rifkind,
    Wharton&nbsp;&#38; Garrison LLP as to certain tax matters.
    </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>

</TABLE>
</CENTER>

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

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="71%"><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="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">&nbsp;Exhibit</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></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">Description</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></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 colspan="3"></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</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">Credit Agreement, dated as of June&nbsp;28, 2002,
    among Buffets, Inc., Buffets Holdings, Inc., the lenders party
    thereto and Credit Suisse First Boston, as administrative agent
    and as collateral agent for the lenders (incorporated by
    reference to Exhibit&nbsp;10.1 to Buffets, Inc.&#146;s
    Registration Statement on Form&nbsp;S-4, filed with the
    Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </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="right" valign="top" nowrap><FONT size="2">10</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">Amendment Agreement, dated as of
    February&nbsp;20, 2004, to the Credit Agreement dated as of
    July&nbsp;28, 2002, among Buffets, Inc., Buffets Holdings, Inc.,
    the Subsidiaries named therein, the Lenders named therein and
    Credit Suisse First Boston, as Administrative Agent and
    Collateral Agent (incorporated by reference to Exhibit&nbsp;10.1
    to Buffets, Inc.&#146;s Quarterly Report on Form&nbsp;10-Q filed
    with the Commission on May&nbsp;12, 2004 (SEC file
    No.&nbsp;033-00171)).
    </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="right" valign="top" nowrap><FONT size="2">10</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">Management and Fee Agreement, dated
    October&nbsp;2, 2000, by and among Buffets, Inc. and
    Caxton-Iseman Capital, Inc. (incorporated by reference to
    Exhibit&nbsp;10.2 to Buffets, Inc.&#146;s Registration Statement
    on Form&nbsp;S-4, filed with the Commission on August&nbsp;16,
    2002 (SEC file No.&nbsp;333-98301)).
    </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="right" valign="top" nowrap><FONT size="2">10</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">Amended and Restated Management and Fee
    Agreement, dated as of February&nbsp;20, 2004, by and between
    Buffets, Inc. and CxCIC LLC (the &#147;Amended Management
    Agreement&#148;) (incorporated by reference to Exhibit&nbsp;10.2
    to Buffets Inc.&#146;s Quarterly Report on Form&nbsp;10-Q filed
    with the Commission on May&nbsp;12, 2004 (SEC file
    No.&nbsp;033-00171)).
    </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="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.5*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of Termination Agreement in respect of the
    Amended Management Agreement by and between Buffets, Inc. and
    CxCIC LLC.
    </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="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.6**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Management and Fee Agreement, dated
    October&nbsp;2, 2000, by and between Buffets, Inc. and Sentinel
    Capital Partners, L.L.C. (incorporated by reference to
    Exhibit&nbsp;10.3 to Buffets, Inc.&#146;s Registration Statement
    on Form&nbsp;S-4, filed with the Commission on August&nbsp;16,
    2002 (SEC file No.&nbsp;333-98301)).
    </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="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.7**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Advisory Agreement, dated September&nbsp;28,
    2000, by and among Buffets Holdings, Inc., Buffets, Inc. and Roe
    E. Hatlen (incorporated by reference to Exhibit&nbsp;10.4 to
    Buffets, Inc.&#146;s Registration Statement on Form&nbsp;S-4,
    filed with the Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </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="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.8**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Advisory Agreement, dated September&nbsp;28,
    2000, by and among Buffets Holdings, Inc., Buffets, Inc. and C.
    Dennis Scott (incorporated by reference to Exhibit&nbsp;10.5 to
    Buffets, Inc.&#146;s Registration Statement on Form&nbsp;S-4,
    filed with the Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </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="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.9**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Guaranty, dated September&nbsp;28, 2000, from
    Buffets, Inc. to U.S.&nbsp;Bank National Association in
    connection with a Promissory Note and Pledge Agreement by and
    among U.S.&nbsp;Bank National Association and David Goronkin
    (incorporated by reference to Exhibit&nbsp;10.7 to Buffets,
    Inc.&#146;s Registration Statement on Form&nbsp;S-4, filed with
    the Commission on August&nbsp;16, 2002 (SEC file
    No.&nbsp;333-98301)).
    </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="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.10**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Guaranty, dated September&nbsp;28, 2000, from
    Buffets, Inc. to U.S.&nbsp;Bank National Association in
    connection with a Promissory Note and Pledge Agreement by and
    among U.S.&nbsp;Bank National Association and R. Michael
    Andrews,&nbsp;Jr. (incorporated by reference to
    Exhibit&nbsp;10.8 to Buffets, Inc.&#146;s Registration Statement
    on Form&nbsp;S-4, filed with the Commission on August&nbsp;16,
    2002 (SEC file No.&nbsp;333-98301)).
    </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="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.11**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Promissory Note and Pledge Agreement, dated
    February&nbsp;20, 2002, among David Goronkin, Pamela Goronkin
    and Buffets, Inc. (incorporated by reference to
    Exhibit&nbsp;10.9 to Buffets, Inc.&#146;s Registration Statement
    on Form&nbsp;S-4, filed with the Commission on August&nbsp;16,
    2002 (SEC file No.&nbsp;333-98301)).
    </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="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.12**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Severance Protection Agreements, dated
    September&nbsp;29, 2000, between Buffets, Inc. and each of
    Kerry&nbsp;A. Kramp, David Goronkin, R.&nbsp;Michael
    Andrews,&nbsp;Jr., Glenn&nbsp;D. Drasher, K.&nbsp;Michael
    Shrader and H.&nbsp;Thomas Mitchell (incorporated by reference
    to Exhibit&nbsp;10.10 to Buffets, Inc.&#146;s Registration
    Statement on Form&nbsp;S-4, filed with the Commission on
    August&nbsp;16, 2002 (SEC file No.&nbsp;333-98301)).
    </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>

</TABLE>
</CENTER>

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

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="71%"><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="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">&nbsp;Exhibit</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></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">Description</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></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 colspan="3"></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.13**</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Severance Protection Agreement, dated
    September&nbsp;29, 2000, between Buffets, Inc. and Jean&nbsp;C.
    Rostollan (incorporated by reference to Exhibit&nbsp;10.9.1 to
    Buffets, Inc.&#146;s Annual Report on Form&nbsp;10-K filed with
    the Commission on September&nbsp;30, 2003 (SEC file
    No.&nbsp;033-00171)).
    </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="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 of Computation of Ratios of Earnings to
    Fixed Charges.
    </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="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">List of Subsidiaries of Buffets Holdings, Inc.
    </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="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 Deloitte&nbsp;&#38; Touche LLP.
    </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="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 Paul, Weiss, Rifkind,
    Wharton&nbsp;&#38; Garrison LLP (included in Exhibits&nbsp;5.1
    and 8.1 to this Registration Statement).
    </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="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 Faegre&nbsp;&#38; Benson LLP (included
    in Exhibit&nbsp;5.2 to this Registration Statement).
    </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="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">Powers of Attorney (included on signature pages
    of this Part&nbsp;II).
    </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>

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

<TR valign="top">
    <TD><FONT size="2">&nbsp;*&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To be provided by amendment.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">**&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Previously provided or incorporated by reference.
    </FONT></TD>
</TR>

</TABLE>
</BODY>
</HTML>
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FORM S-1
Table of Contents
As filed with the Securities and Exchange
Commission on August 27, 2004
Registration
No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Buffets Holdings, Inc.
(Exact Name of Registrant as Specified in
Charter)
Delaware
5812
22-3754018
(State or other jurisdiction of
incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification No.)
1460 Buffet Way
Eagan, Minnesota 55121
(651) 994-8608
(Address, including zip code, and telephone
number, including area code, of registrants' principal
executive offices)
See Table of Additional Registrants on
Following Page
H. Thomas Mitchell, Esq.
Executive Vice President
General Counsel and Secretary
1460 Buffet Way
Eagan, Minnesota 55121
(651) 994-8608
(Name, address, including zip code, and
telephone number, including area code, of agent for service of
process)
With Copies to:
John C. Kennedy, Esq.
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019-6064
(212) 373-3000
Mark C. Smith, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
(212) 735-3000
Approximate date of commencement of proposed
sale to the public:
As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant
to Rule 415 under the Securities Act of 1933, check the
following
box.
o
If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) 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.
o
If this Form is a post-effective amendment filed
pursuant to Rule 462(c) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same
offering.
o
If this Form is a post-effective amendment filed
pursuant to Rule 462(d) under the Securities Act, check the
following box and list the Securities Act registration number of
the earlier effective registration statement for the same
offering.
o
If delivery of the prospectus is expected to be
made pursuant to Rule 434, check the following box.
o
(Calculation table and footnotes on following
page)
The Registrants hereby amend this Registration
Statement on such date or dates as may be necessary to delay its
effective date until the Registrants shall file a further
amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this
Registration Statement shall become effective on such date as
the Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
Table of Contents
(Continued from cover)
CALCULATION OF REGISTRATION FEE
Proposed Maximum
Title of Each Class of Securities
Aggregate Offering
Amount of
to be Registered
Price(1)
Registration Fee(1)
Income Deposit Securities (IDSs)(2)
Class A Common Stock, par value
    $0.01 per share(3)
% Senior Subordinated Notes due
    2019(4)
Subsidiary Guarantees
    of   % Senior Subordinated Notes(5)
Total
$550,000,000
$69,685
(1)
Estimated solely for the purpose of computing the
    amount of the registration fee pursuant to Rule 457(o)
    promulgated under the Securities Act of 1933, as amended.
(2)
The IDSs
    represent                      shares
    of the Class A common stock and
    $                    aggregate
    principal amount of      % senior
    subordinated notes of Buffets Holdings, Inc. ("Buffets
    Holdings"),
    including                      IDSs
    subject to the underwriters' over-allotment option to
    purchase additional IDSs. Includes an indeterminate number of
    IDSs of the same series which may be received by holders of IDSs
    in the future on one or more occasions in replacement of the
    IDSs being offered hereby in the event of a subsequent issuance
    of IDSs, upon an automatic exchange of portions of the senior
    subordinated notes for identical portions of such additional
    senior subordinated notes as discussed in
    note (4) below.
(3)
Represents                      shares
    of Buffets Holdings' Class A common stock included in
    the IDSs described above.
(4)
Includes
    $          aggregate
    principal amount of Buffets
    Holdings'      % senior
    subordinated notes included in the IDSs described above and an
    indeterminate principal amount of notes of the same series as
    the senior subordinated notes, which will be received by holders
    of senior subordinated notes in the future on one or more
    occasions in the event of a subsequent issuance of IDSs, upon an
    automatic exchange of portions of the senior subordinated notes
    for identical portions of such additional senior subordinated
    notes. Also includes
    $          principal
    amount of senior subordinated notes of the same series that will
    be issued separately (not represented by IDSs).
(5)
The subsidiary guarantors listed in the Table of
    Additional Registrants on the next page will jointly and
    severally and fully and unconditionally guarantee the senior
    subordinated notes represented by the IDSs and the senior
    subordinated notes of the same series that will be issued
    separately from the IDSs. Pursuant to Rule 457(n) under the
    Securities Act of 1933, no separate fee for the guarantees is
    payable.
Table of Contents
BUFFETS HOLDINGS, INC.
TABLE OF ADDITIONAL REGISTRANTS
Primary Standard
IRS
Jurisdiction of
Industrial
Employer
Incorporation or
Classification
Identification
Name
Organization
Number
Number
Buffets, Inc.
Minnesota
5812
41-1462294
Buffets Leasing Company, LLC
Minnesota
5812
42-1638138
Distinctive Dining, Inc.
Minnesota
5812
41-1923069
HomeTown Buffet, Inc.
Minnesota
5812
33-0463002
HomeTown Leasing Company, LLC
Minnesota
5812
42-1638142
OCB Leasing Company, LLC
Minnesota
5812
42-1638147
OCB Purchasing Co.
Minnesota
5812
41-1777610
OCB Restaurant Co.
Minnesota
5812
41-1777607
Restaurant Innovations, Inc.
Minnesota
5812
41-1931394
Tahoe Joe's, Inc.
Delaware
5812
91-1957129
Tahoe Joe's Leasing Company, LLC
Minnesota
5812
42-1638145
The address of the principal executive offices of
the additional registrants listed above is 1460 Buffet Way,
Eagan, Minnesota 55121. Their telephone number at that address
is (651) 994-8608.
Table of Contents
The information in this
prospectus is not complete and may be changed without notice. We
may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective.
This prospectus is not an offer to sell these securities and we
are not soliciting offers to buy these securities in any
jurisdiction where the offer or sale is not
permitted.
SUBJECT TO COMPLETION, DATED
AUGUST 27, 2004
Prospectus
Income Deposit Securities (IDSs)
$                 million         % Senior
Subordinated Notes due 2019
Buffets Holdings, Inc.
We are
selling                    IDSs
representing                    shares
of our Class A common stock and
$          million
aggregate principal amount of
our     % senior subordinated notes due
2019. Each IDS initially represents:
•
one share of our Class A common
    stock; and
•
a     % senior
    subordinated note with a
    $            principal
    amount.
We are also selling
$          million
aggregate principal amount of
our     % senior subordinated notes
separately (not represented by IDSs). The offering of IDSs and
the offering of the separate senior subordinated notes are
conditioned upon each other.
This is the initial public offering of our IDSs,
and the shares of our Class A common stock and senior
subordinated notes represented thereby, and our separate senior
subordinated notes. We anticipate that the public offering price
of the IDSs will be between
$         and
$          per
IDS and the public offering price of the senior subordinated
notes sold separately will be     % of their
stated principal amount. We will apply to list our IDSs on
the                   under
the trading symbol
"         ".
Holders of IDSs will have the right to separate
the IDSs into the shares of our Class A common stock and
senior subordinated notes represented thereby at any time after
the earlier of 45 days from the closing of this offering or
the occurrence of a change of control. Similarly, any holder of
shares of our Class A common stock and senior subordinated
notes may, at any time, unless the IDSs have automatically
separated, combine the applicable number of shares of
Class A common stock and principal amount of senior
subordinated notes to form IDSs. Separation of all of the IDSs
will occur automatically upon the continuance of a payment
default on the senior subordinated notes for 90 days or
upon the redemption, maturity or acceleration of the senior
subordinated notes.
Our senior subordinated notes mature
on                   ,
2019. We will be permitted to defer interest payments on our
senior subordinated notes under certain circumstances and
subject to the limitations described in "Description of
Senior Subordinated Notes — Terms of the
Notes — Interest Deferral." Deferred interest on
our senior subordinated notes will bear interest quarterly at a
rate equal to the stated annual rate of interest on the senior
subordinated notes divided by four.
Upon a subsequent issuance by us of IDSs or
senior subordinated notes of the same series, a portion of your
senior subordinated notes may be automatically exchanged for an
identical principal amount of the senior subordinated notes
issued in such subsequent issuance, and in that event your IDSs
will be replaced with new IDSs. In addition to the senior
subordinated notes offered hereby, the registration statement of
which this prospectus is a part also registers the senior
subordinated notes and new IDSs to be issued upon any such
subsequent issuance.
We have granted the underwriters an option to
purchase up
to                   additional
IDSs to cover over-allotments, if any. We will use all the
proceeds from the sale of additional IDSs upon exercise of the
underwriters' over-allotment option to repurchase shares of
our Class B common stock or other securities from certain
of our existing stockholders.
Investing in our IDSs, shares of our
Class A common stock and senior subordinated notes involves
risks. See "Risk Factors" beginning on
page 24.
Per IDS(1)
Total
Per Note(2)
Total
Public offering price
$
$
%
$
Underwriting discount
$
$
%
$
Proceeds to Buffets Holdings, Inc. (before
    expenses)(3)(4)
$
$
%
$
(1)
The price per IDS comprises
    $        allocated to
    each share of Class A common stock and
    $        allocated to
    each senior subordinated note.
(2)
Relates to the
    $         million
    aggregate principal amount of senior subordinated notes sold
    separately (not represented by IDSs).
(3)
Approximately
    $         million
    of these proceeds will be paid to our existing stockholders.
(4)
Assumes no exercise of the underwriters'
    over-allotment option.
The underwriters expect to deliver the IDSs and
the senior subordinated notes in book-entry form only through
the facilities of The Depository Trust Company to purchasers on
or
about                   ,
2004.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved
of these securities or determined if this prospectus is truthful
or complete. Any representation to the contrary is a criminal
offense.
Joint Book-Running Managers
Credit Suisse First Boston
Banc of America Securities LLC
CIBC World Markets
UBS Investment Bank
Co-Managers
JPMorgan
Piper Jaffray
The date of this prospectus
is                   ,
2004.
TABLE OF CONTENTS
Page
PRESENTATION OF FINANCIAL
    INFORMATION
ii
INDUSTRY AND MARKET DATA
ii
TRADEMARKS
ii
PROSPECTUS SUMMARY
1
RISK FACTORS
24
FORWARD-LOOKING
    STATEMENTS
39
USE OF PROCEEDS
40
DIVIDEND POLICY AND
    RESTRICTIONS
42
CAPITALIZATION
48
DILUTION
49
UNAUDITED PRO FORMA
    CONDENSED FINANCIAL DATA
50
SELECTED HISTORICAL
    CONSOLIDATED FINANCIAL DATA
53
MANAGEMENT'S DISCUSSION
    AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
56
BUSINESS
72
MANAGEMENT
82
PRINCIPAL STOCKHOLDERS
87
CERTAIN RELATIONSHIPS AND
    RELATED TRANSACTIONS
88
RELATED PARTY TRANSACTIONS
    IN CONNECTION WITH THIS OFFERING
91
DESCRIPTION OF OTHER
    INDEBTEDNESS
94
DESCRIPTION OF IDSS
98
DESCRIPTION OF CAPITAL
    STOCK
103
DESCRIPTION OF SENIOR
    SUBORDINATED NOTES
110
IDSS ELIGIBLE FOR FUTURE
    SALE
151
MATERIAL U.S. FEDERAL
    INCOME TAX CONSEQUENCES
152
UNDERWRITING
162
NOTICE TO CANADIAN
    RESIDENTS
166
LEGAL MATTERS
167
EXPERTS
167
WHERE YOU CAN FIND MORE
    INFORMATION
168
You should rely only on the information
contained in this document or to which we have referred you. We
have not authorized anyone to provide you with information that
is different. This document may only be used where it is legal
to sell these securities.
DEALER PROSPECTUS DELIVERY
OBLIGATIONS
Until                     ,
2004, all dealers that effect transactions in these securities,
whether or not participating in this offering, may be required
to deliver a prospectus. This is in addition to the
dealer's obligation to deliver a prospectus when acting as
an underwriter and with respect to unsold allotments or
subscriptions.
i
Table of Contents
PRESENTATION OF FINANCIAL
INFORMATION
In 2002, we changed our fiscal year to 52 or
53 weeks ending on the Wednesday nearest June 30 of
each year. Our new fiscal year is divided into four quarters
of 12, 12, 16 and 12 or 13 weeks. Our transitional
period ended July 3, 2002 consisted of 26 weeks
divided into two periods of 16 and 10 weeks. Prior to the
26-week transitional period ended July 3, 2002, our fiscal
year comprised 52 or 53 weeks ending on the Wednesday
nearest December 31 of each year, and each fiscal year was
divided into four periods of 16, 12, 12 and 12 or
13 weeks. Fiscal 2004 refers to the 52 weeks ended
June 30, 2004; fiscal 2003 refers to the 52 weeks
ended July 2, 2003; the 2002 transitional period refers to
the 26-week transitional period ended July 3, 2002; fiscal
2001 refers to the 52 weeks ended January 2, 2002;
fiscal 2000 refers to the 53 weeks ended January 3,
2001; and fiscal 1999 refers to the 52 weeks ended
December 29, 1999.
INDUSTRY AND MARKET DATA
Industry and market data used throughout this
prospectus were obtained through company research, surveys and
studies conducted by third parties and industry and general
publications. The industry and market data provided by
Technomic, Inc., an independent research organization, is based
on a report issued in January 2004 covering data from 1983
through 2002. While we believe the industry and market data is
reliable and market definitions are appropriate, neither these
surveys nor these definitions have been verified by any
independent sources.
TRADEMARKS
We have proprietary rights to a number of
trademarks important to our business, including Old Country
Buffet®, HomeTown Buffet®, Granny's
Buffet
SM
, Country Roadhouse Buffet &
Grill®, Tahoe Joe's Famous Steakhouse
SM
,
Country Buffet
SM
and Soup 'N Salad
Unlimited®. All other trademarks or service marks referred
to in this prospectus are the property of their respective
owners and are not our property.
ii
Table of Contents
PROSPECTUS SUMMARY
This summary highlights selected information
from this prospectus. The following summary information is
qualified in its entirety by the information contained elsewhere
in this prospectus. This summary is not complete and may not
contain all the information that you should consider before
investing in the IDSs and senior subordinated notes. You should
read the entire prospectus carefully, including the "Risk
Factors" section, the "Unaudited Pro Forma Condensed
Financial Data" and the historical financial statements of
Buffets Holdings, Inc. and the accompanying notes to those
statements.
Unless the context indicates or requires
otherwise, (i) the term "Buffets Holdings" refers
to Buffets Holdings, Inc., the issuer of the IDSs and senior
subordinated notes; (ii) the term "Buffets"
refers to Buffets, Inc., our principal operating subsidiary; and
(iii) the terms "we," "our,"
"ours," "us" and the "company"
refer collectively to Buffets Holdings and its subsidiaries,
including Buffets. The use of these terms is not intended to
imply that Buffets Holdings and Buffets are not separate and
distinct legal entities.
Our Company
Founded in 1983, Buffets is the twentieth largest
restaurant operator in the United States and is the largest
operator of company-owned stores in the buffet/grill segment, as
measured in both sales and number of restaurants. Our
restaurants are principally operated under the names Old Country
Buffet and HomeTown Buffet. As of June 30, 2004, we had
360 company-owned restaurants and 20 franchised locations
in 38 states. We offer excellent customer service, together
with a convenient, value-priced selection of home-style cooked
meals in a self-service buffet format. For fiscal 2004, we
generated net sales of $942.8 million and served
approximately 131 million customers.
Our restaurants provide a high level of food
quality and service through uniform operational standards
developed at the corporate level. Freshness is ensured by
preparing food in small batches of six to eight servings at a
time, with preparations and production adapted to current
customer traffic patterns. Our buffet restaurants utilize
uniform menus, recipes and ingredient specifications, with
certain discretion to adapt menus for regional preferences. We
offer approximately 100 menu items at each meal, including
entrees, soups, salads, fresh vegetables, non-alcoholic
beverages and desserts. Typical entrees include chicken, carved
roast beef, ham, shrimp, salmon, peppered pork loin, fish and
casseroles.
Our buffet restaurants use an all-inclusive
pricing strategy designed to provide dining value to our
customers. As of June 30, 2004, the meal price at our
buffet restaurants for dinner ranged from $8.59 to $9.59 and for
lunch from $6.49 to $7.19, with discounts offered to senior
citizens and children. The average guest check in our
restaurants, including our Tahoe Joe's Famous Steakhouses,
for fiscal 2004 was $7.22. In order to further enhance our
guests' dining experience, we have focused on providing a
level of customer service designed to enhance the self-service
buffet format, including such features as limited table-side
service and our scatter-bar layout.
Our buffet restaurants average approximately
9,900 square feet in size and can generally seat between
225 and 400 people. On average, our buffet restaurants served
approximately 7,000 customers per week during fiscal 2004. While
we attract a broad demographic profile of customers, including
families, senior citizens and singles, our customer surveys
indicate that approximately two-thirds of our guests are married
and over half are between the ages of 25 and 54 years old
(the largest segment of the population within the United States).
We have a national footprint of restaurant
locations, which are strategically concentrated in particular
regions to maximize penetration within those markets and achieve
operating and advertising synergies. For example, our television
advertising program in 38 designated market areas provided media
coverage for 62% of our buffet restaurants during fiscal 2004.
In addition, our restaurants are located in high customer
traffic venues and include both freestanding units and units
located in shopping centers and malls. As of June 30, 2004,
69% of our restaurants were located in shopping centers or malls
and 31% were freestanding units.
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Industry Overview
The restaurant industry is among the largest
industries in the United States and according to Technomic,
Inc., an independent research organization, has grown at an
average annual rate of 7.3% from 1975 through 2002. The
restaurant industry can be divided into three main segments:
full-service restaurants, quick-service restaurants, and other
miscellaneous establishments. Full-service restaurants include
the mid-scale, casual dining and upscale (fine dining) segments.
The mid-scale segment, which includes buffet/grill restaurants,
is characterized by complete meals, menu variety and moderate
prices. The casual dining segment, which typically has higher
menu prices and generally offers alcoholic beverages, includes a
small number of national chains, regional chains and independent
operators. The quick-service segment is characterized by lower
average checks, portable meals, fast service and convenience. We
operate in the $3.0 billion buffet/grill sector within the
mid-scale segment, which has grown at a compound annual growth
rate of 6.2% from 1997 through 2002. We believe the appeals of
the buffet concept are its full line of food offerings and
all-you-care-to-eat format, and that this format drives greater
price/value perception in the customer's eyes.
Growth in the restaurant industry, and the
buffet/grill segment in particular, has been driven by the
increasing demands for dining ease and convenience among
today's consumers. The restaurant industry's portion
of the total food industry's dollar has grown significantly
in the past two decades. According to Technomic, the restaurant
industry's share of total food sales has increased from 23%
in 1980 to approximately 31% in 2003. This growth is expected to
continue as a result of several key lifestyle and demographic
trends, including the continued increase in spending on food
away from the home and on restaurant dining and the continued
growth in disposable incomes among the key age groups of the
population frequenting our restaurants.
Our Competitive Strengths
We believe our leading market position, strong
cash flow, flexible cost structure, motivated and trained
employees, centralized control measures, attractive unit level
economics and proven management team will allow us to grow sales
and increase profitability.
•
Leading Market Position with National
    Scale.
We are the twentieth largest
    restaurant operator in the United States and the largest
    operator of company-owned stores in the buffet/grill sector, as
    measured in both sales and number of restaurants.
•
Strong Cash Flow
    Generation.
Our strong operating
    results and favorable working capital characteristics are key
    drivers of our strong cash flow. Over the last seven fiscal
    years, our maintenance capital expenditures have averaged
    approximately 1.2% of sales, while our ongoing maintenance
    expenses have averaged approximately 2.0% of sales.
•
Flexible Operating
    Model.
As a buffet-style restaurant
    with a broad selection of food, we are not tied to a particular
    menu item enabling us to quickly modify our offerings in
    response to changes in customer preferences and food costs.
•
Highly Trained and Motivated
    Employees.
All of our buffet
    restaurant managers receive extensive training relating to all
    aspects of restaurant management at Buffets College, our
    training program operated out of our corporate headquarters. We
    further seek to reinforce our employees' commitment through
    targeted retention programs and we believe our manager and
    employee turnover rates are among the lowest in the industry.
•
Centralized Control
    Measures.
We maintain rigorous
    financial controls, service and food quality in all of our
    buffet restaurants using uniform operational standards developed
    at the corporate level and implemented at the restaurant level.
•
Attractive Unit Level
    Economics.
Over 94% of our
    company-owned stores produced positive store-level cash flow for
    fiscal 2004, and we believe that our store-level cash flow
    before occupancy costs compares favorably to other restaurants
    in the buffet/grill sector on an equivalent basis.
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•
Proven Management Team with Equity
    Ownership.
Over the past
    20 years, we have attracted and built an exceptionally
    talented and complementary executive management team with an
    average of over 20 years of restaurant industry experience
    and significant equity ownership of our company.
Our Business Strategy
Our goal is to provide exceptional value to
maintain customer loyalty and drive increased guest traffic. We
plan to continue to improve our operating performance through
the following principal strategies:
•
growth of same store sales and margin expansion
    through an emphasis on food quality, a focus on restaurant-level
    operations, theme-based meal promotions and a disciplined,
    return-on-investment based approach to advertising;
•
disciplined restaurant development; and
•
an emphasis on improving existing units that
    targets a high return on investment.
Our Background
Buffets was founded in 1983 to develop
buffet-style restaurants under the name Old Country Buffet. In
October 1985, Buffets successfully completed an initial public
offering with seven restaurants, and by 1988 had
47 company-owned units and nine franchised units. In
September 1996, Buffets merged with HomeTown Buffet, Inc., a
similar publicly-held scatter-bar, buffet-style restaurant
company established and developed by one of our co-founders. The
merger brought the total number of restaurants to
346 company-owned restaurants and 24 franchised restaurants
in 36 states at December 31, 1996.
Buffets Holdings was formed by Caxton-Iseman
Capital, Inc. in 2000. On October 2, 2000, we acquired
Buffets in a buyout from its public shareholders. Caxton-Iseman
Investments L.P. and certain other investors, including members
of management, made an equity investment in us and became the
beneficial owners of 100% of our existing common stock. Buffets
Holdings is a holding company whose assets consist substantially
of the capital stock of Buffets.
The Transactions
In connection with this offering:
•
Buffets will enter into a
    $                     million
    Amended Credit Facility;
•
Buffets will issue
    $                    million
    of Senior Notes due 2014;
•
Buffets will conduct a tender offer and consent
    solicitation to repurchase its 11 1/4% Senior
    Subordinated Notes due 2010 ("Buffets'
    11 1/4% Notes");
•
we will conduct a tender offer and consent
    solicitation to repurchase all of our 13 7/8% Senior
    Discount Notes due 2010 (our
    "13 7/8% Notes") and will redeem any
    13 7/8% Notes that remain outstanding after such
    tender offer; and
•
we will effect a reclassification of our existing
    common stock into shares of our new Class A and
    Class B common stock and consummate other internal
    corporate transactions. See "Related Party Transactions in
    Connection with this Offering."
Assuming no exercise of the underwriters'
over-allotment option, we estimate that we will sell IDSs and an
additional
$                     million
aggregate principal amount of separate senior subordinated notes
as part of this offering. Assuming an initial public offering
price of
$                     per
IDS, which represents the midpoint of the range set forth on the
cover page of this prospectus, and 100% of the stated principal
amount of each separate senior subordinated note, we estimate
that we will receive aggregate net proceeds of
$                     million
from this offering of IDSs and separate senior subordinated
notes, after deducting underwriting discounts, commissions and
other estimated transaction expenses.
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We refer to the transactions described above,
collectively, as the "Transactions." Other than the
internal corporate transactions, which will occur prior to the
consummation of the offering, each of the Transactions described
above is conditioned upon our completion of each of the other
Transactions.
The following table illustrates the estimated
sources and uses of the funds for the Transactions, assuming the
Transactions all occurred on June 30, 2004 and 100% of
Buffets' 11 1/4% Notes and our
13 7/8% Notes are tendered and purchased in the tender
offers at a cash purchase price
of      % of aggregate principal amount
and      % of accreted value,
respectively. Actual amounts may differ.
Total Sources and Uses of Funds
(Dollars in thousands)
Sources
Amount
Cash on hand
$
Amended Credit Facility
% Senior Notes offered by Buffets
IDSs offered hereby
Senior subordinated notes offered hereby
    separately from the IDSs
Total sources
$
Uses
Amount
Cash to pre-fund capital expenditures program
$
Repayment of Existing Credit Facility(1)
Repurchase of Buffets'
    11 1/4% Notes
Repurchase or redemption of our
    13 7/8% Notes
Early redemption or premium costs and payment of
    interest
Repurchase of existing common stock, warrants and
    options
Transaction fees and expenses
Total uses
$
(1)
The "Existing Credit Facility" refers
    to the $310.0 million amended credit facility that we
    entered into on February 20, 2004.
Exchange Rights of Class B Common
Stockholders
Upon the closing of this offering, our existing
stockholders will hold shares of Class B common stock. The
holders of our Class B common stock will have rights to
exchange their Class B common stock for IDSs or, if the
IDSs have been automatically separated or if the Class A
common stock is listed for separate trading on a stock exchange,
Class A common stock and/or our senior subordinated notes,
subject to certain restrictions. Following the consummation of
the transactions and through the maturity date of the notes, and
subject to the lock-up period, each share of Class B common
stock will be exchangeable into IDSs at a fixed rate
of                      shares
of Class B common stock for one IDS. If the IDSs have
automatically separated or if the shares of our Class A
common stock are listed for separate trading on a stock
exchange, the holders of the Class B common stock may
convert each share of Class B common stock
into                      shares
of Class A common stock and
$                of
senior subordinated notes. Following this offering, we expect
that there will
be                      shares
of Class B common stock
(or                      shares
of Class B common stock if the underwriters exercise their
over-allotment option with respect to the IDSs in full)
exchangeable
into                     IDSs
(or                     IDSs
if the underwriters exercise their over-allotment option in
full). Subject to limited exceptions, until the second
anniversary of the consummation of this offering, the investor
rights agreement to be entered into among the Class B
stockholders will restrict the holders of our Class B
common stock from exercising their exchange rights if, following
the
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exchange, the holders of our Class B common
stock would hold less than 10% of the outstanding shares of our
capital stock in the aggregate. For a more complete description
of this exchange right and the terms of our Class A common
stock and Class B common stock, see "Description of
Capital Stock."
Other Information About This
Prospectus
Unless the context otherwise requires, references
in this prospectus to this "offering" refer
collectively to the offering
of                     IDSs
and
$           million
aggregate principal amount of senior subordinated notes offered
separately. Throughout this prospectus, we have assumed an
initial public offering price of
$           per
IDS (comprising
$                    principal
amount allocated to each senior subordinated note and
$                     allocated
to each share of Class A common stock, in each case that
form part of an IDS), which represents the mid-point of the
range set forth on the cover page of this prospectus. We have
also assumed an initial public offering price for the separate
senior subordinated notes of 100% of their stated principal
amount. The information in this prospectus, unless otherwise
indicated:
•
does not take into account the exercise by the
    underwriters of their over-allotment option with respect to the
    IDSs;
•
does not give effect to the issuance of IDSs upon
    conversion of the Class B common stock; and
•
gives effect to the internal corporate
    transactions.
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Our Corporate Structure After this
Offering
The chart below illustrates in summary form our
capital and corporate structure after this offering.
(1)
Assumes no exercise of the underwriters'
    over-allotment option.
(2)
Comprises a
    $                     million
    term loan, a
    $                     million
    revolving credit facility (which includes a
    $                     million
    letter of credit sub-facility), a
    $                     million
    letter of credit facility and a
    $                     million
    synthetic letter of credit facility.
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The Offering
We are
offering                     IDSs
at an assumed initial public offering price of
$           per
IDS (comprising
$          allocated
to each note and
$          allocated
to each share of Class A common stock), which represents
the midpoint of the range set forth on the cover page of this
prospectus. We are also offering
$           million
aggregate principal amount of
our      % senior subordinated
notes separately from the IDSs. The offering of IDSs and the
offering of the separate senior subordinated notes are
conditioned upon each other.
None of the senior subordinated notes sold
separately from the IDSs in this offering may be purchased,
directly or indirectly, by persons who are also
(1) purchasing IDSs in this offering or (2) holders of
Class B common stock following our internal corporate
transactions.
Summary of the IDSs
What are IDSs?
IDSs are securities comprising Class A
common stock and senior subordinated notes.
Each IDS initially represents:
•
one share of our Class A common
    stock; and
•
a      % senior
    subordinated note with
    $                    principal
    amount.
The ratio of Class A common stock to
principal amount of senior subordinated notes represented by an
IDS is subject to change in the event of a stock split,
combination or reclassification of our Class A common
stock. For example, if we effect a two-for-one stock split, from
and after the effective date of the stock split, each IDS will
represent two shares of Class A common stock and the same
principal amount of senior subordinated notes as it previously
represented. Likewise, if we effect a combination or
reclassification of our Class A common stock, each IDS will
thereafter represent the appropriate number of shares of
Class A common stock on a combined or reclassified basis,
as applicable, and the same principal amount of senior
subordinated notes as it previously represented.
What payments can I expect to receive as a
    holder of IDSs?
You will be entitled to receive quarterly
interest payments at an annual rate
of      % of the aggregate principal
amount of senior subordinated notes represented by your IDSs or
approximately
$           per
IDS per year, subject to our right, under certain circumstances,
to defer interest payments. For a detailed description of these
circumstances, see "Description of Senior Subordinated
Notes — Terms of the Notes — Interest
Deferral."
You will also receive quarterly dividends on the
shares of our Class A common stock represented by your IDSs
if and to the extent dividends are declared by our board of
directors and permitted by applicable law and the terms of the
Amended Credit Facility, the indenture governing our senior
subordinated notes, the indenture governing Buffets' senior
notes and any of our other then outstanding indebtedness,
specifically, our ability to declare and pay dividends on our
common stock as described under "Dividend Policy and
Restrictions." Upon the closing of this offering, our board
of directors is expected to adopt a dividend policy which
contemplates that, subject to applicable law and the terms of
our then existing indebtedness, initial annual dividends will be
approximately
$           per
share of our Class A common stock. However, our board of
directors may, in its discretion, modify or repeal this dividend
policy. We have not paid dividends in the past and we cannot
assure you that we will pay dividends at this level in the
future or at all. Holders of our common stock do not have any
legal right to receive, or require us to pay, dividends.
We expect to make interest and dividend payments,
if any, on the 15th day of February, May, August and November of
each year to holders of record on the first day of each such
month, or, if such day is not a business day, the business day
immediately preceding such first day.
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Will my rights as a holder of IDSs be any
    different from the rights of a beneficial owner of separately
    held Class A common stock and senior subordinated
    notes?
No. As a holder of IDSs you are the beneficial
owner of the Class A common stock and senior subordinated
notes represented by your IDSs. As such, through your broker or
other financial institution and The Depository Trust Company, or
DTC, you will have exactly the same rights, privileges and
preferences, including voting rights, rights to receive
distributions, rights and preferences in the event of a default
under the indenture governing our senior subordinated notes,
ranking upon bankruptcy and rights to receive communications and
notices as a beneficial owner of separately held Class A
common stock and senior subordinated notes, as applicable, would
have through its broker or other financial institution and DTC.
What instruments will govern my rights as
    an IDS holder?
Your rights as an IDS holder will be governed by
a global IDS certificate which includes provisions with respect
to the separation, combination and adjustment of the
Class A common stock and senior subordinated notes
represented by the IDSs. The Class A common stock
represented by the IDSs will be governed by our restated
certificate of incorporation and the global stock certificate
for our Class A common stock. The senior subordinated notes
represented by the IDSs will be governed by the indenture,
including the guarantees, and the global note.
Will the IDSs be listed on an
    exchange?
We will apply to list the IDSs for trading on
the                     under
the trading symbol
"          ".
Will the terms of the senior subordinated
    notes represented by IDSs be the same as the notes sold
    separately from the IDSs?
Yes. The senior subordinated notes sold
separately from the IDSs will be identical in all respects to
the senior subordinated notes represented by IDSs and will be
part of the same series of notes issued under the same
indenture. Accordingly, holders of senior subordinated notes
sold separately and holders of senior subordinated notes
represented by IDSs will vote together as a single class, in
proportion to the aggregate principal amount of senior
subordinated notes they hold, on all matters on which they were
eligible to vote under the indenture.
Will the shares of our Class A common
    stock and senior subordinated notes represented by the IDSs be
    separately listed on an exchange?
We currently do not expect an active trading
market for our Class A common stock or senior subordinated
notes to develop. However, we will use commercially reasonable
efforts to list our Class A common stock for separate
trading on
the                     if
a sufficient number of shares of our Class A common stock
are held separately to meet the minimum requirements for
separate trading on
the                     for
at least 30 consecutive trading days. The shares of Class A
common stock and senior subordinated notes offered hereby will
be freely tradable without restriction or further registration
under the Securities Act of 1933, unless they are held by
"affiliates" as that term is defined in Rule 144
under the Securities Act.
In what form will IDSs, the shares of our
    Class A common stock and senior subordinated notes
    represented by the IDSs and the senior subordinated notes sold
    separately be issued?
The IDSs, the shares of our Class A common
stock and senior subordinated notes represented by the IDSs and
the senior subordinated notes sold separately will be issued in
book-entry form only. This means that you will not be a
registered holder of IDSs, the securities represented by the
IDSs or the senior subordinated notes sold separately and you
will not receive a certificate for your IDSs, the securities
represented by your IDSs or the senior subordinated notes sold
separately. You must rely on your broker or other financial
institution that will maintain your book-entry position to
receive the benefits and exercise the rights of a holder of IDSs
or senior subordinated notes. However, a holder of common stock,
including
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a holder of an IDS that requests that the IDS be
separated, has a legal right under Delaware law to request that
we issue a certificate for such common stock.
Can I separate my IDSs into shares of
    Class A common stock and senior subordinated notes or
    recombine shares of Class A common stock and senior
    subordinated notes to form IDSs?
Yes. Holders of IDSs, whether purchased in this
offering or in a subsequent offering of IDSs of the same series,
may, at any time after the earlier of 45 days from the date
of the closing of this offering or the occurrence of a change of
control, through their broker or other financial institution,
separate the IDSs into the shares of our Class A common
stock and senior subordinated notes represented thereby. Any
holder of shares of our Class A common stock and senior
subordinated notes may, at any time, through his or her broker,
custodian or other financial institution, combine the applicable
number of shares of Class A common stock and senior
subordinated notes to form IDSs unless the IDSs have previously
been automatically separated. Separation and combination of IDSs
may involve transaction fees charged by your broker and/or
financial intermediary. See "Description of
IDSs  — Book-Entry Settlement and
Clearance — Separation and Combination."
Will my IDSs automatically separate into
    shares of Class A common stock and senior subordinated
    notes upon the occurrence of certain events?
Yes. All outstanding IDSs will automatically
separate upon the occurrence of any of the following: a payment
default on the senior subordinated notes that continues without
cure for 90 days; any redemption, whether in whole or in
part, of the senior subordinated notes; the date on which
principal on the senior subordinated notes becomes due and
payable whether at the stated maturity or upon acceleration; or
the DTC's becoming unwilling or unable to continue as
securities depositary with respect to the IDSs or ceasing to be
a registered clearing agency under the Securities Exchange Act
of 1934 and our being unable to find a successor depositary.
Following any such automatic separation, shares of Class A
common stock and senior subordinated notes may no longer be
combined to form IDSs.
What will happen if we issue additional
    IDSs or senior subordinated notes of the same series in the
    future?
We may conduct future financings by selling
additional IDSs or senior subordinated notes of the same series,
which will have terms that are identical to those of the IDSs
being sold in this offering and will represent the same
proportion of Class A common stock and senior subordinated
notes as is represented by the then outstanding IDSs. In
addition, we may in the future issue IDSs in exchange for shares
of Class B common stock. See "Description of Capital
Stock — Class B Common Stock —
Conversion." Although the senior subordinated notes
represented by such IDSs will have terms that are identical
(except for the issuance date) to the senior subordinated notes
being sold in this offering and will be part of the same series
of senior subordinated notes for all purposes under the
indenture, it is possible that the new senior subordinated notes
will be sold, issued or deemed to be issued with original issue
discount, or OID, for United States federal income tax purposes.
Upon the issuance of any such senior subordinated notes with
OID, and upon any issuance of senior subordinated notes
thereafter, all holders of IDSs of the same series (including
the IDSs being offered hereby) and of outstanding senior
subordinated notes not represented by IDSs will automatically
exchange a ratable portion of their outstanding senior
subordinated notes for a portion of the new senior subordinated
notes, whether held directly or in the form of IDSs, and will
thereafter hold an inseparable unit consisting of new senior
subordinated notes and old senior subordinated notes with a new
CUSIP number or a new IDS (consisting of such note unit and
Class A common stock) with a new CUSIP number. As a result
of such exchanges, we intend to allocate and report the OID
associated with the sale of the new senior subordinated notes
among all holders of senior subordinated notes on a pro rata
basis, which may adversely affect your tax treatment. See
"What will be the United States federal income tax
consequences of a subsequent issuance of senior subordinated
notes?" In addition, if such senior subordinated notes are
issued with OID, holders of such notes may not be able to
recover the portion of their principal amount treated as
unaccrued OID in the event of an acceleration of
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the senior subordinated notes or a bankruptcy of
the company prior to the maturity of the senior subordinated
notes. See "Risk Factors — Risks Relating to the
IDSs, the Shares of Class A Common Stock and the Senior
Subordinated Notes Represented by the IDSs, and the Senior
Subordinated Notes Offered Separately — Subsequent
issuances of senior subordinated notes may cause you to
recognize OID and may be treated as a taxable exchange by
you."
We will promptly file a Current Report on
Form 8-K (or any other applicable form) to announce and
quantify any changes in the ratio of IDS components or changes
in OID attributable to the senior subordinated notes.
What will be the United States federal
    income tax consequences of an investment in the
    IDSs?
The United States federal income tax
consequences of the purchase, ownership and disposition of IDSs
or senior subordinated notes in this offering are not entirely
clear.
Treatment of Purchase of
IDSs.
The purchase of IDSs in this
offering should be treated for United States federal tax
purposes as the purchase of shares of our Class A common
stock and senior subordinated notes, rather than as the purchase
of a single integrated security, and, by purchasing IDSs, you
will agree to such treatment. You must allocate the purchase
price of the IDSs between those shares of Class A common
stock and senior subordinated notes in proportion to their
respective initial fair market values, which will establish your
initial tax basis in each component of the IDSs. Assuming an
initial public offering price of
$           per
IDS, which represents the mid-point of the range set forth on
the cover page of this prospectus, we expect to report the
initial fair market value of each share of Class A common
stock as
$          and
the initial fair market value of each $ principal amount of
senior subordinated notes as
$          ,
and by purchasing IDSs, you will agree to and be bound by such
allocation.
Treatment of Senior Subordinated
Notes.
We believe that the senior
subordinated notes should be treated as debt for United States
federal income tax purposes. If the senior subordinated notes
were treated as equity rather than debt for United States
federal income tax purposes, then the stated interest on the
senior subordinated notes could be treated as a dividend, and
interest on the senior subordinated notes would not be
deductible by us for United States federal income tax purposes.
Such payments would likely not qualify for the special dividend
rate described below. This would adversely affect our financial
position, cash flow, and liquidity, and could affect our ability
to make interest or dividend payments on the senior subordinated
debt and the common stock and may affect our ability to continue
as a going concern. In addition, payments on the senior
subordinated notes to foreign holders would be subject to United
States federal withholding tax at rates up to 30%. Payments to
foreign holders would not be grossed-up on account of any such
taxes.
Under current legislation, which is scheduled to
sunset in 2008, dividends paid by us will generally be taxable
to you at long-term capital gains rates to the extent of our
"earnings and profits." Any interest paid on the
senior subordinated notes will generally be taxable at ordinary
income rates. If we defer any interest payments on the notes,
holders would be required to include OID in income. See
"Material U.S. Federal Income Tax Consequences."
What will be the United States federal
    income tax consequences of a subsequent issuance of senior
    subordinated notes?
The United States federal income tax
consequences to you of the subsequent issuance of senior
subordinated notes with OID (or any issuance of senior
subordinated notes thereafter) including an issuance of IDSs in
exchange of Class B common stock are not entirely
clear.
Exchange of Senior Subordinated
Notes.
The indenture governing the
senior subordinated notes will provide that, in the event that
there is a subsequent issuance of senior subordinated notes
having terms that are otherwise identical (other than the
issuance date) in all material respects to the senior
subordinated notes represented by the IDSs, including an
issuance of senior subordinated notes upon an exchange of shares
of Class B common stock, but that are issued with OID, each
holder of IDSs or
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separately held senior subordinated notes, as the
case may be, agrees that, upon such issuance and any issuance of
senior subordinated notes thereafter, a portion of such
holder's senior subordinated notes will be automatically
exchanged for a portion of the senior subordinated notes
acquired by the holders of such subsequently issued senior
subordinated notes. Consequently, immediately following such
subsequent issuance, each holder of subsequently issued senior
subordinated notes, held either as part of IDSs or separately,
and each holder of existing senior subordinated notes, held
either as part of IDSs or separately, will own an inseparable
unit composed of a proportionate percentage of both the old
senior subordinated notes and the newly issued senior
subordinated notes. The aggregate principal amount of senior
subordinated notes owned by each holder will not change as a
result of such subsequent issuance and exchange.
It is unclear whether the exchange of senior
subordinated notes for subsequently issued senior subordinated
notes will result in a taxable exchange for United States
federal income tax purposes, and it is possible that the
Internal Revenue Service, or IRS, might successfully assert that
such an exchange should be treated as a taxable exchange. In
such case, a holder would recognize any gain realized on such
exchange, but a loss realized might be disallowed.
Regardless of whether the exchange of senior
subordinated notes is treated as a taxable event, such exchange
could result in holders having to include OID in taxable income
prior to the receipt of cash and in other potentially adverse
U.S. federal income tax consequences to holders. Following
any subsequent issuance of senior subordinated notes with OID
(or any issuance of senior subordinated notes thereafter) and
resulting exchange, we (and our agents) will report any OID on
the subsequently issued senior subordinated notes ratably among
all holders of IDSs and separately held senior subordinated
notes, and each holder of IDSs and separately held senior
subordinated notes will, by purchasing IDSs or senior
subordinated notes, agree to report OID in a manner consistent
with this approach. However, we cannot assure you that the IRS
will not assert that any OID should be reported only by the
persons that initially acquired such subsequently issued senior
subordinated notes (and their transferees) and they may
challenge a holder's reporting of OID on its tax returns.
Such a challenge could create significant uncertainties in the
pricing of IDSs and senior subordinated notes and could
adversely affect the market for IDSs and senior subordinated
notes.
Because there is no statutory, judicial or
administrative authority directly addressing the tax treatment
of the IDSs or instruments similar to the IDSs, we urge you to
consult your own tax advisor concerning the tax consequences of
an investment in the IDSs. For additional information, see
"Material U.S. Federal Income Tax Consequences."
What is the initial and prospective
    accounting treatment of the IDSs?
There is no explicit guidance under generally
accepted accounting principles regarding the accounting and
reporting for unit securities comprising common stock and notes
like the IDSs. Any accounting followed by us for the IDSs may be
subject to future scrutiny and challenge. Authoritative
accounting bodies such as the FASB, EITF or SEC may issue future
guidance, rules or interpretations which may require us to
adjust our accounting for our IDSs. For our interpretation of
the accounting treatment based on existing guidance available,
see "Management's Discussion and Analysis —
Critical Accounting Policies — Accounting Treatment
for IDSs and Class B Common Stock."
11
Table of Contents
Summary of the Capital Stock
Issuer
Buffets Holdings, Inc.
Common stock
As a result of our internal corporate
    transactions, we will
    have                      shares
    of authorized Class A common stock, par value
    $0.01 per
    share,                      shares
    of authorized Class B common stock, par value
    $0.01 per share
    and                      shares
    of authorized Class C common stock, par value
    $0.01 per share. No shares of Class C common stock
    will be outstanding upon the closing of this offering.
    Class A common stock and Class B common stock are
    identical in all respects, except that only Class A common
    stock is eligible to be included in IDSs and each class carries
    different dividend rights. See "Dividend Policies and
    Restrictions." Furthermore, our by- laws provide that, as
    long as any IDSs are outstanding, we may only issue additional
    shares of Class A common stock as part of IDSs and pursuant
    to a registration statement that has been declared effective by
    the Securities and Exchange Commission. Unless the context
    otherwise requires, references to our "common stock"
    throughout this prospectus refer to our Class A common
    stock, Class B common stock and Class C common stock.
Exchange for IDSs
Following the consummation of the Transactions
    and through the maturity date of the senior subordinated notes,
    and subject to the lock-up period, each share of Class B
    common stock will be exchangeable into IDSs at a fixed rate
    of                      shares
    of Class B common stock for one IDS. If the IDSs have
    automatically separated or if the shares of our Class A
    common stock are listed for separate trading on a stock
    exchange, the holders of the Class B common stock may
    convert each share of Class B common stock
    into                      shares
    of Class A common stock and
    $                    of
    senior subordinated notes. All exchanges are subject to
    compliance with law and applicable agreements and no such
    exchange can be made if at that time a default or event of
    default under the indenture has occurred and is continuing or
    during any interest deferral period or after the end of any
    interest deferral period until all deferred interest (including
    interest accrued thereon) has been paid in full.
Shares of Class A common stock represented
    by IDSs being offered to the public by Buffets Holdings
shares
    (or                      shares
    assuming the underwriters exercise their over-allotment option
    in full).
Shares of common stock to be outstanding
    following the offering
shares
    of Class A common stock, all of which will be represented
    by IDSs
    (or                      shares
    assuming the underwriters exercise their over-allotment option
    in full)
    and                      shares
    of Class B common stock. If all outstanding shares of
    Class B common stock were exchanged for
    IDSs,                      shares
    of Class A common stock would be outstanding.
Voting rights
Each outstanding share of our common stock will
    carry one vote per share and all classes of common stock will
    vote as a single
12
Table of Contents
class on all matters presented to the
    stockholders for a vote, except that our amended and restated
    certificate of incorporation will provide that for such time as
    Caxton-Iseman Capital together with its affiliates and related
    parties beneficially own at least 10% or 5% of our equity,
    whether in the form of Class A or Class B common
    stock, it will be entitled to nominate two directors or one
    director, respectively.
Dividends
Upon completion of this offering, our board of
    directors will adopt a dividend policy which reflects a basic
    judgment that our stockholders would be better served if we
    distributed our excess cash to them instead of retaining it in
    our business. We currently intend to pay an initial dividend
    with respect to the period commencing on the completion of this
    offering and
    ending                     based
    on a quarterly dividend level
    of                     and            per
    share of Class A common stock and Class B common
    stock, respectively, and to continue to pay quarterly dividends
    at these rates for the remainder of the first full year
    following the closing, but only if and to the extent dividends
    are declared by our board of directors and permitted by
    applicable law, the terms of the Amended Credit Facility, the
    indenture governing Buffets' Senior Notes and the indenture
    governing the senior subordinated notes. Dividend payments are
    not guaranteed and our board of directors may decide, in its
    absolute discretion, at any time and for any reason, not to pay
    dividends.
Our amended and restated certificate of
    incorporation will provide that in the event we declare and pay
    dividends on our Class A common stock we must declare and
    pay dividends on our Class B common stock at a level that
    is            times
    the dividends per share on the Class A common stock. This
    ratio is intended to provide our current owners with a yield on
    their Class B common stock in respect of the first year
    following the closing of the offering approximately equivalent
    to the yield they would receive on an equivalent value of IDSs.
Under the indenture governing the senior
    subordinated notes, the dividends we may pay are, in general,
    limited to our "excess cash." Excess cash is defined
    as our EBITDA (as defined in the indenture) reduced by cash
    interest expense, deferred interest, cash income tax expense,
    maintenance capital expenditures, excess growth capital
    expenditures, certain restructuring costs included in the
    definition of EBITDA and repayment of indebtedness, plus the net
    cash proceeds from any sale of Tahoe Joe's, Inc. See
    "Description of Senior Subordinated
    Notes — Certain
    Covenants — Limitation on Restricted
    Payments". Similar limitations on dividends and other
    distributions exist under the Amended Credit Facility and the
    Buffets' Senior Notes. See "Description of Other
    Indebtedness." In addition, the indenture and the Amended
    Credit Facility contain dividend suspension provisions under
    which we would be prohibited from paying dividends on our
    capital stock during any interest deferral period, while any
    deferred interest remains unpaid or if we fail to satisfy
    certain financial ratios.
13
Table of Contents
See "Dividend Policy and Restrictions."
Dividend payment dates
If declared, dividends on our Class A common
    stock and Class B common stock will be paid quarterly on
    the 15th day of February, May, August and November of each year
    to holders of record on the first day of each such month, or, if
    such day is not a business day, the business day immediately
    preceding such first day.
Listing
We will apply to list the IDSs on
    the                     under
    the trading symbol
    "          ".
    We will use commercially reasonable efforts to cause our
    Class A common stock to be listed for separate trading on
    the                     if
    a sufficient number of shares of our Class A common stock
    are held separately to meet the then applicable minimum
    requirements for separate trading on
    the                     for
    at least 30 consecutive trading days. Our Class A
    common stock will be freely tradable without restriction or
    further registration under the Securities Act, unless held by
    "affiliates" as that term is defined in Rule 144
    under the Securities Act of 1933.
14
Table of Contents
Summary of Senior Subordinated Notes
Issuer
Buffets Holdings, Inc.
Senior subordinated notes being offered to the
    public represented by IDSs
$           million
    aggregate principal amount
    of           % senior
    subordinated notes (or
    $           million
    aggregate principal amount assuming the underwriters exercise
    their over-allotment option in full).
Senior subordinated notes being offered to the
    public separately (not represented by IDSs)
$           million
    aggregate principal amount
    of           % senior
    subordinated notes.
Senior subordinated notes to be outstanding
    following the offering
$           million
    aggregate principal amount
    of           % senior
    subordinated notes (or
    $           million
    aggregate principal amount assuming the underwriters exercise
    their over-allotment option in full).
If all outstanding Class B common stock were
    exchanged for IDSs,
    $           million
    of the senior subordinated notes would be outstanding.
Interest rate
% per
    year.
Interest payment dates
Interest will be paid quarterly in arrears on the
    15th day of February, May, August and November of each year,
    commencing                     ,
    2004 to holders of record on the first day of each such month,
    or, if such day is not a business day, the business day
    immediately preceding such first day, of such month.
Interest deferral
Prior
    to                     ,
    2009, we may, subject to certain restrictions, defer interest
    payments on our senior subordinated notes on one or more
    occasions for up to eight quarters in the aggregate, meaning
    that the eight quarters of deferred interest must be paid no
    later
    than                     ,
    2009. In addition,
    after                     ,
    2009, we may, subject to certain restrictions, defer interest
    payments on our senior subordinated notes on up to four
    occasions for no more than two quarters per occasion, provided
    that at the end of any interest deferral period
    following                     ,
    2009, we may not further defer interest unless and until all
    deferred interest including interest accrued on deferred
    interest is paid in full. Deferred interest on the senior
    subordinated notes will bear interest at the same rate as the
    stated rate on the senior subordinated notes, compounded
    quarterly, until paid in full.
During any interest deferral period and so long
    as any deferred interest or interest on deferred interest
    remains outstanding, we will not be permitted to make any
    payment of dividends on our capital stock. For a detailed
    description of interest deferral provisions of the indenture,
    see "Description of Senior Subordinated Notes —
    Terms of the Notes — Interest Deferral."
In the event that interest payments on the senior
    subordinated notes are deferred, you would be required to
    include accrued
15
Table of Contents
interest in your income for U.S. federal
    income tax purposes on an economic accrual basis even if you do
    not receive any cash interest payments. See "Material
    U.S. Federal Income Tax Consequences."
Maturity date
The senior subordinated notes will mature
    on                     ,
    2019.
Optional redemption
We may, at our option, redeem all, but not less
    than all, of the Notes at any time, at a redemption price equal
    to 100% of the principal amount of the Notes plus accrued and
    unpaid interest to the redemption date, if for U.S. federal
    income tax purposes we are not, or would not be, in the opinion
    of a nationally recognized tax counsel experienced in such
    matters, permitted to deduct all or a substantial portion of the
    interest payable on the senior subordinated notes from our
    income.
Except as described above, we may not redeem the
    senior subordinated notes prior
    to                     ,
    2009.
On and
    after                     ,
    2009, we may redeem for cash all or part of the notes upon not
    less than 30 or more than 60 days' notice by mail to
    the holders of senior subordinated notes, at the redemption
    prices set forth under "Description of Senior Subordinated
    Notes — Optional Redemption." If we redeem the
    notes in whole or in part, the notes and common stock
    represented by each IDS will be automatically separated and
    cannot thereafter be combined.
Change of control
Upon the occurrence of a change of control, as
    defined under "Description of Senior Subordinated
    Notes — Change of Control," each holder of senior
    subordinated notes will have the right to require us to
    repurchase that holder's senior subordinated notes at a
    price equal to 101% of the principal amount of the senior
    subordinated notes being repurchased, plus any accrued but
    unpaid interest to but not including the repurchase date. If
    senior subordinated notes are held in the form of IDSs, in order
    to exercise that right, a holder of IDSs must separate its IDSs
    into the shares of Class A common stock and senior
    subordinated notes represented thereby and hold the senior
    subordinated notes separately.
Guarantees of senior subordinated notes
The senior subordinated notes will be jointly and
    severally and fully and unconditionally guaranteed, on an
    unsecured senior subordinated basis, by each of our direct and
    indirect domestic subsidiaries existing on the closing of this
    offering and each of our future domestic restricted subsidiaries
    that incur indebtedness or issue shares of preferred stock or
    certain capital stock that is redeemable at the option of the
    holder. The guarantees will be subordinated to the guarantees
    issued by the subsidiary guarantors under the Amended Credit
    Facility as well as those issued under Buffets' Senior
    Notes.
Procedures relating to subsequent issuances
The indenture governing the senior subordinated
    notes will provide that in the event we issue additional senior
    subordinated
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Table of Contents
notes having terms that are otherwise identical
    to the senior subordinated notes (except for the issuance date),
    including any issuance of IDSs in exchange for shares of
    Class B common stock, but that are issued with OID, each
    holder of IDSs or separately held senior subordinated notes, as
    the case may be, agrees that, upon such issuance and any
    issuance of senior subordinated notes thereafter, a portion of
    such holder's senior subordinated notes, whether held as
    part of IDSs or separately, will be automatically exchanged for
    a portion of the senior subordinated notes acquired by the
    holders of such subsequently issued senior subordinated notes,
    and the records of any record holders of senior subordinated
    notes will be revised to reflect such exchanges. Consequently,
    following each such subsequent issuance and exchange, without
    any action by such holder, each holder of IDSs or separately
    held senior subordinated notes, as the case may be, will own
    senior subordinated notes of each separate issuance in the same
    proportion as each other holder. However, the aggregate
    principal amount of senior subordinated notes owned by each
    holder will not change as a result of such subsequent issuance
    and exchange.
The automatic exchange of senior subordinated
    notes summarized above should not impair the rights any holder
    would otherwise have to assert a claim under applicable
    securities laws against the company or any of its agents,
    including the underwriters, with respect to the full amount of
    senior subordinated notes purchased by such holder. However, any
    subsequent issuance of senior subordinated notes by the company
    may adversely affect the tax and non-tax treatment of the
    holders of notes and IDSs. See "Risk Factors —
    Risks Relating to the IDSs, the Shares of Class A Common
    Stock and the Senior Subordinated Notes Represented by the IDSs,
    and the Senior Subordinated Notes Offered Separately —
    Subsequent issuances of senior subordinated notes may cause you
    to recognize OID and may be treated as a taxable exchange by
    you" and "Material U.S. Federal Income Tax
    Consequences — Consequences to
    U.S. Holders — Senior Subordinated
    Notes — Additional Issuances."
Ranking of senior subordinated notes and
    guarantees
Buffets Holdings is a holding company and derives
    all of its operating income and cash flow from its subsidiaries.
    The senior subordinated notes will be our and any
    guarantor's unsecured senior subordinated indebtedness and
    will be subordinated in right of payment to all our and any
    guarantor's existing and future senior indebtedness,
    including our borrowings and all guarantees under the Amended
    Credit Facility and Buffets' Senior Notes and all
    guarantees thereof. The senior subordinated notes and guarantees
    will rank pari passu in right of payment with all of our and any
    guarantor's existing and future senior subordinated
    indebtedness and trade payables, except as discussed under
    "Description of Senior Subordinated Notes —
    Ranking." The senior subordinated notes will also be
    effectively subordinated to any of our and any guarantor's
    secured
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Table of Contents
indebtedness to the extent of the value of the
    assets securing the indebtedness. Because we are a holding
    company, the senior subordinated notes will be structurally
    subordinated to all indebtedness of our non-guarantor
    subsidiaries. The indenture governing the senior subordinated
    notes will permit Buffets Holdings and the subsidiary guarantors
    to incur additional indebtedness, including senior indebtedness,
    subject to specified limitations. On a pro forma basis as of
    June 30, 2004:
• Buffets Holdings' senior
    indebtedness would have been
    $           million,
    $           million
    of which would have been secured indebtedness; and
• the subsidiary guarantors'
    senior indebtedness would have been
    $           million,
    $                    of
    which would have been secured indebtedness.
Restrictive covenants
The indenture governing the senior subordinated
    notes will contain covenants with respect to us and our
    restricted subsidiaries that will restrict:
• the incurrence of additional
    indebtedness and the issuance of preferred stock;
• the payment of dividends on, and
    redemption of, capital stock;
• a number of other restricted
    payments, including investments;
• specified sales of assets;
• specified transactions with
    affiliates;
• the creation of a number of
    liens; and
• consolidations, mergers and transfers
    of all or substantially all of our assets.
The indenture will also prohibit certain
    restrictions on distributions from our restricted subsidiaries.
    All the limitations and prohibitions described above are subject
    to a number of other important qualifications and exceptions
    described under "Description of Senior Subordinated
    Notes — Certain Covenants."
Listing
We do not currently anticipate that our senior
    subordinated notes will be listed separately on any exchange.
Risk Factors
Investing in the IDSs and our separate senior
subordinated notes involves substantial risk. Before you invest
in the IDSs or the senior subordinated notes offered separately,
you should carefully consider all the information in this
prospectus including matters set forth under the heading
"Risk Factors" beginning on page 24.
18
Table of Contents
Summary Historical and Pro Forma
Consolidated Financial and Other
Data
The table below provides a summary of historical
consolidated financial and other data for the:
•
fiscal year ended January 2, 2002,
•
26-week transitional period ended July 3,
    2002,
•
fiscal year ended July 2, 2003, and
•
fiscal year ended June 30, 2004.
In addition, the table presents pro forma balance
sheet data as of June 30, 2004 and pro forma operating data
for fiscal 2004. The pro forma adjustments are based upon
available information and certain assumptions that we believe
are reasonable.
The summary operating data for fiscal 2001, the
2002 transitional period, fiscal 2003 and fiscal 2004 are
derived from our audited financial statements. Our audited
financial statements and related notes for fiscal 2001, the 2002
transitional period, fiscal 2003 and fiscal 2004 are contained
elsewhere in this prospectus. All fiscal years presented below
other than the 2002 transitional period represent 52 week
periods.
Unless otherwise indicated, pro forma financial
information in this prospectus gives effect to the Transactions
(as described in "Prospectus Summary — The
Transactions") and the Prior Refinancing Transactions as if
these transactions had occurred on the first day of the period
indicated, in the case of operating data, and on the last day of
the period indicated, in the case of balance sheet data. The
"Prior Refinancing Transactions" comprise the
repurchase of a portion of Buffets' 11 1/4% Notes
in the open market and in privately negotiated transactions in
the amount of $45.3 million aggregate principal amount
through August 18, 2004, with a remaining $0.5 million
used to repay indebtedness under the Existing Credit Facility.
The information presented below should be read in
conjunction with "Use of Proceeds,"
"Capitalization," "Selected Historical
Consolidated Financial Data," "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," "Unaudited Pro Forma Condensed Financial
Data" and the consolidated financial statements and notes
thereto included elsewhere in this prospectus.
19
Table of Contents
26-Week
Pro Forma
Fiscal Year
Transitional
Fiscal Year
Fiscal Year
Fiscal Year
Ended
Period Ended
Ended
Ended
Ended
January 2,
July 3,
July 2,
June 30,
June 30,
2002
2002
2003
2004
2004
(Dollars in thousands, except average guest check and average weekly sales)
Operating Data:
Restaurant sales
$
1,044,734
$
527,084
$
985,286
$
942,831
$
Restaurant costs
886,069
444,917
850,840
812,662
Advertising expenses
27,640
14,349
28,589
25,854
General and administrative expenses
50,569
25,687
45,382
42,722
Goodwill amortization
10,942
—
—
—
Impairment of assets and site closing costs
—
—
4,803
1,878
Gain on sale of Original Roadhouse Grill
    restaurants
—
—
(7,088
)
—
Loss on sale-leaseback transactions
—
—
5,856
—
Financing-related compensation expense
—
—
—
2,240
Operating income
$
69,514
$
42,131
$
56,904
$
57,475
$
Net income (loss)
$
12,555
$
(7,517
)
$
11,927
$
7,970
$
Cash Flow and Other Financial Data:
Growth capital expenditures
$
19,816
$
6,786
$
12,583
$
8,783
Maintenance capital expenditures
10,293
5,231
8,215
5,684
Re-image capital expenditures
—
—
2,654
18,218
Corporate and systems capital expenditures
7,987
2,263
2,270
322
Depreciation and amortization
53,404
20,409
36,885
33,807
Cash flow provided by operating activities
68,835
39,250
57,656
50,490
Cash flow provided by (used in) investing
    activities
2,575
(11,337
)
26,662
(28,383
)
Cash flow used in financing activities
(59,590
)
(47,164
)
(76,825
)
(11,890
)
Covenant EBITDA(1)
115,931
60,900
97,123
100,219
Pro Forma Balance Sheet Data (at end of
    period):
Cash and cash equivalents
Working capital
Total debt
Historical Key Operating
    Statistics
(2)
:
Number of company-owned restaurants (at end of
    period)
401
393
372
360
360
Average guest check
$
6.89
$
7.03
$
7.13
$
7.22
$
7.22
Average weekly sales
$
49,368
$
51,044
$
48,953
$
49,949
$
49,949
Same store sales change
2.1
%
0.2
%
(4.2
)%
1.3
%
1.3
%
(1)
We have presented Covenant EBITDA in this
    prospectus because it is a financial measure used in the
    Existing Credit Facility to determine compliance with certain
    covenants and financial ratios, and we expect it to be used in
    the Amended Credit Facility for similar purposes. In addition,
    the indentures governing Buffets' 11 1/4% Notes
    and our 13 7/8% Notes use similar but not identical
    measures, and we expect the indenture governing Buffets'
    Senior Notes to use a similar measure, to determine our ability
    to incur debt, make restricted payments and engage in certain
    transactions. Covenant EBITDA represents EBITDA (earnings before
    net interest expense, taxes, depreciation and amortization)
    adjusted to exclude the following items:
•
non-cash deferred rental expense,
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•
gain on sale of Original Roadhouse Grill,
•
loss on sale-leaseback transactions,
•
loss related to refinancing,
•
loss related to early extinguishment of debt,
•
financing-related compensation expenses,
•
adjusted EBITDA attributable to the Original
    Roadhouse Grill restaurants sold in fiscal 2003,
•
Tahoe Joe's minority interest expense,
•
cash appreciation plan compensation expense,
•
loss on disposal of assets and management fees;
•
and to give effect to the base rent on the
    restaurants for which sale-leaseback transactions were completed
    and accretion of the deferred gains on the sale-leaseback
    transactions.
We consider Covenant EBITDA an important
indicator to investors in IDSs because it provides information
related to our ability to provide cash flows to service debt,
pay dividends and fund capital expenditures. Covenant EBITDA is
not a measure in accordance with GAAP, and should not be
considered a substitute for, operating income (loss), net income
(loss), and other measures of financial performance reported in
accordance with GAAP. In addition, Covenant EBITDA should not be
used as a substitute for our various cash flow measures
(e.g., operating, investing and financial cash flows),
which are discussed in "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
All companies do not calculate Covenant EBITDA in the same
manner. Accordingly, the Covenant EBITDA measure presented below
may not be comparable to similarly titled measures of other
companies.
The following is a calculation of Covenant EBITDA
for the periods indicated:
26-Week
Pro Forma
Fiscal Year
Transitional
Fiscal Year
Fiscal Year
Fiscal Year
Ended
Period Ended
Ended
Ended
Ended
January 2,
July 3,
July 2,
June 30,
June 30,
2002
2002
2003
2004
2004
(Dollars in thousands)
Net income (loss)
$
12,555
$
(7,517
)
$
11,927
$
7,970
$
Depreciation and amortization
53,404
20,409
36,885
33,807
Interest expense, net
42,707
14,876
40,928
39,185
Income tax expense (benefit)
15,292
(3,354
)
5,319
1,648
Adjustment for sale-leaseback transactions(A)
(8,006
)
(2,107
)
3,678
(416
)
Non-cash adjustments(B)
1,064
1,165
7,246
3,850
Gain on sale of Original Roadhouse Grill(C)
—
—
(7,088
)
—
Adjusted EBITDA of Original Roadhouse Grill(D)
(4,145
)
(2,643
)
(4,251
)
—
Management fees(E)
3,060
1,347
2,479
1,884
Loss related to refinancing(F)
—
38,724
—
4,776
Loss related to early extinguishment of debt(G)
—
—
—
5,275
Financing-related compensation expense(H)
—
—
—
2,240
Covenant EBITDA
$
115,931
$
60,900
$
97,123
$
100,219
$
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The following is a reconciliation of cash flow
provided by operating activities to Covenant EBITDA for the
periods indicated:
26-Week
Fiscal Year
Transitional
Fiscal Year
Fiscal Year
Ended
Period Ended
Ended
Ended
January 2,
July 3,
July 2,
June 30,
2002
2002
2003
2004
Cash flow provided by operating
    activities
$
68,835
$
39,250
$
57,656
$
50,490
Amortization of debt issuance costs
(3,905
)
(1,617
)
(1,182
)
(1,370
)
Net loss related to refinancing:
Write off of debt issuance costs
—
(11,022
)
—
(4,201
)
Accrued redemption fees
—
(17,000
)
—
—
Original issue discount expensed
—
(4,107
)
—
—
Accretion of original issue discount
(773
)
(357
)
(739
)
(2,049
)
Deferred interest
(1,269
)
(614
)
—
—
Asset impairments
(491
)
—
—
—
Loss on sale leaseback transactions
—
—
(5,856
)
—
Changes in assets and liabilities
3,944
5,650
(2,110
)
7,565
Interest expense, net
42,707
14,876
40,928
39,185
Income tax expense (benefit), current provision
15,271
(556
)
4,642
448
Adjustment for sale-leaseback transactions(A)
(8,006
)
(2,107
)
3,678
(416
)
Other charges(I)
703
1,076
1,878
1,667
Adjusted EBITDA of Original Roadhouse Grill(D)
(4,145
)
(2,643
)
(4,251
)
—
Management fees(E)
3,060
1,347
2,479
1,884
Loss related to refinancing(F)
—
38,724
—
4,776
Financing-related compensation expenses(H)
—
—
—
2,240
Covenant EBITDA
$
115,931
$
60,900
$
97,123
$
100,219
(A)
Adjustments for sale-leaseback transactions
    reflects the impact of our sale-leaseback transactions, which
    have occurred in the period from January 4, 2001 through
    June 30, 2004, including an adjustment for minimum base
    rent as if the sale-leaseback transactions occurred on
    January 4, 2001. The adjustment also gives effect to the
    loss on sale-leaseback transactions and accretion of deferred
    gains on the sale-leaseback transactions.
(B)
Non-cash adjustments include:
•
the addition of non-cash fair market value
    adjustments to the carrying value of long-lived assets as
    reflected in the impairment of assets line item in the
    consolidated statements of operations for fiscal 2003 and fiscal
    2004;
•
the addition of non-cash straight-line, deferred
    rent;
•
the exclusion of the non-cash effect of minority
    interest associated with our Tahoe Joe's subsidiary;
•
the addition of non-cash compensation expense
    recognized for a cash appreciation incentive plan; and
•
the exclusion of the non-cash loss (gain) on
    disposal of assets as recorded in the consolidated statements of
    cash flows.
(C)
Gain on sale of Original Roadhouse Grill reflects
    a reduction of the net proceeds from the sale of 13 Original
    Roadhouse Grill restaurants net of the related carrying value of
    these restaurants, as recorded in the consolidated statement of
    operations for fiscal 2003.
(D)
Adjusted EBITDA of Original Roadhouse Grill,
    which includes store-level cash flow, less general and
    administrative costs, plus non-cash deferred rent, gives pro
    forma effect to the sale of the 13 Original Roadhouse Grill
    restaurants as if the sale occurred on January 4, 2001. Net
    income, interest expense
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and income tax expense for Original Roadhouse
    Grill restaurants include certain allocations based on a
    percentage of sales.
(E)
Management cash fees reflects the exclusion of
    expense recognized with respect to annual advisory fees paid to
    Caxton-Iseman Capital and Sentinel Capital Partners, L.L.C. as
    discussed in "Certain Relationships and Related
    Transactions."
(F)
Loss related to refinancing reflects transaction
    and other costs associated with our recapitalization on
    June 28, 2002 and our refinancings on February 20,
    2004 and May 18, 2004, as recorded in the consolidated
    statements of operations in the 2002 transitional period and
    fiscal 2004.
(G)
Loss related to early extinguishment of debt
    reflects the exclusion of costs associated with redeeming a
    portion of Buffets' senior subordinated notes prior to
    maturing during fiscal 2004, as recorded in the consolidated
    statement of operations.
(H)
Financing-related compensation expense represents
    payments to holders of stock options and cash incentive plan
    units in conjunction with the issuance of our 13 7/8% Notes
    on May 18, 2004, as recorded in the consolidated statement
    of operations in fiscal 2004.
(I)
Other charges include:
•
the addition of non-cash straight-line, deferred
    rent;
•
the exclusion of the non-cash effect of minority
    interest associated with our Tahoe Joe's
    subsidiary; and
•
the addition of non-cash compensation expense
    recognized for a cash appreciation incentive plan.
(2)
Reflects data relating to all of our
    company-owned restaurants.
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Table of Contents
RISK FACTORS
In addition to the other information contained
in this prospectus, the following factors should be considered
carefully before investing in the IDSs (including the
Class A common stock and senior subordinated notes
represented thereby) or our senior subordinated notes. If any of
the following risks actually occur, our business, results of
operations or financial condition would likely suffer.
Risks Relating to the IDSs, the Shares of
Class A Common Stock and the Senior Subordinated Notes
Represented by the IDSs, and the Senior Subordinated Notes
Offered Separately
Buffets Holdings is a holding company and
    relies on dividends, interest and other payments, advances and
    transfer of funds from its subsidiaries to meet its debt service
    and other obligations.
Buffets Holdings has no direct operations and no
significant assets other than ownership of 100% of the stock of
Buffets, all of which will be pledged to the creditors under the
Amended Credit Facility which Buffets Holdings guarantees.
Because Buffets Holdings conducts its operations through its
direct and indirect subsidiaries, Buffets Holdings depends on
those entities for dividends and other payments to generate the
funds necessary to meet its financial obligations, including
payments of principal and interest on the senior subordinated
notes, and to pay dividends with respect to the common stock.
Legal and contractual restrictions in the Amended Credit
Facility, the indenture governing Buffets' Senior Notes and
other agreements governing current and future indebtedness of
Buffets Holdings' subsidiaries, as well as the financial
condition and operating requirements of Buffets Holdings'
subsidiaries, may limit Buffets Holdings' ability to obtain
cash from its subsidiaries. The earnings from, or other
available assets of, Buffets Holdings' subsidiaries may not
be sufficient to pay dividends or make distributions or loans to
enable Buffets Holdings to make payments in respect of the
senior subordinated notes when such payments are due and to pay
dividends on the common stock.
Your rights as holders of the senior
    subordinated notes and guarantees thereof to receive payments
    will be contractually subordinated to those of holders of our
    senior indebtedness and may be otherwise adversely affected in
    the event of our bankruptcy.
As a result of the subordinated nature of the
senior subordinated notes and related guarantees, upon any
distribution to our creditors or the creditors of the subsidiary
guarantors in bankruptcy, liquidation or reorganization or
similar proceeding relating to Buffets Holdings or the
subsidiary guarantors or Buffets Holdings' or their
property, the holders of Buffets Holdings' senior
indebtedness and senior indebtedness of the subsidiary
guarantors will be entitled to be paid in full in cash before
any payment may be made with respect to the senior subordinated
notes or the subsidiary guarantees. Holders of the senior
subordinated notes would then participate with all other holders
of unsecured senior subordinated indebtedness of Buffets
Holdings or the subsidiary guarantors similarly subordinated in
the assets remaining after Buffets Holdings and the subsidiary
guarantors have paid all senior indebtedness. Buffets Holdings
and the subsidiary guarantors may not have sufficient funds to
pay all of our creditors, and holders of our senior subordinated
notes may receive less, ratably, than the holders of senior
indebtedness, and because of the obligation to turn over
distributions to holders of senior indebtedness, the holders of
the notes may receive less, ratably, than trade payables and
other general unsecured indebtedness. Further, in the event of
such bankruptcy proceedings, a party in interest may seek to
subordinate the senior subordinated notes to all creditors under
principles of equitable subordination or to recharacterize the
senior subordinated notes as equity. If such a subordination or
recharacterization did occur, you may not recover any amounts
owing on the senior subordinated notes or the guarantees and you
might be required to return any payments made to you on account
of the senior subordinated notes up to six years prior to our
bankruptcy.
As of June 30, 2004, on a pro forma basis,
the senior subordinated notes and the subsidiary guarantees
would have ranked junior, on a consolidated basis, to
approximately
$           million
of indebtedness, including borrowings under the Amended Credit
Facility and Buffets' Senior Notes. In addition, as of
June 30, 2004, on a pro forma basis, we would have had the
ability to borrow up to an
24
Table of Contents
additional amount of
$           million
under the Amended Credit Facility (less amounts reserved for
letters of credit), which would have ranked senior in right of
payment to the senior subordinated notes.
Payments on the senior subordinated notes
    may be blocked if we default under senior indebtedness,
    including the Amended Credit Facility.
If we default in the payment of any of our senior
indebtedness, including the Amended Credit Facility and
Buffets' Senior Notes, we will not make any payments on the
senior subordinated notes until the payment default has been
cured or waived. In addition, even if we are making payments on
our senior indebtedness on a timely basis, payments on the
senior subordinated notes may be blocked for up to 180 days
if we default on our senior indebtedness in some other manner.
During any period in which payments on the senior subordinated
notes are prohibited or blocked in this manner, we and the
guarantors will be prohibited from making any payments in
respect of the senior subordinated notes and the guarantees.
Claims of noteholders will be structurally
    subordinated to claims of creditors of all of our existing and
    future unrestricted subsidiaries, all of which will not
    guarantee the senior subordinated notes.
The senior subordinated notes will not be
guaranteed by any of our current or future unrestricted
subsidiaries. Our unrestricted subsidiaries are separate and
distinct legal entities and have no obligation, contingent or
otherwise, to pay any amounts due pursuant to the senior
subordinated notes, or to make any funds available therefor,
whether by dividends, loans, distributions or other payments.
Any right that we or the guarantors have to receive any assets
of any of the unrestricted subsidiaries upon the liquidation or
reorganization of those subsidiaries, and the consequent rights
of holders of senior subordinated notes to realize proceeds from
the sale of any of those subsidiaries' assets, will be
structurally subordinated to the claims of that
subsidiaries' creditors, including trade creditors and
holders of debt of those subsidiaries.
Our substantial level of indebtedness could
    adversely affect our financial condition and prevent us from
    fulfilling our obligations under the senior subordinated
    notes.
We have substantial indebtedness. As of
June 30, 2004, on a pro forma basis, we would have had
$           million
of total indebtedness.
Our ability to make distributions, pay dividends
or make other payments will be subject to applicable law and
contractual restrictions contained in the instruments governing
any indebtedness of ours and our subsidiaries, including the
Amended Credit Facility and Buffets' Senior Notes. Our
level of debt could have negative consequences to you and to us.
For example, it could:
•
make it more difficult for us to satisfy our
    obligations with respect to the senior subordinated notes;
•
increase our vulnerability to general adverse
    economic and industry conditions, as well as increases in
    interest rates;
•
limit our ability to fund future working capital,
    capital expenditures, debt service and general corporate
    requirements;
•
require us to dedicate a substantial portion of
    our cash flow from operations to the payments on our
    indebtedness, thereby reducing the availability of our cash flow
    to fund working capital, capital expenditures and other general
    corporate purposes;
•
place us at a competitive disadvantage compared
    to our competitors that have less debt;
•
limit our ability to borrow additional funds;
•
limit our ability to refinance our debt on terms
    acceptable to us or at all;
•
make it more difficult to comply with the
    covenants in the indentures relating to our senior subordinated
    notes and Buffets' Senior Notes and the amended credit
    agreement relating to the
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Table of Contents
Amended Credit Facility, which could in turn
    result in an event of default under our indebtedness, which, if
    not cured or waived, could have a material adverse effect on
    us; and
•
limit our flexibility in planning for, or
    reacting to, changes in our business and future business
    opportunities.
Servicing our debt will require a
    significant amount of cash. Our subsidiaries' ability to
    generate sufficient cash depends on numerous factors which are
    beyond our control and we may be unable to generate sufficient
    cash flow to service our debt obligations, including making
    payments on the senior subordinated notes, and to pay dividends
    on the common stock.
Our ability to pay our expenses, principal and
interest on the senior subordinated notes and other debt, and
dividends on the common stock depends on our ability to generate
positive cash flow in the future, which is subject to general
economic, financial, competitive, legislative and regulatory
factors and other factors that are beyond our control. Our
subsidiaries' operations may not generate sufficient cash
flow from operations and future borrowings may not be available
under the Amended Credit Facility in amounts sufficient to
enable us or our subsidiaries to make payments in respect of the
senior subordinated notes, to pay our other debt, to pay
dividends on the common stock or to fund other liquidity needs.
If our subsidiaries do not have sufficient cash
flow from operations, Buffets Holdings or our subsidiaries may
be required to incur additional indebtedness, refinance all or
part of our existing debt or sell assets. If Buffets Holdings or
our subsidiaries are required to refinance existing debt, or if
Buffets Holdings or our subsidiaries are required to sell some
of our assets, we may not be able to do so on terms that are
acceptable to us or at all. In addition, the terms of existing
or future debt agreements, including the indenture governing
Buffets' Senior Notes and the Amended Credit Facility, may
restrict Buffets Holdings or our subsidiaries from effecting any
of these alternatives or we may fail for other reasons. If we
are required to pursue other alternatives, the value of the
senior subordinated notes and the common stock, and our
financial condition, could be significantly adversely affected.
Despite our current leverage, we may still
    be able to incur substantially more debt. This could further
    exacerbate the risks that we and our subsidiaries
    face.
We, including our subsidiaries, may be able to
incur substantial additional indebtedness in the future. For
example, the Amended Credit Facility will provide commitments of
up to
$           million,
$           million
of which would have been available for future borrowings as of
June 30, 2004, on a pro forma basis, subject to the
aggregate borrowing base availability and net of
$           million
in outstanding letters of credit. All of such indebtedness would
have been secured and effectively senior to the senior
subordinated notes. If we incur any additional indebtedness that
ranks equally with the senior subordinated notes, the holders of
that debt will be entitled to share ratably with the holders of
the senior subordinated notes in any proceeds distributed in
connection with any insolvency, liquidation, reorganization,
dissolution or other winding-up of us. This may have the effect
of reducing the amount of proceeds paid to you. If additional
indebtedness is added to our or our subsidiaries' current
levels of indebtedness, the substantial risks described above
would intensify.
If we or our subsidiaries default on our or
    their obligations to pay our or their indebtedness, or fail to
    comply with other covenants thereunder, we may not be able to
    make payments on the senior subordinated notes and the common
    stock.
If we or our subsidiaries are unable to generate
sufficient cash flow and are otherwise unable to obtain funds
necessary to meet required payments on our or their
indebtedness, or if we or our subsidiaries otherwise fail to
comply with the various covenants, including financial and
operating covenants, in the instruments governing our or their
indebtedness (including the Amended Credit Facility and our
guarantee
26
Table of Contents
thereof and the indenture governing Buffets'
Senior Notes), we or they could be in default under the terms of
the agreements governing such indebtedness. In the event of such
default:
•
the holders of such indebtedness could elect to
    declare all the funds borrowed thereunder to be due and payable,
    together with accrued and unpaid interest and liquidated
    damages, if any. The lenders under the Amended Credit Facility
    could elect to terminate their commitments, cease making further
    loans and institute foreclosure proceedings against our or our
    subsidiaries' assets. We could directly or indirectly be
    prohibited from paying principal, premium, if any, and interest
    on the senior subordinated notes, and dividends with respect to
    the common stock, and
•
we or our subsidiaries could be forced into
    bankruptcy or liquidation.
We will be subject to restrictive covenants
    in our debt agreements that may limit our ability to pursue
    strategies that may otherwise improve our
    business.
The indenture governing the senior subordinated
notes, the indenture governing Buffets' Senior Notes and
the Amended Credit Facility will impose significant operating
and financial restrictions on us.
These restrictions will limit our ability, among
other things, to:
•
incur additional indebtedness;
•
acquire the assets of, or merge or consolidate
    with, other companies;
•
pay dividends or make other distributions on our
    capital stock or repurchase, repay or redeem the senior
    subordinated notes, subordinated debt and our capital stock;
•
make certain investments;
•
incur liens;
•
make capital expenditures;
•
enter into certain types of transactions with our
    stockholders and affiliates;
•
limit dividends or other payments by our
    restricted subsidiaries to us; and
•
transfer or sell certain or all or substantially
    all of our assets.
These covenants in the indenture governing the
senior subordinated notes, the indenture governing Buffets'
Senior Notes and the Amended Credit Facility may impair our
ability to finance future operations or capital needs or to
enter into acquisitions or joint ventures or engage in other
favorable business activities.
If we default under the indenture governing the
senior subordinated notes, the indenture governing Buffets'
Senior Notes or the Amended Credit Facility or we fail to
satisfy the financial covenants under the Amended Credit
Facility, we could directly or indirectly be prohibited from
making any payments with respect to the IDSs or our senior
subordinated notes. In addition, the lenders under the Amended
Credit Facility and the holders of Buffets' Senior Notes
could require immediate repayment of the entire principal that
is outstanding under those facilities or those notes. If those
lenders or holders require immediate repayment, our assets may
not be sufficient to repay them and also repay the senior
subordinated notes in full.
Our dividend policy may negatively impact
    our ability to finance capital expenditure or
    operation.
Upon completion of this offering, our board of
directors will adopt a dividend policy under which cash
generated by our business in excess of operating needs, interest
and principal payments on indebtedness, and capital expenditures
sufficient to maintain our properties would in general be
distributed as regular quarterly dividends to the holders of our
Class A common stock and Class B common stock rather
than retained by us and used to finance growth opportunities. As
a result, we may not retain a sufficient amount of cash to
finance growth opportunities or unanticipated capital
expenditure needs or to fund our
27
Table of Contents
operations in the event of a significant business
downturn. We may have to forgo growth opportunities or capital
expenditures that would otherwise be necessary or desirable if
we do not find alternative sources or financing. If we do not
have sufficient cash for these purposes or if the
$                     million
in cash on hand available for capital expenditures is
insufficient, our financial condition and our business will
suffer.
Federal and state laws permit a court to
    void the senior subordinated notes or the subsidiary guarantees
    under certain circumstances.
The issuance of the senior subordinated notes and
the guarantees may be subject to review under United States
federal bankruptcy law and comparable provisions of state
fraudulent conveyance laws if a bankruptcy or reorganization
case or lawsuit is commenced by or on behalf of our or the
guarantor's unpaid creditors. A court could void the
obligations under the senior subordinated notes or the
guarantees, further subordinate the senior subordinated notes or
the guarantees or take other action detrimental to holders of
the senior subordinated notes, if, among other things, at the
time the indebtedness was incurred, Buffets Holdings or the
guarantors:
•
issued the senior subordinated notes or the
    guarantees to delay, hinder or defraud present or future
    creditors; or
•
received less than reasonably equivalent value or
    fair consideration for issuing the senior subordinated notes or
    the guarantees at the time of issuance of the senior
    subordinated notes or the guarantees and:
•
were insolvent or rendered insolvent by reason of
    issuing the senior subordinated notes or the guarantees;
•
were engaged, or about to engage, in a business
    or transaction for which the remaining unencumbered assets
    constituted unreasonably small capital to carry on our or the
    guarantor's business; or
•
intended to incur, or believed that we or the
    guarantor would incur, debts beyond our or the guarantor's
    ability to pay as they mature.
The measures of insolvency for purposes of
fraudulent transfer laws vary depending upon the law of the
jurisdiction that is being applied in any proceeding to
determine whether a fraudulent transfer had occurred. It is not
clear what standard a court would use to determine whether or
not we or a guarantor were solvent at the relevant time.
Generally, however, a person would be considered insolvent if,
at the time it incurred the debt:
•
the sum of its debts, including contingent
    liabilities, was greater than the fair saleable value of all of
    its assets;
•
the present fair saleable value of its assets was
    less than the amount that would be required to pay its probable
    liability on its existing debts, including contingent
    liabilities, as they become absolute and mature; or
•
it could not pay its debts as they become due.
The proceeds of the offering will be used to
repurchase a portion of Buffets Holdings' common stock from
our existing stockholders and to repurchase all of our
outstanding 13 7/8% Notes and Buffets'
11 1/4% Notes, which may subject the holders of our
senior subordinated notes in this offering to the claim that we
did not receive fair consideration for the senior subordinated
notes issued in this offering. In the event that we meet any of
the financial condition fraudulent transfer tests described
above at the time of or as a result of this offering, a court
could integrate the issuance of our senior subordinated notes
with the distribution to our shareholders and the repurchase of
Buffets' 11 1/4% Notes, and, therefore, conclude
that we did not get fair value for the offering viewed as an
integrated transaction. In such a case, a court could hold the
debt owed to the holders of our senior subordinated notes void
or unenforceable or may subordinate it to the claims of other
creditors.
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Table of Contents
The guarantee of our senior subordinated notes by
any subsidiary guarantor could be subject to the claim that,
since the guarantee was incurred for the benefit of Buffets
Holdings, and only indirectly for the benefit of the subsidiary
guarantor, the obligations of the subsidiary guarantor were
incurred for less than fair consideration. If such a claim were
successful and it was proven that the subsidiary guarantor was
insolvent at the time the guarantee was issued, a court could
void the obligations of the subsidiary guarantor under the
guarantee or subordinate these obligations to the subsidiary
guarantor's other debt or take action detrimental to the
holders of the senior subordinated notes. If the guarantee of
any subsidiary guarantor were voided, our notes would be
effectively subordinated to the indebtedness of that subsidiary
guarantor.
If we defease the senior subordinated
    notes, such defeasance may be subject to preferential transfer
    laws.
The indenture relating to the senior subordinated
notes will provide that we may, after complying with certain
conditions, defease the senior subordinated notes and be
released from our obligations under many of the covenants
contained in the indenture, or discharge all our obligations
under the indenture within a year of the maturity date or a
redemption date. One of the conditions to such defeasance or
discharge is that we deposit sufficient funds with the trustee
to pay the principal, interest and premium on the outstanding
senior subordinated notes through maturity or an applicable
redemption date. If a bankruptcy or reorganization proceeding is
initiated within the applicable preference period, which
generally varies from 90 days to one year, the deposit
would likely be subject to review under federal bankruptcy law
and comparable provisions of state law. In such an event, a
court may void the deposit of funds with the trustee as a
preferential transfer and recover such funds for the benefit of
the bankruptcy estate and/or otherwise order that the funds be
made available to satisfy claims of other creditors. In
addition, under the fraudulent conveyance laws described above,
a court could also void the deposit of funds or take other
actions detrimental to you. The indenture will permit us to
finance the defeasance deposit by issuing secured debt that we
would not otherwise be permitted to incur under the indenture.
In the event that the payments used to defease the senior
subordinated notes are found to be a preferential transfer or a
fraudulent conveyance, any claims arising out of or relating to
the senior subordinated notes would be effectively subordinated
in right of payment to any of our secured debt, including the
secured debt incurred to finance the defeasance, to the extent
of the value of the assets securing that debt. Your ability to
recover on the senior subordinated notes after a defeasance or
discharge may be reduced or eliminated as a result of these
risks.
You may not receive the level of dividends
    provided for in our dividend policy, which our board of
    directors is expected to adopt upon the closing of this
    offering, or any dividends at all.
Our board of directors may, in its discretion,
amend or repeal the dividend policy it is expected to adopt upon
the closing of this offering. Our board of directors may
decrease the level of dividends provided for in this dividend
policy or entirely discontinue the payment of dividends. Future
dividends with respect to shares of our capital stock, if any,
will depend on, among other things, our results of operations,
cash requirements, financial condition, contractual
restrictions, business opportunities, provisions of applicable
law and other factors that our board of directors may deem
relevant. The Amended Credit Facility, the indenture governing
Buffets' Senior Notes and the indenture governing the
senior subordinated notes will contain significant restrictions
on our ability to make dividend payments. In addition, certain
provisions of the Delaware General Corporation Law may limit our
ability to pay dividends.
The indenture governing the senior
    subordinated notes will permit us to pay a significant portion
    of our free cash flow to stockholders in the form of
    dividends.
The indenture governing the senior subordinated
notes, the indenture governing Buffets' Senior Notes and
the Amended Credit Facility will permit us to pay a significant
portion of our free cash flow to holders of our common stock,
including Class A common stock held as part of IDSs, and
Class B common stock in the form of dividends. Holders of
senior subordinated notes held separately from the IDSs may be
29
Table of Contents
adversely affected by such provisions because any
amounts paid by us in the form of dividends will not be
available in the future to satisfy our obligations under the
senior subordinated notes.
The realizable value of our assets upon
    liquidation may be insufficient to satisfy claims.
As of June 30, 2004, on a pro forma basis,
our total assets included intangible assets in the amount of
$                     million,
representing
approximately           %
of our total consolidated assets. The value of these intangible
assets will continue to depend significantly upon the continued
profitability of the respective brands. As a result, in the
event of a default on our senior subordinated notes or any
bankruptcy or dissolution of our company, the realizable value
of these assets may be substantially lower and may be
insufficient to satisfy the claims of our creditors.
Subject to restrictions set forth in the
    indenture, we may defer the payment of interest to you for a
    significant period of time.
Prior
to                     ,
2009, we may, subject to restrictions set forth in the
indenture, defer interest payments on our senior subordinated
notes on one or more occasions for up to an aggregate period of
eight quarters. In addition,
after                     ,
2009, we may, subject to certain restrictions, defer interest
payments on our senior subordinated notes on four occasions for
up to two consecutive quarters per each occasion. At the end of
any interest deferral period following   , 2009, we
may not further defer interest unless and until all deferred
interest, including interest accrued on deferred interest, is
paid in full. Deferred interest will bear interest at the same
rate as the senior subordinated notes. For any interest deferred
during the first five years, we are not obligated to pay any
deferred interest
until                     ,
2009; so you may be owed a substantial amount of deferred
interest that will not be due and payable until such time. For
any interest deferred
after                     ,
2009, we are not obligated to pay all of the deferred interest
until                     ,
2019, so you may be owed a substantial amount of deferred
interest that will not be due and payable until such time.
During any interest deferral period and so long as any deferred
interest or interest on deferred interest remains outstanding,
we will not be permitted to make any payment of dividends on our
capital stock.
Deferral of interest payments would have
    adverse tax consequences for you and may adversely affect the
    trading price of the IDSs or the separately held senior
    subordinated notes.
If interest payments on the senior subordinated
notes are deferred, you will be required to recognize interest
income for U.S. federal income tax purposes on an economic
accrual basis in respect of interest payments on the senior
subordinated notes represented by the IDSs or the separately
held senior subordinated notes, as the case may be, held by you
before you receive any cash payment of this interest. In
addition, you will not receive the cash with respect to accrued
interest if you sell the IDSs or the separately held senior
subordinated notes, as the case may be, before the end of any
deferral period or before the record date relating to interest
payments that are to be paid. If interest is deferred, the IDSs
or the separately held senior subordinated notes may trade at a
price that does not fully reflect the value of accrued but
unpaid interest on the senior subordinated notes. In addition,
the fact that we may defer payments of interest on the senior
subordinated notes under certain circumstances may mean that the
market price for the IDSs or the separately held senior
subordinated notes may be more volatile than other securities
that do not have this term. See "Material U.S. Federal
Income Tax Consequences — Consequences to
U.S. Holders — Senior Subordinated
Notes — Deferral of Interest."
Interest on the notes may not be deductible
    by us for U.S. federal income tax purposes, which could
    significantly reduce our future cash flow and impact our ability
    to make interest and dividend payments.
While we believe that the senior subordinated
notes should be treated as debt for U.S. federal income tax
purposes, this position may not be sustained if challenged by
the Internal Revenue Service. If the senior subordinated notes
were treated as equity rather than debt for U.S. federal
income tax purposes, then the stated interest on the senior
subordinated notes would be treated as a dividend (to the extent
of our tax "earnings and profits"), and interest on
the senior subordinated notes would not be deductible by
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us for U.S. federal income tax purposes. Our
inability to deduct interest on the senior subordinated notes
could materially increase our taxable income and, thus, our
U.S. federal and applicable state income tax liability.
This would reduce our after-tax cash flow, which may result in a
default under the Amended Credit Facility, and would materially
and adversely impact our ability to make interest and dividend
payments and may also affect our ability to continue as a going
concern. In the case of foreign holders, treatment of the notes
as equity for U.S. federal income tax purposes would
subject payments to such holders in respect of the notes to
withholding or estate taxes in the same manner as payments made
with regard to Class A common stock and could subject us to
liability for withholding taxes that were not collected on
payments of interest.
The allocation of the purchase price of the
    IDSs may not be respected.
The purchase price of each IDS must be allocated
for tax purposes between the share of Class A common stock
and senior subordinated note represented thereby in proportion
to their respective fair market values at the time of purchase.
We expect to report the initial fair market value of each share
of Class A common stock as
$           and
the initial fair market value of each of our senior subordinated
notes represented by an IDS as
$           and,
by purchasing IDSs, you will agree to and be bound by such
allocation, assuming an initial public offering price of
$           per
IDS, which represents the mid-point of the range set forth on
the cover page of this prospectus. If this allocation is not
respected, it is possible that the senior subordinated notes
will be treated as having been issued with OID (if the
allocation to the senior subordinated notes were determined to
be too high) or amortizable bond premium (if the allocation to
the senior subordinated notes were determined to be too low).
You generally would have to include OID in income in advance of
the receipt of cash attributable to that income and would be
able to elect to amortize bond premium over the term of the
senior subordinated notes.
Subsequent issuances of senior subordinated
    notes may cause you to recognize OID and may be treated as a
    taxable exchange by you.
The indenture governing the senior subordinated
notes will provide that, in the event there is a subsequent
issuance of senior subordinated notes but having terms that are
otherwise identical (other than issuance date) to the senior
subordinated notes, including any issuance of IDSs in exchange
for shares of Class B common stock, but that are issued
with OID, each holder of IDSs or separately held senior
subordinated notes, as the case may be, agrees that, upon such
issuance and any issuance of senior subordinated notes
thereafter, a portion of such holder's senior subordinated
notes will be automatically exchanged for a portion of the
senior subordinated notes acquired by the holders of such
subsequently issued senior subordinated notes. Consequently,
immediately following such subsequent issuance and exchange,
without any action by such holder, each holder of senior
subordinated notes, held either as part of IDSs or separately,
will own senior subordinated notes of each separate issuance in
the same proportion as each other holder.
Regardless of whether the exchange is treated as
a taxable event, such exchange would result in holders having to
include OID in taxable income prior to the receipt of cash as
described below, and may result in other potentially adverse tax
consequences to holders. See "Material U.S. Federal
Income Tax Consequences — Consequences to
U.S. Holders — Senior Subordinated
Notes — Additional Issuances." In addition, the
potential amount of OID that would be required to be included in
taxable income by holders as a result of an automatic exchange
(as described below) is indefinite and may be a significant
amount, in part due to our ability to engage in numerous
subsequent issuances.
Following any subsequent issuance and exchange of
senior subordinated notes with OID, we (and our agents) will
report any OID on the subsequently issued senior subordinated
notes ratably among all holders of IDSs and separately held
senior subordinated notes, and each holder of IDSs and
separately held senior subordinated notes will, by purchasing
IDSs or separately held senior subordinated notes, agree to
report OID in a manner consistent with this approach. However,
the Internal Revenue Service may assert that any OID should be
reported only to the persons that initially acquired such
subsequently issued senior subordinated notes (and their
transferees) and thus may challenge the holders' reporting
of OID on
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their tax returns. In such case, the Internal
Revenue Service might further assert that, unless a holder can
establish that it is not a person that initially acquired such
subsequently issued senior subordinated notes (or a transferee
thereof), all of the senior subordinated notes held by such
holder would have OID. Any of these assertions by the Internal
Revenue Service could create significant uncertainties in the
pricing of IDSs and senior subordinated notes and could
adversely affect the market for IDSs and senior subordinated
notes.
For a discussion of these tax related risks, see
"Material U.S. Federal Income Tax Consequences."
The aggregate stated principal amount of the
senior subordinated notes owned by each holder will not change
as a result of such subsequent issuance and automatic exchange.
However, under New York and federal bankruptcy law, holders of
subsequently issued senior subordinated notes having OID may not
be able to collect the portion of their principal face amount
that represents unamortized OID at the acceleration or filing
date in the event of an acceleration of the senior subordinated
notes or our bankruptcy prior to the maturity date of the senior
subordinated notes. As a result, an automatic exchange that
results in a holder receiving a senior subordinated note with
OID could have the effect of ultimately reducing the amount such
holder can recover from us in the event of an acceleration or
bankruptcy.
We may have to establish a reserve for
    contingent tax liabilities in the future, which could adversely
    affect our ability to make dividend payments on the
    IDSs.
Even if the IRS does not challenge the tax
treatment of the senior subordinated notes, it is possible that
as a result of an alteration of facts relied upon at the time of
issuance of the notes, we will in the future need to change our
anticipated accounting treatment and establish a reserve for
contingent tax liabilities associated with the disallowance of
all or part of the interest deductions on the notes. If we were
required to maintain such a reserve, our ability to make
dividend payments could be materially impaired and the market
for the IDSs, Class A common stock and senior subordinated
notes could be adversely affected. In addition, any resulting
impact to our financial statements could lead to a default under
the Amended Credit Facility.
Before this offering, there has not been a
    public market for our IDSs, shares of our common stock or the
    senior subordinated notes, which may cause the price of the
    IDSs, shares of our common stock and separate senior
    subordinated notes to fluctuate substantially and negatively
    affect the value of your investment.
None of the IDSs, the shares of our common stock
or senior subordinated notes has a public market history. In
addition, there has not been an active market in the United
States for securities similar to the IDSs. An active trading
market for the IDSs, shares of our common stock or the senior
subordinated notes sold separately in this offering might not
develop in the future, which may cause the price of the IDSs,
shares of our common stock or the senior subordinated notes sold
separately in this offering to fluctuate substantially, and we
currently do not expect that an active trading market for the
shares of our common stock will develop until the senior
subordinated notes mature, if at all. If the senior subordinated
notes represented by your IDSs are redeemed or mature, the IDSs
will automatically separate and you will then hold the shares of
our common stock. We do not intend to list our senior
subordinated notes on any securities exchange.
The initial public offering price of the IDSs and
the senior subordinated notes sold separately in this offering
will be determined by negotiations among us, our principal
equity sponsor and the representatives of the underwriters and
may not be indicative of the market price of the IDSs and the
senior subordinated notes sold separately in this offering after
the offering. Factors such as quarterly variations in our
financial results and dividend payments, announcements by us or
others, developments affecting us, our clients and our
suppliers, general interest rate levels and general market
volatility could cause the market price of the IDSs and the
senior subordinated notes sold separately in this offering to
fluctuate significantly.
In addition, to the extent a market develops for
our common stock or senior subordinated notes, or both, separate
from the IDSs, the price of your IDSs may be affected.
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The limited liquidity of the trading market
    for the senior subordinated notes sold separately may adversely
    affect the trading price of the separate senior subordinated
    notes.
We are separately selling
$           million
aggregate principal amount of senior subordinated notes,
representing approximately 10% of the total outstanding senior
subordinated notes (including those senior subordinated notes
represented by IDSs). While the senior subordinated notes sold
separately are part of the same series of notes as, and are
identical to, the senior subordinated notes represented by the
IDSs, at the time of the issuance of the separate senior
subordinated notes, the senior subordinated notes represented by
the IDSs will not be separable for at least 45 days and
will not be separately tradeable until separated. As a result,
the initial trading market for the senior subordinated notes
sold separately will be very limited. After the holders of the
IDSs are permitted to separate their IDSs, a sufficient number
of holders of IDSs may not separate their IDSs into shares of
our common stock and senior subordinated notes so that a sizable
and more liquid trading market for the senior subordinated notes
not represented by IDSs may not develop or may not develop in a
timely manner. Trading markets for debt securities have
generally treated debt securities issued in larger aggregate
principal amounts more favorably than similar securities issued
in smaller aggregate principal amounts because of the increased
liquidity created by potentially higher trading volumes
associated with larger debt issuances. Because approximately 10%
of the senior subordinated notes will initially be represented
by the IDSs, it is likely that the senior subordinated notes
sold separately will not trade at prices reflecting the
aggregate principal amount of the combined issuance of senior
subordinated notes included in the IDS offering and the separate
senior subordinated notes offering. Therefore, a liquid market
for the senior subordinated notes sold separately may not
develop or may not develop in a timely manner, which may
adversely affect the ability of the holders of the separate
senior subordinated notes to sell any of their separate senior
subordinated notes and the price at which these holders would be
able to sell any of the senior subordinated notes sold
separately.
If interest rates rise, the trading value
    of our IDSs and the senior subordinated notes sold separately in
    this offering may decline.
If interest rates rise or should the threat of
rising interest rates develop, debt markets may be adversely
affected. As a result, the trading value of our IDSs and senior
subordinated notes may decline.
Future sales or the possibility of future
    sales of a substantial amount of IDSs, shares of our common
    stock or the senior subordinated notes, together with the future
    conversion of our Class B common stock into IDSs, may
    depress the price of the IDSs, shares of our common stock and
    the senior subordinated notes.
Future sales or the availability for sale of
substantial amounts of IDSs or shares of our common stock or a
significant principal amount of the senior subordinated notes in
the public market could adversely affect the prevailing market
price of the IDSs, shares of our common stock and the senior
subordinated notes and could impair our ability to raise capital
through future sales of our securities.
After consummation of the Transactions, we
anticipate that our existing stockholders will
own                     IDSs
and                      shares
of our Class B common stock
(or                     IDSs,
if the underwriters' over-allotment option is exercised in
full). Subject to satisfaction of the Conversion Conditions,
such shares of our Class B common stock will initially be
convertible
into                     IDSs.
We may issue shares of our common stock and
senior subordinated notes, which will be in the form of IDSs, or
other securities from time to time as consideration for future
acquisitions and investments. In the event any such acquisition
or investment is significant, the number of shares of our common
stock and the aggregate principal amount of senior subordinated
notes, which may be in the form of IDSs, or the number or
aggregate principal amount, as the case may be, of other
securities that we may issue may in turn be significant. In
addition, we may also grant registration rights covering those
IDSs, shares of our common stock, senior subordinated notes or
other securities in connection with any such acquisitions and
investments.
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Our amended certificate of incorporation
    and by-laws and several other factors could limit another
    party's ability to acquire us and deprive our investors of
    the opportunity to obtain a takeover premium for their
    securities.
Provisions contained in our amended and restated
certificate of incorporation and by-laws could make it more
difficult for a third party to acquire us, even if doing so
might be beneficial to our stockholders. Provisions of our
amended and restated certificate of incorporation and by-laws
impose various procedural and other requirements that make it
more difficult for stockholders to effect some corporate
actions. For example, our amended and restated certificate of
incorporation authorizes our board to determine the rights,
preferences, privileges and restrictions of unissued series of
preferred stock, without any vote or action by our stockholders.
Thus, our board can authorize and issue shares of preferred
stock with voting or conversion rights that could adversely
affect the voting or other rights of holders of our common
stock. These rights may have the effect of delaying or deterring
a change of control of our company, and could limit the price
that investors might be willing to pay in the future for shares
of our common stock. In addition, a change of control of our
company may be delayed or deferred as a result of our having
three classes of directors. We are also subject to
Section 203 of the Delaware General Corporation Law, which
prohibits us from engaging in a "business combination"
with an "interested stockholder" for a three-year
period following the time that this stockholder becomes an
interested stockholder, unless the business combination is
approved in a prescribed manner. In addition, our amended and
restated certificate of incorporation provides that for such
time as Caxton-Iseman Capital together with its affiliates and
related parties beneficially own at least 10% or 5% of our
equity, it will be entitled to nominate two of our directors or
one director, respectively. These provisions might make an
unsolicited takeover more difficult or less likely to occur or
might prevent such a takeover, even though such a takeover might
offer our stockholders the opportunity to sell their stock at a
price above the prevailing market price and might be favored by
a majority of our stockholders.
You will be immediately diluted by
    $           per
    share of common stock if you purchase IDSs in this
    offering.
If you purchase IDSs in this offering, based
on the book value of the assets and liabilities reflected on our
balance sheet, you will experience an immediate dilution of
$           per
share of common stock represented by the IDSs, which exceeds the
entire price allocated to each share of common stock represented
by the IDSs in this offering, because there will be a net
tangible book deficit for each share of common stock outstanding
immediately after this offering. Our pro forma net tangible book
deficiency as of June 30, 2004, after giving effect to this
offering, was approximately
$          million,
or
$           per
share of Class A common stock.
We may not be able to repurchase the senior
    subordinated notes upon a change of control.
Upon the occurrence of specific kinds of change
of control events, we will be required to offer to repurchase
the outstanding senior subordinated notes at 101% of their
principal amount at the date of repurchase unless such senior
subordinated notes have been previously called for redemption.
We may not have sufficient financial resources to purchase all
of the senior subordinated notes that are tendered upon a change
of control offer. Furthermore, the Amended Credit Facility, with
certain limited exceptions, will prohibit the repurchase or
redemption of the senior subordinated notes before their stated
maturity. Consequently, lenders thereunder may have the right to
prohibit any such purchase or redemption, in which event we will
seek to obtain waivers from the required lenders. We may not be
able to obtain such waivers or refinance our indebtedness on
terms acceptable to us, or at all. Buffets' Senior Notes
will have similar terms restricting the repurchase of the senior
subordinated notes while Buffets' Senior Notes remain
outstanding. Finally, the occurrence of a change of control
could also constitute an event of default under the Amended
Credit Facility, which could result in the acceleration of all
amounts due thereunder. See "Description of Senior
Subordinated Notes — Change of Control."
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We may not be able to refinance the Amended
    Credit Facility or Buffets' Senior Notes at maturity on
    favorable terms or at all.
The amended and restated revolving credit
facility and the senior secured term loan facility included in
the Amended Credit Facility will mature in full in 2009 and
2011, respectively and Buffets' Senior Notes will mature in
2014. We may not be able to renew or refinance the Amended
Credit Facility or Buffets' Senior Notes, or if renewed or
refinanced, the renewal or refinancing may occur on less
favorable terms. In particular, some of the terms of the senior
subordinated notes that may be viewed as favorable to the senior
lenders, such as our ability to defer interest and acceleration
forbearance periods, become less favorable in 2009, which may
materially adversely affect our ability to refinance or renew
the Amended Credit Facility or Buffets' Senior Notes beyond
such date. If we are unable to refinance or renew the Amended
Credit Facility or Buffets' Senior Notes, our failure to
repay all amounts due on the maturity date would cause a default
under the Amended Credit Facility and Buffets' Senior
Notes. In addition, our interest expense may increase
significantly if we refinance the Amended Credit Facility or
Buffets' Senior Notes on terms that are less favorable to
us than the terms of the Amended Credit Facility or
Buffets' Senior Notes, respectively.
Risks Relating to Our Business
Our core buffet restaurants are a maturing
    restaurant concept and face intense competition.
Our restaurants operate in a highly competitive
industry comprising a large number of restaurants, including
national and regional restaurant chains and franchised
restaurant operations, as well as locally-owned, independent
restaurants. Price, restaurant location, food quality, service
and attractiveness of facilities are important aspects of
competition, and the competitive environment is often affected
by factors beyond a particular restaurant management's
control, including changes in the public's taste and eating
habits, population and traffic patterns and economic conditions.
Many of our competitors have greater financial resources than we
have and there are few non-economic barriers to entry.
Therefore, new competitors may emerge at any time. We cannot
assure you that we will be able to compete successfully against
our competitors in the future or that competition will not have
a material adverse effect on our operations or earnings.
We have been operating our core buffet restaurant
concept for 20 years, and our restaurant locations have a
median age of approximately 10 years. As a result, we are
exposed to vulnerabilities associated with being a mature
concept. These include vulnerability to innovations by
competitors and out-positioning in markets where the
demographics or customer preferences have changed. Mature units
require greater expenditures for repair, maintenance,
refurbishments and re-concepting, and we will be required to
continue making such expenditures in the future in order to
preserve traffic at many of our restaurants. We cannot assure
you, however, that these expenditures, particularly for
remodeling and refurbishing, will be successful in preserving or
building guest counts, as proved to be the case with a number of
units recently upgraded as part of a two year re-imaging program.
We are required to respond to changing consumer
preferences and dining frequency. Our profits are dependent upon
discretionary spending by consumers, which is markedly
influenced by variations in the economy. Our average weekly
sales declined 2.0% during fiscal 2003 due in large part to weak
economic conditions. Furthermore, if our competitors in the
casual dining, mid-scale and quick-service segments respond to
economic changes through menu engineering or by adopting
discount pricing strategies, it could have the effect of drawing
customers away from companies such as ours that do not routinely
engage in discount pricing, thereby reducing sales and
pressuring margins. Because certain elements of our cost
structure are fixed in nature, particularly over shorter time
horizons, changes in marginal sales volume can have a more
significant impact on our profitability than for a business
possessing a more variable cost structure.
We are dependent on attracting and
    retaining qualified employees while controlling labor
    costs.
We operate in the service sector and are
therefore extremely dependent upon the availability of qualified
restaurant personnel. Availability of staff varies widely from
location to location. If restaurant
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management and staff turnover trends increase, we
would suffer higher direct costs associated with recruiting and
retaining replacement personnel. Moreover, we could suffer from
significant indirect costs, including restaurant disruptions due
to management changeover, increased above-store management
staffing and potential delays in new store openings due to staff
shortages. Competition for qualified employees exerts pressure
on wages paid to attract qualified personnel, resulting in
higher labor costs, together with greater expense to recruit and
train them.
Many of our employees are hourly workers whose
wages may be impacted by an increase in the federal or state
minimum wage. Proposals have been made at federal and state
levels to increase minimum wage levels. An increase in the
minimum wage may create pressure to increase the pay scale for
our employees. A shortage in the labor pool or other general
inflationary pressures or changes could also increase our labor
costs. Furthermore, the operation of buffet-style restaurants is
materially different from other restaurant concepts.
Consequently, the retention of executive management familiar
with our core buffet business is important to our continuing
success. The departure of one or more key operations executives
or the departure of multiple executives in a short time period
could have an adverse impact on our business. Our former
Executive Vice President of Purchasing separated from the
company in 2004. We are currently considering the addition of
one additional position to our executive management group.
Our workers' compensation and employee
benefit expenses are disproportionately concentrated in states
with adverse legislative climates. Our highest per-employee
workers' compensation insurance costs are in the State of
California, where we retain a large employment presence.
California also enacted legislation in October 2003 that would
require large employers to provide health insurance or
equivalent funding for workers who have traditionally not been
covered by employer health plans. While this law is currently
being challenged, other states have proposed similar
legislation. Other state and federal mandates, such as
compulsory paid absences, increases in overtime wages and
unemployment tax rates, stricter citizenship requirements and
revisions in the tax treatment of employee gratuities, could
also adversely affect our business. Any increases in labor costs
could have a material adverse effect on our results of
operations and could decrease our profitability and cash
available to service our debt obligations, if we were unable to
compensate for such increased labor costs by raising the prices
we charge our customers or realizing additional operational
efficiencies.
We are dependent on timely delivery of
    fresh ingredients by our suppliers.
Our restaurant operations are dependent on timely
deliveries of fresh ingredients, including fresh produce, dairy
products and meat. The cost, availability and quality of the
ingredients we use to prepare our food are subject to a range of
factors, many of which are beyond our control. Fluctuations in
weather, supply and demand and economic and political conditions
could adversely affect the cost, availability and quality of our
ingredients. Historically, when operating expenses increased due
to inflation or increases in food costs, we recovered increased
costs by increasing our menu prices. However, we may not be able
to recover increased costs in the future because competition may
limit or prohibit such future increases. If our food quality
declines due to the lack of, or lower quality of, our
ingredients or due to interruptions in the flow of fresh
ingredients and similar factors, customer traffic may decline
and negatively affect our restaurants' results. We rely
exclusively on third-party distributors and suppliers for such
deliveries. The number of companies capable of servicing our
distribution needs on a national basis has declined over time,
reducing our bargaining leverage and increasing vulnerability to
distributor interruptions.
Our restaurant sales are subject to
    seasonality and major world events.
Our restaurant sales volume fluctuates
seasonally. Overall, restaurant sales are generally higher in
the summer months and lower in the winter months. Positive or
negative trends in weather conditions can have a strong
influence on our business. This effect is heightened because
many of our restaurants are in geographic areas that experience
extremes in weather, including severe winter conditions and
tropical storm patterns. Additionally, major world events may
adversely affect our business.
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We face risks associated with government
    regulations.
In addition to wage and benefit regulatory risks,
we are subject to other extensive government regulation at a
federal, state and local level. These include, but are not
limited to, regulations relating to the sale of food in all of
our restaurants and of alcoholic beverages in our Tahoe
Joe's Famous Steakhouse restaurants. We are required to
obtain and maintain governmental licenses, permits and
approvals. Difficulty or failure in obtaining or maintaining
them in the future could result in delaying or canceling the
opening of new restaurants or the closing of current ones. Local
authorities may suspend or deny renewal of our governmental
licenses if they determine that our operations do not meet the
standards for initial grant or renewal. This risk would be even
higher if there were a major change in the licensing
requirements affecting our types of restaurants.
The Federal Americans with Disabilities Act
prohibits discrimination on the basis of disability in public
accommodations and employment. Mandated modifications to our
facilities in the future to make different accommodations for
disabled persons could result in material, unanticipated expense.
Application of state "Dram Shop"
statutes, which generally provide a person injured by an
intoxicated patron the right to recover damages from an
establishment that wrongfully served alcoholic beverages to the
intoxicated person, to our operations, or liabilities otherwise
associated with liquor service in our Tahoe Joe's Famous
Steakhouse restaurants, could negatively affect our financial
condition if not otherwise insured under our general liability
insurance policy.
Negative publicity relating to one of our
    restaurants, including our franchised restaurants, could reduce
    sales at some or all of our other restaurants.
We are, from time to time, faced with negative
publicity relating to food quality, restaurant facilities,
health inspection scores, employee relationships or other
matters at one of our restaurants or those of our franchisees.
Adverse publicity may negatively affect us, regardless of
whether the allegations are valid or whether we are liable. In
addition, the negative impact of adverse publicity relating to
one restaurant may extend beyond the restaurant involved to
affect some or all of our other restaurants. If a franchised
restaurant fails to meet our franchise operating standards, our
own restaurants could be adversely affected due to customer
confusion or negative publicity. A similar risk exists with
respect to totally unrelated food service businesses, if
customers mistakenly associate such unrelated businesses with
our own operations.
Food-borne illness incidents could result
    in liability to us and could reduce our restaurant
    sales.
We cannot guarantee that our internal controls
and training will be fully effective in preventing all
food-borne illnesses. Furthermore, our reliance on third-party
food processors makes it difficult to monitor food safety
compliance and increases the risk that food-borne illness would
affect multiple locations rather than single restaurants. Some
food-borne illness incidents could be caused by third-party food
suppliers and transporters outside of our control. New illnesses
resistant to our current precautions may develop in the future,
or diseases with long incubation periods could arise, such as
bovine spongiform encephalopathy ("BSE"), sometimes
referred to as "mad cow disease," that could give rise
to claims or allegations on a retroactive basis. In addition,
the levels of chemicals or other contaminants that are currently
considered safe in certain foods may be regulated more
restrictively in the future or become the subject of public
concern.
The reach of food-related public health concerns
can be considerable given the attention given these matters by
the media. Local public health developments could have a
national adverse impact on our sales, whether or not
specifically attributable to our restaurants or those of our
franchisees or competitors.
Any negative development relating to our
    self-service food service approach would have a material adverse
    impact on our primary business.
Our buffet restaurants utilize a service format
that is heavily dependent upon self-service by our customers.
Food tampering by customers or other events affecting the
self-service format could cause
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regulatory changes or changes in our business
pattern or customer perception. Any development that would
materially impede or prohibit our continued use of a
self-service food service approach, or reduce the appeal of
self-service to our guests, would have a material adverse impact
on our primary business.
We face risks associated with environmental
    laws.
We are subject to federal, state and local laws,
regulations and ordinances that govern activities or operations
that may have adverse environmental effects, such as discharges
to air and water, as well as handling and disposal practices for
solid and hazardous wastes. These may impose liability for the
costs of cleaning up, and damage resulting from, sites of past
spills, disposals or other releases of hazardous materials, both
from governmental and private claimants. We could incur such
liabilities regardless of whether we lease or own the
restaurants or land in question and regardless of whether such
environmental conditions were created by us or by a prior owner
or tenant. We cannot assure you that environmental conditions
relating to our prior, existing or future restaurants or
restaurant sites will not have a material adverse affect on us.
We face risks because of the number of
    restaurants that we lease.
Our success depends in part on our ability to
secure leases in desired locations at rental rates we believe to
be reasonable. We currently lease all of our restaurants located
in shopping centers and malls, and we lease the land for all but
one of our freestanding restaurants. By December 2007,
approximately 85 of our current leases will have expiring base
lease terms and be subject to renewal consideration. Each lease
agreement provides that the lessor may terminate the lease for a
number of reasons, including our default in any payment of rent
or taxes or our breach of any covenant or agreement in the
lease. Termination of any of our leases could harm our results
of operations and, as with a default under any of our
indebtedness, could have a material adverse impact on our
liquidity. Although we believe that we will be able to renew the
existing leases that we wish to extend, we cannot assure you
that we will succeed in obtaining extensions in the future at
rental rates that we believe to be reasonable or at all.
Moreover, if some locations should prove to be unprofitable, we
could remain obligated for lease payments even if we decided to
withdraw from those locations. See "Business —
Property." We will incur special charges relating to the
closing of such restaurants, including lease termination costs.
Impairment charges and other special charges will reduce our
profits.
We may not be able to protect our
    trademarks and other proprietary rights.
We believe that our trademarks and other
proprietary rights are important to our success and our
competitive position. Accordingly, we devote substantial
resources to the establishment and protection of our trademarks
and proprietary rights. However, the actions taken by us may be
inadequate to prevent imitation of our brands, proprietary
rights and concepts by others, which may thereby dilute our
brands in the marketplace or diminish the value of such
proprietary rights, or to prevent others from claiming
violations of their trademarks and proprietary rights by us. In
addition, others may assert rights in our trademarks and other
proprietary rights. Our exclusive rights to our trademarks are
subject to the common law rights of any other person who began
using the trademark (or a confusingly similar mark) prior to
both the date of our registration and our first use of such
trademarks in the relevant territory. For example, because of
the common law rights of such a preexisting restaurant in
portions of Colorado and Wyoming, our restaurants in those
states use the name "Country Buffet." We cannot assure
you that third parties will not assert claims against our
intellectual property or that we will be able to successfully
resolve such claims. Future actions by third parties may
diminish the strength of our restaurant concepts'
trademarks or other proprietary rights and decrease our
competitive strength and performance. We could also incur
substantial costs to defend or pursue legal actions relating to
the use of our intellectual property, which could have a
material adverse affect on our business, results of operation or
financial condition.
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FORWARD-LOOKING STATEMENTS
This prospectus, particularly the sections
entitled "Prospectus Summary," "Risk
Factors," "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and
"Business," includes both historical and
forward-looking statements. We have based these forward-looking
statements on information available to us on the date of this
prospectus and our current expectations and projections about
future results. When we use words in this prospectus, such as
"anticipate," "intend," "plan,"
"believe," "estimate," "expect,"
"project," "plan" and variations of such
words or similar expressions, we do so to identify
forward-looking statements. Our actual results may differ
materially from those anticipated in these forward-looking
statements. These forward-looking statements are affected by
risks, uncertainties and assumptions that we make, including,
among other things, the factors that are described in "Risk
Factors" and:
•
our substantial leverage, including the inability
    to generate the necessary amount of cash to service our existing
    debt and the incurrence of substantial indebtedness in the
    future,
•
restrictions contained in our debt agreements,
•
interest rate fluctuations,
•
future cash flows,
•
dependence on key employees,
•
general business conditions,
•
changes in business strategy, development plans
    or cost savings plans,
•
general economic conditions which may impact the
    level of consumer spending,
•
highly competitive nature of the restaurant
    industry,
•
changes in consumer preferences,
•
the seasonality of our business and the impact of
    weather conditions,
•
adverse publicity and litigation,
•
consumer perceptions of food safety,
•
our continued ability to find suitable restaurant
    locations and to finance new restaurant development,
•
labor and benefit costs,
•
future regulatory actions and conditions in our
    operating areas, and
•
other factors over which we have little or no
    control.
You should keep in mind that any forward-looking
statement made by us in this prospectus, or elsewhere, speaks
only as of the date on which we make it. New risks and
uncertainties come up from time to time, and it is impossible
for us to predict these events or how they may affect us. We
have no duty to, and do not intend to, update or revise the
forward-looking statements in this prospectus after the date of
this prospectus. In light of these risks and uncertainties, you
should keep in mind that any forward-looking statement made in
this prospectus or elsewhere might not occur.
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Table of Contents
USE OF PROCEEDS
The table below sets forth our estimate of the
sources and uses of funds required to effect the Transactions,
assuming the Transactions all occurred as of June 30, 2004.
See "Prospectus Summary — The Transactions."
The estimated sources and uses are based on an assumed initial
public offering price of
$           per
IDS (which represents the mid-point of the range set forth on
the cover page of this prospectus) and the sale of
$           million
aggregate principal amount of our senior subordinated notes that
are being sold separately from the IDSs. Actual amounts may vary
from the amounts shown below.
Sources
Amount
(In thousands)
Cash on hand
$
Amended Credit Facility
% Senior Notes
    offered by Buffets
IDSs offered hereby
Senior subordinated notes offered hereby
    separately from the IDSs
Total sources
$
Uses
Amount
(In thousands)
Cash to pre-fund capital expenditures program
$
Repayment of Existing Credit Facility(1)
Repurchase of Buffets
    11 1/4% Notes(2)(3)
Repurchase or redemption of our
    13 7/8% Notes(2)(4)
Early redemption or premium costs and payment of
    interest
Repurchase of existing common stock, warrants and
    options
Transaction fees and expenses
Total uses
$
(1)
The Existing Credit Facility consists of a
    revolving loan facility of $30.0 million, a letter of
    credit facility of $20.0 million, a synthetic letter of
    credit facility of $30.0 million, and term loan of
    $230.0 million. Borrowings under the term loan facility
    bear interest, at Buffets' option, at either adjusted LIBOR
    plus 3.50% or at the alternate base rate plus 2.50%. Borrowings
    under the revolving loan facility bear interest, at
    Buffets' option, at either adjusted LIBOR plus 3.25% or at
    the alternate base rate plus 2.25%, subject to a leveraged-based
    pricing grid. Outstanding letters of credit under the revolving
    loan facility will be subject to a per annum fee equal to 3.25%,
    subject to a leveraged-based pricing grid. The alternate base
    rate is the higher of Credit Suisse First Boston's prime
    rate and the federal funds effective rate plus 0.5%. The term
    loan and the synthetic letter of credit facility will mature on
    June 28, 2009, and the amounts due under the term loan will
    become due and payable in equal quarterly installments in an
    annual amount equal to 1% of the term loan during each of the
    first 4 1/2 years of the loan, with the balance
    payable in equal quarterly installments during the last year of
    the loan. The revolving facility and the letter of credit
    facility will mature on June 28, 2007.
(2)
We have assumed that 100% of Buffets'
    11 1/4% Notes and our 13 7/8% Notes will be
    tendered and repurchased in the tender offers or redeemed at a
    cash purchase price of      % of
    aggregate principal amount
    and           %
    of accreted value, respectively.
(3)
On June 28, 2002, Buffets issued
    11 1/4% senior subordinated notes in the principal
    amount of $230.0 million due July 15, 2010.
    Buffets' 11 1/4% Notes were issued at a price
    equal to 96.181% of the principal amount, resulting in an
    effective yield of 12% to the initial principal amount. Interest
    is payable semi-annually on January 15 and July 15 of
    each year through July 15, 2010.
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(4)
On May 18, 2004, we issued $132 million
    aggregate principal amount at maturity of our
    13 7/8% senior discount notes due December 15,
    2010. Our 13 7/8% Notes were issued at a discount to
    their aggregate principal amount at maturity. Prior to
    July 31, 2008, interest will accrue on our
    13 7/8% Notes in the form of an increase in the
    accreted value of those notes. The accreted value of each note
    will increase until July 31, 2008 at a rate of
    13 7/8% per annum. After this date, cash interest on
    the notes will accrue and be payable on January 31 and
    July 31 of each year at a rate of 13 7/8% per
    annum. If we fail to meet certain leverage ratio tests on our
    about July 31, 2006 or July 31, 2008, additional
    interest will accrue on the notes from that date at a rate of
    1% per annum, up to a maximum of 2% per annum.
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DIVIDEND POLICY AND RESTRICTIONS
General
Upon completion of this offering, our board of
directors will adopt a dividend policy which reflects a basic
judgment that our stockholders would be better served if we
distributed our excess cash to them instead of retaining it in
our business. Under this policy, cash generated by our business
in excess of operating needs, interest and principal payments on
indebtedness, and capital expenditures sufficient to maintain
our restaurants and other assets would in general be distributed
as regular quarterly dividends to the holders of our
Class A common stock and Class B common stock rather
than retained by us and used to finance growth opportunities.
As described more fully below, you may not
receive any dividends as a result of the following factors:
•
nothing requires us to pay dividends;
•
while our current dividend policy contemplates
    the distribution of our excess cash, this policy could be
    modified or revoked at any time;
•
even if our dividend policy were not modified or
    revoked, the actual amount of dividends distributed under the
    policy and the decision to make any distribution is entirely at
    the discretion of our board of directors;
•
the amount of dividends distributed is subject to
    debt covenant restrictions under our indenture, the indenture
    relating to Buffets' Senior Notes and the Amended Credit
    Facility;
•
the amount of dividends distributed is subject to
    state law restrictions;
•
our stockholders will have no contractual or
    other legal right to dividends; and
•
we may not have enough cash to pay dividends due
    to changes to our operating earnings, working capital
    requirements and anticipated cash needs.
We currently intend to pay an initial dividend
under this policy
on                     with
respect to the period commencing on the completion of this
offering and
ending                     based
on a quarterly dividend level of
$          and
$           per
share of Class A common stock and Class B common
stock, respectively, and to continue to pay quarterly dividends
at these rates for the remainder of the first full year
following the closing of this offering. In respect of the first
year following the closing of this offering, this would be
$          and
$           per
share, or
$           million
and
$           million
in the aggregate, on the Class A common stock and
Class B common stock, respectively. In determining our
expected initial dividend levels, we reviewed and analyzed,
among other things, our operating and financial performance in
recent years, the anticipated cash requirements associated with
our new capital structure, our anticipated capital expenditure
requirements, our expected other cash needs, the terms of our
debt instruments, including Buffets' Senior Notes and the
Amended Credit Facility, other potential sources of liquidity,
including the
$           million
in cash on hand available for capital expenditures and various
other aspects of our business.
Minimum Covenant EBITDA
Our management has prepared the estimated
financial information set forth below to present the estimated
cash available to pay dividends based on estimated minimum
Covenant EBITDA that we believe will be needed in order to fund
dividends at the levels described above. The accompanying
estimated financial information was not prepared with a view
toward complying with the Public Company Accounting Oversight
Board guidelines with respect to prospective financial
information, but, in the view of our management, was prepared on
a reasonable basis, reflects the best currently available
estimates, judgments and beliefs, and presents, to the best of
management's knowledge and belief, our expected course of
action and our expected future financial performance. However,
this information is not fact and should not be relied upon as
being necessarily indicative of future results, and readers of
this prospectus are cautioned not to place undue reliance on the
estimated financial information.
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Neither our independent registered public
accounting firm, nor any other independent registered public
accounting firm, has compiled, examined, or performed any
procedures with respect to the estimated financial information
contained herein, nor have they expressed any opinion or any
other form of assurance on such information or its
achievability, and assume no responsibility for, and disclaim
any association with, the estimated financial information.
The assumptions and estimates underlying the
estimated financial information below are inherently uncertain
and, though considered reasonable by our management as of the
date of its preparation, are subject to a wide variety of
significant business, economic, and competitive risks and
uncertainties. See "Risk Factors." Accordingly, there
can be no assurance that the estimated financial information is
indicative of our future performance or that the actual results
will not differ materially from the estimated financial
information presented below.
We believe that, in order to fund dividends to
holders of our Class A common stock and Class B common
stock at the levels described above from cash generated by our
business, our minimum Covenant EBITDA for the year following
this offering would need to be at least
$           million.
As described under "— Assumptions and
Considerations" below, we believe that our minimum Covenant
EBITDA for the year following the closing of this offering will
be at least
$           million.
We have also determined that if our Covenant EBITDA for such
period were at or above this level, we would be permitted to pay
dividends at these levels under the restricted payment covenants
in the Amended Credit Facility (so long as the other conditions
contained therein and described below are met), the indenture
relating to Buffets' Senior Notes and the indenture
relating to our senior subordinated notes. The following table
sets forth our calculation that
$           million
of Covenant EBITDA would be sufficient to fund dividends at the
above levels and would satisfy such restricted payment covenants
(so long as the other conditions contained therein and described
below are met).
Estimated Cash Available to Pay Dividends Based
on Estimated Minimum Covenant EBITDA
Amount
(In thousands)
Estimated minimum Covenant EBITDA(1)
$
Less:
Estimated maintenance capital expenditures(2)
Estimated cash interest expense on senior
    subordinated notes(3)
Estimated cash interest expense on Amended Credit
    Facility(4)
Estimated cash interest expense on Buffets'
    Senior Notes(5)
Estimated cash income taxes(6)
Estimated cash available to pay dividends on our
    outstanding common stock(7)
$
Estimated consolidated coverage ratio derived
    from the above(8)
x
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The following table illustrates, for fiscal 2004,
the amount of excess cash that would have been available for
distributions to our stockholders, assuming, in each case, that
the offering had been consummated at the beginning of such
period, subject to the assumptions described in such table.
Fiscal Year
Ended June 30,
Pro Forma Excess Cash for the Fiscal Year Ended June 30, 2004
2004
(In thousands)
Cash flow provided by operating activities
$
50,490
Adjustments to reconcile cash flow provided by
    operating activities to Covenant EBITDA:
Amortization of debt issuance costs
(1,370
)
Write off of debt issuance costs
(4,201
)
Accretion of original issue discount
(2,049
)
Changes in assets and liabilities
7,565
Interest expense, net
39,185
Income tax expense, current provision
448
Adjustment for sale-leaseback transactions(9)
(416
)
Other charges(10)
1,667
Management fees(11)
1,884
Loss related to refinancing(12)
4,776
Financing-related compensation expenses(13)
2,240
Covenant EBITDA
100,219
Estimated cash interest expense on senior
    subordinated notes(3)
Estimated cash interest expense on Amended Credit
    Facility(4)
Estimated cash interest expense on Buffets'
    Senior Notes(5)
Capital expenditures(2)
Cash interest expense on revolving loan portion
    of Amended Credit Facility(4)
Additional public costs
Excess cash that would have been available to pay
    dividends
$
(1)
In comparing our estimated minimum Covenant
    EBITDA to our historical Covenant EBITDA, our historical
    Covenant EBITDA does not include approximately
    $           million
    in incremental ongoing expenses associated with being a public
    IDS issuer that are incremental to our existing expense as a
    public filer.
(2)
Our total capital expenditures were approximately
    $33.0 million for fiscal 2004 comprising $5.7 million
    in maintenance capital expenditures, $8.8 million in growth
    capital expenditures (for new store openings and relocations),
    $18.2 million in re-image capital expenditures associated
    with approximately 50 restaurants, and $0.3 million for
    corporate and systems capital expenditures. We will have
    approximately
    $           million
    in cash on hand available for capital expenditures and other
    aspects of our business. For a more detailed discussion of our
    capital expenditures, see "Management's Discussion and
    Analysis of Financial Condition and Results of
    Operations — Liquidity and Capital Resources."
(3)
Reflects our anticipated cash interest expense
    under our new capital structure. Accordingly, it
    assumes           %
    interest on
    $           million
    of senior subordinated notes represented by IDSs and
    $           million
    on the separate senior subordinated notes not represented by
    IDSs.
(4)
Reflects our anticipated cash interest expense
    under our new capital structure. Accordingly, it assumes
    interest at current rates, estimated
    as           %
    average interest on
    $           million
    of term loan borrowings under the Amended Credit
    Facility,           %
    interest on the undrawn portion of the
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$           million
    revolving credit facility,
    and           %
    interest on the letter of credit facility and synthetic letter
    of credit facility of
    $           million.
(5)
Reflects our anticipated cash interest expense
    under our new capital structure. Accordingly, it
    assumes           %
    interest on
    $           million
    of Buffets' Senior Notes.
(6)
Cash taxes are estimated to be
    $           million
    during the year following the closing of this offering, after
    giving effect to the Transactions and the deductible expenses.
(7)
The estimated dividends on our outstanding common
    stock is allocated between Class A and Class B common
    stock as follows:
Dividends
Number of
Shares
Per Share
Aggregate
(In thousands)
Estimated dividends on our outstanding
    Class A common stock
$
$
Estimated dividends on our outstanding
    Class B common stock
$
Estimated dividends on our outstanding common
    stock
$
(8)
Consolidated coverage ratio is calculated as
    Covenant EBITDA divided by consolidated interest expense. Under
    the indenture relating to our senior subordinated notes, we may
    not pay dividends on our capital stock if our consolidated
    coverage ratio is
    below            x.
(9)
Adjustments for sale-leaseback transactions
    reflects the impact of our sale-leaseback transactions, which
    have occurred in the period from January 4, 2001 through
    June 30, 2004, including an adjustment for minimum base
    rent as if the sale-leaseback transactions occurred at the
    beginning of the year. The adjustment also gives effect to the
    loss on sale-leaseback transactions and accretion of deferred
    gains on the sale-leaseback transactions.
(10)
Other charges include:
•
the addition of non-cash straight-line, deferred
    rent;
•
the exclusion of the non-cash effect of minority
    interest associated with our Tahoe Joe's subsidiary; and
•
the addition of non-cash compensation expense
    recognized for a cash appreciation incentive plan.
(11)
Management fees reflects the exclusion of expense
    recognized with respect to annual advisory fees paid to
    Caxton-Iseman Capital and Sentinel Capital Partners, L.L.C. as
    discussed in "Certain Relationships and Related
    Transactions."
(12)
Loss related to refinancing reflects transaction
    and other costs associated with our recapitalization on
    June 28, 2002 and our refinancings on February 20,
    2004 and May 18, 2004, as recorded in the consolidated
    statements of operations in the 2002 transitional period and
    fiscal 2004.
(13)
Financing-related compensation expense represents
    payments to holders of stock options and cash incentive plan
    units in conjunction with the issuance of our 13 7/8% Notes
    on May 18, 2004, as recorded in the consolidated statement
    of operations in fiscal 2004.
Assumptions and Considerations
Based on a review and analysis conducted by our
management, we believe that our minimum Covenant EBITDA for the
year following the closing will be at least
$                million,
and we have determined that the assumptions as to capital
expenditures and cash interest expense in the above tables are
reasonable. We considered numerous factors in making such
determination, including the following:
•
our Covenant EBITDA for fiscal 2004 was
    $100.2 million;
•
for fiscal 2003 and fiscal 2001, our Covenant
    EBITDA was $97.1 million and $115.9 million,
    respectively;
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•
our maintenance capital expenditures for fiscal
    2004, fiscal 2003 and fiscal 2001 were $5.7 million,
    $8.2 million and $10.3 million, respectively; and
•
for our 26-week transitional period ended
    July 3, 2002, our Covenant EBITDA and maintenance capital
    expenditures were $60.9 million and $5.2 million,
    respectively.
If our Covenant EBITDA for the first year were to
fall below the
$               million
level (or if our assumptions as to capital expenditures or
interest expense were too low), we would need to either reduce
or eliminate dividends or, to the extent we were permitted to do
so under the indenture relating to the senior subordinated
notes, the indenture relating to Buffets' Senior Notes and
the Amended Credit Facility, to fund a portion of our dividends
with borrowings or from other sources. If we were to use working
capital or permanent borrowings to fund dividends, we would have
less cash available for future dividends and other purposes,
which could negatively impact our financial condition, our
results of operations and our ability to maintain or expand our
business.
We cannot assure you that our Covenant EBITDA
will in fact equal or exceed the minimum level set forth above,
and our belief that it will equal or exceed such level is
subject to all of the risks, considerations and factors
identified in other sections of this registration statement,
including those identified in the section entitled "Risk
Factors."
As noted above, we have estimated our initial
dividend level and our minimum Covenant EBITDA only for the
twelve-month period following the closing. Moreover, there can
be no assurance that during or following such period we will pay
dividends at the levels estimated above, or at all. Dividend
payments are within the absolute discretion of our board of
directors and will be dependent upon many factors and future
developments that could differ materially from our current
expectations. Indeed, over time our capital and other cash needs
will invariably be subject to uncertainties which could impact
the level of any dividends we pay in the future. While interest
on the Amended Credit Facility will be variable (subject to an
interest rate cap), the revolving credit facility and the term
loan portion of the Amended Credit Facility will need to be
refinanced on or prior
to                     ,
2009
and                     ,
2011, respectively. We may not be able to renew or refinance the
Amended Credit Facility, or if renewed or refinanced, the
renewal or refinancing may occur on less favorable terms, which
may materially adversely affect our ability to pay dividends. In
particular, some of the terms of the senior subordinated notes
that may be viewed as favorable to the senior lenders, such as
our ability to defer interest and acceleration forbearance
periods, become less favorable in 2009, which may materially
adversely affect our ability to refinance or renew the Amended
Credit Facility beyond that date. If we are unable to refinance
or renew the Amended Credit Facility, our failure to repay all
amounts due on the maturity date would cause a default under the
Amended Credit Facility. In addition, our interest expense may
increase significantly if we refinance the Amended Credit
Facility on terms that are less favorable to us than the terms
of the Amended Credit Facility.
The senior subordinated notes will mature in 2019
and Buffets' Senior Notes will mature in 2014, and we may
not be able to refinance the senior subordinated notes or
Buffets' Senior Notes when they become due. If we are
unable to refinance either the senior subordinated notes or
Buffets' Senior Notes, our failure to repay all amounts due
on the maturity date would cause a default under the respective
indentures. Even if we were able to refinance the senior
subordinated notes and Buffets' Senior Notes, the
refinancing may occur on terms that are less favorable to us,
which would materially adversely affect our results of
operations and our ability to pay dividends.
In addition, to the extent we finance capital
expenditures with indebtedness, we will begin to incur
incremental debt service obligations. Our intended policy to
distribute rather than retain excess cash is based upon our
assessment of our financial performance, our cash needs and our
investment opportunities. If these factors were to change based
on, for example, competitive developments (which could increase
our need for capital expenditures), or new investment
opportunities, we would need to reassess that policy. Our board
is free to depart from or change our dividend policy at any time
and could do so, for example, if it were to determine that we
had insufficient cash to take advantage of growth opportunities.
Although management currently has no specific plans to increase
capital spending to materially expand our business,
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management will evaluate growth opportunities as
they arise and may pursue opportunities that it believes would
result in net increases to our cash available for distribution.
Restrictions on Payment of Dividends
Under state law, we can only pay dividends out of
"surplus" (which is defined as total assets at fair
market value minus total liabilities, minus statutory capital)
or out of current or the immediately preceding year's
earnings. We do not anticipate that we will have and in prior
years would not have had sufficient earnings to pay dividends at
the levels described above and therefore expect that we will pay
dividends out of surplus. Although we believe we will have
sufficient surplus to pay dividends at the anticipated levels
during the first year following this offering, our board will
seek periodically to assure itself of this before actually
declaring any dividends.
Under the indenture, dividends are restricted as
follows:
•
we may use all of our excess cash accumulated
    after that date plus certain incremental funds, but we may not
    in general pay dividends in excess of such amounts. We define
    "excess cash" as EBITDA (as defined in the indenture)
    minus cash interest expense, deferred interest, restructuring
    expenses settled in cash (excluding charges funded with proceeds
    from this offering), cash income taxes, maintenance capital
    expenditures, growth capital expenditures (unless funded by
    debt) and repayments of our indebtedness, plus the net cash
    proceeds from any sale of Tahoe Joe's, Inc.;
•
we may only pay dividends if our consolidated
    coverage ratio for the most recently ended four consecutive
    fiscal quarters for which internal financial statements are
    available is equal to or greater
    than                     to
    1.00;
•
we may not pay any dividends while interest on
    the senior subordinated notes is being deferred or, after the
    end of any interest deferral period, so long as any deferred
    interest, including interest accrued on deferred interest, has
    not been paid in full; and
•
we may not pay any dividends if a default or an
    event of default under the indenture governing the senior
    subordinated notes has occurred and is continuing.
The Amended Credit Facility and the indenture
relating to Buffets' Senior Notes will contain similar
provisions restricting our ability to make dividend payments.
The Amended Credit Facility will limit the amount
of voluntary distributions by Buffets to our available cash plus
the initial adjustment amount. In addition, the Amended Credit
Facility will provide that Buffets may not make distributions to
enable us to pay dividends if and for so long as (a) a
default or an event of default under the Amended Credit Facility
has occurred and is continuing, (b) Buffets Holdings has
any deferred and unpaid interest outstanding on the senior
subordinated notes, or (c) Buffets Holdings does not meet a
minimum consolidated coverage ratio.
Dividend History
During the 2002 transitional period, fiscal 2003
and fiscal 2004, Buffets Holdings made cash distributions to its
equity owners approximately $147.8 million,
$0.4 million and $88.3 million, respectively. These
distributions were financed with indebtedness. We have no
history of paying dividends out of our cash flow.
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CAPITALIZATION
The following table sets forth our cash and cash
equivalents and capitalization as of June 30, 2004, on an
actual basis and on a pro forma basis after giving effect to the
Transactions. The information should be read in conjunction with
"Prospectus Summary — The Transactions,"
"Use of Proceeds," "Unaudited Pro Forma Condensed
Combined Financial Data," "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," and the unaudited historical condensed
combined financial statements and the accompanying notes thereto
appearing elsewhere in this prospectus.
At June 30, 2004
Pro Forma for the
Actual
Transactions
(In thousands)
Cash and cash equivalents
$
26,072
$
Restricted cash and cash equivalents
16,228
$
42,300
$
Indebtedness:
Buffets and its subsidiaries:
Existing Credit Facility:
Revolving credit facilities
—
Term loan facilities
228,850
Amended Credit Facility:
Revolving credit facilities
—
Term loan facilities
—
Buffets'   % Senior Notes
—
11 1/4% senior subordinated notes due
    2010(1)
193,189
Total indebtedness of Buffets
$
422,039
$
Buffets Holdings:
Senior subordinated notes offered hereby
$
—
$
13 7/8% senior discount notes due
    2010(2)
76,300
IDS Notes
—
Total indebtedness of Buffets Holdings
76,300
Total indebtedness
$
498,339
$
Class B common stock being issued
    concurrently herewith
—
Shareholders' deficit:
Common stock ($.01 par value,
    3,600,000 shares authorized; 3,185,672 shares issued
    and outstanding)
$
32
$
Class A common stock being offered hereby
—
Class B common stock being issued
    concurrently herewith
—
Additional paid in capital
—
Accumulated deficit
$
(75,948
)
$
Total shareholders' deficit
$
(75,916
)
$
Total capitalization
$
422,423
$
(1)
We have assumed that all of Buffets'
    11 1/4% Notes will be repurchased at a cash price
    of      % of aggregate principal amount.
(2)
We have assumed that all of our
    13 7/8% Notes will be repurchased or redeemed at a
    cash price of      % of accreted value.
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Table of Contents
DILUTION
Dilution is the amount by which the portion of
the price paid by the purchasers of the IDSs in the offering
that is allocated to our shares of Class A common stock
exceeds the net tangible book value or deficiency per share of
our Class A common stock after the offering. Net tangible
book value or deficiency per share of our Class A common
stock is determined at any date by subtracting our total
liabilities from our total assets less our intangible assets and
dividing the difference by the number of shares of common stock
deemed to be outstanding at that date.
For purposes of calculating dilution below, we
have assumed that as of June 30, 2004 all of the
Class B common stock to be issued to our existing
stockholders has been converted into IDSs.
Our net tangible book deficiency as of
June 30, 2004 was approximately
$                     million,
or
$           per
share of Class A common stock. After giving effect to this
offering and the other Transactions, including the use of
proceeds as described in this prospectus, and assuming that all
of Buffets' 11 1/4% Notes are repurchased and our
13 7/8% Notes are repurchased or redeemed in the
tender offers, our pro forma net tangible book deficiency as of
June 30, 2004 would have been approximately
$                     million,
or
$           per
share of common stock. This represents an immediate increase in
net tangible book value of
$           per
share of our Class B common stock to our existing
stockholders and an immediate dilution of
$           per
share of our Class A common stock to new investors
purchasing Class A common stock represented by the IDSs in
this offering.
The following table illustrates this substantial
and immediate dilution to new investors:
Per Share of Class A
Per Share of Class A
Common Stock
Common Stock
Assuming No
Assuming Full
Exercise of the
Exercise of the
Underwriters' Over-
Underwriters' Over-
Allotment Option
Allotment Option
Portion of the assumed initial offering price of
    $      per IDS allocated to one
    share of Class A common stock
Net tangible book value (deficiency) per
    share as of June 30, 2004 (actual)
Increase per share attributable to cash payments
    made by investors in this offering
Net tangible book value (deficiency) as
    adjusted for this offering and after giving effect to the other
    Transactions
Dilution in net book value per share to new
    investors
The following table sets forth on a pro forma
basis as of June 30, 2004, assuming no exercise of the
underwriters' over-allotment option:
•
the total number of shares of our Class A
    common stock represented by IDSs to be owned by our existing
    stockholders following the consummation of this offering and the
    other Transactions (assuming all Class B common stock to be
    issued to our existing stockholders is converted into IDSs);
•
the total consideration paid by our existing
    stockholders and the total consideration to be paid by the new
    investors in this offering; and
•
the average price per share of common stock paid
    by our existing stockholders (cash and stock) and to be paid by
    new investors purchasing Class A common stock in this
    offering:
Shares of Common Stock
Average Price
Purchased
Net Consideration
Per Share of
Common
Number
Percent
Number
Percent
Stock
Existing stockholders
%
%
$
New investors
Total
%
%
$
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UNAUDITED PRO FORMA CONDENSED FINANCIAL
DATA
The following tables present our unaudited pro
forma condensed consolidated financial information as of and for
fiscal 2004.
The unaudited pro forma financial information
gives effect to the following transactions:
•
entering into the Amended Credit Facility to
    provide for a
    $           million
    term loan, a
    $           million
    revolving credit facility (which includes a
    $           million
    letter of credit sub-facility), a
    $           million
    letter of credit facility and a
    $           million
    synthetic letter of credit facility;
•
the offering of the IDSs, the senior subordinated
    notes offered separately from the IDSs and the Class B
    common stock;
•
the offering of Buffets' Senior Notes; and
•
the application of our cash on hand, the proceeds
    from the offering, the proceeds from Buffets' offering of
    its Senior Notes and the borrowings under the Amended Credit
    Facility to use cash on hand to pre-fund our capital
    expenditures program, repay indebtedness under the Existing
    Credit Facility, repurchase Buffets' 11 1/4% Notes,
    repurchase or redeem our 13 7/8% Notes, pay early
    redemption or premium costs and payment of interest, repurchase
    existing common stock, warrants and options from our existing
    stockholders and pay transaction fees and expenses.
The unaudited pro forma balance sheet data as of
June 30, 2004 give effect to the above transactions as if
they had occurred on June 30, 2004. The unaudited pro forma
condensed consolidated statement of operations for fiscal 2004
give effect to the above transactions as if they had occurred on
July 3, 2003.
Preparation of the pro forma financial
information was based on assumptions deemed appropriate by our
management. The pro forma information is unaudited and is not
necessarily indicative of the results which actually would have
occurred if the above transactions had been consummated at the
beginning of the period presented, nor does it purport to
represent the future financial position and results of
operations for future periods. The unaudited pro forma financial
information should be read in conjunction with "Use of
Proceeds," "Capitalization," "Selected
Historical Consolidated Financial Data,"
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" and our historical
consolidated financial statements and the related notes included
elsewhere in this prospectus.
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Table of Contents
UNAUDITED PRO FORMA CONDENSED BALANCE
SHEET
As of June 30, 2004
Pro Forma
Adjustments
for the
Actual
Transactions
Pro Forma
(Dollars in thousands)
ASSETS
Current assets:
Cash and cash equivalents
$
26,072
$
$
Restricted cash and cash equivalents
16,228
Receivables
6,963
Inventories
18,673
Other current assets
5,244
Deferred income taxes
15,915
Total current assets
89,095
Property and equipment, net
149,618
Goodwill, net
312,163
Deferred income taxes
1,033
Other assets, net
15,622
Total Assets
$
567,531
$
$
LIABILITIES AND SHAREHOLDERS'
    DEFICIT
Current liabilities:
Accounts payable
$
43,280
$
$
Other accrued liabilities
73,194
Current maturities of long-term debt
2,300
Total current liabilities
$
118,774
$
$
Long-term debt:
Revolving credit facilities
—
Buffets' 11 1/4% Notes
193,189
Buffets Holdings' 13 7/8% Notes
76,300
Term loan facility, non-current maturities
226,550
IDS notes
—
Buffets'      %
    Senior Notes
—
Senior subordinated notes
—
Other long-term obligations
28,634
Total liabilities
$
643,447
$
$
Allocated portion of retained interest
—
Shareholders' deficit:
Common stock
32
Additional paid-in capital
—
Accumulated deficit
(75,948
)
Shareholders' deficit
(75,916
)
Total liabilities and shareholders' deficit
$
567,531
$
$
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BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
Fiscal Year Ended June 30, 2004
Pro Forma
Adjustments
for the
Actual
Transactions
Pro Forma
(Dollars in thousands)
Restaurant sales
$
942,831
$
$
Restaurant costs
812,662
Advertising expenses
25,854
General and administrative expenses
42,722
Impairment of assets
1,878
Financing-related compensation expenses
2,240
Operating income
57,475
Interest expense
39,609
Interest income
(424
)
Loss related to refinancing
4,776
Loss related to early extinguishment of debt
5,275
Other (income)
(1,379
)
Income (loss) before income taxes
9,618
Income tax expense (benefit)
1,648
Net income (loss)
$
7,970
$
$
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SELECTED HISTORICAL CONSOLIDATED FINANCIAL
DATA
The table below provides a summary of historical
consolidated financial and other data for the:
•
fiscal year ended December 29, 1999,
•
period from December 30, 1999 through
    October 1, 2000,
•
period from October 2, 2000 through
    January 3, 2001,
•
fiscal year ended January 2, 2002,
•
26-week transitional period ended July 3,
    2002,
•
fiscal year ended July 2, 2003, and
•
fiscal year ended June 30, 2004.
The summary operating data for fiscal 1999, the
period from December 30, 1999 through October 1, 2000,
the period from October 2, 2000 through January 3,
2001, fiscal 2001, the 2002 transitional period and fiscal 2003
are derived from our audited financial statements. Our audited
financial statements and related notes for fiscal 2001, the 2002
transitional period and fiscal 2003 are contained elsewhere in
this prospectus. All fiscal years presented below other than the
2002 transitional period represent 52 week periods.
The information presented below should be read in
conjunction with "Use of Proceeds,"
"Capitalization," "Unaudited Pro Forma Condensed
Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations"
and the consolidated financial statements and notes thereto
included elsewhere in this prospectus.
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Table of Contents
Successor
Predecessor(1)
26-Week
Period From
Period From
Transitional
Fiscal
Fiscal
Fiscal Year
December 30,
October 2,
Fiscal Year
Period
Year
Year
Ended
1999 through
2000 through
Ended
Ended
Ended
Ended
December 29,
October 1,
January 3,
January 2,
July 3,
July 2,
June 30,
1999
2000
2001
2002
2002
2003
2004
(Dollars in thousands)
Operating Data:
Restaurant sales
$
936,854
$
781,153
$
239,370
$
1,044,734
$
527,084
$
985,286
$
942,831
Restaurant costs
800,255
656,843
204,379
886,069
444,917
850,840
812,662
Advertising expenses
22,491
21,888
5,726
27,640
14,349
28,589
25,854
General and administrative expenses
47,857
39,217
12,204
50,569
25,687
45,382
42,722
Goodwill amortization
637
878
2,543
10,942
—
—
—
Impairment of assets
1,966
—
—
—
—
4,803
1,878
Gain on sale of Original Roadhouse Grill
    restaurants
—
—
—
—
—
(7,088
)
—
Loss on sale-leaseback transactions
—
—
—
—
—
5,856
—
Acquisition-related costs
—
14,902
—
—
—
—
—
Financing-related compensation expense
—
—
—
—
—
—
2,240
Operating income
63,648
47,425
14,518
69,514
42,131
56,904
57,475
Interest expense
3,014
1,970
13,078
43,405
15,088
41,235
39,609
Interest income
(4,929
)
(4,638
)
(267
)
(698
)
(212
)
(307
)
(424
)
Loss related to refinancing
—
—
—
—
38,724
—
4,776
Loss related to early extinguishment of debt
—
—
—
—
—
—
5,275
Other (income)
(1,679
)
(1,126
)
(340
)
(1,040
)
(598
)
(1,270
)
(1,379
)
Income (loss) before income tax expense (benefit)
67,242
51,219
2,047
27,847
(10,871
)
17,246
9,618
Income tax expense (benefit)
24,800
19,974
1,468
15,292
(3,354
)
5,319
1,648
Net income (loss)
$
42,442
$
31,245
$
579
$
12,555
$
(7,517
)
$
11,927
$
7,970
Cash Flow and Other Financial Data:
Total capital expenditures(2)
74,230
35,596
14,389
38,096
14,280
25,722
33,007
Depreciation and amortization
43,026
32,368
11,311
53,404
20,409
36,885
33,807
Cash flow provided by operating activities
90,561
87,822
25,401
68,835
39,250
57,656
50,490
Cash flow provided by (used in) investing
    activities
(74,230
)
(37,013
)
4,540
2,575
(11,337
)
26,662
(28,383
)
Cash flow provided by (used in) financing
    activities
(38,129
)
1,534
(138,751
)
(59,590
)
(47,164
)
(76,825
)
(11,890
)
Ratio of earnings to fixed charges(3)
33.8
x
91.1
x
1.1
x
1.6
x
—
1.4
x
1.2
x
Pro Forma ratio of earnings to fixed charges(3)(4)
x
Balance Sheet Data (at end of
    period):
Cash and cash equivalents(5)
$
72,260
$
124,603
$
15,793
$
27,613
$
8,362
$
15,855
$
26,072
Total assets
477,635
530,846
683,866
637,701
615,672
552,986
567,531
Total debt(6)
42,151
41,133
405,074
348,220
493,981
421,122
498,339
Total shareholders' equity (deficit)
306,383
346,412
135,993
148,677
(34,611
)
(22,810
)
(75,916
)
(1)
On October 2, 2000, Buffets Holdings, Inc.
    acquired Buffets, Inc. in a management-led buyout from public
    shareholders. Due to the effects of this transaction on the
    recorded bases of goodwill, intangibles, property and
    shareholders' equity, our financial statements prior to and
    subsequent to this transaction are not comparable. Periods prior
    to October 2, 2000 represent the accounts of the
    predecessor. Accordingly, the historical financial information
    for fiscal 2000 is presented in two periods — the
    period from December 30, 1999 to October 1, 2000 and
    the period from October 2, 2000 to January 3, 2001.
(2)
Total capital expenditures include restaurant
    facilities acquired through business combinations in fiscal 1999.
(3)
"Fixed charges" is the sum of our
    interest expense, less interest income, less OID amortization,
    less debt issuance cost amortization, plus capitalized interest,
    plus amortized premiums, discounts and capitalized expenses
    related to indebtedness, plus interest in rental expense.
    "Earnings" is the sum of
54
Table of Contents
our pre-tax income before minority interest, plus
    fixed charges, plus amortization of capitalized interest, less
    capitalized interest, less minority interest in pre-tax income
    of subsidiaries that had not incurred fixed charges. Earnings
    were insufficient to cover fixed charges in the 26-week
    transitional period ended July 3, 2002. The deficiency was
    $11.2 million for that period.
(4)
Pro Forma ratio of earnings to fixed charges for
    fiscal 2003 and fiscal 2004 gives effect to the Prior
    Refinancing Transactions and the Transactions as if they had
    occurred at the beginning of the period presented.
(5)
In addition to cash and cash equivalents, we had
    $16.2 million of restricted cash as of June 30, 2004.
(6)
Total debt represents the amount of our long-term
    debt and capital lease obligations, including current maturities.
55
Table of Contents
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
You should read the following discussion in
conjunction with "Selected Historical Consolidated
Financial Data" and our consolidated financial statements
and related notes included elsewhere in this prospectus. Some of
the statements in the following discussion are forward-looking
statements. See "Forward-Looking
Statements."
Overview
We are the twentieth largest restaurant operator
in the United States and the largest operator of company-owned
stores in the buffet/grill sector (through Buffets and its
subsidiaries), as measured in both sales and number of
restaurants. We accounted for approximately 32% of total sales
in this estimated $3.0 billion sector. Our restaurants are
principally operated under the names Old Country Buffet and
HomeTown Buffet. As of June 30, 2004, we had
360 company-owned restaurants and 20 franchised locations
in 38 states.
Buffets was founded in 1983 to develop
buffet-style restaurants under the name Old Country Buffet. In
October 1985, Buffets completed its initial public offering and
was listed on The NASDAQ National Market. In September 1996,
Buffets merged with HomeTown Buffet, Inc., which was developed
by one of Buffets' co-founders and had
80 company-owned HomeTown Buffet restaurants in
11 states and 19 franchised restaurants in eight states. In
October 2000, Buffets was acquired by Buffets Holdings, a
company organized by Caxton-Iseman Capital, Inc., in a buyout
from public shareholders.
Our financial results are significantly impacted
by changes in sales at our company-owned restaurants. Changes in
sales are largely driven by changes in average weekly guest
counts and average guest check. We monitor average weekly guest
counts very closely, as they directly impact our revenues and
profits, and focus substantial efforts on growing these numbers
on a same-store basis. Same-store average weekly sales and guest
counts are affected by our ability to consistently deliver a
high-quality, value-priced selection of home-style cooked meals
in a clean and pleasant self-service buffet format, the success
of our marketing promotions and other business strategies.
Our business model is characterized by a
relatively fixed cost structure, particularly in the short term.
Accordingly, changes in marginal average weekly sales volume can
have a more significant impact on our profitability than for a
business possessing a more variable cost structure. Over a
longer time horizon, by virtue of our diversified food
offerings, we are able to address the semi-fixed element of food
cost by modifying our offerings or by highlighting other foods
on the menu in order to reduce consumption on the higher cost
items. In addition, we monitor our labor costs and hourly
employee productivity, as measured by the number of guests
served per labor hour, on a weekly basis to ensure that
restaurants are responsive in scheduling and managing our labor
to varying levels of guest traffic.
We devote significant resources and attention to
our marketing efforts which is evident in the level of our
advertising expenditures over the past five years. In the past
year, we adopted a more stringent, return on investment based
approach to advertising placement which has resulted in more
efficient and effective returns on our marketing investments.
Since we acquired Buffets in a buyout from its
public shareholders in October 2000, we have focused on
improving asset management and optimizing our capital structure.
As a result, we have had net closures of 44 restaurants in less
attractive locations either through early termination, or
non-renewal at lease end, since October 2000. We expect the
number of closures to abate in 2005, and reach an equilibrium
point at which new openings and select relocations will
approximate the number of restaurants which we close because
they do not meet our profitability goals.
Our fiscal year comprises 52 or 53 weeks
divided into four fiscal quarters of 12, 12, 16 and 12 or
13 weeks. Beginning with the transitional period ended
July 3, 2002, we changed our fiscal year so that it ends on
the Wednesday nearest June 30 of each year. The fiscal year
2002 transition period consisted of 26 weeks and was
divided into two periods of 16 and 10 weeks. Prior to that,
our fiscal year ended on the
56
Table of Contents
Wednesday nearest December 31 of each year
and each fiscal year was divided into periods of 16, 12, 12
and 12 or 13 weeks.
The following is a description of the line items
from our consolidated statements of operations:
•
We recognize as restaurant sales the proceeds
    from the sale of food and beverages at our company-owned
    restaurants at the time of such sale. We recognize the proceeds
    from the sale of gift certificates/cards when the gift
    certificates/cards are redeemed at our restaurants. Until
    redemption, the unearned revenue from the sale of gift
    certificates/cards is included in accrued liabilities on our
    consolidated balance sheets. Our franchise income includes
    royalty fees and initial franchise fees received from our
    franchisees. We recognize royalty fees as other income based on
    the sales reported at the franchise restaurants.
•
Restaurant costs reflect only direct restaurant
    operating costs, including food, labor and direct and occupancy
    costs. Labor costs include compensation and benefits for both
    hourly and restaurant management employees. Direct and occupancy
    costs consist primarily of costs of supplies, maintenance,
    utilities, rent, real estate taxes, insurance, depreciation and
    amortization.
•
Advertising expenses reflect all advertising and
    promotional costs.
•
General and administrative expenses reflect all
    costs, other than advertising expenses, not directly related to
    the operation of restaurants. These expenses consist primarily
    of corporate administrative compensation and overhead, district
    and regional management compensation and related management
    expenses and the costs of recruiting, training and supervising
    restaurant management personnel.
•
Goodwill amortization reflects the amortization
    of the excess of cost over fair market value of assets and was
    recognized on a straight line basis over a 30-year life through
    January 2, 2002. Effective January 3, 2002, we changed
    our method of accounting for goodwill in accordance with
    Statement of Financial Accounting Standards No. 142,
    "Goodwill and Other Intangible Assets."
•
Impairment of assets reflects fair market
    adjustments to the carrying value of long-lived assets,
    primarily comprised of leasehold improvements and equipment.
•
Gain on sale of Original Roadhouse Grill
    restaurants reflects the net proceeds from the sale of 13
    Original Roadhouse Grill restaurants net of the related carrying
    value of these restaurants.
•
Loss on sale-leaseback transactions reflects
    transaction costs and impairment losses associated with the sale
    and leaseback of the leasehold interests and leasehold
    improvements.
•
Financing-related compensation expenses reflect
    payments to holders of stock options and cash incentive plan
    units in conjunction with the issuance of our
    13 7/8% Notes in May 2004.
•
Interest expense reflects interest costs
    associated with our debt, amortization of debt issuance cost and
    accretion of original issuance discount on our subordinated
    notes and bonds.
•
Interest income reflects interest earned on our
    short-term investments.
•
Loss related to refinancing reflects transaction
    and other costs associated with our recapitalization on
    June 28, 2002 and refinancing on February 20, 2004.
•
Loss related to the early extinguishment of debt
    reflects the costs associated with redeeming a portion of
    Buffets' 11 1/4% Notes prior to their maturity during
    fiscal 2004.
•
Other income primarily reflects franchise fees
    earned, less minority interest associated with our Tahoe
    Joe's subsidiary. During August 2003, we exercised our call
    option to acquire the remaining 20% interest in Tahoe
    Joe's, Inc. from the minority holder.
•
Income tax expense (benefit) reflects the current
    and deferred tax provision (benefit) determined in accordance
    with the provisions of Statement of Financial Accounting
    Standards (SFAS) No. 109, "Accounting for Income
    Taxes."
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Critical Accounting Policies
Our consolidated financial statements have been
prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of our
financial consolidated statements requires management to make
estimates and assumptions that affect the reported amount of
assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. On an ongoing basis, management evaluates its estimates
and assumptions, including those related to recoverability of
long-lived assets, revenue recognition and goodwill. Management
bases its estimates and assumptions on historical experience and
on various other factors that are believed to be reasonable at
the time the estimates and assumptions are made. Actual results
may differ from these estimates and assumptions under different
circumstances or conditions.
We believe the following critical accounting
policies affect management's significant estimates and
assumptions used in the preparation of our consolidated
financial statements.
Accounting Treatment for IDSs and Class B
Common Stock.
Our IDS units include
Class A common stock, senior subordinated notes and
embedded derivative features that may require bifurcation under
FASB 133. The embedded derivative features in the senior
subordinated notes include call options and a change of control
put option. Upon completion of this offering, proceeds from the
issuance of the IDSs will be allocated, based upon relative fair
value, to Class A common stock and the senior subordinated
notes. If it is determined at the time of issuance (or any
subsequent issuances) that any of the embedded derivatives are
required to be bifurcated from the senior subordinated notes and
separately accounted for, a portion of the proceeds from the
original issuance will also be allocated to these derivatives
equal to the combined fair value of the embedded derivatives
that require bifurcation. If a portion of the initial proceeds
is allocated to any of the derivatives, the senior subordinated
notes will initially be recorded at a discount or premium and
accreted or amortized to their redemption value as a component
of interest expense using the effective interest method. Any
such allocation will not affect the tax treatment of the IDSs.
The Class A common stock portion of the IDS
unit will be included in stockholders' equity, net of
related transaction costs, and dividends paid on the
Class A common stock will be recorded as a reduction to
retained earnings when declared by us and will not be deductible
for tax purposes. The senior subordinated note portion of the
IDS unit will be included in long-term debt, and the related
transaction costs will be capitalized as deferred financing
costs and amortized to interest expense using the effective
interest method. Interest on the senior subordinated notes will
be charged to expense as accrued by us. The bifurcated
derivatives, if any, will be recorded as an asset or liability
and will be marked to market with changes in fair value being
recorded in earnings. We intend to determine the fair value of
the Class A common stock, the senior subordinated notes and
embedded derivatives, if any, through the utilization of a third
party valuation firm and the sale as part of this offering of
the separate senior subordinated notes with the same terms as
the senior subordinated notes represented by IDSs.
Immediately following the closing of this
offering, our existing stockholders will hold shares of
Class B common stock. Under the investor rights agreement
and subject to certain conditions and restrictions, these shares
may be exchanged for IDSs after the closing date of this
offering. For each of the four full quarterly dividend payment
periods following the closing of this offering, dividends on the
Class B common stock will
be       times dividends on the
Class A common stock, which will cause the initial yield on
the Class B common stock to approximate the initial yield
on the IDSs for which each share of Class B common stock
ultimately may be exchanged.
Following the closing of this offering, at the
option of the holder subject to specified conditions and
restrictions, Class B common stock may be exchanged for
IDSs (as may be adjusted for stock splits or stock dividends).
Accordingly, at the date of issuance, a portion of the
Class B common stock will be classified as temporary equity
in the amount equal to the present value of the senior
subordinated note par amount that the holder will be entitled to
receive upon the earliest possible date of exchange, using a
discount rate equal to the interest rate on the senior
subordinated notes. The difference between the
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Table of Contents
amount recorded as temporary equity and the
amount the holder will receive upon exchange will be accreted as
a dividend in equity and will be treated as a reduction to
income available for common stockholders. Any such allocation is
not expected to affect the tax treatment of the IDSs.
The Class B stockholders' right to
exchange Class B common stock for a fixed number of IDSs is
an embedded derivative financial instrument which will require
bifurcation under SFAS No. 133. We will recognize this
derivative financial instrument as a liability at fair value
with the offsetting amount as a distribution to our existing
stockholders at closing. The derivative will be adjusted to its
current fair value at each subsequent balance sheet date, with
the change in fair value recorded through earnings for so long
as the exchange rights are outstanding.
Basic earnings per share is calculated based on
the respective rights of the outstanding Class A and
Class B common stock to participate in distributions,
consistent with their respective relative dividend rights. The
Class B common stock is expected to participate in
distributions, without preference, at a rate
of       times the dividend paid
on the Class A common stock during the first four full
quarterly dividend payment periods following the closing of this
offering. Diluted earning per share will reflect the
Class B common stock on an as-converted basis. To the
extent that holders exercise their exchange right, the senior
subordinated notes will be recorded at an amount equal to the
fair value of the senior subordinated notes at the time of
exchange, the derivative liability (conversion option) and the
amount in temporary equity will be derecognized, and any
difference will be recorded in equity. Subsequent to an
exchange, interest payments on the senior subordinated notes and
any accretion of discount or amortization of premium on the
senior subordinated notes will be recorded as interest expense.
Income Taxes.
We
intend to account for our issuance of the IDSs in this offering
as representing shares of Class A common stock and senior
subordinated notes by allocating the proceeds for each IDS unit
to the underlying Class A common stock or senior
subordinated note based upon the relative fair values of each.
Accordingly, we will account for the portion of the aggregate
IDSs outstanding that represents senior subordinated notes as
long term debt bearing a stated interest rate
of      % maturing
on                     ,
2019. We have concluded that it is appropriate and we intend to
annually deduct interest expense of approximately
$            million
on the senior subordinated notes from taxable income for
U.S. federal and state income tax purposes. There can be no
assurances that the Internal Revenue Service will not seek to
challenge the treatment of these senior subordinated notes as
debt or the amount of interest expense deducted, although to
date we have not been notified that the senior subordinated
notes should be treated as equity rather than debt for
U.S. federal and state income tax purposes. If the senior
subordinated notes were required to be treated as equity for
income tax purposes, the cumulative interest expense associated
with the senior subordinated notes would not be deductible from
taxable income, and we would be required to recognize additional
tax expense and establish a related income tax liability. In
addition, to the extent any portion of the interest expense is
determined not to be deductible, we would be required to
recognize additional tax expense and establish a related income
tax liability. The additional tax due to the federal and state
authorities would be based on our taxable income or loss for
each of the years that we take the interest expense deduction.
We do not currently intend to record a liability for a potential
disallowance of this interest expense deduction. In addition,
non-U.S. holders could be subject to withholding taxes on
the payment of interest, which would be taxed as dividends, and
we could be subject to additional liability for the withholding
taxes that we do not intend to collect on such payments.
For more discussion of our (and our
counsel's) conclusion that the senior subordinated notes
should be treated as indebtedness for U.S. federal income tax
purposes, see "Material U.S. Federal Income Tax
Consequences."
Recoverability
of Long Lived Assets
We periodically evaluate long lived assets and
goodwill related to those assets for impairment whenever events
or changes in circumstances indicate the carrying value amount
of an asset or group of assets may not be recoverable. We
consider a history of operating losses and the other factors
described to be our primary indicator of potential impairment.
Assets are grouped and evaluated for impairment at the
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Table of Contents
lowest level for which there are identifiable
cash flows, namely individual restaurants. A restaurant is
deemed to be impaired if a forecast of undiscounted future
operating cash flows directly related to the restaurant,
including disposal value, if any, is less than its carrying
amount. If a restaurant is determined to be impaired, the loss
is measured as the amount by which the carrying amount of the
restaurant exceeds its fair value. Fair value is based on quoted
market prices in active markets, if available. If quoted market
prices are not available, an estimate of fair value is based on
the best information available, including prices for similar
assets or the results of valuation techniques such as discounted
estimated future cash flows as if the decision to continue to
use the impaired restaurant was a new investment decision. We
generally measure fair value by discounting estimated future
cash flows. Considerable management judgment is necessary to
estimate discounted future cash flows. Accordingly, actual
results could vary significantly from such estimates. We had no
impairment write-downs for the fiscal year ended January 2,
2002. During the 26 week transitional period ended
July 3, 2002, we expensed approximately $1.1 million
relating to the impairment of long-lived assets associated with
12 restaurants. During fiscal 2003, we expensed approximately
$5.6 million relating to the impairment of long-lived
assets of 39 restaurants. This amount was partially offset by an
approximate $0.8 million reduction in lease obligation
accrual assumptions in accrued store closing costs, based on our
receiving greater than planned sublease and other cash receipts.
In addition, we recognized approximately $5.9 million in
impairments relating to 18 of the 30 restaurants for which we
completed sale-leaseback transactions during 2003. During fiscal
2004, we expensed approximately $1.9 million relating to
the impairment of long-lived assets for 17 restaurants.
Results of Operations
The following discussion reflects our
historical results for the fiscal year ended January 2,
2002, the 28 week period ended July 18, 2001, the
26-week transitional period ended July 3, 2002, the 50-week
period ended July 3, 2002, and the fiscal years ended
July 2, 2003 and June 30, 2004.
Our future results may not be consistent with
our historical results. Our 2002 transitional period results
included a loss relating to our refinancing which was completed
in June 2002. Our fiscal 2003 results included the operating
results for 13 Original Roadhouse Grill restaurants that were
sold in June 2003, as well as the impact of sale and leaseback
transactions with respect to 30 restaurants completed during the
year. Our fiscal 2004 results included the impact of a sale and
leaseback transaction with respect to one restaurant completed
in December 2003, a loss related to a refinancing that we
postponed due to market conditions and the amendment and
restatement of our existing senior credit agreement in February
2004, the issuance of our 13 7/8% Notes in May 2004
and the early extinguishment of approximately $29.6 million
of 11 1/4% senior subordinated notes due 2010. Most
notably, the discussion that follows does not give effect to the
Prior Refinancing Transactions or the Transactions. The
following discussion should be read in conjunction with our
condensed consolidated financial statements and related notes
included elsewhere in this report.
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For the Year Ended June 30, 2004
    Compared to the Year Ended July 2, 2003
The following table sets forth our results of
operations based on the percentage relationship of the items
listed to our restaurant sales during the periods shown:
Year Ended
Year Ended
July 2, 2003
June 30, 2004
(Dollars in thousands)
Restaurant sales
$
985,286
100.0
%
$
942,831
100.0
%
Restaurant costs
850,840
86.4
812,662
86.2
Advertising expenses
28,589
2.9
25,854
2.7
General and administrative expenses
45,382
4.6
42,722
4.5
Impairment of assets
4,803
0.5
1,878
0.2
Gain on sale of Original Roadhouse Grill
    Restaurants
(7,088
)
(0.7
)
—
—
Loss on sale leaseback transactions
5,856
0.6
—
—
Financing-related compensation expenses
—
—
2,240
0.2
Operating income
56,904
5.8
57,475
6.1
Interest expense
41,235
4.2
39,609
4.2
Interest income
(307
)
—
(424
)
—
Loss related to refinancing
—
—
4,776
0.5
Loss related to early extinguishment of debt
—
—
5,275
0.6
Other (income)
(1,270
)
(0.1
)
(1,379
)
(0.1
)
Income before income taxes
17,246
1.8
9,618
1.0
Income tax expense
5,319
0.5
1,648
0.2
Net income
$
11,927
1.2
$
7,970
0.8
Certain percentage amounts do not sum to total
due to rounding.
Restaurant Sales.
Restaurant sales for the fiscal year ended June 30, 2004
decreased $42.5 million, or 4.3%, compared with the fiscal
year ended July 2, 2003. The decline in sales was primarily
attributable to the closure of 15 buffet restaurants and the
sale of 13 Original Roadhouse Grill restaurants, partially
offset by the opening of 3 units, over the past year.
Average weekly sales for fiscal 2004 were $49,949, or 2.0%
higher than the prior year. Same-store sales for fiscal 2004
increased by 1.3% compared to the prior year, reflecting a 1.6%
decline in guest traffic and a 2.9% increase in average check.
The increase in average check comprised approximately a 2.0%
price increase and a 0.9% average check increase due to a
reduction in free promotional and employee meals. We currently
expect same-store sales for the first quarter of fiscal 2005
(the 12-week period ending September 22, 2004) to decline
by approximately zero to two percent versus the comparable
period in fiscal 2004.
Restaurant Costs.
Restaurant costs for fiscal 2004 decreased by 0.2% as a
percentage of sales compared with the prior year. Food costs as
a percentage of sales increased 0.9% primarily due to our
expanded and enriched menu offerings. Labor costs as a
percentage of sales were 1.3% lower than those experienced in
the prior year, primarily due to a reduction in our restaurant
management staffing levels substantially effected during the
third quarter of fiscal 2003 and the improved productivity of
our hourly employees. Direct and occupancy costs as a percentage
of sales increased by 0.2% versus the prior year. This increase
was primarily attributable to an increase in rent expense
associated with the sale leaseback transactions. We currently
expect that restaurant costs will run approximately 0.4% higher
as a percentage of sales during the first quarter of fiscal
2005, as compared to those experienced in the most recently
completed fiscal year. This increase reflects commodity-pricing
pressure, particularly on chicken, which we expect to abate
appreciably by the end of calendar year 2004.
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Advertising
Expenses.
Advertising expenses
decreased 0.2% as a percentage of sales during fiscal 2004
versus the prior year. The decrease reflected a reduction in
advertising weights during fiscal 2004 to more historic levels.
Approximately 62% of our buffet restaurants received
television-advertising support during fiscal 2004 and fiscal
2003. We expect advertising expenses as a percentage of sales
during the first quarter of fiscal 2005 to remain approximately
flat as compared with those for fiscal year 2004.
General and Administrative
Expenses.
General and administrative
expenses as a percentage of sales decreased 0.1% during fiscal
2004 as compared to the prior fiscal year. This decrease was
largely due to a decrease in non-store employees largely
effected during the third quarter of fiscal 2003. We expect
general and administrative expenses during the first quarter of
fiscal 2005, measured as a percentage of sales, to remain
approximately flat as compared to those realized during fiscal
2004.
Impairment of
Assets.
During fiscal 2004, we
recognized approximately $1.9 million in fair market
adjustments to the carrying value of our long-lived assets for
17 restaurants. During fiscal 2003, we recorded approximately
$4.8 million of impairments to the long-lived assets for 27
restaurants.
Gain on Sale of Original Roadhouse Grill
Restaurants.
On June 5, 2003, we
sold 13 Original Roadhouse Grill restaurants for approximately
$28.4 million in net proceeds. The gain associated with the
sale of these restaurants approximated $7.1 million.
Loss on Sale and Leaseback
Transactions.
During fiscal 2003, we
entered into three sale-leaseback transactions whereby we
transferred our leasehold interests and leasehold improvements
with respect to 30 restaurants to a third party for net proceeds
of approximately $26.1 million. We simultaneously entered
into long-term leases for those restaurants with an aggregate
initial annual rent of approximately $3.7 million. In
connection with these sale-leaseback transactions, we recorded a
loss of approximately $5.9 million primarily to reflect the
impairment of certain of the properties for which the net
proceeds were less than the book value of the leasehold assets.
In addition, the net proceeds for certain of the properties were
greater than the book value of the leasehold assets resulting in
a deferred gain of approximately $3.6 million. The deferred
gain will be accreted over the life of the respective restaurant
leases, ranging from 17 to 25 years.
On December 19, 2003, we entered into a sale
and leaseback transaction by which we transferred our leasehold
interests and leasehold improvements with respect to one
restaurant to a third party for net proceeds of
$2.7 million. We simultaneously entered into a long-term
lease for that restaurant with an aggregate initial annual rent
of approximately $0.3 million. The net proceeds of this
sale and leaseback transaction exceeded the book value of the
leasehold assets resulting in a deferred gain of approximately
$0.3 million, which will be accreted over the 20-year life
of the lease.
Interest Expense.
Interest expense was flat as a percentage of sales during fiscal
2004 versus the prior year.
Loss Related to
Refinancing.
On February 20,
2004, Buffets entered into the Existing Credit Facility. In
connection with this bank refinancing, we wrote off
$4.2 million of debt issuance cost related to the
predecessor Credit Facility. In addition, we incurred
$0.6 million in transaction fees associated with a senior
discount note offering that we postponed due to market
conditions.
Loss Related to the Early Extinguishment of
Debt.
We repurchased approximately
$29.6 million of Buffets' 11 1/4% Notes at
an average price of 110.4%. We recognized the difference between
the premium purchase price and the discounted carrying value of
Buffets' 11 1/4% Notes, as well as an associated
write-off of debt issuance cost, as a loss related to the early
extinguishment of debt.
Income Taxes.
Income
taxes decreased 0.3% as a percentage of sales for fiscal 2004
compared to the prior year. The effective tax rate of 17.1% for
the current year compared with 30.8% for the prior year
reflected the impact of stable tax credits on pre-tax income
that was depressed by financing-related expenses, as well as a
more favorable than expected resolution to a state tax audit.
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For the Year Ended July 2, 2003
    Compared to the 50 Week Period Ended July 3,
    2002
The following table sets forth our results of
operations based on the percentage relationship of the items
listed to our restaurant sales during the periods shown:
50-Week Period Ended
Year Ended
July 3, 2002
July 2, 2003
(Dollars in thousands)
Restaurant sales
$
1,003,997
100.0
%
$
985,286
100.0
%
Restaurant costs
849,154
84.6
850,840
86.4
Advertising expenses
26,281
2.6
28,589
2.9
General and administrative expenses
49,556
4.9
45,382
4.6
Goodwill amortization
4,967
0.5
—
—
Impairment of assets
—
—
4,803
0.5
Gain on sale of Original Roadhouse Grill
—
—
(7,088
)
(0.7
)
Loss on sale and leaseback transactions
—
—
5,856
0.6
Operating income
74,039
7.4
56,904
5.8
Interest expense
33,606
3.3
41,235
4.2
Interest income
(586
)
(0.1
)
(307
)
—
Loss related to refinancing
38,724
3.9
—
—
Other (income)
(1,145
)
(0.1
)
(1,270
)
(0.1
)
Income before income taxes
3,440
0.3
17,246
1.8
Income tax expense
4,203
0.4
5,319
0.5
Net income (loss)
$
(763
)
(0.1
)
$
11,927
1.2
Certain percentage amounts do not sum to total
due to rounding.
Restaurant Sales.
Restaurant sales for the fiscal year ended July 2, 2003
decreased $18.7 million, or 1.9%, compared with the
50 weeks ended July 3, 2002. The decline was
principally attributable to a 2.0% reduction in average weekly
sales between the respective periods coupled with a net capacity
reduction of 291 operating weeks due to 14 unit closings
and the sale of 13 Original Roadhouse Grill units, partially
offset by 6 unit openings. Same-store sales for the 2003
fiscal year declined by 4.2%, reflecting a 1.5% increase in
pricing and a 5.7% decline in guest traffic. The decline in
sales is due in part to the general economic downturn, as well
as increased competition partially from the quick service
industry in the form of discounting.
Restaurant Costs.
Restaurant costs for 2003 increased by 1.8% as a percentage of
sales compared with the comparative prior year period primarily
due to expanded and enriched menu offerings, increased
workers' compensation and utility costs and leverage issues
attributable to reasonably fixed costs on a declining sales base.
Advertising
Expenses.
Advertising expenses
increased 0.3% as a percentage of sales for fiscal 2003 versus
the 50 weeks ended July 3, 2002. We increased
advertising weights in prime time, late news and Hispanic
television in a number of markets to provide greater media
exposure.
General and Administrative
Expenses.
General and administrative
expenses decreased 0.3% as a percentage of sales during fiscal
2003 compared to the 50 weeks ended July 3, 2002. The
decrease was largely attributable to reduced bonus expense and a
workforce reduction of approximately 70 non-store employees.
Goodwill
Amortization.
Goodwill amortization
expense was no longer recognized as of January 3, 2002 due
to the adoption as of that date of SFAS No. 142,
"Goodwill and Other Intangible Assets," and its
non-amortization provisions for goodwill.
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Impairment of
Assets.
During fiscal 2003, we
identified as impaired approximately $4.8 million of
long-lived assets for 27 restaurants.
Gain on Sale of Original Roadhouse Grill
Restaurants.
On June 5, 2003, we
sold 13 Original Roadhouse Grill restaurants for approximately
$28.4 million in net proceeds. The gain associated with the
sale of these restaurants approximated $7.1 million.
Loss on Sale and Leaseback
Transactions.
During fiscal 2003, we
entered into three sale-leaseback transactions whereby we
transferred our leasehold interests and leasehold improvements
with respect to 30 restaurants to a third party for net proceeds
of approximately $26.1 million. We simultaneously entered
into long-term leases for those restaurants with an aggregate
initial annual rent of approximately $3.7 million. In
connection with these sale leaseback transactions, we recorded a
loss of approximately $5.9 million primarily to reflect the
impairment of certain of the properties for which the net
proceeds were less than the book value of the leasehold assets.
In addition, the net proceeds for certain of the properties were
greater than the book value of the leasehold assets resulting in
a deferred gain of approximately $3.6 million. The deferred
gain will be accreted over the life of the respective restaurant
leases, ranging from 17 to 25 years.
Interest Expense.
Interest expense increased 0.9% as a percentage of sales during
fiscal 2003 versus the comparable prior year period primarily
due to higher weighted average outstanding debt balances.
Loss Related to
Refinancing.
Loss related to
refinancing consisted of $20.5 million for the prepayment
and make-whole redemption fees, $11.0 million write off of
financing costs related to the retired debt, $4.1 million
of unamortized debt discount related to our 16% and
Buffets' 14% senior subordinated notes due
September 29, 2008, $2.1 million paid to the holders
of the common stock warrants and $1.0 million in expenses.
Income Taxes.
Income
taxes increased 0.1% as a percentage of sales for fiscal 2003
compared to the 50 weeks ended July 3, 2002. The
effective tax rate of 30.8% for the current year compared with
122.2% for the prior year period was largely attributable to the
elimination of goodwill amortization due to the adoption of
SFAS No. 142, "Goodwill and Other Intangible
Assets."
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Table of Contents
For the 26-Week Transitional Period Ended
July 3, 2002 Compared to the 28 Weeks Ended July 18,
2001
The following table sets forth our results of
operations based on the percentage relationship of the items
listed to our restaurant sales during the periods shown:
26-Week
28-Week
Transitional
Period Ended
Period Ended
July 18, 2001
July 3, 2002
(Dollars in thousands)
Restaurant sales
$
567,821
100.0
%
$
527,084
100.0
%
Restaurant costs
481,832
84.9
444,917
84.4
Advertising expenses
15,708
2.8
14,349
2.7
General and administrative expenses
26,700
4.7
25,687
4.9
Goodwill amortization
5,975
1.1
—
—
Operating income
37,606
6.6
42,131
8.0
Interest expense
24,887
4.4
15,088
2.9
Interest income
(324
)
(0.1
)
(212
)
(0.1
)
Loss related to refinancing
—
—
38,724
7.3
Other income
(493
)
(0.1
)
(598
)
(0.1
)
Income (loss) before income taxes
13,536
2.4
(10,871
)
(2.1
)
Income tax expense (benefit)
7,735
1.4
(3,354
)
(0.6
)
Net income (loss)
$
5,801
1.0
$
(7,517
)
(1.4
)
Certain percentage amounts do not sum to total
due to rounding.
Restaurant Sales.
Restaurant sales for the 26-week transitional period ended
July 3, 2002 declined $40.7 million, or 7.2%, compared
with the 28 weeks ended July 18, 2001. The decline in
sales was mostly due to the reduced number of operating weeks in
2002 versus the comparable period in 2001 associated with our
year-end change (two fewer weeks in 2002). Average weekly sales
for the 2002 transitional period of $51,044 were up 2.5% over
average weekly sales for the comparable 28-week period for 2001.
Same-store sales for the 2002 transitional period were up 0.2%
over the comparable period in 2001, reflecting a 2.1% increase
in pricing and a 1.9% decline in guest traffic.
Restaurant Costs.
Restaurant costs for the 2002 transitional period improved by
0.5% as a percentage of sales compared with the prior year
period primarily due to a decrease in food costs, partially
offset by an increase in restaurant management compensation and
an increase in workers' compensation insurance. The food
cost reduction was primarily attributable to significant
improvement in meat prices experienced during the 2002
transitional period as compared to large price spikes incurred
in the first half of 2001.
Advertising
Expenses.
Advertising expenses ran
relatively constant as a percentage of sales, approximately 2.7%
of sales in the 2002 transitional period versus 2.8% in the
comparable period in 2001. Approximately 78% of our buffet units
received advertising support in the 2002 transitional period.
Same store sales among units receiving advertising support were
up 1.9% for the 2002 transitional period, versus overall system
results of only a 0.2% increase.
General and Administrative
Expenses.
General and administrative
expenses were 4.9% of sales for the 2002 transitional period
compared with a total of 4.7% for the comparable prior year
period primarily due to increased incentive compensation costs
and some severance arrangements.
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Table of Contents
Goodwill
Amortization.
Goodwill amortization
expense decreased 1.1% as a percentage of sales in the 2002
transitional period versus the prior year period due to the
adoption in January 2002 of SFAS No. 142,
"Goodwill and Other Intangible Assets," and its
non-amortization provisions for goodwill.
Interest Expense.
Interest expense decreased 1.5% as a percentage of sales during
the 2002 transitional period versus the comparable prior year
period due to lower weighted average outstanding debt balances
coupled with a decrease in the senior credit facility's
variable interest rates.
Loss Related to
Refinancing.
Loss related to
refinancing consisted of $20.5 million for the prepayment
and make-whole redemption fees, $11.0 million write off of
financing costs related to the retired debt, $4.1 million
of unamortized debt discount related to the 16% and
14% senior subordinated notes, $2.1 million paid to
the holders of the common stock warrants and $1.0 million
in expenses.
Income Taxes.
Income
taxes decreased 2.0% as a percentage of sales for the 2002
transitional period compared to the 28 weeks ended
July 3, 2001 principally due to a $24.4 million
decrease in pre tax income. The effective tax rate for the
current period was 30.9% compared with 57.1% for the prior year
period, largely due to a decrease in goodwill amortization
associated with the buyout from public shareholders.
Liquidity and Capital Resources
We are a holding company with no operations or
assets of our own other than the capital stock of our
subsidiaries. Operations are conducted through our subsidiaries
and our ability to make payments on the senior subordinated
notes and distributions on the IDSs is dependent on the earnings
and the distribution of funds from our subsidiaries through
loans, dividends or otherwise. However, none of our subsidiaries
is obligated to make funds available to us for payment on the
senior subordinated notes or dividends on the IDSs. The terms of
the Amended Credit Facility may place restrictions on
Buffets' ability to pay dividends and otherwise transfer
assets to us.
Cash flows generated from operating activities
provide us with a significant source of liquidity. Because most
of our sales are for cash or credit with settlement within a few
days and most vendors are paid on terms ranging from 14 to
35 days, we operate on a significant working capital
deficit. In addition to cash flows from operations, revolving
credit loans and swingline loans are available to us under the
Amended Credit Facility. Letters of credit issued under the
letter of credit facility are also available to us to support
payment obligations incurred for our general corporate purposes.
Historically, our capital requirements have been
for the development and construction of new restaurants,
restaurant refurbishment and the installation of new information
systems. We expect these requirements to continue in the
foreseeable future.
Following the completion of the Transactions, our
short-term and long-term liquidity needs will arise primarily
from: interest payments, which are expected to be between
approximately
$           million
and
$           million
in the first year after completion of the transaction; dividends
to stockholders, which are expected to be
$           per
year; capital expenditures, which are expected to be
approximately
$           million
per year on average in both fiscal 2005 and 2006 (of which in
each year approximately
$           million
is for maintenance capital expenditures and the remainder is for
additional restaurant units and our unit image enhancement
program); potential acquisitions; and working capital
requirements as may be needed to support business growth.
Following the completion of the Transactions, we
will use net proceeds received from this offering, together with
cash on hand and the net proceeds received from the offering by
Buffets of its Senior Notes and approximately
$           million
of borrowings under the Amended Credit Facility, to pre-fund our
capital expenditures program in the amount of
$           million,
repay all outstanding borrowings under the Existing Credit
Facility, repurchase Buffets' 11 1/4% Notes,
repurchase or redeem our 13 7/8% Notes, repurchase
equity interests from our existing stockholders and pay
transaction fees and expenses in connection with this offering.
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Operating
Activities.
Net cash provided by
operating activities was $50.5 million for fiscal 2004,
$57.7 million for fiscal 2003, $39.3 million for the
26-week transitional period ended July 3, 2002
and$68.8 million for fiscal 2001. Net cash provided by
operating activities exceeded the net income for the periods due
principally to the effect of depreciation and amortization, an
increase in accrued and other liabilities for 2001, losses
related to refinancing for 2002 and 2004, impairment of assets
and losses on sale-leaseback transactions in 2003 and 2004, and
loss related to early extinguishment of debt in 2004. Net cash
provided by operating activities in 2003 was partially reduced
by a $17 million payment of accrued redemption fees
associated with our recapitalization in June 2002. The decrease
in cash provided by operating activities between fiscal 2004 and
fiscal 2003 was largely attributable to the timing of payments
on our accounts payable.
Investing
Activities.
Net cash provided by
investing activities was $26.7 million for the year ended
July 2, 2003 and $2.6 million for fiscal 2001. Net
cash used in investing activities was $28.4 million for the
year ended June 30, 2004 and $11.3 million for the
26 weeks ended July 3, 2002. We completed the sale and
leaseback of certain leasehold interests and leasehold
improvements with respect to 23 restaurant locations in 2001,
one location in 2002, 30 locations in 2003 and one in 2004. Net
proceeds from the transactions were approximately
$39.1 million in 2001, $2.3 million in 2002,
$26.1 million in 2003 and $2.7 million in 2004. The
aggregate initial annual rent associated with the sale-leaseback
transactions was $3.2 million in 2001, $0.2 million in
2002, $3.7 million in 2003 and $0.3 million in 2004.
We did not recognize a gain or loss on these transactions in
2001, 2002 or 2004, but recorded a loss of $5.9 million in
2003. The losses primarily reflected the impairment of certain
of the properties for which the net proceeds were less than the
book value of the leasehold assets. In addition, the net
proceeds for certain of the properties were greater than the
book value of the leasehold assets resulting in a deferred gain
of $3.6 million in 2003 and $0.3 million in 2004. This
deferred gain is being accreted over the life of the respective
restaurant leases, ranging from 17 to 25 years. In
addition, we completed the sale of 13 Original Roadhouse
Grill restaurants in 2003 for approximately $28.4 million
in net proceeds, of which $2.5 million represented a
long-term note receivable. Capital expenditures in fiscal 2004
largely comprised re image expenditures for approximately
50 restaurants in the sum of $18.2 million, while
capital expenditures for prior periods primarily comprised new
store outlays and minor restaurant remodels. In 2004, we
undertook a re-imaging effort on approximately 50 units
whereby the restaurant's interiors, and in some cases the
exteriors, were significantly improved. In addition to new wall
and floor coverings and extensive décor upgrades, display
cooking stations were added. While guest feedback on display
cooking stations was generally positive, overall returns on this
component of the re-imaging program did not meet our
expectations. We intend to continue to remodel our restaurants
with many of the materials and décor items included in the
2004 re-imaging program, but will limit the development of
display cooking in existing restaurants. While the price per
unit for the 2004 re-image campaign was approximately $360,000
per location, the expectation for future re-image expenditures
is between $125,000 and $200,000 per unit.
Financing
Activities.
Net cash used in financing
activities was $11.9 million for fiscal 2004, $76.8 million
for fiscal 2003, $47.2 million for the 26 weeks ended
July 3, 2002 and $59.6 million for fiscal 2001. On
June 28, 2002, Buffets, Inc. entered into new debt
agreements to refinance its then existing debt, make a
distribution to Buffets Holdings and repurchase Buffets
Holdings' outstanding preferred stock warrants. In
connection with the transactions, we incurred a loss of
$38.7 million. The loss related to refinancing consisted of
$20.5 million for the prepayment and make-whole redemption
fees, $11.0 million in write-offs of financing costs
related to the retired debt, $4.1 million of unamortized
debt discount write-offs related to our 16% and Buffets'
14% senior subordinated notes, $2.1 million paid to
the holders of the common stock warrants and $1.0 million
in expenses.
Future Capital
Expenditures.
During fiscal 2005, we
plan to:
•
Open between seven and eight new restaurants with
    an initial capital outlay of approximately $14 million. We
    intend to arrange forward-funding arrangements, or build-to-suit
    arrangements, to the extent possible on prospective new store
    openings to reduce or eliminate these capital requirements by
    approximately $7 million. In those instances where we are
    unable to arrange a
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forward-funding arrangement, we intend to enter
    into sale and leaseback transactions to recover our initial
    capital outlay.
•
Spend approximately $13 million on
    remodeling and improvement costs that will be capitalized.
    Remodels incorporate design elements to update the décor of
    our existing facilities including a lighter, more contemporary
    interior design and expanded dessert displays. Other improvement
    costs include a variety of outlays such as new carpet, equipment
    and minor leasehold improvements.
•
Spend approximately $20 million on the
    repair and maintenance of our existing restaurant locations that
    will be expensed. This amount is comparable, as a percentage of
    sales, to historical repair and maintenance spending patterns.
    This will encompass expenditures to keep equipment in good
    working order and leasehold improvements in good condition,
    without substantially extending the economic lives of the
    underlying assets.
•
Spend approximately $2 million on
    miscellaneous corporate and system investments.
We are not aware of any other event or trend that
would potentially affect our capital requirements or liquidity.
For the next twelve months, we believe that cash flow from
operations, the $      million in
cash on hand available for capital expenditures, landlord
contributions, credits received from trade suppliers and
available borrowing capacity will be adequate to finance our
development plans, on going operations and debt service
obligations.
Credit Facilities and Other Long Term
Debt
In connection with this offering, Buffets will
enter into an Amended Credit Facility. The Amended Credit
Facility will provide for total borrowings of up to
$           million,
including (i) a
$           million
term loan, (ii) a
$           million
revolving credit facility (which includes a
$           million
letter of credit sub-facility), (iii) a
$           million
letter of credit facility and (iv) a
$           million
synthetic letter of credit facility. The borrowings under the
term loan facility will bear interest, at our option, at either
adjusted LIBOR plus % or at an alternate base rate
plus      %, subject to a
leverage-based pricing grid. The term loan and the synthetic
letter of credit facility will mature
on                     ,
2011, while the revolving facility and the letter of credit
sub-facility will mature
on                     ,
2009. The Amended Credit Facility will be fully and
unconditionally guaranteed by Buffets Holdings and all of
Buffets' subsidiaries and will be secured by substantially
all of Buffets' assets. Availability under the Amended
Credit Facility will depend upon our continued compliance with
certain covenants and financial ratios including leverage,
interest coverage and fixed charge coverage as specifically
defined in the amended credit agreement governing the Amended
Credit Facility. On a pro forma basis, as of June 30, 2004,
we would have had
$          in
outstanding letters of credit, the total borrowing availability
under the revolving credit facility would have been
$          and
the total borrowing under the letter of credit facilities would
have been
$          .
In connection with this offering, Buffets will
issue
$           million
aggregate principal amount of its Senior Notes
due                     ,
2014. See "Description of Other Indebtedness —
Senior Notes of Buffets" for further discussion of
Buffets' Senior Notes. Interest is payable semi-annually on
and                     of
each year. The indenture governing Buffets' Senior Notes
will contain covenants limiting our ability, and the ability of
our subsidiaries, among other things, to (1) incur
additional indebtedness, (2) make restricted payments,
(3) create restrictions on the payment of dividends,
(4) sell assets or capital stock of subsidiaries,
(5) engage in transactions with affiliates, (6) sell
or issue capital stock of subsidiaries, (7) incur liens,
(8) engage in sale/leaseback transactions, and
(9) consolidate, merge or transfer assets. The payment of
principal, premium and interest on Buffets' Senior Notes
will be fully and unconditionally guaranteed, jointly and
severally, by Buffets Holdings and all of Buffets'
subsidiaries.
We are offering
$           million
aggregate principal amount of senior subordinated notes hereby.
See "Description of Senior Subordinated Notes" for
further discussion of the senior subordinated notes. As of
June 30, 2004, on a pro forma basis, after giving effect to
this offering, the application of net proceeds from this
offering and the prospective repurchase of a portion of
Buffets' senior subordinated notes, our
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debt would have been
$           million,
of which
$           million
would have been indebtedness of our subsidiaries.
Seasonality and Quarterly
Fluctuations
Our sales are seasonal, with a lower percentage
of annual sales occurring in most of our current market areas
during the winter months. Our restaurant sales may also be
affected by unusual weather patterns, major world events or
matters of public interest that compete for customers'
attention. Generally, restaurant sales per unit are lower in the
winter months, our third fiscal quarter ending in April of each
year. The impact of these reduced average weekly sales are
mitigated in our quarterly data presentations through the
inclusion of 16 weeks in the quarter ending in April of
each year, compared to only 12 or 13 weeks in each of
the other fiscal quarters.
New Accounting Standards
In January 2003, the Financial Accounting
Standards Board (FASB) issued FASB Interpretation No.
(FIN) 46, "Consolidation of Variable Interest
Entities, an Interpretation of ARB 51." The primary
objectives of FIN 46 are to provide guidance on the
identification of entities for which control is achieved through
means other than through voting rights (variable interest
entities, or VIEs) and how to determine when and which business
enterprise should consolidate the VIE (the primary beneficiary).
In December 2003, the FASB issued FIN 46(R),
"Consolidation of Variable Interest Entities," which
represents a revision to FIN 46. The provisions of
FIN 46(R) are effective for interests in VIEs as of the
first interim, or annual, period ending after March 15,
2004. In addition, FIN 46(R) requires that both the primary
beneficiary and all other enterprises with a significant
variable interest make additional disclosure in filings issued
after January 31, 2003. We adopted FIN 46(R) as of
December 17, 2003 and its adoption had no impact on the our
consolidated results of operations, financial position or cash
flow.
In May 2003, the FASB issued
SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and
Equity." SFAS No. 150 modifies the accounting for
certain financial instruments that, under previous guidance,
issuers could account for as equity. SFAS No. 150
requires that those instruments be classified as liabilities in
statements of financial position. Most of the guidance in
SFAS No. 150 is effective for all financial
instruments entered into or modified after May 31, 2003, or
otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003. We adopted
SFAS No. 150 as of July 3, 2003 and its adoption
had no impact on our consolidated results of operations,
financial position or cash flow.
Quantitative and Qualitative Disclosures About
Market Risk
Interest Rate Risks.
We have interest rate exposure relating to the variable portion
of our long-term obligations. Buffets'
11 1/4% Notes and our 13 7/8% Notes are
fixed. The senior subordinated notes being offered hereby and
Buffets' Senior Notes being offered concurrently will be
fixed. The interest rates on the term loans under Buffets'
Existing Credit Facility are variable. Based on the terms of
Buffets' Existing Credit Facility and assuming that credit
facility had been in effect from the beginning of fiscal 2003, a
1% change in interest rates on our variable rate debt would have
resulted in our interest rate expense fluctuating by
approximately $2.2 million for fiscal 2003 and
$1.9 million for fiscal 2004. Our interest rate risk under
the Existing Credit Facility was mitigated, in part, by an
interest rate cap purchased on November 25, 2002 with a
notional value of $15 million and a 5% LIBOR strike price
that expired on June 30, 2004. We expect that the Amended
Credit Facility will have a variable interest rate, subject to
any hedges we may put in place.
Food Commodity
Risks.
Many of the food products
purchased by us are affected by commodity pricing and are,
therefore, subject to price volatility caused by weather,
production problems, delivery difficulties and other factors
that are outside our control. To control this risk in part, we
have fixed price purchase commitments with terms of one year or
less for some key food and supplies from vendors who supply our
national food distributor. In addition, we believe that
substantially all of our food and supplies
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Table of Contents
are available from several sources, which helps
to control food commodity risks. We believe we have the ability
to increase menu prices, or vary the menu items offered, if
needed, in response to food product price increases within the
range that has been experienced historically. To compensate for
a hypothetical price increase of 10% for food and beverages, we
would need to increase menu prices by an average of
approximately 3%. Our average menu price increases were
approximately 2% for fiscal 2003 and 2% for fiscal 2004.
Accordingly, we believe that a hypothetical 10% increase in food
product costs would not have a material effect on our operating
results.
Contractual Obligations
The following table provides aggregate
information about our material contractual payment obligations
and the fiscal year in which these payments are due. These
obligations are as of June 30, 2004 and do not give effect
to the Transactions.
Payments Due by Fiscal Year
2005
2006
2007
2008
Thereafter
Total
(in thousands)
Long-term debt(1)
$
2,300
$
2,300
$
2,300
$
2,300
$
551,065
$
560,265
Operating leases(2)
53,913
52,713
50,482
48,346
327,601
533,055
Advisory fees(3)
3,504
3,379
3,266
3,266
—
13,415
Total contractual cash obligations
$
59,717
$
58,392
$
56,048
$
53,912
$
878,666
$
1,106,735
(1)
Long-term debt payments for fiscal 2005 and
    beyond represent the required debt payments on our Existing
    Credit Facility, Buffets' 11 1/4% Notes and our
    13 7/8% Notes.
(2)
Operating leases is comprised of minimum rents
    and contingent rents. Operating leases have not been reduced by
    minimum sublease rentals of approximately $24,902,000. See Note
    10 to our consolidated financial statements included elsewhere
    in this prospectus for details of our operating lease
    obligations.
(3)
The advisory fees comprise our contractual
    obligation to pay annual advisory fees to each of Roe H.
    Hatlen, Sentinel Capital Partners, L.L.C. and Caxton-Iseman
    Capital. See "Certain Relationships and Related
    Transactions." Under the terms of these agreements,
    Mr. Hatlen and Sentinel Capital are each paid a fixed-price
    annual fee. The fee of Caxton-Iseman is calculated as a
    percentage of our earnings before interest, taxes, depreciation
    and amortization, which in fiscal 2004 resulted in a payment of
    $3.1 million. This figure has been used as an estimate for our
    obligations under that agreement for fiscal 2005 and each fiscal
    year thereafter. The agreements with Caxton-Iseman and Sentinel
    Capital are of perpetual duration, and hence no estimate of the
    aggregate amount of future obligations (represented in the
    "Thereafter" column, above) is provided.
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Other Commercial Commitments
The following table provides aggregate
information about our commercial commitments and the fiscal year
in which they expire:
Amount of Commitment Expiration by Fiscal
Year
2005
2006
2007
2008
Thereafter
Total
(in thousands)
Letters of credit(1)
$
35,102
$
—
$
—
$
—
$
—
$
35,102
Management loan guarantees(2)
—
—
—
—
125
125
Total commercial commitments
$
35,102
$
—
$
—
$
—
$
125
$
35,227
(1)
Our outstanding letters of credit expire at
    various times with final expirations May 2005. As of
    June 30, 2004, the total borrowing availability under the
    revolving credit facility was $30.0 million and the total
    borrowing capacity under the letter of credit facilities was
    $14.9 million.
(2)
The management loan guarantees comprise our
    guarantee on loans provided by U.S. Bank to certain members of
    management. See "Certain Relationships and Related
    Transactions."
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BUSINESS
Our Company
Buffets Holdings was formed to acquire Buffets in
a buyout from public shareholders on October 2, 2000.
Buffets Holdings is a holding company whose assets consist
substantially of the capital stock of Buffets, and we conduct
virtually all of our business through Buffets and its
subsidiaries.
Founded in 1983, Buffets is the twentieth largest
restaurant operator in the United States and is the largest
operator of company-owned stores in the buffet/grill segment, as
measured in both sales and number of restaurants. Our
restaurants are principally operated under the names Old Country
Buffet and HomeTown Buffet. As of June 30, 2004, we had
360 company-owned restaurants and 20 franchised locations
in 38 states. We offer excellent customer service, together
with a convenient, value-priced selection of home-style cooked
meals in a self-service buffet format. For fiscal 2004, we
generated net sales of $942.8 million and served
approximately 131 million customers.
Our restaurants provide a high level of food
quality and service through uniform operational standards
developed at the corporate level. Freshness is ensured by
preparing food in small batches of six to eight servings at a
time, with preparations and production adapted to current
customer traffic patterns. Our buffet restaurants utilize
uniform menus, recipes and ingredient specifications, with
certain discretion to adapt menus for regional preferences. We
offer approximately 100 menu items at each meal, including
entrees, soups, salads, fresh vegetables, non-alcoholic
beverages and desserts. Typical entrees include chicken, carved
roast beef, ham, shrimp, salmon, peppered pork loin, fish and
casseroles.
Our buffet restaurants use an all-inclusive
pricing strategy designed to provide dining value to our
customers. As of June 30, 2004, the meal price at our
buffet restaurants for dinner ranged from $8.59 to $9.59 and for
lunch from $6.49 to $7.19, with discounts offered to senior
citizens and children. The average guest check in our
restaurants, including our Tahoe Joe's Famous Steakhouses,
for fiscal 2004 was $7.22. In order to further enhance our
guests' dining experience, we have focused on providing a
level of customer service designed to enhance the self-service
buffet format, including such features as limited table-side
service and our scatter-bar layout.
Our buffet restaurants average approximately
9,900 square feet in size and can generally seat between
225 and 400 people. On average, our buffet restaurants served
approximately 7,000 customers per week during fiscal 2004. While
we attract a broad demographic profile of customers, including
families, senior citizens and singles, our customer surveys
indicate that approximately two-thirds of our guests are married
and over half are between the ages of 25 and 54 years old
(the largest segment of the population within the United States).
We have a national footprint of restaurant
locations, which are strategically concentrated in particular
regions to maximize penetration within those markets and achieve
operating and advertising synergies. For example, our television
advertising program in 38 designated market areas provided media
coverage for 62% of our buffet restaurants during fiscal 2004.
In addition, our restaurants are located in high customer
traffic venues and include both freestanding units and units
located in shopping centers and malls. As of June 30, 2004,
69% of our restaurants were located in shopping centers or malls
and 31% were freestanding units.
Industry Overview
The restaurant industry is among the largest
industries in the United States and according to Technomic,
Inc., an independent research organization, has grown at an
average annual rate of 7.3% from 1975 through 2002. The
restaurant industry can be divided into three main segments:
full-service restaurants, quick-service restaurants, and other
miscellaneous establishments. Full-service restaurants include
the mid-scale, casual dining and upscale (fine dining) segments.
The mid-scale segment, which includes buffet/grill restaurants,
is characterized by complete meals, menu variety and moderate
prices. The casual dining segment, which typically has higher
menu prices and generally offers alcoholic
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beverages, includes a small number of national
chains, regional chains and independent operators. The
quick-service segment is characterized by lower average checks,
portable meals, fast service and convenience. We operate in the
$3.0 billion buffet/grill sector within the mid-scale
segment, which has grown at a compound annual growth rate of
6.2% from 1997 through 2002. We believe the appeals of the
buffet concept are its full line of food offerings and
all-you-care-to-eat format, and that this format drives greater
price/value perception in the customer's eyes.
Growth in the restaurant industry, and the
buffet/grill sector in particular, has been driven by the
increasing demands for dining ease and convenience among
today's consumers. The restaurant industry's portion
of the total food industry's dollar has grown significantly
in the past two decades. According to Technomic, the restaurant
industry's share of total food sales has increased from 23%
in 1980 to approximately 31% in 2003. This growth is expected to
continue as a result of several key lifestyle and demographic
trends, including the continued increase in spending on food
away from the home and on restaurant dining and the continued
growth in disposable incomes among the key age groups of the
population frequenting our restaurants.
Our Competitive Strengths
We believe our leading market position, strong
cash flow, flexible cost structure, motivated and trained
employees, centralized control measures, attractive unit level
economics and proven management team will allow us to grow sales
and increase profitability.
Leading Market Position with National
Scale.
We are the twentieth largest
restaurant operator in the United States and the largest
operator of company-owned stores in the buffet/grill sector, as
measured in both sales and number of restaurants. We accounted
for approximately 32% of total sales within this estimated
$3.0 billion sector. We believe that we benefit from our
long-term operating history, significant operational
efficiencies and economies of scale due to our large number of
restaurants and our centralized operating and purchasing
systems. We believe that we are able to achieve substantial
levels of savings as a result of our size and related purchase
volumes, particularly with respect to food and beverage goods.
Strong Cash Flow
Generation.
Our strong operating
results and favorable working capital characteristics are key
drivers of our strong cash flow. Over the last seven fiscal
years, our maintenance capital expenditures have averaged
approximately 1.2% of sales, while our ongoing maintenance
expenses have averaged approximately 2.0% of sales. We believe
our restaurants are well-maintained and will require a
historically consistent level of required maintenance
expenditures in the future. In addition, we typically generate
cash flow from working capital as we receive cash for the
majority of our sales immediately at the point of service and
most vendors are paid on terms ranging to 35 days.
Flexible Operating
Model.
As a buffet-style restaurant
with a broad selection of food, we are not tied to a particular
menu item enabling us to quickly modify our offerings in
response to changes in customer preferences and food costs. Our
food offerings are very diversified, with no individual food
product purchase cost accounting for more than 5% of our
restaurant sales. In the event of an increase in the cost of a
particular food product, we are able to highlight other foods on
the menu in order to reduce consumption of the higher cost item.
In addition to food cost tracking, we are also able to manage
our operating margins through controlling our general and
administrative expenses and varying our labor cost model by
restructuring layers of store-level management.
Highly Trained and Motivated
Employees.
Our most important asset is
our people. We believe a well trained and motivated workforce
results in lower turnover, lower operating costs and the ability
to consistently grow sales in existing units. Our general
managers have an average of over seven years of experience with
us. During fiscal 2004, our buffet restaurant general manager
annualized turnover was approximately 14% and total buffet
restaurant management annualized turnover was approximately 24%,
which we believe are among the lowest turnover rates in the
industry. We are deeply committed to the long-term development
of our employees. In fiscal 2004, we spent $3.4 million on
training and development. All of our buffet restaurant managers
receive extensive training relating to all aspects of restaurant
management at Buffets College, our training program operated out
of our corporate
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headquarters. We further seek to reinforce our
employees' commitment through targeted retention programs.
Centralized Control
Measures.
We maintain rigorous
financial controls, service and food quality in all of our
buffet restaurants using uniform operational standards developed
at the corporate level and implemented at the restaurant level.
Our centralized systems enable management to evaluate weekly
profit and loss statements, sales reports and supplier invoices
for each buffet restaurant, allowing us to quickly identify
performance trends and key profitability drivers. These systems
are supplemented by several performance audit and evaluation
programs, including a 1-(800) guest service line, an ongoing
system-wide guest satisfaction survey system and detailed
quarterly restaurant performance audits by multi-unit managers.
These ongoing efforts assist management in tracking restaurant
performance and customer satisfaction at the individual
restaurant level. We believe that centralized coordination of
our nationwide network of buffet restaurants assures a
consistent level of food quality in our restaurants and enables
us to negotiate pricing terms for major product purchases
directly with manufacturers.
Attractive Unit Level
Economics.
Over 94% of our
company-owned stores produced positive store-level cash flow for
fiscal 2004. Our existing restaurants generated average weekly
restaurant sales of $49,949 for fiscal 2004. We believe that our
store-level cash flow before occupancy costs compares favorably
to other restaurants in the buffet/grill sector on an equivalent
basis and that our higher average sales volume is due to
disciplined site selection and penetration in our core markets,
providing operating and marketing synergies. Our buffet
restaurants opened in fiscal 2001 through fiscal 2004 generally
became profitable by the 4th week of opening and generated
average annualized sales of $3.2 million in their first
year of operation. As measured by cash-on-cash returns, defined
as first year restaurant level cash flow as a percentage of
initial cash investment, our restaurants opened in the last four
years have produced cash-on-cash returns of over 25% in their
first year of operation.
Proven Management Team with Equity
Ownership.
Over the past
20 years, we have attracted and built an exceptionally
talented and complementary executive management team with an
average of over 20 years of restaurant industry experience.
Our executive management team has demonstrated strong restaurant
operating capabilities by adapting our strategies in challenging
business climates to deliver consistent cash flow. In addition,
our senior management has significant equity ownership of our
company.
Our Business Strategy
Our success has been driven by an emphasis on
food quality, a focus on restaurant level operations,
disciplined capital expenditures and adherence to uniform
system-wide operational standards. Our goal is to provide
exceptional value to maintain customer loyalty and drive
increased guest traffic. We plan to continue to improve our
operating performance through the principal strategies outlined
below:
Growth of Same Store Sales and Margin
Expansion.
We are focused on growing
same store sales and margins through operational initiatives at
the restaurant level. These initiatives include:
•
emphasis on food quality through our
    "Back-to-Scratch" initiative on most protein offerings
    and our nationwide roll-out of enriched food offerings, such as
    boneless peppered pork loin, orange chicken with jasmine rice
    and baked salmon, designed to attract and retain guests through
    high quality menu offerings,
•
theme promotions, where a specific cuisine, such
    as BBQ, Italian, Asian, Seafood or Mexican, is highlighted on a
    given night, designed to keep the experience fresh for repeat
    customers and to capitalize on local market preferences,
•
the promotion of well-informed choices by
    providing nutritional information to our guests and enabling
    them to make good personal food decisions,
•
disciplined return-on-investment-based approach
    to advertising expenditures, designed to increase the efficiency
    of our marketing dollars by focusing on high-return markets and
    specific theme promotions, and
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•
focus on store-level operating costs by
    continuously adjusting our store level labor to minimize labor
    costs while maintaining exceptional customer service and
    high-quality food offerings.
Disciplined Capital
Spending.
We employ a disciplined
approach to capital expenditures that targets a high return on
its investment.
•
Disciplined Restaurant
    Development
— We plan to
    grow in a disciplined manner by continuing to improve our
    restaurant base through strategically adding a limited number of
    restaurants in markets where we have advertising and operational
    efficiencies and closing a limited number of restaurants which
    do not meet our profitability goals. We will continue to focus
    on adding new restaurants in sites that offer high levels of
    traffic and are convenient to both lunch and dinner customers in
    our target demographic groups. Our new locations should offer
    low occupancy costs and upfront capital investments. To reduce
    our initial capital outlay for new store construction, we will
    seek to enter into build-to-suit arrangements with landlords and
    sale and leaseback programs. We have completed sale and
    leaseback transactions in respect of 55 restaurants in the last
    four fiscal years. We expect our new restaurant openings to
    require net capital investments of $1.0 million, primarily
    for equipment and furnishings. In 2005, we plan to open seven to
    eight new restaurants and approximately five per year thereafter.
•
Emphasis on Improving Existing
    Units
— We remain committed
    to maintaining and upgrading our restaurants to maintain
    customer appeal. We periodically update our restaurants to
    reflect a more contemporary interior design that provides a more
    visually appealing and comfortable restaurant interior. Location
    refurbishments typically occur approximately every five to seven
    years and cost approximately $125,000 to $200,000 per unit.
Our Background
Buffets Holdings was formed by Caxton-Iseman
Capital, Inc. in 2000. On October 2, 2000, we acquired
Buffets in a buyout from its public shareholders. Caxton-Iseman
Investments L.P. and certain other investors, including members
of management, made an equity investment in us and became the
beneficial owners of 100% of our common stock. Buffets Holdings
is a holding company whose assets consist substantially of the
capital stock of Buffets.
Buffets was founded in 1983 to develop
buffet-style restaurants under the name Old Country Buffet. In
October 1985, Buffets successfully completed an initial public
offering with seven restaurants, and by 1988 had
47 company-owned units and nine franchised units. In
September 1996, Buffets merged with HomeTown Buffet, Inc., a
similar publicly-held scatter-bar, buffet-style restaurant
company established and developed by one of our co-founders. The
merger brought the total number of restaurants to
346 company-owned restaurants and 24 franchised restaurants
in 36 states at December 31, 1996.
Buffet Restaurant Operations and
Controls
In order to maintain a consistently high level of
food quality and service in all of our restaurants, we have
established uniform operational standards. These standards are
developed at the corporate level and implemented by the managers
of each restaurant. We require all restaurants to be operated in
accordance with rigorous standards and specifications relating
to the quality of ingredients, preparation of food, maintenance
of premises and employee conduct.
Each buffet restaurant typically employs a Senior
General Manager or General Manager, Kitchen Manager, Service
Manager and one or two assistant managers. Each of our
restaurant General Managers has primary responsibility for
day-to-day operations in one of our restaurants, including
customer relations, food service, cost controls, restaurant
maintenance, personnel relations, implementation of our policies
and the restaurant's profitability. A portion of each
general manager's and other restaurant managers'
compensation depends directly on the restaurant's
profitability. Bonuses are paid to buffet restaurant managers
each period based on a formula percentage of controllable
restaurant profit. We believe that our
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compensation policies have been important in
attracting, motivating and retaining qualified operating
personnel.
Each buffet restaurant general manager reports to
an Area Manager or a District Representative, each of whom in
turn reports to a Regional Vice President. The Regional Vice
Presidents report to one of two Vice Presidents of Operations,
who in turn report to our executive team. Our Tahoe Joe's
Famous Steakhouse restaurants, and some test efforts, are
supervised by Division Heads reporting directly to our Chief
Executive Officer.
We maintain centralized financial and accounting
controls for all of our restaurants. On a daily basis,
restaurant managers forward customer counts, sales, labor costs
and deposit information to our headquarters. On a weekly basis,
restaurant managers forward a summarized profit and loss
statement, sales report, supplier invoices and payroll data.
Management Training
We have a series of training programs that are
designed to provide managers with the appropriate knowledge and
skills necessary to be successful in their current positions.
All new restaurant managers hired from outside our organization
and hourly employees considered for promotion to restaurant
management are required to complete nine days of classroom
training at our corporate headquarters in Eagan, Minnesota.
After their initial instruction, new management candidates
continue their training for four weeks in one of our certified
training restaurants. The information covered in manager
training includes basic management skills, food production,
labor management, operating programs and human resource
management.
Advancement is tied to both current operational
performance and training. Individuals designated for promotion
to the position of General Manager attend a specialized
eight-day training program conducted at our corporate
headquarters. This program focuses on advanced management skills
with emphasis on team building and performance accountability.
In addition to these programs, we conduct a
variety of field training efforts for store management covering
topics such as new product procedures, food safety and
management development.
Research and Development, Menu Selection and
Purchasing
The processes of developing new food offerings
and establishing standard recipes and product specifications are
handled at our headquarters. Specialists drawn from the Research
and Development, Marketing, Operations and Purchasing
Departments lead this effort. Before new items are introduced or
existing products are modified, a program of testing within
limited markets is undertaken to assess customer acceptance and
operational feasibility. Food quality is maintained through
centralized supplier coordination suppliers and frequent
restaurant visits by Area Directors, District Representatives
and other management personnel.
New product activity includes an ongoing roll-out
of new items to keep the guest experience fresh. Additionally,
we have periodic theme promotions, wherein a specific cuisine,
such as BBQ, Italian, Asian, Seafood or Mexican, is highlighted
on a given night. Each spring and fall, a seasonal menu is
introduced to provide variety and more seasonally appropriate
food. Furthermore, although most of the menu is similar for all
buffet restaurants, individual restaurants have the option to
customize a portion of the menu to satisfy local preferences.
Headquarters personnel negotiate major product
purchases directly with manufacturers on behalf of all of our
restaurants for food, beverage and supply purchasing, including
quality specifications, delivery schedules and pricing and
payment terms. Each restaurant manager places orders for
inventories and supplies with, and receives shipments directly
from, distributors and local suppliers approved by us.
Restaurant managers approve all invoices before forwarding them
to our headquarters for payment. To date, we have not
experienced any material difficulties in obtaining food and
beverage inventories or restaurant supplies.
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Franchising
We currently franchise 20 buffet restaurants
under the Old Country Buffet and HomeTown Buffet names. One
large franchisee comprises approximately 75% of the franchise
base with small operators holding the remaining units.
Franchisees must operate their restaurants in compliance with
our operating and recipe manuals. Franchisees are not required
to purchase food products or other supplies through us or our
suppliers. Each franchised restaurant is required at all times
to have a designated Manager and Assistant Manager who have
completed the required manager training program.
Advertising and Promotion
We market our buffet restaurants through a
two-tiered marketing approach including mass media advertising
and community based marketing. Mass media advertising,
predominantly television, is used when we can receive a
profitable return on expenditures. Our mass media mix includes
television advertisements and the limited use of print
advertisements, radio advertisements and tour bus marketing. For
fiscal 2004, approximately 62% of our buffet restaurants were in
markets supported by television advertisements.
We have instituted a disciplined approach to
advertising expenditures, designed to increase the efficiency of
our marketing dollars by focusing on high-return markets and
specific theme promotions. Our theme promotions where a specific
cuisine, such as BBQ, Italian, Asian, Seafood or Mexican is
highlighted on a given night, is designed to keep the guest
experience fresh and capitalize local market preferences.
Community based marketing is the responsibility
of each individual store. Our local marketing efforts are
designed to build relationships with the community. Most
restaurants employ a dedicated community marketing
representative who participates in an array of local events.
Competition
The food service industry is highly competitive.
Menu, price, service, convenience, location and ambiance are all
important competitive factors. The relative importance of many
such factors varies among different segments of the consuming
public. By providing a wide variety of food and beverages at
reasonable prices in an attractive and informal environment, we
seek to appeal to a broad range of value-oriented consumers. We
believe that our primary competitors in this industry segment
are other buffet and grill restaurants, as well as traditional
family and casual dining restaurants with full menus and table
service. Secondary competition arises from many other sources,
including home meal replacement and fast food. We believe that
our success to date has been due to our particular approach
combining pleasant ambiance, high food quality, wide menu
breadth, cleanliness, reasonable prices, and satisfactory levels
of service and convenience.
Regulation
Each of our restaurants is subject to licensing
and regulation by the health, sanitation, safety, building and
fire agencies of the respective states and municipalities in
which they are located. A failure to comply with one or more
regulations could result in the imposition of sanctions,
including the closing of facilities for an indeterminate period
of time or third-party litigation, any of which could have a
material adverse effect on us and our results of operations.
Additionally, our restaurants must be constructed to meet
federal, state and local building and zoning requirements.
We are also subject to laws and regulations
governing our relationships with employees, including minimum
wage requirements, overtime, reporting of tip income, work and
safety conditions and regulations governing employment. Because
a significant number of our employees are paid at rates tied to
the federal minimum wage, an increase in such minimum wage would
increase our labor costs. An increase in the federal minimum
wage, state-specific minimum wages, or employee benefits costs
could have a material adverse effect on us and our results of
operations.
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Additionally, our operations are regulated
pursuant to state and local sanitation and public health laws.
Operating restaurants utilize electricity and natural gas, which
are subject to various federal and state regulations concerning
the allocation and pricing of energy. Our operating costs have
been and will continue to be affected by increases in the cost
of energy. These energy costs have undergone large cyclical
swings in recent years and have had a disproportionate impact in
our most favorable markets.
Each of our Tahoe Joe's Famous Steakhouse
restaurants is further subject to licensing and regulation by a
number of governmental authorities, including alcoholic beverage
control agencies, in the state, county and municipality in which
the restaurant is located. Difficulties or failures in obtaining
the required licenses or approvals could delay or prevent the
opening of a new restaurant in a particular area. Alcoholic
beverage control regulations require restaurants to apply to a
state authority and, in some locations, to county or municipal
authorities for a license or permit to sell alcoholic beverages
on the premises and to provide service for extended hours and on
Sundays. Typically, licenses or permits must be renewed annually
and may be revoked or suspended for cause at any time. Alcoholic
beverage control regulations relate to numerous aspects of a
restaurant's operations, including the minimum age of
patrons and employees, the hours of operation, advertising, and
the wholesale purchasing, inventory control and handling,
storage and dispensing of alcoholic beverages.
In California, we may be subject to "Dram
Shop" statutes, which generally provide a person injured by
an intoxicated patron the right to recover damages from an
establishment that wrongfully served alcoholic beverages to the
intoxicated person. We carry liquor liability coverage as part
of our existing comprehensive general liability insurance.
New Restaurant Development
We plan to grow in a disciplined manner by
continuing to improve our restaurant base through strategically
adding a limited number of restaurants in markets where we have
advertising and operational efficiencies and closing a limited
number of restaurants which do not meet our profitability goals.
We will continue to focus on adding new restaurants in sites
that offer high levels of traffic and are convenient to both
lunch and dinner customers in our target demographic groups. Our
new locations should offer low occupancy costs and upfront
capital investments. We plan to lease new units through build to
suit arrangements, whereby a landlord develops a free-standing
building shell for long-term single tenant rental to us, to the
extent possible. This strategy should significantly reduce our
initial capital outlay for new store construction. Additionally,
we will continue to employ a sale and leaseback program on
free-standing units not developed through a build-to-suit
program. Through this sale and leaseback process, in which the
land and/or building shell of a unit is sold to a third party
and leased back on a single tenant basis, much of the
construction cost associated with a new unit can be deferred and
recognized over a long-term rental period (generally
15-20 years). In 2005, we plan to open between seven to
eight new restaurants.
Improvement of Existing Restaurants
We remain committed to maintaining and upgrading
our restaurants to expand our guest base and maintain our appeal
among repeat customers. Our interior remodeling program takes
advantage of scheduled maintenance capital expenditures to
update our restaurants to reflect a more contemporary interior
design that provides a more visually appealing and comfortable
restaurant interior. We plan on upgrading our units with a new
interior décor package over the next five to seven years as
they become due for a recurring refurbishment. Through this
phased approach, we can minimize incremental capital
expenditures, while providing a better and more contemporary
dining environment for our guests. Our planned remodeling effort
will focus on interior décor elements which have resonated
well with guests. We will also conduct limited testing on the
development of display cooking facilities or "action
stations" in a few of our restaurants. These action
stations provide a more interactive and exciting dining
experience for our guests through display cooking and limited
"cook to order" items, such as omelettes and panini
sandwiches. We will be focused on improving the rate of return
on these action stations, which will govern the extent of future
deployment.
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Environmental Matters
Our operations are also subject to federal, state
and local laws and regulations relating to environmental
protection, including regulation of discharges into the air and
water. Under various federal, state and local laws, an owner or
operator of real estate may be liable for the costs of removal
or remediation of hazardous or toxic substances on or in such
property. Such liability may be imposed without regard to
whether the owner or operator knew of, or was responsible for,
the presence of such hazardous or toxic substances. Although we
are not aware of any material environmental conditions on our
properties that require remediation under federal, state or
local law, we have not conducted a comprehensive environmental
review of our properties or operations. We cannot assure you
that we have identified all of the potential environmental
liabilities at our properties or that such liabilities will not
have a material adverse effect on our financial condition.
Property
Our restaurants are located in both urban and
suburban areas in a variety of shopping centers, malls and
freestanding buildings. We lease all of our restaurant locations
located in shopping centers and malls. All but one of the 112
freestanding restaurants are operated in company-funded
leasehold improvements located on leased land or in facilities
where we lease both the underlying land and the leasehold
improvements.
Our leases are generally for 10- or 15-year
terms, with two to four options exercisable at our discretion to
renew for a period of five years each. The leases provide for
rent to be paid on a monthly basis.
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As of June 30, 2004, we and our franchisees
operated 380 locations as follows:
Number of
Number of
Total Number
Company-Operated
Franchised
of
State
Restaurants
Restaurants
Restaurants
Arizona
4
8
12
California
95
1
96
Colorado
12
2
14
Connecticut
6
—
6
Delaware
1
—
1
Florida
2
—
2
Georgia
1
—
1
Idaho
1
—
1
Illinois
32
—
32
Indiana
11
—
11
Iowa
5
—
5
Kansas
2
—
2
Kentucky
3
—
3
Maine
1
—
1
Maryland
7
—
7
Massachusetts
9
—
9
Michigan
20
—
20
Minnesota
15
—
15
Missouri
11
—
11
Montana
1
—
1
Nebraska
—
3
3
New Jersey
8
—
8
New Mexico
—
2
2
New York
16
—
16
North Carolina
1
—
1
Ohio
20
—
20
Oklahoma
2
—
2
Oregon
7
—
7
Pennsylvania
20
—
20
Rhode Island
1
—
1
South Carolina
2
—
2
Tennessee
1
—
1
Texas
5
—
5
Utah
—
3
3
Virginia
9
—
9
Washington
16
—
16
Wisconsin
12
—
12
Wyoming
1
1
2
Total
360
20
380
Our corporate headquarters is located in leased
facilities in Eagan, Minnesota.
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The following table sets forth certain
information concerning our owned property as follows:
Location
Acres
Use and Ownership
Coon Rapids, Minnesota
2.49
OCB Restaurant Co. property for newly relocated
    buffet restaurant.
Marshfield, Wisconsin
5.04
Cabinet shop owned by OCB Restaurant Co.
Mankato, Minnesota
1.60
Undeveloped OCB Restaurant Co. property.
Trademarks and Other Intellectual
Property
As of June 30, 2004, we had company-owned
restaurants operating under the following trademarks or service
marks that we have registered with the United States Patent and
Trademark Office. (the number within parentheses below
represents the number of restaurants):
•
Old Country Buffet® (180),
•
HomeTown Buffet® (168),
•
Country Roadhouse Buffet & Grill®
    (1), and
•
Soup 'N Salad Unlimited® (2).
In addition, as of June 30, 2004, we had
company-owned restaurants operating under the following
trademarks or service marks: Granny's
Buffet
SM
(1) and Tahoe Joe's Famous
Steakhouse
SM
(8) for which we have federal
registrations for Tahoe Joe's®. As far as we are
aware, our trademarks and registered service marks are generally
valid and enforceable as long as the marks are used in
connection with our restaurants and services. We regard our
service marks and trademarks as having significant value and
being an important factor in the development of our buffet and
other restaurant concepts. Our policy is to pursue and maintain
registration of our service marks and trademarks whenever
practicable and to oppose vigorously infringement or dilution of
our service marks and trademarks.
Litigation
We are not a party to and do not have any
property that is the subject of any legal proceedings pending
or, to our knowledge, threatened, other than ordinary routine
litigation incidental to our business and proceedings which are
not material or as to which we believe we have adequate
insurance.
Employees
As of June 30, 2004, we had approximately
23,000 employees. Except for approximately 370 corporate
employees who primarily worked at our corporate headquarters,
our employees worked at our company-owned restaurants.
Generally, each buffet restaurant operates with three to five
salaried managers and assistant managers and approximately
59 hourly employees. Our employees are not unionized. We
have never experienced any significant work stoppages and
believe that our employee relations are good.
Our average wage costs have been reasonably
stable for the past two fiscal years largely due to
macro-economic conditions. Historically, in times of increasing
average wage costs, we have been able to offset wage cost
increases through increased efficiencies in operations and, as
necessary, through retail price increases. We cannot assure you
that we will continue to be able to offset wage cost increases
in the future.
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MANAGEMENT
Directors and Executive Officers
The following table sets forth information
regarding our current directors and executive officers. Upon the
closing of the Transactions, we expect to restructure our board
of directors. See "— Composition of the Board of
Directors after this Offering" below.
Name
Age
Position
Frederick Iseman
51
Chairman of the Board and Director
Kerry A. Kramp
48
President, Chief Executive Officer and Director
Glenn D. Drasher
53
Executive Vice President of Marketing for Buffets
R. Michael Andrews, Jr.
40
Executive Vice President and Chief Financial
    Officer
H. Thomas Mitchell
47
Executive Vice President, General Counsel and
    Secretary
Roe H. Hatlen
60
Vice Chairman of the Board and Director
Steven M. Lefkowitz
40
Director
Robert A. Ferris
62
Director
David S. Lobel
51
Director
Robert M. Rosenberg
66
Director
Frederick Iseman
has
served as Chairman of the Board and as a director of our company
and as Chairman of the Board and as a director of Buffets since
October 2000. Mr. Iseman is currently Chairman and Managing
Partner of Caxton-Iseman Capital, a private investment firm,
which was founded by Mr. Iseman in 1993. Prior to
establishing Caxton-Iseman Capital, Mr. Iseman founded
Hambro-Iseman Capital Partners, a merchant banking firm. From
1988 to 1990, Mr. Iseman was a member of Hambro
International Venture Fund. Mr. Iseman is Chairman of the
Board and a director of Anteon International Corporation and Ply
Gem Industries, Inc. and a member of the Advisory Board of Duke
Street Capital and the Advisory Board of STAR Capital Partners
Limited.
Kerry A. Kramp
has
served as our President and Chief Executive Officer since
February 2004 and of Buffets since May 2000, and as a director
of our company and as a director of Buffets since October 2000.
Prior to that date, he had served as our President and Chief
Operating Officer since our merger with HomeTown Buffet in 1996.
Mr. Kramp was President and a director of HomeTown Buffet
from 1995 through our merger in 1996.
Glenn D. Drasher
has
served as the Executive Vice President of Marketing for Buffets
since 1997. He has over 25 years of operational, marketing
and executive restaurant industry experience. From 1994 until he
joined us, Mr. Drasher was Executive Vice President for
Country Kitchen International and Vice President of Marketing
for Country Hospitality Worldwide, both divisions of Carlson
Companies.
R. Michael
Andrews, Jr.
has served as our
Executive Vice President and Chief Financial Officer since
February 2004 and of Buffets since April 2000. Prior to joining
us, Mr. Andrews served as Chief Financial Officer of Eerie
World Entertainment, the parent company to Jekyll &
Hyde Clubs, from 1999 to 2000. He was Chief Financial Officer of
Don Pablo's Restaurants from 1998 to 1999. Previously,
Mr. Andrews was with KPMG Peat Marwick LLP for
approximately 12 years, serving most recently as Senior
Manager.
H. Thomas Mitchell
has served as our Executive Vice
President, General Counsel and Secretary since February 2004 and
of Buffets since 1998. He joined our company in 1994 and has
13 years of executive restaurant industry experience and
19 years of legal practice. Mr. Mitchell served in the
further capacity of Chief Administrative Officer from 1998 until
2000.
Roe H. Hatlen
co-founded our company and has served
as the Vice-Chairman of the Board and as a director of our
company since October 2000 and as the Vice-Chairman of the Board
and as a director of Buffets since June 2002. He served as our
Chairman and Chief Executive Officer from our inception in
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1983 through May 2000 and as President from May
1989 to September 1992. He is a member of the Board of Regents
of Pacific Lutheran University.
Steven M. Lefkowitz
has served as a director of our
company and of Buffets since October 2000. Mr. Lefkowitz is
a Managing Director of Caxton-Iseman Capital and has been
employed by Caxton-Iseman Capital since 1993. From 1988 to 1993,
Mr. Lefkowitz was employed by Mancuso & Company, a
private investment firm, and served in several positions
including Vice President and as a Partner of Mancuso Equity
Partners. Mr. Lefkowitz is a director of Anteon
International Corporation and Ply Gem Industries, Inc.
Robert A. Ferris
has
served as a director of our company since October 2000 and of
Buffets since June 2002. Mr. Ferris is a Managing Director
of Caxton-Iseman Capital and has been employed by Caxton-Iseman
Capital since March 1998. From 1981 to February 1998,
Mr. Ferris was a General Partner of Sequoia Associates, a
private investment firm headquartered in Menlo Park, California.
Prior to founding Sequoia Associates, Mr. Ferris was a Vice
President of Arcata Corporation, a New York Stock
Exchange-listed company. Mr. Ferris is a director of Anteon
International Corporation and Ply Gem Industries, Inc.
David S. Lobel
has
served as a director of our company since October 2000 and of
Buffets since June 2002. Mr. Lobel is currently Managing
Partner of Sentinel Capital Partners, a private equity
investment firm founded by Mr. Lobel in 1995. Prior to
establishing Sentinel Capital Partners, Mr. Lobel spent
15 years at First Century Partners, Smith Barney's
venture capital affiliate. Mr. Lobel joined First Century
in 1981 and served as a general partner of funds managed by
First Century from 1983 until his departure in 1995. From 1979
to 1981, Mr. Lobel was a consultant at Bain &
Company. Mr. Lobel is Chairman of the Board and a director
of Castle Dental, Inc.
Robert M. Rosenberg
has served as a director of our
company since May 2001 and of Buffets since June 2002. He is the
retired Chief Executive Officer of Dunkin' Donuts, a
position he held from 1963 until his retirement in 1998. He has
been a member of the Board of Directors of Sonic Corp. since
1993 and a member of the Board of Directors of Domino's
Pizza since 1999.
Composition of the Board of Directors After
This Offering
Prior to the consummation of the Transactions, we
intend to restructure our board of directors. Our board of
directors will consist of 7 directors, including 4 newly
appointed independent directors, as defined in
the                     listing
standards. Their appointment will be subject to the consummation
of the Transactions. In connection with this offering, we will
provide in our amended and restated certificate of incorporation
that for such time as Caxton-Iseman Capital together with its
affiliates beneficially own at least 10% or 5% of our equity,
whether in the form of Class A or Class B common
stock, it will be entitled to nominate two directors or one
director, respectively.
Committees of the Board
Prior to the consummation of this offering, we
intend to establish an audit committee, a compensation committee
and a nominating and corporate governance committee. Each
committee will consist of three persons, at least one of whom is
not employed by us, and is "independent" as defined by
the rules
of                     .
Within one year of the consummation of this offering, all the
members of these committees will be independent, except for our
audit committee, which will have three independent members upon
the closing of this offering.
Audit Committee
The audit committee will consist of three newly
appointed independent directors, one of whom will serve as the
audit committee financial expert. The audit committee will
operate according to the audit committee charter duly adopted by
our board of directors.
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Upon completion of this offering, among other
functions, the principal duties and responsibilities of our
audit committee will be as follows:
•
to monitor our financial reporting process and
    internal control system;
•
to appoint and replace our independent outside
    auditors from time to time, determine their compensation and
    other terms of engagement and oversee their work;
•
to oversee the performance of our internal audit
    function;
•
to establish procedures for the receipt,
    retention and treatment of complaints regarding accounting,
    internal accounting controls, or auditing matters and the
    confidential anonymous submission by employees of concerns
    regarding questionable accounting or auditing matters; and
•
to oversee our compliance with legal, ethical and
    regulatory matters.
The audit committee will be required to report
regularly to our board of directors to discuss any issues that
arise with respect to the quality or integrity of our financial
statements, our compliance with legal or regulatory
requirements, the performance and independence of our
independent auditors, and the performance of the internal audit
function.
Compensation Committee
The compensation committee will consist of three
newly appointed independent directors. The compensation
committee will operate according to the compensation committee
charter duly adopted by our board of directors.
Upon completion of this offering, among other
functions, the principal duties and responsibilities of the
compensation committee will be as follows:
•
to provide oversight on the development and
    implementation of the compensation policies, strategies, plans
    and programs for our key employees and outside directors and
    disclosure relating to these matters; and
•
to review and approve the compensation of our
    chief executive officer and the other executive officers of us
    and our subsidiaries.
Nominating and Corporate Governance
    Committee
The nominating and corporate governance committee
will consist of three newly appointed independent directors. The
nominating and corporate governance committee will operate
according to the nominating and corporate governance committee
charter duly adopted by our board of directors.
Upon completion of this offering, among other
functions, the principal duties and responsibilities of the
nominating and corporate governance committee will be as follows:
•
to establish criteria for board and committee
    membership and recommend to our board of directors proposed
    nominees for election to the board of directors and for
    membership on committees of the board of directors;
•
to make recommendations regarding proposals
    submitted by our stockholders; and
•
to make recommendations to our board of directors
    regarding corporate governance matters and practices.
Compensation Committee Interlocks and Insider
Participation
During the last fiscal year, no executive officer
of ours served as a director of or member of a compensation
committee of any entity for which any of the persons serving on
our board of directors or on the compensation committee of the
board of directors is an executive officer.
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Director Compensation
The members of the board of directors, except for
any member who is an executive officer, will receive a fee of
$           per
year for serving as directors and
$           per
year for serving on each committee of our board of directors.
All directors will be reimbursed for all reasonable expenses
they incur while acting as directors, including as members of
any committee of the board of directors.
Executive Compensation
The following table sets forth information
relating to the compensation awarded to, earned by or paid to
our President and Chief Executive Officer, Kerry A. Kramp,
and each of the five other most highly compensated executive
officers whose individual compensation exceeded $100,000 during
fiscal 2004, 2003 and for the 2002 transitional period for
services rendered to us.
Long Term Compensation
Annual Compensation
Awards
Other Annual
Restricted
Fiscal
Compensation
Stock
All Other
Name and Principal Position
Year
Salary($)
Bonus($)
($)
Awards
Compensation
Kerry A. Kramp
2004
491,400
—
22,487
—
—
President, Chief Executive
2003
472,500
50,000
20,023
—
—
Officer and Director
2002
253,558
114,071
4,743
—
—
David Goronkin
2004
—
—
—
—
—
Chief Operating Officer
2003
316,000
—
8,063
—
—
and Director(1)
2002
169,593
72,656
2,799
Glenn D. Drasher
2004
224,786
—
1,756
—
—
Executive Vice President
2003
222,560
—
8,626
—
—
of Marketing
2002
119,511
35,820
1,958
—
—
R. Michael Andrews, Jr.
2004
224,640
—
11,421
—
—
Executive Vice President
2003
216,000
75,000
18,104
—
—
and Chief Financial Officer
2002
115,692
34,765
5,165
—
—
H. Thomas Mitchell
2004
194,324
—
1,761
—
—
Executive Vice President,
2003
192,400
50,000
7,937
—
—
General Counsel and Secretary
2002
103,315
17,695
138
—
—
Jean C. Rostollan
2004
135,279
—
68,167
(3)
—
—
Executive Vice President
2003
192,400
—
6,569
—
—
of Purchasing(2)
2002
84,730
17,530
4,862
—
—
(1)
David Goronkin, former Chief Operating Officer
    and Director, resigned from both positions in April 2003.
(2)
Jean C. Rostollan, former Executive Vice
    President of Purchasing, separated from the company in
    February 2004.
(3)
Includes $66,518 of severance pay.
Employee Benefit Plans
We have a 401(k) plan covering all of our
employees who have been employed for at least one year, are
21 years or older and worked at least 1,000 hours in
the previous year. Our discretionary contributions to the plan
are determined annually, on a calendar year basis, by our board
of directors and are used to match a portion of our
employees' voluntary contributions. Our partial matching
contributions to the 401(k) fund vest over a five-year period so
long as the employee remains employed by us. We made matching
contributions of $0.9 million in 2001 and $0.1 million
in calendar year 2003. These contributions were paid during the
first quarter of the succeeding calendar year. There were no
matching contributions for calendar year 2002. The 2004 matching
contribution will not be authorized until the end of 2004
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calendar year. We had an accrual of
$0.4 million as of June 30, 2004 for estimated 2004
matching contributions related to the first half of calendar
year 2004.
Employment Agreements
Kerry A. Kramp, Glenn D. Drasher,
R. Michael Andrews, Jr., H. Thomas Mitchell,
K. Michael Shrader and Jean C. Rostollan each entered
into a severance protection agreement with us dated as of
September 29, 2000. Each agreement entitles the executive
to continue to receive his or her salary, medical and health
benefits, group term life insurance and long term disability
coverage on the same basis as prior to termination of employment
with us for 52 weeks following termination of employment
with us for any reason other than for cause, disability or death
and execution of a release attached to the agreements. The
executives have no duty to mitigate the amounts payable under
the agreements. K. Michael Shrader and Jean C.
Rostollan are currently being compensated under the terms of
their respective severance protection agreements.
Incentive Plans.
In January 2001, we adopted the Buffets Holdings,
Inc. Equity Participation Plan. Under this plan, the
Compensation Committee may grant, from time to time, options to
purchase shares of our common stock to certain restaurant
general managers, above-store field management and corporate
managers. As
of                     ,
2004, the total number of shares of common stock with respect to
which options may be granted under the plan is 113,750, of which
options to
purchase                      shares
were outstanding. In lieu of permitting employees to exercise
their options for shares of common stock, we may at our option
cash out the options using a defined formula or, in the event of
an equity exchange, provide exchange shares. Concurrently with
the closing of this offering, we plan to cash out employees who
hold less than 200 options under this plan. For all other
option holders a portion of the options will be paid out in
cash. The remaining portion will be converted into IDSs and
Class B common stock, so that employees receive the same
ratio of cash proceeds to IDSs and Class B common stock as
our officers who are selling a portion of their shares of common
stock now held in connection with the offering, and converting
the remainder into IDSs and Class B common stock.
In January 2001, we also adopted the Buffets
Holdings, Inc. Cash Appreciation Plan. Under this plan, the
compensation committee may award units to selected corporate
employees and store managers below the general manager level and
not otherwise eligible to participate in the Equity
Participation Plan. Units awarded under this plan are subject to
vesting and generally become non-exercisable sixty days
following termination of the award holder's employment with
us. The value of units upon exercise is generally determined
using a formula similar to that used in the Equity Participation
Plan. Our board of directors may direct that all outstanding
units be cancelled upon certain extraordinary transactions
involving us, in which case unitholders will be paid the value
of their units in the manner described in the plan. Concurrently
with the closing of this offering, we plan to cash out all
unitholders under this plan.
We currently maintain a cash-based incentive plan
for key members of our management team. Participants in this
plan are eligible to receive a certain percentage of their base
compensation upon the achievement of certain financial targets
as determined by our board of directors.
We may, concurrently with the closing of this
offering, or in the future, alter our current incentive plans
and or adopt a new long-term incentive plan to provide incentive
compensation to members of our management team.
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PRINCIPAL STOCKHOLDERS
The following table sets forth information as
of                     ,
2004, regarding the beneficial ownership of Buffets
Holdings' common stock prior to the completion of this
offering and the Transactions and Class A common stock and
Class B common stock immediately after the completion of
this offering and the Transactions and shows the number of
shares and percentage owned by (1) the named executive
officers and each director of Buffets Holdings individually,
(2) all named executive officers and directors as a group
and (3) the stockholders of Buffets Holdings known to us to
be the beneficial owner of more than 5% of Buffets
Holdings' common stock as of June 30, 2004. Except as
noted below, the address of each principal stockholder of
Buffets Holdings is c/o Buffets Holdings, Inc.,
1460 Buffet Way, Eagan, Minnesota, 55121.
Shares Beneficially Owned
Prior to Offering
After Offering
Common Stock
Class A
Class B
Number
%
Number
%
Number
%
Caxton-Iseman Investments L.P.(1)
2,501,438
78.5
%
%
%
Sentinel Capital Partners II, L.P.(2)
225,106
7.1
Frederick Iseman(1)
2,501,438
—
Kerry A. Kramp
130,000
4.1
R. Michael Andrews, Jr.
56,875
1.8
Roe H. Hatlen(3)
162,952
5.1
David Goronkin(4)
—
—
Robert M. Rosenberg(5)
4,610
0.1
Steven M. Lefkowitz
—
—
Robert A. Ferris
—
—
David S. Lobel
—
—
All executive officers and directors as a group
    (9 persons)(5)
3,080,981
96.7
%
%
%
(1)
By virtue of Mr. Iseman's indirect
    control of Caxton-Iseman Investments L.P., he is deemed to
    beneficially own the 2,501,438 shares of common stock
    (               and                      shares
    of Class A and Class B common stock, respectively,
    after the offering). The address of Caxton-Iseman Investments
    L.P. and Mr. Iseman is c/o Caxton-Iseman Capital,
    Inc., 500 Park Avenue, New York, New York 10022.
(2)
The address of Sentinel Capital
    Partners II, L.P. is 777 Third Avenue,
    32nd Floor, New York, New York, 10017.
(3)
Mr. Hatlen has sole voting and dispositive
    power over 65,012 shares of common stock
    (                     shares
    of Class A common stock after the offering).
    Mr. Hatlen may be deemed to be the beneficial owner of
    67,518 shares of common stock
    (                      shares
    of Class A common stock after the offering) held by the
    Lars C. Hatlen Trust, Erik R. Hatlen and Kari E.
    Hatlen, each such entity or person owning 22,506 shares of
    common stock
    (                     shares
    of Class A common stock after the offering). By virtue of
    Mr. Hatlen's control over Eventyr Investments, he is
    deemed to beneficially own the 30,422 shares of common
    stock
    (                     shares
    of Class A common stock after the offering) held by that
    entity.
(4)
David Goronkin, former Chief Operating Officer
    and Director, resigned from both positions in April 2003.
(5)
Prior to the offering, Mr. Rosenberg also
    owned options to purchase 12,600 shares of common
    stock.
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CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
Founder Advisory Agreements
Roe H. Hatlen has entered into an advisory
arrangement with Buffets Holdings and Buffets that expires in
2005. Under his advisory agreement, Mr. Hatlen received
$325,000 in fiscal 2001, $150,000 in the 2002 transitional
period, $283,000 in fiscal 2003 and $257,000 in fiscal 2004. He
will receive $238,000 in fiscal 2005 and $113,000 in fiscal
2006. In addition, Mr. Hatlen will receive health, medical
and other benefits comparable to those made available to our
management employees through calendar 2005. Mr. Hatlen
holds approximately 5.1% of the shares of Buffets Holdings
common stock. Concurrently with the closing of the Transactions,
the advisory agreement with Mr. Hatlen will be terminated
and we will make a one-time payment of the amounts
Mr. Hatlen would have received under the advisory agreement
for fiscal 2005 and fiscal 2006.
Purchase of Property by Roe Hatlen
In November 2001, Mr. Hatlen purchased a
portion of the land adjoining our headquarters for
$1.02 million. The land was sold by the entity that had
purchased the parcel at the time of the buyout from public
shareholders. Mr. Hatlen's purchase resulted in a
reduction of the rental amount payable by us under the sale and
leaseback transaction relating to our corporate headquarters.
Caxton-Iseman Capital Advisory
Agreement
We entered into an advisory agreement with an
affiliate of Caxton-Iseman Capital under which the affiliate of
Caxton-Iseman Capital provides various advisory services to us
in exchange for an annual advisory fee equal to 2% of our annual
consolidated earnings before interest, taxes, depreciation and
amortization and an additional 1% fee for advisory services
relating to particular transactions. Under this agreement, we
paid $2.9 million in fiscal 2001, $1.2 million in the
2002 transitional period, $2.8 million in fiscal 2003 and
$3.1 million in fiscal 2004. We have agreed to pay a fee to
Caxton-Iseman Capital of $7.5 million and to terminate the
Caxton-Iseman Capital arrangement concurrently with the closing
of the Transactions except with respect to our indemnification
obligations towards Caxton-Iseman Capital for services provided.
As a result of the termination of this agreement, Caxton-Iseman
Capital will no longer be under any obligation to provide
services to us and we will be under no obligation to retain
Caxton-Iseman Capital for any future services.
Board of Directors Advisory
Agreement
In October 2002, we entered into an advisory
agreement with Robert M. Rosenberg, under which he provided
various advisory services to us for an advisory fee of $35,000
during fiscal 2003 and $3,500 during fiscal 2004. Concurrently
with the closing of the Transactions, the advisory agreement
with Robert M. Rosenberg will be terminated.
Sentinel Capital Advisory Agreement
We entered into an advisory agreement with
Sentinel Capital Partners, L.L.C., under which Sentinel Capital
provides various advisory services to us for an annual advisory
fee of $200,000. Under this agreement, we paid approximately
$200,000 in fiscal 2001, $108,000 in the 2002 transitional
period, $200,000 in fiscal 2003 and $200,000 in fiscal 2004.
Concurrently with the closing of the Transactions, the advisory
agreement with Sentinel Capital will be terminated.
Guarantees, Promissory Notes and Pledge
Agreements
As part of the buyout from public shareholders on
October 2, 2000, some of our management investors obtained
recourse loans from U.S. Bank, which allowed them to
purchase shares in Buffets Holdings. In connection with these
management investor loans, we provided guarantees of these loans
to U.S. Bank and we paid interest to U.S. Bank at
prime plus 1% on these loans. Concurrently, each of the
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management investors pledged his, or her,
respective ownership interests in the shares of Buffets Holdings
and executed a promissory note in favor of us, whereby each
agreed to repay the corresponding amount of the guarantee,
together with interest at fixed rates ranging between 6%
and 7% per annum, at the earliest of (1) seven years,
(2) termination of employment with our company or
(3) the sale, disposition or other transfer of the
management investor's ownership interests in the shares.
Currently, none of our executive management has any outstanding
management investor loan that is guaranteed by us.
David Goronkin was advanced $315,000 on
February 20, 2002 for the purchase of homestead property in
Minnesota. Interest was payable annually at a rate equal to the
Buffets' interest rate on its senior secured borrowing, up
to a maximum of 12% per annum. The principal plus accrued
but unpaid interest was repaid upon his resignation.
Series A Senior Subordinated and
Series B Junior Subordinated Notes due 2011
In connection with the June 2002 refinancing
transactions, we issued series A senior subordinated notes
due 2011 to our preferred stockholders as part of the redemption
of our senior preferred stock and series B junior
subordinated notes due 2011 as a dividend to holders of our
common stock and holders of warrants to purchase our common
stock. The subordinated notes were originally issued on
June 28, 2002 with a maturity date of June 25, 2011.
The subordinated notes bore interest at the rate of 3% per
annum from June 28, 2002 through December 31, 2002,
and thereafter bore interest at the rate of 4.75% per
annum. Payments of accrued interest on the notes were made
annually as of June 28 of each year. In connection with
entering into the Existing Credit Facility, we redeemed all of
our outstanding series A senior subordinated notes. We used
a portion of the proceeds of the offering of our
137/8% Notes, among other things, to redeem the remaining
series B junior subordinated notes. The subordinated notes
were issued to holders of our preferred stock and to holders of
our common stock and holders of warrants to purchase common
stock, including the following persons in the amounts indicated:
Amount of Series A
Amount of Series B
Senior
Junior
Name of Beneficial Owner
Subordinated Notes
Subordinated Notes
Caxton-Iseman Investments L.P.(1)
$
6,847,427
$
14,470,628
Sentinel Capital Partners II, L.P.
616,197
1,303,378
Frederick Iseman(1)
6,847,427
14,470,628
Kerry A. Kramp
—
595,941
R. Michael Andrews, Jr.
—
186,232
Roe H. Hatlen(2)
244,167
552,078
David Goronkin
—
223,478
Glenn D. Drasher
6,162
87,526
Harold T. Mitchell
—
74,493
K. Michael Shrader
—
74,493
Lars C. Hatlen Trust(2)
—
130,195
Erik R. Hatlen(2)
—
130,195
Kari E. Hatlen(2)
—
130,195
Beverly J. Hatlen(2)
23,856
—
Eventyr Investments L.P.(2)
125,324
175,989
(1)
By virtue of Mr. Iseman's indirect
    control of Caxton-Iseman Investments L.P., he was deemed to
    beneficially own the $6,847,427 of series A senior
    subordinated notes and $14,470,628 of series B junior
    subordinated notes held by that entity.
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(2)
Mr. Hatlen had sole ownership over $118,843
    of series A senior subordinated notes and $376,089 of
    series B junior subordinated notes. Mr. Hatlen may
    have been deemed to be the beneficial owner of the series B
    junior subordinated notes held by the Lars C. Hatlen Trust,
    Erik R. Hatlen and Kari E. Hatlen, each such entity or
    person having owned $130,195 of series B junior
    subordinated notes. By virtue of Mr. Hatlen's control
    over Eventyr Investments, he was deemed to beneficially own the
    $125,324 of series A senior subordinated notes and $175,989
    of series B junior subordinated notes held by that entity.
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RELATED PARTY TRANSACTIONS IN CONNECTION WITH
THIS OFFERING
Recapitalization
Prior to and in connection with the closing of
this offering, we will consummate a recapitalization in order to
implement the capital structure required for this offering.
Prior to this offering, we had issued and had outstanding a
single class of common stock held by management and affiliates
of Caxton-Iseman Capital, Inc., Sentinel Capital Partners,
L.L.C. and certain other institutional investors, which we refer
to collectively in this prospectus as the "existing
stockholders." In addition, management owns a number of
options to purchase shares of common stock and certain other
financial investors hold common stock warrants.
We will undertake the following transaction steps
in connection with the recapitalization:
•
We will form a wholly owned subsidiary and will
    enter into a recapitalization agreement and plan of merger with
    the subsidiary, whereby we will merge the subsidiary into us.
•
Under the terms of our certificate of
    incorporation, adoption of the recapitalization agreement and
    plan of merger and approval of the amended and restated
    certificate of incorporation will require the affirmative vote
    of stockholders owning a majority of the outstanding shares of
    our existing common stock. The consummation of this offering and
    the other Transactions are contingent upon our having received
    shareholder approval of these recapitalization transactions.
•
Upon the recapitalization, all of the outstanding
    options to purchase our common stock will cease to be
    exercisable and will be cancelled upon the recapitalization. We
    will exchange either cash, Class B common stock or a
    combination thereof for cancelled options to purchase our common
    stock from all option holders who hold at least
    200 cancelled options. All other holders of cancelled
    options will receive cash in exchange for their cancelled
    options.
•
Upon the recapitalization, all of the outstanding
    warrants for our existing common stock will be cancelled, and
    all holders of our existing common stock warrants will receive
    Class B common stock in exchange for their warrants.
•
In connection with the recapitalization, we will
    offer our existing stockholders a combination of cash and
    Class B common stock for each of our existing shares of
    common stock. We expect that members of our management will
    receive a greater proportion of Class B common stock than
    our other existing stockholders.
•
A limited number of our existing stockholders or
    warrantholders who are institutional accredited investors or
    qualified institutional buyers (as such terms are defined in
    Regulation D and Rule 144A under the Securities Act of
    1933, as amended) may also receive IDSs as part of the
    recapitalization consideration in lieu of a portion of
    Class B common stock otherwise receivable by them.
We will offer a maximum of
approximately                      shares
of Class B common stock
and                     IDSs
as part of the recapitalization consideration. The shares of
Class B common stock will
represent      % of the outstanding
voting power of us and      % of the
overall value of our equity after giving effect to this offering
and the recapitalization. See "Description of Capital
Stock — Common Stock" for a description of the
terms of the Class B common stock.
To the extent the underwriters'
over-allotment option is exercised, we will sell additional IDSs
to the underwriters. We will use the proceeds from the sale of
additional IDSs to repurchase securities from certain of our
existing stockholders.
Under Delaware law and subject to certain
procedures, existing stockholders who do not consent to the
merger will be entitled to exercise appraisal rights for the
fair value of their shares of common stock in lieu of accepting
the recapitalization consideration and any applicable
over-allotment consideration.
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The table below sets forth the consideration to
be received by certain of our affiliates that are holders of our
common stock, options to purchase shares of our common stock and
common stock warrants in connection with the internal corporate
transactions, based on an assumed initial public offering price
of
$                per
IDS (the mid-point of the price range set forth on the cover of
this prospectus) and assuming no exercise of the
underwriters' over-allotment option.
Shares of
Options to
Common
Purchase
Common
Shares of
Stock
Common
Stock
Class B
Owned
Stock Owned
Warrants
Common
Prior to the
Prior to the
Owned Prior to
IDSs to
Stock to be
Cash
Name
Offering
Offering
the Offering
be Issued
Issued
Consideration
Caxton-Iseman Investments L.P.
Sentinel Capital Partners II,
    L.P.
Frederick Iseman(1)
Kerry A. Kramp
R. Michael Andrews, Jr.
Roe H. Hatlen(2)
Robert M. Rosenberg
Steven M. Lefkowitz
Robert A. Ferris
David S. Lobel
(1)
Includes Caxton-Iseman Investments L.P. by virtue
    of Mr. Iseman's indirect control of Caxton-Iseman
    Investments L.P., he is deemed to beneficially own the
    2,501,438 shares of common stock
    (                     and                      shares
    of Class A and Class B common stock, respectively,
    after the offering).
(2)
Includes Lars C. Hatlen Trust, Erik R.
    Hatlen, Kari E. Hatlen and Eventyr Investments.
    Mr. Hatlen has sole voting and dispositive power over
    65,012 shares of common stock
    (                     shares
    of Class B common stock after the offering).
    Mr. Hatlen may be deemed to be the beneficial owner of
    67,518 shares of common stock
    (                      shares
    of Class B common stock after the offering) held by the
    Lars C. Hatlen Trust, Erik R. Hatlen and Kari E. Hatlen, each
    such entity or person owning 22,506 shares of common stock
    (                    shares
    of Class B common stock after the offering). By virtue of
    Mr. Hatlen's control over Eventyr Investments, he is
    deemed to beneficially own the 30,422 shares of common
    stock
    (                      shares
    of Class B common stock after the offering) held by that
    entity.
Investor Rights Agreement
We will enter into an investor rights agreement
with the existing stockholders immediately prior to the
consummation of this offering. It will provide that in the event
that the IDSs are automatically separated as a result of the
partial redemption of any senior subordinated notes, at such
time we will amend our by-laws to delete the restriction that we
may only issue shares of Class A common stock in offerings
registered with the Securities and Exchange Commission and each
share of Class B common stock will be exchangeable
for                      shares
of Class A common stock and
$          of
senior subordinated notes.
Subject to limited exceptions, until the second
anniversary of the consummation of this offering, the investor
rights agreement will restrict the holders of our Class B
common stock from exercising their exchange rights if, following
the exchange, the holders of our Class B common stock would
hold in the aggregate less than 10% of the outstanding shares of
our capital stock.
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In addition, the investor rights agreement will
contain the following registration rights:
•
our existing stockholders will collectively
    have                     demand
    registration rights relating to the IDSs and the shares of our
    Class A common stock and senior subordinated notes
    represented by the IDSs that they hold as well as the IDSs into
    which such shares of Class B common stock may be exchanged,
    subject to the requirement that the securities covered by each
    demand registration have an aggregate public offering price of
    at least $10 million; provided that one or more existing
    stockholders must beneficially own more
    than           %
    of our outstanding shares of Class A common stock,
    Class B common stock, senior subordinated notes, or IDSs,
    as the case may be, to initiate a demand for registration;
    provided, further, that one or more existing stockholders may
    exercise a demand right for less than an aggregate public
    offering price of $10 million if such proposed offering is
    for all of the remaining shares of Class A common stock,
    senior subordinated notes or IDSs held by such existing
    stockholder or stockholders; and
•
our existing stockholders will have the right to
    include in future public offerings of securities by us or any of
    our securityholders the shares of our Class A common stock,
    senior subordinated notes or IDSs held by each of them as well
    as the IDSs into which such shares of Class B common stock
    may be exchanged.
The existing stockholders may only exercise their
demand registration rights with respect to their Class A
common stock once our Class A common stock is listed on
the                               .
If the existing stockholders exercise their demand registration
rights, we will file a registration statement or prospectus and
undertake an offering in the United States, as requested by the
existing stockholders. The registration rights are transferable
by the existing stockholders.
We have agreed to pay all costs and expenses in
connection with each such registration, except underwriting
discounts and commissions applicable to the securities sold, and
to indemnify the existing stockholders that have included
securities in such offering against certain liabilities,
including liabilities under the Securities Act.
Furthermore, we have agreed not to repurchase any
shares of Class B common stock prior to the second
anniversary of the consummation of this offering.
In this prospectus, we refer to all of the
transactions described in "Related Party Transactions in
Connection with this Offering" as our "internal
corporate transactions."
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DESCRIPTION OF OTHER INDEBTEDNESS
Amended Credit Facility
Concurrently with the closing of this offering,
Buffets intends to enter into an amended credit agreement with a
syndicate of lenders. Credit Suisse First Boston will act as
administrative agent and collateral agent for the syndicate and
as lead arranger and bookrunner under the amended credit
agreement. Pursuant to the amended credit agreement, and subject
to certain conditions, the lenders will provide to Buffets a
credit facility of
$           million.
Structure
The Amended Credit Facility will consist of:
•
a revolving loan facility of
    $           million
    (which includes a
    $           million
    letter of credit sub-facility),
•
a letter of credit facility of
    $           million,
•
a synthetic letter of credit facility of
    $           million, and
•
a term loan of
    $           million.
The undrawn portion of the revolving loan
facility will be available to Buffets for general corporate
purposes as revolving credit loans or as swingline loans.
Borrowings made as swingline loans will reduce availability
under the revolving loan facility on a dollar-for-dollar basis.
Letters of credit issued under the revolving loan facility, the
letter of credit facility or the synthetic letter of credit
facility will be available to Buffets to support payment
obligations incurred for our general corporate purposes.
Interest and Expenses
Borrowings under the term loan facility will bear
interest, at Buffets' option, at either adjusted LIBOR
plus      % or at the alternate base
rate plus      %. Borrowings under the
revolving loan facility will bear interest, at Buffets'
option, at either adjusted LIBOR
plus      % or at the alternate base
rate plus      %, subject to a
leveraged-based pricing grid. Outstanding letters of credit
under the revolving loan facility will be subject to a per annum
fee equal to      %, subject to a
leveraged-based pricing grid. The alternate base rate is the
higher of Credit Suisse First Boston's prime rate and the
federal funds effective rate
plus      %. The letter of credit
facility will be subject to a per annum fee equal
to      % of the aggregate amount of
the letter of credit facility, subject to a leveraged-based
pricing grid, whether letters of credit are outstanding or not.
The synthetic letter of credit facility will be subject to a per
annum fee equal to      % of the
aggregate amount of the synthetic letter of credit facility plus
the cost of maintaining the synthetic letter of credit facility.
The letter of credit fees will be payable in arrears at the end
of each quarter and upon the termination of the revolving loan
facility, the letter of credit facility or the synthetic letter
of credit facility.
In connection with the Amended Credit Facility,
Buffets also will agree to pay administrative fees, commitment
fees and certain expenses and to provide certain indemnities,
all of which we believe are customary for financings of this
type.
Maturity
The term loan and the synthetic letter of credit
facility will mature
on                     ,
2011. The revolving facility and the letter of credit facility
will mature
on                     ,
2009.
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Mandatory Prepayments
We will be required to prepay loans under the
term loan with:
•
% of
    net cash proceeds of certain asset dispositions by us and our
    subsidiaries, subject to certain exceptions (including a
    reinvestment option),
•
% of
    net cash proceeds of issuances of debt obligations by us and our
    subsidiaries, and
•
% of
    the net cash proceeds of issuances of equity securities by us
    and our subsidiaries, in each case subject to certain
    exceptions, including all equity issued to current equity
    sponsors and their affiliates.
Mandatory prepayments will be applied on an equal
basis to the remaining amortization payments under the term loan.
Voluntary Prepayments
We will be permitted to make voluntary
prepayments on outstanding principal and reduce the commitments
under the Amended Credit Facility in whole or in part, at our
option, in minimum amounts of
$           million,
without premium or penalty, subject to reimbursement of the
lenders' redeployment costs in the case of a prepayment of
adjusted LIBOR borrowings other than at the end of an interest
period. All voluntary prepayments of the term loan will be
applied on an equal basis to the remaining amortization payments
under the term loan.
Security and Guarantees
Buffets Holdings, all of Buffets' existing
and future domestic subsidiaries and, to the extent no adverse
tax consequences to us would result, all of Buffets'
existing, and future foreign subsidiaries will unconditionally
guarantee the repayment of the Amended Credit Facility and
obligations under any hedging arrangement entered into with a
lender or an affiliate of a lender. The Amended Credit Facility
and the guarantees will be secured by substantially all of the
tangible and intangible assets of Buffets Holdings, Buffets and
each of the subsidiaries that guarantees the Amended Credit
Facility. The assets to be pledged as security will include, but
are not limited to:
•
a first-priority pledge of (1) all of
    Buffets' capital stock and (2) all the capital stock
    held by Buffets or any subsidiary that guarantees the Amended
    Credit Facility, which pledge, in the case of any first-tier
    foreign subsidiary, is limited to 65% of the voting stock of
    such foreign subsidiary to the extent the pledge of any greater
    percentage would result in adverse tax consequences to us, and
•
perfected first-priority security interests in
    substantially all tangible and intangible personal assets of
    Buffets Holdings, Buffets and each subsidiary guarantor.
Covenants
The amended credit agreement will contain
affirmative and negative covenants customary for such
financings. The amended credit agreement will include covenants
relating to limitations on:
•
dividends on, and redemptions and repurchases of,
    capital stock,
•
liens and sale-leaseback transactions,
•
loans and investments,
•
debt and hedging arrangements,
•
mergers, acquisitions and asset sales,
•
transactions with affiliates,
•
changes in business activities conducted by
    Buffets Holdings, Buffets and its subsidiaries, and
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•
amendments to any of our material agreements.
The amended credit agreement also will prohibit
Buffets from prepaying, redeeming and repurchasing certain debt.
The Amended Credit Facility generally will prohibit us and
Buffets and its subsidiaries from declaring or making, directly
or indirectly, any dividend or other distribution (whether in
cash, securities or other property) in respect of our respective
equity interests or on account of the notes, subject to certain
limited exceptions, which include, among other things, that
Buffets may, or Buffets may make distributions to us so that we
may, make dividends and distributions so long as no default then
exists under the Amended Credit Facility, Buffets Holdings does
not have any deferred and unpaid interest outstanding on the
senior subordinated notes or Buffets Holdings does not meet a
minimum consolidated coverage ratio.
Events of Default
The amended credit agreement will contain events
of default customary for such financings, including, but not
limited to:
•
nonpayment of principal, interest, fees or other
    amounts when due,
•
violation of covenants,
•
failure of any representation or warranty to be
    true in all material respects when made or deemed made,
•
cross default,
•
certain ERISA events,
•
change of control,
•
bankruptcy events,
•
material judgments, and
•
actual or asserted invalidity of the guarantees,
    security documents or the subordination provisions of
    Buffets' senior subordinated notes.
These events of default allow for some grace
periods and materiality concepts.
Senior Notes of Buffets
Concurrently with this offering, we expect
Buffets to issue
$                     million
of its      % Senior Notes
due                     ,
2014. Interest will be payable semi-annually
on                     and                     of
each year
through                     ,
2014. The payment of principal, premium and interest on
Buffets' Senior Notes will be fully and unconditionally
guaranteed, jointly and severally, by Buffets Holdings and by
Buffets' domestic subsidiaries. Buffets' Senior Notes
will be senior in right of payment to its guarantee of our
senior subordinated notes. The guarantees of Buffets'
Senior Notes will be senior in right of payment to the senior
subordinated notes and the guarantees of such notes.
Buffets' Senior Notes and the guarantees of such notes will
be effectively subordinated to all secured debt of Buffets
Holdings, Buffets and its subsidiaries, including all
obligations under the Amended Credit Facility.
Buffets' Senior Notes are expected to be
optionally redeemable after
their      anniversary of issuance at a
premium that declines ratably to zero on
the      anniversary of issuance. The
indenture governing Buffets' Senior Notes is also expected
to require Buffets to offer to repurchase all or a portion of
its Senior Notes upon a change of control or following certain
asset sales.
The indenture governing Buffets' Senior
Notes is expected to contain covenants limiting Buffets'
ability, and the ability of Buffets Holdings and its
subsidiaries, among other things, to:
•
incur additional indebtedness,
•
make restricted payments,
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•
create restrictions on the payment of dividends,
•
sell assets or capital stock of subsidiaries,
•
engage in transactions with affiliates,
•
sell or issue capital stock of subsidiaries,
•
incur liens,
•
engage in sale/leaseback transactions, and
•
consolidate, merge or transfer assets.
11 1/4% Senior Subordinated
Notes
On June 28, 2002, Buffets issued
11 1/4% senior subordinated notes in the principal
amount of $230.0 million due July 15, 2010.
Buffets' 11 1/4% Notes were issued at a price
equal to 96.181% of the principal amount, resulting in an
effective yield of 12% to the initial principal amount. Interest
is payable semi-annually on January 15 and July 15 of
each year through July 15, 2010. The payment of principal,
premium and interest on the senior subordinated notes is fully
and unconditionally guaranteed, jointly and severally, by
Buffets Holdings and by Buffets' wholly owned subsidiaries,
namely Distinctive Dining, Inc., HomeTown Buffet, Inc., OCB
Purchasing Co., OCB Restaurant Co., Restaurant Innovations,
Inc., Tahoe Joe's Inc., Buffets Leasing Company, LLC,
HomeTown Leasing Company, LLC, OCB Leasing Company, LLC and
Tahoe Joe's Leasing Company, LLC. Buffets'
11 1/4% Notes are subordinated to all senior debt of
Buffets and the guarantors.
In connection with this offering, Buffets will
conduct a tender offer and consent solicitation, whereby Buffets
will offer to repurchase its 11 1/4% Notes at a cash
purchase price, together with accrued interest, and the holders
of Buffets' 11 1/4% Notes will be asked to
consent to a supplemental indenture which will remove all
restrictive covenants relating to Buffets'
11 1/4% Notes. The offering and the tender offer for
the 11 1/4% Notes are conditional upon each other.
13 7/8% Notes
On May 18, 2004, we issued $132 million
aggregate principal amount at maturity of our
13 7/8% senior discount notes due December 15,
2010. Our 13 7/8% Notes were issued at a discount to
their aggregate principal amount at maturity. Prior to
July 31, 2008, interest will accrue on our
13 7/8% Notes in the form of an increase in the
accreted value of those notes. The accreted value of each note
will increase until July 31, 2008 at a rate of
13 7/8% per annum. After this date, cash interest on
the notes will accrue and be payable on January 31 and
July 31 of each year at a rate of 13 7/8% per
annum. If we fail to meet certain leverage ratio tests on our
about July 31, 2006 or July 31, 2008, additional
interest will accrue on the notes from that date at a rate of
1% per annum, up to a maximum of 2% per annum. Our
13 7/8% Notes are subordinated to all secured debt of
Buffets Holdings and are structurally subordinated to all debt
of Buffets Holdings' subsidiaries.
In connection with this offering, we will conduct
a tender offer and consent solicitation, whereby we will offer
to repurchase our 13 7/8% Notes at a cash purchase
price of      %, together with accrued
and unpaid interest, and the holders of our
13 7/8% Notes will be asked to consent to a
supplemental indenture which will remove all restrictive
covenants relating to our 13 7/8% Notes. To the extent
that any of our 13 7/8% Notes remain outstanding, we expect
to redeem such 13 7/8% Notes after the tender offer
with the net cash proceeds of this offering at a redemption
price of      %.
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DESCRIPTION OF IDSs
General
We are
offering                      IDSs,
including                     to
the public. Each IDS initially represents:
•
one share of our Class A common
    stock; and
•
a      % senior
    subordinated note with a
    $                    principal
    amount.
The ratio of Class A common stock to
principal amount of senior subordinated notes represented by an
IDS is subject to change in the event of a stock split,
combination or reclassification of our common stock. For
example, if we elect to effect a two-for-one stock split, from
and after the effective date of the stock split, each IDS will
represent two shares of Class A common stock and the same
principal amount of senior subordinated notes as it previously
represented. Likewise, if we effect a combination or
reclassification of our Class A common stock, each IDS will
thereafter represent the appropriate number of shares of
Class A common stock on a combined or reclassified basis,
as applicable, and the same principal amount of senior
subordinated notes as it previously represented. Promptly
following the occurrence of any such event, we will file with
the SEC a Current Report on Form 8-K or any other
applicable form, disclosing the changes in the ratio of
Class A common stock to principal amount of senior
subordinated notes as a result of such event.
Holders of IDSs are at all times the beneficial
owners of the Class A common stock and senior subordinated
notes represented by such IDSs and, through their broker or
other financial institution and DTC, will each have exactly the
same rights, privileges and preferences, including voting
rights, rights to receive distributions, rights and preferences
in the event of a default under the indenture governing the
senior subordinated notes, ranking upon bankruptcy and rights to
receive communications and notices as a direct holder of
Class A common stock and senior subordinated notes, as
applicable.
The IDSs will be issued in book-entry form only.
As discussed below under "— Book-Entry Settlement
and Clearance," Cede & Co., a nominee of DTC will
be the sole registered holder of the IDSs. That means you will
not be a registered holder of IDSs, and you will not receive a
certificate for your IDSs. However, a holder of common stock,
including a holder of an IDS that requests that IDSs be
separated, has a legal right under Delaware law to request that
we issue a certificate for such Class A common stock. Until such
request is made, you must rely on your broker or other financial
institution that will maintain your book-entry position to
receive the benefits and exercise the rights of a holder of IDSs
that are described below. You should consult with your broker or
financial institution to find out what those procedures are.
All IDS issuances will be registered under the
Securities Act of 1933.
Voluntary Separation and Combination
Holders of IDSs, whether purchased in this
offering or in a subsequent offering of IDSs of the same series
may, at any time after the earlier of 45 days from the date
of the closing of this offering or the occurrence of a change of
control, through their broker or other financial institution,
separate the IDSs into the shares of our Class A common
stock and senior subordinated notes represented thereby. Unless
the IDSs have been previously automatically separated as a
result of redemption or maturity or otherwise, any holder of
shares of our Class A common stock and senior subordinated
notes may, at any time after the senior subordinated notes
become separable by the holders, through his or her broker or
other financial institution, combine the applicable number of
shares of Class A common stock and senior subordinated
notes to form IDSs.
We currently do not anticipate that our Class A
common stock or our senior subordinated notes will trade on any
exchange. We will use commercially reasonable efforts to list
our common stock for separate trading on
the        , if a sufficient
number of shares of our Class A common stock are held
separately (not represented by IDSs) to meet the minimum
requirements for separate trading on
the                     for
at
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least 30 consecutive trading days (assuming
that we otherwise continue to satisfy all other applicable
listing requirements of such stock exchange at that time).
Automatic Separation
Upon the occurrence of any of the following, all
outstanding IDSs will automatically separate into the shares of
Class A common stock and senior subordinated notes
represented thereby:
•
a payment default on the senior subordinated
    notes continues for 90 days (without cure),
•
exercise by us of our right to redeem all or a
    portion of the senior subordinated notes, which may be
    represented by IDSs at the time of such redemption,
•
the date on which principal on the senior
    subordinated notes becomes due and payable, whether at the
    stated maturity date or upon acceleration thereof, or
•
if the Depositary Trust Company, or DTC, no
    longer makes the IDS securities eligible for deposit or ceases
    to be a registered clearing agency under the Securities Exchange
    Act of 1934 and we are unable to find a successor depository.
Following the automatic separation of the IDSs
shares of Class A common stock and senior subordinated
notes may no longer be combined to form IDSs.
Upon an automatic separation due to the exercise
by us of our right to redeem the senior subordinated notes in
part, subject to certain conditions, the holders of Class B
common stock will receive Class A common stock and senior
subordinated notes in exchange for their Class B common
stock.
Book-Entry Settlement and Clearance
DTC will act as securities depository for the
IDSs, the senior subordinated notes and the shares of
Class A common stock represented by the IDSs (collectively,
the "securities"). The transfer agent(s) for the
Class A common stock and the senior subordinated notes
represented by the IDSs (collectively, the
"components") will act as custodian for the components
on behalf of the holders of the IDSs. The transfer agent for the
IDSs will act as custodians for the IDSs on behalf of holders of
IDSs. The components and the IDSs will be issued in
fully-registered form and will be represented by one or more
global notes and global stock certificates. The IDSs will be
registered in the name of DTC's nominee Cede & Co.
and the components will be registered in the name of the
custodian for the holders of the IDSs.
Book-Entry
Procedures.
If you intend to
purchase IDSs in the manner provided by this prospectus you
must do so through the DTC system or through direct and indirect
participants. The participant that you purchase through will
receive a credit for the applicable security on DTC's
records. The ownership interest of each actual purchaser of the
applicable security, who we refer to as a "beneficial
owner," is to be recorded on the participant's
records. All interests in the securities will be subject to the
operations and procedures of DTC. The operations and procedures
of DTC may be changed at any time. We are not responsible for
DTC's rules, procedures and operations or for the
performance by DTC or its participants or indirect participants
of their respective obligations under the rules and procedures
governing their operations. However, we will take responsibility
for actions taken by DTC in accordance with instructions
provided by us.
DTC has advised us as
follows:
DTC is a limited purpose
trust company organized under the laws of the State of New York,
a "banking organization" within the meaning of the New
York State Banking Law, a member of the Federal Reserve System,
a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "clearing agency"
registered under Section 17A of the Securities Exchange Act
of 1934. DTC was created to hold securities for its participants
and to facilitate the clearance and settlement of securities
transactions between its participants through electronic
book-entry changes to the accounts of its participants.
DTC's participants include securities brokers and dealers,
including the underwriters, banks and trust companies, clearing
corporations and other organizations. Indirect access to
DTC's system is also available to others such as banks,
brokers, dealers and trust
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companies. These indirect participants clear
through or maintain a custodial relationship with a DTC
participant, either directly or indirectly. The rules that apply
to DTC and its participants are on file with the SEC.
To facilitate subsequent transfers, all IDSs
deposited by direct participants with DTC are registered in the
name of DTC's nominee, Cede & Co. The components
will be registered in the name of the custodian for the holders
of IDSs. The deposit of IDSs with DTC and their registration in
the name of Cede & Co. or the custodians effect no
change in beneficial ownership. DTC has no knowledge of the
actual beneficial owners of the securities. DTC's records
reflect only the identity of the direct participants to whose
accounts such securities are credited, which may or may not be
the beneficial owners. The participants and custodians will
remain responsible for keeping account of their holdings on
behalf of their customers.
Transfers of ownership interests in the
securities are to be accomplished by entries made on the books
of participants acting on behalf of beneficial owners.
Beneficial owners will not receive certificates representing
their ownership interests in the applicable security except in
the event that use of the book-entry system for the securities
is discontinued.
Separation and
Combination.
Holders of IDSs may, at
any time after 45 days from the date of original issuance,
through their broker or other financial institution, separate
their IDSs into the shares of Class A common stock and
senior subordinated notes represented thereby. Similarly, any
holder of shares of our Class A common stock and senior
subordinated notes may, at any time after 45 days from the
date of original issuance, through their broker or other
financial institution, combine the applicable number of shares
of Class A common stock and senior subordinated notes to
form IDSs.
In addition, all outstanding IDSs will be
automatically separated into the shares of Class A common
stock and senior subordinated notes represented thereby upon the
occurrence of the following:
•
a payment default on the senior subordinated
    notes continues for 90 days (without cure),
•
exercise by us of our right to redeem all or a
    portion of the senior subordinated notes, which may be
    represented by IDSs at the time of such redemption,
•
the date on which principal on the senior
    subordinated notes becomes due and payable, whether at the
    stated maturity or upon acceleration, or
•
if DTC no longer makes the IDSs eligible for
    deposit or ceases to be a registered clearing agency under the
    Securities Exchange Act of 1934 and we are unable to find a
    successor depositary.
Following the automatic separation of the IDSs,
shares of Class A common stock and senior subordinated
notes may no longer be combined to form IDSs.
Upon an automatic separation due to the exercise
by us of our right to redeem the senior subordinated notes in
part, subject to certain conditions, the holders of Class B
common stock will have the option, subject to the conditions set
forth in the indenture and the investor rights agreement, to
convert the Class B common stock to Class A common
stock and senior subordinated notes.
Any voluntary separation of IDSs and any
subsequent voluntary recombination of IDSs from components will
be accomplished by entries made by DTC participants acting on
behalf of beneficial owners, provided that DTC receives such
instructions by 3:00 p.m., New York time, on that trading
day. Any instructions received after 3:00 p.m., will be
effective the next business day, if permitted by the custodian
or participant delivering the instructions.
Voluntary separation or recombination of IDSs
will be accomplished via the use of DTC's Deposit/
Withdrawal at Custodian, or DWAC, transaction system.
Participants or custodians seeking to separate or recombine IDSs
will be required to enter a DWAC transaction in each of the IDS
and its underlying components.
Separation will require submission of a
Withdrawal-DWAC in the IDS in conjunction with a Deposit-DWAC in
each of the underlying components. Upon receipt of DWAC
instructions in good order, the
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transfer agent for the IDSs and its components
will cause the IDSs to be debited from Cede &
Co.'s account in the IDS and credited to a
separation/recombination reserve account in the IDS, and will
cause an appropriate number of the components to be debited from
the custodian's account in the components and credited to
Cede & Co.'s account.
Recombination of IDSs from underlying components
will require submission of a Deposit-DWAC in the IDS in
conjunction with a Withdrawal-DWAC in each of the underlying
components. Upon receipt of DWAC instructions in good order, the
transfer agent for the IDS and its components will cause an
appropriate number of components to be debited from
Cede & Co.'s account in the components and
credited to the account of the custodian, and will cause an
appropriate number of IDSs to be debited from the
separation/re-combination reserve account and credited to
Cede & Co.'s account in the IDS.
There may be certain transactional fees imposed
upon you by brokers and other financial intermediaries in
connection with separation or combination of IDSs and you are
urged to consult your broker regarding such transactional fees.
Any transactional fees charged by the transfer agent in
connection with separation and or recombination of IDSs will be
borne by us. We have been informed by DTC that the current fee
per transaction per participant account for any separation or
recombination is $4.50. However, DTC's fee is subject to
periodic changes.
Conveyance of notices and other communications by
DTC to direct participants, by direct participants to indirect
participants, and by participants to beneficial owners will be
governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
Neither DTC nor Cede & Co. will consent
or vote with respect to the IDSs or the underlying components
and the custodian will not consent or vote with respect to the
Class A common stock and senior subordinated notes. Under
its usual procedures, DTC would mail an omnibus proxy to
participants as soon as possible after the record date. The
omnibus proxy assigns Cede & Co.'s consenting or
voting rights to those direct participants to whose accounts the
securities are credited on the record date.
We, indirectly through the trustee, will make any
payments on the senior subordinated notes to DTC and we will
make all payments on the Class A common stock to the
transfer agent for the benefit of the record holders. The
transfer agent will deliver these payments to DTC. DTC's
practice is to credit direct participants' accounts on the
payment date in accordance with their respective holdings shown
on DTC's records unless DTC has reason to believe that it
will not receive payment on the payment date. Payments by
participants to beneficial owners will be governed by standing
instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or
registered in "street name," and will be the
responsibility of such participant and not of DTC, us or the
transfer agent and registrar, subject to any statutory or
regulatory requirements as may be in effect from time to time.
We will be responsible for the payment,
indirectly through the trustee, of all amounts to DTC and the
transfer agent. The transfer agent will be responsible for the
disbursement of those payments to DTC. DTC will be responsible
for the disbursement of those payments to its participants, and
the participants will be responsible for disbursements of those
payments to beneficial owners.
DTC may discontinue providing its service as
securities depository with respect to the IDSs, the shares of
our Class A common stock or our senior subordinated notes
at any time by giving reasonable notice to us or the transfer
agent and registrar. If DTC discontinues providing its service
as securities depository with respect to the IDSs and we are
unable to obtain a successor securities depository, you will
automatically take a position in the component securities. If
DTC discontinues providing its service as securities depository
with respect to the shares of our Class A common stock
and/or our senior subordinated notes and we are unable to obtain
a successor securities depository, we will print and deliver to
you certificates for the securities that have been discontinued
and you will automatically take a position in any securities
still subject to the depository arrangement.
Also, in case we decide to discontinue use of the
system of book-entry transfers through DTC (or a successor
securities depository) we will print and deliver to you
certificates for the various certificates of Class A common
stock and senior subordinated notes you may own.
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The information in this section concerning DTC
and DTC's book-entry system has been obtained from sources
that we believe to be reliable, including DTC.
Except for actions taken by DTC in accordance
with our instructions, neither we nor the trustee nor the
underwriters will have any responsibility or obligation to
participants, or the persons for whom they act as nominees, with
respect to:
•
the accuracy of the records of DTC, its nominee
    or any participant, with respect to any record of beneficial
    ownership interest in the securities on DTC's books, or
•
any payments, or the providing of notice, to
    participants or beneficial owners.
Procedures Relating to Subsequent
Issuances.
The indenture governing our
senior subordinated notes will provide that, in the event there
is a subsequent issuance of senior subordinated notes having
terms that are otherwise identical to the senior subordinated
notes (except for the issuance date), including any issuance of
IDSs in exchange for shares of Class B common stock, but
issued with OID, each holder of senior subordinated notes or
IDSs (as the case may be) agrees that, upon such issuance and
any issuance of senior subordinated notes thereafter, a portion
of such holder's senior subordinated notes, whether held as
part of IDSs or separately, will be automatically exchanged for
a portion of the senior subordinated notes acquired by the
holders of such subsequently issued senior subordinated notes
and the records of any record holders of senior subordinated
notes will be revised to reflect such exchanges. Consequently,
following each such subsequent issuance and exchange, without
any action by such holder, each holder of senior subordinated
notes or IDSs (as the case may be) will own senior subordinated
notes of each separate issuance in the same proportion as each
other holder. However, the aggregate principal amount of senior
subordinated notes owned by each holder will not change as a
result of such subsequent issuance and exchange. Immediately
following any exchange resulting from a subsequent offering, a
new CUSIP number will be assigned to represent an inseparable
unit consisting of the senior subordinated notes outstanding
prior to the subsequent issuance and the senior subordinated
notes issued in the subsequent issuance. Accordingly, the senior
subordinated notes issued in the original offering will not be
able to be separated from the senior subordinated notes issued
in any subsequent offering. In addition, immediately following
any exchange resulting from a subsequent offering, new IDSs will
be issued in exchange for the existing IDSs which will consist
of the inseparable unit described above representing the
proportionate principal amounts of each issuance of senior
subordinated notes (but with the same aggregate principal amount
as the senior subordinated notes (or inseparable unit)
represented by the IDSs immediately prior to such subsequent
issuance and exchange) and the Class A common stock. All
accounts of DTC participants or custodians with a position in
the securities will be automatically revised to reflect the new
CUSIP numbers. In the event of any voluntary or automatic
separation of IDSs following any such automatic exchange,
holders will receive the then existing components which are the
Class A common stock and the inseparable notes unit. An
automatic exchange of the senior subordinated notes described
above should not impair the rights any holder would otherwise
have to assert a claim under applicable securities laws against
us or the underwriters with respect to the full amount of the
senior subordinated notes purchased by such holder, including
senior subordinated notes purchased in this offering and senior
subordinated notes received by such holder in an automatic
exchange. However, if such notes are issued with OID, holders of
such notes may not be able to recover the portion of their
principal amount treated as unaccrued OID in the event of an
acceleration of the notes or a bankruptcy of the issuer prior to
the maturity of the notes. See "Risk Factors —
Subsequent issuances of senior subordinated notes may cause you
to recognize OID and may be treated as a taxable exchange by
you." Promptly following any subsequent issuance, we will
file with the SEC a Current Report on Form 8-K or any other
applicable form, disclosing the changes, if any, to the OID
attributable to your senior subordinated notes as a result of
such subsequent issuance.
IDS Transfer Agent
is
the IDS transfer agent.
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DESCRIPTION OF CAPITAL STOCK
Upon the consummation of the Transactions, our
authorized capital stock will consist
of                      shares
of Class A common
stock,                     shares
of Class B common
stock,                     shares
of Class C common stock
and                      shares
of preferred stock. After this offering, we will have
approximately                      shares
of Class A common stock
and                      shares
of Class B common stock outstanding. No shares of
Class C common stock and no shares of preferred stock will
be outstanding upon the closing of this offering.
Common Stock
Voting
The holders of our Class A common stock are
entitled to one vote per share on all matters submitted to a
vote of stockholders. Shares of our Class A common stock
and shares of our Class B common stock are entitled to the
same voting rights per share and vote together as a class on all
matters with respect to which are entitled to vote. Our amended
and restated certificate of incorporation will provide that for
such time as Caxton-Iseman Capital together with its affiliates
and related parties beneficially own at least 10% or 5% of our
equity, it will be entitled to nominate two of our directors or
one director, respectively. To the extent that the board does
not solicit proxies for the election of Caxton-Iseman Capital
nominees as directors, Caxton-Iseman Capital will be entitled to
solicit proxies for the election of such nominees at our
expense. In addition, our amended and restated certificate of
incorporation prohibits any eligibility requirement for
directors, unless (i) required by applicable law, (ii)
established in our certificate of incorporation, or (iii)
adopted by our board of directors in the by-laws with respect to
an age qualification, or with respect to a continuing service
obligation for employee directors upon their ceasing employment
with us.
No Cumulative Voting Rights
The common stock does not have cumulative voting
rights, which means that the holders of a majority of the
outstanding common stock voting for the election of directors
can elect all directors then being elected.
Rights to Dividends and on Liquidation,
    Dissolution or Winding Up
The holders of our common stock are entitled to
receive dividends as they may be lawfully declared from time to
time by the board of directors of our company, subject to any
preferential rights of holders of any outstanding shares of
preferred stock. In the event of any liquidation, dissolution or
winding up of our company, common stockholders are entitled to
share ratably in our assets available for distribution to the
stockholders, subject to the prior rights of holders of any
outstanding preferred stock.
Upon the completion of this offering, our board
of directors will adopt a dividend policy with respect to our
Class A and Class B common stock pursuant to which
cash generated by our company in excess of operating needs and
reserves, interest and principal payments on indebtedness, and
capital expenditures sufficient to maintain our properties and
other assets would in general be distributed as regular
quarterly cash dividends to the holders of our Class A and
Class B common stock and may not be retained by us as cash
on our balance sheet. This policy reflects a basic judgment that
the holders of our common stock would be better served if we
distributed our available cash (as defined below) to them
instead of retaining it in our business. However:
•
there is no legal or contractual requirement that
    we pay the dividends, and the dividends are neither mandatory
    nor guaranteed;
•
our dividend policy can be modified or revoked at
    any time;
•
our board of directors is free to make exceptions
    to the dividend policy, from time to time and at their sole
    discretion;
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•
the payment of dividends is subject to
    limitations and restrictions under:
•
the indenture governing our senior subordinated
    notes,
•
the indenture governing Buffets' Senior
    Notes,
•
the terms of the Amended Credit Facility, and
•
the terms of any other then outstanding
    indebtedness of ours; and
•
the payment of dividends is subject to
    limitations and restrictions under state law.
We intend to pay dividends quarterly on the
15
th
day of February, May, August and November of
each year. We intend to make our first dividend payment
on                     ,
2004 to holders of record as of the first day of such month.
Such dividend payment will include a partial quarterly dividend
payment for the period commencing on the closing of this
offering and ending
on                     ,
and a regular quarterly dividend payment for the period
commencing                     and
ending
on                     .
Under our dividend policy, we intend to pay
quarterly dividends of:
•
$               per
    share of Class A common stock, and
•
$               per
    share of Class B common stock.
The dividends on the Class B common stock
are intended to replicate the yield on the IDS units. Our
amended and restated certificate of incorporation will provide
that in the event we declare and pay dividends on our
Class A common stock, we must declare and pay dividends on
our Class B common stock at a level that
is                     times
the dividends paid in respect of each share of Class A
common stock.
Assuming we pay quarterly dividends as intended
under our dividend policy, this would equate to
$          per
share of Class A common stock and
$           per
share of Class B common stock of dividends for the period
beginning                     through                     ,
the first four full quarterly dividend payment periods following
the closing of this offering. However, notwithstanding the
dividend policy, the amount of dividends, if any, for each
quarterly dividend payment date, including the dividend payment
date, will be determined by our board of directors on a
quarterly basis after taking into account various factors,
including our results of operations, cash requirements,
financial condition, the dividend restrictions set forth in the
indentures governing our senior subordinated notes, the
indenture governing Buffets' Senior Notes and the terms of
the Amended Credit Facility, provisions of applicable law and
other factors that our board of directors may deem relevant.
Dividend payments are not mandatory or guaranteed
and holders of our common stock do not have any legal right to
receive, or require us to pay, dividends. Our board of directors
may, in its sole discretion, amend or repeal this dividend
policy with respect to the Class A and Class B common
stock at any time. Furthermore, our board of directors may
decrease the level of dividends for the Class A and
Class B common stock below the intended dividend rate set
forth above or discontinue entirely the payment of dividends.
See "Dividend Policy and Restrictions" and "Risk
Factors — Risks Relating to the IDSs, the Shares of
Class A Common Stock and the Senior Subordinated Notes
Represented by the IDSs, and the Senior Subordinated Notes
Offered Separately — You may not receive the level of
dividends provided for in our dividend policy, which our board
of directors is expected to adopt upon the closing of this
offering, or any dividends at all."
Preemptive and Other Subscription
    Rights
Common stockholders do not have preemptive,
subscription or redemption rights, and are not subject to
further calls or assessments.
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Additional Issuance of Our Authorized
    Common Stock
Additional shares of our authorized common stock
may be issued, as determined by the board of directors of our
company from time to time, without approval of holders of our
common stock, except as may be required by applicable law or the
rules of any stock exchange or automated quotation system on
which our securities may be listed or traded. However, according
to our by-laws we may not issue any shares of Class A
common stock unless:
•
they are issued as part of an IDS the issuance of
    which has been registered with the SEC;
•
any IDS that may result from the combination of
    the shares of Class A common stock and our senior
    subordinated notes have been registered with the SEC; or
•
no IDSs are currently outstanding.
Combination to Form IDSs
Any holder of shares of Class A common stock
and senior subordinated notes may, at any time, through his or
her broker or other financial institution, combine the
applicable number of shares of Class A common stock and
principal amount of senior subordinated notes to form IDSs. See
"Description of IDSs — Voluntary Separation and
Combination."
The holders of shares of Class B common
stock may not combine their shares of Class B common stock
with senior subordinated notes to form IDSs.
Class B Common Stock
In addition to the terms applicable to the
Class A and Class B common stock described under the
heading "— Common Stock," the Class B
common stock has the following features:
Conversion.
Following the consummation of the Transactions and through the
maturity date of the senior subordinated notes, and subject to
the lock-up period, each share of Class B common stock will
be exchangeable into IDSs at a fixed rate
of                      shares
of Class B common stock for one IDS. If the IDSs have
automatically separated or if the shares of our Class A
common stock are listed for separate trading on a stock
exchange, the holders of the Class B common stock may
convert each share of Class B common stock
into                      shares
of Class A common stock and
$          of
senior subordinated notes. All exchanges are subject to
compliance with the following requirements:
•
the exchange must comply with applicable laws,
    including, without limitation, securities laws;
•
the exchange must occur pursuant to an effective
    registration statement in the United States;
•
the Board of Directors must determine in good
    faith that the additional senior subordinated notes issued in
    this conversion should be treated as debt for United States
    federal income tax purposes;
•
such exchange must not conflict with or cause a
    default under any material financing agreement;
•
such exchange must not cause a mandatory
    suspension of dividends or deferral of interest under any
    material financing agreement as of the measurement date
    immediately following the proposed exchange date; and
•
no event of default or deferral of interest has
    occurred and is continuing under the indenture governing the
    senior subordinated notes and all deferred interest, if any,
    together with interest accrued thereon has been paid in full.
In the event that the IDSs are automatically
separated as a result of the partial redemption of any senior
subordinated notes, at such time we will amend our by-laws to
delete the restriction that we may only issue shares of
Class A common stock in offerings registered with the
Securities and Exchange Commission and each share of
Class B common stock will automatically be exchanged
for                     share
of Class A common stock and
$          of
senior subordinated notes.
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Subject to limited exceptions, until the second
anniversary of the consummation of this offering, the investor
rights agreement will restrict the holders of our Class B
common stock from exercising their exchange rights if, following
the exchange, the holders of our Class B common stock would
hold in the aggregate less than 10% of the outstanding shares of
our capital stock.
Class C Common Stock
The following summary is qualified in its
entirety by the provisions of our amended and restated
certificate of incorporation and by-laws and the applicable
provisions of the Delaware General Corporation Law.
Dividends.
Holders
of shares of our Class C common stock will be entitled to
receive such dividends and other distributions in cash, stock or
property of ours as may be declared by our board of directors
from time to time out of our assets or funds legally available
for dividends or other distributions.
Rights Upon
Liquidation.
In the event of our
voluntary or involuntary liquidation, dissolution or winding up,
holders of shares of our Class A, B and C common stock will
be entitled to share equally (as if there were only one class of
common equity) in our assets available for distribution to the
holders of shares of our common stock.
Voting and Preemptive
Rights.
Shares of our Class C
common stock will carry one vote per share and will vote as a
class together with the holders of Class A common stock,
Class B common stock and preferred shares with respect to
which stockholder are entitled to vote.
Preferred Stock
Our preferred stock may be issued from time to
time in one or more series. Our board is authorized to fix the
dividend rights, dividend rates, any conversion rights or right
of exchange, any voting rights, rights and terms of redemption,
the redemption price or prices, the payments in the event of
liquidation, and any other rights, preferences, privileges, and
restrictions of any series of preferred stock and the number of
shares constituting such series and their designation. We have
no present plans to issue any shares of preferred stock other
than in connection with the rights distribution described below.
Depending upon the rights of such preferred
stock, the issuance of preferred stock could have an adverse
effect on holders of our common stock by delaying or preventing
a change in control, adversely affecting the voting power of the
holders of common stock, including the loss of voting control to
others, making removal of the present management more difficult,
or resulting in restrictions upon the payment of dividends and
other distributions to the holders of common stock. These
provisions could limit the price that investors might be willing
to pay in the future for shares of our common stock.
Certain Certificate of Incorporation, By-Law,
Investor Rights Agreement and Statutory Provisions
The provisions of our amended and restated
certificate of incorporation and by-laws, of our investor rights
agreement and of the Delaware General Corporation Law summarized
below may have an anti-takeover effect, may delay, defer or
prevent a tender offer or takeover attempt that you might
consider in your best interest, including an attempt that might
result in your receipt of a premium over the market price for
your shares, and may make more difficult the removal of our
incumbent directors.
Directors' Liability; Indemnification
    of Directors and Officers
Our amended and restated certificate of
incorporation provides that a director will not be personally
liable to us or our stockholders for monetary damages for breach
of fiduciary duty as a director, except:
•
for any breach of the duty of loyalty;
•
for acts or omissions not in good faith or which
    involve intentional misconduct or knowing violations of law;
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•
for liability under Section 174 of the
    Delaware General Corporation Law (relating to unlawful
    dividends, stock repurchases, or stock redemptions); or
•
for any transaction from which the director
    derived any improper personal benefit.
This provision does not limit or eliminate our
rights or those of any stockholder to seek non-monetary relief
such as an injunction or rescission in the event of a breach of
a director's duty of care. The provisions will not alter
the liability of directors under federal securities laws. In
addition, our amended and restated certificate of incorporation
and by-laws provide that we indemnify each director and the
officers, employees, and agents determined by our board to the
fullest extent provided by the laws of the State of Delaware.
Special Meetings of
    Stockholders
Our amended and restated by-laws provide that
special meetings of stockholders may be called only by the
chairman or by a majority of the members of our board.
Stockholders are not permitted to call a special meeting of
stockholders, to require that the chairman call such a special
meeting, or to require that our board request the calling of a
special meeting of stockholders.
Stockholder Action; Advance Notice
    Requirements For Stockholder Proposals and Director
    Nominations
Our amended and restated certificate of
incorporation provides that stockholders may not take action by
written consent, but may only take action at duly called annual
or special meetings. In addition, our by-laws establish advance
notice procedures for:
•
stockholders to nominate candidates for election
    as a director; and
•
stockholders to propose topics at
    stockholders' meetings.
Stockholders must notify our corporate secretary
in writing prior to the meeting at which the matters are to be
acted upon or directors are to be elected. The notice must
contain the information specified in our by-laws. To be timely,
the notice must be received at our corporate headquarters not
less than 90 days nor more than 120 days prior to the
first anniversary of the date of the prior year's annual
meeting of stockholders. If the annual meeting is advanced by
more than 30 days, or delayed by more than 70 days,
from the anniversary of the preceding year's annual
meeting, or if no annual meeting was held in the preceding year
or for the first annual meeting following this offering, notice
by the stockholder to be timely must be received not earlier
than the 120th day prior to the annual meeting and not later
than the later of the 90th day prior to the annual meeting or
the 10th day following the day on which we notify stockholders
of the date of the annual meeting, either by mail or other
public disclosure. In the case of a special meeting of
stockholders called to elect directors, the stockholder notice
must be received not earlier than 120 days prior to the
special meeting and not later than the later of the 90th day
prior to the special meeting or the 10th day following the day
on which we notify stockholders of the date of the special
meeting, either by mail or other public disclosure. These
provisions may preclude some stockholders from bringing matters
before the stockholders at an annual or special meeting or from
nominating candidates for director at an annual or special
meeting.
Election and Removal of
    Directors
Our board is divided into three classes. The
directors in each class will serve for a three-year term, one
class being elected each year by our stockholders. This system
of electing and removing directors may discourage a third party
from making a tender offer or otherwise attempting to obtain
control of us because it generally makes it more difficult for
stockholders to replace a majority of our directors.
Our amended and restated certificate of
incorporation and by-laws do not provide for cumulative voting
in the election of directors. Our directors may only be removed
for cause.
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Anti-Takeover Provisions of Delaware
    Law
We are a Delaware corporation subject to
Section 203 of the Delaware General Corporation Law. In
general, Section 203 prohibits a publicly held Delaware
corporation from engaging in a "business combination"
with an "interested stockholder" for a three-year
period following the time that this stockholder becomes an
interested stockholder, unless the business combination is
approved in a prescribed manner. A "business
combination" includes a merger, asset sale or other
transaction resulting in a financial benefit to the interested
stockholder. An "interested stockholder" is a person
who, together with affiliates and associates, owns (or, in some
cases, within three years prior, did own) 15% or more of the
corporation's voting stock. Under Section 203, a
business combination between the corporation and an interested
stockholder is prohibited unless it satisfies one of the
following conditions:
•
the board of directors must have previously
    approved either the business combination or the transaction
    which resulted in the stockholder becoming an interested
    stockholder;
•
upon consummation of the transaction which
    resulted in the stockholder becoming an interested stockholder,
    the interested stockholder owned at least 85% of the voting
    stock of the corporation outstanding at the time the transaction
    commenced (excluding, for purposes of determining the number of
    our shares outstanding, shares owned by (a) persons who are
    directors and also officers and (b) employee stock plans,
    in some instances); or
•
the business combination is approved by the board
    of directors of the corporation and authorized at an annual or
    special meeting of the stockholders by the affirmative vote of
    at least two-thirds of the outstanding voting stock which is not
    owned by the interested stockholder.
The existence of this provision may have an
anti-takeover effect with respect to transactions not approved
in advance by our board of directors, including discouraging
takeover attempts that might result in a premium over the market
price for the shares of our common stock.
Amendment to Certain Certificate of
Incorporation and By-Law Provisions
Our amended and restated certificate of
incorporation provides that amendments to certain provisions of
the certificate will require the affirmative vote of the holders
of at least 66 2/3% of the outstanding shares of our voting
stock, namely:
•
the provisions requiring a 66 2/3%
    stockholder vote for removal of directors;
•
the provisions requiring a 66 2/3%
    stockholder vote for the amendment, repeal or adoption of our
    by-law provisions (described below);
•
the provisions requiring a 66 2/3%
    stockholder vote for the amendment of certain provisions of our
    certificate of incorporation; and
•
the provisions prohibiting stockholder action by
    written consent except under certain circumstances.
In addition, our amended and restated certificate
of incorporation and by-laws provide that our by-laws are
subject to adoption, amendment or repeal either by a majority of
the members of our board or the affirmative vote of the holders
of not less than 66 2/3% of the outstanding shares of our
voting stock.
The 66 2/3% vote will allow the holders of a
minority of our voting securities to prevent the holders of a
majority or more of our voting securities from amending certain
provisions of our amended and restated certificate of
incorporation and our by-laws.
Listing
Our shares of Class A common stock will not
be listed for separate trading on
the                     until
a sufficient number of shares are held separately and not in the
form of IDSs as may be necessary to satisfy any applicable
listing requirements. If more than such required number of our
outstanding shares of Class A common stock is no longer
held in the form of IDSs for a period of 30 consecutive trading
days,
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we will apply to list the shares of our
Class A common stock for separate trading on
the                     .
We will not list our shares of Class B common stock for
trading on any exchange.
Transfer Agent and Registrar
The transfer agent and registrar for the common
stock
is                     .
Its telephone number
is                     .
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DESCRIPTION OF SENIOR SUBORDINATED
NOTES
The following is a description of the terms of
the indenture under which our senior subordinated notes (the
"Notes") will be issued, a copy of the form of which
has been filed with the Commission as an exhibit to the
registration statement of which this prospectus is a part.
This description is subject to, and is qualified
in its entirety by reference to, all the provisions of the
indenture, including the definitions of certain terms therein
and those terms made a part thereof by the Trust Indenture Act
of 1939, as amended. The material terms used in this description
are defined under the subheading
"— Definitions." In this description, the
word "Company" refers only to Buffets Holdings, Inc.
and not to any of its subsidiaries.
The following description is a summary of the
material provisions of the Indenture and the Notes. It does not
purport to be complete and we urge you to read the Indenture, a
copy of which will be available upon request from the Company.
Terms of the Notes
Maturity
The Notes will be unsecured senior subordinated
obligations of the Company and will mature
on                     ,
2019.
Within 30 days prior to the maturity or
redemption of the Notes, the Company will use its commercially
reasonable efforts to list or quote the outstanding shares of
its common stock on the securities exchange(s) or automated
securities quotation system(s), if any, on which the IDSs then
are listed or quoted, in addition to any other securities
exchange on which the common stock is then listed.
Interest
The Notes will bear interest at a rate per year
of      %
from                     ,
2004, or from the most recent date to which interest has been
paid or provided for, payable quarterly in arrears on the 15th
day of February, May, August and November of each year, to
Holders of record at the close of business on
the                     th
day of each such month or the immediately preceding Business Day
commencing                     ,
2004, provided that if any such day is not a Business Day,
interest shall be paid on the next Business Day.
Interest Deferral
Prior
to                     ,
2009, the Company will be permitted, at its election, on one or
more occasions to defer interest payments on the Notes (each, an
"Initial Interest Deferral Period") by delivering to
the Trustee a copy of a resolution of the Company's Board
of Directors to the effect that, based upon a good-faith
determination of the Company's Board of Directors, such
deferral is reasonably necessary for bona-fide cash management
purposes, or to reduce the likelihood of or avoid a default
under any Designated Senior Indebtedness; provided, however,
that no such deferral may be commenced, and any on-going
deferral shall cease, if a default in payment of principal or
premium, if any, on the Notes has occurred and is continuing, an
Event of Default with respect to payment of interest on the
Notes has occurred and is continuing, or another Event of
Default with respect to the Notes has occurred and is continuing
and the Notes have been accelerated as a result of the
occurrence of such Event of Default; and provided, further, that
interest payments on the Notes may not be deferred under this
provision for more than eight quarters in the aggregate or
beyond                     ,
2009.
After                     ,
2009, the Company will be permitted, at its election, on up to
four occasions to defer interest payments on the Notes (each, an
"Additional Interest Deferral Period" and, together
with the Initial Interest Deferral Period, an "Interest
Deferral Period") with respect to up to two quarters per
occasion by delivering to the Trustee a copy of a resolution of
the Company's Board of Directors to the effect that, based
upon a good-faith determination of the Company's Board of
Directors, such deferral is reasonably necessary for bona-fide
cash management purposes, or to reduce the likelihood of or
avoid a
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default under any Designated Senior Indebtedness;
provided, however, that no such deferral may be commenced, and
any on-going deferral shall cease, if a default in payment of
principal or premium, if any, on the Notes has occurred and is
continuing, an Event of Default with respect to payments of
interest on the Notes has occurred and is continuing, or another
Event of Default with respect to the Notes has occurred and is
continuing and the Notes have been accelerated as a result of
the occurrence of such Event of Default.
Deferred interest on the Notes will bear interest
at the same rate as the stated rate of interest applicable to
the Notes, compounded quarterly, until paid in full. No later
than                     ,
2009, the Company must pay in full all interest deferred during
any Initial Interest Deferral Period, together with accrued
interest thereon. No later
than                     ,
2019, the Company must pay all interest deferred during any
Additional Interest Deferral Period, together with accrued
interest thereon; provided that no Additional Interest Deferral
Period may commence, unless and until all interest deferred
pursuant to any preceding Interest Deferral Period, together
with accrued interest thereon, has been paid in full.
At the end of any Interest Deferral Period, the
Company will be obligated to resume quarterly payments of
interest on the Notes including interest on deferred interest.
During any Interest Deferral Period and so long
as any deferred interest or interest on deferred interest
remains outstanding, the Company will not be permitted to make
any payment of dividends on its common stock or make any
distribution to holders of common stock, or make certain other
Restricted Payments. See "— Certain
Covenants — Limitation on Restricted Payments."
Additional Notes
The Indenture will provide for the issuance of an
unlimited aggregate principal amount of additional senior
subordinated notes having identical terms and conditions to the
Notes offered hereby (other than issuance date) (the
"Additional Notes"), subject to compliance with the
covenants contained in the Indenture. Additional Notes will vote
on all matters with the Notes offered hereby. The Additional
Notes will be deemed to have the same accrued current period
interest, deferred interest and defaults as the Notes issued in
this offering and will be deemed to have expended Payment
Blockage Periods and interest deferral periods to the same
extent as the Notes issued in this offering.
The Indenture will provide that, in the event
there is a subsequent issuance of Additional Notes, including
any issuances of IDSs in exchange for shares of Class B
common stock, but issued with OID, each Holder of the Notes or
the IDSs (as the case may be) agrees that, upon such issuance
and any issuance of Notes thereafter, a portion of such
Holder's Notes, whether held as part of IDSs or separately,
will be exchanged, automatically for a portion of the Additional
Notes acquired by the Holders of such Additional Notes and the
records of any record holders of Notes will be revised to
reflect such changes. Consequently, following any such
subsequent issuance and exchange, without any action by such
Holder, each Holder of the Notes or the IDSs (as the case may
be) will own the Notes and Additional Notes of each issuance in
the same proportion as each other Holder. The aggregate
principal amount of the Notes owned by each Holder will not
change as a result of such exchange. Any Additional Notes will
be guaranteed by the Guarantors on the same basis as the Notes.
See "Material U.S. Federal Income Tax
Consequences — Consequences to U.S.
Holders — Senior Subordinated Notes —
Additional Issuances."
There is a possibility that holders of Additional
Notes having original issue discount may not be able to collect
the unamortized portion of the original issue discount in the
event of an acceleration of the senior subordinated notes or
bankruptcy of the Company as described under "Risk
Factors — Risks Relating to the IDSs, the Shares of
Class A Common Stock and the Senior Subordinated Notes
Represented by the IDSs and the Senior Subordinated Notes
Offered Separately — Subsequent issuances of senior
subordinated notes may cause you to recognize OID and may be
treated as a taxable exchange by you." Any such automatic
exchange should not impair the rights you would otherwise have
to assert a claim against us or the underwriters, under
applicable securities laws, with respect to the full amount of
Notes purchased by you.
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As a condition to the Company's issuance of
Additional Notes, the Board of Directors shall determine in good
faith that, with respect to future issuances of Additional
Notes, the Additional Notes should be treated as debt for
U.S. federal income tax purposes. In addition, the Company
shall not issue Additional Notes unless it delivers to the
Trustee prior to or simultaneously with such issuance an opinion
of an independent advisor to the effect that, after giving
effect to the Incurrence of the Indebtedness evidenced by such
Additional Notes and related Guarantees, the Company and the
Guarantors are solvent.
Optional Redemption
Except as set forth below, the Company will not
be entitled to redeem the Notes at its option prior
to                     ,
2009.
The Company may, at its option, redeem all, but
not less than all, of the Notes at any time upon not less than
30 nor more than 60 days prior notice, at a redemption
price equal to 100% of the principal amount of the Notes plus
accrued and unpaid interest to the redemption date, if for
U.S. federal income tax purposes the Company is not, or
would not be, in the opinion of a nationally recognized tax
counsel experienced in such matters, permitted to deduct all or
a substantial portion of the interest payable on the Notes from
its income.
On or
after                     ,
2009, the Company will be entitled at its option to redeem all
or a portion of the Notes upon not less than 30 nor more than
60 days' notice, at the redemption prices (expressed
in percentages of principal amount), plus accrued interest to
the redemption date (subject to the right of Holders of record
on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the 12-month
period commencing
on                     of
the years set forth below:
Period
Redemption Price
2009
%
2010
%
2011
%
2012 and thereafter
100
%
Selection and Notice of Redemption
If the Company is redeeming less than all the
Notes at any time, the Trustee will select Notes as follows:
(1) if the Notes are listed on any national
    securities exchange, in compliance with the requirements of the
    principal national securities exchange on which the Notes are
    listed; or
(2) if the Notes are not listed on any
    national securities exchange, on a pro rata basis, by lot or by
    such method as the trustee deems fair and appropriate.
The Company will cause notices of redemption to
be mailed by first-class mail at least 30 but not more than
60 days before the redemption date to each holder of Notes
to be redeemed at its registered address, except that,
notwithstanding anything to the contrary herein, redemption
notices may be mailed more than 60 days prior to a
redemption date if the notice is issued in connection with a
defeasance of the Notes or a satisfaction and discharge of the
Indenture.
No Note will be redeemed in part unless all other
Notes are also redeemed in part on a pro rata basis. If any Note
is to be redeemed in part only, the notice of redemption that
relates to that Note will state the portion of the principal
amount thereof to be redeemed. The Company will issue a new Note
in a principal amount equal to the unredeemed portion of the
original Note in the name of the holder upon cancellation of the
original Note. Notes called for redemption become due on the
date fixed for redemption. On and after the redemption date,
interest ceases to accrue on Notes or portions of them called
for redemption, unless the Company defaults in making the
redemption payment.
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A full or partial redemption of the Notes will
result in an automatic separation of all IDSs, after which
shares of common stock and Notes may no longer be combined to
form IDSs. See "Description of IDSs — Automatic
Separation."
Mandatory Redemption; Offers to Purchase; Open
Market Purchases
The Company is not required to make any mandatory
redemption or sinking fund payments with respect to the Notes.
However, under certain circumstances, the Company may be
required to offer to purchase Notes as described under the
captions "— Change of Control" and
"— Certain Covenants — Limitation on
Sales of Assets and Subsidiary Stock." The Company may at
any time and from time to time purchase Notes in the open market
or otherwise.
Guarantees
The Subsidiary Guarantors will jointly and
severally guarantee, on a senior subordinated basis, the
Company's obligations under these Notes. Initially, the
Subsidiary Guarantors will be all of the Company's
Subsidiaries that guarantee Buffets' obligations under the
Credit Agreement. The obligations of each Subsidiary Guarantor
will be limited as necessary to prevent that Subsidiary Guaranty
from constituting a fraudulent conveyance under applicable law.
See "Risk Factors — Risks Relating to the IDSs,
the Shares of Class A Common Stock and the Senior
Subordinated Notes Represented by the IDSs, and the Senior
Subordinated Notes Offered Separately — Federal and
state laws permit a court to void the senior subordinated notes
or the subsidiary guarantees under certain circumstances."
Each Subsidiary Guarantor that makes a payment
under its Subsidiary Guaranty will be entitled upon payment in
full of all guaranteed obligations under the Indenture to a
contribution from each other Subsidiary Guarantor in an amount
equal to such other Subsidiary Guarantor's pro rata portion
of such payment based on the respective net assets of all the
Subsidiary Guarantors at the time of such payment determined in
accordance with GAAP,
provided, however
, that during a
Default, such right of contribution shall be suspended until the
payment in full of all guaranteed obligations under the
Indenture.
If a Subsidiary Guaranty were rendered voidable,
it could be subordinated by a court to all other indebtedness
(including guarantees and other contingent liabilities) of the
applicable Subsidiary Guarantor, and, depending on the amount of
such indebtedness, a Subsidiary Guarantor's liability on
its Subsidiary Guaranty could be reduced to zero. See "Risk
Factors — Risks Relating to the IDSs, the Shares of
Class A Common Stock and the Senior Subordinated Notes
Represented by the IDSs, and the Senior Subordinated Notes
Offered Separately — Federal and state laws permit a
court to void the senior subordinated notes or the subsidiary
guarantees under certain circumstances."
The Subsidiary Guaranty of a Subsidiary Guarantor
will be released:
(1) upon the sale or other disposition
    (including by way of consolidation or merger) of a Subsidiary
    Guarantor;
(2) upon the sale or disposition of all or
    substantially all the assets of a Subsidiary Guarantor;
(3) if the Notes are defeased or discharged
    in accordance with the procedures described below under
    "— Defeasance" or
    "— Satisfaction and Discharge;"
(4) upon the designation of such Subsidiary
    Guarantor as an Unrestricted Subsidiary pursuant to the terms of
    the Indenture; or
(5) at such time as such Subsidiary
    Guarantor (i) no longer Guarantees any other Indebtedness
    of the Company or another Subsidiary Guarantor and (ii) has
    no outstanding Indebtedness for borrowed money (provided that
    for purposes of this provision, Indebtedness shall not include
    Indebtedness permitted to be Incurred pursuant to clause (3),
    (7), (8), (9), (10), (11) or (13) of paragraph (b) of the
    covenant described under "— Certain
    Covenants — Limitation on Indebtedness");
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in the case of (1) and (2) above, other than to
the Company or an Affiliate of the Company and as permitted by
the Indenture.
Ranking
Senior Indebtedness versus
    Notes
The payment of the principal of, premium, if any,
and interest on the Notes and the payment of any Subsidiary
Guaranty will be subordinate in right of payment to the prior
payment in full of all Senior Indebtedness of the Company or the
relevant Subsidiary Guarantor, as the case may be, including the
obligations of the Company and such Subsidiary Guarantor under
the Credit Agreement and Buffets' Senior Notes.
As
of                     ,
2004, on a pro forma basis giving effect to the Refinancing
Transactions:
(1) the Company's Senior Indebtedness
    would have been
    $           million,
    $           million
    of which would have been secured indebtedness; and
(2) the Senior Indebtedness of the
    Subsidiary Guarantors would have been
    $           million,
    $           million
    of which would have been secured indebtedness.
    $           million
    of the Senior Indebtedness of the Subsidiary Guarantors consists
    of their respective guaranties and obligations of Senior
    Indebtedness under the Credit Agreement and
    $           million
    consists of their respective guaranties and obligations under
    Buffets' Senior Notes.
Although the Indenture contains limitations on
the amount of additional Indebtedness that the Company and the
Subsidiary Guarantors may incur, under some circumstances the
amount of such Indebtedness could be substantial and, in any
case, such Indebtedness may be Senior Indebtedness. See
"— Certain Covenants — Limitation on
Indebtedness."
Liabilities of Subsidiaries versus
    Notes
As a holding company, the Company has no
operations and, therefore, is dependent on the cash flow of its
subsidiaries and other entities to meet its own obligations,
including the payment of interest and principal obligations on
the Notes when due. All of the Company's existing
subsidiaries are guaranteeing the Notes. Future domestic
Restricted Subsidiaries that have Indebtedness are required to
guarantee the Notes. Claims of creditors of any non-guarantor
subsidiaries, including trade creditors holding indebtedness or
guarantees issued by any such non-guarantor subsidiaries, and
claims of preferred stockholders of any such non-guarantor
subsidiaries generally will have priority with respect to the
assets and earnings of any such non-guarantor subsidiaries over
the claims of the Company's creditors, including holders of
the Notes, even if such claims do not constitute Senior
Indebtedness. Accordingly, the Notes will be effectively
subordinated to creditors (including trade creditors) and
preferred stockholders, if any, of any non-guarantor
subsidiaries.
Although the Indenture limits the incurrence of
Indebtedness and preferred stock of some of the Company's
subsidiaries, such limitation is subject to a number of
significant qualifications. Moreover, the Indenture does not
impose any limitation on the incurrence by such subsidiaries of
liabilities that are not considered Indebtedness under the
Indenture. See "— Certain Covenants —
Limitation on Indebtedness."
Other Senior Subordinated Indebtedness
    versus Notes
Only Indebtedness of the Company or a Subsidiary
Guarantor that is Senior Indebtedness will rank senior to the
Notes and the relevant Subsidiary Guaranty in accordance with
the provisions of the Indenture. The Notes and each Subsidiary
Guaranty will in all respects rank pari passu with all other
Senior Subordinated Indebtedness of the Company and the relevant
Subsidiary Guarantor and trade payables, except for the impact
of the contractual subordination provided in the indenture which
may have the effect of causing the notes to receive less,
ratably, than other general unsecured creditors, including trade
payables, that are not subject to contractual subordination, and
except for statutory priorities
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provided under the U.S. federal bankruptcy
code or other applicable bankruptcy, insolvency and other laws
dealing with creditors rights generally.
The Company and the Subsidiary Guarantors have
agreed in the Indenture that it and they will not Incur,
directly or indirectly, any Indebtedness that is contractually
subordinate or junior in right of payment to the Company's
Senior Indebtedness or the Senior Indebtedness of such
Subsidiary Guarantors, unless such Indebtedness is Senior
Subordinated Indebtedness of the Company or the Subsidiary
Guarantors, as applicable, or is expressly subordinated in right
of payment to Senior Subordinated Indebtedness of the Company or
the Subsidiary Guarantors, as applicable. The Indenture does not
treat unsecured Indebtedness as subordinated or junior to
Secured Indebtedness merely because it is unsecured, and it does
not treat Indebtedness secured by junior liens as subordinated
or junior merely because it is secured by junior liens.
Payment of Notes
The Company is not permitted to pay principal of,
premium, if any, or interest on the Notes or make any deposit
pursuant to the provisions described under" —
Defeasance" or "— Satisfaction and
Discharge" below and may not purchase, redeem or otherwise
retire any Notes (collectively, "pay the Notes") if
either of the following occurs (a "Payment Default"):
(1) any Designated Senior Indebtedness of
    the Company is not paid in full in cash when due; or
(2) any other default on Designated Senior
    Indebtedness of the Company occurs and the maturity of such
    Designated Senior Indebtedness is accelerated in accordance with
    its terms;
unless, in either case, the Payment Default has
been cured or waived and any such acceleration has been
rescinded or such Designated Senior Indebtedness has been paid
in full in cash. Regardless of the foregoing, the Company is
permitted to pay the Notes if it and the Trustee receive written
notice approving such payment from the Representatives of all
Designated Senior Indebtedness with respect to which the Payment
Default has occurred and is continuing.
During the continuance of any default, other than
a Payment Default, with respect to any Designated Senior
Indebtedness of the Company pursuant to which the maturity
thereof may be accelerated without further notice, except such
notice as may be required to effect such acceleration, or the
expiration of any applicable grace periods, the Company is not
permitted to pay the Notes for a period (a "Payment
Blockage Period") commencing upon the receipt by the
Trustee, with a copy to us, of written notice (a "Blockage
Notice") of such default from the Representative of such
Designated Senior Indebtedness specifying an election to effect
a Payment Blockage Period and ending 179 days thereafter.
The Payment Blockage Period will end earlier if such Payment
Blockage Period is terminated:
(1) by written notice to the Trustee and us
    from the Person or Persons who gave such Blockage Notice;
(2) because the default giving rise to such
    Blockage Notice is cured, waived or otherwise no longer
    continuing; or
(3) because such Designated Senior
    Indebtedness has been discharged or repaid in full in cash.
Notwithstanding the provisions described above,
unless the holders of such Designated Senior Indebtedness or the
Representative of such Designated Senior Indebtedness have
accelerated the maturity of such Designated Senior Indebtedness,
the Company is permitted to resume paying the Notes after the
end of such Payment Blockage Period. The Notes shall not be
subject to more than one Payment Blockage Period in any
consecutive 360-day period irrespective of the number of
defaults with respect to Designated Senior Indebtedness of the
Company during such period, except that if any Blockage Notice
is delivered to the Trustee by or on behalf of holders of
Designated Senior Indebtedness of the Company (other than
holders of the Bank Indebtedness), a Representative of holders
of Bank Indebtedness may give another Blockage Notice within
such period. However, in no event may the total number of days
during which any Payment Blockage Period or Periods is in effect
exceed 179 days in the aggregate during
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any 360 consecutive day period, and there must be
181 days during any 360-day consecutive period during which
no Payment Blockage Period is in effect.
Upon any payment or distribution of the assets of
the Company upon a total or partial liquidation or dissolution
or reorganization of or similar proceeding relating to the
Company or its property:
(1) the holders of Senior Indebtedness of
    the Company will be entitled to receive payment in full in cash
    of such Senior Indebtedness before the holders of the Notes are
    entitled to receive any payment;
(2) until the Senior Indebtedness of the
    Company is paid in full in cash, any payment or distribution to
    which holders of the Notes would be entitled but for the
    subordination provisions of the Indenture will be made to
    holders of such Senior Indebtedness as their interests may
    appear, except that holders of Notes may receive certain Capital
    Stock and subordinated debt obligations; and
(3) if a distribution is made to holders of
    the Notes that, due to the subordination provisions, should not
    have been made to them, such holders of the Notes are required
    to hold it in trust for the holders of Senior Indebtedness of
    the Company and pay it over to them as their interests may
    appear.
If payment of the Notes is accelerated because of
an Event of Default, the Company or the Trustee must promptly
notify the holders of Designated Senior Indebtedness of the
Company or the Representative of such Designated Senior
Indebtedness of the acceleration. If any Designated Senior
Indebtedness of the Company is outstanding, neither the Company,
nor any Subsidiary Guarantor may pay the Notes until five
Business Days after the Representatives of all the issues of
such Designated Senior Indebtedness receive notice of such
acceleration and, thereafter, may pay the Notes only if the
Indenture otherwise permits payment at that time.
A Subsidiary Guarantor's obligations under
its Subsidiary Guaranty are senior subordinated obligations. As
such, the rights of holders of Notes to receive payment by a
Subsidiary Guarantor pursuant to its Subsidiary Guaranty will be
subordinated in right of payment to the rights of holders of
Senior Indebtedness of such Subsidiary Guarantor. The terms of
the subordination provisions described above with respect to the
Company's obligations under the Notes apply equally to a
Subsidiary Guarantor and the obligations of such Subsidiary
Guarantor under its Subsidiary Guaranty.
By reason of the subordination provisions
contained in the Indenture, in the event of a liquidation or
insolvency proceeding, creditors of the Company or a Subsidiary
Guarantor who are holders of Senior Indebtedness of the Company
or a Subsidiary Guarantor, as the case may be, may recover more,
ratably, than the holders of the Notes, and creditors of the
Company's who are not holders of Senior Indebtedness may
recover less, ratably, than holders of the Company's Senior
Indebtedness and may recover more, ratably, than the holders of
the Notes.
The terms of the subordination provisions
described above will not apply to payments from money or the
proceeds of U.S. Government Obligations held in trust by
the Trustee for the payment of principal of and interest on the
Notes pursuant to the provisions described under
"— Defeasance" or
"— Satisfaction and Discharge."
Methods of Receiving Payments on the
Notes
If a holder of Notes has given wire transfer
instructions to the Company, the Company will pay all principal,
interest and premium, if any, on that holder's Notes in
accordance with those instructions. All other payments on the
Notes will be made at the office or agency of the paying agent
and registrar within the City and State of New York unless the
Company elects to make interest payments by check mailed to the
holders of Notes at their address set forth in the register of
holders.
Change of Control
Upon the occurrence of any of the following
events (each a "Change of Control"), each Holder shall
have the right to require that the Company repurchase such
Holder's Notes at a purchase price in cash
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equal to 101% of the principal amount thereof on
the date of purchase, plus accrued and unpaid interest, if any,
to the date of purchase (subject to the right of holders of
record on the relevant record date to receive interest due on
the relevant interest payment date):
(1) any "person" (as such term is
    used in Sections 13(d) and 14(d) of the Exchange Act),
    other than one or more Permitted Holders, is or becomes the
    "beneficial owner" (as defined in Rules 13d-3 and
    13d-5 under the Exchange Act, except that for purposes of this
    clause (1) such person shall be deemed to have
    "beneficial ownership" of all shares that any such
    person has the right to acquire, whether such right is
    exercisable immediately or only after the passage of time),
    directly or indirectly, of more than 50% of the total voting
    power of the Voting Stock of the Company; provided, however,
    that the Permitted Holders beneficially own (as defined in
    Rules 13d-3 and 13d-5 under the Exchange Act), directly or
    indirectly, in the aggregate a lesser percentage of the total
    voting power of the Voting Stock of the Company than such other
    person and do not have the right or ability by voting power,
    contract or otherwise to elect or designate for election a
    majority of the Board of Directors of the Company (for purposes
    of this clause (1), such other person shall be deemed to
    beneficially own any Voting Stock of a Person (the
    "specified person") held by any other Person (the
    "parent entity"), if such other person is the
    beneficial owner (as first defined in this clause (1)),
    directly or indirectly, of more than 50% of the voting power of
    the Voting Stock of such parent entity and the Permitted Holders
    beneficially own (as defined in Rules 13d-3 and 13d-5 under
    the Exchange Act), directly or indirectly, in the aggregate a
    lesser percentage of the voting power of the Voting Stock of
    such parent entity and do not have the right or ability by
    voting power, contract or otherwise to elect or designate for
    election a majority of the board of directors of such parent
    entity);
(2) individuals who on the Issue Date
    constituted the Board of Directors of the Company (together with
    any new directors whose election by such Board of Directors of
    the Company or whose nomination for election by the stockholders
    of the Company was approved by a vote of 66 2/3% of the
    directors of the Company then still in office who were either
    directors on the Issue Date or whose election or nomination for
    election was previously so approved or whose election was
    approved by the Permitted Holders) cease for any reason to
    constitute a majority of the Board of Directors of the Company
    then in office;
(3) the failure at any time by the Company
    to beneficially own (as defined in Rules 13d-3 and 13d-5
    under the Exchange Act), directly or indirectly, 100% of the
    Voting Stock of Buffets (except to the extent Buffets is merged
    with and into the Company in accordance with the terms of the
    indenture); or
(4) the merger or consolidation of the
    Company with or into another Person or the merger of another
    Person with or into the Company, or the sale of all or
    substantially all the assets of the Company (determined on a
    consolidated basis) to another Person (other than, in all such
    cases, a Person that is controlled by the Permitted Holders),
    other than a transaction following which (A) in the case of
    a merger or consolidation transaction, holders of securities
    that represented 100% of the Voting Stock of the Company
    immediately prior to such transaction (or other securities into
    which such securities are converted as part of such merger or
    consolidation transaction) own directly or indirectly at least a
    majority of the voting power of the Voting Stock of the
    surviving Person in such merger or consolidation transaction
    immediately after such transaction and (B) in the case of a
    sale of assets transaction, the transferee Person becomes the
    obligor in respect of the Notes and a Subsidiary of the
    transferor of such assets; provided, however, that it shall not
    constitute a Change of Control under this clause (4) if,
    after giving effect to such transaction, the Permitted Holders
    beneficially own (as defined in clause (1) above) 35% or
    more of the total voting power of the Voting Stock of the
    surviving Person in such transaction immediately after such
    transaction.
In order to exercise this repurchase right, a
Holder must separate its IDSs into the shares of common stock
and Notes represented thereby.
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Within 30 days following any Change of
Control, the Company will mail or otherwise deliver a notice to
each Holder with a copy to the Trustee (the "Change of
Control Offer") stating:
(1) that a Change of Control has occurred
    and that such Holder has the right to require us to purchase
    such Holder's Notes at a purchase price in cash equal to
    101% of the principal amount thereof on the date of purchase,
    plus accrued and unpaid interest, if any, or premium, if any, to
    the date of purchase (subject to the right of Holders of record
    on the relevant record date to receive interest on the relevant
    interest payment date);
(2) the circumstances and relevant facts
    regarding such Change of Control;
(3) the purchase date (which will be no
    earlier than 30 days and no later than 60 days from
    the date such notice is mailed); and
(4) the instructions, as determined by us,
    consistent with the covenant described hereunder, that a Holder
    must follow in order to have its Notes purchased.
The Company will not be required to make a Change
of Control Offer following 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 set forth 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.
The Company will comply, to the extent
applicable, with the requirements of Section 14(e) of the
Exchange Act and any other securities laws or regulations in
connection with the repurchase of Notes as a result of a Change
of Control. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of the covenant
described hereunder, the Company will comply with the applicable
securities laws and regulations and shall not be deemed to have
breached its obligations under the covenant described hereunder
by virtue of its compliance with such securities laws or
regulations.
The Change of Control purchase feature of the
Notes may in certain circumstances make more difficult or
discourage a sale or takeover of the Company and, thus, the
removal of incumbent management. The Change of Control purchase
feature is a result of negotiations between the Company and the
underwriters. The Company does not have the present intention to
engage in a transaction involving a Change of Control, although
it is possible that it could decide to do so in the future.
Subject to the limitations discussed below, the Company could,
in the future, enter into certain transactions, including
acquisitions, refinancings or other recapitalizations, that
would not constitute a Change of Control under the Indenture,
but that could increase the amount of indebtedness outstanding
at such time or otherwise affect the Company's capital
structure or credit ratings. Restrictions on the Company's
ability to Incur additional Indebtedness are contained in the
covenants described under "— Certain
Covenants — Limitation on Indebtedness." Such
restrictions can only be waived with the consent of the holders
of a majority in principal amount of the Notes then outstanding.
Except for the limitations contained in such covenants, however,
the Indenture will not contain any covenants or provisions that
may afford holders of the Notes protection in the event of a
highly leveraged transaction.
The Credit Agreement will prohibit us from
purchasing any Notes and will also provide that the occurrence
of certain change of control events with respect to the Company
would constitute a default thereunder. In the event a Change of
Control occurs at a time when the Company is prohibited under
the terms of any Senior Indebtedness of the Company, including
the Credit Agreement, from purchasing Notes, the Company may
seek the consent of its lenders to the purchase of Notes or may
attempt to refinance the borrowings that contain such
prohibition. If the Company does not obtain such a consent or
repay such borrowings, it will remain prohibited from purchasing
Notes. In such case, the Company's failure to offer to
purchase Notes would constitute a Default under the Indenture,
which would, in turn, constitute a default under the Credit
Agreement and the indenture governing Buffets' Senior Notes.
Future indebtedness that the Company may incur
may contain prohibitions on the occurrence of certain events
that would constitute a Change of Control or require the
repurchase of such indebtedness
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upon a Change of Control. Moreover, the exercise
by the holders of their right to require the Company to
repurchase the Notes could cause a default under such
indebtedness, even if the Change of Control itself does not, due
to the financial effect of such repurchase on the Company.
Finally, the Company's ability to pay cash to the holders
of Notes following the occurrence of a Change of Control may be
limited by its then existing financial resources. There can be
no assurance that sufficient funds will be available when
necessary to make any required repurchases.
The provisions under the Indenture relative to
the Company's obligation to make an offer to repurchase the
Notes as a result of a Change of Control may be waived or
modified with the written consent of the holders of a majority
in principal amount of the Notes.
Covenants Relating to IDSs
Combination of Notes and common stock into
IDSs.
The Indenture will provide that
as long as any Notes are outstanding, any Holder of Notes and
shares of Class A common stock may, at any time and from
time to time, combine these securities to form IDSs unless the
IDSs have previously been automatically separated as a result of
the continuance of a payment default on the Notes for
90 days, or the redemption or maturity of any Notes.
Certain Covenants
The Indenture contains covenants including, among
others, the following:
Limitation on Indebtedness
(a) The Company will not, and will not
permit any Restricted Subsidiary to, Incur, directly or
indirectly, any Indebtedness; provided, however, that the
Company and its Restricted Subsidiary will be entitled to Incur
Indebtedness if, on the date of such Incurrence after giving
effect thereto on a pro forma basis, no Default has occurred and
is continuing and, the Consolidated Coverage Ratio of the
Company exceeds 2.0 to 1.
(b) Notwithstanding the foregoing
paragraph (a), the Company and the Restricted Subsidiaries
will be entitled to Incur any or all of the following
Indebtedness:
(1) Indebtedness Incurred by the Company and
    its Restricted Subsidiaries pursuant to any Revolving Credit
    Facility; provided, however, that, immediately after giving
    effect to any such Incurrence, the aggregate principal amount of
    all Indebtedness Incurred under this clause (1) and then
    outstanding does not exceed the greater of
    (A) $                     million
    and
    (B)           %
    of the consolidated revenue of the Company and its Restricted
    Subsidiaries for the most recent four consecutive fiscal
    quarters for which internal financial statements are available
    prior to the date such Indebtedness was Incurred;
(2) Indebtedness Incurred by the Company and
    its Restricted Subsidiaries pursuant to any Term
    Loan Facility; provided, however, that, after giving effect
    to any such Incurrence, the aggregate principal amount of all
    Indebtedness Incurred under this clause (2) and then
    outstanding does not exceed the greater of
    (A) $                     million
    less the sum of all principal payments with respect to such
    Indebtedness pursuant to paragraph (a)(3)(A) of the
    covenant described under "— Limitation on Sales
    of Assets and Subsidiary Stock" and
    (B)           %
    of the consolidated revenue of the Company and its Restricted
    Subsidiaries for the most recent four consecutive fiscal
    quarters for which internal financial statements are available
    prior to the date such Indebtedness was Incurred;
(3) Indebtedness owed to and held by the
    Company or a Restricted Subsidiary; provided, however, that
    (A) any subsequent issuance or transfer of any Capital
    Stock which results in any such Restricted Subsidiary ceasing to
    be a Restricted Subsidiary or any subsequent transfer of such
    Indebtedness (other than to the Company or a Restricted
    Subsidiary) shall be deemed, in each case, to constitute the
    Incurrence of such Indebtedness by the obligor thereon and
    (B) if the Company is
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the obligor on such Indebtedness owed to a
    Restricted Subsidiary, such Indebtedness is expressly
    subordinated to the prior payment in full in cash of all
    obligations with respect to the Notes;
(4) the Notes (other than any Additional
    Notes) and the related Guarantees;
(5) Indebtedness outstanding on the Issue
    Date (other than Indebtedness described in clause (1), (2),
    (3) or (4) of this covenant);
(6) Refinancing Indebtedness in respect of
    Indebtedness Incurred pursuant to paragraph (a) or
    pursuant to clause (4) or (5) or this clause (6);
(7) Hedging Obligations of the Company or
    any Restricted Subsidiary entered into not for the purpose of
    speculation;
(8) obligations in respect of one or more
    standby letters of credit, performance, bid and surety bonds,
    workers' compensation claims, self-insurance claims,
    self-insurance obligations, bankers' acceptances and
    completion guarantees provided by the Company or any Restricted
    Subsidiary in the ordinary course of business;
(9) Indebtedness arising from the honoring
    by a bank or other financial institution of a check, draft or
    similar instrument drawn against insufficient funds in the
    ordinary course of business; provided, however, that such
    Indebtedness is extinguished within three Business Days of its
    Incurrence;
(10) Indebtedness (including Capital Lease
    Obligations) Incurred by the Company or any of its Restricted
    Subsidiaries to finance the purchase, lease, construction or
    improvement of property (real or personal) or equipment (whether
    through the direct purchase of assets or the Capital Stock of
    any Person owning such assets) within 180 days after such
    purchase, lease or improvement in an aggregate principal amount
    which, when added together with the amount of Indebtedness
    previously Incurred pursuant to this clause (10) and then
    outstanding (including any Refinancing Indebtedness with respect
    thereto) does not exceed
    $                     million;
(11) Indebtedness attributable to Permitted
    Equipment Lease Financings in an aggregate principal amount
    which, when added together with the amount of Indebtedness
    Incurred pursuant to this clause (11) and then outstanding
    (including any Refinancing Indebtedness with respect thereto)
    does not exceed
    $                     million,
    provided, however, that the Net Available Cash from such
    Permitted Equipment Lease Financings is applied to reduce
    Indebtedness as required by the covenant described under
    "— Limitation on Sales of Assets and Subsidiary
    Stock";
(12) the Guarantee or co-issuance of any
    Indebtedness otherwise permitted to be Incurred pursuant to the
    Indenture;
(13) Indebtedness of the Company or any
    Restricted Subsidiary consisting of indemnification, adjustment
    of purchase price, earn-out or similar obligations, in each case
    incurred in connection with the acquisition or disposition of
    any assets, including shares of Capital Stock or divisions or
    lines of business, of the Company or any Restricted Subsidiary;
(14) Acquired Indebtedness, and any
    Refinancing Indebtedness thereof, which is in the aggregate
    amount not to exceed
    $                     million
    at any time outstanding;
(15) Indebtedness represented by the
    issuance of Additional Notes and the related Guarantees in
    connection with the issuance of shares of common stock of the
    Company provided that the ratio of the aggregate principal
    amount of such Additional Notes to the number of such additional
    shares shall not exceed the equivalent ratio with respect to the
    IDSs outstanding prior to such issuance, and, in each case, the
    related Guarantees;
(16) Indebtedness represented by the
    issuance of Additional Notes in connection with the exchange of
    Class B common stock outstanding on the Issue Date for IDSs
    as described under "Related Party Transactions in
    Connection with this Offering — Recapitalization"
    and "Related Party
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Transactions in Connection with this
    Offering — Investor Rights Agreement," provided
    that at the time of such exchange all Exchange Conditions have
    been satisfied; and
(17) Indebtedness of the Company and its
    Restricted Subsidiaries in an aggregate principal amount which,
    when taken together with all other Indebtedness of the Company
    and its Restricted Subsidiaries outstanding on the date of such
    Incurrence (other than Indebtedness permitted by
    clauses (1) through (16) above or paragraph (a))
    does not exceed $ million.
(c) Notwithstanding the foregoing, neither
the Company nor any Subsidiary Guarantor will incur any
Indebtedness pursuant to the foregoing paragraph (b) if the
proceeds thereof are used, directly or indirectly, to Refinance
any Subordinated Obligations of the Company or any Subsidiary
Guarantor unless such Indebtedness shall be subordinated to the
Notes or the applicable Subsidiary Guaranty to at least the same
extent as such Subordinated Obligations.
(d) For purposes of determining compliance
with this covenant, (1) in the event that an item of
Indebtedness meets the criteria of more than one of the types of
Indebtedness described above, the Company, in its sole
discretion, will classify such item of Indebtedness at the time
of Incurrence and only be required to include the amount and
type of such Indebtedness in one of the above clauses and
(2) the Company will be entitled to divide and classify an
item of Indebtedness in more than one of the types of
Indebtedness described above. In addition, from time to time the
Company may reclassify any Indebtedness Incurred pursuant to
this covenant such that it will be deemed as having been
Incurred under paragraph (a) or another clause in
paragraph (b), so long as such Indebtedness could have been
Incurred under paragraph (a) or such new clause had
paragraph (a) or such clause been available to the Company
at the time of the original Incurrence of such Indebtedness.
Indebtedness under the Revolving Credit Facility under the
Credit Agreement outstanding on the Issue Date shall be deemed
to have been Incurred on the Issue Date in reliance on
clause (1) in paragraph (b) above. Indebtedness under
the Term Loan Facility under the Credit Agreement
outstanding on the Issue Date shall be deemed to have been
Incurred on the Issue Date in reliance on clause (2) in
paragraph (b) above.
(e) Notwithstanding paragraphs (a) and
(b) above, neither the Company nor any Subsidiary Guarantor will
Incur (1) any Indebtedness if such Indebtedness is
subordinate or junior in right of payment to any Senior
Indebtedness of the Company or such Subsidiary Guarantor, as
applicable, unless such Indebtedness is Senior Subordinated
Indebtedness or is expressly subordinated in right of payment to
Senior Subordinated Indebtedness of the Company or such
Subsidiary Guarantor, as applicable, or (2) any Secured
Indebtedness that is not Senior Indebtedness of such Person
unless contemporaneously therewith such Person makes effective
provision to secure the Notes or the relevant Subsidiary
Guaranty, as applicable, senior to or equally and ratably with
such Secured Indebtedness for so long as such Secured
Indebtedness is secured by a Lien.
Limitation on Restricted
    Payments
(a) The Company will not, and will not
permit any Restricted Subsidiary, directly or indirectly, to
make a Restricted Payment if at the time the Company or such
Restricted Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be
    continuing (or would result therefrom);
(2) a Dividend Suspension Period shall have
    occurred and be continuing; or
(3) the aggregate amount of such Restricted
    Payment and all other Restricted Payments since the Issue Date
    would exceed the sum of (without duplication):
(A) 100% of the Excess Cash of the Company
    for the period (taken as one accounting period) from the fiscal
    quarter that first begins after the Issue Date to the end of the
    Company's most recently ended fiscal quarter for which
    internal financial statements are available at the time of such
    Restricted Payment; plus
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(B) 100% of the aggregate Net Cash Proceeds
    received by the Company from the issuance or sale of its Capital
    Stock (other than Disqualified Stock) subsequent to the Issue
    Date (other than an issuance or sale to a Subsidiary of the
    Company and other than an issuance or sale to an employee stock
    ownership plan or to a trust established by the Company or any
    of its Subsidiaries for the benefit of their employees), 100% of
    any cash capital contribution received by the Company from its
    stockholders subsequent to the Issue Date and 100% of the fair
    market value (as determined in good faith by resolution of the
    Board of Directors of the Company) of property (other than cash
    that would constitute Temporary Cash Investments) of a Related
    Business received by the Company or a Restricted Subsidiary
    subsequent to the Issue Date as a contribution to its common
    equity capital or from the issuance and sale of its Capital
    Stock (other than from a Subsidiary or that was financed with
    loans from the Company or any of its Restricted Subsidiaries);
    plus
(C) the amount by which Indebtedness of the
    Company or a Restricted Subsidiary is reduced on the
    Company's consolidated balance sheet upon the conversion or
    exchange (other than by a Subsidiary of the Company) subsequent
    to the Issue Date of any Indebtedness of the Company or a
    Restricted Subsidiary convertible or exchangeable for Capital
    Stock (other than Disqualified Stock) of the Company (less the
    amount of any cash, or the fair value of any other property,
    distributed by the Company upon such conversion or exchange);
    plus
(D) an amount equal to the sum of
    (x) the net reduction in the Investments (other than
    Permitted Investments) made by the Company or any Restricted
    Subsidiary in any Person resulting from repurchases, repayments
    or redemptions of such Investments by such Person, proceeds
    realized on the sale of such Investment and proceeds
    representing the return of capital (excluding dividends and
    distributions), in each case received by the Company or any
    Restricted Subsidiary, and (y) to the extent such Person is
    an Unrestricted Subsidiary, the portion (proportionate to the
    Company's equity interest in such Subsidiary) of the fair
    market value of the net assets of such Unrestricted Subsidiary
    at the time such Unrestricted Subsidiary is designated a
    Restricted Subsidiary; provided, however, that the foregoing sum
    shall not exceed, in the case of any such Person or Unrestricted
    Subsidiary, the amount of Investments (excluding Permitted
    Investments) previously made (and treated as a Restricted
    Payment) by the Company or any Restricted Subsidiary in such
    Person or Unrestricted Subsidiary.
(b) The preceding provisions will not
prohibit:
(1) any Restricted Payment made out of the
    Net Cash Proceeds of the substantially concurrent sale of, or
    made by exchange for, Capital Stock of the Company (other than
    Disqualified Stock and other than Capital Stock issued or sold
    to a Subsidiary of the Company or an employee stock ownership
    plan or to a trust established by the Company or any of its
    Subsidiaries for the benefit of their employees) or a
    substantially concurrent cash capital contribution received by
    the Company from its stockholders; provided, however, that
    (A) such Restricted Payment shall be excluded in the
    calculation of the amount of Restricted Payments and
    (B) the Net Cash Proceeds from such sale or such cash
    capital contribution (to the extent so used for such Restricted
    Payment) shall be excluded from the calculation of amounts under
    clause (3)(B) of paragraph (a) above;
(2) any purchase, repurchase, redemption,
    defeasance, satisfaction and discharge or other acquisition or
    retirement for value of Subordinated Obligations of the Company,
    the Issuer or any Subsidiary Guarantor made by exchange for, or
    out of the proceeds of the substantially concurrent sale of,
    Indebtedness which is permitted to be Incurred pursuant to the
    covenant described under "— Limitation on
    Indebtedness"; provided, however, that such purchase,
    repurchase, redemption, defeasance or other acquisition or
    retirement for value shall be excluded in the calculation of the
    amount of Restricted Payments;
(3) dividends paid within 60 days after
    the date of declaration thereof if at such date of declaration
    such dividend would have complied with this covenant; provided,
    however, that such dividend shall be included in the calculation
    of the amount of Restricted Payments;
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(4) so long as no Default has occurred and
    is continuing, the repurchase or other acquisition of shares of
    Capital Stock of the Company or any of its Subsidiaries from
    employees, former employees, directors or former directors of
    the Company or any of its Subsidiaries (or permitted transferees
    of such employees, former employees, directors or former
    directors), pursuant to the terms of the agreements (including
    employment, severance, compensation or shareholder agreements)
    or plans (or amendments thereto) approved by the Board of
    Directors of the Company under which such individuals purchase
    or sell or are granted the option to purchase or sell, shares of
    such Capital Stock; provided, however, that the aggregate amount
    of such repurchases and other acquisitions shall not exceed in
    any calendar year the sum of
    (A) $           million
    plus (B) the aggregate Net Cash Proceeds received by the
    Company from the issuance of such Capital Stock to, or the
    exercise of options to purchase such Capital Stock by, employees
    or directors of the Company or any of its Subsidiaries that
    occurs after the Issue Date (to the extent the Net Cash Proceeds
    from the sale of such Capital Stock have not otherwise been
    applied to the payment of Restricted Payments by virtue of
    clause (3)(B) of paragraph (a) above or applied
    pursuant to clause (b)(1) above) plus (C) the Net Cash
    Proceeds actually received by the Company after the Issue Date
    from insurance proceeds paid in respect of the death or
    disability of any employee or director; provided further,
    however, that such repurchases and other acquisitions shall be
    excluded in the calculation of the amount of Restricted Payments;
(5) the exchange of Class B common
    stock of the Company outstanding on the Issue Date for IDSs,
    provided, however, that at the time of such exchange all
    Exchange Conditions are satisfied; provided further, however,
    that such repurchases and other acquisitions shall be excluded
    in the calculation of the amount of Restricted Payments;
(6) Payments of intercompany subordinated
    debt, the incurrence of which was permitted under
    clause (3) of paragraph (b) of the covenant described
    under "— Limitation on Indebtedness";
    provided, however, that no Default or Event of Default has
    occurred and is continuing or would otherwise result therefrom;
    provided further, however, that such payments shall be excluded
    in the calculation of the amount of Restricted Payments; or
(7) Restricted Payments not exceeding
    $           million
    in the aggregate; provided, however, that (A) at the time
    of such Restricted Payments, no Default shall have occurred and
    be continuing (or result therefrom) and (B) such Restricted
    Payments shall be excluded in the calculation of the amount of
    Restricted Payments.
For purposes of determining compliance with this
covenant, in the event that a proposed Restricted Payment meets
the criteria of more than one of the categories of Restricted
Payments described in clauses (1) through (7) in
paragraph (b) above, or is entitled to be incurred pursuant
to paragraph (a) above, the Issuer will be entitled to
classify such item of Restricted Payment on the date of its
payment in any manner that complies with this covenant.
Limitation on Restrictions on Distributions
    from Restricted Subsidiaries
The Company will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or permit to
exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary to
(a) pay dividends or make any other distributions on its
Capital Stock to the Company or a Restricted Subsidiary or pay
any Indebtedness owed to the Company or a Subsidiary Guarantor,
(b) make any loans or advances to the Company or
(c) transfer any of its property or assets to the Company,
except:
(1) with respect to clauses (a), (b)
    and (c),
(i) any encumbrance or restriction pursuant
    to an agreement in effect at or entered into on the Issue Date,
    including the Credit Agreement and the indenture governing
    Buffets' Senior Notes;
(ii) any encumbrance or restriction with
    respect to a Restricted Subsidiary pursuant to an agreement
    relating to any Indebtedness (including Acquired Indebtedness)
    Incurred by such
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Restricted Subsidiary on or prior to the date on
    which such Restricted Subsidiary was acquired by the Company
    (other than Indebtedness Incurred as consideration in, or to
    provide all or any portion of the funds or credit support
    utilized to consummate, the transaction or series of related
    transactions pursuant to which such Restricted Subsidiary became
    a Restricted Subsidiary or was acquired by the Company) and
    outstanding on such date;
(iii) any encumbrance or restriction
    pursuant to an agreement effecting a Refinancing of Indebtedness
    Incurred pursuant to an agreement referred to in clause (i)
    or (ii) of clause (1) of this covenant or this
    clause (iii) or contained in any amendment to an agreement
    referred to in clause (i) or (ii) of clause (1)
    of this covenant or this clause (iii); provided, however,
    that the encumbrances and restrictions with respect to such
    Restricted Subsidiary contained in any such refinancing
    agreement or amendment are no less favorable to Noteholders than
    encumbrances and restrictions with respect to such Restricted
    Subsidiary contained in such predecessor agreements;
(iv) any encumbrance or restriction
    consisting of any restriction on the sale or other disposition
    of assets or property securing Indebtedness as a result of a
    Lien permitted to be Incurred under the Indenture on such asset
    or property;
(v) any encumbrance or restriction with
    respect to a Restricted Subsidiary imposed pursuant to an
    agreement entered into for the sale or disposition of all or a
    portion of the Capital Stock or assets of such Restricted
    Subsidiary pending the closing of such sale or disposition;
(vi) any restriction arising under
    applicable law, regulation or order;
(vii) any restriction on cash or other
    deposits or net worth imposed by suppliers or landlords under
    contracts entered into in the ordinary course of business; and
(viii) any restriction in any agreement that
    is not materially more restrictive than the restrictions under
    the terms of the Credit Agreement and the indenture governing
    Buffets' Senior Notes as in effect on the Issue Date;
(2) with respect to clause (c) only,
(i) any such encumbrance or restriction
    consisting of customary nonassignment provisions in leases
    governing leasehold interests to the extent such provisions
    restrict the transfer of the lease or the property leased
    thereunder;
(ii) restrictions contained in security
    agreements or mortgages securing Indebtedness of a Restricted
    Subsidiary to the extent such restrictions restrict the transfer
    of the property subject to such security agreements or
    mortgages; and
(iii) provisions with respect to the
    disposition or distribution of assets or property in joint
    venture agreements, asset sale agreements, stock sale agreements
    and other similar agreements entered into in the ordinary course
    of business.
Limitation on Sales of Assets and
    Subsidiary Stock
(a) The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly,
consummate any Asset Disposition unless:
(1) the Company or such Restricted
    Subsidiary receives consideration at the time of such Asset
    Disposition at least equal to the fair market value (including
    as to the value of all non-cash consideration), as determined in
    good faith by the Board of Directors of the Company, of the
    shares and assets subject to such Asset Disposition;
(2) at least 75% of the consideration
    thereof received by the Company or such Restricted Subsidiary is
    in the form of cash or cash equivalents (provided that such 75%
    requirement shall not apply to (i) the sale of the business
    (whether through a sale of stock or assets) conducted by Tahoe
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Joe's, Inc. and (ii) any Asset
    Disposition in which the cash or cash equivalents portion of the
    consideration received therefor is no less than an amount equal
    to the product of
    (x)                     and
    (y) the amount of EBITDA for the previously completed four
    fiscal quarters directly attributable to the assets or Capital
    Stock included in such Asset Disposition); and
(3) an amount equal to 100% of the Net
Available Cash from such Asset Disposition is applied by the
Company (or such Restricted Subsidiary, as the case may be)
(A) first, to the extent the Company elects
    (or is required by the terms of any Indebtedness), to prepay,
    repay, redeem, defease, satisfy and discharge or purchase Senior
    Indebtedness of the Company or Indebtedness (other than any
    Disqualified Stock) of a Wholly Owned Subsidiary (in each case
    other than Indebtedness owed to the Company or an Affiliate of
    the Company) within one year from the later of the date of such
    Asset Disposition or the receipt of such Net Available Cash;
(B) second, to the extent of the balance of
    such Net Available Cash after application in accordance with
    clause (A), to the extent the Company elects, to acquire
    Additional Assets within one year from the later of the date of
    such Asset Disposition or the receipt of such Net Available Cash;
(C) third, to the extent of the balance of
    such Net Available Cash after application in accordance with
    clauses (A) and (B), to make an offer to the holders of the
    Notes (and to holders of other Senior Subordinated Indebtedness
    of the Company designated by the Company) to purchase Notes (and
    such other Senior Subordinated Indebtedness of the Company)
    pursuant to and subject to the conditions contained in the
    Indenture; and
(D) fourth, to the extent of the balance of
    such Net Available Cash after application in accordance with
    clauses (A), (B) and (C), for any purpose not prohibited by
    the terms of the Indenture;
provided, however, that in connection with any
    prepayment, repayment or purchase of Indebtedness pursuant to
    clause (A) or (C) above, the Company or such Restricted
    Subsidiary shall permanently retire such Indebtedness and shall
    cause the related loan commitment (if any) to be permanently
    reduced in an amount equal to the principal amount so prepaid,
    repaid or purchased.
Notwithstanding the foregoing provisions of this
covenant, the Company and the Restricted Subsidiaries will not
be required to apply any Net Available Cash in accordance with
this covenant except to the extent that the aggregate Net
Available Cash from all Asset Dispositions which are not applied
in accordance with this covenant exceeds
$           million.
In addition, any Net Available Cash received in respect of
Permitted Equipment Lease Financings Incurred pursuant to
clause (b)(11) of the covenant described under
"— Limitation on Indebtedness" may not be
applied pursuant to clause (3)(B) above. Pending
application of Net Available Cash pursuant to this covenant,
such Net Available Cash may be invested in Temporary Cash
Investments or applied to temporarily reduce Senior Indebtedness
of the Company or Indebtedness of any Wholly Owned Subsidiary.
For the purposes of this covenant, the following
are deemed to be cash or cash equivalents:
(1) the assumption of Indebtedness of the
    Company or any Restricted Subsidiary and the release of the
    Company or such Restricted Subsidiary from all liability on such
    Indebtedness in connection with such Asset Disposition;
(2) any Additional Assets (so long as such
    Additional Assets are acquired for fair market value, as
    determined in good faith by the Board of Directors of the
    Company, in connection with the transaction giving rise to such
    Asset Disposition), which Additional Assets shall be deemed to
    have been acquired pursuant to clause (B) of the preceding
    paragraph in connection with such Asset Disposition; and
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(3) securities received by the Company or
    any Restricted Subsidiary from the transferee that are converted
    by the Company or such Restricted Subsidiary into cash or cash
    equivalents within 90 days of receipt thereof.
(b) In the event of an Asset Disposition
that requires the purchase of Notes (and other Senior
Subordinated Indebtedness of the Company) pursuant to
clause (a)(3)(C) above, the Company will purchase Notes
tendered pursuant to an offer by the Company for the Notes (and
such other Senior Subordinated Indebtedness) at a purchase price
of 100% of their principal amount (or, in the event such other
Senior Subordinated Indebtedness of the Company was issued with
significant original issue discount, 100% of the accreted value
thereof), without premium, plus accrued but unpaid interest (or,
in respect of such other Senior Subordinated Indebtedness of the
Company, such lesser price, if any, as may be provided for by
the terms of such Senior Subordinated Indebtedness) in
accordance with the procedures (including prorating in the event
of oversubscription) set forth in the Indenture. If the
aggregate purchase price of the Notes tendered exceeds the Net
Available Cash allotted to their purchase, the Company will
select the Notes to be purchased on a pro rata basis but in
round denominations, which in the case of the Notes will be
denominations of $1,000 principal amount or multiples thereof.
The Company shall not be required to make such an offer to
purchase Notes (and other Senior Subordinated Indebtedness of
the Company) pursuant to this covenant if the Net Available Cash
available therefor is less than
$           million
(which lesser amount shall be carried forward for purposes of
determining whether such an offer is required with respect to
the Net Available Cash from any subsequent Asset Disposition).
In order to accept an Asset Sale Offer, a Holder must separate
its IDSs into the shares of common stock and Notes represented
thereby.
(c) The Company will comply, to the extent
applicable, with the requirements of Section 14(e) of the
Exchange Act and any other securities laws or regulations in
connection with the repurchase of Notes pursuant to this
covenant. To the extent that the provisions of any securities
laws or regulations conflict with provisions of this covenant,
the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its
obligations under this clause by virtue of its compliance with
such securities laws or regulations.
Limitation on Affiliate
    Transactions
(a) The Company will not, and will not
permit any Restricted Subsidiary to, enter into or permit to
exist any transaction (including the purchase, sale, lease or
exchange of any property, employee compensation arrangements or
the rendering of any service) with, or for the benefit of, any
Affiliate of the Company (each of the foregoing, an
"Affiliate Transaction") unless:
(1) the terms of the Affiliate Transaction
    are no less favorable to the Company or such Restricted
    Subsidiary than those that could be obtained at the time of the
    Affiliate Transaction in arm's-length dealings with a
    Person who is not an Affiliate;
(2) if such Affiliate Transaction involves
    an amount in excess of
    $           million,
    the material terms of the Affiliate Transaction are set forth in
    writing and a majority of the directors of the Company
    disinterested with respect to such Affiliate Transaction have
    determined in good faith that the criteria set forth in
    clause (1) are satisfied and have approved the relevant
    Affiliate Transaction as evidenced by a Board resolution; and
(3) if such Affiliate Transaction involves
    an amount in excess of $ million, the Board of Directors of the
    Company shall also have received a written opinion from an
    Independent Qualified Party to the effect that the financial
    terms of such Affiliate Transaction are fair, from a financial
    standpoint, to the Company and its Restricted Subsidiaries or
    not less favorable to the Company and its Restricted
    Subsidiaries than could reasonably be expected to be obtained at
    the time in an arm's-length transaction with a Person who
    was not an Affiliate.
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(b) The provisions of the preceding
paragraph (a) will not prohibit:
(1) any Investment (other than a Permitted
    Investment) or other Restricted Payment, in each case permitted
    to be made pursuant to, or not prohibited by, the covenant
    described under "— Limitation on Restricted
    Payments";
(2) any issuance of securities, or other
    payments, awards or grants in cash, securities or otherwise
    pursuant to, or the funding of, employment, compensation or
    severance arrangements, stock options and stock ownership plans
    approved by the Board of Directors of the Company;
(3) loans or advances to employees in the
    ordinary course of business in accordance with the past
    practices of the Company or its Restricted Subsidiaries or
    otherwise approved by the Board of Directors, but in any event
    not to exceed
    $        million in the
    aggregate outstanding at any one time;
(4) the payment of reasonable compensation
    or employee benefit arrangements to and indemnity provided for
    the benefit of directors, officers or employees of the Company
    or its Restricted Subsidiaries in the ordinary course of
    business;
(5) the payment of reasonable fees to
    directors of the Company and its Restricted Subsidiaries who are
    not employees of the Company or its Restricted Subsidiaries;
(6) any transaction with a Restricted
    Subsidiary or joint venture or similar entity which would
    constitute an Affiliate Transaction solely because the Company
    or a Restricted Subsidiary owns an equity interest in or
    otherwise controls such Restricted Subsidiary, joint venture or
    similar entity;
(7) the entering into of a registration
    rights agreement with the securityholders of the Company;
(8) the entering into and performance of the
    Investor Rights Agreement pursuant to its terms as in effect on
    the Issue Date; and
(9) the issuance or sale of any Capital
    Stock (other than Disqualified Stock) of the Company.
Limitation on the Sale or Issuance of
    Capital Stock of Restricted Subsidiaries
The Company:
(1) will not, and will not permit any
    Restricted Subsidiary to, sell, lease, transfer or otherwise
    dispose of any Capital Stock of any Restricted Subsidiary to any
    Person (other than the Company or a Wholly Owned
    Subsidiary), and
(2) will not permit any Restricted
    Subsidiary to issue any of its Capital Stock (other than, if
    necessary, shares of its Capital Stock constituting
    directors' or other legally required qualifying shares) to
    any Person (other than to the Company or a Wholly Owned
    Subsidiary),
unless
(A) immediately after giving effect to such
    issuance, sale or other disposition, neither the Company nor any
    of its Subsidiaries own any Capital Stock of such Restricted
    Subsidiary; or
(B) immediately after giving effect to such
    issuance, sale or other disposition, such Restricted Subsidiary
    would no longer constitute a Restricted Subsidiary and any
    Investment in such Person remaining after giving effect thereto
    is treated as a new Investment by the Company and such
    Investment would be permitted to be made under the covenant
    described under "— Limitation on Restricted
    Payments" if made on the date of such issuance, sale or
    other disposition.
Notwithstanding the foregoing, the issuance or
sale of shares of Capital Stock of any Restricted Subsidiary of
the Company will not violate the provisions of the immediately
preceding sentence if such shares are issued or sold in
connection with (x) the formation or capitalization of a
Restricted Subsidiary or (y) a single transaction or a
series of substantially contemporaneous transactions whereby such
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Restricted Subsidiary becomes a Restricted
Subsidiary of the Company by reason of the acquisition of
securities or assets from another Person.
Merger and Consolidation
The Company will not consolidate with or merge
with or into, or convey, transfer or lease, in one transaction
or a series of transactions, directly or indirectly, all or
substantially all its assets to, any Person, unless:
(1) the resulting, surviving or transferee
    Person (the "Successor Company") shall be a Person
    organized or existing under the laws of the United States of
    America, any State thereof or the District of Columbia and the
    Successor Company (if not the Company) shall expressly assume,
    by an indenture supplemental thereto, executed and delivered to
    the Trustee, in form reasonably satisfactory to the Trustee, all
    the obligations of the Company under the Notes and the Indenture;
(2) immediately after giving pro forma
    effect to such transaction (and treating any Indebtedness which
    becomes an obligation of the Successor Company or any Subsidiary
    as a result of such transaction as having been Incurred by such
    Successor Company or such Subsidiary at the time of such
    transaction), no Default shall have occurred and be continuing;
(3) immediately after giving pro forma
    effect to such transaction, (A) the Successor Company would
    be able to Incur an additional $1.00 of Indebtedness pursuant to
    paragraph (a) of the covenant described under
    "— Limitation on Indebtedness" or
    (B) the Consolidated Coverage Ratio for the Company (or
    Successor Company, if applicable) and its Restricted
    Subsidiaries would be equal to or greater than such ratio for
    the Company and its Restricted Subsidiaries immediately prior to
    such transaction; and
(4) the Company shall have delivered to the
    Trustee an officers' certificate and an opinion of counsel,
    each stating that such consolidation, merger or transfer and
    such supplemental indenture (if any) comply with the Indenture;
provided, however, that clause (3) will not
be applicable to (A) a Restricted Subsidiary consolidating
with, merging into or transferring all or part of its properties
and assets to the Company or any Restricted Subsidiary or
(B) the Company merging with an Affiliate of the Company
solely for the purpose and with the sole effect of
reincorporating the Company in another jurisdiction.
The Successor Company will be the successor to
the Company and shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under the
Indenture, and the predecessor company, except in the case of a
lease, shall be released from the obligation to pay the
principal of and interest on the Notes.
The Company will not permit any Subsidiary
Guarantor to consolidate with or merge with or into, or convey,
transfer or lease, in one transaction or a series of
transactions, all or substantially all of its assets to any
Person unless:
(1) except in the case of a Subsidiary
    Guarantor that has been disposed of in its entirety to another
    Person (other than to the Company or an Affiliate of the
    Company), whether through a merger, consolidation or sale of
    Capital Stock or assets, if in connection therewith the Company
    provides an officers' certificate to the Trustee to the
    effect that the Company will comply with its obligations under
    the covenant described under "— Limitation on
    Sales of Assets and Subsidiary Stock" in respect of such
    disposition, the resulting, surviving or transferee Person (if
    not such Subsidiary) shall be a Person organized and existing
    under the laws of the jurisdiction under which such Subsidiary
    was organized or existing or under the laws of the United States
    of America, or any State thereof or the District of Columbia,
    and such Person shall expressly assume, by a Guaranty Agreement,
    in a form reasonably satisfactory to the Trustee, all the
    obligations of such Subsidiary, if any, under its Subsidiary
    Guaranty;
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(2) immediately after giving effect to such
    transaction or transactions on a pro forma basis (and treating
    any Indebtedness which becomes an obligation of the resulting,
    surviving or transferee Person as a result of such transaction
    as having been issued by such Person at the time of such
    transaction), no Default shall have occurred and be
    continuing; and
(3) the Company delivers to the Trustee an
    officers' certificate and an opinion of counsel, each
    stating that such consolidation, merger or transfer and such
    Guaranty Agreement, if any, complies with the Indenture.
Notwithstanding the foregoing, any Subsidiary
Guarantor may consolidate with or merge with or into or convey,
transfer or lease, in one transaction or a series of
transactions, all or substantially all of its assets to the
Company.
Future Guarantors
Initially, all Restricted Subsidiaries of the
Company will Guarantee the Notes. The Company will cause each
future domestic Restricted Subsidiary that Incurs any
Indebtedness (other than Indebtedness permitted to be Incurred
pursuant to clause (3), (7), (8), (9), (10), (11) or
(13) of paragraph (b) of the covenant described
under "— Limitation on Indebtedness") to, at
the same time, execute and deliver to the Trustee a Guaranty
Agreement pursuant to which such Restricted Subsidiary will
Guarantee payment of the Notes on the same terms and conditions
as those set forth in the Indenture.
SEC Reports
Whether or not subject to the reporting
requirements of the Exchange Act, so long as any Notes are
outstanding, the Company will file with the SEC and, in any
event, provide the Trustee and Noteholders with such annual
reports and such information, documents and other reports as are
specified in Sections 13 and 15(d) of the Exchange Act and
applicable to a U.S. corporation subject to such Sections,
such information, documents and other reports to be so filed and
provided at the times specified for the filings of such
information, documents and reports under such Sections.
In the event that (1) the rules and
regulations of the SEC permit the Company and any direct or
indirect parent company of the Company to report at such parent
entity's level on a consolidated basis, (2) such
parent entity of the Company is not engaged in any business in
any material respect other than incidental to its ownership,
directly or indirectly of the Capital Stock of the Company and
its Affiliates and (3) such parent entity has issued a
Guarantee in respect of the Notes, the information and reports
required by this covenant may be those of such parent company on
a consolidated basis.
Defaults
Each of the following is an Event of Default:
(1) a default in the payment of interest on
    the Notes when due, continued for 30 days, subject to the
    interest deferral provisions contained in the Indenture;
(2) a default in the payment of principal of
    any Note when due at its Stated Maturity, upon optional
    redemption, upon required purchase, upon declaration of
    acceleration or otherwise;
(3) the failure by the Company to comply
    with its obligations under "— Certain
    Covenants — Merger and Consolidation" above;
(4) the failure by the Company to comply for
    30 days after notice with any of its obligations in the
    covenants described above under "Change of Control"
    (other than a failure to purchase Notes) or under
    "— Certain Covenants" under
    "— Limitation on Indebtedness",
    "— Limitation on Restricted Payments",
    "— Limitation on Restrictions on Distributions
    from Restricted Subsidiaries", "— Limitation
    on Sales of Assets and Subsidiary Stock" (other than a
    failure to purchase Notes), "— Limitation on
    Affiliate Transactions", "— Limitation on
    the Sale or Issuance of Capital Stock of Restricted
    Subsidiaries", "— Future Guarantors" or
    "— SEC Reports";
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(5) the failure by the Company or a
    Subsidiary Guarantor to comply for 60 days after notice
    with its other agreements contained in the Indenture;
(6) Indebtedness of the Company, any
    Guarantor or any Significant Subsidiary is not paid within any
    applicable grace period after final maturity or is accelerated
    by the holders thereof because of a default and the total amount
    of such Indebtedness unpaid or accelerated exceeds $ million
    (the "cross acceleration provision");
(7) certain events of bankruptcy, insolvency
    or reorganization of the Company, a Subsidiary Guarantor or a
    Significant Subsidiary (the "bankruptcy provisions");
(8) any judgment or decree for the payment
    of money in excess of
    $           million
    is entered against the Company, a Subsidiary Guarantor or a
    Significant Subsidiary, remains outstanding for a period of 60
    consecutive days following such judgment and is not discharged,
    waived or stayed within 10 days after notice (the
    "judgment default provision");
(9) any Subsidiary Guaranty ceases to be in
    full force and effect (other than in accordance with the terms
    of such Guaranty) and such default continues for 10 days or
    any Subsidiary Guarantor denies or disaffirms its obligations
    under its Guaranty; or
(10) except as expressly permitted by
    clause (1) under the definition of "Restricted
    Payment," the Company pays any dividend on shares of the
    Company's Capital Stock (A) when, based on the
    then-available financial statements presented to the Board of
    Directors, such dividend exceeds the amount available to be paid
    pursuant to paragraph (3) or clause (b)(3) of the
    "— Certain Covenants — Limitation on
    Restricted Payments" covenant or (B) during a Dividend
    Suspension Period or the continuance of an Event of Default.
However, a default under clauses (4),
(5) and (8) will not constitute an Event of Default
until the Trustee or the holders of 25% in principal amount of
the outstanding Notes notify the Company of the default and the
Company does not cure such default within the time specified
after receipt of such notice.
If an Event of Default occurs and is continuing,
the Trustee or the holders of at least 25% in principal amount
of the outstanding Notes may declare the principal of and
accrued but unpaid interest on all the Notes to be due and
payable. Upon such a declaration, such principal and interest
shall be due and payable immediately. If an Event of Default
relating to certain events of bankruptcy, insolvency or
reorganization of the Company occurs and is continuing, the
principal of and interest on all the Notes will ipso facto
become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any
holders of the Notes. Under certain circumstances, the holders
of a majority in principal amount of the outstanding Notes may
rescind any such acceleration with respect to the Notes and its
consequences.
Subject to the provisions of the Indenture
relating to the duties of the Trustee, in case an Event of
Default occurs and is continuing, the Trustee will be under no
obligation to exercise any of the rights or powers under the
Indenture at the request or direction of any of the holders of
the Notes unless such holders have offered to the Trustee
reasonable indemnity or security against any loss, liability or
expense. Except to enforce the right to receive payment of
principal, premium (if any) or interest when due, no holder of a
Note may pursue any remedy with respect to the Indenture or the
Notes unless:
(1) such holder has previously given the
    Trustee notice that an Event of Default is continuing;
(2) holders of at least 25% in principal
    amount of the outstanding Notes have requested the Trustee to
    pursue the remedy;
(3) such holders have offered the Trustee
    reasonable security or indemnity against any loss, liability or
    expense;
(4) the Trustee has not complied with such
    request within 60 days after the receipt thereof and the
    offer of security or indemnity; and
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(5) holders of a majority in principal
    amount of the outstanding Notes have not given the Trustee a
    direction inconsistent with such request within such 60-day
    period.
Subject to certain restrictions, the holders of a
majority in principal amount of the outstanding Notes are given
the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. The
Trustee, however, may refuse to follow any direction that
conflicts with law or the Indenture or that the Trustee
determines is unduly prejudicial to the rights of any other
holder of a Note or that would involve the Trustee in personal
liability.
If a Default occurs, is continuing and is known
to the Trustee, the Trustee must mail to each holder of the
Notes notice of the Default within 90 days after it occurs.
Except in the case of a Default in the payment of principal of
or interest on any Note, the Trustee may withhold notice if and
so long as a committee of its trust officers determines that
withholding notice is not opposed to the interest of the holders
of the Notes. In addition, the Company is required to deliver to
the Trustee, within 120 days after the end of each fiscal
year, a certificate indicating whether the signers thereof know
of any Default that occurred during the previous year. The
Company is required to deliver to the Trustee, within
30 days after the occurrence thereof, written notice of any
event which would constitute certain Defaults, their status and
what action it is taking or propose to take in respect thereof.
Amendments and Waivers
Subject to certain exceptions, the Indenture may
be amended with the consent of the holders of a majority in
principal amount of the Notes then outstanding (including
consents obtained in connection with a tender offer or exchange
for the Notes) and any past default or compliance with any
provisions may also be waived with the consent of the holders of
a majority in principal amount of the Notes then outstanding.
However, without the consent of each holder of an outstanding
Note affected thereby, an amendment or waiver may not, among
other things:
(1) reduce the principal amount of Notes
    whose holders must consent to an amendment;
(2) reduce the rate of or extend the time
    for payment of interest on any Note;
(3) reduce the principal amount of or extend
    the Stated Maturity of any Note or amend the Company's
    right to defer interest on the Notes in a manner adverse to the
    Holders;
(4) reduce the amount payable upon the
    redemption of any Note or change the time at which any Note may
    be redeemed as described under "— Optional
    Redemption" above;
(5) make any Note payable in money other
    than that stated in the Note;
(6) impair the right of any holder of the
    Notes to receive payment of principal amount of and interest on
    such holder's Notes on or after the due dates therefor or
    to institute suit for the enforcement of any payment on or with
    respect to such holder's Notes;
(7) (A) make a change to lower the
    Consolidated Coverage Ratio threshold for a Dividend Suspension
    Period or make a change to paragraph (3) under
    "— Certain Covenants — Limitation on
    Restricted Payments" that would have the effect of
    increasing the amounts of permitted to be distributed in respect
    of the Company's Capital Stock, (B) make any change to
    the provisions of the indenture that prohibit the payment of
    dividends while interest is being deferred, while any previously
    deferred interest remains unpaid during a Dividend Suspension
    Period, or during the continuance of any Default or Event of
    Default or (C) waive an Event of Default under
    clause (10) of "Defaults" (in each case
    except in connection with an offer by the Company to purchase
    all of the Notes, in which case a majority in principal amount
    of Notes will be sufficient);
(8) make any change in the amendment
    provisions which require each holder's consent or in the
    waiver provisions;
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(9) make any change in the ranking or
    priority of any Note or any Guaranty that would adversely affect
    the Noteholders; or
(10) make any change in any Guaranty that
    would adversely affect the Noteholders in any material respect.
Notwithstanding the preceding, without the
consent of any holder of the Notes, the Company, the Guarantors
and Trustee may amend the Indenture:
(1) to cure any ambiguity, omission, defect,
    mistake or inconsistency;
(2) to provide for the assumption by a
    successor person of the obligations of the Company or any
    Guarantor under the Indenture;
(3) to provide for uncertificated Notes in
    addition to or in place of certificated Notes (provided that the
    uncertificated Notes are issued in registered form for purposes
    of Section 163(f) of the Code, or in a manner such that the
    uncertificated Notes are described in Section 163(f)(2)(B)
    of the Code);
(4) to add Guarantees with respect to the
    Notes, including any Subsidiary Guaranties, or to secure the
    Notes;
(5) to add to the covenants of the Company
    or a Subsidiary Guarantor for the benefit of the holders of the
    Notes or to surrender any right or power conferred upon the
    Company or a Subsidiary Guarantor;
(6) to make any change that does not
    adversely affect the rights of any holder of the Notes;
(7) to comply with any requirement of the
    SEC in connection with the qualification of the Indenture under
    the Trust Indenture Act or to make certain changes to the
    Indenture to provide for the issuance of Additional
    Notes; or
(8) to conform the text of the Indenture or
    the Notes to any provision of this "Description of Senior
    Subordinated Notes" section of the prospectus to the extent
    that such provision in this "Description of Senior
    Subordinated Notes" section of the prospectus was intended
    to be a verbatim recitation of a provision of the Indenture or
    of the Notes.
However, no amendment may be made to the
subordination provisions of the Indenture that adversely affects
the rights of any holder of Senior Indebtedness of the Company
or a Subsidiary Guarantor then outstanding unless the holders of
such Senior Indebtedness (or their Representative) consent to
such change.
The consent of the holders of the Notes is not
necessary under the Indenture to approve the particular form of
any proposed amendment. It is sufficient if such consent
approves the substance of the proposed amendment.
After an amendment under the Indenture becomes
effective, the Company is required to mail to holders of the
Notes a notice briefly describing such amendment. However, the
failure to give such notice to all holders of the Notes, or any
defect therein, will not impair or affect the validity of the
amendment.
Defeasance
At any time, the Company may terminate all its
obligations under the Notes and the Indenture ("legal
defeasance"), except for certain obligations, including
those respecting the defeasance trust and obligations to
register the transfer or exchange of the Notes, to replace
mutilated, destroyed, lost or stolen Notes and to maintain a
registrar and paying agent in respect of the Notes.
In addition, at any time the Company may
terminate its obligations under "— Change of
Control" and under the covenants described under
"— Certain Covenants" (other than the
covenant described under "— Merger and
Consolidation"), the operation of the cross acceleration
provision, the bankruptcy
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provisions with respect to Significant
Subsidiaries and the judgment default provision described under
"— Defaults" above and the limitations
contained in clause (3) of the first paragraph under
"— Certain Covenants — Merger and
Consolidation" above ("covenant defeasance").
The Company may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant
defeasance option. If the Company exercises its legal defeasance
option, payment of the Notes may not be accelerated because of
an Event of Default with respect thereto. If the Company
exercises its covenant defeasance option, payment of the Notes
may not be accelerated because of an Event of Default specified
in clause (4), (6), (7) (with respect only to Significant
Subsidiaries) or (8) under "— Defaults"
above or because of the failure of the Company to comply with
clause (3) of the first paragraph under
"— Certain Covenants — Merger and
Consolidation" above. If the Company exercises its legal
defeasance option or its covenant defeasance option, each
Guarantor will be released from all of its obligations with
respect to its Guaranty.
In order to exercise either of the Company's
defeasance options, it must irrevocably deposit in trust (the
"defeasance trust") with the Trustee money or
U.S. Government Obligations for the payment of principal
and interest on the Notes to redemption or maturity, as the case
may be, and must comply with certain other conditions, including
delivery to the Trustee of an opinion of counsel to the effect
that holders of the Notes will not recognize income, gain or
loss for Federal income tax purposes as a result of such deposit
and defeasance and will be subject to Federal income tax on the
same amounts and in the same manner and at the same times as
would have been the case if such deposit and defeasance had not
occurred (and, in the case of legal defeasance only, such
opinion of counsel must be based on a ruling of the Internal
Revenue Service or other change in applicable Federal income tax
law).
Satisfaction And Discharge
When (1) the Company delivers to the Trustee
all outstanding Notes for cancellation or (2) all
outstanding Notes have become due and payable, whether at
maturity or on a redemption date as a result of the mailing of a
notice of redemption, or (3) all outstanding Notes will
become due and payable within one year or are to be called for
redemption within one year under arrangements reasonably
satisfactory to the Trustee and, in the case of clauses (2)
and (3), the Company irrevocably deposits with the Trustee funds
sufficient to pay at maturity or upon redemption all outstanding
Notes, including interest thereon to maturity or such redemption
date, and if in any case the Company pays all other sums payable
hereunder by it, then the Indenture shall, subject to
exceptions, cease to be of further effect.
Concerning the Trustee
U.S. Bank National Association is to be the
Trustee under the Indenture and the Registrar and Paying Agent
with regard to the Notes. An affiliate of the Trustee is
expected to be a lender under the Credit Agreement.
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;
provided, however
, if it
acquires any conflicting interest it must either eliminate such
conflict within 90 days, apply to the SEC for permission to
continue or resign.
The Holders of a majority in principal amount of
the 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.
If an Event of Default occurs (and is not 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 and
then only to the extent required by the terms of the Indenture.
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No Personal Liability of Directors, Officers,
Employees and Stockholders
No director, officer, employee, incorporator or
stockholder of the Company or any Subsidiary Guarantor shall
have any liability for any obligations of the Company or the
Subsidiary Guarantors under the Notes, any Guaranty or the
Indenture or for any claim based on, in respect of, or by reason
of such obligations or their creation. Each Holder of the Notes
by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of
the Notes. Such waiver and release may not be effective to waive
liabilities under the U.S. Federal securities laws and it
is the view of the SEC that such a waiver is against public
policy.
Governing Law
The Indenture and the Notes will be governed by,
and construed in accordance with, the laws of the State of New
York without giving effect to applicable principles of conflicts
of law to the extent that the application of the law of another
jurisdiction would be required thereby.
Definitions
"2002 and 2004 Refinancing
Transactions" means (i) Buffets' offering of the
Buffets Existing Notes in 2002, Buffets' entering into of
the Credit Agreement in 2002, the repayment of all amounts
outstanding under Buffets' then-existing credit facility,
the redemption in 2002 of all of Buffets' 14% Senior
Subordinated Notes due 2008, the redemption in 2002 of all of
the Company's 16% Senior Subordinated Notes due 2008,
the payment of related prepayment fees and the payment of fees
and expenses relating to such transactions, all of which were
completed on or about June 28, 2002, and
(ii) Buffets' entering into the Credit Agreement in
February 2004, the repayment of all amounts outstanding under
Buffets' then-existing credit facility, the Company's
offering of the Buffets Holdings Existing Notes in May 2004 and
the repurchase of a portion of Buffets Existing Notes with the
proceeds therefrom.
"Acquired Indebtedness" means
(1) with respect to any Person that becomes a Restricted
Subsidiary after the Issue Date, Indebtedness of such Person and
its Subsidiaries existing at the time such Person becomes a
Restricted Subsidiary that was not incurred in connection with,
or in contemplation of, such Person becoming a Restricted
Subsidiary and (2) with respect to the Company or any
Restricted Subsidiary, any Indebtedness of a Person (other than
the Company or a Restricted Subsidiary) existing at the time
such Person is merged with or into the Company or a Restricted
Subsidiary in connection with the acquisition of an asset or
assets from another Person, which Indebtedness was not, in any
case, incurred by such other Person in connection with, or in
contemplation of, such merger or acquisition.
"Additional Assets" means:
(1) any property, plant or equipment useful
    in a Related Business;
(2) the Capital Stock of a Person that
    becomes a Restricted Subsidiary as a result of the acquisition
    of such Capital Stock by the Company or another Restricted
    Subsidiary; or
(3) Capital Stock constituting a minority
    interest in any Person that at such time is a Restricted
    Subsidiary;
provided, however, that any such Restricted
Subsidiary described in clause (2) or (3) above is
primarily engaged in a Related Business.
"Affiliate" of any specified Person
means any other Person, directly or indirectly, controlling or
controlled by or under direct or indirect common control with
such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means
the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings
correlative to the foregoing. For purposes of the covenants
described under "— Certain Covenants —
Limitation on Restricted Payments",
"— Certain Covenants — Limitation on
Affiliate Transactions" and "— Certain
Covenants — Limitation on Sales of Assets and
Subsidiary Stock" only, "Affiliate" shall also
mean any
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beneficial owner of Capital Stock representing
10% or more of the total voting power of the Voting Stock (on a
fully diluted basis) of the Company or of rights or warrants to
purchase such Capital Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any
such beneficial owner pursuant to the first sentence hereof.
"Asset Disposition" means any sale,
lease, transfer or other disposition (or series of related
sales, leases, transfers or dispositions) by the Company or any
Restricted Subsidiary, including any disposition by means of a
merger, consolidation or similar transaction (each referred to
for the purposes of this definition as a
"disposition"), of:
(1) any shares of Capital Stock of a
    Restricted Subsidiary (other than directors' qualifying
    shares or shares required by applicable law to be held by a
    Person other than the Company or a Restricted Subsidiary);
(2) all or substantially all the assets of
    any division or line of business of the Company or any
    Restricted Subsidiary; or
(3) any other assets of the Company or any
    Restricted Subsidiary outside of the ordinary course of business
    of the Company or such Restricted Subsidiary;
other than, in the case of clauses (1),
(2) and (3) above,
(A) a disposition by a Restricted Subsidiary
    to the Company or by the Company or a Restricted Subsidiary to a
    Wholly Owned Subsidiary;
(B) for purposes of the covenant described
    under "— Certain Covenants — Limitation
    on Sales of Assets and Subsidiary Stock" only, (x) a
    disposition that constitutes a Restricted Payment permitted by
    the covenant described under "— Certain
    Covenants — Limitation on Restricted Payments" or
    a Permitted Investment and (y) a disposition of all or
    substantially all the assets of the Company in accordance with
    the covenant described under "— Certain
    Covenants — Merger and Consolidation";
(C) a disposition of assets with a fair
    market value of less than $1.0 million;
(D) entering into Hedging
    Obligations; and
(E) the granting of a lien permitted under
    the Indenture.
"Attributable Debt" in respect of a
Sale/ Leaseback Transaction means, as at the time of
determination, the present value (discounted at the interest
rate borne by the Notes, compounded annually) of the total
obligations of the lessee for net rental payments during the
remaining term of the lease included in such Sale/ Leaseback
Transaction (including any period for which such lease has been
extended); provided, however, that if such Sale/ Leaseback
Transaction results in a Capital Lease Obligation, the amount of
Indebtedness represented thereby will be determined in
accordance with the definition of "Capital Lease
Obligation."
"Average Life" means, as of the date of
determination, with respect to any Indebtedness, the quotient
obtained by dividing:
(1) the sum of the products of the numbers
    of years from the date of determination to the dates of each
    successive scheduled principal payment of or redemption or
    similar payment with respect to Indebtedness multiplied by the
    amount of such payment by
(2) the sum of all such payments.
"Bank Indebtedness" means all
Obligations pursuant to the Credit Agreement.
"Board of Directors" with respect to a
Person means the Board of Directors of such Person or any
committee thereof duly authorized to act on behalf of such Board.
"Buffets Existing Notes" means the
Buffets' 11 1/4% Senior Subordinated Notes due
2010.
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"Buffets Holdings Existing Notes" means
the Company's 13 7/8% Senior Discount Notes due
2010.
"Business Day" means each day which is
not a Legal Holiday.
"Capital Lease Obligation" means an
obligation that is required to be classified and accounted for
as a capital lease for financial reporting purposes in
accordance with GAAP, and the amount of Indebtedness represented
by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated
Maturity thereof shall be the date of the last payment of rent
or any other amount due under such lease prior to the first date
upon which such lease may be terminated by the lessee without
payment of a penalty.
"Capital Stock" of any Person means any
and all shares, interests, rights to purchase, warrants,
options, participations or other equivalents of or interests in
(however designated) equity of such Person, including any
Preferred Stock, but excluding any debt securities convertible
into such equity.
"Code" means the Internal Revenue Code
of 1986, as amended.
"Consolidated Coverage Ratio" means,
with respect to any Person as of any date of determination, the
ratio of (x) the aggregate amount of EBITDA of such Person
and its Restricted Subsidiaries for the period of the most
recent four consecutive fiscal quarters for which internal
financial statements are available prior to the date of such
determination to (y) Consolidated Interest Expense of such
Person and its Restricted Subsidiaries for such four fiscal
quarters; provided, however, that:
(1) if such Person or any of its Restricted
    Subsidiaries has Incurred any Indebtedness since the beginning
    of such period that remains outstanding or if the transaction
    giving rise to the need to calculate the Consolidated Coverage
    Ratio is an Incurrence of Indebtedness, or both, EBITDA and
    Consolidated Interest Expense for such period shall be
    calculated after giving effect on a pro forma basis to such
    Indebtedness as if such Indebtedness had been Incurred on the
    first day of such period (except that, in making such
    computation, the amount of Indebtedness under any revolving
    credit facility outstanding on the date of such calculation
    shall be computed based on (A) the average daily balance of
    such Indebtedness during such four fiscal quarters or such
    shorter period when such facility was outstanding or (B) if
    such facility was created after the end of such four fiscal
    quarters, the average balance of such Indebtedness during the
    period from the date of creation of such facility to the date of
    the computation);
(2) if such Person or any of its Restricted
    Subsidiaries has repaid, repurchased, defeased or otherwise
    discharged any Indebtedness since the beginning of such period
    or if any Indebtedness is to be repaid, repurchased, defeased or
    otherwise discharged (in each case other than Indebtedness
    Incurred under any revolving credit facility unless such
    Indebtedness has been permanently repaid and has not been
    replaced) on the date of the transaction giving rise to the need
    to calculate the Consolidated Coverage Ratio, EBITDA and
    Consolidated Interest Expense for such period shall be
    calculated on a pro forma basis as if such discharge had
    occurred on the first day of such period and as if such Person
    or such Restricted Subsidiary has not earned the interest income
    actually earned during such period in respect of cash or
    Temporary Cash Investments used to repay, repurchase, defease or
    otherwise discharge such Indebtedness;
(3) if since the beginning of such period
    such Person or any of its Restricted Subsidiaries shall have
    made any Asset Disposition, EBITDA for such period shall be
    reduced by an amount equal to EBITDA (if positive) directly
    attributable to the assets which are the subject of such Asset
    Disposition for such period, or increased by an amount equal to
    EBITDA (if negative), directly attributable thereto for such
    period and Consolidated Interest Expense for such period shall
    be reduced by an amount equal to the Consolidated Interest
    Expense directly attributable to any Indebtedness of such Person
    or any of its Restricted Subsidiaries repaid, repurchased,
    defeased or otherwise discharged with respect to such Person and
    its continuing Restricted Subsidiaries in connection with such
    Asset Disposition for such period (or, if the Capital Stock of
    any Restricted Subsidiary is sold, the Consolidated Interest
    Expense for such period directly attributable to the
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Indebtedness of such Restricted Subsidiary to the
    extent such Person and its continuing Restricted Subsidiaries
    are no longer liable for such Indebtedness after such sale);
(4) if since the beginning of such period
    such Person or any of its Restricted Subsidiaries (by merger or
    otherwise) shall have made an Investment in any Restricted
    Subsidiary (or any person which becomes a Restricted Subsidiary)
    or an acquisition of assets, including any acquisition of assets
    occurring in connection with a transaction requiring a
    calculation to be made hereunder, which constitutes all or
    substantially all of an operating unit of a business, EBITDA and
    Consolidated Interest Expense for such period shall be
    calculated after giving pro forma effect thereto (including the
    Incurrence of any Indebtedness) as if such Investment or
    acquisition occurred on the first day of such period; and
(5) if since the beginning of such period
    any Person (that subsequently became a Restricted Subsidiary or
    was merged with or into such Person or any of its Restricted
    Subsidiaries since the beginning of such period) shall have made
    any Asset Disposition, any Investment or acquisition of assets
    that would have required an adjustment pursuant to
    clause (3) or (4) above if made by such Person or a
    Restricted Subsidiary during such period, EBITDA and
    Consolidated Interest Expense for such period shall be
    calculated after giving pro forma effect thereto as if such
    Asset Disposition, Investment or acquisition occurred on the
    first day of such period.
For purposes of this definition, whenever pro
forma effect is to be given to an acquisition of assets, the
amount of income or earnings relating thereto and the amount of
Consolidated Interest Expense associated with any Indebtedness
Incurred in connection therewith, the pro forma calculations
shall be determined in good faith by a responsible financial or
accounting Officer of the Company (and may include any
applicable Pro Forma Cost Savings). If any Indebtedness bears a
floating rate of interest and is being given pro forma effect,
the interest on such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the
applicable rate for the entire period (taking into account any
Interest Rate Agreement applicable to such Indebtedness if such
Interest Rate Agreement has a remaining term in excess of
12 months).
"Consolidated Interest Expense" means,
with respect to any Person for any period, the total interest
expense of such Person and its consolidated Restricted
Subsidiaries for such period on a consolidated basis in
accordance with GAAP, plus, to the extent not included in such
total interest expense, and to the extent incurred by such
Person or its Restricted Subsidiaries, without duplication:
(1) interest expense attributable to capital
    leases and the interest expense attributable to leases
    constituting part of a Sale/ Leaseback Transaction;
(2) amortization of debt discount and debt
    issuance cost;
(3) capitalized interest;
(4) non-cash interest expenses;
(5) commissions, discounts and other fees
    and charges owed with respect to letters of credit bankers'
    acceptance financing;
(6) net payments pursuant to Hedging
    Obligations;
(7) dividends paid in cash or Disqualified
    Stock in respect of all Preferred Stock of Restricted
    Subsidiaries and Disqualified Stock of such Person held by
    Persons other than such Person or a Wholly Owned Subsidiary;
(8) interest Incurred in connection with
    Investments in discontinued operations;
(9) interest actually paid by such Person or
    a Restricted Subsidiary under a Guarantee of Indebtedness of any
    other Person; and
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(10) the cash contributions to any employee
    stock ownership plan or similar trust to the extent such
    contributions are used by such plan or trust to pay interest or
    fees to any Person (other than such Person) in connection with
    Indebtedness Incurred by such plan or trust; and
less, to the extent included in such total
interest expense, (A) the amortization during such period
of capitalized financing costs associated with the Refinancing
Transactions and the 2002 and 2004 Refinancing Transactions and
(B) the amortization during such period of other
capitalized financing costs; provided, however, that, in the
case of (B), the aggregate amount of amortization relating to
such capitalized financing costs deducted in calculating
Consolidated Interest Expense shall not exceed 5% of the
aggregate amount of the financing giving rise thereto.
"Consolidated Net Income" means, with
respect to any Person for any period, the net income of such
Person and its consolidated Subsidiaries; provided, however,
that there shall not be included in such Consolidated Net Income:
(1) any net income of any Person (other than
    the referent Person) if such Person is not a Restricted
    Subsidiary, except that:
(A) subject to the exclusion contained in
    clause (4) below, the referent Person's equity in the
    net income of any such Person for such period shall be included
    in such Consolidated Net Income up to the aggregate amount of
    cash actually distributed by such Person during such period to
    the referent Person as a dividend or other distribution
    (subject, in the case of a dividend or other distribution paid
    to a Restricted Subsidiary, to the limitations contained in
    clause (3) below); and
(B) the referent Person's equity in a
    net loss of any such Person for such period shall be included in
    determining such Consolidated Net Income but only to the extent
    the referent Person or a Restricted Subsidiary funded such net
    loss with cash;
(2) any net income of any Restricted
    Subsidiary of such Person if such Restricted Subsidiary is
    subject to restrictions, directly or indirectly, on the payment
    of dividends or the making of distributions by such Restricted
    Subsidiary, directly or indirectly, to such Person (other than
    restrictions permitted under the covenant described under
    "— Certain Covenants — Limitation on
    Restrictions on Distributions from Restricted
    Subsidiaries"), except that:
(A) subject to the exclusion contained in
    clause (4) below, the Person's equity in the net
    income of any such Restricted Subsidiary for such period shall
    be included in such Consolidated Net Income up to the aggregate
    amount of cash actually distributed by such Restricted
    Subsidiary during such period to such Person or another
    Restricted Subsidiary of such Person as a dividend or other
    distribution (subject, in the case of a dividend or other
    distribution paid to another Restricted Subsidiary, to the
    limitation contained in this clause); and
(B) such Person's equity in a net loss
    of any such Restricted Subsidiary for such period shall be
    included in determining such Consolidated Net Income;
(3) any gain or loss realized upon the sale
or other disposition of any assets of such Person, its
consolidated Subsidiaries or any other Person (including
pursuant to any sale-and-leaseback arrangement) which is not
sold or otherwise disposed of in the ordinary course of business
and any gain or loss realized upon the sale or other disposition
of any Capital Stock of any Person;
(4) extraordinary gains or losses;
(5) to the extent included in total interest
expense, any amortization or write-offs of debt issuance costs
and prepayment penalties realized during such period to the
extent attributable to the Indebtedness being Refinanced in
connection with the Refinancing Transactions and the 2002 and
2004 Refinancing Transactions;
(6) the cumulative effect of a change in
accounting principles;
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(7) gains and losses realized upon the
refinancing of any Indebtedness of the Company or any Restricted
Subsidiary;
(8) non-cash compensation charges or other
non-cash expenses or charges arising from the grant of or
issuance or repricing of Capital Stock or other equity-based
awards or any amendment or substitution of any such Capital
Stock or other equity-based awards;
(9) any non-cash goodwill or non-cash asset
impairment charges subsequent to the Issue Date; and
(10) deferred rent to the extent it is
payable after the maturity date of the Notes.
"Credit Agreement" means the Credit
Agreement dated as of June 28, 2002, as amended and
restated as of the Issue Date, by and among Buffets, the
guarantors referred to therein, the lenders referred to therein
and Credit Suisse First Boston LLC, together with the related
documents thereto (including the term loans, revolving loans and
letter of credit facility thereunder, any guarantees and
security documents), as amended, extended, renewed, replaced,
restated, supplemented or otherwise modified (in whole or in
part, and without limitation as to amount, terms, conditions,
covenants and other provisions) from time to time, and any
agreement (and related document or instrument) governing
Indebtedness incurred to Refinance, in whole or in part, the
borrowings and commitments then outstanding or permitted to be
outstanding under such Credit Agreement or a successor Credit
Agreement, whether by the same or any other lender or group of
lenders (and whether in the form of commercial paper facilities,
revolving credit loans, term loans, receivables financing,
letters of credit, or any debt securities of other form of debt,
convertible debt or exchangeable debt financing).
"Currency Agreement" means in respect
of a Person any foreign exchange contract, currency swap
agreement or other similar agreement designed to protect such
Person against fluctuations in currency values.
"Default" means any event which is, or
after notice or passage of time or both would be, an Event of
Default.
"Designated Senior Indebtedness", with
respect to a Person, means:
(1) the Bank Indebtedness;
(2) Obligations, including the Guarantees,
    in respect of Buffets' Senior Notes; and
(3) any other Senior Indebtedness of such
    Person which, at the date of determination, has an aggregate
    principal amount outstanding of, or under which, at the date of
    determination, the holders thereof are committed to lend up to,
    at least
    $           million
    and is specifically designated by such Person in the instrument
    evidencing or governing such Senior Indebtedness as
    "Designated Senior Indebtedness" for purposes of the
    Indenture.
"Disqualified Stock" means, with
respect to any Person, any Capital Stock which by its terms (or
by the terms of any security into which it is convertible or for
which it is exchangeable at the option of the holder) or upon
the happening of any event:
(1) matures or is mandatorily redeemable
    pursuant to a sinking fund obligation or otherwise;
(2) is convertible or exchangeable at the
    option of the holder for Indebtedness or Disqualified
    Stock; or
(3) is mandatorily redeemable or must be
    purchased upon the occurrence of certain events or otherwise, in
    whole or in part;
in each case on or prior to the first anniversary
of the Stated Maturity of the Notes; provided, however, that any
Capital Stock that would not constitute Disqualified Stock but
for provisions thereof giving holders thereof the right to
require such Person to purchase or redeem such Capital Stock
upon the
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occurrence of an "asset sale" or
"change of control" occurring prior to the first
anniversary of the Stated Maturity of the Notes shall not
constitute Disqualified Stock if:
(1) the "asset sale" or
    "change of control" provisions applicable to such
    Capital Stock are not more favorable to the holders of such
    Capital Stock than the terms applicable to the Notes and
    described under "— Certain Covenants —
    Limitation on Sales of Assets and Subsidiary Stock" and
    "— Certain Covenants — Change of
    Control"; and
(2) any such requirement only becomes
    operative after compliance with such terms applicable to the
    Notes, including the purchase of any Notes tendered pursuant
    thereto.
The amount of any Disqualified Stock that does
not have a fixed redemption, repayment or repurchase price will
be calculated in accordance with the terms of such Disqualified
Stock as if such Disqualified Stock were redeemed, repaid or
repurchased on any date on which the amount of such Disqualified
Stock is to be determined pursuant to the Indenture; provided,
however, that if such Disqualified Stock could not be required
to be redeemed, repaid or repurchased at the time of such
determination, the redemption, repayment or repurchase price
will be the book value of such Disqualified Stock as reflected
in the most recent financial statements of such Person.
"Dividend Suspension Period" means any
period: (i) that is an Interest Deferral Period,
(ii) during which any interest deferred during any Interest
Deferral Period (including interest thereon) remains unpaid,
and/or (iii) for which the Consolidated Coverage Ratio of
the Company for the most recently ended four full fiscal
quarters for which internal financial statements are available,
is less
than                     to
1.00.
"EBITDA" means, with respect to any
Person, for any period, the sum of Consolidated Net Income, plus
the following to the extent deducted in calculating such
Consolidated Net Income:
(1) all income tax expense of such Person
    and its consolidated Restricted Subsidiaries;
(2) Consolidated Interest Expense of such
    Person and its consolidated Restricted Subsidiaries;
(3) depreciation and amortization expense of
    such Person and its consolidated Restricted Subsidiaries
    (excluding amortization expense attributable to a prepaid
    operating activity item that was paid in cash in a prior period);
(4) Restructuring Expenses;
(5) the principal component of any Sale/
    Leaseback Transaction that constitutes an operating
    lease; and
(6) all other non-cash charges of such
    Person and its consolidated Restricted Subsidiaries (including,
    without limitation, deferred rental expense, but excluding any
    such non-cash charge to the extent that it represents an accrual
    of or reserve for cash expenditures in any future period);
in each case for such period. Notwithstanding the
foregoing, the provision for taxes based on the income or
profits of, and the depreciation and amortization and non-cash
charges of, a Restricted Subsidiary shall be added to
Consolidated Net Income to compute EBITDA only to the extent
(and in the same proportion) that the net income of such
Restricted Subsidiary was included in calculating Consolidated
Net Income of such Person.
"Excess Cash" means, with respect to
any period, (A) EBITDA minus the sum of (i) cash
interest expense, (ii) deferred interest, if any, not
otherwise included in clause (i), (iii) Maintenance
Capital Expenditures, (iv) Excess Growth Capital
Expenditures, (v) cash income taxes, (vi) any items
included in clause (4) under the definition of EBITDA that
are settled in cash (excluding charges funded with proceeds from
the IDS public offering), and (vii) any payment or
repayment of indebtedness (excluding any repayments of
Indebtedness pursuant to the asset sales provisions of the
Indenture and the Credit Agreement, any refinancing and any
amounts included in (i) and (ii) above), plus
(B) Net Cash Proceeds from the sale of Tahoe Joe's Inc.
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"Excess Growth Capital Expenditures" is
the positive result, if any, of (A) capital expenditures
minus the sum of (i) Maintenance Capital Expenditures,
(ii) net cash proceeds from asset sales, including net cash
proceeds from Sale-/ Leaseback Transactions, (iii) net cash
proceeds from debt incurrence, plus (B) repayment of
Indebtedness pursuant to the asset sales provisions of the
Indenture and Credit Agreement.
"Exchange Act" means the Securities
Exchange Act of 1934, as amended.
"Exchange Conditions" mean the
following conditions all of which must be satisfied at the time
that Class B common stock of the Company is exchanged in
accordance with its terms into IDSs of the Company (the
"Exchange"):
(1) the Exchange must comply with all
    applicable laws, including, without limitation, securities laws;
(2) the Exchange must occur pursuant to an
    effective registration statement in the United States;
(3) the Exchange will not conflict with or
    cause a default under any material financing agreement;
(4) the Exchange will not cause a mandatory
    suspension of dividends or deferral of interest under any
    material financing agreement as of the measurement date
    immediately following the proposed exchange date;
(5) the Board of Directors shall determine
    in good faith that the Additional Notes represented by the IDSs
    for which the Class B common stock of the Company is
    exchanged should be treated as debt for U.S. federal income
    tax purposes;
(6) the Company delivers to the Trustee
    prior to or simultaneously with such issuance an opinion of an
    independent advisor to the effect that, after giving effect to
    the Incurrence of the Indebtedness evidenced by the Additional
    Notes represented by the IDSs for which the Class B common
    stock of the Company is exchanged and related Guarantees, the
    Company and the Guarantors are solvent;
(7) no Interest Deferral Period is occurring
    and no deferred interest or accrued interest thereon from any
    previous Interest Deferral Period has not been paid in
    full; and
(8) no Default or Event of Default has
    occurred and is continuing or will occur as a result of the
    Exchange under the Indenture.
"GAAP" means generally accepted
accounting principles in the United States of America as in
effect as of the Issue Date, including those set forth in:
(1) the opinions and pronouncements of the
    Accounting Principles Board of the American Institute of
    Certified Public Accountants;
(2) statements and pronouncements of the
    Financial Accounting Standards Board; and
(3) such other statements by such other
    entity as approved by a significant segment of the accounting
    profession.
"Guarantee" means any obligation,
contingent or otherwise, of any Person directly or indirectly
guaranteeing any Indebtedness of any Person and any obligation,
direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply
    funds for the purchase or payment of) such Indebtedness of such
    Person (whether arising by virtue of partnership arrangements,
    or by agreements to keep-well, to purchase assets, goods,
    securities or services, to take-or-pay or to maintain financial
    statement conditions or otherwise); or
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(2) entered into for the purpose of assuring
    in any other manner the obligee of such Indebtedness of the
    payment thereof or to protect such obligee against loss in
    respect thereof (in whole or in part);
provided, however, that the term
"Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding
meaning. The term "Guarantor" shall mean any Person
Guaranteeing any obligation.
"Guarantor" means each Subsidiary
Guarantor and each other Person that thereafter Guarantees the
Notes pursuant to the terms of the Indenture.
"Guaranty" means each Subsidiary
Guaranty.
"Guaranty Agreement" means a
supplemental indenture, in a form reasonably satisfactory to the
Trustee, pursuant to which a Subsidiary Guarantor guarantees the
Company's obligations with respect to the Notes on the
terms provided for in the Indenture and in such supplemental
indenture.
"Hedging Obligations" of any Person
means the obligations of such Person pursuant to any Interest
Rate Agreement or Currency Agreement.
"Holder" or "Noteholder"
means the Person in whose name a Note is registered on the
Registrar's books.
"Incur" means issue, assume, Guarantee,
incur or otherwise become liable for; provided, however, that
any Indebtedness or Capital Stock of a Person existing at the
time such Person becomes a Restricted Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed
to be Incurred by such Person at the time it becomes a
Restricted Subsidiary. The term "Incurrence" when used
as a noun shall have a correlative meaning. Solely for purposes
of determining compliance with "— Certain
Covenants — Limitation on Indebtedness",
(1) amortization of debt discount or the accretion of
principal with respect to a non-interest bearing or other
discount security and (2) the payment of regularly
scheduled interest in the form of additional Indebtedness of the
same instrument or the payment of regularly scheduled dividends
on Capital Stock in the form of additional Capital Stock of the
same clause and with the same terms will not be deemed to be the
Incurrence of Indebtedness.
"Indebtedness" means, with respect to
any Person on any date of determination (without duplication):
(1) the principal in respect of
    (A) indebtedness of such Person for money borrowed and
    (B) indebtedness evidenced by notes, debentures, bonds or
    other similar instruments for the payment of which such Person
    is responsible or liable, including, in each case, any premium
    on such indebtedness to the extent such premium has become due
    and payable;
(2) all Capital Lease Obligations of such
    Person and all Attributable Debt in respect of Sale/ Leaseback
    Transactions entered into by such Person;
(3) all obligations of such Person issued or
    assumed as the deferred purchase price of property, all
    conditional sale obligations of such Person and all obligations
    of such Person under any title retention agreement (but
    excluding trade accounts payable arising in the ordinary course
    of business);
(4) all obligations of such Person for the
    reimbursement of any obligor on any letter of credit,
    banker's acceptance or similar credit transaction (other
    than obligations with respect to letters of credit securing
    obligations (other than obligations described in
    clauses (1) through (3) above) entered into in the
    ordinary course of business of such Person to the extent such
    letters of credit are not drawn upon or, if and to the extent
    drawn upon, such drawing is reimbursed no later than the tenth
    Business Day following payment on the letter of credit);
(5) the amount of all obligations of such
    Person with respect to the redemption, repayment or other
    repurchase of any Disqualified Stock of such Person or, with
    respect to any Preferred Stock of any Subsidiary of such Person,
    the principal amount of such Preferred Stock to be determined in
    accordance with the Indenture (but excluding, in each case, any
    accrued dividends);
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(6) all obligations of the type referred to
    in clauses (1) through (5) of other Persons and all
    dividends of other Persons for the payment of which, in either
    case, such Person is responsible or liable, directly or
    indirectly, as obligor, guarantor or otherwise, including by
    means of any Guarantee;
(7) all obligations of the type referred to
    in clauses (1) through (6) of other Persons secured by
    any Lien on any property or asset of such Person (whether or not
    such obligation is assumed by such Person), the amount of such
    obligation being deemed to be the lesser of the value of such
    property or assets and the amount of the obligation so
    secured; and
(8) to the extent not otherwise included in
    this definition, Hedging Obligations of such Person.
Notwithstanding the foregoing, in connection with
the purchase by such Person or any of its Restricted
Subsidiaries of any business, the term "Indebtedness"
will exclude post-closing payment adjustments to which the
seller may become entitled to the extent such payment is
determined by a final closing balance sheet or such payment
depends on the performance of such business after the closing;
provided, however, that, at the time of closing, the amount of
any such payment is not determinable and, to the extent such
payment thereafter becomes fixed and determined, the amount is
paid within 30 days thereafter.
The amount of Indebtedness of any Person at any
date shall be the outstanding balance at such date of all
unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to
the obligation, of any contingent obligations at such date;
provided, however, that in the case of Indebtedness sold at a
discount, the amount of such Indebtedness at any time will be
the accreted value thereof at such time. Notwithstanding the
foregoing, Indebtedness shall not include any liability for
Federal, state, local or other taxes owed or owing to any
governmental entity.
"Independent Qualified Party" means an
investment banking firm, accounting firm or appraisal firm of
national standing; provided, however, that such firm is not an
Affiliate of the Company.
"Interest Rate Agreement" means in
respect of a Person any interest rate swap agreement, interest
rate cap agreement or other financial agreement or arrangement
designed to manage interest rate exposure.
"Investment" in any Person means any
direct or indirect advance, loan (other than advances to
customers in the ordinary course of business that are recorded
as accounts receivable on the balance sheet of the lender) or
other extensions of credit (including by way of Guarantee or
similar arrangement) 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 or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. Except as otherwise
provided for herein, the amount of an Investment shall be its
fair value at the time the Investment is made and without giving
effect to subsequent changes in value.
For purposes of the definition of
"Unrestricted Subsidiary", the definition of
"Restricted Payment" and the covenant described under
"— Certain Covenants — Limitation on
Restricted Payments":
(1) "Investment" shall include the
    portion (proportionate to the Company's equity interest in
    such Subsidiary) of the fair market value of the net assets of
    any Subsidiary of the Company at the time that such Subsidiary
    is designated an Unrestricted Subsidiary; provided, however,
    that upon a redesignation of such Subsidiary as a Restricted
    Subsidiary, the Company shall be deemed to continue to have a
    permanent "Investment" in an Unrestricted Subsidiary
    equal to an amount (if positive) equal to (A) the
    Company's "Investment" in such Subsidiary at the
    time of such redesignation less (B) the portion
    (proportionate to the Company's equity interest in such
    Subsidiary) of the fair market value of the net assets of such
    Subsidiary at the time of such redesignation; and
(2) any property transferred to or from an
    Unrestricted Subsidiary shall be valued at its fair market value
    at the time of such transfer, in each case as determined in good
    faith by the Board of Directors of the Company.
"Investor Rights Agreement" means the
Investor Rights Agreement
dated                     ,
2004 among the holders of Class B common stock of the
Company.
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"Issue Date" means the date on which
the Notes are originally issued, such date
being                     ,
2004.
"Lien" means any mortgage, pledge,
security interest, encumbrance, lien or charge of any kind
(including any conditional sale or other title retention
agreement or lease in the nature thereof), provided that any
property that is the subject of a Sale/ Leaseback Transaction
shall be deemed to be covered by a Lien.
"Maintenance Capital Expenditures"
means, for any period, capital expenditures relating to
(i) the renovation of existing units, (ii) the
purchase of equipment for existing units, and (iii) the
purchase of information systems for the Company's offices,
units or otherwise by the Company or any of its Restricted
Subsidiaries.
"Net Available Cash" from an Asset
Disposition means cash payments received therefrom (including
any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or
otherwise and proceeds from the sale or other disposition of any
securities received as consideration, but only as and when
received, but excluding any other consideration received in the
form of assumption by the acquiring Person of Indebtedness or
other obligations relating to such properties or assets or
received in any other noncash form), in each case net of:
(1) all legal, title and recording tax
    expenses, underwriting discounts, commissions and other fees and
    expenses incurred (including, without limitation, fees and
    expenses of counsel, accountants and investment bankers), and
    all Federal, state, provincial, foreign and local taxes required
    to be accrued as a liability under GAAP, as a consequence of
    such Asset Disposition;
(2) all payments made on any Indebtedness
    which is secured by any assets subject to such Asset
    Disposition, in accordance with the terms of any Lien upon or
    other security agreement of any kind with respect to such
    assets, or which must by its terms, or in order to obtain a
    necessary consent to such Asset Disposition, or by applicable
    law, be repaid out of the proceeds from such Asset Disposition;
(3) all distributions and other payments
    required to be made to minority interest holders in Restricted
    Subsidiaries as a result of such Asset Disposition;
(4) the deduction of appropriate amounts
    provided by the seller as a reserve, in accordance with GAAP,
    against any liabilities associated with the property or other
    assets disposed in such Asset Disposition and retained by the
    Company or any Restricted Subsidiary after such Asset
    Disposition; and
(5) any portion of the purchase price from
    an Asset Disposition placed in escrow, whether as a reserve for
    adjustment of the purchase price, for satisfaction of
    indemnities in respect of such Asset Disposition or otherwise in
    connection with that Asset Disposition;
provided,
    however
, that upon the termination of such escrow, Net
    Available Cash will be increased by any portion of funds in the
    escrow that are released to the Company or any Restricted
    Subsidiary.
"Net Cash Proceeds", with respect to
any issuance or sale of Capital Stock, means the cash proceeds
of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement
agents' fees, discounts or commissions and brokerage,
consultant and other fees actually incurred in connection with
such issuance or sale and net of taxes paid or payable as a
result thereof.
"Obligations" means with respect to any
Indebtedness all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, and other
amounts payable pursuant to the documentation governing such
Indebtedness.
"Permitted Equipment Lease Financings"
means one or more Sale/ Leaseback Transactions relating to
equipment and/or leasehold improvements.
"Permitted Holders" means
(i) Caxton-Iseman Investments L.P., Caxton Associates, LLC,
Sentinel Capital Partners, II, L.P., Frederick J. Iseman,
Robert M. Rosenberg, Steven M. Lefkowitz, Robert A,
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Ferris, Roe H. Hatlen and David S. Lobel and any
other Person who is a controlled Affiliate of any of the
foregoing and any member of senior management of the Company and
(ii) any Related Party of any of the foregoing.
"Permitted Investment" means an
Investment by the Company or any Restricted Subsidiary in:
(1) the Company, a Restricted Subsidiary or
    a Person that will, upon the making of such Investment, become a
    Restricted Subsidiary; provided, however, that the primary
    business of such Restricted Subsidiary is a Related Business;
(2) another Person if as a result of such
    Investment such other Person is merged or consolidated with or
    into, or transfers or conveys all or substantially all its
    assets to, the Company or a Restricted Subsidiary; provided,
    however, that such Person's primary business is a Related
    Business;
(3) cash and Temporary Cash Investments;
(4) receivables owing to the Company or any
    Restricted Subsidiary if created or acquired in the ordinary
    course of business and payable or dischargeable in accordance
    with customary trade terms; provided, however, that such trade
    terms may include such concessionary trade terms as the Company
    or any such Restricted Subsidiary deems reasonable under the
    circumstances;
(5) payroll, travel and similar advances to
    cover matters that are expected at the time of such advances
    ultimately to be treated as expenses for accounting purposes and
    that are made in the ordinary course of business;
(6) loans or advances to employees made in
    the ordinary course of business of the Company or such
    Restricted Subsidiary;
(7) stock, obligations or securities
    received in settlement of debts created in the ordinary course
    of business and owing to the Company or any Restricted
    Subsidiary or in satisfaction of judgments;
(8) any Person to the extent such Investment
    represents the non-cash portion of the consideration received
    for an Asset Disposition as permitted pursuant to the covenant
    described under "— Certain Covenants —
    Limitation on Sales of Assets and Subsidiary Stock";
(9) any Person where such Investment was
    acquired by the Company or any of its Restricted Subsidiaries
    (a) in exchange for any other Investment or accounts
    receivable held by the Company or any such Restricted Subsidiary
    in connection with or as a result of a bankruptcy, workout,
    reorganization or recapitalization of the issuer of such other
    Investment or accounts receivable or (b) as a result of a
    foreclosure by the Company or any of its Restricted Subsidiaries
    with respect to any secured Investment or other transfer of
    title with respect to any secured Investment in default;
(10) any Person to the extent such
    Investment consists of Hedging Obligations otherwise permitted
    under the covenant described under "— Certain
    Covenants — Limitation on Indebtedness"; and
(11) additional Investments made after the
    Issue Date in an aggregate amount which, together with all other
    Investments made pursuant to this clause (10) that are
    then outstanding, do not exceed the greater of (a)
    $           million
    and (b)      % of Total Assets.
"Person" means any individual,
corporation, partnership, limited liability company, joint
venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock", as applied to the
Capital Stock of any Person, means 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 shares of Capital Stock of any
other class of such Person.
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"principal" of a Note means the
principal of the Note plus the premium, if any, payable on the
Note which is due or overdue or is to become due at the relevant
time.
"Pro Forma Cost Savings" means, with
respect to any period, the reduction in costs or other
adjustments (including, solely in the case of clause (3)(i)
below, an annualization of EBITDA), as applicable, that are
(1) directly attributable to an asset
    acquisition and calculated on a basis that is consistent with
    Regulation S-X under the Securities Act in effect and as
    applied as of the Issue Date,
(2) implemented by the Company or the
    business that was the subject of any such asset acquisition, in
    each case, within one year prior to the date of the asset
    acquisition and that are supportable and quantifiable by the
    underlying accounting records of the Company or such
    business, or
(3) in connection with any acquisition of
    restaurants or a Person engaged in a Related Business,
    (i) the EBITDA reasonably estimated by the Company's
    chief financial officer associated with any such acquired
    restaurants that were operated for at least three months but no
    longer than twelve months by the business that was the subject
    of any such acquisition and (ii) cost savings reasonably
    estimated by the Company's chief financial officer and
    reasonably expected by such chief financial officer to be
    implemented within six months of the consummation of such
    acquisition directly attributable to closing such acquired
    restaurants or to headquarters consolidation, including
    consolidation of functions.
as if, in the case of each of clauses (1),
(2) and (3), all such reductions in costs or other
adjustments had been effected as of the beginning of such period.
"Refinance" means, in respect of any
Indebtedness, to refinance, extend, renew, refund, repay,
prepay, redeem, defease or retire, or to issue other
Indebtedness in exchange or replacement for, in whole or in
part, such indebtedness. "Refinanced" and
"Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means
Indebtedness that Refinances any Indebtedness of the Company or
any Restricted Subsidiary existing on the Issue Date or Incurred
in compliance with the Indenture, including Indebtedness that
Refinances Refinancing Indebtedness; provided, however, that:
(1) such Refinancing Indebtedness has a
    Stated Maturity no earlier than the Stated Maturity of the
    Indebtedness being Refinanced;
(2) such Refinancing Indebtedness has an
    Average Life at the time such Refinancing Indebtedness is
    Incurred that is equal to or greater than the Average Life of
    the Indebtedness being Refinanced; and
(3) such Refinancing Indebtedness has an
    aggregate principal amount (or if Incurred with original issue
    discount, an aggregate issue price) that is equal to or less
    than the aggregate principal amount (or if Incurred with
    original issue discount, the aggregate accreted value) then
    outstanding or committed (plus (i) accrued interest on the
    Indebtedness being Refinanced not to exceed the amount of such
    accrued interest for one fiscal quarter and (ii) fees and
    expenses, including any premium and defeasance costs) under the
    Indebtedness being Refinanced;
provided further, however, that Refinancing
Indebtedness shall not include (A) Indebtedness of a Subsidiary
that Refinances Indebtedness of the Company or (B) Indebtedness
of the Company or a Restricted Subsidiary that Refinances
Indebtedness of an Unrestricted Subsidiary.
"Refinancing Transactions" means the
offering of the Notes, the Class A common stock, the
Class B common stock, the exchange of Class A common
stock and Notes for Class B common stock, the amendment and
restatement of the Credit Agreement, the use of the proceeds
from these transactions to repurchase and/or redeem the
Company's 13 7/8% Notes and repurchase the
Buffets Existing Notes and the entering into of the Investor
Rights Agreement and the performance of all obligations
thereunder.
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"Related Business" means any business
in which the Company was engaged on the Issue Date and any
business that in the good faith judgment of the Board of
Directors is related, ancillary or complementary thereto, arises
therefrom or is necessary or desirable to facilitate such
business.
"Related Party" means (1) any
controlling stockholder, controlling member, general partner,
majority owned Subsidiary, or spouse or immediate family member
(in the case of an individual) of any Permitted Holder,
(2) any estate, trust, corporation, partnership or other
entity, the beneficiaries, stockholders, partners, owners or
Persons holding a controlling interest of which consist solely
of one or more Permitted Holders and/or such other Persons
referred to in the immediately preceding clause (1) or
(3) any executor, administrator, trustee, manager, director
or other similar fiduciary of any Person referred to in the
immediately preceding clause (2) acting solely in such
capacity.
"Representative" means with respect to
a Person any trustee, agent or representative (if any) for an
issue of Senior Indebtedness of such Person.
"Restricted Payment" with respect to
any Person means:
(1) the declaration or payment of any
    dividends or any other distributions of any sort in respect of
    its Capital Stock (including any payment in connection with any
    merger or consolidation involving such Person) or similar
    payment to the direct or indirect holders of its Capital Stock
    (other than dividends or distributions payable solely in its
    Capital Stock (other than Disqualified Stock) and dividends or
    distributions payable solely to the Company or a Restricted
    Subsidiary, and other than pro rata dividends or other
    distributions made by a Subsidiary that is not a Wholly Owned
    Subsidiary to minority stockholders (or owners of an equivalent
    interest in the case of a Subsidiary that is an entity other
    than a corporation));
(2) the purchase, redemption or other
    acquisition or retirement for value of any Capital Stock of the
    Company held by any Person or of any Capital Stock of a
    Restricted Subsidiary held by any Affiliate of the Company
    (other than a Restricted Subsidiary), including the exercise of
    any option to exchange any Capital Stock (other than into
    Capital Stock of the Company that is not Disqualified Stock);
(3) the purchase, repurchase, redemption,
    defeasance or other acquisition or retirement for value, prior
    to scheduled maturity, scheduled repayment or scheduled sinking
    fund payment of any Subordinated Obligations of the Company
    (other than the purchase, repurchase or other acquisition of
    Subordinated Obligations of the Company purchased in
    anticipation of satisfying a sinking fund obligation, principal
    installment or final maturity, in each case due within one year
    of the date of such purchase, repurchase or other
    acquisition); or
(4) the making of any Investment (other than
    a Permitted Investment) in any Person.
"Restricted Subsidiary" of any Person
means any Subsidiary of such Person that is not an Unrestricted
Subsidiary.
"Restructuring Expenses" means losses,
expenses and charges incurred in connection with restructuring
within the Company and/or one or more of its Restricted
Subsidiaries, including in connection with integration of
acquired businesses or Persons, disposition of one or more
Subsidiaries or businesses, exiting of one or more lines of
business and relocation or consolidation of facilities,
including severance, lease termination and other
non-ordinary-course, non-operating costs and expenses in
connection therewith.
"Revolving Credit Facility" means the
revolving credit facility and letter of credit facility
contained in the Credit Agreement and any other facilities or
financing arrangements (including commercial paper facilities,
revolving credit loans, term loans, receivables financing
letters of credit, or any debt securities or other form of debt,
convertible debt or exchangeable debt financing) that Refinance
or replace, in whole or in part, any such revolving credit
facility, letter of credit facility or financing arrangement.
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"Sale/ Leaseback Transaction" means an
arrangement relating to property owned by the Company or a
Restricted Subsidiary on the Issue Date or thereafter acquired
by the Company or a Restricted Subsidiary whereby the Company or
a Restricted Subsidiary transfers such property to a Person and
the Company or a Restricted Subsidiary leases it from such
Person.
"SEC" means the U.S. Securities
and Exchange Commission.
"Secured Indebtedness" means any
Indebtedness of the Company secured by a Lien.
"Senior Indebtedness" means with
respect to any Person:
(1) Indebtedness of such Person, whether
    outstanding on the Issue Date or thereafter Incurred; and
(2) accrued and unpaid interest (including
    interest accruing on or after the filing of any petition in
    bankruptcy or for reorganization relating to such Person whether
    or not post-filing interest is allowed in such proceeding) in
    respect of (A) indebtedness of such Person for money
    borrowed and (B) indebtedness evidenced by notes,
    debentures, bonds or other similar instruments for the payment
    of which such Person is responsible or liable
unless, in the case of clauses (1) and (2),
in the instrument creating or evidencing the same or pursuant to
which the same is outstanding, it is provided that such
obligations are subordinate or pari passu in right of payment to
the Notes or the Subsidiary Guaranty of such Person, as the case
may be; provided, however, that Senior Indebtedness shall not
include:
(1) any obligation of such Person to any
    Subsidiary of the Company;
(2) any liability for Federal, state, local
    or other taxes owed or owing by such Person;
(3) any accounts payable or other liability
    to trade creditors arising in the ordinary course of business
    (including guarantees thereof or instruments evidencing such
    liabilities);
(4) any Indebtedness of such Person (and any
    accrued and unpaid interest in respect thereof) which is
    subordinate or junior in right of payment to any other
    Indebtedness or other obligation of such Person;
(5) that portion of any Indebtedness which
    at the time of Incurrence is Incurred in violation of the
    Indenture.
"Senior Subordinated Indebtedness"
means, with respect to a Person, the Notes (in the case of the
Company), the Subsidiary Guaranty (in the case of a Subsidiary
Guarantor) and any other Indebtedness of such Person that
specifically provides that such Indebtedness is to rank pari
passu with the Notes or such Subsidiary Guaranty, as the case
may be, in right of payment and is not subordinated by its terms
in right of payment to any Indebtedness or other obligation of
such Person which in each case is not Senior Indebtedness of
such Person.
"Significant Subsidiary" means any
Restricted Subsidiary that would be a "Significant
Subsidiary" of the Company within the meaning of
Rule 1-02 under Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect
to any security, the date specified in such security as the
fixed date on which the final payment of principal of such
security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for
the repurchase of such security at the option of the holder
thereof upon the happening of any contingency unless such
contingency has occurred).
"Subordinated Obligation" means, with
respect to a Person, any Indebtedness of such Person (whether
outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Notes or a
Subsidiary Guaranty of such Person, as the case may be, pursuant
to a written agreement to that effect.
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"Subsidiary" means, with respect to any
Person, any corporation, association, partnership or other
business entity of which more than 50% of the total voting power
of shares of Voting Stock is at the time owned or controlled,
directly or indirectly, by:
(1) such Person;
(2) such Person and one or more Subsidiaries
    of such Person; or
(3) one or more Subsidiaries of such Person.
"Subsidiary Guarantor" means each
Subsidiary of the Company that executes the Indenture as a
guarantor and each other Subsidiary of the Company that
thereafter guarantees the Notes pursuant to the terms of the
Indenture.
"Subsidiary Guaranty" means a Guarantee
by a Subsidiary Guarantor of the Company's obligations with
respect to the Notes.
"Temporary Cash Investments" means any
of the following:
(1) any investment in direct obligations of
    the United States of America or any agency thereof or
    obligations guaranteed by the United States of America or any
    agency thereof;
(2) investments in time deposit accounts,
    certificates of deposit and money market deposits maturing
    within one year of the date of acquisition thereof issued by a
    bank or trust company which is organized under the laws of the
    United States of America, any state thereof or any foreign
    country recognized by the United States of America, and which
    bank or trust company has capital, surplus and undivided profits
    aggregating in excess of $50.0 million (or the foreign
    currency equivalent thereof) and has outstanding debt which is
    rated "A" (or such similar equivalent rating) or
    higher by at least one nationally recognized statistical rating
    organization (as defined in Rule 436 under the Securities
    Act) or any money-market fund sponsored by a registered broker
    dealer or mutual fund distributor;
(3) repurchase obligations with a term of
    not more than 30 days for underlying securities of the
    types described in clause (1) above entered into with a
    bank meeting the qualifications described in clause (2)
    above;
(4) investments in commercial paper,
    maturing not more than 90 days after the date of
    acquisition, issued by a person (other than an Affiliate of the
    Company) organized and in existence under the laws of the United
    States of America or any foreign country recognized by the
    United States of America with a rating at the time as of which
    any investment therein is made of "P-1" (or higher)
    according to Moody's Investors Service, Inc. or
    "A-1" (or higher) according to Standard and
    Poor's, a division of the McGraw-Hill Companies; and
(5) investments in securities with
    maturities of six months or less from the date of acquisition
    issued or fully guaranteed by any state, commonwealth or
    territory of the United States of America, or by any political
    subdivision or taxing authority thereof, and rated at least
    "A" by Standard & Poor's, a division of
    the McGraw-Hill Companies, or "A" by Moody's
    Investors Service, Inc.
"Term Loan Facility" means the
term loan facility initially contained in the Credit Agreement
and any other facility or financing arrangement (including
commercial paper facilities, revolving credit loans, term loans,
receivables financing, letters of credit, or any debt securities
or other form of debt, convertible debt or exchangeable debt
financing) that Refinances or replaces, in whole or in part, any
such facility or financing arrangement.
"Total Assets" means the total
consolidated assets of the Company and its Restricted
Subsidiaries, as set forth on the Company's consolidated
balance sheet for the most recently ended fiscal quarter for
which internal financial statements are available.
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"Unrestricted Subsidiary" means:
(1) any Subsidiary of the Company that at
    the time of determination shall be designated an Unrestricted
    Subsidiary by the Board of Directors of the Company in the
    manner provided below; and
(2) any Subsidiary of an Unrestricted
    Subsidiary.
The Board of Directors of the Company may
designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary or any of its Subsidiaries
owns any Capital Stock or Indebtedness of, or holds any Lien on
any property of, the Company or any other Subsidiary of the
Company that is not a Subsidiary of the Subsidiary to be so
designated; provided, however, that either (A) the
Subsidiary to be so designated has total assets of $1,000 or
less or (B) if such Subsidiary has assets greater than
$1,000, such designation would be permitted under the covenant
described under "— Certain Covenants —
Limitation on Restricted Payments." In no event may the
Company designate Buffets to be an Unrestricted Subsidiary.
The Board of Directors of the Company may
designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that immediately after giving
effect to such designation (A) (i) the Company could Incur
$1.00 of additional Indebtedness under
paragraph (a) of the covenant described under
"— Certain Covenants — Limitation on
Indebtedness" or (ii) the Consolidated Coverage Ratio
for the Company and its Restricted Subsidiaries would be greater
than the Consolidated Coverage Ratio for the Company and its
Restricted Subsidiaries immediately before giving effect to such
designation and (B) no Default shall have occurred and be
continuing. Any such designation by the Board of Directors of
the Company shall be evidenced to the Trustee by promptly filing
with the Trustee a copy of the resolution of the Board of
Directors of the Company giving effect to such designation and
an officers' certificate certifying that such designation
complied with the foregoing provisions.
"U.S. Government Obligations"
means direct obligations (or certificates representing an
ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United
States of America is pledged and which are not callable at the
issuer's option.
"Voting Stock" of a Person means all
classes of Capital Stock or other interests (including
partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or
trustees thereof.
"Wholly Owned Subsidiary" means a
Restricted Subsidiary all the Capital Stock of which (other than
directors' qualifying shares) is owned by the Company or
one or more Wholly Owned Subsidiaries.
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IDSs ELIGIBLE FOR FUTURE SALE
Future sales or the availability for sale of
substantial amounts of IDSs or shares of our Class A common
stock or a significant principal amount of our senior
subordinated notes in the public market could adversely affect
prevailing market prices and could impair our ability to raise
capital through future sales of our securities.
Upon completion of this
offering,                     IDSs
will be outstanding. The number of IDSs to be outstanding after
completion of this offering excludes IDSs issuable upon the
conversion of shares of our Class B common stock issued in
exchange for shares of our common stock owned by our existing
stockholders.
Of these securities,
the                     IDSs
sold in this offering will be freely tradable without
restriction or further registration under the Securities Act,
except for any IDSs that may be acquired by an affiliate of ours
as that term is defined in Rule 144 under the Securities
Act, which will be subject to the resale limitations of
Rule 144. The
remaining                     IDSs
outstanding will be restricted securities, as that term is used
in Rule 144, and may in the future be sold without
restriction under the Securities Act to the extent permitted by
Rule 144 or any reoffer prospectus under the Securities Act.
In general, under Rule 144 as currently in
effect, a person (or persons whose IDSs are aggregated) who has
beneficially owned its, his or her IDSs or the underlying shares
of Class A common stock for at least one year from the date
such securities were acquired from us or an affiliate of ours
would be entitled to sell within any three-month period a number
of IDSs or underlying shares of Class A common stock that
does not exceed the greater of one percent of the then
outstanding IDSs or underlying shares of Class A common
stock, respectively, and the average weekly trading volume of
the IDSs or underlying shares of Class A common stock,
respectively, during the four calendar weeks preceding a sale by
such person. Sales under Rule 144 are also subject to
certain manner of sale provisions, notice requirements and the
availability of current public information about us. Under
Rule 144, however, a person who has held restricted
securities for a minimum of two years from the later of the date
such securities were acquired from us or an affiliate of ours
and who is not, and for the three months prior to the sale of
such restricted securities has not been, an affiliate of ours,
is free to sell such restricted securities without regard to
volume, manner of sale and the other limitations contained in
Rule 144. The foregoing summary of Rule 144 is not
intended to be a complete discussion thereof.
We, our directors, executive officers and certain
of our existing stockholders have agreed not to offer, sell,
contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Securities and Exchange Commission
a registration statement under the Securities Act relating to,
any IDSs, shares of our Class A common stock, shares of our
Class B common stock or senior subordinated notes or any
securities convertible into or exchangeable or exercisable for
any such securities, or publicly disclose the intention to make
any offer, sale, pledge, disposition or filing, without the
prior written consent of Credit Suisse First Boston LLC for a
period of 180 days after the date of this prospectus,
subject to certain exceptions.
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MATERIAL U.S. FEDERAL INCOME TAX
CONSEQUENCES
The following discussion describes the material
U.S. federal income tax consequences associated with the
purchase, ownership, and disposition of IDSs, senior
subordinated notes and Class A common stock as of the date
hereof by U.S. Holders (as defined below) and
Non-U.S. Holders (as defined below). Except where noted,
this discussion deals only with IDSs, senior subordinated notes
and common stock held as capital assets within the meaning of
Section 1221 of the Internal Revenue Code of 1986, as
amended (the "Code") by holders who acquired IDSs
or senior subordinated notes upon their original issuance at
their initial offering price. This discussion does not cover all
aspects of U.S. federal income taxation that may be
relevant to the acquisition, ownership or disposition of IDSs,
notes and Class A common stock by prospective investors in
light of their particular circumstances. In particular, this
discussion does not address all of the tax considerations that
may be relevant to certain types of investors subject to special
treatment under U.S. federal income tax laws, such as:
•
dealers in securities or currencies,
•
banks and financial institutions,
•
broker-dealers,
•
regulated investment companies,
•
real estate investment trusts,
•
tax-exempt entities,
•
insurance companies,
•
persons holding IDSs, senior subordinated notes
    or Class A common stock as a part of a hedging, integrated,
    conversion or constructive sale transaction or a straddle,
•
traders in securities that elect to use a
    mark-to-market method of accounting for their securities
    holdings,
•
persons liable for alternative minimum tax,
•
investors in pass-through entities, or
•
U.S. 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, existing and proposed Treasury
regulations promulgated thereunder and administrative rulings,
official pronouncements and judicial interpretations thereof,
all as of the date hereof, and such authorities may be repealed,
revoked, modified or subject to differing interpretations,
possibly on a retroactive basis, so as to result in
U.S. federal income tax consequences different from those
discussed below. The statements of law and legal conclusions in
this discussion constitute the opinion of our counsel, Paul,
Weiss, Rifkind, Wharton & Garrison LLP. the opinion is
based in part on facts described in this prospectus and on
certain other opinions, assumptions, representations and
determinations. Any alteration or incorrectness of such facts,
opinions, assumptions, representations or determinations could
adversely affect such opinion.
A "U.S. Holder" of IDSs, senior
subordinated notes or Class A common stock means a holder
that is for U.S. federal income tax purposes:
•
an individual citizen or resident of the United
    States,
•
a corporation (or other entity taxable as a
    corporation) created or organized in or under the laws of the
    United States or any state thereof or the District of Columbia,
•
an estate the income of which is subject to
    U.S. federal income taxation regardless of its
    source, or
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•
a trust if it (1) is subject to the primary
    supervision of a court within the United States and one or more
    U.S. persons have the authority to control all substantial
    decisions of the trust or (2) has a valid election in
    effect under applicable Treasury regulations to be treated as a
    U.S. person.
If a partnership or other entity or arrangement
treated as a partnership for U.S. federal income tax
purposes holds IDSs, senior subordinated notes or Class A
common stock, the tax treatment of a partner will generally
depend upon the status of the partner and the activities of the
partnership. If you are a partner of a partnership holding IDSs,
senior subordinated notes or Class A common stock, we urge
you to consult your own tax advisor.
No statutory, administrative or judicial
authority directly addresses the treatment of IDSs or
instruments similar to IDSs for U.S. federal income tax
purposes. In addition, no rulings have been or will be sought
from the Internal Revenue Service (the "IRS") with
respect to any of the U.S. federal income tax issues
discussed in this summary. As a result, we cannot assure you
that the IRS or the courts will agree with the tax consequences
described herein. A different treatment from that assumed below
could adversely affect the amount, timing and character of
income, gain or loss in respect of an investment in the IDSs,
and, in the case of Non-U.S. Holders (as defined below),
could subject such holders to U.S. federal withholding
taxes with regard to the senior subordinated notes in the same
manner as they will be with regard to our common stock. Payments
to Non-U.S. Holders would not be grossed-up for any such
taxes. In addition, a different treatment could result in the
loss by us of all or part of the deduction for interest paid on
the senior subordinated notes. If you are considering the
purchase of IDSs or senior subordinated notes, we urge you to
consult your own tax advisor concerning the particular
U.S. federal income tax consequences to you of the
purchase, ownership and disposition of IDSs, senior subordinated
notes, or Class A common stock as well as any consequences
to you arising under the laws of any other taxing jurisdiction.
Consequences to U.S. Holders
IDSs
Allocation of Purchase
Price.
Your acquisition of IDSs should
be treated for U.S. federal income tax purposes as if you
actually purchased the shares of our Class A common stock
and the senior subordinated notes underlying the IDSs and, by
purchasing IDSs, you will agree to such treatment. The remainder
of this discussion assumes that the acquisition of IDSs will be
treated as an acquisition of shares of our common stock and
senior subordinated notes.
The purchase price of each IDS will be allocated
between the share of Class A common stock and the senior
subordinated note in proportion to their respective fair market
values at the time of purchase. Such allocation will establish
your initial tax basis in the share of Class A common stock
and the senior subordinated note. We expect to report the
initial fair market value of each share of common stock as
$          and
the initial fair market value of each senior subordinated note
as
$          ,
and by purchasing IDSs, you will agree to such allocation and
that you will not take a contrary position for any purpose,
including tax reporting purposes. This allocation, however, is
not binding on the IRS, and the IRS may challenge this
allocation. If this allocation is not respected, it is possible
that the senior subordinated notes will be treated as having
been issued with more than a de minimis amount of original issue
discount (referred to as OID), or amortizable bond premium, and
your initial tax basis in our Class A common stock would be
higher, or lower, respectively. You generally would have to
include original issue discount in income in advance of the
receipt of cash attributable to that income and would be able to
elect to amortize bond premium over the remaining term of the
notes. The remainder of this discussion assumes that this
allocation of the purchase price will be respected.
Separation and
Recombination.
If you separate an IDS
into a share of common stock and a senior subordinated note or
recombine a share of common stock and a senior subordinated note
to form an IDS, you generally should not recognize gain or loss
upon the separation of an IDS or a recombination of a share of
common stock and senior subordinated note into an IDS. You will
continue to take into account items of income or deduction
otherwise includible or deductible, with respect to the share of
Class A
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common stock and the senior subordinated note,
and your tax basis in the share of Class A common stock and
the senior subordinated note will not be affected by the
separation or recombination.
Senior Subordinated Notes
Characterization of Senior Subordinated
Notes.
Our counsel, Paul, Weiss,
Rifkind, Wharton & Garrison LLP, is of the opinion that
the senior subordinated notes should be treated as debt for
U.S. federal income tax purposes, and based upon that
opinion, we believe that the senior subordinated notes should be
so treated. A copy of our counsel's opinion will be filed
as an exhibit to the registration statement of which this
prospectus is a part. Such opinion is based in part on facts
described in this prospectus and on various other opinions,
assumptions, on representations and determinations, (including
those discussed in more detail in the following paragraphs). Any
alteration or incorrectness of such facts, opinions,
assumptions, representations or determinations could adversely
affect such opinion, and such opinion is not binding on the IRS
or the courts. We intend and, by acquiring senior subordinated
notes (directly or in the form of IDSs), each holder agrees, to
treat the senior subordinated notes as our indebtedness for all
purposes, including tax purposes. Assuming such treatment is
respected, stated interest on the senior subordinated notes will
generally be taxable to you as ordinary income at the time it is
paid or accrued in accordance with your method of accounting for
U.S. federal income tax purposes.
The determination of whether an instrument is
treated as debt or equity for U.S. federal income tax
purposes is based on all relevant facts and circumstances. There
is no clear statutory definition of debt and its
characterization is governed by principles developed in case
law, which analyzes numerous factors (with no one factor being
dispositive) that are intended to identify the economic
substance of the investor's interest in the corporation.
Our determination that the senior subordinated notes should be
treated as debt for U.S. federal income tax purposes, and
the opinions of counsel to this effect referred to above, rely
upon certain representations and determinations by us and
Duff & Phelps, LLC ("Duff & Phelps")
including, without limitation, representations and
determinations substantially to the effect that:
•
the principal amount, term, interest rate, issue
    price, security and other material provisions of the senior
    subordinated notes, when taken together and considered as a
    whole, are commercially reasonable and are substantially similar
    to the terms to which an unrelated third party lender bargaining
    at arm's length would reasonably agree;
•
the aggregate principal amount of the senior
    subordinated notes in relation to the aggregate amount of our
    capital is commercially reasonable under the circumstances; and
•
the ratio of our aggregate outstanding
    indebtedness to the fair market value of our equity following
    the Transactions will not
    exceed       to 1.
The opinion of Duff & Phelps relies on,
and assumes without independent investigation the accuracy of,
the financial data provided by us and the descriptions of the
securities set forth in this prospectus. Such opinion is being
provided solely for the purpose of assisting us and our special
counsel regarding certain U.S. federal income tax
determinations and opinions referred to in this prospectus and
certain financial accounting matters. Therefore, such opinion
does not constitute a recommendation to invest in our
securities, an expression of a viewpoint as to our business
prospects or the fairness or merits of the offering.
Duff & Phelps is not providing any opinions as to any
legal questions or tax and accounting matters. In addition, the
opinions of Duff & Phelps as to the commercial
reasonableness and valuation of our securities are based on the
comparison of our securities and the offering with other
securities and transactions deemed comparable, and valuation
methodologies deemed appropriate, by Duff & Phelps. The
opinion of Duff & Phelps is rendered at, and speaks
only as of, the closing of this offering.
Our counsel's opinion also relies on our
representation that we expect to make all interest and principal
payments on the senior subordinated notes in accordance with
their terms.
In light of the representations and
determinations described above and their relevance to several of
the factors analyzed in case law, and taking into account the
facts and circumstances relating to the issuance of the senior
subordinated notes, we (and our counsel) are of the view that
the senior
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subordinated notes should be treated as debt for
U.S. federal income tax purposes. However, there is no
authority that directly addresses the tax treatment of
securities with terms substantially similar to the terms of the
senior subordinated notes or offered under circumstances such as
the offering (i.e., offered as a unit consisting of senior
subordinated notes and Class A common stock). In light of
this absence of direct authority, neither we nor our counsel can
conclude with certainty that the senior subordinated notes will
be treated as debt for U.S. federal income tax purposes.
If the senior subordinated notes were treated as
equity rather than debt for U.S. federal income tax
purposes, then the stated interest on the senior subordinated
notes would generally be treated as a dividend to the extent of
our current or accumulated earnings and profits (as determined
under U.S. federal income tax principles), but those
amounts would likely not qualify for the special rate described
below under "— Class A Common
Stock — Dividends," and interest on the senior
subordinated notes would not be deductible by us for
U.S. federal income tax purposes. Our inability to deduct
interest on the senior subordinated notes could materially
increase our taxable income and, thus, our U.S. federal
income tax liability. This would reduce our after-tax cash flow,
thereby adversely affecting our ability to make payments on the
senior subordinated notes and the common stock. We would also be
liable for withholding taxes on any interest payments previously
made by us to Non-U.S. Holders that are recharacterized as
dividends for U.S. federal income tax purposes. In
addition, repayment of the senior subordinated notes by early
redemption or otherwise, would be treated as a redemption of
equity, which could be treated as a dividend to Holders pursuant
to applicable U.S. federal income tax rules.
Sale, Exchange or Retirement of Senior
Subordinated Notes.
Upon the sale,
exchange, retirement or other disposition of an IDS, you will be
treated as having sold, exchanged, retired or disposed of the
senior subordinated note underlying the IDS. Upon the sale,
exchange, retirement or other disposition of a senior
subordinated note, you will recognize gain or loss equal to the
difference between the portion of the proceeds allocable to, or
received for, your senior subordinated note (less an amount
equal to any accrued and unpaid interest which will be treated
as a payment of interest for U.S. federal income tax
purposes) and your adjusted tax basis in the senior subordinated
note. As described above under "— Consequences to
U.S. Holders — IDSs — Allocation of
Purchase Price," your tax basis in a senior subordinated
note generally will be the portion of the purchase price of your
IDSs allocable to the senior subordinated note, or your purchase
price for the senior subordinated note, as the case may be, less
any principal payments thereon and increased by any OID (if any)
previously included in your income. Such gain or loss will
generally be capital gain or loss. Capital gains of individuals
derived in respect of capital assets held for more than one year
are generally eligible for reduced rates of taxation. The
deductibility of capital losses is subject to limitations.
Deferral of
Interest.
Based on our detailed
financial forecasts and the fact that we have no present plan or
intention to exercise our right to defer interest, we believe
the likelihood of deferral of interest payments on the senior
subordinated notes is remote under applicable U.S. Treasury
regulations. Under those U.S. Treasury regulations, a
"remote" contingency that stated interest will not be
timely paid is ignored in determining whether a debt instrument
is issued with OID. However, if we were to defer payments of
interest on the senior subordinated notes, you would be subject
to the special OID rules and would be required to include
amounts in income before the receipt of cash payments. If
deferral of any payment of interest were determined not to be
"remote," then the senior subordinated notes would be
treated as issued with OID at the time of issuance. In such
case, all stated interest on the senior subordinated notes would
be treated as OID, with the consequence that all holders would
be required to include the yield on the senior subordinated
notes in income as it accrued on a constant yield basis,
possibly in advance of their receipt of the associated cash and
regardless of their method of tax accounting.
Additional
Issuances.
Subsequently issued senior
subordinated notes may be issued with more than a de minimis
amount of OID if they are issued at a discount to their face
value. The U.S. federal income tax consequences to you of
the subsequent issuance of senior subordinated notes with OID
(or any issuance of senior subordinated notes thereafter) upon a
subsequent offering by us of IDSs or senior subordinated notes,
including IDSs in exchange for Class B common stock, are
unclear. The indenture governing the senior subordinated notes
will provide that, in the event there is a subsequent issuance of
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senior subordinated notes having terms that are
otherwise identical (other than issuance date) in all material
respects to the senior subordinated notes underlying the IDSs,
but that are issued with OID, each holder of senior subordinated
notes or IDSs, as the case may be, agrees that upon such
issuance or any issuance of senior subordinated notes thereafter
a portion of such holder's senior subordinated notes will
be automatically exchanged for a portion of the senior
subordinated notes acquired by the holders of such subsequently
issued senior subordinated notes. Consequently, immediately
following such subsequent issuance, without any action by such
holder each holder of subsequently issued senior subordinated
notes, held either as part of IDSs or separately, and each
holder of existing senior subordinated notes, held either as
part of IDSs or separately, will own senior subordinated notes
of each separate issuance in the same proportion as each other
holder, and, the records of any record holders of senior
subordinated notes will be amended to reflect these changes.
Because a subsequent issuance will affect the senior
subordinated notes in the same manner, regardless of whether
these senior subordinated notes are held as part of IDSs or
separately, the combination of senior subordinated notes and
shares of common stock to form IDSs, or the separation of IDSs,
should not affect your tax treatment.
The aggregate stated principal amount of senior
subordinated notes owned by each holder will not change as a
result of such subsequent issuance and exchange. Whether the
receipt of subsequently issued senior subordinated notes in
exchange for previously issued senior subordinated notes in this
automatic exchange constitutes a taxable exchange for
U.S. federal income tax purposes depends on whether the
subsequently issued senior subordinated notes are viewed as
differing materially from the senior subordinated notes
exchanged. Due to a lack of applicable guidance, it is unclear
whether the subsequently issued senior subordinated notes would
be viewed as differing materially from the previously issued
senior subordinated notes for this purpose. Consequently, it is
unclear whether an exchange of senior subordinated notes for
subsequently issued senior subordinated notes results in a
taxable exchange for U.S. federal income tax purposes, and
it is possible that the IRS might successfully assert that such
an exchange should be treated as a taxable exchange.
If the IRS successfully asserted that an
automatic exchange following a subsequent issuance is a taxable
exchange, an exchanging holder would generally recognize gain or
loss in an amount equal to the difference between the fair
market value of the subsequently issued senior subordinated
notes received and such holder's adjusted tax basis in the
senior subordinated notes exchanged. See
"— Senior Subordinated Notes — Sale,
Exchange or Retirement of Senior Subordinated Notes." It is
also possible that the IRS might successfully assert that any
such loss should be disallowed under the wash sale rules, in
which case the holder's basis in the subsequently issued
senior subordinated notes would be increased to reflect the
amount of the disallowed loss. In the case of a taxable
exchange, a holder's initial tax basis in the subsequently
issued senior subordinated notes received in the exchange would
be the fair market value of such senior subordinated notes on
the date of exchange (adjusted to reflect any disallowed loss)
and a holder's holding period in such senior subordinated
notes would begin on the day after such exchange.
Regardless of whether a subsequent issuance of
senior subordinated notes with OID results in a taxable
exchange, such issuance may increase the amount of OID, if any,
that you are required to accrue with respect to the senior
subordinated notes. Following any subsequent issuance of senior
subordinated notes with OID (or any issuance of senior
subordinated notes thereafter) and resulting exchange we (and
our agents) will report any OID on any subsequently issued
senior subordinated notes ratably among all holders of senior
subordinated notes and IDSs, and each holder of senior
subordinated notes and IDSs will, by purchasing IDSs, agree to
report OID in a manner consistent with this approach.
Consequently, holders that acquire senior subordinated notes in
this offering may be required to report OID as a result of a
subsequent issuance (even though they purchased senior
subordinated notes having no OID). This will generally result in
such holders reporting more interest income over the term of the
senior subordinated notes than they would have reported had no
such subsequent issuance occurred, and any such additional
interest income will be reflected as an increase in the tax
basis of the senior subordinated notes, which will generally
result in a capital loss (or reduced capital gain) upon a sale,
exchange or retirement of the senior subordinated notes.
However, the IRS may assert that any OID should be reported only
to the persons that initially acquired such subsequently issued
senior subordinated notes (and their transferees). In such
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case, the IRS might further assert that, unless a
holder can establish that it is not such a person (or a
transferee thereof), all of the senior subordinated notes held
by such holder have OID. Any of these assertions by the IRS
could create significant uncertainties in the pricing of IDSs
and senior subordinated notes and could adversely affect the
market for IDSs and senior subordinated notes. You would be
required to include any OID in income as ordinary income as it
accrues, in advance of the receipt of cash attributable to such
income.
It is possible that senior subordinated notes we
issue in a subsequent issuance will be issued at a discount to
their face value and, accordingly, may have "significant
OID" and thus be classified as "applicable high yield
discount obligations." If any such senior subordinated
notes were so classified, a portion of the OID on such senior
subordinated notes could be nondeductible by us and the
remainder would be deductible only when paid. This treatment
would have the effect of increasing our taxable income and may
adversely affect our cash flow available for interest payments
and distributions to our equityholders.
Due to the complexity and uncertainty surrounding
the U.S. federal income tax treatment of subsequent
issuances and exchanges of senior subordinated notes,
prospective investors are urged to consult their tax advisors
regarding the applicable tax consequences to them in light of
their particular circumstances.
Class A Common Stock
Dividends.
The gross
amount of dividends paid to you will be treated as dividend
income to you to the extent of our current or accumulated
earnings and profits (as determined under U.S. federal
income tax principles). Such income will be includible in your
gross income as ordinary income. Distributions to you in excess
of earnings and profits will be treated first as a return of
capital that reduces your tax basis in the shares, and after
such tax basis is reduced to zero as gain from the sale or
exchange of shares of our Class A common stock. Dividends
paid through 2008 will generally be taxed to you at the rates
applicable to long-term capital gains, provided that a minimum
holding period and other requirements are satisfied. After 2008,
dividends will be taxed at the same rate as ordinary income.
Sale or Exchange of Class A Common
Stock.
Upon the sale, exchange,
retirement or other disposition of an IDS, you will be treated
as having sold, exchanged or disposed of the shares of our
Class A common stock underlying the IDS. Upon the sale,
exchange or other disposition of shares of our Class A
common stock, you will recognize capital gain or loss in an
amount equal to the difference between the portion of the
proceeds allocable to your shares of Class A common stock
and your tax basis in the shares of Class A common stock.
As described above under "— Consequences to U.S.
Holders — IDSs — Allocation of Purchase
Price," your tax basis in the shares of Class A common
stock generally will be the portion of the purchase price of
your IDSs allocable to the shares of Class A common stock,
less any prior distributions that reduced such basis. As
discussed above, capital gains of individuals derived with
respect to capital assets held for more than one year are
generally eligible for reduced rates of taxation. The
deductibility of capital losses is subject to limitations.
Information Reporting and Backup
    Withholding
In general, information reporting requirements
will apply to payments of principal, interest and dividends on
our senior subordinated notes and Class A common stock and
to the proceeds of sale of IDSs, our senior subordinated notes
and Class A common stock paid to a U.S. Holder other
than certain exempt recipients (such as corporations). A backup
withholding tax will apply to such payments if you fail to
provide a taxpayer identification number or certification of
other exempt status or fail to report in full dividend and
interest income.
Backup withholding is not an additional tax. Any
amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against your U.S. federal
income tax liability provided the required information is
furnished to the IRS.
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Consequences to
Non-U.S. Holders
The following discussion applies only to
Non-U.S. Holders. A "Non-U.S. Holder" is a
holder, other than an entity or arrangement classified as a
partnership for U.S. federal income tax purposes, that is
not a U.S. Holder. Special rules may apply to certain
Non-U.S. Holders, such as:
•
U.S. expatriates,
•
"controlled foreign corporations,"
•
"passive foreign investment companies,"
•
"foreign personal holding companies,"
•
corporations that accumulate earnings to avoid
    U.S. federal income tax, and
•
investors in pass-through entities that are
    subject to special treatment under the Code.
Such Non-U.S. Holders are urged to consult
their own tax advisors to determine the U.S. federal,
state, local and other tax consequences that may be relevant to
them.
Senior Subordinated Notes
Characterization of Senior Subordinated
Notes.
As discussed above under
"— Consequences to U.S. Holders —
Senior Subordinated Notes — Characterization of Senior
Subordinated Notes," we believe that the senior
subordinated notes should be treated as debt for
U.S. federal income tax purposes. However, no ruling on
this issue has been requested from the IRS and thus there can be
no assurance that such a position would be sustained if
challenged by the IRS. If the senior subordinated notes were
treated as equity rather than debt for U.S. federal income
tax purposes, then the senior subordinated notes would be
treated in the same manner as shares of our common stock as
described below under "— Consequences to
Non-U.S. Holders — Class A Common
Stock," and payments on the senior subordinated notes
(which could include payments in redemption of the senior
subordinated notes) would be subject to U.S. federal
withholding taxes. Payments to Non-U.S. Holders would not
be grossed-up on account of any such taxes. In addition, we
would be liable for withholding taxes on any interest payments
previously made by us to Non-U.S. Holders that are
recharacterized as dividends for U.S. federal income tax
purposes as discussed under "— Consequences to
U.S. Holders — Senior Subordinated
Notes — Characterization of Senior Subordinated
Notes." The remainder of this discussion assumes that the
characterization of the senior subordinated notes as debt for
U.S. federal income tax purposes will be respected.
U.S. Federal Withholding
Tax.
Subject to the discussion below
concerning backup withholding, no withholding of
U.S. federal income tax should be required with respect to
the payment of principal or interest (including OID, if any) on
a senior subordinated note owned by you under the
"portfolio interest rule," provided that:
•
you do not actually or constructively own 10% or
    more of the total combined voting power of all classes of our
    stock entitled to vote within the meaning of
    section 871(h)(3) of the Code and the regulations
    thereunder,
•
you are not a controlled foreign corporation that
    is related to us through stock ownership,
•
you are not a bank whose receipt of interest on a
    senior subordinated note is described in
    section 881(c)(3)(A) of the Code, and
•
you satisfy the statement requirement (described
    generally below) set forth in section 871(h) and
    section 881(c) of the Code and the Treasury regulations
    thereunder.
To satisfy the requirement referred to in the
final bullet above, you, or a financial institution holding the
senior subordinated note on your behalf, must provide, in
accordance with specified procedures, our paying agent with a
statement to the effect that you are not a U.S. person.
Currently, these requirements will be met if (1) you
provide your name and address, and certify, under penalties of
perjury, that you are
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not a U.S. person (which certification may
be made on an IRS Form W-8BEN), or (2) a financial
institution holding the note on your behalf certifies, under
penalties of perjury, that such statement has been received by
it and furnishes our paying agent with a copy thereof. The
statement requirement referred to in the final bullet above may
also be satisfied with other documentary evidence with respect
to a note held in an offshore account or through certain foreign
intermediaries.
If you cannot satisfy the requirements of the
"portfolio interest rule" described in the bullets
above, payments of interest (including payments in respect of
OID) made to you will be subject to a 30% withholding tax
unless you provide us or our paying agent, as the case may be,
with a properly executed:
•
IRS Form W-8BEN claiming an exemption from
    or reduction in withholding under the benefit of an applicable
    income tax treaty, or
•
IRS Form W-8ECI stating that interest paid
    on the senior subordinated note is not subject to withholding
    tax because it is effectively connected with your conduct of a
    trade or business in the United States.
Alternative documentation may be applicable in
special situations, such as in the case of
non-U.S. governments or flow-through entities organized
under non-U.S. law.
U.S. Federal Income
Tax.
If you are engaged in a trade or
business in the United States and interest on the senior
subordinated note is effectively connected with the conduct of
such trade or business (and, if certain income tax treaties
apply, is attributable to a U.S. permanent establishment),
you, although exempt from the withholding tax discussed above
(provided the certification requirements described above are
satisfied), will be subject to U.S. federal income tax on
such interest on a net income basis in the same manner as if you
were a U.S. Holder. In addition, if you are a foreign
corporation, you may be subject to a branch profits tax equal to
30% (or lesser rate under an applicable income tax treaty) of
such amount, subject to adjustments.
Sale, Exchange or Retirement of
Notes.
Upon the sale, exchange,
retirement or other disposition of an IDS, you will be treated
as having sold, exchanged or disposed of the senior subordinated
note represented by the IDS. Any gain realized upon the sale,
exchange, retirement or other disposition of a senior
subordinated note generally will not be subject to
U.S. federal income tax unless:
•
such gain is effectively connected with your
    conduct of a trade or business in the United States and, if
    certain tax treaties apply, is attributable to your
    U.S. permanent establishment, or
•
you are an individual, you are present in the
    United States for 183 days or more in the taxable year of
    such sale, exchange, retirement or other disposition, and
    certain other conditions are met.
If you are an individual and are described in the
first bullet above, you will be subject to tax on the net gain
derived from the sale under regular graduated U.S. federal
income tax rates in the same manner as if you were a
U.S. Holder. If you are an individual and are described in
the second bullet above, you will be subject to a flat 30% tax
on the gain derived from the sale, which may be offset by
U.S. source capital losses (even though you are not
considered a resident of the United States). If you are a
foreign corporation and are described in the first bullet above,
you will be subject to tax on your gain under regular graduated
U.S. federal income tax rates in the same manner as if you
were a U.S. Holder and, in addition, may be subject to the
branch profits tax on your effectively connected earnings and
profits at a rate of 30% or at such lower rate as may be
specified by an applicable income tax treaty.
U.S. Federal Estate
Tax.
A senior subordinated note
beneficially owned by an individual who at the time of death is
a Non-U.S. Holder should not be subject to
U.S. federal estate tax, provided that any payment made to
such individual on the senior subordinated notes would be
eligible for exemption from the 30% U.S. federal
withholding tax under the rules described above under
"Consequences to Non-U.S. Holders — Senior
Subordinated Notes — U.S. Federal Withholding
Tax" without regard to the statement requirement described
therein.
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Class A Common Stock
Dividends.
Dividends
paid to you generally will be subject to withholding of
U.S. federal income tax at a 30% rate or such lower rate as
may be specified by an applicable income tax treaty. However,
dividends that are effectively connected with your conduct of a
trade or business within the United States and, if certain tax
treaties apply, are attributable to your U.S. permanent
establishment, are not subject to the withholding tax, but
instead are subject to U.S. federal income tax on a net
income basis in the same manner as if you were a
U.S. Holder. Special certification and disclosure
requirements must be satisfied for effectively connected income
to be exempt from withholding. If you are a foreign corporation,
any such effectively connected dividends received by you may be
subject to an additional branch profits tax at a 30% rate or
such lower rate as may be specified by an applicable income tax
treaty.
If you wish to claim the benefit of an applicable
treaty rate (and also avoid backup withholding as discussed
below) for dividends, you will be required to:
•
complete IRS Form W-8BEN (or other
    applicable form) and certify under penalties of perjury that you
    are not a U.S. person and that you are entitled to the
    benefits of the applicable treaty, or
•
if the shares of our common stock are held
    through certain foreign intermediaries, satisfy the relevant
    certification requirements of applicable U.S. Treasury
    regulations.
Special certification and other requirements
apply to certain Non-U.S. Holders that are entities rather
than individuals.
If you are eligible for a reduced rate of
U.S. withholding tax pursuant to an income tax treaty, you
may obtain a refund of any excess amounts withheld by timely
filing an appropriate claim for refund with the IRS.
Sale or Exchange of Common
Stock.
Upon the sale, exchange,
retirement or other disposition of IDSs, you will be treated as
having sold, exchanged or disposed of the shares of Class A
common stock underlying the IDSs. You generally will not be
subject to U.S. federal income tax with respect to gain
recognized on a sale or other disposition of shares of our
Class A common stock unless:
•
the gain is effectively connected with your
    conduct of a trade or business in the United States, or, if
    certain tax treaties apply, is attributable to your
    U.S. permanent establishment,
•
if you are an individual and hold shares of our
    common stock as a capital asset, you are present in the United
    States for 183 or more days in the taxable year of the sale or
    other disposition, and certain other conditions are met, or
•
we are or have been a "U.S. real
    property holding corporation" for U.S. federal income
    tax purposes.
If you are an individual and are described in the
first bullet above, you will be subject to tax on the net gain
derived from the sale under regular graduated U.S. federal
income tax rates in the same manner as if you were a
U.S. Holder. If you are an individual and are described in
the second bullet above, you will be subject to a flat 30% tax
on the gain derived from the sale, which may be offset by
U.S. source capital losses (even though you are not
considered a resident of the United States). If you are a
foreign corporation and are described in the first bullet above,
you will be subject to tax on your gain under regular graduated
U.S. federal income tax rates in the same manner as if you
were a U.S. Holder and, in addition, may be subject to the
branch profits tax on your effectively connected earnings and
profits at a rate of 30% or at such lower rate as may be
specified by an applicable income tax treaty.
We believe we are not and do not anticipate
becoming a "U.S. real property holding
corporation" for U.S. federal income tax purposes.
U.S. Federal Estate
Tax.
Shares of our Class A common
stock held by an individual Non-U.S. Holder at the time of
death will be included in such holder's gross estate for
U.S. federal estate tax purposes, unless an applicable
estate tax treaty provides otherwise.
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Information Reporting and Backup
    Withholding
The amount of interest payments and dividends
paid to you and the amount of tax, if any, withheld with respect
to such payments will be reported annually to the IRS. Copies of
the information returns reporting such interest payments,
dividends and withholding may also be made available to the tax
authorities in the country in which you reside under the
provisions of an applicable income tax treaty.
In general, backup withholding will be required
with respect to payments made by us or any paying agent to you,
unless a statement described in the fourth bullet under
"— Consequences to
Non-U.S. Holders — Senior Subordinated
Notes — U.S. Federal Withholding Tax" has
been received (and we or the paying agent do not have actual
knowledge or reason to know that you are a U.S. person).
Information reporting and, depending on the
circumstances, backup withholding will apply to the proceeds of
a sale of IDSs, Class A common stock or senior subordinated
notes within the United States or conducted through U.S.-related
financial intermediaries unless a statement described in the
fourth bullet under "— Consequences to
Non-U.S. Holders — Senior Subordinated
Notes — U.S. Federal Withholding Tax" has
been received (and we or the paying agent do not have actual
knowledge or reason to know that you are a U.S. person) or
you otherwise establish an exemption.
Backup withholding is not an additional tax. Any
amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against your U.S. federal
income tax liability provided the required information is
furnished to the IRS.
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UNDERWRITING
Under the terms and subject to the conditions
contained in an underwriting agreement,
dated                     ,
2004, we have agreed to sell to the underwriters named below,
for whom Credit Suisse First Boston LLC, Banc of America
Securities LLC and CIBC World Markets Corp. are acting as
representatives, the following respective numbers of IDSs and
aggregate principal amount of separate senior subordinated notes:
Aggregate
Principal
Number of
Amount of Separate Senior
Underwriter
IDSs
Subordinated Notes
Credit Suisse First Boston LLC
Banc of America Securities LLC
CIBC World Markets Corp.
UBS Securities LLC
JP Morgan Securities, Inc.
Piper Jaffray & Co.
Total
The underwriting agreement provides that the
underwriters are obligated to purchase all the IDSs and separate
senior subordinated notes in the offering if any are purchased,
other than those IDSs covered by the over-allotment option
described below. The underwriting agreement also provides that
if an underwriter defaults, the purchase commitments of
non-defaulting underwriters may be increased or the offering may
be terminated, depending on the circumstances.
None of the senior subordinated notes sold
separately (not in the form of IDSs) in this offering, which we
refer to in this section as the "separate senior
subordinated notes" may be purchased, directly or
indirectly, by persons who are also (1) purchasing IDSs in
this offering or (2) holders of Class B common stock
following our internal corporate transactions.
Furthermore, prior to the closing of this
offering, each person purchasing separate senior subordinated
notes in this offering will be required to represent to us that:
(a) neither such purchaser nor any entity,
    investment fund or account over which such purchaser exercises
    investment control is purchasing IDSs in this offering or owns
    or has the contractual right to acquire our equity securities
    (including securities which are convertible, exchangeable or
    exercisable into or for our equity, which we refer to
    collectively as our company equity); and
(b) there is no plan or pre-arrangement by
    which (i) such purchaser will acquire any IDSs or our
    capital stock or (ii) separate senior subordinated notes
    being acquired by such purchaser will be transferred to any
    holder of the IDSs or company equity.
Any subsequent issuance of IDSs and senior
subordinated notes of the same series that results in an
automatic exchange of a portion of your senior subordinated
notes for a portion of the senior subordinated notes issued in
such subsequent issuance, and/or replacement of your IDSs with
new IDSs should not impair the rights you would otherwise have
to assert claims against us or the underwriters with respect to
the full amount of the senior subordinated notes purchased by
you.
We have granted the underwriters an option to
purchase on a pro rata basis up
to                      additional
IDSs at the public offering price that appears on the cover page
of this prospectus, less the underwriting discount. The option
may be exercised by the underwriters only to cover any
over-allotments of IDSs.
The underwriters propose to offer the IDSs and
separate senior subordinated notes initially at the public
offering price on the cover page of this prospectus and to the
selling group members at that price less a selling concession of
$           per
IDS. The underwriters may allow a discount of
$           per
IDS and
$           per
$1,000 aggregate principal amount of the separate senior
subordinated notes on sales to other
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broker/ dealers. After the initial public
offering the representatives may change the public offering
price and concession and discount to broker/ dealers.
The following table summarizes the compensation
and estimated expenses that we will pay:
Per Share
Total
Without Over-
With Over-
Without Over-
With Over-
allotment
allotment
allotment
allotment
Underwriting Discounts and Commissions paid by us
$
$
$
$
Expenses payable by us
$
$
$
$
We expect that our total expenses for this
offering, excluding the underwriting discount, will be
approximately
$                    .
The representatives have informed us that the
underwriters do not expect sales to accounts over which the
underwriters have discretionary authority to exceed 5% of the
IDSs being offered. The underwriters will not confirm sales to
any accounts over which they exercise discretionary authority
without first receiving a written consent from those accounts.
We have agreed that we will not offer, sell,
contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Securities and Exchange Commission
a registration statement under the Securities Act relating to,
any IDSs, shares of our Class A common stock, shares of our
Class B common stock or senior subordinated notes or any
securities convertible into or exchangeable or exercisable for
any such securities, or publicly disclose the intention to make
any offer, sale, pledge, disposition or filing, without the
prior written consent of Credit Suisse First Boston LLC for a
period of 180 days after the date of this prospectus.
Our executive officers, directors and certain of
our existing stockholders have agreed that they will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly
or indirectly, any IDSs, shares of our Class A common
stock, shares of our Class B common stock or any senior
subordinated notes or any securities convertible into or
exchangeable or exercisable for any such securities, enter into
a transaction that would have the same effect, or enter into any
swap, hedge or other arrangement that transfers, in whole or in
part, any of the economic consequences of ownership of any IDS,
our Class A common stock, our Class B common stock or
senior subordinated notes, whether any of these transactions are
to be settled by delivery of any IDS, our Class A common
stock, our Class B common stock, our senior subordinated
notes or other securities, in cash or otherwise, or publicly
disclose the intention to make any offer, sale, pledge or
disposition, or to enter into any transaction, swap, hedge or
other arrangement, without, in each case, the prior written
consent of Credit Suisse First Boston LLC for a period of
180 days after the date of this prospectus.
We have agreed to indemnify the underwriters
against liabilities under the Securities Act, or contribute to
payments that the underwriters may be required to make in that
respect.
We will apply to list the IDSs on
the                     under
the symbol
"          ".
Prior to this offering, there has been no public
market for the IDSs, the shares of our Class A common stock
or the senior subordinated notes. The initial public offering
price of the IDSs and the senior subordinated notes have been
negotiated between the representatives and us. In determining
the initial public offering price of our IDSs and our senior
subordinated notes, the representatives considered:
•
prevailing market conditions;
•
our historical performance and capital structure;
•
estimates of our business potential and future
    revenues;
•
an overall assessment of our management; and
•
the consideration of these factors in relation to
    market valuation of companies in related businesses.
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In connection with the offering the underwriters
may engage in stabilizing transactions, over-allotment
transactions, syndicate covering transactions and penalty bids
in accordance with Regulation M under the Exchange Act.
•
Stabilizing transactions permit bids to purchase
    the underlying security so long as the stabilizing bids do not
    exceed a specified maximum.
•
Over-allotment involves sales by the underwriters
    of IDSs in excess of the number of IDSs the underwriters are
    obligated to purchase, which creates a syndicate short position.
    The short position may be either a covered short position or a
    naked short position. In a covered short position, the number of
    IDSs over-allotted by the underwriters is not greater than the
    number of IDSs that they may purchase in the over-allotment
    option. In a naked short position, the number of IDSs involved
    is greater than the number of IDSs in the over-allotment option.
    The underwriters may close out any covered short position by
    either exercising their over-allotment option and/or purchasing
    IDSs in the open market.
•
Syndicate covering transactions involve purchases
    of IDSs or senior subordinated notes in the open market after
    the distribution has been completed in order to cover syndicate
    short positions. In determining the source of IDSs or senior
    subordinated notes to close out the short position, the
    underwriters will consider, among other things, the price of
    IDSs or senior subordinated notes available for purchase in the
    open market as compared to the price at which they may
    purchase IDSs or senior subordinated notes through the
    over- allotment option. If the underwriters sell more IDSs or
    senior subordinated notes than could be covered by the
    over-allotment option, a naked short position, the position can
    only be closed out by buying IDSs or senior subordinated notes
    in the open market. A naked short position is more likely to be
    created if the underwriters are concerned that there could be
    downward pressure on the price of the IDSs or senior
    subordinated notes in the open market after pricing that could
    adversely affect investors who purchase in the offering.
•
Penalty bids permit the representatives to
    reclaim a selling concession from a syndicate member when the
    IDSs or senior subordinated notes originally sold by the
    syndicate member is purchased in a stabilizing or syndicate
    covering transaction to cover syndicate short positions.
These stabilizing transactions, syndicate
covering transactions and penalty bids may have the effect of
raising or maintaining the market price of the IDSs or separate
senior subordinated notes or preventing or retarding a decline
in the market price of the IDSs or separate senior subordinated
notes. As a result the price of the IDSs or separate senior
subordinated notes may be higher than the price that might
otherwise exist in the open market. These transactions may be
effected
on                     or
otherwise and, if commenced, may be discontinued at any time.
We have been advised by the representatives that
Credit Suisse First Boston LLC and the other underwriters of the
separate senior subordinated notes currently intend to
facilitate a secondary market in the senior subordinated notes
sold separately from the IDSs and, following any separation of
the IDSs into their component pieces, any such newly separated
senior subordinated notes and shares of Class A common
stock, subject to applicable legal and regulatory requirements
and limitations which means that Credit Suisse First Boston LLC
and the other underwriters of the separate senior subordinated
notes will make a commercially reasonable attempt to match
buyers of the applicable securities with sellers of such
securities, in each case, as between persons of whom Credit
Suisse First Boston LLC and the other underwriters of the
separate senior subordinate notes have knowledge that they are
potential buyers or sellers of such securities. In addition,
with respect to facilitating any market for the senior
subordinated notes, Credit Suisse First Boston LLC and the other
underwriters of the separate senior subordinated notes will
consider relevant credit issues where deemed appropriate.
However, Credit Suisse First Boston LLC and the other
underwriters of the separate senior subordinated notes are not
obligated to facilitate a secondary market in the separate
senior subordinated notes and may discontinue any such efforts
at any time and without notice for any reason that would cause
them in the ordinary course of their high yield debt securities
or equity securities businesses to discontinue such
facilitation. Moreover, if and to the
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extent that Credit Suisse First Boston LLC and
the other underwriters of the separate senior subordinated notes
facilitate any market for any such securities, there can be no
assurance that such market would provide sufficient liquidity
for any holder of such securities.
A prospectus in electronic format may be made
available on the web sites maintained by one or more of the
underwriters, or selling group members, if any, participating in
this offering and one or more of the underwriters participating
in this offering may distribute prospectuses electronically. The
representatives may agree to allocate a number of IDSs or senior
subordinated notes to underwriters and selling group members for
sale to their online brokerage account holders. Internet
distributions will be allocated by the underwriters and selling
group members that will make internet distributions on the same
basis as other allocations.
Certain of the underwriters and their respective
affiliates have performed and expect to continue to perform
financial advisory and investment and commercial banking
services for us for which they have received and will receive
compensatory compensation. Affiliates of certain of the
underwriters are lenders under the Existing Credit Facility and
may be lenders under the Amended Credit Facility. Certain of the
underwriters may also act as the initial purchasers or
underwriters of Buffets' Senior Notes. Credit Suisse First
Boston LLC acted as the initial purchaser of our
13 7/8% Notes. In addition, certain of the
underwriters will serve as dealer/managers for the tender offers
of Buffets' 11 1/4% Notes and our
13 7/8% Notes.
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NOTICE TO CANADIAN RESIDENTS
Resale Restrictions
The distribution of the IDSs or our senior
subordinated notes in Canada is being made only on a private
placement basis exempt from the requirement that we prepare and
file a prospectus with the securities regulatory authorities in
each province where trades of IDSs or our senior subordinated
notes are made. Any resale of the IDSs or senior subordinated
notes in Canada must be made under applicable securities laws
which will vary depending on the relevant jurisdiction, and
which may require resales to be made under available statutory
exemptions or under a discretionary exemption granted by the
applicable Canadian securities regulatory authority. Purchasers
are advised to seek legal advice prior to any resale of the IDSs
or senior subordinated notes.
Representations of Purchasers
By purchasing IDSs or our senior subordinated
notes in Canada and accepting a purchase confirmation a
purchaser is representing to us and the dealer from whom the
purchase confirmation is received that:
•
the purchaser is entitled under applicable
    provincial securities laws to purchase the IDSs and our senior
    subordinated notes without the benefit of a prospectus qualified
    under those securities laws,
•
where required by law, that the purchaser is
    purchasing as principal and not as agent, and
•
the purchaser has reviewed the text above under
    Resale Restrictions.
Rights of Action — Ontario
Purchasers Only
Under Ontario securities legislation, a purchaser
who purchases a security offered by this prospectus during the
period of distribution will have a statutory right of action for
damages, or while still the owner of the IDSs or our senior
subordinated notes, for rescission against us in the event that
this circular contains a misrepresentation. A purchaser will be
deemed to have relied on the misrepresentation. The right of
action for damages is exercisable not later than the earlier of
180 days from the date the purchaser first had knowledge of
the facts giving rise to the cause of action and three years
from the date on which payment is made for the IDSs or our
senior subordinated notes. The right of action for rescission is
exercisable not later than 180 days from the date on which
payment is made for the IDSs or our senior subordinated notes.
If a purchaser elects to exercise the right of action for
rescission, the purchaser will have no right of action for
damages against us. In no case will the amount recoverable in
any action exceed the price at which the IDSs or our senior
subordinated notes were offered to the purchaser and if the
purchaser is shown to have purchased the securities with
knowledge of the misrepresentation, we will have no liability.
In the case of an action for damages, we will not be liable for
all or any portion of the damages that are proven to not
represent the depreciation in value of the IDSs or our senior
subordinated notes as a result of the misrepresentation relied
upon. These rights are in addition to, and without derogation
from, any other rights or remedies available at law to an
Ontario purchaser. The foregoing is a summary of the rights
available to an Ontario purchaser. Ontario purchasers should
refer to the complete text of the relevant statutory provisions.
Enforcement of Legal Rights
All of our directors and officers as well as the
experts named herein may be located outside of Canada and, as a
result, it may not be possible for Canadian purchasers to effect
service of process within Canada upon us or those persons. All
or a substantial portion of our assets and the assets of those
persons may be located outside of Canada and, as a result, it
may not be possible to satisfy a judgment against us or those
persons in Canada or to enforce a judgment obtained in Canadian
courts against us or those persons outside of Canada.
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Taxation and Eligibility for
Investment
We recommend that Canadian purchasers of IDSs or
our senior subordinated notes consult their own legal and tax
advisors with respect to the tax consequences of an investment
in the IDSs or our senior subordinated notes in their particular
circumstances and about the eligibility of the IDSs or our
senior subordinated notes for investment by the purchaser under
relevant Canadian legislation.
LEGAL MATTERS
The validity of the issuance of the IDSs offered
hereby and the shares of Class A common stock and senior
subordinated notes (including the senior subordinated notes sold
separately from the IDSs), as well as the validity of the
issuance of the subsidiary guarantees by the Delaware subsidiary
guarantor, will be passed upon for us by Paul, Weiss, Rifkind,
Wharton & Garrison LLP, New York, New York. The
validity of the issuance of the subsidiary guarantees by the
Minnesota subsidiary guarantors will be passed upon for us by
Faegre & Benson LLP, Minneapolis, Minnesota. Certain
legal matters relating to this offering will be passed upon for
the underwriters by Skadden, Arps, Slate, Meagher &
Flom LLP, New York, New York.
EXPERTS
The consolidated financial statements of Buffets
Holdings, Inc. and its subsidiaries as of January 2, 2002,
July 3, 2002 and July 2, 2003 and for the year ended
January 2, 2002, for the 26-week transitional period ended
July 3, 2002, for the year ended July 2, 2003 and for
the year ended June 30, 2004 included in this prospectus
have been audited by Deloitte & Touche LLP, independent
registered public accounting firm, as stated in their report
appearing herein (which report expresses an unqualified opinion
and includes an explanatory paragraph relating to the change in
its method of accounting for goodwill and other intangible
assets), and have been so included in reliance upon the report
of such firm given their authority as experts in accounting and
auditing.
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WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange
Commission a registration statement on Form S-1 with
respect to the securities being sold in this offering. This
prospectus constitutes a part of that registration statement.
This prospectus does not contain all the information set forth
in the registration statement and the exhibits and schedules to
the registration statement, because some parts have been omitted
in accordance with the rules and regulations of the Commission.
For further information with respect to us and the securities
being sold in this offering, you should refer to the
registration statement and the exhibits and schedules filed as
part of the registration statement. Statements contained in this
prospectus regarding the contents of any agreement, contract or
other document referred to are not necessarily complete;
reference is made in each instance to the copy of the contract
or document filed as an exhibit to the registration statement.
Each statement is qualified by reference to the exhibit.
We also file annual, quarterly and current
reports and other reports with the Commission. You may inspect a
copy of the registration statement and all other reports that we
file with the Commission without charge at the Commission's
principal office in Washington, D.C. Copies of all or any
part of the registration statement may be obtained after payment
of fees prescribed by the Commission from the Commission's
Public Reference Room at the Commission's principal office
at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain information
regarding the operation of the Public Reference Room by calling
the Commission at 1-800-SEC-0330. The Commission maintains an
Internet site that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the Commission. The Commission's World
Wide Web address is www.sec.gov.
You may also request a copy of these filings, at
no cost, by writing or telephoning us at:
Buffets Holdings, Inc.
1460 Buffet Way
Eagan, Minnesota 55121
(651) 994-8608
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INDEX TO FINANCIAL STATEMENTS
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
Page
Report of Independent Registered Public
    Accounting Firm
F-2
Consolidated Balance Sheets as of July 3,
    2002, July 2, 2003 and June 30, 2004
F-3
Consolidated Statements of Operations for the
    Year Ended January 2, 2002, for the Twenty-Six Week
    Transitional Period Ended July 3, 2002, for the Year Ended
    July 2, 2003 and for the Year Ended June 30, 2004
F-4
Consolidated Statements of Shareholders'
    Equity (Deficit) for the Year Ended January 2, 2002, for
    the Twenty-Six Week Transitional Period Ended July 3, 2002,
    for the Year Ended July 2, 2003 and for the Year Ended
    June 30, 2004
F-5
Consolidated Statements of Cash Flows for the
    Year Ended January 2, 2002, for the Twenty-Six Week
    Transitional Period Ended July 3, 2002, for the Year Ended
    July 2, 2003 and for the Year Ended June 30, 2004
F-6
Notes to Consolidated Financial Statements
F-8
F-1
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
To the Shareholders of Buffets Holdings, Inc. and
Subsidiaries:
We have audited the accompanying consolidated
balance sheets of Buffets Holdings, Inc. (a Delaware
corporation) and Subsidiaries (the Company) as of July 3,
2002, July 2, 2003 and June 30, 2004, and the related
consolidated statements of operations, shareholders' equity
(deficit) and cash flows for the year ended January 2,
2002, the twenty-six week transitional period ended July 3,
2002, the year ended July 2, 2003 and the year ended
June 30, 2004. These financial statements are the
responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the
standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial
statements present fairly, in all material respects, the
financial position of Buffets Holdings, Inc. and Subsidiaries as
of July 3, 2002, July 2, 2003 and June 30, 2004,
and the results of their operations and their cash flows for the
year ended January 2, 2002, the twenty-six week
transitional period ended July 3, 2002, the year ended
July 2, 2003 and the year ended June 30, 2004, in
conformity with accounting principles generally accepted in the
United States of America.
As discussed in Note 2 to the consolidated
financial statements, effective January 3, 2002, the
Company changed its method of accounting for goodwill and
intangible assets.
/S/ DELOITTE & TOUCHE LLP
Minneapolis, Minnesota
August 27, 2004
F-2
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
July 3,
July 2,
June 30,
2002
2003
2004
(In thousands, except share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
8,362
$
15,855
$
26,072
Restricted cash and cash equivalents
—
—
16,228
Receivables
8,682
6,478
6,963
Inventories
18,632
18,462
18,673
Prepaid expenses and other current assets
10,086
8,039
5,244
Assets held for sale
—
1,390
—
Deferred income taxes
19,000
15,216
15,915
Total current assets
64,762
65,440
89,095
PROPERTY AND EQUIPMENT, net
198,350
154,140
149,618
GOODWILL, net
312,163
312,163
312,163
ASSETS HELD FOR SALE
24,952
—
—
DEFERRED INCOME TAXES
—
2,932
1,033
OTHER ASSETS, net
15,445
18,311
15,622
Total assets
$
615,672
$
552,986
$
567,531
LIABILITIES AND SHAREHOLDERS'
    DEFICIT
CURRENT LIABILITIES:
Accounts payable
$
37,419
$
43,777
$
43,280
Accrued liabilities (Note 4)
92,454
78,508
68,663
Income taxes payable
2,900
4,787
4,531
Current maturities of long-term debt
2,450
1,735
2,300
Total current liabilities
135,223
128,807
118,774
LONG-TERM DEBT, net of current maturities
491,531
419,387
496,039
DEFERRED INCOME TAXES
175
—
—
DEFERRED LEASE OBLIGATIONS
18,829
19,713
21,621
OTHER LONG-TERM LIABILITIES
4,525
7,889
7,013
Total liabilities
650,283
575,796
643,447
COMMITMENTS AND CONTINGENCIES
    (Note 10)
SHAREHOLDERS' DEFICIT:
Preferred stock, $.01 par value;
    1,100,000 shares authorized; none issued and outstanding as
    of July 3, 2002, July 2, 2003 and June 30, 2004
—
—
—
Common stock, $.01 par value;
    3,600,000 shares authorized; 3,228,610 shares issued
    and outstanding as of July 3, 2002, 3,187,985 as of
    July 2, 2003 and 3,185,672 as of June 30, 2004
32
32
32
Accumulated deficit
(34,643
)
(22,842
)
(75,948
)
Total shareholders' deficit
(34,611
)
(22,810
)
(75,916
)
Total liabilities and shareholders' deficit
$
615,672
$
552,986
$
567,531
The accompanying notes are an integral part of
these consolidated financial statements.
F-3
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
For the
Twenty-Six
Week
Transitional
For the Year
Period
For the Year
Ended
Ended
For the Year
Ended
January 2,
July 3,
Ended
June 30,
2002
2002
July 2, 2003
2004
(In thousands)
RESTAURANT SALES
$
1,044,734
$
527,084
$
985,286
$
942,831
RESTAURANT COSTS:
Food
326,271
163,649
311,891
307,807
Labor
326,423
164,264
313,532
287,467
Direct and occupancy
233,375
117,004
225,417
217,388
Total restaurant costs
886,069
444,917
850,840
812,662
ADVERTISING EXPENSES
27,640
14,349
28,589
25,854
GENERAL AND ADMINISTRATIVE EXPENSES
50,569
25,687
45,382
42,722
GOODWILL AMORTIZATION
10,942
—
—
—
IMPAIRMENT OF ASSETS
—
—
4,803
1,878
GAIN ON SALE OF ORIGINAL ROADHOUSE GRILL
    RESTAURANTS
—
—
(7,088
)
—
LOSS ON SALE LEASEBACK TRANSACTIONS
—
—
5,856
—
FINANCING-RELATED COMPENSATION EXPENSES
—
—
—
2,240
OPERATING INCOME
69,514
42,131
56,904
57,475
INTEREST EXPENSE
43,405
15,088
41,235
39,609
INTEREST INCOME
(698
)
(212
)
(307
)
(424
)
LOSS RELATED TO REFINANCING
—
38,724
—
4,776
LOSS RELATED TO EARLY EXTINGUISHMENT OF DEBT
—
—
—
5,275
OTHER INCOME
(1,040
)
(598
)
(1,270
)
(1,379
)
INCOME (LOSS) BEFORE INCOME TAXES
27,847
(10,871
)
17,246
9,618
INCOME TAX EXPENSE (BENEFIT)
15,292
(3,354
)
5,319
1,648
Net income (loss)
$
12,555
$
(7,517
)
$
11,927
$
7,970
The accompanying notes are an integral part of
these consolidated financial statements.
F-4
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
EQUITY (DEFICIT)
Retained
Preferred Stock
Common Stock
Additional
Earnings
Paid-In
(Accumulated
Shares
Amount
Shares
Amount
Capital
Deficit)
Total
(In thousands, except share data)
BALANCE, January 4, 2001
975,000
$
10
3,250,000
$
33
$
135,371
$
579
$
135,993
Issuance of stock
1,550
—
4,610
—
200
—
200
Purchase of treasury stock
—
—
(8,125
)
—
(71
)
—
(71
)
Net income
—
—
—
—
—
12,555
12,555
BALANCE, January 2, 2002
976,550
10
3,246,485
33
135,500
13,134
148,677
Purchase of treasury stock
—
—
(17,875
)
(1
)
(290
)
—
(291
)
Redemption of preferred stock
(976,550
)
(10
)
—
—
(97,644
)
(10,573
)
(108,227
)
Redemption of preferred stock warrants
—
—
—
—
(5,414
)
(1,786
)
(7,200
)
Dividends
—
—
—
—
(32,152
)
(27,901
)
(60,053
)
Net loss
—
—
—
—
—
(7,517
)
(7,517
)
BALANCE, July 3, 2002
—
—
3,228,610
32
—
(34,643
)
(34,611
)
Issuance of stock
—
—
14,625
—
450
—
450
Purchase of treasury stock
—
—
(55,250
)
—
(450
)
(126
)
(576
)
Net income
—
—
—
—
—
11,927
11,927
BALANCE, July 2, 2003
—
—
3,187,985
32
—
(22,842
)
(22,810
)
Issuance of stock
—
—
21,250
—
241
—
241
Purchase of treasury stock
—
—
(23,563
)
—
(209
)
(171
)
(380
)
Dividends
—
—
—
—
(32
)
(60,905
)
(60,937
)
Net income
—
—
—
—
—
7,970
7,970
BALANCE, June 30, 2004
—
$
—
3,185,672
$
32
$
—
$
(75,948
)
$
(75,916
)
The accompanying notes are an integral part of
these consolidated financial statements.
F-5
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS
For the
Twenty-Six
Week
For the Year
Transitional
For the Year
For the Year
Ended
Period Ended
Ended
Ended
January 2,
July 3,
July 2,
June 30,
2002
2002
2003
2004
(In thousands)
OPERATING ACTIVITIES:
Net income (loss)
$
12,555
$
(7,517
)
$
11,927
$
7,970
Adjustments to reconcile net income (loss) to net
    cash provided by operating activities:
Depreciation and amortization
53,404
20,409
36,885
33,807
Amortization of debt issuance costs
3,905
1,617
1,182
1,370
Net loss related to refinancing:
Write-off of debt issuance costs
—
11,022
—
4,201
Accrued redemption fees
—
17,000
—
—
Original issue discount expensed
—
4,107
—
—
Accretion of original issue discount
773
357
739
2,049
Loss related to early extinguishment of debt
—
—
—
5,275
Deferred interest
1,269
614
—
—
Impairment of assets
—
—
4,803
1,878
Asset write-downs
491
—
—
—
Deferred income taxes
21
(2,798
)
677
1,200
Gain on sale of Original Roadhouse Grill
    restaurants
—
—
(7,088
)
—
Loss on disposal of assets
361
89
565
305
Loss on sale leaseback transactions
—
—
5,856
—
Changes in assets and liabilities:
Receivables
(1,069
)
(982
)
2,346
(235
)
Inventories
690
(193
)
170
(674
)
Prepaid expenses and other assets
(1,571
)
(1,557
)
2,047
2,795
Accounts payable
(7,939
)
6,399
8,350
(497
)
Accrued and other liabilities
2,837
(7,190
)
(12,690
)
(8,698
)
Income taxes payable/refundable
3,108
(2,127
)
1,887
(256
)
Net cash provided by operating activities
68,835
39,250
57,656
50,490
INVESTING ACTIVITIES:
Proceeds from sale leaseback transactions
39,075
2,281
26,117
2,710
Proceeds from sale of Original Roadhouse Grill
    restaurants
—
—
25,850
—
Purchase of fixed assets
(38,096
)
(14,280
)
(25,722
)
(33,007
)
Acquisition of 20% minority interest in Tahoe
    Joe's Inc.
—
—
—
(370
)
Proceeds from sale of other assets
1,596
662
417
2,284
Net cash provided by (used in) investing
    activities
2,575
(11,337
)
26,662
(28,383
)
FINANCING ACTIVITIES:
Repayment of debt
$
(53,896
)
$
(353,298
)
$
(73,198
)
$
(172,953
)
Redemption of subordinated notes
—
—
(400
)
(27,364
)
Redemption of preferred stock warrants
—
(7,200
)
—
—
Redemption of preferred stock
—
(108,227
)
—
—
Repurchase of common stock
(71
)
(291
)
(576
)
(380
)
Proceeds from issuance of common stock
200
—
450
241
Repayment of revolving credit facility
(5,000
)
—
—
—
F-6
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS — (Continued)
For the
Twenty-Six
Week
For the Year
Transitional
For the Year
For the Year
Ended
Period Ended
Ended
Ended
January 2,
July 3,
July 2,
June 30,
2002
2002
2003
2004
(In thousands)
Proceeds from issuance of subordinated notes
—
221,217
—
—
Proceeds from issuance of senior discount notes
—
—
—
75,073
Unrestricted cash proceeds from credit facility
—
245,000
—
195,300
Initial restricted cash proceeds from credit
    facility
—
—
—
34,700
Restricted cash proceeds from credit facility
    available as of year end
—
—
—
(16,228
)
Use of restricted cash for early extinguishment
    of debt
—
—
—
(18,472
)
Use of unrestricted cash for early extinguishment
    of debt
—
—
—
(15,300
)
Dividends
—
(32,289
)
—
(60,937
)
Debt issuance costs
(823
)
(12,076
)
(3,101
)
(5,570
)
Net cash used in financing activities
(59,590
)
(47,164
)
(76,825
)
(11,890
)
NET CHANGE IN CASH AND CASH EQUIVALENTS
11,820
(19,251
)
7,493
10,217
CASH AND CASH EQUIVALENTS, beginning of period
15,793
27,613
8,362
15,855
CASH AND CASH EQUIVALENTS, end of period
$
27,613
$
8,362
$
15,855
$
26,072
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of capitalized interest of $369,
    $158, $288 and $280, respectively)
$
35,546
$
16,526
$
26,956
$
37,286
Income taxes
$
11,725
$
1,587
$
3,351
$
700
Non-cash investing activities during the period
    for-
Note receivable on sale of Original Roadhouse
    Grill restaurants
$
—
$
—
$
2,500
$
—
Non-cash financing activities during the period
    for-
Issuance of subordinated notes to stockholders in
    lieu of cash payment
$
—
$
27,764
$
—
$
—
The accompanying notes are an integral part of
these consolidated financial statements.
F-7
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
1     Nature of
Organization
Company Background
Buffets Holdings, Inc. and Subsidiaries (Buffets
Holdings), a Delaware corporation, was formed to acquire
100 percent of the common stock of Buffets, Inc. and its
subsidiaries in a buyout from public shareholders on
October 2, 2000 (the Acquisition). Buffets Holdings, Inc.
and Buffets, Inc. are collectively referred to as the Company.
In December 2002, Buffets, Inc. filed a
registration statement with the Securities and Exchange
Commission (SEC) to effect the exchange of $230.0 million
of outstanding 11 1/4% senior subordinated notes which were
issued in June 2002 for registered 11 1/4% senior
subordinated notes due 2010.
On February 20, 2004, Buffets, Inc. entered
into an amended and restated senior credit facility (the Credit
Facility) to refinance its existing debt and to make a
distribution to Buffets Holdings. Buffets, Inc. used
$230.0 million in proceeds from term loan borrowings under
the amended Credit Facility to refinance $166.8 million in
outstanding term loan indebtedness under the predecessor Credit
Facility, establish a $34.7 million restricted cash
collateral account to repurchase outstanding 11 1/4% senior
subordinated notes, make a $19.7 million distribution to
Buffets Holdings, pay $2.7 million in transaction fees
related to the refinancing transaction, pay $1.1 million in
accrued term loan interest and use $5.0 million for general
corporate purposes. The amended Credit Facility allows Buffets,
Inc. to use up to $50.0 million in cash, comprised of the
restricted cash collateral proceeds and unrestricted cash on
hand, toward the repurchase of its outstanding 11 1/4%
senior subordinated notes. Any unused portion of the restricted
cash collateral account must be applied within 180 days to
repay indebtedness under the term loan portion of the amended
Credit Facility. As of June 30, 2004, Buffets, Inc. had
expended $33.8 million to redeem $29.6 million of
senior subordinated notes at an average price of 110.4% and had
$16.2 million of restricted cash and cash equivalents for
further repurchases. The Company recorded a $4.2 million
write-off of debt issuance cost associated with the amendment of
the Credit Facility and $0.6 million of transaction fees
associated with an uncompleted bond offering as a loss related
to refinancing. The Company also recognized a $5.3 million
loss related to the early extinguishment of debt. Buffets, Inc.
completed its bond repurchase program in August 2004, expending
an additional $15.7 million to redeem $14.3 million of
senior subordinated notes at an average price of 106.7% during
fiscal 2005. The remaining $0.5 million was paid on the
amended Credit Facility in August 2004.
On May 18, 2004, Buffets Holdings issued
13 7/8% senior discount notes due 2010 in a Rule 144A
offering with a stated aggregate principal amount at maturity
(including accreted amounts) of $132.0 million. Buffets
Holdings used the $75.1 million in gross proceeds from the
offering and $0.1 million of cash on hand to redeem its
series B junior subordinated notes due 2011 plus accrued and
unpaid interest ($9.2 million), make a distribution to its
stockholders ($60.9 million) and pay transaction fees and
expenses related to the offering ($5.1 million). As part of
the transaction fees and expenses related to the offering, the
Company recognized approximately $2.2 million of bonus
payments to certain restaurant and corporate employees as
financing-related compensation expenses.
In July 2004, Buffets Holdings filed a
registration statement with the SEC to effect the exchange of
its outstanding 13 7/8% senior discount notes for
registered 13 7/8% senior discount notes due 2010.
Description of Business
The Company owns and operates a chain of
restaurants under the names of Old Country Buffet, Country
Buffet, HomeTown Buffet, Granny's Buffet, Country Roadhouse
Buffet & Grill, Tahoe Joe's Famous Steakhouse and Soup
'N Salad Unlimited in the United States. Until June 2003,
the Company also operated 13 Original Roadhouse Grill
restaurants. The Company, operating principally in the mid-
F-8
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
scale family dining industry segment, owned and
operated 360 restaurants (352 family buffet restaurants) and
franchised 20 restaurants operating as of June 30, 2004.
Principles of Consolidation
The consolidated financial statements include the
accounts of the Company and its subsidiaries. All significant
intercompany transactions have been eliminated in consolidation.
Fiscal Year
Beginning July 3, 2002, the Company changed
its fiscal year so that it ends on the Wednesday nearest
June 30 of each year. The Company's new fiscal year is
comprised of 52 or 53 weeks divided into four fiscal
quarters of 12, 12, 16, and 12 or 13 weeks, respectively.
Prior to July 3, 2002, its fiscal year ended on the
Wednesday nearest December 31 of each year and was
comprised of 52 or 53 weeks divided into four fiscal
quarters of 16, 12, 12, and 12 or 13 weeks, respectively. All
references herein to "2004" represent the 52-week
period ended June 30, 2004. All references herein to
"2003" represent the 52-week period ended July 3,
2003. All references herein to "2002" represent the
26-week period ended July 3, 2002. All references herein to
"2001" represent the 52-week period ended
January 2, 2002.
Reclassifications
Certain amounts shown in the prior-period
consolidated financial statements have been reclassified to
conform with the current period consolidated financial statement
presentation. These reclassifications had no effect on net
income (loss) or shareholder's equity (deficit) as
previously presented.
2     Summary of
Significant Accounting Policies
Cash and Cash Equivalents
Investments with original maturities of three
months or less are considered to be cash equivalents and are
recorded at cost, which approximates market value. Cash
equivalents consist principally of commercial paper and money
market funds.
Restricted Cash and Cash
    Equivalents
Restricted cash and cash equivalents consist of
money market funds. These funds are restricted for the
repurchase of Buffets, Inc.'s outstanding 11 1/4%
senior subordinated notes. Any unused portion of the restricted
funds must be applied to repay indebtedness under the term loan
portion of the Credit Facility by August 18, 2004.
Receivables
Receivables primarily consist of credit card
receivables, landlord receivables and vendor rebates. Landlord
receivables represent the portion of costs for leasehold
improvements remaining to be reimbursed by landlords at
year-end. Vendor rebates result from discounts on purchases
negotiated with the vendors. Rebates are recorded as a reduction
to food costs in the statement of operations as the associated
food cost is recognized.
Inventories
Inventories, consisting primarily of food,
beverage, china and smallwares for each restaurant location, are
stated at the lower of cost or market. Cost is determined by the
first-in, first-out method for food and
F-9
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
beverage inventories. China and smallwares are
stated at their original cost and subsequent additions and
replacements are expensed as purchased.
Property and Equipment
Property and equipment are stated at cost.
Depreciation is provided using the straight-line method for
financial reporting purposes and accelerated methods for income
tax reporting purposes. Equipment is depreciated over estimated
useful lives, ranging from 3 to 10 years. Leasehold
improvements are amortized over the terms of the related leases,
generally 10 to 15 years. Buildings are depreciated over
estimated useful lives, generally 39 1/2 years.
Maintenance and repairs are charged to expense as
incurred. Major improvements, which extend the useful life of an
item, are capitalized and depreciated. The cost and accumulated
depreciation of property and equipment retired or otherwise
disposed of are removed from the related accounts, and any
residual values are charged or credited to income.
Property and equipment was as follows (in
thousands):
July 3,
July 2,
June 30,
2002
2003
2004
Land
$
1,662
$
1,669
$
1,137
Buildings
174
2,696
2,999
Equipment
111,611
117,928
130,938
Leasehold improvements
148,210
121,140
134,215
Less — Accumulated depreciation and
    amortization
63,307
89,293
119,671
$
198,350
$
154,140
$
149,618
The Company sold 23 restaurant locations in 2001,
one location in 2002, 30 locations in 2003 and one location in
2004. The Company leased the restaurants back applying
provisions of Statement of Financial Accounting Standards
(SFAS) No. 98, "Accounting for Leases." Net
proceeds from the transactions were approximately
$39.1 million in 2001, $2.3 million in 2002,
$26.1 million in 2003 and $2.7 million in 2004. The
aggregate initial annual rent associated with the sale and
leaseback transactions was $3.2 million in 2001,
$0.2 million in 2002, $3.7 million in 2003 and
$0.3 million in 2004. The Company did not recognize a gain
or loss on these transactions in 2001, 2002 or 2004, but
recorded a loss of $5.9 million in 2003. The losses
primarily reflected the impairment of certain of the properties
for which the net proceeds were less than the book value of the
leasehold assets. In addition, the net proceeds for certain of
the properties were greater than the book value of the leasehold
assets resulting in a deferred gain of $3.6 million in 2003
and $0.3 million in 2004. These deferred gains are being
accreted over the lives of the respective restaurant leases,
ranging from 17 to 25 years. The Company does not have any
continuing involvement with these sale and leaseback locations.
These leases are accounted for as operating leases.
Goodwill
Goodwill, a result of the Acquisition, represents
the excess of cost over net assets acquired. Goodwill was
amortized on a straight-line basis over 15 to 30 years
until the adoption of SFAS No. 142, "Goodwill and
Other Intangible Assets," on January 3, 2002. Since
the adoption of SFAS No. 142, goodwill is no longer
amortized, but is tested at least annually for impairment.
Accumulated amortization for goodwill was $13.5 million as of
July 3, 2002. There were no goodwill impairment charges for
any of the periods presented.
F-10
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The following table shows net income (loss)
adjusted to reflect the adoption of SFAS No. 142 as of the
beginning of the respective periods (in thousands):
For the
For the
26-Week
For the
For the
Year Ended
Transitional
Year Ended
Year Ended
January 2,
Period Ended
July 2,
June 30,
2002
July 3, 2002
2003
2004
Reported net income (loss)
$
12,555
$
(7,517
)
$
11,927
$
7,970
Add: goodwill amortization
10,942
—
—
—
Add: liquor license amortization
23
—
—
—
Adjusted net income (loss)
$
23,520
$
(7,517
)
$
11,927
$
7,970
Assets Held for Sale
Assets held for sale included net assets such as
land, buildings and equipment that were in the process of being
sold and were recorded at the lower of carrying value or fair
market value less costs to sell based upon valuation estimates
from brokers and negotiations with prospective purchasers, as
follows (dollars in thousands):
Carrying Amounts as of
Description of Assets
Facts and Circumstances Leading
July 3,
July 2,
June 30,
to be Disposed
to Expected Disposal
2002
2003
2004
Undeveloped properties
Decision not to develop; sold two properties in
    2003; sold one property in 2004
$
1,843
$
698
$
—
Non-restaurant property
Decision to reduce fixed overhead; changed
    decision in 2003 due to increased utilization
929
—
—
Restaurant in Texas
Decision to sell underperforming restaurant; sold
    in 2004
692
692
—
Original Roadhouse
Grill restaurants
Decision to sell brand to reduce debt burden;
    sold in 2003
21,488
—
—
$
24,952
$
1,390
$
—
The expected disposal dates of the assets to be
disposed were uncertain prior to 2003, thereby resulting in
their non-current classification for those periods.
During 2003, the Company recorded an adjustment
to direct and occupancy costs to reduce the carrying amount of
the non-restaurant property by approximately $0.1 million
upon the decision to retain the facility. The restaurants held
for sale had revenues of approximately $38.6 million and
operating income of approximately $3.2 million for 2003.
The sale of the Original Roadhouse Grill restaurants in June
2003 resulted in a gain of approximately $7.1 million,
which has been presented as a separate line item in the
accompanying consolidated statements of operations.
During 2004, the Company sold one undeveloped
property and recognized a loss of approximately
$0.1 million in direct and occupancy costs in the
consolidated statements of operations. In addition, the Company
sold one restaurant and recorded a gain of approximately
$0.6 million in direct and occupancy costs. The restaurant
held for sale had no revenues or operating profit for 2004.
F-11
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Other Assets
Other assets consist principally of debt issuance
costs, notes receivable and other intangibles net of accumulated
amortization of $0.1 million, $1.3 million and
$1.1 million as of July 3, 2002, July 2, 2003,
and June 30, 2004, respectively. Debt issuance costs are
the capitalized costs incurred in conjunction with amending the
Credit Facility and issuing senior subordinated, and senior
discount, notes. The debt issuance costs are being amortized
over the terms of the financing arrangements using the effective
interest method. Other intangibles include trademarks, franchise
fees and liquor licenses. Trademarks and franchise fees are
being amortized on a straight-line basis over 10 years.
Liquor licenses are not amortized, as they have indefinite
lives. Notes receivable principally arose from the sale of
certain restaurant facilities. Long-term and short-term notes
receivable collectively totaled $0.8 million as of
July 3, 2002, $3.4 million as of July 2, 2003 and
$2.7 million as of June 30, 2004. The notes receivable
had due dates between 2006 and 2008.
The gross carrying amount and accumulated
amortization of each major intangible asset class was as follows
(in thousands):
Franchise Fees
Trademarks
Liquor Licenses
Total
Gross
Gross
Gross
Gross
Carrying
Accumulated
Carrying
Accumulated
Carrying
Accumulated
Carrying
Accumulated
Amount
Amortization
Amount
Amortization
Amount
Amortization
Amount
Amortization
BALANCE, July 3, 2002
$
69
$
(30
)
$
34
$
(14
)
$
457
$
(25
)
$
560
$
(69
)
FY 2003 Activity:
Amortization
—
(14
)
—
(7
)
—
—
—
(21
)
Reductions
—
—
—
—
(140
)
—
(140
)
—
BALANCE, July 2, 2003
69
(44
)
34
(21
)
317
(25
)
420
(90
)
FY 2004 Activity:
Amortization
—
(12
)
—
(8
)
—
—
—
(20
)
Additions
—
—
—
—
28
—
28
—
BALANCE, June 30, 2004
$
69
$
(56
)
$
34
$
(29
)
$
345
$
(25
)
$
448
$
(110
)
The estimated amortization expense for next year
is approximately $20,000 after which franchise fees and
trademarks are expected to be fully amortized.
Recoverability of Long-Lived
    Assets
The Company periodically evaluates long-lived
assets and goodwill related to those assets for impairment
whenever events or changes in circumstances indicate the
carrying value amount of an asset or group of assets may not be
recoverable. The Company considers a history of operating losses
and the other factors described to be its primary indicator of
potential impairment. Assets are grouped and evaluated for
impairment at the lowest level for which there are identifiable
cash flows, namely individual restaurants. A restaurant is
deemed to be impaired if a forecast of undiscounted future
operating cash flows directly related to the restaurant,
including disposal value, if any, are less than its carrying
amount. If a restaurant is determined to be impaired, the loss
is measured as the amount by which the carrying amount of the
restaurant exceeds its fair value. Fair value is based on quoted
market prices in active markets, if available. If quoted market
prices are not available, an estimate of fair value is based on
the best information available, including prices for similar
assets or the results of valuation techniques such as discounted
estimated future cash flows as if the decision to continue to
use the impaired restaurant was a new investment decision. The
Company generally measures fair value by discounting estimated
future cash flows. Considerable management judgment is necessary
to estimate discounted future cash flows. Accordingly, actual
results could vary significantly from such estimates. There were
no impairment charges
F-12
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
in 2001. During 2002, the Company expensed
approximately $1.1 million relating to the impairment of
assets associated with 12 restaurants (see Note 4).
During 2003, the Company expensed approximately
$4.8 million relating to the impairment of long-lived
assets for 27 restaurants, as well as an additional
$0.8 million related to the impairment of assets associated
with 12 restaurants (see Note 4). During 2004, the
Company expensed approximately $1.9 million relating to the
impairment of long-lived assets for 17 restaurants.
Pre-opening Costs
Costs incurred in connection with the opening of
new restaurants are expensed as incurred in accordance with
Statement of Position (SOP) 98-5, "Reporting on the
Costs of Start-up Activities." SOP 98-5 requires
companies to expense as incurred all start-up and pre-opening
costs that are not otherwise capitalized as long-lived assets.
Advertising Expenses
Advertising costs are charged to expense as
incurred.
Income Taxes
The Company utilizes SFAS No. 109,
"Accounting for Income Taxes." Under SFAS
No. 109, the deferred tax provision is determined under the
liability method. Under this method, deferred tax assets and
liabilities are recognized based on differences between the
financial statement and tax bases of assets and liabilities
using presently enacted tax rates.
Joint Ventures
During fiscal 2004, the Company paid $370,000 to
purchase the remaining 20% minority interest from its lone
consolidated joint venture, Tahoe Joe's Inc., which owned
and operated Tahoe Joe's Famous Steakhouses.
Revenue Recognition
The Company's restaurant sales include
proceeds from the sale of food and beverages at Company-owned
restaurants.
The Company recognizes franchise income for
royalty fees and initial franchise fees received from
franchisees. Initial fees are recognized as income when required
obligations under the terms of the franchise agreement are
fulfilled. Royalty fees are based on gross sales and are
recognized in income as sales are generated. Franchise income
was $1.3 million for 2001, $0.7 million for 2002,
$1.2 million for 2003 and $1.0 million for 2004.
Franchise income is included in other income in the accompanying
consolidated statements of operations.
The Company sells gift cards at its restaurants.
Revenues are recognized upon the redemption of the gift cards.
Unearned revenue represents gift cards sold and not yet redeemed
and is included in accrued liabilities in the accompanying
consolidated balance sheets.
Use of Estimates
The preparation of financial statements in
conformity with accounting principles generally accepted in the
United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and
liabilities at the date
F-13
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
of the financial statements and the reported
amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Fair Value Disclosure of Financial
    Instruments
The Company's financial instruments consist
of cash and cash equivalents, receivables, notes receivable,
accounts payable and long-term debt for which current carrying
amounts are equal to or approximate fair market values. The
following methods were used in estimating the fair value of each
class of financial instrument:
For cash equivalents, receivables and accounts
payable, the carrying amounts approximate fair value because of
the short duration of these financial instruments. The fair
value of notes receivable is estimated based on the present
value of expected future cash flows discounted at the interest
rate currently offered by the Company, which approximates rates
currently being offered by local lending institutions for loans
of similar terms to companies of comparable credit risk. The
fair value of long-term debt is estimated by discounting future
cash flows for these instruments using the Company's
expected borrowing rate for debt of comparable risk and maturity.
Segment Reporting
The Company operates principally in the mid-scale
family dining industry segment in the United States, providing
similar products to similar customers. The Company's
restaurants possess similar economic characteristics resulting
in similar long-term expected financial performance
characteristics. Revenues are derived principally from food and
beverage sales. The Company does not rely on any major customers
as a source of revenue. Management believes that the Company
meets the criteria for aggregating its operations into a single
reporting segment.
Stock-Based Compensation
The Company accounts for activity under its
stock-based employee compensation plans under the recognition
and measurement principles of APB (Accounting Principles Board)
Opinion No. 25, "Accounting for Stock Issued to
Employees." Accordingly, the Company does not recognize
compensation expense in connection with employee stock option
grants because stock options are granted at exercise prices not
less than the fair value of the common stock on the date of
grant.
F-14
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The following table shows the effect on net
income (loss) had the Company applied the fair value expense
recognition provisions of SFAS No. 123, "Accounting
for Stock-Based Compensation," to stock-based employee
compensation (in thousands):
For the
26-Week
For the Year
Transitional
For the Year
For the Year
Ended
Period Ended
Ended
Ended
January 2, 2002
July 3, 2002
July 2, 2003
June 30, 2004
Net income (loss) as reported
$
12,555
$
(7,517
)
$
11,927
$
7,970
Compensation expense recorded in the financial
    statements, net of tax effect
—
—
—
—
Pro forma compensation expense under the
    provisions of SFAS No. 123, net of tax effect
(87
)
(38
)
(5
)
(9
)
Pro forma
$
12,468
$
(7,555
)
$
11,922
$
7,961
Weighted-average fair value per share of options
    granted
$
2.64
$
5.75
$
0.81
$
0.32
Information on the Company's stock-based
compensation plans and data used to calculate compensation
expense in the table above are described in more detail in
Note 6.
3     Recent
Accounting Pronouncements
In January 2003, the Financial Accounting
Standards Board (FASB) issued FASB Interpretation
No. (FIN) 46, "Consolidation of Variable Interest
Entities, an Interpretation of ARB 51." The primary
objectives of FIN 46 are to provide guidance on the
identification of entities for which control is achieved through
means other than through voting rights (variable interest
entities, or VIEs) and how to determine when and which business
enterprise should consolidate the VIE (the primary beneficiary).
In December 2003, the FASB issued FIN 46(R),
"Consolidation of Variable Interest Entities," which
represents a revision to FIN 46. The provisions of
FIN 46(R) are effective for interests in VIEs as of the
first interim, or annual, period ending after March 15,
2004. In addition, FIN 46(R) requires that both the primary
beneficiary and all other enterprises with a significant
variable interest make additional disclosure in filings issued
after January 31, 2003. The Company adopted FIN 46(R)
as of December 17, 2003 and its adoption had no impact on
the Company's consolidated results of operations, financial
position or cash flow.
In May 2003, the FASB issued
SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and
Equity." SFAS No. 150 modifies the accounting for
certain financial instruments that, under previous guidance,
issuers could account for as equity. SFAS No. 150 requires
that those instruments be classified as liabilities in
statements of financial position. Most of the guidance in
SFAS No. 150 is effective for all financial
instruments entered into or modified after May 31, 2003, or
otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003. The Company adopted
SFAS No. 150 as of July 3, 2003 and its adoption
had no impact on the Company's consolidated results of
operations, financial position or cash flow.
F-15
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
4     Accrued
Liabilities
Accrued liabilities consisted of the following
(in thousands):
July 3, 2002
July 2, 2003
June 30, 2004
Accrued compensation
$
21,764
$
20,599
$
16,686
Redemption fee payable
17,000
—
—
Accrued workers' compensation
13,468
16,894
16,916
Accrued interest
564
13,152
10,282
Accrued insurance
10,203
8,513
7,771
Accrued store closing costs
7,091
2,782
1,442
Unearned revenue
5,306
4,521
4,378
Accrued sales taxes
4,454
3,921
3,315
Accrued other
12,604
8,126
7,873
$
92,454
$
78,508
$
68,663
Virtually all the store closing activity recorded
in the store closing cost accrual as of June 30, 2004
relates to store closings identified and recognized prior to
December 31, 2002. The Company provided for these store
closing costs, specifically identified and approved for closure
in the succeeding year, in accordance with EITF 94-3,
"Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (including Certain
Costs Incurred in a Restructuring)," and EITF 95-3,
"Recognition of Liabilities in Connection with a Purchase
Business Combination." Store closing costs incurred
subsequent to December 31, 2002 have been provided in
accordance with SFAS No. 146, "Accounting for
Costs Associated with Exit or Disposal Activities."
The store closing costs are principally comprised
of lease termination costs and obligations, net of sublease and
other cash receipts and employee termination benefits as
summarized below (in thousands):
July 3, 2002
July 2, 2003
June 30, 2004
Lease termination costs and obligations, net of
    sublease and other cash receipts
$
6,926
$
2,782
$
1,442
Employee termination benefits
165
—
—
Total accrued store closing costs
$
7,091
$
2,782
$
1,442
F-16
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The following table summarizes store closing
reserve activity by type of cost for the past three fiscal years
(in thousands):
For the Twenty-Six
Week Transitional
For the Year
For the Year
Period Ended
Ended
Ended
July 3, 2002
July 2, 2003
June 30, 2004
BALANCE, beginning of period
$
9,378
$
7,091
$
2,782
Additions:
Lease obligations charged to earnings (as direct
    and occupancy costs)
450
167
467
Employee termination benefits charged to earnings
    (as direct and occupancy costs)
112
83
16
Reductions:
Cash payments:
Lease termination costs and obligations
1,630
3,471
1,807
Employee severance benefits
127
248
16
Change in lease obligation accrual assumptions
1,092
840
—
BALANCE, end of period
$
7,091
$
2,782
$
1,442
The change in accrual assumptions is based on the
Company receiving greater than planned sublease and other cash
receipts during 2002 and 2003. The expense recovery was included
in the same line item in the statement of operations as the
Company's impairment of underperforming restaurant
properties.
The following table summarizes planned and actual
store closing activity for the past three fiscal years:
For the Twenty-Six
Week Transitional
For the Year
For the Year
Period Ended
Ended
Ended
July 3, 2002
July 2, 2003
June 30, 2004
Number of stores:
Expected to close as of the beginning of the
    period
12
13
3
Closed during the period
9
14
15
Identified for closure during the period
10
4
19
Expected to close as of the end of the period
13
3
7
Number of employees:
Expected to be terminated as of the beginning of
    the period
420
455
105
Terminated during the period
310
490
455
Identified for termination during the period
350
140
595
Expected to be terminated as of the end of the
    period
455
105
245
F-17
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
The remaining store closing reserves are expected
to be paid, or incurred, by year as follows (in thousands):
2005
$
378
2006
293
2007
229
2008
229
2009
195
Thereafter
118
$
1,442
5
Long-Term Debt
Long-term debt outstanding was as follows (in
thousands):
July 3, 2002
July 2, 2003
June 30, 2004
Buffets, Inc.
Credit Facility:
Revolving credit facility
$
—
$
—
$
—
Term loan, interest at LIBOR plus 3.50%, due
    quarterly through June 28, 2009 (interest rate at 4.7% as
    of June 30, 2004)
245,000
171,802
228,850
Total Credit Facility
245,000
171,802
228,850
Senior subordinated notes, interest at 11.25%,
    due July 15, 2010, net of discount of $8,783 at
    July 3, 2002, $8,044 at July 2, 2003 and $6,226 at
    June 30, 2004
221,217
221,956
193,189
Total long-term debt at Buffets, Inc.
466,217
393,758
422,039
Buffets Holdings, Inc.
Series A senior subordinated notes, interest
    at 3% through December 31, 2002 and 4.75% thereafter, due
    June 25, 2011
7,764
7,764
—
Series B junior subordinated notes, interest
    at 3% through December 31, 2002 and 4.75% thereafter, due
    June 25, 2011
20,000
19,600
—
Senior discount notes, interest at 13.875%, due
    December 15, 2010, net of discount of $55,700
—
—
76,300
Grand total long-term debt
493,981
421,122
498,339
Less — current maturities
2,450
1,735
2,300
$
491,531
$
419,387
$
496,039
F-18
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
As of June 30, 2004, future maturities of
long-term debt by year were as follows (in thousands):
2005
$
2,300
2006
2,300
2007
2,300
2008
2,300
2009
219,650
Thereafter
331,415
$
560,265
Credit Facility
On February 20, 2004, Buffets, Inc. amended
and restated its Credit Facility. The amended and restated
Credit Facility provides for total borrowings of up to
$310,000,000, including (i) a $230,000,000 term loan,
(ii) a $30,000,000 revolving credit facility, (iii) a
$20,000,000 letter of credit facility, and (iv) a
$30,000,000 synthetic letter of credit facility. The terms of
the Credit Facility permit Buffets, Inc. to borrow, subject to
availability and certain conditions, incremental term loans or
to issue additional notes in an aggregate amount up to
$25,000,000. The borrowings under the term loan facility bear
interest, at Buffets, Inc.'s option, at either adjusted
LIBOR plus 3.50% or at an alternate base rate plus 2.50%,
subject to a leverage-based pricing grid. The term loan and the
synthetic letter of credit facility mature on June 28,
2009, while the revolving facility and the letter of credit
facilities mature on June 28, 2007. The borrowings due
under the term loan are payable in equal quarterly installments
in an annual amount equal to 1% of the term loan during each of
the first four and a half years of the loan, with the remaining
balance payable due in equal quarterly installments during the
last year of the loan. The Credit Facility is fully and
unconditionally guaranteed by Buffets Holdings, which has no
independent assets or operations, and is secured by
substantially all of the Company's assets. Availability
under the Credit Facility depends upon our continued compliance
with certain covenants and financial ratios including leverage,
interest coverage and fixed charge coverage as specifically
defined in the Credit Facility. Buffets, Inc. was in compliance
with all financial ratio covenants of the Credit Facility as of
June 30, 2004. The financial ratio covenant requirements
increase over time, however, as set forth in the senior credit
agreement.
As of June 30, 2004, Buffets, Inc. had
$35.1 million in outstanding letters of credit, which
expire through May 2, 2005. As of June 30, 2004, the
total borrowing availability under the revolving credit facility
was $30.0 million and the total borrowing capacity under
the letter of credit facilities was $14.9 million.
Buffets, Inc. has the option of tying its
borrowings to LIBOR or a base rate when calculating the interest
rate for the term loan. The base rate is the greater of Credit
Suisse First Boston's prime rate, or the federal funds
effective rate plus one-half of 1 percent.
11 1/4% Senior Subordinated
    Notes
On June 28, 2002, Buffets, Inc. issued
11 1/4% senior subordinated notes in the principal
amount of $230 million due July 15, 2010. Such notes
were issued at a 96.181% discount, resulting in an effective
yield of 12% to the initial principal amount. Interest is
payable semi-annually on January 15 and July 15 of
each year through July 15, 2010. Accretion of the original
issue discount was approximately $10,000 during 2002,
$0.7 million during 2003 and $0.8 million during 2004
and is included in interest expense in the accompanying
consolidated statements of operations. Except in the event of an
initial public offering, Buffets, Inc. is not entitled to redeem
the notes at its option prior to July 15, 2006. The
redemption price during the first twelve-month period following
July 15, 2006 is 105.625%. The redemption price declines by
F-19
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
1.875% per year until July 15, 2009, at
which point there is no redemption price premium. In the event
of an initial public offering prior to July 15, 2006,
Buffets, Inc. may redeem up to 35% of the aggregate principal
amount of the notes at a redemption price of 111.25%.
Furthermore, in the event of a change in control, as defined in
the indenture governing those notes, the holders of the notes
may require the Company to repurchase the notes at a purchase
price of 101% of the outstanding principal amount plus accrued
and unpaid interest.
Series A Senior Subordinated
    Notes
On June 28, 2002, Buffets Holdings issued
Series A senior subordinated notes, due June 25, 2011,
in the principal amount of $7,764,219 to holders of the
Company's senior preferred stock to make a partial
redemption of the Company's senior preferred stock. Buffets
Holdings repurchased all outstanding notes in February 2004.
Series B Junior Subordinated
    Notes
On June 28, 2002, Buffets Holdings issued
Series B junior subordinated notes, due June 25, 2011,
in the principal amount of $20,000,000 as a dividend to holders
of the Company's common stock and holders of its warrants
to purchase common stock. Buffets Holdings repurchased
$0.4 million of these notes in January 2003,
$10.5 million in February 2004 and the remaining
$8.7 million in May 2004.
13 7/8% Senior Discount
    Notes
On May 18, 2004, the Company issued
$132 million aggregate principal amount at maturity of our
13 7/8% senior discount notes due December 15,
2010. The 13 7/8% senior discount notes were issued at
a discount to their aggregate principal amount at maturity.
Prior to July 31, 2008, interest will accrue on the
13 7/8% senior discount notes in the form of an
increase in the accreted value of those notes. The accreted
value of each note will increase until July 31, 2008 at a
rate of 13.875% per annum. After this date, cash interest
on the notes will accrue and be payable on January 31 and
July 31 of each year at a rate of 13.875% per annum.
Accretion of the discount was approximately $1.2 million
during 2004 and is included in interest expense in the
accompanying consolidated statements of operations. If the
Company fails to meet certain leverage ratio tests on or about
July 31, 2006 or July 31, 2008, additional interest
will accrue on the notes from that date at a rate of 1% per
annum, up to a maximum of 2% per annum.
6
Shareholders' Equity (Deficit)
Authorized Shares
The Company has 3,600,000 authorized shares of
common stock and 1,100,000 authorized shares of preferred stock.
Stock Warrants
On October 2, 2000, Buffets Holdings issued
$80 million principal amount of 14% senior
subordinated notes due September 29, 2008, with detachable
warrants to purchase 173,218 shares of Buffets
Holdings' common stock and 51,965 shares of Buffets
Holdings' preferred stock. Contemporaneously, Buffets
Holdings issued $15 million principal amount of
16% senior subordinated notes due September 29, 2008,
with detachable warrants to purchase 32,478 shares of
common stock and 9,744 shares of preferred stock. Such
warrants were valued collectively at $5.4 million. On
June 28, 2002, all preferred stock warrants were redeemed
in conjunction with the refinancing transactions, leaving
205,696 common stock warrants outstanding. The common stock
warrants have an exercise price of $.01 per share and
expire September 29, 2010.
F-20
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Call Rights and Put Rights
The Company has a call right to repurchase stock
held by the Company's management at any time following the
termination of a management stockholder's employment with
the Company. In the event of the death or disability of a
management stockholder, the management stockholder's estate
has a put right, for a period of one year following the date of
termination of employment, whereby the Company may be required
to repurchase the stock of the management stockholder at a price
that would be paid by the Company if it were exercising its call
rights. The Company may defer payment of the put right in excess
of $4.0 million per fiscal year per stockholder and in
excess of $8.0 million per fiscal year for all stockholders.
Stock Option Plan
In October 2000, Buffets Holdings adopted the
Equity Participation Plan, a non-qualified stock option plan
under which up to 113,750 shares of common stock are
reserved for issuance to certain employees. The option exercise
price for each option, as determined at the date of grant, is
based on the four full fiscal quarters immediately preceding the
date of the award using the amount by which the sum of 4.5 times
earnings before interest, taxes, depreciation and amortization,
as defined in the Credit Facility, and the proceeds payable to
the Company upon the exercise of the options, exceeds the
consolidated indebtedness of the Company as of the date of the
award. Options are fully vested upon issuance and generally
expire 15 years from the date of the grant or at an earlier
date, as determined by the Board of Directors. However, options
are only exercisable in the event of a liquidity event, as
defined in the Stockholders' Agreement. The Company
reserves the right to pay the plan participant the appreciated
value of the shares rather than actually issue equity.
Activity under the stock option plan is
summarized as follows:
For the 26-Week
Transitional Period
For the Year Ended
For the Year Ended
Ended July 3, 2002
July 2, 2003
June 30, 2004
Weighted-
Weighted-
Weighted-
Avg
Avg
Avg
Exercise
Exercise
Exercise
Shares
Price
Shares
Price
Shares
Price
Outstanding at beginning of year
51,367
$
14.29
59,310
$
19.08
65,822
$
17.93
Granted
10,793
40.01
10,218
11.64
44,305
13.08
Exercised
—
—
—
—
—
—
Canceled
(2,850
)
12.42
(3,706
)
19.10
(11,985
)
12.14
Outstanding at end of year
59,310
$
19.08
65,822
$
17.93
98,142
$
16.42
The following table summarizes the Company's
outstanding stock options as of June 30, 2004:
Options Outstanding
Weighted-Avg
Remaining
Number
Option Term
Weighted-Avg
Range of Exercise Price
Outstanding
(in years)
Exercise Price
$ 0-$10
41,749
12.04
$
9.86
$11-$20
35,251
14.53
14.69
$21-$30
11,380
12.35
25.51
$31-$40
1,037
12.52
32.09
$41-$50
8,725
12.83
41.07
$ 0-$50
98,142
13.05
$
16.42
F-21
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
To determine compensation expense under the fair
value method, the fair value of each option grant is estimated
on the date of grant using the Black-Scholes option-pricing
model. The principal assumptions the Company used in applying
the Black-Scholes model were as follows:
For the Twenty-
Six Week
Transitional
For the Year
For the Year
Period Ended
Ended
Ended
July 3, 2002
July 2, 2003
June 30, 2003
Risk-free interest rate
4.24
%
2.07
%
1.32
%
Expected volatility
0.0
%
0.0
%
0.0
%
Expected dividend yield
0.0
%
0.0
%
0.0
%
Expected life in years
3.7
2.8
1.8
Information regarding the effect on net income
(loss) had the Company applied the fair value expense
recognition provisions of SFAS No. 123 is included in
Note 2.
7
Retirement Plan
The Company has a 401(k) plan covering all
employees with one year of service, age 21 or older, who
worked at least 1,000 hours in the prior year. The
Company's discretionary contributions to the plan are
determined annually, on a calendar year basis, by the Board of
Directors and are used to match a portion of employees'
voluntary contributions. Participants are 100% vested in their
own contributions immediately and are vested in the
Company's contributions 20% per year of service with
the Company, such that they are fully vested at the end of five
years of service with the Company. The Board of Directors
authorized and recognized matching contributions of
$0.9 million for 2001 and $0.1 million for the
calendar year ended December 31, 2003. These contributions
were paid during the first quarter of the succeeding calendar
year. There were no matching contributions for calendar year
2002. The 2004 matching contribution will not be authorized
until the end of the 2004 calendar year. The Company has an
accrual of $0.4 million as of June 30, 2004 for
estimated 2004 matching contributions related to the first half
of calendar year 2004.
F-22
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
8
Income Taxes
The income tax expense (benefit) consisted of the
following (in thousands):
For the
Twenty-Six
Week
Transitional
Period
For the Year
Ended
For the Year
For the Year
Ended
July 3,
Ended
Ended
January 2, 2002
2002
July 2, 2003
June 30, 2004
Federal:
Current
$
11,870
$
(950
)
$
3,209
$
(710
)
Deferred
18
(2,448
)
1,130
1,050
11,888
(3,398
)
4,339
340
State:
Current
3,401
394
1,433
1,158
Deferred
3
(350
)
(453
)
150
3,404
44
980
1,308
Income tax expense (benefit)
$
15,292
$
(3,354
)
$
5,319
$
1,648
Deferred income taxes are provided to record the
income tax effect of temporary differences that occur when
transactions are reported in one period for financial statement
purposes and in another period for tax purposes. The tax effect
of the temporary differences giving rise to the Company's
deferred tax assets and liabilities was as follows (in
thousands):
July 3, 2002
July 2, 2003
June 30, 2004
Non-
Non-
Non-
Current
current
Current
current
Current
current
Asset
Liability
Asset
Asset
Asset
Asset
Property and equipment
$
—
$
(9,091
)
$
—
$
(5,476
)
$
—
$
(6,336
)
Deferred rent
—
7,227
—
7,586
—
8,325
Self-insurance reserve
2,975
—
1,832
—
2,986
—
Accrued workers' compensation
4,929
—
6,341
—
6,223
—
Accrued payroll and related benefits
3,034
—
3,303
—
1,943
—
Accrued store closing costs
2,729
—
1,120
—
555
—
Net operating loss and tax credit carryforwards
4,564
—
1,934
—
3,719
—
Deferred gain on sale leaseback transaction
—
1,576
—
1,495
—
1,298
Goodwill
—
(112
)
—
(569
)
—
(1,348
)
Other
769
225
686
(104
)
489
(906
)
Total
$
19,000
$
(175
)
$
15,216
$
2,932
$
15,915
$
1,033
F-23
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
A reconciliation of the Company's income tax
expense (benefit) at the federal statutory rate to the reported
income tax expense (benefit) was as follows (in thousands):
For the Twenty-
Six Week
For the Year
Transitional
For the Year
For the Year
Ended
Period Ended
Ended
Ended
January 2, 2002
July 3, 2002
July 2, 2003
June 30, 2004
Federal income tax expense (benefit) at statutory
    rate of 35%
$
9,834
$
(3,667
)
$
6,417
$
3,367
State income taxes, net of federal benefit
2,204
29
666
850
General business credits
(932
)
(656
)
(1,769
)
(1,396
)
Goodwill amortization
3,767
—
—
—
Other
419
940
5
(1,173
)
Income tax expense (benefit)
$
15,292
$
(3,354
)
$
5,319
$
1,648
The $1.2 million other line item above in
2004 represents a reduction in the Company's liability
resulting from a reassessment of the Company's estimates
following a favorable resolution to a state tax audit.
9
Related-Party Transactions
The Company entered an advisory agreement with
Caxton-Iseman, a majority shareholder with approximately 78.5%
of Buffets Holdings' outstanding common stock under its
control, under which Caxton-Iseman provides various advisory
services to the Company in exchange for an annual advisory fee
equal to 2% of the Company's annual consolidated earnings
before interest, taxes, depreciation and amortization.
Caxton-Iseman receives an additional fee for advisory services
relating to particular financial transactions equal to 1% of the
transaction value. Under these agreements, the Company paid
Caxton-Iseman $2.9 million for 2001, $1.2 million for
2002, $2.8 million for 2003 and $3.1 million for 2004.
The Company entered an advisory agreement with
Sentinel Capital Partners, L.L.C. a minority shareholder with
approximately 7.1% of Buffets Holdings' outstanding common
stock under its control, under which Sentinel Capital Partners,
L.L.C. provides various advisory services to the Company for an
annual advisory fee of $200,000. Under this agreement, the
Company paid $200,000 in 2001, approximately $108,000 in 2002,
$200,000 in 2003 and $200,000 in 2004.
Roe H. Hatlen, a founder of the Company, former
Chief Executive Officer and Chairman of the Board of Directors,
and a current member on Buffets Holdings' Board of
Directors, entered into an advisory arrangement with the Company
and Buffets Holdings that expires in December 2005. Under his
advisory agreement, Mr. Hatlen received $325,000 in 2001,
$150,000 in 2002, $283,000 in 2003 and $257,000 in 2004. He will
receive $238,000 in fiscal 2005 and $113,000 in fiscal 2006. In
addition, Mr. Hatlen will receive health, medical and other
benefits comparable to those made available to the
Company's management employees through the end of calendar
year 2005. Mr. Hatlen holds approximately 5.1% of Buffets
Holdings' outstanding common stock.
C. Dennis Scott, a founder of the Company and
former Vice Chairman, entered into an advisory arrangement with
the Company and Buffets Holdings that expires in 2005. Under
Mr. Scott's advisory agreement, he received no cash
compensation after fiscal 2000. Mr. Scott purchased
approximately 0.5% of the shares of Buffets Holdings common
stock. These shares are subject to Buffets Holdings' right
to repurchase these shares upon Mr. Scott's
termination as an advisor to Buffets Holdings at various prices
depending on whether Mr. Scott is terminated with or
without cause. Mr. Scott retains an office in
F-24
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
San Diego at the Company's expense and
receives health, medical and other benefits comparable to those
made available to Company management through the end of calendar
year 2005. Mr. Scott is required to provide services to the
Company for no more than two days per month.
Robert M. Rosenberg, a director of the Buffets
Holdings' Board of Directors, provided various advisory
services to the Company for an advisory fee of $35,000 during
fiscal 2003 and $3,500 during fiscal 2004.
Buffets Holdings has entered into stockholder
agreements with certain members of management. These agreements
govern the five-year vesting of Buffets Holdings common stock,
transfer restrictions and agreements not to compete for two
years after their employment terminates. Some management
investors obtained recourse loans to purchase shares in Buffets
Holdings which were guaranteed by the Company. Each of the
management investors pledged his or her respective ownership
interests in the shares of Buffets Holdings and executed a
promissory note in favor of Buffets Holdings, whereby each
agreed to repay the corresponding amount of the guaranty,
together with interest at fixed rates ranging between 6% and
7% per annum at the earliest of (1) seven years,
(2) termination of employment with the Company or
(3) the sale, disposition or other transfer of the
management investor's ownership interest in the shares. The
guarantees totaled $0.5 million as of July 3, 2002,
$0.5 million at July 2, 2003 and $0.1 million at
June 30, 2004.
An officer was advanced $315,000 on
February 20, 2002 for a homestead purchase. Interest was
payable annually at a rate equal to the Company's interest
rate on its senior secured borrowing, up to a maximum of
12% per annum. The principal plus accrued but unpaid
interest was repaid in 2003 upon the officer's resignation.
10
Commitments and Contingencies
Litigation
The Company is involved in various legal actions
arising in the ordinary course of business. In the opinion of
management, the ultimate disposition of these matters will not
have a material adverse effect on the Company's
consolidated financial position or the results of operations.
Operating Leases
The Company conducts most of its operations from
leased restaurant facilities, all of which are classified as
operating leases.
The following is a schedule of future minimum
lease payments required under noncancelable operating leases as
of June 30, 2004 (in thousands):
2005
$
53,913
2006
52,713
2007
50,482
2008
48,346
2009
44,707
Thereafter
282,894
Total future minimum lease payments
$
533,055
Minimum payments have not been reduced by minimum
sublease rentals of approximately $24.9 million.
F-25
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Certain of these leases require additional rent
based on a percentage of net sales and may require additional
payments for real estate taxes and common area maintenance on
the properties. Many of these leases also contain renewal
options exercisable at the election of the Company. Under the
provisions of certain leases, there are certain escalations in
payments over the base lease term as well as renewal periods
which have been reflected in rent expense on a straight-line
basis over the life of the anticipated terms. Differences
between minimum lease payments and straight-line rent expense
are reflected as deferred lease obligations in the accompanying
consolidated balance sheets.
Rent expense was as follows (in thousands):
For the Twenty-
Six Week
For the Year
Transitional
For the Year
For the Year
Ended
Period Ended
Ended
Ended
January 2, 2002
July 3, 2002
July 2, 2003
June 30, 2004
Minimum rents
$
43,732
$
23,510
$
49,315
$
49,911
Contingent rents
1,343
943
2,207
2,983
Less: Sublease rents
(721
)
(440
)
(1,388
)
(2,739
)
Deferred rents
835
890
1,530
2,381
Percentage rents
2,559
1,419
1,955
1,954
$
47,748
$
26,322
$
53,619
$
54,490
11
Transition Period Disclosure
    (Unaudited)
The following unaudited information for the
twenty-eight week period ended July 28, 2001 and the
fifty-week period ended July 3, 2002 are included for
comparison purposes (in thousands).
For the
For the
Twenty-Eight
Fifty-
Week Period
Week Period
Ended
Ended
July 28, 2001
July 3, 2002
RESTAURANT SALES
$
567,821
$
1,003,997
RESTAURANT COSTS:
Food
180,058
309,862
Labor
176,608
314,079
Direct and occupancy
125,166
225,213
Total restaurant costs
481,832
849,154
ADVERTISING EXPENSES
15,708
26,281
GENERAL AND ADMINISTRATIVE EXPENSES
26,700
49,556
GOODWILL AMORTIZATION
5,975
4,967
OPERATING INCOME
37,606
74,039
INTEREST EXPENSE
24,887
33,606
INTEREST INCOME
(324
)
(586
)
OTHER INCOME
(493
)
(1,145
)
LOSS RELATED TO REFINANCING
—
38,724
INCOME BEFORE INCOME TAXES
13,536
3,440
INCOME TAX EXPENSE
7,735
4,203
Net income (loss)
$
5,801
$
(763
)
F-26
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
12
Condensed Consolidating Financial
    Statements
The following condensed consolidating financial
statements are presented pursuant to Rule 3-10 of
Regulation S-X. Buffets, Inc. is a subsidiary issuer of
11 1/4% senior subordinated notes that are fully and
unconditionally guaranteed by its parent, Buffets Holdings, as
well as each of its subsidiaries including HomeTown Buffets,
Inc., OCB Restaurant Co., OCB Purchasing Co., Restaurant
Innovations, Inc., Distinctive Dining, Inc., Tahoe Joe's,
Inc., Buffets Leasing Company, LLC, HomeTown Leasing Company,
LLC, OCB Leasing Company, LLC, and Tahoe Joe's Leasing
Company, LLC. All guarantees are joint and several and the
subsidiary issuer and the subsidiary guarantors are 100% owned
by the parent company. There are certain restrictions on the
ability of the Company to obtain funds from its subsidiaries.
F-27
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Condensed Consolidating Balance
Sheet
As of July 3, 2002
Subsidiary
Subsidiary
Parent
Issuer
Guarantors
Eliminations
Consolidated
(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
58
$
227
$
8,077
$
—
$
8,362
Receivables
—
26,837
337,871
(356,026
)
8,682
Inventories
—
721
17,911
—
18,632
Prepaid expenses and other current assets
—
5,438
4,648
—
10,086
Deferred income taxes
—
17,514
1,486
—
19,000
Total current assets
58
50,737
369,993
(356,026
)
64,762
PROPERTY AND EQUIPMENT, net
—
11,491
186,859
—
198,350
GOODWILL, net
—
18,730
293,433
—
312,163
ASSETS HELD FOR SALE
—
—
24,952
—
24,952
OTHER ASSETS, net
—
412,192
5,755
(402,502
)
15,445
Total assets
$
58
$
493,150
$
880,992
$
(758,528
)
$
615,672
LIABILITIES AND SHAREHOLDERS' EQUITY
    (DEFICIT)
CURRENT LIABILITIES:
Accounts payable
$
—
$
391,901
$
2,243
$
(356,725
)
$
37,419
Accrued liabilities
12
56,729
35,713
—
92,454
Income taxes payable
96
2,900
—
(96
)
2,900
Current maturities of long-term debt
—
147
2,303
—
2,450
Total current liabilities
108
451,677
40,259
(356,821
)
135,223
LONG-TERM DEBT, net of current maturities
27,764
27,826
700,941
(265,000
)
491,531
DEFERRED INCOME TAXES
—
175
—
—
175
DEFERRED LEASE OBLIGATIONS
—
387
18,442
—
18,829
OTHER LONG-TERM LIABILITIES
—
3,885
104
536
4,525
Total liabilities
27,872
483,950
759,746
(621,285
)
650,283
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY (DEFICIT)
Common stock
32
—
—
—
32
Additional paid in capital
—
82,311
199,494
(281,805
)
—
Retained earnings (accumulated deficit)
(27,846
)
(73,111
)
(78,248
)
144,562
(34,643
)
Total shareholders' equity (deficit)
(27,814
)
9,200
121,246
(137,243
)
(34,611
)
Total liabilities and shareholders' equity
    (deficit)
$
58
$
493,150
$
880,992
$
(758,528
)
$
615,672
F-28
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Condensed Consolidating Balance
Sheet
As of July 2, 2003
Subsidiary
Subsidiary
Parent
Issuer
Guarantors
Eliminations
Consolidated
(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
108
$
8,511
$
7,236
$
—
$
15,855
Receivables
—
14,965
341,403
(349,890
)
6,478
Inventories
—
824
17,638
—
18,462
Prepaid expenses and other current assets
—
2,981
5,058
—
8,039
Assets held for sale
—
—
1,390
—
1,390
Deferred income taxes
—
13,730
1,486
—
15,216
Total current assets
108
41,011
374,211
(349,890
)
65,440
PROPERTY AND EQUIPMENT, net
—
10,427
143,713
—
154,140
GOODWILL, net
—
18,730
293,433
—
312,163
DEFERRED INCOME TAXES
—
2,932
—
—
2,932
OTHER ASSETS, net
—
415,127
5,686
(402,502
)
18,311
Total assets
$
108
$
488,227
$
817,043
$
(752,392
)
$
552,986
LIABILITIES AND SHAREHOLDERS' EQUITY
    (DEFICIT)
CURRENT LIABILITIES:
Accounts payable
$
—
$
391,486
$
2,909
$
(350,618
)
$
43,777
Accrued liabilities
1,101
49,865
27,542
—
78,508
Income taxes payable
—
3,401
1,386
—
4,787
Current maturities of long-term debt
—
104
1,631
—
1,735
Total current liabilities
1,101
444,856
33,468
(350,618
)
128,807
LONG-TERM DEBT, net of current maturities
27,364
23,521
633,502
(265,000
)
419,387
DEFERRED LEASE OBLIGATIONS
—
573
19,140
—
19,713
OTHER LONG-TERM LIABILITIES
—
3,687
3,101
1,101
7,889
Total liabilities
28,465
472,637
689,211
(614,517
)
575,796
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY (DEFICIT)
Common stock
32
—
—
—
32
Additional paid in capital
—
82,311
199,494
(281,805
)
—
Retained earnings (accumulated deficit)
(28,389
)
(66,721
)
(71,662
)
143,930
(22,842
)
Total shareholders' equity (deficit)
(28,357
)
15,590
127,832
(137,875
)
(22,810
)
Total liabilities and shareholders' equity
    (deficit)
$
108
$
488,227
$
817,043
$
(752,392
)
$
552,986
F-29
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Condensed Consolidating Balance
Sheet
As of June 30, 2004
Subsidiary
Subsidiary
Parent
Issuer
Guarantors
Eliminations
Consolidated
(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
96
$
19,771
$
6,205
$
—
$
26,072
Restricted cash and cash equivalents
—
16,228
—
—
16,228
Receivables
—
41,056
318,430
(352,523
)
6,963
Inventories
—
789
17,884
—
18,673
Income taxes receivable
1,619
—
—
(1,619
)
—
Prepaid expenses and other current assets
—
4,711
533
—
5,244
Deferred income taxes
—
14,429
1,486
—
15,915
Total current assets
1,715
96,984
344,538
(354,142
)
89,095
PROPERTY AND EQUIPMENT, net
—
8,206
141,412
—
149,618
GOODWILL, net
—
18,730
293,433
—
312,163
DEFERRED INCOME TAXES
—
1,033
—
—
1,033
OTHER ASSETS, net
2,847
410,013
5,264
(402,502
)
15,622
Total assets
$
4,562
$
534,966
$
784,647
$
(756,644
)
$
567,531
LIABILITIES AND SHAREHOLDERS' EQUITY
    (DEFICIT)
CURRENT LIABILITIES:
Accounts payable
180
395,799
2,519
(355,218
)
43,280
Accrued liabilities
—
44,126
24,537
—
68,663
Income taxes payable
—
4,531
1,619
(1,619
)
4,531
Current maturities of long-term debt
—
138
2,162
—
2,300
Total current liabilities
180
444,594
30,837
(356,837
)
118,774
LONG-TERM DEBT, net of current maturities
76,300
25,184
659,555
(265,000
)
496,039
DEFERRED LEASE OBLIGATIONS
—
1,143
20,478
—
21,621
OTHER LONG-TERM LIABILITIES
—
3,476
3,537
—
7,013
Total liabilities
76,480
474,397
714,407
(621,837
)
643,447
COMMITMENTS AND CONTINGENCIES SHAREHOLDERS'
    EQUITY (DEFICIT)
Common stock
32
—
—
—
32
Additional paid in capital
—
82,311
199,494
(281,805
)
—
Retained earnings (accumulated deficit)
(71,950
)
(21,742
)
(129,254
)
146,998
(75,948
)
Total shareholders' equity (deficit)
(71,918
)
60,569
70,240
(134,807
)
(75,916
)
Total liabilities and shareholders' equity
    (deficit)
$
4,562
$
534,966
$
784,647
$
(756,644
)
$
567,531
F-30
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Condensed Consolidating Statement of
Operations
For the Year Ended January 2,
2002
Subsidiary
Subsidiary
Parent
Issuer
Guarantors
Eliminations
Consolidated
(In thousands)
RESTAURANT SALES
$
—
$
40,483
$
1,004,251
$
—
$
1,044,734
RESTAURANT COSTS:
Food
—
13,487
312,784
—
326,271
Labor
—
13,066
313,357
—
326,423
Direct and occupancy
—
5,256
228,119
—
233,375
Total restaurant costs
—
31,809
854,260
—
886,069
ADVERTISING EXPENSES
—
1,017
26,623
—
27,640
GENERAL AND ADMINISTRATIVE EXPENSES
249
1,949
48,672
(301
)
50,569
GOODWILL AMORTIZATION
—
657
10,285
—
10,942
OPERATING INCOME (LOSS)
(249
)
5,051
64,411
301
69,514
INTEREST EXPENSE
—
2,604
40,801
—
43,405
INTEREST INCOME
—
(42
)
(656
)
—
(698
)
OTHER INCOME
—
(420
)
(638
)
18
(1,040
)
INCOME (LOSS) BEFORE INCOME TAXES
(249
)
2,909
24,904
283
27,847
INCOME TAX EXPENSE (BENEFIT)
(96
)
1,406
13,982
—
15,292
Net income (loss)
$
(153
)
$
1,503
$
10,922
$
283
$
12,555
F-31
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Condensed Consolidating Statement of
Operations
For the Twenty-Six Week Transitional Period
Ended July 3, 2002
Subsidiary
Subsidiary
Parent
Issuer
Guarantors
Eliminations
Consolidated
(In thousands)
RESTAURANT SALES
$
—
$
20,196
$
506,888
$
—
$
527,084
RESTAURANT COSTS:
Food
—
6,669
156,980
—
163,649
Labor
—
6,414
157,850
—
164,264
Direct and occupancy
—
2,517
114,487
—
117,004
Total restaurant costs
—
15,600
429,317
—
444,917
ADVERTISING EXPENSES
—
525
13,824
—
14,349
GENERAL AND ADMINISTRATIVE EXPENSES
133
979
24,718
(143
)
25,687
OPERATING INCOME (LOSS)
(133
)
3,092
39,029
143
42,131
INTEREST EXPENSE
12
908
14,168
—
15,088
INTEREST INCOME
—
(16
)
(196
)
—
(212
)
LOSS RELATED TO REFINANCING
248
38,476
—
—
38,724
OTHER INCOME
—
(236
)
(559
)
197
(598
)
INCOME (LOSS) BEFORE INCOME TAXES
(393
)
(36,040
)
25,616
(54
)
(10,871
)
INCOME TAX EXPENSE (BENEFIT)
96
(11,866
)
8,416
—
(3,354
)
Net income (loss)
$
(489
)
$
(24,174
)
$
17,200
$
(54
)
$
(7,517
)
F-32
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Condensed Consolidating Statement of
Operations
For the Year Ended July 2, 2003
Subsidiary
Subsidiary
Parent
Issuer
Guarantors
Eliminations
Consolidated
(In thousands)
RESTAURANT SALES
$
—
$
38,983
$
946,303
$
—
$
985,286
RESTAURANT COSTS:
Food
—
13,122
298,769
—
311,891
Labor
—
12,570
300,962
—
313,532
Direct and occupancy
—
5,189
220,228
—
225,417
Total restaurant costs
—
30,881
819,959
—
850,840
ADVERTISING EXPENSES
—
1,131
27,458
—
28,589
GENERAL AND ADMINISTRATIVE EXPENSES
—
1,796
43,586
—
45,382
IMPAIRMENT OF ASSETS
—
—
4,803
—
4,803
GAIN ON SALE OF ORIGINAL ROADHOUSE GRILL
    RESTAURANTS
—
—
(7,088
)
—
(7,088
)
LOSS ON SALE LEASEBACK TRANSACTIONS
—
—
5,856
—
5,856
OPERATING INCOME
—
5,175
51,729
—
56,904
INTEREST EXPENSE
1,089
2,409
37,737
—
41,235
INTEREST INCOME
—
(307
)
—
—
(307
)
OTHER INCOME
—
(1,270
)
—
—
(1,270
)
INCOME (LOSS) BEFORE INCOME TAXES
(1,089
)
4,343
13,992
—
17,246
INCOME TAX EXPENSE
—
955
4,364
—
5,319
Net income (loss)
$
(1,089
)
$
3,388
$
9,628
$
—
$
11,927
F-33
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Condensed Consolidating Statement of
Operations
For the Year Ended June 30,
2004
Subsidiary
Subsidiary
Parent
Issuer
Guarantors
Eliminations
Consolidated
(In thousands)
RESTAURANT SALES
$
—
$
39,851
$
902,980
$
—
$
942,831
RESTAURANT COSTS:
Food
—
14,072
293,735
307,807
Labor
—
12,544
274,923
287,467
Direct and occupancy
—
5,393
211,995
—
217,388
Total restaurant costs
—
32,009
780,653
—
812,662
ADVERTISING EXPENSES
—
1,093
24,761
—
25,854
GENERAL AND ADMINISTRATIVE EXPENSES
—
1,806
40,916
—
42,722
IMPAIRMENT OF ASSETS
—
—
1,878
—
1,878
FINANCING-RELATED COMPENSATION EXPENSES
1,466
774
—
—
2,240
OPERATING INCOME (LOSS)
(1,466
)
4,169
54,772
—
57,475
INTEREST EXPENSE
2,164
2,247
35,198
—
39,609
INTEREST INCOME
—
(424
)
—
—
(424
)
LOSS RELATED TO REFINANCING
575
4,201
—
—
4,776
LOSS RELATED TO EARLY EXTINGUISHMENT OF DEBT
—
5,275
—
—
5,275
OTHER INCOME
—
(1,379
)
—
—
(1,379
)
INCOME (LOSS) BEFORE INCOME TAXES
(4,205
)
(5,751
)
19,574
—
9,618
INCOME TAX EXPENSE (BENEFIT)
(1,619
)
(1,359
)
4,626
—
1,648
Net income (loss)
$
(2,586
)
$
(4,392
)
$
14,948
$
—
$
7,970
F-34
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Condensed Consolidating Statement of Cash
Flows
For the Year Ended January 2,
2002
Subsidiary
Subsidiary
Parent
Issuer
Guarantors
Eliminations
Consolidated
(In thousands)
OPERATING ACTIVITIES:
Net income (loss)
$
(153
)
$
1,503
$
10,922
$
283
$
12,555
Adjustments to reconcile net income (loss) to net
    cash provided by (used in) operating activities:
Depreciation and amortization
—
3,113
50,291
—
53,404
Amortization of debt issuance costs
—
234
3,671
—
3,905
Accretion of original issue discount
—
46
727
—
773
Deferred interest
—
76
1,193
—
1,269
Asset write-downs
—
—
491
—
491
Deferred income taxes
—
2
19
—
21
Loss on disposal of assets
—
—
361
—
361
Changes in assets and liabilities:
Receivables
81
2,071
(3,221
)
—
(1,069
)
Inventories
—
30
660
—
690
Prepaid expenses and other assets
—
(1,068
)
(503
)
—
(1,571
)
Accounts payable
—
22,141
(30,080
)
—
(7,939
)
Accrued and other liabilities
—
3,181
(341
)
(3
)
2,837
Income taxes payable/refundable
(96
)
3,204
—
—
3,108
Net cash provided by (used in) operating
    activities
(168
)
34,533
34,190
280
68,835
INVESTING ACTIVITIES:
Proceeds from sale leaseback transactions
—
—
39,075
—
39,075
Purchase of fixed assets
—
(8,228
)
(29,868
)
—
(38,096
)
Corporate cash advances (payments)
—
(18,856
)
19,136
(280
)
—
Proceeds from sale of other assets
—
—
1,596
—
1,596
Net cash provided by (used in) investing
    activities
—
(27,084
)
29,939
(280
)
2,575
FINANCING ACTIVITIES:
Repayment of debt
—
(3,234
)
(50,662
)
—
(53,896
)
Repurchase of common stock
(71
)
—
—
—
(71
)
Proceeds from issuance of common stock
200
—
—
—
200
Repayment of revolving credit facility
—
(300
)
(4,700
)
—
(5,000
)
Debt issuance costs
—
(49
)
(774
)
—
(823
)
Net cash provided by (used in) financing
    activities
129
(3,583
)
(56,136
)
—
(59,590
)
NET CHANGE IN CASH AND CASH EQUIVALENTS
(39
)
3,866
7,993
—
11,820
CASH AND CASH EQUIVALENTS, beginning of period
97
11,806
3,890
—
15,793
CASH AND CASH EQUIVALENTS, end of period
$
58
$
15,672
$
11,883
$
—
$
27,613
F-35
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Condensed Consolidating Statement of Cash
Flows
For the Twenty-Six Week Transitional Period
Ended July 3, 2002
Subsidiary
Subsidiary
Parent
Issuer
Guarantors
Eliminations
Consolidated
(In thousands)
OPERATING ACTIVITIES:
Net income (loss)
$
(489
)
$
(24,174
)
$
17,200
$
(54
)
$
(7,517
)
Adjustments to reconcile net income (loss) to net
    cash provided by (used in) operating activities:
Depreciation and amortization
—
1,726
18,683
—
20,409
Amortization of debt issuance costs
—
97
1,520
—
1,617
Net loss related to refinancing:
Write-off of debt issuance costs
—
11,022
—
—
11,022
Accrued redemption fees
—
17,000
—
—
17,000
Original issue discount expensed
—
4,107
—
—
4,107
Accretion of original issue discount
—
21
336
—
357
Loss related to early extinguishment of debt
—
37
577
—
614
Deferred income taxes
—
(168
)
(2,630
)
—
(2,798
)
Loss on disposal of assets
—
—
89
—
89
Changes in assets and liabilities:
Receivables
(123
)
368
(1,377
)
150
(982
)
Inventories
—
(19
)
(174
)
—
(193
)
Prepaid expenses and other assets
—
(1,449
)
(108
)
—
(1,557
)
Accounts payable
—
8,493
(2,094
)
—
6,399
Accrued and other liabilities
12
13,777
(20,979
)
—
(7,190
)
Income taxes payable/refundable
192
(2,223
)
—
(96
)
(2,127
)
Net cash provided by (used in) operating
    activities
(408
)
28,615
11,043
—
39,250
INVESTING ACTIVITIES:
Proceeds from sale leaseback transactions
—
2,281
—
—
2,281
Purchase of fixed assets
—
(2,226
)
(12,054
)
—
(14,280
)
Corporate cash advances (payments)
—
109,601
(109,601
)
—
—
Proceeds from sale of other assets
—
—
662
—
662
Net cash provided by (used in) investing
    activities
—
109,656
(120,993
)
—
(11,337
)
FINANCING ACTIVITIES:
Repayment of debt
—
(21,198
)
(332,100
)
—
(353,298
)
Redemption of preferred stock warrants
(7,200
)
—
—
—
(7,200
)
Redemption of preferred stock
(108,227
)
—
—
—
(108,227
)
Repurchase of common stock
(291
)
—
—
—
(291
)
Proceeds from issuance of subordinated notes
—
13,273
207,944
—
221,217
Proceeds from credit facility
—
14,700
230,300
—
245,000
Dividends
116,126
(148,415
)
—
—
(32,289
)
Debt issuance costs
—
(12,076
)
—
—
(12,076
)
Net cash provided by (used in) investing
    activities
408
(153,716
)
106,144
—
(47,164
)
NET CHANGE IN CASH AND CASH EQUIVALENTS
—
(15,445
)
(3,806
)
—
(19,251
)
CASH AND CASH EQUIVALENTS, beginning of period
58
15,672
11,883
—
27,613
CASH AND CASH EQUIVALENTS, end of period
$
58
$
227
$
8,077
$
—
$
8,362
F-36
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Condensed Consolidating Statement of Cash
Flows
For the Year Ended July 2, 2003
Subsidiary
Subsidiary
Parent
Issuer
Guarantors
Eliminations
Consolidated
(In thousands)
OPERATING ACTIVITIES:
Net income (loss)
$
(1,089
)
$
3,388
$
9,628
$
—
$
11,927
Adjustments to reconcile net income (loss) to net
    cash provided by (used in) operating activities:
Depreciation and amortization
—
3,510
33,375
—
36,885
Amortization of debt issuance costs
—
71
1,111
—
1,182
Accretion of original issue discount
—
44
695
—
739
Impairment of assets
—
—
4,803
—
4,803
Deferred income taxes
—
41
636
—
677
Gain on sale of Original Roadhouse Grill
    restaurants
—
—
(7,088
)
—
(7,088
)
Loss on disposal of assets
—
—
565
—
565
Loss on sale leaseback transactions
—
—
5,856
—
5,856
Changes in assets and liabilities:
Receivables
96
4,759
(2,509
)
—
2,346
Inventories
—
(103
)
273
—
170
Prepaid expenses and other assets
—
2,457
(410
)
—
2,047
Accounts payable
—
7,684
666
—
8,350
Accrued and other liabilities
1,089
(5,608
)
(8,171
)
—
(12,690
)
Income taxes payable/refundable
(96
)
501
1,482
—
1,887
Net cash provided by operating activities
—
16,744
40,912
—
57,656
INVESTING ACTIVITIES:
Proceeds from sale leaseback transactions
—
—
26,117
—
26,117
Proceeds from sale of Original Roadhouse Grill
    restaurants
—
—
25,850
—
25,850
Purchase of fixed assets
—
(2,423
)
(23,299
)
—
(25,722
)
Corporate cash advances (payments)
—
(883
)
883
—
—
Proceeds from sale of other assets
—
—
417
—
417
Net cash provided by (used in) investing
    activities
—
(3,306
)
29,968
—
26,662
FINANCING ACTIVITIES:
Repayment of debt
—
(4,392
)
(68,806
)
—
(73,198
)
Redemption of subordinated notes
(400
)
—
—
—
(400
)
Repurchase of common stock
(576
)
—
—
—
(576
)
Proceeds from issuance of common stock
450
—
—
—
450
Dividends
576
(576
)
—
—
—
Debt issuance costs
—
(186
)
(2,915
)
—
(3,101
)
Net cash provided by (used in) investing
    activities
50
(5,154
)
(71,721
)
—
(76,825
)
NET CHANGE IN CASH AND CASH EQUIVALENTS
50
8,284
(841
)
—
7,493
CASH AND CASH EQUIVALENTS, beginning of period
58
227
8,077
—
8,362
CASH AND CASH EQUIVALENTS, end of period
$
108
$
8,511
$
7,236
$
—
$
15,855
F-37
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Condensed Consolidating Statement of Cash
Flows
For the Year Ended June 30,
2004
Subsidiary
Subsidiary
Parent
Issuer
Guarantors
Eliminations
Consolidated
(In thousands)
OPERATING ACTIVITIES:
Net income (loss)
$
(2,586
)
$
(4,392
)
$
14,948
$
—
$
7,970
Adjustments to reconcile net income (loss) to net
    cash provided by operating activities:
Depreciation and amortization
—
3,655
30,152
—
33,807
Amortization of debt issuance costs
—
82
1,288
—
1,370
Net loss related to refinancing:
Write-off of debt issuance costs
—
4,201
—
—
4,201
Accretion of original issue discount
1,227
49
773
—
2,049
Loss related to early extinguishment of debt
—
5,275
—
—
5,275
Impairment of assets
—
—
1,878
—
1,878
Deferred income taxes
—
72
1,128
—
1,200
Loss on disposal of assets
—
—
305
—
305
Changes in assets and liabilities:
Receivables
—
75,747
(74,123
)
(1,859
)
(235
)
Inventories
—
(428
)
(246
)
—
(674
)
Prepaid expenses and other assets
—
(1,730
)
4,525
—
2,795
Accounts payable
180
(287
)
(390
)
—
(497
)
Accrued and other liabilities
(1,101
)
(4,592
)
(3,005
)
—
(8,698
)
Income taxes payable/refundable
(1,619
)
1,130
233
—
(256
)
Net cash provided by (used in) operating
    activities
(3,899
)
78,782
(22,534
)
(1,859
)
50,490
INVESTING ACTIVITIES:
Proceeds from sale leaseback transactions
—
—
2,710
—
2,710
Purchase of fixed assets
—
(1,432
)
(31,575
)
—
(33,007
)
Corporate cash advances (payments)
—
1,623
(3,482
)
1,859
—
Acquisition of 20% minority interest in Tahoe
    Joe's Inc.
—
—
(370
)
—
(370
)
Proceeds from sale of other assets
—
—
2,284
—
2,284
Net cash provided by (used in) investing
    activities
—
191
(30,433
)
1,859
(28,383
)
FINANCING ACTIVITIES:
Repayment of debt
—
(10,377
)
(162,576
)
—
(172,953
)
Redemption of subordinated notes
(27,364
)
—
—
—
(27,364
)
Repurchase of common stock
(380
)
—
—
—
(380
)
Proceeds from issuance of common stock
241
—
—
—
241
Proceeds from issuance of senior discount notes
75,073
—
—
—
75,073
Unrestricted cash proceeds from credit facility
—
11,718
183,582
—
195,300
Initial restricted cash proceeds from credit
    facility
—
2,082
32,618
—
34,700
Restricted cash proceeds from credit facility
    available as of year end
—
(16,228
)
—
—
(16,228
)
Use of restricted cash for early extinguishment
    of debt
—
(18,472
)
—
—
(18,472
)
Use of unrestricted cash for early extinguishment
    of debt
—
(918
)
(14,382
)
—
(15,300
)
Dividends
(40,836
)
(20,101
)
—
—
(60,937
)
Debt issuance costs
(2,847
)
(163
)
(2,560
)
—
(5,570
)
Net cash provided by (used in) investing
    activities
3,887
(52,459
)
36,682
—
(11,890
)
NET CHANGE IN CASH AND CASH EQUIVALENTS
(12
)
26,514
(16,285
)
—
10,217
CASH AND CASH EQUIVALENTS, beginning of period
108
8,511
7,236
—
15,855
CASH AND CASH EQUIVALENTS, end of period
$
96
$
35,025
$
(9,049
)
$
—
$
26,072
F-38
Table of Contents
BUFFETS HOLDINGS, INC. AND
SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
13
Subsequent Event
On August 27, 2004, the Company filed a
registration statement with the Securities and Exchange
Commission in relation to a planned initial public offering of
an as yet undetermined amount of Income Deposit Securities
("IDSs"), common stock and senior subordinated notes.
In conjunction with this planned offering, Buffets, Inc. plans
to issue an as yet undetermined amount of senior notes as well
as borrow an as yet undetermined amount under its credit
facility which will be amended in connection with the offering.
The Company intends to use the net proceeds from
this planned offering, net proceeds from the planned offering of
senior notes by Buffets, Inc., borrowings under Buffets,
Inc.'s amended credit facility and cash on hand among other
things to repay all outstanding borrowings under Buffets,
Inc.'s existing credit facility, repurchase Buffets,
Inc.'s 11 1/4% senior subordinated notes and
repurchase or redeem Buffets Holdings'
13 7/8% senior discount notes.
F-39
Table of Contents
PART II
INFORMATION NOT REQUIRED IN
PROSPECTUS
Item 13.
Other Expenses of Issuance and
    Distribution.
The following sets forth the estimated expenses
and costs (other than underwriting discounts and commissions)
expected to be incurred in connection with the issuance and
distribution of the IDSs and senior subordinated notes
registered hereby:
SEC registration fee
$
69,685
NASD fee
30,500
Printing and engraving expenses
*
Accounting fees and expenses
*
Legal fees and expenses
*
Blue Sky fees and expenses
*
listing
    application fee
*
Transfer agent fees and expenses
*
Miscellaneous
*
TOTAL
$
*
*
To be completed by amendment
Item 14.
Indemnification of Directors and
    Officers.
Section 145 of the Delaware General
Corporation Law (the "DGCL") grants a Delaware
corporation the power to indemnify any director, officer,
employee or agent against reasonable expenses (including
attorneys' fees) incurred by him in connection with any
proceeding brought by or on behalf of the corporation and
against judgments, fines, settlements and reasonable expenses
(including attorneys' fees) incurred by him in connection
with any other proceeding, if (a) he acted in good faith
and in a manner he reasonably believed to be in or not opposed
to the best interests of the corporation, and (b) in the
case of any criminal proceeding, he had no reasonable cause to
believe his conduct was unlawful. Except as ordered by a court,
however, no indemnification is to be made in connection with any
proceeding brought by or in the right of the corporation where
the person involved is adjudged to be liable to the corporation.
Section 8 of our amended certificate of
incorporation and Section 8.1 of our by-laws provide that
we shall indemnify and hold harmless, to the extent permitted by
applicable law, any person who was or is made or is threatened
to be made a party in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a
"proceeding") by reason of the fact that he, or a
person for whom he is the legal representative, is or was a
director or officer of the corporation or is or was serving at
the request of the corporation as a director or officer of any
other corporation or in a capacity with comparable authority or
responsibilities for a partnership, joint venture, trust,
employee benefit plan or other enterprise against judgments,
fines, penalties, excise taxes, amounts paid in settlement and
costs, charges and expenses (including attorney's fees,
disbursements and other charges). Persons who are not directors
or officers of the corporation (or otherwise entitled to
indemnification) may be similarly indemnified in respect of
service to the corporation or to an other entity at the request
of the corporation to the extent our board of directors at any
time specifies that such persons are entitled to such benefits.
Section 102 of the DGCL permits the
limitation of directors' personal liability to the
corporation or its stockholders for monetary damages for breach
of fiduciary duties as a director except for (i) any breach
of the director's duty of loyalty to the corporation or its
stockholders, (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
the law, (iii) breaches under section 174 of the DGCL,
which relate to unlawful payments of dividends or unlawful stock
repurchase or redemptions, and (iv) any transaction from
which the director derived an improper personal benefit.
II-1
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Section 7 of our amended certificate of
incorporation limits the personal liability of our directors to
the fullest extent permitted by paragraph (7) of
subsection (b) of section 102 of the DGCL.
Each of Buffets, Inc., Distinctive Dining, Inc.,
HomeTown Buffet Merger Company, Inc., OCB Purchasing Co., OCB
Restaurant Co., and Restaurant Innovations, Inc. (each, a
"Minnesota Corporation") is subject to the Minnesota
Business Corporation Act (the "Corporation Act").
Section 302A.521 of the Corporation Act provides that,
subject to such prohibition or conditions as are set forth in
its articles of incorporation or bylaws, a corporation must
indemnify an officer or director who is made or threatened to be
made a party to a proceeding by reason of such person's
present or former official capacity against judgments,
penalties, fines, settlements and reasonable expenses, including
attorneys' fees and disbursements, incurred by such person
in connection with the proceeding, if certain criteria are met.
These criteria, all of which must be met by the person seeking
indemnification, are (a) that such person has not been
indemnified by another organization or employee benefit plan for
the same judgments, penalties, fines, settlements and expenses;
(b) that such person acted in good faith; (c) that no
improper personal benefit was obtained by such person and such
person satisfied certain statutory conflicts of interest
provisions, if applicable; (d) that, in the case of a
criminal proceeding, such person had no reasonable cause to
believe that the conduct was unlawful; and (e) that such
person acted in a manner he reasonably believed was in the best
interests of the corporation, or, in the case of conduct while
serving as a director, officer, partner, trustee, employee or
agent of another organization or employee benefit plan, not
opposed to the best interests of the corporation.
The bylaws of each Minnesota Corporation requires
the corporation to provide indemnification to its officers,
directors, employees and agents to the full extent permitted by
the laws of the State of Minnesota.
The articles of incorporation of each Minnesota
Corporation eliminates the personal liability of its directors
to the corporation and its shareholders for monetary damages for
breach of fiduciary duty, other than liability of a director
(a) for breach of the director's duty of loyalty to
the corporation or its shareholders; (b) for acts or
omissions not in good faith that involve intentional misconduct
or a knowing violation of law; (c) under Section 302A.559
(liability for illegal distributions to shareholders) or 80A.23
(liability for violations of the anti-fraud or registration
provisions of state securities laws) of the Minnesota Statutes;
(d) for any transaction from which the director derived an
improper personal benefit; or (e) for any act or omission
occurring prior to the effective date of the articles.
Each of Buffets Leasing Company, LLC, HomeTown
Leasing Company, LLC, OCB Leasing Company, LLC and Tahoe
Joe's Leasing Company, LLC (each, a "Minnesota
LLC") is a limited liability company organized under the
Minnesota Limited Liability Company Act (the "LLC
Act"). Section 322B.699 of the LLC Act provides that,
subject to such prohibition or conditions as are set forth in
its articles of organization or bylaws, a limited liability
company must indemnify its managers or governors who is made or
threatened to be made a party to a proceeding by reason of such
person's present or former official capacity against
judgments, penalties, fines, settlements and reasonable
expenses, including attorneys' fees and disbursements,
incurred by such person in connection with the proceeding, if
certain criteria are met. These criteria, all of which must be
met by the person seeking indemnification, are (a) that
such person has not been indemnified by another organization or
employee benefit plan for the same judgments, penalties, fines,
settlements and expenses; (b) that such person acted in
good faith; (c) that no improper personal benefit was
obtained by such person and such person satisfied certain
statutory conflicts of interest provisions, if applicable;
(d) that, in the case of a criminal proceeding, such person
had no reasonable cause to believe that the conduct was
unlawful; and (e) that such person acted in a manner he
reasonably believed was in the best interests of the company,
or, in the case of conduct while serving as a director, officer,
partner, trustee, employee or agent of another organization or
employee benefit plan, not opposed to the best interests of the
company.
The bylaws of each Minnesota LLC requires the
company to provide indemnification to its managers and governors
for any expenses and liabilities incurred by such persons by
reason of their former or present official capacity with the
company to the fullest extent required or permitted by Section
322B.699 of the LLC Act, or as required or permitted by
applicable law.
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The articles of organization of each Minnesota
LLC eliminates the personal liability of its governors to the
company and its members for monetary damages for breach of
fiduciary duty, other than liability of a governor (a) for
breach of the governor's duty of loyalty to the company or
its members; (b) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law; (c) under Sections 322B.56 (liability for illegal
distributions to members) or 80A.23 (liability for violations of
the anti-fraud or registration provisions of state securities
laws) of the Minnesota Statutes; (d) for any transaction
from which the governor derived an improper personal benefit; or
(e) for any act or omission occurring prior to the
effective date of the articles.
Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors,
officers or persons controlling the registrant pursuant to the
foregoing provisions, the registrant has been informed that in
the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is
therefore unenforceable.
We maintain directors' and officers'
liability insurance for our executive officers and certain of
our directors.
Item 15.
Recent Sales of Unregistered
    Securities.
In the three years prior to the filing of this
registration statement, we issued and sold the following
unregistered securities:
(a) On October 11, 2001, we granted
    options to purchase an aggregate of 3,256 shares of our
    common stock to certain of our employees, each at an exercise
    price of $26.11 per share.
(b) On December 18, 2001, we granted
    options to purchase an aggregate of 6,600 shares of our
    common stock to certain of our employees, each at an exercise
    price of $26.11 per share.
(c) On January 3, 2002, we granted
    options to purchase an aggregate of 1,268 shares of our
    common stock to certain of our employees, each at an exercise
    price of $32.09 per share.
(d) On April 25, 2002, we granted
    options to purchase an aggregate of 9,525 shares of our
    common stock to certain of our employees, each at an exercise
    price of $41.07 per share.
(e) On June 28, 2002, we issued
    $7.8 million aggregate principal amount of Series A
    Senior Subordinated Notes due 2011 to our preferred stockholders
    as part of the redemption of our senior preferred stock and
    $20.0 million aggregate principal amount of Series B
    Junior Subordinated Notes due 2011 as a dividend to holders of
    our common stock and holders of warrants to purchase our common
    stock. The subordinated notes bore interest at 3% per annum
    from June 28, 2002 to through December 31, 2002, and
    thereafter bore interest at the rate of 4.75% per annum.
(f) On May 22, 2002 we issued an
    aggregate of 14,625 shares of our common stock to certain
    of our employees.
(g) On July 4, 2002, we granted options
    to purchase an aggregate of 1,375 shares of our common
    stock to certain of our employees, each at an exercise price of
    $25.56 per share.
(h) On April 10, 2003, we granted
    options to purchase an aggregate of 8,843 shares of our
    common stock to certain of our employees, each at an exercise
    price of $9.47 per share.
(i) On July 3, 2003, we granted options
    to purchase an aggregate of 9,206 shares of our common
    stock to certain of our employees, each at an exercise price of
    $8.91 per share.
(j) On February 4, 2004, we granted
    options to purchase an aggregate of 5,141 shares of our
    common stock to certain of our employees, each at an exercise
    price of $11.34 per share.
(k) On April 7, 2004, we granted
    options to purchase an aggregate of 10,000 shares of our
    common stock to one of our employees, each at an exercise price
    of $11.34 per share.
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(l) On April 7, 2004 we issued an
    aggregate of 21,250 shares of our common stock to certain
    of our employees.
(m) On April 8, 2004, we granted
    options to purchase an aggregate of 19,958 shares of our
    common stock to certain of our employees, each at an exercise
    price of $16.33 per share.
(n) On May 18, 2004, we issued
    $132,000,000 aggregate principal amount at maturity ($75,072,935
    in gross proceeds) of our 13 7/8% Senior Discount
    Notes due 2010 to Credit Suisse First Boston LLC
    ("CSFB"), as initial purchaser, for resale to
    qualified institutional buyers under Rule 144A of the
    Securities Act or non-U.S. persons pursuant to
    Regulation S under the Securities Act. The initial
    purchaser received a discount of $2,252,188.
The grants of options to purchase our common
stock disclosed in paragraphs (a), (b), (c), (d), (g), (h),
(i), (j), (k) and (m) were made under our Equity
Participation Plan. Each of the above-described transactions
were exempt from registration pursuant to Section 4(2) of
the Securities Act as transactions by an issuer not involving a
public offering and/or Rule 701 under the Securities Act as
exempt offers and sales of securities under a written
compensatory benefit plan. Appropriate legends were or will be
affixed to the share certificates and other instruments issued
in such transactions. All recipients either have received or
will receive adequate information about us or had or have
access, through director or employment relationships, to such
information.
The issuances disclosed in
paragraph (e) were exempt from registration in
reliance upon Section 3(a)(9) of the Securities Act and, in
the case of the dividend, because it did not involve an offer or
sale of a security. The securities had appropriate legends
affixed to them.
The issuances disclosed in
paragraphs (f) and (l) were exempt from
registration in reliance upon Section 4(2) of the
Securities Act or promulgated thereunder as transactions by an
issuer not involving a public offering. All recipients were
accredited or sophisticated investors. Appropriate legends were
affixed to the share certificates issued in such transactions.
All recipients have received adequate information about us or
had access, through director or employment relationships, to
such information.
The issuances disclosed in paragraph (n)
were exempt from registration in reliance upon Section 4(2)
of the Securities Act or promulgated thereunder as transactions
by an issuer not involving a public offering. All recipients
represented that they were accredited investors, as that term is
defined in the Securities Act and the regulations promulgated
thereunder. The recipients of securities in the transaction
represented their intention to transfer the securities only in
compliance with Rule 144A promulgated under the Securities
Act or Regulation S promulgated under the Securities Act
and appropriate legends were affixed to the notes and issued in
such transactions.
Item 16.
Exhibits and Financial Statement
    Schedules.
(a)
Exhibits
Exhibit
Number
Description
1
.1*
Form of Underwriting Agreement.
3
.1**
Amended Certificate of Incorporation of Buffets
    Holdings, Inc. (incorporated by reference to Exhibit 3.1 to
    Buffets Holdings, Inc.'s Registration Statement on
    Form S-4, filed with the Commission on June 25, 2004
    (SEC file No. 333-116897)).
3
.2**
By-Laws of Buffets Holdings, Inc. (incorporated
    by reference to Exhibit 3.2 to Buffets Holdings,
    Inc.'s Registration Statement on Form S-4, filed with
    the Commission on June 25, 2004 (SEC file
    No. 333-116897)).
3
.3**
Articles of Incorporation of Buffets, Inc.
    (incorporated by reference to Exhibit 3.1 to Buffets,
    Inc.'s Registration Statement on Form S-4, filed with
    the Commission on August 16, 2002 (SEC file
    No. 333-98301)).
II-4
Table of Contents
Exhibit
Number
Description
3
.4**
By-laws of Buffets, Inc. (incorporated by
    reference to Exhibit 3.2 to Buffets, Inc.'s
    Registration Statement on Form S-4, filed with the
    Commission on August 16, 2002 (SEC file
    No. 333-98301)).
3
.5**
Articles of Incorporation of Distinctive Dining,
    Inc. (incorporated by reference to Exhibit 3.3 to Buffets,
    Inc.'s Registration Statement on Form S-4, filed with
    the Commission on August 16, 2002 (SEC file
    No. 333-98301)).
3
.6**
By-laws of Distinctive Dining, Inc. (incorporated
    by reference to Exhibit 3.4 to Buffets, Inc.'s
    Registration Statement on Form S-4, filed with the
    Commission on August 16, 2002 (SEC file
    No. 333-98301)).
3
.7
Articles of Incorporation of HomeTown Buffet, Inc.
3
.8
By-laws of HomeTown Buffet, Inc.
3
.9**
Articles of Incorporation of OCB Purchasing Co.
    (incorporated by reference to Exhibit 3.7 to Buffets,
    Inc.'s Registration Statement on Form S-4, filed with
    the Commission on August 16, 2002 (SEC file
    No. 333-98301)).
3
.10**
By-laws of OCB Purchasing Co. (incorporated by
    reference to Exhibit 3.8 to Buffets, Inc.'s
    Registration Statement on Form S-4, filed with the
    Commission on August 16, 2002 (SEC file
    No. 333-98301)).
3
.11**
Articles of Incorporation of OCB Restaurant Co.
    (incorporated by reference to Exhibit 3.9 to Buffets,
    Inc.'s Registration Statement on Form S-4, filed with
    the Commission on August 16, 2002 (SEC file
    No. 333-98301)).
3
.12**
By-laws of OCB Restaurant Co. (incorporated by
    reference to Exhibit 3.10 to Buffets, Inc.'s
    Registration Statement on Form S-4, filed with the
    Commission on August 16, 2002 (SEC file
    No. 333-98301)).
3
.13**
Articles of Incorporation of Restaurant
    Innovations, Inc. (incorporated by reference to
    Exhibit 3.11 to Buffets, Inc.'s Registration Statement
    on Form S-4, filed with the Commission on August 16,
    2002 (SEC file No. 333-98301)).
3
.14**
By-laws of Restaurant Innovations, Inc.
    (incorporated by reference to Exhibit 3.12 to Buffets,
    Inc.'s Registration Statement on Form S-4, filed with
    the Commission on August 16, 2002 (SEC file
    No. 333-98301)).
3
.15
Certificate of Incorporation of Tahoe Joe's,
    Inc.
3
.16
By-laws of Tahoe Joe's, Inc.
3
.17
Articles of Organization of Buffets Leasing
    Company, LLC
3
.18
By-laws of Buffets Leasing Company, LLC
3
.19
Articles of Organization of OCB Leasing Company,
    LLC
3
.20
By-laws of OCB Leasing Company, LLC
3
.21
Articles of Organization of HomeTown Leasing
    Company, LLC
3
.22
By-laws of HomeTown Leasing Company, LLC
3
.23
Articles of Organization of Tahoe Joe's
    Leasing Company, LLC
3
.24
By-laws of Tahoe Joe's Leasing Company, LLC
3
.25*
Form of Amended and Restated Certificate of
    Incorporation of Buffets Holdings, Inc. to be adopted
    concurrently with the closing of this offering.
3
.26*
Form of Amended and Restated By-laws of Buffets,
    Inc. to be adopted concurrently with the closing of this
    offering.
4
.1**
Indenture, dated as of June 28, 2002, among
    Buffets, Inc., the Guarantors and U.S. Bank National
    Association, as Trustee (incorporated by reference to
    Exhibit 4.1 to Buffets, Inc.'s Registration Statement
    on Form S-4, filed with the Commission on August 16,
    2002 (SEC file No. 333-98301)).
II-5
Table of Contents
Exhibit
Number
Description
4
.2**
Form of Exchange Note (incorporated by reference
    to Exhibit A to Exhibit 4.1 to Buffets, Inc.'s
    Registration Statement on Form S-4, filed with the
    Commission on August 16, 2002 (SEC file
    No. 333-98301)).
4
.3**
First Supplemental Indenture ("Subsidiary
    Guaranty"), dated as of September 26, 2003, among
    HomeTown Buffet Merger Company, Inc., Buffets, Inc. and
    U.S. Bank National Association, as trustee (incorporated by
    reference to Exhibit 4.1 to Buffets, Inc.'s Quarterly
    Report on Form 10-Q filed with the Commission on
    November 7, 2003 (SEC file No. 033-00171)).
4
.4**
Second Supplemental Indenture, dated as of
    November 5, 2003, between Tahoe Joe's, Inc. and
    U.S. Bank National Association, as trustee (incorporated by
    reference to Exhibit 4.2 to Buffets, Inc.'s Quarterly
    Report on Form 10-Q filed with the Commission on
    November 7, 2003 (SEC file No. 033-00171)).
4
.5**
Third Supplemental Indenture, dated as of
    December 10, 2003 among NSHE Bennington, LLC, Buffets, Inc.
    and U.S. Bank National Association, as trustee
    (incorporated by reference to Exhibit 4.1 to Buffets,
    Inc.'s Quarterly Report on Form 10-Q filed with the
    Commission on January 27, 2004 (SEC file
    No. 033-00171)).
4
.6**
Fourth Supplemental Indenture, dated as of
    February 20, 2004 among Buffets Holdings, Inc., Buffets,
    Inc., and U.S. Bank National Association, as trustee
    (incorporated by reference to Exhibit 4.1 to Buffets,
    Inc.'s Quarterly Report on Form 10-Q filed with the
    Commission on May 12, 2004 (SEC file No. 033-00171)).
4
.7**
Indenture, dated as of May 18, 2004, between
    Buffets Holdings, Inc. and U.S. Bank National Association,
    as Trustee (incorporated by reference to Exhibit 4.1 to
    Buffets Holdings, Inc.'s Registration Statement on
    Form S-4, filed with the Commission on June 25, 2004
    (SEC file No. 333-116897)).
4
.8**
Form of Exchange Security (incorporated by
    reference to Exhibit B to Exhibit 4.1 to Buffets
    Holdings, Inc.'s Registration Statement on Form S-4,
    filed with the Commission on June 25, 2004 (SEC file
    No. 333-116897)).
4
.9*
Form of Indenture among Buffets Holdings, Inc.,
    the subsidiary guarantors named therein and U.S. Bank
    National Association, as trustee, relating to the senior
    subordinated notes.
4
.10*
Form of Senior Subordinated Note (included in
    Exhibit 4.9).
4
.11*
Form of Investor Agreement by and between Buffets
    Holdings, Inc. and Caxton-Iseman Investments L.P. and certain
    other parties named therein.
4
.12*
Form of Stock Certificate for Buffets Holdings,
    Inc. Class A Common Stock.
4
.13*
Form of Stock Certificate for Buffets Holdings,
    Inc. Class B Common Stock.
4
.14*
Form of Global IDS Certificate.
5
.1*
Legality Opinion of Paul, Weiss, Rifkind,
    Wharton & Garrison LLP.
5
.2*
Legality Opinion of Faegre & Benson LLP.
8
.1*
Opinion of Paul, Weiss, Rifkind,
    Wharton & Garrison LLP as to certain tax matters.
10
.1**
Credit Agreement, dated as of June 28, 2002,
    among Buffets, Inc., Buffets Holdings, Inc., the lenders party
    thereto and Credit Suisse First Boston, as administrative agent
    and as collateral agent for the lenders (incorporated by
    reference to Exhibit 10.1 to Buffets, Inc.'s
    Registration Statement on Form S-4, filed with the
    Commission on August 16, 2002 (SEC file
    No. 333-98301)).
10
.2**
Amendment Agreement, dated as of
    February 20, 2004, to the Credit Agreement dated as of
    July 28, 2002, among Buffets, Inc., Buffets Holdings, Inc.,
    the Subsidiaries named therein, the Lenders named therein and
    Credit Suisse First Boston, as Administrative Agent and
    Collateral Agent (incorporated by reference to Exhibit 10.1
    to Buffets, Inc.'s Quarterly Report on Form 10-Q filed
    with the Commission on May 12, 2004 (SEC file
    No. 033-00171)).
II-6
Table of Contents
Exhibit
Number
Description
10
.3**
Management and Fee Agreement, dated
    October 2, 2000, by and among Buffets, Inc. and
    Caxton-Iseman Capital, Inc. (incorporated by reference to
    Exhibit 10.2 to Buffets, Inc.'s Registration Statement
    on Form S-4, filed with the Commission on August 16,
    2002 (SEC file No. 333-98301)).
10
.4**
Amended and Restated Management and Fee
    Agreement, dated as of February 20, 2004, by and between
    Buffets, Inc. and CxCIC LLC (the "Amended Management
    Agreement") (incorporated by reference to Exhibit 10.2
    to Buffets Inc.'s Quarterly Report on Form 10-Q filed
    with the Commission on May 12, 2004 (SEC file
    No. 033-00171)).
10
.5*
Form of Termination Agreement in respect of the
    Amended Management Agreement by and between Buffets, Inc. and
    CxCIC LLC.
10
.6**
Management and Fee Agreement, dated
    October 2, 2000, by and between Buffets, Inc. and Sentinel
    Capital Partners, L.L.C. (incorporated by reference to
    Exhibit 10.3 to Buffets, Inc.'s Registration Statement
    on Form S-4, filed with the Commission on August 16,
    2002 (SEC file No. 333-98301)).
10
.7**
Advisory Agreement, dated September 28,
    2000, by and among Buffets Holdings, Inc., Buffets, Inc. and Roe
    E. Hatlen (incorporated by reference to Exhibit 10.4 to
    Buffets, Inc.'s Registration Statement on Form S-4,
    filed with the Commission on August 16, 2002 (SEC file
    No. 333-98301)).
10
.8**
Advisory Agreement, dated September 28,
    2000, by and among Buffets Holdings, Inc., Buffets, Inc. and C.
    Dennis Scott (incorporated by reference to Exhibit 10.5 to
    Buffets, Inc.'s Registration Statement on Form S-4,
    filed with the Commission on August 16, 2002 (SEC file
    No. 333-98301)).
10
.9**
Guaranty, dated September 28, 2000, from
    Buffets, Inc. to U.S. Bank National Association in
    connection with a Promissory Note and Pledge Agreement by and
    among U.S. Bank National Association and David Goronkin
    (incorporated by reference to Exhibit 10.7 to Buffets,
    Inc.'s Registration Statement on Form S-4, filed with
    the Commission on August 16, 2002 (SEC file
    No. 333-98301)).
10
.10**
Guaranty, dated September 28, 2000, from
    Buffets, Inc. to U.S. Bank National Association in
    connection with a Promissory Note and Pledge Agreement by and
    among U.S. Bank National Association and R. Michael
    Andrews, Jr. (incorporated by reference to
    Exhibit 10.8 to Buffets, Inc.'s Registration Statement
    on Form S-4, filed with the Commission on August 16,
    2002 (SEC file No. 333-98301)).
10
.11**
Promissory Note and Pledge Agreement, dated
    February 20, 2002, among David Goronkin, Pamela Goronkin
    and Buffets, Inc. (incorporated by reference to
    Exhibit 10.9 to Buffets, Inc.'s Registration Statement
    on Form S-4, filed with the Commission on August 16,
    2002 (SEC file No. 333-98301)).
10
.12**
Severance Protection Agreements, dated
    September 29, 2000, between Buffets, Inc. and each of Kerry
    A. Kramp, David Goronkin, R. Michael Andrews, Jr., Glenn D.
    Drasher, K. Michael Shrader and H. Thomas Mitchell (incorporated
    by reference to Exhibit 10.10 to Buffets, Inc.'s
    Registration Statement on Form S-4, filed with the
    Commission on August 16, 2002 (SEC file
    No. 333-98301)).
10
.13**
Severance Protection Agreement, dated
    September 29, 2000, between Buffets, Inc. and Jean C.
    Rostollan (incorporated by reference to Exhibit 10.9.1 to
    Buffets, Inc.'s Annual Report on Form 10-K filed with
    the Commission on September 30, 2003 (SEC file
    No. 033-00171)).
12
.1
Statement of Computation of Ratios of Earnings to
    Fixed Charges.
21
List of Subsidiaries of Buffets Holdings, Inc.
23
.1
Consent of Deloitte & Touche LLP.
23
.2*
Consent of Paul, Weiss, Rifkind,
    Wharton & Garrison LLP (included in Exhibits 5.1
    and 8.1 to this Registration Statement).
II-7
Table of Contents
Exhibit
Number
Description
23
.3*
Consent of Faegre & Benson LLP (included
    in Exhibit 5.2 to this Registration Statement).
24
Powers of Attorney (included on signature pages
    of this Part II).
*
To be provided by amendment.
**
Previously provided or incorporated by reference.
(b)
Financial Statement Schedules
Item 17.
Undertakings
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 the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1)
For purposes of determining any liability under
    the Securities Act of 1933, the information omitted from the
    form of prospectus filed as part of this registration statement
    in reliance upon Rule 430A and contained in a form of
    prospectus filed by the registrant pursuant to
    Rule 424(b)(1) or (4) or 497(h) under the Securities
    Act shall be deemed to be part of this registration statement as
    of the time it was declared effective.
(2)
For the purpose of determining any liability
    under the Securities Act of 1933, each post-effective amendment
    that contains a form of prospectus shall be deemed to be a new
    registration statement relating to the securities offered
    therein, and the offering of such securities at that time shall
    be deemed to be the initial bona fide offering thereof.
II-8
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August 27, 2004.
BUFFETS HOLDINGS, INC.
/s/ R. MICHAEL ANDREWS, JR.
Name: R. Michael Andrews, Jr.
Title:
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry A. Kramp or R. Michael Andrews, Jr. or
either of them his true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i) act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii) act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii) act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933,
as amended, and (iv) take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ FREDERICK ISEMAN
Frederick Iseman
Chairman of the Board and Director
August 27, 2004
/s/ KERRY A. KRAMP
Kerry A. Kramp
President, Chief Executive Officer (principal
    executive officer) and Director
August 27, 2004
/s/ R. MICHAEL ANDREWS, JR.
R. Michael Andrews, Jr.
Executive Vice President and Chief Financial
    Officer (principal financial and accounting officer)
August 27, 2004
Roe H. Hatlen
Vice Chairman of the Board and Director
II-9
Table of Contents
Signature
Title
Date
/s/ STEVEN M. LEFKOWITZ
Steven M. Lefkowitz
Director
August 27, 2004
/s/ ROBERT A. FERRIS
Robert A. Ferris
Director
August 27, 2004
David S. Lobel
Director
/s/ ROBERT M. ROSENBERG
Robert M. Rosenberg
Director
August 27, 2004
II-10
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August 27, 2004.
BUFFETS, INC.
/s/ R. MICHAEL ANDREWS, JR.
Name: R. Michael Andrews, Jr.
Title:
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry A. Kramp or R. Michael Andrews, Jr. or
either of them his true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i) act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii) act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii) act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933,
as amended, and (iv) take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ FREDERICK ISEMAN
Frederick Iseman
Chairman of the Board and Director
August 27, 2004
/s/ KERRY A. KRAMP
Kerry A. Kramp
President, Chief Executive Officer (principal
    executive officer) and Director
August 27, 2004
/s/ R. MICHAEL ANDREWS, JR.
R. Michael Andrews, Jr.
Executive Vice President and Chief Financial
    Officer (principal financial and accounting officer)
August 27, 2004
Roe H. Hatlen
Vice Chairman of the Board and Director
II-11
Table of Contents
Signature
Title
Date
/s/ STEVEN M. LEFKOWITZ
Steven M. Lefkowitz
Director
August 27, 2004
/s/ ROBERT A. FERRIS
Robert A. Ferris
Director
August 27, 2004
David S. Lobel
Director
/s/ ROBERT M. ROSENBERG
Robert M. Rosenberg
Director
August 27, 2004
II-12
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August 27, 2004.
DISTINCTIVE DINING, INC.
/s/ R. MICHAEL ANDREWS, JR.
Name: R. Michael Andrews, Jr.
Title:
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry A. Kramp or R. Michael Andrews, Jr. or
either of them his true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i) act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii) act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii) act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933,
as amended, and (iv) take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ KERRY A. KRAMP
Kerry A. Kramp
President, Chief Executive Officer (principal
    executive officer) and Director
August 27, 2004
/s/ R. MICHAEL ANDREWS, JR.
R. Michael Andrews, Jr.
Executive Vice President, Chief Financial Officer
    (principal financial and accounting officer) and Director
August 27, 2004
II-13
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August 27, 2004.
HOMETOWN BUFFET, INC.
/s/ R. MICHAEL ANDREWS, JR.
Name: R. Michael Andrews, Jr.
Title:
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry A. Kramp or R. Michael
Andrews, Jr. or either of them his true and lawful agent,
proxy and attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i) act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii) act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii) act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933,
as amended, and (iv) take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ KERRY A. KRAMP
Kerry A. Kramp
President, Chief Executive Officer (principal
    executive officer) and Director
August 27, 2004
/s/ R. MICHAEL ANDREWS, JR.
R. Michael Andrews, Jr.
Executive Vice President, Chief Financial Officer
    (principal financial and accounting officer) and Director
August 27, 2004
II-14
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August 27, 2004.
OCB PURCHASING CO.
/s/ R. MICHAEL ANDREWS, JR.
Name:
R. Michael Andrews, Jr.
Title:
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry A. Kramp or R. Michael
Andrews, Jr. or either of them his true and lawful agent,
proxy and attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i) act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii) act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii) act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933,
as amended, and (iv) take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ KERRY A. KRAMP
Kerry A. Kramp
President, Chief Executive Officer (principal
    executive officer) and Director
August 27, 2004
/s/ R. MICHAEL ANDREWS, JR.
R. Michael Andrews, Jr.
Executive Vice President, Chief Financial Officer
    (principal financial and accounting officer) and Director
August 27, 2004
II-15
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August 27, 2004.
OCB RESTAURANT CO.
/s/ R. MICHAEL ANDREWS, JR.
Name:
R. Michael Andrews, Jr.
Title:
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry A. Kramp or R. Michael
Andrews, Jr. or either of them his true and lawful agent,
proxy and attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i) act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii) act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii) act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933,
as amended, and (iv) take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ KERRY A. KRAMP
Kerry A. Kramp
President, Chief Executive Officer (principal
    executive officer) and Director
August 27, 2004
/s/ R. MICHAEL ANDREWS, JR.
R. Michael Andrews, Jr.
Executive Vice President, Chief Financial Officer
    (principal financial and accounting officer) and Director
August 27, 2004
II-16
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August 27, 2004.
RESTAURANT INNOVATIONS, INC.
/s/ R. MICHAEL ANDREWS, JR.
Name:
R. Michael Andrews, Jr.
Title:
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry A. Kramp or R. Michael
Andrews, Jr. or either of them his true and lawful agent,
proxy and attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i) act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii) act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii) act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933,
as amended, and (iv) take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ KERRY A. KRAMP
Kerry A. Kramp
President, Chief Executive Officer (principal
    executive officer) and Director
August 27, 2004
/s/ R. MICHAEL ANDREWS, JR.
R. Michael Andrews, Jr.
Executive Vice President, Chief Financial Officer
    (principal financial and accounting officer) and Director
August 27, 2004
II-17
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August 27, 2004.
TAHOE JOE'S, INC.
/s/ R. MICHAEL ANDREWS, JR.
Name:
R. Michael Andrews, Jr.
Title:
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry A. Kramp or R. Michael
Andrews, Jr. or either of them his true and lawful agent,
proxy and attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i) act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii) act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii) act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933,
as amended, and (iv) take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ KERRY A. KRAMP
Kerry A. Kramp
President, Chief Executive Officer (principal
    executive officer) and Director
August 27, 2004
/s/ R. MICHAEL ANDREWS, JR.
R. Michael Andrews, Jr.
Executive Vice President, Chief Financial Officer
    (principal financial and accounting officer) and Director
August 27, 2004
II-18
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August 27, 2004.
BUFFETS LEASING COMPANY, LLC
By: Buffets, Inc.,
its sole member
/s/ R. MICHAEL ANDREWS, JR.
Name:
R. Michael Andrews, Jr.
Title:
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry A. Kramp or R. Michael Andrews, Jr. or
either of them his true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i) act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii) act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii) act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933,
as amended, and (iv) take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ FREDERICK ISEMAN
Frederick Iseman
Chairman of the Board and
Director of Buffets, Inc.
August 27, 2004
/s/ KERRY A. KRAMP
Kerry A. Kramp
President, Chief Executive Officer (principal
    executive officer) and Director of Buffets, Inc.
August 27, 2004
/s/ R. MICHAEL ANDREWS, JR.
R. Michael Andrews, Jr.
Executive Vice President and
Chief Financial Officer (principal financial and accounting
    officer)
of Buffets, Inc.
August 27, 2004
II-19
Table of Contents
Signature
Title
Date
Roe H. Hatlen
Vice Chairman of the Board and Director of
    Buffets, Inc.
/s/ STEVEN M. LEFKOWITZ
Steven M. Lefkowitz
Director of Buffets, Inc.
August 27, 2004
/s/ ROBERT A. FERRIS
Robert A. Ferris
Director of Buffets, Inc.
August 27, 2004
David S. Lobel
Director of Buffets, Inc.
/s/ ROBERT M. ROSENBERG
Robert M. Rosenberg
Director of Buffets, Inc.
August 27, 2004
II-20
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August 27, 2004.
OCB LEASING COMPANY, LLC
By: OCB Restaurant Co.,
its sole member
/s/ R. MICHAEL ANDREWS, JR.
Name:
R. Michael Andrews, Jr.
Title:
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry A. Kramp or R. Michael Andrews, Jr. or
either of them his true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i) act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii) act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii) act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933,
as amended, and (iv) take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ KERRY A. KRAMP
Kerry A. Kramp
President, Chief Executive Officer (principal
    executive officer) and Director of OCB Restaurant Co.
August 27, 2004
/s/ R. MICHAEL ANDREWS, JR.
R. Michael Andrews, Jr.
Executive Vice President,
Chief Financial Officer (principal financial and accounting
    officer) and
Director of OCB Restaurant Co.
August 27, 2004
II-21
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August 27, 2004.
HOMETOWN LEASING COMPANY, LLC
By:
HomeTown Buffet, Inc.,
its sole member
/s/ R. MICHAEL ANDREWS, JR.
Name:
R. Michael Andrews, Jr.
Title:
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry A. Kramp or R. Michael Andrews, Jr. or
either of them his true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i) act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii) act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii) act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933,
as amended, and (iv) take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ KERRY A. KRAMP
Kerry A. Kramp
President, Chief Executive Officer (principal
    executive officer) and Director of HomeTown Buffet, Inc.
August 27, 2004
/s/ R. MICHAEL ANDREWS, JR.
R. Michael Andrews, Jr.
Executive Vice President,
Chief Financial Officer (principal financial and accounting
    officer) and
Director of HomeTown Buffet, Inc.
August 27, 2004
II-22
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Eagan, State of
Minnesota, on August 27, 2004.
TAHOE JOE'S LEASING COMPANY, LLC
By:
Tahoe Joe's, Inc.,
its sole member
/s/ R. MICHAEL ANDREWS, JR.
Name:
R. Michael Andrews, Jr.
Title:
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each
individual whose signature appears below hereby constitutes and
appoints Kerry A. Kramp or R. Michael Andrews, Jr. or
either of them his true and lawful agent, proxy and
attorney-in-fact, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to (i) act on, sign and file with the
Securities and Exchange Commission any and all amendments
(including post-effective amendments) to this registration
statement together with all schedules and exhibits thereto and
any subsequent registration statement filed pursuant to
Rule 462(b) under the Securities Act of 1933, as amended,
together with all schedules and exhibits thereto, (ii) act
on, sign and file such certificates, instruments, agreements and
other documents as may be necessary or appropriate in connection
therewith, (iii) act on and file any supplement to any
prospectus included in this registration statement or any such
amendment or any subsequent registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933,
as amended, and (iv) take any and all actions which may be
necessary or appropriate in connection therewith, granting unto
such agent, proxy and attorney-in-fact full power and authority
to do and perform each and every act and thing necessary or
appropriate to be done, as fully for all intents and purposes as
he might or could do in person, hereby approving, ratifying and
confirming all that such agents, proxies and attorneys-in-fact
or any of their substitutes may lawfully do or cause to be done
by virtue thereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ KERRY A. KRAMP
Kerry A. Kramp
President, Chief Executive Officer (principal
    executive officer) and Director of Tahoe Joe's, Inc.
August 27, 2004
/s/ R. MICHAEL ANDREWS, JR.
R. Michael Andrews, Jr.
Executive Vice President,
Chief Financial Officer (principal financial and accounting
    officer) and
Director of Tahoe Joe's, Inc.
August 27, 2004
II-23
Table of Contents
EXHIBIT INDEX
Exhibit
Number
Description
1
.1*
Form of Underwriting Agreement.
3
.1**
Amended Certificate of Incorporation of Buffets
    Holdings, Inc. (incorporated by reference to Exhibit 3.1 to
    Buffets Holdings, Inc.'s Registration Statement on
    Form S-4, filed with the Commission on June 25, 2004
    (SEC file No. 333-116897)).
3
.2**
By-Laws of Buffets Holdings, Inc. (incorporated
    by reference to Exhibit 3.2 to Buffets Holdings,
    Inc.'s Registration Statement on Form S-4, filed with
    the Commission on June 25, 2004 (SEC file
    No. 333-116897)).
3
.3**
Articles of Incorporation of Buffets, Inc.
    (incorporated by reference to Exhibit 3.1 to Buffets,
    Inc.'s Registration Statement on Form S-4, filed with
    the Commission on August 16, 2002 (SEC file
    No. 333-98301)).
3
.4**
By-laws of Buffets, Inc. (incorporated by
    reference to Exhibit 3.2 to Buffets, Inc.'s
    Registration Statement on Form S-4, filed with the
    Commission on August 16, 2002 (SEC file
    No. 333-98301)).
3
.5**
Articles of Incorporation of Distinctive Dining,
    Inc. (incorporated by reference to Exhibit 3.3 to Buffets,
    Inc.'s Registration Statement on Form S-4, filed with
    the Commission on August 16, 2002 (SEC file
    No. 333-98301)).
3
.6**
By-laws of Distinctive Dining, Inc. (incorporated
    by reference to Exhibit 3.4 to Buffets, Inc.'s
    Registration Statement on Form S-4, filed with the
    Commission on August 16, 2002 (SEC file
    No. 333-98301)).
3
.7
Articles of Incorporation of HomeTown Buffet, Inc.
3
.8
By-laws of HomeTown Buffet, Inc.
3
.9**
Articles of Incorporation of OCB Purchasing Co.
    (incorporated by reference to Exhibit 3.7 to Buffets,
    Inc.'s Registration Statement on Form S-4, filed with
    the Commission on August 16, 2002 (SEC file
    No. 333-98301)).
3
.10**
By-laws of OCB Purchasing Co. (incorporated by
    reference to Exhibit 3.8 to Buffets, Inc.'s
    Registration Statement on Form S-4, filed with the
    Commission on August 16, 2002 (SEC file
    No. 333-98301)).
3
.11**
Articles of Incorporation of OCB Restaurant Co.
    (incorporated by reference to Exhibit 3.9 to Buffets,
    Inc.'s Registration Statement on Form S-4, filed with
    the Commission on August 16, 2002 (SEC file
    No. 333-98301)).
3
.12**
By-laws of OCB Restaurant Co. (incorporated by
    reference to Exhibit 3.10 to Buffets, Inc.'s
    Registration Statement on Form S-4, filed with the
    Commission on August 16, 2002 (SEC file
    No. 333-98301)).
3
.13**
Articles of Incorporation of Restaurant
    Innovations, Inc. (incorporated by reference to
    Exhibit 3.11 to Buffets, Inc.'s Registration Statement
    on Form S-4, filed with the Commission on August 16,
    2002 (SEC file No. 333-98301)).
3
.14**
By-laws of Restaurant Innovations, Inc.
    (incorporated by reference to Exhibit 3.12 to Buffets,
    Inc.'s Registration Statement on Form S-4, filed with
    the Commission on August 16, 2002 (SEC file
    No. 333-98301)).
3
.15
Certificate of Incorporation of Tahoe Joe's,
    Inc.
3
.16
By-laws of Tahoe Joe's, Inc.
3
.17
Articles of Organization of Buffets Leasing
    Company, LLC
3
.18
By-laws of Buffets Leasing Company, LLC
3
.19
Articles of Organization of OCB Leasing Company,
    LLC
3
.20
By-laws of OCB Leasing Company, LLC
3
.21
Articles of Organization of HomeTown Leasing
    Company, LLC
3
.22
By-laws of HomeTown Leasing Company, LLC
Table of Contents
Exhibit
Number
Description
3
.23
Articles of Organization of Tahoe Joe's
    Leasing Company, LLC
3
.24
By-laws of Tahoe Joe's Leasing Company, LLC
3
.25*
Form of Amended and Restated Certificate of
    Incorporation of Buffets Holdings, Inc. to be adopted
    concurrently with the closing of this offering.
3
.26*
Form of Amended and Restated By-laws of Buffets,
    Inc. to be adopted concurrently with the closing of this
    offering.
4
.1**
Indenture, dated as of June 28, 2002, among
    Buffets, Inc., the Guarantors and U.S. Bank National
    Association, as Trustee (incorporated by reference to
    Exhibit 4.1 to Buffets, Inc.'s Registration Statement
    on Form S-4, filed with the Commission on August 16,
    2002 (SEC file No. 333-98301)).
4
.2**
Form of Exchange Note (incorporated by reference
    to Exhibit A to Exhibit 4.1 to Buffets, Inc.'s
    Registration Statement on Form S-4, filed with the
    Commission on August 16, 2002 (SEC file
    No. 333-98301)).
4
.3**
First Supplemental Indenture ("Subsidiary
    Guaranty"), dated as of September 26, 2003, among
    HomeTown Buffet Merger Company, Inc., Buffets, Inc. and
    U.S. Bank National Association, as trustee (incorporated by
    reference to Exhibit 4.1 to Buffets, Inc.'s Quarterly
    Report on Form 10-Q filed with the Commission on
    November 7, 2003 (SEC file No. 033-00171)).
4
.4**
Second Supplemental Indenture, dated as of
    November 5, 2003, between Tahoe Joe's, Inc. and
    U.S. Bank National Association, as trustee (incorporated by
    reference to Exhibit 4.2 to Buffets, Inc.'s Quarterly
    Report on Form 10-Q filed with the Commission on
    November 7, 2003 (SEC file No. 033-00171)).
4
.5**
Third Supplemental Indenture, dated as of
    December 10, 2003 among NSHE Bennington, LLC, Buffets, Inc.
    and U.S. Bank National Association, as trustee
    (incorporated by reference to Exhibit 4.1 to Buffets,
    Inc.'s Quarterly Report on Form 10-Q filed with the
    Commission on January 27, 2004 (SEC file
    No. 033-00171)).
4
.6**
Fourth Supplemental Indenture, dated as of
    February 20, 2004 among Buffets Holdings, Inc., Buffets,
    Inc., and U.S. Bank National Association, as trustee
    (incorporated by reference to Exhibit 4.1 to Buffets,
    Inc.'s Quarterly Report on Form 10-Q filed with the
    Commission on May 12, 2004 (SEC file No. 033-00171)).
4
.7**
Indenture, dated as of May 18, 2004, between
    Buffets Holdings, Inc. and U.S. Bank National Association,
    as Trustee (incorporated by reference to Exhibit 4.1 to
    Buffets Holdings, Inc.'s Registration Statement on
    Form S-4, filed with the Commission on June 25, 2004
    (SEC file No. 333-116897)).
4
.8**
Form of Exchange Security (incorporated by
    reference to Exhibit B to Exhibit 4.1 to Buffets
    Holdings, Inc.'s Registration Statement on Form S-4,
    filed with the Commission on June 25, 2004 (SEC file
    No. 333-116897)).
4
.9*
Form of Indenture among Buffets Holdings, Inc.,
    the subsidiary guarantors named therein and U.S. Bank
    National Association, as trustee, relating to the senior
    subordinated notes.
4
.10*
Form of Senior Subordinated Note (included in
    Exhibit 4.9).
4
.11*
Form of Investor Agreement by and between Buffets
    Holdings, Inc. and Caxton-Iseman Investments L.P. and certain
    other parties named therein.
4
.12*
Form of Stock Certificate for Buffets Holdings,
    Inc. Class A Common Stock.
4
.13*
Form of Stock Certificate for Buffets Holdings,
    Inc. Class B Common Stock.
4
.14*
Form of Global IDS Certificate.
5
.1*
Legality Opinion of Paul, Weiss, Rifkind,
    Wharton & Garrison LLP.
5
.2*
Legality Opinion of Faegre & Benson LLP.
8
.1*
Opinion of Paul, Weiss, Rifkind,
    Wharton & Garrison LLP as to certain tax matters.
Table of Contents
Exhibit
Number
Description
10
.1**
Credit Agreement, dated as of June 28, 2002,
    among Buffets, Inc., Buffets Holdings, Inc., the lenders party
    thereto and Credit Suisse First Boston, as administrative agent
    and as collateral agent for the lenders (incorporated by
    reference to Exhibit 10.1 to Buffets, Inc.'s
    Registration Statement on Form S-4, filed with the
    Commission on August 16, 2002 (SEC file
    No. 333-98301)).
10
.2**
Amendment Agreement, dated as of
    February 20, 2004, to the Credit Agreement dated as of
    July 28, 2002, among Buffets, Inc., Buffets Holdings, Inc.,
    the Subsidiaries named therein, the Lenders named therein and
    Credit Suisse First Boston, as Administrative Agent and
    Collateral Agent (incorporated by reference to Exhibit 10.1
    to Buffets, Inc.'s Quarterly Report on Form 10-Q filed
    with the Commission on May 12, 2004 (SEC file
    No. 033-00171)).
10
.3**
Management and Fee Agreement, dated
    October 2, 2000, by and among Buffets, Inc. and
    Caxton-Iseman Capital, Inc. (incorporated by reference to
    Exhibit 10.2 to Buffets, Inc.'s Registration Statement
    on Form S-4, filed with the Commission on August 16,
    2002 (SEC file No. 333-98301)).
10
.4**
Amended and Restated Management and Fee
    Agreement, dated as of February 20, 2004, by and between
    Buffets, Inc. and CxCIC LLC (the "Amended Management
    Agreement") (incorporated by reference to Exhibit 10.2
    to Buffets Inc.'s Quarterly Report on Form 10-Q filed
    with the Commission on May 12, 2004 (SEC file
    No. 033-00171)).
10
.5*
Form of Termination Agreement in respect of the
    Amended Management Agreement by and between Buffets, Inc. and
    CxCIC LLC.
10
.6**
Management and Fee Agreement, dated
    October 2, 2000, by and between Buffets, Inc. and Sentinel
    Capital Partners, L.L.C. (incorporated by reference to
    Exhibit 10.3 to Buffets, Inc.'s Registration Statement
    on Form S-4, filed with the Commission on August 16,
    2002 (SEC file No. 333-98301)).
10
.7**
Advisory Agreement, dated September 28,
    2000, by and among Buffets Holdings, Inc., Buffets, Inc. and Roe
    E. Hatlen (incorporated by reference to Exhibit 10.4 to
    Buffets, Inc.'s Registration Statement on Form S-4,
    filed with the Commission on August 16, 2002 (SEC file
    No. 333-98301)).
10
.8**
Advisory Agreement, dated September 28,
    2000, by and among Buffets Holdings, Inc., Buffets, Inc. and C.
    Dennis Scott (incorporated by reference to Exhibit 10.5 to
    Buffets, Inc.'s Registration Statement on Form S-4,
    filed with the Commission on August 16, 2002 (SEC file
    No. 333-98301)).
10
.9**
Guaranty, dated September 28, 2000, from
    Buffets, Inc. to U.S. Bank National Association in
    connection with a Promissory Note and Pledge Agreement by and
    among U.S. Bank National Association and David Goronkin
    (incorporated by reference to Exhibit 10.7 to Buffets,
    Inc.'s Registration Statement on Form S-4, filed with
    the Commission on August 16, 2002 (SEC file
    No. 333-98301)).
10
.10**
Guaranty, dated September 28, 2000, from
    Buffets, Inc. to U.S. Bank National Association in
    connection with a Promissory Note and Pledge Agreement by and
    among U.S. Bank National Association and R. Michael
    Andrews, Jr. (incorporated by reference to
    Exhibit 10.8 to Buffets, Inc.'s Registration Statement
    on Form S-4, filed with the Commission on August 16,
    2002 (SEC file No. 333-98301)).
10
.11**
Promissory Note and Pledge Agreement, dated
    February 20, 2002, among David Goronkin, Pamela Goronkin
    and Buffets, Inc. (incorporated by reference to
    Exhibit 10.9 to Buffets, Inc.'s Registration Statement
    on Form S-4, filed with the Commission on August 16,
    2002 (SEC file No. 333-98301)).
10
.12**
Severance Protection Agreements, dated
    September 29, 2000, between Buffets, Inc. and each of
    Kerry A. Kramp, David Goronkin, R. Michael
    Andrews, Jr., Glenn D. Drasher, K. Michael
    Shrader and H. Thomas Mitchell (incorporated by reference
    to Exhibit 10.10 to Buffets, Inc.'s Registration
    Statement on Form S-4, filed with the Commission on
    August 16, 2002 (SEC file No. 333-98301)).
Table of Contents
Exhibit
Number
Description
10
.13**
Severance Protection Agreement, dated
    September 29, 2000, between Buffets, Inc. and Jean C.
    Rostollan (incorporated by reference to Exhibit 10.9.1 to
    Buffets, Inc.'s Annual Report on Form 10-K filed with
    the Commission on September 30, 2003 (SEC file
    No. 033-00171)).
12
.1
Statement of Computation of Ratios of Earnings to
    Fixed Charges.
21
List of Subsidiaries of Buffets Holdings, Inc.
23
.1
Consent of Deloitte & Touche LLP.
23
.2*
Consent of Paul, Weiss, Rifkind,
    Wharton & Garrison LLP (included in Exhibits 5.1
    and 8.1 to this Registration Statement).
23
.3*
Consent of Faegre & Benson LLP (included
    in Exhibit 5.2 to this Registration Statement).
24
Powers of Attorney (included on signature pages
    of this Part II).
*
To be provided by amendment.
**
Previously provided or incorporated by reference.