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<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>

<P align="center">
<B><FONT size="2">As filed with the Securities and Exchange
Commission on April&nbsp;13, 2004</FONT></B>

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

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

<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 UNDER 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">Alliance Laundry Holdings Inc.</FONT></B>

<DIV align="center">
<I><FONT size="2">(Exact name of registrant as specified in its
charter)</FONT></I>
</DIV>

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

<TR>
    <TD width="36%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="21%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B><FONT size="2">Delaware<BR>
     </FONT></B><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">
    <B><FONT size="2">5080<BR>
     </FONT></B><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">
    <B><FONT size="2">52-2055893<BR>
     </FONT></B><I><FONT size="2">(I.R.S. Employer<BR>
    Identification No.)</FONT></I></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">P.O. Box&nbsp;990</FONT></B>

<DIV align="center">
<B><FONT size="2">Ripon, Wisconsin 54971-0990</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(920)&nbsp;748-3121</FONT></B>
</DIV>

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

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

<P align="center">
<B><FONT size="2">Thomas F. L&#146;Esperance</FONT></B>

<DIV align="center">
<B><FONT size="2">Chairman and Chief Executive Officer</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Alliance Laundry Holdings Inc.</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">P.O. Box&nbsp;990</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Ripon, Wisconsin 54971-0990</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(920)&nbsp;748-3121</FONT></B>
</DIV>

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

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

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

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

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

<TR>
    <TD align="center" valign="top">
    <B><FONT size="2">Joshua N. Korff,&nbsp;Esq.<BR>
    Kirkland&nbsp;&#38; Ellis LLP<BR>
    Citigroup Center<BR>
    153 East 53rd&nbsp;Street<BR>
    New&nbsp;York, New&nbsp;York 10022<BR>
    (212) 446-4800</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">Richard B. Aftanas,&nbsp;Esq.<BR>
    David J. Goldschmidt, Esq.<BR>
    Skadden, Arps, Slate, Meagher&nbsp;&#38; Flom LLP<BR>
    Four Times Square<BR>
    New&nbsp;York, New York 10036-6522<BR>
    (212) 735-3000</FONT></B></TD>
</TR>

</TABLE>
</CENTER>

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

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

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

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

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

<P align="left">
<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 statement
number of the earlier effective registration statement for the
same offering. <FONT face="wingdings">&#111;</FONT>
</FONT>

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

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

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

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

<CENTER>
<TABLE width="100%" 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="22%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="29%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="center" valign="top">
    <B><FONT size="2">Title of Each Class of Securities<BR>
    <BR>
    to be Registered</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <B><FONT size="2">Proposed Maximum<BR>
    Aggregate Offering Price(1)</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <B><FONT size="2">Amount of Registration Fee(1)</FONT></B></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">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 valign="bottom" bgcolor="#EEEEEE">
    <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 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
    2014(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 valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Subsidiary Guarantee 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">$375,000,000.00
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$47,512.50
    </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>

<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">(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. The
    proposed maximum aggregate offering price includes
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    aggregate principal amount of senior subordinated notes of the
    same series that will be issued separately (not in the form of
    IDSs).
    </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;underlying
    shares of the Class&nbsp;A common stock and
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;aggregate
    principal amount of
    underlying &nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;senior subordinated
    notes of Alliance Laundry Holdings Inc. (&#147;Alliance
    Holdings&#148;).
    Includes &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 and 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)&nbsp;below.
    </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><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;shares
    of Alliance Holdings&#146; Class&nbsp;A common stock included in
    the IDSs described above.
    </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><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    aggregate principal amount of Alliance
    Holdings&#146; &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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    principal amount of senior subordinated notes of the same series
    that will be issued separately (not in the form of 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 guarantor listed in the Table of
    Additional Registrants on the next page will 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>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;<B>The Registrant hereby
amends this registration statement on such date or dates as may
be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that
this registration statement shall thereafter become effective in
accordance with Section&nbsp;8(a) of the Securities Act of 1933
or until the registration statement shall become effective on
such date as the Commission, acting pursuant to such
Section&nbsp;8(a), may determine.</B>
</FONT>

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

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

<P align="center">
<B>Table of Additional Registrant Guarantor</B>

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

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

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="23%"><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="17%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <BR>
    <B><FONT size="2">&nbsp;Exact Name of
    Registrant<BR>&nbsp;Guarantor as Specified in its
    Charter</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <B><FONT size="2">State or Other<BR>
    Jurisdiction of<BR>
    Incorporation<BR>
    or Organization</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <B><FONT size="2">I.R.S. Employer<BR>
    <BR>
    Identification Number</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <B><FONT size="2">Address Including Zip Code,<BR>
    Telephone Number Including<BR>
    Area Code of Registrant<BR>
    Guarantor&#146;s Principal Executive Offices</FONT></B></TD>
</TR>

<TR>
    <TD colspan="8" align="left"><HR size="1" noshade></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">Alliance Laundry Systems LLC
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">Delaware
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">39-1927923
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">P.O. Box&nbsp;990
    </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><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">Ripon, Wisconsin 54971-0990<BR>
    (920) 748-3121
    </FONT></TD>
</TR>

<TR>
    <TD colspan="8" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>
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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="center">
<FONT size="2"> <B><FONT color="#A32638">Subject to Completion,
Dated April&nbsp;13, 2004</FONT></B>
</FONT>
</DIV>

<P align="left">
<B><FONT size="2" color="#A32638">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></B>

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

<DIV align="center">
<B><FONT size="4">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;Senior
Subordinated Notes due 2014</FONT></B>
</DIV>

<P align="center">
<B><FONT size="5">Alliance Laundry Holdings Inc.</FONT></B>

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

<P align="left">
<FONT size="2"> We are
selling &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs
in the United States
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
2014. Each IDS initially represents:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></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;principal
    amount.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">We are also selling
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;aggregate
principal amount of our &nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;senior
subordinated notes separately (not in the form of IDSs). The
completion of the offering of separate senior subordinated notes
is a condition to our sale of IDSs. In addition, as part of our
reorganization described elsewhere in this prospectus, we are
issuing IDSs representing 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 to
our existing equity holders in exchange for the interests they
hold.
</FONT>

<P align="left">
<FONT size="2">This is the initial public offering of our IDSs
and 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 will be &nbsp;&nbsp;&nbsp;&nbsp;% of their stated
principal amount.
</FONT>

<P align="left">
<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, except as
described below, any holder of shares of our Class&nbsp;A common
stock and senior subordinated notes may, at any time, 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, upon the occurrence of any redemption of
the senior subordinated notes or upon the maturity of the senior
subordinated notes. 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>

<P align="left">
<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;,
2014, subject to our right to extend their maturity for two
additional successive five-year terms under specified
circumstances. 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; on page&nbsp;102.
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">
<B><FONT size="2">Upon a subsequent issuance by us of IDSs or
senior subordinated notes of the same series (not in the form of
IDSs), 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. For more information
regarding these automatic exchanges and the effect they may have
on your investment, see &#147;Description of Senior Subordinated
Notes&nbsp;&#151;&nbsp;Covenants Relating to
IDSs&nbsp;&#151;&nbsp;Procedures Relating to Subsequent
Issuance&#148; on page&nbsp;107 and &#147;Material United
States&nbsp;Federal Income Tax
Consequences&nbsp;&#151;&nbsp;United
States&nbsp;Holders&nbsp;&#151;&nbsp;Senior Subordinated
Notes&nbsp;&#151;&nbsp;Additional Issuances&#148; on
page&nbsp;144.</FONT></B>

<P align="left">
<FONT size="2">We will apply to list our IDSs on the American
Stock Exchange under the trading symbol
&#147;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.&#148;
</FONT>

<P align="left">
<B><FONT size="2" color="#A32638">Investing in our IDSs
(including the shares of our Class&nbsp;A common stock and
senior subordinated notes represented thereby) and in our senior
subordinated notes involves risks. See &#147;Risk Factors&#148;
beginning on page&nbsp;25.</FONT></B>

<P align="left">
<B><FONT size="2" color="#A32638">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></B>

<CENTER>
<TABLE width="90%" 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="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="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>
    <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></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 Alliance Laundry Holdings Inc.
    (before expenses)(3)
    </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>

<DIV align="left">
<HR size="1" width="33%" align="left" noshade>
</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><FONT size="2"> (1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The price per IDS comprises of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;allocated to
    each share of 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>
    <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;principal
    amount of senior subordinated notes sold separately (not in the
    form of IDSs).
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</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 equity investors.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Some of our existing equity investors have
granted the underwriters an option to purchase up
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional
IDSs to cover over-allotments.
</FONT>

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

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

<DIV>&nbsp;</DIV>

<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><I><FONT size="5"> </FONT></I><FONT size="5">CIBC World Markets</FONT></B></TD>
    <TD align="right"><B><FONT size="5">Lehman Brothers</FONT></B></TD>
</TR>

</TABLE>

<P align="center">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004
</FONT>

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

<!-- link1 "NOTICE TO PURCHASERS OF SEPARATE SENIOR SUBORDINATED NOTES AND ACKNOWLEDGEMENT OF PURCHASER INTENT" -->

<P align="center">
<B><FONT size="2">NOTICE TO PURCHASERS OF SEPARATE SENIOR
SUBORDINATED NOTES AND</FONT></B>

<DIV align="center">
<B><FONT size="2">ACKNOWLEDGEMENT OF PURCHASER INTENT</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">None of the separate senior subordinated notes
purchased in connection with this offering may be purchased,
directly or indirectly, by persons who are also
(1)&nbsp;purchasing IDSs in this offering or (2)&nbsp;otherwise
receiving IDSs or shares of Class&nbsp;B common stock or shares
of preferred stock in connection with the reorganization
described elsewhere in this prospectus. <B>Accordingly, each
investor purchasing the separate senior subordinated notes in
this offering <I>must not </I>purchase IDSs in this offering and
<I>must not </I>concurrently enter into any plan or
pre-arrangement whereby it would acquire any IDSs or our Company
equity (as defined below) or transfer the separate senior
subordinated notes to any holder of IDSs or our Company equity.
In addition, each person receiving IDSs or shares of
Class&nbsp;B common stock or shares of preferred stock in
connection with the reorganization <I>must not </I>purchase
separate senior subordinated notes in this offering.</B>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Each investor in this offering assumes <I>sole
</I>responsibility for ensuring that it complies with the
restrictions above. Neither we nor the underwriters will assume
any responsibility to ensure that any investor complies with
these restrictions. </FONT></B><FONT size="2">If you are unsure
whether the restrictions above would prohibit you from
purchasing the separate senior subordinated notes or our IDSs in
this offering, you should consult your own legal advisor with
regard to the application of these restrictions to your
individual circumstances.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Furthermore, each person purchasing separate
senior subordinated notes in this offering, by acquiring the
separate senior subordinated notes, thereby represents to us and
the underwriters that:
</FONT>
<P>

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

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(a)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">neither such purchaser nor any entity, investment
    fund or account over which such purchaser exercises investment
    control is purchasing IDSs in this offering;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(b)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">neither such purchaser nor any entity, investment
    fund or account over which such purchaser exercises investment
    control owns, or has the contractual right to acquire, our
    equity securities (including securities which are convertible,
    exchangeable or exercisable into or for our equity or our
    equity-linked securities, which we refer to collectively as our
    Company equity); and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(c)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">such purchaser is not party to any plan or
    pre-arrangement whereby it would (1)&nbsp;acquire any IDSs or
    our Company equity or (2)&nbsp;transfer the separate senior
    subordinated notes to any holder of IDSs or our Company equity.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For purposes of these representations, the
&#147;purchaser&#148; shall be deemed to be (1) the person who
initially purchases the separate senior subordinated notes from
the underwriters in this offering and (2) the person(s), if any,
pursuant to whose instructions such purchase was made.
</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>Table of Contents</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='#101'>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='#102'>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">25</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'>Cautionary Statement
    Regarding 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='#104'>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='#105'>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='#106'>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">44</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'>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">45</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'>Selected Historical
    Financial and Operating 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">46</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'>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">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='#110'>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">64</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'>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">81</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'>Principal and Selling
    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">85</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'>Related Party
    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">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">&nbsp;<A HREF='#126'>Description of Certain
    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">89</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'>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">92</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'>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">97</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'>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">101</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'>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">139</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'>Material United States
    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">140</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'>Certain ERISA
    Considerations</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">150</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'>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">153</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'>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">157</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'>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">157</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'>Where You Can Find
    Additional 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">157</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'>Index to Financial
    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">F-1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w82.txt">2003 EXECUTIVE UNIT AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w83.txt">2003 EXECUTIVE UNIT AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w84.txt">2003 EXECUTIVE UNIT AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w85.txt">2003 EXECUTIVE UNIT AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w86.txt">2003 EXECUTIVE UNIT AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w87.txt">2003 EXECUTIVE UNIT AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w88.txt">2003 EXECUTIVE UNIT AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w89.txt">2003 EXECUTIVE UNIT AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w90.txt">2003 EXECUTIVE UNIT AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w91.txt">2003 EXECUTIVE UNIT AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w92.txt">2003 EXECUTIVE UNIT AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w93.txt">2003 EXECUTIVE UNIT AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w94.txt">2003 EXECUTIVE UNIT AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w95.txt">2003 EXECUTIVE UNIT AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w96.txt">2003 EXECUTIVE UNIT AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w97.txt">EXECUTIVE UNIT REPURCHASE AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w98.txt">EXECUTIVE UNIT REPURCHASE AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w99.txt">EXECUTIVE UNIT REPURCHASE AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w100.txt">EXECUTIVE UNIT REPURCHASE AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w101.txt">EXECUTIVE UNIT REPURCHASE AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w102.txt">EXECUTIVE UNIT REPURCHASE AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w103.txt">EXECUTIVE UNIT REPURCHASE AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w104.txt">EXECUTIVE UNIT REPURCHASE AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w105.txt">EXECUTIVE UNIT REPURCHASE AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w106.txt">EXECUTIVE UNIT REPURCHASE AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w107.txt">EXECUTIVE UNIT REPURCHASE AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv10w110.txt">AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv21w2.txt">SUBSIDIARIES OF THE REGISTRANT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y95720exv23w1.txt">CONSENT OF PRICEWATERHOUSE COOPERS</A></FONT></TD></TR>
</TABLE>
</CENTER>

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

<P align="center">
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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='101'></A>
</DIV>

<!-- link1 "Summary" -->

<P align="center">
<B>Summary</B>

<P align="left">
<I><FONT size="2">The following is a summary of the principal
features of this offering of IDSs and senior subordinated notes
and should be read together with the more detailed information
and financial data and statements contained elsewhere in this
prospectus.</FONT></I>

<P align="left">
<I><FONT size="2">Throughout this prospectus, we refer to
Alliance Laundry Holdings Inc., a Delaware corporation, as
&#147;Alliance Holdings,&#148; and, together with its
consolidated operations, as &#147;the Company,&#148;
&#147;Alliance,&#148; &#147;we,&#148; &#147;our&#148; and
&#147;us,&#148; unless otherwise indicated. Any reference to
&#147;Alliance Laundry&#148; refers to our wholly-owned
subsidiary, Alliance Laundry Systems LLC, a Delaware limited
liability company, and its consolidated operations, unless
otherwise indicated. Alliance Holdings is a holding company and
has no direct operations. Alliance Holdings&#146; principal
assets are the direct and indirect equity interests of Alliance
Laundry.</FONT></I>

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

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

<P align="left">
<FONT size="2">We are the leading designer, manufacturer and
marketer in North America of commercial laundry equipment used
in laundromats, multi-housing laundries and on-premise
laundries. Under the well-known brand names of Speed
Queen&#174;, UniMac&#174; and Huebsch&#174;, we produce a full
line of commercial washing machines and dryers with load
capacities from 16 to 250&nbsp;pounds. We believe we have been
the market share leader in the North American stand alone
commercial laundry equipment industry for more than ten years.
With a market share of approximately 39% in 2003, we believe our
sales are more than twice as large as those of the next largest
competitor.
</FONT>

<P align="left">
<FONT size="2">We serve three distinct end-customer groups:
(i)&nbsp;laundromats; (ii)&nbsp;multi-housing laundries,
consisting primarily of common laundry facilities in apartment
buildings, universities and military installations; and
(iii)&nbsp;on-premise laundries, consisting primarily of
in-house laundry facilities in hotels, hospitals, nursing homes
and prisons. The primary means of serving these end-customers is
through distributors and route operators. We believe that we
have the most extensive distribution network in North America
which gives us a significant competitive advantage. We reach
laundromat and on-premise laundry end-customers through a
network of over 200&nbsp;North American distributors and over
100 international distributors, serving over 90&nbsp;different
countries. Our distributors purchase equipment from us, then
re-sell and install it for laundromat and on-premise
end-customers. We serve multi-housing end-customers through a
network of over 80&nbsp;route operators. Route operators
purchase equipment from us, and then obtain leases from
multi-housing property managers to place it into common laundry
rooms. We estimate that our distributors and route operators
have either the number one or number two market position in over
80% of North American markets. We believe that the superior
quality and loyalty of our distribution network has been a
significant factor in achieving the number one market share in
North America in each of our three end-customer groups.
</FONT>

<P align="left">
<FONT size="2">We estimate that the North American stand alone
commercial laundry equipment industry generated approximately
$472.0&nbsp;million in revenue in 2003. The industry&#146;s
revenues are primarily driven by population growth and the
replacement cycle of laundry equipment. North American consumers
view clean clothes as a necessity, with economic conditions
having limited effect on the frequency of use, and therefore the
useful life, of laundry equipment. As a result, the
industry&#146;s revenues have been relatively stable over time
and through economic downturns.
</FONT>

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

<P align="left">
<FONT size="2">We believe that we have the following competitive
strengths:
</FONT>
<P>

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

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    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Market Leader with Significant Installed Base.
    </FONT></I><FONT size="2">We are the market share leader in the
    overall North&nbsp;American stand alone commercial laundry
    equipment industry, and we believe that our sales are more than
    twice as large as those of the next largest competitor. We have
    grown overall market share to approximately 39% in 2003 from 21%
    in 1993. In addition to leading the overall market, we are the
    leader in sales to each of our three primary end-customer groups.
    </FONT></TD>
</TR>

</TABLE>

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

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

<P align="center">
<B><FONT size="2">Leading and Growing Market Share</FONT></B>

<DIV align="center">
<B><FONT size="2">North American Stand Alone Commercial Laundry
Equipment(1)</FONT></B>
</DIV>

<P align="center">
<IMG src="y95720y9572000.gif" alt="LOGO">

<P align="left">
<HR size="1" width="33%" align="left" noshade>
<P>

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

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Management estimates.
    </FONT></TD>
</TR>

</TABLE>
<P>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
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<TR valign="top">
    <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">As a result of our market leadership for more
    than ten years, we believe that we have the largest installed
    base of equipment in North America comprised of over two million
    machines. A significant majority of our revenue is attributable
    to replacement sales driven by our large installed base combined
    with an average ten year estimated life per machine.
    </FONT></TD>
</TR>

</TABLE>
<P>

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    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Stable Revenues and Increasing Cash Flow.
    </FONT></I><FONT size="2">We have experienced stable revenues
    even during economic slowdowns, driven by the underlying
    stability of the industry and the recurring sales of replacement
    equipment and service parts which together comprise the majority
    of our revenues. In addition, since 1995, we have progressively
    reduced our manufacturing costs through improvements in raw
    material usage and labor efficiency, as well as through plant
    consolidation, resulting in improving cash from operations as
    demonstrated by our historical financial performance. Our net
    cash from operating activities was approximately
    $11.7&nbsp;million, $15.3&nbsp;million, $21.3&nbsp;million,
    $22.8&nbsp;million and $30.4&nbsp;million for 1999, 2000, 2001,
    2002 and 2003, respectively.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Limited Working Capital and Consistent Capital
    Expenditure Requirements. </FONT></I><FONT size="2">We
    aggressively manage our working capital requirements, having
    reduced net working capital as a percent of revenue from 8.2% in
    2000 to 6.7% in 2003. From December of 2000 to December of 2003,
    inventory has been reduced from $37.5&nbsp;million to
    $26.2&nbsp;million, an improvement of 30.0%. We also have
    consistent capital expenditure requirements, with maintenance
    capital expenditures of $3.6&nbsp;million, $2.6&nbsp;million,
    $3.6&nbsp;million, $2.7&nbsp;million and $3.6&nbsp;million, for
    1999, 2000, 2001, 2002 and 2003, respectively. We believe that
    we currently have excess manufacturing capacity and can increase
    production without incurring significant additional capital
    expenditures.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Extensive and Loyal Distribution Network.
    </FONT></I><FONT size="2">We believe we have developed the most
    extensive distribution network in the North American industry,
    with over 200&nbsp;distributors and 80&nbsp;route operators. We
    estimate that our laundromat and on-premise laundry distributors
    and multi-housing route operators have either the number one or
    number two market position in over 80% of North American
    markets. These leading
    </FONT></TD>
</TR>

</TABLE>

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

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    <TD width="2%"></TD>
    <TD width="98%"></TD>
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    <TD></TD>
    <TD align="left">
    <FONT size="2">distributors and route operators are attracted by
    our industry-leading brand equity, broad product array,
    significant installed base and our comprehensive value-added
    support, which includes training, extensive electronic support
    of installation and service and joint promotion efforts. These
    factors lead to high costs for distributors and route operators
    to switch manufacturers, especially when combined with their
    substantial investments in service parts inventories and in
    training their sales and installation personnel with respect to
    our highly engineered products. Our customers place great value
    on the proven reliability of our products, backed by years of
    demonstrated experience in the field, as this significantly
    impacts their long term repair and maintenance expenses. We have
    not experienced any significant turnover of our distributors and
    route operators, of which a significant number have been
    customers for over ten&nbsp;years.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">High Barriers to Entry.
    </FONT></I><FONT size="2">We believe that significant time and
    substantial capital investment would be required for a new
    entrant to compete effectively in this market. Many years of
    engineering and field testing, plus substantial investment in
    plant and equipment, are required before the process of
    attempting to earn market share can take place. In addition, a
    new entrant would have to break the strong, established
    relationships that existing manufacturers have developed with
    distributors. There are significant costs for distributors and
    route operators to break these long-term relationships,
    including extensive retraining of distributors&#146; and route
    operators&#146; sales, installation and service personnel and
    duplication of service parts inventories which must be stocked
    for&nbsp;years.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Comprehensive and Innovative Product Offering.
    </FONT></I><FONT size="2">We believe our product lines lead the
    industry in reliability, breadth of offerings, functionality and
    advanced features. In addition, we believe we are the only
    manufacturer in North America to produce a full product line
    (including topload washers, dryers, frontload washers,
    washer-extractors and tumbler dryers for all commercial customer
    groups), thereby providing customers with a single source
    solution for all their stand alone commercial laundry equipment
    needs. Our development team of more than 80&nbsp;engineers and
    technical personnel, along with our marketing and sales
    personnel, work together with our major customers to redesign
    and enhance our products to better meet customer needs. For
    example, new products such as our NetMaster<SUP>TM</SUP> system
    emphasize efficiency and feature new electronic controls,
    facilitating ease of use as well as improving performance and
    reliability.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Leading North American Brands.
    </FONT></I><FONT size="2">We market and sell our products under
    the widely recognized brand names Speed Queen&#174;,
    UniMac&#174;, Huebsch&#174; and Ajax&#174;. We believe that we
    have industry-leading brand equity and brand recognition, based
    upon historical customer survey results and the substantial
    market share growth achieved since&nbsp;1993.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Strong and Experienced Management Team.
    </FONT></I><FONT size="2">Led by chief executive officer Thomas
    L&#146;Esperance, we have assembled a strong and experienced
    management team. Our seven executive officers have an average of
    over 16&nbsp;years of experience in the commercial laundry
    equipment and appliance industries. This management team has
    executed numerous strategic initiatives, including:
    (i)&nbsp;developing strategic alliances with key customers;
    (ii)&nbsp;acquiring and successfully integrating the commercial
    washer-extractor business of UniMac&#174; and the press and
    finishing equipment business of Ajax&#174;;
    (iii)&nbsp;implementing manufacturing cost reduction and quality
    improvement programs; and (iv)&nbsp;ongoing refinements to our
    product offerings. Management&#146;s economic interests will
    align with those of securityholders through management&#146;s
    participation in our long-term incentive plan.
    </FONT></TD>
</TR>

</TABLE>

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

<P align="left">
<FONT size="2">We strive to continue our strong financial
performance and selectively pursue growth opportunities by
offering to our customers a full line of the most reliable and
functional stand alone commercial laundry equipment, together
with industry-leading, comprehensive value-added services. The
key elements of our strategy are as follows:
</FONT>
<P>

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<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Develop and Strengthen Relationships with Key
    Customers. </FONT></I><FONT size="2">We have developed and will
    continue to pursue long-term relationships and supply agreements
    with key customers. The
    </FONT></TD>
</TR>

</TABLE>

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

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    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD align="left">
    <FONT size="2">relationships that we establish with our
    customers are comprehensive and include training, extensive
    technical support and promotion activities. In addition, we
    model our product development efforts to meet evolving customer
    preferences by working with key customers to develop new
    products, features and value-added services.
    </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><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">We have not experienced any significant customer
    turnover. Our top ten&nbsp;customers, other than a significant
    new account that was added in 2003, have been our customers for
    at least ten&nbsp;years. For example, we currently sell our
    products to Coinmach Corporation, our largest customer, under a
    multi-year supply agreement. Coinmach, which is the largest
    operator of multi-housing laundries in North America, has been a
    significant customer of ours for over two&nbsp;decades.
    </FONT></TD>
</TR>

</TABLE>
<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"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Continue to Improve Manufacturing Operations.
    </FONT></I><FONT size="2">We seek to continuously enhance our
    product quality and reduce costs through ongoing refinements to
    our manufacturing processes. We achieve such improvements, and
    intend to continue doing so, through collaboration among key
    customers, suppliers and our engineering and marketing
    personnel. Since 1996, we have progressively reduced our
    manufacturing costs through improvements in raw material usage
    and labor efficiency, as well as plant consolidation. Since
    2000, we have been implementing a demand flow production system
    on our higher volume product lines. These process changes have
    resulted in significant improvements in assembly efficiency,
    inventory levels, customer order lead times and production
    quality. For example, labor productivity improved by 4.5% from
    2002 to 2003, and over the same period, we improved our first
    year warranty incident rate by 20% from an already industry
    leading level of 0.2% of&nbsp;sales.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Expand into the U.S.&nbsp;Home Laundry Market.
    </FONT></I><FONT size="2">We are planning to re-enter the
    U.S.&nbsp;home laundry market in October 2004, after the
    expiration of a non-compete agreement. This non-compete
    agreement was a result of the divestiture of a sister division
    in 1997. Our strategy in the home laundry market will be
    dual-pronged. First, we plan to re-enter the mid to high-end
    home laundry market with existing products that we currently
    sell internationally and into other markets. These existing
    products are designed to have useful lives approximately twice
    that of typical home laundry equipment. Before exiting the home
    laundry market pursuant to the non-compete agreement, we
    produced annual home laundry units of about 500,000 for a 5%
    market share of annual home laundry units, which generated
    approximately $150&nbsp;million in annual sales. We plan to
    leverage the strong brand equity of our Speed Queen&#174; name
    in order to recapture our historic market share.
    </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><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Second, we have signed a letter-of-intent with an
    ultra-premium home appliance company to produce
    professional-quality home laundry equipment to be sold under
    their brand name. This equipment is based completely on our
    current commercial equipment technology and production methods.
    These plans to enter both the mid to high-end and the
    ultra-premium home laundry markets should allow us to expand our
    sales and continue to diversify our customer base. These
    products will be produced in our current facilities with minimal
    incremental capital expenditures.
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">New Credit Facility</FONT></B>

<P align="left">
<FONT size="2">Concurrently with the closing of this offering,
we will enter into a
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;new
senior secured credit facility with a syndicate of financial
institutions, including affiliates of CIBC World Markets Corp.
and Lehman Brothers Inc. Throughout this prospectus, we refer to
this credit facility as the &#147;new credit facility.&#148; We
expect that the new credit facility will be comprised of a
senior secured revolving credit facility in a total principal
amount of up to
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
which we refer to as the &#147;new revolver,&#148; and a senior
secured term loan facility in an aggregate principal amount of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
which we refer to as the &#147;new term loan.&#148; We expect
that the new revolving credit facility and the new term loan
will each have
a &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-year
maturity. The closing of this offering is conditioned upon the
closing of the new credit facility. See &#147;Description of
Certain Indebtedness&nbsp;&#151; New Credit Facility.&#148;
</FONT>

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

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<P align="center">
<B><FONT size="2">Tender Offer and Consent
Solicitation</FONT></B>

<P align="left">
<FONT size="2">Prior to this offering, we will commence a tender
offer and consent solicitation with respect to all of our
outstanding $110.0&nbsp;million aggregate principal amount of
9&nbsp;5/8%&nbsp;senior subordinated notes due 2008, for an
expected aggregate consideration of
$<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>&nbsp;million.
The closing of this offering will be conditioned upon the
receipt of the tender and consent of at least a majority in
aggregate principal amount of our existing senior subordinated
notes outstanding, and the consummation of the tender offer and
consent solicitation is conditioned upon the closing of this
offering. Holders of our existing senior subordinated notes that
provide consents will be obligated to tender their notes in the
offer, and holders of our existing senior subordinated notes
that tender their notes are obligated to provide consents. Upon
obtaining the minimum required consents in the tender offer and
consent solicitation, we and the trustee of the existing senior
subordinated notes will enter into a supplemental indenture that
will delete all of the material restrictive covenants contained
in the indenture governing the existing senior subordinated
notes. The tender offer and consent solicitation will be
consummated on the terms described above. We will use a portion
of the net proceeds from this offering and borrowings under the
new credit facility to pay for our existing senior subordinated
notes accepted for purchase in the tender offer and consent
solicitation.
</FONT>

<P align="center">
<B><FONT size="2">Use of Proceeds</FONT></B>

<P align="left">
<FONT size="2">We estimate that we will receive net proceeds
from this offering of approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
after deducting underwriting discounts and commissions and other
estimated offering expenses payable by us. We will use these net
proceeds, together with
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of borrowings under our new credit facility and cash on hand, to
repay our existing indebtedness, to repurchase a portion of our
existing equity investors&#146; interest in our predecessor, and
for working capital and general corporate purposes.
</FONT>

<P align="left">
<FONT size="2">We will not receive any of the proceeds from the
underwriters&#146; exercise of their over-<BR>
 allotment option.
</FONT>

<P align="center">
<B><FONT size="2">Reorganization of Alliance Laundry Holdings
LLC</FONT></B>

<P align="left">
<FONT size="2">Bain Capital Fund&nbsp;V, L.P. and its
co-investors, Bruckmann, Rosser, Sherrill&nbsp;&#38; Co., L.P.
and its co-investors, and certain other persons listed in
&#147;Principal Stockholders&#148; are the owners of our
predecessor&#146;s equity interests prior to this offering. In
this prospectus, we refer to these owners as the &#147;existing
equity investors.&#148; Our existing equity investors will
contribute all of these equity interests to us in exchange
for &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs, &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;shares
of preferred stock and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in
cash in the aggregate. We refer to this contribution as the
reorganization. Following our reorganization our management will
collectively hold an aggregate
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs, &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;shares
of preferred stock.
</FONT>

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

<P align="left">
<FONT size="2">Our principal executive office is located at
Shepard Street, Ripon, Wisconsin 54971-0990, and our telephone
number is (920)&nbsp;748-3121. Our internet address is
www.comlaundry.com. www.comlaundry.com is a textual reference
only, meaning that the information contained on the website is
not part of this prospectus and is not incorporated in this
prospectus by reference.
</FONT>

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

<P align="left">
<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, 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;aggregate
principal amount of
our &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;senior subordinated
notes separately (not in the form of IDSs). Our sale of IDSs
will be conditioned upon the consummation of our separate
offering of senior subordinated notes. In addition, no
purchaser, including our existing equity investors, or any
affiliate of such purchaser, is entitled to purchase both IDSs
and separate senior subordinated notes in the offering. As part
of our reorganization described elsewhere in this prospectus, we
are also issuing IDSs to our existing equity investors in
exchange for the interests they hold in our predecessor.
</FONT>

<P align="left">
<B><FONT size="2">Summary of the IDSs</FONT></B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;What are
IDSs?</FONT></I>

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

<P align="left">
<FONT size="2">Each IDS initially represents:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></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;principal
    amount.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<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,
recombination 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 recombination 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 recombined 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>
    <I><FONT size="2">What payments can&nbsp;I expect to receive as
    a holder of IDSs?</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Assuming we make our scheduled interest payments
on the senior subordinated notes and pay dividends in the amount
contemplated by our anticipated dividend policy, you will
receive in the aggregate approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
year in interest on the senior subordinated notes and dividends
on the Class&nbsp;A common stock represented by each IDS. We
expect to make interest and dividend payments
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
each year to holders of record on
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;day
of each such month, or, if such day is not a business day, the
last business day immediately preceding such twentieth day, of
the last month of such quarter.
</FONT>

<P align="left">
<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
specified in the indenture governing the senior subordinated
notes to defer interest payments on our senior subordinated
notes. For a detailed description of these circumstances, see
&#147;Description of Senior Subordinated Notes&#151;Interest
Deferral.&#148;
</FONT>

<P align="left">
<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
new credit facility, the indenture governing our senior
subordinated notes and any of our other then outstanding
indebtedness. Specifically, the indenture governing our senior
subordinated notes restricts our ability to declare and pay
dividends on our common stock as described under &#147;Dividend
Policy.&#148; In addition, the new credit facility restricts our
ability to declare and pay dividends on our common stock as
described under &#147;Dividend Policy&#148; and
&#147;Description of Certain Indebtedness&#151;New
</FONT>

<P align="center"><FONT size="2">6
</FONT>
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<DIV align="left">
<FONT size="2">Credit Facility.&#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 cannot assure you that we will pay dividends at this
level in the future or at all.
</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>
    <I><FONT size="2">Will my rights as a holder of IDSs be any
    different than the rights of a beneficial owner of separately
    held Class&nbsp;A common stock and senior subordinated
    notes?</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<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&nbsp;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>
    <I><FONT size="2">Will the IDSs be listed on an
    exchange?</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">We will apply to list the IDSs for trading on the
American Stock Exchange 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>
    <I><FONT size="2">Will the terms of the senior subordinated
    notes represented by IDSs be the same as the notes sold
    separately (not in the form of IDSs)?</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Yes. The senior subordinated notes sold
separately (not in the form of 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>
    <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></TD>
</TR>

</TABLE>

<P align="left">
<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 reasonable efforts to
list our Class&nbsp;A common stock for separate trading on the
American Stock Exchange 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 American Stock
Exchange 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>
    <I><FONT size="2">In what form will IDSs and the shares of our
    Class&nbsp;A common stock and senior subordinated notes
    represented by the IDSs be issued?</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">The IDSs and the shares of our Class&nbsp;A
common stock and senior subordinated notes represented by the
IDSs will be issued in book-entry form only. This means that you
will not be a registered holder of IDSs or the securities
represented by the IDSs and you will not receive a certificate
for your IDSs or the securities represented by your IDSs. 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.
</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>
    <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></TD>
</TR>

</TABLE>

<P align="left">
<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
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 as a result of the continuance of a
payment default on the senior subordinated notes for
90&nbsp;days, or the redemption, acceleration or maturity of any
senior subordinated notes. Separation and recombination of IDSs
may involve transaction fees charged by your broker and/or
financial intermediary. See &#147;Description of
IDSs&#151;Book-Entry Settlement and Clearance&#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>
    <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></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Yes. All IDSs will automatically separate upon
the continuance of a payment default on the senior subordinated
notes for 90&nbsp;days, upon the occurrence of any redemption,
whether in whole or in part, of the senior subordinated notes or
upon the maturity of the senior subordinated notes. Following
any such automatic separation, shares of Class&nbsp;A common
stock and senior subordinated notes may no longer be combined to
form&nbsp;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>
    <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></TD>
</TR>

</TABLE>

<P align="left">
<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 and preferred stock, see
&#147;Related Party Transactions&#151;Equity
Investors&#151;Investor Rights Agreement.&#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. If such senior subordinated notes are
issued with OID, all IDSs of the same series (including the IDSs
being offered hereby) and all senior subordinated notes, whether
held directly or in the form of IDSs, will be automatically
exchanged for senior subordinated notes or IDSs, respectively,
with new CUSIP numbers. As a result of such exchanges, the OID
associated with the sale of the new senior subordinated notes
effectively will be spread among all holders of senior
subordinated notes on a <I>pro rata </I>basis, which may
adversely affect your tax treatment.
</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>
    <I><FONT size="2">What will be the United States&nbsp;federal
    income tax consequences of an investment in the IDSs?</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">The United States&nbsp;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">
<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&nbsp;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
</FONT>

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

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<DIV align="left">
<FONT size="2">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. The value attributed to the shares of Class&nbsp;A common
stock and senior subordinated notes represented by the IDSs have
been established based on the fair market value of such shares
of Class&nbsp;A common stock and senior subordinated notes at
issuance. We will 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 such allocation.
</FONT>
</DIV>

<P align="left">
<I><FONT size="2">Treatment of Senior Subordinated
Notes.</FONT></I><FONT size="2"> Based on the opinion of tax
counsel, the senior subordinated notes should be treated as debt
for United States federal income tax purposes and we intend to
deduct interest on such senior subordinated notes for 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. 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. Our tax deduction for
interest may be put at risk in the future as a result of a
future ruling by the IRS, including an adverse ruling for other
IDSs or an adverse ruling for our own IDSs and in the event of
any such ruling, we may need to consider the effect of such
developments on the determination of our future tax provisions
and obligations. 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>

<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>
    <I><FONT size="2">What will be the United States federal income
    tax consequences of a subsequent issuance of senior subordinated
    notes?</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">The United States&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) are not entirely clear.</FONT></B>

<P align="left">
<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 with
a new CUSIP number 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 preferred stock, each holder of IDSs or separately held
senior subordinated notes, as the case may be, agrees that a
portion of such holder&#146;s senior subordinated notes will be
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. 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 Class&nbsp;A common
stock to form IDSs, or the separation of IDSs, should not affect
your tax treatment.
</FONT>

<P align="left">
<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. If the
exchange of senior subordinated notes is treated as a taxable
exchange, then your initial tax basis in the senior subordinated
notes deemed to have been received in the
</FONT>

<P align="center"><FONT size="2">9
</FONT>
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<DIV align="left">
<FONT size="2">exchange would be the fair market value of such
senior subordinated notes on the date of the deemed exchange
(adjusted to reflect any disallowed loss), and your holding
period for such senior subordinated notes would begin on the day
after the deemed exchange.
</FONT>
</DIV>

<P align="left">
<I><FONT size="2">Reporting of
OID.</FONT></I><FONT size="2">&nbsp;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. 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.
</FONT>

<P align="left">
<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 United States 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>
    <I><FONT size="2">What is the initial and prospective accounting
    treatment of the IDSs?</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">There is no explicit guidance under generally
accepted accounting principles regarding the accounting and
reporting for unit securities comprised of 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 (Income Taxes and IDSs,
Class&nbsp;B common stock and preferred stock).&#148;
</FONT>

<P align="center"><FONT size="2">10
</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="24%"></TD>
    <TD width="1%"></TD>
    <TD width="75%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Issuer
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Alliance Laundry 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">We
    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;shares
    of authorized Class&nbsp;C common stock, par value
    $0.01&nbsp;per share. Class&nbsp;A common stock, Class&nbsp;B
    common stock and Class&nbsp;C common stock are identical in all
    respects, except that only Class&nbsp;A common stock is eligible
    to be included in IDSs. Furthermore, our bylaws provide that 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">Preferred stock
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">We
    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 preferred stock, par value $0.01&nbsp;per share.
    Following the consummation of the
    offering, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of preferred stock will be held by our existing equity
    investors. The preferred stock will have preference in
    liquidation over each class of common stock and will accrue
    dividends as described more fully in &#147;Dividend Policy&#148;
    and &#147;Description of Capital Stock&#151; Preferred
    Stock.&#148;
    </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">In addition, we will enter into an agreement with
    our existing equity investors that provides that following the
    second anniversary of the consummation of this offering, at the
    option of the holder of such shares of Class&nbsp;B common stock
    together with shares of preferred stock, we will exchange with
    the purchasers of such shares into IDSs at an exchange rate of
    one&nbsp;IDS for one&nbsp;share of Class&nbsp;B common stock
    together with one share of preferred stock, subject to
    compliance with law and applicable agreements and provided that
    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. See
    &#147;Related Party Transactions&nbsp;&#151; Investor Rights
    Agreement.&#148;
    </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:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
</TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by Alliance 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.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by our existing
    equity &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;investors
    </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
    if the underwriters&#146; over-allotment option is exercised in
    full (which shares shall be offered from the shares of
    Class&nbsp;A common stock represented by IDSs that we are
    issuing to our existing equity investors in this offering).
    </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 issued to our existing equity investors
    </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.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">11
</FONT>
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<DIV>&nbsp;</DIV>

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

<TR>
    <TD width="24%"></TD>
    <TD width="1%"></TD>
    <TD width="75%"></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
    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. No shares of Class&nbsp;C common
    stock will be outstanding following the consummation of this
    offering.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Shares of preferred 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;shares.
    </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 class on all matters presented to the
    stockholders for a vote. The preferred stock will not vote on
    matters generally presented to the stockholders.
    </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">You will receive dividends on the shares of our
    common stock if and to the extent dividends are declared by our
    board of directors and permitted by applicable law and the terms
    of our then outstanding indebtedness. Specifically, the senior
    subordinated notes indenture and the new credit facility both
    restrict our ability to declare and pay dividends on our common
    stock, as described in detail under &#147;Dividend Policy.&#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 and
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
    share of our Class&nbsp;B common stock. No shares of
    Class&nbsp;C common stock will be outstanding and we do not
    anticipate that we will issue any shares of Class&nbsp;C common
    stock or declare dividends thereon in the near future. Any time
    a dividend is paid to holders of Class&nbsp;A common stock,
    holders of Class&nbsp;B common stock will be paid a dividend
    equal to the amount per share paid to holders of Class&nbsp;A
    common stock. Shares of our preferred stock accrue dividends at
    a rate of
    <B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>%&nbsp;per
    annum on the deemed issuance price of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
    share, as more fully described in &#147;Description of Capital
    Stock&#151; Preferred Stock&#151; Dividends.&#148; Our board of
    directors may, in its discretion, modify or repeal this dividend
    policy. We cannot assure that we will pay dividends at this
    level or at all in the future.
    </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, Class&nbsp;B common stock and preferred stock will be
    paid quarterly on the last day of each fiscal quarter to holders
    of record on the twentieth day, or, if such day is not a
    business day, the business day immediately preceding such
    twentieth day, of the last month of such quarter. To the extent
    not previously paid, the
    <B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>% dividend that
    accrues on shares of preferred stock will be paid at such time
    when such shares of preferred stock are exchanged for IDSs.
    </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 American
    Stock Exchange under the trading symbol
    &#147;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.&#148;
    We do not anticipate that our common stock will trade on an
    exchange, and we currently do not expect an active trading
    market for our Class&nbsp;A common stock to develop. However, we
    will use reasonable efforts to list our Class&nbsp;A common
    stock for separate trading on the American Stock Exchange 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
    </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="24%"></TD>
    <TD width="1%"></TD>
    <TD width="75%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">the American Stock Exchange for at least 30
    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">13
</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="24%"></TD>
    <TD width="1%"></TD>
    <TD width="75%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Issuer
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Alliance Laundry Holdings Inc.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Senior subordinated notes represented by IDSs
    being offered to the public:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
</TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by Alliance Holdings
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    aggregate principal amount
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;senior subordinated
    notes.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;by our existing
    investors
    </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;%
    senior subordinated notes if the underwriters&#146;
    over-allotment option to purchase IDSs is exercised in full
    (which notes shall be offered from the senior subordinated notes
    represented by IDSs that we are issuing to our existing equity
    investors in this offering).
    </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 in the form of 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;senior subordinated
    notes.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Senior subordinated notes represented by IDSs
    being issued to our existing equity investors
    </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;%
    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;%
    senior subordinated notes.
    </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;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 &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;&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;,
    and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;day
    of each such month, or, if such day is not a business day, the
    last business day immediately preceding
    such &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. In
    addition,
    after &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2009, but
    before &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2014 and during the term of each additional five-year term of
    the senior subordinated notes, if any, we may, subject to
    certain restrictions, defer interest payments on our senior
    subordinated notes on up to two occasions, provided that no more
    than two quarters of interest may be deferred at any one time.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">No later
    than &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2009, we will pay in full all interest deferred prior
    to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2009 (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;,
    2014 we will pay in full all interest deferred
    after &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2009 and prior
    to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2014 (together with accrued interest thereon), provided that we
    must pay all deferred interest and accrued interest thereon in
    full prior to deferring interest on a second occasion prior
    to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2014.
    </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
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">14
</FONT>
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<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="24%"></TD>
    <TD width="1%"></TD>
    <TD width="75%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">permitted to make any payment of dividends on the
    capital stock. For a detailed description of interest deferral
    provisions of the indenture, see &#147;Description of Senior
    Subordinated Notes&#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 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 &#147;Material U.S.
    Federal Income Tax Considerations.&#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;,
    2014. We may extend the maturity of our senior subordinated
    notes for two additional successive five-year terms if the
    following conditions are satisfied:
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149; &nbsp;during
    the twelve month period ending on the last day of the fiscal
    quarter ending at least 45&nbsp;days before the end of the
    then-current term, our Fixed Charge Coverage Ratio as calculated
    in accordance with the indenture is greater
    than &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to 1.0;
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149; &nbsp;no
    event of default, including certain events of bankruptcy,
    insolvency or reorganization of us or our subsidiaries, under
    the indenture has occurred and is continuing;
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149; &nbsp;no
    event of default has occurred and is continuing with respect to
    any of our other indebtedness having a principal amount of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    or more outstanding or would occur as a result of the
    extension;&nbsp;and
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149; &nbsp;there
    are no overdue payments of interest on our senior subordinated
    notes or any of our other outstanding indebtedness.
    </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 the senior
    subordinated notes on the terms set forth in the indenture
    governing the senior subordinated notes. If the senior
    subordinated notes are redeemed in whole or in part, all senior
    subordinated notes and Class&nbsp;A common stock represented by
    each IDS will automatically separate and will no longer be
    combinable into IDSs following such separation. See
    &#147;Description of Senior Subordinated Notes&#151; Optional
    Redemption.&#148;
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Change of control
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Upon the occurrence of a change of control, as
    defined under &#147;Description of Senior Subordinated
    Notes&#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 fully and
    unconditionally guaranteed, on an unsecured senior subordinated
    basis, by each of our direct and indirect wholly-owned domestic
    subsidiaries existing on the closing of this offering and each
    of our future wholly-owned domestic
    </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="24%"></TD>
    <TD width="1%"></TD>
    <TD width="75%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">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 new credit facility.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
    <FONT size="2">Subsequent issuances may affect tax treatment
    </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 notes with a new CUSIP number 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 in connection with the
    issuance by us of additional IDSs, each holder of IDSs or
    separately held senior subordinated notes, as the case may be,
    agrees that a portion of such holder&#146;s senior subordinated
    notes, whether held as part of IDSs or separately, will be
    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, 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. Any subsequent issuance of senior subordinated
    notes by us may affect the tax treatment of the IDSs and senior
    subordinated notes. See &#147;Material United States Federal
    Income Tax Consequences&#151; United States Holders&#151; Senior
    Subordinated Notes&#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">Alliance 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,
    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 of the subsidiary
    guarantors under the new credit facility. The senior
    subordinated notes and guarantees will rank <I>pari passu</I> in
    right of payment with all of our and any guarantor&#146;s
    existing and future senior subordinated indebtedness and trade
    payables. The senior subordinated notes will also be effectively
    subordinated to any of our and any guarantor&#146;s secured
    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.
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">The indenture governing the senior subordinated
    notes will permit Alliance Holdings and the subsidiary
    guarantors to incur additional
    </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="24%"></TD>
    <TD width="1%"></TD>
    <TD width="75%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">indebtedness, including senior indebtedness,
    subject to specified limitations. On a pro forma basis as of
    December&nbsp;31, 2003:
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149; &nbsp;Alliance
    Holdings would have had no senior or <I>pari passu</I>
    indebtedness outstanding except for its guarantee under the new
    credit facility, as described below;&nbsp;and
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149; &nbsp;Alliance
    Holdings would have had
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    aggregate principal amount of senior secured indebtedness
    outstanding under the new credit facility plus approximately
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    of letters of credit, which would have been guaranteed on a
    senior secured basis by Alliance Holdings and the subsidiary
    guarantors.
    </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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#149; &nbsp;the
    incurrence of additional indebtedness and the issuance of
    preferred stock and certain redeemable capital stock;
    </FONT></TD>
</TR>

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

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#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">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#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.
    There will be no restriction in the indenture, however, on our
    ability to incur indebtedness in connection with the issuance of
    additional IDSs so long as the ratio of the aggregate principal
    amount of the additional senior subordinated notes to the number
    of the additional shares of Class&nbsp;A common stock will not
    exceed the equivalent ratio represented by the then existing
    IDSs. In addition, 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&#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"><FONT size="2">17
</FONT>
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<P align="center">
<B><FONT size="2">Risk Factors</FONT></B>

<P align="left">
<FONT size="2">You should carefully consider the information
under the heading &#147;Risk Factors&#148; and all other
information in this prospectus before investing in the IDSs
(including the shares of our Class&nbsp;A common stock and
senior subordinated notes represented by the IDSs) or in our
senior subordinated notes.
</FONT>

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

<P align="left">
<FONT size="2">Throughout this prospectus, unless otherwise
noted, we have assumed:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">that our reorganization will be consummated,
    including the issuance of IDSs to our existing equity investors;
    </FONT></TD>
</TR>

<TR>
    <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 exercise of the underwriters&#146;
    over-allotment 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">the purchase of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
    of our existing senior subordinated notes in the tender offer
    and consent solicitation for aggregate consideration of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    and the redemption of the
    remaining &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of our existing senior
    subordinated notes on or
    about &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2004 for aggregate consideration of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
    in each case including accrued and unpaid interest to the tender
    purchase or redemption date, respectively, and the pro forma
    offering numbers give effect to the purchase on tender or
    redemption of 100% of these notes;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">a &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% annual interest
    rate on the senior subordinated notes, which is subject to
    change depending on market conditions prior to the pricing date;
    </FONT></TD>
</TR>

<TR>
    <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 initial public offering price of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
    IDS, the midpoint of the range set forth on the cover page of
    this prospectus, comprised of
    $<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>allocated
    to one share of Class&nbsp;A common stock and
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;allocated
    to the
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;principal
    amount of senior subordinated notes included in each IDS, which
    equals 100% of the principal amount thereof;&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 initial public offering price of the senior
    subordinated notes that are being offered separately (not in the
    form of IDSs), of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of their
    stated principal amount.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">In this prospectus, unless otherwise indicated,
all references to dollars are to U.S.&nbsp;dollars, and all
references to GAAP are to U.S.&nbsp;generally accepted
accounting principles.
</FONT>

<P align="left">
<FONT size="2">Unless the context otherwise requires, references
in this prospectus to the &#147;offering&#148; refer
collectively to the offering of:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">an aggregate
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs
    to the public; 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;aggregate
    principal amount of senior subordinated notes to the public
    separately (not in the form of IDSs).
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Furthermore, unless the context otherwise
requires, references in this prospectus to &#147;senior
subordinated notes&#148; refer to both senior subordinated notes
represented by IDSs and senior subordinated notes issued
separately (not in the form of IDSs).
</FONT>

<P align="center"><FONT size="2">18
</FONT>
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<P align="center">
<B><FONT size="2">Summary Consolidated Financial
Information</FONT></B>

<P align="left">
<FONT size="2">The following table sets forth our summary
consolidated financial information derived from our audited
consolidated financial statements as of and for each of the
years ended December&nbsp;31, 1999 through December&nbsp;31,
2003, of which the financial statements for 2001, 2002 and 2003
are included elsewhere in this prospectus.
</FONT>

<P align="left">
<FONT size="2">The information in the table below is only a
summary and should be read together with our audited
consolidated financial statements for 2001, 2002, and 2003 and
the related notes, and &#147;Management&#146;s Discussion and
Analysis of Financial Condition and Results of Operations,&#148;
all as included elsewhere in this prospectus. The figures in the
table below reflect rounding adjustments.
</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="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="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="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>
</TR>

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

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" 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">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">2003</FONT></B></TD>
</TR>

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

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

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><FONT size="1">(In thousands, except ratios)</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">Statements of operations 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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net revenues:
    </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">Commercial laundry(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">281,658</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">230,448</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">219,273</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">219,653</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">230,663</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">Service parts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,716</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,993</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">34,743</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="bottom" nowrap><FONT size="2">35,524</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,944</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"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">314,374</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">265,441</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">254,016</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">255,177</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">267,607</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">Cost of sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">239,482</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">197,558</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="bottom" nowrap><FONT size="2">188,982</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">179,047</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">188,979</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">
    <FONT size="2">Gross profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">74,892</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,883</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">65,034</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">76,130</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">78,628</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>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Selling, 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">32,889</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">36,469</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,665</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,098</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,566</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">Securitization and other 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">3,707</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">402</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">10,920</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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>
    <TD><FONT size="2">&nbsp;</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">
    <FONT size="2">Total operating 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">36,596</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">36,871</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">28,665</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41,018</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,566</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><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">38,296</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,012</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,369</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,112</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">45,062</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">31,509</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,947</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,538</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">28,341</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">28,258</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 from 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">&#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">&#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">&#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">2,004</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">&#150;</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">Abandoned Canadian public offering 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">&#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">&#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">&#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">3,409</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">&#150;</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 (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">(1,706</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">354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(67</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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">(830</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>

</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 (loss) before 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">5,081</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,581</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,764</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">1,391</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,974</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">Provision for 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">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">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">34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55</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 (loss) before cumulative effect of
    accounting 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">5,052</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,601</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">2,730</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">1,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,919</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">Cumulative effect of change in accounting
    principle
    </FONT></DIV>
    </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">&#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">2,043</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">&#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">&#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>
    <TD><FONT size="2">&nbsp;</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">Net income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,052</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,601</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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">687</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,919</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>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Cash flow 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 colspan="2" 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 align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,662</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,290</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,338</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,775</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,393</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 cash used in investing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(10,208</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(19,557</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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,964</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,563</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">(3,590</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">Net cash provided by (used in) financing
    activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,265</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(15,806</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(18,532</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">(26,205</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">
    <B><FONT size="2">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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Maintenance capital expenditures(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,575</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,578</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,617</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,652</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,600</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">Ratio of earnings to fixed charges(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">1.2</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">&#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">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">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">1.6</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">Adjusted EBITDA(4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56,962</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55,125</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,188</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59,118</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,314</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

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

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">December&nbsp;31, 2003</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="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma As</FONT></B></TD>
</TR>

<TR>
    <TD></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">Adjustments</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Adjusted(5)</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="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><FONT size="1">(In thousands)</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">Balance sheet data(6):</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 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 align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">60,996</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</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 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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42,977</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</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">Working capital(7)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,019</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</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 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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">190,639</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</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">Long-term debt (including current portion)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">292,199</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</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 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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">330,397</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</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>

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

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" 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">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">2003</FONT></B></TD>
</TR>

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

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

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><FONT size="1">(In thousands)</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">EBITDA:</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 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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,052</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,601</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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">687</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,919</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">Cumulative effect of change in accounting
    principle
    </FONT></DIV>
    </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">&#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">2,043</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">&#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">&#150;</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">Provision for 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">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">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">34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55</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">
    <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">5,081</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,581</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,764</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">1,391</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,974</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:
    </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">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">31,509</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,947</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,538</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">28,341</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">28,258</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(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">16,969</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,155</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,026</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,293</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">10,886</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">Non-cash interest expense included in
    amortization above(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">(2,562</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,518</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,720</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,507</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,017</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>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">EBITDA(10)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,997</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46,003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,608</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,518</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,101</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="left">
<HR size="1" width="33%" align="left" noshade>
<P>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">For 1999, this includes approximately
    $54.7&nbsp;million in revenue from home laundry equipment sales
    to Amana Company, L.P.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Maintenance capital expenditures is defined in
    the indenture as capital expenditures less non-recurring capital
    expenditures as reflected in the chart below for the relevant
    periods.
    </FONT></TD>
</TR>

</TABLE>

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

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></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">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>
    <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><FONT size="1">(In thousands)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital expenditures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,947</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,445</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,152</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,652</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,600</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-recurring 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">(7,372</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,867</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,535</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT 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>
    <TD><FONT size="2">&nbsp;</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">Maintenance capital expenditures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,575</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,578</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,617</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,652</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,600</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>

</TABLE>
</CENTER>
<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">During 1999 and 2001, we incurred various capital
    expenditures in connection with certain facility rationalization
    efforts related to previously owned facilities in Searcy,
    Arkansas, Madisonville, Kentucky and Cincinnati, Ohio, that were
    considered non-recurring and outside the normal course of our
    manufacturing operations. The non-recurring capital expenditures
    consist of the following:
    </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">In 1999, $4.9&nbsp;million and $2.5&nbsp;million,
    respectively, of expenditures at our Ripon facility related to
    the replication of production capabilities for our standard
    dryer and front load washer product lines. These products were
    produced by a previously owned manufacturing facility in Searcy,
    Arkansas, which was sold in 1997 as part of Raytheon
    Company&#146;s divestiture of its Raytheon Appliance Group.
    </FONT></TD>
</TR>

<TR>
    <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 2000, $3.2&nbsp;million of expenditures at our
    Ripon facility related to the transfer of production of our
    standard dryer and front load washer product lines from a
    previously owned manufacturing facility in Searcy, Arkansas,
    which began in 1999 (these expenditures included $2.6 million to
    build a new finished goods distribution center in Ripon as the
    prior warehousing space was displaced by the standard dryer,
    front load washer and tumbler dryer production lines);
    $1.1&nbsp;million of
    </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>

<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">expenditures at our Ripon facility related to the
    transfer of production of our tumbler dryer product line from a
    previously owned manufacturing facility in Madisonville,
    Kentucky, which was closed in 1999; $0.5&nbsp;million of
    expenditures at our Marianna facility related to the transfer of
    production of our Ajax press and finishing equipment product
    lines from a manufacturing site in Cincinnati, Ohio.
    </FONT></TD>
</TR>

<TR>
    <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 2001, $1.5&nbsp;million of expenditures
    primarily at our Marianna facility related to the transfer of
    production of our Ajax press and finishing equipment product
    lines from a manufacturing site in Cincinnati, Ohio, which began
    in 2000.
    </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">We believe that the identification and separation
    of maintenance and non-recurring capital expenditures are
    important factors in evaluating our financial results.
    </FONT></TD>
</TR>

</TABLE>
<P>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">For purposes of determining the ratio of earnings
    to fixed charges, earnings are defined as income (loss) before
    income taxes and cumulative effect of change in accounting
    principle plus fixed charges. Fixed charges include interest
    expense on all indebtedness, amortization of deferred financing
    costs and one-third of rental expense on operating leases,
    representing that portion of rental expense deemed to be
    attributable to interest. In 2000, earnings were inadequate to
    cover fixed charges. The dollar amount of earnings required to
    attain a ratio of 1.0 to 1.0 is $4.6 million.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">&#147;Adjusted EBITDA,&#148; as defined in the
    indenture governing our senior subordinated notes is determined
    as EBITDA, as adjusted for finance program adjustments, other
    non-recurring charges and the annual management fee paid to
    affiliates of Bain. We present this discussion of Adjusted
    EBITDA because covenants in the indenture governing our senior
    subordinated notes contain ratios based on this measure. For
    example, our ability to incur additional debt requires a ratio
    of Adjusted EBITDA to fixed charges
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to 1.0,
    subject to certain exceptions, including our ability to incur an
    unlimited amount of indebtedness in connection with the issuance
    of additional IDSs so long as the ratio of the aggregate
    principal amount of the additional senior subordinated notes to
    the number of the additional shares of our common stock will not
    exceed the equivalent ratio represented by the then existing
    IDSs.
    </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></TD>
    <TD align="left">
    <FONT size="2">On a historical basis, we made the following
    adjustments to EBITDA to compute Adjusted EBITDA:
    </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="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="49%"><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="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="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">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

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

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">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">2003</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</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><FONT size="1">(In thousands, except ratios)</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">EBITDA
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,997</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46,003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,608</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,518</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,101</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">Adjustments:
    </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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Finance program adjustments(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">(1,313</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,650</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">151</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,019</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,396</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">Other non-recurring charges, as defined in the
    indenture(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">6,269</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">5,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,414</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">16,548</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">797</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">Management fees paid to affiliates of Bain
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,009</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">1,019</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,015</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">1,020</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">Adjusted EBITDA
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56,962</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55,125</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,188</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59,118</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,314</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="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ratio of Adjusted EBITDA to fixed charges(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">2.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.6</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">1.7</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">2.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<HR size="1" width="33%" align="left" noshade>
</FONT>
<P>

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

<TR>
    <TD width="5%"></TD>
    <TD width="3%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(a)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">We currently operate an off-balance sheet
    commercial equipment finance program in which newly originated
    equipment loans are sold to qualified special-purpose bankruptcy
    remote entities. In accordance with GAAP, we are required to
    record gains/losses on the sale of these equipment based
    promissory notes. In calculating Adjusted EBITDA, management
    determines the cash impact of net interest income on these
    notes. The finance program adjustments are the difference
    between GAAP basis revenues (as prescribed by Statement of
    Financial Accounting Standards No.&nbsp;125/140, or
    SFAS&nbsp;No.&nbsp;125/140) and cash basis revenues.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(b)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Historically other non-recurring charges included
    infrequently occurring items, plant relocation costs included in
    administrative expenses and lawsuit settlement expenses.
    </FONT></TD>
</TR>

</TABLE>
<P>

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

<TR>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    <FONT size="2">For a more detailed explanation of the
    adjustments of EBITDA to calculate Adjusted EBITDA, see Footnote
    4 to &#147;Selected Historical Financial and Operating Data
    Information.&#148;
    </FONT></TD>
</TR>

</TABLE>
<P>

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

<TR>
    <TD width="5%"></TD>
    <TD width="3%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(c)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">For purposes of calculating the ratio of Adjusted
    EBITDA to fixed charges (as defined in the indenture), fixed
    charges includes interest expense (excluding amortization of
    deferred financing fees) plus capitalized interest and cash
    dividends on preferred stock. On a pro forma basis, for the year
    ended December&nbsp;31, 2003, our ratio of Adjusted EBITDA to
    fixed charges under the indenture would have been
    <B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>to 1.0.
    </FONT></TD>
</TR>

</TABLE>
<P>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The pro forma as adjusted balance sheet data have
    been prepared assuming the closing of this offering, the tender
    or purchase on redemption of 100% of our existing senior
    subordinated notes and completion of the bank refinancing,
    including payment of related fees and expenses. The pro forma as
    adjusted balance sheet data give effect to those transactions as
    if they had occurred on December&nbsp;31, 2003.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(6)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">As described in &#147;Risk Factors&#148; and
    further described in &#147;Material U.S.&nbsp;Federal Income Tax
    Consequences,&#148; we plan to account for the issuance of the
    IDSs as representing shares of common stock and senior
    subordinated notes. We will deduct as interest expense the
    interest on the senior subordinated notes from taxable income
    for income tax purposes and report the full
    </FONT></TD>
</TR>

</TABLE>

<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>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    <FONT size="2">benefit of the income tax deduction in our
    consolidated financial statements. We cannot assure you that the
    Internal Revenue Service will not seek to challenge the
    treatment of these senior subordinated notes as debt and the
    amount or timing of interest expense deducted. If the Internal
    Revenue Service were to challenge this treatment successfully,
    we would have to pay additional income taxes and record an
    additional liability for the previously recorded benefit for the
    interest deductions.
    </FONT></TD>
</TR>

</TABLE>
<P>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(7)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Working capital represents total current assets
    less total current liabilities.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(8)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Amortization expense for 2001, 2000 and 1999
    includes goodwill amortization of $2.0&nbsp;million,
    $2.0&nbsp;million and $1.5&nbsp;million, respectively. In
    accordance with SFAS&nbsp;No.&nbsp;142, &#147;Goodwill and Other
    Intangible Assets,&#148; we discontinued amortization of the
    goodwill balance as of December&nbsp;31, 2001.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(9)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Depreciation and amortization amounts include
    amortization of deferred financing costs included in interest
    expense.
    </FONT></TD>
</TR>

</TABLE>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="4%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(10)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">EBITDA represents net income from continuing
    operations before interest expense, income tax provision
    (benefit) and depreciation and amortization. EBITDA is not a
    measure of operating income, operating performance or liquidity
    under GAAP. We include EBITDA because we understand it is used
    by some investors to determine a company&#146;s historical
    ability to service indebtedness and fund ongoing capital
    expenditures, and because certain covenants in our borrowing
    agreements are tied to similar measures. Nevertheless, this
    measure should not be considered in isolation or as a substitute
    for operating income (as determined in accordance with GAAP) as
    an indicator of our operating performance, or of cash flows from
    operating activities (as determined in accordance with GAAP), or
    as a measure of liquidity. Set forth below is a reconciliation
    of EBITDA to our cash flow from operating activities for the
    periods indicated.
    </FONT></TD>
</TR>

</TABLE>

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

<TR>
    <TD width="55%"><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="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></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

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

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></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">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>
    <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><FONT size="1">(In thousands)</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 flows from operating activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,662</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,290</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,338</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,775</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,393</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">Interest expense, net of non-cash 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">27,023</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="bottom" nowrap><FONT size="2">31,134</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">27,155</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,959</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">20,951</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">Net change in operating 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">14,753</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">2,148</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,301</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">1,735</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">Income tax 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">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">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">34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55</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 from 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">(2,004</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT 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">Other(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">(2,470</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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 align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(67</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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">(33</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>
    <TD><FONT size="2">&nbsp;</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">EBITDA
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,997</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46,003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,608</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,518</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,101</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>

</TABLE>
</CENTER>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<HR size="1" width="33%" align="left" noshade>
</FONT>
</DIV>
<P>

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

<TR>
    <TD width="3%"></TD>
    <TD width="5%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(A)</FONT></TD>
    <TD align="left">
    <FONT size="2">In 1999, we recorded a $2.3&nbsp;million
    restructuring charge associated with the closing of our
    Madisonville, Kentucky manufacturing facility. The charge
    includes $1.7&nbsp;million in employee termination and severance
    benefit charges, $0.5&nbsp;million for the estimated loss on
    fixed assets which were held for disposal, and $0.1&nbsp;million
    in miscellaneous costs. In 2000, we recorded an additional
    $0.4&nbsp;million restructuring charge due to additional medical
    benefits provided as part of the employee terminations.
    </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>

<P align="center">
<B><FONT size="2">Interest and Dividend Payments to IDS
Holders</FONT></B>

<P align="left">
<FONT size="2">The table below is intended to provide certain
information relating to our available funds and our interest and
dividend payments to IDS holders for the year ended
December&nbsp;31, 2003, on a pro forma basis to give effect to
this offering, including the use of proceeds from this offering,
our reorganization, the consent solicitation and tender offer,
and to give effect to our new credit facility.
</FONT>

<P align="left">
<FONT size="2">Adjusted EBITDA, available funds before dividend
payments on common shares and remaining funds are not indicators
of performance or other measures in accordance with GAAP. We
present these non-GAAP financial measures in this prospectus
because we believe they are indicators of our ability to declare
and pay dividends on Class&nbsp;A common stock and Class&nbsp;B
common stock pursuant to our indenture governing the senior
subordinated notes. Adjusted EBITDA is described under
&#147;Summary Consolidated Financial Information.&#148;
</FONT>

<P align="left">
<FONT size="2">The information in the table below assumes that
these transactions occurred on January&nbsp;1, 2003.
</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="74%"><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="9%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

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

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">December 31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
</TR>

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

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><FONT size="1">(In thousands)</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">Adjusted EBITDA (actual)
    </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">58,314</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">Deductions:
    </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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital expenditures(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">3,600</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest expense on new credit facility(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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividends on shares of preferred 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>
</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">State and federal income tax expense(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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Estimated additional public company
    administrative expense(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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Available funds before dividend payments on
    common shares
    </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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividends on shares 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>
</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 on shares of 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>
</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Remaining funds
    </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="33%" 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">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents our capital expenditures for the year
    ended December&nbsp;31, 2003. We estimate that we will have
    capital expenditure requirements of approximately
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    in each of 2004 and 2005.
    </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">Assumes interest at current rates, estimated
    as &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% average
    interest, on
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    outstanding borrowings under the new term loan and
    a &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% commitment
    fee on the average unused balance
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    under the new revolver.
    </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">Assumes &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
    interest on
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million of
    senior subordinated notes represented by the IDSs and
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    of senior subordinated notes issued separately (not in the form
    of IDSs).
    </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">Represents our income tax expense for the year
    ended December&nbsp;31, 2003. This does not reflect the impact
    of our reorganization and we expect that our income tax expense
    will be $&nbsp;&nbsp;&nbsp;&nbsp;in 2004.
    </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">Consists of estimated incremental accounting and
    audit fees, director and officer liability insurance, expenses
    relating to the annual stockholders meeting, printing expenses,
    investor relations expenses, additional filing fees, additional
    trustee fees, registrar and transfer agent expenses, directors
    fees, additional legal fees, listing fees and miscellaneous fees.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Dividend payments are discretionary. See
&#147;Dividend Policy and Restrictions.&#148;
</FONT>

<P align="left">
<FONT size="2">We estimate that we will have capital expenditure
requirements of approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
in each of 2004 and 2005. Interest payments on the senior
subordinated notes may be deferred on one or more occasions for
up to eight&nbsp;quarters in the aggregate prior
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2009 and may be deferred at our option on two&nbsp;occasions for
not more than two quarters
between &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2009
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2014.
</FONT>

<P align="center"><FONT size="2">23
</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">
<FONT size="2">Based on the foregoing, aggregate payments to IDS
holders and holders of separate senior subordinated notes for
the year ended December&nbsp;31, 2003, would have been as
follows:
</FONT>

<CENTER>
<TABLE width="90%" 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="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="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">Aggregate</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Per IDS</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Per Note</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="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><FONT size="1">(In thousands)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest on senior subordinated notes
    </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>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dividends on shares of Class&nbsp;A common stock
    represented by 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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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>

</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 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><FONT 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">24
</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='102'></A>
</DIV>

<!-- link1 "Risk Factors" -->

<P align="center">
<B>Risk Factors</B>

<P align="left">
<I><FONT size="2">Before you invest in the IDSs (including the
shares of our </FONT></I><FONT size="2">Class&nbsp;A <I>common
stock and our senior subordinated notes represented by the IDSs)
or the senior subordinated notes, you should carefully consider
the various risks of the investment, including those described
below, together with all of the other information included in
this prospectus. If any of these risks actually occur, our
business, financial condition or operating results could be
adversely affected. In that case, the trading price of the IDSs
and the senior subordinated notes could decline and you could
lose all or part of your investment.</I>
</FONT>

<P align="left">
<B><I><FONT size="2">Risks Relating to the IDSs, the Shares of
Class&nbsp;A Common Stock and Senior Subordinated Notes
Represented by the IDSs, the Senior Subordinated Notes Offered
Separately (not in the form of IDSs), and our New Credit
Facility</FONT></I></B>

<P align="left">
<B><FONT size="2">We have substantial indebtedness that could
restrict our ability to pay interest and principal on the senior
subordinated notes and to pay dividends with respect to shares
of our Class&nbsp;A common stock represented by the IDSs and
impact our financing options and liquidity position.</FONT></B>

<P align="left">
<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
our indebtedness, including the new credit facility which we
guarantee on a senior secured basis. The degree to which we are
leveraged on a consolidated basis could have important
consequences to the holders of the IDSs and of separate senior
subordinated notes (not in the form of IDSs), including:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our ability to obtain additional financing in the
    future for working capital, capital expenditures or acquisitions
    may be limited;
    </FONT></TD>
</TR>

<TR>
    <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 be unable to refinance our indebtedness 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">a significant portion of our cash flow from
    operations is likely to be dedicated to the payment of the
    principal of and interest on our indebtedness, thereby reducing
    funds available for other corporate purposes;&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 substantial indebtedness may make us more
    vulnerable to economic downturns and limit our ability to
    withstand competitive pressures.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Although our new credit facility will contain
total leverage, senior leverage and cash interest coverage
maintenance covenants that will restrict our ability to incur
debt as described under &#147;Description of Certain
Indebtedness&#151;New Credit Facility,&#148; the indenture
governing the senior subordinated notes allows us to issue an
unlimited amount of senior subordinated notes so long as we
issue additional shares of Class&nbsp;A common stock in the
appropriate proportionate amounts to represent additional IDSs.
</FONT>

<P align="left">
<B><FONT size="2">We may amend the terms of our new credit
facility, or we may enter into new agreements that govern our
senior indebtedness and the amended or new terms may
significantly affect our ability to pay interest on our senior
subordinated notes and dividends on shares of our common
stock.</FONT></B>

<P align="left">
<FONT size="2">Our new credit facility contains significant
restrictions on our ability to pay interest on the senior
subordinated notes and dividends on shares of common stock based
on us meeting certain performance measures and compliance with
other conditions. As a result of general economic conditions,
conditions in the lending markets, the results of our business
or for any other reason, we may elect or be required to amend or
refinance our new credit facility, at or prior to maturity, or
enter into additional agreements for senior indebtedness.
Regardless of any protection you have in the indenture governing
the senior subordinated notes, any such amendment, refinancing
or additional indebtedness may contain covenants that could
limit, in a significant manner, our ability to make interest
payments and pay dividends to you.
</FONT>

<P align="center"><FONT size="2">25
</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">
<B><FONT size="2">We are subject to restrictive debt covenants
that limit our business flexibility by imposing operating and
financial restrictions on our operations.</FONT></B>

<P align="left">
<FONT size="2">The agreements governing our indebtedness impose
significant operating and financial restrictions on us. These
restrictions prohibit or limit, among other things:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the incurrence of additional indebtedness and the
    issuance of preferred stock and certain redeemable 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">a number of other restricted payments, including
    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">specified sales of 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">specified 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">the creation of a number of 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">consolidations, mergers and transfers of all or
    substantially all of our assets;&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 ability to change the nature of our business.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">The terms of the new credit facility include
other and more restrictive covenants and prohibit us from
prepaying our other indebtedness, including the senior
subordinated notes, while indebtedness under the new credit
facility is outstanding. The new credit facility also requires
us to maintain certain specified financial ratios and satisfy
financial condition tests. Our ability to comply with the ratios
or tests may be affected by events beyond our control, including
prevailing economic, financial and industry conditions.
</FONT>

<P align="left">
<FONT size="2">A breach of any of these covenants, ratios or
tests could result in a default under the new credit facility
and/or the indenture. Events of default under the new credit
facility would prohibit us from making payments on the senior
subordinated notes in cash, including payment of interest when
due. In addition, upon the occurrence of an event of default
under the new credit facility, the lenders could elect to
declare all amounts outstanding under the new credit facility,
together with accrued interest, to be immediately due and
payable. If we were unable to repay those amounts, the lenders
could proceed against the security granted to them to secure
that indebtedness. If the lenders accelerate the payment of the
indebtedness, our assets may not be sufficient to repay in full
this indebtedness and our other indebtedness, including the
senior subordinated notes.
</FONT>

<P align="left">
<B><FONT size="2">We are a holding company and rely on dividends
and other payments, advances and transfers of funds from our
subsidiaries to meet our debt service and other
obligations.</FONT></B>

<P align="left">
<FONT size="2">We are a holding company and conduct all of our
operations through our subsidiaries. We currently have no
significant assets other than equity interests in Alliance
Laundry, all of which will be pledged to the creditors under the
new credit facility which we guarantee. As a result, we will
rely on dividends and other payments or distributions from our
subsidiaries to meet our debt service obligations and enable us
to pay dividends. The ability of our subsidiaries to pay
dividends or make other payments or distributions to us will
depend on their respective operating results and may be
restricted by, among other things, the laws of their
jurisdiction of organization (which may limit the amount of
funds available for the payment of dividends), agreements of
those subsidiaries, the terms of the new credit facility and the
covenants of any future outstanding indebtedness we or our
subsidiaries incur.
</FONT>

<P align="left">
<B><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></B>

<P align="left">
<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 but
before &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2014 and during the term of each additional five-year term of
the senior subordinated notes, if any, we may, subject to
certain restrictions, defer interest payments on our senior
subordinated notes for up to two quarters. 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;,
2009; so you may be owed a substantial amount of deferred
interest that will not be due and payable until such date. For
any interest deferred
</FONT>

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

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<DIV align="left">
<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, we are not obligated to pay all of the deferred interest
until &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;so
you may be owed a substantial amount of deferred interest that
will not be due and payable until such date.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">You may not receive the level of dividends
provided for in the dividend policy our board of directors is
expected to adopt upon the closing of this offering or any
dividends at all.</FONT></B>

<P align="left">
<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 indenture governing our senior subordinated notes
and the new credit facility contain significant restrictions on
our ability to make dividend payments, including, if we defer
interest on the senior subordinated notes under the indenture,
restrictions on the payment of dividends until we have paid all
deferred interest.
</FONT>

<P align="left">
<FONT size="2">In addition, our after-tax cash flow available
for dividend and interest payments would be reduced if the
senior subordinated notes were treated as equity rather than
debt for United States federal income tax purposes. In that
event, 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. Our inability to deduct
interest on the senior subordinated notes could materially
increase our taxable income and, thus, our United States federal
and applicable state income tax liability.
</FONT>

<P align="left">
<B><FONT size="2">You will be immediately diluted by
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share of Class&nbsp;A common stock if you purchase IDSs in this
offering.</FONT></B>

<P align="left">
<FONT size="2">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
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share of Class&nbsp;A common stock represented by the IDSs which
exceeds the entire price allocated to each share of Class&nbsp;A
common stock represented by the IDSs in this offering because
there will be a net tangible book deficit for each share of
Class&nbsp;A common stock outstanding immediately after this
offering. Our net tangible book value as of December&nbsp;31,
2003, after giving effect to this offering, was approximately
$&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.
</FONT>

<P align="left">
<B><FONT size="2">Our interest expense may increase
significantly and could cause our net income and distributable
cash to decline significantly.</FONT></B>

<P align="left">
<FONT size="2">The new credit facility will be subject to
periodic renewal or must otherwise be refinanced. We may not be
able to renew or refinance the new credit facility, or if
renewed or refinanced, the renewal or refinancing may occur on
less favorable terms. Borrowings under the revolving facility
will be made at a floating rate of interest. In the event of an
increase in the base reference interest rates, our interest
expense will increase and could have a material adverse effect
on our ability to make cash dividend payments to our
shareholders. Our ability to continue to expand our business
will, to a large extent, be dependent upon our ability to borrow
funds under our new credit facility and to obtain other third
party financing, including through the sale of IDSs or other
securities. We cannot assure you that such financing will be
available to us on favorable terms or at all.
</FONT>

<P align="left">
<B><FONT size="2">We may not generate sufficient funds from
operations to pay our indebtedness at maturity or upon the
exercise by holders of their rights upon a change of
control.</FONT></B>

<P align="left">
<FONT size="2">A significant portion of our cash flow from
operations will be dedicated to servicing our debt requirements.
In addition, we currently expect to distribute a significant
portion of any remaining cash earnings to our stockholders in
the form of quarterly dividends. Moreover, prior to the maturity
of our senior subordinated notes, we will not be required to
make any payments of principal on our senior subordinated notes.
We may not generate sufficient funds from operations to repay
the principal amount of our indebtedness at maturity or in case
you exercise your right to require us to purchase your notes
upon a change of control. We may therefore need to refinance our
debt or raise additional capital. These alternatives may not be
</FONT>

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

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<DIV align="left">
<FONT size="2">available to us when needed or on satisfactory
terms due to prevailing market conditions, a decline in our
business or restrictions contained in our senior debt
obligations.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">The indenture governing our senior
subordinated notes and our new credit facility permit us to pay
a significant portion of our cash flow to stockholders in the
form of dividends.</FONT></B>

<P align="left">
<FONT size="2">Although the indenture governing our senior
subordinated notes and our new credit facility have some
limitations on our payment of dividends, they permit us to pay a
significant portion of our cash flow to stockholders in the form
of dividends. Following completion of this offering, we intend
to pay quarterly dividends. Specifically, the indenture
governing our senior subordinated notes permits us to pay up to
the quarterly base dividend level in any fiscal quarter, which
equals &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of our excess cash (which
is Adjusted EBITDA, as defined in the indenture, minus the sum
of cash interest expense, cash income tax expense and
maintenance capital expenditures) for the 12 fiscal month period
divided by four, as more fully described in &#147;Description of
Senior Subordinated Notes&#151;Certain Covenants.&#148; In
addition, if the actual dividends paid in any fiscal quarter are
less than the quarterly base dividend level, the indenture
permits us to use the difference between the aggregate amounts
of dividends actually paid and the quarterly base dividend level
for such quarter for the payment of dividends at a later date.
The new credit facility permits us to use up
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the distributable cash, as
defined in the new credit facility plus certain other amounts
under certain limited circumstances to fund dividends on our
shares of common stock. 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>

<P align="left">
<B><FONT size="2">Because we will use a significant portion of
the proceeds of this offering to purchase equity interests in
our subsidiaries from our existing equity investors, we will
have only the remaining portion of the proceeds of this offering
to repay our existing debt and for corporate purposes and will
have to incur more debt.</FONT></B>

<P align="left">
<FONT size="2">We will use a significant portion of the net
proceeds from this offering to purchase equity interests in our
subsidiaries from our existing equity investors as part of our
reorganization. Therefore, we will not have these funds
available to us (1)&nbsp;to repay our existing debt, and will
therefore have to borrow more under our new credit facility to
repay the existing credit facility than we would have had we not
undertaken these purchases, or (2)&nbsp;to fund our operations
or to continue to expand our business.
</FONT>

<P align="left">
<B><FONT size="2">The realizable value of our assets upon
liquidation may be insufficient to satisfy claims.</FONT></B>

<P align="left">
<FONT size="2">At December&nbsp;31, 2003, our assets included
intangible assets in the amount of $55.4&nbsp;million,
representing approximately 29% of our total consolidated assets
and consisting primarily of the excess of the acquisition cost
over the fair market value of the net assets acquired in
purchase transactions. The value of these intangible assets will
continue to depend significantly upon the success of our
business as a going concern and the growth in cash flows. As a
result, in the event of a default under our new credit facility
or 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>

<P align="left">
<B><FONT size="2">Deferral of interest payments would have
adverse tax consequences for you and may adversely affect the
trading price of the senior subordinated notes.</FONT></B>

<P align="left">
<FONT size="2">If we defer interest payments on the senior
subordinated notes, you will be required to recognize interest
income for United States federal income tax purposes in respect
of the senior subordinated notes before you receive any cash
payment of this interest. In addition, we will not pay you this
cash if you sell the IDSs or the 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.
</FONT>

<P align="left">
<FONT size="2">The IDSs or the 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 if
we defer interest payments. In addition, the requirement that we
defer payments of interest on the senior subordinated notes
under certain circumstances may mean that the market price for
the IDSs or the senior subordinated notes may be more volatile
than other securities that do not have this requirement.
</FONT>

<P align="center"><FONT size="2">28
</FONT>
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<P align="left">
<B><FONT size="2">Because of the subordinated nature of the
senior subordinated notes, holders of our senior subordinated
notes may not be entitled to be paid in full, if at all, in a
bankruptcy, liquidation or reorganization or similar
proceeding.</FONT></B>

<P align="left">
<FONT size="2">As a result of the subordinated nature of our
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 us or the subsidiary guarantors or our or their
property, the holders of our 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 our senior subordinated notes or the subsidiary guarantees.
</FONT>

<P align="left">
<FONT size="2">In the event of a bankruptcy, liquidation or
reorganization or similar proceeding relating to us or the
subsidiary guarantors, holders of our senior subordinated notes
will participate with all other holders of unsecured
indebtedness of ours or the subsidiary guarantors that are
similarly subordinated in the assets remaining after we and the
subsidiary guarantors have paid all senior indebtedness. In any
of these cases, we and the subsidiary guarantors may not have
sufficient funds to pay all of our creditors. Holders of our
senior subordinated notes may, therefore, receive less, ratably,
than the holders of our senior indebtedness.
</FONT>

<P align="left">
<FONT size="2">On a pro forma basis as of December&nbsp;31,
2003, our senior subordinated notes and the subsidiary
guarantees would have ranked junior, on a consolidated basis, to
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of outstanding senior secured indebtedness plus approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of letters of credit and the subsidiary guarantees would have
ranked junior to no senior unsecured debt and <I>pari passu
</I>with approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of outstanding indebtedness of ours and the subsidiary
guarantors. In addition, as of December&nbsp;31, 2003, on a pro
forma basis, we would have had the ability to borrow up to an
additional amount of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
under the new credit facility (less amounts reserved for letters
of credit), which would have ranked senior in right of payment
to our senior subordinated notes. If any of the
$110.0&nbsp;million in our existing senior subordinated notes
are not tendered to us by the closing of this offering, such
notes will rank <I>pari&nbsp;passu</I> to our senior
subordinated notes and the subsidiary guarantees until such time
as we redeem such notes.
</FONT>

<P align="left">
<FONT size="2">In the event of a bankruptcy, liquidation or
reorganization or similar proceeding of any of the non-guarantor
subsidiaries, holders of their indebtedness, including their
trade creditors, would generally be entitled to payment of their
claims from the assets of those subsidiaries before any assets
are made available for distribution to us for payment to you.
</FONT>

<P align="left">
<FONT size="2">Holders of our senior subordinated notes will be
structurally subordinated to the debt of our non-guarantor
subsidiaries.
</FONT>

<P align="left">
<B><FONT size="2">In the event of bankruptcy or insolvency, the
senior subordinated notes could be equitably subordinated or
recharacterized as equity.</FONT></B>

<P align="left">
<FONT size="2">In the event of bankruptcy or insolvency, a party
in interest may seek to subordinate the senior subordinated
notes under principles of equitable subordination or to
recharacterize the senior subordinated notes as equity. While we
believe that any such attempt should fail, there can be no
assurance as to the outcome of such proceedings. In the event a
court subordinates the senior subordinated notes or
recharacterizes them as equity, we cannot assure you that you
would recover any amounts owed on the senior subordinated notes
and you may be required to return any payments made to you on
account of the senior subordinated notes, potentially for up to
six years prior to our bankruptcy. In addition, should the court
recharacterize the senior subordinated notes as equity you may
not be able to enforce the guaranties.
</FONT>

<P align="left">
<B><FONT size="2">The guarantees of the senior subordinated
notes by our subsidiaries may be unenforceable.</FONT></B>

<P align="left">
<FONT size="2">Under federal bankruptcy law and comparable
provisions of state fraudulent transfer laws, a guarantee could
be voided, or claims in respect of a guarantee could be
subordinated to all other debt of the guarantor, if, among other
things, the guarantor, at the time that it assumed the guarantee:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">issued the guarantee to delay, hinder or defraud
    present or future creditors;
    </FONT></TD>
</TR>

<TR>
    <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 guarantee and, at the time it
    issued the guarantee;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">29
</FONT>
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<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">was insolvent or rendered insolvent by reason of
    issuing the guarantee and the application of the proceeds of the
    guarantee;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">was engaged or about to engage in a business or a
    transaction for which the guarantor&#146;s remaining assets
    available to carry on its business constituted unreasonably
    small capital;
    </FONT></TD>
</TR>

<TR>
    <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 it would
    incur, debts beyond its ability to pay the debts as they
    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">was a defendant in an action for money damages,
    or had a judgment for money damages docketed against it if, in
    either case, after final judgment, the judgment is unsatisfied.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">In addition, any payment by the guarantor under
its guarantee could be voided and required to be returned to the
guarantor or to a fund for the benefit of the creditors of the
guarantor or the guarantee could be subordinated to other debt
of the guarantor.
</FONT>

<P align="left">
<FONT size="2">What constitutes insolvency for the purposes of
fraudulent transfer laws varies depending upon the law applied
in any proceeding to determine if a fraudulent transfer has
occurred. Generally, however, a person would be considered
insolvent if, at the time such person incurred the debt:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></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 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">
<FONT size="2">We believe that immediately after the issuance of
the senior subordinated notes and the guarantees, we and each of
the guarantors will be solvent, have sufficient capital to carry
on our respective businesses and be able to pay our respective
debts as they mature. We cannot be sure, however, as to what
standard a court would apply in making these determinations or
that a court would reach the same conclusions with regard to
these issues. Regardless of the standard that the court uses, we
cannot be sure that the issuance by the subsidiary guarantors of
the subsidiary guarantees would not be voided or the subsidiary
guarantees would not be subordinated to their other debt.
</FONT>

<P align="left">
<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 Alliance
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
holders of the senior subordinated notes. If the guarantee of
any subsidiary guarantor were voided, our senior subordinated
notes would be effectively subordinated to the indebtedness and
other credit obligations of that subsidiary guarantor.
</FONT>

<P align="left">
<B><FONT size="2">The United States federal income tax
consequences of the purchase, ownership and disposition of IDSs
and senior subordinated notes are uncertain.</FONT></B>

<P align="left">
<FONT size="2">No statutory, judicial or administrative
authority directly addresses the treatment of the IDSs or the
senior subordinated notes, or instruments similar to the IDSs or
the senior subordinated notes, for United States federal income
tax purposes. As a result, the United States federal income tax
consequences of the purchase, ownership and disposition of IDSs
and the senior subordinated notes are uncertain. Based on the
opinion of tax counsel, we believe that an IDS should be treated
as a unit representing a share of common stock and senior
subordinated notes, and that the senior subordinated notes
should be classified as debt for United States federal income
tax purposes and we intend to deduct interest on such senior
subordinated notes for tax purposes. However, the IRS or the
courts may take the position that the IDSs are a single security
classified as equity, or that the senior subordinated notes are
properly classified as equity for United States federal income
tax purposes, which could adversely affect the amount, timing
and character
</FONT>

<P align="center"><FONT size="2">30
</FONT>
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<DIV align="left">
<FONT size="2">of income, gain or loss in respect of your
investment in IDSs or senior subordinated notes, and materially
increase our taxable income and, thus, our United States federal
and applicable state income tax liability. 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 notes and the common stock and may
affect our ability to continue as a going concern. Our tax
deduction for interest may be put at risk in the future as a
result of a future ruling by the IRS, including an adverse
ruling for other IDSs or an adverse ruling for our own IDSs and
in the event of any such ruling, we may need to consider the
effect of such developments on the determination of our future
tax provisions and obligations. Foreign holders could be subject
to withholding or estate taxes with regard to the senior
subordinated notes in the same manner as they will be with
regard to the common stock. Payments to foreign holders would
not be grossed-up for any such taxes. For discussion of these
tax-related risks, see &#147;Material United States Federal
Income Tax Consequences.&#148;
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">The allocation of the purchase price of the
IDSs may not be respected.</FONT></B>

<P align="left">
<FONT size="2">The purchase price of each IDS must be allocated
for tax purposes between the share of common stock and senior
subordinated notes comprising the IDS in proportion to their
respective fair market values at the time of purchase. If our
allocation is not respected, then it is possible that the senior
subordinated notes will be treated as having been issued with
original issue discount, or 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 be required 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>

<P align="left">
<B><FONT size="2">The IRS may not view the interest rate on the
senior subordinated notes as an arm&#146;s length
rate.</FONT></B>

<P align="left">
<FONT size="2">We plan to deduct the interest expense on the
senior subordinated notes from taxable income for income tax
purposes and to report the full benefit of the income tax
deductions in our consolidated financial statements. If the IRS
were to determine that the interest rate on the senior
subordinated notes did not represent an arm&#146;s length rate,
then any excess of the amount paid on the senior subordinated
notes over the arm&#146;s length rate would not be deductible
and could be recharacterized as a dividend payment instead of an
interest payment. In addition, the reclassification of interest
payments as dividend payments may give rise to an event of
default under our new credit facility. In such case, our taxable
income and thus, our United States federal income tax liability
could be materially increased and we would have to provide an
additional liability in our consolidated financial statements
for the previously recorded benefit for the interest deductions.
In addition, foreign holders could be subject to withholding
taxes with regard recharacterized amounts in the same manner as
they will be with regard to dividends paid on the common stock.
If the interest rate on the senior subordinated notes were
determined to be less than an arm&#146;s length rate, the senior
subordinated notes could be treated as issued with OID, which
you would be required to include in income over the term of the
senior subordinated notes in advance of the receipt of cash
attributable to that income.
</FONT>

<P align="left">
<B><FONT size="2">Because of the deferral of interest
provisions, the senior subordinated notes may be treated as
issued with OID.</FONT></B>

<P align="left">
<FONT size="2">Under applicable Treasury regulations, a
&#147;remote&#148; contingency that stated interest will not be
timely paid is disregarded in determining whether a debt
instrument is issued with OID. Although there is no authority
directly on point, based on our financial forecasts, we believe
that the likelihood of deferral of interest payments on the
senior subordinated notes is remote within the meaning of the
Treasury regulations. Based on the foregoing, although the
matter is not free from doubt because of the lack of direct
authority, the senior subordinated notes should not be
considered to be issued with OID at the time of their original
issuance. 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="center"><FONT size="2">31
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<P align="left">
<B><FONT size="2">If we subsequently issue senior subordinated
notes with significant OID, we may be unable to deduct all of
the interest on those senior subordinated notes.</FONT></B>

<P align="left">
<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 treated, a portion of the OID on such notes would
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
shareholders.
</FONT>

<P align="left">
<B><FONT size="2">Subsequent issuances of senior subordinated
notes may cause you to recognize taxable gain and/or OID and may
reduce your recovery in the event of bankruptcy.</FONT></B>

<P align="left">
<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) are unclear. In the future, we may issue senior
subordinated notes underlying IDSs in exchange for shares of our
preferred stock. The indenture governing the senior subordinated
notes and the agreements with DTC will provide that, in the
event that there is a subsequent issuance of senior subordinated
notes having terms substantially identical to the senior
subordinated notes offered hereby, each holder of senior
subordinated notes or IDSs, as the case may be, agrees that 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.
</FONT>

<P align="left">
<FONT size="2">The aggregate stated principal amount of senior
subordinated notes owned by you and each other holder will not
change as a result of such subsequent issuance and exchange.
However, under applicable law, it is possible that the holders
of subsequently issued senior subordinated notes (to the extent
issued with OID) will not be entitled to a claim for the portion
of their principal amount that represents unaccrued OID in the
event of an acceleration of the senior subordinated notes or a
bankruptcy proceeding occurring prior to the maturity of the
senior subordinated notes. 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 United States 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 United
States 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. In such case, you would recognize
any gain realized on the exchange, but a loss realized might be
disallowed in which case your basis in the subsequently issued
senior subordinated notes would be increased to reflect the
amount of the disallowed loss.
</FONT>

<P align="left">
<FONT size="2">Regardless of whether the exchange is treated as
a taxable event, such exchange may result in an increase in the
amount of OID, if any, that you are required to accrue with
respect to 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 senior
subordinated notes or IDSs, as the case may be, agree to report
OID in a manner consistent with this approach. Consequently, you
may be required to report OID as a result of a subsequent
issuance (even though you purchased senior subordinated notes
having no OID). This will generally result in you reporting more
interest income over the term of the senior subordinated notes
than you would have reported had no such subsequent issuance and
exchange occurred. 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 case, the IRS might further assert that,
unless a holder can establish that it is
</FONT>

<P align="center"><FONT size="2">32
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<DIV align="left">
<FONT size="2">not such a person (or a transferee thereof), all
of the senior subordinated notes held by such holder will 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.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Before this offering, there has not been a
public market for our IDSs, shares of our Class&nbsp;A common
stock or senior subordinated notes. The price of the IDSs may
fluctuate substantially, which could negatively affect
IDS&nbsp;holders.</FONT></B>

<P align="left">
<FONT size="2">None of the IDSs, the shares of our Class&nbsp;A
common stock or the senior subordinated notes has a public
market history. In addition, there has not been an established
market in the United States for securities similar to the IDSs.
We cannot assure you that an active trading market for the IDSs
will develop in the future, and we currently do not expect that
an active trading market for the shares of our Class&nbsp;A
common stock will develop until the senior subordinated notes
are redeemed or mature. 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
Class&nbsp;A common stock. We do not intend to list our senior
subordinated notes on any securities exchange.
</FONT>

<P align="left">
<FONT size="2">The initial public offering price of the IDSs has
been determined by negotiations among us, the existing equity
investors and the representatives of the underwriters and may
not be indicative of the market price of the IDSs after the
offering. Factors such as quarterly variations in our financial
results, 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 to fluctuate significantly.
</FONT>

<P align="left">
<B><FONT size="2">Future sales or the possibility of future
sales of a substantial amount of IDSs, shares of our common
stock or our senior subordinated notes may depress the price of
the IDSs and the shares of our common stock and our senior
subordinated notes.</FONT></B>

<P align="left">
<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 our senior subordinated notes in
the public market could adversely affect the prevailing market
price of the IDSs and the shares of our common stock and senior
subordinated notes and could impair our ability to raise capital
through future sales of our securities.
</FONT>

<P align="left">
<FONT size="2">We may issue shares of our common stock and
senior subordinated notes, which may 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="left">
<B><I><FONT size="2">Risks Relating to our Business and the
Industry</FONT></I></B>

<P align="left">
<B><FONT size="2">Energy efficiency and water usage standards
could adversely affect our industry.</FONT></B>

<P align="left">
<FONT size="2">Certain of our washer products are subject to
federal and state laws and regulations which pertain to energy
efficiency and/or water usage. There is a federal standard for
residential clothes washers. Individual U.S.&nbsp;states are
currently considering, and enacting, laws and corresponding
standards which endeavor to regulate energy efficiency for
certain of our commercial washers, as well as water usage
standards for certain of our residential and commercial washers.
</FONT>

<P align="left">
<FONT size="2">There can be no assurance that if these, and
anticipated energy efficiency and water usage laws and
corresponding standards create short term market conditions
which are economically disadvantageous, they will not have a
material adverse effect on our business, financial condition and
results of operations.
</FONT>

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

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<P align="left">
<B><FONT size="2">Price fluctuations or shortages of raw
materials and the possible loss of suppliers could adversely
affect our operations.</FONT></B>

<P align="left">
<FONT size="2">The major raw materials and components we
purchase for our production process are motors, stainless and
carbon steel, aluminum castings, electronic controls, corrugated
boxes and plastics. The price and availability of these raw
materials and components are subject to market conditions
affecting supply and demand. There can be no assurance that
increases in raw material or component costs (to the extent we
are unable to pass on such higher costs to customers) or future
price fluctuations in raw materials will not have a material
adverse effect on our business, financial condition and results
of operations. In addition, there can be no assurance that the
loss of suppliers or of components would not have a material
adverse effect on our business, financial condition and results
of operations. We currently do not hedge commodities associated
with payments for purchased raw materials and components.
</FONT>

<P align="left">
<B><FONT size="2">Our net revenues depend on a limited number of
significant customers.</FONT></B>

<P align="left">
<FONT size="2">Our top ten equipment customers accounted for
approximately 35.8% of our 2003&nbsp;net revenues, of which one
customer, Coinmach Corporation and its subsidiary, Super Laundry
Equipment Corp., accounted for approximately 15.8% of such net
revenues for the period. Many arrangements are by purchase order
and are terminable at will at the option of either party. Our
business also depends upon the financial viability of our
customers. A significant decrease or interruption in business
from our significant customers could result in loss of future
business and could have a material adverse effect on our
business, financial condition and results of operations.
</FONT>

<P align="left">
<B><FONT size="2">Our inability to fund our financing programs
to end-customers could result in the loss of sales and adversely
affect our operations.</FONT></B>

<P align="left">
<FONT size="2">We offer an extensive financing program to
end-customers, primarily laundromat owners, to assist them in
their purchases of new equipment from our distributors or, in
the case of route operators, from us. Typical terms include two
to nine year loans with an average principal amount of
approximately $75,000. We provide these financing programs
through our asset backed facility, which is a three year
$300.0&nbsp;million revolving facility entered into by Alliance
Laundry Equipment Receivables Trust 2002-A, a trust formed by
one of our special purpose bankruptcy remote subsidiaries, and
backed by equipment loans and trade receivables originated by
us. The trust is utilized to finance both equipment loans and
trade receivables. If certain limits in size of the asset backed
facility are reached (either overall size or certain sublimits),
additional indebtedness may be required to fund the financing
programs. Our inability to incur such indebtedness to fund the
financing programs or our inability to securitize such assets
through off-balance sheet bankruptcy remote subsidiaries could
limit our ability to provide our end-customers with financing
which could result in the loss of sales and have a material
adverse effect on our business, financial condition and results
of operations. In addition, a significant increase in the cost
of funding our financing subsidiaries could have a material
adverse effect on our business, financial condition and results
of operations.
</FONT>

<P align="left">
<B><FONT size="2">We operate in a competitive market.</FONT></B>

<P align="left">
<FONT size="2">Within the North American stand alone commercial
laundry equipment industry, we compete with several large
competitors. With respect to laundromats, our principal
competitors include Wascomat (the exclusive North American
distributor of Electrolux AB&nbsp;products), Maytag Corporation
and The Dexter Company. In multi-housing, key competitors
include Maytag Corporation and Whirlpool Corporation. In
on-premise laundry, we compete primarily with Pellerin Milnor
Corporation, American Dryer Corporation and Wascomat. There can
be no assurance that significant new competitors or increased
competition from existing competitors will not have a material
adverse effect on our business, financial condition and results
of operations. Certain of our principal competitors have greater
financial resources and/or are less leveraged than us and may be
better able to withstand market conditions within the commercial
laundry equipment industry. There can be no assurance that we
will not encounter increased competition in the future, which
could have a material adverse effect on our business, financial
condition and results of operations.
</FONT>

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<P align="left">
<FONT size="2">In addition, we may face competition from
companies outside of the United States that may have lower costs
of production (including labor or raw materials). These
companies may pass off these lower production costs as price
decreases for customers and as a result, our revenues and
profits could be adversely affected.
</FONT>

<P align="left">
<B><FONT size="2">Our business is subject to the economic and
political risks of selling products in foreign
countries.</FONT></B>

<P align="left">
<FONT size="2">Sales of equipment to international customers
represented approximately 12.7% of our 2003&nbsp;net revenues.
Demand for our products are and may be affected by economic and
political conditions in each of the countries in which we sell
our products and by certain other risks of doing business
abroad, including fluctuations in the value of currencies (which
may affect demand for products priced in United States dollars),
import duties, changes to import and export regulations
(including quotas), possible restrictions on the transfer of
funds, labor or civil unrest, long payment cycles, greater
difficulty in collecting accounts receivable and the burdens and
cost of compliance with a variety of foreign laws. Changes in
policies by foreign governments could result in, for example,
increased duties, higher taxation, currency conversion
limitations or limitations on imports or exports, any of which
could have a material adverse effect on our business, financial
condition and results of operations. We do not, and currently do
not intend to hedge exchange rate fluctuations between United
States dollars and foreign currencies associated with payments
for equipment and service parts&nbsp;sales.
</FONT>

<P align="left">
<B><FONT size="2">We are dependent on key personnel.</FONT></B>

<P align="left">
<FONT size="2">We are dependent on the continued services of our
senior management team and certain other key employees. Other
than for chief executive officer, Thomas L&#146;Esperance, we do
not maintain employment agreements with senior management and we
do not maintain life insurance policies with respect to key
employees. The employment agreement entered into with
Mr.&nbsp;L&#146;Esperance in May 1998 was amended on
July&nbsp;23, 2003 to renew for additional one-year periods from
May&nbsp;4, 2004 forward, unless we or Mr.&nbsp;L&#146;Esperance
provides written notice not to renew the agreement. The loss of
such key employees could have a material adverse effect on our
business, financial condition and results of operations and
could lead to reduced distribution on our capital stock.
</FONT>

<P align="left">
<B><FONT size="2">Adverse relations with employees could harm
our business.</FONT></B>

<P align="left">
<FONT size="2">As of December&nbsp;31, 2003, approximately 639
of our employees at our Wisconsin facilities were represented by
The United Steel Workers of America. We are periodically in
negotiations with The United Steel Workers of America. The
current collective bargaining agreement covering employees at
our Wisconsin facilities was approved in February 2004 and
expires on February&nbsp;28, 2009. Although we expect to renew
the existing agreement upon its expiration or negotiate a new
agreement without a work stoppage and believe that our relations
with our union employees are generally good, there can be no
assurance that we can successfully negotiate a new agreement or
that work stoppages by certain employees will not occur. Any
such work stoppages could have a material adverse effect on our
business, financial condition and results of operations.
</FONT>

<P align="left">
<B><FONT size="2">Beginning in December 2005, we will be unable
to continue our off-balance sheet facility. If we are unable to
refinance this facility, this may have an adverse impact on our
business.</FONT></B>

<P align="left">
<FONT size="2">If we are unable to refinance or replace the
facility prior to December&nbsp;2005, it could also have a
material adverse effect on our business, financial condition and
results of operations, including our revenues and EBITDA and
leverage. In 2003, our financing program contributed
approximately $9.7 million, or approximately 17%, to our
Adjusted EBITDA. As of December&nbsp;31, 2003, the amount due to
lenders under our asset backed facility for trade receivables
was $31.8&nbsp;million. If we are unable to refinance or replace
the facility, among other things, our EBITDA could decrease over
time due to the loss in revenue generated by new financings and
our leverage could increase as a result of having to finance
accounts receivables on our balance sheet. CIBC World Markets
Corp. (or one of its affiliates) is a lender and
co-administrative agent under our asset backed facility. We have
been advised by CIBC World Markets Corp. that it and its
affiliates are in the process of exiting certain structured
finance businesses and transactions and winding down or selling
CIBC&#146;s U.S., United Kingdom, and Australian based
receivables conduit
</FONT>

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

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<DIV align="left">
<FONT size="2">vehicles, and, as a result, will not be able to
act as a lender under any replacement facility or participate in
any refinancing of the facility.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">The nature of our business exposes us to
potential liability for environmental claims and we could be
adversely affected by environmental and safety
requirements.</FONT></B>

<P align="left">
<FONT size="2">We are subject to comprehensive and frequently
changing federal, state and local environmental and occupational
health and safety laws and regulations, including laws and
regulations governing emissions of air pollutants, discharges of
waste and storm water and the disposal of hazardous wastes. We
are also subject to liability for the investigation and
remediation of environmental contamination (including
contamination caused by other parties) at the properties we own
or operate and at other properties where we or our predecessors
have arranged for the disposal of hazardous substances. As a
result, we are involved, from time to time, in administrative
and judicial proceedings and inquiries relating to environmental
matters. There can be no assurance that we will not be involved
in such proceedings in the future and that the aggregate amount
of future clean-up costs and other environmental liabilities
will not have a material adverse effect on our business,
financial condition and results of operations. We believe that
our facilities and operations are in material compliance with
all environmental, health and safety&nbsp;laws.
</FONT>

<P align="left">
<FONT size="2">Federal, state and local governments could enact
laws or regulations concerning environmental matters that affect
our operations or facilities or increase the cost of producing,
or otherwise adversely affect the demand for, our products. We
cannot predict the environmental liabilities that may result
from legislation or regulations adopted in the future, the
effect of which could be retroactive. Nor can we predict how
existing or future laws and regulations will be administered or
interpreted or what environmental conditions may be found to
exist at our facilities or at other properties where we or our
predecessors have arranged for the disposal of hazardous
substances. The enactment of more stringent laws or stricter
interpretation of existing laws could require expenditures by
us, some of which could have a material adverse effect on our
business, financial condition and results of operations. With
respect to the Marianna, Florida facility, a former owner of the
property has agreed to indemnify us for certain environmental
liabilities. In the event that the former owner fails to honor
its obligations under the indemnification, such liabilities
could be borne directly by us and could be material.
</FONT>

<P align="left">
<FONT size="2">Certain environmental investigatory and remedial
work is underway or planned at, or relating to, subsurface
environmental contamination with respect to our Marianna,
Florida and Ripon, Wisconsin manufacturing facilities. With
respect to the Marianna facility, this work is being conducted
by a former owner of the property pursuant to an indemnity
agreement and is being funded through an escrow account, the
available balance of which we believe to be substantially
greater than the remaining remediation costs. With respect to
the Ripon facility, this work will be conducted by us. We
currently expect to incur costs of less than $100,000 through
2004 at the Ripon facility to complete remedial work. There can
be no assurance, however, that significant additional remedial
costs will not be incurred by us in the future with respect to
the Marianna, Ripon or other facilities.
</FONT>

<P align="left">
<FONT size="2">Our operations are also subject to various
hazards incidental to the manufacturing and transportation of
commercial laundry equipment. These hazards can cause personal
injury and damage to and destruction of property and equipment.
There can be no assurance that as a result of past or future
operations, there will not be claims of injury by employees or
members of the public. Furthermore, we also have exposure to
present and future claims with respect to worker safety,
workers&#146; compensation and other matters. There can be no
assurance as to the actual amount of these liabilities or the
timing of them. Regulatory developments requiring changes in
operating practices or influencing demand for, and the cost of
providing, our products and services or the occurrence of
material operational problems, including but not limited to the
above events, may also have a material adverse effect on our
business, financial condition and results of operations.
</FONT>

<P align="left">
<FONT size="2">For a discussion of these risks, see
&#147;Business&#151; Regulation and Laws&#151; Environmental,
Health and Safety Matters.&#148;
</FONT>

<P align="center"><FONT size="2">36
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<P align="left">
<B><FONT size="2">We are subject to risks of future legal
proceedings.</FONT></B>

<P align="left">
<FONT size="2">At any given time, we are a defendant in various
legal proceedings and litigation arising in the ordinary course
of business. We maintain insurance policies with insurers in
amounts and with coverages and deductibles that we believe are
reasonable and prudent. However, we can make no assurance that
this insurance will be adequate to protect us from all material
expenses related to potential future claims for personal and
property damage or that these levels of insurance will be
available in the future at economical prices. A significant
judgment against us, the loss of a significant permit or other
approval or the imposition of a significant fine or penalty
could have a material adverse effect on our business, financial
condition and future prospects.
</FONT>

<P align="left">
<B><FONT size="2">Interest and foreign exchange rate
fluctuations could have an adverse effect on our revenues and
financial results.</FONT></B>

<P align="left">
<FONT size="2">From time to time, we hedge exchange rate
fluctuations between United States dollars and foreign
currencies for purchases of inventory components. Such amounts
are not material to our operations. Additionally, from time to
time, we may enter into derivative financial instruments to
hedge our interest rate exposures. We do not enter into
derivatives for speculative purposes. We currently do not hedge
commodities for purchased raw materials and components.
</FONT>

<P align="left">
<FONT size="2">Revenue from international customers represented
approximately 12.7% of 2003&nbsp;net revenues. At
December&nbsp;31, 2003, there were no material non-United States
dollar denominated financial instruments outstanding which
exposed us to foreign exchange risk.
</FONT>

<P align="left">
<FONT size="2">As noted above, we are exposed to market risk
associated with adverse movements in interest rates.
Specifically, we are primarily exposed to changes in the fair
value of our $110.0&nbsp;million senior subordinated notes, and
to changes in earnings and related cash flows on our variable
interest rate debt obligations outstanding under the new credit
facility and our retained interests related to trade accounts
receivable and equipment loans sold to our special-purpose
securitization entities. Borrowings outstanding under the
existing senior credit facility totaled $157.0&nbsp;million at
December&nbsp;31,&nbsp;2003.
</FONT>

<P align="left">
<FONT size="2">The fair value of our senior subordinated notes
was approximately $110.6&nbsp;million based upon prevailing
prices in recent market transactions as of December&nbsp;31,
2003. We estimate that this fair value would increase/decrease
by approximately $3.7&nbsp;million based upon an assumed 10%
decrease/increase in interest rates compared with the effective
yield on the senior subordinated notes as of
December&nbsp;31,&nbsp;2003.
</FONT>

<P align="left">
<B><FONT size="2">An assumed 10% increase/decrease in the
variable interest rate of 4.7% in effect at December&nbsp;31,
2003 related to the term loan borrowings outstanding under the
existing senior credit facility would decrease/increase
annualized earnings and cash flows by approximately
$1.0&nbsp;million.</FONT></B>

<P align="left">
<FONT size="2">On December&nbsp;12, 2002, we entered into an
$80.0&nbsp;million interest rate swap agreement with Lehman
Brothers Special Financing Inc. to hedge a portion of our
interest rate risk related to our term loan borrowings under the
existing senior credit facility. Under the swap, which matures
on January&nbsp;6, 2006, we pay a fixed rate of 3.06%, and
receive or pay quarterly interest payments based upon
three&nbsp;month LIBOR. Under the swap, net cash interest paid
during 2003 was $1.1&nbsp;million. The fair value of this
interest rate swap agreement, which represents the amount that
we would pay to settle the instrument, was $1.9&nbsp;million at
December&nbsp;31, 2003.
</FONT>

<P align="left">
<FONT size="2">An assumed 10% increase/decrease in interest
rates under our special-purpose entities at December&nbsp;31,
2003 would not have a material effect on the fair value of the
retained interest in sold trade accounts receivable due to the
short-term nature of the underlying receivables. Finally, based
upon the mix of variable and fixed rate equipment loans we have
sold, a 10% increase/decrease in interest rates would
decrease/increase the fair value of our retained interests at
December&nbsp;31, 2003 of $22.7&nbsp;million by approximately
$0.5&nbsp;million.
</FONT>

<P align="center"><FONT size="2">37
</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">Our amended and restated certificate of
incorporation and bylaws 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></B>

<P align="left">
<FONT size="2">A number of provisions in our amended and
restated certificate of incorporation and amended and restated
bylaws will make it difficult for another company to acquire us
and for you to receive any related takeover premium for your
securities. For example, our amended and restated certificate of
incorporation will provide that stockholders generally may not
act by written consent and only stockholders representing at
least &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
in voting power may request that our board of directors call a
special meeting. In addition, our ability to merge or
consolidate with any other person or, directly or indirectly,
sell all or substantially all our assets is subject to the
approval of a supermajority of our directors. Our amended and
restated certificate of incorporation authorizes the issuance of
preferred stock without stockholder approval and upon such terms
as the board of directors may determine. The rights of the
holders of shares of our common stock will be subject to, and
may be adversely affected by, the rights of holders of any class
or series of preferred stock that may be issued in the future.
</FONT>

<P align="center"><FONT size="2">38
</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='103'></A>
</DIV>

<!-- link1 "Cautionary Statement Regarding Forward-Looking Statements" -->

<P align="center">
<B>Cautionary Statement Regarding Forward-Looking Statements</B>

<P align="left">
<FONT size="2">Some of the statements under &#147;Summary,&#148;
&#147;Risk Factors,&#148; &#147;Management&#146;s Discussion and
Analysis of Financial Condition and Results of Operations,&#148;
&#147;Business&#148; and elsewhere in this prospectus may
include forward-looking statements which reflect our current
views with respect to future events and financial performance.
Statements which include the words &#147;expect,&#148;
&#147;intend,&#148; &#147;plan,&#148; &#147;believe,&#148;
&#147;project,&#148; &#147;anticipate&#148; and similar
statements of a future or forward-looking nature identify
forward-looking statements for purposes of the federal
securities laws or otherwise.
</FONT>

<P align="left">
<FONT size="2">All forward-looking statements address matters
that involve risks and uncertainties. Accordingly, there are or
will be important factors that could cause actual results to
differ materially from those indicated in these statements. We
believe that these factors include the following:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">continued sales to key customers;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">possible fluctuations in the cost of raw
    materials and components;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">possible fluctuations in currency exchange rates,
    which affect the competitiveness of our products abroad;
    </FONT></TD>
</TR>

<TR>
    <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 impact of substantial leverage and debt
    service on 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">possible loss of suppliers;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">risks related to asset backed 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">dependence on key 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">labor relations;&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">potential liability for environmental, health and
    safety matters.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">We undertake no obligation to publicly update or
review any forward-looking statement, whether as a result of new
information, future developments or otherwise.
</FONT>

<P align="center"><FONT size="2">39
</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='104'></A>
</DIV>

<!-- link1 "Use of Proceeds" -->

<P align="center">
<B>Use of Proceeds</B>

<P align="left">
<FONT size="2">We estimate that we will receive net proceeds
from this offering of approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
after deducting underwriting discounts and commissions and other
estimated offering expenses payable by us. We will use these net
proceeds, together with
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of borrowings under our new credit facility and cash and cash
equivalents, which we refer to in the aggregate as the
&#147;aggregate cash sources&#148; as follows:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></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;million
    to repurchase all of our existing senior subordinated notes in
    the tender offer or through a redemption and to repay all
    outstanding borrowings under the existing 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">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    to repay amounts outstanding under the junior 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">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    to redeem the mandatorily redeemable preferred membership
    interests in our predecessor held by affiliates of Trust Company
    of the West and affiliates of Sankaty Advisors;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">funding
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    as working capital; 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 repurchase our existing equity investors&#146;
    remaining equity interest in our predecessor. Based on account
    balances reflected on
    our &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2004 balance sheet, we expect that such remaining aggregate cash
    sources would have been approximately
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.
    Assuming this offering and all related transactions described in
    this prospectus had been consummated
    on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2004, such aggregate cash sources would have been
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">We will not receive any of the proceeds from the
underwriters&#146; exercise of their over-allotment option.
</FONT>

<P align="left">
<FONT size="2">Borrowings under the existing term loan facility
bear interest, at our election, at either the lender&#146;s
&#147;base rate&#148; (as defined in the existing senior credit
facility documents) plus a margin of 2.5% or the
&#147;Eurodollar rate&#148; (as defined in the existing senior
credit facility documents) plus a margin of 3.5%. Borrowings
under the existing revolving credit facility bear interest, at
our election, at either the &#147;base rate&#148; plus a margin
ranging from 1.5% to 2.5% or the &#147;Eurodollar rate&#148;
plus a margin ranging from 2.5% to 3.5%. The interest rate on
term loan borrowings outstanding at December&nbsp;31, 2003 and
2002 was 4.7% and 5.3%, respectively. Our existing senior
subordinated notes bear interest at 9&nbsp;5/8%&nbsp;per year
and are due in 2008. Our junior notes bear interest at the rate
of 19.0%&nbsp;per annum until the eighth anniversary of the date
of issuance of the junior notes and at a rate of 13.0%
thereafter and mature on August&nbsp;21, 2009. Our preferred
membership interests are redeemable at a redemption price of
$6.0&nbsp;million upon a change of control or certain other
liquidity events.
</FONT>

<P align="center"><FONT size="2">40
</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">
<FONT size="2">The table below sets forth our estimate of the
sources and uses of funds required to effect the transactions
described in this prospectus. The estimated sources and uses are
based on an assumed closing date
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004.
</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="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="72%"><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" align="center" nowrap><B><FONT size="1">Sources</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 colspan="3" align="center" nowrap><FONT size="1">(In millions)</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
    </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">New 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>
    <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">New term 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>
    <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">New revolving 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>
    <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>
    <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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Senior subordinated notes sold hereby separately
    </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">
    <FONT size="2">Total sources of funds
    </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"><FONT 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">Repayment of existing credit facility
    </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">Purchase of our existing senior subordinated
    notes in the tender offer and consent solicitation (including
    accrued and unpaid 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="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Repayment of junior 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="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><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">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="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Funding 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>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds to existing equity investors(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 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">
    <FONT size="2">Total uses of funds
    </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"><FONT 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="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The proceeds to our existing equity investors
    shown on the table above does not include IDSs, Class B common
    stock and preferred stock that we are issuing to them in this
    offering in connection with our reorganization. These IDSs have
    an aggregate value of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    based on an assumed initial public offering price of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    the Class B common stock has an assumed initial aggregate value
    of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
    and the preferred stock has an aggregate value of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.
    In addition, if the underwriters&#146; over-allotment option is
    exercised in full, existing equity investors will offer an
    aggregate
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs
    to the public and will receive all proceeds from the sale
    thereof, less any underwriters&#146; discount and commissions.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">41
</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='105'></A>
</DIV>

<!-- link1 "Dividend Policy and Restrictions" -->

<P align="center">
<B>Dividend Policy and Restrictions</B>

<P align="left">
<FONT size="2">Upon the closing of this offering, our board of
directors is expected to adopt a dividend policy pursuant to
which, in the event and to the extent we have any available cash
for distribution to the holders of shares of our Class&nbsp;A
common stock as of
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;day
of &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;&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;and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
each year, or the business day immediately preceding such day,
subject to applicable law, as described below, and the terms of
the new credit facility, the indenture governing our senior
subordinated notes and any other then outstanding indebtedness
of ours, our board of directors will declare cash dividends on
our Class&nbsp;A common stock. The initial dividend rate is
expected to be equal to
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share of Class&nbsp;A common stock per annum, subject to
adjustment. We will pay those dividends on or about the last day
of &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;&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;and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
each year. Any time a dividend is paid to holders of Class A
common stock, holders of Class B common stock will be paid a
dividend equal to the amount per share paid to holders of Class
A common stock.
</FONT>

<P align="left">
<FONT size="2">In addition to any such dividend, holders of
shares of our preferred stock will be entitled to receive
cumulative dividends which will accrue at a rate
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;per annum on the deemed
issuance price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share; provided that during the continuation of any event of
default under the indenture governing the senior subordinated
notes, dividends will accrue at a rate
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;per annum. Such
dividends will accrue, and to the extent not paid, accumulate,
whether or not declared and whether or not we have funds legally
available for the payment of dividends. Such dividends will be
paid, if declared by the board,
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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;and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
each year or, to the extent not previously paid, at such time as
such shares of preferred stock together with the Class B common
stock are exchanged for IDSs; provided that such dividends may
only be paid to the extent allowable under applicable law, the
terms of our new credit facility and the indenture governing our
senior subordinated notes.
</FONT>

<P align="left">
<FONT size="2">Upon the closing of the offering no shares of our
Class&nbsp;C common stock will be outstanding and we do not
anticipate that we will issue shares of Class&nbsp;C common
stock or declare dividends thereon in the near future.
</FONT>

<P align="left">
<FONT size="2">If we have any remaining cash after the payment
of dividends as contemplated above, our board of directors will,
in its sole discretion, decide to use that cash to fund capital
expenditures or acquisitions, repay indebtedness, pay additional
dividends or for general corporate purposes.
</FONT>

<P align="left">
<FONT size="2">The indenture governing our senior subordinated
notes restricts our ability to declare and pay dividends on our
capital stock as follows:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></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 dividends if such payment will
    exceed the quarterly base dividend level in any fiscal quarter;
    provided that if such payment is less than the quarterly base
    dividend level in any fiscal quarter, the difference between the
    aggregate amount of dividends actually paid and the quarterly
    base dividend level for such quarter will be available for the
    payment of dividends at a later date. The quarterly base
    dividend level for any given fiscal quarter shall
    equal &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of our excess cash (as
    defined below) for the 12&nbsp;month period ending on the last
    day of our then most recently ended fiscal quarter for which
    internal financial statements are available at the time such
    dividend is declared and paid divided by four (4). &#147;Excess
    cash&#148; shall mean with respect to any period, Adjusted
    EBITDA, as defined in the indenture, minus the sum of
    (i)&nbsp;cash interest expense (ii)&nbsp;cash income tax
    expense, (iii)&nbsp;maintenance capital expenditures and
    (iv)&nbsp;dividends on our preferred stock, in each case, for
    such period;
    </FONT></TD>
</TR>

<TR>
    <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 not permitted
    under any of our senior 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">we may not pay any dividends while interest on
    the senior subordinated notes is being deferred or, after the
    end of any interest deferral, so long as any 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
    event of default under the indenture has occurred and is
    continuing.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">42
</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">
<FONT size="2">Our board of directors may, in its discretion,
amend or repeal this dividend policy. Our board of directors may
decrease the level of dividends provided for in this dividend
policy or discontinue entirely the payment of dividends.
</FONT>

<P align="left">
<FONT size="2">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, provisions of applicable law and other
factors that our board of directors may deem relevant. Under
Delaware law, our board of directors may declare dividends only
to the extent of our &#147;surplus&#148; (which is defined as
total assets at fair market value minus total liabilities, minus
statutory capital), or if there is no surplus, out of our net
profits for the then current and/or immediately preceding
fiscal&nbsp;years.
</FONT>

<P align="left">
<FONT size="2">We have not paid dividends in the past.
</FONT>

<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>

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

<!-- link1 "Capitalization" -->

<P align="center">
<B>Capitalization</B>

<P align="left">
<FONT size="2">The following table sets forth our cash and cash
equivalents and capitalization as of December&nbsp;31, 2003 on
an actual basis and on a pro forma as adjusted basis as if our
reorganization and this offering, including the use of proceeds
from this offering, the repayment of all outstanding borrowings
under our existing credit facility and the tender offer and
consent solicitation had occurred on that date and that we had
entered into the new credit facility on that date. For purposes
of this presentation, we have assumed that all of our existing
senior subordinated notes are purchased or redeemed in the
tender offer and consent solicitation for an aggregate
consideration of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.
</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="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="46%"><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="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>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">As of December&nbsp;31, 2003</FONT></B></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Pro Forma</FONT></B></TD>
</TR>

<TR>
    <TD colspan="5"></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">Adjustments</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">as Adjusted</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>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="5"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><FONT size="1">(In thousands)</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">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,937</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</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="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>

</TR>

<TR>
    <TD colspan="5" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long-term debt, including current portion
    </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="4" 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">11,270</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Existing credit facility (long-term)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">145,975</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">New 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><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">9&nbsp;5/8%&nbsp;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">110,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">%&nbsp;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>
    <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">Junior subordinated note
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,171</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Other 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">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>
    <TD><FONT size="2">&nbsp;</FONT></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"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">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">292,199</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</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">Preferred stock, $0.01&nbsp;par value per share
    </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="5" align="left" valign="top">
    <FONT size="2">Stockholders&#146; equity
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Mandatorily redeemable preferred equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Members&#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">(145,758</FONT></TD>
    <TD align="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 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">Class&nbsp;A common stock, $0.01&nbsp;par value
    per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Class&nbsp;B common stock, $0.01&nbsp;par value
    per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Class&nbsp;C common stock, $0.01&nbsp;par value
    per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">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="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated other comprehensive gain
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Total stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(139,758</FONT></TD>
    <TD align="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="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>

</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="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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">160,378</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT 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="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="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">44
</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='107'></A>
</DIV>

<!-- link1 "Dilution" -->

<P align="center">
<B>Dilution</B>

<P align="left">
<FONT size="2">Dilution is the amount by which the portion of
the offering price paid by the purchasers of the IDSs to be sold
in the offering that is allocated to our shares of Class&nbsp;A
common stock represented by the IDSs 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 Class&nbsp;A common stock deemed to be
outstanding at that date.
</FONT>

<P align="left">
<FONT size="2">Our net tangible book value as of
December&nbsp;31, 2003 was approximately $(195.2)&nbsp;million.
After giving effect to our receipt and intended use of
approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
of estimated net proceeds (after deducting estimated
underwriting discounts and commissions and offering expenses)
from our sale of IDSs and separate senior subordinated notes in
this offering, based on an assumed initial public offering price
of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
IDS (the midpoint of the range set forth on the cover page of
this prospectus) and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the
stated principal amount of the senior subordinated notes being
sold separately, our pro forma as adjusted net tangible book
value as of December&nbsp;31, 2003 would have been approximately
$&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. 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;A common stock to 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 IDSs in this offering.
</FONT>

<P align="left">
<FONT size="2">The following table illustrates this substantial
and immediate dilution to new investors:
</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="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="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><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">Per Share of</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">Common Stock</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Per Share of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Assuming</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Class&nbsp;A</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Full Exercise of the</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></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">Over-Allotment Option</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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Portion of the assumed initial public price of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per IDS allocated to one
    share of Class&nbsp;A common stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net tangible book value per share as of
    December&nbsp;31,&nbsp;2003
    </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 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&nbsp;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 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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Pro forma as adjusted net tangible book value
    after this&nbsp;offering
    </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>
</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dilution in net tangible book value per share to
    new&nbsp;investors
    </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>
</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">
<FONT size="2">The following table sets forth on a pro forma
basis as of December&nbsp;31, 2003, assuming no exercise of the
over-allotment option:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></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 to be owned by the existing equity investors and to
    be owned by the new investors, as represented by the IDSs to be
    sold in this 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">the total consideration to be paid by the
    existing equity investors and to be paid by the new investors
    purchasing IDSs in this offering; 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 Class&nbsp;A
    common stock to be paid by existing equity investors (cash and
    stock) and to be paid by new investors purchasing IDSs in this
    offering:
    </FONT></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="90%" 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="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="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="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>
</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 Class A</FONT></B></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">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">Total 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">Class&nbsp;A</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">Amount</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">Common 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 equity 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 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">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</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 align="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"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" 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">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 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><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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><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>
    <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><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">45
</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='108'></A>
</DIV>

<!-- link1 "Selected Historical Financial and Operating Data" -->

<P align="center">
<B>Selected Historical Financial and Operating Data</B>

<P align="left">
<FONT size="2">The following table sets forth our selected
consolidated financial information derived from our audited
consolidated financial statements as of and for each of the
years ended December&nbsp;31, 1999 through December&nbsp;31,
2003, of which the financial statements for 2001, 2002 and 2003
are included elsewhere in this prospectus.
</FONT>

<P align="left">
<FONT size="2">The information in the following table should be
read together with our audited consolidated financial statements
for 2001, 2002 and 2003 and the related notes, and
&#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations,&#148; all as included
elsewhere in this prospectus. The figures in the following table
reflect rounding adjustments.
</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="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="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>
    <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="3%"><FONT size="2">&nbsp;</FONT></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">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

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

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">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">2003</FONT></B></TD>
</TR>

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

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><FONT size="1">(In thousands, except per share data)</FONT></TD>
    <TD></TD>
    <TD colspan="3"></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">Statements of operations 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 colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net revenues:
    </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">Commercial laundry(1)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">281,658</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">230,448</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">219,273</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">219,653</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">230,663</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">Service parts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,716</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,993</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">34,743</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="bottom" nowrap><FONT size="2">35,524</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,944</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"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">314,374</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">265,441</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">254,016</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">255,177</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">267,607</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">Cost of sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">239,482</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">197,558</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="bottom" nowrap><FONT size="2">188,982</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">179,047</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">188,979</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">Gross profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">74,892</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67,883</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">65,034</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">76,130</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">78,628</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">Selling, 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">32,889</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">36,469</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,665</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,098</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,566</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">Securitization and other 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">3,707</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">402</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">10,920</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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="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 operating 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">36,596</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">36,871</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">28,665</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41,018</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,566</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 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">38,296</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,012</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,369</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,112</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">45,062</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">31,509</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,947</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,538</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">28,341</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">28,258</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 from 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">&#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">&#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">&#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">2,004</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">&#150;</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">Abandoned Canadian public offering 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">&#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">&#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">&#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">3,409</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">&#150;</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 (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">(1,706</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">354</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(67</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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">(830</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income (loss) before 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">5,081</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,581</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,764</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">1,391</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,974</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">Provision for 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">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">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">34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55</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">Net income (loss) before cumulative effect of
    accounting 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">5,052</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,601</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">2,730</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">1,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,919</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">Cumulative effect of change in accounting
    principle
    </FONT></DIV>
    </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">&#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">2,043</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">&#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">&#150;</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 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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,052</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,601</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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">687</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,919</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="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Cash flow 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 colspan="3" 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 align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,662</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,290</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,338</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,775</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,393</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">Net cash used in investing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(10,208</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(19,557</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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,964</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,563</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">(3,590</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">Net cash provided by (used in) financing
    activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,265</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,330</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(15,806</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(18,532</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">(26,205</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

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

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Maintenance capital expenditures(2)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,575</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,578</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,617</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,652</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,600</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">Ratio of earnings to fixed charges(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">1.2</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">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">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">1.6</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">Adjusted EBITDA(4)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56,962</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55,125</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,188</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59,118</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,314</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">46
</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="45%"><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="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></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></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">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>
    <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><FONT size="1">(In thousands)</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">Balance sheet data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">217,148</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">210,143</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">203,771</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">197,295</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">190,639</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">Long-term debt (including current portion)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">322,048</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">336,605</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">323,564</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">314,577</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">292,199</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

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

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="42%"><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="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="19"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" 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">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">2003</FONT></B></TD>
</TR>

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

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

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><FONT size="1">(In thousands)</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">EBITDA:</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 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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,052</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,601</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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">687</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,919</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">Cumulative effect of change in accounting
    principle
    </FONT></DIV>
    </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">&#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">2,043</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">&#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">&#150;</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">Provision for 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">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">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">34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55</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">
    <FONT size="2">Income (loss) before 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">5,081</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,581</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,764</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">1,391</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,974</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:
    </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">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">31,509</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,947</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,538</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">28,341</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">28,258</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(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">16,969</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,155</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,026</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,293</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">10,886</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">Non-cash interest expense included in
    amortization above(6)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,562</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,518</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,720</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,507</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,017</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>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">EBITDA(7)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,997</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46,003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,608</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,518</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,101</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>

<DIV align="left">
<HR size="1" width="33%" align="left" noshade>
</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><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">For 1999, this includes approximately
    $54.7&nbsp;million in revenue from home laundry equipment sales
    to Amana Company, L.P.
    </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">Maintenance capital expenditures is defined in
    the indenture as capital expenditures less non-recurring capital
    expenditures as reflected in the chart below for the relevant
    periods.
    </FONT></TD>
</TR>

</TABLE>

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

<TR>
    <TD width="59%"><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="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="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="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></TD>
    <TD></TD>
    <TD colspan="19"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></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">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>
    <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><FONT size="1">(In thousands)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Capital expenditures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,947</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,445</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,152</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,652</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,600</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-recurring 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">(7,372</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,867</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,535</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT 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>
    <TD><FONT size="2">&nbsp;</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">Maintenance capital expenditures
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,575</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,578</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,617</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,652</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,600</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>

</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>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">During 1999 and 2001, we incurred various capital
    expenditures in connection with certain facility rationalization
    efforts related to previously owned facilities in Searcy,
    Arkansas, Madisonville, Kentucky and Cincinnati, Ohio, that were
    considered non-recurring and outside the normal course of our
    manufacturing operations. The non-recurring capital expenditures
    consist of the following:
    </FONT></TD>
</TR>

</TABLE>
<P>

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

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">In 1999, $4.9&nbsp;million and $2.5&nbsp;million,
    respectively, of expenditures at our Ripon facility related to
    the replication of production capabilities for our standard
    dryer and front load washer product lines. These products had
    been produced by a previously owned manufacturing facility in
    Searcy, Arkansas, which was sold in 1997 as part of Raytheon
    Company&#146;s divestiture of its Raytheon Appliance Group.
    </FONT></TD>
</TR>

<TR>
    <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 2000, $3.2&nbsp;million of expenditures at our
    Ripon facility related to the transfer of production of our
    standard dryer and front load washer product lines from a
    previously owned manufacturing facility in Searcy, Arkansas,
    which began in 1999 (these expenditures included $2.6 million to
    build a new finished goods distribution center in Ripon as the
    prior warehousing space was displaced by the standard dryer,
    front load washer and tumbler dryer production lines);
    $1.1&nbsp;million of expenditures at our Ripon facility related
    to the transfer of production of our tumbler dryer product line
    from a previously owned manufacturing facility in Madisonville,
    Kentucky, which was closed in 1999; $0.5&nbsp;million of
    expenditures at our Marianna facility related to the transfer of
    production of our Ajax press and finishing equipment product
    lines from a manufacturing site in Cincinnati, Ohio.
    </FONT></TD>
</TR>

<TR>
    <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 2001, $1.5&nbsp;million of expenditures
    primarily at our Marianna facility related to the transfer of
    production of our Ajax press and finishing equipment product
    lines from a manufacturing site in Cincinnati, Ohio, which began
    in 2000.
    </FONT></TD>
</TR>

</TABLE>
<P>

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

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">We believe that the identification and separation
    of maintenance and non-recurring capital expenditures are
    important factors in evaluating our financial results.
    </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><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">For purposes of determining the ratio of earnings
    to fixed charges, earnings are defined as income (loss) before
    income taxes and cumulative effect of change in accounting
    principle plus fixed charges. Fixed charges include interest
    expense on all
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">47
</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="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD align="left">
    <FONT size="2">indebtedness, amortization of deferred financing
    costs and one-third of rental expense on operating leases,
    representing that portion of rental expense deemed to be
    attributable to interest. In 2000, earnings were inadequate to
    cover fixed charges. The amount of earnings required to attain a
    ratio of 1.0 to 1.0 is $4.6 million.
    </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><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">&#147;Adjusted EBITDA,&#148; as defined in the
    indenture governing our senior subordinated notes is determined
    as EBITDA, as adjusted for finance program adjustments, other
    non-recurring charges and the annual management fee paid to
    affiliates of Bain. We present this discussion of Adjusted
    EBITDA because covenants in the indenture governing our senior
    subordinated notes contain ratios based on this measure. For
    example, our ability to incur additional debt requires a ratio
    of Adjusted EBITDA to fixed charges
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to 1.0,
    subject to certain exceptions, including our ability to incur an
    unlimited amount of indebtedness in connection with the issuance
    of additional IDSs so long as the ratio of the aggregate
    principal amount of the additional senior subordinated notes to
    the number of the additional shares of our common stock will not
    exceed the equivalent ratio represented by the then existing
    IDSs.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">On a historical basis, we made the following
adjustments to EBITDA to compute Adjusted EBITDA:
</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="49%"><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="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="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">Year Ended December&nbsp;31,</FONT></B></TD>
</TR>

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

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">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">2003</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</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><FONT size="1">(In thousands, except ratios)</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">EBITDA
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,997</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46,003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,608</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,518</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,101</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">Adjustments:
    </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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Finance program adjustments(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">(1,313</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,650</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">151</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,019</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,396</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">Other non-recurring charges, as defined in the
    indenture(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">6,269</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">5,453</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,414</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">16,548</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">797</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">Management fees paid to affiliates of Bain
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,009</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">1,019</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,015</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">1,020</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">Adjusted EBITDA
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56,962</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55,125</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,188</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59,118</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">58,314</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><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ratio of Adjusted EBITDA to fixed charges(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">2.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.6</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">1.7</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">2.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2.2</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>&nbsp;</TD>
    <TD align="left">
    <HR size="1" width="38%" align="left" noshade></TD>
</TR>

</TABLE>
<P>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(a)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">We currently operate an off-balance sheet
    commercial equipment finance program in which newly originated
    equipment loans are sold to qualified special-purpose bankruptcy
    remote entities. In accordance with GAAP, we are required to
    record gains/losses on the sale of these equipment based
    promissory notes. In calculating Adjusted EBITDA, management
    determines the cash impact of net interest income on these
    notes. The finance program adjustments are the difference
    between GAAP basis revenues (as prescribed by
    SFAS&nbsp;No.&nbsp;125/140) and cash basis revenues.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(b)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Other non-recurring charges includes infrequently
    occurring items, plant relocation costs included in
    administrative expenses and lawsuit settlement expenses as
    follows:
    </FONT></TD>
</TR>

</TABLE>
<P>

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

<TR>
    <TD width="2%"></TD>
    <TD width="2%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    <FONT size="2">Other non-recurring charges in 1999 relate to a
    $2.3&nbsp;million restructuring charge associated with the
    Madisonville plant closure, $1.5&nbsp;million associated with
    payments under retention agreements with certain key employees,
    a $1.5&nbsp;million legal settlement with Amana Company, L.P.,
    and $1.0&nbsp;million of plant relocation costs.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    <FONT size="2">Other non-recurring charges in 2000 relate to
    $0.4&nbsp;million of additional medical benefits provided as
    part of the Madisonville plant closure and $5.1&nbsp;million of
    plant relocation costs.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    <FONT size="2">Other non-recurring charges in 2001 relate to
    $1.4&nbsp;million of plant relocation costs.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    <FONT size="2">Other non-recurring charges in 2002 relate to
    $10.9&nbsp;million associated with costs incurred in
    establishing a new asset backed facility for the sale of
    equipment notes and trade receivables, $3.4&nbsp;million
    associated with an abandoned Canadian public offering,
    $2.0&nbsp;million associated with the non-cash loss resulting
    from the early extinguishment of debt on a prior term loan and
    revolving credit facility, and $0.2&nbsp;million of plant
    relocation costs.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    <FONT size="2">Other non-recurring charges in 2003 relate to
    $0.8&nbsp;million of costs associated with the settlement of a
    lawsuit against a former subsidiary in Argentina.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    <FONT size="2">Plant relocation costs in 2002, 2001 and 2000
    primarily relate to expenses associated with the relocation of
    Madisonville, Kentucky and Cincinnati, Ohio production lines to
    Ripon, Wisconsin and Marianna, Florida, respectively. Plant
    relocation costs in 1999 primarily relate to the relocation of
    Madisonville, Kentucky product lines to Ripon, Wisconsin and
    duplication of the Searcy, Arkansas standard dryer and small
    capacity frontload washer production line in Ripon, Wisconsin.
    </FONT></TD>
</TR>

</TABLE>
<P>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(c)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">For purposes of calculating the ratio of Adjusted
    EBITDA to fixed charges (as defined in the indenture), fixed
    charges includes interest expense (excluding amortization of
    deferred financing fees) plus capitalized interest and cash
    dividends on preferred stock. On a pro forma basis, for the year
    ended December&nbsp;31, 2003, our ratio of Adjusted EBITDA to
    fixed charges under the indenture would have been
    <B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>to 1.0.
    </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><FONT size="2">(5)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Amortization expense for 2001, 2000 and 1999
    includes goodwill amortization of $2.0&nbsp;million,
    $2.0&nbsp;million and $1.5&nbsp;million, respectively. In
    accordance with SFAS&nbsp;No.&nbsp;142, &#147;Goodwill and Other
    Intangible Assets,&#148; we discontinued amortization of the
    goodwill balance as of December&nbsp;31, 2001.
    </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">Depreciation and amortization amounts include
    amortization of deferred financing costs included in interest
    expense.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">(7)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">EBITDA represents net income from continuing
    operations before interest expense, income tax provision
    (benefit) and depreciation and amortization. EBITDA is not a
    measure of operating income, operating performance or liquidity
    under GAAP.
    </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>

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

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD align="left">
    <FONT size="2">We include EBITDA because we understand it is
    used by some investors to determine a company&#146;s historical
    ability to service indebtedness and fund ongoing capital
    expenditures, and because certain covenants in our borrowing
    agreements are tied to similar measures. Nevertheless, this
    measure should not be considered in isolation or as a substitute
    for operating income (as determined in accordance with GAAP) as
    an indicator of our operating performance, or of cash flows from
    operating activities (as determined in accordance with GAAP), or
    as a measure of liquidity.
    </FONT></TD>
</TR>

</TABLE>

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

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

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><HR size="1" noshade></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">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>
    <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><FONT size="1">(In thousands)</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 flows from operating activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,662</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,290</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,338</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,775</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,393</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">Interest expense, net of non-cash 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">27,023</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="bottom" nowrap><FONT size="2">31,134</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">27,155</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,959</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">20,951</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">Net change in operating 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">14,753</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">2,148</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,301</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">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">Income tax 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">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">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">34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55</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 from 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">(2,004</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT 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">Other(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">(2,470</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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 align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(67</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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">(33</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>
    <TD><FONT size="2">&nbsp;</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">EBITDA
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,997</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">46,003</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,608</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,518</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53,101</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>

</TABLE>
</CENTER>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" width="27%" align="left" noshade></TD>
</TR>

</TABLE>
<P>

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

<TR>
    <TD width="5%"></TD>
    <TD width="3%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(A)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">In 1999, we recorded a $2.3&nbsp;million
    restructuring charge associated with the closing of our
    Madisonville, Kentucky manufacturing facility. The charge
    includes $1.7&nbsp;million in employee termination and severance
    benefit charges, $0.5&nbsp;million for the estimated loss on
    fixed assets which were held for disposal, and $0.1&nbsp;million
    in miscellaneous costs. In 2000, we recorded an additional
    $0.4&nbsp;million restructuring charge due to additional medical
    benefits provided as part of the employee terminations.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">49
</FONT>
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<DIV align="left">
<A name='109'></A>
</DIV>

<!-- link1 "Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations" -->

<P align="center">
<B>Management&#146;s Discussion and Analysis of</B>

<DIV align="center">
<B>Financial Condition and Results of Operations</B>
</DIV>

<P align="left">
<I><FONT size="2">The following discussion and analysis of our
financial condition and results of operations should be read in
conjunction with our consolidated financial statements and
accompanying notes which appear elsewhere in this prospectus. It
contains forward-looking statements that reflect our plans,
estimates and beliefs, and which involve risks, uncertainties
and assumptions. It contains forward-looking statements that
involve risks and uncertainties. Please see &#147;Cautionary
Statement Regarding Forward-Looking Statements&#148; for more
information. Our actual results could differ materially from
those anticipated in these forward-looking statements as a
result of various factors, including those discussed below and
elsewhere in this prospectus, particularly under the headings
&#147;Risk Factors&#148; and &#147;Cautionary Statement
Regarding Forward-Looking Statements.&#148;</FONT></I>

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

<P align="left">
<FONT size="2">We believe we are the leading designer,
manufacturer and marketer of stand-alone commercial laundry
equipment in North America and that we are similarly a leader
worldwide. Under the well-known brand names of Speed
Queen&#174;, UniMac&#174;, Huebsch&#174; and Ajax&#174;, we
produce a full line of commercial washing machines and dryers
with load capacities from 16 to 250 pounds as well as presses
and finishing equipment. Our commercial products are sold to
four distinct customer groups: (i)&nbsp;laundromats;
(ii)&nbsp;multi-housing laundries, consisting primarily of
common laundry facilities in apartment buildings, universities
and military installations; (iii)&nbsp;on-premise laundries,
consisting primarily of in-house laundry facilities of hotels,
hospitals, nursing homes and prisons and (iv)&nbsp;drycleaners.
</FONT>

<P align="left">
<FONT size="2">The North American stand alone commercial laundry
equipment industry&#146;s revenues are primarily driven by
population growth and the replacement cycle of laundry
equipment. With economic conditions having limited effect on the
frequency of use, and therefore the useful life of laundry
equipment, industry revenues have been relatively stable over
time. Similarly, with a majority of our revenues generated by
recurring sales of replacement equipment and service parts, we
have experienced stable revenues even during economic slowdowns.
</FONT>

<P align="left">
<FONT size="2">Sales of stand alone commercial laundry equipment
are the single most important driver of our revenues. In 2003,
our net revenues from the sale of commercial laundry equipment
were approximately $230.7&nbsp;million, which comprised over 86%
of our total net revenues. The other main component of our
revenues is the sale of high margin service parts. We offer
immediate response service whereby many of our parts are
available on a 24-hour turnaround for emergency repair parts
orders. In 2003, net revenues from the sale of service parts
were approximately $36.9&nbsp;million, almost 14% of our total
net revenues.
</FONT>

<P align="left">
<FONT size="2">We have grown our overall market share to
approximately 39% in 2003 and achieved steady revenues by
building an extensive and loyal distribution network for our
products, establishing a significant installed base of units and
developing and offering a full innovative product line. As a
result of our large installed base, a significant majority of
our revenue is attributable to replacement sales of equipment
and service parts.
</FONT>

<P align="left">
<FONT size="2">We believe that continued population expansion in
North America will continue to drive steady demand for garment
and textile laundering by all customer groups that purchase
commercial laundry equipment. We anticipate growth in demand for
commercial laundry equipment in international markets as well,
especially in developing countries where laundry processing has
historically been far less sophisticated than in North America.
In addition, customers are increasingly trading up to equipment
with enhanced functionality, thereby raising average selling
prices. Customers are also moving towards equipment with
increased water and energy efficiency as the result of
government and consumer pressure and a focus on operating costs.
</FONT>

<P align="center"><FONT size="2">50
</FONT>

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<P align="left">
<B><FONT size="2">Critical Accounting Policies</FONT></B>

<P align="left">
<FONT size="2">The preparation of financial statements in
conformity with GAAP, requires us to make estimates and
assumptions that affect reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at
the financial statement date and reported amounts of revenues
and expenses, including amounts that are susceptible to change.
Our critical accounting policies include accounting methods and
estimates underlying such financial statement preparation, as
well as judgments around uncertainties affecting the application
of those policies. In applying critical accounting policies,
materially different amounts or results could be reported under
different conditions or using different assumptions. We believe
that our critical accounting policies, involving significant
estimates, uncertainties and susceptibility to change, include
the following:
</FONT>

<P align="left">
<I><FONT size="2">Revenue Recognition.</FONT></I><FONT size="2">
Revenue from product sales is recognized by us when all of the
following criteria are met: (i)&nbsp;persuasive evidence of an
arrangement exists; (ii)&nbsp;delivery has occurred and
ownership has transferred to the customer; (iii)&nbsp;the price
to the customer is fixed or determinable and
(iv)&nbsp;collectibility is reasonably assured. With the
exception of certain sales to international customers, which are
recognized upon receipt by the customer, these criteria are
satisfied, and accordingly, revenue is recognized upon shipment
by us. In addition, warranty and sales incentive costs are
estimated and accrued at the time of sale, as appropriate.
</FONT>

<P align="left">
<FONT size="2">We sell notes receivable and accounts receivable
through our special-purpose bankruptcy remote entities.
Servicing revenue, interest income on beneficial interests
retained, and gains on the sale of notes receivable are included
in commercial laundry revenue. In determining the gain on sales
of notes receivable, the investment in the sold receivable pool
is allocated between the portion sold and the portion retained,
based on their relative fair values. We generally estimate the
fair values of our retained interests based on the present value
of expected future cash flows to be received, using our best
estimate of key assumptions, including credit losses, prepayment
rates, interest rates and discount rates commensurate with the
risks involved.
</FONT>

<P align="left">
<I><FONT size="2">Inventories.</FONT></I><FONT size="2"> We
value inventories at the lower of cost or market. Cost is
determined by the first-in, first-out method. Valuing
inventories at the lower of cost or market requires the use of
estimates and judgment. Our policy is to evaluate all inventory
quantities for amounts on-hand that are potentially in excess of
estimated usage requirements, and to write-down any excess
quantities to estimated net realizable value. Inherent in the
estimates of net realizable value are our estimates related to
our future manufacturing schedules, customer demand, possible
alternative uses and ultimate realization of potentially excess
inventory.
</FONT>

<P align="left">
<I><FONT size="2">Notes and Accounts
Receivable.</FONT></I><FONT size="2"> We value notes receivable
not sold and accounts receivable net of allowances for
uncollectible accounts. These allowances are based on estimates
of the portion of the receivables that will not be collected in
the future, and in the case of notes receivable, also considers
estimated collateral liquidation proceeds. However, the ultimate
collectibility of a receivable is significantly dependent upon
the financial condition of the individual customer, which can
change rapidly and without advance warning.
</FONT>

<P align="left">
<I><FONT size="2">Retained Interests in Securitized Notes
Receivable.</FONT></I><FONT size="2"> We value retained
beneficial interests in notes receivable sold to our off-balance
sheet special-purpose entities based upon the present value of
expected future cash flows to be received on the residual
portion of cash flows on the notes, using our best estimate of
key assumptions, including credit losses, prepayment rates,
interest rates and discount rates commensurate with the risks
inherent in such estimates. Unrealized gains and losses
resulting from changes in the estimated fair value of retained
interests are recorded as other comprehensive income (loss).
Impairment losses are recognized when the estimated fair value
is less than the carrying amount of the retained interest.
</FONT>

<P align="left">
<I><FONT size="2">Employee Pensions.</FONT></I><FONT size="2">
We sponsor a defined benefit pension plan covering the majority
of our employees. GAAP requires us to develop actuarial
assumptions in determining annual pension expense and benefit
obligations for the related plan. Such assumptions include
discount rate, expected rate of return on plan
</FONT>

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

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<DIV align="left">
<FONT size="2">assets, compensation increases and employee
turnover rates. These assumptions are reviewed on an annual
basis and modified as necessary to reflect changed conditions.
For purposes of determining our pension expense for 2004, the
discount rate and expected rate of return on plan assets have
been reduced to 6.25% and 8.75%, respectively.
</FONT>
</DIV>

<P align="left">
<FONT size="2">Further, GAAP requires the recognition of a
minimum pension liability and in certain circumstances an
adjustment to members&#146; equity (deficit)&nbsp;when the fair
market value of year-end pension assets are less that the
accumulated benefit obligation. At year-end 2002, a charge of
$8.0&nbsp;million to members&#146; deficit was recorded in
response to lower asset valuation and somewhat higher benefit
obligations as of that date. At year end 2003, members&#146;
deficit was reduced by $4.4&nbsp;million in response to asset
returns for 2003 exceeding the plan&#146;s assumed rates of
return.
</FONT>

<P align="left">
<FONT size="2">The following critical accounting policies
address the initial and prospective accounting for the IDSs and
the shares of Class&nbsp;A common stock and senior subordinated
notes represented thereby:
</FONT>

<P align="left">
<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 an issuance of separate securities, shares of
Class&nbsp;A common stock and senior subordinated notes and to
allocate the proceeds received for each IDS unit between the
Class&nbsp;A common stock and senior subordinated notes in
proportion to their respective fair market values at the time of
issuance. Accordingly, we will account for the senior
subordinated notes represented by the IDSs as long-term debt
bearing a stated interest rate of % maturing on 2014, subject to
extension to 2024 based on certain conditions. As discussed
below, based on the opinion of tax counsel, we are of the view
that the senior subordinated notes should be treated as debt for
United States federal income tax purposes and we intend to
annually deduct interest expense of approximately $ on the
senior subordinated notes from taxable income for United States
federal and state income tax purposes. There can be no assurance
that the classification of senior subordinated notes as debt (or
the amount of interest expense deducted) will not be challenged
by the IRS or will be sustained if challenged, although to date
we have neither been informed by the IRS that they believe that
the senior subordinated notes should be treated as equity rather
than debt for United States federal and state income tax
purposes, nor have we sought a ruling from the IRS that the
senior subordinated notes should be treated as debt. If our
treatment of the senior subordinated notes as debt is put at
risk in the future as a result of a future ruling by the IRS,
including an adverse ruling for other IDSs or an adverse ruling
for our own IDSs such that the senior subordinated notes are
required to be treated as equity for income tax purposes then in
the event of any such ruling, we may need to consider the effect
of such developments on the determination of our future tax
provisions and obligations. In the event the senior subordinated
notes are required to be treated as equity for income tax
purposes, then 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. 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 claim the interest expense deduction and would adversely
effect our financial position, cash flow, and liquidity, and
could affect our ability to make interest or dividend payments
on the senior subordinated notes and the shares of common stock
represented by the IDSs and our ability to continue as a going
concern. We do not currently intend to record a liability for a
potential disallowance of this interest expense deduction. In
addition, non-U.S. holders of our IDS units could be subject to
withholding taxes on the payment of interest treated by the IRS
or the courts as dividends on equity which could subject us to
additional liability for the withholding taxes that we do not
collect on such payments.
</FONT>

<P align="left">
<FONT size="2">As discussed below under &#147;Material United
States Federal Income Tax Consequences&nbsp;&#151; United States
Holders&nbsp;&#151; Senior Subordinated Notes&nbsp;&#151;
Characterization,&#148; the determination as to whether an
instrument is treated as debt or equity for United States
federal income tax purposes is based on all the facts and
circumstances. There is no clear statutory definition of debt,
and the characterization of an instrument as debt or equity is
governed by principles developed in the case law, which analyzes
numerous factors that are intended to identify the formal
characteristics of, and the economic substance of, the
investor&#146;s interest in us. In light of the representations
and determinations described in the section referred to above
and their relevance to several of the factors analyzed in the
case law, and taking into account the facts and
</FONT>

<P align="center"><FONT size="2">52
</FONT>
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<DIV align="left">
<FONT size="2">circumstances relating to the issuance of the
senior subordinated notes (including the separate issuance of
senior subordinated notes in this offering), we (and our
counsel) are of the view that the senior subordinated notes
should be treated as debt for United States federal income tax
purposes. We intend to take such position, and therefore our
financial statements will not reflect a tax liability related to
this position. However, there can be no assurance that this
position would be sustained if challenged by the IRS.
</FONT>
</DIV>

<P align="left">
<FONT size="2">Additionally, there can be no assurance that the
IRS will not challenge the determination that the interest rate
on the senior subordinated notes represents an arm&#146;s length
rate. If the IRS were successful in such a challenge, then any
excess of the interest paid on the senior subordinated notes
over the deemed arm&#146;s length amount would not be deductible
by us and could be characterized as a dividend payment instead
of an interest payment for United States federal income tax
purposes. In such case, our taxable income and, thus, our United
States federal income tax liability could be materially
increased. We intend to determine, upon consummation of this
offering, the appropriate arm&#146;s length interest rate on the
senior subordinated notes through the utilization of a third
party valuation firm and through the sale of the separate senior
subordinated notes with the same terms that are a part of this
offering.
</FONT>

<P align="left">
<I><FONT size="2">IDSs, Class&nbsp;B common stock and preferred
stock.</FONT></I><FONT size="2"> Our IDSs represent common
stock, senior subordinated notes and embedded derivative
features that may require bifurcation under FASB Statement No.
133, &#147;Accounting for Derivative Instruments and Hedging
Activities (&#147;FAS 133&#148;).&#148; Upon completion of this
offering, proceeds from the issuance of the IDSs will first be
allocated, based upon relative fair value at the issuance date,
to Class&nbsp;A common stock and the senior subordinated notes.
If it is determined at the time of issuance that any of the
embedded derivatives are required to be bifurcated and
separately accounted for, then a portion of the proceeds from
the original issuance will also be allocated to the embedded
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
proceeds allocated to the senior subordinated notes will be
reduced and the senior subordinated notes will be recorded at a
discount and accreted to their redemption value as a component
of interest expense using the effective interest method. Any
such allocation will not effect the tax treatment of the IDSs.
</FONT>

<P align="left">
<FONT size="2">The Class&nbsp;A common stock portion of the IDS
unit will be included in stockholders&#146; equity, net of the
related portion of the IDS transaction costs allocated to
Class&nbsp;A common stock, and dividends paid on the
Class&nbsp;A common stock will be recorded as a reduction to
retained earnings when declared by us. The senior subordinated
debt portion of the IDS unit will be included in long-term debt,
and the related portion of the IDS transaction costs allocated
to the notes 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. Any derivatives requiring
bifurcation will be recorded as a liability as required by FAS
133 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 any embedded derivatives that require bifurcation
through the utilization of a third party valuation firm and the
sale of the separate senior subordinated notes with the same
terms that are part of this offering.
</FONT>

<P align="left">
<FONT size="2">In connection with our reorganization, we will
issue shares of Class&nbsp;B common stock, and preferred stock
to certain current equity holders. The preferred stock may,
subject to certain conditions, be exchanged in the future for
IDSs. The Class&nbsp;B common stock will be treated as permanent
equity. The Class&nbsp;B common stock dividends will be equal to
the amount per share paid to holders of Class&nbsp;A common
stock. Because we have two classes of common stock, net income
will be allocated between the two classes of common stock for
purposes of computing earnings per share. At the date of the
initial sale, the preferred stock will be classified as
mezzanine equity. Dividends on preferred stock will be deducted
from net income in the determination of net income available to
common stockholders for purposes of computing earnings per share.
</FONT>

<P align="left">
<FONT size="2">Following the second anniversary of the
consummation of this offering, at the option of our existing
equity investors, upon any subsequent sale of any of their
shares of Class&nbsp;B common stock together with their
</FONT>

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</FONT>
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<DIV align="left">
<FONT size="2">preferred stock we will issue to the purchasers
of such shares, one IDS in exchange for one share of
Class&nbsp;B common stock and one share of preferred stock.
</FONT>
</DIV>

<P align="left">
<FONT size="2">If it is determined at the time of issuance that
the embedded conversion option is required to be bifurcated and
separately accounted for, a portion of the proceeds from the
original issuance of the Class&nbsp;B common stock and preferred
stock will also be allocated to this derivative. If a portion of
the initial proceeds is allocated to the derivative, the amount
recorded as mezzanine equity will initially be recorded at a
discount and accreted to the redemption value using the
effective interest method. The bifurcated derivatives will be
recorded as liabilities and will be marked to market with
changes in fair value being recorded as a component of interest
expense.
</FONT>

<P align="left">
<B><FONT size="2">Results of Operations</FONT></B>

<P align="left">
<FONT size="2">The following table sets forth our historical net
revenues for the periods indicated:
</FONT>

<CENTER>
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<TR>
    <TD width="69%"><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="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</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" 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">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>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><FONT size="1">(In millions)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Commercial laundry
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">219.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">219.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">230.7</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">Service parts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34.7</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">35.5</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">36.9</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><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">254.0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">255.2</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">267.6</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">
<FONT size="2">The following table sets forth certain condensed
historical financial data for us expressed as a percentage of
net revenues for each of the periods indicated:
</FONT>

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

<TR>
    <TD width="69%"><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="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><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">Year Ended December&nbsp;31,</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" 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">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">Net revenues
    </FONT></DIV>
    </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><FONT size="2">&nbsp;</FONT></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><FONT size="2">&nbsp;</FONT></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><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cost of sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">74.4%</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">70.2%</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">70.6%</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">Gross profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25.6%</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">29.8%</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">29.4%</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">Selling, general and administrative 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">11.3%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11.7%</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">12.6%</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">Securitization and other 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">0.0%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.3%</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">0.0%</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">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">14.3%</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">13.8%</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">16.8%</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">Net income (loss) before cumulative effect of
    accounting&nbsp;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">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">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">5.9%</FONT></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">Year Ended December&nbsp;31, 2003 Compared
    to Year Ended December&nbsp;31, 2002</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">
<I><FONT size="2">Net Revenues.</FONT></I><FONT size="2"> Net
revenues for the year ended December&nbsp;31, 2003 increased
$12.4&nbsp;million, or 4.9%, to $267.6&nbsp;million from
$255.2&nbsp;million for the year ended December&nbsp;31, 2002.
This increase was primarily attributable to higher commercial
laundry revenue of $11.0&nbsp;million and higher service parts
revenue of $1.4&nbsp;million. The increase in commercial laundry
revenue was due primarily to higher North American equipment
revenue of $7.1&nbsp;million, and international revenue of
$4.7&nbsp;million, which was partly offset by lower earnings
from our off-balance sheet equipment financing program of
$0.8&nbsp;million. The increase in North American equipment
revenue was primarily due to higher revenue from laundromats,
and multi-housing laundries partially offset by lower revenue
from drycleaners and on-premise laundries. Revenue from
international customers was higher in Europe and Asia.
</FONT>

<P align="left">
<I><FONT size="2">Gross Profit.</FONT></I><FONT size="2"> Gross
profit for the year ended December&nbsp;31, 2003 increased
$2.5&nbsp;million, or 3.3%, to $78.6&nbsp;million from
$76.1&nbsp;million for the year ended December&nbsp;31, 2002.
This increase was primarily attributable to margins associated
with the higher sales volume, a price increase and lower
depreciation expense, which were partially offset by unfavorable
exchange rates related to foreign purchases, unfavorable product
mix related to sales to drycleaning customers and lower earnings
from our off-balance sheet equipment financing program. Gross
profit as a percentage of net revenues decreased to 29.4% for
the year ended December&nbsp;31, 2003 from 29.8% for the year
ended December&nbsp;31, 2002.
</FONT>

<P align="center"><FONT size="2">54
</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">
<I><FONT size="2">Selling, General and Administrative
Expense.</FONT></I><FONT size="2"> Selling, general and
administrative expenses for the year ended December&nbsp;31,
2003 increased $3.5&nbsp;million, or 11.5%, to
$33.6&nbsp;million from $30.1&nbsp;million for the year ended
December&nbsp;31, 2002. The increase in selling, general and
administrative expenses was primarily due to higher pension
expense of $1.5&nbsp;million, and higher sales and marketing
expenses of $1.2&nbsp;million. Selling, general and
administrative expenses as a percentage of net revenues
increased to 12.6% for the year ended December&nbsp;31, 2003
from 11.7% for the year ended December&nbsp;31, 2002.
</FONT>

<P align="left">
<I><FONT size="2">Securitization and Other
Costs.</FONT></I><FONT size="2"> We did not incur any
securitization and other costs for the year ended
December&nbsp;31, 2003. Securitization and other costs for the
year ended December&nbsp;31, 2002 were $10.9&nbsp;million. The
2002 costs were due to transaction fees associated with a new
asset backed facility. Securitization and other costs as a
percentage of net revenues were 4.3% for the year ended
December&nbsp;31, 2002.
</FONT>

<P align="left">
<I><FONT size="2">Operating Income.</FONT></I><FONT size="2"> As
a result of the aforementioned, operating income for the year
ended December&nbsp;31, 2003 increased $10.0&nbsp;million, or
28.3%, to $45.1&nbsp;million from $35.1&nbsp;million for the
year ended December&nbsp;31, 2002. Operating income as a
percentage of net revenues increased to 16.8% for the year ended
December&nbsp;31, 2003 from 13.8% for the year ended
December&nbsp;31, 2002.
</FONT>

<P align="left">
<I><FONT size="2">Interest Expense.</FONT></I><FONT size="2">
Interest expense for the year ended December&nbsp;31, 2003 of
$28.3&nbsp;million was unchanged as compared to interest expense
for the year ended December&nbsp;31, 2002. Lower cash interest
expense resulting from a reduction in total debt outstanding was
offset by higher cash interest expense related to the junior
subordinated note. Interest expense in 2003 includes an
unfavorable non-cash adjustment of $1.4&nbsp;million to reflect
changes in the fair values of an interest rate swap agreement.
Interest expense in 2002 includes an unfavorable non-cash
adjustment of $1.8&nbsp;million to reflect changes in the fair
values of a similar interest rate swap agreement.
</FONT>

<P align="left">
<I><FONT size="2">Other Income (Expense),
Net.</FONT></I><FONT size="2"> Other expense for the year ended
December&nbsp;31, 2003 was $0.8&nbsp;million as compared to
other income of less than $0.1&nbsp;million for the year ended
December&nbsp;31, 2002. The 2003 other expense is comprised of
costs associated with the settlement of a lawsuit against a
former subsidiary of ours in Argentina and losses on the sale of
fixed assets. The 2002 other income is comprised entirely of
gains on the sale of fixed assets.
</FONT>

<P align="left">
<I><FONT size="2">Net Income.</FONT></I><FONT size="2"> As a
result of the aforementioned, net income for the year ended
December&nbsp;31, 2003 increased $14.6&nbsp;million to
$15.9&nbsp;million as compared to $1.3&nbsp;million for the year
ended December&nbsp;31, 2002. Net income as a percentage of net
revenues increased to 5.9% for the year ended December&nbsp;31,
2003 from 0.5% for the year ended December&nbsp;31, 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">Year Ended December&nbsp;31, 2002 Compared
    to Year Ended December&nbsp;31, 2001</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">
<I><FONT size="2">Net Revenues.</FONT></I><FONT size="2"> Net
revenues for the year ended December&nbsp;31, 2002 increased
$1.2&nbsp;million, or 0.5%, to $255.2&nbsp;million from
$254.0&nbsp;million for the year ended December&nbsp;31, 2001.
This increase was primarily attributable to higher commercial
laundry revenue of $0.4&nbsp;million and higher service parts
revenue of $0.8&nbsp;million. The increase in commercial laundry
revenue was due primarily to higher North American equipment
revenue of $3.0&nbsp;million, and higher earnings from our
off-balance sheet equipment financing program of
$0.6&nbsp;million, which was partly offset by lower
international revenue of $3.2&nbsp;million. The increase in
North American equipment revenue was primarily due to price
increases of approximately $3.5&nbsp;million and higher revenue
from multi-housing laundries, and laundromats, partially offset
by lower revenue from on-premise laundries. Revenue from
international customers was lower due to the discontinuance of
sales to a foreign customer under a private label contract and
higher sales to the Mexican government in 2001 under a one-time
contract.
</FONT>

<P align="left">
<I><FONT size="2">Gross Profit.</FONT></I><FONT size="2"> Gross
profit for the year ended December&nbsp;31, 2002 increased
$11.1&nbsp;million, or 17.1%, to $76.1&nbsp;million from
$65.0&nbsp;million for the year ended December&nbsp;31, 2001.
This increase was primarily attributable to the price increase
and favorable manufacturing efficiencies, $1.5&nbsp;million of
lower depreciation expense, and $2.0&nbsp;million of favorable
impact in 2001 resulting from a change in accounting
</FONT>

<P align="center"><FONT size="2">55
</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">principle whereby goodwill is no longer
amortized. Gross profit as a percentage of net revenues
increased to 29.8% for the year ended December&nbsp;31, 2002
from 25.6% for the year ended December&nbsp;31, 2001.
</FONT>
</DIV>

<P align="left">
<I><FONT size="2">Selling, General and Administrative
Expense.</FONT></I><FONT size="2"> Selling, general and
administrative expenses for the year ended December&nbsp;31,
2002 increased $1.4&nbsp;million, or 5.0%, to $30.1&nbsp;million
from $28.7&nbsp;million for the year ended December&nbsp;31,
2001. The increase in selling, general and administrative
expenses was primarily due to higher pension expense of
$1.4&nbsp;million, higher independent development expenses of
$0.9&nbsp;million, higher compensation expenses of
$0.9&nbsp;million, and higher sales and marketing expenses of
$0.3&nbsp;million, partially offset by lower expenses related
primarily to the relocation of Cincinnati, Ohio production lines
to Marianna, Florida of $0.9&nbsp;million and a lower loss on
sales of qualified accounts receivable of $0.8&nbsp;million.
Selling, general and administrative expenses as a percentage of
net revenues increased to 11.7% for the year ended
December&nbsp;31, 2002 from 11.3% for the year ended
December&nbsp;31, 2001.
</FONT>

<P align="left">
<I><FONT size="2">Securitization and Other
Costs.</FONT></I><FONT size="2"> We did not incur any
securitization and other costs for the year ended
December&nbsp;31, 2001. Securitization and other costs for the
year ended December&nbsp;31, 2002 were $10.9&nbsp;million. The
2002 costs were due to transaction fees associated with a new
asset backed facility. Securitization and other costs as a
percentage of net revenues were 4.3% for the year ended
December&nbsp;31, 2002.
</FONT>

<P align="left">
<I><FONT size="2">Operating Income.</FONT></I><FONT size="2"> As
a result of the aforementioned, operating income for the year
ended December&nbsp;31, 2002 decreased $1.3&nbsp;million, or
3.5%, to $35.1&nbsp;million from $36.4&nbsp;million for the year
ended December&nbsp;31, 2001. Operating income as a percentage
of net revenues decreased to 13.8% for the year ended
December&nbsp;31, 2002 from 14.3% for the year ended
December&nbsp;31, 2001.
</FONT>

<P align="left">
<I><FONT size="2">Interest Expense.</FONT></I><FONT size="2">
Interest expense for the year ended December&nbsp;31, 2002
decreased $5.2&nbsp;million, or 15.5%, to $28.3&nbsp;million
from $33.5&nbsp;million for the year ended December&nbsp;31,
2001. Interest expense in 2002 includes an unfavorable non-cash
adjustment of $1.8&nbsp;million related to interest rate swap
agreements entered into in 2002. Interest expense in 2001
included an unfavorable non-cash adjustment of $0.9&nbsp;million
related to these agreements. Interest expense was also lower in
2002 as a result of lower interest rates and a reduction in
total debt outstanding of $22.0&nbsp;million, or 6.5% since
December 2000.
</FONT>

<P align="left">
<I><FONT size="2">Loss from Early Extinguishment of
Debt.</FONT></I><FONT size="2"> Loss from early extinguishment
of debt for the year ended December&nbsp;31, 2002 was
$2.0&nbsp;million. We entered into an amended and restated
credit agreement dated as of August&nbsp;2, 2002. As a result,
we recorded a loss on early extinguishment of debt of
$2.0&nbsp;million at that time, to write-off unamortized debt
issuance costs related to our prior term loan and revolving
credit facilities.
</FONT>

<P align="left">
<I><FONT size="2">Abandoned Canadian Public
Offering.</FONT></I><FONT size="2"> Abandoned Canadian public
offering expense for the year ended December&nbsp;31, 2002 was
$3.4&nbsp;million of costs incurred while pursuing an initial
public offering through a Canadian Income Trust. Due to market
conditions, we determined that such a public offering was not
advantageous to us at that time.
</FONT>

<P align="left">
<I><FONT size="2">Other Income (Expense),
Net.</FONT></I><FONT size="2"> Other income for the year ended
December&nbsp;31, 2002 was less than $0.1&nbsp;million as
compared to other expense of $0.1&nbsp;million for the year
ended December&nbsp;31, 2001. The 2002 other income is comprised
entirely of gains on the sale of fixed assets. The 2001 other
expense is comprised entirely of losses on the sale of fixed
assets.
</FONT>

<P align="left">
<I><FONT size="2">Net Income Before Cumulative Effect of
Accounting Change.</FONT></I><FONT size="2"> As a result of the
foregoing, net income before cumulative effect of accounting
change for the year ended December&nbsp;31, 2002 decreased
$1.4&nbsp;million to a net income before cumulative effect of
accounting change of $1.3&nbsp;million as compared to
$2.7&nbsp;million for the year ended December&nbsp;31, 2001. Net
income before cumulative effect of accounting change as a
percentage of net revenues decreased to 0.5% for the year ended
December&nbsp;31, 2002 from 1.1% for the year ended
December&nbsp;31, 2001.
</FONT>

<P align="left">
<I><FONT size="2">Cumulative Effect of Accounting
Change.</FONT></I><FONT size="2"> Effective April&nbsp;1, 2001,
we adopted the provisions of Emerging Issues Task Force, or
EITF,&nbsp;Issue No.&nbsp;99-20 &#147;Recognition of Interest
Income and Impairment on Purchased and Retained Beneficial
Interests in Securitized Financial Assets.&#148; In accordance
with the impairment provisions of EITF&nbsp;99-20, upon adoption
we recognized a $2.0&nbsp;million non-cash write-down of our
retained interests in its securitization transactions.
</FONT>

<P align="center"><FONT size="2">56
</FONT>

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<P align="left">
<I><FONT size="2">Net Income.</FONT></I><FONT size="2"> As a
result of the aforementioned, net income for the year ended
December&nbsp;31, 2002 increased $0.6&nbsp;million to
$1.3&nbsp;million as compared to $0.7&nbsp;million for the year
ended December&nbsp;31, 2001. Net income as a percentage of net
revenues increased to 0.5% for the year ended December&nbsp;31,
2002 from 0.3% for the year ended December&nbsp;31, 2001.
</FONT>

<P align="left">
<B><FONT size="2">Liquidity and Capital Resources</FONT></B>

<P align="left">
<I><FONT size="2">Existing Senior Credit
Facility.</FONT></I><FONT size="2"> On August&nbsp;2, 2002, we
amended and restated our May 1998 credit agreement with a
syndicate of financial institutions. The amended and restated
existing $238.0&nbsp;million senior credit facility is comprised
of a term loan facility aggregating $193.0&nbsp;million and a
$45.0&nbsp;million revolving credit facility. Among other
modifications, the amended and restated agreement extends the
senior credit facility termination date from May&nbsp;5, 2005 to
August&nbsp;5, 2007.
</FONT>

<P align="left">
<FONT size="2">The existing senior credit facility continues to
be subject to certain financial ratios and tests, similar to
those included in the prior facility. The senior credit facility
allows a maximum ratio of consolidated debt to EBITDA (as
defined by the existing senior credit facility) at
December&nbsp;31, 2003 of 5.50.
</FONT>

<P align="left">
<FONT size="2">Additional borrowings and the issuance of
additional letters of credit under the senior credit facility
are subject to certain continuing representations and
warranties, including the absence of any development or event
which has had or could reasonably be expected to have a material
adverse effect on our business or financial condition.
</FONT>

<P align="left">
<FONT size="2">We expect to use the proceeds from this offering
to repay the outstanding indebtedness under the existing senior
credit facility.
</FONT>

<P align="left">
<I><FONT size="2">New Credit Facility.</FONT></I><FONT size="2">
We expect that the new credit facility will be comprised of a
senior secured revolving credit facility in a total principal
amount of up to
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
which we refer to as the &#147;new revolver,&#148; and a senior
secured term loan facility in an aggregate principal amount of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
which we refer to as the &#147;new term loan.&#148; Our new
revolver will have
a &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-year
maturity period and the new term loan will have
a &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-year
maturity period. We expect to use borrowings under the revolving
credit facility for general corporate purposes, including
working capital, capital expenditures, payment of dividends and
letters of credit.
</FONT>

<P align="left">
<FONT size="2">The new credit facility will require that we meet
certain financial tests and will contain customary covenants and
restrictions.
</FONT>

<P align="left">
<FONT size="2">We believe, based on currently available
information, that future cash flows from operations, together
with available borrowings under the new credit facility, will be
adequate to meet our anticipated requirements for capital
expenditures, working capital, interest payments, scheduled
principal payments and other debt repayments while achieving all
required covenant requirements under the new credit facility.
</FONT>

<P align="left">
<I><FONT size="2">Securitization
Programs.</FONT></I><FONT size="2"> On November&nbsp;26, 2002, a
trust, Alliance Laundry Equipment Receivables Trust&nbsp;2002-A,
or ALERT&nbsp;2002A, formed by a special-purpose bankruptcy
remote subsidiary of ours entered into a $300.0&nbsp;million
revolving facility, or the asset backed facility, backed by
equipment loans and trade receivables originated by us. During
the first three years of the asset backed facility, we are
permitted, from time to time, to sell our trade receivables and
certain equipment loans to the special purpose subsidiary, which
in turn will transfer them to the trust. The trust finances the
acquisition of the trade receivables and equipment loans through
borrowings under the asset backed facility. Funding availability
for trade receivables is limited to a maximum of
$60.0&nbsp;million, while funding for equipment loans is limited
at $300.0&nbsp;million less the amount of funding outstanding
for trade receivables. Funding for the trade receivables and
equipment loans is subject to certain eligibility criteria
standard for transactions of this type. After three years from
the closing date, which is December&nbsp;2, 2005, (or earlier in
the event of a rapid amortization event or an event of default),
the trust will not be permitted to request new borrowings under
the facility and the outstanding borrowings will amortize over a
period of up to nine years thereafter.
</FONT>

<P align="center"><FONT size="2">57
</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">
<FONT size="2">Additional advances under the asset backed
facility are subject to certain continuing conditions, including
but not limited to (i)&nbsp;the weighted average life, weighted
average interest rate, and the amount of fixed rate equipment
loans held by the trust, (ii)&nbsp;the absence of a rapid
amortization event or event of default, as defined,
(iii)&nbsp;our compliance, as servicer, with certain financial
covenants, and (iv)&nbsp;no event having occurred which
materially and adversely affects our operations.
</FONT>

<P align="left">
<FONT size="2">The risk of loss to the note purchasers under the
asset backed facility resulting from default or dilution on the
trade receivables and equipment loans is protected by credit
enhancement, provided in the form of cash reserves, letters of
credit and overcollateralization. Further, the timely payment of
interest and the ultimate payment of principal on the facility
is guaranteed by Ambac Assurance Corporation. All of the
residual beneficial interests in the trust and cash flows
remaining from the pool of receivables and loans after payment
of all obligations under the Asset Backed Facility would accrue
to our benefit. Except for the retained interests and amounts of
the letters of credit outstanding from time to time as credit
enhancement, we provide no support or recourse for the risk of
loss relating to default on the assets transferred to the trust.
In addition, we are paid a monthly servicing fee equal to
one-twelfth of 1.0% of the aggregate balance of such trade
receivables and equipment loans.
</FONT>

<P align="left">
<I><FONT size="2">Liquidity.</FONT></I><FONT size="2"> Our
principal sources of liquidity are cash flows generated from
operations and borrowings under our
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
new credit facility. Our principal uses of liquidity are to meet
debt service requirements, finance our capital expenditures and
provide working capital. We expect that capital expenditures in
2004 will not exceed $7.4&nbsp;million. We expect the ongoing
requirements for debt service, capital expenditures and working
capital will be funded by internally generated cash flow and
borrowings under the revolving credit facility. As of
December&nbsp;31, 2003, we had $292.2&nbsp;million of
indebtedness outstanding.
</FONT>

<P align="left">
<FONT size="2">At December&nbsp;31, 2003, we had outstanding
debt of $157.0&nbsp;million under the existing term loan
facility, $110.0&nbsp;million of existing senior subordinated
notes, $24.2&nbsp;million of junior subordinated notes,
$0.6&nbsp;million of borrowings pursuant to a Wisconsin
Community Development Block Grant Agreement and
$0.4&nbsp;million of borrowings pursuant to an equipment
financing transaction with Alliant Energy&nbsp;&#151; Wisconsin
Power&nbsp;&#38; Light Company. At December&nbsp;31, 2003 there
were no borrowings under our existing revolving credit facility.
Letters of credit issued on our behalf under the existing
revolving credit facility totaled $25.3&nbsp;million at
December&nbsp;31, 2003. At December&nbsp;31, 2003, we had
$19.7&nbsp;million of our existing $45.0&nbsp;million revolving
credit facility available subject to certain limitations under
our existing $238.0&nbsp;million senior credit facility. After
considering such limitations, which relate primarily to the
maximum ratio of consolidated debt to EBITDA (as defined by the
existing senior credit facility), we could have borrowed
$19.7&nbsp;million at December&nbsp;31, 2003 in additional
indebtedness under the existing revolving credit facility. The
maximum ratio of consolidated debt to EBITDA under the existing
senior credit facility is scheduled to be reduced from 5.50 at
December&nbsp;31, 2003 to 4.75 at December&nbsp;31, 2004.
</FONT>

<P align="left">
<FONT size="2">The existing term loan facility is repayable in
the following aggregate annual amounts:
</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="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 align="center" nowrap><B><FONT size="1">Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount Due</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><FONT size="1">(In millions)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2004
    </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">11.0</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">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">13.2</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">2006
    </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">17.7</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">2007
    </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">115.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">The existing term loan facility is also subject
to mandatory prepayment with the proceeds of certain debt
incurrences, asset sales and a portion of Excess Cash Flow (as
defined in the existing senior credit facility). The existing
revolving credit facility will terminate on August&nbsp;5, 2007.
</FONT>

<P align="left">
<FONT size="2">Our ability to make scheduled payments of
principal or to pay the interest or liquidated damages, if any,
or to refinance our indebtedness, or to fund planned capital
expenditures, will depend upon our future performance, which in
turn is subject to general economic, financial, competitive and
other factors that are beyond our control. There can be no
assurance, therefore, that our business will continue to
generate sufficient cash flow from operations in the future to
service our debt and make necessary capital
</FONT>

<P align="center"><FONT size="2">58
</FONT>

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<DIV align="left">
<FONT size="2">expenditures after satisfying certain liabilities
arising in the ordinary course of business. If unable to do so,
we may be required to refinance all or a portion of our existing
debt, to sell assets or to obtain additional financing. There
can be no assurance that any such refinancing would be available
or that any such sales of assets or additional financing could
be obtained.
</FONT>
</DIV>

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

<P align="left">
<FONT size="2">A summary of our contractual commitments under
debt and lease agreements at December&nbsp;31, 2003 and the
effect such obligations are expected to have on liquidity and
cash flow in future periods appears below.
</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="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="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></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Less Than</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">1-3</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">4-5</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">After</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Contractual Obligations</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">1&nbsp;Year</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Years</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Years</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">5&nbsp;Years</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>
</TR>

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

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="19" align="center" nowrap><FONT size="1">(In thousands)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD 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 align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">292,199</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,270</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,328</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">225,291</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,310</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">Operating leases
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,190</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">507</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">599</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Purchase commitments*
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,488</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">13,488</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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT 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">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">7,888</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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,888</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">Total contractual cash obligations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">314,765</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,265</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31,927</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">225,357</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,216</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>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="33%" align="left" noshade>
</DIV>
<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">&nbsp;*</FONT></TD>
    <TD align="left">
    <FONT size="2">Purchase commitments are based on our estimate of
    the liability we could incur under open and blanket purchase
    orders for inventory related items.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD><FONT size="2">**</FONT></TD>
    <TD align="left">
    <FONT size="2">Other long-term obligations represent future
    payment requirements associated with deferred compensation
    agreements and redeemable preferred equity.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">We do not have any significant guarantees of debt
or other commitments to third parties.
</FONT>

<P align="left">
<B><FONT size="2">Off-Balance Sheet Arrangements</FONT></B>

<P align="left">
<FONT size="2">Through our special-purpose bankruptcy remote
subsidiary, we entered into the $300.0&nbsp;million asset backed
facility as described above. Pursuant to the terms of the asset
backed facility, we provide credit enhancement to the note
purchasers (including an irrevocable letter of credit, which is
an unconditional lending commitment of the lenders under the
existing senior credit facility) subject to certain limits. We
are obligated under the reimbursement provisions of the existing
senior credit facility to reimburse the lenders for any drawings
on the credit enhancement by the facility indenture trustee. If
the credit enhancement is not replenished by us after a drawing,
the trust is prohibited from request new borrowings under the
asset backed facility and the asset backed facility will begin
to amortize. The amount of the irrevocable letter of credit
related to the asset backed facility at December&nbsp;31, 2003
was $24.0&nbsp;million.
</FONT>

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

<P align="left">
<FONT size="2">After giving effect to this offering, the
expected use of proceeds and the new credit facility, we believe
that our net cash provided by operating activities and borrowing
capacity under the new credit facility will be sufficient to
enable us to fund our liquidity needs for the foreseeable
future. Should we be unable to borrow under the new credit
facility, we would seek other sources of debt or equity funding.
However, we cannot assure you that we will be successful in
obtaining alternate sources of funding in sufficient amounts or
on acceptable terms.
</FONT>

<P align="center"><FONT size="2">59
</FONT>

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<P align="left">
<FONT size="2">Our summary cash flows for the three years ending
December&nbsp;31, 2003 are as follows:
</FONT>

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

<TR>
    <TD width="67%"><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="3%"><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">Year Ended December&nbsp;31,</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" 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">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>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><FONT size="1">(In thousands)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <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 align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,338</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,775</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,393</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 cash 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">(4,964</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,563</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">(3,590</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">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">(15,806</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">(18,532</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(26,205</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>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net increase in cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">568</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,680</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">598</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">
<FONT size="2">Cash generated from operations for the twelve
months ended December&nbsp;31, 2003 of $30.4&nbsp;million was
derived from our earnings before depreciation and amortization
with a partial offset resulting from changes in working capital.
The working capital investment in accounts receivable at
December&nbsp;31, 2003 of $9.2&nbsp;million increased
$3.4&nbsp;million as compared to the balance of
$5.8&nbsp;million at December&nbsp;31, 2002. The investment in
beneficial interests in securitized accounts receivable at
December&nbsp;31, 2003 of $16.8&nbsp;million decreased
$3.1&nbsp;million as compared to the balance of
$19.9&nbsp;million at December&nbsp;31, 2002, which was
primarily attributable to a decrease in retained interests on
trade receivables sold under the asset backed facility. The
investment in notes receivable at December&nbsp;31, 2003 of
$8.2&nbsp;million decreased $3.0&nbsp;million as compared to the
balance of $11.2&nbsp;million at December&nbsp;31, 2002, which
was primarily attributable to a decrease in unsold notes carried
on our books. The investment in inventory at December&nbsp;31,
2003 of $26.2&nbsp;million increased $0.5&nbsp;million as
compared to the balance of $25.7&nbsp;million at
December&nbsp;31, 2002. The working capital investment in
accounts payable at December&nbsp;31, 2003 of $11.3&nbsp;million
decreased $2.5&nbsp;million as compared to the balance of
$13.8&nbsp;million at December&nbsp;31, 2002.
</FONT>

<P align="left">
<FONT size="2">Cash generated from operations for the twelve
months ended December&nbsp;31, 2002 of $22.8&nbsp;million was
principally derived from our earnings before depreciation and
amortization as well as changes in working capital. The working
capital investment in accounts receivable at December&nbsp;31,
2002 of $5.8&nbsp;million decreased $4.6&nbsp;million as
compared to the balance of $10.4&nbsp;million at
December&nbsp;31, 2001. The investment in beneficial interests
in securitized accounts receivable at December&nbsp;31, 2002 of
$19.9&nbsp;million increased $13.0&nbsp;million as compared to
the balance of $6.9&nbsp;million at December&nbsp;31, 2001,
which was primarily attributable to an increase in retained
interests on trade receivables sold under the asset backed
facility as compared to retained interests associated with the
prior trade receivables facility. The investment in notes
receivable at December&nbsp;31, 2002 of $11.2&nbsp;million
increased $2.7&nbsp;million as compared to the balance of
$8.5&nbsp;million at December&nbsp;31, 2001, which was primarily
attributable to an increase in unsold notes carried on our
books. The investment in beneficial interests in securitized
financial assets at December&nbsp;31, 2002 of $21.5&nbsp;million
decreased $6.7&nbsp;million as compared to the balance of
$28.2&nbsp;million at December&nbsp;31, 2001, which was
primarily attributable to a decrease in retained interests on
equipment loans sold under the asset backed facility as compared
to retained interests associated with the prior notes
receivables facility. The investment in inventory at
December&nbsp;31, 2002 of $25.7&nbsp;million decreased
$4.2&nbsp;million as compared to the balance of
$29.9&nbsp;million at December&nbsp;31, 2001. The working
capital investment in accounts payable at December&nbsp;31, 2002
of $13.8&nbsp;million increased $1.6&nbsp;million as compared to
the balance of $12.2&nbsp;million at December&nbsp;31, 2001.
</FONT>

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

<P align="left">
<FONT size="2">Our capital expenditures for the twelve months
ended December&nbsp;31, 2003 and December&nbsp;31, 2002 were
$3.6&nbsp;million and $2.7&nbsp;million, respectively. Capital
spending in 2003 and 2002 was principally oriented toward
product enhancements and reducing manufacturing costs.
</FONT>

<P align="left">
<B><FONT size="2">Recently Issued Accounting
Pronouncements</FONT></B>

<P align="left">
<FONT size="2">In June 2001, the Financial Accounting Standards
Board, or FASB, issued Statement of Financial Accounting
Standards, or SFAS, No.&nbsp;143, &#147;Accounting for Asset
Retirement Obligations.&#148; This statement addresses the
financial accounting and reporting for obligations associated
with the retirement of tangible
</FONT>

<P align="center"><FONT size="2">60
</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">long-lived assets and the associated asset
retirement costs. The provisions of SFAS&nbsp;No.&nbsp;143 are
effective for fiscal years beginning after June&nbsp;15, 2002.
We adopted SFAS&nbsp;No.&nbsp;143 effective January&nbsp;1,
2003. The adoption did not have any impact on the consolidated
financial statements.
</FONT>
</DIV>

<P align="left">
<FONT size="2">In November 2002, the FASB issued FASB
Interpretation No., or FIN&nbsp;45, &#147;Guarantor&#146;s
Accounting and Disclosure Requirements for
Guarantees,&nbsp;Including Indirect Guarantees of Indebtedness
of Others.&#148; FIN&nbsp;45 requires that upon issuance of a
guarantee, the guarantor must recognize a liability for the fair
value of the obligation it assumes under that guarantee. In
addition, FIN&nbsp;45 requires additional disclosures about the
guarantees that an entity has issued, including a reconciliation
of the changes in the entity&#146;s product warranty liabilities
during the reporting period. The initial recognition and
measurement provisions of FIN&nbsp;45 are applicable on a
prospective basis to guarantees issued or modified after
December&nbsp;31, 2002. We adopted the provisions of this
statement effective January&nbsp;1, 2003. The adoption of the
recognition and measurement provisions did not have a material
impact on the consolidated financial statements.
</FONT>

<P align="left">
<FONT size="2">During January 2003, the FASB issued FIN&nbsp;46,
&#147;Consolidation of Variable Interest Entities,&#148; which
clarifies the consolidation and disclosure requirements related
to variable interests in a variable interest entity. A variable
interest entity is an entity for which control is achieved
through means other than voting rights. In December 2003, the
FASB issued a revision to FIN&nbsp;46, which replaced
FIN&nbsp;46. The revised Interpretation, or FIN&nbsp;46-R, must
be adopted by us, based upon our status as a non-public entity
as defined by FIN&nbsp;46-R, beginning on January&nbsp;1, 2005
for interests in entities created on or before December&nbsp;31,
2003 and as of the date we first become involved with a
potential variable interest entity created after
December&nbsp;31, 2003.
</FONT>

<P align="left">
<FONT size="2">FIN&nbsp;46-R provides exceptions from its scope
for certain entities, including qualifying special-purpose
securitization entities subject to the reporting requirement of
SFAS&nbsp;No.&nbsp;140 and business entities, as defined, that
do not possess certain characteristics.
</FONT>

<P align="left">
<FONT size="2">Our primary variable interests are notes
receivable that have not been sold and are comprised primarily
of equipment loans to laundromat operators and other end-users.
Excluding notes awaiting sale, the carrying value of such loans
was approximately $4.5&nbsp;million at December&nbsp;31, 2003.
We are continuing our evaluation of FIN&nbsp;46-R and
accordingly, cannot at this time determine the effects of
adoption, if any, on our consolidated financial statements. If
in the future, however, we are required to consolidate a
variable interest entity in which one or both of our
SFAS&nbsp;No.&nbsp;140 qualifying special-purpose entities also
holds a variable interest, the qualifying status of the
special-purpose entity with such holdings would be eliminated.
In that instance, we would be required to determine if we are
the primary beneficiary of the affected securitization entity
under FIN&nbsp;46-R and if so, to consolidate that entity, which
would have a material effect on our consolidated financial
position, results of operations and cash flows.
</FONT>

<P align="left">
<FONT size="2">During April 2003, the FASB issued
SFAS&nbsp;No.&nbsp;149, &#147;Amendment of Statement&nbsp;133 on
Derivative Instruments and Hedging Activities,&#148; which
amends and clarifies financial accounting and reporting for
certain derivative instruments modified or entered into after
June&nbsp;30, 2003. Generally, the provisions of
SFAS&nbsp;No.&nbsp;149 are effective beginning July&nbsp;1,
2003. We adopted SFAS&nbsp;No.&nbsp;149 effective July&nbsp;1,
2003. The adoption did not have any impact on our consolidated
financial statements.
</FONT>

<P align="left">
<FONT size="2">During May 2003, the FASB issued
SFAS&nbsp;No.&nbsp;150, &#147;Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and
Equity,&#148; which establishes standards for the classification
and measurement of certain financial instruments with
characteristics of both liabilities and equity. The FASB has
also subsequently issued certain staff positions that
effectively amended SFAS&nbsp;No.&nbsp;150. The statement became
effective for us beginning January&nbsp;1, 2004. The adoption of
SFAS&nbsp;No.&nbsp;150, as amended, will result in
classification of our mandatorily redeemable preferred equity as
a liability.
</FONT>

<P align="left">
<FONT size="2">During December 2003, the FASB revised
SFAS&nbsp;No.&nbsp;132, &#147;Employers&#146; Disclosures about
Pensions and Other Postretirement Benefits,&#148; to require
additional disclosures about the assets, obligations, cash
flows, and net periodic benefit cost of defined benefit pension
plans and other defined benefit postretirement plans. These
disclosure requirements are effective immediately for our plans,
except for estimated future benefit payments, which will be
effective in 2004. This statement also requires interim-period
disclosures of
</FONT>

<P align="center"><FONT size="2">61
</FONT>

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<DIV align="left">
<FONT size="2">the components of net periodic benefit cost and,
if significantly different from previously disclosed amounts,
the amount of contributions and projected contributions to fund
pension and other postretirements benefit plans. These
interim-period disclosures will be effective for us in the first
quarter of 2004.
</FONT>
</DIV>

<P align="left">
<FONT size="2">In December 2003, the staff of the SEC issued
Staff Accounting Bulletin, or SAB, No.&nbsp;104, &#147;Revenue
Recognition&#148;, which supercedes SAB No.&nbsp;101,
&#147;Revenue Recognition in Financial Statements&#148;. SAB
No.&nbsp;104&#146;s primary purpose is to rescind accounting
guidance contained in SAB No.&nbsp;101 related to multiple
element revenue arrangements, superceded as a result of the
issuance of EITF&nbsp;00-21, &#147;Accounting for Revenue
Arrangements with Multiple Deliverables.&#148; Additionally, SAB
No.&nbsp;104 rescinds the SEC&#146;s Revenue Recognition in
Financial Statements Frequently Asked Questions and Answers, or
the FAQ, issued with SAB No.&nbsp;101. Selected portions of the
FAQ have been incorporated into SAB&nbsp;104. While the wording
of SAB No.&nbsp;104 has changed to reflect the issuance of
EITF&nbsp;00-21, the revenue recognition principles of SAB
No.&nbsp;101 remain largely unchanged by the issuance of SAB
No.&nbsp;104. The adoption of SAB No.&nbsp;104 did not have any
impact upon our consolidated financial statements.
</FONT>

<P align="left">
<FONT size="2">The FASB is expected to re-expose a proposed
statement in the first quarter of 2004 that would amend and
clarify SFAS&nbsp;No.&nbsp;140 (and related implementation
guidance). The proposed statement will address permitted
activities of qualifying special-purpose entities, including the
degree of discretion allowable in determining the terms of
beneficial interests issued after inception, and whether certain
transfers can meet the criteria for sale accounting under
SFAS&nbsp;No.&nbsp;140 if the transferor or any consolidated
affiliate provides liquidity support for the transferee&#146;s
beneficial interests. As the proposed statement has not been
issued, we are unable to determine the effects, if any, on our
existing securitization entities, or the related transition
provisions. However, in the event that transfers to our existing
asset backed facility would no longer qualify as sales of
financial assets in the future, we may recognize additional
costs for a replacement facility or other material financial
statement effects.
</FONT>

<P align="left">
<B><FONT size="2">Quantitative And Qualitative Disclosures About
Market Risk</FONT></B>

<P align="left">
<FONT size="2">We are potentially exposed to market risk
associated with changes in interest and foreign exchange rates.
From time to time, we do hedge exchange rate fluctuations
between United States dollars and foreign currencies for
purchases of inventory components. These amounts are not
material to our operations. Additionally, from time to time, we
may enter into derivative financial instruments to hedge our
interest rate exposures. We do not enter into derivatives for
speculative purposes. We currently do not hedge commodities for
purchased raw materials and components.
</FONT>

<P align="left">
<FONT size="2">Revenue from international customers represented
approximately 12.7% of our 2003&nbsp;net revenues. At
December&nbsp;31, 2003, there were no material non-United States
dollar denominated financial instruments outstanding which
exposed us to foreign exchange risk.
</FONT>

<P align="left">
<FONT size="2">As noted above, we are exposed to market risk
associated with adverse movements in interest rates.
Specifically, we are primarily exposed to changes in the fair
value of our existing $110.0&nbsp;million senior subordinated
notes, and to changes in earnings and related cash flows on our
variable interest rate debt obligations outstanding under the
existing senior credit facility and our retained interests
related to trade accounts receivable and equipment loans sold to
our special-purpose securitization entities. Borrowings
outstanding under the existing senior credit facility totaled
$157.0&nbsp;million at December&nbsp;31, 2003.
</FONT>

<P align="left">
<FONT size="2">The fair value of our existing senior
subordinated notes was approximately $110.6&nbsp;million based
upon prevailing prices in recent market transactions as of
December&nbsp;31, 2003. We estimate that this fair value would
increase/ decrease by approximately $3.7&nbsp;million based upon
an assumed 10% decrease/ increase in interest rates compared
with the effective yield on the existing senior subordinated
notes as of December&nbsp;31, 2003.
</FONT>

<P align="left">
<FONT size="2">An assumed 10% increase/decrease in the variable
interest rate of 4.7% in effect at December&nbsp;31, 2003
related to the term loan borrowings outstanding under the
existing senior credit facility would decrease/increase
annualized earnings and cash flows by approximately
$1.0&nbsp;million.
</FONT>

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<FONT size="2">On December&nbsp;12, 2002, we entered into an
$80.0&nbsp;million interest rate swap agreement with Lehman
Brothers Special Financing Inc. to hedge a portion of our
interest rate risk related to our term loan borrowings under the
existing senior credit facility. Under the swap, which matures
on January&nbsp;6, 2006, we pay a fixed rate of 3.06%, and
receive or pay quarterly interest payments based upon
3&nbsp;month LIBOR. Under the swap, net cash interest paid
during 2003 was $1.1&nbsp;million. The fair value of this
interest rate swap agreement, which represents the amount that
we would pay to settle the instrument, was $1.9&nbsp;million at
December&nbsp;31, 2003.
</FONT>

<P align="left">
<FONT size="2">An assumed 10% increase/ decrease in interest
rates under our special-purpose entities at December&nbsp;31,
2003 would not have a material effect on the fair value of the
retained interest in sold trade accounts receivable due to the
short-term nature of the underlying receivables. Finally, based
upon the mix of variable and fixed rate equipment loans we have
sold, a 10% increase/decrease in interest rates would decrease/
increase the fair value of our retained interests at
December&nbsp;31, 2003 of $22.7&nbsp;million by approximately
$0.5&nbsp;million.
</FONT>

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

<P align="left">
<FONT size="2">We do not believe that inflation has had a
material adverse impact on our business or operating results
during the periods presented. We cannot assure you, however,
that our business will not be affected by inflation in the
future.
</FONT>

<P align="center"><FONT size="2">63
</FONT>

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

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<P align="center">
<B>Business</B>

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

<P align="left">
<FONT size="2">We are the leading designer, manufacturer and
marketer in North America of commercial laundry equipment used
in laundromats, multi-housing laundries and on-premise
laundries. Under the well-known brand names of Speed Queen(R),
UniMac(R) and Huebsch(R), we produce a full line of commercial
washing machines and dryers with load capacities from 16 to 250
pounds. We believe we have been the market share leader in the
North American stand alone commercial laundry equipment industry
for more than ten years. With a market share of approximately
39% in 2003, we believe our sales are more than twice as large
as those of the next largest competitor.
</FONT>

<P align="left">
<FONT size="2">We serve three distinct end-customer groups:
(i)&nbsp;laundromats; (ii)&nbsp;multi-housing laundries,
consisting primarily of common laundry facilities in apartment
buildings, universities and military installations; and
(iii)&nbsp;on-premise laundries, consisting primarily of
in-house laundry facilities in hotels, hospitals, nursing homes
and prisons. The primary means of serving these end-customers is
through distributors and route operators. We reach laundromat
and on-premise laundry end-customers through a network of over
200 North American distributors and over 100 international
distributors, serving over 90&nbsp;countries. Our distributors
purchase equipment from us, then re-sell and install it for
laundromat and on-premise end-customers. We serve multi-housing
end-customers through a network of over 80&nbsp;route operators.
Route operators purchase equipment from us, and then obtain
leases from multi-housing property managers to place it into
common laundry rooms.
</FONT>

<P align="left">
<FONT size="2">We believe that we have the most extensive
distribution network in North America which gives us a
significant competitive advantage. We estimate that our
distributors and route operators have either the number one or
number two market position in over 80% of North American
markets. We believe that the superior quality and loyalty of our
distribution network has been a significant factor in achieving
the number one market share in North America in each of our
three end-customer groups.
</FONT>

<P align="left">
<FONT size="2">We estimate that the North American stand alone
commercial laundry equipment industry generated approximately
$472.0&nbsp;million in revenue in 2003. The industry&#146;s
revenues are primarily driven by population growth and the
replacement cycle of laundry equipment. North American consumers
view clean clothes as a necessity, with economic conditions
having limited effect on the frequency of use, and therefore the
useful life, of laundry equipment. As a result, the
industry&#146;s revenues have been relatively stable over time
and through economic downturns.
</FONT>

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

<P align="left">
<FONT size="2">Our business began in 1908 when we introduced a
hand-operated washer to the marketplace. Industry leading
features were introduced under the Speed Queen&#174; brand with
the introduction of stainless steel wash tubs in 1938 and
automatic washers and dryers in 1952. In 1956, McGraw Electric
Company purchased our business. Manufacturing and marketing of
coin-operated laundry equipment began in 1957. The addition of
Huebsch&#174; brand commercial tumblers in 1978 further expanded
our product line. In 1979, Raytheon Company purchased our
business. During the next 19&nbsp;years, we expanded the
capabilities of our commercial laundry business by purchasing
the UniMac&#174; product line and established ourselves as a
leader in the commercial laundry industry. Following an
initiative by Raytheon to divest itself of its commercial
laundry business, on May&nbsp;5, 1998, Bain/ RCL, L.L.C., an
investment group led by BRS/ RCL Investment Corp. and members of
our management, acquired 93% common equity interest in us with
Raytheon continuing to own 7% of the common interests. In late
2003, Raytheon sold all of its debt and equity interests to a
group of investors consisting of affiliates of each of Trust
Company of the West, or TCW, and Sankaty Advisors. We have
continued to expand our commercial laundry business by
purchasing the Ajax&#174; product lines in 2000.
</FONT>

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

<P align="left">
<FONT size="2">We believe that we have the following competitive
strengths:
</FONT>

<P align="left">
<I><FONT size="2">Market Leader with Significant Installed
Base.</FONT></I><FONT size="2"> We are the market share leader
in the overall North American stand alone commercial laundry
equipment industry, and we believe that our sales are more than
twice as large as those of the next largest competitor. We have
grown overall market share to approximately 39% in 2003 from 21%
in 1993. In addition to leading the overall market, we are the
leader in sales to each of our three primary end-customer groups.
</FONT>

<P align="center">
<B><FONT size="2">Leading and Growing Market Share</FONT></B>

<DIV align="center">
<B><FONT size="2">North American Stand Alone Commercial Laundry
Equipment(1)</FONT></B>
</DIV>

<P align="center">
<IMG src="y95720y9572000.gif" alt="(CHART SHOWING LEADING AND GROWING MARKET SHARE)">

<P align="left">
<HR size="1" width="33%" 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">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Management estimates.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">As a result of our market leadership for more
than ten years, we believe that we have the largest installed
base of equipment in North America comprised of over two million
machines. A significant majority of our revenue is attributable
to replacement sales driven by our large installed base combined
with an average ten year estimated life per machine.
</FONT>

<P align="left">
<I><FONT size="2">Stable Revenues and Increasing Cash Flow.
</FONT></I><FONT size="2">We have experienced stable revenues
even during economic slowdowns, driven by the underlying
stability of the industry and the recurring sales of replacement
equipment and service parts which together comprise the majority
of our revenues. In addition, since 1995, we have progressively
reduced our manufacturing costs through improvements in raw
material usage and labor efficiency, as well as through plant
consolidation, resulting in improving cash from operations as
demonstrated by our historical financial performance. Our net
cash from operating activities was approximately
$11.7&nbsp;million, $15.3&nbsp;million, $21.3&nbsp;million,
$22.8&nbsp;million and $30.4&nbsp;million for 1999, 2000, 2001,
2002 and 2003, respectively.
</FONT>

<P align="left">
<I><FONT size="2">Limited Working Capital and Consistent Capital
Expenditure Requirements. </FONT></I><FONT size="2">We
aggressively manage our working capital requirements, having
reduced net working capital as a percent of revenue from 8.2% in
2000 to 6.7% in 2003. From December of 2000 to December of 2003,
inventory was reduced from $37.5&nbsp;million to
$26.2&nbsp;million, an improvement of 30.0%. We also have
consistent capital expenditure
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">requirements, with maintenance capital
expenditures of $3.6&nbsp;million, $2.6&nbsp;million,
$3.6&nbsp;million, $2.7&nbsp;million and $3.6&nbsp;million, for
1999, 2000, 2001, 2002 and 2003, respectively. We believe that
we currently have excess manufacturing capacity and can increase
production without incurring significant additional capital
expenditures.
</FONT>
</DIV>

<P align="left">
<I><FONT size="2">Extensive and Loyal Distribution
Network.</FONT></I><FONT size="2"> We believe we have developed
the most extensive distribution network in the North American
industry, with over 200 distributors and 80 route operators. We
estimate that our laundromat and on-premise laundry distributors
and multi-housing route operators have either the number one or
number two market position in over 80% of North American
markets. These leading distributors and route operators are
attracted by our industry-leading brand equity, broad product
array, significant installed base and our comprehensive
value-added support, which includes training, extensive
electronic support of installation and service and joint
promotion efforts. These factors lead to high costs for
distributors and route operators to switch manufacturers,
especially when combined with their substantial investments in
service parts inventories and in training their sales and
installation personnel with respect to our highly engineered
products. Our customers place great value on the proven
reliability of our products, backed by years of demonstrated
experience in the field, as this significantly impacts their
long term repair and maintenance expenses. We have not
experienced any significant turnover of our distributors and
route operators, of which a significant number have been
customers for over ten years.
</FONT>

<P align="left">
<I><FONT size="2">High Barriers to Entry.
</FONT></I><FONT size="2">We believe that significant time and
substantial capital investment would be required for a new
entrant to compete effectively in this market. Many years of
engineering and field testing, plus substantial investment in
plant and equipment, are required before the process of
attempting to earn market share can take place. In addition, a
new entrant would have to break the strong, established
relationships that existing manufacturers have developed with
distributors. There are significant costs for distributors and
route operators to break these long-term relationships,
including extensive retraining of distributors&#146; and route
operators&#146; sales, installation and service personnel and
duplication of service parts inventories which must be stocked
for years.
</FONT>

<P align="left">
<I><FONT size="2">Comprehensive and Innovative Product Offering.
</FONT></I><FONT size="2">We believe our product lines lead the
industry in reliability, breadth of offerings, functionality and
advanced features. In addition, we believe we are the only
manufacturer in North America to produce a full product line
(including topload washers, dryers, frontload washers,
washer-extractors and tumbler dryers for all commercial customer
groups), thereby providing customers with a single source
solution for all their stand alone commercial laundry equipment
needs. Our development team of more than 80 engineers and
technical personnel, along with our marketing and sales
personnel, work together with our major customers to redesign
and enhance our products to better meet customer needs. For
example, new products such as our NetMaster<SUP>TM</SUP> system
emphasize efficiency and feature new electronic controls,
facilitating ease of use as well as improving performance and
reliability. In 1999, for example, in response to customer
demand, we introduced a new line of small-chassis frontload
washers, offering increased water and energy efficiency to
multi-housing laundries. Similarly, in late 2000, we introduced
our NetMaster<SUP>TM</SUP> system of technologically advanced
laundry products offering multi-housing and laundromat operators
more flexibility and accountability, allowing operators to
change vend prices, cycle times, rinse options and cycle
selections from a remote site while also auditing machine
operation. We estimate that since the introduction of the
NetMaster<SUP>TM</SUP> system, over 300 laundries have been
built with this product, with approximately 20% of those being
fully networked. In addition, our Wash Alert<SUP>TM</SUP> system
allows students to view the availability of equipment in their
common laundry areas and to view the status of their laundry
from the convenience of their dorm room.
</FONT>

<P align="left">
<I><FONT size="2">Leading North American Brands.
</FONT></I><FONT size="2">We market and sell our products under
the widely recognized brand names Speed Queen&#174;,
UniMac&#174;, Huebsch&#174; and Ajax&#174;. We believe that we
have industry-leading brand equity and brand recognition, based
upon historical customer survey results and the substantial
market share growth achieved since 1993.
</FONT>

<P align="left">
<I><FONT size="2">Strong and Experienced Management Team.
</FONT></I><FONT size="2">Led by chief executive officer Thomas
L&#146;Esperance, we have assembled a strong and experienced
management team. Our seven executive officers average over
16&nbsp;years of experience in the commercial laundry equipment
and appliance industries. This management team has
</FONT>

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<DIV align="left">
<FONT size="2">executed numerous strategic initiatives,
including: (i)&nbsp;developing strategic alliances with key
customers; (ii)&nbsp;acquiring and successfully integrating the
commercial washer-extractor business of UniMac&#174; and the
press and finishing equipment business of Ajax&#174;;
(iii)&nbsp;implementing manufacturing cost reduction and quality
improvement programs; and (iv)&nbsp;ongoing refinements to our
product offerings. Management&#146;s economic interests will
align with those of securityholders through management&#146;s
participation in our long-term incentive plan.
</FONT>
</DIV>

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

<P align="left">
<FONT size="2">We strive to continue our strong financial
performance and selectively pursue growth opportunities by
offering to our customers a full line of the most reliable and
functional stand alone commercial laundry equipment, together
with industry-leading, comprehensive value-added services. The
key elements of our strategy are as follows:
</FONT>

<P align="left">
<I><FONT size="2">Develop and Strengthen Relationships with Key
Customers.</FONT></I><FONT size="2"> We have developed and will
continue to pursue long-term relationships and supply agreements
with key customers. The relationships that we establish with our
customers are comprehensive and include training, extensive
technical support and promotion activities. In addition, we
model our product development efforts to meet evolving customer
preferences by working with key customers to develop new
products, features and value-added services.
</FONT>

<P align="left">
<FONT size="2">We have not experienced any significant customer
turnover. Our top ten customers, other than a significant new
account that was added in 2003, have been our customers for at
least ten years. For example, we currently sell our products to
Coinmach Corporation, our largest customer, under a multi-year
supply agreement. Coinmach, which is the largest operator of
multi-housing laundries in North America, has been a significant
customer of ours for over two decades.
</FONT>

<P align="left">
<I><FONT size="2">Continue to Improve Manufacturing Operations.
</FONT></I><FONT size="2">We seek to continuously enhance our
product quality and reduce costs through ongoing refinements to
our manufacturing processes. We achieve such improvements, and
intend to continue doing so, through collaboration among key
customers, suppliers and our engineering and marketing
personnel. Since 1996, we have progressively reduced our
manufacturing costs through improvements in raw material usage
and labor efficiency, as well as plant consolidation. Since
2000, we have been implementing a demand flow production system
on our higher volume product lines. These process changes have
resulted in significant improvements in assembly efficiency,
inventory levels, customer order lead times and production
quality. For example, labor productivity improved by 4.5% from
2002 to 2003, and over the same period, we improved our first
year warranty incident rate by 20% from an already industry
leading level of 0.2% of sales.
</FONT>

<P align="left">
<I><FONT size="2">Expand into the U.S.&nbsp;Home Laundry Market.
</FONT></I><FONT size="2">We are planning to re-enter the
U.S.&nbsp;home laundry market in October 2004, after the
expiration of a non-compete agreement. This non-compete
agreement was a result of the divestiture of a sister division
in 1997. Our strategy in the home laundry market will be
dual-pronged. First, we plan to re-enter the mid to high-end
home laundry market with existing products that we currently
sell internationally and into other markets. These existing
products are designed to have useful lives approximately twice
that of typical home laundry equipment. Before exiting the home
laundry market pursuant to the non-compete agreement, we
produced annual home laundry units of about 500,000 for a 5%
market share of annual home laundry units, which generated
approximately $150&nbsp;million in annual sales. We plan to
leverage the strong brand equity of our Speed Queen&#174; name
in order to recapture our historic market share.
</FONT>

<P align="left">
<FONT size="2">Second, we have signed a letter-of-intent with an
ultra-premium home appliance company to produce
professional-quality home laundry equipment to be sold under
their brand name. This equipment is based completely on our
current commercial equipment technology and production methods.
These plans to enter both the mid to high-end and the
ultra-premium home laundry markets should allow us to expand our
sales and continue to diversify our customer base. These
products will be produced in our current facilities with minimal
incremental capital expenditures.
</FONT>

<P align="center"><FONT size="2">67
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<P align="left">
<B><FONT size="2">Industry Overview</FONT></B>

<P align="left">
<FONT size="2">We estimate that North American stand alone
commercial laundry equipment sales were approximately
$472.0&nbsp;million in 2003, of which our equipment revenue
represented approximately $181.5&nbsp;million. We believe that
the North American market for stand alone commercial laundry
equipment has grown at a compound annual rate of approximately
1.2% since 1993. North American commercial laundry equipment
sales historically have been relatively insulated from business
and economic cycles, given that economic conditions tend not to
affect the frequency of use, or replacement, of laundry
equipment. We believe steady industry growth will be sustained
by continued population expansion and by customers increasingly
&#147;trading up&#148; to equipment with enhanced functionality
and higher average selling prices.
</FONT>

<P align="left">
<FONT size="2">Manufacturers of stand alone commercial laundry
equipment compete on their ability to satisfy several customer
criteria, including: (i)&nbsp;equipment reliability and
durability; (ii)&nbsp;performance criteria such as water and
energy efficiency, load capacity and ease of use; (iii)&nbsp;the
availability of innovative technologies such as cashless payment
systems and advanced electronic controls, which improve ease of
use and management audit capabilities; and (iv)&nbsp;the supply
of value-added services such as rapid spare parts delivery,
equipment financing and computer-aided assistance in the design
of commercial laundries.
</FONT>

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

<P align="left">
<I><FONT size="2">Growth Drivers. </FONT></I><FONT size="2">We
believe that continued population expansion in North America
will continue to drive steady demand for garment and textile
laundering by all customer groups that purchase commercial
laundry equipment. We believe population growth has historically
supported replacement and some modest growth in the installed
base of commercial laundry equipment. According to the
U.S.&nbsp;Census Bureau, the United States population has grown
at a compound annual rate of 1.2% since 1993 and is projected to
grow at approximately 0.8%&nbsp;per year on average over the
next ten years. In addition to the North American market, we
anticipate growth in demand for commercial laundry equipment in
international markets, especially in developing countries where
laundry processing has historically been far less sophisticated
than in North America.
</FONT>

<P align="left">
<FONT size="2">In addition, customers are increasingly trading
up to equipment with enhanced functionality, thereby raising
average selling prices. For example, the larger national and
regional customers in the laundromat and multi-housing customer
groups are more likely to take advantage of recently available
electronic features, such as cashless payment systems and
advanced electronic controls which we believe provide these
customers with a competitive advantage. Customers are also
moving towards equipment with increased water and energy
efficiency as the result of government and consumer pressure and
a focus on containing operating costs.
</FONT>

<P align="left">
<I><FONT size="2">Limited End Use Cyclicality.
</FONT></I><FONT size="2">North American commercial laundry
equipment sales historically have been relatively insulated from
business and economic cycles because economic conditions tend
not to affect the frequency of use, or replacement, of laundry
equipment. The useful life of commercial laundry equipment, and
thus the timing of replacement of the equipment, are also
generally unaffected by economic conditions. The useful life of
stand alone commercial laundry equipment is generally 7 to
14&nbsp;years. Under all economic conditions, owners of
commercial laundries typically continue to use their equipment
until it can no longer be economically repaired or until
competition forces the owner to upgrade their equipment in order
to improve its appearance or functionality.
</FONT>

<P align="left">
<I><FONT size="2">International Growth.
</FONT></I><FONT size="2">We anticipate growth in demand for
commercial laundry equipment in international markets,
especially in developing countries where laundry needs are less
sophisticated than in North America.
</FONT>

<P align="left">
<I><FONT size="2">Reducing Customer Operating Costs.
</FONT></I><FONT size="2">The time required to wash and dry a
given load of laundry, which we refer to as cycle time, has a
significant impact on the economics of a commercial laundry
operation. Accordingly, commercial laundry equipment
manufacturers produce equipment that provides progressively
shorter cycle times through improved technology and product
innovation. This shorter cycle time decreases labor costs and
increases the volume of laundry that can be processed in a given
time period. Examples of
</FONT>

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<DIV align="left">
<FONT size="2">methods for reducing cycle time are:
(i)&nbsp;shortening fill, drain and wash times; and
(ii)&nbsp;decreasing water extraction time by increasing spin
speed. Our product enhancements in 2000 increased our topload
washer&#146;s spin speed to the fastest in the commercial
laundry equipment industry with its 710&nbsp;revolutions per
minute spin speed. The higher spin speed substantially increases
water extraction and thereby lowers moisture retention. For coin
laundromat and multi-housing laundry owners, the lower moisture
retention results in reduced energy bills for clothes drying
operations. Overall, this improvement provides faster drying
times, lower energy costs and the potential for increased
revenue generating cycles per day.
</FONT>
</DIV>

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

<P align="left">
<I><FONT size="2">Stand Alone Commercial Laundry
Equipment.</FONT></I><FONT size="2"> Each of the stand alone
commercial laundry equipment industry&#146;s three primary
customer groups&#151;laundromat operators, multi-housing laundry
operators and on-premise laundry operators&#151;is served
through a different distribution channel and has different
requirements with respect to equipment load capacity,
performance and operating features. Vended equipment purchased
by multi-housing route operators is most similar to consumer
machines sold to retail customers and is generally purchased
directly from us. Equipment purchased by laundromats and
on-premise laundries has greater durability, delivers increased
capacity, provides more sophisticated cleaning and faster drying
capabilities and is generally purchased through distributors.
</FONT>

<P align="center">
<B><FONT size="2">North American Stand Alone Commercial Laundry
Equipment Industry Sales(1)</FONT></B>

<DIV align="center">
<B><FONT size="2">($472&nbsp;million)</FONT></B>
</DIV>

<P align="center">
<IMG src="y95720y9572001.gif" alt="(NORTH AMERICAN STAND ALONE COMMERCIAL LAUNDRY EQUIPMENT INDUSTRY SALES)">

<P align="left">
<HR size="1" width="33%" 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">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Management estimates for 2003.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">69
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<P align="center">
<B><FONT size="2">Alliance Laundry North American Stand
Alone</FONT></B>

<DIV align="center">
<B><FONT size="2">Commercial Laundry Equipment Market
Shares(1)</FONT></B>
</DIV>

<P align="center">
<IMG src="y95720y9572002.gif" alt="(ALLIANCE LAUNDRY NORTH AMERICAN STAND ALONE COMMERCIAL LAUNDRY EQUIPMENT MKT SHARES)">

<P align="left">
<HR size="1" width="33%" 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">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Management estimates for 2003.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<I><FONT size="2">Laundromats. </FONT></I><FONT size="2">We
estimate that laundromats accounted for approximately 54% of the
sales for the North American stand alone commercial laundry
equipment industry in 2003 and we have a 31% market share for
this customer category. There are an estimated
35,000&nbsp;laundromats in North America. These laundromats
typically provide walk-in, self-service washing and drying and
primarily purchase commercial topload washers, washer-extractors
and tumblers. Washer-extractors and tumblers are
larger-capacity, higher-performance washing machines and
matching large capacity dryers, respectively. Laundromats have
historically been owned and operated by sole proprietors who
typically rely on distributors to find locations for stores,
design the laundromat, provide and install equipment and provide
technical and repair support and broader business services. For
example, distributors frequently host seminars for potential
laundromat proprietors on laundromat investment opportunities.
Independent laundromat proprietors also look to distributors and
manufacturers for equipment financing. Given the laundromat
owner&#146;s reliance on the services of its local distributor,
we believe that a strong distributor network in local markets
differentiates manufacturers which serve this customer group.
</FONT>

<P align="left">
<FONT size="2">In addition to distributor relationships, we
believe that laundromat owners choose among different
manufacturers&#146; products based on, among other things:
(i)&nbsp;availability of equipment financing;
(ii)&nbsp;reputation, reliability and ease and cost of repair;
(iii)&nbsp;the water and energy efficiency of the products
(approximately 25% of annual gross wash and dry revenue of
laundromats is consumed by utility costs, according to the Coin
Laundry Association, or CLA); and (iv)&nbsp;the efficient use of
physical space in the store (approximately 25% of annual gross
revenue of laundromats is expended on rent, according to the
CLA&#146;s &#147;2003 Coin Laundry Industry Survey&#148;).
</FONT>

<P align="left">
<I><FONT size="2">Multi-Housing Laundries.
</FONT></I><FONT size="2">We estimate that multi-housing
laundries accounted for approximately 27% of North American
stand alone commercial laundry equipment sales in 2003 and we
have a 46% market share for this customer category. These
laundries include common laundry facilities in multi-family
apartment and condominium complexes, universities and military
installations, as well as equipment for in-unit hook ups.
</FONT>

<P align="left">
<FONT size="2">Most products sold to multi-housing laundries are
small-chassis topload and frontload washers and small-chassis
dryers that are vended, but similar in appearance to those sold
to the retail consumer market and offer a variety of enhanced
durability and performance features such as audit functions that
keep track of
</FONT>

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<DIV align="left">
<FONT size="2">the number of cycles and the amount of money that
has been collected. We estimate that topload washers sold to
multi-housing laundries typically last up to 12,000 cycles,
approximately twice as long as the expected life of a consumer
machine.
</FONT>
</DIV>

<P align="left">
<FONT size="2">Multi-housing laundries are managed primarily by
route operators who purchase, install and service the equipment
under contract with building management. Route operators pay
rent (which may include a portion of the laundry&#146;s revenue)
to building management. Route operators are typically direct
customers of commercial laundry equipment manufacturers such as
ours and tend to maintain their own service and technical
staffs. Route operators compete for long-term contracts on the
basis of, among other things: (i)&nbsp;the reputation and
durability of their equipment; (ii)&nbsp;the level of
maintenance and quality of their repair service; (iii)&nbsp;the
ability of building management to audit laundry equipment
revenue; and (iv)&nbsp;the water and energy efficiency of
products.
</FONT>

<P align="left">
<FONT size="2">We believe reliability and durability are key
criteria for route operators and their property management
customers in selecting equipment, because these criteria help to
minimize equipment down time and repair costs. We also believe
route operators prefer water and energy efficient equipment that
offers enhanced electronic monitoring and tracking features
demanded by building management companies. Route operators are
reluctant to change equipment suppliers given their investments
in spare parts inventories and in sales and repair technician
training, particularly as laundry equipment becomes more
technically sophisticated. Therefore, we believe a large
installed base of laundry equipment gives a commercial laundry
equipment manufacturer a significant competitive advantage and a
high likelihood of substantial replacement sales.
</FONT>

<P align="left">
<I><FONT size="2">On-Premise Laundries.
</FONT></I><FONT size="2">We estimate that on-premise laundries
accounted for approximately 19% of North American stand alone
commercial laundry equipment sales in 2003 and we have a 51%
market share for this customer category. On-premise commercial
laundries are located at a wide variety of businesses that wash
or process textiles or laundry in large quantities, such as
hotels and motels, hospitals, nursing homes, sports facilities,
car washes and prisons.
</FONT>

<P align="left">
<FONT size="2">Most products sold to on-premise laundries are
washer-extractors and tumbler dryers, primarily in larger
capacities up to 250 pounds per load. These machines process
significantly larger loads of textiles and garments in shorter
times than equipment typically sold to laundromats or
multi-housing customer groups. Effective and rapid washing
(i.e., reduced cycle time) of hotel sheets, for example, reduces
both a hotel&#146;s linen requirements and labor costs of
washing and drying linens. We believe that in a typical
on-premise laundry within a hotel, up to 50% of the operating
costs is labor.
</FONT>

<P align="left">
<FONT size="2">On-premise laundries typically purchase equipment
through a distributor who provides a range of sales and repair
services on behalf of manufacturers. As with laundromats, we
believe a strong distributor network is a critical element of
sales success. On-premise laundries select their equipment based
on the availability of specified product features, including,
among other things: (i)&nbsp;reputation and reliability of
products; (ii)&nbsp;load capacity and cycle time;
(iii)&nbsp;water and energy efficiency; and (iv)&nbsp;ease of
use. In addition, the availability of technical support and
service is important when an on-premise laundry operator selects
an equipment supplier.
</FONT>

<P align="left">
<I><FONT size="2">Drycleaning.</FONT></I><FONT size="2"> We
estimate that North American drycleaning equipment sales were
approximately $210.0&nbsp;million in 2003. Until our
March&nbsp;6, 2000 acquisition of the Ajax&#174; press and
finishing equipment line, we offered only shirt laundering,
wetcleaning and drying equipment to the drycleaning market.
Approximately 34,000 drycleaners in North America provide
full-service drycleaning and wetcleaning for households. These
services include stain removal, cleaning, pressing, finishing
and packaging. In addition, many commercial drycleaners provide
laundry services for water-washable garments and rug cleaning
services and minor alteration and repair services.
</FONT>

<P align="left">
<FONT size="2">Drycleaners primarily purchase drycleaning
machines, presses and finishing equipment, washer-extractors,
tumblers and small-chassis topload washers and dryers.
Drycleaners primarily include independently operated
neighborhood cleaners, franchisees and specialty cleaners.
Drycleaners typically rely on distributors and chemical supply
companies to provide equipment, detergents, stain removers,
technical
</FONT>

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<DIV align="left">
<FONT size="2">support and broader business services. For
example, distributors and chemical suppliers provide training
seminars on the proper use of equipment and chemicals for
cleaning, stain removal and garment finishing.
</FONT>
</DIV>

<P align="left">
<FONT size="2">As with laundromats and on-premise laundries,
drycleaners typically purchase equipment through distributors
who can provide service parts, repair service and technical
support. Drycleaners select their equipment based on the
availability of specified product features, including, among
other things: (i)&nbsp;reputation and reliability;
(ii)&nbsp;load capacity and cycle time; (iii)&nbsp;ease of use
and (iv)&nbsp;solvent and energy efficiency.
</FONT>

<P align="left">
<B><FONT size="2">Products and Services</FONT></B>

<P align="left">
<FONT size="2">We offer a full line of stand alone commercial
laundry washers and dryers, with service parts and value-added
services supporting our products. Our products range from small
washers and dryers, primarily for use in laundromats and
multi-housing laundry rooms, to large laundry equipment with
load capacities of up to 250&nbsp;pounds used in on-premise
laundries. Our brands include the Speed Queen&#174;,
Huebsch&#174; and UniMac&#174; and are sold throughout North
America and in over 90 foreign countries. Additionally, we offer
laundry and drycleaning presses and shirt finishing equipment
under the Ajax&#174; brand. We also benefit from domestic and
international sales of service parts for our large installed
base of commercial laundry equipment. Internationally, we also
sell laundry equipment under private label brands in order to
take advantage of distribution networks of other companies and
to round out their product offerings.
</FONT>

<P align="left">
<FONT size="2">In 2003, we completed the successful introduction
of the Micro-electronic Display Control on our small chassis
product and the tumbler dryers. The Micro-electronic Display
Control offers an electronic interface between the
Micro-electronic Display Control and card readers from various
manufacturers offering enhanced features such as time of day and
multi-level pricing. Emerging energy and water consumption
standards are also met with the unique cycle programming of the
control. The introduction of the Micro-electronic Display
Control in conjunction with an upgraded electronic control on
the washer-extractors gave the Huebsch&#174; brand a full line
of electronically controlled equipment for the first time,
resulting in increased sales for this brand.
</FONT>

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

<P align="left">
<FONT size="2">Washers represented approximately 46% of our
2003&nbsp;net revenues and include washer-extractors, topload
washers and frontload washers.
</FONT>

<P align="left">
<I><FONT size="2">Washer-Extractors.
</FONT></I><FONT size="2">We manufacture washer-extractors, our
largest washer products, to process from 20 to 250 pounds of
laundry per load. After cleaning, washer-extractors extract
water from laundry with spin speeds that produce over
300&nbsp;G&#146;s of centrifugal force, thereby reducing water
retention and the time and energy costs for the drying cycle.
Sold primarily under the Speed Queen&#174;, Huebsch&#174; and
UniMac&#174; brands, these products represented approximately
25% of our 2003&nbsp;net revenues. Washer-extractors that
process up to 80 pounds of laundry per load are sold to
laundromats and washer-extractors that process up to
250&nbsp;pounds of laundry per load are sold to on-premises
laundries. Washer-extractors are built to be extremely durable
in order to handle the enormous G-force generated by spinning
several hundred pounds of water-soaked laundry. Also, the
equipment is in constant use and must be durable enough to avoid
frequent breakdown, which would represent increased cost for the
user.
</FONT>

<P align="left">
<FONT size="2">In 2001, we introduced a new 40 pound wash load
washer-extractor and in 2003, we introduced a new 60&nbsp;pound
washer-extractor. These new washer-extractors replaced our
35&nbsp;pound and 50&nbsp;pound wash load capacity units,
respectively, thereby offering customers additional wash
capacity and an extra large opening for easy loading and
unloading of laundry. In addition, in 2003, we introduced the
following: (i)&nbsp;a new line of technologically advanced soft
mount washer-extractors from 18 to 165 pound capacity which
features user friendly alpha numeric controls, efficient
dimensions and high energy and water efficiency; (ii)&nbsp;a new
micro processor control for the coin market offering individual
cycle pricing, cycle modifier keys, time-of-day pricing and new
easier programming, all designed to be customer and environment
friendly
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">and (iii)&nbsp;a companion to our premium line
products referred to as the &#147;value line&#148;, which are
one step below the premium featured line with a price point
advantage.
</FONT>
</DIV>

<P align="left">
<I><FONT size="2">Topload Washers.</FONT></I><FONT size="2">
Topload washers are small-chassis washers with the capability to
process up to 16&nbsp;pounds of laundry per load with spin
speeds that produce up to 150&nbsp;G&#146;s. Sold primarily to
multi-housing laundries and laundromats under the Speed
Queen&#174; and Huebsch&#174; brands, these products represented
approximately 17% of our 2003&nbsp;net revenues.
</FONT>

<P align="left">
<FONT size="2">In late 2000, we introduced our
NetMaster<SUP>TM</SUP> system of technologically advanced
laundry products offering multi-housing and laundromat operators
more business flexibility and accountability. This system
interfaces with several payment types including coins, tokens
and debit cards and credit cards, and enables operators to
program vend prices, cycle times, rinse options and cycle
selections from a remote site while auditing machine operation.
</FONT>

<P align="left">
<FONT size="2">In 2003, we introduced our Wash
Alert<SUP>TM</SUP> system to universities. This system allows
students to view the availability of equipment in their common
laundry areas and to view the status of their laundry from the
convenience of their dorm room. Our software solution provides
students with added convenience, while providing universities
with accurate laundry room activity analysis through their own
network system.
</FONT>

<P align="left">
<FONT size="2">Wash Alert<SUP>TM</SUP> is not only a time-saver
for students; universities benefit from it as well. The system
verifies the income from coin/card vending laundry equipment
ensuring greater revenue accountability. The system&#146;s
remote diagnostic capability means faster response time from
service providers.
</FONT>

<P align="left">
<FONT size="2">In addition, in 2003, we introduced an upgraded
Micro-electronic Display Control on the topload washer that
conserves water and energy. The improved efficiency qualifies
the Micro-electronic Display Control topload washer for the
ENERGY STAR(R) label and other federal and local energy
efficiency programs.
</FONT>

<P align="left">
<I><FONT size="2">Frontload Washers.</FONT></I><FONT size="2">
Frontload washers contributed approximately 4% of our
2003&nbsp;net revenues. In 1999, we introduced a new
small-chassis frontload washer with the capability to process up
to 18&nbsp;pounds of laundry per load. Frontload washers are
sold under the Speed Queen&#174; and Huebsch&#174; brands to
laundromat and multi-housing customers. The frontload
washer&#146;s advanced design uses 28% less water than
commercial topload washers. Furthermore, decreased usage of hot
water and superior water extraction in the high G-force spin
cycle reduce energy consumption. The frontload washer is
available with front controls (front accessibility complies with
Americans with Disabilities Act regulations) or rear controls
and can be purchased with a matching small-chassis dryer (single
or stacked, front or rear controls).
</FONT>

<P align="left">
<FONT size="2">Our frontload washers display the
U.S.&nbsp;federal government&#146;s ENERGY STAR(R) mark. The
ENERGY STAR(R) label was designed by the U.S.&nbsp;federal
government to denote products that use less energy, thereby
saving money on utility bills while helping to protect the
environment. Along with our 18&nbsp;pound wash load capacity,
our frontload washer has a spin speed of over 1,000 revolutions
per minute, providing significant savings in the energy required
to dry wash loads.
</FONT>

<P align="left">
<FONT size="2">In 2001, we introduced a new commercial stacked
frontload washer and dryer which takes up half the floor space
compared to a conventional washer and dryer. The pair saves on
energy and water and received the U.S.&nbsp;federal
government&#146;s ENERGY STAR(R) mark. The new product is
offered with push button, coin or card activation.
</FONT>

<P align="left">
<FONT size="2">In 2003, we introduced a major upgrade to the
frontload washer. This upgrade included a new drive system which
incorporates an induction motor and a motor control with an
integrated inverter. Also, the new drive system will deliver
longer equipment life and is substantially quieter to operate.
This new system represents leading edge technology and provides
a significant increase in energy efficiency.
</FONT>

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

<P align="left">
<FONT size="2">Dryers represented approximately 33% of our
2003&nbsp;net revenues and include tumbler dryers, standard
dryers and stacked dryers. We also sell a new line of stacked
combination frontload washers and dryers.
</FONT>

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<P align="left">
<I><FONT size="2">Tumbler Dryers.</FONT></I><FONT size="2">
Tumblers are very large dryers with the capability of drying up
to 170 pounds of laundry per load. Tumblers represented
approximately 22% of our 2003&nbsp;net revenues. Tumblers are
sold primarily to laundromats and on-premise laundries under all
four of our brands. Our current tumbler dryer design, introduced
in October 1997, has 33% to 50% fewer moving parts and requires
20% less drying time as compared to the previous design. In
2003, we upgraded our 50 and 75 pound tumbler designs by
enlarging the doors to facilitate easier loading and unloading.
These new doors are also reversible which allows for a broader
array of installation arrangements. In addition, in 2003, we
introduced the CARE<SUP>TM</SUP> fire suppression system option
for 50, 75, 120 and 170 pound tumblers. This system detects and
diminishes spontaneous combustion fires driven by the cleaning
of chemically saturated fabrics.
</FONT>

<P align="left">
<FONT size="2">In the fall of 2002, we began supplying tumbler
dryers to a large European original equipment manufacturer
account allowing the account to curtail its production of
similar sized products. In 2003, sales to this account exceeded
$4.5&nbsp;million.
</FONT>

<P align="left">
<I><FONT size="2">Standard Dryers.</FONT></I><FONT size="2">
Standard dryers are small capacity dryers with the capability to
process up to 18 pounds of laundry per load. Sold under the
Speed Queen&#174; and Huebsch&#174; brands, standard dryers
(including stacked dryers) represented approximately 11% of our
2003&nbsp;net revenues. Our dryer&#146;s capacity, measuring 7.1
cubic feet, is among the largest in the industry.
</FONT>

<P align="left">
<I><FONT size="2">Stacked Dryers and Stacked Frontload Washers
and Dryers.</FONT></I><FONT size="2"> To enable our
multi-housing customers to conserve valuable floor space, we
offer a stacked unit consisting of two 18 pound standard dryers
and offers a stacked combination unit consisting of an 18 pound
frontload washer paired with an 18 pound standard dryer.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Presses and
Finishing Equipment</FONT></I>

<P align="left">
<FONT size="2">Presses and finishing equipment are sold
primarily to commercial drycleaners and industrial cleaning
plants under the Ajax&#174; brand. Sales of this equipment
accounted for approximately 3% of our 2003&nbsp;net revenues. We
offer a broad array of presses and finishing equipment such as
cabinet presses for shirt finishing; pants and linen presses;
collar and cuff presses; shirt sleevers; steam-air garment
finishers; and utility presses and accessories.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Service
Parts</FONT></I>

<P align="left">
<FONT size="2">We benefit from the recurring sales of service
parts to our large installed base of equipment. The expected
field service life of the equipment is 7 to 14&nbsp;years.
Service parts sales accounted for approximately 14% of our
2003&nbsp;net revenues. We offer immediate response service
whereby many of our parts are available on a 24-hour turnaround
basis for emergency repair parts orders. The significant demand
for service parts generated by the large installed base provides
us with a source of higher margin, recurring revenue.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
Value-Added Services</FONT></I>

<P align="left">
<FONT size="2">We believe our customers attach significant
importance to the value-added services we provide. We offer
services that we believe are significant drivers of high
customer satisfaction and retention, such as equipment financing
(which accounted for approximately 2% of our 2003&nbsp;net
revenues), laundromat site selection assistance, investment
seminar training materials, computer-aided commercial laundry
room design and sales and service training for distributors. In
1999, our technical communications department introduced a new,
CD-Rom based, parts look up program called SearchIt. Since that
time, the program has continually been updated to include
service manuals, troubleshooting guides, parts pricing
information and a parts ordering pick list. Our technical
communication web site includes installation and operating
instructions, programming manuals and technical bulletins.
Through our password protected extranet site, our distributors
and route operators can download sample equipment operating
signs for laundry rooms in both English and Spanish. In
addition, management believes we offer an unmatched range of
complementary customer services and support, including toll-free
technical support and on-call installation and repair service
through our highly trained distributors and our web sites which
provide information on all of our products and services,
including downloadable product literature and installation
guides. Our
</FONT>

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<DIV align="left">
<FONT size="2">laundry design service provides construction
drawings and 3-dimensional layouts of proposed laundry
facilities. The service also provides a cost analysis for new or
updated laundries. We believe our extensive service
capabilities, in addition to the dependability and functionality
of our products, will continue to differentiate our products
from the competition.
</FONT>
</DIV>

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

<P align="left">
<FONT size="2">Our customers include more than:
(i)&nbsp;100&nbsp;distributors to laundromats;
(ii)&nbsp;100&nbsp;distributors to on-premise laundries;
(iii)&nbsp;45&nbsp;distributors to drycleaners;
(iv)&nbsp;80&nbsp;route operators serving multi-housing
laundries; and (v)&nbsp;130&nbsp;international distributors
serving more than 90 countries.
</FONT>

<P align="left">
<FONT size="2">Our top ten customers accounted for approximately
35.8% of our 2003&nbsp;net revenues. Our top ten customers,
other than a significant new account that was added in 2003,
have been customers for at least ten years. In 2003, Coinmach
Corporation, the largest multi-housing route operator in the
United States, PWS Investments,&nbsp;Inc. and Metropolitan
Laundry Machinery Co.,&nbsp;Inc. were our largest customers,
with Coinmach being the largest, accounting for 15.8% of our
2003&nbsp;net revenues.
</FONT>

<P align="left">
<B><FONT size="2">Sales and Marketing</FONT></B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales
Force</FONT></I>

<P align="left">
<FONT size="2">We structure our sales force of 29 as of
December&nbsp;31, 2003 to serve the needs of each of our
customer groups. In addition, through a marketing staff of
approximately 51 professionals as of December&nbsp;31, 2003, we
provide customers and distributors with a wide range of
value-added services such as advertising materials, training
materials, computer-aided commercial laundry room design,
product development and technical service support.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Marketing
Programs</FONT></I>

<P align="left">
<FONT size="2">We support our sales force and distributors
through a balanced marketing program of advertising and industry
trade shows. Advertising expenses totaled $3.1&nbsp;million in
2003 and included a variety of forms, from print and electronic
media to direct mail. In addition, our representatives attended
over 34&nbsp;trade shows in 2003 to introduce new products,
maintain contact with customers, develop new customer
relationships and generate sales leads for our products.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equipment
Financing</FONT></I>

<P align="left">
<FONT size="2">Through our special-purpose financing
subsidiaries, we offer an extensive off-balance sheet equipment
financing program to end-users, primarily laundromat owners, to
assist in their purchases of new equipment. Typical terms
include two to nine year loans with an average principal amount
of approximately $75,000. We believe that our off-balance sheet
equipment financing program is among the industry&#146;s most
comprehensive and that the program is an important component of
our marketing activities. In addition, this service provides us
with an additional source of recurring income.
</FONT>

<P align="left">
<FONT size="2">The financing program is structured to minimize
our risk of loss. We adhere to strict underwriting procedures,
including comprehensive applicant credit analysis (generally
including credit bureau, bank, trade and landlord references,
site analysis including demographics of the location and
multiple year pro-forma cash flow projections), the receipt of
collateral and distributor assistance in remarketing collateral
in the event of default. As a result of these risk management
tools, losses from the program have been minimal. Net write-offs
for equipment loans have averaged approximately 1% for the five
year period ended December&nbsp;31, 2003, and were less than 1%
for the year ended December&nbsp;31, 2003.
</FONT>

<P align="left">
<B><FONT size="2">Research and Development</FONT></B>

<P align="left">
<FONT size="2">Our engineering organization was staffed with
over 80 engineers and technical support staff as of
December&nbsp;31, 2003. Our recent research and development
efforts have focused primarily on continuous improvement in the
reliability, performance, capacity, energy and water
conservation, sound levels and
</FONT>

<P align="center"><FONT size="2">75
</FONT>

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<DIV align="left">
<FONT size="2">regulatory compliance of our commercial laundry
equipment. Our engineers and technical personnel, together with
our marketing and sales personnel, collaborate with our major
customers to redesign and enhance our products to better meet
customer needs. The cumulative research and development spending
exceeded $31.7&nbsp;million for the period 1999 through 2003. We
have developed numerous proprietary innovations that we utilize
in select products. Over the past four years, we have rolled out
our MicroMaster line of electronically controlled tumblers and
washer-extractors under the Speed Queen&#174; brand, as well as
our CardMate<SUP>TM</SUP> Plus and NetMaster<SUP>TM</SUP> debit
card cashless systems designed to replace coin operated
equipment. We believe this array of new products allows us to
continue to be an innovative leader in electronically controlled
equipment. We believe improvements made to existing products and
the introduction of new products have supported our market
leadership position.
</FONT>
</DIV>

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

<P align="left">
<FONT size="2">Within the North American stand alone commercial
laundry equipment industry, we compete with several large
competitors. However, we believe that we are the only
participant in the North American stand alone commercial laundry
equipment industry to serve significantly all three customer
groups (laundromats, multi-housing laundries and on-premise
laundries) with a full line of topload washers,
washer-extractors, frontload washers, tumbler dryers and
standard dryers. With respect to laundromats, our principal
competitors include Wascomat (the exclusive North American
distributor of Electrolux AB products), Maytag Corporation and
The Dexter Company. In multi-housing, our principal competitors
include Maytag Corporation and Whirlpool Corporation. In
on-premise laundry, we compete primarily with Pellerin Milnor
Corporation, American Dryer Corporation and Wascomat. We do not
believe that a significant new competitor has entered the North
American stand alone commercial laundry equipment industry
during the last ten years.
</FONT>

<P align="left">
<FONT size="2">Within the drycleaning industry, we compete
primarily with other pressing and finishing equipment and shirt
laundering equipment manufacturers. With respect to pressing and
finishing equipment, our principal competitors include Unipress
Corporation and Forenta, L.P. With respect to shirt laundering
equipment (primarily washer-extractors), our principal
competitors include Wascomat and Pellerin Milnor Corporation.
</FONT>

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

<P align="left">
<FONT size="2">We own and operate two manufacturing facilities
located in Ripon, Wisconsin and Marianna, Florida with an
aggregate of more than 830,000&nbsp;square feet. The facilities
are organized to focus on specific product segments, although
each facility serves multiple customer groups. The Ripon plant
produces our small-chassis topload washers, frontload washers,
small chassis dryers and tumbler dryers. The Marianna plant
produces our large-chassis washer-extractors, presses and
finishing equipment. Our manufacturing plants primarily engage
in fabricating, machining, painting, assembling and finishing
operations. We also operate three product distribution centers
in the United States, all of which we own. We believe that
existing manufacturing facilities provide adequate production
capacity to meet expected product demand.
</FONT>

<P align="left">
<FONT size="2">We purchase substantially all raw materials and
components from a variety of independent suppliers. Key material
inputs for manufacturing processes include motors, stainless and
carbon steels, aluminum castings, electronic controls,
corrugated boxes and plastics. For the majority of raw materials
and components, we believe there are readily available
alternative sources of raw materials from other suppliers. We
have developed long-term relationships with many of our
suppliers and have sourced materials from nine of our ten
largest suppliers for at least five years.
</FONT>

<P align="left">
<FONT size="2">We are committed to achieving continuous
improvement in all aspects of our business in order to maintain
our industry leading position. Both of our manufacturing
facilities are ISO&nbsp;9001 certified. ISO&nbsp;9001 is a set
of standards dealing with quality management systems for quality
assurance in design/development, production, installation and
servicing that are published by the International
Standardization Organization.
</FONT>

<P align="center"><FONT size="2">76
</FONT>

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<P align="left">
<B><FONT size="2">Regulations and Laws</FONT></B>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Environmental,
Health and Safety Matters</FONT></I>

<P align="left">
<FONT size="2">We are subject to comprehensive and frequently
changing federal, state and local environmental and occupational
health and safety laws and regulations, including laws and
regulations governing emissions of air pollutants, discharges of
waste and storm water and the disposal of hazardous wastes. We
are also subject to liability for the investigation and
remediation of environmental contamination (including
contamination caused by other parties) at the properties we own
or operate and at other properties where we or predecessors have
arranged for the disposal of hazardous substances. As a result,
we are involved, from time to time, in administrative and
judicial proceedings and inquires relating to environmental
matters. There can be no assurance that we will not be involved
in such proceedings in the future and that the aggregate amount
of future clean-up costs and other environmental liabilities
will not have a material adverse effect on our business,
financial condition and results of operations. We believe that
our facilities and operations are in material compliance with
all environmental, health and safety laws.
</FONT>

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

<P align="left">
<FONT size="2">Certain environmental investigatory and remedial
work is underway or planned at, or relating to, our Ripon,
Wisconsin and Marianna, Florida manufacturing facilities. With
respect to the Ripon facility, this work will be conducted by
us. We currently expect to incur costs of less than $100,000
through 2004 at the Ripon facility to complete remedial work.
There can be no assurance, however, that we will not incur
additional remedial costs in the future with respect to the
Ripon facility. With respect to the Marianna facility, this work
is being conducted by a former owner of the property and is
being funded through an escrow account, the available balance of
which we believe to be substantially greater than remaining
remediation costs. A former owner of the Marianna, Florida
facility has agreed to indemnify us for certain environmental
liabilities. If the former owner fails to honor its obligations
under these indemnifications, we would bear the costs of such
liabilities.
</FONT>

<P align="left">
<FONT size="2">We also received an order in 1995 from the
U.S.&nbsp;Environmental Protection Agency, or EPA, requiring
participation in clean-up activities at the Marina Cliffs site
in South Milwaukee, Wisconsin, the location of a former drum
reconditioner. The EPA asserted that the Ripon facility was a
generator of wastes that were disposed of at the Marina Cliffs
site. The asserted disposal predated our and Raytheon&#146;s
ownership of the Ripon facility. We believe that the EPA also
has contacted a prior owner of the facility to assert that the
former owner may be liable. There is an established group of
potentially responsible parties that are conducting a cleanup of
the site. The group has estimated that the cleanup will cost
approximately $5.0&nbsp;million. The group proposed to settle
their alleged claims against us, and to protect us from further
liability at the site, for approximately $100,000. We declined
the proposal because we believe that the Ripon facility&#146;s
prior owner, and not us, is responsible for bearing the costs of
any liability related to the site.
</FONT>

<P align="left">
<FONT size="2">We have met with EPA to explain our defenses to
enforcement of the administrative order. We received a General
Notice of Potential Liability on March&nbsp;21, 2001, regarding
an additional five&nbsp;acre parcel at the site. We were
informed that Raytheon has settled this matter by paying
$138,672 plus interest from October&nbsp;31, 2001 in exchange
for an Administrative Order from the EPA. It is our opinion that
the Raytheon settlement and release in the Administrative Order
resolves any liability of Raytheon&#146;s former subsidiaries
doing business in Ripon, Wisconsin, and hence any liability that
may have passed to us.
</FONT>

<P align="center"><FONT size="2">77
</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>
    <I><FONT size="2">Other Regulation</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">In addition to environmental regulation, our
operations are also subject to other U.S.&nbsp;federal, state
and local laws, including those relating to protection of public
health and worker safety.
</FONT>

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

<P align="left">
<FONT size="2">We are dependent on the continued services of our
senior management team and certain other key employees. Other
than for Mr.&nbsp;L&#146;Esperance, we do not maintain
employment agreements with our senior management, nor do we
maintain life insurance policies with any key employees.
</FONT>

<P align="left">
<FONT size="2">On December&nbsp;31, 2003, we had 1,309
employees. Approximately 639 of our employees at our Wisconsin
facilities are represented by The United Steel Workers of
America. In February 2004, the United Steel Workers of America
ratified a new five (5)&nbsp;year labor contract with us.
Included in the new contract is a two-tier wage system which
allows us to hire new assembly workers at a wage approximately
20% below the current assembly wage. The Marianna, Florida
facility is not unionized. There have been no work stoppages at
any of our facilities for more than 30&nbsp;years. We believe
that current labor relations are good, and no labor disruptions
are anticipated in the foreseeable future.
</FONT>

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

<P align="left">
<FONT size="2">The following table sets forth certain
information regarding significant facilities in which we
operated as of December&nbsp;31, 2003:
</FONT>

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

<TR>
    <TD width="38%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="30%"><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>
</TR>

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

<TR>
    <TD align="center" nowrap><B><FONT size="1">Location</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Function/Products</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Square Feet</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Owned/Leased</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>
</TR>

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

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ripon, WI
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Manufacture small washers and dryers, and tumbler
    dryers
    </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">572,900</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="top" nowrap><FONT size="2">Owned</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">Marianna, FL
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Manufacture washer-extractors, presses and
    finishing equipment
    </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">259,200</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="top" nowrap><FONT size="2">Owned</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">(1)</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><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">
    <B><FONT size="2">Subtotal</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">832,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">
    <B><I><FONT size="2">Regional Distribution Centers</FONT></I></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>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ripon, WI
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Washers, dryers, tumbler dryers
    </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">147,500</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">Owned</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">Marianna, FL
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Washer-extractors, presses and finishing equipment
    </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">33,000</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">Owned</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">(1)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ripon, WI
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Service parts
    </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">60,800</FONT></TD>
    <TD><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">Owned</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><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">
    <B><FONT size="2">Subtotal</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">241,300</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><I><FONT size="2">Other</FONT></I></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>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Ripon, WI
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Sales and administration
    </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">65,700</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="top" nowrap><FONT size="2">Owned</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">Ripon, WI
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Engineering and procurement
    </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">43,100</FONT></TD>
    <TD><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">Owned</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><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">
    <FONT size="2">Subtotal
    </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">108,800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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 align="left"><HR size="1" 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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT size="2">Total</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">1,182,200</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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 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>

<DIV align="left">
<HR size="1" width="33%" align="left" noshade>
</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><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">We own the Marianna buildings, but we lease the
    land from the city of Marianna.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">We believe existing manufacturing facilities
provide adequate production capacity to meet expected product
demand for the foreseeable future.
</FONT>

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

<P align="left">
<FONT size="2">Various claims and legal proceedings generally
incidental to the normal course of business are pending or
threatened against us. While we cannot predict the outcome of
these matters, in the opinion of our management, any liability
arising under these claims and legal proceedings will not have a
material adverse
</FONT>

<P align="center"><FONT size="2">78
</FONT>
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<DIV align="left">
<FONT size="2">effect on our business, financial condition and
results of operations after giving effect to provisions already
recorded.
</FONT>
</DIV>

<P align="left">
<FONT size="2">In September 1999, Juan Carlos Lopez pursued an
arbitration against Alliance Laundry Sociedad Anonima, or ALSA,
a foreign subsidiary of Alliance Laundry Systems LLC, under
UNCITRAL rules in Buenos Aires, Argentina, seeking in pertinent
part, to be paid fees arising from a consulting agreement, and
indemnification for loss of profits in Argentina and Brazil,
plus damages for pain and suffering. An arbitration was
conducted and on April&nbsp;3, 2001, the arbitration panel
awarded Argentine Pesos 1,408,900 (U.S. $1.4&nbsp;million at the
time), plus nine percent interest from September&nbsp;6, 1999,
plus ten percent over this principal and interest amount as
moral damages, plus certain fees and costs, while rejecting
other claims of Mr.&nbsp;Lopez. We believed, based on the advice
of counsel, in as much as ALSA was a foreign subsidiary, ALSA
was responsible for its own debts and obligations and under the
terms of the award, any such payments would have been
forthcoming from the assets of ALSA. On December&nbsp;20, 2001,
ALSA&#146;s bankruptcy was decreed, at the request of
Mr.&nbsp;Lopez, on grounds of non-payment of the arbitration
award. On December&nbsp;12, 2002, Mr.&nbsp;Lopez filed a lawsuit
with the National Commercial Court Number 13 in Buenos Aires,
Argentina against us for the amount ordered to be paid in the
arbitration, plus unspecified damages caused by the award not
having been timely paid.
</FONT>

<P align="left">
<FONT size="2">Because of the risk this lawsuit presented, we
entered into a Settlement, Release, Discharge and
Indemnification Agreement with Mr.&nbsp;Lopez in July 2003.
While denying any liability whatsoever, we agreed to and paid
Mr.&nbsp;Lopez $736,440 on August&nbsp;6, 2003 and agreed to
deliver commercial laundry equipment, up to a cost to us of U.S.
$60,000 to Mr.&nbsp;Lopez in Brazil free of charge. In
consideration for such payment and delivery of equipment,
Mr.&nbsp;Lopez released and forever discharged, and waived any
claims or rights of any nature whatsoever against us and a
number of affiliated subsidiary companies. In addition,
Mr.&nbsp;Lopez and his counsels signed the dismissal of the
lawsuit referred to above. A provision for this settlement was
recorded in our 2003 financial statements.
</FONT>

<P align="left">
<FONT size="2">In April 2002 we were named as a defendant in a
lawsuit filed by Imonex Services,&nbsp;Inc. for patent
infringement, arising from a vendor supplied coin selector, the
&#147;W2000&#148;, used in certain of our products. The vendor,
W. H. M&#252;nzpr&#252;fer Dietmar Trenner GmbH, indemnified us
and agreed to pay and is paying for our representation in this
matter. Imonex accused us, and other M&#252;nzpr&#252;fer
customers, of patent infringement resulting from the sales of
the W2000 within the defendants&#146; products. Trial commenced
January&nbsp;6, 2003 in the United States District Court for the
Eastern District of Texas. Following the trial, the court
indicated it would enter an order rendering judgment for Imonex
that the asserted patent claims were infringed, are not invalid,
and were not procured by inequitable conduct. The court
indicated it will issue a permanent injunction and invited the
parties to submit proposed injunction languages, and objections
thereto. The court has withheld ruling upon the timelines of
Imonex bringing its damage claims. The court reduced the
jury&#146;s damage verdict from $10,350,000 ($5,382,000 against
us with the remainder against the other defendants) against all
defendants, to $490,295 ($267,645 against us with the remainder
against the other defendants) and gave Imonex the option to
accept the reduced damages or have a new trial on damages. On
April&nbsp;28, 2003,&nbsp;Imonex filed an election for a new
trial on damages, and filed proposed language for the
injunction. The defendants filed their objections to the
injunction language on May&nbsp;5, 2003. On August&nbsp;1, 2003,
the court ruled it will not enhance any damages for willful
infringement, but entered judgment for Imonex on the issues of
infringement, and validity of the Imonex&#146;s patents. Imonex
submitted expert reports at the new trial on damages which
attempted to prove actual damages of approximately
$16,267,644&nbsp;million (approximately $6,305,232&nbsp;million
against us with the remainder against other defendants). On
August&nbsp;12, 2003 a preliminary injunction was issued
prohibiting W2000 coin selector usage.
</FONT>

<P align="left">
<FONT size="2">The trial on damages commenced August&nbsp;18,
2003 and yielded a jury verdict of $1,396,873 to Imonex
($614,662 against us with the remainder against the other
defendants) against all defendants.
</FONT>

<P align="left">
<FONT size="2">Final judgment on the August&nbsp;18, 2003 jury
verdict was rendered on February&nbsp;9, 2004 against all the
defendants. The final judgment included $614,662 against us,
plus prejudgment interest, yielding $771,728 against us. In
addition, the judgment awarded court costs to Imonex, including
attorneys&#146; fees. On
</FONT>

<P align="center"><FONT size="2">79
</FONT>

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<DIV align="left">
<FONT size="2">February&nbsp;23, 2004,&nbsp;Imonex submitted an
application seeking from all the defendants a total of $669,107
in attorneys&#146; fees and $133,214 in court costs. The
preliminary injunction of August&nbsp;12, 2003 was made
permanent. The defendants have filed a post judgment motion
seeking to have the judgment amended or set aside.
</FONT>
</DIV>

<P align="left">
<FONT size="2">The plaintiff has filed a Notice of Appeal and
the Court of Appeals for the Federal Circuit has set the date of
docketing at March&nbsp;16, 2004. The defendants have filed
cross-appeals.
</FONT>

<P align="left">
<FONT size="2">Our position remains that any liability related
to this lawsuit is properly borne by M&#252;nzpr&#252;fer. We
believe that M&#252;nzpr&#252;fer has the ability to fully
satisfy its indemnification obligations up to the amount of the
final judgment. We have also reached tentative agreement with
M&#252;nzpr&#252;fer as to acceptable methods of satisfying the
provisions of the indemnification agreement, in the event the
judgment is not appealed, or is not overturned upon appeal. In
accordance with GAAP, as a judgment has been rendered by the
court, we have separately recorded an appropriate payable to
Imonex related to our liability and a corresponding receivable
balance from M&#252;nzpr&#252;fer within our December&nbsp;31,
2003 financial statements.
</FONT>

<P align="center"><FONT size="2">80
</FONT>

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

<!-- link1 "Management" -->

<P align="center">
<B>Management</B>

<P align="left">
<B><FONT size="2">Directors and Executive Officers</FONT></B>

<P align="left">
<FONT size="2">Our directors and executive officers as
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;are
as follows:
</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="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="50%"><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 valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Thomas F. L&#146;Esperance
    </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">55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">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">Jeffrey J. Brothers
    </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">57</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Senior Vice President, Sales and Marketing
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Bruce P. Rounds
    </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">Vice President, Chief Financial Officer
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">William J. Przybysz
    </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">59</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 President, General Manager Marianna
    Operations
    </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. Scott Gaster
    </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">Vice President, General Manager Ripon Operations
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Robert T. Wallace
    </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">Vice President, Corporate Controller
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Scott L. Spiller
    </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">Vice President, Law and Human Resources
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Edward W. Conard
    </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">Director
    </FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Robert C. Gay
    </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">52</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">Stephen M. Zide
    </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">44</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 valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stephen C. Sherrill
    </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>

</TABLE>
</CENTER>

<P align="left">
<I><FONT size="2">Thomas F. L&#146;Esperance
</FONT></I><FONT size="2">serves as a Director. He has been our
Chief Executive Officer since March 1996. He had served as
President of the Amana Home Appliance Company from 1993 to 1996
and was President of Caloric Corporation, a manufacturer of
appliances, for two years prior to 1993. Prior to that time,
Mr.&nbsp;L&#146;Esperance held several executive management
positions with Raytheon.
</FONT>

<P align="left">
<I><FONT size="2">Jeffrey J. Brothers
</FONT></I><FONT size="2">has been our Senior Vice President of
Sales and Marketing since October 1989. He has been employed
with us since 1977. Mr.&nbsp;Brothers has been involved in sales
for us since 1983 and has held other positions such as Manager
of Distribution Development, Plant Controller and Financial
Analyst.
</FONT>

<P align="left">
<I><FONT size="2">Bruce P. Rounds
</FONT></I><FONT size="2">joined us in 1989 as Vice President of
Finance and was promoted to his current position in February
1998. He held the position of Vice President, Business
Development, from 1996 to 1998. Before joining us, he served in
a variety of capacities for eight years at Mueller Company and
for three years with Price Waterhouse. He is a Certified Public
Accountant.
</FONT>

<P align="left">
<I><FONT size="2">William J. Przybysz
</FONT></I><FONT size="2">rejoined us in May 2000 as Vice
President, General Manager Marianna, Florida operations.
Previously he had been with us as Vice President of Logistics
and Material from 1990 through 1993. From 1993 through February
of 2000 he was the Vice President and General Manager of Amana
Central Heating and Air Conditioning Division based in
Fayetteville, Tennessee. Mr.&nbsp;Przybysz&#146;s prior
experience includes ten years in various management positions
with Whirlpool Corporation and eight years of management
experience with Wheelhorse Products (since acquired by The Toro
Company).
</FONT>

<P align="left">
<I><FONT size="2">R.&nbsp;Scott Gaster
</FONT></I><FONT size="2">joined us as Vice President,
Procurement and Materials, in June 1995. He became the Vice
President of Washer and Dryer Operations in July 1997 and
Tumbler Operations in August 1998. In December of 2003
Mr.&nbsp;Gaster was promoted to Vice President, General Manager
Ripon Operations. Mr.&nbsp;Gaster has also retained his former
purchasing responsibilities. Prior to joining us, he was
employed by GKN Automotive,&nbsp;Inc. from 1979 to 1995 in such
positions as Director of Procurement and Logistics, Corporate
Purchasing Agent and Purchasing Manager.
</FONT>

<P align="left">
<I><FONT size="2">Robert T. Wallace
</FONT></I><FONT size="2">has been our Vice President, Corporate
Controller since June 1996. He held positions as Controller and
Manager-Reporting and Analysis for us from 1990 to 1996.
Mr.&nbsp;Wallace&#146;s previous experience includes two years
as Controller of Alcolac (chemicals), four years as Manager of
Reporting and Analysis with Mueller Company, five years with
Ohmeda and two years with Price Waterhouse. He is a certified
public accountant.
</FONT>

<P align="left">
<I><FONT size="2">Scott L. Spiller </FONT></I><FONT size="2">has
been our Vice President of Law&nbsp;&#38; Human Resources, and
General Counsel since February 1998. From April 1996 to February
1998, Mr.&nbsp;Spiller was practicing law as a sole
practitioner. Prior to that, he was our General Counsel and
Secretary for ten years.
</FONT>

<P align="center"><FONT size="2">81
</FONT>

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<P align="left">
<I><FONT size="2">Edward W. Conard
</FONT></I><FONT size="2">serves as a Director. He has been a
Managing Director of Bain Capital Partners, LLC, or BCP, since
March 1993. From 1990 to 1992, Mr.&nbsp;Conard was a director of
Wasserstein Perella, an investment banking firm that specializes
in mergers and acquisitions. Previously, he was a Vice President
of Bain&nbsp;&#38; Company, where he headed the management
consulting firm&#146;s operations practice area. Mr.&nbsp;Conard
also serves as a director of Waters Corporation, ChipPac, US
Synthetic, Unisource Worldwide,&nbsp;Inc. and Broder Brothers.
</FONT>

<P align="left">
<I><FONT size="2">Robert C. Gay </FONT></I><FONT size="2">serves
as a Director. Mr.&nbsp;Gay has been a Managing Director of BCP
since 1993 and has been a General Partner of Bain Venture
Capital since 1989. From 1988 through 1989, Mr.&nbsp;Gay was a
Principal of Bain Venture Capital. Mr.&nbsp;Gay is a member of
the Supervisory Board of Buhrmann/ Corporate Express and the
Vice Chairman of the Board of Directors of Icon
Health&nbsp;&#38; Fitness. He also serves as a Director of
Bocchi Laboratories, DIC Entertainment, Nutraceutical, Walco,
Maxim Crane and U.S.&nbsp;Synthetics.
</FONT>

<P align="left">
<I><FONT size="2">Stephen M. Zide
</FONT></I><FONT size="2">serves as a Director. Mr.&nbsp;Zide
has been a Managing Director of BCP since 2001. From 2000 to
2001, Mr.&nbsp;Zide was a Principal of BCP. From 1998 through
2000, Mr.&nbsp;Zide was a Managing Director of Pacific Equity
Partners. Previously, he was a Principal of BCP and a Partner at
the law firm of Kirkland&nbsp;&#38; Ellis. Mr.&nbsp;Zide also
serves as a director of Keystone Automotive Operations, Broder
Brothers and Maxim Crane Works.
</FONT>

<P align="left">
<I><FONT size="2">Stephen C. Sherrill
</FONT></I><FONT size="2">serves as a Director.
Mr.&nbsp;Sherrill is a Managing Director of Bruckmann, Rosser,
Sherrill&nbsp;&#38; Co. Mr.&nbsp;Sherrill was an officer of
Citicorp Venture Capital, Ltd. from 1983 through 1994.
Mr.&nbsp;Sherrill is a Director of Remington Arms,&nbsp;Inc.,
B&nbsp;&#38; G Foods,&nbsp;Inc. and Doane Pet Care
Enterprises,&nbsp;Inc.
</FONT>

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

<P align="left">
<FONT size="2">The following table sets forth information
concerning the annual and long-term compensation for services in
all capacities to our or our predecessor for the last three
completed fiscal years of those persons who served as
(i)&nbsp;the chief executive officer during 2003 and
(ii)&nbsp;our other four most highly compensated executive
officers for 2003:
</FONT>

<P align="center">
<B><FONT size="2">Summary Compensation Table</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="50%"><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="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="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="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Annual Compensation</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" 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" align="center" nowrap><B><FONT size="1">Other Annual</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2" 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">Compensation($)</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>
    <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">Thomas F. L&#146;Esperance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" 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="bottom" nowrap><FONT size="2">318,360</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">481,706</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19,560</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</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">Chief Executive Officer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" 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="bottom" nowrap><FONT size="2">293,424</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">285,422</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,448</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</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><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">284,880</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">285,422</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,100</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">William J. Przybysz
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" 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="bottom" nowrap><FONT size="2">167,904</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">96,199</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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 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">VP and General Manager,
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" 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="bottom" nowrap><FONT size="2">158,275</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">57,000</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">&#150;</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">Marianna Operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">153,500</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">50,124</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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 valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">R. Scott Gaster
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" 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="bottom" nowrap><FONT size="2">166,309</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">87,842</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,405</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</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">VP, Washer, Dryer and Tumbler
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" 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="bottom" nowrap><FONT size="2">153,060</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">52,048</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,185</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</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">Operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">144,464</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,048</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,263</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Jeffrey J. Brothers
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" 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="bottom" nowrap><FONT size="2">159,466</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">85,625</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">12,582</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</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">Senior VP, Sales and Marketing
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" 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="bottom" nowrap><FONT size="2">142,812</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,735</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">10,298</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</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">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">138,516</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,735</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">7,140</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</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">Bruce P. Rounds
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" 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="bottom" nowrap><FONT size="2">158,304</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">83,432</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,082</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</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">VP, Chief Financial Officer
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" 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="bottom" nowrap><FONT size="2">140,475</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">49,435</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,118</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</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><FONT size="2">2001</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">135,942</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">49,435</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,560</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">(1)</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="33%" align="left" noshade>
</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><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Represents gross-up amounts paid for
    non-deductible fringe benefits provided by us.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">82
</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>
    <I><FONT size="2">Employment Agreement</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Alliance Laundry entered into an employment
agreement with Thomas F. L&#146;Esperance, which was amended on
July&nbsp;23, 2003 to renew for additional one year periods from
May&nbsp;4, 2003 forward, unless we or Mr.&nbsp;L&#146;Esperance
provides written notice not to renew the agreement. Such
agreement provides for: (i)&nbsp;a minimum base salary and
participation in an annual bonus program so long as we employ
Mr.&nbsp;L&#146;Esperance; (ii)&nbsp;severance benefits;
(iii)&nbsp;non-competition, non-solicitation and confidentiality
agreements; and (iv)&nbsp;other terms and conditions of
Mr.&nbsp;L&#146;Esperance&#146;s employment.
</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>
    <I><FONT size="2">Deferred Compensation Agreement</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">In May 1998, Raytheon, Alliance Laundry and
Alliance Holdings entered into deferred compensation agreements
with certain of our executive officers, including
Mr.&nbsp;L&#146;Esperance, Mr.&nbsp;Gaster, Mr.&nbsp;Brothers
and Mr.&nbsp;Rounds whereby we assumed certain long-term
compensation obligations earned by management under programs
established by Raytheon. Such agreements provide for the
deferral of compensation until the earlier of (i)&nbsp;the
payment of a lump sum benefit amount to each such executive
officer ten years after the date of such agreement, regardless
of whether such executive officer is employed by us as of such
date or (ii)&nbsp;the payment of the benefit amount upon the
occurrence of certain events described therein.
</FONT>

<P align="left">
<FONT size="2">In addition, we have established the Alliance
Laundry Holdings LLC Nonqualified Deferred Compensation Plan.
This plan provides certain eligible employees and members with
the opportunity to defer portions of their base salary, bonus
payments and other payments in accordance with the provisions of
the plan.
</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>
    <I><FONT size="2">Pension Plan</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Substantially all of our eligible salaried
employees, including our executive officers, are covered under
the Alliance Laundry Systems Pension Plan. The cost of the
pension plan is borne entirely by us. The pension plan is a
defined benefit cash balance plan. Under this plan, an account
is established for each participant in which pay credits and
interest credits are earned as the participant provides service.
Pay credits are calculated as a percentage of the
participant&#146;s remuneration adjusted for age and years of
service in accordance with the following table:
</FONT>

<P align="center">
<B><FONT size="2">Pension Plan Pay Credits Table</FONT></B>

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

<TR>
    <TD width="75%"><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="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

<TR>
    <TD align="center" nowrap><B><FONT size="1">Total of Age and Years of Service</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Credit Rates</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">Less than 45
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3.0</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">45 but less than 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">3.5</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">50 but less than 55
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.0</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">55 but less than 60
    </FONT></DIV>
    </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 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">60 but less than 65
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.0</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">65 but less than 75
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.0</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">75 but less than 85
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.0</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">85 or more
    </FONT></DIV>
    </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 align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">In addition, a supplemental pay credit is earned
on remuneration in excess of $54,370 (indexed for years after
2002) at the lesser of 5% or the percentage used per the above
table. A participant&#146;s account also increases for interest
credits each year. Interest credits are earned at the rate of a
one-year Treasury Bill as of the last day of the prior plan year
plus 1%, which was 2.26% for 2003. The amount of earnings that
can be recognized for plan purposes is limited by the IRS to
$200,000 in 2003. A participant vests in his benefits accrued
under the pension plan after five years of service.
</FONT>

<P align="left">
<FONT size="2">Respective years of benefit service under the
pension plan, through December&nbsp;31, 2003, are as follows:
Mr.&nbsp;L&#146;Esperance 5; Mr.&nbsp;Przybysz 3;
Mr.&nbsp;Gaster 7; Mr.&nbsp;Brothers 24 and Mr.&nbsp;Rounds 14.
Mr.&nbsp;L&#146;Esperance was covered under Raytheon plans
through April 1998, at which time he became a participant under
our pension plan.
</FONT>

<P align="center"><FONT size="2">83
</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>
    <I><FONT size="2">Savings Plan</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Substantially all of the salaried employees,
including our executive officers, participate in our ALCAP
401(k) plan. Employees are permitted to defer a portion of their
income under this plan and we will provide a matching
contribution equal to 50% of the first 6% of the employee&#146;s
contribution.
</FONT>

<P align="left">
<B><FONT size="2">Compensation of Directors</FONT></B>

<P align="left">
<FONT size="2">We will reimburse members of our board of
directors for any out-of-pocket expenses incurred by them in
connection with services provided in such capacity. In addition,
we may compensate directors for services provided in such
capacity.
</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>

<DIV align="left">
<A name='112'></A>
</DIV>

<!-- link1 "Principal and Selling Stockholders" -->

<P align="center">
<B>Principal and Selling Stockholders</B>

<P align="left">
<FONT size="2">The following table shows information regarding
the beneficial ownership of shares of our Class&nbsp;A common
stock, Class&nbsp;B common stock and preferred stock immediately
prior to and immediately after the completion of this offering
and shows the number of and percentage owned by:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">each person who is known by us to own
    beneficially more than 5% of either class of our capital stock;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">each member 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">each of our named executive officers;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">each of our nominees to our board of
    directors;&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">all members of our board of directors and our
    executive officers as a group.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Both prior to and after completion of this
offering, there will be no shares of Class&nbsp;C common stock
outstanding. Except as indicated in the footnotes to this table,
each person has sole voting and investment power with respect to
all shares attributable to such person.
</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="24%"><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="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="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="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="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="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="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="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="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="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="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="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>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="47"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="47" align="center" nowrap><B><FONT size="1">Shares Beneficially Owned</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="47" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15"></TD>
    <TD></TD>
    <TD colspan="15"></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">Class A</FONT></B></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">Class B</FONT></B></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">Preferred</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><HR size="1" noshade></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>
    <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">prior to offering</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">after offering</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">prior to offering</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">after offering</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">prior to offering</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">after offering</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>
    <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">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>
    <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 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>
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    <TD colspan="3" align="center" nowrap><HR size="1" noshade></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>
    <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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Bain Funds(1)(2)
    </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>
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    <TD><FONT size="1">&nbsp;</FONT></TD>
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    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
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    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
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    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">BRS Investors(3)
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
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    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
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    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Management Investors(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>
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<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Edward W. Conard(1)(2)(5)
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<TR bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Robert C. Gay(1)(2)(5)
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<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Stephen C. Sherrill(3)(6)
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<TR bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Stephen M. Zide(1)(2)(5)
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<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Thomas F. L&#146;Esperance(4)
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<TR bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">William J. Przybysz(4)
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<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">R. Scott Gaster(4)
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<TR bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Jeffrey J. Brothers(4)
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<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">Bruce P. Rounds(4)
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<TR bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="1">All directors and executive
    </FONT></DIV>
    </TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
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    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="1">officers as a group(1)(2)(3)(4)
    </FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
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</CENTER>

<P align="left">
<HR size="1" width="33%" 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">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Amounts shown reflect interests in Bain/ RCL,
    L.L.C. which beneficially owns 60.1% of the outstanding common
    membership interests of Alliance Laundry through its ownership
    of Class&nbsp;A and Class&nbsp;L membership units in Alliance
    Holdings. The address of each such person and/or entity is c/o
    Bain Capital Partners, LLC, 111 Huntington Avenue, Boston, MA
    02199.
    </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">Amounts shown reflect the aggregate interests
    held by Bain Capital Fund&nbsp;V, L.P.
    (&#147;Fund&nbsp;V&#148;), BCIP Trust Associates&nbsp;II-B
    (&#147;BCIP Trust&nbsp;II-B&#148;), BCIP Associates&nbsp;II
    (&#147;BCIP&#148;) and BCIP Associates&nbsp;II-B
    (&#147;BCIP&nbsp;II-B&#148;) (collectively, the &#147;Bain
    Funds&#148;), for the Bain Funds and Messrs.&nbsp;Conard, Gay
    and Zide.
    </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">Amounts shown reflect the aggregate interests
    held by Bruckmann, Rosser, Sherrill&nbsp;&#38; Co., L.P.
    (&#147;BRS&#148;), BCB Family Partners, L.P., NAZ Family
    Partners, L.P., Paul D. Kaminski, Bruce&nbsp;C. Bruckmann,
    Donald&nbsp;J. Bruckmann, Harold&nbsp;O. Rosser, Stephen&nbsp;C.
    Sherrill, H.&nbsp;Virgil Sherrill, Nancy&nbsp;A. Zweng, John
    Rice Edmonds, Susan Kaider, Marilena Tibrea, Walker&nbsp;C.
    Simmons, Beverly Place, Elizabeth McShane and MLPF&#38;S
    Custodian FBO Paul Kaminski (collectively, the &#147;BRS
    Investors&#148;). The address of each such person and/or entity
    is c/o Bruckmann, Rosser, Sherrill &#38; Co., L.P., 126 East
    56th Street, 29th Floor, New York, NY 10022.
    </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 Class&nbsp;A and Class&nbsp;L membership
    units in Alliance Holdings but excludes Class&nbsp;B and
    Class&nbsp;C membership units which are subject to vesting and
    generally have no voting rights, representing on a fully diluted
    basis approximately 14.7% of Alliance Holdings&#146; membership
    units for the management investors, 4.3% for
    Mr.&nbsp;L&#146;Esperance, 0.8% for Mr.&nbsp;Przybysz, 1.7% for
    Mr.&nbsp;Gaster, 1.9% for Mr.&nbsp;Brothers and 1.7% for
    Mr.&nbsp;Rounds. The address of each such person is c/o Alliance
    Laundry Systems LLC, P.O. Box 990, Ripon, WI 54971-0990.
    </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">Messrs.&nbsp;Conard, Gay and Zide are each
    Managing Directors and/or members of Bain Capital Investors LLC,
    the managing partner of BCIP, BCIP&nbsp;II-B, BCIP Trust and
    BCIP Trust&nbsp;II-B and the sole general partner of Bain
    Capital Partners&nbsp;V, L.P. (&#147;BCPV&#148;), and are
    limited partners of BCPV, the sole general partner of
    Fund&nbsp;V. Accordingly Messrs.&nbsp;Conard, Gay&nbsp;and Zide
    may be deemed to beneficially own the interests owned by
    Fund&nbsp;V. Messrs.&nbsp;Conard, Gay and Zide, and entities
    affiliated with them, are each general partners of BCIP,
    BCIP&nbsp;II-B, BCIP Trust and BCIP Trust&nbsp;II-B and,
    accordingly, may be deemed to beneficially own the interests
    owned by BCIP, BCIP&nbsp;II-B, BCIP Trust and BCIP
    Trust&nbsp;II-B. Each such person disclaims beneficial ownership
    of any such shares in which he does not have a pecuniary
    interest.
    </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">Mr.&nbsp;Sherrill is a director of BRSE
    Associates,&nbsp;Inc., the sole general partner of BRS Partners,
    L.P., and the sole general partner of BRS and, accordingly, may
    be deemed to beneficially own the interests owned by BRS.
    Mr.&nbsp;Sherrill disclaims beneficial ownership of any such
    shares in which he does not have a pecuniary interest.
    </FONT></TD>
</TR>

</TABLE>

<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">
<A name='113'></A>
</DIV>

<!-- link1 "Related Party Transactions" -->

<P align="center">
<B>Related Party Transactions</B>

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

<P align="left">
<FONT size="2">In May 1998, Alliance Holdings, Raytheon and our
securityholders entered into a securityholders agreement. The
securityholders agreement: (i)&nbsp;restricts the transfer of
the equity interests of Alliance Holdings; (ii)&nbsp;grants
tag-along rights on certain transfers of equity interests of
Alliance Holdings; (iii)&nbsp;requires the securityholders to
consent to a sale of Alliance Holdings to an independent third
party if such sale is approved by certain holders of the then
outstanding equity interests of Alliance Holdings; and
(iv)&nbsp;grants preemptive rights on certain issuances of
equity interests of Alliance Holdings. Certain of the foregoing
provisions of the securityholders agreement will terminate upon
the consummation of an initial public offering or a liquidity
event (each as defined in the securityholders agreement). We
will terminate this agreement upon the closing of this offering.
</FONT>

<P align="left">
<B><FONT size="2">Management Services Agreement</FONT></B>

<P align="left">
<FONT size="2">In May 1998, Alliance Laundry entered into a
management services agreement with Bain/RCL, L.L.C., an
investment group led by BRS/ RCL Investment Corp. and members of
our management, pursuant to which Bain/RCL, L.L.C. agreed to
provide: (i)&nbsp;general executive and management services;
(ii)&nbsp;identification, support, negotiation and analysis of
acquisitions and dispositions; (iii)&nbsp;support, negotiation
and analysis of financial alternatives; and (iv)&nbsp;other
services agreed upon by Alliance Laundry and Bain/RCL, L.L.C. In
exchange for such services, Bain/RCL, L.L.C. will receive
(i)&nbsp;an annual management fee of $1.0&nbsp;million, plus
reasonable out-of-pocket expenses (payable quarterly) and
(ii)&nbsp;a transaction fee in an amount in accordance with the
general practices of Bain/RCL, L.L.C. at the time of the
consummation of any additional acquisition or divestiture by
Alliance Laundry and of each financing or refinancing (currently
approximately 1.0% of total financings). Pursuant to the
management services agreement, in 2002 transaction fees of
$3.5&nbsp;million were paid with respect to the existing senior
credit facility and the asset backed facility. The management
services agreement has an initial term of ten years subject to
automatic one-year extensions unless Alliance Laundry or
Bain/RCL, L.L.C. provides written notice of termination. We will
terminate this agreement upon the closing of this offering.
</FONT>

<P align="left">
<B><FONT size="2">Registration Rights Agreement</FONT></B>

<P align="left">
<FONT size="2">In May 1998, Alliance Holdings, Raytheon and our
securityholders, entered into a registration rights agreement.
Under the registration rights agreement, the holders of a
majority of the Registrable Securities (as defined in the
registration rights agreement) owned by Bain/RCL, L.L.C. have
the right, subject to certain conditions, to require us to
register any or all of their common equity interests of Alliance
Holdings under the Securities Act at our expense. In addition,
all holders of Registrable Securities are entitled to request
the inclusion of any common equity interests of Alliance
Holdings subject to the registration rights agreement in any
registration statement at our expense whenever we propose to
register any of our common equity interests under the Securities
Act. In connection with all such registrations, we have agreed
to indemnify all holders of Registrable Securities against
certain liabilities, including liabilities under the Securities
Act.
</FONT>

<P align="left">
<B><FONT size="2">Junior Subordinated Promissory Notes</FONT></B>

<P align="left">
<FONT size="2">In May 1998, we issued a junior subordinated
promissory note in the principal amount of $9.0&nbsp;million due
August&nbsp;21, 2009, to Raytheon. In September&nbsp;2003,
Raytheon sold all of its debt and equity interests in us to a
group of investors consisting of affiliates of TCW and Sankaty.
As a result of this transaction, the junior note issued to
Raytheon was cancelled and new junior notes were issued under
the same terms and conditions as for Raytheon. Raytheon had
formerly been our parent prior to May 1998. The affiliates of
Sankaty are affiliates of Bain/RCL, L.L.C. which, before the
sale from Raytheon, owned 55.9% of the outstanding common
membership interests of Alliance Holdings. Pursuant to the terms
of the junior notes, interest accrues at the rate of
19.0%&nbsp;per annum until the eighth anniversary of the date of
issuance of the junior note and at a rate of 13.0% thereafter.
The junior notes are subordinated in priority and subject in
</FONT>

<P align="center"><FONT size="2">86
</FONT>

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<DIV align="left">
<FONT size="2">right and priority of payment to certain
indebtedness described therein. We will repay the junior notes
with the proceeds of this offering.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Seller Preferred Equity</FONT></B>

<P align="left">
<FONT size="2">In May 1998, we issued mandatorily redeemable
preferred membership interests with a liquidation value of
$6.0&nbsp;million to Raytheon. In September 2003, these
preferred membership interest were sold to affiliates of TCW and
Sankaty. These preferred membership interests do not accrete,
accrue or pay dividends and are redeemable at the earlier of
(i)&nbsp;a Change of Control (as defined therein), (ii)&nbsp;any
initial public offering or (iii)&nbsp;2009. The holders of these
preferred membership interests are entitled to receive
distributions from us in an amount equal to their Unreturned
Capital (as defined therein) prior to distributions in respect
of any other membership interests of Alliance Holdings.
</FONT>

<P align="left">
<B><FONT size="2">Management Investor Promissory Notes</FONT></B>

<P align="left">
<FONT size="2">In May 1998, we entered into promissory notes
aggregating approximately $1.8&nbsp;million with certain members
of management to help finance the purchase of common units in
Alliance Holdings. These promissory notes bear interest at a
rate of 5.94%&nbsp;per annum and mature on June&nbsp;5, 2008.
</FONT>

<P align="left">
<B><FONT size="2">Executive Unit Purchase Agreements</FONT></B>

<P align="left">
<FONT size="2">Certain members of our management have entered
into executive unit purchase agreements which govern these
executives&#146; investments in the common membership interests
of Alliance Holdings.
</FONT>

<P align="left">
<FONT size="2">The purchase agreements provide us with a
repurchase option upon the termination of each executive. If the
executive&#146;s termination is the result of death, permanent
disability or without cause, as defined, Class&nbsp;A or
Class&nbsp;L Units, and vested Class&nbsp;M, Class&nbsp;B and
Class&nbsp;C Units may be repurchased by us at a price per unit
equal to fair market value, as defined, and unvested Class M,
Class&nbsp;B and Class&nbsp;C Units may be repurchased at a
price per unit equal to the lower of fair market value or
original value, as defined. If an executive&#146;s termination
is voluntary or for cause, as defined, all units may be
repurchased at a price equal to the lower of fair market value
or original value, unless an executive&#146;s voluntary
termination occurs seven and one-half years from May&nbsp;5,
1998, in which case the repurchase price shall be fair market
value. The Class&nbsp;M, Class&nbsp;B and Class&nbsp;C Units
were purchased by the executives at a nominal value based upon
the subordinated nature of such interests.
</FONT>

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

<P align="left">
<FONT size="2">Bain provides management services to us. In
return for these services we paid management fees of
approximately $1.01&nbsp;million, $1.02&nbsp;million,
$1.02&nbsp;million, $1.03&nbsp;million and $1.02&nbsp;million,
respectively, to affiliates of Bain in each of fiscal 1999,
2000, 2001, 2002 and 2003, respectively. We will cease paying
these fees upon the closing of this offering. In addition, we
will use a portion of the proceeds of this offering to pay
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million to
affiliates of Bain for a one-time, non-recurring transaction fee
in connection with our reorganization and this offering.
</FONT>

<P align="left">
<B><FONT size="2">Investor Rights Agreement</FONT></B>

<P align="left">
<FONT size="2">We will enter into an investor rights agreement
with the existing equity investors and certain members of
management pursuant to which upon any sale of shares of
Class&nbsp;B common stock together with shares of preferred
stock following the second anniversary of the consummation of
this offering, at the option of the holder of such shares, we
will exchange with the purchaser of such shares one IDS for each
share of Class&nbsp;B common stock together with one share of
preferred stock (as may be adjusted for stock splits, dividends,
combinations or reclassifications).
</FONT>

<P align="left">
<FONT size="2">As a condition to any sale of shares of
Class&nbsp;B common stock together with preferred stock
involving an election to require us to issue IDSs in exchange
for such shares:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">such sale and exchange must comply with
    applicable laws, including, without limitation, securities laws,
    laws relating to redemption of common stock and laws relating to
    the issuance of debt;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">87
</FONT>

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<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">such sale and 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">such sale and 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 sale and 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 sale and exchange date;
    </FONT></TD>
</TR>

<TR>
    <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; 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 selling stockholder must have given us at
    least 30 but not more than 60&nbsp;days advance notice of such
    transaction.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<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 bylaws 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
one share of Class&nbsp;A common stock and each share of
preferred stock will be automatically exchanged for one senior
subordinated note.
</FONT>

<P align="left">
<FONT size="2">In addition, the investor rights agreement will
contain the following registration rights:
</FONT>
<P>

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

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    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our existing equity investors will collectively
    have &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 and preferred
    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
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million;
    provided that an equity sponsor must beneficially own more than
    one percent of our outstanding shares of Class&nbsp;A common
    stock, Class&nbsp;B common stock, preferred stock, senior
    subordinated notes, or IDSs, as the case may be, to initiate a
    demand for registration; provided, further, that an equity
    sponsor may exercise a demand right for less than an aggregate
    public offering price of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 the equity sponsor; 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 existing equity investors will have the right
    to include in our future public offerings of securities 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 and preferred
    stock may be exchanged.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">The existing equity investors 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 American Stock Exchange. If the existing equity
investors 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
equity investors. The registration rights are transferable by
the existing equity investors.
</FONT>

<P align="left">
<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 equity investors that have included
securities in such offering against certain liabilities,
including liabilities under the Securities Act.
</FONT>

<P align="left">
<FONT size="2">Furthermore, we have agreed not to repurchase any
shares of Class&nbsp;B common stock and preferred stock prior to
the second anniversary of the consummation of this offering.
</FONT>

<P align="center"><FONT size="2">88
</FONT>

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<DIV align="left">
<A name='126'></A>
</DIV>

<!-- link1 "Description of Certain Indebtedness" -->

<P align="center">
<B>Description of Certain Indebtedness</B>

<P align="left">
<B><FONT size="2">Existing Indebtedness</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>
    <I><FONT size="2">Existing Senior Credit Facility</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Our existing senior credit facility is comprised
of a term loan facility aggregating $193.0&nbsp;million and a
five year $45.0&nbsp;million revolving credit facility. The
existing senior credit facility was entered into to refinance a
prior senior credit facility. As of December&nbsp;31, 2003,
$157.0&nbsp;million was outstanding under the existing senior
credit facility. We will repay all amounts outstanding under the
existing senior credit facility with the proceeds of the
offering received by us, to the extent any indebtedness remains
after application of the initial advance under the new 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>
    <I><FONT size="2">Senior Subordinated Notes</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">We and Alliance Laundry, issued
$110.0&nbsp;million of 9&nbsp;5/8%&nbsp;Senior Subordinated
Notes due in 2008. In conjunction with this offering, we intend
to commence an offer to purchase any and all of our senior
subordinated notes with the proceeds of this offering. The
closing of the offer to purchase will be conditional upon the
receipt, through the offer to purchase, of senior subordinated
notes representing at least a majority of the aggregate
principal amount of such notes and the closing of this offering.
We intend to acquire or redeem all or a significant portion of
the senior subordinated notes through this offer.
</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>
    <I><FONT size="2">Junior Subordinated Promissory Notes</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">On May&nbsp;5, 1998, we issued a junior
subordinated promissory note in the principal amount of
$9.0&nbsp;million, plus accrued interest, due August&nbsp;21,
2009, to Raytheon. In connection with Raytheon&#146;s sale of
its debt and equity interests to a group of investors consisting
of affiliates of each of TCW and Sankaty in September 2003, the
junior note was cancelled and new junior notes were issued under
the same terms and conditions as for Raytheon. To the extent
that any proceeds remain after repaying other existing
indebtedness and paying other transaction fees and expenses, we
will repay amounts outstanding under the junior notes with the
proceeds of the offering. As of December&nbsp;31, 2003,
$24.2&nbsp;million was outstanding under the junior 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>
    <I><FONT size="2">Preferred Interests</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">On May&nbsp;5, 1998, we issued mandatorily
redeemable preferred membership interests to Raytheon. In
September 2003, these preferred membership interests were sold
to affiliates of each of TCW and Sankaty. These preferred
membership interests are redeemable at a redemption price of
$6.0&nbsp;million upon a change of control or certain other
liquidity events. To the extent that any proceeds remain after
repaying other existing indebtedness and paying other
transaction fees and expenses, we may redeem these preferred
membership interests with the proceeds of the 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>
    <I><FONT size="2">Other Debt</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">We will also repay certain other indebtedness
with the proceeds of the offering.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securitization
Facilities</FONT></I>

<P align="left">
<I><FONT size="2">Alliance Laundry Equipment Receivables
2002.</FONT></I><FONT size="2"> On November&nbsp;26, 2002,
through a newly-formed special-purpose bankruptcy remote
subsidiary, Alliance Laundry Equipment Receivables 2002 LLC, or
ALER 2002, and a trust, Alliance Laundry Equipment Receivables
Trust 2002-A, or ALERT 2002A, we entered into an asset backed
facility consisting of a $300.0&nbsp;million revolving facility,
backed by equipment loans and trade receivables originated by
us. During the first three years of the asset backed facility,
we are permitted, from time to time, to sell our trade
receivables and certain equipment loans to the special purpose
subsidiary, which in turn will transfer them to the trust. The
trust finances the acquisition of the trade receivables and
equipment loans through borrowings under the asset backed
facility, which are limited to an advance rate of approximately
95% for equipment loans and between 60% and 70% for trade
receivables. Funding availability for trade receivables is
limited to a maximum of $60.0&nbsp;million, while
</FONT>

<P align="center"><FONT size="2">89
</FONT>

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<DIV align="left">
<FONT size="2">funding for equipment loans is limited at
$300.0&nbsp;million less the amount of funding outstanding for
trade receivables. Funding for the trade receivables and
equipment loans is subject to certain eligibility criteria,
including concentration and other limits, standard for
transactions of this type. After three years from the closing
date, which is December&nbsp;2, 2005, (or earlier in the event
of a rapid amortization event or an event of default), the trust
will not be permitted to request new borrowings under the
facility and the outstanding borrowings will amortize over a
period of up to nine years thereafter. As of December&nbsp;31,
2003, the balance of variable funding notes due to lenders under
the asset backed facility for equipment loans was
$187.8&nbsp;million.
</FONT>
</DIV>

<P align="left">
<FONT size="2">The asset backed facility replaces a similar
facility previously maintained with Lehman Commercial
Paper,&nbsp;Inc. and referred to as the ALRW Facility. In
connection with the establishment of our new asset backed
facility, we, through our special-purpose subsidiaries
repurchased and simultaneously resold the assets held by the
ALRW Facility to the new asset backed facility. Included in 2002
commercial laundry revenue is a gain of approximately
$2.0&nbsp;million related to these transactions, essentially
reflecting the sale of notes receivable under the asset backed
facility and the recognition of previously unrealized gains
related to retained interests in the ALRW Facility. For risks
associated with the asset backed facility, see &#147;Risk
Factors&nbsp;&#151; Risks Relating to Our Business and the
Industry.&#148;
</FONT>

<P align="left">
<I><FONT size="2">Alliance Laundry Equipment
Receivables.</FONT></I><FONT size="2"> Pursuant to the terms of
the ALRW Facility, a trust formed by a special-purpose
bankruptcy remote subsidiary of ours issued $128.2&nbsp;million
of equipment loan-backed notes effective November&nbsp;28, 2000.
The principal source of payments on the notes is collections on
the $137.8&nbsp;million pool of equipment loans transferred to
the trust by us. As a result, the outstanding amount of these
notes declines substantially in tandem with the amount of
outstanding equipment loans in the pool. All of the residual
equity interests in the trust and cash flows remaining from the
pool after required payments on the notes accrue to the benefit
of us. We are also paid a monthly servicing fee equal to
one-twelfth of 1.0% of the aggregate balance of loans held by
the trust. At December&nbsp;31, 2003 and 2002, we have recorded
$5.1&nbsp;million and $7.6&nbsp;million, respectively, related
to the estimated fair value of our beneficial interests in the
notes sold to the trust.
</FONT>

<P align="left">
<B><FONT size="2">New Credit Facility</FONT></B>

<P align="left">
<FONT size="2">Alliance Laundry intends to enter into a
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;new
secured credit facility with a syndicate of financial
institutions, including affiliates of CIBC World Markets Corp.
and Lehman Brothers Inc. as joint lead arrangers and joint book
managers.
</FONT>

<P align="left">
<FONT size="2">We expect that the new credit facility will be
comprised of a senior secured revolving credit facility of up to
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
which we refer to as the &#147;new revolver,&#148; and a senior
secured term loan facility in an aggregate principal amount of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
which we refer to as the &#147;new term loan.&#148;
</FONT>

<P align="left">
<FONT size="2">We expect that the new revolver and the new term
loan will each have
a &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-year
maturity.
</FONT>

<P align="left">
<FONT size="2">We expect that the new credit facility will have
several features similar to credit facilities of this nature,
including but not limited to:
</FONT>

<P align="left">
<I><FONT size="2">Interest Rate and
Fees.</FONT></I><FONT size="2"> We expect that borrowings will
bear interest, at our option, for the new revolver facility and
the new term facility at either (a)&nbsp;the Eurodollar Rate
plus an applicable margin or (b)&nbsp;the Base Rate plus an
applicable margin, as such terms will be defined in the new
credit facility.
</FONT>

<P align="left">
<FONT size="2">We also expect the new revolver will provide
payment to the lenders of a commitment fee on any unused
commitments equal to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;per
annum.
</FONT>

<P align="left">
<I><FONT size="2">Voluntary
Prepayments.</FONT></I><FONT size="2"> We expect that the new
credit facility will provide for voluntary commitment reductions
and prepayments of the new revolver and new senior notes,
respectively, subject to certain conditions and restrictions.
</FONT>

<P align="left">
<I><FONT size="2">Covenants.</FONT></I><FONT size="2"> We expect
that the new credit facility will require that we meet certain
financial tests.
</FONT>

<P align="center"><FONT size="2">90
</FONT>
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<P align="left">
<FONT size="2">We also expect that our new credit facility will
contain customary covenants and restrictions, including, among
others, limitations or prohibitions on declaring and paying
dividends and other distributions, redeeming and repurchasing
our other indebtedness, loans and investments, additional
indebtedness, liens, recapitalizations, mergers, acquisitions
and asset sales and transactions with affiliates.
</FONT>

<P align="left">
<I><FONT size="2">Guarantees.</FONT></I><FONT size="2"> We
expect that the new credit facility will be guaranteed on a
senior secured basis by us and by all of Alliance Laundry&#146;s
direct and indirect wholly-owned domestic subsidiaries (other
than ALER 2002 and ALERT&nbsp;2002A).
</FONT>

<P align="left">
<I><FONT size="2">Collateral.</FONT></I><FONT size="2"> We
expect to give to the administrative agent on behalf of each
lender a security interest in collateral consisting of, without
limitation, a pledge of our intercompany debt, 100% of the
capital stock of our wholly-owned domestic subsidiaries and a
security interest in substantially all our other personal
property.
</FONT>

<P align="left">
<I><FONT size="2">Events of Default.</FONT></I><FONT size="2">
We expect that our new credit facility will specify certain
customary events of default.
</FONT>

<P align="center"><FONT size="2">91
</FONT>

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<DIV align="left">
<A name='115'></A>
</DIV>

<!-- link1 "Description of IDSs" -->

<P align="center">
<B>Description of IDSs</B>

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

<P align="left">
<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.
Each IDS initially represents:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></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">
<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,
recombination 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 recombination 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 recombined or reclassified basis,
as applicable, and the same principal amount of senior
subordinated notes as it previously represented. Immediately
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">
<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 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>

<P align="left">
<FONT size="2">The IDSs will be available in book-entry form
only. As discussed below under &#147;Book-Entry Settlement and
Clearance,&#148; a nominee of the book-entry clearing system
will be the sole registered holder of the IDSs. That means you
will not be a registered holder of IDSs or be entitled to
receive a certificate evidencing your IDSs. You must rely on the
procedures used by 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">
<B><FONT size="2">Voluntary Separation and
Recombination</FONT></B>

<P align="left">
<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 the continuance of a payment default on the senior
subordinated notes for 90&nbsp;days, or the redemption or
maturity of any senior subordinated notes, any holder of shares
of our 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 senior subordinated notes to form
IDSs.
</FONT>

<P align="left">
<FONT size="2">If a sufficient number of shares of our
Class&nbsp;A common stock are held separately (not in the form
of IDSs) to meet the minimum requirements for separate trading
on the American Stock Exchange or any other exchange or
quotation system on which the IDSs are then listed (or were
previously listed) for at least 30&nbsp;consecutive trading
days, we have agreed that we will use reasonable efforts to
cause the Class&nbsp;A common stock to be listed on the American
Stock Exchange or any other exchange or quotation system on
which the IDSs are then listed (or were previously listed).
</FONT>

<P align="center"><FONT size="2">92
</FONT>

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

<P align="left">
<FONT size="2">Upon the occurrence of any of the following, all
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="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></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 date or upon acceleration thereof,&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 is unwilling or unable to continue as
    securities depository with respect to the IDSs 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">
<FONT size="2">Following the automatic separation of the IDSs as
a result of the continuance of a payment default on the senior
subordinated notes for 90&nbsp;days, or the redemption or
maturity of any senior subordinated notes, shares of
Class&nbsp;A common stock and senior subordinated notes may no
longer be combined to form IDSs.
</FONT>

<P align="left">
<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 to convert the Class&nbsp;B
common stock and preferred stock to Class&nbsp;A common stock
and senior subordinated notes.
</FONT>

<P align="left">
<B><FONT size="2">Book-Entry Settlement and Clearance</FONT></B>

<P align="left">
<FONT size="2">DTC will act as securities depository for the
IDSs, and the senior subordinated notes and shares of
Class&nbsp;A common stock represented by the IDSs, or the
&#147;securities.&#148; The senior subordinated notes and the
shares of our Class&nbsp;A common stock represented by the IDSs
will be represented by one or more global notes and global stock
certificates. The global notes and global stock certificates
will be issued in fully-registered form in the name of
DTC&#146;s nominee, Cede&nbsp;&#38; Co.
</FONT>

<P align="left">
<I><FONT size="2">Book-Entry
Procedures.</FONT></I><FONT size="2"> 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&#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. Beneficial owners will not receive written confirmation
from DTC of their purchases, but beneficial owners are expected
to receive written confirmations providing details of their
purchase and sale transactions, as well as periodic statements
of their holdings, from the DTC participant through which the
beneficial owner entered into their purchase and sale
transactions.
</FONT>

<P align="left">
<FONT size="2">All interests in the securities will be subject
to the operations and procedures of DTC. We provide the
following summary of DTC&#146;s operations solely for your
convenience. The operations and procedures of DTC may be changed
at any time. We are not responsible for those procedures and
operations.
</FONT>

<P align="left">
<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&nbsp;York, a &#147;banking organization&#148; within the
meaning of the New&nbsp;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
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>

<P align="left">
<FONT size="2">To facilitate subsequent transfers, all
securities deposited by direct participants with DTC are
registered in the name of DTC&#146;s nominee, Cede&nbsp;&#38;
Co. The deposit of securities with DTC and their registration in
the
</FONT>

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</FONT>
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<DIV align="left">
<FONT size="2">name of Cede&nbsp;&#38; Co. 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 will remain responsible for
keeping account of their holdings on behalf of their customers.
</FONT>
</DIV>

<P align="left">
<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">
<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, unless
the IDSs have previously been automatically separated as a
result of the continuance of a payment default on the senior
subordinated notes for 90&nbsp;days, or the redemption or
maturity of any senior subordinated notes, 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">
<FONT size="2">In addition, the 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="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></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 date or upon acceleration thereof,&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 is unwilling or unable to continue as
    securities depository with respect to the IDSs 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">
<FONT size="2">Following the automatic separation of the IDSs as
a result of the continuance of a payment default on the senior
subordinated notes for 90&nbsp;days, or the redemption or
maturity of any senior subordinated notes, shares of
Class&nbsp;A common stock and senior subordinated notes may no
longer be combined to form IDSs.
</FONT>

<P align="left">
<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 to convert the Class&nbsp;B
common stock and the preferred stock to common stock and senior
subordinated notes.
</FONT>

<P align="left">
<FONT size="2">Any voluntary or automatic separation of IDSs and
any subsequent combination of IDSs from senior subordinated
notes and Class&nbsp;A common stock are to be accomplished by
entries made by the DTC participants acting on behalf of
beneficial owners. In any such case, the participant&#146;s
account through which a separation or combination is effected
will be credited and debited for the applicable securities on
DTC&#146;s records. Depending on the arrangements between a
holder and his or her brokerage firm, and the brokerage
arrangements with the DTC participant, the transaction fee for
any voluntary separation or recombination may be passed directly
on to the holder.
</FONT>

<P align="left">
<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">
<FONT size="2">Neither DTC nor Cede&nbsp;&#38; Co. will consent
or vote with respect to the securities. 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>

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<P align="left">
<FONT size="2">We and the transfer agent and registrar will make
any payments on the securities 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">
<FONT size="2">We or the transfer agent and registrar will be
responsible for the payment of all amounts 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">
<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">
<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="left">
<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">
<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="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></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 or 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">
<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 identical to the senior subordinated notes represented by
the IDSs except for the issuance date, if we determine that such
new senior subordinated notes need to have a new CUSIP number,
each holder of senior subordinated notes or IDSs (as the case
may be) agrees that a portion of such holder&#146;s senior
subordinated notes (whether held directly in book-entry form or
held as part of IDSs) will be exchanged, without any further
action of such holder, for a portion of the senior subordinated
notes acquired by the holders of such subsequently issued senior
subordinated notes. Consequently, following each such subsequent
issuance and exchange, each holder of senior subordinated notes
or IDSs (as the case may be) will own an indivisible unit
composed of senior subordinated notes of each separate issuance
in the same proportion as each other holder. 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
</FONT>

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<DIV align="left">
<FONT size="2">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
with a position in the securities will be automatically revised
to reflect the new CUSIP numbers.
</FONT>
</DIV>

<P align="left">
<FONT size="2">Most subsequent issuances of senior subordinated
notes, including subsequent issuances of senior subordinated
notes which have OID and all subsequent issuances 180 days after
the date of this offering, may require trades on
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
settle up to 24&nbsp;hours after the date such trades would
settle absent such subsequent issuance or settle for cash,
consistent with such exchange&#146;s practices for the date of
such issuance.
The &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;has
informed us that they will broadcast any such alternate
settlement procedures in advance of any relevant trading day,
consistent with their established procedures. Based upon these
discussions, we do not believe that any settlement delays or
cash settlement procedures, if any, associated with subsequent
issuances will have a significant impact on the IDS trading
market. Immediately 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">
<FONT size="2">The Bank of New&nbsp;York is the IDS transfer
agent.
</FONT>

<P align="center"><FONT size="2">96
</FONT>

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<DIV align="left">
<A name='116'></A>
</DIV>

<!-- link1 "Description of Capital Stock" -->

<P align="center">
<B>Description of Capital Stock</B>

<P align="left">
<FONT size="2">The following is a description of the terms of
our amended and restated certificate of incorporation and
by-laws, the forms of which have been filed with the Securities
and Exchange Commission, or SEC, as exhibits to the registration
statement of which this prospectus is part and which will become
effective prior to the offering contemplated by this prospectus.
</FONT>

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

<P align="left">
<FONT size="2">Our authorized capital stock consists of:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of Class&nbsp;A common stock, par value $0.01&nbsp;per share;
    </FONT></TD>
</TR>

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

<TR>
    <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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of Class&nbsp;B common stock, par value $0.01&nbsp;per share;
    </FONT></TD>
</TR>

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

<TR>
    <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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of Class&nbsp;C common stock, par value $0.01&nbsp;per
    share;&nbsp;and
    </FONT></TD>
</TR>

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

<TR>
    <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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    of preferred stock, par value $0.01&nbsp;per share.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">After this offering 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 our 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;&nbsp;shares
of our Class&nbsp;B common stock, no shares of our 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 our preferred stock outstanding.
</FONT>

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

<P align="left">
<FONT size="2">Except as described below, shares of our
Class&nbsp;A common stock, Class&nbsp;B common stock and
Class&nbsp;C common stock are identical in all respects. In
addition, we have entered into an agreement with our existing
equity investors which, subject to certain conditions, allows
them to exchange their shares of Class&nbsp;B common stock
together with preferred stock for IDSs, see &#147;Related Party
Transactions&#151;Investor Rights Agreement.&#148; There are
currently no shares of Class&nbsp;C common stock outstanding,
and following the completion of this offering, no shares of our
Class&nbsp;C common stock will be outstanding. All outstanding
shares of common stock are, and all shares of common stock to be
outstanding upon completion of this offering will be, validly
issued, fully paid and nonassessable.
</FONT>

<P align="left">
<I><FONT size="2">Dividends.</FONT></I><FONT size="2"> Holders
of shares of our Class&nbsp;A common stock, Class&nbsp;B common
stock and 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. Holders of our
Class&nbsp;A common stock, Class&nbsp;B common stock and
Class&nbsp;C common stock will be paid equal dividends. See
&#147;Dividend Policy&#148; for a complete description of the
dividends we expect to declare on our shares of common stock.
</FONT>

<P align="left">
<I><FONT size="2">Combination with Senior Subordinated Notes to
Form&nbsp;IDSs.</FONT></I><FONT size="2"> Only shares of our
Class&nbsp;A common stock may be combined with senior
subordinated notes to form IDSs. Our bylaws will provide that we
may only issue additional shares of our 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.
</FONT>

<P align="left">
<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 common stock will be entitled to share
equally in our assets remaining after payment of all debts and
other liabilities, subject to the liquidation preference of any
outstanding preferred stock.
</FONT>

<P align="left">
<I><FONT size="2">Voting Rights.</FONT></I><FONT size="2">
Shares of our common stock carry one vote per share. Holders of
shares of our common stock have no cumulative voting rights.
</FONT>

<P align="left">
<I><FONT size="2">Other Rights.</FONT></I><FONT size="2">
Holders of shares of our common stock have no preemptive rights.
The holders of common stock are subject to, and may be adversely
affected by, the rights of the holders of shares of any series
of preferred stock that we may designate and issue in the future.
</FONT>

<P align="center"><FONT size="2">97
</FONT>

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

<P align="left">
<FONT size="2">Following the consummation of the offering, our
existing equity investors will
hold &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of preferred stock.
</FONT>

<P align="left">
<I><FONT size="2">Ranking.</FONT></I><FONT size="2"> The
preferred stock ranks senior to the common stock with respect to
payment of dividends and amounts distributable upon liquidation,
dissolution or winding up.
</FONT>

<P align="left">
<I><FONT size="2">Dividends.</FONT></I><FONT size="2"> The
holders of our preferred stock will be entitled to receive
cumulative dividends which will accrue at a rate
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;per annum on a deemed
issuance price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share which will be equal to the aggregate principal amount of
each senior subordinated note; provided that during the
continuation of any event of default under the indenture
governing the senior subordinated notes, dividends will accrue
at a rate of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;per annum.
Such dividends will accrue whether or not declared and whether
or not we have funds legally available for the payment of
dividends. Such dividends will be paid, if declared by the
board, on the last day of each fiscal quarter or, to the extent
not previously paid, at such time as such shares of preferred
stock are exchanged for IDSs; and provided further, that such
dividends may only be paid to the extent allowable under
applicable law, the terms of our new credit facility and the
indenture governing our senior subordinated notes.
</FONT>

<P align="left">
<I><FONT size="2">Liquidation
Preference.</FONT></I><FONT size="2"> The holders of the
preferred stock are entitled to receive in the event of any
liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary,
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share of preferred stock plus an amount per share of preferred
stock equal to all dividends (whether or not earned or declared)
accrued and unpaid thereon to the date of final distribution to
such holders (the &#147;Preferred Liquidation Preference&#148;).
</FONT>

<P align="left">
<FONT size="2">Until the holders of the preferred have been paid
the Preferred Liquidation Preference in full, no payment will be
made to any holder of common stock upon the liquidation,
dissolution or winding up of the Company. If, upon any
liquidation, dissolution or winding up of the Company, the
assets of the Company, or proceeds thereof, distributable among
the holders of the shares of preferred stock are insufficient to
pay in full the Preferred Liquidation Preference and the
liquidation preference with respect to any other shares that
rank pari passu with the preferred stock on liquidation, then
such assets, or the proceeds thereof, will be distributed among
the holders of shares of preferred stock and any such shares
that rank pari passu with the preferred stock ratably in
accordance with the respective amounts which would be payable on
such shares of preferred stock if all amounts payable thereon
were paid in full. Neither a consolidation or merger of the
Company with another corporation, a statutory share exchange by
the Company nor a sale or transfer of all or substantially all
of the Company&#146;s assets will be considered a liquidation,
dissolution or winding up, voluntary or involuntary, of the
Company.
</FONT>

<P align="left">
<I><FONT size="2">Voting Rights. </FONT></I><FONT size="2">The
preferred stock will not vote on matters generally presented to
the stockholders.
</FONT>

<P align="left">
<FONT size="2">In addition, our board of directors has the
authority to issue additional shares of preferred stock from
time to time on terms that it may determine, to divide shares of
preferred stock into one or more series and to fix the
designations, voting powers, preferences and relative
participating, optional or other special rights of each series,
and the qualifications, limitations or restrictions of each
series, to the fullest extent permitted by the General
Corporation Law of the State of Delaware, or DGCL. The issuance
of shares of preferred stock could have the effect of decreasing
the market price of the IDSs and our shares of common stock,
impeding or delaying a possible takeover and adversely affecting
the voting and other rights of the holders of shares of our
common stock.
</FONT>

<P align="left">
<B><FONT size="2">Anti-Takeover Effects of Various Provisions of
Delaware Law and Our Certificate of Incorporation and By
laws</FONT></B>

<P align="left">
<FONT size="2">Provisions of Delaware law and our amended and
restated certificate of incorporation and bylaws could make it
more difficult to acquire us by means of a tender offer, a proxy
contest or otherwise, or to remove incumbent officers and
directors. These provisions, summarized below, are expected to
discourage types of coercive takeover practices and inadequate
takeover bids and to encourage persons seeking to acquire
control of us to first negotiate with us. We believe that the
benefits of increased protection of our potential
</FONT>

<P align="center"><FONT size="2">98
</FONT>
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<DIV align="left">
<FONT size="2">ability to negotiate with the proponent of an
unfriendly or unsolicited proposal to acquire or restructure us
outweigh the disadvantages of discouraging takeover or
acquisition proposals because, among other things, negotiation
of these proposals could result in an improvement of their terms.
</FONT>
</DIV>

<P align="left">
<I><FONT size="2">Delaware Anti-Takeover
Statute.&nbsp;</FONT></I><FONT size="2">We are subject to
Section&nbsp;203 of the Delaware General Corporation Law, or
DGCL, an anti-takeover statute. 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 period of three years following the date
the person became an interested stockholder, unless (with
certain exceptions) the &#147;business combination&#148; or the
transaction in which the person became an interested stockholder
is approved in a prescribed manner. Generally, a &#147;business
combination&#148; includes a merger, asset or stock sale, or
other transaction resulting in a financial benefit to the
interested stockholder. Generally, an &#147;interested
stockholder&#148; is a person who, together with affiliates and
associates, owns (or within three years prior to the
determination of interested stockholder status, did own) 15% or
more of a corporation&#146;s voting stock. The existence of this
provision would be expected to have an anti-takeover effect with
respect to transactions not approved in advance by the board of
directors, including discouraging attempts that might result in
a premium over the market price for the shares of common stock
held by stockholders.
</FONT>

<P align="left">
<I><FONT size="2">No Cumulative
Voting.&nbsp;</FONT></I><FONT size="2">The DGCL provides that
stockholders are denied the right to cumulate votes in the
election of directors unless our amended and restated
certificate of incorporation provides otherwise. Our amended and
restated certificate of incorporation will not expressly provide
for cumulative voting.
</FONT>

<P align="left">
<I><FONT size="2">No Stockholder Action by Written Consent;
Calling of Special Meeting of
Stockholders.&nbsp;</FONT></I><FONT size="2">Our organizational
documents prohibit stockholder action by written consent. Our
amended and restated certificate of incorporation will provide
that special meetings of our stockholders may be called only by
our board of directors.
</FONT>

<P align="left">
<I><FONT size="2">Advance Notice Requirements for Stockholder
Proposals and Director Nominations.
</FONT></I><FONT size="2">Our bylaws will provide that
stockholders seeking to bring business before or to nominate
candidates for election as directors at an annual meeting of
stockholders must provide timely notice of their proposal in
writing to the corporate secretary. To be timely, a
stockholder&#146;s notice regarding (1)&nbsp;a
stockholder&#146;s proposal must be delivered or mailed and
received at our principal executive offices not less than
60&nbsp;days not more than 90&nbsp;days prior to the meeting or
(2)&nbsp;a director nomination must be delivered or mailed and
received at our principal executive offices not less than 60 nor
more than 90&nbsp;days in advance of the anniversary date of the
immediately preceding annual meeting of stockholders; provided
that if less than 70&nbsp;days notice or prior public
announcement of the date of the meeting is given, notice
regarding stockholder nominations for the election of directors
or notice of other stockholder proposals must be received by our
corporate secretary by the later of 10&nbsp;days following the
day on which notice of the date of the special meeting was
mailed or public disclosure of the date of the special meeting
was made. Our bylaws will also specify requirements as to the
form and content of a stockholder&#146;s notice. These
provisions may impede stockholders&#146; ability to bring
matters before an annual meeting of stockholders or make
nominations for directors at an annual meeting of stockholders.
</FONT>

<P align="left">
<I><FONT size="2">Limitations on Liability and Indemnification
of Officers and Directors.&nbsp;</FONT></I><FONT size="2">The
DGCL authorizes corporations to limit or eliminate the personal
liability of directors to corporations and their stockholders
for monetary damages for breaches of directors&#146; fiduciary
duties as directors. Our organizational documents include
provisions that eliminate, to the extent allowable under the
DGCL, the personal liability of directors for monetary damages
for actions taken as a director. Our organizational documents
also provide that we must indemnify and advance reasonable
expenses to our directors and officers to the fullest extent
authorized by the DGCL. We will also be expressly authorized to
carry directors&#146; and officers&#146; insurance for our
directors, officers and certain employees for some liabilities.
</FONT>

<P align="left">
<FONT size="2">The limitation of liability and indemnification
provisions in our amended and restated certificate of
incorporation and bylaws may discourage stockholders from
bringing a lawsuit against directors for breach of their
fiduciary duty. These provisions may also have the effect of
reducing the likelihood of derivative litigation against
directors and officers, even though such an action, if
successful, might otherwise benefit
</FONT>

<P align="center"><FONT size="2">99
</FONT>

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<DIV align="left">
<FONT size="2">us and our stockholders. In addition, your
investment may be adversely affected to the extent that, in a
class action or direct suit, we pay the costs of settlement and
damage awards against directors and officers pursuant to these
indemnification provisions.
</FONT>
</DIV>

<P align="left">
<FONT size="2">There is currently no pending material litigation
or proceeding involving any of our directors, officers or
employees for which indemnification is sought.
</FONT>

<P align="left">
<I><FONT size="2">Removal of
Directors.</FONT></I><FONT size="2">&nbsp;Our organizational
documents provide that directors may be removed only for cause
by the affirmative vote of at least a majority in voting power
of the outstanding shares of our capital stock entitled to vote.
</FONT>

<P align="left">
<I><FONT size="2">Authorized but Unissued
Shares.</FONT></I><FONT size="2">&nbsp;Our authorized but
unissued shares of common stock and preferred stock will be
available for future issuance without your approval. We may use
additional shares for a variety of corporate purposes, including
future public offerings to raise additional capital, corporate
acquisitions and employee benefit plans. The existence of
authorized but unissued shares of common stock and preferred
stock could render more difficult or discourage an attempt to
obtain control of us by means of a proxy contest, tender offer,
merger or otherwise.
</FONT>

<P align="left">
<I><FONT size="2">Supermajority
Provisions.&nbsp;</FONT></I><FONT size="2">The DGCL provides
generally that the affirmative vote of a majority in voting
power of the outstanding shares entitled to vote is required to
amend a corporation&#146;s certificate of incorporation, unless
the certificate of incorporation or bylaws require a greater
percentage. Our organizational documents provide that the
following provisions in the certificate of incorporation or
bylaws may be amended only by a vote of two-thirds or more in
voting power of all the outstanding shares of our capital stock
entitled to vote:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the prohibition on stockholder action by written
    consent;
    </FONT></TD>
</TR>

<TR>
    <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 ability to call a special meeting of
    stockholders being vested solely in our board of directors and
    the chairman 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 provisions relating to advance notice
    requirements for stockholder proposals and directors nominations;
    </FONT></TD>
</TR>

<TR>
    <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 relating to the 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 limitation on the liability of our directors
    to us and our stockholders and the obligation to indemnify and
    advance reasonable expenses to the directors and officers to the
    fullest extent authorized by the DGCL;
    </FONT></TD>
</TR>

<TR>
    <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 granting authority to our board of
    directors to amend or repeal our bylaws without a stockholder
    vote, as described in more detail in the next succeeding
    paragraph; 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 supermajority voting requirements listed
    above.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">In addition, our amended and restated certificate
of incorporation grants our board of directors the authority to
amend and repeal our bylaws without a stockholder vote in any
manner not inconsistent with the laws of the State of Delaware
or our amended and restated certificate of incorporation. Our
amended and restated certificate of incorporation provides that
these provisions in our amended and restated certificate of
incorporation may be amended only by a vote of two-thirds or
more in voting power of all the outstanding shares of our
capital stock entitled to vote.
</FONT>

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

<P align="left">
<FONT size="2">We will apply to list the IDSs on the American
Stock Exchange under the trading symbol
&#147;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.&#148;
</FONT>

<P align="left">
<B><FONT size="2">Transfer Agent and Registrar</FONT></B>

<P align="left">
<FONT size="2">The transfer agent and registrar for our
Class&nbsp;A common stock and Class&nbsp;B common stock
is &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;.
</FONT>

<P align="center"><FONT size="2">100
</FONT>

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<DIV align="left">
<A name='117'></A>
</DIV>

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<P align="center">
<B>Description of Senior Subordinated Notes</B>

<P align="left">
<FONT size="2">The following is a description of the terms of
the indenture under which our senior subordinated 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. We refer to Alliance Laundry Holdings
Inc. as the &#147;Company&#148; in this &#147;Description of
Senior Subordinated Notes&#148; section.
</FONT>

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

<P align="left">
<FONT size="2">The Notes are to be issued under an indenture, to
be dated as
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004 (the &#147;Indenture&#148;), among us, the subsidiary
guarantor
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
as Trustee (the &#147;Trustee&#148;).
</FONT>

<P align="left">
<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.
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.
Capitalized terms used in this &#147;Description of Senior
Subordinated Notes&#148; section and not otherwise defined have
the meanings set forth in &#147;&#151;&nbsp;Certain
Definitions&#148; hereafter.
</FONT>

<P align="left">
<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">
<FONT size="2">The Company may 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 Indebtedness
evidenced by such Additional Notes and related Guarantees, the
Company and the Guarantors are solvent.
</FONT>

<P align="left">
<FONT size="2">The Notes will be issued only in fully-registered
form, without coupons represented by one or more global notes
which will be registered in the name of Cede&nbsp;&#38; Co., the
nominee of DTC. See &#147;Description of IDSs&nbsp;&#151;
Book-Entry Settlement and Clearance.&#148;
</FONT>

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

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

<P align="left">
<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;,
2014. The Company may extend the maturity of the Notes for two
additional successive five-year terms if the following
conditions are satisfied:
</FONT>
<P>

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    <TD width="2%"></TD>
    <TD width="97%"></TD>
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    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">during the twelve month period ending on the last
    day of the most recent fiscal quarter ending at least
    45&nbsp;days before the end of the then-current term, our Fixed
    Charge Coverage Ratio is greater
    than &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
    1.0;
    </FONT></TD>
</TR>

<TR>
    <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 (including certain events of
    bankruptcy, insolvency or reorganization of the Company or a
    Significant Subsidiary) has occurred and is continuing with
    respect to the Notes;&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">no event of default has occurred and is
    continuing with respect to any other Indebtedness of the Company
    having a principal amount in excess of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    or could occur as a result of such extension, including under
    any Designated Senior Indebtedness.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">If the Company is going to extend the maturity of
the Notes, the Company will cause a notice of such extension,
including the new maturity date, to be sent to holders at least
30 and not more than 60&nbsp;days prior to the previously
scheduled maturity date.
</FONT>

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</FONT>

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<FONT size="2">Within 30&nbsp;days prior to the maturity or
redemption of the Notes, unless the Company has sent a notice of
extension of the maturity date, the Company will use its
reasonable efforts to list or quote the outstanding shares of
its Class&nbsp;A 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 Class&nbsp;A common stock is
then listed.
</FONT>

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

<P align="left">
<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 on the last day of
each &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;, &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;to
Holders of record at the close of business on
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;day
or the immediately preceding Business Day of such month,
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>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest
Deferral</FONT></I>

<P align="left">
<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;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; <I>provided,
however,</I> 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 <I>provided,
further,</I> 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">
<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 and prior
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2014 and during the term of each additional five-year term of
the senior subordinated notes, if any, the Company will be
permitted, at its election, on two occasions to defer interest
payments on the Notes (also an &#147;Interest Deferral
Period&#148;) with respect to two quarters 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; <I>provided,
however,</I> 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, and 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; and <I>provided,
further,</I> that interest payments on the Notes may not be
deferred under this provision for more than two 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;,
2014. At the end of any such Interest Deferral Period, the
Company may not defer interest again on the Notes unless and
until all deferred interest is paid in full.
</FONT>

<P align="left">
<FONT size="2">Deferred interest on the Notes will bear interest
at a rate per annum of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%,
compounded quarterly, until paid in full. At the end of any
Interest Deferral Period, the Company must pay all deferred
interest and accrued interest thereon and thereafter, the
Company will be obligated to resume quarterly payments of
interest on the Notes.
</FONT>

<P align="left">
<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 Capital Stock.
</FONT>

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</FONT>

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

<P align="left">
<FONT size="2">The Notes will be redeemable at the
Company&#146;s option as provided in the Indenture.
</FONT>

<P align="left">
<FONT size="2">In the case of any partial redemption, selection
of the Notes for redemption will be made by the Trustee on a pro
rata basis, by lot or by such other method as the Trustee shall
deem fair and appropriate (and in such manner as complies with
the applicable legal and regulatory requirements). If any Note
is to be redeemed in part only, the notice of redemption
relating to such Note shall state the portion of the principal
amount thereof to be redeemed. A new Note in principal amount
equal to the unredeemed portion thereof will be issued in the
name of the holder thereof upon cancellation of the original
Note. On and after the date of redemption, interest will cease
to accrue on Notes or portions thereof called for redemption, so
long as the Company has deposited with the depositary funds
sufficient to pay the principal of, plus accrued and unpaid
interest (including any deferred interest and accrued interest
thereon) on, the Notes to be redeemed.
</FONT>

<P align="left">
<FONT size="2">A full or partial redemption of the Notes will
result in an automatic separation of the IDSs. See
&#147;Description of IDSs&#151;Automatic Separation.&#148;
</FONT>

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

<P align="left">
<FONT size="2">The Indebtedness evidenced by the Notes will be
unsecured senior subordinated Indebtedness of the Company, will
be subordinated in right of payment, to the extent and in the
manner provided in the Indenture, to the prior payment in full
in cash of all existing and future Senior Indebtedness of the
Company, including the Credit Agreement, will rank <I>pari passu
</I>in right of payment with all existing and future Pari Passu
Indebtedness of the Company and will rank senior in right of
payment to all existing and future Subordinated Indebtedness of
the Company. The Notes will also be effectively subordinated to
any Secured Indebtedness of the Company to the extent of the
value of the assets securing such Indebtedness. However, payment
from the money or the proceeds of U.S.&nbsp;Government
Obligations held in any defeasance trust described under
&#147;&#151;&nbsp;Defeasance&#148; below is not subordinated to
any Senior Indebtedness or subject to the restrictions described
herein.
</FONT>

<P align="left">
<FONT size="2">The indebtedness evidenced by each Guarantee will
be unsecured senior subordinated indebtedness of the applicable
Guarantor, will be subordinated in right of payment, to the
extent and in the manner provided in the Indenture, to the prior
payment in full in cash of all existing and future Senior
Indebtedness of such Guarantor, including the Senior
Indebtedness of each Guarantor represented by such
Guarantor&#146;s guarantee of the Credit Facilities, will rank
<I>pari passu </I>in right of payment with all existing and
future Pari Passu Indebtedness and trade payables of such
Guarantor and will rank senior in right of payment to all
existing and future Subordinated Indebtedness of such Guarantor.
The Guarantees will also be effectively subordinated to any
Secured Indebtedness of the applicable Guarantor to the extent
of the value of the assets securing such Indebtedness.
</FONT>

<P align="left">
<FONT size="2">As of December&nbsp;31, 2003, on a pro forma
basis, (i)&nbsp;the Company would have had
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Senior
Indebtedness outstanding, (ii)&nbsp;the Company would have had
no Pari Passu Indebtedness outstanding other than the Notes,
(iii)&nbsp;the Guarantor would have had
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
in Senior Indebtedness outstanding under the Credit Agreement,
all of which would have been Secured Indebtedness, and
(iv)&nbsp;the Guarantor would have had no Pari Passu
Indebtedness outstanding other than the Guarantees and
(v)&nbsp;the Non-Guarantor Subsidiaries would have had total
liabilities, excluding liabilities owed to us, of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.
Although the Indenture will contain limitations on the amount of
additional Indebtedness which the Company, the Guarantors and
the Non-Guarantor Subsidiaries may Incur, under certain
circumstances the amount of such Indebtedness could be
substantial and, in any case, such Indebtedness may be Senior
Indebtedness or Secured Indebtedness. See
&#147;&#151;Limitations on Incurrence of Indebtedness and
Issuance of Disqualified Stock and Preferred Stock&#148; below.
</FONT>

<P align="left">
<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. As of December&nbsp;31, 2003, on a pro forma
basis, the total liabilities of
</FONT>

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<DIV align="left">
<FONT size="2">the Company&#146;s subsidiaries were
approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
including trade payables. Although the Indenture will limit the
Incurrence of Indebtedness by and the issuance of Preferred
Stock of certain of the Company&#146;s subsidiaries, such
limitation is subject to a number of significant qualifications.
</FONT>
</DIV>

<P align="left">
<FONT size="2">&#147;Senior Indebtedness&#148; with respect to
the Company or any Guarantor means the Senior Lender
Indebtedness and all other Indebtedness of the Company or such
Guarantor, including principal, interest thereon (including
interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company or any
Subsidiary of the Company at the rate specified in the
applicable Senior Indebtedness, whether or not a claim for
post-filing interest is allowed in such proceeding) and other
amounts (including make-whole payments, fees, expenses,
reimbursement obligations under letters of credit and
indemnities) owing in respect thereof, whether outstanding on
the Issue Date or thereafter Incurred, unless in the instrument
creating or evidencing the same or pursuant to which the same is
outstanding it is provided that such obligations are not
superior, or are subordinated, in right of payment to the Notes
or such Guarantor&#146;s Guarantee, as applicable; provided,
however, that Senior Indebtedness shall not include, as
applicable, (i)&nbsp;any obligation of the Company to any
Subsidiary of the Company or of such Guarantor to the Company or
any other Subsidiary of the Company, (ii)&nbsp;any liability for
federal, state, local or other taxes owed or owing by the
Company or such Guarantor, (iii)&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), (iv)&nbsp;any Indebtedness or
obligation of the Company or such Guarantor which is Pari Passu
Indebtedness, (v)&nbsp;any obligations with respect to any
Capital Stock, and (vi)&nbsp;any Indebtedness Incurred in
violation of the Indenture.
</FONT>

<P align="left">
<FONT size="2">Only Senior Indebtedness or Secured Indebtedness
of the Company or a Guarantor will rank senior to the Notes or
the relevant Guarantee in accordance with the provisions of the
Indenture. The Notes and each Guarantee will in all respects
rank <I>pari passu </I>with all other Pari Passu Indebtedness of
the Company and the relevant Guarantor, respectively.
</FONT>

<P align="left">
<FONT size="2">The Company may not pay principal of, premium (if
any) or interest on, the Notes or make any deposit pursuant to
the provisions described under &#147;Defeasance&#148; below and
may not otherwise purchase, redeem or otherwise retire any Notes
(except that Holders may receive and retain (a)&nbsp;Permitted
Junior Securities and (b)&nbsp;payments made from the trust
described under &#147;&#151;Defeasance&#148; below so long as,
on the date or dates the respective amounts were paid into the
trust, such payments were made with respect to the Notes without
violating the subordination provisions described herein or any
other material agreement binding on the Company, including the
Credit Agreement) (collectively, &#147;pay the Notes&#148;) if
(i)&nbsp;a default in the payment of the principal of, premium,
if any, or interest on any Designated Senior Indebtedness occurs
and is continuing or any other amount owing in respect of any
Designated Senior Indebtedness is not paid when due, or
(ii)&nbsp;any other default on any Designated Senior
Indebtedness occurs and results in such Designated Senior
Indebtedness becoming due or being declared due and payable
prior to the date on which it would otherwise become due and
payable in accordance with its terms unless, in either case, the
default has been cured or waived and any such acceleration has
been rescinded or such Designated Senior Indebtedness has been
paid in full. However, the Company may pay the Notes without
regard to the foregoing if the Company and the Trustee receive
written notice approving such payment from the Representative of
each series of the Designated Senior Indebtedness with respect
to which either of the events set forth in clause&nbsp;(i) or
(ii) of the immediately preceding sentence has occurred and is
continuing. During the continuance of any default (other than a
default described in clause&nbsp;(i) or (ii) of the second
preceding sentence) with respect to any Designated Senior
Indebtedness pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such
notice as may be required to effect such acceleration) or upon
the expiration of any applicable grace periods, the Company may
not pay the Notes for a period (a &#147;Payment Blockage
Period&#148;) commencing upon the receipt by the Trustee (with a
copy to the Company) of written notice (a &#147;Blockage
Notice&#148;) of such default from the Representative of such
defaulted Designated Senior Indebtedness specifying an election
to effect a Payment Blockage Period and ending 179&nbsp;days
thereafter (or earlier if such Payment Blockage Period is
terminated (i)&nbsp;by written notice to the Trustee and the
Company from the Person or Persons who gave such Blockage
Notice, (ii)&nbsp;by repayment in full of such defaulted
Designated Senior Indebtedness or (iii)&nbsp;because the
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">default giving rise to such Blockage Notice is no
longer continuing). Notwithstanding the provisions described in
the immediately preceding sentence (but subject to the
provisions contained in the first sentence of this paragraph and
in the succeeding paragraph), unless the holders of such
defaulted Designated Senior Indebtedness or the Representative
of such holders have accelerated the maturity of such defaulted
Designated Senior Indebtedness, the Company may resume payments
on the Notes after the end of such Payment Blockage Period. 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 any 360 consecutive day period. For
purposes of this provision, no default or event of default that
existed or was continuing on the date of the commencement of any
Payment Blockage Period with respect to the Designated Senior
Indebtedness initiating such Payment Blockage Period shall be,
or be made, the basis of the commencement of a subsequent
Payment Blockage Period by the Representative of such Designated
Senior Indebtedness, unless such default or event of default
shall have been cured or waived for a period of not less than 90
consecutive days.
</FONT>
</DIV>

<P align="left">
<FONT size="2">Upon any payment or distribution of the assets of
the Company upon a total or partial liquidation or dissolution
or bankruptcy reorganization of, insolvency, receivership or
similar proceeding relating to the Company or its property or an
assignment for the benefit of its creditors or any marshalling
of the Company&#146;s assets or liabilities, the holders of
Senior Indebtedness will be entitled to receive payment in full
in cash of all the Senior Indebtedness before the Noteholders
are entitled to receive any payment, and until the Senior
Indebtedness is paid in full in cash, any payment or
distribution to which Noteholders would be entitled but for the
subordination provisions of the Indenture will be made to
holders of the Senior Indebtedness as their interests may appear
(except that Holders of Notes may receive and retain
(i)&nbsp;Permitted Junior Securities, and (ii)&nbsp;payments
made from the trust described under &#147;&#151;Defeasance&#148;
so long as, on the date or dates the respective amounts were
paid into the trust, such payments were made with respect to the
Notes without violating the subordination provisions described
herein or any other material agreement binding on the Company,
including the Credit Agreement). If a distribution is made to
Noteholders that due to the subordination provisions of the
Indenture should not have been made to them, such Noteholders
are required to hold it in trust for the holders of Senior
Indebtedness and pay it over to them as their interests may
appear.
</FONT>

<P align="left">
<FONT size="2">After the occurrence of an Event of Default, the
Company or the Trustee shall promptly notify the holders of each
series of Designated Senior Indebtedness (or their respective
Representative) of such occurrence. If any Designated Senior
Indebtedness is outstanding, the Company may not make any
payments then due on the Notes until five Business Days after
the holders or the Representative of such Designated Senior
Indebtedness receive notice of such occurrence and, thereafter,
may pay the Notes only if the subordination provisions of the
Indenture otherwise permit payment at that time.
</FONT>

<P align="left">
<FONT size="2">By reason of the subordination provisions
contained in the Indenture, in the event of insolvency,
creditors of the Company who are holders of Senior Indebtedness
may recover more, ratably, than the Noteholders.
</FONT>

<P align="left">
<FONT size="2">The Indenture will contain identical
subordination provisions relating to each Guarantor&#146;s
obligations under its Guarantee.
</FONT>

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

<P align="left">
<FONT size="2">Each of the Company&#146;s direct and indirect
Wholly Owned Restricted Subsidiaries organized under the laws of
any state of the United States of America on the Issue Date and
certain future Subsidiaries of the Company (as described below),
as primary obligors and not merely as sureties, will jointly and
severally irrevocably and unconditionally guarantee on an
unsecured senior subordinated basis (as described under
&#147;&#151;Ranking&#148; above) the performance and punctual
payment when due, whether at Stated Maturity, by acceleration or
otherwise, of all obligations of the Company under the Indenture
and the Notes, whether for payment of principal of, premium, if
any, or interest on the Notes, expenses, indemnification or
otherwise (all such obligations guaranteed by such Guarantors
being herein called the &#147;Guaranteed Obligations&#148;).
Such Guarantors will agree to pay, in addition to the amount
stated above, any and all expenses (including reasonable counsel
fees and expenses) Incurred by the Trustee or the Holders in
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">enforcing any rights under the Guarantees. Each
Guarantee will be limited in amount to an amount not to exceed
the maximum amount that can be guaranteed by the applicable
Guarantor after giving effect to all of its other contingent and
fixed liabilities (including without limitation all of its
obligations under or with respect to the Credit Agreement)
without rendering the Guarantee, as it relates to such
Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally. After the Issue Date, the Company
will cause each Restricted Subsidiary organized under the laws
of the United States of America or any state or territory
thereof that has Total Assets of more than $500,000 to execute
and deliver to the Trustee a supplemental indenture pursuant to
which such Restricted Subsidiary will guarantee, payment of the
Notes on an unsecured senior subordinated basis. See
&#147;Certain Covenants&#151; Future Guarantors&#148; below.
</FONT>
</DIV>

<P align="left">
<FONT size="2">Each Guarantee is a continuing guarantee and
shall, until released in accordance with the next succeeding
paragraph, (i)&nbsp;remain in full force and effect until
payment in full of all the Guaranteed Obligations, (ii)&nbsp;be
binding upon each such Guarantor and its successors, and
(iii)&nbsp;inure to the benefit of and be enforceable by the
Trustee, the Holders and their successors, transferees and
assigns.
</FONT>

<P align="left">
<FONT size="2">The Guarantee of a Guarantor will be released
(i)&nbsp;in connection with any transaction permitted by the
Indenture after which the Guarantor ceases to be a Restricted
Subsidiary of the Company; provided that the sale or other
disposition, if any, complies with the &#147;Asset Sale&#148;
provisions of the Indenture; or (ii)&nbsp;upon satisfaction and
discharge or defeasance of the Notes as provided below under
&#147;Defeasance&#148; and &#147;Satisfaction and
Discharge.&#148;
</FONT>

<P align="left">
<B><FONT size="2">Change of Control</FONT></B>

<P align="left">
<FONT size="2">Upon the occurrence of any of the following
events (each, a &#147;Change of Control&#148;), each Holder will
have the right to require the Company to repurchase all or any
part of such Holder&#146;s Notes of any series at a purchase
price in cash equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, to but not including
the date of repurchase (subject to the right of Holders of
record on the relevant record date to receive interest due on
the relevant interest payment date): (i)&nbsp;the sale, lease or
transfer, in one or a series of related transactions, of all or
substantially all of the Company&#146;s assets to any person or
group (as such term is used in Section&nbsp;13(d)(3) of the
Exchange Act) other than the Permitted Holders, (ii)&nbsp;the
adoption of a plan relating to the liquidation or dissolution of
the Company, (iii)&nbsp;the acquisition by any person or group
(as such term is used in Section&nbsp;13(d)(3) of the Exchange
Act) other than the Permitted Holders of a beneficial ownership
of more than 50% of the voting power of the voting stock of the
Company, by way of purchase, merger or consolidation or
otherwise (other than a creation of a holding company that does
not involve a change in the beneficial ownership of the Company
as a result of such transaction), (iv)&nbsp;the merger or
consolidation of the Company with or into another Person or the
merger of another Person into the Company with the effect that
immediately after such transaction the stockholders of the
Company immediately prior to such transaction hold, directly or
indirectly, less than 50% of the total voting power of all
securities generally entitled to vote in the election of
directors, managers, or trustees of the Person surviving such
merger or consolidation, in each case other than creation of a
holding company that does not involve a change in the beneficial
ownership of the Company as a result of such transaction or
(v)&nbsp;the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors.
In order to exercise this repurchase right, a Holder must
separate its IDSs into the shares of Class&nbsp;A common stock
and Notes represented thereby.
</FONT>

<P align="left">
<FONT size="2">In the event that at the time of such Change of
Control the terms of any Senior Lender Indebtedness restrict or
prohibit the repurchase of Notes pursuant to this covenant, then
prior to the mailing of the notice to Holders provided for in
the immediately following paragraph but in any event within
30&nbsp;days following any Change of Control, the Company shall
(i)&nbsp;repay in full all Senior Lender Indebtedness or offer
to repay in full all Senior Lender Indebtedness and repay the
Senior Lender Indebtedness of each lender who has accepted such
offer or (ii)&nbsp;obtain the requisite consent under the
agreements governing the Senior Lender Indebtedness to permit
the repurchase of the Notes as provided for in the immediately
following paragraph.
</FONT>

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<P align="left">
<FONT size="2">Within 30&nbsp;days following any Change of
Control, unless the Company has exercised its right to redeem
the Notes as described under &#147;&#151;Optional
Redemption,&#148; the Company shall mail a notice (a
&#147;Change of Control Offer&#148;) to each Holder with a copy
to the Trustee stating: (1)&nbsp;that a Change of Control has
occurred and that such Holder has the right to require the
Company to purchase such Holder&#146;s Notes at a purchase price
in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest, if any, to but not including the
date of repurchase (subject to the right of Holders of record on
a record date to receive interest on the relevant interest
payment date); (2)&nbsp;the circumstances and relevant facts and
financial information regarding such Change of Control;
(3)&nbsp;whether the agreements then governing the Senior Lender
Indebtedness will permit the repurchase of the Notes;
(4)&nbsp;the repurchase date (which shall be no earlier than
30&nbsp;days nor later than 60&nbsp;days from the date such
notice is mailed); and (5)&nbsp;the instructions determined by
the Company, consistent with this covenant, that a Holder must
follow in order to have its Notes purchased.
</FONT>

<P align="left">
<FONT size="2">The Company will not be required to make a Change
of Control Offer upon a Change of Control if a third party makes
the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements 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">
<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 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 the Indenture by virtue thereof.
</FONT>

<P align="left">
<FONT size="2">The definition of Change of Control includes a
phrase relating to the sale, lease or transfer of &#147;all or
substantially all&#148; the assets of the Company and its
Subsidiaries taken as a whole. Although there is a developing
body of case law interpreting the phrase &#147;substantially
all,&#148; there is no precise established definition of the
phrase under applicable law. Accordingly, the ability of a
Holder of Notes to require the Company to repurchase such Notes
as a result of a sale, lease or transfer of less than all of the
assets of the Company and its Subsidiaries taken as a whole to
another Person or group may be uncertain.
</FONT>

<P align="left">
<B><FONT size="2">Covenants Relating to IDSs</FONT></B>

<P align="left">
<I><FONT size="2">Recombination of Notes and Class&nbsp;A 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, recombine 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 senior
subordinated notes for 90&nbsp;days, or the redemption or
maturity of any senior subordinated notes.
</FONT>

<P align="left">
<I><FONT size="2">Procedures Relating to Subsequent
Issuance.</FONT></I><FONT size="2"> The Indenture will provide
that, in the event there is a subsequent issuance of Additional
Notes, each Holder of the Notes or the IDSs (as the case may be)
agrees that a portion of such Holder&#146;s Notes (whether held
directly in book-entry form or held as part of IDSs) will be
exchanged, without any further action of such Holder, for a
portion of the Additional Notes purchased by the Holders of such
Additional Notes, such that, following any such additional
issuance and exchange, each Holder of the Notes or the IDSs (as
the case may be) owns an indivisible unit composed of the Notes
and Additional Notes of each issuance in the same proportion as
each other Holder, and the records of DTC and the Trustee will
be revised to reflect each such exchange without any further
action of such 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
United States Federal Income Tax Consequences-Consequences to
United States Holders&#151; Senior Subordinated Notes&#151;
Additional Issuances.&#148; 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&#151; Risks Relating to the IDSs,&#148;
the Shares of Class A Common Stock and Senior Subordinated Notes
Represented by the IDSs, the Senior Subordinated Notes Offered
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">Separately (not in the Form of IDSs), and our New
Credit Facility. Subsequent issuances of senior subordinated
notes may cause you to recognize taxable gain and/or original
issue discount and may reduce your recovery in the event of
bankruptcy.&#148; Any such automatic exchange should not impair
the rights any holder would otherwise have to assert a claim
against us or the underwriters, with respect to the full amount
of Notes purchased by such holder.
</FONT>
</DIV>

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

<P align="left">
<FONT size="2">The Indenture will contain the following material
covenants:
</FONT>

<P align="left">
<I><FONT size="2">Limitations on Incurrence of Indebtedness and
Issuance of Disqualified Stock and Preferred
Stock.</FONT></I><FONT size="2"> The Indenture will provide that
(i)&nbsp;the Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly,&nbsp;Incur
any Indebtedness (including Acquired Indebtedness) or issue any
shares of Disqualified Stock and (ii)&nbsp;the Company will not
permit any of its Restricted Subsidiaries to issue any shares of
Preferred Stock; provided, however, that the Company and any
Restricted Subsidiary may Incur Indebtedness (including Acquired
Indebtedness) or issue shares of Disqualified Stock and any
Guarantor may issue shares of Preferred Stock if the Fixed
Charge Coverage Ratio of the Company for the most recently ended
four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which
such additional Indebtedness is Incurred or such Disqualified
Stock or Preferred Stock is issued would have been greater
than &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to 1.00
determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional
Indebtedness had been Incurred, or the Disqualified Stock or
Preferred Stock had been issued, as the case may be, and the
application of proceeds therefrom had occurred at the beginning
of such four-quarter period.
</FONT>

<P align="left">
<FONT size="2">The foregoing limitations will not apply to:
</FONT>
<P>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Incurrence
    by the Company or its Restricted Subsidiaries of Indebtedness
    under the Credit Facilities and the issuance and creation of
    letters of credit and bankers&#146; acceptances thereunder (with
    letters of credit and bankers&#146; acceptances being deemed to
    have a principal amount equal to the face amount thereof) up to
    an aggregate principal amount of the greater of the Borrowing
    Base or
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    then classified as having been Incurred pursuant to this
    clause&nbsp;(a) outstanding at any one time;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Incurrence
    by the Company and the Guarantors of Indebtedness represented by
    the Notes (not including any Additional Notes) and the
    Guarantees, as applicable;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness
    existing on the Issue Date (other than Indebtedness described in
    clauses&nbsp;(a) and (b));
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness
    (including Capitalized Lease Obligations) Incurred by the
    Company or any of its Restricted Subsidiaries to finance the
    purchase, lease 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) in an aggregate
    principal amount which, when aggregated with the principal
    amount of all other Indebtedness then outstanding and Incurred
    pursuant to this clause&nbsp;(d) and all Refinancing
    Indebtedness (as defined below) Incurred to refund, refinance or
    replace any Indebtedness classified as having been Incurred
    pursuant to this clause&nbsp;(d), does not exceed the greater
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
    of Total Assets at the time of Incurrence or
    $&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">
    <FONT size="2">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness
    Incurred by the Company or any of its Restricted Subsidiaries
    constituting reimbursement obligations with respect to letters
    of credit issued in the ordinary course of business, including
    without limitation letters of credit in respect of workers&#146;
    compensation claims, health, disability or other employee
    benefits or property, casualty or liability insurance or
    self-insurance, or with respect to agreements to provide
    services, or other Indebtedness with respect to reimbursement
    type obligations regarding workers&#146; compensation claims;
    provided, however, that upon the drawing of such letters of
    credit, such obligations are reimbursed within 30&nbsp;days
    following such drawing;
    </FONT></TD>
</TR>

</TABLE>

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</FONT>

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<P>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness
    arising from agreements of the Company or a Restricted
    Subsidiary providing for indemnification, adjustment of purchase
    price or similar obligations, in each case,&nbsp;Incurred in
    connection with the acquisition or disposition of any business,
    assets or a Subsidiary of the Company in accordance with the
    terms of the Indenture, other than guarantees of Indebtedness
    Incurred by any Person acquiring all or any portion of such
    business, assets or Subsidiary for the purpose of financing such
    acquisition;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness of
    the Company to a Restricted Subsidiary of the Company; provided
    that any such Indebtedness is subordinated in right of payment
    to the Notes; provided further that any subsequent issuance or
    transfer of any Capital Stock or any other event which results
    in any such Restricted Subsidiary ceasing to be a Restricted
    Subsidiary of the Company or any other subsequent transfer of
    any such Indebtedness (except to the Company or another
    Restricted Subsidiary) shall be deemed, in each case, to be an
    Incurrence of such Indebtedness;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of
    Preferred Stock of a Restricted Subsidiary issued to the Company
    or another Restricted Subsidiary of the Company; provided that
    any subsequent issuance or transfer of any Capital Stock or any
    other event which results in any such Restricted Subsidiary
    ceasing to be a Restricted Subsidiary or any other subsequent
    transfer of any such shares of Preferred Stock (except to the
    Company or another Restricted Subsidiary of the Company) shall
    be deemed, in each case, to be an issuance of shares of
    Preferred Stock;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness of
    a Restricted Subsidiary to the Company or another Restricted
    Subsidiary of the Company; provided that (i)&nbsp;any such
    Indebtedness is made pursuant to an intercompany note and
    (ii)&nbsp;if a Guarantor Incurs such Indebtedness to a
    Restricted Subsidiary that is not a Guarantor such Indebtedness
    is subordinated in right of payment to the Guarantee of such
    Guarantor; provided further that any subsequent issuance or
    transfer of any Capital Stock or any other event which results
    in any Restricted Subsidiary lending such Indebtedness ceasing
    to be a Restricted Subsidiary or any other subsequent transfer
    of any such Indebtedness (except to the Company or another
    Restricted Subsidiary of the Company) shall be deemed, in each
    case, to be an Incurrence of such Indebtedness;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hedging
    Obligations that are incurred not for speculative purposes
    (1)&nbsp;for the purpose of fixing or hedging interest rate risk
    with respect to any Indebtedness that is permitted by the terms
    of the Indenture to be outstanding, (2)&nbsp;for the purpose of
    fixing or hedging currency exchange rate risk with respect to
    any currency exchanges or (3)&nbsp;for the purpose of fixing or
    hedging commodity price risk with respect to any commodity
    purchases;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;obligations in
    respect of performance, bid and surety bonds 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">
    <FONT size="2">(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness or
    Disqualified Stock of the Company and any Restricted Subsidiary
    and Preferred Stock of any Restricted Subsidiary not otherwise
    permitted hereunder in an aggregate principal amount, which when
    aggregated with the principal amount or liquidation preference
    of all other Indebtedness and Disqualified Stock then
    outstanding and classified as having been Incurred pursuant to
    this clause&nbsp;(1), does not exceed
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    at any one time outstanding; provided, however, that
    Indebtedness of Foreign Subsidiaries, which when aggregated with
    the principal amount of all other Indebtedness of Foreign
    Subsidiaries then outstanding and classified as having been
    Incurred pursuant to this clause&nbsp;(1), does not exceed
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    (or the equivalent thereof in any other currency) at any one
    time outstanding (it being understood that any Indebtedness
    Incurred under this clause&nbsp;(1) shall cease to be deemed
    Incurred or outstanding for purposes of this clause&nbsp;(1) but
    shall be deemed to be Incurred for purposes of the first
    paragraph of this covenant from and after the first date on
    which the Company could have Incurred such Indebtedness under
    the first paragraph of this covenant without reliance upon this
    clause&nbsp;(1));
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any guarantee by
    the Company or a Restricted Subsidiary of Indebtedness or other
    obligations of the Company or any of its Restricted Subsidiaries
    so long as the Incurrence of such Indebtedness Incurred by the
    Company or such Restricted Subsidiary is permitted under the
    terms of the
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">109
</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">Indenture; provided that if such Indebtedness is
    by its express terms subordinated in right of payment to the
    Notes or the Guarantee of such Restricted Subsidiary, as
    applicable, any such guarantee of any Guarantor with respect to
    such Indebtedness shall be subordinated in right of payment to
    such Guarantor&#146;s Guarantee with respect to the Notes
    substantially to the same extent as such Indebtedness is
    subordinated to the Notes or the Guarantee of such Restricted
    Subsidiary, as applicable;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Incurrence
    by the Company or any of its Restricted Subsidiaries of
    Indebtedness which serves to refund or refinance any
    Indebtedness Incurred as permitted under the first paragraph of
    this covenant and clauses&nbsp;(b) and (c)&nbsp;above, or any
    Indebtedness issued to so refund or refinance such Indebtedness
    (subject to the following proviso, &#147;Refinancing
    Indebtedness&#148;) prior to its respective maturity; provided,
    however, that such Refinancing Indebtedness:
    </FONT></TD>
</TR>

</TABLE>
<P>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;has a Weighted
    Average Life to Maturity at the time such Refinancing
    Indebtedness is Incurred which is not less than the remaining
    Weighted Average Life to Maturity of the Indebtedness being
    refunded or refinanced;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;has a Stated
    Maturity which is no earlier than the Stated Maturity of the
    Indebtedness being refunded or refinanced;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to the extent
    such Refinancing Indebtedness refinances Indebtedness <I>pari
    passu</I> with the Notes or the Guarantees, is <I>pari passu</I>
    with the Notes or the Guarantees, as applicable;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;is Incurred in
    an aggregate principal amount (or if issued with original issue
    discount, an aggregate issue price) that is equal to or less
    than the aggregate principal amount (or if issued with original
    issue discount, the aggregate accreted value) then outstanding
    of the Indebtedness being refinanced plus premium and fees
    Incurred in connection with such refinancing;&nbsp;and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shall not
    include Indebtedness of a Restricted Subsidiary that is not a
    Guarantor that refinances Indebtedness of the Company;
    </FONT></TD>
</TR>

</TABLE>
<P>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">and provided further that subclauses&nbsp;(i),
    (ii), (iii), and (v)&nbsp;of this clause&nbsp;(n) will not apply
    to any refunding or refinancing of any Senior Indebtedness;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness or
    Disqualified Stock or Preferred Stock of Persons that are
    acquired by the Company or any of its Restricted Subsidiaries or
    merged into a Restricted Subsidiary in accordance with the terms
    of the Indenture; provided, however, that such Indebtedness,
    Disqualified Stock or Preferred Stock is not Incurred in
    contemplation of such acquisition or merger or to provide all or
    a portion of the funds or credit support required to consummate
    such acquisition or merger; provided further, however, that
    after giving effect to such acquisition and the Incurrence of
    such Indebtedness, Disqualified Stock or Preferred Stock either
    (i)&nbsp;the Company would be permitted to Incur at least $1.00
    of additional Indebtedness pursuant to the Fixed Charge Coverage
    Ratio test set forth in the first sentence of this covenant or
    (ii)&nbsp;the Fixed Charge Coverage Ratio would be greater than
    immediately prior to such acquisition;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contribution
    Indebtedness;&nbsp;and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness
    represented by the issuance of Additional Notes in connection
    with the issuance of shares of Class&nbsp;A 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>

</TABLE>

<P align="left">
<FONT size="2">For purposes of determining compliance with this
covenant, in the event that an item of Indebtedness meets the
criteria of more than one of the categories of permitted
Indebtedness described in clauses&nbsp;(a) through
(q)&nbsp;above or is entitled to be Incurred pursuant to the
first paragraph of this covenant, the Company shall, in its sole
discretion, classify or reclassify such item of Indebtedness in
any manner that complies with this covenant and such item of
Indebtedness will be treated as having been Incurred
</FONT>

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<DIV align="left">
<FONT size="2">pursuant to only one of such clauses or pursuant
to the first paragraph hereof. In addition, the Company may, at
any time, change the classification of an item of Indebtedness
(or any portion thereof) to any other clause or to the first
paragraph hereof; provided that the Company or Restricted
Subsidiary would be permitted to incur such item of Indebtedness
(or portion thereof) pursuant to such other clause or the first
paragraph hereof, as the case may be, at such time of
reclassification. Accrual of interest, the accretion of accreted
value and the payment of interest in the form of additional
Indebtedness will not be deemed to be an Incurrence of
Indebtedness for purposes of this covenant.
</FONT>
</DIV>

<P align="left">
<I><FONT size="2">Limitation on Restricted
Payments.</FONT></I><FONT size="2"> The Indenture will provide
that the Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly:
</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">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;declare or pay
    any dividend or make any distribution on account of the
    Company&#146;s or any of its Restricted Subsidiaries&#146;
    Equity Interests, including any payment made in connection with
    any merger or consolidation involving the Company (other than
    (A)&nbsp;dividends or distributions by the Company payable in
    Equity Interests (other than Disqualified Stock) of the Company
    or (B)&nbsp;dividends or distributions by a Restricted
    Subsidiary so long as, in the case of any dividend or
    distribution payable on or in respect of any class or series of
    securities issued by a Restricted Subsidiary other than a Wholly
    Owned Restricted Subsidiary, the Company or a Restricted
    Subsidiary receives at least its pro rata share of such dividend
    or distribution in accordance with its Equity Interests in such
    class or series of securities);
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;purchase or
    otherwise acquire or retire for value any Equity Interests 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">
    <FONT size="2">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;make any
    Restricted Investment (all such payments and other actions set
    forth in this clause&nbsp;(iii) and in clauses&nbsp;(i) and
    (ii)&nbsp;above being collectively referred to as
    &#147;Restricted Payments&#148;),
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">unless, at the time of 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">
    <FONT size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;no Default or
    Event of Default shall have occurred and be continuing or would
    occur as a consequence thereof;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;immediately
    after giving effect to such transaction on a pro forma basis,
    the Company could Incur $1.00 of additional Indebtedness under
    the provisions of the first paragraph of &#147;Limitations on
    Incurrence of Indebtedness and Issuance of Disqualified Stock
    and Preferred Stock&#148;;&nbsp;and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;such Restricted
    Payment, together with the aggregate amount of all other
    Restricted Payments made by the Company and its Restricted
    Subsidiaries after the Issue Date (including, without
    duplication, Restricted Payments permitted by clauses&nbsp;(1),
    (6)&nbsp;and (10)&nbsp;of the next succeeding paragraph, but
    excluding all other Restricted Payments permitted by the next
    succeeding paragraph), is less than 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">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
    of the Consolidated Net Income 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 (or, in the case such Consolidated Net Income
    for such period is a deficit, minus 100% of such deficit), plus
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
    of the aggregate net proceeds, including cash and the Fair
    Market Value (as determined in accordance with the next
    succeeding sentence) of property other than cash, received by
    the Company since the Issue Date from the issue or sale of
    Equity Interests of the Company (excluding Refunding Capital
    Stock (as defined below), Designated Preferred Stock, Excluded
    Contributions and Disqualified Stock), including Equity
    Interests issued upon conversion of Indebtedness, Disqualified
    Stock and Designated Preferred Stock or upon exercise of
    warrants or options (other than an issuance or sale to a
    Subsidiary of the Company or an employee stock ownership plan or
    trust established by the Company or any of its Subsidiaries),
    plus
    </FONT></TD>
</TR>

</TABLE>

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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">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
    of the aggregate amount of contributions to the capital of the
    Company received in cash and the Fair Market Value (as
    determined in accordance with the next succeeding sentence) of
    property other than cash since the Issue Date (other than
    Excluded Contributions, Refunding Capital Stock, Designated
    Preferred Stock and Disqualified Stock), plus
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
    of the aggregate amount received in cash and the Fair Market
    Value (as determined in accordance with the next succeeding
    sentence) of property other than cash received from (A)&nbsp;the
    sale or other disposition (other than to the Company or a
    Restricted Subsidiary) of or on account of Restricted
    Investments made by the Company and its Restricted Subsidiaries
    and from repurchases and redemptions of such Restricted
    Investments from the Company and its Restricted Subsidiaries by
    any Person (other than the Company or any of its Subsidiaries)
    and from payments of interest on and repayments of loans or
    advances which constituted Restricted Investments, (B)&nbsp;the
    sale (other than to the Company or a Subsidiary) of the Capital
    Stock of an Unrestricted Subsidiary or (C)&nbsp;a distribution
    or dividend from an Unrestricted Subsidiary, plus
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in the event any
    Unrestricted Subsidiary has been redesignated as a Restricted
    Subsidiary or has been merged, consolidated or amalgamated with
    or into, or transfers or conveys its assets to, or is liquidated
    into, the Company or a Restricted Subsidiary, the Fair Market
    Value (as determined in good faith by the Board of Directors) of
    the Investment of the Company in such Unrestricted Subsidiary at
    the time of such redesignation, combination or transfer (or of
    the assets transferred or conveyed, as applicable), after
    deducting any Indebtedness associated with the Unrestricted
    Subsidiary so designated or combined or any Indebtedness
    associated with the assets so transferred or conveyed.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">The Fair Market Value of property other than cash
covered by clauses&nbsp;(ii), (iii)&nbsp;and (iv)&nbsp;above
shall be determined in good faith by the Company and (A) in the
event of property with a Fair Market Value in excess of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
shall be set forth in an Officers&#146; Certificate or
(B)&nbsp;in the event of property with a Fair Market Value in
excess of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
shall be set forth in a resolution approved by at least a
majority of the Board of Directors.
</FONT>

<P align="left">
<FONT size="2">The foregoing 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">
    <FONT size="2">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the payment of
    any dividend or distribution within 60&nbsp;days after the date
    of declaration thereof, if at the date of declaration such
    payment would have complied with the provisions of the Indenture;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;the
    repurchase, retirement or other acquisition of any Equity
    Interests (&#147;Retired Capital Stock&#148;) of the Company in
    exchange for, or out of the proceeds of the substantially
    concurrent sale of, Equity Interests of the Company or
    contributions to the equity capital of the Company (other than
    any Disqualified Stock or any Equity Interests sold to a
    Subsidiary of the Company or to an employee stock ownership plan
    or any trust established by the Company or any of its
    Subsidiaries) (collectively, including any such contributions,
    &#147;Refunding Capital Stock&#148;) and (b)&nbsp;the
    declaration and payment of accrued dividends on the Retired
    Capital Stock out of the proceeds of the substantially
    concurrent sale (other than to a Subsidiary of the Company or to
    an employee stock ownership plan or any trust established by the
    Company or any of its Subsidiaries) of Refunding Capital Stock;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the declaration
    and payment of dividends or distributions to holders of any
    class or series of Disqualified Stock of the Company or any of
    its Restricted Subsidiaries issued or incurred in accordance
    with the covenant entitled &#147;&#151;Limitation on Incurrence
    of Indebtedness and Issuance of Disqualified Stock and Preferred
    Stock&#148;;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the declaration
    and payment of dividends or distributions to holders of any
    class or series of Designated Preferred Stock issued after the
    Issue Date; provided, however, that (A)&nbsp;for the most
    recently ended four full fiscal quarters for which internal
    financial statements are available immediately preceding the
    date of issuance of such Designated Preferred Stock, after
    giving effect to such issuance (and the payment of dividends or
    distributions) on a pro forma basis, the Company would have had
    a Fixed Charge Coverage Ratio of greater
    than &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to 1.00 and
    (B)&nbsp;the aggregate
    </FONT></TD>
</TR>

</TABLE>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">amount of dividends declared and paid pursuant to
    this clause&nbsp;(4) does not exceed the net cash proceeds
    received by the Company from the sale of Designated Preferred
    Stock issued after the Issue Date;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments in
    Unrestricted Subsidiaries having an aggregate Fair Market Value,
    taken together with all other Investments made pursuant to this
    clause&nbsp;(5) that are at that time outstanding, not to exceed
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    (with the Fair Market Value of each Investment being measured at
    the time made and without giving effect to subsequent changes in
    value);
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(6)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the payment of
    dividends on the shares of the Company&#146;s Capital Stock up
    to an aggregate amount in any fiscal quarter not to exceed the
    Quarterly Base Dividend Level;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(7)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments that
    are made with Excluded Contributions;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(8)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;other Restricted
    Payments in an aggregate amount not to exceed
    $&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">
    <FONT size="2">(9)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;repurchases of
    Equity Interests deemed to occur upon exercise of stock options
    if such Equity Interests represent a portion of the exercise
    price of such options; and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(10)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;other
    Restricted Payments in an aggregate amount not to exceed the
    Base Dividend Restricted Payments Basket;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">provided, however, that at the time of, and after
giving effect to, any Restricted Payment permitted under
clauses&nbsp;(3), (4), (5), (6), (8)&nbsp;and (10), no Default
or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof and provided further that
notwithstanding anything to the contrary, the Company may not
pay any dividends on its Capital Stock during any Interest
Deferral Period or after the end of any Interest Deferral Period
so long as any deferred interest including accrued interest
thereon has not been paid in full.
</FONT>

<P align="left">
<FONT size="2">As of the Issue Date, all of the Company&#146;s
Subsidiaries will be Restricted Subsidiaries other than ALER
2002 and ALERT&nbsp;2002A. The Company will not permit any
Unrestricted Subsidiary to become a Restricted Subsidiary except
pursuant to the definition of &#147;Unrestricted
Subsidiary.&#148; For purposes of designating any Restricted
Subsidiary as an Unrestricted Subsidiary, all outstanding
Investments by the Company and its Restricted Subsidiaries
(except to the extent repaid) in the Subsidiary so designated
will be deemed to be Restricted Payments in an amount determined
as set forth in the last sentence of the definition of
&#147;Investments.&#148; Such designation will only be permitted
if a Restricted Payment in such amount would be permitted at
such time and if such Subsidiary otherwise meets the definition
of an Unrestricted Subsidiary.
</FONT>

<P align="left">
<I><FONT size="2">Anti-Layering.</FONT></I><FONT size="2"> The
Indenture will provide that the Company will not incur, create,
issue, assume, guarantee or otherwise become liable for any
Indebtedness that is contractually subordinate or junior in
right of payment to any Senior Indebtedness of the Company and
senior in right of payment to the Notes. No Guarantor will
incur, create, issue, assume, guarantee or otherwise become
liable for any Indebtedness that is contractually subordinate or
junior in right of payment to the Senior Indebtedness of such
Guarantor and senior in right of payment to such
Guarantor&#146;s Guarantee. This does not apply to distinctions
between categories of Indebtedness that exist by reason of any
Liens or Guarantees securing or in favor of some but not all of
such Indebtedness or securing such Indebtedness with greater or
lesser priority or with different collateral.
</FONT>

<P align="left">
<I><FONT size="2">Dividend and Other Payment Restrictions
Affecting Subsidiaries.</FONT></I><FONT size="2"> The Indenture
will provide that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or consensual restriction on the
ability of any Restricted Subsidiary to:
</FONT>
<P>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;pay
    dividends or make any other distributions to the Company or any
    of its Restricted Subsidiaries (1)&nbsp;on its Capital Stock or
    (2)&nbsp;with respect to any other interest or participation in,
    or measured by, its profits, or (ii)&nbsp;pay any Indebtedness
    owed to the Company or any of its Restricted Subsidiaries;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">113
</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">
    <FONT size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;make loans or
    advances to the Company or any of its Restricted
    Subsidiaries;&nbsp;or
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;sell, lease or
    transfer any of its properties or assets to the Company or any
    of its Restricted Subsidiaries;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">except in each case for such encumbrances or
restrictions existing under or by reason 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">
    <FONT size="2">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;contractual
    encumbrances or restrictions in effect on the Issue Date,
    including pursuant to the Credit Facilities and the other Senior
    Credit Documents;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Indenture
    and the Notes;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;applicable law
    or any applicable rule, regulation or order;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any agreement or
    other instrument relating to Indebtedness of a Person acquired
    by the Company or any Restricted Subsidiary which was in
    existence at the time of such acquisition (but not created in
    contemplation thereof or to provide all or any portion of the
    funds or credit support utilized to consummate such
    acquisition), which encumbrance or restriction is not applicable
    to any Person, or the properties or assets of any Person, other
    than the Person, or the property or assets of the Person, so
    acquired;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any restriction
    with respect to a Restricted Subsidiary imposed pursuant to an
    agreement entered into for the sale or disposition of all or
    substantially all 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">
    <FONT size="2">(6)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Secured
    Indebtedness otherwise permitted to be Incurred pursuant to the
    covenants described under &#147;&#151;Limitations on Incurrence
    of Indebtedness and Issuance of Disqualified Stock and Preferred
    Stock&#148; and &#147;&#151;Liens&#148; that limit the right of
    the debtor to dispose of the assets securing such Indebtedness;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(7)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;restrictions on
    cash or other deposits or net worth imposed by customers under
    contracts entered into in the ordinary course of business;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(8)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;customary
    provisions in joint venture agreements and other similar
    agreements entered into in the ordinary course of business;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(9)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;customary
    provisions contained in leases, agreements to provide services
    and other similar agreements entered into in the ordinary course
    of business that impose restrictions of the type described in
    clause&nbsp;(c) above;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(10)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;other
    Indebtedness of Restricted Subsidiaries permitted to be Incurred
    subsequent to the Issue Date pursuant to clause&nbsp;(1) of the
    second paragraph to the covenant described under
    &#147;Limitations on Incurrence of Indebtedness and Issuance of
    Disqualified Stock and Preferred Stock&#148;;&nbsp;or
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(11)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any
    encumbrances or restrictions of the type referred to in
    clauses&nbsp;(a), (b)&nbsp;and (c)&nbsp;above imposed by any
    amendments, modifications, restatements, renewals, increases,
    supplements, refundings, replacements or refinancings of the
    contracts, instruments or obligations referred to in
    clauses&nbsp;(1) through (10)&nbsp;above; provided that such
    amendments, modifications, restatements, renewals, increases,
    supplements, refundings, replacements or refinancings are, in
    the good faith judgment of the Board of Directors, no more
    restrictive with respect to such dividend and other payment
    restrictions than those contained in the dividend or other
    payment restrictions prior to such amendment, modification,
    restatement, renewal, increase, supplement, refunding,
    replacement or refinancing.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<I><FONT size="2">Asset Sales.</FONT></I><FONT size="2"> The
Indenture will provide that the Company will not, and will not
permit any of its Restricted Subsidiaries to, cause or make an
Asset Sale, unless (x)&nbsp;the Company, or its Restricted
Subsidiaries, as the case may be, receives consideration at the
time of such Asset Sale at least equal to the Fair Market Value
(as determined in good faith by the Company) of the assets sold
or otherwise disposed of and (y)&nbsp;except in the case of a
Permitted Asset Swap, at least 75% of the consideration therefor
</FONT>

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<DIV align="left">
<FONT size="2">received by the Company, or such Restricted
Subsidiary, as the case may be, is in the form of Cash
Equivalents; provided that the amount of:
</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">
    <FONT size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any liabilities
    (as shown on the Company&#146;s or such Restricted
    Subsidiary&#146;s most recent balance sheet or in the notes
    thereto) of the Company or any Restricted Subsidiary (other than
    liabilities that are by their terms subordinated to the Notes)
    that are assumed by the transferee of any such assets;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any notes or
    other obligations or other securities received by the Company or
    such Restricted Subsidiary from such transferee that are
    converted by the Company or such Restricted Subsidiary into Cash
    Equivalents within 180&nbsp;days of the receipt thereof (to the
    extent of the Cash Equivalents received);&nbsp;and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any Designated
    Noncash Consideration received by the Company or any of its
    Restricted Subsidiaries in such Asset Sale having an aggregate
    Fair Market Value, taken together with all other Designated
    Noncash Consideration received pursuant to this clause&nbsp;(c)
    that is at that time outstanding, not to exceed the greater
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of Total Assets or
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    (with the Fair Market Value of each item of Designated Noncash
    Consideration being measured at the time received and without
    giving effect to subsequent changes in value)
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">shall be deemed to be Cash Equivalents for the
purposes of this provision.
</FONT>

<P align="left">
<FONT size="2">Within 365&nbsp;days after the Company&#146;s or
any Restricted Subsidiary&#146;s receipt of the Net Proceeds of
any Asset Sale, the Company or such Restricted Subsidiary may
apply the Net Proceeds from such Asset Sale, at its option:
</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">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to repay
    Obligations under the Credit Facilities or other Senior
    Indebtedness or Pari Passu Indebtedness (provided that if the
    Company shall so reduce Obligations under Pari Passu
    Indebtedness, it will equally and ratably reduce Obligations
    under the Notes by making an offer (in accordance with the
    procedures set forth below for an Asset Sale Offer) to all
    Holders to purchase at a purchase price equal to 100% of the
    principal amount thereof, plus accrued and unpaid interest, if
    any, the pro rata principal amount of Notes) or Indebtedness of
    a Restricted Subsidiary, in each case other than Indebtedness
    owed to the Company or a Restricted Subsidiary;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to an
    investment in any one or more businesses, capital expenditures
    or acquisitions of other assets in each case used or useful in a
    Similar Business; and/or
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to make an
    investment in properties or assets that replace the properties
    and assets that are the subject of such Asset Sale.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Pending the application of any such Net Proceeds,
the Company or such Restricted Subsidiary may temporarily reduce
Indebtedness under a revolving credit facility, if any, or
otherwise invest such Net Proceeds in Cash Equivalents or
Investment Grade Securities. The Indenture will provide that any
Net Proceeds from any Asset Sale that are not applied as
provided and within the time period set forth in the first
sentence of this paragraph will be deemed to constitute
&#147;Excess Proceeds.&#148; When the aggregate amount of Excess
Proceeds exceeds
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
the Company shall make an offer to all Holders of Notes (an
&#147;Asset Sale Offer&#148;) to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds
at an offer price in cash in an amount equal to 100% of the
principal amount thereof, plus accrued and unpaid interest, if
any, to but not including the date fixed for the closing of such
offer, in accordance with the procedures set forth in the
Indenture. The Company will commence an Asset Sale Offer with
respect to Excess Proceeds within thirty Business Days after the
date that Excess Proceeds exceed
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
by mailing the notice required pursuant to the terms of the
Indenture, with a copy to the Trustee. To the extent that the
aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company may use any
remaining Excess Proceeds for general corporate purposes. If the
aggregate principal amount of Notes surrendered by Holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall
select the Notes to be purchased in the manner described below.
Upon completion of any such Asset Sale Offer, the amount of
Excess Proceeds shall be reset at zero.
</FONT>

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<P align="left">
<FONT size="2">The Company will comply with the requirements of
Rule&nbsp;14e-1 under the Exchange Act and any other securities
laws and regulations to the extent such laws or regulations are
applicable in connection with the repurchase of the Notes
pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with
the provisions of the Indenture, the Company will comply with
the applicable securities laws and regulations and shall not be
deemed to have breached its obligations described in the
Indenture by virtue thereof.
</FONT>

<P align="left">
<FONT size="2">If more Notes are tendered pursuant to an Asset
Sale Offer than the Company is required to purchase, selection
of such Notes for purchase will be made by the Trustee in
compliance with the requirements of the principal national
securities exchange, if any, on which such Notes are listed, or
if such Notes are not so listed, on a pro rata basis, by lot or
by such other method as the Trustee shall deem fair and
appropriate (and in such manner as complies with applicable
legal requirements).
</FONT>

<P align="left">
<FONT size="2">Notices of an Asset Sale Offer shall be mailed by
first class mail, postage prepaid, at least 30 but not more than
60&nbsp;days before the purchase date to each Holder of Notes at
such Holder&#146;s registered address. If any Note is to be
purchased in part only, any notice of purchase that relates to
such Note shall state the portion of the principal amount
thereof that has been or is to be purchased.
</FONT>

<P align="left">
<FONT size="2">A new Note in principal amount equal to the
unpurchased portion of any Note purchased in part will be issued
in the name of the Holder thereof upon cancellation of the
original Note. On and after the purchase date unless the Company
defaults in payment of the purchase price, interest shall cease
to accrue on Notes or portions thereof purchased.
</FONT>

<P align="left">
<I><FONT size="2">Transactions with
Affiliates.</FONT></I><FONT size="2"> The Indenture will provide
that the Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, make any
payment to, or sell, lease, transfer or otherwise dispose of any
of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction or
series of transactions, contract, agreement, understanding,
loan, advance or guarantee with, or for the benefit of, any
Affiliate of the Company (each of the foregoing, an
&#147;Affiliate Transaction&#148;) involving aggregate
consideration in excess of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
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">
    <FONT size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;such Affiliate
    Transaction is on terms that are not materially less favorable
    to the Company or the relevant Restricted Subsidiary than those
    that could have been obtained in a comparable transaction by the
    Company or such Restricted Subsidiary with an unrelated
    Person;&nbsp;and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;with respect to
    any Affiliate Transaction or series of related Affiliate
    Transactions involving aggregate consideration in excess of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
    the Company delivers to the Trustee a resolution adopted by the
    majority of the Board of Directors of the Company, approving
    such Affiliate Transaction and set forth in an Officers&#146;
    Certificate certifying that such Affiliate Transaction complies
    with clause&nbsp;(a) above.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">The foregoing provisions will not apply to 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">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;transactions
    between or among the Company and/or any of its Restricted
    Subsidiaries;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Permitted
    Investments and Restricted Payments permitted by the provisions
    of the Indenture described above under the covenant
    &#147;&#151;Limitation on Restricted Payments&#148;;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the payment of
    reasonable and customary fees paid to, and indemnity provided on
    behalf of, officers, directors, employees or consultants of the
    Company or any Restricted Subsidiary;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;transactions in
    which the Company or any of its Restricted Subsidiaries, as the
    case may be, delivers to the Trustee a letter from an
    Independent Financial Advisor stating that such transaction is
    fair to the Company or such Restricted Subsidiary from a
    financial point of view or meets the requirements of
    clause&nbsp;(a) of the preceding paragraph;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;payments or
    loans to employees or consultants in the ordinary course of
    business which are approved by a majority of the Board of
    Directors of the Company (or a committee thereof) in good faith;
    </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">
    <FONT size="2">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any agreement
    as in effect as of the Issue Date or any amendment thereto (so
    long as any such amendment is not disadvantageous to the holders
    of the Notes in any material respect) or any transaction
    contemplated thereby;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the existence
    of, or the performance by the Company or any of its Restricted
    Subsidiaries of its obligations under the terms of, any
    stockholders agreement (including any registration rights
    agreement or purchase agreement related thereto) to which it is
    a party as of the Issue Date and any similar agreements which it
    may enter into thereafter, provided, however, that the existence
    of, or the performance by the Company or any of its Restricted
    Subsidiaries of its obligations under any future amendment to
    any such existing agreement or under any similar agreement
    entered into after the Issue Date shall only be permitted by
    this clause&nbsp;(vii) to the extent that the terms of any such
    amendment or new agreement are not otherwise disadvantageous to
    the Holders of the Notes in any material respect;&nbsp;and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(viii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;transactions
    with customers, clients, suppliers or purchasers or sellers of
    goods or services, in each case in the ordinary course of
    business and otherwise in compliance with the terms of the
    Indenture, which are fair to the Company and its Restricted
    Subsidiaries in the reasonable determination of the Board of
    Directors or the senior management of the Company, or are on
    terms at least as favorable as might reasonably have been
    obtained at such time from an unaffiliated party.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<I><FONT size="2">Liens.</FONT></I><FONT size="2"> The Indenture
will provide that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly,
create,&nbsp;Incur or suffer to exist any Lien on any asset or
property of the Company or such Restricted Subsidiary, or any
income or profits therefrom, or assign or convey any right to
receive income therefrom, that secures any Indebtedness of the
Company or any of its Subsidiaries (other than Senior
Indebtedness) unless the Notes are equally and ratably secured
with (or on a senior basis to, in the case of Indebtedness
subordinated in right of payment to the Notes) the Indebtedness
so secured or until such time as such Indebtedness is no longer
secured by a Lien. The preceding sentence will not require the
Company or any Restricted Subsidiary to secure the Notes if the
Lien consists of a Permitted Lien.
</FONT>

<P align="left">
<FONT size="2">The Indenture will provide that no Guarantor will
directly or indirectly create,&nbsp;Incur or suffer to exist any
Lien on any asset or property of such Guarantor or any income or
profits therefrom, or assign or convey any right to receive
income therefrom, that secures any Indebtedness of such
Guarantor (other than Senior Indebtedness of such Guarantor)
unless the Guarantee of such Guarantor is equally and ratably
secured with (or on a senior basis to, in the case of
Indebtedness subordinated on right of payment to such
Guarantor&#146;s Guarantee) the Indebtedness so secured or until
such time as such Indebtedness is no longer secured by a Lien.
The preceding sentence will not require any Guarantor to secure
its Guarantee if the Lien consists of a Permitted Lien.
</FONT>

<P align="left">
<I><FONT size="2">Reports and Other
Information.</FONT></I><FONT size="2"> The Indenture will
provide that notwithstanding that the Company may not be subject
to the reporting requirements of Section&nbsp;13 or 15(d) of the
Exchange Act or otherwise report on an annual and quarterly
basis on forms provided for such annual and quarterly reporting
pursuant to rules and regulations promulgated by the Commission,
the Company will file with the Commission, documents and reports
that are specified in Sections&nbsp;13 and 15(d) of the Exchange
Act within the time periods specified therein; provided,
however, the Company shall not be so obligated to file such
documents and other reports with the Commission if the
Commission does not permit such filing, in which event the
Company will make available such information to prospective
purchasers of Notes, in addition to providing such information
to the Trustee and the Holders, in each case within 15&nbsp;days
after the time the Company would be required to file such
information with the Commission if it were subject to
Section&nbsp;13 or 15(d) of the Exchange Act.
</FONT>

<P align="left">
<I><FONT size="2">Future Guarantors.</FONT></I><FONT size="2">
The Indenture will provide that the Company will cause each
Restricted Subsidiary organized under the laws of the United
States of America or any state or territory thereof that has
Total Assets of more than $500,000 to execute and deliver to the
Trustee a supplemental indenture pursuant to which such
Subsidiary will guarantee payment of the Notes. Each Guarantee
will be limited to an amount not to exceed the maximum amount
that can be guaranteed by that Subsidiary without rendering the
</FONT>

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<DIV align="left">
<FONT size="2">Guarantee, as it relates to such Subsidiary,
voidable under applicable law relating to fraudulent conveyance
or fraudulent transfer or similar laws affecting the rights of
creditors generally.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Merger, Consolidation, or Sale of All or
Substantially All Assets</FONT></B>

<P align="left">
<FONT size="2">The Indenture will provide that the Company may
not consolidate or merge with or into or wind up into (whether
or not the Company is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more
related transactions, to any Person unless (i)&nbsp;the Company
is the surviving corporation or the Person formed by or
surviving any such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer, lease,
conveyance or other disposition will have been made is a
corporation, partnership or limited liability company organized
or existing under the laws of the United States, any state
thereof, the District of Columbia, or any territory thereof (the
Company or such Person, as the case may be, being herein called
the &#147;Successor Company&#148;); (ii)&nbsp;the Successor
Company (if other than the Company) expressly assumes all the
obligations of the Company under the Indenture and the Notes
pursuant to a supplemental indenture or other documents or
instruments in form reasonably satisfactory to the Trustee;
(iii)&nbsp;immediately after giving effect to such transaction
(and treating any Indebtedness which becomes an obligation of
the Successor Company or any of its Restricted Subsidiaries as a
result of such transaction as having been Incurred by the
Successor Company or such Restricted Subsidiary at the time of
such transaction) no Default or Event of Default shall have
occurred and be continuing; (iv)&nbsp;immediately after giving
pro forma effect to such transaction, as if such transaction had
occurred at the beginning of the applicable four-quarter period,
either (A)&nbsp;the Successor Company would be permitted to
Incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first sentence
of the covenant described under &#147;&#151;Limitations on
Incurrence of Indebtedness and Issuance of Disqualified Stock
and Preferred Stock&#148; or (B)&nbsp;the Fixed Charge Coverage
Ratio for the Successor Company and its Restricted Subsidiaries
would be greater than or equal to such ratio for the Company and
its Restricted Subsidiaries immediately prior to such
transaction; (v)&nbsp;each Guarantor, unless it is the other
party to the transactions described above, shall have by
supplemental indenture confirmed that its Guarantee shall apply
to the Successor Company&#146;s obligations under the Indenture
and the Notes; and (vi)&nbsp;the Company shall have delivered to
the Trustee an Officers&#146; Certificate and an Opinion of
Counsel, each slating that such consolidation, merger or
transfer and such supplemental indenture (if any) comply with
the Indenture. The Successor Company will succeed to, and be
substituted for, the Company under the Indenture and the Notes.
Notwithstanding the foregoing clauses&nbsp;(iii) and (iv),
(a)&nbsp;any Restricted Subsidiary may consolidate with, merge
into or transfer all or part of its properties and assets to the
Company or to another Restricted Subsidiary and (b)&nbsp;the
Company may merge with an Affiliate incorporated solely for the
purpose of reincorporating the Company in another state of the
United States or changing the form of organization of the
Company to a corporation, partnership or limited liability
company so long as the amount of Indebtedness of the Company and
its Restricted Subsidiaries is not increased thereby.
</FONT>

<P align="left">
<FONT size="2">The Indenture will further provide that, subject
to certain limitations described in the Indenture governing
release of a Guarantee upon the sale or disposition of a
Guarantor, each Guarantor will not, and the Company will not
permit a Guarantor to, consolidate or merge with or into or wind
up into (whether or not such Guarantor is the surviving
corporation), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties
or assets in one or more related transactions to, any Person
unless (i)&nbsp;such Guarantor is the surviving corporation or
the Person formed by or surviving any such consolidation or
merger (if other than such Guarantor) or to which such sale,
assignment, transfer, lease, conveyance or other disposition
will have been made is a corporation, partnership or limited
liability company organized or existing under the laws of the
United States, any state thereof, the District of Columbia, or
any territory thereof (such Guarantor or such Person, as the
case may be, being herein called the &#147;Successor
Guarantor&#148;); (ii)&nbsp;the Successor Guarantor (if other
than such Guarantor) expressly assumes all the obligations of
such Guarantor under the Indenture and such Guarantor&#146;s
Guarantee pursuant to a supplemental indenture or other
documents or instruments in form reasonably satisfactory to the
Trustee; (iii)&nbsp;immediately after giving effect to such
transaction (and treating any Indebtedness which
</FONT>

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<DIV align="left">
<FONT size="2">becomes an obligation of the Successor Guarantor
or any of its Subsidiaries as a result of such transaction as
having been Incurred by the Successor Guarantor or such
Subsidiary at the time of such transaction) no Default or Event
of Default shall have occurred and be continuing; and
(iv)&nbsp;the Guarantor shall have delivered or caused to be
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. Subject to certain limitations described in the
Indenture, the Successor Guarantor will succeed to, and be
substituted for, such Guarantor under the Indenture and such
Guarantor&#146;s Guarantee. Notwithstanding the foregoing
clause&nbsp;(iii), a Guarantor may merge with an Affiliate
incorporated solely for the purpose of reincorporating such
Guarantor in another state of the United States or changing the
form of organization of the Guarantor to a corporation,
partnership or limited liability company so long as the amount
of Indebtedness of the Guarantor is not increased thereby.
</FONT>
</DIV>

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

<P align="left">
<FONT size="2">An Event of Default will be defined in the
Indenture as
</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">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a default in any
    payment of interest on any Note when due, whether or not
    prohibited by the provisions described under
    &#147;&#151;Ranking&#148; above, continued for 30&nbsp;days,
    subject to the interest deferral provisions contained in the
    Indenture; provided, however, that a default in any payment of
    interest on the Note required to be made on
    (x) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2009, and (y)&nbsp;any interest payment date
    after &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2009, at a time when interest deferral would be prohibited under
    the Indenture shall immediately constitute an Event of Default
    (without regard to the length of time for which such default
    continues),
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a default in
    the payment of principal or premium, if any, of any Note when
    due at its Stated Maturity, upon optional redemption, upon
    required repurchase, upon declaration or otherwise, whether or
    not such payment is prohibited by the provisions described under
    &#147;&#151;Ranking&#148; above,
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the failure by
    the Company to comply with its obligations under the covenant
    described under &#147;&#151;Merger, Consolidation or Sale of All
    or Substantially All Assets&#148; above,
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the failure by
    the Company to comply for 30&nbsp;days after notice with any of
    its obligations under the covenants described under
    &#147;&#151;Change of Control&#148; above (other than a failure
    to purchase Notes),
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the failure by
    the Company to comply for 60&nbsp;days after notice with its
    other agreements contained in the Notes or the Indenture,
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the failure by
    the Company or any Significant Subsidiary to pay any
    Indebtedness (other than Indebtedness owing to the Company or a
    Restricted Subsidiary) within any applicable grace period after
    final maturity or the acceleration of any such Indebtedness by
    the holders thereof because of a default if the total amount of
    such Indebtedness unpaid or accelerated exceeds
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    or its foreign currency equivalent (the &#147;cross acceleration
    provision&#148;),
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;certain events
    of bankruptcy, insolvency or reorganization of the Company 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">
    <FONT size="2">(viii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the rendering
    of any judgment or decree for the payment of money (other than
    judgments which are covered by enforceable insurance policies
    issued by solvent carriers) in excess of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million or its
    foreign currency equivalent against the Company or a Significant
    Subsidiary if (A)&nbsp;an enforcement proceeding thereon is
    commenced and not discharged or stayed within 60&nbsp;days
    thereafter or (B)&nbsp;such judgment or decree remains
    outstanding for a period of 60&nbsp;days following such judgment
    and is not discharged, waived or stayed (the &#147;judgment
    default provision&#148;),
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(ix)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any Guarantee
    ceases to be in full force and effect, except as contemplated by
    the terms thereof, or any Guarantor denies or disaffirms its
    obligations under the Indenture or any Guarantee and the Default
    continues for 10&nbsp;Business Days, or
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">119
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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">
    <FONT size="2">(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Company pays
    any dividend on shares of the Company&#146;s Capital Stock
    (A)&nbsp;during any interest deferral period or so long as any
    deferred interest and accrued interest thereon has not been paid
    in full, or (B)&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
    clause&nbsp;(c) or clauses&nbsp;(1) through (10) of the
    &#147;Limitation on Restricted Payments&#148; covenant.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">The foregoing will constitute Events of Default
whatever the reason for any such Event of Default and whether it
is voluntary or involuntary or is effected by operation of law
or pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental
body.
</FONT>

<P align="left">
<FONT size="2">However, a default under clauses&nbsp;(iv) or
(v)&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 in
clauses&nbsp;(iv) and (v)&nbsp;hereof after receipt of such
notice.
</FONT>

<P align="left">
<FONT size="2">If an Event of Default (other than a Default
relating to certain events of bankruptcy, insolvency or
reorganization of the Company) occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of
the outstanding Notes by notice to the Company may declare the
principal of, premium, if any, and accrued but unpaid interest
on all the Notes to be due and payable. Upon such a declaration,
such principal, premium and interest will be due and payable
immediately. If an Event of Default relating to certain events
of bankruptcy, insolvency or reorganization of the Company
occurs, the principal of, premium, if any, and interest on all
the Notes will become immediately due and payable without any
declaration or other act on the part of the Trustee or any
Holders. 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">
<FONT size="2">In the event of a declaration of acceleration of
the Notes because an Event of Default has occurred and is
continuing as a result of the acceleration of any Indebtedness
described in the cross acceleration provision, the declaration
of acceleration of the Notes shall be automatically annulled if
the holders of all Indebtedness described in the cross
acceleration provision have rescinded the declaration of
acceleration in respect of such Indebtedness within 30 Business
Days of the date of such declaration, and if the annulment of
the acceleration of the Notes would not conflict with any
judgment or decree of a court of competent jurisdiction, and all
existing Events of Default, except non-payment of principal or
interest on the Notes that became due solely because of the
acceleration of the Notes, have been cured or waived.
</FONT>

<P align="left">
<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
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 may pursue any
remedy with respect to the Indenture or the Notes unless
(i)&nbsp;such Holder has previously given the Trustee notice
that an Event of Default is continuing, (ii)&nbsp;Holders of at
least 25% in principal amount of the outstanding Notes have
requested the Trustee to pursue the remedy, (iii)&nbsp;such
Holders have offered the Trustee reasonable security or
indemnity against any loss, liability or expense, (iv)&nbsp;the
Trustee has not complied with such request within 60&nbsp;days
after the receipt of the request and the offer of security or
indemnity, and (v)&nbsp;the 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 or that would involve the Trustee in personal liability.
Prior to taking any action under the Indenture, the Trustee will
be entitled to indemnification satisfactory to it in its sole
discretion against all losses and expenses caused by taking or
not taking such action.
</FONT>

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<P align="left">
<FONT size="2">The Indenture will provide that if a Default
occurs and is continuing and is actually known to the Trustee,
the Trustee must mail to each Holder notice of the Default
within the earlier of 90&nbsp;days after it occurs or
30&nbsp;days after it is actually known to a Trust Officer or
written notice of it is received by the Trustee. Except in the
case of a Default in the payment of principal of, premium, if
any, or interest on any Note, the Trustee may withhold notice if
and so long as a committee of its Trust Officers in good faith
determines that withholding notice is in the interests of the
Noteholders. 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 Event of Default that occurred during the previous year.
The Company also 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 the Company is taking or proposes to take in respect
thereof.
</FONT>

<P align="left">
<B><FONT size="2">Amendments and Waivers</FONT></B>

<P align="left">
<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 of all series
affected by such amendment and any past default or compliance
with any provisions may be waived with the consent of the
Holders of a majority in principal amount of the Notes of all
series affected by such amendment then outstanding. However,
without the consent of each Holder of an outstanding Note
affected, no amendment may, among other things, (i)&nbsp;reduce
the amount of Notes whose Holders must consent to an amendment,
(ii)&nbsp;reduce the rate of or extend the time for payment of
interest on any Note, (iii)&nbsp;reduce the principal of or
extend the Stated Maturity of any Note, (iv)&nbsp;reduce the
premium payable upon the redemption of any Note or change the
time at which any Note may be redeemed as described under
&#147;Optional Redemption&#148; above, (v)&nbsp;make any Note
payable in money other than that stated in the Note,
(vi)&nbsp;make any change to the subordination provisions of the
Indenture that adversely affects the rights of any Holder,
(vii)&nbsp;impair the right of any Holder to receive payment of
principal of, premium, if any, 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, (viii) (A)&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 or during the
continuance of any Default or Event of Default or (B)&nbsp;waive
an Event of Default under clause&nbsp;(x) 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),
(ix) make any change in the amendment provisions which require
each Holder&#146;s consent or in the waiver provisions or (x)
modify the Guarantees in any manner adverse to the Holders.
</FONT>

<P align="left">
<FONT size="2">Without the consent of any Holder, the Company
and Trustee may amend the Indenture to cure any ambiguity,
omission, defect or inconsistency, to provide for the assumption
by a successor corporation, partnership or limited liability
company of the obligations of the Company under the Indenture,
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 Internal Revenue Code, or in a manner
such that the uncertificated Notes are described in
Section&nbsp;163(f)(2)(B) of the Internal Revenue Code), to add
Guarantees with respect to the Notes, to secure the Notes, to
add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power conferred upon the
Company, to make any change that does not adversely affect the
rights of any Holder, to comply with any requirement of the
Commission in connection with the qualification of the Indenture
under the Trust Indenture Act of 1939 or to make certain changes
to the Indenture to provide for the issuance of Additional
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 then outstanding unless the
holders of such Senior Indebtedness (or any group or
representative thereof authorized to give a consent) consent to
such change.
</FONT>

<P align="left">
<FONT size="2">The consent of the Noteholders 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="center"><FONT size="2">121
</FONT>

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<P align="left">
<FONT size="2">After an amendment under the Indenture becomes
effective, the Company is required to mail to Noteholders a
notice briefly describing such amendment. However, the failure
to give such notice to all Noteholders, or any defect therein,
will not impair or affect the validity of the amendment.
</FONT>

<P align="left">
<FONT size="2">Under the terms of the Credit Agreement, we will
not be permitted to effect any amendment or modification if the
effect would be to (i)&nbsp;increase the interest rate
applicable to the Notes or any deferred interest on the Notes,
(ii)&nbsp;change to an earlier date the scheduled dates of
payment on any component of principal, interest or other amounts
on the Notes, (iii)&nbsp;increase principal repayments or
amortization payments on the Notes, (iv)&nbsp;alter the
redemption, prepayment or subordination provisions of the Notes,
(v)&nbsp;add to or alter the covenants (including, without
limitation, the financial covenants), defaults and Events of
Defaults set forth in the Indenture in a manner that would make
such provisions more onerous or restrictive to the Company, or
(vi)&nbsp;otherwise increase the obligations of the Company or
any Guarantor in respect of the Notes, the deferred interest on
the Notes or confer additional rights upon the holders thereof
which individually or in the aggregate would be adverse to the
Company, any Guarantor or the lenders of the Senior Lender
Indebtedness.
</FONT>

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

<P align="left">
<FONT size="2">The Company at any time 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. The Company
at any time may terminate its obligations under the covenants
described under &#147;Certain Covenants&#148; and &#147;Change
of Control,&#148; the operation of the cross acceleration
provision, the bankruptcy provisions with respect to
Subsidiaries and the judgment default provision described under
&#147;&#151;Defaults&#148; above and the limitations contained
in clause&nbsp;(iv) of the first paragraph under &#147;Merger,
Consolidation or Sale of All or Substantially All Assets&#148;
above (&#147;covenant defeasance&#148;). 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 Guarantee.
</FONT>

<P align="left">
<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;(iv), (vi), (vii)&nbsp;with respect only to
Significant Subsidiaries or (viii)&nbsp;with respect only to
Significant Subsidiaries under &#147;&#151;Defaults&#148; above
or because of the failure of the Company to comply with
clause&nbsp;(iv) of the first paragraph under
&#147;&#151;Merger, Consolidation or Sale of All or
Substantially All Assets&#148; above.
</FONT>

<P align="left">
<FONT size="2">In order to exercise either defeasance option,
the Company 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,
premium (if any) and interest on the Notes to redemption or
maturity, as the case may be, and must comply with certain other
conditions, including (i)&nbsp;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 U.S.&nbsp;federal income
tax purposes as a result of such deposit and defeasance and will
be subject to U.S.&nbsp;federal income tax on the same amount
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 U.S.&nbsp;federal income tax law) and
(ii)&nbsp;so long as, on the date or dates the respective
amounts were paid into the trust, such payments were made with
respect to the Notes without violating the subordination
provisions of the Indenture or any other material agreement
binding on the Company (except for violations of the Indenture
as a result of the borrowing of funds to be applied to such
payments), including the Credit Facilities.
</FONT>

<P align="center"><FONT size="2">122
</FONT>

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<P align="left">
<B><FONT size="2">Satisfaction and Discharge</FONT></B>

<P align="left">
<FONT size="2">The Indenture will be discharged and will cease
to be of further effect as to all Notes issued thereunder, when:
</FONT>
<P>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;either:
    </FONT></TD>
</TR>

</TABLE>
<P>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all Notes that
    have been authenticated (except lost, stolen or destroyed Notes
    that have been replaced or paid and Notes for whose payment
    money has theretofore been deposited in trust and thereafter
    repaid to the Company) have been delivered to the Trustee for
    cancellation;&nbsp;or
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all Notes that
    have not been delivered to the Trustee for cancellation have
    become due and payable by reason of the making of a notice of
    redemption or otherwise or will become due and payable within
    one year and the Company or any Guarantor has irrevocably
    deposited or caused to be deposited with the Trustee as trust
    funds in trust solely for the benefit of the Holders, Cash
    Equivalents, Investment Grade Securities, or a combination
    thereof, in such amounts as will be sufficient without
    consideration of any reinvestment of interest, to pay and
    discharge the entire indebtedness on the Notes not delivered to
    the Trustee for cancellation for principal, premium and
    additional interest, if any, and accrued interest to the date of
    maturity or redemption;
    </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">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;no Event of
    Default (other than one resulting solely from the borrowing of
    funds to provide such deposit) shall have occurred and be
    continuing on the date of such deposit or shall occur as a
    result of such deposit and such deposit will not result in a
    breach or violation of, or constitute a default under, any other
    instrument to which the Company or any Guarantor is a party or
    by which the Company or any Guarantor is bound;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Company or
    any Guarantor has paid or caused to be paid all sums payable by
    it under the Indenture; and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Company has
    delivered irrevocable instructions to the Trustee under the
    Indenture to apply the deposited money toward the payment of the
    Notes at maturity or the redemption date, as the case may be.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Concerning the Trustee</FONT></B>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;is
to be the Trustee under the Indenture.
</FONT>

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

<P align="left">
<FONT size="2">The Indenture will provide that it and the Notes
will be governed by, and construed in accordance with, the laws
of the State of New&nbsp;York.
</FONT>

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

<P align="left">
<FONT size="2">&#147;Acquired Indebtedness&#148; means, with
respect to any specified 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">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness of
    any other Person existing at the time such other Person is
    merged with or into or becomes a Restricted Subsidiary of such
    specified Person; and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness
    secured by a Lien encumbering any asset acquired by such
    specified Person,
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">in each case, other than Indebtedness Incurred as
consideration in, in contemplation of, 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 otherwise acquired by such Person, or such asset was
acquired by such person, as applicable.
</FONT>

<P align="center"><FONT size="2">123
</FONT>
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<P align="left">
<FONT size="2">&#147;Adjusted EBITDA&#148; means, with respect
to any Person for any period, the Consolidated Net Income of
such Person for such period plus, without duplication:
</FONT>
<P>

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

<TR>
    <TD width="3%"></TD>
    <TD width="3%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(i)</FONT></TD>
    <TD align="left">
    <FONT size="2">provision for taxes based on income or profits of
    such Person for such period deducted in computing Consolidated
    Net Income, plus
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(ii)</FONT></TD>
    <TD align="left">
    <FONT size="2">Consolidated Interest Expense (plus amortization
    of deferred financing fees) of such Person for such period to
    the extent the same was deducted in computing Consolidated Net
    Income, plus
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(iii)</FONT></TD>
    <TD align="left">
    <FONT size="2">Consolidated Depreciation and Amortization
    Expense of such Person for such period to the extent such
    Consolidated Depreciation and Amortization Expense was deducted
    in computing Consolidated Net Income, plus
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(iv)</FONT></TD>
    <TD align="left">
    <FONT size="2">any non-recurring fees, expenses or charges
    deducted in such period in computing Consolidated Net Income,
    plus
    </FONT></TD>
</TR>

</TABLE>
<P>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any other
    non-cash charges reducing Consolidated Net Income for such
    period (excluding any such charge which requires an accrual of,
    or cash reserve for, anticipated cash charges for any future
    period); plus
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the difference
    between (A)&nbsp;Net Cash Interest Margin of such Person and its
    Restricted Subsidiaries from equipment promissory notes that
    were sold to special-purpose bankruptcy remote entities and
    (B)&nbsp;the gain on sale accounting resulting from the sale of
    promissory notes to such SPEs in accordance with GAAP.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Notwithstanding the foregoing, the provision for
taxes based on the income or profits of, and the depreciation
and amortization of, a Subsidiary of the Company shall be added
to Consolidated Net Income to compute Adjusted EBITDA only to
the extent (and in the same proportion) that the Net Income of
such Subsidiary was included in calculating Consolidated Net
Income.
</FONT>

<P align="left">
<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 purposes of this definition,
&#147;control&#148; (including, with correlative meanings, the
terms &#147;controlling,&#148; &#147;controlled by&#148; and
&#147;under common control with&#148;), as used with respect to
any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise.
</FONT>

<P align="left">
<FONT size="2">&#147;Asset Sale&#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">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the sale,
    conveyance, transfer or other disposition (whether in a single
    transaction or a series of related transactions) of property or
    assets (including by way of a Sale/Leaseback Transaction) of the
    Company or any Restricted Subsidiary not in the ordinary course
    of business (each referred to in this definition as a
    &#147;disposition&#148;); or
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the issuance or
    sale of Equity Interests of any Restricted Subsidiary (other
    than to the Company or another Restricted Subsidiary) (whether
    in a single transaction or a series of related transactions), in
    each case other than:
    </FONT></TD>
</TR>

</TABLE>
<P>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a disposition of
    Cash Equivalents or Investment Grade Securities or obsolete or
    worn out equipment 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">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the disposition
    of all or substantially all of the assets of the Company in a
    manner permitted pursuant to the provisions described above
    under &#147;&#151;Merger, Consolidation or Sale of All or
    Substantially All Assets&#148; or any disposition that
    constitutes a 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;&nbsp;&nbsp;&nbsp;&nbsp;any Restricted
    Payment or Permitted Investment that is permitted to be made,
    and is made, under the covenant described above under
    &#147;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">(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any disposition
    of assets with an aggregate Fair Market Value of less than
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">124
</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">(5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any disposition
    of property or assets by a Restricted Subsidiary to the Company
    or by the Company or a Restricted Subsidiary to 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">(6)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any exchange of
    like-kind property pursuant to Section&nbsp;1031 of the Internal
    Revenue Code of 1986, as amended, for use in a Similar 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">(7)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;sales of assets
    received by the Company upon the foreclosure on a Lien;
    </FONT></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;&nbsp;&nbsp;&nbsp;&nbsp;any sale of
    Equity Interests in, or Indebtedness or other securities of, an
    Unrestricted Subsidiary;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(9)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;licenses of
    intellectual 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">(10)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any disposition
    of Designated Noncash Compensation;&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;&nbsp;&nbsp;&nbsp;&nbsp;sales of
    inventory in the ordinary course of business consistent with
    past practices and sales of equipment upon termination of a
    contract with a client entered into in the ordinary course of
    business pursuant to the terms of such contract.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">&#147;Base Dividend Restricted Payments
Basket&#148; shall initially equal $0, provided, however, that
if during any fiscal quarter the Company has paid dividends on
the Company&#146;s Common Stock in an aggregate amount that is
less than the Quarterly Base Dividend Level for such quarter, an
amount equal to the difference between (i)&nbsp;the Quarterly
Base Dividend Level for such quarter and (ii)&nbsp;the aggregate
amount of dividends actually paid on the Company&#146;s Common
Stock during such quarter shall be added to the Base Dividend
Restricted Payments Basket as of the last day of such fiscal
quarter.
</FONT>

<P align="left">
<FONT size="2">&#147;Board of Directors&#148; means the Board of
Directors of the Company or any committee thereof duly
authorized to act on behalf of such Board.
</FONT>

<P align="left">
<FONT size="2">&#147;Borrowing Base&#148; means the product of
(i)&nbsp;Adjusted EBITDA for the most recent four fiscal
quarters for which internal financial statements are available
and (ii)&nbsp;three.
</FONT>

<P align="left">
<FONT size="2">&#147;Business Day&#148; means a day other than a
Saturday, Sunday or other day on which banking institutions in
New&nbsp;York State are authorized or required by law to close.
</FONT>

<P align="left">
<FONT size="2">&#147;Capitalized Lease Obligation&#148; means,
at the time any determination thereof is to be made, the amount
of the liability in respect of a capital lease that would at
such time be required to be capitalized and reflected as a
liability on a balance sheet (excluding the footnotes thereto)
in accordance with GAAP.
</FONT>

<P align="left">
<FONT size="2">&#147;Capital Expenditures&#148; means any
expenditure required to be classified as a capital expenditure
in accordance with GAAP.
</FONT>

<P align="left">
<FONT size="2">&#147;Capital Stock&#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">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in the case of a
    corporation, corporate stock, including, without limitation,
    corporate stock represented by IDSs and corporate stock
    outstanding upon the separation of IDSs into the securities
    represented thereby;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in the case of
    an association or business entity, any and all shares,
    interests, participations, rights or other equivalents (however
    designated) of corporate stock;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in the case of
    a partnership or limited liability company, partnership or
    membership interests (whether general or limited); and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any other
    interest or participation that confers on a Person the right to
    receive a share of the profits and losses of, or distributions
    of assets of, the issuing Person.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">&#147;Cash Equivalents&#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">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S.&nbsp;dollars
    and foreign currency exchanged into U.S.&nbsp;dollars within
    180&nbsp;days;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;securities
    issued or directly and fully guaranteed or insured by the United
    States government or any agency or instrumentality thereof;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">125
</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">
    <FONT size="2">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;certificates
    of deposit, time deposits and eurodollar time deposits with
    maturities of one year or less from the date of acquisition,
    bankers&#146; acceptances with maturities not exceeding one year
    and overnight bank deposits, in each case with any commercial
    bank having capital and surplus in excess of $500.0&nbsp;million
    and whose long-term debt is rated at least &#147;A&#148; or the
    equivalent thereof by Moody&#146;s or S&#38;P;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;repurchase
    obligations for underlying securities of the types described in
    clauses&nbsp;(ii) and (iii) above entered into with any
    financial institution meeting the qualifications specified in
    clause&nbsp;(iii) above;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;commercial paper
    issued by a corporation (other than an Affiliate of the Company)
    rated at least &#147;A-2&#148; or the equivalent thereof by
    Moody&#146;s or S&#38;P and in each case maturing within one
    year after the date of acquisition;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;investment
    funds investing at least 95% of their assets in securities of
    the types described in clauses&nbsp;(i) through (v) above;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;readily
    marketable direct obligations issued by any state of the United
    States of America or any political subdivision thereof having
    one of the two highest rating categories obtainable from either
    Moody&#146;s or S&#38;P; and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(viii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness
    or preferred stock issued by Persons with a rating of
    &#147;A&#148; or higher from S&#38;P or &#147;A-2&#148; or
    higher from Moody&#146;s.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">&#147;Company&#148; means Alliance Laundry
Holdings Inc. until a successor replaces it and, thereafter,
means the successor and, for purposes of any provision contained
in the Indenture and required by the Trust Indenture Act, each
other obligor on the Notes.
</FONT>

<P align="left">
<FONT size="2">&#147;Consolidated Depreciation and Amortization
Expense&#148; means with respect to any Person for any period,
the total amount of depreciation and amortization expense of
such Person and its Restricted Subsidiaries for such period on a
consolidated basis and otherwise determined in accordance with
GAAP.
</FONT>

<P align="left">
<FONT size="2">&#147;Consolidated Interest Expense&#148; means,
with respect to any Person for any period, the sum, without
duplication, of: (i)&nbsp;consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, to the
extent such expense was deducted in computing Consolidated Net
Income (including amortization of original issue discount, the
interest component of Capitalized Lease Obligations (or any
financing lease which has substantially the same economic effect
as a Capitalized Lease Obligation) and net payments and receipts
(if any) pursuant to Hedging Obligations and excluding
amortization of deferred financing fees), and
(ii)&nbsp;consolidated capitalized interest of such Person and
its Restricted Subsidiaries for such period, whether paid or
accrued.
</FONT>

<P align="left">
<FONT size="2">&#147;Consolidated Net Income&#148; means, with
respect to any Person for any period, the aggregate of the Net
Income of such Person and its Restricted Subsidiaries for such
period, on a consolidated basis; 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">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any net
    after-tax extraordinary gains or losses (less all fees and
    expenses relating thereto) shall be excluded;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any increase in
    amortization or depreciation resulting from purchase accounting
    in relation to any acquisition that is consummated after the
    Issue Date, net of taxes, shall be excluded;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Net Income
    for such period shall not include the cumulative effect of a
    change in accounting principles during such period;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any net
    after-tax income or loss from discontinued operations and any
    net after-tax gains or losses on disposal of discontinued
    operations shall be excluded;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">126
</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">
    <FONT size="2">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any net
    after-tax gains or losses (less all fees and expenses relating
    thereto) attributable to asset dispositions other than in the
    ordinary course of business (as determined in good faith by the
    Board of Directors) shall be excluded;&nbsp;and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the Net Income
    for such period of any Person that is not a Subsidiary of such
    Person, or is an Unrestricted Subsidiary, or that is accounted
    for by the equity method of accounting, shall be included only
    to the extent of the amount of dividends or distributions or
    other payments paid in cash (or to the extent converted into
    cash) to the referent Person or a Restricted Subsidiary thereof
    in respect of such period; and
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">&#147;Continuing Directors&#148; means, as of any
date of determination, any member of the Company&#146;s Board of
Directors who:
</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">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;was a member of
    the Company&#146;s Board of Directors on the date of the
    Indenture;&nbsp;or
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;was nominated
    for election or elected to the Board of Directors with the
    affirmative vote of at least a majority of the Continuing
    Directors who were members of the Company&#146;s Board of
    Directors at the time of the nomination or election.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">&#147;Contribution Indebtedness&#148; means
Indebtedness of the Company in an aggregate principal amount not
greater than the amount of all Specified Cash Contributions,
provided that such Contribution Indebtedness (i)&nbsp;has a
Stated Maturity later than the Stated Maturity of the Notes,
(ii)&nbsp;is Incurred substantially concurrently with such
Specified Cash Contributions, and (iii)&nbsp;is so designated as
Contribution Indebtedness pursuant to an Officers&#146;
Certificate on the Incurrence date thereof.
</FONT>

<P align="left">
<FONT size="2">&#147;Credit Agreement&#148; means the credit
agreement to be dated as
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004, as amended, restated, supplemented, waived, replaced,
restructured, repaid, increased, refunded, refinanced or
otherwise modified from time to time (whether or not terminated
and whether with the original lenders or otherwise), among the
Company, the Subsidiaries of the Company named therein, the
financial institutions from time to time a party thereto
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
as Administrative Agent, Fronting Bank and Swingline Lender,
including any successor or replacement facility extending the
maturity thereof or otherwise restructuring all or any portion
of the Indebtedness under such agreement or increasing the
amount of available borrowings thereunder (except to the extent
that any such amendment, restatement, supplement, waiver,
replacement, refunding, refinancing or other modification
thereto would be prohibited by the terms of the Indenture,
unless otherwise agreed to by the Holders of at least a majority
in aggregate principal amount of Notes at the time outstanding).
</FONT>

<P align="left">
<FONT size="2">&#147;Credit Facilities&#148; means, one or more
debt facilities (including, without limitation, the Credit
Agreement and indentures or debt securities) or commercial paper
facilities, in each case with banks or other institutional
lenders providing for revolving credit loans, term debt,
receivables financing (including through the sale of receivables
to such lenders or to special purpose entities formed to borrow
from such lenders against such receivables) or letters of
credit, in each case, as amended, restated, modified, renewed,
refunded, replaced or refinanced in whole or in part from time
to time, including any refunding, replacement or refinancing
thereof through the issuance of debt securities.
</FONT>

<P align="left">
<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">
<FONT size="2">&#147;Designated Noncash Consideration&#148;
means the Fair Market Value of noncash consideration received by
the Company or one of its Restricted Subsidiaries in connection
with an Asset Sale that is so designated as Designated Noncash
Consideration pursuant to an Officers&#146; Certificate, setting
forth the basis of such valuation, less the amount of Cash
Equivalents received in connection with a subsequent sale of
such Designated Noncash Consideration.
</FONT>

<P align="left">
<FONT size="2">&#147;Designated Preferred Stock&#148; means
Preferred Stock of the Company (other than Disqualified Stock)
that is issued (other than to a Subsidiary of the Company or an
employee stock ownership plan or trust established by the
Company or any of its Subsidiaries) and is so designated as
Designated Preferred Stock, pursuant to an Officers&#146;
Certificate, on the issuance date thereof, the proceeds of which
are excluded from
</FONT>

<P align="center"><FONT size="2">127
</FONT>

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<DIV align="left">
<FONT size="2">the calculation set forth in clause&nbsp;(c) of
the covenant described under &#147;&#151;Limitation on
Restricted Payments.&#148;
</FONT>
</DIV>

<P align="left">
<FONT size="2">&#147;Designated Senior Indebtedness&#148; means
(i)&nbsp;the Senior Lender Indebtedness and (ii)&nbsp;any other
Senior Indebtedness of the Company with a principal amount in
excess of $25&nbsp;million.
</FONT>

<P align="left">
<FONT size="2">&#147;Disqualified Stock&#148; means, with
respect to any Person, any Capital Stock of such Person which,
by its terms (or by the terms of any security into which it is
convertible or for which it is redeemable or exchangeable), 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">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&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">
    <FONT size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;is convertible
    or exchangeable for Indebtedness or Disqualified Stock;&nbsp;or
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;is redeemable
    at the option of the holder thereof, in whole or in part, in
    each case prior to the first anniversary of the maturity date of
    the Notes;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">provided, however, that only the portion of
Capital Stock which so matures or is mandatorily redeemable, is
so convertible or exchangeable or is so redeemable at the option
of the holder thereof prior to such dates shall be deemed to be
Disqualified Stock; provided further, however, that if such
Capital Stock is issued to any employee or to any plan for the
benefit of employees of the Company or its Subsidiaries or by
any such plan to such employees, such Capital Stock shall not
constitute Disqualified Stock solely because it may be required
to be repurchased by the Company in order to satisfy applicable
statutory or regulatory obligations or as a result of such
employee&#146;s termination, death or disability.
Notwithstanding clause&nbsp;(iii) of this definition, any
Capital Stock that would constitute Disqualified Stock solely
because the holders thereof have the right to require the
Company to repurchase such Capital Stock upon the occurrence of
a change of control or an asset sale shall not constitute
Disqualified Stock if the terms of such Capital Stock provide
that the Company may not repurchase or redeem any such Capital
Stock pursuant to such provisions unless such repurchase or
redemption complies with the covenant described above under the
caption &#147;&#151;Certain Covenants&#151;Restricted
Payments.&#148;
</FONT>

<P align="left">
<FONT size="2">&#147;Equity Interests&#148; means Capital Stock
and all warrants, options or other rights to acquire Capital
Stock (but excluding any debt security that is convertible into,
or exchangeable for, Capital Stock).
</FONT>

<P align="left">
<FONT size="2">&#147;Excess Cash&#148; shall mean, with respect
to any period, Adjusted EBITDA minus the sum of (i)&nbsp;cash
interest expense, (ii)&nbsp;cash income tax expense,
(iii)&nbsp;Capital Expenditures (except to the extent financed
with an incurrence of indebtedness) and (iv)&nbsp;dividends on
our shares of Preferred Stock, in each case, for such period.
</FONT>

<P align="left">
<FONT size="2">&#147;Excluded Contributions&#148; means the net
cash proceeds received by the Company after the Issue Date from
(i)&nbsp;contributions to its common equity capital and
(ii)&nbsp;the sale (other than to a Subsidiary of the Company or
to any Company or Subsidiary management equity plan or stock
incentive plan or any other management or employee benefit plan
or agreement) of Capital Stock (other than Disqualified Stock
and Designated Preferred Stock) of the Company, in each case
designated as Excluded Contributions pursuant to an
Officers&#146; Certificate executed by an Officer of the
Company, the proceeds of which are excluded from the calculation
set forth in clause&nbsp;(c) of the first paragraph of the
&#147;&#151;Limitation on Restricted Payments&#148; covenant.
</FONT>

<P align="left">
<FONT size="2">&#147;Fair Market Value&#148; means, with respect
to any asset or property, the price which could be negotiated in
an arm&#146;s-length, free market transaction, for cash, between
a willing seller and a willing and able buyer, neither of whom
is under undue pressure or compulsion to complete the
transaction.
</FONT>

<P align="left">
<FONT size="2">&#147;Fixed Charge Coverage Ratio&#148; means,
with respect to any Person for any period, the ratio of Adjusted
EBITDA of such Person for such period to the Fixed Charges of
such Person for such period. In the event that the Company or
any of its Restricted Subsidiaries Incurs or redeems any
Indebtedness (other than in the case of revolving credit
borrowings, in which case interest expense shall be computed
based upon the average daily balance of such Indebtedness during
the applicable period) or issues or redeems Preferred Stock
subsequent to the commencement of the period for which the Fixed
Charge Coverage Ratio is being
</FONT>

<P align="center"><FONT size="2">128
</FONT>

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<DIV align="left">
<FONT size="2">calculated but prior to the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the
&#147;Calculation Date&#148;), then the Fixed Charge Coverage
Ratio shall be calculated giving pro forma effect to such
Incurrence or redemption of Indebtedness, or such issuance or
redemption of Preferred Stock, as if the same had occurred at
the beginning of the applicable four-quarter period.
</FONT>
</DIV>

<P align="left">
<FONT size="2">For purposes of making the computation referred
to above,&nbsp;Investments, acquisitions, dispositions, mergers,
consolidations and discontinued operations (as determined in
accordance with GAAP), in each case with respect to an operating
unit of a business, that have been made by the Company or any of
its Restricted Subsidiaries during the four-quarter reference
period or subsequent to such reference period and on or prior to
or simultaneously with the Calculation Date shall be calculated
on a pro forma basis assuming that all such Investments,
acquisitions, dispositions, discontinued operations, mergers and
consolidations (and the reduction of any associated fixed charge
obligations and the change in Adjusted EBITDA resulting
therefrom) had occurred on the first day of the four-quarter
reference period. If since the beginning of such period any
Person (that subsequently became a Restricted Subsidiary or was
merged with or into the Company or any Restricted Subsidiary
since the beginning of such period) shall have made any
Investment, acquisition or disposition, have discontinued any
operation, or have engaged in merger or consolidation, in each
case with respect to an operating unit of a business, that would
have required adjustment pursuant to this definition, then the
Fixed Charge Coverage Ratio shall be calculated giving pro forma
effect thereto for such period as if such Investment,
acquisition, disposition, discontinued operation, merger or
consolidation had occurred at the beginning of the applicable
four-quarter period.
</FONT>

<P align="left">
<FONT size="2">For purposes of this definition, whenever pro
forma effect is to be given to any transaction, the pro forma
calculations shall be made in good faith by a responsible
financial or accounting officer of the Company. 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 Calculation Date
had been the applicable rate for the entire period (taking into
account any Hedging Obligations applicable to such Indebtedness
if such Hedging Obligation has a remaining term in excess of
12&nbsp;months). Interest on a Capitalized Lease Obligation
shall be deemed to accrue at an interest rate reasonably
determined by a responsible financial or accounting officer of
the Company to be the rate of interest implicit in such
Capitalized Lease Obligation in accordance with GAAP.
</FONT>

<P align="left">
<FONT size="2">For purposes of making the computation referred
to above, interest on any Indebtedness under a revolving credit
facility computed on a pro forma basis shall be computed based
upon the average daily balance of such Indebtedness during the
applicable period. Interest on Indebtedness that may optionally
be determined at an interest rate based upon a factor of a prime
or similar rate, a eurocurrency interbank offered rate, or other
rate, shall be deemed to have been based upon the rate actually
chosen, or, if none, then based upon such optional rate chosen
as the Company may designate. Any such pro forma calculation may
include adjustments appropriate, in the reasonable determination
of the Company as set forth in an Officers&#146; Certificate, to
reflect operating expense reductions reasonably expected to
result from any acquisition or merger.
</FONT>

<P align="left">
<FONT size="2">&#147;Fixed Charges&#148; means, with respect to
any Person for any period, the sum of (i)&nbsp;Consolidated
Interest Expense of such Person for such period and
(ii)&nbsp;all cash dividend payments (excluding items eliminated
in consolidation) on any series of Preferred Stock or
Disqualified Stock of such Person and its Subsidiaries.
</FONT>

<P align="left">
<FONT size="2">&#147;GAAP&#148; means generally accepted
accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity
as have been approved by a significant segment of the accounting
profession, which are in effect on the Issue Date. For the
purposes of the Indenture, the term &#147;consolidated&#148;
with respect to any Person shall mean such Person consolidated
with its Restricted Subsidiaries, and shall not include any
Unrestricted Subsidiary, but the interest of such Person in an
Unrestricted Subsidiary will be accounted for as an Investment.
</FONT>

<P align="left">
<FONT size="2">&#147;guarantee&#148; means a guarantee (other
than by endorsement of negotiable instruments for collection in
the ordinary course of business), direct or indirect, in any
manner (including, without limitation, letters of
</FONT>

<P align="center"><FONT size="2">129
</FONT>
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<DIV align="left">
<FONT size="2">credit and reimbursement agreements in respect
thereof), of all or any part of any Indebtedness or other
obligations.
</FONT>
</DIV>

<P align="left">
<FONT size="2">&#147;Guarantee&#148; means any guarantee of the
obligations of the Company under the Indenture and the Notes by
any Person in accordance with the provisions of the Indenture.
</FONT>

<P align="left">
<FONT size="2">&#147;Guarantor&#148; means any Person that
Incurs a Guarantee; provided that upon the release or discharge
of such Person from its Guarantee in accordance with the
Indenture, such Person ceases to be a Guarantor.
</FONT>

<P align="left">
<FONT size="2">&#147;Hedging Obligations&#148; means, with
respect to any Person, the obligations of such Person under
(i)&nbsp;currency exchange, interest rate or commodity swap
agreements, currency exchange, interest rate or commodity cap
agreements and currency exchange, interest rate or commodity
collar agreements and (ii)&nbsp;other agreements or arrangements
designed to protect such Person against fluctuations in currency
exchange, interest rates or commodity prices.
</FONT>

<P align="left">
<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">
<FONT size="2">&#147;IDS&#148; means the Company&#146;s Income
Deposit Securities, whether currently outstanding or as may be
issued from time to time.
</FONT>

<P align="left">
<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 Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such person at the time it becomes a Subsidiary.
</FONT>

<P align="left">
<FONT size="2">&#147;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">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the principal
    and premium (if any) of any indebtedness of such Person, whether
    or not contingent:
    </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">
    <FONT size="2">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in respect of
    borrowed money;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;evidenced by
    bonds, notes, debentures or similar instruments or letters of
    credit or bankers&#146; acceptances (or, without duplication,
    reimbursement agreements in respect thereof);
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;representing the
    deferred and unpaid purchase price of any property, except any
    such balance that constitutes a trade payable or similar
    obligation to a trade creditor or an accrued expense;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in respect of
    Capitalized Lease Obligations;&nbsp;or
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;representing any
    Hedging Obligations,
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">if and to the extent that any of the foregoing
Indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability on a balance sheet
(excluding the footnotes thereto) of such Person prepared in
accordance with GAAP;
</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">
    <FONT size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to the extent
    not otherwise included, any obligation of such Person to be
    liable for, or to pay, as obligor, guarantor or otherwise, on
    the Indebtedness of another Person (other than by endorsement of
    negotiable instruments for collection in the ordinary course of
    business);&nbsp;and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to the extent
    not otherwise included,&nbsp;Indebtedness of another Person
    secured by a Lien on any asset owned by such Person (whether or
    not such Indebtedness is assumed by such Person); provided,
    however, that the amount of such Indebtedness will be the lesser
    of (a)&nbsp;the Fair Market Value of such asset at such date of
    determination and (b)&nbsp;the amount of such Indebtedness of
    such other Person; provided, further, that any obligation of the
    Company or any Restricted Subsidiary in respect of
    (i)&nbsp;minimum guaranteed commissions, or other similar
    payments, to clients, minimum returns to clients or stop loss
    limits in favor of clients or indemnification obligations to
    clients, in each case pursuant to contracts to provide services
    to clients entered into in the ordinary course of business, and
    (ii)&nbsp;account credits to participants under the LTIP or any
    successor or similar compensation plan, shall be deemed not to
    constitute Indebtedness.
    </FONT></TD>
</TR>

</TABLE>

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</FONT>

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<P align="left">
<FONT size="2">&#147;Independent Financial Advisor&#148; means
an accounting, appraisal or investment banking firm or
consultant to Persons engaged in a similar business of
nationally recognized standing that is, in the good faith
determination of the Company, qualified to perform the task for
which it has been engaged.
</FONT>

<P align="left">
<FONT size="2">&#147;Investment Grade Securities&#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">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;securities
    issued or directly and fully guaranteed or insured by the United
    States government or any agency or instrumentality thereof
    (other than Cash Equivalents);
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;debt securities
    or debt instruments with a rating of BBB- or higher by S&#38;P
    or Baa3 or higher by Moody&#146;s or the equivalent of such
    rating by such rating organization, or if no rating of S&#38;P
    or Moody&#146;s then exists, the equivalent of such rating by
    any other nationally recognized securities rating agency, but
    excluding any debt securities or instruments constituting loans
    or advances among the Company and its Subsidiaries;&nbsp;and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;investments in
    any fund that invests exclusively in investments of the type
    described in clauses&nbsp;(i) and (ii)&nbsp;which fund may also
    hold cash.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">&#147;Investments&#148; means, with respect to
any Person, all investments by such Person in other Persons
(including Affiliates) in the form of loans (including
guarantees), advances or capital contributions (excluding
accounts receivable, trade credit and advances to customers and
commission, travel and similar advances to officers, employees
and consultants made in the ordinary course of business),
purchases or other acquisitions for consideration (including
agreements providing for the adjustment of purchase price) of
Indebtedness, Equity Interests or other securities issued by any
other Person and investments that are required by GAAP to be
classified on the balance sheet of the Company in the same
manner as the other investments included in this definition to
the extent such transactions involve the transfer of cash or
other property.
</FONT>

<P align="left">
<FONT size="2">For purposes of the definition of
&#147;Unrestricted Subsidiary&#148; and the covenant described
under &#147;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">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Investments&#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 a 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 (x)&nbsp;the Company&#146;s &#147;Investment&#148; in such
    Subsidiary at the time of such redesignation less (y)&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">
    <FONT size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&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.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">&#147;Issue Date&#148; means the date on which
the Notes are authenticated.
</FONT>

<P align="left">
<FONT size="2">&#147;Lien&#148; means, with respect to any
asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset, whether or not
filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing
of or agreement to give any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any
jurisdiction); provided that in no event shall an operating
lease be deemed to constitute a Lien.
</FONT>

<P align="left">
<FONT size="2">&#147;LTIP&#148; means any long-term incentive or
similar compensation plan maintained by the Company or its
Restricted Subsidiaries.
</FONT>

<P align="left">
<FONT size="2">&#147;Maintenance Capital Expenditures&#148;
means Capital Expenditures less non-recurring Capital
Expenditures.
</FONT>

<P align="left">
<FONT size="2">&#147;Moody&#146;s&#148; means Moody&#146;s
Investors Service,&nbsp;Inc.
</FONT>

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</FONT>
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<P align="left">
<FONT size="2">&#147;Net Cash Interest Margin&#148; means
interest and fees earned on equipment promissory notes sold to
special-purpose bankruptcy remote entities less interest expense
payable to note holders of such entities less collection and
administrative expenses associated with said promissory notes by
such Person and its Restricted Subsidiaries.
</FONT>

<P align="left">
<FONT size="2">&#147;Net Debt&#148; means, with respect to the
Company, on a consolidated basis at any time, the actual
outstanding amount of funded indebtedness, plus, without
duplication, the principal component of all Capitalized Lease
Obligations and, without duplication, other Indebtedness of the
Company and its Restricted Subsidiaries at such time, less
(i)&nbsp;any early termination payments that would be owed to
the Company and its subsidiaries if all outstanding Hedging
Obligations were terminated, and (ii)&nbsp;the amount of cash
and Cash Equivalents of the Company and its Subsidiaries on the
balance sheet as of the date of determination.
</FONT>

<P align="left">
<FONT size="2">&#147;Net Income&#148; means, with respect to any
Person, the net income (loss) of such Person, determined in
accordance with GAAP and before any reduction in respect of
Preferred Stock dividends or other dividends.
</FONT>

<P align="left">
<FONT size="2">&#147;Net Proceeds&#148; means the aggregate cash
proceeds received by the Company or any of its Restricted
Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received in respect of or upon the sale or
other disposition of any Designated Noncash Consideration
received in any Asset Sale and any cash payments received by way
of deferred payment of principal pursuant to a note or
installment receivable or otherwise, but only as and when
received, but excluding the assumption by the acquiring person
of Indebtedness relating to the disposed assets or other
considerations received in any other noncash form), net of the
direct costs relating to such Asset Sale and the sale or
disposition of such Designated Noncash Consideration (including,
without limitation, legal, accounting and investment banking
fees, and brokerage and sales commissions), and any relocation
expenses Incurred as a result thereof, taxes paid or payable as
a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements related
thereto), amounts required to be applied to the repayment of
principal, premium (if any) and interest on Indebtedness
required (other than pursuant to clause&nbsp;(i) of the second
paragraph of the covenant described under &#147;&#151;Asset
Sales&#148;) to be paid as a result of such transaction, and any
deduction of appropriate amounts to be provided by the Company
as a reserve in accordance with GAAP against any liabilities
associated with the asset disposed of in such transaction and
retained by the Company after such sale or other disposition
thereof, including, without limitation, pension and other
post-employment benefit liabilities and liabilities related to
environmental matters or against any indemnification obligations
associated with such transaction.
</FONT>

<P align="left">
<FONT size="2">&#147;Notes&#148; means
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;senior subordinated
notes of the Company, including any Additional Notes unless
expressly provided otherwise.
</FONT>

<P align="left">
<FONT size="2">&#147;Obligations&#148; means any principal,
interest, penalties, fees, indemnifications, reimbursements
(including, without limitation, reimbursement obligations with
respect to letters of credit and bankers&#146; acceptances),
damages and other liabilities payable under the documentation
governing any Indebtedness; provided that Obligations with
respect to the Notes shall not include fees or indemnifications
in favor of the Trustee and other third parties other than the
Holders of the Notes.
</FONT>

<P align="left">
<FONT size="2">&#147;Officer&#148; means the Chairman of the
Board, the President, the Chief Financial Officer, any Executive
Vice President, Senior Vice President or Vice President, the
Treasurer or the Secretary of the Company.
</FONT>

<P align="left">
<FONT size="2">&#147;Officers&#146; Certificate&#148; means a
certificate signed on behalf of the Company by two Officers of
the Company, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company that meets the
requirements set forth in the Indenture.
</FONT>

<P align="left">
<FONT size="2">&#147;Opinion of Counsel&#148; means a written
opinion from legal counsel. The counsel may be an employee of or
counsel to the Company.
</FONT>

<P align="left">
<FONT size="2">&#147;Pari Passu Indebtedness&#148; means
(i)&nbsp;with respect to the Company, the Notes and any other
Indebtedness of the Company, other than Senior Indebtedness,
Secured Indebtedness or Subordinated Indebtedness of
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">the Company and (ii)&nbsp;with respect to any
Guarantor, its Guarantee and any other Indebtedness of such
Guarantor, other than Senior Indebtedness, Secured Indebtedness
and Subordinated Indebtedness of such Guarantor.
</FONT>
</DIV>

<P align="left">
<FONT size="2">&#147;Permitted Asset Swap&#148; means any one or
more transactions in which the Company or any Restricted
Subsidiary exchanges assets for consideration consisting of
(i)&nbsp;assets used or useful in a Similar Business and
(ii)&nbsp;any cash or Cash Equivalents, provided that such cash
or Cash Equivalents will be considered Net Proceeds from an
Asset Sale.
</FONT>

<P align="left">
<FONT size="2">&#147;Permitted Holders&#148; means Bain Capital
Partners, LLC, Bruckman, Rosser, Sherrill&nbsp;&#38; Co. LLC and
their respective affiliates.
</FONT>

<P align="left">
<FONT size="2">&#147;Permitted Investments&#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">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any Investment
    in the Company or any Restricted Subsidiary;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any Investment
    in Cash Equivalents or Investment Grade Securities;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any Investment
    by the Company or any Restricted Subsidiary of the Company in a
    Person that is primarily engaged in a Similar Business if as a
    result of such Investment (a)&nbsp;such Person becomes a
    Restricted Subsidiary or (b)&nbsp;such Person, in one
    transaction or a series of related transactions, is merged,
    consolidated or amalgamated with or into, or transfers or
    conveys substantially all of its assets to, or is liquidated
    into, the Company or a Restricted Subsidiary;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any Investment
    in securities or other assets not constituting Cash Equivalents
    and received in connection with an Asset Sale made pursuant to
    the provisions of &#147;&#151;Asset Sales&#148; or any other
    disposition of assets not constituting an Asset Sale;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any Investment
    existing on the Issue Date;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;advances to
    employees not in excess of $10&nbsp;million outstanding at any
    one time in the aggregate;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any Investment
    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">
    <FONT size="2">(viii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hedging
    Obligations;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(ix)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional
    Investments having an aggregate Fair Market Value, taken
    together with all other Investments made pursuant to this
    clause&nbsp;(ix)&nbsp;that are at that time outstanding, not to
    exceed the greater
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
    of Total Assets or
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
    at the time of such Investment (with the Fair Market Value of
    each Investment being measured at the time made and without
    giving effect to subsequent changes in value);
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;loans and
    advances to officers, directors and employees for
    business-related travel expenses, moving expenses and other
    similar expenses, in each case Incurred in the ordinary course
    of business, and account credits and payments to participants
    under the LTIP or any successor or similar compensation plan;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(xi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments the
    payment for which consists of Equity Interests of the Company
    (other than Disqualified Stock); provided, however, that such
    Equity Interests will not increase the amount available for
    Restricted Payments under clause&nbsp;(c) of the
    &#147;&#151;Limitation on Restricted Payments&#148; covenant;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(xii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any
    transaction to the extent it constitutes an Investment that is
    permitted by and made in accordance with the provisions of the
    second paragraph of the covenant described under
    </FONT></TD>
</TR>

</TABLE>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">&#147;&#151;Transactions with Affiliates&#148;
    (except transactions described in clauses&nbsp;(ii),
    (iii)&nbsp;and (vi)&nbsp;of such paragraph);
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(xiii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments
    consisting of the licensing or contribution of intellectual
    property pursuant to joint marketing arrangements with other
    Persons;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(xiv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Guarantees
    issued in accordance with &#147;Limitations on Incurrence of
    Indebtedness and Issuance of Disqualified Stock and Preferred
    Stock&#148;;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(xv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any Investment
    by Restricted Subsidiaries in other Restricted Subsidiaries and
    Investments by Subsidiaries that are not Restricted Subsidiaries
    in other Subsidiaries that are not Restricted
    Subsidiaries;&nbsp;and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(xvi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments
    consisting of purchases and acquisitions of inventory, supplies,
    materials and equipment or purchases of contract rights or
    licenses or leases of intellectual property, in each case in the
    ordinary course of business.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">&#147;Permitted Junior Securities&#148; shall
mean debt or equity securities of the Company or any successor
corporation issued pursuant to a plan of reorganization or
readjustment of the Company that are subordinated to the payment
of all then-outstanding Senior Indebtedness of the Company at
least to the same extent that the Notes are subordinated to the
payment of all Senior Indebtedness of the Company on the Issue
Date, so long as to the extent that any Senior Indebtedness of
the Company outstanding on the date of consummation of any such
plan of reorganization or readjustment is not paid in full in
cash on such date, either (a)&nbsp;the holders of any such
Senior Indebtedness not so paid in full in cash have consented
to the terms of such plan of reorganization or readjustment or
(b)&nbsp;such holders receive securities which constitute Senior
Indebtedness and which have been determined by the relevant
court to constitute satisfaction in full in cash of any Senior
Indebtedness not paid in full in cash.
</FONT>

<P align="left">
<FONT size="2">&#147;Permitted Liens&#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">
    <FONT size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;pledges or
    deposits by such Person under workmen&#146;s compensation laws,
    unemployment insurance laws or similar legislation, or good
    faith deposits in connection with bids, tenders, contracts
    (other than for the payment of Indebtedness) or leases to which
    such Person is a party, or deposits to secure public or
    statutory obligations of such Person or deposits of cash or
    United States government bonds to secure surety or appeal bonds
    to which such Person is a party, or deposits as security for
    contested taxes or import duties or for the payment of rent, in
    each case Incurred in the ordinary course of business;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens imposed by
    law, such as carriers&#146;, warehousemen&#146;s and
    mechanics&#146; Liens, in each case for sums not yet due or
    being contested in good faith by appropriate proceedings or
    other Liens arising out of judgments or awards against such
    Person with respect to which such Person shall then be
    proceeding with an appeal or other proceedings for review;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens for taxes,
    assessments or other governmental charges not yet due or payable
    or subject to penalties for nonpayment or which are being
    contested in good faith by appropriate proceedings;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens in favor
    of issuers of performance and surety bonds or bid bonds or
    completion guarantees or with respect to other regulatory
    requirements or letters of credit issued pursuant to the request
    of and for the account of such Person in the ordinary course of
    its business;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;minor survey
    exceptions, minor encumbrances, easements or reservations of, or
    rights of others for, licenses, rights-of-way, sewers, electric
    lines, telegraph and telephone lines and other similar purposes,
    or zoning or other restrictions as to the use of real properties
    or Liens incidental to the conduct of the business of such
    Person or to the ownership of its properties which were not
    Incurred in connection with Indebtedness and which do not in the
    aggregate materially adversely affect the value of said
    properties or materially impair their use in the operation of
    the business of such Person;
    </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">
    <FONT size="2">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens securing
    Indebtedness permitted to be incurred pursuant to
    clause&nbsp;(d) of the second paragraph of the covenant
    described under &#147;&#151;Limitations on Incurrence of
    Indebtedness and Issuance of Disqualified Stock and Preferred
    Stock&#148;;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens to secure
    Indebtedness permitted pursuant to clause&nbsp;(a) of the second
    paragraph of the covenant described under
    &#147;&#151;Limitations on Incurrence of Indebtedness and
    Issuance of Disqualified Stock and Preferred Stock&#148;;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens existing
    on the Issue Date;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens on
    property or shares of stock of a Person at the time such Person
    becomes a Subsidiary; provided, however, such Liens are not
    created or Incurred in connection with, or in contemplation of,
    such other Person becoming such a Subsidiary; provided further,
    however, that such Liens may not extend to any other property
    owned by the Company or any Restricted Subsidiary;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens on
    property at the time the Company or a Restricted Subsidiary
    acquired the property, including any acquisition by means of a
    merger or consolidation with or into the Company or any
    Restricted Subsidiary; provided further, however, that such
    Liens are not created or Incurred in connection with, or in
    contemplation of, such acquisition; provided further, however,
    that the Liens may not extend to any other property owned by the
    Company or any Restricted Subsidiary;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens securing
    Indebtedness or other obligations of a Restricted Subsidiary
    owing to the Company or another Restricted Subsidiary permitted
    to be incurred in accordance with the covenant described under
    &#147;&#151;Limitations on Incurrence of Indebtedness and
    Issuance of Disqualified Stock and Preferred Stock&#148;;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens securing
    Hedging Obligations so long as the related Indebtedness is, and
    is permitted to be under the Indenture, secured by a Lien on the
    same property securing such Hedging Obligations;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens on
    specific items of inventory or other goods and proceeds of any
    Person securing such Person&#146;s obligations in respect of
    bankers&#146; acceptances, issued or created for the account of
    such Person to facilitate the purchase, shipment or storage of
    such inventory or other goods;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;leases and
    subleases of real property which do not materially interfere
    with the ordinary conduct of the business of the Company or any
    of its Restricted Subsidiaries;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens arising
    from Uniform Commercial Code financing statement filings
    regarding operating leases entered into by the Company and 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">
    <FONT size="2">(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens in favor
    of the Company;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens on
    equipment of the Company granted in the ordinary course of
    business to the Company&#146;s client at which such equipment is
    located;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(r)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens
    encumbering deposits made in the ordinary course of business to
    secure obligations arising from statutory, regulatory,
    contractual or warranty requirements, including rights of offset
    and set-off;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(s)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens on the
    Equity Interests of Unrestricted Subsidiaries securing
    obligations of Unrestricted Subsidiaries not otherwise
    prohibited by the Indenture;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(t)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens to secure
    Indebtedness permitted by clause&nbsp;(1) of the second
    paragraph of the covenant described under
    &#147;&#151;Limitations on Incurrence of Indebtedness and
    Issuance of Disqualified Stock and Preferred
    Stock&#148;;&nbsp;and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(u)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liens to secure
    any refinancing, refunding, extension, renewal or replacement
    (or successive refinancings, refundings, extensions, renewals or
    replacements) as a whole, or in part, of any Indebtedness
    secured by any Lien referred to in the foregoing
    clauses&nbsp;(f), (g), (h), (i), (j), (k), (1) and (t);
    provided, however, that (x)&nbsp;such new Lien shall be limited
    to all or part of the same property that secured the original
    Lien (plus improvements on such property) and (y)&nbsp;the
    Indebtedness secured by such Lien at such time is not increased
    to any amount greater than the sum
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">135
</FONT>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">of (A) the outstanding principal amount or, if
    greater, committed amount of the Indebtedness described under
    clauses&nbsp;(f), (g), (h), (i), (j), (k), (1) or (t) at the
    time the original Lien became a Permitted Lien under the
    Indenture and (B)&nbsp;an amount necessary to pay any fees and
    expenses, including premiums, related to such refinancing,
    refunding, extension, renewal or replacement.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">&#147;Person&#148; means any individual,
corporation, partnership, business trust, 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">
<FONT size="2">&#147;Preferred Stock&#148; means any Equity
Interest with preferential right of payment of dividends or upon
liquidation, dissolution, or winding up.
</FONT>

<P align="left">
<FONT size="2">&#147;Quarterly Base Dividend Level&#148; means,
for any fiscal quarter, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the
Company&#146;s Excess Cash for the 12-month period ending on the
last day of the Company&#146;s then most recently ended fiscal
quarter for which internal financial statements are available at
the time such dividend is declared and paid divided by
four&nbsp;(4).
</FONT>

<P align="left">
<FONT size="2">&#147;Representative&#148; means the trustee,
agent or representative (if any) for an issue of Senior
Indebtedness.
</FONT>

<P align="left">
<FONT size="2">&#147;Restricted Investment&#148; means an
Investment other than a Permitted Investment.
</FONT>

<P align="left">
<FONT size="2">&#147;Restricted Subsidiary&#148; means any
Subsidiary of the Company other than an Unrestricted Subsidiary.
</FONT>

<P align="left">
<FONT size="2">&#147;Sale/Leaseback Transaction&#148; means an
arrangement relating to property now owned or hereafter 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 such Restricted Subsidiary leases it from such
Person, other than leases between the Company and a Wholly Owned
Subsidiary or between Wholly Owned Subsidiaries.
</FONT>

<P align="left">
<FONT size="2">&#147;Secured Indebtedness&#148; means any
Indebtedness of the Company or any Subsidiary secured by a Lien.
</FONT>

<P align="left">
<FONT size="2">&#147;Securities Offering&#148; means any public
or private sale of IDSs or common stock or Preferred Stock of
the Company (other than Disqualified Stock), other than
(i)&nbsp;public offerings with respect to IDSs or the
Company&#146;s Common Stock registered on Form&nbsp;S-8 and
(ii)&nbsp;any such public or private sale that constitutes an
Excluded Contribution.
</FONT>

<P align="left">
<FONT size="2">&#147;S&#38;P&#148; means Standard and
Poor&#146;s Ratings Group.
</FONT>

<P align="left">
<FONT size="2">&#147;Senior Credit Documents&#148; means the
collective reference to the Credit Agreement, the notes issued
pursuant thereto and the guarantees thereof, and the collateral
documents relating thereto.
</FONT>

<P align="left">
<FONT size="2">&#147;Senior Lender Indebtedness&#148; means any
and all amounts payable under or in respect of the Credit
Facilities, the Senior Credit Documents with respect thereto and
any Refinancing Indebtedness with respect thereto, as amended
from time to time, including principal, premium (if any),
interest (including interest accruing on or after the filing of
any petition in bankruptcy or for reorganization relating to the
Company or any Guarantor, as applicable, whether or not a claim
for post-filing interest is allowed in such proceedings), fees,
charges, expenses, reimbursement obligations, guarantees and all
other amounts payable thereunder or in respect thereof.
</FONT>

<P align="left">
<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">
<FONT size="2">&#147;Similar Business&#148; means a business,
the majority of whose revenues are derived from sale of goods or
provision of services reasonably related, complimentary or
ancillary to the sale of laundry equipment or any reasonable
extension thereof.
</FONT>

<P align="left">
<FONT size="2">&#147;Specified Cash Contributions&#148; means
the aggregate amount of cash contributions (other than Excluded
Contributions) made to the capital of the Company which are
designated as &#147;Specified Cash Contributions&#148; pursuant
to an Officers&#146; Certificate.
</FONT>

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</FONT>

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<P align="left">
<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 beyond the control
of the issuer unless such contingency has occurred).
</FONT>

<P align="left">
<FONT size="2">&#147;Subordinated Indebtedness&#148; means, any
Indebtedness of the Company or any Guarantor, the instrument
under which such Indebtedness is incurred expressly provides
that it is subordinated in right of payment to the Notes or any
Guarantee.
</FONT>

<P align="left">
<FONT size="2">&#147;Subsidiary&#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">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any corporation,
    association or other business entity (other than a partnership,
    joint venture or limited liability company) of which more than
    50% of the total voting power of shares of Capital Stock
    entitled (without regard to the occurrence of any contingency)
    to vote in the election of directors, managers or trustees
    thereof is at the time of determination owned or controlled,
    directly or indirectly, by such Person or one or more of the
    other Subsidiaries of that Person or a combination
    thereof;&nbsp;and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any
    partnership, joint venture or limited liability company of which
    (x)&nbsp;more than 50% of the capital accounts, distribution
    rights, total equity and voting interests or general and limited
    partnership interests, as applicable, are owned or controlled,
    directly or indirectly, by such Person or one or more of the
    other Subsidiaries of that Person or a combination thereof,
    whether in the form of membership, general, special or limited
    partnership interests or otherwise and (y)&nbsp;such Person or
    any Wholly Owned Restricted Subsidiary of such Person is a
    controlling general partner or otherwise controls such entity.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">&#147;Total Assets&#148; means the total
consolidated assets of the Company and its Restricted
Subsidiaries, as shown on the most recent balance sheet of the
Company.
</FONT>

<P align="left">
<FONT size="2">&#147;Trustee&#148; means the party named as such
in the Indenture until a successor replaces it and, thereafter,
means the successor, and if at any time there is more than one
such party, &#147;Trustee&#148; as used with respect to the
securities of any series shall mean the trustee with respect to
securities of that series.
</FONT>

<P align="left">
<FONT size="2">&#147;Trust Officer&#148; means (i)&nbsp;any
officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president,
assistant secretary, assistant treasurer, trust officer or any
other officer of the Trustee who customarily performs functions
similar to those performed by the Persons who at the time shall
be such officers, respectively, or to whom any corporate trust
matter is referred because of such person&#146;s knowledge of
and familiarity with the particular subject and (ii)&nbsp;who
shall have direct responsibility for the administration of the
Indenture.
</FONT>

<P align="left">
<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">
    <FONT size="2">(i)&nbsp;&nbsp;&nbsp;Alliance Laundry Equipment
    Receivables 2002 LLC;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(ii)&nbsp;&nbsp;&nbsp;Alliance Laundry Equipment
    Receivables Trust 2002-A;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any Subsidiary
    of the Company that at the time of determination shall be
    designated an Unrestricted Subsidiary by the Board of Directors
    in the manner provided below;&nbsp;and
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(iv)&nbsp;&nbsp;any Subsidiary of an Unrestricted
    Subsidiary.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">The Board of Directors may designate any
Subsidiary of the Company (including any newly acquired or newly
formed Subsidiary of the Company) to be an Unrestricted
Subsidiary unless such Subsidiary or any of its Subsidiaries
owns any Equity Interests or Indebtedness of, or owns 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 the Subsidiary to be so
designated and its Subsidiaries do not at the time of
designation have and do not thereafter Incur any Indebtedness
pursuant to which the lender has recourse to any of the assets
of the Company or any of its Restricted Subsidiaries;
</FONT>

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<DIV align="left">
<FONT size="2">provided further, however, that either
(a)&nbsp;the Subsidiary to be so designated has total
consolidated assets of $1,000 or less or (b)&nbsp;if such
Subsidiary has consolidated assets greater than $1,000, then
such designation would be permitted under the covenant entitled
&#147;&#151;Limitation on Restricted Payments.&#148;
</FONT>
</DIV>

<P align="left">
<FONT size="2">The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided,
however, that immediately after giving effect to such
designation (x) (1)&nbsp;the Company could Incur $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test described under &#147;&#151;Limitations on Incurrence
of Indebtedness and Issuance of Disqualified Stock and Preferred
Stock&#148; or (2)&nbsp;the Fixed Charge Coverage Ratio for the
Company and its Restricted Subsidiaries would be greater than
such ratio for the Company and its Restricted Subsidiaries
immediately prior to such designation, in each case on a pro
forma basis taking into account such designation and (y)&nbsp;no
Default shall have occurred and be continuing. Any such
designation by the Board of Directors shall be evidenced to the
Trustee by promptly filing with the Trustee a copy of the
resolution of the Board of Directors giving effect to such
designation and an Officers&#146; Certificate certifying that
such designation complied with the foregoing provisions.
</FONT>

<P align="left">
<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 or
redeemable at the issuer&#146;s option.
</FONT>

<P align="left">
<FONT size="2">&#147;Voting Stock&#148; of any Person as of any
date means the Capital Stock of such Person that is at the time
entitled to vote in the election of the Board of Directors of
such Person.
</FONT>

<P align="left">
<FONT size="2">&#147;Weighted Average Life to Maturity&#148;
means, when applied to any Indebtedness or Disqualified Stock,
as the case may be, at any date, the quotient obtained by
dividing (i)&nbsp;the sum of the products of the number of years
from the date of determination to the date of each successive
scheduled principal payment of such Indebtedness or redemption
or similar payment with respect to such Disqualified Stock
multiplied by the amount of such payment, by (ii)&nbsp;the sum
of all such payments.
</FONT>

<P align="left">
<FONT size="2">&#147;Wholly Owned Restricted Subsidiary&#148; is
any Wholly Owned Subsidiary that is a Restricted Subsidiary.
</FONT>

<P align="left">
<FONT size="2">&#147;Wholly Owned Subsidiary&#148; of any Person
means a Subsidiary of such Person 100% of the outstanding
Capital Stock or other ownership interests of which (other than
directors&#146; qualifying shares) shall at the time be owned by
such Person and/or by one or more Wholly Owned Subsidiaries of
such Person.
</FONT>

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</FONT>

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<DIV align="left">
<A name='118'></A>
</DIV>

<!-- link1 "IDSs Eligible For Future Sale" -->

<P align="center">
<B>IDSs Eligible For Future Sale</B>

<P align="left">
<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 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, we will
have &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs
outstanding, in respect
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of our Class&nbsp;A common stock in the aggregate and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
aggregate principal amount of our senior subordinated notes. All
of these IDSs and securities represented thereby will be freely
tradable without restriction or further registration under the
Securities Act, unless the IDSs or securities represented
thereby are owned by &#147;affiliates&#148; as that term is
defined in Rule&nbsp;144 under the Securities Act of 1933. Upon
completion of this offering, the existing equity investors will
own as part of the IDSs, shares of Class&nbsp;A common stock
representing an
aggregate &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
ownership interest in us after the offering,
or &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
if the underwriters&#146; over-allotment option is exercised in
full. In addition, our existing equity investors
hold &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;shares
of preferred stock, which following the second anniversary of
the consummation of this offering may be exchanged, subject to
certain conditions, for IDSs in connection with the sale of such
Class&nbsp;B common stock together with preferred stock. The
existing equity investors will have demand and piggyback
registration rights for their shares of Class&nbsp;A common
stock which may be sold in the form of IDSs as well as for their
shares of Class&nbsp;B common stock, preferred stock and the
IDSs for which the Class&nbsp;B common stock together with the
preferred stock may be exchanged. In addition, certain members
of management will have piggyback registration rights for their
IDSs. See &#147;Related Party Transactions&#151;Registration
Rights.&#148; Collectively our existing equity holders will be
issued
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>IDSs
in this offering. Registration rights may not be exercised
during the lock-up period.
</FONT>

<P align="left">
<FONT size="2">We may issue shares of our common stock or senior
subordinated notes, which may 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 or senior subordinated notes, which may be in the form of
IDSs, or other securities that we may issue may in turn be
significant. In addition, we may also grant registration rights
covering those shares of our common stock or senior subordinated
notes and IDSs, if applicable, or other securities in connection
with any such acquisitions and investments.
</FONT>

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<DIV align="left">
<A name='119'></A>
</DIV>

<!-- link1 "Material United States Federal Income Tax Consequences" -->

<P align="center">
<B>Material United States Federal Income Tax Consequences</B>

<P align="left">
<FONT size="2">The following discussion, insofar as it relates
to matters of United States federal income tax law (and, to the
extent specified, United States federal estate tax law) or legal
conclusions with respect thereto, constitutes the opinion of our
counsel, Kirkland&nbsp;&#38; Ellis LLP, as to the material
United States federal income tax considerations to a United
States holder or, as the case may be, a non-United States
holder, in each case as defined below, arising from the
purchase, ownership and disposition of IDSs, senior subordinated
notes or Class&nbsp;A common stock. This discussion is based on
the provisions of the United States Internal Revenue Code of
1986, as amended (the &#147;Code&#148;), the Treasury
regulations promulgated thereunder, judicial authority,
published administrative positions of the Internal Revenue
Service (the &#147;IRS&#148;) and other applicable authorities,
all as in effect on the date of this prospectus, and all of
which are subject to change or differing interpretations,
possibly on a retroactive basis. No statutory, administrative or
judicial authority directly addresses the treatment of IDSs or
instruments similar to IDSs for United States federal income tax
purposes, and we have not sought any ruling from the IRS with
respect to the statements made and the conclusions reached in
the following discussion. 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 discussed
below could adversely affect the amount, timing and character of
income and gain realized by a holder in respect of an investment
in IDSs, senior subordinated notes or Class&nbsp;A common stock.
In the case of non-United States holders, a different treatment
could subject such holders to the same United States federal
withholding tax or estate tax consequences with respect to the
senior subordinated notes as they will be subject to with
respect to the Class&nbsp;A common stock. Payments to non-United
States holders will not be grossed up for or in respect of any
such tax. In addition, a different treatment could result in our
losing all or part of the deduction for interest that we pay on
the senior subordinated notes.
</FONT>

<P align="left">
<FONT size="2">This discussion deals only with holders that
purchase IDSs or senior subordinated notes at their original
issuance at their original issue price and that will hold IDSs,
senior subordinated notes and Class&nbsp;A common stock as
&#147;capital assets&#148; (within the meaning of
Section&nbsp;1221 of the Code). This summary does not purport to
deal with all aspects of United States federal income taxation
that might be relevant to particular holders, in light of their
personal investment circumstances or status, such as banks,
insurance companies, certain other financial institutions,
tax-exempt organizations, S&nbsp;corporations, partnerships or
other pass-through entities, real estate investment trusts,
regulated investment companies, dealers or traders in securities
or currencies, and taxpayers subject to the alternative minimum
tax. This discussion also does not address IDSs, senior
subordinated notes or Class&nbsp;A common stock held as part of
a hedge, straddle, integrated, synthetic security or conversion
transaction, or situations in which the &#147;functional
currency&#148; of a United States holder (as defined below) is
not the United States dollar. Moreover, except to the extent
specified with respect to United States federal estate tax, the
effect of any applicable United States federal estate or gift,
state, local or non-United States tax laws is not discussed.
</FONT>

<P align="left">
<FONT size="2">THE FOLLOWING DISCUSSION IS FOR INFORMATIONAL
PURPOSES ONLY AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING
AND ADVICE. INVESTORS CONSIDERING THE PURCHASE OF IDSs, SENIOR
SUBORDINATED NOTES OR CLASS&nbsp;A COMMON STOCK SHOULD CONSULT
THEIR OWN TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE
UNITED STATES FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR
SITUATIONS, AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE
ESTATE OR GIFT TAX LAWS OR THE LAWS OF ANY STATE, LOCAL OR
NON-UNITED STATES TAXING JURISDICTION OR UNDER ANY APPLICABLE
TAX TREATY.
</FONT>

<P align="left">
<FONT size="2">The term &#147;United States holder&#148; means a
holder of IDSs, senior subordinated notes or Class&nbsp;A common
stock that is, for United States federal income tax purposes:
</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">
    <FONT size="2">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An individual
    who is a citizen or resident of the United States;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a corporation,
    or other entity taxable as a corporation for United States
    federal income tax purposes, created or organized under the laws
    of the United States or of any political subdivision
    thereof;&nbsp;or
    </FONT></TD>
</TR>

</TABLE>

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</FONT>

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<P>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;an estate or
    trust, the income of which is subject to United States federal
    income taxation regardless of its source.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">The term &#147;non-United States holder&#148;
means a holder of IDSs, senior subordinated notes or
Class&nbsp;A common stock that is, for United States federal
income tax purposes:
</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">
    <FONT size="2">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a nonresident
    alien individual;
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a foreign
    corporation;&nbsp;or
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a foreign estate
    or trust.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">In the case of a holder of IDSs, senior
subordinated notes or Class A common stock that is classified as
a partnership for United States federal income tax purposes, the
tax treatment of the IDSs, senior subordinated notes or Class A
common stock to a partner of the partnership generally will
depend upon the tax 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, then
you should consult your own tax advisors.
</FONT>

<P align="left">
<B><FONT size="2">United States Holders</FONT></B>

<DIV>&nbsp;</DIV>

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

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><FONT size="2">IDSs</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>
    <I><FONT size="2">Allocation of Purchase Price</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Your acquisition of an IDS should be treated as
an acquisition of separate securities, the share of our Class A
common stock and the senior subordinated note represented by the
IDS, rather than as a purchase of a single integrated security,
and, by purchasing the IDS, you will agree to that treatment. If
that treatment is not respected, then the acquisition of IDSs
may be treated as an acquisition only of our stock, in which
case the senior subordinated notes would be treated in effect as
stock rather than as debt for United States federal income tax
purposes. See &#147;&#151;Senior Subordinated
Notes&#151;Characterization.&#148; The remainder of this
discussion assumes that the acquisition of IDSs will be treated
as an acquisition of shares of our Class A common stock and the
senior subordinated notes, rather than as a purchase of a single
integrated security.
</FONT>

<P align="left">
<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 comprising the IDS in proportion to their
respective fair market values at the time of purchase. This
allocation will establish your initial tax basis in each of the
share of Class&nbsp;A common stock and the senior subordinated
note. We will report the initial fair market value of each share
of Class A common stock as
$<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>
and the initial fair market value of each
$<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>
principal amount of senior subordinated notes as
$<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>,
and by purchasing an IDS, you will agree to that allocation. If
this allocation is not respected by the IRS or the courts, then
it is possible that the senior subordinated notes will be
treated as having been issued with original issue discount or
amortizable bond premium.<B> </B>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
senior subordinated notes. The remainder of this discussion
assumes that the allocation of the purchase price of the IDSs
described above will be respected.
</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>
    <I><FONT size="2">Separation and Recombination</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">If you separate your IDSs into the shares of
Class&nbsp;A common stock and senior subordinated notes
represented thereby or recombine the applicable number of shares
of Class&nbsp;A common stock and principal amount of senior
subordinated notes to form IDSs, then you will not recognize
gain or loss upon the separation or recombination. You will
continue to take into account items of income or deduction
otherwise includible or deductible with respect to the shares of
Class A common stock and the senior subordinated notes, and your
tax basis in and holding period with respect to the shares of
Class A common stock and the senior subordinated notes will not
be affected by the separation or recombination.
</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><FONT size="2">Senior Subordinated Notes</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>
    <I><FONT size="2">Characterization</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Our counsel, Kirkland&nbsp;&#38; Ellis LLP, is of
the opinion that the senior subordinated notes should be treated
as separate from the Class&nbsp;A common stock and as debt for
United States federal income tax purposes, and based upon that
opinion, we believe that the senior subordinated notes should be
so treated. In addition, the lead underwriters have received an
opinion from their counsel, Skadden, Arps, Slate,
Meagher&nbsp;&#38; Flom LLP, to the effect that the senior
subordinated notes should be treated as separate from the Class
A common stock and as debt for United States federal income tax
purposes. These opinions are based on certain representations
and determinations, which are discussed in more detail in the
following paragraphs. These opinions are not binding on the IRS
or the courts, which could disagree. We will treat the senior
subordinated notes as debt for United States federal income tax
purposes, and, by acquiring senior subordinated notes, directly
or in the form of an IDS, you agree likewise to treat the senior
subordinated notes as our indebtedness for all purposes.
</FONT>

<P align="left">
<FONT size="2">The determination as to whether an instrument is
treated as debt or as equity for United States federal income
tax purposes is based on all of the facts and circumstances.
There is no clear statutory definition of debt and the
characterization of an instrument as debt or as equity is
governed by principles developed in the case law, which analyzes
numerous factors that are intended to identify the formal
characteristics of, and the economic substance of, the
holder&#146;s interest in the issuer. Our determination that the
senior subordinated notes should be treated as separate from the
Class&nbsp;A common stock as debt for United States federal
income tax purposes, and the opinions of counsel to this effect
referred to above, rely upon certain representations and
determinations made by us, the lead underwriters and independent
appraisal firms, including representations and determinations
substantially to the effect that:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">after 45 days from the closing of this offering,
    an investor holding IDSs may separate the Class&nbsp;A common
    stock and senior subordinated notes comprising the IDSs without
    material market impediment;
    </FONT></TD>
</TR>

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

<TR>
    <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 term, interest rate and other material
    provisions of the senior subordinated notes including, <I>inter
    alia</I> restrictions on incurrence of debt and payment of
    dividends, are commercially reasonable and are substantially
    similar to those terms to which an unrelated third party lender
    not otherwise owning equity in the Company, bargaining at
    arm&#146;s length, would reasonably agree;
    </FONT></TD>
</TR>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">taking this offering and our reorganization into
    account, on a pro forma basis, the aggregate amount of our
    indebtedness in relation to the aggregate fair market value of
    our equity is commercially reasonable under the circumstances
    and is comparable to similarly situated corporate bond issuers;
    </FONT></TD>
</TR>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">taking this offering and our reorganization into
    account, on a pro forma basis, the ratio of (i)&nbsp;the sum of
    all of our outstanding indebtedness to (ii)&nbsp;the fair market
    value of our equity does not exceed
    approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to
    1;&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">based on our detailed financial forecasts (and
    assuming without verifying that those forecasts are correct),
    the Company will be able to repay the principal amount of the
    senior subordinated notes at their maturity and it is likely
    that such repayment would be made with accumulated cash and/or
    by refinancing with short term (five years or less)
    unsubordinated debt, or a combination thereof.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">In light of the representations and
determinations described above and their relevance to several of
the factors analyzed in the case law, and taking into account
the facts and circumstances relating to the issuance of the
senior subordinated notes (including the separate issuance of
senior subordinated notes in this offering), we (and our
counsel) are of the view that the senior subordinated notes
should be treated as separate from the Class&nbsp;A Common Stock
and as debt for United States federal income tax purposes. As
indicated above, there is no authority that directly addresses
the tax treatment of instruments with terms substantially
similar to the senior subordinated notes or offered under
circumstances such as this offering (that is, senior
subordinated notes offered as a unit with 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
</FONT>

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<DIV align="left">
<FONT size="2">treated as debt for United States federal income
tax purposes. The consequences to United States holders and
non-United States holders described below assume that the senior
subordinated notes will be respected as debt. However, no ruling
on this issue has been requested from the IRS and, thus, there
can be no assurance that the classification of the senior
subordinated notes as debt will not be challenged by the IRS or
will be sustained if challenged.
</FONT>
</DIV>

<P align="left">
<FONT size="2">If the senior subordinated notes were treated as
equity rather than as debt for United States federal income tax
purposes, then stated interest paid on the senior subordinated
notes generally would be treated as a dividend to the extent
paid out of our current or accumulated earnings and profits, as
determined under United States federal income tax principles,
but those dividends likely would not qualify for the special 15%
rate described below. We would not be permitted to deduct
interest on the senior subordinated notes for United States
federal income tax purposes. In addition, as discussed below
under &#147;&#151;Non-United States Holders&#151;Class&nbsp;A
Common Stock,&#148; non-United States holders could be subject
to withholding or estate taxes with respect to the senior
subordinated notes in the same manner as they will be with
respect to the Class A common stock. Our inability to deduct
interest on the senior subordinated notes could materially
increase our taxable income and, thus, our United States federal
income tax liability. This would reduce our after-tax cash flow
and could materially and adversely impact our ability to make
interest and dividend payments on the senior subordinated notes
and the Class A common stock.
</FONT>

<P align="left">
<FONT size="2">In addition, there can be no assurance that the
IRS will not challenge the determination that the interest rate
on the senior subordinated notes represents an arm&#146;s length
interest rate. If the IRS were successful in such a challenge,
then any excess of the interest paid on the senior subordinated
notes over the deemed arm&#146;s length amount would not be
deductible by us and could be recharacterized as a dividend
payment instead of an interest payment for United States federal
income tax purposes. In such case, our taxable income and, thus,
our United States federal income tax liability could be
materially increased. In addition, as discussed below under
&#147;&#151;Non-United States Holders&#151;Class A Common
Stock,&#148; non-United States holders could be subject to
withholding taxes with respect to the excess amount paid on the
senior subordinated notes in the same manner as they will be
with respect to dividends paid on the Class&nbsp;A common stock.
If the interest rate paid on the senior subordinated notes were
determined to be less than the arm&#146;s length rate, then the
senior subordinated notes could be treated as issued with
original issue discount, which original issue discount you would
be required to include in income over the term of the senior
subordinated notes.
</FONT>

<P align="left">
<I><FONT size="2">Payments of Interest; Deferral of
Interest</FONT></I>

<P align="left">
<FONT size="2">Subject to the discussion of deferred interest
immediately below, stated interest on the senior subordinated
notes will be taxable to you as ordinary income, at the time it
is paid or accrued in accordance with your method of accounting
for United States federal income tax purposes.
</FONT>

<P align="left">
<FONT size="2">Under applicable Treasury regulations, a
&#147;remote&#148; contingency that stated interest will not be
timely paid will be ignored in determining whether a debt
instrument is issued with original issue discount, referred to
as OID. Although there is no authority that directly describes
when a contingency such as the interest deferral option
described in &#147;Description of the Senior Subordinated
Notes&#151;Terms of the Notes&#151;Interest Deferral&#148;
should be considered &#147;remote&#148;, based on our financial
forecasts, we believe that the likelihood of deferral of
interest payments on the senior subordinated notes is remote
within the meaning of the Treasury regulations relating to OID.
Based on the foregoing, although the matter is not free from
doubt because of the lack of direct authority, the option to
defer interest should not cause the senior subordinated notes to
be considered to be issued with OID at the time of their
original issuance.
</FONT>

<P align="left">
<FONT size="2">Under the Treasury regulations, if the option to
defer any payment of interest on the senior subordinated notes
were determined not to be a &#147;remote&#148; contingency, or
if, as discussed above, the interest rate on the senior
subordinated note was determined to be less than the arm&#146;s
length interest rate by more than a<I> de&nbsp;minimus</I>
amount, or if any payment of interest actually were deferred,
then the senior subordinated notes would be treated as issued
with OID at the time of issuance or at the time of such
occurrence, as
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">the case may be. At such time, all stated
interest on the senior subordinated notes thereafter would be
treated as OID as long as the senior subordinated notes remained
outstanding. In such event:
</FONT>
</DIV>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">you would be required to include the yield on the
    senior subordinated notes in income as OID on an economic
    accrual basis over the term of the senior subordinated notes,
    possibly before the receipt of the cash attributable to the OID,
    and without regard to your overall method of tax accounting;
    </FONT></TD>
</TR>

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

<TR>
    <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 payments of stated interest would not be
    reported as taxable income;
    </FONT></TD>
</TR>

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

<TR>
    <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 amount of OID included in your gross income
    (whether or not during a deferral period) with respect to the
    senior subordinated notes would increase your tax basis in the
    senior subordinated notes;&nbsp;and
    </FONT></TD>
</TR>

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

<TR>
    <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 payments in respect of such accrued
    OID would reduce your tax basis in the senior subordinated notes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Consequently, during a deferral period, a United
States holder would be required to continue to include OID in
gross income as it accrued, even though we would not make any
actual cash payments on the senior subordinated notes.
</FONT>

<P align="left">
<FONT size="2">No rulings or other interpretations have been
issued by the IRS that address the meaning of the term
&#147;remote&#148; as used in the Treasury regulations relating
to OID, and it is possible that the IRS could take a position
contrary to our position.
</FONT>

<P align="left">
<I><FONT size="2">Sale, Exchange or Retirement</FONT></I>

<P align="left">
<FONT size="2">Upon the sale, exchange, retirement or other
taxable disposition of an IDS, you will be treated as having
sold, exchanged, retired or disposed of the senior subordinated
note that constitutes a portion of the IDS. Upon the sale,
exchange, retirement or other taxable disposition of a senior
subordinated note, you will recognize gain or loss in an amount
equal to the difference between the portion of the proceeds
allocable to, or received for, the senior subordinated note
(less amounts received in respect of accrued and unpaid
interest, which will be treated as a payment of interest for
United States federal income tax purposes) and your adjusted tax
basis in the senior subordinated note on your purchase price of
the note, as the case may be. As described above under
&#147;&#151;United States Holders&#151;IDSs&#151;Allocation of
Purchase Price,&#148; your tax basis in the senior subordinated
note generally will be the portion of the purchase price of your
IDS allocable to the senior subordinated note. Such gain or loss
will be capital gain or loss and will be long-term capital gain
or loss if you have held the IDSs for more than one year. The
deductibility of capital losses is subject to limitations.
</FONT>

<P align="left">
<I><FONT size="2">Additional Issuances</FONT></I>

<P align="left">
<FONT size="2">The indenture governing the senior subordinated
notes will permit us, from time to time, to issue additional
senior subordinated notes having terms that are substantially
identical to those of the senior subordinated notes offered
hereby. Such subsequently issued senior subordinated notes may
be issued with OID (for example, as a result of changes in
prevailing interest rates) if they are issued at a discount to
their face value. 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) are unclear. The indenture
governing the senior subordinated notes and the agreements with
DTC will provide that, in the event that there is a subsequent
issuance of senior subordinated notes having terms substantially
identical to the senior subordinated notes offered hereby, each
holder of senior subordinated notes or IDSs, as the case may be,
agrees that 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 each such subsequent issuance and
exchange, each holder of subsequently issued senior subordinated
notes, held either as part of IDSs or separately, and each
holder of existing senior subordinated notes or IDSs, as the
case may be, will own an inseparable unit composed of notes of
each separate issuance in the same proportion as each other
holder. Because a subsequent issuance will affect the senior
subordinated notes in the same manner, regardless of whether
those senior subordinated notes are held as part of IDSs or
separately, the combination of senior
</FONT>

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<DIV align="left">
<FONT size="2">subordinated notes and shares of Class&nbsp;A
common stock to form IDSs, or the separation of IDSs, should not
affect your tax treatment.
</FONT>
</DIV>

<P align="left">
<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. However, under
applicable law, it is possible that the holders of subsequently
issued senior subordinated notes (to the extent issued with OID)
will not be entitled to a claim for the portion of their
principal amount that represents unaccrued OID in the event of
an acceleration of the senior subordinated notes or a bankruptcy
proceeding occurring prior to the maturity of the senior
subordinated notes. 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 United States 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 United
States 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">
<FONT size="2">If the IRS successfully asserted that an
automatic exchange following a subsequent issuance of senior
subordinated notes is a taxable exchange, then an exchanging
holder generally would 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;Senior Subordinated
Notes&#151;Sale, Exchange or Retirement.&#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 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">
<FONT size="2">Regardless of whether the exchange is treated as
a taxable event, such exchange may result in an increase in the
amount of OID, if any, that you are required to accrue with
respect to 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 senior
subordinated notes or IDSs, as the case may be, 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 and exchange 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 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 will 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.
</FONT>

<P align="left">
<FONT size="2">It is possible that senior subordinated notes
that 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
</FONT>

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</FONT>

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<DIV align="left">
<FONT size="2">&#147;applicable high yield discount
obligations.&#148; If any senior subordinated notes were so
classified, then a portion of the OID on those 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>
</DIV>

<P align="left">
<FONT size="2">Due to the complexity and uncertainty surrounding
the United States 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>

<P align="left">
<B><FONT size="2">Class A Common Stock</FONT></B>

<P align="left">
<I><FONT size="2">Dividends</FONT></I>

<P align="left">
<FONT size="2">The gross amount of dividends paid to you on our
Class&nbsp;A common stock will be treated as dividend income to
you, to the extent paid out of our current or accumulated
earnings and profits (as determined under United States federal
income tax principles). To the extent, if any, that the amounts
of dividends paid to you on a share of our Class&nbsp;A common
stock exceed our current and accumulated earnings and profits,
the excess will be treated first as a tax-free return of your
tax basis in the shares of Class&nbsp;A common stock and
thereafter as capital gain. Pursuant to recently enacted
legislation, if you are an individual, then dividends that we
pay to you through 2008 will be subject to tax at long-term
capital gain rates (up to 15%), provided that certain holding
period and other requirements are satisfied.
</FONT>

<P align="left">
<I><FONT size="2">Sale or Exchange</FONT></I>

<P align="left">
<FONT size="2">Upon the sale, exchange or other taxable
disposition of an IDS, you will be treated as having sold,
exchanged or disposed of the share of Class&nbsp;A common stock
constituting a portion of the IDS. Upon the sale, exchange or
other taxable disposition of a share of our Class&nbsp;A common
stock (other than, in some circumstances, a sale of shares to
us), you will recognize gain or loss in an amount equal to the
difference between the portion of the proceeds allocable to your
share of Class&nbsp;A common stock and your tax basis in the
share of Class&nbsp;A common stock. As described above under
&#147;&#151;United States Holders&#151;IDSs&#151;Allocation of
Purchase Price,&#148; your tax basis in the share of
Class&nbsp;A common stock generally will be the portion of the
purchase price of your IDS allocable to the share of
Class&nbsp;A common stock. Such gain or loss will be capital
gain or loss, and will be long-term capital gain or loss if you
have held the Class&nbsp;A common stock for more than one year.
The deductibility of capital losses is subject to limitations.
</FONT>

<P align="left">
<B><FONT size="2">Information Reporting and Backup Withholding
Tax</FONT></B>

<P align="left">
<FONT size="2">In general, we, our paying agents and certain
other intermediaries must report certain information to the IRS
with respect to payments of principal and interest on the senior
subordinated notes, payments of dividends on the Class&nbsp;A
common stock, and payments of the proceeds of the sale of senior
subordinated notes, Class&nbsp;A common stock or IDSs to certain
non-corporate United States holders. The payor (which may be us
or an intermediary) will be required to impose backup
withholding tax, currently at a rate of 28%, if (i)&nbsp;the
payee fails to furnish a taxpayer identification number
(&#147;TIN&#148;) to the payor or otherwise to establish an
exemption from backup withholding tax, (ii)&nbsp;the IRS
notifies the payor that the TIN furnished by the payee is
incorrect, (iii)&nbsp;there has been a notified payee
underreporting described in Section&nbsp;3406(c) of the Code or
(iv)&nbsp;the payee has not certified under penalties of perjury
that it has furnished a correct TIN and that the IRS has not
notified the payee that it is subject to backup withholding tax
under the Code. Any amounts withheld under the backup
withholding tax rules from a payment to a United States holder
will be allowed as a credit against that holder&#146;s United
States federal income tax liability and may entitle the holder
to a refund, provided that 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">Non-United States Holders</FONT></B>

<P align="left">
<FONT size="2">The following discussion applies only to
non-United States holders, and assumes that no item of income,
gain, deduction or loss derived by the non-United States holder
in respect of the senior subordinated notes, Class&nbsp;A common
stock or IDSs at any time is effectively connected with the
conduct of a United States trade or business. Special rules may
apply to certain non-United States holders, such as:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">United States expatriates,
    </FONT></TD>
</TR>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">controlled foreign corporations,
    </FONT></TD>
</TR>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">passive foreign investment companies,
    </FONT></TD>
</TR>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">foreign personal holding companies,
    </FONT></TD>
</TR>

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

<TR>
    <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
    United States federal income tax,
    </FONT></TD>
</TR>

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

<TR>
    <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,&nbsp;and
    </FONT></TD>
</TR>

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

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">non-United States holders that are engaged in the
    conduct of a United States trade or business.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Such non-United States holders should consult
their own tax advisors to determine the United States federal,
state, local and other tax consequences that may be relevant to
them.
</FONT>

<P align="left">
<B><FONT size="2">Senior Subordinated Notes</FONT></B>

<P align="left">
<I><FONT size="2">Characterization</FONT></I>

<P align="left">
<FONT size="2">As discussed above under &#147;&#151;United
States Holders&#151;Senior Subordinated
Notes&#151;Characterization,&#148; we believe that the senior
subordinated notes should be treated as separate from the
Class&nbsp;A common stock and as debt for United States federal
income tax purposes. However, no ruling on this issue has been
requested from the IRS and thus there can be no assurance that
this position will be sustained if challenged by the IRS. If the
senior subordinated notes were treated as equity rather than as
debt for United States federal income tax purposes, then the
senior subordinated notes would be treated in the same manner as
shares of Class&nbsp;A common stock are treated, as described
below under &#147;&#151;Non-United States
Holders&#151;Class&nbsp;A Common Stock&#151;Dividends,&#148;
and, in particular, payments of interest on the senior
subordinated notes would be subject to United States federal
withholding tax at rates up to 30%. Payments to non-United
States holders will not be grossed- up on account of any such
taxes. The remainder of this discussion assumes that the
characterization of the senior subordinated notes as debt for
United States federal income tax purposes will be respected.
</FONT>

<P align="left">
<I><FONT size="2">Stated Interest</FONT></I>

<P align="left">
<FONT size="2">Generally, subject to the discussion of backup
withholding tax below, interest paid on the senior subordinated
notes to a non-United States holder will be exempt from United
States withholding tax under the &#147;portfolio interest
exemption&#148;; provided that (i)&nbsp;the holder does not
actually or constructively own 10% or more of the combined
voting power of all classes of our stock entitled to vote,
(ii)&nbsp;the holder is not a controlled foreign corporation
related to us actually or constructively through stock
ownership, (iii)&nbsp;the holder is not a bank that acquired the
senior subordinated notes in consideration for an extension of
credit made pursuant to a loan agreement entered into in the
ordinary course of business and (iv)&nbsp;either (a)&nbsp;the
holder provides an applicable IRS Form&nbsp;W-8 (or a suitable
substitute form) signed under penalties of perjury that includes
its name and address and certifies as to its non-United States
status in compliance with applicable law and regulations or
(b)&nbsp;a securities clearing organization, bank or other
financial institution that holds customers&#146; securities in
the ordinary course of its trade or business holds the senior
subordinated notes and provides a statement to us or our agent
under penalties of perjury in which it certifies that an
applicable Form&nbsp;W-8 (or a suitable substitute) has been
received by it from the non-United States holder or qualifying
intermediary and furnishes a copy to us or our agent. The
statement requirement referred to in the preceding sentence may
be satisfied with other documentary evidence in the case of a
senior subordinated note held in an offshore account or through
certain foreign intermediaries.
</FONT>

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<P align="left">
<I><FONT size="2">Sale, Exchange or Retirement</FONT></I>

<P align="left">
<FONT size="2">Upon the sale, exchange, retirement or other
taxable disposition of an IDS, you will be treated as having
sold, exchanged, retired or disposed of the senior subordinated
note that constitutes a portion of the IDS. Any gain realized
upon the sale, exchange, retirement or other disposition of
senior subordinated notes generally will not be subject to
United States federal income tax, unless 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>

<P align="left">
<I><FONT size="2">United States Federal Estate Tax</FONT></I>

<P align="left">
<FONT size="2">Senior subordinated notes beneficially owned by
an individual who at the time of death is a non-United States
holder should not be subject to United States federal estate
tax, provided that any payment of interest to such individual on
the notes would be eligible for exemption from the United States
federal withholding tax under the rules described above under
&#147;&#151;Non-United States Holders&#151;Senior Subordinated
Notes&#151;Stated Interest&#148; without regard to the statement
requirement described therein.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class&nbsp;A
Common Stock</FONT></B>

<P align="left">
<I><FONT size="2">Dividends</FONT></I>

<P align="left">
<FONT size="2">Dividends paid to you generally will be subject
to withholding of United States federal income 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 for dividends (and to avoid backup withholding tax
as discussed below), you will be required to:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">complete the applicable IRS Form&nbsp;W-8 (or
    suitable substitute form) and certify, under penalties of
    perjury, that you are not a United States person,&nbsp;or
    </FONT></TD>
</TR>

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

<TR>
    <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 Class&nbsp;A common stock
    are held through certain foreign intermediaries, satisfy the
    relevant certification requirements of applicable Treasury
    regulations.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Special certification and other requirements
apply to certain non-United States holders that are entities
rather than individuals. If you are eligible for a reduced rate
of United States withholding tax pursuant to an income tax
treaty, you may obtain a refund of any excess amounts withheld
by filing an appropriate claim for refund with the IRS.
</FONT>

<P align="left">
<I><FONT size="2">Sale or Exchange</FONT></I>

<P align="left">
<FONT size="2">Upon the sale, exchange or other taxable
disposition of an IDS, you will be treated as having sold,
exchanged or disposed of the share of Class&nbsp;A common stock
constituting a portion of the IDS. You generally will not be
subject to United States 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="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></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, 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>
    <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 United States real property
    holding corporation for United States federal income tax
    purposes.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">We believe that we are not, and we do not
anticipate becoming, a United States real property holding
corporation for United States federal income tax purposes.
</FONT>

<DIV>&nbsp;</DIV>

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

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

<TR valign="top">
    <TD></TD>
    <TD>
    <I><FONT size="2">United States Federal Estate Tax</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Shares of our Class&nbsp;A common stock held by
an individual non-United States holder at the time of death will
be included in such holder&#146;s gross estate for United States
federal estate tax purposes, unless an applicable estate tax
treaty provides otherwise.
</FONT>

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</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><FONT size="2">Information Reporting and Backup Withholding
    Tax</FONT></B></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">The amount of interest 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, dividends and
withholding of tax 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. Backup
withholding tax may be required with respect to payments made by
us or any paying agent to you, unless the statement described in
&#147;Non-United States Holders&#151;Senior Subordinated
Notes&#151;Stated Interest&#148; has been received (and we or
the paying agent do not have actual knowledge or reason to know
that you are a United States person).
</FONT>

<P align="left">
<FONT size="2">Information reporting and, depending on the
circumstances, backup withholding tax will apply to the proceeds
of a sale of IDSs, senior subordinated notes or Class&nbsp;A
common stock within the United States or conducted through
United States-related financial intermediaries unless the
statement described in &#147;Non-United States
Holders&#151;Senior Subordinated Notes&#151;Stated
Interest&#148; has been received (and we or the paying agent do
not have actual knowledge or reason to know that you are a
United States person) or you otherwise establish an exemption.
Any amounts withheld under the backup withholding tax rules will
be allowed as a refund or a credit against your United States
federal income tax liability, provided that the required
information is furnished to the IRS.
</FONT>

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</FONT>

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<DIV align="left">
<A name='120'></A>
</DIV>

<!-- link1 "Certain ERISA Considerations" -->

<P align="center">
<B>Certain ERISA Considerations</B>

<P align="left">
<FONT size="2">The following is a summary of certain
considerations associated with the purchase of the IDSs by
employee benefit plans that are subject to Title&nbsp;I of the
U.S.&nbsp;Employee Retirement Income Security Act of 1974, as
amended (&#147;ERISA&#148;), plans, individual retirement
accounts and other arrangements that are subject to
Section&nbsp;4975 of the Code or provisions under any federal,
state, local, non-U.S.&nbsp;or other laws or regulations that
are similar to such provisions of the Code or ERISA
(collectively, &#147;Similar Laws&#148;), and entities whose
underlying assets are considered to include &#147;plan
assets&#148; of such plans, accounts and arrangements (each, a
&#147;Plan&#148;).
</FONT>

<P align="left">
<I><FONT size="2">General Fiduciary Matters</FONT></I>

<P align="left">
<FONT size="2">ERISA and the Code impose certain duties on
persons who are fiduciaries or other interested parties of a
Plan subject to Title&nbsp;I of ERISA or Section&nbsp;4975 of
the Code and prohibit certain transactions involving the assets
of a Plan and its fiduciaries or other interested parties. Under
ERISA and the Code, any person who exercises any discretionary
authority or control over the administration of such a Plan or
the management or disposition of the assets of such a Plan, or
who renders investment advice for a fee or other compensation to
such a Plan, is generally considered to be a fiduciary of the
Plan.
</FONT>

<P align="left">
<FONT size="2">In considering an investment in the IDSs or the
separate senior subordinated notes of a portion of the assets of
any Plan, a fiduciary should determine whether the investment is
in accordance with the documents and instruments governing the
Plan and the applicable provisions of ERISA, the Code or any
Similar Law relating to a fiduciary&#146;s duties to the Plan
including, without limitation, the prudence, diversification,
delegation of control and prohibited transaction provisions of
ERISA, the Code and any other applicable Similar Laws.
</FONT>

<P align="left">
<I><FONT size="2">Prohibited Transaction Issues</FONT></I>

<P align="left">
<FONT size="2">Section&nbsp;406 of ERISA and Section&nbsp;4975
of the Code prohibit ERISA Plans from engaging in specified
transactions involving plan assets with persons or entities who
are &#147;parties in interest,&#148; within the meaning of
Section&nbsp;406 of ERISA, or &#147;disqualified persons,&#148;
within the meaning of Section&nbsp;4975 of the Code, unless an
exemption is available. A party in interest or disqualified
person who engaged in a non-exempt prohibited transaction may be
subject to excise taxes and other penalties and liabilities
under ERISA and the Code. In addition, the fiduciary of the
ERISA Plan that engaged in such a non-exempt prohibited
transaction may be subject to penalties and liabilities under
ERISA and the Code.
</FONT>

<P align="left">
<FONT size="2">Whether or not our underlying assets are deemed
to include &#147;plan assets,&#148; as described below, the
acquisition and/or holding of the IDSs or the separate senior
subordinated notes by a Plan with respect to which we, the
underwriter, the trustee or the guarantor is considered a party
in interest or a disqualified person may constitute or result in
a direct or indirect prohibited transaction under
Section&nbsp;406 of ERISA and/or Section&nbsp;4975 of the Code,
unless the investment is acquired and is held in accordance with
an applicable statutory, class or individual prohibited
transaction exemption. In this regard, the U.S.&nbsp;Department
of Labor (the &#147;DOL&#148;) has issued prohibited transaction
class exemptions, or &#147;PTCEs,&#148; that may apply to the
acquisition and holding of the IDSs or the separate senior
subordinated notes. These class exemptions include, without
limitation, PTCE&nbsp;84-14 respecting transactions determined
by independent qualified professional asset managers,
PTCE&nbsp;90-1 respecting insurance company pooled separate
accounts, PTCE&nbsp;91-38 respecting bank collective investment
funds, PTCE&nbsp;95-60 respecting insurance company general
accounts and PTCE&nbsp;96-23 respecting transactions determined
by in-house asset managers, although there can be no assurance
that any or all of the conditions of any such exemptions will be
satisfied.
</FONT>

<P align="left">
<FONT size="2">Because of the foregoing, the IDSs or the
separate senior subordinated notes should not be purchased or
held by any person investing &#147;plan assets&#148; of any
Plan, unless such purchase and holding will not constitute a
non-exempt prohibited transaction under ERISA and the Code or
similar violation of any applicable Similar Laws.
</FONT>

<P align="center"><FONT size="2">150
</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>
    <I><FONT size="2">Representation</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Accordingly, by acceptance of the IDSs or the
separate senior subordinated notes, each purchaser and
subsequent transferee of the IDSs or the separate senior
subordinated notes, as applicable, will be deemed to have
represented and warranted that either (i)&nbsp;no portion of the
assets used by such purchaser or transferee to acquire and hold
the IDSs or the separate senior subordinated notes constitutes
assets of any Plan or (ii)&nbsp;the purchase and holding of the
IDSs or the separate senior subordinated notes by such purchaser
or transferee will not constitute a non-exempt prohibited
transaction under Section&nbsp;406 of ERISA or Section&nbsp;4975
of the Code or similar violation under any applicable Similar
Laws.
</FONT>

<P align="left">
<FONT size="2">The foregoing discussion is general in nature and
is not intended to be all-inclusive. Due to the complexity of
these rules and the penalties that may be imposed upon persons
involved in non-exempt prohibited transactions, it is
particularly important that fiduciaries, or other persons
considering purchasing the IDSs or the separate senior
subordinated notes on behalf of, or with the assets of, any
Plan, consult with their counsel regarding the potential
applicability of ERISA, Section&nbsp;4975 of the Code and any
Similar Laws to such investment and whether an exemption would
be applicable to the purchase and holding of the IDSs or the
separate senior subordinated notes.
</FONT>

<P align="left">
<I><FONT size="2">Plan Asset Issues</FONT></I>

<P align="left">
<FONT size="2">ERISA and the Code do not define &#147;plan
assets.&#148; However, regulations (the &#147;Plan Asset
Regulations&#148;) promulgated under ERISA by the DOL generally
provide that when a Plan acquires an equity interest in an
entity that is an &#147;operating company&#148;, or the equity
interest is a &#147;publicly-offered security&#148; (in each
case as defined in the Plan Asset Regulations), such equity
interest will be deemed a &#147;plan asset,&#148; but the
underlying assets of the entity will not be deemed &#147;plan
assets.&#148; The Plan Asset Regulations define an &#147;equity
interest&#148; as any interest in an entity, other than an
instrument that is treated as indebtedness under applicable
local law and which has no substantial equity features.
Therefore, we anticipate that shares of our common stock would
be considered an equity interest and our notes should be treated
as indebtedness. Under the Plan Asset Regulations, an
&#147;operating company&#148; is defined as &#147;an entity that
is primarily engaged, directly or through a majority owned
subsidiary or subsidiaries, in the production or sale of a
product or service other than the investment of capital.&#148;
We believe that we are an &#147;operating company&#148; for
purposes of the Plan Asset Regulations, although no assurance
can be given in this regard.
</FONT>

<P align="left">
<FONT size="2">Alternatively, under the Plan Asset Regulations,
a &#147;publicly offered security&#148; is a security that is
(a) &#147;freely transferable&#148;, (b)&nbsp;part of a class of
securities that is &#147;widely held,&#148; and (c)(i) sold to
the Plan as part of an offering of securities to the public
pursuant to an effective registration statement under the
Securities Act of 1933, as amended, and the class of securities
to which such security is a part is registered under the
Securities Exchange Act of 1934, as amended, within
120&nbsp;days after the end of the fiscal year of the issuer
during which the offering of such securities to the public has
occurred, or (ii)&nbsp;is part of a class of securities that is
registered under Section&nbsp;12(b) or 12(g) of the Exchange
Act. In connection with this offering, we are effecting such a
registration of the IDSs and the separate senior subordinated
notes under the Securities Act and Securities Exchange Act. The
Plan Asset Regulations provide that a security is &#147;widely
held&#148; only if it is part of a class of securities that is
owned by 100 or more investors independent of the issuer and one
another. A security will not fail to be &#147;widely held&#148;
because the number of independent investors falls below 100
subsequent to the initial offering thereof as a result of events
beyond the control of the issuer. It is anticipated that the
IDSs and the separate senior subordinated notes will be
&#147;widely held&#148; within the meaning of the Plan Asset
Regulations, although no assurance can be given in this regard.
The Plan Asset Regulations provide that whether a security is
&#147;freely transferable&#148; is a factual question to be
determined on the basis of all the relevant facts and
circumstances. It is anticipated that the IDSs and the separate
senior subordinated notes will be &#147;freely
transferable&#148; within the meaning of the Plan Asset
Regulations, although no assurance can be given in this regard.
</FONT>

<P align="center"><FONT size="2">151
</FONT>

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<P align="left">
<I><FONT size="2">Plan Asset Consequences</FONT></I>

<P align="left">
<FONT size="2">If we cease to be an operating company for
purposes of the Plan Asset Regulations and the IDSs or the
separate senior subordinated notes cease to be publicly-offered
securities within the meaning of the Plan Asset Regulations, our
assets could be deemed to be &#147;plan assets&#148; under
ERISA, unless, at such time, another exemption is available
under the Plan Asset Regulations. This would result, among other
things, in (i)&nbsp;the application of the prudence and other
fiduciary responsibility standards of ERISA to investments made
by us, and (ii)&nbsp;the possibility that certain transactions
in which we might seek to engage could constitute
&#147;prohibited transactions&#148; under ERISA and the Code.
</FONT>

<P align="center"><FONT size="2">152
</FONT>

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<DIV align="left">
<A name='121'></A>
</DIV>

<!-- link1 "Underwriting" -->

<P align="center">
<B>Underwriting</B>

<P align="left">
<FONT size="2">We will enter into an underwriting agreement with
the underwriters named below. CIBC World Markets Corp. and
Lehman Brothers Inc. are acting as the representatives of the
underwriters. Subject to the terms and conditions to be
described in the underwriting agreement, we will agree to sell
to the underwriters, and the underwriters severally will agree
to purchase from us, the number of IDSs listed opposite their
names 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="81%"><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="3" align="center" nowrap><B><FONT size="1">Number of</FONT></B></TD>
</TR>

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

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Lehman Brothers 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>
</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
    </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="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">In addition, CIBC World Markets Corp. and Lehman
Brothers Inc. will agree severally, but not jointly to purchase
from us
$&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
aggregate principal amount of senior subordinated notes,
respectively, which together represents all of the notes being
issued separately (not represented by IDSs.) The underwriters
will agree to purchase all of the IDSs sold under the
underwriting agreement if any of the IDSs are purchased. Under
the underwriting agreement, if an underwriter defaults in its
commitment to purchase the IDSs, the commitments of
nondefaulting underwriters may be increased or the underwriting
agreement may be terminated, depending on the circumstances.
Subject to applicable law, the underwriters may offer the IDSs
or senior subordinated notes outside of the United States.
Holders of our direct and indirect equity securities (and their
related persons) will not be eligible to purchase notes offered
separately.
</FONT>

<P align="left">
<FONT size="2">An automatic exchange of senior subordinated
notes described elsewhere in this prospectus 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 senior subordinated notes
purchased by such holder. See &#147;Description of
IDSs&#151;Book-Entry Settlement and Clearance&#151;Procedures
relating to subsequent issuances.&#148;
</FONT>

<P align="left">
<FONT size="2">The IDSs and senior subordinated notes should be
ready for delivery on or
about &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004 but in any event no later
than &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004 against payment in immediately available funds. The
underwriters are offering the IDSs and senior subordinated notes
subject to various conditions and may reject all or part of any
order. The underwriting agreement provides that the obligations
of the underwriters to purchase the IDSs and senior subordinated
notes included in this offering are subject to approval of legal
matters by counsel and to other conditions. The representatives
have advised us that the underwriters propose to offer the IDSs
and senior subordinated notes directly to the public at the
public offering prices that appear on the cover page of this
prospectus. In addition, the representatives may offer some of
the IDSs or senior subordinated notes to other securities
dealers at such price less a concession of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
IDS
or &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of the principal amount of the senior subordinated notes. The
underwriters may also allow, and such dealers may reallow, a
concession not in excess of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
IDS
or &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of the principal amount of the senior subordinated notes to
other dealers. After the IDSs and the senior subordinated notes
are released for sale to the public, the representatives may
change the offering prices and other selling terms at various
times.
</FONT>

<P align="left">
<FONT size="2">Certain of our existing equity investors will
grant the underwriters an over-allotment option to purchase
additional IDSs, exercisable for 30&nbsp;days from the date of
this prospectus, to purchase up
to &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
underwriters may exercise the option solely for the purpose of
covering over-allotments to purchase additional IDSs, if any, in
connection with this offering. The underwriters have severally
agreed that, to the extent the over-allotment option to purchase
additional IDSs is exercised, they will each purchase a number
of additional IDSs proportionate to the underwriter&#146;s
initial amount reflected in the foregoing table.
</FONT>

<P align="center"><FONT size="2">153
</FONT>
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<P align="left">
<FONT size="2">The following table shows the underwriting
discounts and commissions that we will pay to the underwriters
in connection with this offering. These amounts are shown
assuming both no exercise and full exercise of the
underwriters&#146; option to purchase additional IDSs:
</FONT>

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

<TR>
    <TD width="27%"><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="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="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="1%"><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="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="3"></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">Combined</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Combined</FONT></B></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">Per Senior</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total without</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total with Full</FONT></B></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">Subordinated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise of Over-</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exercise of Over-</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Per IDS</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">Note</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">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>
    <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">Public offering price
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</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><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">Alliance Laundry Holdings Inc.&nbsp;</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 align="right" valign="bottom" nowrap><FONT size="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">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</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">
<FONT size="2">We estimate that our total expenses of this
offering, excluding the underwriting discount, will be
approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
</FONT>

<P align="left">
<FONT size="2">We and the selling shareholders have agreed to
indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933.
</FONT>

<P align="left">
<FONT size="2">We, our executive officers and directors and our
existing equity investors have agreed to a 180-day &#147;lock
up&#148; regarding the IDSs, senior subordinated notes and
shares of our common stock, including securities that are
convertible into such securities and securities that are
exchangeable or exercisable for such securities, subject to
specified exceptions.
</FONT>

<P align="left">
<FONT size="2">This means that for a period of 180&nbsp;days
following the date of this prospectus we and such persons may
not offer, sell, pledge or otherwise dispose of these securities
without the prior written consent of the representatives,
subject to specified exceptions.
</FONT>

<P align="left">
<FONT size="2">We were advised by the representatives that CIBC
World Markets Corp. and Lehman Brothers Inc. currently intend to
facilitate a secondary market in the separate senior
subordinated notes, and, upon separation of the IDSs, the shares
of common stock and senior subordinated notes, which means that
they will make commercially reasonable attempts to match buyers
of such securities with sellers of such securities, considering,
when doing so, any relevant credit issues they deem appropriate.
However, CIBC World Markets Corp. and Lehman Brothers Inc. are
not obligated to facilitate a secondary market and may
discontinue any such facilitation, if commenced, at any time and
without notice. Moreover, if and to the extent that CIBC World
Markets Corp. or Lehman Brothers Inc. facilitate any market for
the senior subordinated notes, there can be no assurance that
such market would provide sufficient liquidity for any holder of
any such securities.
</FONT>

<P align="left">
<FONT size="2">The representatives have informed us that they do
not expect discretionary sales by the underwriters to exceed 5%
of the IDSs offered by this offering.
</FONT>

<P align="left">
<FONT size="2">There is no established trading market for the
IDSs, the shares of our common stock or the senior subordinated
notes. The offering price for the IDSs and the senior
subordinated notes will be determined by us and the
representatives based on the following factors:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">prevailing market and general economic conditions;
    </FONT></TD>
</TR>

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

<TR>
    <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 financial information;
    </FONT></TD>
</TR>

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

<TR>
    <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 history and prospects;
    </FONT></TD>
</TR>

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

<TR>
    <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 history of and prospects for the industry in
    which we compete;
    </FONT></TD>
</TR>

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

<TR>
    <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 assessment of our management, our past and
    present operations, and the prospects for, and timing of, our
    future revenues;&nbsp;and
    </FONT></TD>
</TR>

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

<TR>
    <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 above factors in relation to market values
    and various valuation measures of other companies engaged in
    activities similar to ours.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">We will apply to list the IDSs on the American
Stock Exchange under the trading symbol
&#147;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.&#148;
</FONT>

<P align="center"><FONT size="2">154
</FONT>
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<P align="left">
<FONT size="2">Rules of the SEC may limit the ability of the
underwriters to bid for or purchase IDSs or senior subordinated
notes before the distribution of the IDSs and senior
subordinated notes is completed. However, the underwriters may
engage in the following activities in accordance with the rules:
</FONT>
<P>

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

<TR>
    <TD width="1%"></TD>
    <TD width="2%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2"> &#149; &nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Stabilizing transactions&#151;The representatives
    may make bids or purchases for the purpose of pegging, fixing or
    maintaining the price of the IDSs or senior subordinated notes,
    so long as 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 option to purchase additional IDSs
    and syndicate covering transactions&#151;The underwriters may
    sell more IDSs in connection with this offering than the number
    of IDSs that they have committed to purchase. This option to
    purchase additional IDSs over-allotment creates a short position
    for the underwriters. This short sales position may involve
    either &#147;covered&#148; short sales or &#147;naked&#148;
    short sales. Covered short sales are short sales made in an
    amount not greater than the underwriters&#146; over-allotment
    option to purchase additional IDSs in this offering described
    above. The underwriters may close out any covered short position
    either by exercising their over-allotment option to purchase
    additional IDSs or by purchasing IDSs in the open market. To
    determine how they will close the covered short position, the
    underwriters will consider, among other things, the price of
    IDSs available for purchase in the open market as compared to
    the price at which they may purchase IDSs through the
    over-allotment option. Naked short sales are short sales in
    excess of the over-allotment option to purchase additional IDSs.
    The underwriters must close out any naked short position by
    purchasing IDSs in the open market. A naked short position is
    more likely to be created if the underwriters are concerned
    that, in the open market after pricing, there may be downward
    pressure on the price of the IDSs that could adversely affect
    investors who purchase IDSs in this offering.
    </FONT></TD>
</TR>

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

<TR>
    <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&#151;If the representative purchases
    IDSs or senior subordinated notes in the open market in a
    stabilizing transaction or syndicate covering transaction, it
    may reclaim a selling concession from the underwriters and
    selling group members who sold those IDSs or senior subordinated
    notes as part of this offering.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Similar to other purchase transactions, the
underwriters&#146; purchases to cover the syndicate short sales
or to stabilize the market price of the IDSs or senior
subordinated notes or the imposition of penalty bids may have
the effect of raising or maintaining the market price of the
IDSs or senior subordinated notes or preventing or mitigating a
decline in the market price of the IDSs or senior subordinated
notes. As a result, the price of the IDSs or senior subordinated
notes may be higher than the price that might otherwise exist in
the open market. The imposition of a penalty bid might also have
an effect on the price of the IDSs or senior subordinated notes
if it discourages resales of the IDSs or senior subordinated
notes.
</FONT>

<P align="left">
<FONT size="2">Neither we nor the underwriters make any
representation or prediction as to the effect that the
transactions described above may have on the price of the IDSs
or senior subordinated notes. These transactions may occur on
the American Stock Exchange or otherwise. If such transactions
are commenced, they may be discontinued without notice at any
time.
</FONT>

<P align="left">
<FONT size="2">At our request, the underwriters have reserved
for sale, at the initial offering price, up
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs
for our directors, employees and shareholders. The number of
IDSs available for sale to the general public will be reduced to
the extent our directors, employees and shareholders purchase
such reserved shares. Any reserved shares which are not so
purchased will be offered by the underwriters to the general
public on the same basis as the other shares offered by this
prospectus.
</FONT>

<P align="left">
<FONT size="2">A prospectus in electronic format may be made
available on the websites maintained by one or more of the
underwriters and certain of the underwriters or securities
dealers may distribute prospectuses electronically. The
representatives may agree to allocate a number of IDSs or senior
subordinated notes to underwriters for sale to their online
brokerage account holders. The representatives will allocate
IDSs to underwriters that may make Internet distributions on the
same basis as other allocations. Other than the prospectus in
electronic format, the information on any of these websites and
any other information contained on a website maintained by an
underwriter or syndicate member is not part of this prospectus.
In addition, concurrently with this offering, we are
issuing &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs
to certain indirect holders of equity interests in Alliance
Holdings in exchange for a portion of those interests.
</FONT>

<P align="center"><FONT size="2">155
</FONT>

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<P align="left">
<FONT size="2">The underwriters have provided, and may continue
to provide, from time to time investment banking, commercial
banking, advisory and other services to us and the existing
equity investors for customary fees and expenses in the ordinary
course of their business. CIBC World Markets Corp. and Lehman
Brothers Inc. are the joint lead arranger and joint book-running
managers of the new credit facility and CIBC World Markets Corp.
is also the dealer manager in connection with the tender offer.
Canadian Imperial Bank of Commerce, an affiliate of CIBC World
Markets Corp., is a lender and co-administrative agent under our
asset backed facility.
</FONT>

<P align="left">
<FONT size="2">CIBC World Markets Corp. (or its affiliates) and
Lehman Brothers Inc. (or its affiliates) are investors in funds
managed by Bain Capital, our existing majority shareholder.
Neither CIBC World Market Corp. or Lehman Brothers Inc. nor
their affiliates will receive any distributions as a result of
this offering.
</FONT>

<P align="center"><FONT size="2">156
</FONT>
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<DIV align="left">
<A name='122'></A>
</DIV>

<!-- link1 "Legal Matters" -->

<P align="center">
<B>Legal Matters</B>

<P align="left">
<FONT size="2">The validity of the issuance of the IDSs offered
hereby and the shares of our common stock and senior
subordinated notes represented thereby, the validity of the
separate issuance of senior subordinated notes not in the form
of IDSs and the validity of the issuance of the subsidiary
guarantees by the subsidiary guarantors, will be passed upon for
us by Kirkland&nbsp;&#38; Ellis LLP, New&nbsp;York,
New&nbsp;York. Certain partners of Kirkland&nbsp;&#38; Ellis LLP
are also members of Randolph Street Partners II which will
own &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IDSs
upon completion of the reorganization and this offering. Certain
legal matters relating to this offering will be passed upon for
the underwriters by Skadden, Arps, Slate, Meagher&nbsp;&#38;
Flom LLP, New&nbsp;York, New&nbsp;York.
</FONT>

<DIV align="left">
<A name='123'></A>
</DIV>

<!-- link1 "Experts" -->

<P align="center">
<B>Experts</B>

<P align="left">
<FONT size="2">The consolidated financial statements as of
December&nbsp;31, 2003 and 2002 and for each of the three years
in the period ended December&nbsp;31, 2003, included in this
prospectus have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
</FONT>

<DIV align="left">
<A name='124'></A>
</DIV>

<!-- link1 "Where You Can Find Additional Information" -->

<P align="center">
<B>Where You Can Find Additional Information</B>

<P align="left">
<FONT size="2">We have filed a Registration Statement on
Form&nbsp;S-1 with the SEC regarding this offering. This
prospectus, which is part of the registration statement, does
not contain all of the information included in the registration
statement, and you should refer to the registration statement
and its exhibits to read that information. As a result of the
effectiveness of the registration statement, we are subject to
the informational reporting requirements of the Exchange Act of
1934 and, under that Act, we will file reports, proxy statements
and other information with the Commission. You may read and copy
the registration statement, the related exhibits and the
reports, proxy statements and other information we file with the
SEC at the SEC&#146;s public reference facilities maintained by
the SEC at Judiciary Plaza, 450&nbsp;Fifth Street, N.W.,
Washington,&nbsp;D.C. 20549. You can also request copies of
those documents, upon payment of a duplicating fee, by writing
to the SEC. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference rooms. The
SEC also maintains an Internet site that contains reports, proxy
and information statements and other information regarding
issuers that file with the SEC. The site&#146;s Internet address
is www.sec.gov.
</FONT>

<P align="left">
<FONT size="2">Upon completion of this offering, Alliance
Holdings will become subject to the information and periodic
reporting requirements of the Securities Exchange Act of 1934,
and, in accordance with the requirements of the Securities
Exchange Act of 1934, will file periodic reports, proxy
statements and other information with the SEC. These periodic
reports, proxy statements and other information will be
available for inspection and copying at the regional offices,
public reference facilities and web site of the SEC referred to
above.
</FONT>

<P align="left">
<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">
ALLIANCE LAUNDRY HOLDINGS INC.

<DIV align="center">
<FONT size="2">P.O.&nbsp;Box&nbsp;990
</FONT>
</DIV>

<DIV align="center">
<FONT size="2">Ripon, Wisconsin 54971-0990
</FONT>
</DIV>

<DIV align="center">
<FONT size="2">(920)&nbsp;748-3121
</FONT>
</DIV>

<P align="center"><FONT size="2">157
</FONT>
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<P align="center">
<B>Alliance Laundry Holdings LLC</B>

<P align="left">
<A name='125'></A>

<!-- link1 "Index to Financial Statements" -->

<DIV align="center">
<B>Index to Financial Statements</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="87%"><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="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></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">Report of Independent Auditors
    </FONT></DIV>
    </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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Consolidated Balance Sheets at December&nbsp;31,
    2003 and 2002
    </FONT></DIV>
    </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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Consolidated Statements of Income for the three
    years ended December&nbsp;31, 2003
    </FONT></DIV>
    </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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Consolidated Statements of Members&#146; Deficit
    and Comprehensive Income (Loss) for three years ended
    December&nbsp;31, 2003
    </FONT></DIV>
    </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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Consolidated Statements of Cash Flows for the
    three years ended December&nbsp;31, 2003
    </FONT></DIV>
    </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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Notes to 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-7</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">Financial Statement Schedules:
    </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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">For the three years ended December&nbsp;31, 2003
    </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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">II&#151;Valuation and Qualifying Accounts
    </FONT></DIV>
    </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-33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">All other schedules are omitted because they are
not applicable or the required information is shown in the
financial statements or notes thereto.
</FONT>

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

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<P align="center">
<B>Report of Independent Auditors</B>

<P align="left">
<FONT size="2">To the Board of Managers and Members
</FONT>

<DIV align="left">
<FONT size="2">&nbsp;of Alliance Laundry Holdings LLC
</FONT>
</DIV>

<P align="left">
<FONT size="2">In our opinion, the financial statements listed
in the accompanying index present fairly, in all material
respects, the financial position of Alliance Laundry Holdings
LLC and its subsidiaries at December&nbsp;31, 2003 and 2002, and
the results of their operations and their cash flows for each of
the three years in the period ended December&nbsp;31, 2003 in
conformity with accounting principles generally accepted in the
United States of America. In addition, in our opinion, the
financial statement schedules listed in the accompanying index
present fairly, in all material respects, the information set
forth therein when read in conjunction with the related
consolidated financial statements. These financial statements
and financial statement schedules are the responsibility of the
Company&#146;s management; our responsibility is to express an
opinion on these financial statements and financial statement
schedules based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally
accepted in the United States of America, which 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, assessing the accounting principles used and
significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
</FONT>

<P align="left">
<FONT size="2">As discussed in Note&nbsp;2 to the consolidated
financial statements, the Company adopted Statement of Financial
Accounting Standards No.&nbsp;142, &#147;Goodwill and Other
Intangible Assets,&#148; effective January&nbsp;1, 2002. Also,
as discussed in Note&nbsp;2, effective in 2001, the Company
changed its methods of accounting for derivative financial
instruments and retained beneficial interests in securitized
financial assets.
</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="center">
    <FONT size="2">/s/ PRICEWATERHOUSECOOPERS LLP
    </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="center">
    <FONT size="2">PRICEWATERHOUSECOOPERS LLP
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Milwaukee, Wisconsin
</FONT>

<DIV align="left">
<FONT size="2">March&nbsp;5, 2004
</FONT>
</DIV>

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

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<P align="center">
<B><FONT size="2">Alliance Laundry Holdings LLC</FONT></B>

<P align="center">
<B><FONT size="2">Consolidated Balance Sheets</FONT></B>

<CENTER>
<TABLE width="70%" 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="67%"><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>
</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">December&nbsp;31,</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" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</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><FONT size="1">(In thousands)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="11" align="center" 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>
</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
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,937</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,339</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">Cash-restricted
    </FONT></DIV>
    </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">99</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 receivable (net of allowance for
    doubtful accounts of $257 and $207 at December&nbsp;31, 2003 and
    2002, respectively)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,157</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,834</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, 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">26,215</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">25,697</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">Beneficial interests in securitized accounts
    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">16,789</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">19,864</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
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">898</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">639</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 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">60,996</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">59,472</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">Notes receivable, 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">8,161</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,166</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, plant 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">34,035</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,096</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 of accumulated amortization of
    $11,766 at December&nbsp;31, 2003 and 2002)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">55,414</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">55,414</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">Beneficial interests in securitized financial
    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">22,676</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,483</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">Debt issuance costs, net
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,636</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">9,654</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
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,721</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">1,010</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 assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">190,639</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">197,295</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="11" align="center" valign="top">
    <B><FONT size="2">LIABILITIES AND MEMBERS&#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>
</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 portion of long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,270</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,971</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">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">&#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">&#150;</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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,279</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,797</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">Other 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">20,428</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,638</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 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">42,977</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45,406</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:
    </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="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Senior 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">145,975</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">173,266</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
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110,000</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">110,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Junior subordinated note
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,171</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,312</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">Other 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">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 align="right" valign="bottom" nowrap><FONT size="2">1,028</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">6,491</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">8,023</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 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">330,397</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">358,035</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">Commitments and contingencies (see Note&nbsp;11)
    </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="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Mandatorily redeemable preferred equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,000</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">6,000</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">Members&#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">(145,758</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(166,740</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>

</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 members&#146; deficit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">190,639</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">197,295</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">
<FONT size="2">The accompanying notes are an integral part of
the 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">Alliance Laundry Holdings LLC</FONT></B>

<P align="center">
<B><FONT size="2">Consolidated Statements of Income</FONT></B>

<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="61%"><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="3%"><FONT size="2">&nbsp;</FONT></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">Years Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</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">2001</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><FONT size="1">(In thousands)</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 revenues:
    </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">Commercial laundry
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">230,663</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">219,653</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">219,273</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">Service parts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36,944</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">35,524</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,743</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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">267,607</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">255,177</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">254,016</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">Cost of sales
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">188,979</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">179,047</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">188,982</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" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Gross profit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">78,628</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">76,130</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">65,034</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">Selling, general and administrative 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">33,566</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,098</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,665</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">Securitization and other 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">&#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">10,920</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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="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">Total operating 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">33,566</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">41,018</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,665</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">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">45,062</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35,112</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">36,369</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">28,258</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">28,341</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">33,538</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 from 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">&#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">2,004</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">&#150;</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">Abandoned Canadian public offering 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">&#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">3,409</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">&#150;</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 (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">(830</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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">(67</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">Income before 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">15,974</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,391</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,764</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">Provision for 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">55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34</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">Net income before cumulative effect of accounting
    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">15,919</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,730</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">Cumulative effect of change in accounting
    principle
    </FONT></DIV>
    </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">&#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">2,043</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">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,919</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">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="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">
<FONT size="2">The accompanying notes are an integral part of
the 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">Alliance Laundry Holdings LLC</FONT></B>

<P align="center">
<B><FONT size="2">Consolidated Statements of Members&#146;
Deficit</FONT></B>

<DIV align="center">
<B><FONT size="2">and Comprehensive Income (Loss)</FONT></B>
</DIV>

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

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</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">2001</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><FONT size="1">(In thousands)</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">Members&#146; deficit, beginning of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(166,740</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(160,208</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">(161,861</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">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">15,919</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">687</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">Accumulated other comprehensive income (loss):
    </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">Net unrealized holding gain on residual
    interests, 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">1,586</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">1,309</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">572</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">Unrealized gain, 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">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">277</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">737</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net unrealized holding gain on residual
    interests, 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">2,236</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">1,586</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">1,309</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">Minimum pension liability adjustment, 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">(8,003</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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">&#150;</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">Unrealized gain (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">4,381</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,003</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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="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">Minimum pension liability adjustment, 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">(3,622</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,003</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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><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 unrealized gain on interest rate swaps,
    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">&#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">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">&#150;</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">Unrealized (loss) gain
    </FONT></DIV>
    </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">(141</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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</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 colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net unrealized gain on interest rate swaps, 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">&#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">&#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">141</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">Repayment on loans to management
    </FONT></DIV>
    </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">&#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">88</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" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Members&#146; deficit, end of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(145,758</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(166,740</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">(160,208</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>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Comprehensive income (loss):
    </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">Net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,919</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">687</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">Other comprehensive income (loss):
    </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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net unrealized holding gain on residual
    interests, 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">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">277</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">737</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">Minimum pension liability adjustment
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,381</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,003</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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><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">Unrealized (loss) gain on interest rate swaps
    </FONT></DIV>
    </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">(141</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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</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">Comprehensive income (loss)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,950</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,532</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">1,565</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="left">
<FONT size="2">The accompanying notes are an integral part of
the 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">Alliance Laundry Holdings LLC</FONT></B>

<P align="center">
<B><FONT size="2">Consolidated Statements of Cash
Flows</FONT></B>

<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="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="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>
</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">Years Ended December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="4"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</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">2001</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><FONT size="1">(In thousands)</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 flows from 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>
</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
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,919</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">687</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 to 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>
</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">Cumulative effect of change in accounting
    principle
    </FONT></DIV>
    </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">&#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">2,043</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">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">10,886</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,293</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">17,026</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">Non-cash 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">5,290</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,875</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">3,663</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">Non-cash loss from 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">&#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">2,004</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">&#150;</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">Loss (gain)&nbsp;on sale of property, plant and
    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">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">(33</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">67</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">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>
</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">Accounts 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">(3,323</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,606</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">139</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">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">(518</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,165</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">7,600</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">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">4,346</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">(6,184</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(14,230</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 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">(2,518</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,603</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,439</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">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">278</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,889</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">904</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">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">30,393</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">22,775</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,338</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">Cash flows from 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>
</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">Additions to property, plant and 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">(3,600</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,652</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,152</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 on disposal of property, plant and
    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">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">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">188</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">Net cash 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">(3,590</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">(2,563</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">(4,964</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>

</TR>

<TR>
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash flows from 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>
</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 management note
    </FONT></DIV>
    </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">&#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">&#150;</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 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">&#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">193,000</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">812</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">Principal payments on 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">(26,237</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(205,230</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,618</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">Net decrease in revolving line of credit
    borrowings
    </FONT></DIV>
    </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">&#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">(12,000</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">Debt financing 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">&#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">(6,302</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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="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">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">(26,205</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">(18,532</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(15,806</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>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase in cash
    </FONT></DIV>
    </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><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,680</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">568</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 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">7,339</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">5,659</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,091</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 colspan="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash at end of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,937</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,339</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 align="right" valign="bottom" nowrap><FONT size="2">5,659</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="4" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Supplemental disclosure of 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>
</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 paid for interest
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,148</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,155</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,774</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">The accompanying notes are an integral part of
the financial statements.
</FONT>

<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>

<P align="center">
<B>Alliance Laundry Holdings LLC</B>

<P align="center">
<B>Notes to Financial Statements</B>

<DIV align="center">
December&nbsp;31, 2003, 2002 and 2001
</DIV>

<DIV align="center">
(Dollar amounts in thousands unless otherwise indicated)
</DIV>

<DIV>&nbsp;</DIV>

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

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

<TR valign="top">
    <TD><B><FONT size="2">Note&nbsp;1&#151;</FONT></B></TD>
    <TD>
    <B><FONT size="2">Description of Business and Basis of
    Presentation:</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>
    <I><FONT size="2">Description of Business</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Throughout this annual report, we refer to
Alliance Laundry Holdings LLC, a Delaware limited liability
company, as &#147;Alliance Holdings,&#148; and, together with
its consolidated operations, as &#147;Alliance,&#148;
&#147;we,&#148; &#147;our&#148; and &#147;us,&#148; unless
otherwise indicated. Any reference to &#147;Alliance
Laundry&#148; refers to our wholly-owned subsidiary, Alliance
Laundry Systems LLC, a Delaware limited liability company, and
its consolidated operations, unless otherwise indicated.
</FONT>

<P align="left">
<FONT size="2">We design, manufacture and service a full line of
commercial laundry equipment for sale in the U.S. and for export
to numerous international markets. We also manufacture consumer
washing machines for sale to international customers. We produce
all of our products in the U.S.&nbsp;at two manufacturing plants
located in Ripon, Wisconsin and Marianna, Florida. We also
provide equipment financing to laundromat operators and other
end-users.
</FONT>

<P align="left">
<FONT size="2">Alliance originated from the acquisition of Speed
Queen Company (&#147;Speed Queen&#148;) by Raytheon Company
(&#147;Raytheon&#148;) in October of 1979 and it was an
operating unit of Raytheon under various names, including Speed
Queen and Raytheon Appliances,&nbsp;Inc. On September&nbsp;10,
1997, in connection with the sale by Raytheon of its consumer
laundry business (&#147;Amana Transaction&#148;), Raytheon
Appliances,&nbsp;Inc. was dissolved. Concurrently, Raytheon
Commercial Laundry LLC was established as a limited liability
company to carry on the commercial laundry portion of
Raytheon&#146;s appliance business.
</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>
    <I><FONT size="2">Basis of Presentation</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">On May&nbsp;5, 1998 a recapitalization (the
&#147;Recapitalization&#148;) and merger transaction occurred,
pursuant to which Raytheon Commercial Laundry LLC was renamed
&#147;Alliance Laundry Holdings LLC.&#148; The transactions were
accounted for as a recapitalization and accordingly, the
historical accounting basis of the assets and liabilities was
unchanged. The financial statements represent the consolidated
financial position and results of operations of Alliance
Holdings, including its wholly-owned direct and indirect
subsidiaries, Alliance Laundry Systems LLC and Alliance Laundry
Corporation which were formed in connection with the
Recapitalization.
</FONT>

<P align="left">
<FONT size="2">In connection with the Recapitalization and other
related transactions, the Company contributed substantially all
of its assets and liabilities to Alliance Laundry Systems LLC, a
newly formed limited liability company. Immediately after the
consummation of the transactions, Alliance Laundry became the
only direct subsidiary of Alliance Holdings and succeeded to
substantially all of the assets and liabilities of Alliance.
Subsequent to May&nbsp;4, 1998, Alliance Laundry comprises all
of our operating activities.
</FONT>

<P align="left">
<FONT size="2">All material intercompany transactions have been
eliminated in the preparation of these financial statements.
</FONT>

<DIV>&nbsp;</DIV>

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

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

<TR valign="top">
    <TD><B><FONT size="2">Note&nbsp;2&#151;</FONT></B></TD>
    <TD>
    <B><FONT size="2">Significant Accounting Policies:</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>
    <I><FONT size="2">Use of Estimates</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">The preparation of financial statements in
conformity with generally accepted accounting principles
requires us to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimates.
</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>

<DIV align="center">
<B>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</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>
    <I><FONT size="2">Cash, Cash Equivalents and Cash
    Management</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">We consider all highly liquid debt instruments
with an initial maturity of three months or less at the date of
purchase to be cash equivalents. Restricted cash at
December&nbsp;31, 2002 represents unremitted collections on
notes receivable sold prior to May&nbsp;5, 1998.
</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>
    <I><FONT size="2">Revenue Recognition</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Revenue from product sales is recognized by us
when all of the following criteria are met: persuasive evidence
of an arrangement exists; delivery has occurred and ownership
has transferred to the customer; the price to the customer is
fixed or determinable; and collectibility is reasonably assured.
With the exception of certain sales to international customers,
which are recognized upon receipt by the customer, these
criteria are satisfied, and accordingly, revenue is recognized
upon shipment by 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>
    <I><FONT size="2">Shipping and Handling Fees and Costs</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">In accordance with Emerging Issues Task Force
(&#147;EITF&#148;) Issue No.&nbsp;00-10 &#147;Accounting for
Shipping and Handling Fees and Costs,&#148; shipping and
handling fees and costs are reflected in net revenues and cost
of goods sold as appropriate.
</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>
    <I><FONT size="2">Sales Incentive Costs</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">In accordance with EITF Issue No.&nbsp;01-09
&#147;Accounting for Consideration Given by a Vendor to a
Customer (Including a Reseller of the Vendor&#146;s
Products),&#148; all sales incentive costs including cash
discounts, customer promotional allowances, and volume rebates
are reflected as a reduction of net revenues.
</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>
    <I><FONT size="2">Financing Program Revenue</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">As discussed below, we sell notes receivable and
accounts receivable through our special-purpose bankruptcy
remote entities. As servicing agent, we retain collection and
administrative responsibilities for the notes and accounts
receivable. We earn a servicing fee, based on the average
outstanding balance. In addition, we have recorded gains or
losses on the sales of notes receivable and accounts receivable
in the period in which such sales occur in accordance with
Statement of Financial Accounting Standards (&#147;SFAS&#148;)
No.&nbsp;125, &#147;Accounting for Transfers and Servicing of
Financial Assets and Extinguishment of Liabilities&#148; through
March&nbsp;31, 2001 and subsequently in accordance with
SFAS&nbsp;No.&nbsp;140 as discussed below. We also recognize
interest income on beneficial interests retained in the period
the interest is earned. Servicing revenue, interest income on
beneficial interests retained, and gains on the sale of notes
receivable are included in commercial laundry revenue.
</FONT>

<P align="left">
<FONT size="2">During the second quarter of 2001, we adopted
SFAS&nbsp;No.&nbsp;140 &#147;Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of
Liabilities, a Replacement of FASB Statement No.&nbsp;125.&#148;
This Statement revised certain aspects of the existing standards
for accounting for securitizations and other transfers of
financial assets and collateral, and required certain new and
expanded disclosures. SFAS&nbsp;No.&nbsp;140 was effective for
us in the second quarter of 2001 and did not have a material
effect on our financial statements with respect to the
recognition and measurement of sales of financial assets.
</FONT>

<P align="left">
<FONT size="2">Effective April&nbsp;1, 2001, we also adopted the
provisions of EITF Issue No.&nbsp;99-20 &#147;Recognition of
Interest Income and Impairment on Purchased and Retained
Beneficial Interests in Securitized Financial Assets.&#148; In
accordance with the provisions of EITF&nbsp;99-20, we recognized
an approximate $2.0&nbsp;million charge upon adoption as the
cumulative effect of this accounting change. The
$2.0&nbsp;million effect of adoption reflects the recognition of
write-downs of our retained interests pursuant to the impairment
provisions of
</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>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<FONT size="2">EITF&nbsp;99-20. We also recognize interest
income on retained beneficial interests in accordance with
EITF&nbsp;99-20.
</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>
    <I><FONT size="2">Sales of Accounts Receivable and Notes
    Receivable (See Notes&nbsp;4 and 5)</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">According to SFAS&nbsp;No.&nbsp;125 and 140, a
transfer of financial assets in which the transferor surrenders
control over those assets is accounted for as a sale to the
extent that consideration other than beneficial interests in the
transferred assets is received in exchange. We sell all of our
trade receivable and eligible notes receivable to third parties
through special-purpose bankruptcy remote entities designed to
meet the SFAS&nbsp;No.&nbsp;125 and 140 requirements for sale
treatment. Accordingly, we remove these receivables from our
balance sheet at the time of transfer.
</FONT>

<P align="left">
<FONT size="2">In a subordinated capacity, we retain rights to
the residual portion of cash flows, including interest earned,
from the notes receivable sold. This retained beneficial
interest is recorded at its estimated fair value at the balance
sheet date. In determining the gain on sales of notes
receivable, the investment in the sold receivable pool is
allocated between the portion sold and the portion retained,
based on their relative fair values. We generally estimate the
fair values of our retained interests based on the present value
of expected future cash flows to be received, using our best
estimate of key assumptions, including credit losses, prepayment
rates, interest rates and discount rates commensurate with the
risks involved. Unrealized gains and losses resulting from
changes in the estimated fair value of our retained interests
are recorded as other comprehensive income (loss). Impairment
losses are recognized when the estimated fair value is less than
the carrying amount of the retained interest in accordance with
EITF&nbsp;99-20.
</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>
    <I><FONT size="2">Inventories</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Inventories are stated at cost using the
first-in, first-out method but not in excess of net realizable
value. Our policy is to evaluate all inventory including
manufacturing raw material, work-in-process, finished goods, and
spare parts. Inventory in excess of our estimated usage
requirements is written down to its estimated net realizable
value. Inherent in the estimates of net realizable value are our
estimates related to future manufacturing schedules, customer
demand, possible alternate uses and ultimate realization of
potentially excess inventory.
</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>
    <I><FONT size="2">Notes Receivable</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Notes receivable reflect equipment loans that we
expect to sell shortly after the balance sheet date, and
non-performing and other loans not eligible for sale to our
existing securitization facilities. Notes receivable are stated
at the principal amount outstanding, net of allowance for credit
losses. Interest income is accrued as earned on outstanding
balances. Recognition of income is suspended when we determine
that collection of future income is not probable (after
90&nbsp;days past due). Fees earned and incremental direct costs
incurred upon origination of equipment loans are not significant.
</FONT>

<P align="left">
<FONT size="2">We determine that a note receivable is impaired
when it is probable that we will be unable to collect all
amounts due according to the contractual terms of the note.
These equipment loans are collateral-dependent and accordingly,
measurement of impairment is based upon the estimated fair value
of collateral.
</FONT>

<P align="left">
<FONT size="2">The determination of the allowance for credit
losses is based on an analysis of the related notes and reflects
an amount which, in our judgment, is adequate to provide for
probable credit losses. Notes deemed to be uncollectible are
charged off and deducted from the allowance. The allowance is
increased for recoveries and by charges to income.
</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>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property, Plant
and Equipment</FONT></I>

<P align="left">
<FONT size="2">Property, plant and equipment is stated at cost.
Betterments and major renewals are capitalized and included in
property, plant and equipment while expenditures for maintenance
and minor renewals are charged to expense. When assets are
retired or otherwise disposed of, the assets and related
allowances for depreciation and amortization are eliminated and
any resulting gain or loss is reflected in other income
(expense). Long-lived assets, principally property, plant and
equipment, to be held and used are reviewed for impairment
whenever events or changes in circumstances indicate that the
related carrying amount may not be recoverable based upon
related estimated future undiscounted cash flows. When required,
impairment losses on assets to be held and used are recognized
based upon the fair value of the asset as compared to its
carrying value. Long-lived assets to be disposed of by sale are
reported at the lower of carrying amount or fair value less cost
to sell.
</FONT>

<P align="left">
<FONT size="2">Depreciation provisions are based on the
following estimated useful lives: buildings 40&nbsp;years;
machinery and equipment (including production tooling) 5 to
10&nbsp;years. Leasehold improvements are amortized over the
lesser of the remaining life of the lease or the estimated
useful life of the improvement.
</FONT>

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

<P align="left">
<FONT size="2">We adopted SFAS&nbsp;No.&nbsp;142, &#147;Goodwill
and Other Intangible Assets,&#148; in the first quarter of
fiscal 2002. Application of the non-amortization provisions of
SFAS&nbsp;No.&nbsp;142 resulted in an increase in net income of
approximately $2.0&nbsp;million in fiscal 2002. The following
sets forth a reconciliation of net income for the periods
presented as if the non-amortization provisions of
SFAS&nbsp;No.&nbsp;142 had been applied as of January&nbsp;1,
2001.
</FONT>

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

<TR>
    <TD width="70%"><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="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></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Year Ended December&nbsp;31,</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" align="center" nowrap><B><FONT size="1">2003</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">2001</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">Reported net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,919</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">687</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">&#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">&#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">2,046</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">Adjusted net income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,919</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,335</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,733</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">
<FONT size="2">SFAS&nbsp;No.&nbsp;142 also requires a goodwill
impairment review to be performed at least annually by applying
a fair-value-based test at an appropriate level within the
entity. This test involves a comparison of a reporting
unit&#146;s estimated fair value to its carrying value. If the
estimated fair value is in excess of the carrying value, the
test is complete and no goodwill impairment is recorded. We
estimate fair value based upon estimates of discounted cash
flows, including expectations of future operating results. We
have completed the analysis required by SFAS&nbsp;No.&nbsp;142
and have concluded that no impairment of recorded goodwill
exists at December&nbsp;31, 2003.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt Issuance
Costs</FONT></I>

<P align="left">
<FONT size="2">As a result of amending and restating our Senior
Credit Facility in 2002, we wrote-off $2.0&nbsp;million of
remaining unamortized debt issuance costs associated with the
previous facility and capitalized as debt issuance costs the
fees associated with the new facility of $6.3&nbsp;million.
Accumulated amortization was $5.8&nbsp;million and
$3.8&nbsp;million at December&nbsp;31, 2003 and 2002,
respectively.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Warranty
Liabilities</FONT></I>

<P align="left">
<FONT size="2">The cost of warranty obligations are estimated
and provided for at the time of sale. Standard product
warranties cover most parts for three years and certain parts
for five years.
</FONT>

<P align="center"><FONT size="2">F-10
</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>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research and
Development Expenses</FONT></I>

<P align="left">
<FONT size="2">Research and development expenditures are
expensed as incurred. Research and development costs were
$6.7&nbsp;million, $6.7&nbsp;million and $5.8&nbsp;million in
2003, 2002 and 2001, respectively.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advertising
Expenses</FONT></I>

<P align="left">
<FONT size="2">We expense advertising costs as incurred. We
incurred advertising expenses of approximately
$3.1&nbsp;million, $2.9&nbsp;million, and $3.2&nbsp;million in
2003, 2002 and 2001, respectively.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income
Taxes</FONT></I>

<P align="left">
<FONT size="2">As a result of the Recapitalization, we are a
stand-alone limited liability company and are not subject to
federal and most state income taxes.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class&nbsp;B and
C Units</FONT></I>

<P align="left">
<FONT size="2">The Company issued Class&nbsp;B and C Unit
interests to certain members of management in connection with
the May&nbsp;5, 1998 recapitalization transaction, and certain
additional Class&nbsp;B and Class&nbsp;M interests in 2003 (see
Note&nbsp;10). These units were issued for nominal consideration
based upon the subordinated nature of such interests, and
represent performance-based compensatory awards for accounting
purposes. Compensation expense is measured each period based
upon the estimated fair value of all common units and recognized
over the vesting period when it becomes probable that certain
target multiples, as defined, will be achieved. No compensation
expense related to these units was recognized in 2003, 2002 or
2001.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair Value of
Other Financial Instruments</FONT></I>

<P align="left">
<FONT size="2">The carrying amounts reported in the consolidated
balance sheets for cash and cash equivalents, accounts
receivable, and accounts payable approximate fair value due to
the short-term maturity of these financial instruments. The
amounts reported for borrowings under the Senior Credit Facility
approximate fair value since the underlying instruments bear
interest at variable rates that reprice frequently. The fair
value of our senior subordinated notes at December&nbsp;31, 2003
is estimated based upon prices prevailing in recent market
transactions. The fair value of interest rate swaps are obtained
based upon third party quotes.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative
Financial Instruments</FONT></I>

<P align="left">
<FONT size="2">We adopted SFAS&nbsp;No.&nbsp;133,
&#147;Accounting for Derivative Instruments and Hedging
Activities&#148; on January&nbsp;1, 2001. SFAS&nbsp;No.&nbsp;133
as amended, requires us to recognize all derivatives as either
assets or liabilities and measure those instruments at fair
value, and recognize changes in the fair value of derivatives in
net income or other comprehensive income, as appropriate.
</FONT>

<P align="left">
<FONT size="2">In accordance with the transition provisions of
SFAS&nbsp;133, we recorded a cumulative-effect-type gain
adjustment of $0.7&nbsp;million in other comprehensive income
(loss) within members&#146; deficit to recognize at fair value
its interest rate swap arrangements at January&nbsp;1, 2001. We
reclassified in earnings during 2001 approximately
$0.6&nbsp;million of the transition adjustment that was recorded
in other comprehensive income (loss). For the year ended
December&nbsp;31, 2001, we recognized a loss of
$1.5&nbsp;million reflecting the subsequent changes in the fair
values of our interest rate swaps and a gain of
$0.6&nbsp;million for the reclassification of the transition
adjustment as discussed above. We entered into a new interest
rate swap agreement in December 2002. We recognized losses of
$1.4&nbsp;million and $1.8&nbsp;million reflecting the
subsequent changes in the fair value of this interest rate swap
for the years ended December&nbsp;31, 2003 and December&nbsp;31,
2002 respectively.
</FONT>

<P align="center"><FONT size="2">F-11
</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="center">
<B>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

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

<P align="left">
<FONT size="2">Financial instruments that potentially subject us
to concentrations of credit risk include trade accounts
receivable and notes receivable, and related retained interests
in securitized accounts and notes receivable. Concentrations of
credit risk with respect to trade receivables and notes
receivable are limited, to a degree, by the large number of
geographically diverse customers that make up our customer base.
The Company&#146;s sales to international customers accounted
for 12.7%, 11.5% and 12.8% of net revenues in 2003, 2002 and
2001, respectively. We control credit risk through credit
approvals, credit limits and monitoring procedures, as well as
secured payment terms or Foreign Credit Insurance Agency
(&#147;FCIA&#148;) insurance for sales to international
customers.
</FONT>

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

<P align="left">
<FONT size="2">We sell our products primarily to independent
distributors. Our largest customer accounted for 15.8%, 16.8%
and 15.7% of net revenues in 2003, 2002 and 2001, respectively.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Recently
Issued Accounting Standards</FONT></I>

<P align="left">
<FONT size="2">In June 2001, the Financial Accounting Standards
Board (&#147;FASB&#148;) issued SFAS&nbsp;No.&nbsp;143,
&#147;Accounting for Asset Retirement Obligations.&#148; This
statement addresses the financial accounting and reporting for
obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs. The
provisions of SFAS&nbsp;No.&nbsp;143 are effective for fiscal
years beginning after June&nbsp;15, 2002. We adopted
SFAS&nbsp;No.&nbsp;143 effective January&nbsp;1, 2003. The
adoption did not have any impact on the consolidated financial
statements.
</FONT>

<P align="left">
<FONT size="2">In November 2002, the FASB issued FASB
Interpretation No.&nbsp;(&#147;FIN&#148;)&nbsp;45,
&#147;Guarantor&#146;s Accounting and Disclosure Requirements
for Guarantees,&nbsp;Including Indirect Guarantees of
Indebtedness of Others.&#148; FIN&nbsp;45 requires that upon
issuance of a guarantee, the guarantor must recognize a
liability for the fair value of the obligation it assumes under
that guarantee. In addition, FIN&nbsp;45 requires additional
disclosures about the guarantees that an entity has issued,
including a reconciliation of the changes in the entity&#146;s
product warranty liabilities during the reporting period. The
initial recognition and measurement provisions of FIN&nbsp;45
are applicable on a prospective basis to guarantees issued or
modified after December&nbsp;31, 2002. We adopted the provisions
of this statement effective January&nbsp;1, 2003. The adoption
of the recognition and measurement provisions did not have a
material impact on the consolidated financial statements.
</FONT>

<P align="left">
<FONT size="2">During January 2003, the FASB issued FIN
No.&nbsp;46, &#147;Consolidation of Variable Interest
Entities,&#148; which clarifies the consolidation and disclosure
requirements related to variable interests in a variable
interest entity. A variable interest entity is an entity for
which control is achieved through means other than voting
rights. In December 2003, the FASB issued a revision to FIN
No.&nbsp;46, which replaced FIN No.&nbsp;46. The revised
Interpretation (&#147;FIN&nbsp;46-R&#148;) must be adopted by
us, based upon our status as a non-public entity as defined by
FIN&nbsp;46-R, beginning on January&nbsp;1, 2005 for interests
in entities created on or before December&nbsp;31, 2003 and as
of the date we first become involved with a potential variable
interest entity created after December&nbsp;31, 2003.
</FONT>

<P align="left">
<FONT size="2">FIN&nbsp;46-R provides exceptions from its scope
for certain entities, including qualifying special-purpose
securitization entities subject to the reporting requirements of
SFAS&nbsp;No.&nbsp;140 and business entities, as defined, that
do not possess certain characteristics.
</FONT>

<P align="left">
<FONT size="2">Our primary variable interests are notes
receivable that have not been sold and are comprised primarily
of equipment loans to laundromat operators and other end-users.
Excluding notes awaiting sale, the carrying value of such loans
was approximately $4.5&nbsp;million at December&nbsp;31, 2003.
We are continuing our evaluation of FIN&nbsp;46-R and
accordingly, at this time cannot determine the effects of
adoption, if any, on our consolidated financial statements. If
in the future, however, we are required to consolidate a variable
</FONT>

<P align="center"><FONT size="2">F-12
</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="center">
<B>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<FONT size="2">interest entity in which one or both of our
SFAS&nbsp;No.&nbsp;140 qualifying special-purpose entities also
holds a variable interest, the qualifying status of the
special-purpose entity with such holdings would be eliminated.
In that instance, we would be required to determine if we are
the primary beneficiary of the affected securitization entity
under FIN&nbsp;46-R and if so, to consolidate that entity, which
would have a material effect on our consolidated financial
position, results of operations and cash flows.
</FONT>

<P align="left">
<FONT size="2">During April 2003, the FASB issued
SFAS&nbsp;No.&nbsp;149, &#147;Amendment of Statement 133 on
Derivative Instruments and Hedging Activities,&#148; which
amends and clarifies financial accounting and reporting for
certain derivative instruments modified or entered into after
June&nbsp;30, 2003. Generally, the provisions of
SFAS&nbsp;No.&nbsp;149 are effective beginning July&nbsp;1,
2003. We adopted SFAS&nbsp;No.&nbsp;149 effective July&nbsp;1,
2003. The adoption did not have any impact on our consolidated
financial statements.
</FONT>

<P align="left">
<FONT size="2">During May 2003, the FASB issued
SFAS&nbsp;No.&nbsp;150, &#147;Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and
Equity,&#148; which establishes standards for the classification
and measurement of certain financial instruments with
characteristics of both liabilities and equity. The FASB has
also subsequently issued certain Staff Positions that
effectively amended SFAS&nbsp;No.&nbsp;150. The statement is
effective for us beginning January&nbsp;1, 2004. The adoption of
SFAS&nbsp;No.&nbsp;150, as amended, will result in
classification of our mandatorily redeemable preferred equity as
a liability.
</FONT>

<P align="left">
<FONT size="2">During December 2003, the FASB revised
SFAS&nbsp;No.&nbsp;132, &#147;Employers&#146; Disclosures about
Pensions and Other Postretirement Benefits,&#148; to require
additional disclosures about the assets, obligations, cash
flows, and net periodic benefit cost of defined benefit pension
plans and other defined benefit postretirement plans. These
disclosure requirements are effective immediately for our plans,
except for estimated future benefit payments, which will be
effective in 2004. This statement also requires interim-period
disclosures of the components of net periodic benefit cost and,
if significantly different from previously disclosed amounts,
the amount of contributions and projected contributions to fund
pension and other postretirement benefit plans. These
interim-period disclosures will be effective for us in the first
quarter of 2004.
</FONT>

<P align="left">
<FONT size="2">In December 2003, the Staff of the SEC issued
Staff Accounting Bulletin (&#147;SAB&#148;) No.&nbsp;104
(&#147;SAB No.&nbsp;104&#148;), &#147;Revenue Recognition&#148;,
which supersedes SAB No.&nbsp;101, &#147;Revenue Recognition in
Financial Statements&#148;. SAB No.&nbsp;104&#146;s primary
purpose is to rescind accounting guidance contained in SAB
No.&nbsp;101 related to multiple element revenue arrangements,
superseded as a result of the issuance of EITF&nbsp;00-21,
&#147;Accounting for Revenue Arrangements with Multiple
Deliverables.&#148; Additionally, SAB No.&nbsp;104 rescinds the
SEC&#146;s Revenue Recognition in Financial Statements
Frequently Asked Questions and Answers (the &#147;FAQ&#148;)
issued with SAB No.&nbsp;101. Selected portions of the FAQ have
been incorporated into SAB No.&nbsp;104. While the wording of
SAB No.&nbsp;104 has changed to reflect the issuance of
EITF&nbsp;00-21, the revenue recognition principles of SAB
No.&nbsp;101 remain largely unchanged by the issuance of SAB
No.&nbsp;104. The adoption of SAB No.&nbsp;104 did not have any
impact upon our consolidated financial statements.
</FONT>

<P align="left">
<FONT size="2">The FASB is expected to re-expose a proposed
statement in the first quarter of 2004 that would amend and
clarify SFAS&nbsp;No.&nbsp;140 (and related implementation
guidance). The proposed statement will address permitted
activities of qualifying special-purpose entities, including the
degree of discretion allowable in determining the terms of
beneficial interests issued after inception, and whether certain
transfers can meet the criteria for sale accounting under
SFAS&nbsp;No.&nbsp;140 if the transferor or any consolidated
affiliate provides liquidity support for the transferee&#146;s
beneficial interests. As the proposed statement has not been
issued, we are unable to determine the effects, if any, on our
existing securitization entities, or the related transition
provisions. However, in the event that transfers to our existing
asset backed facility would no longer qualify as sales of
financial assets in the future, we may recognize additional
costs for a replacement facility or other material financial
statement effects.
</FONT>

<P align="center"><FONT size="2">F-13
</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="center">
<B>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

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

<P align="left">
<FONT size="2">Certain amounts in the prior year financial
statements have been reclassified to conform to the current year
presentation.
</FONT>

<P align="left">
<B><FONT size="2">Note&nbsp;3&#151;Infrequently Occurring
Items:</FONT></B>

<P align="left">
<FONT size="2">We entered into an amended and restated credit
agreement dated as of August&nbsp;2, 2002. As a result, we
recorded a loss on early extinguishment of debt of approximately
$2.0&nbsp;million, to write-off unamortized debt issuance costs
related to our prior term loan and revolving credit facilities.
</FONT>

<P align="left">
<FONT size="2">During 2002 we wrote-off $3.4&nbsp;million for
certain costs incurred while pursuing an initial public offering
through a Canadian Income Trust. Due to market conditions, we
determined that such a public offering would not be advantageous
to Alliance at that time.
</FONT>

<P align="left">
<FONT size="2">We entered into a new asset backed facility dated
as of November&nbsp;26, 2002. As a result, we recorded
transaction expenses of $10.9&nbsp;million.
</FONT>

<DIV>&nbsp;</DIV>

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

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

<TR valign="top">
    <TD><B><FONT size="2">Note&nbsp;4&#151;</FONT></B></TD>
    <TD>
    <B><FONT size="2">Equipment Financing and Sales of Notes
    Receivable:</FONT></B></TD>
</TR>

</TABLE>

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

<P align="left">
<FONT size="2">We maintain an internal financing organization to
originate and administer promissory notes for financing of
equipment purchases for primarily laundromats. These notes
typically have terms ranging from Prime plus 1.0% to Prime plus
6.0% for variable rate notes and 7.9% to 14.5% for fixed rate
notes. The average interest rate for all notes at
December&nbsp;31, 2003 approximates 8.0% with terms ranging from
2 to 9&nbsp;years. All notes allow the holder to prepay
outstanding principal amounts without penalty, and are therefore
subject to prepayment risk.
</FONT>

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

<P align="left">
<FONT size="2">On November&nbsp;26, 2002, Alliance, through a
special-purpose bankruptcy remote subsidiary, Alliance Laundry
Equipment Receivables 2002 LLC (&#147;ALER 2002&#148;), and a
trust, Alliance Laundry Equipment Receivables Trust 2002-A
(&#147;ALERT 2002A&#148;), entered into a three year
$300.0&nbsp;million revolving facility (the &#147;Asset Backed
Facility&#148;), backed by equipment loans and trade receivables
originated by us. During the first three years of the new Asset
Backed Facility, we are permitted, from time to time, to sell
our trade receivables and certain equipment loans to the
special-purpose subsidiary, which in turn will transfer them to
the trust. The trust finances the acquisition of the trade
receivables and equipment loans through borrowings under the
Asset Backed Facility, which are limited to an advance rate of
approximately 95% for equipment loans and 60-70% for trade
receivables. Funding availability for trade receivables is
limited to a maximum of $60.0&nbsp;million, while funding for
equipment loans is limited at $300.0&nbsp;million less the
amount of funding outstanding for trade receivables. Funding for
the trade receivables and equipment loans is subject to certain
eligibility criteria, including concentration and other limits,
standard for transactions of this type. After three years from
the closing date, which is December&nbsp;2, 2005, (or earlier in
the event of a rapid amortization event or an event of default),
the trust will not be permitted to request new borrowings under
the facility and the outstanding borrowings will amortize over a
period of up to nine years. As of December&nbsp;31, 2003, the
balance of variable funding notes due to lenders under the Asset
Backed Facility for equipment loans was $187.8&nbsp;million.
</FONT>

<P align="left">
<FONT size="2">Additional advances under the Asset Backed
Facility are subject to certain continuing conditions, including
but not limited to (i)&nbsp;the weighted average life, weighted
average interest rate, and the amount of fixed rate equipment
loans held by the trust, (ii)&nbsp;the absence of a rapid
amortization event or event of default,
</FONT>

<P align="center"><FONT size="2">F-14
</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>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<FONT size="2">as defined, (iii)&nbsp;our compliance, as
servicer, with certain financial covenants, and (iv)&nbsp;no
event having occurred which materially and adversely affects our
operations.
</FONT>

<P align="left">
<FONT size="2">The variable funding notes under the Asset Backed
Facility will commence amortization and borrowings thereunder
will cease prior to three years after the closing date upon the
occurrence of certain &#147;rapid amortization events&#148;
which include: (i)&nbsp;a borrowing base shortfall exists and
remains uncured, (ii)&nbsp;delinquency, dilution or default
ratios on pledged receivables and equipment loans exceeding
certain specified ratios in any given month, (iii)&nbsp;the days
sales outstanding on receivables exceed a specified number of
days, (iv)&nbsp;the occurrence and continuance of an event of
default or servicer default under the Asset Backed Facility,
including but not limited to, as servicer, a material adverse
change in our business or financial condition and our compliance
with certain required financial covenants, and (v)&nbsp;a number
of other specified events.
</FONT>

<P align="left">
<FONT size="2">The risk of loss to the note purchasers under the
new Asset Backed Facility resulting from default or dilution on
the trade receivables and equipment loans is protected by credit
enhancement, provided by us in the form of cash reserves,
letters of credit and overcollateralization. Further, the timely
payment of interest and the ultimate payment of principal on the
facility is guaranteed by Ambac Assurance Corporation. All of
the residual beneficial interests in the trust and cash flows
remaining from the pool of receivables and loans after payment
of all obligations under the Asset Backed Facility would accrue
to our benefit. Except for the retained interests and amounts of
the letters of credit outstanding from time to time as credit
enhancement, we provide no support or recourse for the risk of
loss relating to default on the assets transferred to the trust.
In addition, we are paid a monthly servicing fee equal to
one-twelfth of 1.0% of the aggregate balance of such trade
receivables and equipment loans.
</FONT>

<P align="left">
<FONT size="2">The estimated fair value of our beneficial
interests in the accounts receivable and notes sold to ALERT
2002A are based on the amount and timing of expected
distributions to us as the holder of the trust&#146;s residual
equity interests. Such distributions may be substantially
deferred or eliminated, and result in an impairment of our
residual interests, if repayment of the variable funding notes
issued by ALERT 2002A is accelerated upon an event of default or
rapid amortization event described above.
</FONT>

<P align="left">
<FONT size="2">The Asset Backed Facility replaces a similar
facility previously maintained with Lehman Commercial
Paper,&nbsp;Inc. (the &#147;ALRW Facility&#148;). In connection
with the establishment of the new facility, Alliance, through
its special-purpose subsidiaries repurchased and simultaneously
resold the assets held by the ALRW Facility to the new Asset
Backed Facility. Included in 2002 commercial laundry revenue is
a gain of approximately $2.0&nbsp;million related to these
transactions, essentially reflecting the sale of notes
receivable under the Asset Backed Facility and the recognition
of previously unrecognized gains related to retained interests
in the ALRW Facility.
</FONT>

<P align="left">
<FONT size="2">Prior to the Recapitalization, Alliance, through
a special-purpose bankruptcy remote entity Alliance Commercial
Appliances Finance LLC (&#147;ACAF&#148;), entered into an
agreement dated March&nbsp;26, 1997, with Falcon Asset
Securitization Corporation (&#147;Falcon&#148;) and Bank One,
NA, as agent for Falcon. Pursuant to that agreement, the
special-purpose entity sold to Falcon defined pools of notes
receivable purchased from the Company. ACAF stopped selling
notes receivable to Falcon as of May&nbsp;4, 1998 and, as of
June&nbsp;30, 2003 the facility was terminated.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Sales
of Notes Receivable</FONT></I>

<P align="left">
<FONT size="2">Gains on sales of notes receivable and other net
finance program income in 2003, 2002, and 2001 of approximately
$6.3&nbsp;million, $7.2&nbsp;million, and $6.5&nbsp;million,
respectively, is included in commercial laundry revenue.
</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>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<FONT size="2">Pursuant to the terms of the ALRW Facility, on
November&nbsp;28, 2000, the Company, through a wholly-owned
subsidiary, Alliance Laundry Equipment Receivables LLC
(&#147;ALER&#148;) and Alliance Laundry Equipment Receivable
Trust 2000-A (&#147;ALERT&#148;), a trust formed by ALER,
completed the securitization of $137.8&nbsp;million of notes
receivable related to equipment loans. The transaction was
financed by the issuance of $128.2&nbsp;million of equipment
loan-backed notes issued by ALERT and certain interests retained
by us. Proceeds from the issuance of the notes by ALERT were
used to repay amounts outstanding under the ALRW Facility, with
the balance received by us in settlement of our related retained
interests. We hold all of the residual equity interests of the
trust, which we do not consolidate based upon its
special-purpose bankruptcy remote status, and we are paid a
monthly servicing fee equal to one-twelfth of 1.0% of the
aggregate balance of loans held by the trust. At
December&nbsp;31, 2003 and 2002, we have recorded
$5.1&nbsp;million and $7.6&nbsp;million, respectively, related
to the estimated fair value of our beneficial interests in the
notes sold to the trust.
</FONT>

<P align="left">
<FONT size="2">The estimated fair value of our beneficial
interests in the notes sold to the trust are based on the amount
and timing of expected distributions to us as the holder of the
trust&#146;s residual equity interests. Such distributions may
be substantially deferred or eliminated, and result in an
impairment of our residual interests, if repayment of amounts
due under the notes issued by ALERT is accelerated upon an event
of default or early payout event, as defined. These events
include (i)&nbsp;delinquency or default ratios on equipment
loans exceeding certain specified levels, (ii)&nbsp;a failure by
us, as servicer, to comply with certain financial covenants or
maintain minimum credit ratings with respect to our senior
secured or senior subordinated unsecured obligations,
(iii)&nbsp;a material adverse change in our business or
financial condition, and (iv)&nbsp;a number of other specified
events.
</FONT>

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

<P align="left">
<FONT size="2">The table below summarizes certain information
regarding our equipment loan portfolio, delinquencies, and cash
flows received from and paid to our special-purpose
securitization entities:
</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="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="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <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="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></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">December&nbsp;31, 2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31, 2002</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"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Principal Amount of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Principal Amount of</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Principal</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Loans 60&nbsp;Days or</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Principal</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Loans 60&nbsp;Days or</FONT></B></TD>
</TR>

<TR>
    <TD></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">More Past Due</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">More Past Due</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">Total Portfolio
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">244,127</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6,643</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">244,964</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,369</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: Loans Sold
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">234,266</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">4,693</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">232,498</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,061</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 valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loans Held
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,861</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,950</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12,466</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,308</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 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>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Allowance for loan losses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,700</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><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,300</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><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><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" 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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,161</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,166</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><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><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT 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>

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

<TR>
    <TD width="55%"><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="5%"><FONT size="2">&nbsp;</FONT></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">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">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&nbsp;31,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></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">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Proceeds from sales of loans
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">94,083</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">89,644</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">111,044</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">Purchase of delinquent or foreclosed assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(8,818</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">(11,354</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">Servicing fees and other net cash flows received
    on retained&nbsp;interests
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">14,475</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16,411</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,555</FONT></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>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<FONT size="2">Our credit losses, on a total portfolio basis, as
a percentage of average loans outstanding during 2003, 2002 and
2001 were 0.89%, 1.12% and 2.05%, respectively. The following
presents activity in the allowance for loan losses related to
loans held on-balance sheet:
</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="44%"><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="4%"><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="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Beginning</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Charges to</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Balance at</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">of Period</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Expense</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Deductions</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">End of Period</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">Year ended:
    </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">December&nbsp;31, 2001
    </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">2,614</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">2,895</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,693</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">816</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">December&nbsp;31, 2002
    </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">816</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,143</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">2,659</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,300</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">December&nbsp;31, 2003
    </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">1,300</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">1,844</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,444</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,700</FONT></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>
    <I><FONT size="2">Valuation of Retained Interests</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">With respect to the Asset Backed Facility, we
recognize beneficial interests in notes sold to ALER 2002, which
represents the estimated fair value of our retained interest in
the residual cash flows, including interest earned from notes
sold, and the present value of estimated proceeds from a cash
reserve account. We have also recognized our interest in the
residual equity of ALERT.
</FONT>

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

<TR>
    <TD width="77%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></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">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</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">Beneficial interests in notes sold to ALER 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,539</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,674</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">Other beneficial interests in notes sold&#151;
    ALERT
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,137</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,809</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>

</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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">22,676</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,483</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>

</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">Key economic assumptions used in valuing retained
interests at December&nbsp;31, 2003 and 2002 were as follows:
</FONT>

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

<TR>
    <TD width="75%"><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="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">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</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">Average prepayment speed (per annum)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25.0%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25.0%</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">Expected credit losses (per annum)
    </FONT></DIV>
    </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><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.6% - 1.0%</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">Residual cash flows discounted at
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">12.5%</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">12.5%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">The weighted-average remaining expected life of
notes receivable sold by us was approximately 21&nbsp;months at
December&nbsp;31, 2003.
</FONT>

<P align="left">
<FONT size="2">At December&nbsp;31, 2003 and 2002, key economic
assumptions and the sensitivity of the current fair value
estimates of such retained interests to immediate
10&nbsp;percent and 20&nbsp;percent adverse changes in those
assumptions are as follows:
</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="78%"><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>
</TR>

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

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

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

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Prepayment speed assumption:
    </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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Impact on FV 10% adverse 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">(165</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(222</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">Impact on FV 20% adverse 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">(317</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Expected credit losses:
    </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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Impact on FV 10% adverse 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">(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">(216</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">Impact on FV 20% adverse 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">(501</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(432</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">Residual cash flow discount rate:
    </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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Impact on FV 10% adverse 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">(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">(398</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">Impact on FV 20% adverse 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">(752</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(783</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</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>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<FONT size="2">These sensitivities are hypothetical and the
effect of a variation in a particular assumption on the
estimated fair value of retained interests is calculated without
changing any other assumptions; in reality, changes in one
factor may result in changes in another, which may magnify or
counteract the sensitivities.
</FONT>

<DIV>&nbsp;</DIV>

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

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

<TR valign="top">
    <TD><B><FONT size="2">Note&nbsp;5&#151;</FONT></B></TD>
    <TD>
    <B><FONT size="2">Sales of Accounts Receivable:</FONT></B></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">As described in Note&nbsp;4 above, we, through
our bankruptcy remote subsidiary ALER 2002, entered into the
Asset Backed Facility to finance the sale of all of our trade
receivables and certain eligible notes receivable related to
equipment loans. With respect to the variable funding notes (the
&#147;Notes&#148;) secured by trade receivables, the Asset
Backed Facility lenders will make loans which approximate 60% to
70% of the outstanding amount of trade receivables sold. Funding
for the trade receivables is subject to certain eligibility
criteria, including concentration and other limits, standard for
transactions of this type. As servicer, we retain collection and
administrative responsibilities for the accounts receivable
sold. The total amount of uncollected balances on trade accounts
receivable sold at December&nbsp;31, 2003 was $45.5&nbsp;million
and the variable funding notes due to lenders under the Asset
Backed Facility for trade receivables was $31.8&nbsp;million.
</FONT>

<P align="left">
<FONT size="2">Losses on sales of trade accounts receivable and
related expenses of $1.5&nbsp;million, $1.0&nbsp;million and
$1.8&nbsp;million in 2003, 2002 and 2001, respectively, are
included in selling, general and administrative expense. Our
retained interest in trade accounts receivable sold to ALER 2002
at December&nbsp;31, 2003 and 2002 is $16.8&nbsp;million and
$19.9&nbsp;million, respectively. We stopped selling trade
receivables to ALRW and on December&nbsp;3, 2002, all amounts
outstanding under the ALRW Facility were paid off and ALRW
ceased all activities.
</FONT>

<DIV>&nbsp;</DIV>

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

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

<TR valign="top">
    <TD><B><FONT size="2">Note&nbsp;6&#151;</FONT></B></TD>
    <TD>
    <B><FONT size="2">Inventories:</FONT></B></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Inventories consisted of the following at:
</FONT>

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

<TR>
    <TD width="77%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></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">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</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">Materials and purchased parts
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,167</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,124</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">Work in process
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,074</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,312</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">Finished goods
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,394</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">12,990</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: inventory reserves
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,420</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">(2,729</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>

</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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">26,215</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25,697</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>

</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

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

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

<TR valign="top">
    <TD><B><FONT size="2">Note&nbsp;7&#151;</FONT></B></TD>
    <TD>
    <B><FONT size="2">Property, Plant and Equipment:</FONT></B></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Property, plant and equipment consisted of the
following at:
</FONT>

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

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

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

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></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">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</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">Land
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">910</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">910</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 and 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">29,776</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">29,744</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">Machinery and 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">154,346</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">151,228</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>

</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="right" valign="bottom" nowrap><FONT size="2">185,032</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">181,882</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: accumulated depreciation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(152,246</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">(144,426</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>

</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="right" valign="bottom" nowrap><FONT size="2">32,786</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="bottom" nowrap><FONT size="2">37,456</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">Construction in progress
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,249</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">1,640</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>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34,035</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,096</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>

</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>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<FONT size="2">Depreciation expense was $8.6&nbsp;million,
$10.4&nbsp;million and $11.8&nbsp;million for the years ended
December&nbsp;31, 2003, 2002 and 2001, respectively.
</FONT>

<DIV>&nbsp;</DIV>

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

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

<TR valign="top">
    <TD><B><FONT size="2">Note&nbsp;8&#151;</FONT></B></TD>
    <TD>
    <B><FONT size="2">Other Current Liabilities:</FONT></B></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">The major components of other current liabilities
consisted of the following at:
</FONT>

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

<TR>
    <TD width="77%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></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">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</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">Warranty reserve
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,759</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,890</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 incentives
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,626</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">3,885</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">Salaries, wages and other employee 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">5,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,769</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">6,066</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">5,805</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">Other 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">1,877</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,289</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>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,428</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,638</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>

</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

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

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

<TR valign="top">
    <TD><B><FONT size="2">Note&nbsp;9&#151;</FONT></B></TD>
    <TD>
    <B><FONT size="2">Debt:</FONT></B></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Debt consisted of the following at:
</FONT>

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

<TR>
    <TD width="75%"><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></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></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">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</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">Term loan facility
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">157,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">183,000</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">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">110,000</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">110,000</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">Junior subordinated note
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24,171</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20,312</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">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">&#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">&#150;</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">Other 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">1,028</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,265</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="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</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">Gross 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">292,199</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">314,577</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: current portion
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(11,270</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">(9,971</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>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">280,929</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">304,606</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>

</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>
    <I><FONT size="2">Senior Credit Facility</FONT></I></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">On August&nbsp;2, 2002 we amended and restated
our May of 1998 credit agreement with a syndicate of financial
institutions. The amended and restated credit facility (the
&#147;Senior Credit Facility&#148;) is comprised of a term loan
facility aggregating $193.0&nbsp;million (the &#147;Term
Loan&nbsp;Facility&#148;) and a $45.0&nbsp;million revolving
credit facility (the &#147;Revolving Credit Facility&#148;).
Among other modifications, the amended and restated agreement
extends the Senior Credit Facility termination date from
May&nbsp;5, 2003 to August&nbsp;5, 2007. The Term
Loan&nbsp;Facility requires principal payments of
$2,205&nbsp;per quarter through June 2004, payments of
$3,308&nbsp;per quarter for September 2004 through June 2006,
and payments of $5,513&nbsp;per quarter for September 2006
through March 2007. Final payment of $109,591 is due August
2007. We are required to make prepayments with the proceeds from
the disposition of certain assets and from excess cash flow, as
defined.
</FONT>

<P align="left">
<FONT size="2">The Term Loan&nbsp;Facility bears interest, at
our election, at either the Lenders&#146; Base Rate plus a
margin of 2.5% or the Eurodollar Rate plus a margin of 3.5%. The
Revolving Credit Facility bears interest, at our election, at
either the Base Rate plus a margin ranging from 1.5% to 2.5% or
the Eurodollar Rate plus a margin ranging from 2.5% to 3.5%.
</FONT>

<P align="left">
<FONT size="2">The interest rate on term loan borrowings
outstanding at December&nbsp;31, 2003 and 2002 was 4.7% and
5.3%, respectively. Borrowings outstanding under the Senior
Credit Facility are secured by substantially all of the
</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>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<FONT size="2">real and personal property of the Company and its
domestic subsidiaries (other than the financing subsidiaries).
Letters of credit issued on our behalf under the Revolving
Credit Facility totaled $25.3&nbsp;million at December&nbsp;31,
2003.
</FONT>

<P align="left">
<FONT size="2">Additional borrowings and the issuance of
additional letters of credit under the Senior Credit Facility
are subject to certain continuing representations and
warranties, including the absence of any development or event
which has had or could reasonably be expected to have a material
adverse effect on our business or financial condition.
</FONT>

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

<P align="left">
<FONT size="2">Also on May&nbsp;5, 1998, the Company and its
wholly-owned subsidiary, Alliance Laundry Corporation, issued
$110.0&nbsp;million of 9&nbsp;5/8%&nbsp;senior subordinated
notes due in 2008 (the &#147;Notes&#148;) to Lehman Brothers
Inc. and Credit Suisse First Boston Corporation (the
&#147;Initial Purchasers&#148;). The Initial Purchasers
subsequently resold the Notes to qualified institutional buyers
pursuant to Rule&nbsp;144A of the Securities and Exchange Act
and to a limited number of institutional accredited investors
that agreed to comply with certain transfer restrictions and
other conditions.
</FONT>

<P align="left">
<FONT size="2">The Notes are general unsecured obligations and
are subordinated in right of payment to all current and future
senior debt, including permitted borrowings under the Senior
Credit Facility.
</FONT>

<P align="left">
<FONT size="2">Interest on the Notes accrues at the rate of
9&nbsp;5/8%&nbsp;per annum and is payable semi-annually in
arrears on May&nbsp;1 and November 1. The fair value of the
Notes at December&nbsp;31, 2003 and 2002 was approximately
$110.6&nbsp;million and $93.5&nbsp;million, respectively, based
upon prices prevailing in recent market transactions.
</FONT>

<P align="left">
<FONT size="2">The Notes are subject to redemption at any time
at the option of the Company, in whole or in part, upon not less
than 30 nor more than 60&nbsp;days notice, at the redemption
prices (expressed as percentages of principal amount) set forth
below plus accrued and unpaid interest thereon, if any, to the
applicable redemption date, if redeemed during the twelve-month
period beginning on May&nbsp;1 of the years indicated 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">Year</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">2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">104.813%</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">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">103.208%</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">2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">101.604%</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 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">100.000%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">We are required under the terms of the Notes to
offer to redeem the Notes at a redemption price of 101% of the
principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the redemption date, upon a change of
control, as defined. Further, we are required to offer to redeem
the Notes at a redemption price of 100% of the principal amount
thereof plus accrued and unpaid interest thereon, if any, to the
redemption date, when the amount of excess proceeds from asset
sales, as defined, exceeds $10&nbsp;million, up to the maximum
principal amount that may be purchased out of such excess
proceeds.
</FONT>

<P align="left">
<FONT size="2">As discussed above, Alliance Laundry and its
wholly-owned subsidiary, Alliance Laundry Corporation, issued
the $110.0&nbsp;million senior subordinated notes. Alliance
Laundry Corporation was incorporated for the sole purpose of
serving as a co-issuer of the Notes in order to facilitate their
issuance. Alliance Laundry Corporation does not have any
substantial operations or assets of any kind. Alliance Laundry
Holdings LLC has provided a full and unconditional guarantee of
the Notes and has no operating activities independent of
Alliance Laundry.
</FONT>

<P align="left">
<FONT size="2">The Senior Credit Facility and the indenture
governing the Notes contain a number of covenants that, among
other things, restrict our ability to dispose of assets, repay
other indebtedness (including, in the
</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>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<FONT size="2">case of the Senior Credit Facility, the Notes),
incur liens, make capital expenditures and make certain
investments or acquisitions, engage in mergers or consolidation
and otherwise restrict our operating activities. In addition,
under the Senior Credit Facility, the Company will be required
to satisfy specified financial ratios and tests, including a
maximum of total debt to EBITDA (earnings before interest,
income taxes, depreciation and amortization) and a minimum
interest coverage ratio.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Junior
Subordinated Promissory Note</FONT></I>

<P align="left">
<FONT size="2">On May&nbsp;5, 1998 we issued a junior
subordinated promissory note (the &#147;Junior Note&#148;) in
the principal amount of $9.0&nbsp;million due August&nbsp;21,
2009, to Raytheon. In late 2003, Raytheon sold all of its debt
and equity interests, which included the Junior Note (see
Note&nbsp;14). Pursuant to the terms of the Junior Note,
interest accrues at the rate of 19.0%&nbsp;per annum until the
eighth anniversary of the date of issuance of the Junior Note
and at a rate of 13.0% thereafter. The Junior Note is
subordinated in priority and subject in right and priority of
payment to certain indebtedness described therein. Interest
which accrues on the Junior Note is payable in-kind.
</FONT>

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

<P align="left">
<FONT size="2">On August&nbsp;3, 2000, we received $750,000 in
borrowings; evidenced by a promissory note, pursuant to a
Wisconsin Community Development Block Grant Agreement (the
&#147;Agreement&#148;) dated July&nbsp;10, 2000 between the
Wisconsin Department of Commerce, Alliance Laundry and Fond du
Lac County, Wisconsin. The promissory note bears interest at an
annual rate of 4%, with monthly payments of interest and
principal commencing July&nbsp;1, 2001 with the final
installment paid on June&nbsp;1, 2010, subject to the covenants
of the Agreement.
</FONT>

<P align="left">
<FONT size="2">On August&nbsp;14, 2001, we received $812,000 in
effective borrowings, evidenced by a promissory agreement,
pursuant to an equipment financing transaction with Alliant
Energy&#151; Wisconsin Power&nbsp;&#38; Light Company. The
agreement requires monthly payments commencing
September&nbsp;14, 2001 with the final installment paid on
July&nbsp;14, 2006, subject to the covenants of the Agreement.
The stated payments reflect a 3% imputed interest rate.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><I><FONT size="2">Debt
Maturities and Liquidity Considerations</FONT></I>

<P align="left">
<FONT size="2">The aggregate scheduled maturities of long-term
debt in subsequent years are as follows:
</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">2004
    </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">11,270</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">2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">13,484</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">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">17,844</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">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">115,196</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">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">110,095</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">24,310</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">292,199</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>

<P align="left">
<FONT size="2">At December&nbsp;31, 2003, based upon the maximum
ratio of consolidated debt to EBITDA (as defined) allowable
under the Senior Credit Facility, we could have borrowed an
additional $19.7&nbsp;million of the total $19.7&nbsp;million
unutilized under the Revolving Credit Facility to finance our
operations. The maximum ratio of consolidated debt to EBITDA
under the Senior Credit Facility is scheduled to be reduced from
5.50 at December&nbsp;31, 2003 to 4.75 at December&nbsp;31,
2004. We believe that future cash flows from operations,
together with available borrowings under the Revolving Credit
Facility, will be adequate to meet our anticipated requirements
for capital expenditures, working capital, interest payments,
scheduled principal payments and other debt repayments
throughout 2004 that may be required as a result of the
scheduled reduction in the ratio of consolidated debt to EBITDA
discussed above.
</FONT>

<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>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<B><FONT size="2">Note&nbsp;10&#151; Mandatorily Redeemable
Preferred Equity and Members&#146; Equity (Deficit):</FONT></B>

<P align="left">
<FONT size="2">Members&#146; deficit at December&nbsp;31, 2003
and 2002 consists of the following:
</FONT>

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

<TR>
    <TD width="72%"><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></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">December&nbsp;31,</FONT></B></TD>
</TR>

<TR>
    <TD></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">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</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">Common members&#146; contributed capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,645</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">50,645</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">Retained earnings (accumulated 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">(193,688</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(209,607</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">Accumulated other comprehensive 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">(1,386</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,417</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">Management investor promissory 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">(1,329</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,361</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>

</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">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(145,758</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(166,740</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="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">
<FONT size="2">As discussed in Note&nbsp;1, the May&nbsp;5, 1998
merger was accounted for as a recapitalization and accordingly,
the historical accounting basis of assets and liabilities was
unchanged. As such, the consideration paid for the Company,
including the premium paid over the Company&#146;s May&nbsp;5,
1998&nbsp;net book value, was recorded as a reduction of
members&#146; equity.
</FONT>

<P align="left">
<FONT size="2">Bain/ RCL, L.L.C., a Delaware limited liability
company (&#147;Bain LLC&#148;), certain management and other
third party investors and Raytheon (collectively, the
&#147;Members&#148;) have entered into an Amended and Restated
Limited Liability Company Agreement (the &#147;LLC
Agreement&#148;). The LLC Agreement governs the relative rights
and duties of the Members.
</FONT>

<P align="left">
<FONT size="2">The ownership interests of the Members in the
Company consist of preferred units (the &#147;Preferred
Units&#148;) and common units (the &#147;Common Units&#148;).
Holders of the Preferred Units are entitled to a return of
capital contributions prior to any distributions made to holders
of the Common Units. The Common Units represent the common
equity of the Company.
</FONT>

<P align="left">
<I><FONT size="2">Preferred
Units</FONT></I><FONT size="2">&#151; Upon consummation of the
Recapitalization, we issued mandatorily redeemable preferred
membership interests (the &#147;Seller Preferred Equity&#148;)
with a liquidation value of $6.0&nbsp;million to Raytheon. In
late 2003, Raytheon sold all of its debt and equity interests
(see Note&nbsp;14). The Seller Preferred Equity does not
accrete, accrue or pay dividends and is redeemable at the
earlier of (i)&nbsp;a change of control (as defined in the LLC
Agreement), (ii)&nbsp;any initial public offering or
(iii)&nbsp;2009. The holders of the Seller Preferred Equity are
entitled to receive distributions from us in an amount equal to
their unreturned capital (as defined in the LLC Agreement) prior
to distributions in respect of any other membership interests of
the Company.
</FONT>

<P align="left">
<I><FONT size="2">Common Units</FONT></I><FONT size="2">&#151;
The Common Units of our Company are divided into the following
four classes:
</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">
    <I><FONT size="2">Class&nbsp;L
    Units</FONT></I><FONT size="2">&#151; These units provide a
    yield of 12% on the unreturned capital and unpaid yield (as
    defined), compounded quarterly. Such accumulated and unpaid
    amounts totaled $43.4&nbsp;million and $33.5&nbsp;million at
    December&nbsp;31, 2003 and 2002, respectively. Class&nbsp;L
    Units do not provide any voting rights to the holders.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <I><FONT size="2">Class&nbsp;A
    Units</FONT></I><FONT size="2">&#151; These units are the
    primary vehicle of equity ownership in the Company. Class&nbsp;A
    Units are the only units that provide voting rights. Decisions
    made by a majority of the voting holders of Class&nbsp;A Units
    are binding on us, provided that members holding at least 20% of
    the Class&nbsp;A Units are present.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <I><FONT size="2">Class&nbsp;B and C
    Units</FONT></I><FONT size="2">&#151; Class&nbsp;B Units and
    Class&nbsp;C Units do not provide any voting rights to the
    holders. These units are not eligible to receive distributions
    until we achieve the defined target multiple applicable to each
    class of units. The target multiple is calculated as the sum of
    all distributions to all holders of Class&nbsp;L and
    Class&nbsp;A Units divided by the sum of all capital
    contributions made by such holders. Class&nbsp;B Units become
    eligible to receive distributions when
    </FONT></TD>
</TR>

</TABLE>

<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>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>
<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">vested and the target multiple reaches or exceeds
    1.0 and the Class&nbsp;C Units become eligible when vested and
    the target multiple reaches or exceeds 3.0. Pursuant to
    agreements entered into with the members of management who
    participated in the purchase of membership interests (see
    Note&nbsp;14), the Class&nbsp;B and Class&nbsp;C Units vested
    ratably from May&nbsp;5, 1998 through May&nbsp;5, 2003.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <I><FONT size="2">Class&nbsp;M
    Units</FONT></I><FONT size="2">&#151; On August&nbsp;1, 2003, we
    amended and restated our Limited Liability Agreement to issue
    Class&nbsp;M Units and to issue incremental Class&nbsp;B Units,
    which in turn have been issued to certain members of management
    (each an &#147;Executive&#148;). The Class&nbsp;M Units
    participate in the yield earned on Class&nbsp;L Units above a
    defined level and have a higher priority in any distributions as
    compared to the Company&#146;s Class&nbsp;A, Class&nbsp;B and
    Class&nbsp;C Units. These units were issued in return for the
    Executive&#146;s present service to the Company and as an
    incentive for the Executive to continue to provide future
    services to the Company. These units are subject to certain
    terms and conditions which include vesting provisions.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<I><FONT size="2">Distributions</FONT></I><FONT size="2">&#151;
Subject to any restrictions contained in any financing
agreements to which we or any of our affiliates (as defined in
the LLC Agreement) is a party, the Board of Managers (the
&#147;Board&#148;) may make distributions, whether in cash,
property, or securities of the Company, at any time in the
following order of priority:
</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">
    <I><FONT size="2">First, </FONT></I><FONT size="2">to the
    holders of Preferred Units, an amount determined by the
    aggregate unreturned capital.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <I><FONT size="2">Second, </FONT></I><FONT size="2">to the
    holders of Class&nbsp;L Units, an amount equal to the aggregate
    unreturned capital of $45.6&nbsp;million.
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <I><FONT size="2">Third, </FONT></I><FONT size="2">to the
    holders of Class&nbsp;L Units, the unpaid yield accrued on such
    Class&nbsp;L Units in an amount up to $900&nbsp;per Class&nbsp;L
    Unit ($5.1&nbsp;million).
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <I><FONT size="2">Fourth, </FONT></I><FONT size="2">ratably to
    the holders of Class&nbsp;L Units and Class&nbsp;M Units, any
    remaining unpaid yield accrued on the Class&nbsp;L Units
    ($38.3&nbsp;million at December&nbsp;31, 2003).
    </FONT></TD>
</TR>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <I><FONT size="2">Fifth, </FONT></I><FONT size="2">ratably to
    the holders of Common Units, an amount equal to the amount of
    such distribution that has not been distributed pursuant to the
    clauses described above, including achievement of the
    Class&nbsp;B and C Unit target multiples.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">We may distribute to each holder of units within
75&nbsp;days after the close of each fiscal year such amounts as
determined by the Board to be appropriate to enable each holder
of units to pay estimated income tax liabilities. There were no
distributions to holders of units during 2003, 2002 or 2001.
</FONT>

<P align="left">
<I><FONT size="2">Allocations</FONT></I><FONT size="2">&#151;
Profits and losses of our Company are allocated among the
various classes of units in order to adjust the capital accounts
of such holders to the amount to be distributed upon liquidation
of the Company.
</FONT>

<P align="left">
<I><FONT size="2">Restrictions on Transfer of
Securities</FONT></I><FONT size="2">&#151; No holder of
securities may sell, assign, pledge or otherwise dispose of any
interest in the holder&#146;s securities except that
(i)&nbsp;Bain LLC may transfer its securities to other security
holders in the same class, (ii)&nbsp;holders may transfer their
securities through applicable laws of descent and distribution,
(iii)&nbsp;transfers of securities may be made to an affiliate,
and (iv)&nbsp;the Preferred Units may be transferred with the
consent of the Board.
</FONT>

<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>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<DIV>&nbsp;</DIV>

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

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Note&nbsp;11&#151;</FONT></B></TD>
    <TD>
    <B><FONT size="2">Commitments and Contingencies:</FONT></B></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">At December&nbsp;31, 2003, we had commitments
under long-term operating leases requiring approximate annual
rentals in subsequent years as follows:
</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">2004
    </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">507</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">2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">389</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">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">210</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">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">33</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">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">33</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">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">18</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">1,190</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>

<P align="left">
<FONT size="2">Rental expense for 2003, 2002 and 2001 amounted
to $1.1&nbsp;million, $1.0&nbsp;million and $1.1&nbsp;million,
respectively.
</FONT>

<P align="left">
<FONT size="2">Our Marianna, Florida plant is located on
property leased from the Marianna Municipal Airport Development
Authority (acting on behalf of the City of Marianna). The lease
expires on February&nbsp;28, 2005 and may be renewed at our
option for five additional consecutive ten year terms.
</FONT>

<P align="left">
<FONT size="2">Our Company and its operations are subject to
comprehensive and frequently changing federal, state and local
environmental and occupational health and safety laws and
regulations, including laws and regulations governing emissions
of air pollutants, discharges of waste and storm water and the
transportation, storage and disposal of wastes, including solid
and hazardous wastes. We are also subject to potential liability
for non-compliance with other environmental laws and for the
investigation and remediation of environmental contamination
(including contamination caused by other parties) at the
properties we own or operate (or formerly owned or operated) and
at other properties where the Company or predecessors have
carried on business or have arranged for the disposal of
hazardous substances. As a result, we are involved, from time to
time, in administrative and judicial proceedings and inquiries
relating to environmental matters. There can be no assurance
that we will not be involved in such proceedings in the future
and that the aggregate amount of future clean-up costs and other
environmental liabilities (including potential fines and civil
damages) will not have a material adverse effect on our
business, financial position and results of operations. However,
in our opinion, any liability related to matters presently
pending will not have a material effect on our financial
position, liquidity or results of operations after considering
provisions already recorded.
</FONT>

<P align="left">
<FONT size="2">In September 1999, Juan Carlos Lopez pursued an
arbitration against Alliance Laundry Sociedad Anonima
(&#147;ALSA&#148;), a foreign subsidiary of Alliance Laundry
Systems LLC, under UNCITRAL rules in Buenos Aires, Argentina,
seeking in pertinent part, to be paid fees arising from a
Consulting Agreement, and indemnification for lost profits in
Argentina and Brazil, plus damages for pain and suffering. An
arbitration was conducted by an &#147;ad-hoc&#148; panel (the
&#147;Lopez Arbitration&#148;), during which ALSA contended that
Juan Carlos Lopez failed to fulfill his responsibilities under
the Consulting Agreement and was therefore not entitled to the
fees, and that ALSA was not liable for lost profits in either
Argentina or Brazil, nor for an indemnification for pain and
suffering. On April&nbsp;3, 2001, the Lopez Arbitration was
concluded. The arbitration panel awarded Argentine Pesos
1,408,900 (equivalent to $1.4&nbsp;million U.S.&nbsp;dollars at
the time), plus nine percent interest from September&nbsp;6,
1999, plus ten percent over this principal and interest amount
as moral damages, plus certain fees and costs, while rejecting
other claims of plaintiff. We believed, inasmuch as ALSA was a
foreign subsidiary, ALSA was responsible for its own debts and
obligations. In our opinion based on the advice of counsel,
under the terms of the award, any such payments would have been
forthcoming from the assets of ALSA. On December&nbsp;20, 2001,
ALSA&#146;s bankruptcy was decreed, at the request of
Mr.&nbsp;Lopez, on grounds of non-payment of the arbitration
award.
</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>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<FONT size="2">On December&nbsp;12, 2002, Mr.&nbsp;Lopez filed a
lawsuit with the National Commercial Court Number 13 in Buenos
Aires, Argentina against us for the amount ordered to be paid in
the Lopez Arbitration, plus unspecified damages caused by the
award not having been timely paid.
</FONT>

<P align="left">
<FONT size="2">Because of the risk this lawsuit presented, we
commenced settlement negotiations with Mr.&nbsp;Lopez in the
second quarter of 2003. On July&nbsp;17, 2003 a Settlement,
Release, Discharge and Indemnification Agreement was entered
into by Mr.&nbsp;Lopez and the Company. While denying any
liability whatsoever, we agreed to and paid Mr.&nbsp;Lopez
US$736,440 on August&nbsp;6, 2003 and agreed to deliver to
Mr.&nbsp;Lopez in Brazil commercial laundry equipment, free of
charge, up to a cost to us of US$60,000. In consideration of the
aforementioned payment and delivery of equipment, Mr.&nbsp;Lopez
released and forever discharged, and waived any claims or rights
of any nature whatsoever against the Company and a number of
affiliated subsidiary companies. In addition, Mr.&nbsp;Lopez and
his counsels signed the dismissal of the lawsuit referred to
above. A provision for this settlement was recorded in our 2003
financial statements.
</FONT>

<P align="left">
<FONT size="2">In April, 2002 Alliance was named as a defendant
in a lawsuit filed by Imonex Services,&nbsp;Inc. (the
&#147;Plaintiff&#148;) for patent infringement, arising from a
vendor supplied coin selector, the &#147;W2000&#148;, used in
certain of our products. The vendor, W.&nbsp;H.
M&#252;nzpr&#252;fer Dietmar Trenner GmbH
(&#147;M&#252;nzpr&#252;fer&#148;), has indemnified us and has
agreed to pay and is paying for our representation in this
matter. Plaintiff accused Alliance, and other
M&#252;nzpr&#252;fer customers (the &#147;Defendants&#148;), of
patent infringement resulting from the sales of the W2000 within
the Defendants products. Trial commenced January&nbsp;6, 2003 in
the United States District Court for the Eastern District of
Texas. Following the trial the Court indicated it would enter an
order rendering judgment for the Plaintiff that the asserted
patent claims were infringed, are not invalid, and were not
procured by inequitable conduct. The Court indicated it will
issue a permanent injunction and invited the parties to submit
proposed injunction languages, and objections thereto. The Court
has withheld ruling upon the timelines of Imonex bringing its
damage claims. The Court reduced the jury&#146;s damage verdict
from $10,350,000 ($5,382,000 against the Company with the
remainder against the other Defendants) against all Defendants,
to $490,295 ($267,645 against Allliance with the remainder
against the other Defendants) and gave Plaintiff the option to
accept the reduced damages or have a new trial on damages. On
April&nbsp;28, 2003, Plaintiff filed an election for a new trial
on damages, and filed proposed language for the injunction. The
Defendants filed their objections to the injunction language on
May&nbsp;5, 2003. On August&nbsp;1, 2003, the Court ruled it
will not enhance any damages for willful infringement, while
entering judgment for Plaintiff on the issues of infringement,
and validity of the Plaintiffs&#146; patents. Plaintiff
submitted expert reports at the new trial on damages which
attempted to prove actual damages of $16,267,644 ($6,305,232
against Alliance with the remainder against other Defendants).
On August&nbsp;12, 2003 a preliminary injunction was issued
prohibiting W2000 coin selector usage.
</FONT>

<P align="left">
<FONT size="2">The trial on damages commenced August&nbsp;18,
2003 and yielded a jury verdict of $1,396,873 to Plaintiff
($614,662 against Alliance with the remainder against the other
Defendants) against all Defendants.
</FONT>

<P align="left">
<FONT size="2">Final judgment on the August&nbsp;18, 2003 jury
verdict was rendered on February&nbsp;9, 2004 against all
Defendants. The final judgment included $614,662 against
Alliance, plus prejudgment interest, yielding $771,728 against
Alliance. In addition, the judgment awarded court costs to the
Plaintiff, including attorney&#146;s fees. On February&nbsp;23,
2004 the Plaintiff submitted an application seeking, from all
Defendants, a total of $669,107 in attorneys&#146; fees and
$133,214 in court costs. The preliminary injunction of
August&nbsp;12, 2003 was made permanent. The Defendants have
filed a post judgment motion seeking to have the judgment
amended or set aside.
</FONT>

<P align="left">
<FONT size="2">Our position remains that any liability related
to this lawsuit is properly borne by M&#252;nzpr&#252;fer. We
believe that M&#252;nzpr&#252;fer has the ability to fully
satisfy its indemnification obligations up to the amount of the
final judgment. We have also reached tentative agreement with
M&#252;nzpr&#252;fer as to acceptable methods of satisfying the
provisions of the indemnification agreement, in the event the
judgment is not appealed, or is
</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>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<FONT size="2">not overturned upon appeal. In accordance with
generally accepted accounting principles, as a judgment has been
rendered by the court, we have separately recorded an estimate
of the amounts payable to Imonex related to the Alliance
liability and a corresponding receivable balance from
M&#252;nzpr&#252;fer within our December&nbsp;31, 2003 financial
statements.
</FONT>

<P align="left">
<FONT size="2">Various claims and legal proceedings generally
incidental to the normal course of business are pending or
threatened against us. While the ultimate liability from these
proceedings is difficult to determine, in our opinion, any
additional liability will not have a material effect on our
financial position, liquidity or results of operations.
</FONT>

<P align="left">
<B><FONT size="2">Note&nbsp;12&#151;Guarantees:</FONT></B>

<P align="left">
<FONT size="2">The Company, through its special-purpose
bankruptcy remote subsidiary entered into a $300.0&nbsp;million
Asset Backed Facility as described in Notes&nbsp;4 and 5 above.
Pursuant to the terms of the Asset Backed Facility, we provide
credit enhancement to the note purchasers including an
irrevocable letter of credit, which is an unconditional lending
commitment of the lenders under the Senior Credit Facility,
subject to certain limits. We are obligated under the
reimbursement provisions of the Senior Credit Facility to
reimburse the lenders for any drawings on the credit enhancement
by the facility indenture trustee. If the credit enhancement is
not replenished by us after a drawing, the trust will not be
permitted to request new borrowings under the Asset Backed
Facility and the Asset Backed Facility will begin to amortize.
The amount of the irrevocable letter of credit related to the
Asset Backed Facility at December&nbsp;31, 2003 was
$24.0&nbsp;million.
</FONT>

<P align="left">
<FONT size="2">We offer warranties to our customers depending
upon the specific product and the product use. Standard product
warranties vary from one to three years for most parts with
certain components extending to five years. Certain customers
have elected to buy without warranty coverage. The standard
warranty program requires that we replace defective components
within a specified time period from the date of installation. We
record an estimate for future warranty related costs based on
actual historical incident rates and costs per incident trends.
Based on analysis of these and other factors, the carrying
amount of our warranty liability is adjusted as necessary. While
our warranty costs have historically been within our calculated
estimates, it is possible that future warranty costs could
exceed those estimates.
</FONT>

<P align="left">
<FONT size="2">The changes in the carrying amount of our total
product warranty liability for the years ended December&nbsp;31,
2003 and 2002 were as follows:
</FONT>

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

<TR>
    <TD width="77%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</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">Balance at beginning of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,890</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,090</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">Accruals for current&nbsp;&#38; pre-existing
    warranties issued 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">2,250</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">2,174</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">Settlements made 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">(2,381</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,374</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>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance at end of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,759</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,890</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>

</TR>

</TABLE>
</CENTER>

<DIV>&nbsp;</DIV>

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

<TR>
    <TD width="7%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Note&nbsp;13&#151;</FONT></B></TD>
    <TD>
    <B><FONT size="2">Pensions and Other Employee
    Benefits:</FONT></B></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Substantially all of our employees are covered by
a defined benefit pension plan. Effective December&nbsp;31,
2002, the Alliance Laundry Systems Retirement Benefit
Accumulation Plan, a pension plan covering salaried and
management employees, was merged into the Alliance Laundry
Systems Plan for Hourly Employees. The pension plan as combined
was amended and renamed the Alliance Laundry Systems Pension
Plan. A final determination of the merged plan&#146;s qualified
status remains pending with the Internal Revenue Service. The
pension benefit for salaried and management employees is a cash
balance plan whereby an account is established for each
participant in which pay credits are based on salary and
service, and interest credits are earned annually. Pay credits
are calculated as a pre-determined percentage
</FONT>

<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>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<FONT size="2">of the participant&#146;s salary adjusted for age
and years of service. Interest credits are earned at the rate of
a one-year U.S.&nbsp;Treasury Bill, as of the last day of the
prior plan year, plus 1%. The pension benefit for hourly and
union employees generally provides benefits of stated amounts
for each year of service. Our funding policy for the salaried
and management employees is to contribute annually at a rate
that is intended to remain at a level percentage of compensation
for the covered employees. Our funding policy for the hourly and
union employees is to contribute annually at a rate that is
intended to remain level for the covered employees. Unfunded
prior service costs under the funding policy are generally
amortized over periods from 10 to 30&nbsp;years.
</FONT>

<P align="left">
<FONT size="2">Total pension expense (benefit) for our pension
plan was $1.8&nbsp;million, $0.2&nbsp;million and
($1.2)&nbsp;million in 2003, 2002, and 2001, respectively,
including the following components:
</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="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="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="11"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended December 31,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="11" 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">2003</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">2001</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 valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Service cost benefits earned during the period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,444</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,263</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,195</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 cost on projected benefit obligation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,569</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">2,430</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">2,327</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">Expected return on plan 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">(2,822</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,548</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,148</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">Net amortization and deferral
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">587</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">(635</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">Curtailment losses and 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">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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">67</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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net pension benefit cost (benefit)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,778</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</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 align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,194</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>

</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">Assumptions used in determining net pension
benefit cost (benefit) were as follows:
</FONT>

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

<TR>
    <TD width="68%"><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="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><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">Years Ended December&nbsp;31,</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" align="center" nowrap><B><FONT size="1">2003</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">2001</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">Discount 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">6.50%</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">7.25%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.50%</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">Expected long-term rate of return on 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">9.00%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.25%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9.25%</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">Rate of increase in salaried compensation levels
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.00%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.00%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.00%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">In 2002 and 2001, various plan curtailments and
supplemental termination benefits were recognized as a result of
workforce reductions.
</FONT>

<P align="left">
<FONT size="2">To develop the expected long-term rate of return
on assets assumption, we considered historical returns and
future expectations. Over the 10 and 15&nbsp;year periods ending
December&nbsp;31, 2003, the returns on the portfolio, assuming
it was invested at the mid point of our investment policy
statement&#146;s strategic asset allocation and is rebalanced
annually, would have been an annual average of approximately
10.06% and 10.87%, respectively. Considering this information,
costs of administering the plan and the potential for lower
returns due to a generally lower interest rate environment, we
selected a 9.00% long-term rate of return on assets assumption.
</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>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<FONT size="2">The reconciliation of the changes in the
plan&#146;s benefit obligation and the fair value of plan assets
and the statement of the funded status of the plan at
December&nbsp;31 are as follows:
</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="72%"><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="2"></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">2002</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>
</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">Change in benefit obligation:</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>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Benefit obligation at beginning of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,005</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">33,659</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">Service cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,444</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,263</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 cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,569</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">2,430</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">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">&#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">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">Actuarial 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">2,000</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">4,994</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">Benefits paid
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,863</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,348</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>

</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">Benefit obligation at end of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">44,155</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">40,005</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>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Change in plan assets:</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>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Fair value of plan assets at beginning of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,403</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,430</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">Actual return on plan 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">8,516</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(4,679</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">Benefits paid
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,863</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,348</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>

</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">Fair value of plan assets at end of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">39,056</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">32,403</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>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Reconciliation of funded status:</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="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Funded status
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(5,099</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(7,602</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">Unrecognized prior service cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">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">553</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">Unrecognized net loss (gain)
    </FONT></DIV>
    </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><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,364</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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Prepaid benefit cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">537</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,315</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>

<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 amount recognized:</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>
    <TD colspan="2" 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 align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,567</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(6,241</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">Intangible asset
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">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">553</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">Accumulated other comprehensive 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">3,622</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,003</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 colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">537</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,315</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">
<FONT size="2">Assumptions used to determine the benefit
obligation at end of year were as follows:
</FONT>

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

<TR>
    <TD width="81%"><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>
</TR>

<TR>
    <TD></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">2002</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">Discount 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">6.25%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.50%</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">Rate of increase in compensation levels
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.00%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.00%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">We use a December&nbsp;31 measurement date for
the plan.
</FONT>

<P align="left">
<FONT size="2">The accumulated benefit obligation for the plan
was $42,623 and $38,644 as of December&nbsp;31, 2003 and 2002,
respectively.
</FONT>

<P align="left">
<FONT size="2">Our pension plan weighted-average asset
allocation at December&nbsp;31, 2003 and 2002, by asset category
was as follows:
</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="78%"><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>
</TR>

<TR>
    <TD colspan="2"></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">2002</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>
</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">Asset Category:</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>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Equity securities
    </FONT></DIV>
    </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</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">61</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">Debt securities
    </FONT></DIV>
    </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</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></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>
</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">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</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>

</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 align="right" valign="bottom" nowrap><FONT size="2">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">100</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>

</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>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<FONT size="2">The Board of Managers has established the Pension
Committee (the Committee) to manage the operations and
administration of the pension plan and related trust. The
Committee has an investment policy statement for the pension
plan that establishes target asset allocation ranges by asset
type, plan objectives, securities guidelines for money managers,
evaluation benchmarks and control procedures. The midpoint of
the asset allocation ranges for the above listed asset classes
are as follows: Equity securities 63%, Debt securities 34%, and
Other (cash and cash equivalents) 3%. The Committee is committed
to diversification to reduce the risk of large losses. To that
end, the investment policy requires that each asset class will
be diversified, multiple money managers with differing styles of
management will be employed, and equity exposure will be limited
to 78% of the total portfolio value. On a quarterly basis, the
Committee and an external investment advisor review progress
towards achieving the pension plan and individual money
managers&#146; performance objectives.
</FONT>

<P align="left">
<FONT size="2">In addition to providing pension benefits, we
provide certain health care benefits for retired employees upon
early retirement, up to age&nbsp;65. Employees with more than
10&nbsp;years of service are eligible for these benefits if they
reach age&nbsp;62 while working for us. Retiree health plans are
paid for in part by employee contributions, which are adjusted
annually. Benefits are provided through various insurance
companies whose charges are based either on the benefits paid
during the year or annual premiums. Health benefits are provided
to retirees and their covered dependents.
</FONT>

<P align="left">
<FONT size="2">Our net postretirement benefit cost for 2003,
2002 and 2001 included the following components:
</FONT>

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

<TR>
    <TD width="70%"><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="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></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">Years Ended December&nbsp;31,</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" align="center" nowrap><B><FONT size="1">2003</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">2001</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">Service cost benefits earned during the period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">45</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">34</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">Interest cost on projected benefit obligation
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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</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">Net amortization and deferral
    </FONT></DIV>
    </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">61</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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</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 align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net postretirement benefit cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">234</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">147</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">
<FONT size="2">Assumptions used in determining the net
postretirement benefit cost were as follows:
</FONT>

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

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

<TR>
    <TD></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">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2001</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">Discount 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">6.50%</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">7.25%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7.50%</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">Rate of increase in compensation levels
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.00%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.00%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.00%</FONT></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>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<FONT size="2">The following provides a reconciliation of
benefit obligations, plan assets and the funded status of the
plan at December&nbsp;31:
</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="74%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></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">2002</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>
</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">Change in benefit obligation:</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>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Benefit obligation at beginning of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,223</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">930</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">Service cost
    </FONT></DIV>
    </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</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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</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 cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">79</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">Plan participants&#146; contributions
    </FONT></DIV>
    </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">52</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">Actuarial (gain)&nbsp;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">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">344</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">Benefits paid
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(177</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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 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>

</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">Benefit obligation at end of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,730</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,223</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>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Change in plan assets:</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>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Fair value of plan assets at beginning of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#150;</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">Employer contributions
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">177</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Plan participants&#146; contributions
    </FONT></DIV>
    </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">52</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">Benefits paid
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(177</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></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 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>

</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">Fair value of plan assets at end of year
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#150;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#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="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="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Funded status
    </FONT></DIV>
    </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">(1,223</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">Unrecognized transition obligation
    </FONT></DIV>
    </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">453</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">Unrecognized 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">947</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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</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>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accrued benefit cost
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(375</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(319</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>

</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">Assumptions used to determine the benefit
obligation at end of year were as follows:
</FONT>

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

<TR>
    <TD width="81%"><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>
</TR>

<TR>
    <TD></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">2002</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">Discount 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">6.25%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6.50%</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">Rate of increase in salaried compensation levels
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.00%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4.00%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">A 10% annual rate of increase in the per capita
cost of covered health care benefits was assumed for 2003. The
rate is assumed to decrease gradually to 5% for 2008 and remain
at that level thereafter.
</FONT>

<P align="left">
<FONT size="2">A one percentage point increase in the assumed
health care cost trend rate would increase the accumulated
postretirement benefit obligation as of December&nbsp;31, 2003
by approximately $186 and the interest cost by approximately
$13. A one percentage point decrease in the assumed health care
cost trend rate would decrease the accumulated postretirement
benefit obligation as of December&nbsp;31, 2003 by approximately
$158 and the interest cost by approximately $11.
</FONT>

<P align="left">
<FONT size="2">Our postretirement health care plan provides for
prescription drug benefits. On December&nbsp;8, 2003, the
Medicare Prescription Drug,&nbsp;Improvement and Modernization
Act of 2003 (the &#147;Act&#148;) was signed into law. The Act
introduces a prescription drug benefit under Medicare (Medicare
Part&nbsp;D) as well as a federal subsidy to sponsors of retiree
health care benefit plans that provide a benefit that is at
least actuarially equivalent to Medicare Part&nbsp;D. In
accordance with FASB Staff Position FAS&nbsp;106-1,
&#147;Accounting and Disclosure Requirements Related to the
Medicare Prescription Drug,&nbsp;Improvement and Modernization
Act of 2003&#148; any measures of our accumulated postretirement
benefit obligation or net periodic postretirement benefit cost
in the financial statements and accompanying notes do not
reflect the effects of the Act on the plans. Specific
authoritative guidance on the accounting for the federal subsidy
is pending and that guidance, when issued, could require us to
change previously reported information.
</FONT>

<P align="center"><FONT size="2">F-30
</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="center">
<B>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<FONT size="2">Eligible employees are able to participate in the
Alliance Laundry Systems Capital Appreciation Plan
(&#147;ALCAP&#148;), which is a qualified plan under
Sections&nbsp;401(a) and 401(k) of the Internal Revenue Code. In
addition, we may make a discretionary annual contribution to
ALCAP equal to approximately one half of one percent of salaries
and wages, subject to statutory limits, of eligible employees.
Under the terms of ALCAP, covered employees are allowed to
contribute up to 50&nbsp;percent of their pay on a pre-tax basis
up to the limit established by the Internal Revenue Service. We
contribute amounts equal to 50 percent of the employee&#146;s
contributions, up to a maximum of such Company contributions
equal to three percent of the employee&#146;s pay. Total expense
for ALCAP was $1.0&nbsp;million, $0.9&nbsp;million and
$0.9&nbsp;million, for 2003, 2002 and 2001, respectively.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred
Compensation Agreements</FONT></I>

<P align="left">
<FONT size="2">In connection with the Recapitalization and
related transactions, the Company and Raytheon entered into
deferred compensation agreements with certain executives,
whereby we assumed certain long-term compensation obligations
earned by management under programs established by Raytheon.
Such agreements provide for the deferral of compensation until
the earlier of (i)&nbsp;the payment of a lump sum (the
&#147;Benefit Amount&#148;) to the executive ten years after the
date of such agreement, regardless of whether the executive is
employed by the Company as of such date or (ii)&nbsp;the payment
of the Benefit Amount upon the occurrence of certain events
described therein. The consolidated balance sheet at
December&nbsp;31, 2003 and 2002 includes a long-term liability
of $1.9&nbsp;million and $1.8&nbsp;million, respectively,
related to such agreements.
</FONT>

<P align="left">
<FONT size="2">In addition, we have established the Alliance
Laundry Holdings LLC Nonqualified Deferred Compensation Plan.
The Plan provides certain eligible employees and members with
the opportunity to defer portions of their base salary, bonus
payments and other payments in accordance with the provisions of
the Plan.
</FONT>

<P align="left">
<B><FONT size="2">Note&nbsp;14&#151;Related Party
Transactions:</FONT></B>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securityholders
Agreement</FONT></I>

<P align="left">
<FONT size="2">Upon the consummation of the Recapitalization and
related transactions, the Company, Raytheon and certain
securityholders entered into a securityholders agreement (the
&#147;Securityholders Agreement&#148;). The Securityholders
Agreement (i)&nbsp;restricts the transfer of the equity
interests of the Company; (ii)&nbsp;grants tag-along rights on
certain transfers of equity interests of the Company;
(iii)&nbsp;requires the securityholders to consent to a sale of
the Company to an independent third party if such sale is
approved by certain holders of the then outstanding equity
interests of the Company; and (iv)&nbsp;grants preemptive rights
on certain issuances of equity interests of the Company. Certain
of the foregoing provisions of the Securityholders Agreement
will terminate upon the consummation of an initial public
offering or a liquidity event (each as defined in the
Securityholders Agreement).
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sale of Raytheon
Interests</FONT></I>

<P align="left">
<FONT size="2">On September&nbsp;12, 2003, Raytheon Company
completed the sale of all of its debt and equity interests in
the Company to a group of investors consisting of TCW Shared
Opportunity Fund&nbsp;IV, L.P., TCW Shared Opportunity
Fund&nbsp;IVB, L.P., TCW Shared Opportunity Fund&nbsp;III, L.P.,
TCW SHOP&nbsp;III Subsidiary Investment,&nbsp;Inc. and TCW SHOP
IV Subsidiary Investment,&nbsp;Inc. (together, the &#147;TCW
Funds&#148;) and Sankaty High Yield Partners&nbsp;II, L.P.,
Sankaty High Yield Partners&nbsp;III, L.P., Sankaty Credit
Opportunities, L.P. and Sankaty Alliance Corp (together, the
&#147;Sankaty Funds&#148;). The debt consists of the Junior
Subordinated Note and the equity interests consist of our
Preferred Units, and Raytheon&#146;s Class&nbsp;A and
Class&nbsp;L Common Units. As a result of this transaction, the
Raytheon Junior Subordinated Note was cancelled and new Junior
Subordinated Notes were issued under the same terms and
conditions as for
</FONT>

<P align="center"><FONT size="2">F-31
</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="center">
<B>Alliance Laundry Holdings LLC</B>
</DIV>

<P align="center">
<B>Notes to Financial&nbsp;Statements&#151;(Continued)</B>

<P align="left">
<FONT size="2">Raytheon. Raytheon had formerly been our parent
prior to a recapitalization and merger transaction on
May&nbsp;5, 1998. The Sankaty Funds are an affiliate of Bain/
RCL, L.L.C. which, before the sale, owned 55.9% of our
outstanding common membership interests through its ownership of
Class&nbsp;A and Class&nbsp;L membership units in our Company.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management
Investor Promissory Notes</FONT></I>

<P align="left">
<FONT size="2">We entered into promissory notes (the
&#147;Promissory Notes&#148;) currently aggregating
approximately $1.8&nbsp;million with certain members of
management to help finance the purchase of Common Units in the
Company as of May&nbsp;5, 1998. The Promissory Notes bear
interest at a rate of 5.94%&nbsp;per annum and mature on
June&nbsp;5, 2008. The Promissory Notes are classified as a
component of members&#146; deficit at December&nbsp;31, 2003 and
2002. Promissory Notes were repaid to us in the amount of
$0.1&nbsp;million for the year ended December&nbsp;31, 2001, no
repayment for the year ended December&nbsp;31, 2002 and less
than $0.1&nbsp;million for the year ended December&nbsp;31, 2003.
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive Unit
Purchase Agreements</FONT></I>

<P align="left">
<FONT size="2">Certain members of management of the Company have
entered into executive unit purchase agreements (the
&#147;Purchase Agreements&#148;) which govern the
Executives&#146; investment in the common membership interests
of the Company.
</FONT>

<P align="left">
<FONT size="2">The Purchase Agreements provide us with a
repurchase option upon the termination of each Executive. If the
Executive&#146;s termination is the result of death, permanent
disability or without cause, as defined, Class&nbsp;A and
Class&nbsp;L Units, and vested Class&nbsp;M, Class&nbsp;B and
Class&nbsp;C Units may be repurchased by us at a price per unit
equal to fair market value, as defined, and unvested Class M,
Class&nbsp;B and Class&nbsp;C Units may be repurchased at a
price per unit equal to the lower of fair market value or
original value, as defined. If an Executive&#146;s termination
is voluntary or for cause, as defined, all units may be
repurchased at a price equal to the lower of fair market value
or original value, unless an Executive&#146;s voluntary
termination occurs seven and one-half years from May&nbsp;5,
1998, in which case the repurchase price shall be fair market
value. The Class&nbsp;M, Class&nbsp;B and Class&nbsp;C Units
were purchased by the Executives at a nominal value based upon
the subordinated nature of such interests (see Note&nbsp;10).
</FONT>

<P align="left">
<I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management
Services Agreement</FONT></I>

<P align="left">
<FONT size="2">We have entered into a management services
agreement (the &#147;Management Services Agreement&#148;) with
Bain LLC pursuant to which Bain LLC agreed to provide:
(i)&nbsp;general executive and management services;
(ii)&nbsp;identification, support, negotiation and analysis of
acquisitions and dispositions; (iii)&nbsp;support, negotiation
and analysis of financial alternatives; and (iv)&nbsp;other
services agreed upon by us and Bain LLC. In exchange for
services, Bain LLC will receive (i)&nbsp;an annual management
fee of $1.0&nbsp;million, plus reasonable out-of-pocket expenses
(payable quarterly) and (ii)&nbsp;a transaction fee in an amount
in accordance with the general practices of Bain LLC at the time
of the consummation of any additional acquisition or divestiture
by us and of each financing or refinancing (currently
approximately 1.0% of total financings). Pursuant to the
Management Services Agreement transaction fees paid in 2002 with
respect to the new Senior Credit Facility and new Asset Backed
Facility totaled $3.5&nbsp;million. The Management Services
Agreement has an initial term of ten years subject to automatic
one-year extensions unless the Company or Bain LLC provides
written notice of termination.
</FONT>

<P align="center"><FONT size="2">F-32
</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>Alliance Laundry Holdings LLC</B>

<DIV align="center">
<B>Schedule II&#151;Valuation and Qualifying Accounts</B>
</DIV>

<DIV align="center">
<B>(Dollars in Thousands)</B>
</DIV>

<P align="left">
<B><FONT size="2">Accounts Receivable Allowance for Doubtful
Accounts:</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="47%"><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="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="1%"><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="3" align="center" nowrap><B><FONT size="1">Balance at</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Charges to</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">Beginning</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Expense/</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Balance at</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">of Period</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Income)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Deductions</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">End of Period</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">Year ended:
    </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">December 31, 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">719</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">82</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">662</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">December 31, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">662</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(319</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">136</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">207</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">December 31, 2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">207</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">257</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Inventory Valuation Reserves:</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="47%"><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>
    <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="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Balance at</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Charges to</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">Beginning</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Expense/</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Balance at</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">of Period</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Income)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Deductions</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">End of Period</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">Year ended:
    </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">December 31, 2001
    </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">2,590</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">1,437</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,220</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,807</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">December 31, 2002
    </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">2,807</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">1,025</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></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>
</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">December 31, 2003
    </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">2,729</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">(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">1,307</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">1,420</FONT></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="left">
<FONT size="2"> <HR size="1" width="100%" align="left" noshade>
</FONT>
</DIV>

<P align="center">
<B><FONT size="5">Alliance Laundry Holdings Inc.</FONT></B>

<P align="center">
<B><FONT size="4">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income
Deposit</FONT></B>

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

<P align="center">
<B><FONT size="4">and</FONT></B>

<P align="center">
<B><FONT size="4">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%&nbsp;Senior
Subordinated Notes due 2014</FONT></B>

<P align="center">
<HR size="1" width="33%" align="center" noshade>

<DIV align="center">
<FONT color="#A32638">PROSPECTUS
</FONT>
</DIV>

<DIV align="center">
<HR size="1" width="33%" align="center" noshade>
</DIV>

<P align="center">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2004
</FONT>

<P align="center">
<B><FONT size="5">CIBC World Markets</FONT></B>

<P align="center">
<B><FONT size="5">Lehman Brothers</FONT></B>

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

<P align="left">
<B><FONT size="2">You should rely only on the information
contained in this prospectus. No dealer, salesperson or other
person is authorized to give information that is not contained
in this prospectus. This prospectus is not an offer to sell nor
is it seeking an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted. The
information contained in this prospectus is correct only as of
the date of this prospectus, regardless of the time of the
delivery of this prospectus or any sale of these
securities.</FONT></B>

<P align="left">
<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 buy, sell or trade our IDSs, whether or
not participating in this offering, may be required to deliver a
prospectus. This requirement is in addition to the dealers&#146;
obligation to deliver a prospectus when acting as underwriters
and with respect to their unsold allotments or
subscriptions.</FONT></B>

<!-- 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>Part&nbsp;II</B>

<P align="center">
<B>Information Not Required in Prospectus</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><I><FONT size="2">Other Expenses of Issuance and
    Distribution</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">The following table sets forth the costs and
expenses, other than underwriting discounts and commissions,
payable by Alliance Laundry Holdings Inc. in connection with the
offer and sale of the securities being registered. All amounts
are estimates except the SEC registration fee and the NASD
filing fee.
</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="81%"><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 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">47,512.50</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 filing 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">30,500.00</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">American Stock Exchange listing 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&#146;s 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 valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Trustee&#146;s 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">Printing and engraving 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">*</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">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">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><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 align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="33%" 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 filed 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><I><FONT size="2">Indemnification of Directors and
    Officers</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">
<I><FONT size="2">Delaware.</FONT></I><FONT size="2"> The
General Corporation Law of the State of Delaware
(&#147;DGCL&#148;) authorizes corporations to limit or eliminate
the personal liability of directors to corporations and their
stockholders for monetary damages for breaches of
directors&#146; fiduciary duties. The certificates of
incorporation of the Delaware registrants include a provision
that eliminates the personal liability of directors for monetary
damages for actions taken as a director, except for liability
for breach of duty of loyalty; for acts or omissions not in good
faith or involving intentional misconduct or knowing violation
of law; under Section&nbsp;174 of the DGCL (unlawful dividends
and stock repurchases); or for transactions from which the
director derived improper personal benefit.
</FONT>

<P align="left">
<FONT size="2">The certificates of incorporation of the Delaware
registrants provide that these registrants must indemnify their
directors and officers to the fullest extent authorized by the
DGCL and must also pay expenses incurred in defending any such
proceeding in advance of its final disposition upon delivery of
an undertaking, by or on behalf of an indemnified person, to
repay all amounts so advanced if it should be determined
ultimately that such person is not entitled to be indemnified
under this section or otherwise.
</FONT>

<P align="left">
<FONT size="2">The indemnification rights set forth above shall
not be exclusive of any other right which an indemnified person
may have or hereafter acquire under any statute, provision of
our certificate of incorporation, our by laws, agreement, vote
of stockholders or disinterested directors or otherwise.
</FONT>

<P align="left">
<FONT size="2">Alliance Laundry Holdings Inc. maintains
insurance to protect itself and its directors and, officers and
those of its subsidiaries against any such expense, liability or
loss, whether or not it would have the power to indemnify them
against such expense, liability or loss under applicable law.
</FONT>

<P align="center"><FONT size="2">II-1
</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="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;15.</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Recent Sales of Unregistered
    Securities</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">The registrant was formed in March 2004 and has
not issued any securities. Simultaneously with the consummation
of the offering of the securities being registered hereby, the
registrant will issue an aggregate
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of the registrant&#146;s Class&nbsp;B common stock
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of its preferred stock in connection with its reorganization.
This issuance will be made in reliance upon Section&nbsp;4(2) of
the Securities Act of 1933, as amended and will not involve any
underwriters, underwriting discounts or commissions, or any
public offering. The persons and entities who will receive such
securities have represented that each of them is an
&#147;accredited investor&#148; (as such term is defined in
Rule&nbsp;501 of Regulation&nbsp;D under the Securities Act of
1933, as amended) to acquire these securities for investment
only and not with a view for sale or in connection with any
distribution thereof, and appropriate legends will be affixed to
any share certificates issued. All recipients have adequate
access through their relationship with the registrant to
information about the registrant.
</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><I><FONT size="2">Exhibits and Financial Statement
    Schedules</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exhibits.</I>
The following exhibits are filed as part of this Registration
Statement.
</FONT>

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

<TR>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="86%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><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">Certificate of Incorporation of Alliance Laundry
    Holdings 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">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Certificate of Formation of Alliance Laundry
    Systems LLC (Incorporated by reference to Exhibit&nbsp;3.1 to
    Alliance Laundry Systems LLC&#146;s Form&nbsp;S-4,
    Amendment&nbsp;#1, dated July&nbsp;2, 1998
    (file&nbsp;no.&nbsp;333-56857)).
    </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">Bylaws of Alliance Laundry Holdings 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">.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Limited Liability Company
    Agreement of Alliance Laundry Systems LLC (Incorporated by
    reference to Exhibit&nbsp;3.2 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2,
    1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">Amendment No.&nbsp;1 to Amended and Restated
    Limited Liability Company Agreement of Alliance Laundry Systems
    LLC (Incorporated by reference to Exhibit&nbsp;10.4 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;10-Q, dated
    November&nbsp;12, 2003 (file no.&nbsp;333-56857).
    </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">Form of Indenture, among Alliance Laundry
    Holdings Inc., the guarantors thereto
    and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, as Trustee.*
    </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 Senior Subordinated Note (included in
    Exhibit&nbsp;4.1).*
    </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">Form of Registration Rights Agreement.*
    </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">Form of stock certificate for 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">.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of global IDS.*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Opinion of Kirkland&nbsp;&#38; Ellis 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">Opinion of Skadden, Arps, Slate,
    Meagher&nbsp;&#38; Flom 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 Kirkland&nbsp;&#38; Ellis LLP.*
    </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">Purchase Agreement, dated as of April&nbsp;29,
    1998, by and among Alliance Laundry Systems LLC, Alliance
    Laundry Corporation and the Initial Purchasers (Incorporated by
    reference to Exhibit&nbsp;10.1 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2,
    1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">Registration Rights Agreement, dated as of
    May&nbsp;5, 1998, by and among Alliance Laundry Systems LLC,
    Alliance Laundry Corporation, Alliance Laundry Holdings LLC, and
    Lehman Brothers Inc. and Credit Suisse First Boston Corporation
    (Incorporated by reference to Exhibit&nbsp;10.2 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1,
    dated July&nbsp;2, 1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">Amended and Restated Limited Liability Company
    Agreement of Alliance Laundry Holdings LLC, dated as of
    May&nbsp;5, 1998 (Incorporated by reference to Exhibit&nbsp;10.5
    to Alliance Laundry Systems LLC&#146;s Form&nbsp;S-4,
    Amendment&nbsp;#1, dated July&nbsp;2, 1998
    (file&nbsp;no.&nbsp;333-56857)).
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-2
</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="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="86%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><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">Alliance Laundry Holdings LLC, Securityholders
    Agreement, dated as of May&nbsp;5, 1998, between Alliance
    Laundry Holdings LLC and the Securityholders (Incorporated by
    reference to Exhibit&nbsp;10.6 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2,
    1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">Alliance Laundry Holdings LLC, Registration
    Rights Agreement, made as of May&nbsp;5, 1998, by and among
    Alliance Laundry Holdings LLC, Raytheon Company, Bain/RCL and
    the Securityholders (Incorporated by reference to
    Exhibit&nbsp;10.7 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2, 1998 (file
    no.&nbsp;333-56857)).
    </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">Employment Agreement, made as of May&nbsp;5,
    1998, by and between Alliance Laundry Systems LLC and Thomas F.
    L&#146;Esperance (Incorporated by reference to Exhibit&nbsp;10.8
    to Alliance Laundry Systems LLC&#146;s Form&nbsp;S-4,
    Amendment&nbsp;#1, dated July&nbsp;2, 1998
    (file&nbsp;no.&nbsp;333-56857)).
    </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">IRA and Executive Unit Purchase Agreement, made
    as of May&nbsp;5, 1998, by and between RCL Acquisitions, LLC,
    Thomas F. L&#146;Esperance and Stifel, Nicolaus Custodian for
    Thomas F. L&#146;Esperance IRA and Stifel, Nicolaus Custodian
    for Paula K. L&#146;Esperance IRA (Incorporated by reference to
    Exhibit&nbsp;10.9 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2, 1998
    (file&nbsp;no.&nbsp;333-56857)).
    </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">IRA and Executive Unit Purchase Agreement, made
    as of May&nbsp;5, 1998, by and between RCL Acquisitions, LLC, R.
    Scott Gaster and Robert W. Baird&nbsp;&#38; Co. Inc. TTEE for R.
    Scott Gaster IRA (Incorporated by reference to
    Exhibit&nbsp;10.10 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2, 1998
    (file&nbsp;no.&nbsp;333-56857)).
    </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">IRA and Executive Unit Purchase Agreement, made
    as of May&nbsp;5, 1998, by and between RCL Acquisitions, L.L.C.,
    Jeffrey J. Brothers and Delaware Charter Guarantee and Trust
    Company, TTEE for Jeffrey J. Brothers, IRA (Incorporated by
    reference to Exhibit&nbsp;10.11 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2,
    1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">IRA and Executive Unit Purchase Agreement, made
    as of May&nbsp;5, 1998, by and between RCL Acquisitions, L.L.C.,
    Bruce P. Rounds and Stifel, Nicolaus Custodian for Bruce P.
    Rounds IRA (Incorporated by reference to Exhibit&nbsp;10.13 to
    Alliance Laundry Systems LLC&#146;s Form&nbsp;S-4,
    Amendment&nbsp;#1, dated July&nbsp;2, 1998
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">IRA and Executive Unit Purchase Agreement, made
    as of May&nbsp;5, 1998, by and between RCL Acquisitions, L.L.C.,
    Scott L. Spiller and Stifel, Nicolaus Custodian for Scott
    Spiller IRA (Incorporated by reference to Exhibit&nbsp;10.14 to
    Alliance Laundry Systems LLC&#146;s Form&nbsp;S-4,
    Amendment&nbsp;#1, dated July&nbsp;2, 1998 (file no. 333-56857)).
    </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">.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Deferred Compensation Agreement, made and entered
    into as of May&nbsp;5, 1998, by and among Thomas F.
    L&#146;Esperance, Raytheon Company, Alliance Laundry Holdings
    LLC, and Alliance Laundry Systems LLC (Incorporated by reference
    to Exhibit&nbsp;10.16 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2, 1998
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Deferred Compensation Agreement, made and entered
    into as of May&nbsp;5, 1998, by and among R.&nbsp;Scott Gaster,
    Alliance Laundry Holdings LLC, and Alliance Laundry Systems LLC
    (Incorporated by reference to Exhibit&nbsp;10.17 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1,
    dated July&nbsp;2, 1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">.18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Deferred Compensation Agreement, made and entered
    into as of May&nbsp;5, 1998, by and among Jeffrey J. Brothers,
    Alliance Laundry Holdings LLC, and Alliance Laundry Systems LLC
    (Incorporated by reference to Exhibit&nbsp;10.18 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1,
    dated July&nbsp;2, 1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">.20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Deferred Compensation Agreement, made and entered
    into as of May&nbsp;5, 1998, by and among Bruce P. Rounds,
    Alliance Laundry Holdings LLC, and Alliance Laundry Systems LLC
    (Incorporated by reference to Exhibit&nbsp;10.20 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1,
    dated July&nbsp;2, 1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Promissory Note, dated as of May&nbsp;5, 1998,
    from Thomas F. L&#146;Esperance to RCL Acquisitions, L.L.C.
    (Incorporated by reference to Exhibit&nbsp;10.34 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1,
    dated July&nbsp;2, 1998 (file&nbsp;no.&nbsp;333-56857)).
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-3
</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="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="86%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><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">.35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Promissory Note, dated as of May&nbsp;5, 1998,
    from R.&nbsp;Scott Gaster to RCL Acquisitions, L.L.C.
    (Incorporated by reference to Exhibit&nbsp;10.35 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1,
    dated July&nbsp;2, 1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">.36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Promissory Note, dated as of May&nbsp;5, 1998,
    from Jeffrey J. Brothers to RCL Acquisitions, L.L.C.
    (Incorporated by reference to Exhibit&nbsp;10.36 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1,
    dated July&nbsp;2, 1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">.38</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Promissory Note, dated as of May&nbsp;5, 1998,
    from Bruce P. Rounds to RCL Acquisitions, L.L.C. (Incorporated
    by reference to Exhibit&nbsp;10.38 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2,
    1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Advisory Agreement, dated as of May&nbsp;5, 1998,
    by and between Alliance Laundry Systems LLC, and Bain
    Capital,&nbsp;Inc. (Incorporated by reference to
    Exhibit&nbsp;10.40 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2, 1998
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Junior Subordinated Promissory Note, dated as of
    May&nbsp;5, 1998, from Alliance Laundry Holdings LLC to Raytheon
    Company (Incorporated by reference to Exhibit&nbsp;10.42 to
    Alliance Laundry Systems LLC&#146;s Form&nbsp;S-4,
    Amendment&nbsp;#1, dated July&nbsp;2, 1998 (file no. 333-56857)).
    </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">.47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Letter Agreement, dated as of April&nbsp;29,
    1998, by and among Bain/RCL, L.L.C. and RCL Acquisitions,
    L.L.C., Raytheon Company and Raytheon Commercial Laundry L.L.C.
    (Incorporated by reference to Exhibit&nbsp;10.47 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#5,
    dated March&nbsp;3, 1999 (file&nbsp;no.&nbsp;333-56857)).
    </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">.49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture Agreement, dated as of
    November&nbsp;28, 2000, among Alliance Laundry Equipment
    Receivables Trust 2000-A and The Bank of New&nbsp;York as
    indenture trustee (Incorporated by reference to
    Exhibit&nbsp;10.49 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-K, dated March&nbsp;28, 2001
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Purchase Agreement, dated as of November&nbsp;28,
    2000, between Alliance Laundry Equipment Receivables LLC and
    Alliance Laundry Systems LLC, in its own capacity and as
    servicer (Incorporated by reference to Exhibit&nbsp;10.50 to
    Alliance Laundry Systems LLC&#146;s Form&nbsp;10-K, dated
    March&nbsp;28, 2001 (file&nbsp;no.&nbsp;333-56857)).
    </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">.51</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Pooling and Servicing Agreement, dated
    November&nbsp;28, 2000, among Alliance Laundry Systems LLC as
    servicer and originator, Alliance Laundry Equipment Receivables
    LLC and Alliance Laundry Equipment Receivables Trust 2000-A
    (Incorporated by reference to Exhibit&nbsp;10.51 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;10-K, dated March&nbsp;28,
    2001 (file&nbsp;no.&nbsp;333-56857)).
    </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">.52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Trust Agreement, dated November&nbsp;28, 2000,
    between Alliance Laundry Equipment Receivables LLC and
    Wilmington Trust Company as owner trustee (Incorporated by
    reference to Exhibit&nbsp;10.52 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;10-K, dated March&nbsp;28, 2001
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Administration Agreement, dated November&nbsp;28,
    2000, among Alliance Laundry Equipment Receivables Trust 2000-A
    and Alliance Laundry Systems LLC as administrator, and The Bank
    of New&nbsp;York as indenture trustee (Incorporated by reference
    to Exhibit&nbsp;10.53 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-K, dated March&nbsp;28, 2001
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Limited Liability Company Agreement of Alliance
    Laundry Equipment Receivables LLC, dated as of November&nbsp;28,
    2000 (Incorporated by reference to Exhibit&nbsp;10.54 to
    Alliance Laundry Systems LLC&#146;s Form&nbsp;10-K, dated
    March&nbsp;28, 2001 (file no.&nbsp;333-56857)).
    </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">.55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Insurance and Indemnity Agreement, dated as of
    November&nbsp;28, 2000, between AMBAC Assurance Corporation as
    insurer, Alliance Laundry Equipment Receivables Trust 2000-A as
    Issuer, Alliance Laundry Equipment Receivables LLC as Seller,
    Alliance Laundry Systems LLC and The Bank of New&nbsp;York as
    indenture trustee (Incorporated by reference to
    Exhibit&nbsp;10.55 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-K, dated March&nbsp;28, 2001
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.59</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC nonqualified
    deferred compensation plan, dated as of February&nbsp;27, 2002
    (Incorporated by reference to Exhibit&nbsp;10.1 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;10-Q, dated
    November&nbsp;6, 2002 (file&nbsp;no.&nbsp;333-56857)).
    </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="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="86%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><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">.60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First amendment to the Alliance Laundry Holdings
    LLC nonqualified deferred compensation plan, dated as of
    June&nbsp;21, 2002 (Incorporated by reference to
    Exhibit&nbsp;10.2 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-Q, dated November&nbsp;6, 2002
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.61</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Second amendment, Alliance Laundry Holdings LLC
    nonqualified deferred compensation plan, dated as of
    August&nbsp;19, 2002 (Incorporated by reference to
    Exhibit&nbsp;10.3 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-Q, dated November&nbsp;6, 2002
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.62</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Credit Agreement, dated as
    of August&nbsp;2, 2002, among Alliance Laundry Holdings LLC,
    Alliance Laundry Systems LLC, the several banks or other
    financial institutions or entities from time to time parties to
    this Agreement, Lehman Commercial Paper Inc. as syndication
    agent, Fleet National Bank and LaSalle Bank National Association
    as documentation agents and General Electric Capital Corporation
    as administrative agent (Incorporated by reference to
    Exhibit&nbsp;10.62 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-K, dated March&nbsp;12, 2003
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Intercreditor Agreement, dated as of
    November&nbsp;26, 2002, by and between General Electric Capital
    Corporation as administrative agent and The Bank of
    New&nbsp;York as indenture trustee (Incorporated by reference to
    Exhibit&nbsp;10.63 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-K, dated March&nbsp;12, 2003
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.64</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Supply Agreement, effective January&nbsp;1, 2003,
    by and among Coinmach Corporation, Super Laundry Equipment
    Corporation and Alliance Laundry Systems LLC (certain portions
    of this exhibit were omitted subject to a pending request for
    confidential treatment) (Incorporated by reference to
    Exhibit&nbsp;10.64 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-K, dated March&nbsp;12, 2003
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture, dated as of November&nbsp;26, 2002,
    among Alliance Laundry Equipment Receivables Trust 2002-A and
    The Bank of New&nbsp;York as indenture trustee (incorporated by
    reference to Exhibit&nbsp;4.1 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2,
    1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">.66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Purchase Agreement, dated as of November&nbsp;26,
    2002, between Alliance Laundry Equipment Receivables 2002 LLC as
    buyer and Alliance Laundry Systems LLC as seller (Incorporated
    by reference to Exhibit&nbsp;10.66 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;10-K, dated March&nbsp;12, 2003
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Pooling and Servicing Agreement, dated
    November&nbsp;26, 2002, among Alliance Laundry Systems LLC as
    servicer and originator, Alliance Laundry Equipment Receivables
    2002 LLC as transferor and Alliance Laundry Equipment
    Receivables Trust 2002-A as issuer (Incorporated by reference to
    Exhibit&nbsp;10.67 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-K, dated March&nbsp;12, 2003
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Trust Agreement, dated November&nbsp;26, 2002,
    between Alliance Laundry Equipment Receivables 2002 LLC as
    transferor and Wilmington Trust Company as owner trustee
    (Incorporated by reference to Exhibit&nbsp;10.68 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;10-K, dated March&nbsp;12,
    2003 (file&nbsp;no.&nbsp;333-56857)).
    </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">.69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Administration Agreement, dated November&nbsp;26,
    2002, among Alliance Laundry Equipment Receivables Trust 2002-A,
    as insurer, and Alliance Laundry Systems LLC, as administrator,
    and The Bank of New&nbsp;York, as indenture trustee
    (Incorporated by reference to Exhibit&nbsp;10.69 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;10-K, dated March&nbsp;12,
    2003 (file&nbsp;no.&nbsp;333-56857)).
    </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">.70</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Limited Liability Company Agreement of Alliance
    Laundry Equipment Receivables 2002 LLC, dated as of
    November&nbsp;26, 2002 (Incorporated by reference to
    Exhibit&nbsp;10.70 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-K, dated March&nbsp;12, 2003
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Insurance and Indemnity Agreement, dated as of
    November&nbsp;26, 2002, between AMBAC Assurance Corporation as
    insurer, Alliance Laundry Equipment Receivables Trust 2002-A as
    issuer, Alliance Laundry Equipment Receivables 2002 LLC as
    seller, Alliance Laundry Systems LLC and The Bank of
    New&nbsp;York as indenture trustee (Incorporated by reference to
    Exhibit&nbsp;10.71 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-K, dated March&nbsp;12, 2003
    (file&nbsp;no.&nbsp;333-56857)).
    </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="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="86%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><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">.72</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Note Purchase Agreement, dated as of
    November&nbsp;26, 2002, among Alliance Laundry Equipment
    Receivables Trust 2002-A as issuer, The Bank of New&nbsp;York as
    indenture trustee, Alliance Laundry Systems LLC as the servicer,
    Alliance Laundry Equipment Receivables 2002 LLC as the
    transferor, the Note Purchasers party hereto, Bear
    Stearns&nbsp;&#38; Co. Inc. as co-administrative agent, and
    Canadian Imperial Bank of Commerce as co-administrative agent
    and agent (Incorporated by reference to Exhibit&nbsp;10.72 to
    Alliance Laundry Systems LLC&#146;s Form&nbsp;10-K, dated
    March&nbsp;12, 2003 (file&nbsp;no.&nbsp;333-56857)).
    </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">.73</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;1 to Alliance Laundry Systems
    LLC Employment Agreement, dated as of July&nbsp;23, 2003 by and
    between Alliance Laundry Systems LLC and Thomas F.
    L&#146;Esperance (Incorporated by reference to Exhibit&nbsp;10.1
    to Alliance Laundry Systems LLC&#146;s Form&nbsp;10-Q, dated
    November&nbsp;12, 2003 (file no.&nbsp;333-56857)).
    </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">.74</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;1 to Alliance Laundry Holdings
    LLC Securityholders Agreement and Registration Rights Agreement,
    dated as of July&nbsp;23, 2003 (Incorporated by reference to
    Exhibit&nbsp;10.2 of Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-Q, dated November&nbsp;12, 2003 (file
    no.&nbsp;333-56857)).
    </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">.75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;1 to Amended and Restated
    Limited Liability Company Agreement by Alliance Laundry Holdings
    LLC, dated as of July&nbsp;23, 2003 (Incorporated by reference
    to Exhibit&nbsp;10.3 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-Q, dated November&nbsp;12, 2003 (file
    no.&nbsp;333-56857)).
    </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">.76</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;2 to Securityholders Agreement
    and Registration Rights Agreement by and among Alliance Laundry
    Holdings LLC and Bain/RCL, L.L.C., dated as of
    September&nbsp;12, 2003 (Incorporated by reference to
    Exhibit&nbsp;10.11 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-Q, dated November&nbsp;12, 2003 (file
    no.&nbsp;333-56857)).
    </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">.77</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Thomas F. L&#146;Esperance
    (Incorporated by reference to Exhibit&nbsp;10.5 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;10-Q, dated
    November&nbsp;12, 2003 (file&nbsp;no.&nbsp;333-56857)).
    </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">.78</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and William J. Przybysz
    (Incorporated by reference to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;10-Q, dated November&nbsp;12, 2003 (file
    no.&nbsp;333-56857)).
    </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">.79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and R.&nbsp;Scott Gaster
    (Incorporated by reference to Exhibit&nbsp;10.7 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;10-Q, dated
    November&nbsp;12, 2003 (file no.&nbsp;333-56857)).
    </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">.80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Jeffrey J. Brothers
    (Incorporated by reference to Exhibit&nbsp;10.8 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;10-Q, dated
    November&nbsp;12, 2003 (file no.&nbsp;333-56857)).
    </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">.81</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Bruce P. Rounds (Incorporated
    by reference to Exhibit&nbsp;10.9 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;10-Q, dated November&nbsp;12, 2003 (file
    no.&nbsp;333-56857)).
    </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">.82</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Robert Wallace.
    </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">.83</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Robert Baudhuin.
    </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">.84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and William Bittner.
    </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">.85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Charles Eaves.
    </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">.86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Todd Kaull.
    </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="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="86%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><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">.87</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Paul Larkin.
    </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">.88</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Gary Luckow.
    </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">.89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Richard Pyle.
    </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">.90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Todd Rice.
    </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">.91</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and William Quandt.
    </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">.92</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Scott Spiller.
    </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">.93</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Timothy Studt.
    </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">.94</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Jeffrey Thoms.
    </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">.95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Peter Toonen.
    </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">.96</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Daniel Agnello.
    </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">.97</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Richard Casey.
    </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">.98</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Lee Wilson.
    </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">.99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Patti Andresen-Shew.
    </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">.100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Scott Gaster.
    </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">.101</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Thomas F.
    L&#146;Esperance.
    </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">.102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Jay McDonald.
    </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">.103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Albert Rios.
    </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">.104</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Bruce Rounds.
    </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">.105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Kim Shady.
    </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">.106</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Scott Spiller.
    </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">.107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Robert Wallace.
    </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">.108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;2 to Amended and Restated
    Limited Liability Company Agreement by Alliance Laundry Holdings
    LLC, dated as of September&nbsp;12, 2003 (Incorporated by
    reference to Exhibit&nbsp;10.10 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;10-Q, dated November&nbsp;12, 2003
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.109</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture, dated as of May&nbsp;5, 1998, among
    Alliance Laundry Corporation, the Guarantors and United States
    Trust Company of New York (Incorporated by reference to
    Exhibit&nbsp;4.1 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;S-4, Amendment #1, dated July&nbsp;2, 1998 (file
    no.&nbsp;333-56857)).
    </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="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="86%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><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">.110</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Agreement, dated as of February&nbsp;23, 2004
    among Alliance Laundry Holdings LLC, TCW Shared Opportunity
    Fund&nbsp;IV, L.P., TCW Shared Opportunity Fund&nbsp;IVB, L.P.,
    TCW Shared Opportunity Fund&nbsp;III, L.P., TCW SHOP&nbsp;III
    Subsidiary Investment,&nbsp;Inc. and TCW SHOP&nbsp;IV Subsidiary
    Investment,&nbsp;Inc. and Sankaty Alliance Corp., Sankaty High
    Yield Partners&nbsp;II, L.P., Sankaty High Yield
    Partners&nbsp;III, L.P. and Sankaty Credit
    Opportunities,&nbsp;L.P.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">21</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">Subsidiaries of the Registrant.
    </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 PricewaterhouseCoopers 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 Kirkland&nbsp;&#38; Ellis LLP
    (included in Exhibit&nbsp;5.1).*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Kirkland&nbsp;&#38; Ellis LLP
    (included in Exhibit&nbsp;8.1).*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">24</FONT></TD>
    <TD 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">Powers of Attorney (included on signature page).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">25</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&nbsp;T-1 Statement of Eligibility under
    Trust Indenture Act of 1939, as amended,
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as
    Trustee.*
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="33%" 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 filed by amendment.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Financial
Statement Schedules</I>
</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><I><FONT size="2">Undertakings</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned
registrant hereby undertakes to provide to the underwriters at
the closing specified in the underwriting agreements,
certificates in such denominations and registered in such names
as required by the underwriters to permit prompt delivery to
each purchaser.
</FONT>

<P align="left">
<FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as
indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons
of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion
of the SEC such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
In the event that a claim for indemnification by the registrant
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">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned
registrant hereby undertakes 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">
    <FONT size="2">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of
    determining any liability under the Securities Act, 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 align="left">
    <FONT size="2">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the purpose
    of determining any liability under the Securities Act, 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
    <I>bona fide </I>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>Signatures</B>

<P align="left">
<FONT size="2">Pursuant to the requirements of the Securities
Act, as amended, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Ripon, Wisconsin on
April&nbsp;13, 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">ALLIANCE LAUNDRY HOLDINGS INC.
    </FONT></TD>
</TR>

</TABLE>
<P>

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

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">By:&nbsp;</FONT></TD>
    <TD align="center">
    <FONT size="2">/s/ THOMAS F. L&#146;ESPERANCE
    </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="right">
    <HR size="1" align="right" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">Thomas F. L&#146;Esperance
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">Chief Executive Officer</FONT></I></TD>
</TR>

</TABLE>

<P align="center">
<B>Power of Attorney</B>

<P align="left">
<FONT size="2">KNOW ALL MEN BY THESE PRESENTS, that each person
whose signature appears below constitutes and appoints
Bruce&nbsp;P. Rounds his or her true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any
and all capacities (including his or her capacity as a director
and/or officer of Alliance Laundry Holdings Inc.) to sign any or
all amendments (including post-effective amendments) to this
registration statement and any subsequent registration statement
filed pursuant to Rule&nbsp;462(b) under the Securities Act, and
to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
</FONT>

<P align="left">
<FONT size="2">Pursuant to the requirements of the Securities
Act, this Registration Statement on Form&nbsp;S-1 has been
signed by the following persons in the capacities indicated on
April&nbsp;13, 2004.
</FONT>

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

<TR>
    <TD width="8%"><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="35%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ THOMAS F. L&#146;ESPERANCE<BR>
    <HR size="1" noshade>Thomas F. L&#146;Esperance
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Chief Executive Officer<BR>
    (Principal Executive Officer)
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ BRUCE P. ROUNDS<BR>
    <HR size="1" noshade>Bruce P. Rounds
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Vice President and Chief Financial Officer<BR>
    (Principal Financial and Accounting Officer)
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ EDWARD W. CONARD<BR>
    <HR size="1" noshade>Edward W. Conard
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <BR>
    <HR size="1" noshade><FONT size="2">Stephen C. Sherrill
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ STEPHEN M. ZIDE<BR>
    <HR size="1" noshade>Stephen M. Zide
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ ROBERT C. GAY<BR>
    <HR size="1" noshade>Robert C. Gay
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </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>

<P align="center">
<B>Signatures</B>

<P align="left">
<FONT size="2">Pursuant to the requirements of the Securities
Act, as amended, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Ripon, Wisconsin on
April&nbsp;13, 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">ALLIANCE LAUNDRY SYSTEMS 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="center">
    <FONT size="2">/s/ THOMAS F. L&#146;ESPERANCE
    </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="right">
    <HR size="1" align="right" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">Thomas F. L&#146;Esperance
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">Chief Executive Officer</FONT></I></TD>
</TR>

</TABLE>

<P align="center">
<B>Power of Attorney</B>

<P align="left">
<FONT size="2">KNOW ALL MEN BY THESE PRESENTS, that each person
whose signature appears below constitutes and appoints Bruce P.
Rounds his or her true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him or
her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or
officer of Alliance Laundry Systems LLC) to sign any or all
amendments (including post-effective amendments) to this
registration statement and any subsequent registration statement
filed pursuant to Rule&nbsp;462(b) under the Securities Act, and
to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
</FONT>

<P align="left">
<FONT size="2">Pursuant to the requirements of the Securities
Act, this Registration Statement on Form&nbsp;S-1 has been
signed by the following persons in the capacities indicated on
April&nbsp;13, 2004.
</FONT>

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

<TR>
    <TD width="8%"><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="35%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

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

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ THOMAS F. L&#146;ESPERANCE<BR>
    <HR size="1" noshade>Thomas F. L&#146;Esperance
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Chief Executive Officer<BR>
    (Principal Executive Officer)
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ BRUCE P. ROUNDS<BR>
    <HR size="1" noshade>Bruce P. Rounds
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Vice President and Chief Financial Officer<BR>
    (Principal Financial and Accounting Officer)
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ EDWARD W. CONARD<BR>
    <HR size="1" noshade>Edward W. Conard
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <BR>
    <HR size="1" noshade><FONT size="2">Stephen C. Sherrill
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ STEPHEN M. ZIDE<BR>
    <HR size="1" noshade>Stephen M. Zide
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
</TR>

<TR>
    <TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ ROBERT C. GAY<BR>
    <HR size="1" noshade>Robert C. Gay
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </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>Exhibit Index</B>

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

<TR>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="86%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><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">Certificate of Incorporation of Alliance Laundry
    Holdings 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">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Certificate of Formation of Alliance Laundry
    Systems LLC (Incorporated by reference to Exhibit&nbsp;3.1 to
    Alliance Laundry Systems LLC&#146;s Form&nbsp;S-4,
    Amendment&nbsp;#1, dated July&nbsp;2, 1998
    (file&nbsp;no.&nbsp;333-56857)).
    </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">Bylaws of Alliance Laundry Holdings 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">.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Limited Liability Company
    Agreement of Alliance Laundry Systems LLC (Incorporated by
    reference to Exhibit&nbsp;3.2 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2,
    1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">Amendment No.&nbsp;1 to Amended and Restated
    Limited Liability Company Agreement of Alliance Laundry Systems
    LLC (Incorporated by reference to Exhibit&nbsp;10.4 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;10-Q, dated
    November&nbsp;12, 2003 (file no.&nbsp;333-56857).
    </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">Form of Indenture, among Alliance Laundry
    Holdings Inc., the guarantors thereto
    and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, as Trustee.*
    </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 Senior Subordinated Note (included in
    Exhibit&nbsp;4.1).*
    </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">Form of Registration Rights Agreement.*
    </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">Form of stock certificate for 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">.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of global IDS.*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Opinion of Kirkland&nbsp;&#38; Ellis 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">Opinion of Skadden, Arps, Slate,
    Meagher&nbsp;&#38; Flom 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 Kirkland&nbsp;&#38; Ellis LLP.*
    </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">Purchase Agreement, dated as of April&nbsp;29,
    1998, by and among Alliance Laundry Systems LLC, Alliance
    Laundry Corporation and the Initial Purchasers (Incorporated by
    reference to Exhibit&nbsp;10.1 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2,
    1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">Registration Rights Agreement, dated as of
    May&nbsp;5, 1998, by and among Alliance Laundry Systems LLC,
    Alliance Laundry Corporation, Alliance Laundry Holdings LLC, and
    Lehman Brothers Inc. and Credit Suisse First Boston Corporation
    (Incorporated by reference to Exhibit&nbsp;10.2 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1,
    dated July&nbsp;2, 1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">Amended and Restated Limited Liability Company
    Agreement of Alliance Laundry Holdings LLC, dated as of
    May&nbsp;5, 1998 (Incorporated by reference to Exhibit&nbsp;10.5
    to Alliance Laundry Systems LLC&#146;s Form&nbsp;S-4,
    Amendment&nbsp;#1, dated July&nbsp;2, 1998
    (file&nbsp;no.&nbsp;333-56857)).
    </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">Alliance Laundry Holdings LLC, Securityholders
    Agreement, dated as of May&nbsp;5, 1998, between Alliance
    Laundry Holdings LLC and the Securityholders (Incorporated by
    reference to Exhibit&nbsp;10.6 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2,
    1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">Alliance Laundry Holdings LLC, Registration
    Rights Agreement, made as of May&nbsp;5, 1998, by and among
    Alliance Laundry Holdings LLC, Raytheon Company, Bain/RCL and
    the Securityholders (Incorporated by reference to
    Exhibit&nbsp;10.7 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2, 1998 (file
    no.&nbsp;333-56857)).
    </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">Employment Agreement, made as of May&nbsp;5,
    1998, by and between Alliance Laundry Systems LLC and Thomas F.
    L&#146;Esperance (Incorporated by reference to Exhibit&nbsp;10.8
    to Alliance Laundry Systems LLC&#146;s Form&nbsp;S-4,
    Amendment&nbsp;#1, dated July&nbsp;2, 1998
    (file&nbsp;no.&nbsp;333-56857)).
    </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="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="86%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><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">IRA and Executive Unit Purchase Agreement, made
    as of May&nbsp;5, 1998, by and between RCL Acquisitions, LLC,
    Thomas F. L&#146;Esperance and Stifel, Nicolaus Custodian for
    Thomas F. L&#146;Esperance IRA and Stifel, Nicolaus Custodian
    for Paula K. L&#146;Esperance IRA (Incorporated by reference to
    Exhibit&nbsp;10.9 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2, 1998
    (file&nbsp;no.&nbsp;333-56857)).
    </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">IRA and Executive Unit Purchase Agreement, made
    as of May&nbsp;5, 1998, by and between RCL Acquisitions, LLC, R.
    Scott Gaster and Robert W. Baird&nbsp;&#38; Co. Inc. TTEE for R.
    Scott Gaster IRA (Incorporated by reference to
    Exhibit&nbsp;10.10 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2, 1998
    (file&nbsp;no.&nbsp;333-56857)).
    </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">IRA and Executive Unit Purchase Agreement, made
    as of May&nbsp;5, 1998, by and between RCL Acquisitions, L.L.C.,
    Jeffrey J. Brothers and Delaware Charter Guarantee and Trust
    Company, TTEE for Jeffrey J. Brothers, IRA (Incorporated by
    reference to Exhibit&nbsp;10.11 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2,
    1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">IRA and Executive Unit Purchase Agreement, made
    as of May&nbsp;5, 1998, by and between RCL Acquisitions, L.L.C.,
    Bruce P. Rounds and Stifel, Nicolaus Custodian for Bruce P.
    Rounds IRA (Incorporated by reference to Exhibit&nbsp;10.13 to
    Alliance Laundry Systems LLC&#146;s Form&nbsp;S-4,
    Amendment&nbsp;#1, dated July&nbsp;2, 1998
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">IRA and Executive Unit Purchase Agreement, made
    as of May&nbsp;5, 1998, by and between RCL Acquisitions, L.L.C.,
    Scott L. Spiller and Stifel, Nicolaus Custodian for Scott
    Spiller IRA (Incorporated by reference to Exhibit&nbsp;10.14 to
    Alliance Laundry Systems LLC&#146;s Form&nbsp;S-4,
    Amendment&nbsp;#1, dated July&nbsp;2, 1998 (file no. 333-56857)).
    </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">.16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Deferred Compensation Agreement, made and entered
    into as of May&nbsp;5, 1998, by and among Thomas F.
    L&#146;Esperance, Raytheon Company, Alliance Laundry Holdings
    LLC, and Alliance Laundry Systems LLC (Incorporated by reference
    to Exhibit&nbsp;10.16 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2, 1998
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Deferred Compensation Agreement, made and entered
    into as of May&nbsp;5, 1998, by and among R.&nbsp;Scott Gaster,
    Alliance Laundry Holdings LLC, and Alliance Laundry Systems LLC
    (Incorporated by reference to Exhibit&nbsp;10.17 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1,
    dated July&nbsp;2, 1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">.18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Deferred Compensation Agreement, made and entered
    into as of May&nbsp;5, 1998, by and among Jeffrey J. Brothers,
    Alliance Laundry Holdings LLC, and Alliance Laundry Systems LLC
    (Incorporated by reference to Exhibit&nbsp;10.18 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1,
    dated July&nbsp;2, 1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">.20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Deferred Compensation Agreement, made and entered
    into as of May&nbsp;5, 1998, by and among Bruce P. Rounds,
    Alliance Laundry Holdings LLC, and Alliance Laundry Systems LLC
    (Incorporated by reference to Exhibit&nbsp;10.20 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1,
    dated July&nbsp;2, 1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">.34</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Promissory Note, dated as of May&nbsp;5, 1998,
    from Thomas F. L&#146;Esperance to RCL Acquisitions, L.L.C.
    (Incorporated by reference to Exhibit&nbsp;10.34 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1,
    dated July&nbsp;2, 1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">.35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Promissory Note, dated as of May&nbsp;5, 1998,
    from R.&nbsp;Scott Gaster to RCL Acquisitions, L.L.C.
    (Incorporated by reference to Exhibit&nbsp;10.35 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1,
    dated July&nbsp;2, 1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">.36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Promissory Note, dated as of May&nbsp;5, 1998,
    from Jeffrey J. Brothers to RCL Acquisitions, L.L.C.
    (Incorporated by reference to Exhibit&nbsp;10.36 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1,
    dated July&nbsp;2, 1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">.38</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Promissory Note, dated as of May&nbsp;5, 1998,
    from Bruce P. Rounds to RCL Acquisitions, L.L.C. (Incorporated
    by reference to Exhibit&nbsp;10.38 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2,
    1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">.40</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Advisory Agreement, dated as of May&nbsp;5, 1998,
    by and between Alliance Laundry Systems LLC, and Bain
    Capital,&nbsp;Inc. (Incorporated by reference to
    Exhibit&nbsp;10.40 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2, 1998
    (file&nbsp;no.&nbsp;333-56857)).
    </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="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="86%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><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">.42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Junior Subordinated Promissory Note, dated as of
    May&nbsp;5, 1998, from Alliance Laundry Holdings LLC to Raytheon
    Company (Incorporated by reference to Exhibit&nbsp;10.42 to
    Alliance Laundry Systems LLC&#146;s Form&nbsp;S-4,
    Amendment&nbsp;#1, dated July&nbsp;2, 1998 (file no. 333-56857)).
    </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">.47</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Letter Agreement, dated as of April&nbsp;29,
    1998, by and among Bain/RCL, L.L.C. and RCL Acquisitions,
    L.L.C., Raytheon Company and Raytheon Commercial Laundry L.L.C.
    (Incorporated by reference to Exhibit&nbsp;10.47 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#5,
    dated March&nbsp;3, 1999 (file&nbsp;no.&nbsp;333-56857)).
    </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">.49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture Agreement, dated as of
    November&nbsp;28, 2000, among Alliance Laundry Equipment
    Receivables Trust 2000-A and The Bank of New&nbsp;York as
    indenture trustee (Incorporated by reference to
    Exhibit&nbsp;10.49 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-K, dated March&nbsp;28, 2001
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Purchase Agreement, dated as of November&nbsp;28,
    2000, between Alliance Laundry Equipment Receivables LLC and
    Alliance Laundry Systems LLC, in its own capacity and as
    servicer (Incorporated by reference to Exhibit&nbsp;10.50 to
    Alliance Laundry Systems LLC&#146;s Form&nbsp;10-K, dated
    March&nbsp;28, 2001 (file&nbsp;no.&nbsp;333-56857)).
    </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">.51</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Pooling and Servicing Agreement, dated
    November&nbsp;28, 2000, among Alliance Laundry Systems LLC as
    servicer and originator, Alliance Laundry Equipment Receivables
    LLC and Alliance Laundry Equipment Receivables Trust 2000-A
    (Incorporated by reference to Exhibit&nbsp;10.51 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;10-K, dated March&nbsp;28,
    2001 (file&nbsp;no.&nbsp;333-56857)).
    </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">.52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Trust Agreement, dated November&nbsp;28, 2000,
    between Alliance Laundry Equipment Receivables LLC and
    Wilmington Trust Company as owner trustee (Incorporated by
    reference to Exhibit&nbsp;10.52 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;10-K, dated March&nbsp;28, 2001
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Administration Agreement, dated November&nbsp;28,
    2000, among Alliance Laundry Equipment Receivables Trust 2000-A
    and Alliance Laundry Systems LLC as administrator, and The Bank
    of New&nbsp;York as indenture trustee (Incorporated by reference
    to Exhibit&nbsp;10.53 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-K, dated March&nbsp;28, 2001
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Limited Liability Company Agreement of Alliance
    Laundry Equipment Receivables LLC, dated as of November&nbsp;28,
    2000 (Incorporated by reference to Exhibit&nbsp;10.54 to
    Alliance Laundry Systems LLC&#146;s Form&nbsp;10-K, dated
    March&nbsp;28, 2001 (file no.&nbsp;333-56857)).
    </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">.55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Insurance and Indemnity Agreement, dated as of
    November&nbsp;28, 2000, between AMBAC Assurance Corporation as
    insurer, Alliance Laundry Equipment Receivables Trust 2000-A as
    Issuer, Alliance Laundry Equipment Receivables LLC as Seller,
    Alliance Laundry Systems LLC and The Bank of New&nbsp;York as
    indenture trustee (Incorporated by reference to
    Exhibit&nbsp;10.55 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-K, dated March&nbsp;28, 2001
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.59</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC nonqualified
    deferred compensation plan, dated as of February&nbsp;27, 2002
    (Incorporated by reference to Exhibit&nbsp;10.1 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;10-Q, dated
    November&nbsp;6, 2002 (file&nbsp;no.&nbsp;333-56857)).
    </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">.60</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First amendment to the Alliance Laundry Holdings
    LLC nonqualified deferred compensation plan, dated as of
    June&nbsp;21, 2002 (Incorporated by reference to
    Exhibit&nbsp;10.2 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-Q, dated November&nbsp;6, 2002
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.61</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Second amendment, Alliance Laundry Holdings LLC
    nonqualified deferred compensation plan, dated as of
    August&nbsp;19, 2002 (Incorporated by reference to
    Exhibit&nbsp;10.3 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-Q, dated November&nbsp;6, 2002
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.62</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Credit Agreement, dated as
    of August&nbsp;2, 2002, among Alliance Laundry Holdings LLC,
    Alliance Laundry Systems LLC, the several banks or other
    financial institutions or entities from time to time parties to
    this Agreement, Lehman Commercial Paper Inc. as syndication
    agent, Fleet National Bank and LaSalle Bank National Association
    as documentation agents and General Electric Capital Corporation
    as administrative agent (Incorporated by reference to
    Exhibit&nbsp;10.62 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-K, dated March&nbsp;12, 2003
    (file&nbsp;no.&nbsp;333-56857)).
    </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="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="86%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><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">.63</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Intercreditor Agreement, dated as of
    November&nbsp;26, 2002, by and between General Electric Capital
    Corporation as administrative agent and The Bank of
    New&nbsp;York as indenture trustee (Incorporated by reference to
    Exhibit&nbsp;10.63 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-K, dated March&nbsp;12, 2003
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.64</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Supply Agreement, effective January&nbsp;1, 2003,
    by and among Coinmach Corporation, Super Laundry Equipment
    Corporation and Alliance Laundry Systems LLC (certain portions
    of this exhibit were omitted subject to a pending request for
    confidential treatment) (Incorporated by reference to
    Exhibit&nbsp;10.64 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-K, dated March&nbsp;12, 2003
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.65</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture, dated as of November&nbsp;26, 2002,
    among Alliance Laundry Equipment Receivables Trust 2002-A and
    The Bank of New&nbsp;York as indenture trustee (incorporated by
    reference to Exhibit&nbsp;4.1 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;S-4, Amendment&nbsp;#1, dated July&nbsp;2,
    1998 (file&nbsp;no.&nbsp;333-56857)).
    </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">.66</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Purchase Agreement, dated as of November&nbsp;26,
    2002, between Alliance Laundry Equipment Receivables 2002 LLC as
    buyer and Alliance Laundry Systems LLC as seller (Incorporated
    by reference to Exhibit&nbsp;10.66 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;10-K, dated March&nbsp;12, 2003
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.67</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Pooling and Servicing Agreement, dated
    November&nbsp;26, 2002, among Alliance Laundry Systems LLC as
    servicer and originator, Alliance Laundry Equipment Receivables
    2002 LLC as transferor and Alliance Laundry Equipment
    Receivables Trust 2002-A as issuer (Incorporated by reference to
    Exhibit&nbsp;10.67 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-K, dated March&nbsp;12, 2003
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.68</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Trust Agreement, dated November&nbsp;26, 2002,
    between Alliance Laundry Equipment Receivables 2002 LLC as
    transferor and Wilmington Trust Company as owner trustee
    (Incorporated by reference to Exhibit&nbsp;10.68 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;10-K, dated March&nbsp;12,
    2003 (file&nbsp;no.&nbsp;333-56857)).
    </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">.69</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Administration Agreement, dated November&nbsp;26,
    2002, among Alliance Laundry Equipment Receivables Trust 2002-A,
    as insurer, and Alliance Laundry Systems LLC, as administrator,
    and The Bank of New&nbsp;York, as indenture trustee
    (Incorporated by reference to Exhibit&nbsp;10.69 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;10-K, dated March&nbsp;12,
    2003 (file&nbsp;no.&nbsp;333-56857)).
    </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">.70</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Limited Liability Company Agreement of Alliance
    Laundry Equipment Receivables 2002 LLC, dated as of
    November&nbsp;26, 2002 (Incorporated by reference to
    Exhibit&nbsp;10.70 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-K, dated March&nbsp;12, 2003
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.71</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Insurance and Indemnity Agreement, dated as of
    November&nbsp;26, 2002, between AMBAC Assurance Corporation as
    insurer, Alliance Laundry Equipment Receivables Trust 2002-A as
    issuer, Alliance Laundry Equipment Receivables 2002 LLC as
    seller, Alliance Laundry Systems LLC and The Bank of
    New&nbsp;York as indenture trustee (Incorporated by reference to
    Exhibit&nbsp;10.71 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-K, dated March&nbsp;12, 2003
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.72</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Note Purchase Agreement, dated as of
    November&nbsp;26, 2002, among Alliance Laundry Equipment
    Receivables Trust 2002-A as issuer, The Bank of New&nbsp;York as
    indenture trustee, Alliance Laundry Systems LLC as the servicer,
    Alliance Laundry Equipment Receivables 2002 LLC as the
    transferor, the Note Purchasers party hereto, Bear
    Stearns&nbsp;&#38; Co. Inc. as co-administrative agent, and
    Canadian Imperial Bank of Commerce as co-administrative agent
    and agent (Incorporated by reference to Exhibit&nbsp;10.72 to
    Alliance Laundry Systems LLC&#146;s Form&nbsp;10-K, dated
    March&nbsp;12, 2003 (file&nbsp;no.&nbsp;333-56857)).
    </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">.73</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;1 to Alliance Laundry Systems
    LLC Employment Agreement, dated as of July&nbsp;23, 2003 by and
    between Alliance Laundry Systems LLC and Thomas F.
    L&#146;Esperance (Incorporated by reference to Exhibit&nbsp;10.1
    to Alliance Laundry Systems LLC&#146;s Form&nbsp;10-Q, dated
    November&nbsp;12, 2003 (file no.&nbsp;333-56857)).
    </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="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="86%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><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">.74</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;1 to Alliance Laundry Holdings
    LLC Securityholders Agreement and Registration Rights Agreement,
    dated as of July&nbsp;23, 2003 (Incorporated by reference to
    Exhibit&nbsp;10.2 of Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-Q, dated November&nbsp;12, 2003 (file
    no.&nbsp;333-56857)).
    </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">.75</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;1 to Amended and Restated
    Limited Liability Company Agreement by Alliance Laundry Holdings
    LLC, dated as of July&nbsp;23, 2003 (Incorporated by reference
    to Exhibit&nbsp;10.3 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-Q, dated November&nbsp;12, 2003 (file
    no.&nbsp;333-56857)).
    </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">.76</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;2 to Securityholders Agreement
    and Registration Rights Agreement by and among Alliance Laundry
    Holdings LLC and Bain/RCL, L.L.C., dated as of
    September&nbsp;12, 2003 (Incorporated by reference to
    Exhibit&nbsp;10.11 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;10-Q, dated November&nbsp;12, 2003 (file
    no.&nbsp;333-56857)).
    </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">.77</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Thomas F. L&#146;Esperance
    (Incorporated by reference to Exhibit&nbsp;10.5 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;10-Q, dated
    November&nbsp;12, 2003 (file&nbsp;no.&nbsp;333-56857)).
    </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">.78</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and William J. Przybysz
    (Incorporated by reference to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;10-Q, dated November&nbsp;12, 2003 (file
    no.&nbsp;333-56857)).
    </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">.79</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and R.&nbsp;Scott Gaster
    (Incorporated by reference to Exhibit&nbsp;10.7 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;10-Q, dated
    November&nbsp;12, 2003 (file no.&nbsp;333-56857)).
    </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">.80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Jeffrey J. Brothers
    (Incorporated by reference to Exhibit&nbsp;10.8 to Alliance
    Laundry Systems LLC&#146;s Form&nbsp;10-Q, dated
    November&nbsp;12, 2003 (file no.&nbsp;333-56857)).
    </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">.81</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Bruce P. Rounds (Incorporated
    by reference to Exhibit&nbsp;10.9 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;10-Q, dated November&nbsp;12, 2003 (file
    no.&nbsp;333-56857)).
    </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">.82</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Robert Wallace.
    </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">.83</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Robert Baudhuin.
    </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">.84</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and William Bittner.
    </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">.85</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Charles Eaves.
    </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">.86</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Todd Kaull.
    </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">.87</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Paul Larkin.
    </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">.88</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Gary Luckow.
    </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">.89</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Richard Pyle.
    </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">.90</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Todd Rice.
    </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">.91</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and William Quandt.
    </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="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="86%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><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">.92</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Scott Spiller.
    </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">.93</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Timothy Studt.
    </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">.94</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Jeffrey Thoms.
    </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">.95</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Peter Toonen.
    </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">.96</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August&nbsp;1, 2003 by and between
    Alliance Laundry Holdings LLC and Daniel Agnello.
    </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">.97</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Richard Casey.
    </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">.98</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Lee Wilson.
    </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">.99</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Patti Andresen-Shew.
    </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">.100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Scott Gaster.
    </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">.101</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Thomas F.
    L&#146;Esperance.
    </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">.102</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Jay McDonald.
    </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">.103</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Albert Rios.
    </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">.104</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Bruce Rounds.
    </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">.105</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Kim Shady.
    </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">.106</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Scott Spiller.
    </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">.107</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February&nbsp;24, 2004 by and
    between Alliance Laundry Holdings LLC and Robert Wallace.
    </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">.108</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amendment No.&nbsp;2 to Amended and Restated
    Limited Liability Company Agreement by Alliance Laundry Holdings
    LLC, dated as of September&nbsp;12, 2003 (Incorporated by
    reference to Exhibit&nbsp;10.10 to Alliance Laundry Systems
    LLC&#146;s Form&nbsp;10-Q, dated November&nbsp;12, 2003
    (file&nbsp;no.&nbsp;333-56857)).
    </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">.109</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Indenture, dated as of May&nbsp;5, 1998, among
    Alliance Laundry Corporation, the Guarantors and United States
    Trust Company of New York (Incorporated by reference to
    Exhibit&nbsp;4.1 to Alliance Laundry Systems LLC&#146;s
    Form&nbsp;S-4, Amendment #1, dated July&nbsp;2, 1998 (file
    no.&nbsp;333-56857)).
    </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">.110</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Agreement, dated as of February&nbsp;23, 2004
    among Alliance Laundry Holdings LLC, TCW Shared Opportunity
    Fund&nbsp;IV, L.P., TCW Shared Opportunity Fund&nbsp;IVB, L.P.,
    TCW Shared Opportunity Fund&nbsp;III, L.P., TCW SHOP&nbsp;III
    Subsidiary Investment,&nbsp;Inc. and TCW SHOP&nbsp;IV Subsidiary
    Investment,&nbsp;Inc. and Sankaty Alliance Corp., Sankaty High
    Yield Partners&nbsp;II, L.P., Sankaty High Yield
    Partners&nbsp;III, L.P. and Sankaty Credit
    Opportunities,&nbsp;L.P.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">21</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">Subsidiaries of the Registrant.
    </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 PricewaterhouseCoopers 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 Kirkland&nbsp;&#38; Ellis LLP
    (included in Exhibit&nbsp;5.1).*
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Kirkland&nbsp;&#38; Ellis LLP
    (included in Exhibit&nbsp;8.1).*
    </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>

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<TR>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
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    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="86%"><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 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">Powers of Attorney (included on signature page).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">25</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&nbsp;T-1 Statement of Eligibility under
    Trust Indenture Act of 1939, as amended,
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as
    Trustee.*
    </FONT></TD>
</TR>

</TABLE>
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<P>

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

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    <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 filed by amendment.
    </FONT></TD>
</TR>

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[{"type": "S-1", "sequence": "1", "filename": "y95720sv1.htm", "description": "FORM S-1", "secsgml_size_bytes": 1778652}]
[{"company-data": {"conformed-name": "ALLIANCE LAUNDRY HOLDINGS INC", "cik": "0001286698", "irs-number": "522055893", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-114420", "film-number": "04729549"}, "business-address": {"street1": "P O BOX 990", "city": "RIPON", "state": "WI", "zip": "54971", "phone": "9207483121"}}, {"company-data": {"conformed-name": "ALLIANCE LAUNDRY SYSTEMS LLC", "cik": "0001063699", "assigned-sic": "5080", "irs-number": "391927923", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-114420-01", "film-number": "04729550"}, "business-address": {"street1": "ALLIANCE LAUNDRY SYSTEMS", "street2": "P.O. BOX 990", "city": "RIPON", "state": "WI", "zip": "54971-0990", "phone": "9207481634"}, "mail-address": {"street1": "ALLIANCE LAUNDRY SYSTEMS", "street2": "P.O. BOX 990", "city": "RIPON", "state": "WI", "zip": "54971-0990"}}]
FORM S-1
Table of Contents
As filed with the Securities and Exchange
Commission on April 13, 2004
No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Alliance Laundry Holdings Inc.
(Exact name of registrant as specified in its
charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
5080
(Primary Standard Industrial
Classification Code Number)
52-2055893
(I.R.S. Employer
Identification No.)
P.O. Box 990
Ripon, Wisconsin 54971-0990
(920) 748-3121
(Address, including zip code, and telephone
number, including area code, of registrant's principal
executive offices)
Thomas F. L'Esperance
Chairman and Chief Executive Officer
Alliance Laundry Holdings Inc.
P.O. Box 990
Ripon, Wisconsin 54971-0990
(920) 748-3121
(Name, address, including zip code, and
telephone number, including area code, of agent for
service)
Copies to:
Joshua N. Korff, Esq.
Kirkland & Ellis LLP
Citigroup Center
153 East 53rd Street
New York, New York 10022
(212) 446-4800
Richard B. Aftanas, Esq.
David J. Goldschmidt, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
(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 registered additional
securities for an offering pursuant to Rule 462(b) under
the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same offering.
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 statement
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, please check the following box.
o
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities
to be Registered
Proposed Maximum
Aggregate Offering Price(1)
Amount of Registration Fee(1)
Income Deposit Securities (IDSs)(2)
Class A Common Stock, par value $0.01 per
    share(3)
% Senior Subordinated Notes due
    2014(4)
Subsidiary Guarantee of   % Senior
    Subordinated Notes(5)
Total
$375,000,000.00
$47,512.50
(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. The
    proposed maximum aggregate offering price includes
    $         million
    aggregate principal amount of senior subordinated notes of the
    same series that will be issued separately (not in the form of
    IDSs).
(2)
The IDSs
    represent                 underlying
    shares of the Class A common stock and
    $         aggregate
    principal amount of
    underlying     % senior subordinated
    notes of Alliance Laundry Holdings Inc. ("Alliance
    Holdings").
    Includes                 IDSs
    subject to the underwriters' over-allotment option and 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 Alliance Holdings' Class A common stock included in
    the IDSs described above.
(4)
Includes
    $         million
    aggregate principal amount of Alliance
    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
    $                million
    principal amount of senior subordinated notes of the same series
    that will be issued separately (not in the form of IDSs).
(5)
The subsidiary guarantor listed in the Table of
    Additional Registrants on the next page will 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.
The Registrant hereby
amends this registration statement on such date or dates as may
be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that
this registration statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933
or until the registration statement shall become effective on
such date as the Commission, acting pursuant to such
Section 8(a), may determine.
Table of Contents
Table of Additional Registrant Guarantor
Exact Name of
    Registrant
Guarantor as Specified in its
    Charter
State or Other
Jurisdiction of
Incorporation
or Organization
I.R.S. Employer
Identification Number
Address Including Zip Code,
Telephone Number Including
Area Code of Registrant
Guarantor's Principal Executive Offices
Alliance Laundry Systems LLC
Delaware
39-1927923
P.O. Box 990
Ripon, Wisconsin 54971-0990
(920) 748-3121
Table of Contents
Subject to Completion,
Dated April 13, 2004
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.
Income Deposit Securities (IDSs)
$                     % Senior
Subordinated Notes due 2014
Alliance Laundry Holdings Inc.
We are
selling                   IDSs
in the United States
representing                    shares
of our Class A common stock and
$          million
aggregate principal amount of
our     % senior subordinated notes due
2014. 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
$         aggregate
principal amount of our     % senior
subordinated notes separately (not in the form of IDSs). The
completion of the offering of separate senior subordinated notes
is a condition to our sale of IDSs. In addition, as part of our
reorganization described elsewhere in this prospectus, we are
issuing IDSs representing shares of our Class A common
stock and
$          million
aggregate principal amount of
our     % senior subordinated notes to
our existing equity holders in exchange for the interests they
hold.
This is the initial public offering of our IDSs
and 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 will be     % of their stated
principal amount.
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, except as
described below, any holder of shares of our Class A common
stock and senior subordinated notes may, at any time, 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, upon the occurrence of any redemption of
the senior subordinated notes or upon the maturity of the senior
subordinated notes. Following any such automatic separation,
shares of Class A common stock and senior subordinated
notes may no longer be combined to form IDSs.
Our senior subordinated notes mature
on                   ,
2014, subject to our right to extend their maturity for two
additional successive five-year terms under specified
circumstances. 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" on page 102.
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 (not in the form of
IDSs), 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. For more information
regarding these automatic exchanges and the effect they may have
on your investment, see "Description of Senior Subordinated
Notes — Covenants Relating to
IDSs — Procedures Relating to Subsequent
Issuance" on page 107 and "Material United
States Federal Income Tax
Consequences — United
States Holders — Senior Subordinated
Notes — Additional Issuances" on
page 144.
We will apply to list our IDSs on the American
Stock Exchange under the trading symbol
"           ."
Investing in our IDSs
(including the shares of our Class A common stock and
senior subordinated notes represented thereby) and in our senior
subordinated notes involves risks. See "Risk Factors"
beginning on page 25.
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.
Per IDS(1)
Total
Per Note(2)
Total
Public offering price
$
$
%
$
Underwriting discount
$
$
%
$
Proceeds to Alliance Laundry Holdings Inc.
    (before expenses)(3)
$
$
%
$
(1)
The price per IDS comprises of
    $        allocated to
    each share of common stock and
    $        allocated to
    each senior subordinated note.
(2)
Relates to the
    $        principal
    amount of senior subordinated notes sold separately (not in the
    form of IDSs).
(3)
Approximately
    $         million
    of these proceeds will be paid to our existing equity investors.
Some of our existing equity investors have
granted the underwriters an option to purchase up
to            additional
IDSs to cover over-allotments.
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.
Joint Book-Running Managers
CIBC World Markets
Lehman Brothers
,
2004
Table of Contents
NOTICE TO PURCHASERS OF SEPARATE SENIOR
SUBORDINATED NOTES AND
ACKNOWLEDGEMENT OF PURCHASER INTENT
None of the separate senior subordinated notes
purchased in connection with this offering may be purchased,
directly or indirectly, by persons who are also
(1) purchasing IDSs in this offering or (2) otherwise
receiving IDSs or shares of Class B common stock or shares
of preferred stock in connection with the reorganization
described elsewhere in this prospectus.
Accordingly, each
investor purchasing the separate senior subordinated notes in
this offering
must not
purchase IDSs in this offering and
must not
concurrently enter into any plan or
pre-arrangement whereby it would acquire any IDSs or our Company
equity (as defined below) or transfer the separate senior
subordinated notes to any holder of IDSs or our Company equity.
In addition, each person receiving IDSs or shares of
Class B common stock or shares of preferred stock in
connection with the reorganization
must not
purchase
separate senior subordinated notes in this offering.
Each investor in this offering assumes
sole
responsibility for ensuring that it complies with the
restrictions above. Neither we nor the underwriters will assume
any responsibility to ensure that any investor complies with
these restrictions.
If you are unsure
whether the restrictions above would prohibit you from
purchasing the separate senior subordinated notes or our IDSs in
this offering, you should consult your own legal advisor with
regard to the application of these restrictions to your
individual circumstances.
Furthermore, each person purchasing separate
senior subordinated notes in this offering, by acquiring the
separate senior subordinated notes, thereby represents to us and
the underwriters 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;
(b)
neither such purchaser nor any entity, investment
    fund or account over which such purchaser exercises investment
    control owns, or has the contractual right to acquire, our
    equity securities (including securities which are convertible,
    exchangeable or exercisable into or for our equity or our
    equity-linked securities, which we refer to collectively as our
    Company equity); and
(c)
such purchaser is not party to any plan or
    pre-arrangement whereby it would (1) acquire any IDSs or
    our Company equity or (2) transfer the separate senior
    subordinated notes to any holder of IDSs or our Company equity.
For purposes of these representations, the
"purchaser" shall be deemed to be (1) the person who
initially purchases the separate senior subordinated notes from
the underwriters in this offering and (2) the person(s), if any,
pursuant to whose instructions such purchase was made.
Table of Contents
Page
Summary
1
Risk Factors
25
Cautionary Statement
    Regarding Forward-Looking Statements
39
Use of Proceeds
40
Dividend Policy and
    Restrictions
42
Capitalization
44
Dilution
45
Selected Historical
    Financial and Operating Data
46
Management's Discussion
    and Analysis of Financial Condition and Results of Operations
50
Business
64
Management
81
Principal and Selling
    Stockholders
85
Related Party
    Transactions
86
Description of Certain
    Indebtedness
89
Description of IDSs
92
Description of Capital
    Stock
97
Description of Senior
    Subordinated Notes
101
IDSs Eligible for Future
    Sale
139
Material United States
    Federal Income Tax Consequences
140
Certain ERISA
    Considerations
150
Underwriting
153
Legal Matters
157
Experts
157
Where You Can Find
    Additional Information
157
Index to Financial
    Statements
F-1
2003 EXECUTIVE UNIT AGREEMENT
2003 EXECUTIVE UNIT AGREEMENT
2003 EXECUTIVE UNIT AGREEMENT
2003 EXECUTIVE UNIT AGREEMENT
2003 EXECUTIVE UNIT AGREEMENT
2003 EXECUTIVE UNIT AGREEMENT
2003 EXECUTIVE UNIT AGREEMENT
2003 EXECUTIVE UNIT AGREEMENT
2003 EXECUTIVE UNIT AGREEMENT
2003 EXECUTIVE UNIT AGREEMENT
2003 EXECUTIVE UNIT AGREEMENT
2003 EXECUTIVE UNIT AGREEMENT
2003 EXECUTIVE UNIT AGREEMENT
2003 EXECUTIVE UNIT AGREEMENT
2003 EXECUTIVE UNIT AGREEMENT
EXECUTIVE UNIT REPURCHASE AGREEMENT
EXECUTIVE UNIT REPURCHASE AGREEMENT
EXECUTIVE UNIT REPURCHASE AGREEMENT
EXECUTIVE UNIT REPURCHASE AGREEMENT
EXECUTIVE UNIT REPURCHASE AGREEMENT
EXECUTIVE UNIT REPURCHASE AGREEMENT
EXECUTIVE UNIT REPURCHASE AGREEMENT
EXECUTIVE UNIT REPURCHASE AGREEMENT
EXECUTIVE UNIT REPURCHASE AGREEMENT
EXECUTIVE UNIT REPURCHASE AGREEMENT
EXECUTIVE UNIT REPURCHASE AGREEMENT
AGREEMENT
SUBSIDIARIES OF THE REGISTRANT
CONSENT OF PRICEWATERHOUSE COOPERS
Table of Contents
Summary
The following is a summary of the principal
features of this offering of IDSs and senior subordinated notes
and should be read together with the more detailed information
and financial data and statements contained elsewhere in this
prospectus.
Throughout this prospectus, we refer to
Alliance Laundry Holdings Inc., a Delaware corporation, as
"Alliance Holdings," and, together with its
consolidated operations, as "the Company,"
"Alliance," "we," "our" and
"us," unless otherwise indicated. Any reference to
"Alliance Laundry" refers to our wholly-owned
subsidiary, Alliance Laundry Systems LLC, a Delaware limited
liability company, and its consolidated operations, unless
otherwise indicated. Alliance Holdings is a holding company and
has no direct operations. Alliance Holdings' principal
assets are the direct and indirect equity interests of Alliance
Laundry.
Our Company
Overview
We are the leading designer, manufacturer and
marketer in North America of commercial laundry equipment used
in laundromats, multi-housing laundries and on-premise
laundries. Under the well-known brand names of Speed
Queen®, UniMac® and Huebsch®, we produce a full
line of commercial washing machines and dryers with load
capacities from 16 to 250 pounds. We believe we have been
the market share leader in the North American stand alone
commercial laundry equipment industry for more than ten years.
With a market share of approximately 39% in 2003, we believe our
sales are more than twice as large as those of the next largest
competitor.
We serve three distinct end-customer groups:
(i) laundromats; (ii) multi-housing laundries,
consisting primarily of common laundry facilities in apartment
buildings, universities and military installations; and
(iii) on-premise laundries, consisting primarily of
in-house laundry facilities in hotels, hospitals, nursing homes
and prisons. The primary means of serving these end-customers is
through distributors and route operators. We believe that we
have the most extensive distribution network in North America
which gives us a significant competitive advantage. We reach
laundromat and on-premise laundry end-customers through a
network of over 200 North American distributors and over
100 international distributors, serving over 90 different
countries. Our distributors purchase equipment from us, then
re-sell and install it for laundromat and on-premise
end-customers. We serve multi-housing end-customers through a
network of over 80 route operators. Route operators
purchase equipment from us, and then obtain leases from
multi-housing property managers to place it into common laundry
rooms. We estimate that our distributors and route operators
have either the number one or number two market position in over
80% of North American markets. We believe that the superior
quality and loyalty of our distribution network has been a
significant factor in achieving the number one market share in
North America in each of our three end-customer groups.
We estimate that the North American stand alone
commercial laundry equipment industry generated approximately
$472.0 million in revenue in 2003. The industry's
revenues are primarily driven by population growth and the
replacement cycle of laundry equipment. North American consumers
view clean clothes as a necessity, with economic conditions
having limited effect on the frequency of use, and therefore the
useful life, of laundry equipment. As a result, the
industry's revenues have been relatively stable over time
and through economic downturns.
Company Strengths
We believe that we have the following competitive
strengths:
•
Market Leader with Significant Installed Base.
We are the market share leader in the
    overall North American stand alone commercial laundry
    equipment industry, and we believe that our sales are more than
    twice as large as those of the next largest competitor. We have
    grown overall market share to approximately 39% in 2003 from 21%
    in 1993. In addition to leading the overall market, we are the
    leader in sales to each of our three primary end-customer groups.
1
Table of Contents
Leading and Growing Market Share
North American Stand Alone Commercial Laundry
Equipment(1)
(1)
Management estimates.
As a result of our market leadership for more
    than ten years, we believe that we have the largest installed
    base of equipment in North America comprised of over two million
    machines. A significant majority of our revenue is attributable
    to replacement sales driven by our large installed base combined
    with an average ten year estimated life per machine.
•
Stable Revenues and Increasing Cash Flow.
We have experienced stable revenues
    even during economic slowdowns, driven by the underlying
    stability of the industry and the recurring sales of replacement
    equipment and service parts which together comprise the majority
    of our revenues. In addition, since 1995, we have progressively
    reduced our manufacturing costs through improvements in raw
    material usage and labor efficiency, as well as through plant
    consolidation, resulting in improving cash from operations as
    demonstrated by our historical financial performance. Our net
    cash from operating activities was approximately
    $11.7 million, $15.3 million, $21.3 million,
    $22.8 million and $30.4 million for 1999, 2000, 2001,
    2002 and 2003, respectively.
•
Limited Working Capital and Consistent Capital
    Expenditure Requirements.
We
    aggressively manage our working capital requirements, having
    reduced net working capital as a percent of revenue from 8.2% in
    2000 to 6.7% in 2003. From December of 2000 to December of 2003,
    inventory has been reduced from $37.5 million to
    $26.2 million, an improvement of 30.0%. We also have
    consistent capital expenditure requirements, with maintenance
    capital expenditures of $3.6 million, $2.6 million,
    $3.6 million, $2.7 million and $3.6 million, for
    1999, 2000, 2001, 2002 and 2003, respectively. We believe that
    we currently have excess manufacturing capacity and can increase
    production without incurring significant additional capital
    expenditures.
•
Extensive and Loyal Distribution Network.
We believe we have developed the most
    extensive distribution network in the North American industry,
    with over 200 distributors and 80 route operators. We
    estimate that our laundromat and on-premise laundry distributors
    and multi-housing route operators have either the number one or
    number two market position in over 80% of North American
    markets. These leading
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distributors and route operators are attracted by
    our industry-leading brand equity, broad product array,
    significant installed base and our comprehensive value-added
    support, which includes training, extensive electronic support
    of installation and service and joint promotion efforts. These
    factors lead to high costs for distributors and route operators
    to switch manufacturers, especially when combined with their
    substantial investments in service parts inventories and in
    training their sales and installation personnel with respect to
    our highly engineered products. Our customers place great value
    on the proven reliability of our products, backed by years of
    demonstrated experience in the field, as this significantly
    impacts their long term repair and maintenance expenses. We have
    not experienced any significant turnover of our distributors and
    route operators, of which a significant number have been
    customers for over ten years.
•
High Barriers to Entry.
We believe that significant time and
    substantial capital investment would be required for a new
    entrant to compete effectively in this market. Many years of
    engineering and field testing, plus substantial investment in
    plant and equipment, are required before the process of
    attempting to earn market share can take place. In addition, a
    new entrant would have to break the strong, established
    relationships that existing manufacturers have developed with
    distributors. There are significant costs for distributors and
    route operators to break these long-term relationships,
    including extensive retraining of distributors' and route
    operators' sales, installation and service personnel and
    duplication of service parts inventories which must be stocked
    for years.
•
Comprehensive and Innovative Product Offering.
We believe our product lines lead the
    industry in reliability, breadth of offerings, functionality and
    advanced features. In addition, we believe we are the only
    manufacturer in North America to produce a full product line
    (including topload washers, dryers, frontload washers,
    washer-extractors and tumbler dryers for all commercial customer
    groups), thereby providing customers with a single source
    solution for all their stand alone commercial laundry equipment
    needs. Our development team of more than 80 engineers and
    technical personnel, along with our marketing and sales
    personnel, work together with our major customers to redesign
    and enhance our products to better meet customer needs. For
    example, new products such as our NetMaster
TM
system
    emphasize efficiency and feature new electronic controls,
    facilitating ease of use as well as improving performance and
    reliability.
•
Leading North American Brands.
We market and sell our products under
    the widely recognized brand names Speed Queen®,
    UniMac®, Huebsch® and Ajax®. We believe that we
    have industry-leading brand equity and brand recognition, based
    upon historical customer survey results and the substantial
    market share growth achieved since 1993.
•
Strong and Experienced Management Team.
Led by chief executive officer Thomas
    L'Esperance, we have assembled a strong and experienced
    management team. Our seven executive officers have an average of
    over 16 years of experience in the commercial laundry
    equipment and appliance industries. This management team has
    executed numerous strategic initiatives, including:
    (i) developing strategic alliances with key customers;
    (ii) acquiring and successfully integrating the commercial
    washer-extractor business of UniMac® and the press and
    finishing equipment business of Ajax®;
    (iii) implementing manufacturing cost reduction and quality
    improvement programs; and (iv) ongoing refinements to our
    product offerings. Management's economic interests will
    align with those of securityholders through management's
    participation in our long-term incentive plan.
Business Strategy
We strive to continue our strong financial
performance and selectively pursue growth opportunities by
offering to our customers a full line of the most reliable and
functional stand alone commercial laundry equipment, together
with industry-leading, comprehensive value-added services. The
key elements of our strategy are as follows:
•
Develop and Strengthen Relationships with Key
    Customers.
We have developed and will
    continue to pursue long-term relationships and supply agreements
    with key customers. The
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relationships that we establish with our
    customers are comprehensive and include training, extensive
    technical support and promotion activities. In addition, we
    model our product development efforts to meet evolving customer
    preferences by working with key customers to develop new
    products, features and value-added services.
We have not experienced any significant customer
    turnover. Our top ten customers, other than a significant
    new account that was added in 2003, have been our customers for
    at least ten years. For example, we currently sell our
    products to Coinmach Corporation, our largest customer, under a
    multi-year supply agreement. Coinmach, which is the largest
    operator of multi-housing laundries in North America, has been a
    significant customer of ours for over two decades.
•
Continue to Improve Manufacturing Operations.
We seek to continuously enhance our
    product quality and reduce costs through ongoing refinements to
    our manufacturing processes. We achieve such improvements, and
    intend to continue doing so, through collaboration among key
    customers, suppliers and our engineering and marketing
    personnel. Since 1996, we have progressively reduced our
    manufacturing costs through improvements in raw material usage
    and labor efficiency, as well as plant consolidation. Since
    2000, we have been implementing a demand flow production system
    on our higher volume product lines. These process changes have
    resulted in significant improvements in assembly efficiency,
    inventory levels, customer order lead times and production
    quality. For example, labor productivity improved by 4.5% from
    2002 to 2003, and over the same period, we improved our first
    year warranty incident rate by 20% from an already industry
    leading level of 0.2% of sales.
•
Expand into the U.S. Home Laundry Market.
We are planning to re-enter the
    U.S. home laundry market in October 2004, after the
    expiration of a non-compete agreement. This non-compete
    agreement was a result of the divestiture of a sister division
    in 1997. Our strategy in the home laundry market will be
    dual-pronged. First, we plan to re-enter the mid to high-end
    home laundry market with existing products that we currently
    sell internationally and into other markets. These existing
    products are designed to have useful lives approximately twice
    that of typical home laundry equipment. Before exiting the home
    laundry market pursuant to the non-compete agreement, we
    produced annual home laundry units of about 500,000 for a 5%
    market share of annual home laundry units, which generated
    approximately $150 million in annual sales. We plan to
    leverage the strong brand equity of our Speed Queen® name
    in order to recapture our historic market share.
Second, we have signed a letter-of-intent with an
    ultra-premium home appliance company to produce
    professional-quality home laundry equipment to be sold under
    their brand name. This equipment is based completely on our
    current commercial equipment technology and production methods.
    These plans to enter both the mid to high-end and the
    ultra-premium home laundry markets should allow us to expand our
    sales and continue to diversify our customer base. These
    products will be produced in our current facilities with minimal
    incremental capital expenditures.
New Credit Facility
Concurrently with the closing of this offering,
we will enter into a
$               new
senior secured credit facility with a syndicate of financial
institutions, including affiliates of CIBC World Markets Corp.
and Lehman Brothers Inc. Throughout this prospectus, we refer to
this credit facility as the "new credit facility." We
expect that the new credit facility will be comprised of a
senior secured revolving credit facility in a total principal
amount of up to
$           million,
which we refer to as the "new revolver," and a senior
secured term loan facility in an aggregate principal amount of
$           million,
which we refer to as the "new term loan." We expect
that the new revolving credit facility and the new term loan
will each have
a           -year
maturity. The closing of this offering is conditioned upon the
closing of the new credit facility. See "Description of
Certain Indebtedness — New Credit Facility."
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Tender Offer and Consent
Solicitation
Prior to this offering, we will commence a tender
offer and consent solicitation with respect to all of our
outstanding $110.0 million aggregate principal amount of
9 5/8% senior subordinated notes due 2008, for an
expected aggregate consideration of
$
million.
The closing of this offering will be conditioned upon the
receipt of the tender and consent of at least a majority in
aggregate principal amount of our existing senior subordinated
notes outstanding, and the consummation of the tender offer and
consent solicitation is conditioned upon the closing of this
offering. Holders of our existing senior subordinated notes that
provide consents will be obligated to tender their notes in the
offer, and holders of our existing senior subordinated notes
that tender their notes are obligated to provide consents. Upon
obtaining the minimum required consents in the tender offer and
consent solicitation, we and the trustee of the existing senior
subordinated notes will enter into a supplemental indenture that
will delete all of the material restrictive covenants contained
in the indenture governing the existing senior subordinated
notes. The tender offer and consent solicitation will be
consummated on the terms described above. We will use a portion
of the net proceeds from this offering and borrowings under the
new credit facility to pay for our existing senior subordinated
notes accepted for purchase in the tender offer and consent
solicitation.
Use of Proceeds
We estimate that we will receive net proceeds
from this offering of approximately
$           million
after deducting underwriting discounts and commissions and other
estimated offering expenses payable by us. We will use these net
proceeds, together with
$           million
of borrowings under our new credit facility and cash on hand, to
repay our existing indebtedness, to repurchase a portion of our
existing equity investors' interest in our predecessor, and
for working capital and general corporate purposes.
We will not receive any of the proceeds from the
underwriters' exercise of their over-
allotment option.
Reorganization of Alliance Laundry Holdings
LLC
Bain Capital Fund V, L.P. and its
co-investors, Bruckmann, Rosser, Sherrill & Co., L.P.
and its co-investors, and certain other persons listed in
"Principal Stockholders" are the owners of our
predecessor's equity interests prior to this offering. In
this prospectus, we refer to these owners as the "existing
equity investors." Our existing equity investors will
contribute all of these equity interests to us in exchange
for           IDSs,            shares
of Class B common
stock,            shares
of preferred stock and
$          in
cash in the aggregate. We refer to this contribution as the
reorganization. Following our reorganization our management will
collectively hold an aggregate
of            IDSs,           shares
of Class B common stock
and            shares
of preferred stock.
Our Corporate Information
Our principal executive office is located at
Shepard Street, Ripon, Wisconsin 54971-0990, and our telephone
number is (920) 748-3121. Our internet address is
www.comlaundry.com. www.comlaundry.com is a textual reference
only, meaning that the information contained on the website is
not part of this prospectus and is not incorporated in this
prospectus by reference.
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The Offering
We are
offering                     IDSs
at an assumed initial public offering price of
$           per
IDS, which represents the midpoint of the range set forth on the
cover page of this prospectus. We are also offering
$          aggregate
principal amount of
our      % senior subordinated
notes separately (not in the form of IDSs). Our sale of IDSs
will be conditioned upon the consummation of our separate
offering of senior subordinated notes. In addition, no
purchaser, including our existing equity investors, or any
affiliate of such purchaser, is entitled to purchase both IDSs
and separate senior subordinated notes in the offering. As part
of our reorganization described elsewhere in this prospectus, we
are also issuing IDSs to our existing equity investors in
exchange for the interests they hold in our predecessor.
Summary of the IDSs
What are
IDSs?
IDSs are securities comprised of 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 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,
recombination 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 recombination 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 recombined 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?
Assuming we make our scheduled interest payments
on the senior subordinated notes and pay dividends in the amount
contemplated by our anticipated dividend policy, you will
receive in the aggregate approximately
$           per
year in interest on the senior subordinated notes and dividends
on the Class A common stock represented by each IDS. We
expect to make interest and dividend payments
on           ,           ,           and           of
each year to holders of record on
the           day
of each such month, or, if such day is not a business day, the
last business day immediately preceding such twentieth day, of
the last month of such quarter.
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
specified in the indenture governing the senior subordinated
notes to defer interest payments on our senior subordinated
notes. For a detailed description of these circumstances, see
"Description of Senior Subordinated 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
new credit facility, the indenture governing our senior
subordinated notes and any of our other then outstanding
indebtedness. Specifically, the indenture governing our senior
subordinated notes restricts our ability to declare and pay
dividends on our common stock as described under "Dividend
Policy." In addition, the new credit facility restricts our
ability to declare and pay dividends on our common stock as
described under "Dividend Policy" and
"Description of Certain Indebtedness—New
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Credit Facility." 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 cannot assure you that we will pay dividends at this
level in the future or at all.
Will my rights as a holder of IDSs be any
    different than 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.
Will the IDSs be listed on an
    exchange?
We will apply to list the IDSs for trading on the
American Stock Exchange under the trading symbol
"          ."
Will the terms of the senior subordinated
    notes represented by IDSs be the same as the notes sold
    separately (not in the form of IDSs)?
Yes. The senior subordinated notes sold
separately (not in the form of 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 reasonable efforts to
list our Class A common stock for separate trading on the
American Stock Exchange 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 American Stock
Exchange 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 and the shares of our
    Class A common stock and senior subordinated notes
    represented by the IDSs be issued?
The IDSs and the shares of our Class A
common stock and senior subordinated notes represented by the
IDSs will be issued in book-entry form only. This means that you
will not be a registered holder of IDSs or the securities
represented by the IDSs and you will not receive a certificate
for your IDSs or the securities represented by your IDSs. 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.
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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
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 as a result of the continuance of a
payment default on the senior subordinated notes for
90 days, or the redemption, acceleration or maturity of any
senior subordinated notes. Separation and recombination 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 IDSs will automatically separate upon
the continuance of a payment default on the senior subordinated
notes for 90 days, upon the occurrence of any redemption,
whether in whole or in part, of the senior subordinated notes or
upon the maturity of the senior subordinated notes. 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 and preferred stock, see
"Related Party Transactions—Equity
Investors—Investor Rights Agreement." 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. If such senior subordinated notes are
issued with OID, all IDSs of the same series (including the IDSs
being offered hereby) and all senior subordinated notes, whether
held directly or in the form of IDSs, will be automatically
exchanged for senior subordinated notes or IDSs, respectively,
with new CUSIP numbers. As a result of such exchanges, the OID
associated with the sale of the new senior subordinated notes
effectively will be spread among all holders of senior
subordinated notes on a
pro rata
basis, which may
adversely affect your tax treatment.
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
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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. The value attributed to the shares of Class A common
stock and senior subordinated notes represented by the IDSs have
been established based on the fair market value of such shares
of Class A common stock and senior subordinated notes at
issuance. We will 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 such allocation.
Treatment of Senior Subordinated
Notes.
Based on the opinion of tax
counsel, the senior subordinated notes should be treated as debt
for United States federal income tax purposes and we intend to
deduct interest on such senior subordinated notes for 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. 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. Our tax deduction for
interest may be put at risk in the future as a result of a
future ruling by the IRS, including an adverse ruling for other
IDSs or an adverse ruling for our own IDSs and in the event of
any such ruling, we may need to consider the effect of such
developments on the determination of our future tax provisions
and obligations. 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.
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) 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 with
a new CUSIP number 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 preferred stock, each holder of IDSs or separately held
senior subordinated notes, as the case may be, agrees that a
portion of such holder's senior subordinated notes will be
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. 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 Class A common
stock to form IDSs, or the separation of IDSs, should not affect
your tax treatment.
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. If the
exchange of senior subordinated notes is treated as a taxable
exchange, then your initial tax basis in the senior subordinated
notes deemed to have been received in the
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exchange would be the fair market value of such
senior subordinated notes on the date of the deemed exchange
(adjusted to reflect any disallowed loss), and your holding
period for such senior subordinated notes would begin on the day
after the deemed exchange.
Reporting of
OID.
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. 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.
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 United States 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 comprised of 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 (Income Taxes and IDSs,
Class B common stock and preferred stock)."
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Summary of the Capital Stock
Issuer
Alliance Laundry Holdings Inc.
Common stock
We
    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. Class A common stock, Class B
    common stock and Class C common stock are identical in all
    respects, except that only Class A common stock is eligible
    to be included in IDSs. Furthermore, our bylaws provide that 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.
Preferred stock
We
    have                      shares
    of authorized preferred stock, par value $0.01 per share.
    Following the consummation of the
    offering,            shares
    of preferred stock will be held by our existing equity
    investors. The preferred stock will have preference in
    liquidation over each class of common stock and will accrue
    dividends as described more fully in "Dividend Policy"
    and "Description of Capital Stock— Preferred
    Stock."
Exchange for IDSs
In addition, we will enter into an agreement with
    our existing equity investors that provides that following the
    second anniversary of the consummation of this offering, at the
    option of the holder of such shares of Class B common stock
    together with shares of preferred stock, we will exchange with
    the purchasers of such shares into IDSs at an exchange rate of
    one IDS for one share of Class B common stock
    together with one share of preferred stock, subject to
    compliance with law and applicable agreements and provided that
    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. See
    "Related Party Transactions — Investor Rights
    Agreement."
Shares of Class A common stock represented
    by IDSs being offered to the public:
by Alliance Holdings
shares.
by our existing
    equity      investors
shares
    if the underwriters' over-allotment option is exercised in
    full (which shares shall be offered from the shares of
    Class A common stock represented by IDSs that we are
    issuing to our existing equity investors in this offering).
Shares of Class A common stock represented
    by IDSs being issued to our existing equity investors
shares.
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Shares of common stock to be outstanding
    following the offering
shares
    of Class A common stock
    and                      shares
    of Class B common stock. No shares of Class C common
    stock will be outstanding following the consummation of this
    offering.
Shares of preferred stock to be outstanding
    following the offering
shares.
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 class on all matters presented to the
    stockholders for a vote. The preferred stock will not vote on
    matters generally presented to the stockholders.
Dividends
You will receive dividends on the shares of our
    common stock if and to the extent dividends are declared by our
    board of directors and permitted by applicable law and the terms
    of our then outstanding indebtedness. Specifically, the senior
    subordinated notes indenture and the new credit facility both
    restrict our ability to declare and pay dividends on our common
    stock, as described in detail under "Dividend Policy."
    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 and
    $           per
    share of our Class B common stock. No shares of
    Class C common stock will be outstanding and we do not
    anticipate that we will issue any shares of Class C common
    stock or declare dividends thereon in the near future. Any time
    a dividend is paid to holders of Class A common stock,
    holders of Class B common stock will be paid a dividend
    equal to the amount per share paid to holders of Class A
    common stock. Shares of our preferred stock accrue dividends at
    a rate of
% per
    annum on the deemed issuance price of
    $           per
    share, as more fully described in "Description of Capital
    Stock— Preferred Stock— Dividends." Our board of
    directors may, in its discretion, modify or repeal this dividend
    policy. We cannot assure that we will pay dividends at this
    level or at all in the future.
Dividend payment dates
If declared, dividends on our Class A common
    stock, Class B common stock and preferred stock will be
    paid quarterly on the last day of each fiscal quarter to holders
    of record on the twentieth day, or, if such day is not a
    business day, the business day immediately preceding such
    twentieth day, of the last month of such quarter. To the extent
    not previously paid, the
% dividend that
    accrues on shares of preferred stock will be paid at such time
    when such shares of preferred stock are exchanged for IDSs.
Listing
We will apply to list the IDSs on the American
    Stock Exchange under the trading symbol
    "            ."
    We do not anticipate that our common stock will trade on an
    exchange, and we currently do not expect an active trading
    market for our Class A common stock to develop. However, we
    will use reasonable efforts to list our Class A common
    stock for separate trading on the American Stock Exchange if a
    sufficient number of shares of our Class A common stock are
    held separately to meet the minimum requirements for separate
    trading on
12
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the American Stock Exchange 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.
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Summary of Senior Subordinated Notes
Issuer
Alliance Laundry Holdings Inc.
Senior subordinated notes represented by IDSs
    being offered to the public:
by Alliance Holdings
$      million
    aggregate principal amount
    of      % senior subordinated
    notes.
by our existing
    investors
$           million
    aggregate principal amount of      %
    senior subordinated notes if the underwriters'
    over-allotment option to purchase IDSs is exercised in full
    (which notes shall be offered from the senior subordinated notes
    represented by IDSs that we are issuing to our existing equity
    investors in this offering).
Senior subordinated notes being offered to the
    public separately (not in the form of IDSs)
$           million
    aggregate principal amount
    of      % senior subordinated
    notes.
Senior subordinated notes represented by IDSs
    being issued to our existing equity investors
$           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.
Interest rate
% per year.
Interest payment dates
Interest will be paid quarterly in arrears
    on                     ,                     ,                     ,
    and                     of
    each year,
    commencing                     ,
    2004 to holders of record on
    the                      day
    of each such month, or, if such day is not a business day, the
    last business day immediately preceding
    such                      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. In
    addition,
    after                     ,
    2009, but
    before                     ,
    2014 and during the term of each additional five-year term of
    the senior subordinated notes, if any, we may, subject to
    certain restrictions, defer interest payments on our senior
    subordinated notes on up to two occasions, provided that no more
    than two quarters of interest may be deferred at any one time.
No later
    than                     ,
    2009, we will pay in full all interest deferred prior
    to                     ,
    2009 (together with accrued interest thereon). No later
    than                     ,
    2014 we will pay in full all interest deferred
    after                     ,
    2009 and prior
    to                     ,
    2014 (together with accrued interest thereon), provided that we
    must pay all deferred interest and accrued interest thereon in
    full prior to deferring interest on a second occasion prior
    to                     ,
    2014.
During any interest deferral period and so long
    as any deferred interest or interest on deferred interest
    remains outstanding, we will not be
14
Table of Contents
permitted to make any payment of dividends on the
    capital stock. For a detailed description of interest deferral
    provisions of the indenture, see "Description of Senior
    Subordinated Notes— Interest Deferral."
In the event that interest payments on the senior
    subordinated notes are deferred, you would be required to
    include accrued 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 Considerations."
Maturity date
The senior subordinated notes will mature
    on                     ,
    2014. We may extend the maturity of our senior subordinated
    notes for two additional successive five-year terms if the
    following conditions are satisfied:
•  during
    the twelve month period ending on the last day of the fiscal
    quarter ending at least 45 days before the end of the
    then-current term, our Fixed Charge Coverage Ratio as calculated
    in accordance with the indenture is greater
    than        to 1.0;
•  no
    event of default, including certain events of bankruptcy,
    insolvency or reorganization of us or our subsidiaries, under
    the indenture has occurred and is continuing;
•  no
    event of default has occurred and is continuing with respect to
    any of our other indebtedness having a principal amount of
    $           million
    or more outstanding or would occur as a result of the
    extension; and
•  there
    are no overdue payments of interest on our senior subordinated
    notes or any of our other outstanding indebtedness.
Optional redemption
We may, at our option, redeem the senior
    subordinated notes on the terms set forth in the indenture
    governing the senior subordinated notes. If the senior
    subordinated notes are redeemed in whole or in part, all senior
    subordinated notes and Class A common stock represented by
    each IDS will automatically separate and will no longer be
    combinable into IDSs following such separation. See
    "Description of Senior Subordinated Notes— Optional
    Redemption."
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 fully and
    unconditionally guaranteed, on an unsecured senior subordinated
    basis, by each of our direct and indirect wholly-owned domestic
    subsidiaries existing on the closing of this offering and each
    of our future wholly-owned domestic
15
Table of Contents
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 new credit facility.
Subsequent issuances may affect tax treatment
The indenture governing the senior subordinated
    notes will provide that in the event we issue additional senior
    subordinated notes with a new CUSIP number 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 in connection with the
    issuance by us of additional IDSs, each holder of IDSs or
    separately held senior subordinated notes, as the case may be,
    agrees that a portion of such holder's senior subordinated
    notes, whether held as part of IDSs or separately, will be
    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, 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. Any subsequent issuance of senior subordinated
    notes by us may affect the tax treatment of the IDSs and senior
    subordinated notes. See "Material United States Federal
    Income Tax Consequences— United States Holders— Senior
    Subordinated Notes— Additional Issuances."
Ranking of senior subordinated notes and
    guarantees
Alliance 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,
    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 of the subsidiary
    guarantors under the new credit facility. 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. The senior subordinated notes will also be effectively
    subordinated to any of our and any guarantor's secured
    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 Alliance Holdings and the subsidiary
    guarantors to incur additional
16
Table of Contents
indebtedness, including senior indebtedness,
    subject to specified limitations. On a pro forma basis as of
    December 31, 2003:
•  Alliance
    Holdings would have had no senior or
pari passu
indebtedness outstanding except for its guarantee under the new
    credit facility, as described below; and
•  Alliance
    Holdings would have had
    $           million
    aggregate principal amount of senior secured indebtedness
    outstanding under the new credit facility plus approximately
    $           million
    of letters of credit, which would have been guaranteed on a
    senior secured basis by Alliance Holdings and the subsidiary
    guarantors.
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 and certain redeemable capital 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.
    There will be no restriction in the indenture, however, on our
    ability to incur indebtedness in connection with the issuance of
    additional IDSs so long as the ratio of the aggregate principal
    amount of the additional senior subordinated notes to the number
    of the additional shares of Class A common stock will not
    exceed the equivalent ratio represented by the then existing
    IDSs. In addition, 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.
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Table of Contents
Risk Factors
You should carefully consider the information
under the heading "Risk Factors" and all other
information in this prospectus before investing in the IDSs
(including the shares of our Class A common stock and
senior subordinated notes represented by the IDSs) or in our
senior subordinated notes.
General Information About This
Prospectus
Throughout this prospectus, unless otherwise
noted, we have assumed:
•
that our reorganization will be consummated,
    including the issuance of IDSs to our existing equity investors;
•
no exercise of the underwriters'
    over-allotment option;
•
the purchase of      %
    of our existing senior subordinated notes in the tender offer
    and consent solicitation for aggregate consideration of
    $           million
    and the redemption of the
    remaining      % of our existing senior
    subordinated notes on or
    about                     ,
    2004 for aggregate consideration of
    $           million,
    in each case including accrued and unpaid interest to the tender
    purchase or redemption date, respectively, and the pro forma
    offering numbers give effect to the purchase on tender or
    redemption of 100% of these notes;
•
a      % annual interest
    rate on the senior subordinated notes, which is subject to
    change depending on market conditions prior to the pricing date;
•
an initial public offering price of
    $           per
    IDS, the midpoint of the range set forth on the cover page of
    this prospectus, comprised of
    $
allocated
    to one share of Class A common stock and
    $          allocated
    to the
    $          principal
    amount of senior subordinated notes included in each IDS, which
    equals 100% of the principal amount thereof; and
•
an initial public offering price of the senior
    subordinated notes that are being offered separately (not in the
    form of IDSs), of      % of their
    stated principal amount.
In this prospectus, unless otherwise indicated,
all references to dollars are to U.S. dollars, and all
references to GAAP are to U.S. generally accepted
accounting principles.
Unless the context otherwise requires, references
in this prospectus to the "offering" refer
collectively to the offering of:
•
an aggregate
    of                     IDSs
    to the public; and
•
$          aggregate
    principal amount of senior subordinated notes to the public
    separately (not in the form of IDSs).
Furthermore, unless the context otherwise
requires, references in this prospectus to "senior
subordinated notes" refer to both senior subordinated notes
represented by IDSs and senior subordinated notes issued
separately (not in the form of IDSs).
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Summary Consolidated Financial
Information
The following table sets forth our summary
consolidated financial information derived from our audited
consolidated financial statements as of and for each of the
years ended December 31, 1999 through December 31,
2003, of which the financial statements for 2001, 2002 and 2003
are included elsewhere in this prospectus.
The information in the table below is only a
summary and should be read together with our audited
consolidated financial statements for 2001, 2002, and 2003 and
the related notes, and "Management's Discussion and
Analysis of Financial Condition and Results of Operations,"
all as included elsewhere in this prospectus. The figures in the
table below reflect rounding adjustments.
Year Ended December 31,
1999
2000
2001
2002
2003
(In thousands, except ratios)
Statements of operations data:
Net revenues:
Commercial laundry(1)
$
281,658
$
230,448
$
219,273
$
219,653
$
230,663
Service parts
32,716
34,993
34,743
35,524
36,944
314,374
265,441
254,016
255,177
267,607
Cost of sales
239,482
197,558
188,982
179,047
188,979
Gross profit
74,892
67,883
65,034
76,130
78,628
Selling, general and administrative expenses
32,889
36,469
28,665
30,098
33,566
Securitization and other costs
3,707
402
–
10,920
–
Total operating expenses
36,596
36,871
28,665
41,018
33,566
Operating income
38,296
31,012
36,369
35,112
45,062
Interest expense
31,509
35,947
33,538
28,341
28,258
Loss from early extinguishment of debt
–
–
–
2,004
–
Abandoned Canadian public offering costs
–
–
–
3,409
–
Other income (expense), net
(1,706
)
354
(67
)
33
(830
)
Income (loss) before taxes
5,081
(4,581
)
2,764
1,391
15,974
Provision for income taxes
29
20
34
56
55
Net income (loss) before cumulative effect of
    accounting change
5,052
(4,601
)
2,730
1,335
15,919
Cumulative effect of change in accounting
    principle
–
–
2,043
–
–
Net income (loss)
$
5,052
$
(4,601
)
$
687
$
1,335
$
15,919
Cash flow data:
Net cash provided by operating activities
$
11,662
$
15,290
$
21,338
$
22,775
$
30,393
Net cash used in investing activities
$
(10,208
)
$
(19,557
)
$
(4,964
)
$
(2,563
)
$
(3,590
)
Net cash provided by (used in) financing
    activities
$
(3,265
)
$
6,330
$
(15,806
)
$
(18,532
)
$
(26,205
)
Other financial data:
Maintenance capital expenditures(2)
$
3,575
$
2,578
$
3,617
$
2,652
$
3,600
Ratio of earnings to fixed charges(3)
1.2
–
1.1
1.1
1.6
Adjusted EBITDA(4)
$
56,962
$
55,125
$
53,188
$
59,118
$
58,314
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December 31, 2003
Pro Forma As
Actual
Adjustments
Adjusted(5)
(In thousands)
Balance sheet data(6):
Total current assets
$
60,996
$
$
Total current liabilities
$
42,977
$
$
Working capital(7)
$
18,019
$
$
Total assets
$
190,639
$
$
Long-term debt (including current portion)
$
292,199
$
$
Total liabilities
$
330,397
$
$
Year Ended December 31,
1999
2000
2001
2002
2003
(In thousands)
EBITDA:
Net income (loss)
$
5,052
$
(4,601
)
$
687
$
1,335
$
15,919
Cumulative effect of change in accounting
    principle
–
–
2,043
–
–
Provision for income taxes
29
20
34
56
55
Income (loss) before income taxes
5,081
(4,581
)
2,764
1,391
15,974
Adjustments:
Interest expense
31,509
35,947
33,538
28,341
28,258
Depreciation and amortization(8)
16,969
17,155
17,026
13,293
10,886
Non-cash interest expense included in
    amortization above(9)
(2,562
)
(2,518
)
(2,720
)
(2,507
)
(2,017
)
EBITDA(10)
$
50,997
$
46,003
$
50,608
$
40,518
$
53,101
(1)
For 1999, this includes approximately
    $54.7 million in revenue from home laundry equipment sales
    to Amana Company, L.P.
(2)
Maintenance capital expenditures is defined in
    the indenture as capital expenditures less non-recurring capital
    expenditures as reflected in the chart below for the relevant
    periods.
Year Ended December 31,
1999
2000
2001
2002
2003
(In thousands)
Capital expenditures
$
10,947
$
7,445
$
5,152
$
2,652
$
3,600
Non-recurring capital expenditures
(7,372
)
(4,867
)
(1,535
)
—
—
Maintenance capital expenditures
$
3,575
$
2,578
$
3,617
$
2,652
$
3,600
During 1999 and 2001, we incurred various capital
    expenditures in connection with certain facility rationalization
    efforts related to previously owned facilities in Searcy,
    Arkansas, Madisonville, Kentucky and Cincinnati, Ohio, that were
    considered non-recurring and outside the normal course of our
    manufacturing operations. The non-recurring capital expenditures
    consist of the following:
•
In 1999, $4.9 million and $2.5 million,
    respectively, of expenditures at our Ripon facility related to
    the replication of production capabilities for our standard
    dryer and front load washer product lines. These products were
    produced by a previously owned manufacturing facility in Searcy,
    Arkansas, which was sold in 1997 as part of Raytheon
    Company's divestiture of its Raytheon Appliance Group.
•
In 2000, $3.2 million of expenditures at our
    Ripon facility related to the transfer of production of our
    standard dryer and front load washer product lines from a
    previously owned manufacturing facility in Searcy, Arkansas,
    which began in 1999 (these expenditures included $2.6 million to
    build a new finished goods distribution center in Ripon as the
    prior warehousing space was displaced by the standard dryer,
    front load washer and tumbler dryer production lines);
    $1.1 million of
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expenditures at our Ripon facility related to the
    transfer of production of our tumbler dryer product line from a
    previously owned manufacturing facility in Madisonville,
    Kentucky, which was closed in 1999; $0.5 million of
    expenditures at our Marianna facility related to the transfer of
    production of our Ajax press and finishing equipment product
    lines from a manufacturing site in Cincinnati, Ohio.
•
In 2001, $1.5 million of expenditures
    primarily at our Marianna facility related to the transfer of
    production of our Ajax press and finishing equipment product
    lines from a manufacturing site in Cincinnati, Ohio, which began
    in 2000.
We believe that the identification and separation
    of maintenance and non-recurring capital expenditures are
    important factors in evaluating our financial results.
(3)
For purposes of determining the ratio of earnings
    to fixed charges, earnings are defined as income (loss) before
    income taxes and cumulative effect of change in accounting
    principle plus fixed charges. Fixed charges include interest
    expense on all indebtedness, amortization of deferred financing
    costs and one-third of rental expense on operating leases,
    representing that portion of rental expense deemed to be
    attributable to interest. In 2000, earnings were inadequate to
    cover fixed charges. The dollar amount of earnings required to
    attain a ratio of 1.0 to 1.0 is $4.6 million.
(4)
"Adjusted EBITDA," as defined in the
    indenture governing our senior subordinated notes is determined
    as EBITDA, as adjusted for finance program adjustments, other
    non-recurring charges and the annual management fee paid to
    affiliates of Bain. We present this discussion of Adjusted
    EBITDA because covenants in the indenture governing our senior
    subordinated notes contain ratios based on this measure. For
    example, our ability to incur additional debt requires a ratio
    of Adjusted EBITDA to fixed charges
    of         to 1.0,
    subject to certain exceptions, including our ability to incur an
    unlimited amount of indebtedness in connection with the issuance
    of additional IDSs so long as the ratio of the aggregate
    principal amount of the additional senior subordinated notes to
    the number of the additional shares of our common stock will not
    exceed the equivalent ratio represented by the then existing
    IDSs.
On a historical basis, we made the following
    adjustments to EBITDA to compute Adjusted EBITDA:
Year Ended December 31,
1999
2000
2001
2002
2003
(In thousands, except ratios)
EBITDA
$
50,997
$
46,003
$
50,608
$
40,518
$
53,101
Adjustments:
Finance program adjustments(a)
(1,313
)
2,650
151
1,019
3,396
Other non-recurring charges, as defined in the
    indenture(b)
6,269
5,453
1,414
16,548
797
Management fees paid to affiliates of Bain
1,009
1,019
1,015
1,033
1,020
Adjusted EBITDA
$
56,962
$
55,125
$
53,188
$
59,118
$
58,314
Ratio of Adjusted EBITDA to fixed charges(c)
2.0
1.6
1.7
2.3
2.2
(a)
We currently operate an off-balance sheet
    commercial equipment finance program in which newly originated
    equipment loans are sold to qualified special-purpose bankruptcy
    remote entities. In accordance with GAAP, we are required to
    record gains/losses on the sale of these equipment based
    promissory notes. In calculating Adjusted EBITDA, management
    determines the cash impact of net interest income on these
    notes. The finance program adjustments are the difference
    between GAAP basis revenues (as prescribed by Statement of
    Financial Accounting Standards No. 125/140, or
    SFAS No. 125/140) and cash basis revenues.
(b)
Historically other non-recurring charges included
    infrequently occurring items, plant relocation costs included in
    administrative expenses and lawsuit settlement expenses.
For a more detailed explanation of the
    adjustments of EBITDA to calculate Adjusted EBITDA, see Footnote
    4 to "Selected Historical Financial and Operating Data
    Information."
(c)
For purposes of calculating the ratio of Adjusted
    EBITDA to fixed charges (as defined in the indenture), fixed
    charges includes interest expense (excluding amortization of
    deferred financing fees) plus capitalized interest and cash
    dividends on preferred stock. On a pro forma basis, for the year
    ended December 31, 2003, our ratio of Adjusted EBITDA to
    fixed charges under the indenture would have been
to 1.0.
(5)
The pro forma as adjusted balance sheet data have
    been prepared assuming the closing of this offering, the tender
    or purchase on redemption of 100% of our existing senior
    subordinated notes and completion of the bank refinancing,
    including payment of related fees and expenses. The pro forma as
    adjusted balance sheet data give effect to those transactions as
    if they had occurred on December 31, 2003.
(6)
As described in "Risk Factors" and
    further described in "Material U.S. Federal Income Tax
    Consequences," we plan to account for the issuance of the
    IDSs as representing shares of common stock and senior
    subordinated notes. We will deduct as interest expense the
    interest on the senior subordinated notes from taxable income
    for income tax purposes and report the full
21
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benefit of the income tax deduction in our
    consolidated financial statements. We cannot assure you that the
    Internal Revenue Service will not seek to challenge the
    treatment of these senior subordinated notes as debt and the
    amount or timing of interest expense deducted. If the Internal
    Revenue Service were to challenge this treatment successfully,
    we would have to pay additional income taxes and record an
    additional liability for the previously recorded benefit for the
    interest deductions.
(7)
Working capital represents total current assets
    less total current liabilities.
(8)
Amortization expense for 2001, 2000 and 1999
    includes goodwill amortization of $2.0 million,
    $2.0 million and $1.5 million, respectively. In
    accordance with SFAS No. 142, "Goodwill and Other
    Intangible Assets," we discontinued amortization of the
    goodwill balance as of December 31, 2001.
(9)
Depreciation and amortization amounts include
    amortization of deferred financing costs included in interest
    expense.
(10)
EBITDA represents net income from continuing
    operations before interest expense, income tax provision
    (benefit) and depreciation and amortization. EBITDA is not a
    measure of operating income, operating performance or liquidity
    under GAAP. We include EBITDA because we understand it is used
    by some investors to determine a company's historical
    ability to service indebtedness and fund ongoing capital
    expenditures, and because certain covenants in our borrowing
    agreements are tied to similar measures. Nevertheless, this
    measure should not be considered in isolation or as a substitute
    for operating income (as determined in accordance with GAAP) as
    an indicator of our operating performance, or of cash flows from
    operating activities (as determined in accordance with GAAP), or
    as a measure of liquidity. Set forth below is a reconciliation
    of EBITDA to our cash flow from operating activities for the
    periods indicated.
Year Ended
December 31,
1999
2000
2001
2002
2003
(In thousands)
Cash flows from operating activities
$
11,662
$
15,290
$
21,338
$
22,775
$
30,393
Interest expense, net of non-cash interest
27,023
31,134
27,155
20,959
20,951
Net change in operating assets and liabilities
14,753
(393
)
2,148
(1,301
)
1,735
Income tax provision
29
20
34
56
55
Loss from early extinguishment of debt
—
—
—
(2,004
)
—
Other(A)
(2,470
)
(48
)
(67
)
33
(33
)
EBITDA
$
50,997
$
46,003
$
50,608
$
40,518
$
53,101
(A)
In 1999, we recorded a $2.3 million
    restructuring charge associated with the closing of our
    Madisonville, Kentucky manufacturing facility. The charge
    includes $1.7 million in employee termination and severance
    benefit charges, $0.5 million for the estimated loss on
    fixed assets which were held for disposal, and $0.1 million
    in miscellaneous costs. In 2000, we recorded an additional
    $0.4 million restructuring charge due to additional medical
    benefits provided as part of the employee terminations.
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Interest and Dividend Payments to IDS
Holders
The table below is intended to provide certain
information relating to our available funds and our interest and
dividend payments to IDS holders for the year ended
December 31, 2003, on a pro forma basis to give effect to
this offering, including the use of proceeds from this offering,
our reorganization, the consent solicitation and tender offer,
and to give effect to our new credit facility.
Adjusted EBITDA, available funds before dividend
payments on common shares and remaining funds are not indicators
of performance or other measures in accordance with GAAP. We
present these non-GAAP financial measures in this prospectus
because we believe they are indicators of our ability to declare
and pay dividends on Class A common stock and Class B
common stock pursuant to our indenture governing the senior
subordinated notes. Adjusted EBITDA is described under
"Summary Consolidated Financial Information."
The information in the table below assumes that
these transactions occurred on January 1, 2003.
Pro Forma
Year Ended
December 31,
2003
(In thousands)
Adjusted EBITDA (actual)
$
58,314
Deductions:
Capital expenditures(1)
3,600
Interest expense on new credit facility(2)
Interest expense on senior subordinated notes(3)
Dividends on shares of preferred stock
State and federal income tax expense(4)
Estimated additional public company
    administrative expense(5)
Available funds before dividend payments on
    common shares
Dividends on shares of Class A common stock
Dividends on shares of Class B common stock
Remaining funds
$
(1)
Represents our capital expenditures for the year
    ended December 31, 2003. We estimate that we will have
    capital expenditure requirements of approximately
    $         million
    in each of 2004 and 2005.
(2)
Assumes interest at current rates, estimated
    as         % average
    interest, on
    $         million
    outstanding borrowings under the new term loan and
    a         % commitment
    fee on the average unused balance
    of                  million
    under the new revolver.
(3)
Assumes         %
    interest on
    $        million of
    senior subordinated notes represented by the IDSs and
    $         million
    of senior subordinated notes issued separately (not in the form
    of IDSs).
(4)
Represents our income tax expense for the year
    ended December 31, 2003. This does not reflect the impact
    of our reorganization and we expect that our income tax expense
    will be $    in 2004.
(5)
Consists of estimated incremental accounting and
    audit fees, director and officer liability insurance, expenses
    relating to the annual stockholders meeting, printing expenses,
    investor relations expenses, additional filing fees, additional
    trustee fees, registrar and transfer agent expenses, directors
    fees, additional legal fees, listing fees and miscellaneous fees.
Dividend payments are discretionary. See
"Dividend Policy and Restrictions."
We estimate that we will have capital expenditure
requirements of approximately
$           million
in each of 2004 and 2005. Interest payments on the senior
subordinated notes may be deferred on one or more occasions for
up to eight quarters in the aggregate prior
to           ,
2009 and may be deferred at our option on two occasions for
not more than two quarters
between           ,
2009
and           ,
2014.
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Based on the foregoing, aggregate payments to IDS
holders and holders of separate senior subordinated notes for
the year ended December 31, 2003, would have been as
follows:
Aggregate
Per IDS
Per Note
(In thousands)
Interest on senior subordinated notes
$
$
$
Dividends on shares of Class A common stock
    represented by IDSs
Total
$
$
$
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Table of Contents
Risk Factors
Before you invest in the IDSs (including the
shares of our
Class A
common
stock and our senior subordinated notes represented by the IDSs)
or the senior subordinated notes, you should carefully consider
the various risks of the investment, including those described
below, together with all of the other information included in
this prospectus. If any of these risks actually occur, our
business, financial condition or operating results could be
adversely affected. In that case, the trading price of the IDSs
and the senior subordinated notes could decline and you could
lose all or part of your investment.
Risks Relating to the IDSs, the Shares of
Class A Common Stock and Senior Subordinated Notes
Represented by the IDSs, the Senior Subordinated Notes Offered
Separately (not in the form of IDSs), and our New Credit
Facility
We have substantial indebtedness that could
restrict our ability to pay interest and principal on the senior
subordinated notes and to pay dividends with respect to shares
of our Class A common stock represented by the IDSs and
impact our financing options and liquidity position.
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
our indebtedness, including the new credit facility which we
guarantee on a senior secured basis. The degree to which we are
leveraged on a consolidated basis could have important
consequences to the holders of the IDSs and of separate senior
subordinated notes (not in the form of IDSs), including:
•
our ability to obtain additional financing in the
    future for working capital, capital expenditures or acquisitions
    may be limited;
•
we may be unable to refinance our indebtedness on
    terms acceptable to us or at all;
•
a significant portion of our cash flow from
    operations is likely to be dedicated to the payment of the
    principal of and interest on our indebtedness, thereby reducing
    funds available for other corporate purposes; and
•
our substantial indebtedness may make us more
    vulnerable to economic downturns and limit our ability to
    withstand competitive pressures.
Although our new credit facility will contain
total leverage, senior leverage and cash interest coverage
maintenance covenants that will restrict our ability to incur
debt as described under "Description of Certain
Indebtedness—New Credit Facility," the indenture
governing the senior subordinated notes allows us to issue an
unlimited amount of senior subordinated notes so long as we
issue additional shares of Class A common stock in the
appropriate proportionate amounts to represent additional IDSs.
We may amend the terms of our new credit
facility, or we may enter into new agreements that govern our
senior indebtedness and the amended or new terms may
significantly affect our ability to pay interest on our senior
subordinated notes and dividends on shares of our common
stock.
Our new credit facility contains significant
restrictions on our ability to pay interest on the senior
subordinated notes and dividends on shares of common stock based
on us meeting certain performance measures and compliance with
other conditions. As a result of general economic conditions,
conditions in the lending markets, the results of our business
or for any other reason, we may elect or be required to amend or
refinance our new credit facility, at or prior to maturity, or
enter into additional agreements for senior indebtedness.
Regardless of any protection you have in the indenture governing
the senior subordinated notes, any such amendment, refinancing
or additional indebtedness may contain covenants that could
limit, in a significant manner, our ability to make interest
payments and pay dividends to you.
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Table of Contents
We are subject to restrictive debt covenants
that limit our business flexibility by imposing operating and
financial restrictions on our operations.
The agreements governing our indebtedness impose
significant operating and financial restrictions on us. These
restrictions prohibit or limit, among other things:
•
the incurrence of additional indebtedness and the
    issuance of preferred stock and certain redeemable 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;
•
consolidations, mergers and transfers of all or
    substantially all of our assets; and
•
our ability to change the nature of our business.
The terms of the new credit facility include
other and more restrictive covenants and prohibit us from
prepaying our other indebtedness, including the senior
subordinated notes, while indebtedness under the new credit
facility is outstanding. The new credit facility also requires
us to maintain certain specified financial ratios and satisfy
financial condition tests. Our ability to comply with the ratios
or tests may be affected by events beyond our control, including
prevailing economic, financial and industry conditions.
A breach of any of these covenants, ratios or
tests could result in a default under the new credit facility
and/or the indenture. Events of default under the new credit
facility would prohibit us from making payments on the senior
subordinated notes in cash, including payment of interest when
due. In addition, upon the occurrence of an event of default
under the new credit facility, the lenders could elect to
declare all amounts outstanding under the new credit facility,
together with accrued interest, to be immediately due and
payable. If we were unable to repay those amounts, the lenders
could proceed against the security granted to them to secure
that indebtedness. If the lenders accelerate the payment of the
indebtedness, our assets may not be sufficient to repay in full
this indebtedness and our other indebtedness, including the
senior subordinated notes.
We are a holding company and rely on dividends
and other payments, advances and transfers of funds from our
subsidiaries to meet our debt service and other
obligations.
We are a holding company and conduct all of our
operations through our subsidiaries. We currently have no
significant assets other than equity interests in Alliance
Laundry, all of which will be pledged to the creditors under the
new credit facility which we guarantee. As a result, we will
rely on dividends and other payments or distributions from our
subsidiaries to meet our debt service obligations and enable us
to pay dividends. The ability of our subsidiaries to pay
dividends or make other payments or distributions to us will
depend on their respective operating results and may be
restricted by, among other things, the laws of their
jurisdiction of organization (which may limit the amount of
funds available for the payment of dividends), agreements of
those subsidiaries, the terms of the new credit facility and the
covenants of any future outstanding indebtedness we or our
subsidiaries incur.
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 but
before                     ,
2014 and during the term of each additional five-year term of
the senior subordinated notes, if any, we may, subject to
certain restrictions, defer interest payments on our senior
subordinated notes for up to two quarters. 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 date. For
any interest deferred
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Table of Contents
after                     ,
2009, we are not obligated to pay all of the deferred interest
until           so
you may be owed a substantial amount of deferred interest that
will not be due and payable until such date.
You may not receive the level of dividends
provided for in the dividend policy 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 indenture governing our senior subordinated notes
and the new credit facility contain significant restrictions on
our ability to make dividend payments, including, if we defer
interest on the senior subordinated notes under the indenture,
restrictions on the payment of dividends until we have paid all
deferred interest.
In addition, our after-tax cash flow available
for dividend and interest payments would be reduced if the
senior subordinated notes were treated as equity rather than
debt for United States federal income tax purposes. In that
event, 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. Our inability to deduct
interest on the senior subordinated notes could materially
increase our taxable income and, thus, our United States federal
and applicable state income tax liability.
You will be immediately diluted by
$           per
share of Class A 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 Class A common stock represented by the IDSs which
exceeds the entire price allocated to each share of Class A
common stock represented by the IDSs in this offering because
there will be a net tangible book deficit for each share of
Class A common stock outstanding immediately after this
offering. Our net tangible book value as of December 31,
2003, after giving effect to this offering, was approximately
$           million,
or
$           per
share of Class A common stock.
Our interest expense may increase
significantly and could cause our net income and distributable
cash to decline significantly.
The new credit facility will be subject to
periodic renewal or must otherwise be refinanced. We may not be
able to renew or refinance the new credit facility, or if
renewed or refinanced, the renewal or refinancing may occur on
less favorable terms. Borrowings under the revolving facility
will be made at a floating rate of interest. In the event of an
increase in the base reference interest rates, our interest
expense will increase and could have a material adverse effect
on our ability to make cash dividend payments to our
shareholders. Our ability to continue to expand our business
will, to a large extent, be dependent upon our ability to borrow
funds under our new credit facility and to obtain other third
party financing, including through the sale of IDSs or other
securities. We cannot assure you that such financing will be
available to us on favorable terms or at all.
We may not generate sufficient funds from
operations to pay our indebtedness at maturity or upon the
exercise by holders of their rights upon a change of
control.
A significant portion of our cash flow from
operations will be dedicated to servicing our debt requirements.
In addition, we currently expect to distribute a significant
portion of any remaining cash earnings to our stockholders in
the form of quarterly dividends. Moreover, prior to the maturity
of our senior subordinated notes, we will not be required to
make any payments of principal on our senior subordinated notes.
We may not generate sufficient funds from operations to repay
the principal amount of our indebtedness at maturity or in case
you exercise your right to require us to purchase your notes
upon a change of control. We may therefore need to refinance our
debt or raise additional capital. These alternatives may not be
27
Table of Contents
available to us when needed or on satisfactory
terms due to prevailing market conditions, a decline in our
business or restrictions contained in our senior debt
obligations.
The indenture governing our senior
subordinated notes and our new credit facility permit us to pay
a significant portion of our cash flow to stockholders in the
form of dividends.
Although the indenture governing our senior
subordinated notes and our new credit facility have some
limitations on our payment of dividends, they permit us to pay a
significant portion of our cash flow to stockholders in the form
of dividends. Following completion of this offering, we intend
to pay quarterly dividends. Specifically, the indenture
governing our senior subordinated notes permits us to pay up to
the quarterly base dividend level in any fiscal quarter, which
equals      % of our excess cash (which
is Adjusted EBITDA, as defined in the indenture, minus the sum
of cash interest expense, cash income tax expense and
maintenance capital expenditures) for the 12 fiscal month period
divided by four, as more fully described in "Description of
Senior Subordinated Notes—Certain Covenants." In
addition, if the actual dividends paid in any fiscal quarter are
less than the quarterly base dividend level, the indenture
permits us to use the difference between the aggregate amounts
of dividends actually paid and the quarterly base dividend level
for such quarter for the payment of dividends at a later date.
The new credit facility permits us to use up
to      % of the distributable cash, as
defined in the new credit facility plus certain other amounts
under certain limited circumstances to fund dividends on our
shares of common stock. 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.
Because we will use a significant portion of
the proceeds of this offering to purchase equity interests in
our subsidiaries from our existing equity investors, we will
have only the remaining portion of the proceeds of this offering
to repay our existing debt and for corporate purposes and will
have to incur more debt.
We will use a significant portion of the net
proceeds from this offering to purchase equity interests in our
subsidiaries from our existing equity investors as part of our
reorganization. Therefore, we will not have these funds
available to us (1) to repay our existing debt, and will
therefore have to borrow more under our new credit facility to
repay the existing credit facility than we would have had we not
undertaken these purchases, or (2) to fund our operations
or to continue to expand our business.
The realizable value of our assets upon
liquidation may be insufficient to satisfy claims.
At December 31, 2003, our assets included
intangible assets in the amount of $55.4 million,
representing approximately 29% of our total consolidated assets
and consisting primarily of the excess of the acquisition cost
over the fair market value of the net assets acquired in
purchase transactions. The value of these intangible assets will
continue to depend significantly upon the success of our
business as a going concern and the growth in cash flows. As a
result, in the event of a default under our new credit facility
or 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.
Deferral of interest payments would have
adverse tax consequences for you and may adversely affect the
trading price of the senior subordinated notes.
If we defer interest payments on the senior
subordinated notes, you will be required to recognize interest
income for United States federal income tax purposes in respect
of the senior subordinated notes before you receive any cash
payment of this interest. In addition, we will not pay you this
cash if you sell the IDSs or the 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.
The IDSs or the 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 if
we defer interest payments. In addition, the requirement that we
defer payments of interest on the senior subordinated notes
under certain circumstances may mean that the market price for
the IDSs or the senior subordinated notes may be more volatile
than other securities that do not have this requirement.
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Table of Contents
Because of the subordinated nature of the
senior subordinated notes, holders of our senior subordinated
notes may not be entitled to be paid in full, if at all, in a
bankruptcy, liquidation or reorganization or similar
proceeding.
As a result of the subordinated nature of our
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 us or the subsidiary guarantors or our or their
property, the holders of our 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 our senior subordinated notes or the subsidiary guarantees.
In the event of a bankruptcy, liquidation or
reorganization or similar proceeding relating to us or the
subsidiary guarantors, holders of our senior subordinated notes
will participate with all other holders of unsecured
indebtedness of ours or the subsidiary guarantors that are
similarly subordinated in the assets remaining after we and the
subsidiary guarantors have paid all senior indebtedness. In any
of these cases, we and the subsidiary guarantors may not have
sufficient funds to pay all of our creditors. Holders of our
senior subordinated notes may, therefore, receive less, ratably,
than the holders of our senior indebtedness.
On a pro forma basis as of December 31,
2003, our senior subordinated notes and the subsidiary
guarantees would have ranked junior, on a consolidated basis, to
$           million
of outstanding senior secured indebtedness plus approximately
$           million
of letters of credit and the subsidiary guarantees would have
ranked junior to no senior unsecured debt and
pari passu
with approximately
$           million
of outstanding indebtedness of ours and the subsidiary
guarantors. In addition, as of December 31, 2003, on a pro
forma basis, we would have had the ability to borrow up to an
additional amount of
$           million
under the new credit facility (less amounts reserved for letters
of credit), which would have ranked senior in right of payment
to our senior subordinated notes. If any of the
$110.0 million in our existing senior subordinated notes
are not tendered to us by the closing of this offering, such
notes will rank
pari passu
to our senior
subordinated notes and the subsidiary guarantees until such time
as we redeem such notes.
In the event of a bankruptcy, liquidation or
reorganization or similar proceeding of any of the non-guarantor
subsidiaries, holders of their indebtedness, including their
trade creditors, would generally be entitled to payment of their
claims from the assets of those subsidiaries before any assets
are made available for distribution to us for payment to you.
Holders of our senior subordinated notes will be
structurally subordinated to the debt of our non-guarantor
subsidiaries.
In the event of bankruptcy or insolvency, the
senior subordinated notes could be equitably subordinated or
recharacterized as equity.
In the event of bankruptcy or insolvency, a party
in interest may seek to subordinate the senior subordinated
notes under principles of equitable subordination or to
recharacterize the senior subordinated notes as equity. While we
believe that any such attempt should fail, there can be no
assurance as to the outcome of such proceedings. In the event a
court subordinates the senior subordinated notes or
recharacterizes them as equity, we cannot assure you that you
would recover any amounts owed on the senior subordinated notes
and you may be required to return any payments made to you on
account of the senior subordinated notes, potentially for up to
six years prior to our bankruptcy. In addition, should the court
recharacterize the senior subordinated notes as equity you may
not be able to enforce the guaranties.
The guarantees of the senior subordinated
notes by our subsidiaries may be unenforceable.
Under federal bankruptcy law and comparable
provisions of state fraudulent transfer laws, a guarantee could
be voided, or claims in respect of a guarantee could be
subordinated to all other debt of the guarantor, if, among other
things, the guarantor, at the time that it assumed the guarantee:
•
issued the guarantee to delay, hinder or defraud
    present or future creditors;
•
received less than reasonably equivalent value or
    fair consideration for issuing the guarantee and, at the time it
    issued the guarantee;
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Table of Contents
•
was insolvent or rendered insolvent by reason of
    issuing the guarantee and the application of the proceeds of the
    guarantee;
•
was engaged or about to engage in a business or a
    transaction for which the guarantor's remaining assets
    available to carry on its business constituted unreasonably
    small capital;
•
intended to incur, or believed that it would
    incur, debts beyond its ability to pay the debts as they
    mature; or
•
was a defendant in an action for money damages,
    or had a judgment for money damages docketed against it if, in
    either case, after final judgment, the judgment is unsatisfied.
In addition, any payment by the guarantor under
its guarantee could be voided and required to be returned to the
guarantor or to a fund for the benefit of the creditors of the
guarantor or the guarantee could be subordinated to other debt
of the guarantor.
What constitutes insolvency for the purposes of
fraudulent transfer laws varies depending upon the law applied
in any proceeding to determine if a fraudulent transfer has
occurred. Generally, however, a person would be considered
insolvent if, at the time such person incurred the debt:
•
the sum of its debts, including contingent
    liabilities, was greater than the fair saleable value 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.
We believe that immediately after the issuance of
the senior subordinated notes and the guarantees, we and each of
the guarantors will be solvent, have sufficient capital to carry
on our respective businesses and be able to pay our respective
debts as they mature. We cannot be sure, however, as to what
standard a court would apply in making these determinations or
that a court would reach the same conclusions with regard to
these issues. Regardless of the standard that the court uses, we
cannot be sure that the issuance by the subsidiary guarantors of
the subsidiary guarantees would not be voided or the subsidiary
guarantees would not be subordinated to their other debt.
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 Alliance
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
holders of the senior subordinated notes. If the guarantee of
any subsidiary guarantor were voided, our senior subordinated
notes would be effectively subordinated to the indebtedness and
other credit obligations of that subsidiary guarantor.
The United States federal income tax
consequences of the purchase, ownership and disposition of IDSs
and senior subordinated notes are uncertain.
No statutory, judicial or administrative
authority directly addresses the treatment of the IDSs or the
senior subordinated notes, or instruments similar to the IDSs or
the senior subordinated notes, for United States federal income
tax purposes. As a result, the United States federal income tax
consequences of the purchase, ownership and disposition of IDSs
and the senior subordinated notes are uncertain. Based on the
opinion of tax counsel, we believe that an IDS should be treated
as a unit representing a share of common stock and senior
subordinated notes, and that the senior subordinated notes
should be classified as debt for United States federal income
tax purposes and we intend to deduct interest on such senior
subordinated notes for tax purposes. However, the IRS or the
courts may take the position that the IDSs are a single security
classified as equity, or that the senior subordinated notes are
properly classified as equity for United States federal income
tax purposes, which could adversely affect the amount, timing
and character
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of income, gain or loss in respect of your
investment in IDSs or senior subordinated notes, and materially
increase our taxable income and, thus, our United States federal
and applicable state income tax liability. 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 notes and the common stock and may
affect our ability to continue as a going concern. Our tax
deduction for interest may be put at risk in the future as a
result of a future ruling by the IRS, including an adverse
ruling for other IDSs or an adverse ruling for our own IDSs and
in the event of any such ruling, we may need to consider the
effect of such developments on the determination of our future
tax provisions and obligations. Foreign holders could be subject
to withholding or estate taxes with regard to the senior
subordinated notes in the same manner as they will be with
regard to the common stock. Payments to foreign holders would
not be grossed-up for any such taxes. For discussion of these
tax-related risks, see "Material United States Federal
Income Tax Consequences."
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 common stock and senior
subordinated notes comprising the IDS in proportion to their
respective fair market values at the time of purchase. If our
allocation is not respected, then it is possible that the senior
subordinated notes will be treated as having been issued with
original issue discount, or 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 be required 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.
The IRS may not view the interest rate on the
senior subordinated notes as an arm's length
rate.
We plan to deduct the interest expense on the
senior subordinated notes from taxable income for income tax
purposes and to report the full benefit of the income tax
deductions in our consolidated financial statements. If the IRS
were to determine that the interest rate on the senior
subordinated notes did not represent an arm's length rate,
then any excess of the amount paid on the senior subordinated
notes over the arm's length rate would not be deductible
and could be recharacterized as a dividend payment instead of an
interest payment. In addition, the reclassification of interest
payments as dividend payments may give rise to an event of
default under our new credit facility. In such case, our taxable
income and thus, our United States federal income tax liability
could be materially increased and we would have to provide an
additional liability in our consolidated financial statements
for the previously recorded benefit for the interest deductions.
In addition, foreign holders could be subject to withholding
taxes with regard recharacterized amounts in the same manner as
they will be with regard to dividends paid on the common stock.
If the interest rate on the senior subordinated notes were
determined to be less than an arm's length rate, the senior
subordinated notes could be treated as issued with OID, which
you would be required to include in income over the term of the
senior subordinated notes in advance of the receipt of cash
attributable to that income.
Because of the deferral of interest
provisions, the senior subordinated notes may be treated as
issued with OID.
Under applicable Treasury regulations, a
"remote" contingency that stated interest will not be
timely paid is disregarded in determining whether a debt
instrument is issued with OID. Although there is no authority
directly on point, based on our financial forecasts, we believe
that the likelihood of deferral of interest payments on the
senior subordinated notes is remote within the meaning of the
Treasury regulations. Based on the foregoing, although the
matter is not free from doubt because of the lack of direct
authority, the senior subordinated notes should not be
considered to be issued with OID at the time of their original
issuance. 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.
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If we subsequently issue senior subordinated
notes with significant OID, we may be unable to deduct all of
the interest on those senior subordinated notes.
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 treated, a portion of the OID on such notes would
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
shareholders.
Subsequent issuances of senior subordinated
notes may cause you to recognize taxable gain and/or OID and may
reduce your recovery in the event of bankruptcy.
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) are unclear. In the future, we may issue senior
subordinated notes underlying IDSs in exchange for shares of our
preferred stock. The indenture governing the senior subordinated
notes and the agreements with DTC will provide that, in the
event that there is a subsequent issuance of senior subordinated
notes having terms substantially identical to the senior
subordinated notes offered hereby, each holder of senior
subordinated notes or IDSs, as the case may be, agrees that 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.
The aggregate stated principal amount of senior
subordinated notes owned by you and each other holder will not
change as a result of such subsequent issuance and exchange.
However, under applicable law, it is possible that the holders
of subsequently issued senior subordinated notes (to the extent
issued with OID) will not be entitled to a claim for the portion
of their principal amount that represents unaccrued OID in the
event of an acceleration of the senior subordinated notes or a
bankruptcy proceeding occurring prior to the maturity of the
senior subordinated notes. 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 United States 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 United
States 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. In such case, you would recognize
any gain realized on the exchange, but a loss realized might be
disallowed in which case your basis in the subsequently issued
senior subordinated notes would be increased to reflect the
amount of the disallowed loss.
Regardless of whether the exchange is treated as
a taxable event, such exchange may result in an increase in the
amount of OID, if any, that you are required to accrue with
respect to 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 senior
subordinated notes or IDSs, as the case may be, agree to report
OID in a manner consistent with this approach. Consequently, you
may be required to report OID as a result of a subsequent
issuance (even though you purchased senior subordinated notes
having no OID). This will generally result in you reporting more
interest income over the term of the senior subordinated notes
than you would have reported had no such subsequent issuance and
exchange occurred. 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 case, the IRS might further assert that,
unless a holder can establish that it is
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not such a person (or a transferee thereof), all
of the senior subordinated notes held by such holder will 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.
Before this offering, there has not been a
public market for our IDSs, shares of our Class A common
stock or senior subordinated notes. The price of the IDSs may
fluctuate substantially, which could negatively affect
IDS holders.
None of the IDSs, the shares of our Class A
common stock or the senior subordinated notes has a public
market history. In addition, there has not been an established
market in the United States for securities similar to the IDSs.
We cannot assure you that an active trading market for the IDSs
will develop in the future, and we currently do not expect that
an active trading market for the shares of our Class A
common stock will develop until the senior subordinated notes
are redeemed or mature. 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
Class A common stock. We do not intend to list our senior
subordinated notes on any securities exchange.
The initial public offering price of the IDSs has
been determined by negotiations among us, the existing equity
investors and the representatives of the underwriters and may
not be indicative of the market price of the IDSs after the
offering. Factors such as quarterly variations in our financial
results, 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 to fluctuate significantly.
Future sales or the possibility of future
sales of a substantial amount of IDSs, shares of our common
stock or our senior subordinated notes may depress the price of
the IDSs and the shares of our common stock and our 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 our senior subordinated notes in
the public market could adversely affect the prevailing market
price of the IDSs and the shares of our common stock and senior
subordinated notes and could impair our ability to raise capital
through future sales of our securities.
We may issue shares of our common stock and
senior subordinated notes, which may 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.
Risks Relating to our Business and the
Industry
Energy efficiency and water usage standards
could adversely affect our industry.
Certain of our washer products are subject to
federal and state laws and regulations which pertain to energy
efficiency and/or water usage. There is a federal standard for
residential clothes washers. Individual U.S. states are
currently considering, and enacting, laws and corresponding
standards which endeavor to regulate energy efficiency for
certain of our commercial washers, as well as water usage
standards for certain of our residential and commercial washers.
There can be no assurance that if these, and
anticipated energy efficiency and water usage laws and
corresponding standards create short term market conditions
which are economically disadvantageous, they will not have a
material adverse effect on our business, financial condition and
results of operations.
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Price fluctuations or shortages of raw
materials and the possible loss of suppliers could adversely
affect our operations.
The major raw materials and components we
purchase for our production process are motors, stainless and
carbon steel, aluminum castings, electronic controls, corrugated
boxes and plastics. The price and availability of these raw
materials and components are subject to market conditions
affecting supply and demand. There can be no assurance that
increases in raw material or component costs (to the extent we
are unable to pass on such higher costs to customers) or future
price fluctuations in raw materials will not have a material
adverse effect on our business, financial condition and results
of operations. In addition, there can be no assurance that the
loss of suppliers or of components would not have a material
adverse effect on our business, financial condition and results
of operations. We currently do not hedge commodities associated
with payments for purchased raw materials and components.
Our net revenues depend on a limited number of
significant customers.
Our top ten equipment customers accounted for
approximately 35.8% of our 2003 net revenues, of which one
customer, Coinmach Corporation and its subsidiary, Super Laundry
Equipment Corp., accounted for approximately 15.8% of such net
revenues for the period. Many arrangements are by purchase order
and are terminable at will at the option of either party. Our
business also depends upon the financial viability of our
customers. A significant decrease or interruption in business
from our significant customers could result in loss of future
business and could have a material adverse effect on our
business, financial condition and results of operations.
Our inability to fund our financing programs
to end-customers could result in the loss of sales and adversely
affect our operations.
We offer an extensive financing program to
end-customers, primarily laundromat owners, to assist them in
their purchases of new equipment from our distributors or, in
the case of route operators, from us. Typical terms include two
to nine year loans with an average principal amount of
approximately $75,000. We provide these financing programs
through our asset backed facility, which is a three year
$300.0 million revolving facility entered into by Alliance
Laundry Equipment Receivables Trust 2002-A, a trust formed by
one of our special purpose bankruptcy remote subsidiaries, and
backed by equipment loans and trade receivables originated by
us. The trust is utilized to finance both equipment loans and
trade receivables. If certain limits in size of the asset backed
facility are reached (either overall size or certain sublimits),
additional indebtedness may be required to fund the financing
programs. Our inability to incur such indebtedness to fund the
financing programs or our inability to securitize such assets
through off-balance sheet bankruptcy remote subsidiaries could
limit our ability to provide our end-customers with financing
which could result in the loss of sales and have a material
adverse effect on our business, financial condition and results
of operations. In addition, a significant increase in the cost
of funding our financing subsidiaries could have a material
adverse effect on our business, financial condition and results
of operations.
We operate in a competitive market.
Within the North American stand alone commercial
laundry equipment industry, we compete with several large
competitors. With respect to laundromats, our principal
competitors include Wascomat (the exclusive North American
distributor of Electrolux AB products), Maytag Corporation
and The Dexter Company. In multi-housing, key competitors
include Maytag Corporation and Whirlpool Corporation. In
on-premise laundry, we compete primarily with Pellerin Milnor
Corporation, American Dryer Corporation and Wascomat. There can
be no assurance that significant new competitors or increased
competition from existing competitors will not have a material
adverse effect on our business, financial condition and results
of operations. Certain of our principal competitors have greater
financial resources and/or are less leveraged than us and may be
better able to withstand market conditions within the commercial
laundry equipment industry. There can be no assurance that we
will not encounter increased competition in the future, which
could have a material adverse effect on our business, financial
condition and results of operations.
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In addition, we may face competition from
companies outside of the United States that may have lower costs
of production (including labor or raw materials). These
companies may pass off these lower production costs as price
decreases for customers and as a result, our revenues and
profits could be adversely affected.
Our business is subject to the economic and
political risks of selling products in foreign
countries.
Sales of equipment to international customers
represented approximately 12.7% of our 2003 net revenues.
Demand for our products are and may be affected by economic and
political conditions in each of the countries in which we sell
our products and by certain other risks of doing business
abroad, including fluctuations in the value of currencies (which
may affect demand for products priced in United States dollars),
import duties, changes to import and export regulations
(including quotas), possible restrictions on the transfer of
funds, labor or civil unrest, long payment cycles, greater
difficulty in collecting accounts receivable and the burdens and
cost of compliance with a variety of foreign laws. Changes in
policies by foreign governments could result in, for example,
increased duties, higher taxation, currency conversion
limitations or limitations on imports or exports, any of which
could have a material adverse effect on our business, financial
condition and results of operations. We do not, and currently do
not intend to hedge exchange rate fluctuations between United
States dollars and foreign currencies associated with payments
for equipment and service parts sales.
We are dependent on key personnel.
We are dependent on the continued services of our
senior management team and certain other key employees. Other
than for chief executive officer, Thomas L'Esperance, we do
not maintain employment agreements with senior management and we
do not maintain life insurance policies with respect to key
employees. The employment agreement entered into with
Mr. L'Esperance in May 1998 was amended on
July 23, 2003 to renew for additional one-year periods from
May 4, 2004 forward, unless we or Mr. L'Esperance
provides written notice not to renew the agreement. The loss of
such key employees could have a material adverse effect on our
business, financial condition and results of operations and
could lead to reduced distribution on our capital stock.
Adverse relations with employees could harm
our business.
As of December 31, 2003, approximately 639
of our employees at our Wisconsin facilities were represented by
The United Steel Workers of America. We are periodically in
negotiations with The United Steel Workers of America. The
current collective bargaining agreement covering employees at
our Wisconsin facilities was approved in February 2004 and
expires on February 28, 2009. Although we expect to renew
the existing agreement upon its expiration or negotiate a new
agreement without a work stoppage and believe that our relations
with our union employees are generally good, there can be no
assurance that we can successfully negotiate a new agreement or
that work stoppages by certain employees will not occur. Any
such work stoppages could have a material adverse effect on our
business, financial condition and results of operations.
Beginning in December 2005, we will be unable
to continue our off-balance sheet facility. If we are unable to
refinance this facility, this may have an adverse impact on our
business.
If we are unable to refinance or replace the
facility prior to December 2005, it could also have a
material adverse effect on our business, financial condition and
results of operations, including our revenues and EBITDA and
leverage. In 2003, our financing program contributed
approximately $9.7 million, or approximately 17%, to our
Adjusted EBITDA. As of December 31, 2003, the amount due to
lenders under our asset backed facility for trade receivables
was $31.8 million. If we are unable to refinance or replace
the facility, among other things, our EBITDA could decrease over
time due to the loss in revenue generated by new financings and
our leverage could increase as a result of having to finance
accounts receivables on our balance sheet. CIBC World Markets
Corp. (or one of its affiliates) is a lender and
co-administrative agent under our asset backed facility. We have
been advised by CIBC World Markets Corp. that it and its
affiliates are in the process of exiting certain structured
finance businesses and transactions and winding down or selling
CIBC's U.S., United Kingdom, and Australian based
receivables conduit
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vehicles, and, as a result, will not be able to
act as a lender under any replacement facility or participate in
any refinancing of the facility.
The nature of our business exposes us to
potential liability for environmental claims and we could be
adversely affected by environmental and safety
requirements.
We are subject to comprehensive and frequently
changing federal, state and local environmental and occupational
health and safety laws and regulations, including laws and
regulations governing emissions of air pollutants, discharges of
waste and storm water and the disposal of hazardous wastes. We
are also subject to liability for the investigation and
remediation of environmental contamination (including
contamination caused by other parties) at the properties we own
or operate and at other properties where we or our predecessors
have arranged for the disposal of hazardous substances. As a
result, we are involved, from time to time, in administrative
and judicial proceedings and inquiries relating to environmental
matters. There can be no assurance that we will not be involved
in such proceedings in the future and that the aggregate amount
of future clean-up costs and other environmental liabilities
will not have a material adverse effect on our business,
financial condition and results of operations. We believe that
our facilities and operations are in material compliance with
all environmental, health and safety laws.
Federal, state and local governments could enact
laws or regulations concerning environmental matters that affect
our operations or facilities or increase the cost of producing,
or otherwise adversely affect the demand for, our products. We
cannot predict the environmental liabilities that may result
from legislation or regulations adopted in the future, the
effect of which could be retroactive. Nor can we predict how
existing or future laws and regulations will be administered or
interpreted or what environmental conditions may be found to
exist at our facilities or at other properties where we or our
predecessors have arranged for the disposal of hazardous
substances. The enactment of more stringent laws or stricter
interpretation of existing laws could require expenditures by
us, some of which could have a material adverse effect on our
business, financial condition and results of operations. With
respect to the Marianna, Florida facility, a former owner of the
property has agreed to indemnify us for certain environmental
liabilities. In the event that the former owner fails to honor
its obligations under the indemnification, such liabilities
could be borne directly by us and could be material.
Certain environmental investigatory and remedial
work is underway or planned at, or relating to, subsurface
environmental contamination with respect to our Marianna,
Florida and Ripon, Wisconsin manufacturing facilities. With
respect to the Marianna facility, this work is being conducted
by a former owner of the property pursuant to an indemnity
agreement and is being funded through an escrow account, the
available balance of which we believe to be substantially
greater than the remaining remediation costs. With respect to
the Ripon facility, this work will be conducted by us. We
currently expect to incur costs of less than $100,000 through
2004 at the Ripon facility to complete remedial work. There can
be no assurance, however, that significant additional remedial
costs will not be incurred by us in the future with respect to
the Marianna, Ripon or other facilities.
Our operations are also subject to various
hazards incidental to the manufacturing and transportation of
commercial laundry equipment. These hazards can cause personal
injury and damage to and destruction of property and equipment.
There can be no assurance that as a result of past or future
operations, there will not be claims of injury by employees or
members of the public. Furthermore, we also have exposure to
present and future claims with respect to worker safety,
workers' compensation and other matters. There can be no
assurance as to the actual amount of these liabilities or the
timing of them. Regulatory developments requiring changes in
operating practices or influencing demand for, and the cost of
providing, our products and services or the occurrence of
material operational problems, including but not limited to the
above events, may also have a material adverse effect on our
business, financial condition and results of operations.
For a discussion of these risks, see
"Business— Regulation and Laws— Environmental,
Health and Safety Matters."
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We are subject to risks of future legal
proceedings.
At any given time, we are a defendant in various
legal proceedings and litigation arising in the ordinary course
of business. We maintain insurance policies with insurers in
amounts and with coverages and deductibles that we believe are
reasonable and prudent. However, we can make no assurance that
this insurance will be adequate to protect us from all material
expenses related to potential future claims for personal and
property damage or that these levels of insurance will be
available in the future at economical prices. A significant
judgment against us, the loss of a significant permit or other
approval or the imposition of a significant fine or penalty
could have a material adverse effect on our business, financial
condition and future prospects.
Interest and foreign exchange rate
fluctuations could have an adverse effect on our revenues and
financial results.
From time to time, we hedge exchange rate
fluctuations between United States dollars and foreign
currencies for purchases of inventory components. Such amounts
are not material to our operations. Additionally, from time to
time, we may enter into derivative financial instruments to
hedge our interest rate exposures. We do not enter into
derivatives for speculative purposes. We currently do not hedge
commodities for purchased raw materials and components.
Revenue from international customers represented
approximately 12.7% of 2003 net revenues. At
December 31, 2003, there were no material non-United States
dollar denominated financial instruments outstanding which
exposed us to foreign exchange risk.
As noted above, we are exposed to market risk
associated with adverse movements in interest rates.
Specifically, we are primarily exposed to changes in the fair
value of our $110.0 million senior subordinated notes, and
to changes in earnings and related cash flows on our variable
interest rate debt obligations outstanding under the new credit
facility and our retained interests related to trade accounts
receivable and equipment loans sold to our special-purpose
securitization entities. Borrowings outstanding under the
existing senior credit facility totaled $157.0 million at
December 31, 2003.
The fair value of our senior subordinated notes
was approximately $110.6 million based upon prevailing
prices in recent market transactions as of December 31,
2003. We estimate that this fair value would increase/decrease
by approximately $3.7 million based upon an assumed 10%
decrease/increase in interest rates compared with the effective
yield on the senior subordinated notes as of
December 31, 2003.
An assumed 10% increase/decrease in the
variable interest rate of 4.7% in effect at December 31,
2003 related to the term loan borrowings outstanding under the
existing senior credit facility would decrease/increase
annualized earnings and cash flows by approximately
$1.0 million.
On December 12, 2002, we entered into an
$80.0 million interest rate swap agreement with Lehman
Brothers Special Financing Inc. to hedge a portion of our
interest rate risk related to our term loan borrowings under the
existing senior credit facility. Under the swap, which matures
on January 6, 2006, we pay a fixed rate of 3.06%, and
receive or pay quarterly interest payments based upon
three month LIBOR. Under the swap, net cash interest paid
during 2003 was $1.1 million. The fair value of this
interest rate swap agreement, which represents the amount that
we would pay to settle the instrument, was $1.9 million at
December 31, 2003.
An assumed 10% increase/decrease in interest
rates under our special-purpose entities at December 31,
2003 would not have a material effect on the fair value of the
retained interest in sold trade accounts receivable due to the
short-term nature of the underlying receivables. Finally, based
upon the mix of variable and fixed rate equipment loans we have
sold, a 10% increase/decrease in interest rates would
decrease/increase the fair value of our retained interests at
December 31, 2003 of $22.7 million by approximately
$0.5 million.
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Our amended and restated certificate of
incorporation and bylaws 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.
A number of provisions in our amended and
restated certificate of incorporation and amended and restated
bylaws will make it difficult for another company to acquire us
and for you to receive any related takeover premium for your
securities. For example, our amended and restated certificate of
incorporation will provide that stockholders generally may not
act by written consent and only stockholders representing at
least           %
in voting power may request that our board of directors call a
special meeting. In addition, our ability to merge or
consolidate with any other person or, directly or indirectly,
sell all or substantially all our assets is subject to the
approval of a supermajority of our directors. Our amended and
restated certificate of incorporation authorizes the issuance of
preferred stock without stockholder approval and upon such terms
as the board of directors may determine. The rights of the
holders of shares of our common stock will be subject to, and
may be adversely affected by, the rights of holders of any class
or series of preferred stock that may be issued in the future.
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Cautionary Statement Regarding Forward-Looking Statements
Some of the statements under "Summary,"
"Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations,"
"Business" and elsewhere in this prospectus may
include forward-looking statements which reflect our current
views with respect to future events and financial performance.
Statements which include the words "expect,"
"intend," "plan," "believe,"
"project," "anticipate" and similar
statements of a future or forward-looking nature identify
forward-looking statements for purposes of the federal
securities laws or otherwise.
All forward-looking statements address matters
that involve risks and uncertainties. Accordingly, there are or
will be important factors that could cause actual results to
differ materially from those indicated in these statements. We
believe that these factors include the following:
•
impact of competition;
•
continued sales to key customers;
•
possible fluctuations in the cost of raw
    materials and components;
•
possible fluctuations in currency exchange rates,
    which affect the competitiveness of our products abroad;
•
the impact of substantial leverage and debt
    service on us;
•
possible loss of suppliers;
•
risks related to asset backed facility;
•
dependence on key personnel;
•
labor relations; and
•
potential liability for environmental, health and
    safety matters.
We undertake no obligation to publicly update or
review any forward-looking statement, whether as a result of new
information, future developments or otherwise.
39
Table of Contents
Use of Proceeds
We estimate that we will receive net proceeds
from this offering of approximately
$           million
after deducting underwriting discounts and commissions and other
estimated offering expenses payable by us. We will use these net
proceeds, together with
$           million
of borrowings under our new credit facility and cash and cash
equivalents, which we refer to in the aggregate as the
"aggregate cash sources" as follows:
•
$           million
    to repurchase all of our existing senior subordinated notes in
    the tender offer or through a redemption and to repay all
    outstanding borrowings under the existing credit facility;
•
$           million
    to repay amounts outstanding under the junior notes;
•
$           million
    to redeem the mandatorily redeemable preferred membership
    interests in our predecessor held by affiliates of Trust Company
    of the West and affiliates of Sankaty Advisors;
•
funding
    $           million
    as working capital; and
•
to repurchase our existing equity investors'
    remaining equity interest in our predecessor. Based on account
    balances reflected on
    our                     ,
    2004 balance sheet, we expect that such remaining aggregate cash
    sources would have been approximately
    $           million.
    Assuming this offering and all related transactions described in
    this prospectus had been consummated
    on                     ,
    2004, such aggregate cash sources would have been
    $          million.
We will not receive any of the proceeds from the
underwriters' exercise of their over-allotment option.
Borrowings under the existing term loan facility
bear interest, at our election, at either the lender's
"base rate" (as defined in the existing senior credit
facility documents) plus a margin of 2.5% or the
"Eurodollar rate" (as defined in the existing senior
credit facility documents) plus a margin of 3.5%. Borrowings
under the existing revolving credit facility bear interest, at
our election, at either the "base rate" plus a margin
ranging from 1.5% to 2.5% or the "Eurodollar rate"
plus a margin ranging from 2.5% to 3.5%. The interest rate on
term loan borrowings outstanding at December 31, 2003 and
2002 was 4.7% and 5.3%, respectively. Our existing senior
subordinated notes bear interest at 9 5/8% per year
and are due in 2008. Our junior notes bear interest at the rate
of 19.0% per annum until the eighth anniversary of the date
of issuance of the junior notes and at a rate of 13.0%
thereafter and mature on August 21, 2009. Our preferred
membership interests are redeemable at a redemption price of
$6.0 million upon a change of control or certain other
liquidity events.
40
Table of Contents
The table below sets forth our estimate of the
sources and uses of funds required to effect the transactions
described in this prospectus. The estimated sources and uses are
based on an assumed closing date
of                     ,
2004.
Sources
(In millions)
Cash and cash equivalents
$
New credit facility:
New term facility
New revolving facility
IDSs offered hereby
Senior subordinated notes sold hereby separately
Total sources of funds
$
Repayment of existing credit facility
$
Purchase of our existing senior subordinated
    notes in the tender offer and consent solicitation (including
    accrued and unpaid interest)
Repayment of junior notes
Redemption of preferred stock
Fees and expenses
Funding working capital
Proceeds to existing equity investors(1)
$
Total uses of funds
$
(1)
The proceeds to our existing equity investors
    shown on the table above does not include IDSs, Class B common
    stock and preferred stock that we are issuing to them in this
    offering in connection with our reorganization. These IDSs have
    an aggregate value of
    $         million
    based on an assumed initial public offering price of
    $            ,
    the Class B common stock has an assumed initial aggregate value
    of
    $         million,
    and the preferred stock has an aggregate value of
    $         million.
    In addition, if the underwriters' over-allotment option is
    exercised in full, existing equity investors will offer an
    aggregate
    of             IDSs
    to the public and will receive all proceeds from the sale
    thereof, less any underwriters' discount and commissions.
41
Table of Contents
Dividend Policy and Restrictions
Upon the closing of this offering, our board of
directors is expected to adopt a dividend policy pursuant to
which, in the event and to the extent we have any available cash
for distribution to the holders of shares of our Class A
common stock as of
the                     day
of                     ,                     ,                     and                     of
each year, or the business day immediately preceding such day,
subject to applicable law, as described below, and the terms of
the new credit facility, the indenture governing our senior
subordinated notes and any other then outstanding indebtedness
of ours, our board of directors will declare cash dividends on
our Class A common stock. The initial dividend rate is
expected to be equal to
$           per
share of Class A common stock per annum, subject to
adjustment. We will pay those dividends on or about the last day
of                     ,                     ,                     and                     of
each year. Any time a dividend is paid to holders of Class A
common stock, holders of Class B common stock will be paid a
dividend equal to the amount per share paid to holders of Class
A common stock.
In addition to any such dividend, holders of
shares of our preferred stock will be entitled to receive
cumulative dividends which will accrue at a rate
of      % per annum on the deemed
issuance price of
$           per
share; provided that during the continuation of any event of
default under the indenture governing the senior subordinated
notes, dividends will accrue at a rate
of      % per annum. Such
dividends will accrue, and to the extent not paid, accumulate,
whether or not declared and whether or not we have funds legally
available for the payment of dividends. Such dividends will be
paid, if declared by the board,
on                     ,                     ,                     and                     of
each year or, to the extent not previously paid, at such time as
such shares of preferred stock together with the Class B common
stock are exchanged for IDSs; provided that such dividends may
only be paid to the extent allowable under applicable law, the
terms of our new credit facility and the indenture governing our
senior subordinated notes.
Upon the closing of the offering no shares of our
Class C common stock will be outstanding and we do not
anticipate that we will issue shares of Class C common
stock or declare dividends thereon in the near future.
If we have any remaining cash after the payment
of dividends as contemplated above, our board of directors will,
in its sole discretion, decide to use that cash to fund capital
expenditures or acquisitions, repay indebtedness, pay additional
dividends or for general corporate purposes.
The indenture governing our senior subordinated
notes restricts our ability to declare and pay dividends on our
capital stock as follows:
•
we may not pay dividends if such payment will
    exceed the quarterly base dividend level in any fiscal quarter;
    provided that if such payment is less than the quarterly base
    dividend level in any fiscal quarter, the difference between the
    aggregate amount of dividends actually paid and the quarterly
    base dividend level for such quarter will be available for the
    payment of dividends at a later date. The quarterly base
    dividend level for any given fiscal quarter shall
    equal      % of our excess cash (as
    defined below) for the 12 month period ending on the last
    day of our then most recently ended fiscal quarter for which
    internal financial statements are available at the time such
    dividend is declared and paid divided by four (4). "Excess
    cash" shall mean with respect to any period, Adjusted
    EBITDA, as defined in the indenture, minus the sum of
    (i) cash interest expense (ii) cash income tax
    expense, (iii) maintenance capital expenditures and
    (iv) dividends on our preferred stock, in each case, for
    such period;
•
we may not pay any dividends if not permitted
    under any of our senior indebtedness;
•
we may not pay any dividends while interest on
    the senior subordinated notes is being deferred or, after the
    end of any interest deferral, so long as any deferred interest
    has not been paid in full; and
•
we may not pay any dividends if a default or
    event of default under the indenture has occurred and is
    continuing.
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Table of Contents
Our board of directors may, in its discretion,
amend or repeal this dividend policy. Our board of directors may
decrease the level of dividends provided for in this dividend
policy or discontinue entirely 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, provisions of applicable law and other
factors that our board of directors may deem relevant. Under
Delaware law, our board of directors may declare dividends only
to the extent of our "surplus" (which is defined as
total assets at fair market value minus total liabilities, minus
statutory capital), or if there is no surplus, out of our net
profits for the then current and/or immediately preceding
fiscal years.
We have not paid dividends in the past.
43
Table of Contents
Capitalization
The following table sets forth our cash and cash
equivalents and capitalization as of December 31, 2003 on
an actual basis and on a pro forma as adjusted basis as if our
reorganization and this offering, including the use of proceeds
from this offering, the repayment of all outstanding borrowings
under our existing credit facility and the tender offer and
consent solicitation had occurred on that date and that we had
entered into the new credit facility on that date. For purposes
of this presentation, we have assumed that all of our existing
senior subordinated notes are purchased or redeemed in the
tender offer and consent solicitation for an aggregate
consideration of
$           million.
As of December 31, 2003
Pro Forma
Actual
Adjustments
as Adjusted
(In thousands)
Cash and cash equivalents
$
7,937
$
$
Long-term debt, including current portion
Current maturities of long-term debt
11,270
Existing credit facility (long-term)
145,975
New credit facility
—
9 5/8% senior subordinated notes
110,000
% senior subordinated notes
—
Junior subordinated note
24,171
Other long-term debt
783
Total long-term debt
292,199
Preferred stock, $0.01 par value per share
Stockholders' equity
Mandatorily redeemable preferred equity
6,000
Members' deficit
(145,758
)
Class A common stock, $0.01 par value
    per share
—
Class B common stock, $0.01 par value
    per share
—
Class C common stock, $0.01 par value
    per share
—
Additional paid-in capital
—
Accumulated other comprehensive gain
—
Total stockholders' equity
(139,758
)
Total capitalization
$
160,378
$
$
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Table of Contents
Dilution
Dilution is the amount by which the portion of
the offering price paid by the purchasers of the IDSs to be sold
in the offering that is allocated to our shares of Class A
common stock represented by the IDSs 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 Class A common stock deemed to be
outstanding at that date.
Our net tangible book value as of
December 31, 2003 was approximately $(195.2) million.
After giving effect to our receipt and intended use of
approximately
$           million
of estimated net proceeds (after deducting estimated
underwriting discounts and commissions and offering expenses)
from our sale of IDSs and separate senior subordinated notes in
this offering, based on an assumed initial public offering price
of
$           per
IDS (the midpoint of the range set forth on the cover page of
this prospectus) and      % of the
stated principal amount of the senior subordinated notes being
sold separately, our pro forma as adjusted net tangible book
value as of December 31, 2003 would have been approximately
$           million,
or
$           per
share of Class A common stock. This represents an immediate
increase in net tangible book value of
$           per
share of our Class A common stock to existing stockholders
and an immediate dilution of
$           per
share of our Class A common stock to new investors
purchasing IDSs in this offering.
The following table illustrates this substantial
and immediate dilution to new investors:
Per Share of
Common Stock
Per Share of
Assuming
Class A
Full Exercise of the
Common Stock
Over-Allotment Option
Portion of the assumed initial public price of
    $      per IDS allocated to one
    share of Class A common stock
$
$
Net tangible book value per share as of
    December 31, 2003
Increase per share attributable to cash payments
    made by investors in this offering
Pro forma as adjusted net tangible book value
    after this offering
$
$
Dilution in net tangible book value per share to
    new investors
$
$
The following table sets forth on a pro forma
basis as of December 31, 2003, assuming no exercise of the
over-allotment option:
•
the total number of shares of our Class A
    common stock to be owned by the existing equity investors and to
    be owned by the new investors, as represented by the IDSs to be
    sold in this offering;
•
the total consideration to be paid by the
    existing equity investors and to be paid by the new investors
    purchasing IDSs in this offering; and
•
the average price per share of Class A
    common stock to be paid by existing equity investors (cash and
    stock) and to be paid by new investors purchasing IDSs in this
    offering:
Shares of Class A
Common Stock
Average Price
Purchased
Total Consideration
Per Share of
Class A
Number
Percent
Amount
Percent
Common Stock
Existing equity investors
%
$
%
$
New investors
%
%
$
Total
100.0
%
$
100.0
%
45
Table of Contents
Selected Historical Financial and Operating Data
The following table sets forth our selected
consolidated financial information derived from our audited
consolidated financial statements as of and for each of the
years ended December 31, 1999 through December 31,
2003, of which the financial statements for 2001, 2002 and 2003
are included elsewhere in this prospectus.
The information in the following table should be
read together with our audited consolidated financial statements
for 2001, 2002 and 2003 and the related notes, and
"Management's Discussion and Analysis of Financial
Condition and Results of Operations," all as included
elsewhere in this prospectus. The figures in the following table
reflect rounding adjustments.
Year Ended December 31,
1999
2000
2001
2002
2003
(In thousands, except per share data)
Statements of operations data
Net revenues:
Commercial laundry(1)
$
281,658
$
230,448
$
219,273
$
219,653
$
230,663
Service parts
32,716
34,993
34,743
35,524
36,944
314,374
265,441
254,016
255,177
267,607
Cost of sales
239,482
197,558
188,982
179,047
188,979
Gross profit
74,892
67,883
65,034
76,130
78,628
Selling, general and administrative expenses
32,889
36,469
28,665
30,098
33,566
Securitization and other costs
3,707
402
–
10,920
–
Total operating expenses
36,596
36,871
28,665
41,018
33,566
Operating income
38,296
31,012
36,369
35,112
45,062
Interest expense
31,509
35,947
33,538
28,341
28,258
Loss from early extinguishment of debt
–
–
–
2,004
–
Abandoned Canadian public offering costs
–
–
–
3,409
–
Other income (expense), net
(1,706
)
354
(67
)
33
(830
)
Income (loss) before taxes
5,081
(4,581
)
2,764
1,391
15,974
Provision for income taxes
29
20
34
56
55
Net income (loss) before cumulative effect of
    accounting change
5,052
(4,601
)
2,730
1,335
15,919
Cumulative effect of change in accounting
    principle
–
–
2,043
–
–
Net income (loss)
$
5,052
$
(4,601
)
$
687
$
1,335
$
15,919
Cash flow data:
Net cash provided by operating activities
$
11,662
$
15,290
$
21,338
$
22,775
$
30,393
Net cash used in investing activities
$
(10,208
)
$
(19,557
)
$
(4,964
)
$
(2,563
)
$
(3,590
)
Net cash provided by (used in) financing
    activities
$
(3,265
)
$
6,330
$
(15,806
)
$
(18,532
)
$
(26,205
)
Other data:
Maintenance capital expenditures(2)
$
3,575
$
2,578
$
3,617
$
2,652
$
3,600
Ratio of earnings to fixed charges(3)
1.2
—
1.1
1.1
1.6
Adjusted EBITDA(4)
$
56,962
$
55,125
$
53,188
$
59,118
$
58,314
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Table of Contents
December 31,
1999
2000
2001
2002
2003
(In thousands)
Balance sheet data:
Total assets
$
217,148
$
210,143
$
203,771
$
197,295
$
190,639
Long-term debt (including current portion)
$
322,048
$
336,605
$
323,564
$
314,577
$
292,199
Year Ended December 31,
1999
2000
2001
2002
2003
(In thousands)
EBITDA:
Net income (loss)
$
5,052
$
(4,601
)
$
687
$
1,335
$
15,919
Cumulative effect of change in accounting
    principle
–
–
2,043
–
–
Provision for income taxes
29
20
34
56
55
Income (loss) before taxes
5,081
(4,581
)
2,764
1,391
15,974
Adjustments:
Interest expense
31,509
35,947
33,538
28,341
28,258
Depreciation and amortization(5)
16,969
17,155
17,026
13,293
10,886
Non-cash interest expense included in
    amortization above(6)
(2,562
)
(2,518
)
(2,720
)
(2,507
)
(2,017
)
EBITDA(7)
$
50,997
$
46,003
$
50,608
$
40,518
$
53,101
(1)
For 1999, this includes approximately
    $54.7 million in revenue from home laundry equipment sales
    to Amana Company, L.P.
(2)
Maintenance capital expenditures is defined in
    the indenture as capital expenditures less non-recurring capital
    expenditures as reflected in the chart below for the relevant
    periods.
Year Ended December 31,
1999
2000
2001
2002
2003
(In thousands)
Capital expenditures
$
10,947
$
7,445
$
5,152
$
2,652
$
3,600
Non-recurring capital expenditures
(7,372
)
(4,867
)
(1,535
)
—
—
Maintenance capital expenditures
$
3,575
$
2,578
$
3,617
$
2,652
$
3,600
During 1999 and 2001, we incurred various capital
    expenditures in connection with certain facility rationalization
    efforts related to previously owned facilities in Searcy,
    Arkansas, Madisonville, Kentucky and Cincinnati, Ohio, that were
    considered non-recurring and outside the normal course of our
    manufacturing operations. The non-recurring capital expenditures
    consist of the following:
•
In 1999, $4.9 million and $2.5 million,
    respectively, of expenditures at our Ripon facility related to
    the replication of production capabilities for our standard
    dryer and front load washer product lines. These products had
    been produced by a previously owned manufacturing facility in
    Searcy, Arkansas, which was sold in 1997 as part of Raytheon
    Company's divestiture of its Raytheon Appliance Group.
•
In 2000, $3.2 million of expenditures at our
    Ripon facility related to the transfer of production of our
    standard dryer and front load washer product lines from a
    previously owned manufacturing facility in Searcy, Arkansas,
    which began in 1999 (these expenditures included $2.6 million to
    build a new finished goods distribution center in Ripon as the
    prior warehousing space was displaced by the standard dryer,
    front load washer and tumbler dryer production lines);
    $1.1 million of expenditures at our Ripon facility related
    to the transfer of production of our tumbler dryer product line
    from a previously owned manufacturing facility in Madisonville,
    Kentucky, which was closed in 1999; $0.5 million of
    expenditures at our Marianna facility related to the transfer of
    production of our Ajax press and finishing equipment product
    lines from a manufacturing site in Cincinnati, Ohio.
•
In 2001, $1.5 million of expenditures
    primarily at our Marianna facility related to the transfer of
    production of our Ajax press and finishing equipment product
    lines from a manufacturing site in Cincinnati, Ohio, which began
    in 2000.
We believe that the identification and separation
    of maintenance and non-recurring capital expenditures are
    important factors in evaluating our financial results.
(3)
For purposes of determining the ratio of earnings
    to fixed charges, earnings are defined as income (loss) before
    income taxes and cumulative effect of change in accounting
    principle plus fixed charges. Fixed charges include interest
    expense on all
47
Table of Contents
indebtedness, amortization of deferred financing
    costs and one-third of rental expense on operating leases,
    representing that portion of rental expense deemed to be
    attributable to interest. In 2000, earnings were inadequate to
    cover fixed charges. The amount of earnings required to attain a
    ratio of 1.0 to 1.0 is $4.6 million.
(4)
"Adjusted EBITDA," as defined in the
    indenture governing our senior subordinated notes is determined
    as EBITDA, as adjusted for finance program adjustments, other
    non-recurring charges and the annual management fee paid to
    affiliates of Bain. We present this discussion of Adjusted
    EBITDA because covenants in the indenture governing our senior
    subordinated notes contain ratios based on this measure. For
    example, our ability to incur additional debt requires a ratio
    of Adjusted EBITDA to fixed charges
    of         to 1.0,
    subject to certain exceptions, including our ability to incur an
    unlimited amount of indebtedness in connection with the issuance
    of additional IDSs so long as the ratio of the aggregate
    principal amount of the additional senior subordinated notes to
    the number of the additional shares of our common stock will not
    exceed the equivalent ratio represented by the then existing
    IDSs.
On a historical basis, we made the following
adjustments to EBITDA to compute Adjusted EBITDA:
Year Ended December 31,
1999
2000
2001
2002
2003
(In thousands, except ratios)
EBITDA
$
50,997
$
46,003
$
50,608
$
40,518
$
53,101
Adjustments:
Finance program adjustments(a)
(1,313
)
2,650
151
1,019
3,396
Other non-recurring charges, as defined in the
    indenture(b)
6,269
5,453
1,414
16,548
797
Management fees paid to affiliates of Bain
1,009
1,019
1,015
1,033
1,020
Adjusted EBITDA
$
56,962
$
55,125
$
53,188
$
59,118
$
58,314
Ratio of Adjusted EBITDA to fixed charges(c)
2.0
1.6
1.7
2.3
2.2
(a)
We currently operate an off-balance sheet
    commercial equipment finance program in which newly originated
    equipment loans are sold to qualified special-purpose bankruptcy
    remote entities. In accordance with GAAP, we are required to
    record gains/losses on the sale of these equipment based
    promissory notes. In calculating Adjusted EBITDA, management
    determines the cash impact of net interest income on these
    notes. The finance program adjustments are the difference
    between GAAP basis revenues (as prescribed by
    SFAS No. 125/140) and cash basis revenues.
(b)
Other non-recurring charges includes infrequently
    occurring items, plant relocation costs included in
    administrative expenses and lawsuit settlement expenses as
    follows:
Other non-recurring charges in 1999 relate to a
    $2.3 million restructuring charge associated with the
    Madisonville plant closure, $1.5 million associated with
    payments under retention agreements with certain key employees,
    a $1.5 million legal settlement with Amana Company, L.P.,
    and $1.0 million of plant relocation costs.
Other non-recurring charges in 2000 relate to
    $0.4 million of additional medical benefits provided as
    part of the Madisonville plant closure and $5.1 million of
    plant relocation costs.
Other non-recurring charges in 2001 relate to
    $1.4 million of plant relocation costs.
Other non-recurring charges in 2002 relate to
    $10.9 million associated with costs incurred in
    establishing a new asset backed facility for the sale of
    equipment notes and trade receivables, $3.4 million
    associated with an abandoned Canadian public offering,
    $2.0 million associated with the non-cash loss resulting
    from the early extinguishment of debt on a prior term loan and
    revolving credit facility, and $0.2 million of plant
    relocation costs.
Other non-recurring charges in 2003 relate to
    $0.8 million of costs associated with the settlement of a
    lawsuit against a former subsidiary in Argentina.
Plant relocation costs in 2002, 2001 and 2000
    primarily relate to expenses associated with the relocation of
    Madisonville, Kentucky and Cincinnati, Ohio production lines to
    Ripon, Wisconsin and Marianna, Florida, respectively. Plant
    relocation costs in 1999 primarily relate to the relocation of
    Madisonville, Kentucky product lines to Ripon, Wisconsin and
    duplication of the Searcy, Arkansas standard dryer and small
    capacity frontload washer production line in Ripon, Wisconsin.
(c)
For purposes of calculating the ratio of Adjusted
    EBITDA to fixed charges (as defined in the indenture), fixed
    charges includes interest expense (excluding amortization of
    deferred financing fees) plus capitalized interest and cash
    dividends on preferred stock. On a pro forma basis, for the year
    ended December 31, 2003, our ratio of Adjusted EBITDA to
    fixed charges under the indenture would have been
to 1.0.
(5)
Amortization expense for 2001, 2000 and 1999
    includes goodwill amortization of $2.0 million,
    $2.0 million and $1.5 million, respectively. In
    accordance with SFAS No. 142, "Goodwill and Other
    Intangible Assets," we discontinued amortization of the
    goodwill balance as of December 31, 2001.
(6)
Depreciation and amortization amounts include
    amortization of deferred financing costs included in interest
    expense.
(7)
EBITDA represents net income from continuing
    operations before interest expense, income tax provision
    (benefit) and depreciation and amortization. EBITDA is not a
    measure of operating income, operating performance or liquidity
    under GAAP.
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We include EBITDA because we understand it is
    used by some investors to determine a company's historical
    ability to service indebtedness and fund ongoing capital
    expenditures, and because certain covenants in our borrowing
    agreements are tied to similar measures. Nevertheless, this
    measure should not be considered in isolation or as a substitute
    for operating income (as determined in accordance with GAAP) as
    an indicator of our operating performance, or of cash flows from
    operating activities (as determined in accordance with GAAP), or
    as a measure of liquidity.
Year Ended
December 31,
1999
2000
2001
2002
2003
(In thousands)
Cash flows from operating activities
$
11,662
$
15,290
$
21,338
$
22,775
$
30,393
Interest expense, net of non-cash interest
27,023
31,134
27,155
20,959
20,951
Net change in operating assets and liabilities
14,753
(393
)
2,148
(1,301
)
1
Income tax provision
29
20
34
56
55
Loss from early extinguishment of debt
—
—
—
(2,004
)
—
Other(A)
(2,470
)
(48
)
(67
)
33
(33
)
EBITDA
$
50,997
$
46,003
$
50,608
$
40,518
$
53,101
(A)
In 1999, we recorded a $2.3 million
    restructuring charge associated with the closing of our
    Madisonville, Kentucky manufacturing facility. The charge
    includes $1.7 million in employee termination and severance
    benefit charges, $0.5 million for the estimated loss on
    fixed assets which were held for disposal, and $0.1 million
    in miscellaneous costs. In 2000, we recorded an additional
    $0.4 million restructuring charge due to additional medical
    benefits provided as part of the employee terminations.
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Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion and analysis of our
financial condition and results of operations should be read in
conjunction with our consolidated financial statements and
accompanying notes which appear elsewhere in this prospectus. It
contains forward-looking statements that reflect our plans,
estimates and beliefs, and which involve risks, uncertainties
and assumptions. It contains forward-looking statements that
involve risks and uncertainties. Please see "Cautionary
Statement Regarding Forward-Looking Statements" for more
information. Our actual results could differ materially from
those anticipated in these forward-looking statements as a
result of various factors, including those discussed below and
elsewhere in this prospectus, particularly under the headings
"Risk Factors" and "Cautionary Statement
Regarding Forward-Looking Statements."
Overview
We believe we are the leading designer,
manufacturer and marketer of stand-alone commercial laundry
equipment in North America and that we are similarly a leader
worldwide. Under the well-known brand names of Speed
Queen®, UniMac®, Huebsch® and Ajax®, we
produce a full line of commercial washing machines and dryers
with load capacities from 16 to 250 pounds as well as presses
and finishing equipment. Our commercial products are sold to
four distinct customer groups: (i) laundromats;
(ii) multi-housing laundries, consisting primarily of
common laundry facilities in apartment buildings, universities
and military installations; (iii) on-premise laundries,
consisting primarily of in-house laundry facilities of hotels,
hospitals, nursing homes and prisons and (iv) drycleaners.
The North American stand alone commercial laundry
equipment industry's revenues are primarily driven by
population growth and the replacement cycle of laundry
equipment. With economic conditions having limited effect on the
frequency of use, and therefore the useful life of laundry
equipment, industry revenues have been relatively stable over
time. Similarly, with a majority of our revenues generated by
recurring sales of replacement equipment and service parts, we
have experienced stable revenues even during economic slowdowns.
Sales of stand alone commercial laundry equipment
are the single most important driver of our revenues. In 2003,
our net revenues from the sale of commercial laundry equipment
were approximately $230.7 million, which comprised over 86%
of our total net revenues. The other main component of our
revenues is the sale of high margin service parts. We offer
immediate response service whereby many of our parts are
available on a 24-hour turnaround for emergency repair parts
orders. In 2003, net revenues from the sale of service parts
were approximately $36.9 million, almost 14% of our total
net revenues.
We have grown our overall market share to
approximately 39% in 2003 and achieved steady revenues by
building an extensive and loyal distribution network for our
products, establishing a significant installed base of units and
developing and offering a full innovative product line. As a
result of our large installed base, a significant majority of
our revenue is attributable to replacement sales of equipment
and service parts.
We believe that continued population expansion in
North America will continue to drive steady demand for garment
and textile laundering by all customer groups that purchase
commercial laundry equipment. We anticipate growth in demand for
commercial laundry equipment in international markets as well,
especially in developing countries where laundry processing has
historically been far less sophisticated than in North America.
In addition, customers are increasingly trading up to equipment
with enhanced functionality, thereby raising average selling
prices. Customers are also moving towards equipment with
increased water and energy efficiency as the result of
government and consumer pressure and a focus on operating costs.
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Critical Accounting Policies
The preparation of financial statements in
conformity with GAAP, requires us to make estimates and
assumptions that affect reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at
the financial statement date and reported amounts of revenues
and expenses, including amounts that are susceptible to change.
Our critical accounting policies include accounting methods and
estimates underlying such financial statement preparation, as
well as judgments around uncertainties affecting the application
of those policies. In applying critical accounting policies,
materially different amounts or results could be reported under
different conditions or using different assumptions. We believe
that our critical accounting policies, involving significant
estimates, uncertainties and susceptibility to change, include
the following:
Revenue Recognition.
Revenue from product sales is recognized by us when all of the
following criteria are met: (i) persuasive evidence of an
arrangement exists; (ii) delivery has occurred and
ownership has transferred to the customer; (iii) the price
to the customer is fixed or determinable and
(iv) collectibility is reasonably assured. With the
exception of certain sales to international customers, which are
recognized upon receipt by the customer, these criteria are
satisfied, and accordingly, revenue is recognized upon shipment
by us. In addition, warranty and sales incentive costs are
estimated and accrued at the time of sale, as appropriate.
We sell notes receivable and accounts receivable
through our special-purpose bankruptcy remote entities.
Servicing revenue, interest income on beneficial interests
retained, and gains on the sale of notes receivable are included
in commercial laundry revenue. In determining the gain on sales
of notes receivable, the investment in the sold receivable pool
is allocated between the portion sold and the portion retained,
based on their relative fair values. We generally estimate the
fair values of our retained interests based on the present value
of expected future cash flows to be received, using our best
estimate of key assumptions, including credit losses, prepayment
rates, interest rates and discount rates commensurate with the
risks involved.
Inventories.
We
value inventories at the lower of cost or market. Cost is
determined by the first-in, first-out method. Valuing
inventories at the lower of cost or market requires the use of
estimates and judgment. Our policy is to evaluate all inventory
quantities for amounts on-hand that are potentially in excess of
estimated usage requirements, and to write-down any excess
quantities to estimated net realizable value. Inherent in the
estimates of net realizable value are our estimates related to
our future manufacturing schedules, customer demand, possible
alternative uses and ultimate realization of potentially excess
inventory.
Notes and Accounts
Receivable.
We value notes receivable
not sold and accounts receivable net of allowances for
uncollectible accounts. These allowances are based on estimates
of the portion of the receivables that will not be collected in
the future, and in the case of notes receivable, also considers
estimated collateral liquidation proceeds. However, the ultimate
collectibility of a receivable is significantly dependent upon
the financial condition of the individual customer, which can
change rapidly and without advance warning.
Retained Interests in Securitized Notes
Receivable.
We value retained
beneficial interests in notes receivable sold to our off-balance
sheet special-purpose entities based upon the present value of
expected future cash flows to be received on the residual
portion of cash flows on the notes, using our best estimate of
key assumptions, including credit losses, prepayment rates,
interest rates and discount rates commensurate with the risks
inherent in such estimates. Unrealized gains and losses
resulting from changes in the estimated fair value of retained
interests are recorded as other comprehensive income (loss).
Impairment losses are recognized when the estimated fair value
is less than the carrying amount of the retained interest.
Employee Pensions.
We sponsor a defined benefit pension plan covering the majority
of our employees. GAAP requires us to develop actuarial
assumptions in determining annual pension expense and benefit
obligations for the related plan. Such assumptions include
discount rate, expected rate of return on plan
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assets, compensation increases and employee
turnover rates. These assumptions are reviewed on an annual
basis and modified as necessary to reflect changed conditions.
For purposes of determining our pension expense for 2004, the
discount rate and expected rate of return on plan assets have
been reduced to 6.25% and 8.75%, respectively.
Further, GAAP requires the recognition of a
minimum pension liability and in certain circumstances an
adjustment to members' equity (deficit) when the fair
market value of year-end pension assets are less that the
accumulated benefit obligation. At year-end 2002, a charge of
$8.0 million to members' deficit was recorded in
response to lower asset valuation and somewhat higher benefit
obligations as of that date. At year end 2003, members'
deficit was reduced by $4.4 million in response to asset
returns for 2003 exceeding the plan's assumed rates of
return.
The following critical accounting policies
address the initial and prospective accounting for the IDSs and
the shares of Class A common stock and senior subordinated
notes represented thereby:
Income Taxes.
We
intend to account for our issuance of the IDSs in this offering
as representing an issuance of separate securities, shares of
Class A common stock and senior subordinated notes and to
allocate the proceeds received for each IDS unit between the
Class A common stock and senior subordinated notes in
proportion to their respective fair market values at the time of
issuance. Accordingly, we will account for the senior
subordinated notes represented by the IDSs as long-term debt
bearing a stated interest rate of % maturing on 2014, subject to
extension to 2024 based on certain conditions. As discussed
below, based on the opinion of tax counsel, we are of the view
that the senior subordinated notes should be treated as debt for
United States federal income tax purposes and we intend to
annually deduct interest expense of approximately $ on the
senior subordinated notes from taxable income for United States
federal and state income tax purposes. There can be no assurance
that the classification of senior subordinated notes as debt (or
the amount of interest expense deducted) will not be challenged
by the IRS or will be sustained if challenged, although to date
we have neither been informed by the IRS that they believe that
the senior subordinated notes should be treated as equity rather
than debt for United States federal and state income tax
purposes, nor have we sought a ruling from the IRS that the
senior subordinated notes should be treated as debt. If our
treatment of the senior subordinated notes as debt is put at
risk in the future as a result of a future ruling by the IRS,
including an adverse ruling for other IDSs or an adverse ruling
for our own IDSs such that the senior subordinated notes are
required to be treated as equity for income tax purposes then in
the event of any such ruling, we may need to consider the effect
of such developments on the determination of our future tax
provisions and obligations. In the event the senior subordinated
notes are required to be treated as equity for income tax
purposes, then 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. 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 claim the interest expense deduction and would adversely
effect our financial position, cash flow, and liquidity, and
could affect our ability to make interest or dividend payments
on the senior subordinated notes and the shares of common stock
represented by the IDSs and our ability to continue as a going
concern. We do not currently intend to record a liability for a
potential disallowance of this interest expense deduction. In
addition, non-U.S. holders of our IDS units could be subject to
withholding taxes on the payment of interest treated by the IRS
or the courts as dividends on equity which could subject us to
additional liability for the withholding taxes that we do not
collect on such payments.
As discussed below under "Material United
States Federal Income Tax Consequences — United States
Holders — Senior Subordinated Notes —
Characterization," the determination as to whether an
instrument is treated as debt or equity for United States
federal income tax purposes is based on all the facts and
circumstances. There is no clear statutory definition of debt,
and the characterization of an instrument as debt or equity is
governed by principles developed in the case law, which analyzes
numerous factors that are intended to identify the formal
characteristics of, and the economic substance of, the
investor's interest in us. In light of the representations
and determinations described in the section referred to above
and their relevance to several of the factors analyzed in the
case law, and taking into account the facts and
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circumstances relating to the issuance of the
senior subordinated notes (including the separate issuance of
senior subordinated notes in this offering), we (and our
counsel) are of the view that the senior subordinated notes
should be treated as debt for United States federal income tax
purposes. We intend to take such position, and therefore our
financial statements will not reflect a tax liability related to
this position. However, there can be no assurance that this
position would be sustained if challenged by the IRS.
Additionally, there can be no assurance that the
IRS will not challenge the determination that the interest rate
on the senior subordinated notes represents an arm's length
rate. If the IRS were successful in such a challenge, then any
excess of the interest paid on the senior subordinated notes
over the deemed arm's length amount would not be deductible
by us and could be characterized as a dividend payment instead
of an interest payment for United States federal income tax
purposes. In such case, our taxable income and, thus, our United
States federal income tax liability could be materially
increased. We intend to determine, upon consummation of this
offering, the appropriate arm's length interest rate on the
senior subordinated notes through the utilization of a third
party valuation firm and through the sale of the separate senior
subordinated notes with the same terms that are a part of this
offering.
IDSs, Class B common stock and preferred
stock.
Our IDSs represent common
stock, senior subordinated notes and embedded derivative
features that may require bifurcation under FASB Statement No.
133, "Accounting for Derivative Instruments and Hedging
Activities ("FAS 133")." Upon completion of this
offering, proceeds from the issuance of the IDSs will first be
allocated, based upon relative fair value at the issuance date,
to Class A common stock and the senior subordinated notes.
If it is determined at the time of issuance that any of the
embedded derivatives are required to be bifurcated and
separately accounted for, then a portion of the proceeds from
the original issuance will also be allocated to the embedded
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
proceeds allocated to the senior subordinated notes will be
reduced and the senior subordinated notes will be recorded at a
discount and accreted to their redemption value as a component
of interest expense using the effective interest method. Any
such allocation will not effect the tax treatment of the IDSs.
The Class A common stock portion of the IDS
unit will be included in stockholders' equity, net of the
related portion of the IDS transaction costs allocated to
Class A common stock, and dividends paid on the
Class A common stock will be recorded as a reduction to
retained earnings when declared by us. The senior subordinated
debt portion of the IDS unit will be included in long-term debt,
and the related portion of the IDS transaction costs allocated
to the notes 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. Any derivatives requiring
bifurcation will be recorded as a liability as required by FAS
133 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 any embedded derivatives that require bifurcation
through the utilization of a third party valuation firm and the
sale of the separate senior subordinated notes with the same
terms that are part of this offering.
In connection with our reorganization, we will
issue shares of Class B common stock, and preferred stock
to certain current equity holders. The preferred stock may,
subject to certain conditions, be exchanged in the future for
IDSs. The Class B common stock will be treated as permanent
equity. The Class B common stock dividends will be equal to
the amount per share paid to holders of Class A common
stock. Because we have two classes of common stock, net income
will be allocated between the two classes of common stock for
purposes of computing earnings per share. At the date of the
initial sale, the preferred stock will be classified as
mezzanine equity. Dividends on preferred stock will be deducted
from net income in the determination of net income available to
common stockholders for purposes of computing earnings per share.
Following the second anniversary of the
consummation of this offering, at the option of our existing
equity investors, upon any subsequent sale of any of their
shares of Class B common stock together with their
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preferred stock we will issue to the purchasers
of such shares, one IDS in exchange for one share of
Class B common stock and one share of preferred stock.
If it is determined at the time of issuance that
the embedded conversion option is required to be bifurcated and
separately accounted for, a portion of the proceeds from the
original issuance of the Class B common stock and preferred
stock will also be allocated to this derivative. If a portion of
the initial proceeds is allocated to the derivative, the amount
recorded as mezzanine equity will initially be recorded at a
discount and accreted to the redemption value using the
effective interest method. The bifurcated derivatives will be
recorded as liabilities and will be marked to market with
changes in fair value being recorded as a component of interest
expense.
Results of Operations
The following table sets forth our historical net
revenues for the periods indicated:
Year Ended December 31,
2001
2002
2003
(In millions)
Commercial laundry
$
219.3
$
219.7
$
230.7
Service parts
34.7
35.5
36.9
$
254.0
$
255.2
$
267.6
The following table sets forth certain condensed
historical financial data for us expressed as a percentage of
net revenues for each of the periods indicated:
Year Ended December 31,
2001
2002
2003
Net revenues
100.0%
100.0%
100.0%
Cost of sales
74.4%
70.2%
70.6%
Gross profit
25.6%
29.8%
29.4%
Selling, general and administrative expense
11.3%
11.7%
12.6%
Securitization and other costs
0.0%
4.3%
0.0%
Operating income
14.3%
13.8%
16.8%
Net income (loss) before cumulative effect of
    accounting change
1.1%
0.5%
5.9%
Year Ended December 31, 2003 Compared
    to Year Ended December 31, 2002
Net Revenues.
Net
revenues for the year ended December 31, 2003 increased
$12.4 million, or 4.9%, to $267.6 million from
$255.2 million for the year ended December 31, 2002.
This increase was primarily attributable to higher commercial
laundry revenue of $11.0 million and higher service parts
revenue of $1.4 million. The increase in commercial laundry
revenue was due primarily to higher North American equipment
revenue of $7.1 million, and international revenue of
$4.7 million, which was partly offset by lower earnings
from our off-balance sheet equipment financing program of
$0.8 million. The increase in North American equipment
revenue was primarily due to higher revenue from laundromats,
and multi-housing laundries partially offset by lower revenue
from drycleaners and on-premise laundries. Revenue from
international customers was higher in Europe and Asia.
Gross Profit.
Gross
profit for the year ended December 31, 2003 increased
$2.5 million, or 3.3%, to $78.6 million from
$76.1 million for the year ended December 31, 2002.
This increase was primarily attributable to margins associated
with the higher sales volume, a price increase and lower
depreciation expense, which were partially offset by unfavorable
exchange rates related to foreign purchases, unfavorable product
mix related to sales to drycleaning customers and lower earnings
from our off-balance sheet equipment financing program. Gross
profit as a percentage of net revenues decreased to 29.4% for
the year ended December 31, 2003 from 29.8% for the year
ended December 31, 2002.
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Selling, General and Administrative
Expense.
Selling, general and
administrative expenses for the year ended December 31,
2003 increased $3.5 million, or 11.5%, to
$33.6 million from $30.1 million for the year ended
December 31, 2002. The increase in selling, general and
administrative expenses was primarily due to higher pension
expense of $1.5 million, and higher sales and marketing
expenses of $1.2 million. Selling, general and
administrative expenses as a percentage of net revenues
increased to 12.6% for the year ended December 31, 2003
from 11.7% for the year ended December 31, 2002.
Securitization and Other
Costs.
We did not incur any
securitization and other costs for the year ended
December 31, 2003. Securitization and other costs for the
year ended December 31, 2002 were $10.9 million. The
2002 costs were due to transaction fees associated with a new
asset backed facility. Securitization and other costs as a
percentage of net revenues were 4.3% for the year ended
December 31, 2002.
Operating Income.
As
a result of the aforementioned, operating income for the year
ended December 31, 2003 increased $10.0 million, or
28.3%, to $45.1 million from $35.1 million for the
year ended December 31, 2002. Operating income as a
percentage of net revenues increased to 16.8% for the year ended
December 31, 2003 from 13.8% for the year ended
December 31, 2002.
Interest Expense.
Interest expense for the year ended December 31, 2003 of
$28.3 million was unchanged as compared to interest expense
for the year ended December 31, 2002. Lower cash interest
expense resulting from a reduction in total debt outstanding was
offset by higher cash interest expense related to the junior
subordinated note. Interest expense in 2003 includes an
unfavorable non-cash adjustment of $1.4 million to reflect
changes in the fair values of an interest rate swap agreement.
Interest expense in 2002 includes an unfavorable non-cash
adjustment of $1.8 million to reflect changes in the fair
values of a similar interest rate swap agreement.
Other Income (Expense),
Net.
Other expense for the year ended
December 31, 2003 was $0.8 million as compared to
other income of less than $0.1 million for the year ended
December 31, 2002. The 2003 other expense is comprised of
costs associated with the settlement of a lawsuit against a
former subsidiary of ours in Argentina and losses on the sale of
fixed assets. The 2002 other income is comprised entirely of
gains on the sale of fixed assets.
Net Income.
As a
result of the aforementioned, net income for the year ended
December 31, 2003 increased $14.6 million to
$15.9 million as compared to $1.3 million for the year
ended December 31, 2002. Net income as a percentage of net
revenues increased to 5.9% for the year ended December 31,
2003 from 0.5% for the year ended December 31, 2002.
Year Ended December 31, 2002 Compared
    to Year Ended December 31, 2001
Net Revenues.
Net
revenues for the year ended December 31, 2002 increased
$1.2 million, or 0.5%, to $255.2 million from
$254.0 million for the year ended December 31, 2001.
This increase was primarily attributable to higher commercial
laundry revenue of $0.4 million and higher service parts
revenue of $0.8 million. The increase in commercial laundry
revenue was due primarily to higher North American equipment
revenue of $3.0 million, and higher earnings from our
off-balance sheet equipment financing program of
$0.6 million, which was partly offset by lower
international revenue of $3.2 million. The increase in
North American equipment revenue was primarily due to price
increases of approximately $3.5 million and higher revenue
from multi-housing laundries, and laundromats, partially offset
by lower revenue from on-premise laundries. Revenue from
international customers was lower due to the discontinuance of
sales to a foreign customer under a private label contract and
higher sales to the Mexican government in 2001 under a one-time
contract.
Gross Profit.
Gross
profit for the year ended December 31, 2002 increased
$11.1 million, or 17.1%, to $76.1 million from
$65.0 million for the year ended December 31, 2001.
This increase was primarily attributable to the price increase
and favorable manufacturing efficiencies, $1.5 million of
lower depreciation expense, and $2.0 million of favorable
impact in 2001 resulting from a change in accounting
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principle whereby goodwill is no longer
amortized. Gross profit as a percentage of net revenues
increased to 29.8% for the year ended December 31, 2002
from 25.6% for the year ended December 31, 2001.
Selling, General and Administrative
Expense.
Selling, general and
administrative expenses for the year ended December 31,
2002 increased $1.4 million, or 5.0%, to $30.1 million
from $28.7 million for the year ended December 31,
2001. The increase in selling, general and administrative
expenses was primarily due to higher pension expense of
$1.4 million, higher independent development expenses of
$0.9 million, higher compensation expenses of
$0.9 million, and higher sales and marketing expenses of
$0.3 million, partially offset by lower expenses related
primarily to the relocation of Cincinnati, Ohio production lines
to Marianna, Florida of $0.9 million and a lower loss on
sales of qualified accounts receivable of $0.8 million.
Selling, general and administrative expenses as a percentage of
net revenues increased to 11.7% for the year ended
December 31, 2002 from 11.3% for the year ended
December 31, 2001.
Securitization and Other
Costs.
We did not incur any
securitization and other costs for the year ended
December 31, 2001. Securitization and other costs for the
year ended December 31, 2002 were $10.9 million. The
2002 costs were due to transaction fees associated with a new
asset backed facility. Securitization and other costs as a
percentage of net revenues were 4.3% for the year ended
December 31, 2002.
Operating Income.
As
a result of the aforementioned, operating income for the year
ended December 31, 2002 decreased $1.3 million, or
3.5%, to $35.1 million from $36.4 million for the year
ended December 31, 2001. Operating income as a percentage
of net revenues decreased to 13.8% for the year ended
December 31, 2002 from 14.3% for the year ended
December 31, 2001.
Interest Expense.
Interest expense for the year ended December 31, 2002
decreased $5.2 million, or 15.5%, to $28.3 million
from $33.5 million for the year ended December 31,
2001. Interest expense in 2002 includes an unfavorable non-cash
adjustment of $1.8 million related to interest rate swap
agreements entered into in 2002. Interest expense in 2001
included an unfavorable non-cash adjustment of $0.9 million
related to these agreements. Interest expense was also lower in
2002 as a result of lower interest rates and a reduction in
total debt outstanding of $22.0 million, or 6.5% since
December 2000.
Loss from Early Extinguishment of
Debt.
Loss from early extinguishment
of debt for the year ended December 31, 2002 was
$2.0 million. We entered into an amended and restated
credit agreement dated as of August 2, 2002. As a result,
we recorded a loss on early extinguishment of debt of
$2.0 million at that time, to write-off unamortized debt
issuance costs related to our prior term loan and revolving
credit facilities.
Abandoned Canadian Public
Offering.
Abandoned Canadian public
offering expense for the year ended December 31, 2002 was
$3.4 million of costs incurred while pursuing an initial
public offering through a Canadian Income Trust. Due to market
conditions, we determined that such a public offering was not
advantageous to us at that time.
Other Income (Expense),
Net.
Other income for the year ended
December 31, 2002 was less than $0.1 million as
compared to other expense of $0.1 million for the year
ended December 31, 2001. The 2002 other income is comprised
entirely of gains on the sale of fixed assets. The 2001 other
expense is comprised entirely of losses on the sale of fixed
assets.
Net Income Before Cumulative Effect of
Accounting Change.
As a result of the
foregoing, net income before cumulative effect of accounting
change for the year ended December 31, 2002 decreased
$1.4 million to a net income before cumulative effect of
accounting change of $1.3 million as compared to
$2.7 million for the year ended December 31, 2001. Net
income before cumulative effect of accounting change as a
percentage of net revenues decreased to 0.5% for the year ended
December 31, 2002 from 1.1% for the year ended
December 31, 2001.
Cumulative Effect of Accounting
Change.
Effective April 1, 2001,
we adopted the provisions of Emerging Issues Task Force, or
EITF, Issue No. 99-20 "Recognition of Interest
Income and Impairment on Purchased and Retained Beneficial
Interests in Securitized Financial Assets." In accordance
with the impairment provisions of EITF 99-20, upon adoption
we recognized a $2.0 million non-cash write-down of our
retained interests in its securitization transactions.
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Net Income.
As a
result of the aforementioned, net income for the year ended
December 31, 2002 increased $0.6 million to
$1.3 million as compared to $0.7 million for the year
ended December 31, 2001. Net income as a percentage of net
revenues increased to 0.5% for the year ended December 31,
2002 from 0.3% for the year ended December 31, 2001.
Liquidity and Capital Resources
Existing Senior Credit
Facility.
On August 2, 2002, we
amended and restated our May 1998 credit agreement with a
syndicate of financial institutions. The amended and restated
existing $238.0 million senior credit facility is comprised
of a term loan facility aggregating $193.0 million and a
$45.0 million revolving credit facility. Among other
modifications, the amended and restated agreement extends the
senior credit facility termination date from May 5, 2005 to
August 5, 2007.
The existing senior credit facility continues to
be subject to certain financial ratios and tests, similar to
those included in the prior facility. The senior credit facility
allows a maximum ratio of consolidated debt to EBITDA (as
defined by the existing senior credit facility) at
December 31, 2003 of 5.50.
Additional borrowings and the issuance of
additional letters of credit under the senior credit facility
are subject to certain continuing representations and
warranties, including the absence of any development or event
which has had or could reasonably be expected to have a material
adverse effect on our business or financial condition.
We expect to use the proceeds from this offering
to repay the outstanding indebtedness under the existing senior
credit facility.
New Credit Facility.
We expect that the new credit facility will be comprised of a
senior secured revolving credit facility in a total principal
amount of up to
$           million,
which we refer to as the "new revolver," and a senior
secured term loan facility in an aggregate principal amount of
$           million,
which we refer to as the "new term loan." Our new
revolver will have
a           -year
maturity period and the new term loan will have
a           -year
maturity period. We expect to use borrowings under the revolving
credit facility for general corporate purposes, including
working capital, capital expenditures, payment of dividends and
letters of credit.
The new credit facility will require that we meet
certain financial tests and will contain customary covenants and
restrictions.
We believe, based on currently available
information, that future cash flows from operations, together
with available borrowings under the new credit facility, will be
adequate to meet our anticipated requirements for capital
expenditures, working capital, interest payments, scheduled
principal payments and other debt repayments while achieving all
required covenant requirements under the new credit facility.
Securitization
Programs.
On November 26, 2002, a
trust, Alliance Laundry Equipment Receivables Trust 2002-A,
or ALERT 2002A, formed by a special-purpose bankruptcy
remote subsidiary of ours entered into a $300.0 million
revolving facility, or the asset backed facility, backed by
equipment loans and trade receivables originated by us. During
the first three years of the asset backed facility, we are
permitted, from time to time, to sell our trade receivables and
certain equipment loans to the special purpose subsidiary, which
in turn will transfer them to the trust. The trust finances the
acquisition of the trade receivables and equipment loans through
borrowings under the asset backed facility. Funding availability
for trade receivables is limited to a maximum of
$60.0 million, while funding for equipment loans is limited
at $300.0 million less the amount of funding outstanding
for trade receivables. Funding for the trade receivables and
equipment loans is subject to certain eligibility criteria
standard for transactions of this type. After three years from
the closing date, which is December 2, 2005, (or earlier in
the event of a rapid amortization event or an event of default),
the trust will not be permitted to request new borrowings under
the facility and the outstanding borrowings will amortize over a
period of up to nine years thereafter.
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Additional advances under the asset backed
facility are subject to certain continuing conditions, including
but not limited to (i) the weighted average life, weighted
average interest rate, and the amount of fixed rate equipment
loans held by the trust, (ii) the absence of a rapid
amortization event or event of default, as defined,
(iii) our compliance, as servicer, with certain financial
covenants, and (iv) no event having occurred which
materially and adversely affects our operations.
The risk of loss to the note purchasers under the
asset backed facility resulting from default or dilution on the
trade receivables and equipment loans is protected by credit
enhancement, provided in the form of cash reserves, letters of
credit and overcollateralization. Further, the timely payment of
interest and the ultimate payment of principal on the facility
is guaranteed by Ambac Assurance Corporation. All of the
residual beneficial interests in the trust and cash flows
remaining from the pool of receivables and loans after payment
of all obligations under the Asset Backed Facility would accrue
to our benefit. Except for the retained interests and amounts of
the letters of credit outstanding from time to time as credit
enhancement, we provide no support or recourse for the risk of
loss relating to default on the assets transferred to the trust.
In addition, we are paid a monthly servicing fee equal to
one-twelfth of 1.0% of the aggregate balance of such trade
receivables and equipment loans.
Liquidity.
Our
principal sources of liquidity are cash flows generated from
operations and borrowings under our
$           million
new credit facility. Our principal uses of liquidity are to meet
debt service requirements, finance our capital expenditures and
provide working capital. We expect that capital expenditures in
2004 will not exceed $7.4 million. We expect the ongoing
requirements for debt service, capital expenditures and working
capital will be funded by internally generated cash flow and
borrowings under the revolving credit facility. As of
December 31, 2003, we had $292.2 million of
indebtedness outstanding.
At December 31, 2003, we had outstanding
debt of $157.0 million under the existing term loan
facility, $110.0 million of existing senior subordinated
notes, $24.2 million of junior subordinated notes,
$0.6 million of borrowings pursuant to a Wisconsin
Community Development Block Grant Agreement and
$0.4 million of borrowings pursuant to an equipment
financing transaction with Alliant Energy — Wisconsin
Power & Light Company. At December 31, 2003 there
were no borrowings under our existing revolving credit facility.
Letters of credit issued on our behalf under the existing
revolving credit facility totaled $25.3 million at
December 31, 2003. At December 31, 2003, we had
$19.7 million of our existing $45.0 million revolving
credit facility available subject to certain limitations under
our existing $238.0 million senior credit facility. After
considering such limitations, which relate primarily to the
maximum ratio of consolidated debt to EBITDA (as defined by the
existing senior credit facility), we could have borrowed
$19.7 million at December 31, 2003 in additional
indebtedness under the existing revolving credit facility. The
maximum ratio of consolidated debt to EBITDA under the existing
senior credit facility is scheduled to be reduced from 5.50 at
December 31, 2003 to 4.75 at December 31, 2004.
The existing term loan facility is repayable in
the following aggregate annual amounts:
Year
Amount Due
(In millions)
2004
$
11.0
2005
$
13.2
2006
$
17.7
2007
$
115.1
The existing term loan facility is also subject
to mandatory prepayment with the proceeds of certain debt
incurrences, asset sales and a portion of Excess Cash Flow (as
defined in the existing senior credit facility). The existing
revolving credit facility will terminate on August 5, 2007.
Our ability to make scheduled payments of
principal or to pay the interest or liquidated damages, if any,
or to refinance our indebtedness, or to fund planned capital
expenditures, will depend upon our future performance, which in
turn is subject to general economic, financial, competitive and
other factors that are beyond our control. There can be no
assurance, therefore, that our business will continue to
generate sufficient cash flow from operations in the future to
service our debt and make necessary capital
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expenditures after satisfying certain liabilities
arising in the ordinary course of business. If unable to do so,
we may be required to refinance all or a portion of our existing
debt, to sell assets or to obtain additional financing. There
can be no assurance that any such refinancing would be available
or that any such sales of assets or additional financing could
be obtained.
Contractual Commitments
A summary of our contractual commitments under
debt and lease agreements at December 31, 2003 and the
effect such obligations are expected to have on liquidity and
cash flow in future periods appears below.
Less Than
1-3
4-5
After
Contractual Obligations
Total
1 Year
Years
Years
5 Years
(In thousands)
Long-term debt
$
292,199
$
11,270
$
31,328
$
225,291
$
24,310
Operating leases
1,190
507
599
66
18
Purchase commitments*
13,488
13,488
—
—
—
Other long-term obligations**
7,888
—
—
—
7,888
Total contractual cash obligations
$
314,765
$
25,265
$
31,927
$
225,357
$
32,216
*
Purchase commitments are based on our estimate of
    the liability we could incur under open and blanket purchase
    orders for inventory related items.
**
Other long-term obligations represent future
    payment requirements associated with deferred compensation
    agreements and redeemable preferred equity.
We do not have any significant guarantees of debt
or other commitments to third parties.
Off-Balance Sheet Arrangements
Through our special-purpose bankruptcy remote
subsidiary, we entered into the $300.0 million asset backed
facility as described above. Pursuant to the terms of the asset
backed facility, we provide credit enhancement to the note
purchasers (including an irrevocable letter of credit, which is
an unconditional lending commitment of the lenders under the
existing senior credit facility) subject to certain limits. We
are obligated under the reimbursement provisions of the existing
senior credit facility to reimburse the lenders for any drawings
on the credit enhancement by the facility indenture trustee. If
the credit enhancement is not replenished by us after a drawing,
the trust is prohibited from request new borrowings under the
asset backed facility and the asset backed facility will begin
to amortize. The amount of the irrevocable letter of credit
related to the asset backed facility at December 31, 2003
was $24.0 million.
Cash Flows
After giving effect to this offering, the
expected use of proceeds and the new credit facility, we believe
that our net cash provided by operating activities and borrowing
capacity under the new credit facility will be sufficient to
enable us to fund our liquidity needs for the foreseeable
future. Should we be unable to borrow under the new credit
facility, we would seek other sources of debt or equity funding.
However, we cannot assure you that we will be successful in
obtaining alternate sources of funding in sufficient amounts or
on acceptable terms.
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Our summary cash flows for the three years ending
December 31, 2003 are as follows:
Year Ended December 31,
2001
2002
2003
(In thousands)
Net cash provided by operating activities
$
21,338
$
22,775
$
30,393
Net cash used in investing activities
(4,964
)
(2,563
)
(3,590
)
Net cash used in financing activities
(15,806
)
(18,532
)
(26,205
)
Net increase in cash and cash equivalents
$
568
$
1,680
$
598
Cash generated from operations for the twelve
months ended December 31, 2003 of $30.4 million was
derived from our earnings before depreciation and amortization
with a partial offset resulting from changes in working capital.
The working capital investment in accounts receivable at
December 31, 2003 of $9.2 million increased
$3.4 million as compared to the balance of
$5.8 million at December 31, 2002. The investment in
beneficial interests in securitized accounts receivable at
December 31, 2003 of $16.8 million decreased
$3.1 million as compared to the balance of
$19.9 million at December 31, 2002, which was
primarily attributable to a decrease in retained interests on
trade receivables sold under the asset backed facility. The
investment in notes receivable at December 31, 2003 of
$8.2 million decreased $3.0 million as compared to the
balance of $11.2 million at December 31, 2002, which
was primarily attributable to a decrease in unsold notes carried
on our books. The investment in inventory at December 31,
2003 of $26.2 million increased $0.5 million as
compared to the balance of $25.7 million at
December 31, 2002. The working capital investment in
accounts payable at December 31, 2003 of $11.3 million
decreased $2.5 million as compared to the balance of
$13.8 million at December 31, 2002.
Cash generated from operations for the twelve
months ended December 31, 2002 of $22.8 million was
principally derived from our earnings before depreciation and
amortization as well as changes in working capital. The working
capital investment in accounts receivable at December 31,
2002 of $5.8 million decreased $4.6 million as
compared to the balance of $10.4 million at
December 31, 2001. The investment in beneficial interests
in securitized accounts receivable at December 31, 2002 of
$19.9 million increased $13.0 million as compared to
the balance of $6.9 million at December 31, 2001,
which was primarily attributable to an increase in retained
interests on trade receivables sold under the asset backed
facility as compared to retained interests associated with the
prior trade receivables facility. The investment in notes
receivable at December 31, 2002 of $11.2 million
increased $2.7 million as compared to the balance of
$8.5 million at December 31, 2001, which was primarily
attributable to an increase in unsold notes carried on our
books. The investment in beneficial interests in securitized
financial assets at December 31, 2002 of $21.5 million
decreased $6.7 million as compared to the balance of
$28.2 million at December 31, 2001, which was
primarily attributable to a decrease in retained interests on
equipment loans sold under the asset backed facility as compared
to retained interests associated with the prior notes
receivables facility. The investment in inventory at
December 31, 2002 of $25.7 million decreased
$4.2 million as compared to the balance of
$29.9 million at December 31, 2001. The working
capital investment in accounts payable at December 31, 2002
of $13.8 million increased $1.6 million as compared to
the balance of $12.2 million at December 31, 2001.
Capital Expenditures
Our capital expenditures for the twelve months
ended December 31, 2003 and December 31, 2002 were
$3.6 million and $2.7 million, respectively. Capital
spending in 2003 and 2002 was principally oriented toward
product enhancements and reducing manufacturing costs.
Recently Issued Accounting
Pronouncements
In June 2001, the Financial Accounting Standards
Board, or FASB, issued Statement of Financial Accounting
Standards, or SFAS, No. 143, "Accounting for Asset
Retirement Obligations." This statement addresses the
financial accounting and reporting for obligations associated
with the retirement of tangible
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long-lived assets and the associated asset
retirement costs. The provisions of SFAS No. 143 are
effective for fiscal years beginning after June 15, 2002.
We adopted SFAS No. 143 effective January 1,
2003. The adoption did not have any impact on the consolidated
financial statements.
In November 2002, the FASB issued FASB
Interpretation No., or FIN 45, "Guarantor's
Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness
of Others." FIN 45 requires that upon issuance of a
guarantee, the guarantor must recognize a liability for the fair
value of the obligation it assumes under that guarantee. In
addition, FIN 45 requires additional disclosures about the
guarantees that an entity has issued, including a reconciliation
of the changes in the entity's product warranty liabilities
during the reporting period. The initial recognition and
measurement provisions of FIN 45 are applicable on a
prospective basis to guarantees issued or modified after
December 31, 2002. We adopted the provisions of this
statement effective January 1, 2003. The adoption of the
recognition and measurement provisions did not have a material
impact on the consolidated financial statements.
During January 2003, the FASB issued FIN 46,
"Consolidation of Variable Interest Entities," which
clarifies the consolidation and disclosure requirements related
to variable interests in a variable interest entity. A variable
interest entity is an entity for which control is achieved
through means other than voting rights. In December 2003, the
FASB issued a revision to FIN 46, which replaced
FIN 46. The revised Interpretation, or FIN 46-R, must
be adopted by us, based upon our status as a non-public entity
as defined by FIN 46-R, beginning on January 1, 2005
for interests in entities created on or before December 31,
2003 and as of the date we first become involved with a
potential variable interest entity created after
December 31, 2003.
FIN 46-R provides exceptions from its scope
for certain entities, including qualifying special-purpose
securitization entities subject to the reporting requirement of
SFAS No. 140 and business entities, as defined, that
do not possess certain characteristics.
Our primary variable interests are notes
receivable that have not been sold and are comprised primarily
of equipment loans to laundromat operators and other end-users.
Excluding notes awaiting sale, the carrying value of such loans
was approximately $4.5 million at December 31, 2003.
We are continuing our evaluation of FIN 46-R and
accordingly, cannot at this time determine the effects of
adoption, if any, on our consolidated financial statements. If
in the future, however, we are required to consolidate a
variable interest entity in which one or both of our
SFAS No. 140 qualifying special-purpose entities also
holds a variable interest, the qualifying status of the
special-purpose entity with such holdings would be eliminated.
In that instance, we would be required to determine if we are
the primary beneficiary of the affected securitization entity
under FIN 46-R and if so, to consolidate that entity, which
would have a material effect on our consolidated financial
position, results of operations and cash flows.
During April 2003, the FASB issued
SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities," which
amends and clarifies financial accounting and reporting for
certain derivative instruments modified or entered into after
June 30, 2003. Generally, the provisions of
SFAS No. 149 are effective beginning July 1,
2003. We adopted SFAS No. 149 effective July 1,
2003. The adoption did not have any impact on our consolidated
financial statements.
During May 2003, the FASB issued
SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and
Equity," which establishes standards for the classification
and measurement of certain financial instruments with
characteristics of both liabilities and equity. The FASB has
also subsequently issued certain staff positions that
effectively amended SFAS No. 150. The statement became
effective for us beginning January 1, 2004. The adoption of
SFAS No. 150, as amended, will result in
classification of our mandatorily redeemable preferred equity as
a liability.
During December 2003, the FASB revised
SFAS No. 132, "Employers' Disclosures about
Pensions and Other Postretirement Benefits," to require
additional disclosures about the assets, obligations, cash
flows, and net periodic benefit cost of defined benefit pension
plans and other defined benefit postretirement plans. These
disclosure requirements are effective immediately for our plans,
except for estimated future benefit payments, which will be
effective in 2004. This statement also requires interim-period
disclosures of
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the components of net periodic benefit cost and,
if significantly different from previously disclosed amounts,
the amount of contributions and projected contributions to fund
pension and other postretirements benefit plans. These
interim-period disclosures will be effective for us in the first
quarter of 2004.
In December 2003, the staff of the SEC issued
Staff Accounting Bulletin, or SAB, No. 104, "Revenue
Recognition", which supercedes SAB No. 101,
"Revenue Recognition in Financial Statements". SAB
No. 104's primary purpose is to rescind accounting
guidance contained in SAB No. 101 related to multiple
element revenue arrangements, superceded as a result of the
issuance of EITF 00-21, "Accounting for Revenue
Arrangements with Multiple Deliverables." Additionally, SAB
No. 104 rescinds the SEC's Revenue Recognition in
Financial Statements Frequently Asked Questions and Answers, or
the FAQ, issued with SAB No. 101. Selected portions of the
FAQ have been incorporated into SAB 104. While the wording
of SAB No. 104 has changed to reflect the issuance of
EITF 00-21, the revenue recognition principles of SAB
No. 101 remain largely unchanged by the issuance of SAB
No. 104. The adoption of SAB No. 104 did not have any
impact upon our consolidated financial statements.
The FASB is expected to re-expose a proposed
statement in the first quarter of 2004 that would amend and
clarify SFAS No. 140 (and related implementation
guidance). The proposed statement will address permitted
activities of qualifying special-purpose entities, including the
degree of discretion allowable in determining the terms of
beneficial interests issued after inception, and whether certain
transfers can meet the criteria for sale accounting under
SFAS No. 140 if the transferor or any consolidated
affiliate provides liquidity support for the transferee's
beneficial interests. As the proposed statement has not been
issued, we are unable to determine the effects, if any, on our
existing securitization entities, or the related transition
provisions. However, in the event that transfers to our existing
asset backed facility would no longer qualify as sales of
financial assets in the future, we may recognize additional
costs for a replacement facility or other material financial
statement effects.
Quantitative And Qualitative Disclosures About
Market Risk
We are potentially exposed to market risk
associated with changes in interest and foreign exchange rates.
From time to time, we do hedge exchange rate fluctuations
between United States dollars and foreign currencies for
purchases of inventory components. These amounts are not
material to our operations. Additionally, from time to time, we
may enter into derivative financial instruments to hedge our
interest rate exposures. We do not enter into derivatives for
speculative purposes. We currently do not hedge commodities for
purchased raw materials and components.
Revenue from international customers represented
approximately 12.7% of our 2003 net revenues. At
December 31, 2003, there were no material non-United States
dollar denominated financial instruments outstanding which
exposed us to foreign exchange risk.
As noted above, we are exposed to market risk
associated with adverse movements in interest rates.
Specifically, we are primarily exposed to changes in the fair
value of our existing $110.0 million senior subordinated
notes, and to changes in earnings and related cash flows on our
variable interest rate debt obligations outstanding under the
existing senior credit facility and our retained interests
related to trade accounts receivable and equipment loans sold to
our special-purpose securitization entities. Borrowings
outstanding under the existing senior credit facility totaled
$157.0 million at December 31, 2003.
The fair value of our existing senior
subordinated notes was approximately $110.6 million based
upon prevailing prices in recent market transactions as of
December 31, 2003. We estimate that this fair value would
increase/ decrease by approximately $3.7 million based upon
an assumed 10% decrease/ increase in interest rates compared
with the effective yield on the existing senior subordinated
notes as of December 31, 2003.
An assumed 10% increase/decrease in the variable
interest rate of 4.7% in effect at December 31, 2003
related to the term loan borrowings outstanding under the
existing senior credit facility would decrease/increase
annualized earnings and cash flows by approximately
$1.0 million.
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On December 12, 2002, we entered into an
$80.0 million interest rate swap agreement with Lehman
Brothers Special Financing Inc. to hedge a portion of our
interest rate risk related to our term loan borrowings under the
existing senior credit facility. Under the swap, which matures
on January 6, 2006, we pay a fixed rate of 3.06%, and
receive or pay quarterly interest payments based upon
3 month LIBOR. Under the swap, net cash interest paid
during 2003 was $1.1 million. The fair value of this
interest rate swap agreement, which represents the amount that
we would pay to settle the instrument, was $1.9 million at
December 31, 2003.
An assumed 10% increase/ decrease in interest
rates under our special-purpose entities at December 31,
2003 would not have a material effect on the fair value of the
retained interest in sold trade accounts receivable due to the
short-term nature of the underlying receivables. Finally, based
upon the mix of variable and fixed rate equipment loans we have
sold, a 10% increase/decrease in interest rates would decrease/
increase the fair value of our retained interests at
December 31, 2003 of $22.7 million by approximately
$0.5 million.
Inflation
We do not believe that inflation has had a
material adverse impact on our business or operating results
during the periods presented. We cannot assure you, however,
that our business will not be affected by inflation in the
future.
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Business
Overview
We are the leading designer, manufacturer and
marketer in North America of commercial laundry equipment used
in laundromats, multi-housing laundries and on-premise
laundries. Under the well-known brand names of Speed Queen(R),
UniMac(R) and Huebsch(R), we produce a full line of commercial
washing machines and dryers with load capacities from 16 to 250
pounds. We believe we have been the market share leader in the
North American stand alone commercial laundry equipment industry
for more than ten years. With a market share of approximately
39% in 2003, we believe our sales are more than twice as large
as those of the next largest competitor.
We serve three distinct end-customer groups:
(i) laundromats; (ii) multi-housing laundries,
consisting primarily of common laundry facilities in apartment
buildings, universities and military installations; and
(iii) on-premise laundries, consisting primarily of
in-house laundry facilities in hotels, hospitals, nursing homes
and prisons. The primary means of serving these end-customers is
through distributors and route operators. We reach laundromat
and on-premise laundry end-customers through a network of over
200 North American distributors and over 100 international
distributors, serving over 90 countries. Our distributors
purchase equipment from us, then re-sell and install it for
laundromat and on-premise end-customers. We serve multi-housing
end-customers through a network of over 80 route operators.
Route operators purchase equipment from us, and then obtain
leases from multi-housing property managers to place it into
common laundry rooms.
We believe that we have the most extensive
distribution network in North America which gives us a
significant competitive advantage. We estimate that our
distributors and route operators have either the number one or
number two market position in over 80% of North American
markets. We believe that the superior quality and loyalty of our
distribution network has been a significant factor in achieving
the number one market share in North America in each of our
three end-customer groups.
We estimate that the North American stand alone
commercial laundry equipment industry generated approximately
$472.0 million in revenue in 2003. The industry's
revenues are primarily driven by population growth and the
replacement cycle of laundry equipment. North American consumers
view clean clothes as a necessity, with economic conditions
having limited effect on the frequency of use, and therefore the
useful life, of laundry equipment. As a result, the
industry's revenues have been relatively stable over time
and through economic downturns.
History
Our business began in 1908 when we introduced a
hand-operated washer to the marketplace. Industry leading
features were introduced under the Speed Queen® brand with
the introduction of stainless steel wash tubs in 1938 and
automatic washers and dryers in 1952. In 1956, McGraw Electric
Company purchased our business. Manufacturing and marketing of
coin-operated laundry equipment began in 1957. The addition of
Huebsch® brand commercial tumblers in 1978 further expanded
our product line. In 1979, Raytheon Company purchased our
business. During the next 19 years, we expanded the
capabilities of our commercial laundry business by purchasing
the UniMac® product line and established ourselves as a
leader in the commercial laundry industry. Following an
initiative by Raytheon to divest itself of its commercial
laundry business, on May 5, 1998, Bain/ RCL, L.L.C., an
investment group led by BRS/ RCL Investment Corp. and members of
our management, acquired 93% common equity interest in us with
Raytheon continuing to own 7% of the common interests. In late
2003, Raytheon sold all of its debt and equity interests to a
group of investors consisting of affiliates of each of Trust
Company of the West, or TCW, and Sankaty Advisors. We have
continued to expand our commercial laundry business by
purchasing the Ajax® product lines in 2000.
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Company Strengths
We believe that we have the following competitive
strengths:
Market Leader with Significant Installed
Base.
We are the market share leader
in the overall North American stand alone commercial laundry
equipment industry, and we believe that our sales are more than
twice as large as those of the next largest competitor. We have
grown overall market share to approximately 39% in 2003 from 21%
in 1993. In addition to leading the overall market, we are the
leader in sales to each of our three primary end-customer groups.
Leading and Growing Market Share
North American Stand Alone Commercial Laundry
Equipment(1)
(1)
Management estimates.
As a result of our market leadership for more
than ten years, we believe that we have the largest installed
base of equipment in North America comprised of over two million
machines. A significant majority of our revenue is attributable
to replacement sales driven by our large installed base combined
with an average ten year estimated life per machine.
Stable Revenues and Increasing Cash Flow.
We have experienced stable revenues
even during economic slowdowns, driven by the underlying
stability of the industry and the recurring sales of replacement
equipment and service parts which together comprise the majority
of our revenues. In addition, since 1995, we have progressively
reduced our manufacturing costs through improvements in raw
material usage and labor efficiency, as well as through plant
consolidation, resulting in improving cash from operations as
demonstrated by our historical financial performance. Our net
cash from operating activities was approximately
$11.7 million, $15.3 million, $21.3 million,
$22.8 million and $30.4 million for 1999, 2000, 2001,
2002 and 2003, respectively.
Limited Working Capital and Consistent Capital
Expenditure Requirements.
We
aggressively manage our working capital requirements, having
reduced net working capital as a percent of revenue from 8.2% in
2000 to 6.7% in 2003. From December of 2000 to December of 2003,
inventory was reduced from $37.5 million to
$26.2 million, an improvement of 30.0%. We also have
consistent capital expenditure
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requirements, with maintenance capital
expenditures of $3.6 million, $2.6 million,
$3.6 million, $2.7 million and $3.6 million, for
1999, 2000, 2001, 2002 and 2003, respectively. We believe that
we currently have excess manufacturing capacity and can increase
production without incurring significant additional capital
expenditures.
Extensive and Loyal Distribution
Network.
We believe we have developed
the most extensive distribution network in the North American
industry, with over 200 distributors and 80 route operators. We
estimate that our laundromat and on-premise laundry distributors
and multi-housing route operators have either the number one or
number two market position in over 80% of North American
markets. These leading distributors and route operators are
attracted by our industry-leading brand equity, broad product
array, significant installed base and our comprehensive
value-added support, which includes training, extensive
electronic support of installation and service and joint
promotion efforts. These factors lead to high costs for
distributors and route operators to switch manufacturers,
especially when combined with their substantial investments in
service parts inventories and in training their sales and
installation personnel with respect to our highly engineered
products. Our customers place great value on the proven
reliability of our products, backed by years of demonstrated
experience in the field, as this significantly impacts their
long term repair and maintenance expenses. We have not
experienced any significant turnover of our distributors and
route operators, of which a significant number have been
customers for over ten years.
High Barriers to Entry.
We believe that significant time and
substantial capital investment would be required for a new
entrant to compete effectively in this market. Many years of
engineering and field testing, plus substantial investment in
plant and equipment, are required before the process of
attempting to earn market share can take place. In addition, a
new entrant would have to break the strong, established
relationships that existing manufacturers have developed with
distributors. There are significant costs for distributors and
route operators to break these long-term relationships,
including extensive retraining of distributors' and route
operators' sales, installation and service personnel and
duplication of service parts inventories which must be stocked
for years.
Comprehensive and Innovative Product Offering.
We believe our product lines lead the
industry in reliability, breadth of offerings, functionality and
advanced features. In addition, we believe we are the only
manufacturer in North America to produce a full product line
(including topload washers, dryers, frontload washers,
washer-extractors and tumbler dryers for all commercial customer
groups), thereby providing customers with a single source
solution for all their stand alone commercial laundry equipment
needs. Our development team of more than 80 engineers and
technical personnel, along with our marketing and sales
personnel, work together with our major customers to redesign
and enhance our products to better meet customer needs. For
example, new products such as our NetMaster
TM
system
emphasize efficiency and feature new electronic controls,
facilitating ease of use as well as improving performance and
reliability. In 1999, for example, in response to customer
demand, we introduced a new line of small-chassis frontload
washers, offering increased water and energy efficiency to
multi-housing laundries. Similarly, in late 2000, we introduced
our NetMaster
TM
system of technologically advanced
laundry products offering multi-housing and laundromat operators
more flexibility and accountability, allowing operators to
change vend prices, cycle times, rinse options and cycle
selections from a remote site while also auditing machine
operation. We estimate that since the introduction of the
NetMaster
TM
system, over 300 laundries have been
built with this product, with approximately 20% of those being
fully networked. In addition, our Wash Alert
TM
system
allows students to view the availability of equipment in their
common laundry areas and to view the status of their laundry
from the convenience of their dorm room.
Leading North American Brands.
We market and sell our products under
the widely recognized brand names Speed Queen®,
UniMac®, Huebsch® and Ajax®. We believe that we
have industry-leading brand equity and brand recognition, based
upon historical customer survey results and the substantial
market share growth achieved since 1993.
Strong and Experienced Management Team.
Led by chief executive officer Thomas
L'Esperance, we have assembled a strong and experienced
management team. Our seven executive officers average over
16 years of experience in the commercial laundry equipment
and appliance industries. This management team has
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executed numerous strategic initiatives,
including: (i) developing strategic alliances with key
customers; (ii) acquiring and successfully integrating the
commercial washer-extractor business of UniMac® and the
press and finishing equipment business of Ajax®;
(iii) implementing manufacturing cost reduction and quality
improvement programs; and (iv) ongoing refinements to our
product offerings. Management's economic interests will
align with those of securityholders through management's
participation in our long-term incentive plan.
Business Strategy
We strive to continue our strong financial
performance and selectively pursue growth opportunities by
offering to our customers a full line of the most reliable and
functional stand alone commercial laundry equipment, together
with industry-leading, comprehensive value-added services. The
key elements of our strategy are as follows:
Develop and Strengthen Relationships with Key
Customers.
We have developed and will
continue to pursue long-term relationships and supply agreements
with key customers. The relationships that we establish with our
customers are comprehensive and include training, extensive
technical support and promotion activities. In addition, we
model our product development efforts to meet evolving customer
preferences by working with key customers to develop new
products, features and value-added services.
We have not experienced any significant customer
turnover. Our top ten customers, other than a significant new
account that was added in 2003, have been our customers for at
least ten years. For example, we currently sell our products to
Coinmach Corporation, our largest customer, under a multi-year
supply agreement. Coinmach, which is the largest operator of
multi-housing laundries in North America, has been a significant
customer of ours for over two decades.
Continue to Improve Manufacturing Operations.
We seek to continuously enhance our
product quality and reduce costs through ongoing refinements to
our manufacturing processes. We achieve such improvements, and
intend to continue doing so, through collaboration among key
customers, suppliers and our engineering and marketing
personnel. Since 1996, we have progressively reduced our
manufacturing costs through improvements in raw material usage
and labor efficiency, as well as plant consolidation. Since
2000, we have been implementing a demand flow production system
on our higher volume product lines. These process changes have
resulted in significant improvements in assembly efficiency,
inventory levels, customer order lead times and production
quality. For example, labor productivity improved by 4.5% from
2002 to 2003, and over the same period, we improved our first
year warranty incident rate by 20% from an already industry
leading level of 0.2% of sales.
Expand into the U.S. Home Laundry Market.
We are planning to re-enter the
U.S. home laundry market in October 2004, after the
expiration of a non-compete agreement. This non-compete
agreement was a result of the divestiture of a sister division
in 1997. Our strategy in the home laundry market will be
dual-pronged. First, we plan to re-enter the mid to high-end
home laundry market with existing products that we currently
sell internationally and into other markets. These existing
products are designed to have useful lives approximately twice
that of typical home laundry equipment. Before exiting the home
laundry market pursuant to the non-compete agreement, we
produced annual home laundry units of about 500,000 for a 5%
market share of annual home laundry units, which generated
approximately $150 million in annual sales. We plan to
leverage the strong brand equity of our Speed Queen® name
in order to recapture our historic market share.
Second, we have signed a letter-of-intent with an
ultra-premium home appliance company to produce
professional-quality home laundry equipment to be sold under
their brand name. This equipment is based completely on our
current commercial equipment technology and production methods.
These plans to enter both the mid to high-end and the
ultra-premium home laundry markets should allow us to expand our
sales and continue to diversify our customer base. These
products will be produced in our current facilities with minimal
incremental capital expenditures.
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Industry Overview
We estimate that North American stand alone
commercial laundry equipment sales were approximately
$472.0 million in 2003, of which our equipment revenue
represented approximately $181.5 million. We believe that
the North American market for stand alone commercial laundry
equipment has grown at a compound annual rate of approximately
1.2% since 1993. North American commercial laundry equipment
sales historically have been relatively insulated from business
and economic cycles, given that economic conditions tend not to
affect the frequency of use, or replacement, of laundry
equipment. We believe steady industry growth will be sustained
by continued population expansion and by customers increasingly
"trading up" to equipment with enhanced functionality
and higher average selling prices.
Manufacturers of stand alone commercial laundry
equipment compete on their ability to satisfy several customer
criteria, including: (i) equipment reliability and
durability; (ii) performance criteria such as water and
energy efficiency, load capacity and ease of use; (iii) the
availability of innovative technologies such as cashless payment
systems and advanced electronic controls, which improve ease of
use and management audit capabilities; and (iv) the supply
of value-added services such as rapid spare parts delivery,
equipment financing and computer-aided assistance in the design
of commercial laundries.
Trends
and Characteristics
Growth Drivers.
We
believe that continued population expansion in North America
will continue to drive steady demand for garment and textile
laundering by all customer groups that purchase commercial
laundry equipment. We believe population growth has historically
supported replacement and some modest growth in the installed
base of commercial laundry equipment. According to the
U.S. Census Bureau, the United States population has grown
at a compound annual rate of 1.2% since 1993 and is projected to
grow at approximately 0.8% per year on average over the
next ten years. In addition to the North American market, we
anticipate growth in demand for commercial laundry equipment in
international markets, especially in developing countries where
laundry processing has historically been far less sophisticated
than in North America.
In addition, customers are increasingly trading
up to equipment with enhanced functionality, thereby raising
average selling prices. For example, the larger national and
regional customers in the laundromat and multi-housing customer
groups are more likely to take advantage of recently available
electronic features, such as cashless payment systems and
advanced electronic controls which we believe provide these
customers with a competitive advantage. Customers are also
moving towards equipment with increased water and energy
efficiency as the result of government and consumer pressure and
a focus on containing operating costs.
Limited End Use Cyclicality.
North American commercial laundry
equipment sales historically have been relatively insulated from
business and economic cycles because economic conditions tend
not to affect the frequency of use, or replacement, of laundry
equipment. The useful life of commercial laundry equipment, and
thus the timing of replacement of the equipment, are also
generally unaffected by economic conditions. The useful life of
stand alone commercial laundry equipment is generally 7 to
14 years. Under all economic conditions, owners of
commercial laundries typically continue to use their equipment
until it can no longer be economically repaired or until
competition forces the owner to upgrade their equipment in order
to improve its appearance or functionality.
International Growth.
We anticipate growth in demand for
commercial laundry equipment in international markets,
especially in developing countries where laundry needs are less
sophisticated than in North America.
Reducing Customer Operating Costs.
The time required to wash and dry a
given load of laundry, which we refer to as cycle time, has a
significant impact on the economics of a commercial laundry
operation. Accordingly, commercial laundry equipment
manufacturers produce equipment that provides progressively
shorter cycle times through improved technology and product
innovation. This shorter cycle time decreases labor costs and
increases the volume of laundry that can be processed in a given
time period. Examples of
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methods for reducing cycle time are:
(i) shortening fill, drain and wash times; and
(ii) decreasing water extraction time by increasing spin
speed. Our product enhancements in 2000 increased our topload
washer's spin speed to the fastest in the commercial
laundry equipment industry with its 710 revolutions per
minute spin speed. The higher spin speed substantially increases
water extraction and thereby lowers moisture retention. For coin
laundromat and multi-housing laundry owners, the lower moisture
retention results in reduced energy bills for clothes drying
operations. Overall, this improvement provides faster drying
times, lower energy costs and the potential for increased
revenue generating cycles per day.
Customer
Categories:
Stand Alone Commercial Laundry
Equipment.
Each of the stand alone
commercial laundry equipment industry's three primary
customer groups—laundromat operators, multi-housing laundry
operators and on-premise laundry operators—is served
through a different distribution channel and has different
requirements with respect to equipment load capacity,
performance and operating features. Vended equipment purchased
by multi-housing route operators is most similar to consumer
machines sold to retail customers and is generally purchased
directly from us. Equipment purchased by laundromats and
on-premise laundries has greater durability, delivers increased
capacity, provides more sophisticated cleaning and faster drying
capabilities and is generally purchased through distributors.
North American Stand Alone Commercial Laundry
Equipment Industry Sales(1)
($472 million)
(1)
Management estimates for 2003.
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Alliance Laundry North American Stand
Alone
Commercial Laundry Equipment Market
Shares(1)
(1)
Management estimates for 2003.
Laundromats.
We
estimate that laundromats accounted for approximately 54% of the
sales for the North American stand alone commercial laundry
equipment industry in 2003 and we have a 31% market share for
this customer category. There are an estimated
35,000 laundromats in North America. These laundromats
typically provide walk-in, self-service washing and drying and
primarily purchase commercial topload washers, washer-extractors
and tumblers. Washer-extractors and tumblers are
larger-capacity, higher-performance washing machines and
matching large capacity dryers, respectively. Laundromats have
historically been owned and operated by sole proprietors who
typically rely on distributors to find locations for stores,
design the laundromat, provide and install equipment and provide
technical and repair support and broader business services. For
example, distributors frequently host seminars for potential
laundromat proprietors on laundromat investment opportunities.
Independent laundromat proprietors also look to distributors and
manufacturers for equipment financing. Given the laundromat
owner's reliance on the services of its local distributor,
we believe that a strong distributor network in local markets
differentiates manufacturers which serve this customer group.
In addition to distributor relationships, we
believe that laundromat owners choose among different
manufacturers' products based on, among other things:
(i) availability of equipment financing;
(ii) reputation, reliability and ease and cost of repair;
(iii) the water and energy efficiency of the products
(approximately 25% of annual gross wash and dry revenue of
laundromats is consumed by utility costs, according to the Coin
Laundry Association, or CLA); and (iv) the efficient use of
physical space in the store (approximately 25% of annual gross
revenue of laundromats is expended on rent, according to the
CLA's "2003 Coin Laundry Industry Survey").
Multi-Housing Laundries.
We estimate that multi-housing
laundries accounted for approximately 27% of North American
stand alone commercial laundry equipment sales in 2003 and we
have a 46% market share for this customer category. These
laundries include common laundry facilities in multi-family
apartment and condominium complexes, universities and military
installations, as well as equipment for in-unit hook ups.
Most products sold to multi-housing laundries are
small-chassis topload and frontload washers and small-chassis
dryers that are vended, but similar in appearance to those sold
to the retail consumer market and offer a variety of enhanced
durability and performance features such as audit functions that
keep track of
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the number of cycles and the amount of money that
has been collected. We estimate that topload washers sold to
multi-housing laundries typically last up to 12,000 cycles,
approximately twice as long as the expected life of a consumer
machine.
Multi-housing laundries are managed primarily by
route operators who purchase, install and service the equipment
under contract with building management. Route operators pay
rent (which may include a portion of the laundry's revenue)
to building management. Route operators are typically direct
customers of commercial laundry equipment manufacturers such as
ours and tend to maintain their own service and technical
staffs. Route operators compete for long-term contracts on the
basis of, among other things: (i) the reputation and
durability of their equipment; (ii) the level of
maintenance and quality of their repair service; (iii) the
ability of building management to audit laundry equipment
revenue; and (iv) the water and energy efficiency of
products.
We believe reliability and durability are key
criteria for route operators and their property management
customers in selecting equipment, because these criteria help to
minimize equipment down time and repair costs. We also believe
route operators prefer water and energy efficient equipment that
offers enhanced electronic monitoring and tracking features
demanded by building management companies. Route operators are
reluctant to change equipment suppliers given their investments
in spare parts inventories and in sales and repair technician
training, particularly as laundry equipment becomes more
technically sophisticated. Therefore, we believe a large
installed base of laundry equipment gives a commercial laundry
equipment manufacturer a significant competitive advantage and a
high likelihood of substantial replacement sales.
On-Premise Laundries.
We estimate that on-premise laundries
accounted for approximately 19% of North American stand alone
commercial laundry equipment sales in 2003 and we have a 51%
market share for this customer category. On-premise commercial
laundries are located at a wide variety of businesses that wash
or process textiles or laundry in large quantities, such as
hotels and motels, hospitals, nursing homes, sports facilities,
car washes and prisons.
Most products sold to on-premise laundries are
washer-extractors and tumbler dryers, primarily in larger
capacities up to 250 pounds per load. These machines process
significantly larger loads of textiles and garments in shorter
times than equipment typically sold to laundromats or
multi-housing customer groups. Effective and rapid washing
(i.e., reduced cycle time) of hotel sheets, for example, reduces
both a hotel's linen requirements and labor costs of
washing and drying linens. We believe that in a typical
on-premise laundry within a hotel, up to 50% of the operating
costs is labor.
On-premise laundries typically purchase equipment
through a distributor who provides a range of sales and repair
services on behalf of manufacturers. As with laundromats, we
believe a strong distributor network is a critical element of
sales success. On-premise laundries select their equipment based
on the availability of specified product features, including,
among other things: (i) reputation and reliability of
products; (ii) load capacity and cycle time;
(iii) water and energy efficiency; and (iv) ease of
use. In addition, the availability of technical support and
service is important when an on-premise laundry operator selects
an equipment supplier.
Drycleaning.
We
estimate that North American drycleaning equipment sales were
approximately $210.0 million in 2003. Until our
March 6, 2000 acquisition of the Ajax® press and
finishing equipment line, we offered only shirt laundering,
wetcleaning and drying equipment to the drycleaning market.
Approximately 34,000 drycleaners in North America provide
full-service drycleaning and wetcleaning for households. These
services include stain removal, cleaning, pressing, finishing
and packaging. In addition, many commercial drycleaners provide
laundry services for water-washable garments and rug cleaning
services and minor alteration and repair services.
Drycleaners primarily purchase drycleaning
machines, presses and finishing equipment, washer-extractors,
tumblers and small-chassis topload washers and dryers.
Drycleaners primarily include independently operated
neighborhood cleaners, franchisees and specialty cleaners.
Drycleaners typically rely on distributors and chemical supply
companies to provide equipment, detergents, stain removers,
technical
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support and broader business services. For
example, distributors and chemical suppliers provide training
seminars on the proper use of equipment and chemicals for
cleaning, stain removal and garment finishing.
As with laundromats and on-premise laundries,
drycleaners typically purchase equipment through distributors
who can provide service parts, repair service and technical
support. Drycleaners select their equipment based on the
availability of specified product features, including, among
other things: (i) reputation and reliability;
(ii) load capacity and cycle time; (iii) ease of use
and (iv) solvent and energy efficiency.
Products and Services
We offer a full line of stand alone commercial
laundry washers and dryers, with service parts and value-added
services supporting our products. Our products range from small
washers and dryers, primarily for use in laundromats and
multi-housing laundry rooms, to large laundry equipment with
load capacities of up to 250 pounds used in on-premise
laundries. Our brands include the Speed Queen®,
Huebsch® and UniMac® and are sold throughout North
America and in over 90 foreign countries. Additionally, we offer
laundry and drycleaning presses and shirt finishing equipment
under the Ajax® brand. We also benefit from domestic and
international sales of service parts for our large installed
base of commercial laundry equipment. Internationally, we also
sell laundry equipment under private label brands in order to
take advantage of distribution networks of other companies and
to round out their product offerings.
In 2003, we completed the successful introduction
of the Micro-electronic Display Control on our small chassis
product and the tumbler dryers. The Micro-electronic Display
Control offers an electronic interface between the
Micro-electronic Display Control and card readers from various
manufacturers offering enhanced features such as time of day and
multi-level pricing. Emerging energy and water consumption
standards are also met with the unique cycle programming of the
control. The introduction of the Micro-electronic Display
Control in conjunction with an upgraded electronic control on
the washer-extractors gave the Huebsch® brand a full line
of electronically controlled equipment for the first time,
resulting in increased sales for this brand.
Washers
Washers represented approximately 46% of our
2003 net revenues and include washer-extractors, topload
washers and frontload washers.
Washer-Extractors.
We manufacture washer-extractors, our
largest washer products, to process from 20 to 250 pounds of
laundry per load. After cleaning, washer-extractors extract
water from laundry with spin speeds that produce over
300 G's of centrifugal force, thereby reducing water
retention and the time and energy costs for the drying cycle.
Sold primarily under the Speed Queen®, Huebsch® and
UniMac® brands, these products represented approximately
25% of our 2003 net revenues. Washer-extractors that
process up to 80 pounds of laundry per load are sold to
laundromats and washer-extractors that process up to
250 pounds of laundry per load are sold to on-premises
laundries. Washer-extractors are built to be extremely durable
in order to handle the enormous G-force generated by spinning
several hundred pounds of water-soaked laundry. Also, the
equipment is in constant use and must be durable enough to avoid
frequent breakdown, which would represent increased cost for the
user.
In 2001, we introduced a new 40 pound wash load
washer-extractor and in 2003, we introduced a new 60 pound
washer-extractor. These new washer-extractors replaced our
35 pound and 50 pound wash load capacity units,
respectively, thereby offering customers additional wash
capacity and an extra large opening for easy loading and
unloading of laundry. In addition, in 2003, we introduced the
following: (i) a new line of technologically advanced soft
mount washer-extractors from 18 to 165 pound capacity which
features user friendly alpha numeric controls, efficient
dimensions and high energy and water efficiency; (ii) a new
micro processor control for the coin market offering individual
cycle pricing, cycle modifier keys, time-of-day pricing and new
easier programming, all designed to be customer and environment
friendly
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and (iii) a companion to our premium line
products referred to as the "value line", which are
one step below the premium featured line with a price point
advantage.
Topload Washers.
Topload washers are small-chassis washers with the capability to
process up to 16 pounds of laundry per load with spin
speeds that produce up to 150 G's. Sold primarily to
multi-housing laundries and laundromats under the Speed
Queen® and Huebsch® brands, these products represented
approximately 17% of our 2003 net revenues.
In late 2000, we introduced our
NetMaster
TM
system of technologically advanced
laundry products offering multi-housing and laundromat operators
more business flexibility and accountability. This system
interfaces with several payment types including coins, tokens
and debit cards and credit cards, and enables operators to
program vend prices, cycle times, rinse options and cycle
selections from a remote site while auditing machine operation.
In 2003, we introduced our Wash
Alert
TM
system to universities. This system allows
students to view the availability of equipment in their common
laundry areas and to view the status of their laundry from the
convenience of their dorm room. Our software solution provides
students with added convenience, while providing universities
with accurate laundry room activity analysis through their own
network system.
Wash Alert
TM
is not only a time-saver
for students; universities benefit from it as well. The system
verifies the income from coin/card vending laundry equipment
ensuring greater revenue accountability. The system's
remote diagnostic capability means faster response time from
service providers.
In addition, in 2003, we introduced an upgraded
Micro-electronic Display Control on the topload washer that
conserves water and energy. The improved efficiency qualifies
the Micro-electronic Display Control topload washer for the
ENERGY STAR(R) label and other federal and local energy
efficiency programs.
Frontload Washers.
Frontload washers contributed approximately 4% of our
2003 net revenues. In 1999, we introduced a new
small-chassis frontload washer with the capability to process up
to 18 pounds of laundry per load. Frontload washers are
sold under the Speed Queen® and Huebsch® brands to
laundromat and multi-housing customers. The frontload
washer's advanced design uses 28% less water than
commercial topload washers. Furthermore, decreased usage of hot
water and superior water extraction in the high G-force spin
cycle reduce energy consumption. The frontload washer is
available with front controls (front accessibility complies with
Americans with Disabilities Act regulations) or rear controls
and can be purchased with a matching small-chassis dryer (single
or stacked, front or rear controls).
Our frontload washers display the
U.S. federal government's ENERGY STAR(R) mark. The
ENERGY STAR(R) label was designed by the U.S. federal
government to denote products that use less energy, thereby
saving money on utility bills while helping to protect the
environment. Along with our 18 pound wash load capacity,
our frontload washer has a spin speed of over 1,000 revolutions
per minute, providing significant savings in the energy required
to dry wash loads.
In 2001, we introduced a new commercial stacked
frontload washer and dryer which takes up half the floor space
compared to a conventional washer and dryer. The pair saves on
energy and water and received the U.S. federal
government's ENERGY STAR(R) mark. The new product is
offered with push button, coin or card activation.
In 2003, we introduced a major upgrade to the
frontload washer. This upgrade included a new drive system which
incorporates an induction motor and a motor control with an
integrated inverter. Also, the new drive system will deliver
longer equipment life and is substantially quieter to operate.
This new system represents leading edge technology and provides
a significant increase in energy efficiency.
Dryers
Dryers represented approximately 33% of our
2003 net revenues and include tumbler dryers, standard
dryers and stacked dryers. We also sell a new line of stacked
combination frontload washers and dryers.
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Tumbler Dryers.
Tumblers are very large dryers with the capability of drying up
to 170 pounds of laundry per load. Tumblers represented
approximately 22% of our 2003 net revenues. Tumblers are
sold primarily to laundromats and on-premise laundries under all
four of our brands. Our current tumbler dryer design, introduced
in October 1997, has 33% to 50% fewer moving parts and requires
20% less drying time as compared to the previous design. In
2003, we upgraded our 50 and 75 pound tumbler designs by
enlarging the doors to facilitate easier loading and unloading.
These new doors are also reversible which allows for a broader
array of installation arrangements. In addition, in 2003, we
introduced the CARE
TM
fire suppression system option
for 50, 75, 120 and 170 pound tumblers. This system detects and
diminishes spontaneous combustion fires driven by the cleaning
of chemically saturated fabrics.
In the fall of 2002, we began supplying tumbler
dryers to a large European original equipment manufacturer
account allowing the account to curtail its production of
similar sized products. In 2003, sales to this account exceeded
$4.5 million.
Standard Dryers.
Standard dryers are small capacity dryers with the capability to
process up to 18 pounds of laundry per load. Sold under the
Speed Queen® and Huebsch® brands, standard dryers
(including stacked dryers) represented approximately 11% of our
2003 net revenues. Our dryer's capacity, measuring 7.1
cubic feet, is among the largest in the industry.
Stacked Dryers and Stacked Frontload Washers
and Dryers.
To enable our
multi-housing customers to conserve valuable floor space, we
offer a stacked unit consisting of two 18 pound standard dryers
and offers a stacked combination unit consisting of an 18 pound
frontload washer paired with an 18 pound standard dryer.
Presses and
Finishing Equipment
Presses and finishing equipment are sold
primarily to commercial drycleaners and industrial cleaning
plants under the Ajax® brand. Sales of this equipment
accounted for approximately 3% of our 2003 net revenues. We
offer a broad array of presses and finishing equipment such as
cabinet presses for shirt finishing; pants and linen presses;
collar and cuff presses; shirt sleevers; steam-air garment
finishers; and utility presses and accessories.
Service
Parts
We benefit from the recurring sales of service
parts to our large installed base of equipment. The expected
field service life of the equipment is 7 to 14 years.
Service parts sales accounted for approximately 14% of our
2003 net revenues. We offer immediate response service
whereby many of our parts are available on a 24-hour turnaround
basis for emergency repair parts orders. The significant demand
for service parts generated by the large installed base provides
us with a source of higher margin, recurring revenue.
Other
Value-Added Services
We believe our customers attach significant
importance to the value-added services we provide. We offer
services that we believe are significant drivers of high
customer satisfaction and retention, such as equipment financing
(which accounted for approximately 2% of our 2003 net
revenues), laundromat site selection assistance, investment
seminar training materials, computer-aided commercial laundry
room design and sales and service training for distributors. In
1999, our technical communications department introduced a new,
CD-Rom based, parts look up program called SearchIt. Since that
time, the program has continually been updated to include
service manuals, troubleshooting guides, parts pricing
information and a parts ordering pick list. Our technical
communication web site includes installation and operating
instructions, programming manuals and technical bulletins.
Through our password protected extranet site, our distributors
and route operators can download sample equipment operating
signs for laundry rooms in both English and Spanish. In
addition, management believes we offer an unmatched range of
complementary customer services and support, including toll-free
technical support and on-call installation and repair service
through our highly trained distributors and our web sites which
provide information on all of our products and services,
including downloadable product literature and installation
guides. Our
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laundry design service provides construction
drawings and 3-dimensional layouts of proposed laundry
facilities. The service also provides a cost analysis for new or
updated laundries. We believe our extensive service
capabilities, in addition to the dependability and functionality
of our products, will continue to differentiate our products
from the competition.
Customers
Our customers include more than:
(i) 100 distributors to laundromats;
(ii) 100 distributors to on-premise laundries;
(iii) 45 distributors to drycleaners;
(iv) 80 route operators serving multi-housing
laundries; and (v) 130 international distributors
serving more than 90 countries.
Our top ten customers accounted for approximately
35.8% of our 2003 net revenues. Our top ten customers,
other than a significant new account that was added in 2003,
have been customers for at least ten years. In 2003, Coinmach
Corporation, the largest multi-housing route operator in the
United States, PWS Investments, Inc. and Metropolitan
Laundry Machinery Co., Inc. were our largest customers,
with Coinmach being the largest, accounting for 15.8% of our
2003 net revenues.
Sales and Marketing
Sales
Force
We structure our sales force of 29 as of
December 31, 2003 to serve the needs of each of our
customer groups. In addition, through a marketing staff of
approximately 51 professionals as of December 31, 2003, we
provide customers and distributors with a wide range of
value-added services such as advertising materials, training
materials, computer-aided commercial laundry room design,
product development and technical service support.
Marketing
Programs
We support our sales force and distributors
through a balanced marketing program of advertising and industry
trade shows. Advertising expenses totaled $3.1 million in
2003 and included a variety of forms, from print and electronic
media to direct mail. In addition, our representatives attended
over 34 trade shows in 2003 to introduce new products,
maintain contact with customers, develop new customer
relationships and generate sales leads for our products.
Equipment
Financing
Through our special-purpose financing
subsidiaries, we offer an extensive off-balance sheet equipment
financing program to end-users, primarily laundromat owners, to
assist in their purchases of new equipment. Typical terms
include two to nine year loans with an average principal amount
of approximately $75,000. We believe that our off-balance sheet
equipment financing program is among the industry's most
comprehensive and that the program is an important component of
our marketing activities. In addition, this service provides us
with an additional source of recurring income.
The financing program is structured to minimize
our risk of loss. We adhere to strict underwriting procedures,
including comprehensive applicant credit analysis (generally
including credit bureau, bank, trade and landlord references,
site analysis including demographics of the location and
multiple year pro-forma cash flow projections), the receipt of
collateral and distributor assistance in remarketing collateral
in the event of default. As a result of these risk management
tools, losses from the program have been minimal. Net write-offs
for equipment loans have averaged approximately 1% for the five
year period ended December 31, 2003, and were less than 1%
for the year ended December 31, 2003.
Research and Development
Our engineering organization was staffed with
over 80 engineers and technical support staff as of
December 31, 2003. Our recent research and development
efforts have focused primarily on continuous improvement in the
reliability, performance, capacity, energy and water
conservation, sound levels and
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regulatory compliance of our commercial laundry
equipment. Our engineers and technical personnel, together with
our marketing and sales personnel, collaborate with our major
customers to redesign and enhance our products to better meet
customer needs. The cumulative research and development spending
exceeded $31.7 million for the period 1999 through 2003. We
have developed numerous proprietary innovations that we utilize
in select products. Over the past four years, we have rolled out
our MicroMaster line of electronically controlled tumblers and
washer-extractors under the Speed Queen® brand, as well as
our CardMate
TM
Plus and NetMaster
TM
debit
card cashless systems designed to replace coin operated
equipment. We believe this array of new products allows us to
continue to be an innovative leader in electronically controlled
equipment. We believe improvements made to existing products and
the introduction of new products have supported our market
leadership position.
Competition
Within the North American stand alone commercial
laundry equipment industry, we compete with several large
competitors. However, we believe that we are the only
participant in the North American stand alone commercial laundry
equipment industry to serve significantly all three customer
groups (laundromats, multi-housing laundries and on-premise
laundries) with a full line of topload washers,
washer-extractors, frontload washers, tumbler dryers and
standard dryers. With respect to laundromats, our principal
competitors include Wascomat (the exclusive North American
distributor of Electrolux AB products), Maytag Corporation and
The Dexter Company. In multi-housing, our principal competitors
include Maytag Corporation and Whirlpool Corporation. In
on-premise laundry, we compete primarily with Pellerin Milnor
Corporation, American Dryer Corporation and Wascomat. We do not
believe that a significant new competitor has entered the North
American stand alone commercial laundry equipment industry
during the last ten years.
Within the drycleaning industry, we compete
primarily with other pressing and finishing equipment and shirt
laundering equipment manufacturers. With respect to pressing and
finishing equipment, our principal competitors include Unipress
Corporation and Forenta, L.P. With respect to shirt laundering
equipment (primarily washer-extractors), our principal
competitors include Wascomat and Pellerin Milnor Corporation.
Manufacturing
We own and operate two manufacturing facilities
located in Ripon, Wisconsin and Marianna, Florida with an
aggregate of more than 830,000 square feet. The facilities
are organized to focus on specific product segments, although
each facility serves multiple customer groups. The Ripon plant
produces our small-chassis topload washers, frontload washers,
small chassis dryers and tumbler dryers. The Marianna plant
produces our large-chassis washer-extractors, presses and
finishing equipment. Our manufacturing plants primarily engage
in fabricating, machining, painting, assembling and finishing
operations. We also operate three product distribution centers
in the United States, all of which we own. We believe that
existing manufacturing facilities provide adequate production
capacity to meet expected product demand.
We purchase substantially all raw materials and
components from a variety of independent suppliers. Key material
inputs for manufacturing processes include motors, stainless and
carbon steels, aluminum castings, electronic controls,
corrugated boxes and plastics. For the majority of raw materials
and components, we believe there are readily available
alternative sources of raw materials from other suppliers. We
have developed long-term relationships with many of our
suppliers and have sourced materials from nine of our ten
largest suppliers for at least five years.
We are committed to achieving continuous
improvement in all aspects of our business in order to maintain
our industry leading position. Both of our manufacturing
facilities are ISO 9001 certified. ISO 9001 is a set
of standards dealing with quality management systems for quality
assurance in design/development, production, installation and
servicing that are published by the International
Standardization Organization.
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Regulations and Laws
Environmental,
Health and Safety Matters
We are subject to comprehensive and frequently
changing federal, state and local environmental and occupational
health and safety laws and regulations, including laws and
regulations governing emissions of air pollutants, discharges of
waste and storm water and the disposal of hazardous wastes. We
are also subject to liability for the investigation and
remediation of environmental contamination (including
contamination caused by other parties) at the properties we own
or operate and at other properties where we or predecessors have
arranged for the disposal of hazardous substances. As a result,
we are involved, from time to time, in administrative and
judicial proceedings and inquires relating to environmental
matters. There can be no assurance that we will not be involved
in such proceedings in the future and that the aggregate amount
of future clean-up costs and other environmental liabilities
will not have a material adverse effect on our business,
financial condition and results of operations. We believe that
our facilities and operations are in material compliance with
all environmental, health and safety laws.
Federal, state and local governments could enact
laws or regulations concerning environmental matters that affect
our operations or facilities or increase the cost of producing,
or otherwise adversely affect the demand for, our products. We
cannot predict the environmental liabilities that may result
from legislation or regulations adopted in the future, the
effect of which could be retroactive. Nor can we predict how
existing or future laws and regulations will be administered or
interpreted or what environmental conditions may be found to
exist at our facilities or at other properties where we or our
predecessors have arranged for the disposal of hazardous
substances.
Certain environmental investigatory and remedial
work is underway or planned at, or relating to, our Ripon,
Wisconsin and Marianna, Florida manufacturing facilities. With
respect to the Ripon facility, this work will be conducted by
us. We currently expect to incur costs of less than $100,000
through 2004 at the Ripon facility to complete remedial work.
There can be no assurance, however, that we will not incur
additional remedial costs in the future with respect to the
Ripon facility. With respect to the Marianna facility, this work
is being conducted by a former owner of the property and is
being funded through an escrow account, the available balance of
which we believe to be substantially greater than remaining
remediation costs. A former owner of the Marianna, Florida
facility has agreed to indemnify us for certain environmental
liabilities. If the former owner fails to honor its obligations
under these indemnifications, we would bear the costs of such
liabilities.
We also received an order in 1995 from the
U.S. Environmental Protection Agency, or EPA, requiring
participation in clean-up activities at the Marina Cliffs site
in South Milwaukee, Wisconsin, the location of a former drum
reconditioner. The EPA asserted that the Ripon facility was a
generator of wastes that were disposed of at the Marina Cliffs
site. The asserted disposal predated our and Raytheon's
ownership of the Ripon facility. We believe that the EPA also
has contacted a prior owner of the facility to assert that the
former owner may be liable. There is an established group of
potentially responsible parties that are conducting a cleanup of
the site. The group has estimated that the cleanup will cost
approximately $5.0 million. The group proposed to settle
their alleged claims against us, and to protect us from further
liability at the site, for approximately $100,000. We declined
the proposal because we believe that the Ripon facility's
prior owner, and not us, is responsible for bearing the costs of
any liability related to the site.
We have met with EPA to explain our defenses to
enforcement of the administrative order. We received a General
Notice of Potential Liability on March 21, 2001, regarding
an additional five acre parcel at the site. We were
informed that Raytheon has settled this matter by paying
$138,672 plus interest from October 31, 2001 in exchange
for an Administrative Order from the EPA. It is our opinion that
the Raytheon settlement and release in the Administrative Order
resolves any liability of Raytheon's former subsidiaries
doing business in Ripon, Wisconsin, and hence any liability that
may have passed to us.
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Other Regulation
In addition to environmental regulation, our
operations are also subject to other U.S. federal, state
and local laws, including those relating to protection of public
health and worker safety.
Employees
We are dependent on the continued services of our
senior management team and certain other key employees. Other
than for Mr. L'Esperance, we do not maintain
employment agreements with our senior management, nor do we
maintain life insurance policies with any key employees.
On December 31, 2003, we had 1,309
employees. Approximately 639 of our employees at our Wisconsin
facilities are represented by The United Steel Workers of
America. In February 2004, the United Steel Workers of America
ratified a new five (5) year labor contract with us.
Included in the new contract is a two-tier wage system which
allows us to hire new assembly workers at a wage approximately
20% below the current assembly wage. The Marianna, Florida
facility is not unionized. There have been no work stoppages at
any of our facilities for more than 30 years. We believe
that current labor relations are good, and no labor disruptions
are anticipated in the foreseeable future.
Properties
The following table sets forth certain
information regarding significant facilities in which we
operated as of December 31, 2003:
Approximate
Location
Function/Products
Square Feet
Owned/Leased
Production Facilities
Ripon, WI
Manufacture small washers and dryers, and tumbler
    dryers
572,900
Owned
Marianna, FL
Manufacture washer-extractors, presses and
    finishing equipment
259,200
Owned
(1)
Subtotal
832,100
Regional Distribution Centers
Ripon, WI
Washers, dryers, tumbler dryers
147,500
Owned
Marianna, FL
Washer-extractors, presses and finishing equipment
33,000
Owned
(1)
Ripon, WI
Service parts
60,800
Owned
Subtotal
241,300
Other
Ripon, WI
Sales and administration
65,700
Owned
Ripon, WI
Engineering and procurement
43,100
Owned
Subtotal
108,800
Total
1,182,200
(1)
We own the Marianna buildings, but we lease the
    land from the city of Marianna.
We believe existing manufacturing facilities
provide adequate production capacity to meet expected product
demand for the foreseeable future.
Litigation
Various claims and legal proceedings generally
incidental to the normal course of business are pending or
threatened against us. While we cannot predict the outcome of
these matters, in the opinion of our management, any liability
arising under these claims and legal proceedings will not have a
material adverse
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effect on our business, financial condition and
results of operations after giving effect to provisions already
recorded.
In September 1999, Juan Carlos Lopez pursued an
arbitration against Alliance Laundry Sociedad Anonima, or ALSA,
a foreign subsidiary of Alliance Laundry Systems LLC, under
UNCITRAL rules in Buenos Aires, Argentina, seeking in pertinent
part, to be paid fees arising from a consulting agreement, and
indemnification for loss of profits in Argentina and Brazil,
plus damages for pain and suffering. An arbitration was
conducted and on April 3, 2001, the arbitration panel
awarded Argentine Pesos 1,408,900 (U.S. $1.4 million at the
time), plus nine percent interest from September 6, 1999,
plus ten percent over this principal and interest amount as
moral damages, plus certain fees and costs, while rejecting
other claims of Mr. Lopez. We believed, based on the advice
of counsel, in as much as ALSA was a foreign subsidiary, ALSA
was responsible for its own debts and obligations and under the
terms of the award, any such payments would have been
forthcoming from the assets of ALSA. On December 20, 2001,
ALSA's bankruptcy was decreed, at the request of
Mr. Lopez, on grounds of non-payment of the arbitration
award. On December 12, 2002, Mr. Lopez filed a lawsuit
with the National Commercial Court Number 13 in Buenos Aires,
Argentina against us for the amount ordered to be paid in the
arbitration, plus unspecified damages caused by the award not
having been timely paid.
Because of the risk this lawsuit presented, we
entered into a Settlement, Release, Discharge and
Indemnification Agreement with Mr. Lopez in July 2003.
While denying any liability whatsoever, we agreed to and paid
Mr. Lopez $736,440 on August 6, 2003 and agreed to
deliver commercial laundry equipment, up to a cost to us of U.S.
$60,000 to Mr. Lopez in Brazil free of charge. In
consideration for such payment and delivery of equipment,
Mr. Lopez released and forever discharged, and waived any
claims or rights of any nature whatsoever against us and a
number of affiliated subsidiary companies. In addition,
Mr. Lopez and his counsels signed the dismissal of the
lawsuit referred to above. A provision for this settlement was
recorded in our 2003 financial statements.
In April 2002 we were named as a defendant in a
lawsuit filed by Imonex Services, Inc. for patent
infringement, arising from a vendor supplied coin selector, the
"W2000", used in certain of our products. The vendor,
W. H. Münzprüfer Dietmar Trenner GmbH, indemnified us
and agreed to pay and is paying for our representation in this
matter. Imonex accused us, and other Münzprüfer
customers, of patent infringement resulting from the sales of
the W2000 within the defendants' products. Trial commenced
January 6, 2003 in the United States District Court for the
Eastern District of Texas. Following the trial, the court
indicated it would enter an order rendering judgment for Imonex
that the asserted patent claims were infringed, are not invalid,
and were not procured by inequitable conduct. The court
indicated it will issue a permanent injunction and invited the
parties to submit proposed injunction languages, and objections
thereto. The court has withheld ruling upon the timelines of
Imonex bringing its damage claims. The court reduced the
jury's damage verdict from $10,350,000 ($5,382,000 against
us with the remainder against the other defendants) against all
defendants, to $490,295 ($267,645 against us with the remainder
against the other defendants) and gave Imonex the option to
accept the reduced damages or have a new trial on damages. On
April 28, 2003, Imonex filed an election for a new
trial on damages, and filed proposed language for the
injunction. The defendants filed their objections to the
injunction language on May 5, 2003. On August 1, 2003,
the court ruled it will not enhance any damages for willful
infringement, but entered judgment for Imonex on the issues of
infringement, and validity of the Imonex's patents. Imonex
submitted expert reports at the new trial on damages which
attempted to prove actual damages of approximately
$16,267,644 million (approximately $6,305,232 million
against us with the remainder against other defendants). On
August 12, 2003 a preliminary injunction was issued
prohibiting W2000 coin selector usage.
The trial on damages commenced August 18,
2003 and yielded a jury verdict of $1,396,873 to Imonex
($614,662 against us with the remainder against the other
defendants) against all defendants.
Final judgment on the August 18, 2003 jury
verdict was rendered on February 9, 2004 against all the
defendants. The final judgment included $614,662 against us,
plus prejudgment interest, yielding $771,728 against us. In
addition, the judgment awarded court costs to Imonex, including
attorneys' fees. On
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February 23, 2004, Imonex submitted an
application seeking from all the defendants a total of $669,107
in attorneys' fees and $133,214 in court costs. The
preliminary injunction of August 12, 2003 was made
permanent. The defendants have filed a post judgment motion
seeking to have the judgment amended or set aside.
The plaintiff has filed a Notice of Appeal and
the Court of Appeals for the Federal Circuit has set the date of
docketing at March 16, 2004. The defendants have filed
cross-appeals.
Our position remains that any liability related
to this lawsuit is properly borne by Münzprüfer. We
believe that Münzprüfer has the ability to fully
satisfy its indemnification obligations up to the amount of the
final judgment. We have also reached tentative agreement with
Münzprüfer as to acceptable methods of satisfying the
provisions of the indemnification agreement, in the event the
judgment is not appealed, or is not overturned upon appeal. In
accordance with GAAP, as a judgment has been rendered by the
court, we have separately recorded an appropriate payable to
Imonex related to our liability and a corresponding receivable
balance from Münzprüfer within our December 31,
2003 financial statements.
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Management
Directors and Executive Officers
Our directors and executive officers as
of                     are
as follows:
Name
Age
Position
Thomas F. L'Esperance
55
Chief Executive Officer and Director
Jeffrey J. Brothers
57
Senior Vice President, Sales and Marketing
Bruce P. Rounds
47
Vice President, Chief Financial Officer
William J. Przybysz
59
Vice President, General Manager Marianna
    Operations
R. Scott Gaster
51
Vice President, General Manager Ripon Operations
Robert T. Wallace
48
Vice President, Corporate Controller
Scott L. Spiller
53
Vice President, Law and Human Resources
Edward W. Conard
47
Director
Robert C. Gay
52
Director
Stephen M. Zide
44
Director
Stephen C. Sherrill
51
Director
Thomas F. L'Esperance
serves as a Director. He has been our
Chief Executive Officer since March 1996. He had served as
President of the Amana Home Appliance Company from 1993 to 1996
and was President of Caloric Corporation, a manufacturer of
appliances, for two years prior to 1993. Prior to that time,
Mr. L'Esperance held several executive management
positions with Raytheon.
Jeffrey J. Brothers
has been our Senior Vice President of
Sales and Marketing since October 1989. He has been employed
with us since 1977. Mr. Brothers has been involved in sales
for us since 1983 and has held other positions such as Manager
of Distribution Development, Plant Controller and Financial
Analyst.
Bruce P. Rounds
joined us in 1989 as Vice President of
Finance and was promoted to his current position in February
1998. He held the position of Vice President, Business
Development, from 1996 to 1998. Before joining us, he served in
a variety of capacities for eight years at Mueller Company and
for three years with Price Waterhouse. He is a Certified Public
Accountant.
William J. Przybysz
rejoined us in May 2000 as Vice
President, General Manager Marianna, Florida operations.
Previously he had been with us as Vice President of Logistics
and Material from 1990 through 1993. From 1993 through February
of 2000 he was the Vice President and General Manager of Amana
Central Heating and Air Conditioning Division based in
Fayetteville, Tennessee. Mr. Przybysz's prior
experience includes ten years in various management positions
with Whirlpool Corporation and eight years of management
experience with Wheelhorse Products (since acquired by The Toro
Company).
R. Scott Gaster
joined us as Vice President,
Procurement and Materials, in June 1995. He became the Vice
President of Washer and Dryer Operations in July 1997 and
Tumbler Operations in August 1998. In December of 2003
Mr. Gaster was promoted to Vice President, General Manager
Ripon Operations. Mr. Gaster has also retained his former
purchasing responsibilities. Prior to joining us, he was
employed by GKN Automotive, Inc. from 1979 to 1995 in such
positions as Director of Procurement and Logistics, Corporate
Purchasing Agent and Purchasing Manager.
Robert T. Wallace
has been our Vice President, Corporate
Controller since June 1996. He held positions as Controller and
Manager-Reporting and Analysis for us from 1990 to 1996.
Mr. Wallace's previous experience includes two years
as Controller of Alcolac (chemicals), four years as Manager of
Reporting and Analysis with Mueller Company, five years with
Ohmeda and two years with Price Waterhouse. He is a certified
public accountant.
Scott L. Spiller
has
been our Vice President of Law & Human Resources, and
General Counsel since February 1998. From April 1996 to February
1998, Mr. Spiller was practicing law as a sole
practitioner. Prior to that, he was our General Counsel and
Secretary for ten years.
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Edward W. Conard
serves as a Director. He has been a
Managing Director of Bain Capital Partners, LLC, or BCP, since
March 1993. From 1990 to 1992, Mr. Conard was a director of
Wasserstein Perella, an investment banking firm that specializes
in mergers and acquisitions. Previously, he was a Vice President
of Bain & Company, where he headed the management
consulting firm's operations practice area. Mr. Conard
also serves as a director of Waters Corporation, ChipPac, US
Synthetic, Unisource Worldwide, Inc. and Broder Brothers.
Robert C. Gay
serves
as a Director. Mr. Gay has been a Managing Director of BCP
since 1993 and has been a General Partner of Bain Venture
Capital since 1989. From 1988 through 1989, Mr. Gay was a
Principal of Bain Venture Capital. Mr. Gay is a member of
the Supervisory Board of Buhrmann/ Corporate Express and the
Vice Chairman of the Board of Directors of Icon
Health & Fitness. He also serves as a Director of
Bocchi Laboratories, DIC Entertainment, Nutraceutical, Walco,
Maxim Crane and U.S. Synthetics.
Stephen M. Zide
serves as a Director. Mr. Zide
has been a Managing Director of BCP since 2001. From 2000 to
2001, Mr. Zide was a Principal of BCP. From 1998 through
2000, Mr. Zide was a Managing Director of Pacific Equity
Partners. Previously, he was a Principal of BCP and a Partner at
the law firm of Kirkland & Ellis. Mr. Zide also
serves as a director of Keystone Automotive Operations, Broder
Brothers and Maxim Crane Works.
Stephen C. Sherrill
serves as a Director.
Mr. Sherrill is a Managing Director of Bruckmann, Rosser,
Sherrill & Co. Mr. Sherrill was an officer of
Citicorp Venture Capital, Ltd. from 1983 through 1994.
Mr. Sherrill is a Director of Remington Arms, Inc.,
B & G Foods, Inc. and Doane Pet Care
Enterprises, Inc.
Executive Compensation
The following table sets forth information
concerning the annual and long-term compensation for services in
all capacities to our or our predecessor for the last three
completed fiscal years of those persons who served as
(i) the chief executive officer during 2003 and
(ii) our other four most highly compensated executive
officers for 2003:
Summary Compensation Table
Annual Compensation
Other Annual
Name and Principal Position
Year
Salary($)
Bonus($)
Compensation($)
Thomas F. L'Esperance
2003
318,360
481,706
19,560
(1)
Chief Executive Officer
2002
293,424
285,422
16,448
(1)
2001
284,880
285,422
12,100
(1)
William J. Przybysz
2003
167,904
96,199
–
VP and General Manager,
2002
158,275
57,000
–
Marianna Operations
2001
153,500
50,124
–
R. Scott Gaster
2003
166,309
87,842
8,405
(1)
VP, Washer, Dryer and Tumbler
2002
153,060
52,048
11,185
(1)
Operations
2001
144,464
52,048
7,263
(1)
Jeffrey J. Brothers
2003
159,466
85,625
12,582
(1)
Senior VP, Sales and Marketing
2002
142,812
50,735
10,298
(1)
2001
138,516
50,735
7,140
(1)
Bruce P. Rounds
2003
158,304
83,432
8,082
(1)
VP, Chief Financial Officer
2002
140,475
49,435
10,118
(1)
2001
135,942
49,435
7,560
(1)
(1)
Represents gross-up amounts paid for
    non-deductible fringe benefits provided by us.
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Employment Agreement
Alliance Laundry entered into an employment
agreement with Thomas F. L'Esperance, which was amended on
July 23, 2003 to renew for additional one year periods from
May 4, 2003 forward, unless we or Mr. L'Esperance
provides written notice not to renew the agreement. Such
agreement provides for: (i) a minimum base salary and
participation in an annual bonus program so long as we employ
Mr. L'Esperance; (ii) severance benefits;
(iii) non-competition, non-solicitation and confidentiality
agreements; and (iv) other terms and conditions of
Mr. L'Esperance's employment.
Deferred Compensation Agreement
In May 1998, Raytheon, Alliance Laundry and
Alliance Holdings entered into deferred compensation agreements
with certain of our executive officers, including
Mr. L'Esperance, Mr. Gaster, Mr. Brothers
and Mr. Rounds whereby we assumed certain long-term
compensation obligations earned by management under programs
established by Raytheon. Such agreements provide for the
deferral of compensation until the earlier of (i) the
payment of a lump sum benefit amount to each such executive
officer ten years after the date of such agreement, regardless
of whether such executive officer is employed by us as of such
date or (ii) the payment of the benefit amount upon the
occurrence of certain events described therein.
In addition, we have established the Alliance
Laundry Holdings LLC Nonqualified Deferred Compensation Plan.
This plan provides certain eligible employees and members with
the opportunity to defer portions of their base salary, bonus
payments and other payments in accordance with the provisions of
the plan.
Pension Plan
Substantially all of our eligible salaried
employees, including our executive officers, are covered under
the Alliance Laundry Systems Pension Plan. The cost of the
pension plan is borne entirely by us. The pension plan is a
defined benefit cash balance plan. Under this plan, an account
is established for each participant in which pay credits and
interest credits are earned as the participant provides service.
Pay credits are calculated as a percentage of the
participant's remuneration adjusted for age and years of
service in accordance with the following table:
Pension Plan Pay Credits Table
Base Remuneration
Total of Age and Years of Service
Credit Rates
Less than 45
3.0
%
45 but less than 50
3.5
%
50 but less than 55
4.0
%
55 but less than 60
4.5
%
60 but less than 65
5.0
%
65 but less than 75
6.0
%
75 but less than 85
7.0
%
85 or more
8.0
%
In addition, a supplemental pay credit is earned
on remuneration in excess of $54,370 (indexed for years after
2002) at the lesser of 5% or the percentage used per the above
table. A participant's account also increases for interest
credits each year. Interest credits are earned at the rate of a
one-year Treasury Bill as of the last day of the prior plan year
plus 1%, which was 2.26% for 2003. The amount of earnings that
can be recognized for plan purposes is limited by the IRS to
$200,000 in 2003. A participant vests in his benefits accrued
under the pension plan after five years of service.
Respective years of benefit service under the
pension plan, through December 31, 2003, are as follows:
Mr. L'Esperance 5; Mr. Przybysz 3;
Mr. Gaster 7; Mr. Brothers 24 and Mr. Rounds 14.
Mr. L'Esperance was covered under Raytheon plans
through April 1998, at which time he became a participant under
our pension plan.
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Savings Plan
Substantially all of the salaried employees,
including our executive officers, participate in our ALCAP
401(k) plan. Employees are permitted to defer a portion of their
income under this plan and we will provide a matching
contribution equal to 50% of the first 6% of the employee's
contribution.
Compensation of Directors
We will reimburse members of our board of
directors for any out-of-pocket expenses incurred by them in
connection with services provided in such capacity. In addition,
we may compensate directors for services provided in such
capacity.
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Principal and Selling Stockholders
The following table shows information regarding
the beneficial ownership of shares of our Class A common
stock, Class B common stock and preferred stock immediately
prior to and immediately after the completion of this offering
and shows the number of and percentage owned by:
•
each person who is known by us to own
    beneficially more than 5% of either class of our capital stock;
•
each member of our board of directors;
•
each of our named executive officers;
•
each of our nominees to our board of
    directors; and
•
all members of our board of directors and our
    executive officers as a group.
Both prior to and after completion of this
offering, there will be no shares of Class C common stock
outstanding. Except as indicated in the footnotes to this table,
each person has sole voting and investment power with respect to
all shares attributable to such person.
Shares Beneficially Owned
Class A
Class B
Preferred
prior to offering
after offering
prior to offering
after offering
prior to offering
after offering
Number
%
Number
%
Number
%
Number
%
Number
%
Number
%
Bain Funds(1)(2)
BRS Investors(3)
Management Investors(4)
Edward W. Conard(1)(2)(5)
Robert C. Gay(1)(2)(5)
Stephen C. Sherrill(3)(6)
Stephen M. Zide(1)(2)(5)
Thomas F. L'Esperance(4)
William J. Przybysz(4)
R. Scott Gaster(4)
Jeffrey J. Brothers(4)
Bruce P. Rounds(4)
All directors and executive
officers as a group(1)(2)(3)(4)
(1)
Amounts shown reflect interests in Bain/ RCL,
    L.L.C. which beneficially owns 60.1% of the outstanding common
    membership interests of Alliance Laundry through its ownership
    of Class A and Class L membership units in Alliance
    Holdings. The address of each such person and/or entity is c/o
    Bain Capital Partners, LLC, 111 Huntington Avenue, Boston, MA
    02199.
(2)
Amounts shown reflect the aggregate interests
    held by Bain Capital Fund V, L.P.
    ("Fund V"), BCIP Trust Associates II-B
    ("BCIP Trust II-B"), BCIP Associates II
    ("BCIP") and BCIP Associates II-B
    ("BCIP II-B") (collectively, the "Bain
    Funds"), for the Bain Funds and Messrs. Conard, Gay
    and Zide.
(3)
Amounts shown reflect the aggregate interests
    held by Bruckmann, Rosser, Sherrill & Co., L.P.
    ("BRS"), BCB Family Partners, L.P., NAZ Family
    Partners, L.P., Paul D. Kaminski, Bruce C. Bruckmann,
    Donald J. Bruckmann, Harold O. Rosser, Stephen C.
    Sherrill, H. Virgil Sherrill, Nancy A. Zweng, John
    Rice Edmonds, Susan Kaider, Marilena Tibrea, Walker C.
    Simmons, Beverly Place, Elizabeth McShane and MLPF&S
    Custodian FBO Paul Kaminski (collectively, the "BRS
    Investors"). The address of each such person and/or entity
    is c/o Bruckmann, Rosser, Sherrill & Co., L.P., 126 East
    56th Street, 29th Floor, New York, NY 10022.
(4)
Includes Class A and Class L membership
    units in Alliance Holdings but excludes Class B and
    Class C membership units which are subject to vesting and
    generally have no voting rights, representing on a fully diluted
    basis approximately 14.7% of Alliance Holdings' membership
    units for the management investors, 4.3% for
    Mr. L'Esperance, 0.8% for Mr. Przybysz, 1.7% for
    Mr. Gaster, 1.9% for Mr. Brothers and 1.7% for
    Mr. Rounds. The address of each such person is c/o Alliance
    Laundry Systems LLC, P.O. Box 990, Ripon, WI 54971-0990.
(5)
Messrs. Conard, Gay and Zide are each
    Managing Directors and/or members of Bain Capital Investors LLC,
    the managing partner of BCIP, BCIP II-B, BCIP Trust and
    BCIP Trust II-B and the sole general partner of Bain
    Capital Partners V, L.P. ("BCPV"), and are
    limited partners of BCPV, the sole general partner of
    Fund V. Accordingly Messrs. Conard, Gay and Zide
    may be deemed to beneficially own the interests owned by
    Fund V. Messrs. Conard, Gay and Zide, and entities
    affiliated with them, are each general partners of BCIP,
    BCIP II-B, BCIP Trust and BCIP Trust II-B and,
    accordingly, may be deemed to beneficially own the interests
    owned by BCIP, BCIP II-B, BCIP Trust and BCIP
    Trust II-B. Each such person disclaims beneficial ownership
    of any such shares in which he does not have a pecuniary
    interest.
(6)
Mr. Sherrill is a director of BRSE
    Associates, Inc., the sole general partner of BRS Partners,
    L.P., and the sole general partner of BRS and, accordingly, may
    be deemed to beneficially own the interests owned by BRS.
    Mr. Sherrill disclaims beneficial ownership of any such
    shares in which he does not have a pecuniary interest.
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Related Party Transactions
Securityholders Agreement
In May 1998, Alliance Holdings, Raytheon and our
securityholders entered into a securityholders agreement. The
securityholders agreement: (i) restricts the transfer of
the equity interests of Alliance Holdings; (ii) grants
tag-along rights on certain transfers of equity interests of
Alliance Holdings; (iii) requires the securityholders to
consent to a sale of Alliance Holdings to an independent third
party if such sale is approved by certain holders of the then
outstanding equity interests of Alliance Holdings; and
(iv) grants preemptive rights on certain issuances of
equity interests of Alliance Holdings. Certain of the foregoing
provisions of the securityholders agreement will terminate upon
the consummation of an initial public offering or a liquidity
event (each as defined in the securityholders agreement). We
will terminate this agreement upon the closing of this offering.
Management Services Agreement
In May 1998, Alliance Laundry entered into a
management services agreement with Bain/RCL, L.L.C., an
investment group led by BRS/ RCL Investment Corp. and members of
our management, pursuant to which Bain/RCL, L.L.C. agreed to
provide: (i) general executive and management services;
(ii) identification, support, negotiation and analysis of
acquisitions and dispositions; (iii) support, negotiation
and analysis of financial alternatives; and (iv) other
services agreed upon by Alliance Laundry and Bain/RCL, L.L.C. In
exchange for such services, Bain/RCL, L.L.C. will receive
(i) an annual management fee of $1.0 million, plus
reasonable out-of-pocket expenses (payable quarterly) and
(ii) a transaction fee in an amount in accordance with the
general practices of Bain/RCL, L.L.C. at the time of the
consummation of any additional acquisition or divestiture by
Alliance Laundry and of each financing or refinancing (currently
approximately 1.0% of total financings). Pursuant to the
management services agreement, in 2002 transaction fees of
$3.5 million were paid with respect to the existing senior
credit facility and the asset backed facility. The management
services agreement has an initial term of ten years subject to
automatic one-year extensions unless Alliance Laundry or
Bain/RCL, L.L.C. provides written notice of termination. We will
terminate this agreement upon the closing of this offering.
Registration Rights Agreement
In May 1998, Alliance Holdings, Raytheon and our
securityholders, entered into a registration rights agreement.
Under the registration rights agreement, the holders of a
majority of the Registrable Securities (as defined in the
registration rights agreement) owned by Bain/RCL, L.L.C. have
the right, subject to certain conditions, to require us to
register any or all of their common equity interests of Alliance
Holdings under the Securities Act at our expense. In addition,
all holders of Registrable Securities are entitled to request
the inclusion of any common equity interests of Alliance
Holdings subject to the registration rights agreement in any
registration statement at our expense whenever we propose to
register any of our common equity interests under the Securities
Act. In connection with all such registrations, we have agreed
to indemnify all holders of Registrable Securities against
certain liabilities, including liabilities under the Securities
Act.
Junior Subordinated Promissory Notes
In May 1998, we issued a junior subordinated
promissory note in the principal amount of $9.0 million due
August 21, 2009, to Raytheon. In September 2003,
Raytheon sold all of its debt and equity interests in us to a
group of investors consisting of affiliates of TCW and Sankaty.
As a result of this transaction, the junior note issued to
Raytheon was cancelled and new junior notes were issued under
the same terms and conditions as for Raytheon. Raytheon had
formerly been our parent prior to May 1998. The affiliates of
Sankaty are affiliates of Bain/RCL, L.L.C. which, before the
sale from Raytheon, owned 55.9% of the outstanding common
membership interests of Alliance Holdings. Pursuant to the terms
of the junior notes, interest accrues at the rate of
19.0% per annum until the eighth anniversary of the date of
issuance of the junior note and at a rate of 13.0% thereafter.
The junior notes are subordinated in priority and subject in
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right and priority of payment to certain
indebtedness described therein. We will repay the junior notes
with the proceeds of this offering.
Seller Preferred Equity
In May 1998, we issued mandatorily redeemable
preferred membership interests with a liquidation value of
$6.0 million to Raytheon. In September 2003, these
preferred membership interest were sold to affiliates of TCW and
Sankaty. These preferred membership interests do not accrete,
accrue or pay dividends and are redeemable at the earlier of
(i) a Change of Control (as defined therein), (ii) any
initial public offering or (iii) 2009. The holders of these
preferred membership interests are entitled to receive
distributions from us in an amount equal to their Unreturned
Capital (as defined therein) prior to distributions in respect
of any other membership interests of Alliance Holdings.
Management Investor Promissory Notes
In May 1998, we entered into promissory notes
aggregating approximately $1.8 million with certain members
of management to help finance the purchase of common units in
Alliance Holdings. These promissory notes bear interest at a
rate of 5.94% per annum and mature on June 5, 2008.
Executive Unit Purchase Agreements
Certain members of our management have entered
into executive unit purchase agreements which govern these
executives' investments in the common membership interests
of Alliance Holdings.
The purchase agreements provide us with a
repurchase option upon the termination of each executive. If the
executive's termination is the result of death, permanent
disability or without cause, as defined, Class A or
Class L Units, and vested Class M, Class B and
Class C Units may be repurchased by us at a price per unit
equal to fair market value, as defined, and unvested Class M,
Class B and Class C Units may be repurchased at a
price per unit equal to the lower of fair market value or
original value, as defined. If an executive's termination
is voluntary or for cause, as defined, all units may be
repurchased at a price equal to the lower of fair market value
or original value, unless an executive's voluntary
termination occurs seven and one-half years from May 5,
1998, in which case the repurchase price shall be fair market
value. The Class M, Class B and Class C Units
were purchased by the executives at a nominal value based upon
the subordinated nature of such interests.
Management Fees
Bain provides management services to us. In
return for these services we paid management fees of
approximately $1.01 million, $1.02 million,
$1.02 million, $1.03 million and $1.02 million,
respectively, to affiliates of Bain in each of fiscal 1999,
2000, 2001, 2002 and 2003, respectively. We will cease paying
these fees upon the closing of this offering. In addition, we
will use a portion of the proceeds of this offering to pay
$        million to
affiliates of Bain for a one-time, non-recurring transaction fee
in connection with our reorganization and this offering.
Investor Rights Agreement
We will enter into an investor rights agreement
with the existing equity investors and certain members of
management pursuant to which upon any sale of shares of
Class B common stock together with shares of preferred
stock following the second anniversary of the consummation of
this offering, at the option of the holder of such shares, we
will exchange with the purchaser of such shares one IDS for each
share of Class B common stock together with one share of
preferred stock (as may be adjusted for stock splits, dividends,
combinations or reclassifications).
As a condition to any sale of shares of
Class B common stock together with preferred stock
involving an election to require us to issue IDSs in exchange
for such shares:
•
such sale and exchange must comply with
    applicable laws, including, without limitation, securities laws,
    laws relating to redemption of common stock and laws relating to
    the issuance of debt;
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•
such sale and exchange must occur pursuant to an
    effective registration statement in the United States;
•
such sale and exchange must not conflict with or
    cause a default under any material financing agreement;
•
such sale and 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 sale and exchange date;
•
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; and
•
the selling stockholder must have given us at
    least 30 but not more than 60 days advance notice of such
    transaction.
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 bylaws 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
one share of Class A common stock and each share of
preferred stock will be automatically exchanged for one senior
subordinated note.
In addition, the investor rights agreement will
contain the following registration rights:
•
our existing equity investors 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 and preferred
    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
    $           million;
    provided that an equity sponsor must beneficially own more than
    one percent of our outstanding shares of Class A common
    stock, Class B common stock, preferred stock, senior
    subordinated notes, or IDSs, as the case may be, to initiate a
    demand for registration; provided, further, that an equity
    sponsor may exercise a demand right for less than an aggregate
    public offering price of
    $           million
    if such proposed offering is for all of the remaining shares of
    Class A common stock, senior subordinated notes or IDSs
    held by the equity sponsor; and
•
the existing equity investors will have the right
    to include in our future public offerings of securities 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 and preferred
    stock may be exchanged.
The existing equity investors 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 American Stock Exchange. If the existing equity
investors 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
equity investors. The registration rights are transferable by
the existing equity investors.
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 equity investors 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 and preferred stock prior to
the second anniversary of the consummation of this offering.
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Description of Certain Indebtedness
Existing Indebtedness
Existing Senior Credit Facility
Our existing senior credit facility is comprised
of a term loan facility aggregating $193.0 million and a
five year $45.0 million revolving credit facility. The
existing senior credit facility was entered into to refinance a
prior senior credit facility. As of December 31, 2003,
$157.0 million was outstanding under the existing senior
credit facility. We will repay all amounts outstanding under the
existing senior credit facility with the proceeds of the
offering received by us, to the extent any indebtedness remains
after application of the initial advance under the new credit
facility.
Senior Subordinated Notes
We and Alliance Laundry, issued
$110.0 million of 9 5/8% Senior Subordinated
Notes due in 2008. In conjunction with this offering, we intend
to commence an offer to purchase any and all of our senior
subordinated notes with the proceeds of this offering. The
closing of the offer to purchase will be conditional upon the
receipt, through the offer to purchase, of senior subordinated
notes representing at least a majority of the aggregate
principal amount of such notes and the closing of this offering.
We intend to acquire or redeem all or a significant portion of
the senior subordinated notes through this offer.
Junior Subordinated Promissory Notes
On May 5, 1998, we issued a junior
subordinated promissory note in the principal amount of
$9.0 million, plus accrued interest, due August 21,
2009, to Raytheon. In connection with Raytheon's sale of
its debt and equity interests to a group of investors consisting
of affiliates of each of TCW and Sankaty in September 2003, the
junior note was cancelled and new junior notes were issued under
the same terms and conditions as for Raytheon. To the extent
that any proceeds remain after repaying other existing
indebtedness and paying other transaction fees and expenses, we
will repay amounts outstanding under the junior notes with the
proceeds of the offering. As of December 31, 2003,
$24.2 million was outstanding under the junior notes.
Preferred Interests
On May 5, 1998, we issued mandatorily
redeemable preferred membership interests to Raytheon. In
September 2003, these preferred membership interests were sold
to affiliates of each of TCW and Sankaty. These preferred
membership interests are redeemable at a redemption price of
$6.0 million upon a change of control or certain other
liquidity events. To the extent that any proceeds remain after
repaying other existing indebtedness and paying other
transaction fees and expenses, we may redeem these preferred
membership interests with the proceeds of the offering.
Other Debt
We will also repay certain other indebtedness
with the proceeds of the offering.
Securitization
Facilities
Alliance Laundry Equipment Receivables
2002.
On November 26, 2002,
through a newly-formed special-purpose bankruptcy remote
subsidiary, Alliance Laundry Equipment Receivables 2002 LLC, or
ALER 2002, and a trust, Alliance Laundry Equipment Receivables
Trust 2002-A, or ALERT 2002A, we entered into an asset backed
facility consisting of a $300.0 million revolving facility,
backed by equipment loans and trade receivables originated by
us. During the first three years of the asset backed facility,
we are permitted, from time to time, to sell our trade
receivables and certain equipment loans to the special purpose
subsidiary, which in turn will transfer them to the trust. The
trust finances the acquisition of the trade receivables and
equipment loans through borrowings under the asset backed
facility, which are limited to an advance rate of approximately
95% for equipment loans and between 60% and 70% for trade
receivables. Funding availability for trade receivables is
limited to a maximum of $60.0 million, while
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funding for equipment loans is limited at
$300.0 million less the amount of funding outstanding for
trade receivables. Funding for the trade receivables and
equipment loans is subject to certain eligibility criteria,
including concentration and other limits, standard for
transactions of this type. After three years from the closing
date, which is December 2, 2005, (or earlier in the event
of a rapid amortization event or an event of default), the trust
will not be permitted to request new borrowings under the
facility and the outstanding borrowings will amortize over a
period of up to nine years thereafter. As of December 31,
2003, the balance of variable funding notes due to lenders under
the asset backed facility for equipment loans was
$187.8 million.
The asset backed facility replaces a similar
facility previously maintained with Lehman Commercial
Paper, Inc. and referred to as the ALRW Facility. In
connection with the establishment of our new asset backed
facility, we, through our special-purpose subsidiaries
repurchased and simultaneously resold the assets held by the
ALRW Facility to the new asset backed facility. Included in 2002
commercial laundry revenue is a gain of approximately
$2.0 million related to these transactions, essentially
reflecting the sale of notes receivable under the asset backed
facility and the recognition of previously unrealized gains
related to retained interests in the ALRW Facility. For risks
associated with the asset backed facility, see "Risk
Factors — Risks Relating to Our Business and the
Industry."
Alliance Laundry Equipment
Receivables.
Pursuant to the terms of
the ALRW Facility, a trust formed by a special-purpose
bankruptcy remote subsidiary of ours issued $128.2 million
of equipment loan-backed notes effective November 28, 2000.
The principal source of payments on the notes is collections on
the $137.8 million pool of equipment loans transferred to
the trust by us. As a result, the outstanding amount of these
notes declines substantially in tandem with the amount of
outstanding equipment loans in the pool. All of the residual
equity interests in the trust and cash flows remaining from the
pool after required payments on the notes accrue to the benefit
of us. We are also paid a monthly servicing fee equal to
one-twelfth of 1.0% of the aggregate balance of loans held by
the trust. At December 31, 2003 and 2002, we have recorded
$5.1 million and $7.6 million, respectively, related
to the estimated fair value of our beneficial interests in the
notes sold to the trust.
New Credit Facility
Alliance Laundry intends to enter into a
$           new
secured credit facility with a syndicate of financial
institutions, including affiliates of CIBC World Markets Corp.
and Lehman Brothers Inc. as joint lead arrangers and joint book
managers.
We expect that the new credit facility will be
comprised of a senior secured revolving credit facility of up to
$           million,
which we refer to as the "new revolver," and a senior
secured term loan facility in an aggregate principal amount of
$           million,
which we refer to as the "new term loan."
We expect that the new revolver and the new term
loan will each have
a           -year
maturity.
We expect that the new credit facility will have
several features similar to credit facilities of this nature,
including but not limited to:
Interest Rate and
Fees.
We expect that borrowings will
bear interest, at our option, for the new revolver facility and
the new term facility at either (a) the Eurodollar Rate
plus an applicable margin or (b) the Base Rate plus an
applicable margin, as such terms will be defined in the new
credit facility.
We also expect the new revolver will provide
payment to the lenders of a commitment fee on any unused
commitments equal to      % per
annum.
Voluntary
Prepayments.
We expect that the new
credit facility will provide for voluntary commitment reductions
and prepayments of the new revolver and new senior notes,
respectively, subject to certain conditions and restrictions.
Covenants.
We expect
that the new credit facility will require that we meet certain
financial tests.
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We also expect that our new credit facility will
contain customary covenants and restrictions, including, among
others, limitations or prohibitions on declaring and paying
dividends and other distributions, redeeming and repurchasing
our other indebtedness, loans and investments, additional
indebtedness, liens, recapitalizations, mergers, acquisitions
and asset sales and transactions with affiliates.
Guarantees.
We
expect that the new credit facility will be guaranteed on a
senior secured basis by us and by all of Alliance Laundry's
direct and indirect wholly-owned domestic subsidiaries (other
than ALER 2002 and ALERT 2002A).
Collateral.
We
expect to give to the administrative agent on behalf of each
lender a security interest in collateral consisting of, without
limitation, a pledge of our intercompany debt, 100% of the
capital stock of our wholly-owned domestic subsidiaries and a
security interest in substantially all our other personal
property.
Events of Default.
We expect that our new credit facility will specify certain
customary events of default.
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Description of IDSs
General
We are
offering                     IDSs.
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,
recombination 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 recombination 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 recombined or reclassified basis,
as applicable, and the same principal amount of senior
subordinated notes as it previously represented. Immediately
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 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.
The IDSs will be available in book-entry form
only. As discussed below under "Book-Entry Settlement and
Clearance," a nominee of the book-entry clearing system
will be the sole registered holder of the IDSs. That means you
will not be a registered holder of IDSs or be entitled to
receive a certificate evidencing your IDSs. You must rely on the
procedures used by 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.
Voluntary Separation and
Recombination
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 the continuance of a payment default on the senior
subordinated notes for 90 days, or the redemption or
maturity of any senior subordinated notes, any holder of shares
of our 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 senior subordinated notes to form
IDSs.
If a sufficient number of shares of our
Class A common stock are held separately (not in the form
of IDSs) to meet the minimum requirements for separate trading
on the American Stock Exchange or any other exchange or
quotation system on which the IDSs are then listed (or were
previously listed) for at least 30 consecutive trading
days, we have agreed that we will use reasonable efforts to
cause the Class A common stock to be listed on the American
Stock Exchange or any other exchange or quotation system on
which the IDSs are then listed (or were previously listed).
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Automatic Separation
Upon the occurrence of any of the following, all
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 DTC is unwilling or unable to continue as
    securities depository with respect to the IDSs 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 as
a result of the continuance of a payment default on the senior
subordinated notes for 90 days, or the redemption or
maturity of any senior subordinated notes, 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 to convert the Class B
common stock and preferred stock to Class A common stock
and senior subordinated notes.
Book-Entry Settlement and Clearance
DTC will act as securities depository for the
IDSs, and the senior subordinated notes and shares of
Class A common stock represented by the IDSs, or the
"securities." The senior subordinated notes and the
shares of our Class A common stock represented by the IDSs
will be represented by one or more global notes and global stock
certificates. The global notes and global stock certificates
will be issued in fully-registered form in the name of
DTC's nominee, Cede & Co.
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. Beneficial owners will not receive written confirmation
from DTC of their purchases, but beneficial owners are expected
to receive written confirmations providing details of their
purchase and sale transactions, as well as periodic statements
of their holdings, from the DTC participant through which the
beneficial owner entered into their purchase and sale
transactions.
All interests in the securities will be subject
to the operations and procedures of DTC. We provide the
following summary of DTC's operations solely for your
convenience. The operations and procedures of DTC may be changed
at any time. We are not responsible for those procedures and
operations.
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
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
securities deposited by direct participants with DTC are
registered in the name of DTC's nominee, Cede &
Co. The deposit of securities with DTC and their registration in
the
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name of Cede & Co. 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 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, unless
the IDSs have previously been automatically separated as a
result of the continuance of a payment default on the senior
subordinated notes for 90 days, or the redemption or
maturity of any senior subordinated notes, 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, the 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 date or upon acceleration thereof, or
•
if DTC is unwilling or unable to continue as
    securities depository with respect to the IDSs 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 as
a result of the continuance of a payment default on the senior
subordinated notes for 90 days, or the redemption or
maturity of any senior subordinated notes, 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 to convert the Class B
common stock and the preferred stock to common stock and senior
subordinated notes.
Any voluntary or automatic separation of IDSs and
any subsequent combination of IDSs from senior subordinated
notes and Class A common stock are to be accomplished by
entries made by the DTC participants acting on behalf of
beneficial owners. In any such case, the participant's
account through which a separation or combination is effected
will be credited and debited for the applicable securities on
DTC's records. Depending on the arrangements between a
holder and his or her brokerage firm, and the brokerage
arrangements with the DTC participant, the transaction fee for
any voluntary separation or recombination may be passed directly
on to the holder.
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 securities. 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.
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We and the transfer agent and registrar will make
any payments on the securities 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 or the transfer agent and registrar will be
responsible for the payment of all amounts 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.
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 or 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 identical to the senior subordinated notes represented by
the IDSs except for the issuance date, if we determine that such
new senior subordinated notes need to have a new CUSIP number,
each holder of senior subordinated notes or IDSs (as the case
may be) agrees that a portion of such holder's senior
subordinated notes (whether held directly in book-entry form or
held as part of IDSs) will be exchanged, without any further
action of such holder, for a portion of the senior subordinated
notes acquired by the holders of such subsequently issued senior
subordinated notes. Consequently, following each such subsequent
issuance and exchange, each holder of senior subordinated notes
or IDSs (as the case may be) will own an indivisible unit
composed of senior subordinated notes of each separate issuance
in the same proportion as each other holder. 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
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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
with a position in the securities will be automatically revised
to reflect the new CUSIP numbers.
Most subsequent issuances of senior subordinated
notes, including subsequent issuances of senior subordinated
notes which have OID and all subsequent issuances 180 days after
the date of this offering, may require trades on
the                     to
settle up to 24 hours after the date such trades would
settle absent such subsequent issuance or settle for cash,
consistent with such exchange's practices for the date of
such issuance.
The                     has
informed us that they will broadcast any such alternate
settlement procedures in advance of any relevant trading day,
consistent with their established procedures. Based upon these
discussions, we do not believe that any settlement delays or
cash settlement procedures, if any, associated with subsequent
issuances will have a significant impact on the IDS trading
market. Immediately 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
The Bank of New York is the IDS transfer
agent.
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Description of Capital Stock
The following is a description of the terms of
our amended and restated certificate of incorporation and
by-laws, the forms of which have been filed with the Securities
and Exchange Commission, or SEC, as exhibits to the registration
statement of which this prospectus is part and which will become
effective prior to the offering contemplated by this prospectus.
Authorized Capitalization
Our authorized capital stock consists of:
•
shares
    of Class A common stock, par value $0.01 per share;
•
shares
    of Class B common stock, par value $0.01 per share;
•
shares
    of Class C common stock, par value $0.01 per
    share; and
•
shares
    of preferred stock, par value $0.01 per share.
After this offering there will
be                      shares
of our Class A common
stock,                      shares
of our Class B common stock, no shares of our Class C
common stock
and                      shares
of our preferred stock outstanding.
Common stock
Except as described below, shares of our
Class A common stock, Class B common stock and
Class C common stock are identical in all respects. In
addition, we have entered into an agreement with our existing
equity investors which, subject to certain conditions, allows
them to exchange their shares of Class B common stock
together with preferred stock for IDSs, see "Related Party
Transactions—Investor Rights Agreement." There are
currently no shares of Class C common stock outstanding,
and following the completion of this offering, no shares of our
Class C common stock will be outstanding. All outstanding
shares of common stock are, and all shares of common stock to be
outstanding upon completion of this offering will be, validly
issued, fully paid and nonassessable.
Dividends.
Holders
of shares of our Class A common stock, Class B common
stock and 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. Holders of our
Class A common stock, Class B common stock and
Class C common stock will be paid equal dividends. See
"Dividend Policy" for a complete description of the
dividends we expect to declare on our shares of common stock.
Combination with Senior Subordinated Notes to
Form IDSs.
Only shares of our
Class A common stock may be combined with senior
subordinated notes to form IDSs. Our bylaws will provide that we
may only issue additional shares of our 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.
Rights Upon
Liquidation.
In the event of our
voluntary or involuntary liquidation, dissolution or winding up,
holders of shares of our common stock will be entitled to share
equally in our assets remaining after payment of all debts and
other liabilities, subject to the liquidation preference of any
outstanding preferred stock.
Voting Rights.
Shares of our common stock carry one vote per share. Holders of
shares of our common stock have no cumulative voting rights.
Other Rights.
Holders of shares of our common stock have no preemptive rights.
The holders of common stock are subject to, and may be adversely
affected by, the rights of the holders of shares of any series
of preferred stock that we may designate and issue in the future.
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Preferred stock
Following the consummation of the offering, our
existing equity investors will
hold            shares
of preferred stock.
Ranking.
The
preferred stock ranks senior to the common stock with respect to
payment of dividends and amounts distributable upon liquidation,
dissolution or winding up.
Dividends.
The
holders of our preferred stock will be entitled to receive
cumulative dividends which will accrue at a rate
of      % per annum on a deemed
issuance price of
$           per
share which will be equal to the aggregate principal amount of
each senior subordinated note; provided that during the
continuation of any event of default under the indenture
governing the senior subordinated notes, dividends will accrue
at a rate of      % per annum.
Such dividends will accrue whether or not declared and whether
or not we have funds legally available for the payment of
dividends. Such dividends will be paid, if declared by the
board, on the last day of each fiscal quarter or, to the extent
not previously paid, at such time as such shares of preferred
stock are exchanged for IDSs; and provided further, that such
dividends may only be paid to the extent allowable under
applicable law, the terms of our new credit facility and the
indenture governing our senior subordinated notes.
Liquidation
Preference.
The holders of the
preferred stock are entitled to receive in the event of any
liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary,
$           per
share of preferred stock plus an amount per share of preferred
stock equal to all dividends (whether or not earned or declared)
accrued and unpaid thereon to the date of final distribution to
such holders (the "Preferred Liquidation Preference").
Until the holders of the preferred have been paid
the Preferred Liquidation Preference in full, no payment will be
made to any holder of common stock upon the liquidation,
dissolution or winding up of the Company. If, upon any
liquidation, dissolution or winding up of the Company, the
assets of the Company, or proceeds thereof, distributable among
the holders of the shares of preferred stock are insufficient to
pay in full the Preferred Liquidation Preference and the
liquidation preference with respect to any other shares that
rank pari passu with the preferred stock on liquidation, then
such assets, or the proceeds thereof, will be distributed among
the holders of shares of preferred stock and any such shares
that rank pari passu with the preferred stock ratably in
accordance with the respective amounts which would be payable on
such shares of preferred stock if all amounts payable thereon
were paid in full. Neither a consolidation or merger of the
Company with another corporation, a statutory share exchange by
the Company nor a sale or transfer of all or substantially all
of the Company's assets will be considered a liquidation,
dissolution or winding up, voluntary or involuntary, of the
Company.
Voting Rights.
The
preferred stock will not vote on matters generally presented to
the stockholders.
In addition, our board of directors has the
authority to issue additional shares of preferred stock from
time to time on terms that it may determine, to divide shares of
preferred stock into one or more series and to fix the
designations, voting powers, preferences and relative
participating, optional or other special rights of each series,
and the qualifications, limitations or restrictions of each
series, to the fullest extent permitted by the General
Corporation Law of the State of Delaware, or DGCL. The issuance
of shares of preferred stock could have the effect of decreasing
the market price of the IDSs and our shares of common stock,
impeding or delaying a possible takeover and adversely affecting
the voting and other rights of the holders of shares of our
common stock.
Anti-Takeover Effects of Various Provisions of
Delaware Law and Our Certificate of Incorporation and By
laws
Provisions of Delaware law and our amended and
restated certificate of incorporation and bylaws could make it
more difficult to acquire us by means of a tender offer, a proxy
contest or otherwise, or to remove incumbent officers and
directors. These provisions, summarized below, are expected to
discourage types of coercive takeover practices and inadequate
takeover bids and to encourage persons seeking to acquire
control of us to first negotiate with us. We believe that the
benefits of increased protection of our potential
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ability to negotiate with the proponent of an
unfriendly or unsolicited proposal to acquire or restructure us
outweigh the disadvantages of discouraging takeover or
acquisition proposals because, among other things, negotiation
of these proposals could result in an improvement of their terms.
Delaware Anti-Takeover
Statute.
We are subject to
Section 203 of the Delaware General Corporation Law, or
DGCL, an anti-takeover statute. In general, Section 203
prohibits a publicly held Delaware corporation from engaging in
a "business combination" with an "interested
stockholder" for a period of three years following the date
the person became an interested stockholder, unless (with
certain exceptions) the "business combination" or the
transaction in which the person became an interested stockholder
is approved in a prescribed manner. Generally, a "business
combination" includes a merger, asset or stock sale, or
other transaction resulting in a financial benefit to the
interested stockholder. Generally, an "interested
stockholder" is a person who, together with affiliates and
associates, owns (or within three years prior to the
determination of interested stockholder status, did own) 15% or
more of a corporation's voting stock. The existence of this
provision would be expected to have an anti-takeover effect with
respect to transactions not approved in advance by the board of
directors, including discouraging attempts that might result in
a premium over the market price for the shares of common stock
held by stockholders.
No Cumulative
Voting.
The DGCL provides that
stockholders are denied the right to cumulate votes in the
election of directors unless our amended and restated
certificate of incorporation provides otherwise. Our amended and
restated certificate of incorporation will not expressly provide
for cumulative voting.
No Stockholder Action by Written Consent;
Calling of Special Meeting of
Stockholders.
Our organizational
documents prohibit stockholder action by written consent. Our
amended and restated certificate of incorporation will provide
that special meetings of our stockholders may be called only by
our board of directors.
Advance Notice Requirements for Stockholder
Proposals and Director Nominations.
Our bylaws will provide that
stockholders seeking to bring business before or to nominate
candidates for election as directors at an annual meeting of
stockholders must provide timely notice of their proposal in
writing to the corporate secretary. To be timely, a
stockholder's notice regarding (1) a
stockholder's proposal must be delivered or mailed and
received at our principal executive offices not less than
60 days not more than 90 days prior to the meeting or
(2) a director nomination must be delivered or mailed and
received at our principal executive offices not less than 60 nor
more than 90 days in advance of the anniversary date of the
immediately preceding annual meeting of stockholders; provided
that if less than 70 days notice or prior public
announcement of the date of the meeting is given, notice
regarding stockholder nominations for the election of directors
or notice of other stockholder proposals must be received by our
corporate secretary by the later of 10 days following the
day on which notice of the date of the special meeting was
mailed or public disclosure of the date of the special meeting
was made. Our bylaws will also specify requirements as to the
form and content of a stockholder's notice. These
provisions may impede stockholders' ability to bring
matters before an annual meeting of stockholders or make
nominations for directors at an annual meeting of stockholders.
Limitations on Liability and Indemnification
of Officers and Directors.
The
DGCL authorizes corporations to limit or eliminate the personal
liability of directors to corporations and their stockholders
for monetary damages for breaches of directors' fiduciary
duties as directors. Our organizational documents include
provisions that eliminate, to the extent allowable under the
DGCL, the personal liability of directors for monetary damages
for actions taken as a director. Our organizational documents
also provide that we must indemnify and advance reasonable
expenses to our directors and officers to the fullest extent
authorized by the DGCL. We will also be expressly authorized to
carry directors' and officers' insurance for our
directors, officers and certain employees for some liabilities.
The limitation of liability and indemnification
provisions in our amended and restated certificate of
incorporation and bylaws may discourage stockholders from
bringing a lawsuit against directors for breach of their
fiduciary duty. These provisions may also have the effect of
reducing the likelihood of derivative litigation against
directors and officers, even though such an action, if
successful, might otherwise benefit
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us and our stockholders. In addition, your
investment may be adversely affected to the extent that, in a
class action or direct suit, we pay the costs of settlement and
damage awards against directors and officers pursuant to these
indemnification provisions.
There is currently no pending material litigation
or proceeding involving any of our directors, officers or
employees for which indemnification is sought.
Removal of
Directors.
Our organizational
documents provide that directors may be removed only for cause
by the affirmative vote of at least a majority in voting power
of the outstanding shares of our capital stock entitled to vote.
Authorized but Unissued
Shares.
Our authorized but
unissued shares of common stock and preferred stock will be
available for future issuance without your approval. We may use
additional shares for a variety of corporate purposes, including
future public offerings to raise additional capital, corporate
acquisitions and employee benefit plans. The existence of
authorized but unissued shares of common stock and preferred
stock could render more difficult or discourage an attempt to
obtain control of us by means of a proxy contest, tender offer,
merger or otherwise.
Supermajority
Provisions.
The DGCL provides
generally that the affirmative vote of a majority in voting
power of the outstanding shares entitled to vote is required to
amend a corporation's certificate of incorporation, unless
the certificate of incorporation or bylaws require a greater
percentage. Our organizational documents provide that the
following provisions in the certificate of incorporation or
bylaws may be amended only by a vote of two-thirds or more in
voting power of all the outstanding shares of our capital stock
entitled to vote:
•
the prohibition on stockholder action by written
    consent;
•
the ability to call a special meeting of
    stockholders being vested solely in our board of directors and
    the chairman of our board of directors;
•
the provisions relating to advance notice
    requirements for stockholder proposals and directors nominations;
•
the provisions relating to the removal of
    directors;
•
the limitation on the liability of our directors
    to us and our stockholders and the obligation to indemnify and
    advance reasonable expenses to the directors and officers to the
    fullest extent authorized by the DGCL;
•
the provisions granting authority to our board of
    directors to amend or repeal our bylaws without a stockholder
    vote, as described in more detail in the next succeeding
    paragraph; and
•
the supermajority voting requirements listed
    above.
In addition, our amended and restated certificate
of incorporation grants our board of directors the authority to
amend and repeal our bylaws without a stockholder vote in any
manner not inconsistent with the laws of the State of Delaware
or our amended and restated certificate of incorporation. Our
amended and restated certificate of incorporation provides that
these provisions in our amended and restated certificate of
incorporation may be amended only by a vote of two-thirds or
more in voting power of all the outstanding shares of our
capital stock entitled to vote.
Listing
We will apply to list the IDSs on the American
Stock Exchange under the trading symbol
"                    ."
Transfer Agent and Registrar
The transfer agent and registrar for our
Class A common stock and Class B common stock
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 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. We refer to Alliance Laundry Holdings
Inc. as the "Company" in this "Description of
Senior Subordinated Notes" section.
General
The Notes are to be issued under an indenture, to
be dated as
of                     ,
2004 (the "Indenture"), among us, the subsidiary
guarantor
and                     ,
as Trustee (the "Trustee").
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.
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.
Capitalized terms used in this "Description of Senior
Subordinated Notes" section and not otherwise defined have
the meanings set forth in "— Certain
Definitions" hereafter.
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 Company may 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 Indebtedness
evidenced by such Additional Notes and related Guarantees, the
Company and the Guarantors are solvent.
The Notes will be issued only in fully-registered
form, without coupons represented by one or more global notes
which will be registered in the name of Cede & Co., the
nominee of DTC. See "Description of IDSs —
Book-Entry Settlement and Clearance."
Terms of the Notes
Maturity
The Notes will be unsecured senior subordinated
obligations of the Company and will mature
on                     ,
2014. The Company may extend the maturity of the Notes for two
additional successive five-year terms if the following
conditions are satisfied:
•
during the twelve month period ending on the last
    day of the most recent fiscal quarter ending at least
    45 days before the end of the then-current term, our Fixed
    Charge Coverage Ratio is greater
    than           to
    1.0;
•
no Event of Default (including certain events of
    bankruptcy, insolvency or reorganization of the Company or a
    Significant Subsidiary) has occurred and is continuing with
    respect to the Notes; and
•
no event of default has occurred and is
    continuing with respect to any other Indebtedness of the Company
    having a principal amount in excess of
    $           million
    or could occur as a result of such extension, including under
    any Designated Senior Indebtedness.
If the Company is going to extend the maturity of
the Notes, the Company will cause a notice of such extension,
including the new maturity date, to be sent to holders at least
30 and not more than 60 days prior to the previously
scheduled maturity date.
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Within 30 days prior to the maturity or
redemption of the Notes, unless the Company has sent a notice of
extension of the maturity date, the Company will use its
reasonable efforts to list or quote the outstanding shares of
its Class A 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 Class A 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 on the last day of
each                ,                ,                and                to
Holders of record at the close of business on
the            day
or the immediately preceding Business Day of such month,
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
"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 and prior
to                     ,
2014 and during the term of each additional five-year term of
the senior subordinated notes, if any, the Company will be
permitted, at its election, on two occasions to defer interest
payments on the Notes (also an "Interest Deferral
Period") with respect to two quarters 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, and 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; and
provided,
further,
that interest payments on the Notes may not be
deferred under this provision for more than two quarters in the
aggregate or
beyond                     ,
2014. At the end of any such Interest Deferral Period, the
Company may not defer interest again on the Notes unless and
until all deferred interest is paid in full.
Deferred interest on the Notes will bear interest
at a rate per annum of      %,
compounded quarterly, until paid in full. At the end of any
Interest Deferral Period, the Company must pay all deferred
interest and accrued interest thereon and thereafter, the
Company will be obligated to resume quarterly payments of
interest on the Notes.
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 Capital Stock.
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Optional Redemption
The Notes will be redeemable at the
Company's option as provided in the Indenture.
In the case of any partial redemption, selection
of the Notes for redemption will be made by the Trustee on a pro
rata basis, by lot or by such other method as the Trustee shall
deem fair and appropriate (and in such manner as complies with
the applicable legal and regulatory requirements). If any Note
is to be redeemed in part only, the notice of redemption
relating to such Note shall state the portion of the principal
amount thereof to be redeemed. A new Note in principal amount
equal to the unredeemed portion thereof will be issued in the
name of the holder thereof upon cancellation of the original
Note. On and after the date of redemption, interest will cease
to accrue on Notes or portions thereof called for redemption, so
long as the Company has deposited with the depositary funds
sufficient to pay the principal of, plus accrued and unpaid
interest (including any deferred interest and accrued interest
thereon) on, the Notes to be redeemed.
A full or partial redemption of the Notes will
result in an automatic separation of the IDSs. See
"Description of IDSs—Automatic Separation."
Ranking
The Indebtedness evidenced by the Notes will be
unsecured senior subordinated Indebtedness of the Company, will
be subordinated in right of payment, to the extent and in the
manner provided in the Indenture, to the prior payment in full
in cash of all existing and future Senior Indebtedness of the
Company, including the Credit Agreement, will rank
pari passu
in right of payment with all existing and future Pari Passu
Indebtedness of the Company and will rank senior in right of
payment to all existing and future Subordinated Indebtedness of
the Company. The Notes will also be effectively subordinated to
any Secured Indebtedness of the Company to the extent of the
value of the assets securing such Indebtedness. However, payment
from the money or the proceeds of U.S. Government
Obligations held in any defeasance trust described under
"— Defeasance" below is not subordinated to
any Senior Indebtedness or subject to the restrictions described
herein.
The indebtedness evidenced by each Guarantee will
be unsecured senior subordinated indebtedness of the applicable
Guarantor, will be subordinated in right of payment, to the
extent and in the manner provided in the Indenture, to the prior
payment in full in cash of all existing and future Senior
Indebtedness of such Guarantor, including the Senior
Indebtedness of each Guarantor represented by such
Guarantor's guarantee of the Credit Facilities, will rank
pari passu
in right of payment with all existing and
future Pari Passu Indebtedness and trade payables of such
Guarantor and will rank senior in right of payment to all
existing and future Subordinated Indebtedness of such Guarantor.
The Guarantees will also be effectively subordinated to any
Secured Indebtedness of the applicable Guarantor to the extent
of the value of the assets securing such Indebtedness.
As of December 31, 2003, on a pro forma
basis, (i) the Company would have had
$                    Senior
Indebtedness outstanding, (ii) the Company would have had
no Pari Passu Indebtedness outstanding other than the Notes,
(iii) the Guarantor would have had
$           million
in Senior Indebtedness outstanding under the Credit Agreement,
all of which would have been Secured Indebtedness, and
(iv) the Guarantor would have had no Pari Passu
Indebtedness outstanding other than the Guarantees and
(v) the Non-Guarantor Subsidiaries would have had total
liabilities, excluding liabilities owed to us, of
$           million.
Although the Indenture will contain limitations on the amount of
additional Indebtedness which the Company, the Guarantors and
the Non-Guarantor Subsidiaries may Incur, under certain
circumstances the amount of such Indebtedness could be
substantial and, in any case, such Indebtedness may be Senior
Indebtedness or Secured Indebtedness. See
"—Limitations on Incurrence of Indebtedness and
Issuance of Disqualified Stock and Preferred Stock" below.
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. As of December 31, 2003, on a pro forma
basis, the total liabilities of
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the Company's subsidiaries were
approximately
$           million,
including trade payables. Although the Indenture will limit the
Incurrence of Indebtedness by and the issuance of Preferred
Stock of certain of the Company's subsidiaries, such
limitation is subject to a number of significant qualifications.
"Senior Indebtedness" with respect to
the Company or any Guarantor means the Senior Lender
Indebtedness and all other Indebtedness of the Company or such
Guarantor, including principal, interest thereon (including
interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company or any
Subsidiary of the Company at the rate specified in the
applicable Senior Indebtedness, whether or not a claim for
post-filing interest is allowed in such proceeding) and other
amounts (including make-whole payments, fees, expenses,
reimbursement obligations under letters of credit and
indemnities) owing in respect thereof, whether outstanding on
the Issue Date or thereafter Incurred, unless in the instrument
creating or evidencing the same or pursuant to which the same is
outstanding it is provided that such obligations are not
superior, or are subordinated, in right of payment to the Notes
or such Guarantor's Guarantee, as applicable; provided,
however, that Senior Indebtedness shall not include, as
applicable, (i) any obligation of the Company to any
Subsidiary of the Company or of such Guarantor to the Company or
any other Subsidiary of the Company, (ii) any liability for
federal, state, local or other taxes owed or owing by the
Company or such Guarantor, (iii) any accounts payable or
other liability to trade creditors arising in the ordinary
course of business (including guarantees thereof or instruments
evidencing such liabilities), (iv) any Indebtedness or
obligation of the Company or such Guarantor which is Pari Passu
Indebtedness, (v) any obligations with respect to any
Capital Stock, and (vi) any Indebtedness Incurred in
violation of the Indenture.
Only Senior Indebtedness or Secured Indebtedness
of the Company or a Guarantor will rank senior to the Notes or
the relevant Guarantee in accordance with the provisions of the
Indenture. The Notes and each Guarantee will in all respects
rank
pari passu
with all other Pari Passu Indebtedness of
the Company and the relevant Guarantor, respectively.
The Company may not pay principal of, premium (if
any) or interest on, the Notes or make any deposit pursuant to
the provisions described under "Defeasance" below and
may not otherwise purchase, redeem or otherwise retire any Notes
(except that Holders may receive and retain (a) Permitted
Junior Securities and (b) payments made from the trust
described under "—Defeasance" below so long as,
on the date or dates the respective amounts were paid into the
trust, such payments were made with respect to the Notes without
violating the subordination provisions described herein or any
other material agreement binding on the Company, including the
Credit Agreement) (collectively, "pay the Notes") if
(i) a default in the payment of the principal of, premium,
if any, or interest on any Designated Senior Indebtedness occurs
and is continuing or any other amount owing in respect of any
Designated Senior Indebtedness is not paid when due, or
(ii) any other default on any Designated Senior
Indebtedness occurs and results in such Designated Senior
Indebtedness becoming due or being declared due and payable
prior to the date on which it would otherwise become due and
payable in accordance with its terms unless, in either case, the
default has been cured or waived and any such acceleration has
been rescinded or such Designated Senior Indebtedness has been
paid in full. However, the Company may pay the Notes without
regard to the foregoing if the Company and the Trustee receive
written notice approving such payment from the Representative of
each series of the Designated Senior Indebtedness with respect
to which either of the events set forth in clause (i) or
(ii) of the immediately preceding sentence has occurred and is
continuing. During the continuance of any default (other than a
default described in clause (i) or (ii) of the second
preceding sentence) with respect to any Designated Senior
Indebtedness pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such
notice as may be required to effect such acceleration) or upon
the expiration of any applicable grace periods, the Company may
not pay the Notes for a period (a "Payment Blockage
Period") commencing upon the receipt by the Trustee (with a
copy to the Company) of written notice (a "Blockage
Notice") of such default from the Representative of such
defaulted Designated Senior Indebtedness specifying an election
to effect a Payment Blockage Period and ending 179 days
thereafter (or earlier if such Payment Blockage Period is
terminated (i) by written notice to the Trustee and the
Company from the Person or Persons who gave such Blockage
Notice, (ii) by repayment in full of such defaulted
Designated Senior Indebtedness or (iii) because the
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default giving rise to such Blockage Notice is no
longer continuing). Notwithstanding the provisions described in
the immediately preceding sentence (but subject to the
provisions contained in the first sentence of this paragraph and
in the succeeding paragraph), unless the holders of such
defaulted Designated Senior Indebtedness or the Representative
of such holders have accelerated the maturity of such defaulted
Designated Senior Indebtedness, the Company may resume payments
on the Notes after the end of such Payment Blockage Period. 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 any 360 consecutive day period. For
purposes of this provision, no default or event of default that
existed or was continuing on the date of the commencement of any
Payment Blockage Period with respect to the Designated Senior
Indebtedness initiating such Payment Blockage Period shall be,
or be made, the basis of the commencement of a subsequent
Payment Blockage Period by the Representative of such Designated
Senior Indebtedness, unless such default or event of default
shall have been cured or waived for a period of not less than 90
consecutive days.
Upon any payment or distribution of the assets of
the Company upon a total or partial liquidation or dissolution
or bankruptcy reorganization of, insolvency, receivership or
similar proceeding relating to the Company or its property or an
assignment for the benefit of its creditors or any marshalling
of the Company's assets or liabilities, the holders of
Senior Indebtedness will be entitled to receive payment in full
in cash of all the Senior Indebtedness before the Noteholders
are entitled to receive any payment, and until the Senior
Indebtedness is paid in full in cash, any payment or
distribution to which Noteholders would be entitled but for the
subordination provisions of the Indenture will be made to
holders of the Senior Indebtedness as their interests may appear
(except that Holders of Notes may receive and retain
(i) Permitted Junior Securities, and (ii) payments
made from the trust described under "—Defeasance"
so long as, on the date or dates the respective amounts were
paid into the trust, such payments were made with respect to the
Notes without violating the subordination provisions described
herein or any other material agreement binding on the Company,
including the Credit Agreement). If a distribution is made to
Noteholders that due to the subordination provisions of the
Indenture should not have been made to them, such Noteholders
are required to hold it in trust for the holders of Senior
Indebtedness and pay it over to them as their interests may
appear.
After the occurrence of an Event of Default, the
Company or the Trustee shall promptly notify the holders of each
series of Designated Senior Indebtedness (or their respective
Representative) of such occurrence. If any Designated Senior
Indebtedness is outstanding, the Company may not make any
payments then due on the Notes until five Business Days after
the holders or the Representative of such Designated Senior
Indebtedness receive notice of such occurrence and, thereafter,
may pay the Notes only if the subordination provisions of the
Indenture otherwise permit payment at that time.
By reason of the subordination provisions
contained in the Indenture, in the event of insolvency,
creditors of the Company who are holders of Senior Indebtedness
may recover more, ratably, than the Noteholders.
The Indenture will contain identical
subordination provisions relating to each Guarantor's
obligations under its Guarantee.
Guarantees
Each of the Company's direct and indirect
Wholly Owned Restricted Subsidiaries organized under the laws of
any state of the United States of America on the Issue Date and
certain future Subsidiaries of the Company (as described below),
as primary obligors and not merely as sureties, will jointly and
severally irrevocably and unconditionally guarantee on an
unsecured senior subordinated basis (as described under
"—Ranking" above) the performance and punctual
payment when due, whether at Stated Maturity, by acceleration or
otherwise, of all obligations of the Company under the Indenture
and the Notes, whether for payment of principal of, premium, if
any, or interest on the Notes, expenses, indemnification or
otherwise (all such obligations guaranteed by such Guarantors
being herein called the "Guaranteed Obligations").
Such Guarantors will agree to pay, in addition to the amount
stated above, any and all expenses (including reasonable counsel
fees and expenses) Incurred by the Trustee or the Holders in
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enforcing any rights under the Guarantees. Each
Guarantee will be limited in amount to an amount not to exceed
the maximum amount that can be guaranteed by the applicable
Guarantor after giving effect to all of its other contingent and
fixed liabilities (including without limitation all of its
obligations under or with respect to the Credit Agreement)
without rendering the Guarantee, as it relates to such
Guarantor, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally. After the Issue Date, the Company
will cause each Restricted Subsidiary organized under the laws
of the United States of America or any state or territory
thereof that has Total Assets of more than $500,000 to execute
and deliver to the Trustee a supplemental indenture pursuant to
which such Restricted Subsidiary will guarantee, payment of the
Notes on an unsecured senior subordinated basis. See
"Certain Covenants— Future Guarantors" below.
Each Guarantee is a continuing guarantee and
shall, until released in accordance with the next succeeding
paragraph, (i) remain in full force and effect until
payment in full of all the Guaranteed Obligations, (ii) be
binding upon each such Guarantor and its successors, and
(iii) inure to the benefit of and be enforceable by the
Trustee, the Holders and their successors, transferees and
assigns.
The Guarantee of a Guarantor will be released
(i) in connection with any transaction permitted by the
Indenture after which the Guarantor ceases to be a Restricted
Subsidiary of the Company; provided that the sale or other
disposition, if any, complies with the "Asset Sale"
provisions of the Indenture; or (ii) upon satisfaction and
discharge or defeasance of the Notes as provided below under
"Defeasance" and "Satisfaction and
Discharge."
Change of Control
Upon the occurrence of any of the following
events (each, a "Change of Control"), each Holder will
have the right to require the Company to repurchase all or any
part of such Holder's Notes of any series at a purchase
price in cash equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, to but not including
the date of repurchase (subject to the right of Holders of
record on the relevant record date to receive interest due on
the relevant interest payment date): (i) the sale, lease or
transfer, in one or a series of related transactions, of all or
substantially all of the Company's assets to any person or
group (as such term is used in Section 13(d)(3) of the
Exchange Act) other than the Permitted Holders, (ii) the
adoption of a plan relating to the liquidation or dissolution of
the Company, (iii) the acquisition by any person or group
(as such term is used in Section 13(d)(3) of the Exchange
Act) other than the Permitted Holders of a beneficial ownership
of more than 50% of the voting power of the voting stock of the
Company, by way of purchase, merger or consolidation or
otherwise (other than a creation of a holding company that does
not involve a change in the beneficial ownership of the Company
as a result of such transaction), (iv) the merger or
consolidation of the Company with or into another Person or the
merger of another Person into the Company with the effect that
immediately after such transaction the stockholders of the
Company immediately prior to such transaction hold, directly or
indirectly, less than 50% of the total voting power of all
securities generally entitled to vote in the election of
directors, managers, or trustees of the Person surviving such
merger or consolidation, in each case other than creation of a
holding company that does not involve a change in the beneficial
ownership of the Company as a result of such transaction or
(v) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors.
In order to exercise this repurchase right, a Holder must
separate its IDSs into the shares of Class A common stock
and Notes represented thereby.
In the event that at the time of such Change of
Control the terms of any Senior Lender Indebtedness restrict or
prohibit the repurchase of Notes pursuant to this covenant, then
prior to the mailing of the notice to Holders provided for in
the immediately following paragraph but in any event within
30 days following any Change of Control, the Company shall
(i) repay in full all Senior Lender Indebtedness or offer
to repay in full all Senior Lender Indebtedness and repay the
Senior Lender Indebtedness of each lender who has accepted such
offer or (ii) obtain the requisite consent under the
agreements governing the Senior Lender Indebtedness to permit
the repurchase of the Notes as provided for in the immediately
following paragraph.
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Within 30 days following any Change of
Control, unless the Company has exercised its right to redeem
the Notes as described under "—Optional
Redemption," the Company shall mail a notice (a
"Change of Control Offer") to each Holder with a copy
to the Trustee stating: (1) that a Change of Control has
occurred and that such Holder has the right to require the
Company to purchase such Holder's Notes at a purchase price
in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest, if any, to but not including the
date of repurchase (subject to the right of Holders of record on
a record date to receive interest on the relevant interest
payment date); (2) the circumstances and relevant facts and
financial information regarding such Change of Control;
(3) whether the agreements then governing the Senior Lender
Indebtedness will permit the repurchase of the Notes;
(4) the repurchase date (which shall be no earlier than
30 days nor later than 60 days from the date such
notice is mailed); and (5) the instructions determined by
the Company, consistent with this covenant, 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 upon a Change of Control if a third party makes
the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements 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 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 the Indenture by virtue thereof.
The definition of Change of Control includes a
phrase relating to the sale, lease or transfer of "all or
substantially all" the assets of the Company and its
Subsidiaries taken as a whole. Although there is a developing
body of case law interpreting the phrase "substantially
all," there is no precise established definition of the
phrase under applicable law. Accordingly, the ability of a
Holder of Notes to require the Company to repurchase such Notes
as a result of a sale, lease or transfer of less than all of the
assets of the Company and its Subsidiaries taken as a whole to
another Person or group may be uncertain.
Covenants Relating to IDSs
Recombination of Notes and Class A 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, recombine 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 senior
subordinated notes for 90 days, or the redemption or
maturity of any senior subordinated notes.
Procedures Relating to Subsequent
Issuance.
The Indenture will provide
that, in the event there is a subsequent issuance of Additional
Notes, each Holder of the Notes or the IDSs (as the case may be)
agrees that a portion of such Holder's Notes (whether held
directly in book-entry form or held as part of IDSs) will be
exchanged, without any further action of such Holder, for a
portion of the Additional Notes purchased by the Holders of such
Additional Notes, such that, following any such additional
issuance and exchange, each Holder of the Notes or the IDSs (as
the case may be) owns an indivisible unit composed of the Notes
and Additional Notes of each issuance in the same proportion as
each other Holder, and the records of DTC and the Trustee will
be revised to reflect each such exchange without any further
action of such 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
United States Federal Income Tax Consequences-Consequences to
United States 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 Senior Subordinated Notes
Represented by the IDSs, the Senior Subordinated Notes Offered
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Separately (not in the Form of IDSs), and our New
Credit Facility. Subsequent issuances of senior subordinated
notes may cause you to recognize taxable gain and/or original
issue discount and may reduce your recovery in the event of
bankruptcy." Any such automatic exchange should not impair
the rights any holder would otherwise have to assert a claim
against us or the underwriters, with respect to the full amount
of Notes purchased by such holder.
Certain Covenants
The Indenture will contain the following material
covenants:
Limitations on Incurrence of Indebtedness and
Issuance of Disqualified Stock and Preferred
Stock.
The Indenture will provide that
(i) the Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, Incur
any Indebtedness (including Acquired Indebtedness) or issue any
shares of Disqualified Stock and (ii) the Company will not
permit any of its Restricted Subsidiaries to issue any shares of
Preferred Stock; provided, however, that the Company and any
Restricted Subsidiary may Incur Indebtedness (including Acquired
Indebtedness) or issue shares of Disqualified Stock and any
Guarantor may issue shares of Preferred Stock if the Fixed
Charge Coverage Ratio of the Company for the most recently ended
four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which
such additional Indebtedness is Incurred or such Disqualified
Stock or Preferred Stock is issued would have been greater
than        to 1.00
determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional
Indebtedness had been Incurred, or the Disqualified Stock or
Preferred Stock had been issued, as the case may be, and the
application of proceeds therefrom had occurred at the beginning
of such four-quarter period.
The foregoing limitations will not apply to:
(a)     the Incurrence
    by the Company or its Restricted Subsidiaries of Indebtedness
    under the Credit Facilities and the issuance and creation of
    letters of credit and bankers' acceptances thereunder (with
    letters of credit and bankers' acceptances being deemed to
    have a principal amount equal to the face amount thereof) up to
    an aggregate principal amount of the greater of the Borrowing
    Base or
    $           million
    then classified as having been Incurred pursuant to this
    clause (a) outstanding at any one time;
(b)     the Incurrence
    by the Company and the Guarantors of Indebtedness represented by
    the Notes (not including any Additional Notes) and the
    Guarantees, as applicable;
(c)     Indebtedness
    existing on the Issue Date (other than Indebtedness described in
    clauses (a) and (b));
(d)     Indebtedness
    (including Capitalized Lease Obligations) Incurred by the
    Company or any of its Restricted Subsidiaries to finance the
    purchase, lease 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) in an aggregate
    principal amount which, when aggregated with the principal
    amount of all other Indebtedness then outstanding and Incurred
    pursuant to this clause (d) and all Refinancing
    Indebtedness (as defined below) Incurred to refund, refinance or
    replace any Indebtedness classified as having been Incurred
    pursuant to this clause (d), does not exceed the greater
    of           %
    of Total Assets at the time of Incurrence or
    $           million;
(e)     Indebtedness
    Incurred by the Company or any of its Restricted Subsidiaries
    constituting reimbursement obligations with respect to letters
    of credit issued in the ordinary course of business, including
    without limitation letters of credit in respect of workers'
    compensation claims, health, disability or other employee
    benefits or property, casualty or liability insurance or
    self-insurance, or with respect to agreements to provide
    services, or other Indebtedness with respect to reimbursement
    type obligations regarding workers' compensation claims;
    provided, however, that upon the drawing of such letters of
    credit, such obligations are reimbursed within 30 days
    following such drawing;
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(f)     Indebtedness
    arising from agreements of the Company or a Restricted
    Subsidiary providing for indemnification, adjustment of purchase
    price or similar obligations, in each case, Incurred in
    connection with the acquisition or disposition of any business,
    assets or a Subsidiary of the Company in accordance with the
    terms of the Indenture, other than guarantees of Indebtedness
    Incurred by any Person acquiring all or any portion of such
    business, assets or Subsidiary for the purpose of financing such
    acquisition;
(g)     Indebtedness of
    the Company to a Restricted Subsidiary of the Company; provided
    that any such Indebtedness is subordinated in right of payment
    to the Notes; provided further that any subsequent issuance or
    transfer of any Capital Stock or any other event which results
    in any such Restricted Subsidiary ceasing to be a Restricted
    Subsidiary of the Company or any other subsequent transfer of
    any such Indebtedness (except to the Company or another
    Restricted Subsidiary) shall be deemed, in each case, to be an
    Incurrence of such Indebtedness;
(h)     shares of
    Preferred Stock of a Restricted Subsidiary issued to the Company
    or another Restricted Subsidiary of the Company; provided that
    any subsequent issuance or transfer of any Capital Stock or any
    other event which results in any such Restricted Subsidiary
    ceasing to be a Restricted Subsidiary or any other subsequent
    transfer of any such shares of Preferred Stock (except to the
    Company or another Restricted Subsidiary of the Company) shall
    be deemed, in each case, to be an issuance of shares of
    Preferred Stock;
(i)     Indebtedness of
    a Restricted Subsidiary to the Company or another Restricted
    Subsidiary of the Company; provided that (i) any such
    Indebtedness is made pursuant to an intercompany note and
    (ii) if a Guarantor Incurs such Indebtedness to a
    Restricted Subsidiary that is not a Guarantor such Indebtedness
    is subordinated in right of payment to the Guarantee of such
    Guarantor; provided further that any subsequent issuance or
    transfer of any Capital Stock or any other event which results
    in any Restricted Subsidiary lending such Indebtedness ceasing
    to be a Restricted Subsidiary or any other subsequent transfer
    of any such Indebtedness (except to the Company or another
    Restricted Subsidiary of the Company) shall be deemed, in each
    case, to be an Incurrence of such Indebtedness;
(j)     Hedging
    Obligations that are incurred not for speculative purposes
    (1) for the purpose of fixing or hedging interest rate risk
    with respect to any Indebtedness that is permitted by the terms
    of the Indenture to be outstanding, (2) for the purpose of
    fixing or hedging currency exchange rate risk with respect to
    any currency exchanges or (3) for the purpose of fixing or
    hedging commodity price risk with respect to any commodity
    purchases;
(k)     obligations in
    respect of performance, bid and surety bonds and completion
    guarantees provided by the Company or any Restricted Subsidiary
    in the ordinary course of business;
(l)     Indebtedness or
    Disqualified Stock of the Company and any Restricted Subsidiary
    and Preferred Stock of any Restricted Subsidiary not otherwise
    permitted hereunder in an aggregate principal amount, which when
    aggregated with the principal amount or liquidation preference
    of all other Indebtedness and Disqualified Stock then
    outstanding and classified as having been Incurred pursuant to
    this clause (1), does not exceed
    $           million
    at any one time outstanding; provided, however, that
    Indebtedness of Foreign Subsidiaries, which when aggregated with
    the principal amount of all other Indebtedness of Foreign
    Subsidiaries then outstanding and classified as having been
    Incurred pursuant to this clause (1), does not exceed
    $           million
    (or the equivalent thereof in any other currency) at any one
    time outstanding (it being understood that any Indebtedness
    Incurred under this clause (1) shall cease to be deemed
    Incurred or outstanding for purposes of this clause (1) but
    shall be deemed to be Incurred for purposes of the first
    paragraph of this covenant from and after the first date on
    which the Company could have Incurred such Indebtedness under
    the first paragraph of this covenant without reliance upon this
    clause (1));
(m)     any guarantee by
    the Company or a Restricted Subsidiary of Indebtedness or other
    obligations of the Company or any of its Restricted Subsidiaries
    so long as the Incurrence of such Indebtedness Incurred by the
    Company or such Restricted Subsidiary is permitted under the
    terms of the
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Indenture; provided that if such Indebtedness is
    by its express terms subordinated in right of payment to the
    Notes or the Guarantee of such Restricted Subsidiary, as
    applicable, any such guarantee of any Guarantor with respect to
    such Indebtedness shall be subordinated in right of payment to
    such Guarantor's Guarantee with respect to the Notes
    substantially to the same extent as such Indebtedness is
    subordinated to the Notes or the Guarantee of such Restricted
    Subsidiary, as applicable;
(n)     the Incurrence
    by the Company or any of its Restricted Subsidiaries of
    Indebtedness which serves to refund or refinance any
    Indebtedness Incurred as permitted under the first paragraph of
    this covenant and clauses (b) and (c) above, or any
    Indebtedness issued to so refund or refinance such Indebtedness
    (subject to the following proviso, "Refinancing
    Indebtedness") prior to its respective maturity; provided,
    however, that such Refinancing Indebtedness:
(i)     has a Weighted
    Average Life to Maturity at the time such Refinancing
    Indebtedness is Incurred which is not less than the remaining
    Weighted Average Life to Maturity of the Indebtedness being
    refunded or refinanced;
(ii)     has a Stated
    Maturity which is no earlier than the Stated Maturity of the
    Indebtedness being refunded or refinanced;
(iii)     to the extent
    such Refinancing Indebtedness refinances Indebtedness
pari
    passu
with the Notes or the Guarantees, is
pari passu
with the Notes or the Guarantees, as applicable;
(iv)     is Incurred in
    an aggregate principal amount (or if issued with original issue
    discount, an aggregate issue price) that is equal to or less
    than the aggregate principal amount (or if issued with original
    issue discount, the aggregate accreted value) then outstanding
    of the Indebtedness being refinanced plus premium and fees
    Incurred in connection with such refinancing; and
(v)     shall not
    include Indebtedness of a Restricted Subsidiary that is not a
    Guarantor that refinances Indebtedness of the Company;
and provided further that subclauses (i),
    (ii), (iii), and (v) of this clause (n) will not apply
    to any refunding or refinancing of any Senior Indebtedness;
(o)     Indebtedness or
    Disqualified Stock or Preferred Stock of Persons that are
    acquired by the Company or any of its Restricted Subsidiaries or
    merged into a Restricted Subsidiary in accordance with the terms
    of the Indenture; provided, however, that such Indebtedness,
    Disqualified Stock or Preferred Stock is not Incurred in
    contemplation of such acquisition or merger or to provide all or
    a portion of the funds or credit support required to consummate
    such acquisition or merger; provided further, however, that
    after giving effect to such acquisition and the Incurrence of
    such Indebtedness, Disqualified Stock or Preferred Stock either
    (i) the Company would be permitted to Incur at least $1.00
    of additional Indebtedness pursuant to the Fixed Charge Coverage
    Ratio test set forth in the first sentence of this covenant or
    (ii) the Fixed Charge Coverage Ratio would be greater than
    immediately prior to such acquisition;
(p)     Contribution
    Indebtedness; and
(q)     Indebtedness
    represented by the issuance of Additional Notes in connection
    with the issuance of shares of Class A 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.
For purposes of determining compliance with this
covenant, in the event that an item of Indebtedness meets the
criteria of more than one of the categories of permitted
Indebtedness described in clauses (a) through
(q) above or is entitled to be Incurred pursuant to the
first paragraph of this covenant, the Company shall, in its sole
discretion, classify or reclassify such item of Indebtedness in
any manner that complies with this covenant and such item of
Indebtedness will be treated as having been Incurred
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pursuant to only one of such clauses or pursuant
to the first paragraph hereof. In addition, the Company may, at
any time, change the classification of an item of Indebtedness
(or any portion thereof) to any other clause or to the first
paragraph hereof; provided that the Company or Restricted
Subsidiary would be permitted to incur such item of Indebtedness
(or portion thereof) pursuant to such other clause or the first
paragraph hereof, as the case may be, at such time of
reclassification. Accrual of interest, the accretion of accreted
value and the payment of interest in the form of additional
Indebtedness will not be deemed to be an Incurrence of
Indebtedness for purposes of this covenant.
Limitation on Restricted
Payments.
The Indenture will provide
that the Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly:
(i)     declare or pay
    any dividend or make any distribution on account of the
    Company's or any of its Restricted Subsidiaries'
    Equity Interests, including any payment made in connection with
    any merger or consolidation involving the Company (other than
    (A) dividends or distributions by the Company payable in
    Equity Interests (other than Disqualified Stock) of the Company
    or (B) dividends or distributions by a Restricted
    Subsidiary so long as, in the case of any dividend or
    distribution payable on or in respect of any class or series of
    securities issued by a Restricted Subsidiary other than a Wholly
    Owned Restricted Subsidiary, the Company or a Restricted
    Subsidiary receives at least its pro rata share of such dividend
    or distribution in accordance with its Equity Interests in such
    class or series of securities);
(ii)     purchase or
    otherwise acquire or retire for value any Equity Interests of
    the Company or any Restricted Subsidiary; or
(iii)     make any
    Restricted Investment (all such payments and other actions set
    forth in this clause (iii) and in clauses (i) and
    (ii) above being collectively referred to as
    "Restricted Payments"),
unless, at the time of such Restricted Payment:
(a)     no Default or
    Event of Default shall have occurred and be continuing or would
    occur as a consequence thereof;
(b)     immediately
    after giving effect to such transaction on a pro forma basis,
    the Company could Incur $1.00 of additional Indebtedness under
    the provisions of the first paragraph of "Limitations on
    Incurrence of Indebtedness and Issuance of Disqualified Stock
    and Preferred Stock"; and
(c)     such Restricted
    Payment, together with the aggregate amount of all other
    Restricted Payments made by the Company and its Restricted
    Subsidiaries after the Issue Date (including, without
    duplication, Restricted Payments permitted by clauses (1),
    (6) and (10) of the next succeeding paragraph, but
    excluding all other Restricted Payments permitted by the next
    succeeding paragraph), is less than the sum of, without
    duplication:
(i)              %
    of the Consolidated Net Income 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 (or, in the case such Consolidated Net Income
    for such period is a deficit, minus 100% of such deficit), plus
(ii)            %
    of the aggregate net proceeds, including cash and the Fair
    Market Value (as determined in accordance with the next
    succeeding sentence) of property other than cash, received by
    the Company since the Issue Date from the issue or sale of
    Equity Interests of the Company (excluding Refunding Capital
    Stock (as defined below), Designated Preferred Stock, Excluded
    Contributions and Disqualified Stock), including Equity
    Interests issued upon conversion of Indebtedness, Disqualified
    Stock and Designated Preferred Stock or upon exercise of
    warrants or options (other than an issuance or sale to a
    Subsidiary of the Company or an employee stock ownership plan or
    trust established by the Company or any of its Subsidiaries),
    plus
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(iii)            %
    of the aggregate amount of contributions to the capital of the
    Company received in cash and the Fair Market Value (as
    determined in accordance with the next succeeding sentence) of
    property other than cash since the Issue Date (other than
    Excluded Contributions, Refunding Capital Stock, Designated
    Preferred Stock and Disqualified Stock), plus
(iv)            %
    of the aggregate amount received in cash and the Fair Market
    Value (as determined in accordance with the next succeeding
    sentence) of property other than cash received from (A) the
    sale or other disposition (other than to the Company or a
    Restricted Subsidiary) of or on account of Restricted
    Investments made by the Company and its Restricted Subsidiaries
    and from repurchases and redemptions of such Restricted
    Investments from the Company and its Restricted Subsidiaries by
    any Person (other than the Company or any of its Subsidiaries)
    and from payments of interest on and repayments of loans or
    advances which constituted Restricted Investments, (B) the
    sale (other than to the Company or a Subsidiary) of the Capital
    Stock of an Unrestricted Subsidiary or (C) a distribution
    or dividend from an Unrestricted Subsidiary, plus
(v)     in the event any
    Unrestricted Subsidiary has been redesignated as a Restricted
    Subsidiary or has been merged, consolidated or amalgamated with
    or into, or transfers or conveys its assets to, or is liquidated
    into, the Company or a Restricted Subsidiary, the Fair Market
    Value (as determined in good faith by the Board of Directors) of
    the Investment of the Company in such Unrestricted Subsidiary at
    the time of such redesignation, combination or transfer (or of
    the assets transferred or conveyed, as applicable), after
    deducting any Indebtedness associated with the Unrestricted
    Subsidiary so designated or combined or any Indebtedness
    associated with the assets so transferred or conveyed.
The Fair Market Value of property other than cash
covered by clauses (ii), (iii) and (iv) above
shall be determined in good faith by the Company and (A) in the
event of property with a Fair Market Value in excess of
$           million,
shall be set forth in an Officers' Certificate or
(B) in the event of property with a Fair Market Value in
excess of
$           million,
shall be set forth in a resolution approved by at least a
majority of the Board of Directors.
The foregoing provisions will not prohibit:
(1)     the payment of
    any dividend or distribution within 60 days after the date
    of declaration thereof, if at the date of declaration such
    payment would have complied with the provisions of the Indenture;
(2)     (a) the
    repurchase, retirement or other acquisition of any Equity
    Interests ("Retired Capital Stock") of the Company in
    exchange for, or out of the proceeds of the substantially
    concurrent sale of, Equity Interests of the Company or
    contributions to the equity capital of the Company (other than
    any Disqualified Stock or any Equity Interests sold to a
    Subsidiary of the Company or to an employee stock ownership plan
    or any trust established by the Company or any of its
    Subsidiaries) (collectively, including any such contributions,
    "Refunding Capital Stock") and (b) the
    declaration and payment of accrued dividends on the Retired
    Capital Stock out of the proceeds of the substantially
    concurrent sale (other than to a Subsidiary of the Company or to
    an employee stock ownership plan or any trust established by the
    Company or any of its Subsidiaries) of Refunding Capital Stock;
(3)     the declaration
    and payment of dividends or distributions to holders of any
    class or series of Disqualified Stock of the Company or any of
    its Restricted Subsidiaries issued or incurred in accordance
    with the covenant entitled "—Limitation on Incurrence
    of Indebtedness and Issuance of Disqualified Stock and Preferred
    Stock";
(4)     the declaration
    and payment of dividends or distributions to holders of any
    class or series of Designated Preferred Stock issued after the
    Issue Date; provided, however, that (A) for the most
    recently ended four full fiscal quarters for which internal
    financial statements are available immediately preceding the
    date of issuance of such Designated Preferred Stock, after
    giving effect to such issuance (and the payment of dividends or
    distributions) on a pro forma basis, the Company would have had
    a Fixed Charge Coverage Ratio of greater
    than        to 1.00 and
    (B) the aggregate
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amount of dividends declared and paid pursuant to
    this clause (4) does not exceed the net cash proceeds
    received by the Company from the sale of Designated Preferred
    Stock issued after the Issue Date;
(5)     Investments in
    Unrestricted Subsidiaries having an aggregate Fair Market Value,
    taken together with all other Investments made pursuant to this
    clause (5) that are at that time outstanding, not to exceed
    $           million
    (with the Fair Market Value of each Investment being measured at
    the time made and without giving effect to subsequent changes in
    value);
(6)     the payment of
    dividends on the shares of the Company's Capital Stock up
    to an aggregate amount in any fiscal quarter not to exceed the
    Quarterly Base Dividend Level;
(7)     Investments that
    are made with Excluded Contributions;
(8)     other Restricted
    Payments in an aggregate amount not to exceed
    $           million;
(9)     repurchases of
    Equity Interests deemed to occur upon exercise of stock options
    if such Equity Interests represent a portion of the exercise
    price of such options; and
(10)     other
    Restricted Payments in an aggregate amount not to exceed the
    Base Dividend Restricted Payments Basket;
provided, however, that at the time of, and after
giving effect to, any Restricted Payment permitted under
clauses (3), (4), (5), (6), (8) and (10), no Default
or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof and provided further that
notwithstanding anything to the contrary, the Company may not
pay any dividends on its Capital Stock during any Interest
Deferral Period or after the end of any Interest Deferral Period
so long as any deferred interest including accrued interest
thereon has not been paid in full.
As of the Issue Date, all of the Company's
Subsidiaries will be Restricted Subsidiaries other than ALER
2002 and ALERT 2002A. The Company will not permit any
Unrestricted Subsidiary to become a Restricted Subsidiary except
pursuant to the definition of "Unrestricted
Subsidiary." For purposes of designating any Restricted
Subsidiary as an Unrestricted Subsidiary, all outstanding
Investments by the Company and its Restricted Subsidiaries
(except to the extent repaid) in the Subsidiary so designated
will be deemed to be Restricted Payments in an amount determined
as set forth in the last sentence of the definition of
"Investments." Such designation will only be permitted
if a Restricted Payment in such amount would be permitted at
such time and if such Subsidiary otherwise meets the definition
of an Unrestricted Subsidiary.
Anti-Layering.
The
Indenture will provide that the Company will not incur, create,
issue, assume, guarantee or otherwise become liable for any
Indebtedness that is contractually subordinate or junior in
right of payment to any Senior Indebtedness of the Company and
senior in right of payment to the Notes. No Guarantor will
incur, create, issue, assume, guarantee or otherwise become
liable for any Indebtedness that is contractually subordinate or
junior in right of payment to the Senior Indebtedness of such
Guarantor and senior in right of payment to such
Guarantor's Guarantee. This does not apply to distinctions
between categories of Indebtedness that exist by reason of any
Liens or Guarantees securing or in favor of some but not all of
such Indebtedness or securing such Indebtedness with greater or
lesser priority or with different collateral.
Dividend and Other Payment Restrictions
Affecting Subsidiaries.
The Indenture
will provide that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or consensual restriction on the
ability of any Restricted Subsidiary to:
(a)     (i) pay
    dividends or make any other distributions to the Company or any
    of its Restricted Subsidiaries (1) on its Capital Stock or
    (2) with respect to any other interest or participation in,
    or measured by, its profits, or (ii) pay any Indebtedness
    owed to the Company or any of its Restricted Subsidiaries;
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(b)     make loans or
    advances to the Company or any of its Restricted
    Subsidiaries; or
(c)     sell, lease or
    transfer any of its properties or assets to the Company or any
    of its Restricted Subsidiaries;
except in each case for such encumbrances or
restrictions existing under or by reason of:
(1)     contractual
    encumbrances or restrictions in effect on the Issue Date,
    including pursuant to the Credit Facilities and the other Senior
    Credit Documents;
(2)     the Indenture
    and the Notes;
(3)     applicable law
    or any applicable rule, regulation or order;
(4)     any agreement or
    other instrument relating to Indebtedness of a Person acquired
    by the Company or any Restricted Subsidiary which was in
    existence at the time of such acquisition (but not created in
    contemplation thereof or to provide all or any portion of the
    funds or credit support utilized to consummate such
    acquisition), which encumbrance or restriction is not applicable
    to any Person, or the properties or assets of any Person, other
    than the Person, or the property or assets of the Person, so
    acquired;
(5)     any restriction
    with respect to a Restricted Subsidiary imposed pursuant to an
    agreement entered into for the sale or disposition of all or
    substantially all the Capital Stock or assets of such Restricted
    Subsidiary pending the closing of such sale or disposition;
(6)     Secured
    Indebtedness otherwise permitted to be Incurred pursuant to the
    covenants described under "—Limitations on Incurrence
    of Indebtedness and Issuance of Disqualified Stock and Preferred
    Stock" and "—Liens" that limit the right of
    the debtor to dispose of the assets securing such Indebtedness;
(7)     restrictions on
    cash or other deposits or net worth imposed by customers under
    contracts entered into in the ordinary course of business;
(8)     customary
    provisions in joint venture agreements and other similar
    agreements entered into in the ordinary course of business;
(9)     customary
    provisions contained in leases, agreements to provide services
    and other similar agreements entered into in the ordinary course
    of business that impose restrictions of the type described in
    clause (c) above;
(10)     other
    Indebtedness of Restricted Subsidiaries permitted to be Incurred
    subsequent to the Issue Date pursuant to clause (1) of the
    second paragraph to the covenant described under
    "Limitations on Incurrence of Indebtedness and Issuance of
    Disqualified Stock and Preferred Stock"; or
(11)     any
    encumbrances or restrictions of the type referred to in
    clauses (a), (b) and (c) above imposed by any
    amendments, modifications, restatements, renewals, increases,
    supplements, refundings, replacements or refinancings of the
    contracts, instruments or obligations referred to in
    clauses (1) through (10) above; provided that such
    amendments, modifications, restatements, renewals, increases,
    supplements, refundings, replacements or refinancings are, in
    the good faith judgment of the Board of Directors, no more
    restrictive with respect to such dividend and other payment
    restrictions than those contained in the dividend or other
    payment restrictions prior to such amendment, modification,
    restatement, renewal, increase, supplement, refunding,
    replacement or refinancing.
Asset Sales.
The
Indenture will provide that the Company will not, and will not
permit any of its Restricted Subsidiaries to, cause or make an
Asset Sale, unless (x) the Company, or its Restricted
Subsidiaries, as the case may be, receives consideration at the
time of such Asset Sale at least equal to the Fair Market Value
(as determined in good faith by the Company) of the assets sold
or otherwise disposed of and (y) except in the case of a
Permitted Asset Swap, at least 75% of the consideration therefor
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received by the Company, or such Restricted
Subsidiary, as the case may be, is in the form of Cash
Equivalents; provided that the amount of:
(a)     any liabilities
    (as shown on the Company's or such Restricted
    Subsidiary's most recent balance sheet or in the notes
    thereto) of the Company or any Restricted Subsidiary (other than
    liabilities that are by their terms subordinated to the Notes)
    that are assumed by the transferee of any such assets;
(b)     any notes or
    other obligations or other securities received by the Company or
    such Restricted Subsidiary from such transferee that are
    converted by the Company or such Restricted Subsidiary into Cash
    Equivalents within 180 days of the receipt thereof (to the
    extent of the Cash Equivalents received); and
(c)     any Designated
    Noncash Consideration received by the Company or any of its
    Restricted Subsidiaries in such Asset Sale having an aggregate
    Fair Market Value, taken together with all other Designated
    Noncash Consideration received pursuant to this clause (c)
    that is at that time outstanding, not to exceed the greater
    of      % of Total Assets or
    $           million
    (with the Fair Market Value of each item of Designated Noncash
    Consideration being measured at the time received and without
    giving effect to subsequent changes in value)
shall be deemed to be Cash Equivalents for the
purposes of this provision.
Within 365 days after the Company's or
any Restricted Subsidiary's receipt of the Net Proceeds of
any Asset Sale, the Company or such Restricted Subsidiary may
apply the Net Proceeds from such Asset Sale, at its option:
(i)     to repay
    Obligations under the Credit Facilities or other Senior
    Indebtedness or Pari Passu Indebtedness (provided that if the
    Company shall so reduce Obligations under Pari Passu
    Indebtedness, it will equally and ratably reduce Obligations
    under the Notes by making an offer (in accordance with the
    procedures set forth below for an Asset Sale Offer) to all
    Holders to purchase at a purchase price equal to 100% of the
    principal amount thereof, plus accrued and unpaid interest, if
    any, the pro rata principal amount of Notes) or Indebtedness of
    a Restricted Subsidiary, in each case other than Indebtedness
    owed to the Company or a Restricted Subsidiary;
(ii)     to an
    investment in any one or more businesses, capital expenditures
    or acquisitions of other assets in each case used or useful in a
    Similar Business; and/or
(iii)     to make an
    investment in properties or assets that replace the properties
    and assets that are the subject of such Asset Sale.
Pending the application of any such Net Proceeds,
the Company or such Restricted Subsidiary may temporarily reduce
Indebtedness under a revolving credit facility, if any, or
otherwise invest such Net Proceeds in Cash Equivalents or
Investment Grade Securities. The Indenture will provide that any
Net Proceeds from any Asset Sale that are not applied as
provided and within the time period set forth in the first
sentence of this paragraph will be deemed to constitute
"Excess Proceeds." When the aggregate amount of Excess
Proceeds exceeds
$           million,
the Company shall make an offer to all Holders of Notes (an
"Asset Sale Offer") to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds
at an offer price in cash in an amount equal to 100% of the
principal amount thereof, plus accrued and unpaid interest, if
any, to but not including the date fixed for the closing of such
offer, in accordance with the procedures set forth in the
Indenture. The Company will commence an Asset Sale Offer with
respect to Excess Proceeds within thirty Business Days after the
date that Excess Proceeds exceed
$           million
by mailing the notice required pursuant to the terms of the
Indenture, with a copy to the Trustee. To the extent that the
aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company may use any
remaining Excess Proceeds for general corporate purposes. If the
aggregate principal amount of Notes surrendered by Holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall
select the Notes to be purchased in the manner described below.
Upon completion of any such Asset Sale Offer, the amount of
Excess Proceeds shall be reset at zero.
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The Company will comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities
laws and regulations to the extent such laws or regulations are
applicable in connection with the repurchase of the Notes
pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with
the provisions of the Indenture, the Company will comply with
the applicable securities laws and regulations and shall not be
deemed to have breached its obligations described in the
Indenture by virtue thereof.
If more Notes are tendered pursuant to an Asset
Sale Offer than the Company is required to purchase, selection
of such Notes for purchase will be made by the Trustee in
compliance with the requirements of the principal national
securities exchange, if any, on which such Notes are listed, or
if such Notes are not so listed, on a pro rata basis, by lot or
by such other method as the Trustee shall deem fair and
appropriate (and in such manner as complies with applicable
legal requirements).
Notices of an Asset Sale Offer shall be mailed by
first class mail, postage prepaid, at least 30 but not more than
60 days before the purchase date to each Holder of Notes at
such Holder's registered address. If any Note is to be
purchased in part only, any notice of purchase that relates to
such Note shall state the portion of the principal amount
thereof that has been or is to be purchased.
A new Note in principal amount equal to the
unpurchased portion of any Note purchased in part will be issued
in the name of the Holder thereof upon cancellation of the
original Note. On and after the purchase date unless the Company
defaults in payment of the purchase price, interest shall cease
to accrue on Notes or portions thereof purchased.
Transactions with
Affiliates.
The Indenture will provide
that the Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, make any
payment to, or sell, lease, transfer or otherwise dispose of any
of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction or
series of transactions, contract, agreement, understanding,
loan, advance or guarantee with, or for the benefit of, any
Affiliate of the Company (each of the foregoing, an
"Affiliate Transaction") involving aggregate
consideration in excess of
$           million,
unless:
(a)     such Affiliate
    Transaction is on terms that are not materially less favorable
    to the Company or the relevant Restricted Subsidiary than those
    that could have been obtained in a comparable transaction by the
    Company or such Restricted Subsidiary with an unrelated
    Person; and
(b)     with respect to
    any Affiliate Transaction or series of related Affiliate
    Transactions involving aggregate consideration in excess of
    $           million,
    the Company delivers to the Trustee a resolution adopted by the
    majority of the Board of Directors of the Company, approving
    such Affiliate Transaction and set forth in an Officers'
    Certificate certifying that such Affiliate Transaction complies
    with clause (a) above.
The foregoing provisions will not apply to the
following:
(i)     transactions
    between or among the Company and/or any of its Restricted
    Subsidiaries;
(ii)     Permitted
    Investments and Restricted Payments permitted by the provisions
    of the Indenture described above under the covenant
    "—Limitation on Restricted Payments";
(iii)     the payment of
    reasonable and customary fees paid to, and indemnity provided on
    behalf of, officers, directors, employees or consultants of the
    Company or any Restricted Subsidiary;
(iv)     transactions in
    which the Company or any of its Restricted Subsidiaries, as the
    case may be, delivers to the Trustee a letter from an
    Independent Financial Advisor stating that such transaction is
    fair to the Company or such Restricted Subsidiary from a
    financial point of view or meets the requirements of
    clause (a) of the preceding paragraph;
(v)     payments or
    loans to employees or consultants in the ordinary course of
    business which are approved by a majority of the Board of
    Directors of the Company (or a committee thereof) in good faith;
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(vi)     any agreement
    as in effect as of the Issue Date or any amendment thereto (so
    long as any such amendment is not disadvantageous to the holders
    of the Notes in any material respect) or any transaction
    contemplated thereby;
(vii)     the existence
    of, or the performance by the Company or any of its Restricted
    Subsidiaries of its obligations under the terms of, any
    stockholders agreement (including any registration rights
    agreement or purchase agreement related thereto) to which it is
    a party as of the Issue Date and any similar agreements which it
    may enter into thereafter, provided, however, that the existence
    of, or the performance by the Company or any of its Restricted
    Subsidiaries of its obligations under any future amendment to
    any such existing agreement or under any similar agreement
    entered into after the Issue Date shall only be permitted by
    this clause (vii) to the extent that the terms of any such
    amendment or new agreement are not otherwise disadvantageous to
    the Holders of the Notes in any material respect; and
(viii)     transactions
    with customers, clients, suppliers or purchasers or sellers of
    goods or services, in each case in the ordinary course of
    business and otherwise in compliance with the terms of the
    Indenture, which are fair to the Company and its Restricted
    Subsidiaries in the reasonable determination of the Board of
    Directors or the senior management of the Company, or are on
    terms at least as favorable as might reasonably have been
    obtained at such time from an unaffiliated party.
Liens.
The Indenture
will provide that the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly,
create, Incur or suffer to exist any Lien on any asset or
property of the Company or such Restricted Subsidiary, or any
income or profits therefrom, or assign or convey any right to
receive income therefrom, that secures any Indebtedness of the
Company or any of its Subsidiaries (other than Senior
Indebtedness) unless the Notes are equally and ratably secured
with (or on a senior basis to, in the case of Indebtedness
subordinated in right of payment to the Notes) the Indebtedness
so secured or until such time as such Indebtedness is no longer
secured by a Lien. The preceding sentence will not require the
Company or any Restricted Subsidiary to secure the Notes if the
Lien consists of a Permitted Lien.
The Indenture will provide that no Guarantor will
directly or indirectly create, Incur or suffer to exist any
Lien on any asset or property of such Guarantor or any income or
profits therefrom, or assign or convey any right to receive
income therefrom, that secures any Indebtedness of such
Guarantor (other than Senior Indebtedness of such Guarantor)
unless the Guarantee of such Guarantor is equally and ratably
secured with (or on a senior basis to, in the case of
Indebtedness subordinated on right of payment to such
Guarantor's Guarantee) the Indebtedness so secured or until
such time as such Indebtedness is no longer secured by a Lien.
The preceding sentence will not require any Guarantor to secure
its Guarantee if the Lien consists of a Permitted Lien.
Reports and Other
Information.
The Indenture will
provide that notwithstanding that the Company may not be subject
to the reporting requirements of Section 13 or 15(d) of the
Exchange Act or otherwise report on an annual and quarterly
basis on forms provided for such annual and quarterly reporting
pursuant to rules and regulations promulgated by the Commission,
the Company will file with the Commission, documents and reports
that are specified in Sections 13 and 15(d) of the Exchange
Act within the time periods specified therein; provided,
however, the Company shall not be so obligated to file such
documents and other reports with the Commission if the
Commission does not permit such filing, in which event the
Company will make available such information to prospective
purchasers of Notes, in addition to providing such information
to the Trustee and the Holders, in each case within 15 days
after the time the Company would be required to file such
information with the Commission if it were subject to
Section 13 or 15(d) of the Exchange Act.
Future Guarantors.
The Indenture will provide that the Company will cause each
Restricted Subsidiary organized under the laws of the United
States of America or any state or territory thereof that has
Total Assets of more than $500,000 to execute and deliver to the
Trustee a supplemental indenture pursuant to which such
Subsidiary will guarantee payment of the Notes. Each Guarantee
will be limited to an amount not to exceed the maximum amount
that can be guaranteed by that Subsidiary without rendering the
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Guarantee, as it relates to such Subsidiary,
voidable under applicable law relating to fraudulent conveyance
or fraudulent transfer or similar laws affecting the rights of
creditors generally.
Merger, Consolidation, or Sale of All or
Substantially All Assets
The Indenture will provide that the Company may
not consolidate or merge with or into or wind up into (whether
or not the Company is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more
related transactions, to any Person unless (i) the Company
is the surviving corporation or the Person formed by or
surviving any such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer, lease,
conveyance or other disposition will have been made is a
corporation, partnership or limited liability company organized
or existing under the laws of the United States, any state
thereof, the District of Columbia, or any territory thereof (the
Company or such Person, as the case may be, being herein called
the "Successor Company"); (ii) the Successor
Company (if other than the Company) expressly assumes all the
obligations of the Company under the Indenture and the Notes
pursuant to a supplemental indenture or other documents or
instruments in form reasonably satisfactory to the Trustee;
(iii) immediately after giving effect to such transaction
(and treating any Indebtedness which becomes an obligation of
the Successor Company or any of its Restricted Subsidiaries as a
result of such transaction as having been Incurred by the
Successor Company or such Restricted Subsidiary at the time of
such transaction) no Default or Event of Default shall have
occurred and be continuing; (iv) immediately after giving
pro forma effect to such transaction, as if such transaction had
occurred at the beginning of the applicable four-quarter period,
either (A) the Successor Company would be permitted to
Incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first sentence
of the covenant described under "—Limitations on
Incurrence of Indebtedness and Issuance of Disqualified Stock
and Preferred Stock" or (B) the Fixed Charge Coverage
Ratio for the Successor Company and its Restricted Subsidiaries
would be greater than or equal to such ratio for the Company and
its Restricted Subsidiaries immediately prior to such
transaction; (v) each Guarantor, unless it is the other
party to the transactions described above, shall have by
supplemental indenture confirmed that its Guarantee shall apply
to the Successor Company's obligations under the Indenture
and the Notes; and (vi) the Company shall have delivered to
the Trustee an Officers' Certificate and an Opinion of
Counsel, each slating that such consolidation, merger or
transfer and such supplemental indenture (if any) comply with
the Indenture. The Successor Company will succeed to, and be
substituted for, the Company under the Indenture and the Notes.
Notwithstanding the foregoing clauses (iii) and (iv),
(a) any Restricted Subsidiary may consolidate with, merge
into or transfer all or part of its properties and assets to the
Company or to another Restricted Subsidiary and (b) the
Company may merge with an Affiliate incorporated solely for the
purpose of reincorporating the Company in another state of the
United States or changing the form of organization of the
Company to a corporation, partnership or limited liability
company so long as the amount of Indebtedness of the Company and
its Restricted Subsidiaries is not increased thereby.
The Indenture will further provide that, subject
to certain limitations described in the Indenture governing
release of a Guarantee upon the sale or disposition of a
Guarantor, each Guarantor will not, and the Company will not
permit a Guarantor to, consolidate or merge with or into or wind
up into (whether or not such Guarantor is the surviving
corporation), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties
or assets in one or more related transactions to, any Person
unless (i) such Guarantor is the surviving corporation or
the Person formed by or surviving any such consolidation or
merger (if other than such Guarantor) or to which such sale,
assignment, transfer, lease, conveyance or other disposition
will have been made is a corporation, partnership or limited
liability company organized or existing under the laws of the
United States, any state thereof, the District of Columbia, or
any territory thereof (such Guarantor or such Person, as the
case may be, being herein called the "Successor
Guarantor"); (ii) the Successor Guarantor (if other
than such Guarantor) expressly assumes all the obligations of
such Guarantor under the Indenture and such Guarantor's
Guarantee pursuant to a supplemental indenture or other
documents or instruments in form reasonably satisfactory to the
Trustee; (iii) immediately after giving effect to such
transaction (and treating any Indebtedness which
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becomes an obligation of the Successor Guarantor
or any of its Subsidiaries as a result of such transaction as
having been Incurred by the Successor Guarantor or such
Subsidiary at the time of such transaction) no Default or Event
of Default shall have occurred and be continuing; and
(iv) the Guarantor shall have delivered or caused to be
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. Subject to certain limitations described in the
Indenture, the Successor Guarantor will succeed to, and be
substituted for, such Guarantor under the Indenture and such
Guarantor's Guarantee. Notwithstanding the foregoing
clause (iii), a Guarantor may merge with an Affiliate
incorporated solely for the purpose of reincorporating such
Guarantor in another state of the United States or changing the
form of organization of the Guarantor to a corporation,
partnership or limited liability company so long as the amount
of Indebtedness of the Guarantor is not increased thereby.
Defaults
An Event of Default will be defined in the
Indenture as
(i)     a default in any
    payment of interest on any Note when due, whether or not
    prohibited by the provisions described under
    "—Ranking" above, continued for 30 days,
    subject to the interest deferral provisions contained in the
    Indenture; provided, however, that a default in any payment of
    interest on the Note required to be made on
    (x)                     ,
    2009, and (y) any interest payment date
    after                     ,
    2009, at a time when interest deferral would be prohibited under
    the Indenture shall immediately constitute an Event of Default
    (without regard to the length of time for which such default
    continues),
(ii)     a default in
    the payment of principal or premium, if any, of any Note when
    due at its Stated Maturity, upon optional redemption, upon
    required repurchase, upon declaration or otherwise, whether or
    not such payment is prohibited by the provisions described under
    "—Ranking" above,
(iii)     the failure by
    the Company to comply with its obligations under the covenant
    described under "—Merger, Consolidation or Sale of All
    or Substantially All Assets" above,
(iv)     the failure by
    the Company to comply for 30 days after notice with any of
    its obligations under the covenants described under
    "—Change of Control" above (other than a failure
    to purchase Notes),
(v)     the failure by
    the Company to comply for 60 days after notice with its
    other agreements contained in the Notes or the Indenture,
(vi)     the failure by
    the Company or any Significant Subsidiary to pay any
    Indebtedness (other than Indebtedness owing to the Company or a
    Restricted Subsidiary) within any applicable grace period after
    final maturity or the acceleration of any such Indebtedness by
    the holders thereof because of a default if the total amount of
    such Indebtedness unpaid or accelerated exceeds
    $           million
    or its foreign currency equivalent (the "cross acceleration
    provision"),
(vii)     certain events
    of bankruptcy, insolvency or reorganization of the Company or a
    Significant Subsidiary (the "bankruptcy provisions"),
(viii)     the rendering
    of any judgment or decree for the payment of money (other than
    judgments which are covered by enforceable insurance policies
    issued by solvent carriers) in excess of
    $        million or its
    foreign currency equivalent against the Company or a Significant
    Subsidiary if (A) an enforcement proceeding thereon is
    commenced and not discharged or stayed within 60 days
    thereafter or (B) such judgment or decree remains
    outstanding for a period of 60 days following such judgment
    and is not discharged, waived or stayed (the "judgment
    default provision"),
(ix)     any Guarantee
    ceases to be in full force and effect, except as contemplated by
    the terms thereof, or any Guarantor denies or disaffirms its
    obligations under the Indenture or any Guarantee and the Default
    continues for 10 Business Days, or
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(x)     the Company pays
    any dividend on shares of the Company's Capital Stock
    (A) during any interest deferral period or so long as any
    deferred interest and accrued interest thereon has not been paid
    in full, or (B) 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
    clause (c) or clauses (1) through (10) of the
    "Limitation on Restricted Payments" covenant.
The foregoing will constitute Events of Default
whatever the reason for any such Event of Default and whether it
is voluntary or involuntary or is effected by operation of law
or pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental
body.
However, a default under clauses (iv) or
(v) 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 in
clauses (iv) and (v) hereof after receipt of such
notice.
If an Event of Default (other than a Default
relating to certain events of bankruptcy, insolvency or
reorganization of the Company) occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of
the outstanding Notes by notice to the Company may declare the
principal of, premium, if any, and accrued but unpaid interest
on all the Notes to be due and payable. Upon such a declaration,
such principal, premium and interest will be due and payable
immediately. If an Event of Default relating to certain events
of bankruptcy, insolvency or reorganization of the Company
occurs, the principal of, premium, if any, and interest on all
the Notes will become immediately due and payable without any
declaration or other act on the part of the Trustee or any
Holders. 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.
In the event of a declaration of acceleration of
the Notes because an Event of Default has occurred and is
continuing as a result of the acceleration of any Indebtedness
described in the cross acceleration provision, the declaration
of acceleration of the Notes shall be automatically annulled if
the holders of all Indebtedness described in the cross
acceleration provision have rescinded the declaration of
acceleration in respect of such Indebtedness within 30 Business
Days of the date of such declaration, and if the annulment of
the acceleration of the Notes would not conflict with any
judgment or decree of a court of competent jurisdiction, and all
existing Events of Default, except non-payment of principal or
interest on the Notes that became due solely because of the
acceleration of the Notes, have been cured or waived.
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
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 may pursue any
remedy with respect to the Indenture or the Notes unless
(i) such Holder has previously given the Trustee notice
that an Event of Default is continuing, (ii) Holders of at
least 25% in principal amount of the outstanding Notes have
requested the Trustee to pursue the remedy, (iii) such
Holders have offered the Trustee reasonable security or
indemnity against any loss, liability or expense, (iv) the
Trustee has not complied with such request within 60 days
after the receipt of the request and the offer of security or
indemnity, and (v) the 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 or that would involve the Trustee in personal liability.
Prior to taking any action under the Indenture, the Trustee will
be entitled to indemnification satisfactory to it in its sole
discretion against all losses and expenses caused by taking or
not taking such action.
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The Indenture will provide that if a Default
occurs and is continuing and is actually known to the Trustee,
the Trustee must mail to each Holder notice of the Default
within the earlier of 90 days after it occurs or
30 days after it is actually known to a Trust Officer or
written notice of it is received by the Trustee. Except in the
case of a Default in the payment of principal of, premium, if
any, or interest on any Note, the Trustee may withhold notice if
and so long as a committee of its Trust Officers in good faith
determines that withholding notice is in the interests of the
Noteholders. 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 Event of Default that occurred during the previous year.
The Company also 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 the Company is taking or proposes 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 of all series
affected by such amendment and any past default or compliance
with any provisions may be waived with the consent of the
Holders of a majority in principal amount of the Notes of all
series affected by such amendment then outstanding. However,
without the consent of each Holder of an outstanding Note
affected, no amendment may, among other things, (i) reduce
the amount of Notes whose Holders must consent to an amendment,
(ii) reduce the rate of or extend the time for payment of
interest on any Note, (iii) reduce the principal of or
extend the Stated Maturity of any Note, (iv) reduce the
premium payable upon the redemption of any Note or change the
time at which any Note may be redeemed as described under
"Optional Redemption" above, (v) make any Note
payable in money other than that stated in the Note,
(vi) make any change to the subordination provisions of the
Indenture that adversely affects the rights of any Holder,
(vii) impair the right of any Holder to receive payment of
principal of, premium, if any, 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, (viii) (A) 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 or during the
continuance of any Default or Event of Default or (B) waive
an Event of Default under clause (x) 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),
(ix) make any change in the amendment provisions which require
each Holder's consent or in the waiver provisions or (x)
modify the Guarantees in any manner adverse to the Holders.
Without the consent of any Holder, the Company
and Trustee may amend the Indenture to cure any ambiguity,
omission, defect or inconsistency, to provide for the assumption
by a successor corporation, partnership or limited liability
company of the obligations of the Company under the Indenture,
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 Internal Revenue Code, or in a manner
such that the uncertificated Notes are described in
Section 163(f)(2)(B) of the Internal Revenue Code), to add
Guarantees with respect to the Notes, to secure the Notes, to
add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power conferred upon the
Company, to make any change that does not adversely affect the
rights of any Holder, to comply with any requirement of the
Commission in connection with the qualification of the Indenture
under the Trust Indenture Act of 1939 or to make certain changes
to the Indenture to provide for the issuance of Additional
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 then outstanding unless the
holders of such Senior Indebtedness (or any group or
representative thereof authorized to give a consent) consent to
such change.
The consent of the Noteholders 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.
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After an amendment under the Indenture becomes
effective, the Company is required to mail to Noteholders a
notice briefly describing such amendment. However, the failure
to give such notice to all Noteholders, or any defect therein,
will not impair or affect the validity of the amendment.
Under the terms of the Credit Agreement, we will
not be permitted to effect any amendment or modification if the
effect would be to (i) increase the interest rate
applicable to the Notes or any deferred interest on the Notes,
(ii) change to an earlier date the scheduled dates of
payment on any component of principal, interest or other amounts
on the Notes, (iii) increase principal repayments or
amortization payments on the Notes, (iv) alter the
redemption, prepayment or subordination provisions of the Notes,
(v) add to or alter the covenants (including, without
limitation, the financial covenants), defaults and Events of
Defaults set forth in the Indenture in a manner that would make
such provisions more onerous or restrictive to the Company, or
(vi) otherwise increase the obligations of the Company or
any Guarantor in respect of the Notes, the deferred interest on
the Notes or confer additional rights upon the holders thereof
which individually or in the aggregate would be adverse to the
Company, any Guarantor or the lenders of the Senior Lender
Indebtedness.
Defeasance
The Company at any time 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. The Company
at any time may terminate its obligations under the covenants
described under "Certain Covenants" and "Change
of Control," the operation of the cross acceleration
provision, the bankruptcy provisions with respect to
Subsidiaries and the judgment default provision described under
"—Defaults" above and the limitations contained
in clause (iv) of the first paragraph under "Merger,
Consolidation or Sale of All or Substantially All Assets"
above ("covenant defeasance"). 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 Guarantee.
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 (iv), (vi), (vii) with respect only to
Significant Subsidiaries or (viii) with respect only to
Significant Subsidiaries under "—Defaults" above
or because of the failure of the Company to comply with
clause (iv) of the first paragraph under
"—Merger, Consolidation or Sale of All or
Substantially All Assets" above.
In order to exercise either defeasance option,
the Company must irrevocably deposit in trust (the
"defeasance trust") with the Trustee money or
U.S. Government Obligations for the payment of principal,
premium (if any) and interest on the Notes to redemption or
maturity, as the case may be, and must comply with certain other
conditions, including (i) 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 U.S. federal income
tax purposes as a result of such deposit and defeasance and will
be subject to U.S. federal income tax on the same amount
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 U.S. federal income tax law) and
(ii) so long as, on the date or dates the respective
amounts were paid into the trust, such payments were made with
respect to the Notes without violating the subordination
provisions of the Indenture or any other material agreement
binding on the Company (except for violations of the Indenture
as a result of the borrowing of funds to be applied to such
payments), including the Credit Facilities.
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Satisfaction and Discharge
The Indenture will be discharged and will cease
to be of further effect as to all Notes issued thereunder, when:
(1)     either:
(a)     all Notes that
    have been authenticated (except lost, stolen or destroyed Notes
    that have been replaced or paid and Notes for whose payment
    money has theretofore been deposited in trust and thereafter
    repaid to the Company) have been delivered to the Trustee for
    cancellation; or
(b)     all Notes that
    have not been delivered to the Trustee for cancellation have
    become due and payable by reason of the making of a notice of
    redemption or otherwise or will become due and payable within
    one year and the Company or any Guarantor has irrevocably
    deposited or caused to be deposited with the Trustee as trust
    funds in trust solely for the benefit of the Holders, Cash
    Equivalents, Investment Grade Securities, or a combination
    thereof, in such amounts as will be sufficient without
    consideration of any reinvestment of interest, to pay and
    discharge the entire indebtedness on the Notes not delivered to
    the Trustee for cancellation for principal, premium and
    additional interest, if any, and accrued interest to the date of
    maturity or redemption;
(2)     no Event of
    Default (other than one resulting solely from the borrowing of
    funds to provide such deposit) shall have occurred and be
    continuing on the date of such deposit or shall occur as a
    result of such deposit and such deposit will not result in a
    breach or violation of, or constitute a default under, any other
    instrument to which the Company or any Guarantor is a party or
    by which the Company or any Guarantor is bound;
(3)     the Company or
    any Guarantor has paid or caused to be paid all sums payable by
    it under the Indenture; and
(4)     the Company has
    delivered irrevocable instructions to the Trustee under the
    Indenture to apply the deposited money toward the payment of the
    Notes at maturity or the redemption date, as the case may be.
Concerning the Trustee
is
to be the Trustee under the Indenture.
Governing Law
The Indenture will provide that it and the Notes
will be governed by, and construed in accordance with, the laws
of the State of New York.
Certain Definitions
"Acquired Indebtedness" means, with
respect to any specified Person:
(i)     Indebtedness of
    any other Person existing at the time such other Person is
    merged with or into or becomes a Restricted Subsidiary of such
    specified Person; and
(ii)     Indebtedness
    secured by a Lien encumbering any asset acquired by such
    specified Person,
in each case, other than Indebtedness Incurred as
consideration in, in contemplation of, 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 otherwise acquired by such Person, or such asset was
acquired by such person, as applicable.
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"Adjusted EBITDA" means, with respect
to any Person for any period, the Consolidated Net Income of
such Person for such period plus, without duplication:
(i)
provision for taxes based on income or profits of
    such Person for such period deducted in computing Consolidated
    Net Income, plus
(ii)
Consolidated Interest Expense (plus amortization
    of deferred financing fees) of such Person for such period to
    the extent the same was deducted in computing Consolidated Net
    Income, plus
(iii)
Consolidated Depreciation and Amortization
    Expense of such Person for such period to the extent such
    Consolidated Depreciation and Amortization Expense was deducted
    in computing Consolidated Net Income, plus
(iv)
any non-recurring fees, expenses or charges
    deducted in such period in computing Consolidated Net Income,
    plus
(v)     any other
    non-cash charges reducing Consolidated Net Income for such
    period (excluding any such charge which requires an accrual of,
    or cash reserve for, anticipated cash charges for any future
    period); plus
(vi)     the difference
    between (A) Net Cash Interest Margin of such Person and its
    Restricted Subsidiaries from equipment promissory notes that
    were sold to special-purpose bankruptcy remote entities and
    (B) the gain on sale accounting resulting from the sale of
    promissory notes to such SPEs in accordance with GAAP.
Notwithstanding the foregoing, the provision for
taxes based on the income or profits of, and the depreciation
and amortization of, a Subsidiary of the Company shall be added
to Consolidated Net Income to compute Adjusted EBITDA only to
the extent (and in the same proportion) that the Net Income of
such Subsidiary was included in calculating Consolidated Net
Income.
"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 purposes of this definition,
"control" (including, with correlative meanings, the
terms "controlling," "controlled by" and
"under common control with"), as used with respect to
any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise.
"Asset Sale" means:
(i)     the sale,
    conveyance, transfer or other disposition (whether in a single
    transaction or a series of related transactions) of property or
    assets (including by way of a Sale/Leaseback Transaction) of the
    Company or any Restricted Subsidiary not in the ordinary course
    of business (each referred to in this definition as a
    "disposition"); or
(ii)     the issuance or
    sale of Equity Interests of any Restricted Subsidiary (other
    than to the Company or another Restricted Subsidiary) (whether
    in a single transaction or a series of related transactions), in
    each case other than:
(1)     a disposition of
    Cash Equivalents or Investment Grade Securities or obsolete or
    worn out equipment in the ordinary course of business;
(2)     the disposition
    of all or substantially all of the assets of the Company in a
    manner permitted pursuant to the provisions described above
    under "—Merger, Consolidation or Sale of All or
    Substantially All Assets" or any disposition that
    constitutes a Change of Control;
(3)     any Restricted
    Payment or Permitted Investment that is permitted to be made,
    and is made, under the covenant described above under
    "Limitation on Restricted Payments";
(4)     any disposition
    of assets with an aggregate Fair Market Value of less than
    $        million;
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(5)     any disposition
    of property or assets by a Restricted Subsidiary to the Company
    or by the Company or a Restricted Subsidiary to a Restricted
    Subsidiary;
(6)     any exchange of
    like-kind property pursuant to Section 1031 of the Internal
    Revenue Code of 1986, as amended, for use in a Similar Business;
(7)     sales of assets
    received by the Company upon the foreclosure on a Lien;
(8)     any sale of
    Equity Interests in, or Indebtedness or other securities of, an
    Unrestricted Subsidiary;
(9)     licenses of
    intellectual property;
(10)     any disposition
    of Designated Noncash Compensation; and
(11)     sales of
    inventory in the ordinary course of business consistent with
    past practices and sales of equipment upon termination of a
    contract with a client entered into in the ordinary course of
    business pursuant to the terms of such contract.
"Base Dividend Restricted Payments
Basket" shall initially equal $0, provided, however, that
if during any fiscal quarter the Company has paid dividends on
the Company's Common Stock in an aggregate amount that is
less than the Quarterly Base Dividend Level for such quarter, an
amount equal to the difference between (i) the Quarterly
Base Dividend Level for such quarter and (ii) the aggregate
amount of dividends actually paid on the Company's Common
Stock during such quarter shall be added to the Base Dividend
Restricted Payments Basket as of the last day of such fiscal
quarter.
"Board of Directors" means the Board of
Directors of the Company or any committee thereof duly
authorized to act on behalf of such Board.
"Borrowing Base" means the product of
(i) Adjusted EBITDA for the most recent four fiscal
quarters for which internal financial statements are available
and (ii) three.
"Business Day" means a day other than a
Saturday, Sunday or other day on which banking institutions in
New York State are authorized or required by law to close.
"Capitalized Lease Obligation" means,
at the time any determination thereof is to be made, the amount
of the liability in respect of a capital lease that would at
such time be required to be capitalized and reflected as a
liability on a balance sheet (excluding the footnotes thereto)
in accordance with GAAP.
"Capital Expenditures" means any
expenditure required to be classified as a capital expenditure
in accordance with GAAP.
"Capital Stock" means:
(i)     in the case of a
    corporation, corporate stock, including, without limitation,
    corporate stock represented by IDSs and corporate stock
    outstanding upon the separation of IDSs into the securities
    represented thereby;
(ii)     in the case of
    an association or business entity, any and all shares,
    interests, participations, rights or other equivalents (however
    designated) of corporate stock;
(iii)     in the case of
    a partnership or limited liability company, partnership or
    membership interests (whether general or limited); and
(iv)     any other
    interest or participation that confers on a Person the right to
    receive a share of the profits and losses of, or distributions
    of assets of, the issuing Person.
"Cash Equivalents" means:
(i)     U.S. dollars
    and foreign currency exchanged into U.S. dollars within
    180 days;
(ii)     securities
    issued or directly and fully guaranteed or insured by the United
    States government or any agency or instrumentality thereof;
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(iii)     certificates
    of deposit, time deposits and eurodollar time deposits with
    maturities of one year or less from the date of acquisition,
    bankers' acceptances with maturities not exceeding one year
    and overnight bank deposits, in each case with any commercial
    bank having capital and surplus in excess of $500.0 million
    and whose long-term debt is rated at least "A" or the
    equivalent thereof by Moody's or S&P;
(iv)     repurchase
    obligations for underlying securities of the types described in
    clauses (ii) and (iii) above entered into with any
    financial institution meeting the qualifications specified in
    clause (iii) above;
(v)     commercial paper
    issued by a corporation (other than an Affiliate of the Company)
    rated at least "A-2" or the equivalent thereof by
    Moody's or S&P and in each case maturing within one
    year after the date of acquisition;
(vi)     investment
    funds investing at least 95% of their assets in securities of
    the types described in clauses (i) through (v) above;
(vii)     readily
    marketable direct obligations issued by any state of the United
    States of America or any political subdivision thereof having
    one of the two highest rating categories obtainable from either
    Moody's or S&P; and
(viii)     Indebtedness
    or preferred stock issued by Persons with a rating of
    "A" or higher from S&P or "A-2" or
    higher from Moody's.
"Company" means Alliance Laundry
Holdings Inc. until a successor replaces it and, thereafter,
means the successor and, for purposes of any provision contained
in the Indenture and required by the Trust Indenture Act, each
other obligor on the Notes.
"Consolidated Depreciation and Amortization
Expense" means with respect to any Person for any period,
the total amount of depreciation and amortization expense of
such Person and its Restricted Subsidiaries for such period on a
consolidated basis and otherwise determined in accordance with
GAAP.
"Consolidated Interest Expense" means,
with respect to any Person for any period, the sum, without
duplication, of: (i) consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, to the
extent such expense was deducted in computing Consolidated Net
Income (including amortization of original issue discount, the
interest component of Capitalized Lease Obligations (or any
financing lease which has substantially the same economic effect
as a Capitalized Lease Obligation) and net payments and receipts
(if any) pursuant to Hedging Obligations and excluding
amortization of deferred financing fees), and
(ii) consolidated capitalized interest of such Person and
its Restricted Subsidiaries for such period, whether paid or
accrued.
"Consolidated Net Income" means, with
respect to any Person for any period, the aggregate of the Net
Income of such Person and its Restricted Subsidiaries for such
period, on a consolidated basis; provided, however, that:
(i)     any net
    after-tax extraordinary gains or losses (less all fees and
    expenses relating thereto) shall be excluded;
(ii)     any increase in
    amortization or depreciation resulting from purchase accounting
    in relation to any acquisition that is consummated after the
    Issue Date, net of taxes, shall be excluded;
(iii)     the Net Income
    for such period shall not include the cumulative effect of a
    change in accounting principles during such period;
(iv)     any net
    after-tax income or loss from discontinued operations and any
    net after-tax gains or losses on disposal of discontinued
    operations shall be excluded;
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(v)     any net
    after-tax gains or losses (less all fees and expenses relating
    thereto) attributable to asset dispositions other than in the
    ordinary course of business (as determined in good faith by the
    Board of Directors) shall be excluded; and
(vi)     the Net Income
    for such period of any Person that is not a Subsidiary of such
    Person, or is an Unrestricted Subsidiary, or that is accounted
    for by the equity method of accounting, shall be included only
    to the extent of the amount of dividends or distributions or
    other payments paid in cash (or to the extent converted into
    cash) to the referent Person or a Restricted Subsidiary thereof
    in respect of such period; and
"Continuing Directors" means, as of any
date of determination, any member of the Company's Board of
Directors who:
(i)     was a member of
    the Company's Board of Directors on the date of the
    Indenture; or
(ii)     was nominated
    for election or elected to the Board of Directors with the
    affirmative vote of at least a majority of the Continuing
    Directors who were members of the Company's Board of
    Directors at the time of the nomination or election.
"Contribution Indebtedness" means
Indebtedness of the Company in an aggregate principal amount not
greater than the amount of all Specified Cash Contributions,
provided that such Contribution Indebtedness (i) has a
Stated Maturity later than the Stated Maturity of the Notes,
(ii) is Incurred substantially concurrently with such
Specified Cash Contributions, and (iii) is so designated as
Contribution Indebtedness pursuant to an Officers'
Certificate on the Incurrence date thereof.
"Credit Agreement" means the credit
agreement to be dated as
of                     ,
2004, as amended, restated, supplemented, waived, replaced,
restructured, repaid, increased, refunded, refinanced or
otherwise modified from time to time (whether or not terminated
and whether with the original lenders or otherwise), among the
Company, the Subsidiaries of the Company named therein, the
financial institutions from time to time a party thereto
and           ,
as Administrative Agent, Fronting Bank and Swingline Lender,
including any successor or replacement facility extending the
maturity thereof or otherwise restructuring all or any portion
of the Indebtedness under such agreement or increasing the
amount of available borrowings thereunder (except to the extent
that any such amendment, restatement, supplement, waiver,
replacement, refunding, refinancing or other modification
thereto would be prohibited by the terms of the Indenture,
unless otherwise agreed to by the Holders of at least a majority
in aggregate principal amount of Notes at the time outstanding).
"Credit Facilities" means, one or more
debt facilities (including, without limitation, the Credit
Agreement and indentures or debt securities) or commercial paper
facilities, in each case with banks or other institutional
lenders providing for revolving credit loans, term debt,
receivables financing (including through the sale of receivables
to such lenders or to special purpose entities formed to borrow
from such lenders against such receivables) or letters of
credit, in each case, as amended, restated, modified, renewed,
refunded, replaced or refinanced in whole or in part from time
to time, including any refunding, replacement or refinancing
thereof through the issuance of debt securities.
"Default" means any event which is, or
after notice or passage of time or both would be, an Event of
Default.
"Designated Noncash Consideration"
means the Fair Market Value of noncash consideration received by
the Company or one of its Restricted Subsidiaries in connection
with an Asset Sale that is so designated as Designated Noncash
Consideration pursuant to an Officers' Certificate, setting
forth the basis of such valuation, less the amount of Cash
Equivalents received in connection with a subsequent sale of
such Designated Noncash Consideration.
"Designated Preferred Stock" means
Preferred Stock of the Company (other than Disqualified Stock)
that is issued (other than to a Subsidiary of the Company or an
employee stock ownership plan or trust established by the
Company or any of its Subsidiaries) and is so designated as
Designated Preferred Stock, pursuant to an Officers'
Certificate, on the issuance date thereof, the proceeds of which
are excluded from
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the calculation set forth in clause (c) of
the covenant described under "—Limitation on
Restricted Payments."
"Designated Senior Indebtedness" means
(i) the Senior Lender Indebtedness and (ii) any other
Senior Indebtedness of the Company with a principal amount in
excess of $25 million.
"Disqualified Stock" means, with
respect to any Person, any Capital Stock of such Person which,
by its terms (or by the terms of any security into which it is
convertible or for which it is redeemable or exchangeable), or
upon the happening of any event;
(i)     matures or is
    mandatorily redeemable, pursuant to a sinking fund obligation or
    otherwise;
(ii)     is convertible
    or exchangeable for Indebtedness or Disqualified Stock; or
(iii)     is redeemable
    at the option of the holder thereof, in whole or in part, in
    each case prior to the first anniversary of the maturity date of
    the Notes;
provided, however, that only the portion of
Capital Stock which so matures or is mandatorily redeemable, is
so convertible or exchangeable or is so redeemable at the option
of the holder thereof prior to such dates shall be deemed to be
Disqualified Stock; provided further, however, that if such
Capital Stock is issued to any employee or to any plan for the
benefit of employees of the Company or its Subsidiaries or by
any such plan to such employees, such Capital Stock shall not
constitute Disqualified Stock solely because it may be required
to be repurchased by the Company in order to satisfy applicable
statutory or regulatory obligations or as a result of such
employee's termination, death or disability.
Notwithstanding clause (iii) of this definition, any
Capital Stock that would constitute Disqualified Stock solely
because the holders thereof have the right to require the
Company to repurchase such Capital Stock upon the occurrence of
a change of control or an asset sale shall not constitute
Disqualified Stock if the terms of such Capital Stock provide
that the Company may not repurchase or redeem any such Capital
Stock pursuant to such provisions unless such repurchase or
redemption complies with the covenant described above under the
caption "—Certain Covenants—Restricted
Payments."
"Equity Interests" means Capital Stock
and all warrants, options or other rights to acquire Capital
Stock (but excluding any debt security that is convertible into,
or exchangeable for, Capital Stock).
"Excess Cash" shall mean, with respect
to any period, Adjusted EBITDA minus the sum of (i) cash
interest expense, (ii) cash income tax expense,
(iii) Capital Expenditures (except to the extent financed
with an incurrence of indebtedness) and (iv) dividends on
our shares of Preferred Stock, in each case, for such period.
"Excluded Contributions" means the net
cash proceeds received by the Company after the Issue Date from
(i) contributions to its common equity capital and
(ii) the sale (other than to a Subsidiary of the Company or
to any Company or Subsidiary management equity plan or stock
incentive plan or any other management or employee benefit plan
or agreement) of Capital Stock (other than Disqualified Stock
and Designated Preferred Stock) of the Company, in each case
designated as Excluded Contributions pursuant to an
Officers' Certificate executed by an Officer of the
Company, the proceeds of which are excluded from the calculation
set forth in clause (c) of the first paragraph of the
"—Limitation on Restricted Payments" covenant.
"Fair Market Value" means, with respect
to any asset or property, the price which could be negotiated in
an arm's-length, free market transaction, for cash, between
a willing seller and a willing and able buyer, neither of whom
is under undue pressure or compulsion to complete the
transaction.
"Fixed Charge Coverage Ratio" means,
with respect to any Person for any period, the ratio of Adjusted
EBITDA of such Person for such period to the Fixed Charges of
such Person for such period. In the event that the Company or
any of its Restricted Subsidiaries Incurs or redeems any
Indebtedness (other than in the case of revolving credit
borrowings, in which case interest expense shall be computed
based upon the average daily balance of such Indebtedness during
the applicable period) or issues or redeems Preferred Stock
subsequent to the commencement of the period for which the Fixed
Charge Coverage Ratio is being
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calculated but prior to the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage
Ratio shall be calculated giving pro forma effect to such
Incurrence or redemption of Indebtedness, or such issuance or
redemption of Preferred Stock, as if the same had occurred at
the beginning of the applicable four-quarter period.
For purposes of making the computation referred
to above, Investments, acquisitions, dispositions, mergers,
consolidations and discontinued operations (as determined in
accordance with GAAP), in each case with respect to an operating
unit of a business, that have been made by the Company or any of
its Restricted Subsidiaries during the four-quarter reference
period or subsequent to such reference period and on or prior to
or simultaneously with the Calculation Date shall be calculated
on a pro forma basis assuming that all such Investments,
acquisitions, dispositions, discontinued operations, mergers and
consolidations (and the reduction of any associated fixed charge
obligations and the change in Adjusted EBITDA resulting
therefrom) had occurred on the first day of the four-quarter
reference period. If since the beginning of such period any
Person (that subsequently became a Restricted Subsidiary or was
merged with or into the Company or any Restricted Subsidiary
since the beginning of such period) shall have made any
Investment, acquisition or disposition, have discontinued any
operation, or have engaged in merger or consolidation, in each
case with respect to an operating unit of a business, that would
have required adjustment pursuant to this definition, then the
Fixed Charge Coverage Ratio shall be calculated giving pro forma
effect thereto for such period as if such Investment,
acquisition, disposition, discontinued operation, merger or
consolidation had occurred at the beginning of the applicable
four-quarter period.
For purposes of this definition, whenever pro
forma effect is to be given to any transaction, the pro forma
calculations shall be made in good faith by a responsible
financial or accounting officer of the Company. 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 Calculation Date
had been the applicable rate for the entire period (taking into
account any Hedging Obligations applicable to such Indebtedness
if such Hedging Obligation has a remaining term in excess of
12 months). Interest on a Capitalized Lease Obligation
shall be deemed to accrue at an interest rate reasonably
determined by a responsible financial or accounting officer of
the Company to be the rate of interest implicit in such
Capitalized Lease Obligation in accordance with GAAP.
For purposes of making the computation referred
to above, interest on any Indebtedness under a revolving credit
facility computed on a pro forma basis shall be computed based
upon the average daily balance of such Indebtedness during the
applicable period. Interest on Indebtedness that may optionally
be determined at an interest rate based upon a factor of a prime
or similar rate, a eurocurrency interbank offered rate, or other
rate, shall be deemed to have been based upon the rate actually
chosen, or, if none, then based upon such optional rate chosen
as the Company may designate. Any such pro forma calculation may
include adjustments appropriate, in the reasonable determination
of the Company as set forth in an Officers' Certificate, to
reflect operating expense reductions reasonably expected to
result from any acquisition or merger.
"Fixed Charges" means, with respect to
any Person for any period, the sum of (i) Consolidated
Interest Expense of such Person for such period and
(ii) all cash dividend payments (excluding items eliminated
in consolidation) on any series of Preferred Stock or
Disqualified Stock of such Person and its Subsidiaries.
"GAAP" means generally accepted
accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity
as have been approved by a significant segment of the accounting
profession, which are in effect on the Issue Date. For the
purposes of the Indenture, the term "consolidated"
with respect to any Person shall mean such Person consolidated
with its Restricted Subsidiaries, and shall not include any
Unrestricted Subsidiary, but the interest of such Person in an
Unrestricted Subsidiary will be accounted for as an Investment.
"guarantee" means a guarantee (other
than by endorsement of negotiable instruments for collection in
the ordinary course of business), direct or indirect, in any
manner (including, without limitation, letters of
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credit and reimbursement agreements in respect
thereof), of all or any part of any Indebtedness or other
obligations.
"Guarantee" means any guarantee of the
obligations of the Company under the Indenture and the Notes by
any Person in accordance with the provisions of the Indenture.
"Guarantor" means any Person that
Incurs a Guarantee; provided that upon the release or discharge
of such Person from its Guarantee in accordance with the
Indenture, such Person ceases to be a Guarantor.
"Hedging Obligations" means, with
respect to any Person, the obligations of such Person under
(i) currency exchange, interest rate or commodity swap
agreements, currency exchange, interest rate or commodity cap
agreements and currency exchange, interest rate or commodity
collar agreements and (ii) other agreements or arrangements
designed to protect such Person against fluctuations in currency
exchange, interest rates or commodity prices.
"Holder" or "Noteholder"
means the Person in whose name a Note is registered on the
Registrar's books.
"IDS" means the Company's Income
Deposit Securities, whether currently outstanding or as may be
issued from time to time.
"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 Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such person at the time it becomes a Subsidiary.
"Indebtedness" means, with respect to
any Person:
(i)     the principal
    and premium (if any) of any indebtedness of such Person, whether
    or not contingent:
(1)     in respect of
    borrowed money;
(2)     evidenced by
    bonds, notes, debentures or similar instruments or letters of
    credit or bankers' acceptances (or, without duplication,
    reimbursement agreements in respect thereof);
(3)     representing the
    deferred and unpaid purchase price of any property, except any
    such balance that constitutes a trade payable or similar
    obligation to a trade creditor or an accrued expense;
(4)     in respect of
    Capitalized Lease Obligations; or
(5)     representing any
    Hedging Obligations,
if and to the extent that any of the foregoing
Indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability on a balance sheet
(excluding the footnotes thereto) of such Person prepared in
accordance with GAAP;
(ii)     to the extent
    not otherwise included, any obligation of such Person to be
    liable for, or to pay, as obligor, guarantor or otherwise, on
    the Indebtedness of another Person (other than by endorsement of
    negotiable instruments for collection in the ordinary course of
    business); and
(iii)     to the extent
    not otherwise included, Indebtedness of another Person
    secured by a Lien on any asset owned by such Person (whether or
    not such Indebtedness is assumed by such Person); provided,
    however, that the amount of such Indebtedness will be the lesser
    of (a) the Fair Market Value of such asset at such date of
    determination and (b) the amount of such Indebtedness of
    such other Person; provided, further, that any obligation of the
    Company or any Restricted Subsidiary in respect of
    (i) minimum guaranteed commissions, or other similar
    payments, to clients, minimum returns to clients or stop loss
    limits in favor of clients or indemnification obligations to
    clients, in each case pursuant to contracts to provide services
    to clients entered into in the ordinary course of business, and
    (ii) account credits to participants under the LTIP or any
    successor or similar compensation plan, shall be deemed not to
    constitute Indebtedness.
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"Independent Financial Advisor" means
an accounting, appraisal or investment banking firm or
consultant to Persons engaged in a similar business of
nationally recognized standing that is, in the good faith
determination of the Company, qualified to perform the task for
which it has been engaged.
"Investment Grade Securities" means:
(i)     securities
    issued or directly and fully guaranteed or insured by the United
    States government or any agency or instrumentality thereof
    (other than Cash Equivalents);
(ii)     debt securities
    or debt instruments with a rating of BBB- or higher by S&P
    or Baa3 or higher by Moody's or the equivalent of such
    rating by such rating organization, or if no rating of S&P
    or Moody's then exists, the equivalent of such rating by
    any other nationally recognized securities rating agency, but
    excluding any debt securities or instruments constituting loans
    or advances among the Company and its Subsidiaries; and
(iii)     investments in
    any fund that invests exclusively in investments of the type
    described in clauses (i) and (ii) which fund may also
    hold cash.
"Investments" means, with respect to
any Person, all investments by such Person in other Persons
(including Affiliates) in the form of loans (including
guarantees), advances or capital contributions (excluding
accounts receivable, trade credit and advances to customers and
commission, travel and similar advances to officers, employees
and consultants made in the ordinary course of business),
purchases or other acquisitions for consideration (including
agreements providing for the adjustment of purchase price) of
Indebtedness, Equity Interests or other securities issued by any
other Person and investments that are required by GAAP to be
classified on the balance sheet of the Company in the same
manner as the other investments included in this definition to
the extent such transactions involve the transfer of cash or
other property.
For purposes of the definition of
"Unrestricted Subsidiary" and the covenant described
under "Limitation on Restricted Payments":
(i)     "Investments"
    shall include the portion (proportionate to the Company's
    equity interest in such Subsidiary) of the Fair Market Value of
    the net assets of a 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 (x) the Company's "Investment" in such
    Subsidiary at the time of such redesignation less (y) 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
(ii)     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.
"Issue Date" means the date on which
the Notes are authenticated.
"Lien" means, with respect to any
asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset, whether or not
filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing
of or agreement to give any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any
jurisdiction); provided that in no event shall an operating
lease be deemed to constitute a Lien.
"LTIP" means any long-term incentive or
similar compensation plan maintained by the Company or its
Restricted Subsidiaries.
"Maintenance Capital Expenditures"
means Capital Expenditures less non-recurring Capital
Expenditures.
"Moody's" means Moody's
Investors Service, Inc.
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"Net Cash Interest Margin" means
interest and fees earned on equipment promissory notes sold to
special-purpose bankruptcy remote entities less interest expense
payable to note holders of such entities less collection and
administrative expenses associated with said promissory notes by
such Person and its Restricted Subsidiaries.
"Net Debt" means, with respect to the
Company, on a consolidated basis at any time, the actual
outstanding amount of funded indebtedness, plus, without
duplication, the principal component of all Capitalized Lease
Obligations and, without duplication, other Indebtedness of the
Company and its Restricted Subsidiaries at such time, less
(i) any early termination payments that would be owed to
the Company and its subsidiaries if all outstanding Hedging
Obligations were terminated, and (ii) the amount of cash
and Cash Equivalents of the Company and its Subsidiaries on the
balance sheet as of the date of determination.
"Net Income" means, with respect to any
Person, the net income (loss) of such Person, determined in
accordance with GAAP and before any reduction in respect of
Preferred Stock dividends or other dividends.
"Net Proceeds" means the aggregate cash
proceeds received by the Company or any of its Restricted
Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received in respect of or upon the sale or
other disposition of any Designated Noncash Consideration
received in any Asset Sale and any cash payments received by way
of deferred payment of principal pursuant to a note or
installment receivable or otherwise, but only as and when
received, but excluding the assumption by the acquiring person
of Indebtedness relating to the disposed assets or other
considerations received in any other noncash form), net of the
direct costs relating to such Asset Sale and the sale or
disposition of such Designated Noncash Consideration (including,
without limitation, legal, accounting and investment banking
fees, and brokerage and sales commissions), and any relocation
expenses Incurred as a result thereof, taxes paid or payable as
a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements related
thereto), amounts required to be applied to the repayment of
principal, premium (if any) and interest on Indebtedness
required (other than pursuant to clause (i) of the second
paragraph of the covenant described under "—Asset
Sales") to be paid as a result of such transaction, and any
deduction of appropriate amounts to be provided by the Company
as a reserve in accordance with GAAP against any liabilities
associated with the asset disposed of in such transaction and
retained by the Company after such sale or other disposition
thereof, including, without limitation, pension and other
post-employment benefit liabilities and liabilities related to
environmental matters or against any indemnification obligations
associated with such transaction.
"Notes" means
the      % senior subordinated
notes of the Company, including any Additional Notes unless
expressly provided otherwise.
"Obligations" means any principal,
interest, penalties, fees, indemnifications, reimbursements
(including, without limitation, reimbursement obligations with
respect to letters of credit and bankers' acceptances),
damages and other liabilities payable under the documentation
governing any Indebtedness; provided that Obligations with
respect to the Notes shall not include fees or indemnifications
in favor of the Trustee and other third parties other than the
Holders of the Notes.
"Officer" means the Chairman of the
Board, the President, the Chief Financial Officer, any Executive
Vice President, Senior Vice President or Vice President, the
Treasurer or the Secretary of the Company.
"Officers' Certificate" means a
certificate signed on behalf of the Company by two Officers of
the Company, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company that meets the
requirements set forth in the Indenture.
"Opinion of Counsel" means a written
opinion from legal counsel. The counsel may be an employee of or
counsel to the Company.
"Pari Passu Indebtedness" means
(i) with respect to the Company, the Notes and any other
Indebtedness of the Company, other than Senior Indebtedness,
Secured Indebtedness or Subordinated Indebtedness of
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the Company and (ii) with respect to any
Guarantor, its Guarantee and any other Indebtedness of such
Guarantor, other than Senior Indebtedness, Secured Indebtedness
and Subordinated Indebtedness of such Guarantor.
"Permitted Asset Swap" means any one or
more transactions in which the Company or any Restricted
Subsidiary exchanges assets for consideration consisting of
(i) assets used or useful in a Similar Business and
(ii) any cash or Cash Equivalents, provided that such cash
or Cash Equivalents will be considered Net Proceeds from an
Asset Sale.
"Permitted Holders" means Bain Capital
Partners, LLC, Bruckman, Rosser, Sherrill & Co. LLC and
their respective affiliates.
"Permitted Investments" means:
(i)     any Investment
    in the Company or any Restricted Subsidiary;
(ii)     any Investment
    in Cash Equivalents or Investment Grade Securities;
(iii)     any Investment
    by the Company or any Restricted Subsidiary of the Company in a
    Person that is primarily engaged in a Similar Business if as a
    result of such Investment (a) such Person becomes a
    Restricted Subsidiary or (b) such Person, in one
    transaction or a series of related transactions, is merged,
    consolidated or amalgamated with or into, or transfers or
    conveys substantially all of its assets to, or is liquidated
    into, the Company or a Restricted Subsidiary;
(iv)     any Investment
    in securities or other assets not constituting Cash Equivalents
    and received in connection with an Asset Sale made pursuant to
    the provisions of "—Asset Sales" or any other
    disposition of assets not constituting an Asset Sale;
(v)     any Investment
    existing on the Issue Date;
(vi)     advances to
    employees not in excess of $10 million outstanding at any
    one time in the aggregate;
(vii)     any Investment
    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;
(viii)     Hedging
    Obligations;
(ix)     additional
    Investments having an aggregate Fair Market Value, taken
    together with all other Investments made pursuant to this
    clause (ix) that are at that time outstanding, not to
    exceed the greater
    of           %
    of Total Assets or
    $           million
    at the time of such Investment (with the Fair Market Value of
    each Investment being measured at the time made and without
    giving effect to subsequent changes in value);
(x)     loans and
    advances to officers, directors and employees for
    business-related travel expenses, moving expenses and other
    similar expenses, in each case Incurred in the ordinary course
    of business, and account credits and payments to participants
    under the LTIP or any successor or similar compensation plan;
(xi)     Investments the
    payment for which consists of Equity Interests of the Company
    (other than Disqualified Stock); provided, however, that such
    Equity Interests will not increase the amount available for
    Restricted Payments under clause (c) of the
    "—Limitation on Restricted Payments" covenant;
(xii)     any
    transaction to the extent it constitutes an Investment that is
    permitted by and made in accordance with the provisions of the
    second paragraph of the covenant described under
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"—Transactions with Affiliates"
    (except transactions described in clauses (ii),
    (iii) and (vi) of such paragraph);
(xiii)     Investments
    consisting of the licensing or contribution of intellectual
    property pursuant to joint marketing arrangements with other
    Persons;
(xiv)     Guarantees
    issued in accordance with "Limitations on Incurrence of
    Indebtedness and Issuance of Disqualified Stock and Preferred
    Stock";
(xv)     any Investment
    by Restricted Subsidiaries in other Restricted Subsidiaries and
    Investments by Subsidiaries that are not Restricted Subsidiaries
    in other Subsidiaries that are not Restricted
    Subsidiaries; and
(xvi)     Investments
    consisting of purchases and acquisitions of inventory, supplies,
    materials and equipment or purchases of contract rights or
    licenses or leases of intellectual property, in each case in the
    ordinary course of business.
"Permitted Junior Securities" shall
mean debt or equity securities of the Company or any successor
corporation issued pursuant to a plan of reorganization or
readjustment of the Company that are subordinated to the payment
of all then-outstanding Senior Indebtedness of the Company at
least to the same extent that the Notes are subordinated to the
payment of all Senior Indebtedness of the Company on the Issue
Date, so long as to the extent that any Senior Indebtedness of
the Company outstanding on the date of consummation of any such
plan of reorganization or readjustment is not paid in full in
cash on such date, either (a) the holders of any such
Senior Indebtedness not so paid in full in cash have consented
to the terms of such plan of reorganization or readjustment or
(b) such holders receive securities which constitute Senior
Indebtedness and which have been determined by the relevant
court to constitute satisfaction in full in cash of any Senior
Indebtedness not paid in full in cash.
"Permitted Liens" means, with respect
to any Person:
(a)     pledges or
    deposits by such Person under workmen's compensation laws,
    unemployment insurance laws or similar legislation, or good
    faith deposits in connection with bids, tenders, contracts
    (other than for the payment of Indebtedness) or leases to which
    such Person is a party, or deposits to secure public or
    statutory obligations of such Person or deposits of cash or
    United States government bonds to secure surety or appeal bonds
    to which such Person is a party, or deposits as security for
    contested taxes or import duties or for the payment of rent, in
    each case Incurred in the ordinary course of business;
(b)     Liens imposed by
    law, such as carriers', warehousemen's and
    mechanics' Liens, in each case for sums not yet due or
    being contested in good faith by appropriate proceedings or
    other Liens arising out of judgments or awards against such
    Person with respect to which such Person shall then be
    proceeding with an appeal or other proceedings for review;
(c)     Liens for taxes,
    assessments or other governmental charges not yet due or payable
    or subject to penalties for nonpayment or which are being
    contested in good faith by appropriate proceedings;
(d)     Liens in favor
    of issuers of performance and surety bonds or bid bonds or
    completion guarantees or with respect to other regulatory
    requirements or letters of credit issued pursuant to the request
    of and for the account of such Person in the ordinary course of
    its business;
(e)     minor survey
    exceptions, minor encumbrances, easements or reservations of, or
    rights of others for, licenses, rights-of-way, sewers, electric
    lines, telegraph and telephone lines and other similar purposes,
    or zoning or other restrictions as to the use of real properties
    or Liens incidental to the conduct of the business of such
    Person or to the ownership of its properties which were not
    Incurred in connection with Indebtedness and which do not in the
    aggregate materially adversely affect the value of said
    properties or materially impair their use in the operation of
    the business of such Person;
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(f)     Liens securing
    Indebtedness permitted to be incurred pursuant to
    clause (d) of the second paragraph of the covenant
    described under "—Limitations on Incurrence of
    Indebtedness and Issuance of Disqualified Stock and Preferred
    Stock";
(g)     Liens to secure
    Indebtedness permitted pursuant to clause (a) of the second
    paragraph of the covenant described under
    "—Limitations on Incurrence of Indebtedness and
    Issuance of Disqualified Stock and Preferred Stock";
(h)     Liens existing
    on the Issue Date;
(i)     Liens on
    property or shares of stock of a Person at the time such Person
    becomes a Subsidiary; provided, however, such Liens are not
    created or Incurred in connection with, or in contemplation of,
    such other Person becoming such a Subsidiary; provided further,
    however, that such Liens may not extend to any other property
    owned by the Company or any Restricted Subsidiary;
(j)     Liens on
    property at the time the Company or a Restricted Subsidiary
    acquired the property, including any acquisition by means of a
    merger or consolidation with or into the Company or any
    Restricted Subsidiary; provided further, however, that such
    Liens are not created or Incurred in connection with, or in
    contemplation of, such acquisition; provided further, however,
    that the Liens may not extend to any other property owned by the
    Company or any Restricted Subsidiary;
(k)     Liens securing
    Indebtedness or other obligations of a Restricted Subsidiary
    owing to the Company or another Restricted Subsidiary permitted
    to be incurred in accordance with the covenant described under
    "—Limitations on Incurrence of Indebtedness and
    Issuance of Disqualified Stock and Preferred Stock";
(l)     Liens securing
    Hedging Obligations so long as the related Indebtedness is, and
    is permitted to be under the Indenture, secured by a Lien on the
    same property securing such Hedging Obligations;
(m)     Liens on
    specific items of inventory or other goods and proceeds of any
    Person securing such Person's obligations in respect of
    bankers' acceptances, issued or created for the account of
    such Person to facilitate the purchase, shipment or storage of
    such inventory or other goods;
(n)     leases and
    subleases of real property which do not materially interfere
    with the ordinary conduct of the business of the Company or any
    of its Restricted Subsidiaries;
(o)     Liens arising
    from Uniform Commercial Code financing statement filings
    regarding operating leases entered into by the Company and its
    Restricted Subsidiaries in the ordinary course of business;
(p)     Liens in favor
    of the Company;
(q)     Liens on
    equipment of the Company granted in the ordinary course of
    business to the Company's client at which such equipment is
    located;
(r)     Liens
    encumbering deposits made in the ordinary course of business to
    secure obligations arising from statutory, regulatory,
    contractual or warranty requirements, including rights of offset
    and set-off;
(s)     Liens on the
    Equity Interests of Unrestricted Subsidiaries securing
    obligations of Unrestricted Subsidiaries not otherwise
    prohibited by the Indenture;
(t)     Liens to secure
    Indebtedness permitted by clause (1) of the second
    paragraph of the covenant described under
    "—Limitations on Incurrence of Indebtedness and
    Issuance of Disqualified Stock and Preferred
    Stock"; and
(u)     Liens to secure
    any refinancing, refunding, extension, renewal or replacement
    (or successive refinancings, refundings, extensions, renewals or
    replacements) as a whole, or in part, of any Indebtedness
    secured by any Lien referred to in the foregoing
    clauses (f), (g), (h), (i), (j), (k), (1) and (t);
    provided, however, that (x) such new Lien shall be limited
    to all or part of the same property that secured the original
    Lien (plus improvements on such property) and (y) the
    Indebtedness secured by such Lien at such time is not increased
    to any amount greater than the sum
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of (A) the outstanding principal amount or, if
    greater, committed amount of the Indebtedness described under
    clauses (f), (g), (h), (i), (j), (k), (1) or (t) at the
    time the original Lien became a Permitted Lien under the
    Indenture and (B) an amount necessary to pay any fees and
    expenses, including premiums, related to such refinancing,
    refunding, extension, renewal or replacement.
"Person" means any individual,
corporation, partnership, business trust, 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" means any Equity
Interest with preferential right of payment of dividends or upon
liquidation, dissolution, or winding up.
"Quarterly Base Dividend Level" means,
for any fiscal quarter,      % of the
Company's Excess Cash for the 12-month period ending on the
last day of the Company's then most recently ended fiscal
quarter for which internal financial statements are available at
the time such dividend is declared and paid divided by
four (4).
"Representative" means the trustee,
agent or representative (if any) for an issue of Senior
Indebtedness.
"Restricted Investment" means an
Investment other than a Permitted Investment.
"Restricted Subsidiary" means any
Subsidiary of the Company other than an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an
arrangement relating to property now owned or hereafter 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 such Restricted Subsidiary leases it from such
Person, other than leases between the Company and a Wholly Owned
Subsidiary or between Wholly Owned Subsidiaries.
"Secured Indebtedness" means any
Indebtedness of the Company or any Subsidiary secured by a Lien.
"Securities Offering" means any public
or private sale of IDSs or common stock or Preferred Stock of
the Company (other than Disqualified Stock), other than
(i) public offerings with respect to IDSs or the
Company's Common Stock registered on Form S-8 and
(ii) any such public or private sale that constitutes an
Excluded Contribution.
"S&P" means Standard and
Poor's Ratings Group.
"Senior Credit Documents" means the
collective reference to the Credit Agreement, the notes issued
pursuant thereto and the guarantees thereof, and the collateral
documents relating thereto.
"Senior Lender Indebtedness" means any
and all amounts payable under or in respect of the Credit
Facilities, the Senior Credit Documents with respect thereto and
any Refinancing Indebtedness with respect thereto, as amended
from time to time, including principal, premium (if any),
interest (including interest accruing on or after the filing of
any petition in bankruptcy or for reorganization relating to the
Company or any Guarantor, as applicable, whether or not a claim
for post-filing interest is allowed in such proceedings), fees,
charges, expenses, reimbursement obligations, guarantees and all
other amounts payable thereunder or in respect thereof.
"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.
"Similar Business" means a business,
the majority of whose revenues are derived from sale of goods or
provision of services reasonably related, complimentary or
ancillary to the sale of laundry equipment or any reasonable
extension thereof.
"Specified Cash Contributions" means
the aggregate amount of cash contributions (other than Excluded
Contributions) made to the capital of the Company which are
designated as "Specified Cash Contributions" pursuant
to an Officers' Certificate.
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"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 beyond the control
of the issuer unless such contingency has occurred).
"Subordinated Indebtedness" means, any
Indebtedness of the Company or any Guarantor, the instrument
under which such Indebtedness is incurred expressly provides
that it is subordinated in right of payment to the Notes or any
Guarantee.
"Subsidiary" means, with respect to any
Person:
(i)     any corporation,
    association or other business entity (other than a partnership,
    joint venture or limited liability company) of which more than
    50% of the total voting power of shares of Capital Stock
    entitled (without regard to the occurrence of any contingency)
    to vote in the election of directors, managers or trustees
    thereof is at the time of determination owned or controlled,
    directly or indirectly, by such Person or one or more of the
    other Subsidiaries of that Person or a combination
    thereof; and
(ii)     any
    partnership, joint venture or limited liability company of which
    (x) more than 50% of the capital accounts, distribution
    rights, total equity and voting interests or general and limited
    partnership interests, as applicable, are owned or controlled,
    directly or indirectly, by such Person or one or more of the
    other Subsidiaries of that Person or a combination thereof,
    whether in the form of membership, general, special or limited
    partnership interests or otherwise and (y) such Person or
    any Wholly Owned Restricted Subsidiary of such Person is a
    controlling general partner or otherwise controls such entity.
"Total Assets" means the total
consolidated assets of the Company and its Restricted
Subsidiaries, as shown on the most recent balance sheet of the
Company.
"Trustee" means the party named as such
in the Indenture until a successor replaces it and, thereafter,
means the successor, and if at any time there is more than one
such party, "Trustee" as used with respect to the
securities of any series shall mean the trustee with respect to
securities of that series.
"Trust Officer" means (i) any
officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president,
assistant secretary, assistant treasurer, trust officer or any
other officer of the Trustee who customarily performs functions
similar to those performed by the Persons who at the time shall
be such officers, respectively, or to whom any corporate trust
matter is referred because of such person's knowledge of
and familiarity with the particular subject and (ii) who
shall have direct responsibility for the administration of the
Indenture.
"Unrestricted Subsidiary" means:
(i)   Alliance Laundry Equipment
    Receivables 2002 LLC;
(ii)   Alliance Laundry Equipment
    Receivables Trust 2002-A;
(iii)     any Subsidiary
    of the Company that at the time of determination shall be
    designated an Unrestricted Subsidiary by the Board of Directors
    in the manner provided below; and
(iv)  any Subsidiary of an Unrestricted
    Subsidiary.
The Board of Directors may designate any
Subsidiary of the Company (including any newly acquired or newly
formed Subsidiary of the Company) to be an Unrestricted
Subsidiary unless such Subsidiary or any of its Subsidiaries
owns any Equity Interests or Indebtedness of, or owns 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 the Subsidiary to be so
designated and its Subsidiaries do not at the time of
designation have and do not thereafter Incur any Indebtedness
pursuant to which the lender has recourse to any of the assets
of the Company or any of its Restricted Subsidiaries;
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provided further, however, that either
(a) the Subsidiary to be so designated has total
consolidated assets of $1,000 or less or (b) if such
Subsidiary has consolidated assets greater than $1,000, then
such designation would be permitted under the covenant entitled
"—Limitation on Restricted Payments."
The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided,
however, that immediately after giving effect to such
designation (x) (1) the Company could Incur $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test described under "—Limitations on Incurrence
of Indebtedness and Issuance of Disqualified Stock and Preferred
Stock" or (2) the Fixed Charge Coverage Ratio for the
Company and its Restricted Subsidiaries would be greater than
such ratio for the Company and its Restricted Subsidiaries
immediately prior to such designation, in each case on a pro
forma basis taking into account such designation and (y) no
Default shall have occurred and be continuing. Any such
designation by the Board of Directors shall be evidenced to the
Trustee by promptly filing with the Trustee a copy of the
resolution of the Board of Directors 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 or
redeemable at the issuer's option.
"Voting Stock" of any Person as of any
date means the Capital Stock of such Person that is at the time
entitled to vote in the election of the Board of Directors of
such Person.
"Weighted Average Life to Maturity"
means, when applied to any Indebtedness or Disqualified Stock,
as the case may be, at any date, the quotient obtained by
dividing (i) the sum of the products of the number of years
from the date of determination to the date of each successive
scheduled principal payment of such Indebtedness or redemption
or similar payment with respect to such Disqualified Stock
multiplied by the amount of such payment, by (ii) the sum
of all such payments.
"Wholly Owned Restricted Subsidiary" is
any Wholly Owned Subsidiary that is a Restricted Subsidiary.
"Wholly Owned Subsidiary" of any Person
means a Subsidiary of such Person 100% of the outstanding
Capital Stock or other ownership interests of which (other than
directors' qualifying shares) shall at the time be owned by
such Person and/or by one or more Wholly Owned Subsidiaries of
such Person.
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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 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, we will
have                IDSs
outstanding, in respect
of                 shares
of our Class A common stock in the aggregate and
$           million
aggregate principal amount of our senior subordinated notes. All
of these IDSs and securities represented thereby will be freely
tradable without restriction or further registration under the
Securities Act, unless the IDSs or securities represented
thereby are owned by "affiliates" as that term is
defined in Rule 144 under the Securities Act of 1933. Upon
completion of this offering, the existing equity investors will
own as part of the IDSs, shares of Class A common stock
representing an
aggregate           %
ownership interest in us after the offering,
or           %
if the underwriters' over-allotment option is exercised in
full. In addition, our existing equity investors
hold            shares
of Class B common stock
and            shares
of preferred stock, which following the second anniversary of
the consummation of this offering may be exchanged, subject to
certain conditions, for IDSs in connection with the sale of such
Class B common stock together with preferred stock. The
existing equity investors will have demand and piggyback
registration rights for their shares of Class A common
stock which may be sold in the form of IDSs as well as for their
shares of Class B common stock, preferred stock and the
IDSs for which the Class B common stock together with the
preferred stock may be exchanged. In addition, certain members
of management will have piggyback registration rights for their
IDSs. See "Related Party Transactions—Registration
Rights." Collectively our existing equity holders will be
issued
IDSs
in this offering. Registration rights may not be exercised
during the lock-up period.
We may issue shares of our common stock or senior
subordinated notes, which may 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 or senior subordinated notes, which may be in the form of
IDSs, or other securities that we may issue may in turn be
significant. In addition, we may also grant registration rights
covering those shares of our common stock or senior subordinated
notes and IDSs, if applicable, or other securities in connection
with any such acquisitions and investments.
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Material United States Federal Income Tax Consequences
The following discussion, insofar as it relates
to matters of United States federal income tax law (and, to the
extent specified, United States federal estate tax law) or legal
conclusions with respect thereto, constitutes the opinion of our
counsel, Kirkland & Ellis LLP, as to the material
United States federal income tax considerations to a United
States holder or, as the case may be, a non-United States
holder, in each case as defined below, arising from the
purchase, ownership and disposition of IDSs, senior subordinated
notes or Class A common stock. This discussion is based on
the provisions of the United States Internal Revenue Code of
1986, as amended (the "Code"), the Treasury
regulations promulgated thereunder, judicial authority,
published administrative positions of the Internal Revenue
Service (the "IRS") and other applicable authorities,
all as in effect on the date of this prospectus, and all of
which are subject to change or differing interpretations,
possibly on a retroactive basis. No statutory, administrative or
judicial authority directly addresses the treatment of IDSs or
instruments similar to IDSs for United States federal income tax
purposes, and we have not sought any ruling from the IRS with
respect to the statements made and the conclusions reached in
the following discussion. 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 discussed
below could adversely affect the amount, timing and character of
income and gain realized by a holder in respect of an investment
in IDSs, senior subordinated notes or Class A common stock.
In the case of non-United States holders, a different treatment
could subject such holders to the same United States federal
withholding tax or estate tax consequences with respect to the
senior subordinated notes as they will be subject to with
respect to the Class A common stock. Payments to non-United
States holders will not be grossed up for or in respect of any
such tax. In addition, a different treatment could result in our
losing all or part of the deduction for interest that we pay on
the senior subordinated notes.
This discussion deals only with holders that
purchase IDSs or senior subordinated notes at their original
issuance at their original issue price and that will hold IDSs,
senior subordinated notes and Class A common stock as
"capital assets" (within the meaning of
Section 1221 of the Code). This summary does not purport to
deal with all aspects of United States federal income taxation
that might be relevant to particular holders, in light of their
personal investment circumstances or status, such as banks,
insurance companies, certain other financial institutions,
tax-exempt organizations, S corporations, partnerships or
other pass-through entities, real estate investment trusts,
regulated investment companies, dealers or traders in securities
or currencies, and taxpayers subject to the alternative minimum
tax. This discussion also does not address IDSs, senior
subordinated notes or Class A common stock held as part of
a hedge, straddle, integrated, synthetic security or conversion
transaction, or situations in which the "functional
currency" of a United States holder (as defined below) is
not the United States dollar. Moreover, except to the extent
specified with respect to United States federal estate tax, the
effect of any applicable United States federal estate or gift,
state, local or non-United States tax laws is not discussed.
THE FOLLOWING DISCUSSION IS FOR INFORMATIONAL
PURPOSES ONLY AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING
AND ADVICE. INVESTORS CONSIDERING THE PURCHASE OF IDSs, SENIOR
SUBORDINATED NOTES OR CLASS A COMMON STOCK SHOULD CONSULT
THEIR OWN TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE
UNITED STATES FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR
SITUATIONS, AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE
ESTATE OR GIFT TAX LAWS OR THE LAWS OF ANY STATE, LOCAL OR
NON-UNITED STATES TAXING JURISDICTION OR UNDER ANY APPLICABLE
TAX TREATY.
The term "United States holder" means a
holder of IDSs, senior subordinated notes or Class A common
stock that is, for United States federal income tax purposes:
(1)     An individual
    who is a citizen or resident of the United States;
(2)     a corporation,
    or other entity taxable as a corporation for United States
    federal income tax purposes, created or organized under the laws
    of the United States or of any political subdivision
    thereof; or
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(3)     an estate or
    trust, the income of which is subject to United States federal
    income taxation regardless of its source.
The term "non-United States holder"
means a holder of IDSs, senior subordinated notes or
Class A common stock that is, for United States federal
income tax purposes:
(1)     a nonresident
    alien individual;
(2)     a foreign
    corporation; or
(3)     a foreign estate
    or trust.
In the case of a holder of IDSs, senior
subordinated notes or Class A common stock that is classified as
a partnership for United States federal income tax purposes, the
tax treatment of the IDSs, senior subordinated notes or Class A
common stock to a partner of the partnership generally will
depend upon the tax 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, then
you should consult your own tax advisors.
United States Holders
IDSs
Allocation of Purchase Price
Your acquisition of an IDS should be treated as
an acquisition of separate securities, the share of our Class A
common stock and the senior subordinated note represented by the
IDS, rather than as a purchase of a single integrated security,
and, by purchasing the IDS, you will agree to that treatment. If
that treatment is not respected, then the acquisition of IDSs
may be treated as an acquisition only of our stock, in which
case the senior subordinated notes would be treated in effect as
stock rather than as debt for United States federal income tax
purposes. See "—Senior Subordinated
Notes—Characterization." The remainder of this
discussion assumes that the acquisition of IDSs will be treated
as an acquisition of shares of our Class A common stock and the
senior subordinated notes, rather than as a purchase of a single
integrated security.
The purchase price of each IDS will be allocated
between the share of Class A common stock and the senior
subordinated note comprising the IDS in proportion to their
respective fair market values at the time of purchase. This
allocation will establish your initial tax basis in each of the
share of Class A common stock and the senior subordinated
note. We will 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 an IDS, you will agree to that allocation. If
this allocation is not respected by the IRS or the courts, then
it is possible that the senior subordinated notes will be
treated as having been issued with original issue discount or
amortizable bond premium.
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
senior subordinated notes. The remainder of this discussion
assumes that the allocation of the purchase price of the IDSs
described above will be respected.
Separation and Recombination
If you separate your IDSs into the shares of
Class A common stock and senior subordinated notes
represented thereby or recombine the applicable number of shares
of Class A common stock and principal amount of senior
subordinated notes to form IDSs, then you will not recognize
gain or loss upon the separation or recombination. You will
continue to take into account items of income or deduction
otherwise includible or deductible with respect to the shares of
Class A common stock and the senior subordinated notes, and your
tax basis in and holding period with respect to the shares of
Class A common stock and the senior subordinated notes will not
be affected by the separation or recombination.
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Senior Subordinated Notes
Characterization
Our counsel, Kirkland & Ellis LLP, is of
the opinion that the senior subordinated notes should be treated
as separate from the Class A common stock and as debt for
United States federal income tax purposes, and based upon that
opinion, we believe that the senior subordinated notes should be
so treated. In addition, the lead underwriters have received an
opinion from their counsel, Skadden, Arps, Slate,
Meagher & Flom LLP, to the effect that the senior
subordinated notes should be treated as separate from the Class
A common stock and as debt for United States federal income tax
purposes. These opinions are based on certain representations
and determinations, which are discussed in more detail in the
following paragraphs. These opinions are not binding on the IRS
or the courts, which could disagree. We will treat the senior
subordinated notes as debt for United States federal income tax
purposes, and, by acquiring senior subordinated notes, directly
or in the form of an IDS, you agree likewise to treat the senior
subordinated notes as our indebtedness for all purposes.
The determination as to whether an instrument is
treated as debt or as equity for United States federal income
tax purposes is based on all of the facts and circumstances.
There is no clear statutory definition of debt and the
characterization of an instrument as debt or as equity is
governed by principles developed in the case law, which analyzes
numerous factors that are intended to identify the formal
characteristics of, and the economic substance of, the
holder's interest in the issuer. Our determination that the
senior subordinated notes should be treated as separate from the
Class A common stock as debt for United States federal
income tax purposes, and the opinions of counsel to this effect
referred to above, rely upon certain representations and
determinations made by us, the lead underwriters and independent
appraisal firms, including representations and determinations
substantially to the effect that:
•
after 45 days from the closing of this offering,
    an investor holding IDSs may separate the Class A common
    stock and senior subordinated notes comprising the IDSs without
    material market impediment;
•
the term, interest rate and other material
    provisions of the senior subordinated notes including,
inter
    alia
restrictions on incurrence of debt and payment of
    dividends, are commercially reasonable and are substantially
    similar to those terms to which an unrelated third party lender
    not otherwise owning equity in the Company, bargaining at
    arm's length, would reasonably agree;
•
taking this offering and our reorganization into
    account, on a pro forma basis, the aggregate amount of our
    indebtedness in relation to the aggregate fair market value of
    our equity is commercially reasonable under the circumstances
    and is comparable to similarly situated corporate bond issuers;
•
taking this offering and our reorganization into
    account, on a pro forma basis, the ratio of (i) the sum of
    all of our outstanding indebtedness to (ii) the fair market
    value of our equity does not exceed
    approximately           to
    1; and
•
based on our detailed financial forecasts (and
    assuming without verifying that those forecasts are correct),
    the Company will be able to repay the principal amount of the
    senior subordinated notes at their maturity and it is likely
    that such repayment would be made with accumulated cash and/or
    by refinancing with short term (five years or less)
    unsubordinated debt, or a combination thereof.
In light of the representations and
determinations described above and their relevance to several of
the factors analyzed in the case law, and taking into account
the facts and circumstances relating to the issuance of the
senior subordinated notes (including the separate issuance of
senior subordinated notes in this offering), we (and our
counsel) are of the view that the senior subordinated notes
should be treated as separate from the Class A Common Stock
and as debt for United States federal income tax purposes. As
indicated above, there is no authority that directly addresses
the tax treatment of instruments with terms substantially
similar to the senior subordinated notes or offered under
circumstances such as this offering (that is, senior
subordinated notes offered as a unit with 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
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treated as debt for United States federal income
tax purposes. The consequences to United States holders and
non-United States holders described below assume that the senior
subordinated notes will be respected as debt. However, no ruling
on this issue has been requested from the IRS and, thus, there
can be no assurance that the classification of the senior
subordinated notes as debt will not be challenged by the IRS or
will be sustained if challenged.
If the senior subordinated notes were treated as
equity rather than as debt for United States federal income tax
purposes, then stated interest paid on the senior subordinated
notes generally would be treated as a dividend to the extent
paid out of our current or accumulated earnings and profits, as
determined under United States federal income tax principles,
but those dividends likely would not qualify for the special 15%
rate described below. We would not be permitted to deduct
interest on the senior subordinated notes for United States
federal income tax purposes. In addition, as discussed below
under "—Non-United States Holders—Class A
Common Stock," non-United States holders could be subject
to withholding or estate taxes with respect to the senior
subordinated notes in the same manner as they will be with
respect to the Class A common stock. Our inability to deduct
interest on the senior subordinated notes could materially
increase our taxable income and, thus, our United States federal
income tax liability. This would reduce our after-tax cash flow
and could materially and adversely impact our ability to make
interest and dividend payments on the senior subordinated notes
and the Class A common stock.
In addition, there can be no assurance that the
IRS will not challenge the determination that the interest rate
on the senior subordinated notes represents an arm's length
interest rate. If the IRS were successful in such a challenge,
then any excess of the interest paid on the senior subordinated
notes over the deemed arm's length amount would not be
deductible by us and could be recharacterized as a dividend
payment instead of an interest payment for United States federal
income tax purposes. In such case, our taxable income and, thus,
our United States federal income tax liability could be
materially increased. In addition, as discussed below under
"—Non-United States Holders—Class A Common
Stock," non-United States holders could be subject to
withholding taxes with respect to the excess amount paid on the
senior subordinated notes in the same manner as they will be
with respect to dividends paid on the Class A common stock.
If the interest rate paid on the senior subordinated notes were
determined to be less than the arm's length rate, then the
senior subordinated notes could be treated as issued with
original issue discount, which original issue discount you would
be required to include in income over the term of the senior
subordinated notes.
Payments of Interest; Deferral of
Interest
Subject to the discussion of deferred interest
immediately below, stated interest on the senior subordinated
notes will be taxable to you as ordinary income, at the time it
is paid or accrued in accordance with your method of accounting
for United States federal income tax purposes.
Under applicable Treasury regulations, a
"remote" contingency that stated interest will not be
timely paid will be ignored in determining whether a debt
instrument is issued with original issue discount, referred to
as OID. Although there is no authority that directly describes
when a contingency such as the interest deferral option
described in "Description of the Senior Subordinated
Notes—Terms of the Notes—Interest Deferral"
should be considered "remote", based on our financial
forecasts, we believe that the likelihood of deferral of
interest payments on the senior subordinated notes is remote
within the meaning of the Treasury regulations relating to OID.
Based on the foregoing, although the matter is not free from
doubt because of the lack of direct authority, the option to
defer interest should not cause the senior subordinated notes to
be considered to be issued with OID at the time of their
original issuance.
Under the Treasury regulations, if the option to
defer any payment of interest on the senior subordinated notes
were determined not to be a "remote" contingency, or
if, as discussed above, the interest rate on the senior
subordinated note was determined to be less than the arm's
length interest rate by more than a
de minimus
amount, or if any payment of interest actually were deferred,
then the senior subordinated notes would be treated as issued
with OID at the time of issuance or at the time of such
occurrence, as
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the case may be. At such time, all stated
interest on the senior subordinated notes thereafter would be
treated as OID as long as the senior subordinated notes remained
outstanding. In such event:
•
you would be required to include the yield on the
    senior subordinated notes in income as OID on an economic
    accrual basis over the term of the senior subordinated notes,
    possibly before the receipt of the cash attributable to the OID,
    and without regard to your overall method of tax accounting;
•
actual payments of stated interest would not be
    reported as taxable income;
•
any amount of OID included in your gross income
    (whether or not during a deferral period) with respect to the
    senior subordinated notes would increase your tax basis in the
    senior subordinated notes; and
•
the amount of payments in respect of such accrued
    OID would reduce your tax basis in the senior subordinated notes.
Consequently, during a deferral period, a United
States holder would be required to continue to include OID in
gross income as it accrued, even though we would not make any
actual cash payments on the senior subordinated notes.
No rulings or other interpretations have been
issued by the IRS that address the meaning of the term
"remote" as used in the Treasury regulations relating
to OID, and it is possible that the IRS could take a position
contrary to our position.
Sale, Exchange or Retirement
Upon the sale, exchange, retirement or other
taxable disposition of an IDS, you will be treated as having
sold, exchanged, retired or disposed of the senior subordinated
note that constitutes a portion of the IDS. Upon the sale,
exchange, retirement or other taxable disposition of a senior
subordinated note, you will recognize gain or loss in an amount
equal to the difference between the portion of the proceeds
allocable to, or received for, the senior subordinated note
(less amounts received in respect of accrued and unpaid
interest, which will be treated as a payment of interest for
United States federal income tax purposes) and your adjusted tax
basis in the senior subordinated note on your purchase price of
the note, as the case may be. As described above under
"—United States Holders—IDSs—Allocation of
Purchase Price," your tax basis in the senior subordinated
note generally will be the portion of the purchase price of your
IDS allocable to the senior subordinated note. Such gain or loss
will be capital gain or loss and will be long-term capital gain
or loss if you have held the IDSs for more than one year. The
deductibility of capital losses is subject to limitations.
Additional Issuances
The indenture governing the senior subordinated
notes will permit us, from time to time, to issue additional
senior subordinated notes having terms that are substantially
identical to those of the senior subordinated notes offered
hereby. Such subsequently issued senior subordinated notes may
be issued with OID (for example, as a result of changes in
prevailing interest rates) if they are issued at a discount to
their face value. 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) are unclear. The indenture
governing the senior subordinated notes and the agreements with
DTC will provide that, in the event that there is a subsequent
issuance of senior subordinated notes having terms substantially
identical to the senior subordinated notes offered hereby, each
holder of senior subordinated notes or IDSs, as the case may be,
agrees that 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 each such subsequent issuance and
exchange, each holder of subsequently issued senior subordinated
notes, held either as part of IDSs or separately, and each
holder of existing senior subordinated notes or IDSs, as the
case may be, will own an inseparable unit composed of notes of
each separate issuance in the same proportion as each other
holder. Because a subsequent issuance will affect the senior
subordinated notes in the same manner, regardless of whether
those senior subordinated notes are held as part of IDSs or
separately, the combination of senior
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subordinated notes and shares of Class A
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. However, under
applicable law, it is possible that the holders of subsequently
issued senior subordinated notes (to the extent issued with OID)
will not be entitled to a claim for the portion of their
principal amount that represents unaccrued OID in the event of
an acceleration of the senior subordinated notes or a bankruptcy
proceeding occurring prior to the maturity of the senior
subordinated notes. 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 United States 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 United
States 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 of senior
subordinated notes is a taxable exchange, then an exchanging
holder generally would 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." 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 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 the exchange is treated as
a taxable event, such exchange may result in an increase in the
amount of OID, if any, that you are required to accrue with
respect to 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 senior
subordinated notes or IDSs, as the case may be, 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 and exchange 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 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 will 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.
It is possible that senior subordinated notes
that 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
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"applicable high yield discount
obligations." If any senior subordinated notes were so
classified, then a portion of the OID on those 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 United States 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 on our
Class A common stock will be treated as dividend income to
you, to the extent paid out of our current or accumulated
earnings and profits (as determined under United States federal
income tax principles). To the extent, if any, that the amounts
of dividends paid to you on a share of our Class A common
stock exceed our current and accumulated earnings and profits,
the excess will be treated first as a tax-free return of your
tax basis in the shares of Class A common stock and
thereafter as capital gain. Pursuant to recently enacted
legislation, if you are an individual, then dividends that we
pay to you through 2008 will be subject to tax at long-term
capital gain rates (up to 15%), provided that certain holding
period and other requirements are satisfied.
Sale or Exchange
Upon the sale, exchange or other taxable
disposition of an IDS, you will be treated as having sold,
exchanged or disposed of the share of Class A common stock
constituting a portion of the IDS. Upon the sale, exchange or
other taxable disposition of a share of our Class A common
stock (other than, in some circumstances, a sale of shares to
us), you will recognize gain or loss in an amount equal to the
difference between the portion of the proceeds allocable to your
share of Class A common stock and your tax basis in the
share of Class A common stock. As described above under
"—United States Holders—IDSs—Allocation of
Purchase Price," your tax basis in the share of
Class A common stock generally will be the portion of the
purchase price of your IDS allocable to the share of
Class A common stock. Such gain or loss will be capital
gain or loss, and will be long-term capital gain or loss if you
have held the Class A common stock for more than one year.
The deductibility of capital losses is subject to limitations.
Information Reporting and Backup Withholding
Tax
In general, we, our paying agents and certain
other intermediaries must report certain information to the IRS
with respect to payments of principal and interest on the senior
subordinated notes, payments of dividends on the Class A
common stock, and payments of the proceeds of the sale of senior
subordinated notes, Class A common stock or IDSs to certain
non-corporate United States holders. The payor (which may be us
or an intermediary) will be required to impose backup
withholding tax, currently at a rate of 28%, if (i) the
payee fails to furnish a taxpayer identification number
("TIN") to the payor or otherwise to establish an
exemption from backup withholding tax, (ii) the IRS
notifies the payor that the TIN furnished by the payee is
incorrect, (iii) there has been a notified payee
underreporting described in Section 3406(c) of the Code or
(iv) the payee has not certified under penalties of perjury
that it has furnished a correct TIN and that the IRS has not
notified the payee that it is subject to backup withholding tax
under the Code. Any amounts withheld under the backup
withholding tax rules from a payment to a United States holder
will be allowed as a credit against that holder's United
States federal income tax liability and may entitle the holder
to a refund, provided that the required information is furnished
to the IRS.
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Non-United States Holders
The following discussion applies only to
non-United States holders, and assumes that no item of income,
gain, deduction or loss derived by the non-United States holder
in respect of the senior subordinated notes, Class A common
stock or IDSs at any time is effectively connected with the
conduct of a United States trade or business. Special rules may
apply to certain non-United States holders, such as:
•
United States expatriates,
•
controlled foreign corporations,
•
passive foreign investment companies,
•
foreign personal holding companies,
•
corporations that accumulate earnings to avoid
    United States federal income tax,
•
investors in pass-through entities that are
    subject to special treatment under the Code, and
•
non-United States holders that are engaged in the
    conduct of a United States trade or business.
Such non-United States holders should consult
their own tax advisors to determine the United States federal,
state, local and other tax consequences that may be relevant to
them.
Senior Subordinated Notes
Characterization
As discussed above under "—United
States Holders—Senior Subordinated
Notes—Characterization," we believe that the senior
subordinated notes should be treated as separate from the
Class A common stock and as debt for United States federal
income tax purposes. However, no ruling on this issue has been
requested from the IRS and thus there can be no assurance that
this position will be sustained if challenged by the IRS. If the
senior subordinated notes were treated as equity rather than as
debt for United States federal income tax purposes, then the
senior subordinated notes would be treated in the same manner as
shares of Class A common stock are treated, as described
below under "—Non-United States
Holders—Class A Common Stock—Dividends,"
and, in particular, payments of interest on the senior
subordinated notes would be subject to United States federal
withholding tax at rates up to 30%. Payments to non-United
States holders will not be grossed- up on account of any such
taxes. The remainder of this discussion assumes that the
characterization of the senior subordinated notes as debt for
United States federal income tax purposes will be respected.
Stated Interest
Generally, subject to the discussion of backup
withholding tax below, interest paid on the senior subordinated
notes to a non-United States holder will be exempt from United
States withholding tax under the "portfolio interest
exemption"; provided that (i) the holder does not
actually or constructively own 10% or more of the combined
voting power of all classes of our stock entitled to vote,
(ii) the holder is not a controlled foreign corporation
related to us actually or constructively through stock
ownership, (iii) the holder is not a bank that acquired the
senior subordinated notes in consideration for an extension of
credit made pursuant to a loan agreement entered into in the
ordinary course of business and (iv) either (a) the
holder provides an applicable IRS Form W-8 (or a suitable
substitute form) signed under penalties of perjury that includes
its name and address and certifies as to its non-United States
status in compliance with applicable law and regulations or
(b) a securities clearing organization, bank or other
financial institution that holds customers' securities in
the ordinary course of its trade or business holds the senior
subordinated notes and provides a statement to us or our agent
under penalties of perjury in which it certifies that an
applicable Form W-8 (or a suitable substitute) has been
received by it from the non-United States holder or qualifying
intermediary and furnishes a copy to us or our agent. The
statement requirement referred to in the preceding sentence may
be satisfied with other documentary evidence in the case of a
senior subordinated note held in an offshore account or through
certain foreign intermediaries.
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Sale, Exchange or Retirement
Upon the sale, exchange, retirement or other
taxable disposition of an IDS, you will be treated as having
sold, exchanged, retired or disposed of the senior subordinated
note that constitutes a portion of the IDS. Any gain realized
upon the sale, exchange, retirement or other disposition of
senior subordinated notes generally will not be subject to
United States federal income tax, unless 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.
United States Federal Estate Tax
Senior subordinated notes beneficially owned by
an individual who at the time of death is a non-United States
holder should not be subject to United States federal estate
tax, provided that any payment of interest to such individual on
the notes would be eligible for exemption from the United States
federal withholding tax under the rules described above under
"—Non-United States Holders—Senior Subordinated
Notes—Stated Interest" without regard to the statement
requirement described therein.
Class A
Common Stock
Dividends
Dividends paid to you generally will be subject
to withholding of United States federal income 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 for dividends (and to avoid backup withholding tax
as discussed below), you will be required to:
•
complete the applicable IRS Form W-8 (or
    suitable substitute form) and certify, under penalties of
    perjury, that you are not a United States person, or
•
if the shares of our Class A common stock
    are held through certain foreign intermediaries, satisfy the
    relevant certification requirements of applicable Treasury
    regulations.
Special certification and other requirements
apply to certain non-United States holders that are entities
rather than individuals. If you are eligible for a reduced rate
of United States withholding tax pursuant to an income tax
treaty, you may obtain a refund of any excess amounts withheld
by filing an appropriate claim for refund with the IRS.
Sale or Exchange
Upon the sale, exchange or other taxable
disposition of an IDS, you will be treated as having sold,
exchanged or disposed of the share of Class A common stock
constituting a portion of the IDS. You generally will not be
subject to United States federal income tax with respect to gain
recognized on a sale or other disposition of shares of our
Class A common stock, unless:
•
if you are an individual, 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 United States real property
    holding corporation for United States federal income tax
    purposes.
We believe that we are not, and we do not
anticipate becoming, a United States real property holding
corporation for United States federal income tax purposes.
United States Federal Estate Tax
Shares of our Class A common stock held by
an individual non-United States holder at the time of death will
be included in such holder's gross estate for United States
federal estate tax purposes, unless an applicable estate tax
treaty provides otherwise.
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Information Reporting and Backup Withholding
    Tax
The amount of interest 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, dividends and
withholding of tax 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. Backup
withholding tax may be required with respect to payments made by
us or any paying agent to you, unless the statement described in
"Non-United States Holders—Senior Subordinated
Notes—Stated Interest" has been received (and we or
the paying agent do not have actual knowledge or reason to know
that you are a United States person).
Information reporting and, depending on the
circumstances, backup withholding tax will apply to the proceeds
of a sale of IDSs, senior subordinated notes or Class A
common stock within the United States or conducted through
United States-related financial intermediaries unless the
statement described in "Non-United States
Holders—Senior Subordinated Notes—Stated
Interest" has been received (and we or the paying agent do
not have actual knowledge or reason to know that you are a
United States person) or you otherwise establish an exemption.
Any amounts withheld under the backup withholding tax rules will
be allowed as a refund or a credit against your United States
federal income tax liability, provided that the required
information is furnished to the IRS.
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Certain ERISA Considerations
The following is a summary of certain
considerations associated with the purchase of the IDSs by
employee benefit plans that are subject to Title I of the
U.S. Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), plans, individual retirement
accounts and other arrangements that are subject to
Section 4975 of the Code or provisions under any federal,
state, local, non-U.S. or other laws or regulations that
are similar to such provisions of the Code or ERISA
(collectively, "Similar Laws"), and entities whose
underlying assets are considered to include "plan
assets" of such plans, accounts and arrangements (each, a
"Plan").
General Fiduciary Matters
ERISA and the Code impose certain duties on
persons who are fiduciaries or other interested parties of a
Plan subject to Title I of ERISA or Section 4975 of
the Code and prohibit certain transactions involving the assets
of a Plan and its fiduciaries or other interested parties. Under
ERISA and the Code, any person who exercises any discretionary
authority or control over the administration of such a Plan or
the management or disposition of the assets of such a Plan, or
who renders investment advice for a fee or other compensation to
such a Plan, is generally considered to be a fiduciary of the
Plan.
In considering an investment in the IDSs or the
separate senior subordinated notes of a portion of the assets of
any Plan, a fiduciary should determine whether the investment is
in accordance with the documents and instruments governing the
Plan and the applicable provisions of ERISA, the Code or any
Similar Law relating to a fiduciary's duties to the Plan
including, without limitation, the prudence, diversification,
delegation of control and prohibited transaction provisions of
ERISA, the Code and any other applicable Similar Laws.
Prohibited Transaction Issues
Section 406 of ERISA and Section 4975
of the Code prohibit ERISA Plans from engaging in specified
transactions involving plan assets with persons or entities who
are "parties in interest," within the meaning of
Section 406 of ERISA, or "disqualified persons,"
within the meaning of Section 4975 of the Code, unless an
exemption is available. A party in interest or disqualified
person who engaged in a non-exempt prohibited transaction may be
subject to excise taxes and other penalties and liabilities
under ERISA and the Code. In addition, the fiduciary of the
ERISA Plan that engaged in such a non-exempt prohibited
transaction may be subject to penalties and liabilities under
ERISA and the Code.
Whether or not our underlying assets are deemed
to include "plan assets," as described below, the
acquisition and/or holding of the IDSs or the separate senior
subordinated notes by a Plan with respect to which we, the
underwriter, the trustee or the guarantor is considered a party
in interest or a disqualified person may constitute or result in
a direct or indirect prohibited transaction under
Section 406 of ERISA and/or Section 4975 of the Code,
unless the investment is acquired and is held in accordance with
an applicable statutory, class or individual prohibited
transaction exemption. In this regard, the U.S. Department
of Labor (the "DOL") has issued prohibited transaction
class exemptions, or "PTCEs," that may apply to the
acquisition and holding of the IDSs or the separate senior
subordinated notes. These class exemptions include, without
limitation, PTCE 84-14 respecting transactions determined
by independent qualified professional asset managers,
PTCE 90-1 respecting insurance company pooled separate
accounts, PTCE 91-38 respecting bank collective investment
funds, PTCE 95-60 respecting insurance company general
accounts and PTCE 96-23 respecting transactions determined
by in-house asset managers, although there can be no assurance
that any or all of the conditions of any such exemptions will be
satisfied.
Because of the foregoing, the IDSs or the
separate senior subordinated notes should not be purchased or
held by any person investing "plan assets" of any
Plan, unless such purchase and holding will not constitute a
non-exempt prohibited transaction under ERISA and the Code or
similar violation of any applicable Similar Laws.
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Representation
Accordingly, by acceptance of the IDSs or the
separate senior subordinated notes, each purchaser and
subsequent transferee of the IDSs or the separate senior
subordinated notes, as applicable, will be deemed to have
represented and warranted that either (i) no portion of the
assets used by such purchaser or transferee to acquire and hold
the IDSs or the separate senior subordinated notes constitutes
assets of any Plan or (ii) the purchase and holding of the
IDSs or the separate senior subordinated notes by such purchaser
or transferee will not constitute a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975
of the Code or similar violation under any applicable Similar
Laws.
The foregoing discussion is general in nature and
is not intended to be all-inclusive. Due to the complexity of
these rules and the penalties that may be imposed upon persons
involved in non-exempt prohibited transactions, it is
particularly important that fiduciaries, or other persons
considering purchasing the IDSs or the separate senior
subordinated notes on behalf of, or with the assets of, any
Plan, consult with their counsel regarding the potential
applicability of ERISA, Section 4975 of the Code and any
Similar Laws to such investment and whether an exemption would
be applicable to the purchase and holding of the IDSs or the
separate senior subordinated notes.
Plan Asset Issues
ERISA and the Code do not define "plan
assets." However, regulations (the "Plan Asset
Regulations") promulgated under ERISA by the DOL generally
provide that when a Plan acquires an equity interest in an
entity that is an "operating company", or the equity
interest is a "publicly-offered security" (in each
case as defined in the Plan Asset Regulations), such equity
interest will be deemed a "plan asset," but the
underlying assets of the entity will not be deemed "plan
assets." The Plan Asset Regulations define an "equity
interest" as any interest in an entity, other than an
instrument that is treated as indebtedness under applicable
local law and which has no substantial equity features.
Therefore, we anticipate that shares of our common stock would
be considered an equity interest and our notes should be treated
as indebtedness. Under the Plan Asset Regulations, an
"operating company" is defined as "an entity that
is primarily engaged, directly or through a majority owned
subsidiary or subsidiaries, in the production or sale of a
product or service other than the investment of capital."
We believe that we are an "operating company" for
purposes of the Plan Asset Regulations, although no assurance
can be given in this regard.
Alternatively, under the Plan Asset Regulations,
a "publicly offered security" is a security that is
(a) "freely transferable", (b) part of a class of
securities that is "widely held," and (c)(i) sold to
the Plan as part of an offering of securities to the public
pursuant to an effective registration statement under the
Securities Act of 1933, as amended, and the class of securities
to which such security is a part is registered under the
Securities Exchange Act of 1934, as amended, within
120 days after the end of the fiscal year of the issuer
during which the offering of such securities to the public has
occurred, or (ii) is part of a class of securities that is
registered under Section 12(b) or 12(g) of the Exchange
Act. In connection with this offering, we are effecting such a
registration of the IDSs and the separate senior subordinated
notes under the Securities Act and Securities Exchange Act. The
Plan Asset Regulations provide that a security is "widely
held" only if it is part of a class of securities that is
owned by 100 or more investors independent of the issuer and one
another. A security will not fail to be "widely held"
because the number of independent investors falls below 100
subsequent to the initial offering thereof as a result of events
beyond the control of the issuer. It is anticipated that the
IDSs and the separate senior subordinated notes will be
"widely held" within the meaning of the Plan Asset
Regulations, although no assurance can be given in this regard.
The Plan Asset Regulations provide that whether a security is
"freely transferable" is a factual question to be
determined on the basis of all the relevant facts and
circumstances. It is anticipated that the IDSs and the separate
senior subordinated notes will be "freely
transferable" within the meaning of the Plan Asset
Regulations, although no assurance can be given in this regard.
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Plan Asset Consequences
If we cease to be an operating company for
purposes of the Plan Asset Regulations and the IDSs or the
separate senior subordinated notes cease to be publicly-offered
securities within the meaning of the Plan Asset Regulations, our
assets could be deemed to be "plan assets" under
ERISA, unless, at such time, another exemption is available
under the Plan Asset Regulations. This would result, among other
things, in (i) the application of the prudence and other
fiduciary responsibility standards of ERISA to investments made
by us, and (ii) the possibility that certain transactions
in which we might seek to engage could constitute
"prohibited transactions" under ERISA and the Code.
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Underwriting
We will enter into an underwriting agreement with
the underwriters named below. CIBC World Markets Corp. and
Lehman Brothers Inc. are acting as the representatives of the
underwriters. Subject to the terms and conditions to be
described in the underwriting agreement, we will agree to sell
to the underwriters, and the underwriters severally will agree
to purchase from us, the number of IDSs listed opposite their
names below.
Number of
Underwriters
Shares
CIBC World Markets Corp.
Lehman Brothers Inc.
Total
In addition, CIBC World Markets Corp. and Lehman
Brothers Inc. will agree severally, but not jointly to purchase
from us
$           million
and
$           million
aggregate principal amount of senior subordinated notes,
respectively, which together represents all of the notes being
issued separately (not represented by IDSs.) The underwriters
will agree to purchase all of the IDSs sold under the
underwriting agreement if any of the IDSs are purchased. Under
the underwriting agreement, if an underwriter defaults in its
commitment to purchase the IDSs, the commitments of
nondefaulting underwriters may be increased or the underwriting
agreement may be terminated, depending on the circumstances.
Subject to applicable law, the underwriters may offer the IDSs
or senior subordinated notes outside of the United States.
Holders of our direct and indirect equity securities (and their
related persons) will not be eligible to purchase notes offered
separately.
An automatic exchange of senior subordinated
notes described elsewhere in this prospectus 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 senior subordinated notes
purchased by such holder. See "Description of
IDSs—Book-Entry Settlement and Clearance—Procedures
relating to subsequent issuances."
The IDSs and senior subordinated notes should be
ready for delivery on or
about                     ,
2004 but in any event no later
than                     ,
2004 against payment in immediately available funds. The
underwriters are offering the IDSs and senior subordinated notes
subject to various conditions and may reject all or part of any
order. The underwriting agreement provides that the obligations
of the underwriters to purchase the IDSs and senior subordinated
notes included in this offering are subject to approval of legal
matters by counsel and to other conditions. The representatives
have advised us that the underwriters propose to offer the IDSs
and senior subordinated notes directly to the public at the
public offering prices that appear on the cover page of this
prospectus. In addition, the representatives may offer some of
the IDSs or senior subordinated notes to other securities
dealers at such price less a concession of
$           per
IDS
or           %
of the principal amount of the senior subordinated notes. The
underwriters may also allow, and such dealers may reallow, a
concession not in excess of
$           per
IDS
or           %
of the principal amount of the senior subordinated notes to
other dealers. After the IDSs and the senior subordinated notes
are released for sale to the public, the representatives may
change the offering prices and other selling terms at various
times.
Certain of our existing equity investors will
grant the underwriters an over-allotment option to purchase
additional IDSs, exercisable for 30 days from the date of
this prospectus, to purchase up
to           additional
IDSs at the public offering price that appears on the cover page
of this prospectus, less the underwriting discount. The
underwriters may exercise the option solely for the purpose of
covering over-allotments to purchase additional IDSs, if any, in
connection with this offering. The underwriters have severally
agreed that, to the extent the over-allotment option to purchase
additional IDSs is exercised, they will each purchase a number
of additional IDSs proportionate to the underwriter's
initial amount reflected in the foregoing table.
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The following table shows the underwriting
discounts and commissions that we will pay to the underwriters
in connection with this offering. These amounts are shown
assuming both no exercise and full exercise of the
underwriters' option to purchase additional IDSs:
Combined
Combined
Per Senior
Total without
Total with Full
Subordinated
Exercise of Over-
Exercise of Over-
Per IDS
Total
Note
Total
Allotment Option
Allotment Option
Public offering price
Underwriting discount
Alliance Laundry Holdings Inc.
$
$
%
$
$
$
We estimate that our total expenses of this
offering, excluding the underwriting discount, will be
approximately
$          .
We and the selling shareholders have agreed to
indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933.
We, our executive officers and directors and our
existing equity investors have agreed to a 180-day "lock
up" regarding the IDSs, senior subordinated notes and
shares of our common stock, including securities that are
convertible into such securities and securities that are
exchangeable or exercisable for such securities, subject to
specified exceptions.
This means that for a period of 180 days
following the date of this prospectus we and such persons may
not offer, sell, pledge or otherwise dispose of these securities
without the prior written consent of the representatives,
subject to specified exceptions.
We were advised by the representatives that CIBC
World Markets Corp. and Lehman Brothers Inc. currently intend to
facilitate a secondary market in the separate senior
subordinated notes, and, upon separation of the IDSs, the shares
of common stock and senior subordinated notes, which means that
they will make commercially reasonable attempts to match buyers
of such securities with sellers of such securities, considering,
when doing so, any relevant credit issues they deem appropriate.
However, CIBC World Markets Corp. and Lehman Brothers Inc. are
not obligated to facilitate a secondary market and may
discontinue any such facilitation, if commenced, at any time and
without notice. Moreover, if and to the extent that CIBC World
Markets Corp. or Lehman Brothers Inc. facilitate any market for
the senior subordinated notes, there can be no assurance that
such market would provide sufficient liquidity for any holder of
any such securities.
The representatives have informed us that they do
not expect discretionary sales by the underwriters to exceed 5%
of the IDSs offered by this offering.
There is no established trading market for the
IDSs, the shares of our common stock or the senior subordinated
notes. The offering price for the IDSs and the senior
subordinated notes will be determined by us and the
representatives based on the following factors:
•
prevailing market and general economic conditions;
•
our financial information;
•
our history and prospects;
•
the history of and prospects for the industry in
    which we compete;
•
an assessment of our management, our past and
    present operations, and the prospects for, and timing of, our
    future revenues; and
•
the above factors in relation to market values
    and various valuation measures of other companies engaged in
    activities similar to ours.
We will apply to list the IDSs on the American
Stock Exchange under the trading symbol
"          ."
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Rules of the SEC may limit the ability of the
underwriters to bid for or purchase IDSs or senior subordinated
notes before the distribution of the IDSs and senior
subordinated notes is completed. However, the underwriters may
engage in the following activities in accordance with the rules:
•
Stabilizing transactions—The representatives
    may make bids or purchases for the purpose of pegging, fixing or
    maintaining the price of the IDSs or senior subordinated notes,
    so long as stabilizing bids do not exceed a specified maximum.
•
Over-allotment option to purchase additional IDSs
    and syndicate covering transactions—The underwriters may
    sell more IDSs in connection with this offering than the number
    of IDSs that they have committed to purchase. This option to
    purchase additional IDSs over-allotment creates a short position
    for the underwriters. This short sales position may involve
    either "covered" short sales or "naked"
    short sales. Covered short sales are short sales made in an
    amount not greater than the underwriters' over-allotment
    option to purchase additional IDSs in this offering described
    above. The underwriters may close out any covered short position
    either by exercising their over-allotment option to purchase
    additional IDSs or by purchasing IDSs in the open market. To
    determine how they will close the covered short position, the
    underwriters will consider, among other things, the price of
    IDSs available for purchase in the open market as compared to
    the price at which they may purchase IDSs through the
    over-allotment option. Naked short sales are short sales in
    excess of the over-allotment option to purchase additional IDSs.
    The underwriters must close out any naked short position by
    purchasing IDSs in the open market. A naked short position is
    more likely to be created if the underwriters are concerned
    that, in the open market after pricing, there may be downward
    pressure on the price of the IDSs that could adversely affect
    investors who purchase IDSs in this offering.
•
Penalty bids—If the representative purchases
    IDSs or senior subordinated notes in the open market in a
    stabilizing transaction or syndicate covering transaction, it
    may reclaim a selling concession from the underwriters and
    selling group members who sold those IDSs or senior subordinated
    notes as part of this offering.
Similar to other purchase transactions, the
underwriters' purchases to cover the syndicate short sales
or to stabilize the market price of the IDSs or senior
subordinated notes or the imposition of penalty bids may have
the effect of raising or maintaining the market price of the
IDSs or senior subordinated notes or preventing or mitigating a
decline in the market price of the IDSs or senior subordinated
notes. As a result, the price of the IDSs or senior subordinated
notes may be higher than the price that might otherwise exist in
the open market. The imposition of a penalty bid might also have
an effect on the price of the IDSs or senior subordinated notes
if it discourages resales of the IDSs or senior subordinated
notes.
Neither we nor the underwriters make any
representation or prediction as to the effect that the
transactions described above may have on the price of the IDSs
or senior subordinated notes. These transactions may occur on
the American Stock Exchange or otherwise. If such transactions
are commenced, they may be discontinued without notice at any
time.
At our request, the underwriters have reserved
for sale, at the initial offering price, up
to                IDSs
for our directors, employees and shareholders. The number of
IDSs available for sale to the general public will be reduced to
the extent our directors, employees and shareholders purchase
such reserved shares. Any reserved shares which are not so
purchased will be offered by the underwriters to the general
public on the same basis as the other shares offered by this
prospectus.
A prospectus in electronic format may be made
available on the websites maintained by one or more of the
underwriters and certain of the underwriters or securities
dealers may distribute prospectuses electronically. The
representatives may agree to allocate a number of IDSs or senior
subordinated notes to underwriters for sale to their online
brokerage account holders. The representatives will allocate
IDSs to underwriters that may make Internet distributions on the
same basis as other allocations. Other than the prospectus in
electronic format, the information on any of these websites and
any other information contained on a website maintained by an
underwriter or syndicate member is not part of this prospectus.
In addition, concurrently with this offering, we are
issuing                     IDSs
to certain indirect holders of equity interests in Alliance
Holdings in exchange for a portion of those interests.
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The underwriters have provided, and may continue
to provide, from time to time investment banking, commercial
banking, advisory and other services to us and the existing
equity investors for customary fees and expenses in the ordinary
course of their business. CIBC World Markets Corp. and Lehman
Brothers Inc. are the joint lead arranger and joint book-running
managers of the new credit facility and CIBC World Markets Corp.
is also the dealer manager in connection with the tender offer.
Canadian Imperial Bank of Commerce, an affiliate of CIBC World
Markets Corp., is a lender and co-administrative agent under our
asset backed facility.
CIBC World Markets Corp. (or its affiliates) and
Lehman Brothers Inc. (or its affiliates) are investors in funds
managed by Bain Capital, our existing majority shareholder.
Neither CIBC World Market Corp. or Lehman Brothers Inc. nor
their affiliates will receive any distributions as a result of
this offering.
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Legal Matters
The validity of the issuance of the IDSs offered
hereby and the shares of our common stock and senior
subordinated notes represented thereby, the validity of the
separate issuance of senior subordinated notes not in the form
of IDSs and the validity of the issuance of the subsidiary
guarantees by the subsidiary guarantors, will be passed upon for
us by Kirkland & Ellis LLP, New York,
New York. Certain partners of Kirkland & Ellis LLP
are also members of Randolph Street Partners II which will
own           IDSs
upon completion of the reorganization and this offering. 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 as of
December 31, 2003 and 2002 and for each of the three years
in the period ended December 31, 2003, included in this
prospectus have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
Where You Can Find Additional Information
We have filed a Registration Statement on
Form S-1 with the SEC regarding this offering. This
prospectus, which is part of the registration statement, does
not contain all of the information included in the registration
statement, and you should refer to the registration statement
and its exhibits to read that information. As a result of the
effectiveness of the registration statement, we are subject to
the informational reporting requirements of the Exchange Act of
1934 and, under that Act, we will file reports, proxy statements
and other information with the Commission. You may read and copy
the registration statement, the related exhibits and the
reports, proxy statements and other information we file with the
SEC at the SEC's public reference facilities maintained by
the SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. You can also request copies of
those documents, upon payment of a duplicating fee, by writing
to the SEC. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference rooms. The
SEC also maintains an Internet site that contains reports, proxy
and information statements and other information regarding
issuers that file with the SEC. The site's Internet address
is www.sec.gov.
Upon completion of this offering, Alliance
Holdings will become subject to the information and periodic
reporting requirements of the Securities Exchange Act of 1934,
and, in accordance with the requirements of the Securities
Exchange Act of 1934, will file periodic reports, proxy
statements and other information with the SEC. These periodic
reports, proxy statements and other information will be
available for inspection and copying at the regional offices,
public reference facilities and web site of the SEC referred to
above.
You may also request a copy of these filings, at
no cost, by writing or telephoning us at:
ALLIANCE LAUNDRY HOLDINGS INC.
P.O. Box 990
Ripon, Wisconsin 54971-0990
(920) 748-3121
157
Table of Contents
Alliance Laundry Holdings LLC
Index to Financial Statements
Page
Report of Independent Auditors
F-2
Consolidated Balance Sheets at December 31,
    2003 and 2002
F-3
Consolidated Statements of Income for the three
    years ended December 31, 2003
F-4
Consolidated Statements of Members' Deficit
    and Comprehensive Income (Loss) for three years ended
    December 31, 2003
F-5
Consolidated Statements of Cash Flows for the
    three years ended December 31, 2003
F-6
Notes to Financial Statements
F-7
Financial Statement Schedules:
For the three years ended December 31, 2003
II—Valuation and Qualifying Accounts
F-33
All other schedules are omitted because they are
not applicable or the required information is shown in the
financial statements or notes thereto.
F-1
Table of Contents
Report of Independent Auditors
To the Board of Managers and Members
of Alliance Laundry Holdings LLC
In our opinion, the financial statements listed
in the accompanying index present fairly, in all material
respects, the financial position of Alliance Laundry Holdings
LLC and its subsidiaries at December 31, 2003 and 2002, and
the results of their operations and their cash flows for each of
the three years in the period ended December 31, 2003 in
conformity with accounting principles generally accepted in the
United States of America. In addition, in our opinion, the
financial statement schedules listed in the accompanying index
present fairly, in all material respects, the information set
forth therein when read in conjunction with the related
consolidated financial statements. These financial statements
and financial statement schedules are the responsibility of the
Company's management; our responsibility is to express an
opinion on these financial statements and financial statement
schedules based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally
accepted in the United States of America, which 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, assessing the accounting principles used and
significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
As discussed in Note 2 to the consolidated
financial statements, the Company adopted Statement of Financial
Accounting Standards No. 142, "Goodwill and Other
Intangible Assets," effective January 1, 2002. Also,
as discussed in Note 2, effective in 2001, the Company
changed its methods of accounting for derivative financial
instruments and retained beneficial interests in securitized
financial assets.
/s/ PRICEWATERHOUSECOOPERS LLP
PRICEWATERHOUSECOOPERS LLP
Milwaukee, Wisconsin
March 5, 2004
F-2
Table of Contents
Alliance Laundry Holdings LLC
Consolidated Balance Sheets
December 31,
2003
2002
(In thousands)
ASSETS
Current assets:
Cash
$
7,937
$
7,339
Cash-restricted
–
99
Accounts receivable (net of allowance for
    doubtful accounts of $257 and $207 at December 31, 2003 and
    2002, respectively)
9,157
5,834
Inventories, net
26,215
25,697
Beneficial interests in securitized accounts
    receivable
16,789
19,864
Prepaid expenses and other
898
639
Total current assets
60,996
59,472
Notes receivable, net
8,161
11,166
Property, plant and equipment, net
34,035
39,096
Goodwill (net of accumulated amortization of
    $11,766 at December 31, 2003 and 2002)
55,414
55,414
Beneficial interests in securitized financial
    assets
22,676
21,483
Debt issuance costs, net
7,636
9,654
Other assets
1,721
1,010
Total assets
$
190,639
$
197,295
LIABILITIES AND MEMBERS'
    DEFICIT
Current liabilities:
Current portion of long-term debt
$
11,270
$
9,971
Revolving credit facility
–
–
Accounts payable
11,279
13,797
Other current liabilities
20,428
21,638
Total current liabilities
42,977
45,406
Long-term debt:
Senior credit facility
145,975
173,266
Senior subordinated notes
110,000
110,000
Junior subordinated note
24,171
20,312
Other long-term debt
783
1,028
Other long-term liabilities
6,491
8,023
Total liabilities
330,397
358,035
Commitments and contingencies (see Note 11)
Mandatorily redeemable preferred equity
6,000
6,000
Members' deficit
(145,758
)
(166,740
)
Total liabilities and members' deficit
$
190,639
$
197,295
The accompanying notes are an integral part of
the financial statements.
F-3
Table of Contents
Alliance Laundry Holdings LLC
Consolidated Statements of Income
Years Ended December 31,
2003
2002
2001
(In thousands)
Net revenues:
Commercial laundry
$
230,663
$
219,653
$
219,273
Service parts
36,944
35,524
34,743
267,607
255,177
254,016
Cost of sales
188,979
179,047
188,982
Gross profit
78,628
76,130
65,034
Selling, general and administrative expense
33,566
30,098
28,665
Securitization and other costs
–
10,920
–
Total operating expenses
33,566
41,018
28,665
Operating income
45,062
35,112
36,369
Interest expense
28,258
28,341
33,538
Loss from early extinguishment of debt
–
2,004
–
Abandoned Canadian public offering costs
–
3,409
–
Other income (expense), net
(830
)
33
(67
)
Income before taxes
15,974
1,391
2,764
Provision for income taxes
55
56
34
Net income before cumulative effect of accounting
    change
15,919
1,335
2,730
Cumulative effect of change in accounting
    principle
–
–
2,043
Net income
$
15,919
$
1,335
$
687
The accompanying notes are an integral part of
the financial statements.
F-4
Table of Contents
Alliance Laundry Holdings LLC
Consolidated Statements of Members'
Deficit
and Comprehensive Income (Loss)
Years Ended December 31,
2003
2002
2001
(In thousands)
Members' deficit, beginning of year
$
(166,740
)
$
(160,208
)
$
(161,861
)
Net income
15,919
1,335
687
Accumulated other comprehensive income (loss):
Net unrealized holding gain on residual
    interests, beginning of year
1,586
1,309
572
Unrealized gain, net
650
277
737
Net unrealized holding gain on residual
    interests, end of year
2,236
1,586
1,309
Minimum pension liability adjustment, beginning
    of year
(8,003
)
–
–
Unrealized gain (loss)
4,381
(8,003
)
–
Minimum pension liability adjustment, end of year
(3,622
)
(8,003
)
–
Net unrealized gain on interest rate swaps,
    beginning of year
–
141
–
Unrealized (loss) gain
–
(141
)
141
Net unrealized gain on interest rate swaps, end
    of year
–
–
141
Repayment on loans to management
32
–
88
Members' deficit, end of year
$
(145,758
)
$
(166,740
)
$
(160,208
)
Comprehensive income (loss):
Net income
$
15,919
$
1,335
$
687
Other comprehensive income (loss):
Net unrealized holding gain on residual
    interests, net
650
277
737
Minimum pension liability adjustment
4,381
(8,003
)
–
Unrealized (loss) gain on interest rate swaps
–
(141
)
141
Comprehensive income (loss)
$
20,950
$
(6,532
)
$
1,565
The accompanying notes are an integral part of
the financial statements.
F-5
Table of Contents
Alliance Laundry Holdings LLC
Consolidated Statements of Cash
Flows
Years Ended December 31,
2003
2002
2001
(In thousands)
Cash flows from operating activities:
Net income
$
15,919
$
1,335
$
687
Adjustments to reconcile net income to cash
    provided by operating activities:
Cumulative effect of change in accounting
    principle
–
–
2,043
Depreciation and amortization
10,886
13,293
17,026
Non-cash interest
5,290
4,875
3,663
Non-cash loss from early extinguishment of debt
–
2,004
–
Loss (gain) on sale of property, plant and
    equipment
33
(33
)
67
Changes in assets and liabilities:
Accounts receivable
(3,323
)
4,606
139
Inventories
(518
)
4,165
7,600
Other assets
4,346
(6,184
)
(14,230
)
Accounts payable
(2,518
)
1,603
3,439
Other liabilities
278
(2,889
)
904
Net cash provided by operating activities
30,393
22,775
21,338
Cash flows from investing activities:
Additions to property, plant and equipment
(3,600
)
(2,652
)
(5,152
)
Proceeds on disposal of property, plant and
    equipment
10
89
188
Net cash used in investing activities
(3,590
)
(2,563
)
(4,964
)
Cash flows from financing activities:
Repayment of management note
32
–
–
Proceeds from long-term debt
–
193,000
812
Principal payments on long-term debt
(26,237
)
(205,230
)
(4,618
)
Net decrease in revolving line of credit
    borrowings
–
–
(12,000
)
Debt financing costs
–
(6,302
)
–
Net cash used in financing activities
(26,205
)
(18,532
)
(15,806
)
Increase in cash
598
1,680
568
Cash at beginning of year
7,339
5,659
5,091
Cash at end of year
$
7,937
$
7,339
$
5,659
Supplemental disclosure of cash flow information:
Cash paid for interest
$
22,148
$
22,155
$
25,774
The accompanying notes are an integral part of
the financial statements.
F-6
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements
December 31, 2003, 2002 and 2001
(Dollar amounts in thousands unless otherwise indicated)
Note 1—
Description of Business and Basis of
    Presentation:
Description of Business
Throughout this annual report, we refer to
Alliance Laundry Holdings LLC, a Delaware limited liability
company, as "Alliance Holdings," and, together with
its consolidated operations, as "Alliance,"
"we," "our" and "us," unless
otherwise indicated. Any reference to "Alliance
Laundry" refers to our wholly-owned subsidiary, Alliance
Laundry Systems LLC, a Delaware limited liability company, and
its consolidated operations, unless otherwise indicated.
We design, manufacture and service a full line of
commercial laundry equipment for sale in the U.S. and for export
to numerous international markets. We also manufacture consumer
washing machines for sale to international customers. We produce
all of our products in the U.S. at two manufacturing plants
located in Ripon, Wisconsin and Marianna, Florida. We also
provide equipment financing to laundromat operators and other
end-users.
Alliance originated from the acquisition of Speed
Queen Company ("Speed Queen") by Raytheon Company
("Raytheon") in October of 1979 and it was an
operating unit of Raytheon under various names, including Speed
Queen and Raytheon Appliances, Inc. On September 10,
1997, in connection with the sale by Raytheon of its consumer
laundry business ("Amana Transaction"), Raytheon
Appliances, Inc. was dissolved. Concurrently, Raytheon
Commercial Laundry LLC was established as a limited liability
company to carry on the commercial laundry portion of
Raytheon's appliance business.
Basis of Presentation
On May 5, 1998 a recapitalization (the
"Recapitalization") and merger transaction occurred,
pursuant to which Raytheon Commercial Laundry LLC was renamed
"Alliance Laundry Holdings LLC." The transactions were
accounted for as a recapitalization and accordingly, the
historical accounting basis of the assets and liabilities was
unchanged. The financial statements represent the consolidated
financial position and results of operations of Alliance
Holdings, including its wholly-owned direct and indirect
subsidiaries, Alliance Laundry Systems LLC and Alliance Laundry
Corporation which were formed in connection with the
Recapitalization.
In connection with the Recapitalization and other
related transactions, the Company contributed substantially all
of its assets and liabilities to Alliance Laundry Systems LLC, a
newly formed limited liability company. Immediately after the
consummation of the transactions, Alliance Laundry became the
only direct subsidiary of Alliance Holdings and succeeded to
substantially all of the assets and liabilities of Alliance.
Subsequent to May 4, 1998, Alliance Laundry comprises all
of our operating activities.
All material intercompany transactions have been
eliminated in the preparation of these financial statements.
Note 2—
Significant Accounting Policies:
Use of Estimates
The preparation of financial statements in
conformity with generally accepted accounting principles
requires us to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimates.
F-7
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
Cash, Cash Equivalents and Cash
    Management
We consider all highly liquid debt instruments
with an initial maturity of three months or less at the date of
purchase to be cash equivalents. Restricted cash at
December 31, 2002 represents unremitted collections on
notes receivable sold prior to May 5, 1998.
Revenue Recognition
Revenue from product sales is recognized by us
when all of the following criteria are met: persuasive evidence
of an arrangement exists; delivery has occurred and ownership
has transferred to the customer; the price to the customer is
fixed or determinable; and collectibility is reasonably assured.
With the exception of certain sales to international customers,
which are recognized upon receipt by the customer, these
criteria are satisfied, and accordingly, revenue is recognized
upon shipment by us.
Shipping and Handling Fees and Costs
In accordance with Emerging Issues Task Force
("EITF") Issue No. 00-10 "Accounting for
Shipping and Handling Fees and Costs," shipping and
handling fees and costs are reflected in net revenues and cost
of goods sold as appropriate.
Sales Incentive Costs
In accordance with EITF Issue No. 01-09
"Accounting for Consideration Given by a Vendor to a
Customer (Including a Reseller of the Vendor's
Products)," all sales incentive costs including cash
discounts, customer promotional allowances, and volume rebates
are reflected as a reduction of net revenues.
Financing Program Revenue
As discussed below, we sell notes receivable and
accounts receivable through our special-purpose bankruptcy
remote entities. As servicing agent, we retain collection and
administrative responsibilities for the notes and accounts
receivable. We earn a servicing fee, based on the average
outstanding balance. In addition, we have recorded gains or
losses on the sales of notes receivable and accounts receivable
in the period in which such sales occur in accordance with
Statement of Financial Accounting Standards ("SFAS")
No. 125, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishment of Liabilities" through
March 31, 2001 and subsequently in accordance with
SFAS No. 140 as discussed below. We also recognize
interest income on beneficial interests retained in the period
the interest is earned. Servicing revenue, interest income on
beneficial interests retained, and gains on the sale of notes
receivable are included in commercial laundry revenue.
During the second quarter of 2001, we adopted
SFAS No. 140 "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of
Liabilities, a Replacement of FASB Statement No. 125."
This Statement revised certain aspects of the existing standards
for accounting for securitizations and other transfers of
financial assets and collateral, and required certain new and
expanded disclosures. SFAS No. 140 was effective for
us in the second quarter of 2001 and did not have a material
effect on our financial statements with respect to the
recognition and measurement of sales of financial assets.
Effective April 1, 2001, we also adopted the
provisions of EITF Issue No. 99-20 "Recognition of
Interest Income and Impairment on Purchased and Retained
Beneficial Interests in Securitized Financial Assets." In
accordance with the provisions of EITF 99-20, we recognized
an approximate $2.0 million charge upon adoption as the
cumulative effect of this accounting change. The
$2.0 million effect of adoption reflects the recognition of
write-downs of our retained interests pursuant to the impairment
provisions of
F-8
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
EITF 99-20. We also recognize interest
income on retained beneficial interests in accordance with
EITF 99-20.
Sales of Accounts Receivable and Notes
    Receivable (See Notes 4 and 5)
According to SFAS No. 125 and 140, a
transfer of financial assets in which the transferor surrenders
control over those assets is accounted for as a sale to the
extent that consideration other than beneficial interests in the
transferred assets is received in exchange. We sell all of our
trade receivable and eligible notes receivable to third parties
through special-purpose bankruptcy remote entities designed to
meet the SFAS No. 125 and 140 requirements for sale
treatment. Accordingly, we remove these receivables from our
balance sheet at the time of transfer.
In a subordinated capacity, we retain rights to
the residual portion of cash flows, including interest earned,
from the notes receivable sold. This retained beneficial
interest is recorded at its estimated fair value at the balance
sheet date. In determining the gain on sales of notes
receivable, the investment in the sold receivable pool is
allocated between the portion sold and the portion retained,
based on their relative fair values. We generally estimate the
fair values of our retained interests based on the present value
of expected future cash flows to be received, using our best
estimate of key assumptions, including credit losses, prepayment
rates, interest rates and discount rates commensurate with the
risks involved. Unrealized gains and losses resulting from
changes in the estimated fair value of our retained interests
are recorded as other comprehensive income (loss). Impairment
losses are recognized when the estimated fair value is less than
the carrying amount of the retained interest in accordance with
EITF 99-20.
Inventories
Inventories are stated at cost using the
first-in, first-out method but not in excess of net realizable
value. Our policy is to evaluate all inventory including
manufacturing raw material, work-in-process, finished goods, and
spare parts. Inventory in excess of our estimated usage
requirements is written down to its estimated net realizable
value. Inherent in the estimates of net realizable value are our
estimates related to future manufacturing schedules, customer
demand, possible alternate uses and ultimate realization of
potentially excess inventory.
Notes Receivable
Notes receivable reflect equipment loans that we
expect to sell shortly after the balance sheet date, and
non-performing and other loans not eligible for sale to our
existing securitization facilities. Notes receivable are stated
at the principal amount outstanding, net of allowance for credit
losses. Interest income is accrued as earned on outstanding
balances. Recognition of income is suspended when we determine
that collection of future income is not probable (after
90 days past due). Fees earned and incremental direct costs
incurred upon origination of equipment loans are not significant.
We determine that a note receivable is impaired
when it is probable that we will be unable to collect all
amounts due according to the contractual terms of the note.
These equipment loans are collateral-dependent and accordingly,
measurement of impairment is based upon the estimated fair value
of collateral.
The determination of the allowance for credit
losses is based on an analysis of the related notes and reflects
an amount which, in our judgment, is adequate to provide for
probable credit losses. Notes deemed to be uncollectible are
charged off and deducted from the allowance. The allowance is
increased for recoveries and by charges to income.
F-9
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
Property, Plant
and Equipment
Property, plant and equipment is stated at cost.
Betterments and major renewals are capitalized and included in
property, plant and equipment while expenditures for maintenance
and minor renewals are charged to expense. When assets are
retired or otherwise disposed of, the assets and related
allowances for depreciation and amortization are eliminated and
any resulting gain or loss is reflected in other income
(expense). Long-lived assets, principally property, plant and
equipment, to be held and used are reviewed for impairment
whenever events or changes in circumstances indicate that the
related carrying amount may not be recoverable based upon
related estimated future undiscounted cash flows. When required,
impairment losses on assets to be held and used are recognized
based upon the fair value of the asset as compared to its
carrying value. Long-lived assets to be disposed of by sale are
reported at the lower of carrying amount or fair value less cost
to sell.
Depreciation provisions are based on the
following estimated useful lives: buildings 40 years;
machinery and equipment (including production tooling) 5 to
10 years. Leasehold improvements are amortized over the
lesser of the remaining life of the lease or the estimated
useful life of the improvement.
Intangibles
We adopted SFAS No. 142, "Goodwill
and Other Intangible Assets," in the first quarter of
fiscal 2002. Application of the non-amortization provisions of
SFAS No. 142 resulted in an increase in net income of
approximately $2.0 million in fiscal 2002. The following
sets forth a reconciliation of net income for the periods
presented as if the non-amortization provisions of
SFAS No. 142 had been applied as of January 1,
2001.
Year Ended December 31,
2003
2002
2001
Reported net income
$
15,919
$
1,335
$
687
Add: Goodwill amortization
–
–
2,046
Adjusted net income
$
15,919
$
1,335
$
2,733
SFAS No. 142 also requires a goodwill
impairment review to be performed at least annually by applying
a fair-value-based test at an appropriate level within the
entity. This test involves a comparison of a reporting
unit's estimated fair value to its carrying value. If the
estimated fair value is in excess of the carrying value, the
test is complete and no goodwill impairment is recorded. We
estimate fair value based upon estimates of discounted cash
flows, including expectations of future operating results. We
have completed the analysis required by SFAS No. 142
and have concluded that no impairment of recorded goodwill
exists at December 31, 2003.
Debt Issuance
Costs
As a result of amending and restating our Senior
Credit Facility in 2002, we wrote-off $2.0 million of
remaining unamortized debt issuance costs associated with the
previous facility and capitalized as debt issuance costs the
fees associated with the new facility of $6.3 million.
Accumulated amortization was $5.8 million and
$3.8 million at December 31, 2003 and 2002,
respectively.
Warranty
Liabilities
The cost of warranty obligations are estimated
and provided for at the time of sale. Standard product
warranties cover most parts for three years and certain parts
for five years.
F-10
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
Research and
Development Expenses
Research and development expenditures are
expensed as incurred. Research and development costs were
$6.7 million, $6.7 million and $5.8 million in
2003, 2002 and 2001, respectively.
Advertising
Expenses
We expense advertising costs as incurred. We
incurred advertising expenses of approximately
$3.1 million, $2.9 million, and $3.2 million in
2003, 2002 and 2001, respectively.
Income
Taxes
As a result of the Recapitalization, we are a
stand-alone limited liability company and are not subject to
federal and most state income taxes.
Class B and
C Units
The Company issued Class B and C Unit
interests to certain members of management in connection with
the May 5, 1998 recapitalization transaction, and certain
additional Class B and Class M interests in 2003 (see
Note 10). These units were issued for nominal consideration
based upon the subordinated nature of such interests, and
represent performance-based compensatory awards for accounting
purposes. Compensation expense is measured each period based
upon the estimated fair value of all common units and recognized
over the vesting period when it becomes probable that certain
target multiples, as defined, will be achieved. No compensation
expense related to these units was recognized in 2003, 2002 or
2001.
Fair Value of
Other Financial Instruments
The carrying amounts reported in the consolidated
balance sheets for cash and cash equivalents, accounts
receivable, and accounts payable approximate fair value due to
the short-term maturity of these financial instruments. The
amounts reported for borrowings under the Senior Credit Facility
approximate fair value since the underlying instruments bear
interest at variable rates that reprice frequently. The fair
value of our senior subordinated notes at December 31, 2003
is estimated based upon prices prevailing in recent market
transactions. The fair value of interest rate swaps are obtained
based upon third party quotes.
Derivative
Financial Instruments
We adopted SFAS No. 133,
"Accounting for Derivative Instruments and Hedging
Activities" on January 1, 2001. SFAS No. 133
as amended, requires us to recognize all derivatives as either
assets or liabilities and measure those instruments at fair
value, and recognize changes in the fair value of derivatives in
net income or other comprehensive income, as appropriate.
In accordance with the transition provisions of
SFAS 133, we recorded a cumulative-effect-type gain
adjustment of $0.7 million in other comprehensive income
(loss) within members' deficit to recognize at fair value
its interest rate swap arrangements at January 1, 2001. We
reclassified in earnings during 2001 approximately
$0.6 million of the transition adjustment that was recorded
in other comprehensive income (loss). For the year ended
December 31, 2001, we recognized a loss of
$1.5 million reflecting the subsequent changes in the fair
values of our interest rate swaps and a gain of
$0.6 million for the reclassification of the transition
adjustment as discussed above. We entered into a new interest
rate swap agreement in December 2002. We recognized losses of
$1.4 million and $1.8 million reflecting the
subsequent changes in the fair value of this interest rate swap
for the years ended December 31, 2003 and December 31,
2002 respectively.
F-11
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
Credit
Risk
Financial instruments that potentially subject us
to concentrations of credit risk include trade accounts
receivable and notes receivable, and related retained interests
in securitized accounts and notes receivable. Concentrations of
credit risk with respect to trade receivables and notes
receivable are limited, to a degree, by the large number of
geographically diverse customers that make up our customer base.
The Company's sales to international customers accounted
for 12.7%, 11.5% and 12.8% of net revenues in 2003, 2002 and
2001, respectively. We control credit risk through credit
approvals, credit limits and monitoring procedures, as well as
secured payment terms or Foreign Credit Insurance Agency
("FCIA") insurance for sales to international
customers.
Certain
Concentrations
We sell our products primarily to independent
distributors. Our largest customer accounted for 15.8%, 16.8%
and 15.7% of net revenues in 2003, 2002 and 2001, respectively.
Recently
Issued Accounting Standards
In June 2001, the Financial Accounting Standards
Board ("FASB") issued SFAS No. 143,
"Accounting for Asset Retirement Obligations." This
statement addresses the financial accounting and reporting for
obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs. The
provisions of SFAS No. 143 are effective for fiscal
years beginning after June 15, 2002. We adopted
SFAS No. 143 effective January 1, 2003. The
adoption did not have any impact on the consolidated financial
statements.
In November 2002, the FASB issued FASB
Interpretation No. ("FIN") 45,
"Guarantor's Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of
Indebtedness of Others." FIN 45 requires that upon
issuance of a guarantee, the guarantor must recognize a
liability for the fair value of the obligation it assumes under
that guarantee. In addition, FIN 45 requires additional
disclosures about the guarantees that an entity has issued,
including a reconciliation of the changes in the entity's
product warranty liabilities during the reporting period. The
initial recognition and measurement provisions of FIN 45
are applicable on a prospective basis to guarantees issued or
modified after December 31, 2002. We adopted the provisions
of this statement effective January 1, 2003. The adoption
of the recognition and measurement provisions did not have a
material impact on the consolidated financial statements.
During January 2003, the FASB issued FIN
No. 46, "Consolidation of Variable Interest
Entities," which clarifies the consolidation and disclosure
requirements related to variable interests in a variable
interest entity. A variable interest entity is an entity for
which control is achieved through means other than voting
rights. In December 2003, the FASB issued a revision to FIN
No. 46, which replaced FIN No. 46. The revised
Interpretation ("FIN 46-R") must be adopted by
us, based upon our status as a non-public entity as defined by
FIN 46-R, beginning on January 1, 2005 for interests
in entities created on or before December 31, 2003 and as
of the date we first become involved with a potential variable
interest entity created after December 31, 2003.
FIN 46-R provides exceptions from its scope
for certain entities, including qualifying special-purpose
securitization entities subject to the reporting requirements of
SFAS No. 140 and business entities, as defined, that
do not possess certain characteristics.
Our primary variable interests are notes
receivable that have not been sold and are comprised primarily
of equipment loans to laundromat operators and other end-users.
Excluding notes awaiting sale, the carrying value of such loans
was approximately $4.5 million at December 31, 2003.
We are continuing our evaluation of FIN 46-R and
accordingly, at this time cannot determine the effects of
adoption, if any, on our consolidated financial statements. If
in the future, however, we are required to consolidate a variable
F-12
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Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
interest entity in which one or both of our
SFAS No. 140 qualifying special-purpose entities also
holds a variable interest, the qualifying status of the
special-purpose entity with such holdings would be eliminated.
In that instance, we would be required to determine if we are
the primary beneficiary of the affected securitization entity
under FIN 46-R and if so, to consolidate that entity, which
would have a material effect on our consolidated financial
position, results of operations and cash flows.
During April 2003, the FASB issued
SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities," which
amends and clarifies financial accounting and reporting for
certain derivative instruments modified or entered into after
June 30, 2003. Generally, the provisions of
SFAS No. 149 are effective beginning July 1,
2003. We adopted SFAS No. 149 effective July 1,
2003. The adoption did not have any impact on our consolidated
financial statements.
During May 2003, the FASB issued
SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and
Equity," which establishes standards for the classification
and measurement of certain financial instruments with
characteristics of both liabilities and equity. The FASB has
also subsequently issued certain Staff Positions that
effectively amended SFAS No. 150. The statement is
effective for us beginning January 1, 2004. The adoption of
SFAS No. 150, as amended, will result in
classification of our mandatorily redeemable preferred equity as
a liability.
During December 2003, the FASB revised
SFAS No. 132, "Employers' Disclosures about
Pensions and Other Postretirement Benefits," to require
additional disclosures about the assets, obligations, cash
flows, and net periodic benefit cost of defined benefit pension
plans and other defined benefit postretirement plans. These
disclosure requirements are effective immediately for our plans,
except for estimated future benefit payments, which will be
effective in 2004. This statement also requires interim-period
disclosures of the components of net periodic benefit cost and,
if significantly different from previously disclosed amounts,
the amount of contributions and projected contributions to fund
pension and other postretirement benefit plans. These
interim-period disclosures will be effective for us in the first
quarter of 2004.
In December 2003, the Staff of the SEC issued
Staff Accounting Bulletin ("SAB") No. 104
("SAB No. 104"), "Revenue Recognition",
which supersedes SAB No. 101, "Revenue Recognition in
Financial Statements". SAB No. 104's primary
purpose is to rescind accounting guidance contained in SAB
No. 101 related to multiple element revenue arrangements,
superseded as a result of the issuance of EITF 00-21,
"Accounting for Revenue Arrangements with Multiple
Deliverables." Additionally, SAB No. 104 rescinds the
SEC's Revenue Recognition in Financial Statements
Frequently Asked Questions and Answers (the "FAQ")
issued with SAB No. 101. Selected portions of the FAQ have
been incorporated into SAB No. 104. While the wording of
SAB No. 104 has changed to reflect the issuance of
EITF 00-21, the revenue recognition principles of SAB
No. 101 remain largely unchanged by the issuance of SAB
No. 104. The adoption of SAB No. 104 did not have any
impact upon our consolidated financial statements.
The FASB is expected to re-expose a proposed
statement in the first quarter of 2004 that would amend and
clarify SFAS No. 140 (and related implementation
guidance). The proposed statement will address permitted
activities of qualifying special-purpose entities, including the
degree of discretion allowable in determining the terms of
beneficial interests issued after inception, and whether certain
transfers can meet the criteria for sale accounting under
SFAS No. 140 if the transferor or any consolidated
affiliate provides liquidity support for the transferee's
beneficial interests. As the proposed statement has not been
issued, we are unable to determine the effects, if any, on our
existing securitization entities, or the related transition
provisions. However, in the event that transfers to our existing
asset backed facility would no longer qualify as sales of
financial assets in the future, we may recognize additional
costs for a replacement facility or other material financial
statement effects.
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Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
Reclassifications
Certain amounts in the prior year financial
statements have been reclassified to conform to the current year
presentation.
Note 3—Infrequently Occurring
Items:
We entered into an amended and restated credit
agreement dated as of August 2, 2002. As a result, we
recorded a loss on early extinguishment of debt of approximately
$2.0 million, to write-off unamortized debt issuance costs
related to our prior term loan and revolving credit facilities.
During 2002 we wrote-off $3.4 million for
certain costs incurred while pursuing an initial public offering
through a Canadian Income Trust. Due to market conditions, we
determined that such a public offering would not be advantageous
to Alliance at that time.
We entered into a new asset backed facility dated
as of November 26, 2002. As a result, we recorded
transaction expenses of $10.9 million.
Note 4—
Equipment Financing and Sales of Notes
    Receivable:
General
We maintain an internal financing organization to
originate and administer promissory notes for financing of
equipment purchases for primarily laundromats. These notes
typically have terms ranging from Prime plus 1.0% to Prime plus
6.0% for variable rate notes and 7.9% to 14.5% for fixed rate
notes. The average interest rate for all notes at
December 31, 2003 approximates 8.0% with terms ranging from
2 to 9 years. All notes allow the holder to prepay
outstanding principal amounts without penalty, and are therefore
subject to prepayment risk.
Funding
Facilities
On November 26, 2002, Alliance, through a
special-purpose bankruptcy remote subsidiary, Alliance Laundry
Equipment Receivables 2002 LLC ("ALER 2002"), and a
trust, Alliance Laundry Equipment Receivables Trust 2002-A
("ALERT 2002A"), entered into a three year
$300.0 million revolving facility (the "Asset Backed
Facility"), backed by equipment loans and trade receivables
originated by us. During the first three years of the new Asset
Backed Facility, we are permitted, from time to time, to sell
our trade receivables and certain equipment loans to the
special-purpose subsidiary, which in turn will transfer them to
the trust. The trust finances the acquisition of the trade
receivables and equipment loans through borrowings under the
Asset Backed Facility, which are limited to an advance rate of
approximately 95% for equipment loans and 60-70% for trade
receivables. Funding availability for trade receivables is
limited to a maximum of $60.0 million, while funding for
equipment loans is limited at $300.0 million less the
amount of funding outstanding for trade receivables. Funding for
the trade receivables and equipment loans is subject to certain
eligibility criteria, including concentration and other limits,
standard for transactions of this type. After three years from
the closing date, which is December 2, 2005, (or earlier in
the event of a rapid amortization event or an event of default),
the trust will not be permitted to request new borrowings under
the facility and the outstanding borrowings will amortize over a
period of up to nine years. As of December 31, 2003, the
balance of variable funding notes due to lenders under the Asset
Backed Facility for equipment loans was $187.8 million.
Additional advances under the Asset Backed
Facility are subject to certain continuing conditions, including
but not limited to (i) the weighted average life, weighted
average interest rate, and the amount of fixed rate equipment
loans held by the trust, (ii) the absence of a rapid
amortization event or event of default,
F-14
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
as defined, (iii) our compliance, as
servicer, with certain financial covenants, and (iv) no
event having occurred which materially and adversely affects our
operations.
The variable funding notes under the Asset Backed
Facility will commence amortization and borrowings thereunder
will cease prior to three years after the closing date upon the
occurrence of certain "rapid amortization events"
which include: (i) a borrowing base shortfall exists and
remains uncured, (ii) delinquency, dilution or default
ratios on pledged receivables and equipment loans exceeding
certain specified ratios in any given month, (iii) the days
sales outstanding on receivables exceed a specified number of
days, (iv) the occurrence and continuance of an event of
default or servicer default under the Asset Backed Facility,
including but not limited to, as servicer, a material adverse
change in our business or financial condition and our compliance
with certain required financial covenants, and (v) a number
of other specified events.
The risk of loss to the note purchasers under the
new Asset Backed Facility resulting from default or dilution on
the trade receivables and equipment loans is protected by credit
enhancement, provided by us in the form of cash reserves,
letters of credit and overcollateralization. Further, the timely
payment of interest and the ultimate payment of principal on the
facility is guaranteed by Ambac Assurance Corporation. All of
the residual beneficial interests in the trust and cash flows
remaining from the pool of receivables and loans after payment
of all obligations under the Asset Backed Facility would accrue
to our benefit. Except for the retained interests and amounts of
the letters of credit outstanding from time to time as credit
enhancement, we provide no support or recourse for the risk of
loss relating to default on the assets transferred to the trust.
In addition, we are paid a monthly servicing fee equal to
one-twelfth of 1.0% of the aggregate balance of such trade
receivables and equipment loans.
The estimated fair value of our beneficial
interests in the accounts receivable and notes sold to ALERT
2002A are based on the amount and timing of expected
distributions to us as the holder of the trust's residual
equity interests. Such distributions may be substantially
deferred or eliminated, and result in an impairment of our
residual interests, if repayment of the variable funding notes
issued by ALERT 2002A is accelerated upon an event of default or
rapid amortization event described above.
The Asset Backed Facility replaces a similar
facility previously maintained with Lehman Commercial
Paper, Inc. (the "ALRW Facility"). In connection
with the establishment of the new facility, Alliance, through
its special-purpose subsidiaries repurchased and simultaneously
resold the assets held by the ALRW Facility to the new Asset
Backed Facility. Included in 2002 commercial laundry revenue is
a gain of approximately $2.0 million related to these
transactions, essentially reflecting the sale of notes
receivable under the Asset Backed Facility and the recognition
of previously unrecognized gains related to retained interests
in the ALRW Facility.
Prior to the Recapitalization, Alliance, through
a special-purpose bankruptcy remote entity Alliance Commercial
Appliances Finance LLC ("ACAF"), entered into an
agreement dated March 26, 1997, with Falcon Asset
Securitization Corporation ("Falcon") and Bank One,
NA, as agent for Falcon. Pursuant to that agreement, the
special-purpose entity sold to Falcon defined pools of notes
receivable purchased from the Company. ACAF stopped selling
notes receivable to Falcon as of May 4, 1998 and, as of
June 30, 2003 the facility was terminated.
Sales
of Notes Receivable
Gains on sales of notes receivable and other net
finance program income in 2003, 2002, and 2001 of approximately
$6.3 million, $7.2 million, and $6.5 million,
respectively, is included in commercial laundry revenue.
F-15
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
Pursuant to the terms of the ALRW Facility, on
November 28, 2000, the Company, through a wholly-owned
subsidiary, Alliance Laundry Equipment Receivables LLC
("ALER") and Alliance Laundry Equipment Receivable
Trust 2000-A ("ALERT"), a trust formed by ALER,
completed the securitization of $137.8 million of notes
receivable related to equipment loans. The transaction was
financed by the issuance of $128.2 million of equipment
loan-backed notes issued by ALERT and certain interests retained
by us. Proceeds from the issuance of the notes by ALERT were
used to repay amounts outstanding under the ALRW Facility, with
the balance received by us in settlement of our related retained
interests. We hold all of the residual equity interests of the
trust, which we do not consolidate based upon its
special-purpose bankruptcy remote status, and we are paid a
monthly servicing fee equal to one-twelfth of 1.0% of the
aggregate balance of loans held by the trust. At
December 31, 2003 and 2002, we have recorded
$5.1 million and $7.6 million, respectively, related
to the estimated fair value of our beneficial interests in the
notes sold to the trust.
The estimated fair value of our beneficial
interests in the notes sold to the trust are based on the amount
and timing of expected distributions to us as the holder of the
trust's residual equity interests. Such distributions may
be substantially deferred or eliminated, and result in an
impairment of our residual interests, if repayment of amounts
due under the notes issued by ALERT is accelerated upon an event
of default or early payout event, as defined. These events
include (i) delinquency or default ratios on equipment
loans exceeding certain specified levels, (ii) a failure by
us, as servicer, to comply with certain financial covenants or
maintain minimum credit ratings with respect to our senior
secured or senior subordinated unsecured obligations,
(iii) a material adverse change in our business or
financial condition, and (iv) a number of other specified
events.
Portfolio
Information
The table below summarizes certain information
regarding our equipment loan portfolio, delinquencies, and cash
flows received from and paid to our special-purpose
securitization entities:
December 31, 2003
December 31, 2002
Principal Amount of
Principal Amount of
Principal
Loans 60 Days or
Principal
Loans 60 Days or
Amount
More Past Due
Amount
More Past Due
Total Portfolio
$
244,127
$
6,643
$
244,964
$
7,369
Less: Loans Sold
234,266
4,693
232,498
2,061
Loans Held
9,861
$
1,950
12,466
$
5,308
Allowance for loan losses
(1,700
)
(1,300
)
$
8,161
$
11,166
For the Year
For the Year
For the Year
Ended
Ended
Ended
December 31,
December 31,
December 31,
2003
2002
2001
Proceeds from sales of loans
$
94,083
$
89,644
$
111,044
Purchase of delinquent or foreclosed assets
$
–
$
(8,818
)
$
(11,354
)
Servicing fees and other net cash flows received
    on retained interests
$
14,475
$
16,411
$
11,555
F-16
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
Our credit losses, on a total portfolio basis, as
a percentage of average loans outstanding during 2003, 2002 and
2001 were 0.89%, 1.12% and 2.05%, respectively. The following
presents activity in the allowance for loan losses related to
loans held on-balance sheet:
Beginning
Charges to
Balance at
of Period
Expense
Deductions
End of Period
Year ended:
December 31, 2001
$
2,614
2,895
4,693
816
December 31, 2002
$
816
3,143
2,659
1,300
December 31, 2003
$
1,300
1,844
1,444
1,700
Valuation of Retained Interests
With respect to the Asset Backed Facility, we
recognize beneficial interests in notes sold to ALER 2002, which
represents the estimated fair value of our retained interest in
the residual cash flows, including interest earned from notes
sold, and the present value of estimated proceeds from a cash
reserve account. We have also recognized our interest in the
residual equity of ALERT.
December 31,
2003
2002
Beneficial interests in notes sold to ALER 2002
17,539
13,674
Other beneficial interests in notes sold—
    ALERT
5,137
7,809
$
22,676
$
21,483
Key economic assumptions used in valuing retained
interests at December 31, 2003 and 2002 were as follows:
2003
2002
Average prepayment speed (per annum)
25.0%
25.0%
Expected credit losses (per annum)
1.0%
0.6% - 1.0%
Residual cash flows discounted at
12.5%
12.5%
The weighted-average remaining expected life of
notes receivable sold by us was approximately 21 months at
December 31, 2003.
At December 31, 2003 and 2002, key economic
assumptions and the sensitivity of the current fair value
estimates of such retained interests to immediate
10 percent and 20 percent adverse changes in those
assumptions are as follows:
December 31,
2003
2002
Prepayment speed assumption:
Impact on FV 10% adverse change
(165
)
(222
)
Impact on FV 20% adverse change
(317
)
(440
)
Expected credit losses:
Impact on FV 10% adverse change
(251
)
(216
)
Impact on FV 20% adverse change
(501
)
(432
)
Residual cash flow discount rate:
Impact on FV 10% adverse change
(382
)
(398
)
Impact on FV 20% adverse change
(752
)
(783
)
F-17
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
These sensitivities are hypothetical and the
effect of a variation in a particular assumption on the
estimated fair value of retained interests is calculated without
changing any other assumptions; in reality, changes in one
factor may result in changes in another, which may magnify or
counteract the sensitivities.
Note 5—
Sales of Accounts Receivable:
As described in Note 4 above, we, through
our bankruptcy remote subsidiary ALER 2002, entered into the
Asset Backed Facility to finance the sale of all of our trade
receivables and certain eligible notes receivable related to
equipment loans. With respect to the variable funding notes (the
"Notes") secured by trade receivables, the Asset
Backed Facility lenders will make loans which approximate 60% to
70% of the outstanding amount of trade receivables sold. Funding
for the trade receivables is subject to certain eligibility
criteria, including concentration and other limits, standard for
transactions of this type. As servicer, we retain collection and
administrative responsibilities for the accounts receivable
sold. The total amount of uncollected balances on trade accounts
receivable sold at December 31, 2003 was $45.5 million
and the variable funding notes due to lenders under the Asset
Backed Facility for trade receivables was $31.8 million.
Losses on sales of trade accounts receivable and
related expenses of $1.5 million, $1.0 million and
$1.8 million in 2003, 2002 and 2001, respectively, are
included in selling, general and administrative expense. Our
retained interest in trade accounts receivable sold to ALER 2002
at December 31, 2003 and 2002 is $16.8 million and
$19.9 million, respectively. We stopped selling trade
receivables to ALRW and on December 3, 2002, all amounts
outstanding under the ALRW Facility were paid off and ALRW
ceased all activities.
Note 6—
Inventories:
Inventories consisted of the following at:
December 31,
2003
2002
Materials and purchased parts
$
9,167
$
11,124
Work in process
3,074
4,312
Finished goods
15,394
12,990
Less: inventory reserves
(1,420
)
(2,729
)
$
26,215
$
25,697
Note 7—
Property, Plant and Equipment:
Property, plant and equipment consisted of the
following at:
December 31,
2003
2002
Land
$
910
$
910
Buildings and leasehold improvements
29,776
29,744
Machinery and equipment
154,346
151,228
185,032
181,882
Less: accumulated depreciation
(152,246
)
(144,426
)
32,786
37,456
Construction in progress
1,249
1,640
$
34,035
$
39,096
F-18
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
Depreciation expense was $8.6 million,
$10.4 million and $11.8 million for the years ended
December 31, 2003, 2002 and 2001, respectively.
Note 8—
Other Current Liabilities:
The major components of other current liabilities
consisted of the following at:
December 31,
2003
2002
Warranty reserve
$
4,759
$
4,890
Accrued sales incentives
2,626
3,885
Salaries, wages and other employee benefits
5,100
4,769
Accrued interest
6,066
5,805
Other current liabilities
1,877
2,289
$
20,428
$
21,638
Note 9—
Debt:
Debt consisted of the following at:
December 31,
2003
2002
Term loan facility
$
157,000
$
183,000
Senior subordinated notes
110,000
110,000
Junior subordinated note
24,171
20,312
Revolving credit facility
–
–
Other long-term debt
1,028
1,265
Gross long-term debt
292,199
314,577
Less: current portion
(11,270
)
(9,971
)
$
280,929
$
304,606
Senior Credit Facility
On August 2, 2002 we amended and restated
our May of 1998 credit agreement with a syndicate of financial
institutions. The amended and restated credit facility (the
"Senior Credit Facility") is comprised of a term loan
facility aggregating $193.0 million (the "Term
Loan Facility") and a $45.0 million revolving
credit facility (the "Revolving Credit Facility").
Among other modifications, the amended and restated agreement
extends the Senior Credit Facility termination date from
May 5, 2003 to August 5, 2007. The Term
Loan Facility requires principal payments of
$2,205 per quarter through June 2004, payments of
$3,308 per quarter for September 2004 through June 2006,
and payments of $5,513 per quarter for September 2006
through March 2007. Final payment of $109,591 is due August
2007. We are required to make prepayments with the proceeds from
the disposition of certain assets and from excess cash flow, as
defined.
The Term Loan Facility bears interest, at
our election, at either the Lenders' Base Rate plus a
margin of 2.5% or the Eurodollar Rate plus a margin of 3.5%. The
Revolving Credit Facility bears interest, at our election, at
either the Base Rate plus a margin ranging from 1.5% to 2.5% or
the Eurodollar Rate plus a margin ranging from 2.5% to 3.5%.
The interest rate on term loan borrowings
outstanding at December 31, 2003 and 2002 was 4.7% and
5.3%, respectively. Borrowings outstanding under the Senior
Credit Facility are secured by substantially all of the
F-19
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
real and personal property of the Company and its
domestic subsidiaries (other than the financing subsidiaries).
Letters of credit issued on our behalf under the Revolving
Credit Facility totaled $25.3 million at December 31,
2003.
Additional borrowings and the issuance of
additional letters of credit under the Senior Credit Facility
are subject to certain continuing representations and
warranties, including the absence of any development or event
which has had or could reasonably be expected to have a material
adverse effect on our business or financial condition.
Senior
Subordinated Notes
Also on May 5, 1998, the Company and its
wholly-owned subsidiary, Alliance Laundry Corporation, issued
$110.0 million of 9 5/8% senior subordinated
notes due in 2008 (the "Notes") to Lehman Brothers
Inc. and Credit Suisse First Boston Corporation (the
"Initial Purchasers"). The Initial Purchasers
subsequently resold the Notes to qualified institutional buyers
pursuant to Rule 144A of the Securities and Exchange Act
and to a limited number of institutional accredited investors
that agreed to comply with certain transfer restrictions and
other conditions.
The Notes are general unsecured obligations and
are subordinated in right of payment to all current and future
senior debt, including permitted borrowings under the Senior
Credit Facility.
Interest on the Notes accrues at the rate of
9 5/8% per annum and is payable semi-annually in
arrears on May 1 and November 1. The fair value of the
Notes at December 31, 2003 and 2002 was approximately
$110.6 million and $93.5 million, respectively, based
upon prices prevailing in recent market transactions.
The Notes are subject to redemption at any time
at the option of the Company, in whole or in part, upon not less
than 30 nor more than 60 days notice, at the redemption
prices (expressed as percentages of principal amount) set forth
below plus accrued and unpaid interest thereon, if any, to the
applicable redemption date, if redeemed during the twelve-month
period beginning on May 1 of the years indicated below:
Year
Redemption Price
2003
104.813%
2004
103.208%
2005
101.604%
2006 and thereafter
100.000%
We are required under the terms of the Notes to
offer to redeem the Notes at a redemption price of 101% of the
principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the redemption date, upon a change of
control, as defined. Further, we are required to offer to redeem
the Notes at a redemption price of 100% of the principal amount
thereof plus accrued and unpaid interest thereon, if any, to the
redemption date, when the amount of excess proceeds from asset
sales, as defined, exceeds $10 million, up to the maximum
principal amount that may be purchased out of such excess
proceeds.
As discussed above, Alliance Laundry and its
wholly-owned subsidiary, Alliance Laundry Corporation, issued
the $110.0 million senior subordinated notes. Alliance
Laundry Corporation was incorporated for the sole purpose of
serving as a co-issuer of the Notes in order to facilitate their
issuance. Alliance Laundry Corporation does not have any
substantial operations or assets of any kind. Alliance Laundry
Holdings LLC has provided a full and unconditional guarantee of
the Notes and has no operating activities independent of
Alliance Laundry.
The Senior Credit Facility and the indenture
governing the Notes contain a number of covenants that, among
other things, restrict our ability to dispose of assets, repay
other indebtedness (including, in the
F-20
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
case of the Senior Credit Facility, the Notes),
incur liens, make capital expenditures and make certain
investments or acquisitions, engage in mergers or consolidation
and otherwise restrict our operating activities. In addition,
under the Senior Credit Facility, the Company will be required
to satisfy specified financial ratios and tests, including a
maximum of total debt to EBITDA (earnings before interest,
income taxes, depreciation and amortization) and a minimum
interest coverage ratio.
Junior
Subordinated Promissory Note
On May 5, 1998 we issued a junior
subordinated promissory note (the "Junior Note") in
the principal amount of $9.0 million due August 21,
2009, to Raytheon. In late 2003, Raytheon sold all of its debt
and equity interests, which included the Junior Note (see
Note 14). Pursuant to the terms of the Junior Note,
interest accrues at the rate of 19.0% per annum until the
eighth anniversary of the date of issuance of the Junior Note
and at a rate of 13.0% thereafter. The Junior Note is
subordinated in priority and subject in right and priority of
payment to certain indebtedness described therein. Interest
which accrues on the Junior Note is payable in-kind.
Other
Debt
On August 3, 2000, we received $750,000 in
borrowings; evidenced by a promissory note, pursuant to a
Wisconsin Community Development Block Grant Agreement (the
"Agreement") dated July 10, 2000 between the
Wisconsin Department of Commerce, Alliance Laundry and Fond du
Lac County, Wisconsin. The promissory note bears interest at an
annual rate of 4%, with monthly payments of interest and
principal commencing July 1, 2001 with the final
installment paid on June 1, 2010, subject to the covenants
of the Agreement.
On August 14, 2001, we received $812,000 in
effective borrowings, evidenced by a promissory agreement,
pursuant to an equipment financing transaction with Alliant
Energy— Wisconsin Power & Light Company. The
agreement requires monthly payments commencing
September 14, 2001 with the final installment paid on
July 14, 2006, subject to the covenants of the Agreement.
The stated payments reflect a 3% imputed interest rate.
Debt
Maturities and Liquidity Considerations
The aggregate scheduled maturities of long-term
debt in subsequent years are as follows:
2004
$
11,270
2005
13,484
2006
17,844
2007
115,196
2008
110,095
Thereafter
24,310
$
292,199
At December 31, 2003, based upon the maximum
ratio of consolidated debt to EBITDA (as defined) allowable
under the Senior Credit Facility, we could have borrowed an
additional $19.7 million of the total $19.7 million
unutilized under the Revolving Credit Facility to finance our
operations. The maximum ratio of consolidated debt to EBITDA
under the Senior Credit Facility is scheduled to be reduced from
5.50 at December 31, 2003 to 4.75 at December 31,
2004. We believe that future cash flows from operations,
together with available borrowings under the Revolving Credit
Facility, will be adequate to meet our anticipated requirements
for capital expenditures, working capital, interest payments,
scheduled principal payments and other debt repayments
throughout 2004 that may be required as a result of the
scheduled reduction in the ratio of consolidated debt to EBITDA
discussed above.
F-21
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
Note 10— Mandatorily Redeemable
Preferred Equity and Members' Equity (Deficit):
Members' deficit at December 31, 2003
and 2002 consists of the following:
December 31,
2003
2002
Common members' contributed capital
$
50,645
$
50,645
Retained earnings (accumulated loss)
(193,688
)
(209,607
)
Accumulated other comprehensive income (loss)
(1,386
)
(6,417
)
Management investor promissory notes
(1,329
)
(1,361
)
$
(145,758
)
$
(166,740
)
As discussed in Note 1, the May 5, 1998
merger was accounted for as a recapitalization and accordingly,
the historical accounting basis of assets and liabilities was
unchanged. As such, the consideration paid for the Company,
including the premium paid over the Company's May 5,
1998 net book value, was recorded as a reduction of
members' equity.
Bain/ RCL, L.L.C., a Delaware limited liability
company ("Bain LLC"), certain management and other
third party investors and Raytheon (collectively, the
"Members") have entered into an Amended and Restated
Limited Liability Company Agreement (the "LLC
Agreement"). The LLC Agreement governs the relative rights
and duties of the Members.
The ownership interests of the Members in the
Company consist of preferred units (the "Preferred
Units") and common units (the "Common Units").
Holders of the Preferred Units are entitled to a return of
capital contributions prior to any distributions made to holders
of the Common Units. The Common Units represent the common
equity of the Company.
Preferred
Units
— Upon consummation of the
Recapitalization, we issued mandatorily redeemable preferred
membership interests (the "Seller Preferred Equity")
with a liquidation value of $6.0 million to Raytheon. In
late 2003, Raytheon sold all of its debt and equity interests
(see Note 14). The Seller Preferred Equity does not
accrete, accrue or pay dividends and is redeemable at the
earlier of (i) a change of control (as defined in the LLC
Agreement), (ii) any initial public offering or
(iii) 2009. The holders of the Seller Preferred Equity are
entitled to receive distributions from us in an amount equal to
their unreturned capital (as defined in the LLC Agreement) prior
to distributions in respect of any other membership interests of
the Company.
Common Units
—
The Common Units of our Company are divided into the following
four classes:
Class L
    Units
— These units provide a
    yield of 12% on the unreturned capital and unpaid yield (as
    defined), compounded quarterly. Such accumulated and unpaid
    amounts totaled $43.4 million and $33.5 million at
    December 31, 2003 and 2002, respectively. Class L
    Units do not provide any voting rights to the holders.
Class A
    Units
— These units are the
    primary vehicle of equity ownership in the Company. Class A
    Units are the only units that provide voting rights. Decisions
    made by a majority of the voting holders of Class A Units
    are binding on us, provided that members holding at least 20% of
    the Class A Units are present.
Class B and C
    Units
— Class B Units and
    Class C Units do not provide any voting rights to the
    holders. These units are not eligible to receive distributions
    until we achieve the defined target multiple applicable to each
    class of units. The target multiple is calculated as the sum of
    all distributions to all holders of Class L and
    Class A Units divided by the sum of all capital
    contributions made by such holders. Class B Units become
    eligible to receive distributions when
F-22
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
vested and the target multiple reaches or exceeds
    1.0 and the Class C Units become eligible when vested and
    the target multiple reaches or exceeds 3.0. Pursuant to
    agreements entered into with the members of management who
    participated in the purchase of membership interests (see
    Note 14), the Class B and Class C Units vested
    ratably from May 5, 1998 through May 5, 2003.
Class M
    Units
— On August 1, 2003, we
    amended and restated our Limited Liability Agreement to issue
    Class M Units and to issue incremental Class B Units,
    which in turn have been issued to certain members of management
    (each an "Executive"). The Class M Units
    participate in the yield earned on Class L Units above a
    defined level and have a higher priority in any distributions as
    compared to the Company's Class A, Class B and
    Class C Units. These units were issued in return for the
    Executive's present service to the Company and as an
    incentive for the Executive to continue to provide future
    services to the Company. These units are subject to certain
    terms and conditions which include vesting provisions.
Distributions
—
Subject to any restrictions contained in any financing
agreements to which we or any of our affiliates (as defined in
the LLC Agreement) is a party, the Board of Managers (the
"Board") may make distributions, whether in cash,
property, or securities of the Company, at any time in the
following order of priority:
First,
to the
    holders of Preferred Units, an amount determined by the
    aggregate unreturned capital.
Second,
to the
    holders of Class L Units, an amount equal to the aggregate
    unreturned capital of $45.6 million.
Third,
to the
    holders of Class L Units, the unpaid yield accrued on such
    Class L Units in an amount up to $900 per Class L
    Unit ($5.1 million).
Fourth,
ratably to
    the holders of Class L Units and Class M Units, any
    remaining unpaid yield accrued on the Class L Units
    ($38.3 million at December 31, 2003).
Fifth,
ratably to
    the holders of Common Units, an amount equal to the amount of
    such distribution that has not been distributed pursuant to the
    clauses described above, including achievement of the
    Class B and C Unit target multiples.
We may distribute to each holder of units within
75 days after the close of each fiscal year such amounts as
determined by the Board to be appropriate to enable each holder
of units to pay estimated income tax liabilities. There were no
distributions to holders of units during 2003, 2002 or 2001.
Allocations
—
Profits and losses of our Company are allocated among the
various classes of units in order to adjust the capital accounts
of such holders to the amount to be distributed upon liquidation
of the Company.
Restrictions on Transfer of
Securities
— No holder of
securities may sell, assign, pledge or otherwise dispose of any
interest in the holder's securities except that
(i) Bain LLC may transfer its securities to other security
holders in the same class, (ii) holders may transfer their
securities through applicable laws of descent and distribution,
(iii) transfers of securities may be made to an affiliate,
and (iv) the Preferred Units may be transferred with the
consent of the Board.
F-23
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
Note 11—
Commitments and Contingencies:
At December 31, 2003, we had commitments
under long-term operating leases requiring approximate annual
rentals in subsequent years as follows:
2004
$
507
2005
389
2006
210
2007
33
2008
33
Thereafter
18
$
1,190
Rental expense for 2003, 2002 and 2001 amounted
to $1.1 million, $1.0 million and $1.1 million,
respectively.
Our Marianna, Florida plant is located on
property leased from the Marianna Municipal Airport Development
Authority (acting on behalf of the City of Marianna). The lease
expires on February 28, 2005 and may be renewed at our
option for five additional consecutive ten year terms.
Our Company and its operations are subject to
comprehensive and frequently changing federal, state and local
environmental and occupational health and safety laws and
regulations, including laws and regulations governing emissions
of air pollutants, discharges of waste and storm water and the
transportation, storage and disposal of wastes, including solid
and hazardous wastes. We are also subject to potential liability
for non-compliance with other environmental laws and for the
investigation and remediation of environmental contamination
(including contamination caused by other parties) at the
properties we own or operate (or formerly owned or operated) and
at other properties where the Company or predecessors have
carried on business or have arranged for the disposal of
hazardous substances. As a result, we are involved, from time to
time, in administrative and judicial proceedings and inquiries
relating to environmental matters. There can be no assurance
that we will not be involved in such proceedings in the future
and that the aggregate amount of future clean-up costs and other
environmental liabilities (including potential fines and civil
damages) will not have a material adverse effect on our
business, financial position and results of operations. However,
in our opinion, any liability related to matters presently
pending will not have a material effect on our financial
position, liquidity or results of operations after considering
provisions already recorded.
In September 1999, Juan Carlos Lopez pursued an
arbitration against Alliance Laundry Sociedad Anonima
("ALSA"), a foreign subsidiary of Alliance Laundry
Systems LLC, under UNCITRAL rules in Buenos Aires, Argentina,
seeking in pertinent part, to be paid fees arising from a
Consulting Agreement, and indemnification for lost profits in
Argentina and Brazil, plus damages for pain and suffering. An
arbitration was conducted by an "ad-hoc" panel (the
"Lopez Arbitration"), during which ALSA contended that
Juan Carlos Lopez failed to fulfill his responsibilities under
the Consulting Agreement and was therefore not entitled to the
fees, and that ALSA was not liable for lost profits in either
Argentina or Brazil, nor for an indemnification for pain and
suffering. On April 3, 2001, the Lopez Arbitration was
concluded. The arbitration panel awarded Argentine Pesos
1,408,900 (equivalent to $1.4 million U.S. dollars at
the time), plus nine percent interest from September 6,
1999, plus ten percent over this principal and interest amount
as moral damages, plus certain fees and costs, while rejecting
other claims of plaintiff. We believed, inasmuch as ALSA was a
foreign subsidiary, ALSA was responsible for its own debts and
obligations. In our opinion based on the advice of counsel,
under the terms of the award, any such payments would have been
forthcoming from the assets of ALSA. On December 20, 2001,
ALSA's bankruptcy was decreed, at the request of
Mr. Lopez, on grounds of non-payment of the arbitration
award.
F-24
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
On December 12, 2002, Mr. Lopez filed a
lawsuit with the National Commercial Court Number 13 in Buenos
Aires, Argentina against us for the amount ordered to be paid in
the Lopez Arbitration, plus unspecified damages caused by the
award not having been timely paid.
Because of the risk this lawsuit presented, we
commenced settlement negotiations with Mr. Lopez in the
second quarter of 2003. On July 17, 2003 a Settlement,
Release, Discharge and Indemnification Agreement was entered
into by Mr. Lopez and the Company. While denying any
liability whatsoever, we agreed to and paid Mr. Lopez
US$736,440 on August 6, 2003 and agreed to deliver to
Mr. Lopez in Brazil commercial laundry equipment, free of
charge, up to a cost to us of US$60,000. In consideration of the
aforementioned payment and delivery of equipment, Mr. Lopez
released and forever discharged, and waived any claims or rights
of any nature whatsoever against the Company and a number of
affiliated subsidiary companies. In addition, Mr. Lopez and
his counsels signed the dismissal of the lawsuit referred to
above. A provision for this settlement was recorded in our 2003
financial statements.
In April, 2002 Alliance was named as a defendant
in a lawsuit filed by Imonex Services, Inc. (the
"Plaintiff") for patent infringement, arising from a
vendor supplied coin selector, the "W2000", used in
certain of our products. The vendor, W. H.
Münzprüfer Dietmar Trenner GmbH
("Münzprüfer"), has indemnified us and has
agreed to pay and is paying for our representation in this
matter. Plaintiff accused Alliance, and other
Münzprüfer customers (the "Defendants"), of
patent infringement resulting from the sales of the W2000 within
the Defendants products. Trial commenced January 6, 2003 in
the United States District Court for the Eastern District of
Texas. Following the trial the Court indicated it would enter an
order rendering judgment for the Plaintiff that the asserted
patent claims were infringed, are not invalid, and were not
procured by inequitable conduct. The Court indicated it will
issue a permanent injunction and invited the parties to submit
proposed injunction languages, and objections thereto. The Court
has withheld ruling upon the timelines of Imonex bringing its
damage claims. The Court reduced the jury's damage verdict
from $10,350,000 ($5,382,000 against the Company with the
remainder against the other Defendants) against all Defendants,
to $490,295 ($267,645 against Allliance with the remainder
against the other Defendants) and gave Plaintiff the option to
accept the reduced damages or have a new trial on damages. On
April 28, 2003, Plaintiff filed an election for a new trial
on damages, and filed proposed language for the injunction. The
Defendants filed their objections to the injunction language on
May 5, 2003. On August 1, 2003, the Court ruled it
will not enhance any damages for willful infringement, while
entering judgment for Plaintiff on the issues of infringement,
and validity of the Plaintiffs' patents. Plaintiff
submitted expert reports at the new trial on damages which
attempted to prove actual damages of $16,267,644 ($6,305,232
against Alliance with the remainder against other Defendants).
On August 12, 2003 a preliminary injunction was issued
prohibiting W2000 coin selector usage.
The trial on damages commenced August 18,
2003 and yielded a jury verdict of $1,396,873 to Plaintiff
($614,662 against Alliance with the remainder against the other
Defendants) against all Defendants.
Final judgment on the August 18, 2003 jury
verdict was rendered on February 9, 2004 against all
Defendants. The final judgment included $614,662 against
Alliance, plus prejudgment interest, yielding $771,728 against
Alliance. In addition, the judgment awarded court costs to the
Plaintiff, including attorney's fees. On February 23,
2004 the Plaintiff submitted an application seeking, from all
Defendants, a total of $669,107 in attorneys' fees and
$133,214 in court costs. The preliminary injunction of
August 12, 2003 was made permanent. The Defendants have
filed a post judgment motion seeking to have the judgment
amended or set aside.
Our position remains that any liability related
to this lawsuit is properly borne by Münzprüfer. We
believe that Münzprüfer has the ability to fully
satisfy its indemnification obligations up to the amount of the
final judgment. We have also reached tentative agreement with
Münzprüfer as to acceptable methods of satisfying the
provisions of the indemnification agreement, in the event the
judgment is not appealed, or is
F-25
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
not overturned upon appeal. In accordance with
generally accepted accounting principles, as a judgment has been
rendered by the court, we have separately recorded an estimate
of the amounts payable to Imonex related to the Alliance
liability and a corresponding receivable balance from
Münzprüfer within our December 31, 2003 financial
statements.
Various claims and legal proceedings generally
incidental to the normal course of business are pending or
threatened against us. While the ultimate liability from these
proceedings is difficult to determine, in our opinion, any
additional liability will not have a material effect on our
financial position, liquidity or results of operations.
Note 12—Guarantees:
The Company, through its special-purpose
bankruptcy remote subsidiary entered into a $300.0 million
Asset Backed Facility as described in Notes 4 and 5 above.
Pursuant to the terms of the Asset Backed Facility, we provide
credit enhancement to the note purchasers including an
irrevocable letter of credit, which is an unconditional lending
commitment of the lenders under the Senior Credit Facility,
subject to certain limits. We are obligated under the
reimbursement provisions of the Senior Credit Facility to
reimburse the lenders for any drawings on the credit enhancement
by the facility indenture trustee. If the credit enhancement is
not replenished by us after a drawing, the trust will not be
permitted to request new borrowings under the Asset Backed
Facility and the Asset Backed Facility will begin to amortize.
The amount of the irrevocable letter of credit related to the
Asset Backed Facility at December 31, 2003 was
$24.0 million.
We offer warranties to our customers depending
upon the specific product and the product use. Standard product
warranties vary from one to three years for most parts with
certain components extending to five years. Certain customers
have elected to buy without warranty coverage. The standard
warranty program requires that we replace defective components
within a specified time period from the date of installation. We
record an estimate for future warranty related costs based on
actual historical incident rates and costs per incident trends.
Based on analysis of these and other factors, the carrying
amount of our warranty liability is adjusted as necessary. While
our warranty costs have historically been within our calculated
estimates, it is possible that future warranty costs could
exceed those estimates.
The changes in the carrying amount of our total
product warranty liability for the years ended December 31,
2003 and 2002 were as follows:
2003
2002
Balance at beginning of period
$
4,890
$
5,090
Accruals for current & pre-existing
    warranties issued during the period
2,250
2,174
Settlements made during the period
(2,381
)
(2,374
)
Balance at end of period
$
4,759
$
4,890
Note 13—
Pensions and Other Employee
    Benefits:
Substantially all of our employees are covered by
a defined benefit pension plan. Effective December 31,
2002, the Alliance Laundry Systems Retirement Benefit
Accumulation Plan, a pension plan covering salaried and
management employees, was merged into the Alliance Laundry
Systems Plan for Hourly Employees. The pension plan as combined
was amended and renamed the Alliance Laundry Systems Pension
Plan. A final determination of the merged plan's qualified
status remains pending with the Internal Revenue Service. The
pension benefit for salaried and management employees is a cash
balance plan whereby an account is established for each
participant in which pay credits are based on salary and
service, and interest credits are earned annually. Pay credits
are calculated as a pre-determined percentage
F-26
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
of the participant's salary adjusted for age
and years of service. Interest credits are earned at the rate of
a one-year U.S. Treasury Bill, as of the last day of the
prior plan year, plus 1%. The pension benefit for hourly and
union employees generally provides benefits of stated amounts
for each year of service. Our funding policy for the salaried
and management employees is to contribute annually at a rate
that is intended to remain at a level percentage of compensation
for the covered employees. Our funding policy for the hourly and
union employees is to contribute annually at a rate that is
intended to remain level for the covered employees. Unfunded
prior service costs under the funding policy are generally
amortized over periods from 10 to 30 years.
Total pension expense (benefit) for our pension
plan was $1.8 million, $0.2 million and
($1.2) million in 2003, 2002, and 2001, respectively,
including the following components:
Years Ended December 31,
2003
2002
2001
Service cost benefits earned during the period
$
1,444
$
1,263
$
1,195
Interest cost on projected benefit obligation
2,569
2,430
2,327
Expected return on plan assets
(2,822
)
(3,548
)
(4,148
)
Net amortization and deferral
587
13
(635
)
Curtailment losses and termination benefits
—
7
67
Net pension benefit cost (benefit)
$
1,778
$
165
$
(1,194
)
Assumptions used in determining net pension
benefit cost (benefit) were as follows:
Years Ended December 31,
2003
2002
2001
Discount rate
6.50%
7.25%
7.50%
Expected long-term rate of return on assets
9.00%
9.25%
9.25%
Rate of increase in salaried compensation levels
4.00%
4.00%
4.00%
In 2002 and 2001, various plan curtailments and
supplemental termination benefits were recognized as a result of
workforce reductions.
To develop the expected long-term rate of return
on assets assumption, we considered historical returns and
future expectations. Over the 10 and 15 year periods ending
December 31, 2003, the returns on the portfolio, assuming
it was invested at the mid point of our investment policy
statement's strategic asset allocation and is rebalanced
annually, would have been an annual average of approximately
10.06% and 10.87%, respectively. Considering this information,
costs of administering the plan and the potential for lower
returns due to a generally lower interest rate environment, we
selected a 9.00% long-term rate of return on assets assumption.
F-27
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
The reconciliation of the changes in the
plan's benefit obligation and the fair value of plan assets
and the statement of the funded status of the plan at
December 31 are as follows:
2003
2002
Change in benefit obligation:
Benefit obligation at beginning of year
$
40,005
$
33,659
Service cost
1,444
1,263
Interest cost
2,569
2,430
Termination benefits
–
7
Actuarial loss
2,000
4,994
Benefits paid
(1,863
)
(2,348
)
Benefit obligation at end of year
$
44,155
$
40,005
Change in plan assets:
Fair value of plan assets at beginning of year
$
32,403
$
39,430
Actual return on plan assets
8,516
(4,679
)
Benefits paid
(1,863
)
(2,348
)
Fair value of plan assets at end of year
$
39,056
$
32,403
Reconciliation of funded status:
Funded status
$
(5,099
)
$
(7,602
)
Unrecognized prior service cost
482
553
Unrecognized net loss (gain)
5,154
9,364
Prepaid benefit cost
$
537
$
2,315
Net amount recognized:
Other long-term liabilities
$
(3,567
)
$
(6,241
)
Intangible asset
482
553
Accumulated other comprehensive loss
3,622
8,003
$
537
$
2,315
Assumptions used to determine the benefit
obligation at end of year were as follows:
2003
2002
Discount rate
6.25%
6.50%
Rate of increase in compensation levels
4.00%
4.00%
We use a December 31 measurement date for
the plan.
The accumulated benefit obligation for the plan
was $42,623 and $38,644 as of December 31, 2003 and 2002,
respectively.
Our pension plan weighted-average asset
allocation at December 31, 2003 and 2002, by asset category
was as follows:
2003
2002
Asset Category:
Equity securities
68
%
61
%
Debt securities
31
%
38
%
Other
1
%
1
%
Total
100
%
100
%
F-28
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
The Board of Managers has established the Pension
Committee (the Committee) to manage the operations and
administration of the pension plan and related trust. The
Committee has an investment policy statement for the pension
plan that establishes target asset allocation ranges by asset
type, plan objectives, securities guidelines for money managers,
evaluation benchmarks and control procedures. The midpoint of
the asset allocation ranges for the above listed asset classes
are as follows: Equity securities 63%, Debt securities 34%, and
Other (cash and cash equivalents) 3%. The Committee is committed
to diversification to reduce the risk of large losses. To that
end, the investment policy requires that each asset class will
be diversified, multiple money managers with differing styles of
management will be employed, and equity exposure will be limited
to 78% of the total portfolio value. On a quarterly basis, the
Committee and an external investment advisor review progress
towards achieving the pension plan and individual money
managers' performance objectives.
In addition to providing pension benefits, we
provide certain health care benefits for retired employees upon
early retirement, up to age 65. Employees with more than
10 years of service are eligible for these benefits if they
reach age 62 while working for us. Retiree health plans are
paid for in part by employee contributions, which are adjusted
annually. Benefits are provided through various insurance
companies whose charges are based either on the benefits paid
during the year or annual premiums. Health benefits are provided
to retirees and their covered dependents.
Our net postretirement benefit cost for 2003,
2002 and 2001 included the following components:
Years Ended December 31,
2003
2002
2001
Service cost benefits earned during the period
$
63
$
45
$
34
Interest cost on projected benefit obligation
90
79
68
Net amortization and deferral
81
61
45
Net postretirement benefit cost
$
234
$
185
$
147
Assumptions used in determining the net
postretirement benefit cost were as follows:
2003
2002
2001
Discount rate
6.50%
7.25%
7.50%
Rate of increase in compensation levels
4.00%
4.00%
4.00%
F-29
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
The following provides a reconciliation of
benefit obligations, plan assets and the funded status of the
plan at December 31:
2003
2002
Change in benefit obligation:
Benefit obligation at beginning of year
$
1,223
$
930
Service cost
63
45
Interest cost
90
79
Plan participants' contributions
–
52
Actuarial (gain) loss
531
344
Benefits paid
(177
)
(227
)
Benefit obligation at end of year
$
1,730
$
1,223
Change in plan assets:
Fair value of plan assets at beginning of year
$
–
$
–
Employer contributions
177
175
Plan participants' contributions
–
52
Benefits paid
(177
)
(227
)
Fair value of plan assets at end of year
$
–
$
–
Funded status
(1,730
)
(1,223
)
Unrecognized transition obligation
408
453
Unrecognized net loss
947
451
Accrued benefit cost
$
(375
)
$
(319
)
Assumptions used to determine the benefit
obligation at end of year were as follows:
2003
2002
Discount rate
6.25%
6.50%
Rate of increase in salaried compensation levels
4.00%
4.00%
A 10% annual rate of increase in the per capita
cost of covered health care benefits was assumed for 2003. The
rate is assumed to decrease gradually to 5% for 2008 and remain
at that level thereafter.
A one percentage point increase in the assumed
health care cost trend rate would increase the accumulated
postretirement benefit obligation as of December 31, 2003
by approximately $186 and the interest cost by approximately
$13. A one percentage point decrease in the assumed health care
cost trend rate would decrease the accumulated postretirement
benefit obligation as of December 31, 2003 by approximately
$158 and the interest cost by approximately $11.
Our postretirement health care plan provides for
prescription drug benefits. On December 8, 2003, the
Medicare Prescription Drug, Improvement and Modernization
Act of 2003 (the "Act") was signed into law. The Act
introduces a prescription drug benefit under Medicare (Medicare
Part D) as well as a federal subsidy to sponsors of retiree
health care benefit plans that provide a benefit that is at
least actuarially equivalent to Medicare Part D. In
accordance with FASB Staff Position FAS 106-1,
"Accounting and Disclosure Requirements Related to the
Medicare Prescription Drug, Improvement and Modernization
Act of 2003" any measures of our accumulated postretirement
benefit obligation or net periodic postretirement benefit cost
in the financial statements and accompanying notes do not
reflect the effects of the Act on the plans. Specific
authoritative guidance on the accounting for the federal subsidy
is pending and that guidance, when issued, could require us to
change previously reported information.
F-30
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
Eligible employees are able to participate in the
Alliance Laundry Systems Capital Appreciation Plan
("ALCAP"), which is a qualified plan under
Sections 401(a) and 401(k) of the Internal Revenue Code. In
addition, we may make a discretionary annual contribution to
ALCAP equal to approximately one half of one percent of salaries
and wages, subject to statutory limits, of eligible employees.
Under the terms of ALCAP, covered employees are allowed to
contribute up to 50 percent of their pay on a pre-tax basis
up to the limit established by the Internal Revenue Service. We
contribute amounts equal to 50 percent of the employee's
contributions, up to a maximum of such Company contributions
equal to three percent of the employee's pay. Total expense
for ALCAP was $1.0 million, $0.9 million and
$0.9 million, for 2003, 2002 and 2001, respectively.
Deferred
Compensation Agreements
In connection with the Recapitalization and
related transactions, the Company and Raytheon entered into
deferred compensation agreements with certain executives,
whereby we assumed certain long-term compensation obligations
earned by management under programs established by Raytheon.
Such agreements provide for the deferral of compensation until
the earlier of (i) the payment of a lump sum (the
"Benefit Amount") to the executive ten years after the
date of such agreement, regardless of whether the executive is
employed by the Company as of such date or (ii) the payment
of the Benefit Amount upon the occurrence of certain events
described therein. The consolidated balance sheet at
December 31, 2003 and 2002 includes a long-term liability
of $1.9 million and $1.8 million, respectively,
related to such agreements.
In addition, we have established the Alliance
Laundry Holdings LLC Nonqualified Deferred Compensation Plan.
The Plan provides certain eligible employees and members with
the opportunity to defer portions of their base salary, bonus
payments and other payments in accordance with the provisions of
the Plan.
Note 14—Related Party
Transactions:
Securityholders
Agreement
Upon the consummation of the Recapitalization and
related transactions, the Company, Raytheon and certain
securityholders entered into a securityholders agreement (the
"Securityholders Agreement"). The Securityholders
Agreement (i) restricts the transfer of the equity
interests of the Company; (ii) grants tag-along rights on
certain transfers of equity interests of the Company;
(iii) requires the securityholders to consent to a sale of
the Company to an independent third party if such sale is
approved by certain holders of the then outstanding equity
interests of the Company; and (iv) grants preemptive rights
on certain issuances of equity interests of the Company. Certain
of the foregoing provisions of the Securityholders Agreement
will terminate upon the consummation of an initial public
offering or a liquidity event (each as defined in the
Securityholders Agreement).
Sale of Raytheon
Interests
On September 12, 2003, Raytheon Company
completed the sale of all of its debt and equity interests in
the Company to a group of investors consisting of TCW Shared
Opportunity Fund IV, L.P., TCW Shared Opportunity
Fund IVB, L.P., TCW Shared Opportunity Fund III, L.P.,
TCW SHOP III Subsidiary Investment, Inc. and TCW SHOP
IV Subsidiary Investment, Inc. (together, the "TCW
Funds") and Sankaty High Yield Partners II, L.P.,
Sankaty High Yield Partners III, L.P., Sankaty Credit
Opportunities, L.P. and Sankaty Alliance Corp (together, the
"Sankaty Funds"). The debt consists of the Junior
Subordinated Note and the equity interests consist of our
Preferred Units, and Raytheon's Class A and
Class L Common Units. As a result of this transaction, the
Raytheon Junior Subordinated Note was cancelled and new Junior
Subordinated Notes were issued under the same terms and
conditions as for
F-31
Table of Contents
Alliance Laundry Holdings LLC
Notes to Financial Statements—(Continued)
Raytheon. Raytheon had formerly been our parent
prior to a recapitalization and merger transaction on
May 5, 1998. The Sankaty Funds are an affiliate of Bain/
RCL, L.L.C. which, before the sale, owned 55.9% of our
outstanding common membership interests through its ownership of
Class A and Class L membership units in our Company.
Management
Investor Promissory Notes
We entered into promissory notes (the
"Promissory Notes") currently aggregating
approximately $1.8 million with certain members of
management to help finance the purchase of Common Units in the
Company as of May 5, 1998. The Promissory Notes bear
interest at a rate of 5.94% per annum and mature on
June 5, 2008. The Promissory Notes are classified as a
component of members' deficit at December 31, 2003 and
2002. Promissory Notes were repaid to us in the amount of
$0.1 million for the year ended December 31, 2001, no
repayment for the year ended December 31, 2002 and less
than $0.1 million for the year ended December 31, 2003.
Executive Unit
Purchase Agreements
Certain members of management of the Company have
entered into executive unit purchase agreements (the
"Purchase Agreements") which govern the
Executives' investment in the common membership interests
of the Company.
The Purchase Agreements provide us with a
repurchase option upon the termination of each Executive. If the
Executive's termination is the result of death, permanent
disability or without cause, as defined, Class A and
Class L Units, and vested Class M, Class B and
Class C Units may be repurchased by us at a price per unit
equal to fair market value, as defined, and unvested Class M,
Class B and Class C Units may be repurchased at a
price per unit equal to the lower of fair market value or
original value, as defined. If an Executive's termination
is voluntary or for cause, as defined, all units may be
repurchased at a price equal to the lower of fair market value
or original value, unless an Executive's voluntary
termination occurs seven and one-half years from May 5,
1998, in which case the repurchase price shall be fair market
value. The Class M, Class B and Class C Units
were purchased by the Executives at a nominal value based upon
the subordinated nature of such interests (see Note 10).
Management
Services Agreement
We have entered into a management services
agreement (the "Management Services Agreement") with
Bain LLC pursuant to which Bain LLC agreed to provide:
(i) general executive and management services;
(ii) identification, support, negotiation and analysis of
acquisitions and dispositions; (iii) support, negotiation
and analysis of financial alternatives; and (iv) other
services agreed upon by us and Bain LLC. In exchange for
services, Bain LLC will receive (i) an annual management
fee of $1.0 million, plus reasonable out-of-pocket expenses
(payable quarterly) and (ii) a transaction fee in an amount
in accordance with the general practices of Bain LLC at the time
of the consummation of any additional acquisition or divestiture
by us and of each financing or refinancing (currently
approximately 1.0% of total financings). Pursuant to the
Management Services Agreement transaction fees paid in 2002 with
respect to the new Senior Credit Facility and new Asset Backed
Facility totaled $3.5 million. The Management Services
Agreement has an initial term of ten years subject to automatic
one-year extensions unless the Company or Bain LLC provides
written notice of termination.
F-32
Table of Contents
Alliance Laundry Holdings LLC
Schedule II—Valuation and Qualifying Accounts
(Dollars in Thousands)
Accounts Receivable Allowance for Doubtful
Accounts:
Balance at
Charges to
Beginning
Expense/
Balance at
of Period
(Income)
Deductions
End of Period
Year ended:
December 31, 2001
$
719
25
82
$
662
December 31, 2002
$
662
(319
)
136
$
207
December 31, 2003
$
207
66
16
$
257
Inventory Valuation Reserves:
Balance at
Charges to
Beginning
Expense/
Balance at
of Period
(Income)
Deductions
End of Period
Year ended:
December 31, 2001
$
2,590
1,437
1,220
2,807
December 31, 2002
$
2,807
1,025
1,103
2,729
December 31, 2003
$
2,729
(2
)
1,307
1,420
F-33
Table of Contents
Alliance Laundry Holdings Inc.
Income
Deposit
Securities (IDSs)
and
$                     % Senior
Subordinated Notes due 2014
PROSPECTUS
,
2004
CIBC World Markets
Lehman Brothers
You should rely only on the information
contained in this prospectus. No dealer, salesperson or other
person is authorized to give information that is not contained
in this prospectus. This prospectus is not an offer to sell nor
is it seeking an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted. The
information contained in this prospectus is correct only as of
the date of this prospectus, regardless of the time of the
delivery of this prospectus or any sale of these
securities.
Until                     ,
2004, all dealers that buy, sell or trade our IDSs, whether or
not participating in this offering, may be required to deliver a
prospectus. This requirement is in addition to the dealers'
obligation to deliver a prospectus when acting as underwriters
and with respect to their unsold allotments or
subscriptions.
Table of Contents
Part II
Information Not Required in Prospectus
Item 13.
Other Expenses of Issuance and
    Distribution
The following table sets forth the costs and
expenses, other than underwriting discounts and commissions,
payable by Alliance Laundry Holdings Inc. in connection with the
offer and sale of the securities being registered. All amounts
are estimates except the SEC registration fee and the NASD
filing fee.
SEC registration fee
$
47,512.50
NASD filing fee
30,500.00
American Stock Exchange listing fee
*
Transfer agent's fee
*
Trustee's fee
*
Printing and engraving costs
*
Legal fees and expenses
*
Accounting fees and expenses
*
Miscellaneous
*
Total
*
*
To be filed by amendment.
Item 14.
Indemnification of Directors and
    Officers
Delaware.
The
General Corporation Law of the State of Delaware
("DGCL") authorizes corporations to limit or eliminate
the personal liability of directors to corporations and their
stockholders for monetary damages for breaches of
directors' fiduciary duties. The certificates of
incorporation of the Delaware registrants include a provision
that eliminates the personal liability of directors for monetary
damages for actions taken as a director, except for liability
for breach of duty of loyalty; for acts or omissions not in good
faith or involving intentional misconduct or knowing violation
of law; under Section 174 of the DGCL (unlawful dividends
and stock repurchases); or for transactions from which the
director derived improper personal benefit.
The certificates of incorporation of the Delaware
registrants provide that these registrants must indemnify their
directors and officers to the fullest extent authorized by the
DGCL and must also pay expenses incurred in defending any such
proceeding in advance of its final disposition upon delivery of
an undertaking, by or on behalf of an indemnified person, to
repay all amounts so advanced if it should be determined
ultimately that such person is not entitled to be indemnified
under this section or otherwise.
The indemnification rights set forth above shall
not be exclusive of any other right which an indemnified person
may have or hereafter acquire under any statute, provision of
our certificate of incorporation, our by laws, agreement, vote
of stockholders or disinterested directors or otherwise.
Alliance Laundry Holdings Inc. maintains
insurance to protect itself and its directors and, officers and
those of its subsidiaries against any such expense, liability or
loss, whether or not it would have the power to indemnify them
against such expense, liability or loss under applicable law.
II-1
Table of Contents
Item 15.
Recent Sales of Unregistered
    Securities
The registrant was formed in March 2004 and has
not issued any securities. Simultaneously with the consummation
of the offering of the securities being registered hereby, the
registrant will issue an aggregate
of            shares
of the registrant's Class B common stock
and             shares
of its preferred stock in connection with its reorganization.
This issuance will be made in reliance upon Section 4(2) of
the Securities Act of 1933, as amended and will not involve any
underwriters, underwriting discounts or commissions, or any
public offering. The persons and entities who will receive such
securities have represented that each of them is an
"accredited investor" (as such term is defined in
Rule 501 of Regulation D under the Securities Act of
1933, as amended) to acquire these securities for investment
only and not with a view for sale or in connection with any
distribution thereof, and appropriate legends will be affixed to
any share certificates issued. All recipients have adequate
access through their relationship with the registrant to
information about the registrant.
Item 16.
Exhibits and Financial Statement
    Schedules
(a)
Exhibits.
The following exhibits are filed as part of this Registration
Statement.
1
.1
Form of Underwriting Agreement.*
3
.1
Certificate of Incorporation of Alliance Laundry
    Holdings Inc.*
3
.2
Certificate of Formation of Alliance Laundry
    Systems LLC (Incorporated by reference to Exhibit 3.1 to
    Alliance Laundry Systems LLC's Form S-4,
    Amendment #1, dated July 2, 1998
    (file no. 333-56857)).
3
.3
Bylaws of Alliance Laundry Holdings Inc.*
3
.4
Amended and Restated Limited Liability Company
    Agreement of Alliance Laundry Systems LLC (Incorporated by
    reference to Exhibit 3.2 to Alliance Laundry Systems
    LLC's Form S-4, Amendment #1, dated July 2,
    1998 (file no. 333-56857)).
3
.5
Amendment No. 1 to Amended and Restated
    Limited Liability Company Agreement of Alliance Laundry Systems
    LLC (Incorporated by reference to Exhibit 10.4 to Alliance
    Laundry Systems LLC's Form 10-Q, dated
    November 12, 2003 (file no. 333-56857).
4
.1
Form of Indenture, among Alliance Laundry
    Holdings Inc., the guarantors thereto
    and      , as Trustee.*
4
.2
Form of Senior Subordinated Note (included in
    Exhibit 4.1).*
4
.3
Form of Registration Rights Agreement.*
4
.4
Form of stock certificate for common stock.*
4
.5
Form of global IDS.*
5
.1
Opinion of Kirkland & Ellis LLP.*
5
.2
Opinion of Skadden, Arps, Slate,
    Meagher & Flom LLP.*
8
.1
Opinion of Kirkland & Ellis LLP.*
10
.1
Purchase Agreement, dated as of April 29,
    1998, by and among Alliance Laundry Systems LLC, Alliance
    Laundry Corporation and the Initial Purchasers (Incorporated by
    reference to Exhibit 10.1 to Alliance Laundry Systems
    LLC's Form S-4, Amendment #1, dated July 2,
    1998 (file no. 333-56857)).
10
.2
Registration Rights Agreement, dated as of
    May 5, 1998, by and among Alliance Laundry Systems LLC,
    Alliance Laundry Corporation, Alliance Laundry Holdings LLC, and
    Lehman Brothers Inc. and Credit Suisse First Boston Corporation
    (Incorporated by reference to Exhibit 10.2 to Alliance
    Laundry Systems LLC's Form S-4, Amendment #1,
    dated July 2, 1998 (file no. 333-56857)).
10
.5
Amended and Restated Limited Liability Company
    Agreement of Alliance Laundry Holdings LLC, dated as of
    May 5, 1998 (Incorporated by reference to Exhibit 10.5
    to Alliance Laundry Systems LLC's Form S-4,
    Amendment #1, dated July 2, 1998
    (file no. 333-56857)).
II-2
Table of Contents
10
.6
Alliance Laundry Holdings LLC, Securityholders
    Agreement, dated as of May 5, 1998, between Alliance
    Laundry Holdings LLC and the Securityholders (Incorporated by
    reference to Exhibit 10.6 to Alliance Laundry Systems
    LLC's Form S-4, Amendment #1, dated July 2,
    1998 (file no. 333-56857)).
10
.7
Alliance Laundry Holdings LLC, Registration
    Rights Agreement, made as of May 5, 1998, by and among
    Alliance Laundry Holdings LLC, Raytheon Company, Bain/RCL and
    the Securityholders (Incorporated by reference to
    Exhibit 10.7 to Alliance Laundry Systems LLC's
    Form S-4, Amendment #1, dated July 2, 1998 (file
    no. 333-56857)).
10
.8
Employment Agreement, made as of May 5,
    1998, by and between Alliance Laundry Systems LLC and Thomas F.
    L'Esperance (Incorporated by reference to Exhibit 10.8
    to Alliance Laundry Systems LLC's Form S-4,
    Amendment #1, dated July 2, 1998
    (file no. 333-56857)).
10
.9
IRA and Executive Unit Purchase Agreement, made
    as of May 5, 1998, by and between RCL Acquisitions, LLC,
    Thomas F. L'Esperance and Stifel, Nicolaus Custodian for
    Thomas F. L'Esperance IRA and Stifel, Nicolaus Custodian
    for Paula K. L'Esperance IRA (Incorporated by reference to
    Exhibit 10.9 to Alliance Laundry Systems LLC's
    Form S-4, Amendment #1, dated July 2, 1998
    (file no. 333-56857)).
10
.10
IRA and Executive Unit Purchase Agreement, made
    as of May 5, 1998, by and between RCL Acquisitions, LLC, R.
    Scott Gaster and Robert W. Baird & Co. Inc. TTEE for R.
    Scott Gaster IRA (Incorporated by reference to
    Exhibit 10.10 to Alliance Laundry Systems LLC's
    Form S-4, Amendment #1, dated July 2, 1998
    (file no. 333-56857)).
10
.11
IRA and Executive Unit Purchase Agreement, made
    as of May 5, 1998, by and between RCL Acquisitions, L.L.C.,
    Jeffrey J. Brothers and Delaware Charter Guarantee and Trust
    Company, TTEE for Jeffrey J. Brothers, IRA (Incorporated by
    reference to Exhibit 10.11 to Alliance Laundry Systems
    LLC's Form S-4, Amendment #1, dated July 2,
    1998 (file no. 333-56857)).
10
.13
IRA and Executive Unit Purchase Agreement, made
    as of May 5, 1998, by and between RCL Acquisitions, L.L.C.,
    Bruce P. Rounds and Stifel, Nicolaus Custodian for Bruce P.
    Rounds IRA (Incorporated by reference to Exhibit 10.13 to
    Alliance Laundry Systems LLC's Form S-4,
    Amendment #1, dated July 2, 1998
    (file no. 333-56857)).
10
.14
IRA and Executive Unit Purchase Agreement, made
    as of May 5, 1998, by and between RCL Acquisitions, L.L.C.,
    Scott L. Spiller and Stifel, Nicolaus Custodian for Scott
    Spiller IRA (Incorporated by reference to Exhibit 10.14 to
    Alliance Laundry Systems LLC's Form S-4,
    Amendment #1, dated July 2, 1998 (file no. 333-56857)).
10
.16
Deferred Compensation Agreement, made and entered
    into as of May 5, 1998, by and among Thomas F.
    L'Esperance, Raytheon Company, Alliance Laundry Holdings
    LLC, and Alliance Laundry Systems LLC (Incorporated by reference
    to Exhibit 10.16 to Alliance Laundry Systems LLC's
    Form S-4, Amendment #1, dated July 2, 1998
    (file no. 333-56857)).
10
.17
Deferred Compensation Agreement, made and entered
    into as of May 5, 1998, by and among R. Scott Gaster,
    Alliance Laundry Holdings LLC, and Alliance Laundry Systems LLC
    (Incorporated by reference to Exhibit 10.17 to Alliance
    Laundry Systems LLC's Form S-4, Amendment #1,
    dated July 2, 1998 (file no. 333-56857)).
10
.18
Deferred Compensation Agreement, made and entered
    into as of May 5, 1998, by and among Jeffrey J. Brothers,
    Alliance Laundry Holdings LLC, and Alliance Laundry Systems LLC
    (Incorporated by reference to Exhibit 10.18 to Alliance
    Laundry Systems LLC's Form S-4, Amendment #1,
    dated July 2, 1998 (file no. 333-56857)).
10
.20
Deferred Compensation Agreement, made and entered
    into as of May 5, 1998, by and among Bruce P. Rounds,
    Alliance Laundry Holdings LLC, and Alliance Laundry Systems LLC
    (Incorporated by reference to Exhibit 10.20 to Alliance
    Laundry Systems LLC's Form S-4, Amendment #1,
    dated July 2, 1998 (file no. 333-56857)).
10
.34
Promissory Note, dated as of May 5, 1998,
    from Thomas F. L'Esperance to RCL Acquisitions, L.L.C.
    (Incorporated by reference to Exhibit 10.34 to Alliance
    Laundry Systems LLC's Form S-4, Amendment #1,
    dated July 2, 1998 (file no. 333-56857)).
II-3
Table of Contents
10
.35
Promissory Note, dated as of May 5, 1998,
    from R. Scott Gaster to RCL Acquisitions, L.L.C.
    (Incorporated by reference to Exhibit 10.35 to Alliance
    Laundry Systems LLC's Form S-4, Amendment #1,
    dated July 2, 1998 (file no. 333-56857)).
10
.36
Promissory Note, dated as of May 5, 1998,
    from Jeffrey J. Brothers to RCL Acquisitions, L.L.C.
    (Incorporated by reference to Exhibit 10.36 to Alliance
    Laundry Systems LLC's Form S-4, Amendment #1,
    dated July 2, 1998 (file no. 333-56857)).
10
.38
Promissory Note, dated as of May 5, 1998,
    from Bruce P. Rounds to RCL Acquisitions, L.L.C. (Incorporated
    by reference to Exhibit 10.38 to Alliance Laundry Systems
    LLC's Form S-4, Amendment #1, dated July 2,
    1998 (file no. 333-56857)).
10
.40
Advisory Agreement, dated as of May 5, 1998,
    by and between Alliance Laundry Systems LLC, and Bain
    Capital, Inc. (Incorporated by reference to
    Exhibit 10.40 to Alliance Laundry Systems LLC's
    Form S-4, Amendment #1, dated July 2, 1998
    (file no. 333-56857)).
10
.42
Junior Subordinated Promissory Note, dated as of
    May 5, 1998, from Alliance Laundry Holdings LLC to Raytheon
    Company (Incorporated by reference to Exhibit 10.42 to
    Alliance Laundry Systems LLC's Form S-4,
    Amendment #1, dated July 2, 1998 (file no. 333-56857)).
10
.47
Letter Agreement, dated as of April 29,
    1998, by and among Bain/RCL, L.L.C. and RCL Acquisitions,
    L.L.C., Raytheon Company and Raytheon Commercial Laundry L.L.C.
    (Incorporated by reference to Exhibit 10.47 to Alliance
    Laundry Systems LLC's Form S-4, Amendment #5,
    dated March 3, 1999 (file no. 333-56857)).
10
.49
Indenture Agreement, dated as of
    November 28, 2000, among Alliance Laundry Equipment
    Receivables Trust 2000-A and The Bank of New York as
    indenture trustee (Incorporated by reference to
    Exhibit 10.49 to Alliance Laundry Systems LLC's
    Form 10-K, dated March 28, 2001
    (file no. 333-56857)).
10
.50
Purchase Agreement, dated as of November 28,
    2000, between Alliance Laundry Equipment Receivables LLC and
    Alliance Laundry Systems LLC, in its own capacity and as
    servicer (Incorporated by reference to Exhibit 10.50 to
    Alliance Laundry Systems LLC's Form 10-K, dated
    March 28, 2001 (file no. 333-56857)).
10
.51
Pooling and Servicing Agreement, dated
    November 28, 2000, among Alliance Laundry Systems LLC as
    servicer and originator, Alliance Laundry Equipment Receivables
    LLC and Alliance Laundry Equipment Receivables Trust 2000-A
    (Incorporated by reference to Exhibit 10.51 to Alliance
    Laundry Systems LLC's Form 10-K, dated March 28,
    2001 (file no. 333-56857)).
10
.52
Trust Agreement, dated November 28, 2000,
    between Alliance Laundry Equipment Receivables LLC and
    Wilmington Trust Company as owner trustee (Incorporated by
    reference to Exhibit 10.52 to Alliance Laundry Systems
    LLC's Form 10-K, dated March 28, 2001
    (file no. 333-56857)).
10
.53
Administration Agreement, dated November 28,
    2000, among Alliance Laundry Equipment Receivables Trust 2000-A
    and Alliance Laundry Systems LLC as administrator, and The Bank
    of New York as indenture trustee (Incorporated by reference
    to Exhibit 10.53 to Alliance Laundry Systems LLC's
    Form 10-K, dated March 28, 2001
    (file no. 333-56857)).
10
.54
Limited Liability Company Agreement of Alliance
    Laundry Equipment Receivables LLC, dated as of November 28,
    2000 (Incorporated by reference to Exhibit 10.54 to
    Alliance Laundry Systems LLC's Form 10-K, dated
    March 28, 2001 (file no. 333-56857)).
10
.55
Insurance and Indemnity Agreement, dated as of
    November 28, 2000, between AMBAC Assurance Corporation as
    insurer, Alliance Laundry Equipment Receivables Trust 2000-A as
    Issuer, Alliance Laundry Equipment Receivables LLC as Seller,
    Alliance Laundry Systems LLC and The Bank of New York as
    indenture trustee (Incorporated by reference to
    Exhibit 10.55 to Alliance Laundry Systems LLC's
    Form 10-K, dated March 28, 2001
    (file no. 333-56857)).
10
.59
Alliance Laundry Holdings LLC nonqualified
    deferred compensation plan, dated as of February 27, 2002
    (Incorporated by reference to Exhibit 10.1 to Alliance
    Laundry Systems LLC's Form 10-Q, dated
    November 6, 2002 (file no. 333-56857)).
II-4
Table of Contents
10
.60
First amendment to the Alliance Laundry Holdings
    LLC nonqualified deferred compensation plan, dated as of
    June 21, 2002 (Incorporated by reference to
    Exhibit 10.2 to Alliance Laundry Systems LLC's
    Form 10-Q, dated November 6, 2002
    (file no. 333-56857)).
10
.61
Second amendment, Alliance Laundry Holdings LLC
    nonqualified deferred compensation plan, dated as of
    August 19, 2002 (Incorporated by reference to
    Exhibit 10.3 to Alliance Laundry Systems LLC's
    Form 10-Q, dated November 6, 2002
    (file no. 333-56857)).
10
.62
Amended and Restated Credit Agreement, dated as
    of August 2, 2002, among Alliance Laundry Holdings LLC,
    Alliance Laundry Systems LLC, the several banks or other
    financial institutions or entities from time to time parties to
    this Agreement, Lehman Commercial Paper Inc. as syndication
    agent, Fleet National Bank and LaSalle Bank National Association
    as documentation agents and General Electric Capital Corporation
    as administrative agent (Incorporated by reference to
    Exhibit 10.62 to Alliance Laundry Systems LLC's
    Form 10-K, dated March 12, 2003
    (file no. 333-56857)).
10
.63
Intercreditor Agreement, dated as of
    November 26, 2002, by and between General Electric Capital
    Corporation as administrative agent and The Bank of
    New York as indenture trustee (Incorporated by reference to
    Exhibit 10.63 to Alliance Laundry Systems LLC's
    Form 10-K, dated March 12, 2003
    (file no. 333-56857)).
10
.64
Supply Agreement, effective January 1, 2003,
    by and among Coinmach Corporation, Super Laundry Equipment
    Corporation and Alliance Laundry Systems LLC (certain portions
    of this exhibit were omitted subject to a pending request for
    confidential treatment) (Incorporated by reference to
    Exhibit 10.64 to Alliance Laundry Systems LLC's
    Form 10-K, dated March 12, 2003
    (file no. 333-56857)).
10
.65
Indenture, dated as of November 26, 2002,
    among Alliance Laundry Equipment Receivables Trust 2002-A and
    The Bank of New York as indenture trustee (incorporated by
    reference to Exhibit 4.1 to Alliance Laundry Systems
    LLC's Form S-4, Amendment #1, dated July 2,
    1998 (file no. 333-56857)).
10
.66
Purchase Agreement, dated as of November 26,
    2002, between Alliance Laundry Equipment Receivables 2002 LLC as
    buyer and Alliance Laundry Systems LLC as seller (Incorporated
    by reference to Exhibit 10.66 to Alliance Laundry Systems
    LLC's Form 10-K, dated March 12, 2003
    (file no. 333-56857)).
10
.67
Pooling and Servicing Agreement, dated
    November 26, 2002, among Alliance Laundry Systems LLC as
    servicer and originator, Alliance Laundry Equipment Receivables
    2002 LLC as transferor and Alliance Laundry Equipment
    Receivables Trust 2002-A as issuer (Incorporated by reference to
    Exhibit 10.67 to Alliance Laundry Systems LLC's
    Form 10-K, dated March 12, 2003
    (file no. 333-56857)).
10
.68
Trust Agreement, dated November 26, 2002,
    between Alliance Laundry Equipment Receivables 2002 LLC as
    transferor and Wilmington Trust Company as owner trustee
    (Incorporated by reference to Exhibit 10.68 to Alliance
    Laundry Systems LLC's Form 10-K, dated March 12,
    2003 (file no. 333-56857)).
10
.69
Administration Agreement, dated November 26,
    2002, among Alliance Laundry Equipment Receivables Trust 2002-A,
    as insurer, and Alliance Laundry Systems LLC, as administrator,
    and The Bank of New York, as indenture trustee
    (Incorporated by reference to Exhibit 10.69 to Alliance
    Laundry Systems LLC's Form 10-K, dated March 12,
    2003 (file no. 333-56857)).
10
.70
Limited Liability Company Agreement of Alliance
    Laundry Equipment Receivables 2002 LLC, dated as of
    November 26, 2002 (Incorporated by reference to
    Exhibit 10.70 to Alliance Laundry Systems LLC's
    Form 10-K, dated March 12, 2003
    (file no. 333-56857)).
10
.71
Insurance and Indemnity Agreement, dated as of
    November 26, 2002, between AMBAC Assurance Corporation as
    insurer, Alliance Laundry Equipment Receivables Trust 2002-A as
    issuer, Alliance Laundry Equipment Receivables 2002 LLC as
    seller, Alliance Laundry Systems LLC and The Bank of
    New York as indenture trustee (Incorporated by reference to
    Exhibit 10.71 to Alliance Laundry Systems LLC's
    Form 10-K, dated March 12, 2003
    (file no. 333-56857)).
II-5
Table of Contents
10
.72
Note Purchase Agreement, dated as of
    November 26, 2002, among Alliance Laundry Equipment
    Receivables Trust 2002-A as issuer, The Bank of New York as
    indenture trustee, Alliance Laundry Systems LLC as the servicer,
    Alliance Laundry Equipment Receivables 2002 LLC as the
    transferor, the Note Purchasers party hereto, Bear
    Stearns & Co. Inc. as co-administrative agent, and
    Canadian Imperial Bank of Commerce as co-administrative agent
    and agent (Incorporated by reference to Exhibit 10.72 to
    Alliance Laundry Systems LLC's Form 10-K, dated
    March 12, 2003 (file no. 333-56857)).
10
.73
Amendment No. 1 to Alliance Laundry Systems
    LLC Employment Agreement, dated as of July 23, 2003 by and
    between Alliance Laundry Systems LLC and Thomas F.
    L'Esperance (Incorporated by reference to Exhibit 10.1
    to Alliance Laundry Systems LLC's Form 10-Q, dated
    November 12, 2003 (file no. 333-56857)).
10
.74
Amendment No. 1 to Alliance Laundry Holdings
    LLC Securityholders Agreement and Registration Rights Agreement,
    dated as of July 23, 2003 (Incorporated by reference to
    Exhibit 10.2 of Alliance Laundry Systems LLC's
    Form 10-Q, dated November 12, 2003 (file
    no. 333-56857)).
10
.75
Amendment No. 1 to Amended and Restated
    Limited Liability Company Agreement by Alliance Laundry Holdings
    LLC, dated as of July 23, 2003 (Incorporated by reference
    to Exhibit 10.3 to Alliance Laundry Systems LLC's
    Form 10-Q, dated November 12, 2003 (file
    no. 333-56857)).
10
.76
Amendment No. 2 to Securityholders Agreement
    and Registration Rights Agreement by and among Alliance Laundry
    Holdings LLC and Bain/RCL, L.L.C., dated as of
    September 12, 2003 (Incorporated by reference to
    Exhibit 10.11 to Alliance Laundry Systems LLC's
    Form 10-Q, dated November 12, 2003 (file
    no. 333-56857)).
10
.77
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Thomas F. L'Esperance
    (Incorporated by reference to Exhibit 10.5 to Alliance
    Laundry Systems LLC's Form 10-Q, dated
    November 12, 2003 (file no. 333-56857)).
10
.78
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and William J. Przybysz
    (Incorporated by reference to Alliance Laundry Systems
    LLC's Form 10-Q, dated November 12, 2003 (file
    no. 333-56857)).
10
.79
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and R. Scott Gaster
    (Incorporated by reference to Exhibit 10.7 to Alliance
    Laundry Systems LLC's Form 10-Q, dated
    November 12, 2003 (file no. 333-56857)).
10
.80
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Jeffrey J. Brothers
    (Incorporated by reference to Exhibit 10.8 to Alliance
    Laundry Systems LLC's Form 10-Q, dated
    November 12, 2003 (file no. 333-56857)).
10
.81
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Bruce P. Rounds (Incorporated
    by reference to Exhibit 10.9 to Alliance Laundry Systems
    LLC's Form 10-Q, dated November 12, 2003 (file
    no. 333-56857)).
10
.82
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Robert Wallace.
10
.83
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Robert Baudhuin.
10
.84
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and William Bittner.
10
.85
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Charles Eaves.
10
.86
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Todd Kaull.
II-6
Table of Contents
10
.87
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Paul Larkin.
10
.88
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Gary Luckow.
10
.89
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Richard Pyle.
10
.90
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Todd Rice.
10
.91
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and William Quandt.
10
.92
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Scott Spiller.
10
.93
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Timothy Studt.
10
.94
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Jeffrey Thoms.
10
.95
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Peter Toonen.
10
.96
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Daniel Agnello.
10
.97
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Richard Casey.
10
.98
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Lee Wilson.
10
.99
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Patti Andresen-Shew.
10
.100
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Scott Gaster.
10
.101
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Thomas F.
    L'Esperance.
10
.102
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Jay McDonald.
10
.103
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Albert Rios.
10
.104
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Bruce Rounds.
10
.105
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Kim Shady.
10
.106
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Scott Spiller.
10
.107
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Robert Wallace.
10
.108
Amendment No. 2 to Amended and Restated
    Limited Liability Company Agreement by Alliance Laundry Holdings
    LLC, dated as of September 12, 2003 (Incorporated by
    reference to Exhibit 10.10 to Alliance Laundry Systems
    LLC's Form 10-Q, dated November 12, 2003
    (file no. 333-56857)).
10
.109
Indenture, dated as of May 5, 1998, among
    Alliance Laundry Corporation, the Guarantors and United States
    Trust Company of New York (Incorporated by reference to
    Exhibit 4.1 to Alliance Laundry Systems LLC's
    Form S-4, Amendment #1, dated July 2, 1998 (file
    no. 333-56857)).
II-7
Table of Contents
10
.110
Agreement, dated as of February 23, 2004
    among Alliance Laundry Holdings LLC, TCW Shared Opportunity
    Fund IV, L.P., TCW Shared Opportunity Fund IVB, L.P.,
    TCW Shared Opportunity Fund III, L.P., TCW SHOP III
    Subsidiary Investment, Inc. and TCW SHOP IV Subsidiary
    Investment, Inc. and Sankaty Alliance Corp., Sankaty High
    Yield Partners II, L.P., Sankaty High Yield
    Partners III, L.P. and Sankaty Credit
    Opportunities, L.P.
21
.2
Subsidiaries of the Registrant.
23
.1
Consent of PricewaterhouseCoopers LLP.
23
.2
Consent of Kirkland & Ellis LLP
    (included in Exhibit 5.1).*
23
.3
Consent of Kirkland & Ellis LLP
    (included in Exhibit 8.1).*
24
.1
Powers of Attorney (included on signature page).
25
.1
Form T-1 Statement of Eligibility under
    Trust Indenture Act of 1939, as amended,
    of           as
    Trustee.*
*
To be filed by amendment.
(b)
Financial
Statement Schedules
Item 17.
Undertakings
1.     The undersigned
registrant hereby undertakes to provide to the underwriters at
the closing specified in the underwriting agreements,
certificates in such denominations and registered in such names
as required by the underwriters to permit prompt delivery to
each purchaser.
2.     Insofar as
indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons
of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion
of the SEC such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
In the event that a claim for indemnification by the registrant
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.
3.     The undersigned
registrant hereby undertakes that
(1)     For purposes of
    determining any liability under the Securities Act, 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, 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, as amended, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Ripon, Wisconsin on
April 13, 2004.
ALLIANCE LAUNDRY HOLDINGS INC.
By:
/s/ THOMAS F. L'ESPERANCE
Thomas F. L'Esperance
Chief Executive Officer
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that each person
whose signature appears below constitutes and appoints
Bruce P. Rounds his or her true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any
and all capacities (including his or her capacity as a director
and/or officer of Alliance Laundry Holdings Inc.) to sign any or
all amendments (including post-effective amendments) to this
registration statement and any subsequent registration statement
filed pursuant to Rule 462(b) under the Securities Act, and
to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities
Act, this Registration Statement on Form S-1 has been
signed by the following persons in the capacities indicated on
April 13, 2004.
Signature
Title
/s/ THOMAS F. L'ESPERANCE
Thomas F. L'Esperance
Chief Executive Officer
(Principal Executive Officer)
/s/ BRUCE P. ROUNDS
Bruce P. Rounds
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
/s/ EDWARD W. CONARD
Edward W. Conard
Director
Stephen C. Sherrill
Director
/s/ STEPHEN M. ZIDE
Stephen M. Zide
Director
/s/ ROBERT C. GAY
Robert C. Gay
Director
II-9
Table of Contents
Signatures
Pursuant to the requirements of the Securities
Act, as amended, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Ripon, Wisconsin on
April 13, 2004.
ALLIANCE LAUNDRY SYSTEMS LLC
By:
/s/ THOMAS F. L'ESPERANCE
Thomas F. L'Esperance
Chief Executive Officer
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that each person
whose signature appears below constitutes and appoints Bruce P.
Rounds his or her true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him or
her and in his or her name, place and stead, in any and all
capacities (including his or her capacity as a director and/or
officer of Alliance Laundry Systems LLC) to sign any or all
amendments (including post-effective amendments) to this
registration statement and any subsequent registration statement
filed pursuant to Rule 462(b) under the Securities Act, and
to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent or his substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities
Act, this Registration Statement on Form S-1 has been
signed by the following persons in the capacities indicated on
April 13, 2004.
Signature
Title
/s/ THOMAS F. L'ESPERANCE
Thomas F. L'Esperance
Chief Executive Officer
(Principal Executive Officer)
/s/ BRUCE P. ROUNDS
Bruce P. Rounds
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
/s/ EDWARD W. CONARD
Edward W. Conard
Director
Stephen C. Sherrill
Director
/s/ STEPHEN M. ZIDE
Stephen M. Zide
Director
/s/ ROBERT C. GAY
Robert C. Gay
Director
II-10
Table of Contents
Exhibit Index
1
.1
Form of Underwriting Agreement.*
3
.1
Certificate of Incorporation of Alliance Laundry
    Holdings Inc.*
3
.2
Certificate of Formation of Alliance Laundry
    Systems LLC (Incorporated by reference to Exhibit 3.1 to
    Alliance Laundry Systems LLC's Form S-4,
    Amendment #1, dated July 2, 1998
    (file no. 333-56857)).
3
.3
Bylaws of Alliance Laundry Holdings Inc.*
3
.4
Amended and Restated Limited Liability Company
    Agreement of Alliance Laundry Systems LLC (Incorporated by
    reference to Exhibit 3.2 to Alliance Laundry Systems
    LLC's Form S-4, Amendment #1, dated July 2,
    1998 (file no. 333-56857)).
3
.5
Amendment No. 1 to Amended and Restated
    Limited Liability Company Agreement of Alliance Laundry Systems
    LLC (Incorporated by reference to Exhibit 10.4 to Alliance
    Laundry Systems LLC's Form 10-Q, dated
    November 12, 2003 (file no. 333-56857).
4
.1
Form of Indenture, among Alliance Laundry
    Holdings Inc., the guarantors thereto
    and      , as Trustee.*
4
.2
Form of Senior Subordinated Note (included in
    Exhibit 4.1).*
4
.3
Form of Registration Rights Agreement.*
4
.4
Form of stock certificate for common stock.*
4
.5
Form of global IDS.*
5
.1
Opinion of Kirkland & Ellis LLP.*
5
.2
Opinion of Skadden, Arps, Slate,
    Meagher & Flom LLP.*
8
.1
Opinion of Kirkland & Ellis LLP.*
10
.1
Purchase Agreement, dated as of April 29,
    1998, by and among Alliance Laundry Systems LLC, Alliance
    Laundry Corporation and the Initial Purchasers (Incorporated by
    reference to Exhibit 10.1 to Alliance Laundry Systems
    LLC's Form S-4, Amendment #1, dated July 2,
    1998 (file no. 333-56857)).
10
.2
Registration Rights Agreement, dated as of
    May 5, 1998, by and among Alliance Laundry Systems LLC,
    Alliance Laundry Corporation, Alliance Laundry Holdings LLC, and
    Lehman Brothers Inc. and Credit Suisse First Boston Corporation
    (Incorporated by reference to Exhibit 10.2 to Alliance
    Laundry Systems LLC's Form S-4, Amendment #1,
    dated July 2, 1998 (file no. 333-56857)).
10
.5
Amended and Restated Limited Liability Company
    Agreement of Alliance Laundry Holdings LLC, dated as of
    May 5, 1998 (Incorporated by reference to Exhibit 10.5
    to Alliance Laundry Systems LLC's Form S-4,
    Amendment #1, dated July 2, 1998
    (file no. 333-56857)).
10
.6
Alliance Laundry Holdings LLC, Securityholders
    Agreement, dated as of May 5, 1998, between Alliance
    Laundry Holdings LLC and the Securityholders (Incorporated by
    reference to Exhibit 10.6 to Alliance Laundry Systems
    LLC's Form S-4, Amendment #1, dated July 2,
    1998 (file no. 333-56857)).
10
.7
Alliance Laundry Holdings LLC, Registration
    Rights Agreement, made as of May 5, 1998, by and among
    Alliance Laundry Holdings LLC, Raytheon Company, Bain/RCL and
    the Securityholders (Incorporated by reference to
    Exhibit 10.7 to Alliance Laundry Systems LLC's
    Form S-4, Amendment #1, dated July 2, 1998 (file
    no. 333-56857)).
10
.8
Employment Agreement, made as of May 5,
    1998, by and between Alliance Laundry Systems LLC and Thomas F.
    L'Esperance (Incorporated by reference to Exhibit 10.8
    to Alliance Laundry Systems LLC's Form S-4,
    Amendment #1, dated July 2, 1998
    (file no. 333-56857)).
Table of Contents
10
.9
IRA and Executive Unit Purchase Agreement, made
    as of May 5, 1998, by and between RCL Acquisitions, LLC,
    Thomas F. L'Esperance and Stifel, Nicolaus Custodian for
    Thomas F. L'Esperance IRA and Stifel, Nicolaus Custodian
    for Paula K. L'Esperance IRA (Incorporated by reference to
    Exhibit 10.9 to Alliance Laundry Systems LLC's
    Form S-4, Amendment #1, dated July 2, 1998
    (file no. 333-56857)).
10
.10
IRA and Executive Unit Purchase Agreement, made
    as of May 5, 1998, by and between RCL Acquisitions, LLC, R.
    Scott Gaster and Robert W. Baird & Co. Inc. TTEE for R.
    Scott Gaster IRA (Incorporated by reference to
    Exhibit 10.10 to Alliance Laundry Systems LLC's
    Form S-4, Amendment #1, dated July 2, 1998
    (file no. 333-56857)).
10
.11
IRA and Executive Unit Purchase Agreement, made
    as of May 5, 1998, by and between RCL Acquisitions, L.L.C.,
    Jeffrey J. Brothers and Delaware Charter Guarantee and Trust
    Company, TTEE for Jeffrey J. Brothers, IRA (Incorporated by
    reference to Exhibit 10.11 to Alliance Laundry Systems
    LLC's Form S-4, Amendment #1, dated July 2,
    1998 (file no. 333-56857)).
10
.13
IRA and Executive Unit Purchase Agreement, made
    as of May 5, 1998, by and between RCL Acquisitions, L.L.C.,
    Bruce P. Rounds and Stifel, Nicolaus Custodian for Bruce P.
    Rounds IRA (Incorporated by reference to Exhibit 10.13 to
    Alliance Laundry Systems LLC's Form S-4,
    Amendment #1, dated July 2, 1998
    (file no. 333-56857)).
10
.14
IRA and Executive Unit Purchase Agreement, made
    as of May 5, 1998, by and between RCL Acquisitions, L.L.C.,
    Scott L. Spiller and Stifel, Nicolaus Custodian for Scott
    Spiller IRA (Incorporated by reference to Exhibit 10.14 to
    Alliance Laundry Systems LLC's Form S-4,
    Amendment #1, dated July 2, 1998 (file no. 333-56857)).
10
.16
Deferred Compensation Agreement, made and entered
    into as of May 5, 1998, by and among Thomas F.
    L'Esperance, Raytheon Company, Alliance Laundry Holdings
    LLC, and Alliance Laundry Systems LLC (Incorporated by reference
    to Exhibit 10.16 to Alliance Laundry Systems LLC's
    Form S-4, Amendment #1, dated July 2, 1998
    (file no. 333-56857)).
10
.17
Deferred Compensation Agreement, made and entered
    into as of May 5, 1998, by and among R. Scott Gaster,
    Alliance Laundry Holdings LLC, and Alliance Laundry Systems LLC
    (Incorporated by reference to Exhibit 10.17 to Alliance
    Laundry Systems LLC's Form S-4, Amendment #1,
    dated July 2, 1998 (file no. 333-56857)).
10
.18
Deferred Compensation Agreement, made and entered
    into as of May 5, 1998, by and among Jeffrey J. Brothers,
    Alliance Laundry Holdings LLC, and Alliance Laundry Systems LLC
    (Incorporated by reference to Exhibit 10.18 to Alliance
    Laundry Systems LLC's Form S-4, Amendment #1,
    dated July 2, 1998 (file no. 333-56857)).
10
.20
Deferred Compensation Agreement, made and entered
    into as of May 5, 1998, by and among Bruce P. Rounds,
    Alliance Laundry Holdings LLC, and Alliance Laundry Systems LLC
    (Incorporated by reference to Exhibit 10.20 to Alliance
    Laundry Systems LLC's Form S-4, Amendment #1,
    dated July 2, 1998 (file no. 333-56857)).
10
.34
Promissory Note, dated as of May 5, 1998,
    from Thomas F. L'Esperance to RCL Acquisitions, L.L.C.
    (Incorporated by reference to Exhibit 10.34 to Alliance
    Laundry Systems LLC's Form S-4, Amendment #1,
    dated July 2, 1998 (file no. 333-56857)).
10
.35
Promissory Note, dated as of May 5, 1998,
    from R. Scott Gaster to RCL Acquisitions, L.L.C.
    (Incorporated by reference to Exhibit 10.35 to Alliance
    Laundry Systems LLC's Form S-4, Amendment #1,
    dated July 2, 1998 (file no. 333-56857)).
10
.36
Promissory Note, dated as of May 5, 1998,
    from Jeffrey J. Brothers to RCL Acquisitions, L.L.C.
    (Incorporated by reference to Exhibit 10.36 to Alliance
    Laundry Systems LLC's Form S-4, Amendment #1,
    dated July 2, 1998 (file no. 333-56857)).
10
.38
Promissory Note, dated as of May 5, 1998,
    from Bruce P. Rounds to RCL Acquisitions, L.L.C. (Incorporated
    by reference to Exhibit 10.38 to Alliance Laundry Systems
    LLC's Form S-4, Amendment #1, dated July 2,
    1998 (file no. 333-56857)).
10
.40
Advisory Agreement, dated as of May 5, 1998,
    by and between Alliance Laundry Systems LLC, and Bain
    Capital, Inc. (Incorporated by reference to
    Exhibit 10.40 to Alliance Laundry Systems LLC's
    Form S-4, Amendment #1, dated July 2, 1998
    (file no. 333-56857)).
Table of Contents
10
.42
Junior Subordinated Promissory Note, dated as of
    May 5, 1998, from Alliance Laundry Holdings LLC to Raytheon
    Company (Incorporated by reference to Exhibit 10.42 to
    Alliance Laundry Systems LLC's Form S-4,
    Amendment #1, dated July 2, 1998 (file no. 333-56857)).
10
.47
Letter Agreement, dated as of April 29,
    1998, by and among Bain/RCL, L.L.C. and RCL Acquisitions,
    L.L.C., Raytheon Company and Raytheon Commercial Laundry L.L.C.
    (Incorporated by reference to Exhibit 10.47 to Alliance
    Laundry Systems LLC's Form S-4, Amendment #5,
    dated March 3, 1999 (file no. 333-56857)).
10
.49
Indenture Agreement, dated as of
    November 28, 2000, among Alliance Laundry Equipment
    Receivables Trust 2000-A and The Bank of New York as
    indenture trustee (Incorporated by reference to
    Exhibit 10.49 to Alliance Laundry Systems LLC's
    Form 10-K, dated March 28, 2001
    (file no. 333-56857)).
10
.50
Purchase Agreement, dated as of November 28,
    2000, between Alliance Laundry Equipment Receivables LLC and
    Alliance Laundry Systems LLC, in its own capacity and as
    servicer (Incorporated by reference to Exhibit 10.50 to
    Alliance Laundry Systems LLC's Form 10-K, dated
    March 28, 2001 (file no. 333-56857)).
10
.51
Pooling and Servicing Agreement, dated
    November 28, 2000, among Alliance Laundry Systems LLC as
    servicer and originator, Alliance Laundry Equipment Receivables
    LLC and Alliance Laundry Equipment Receivables Trust 2000-A
    (Incorporated by reference to Exhibit 10.51 to Alliance
    Laundry Systems LLC's Form 10-K, dated March 28,
    2001 (file no. 333-56857)).
10
.52
Trust Agreement, dated November 28, 2000,
    between Alliance Laundry Equipment Receivables LLC and
    Wilmington Trust Company as owner trustee (Incorporated by
    reference to Exhibit 10.52 to Alliance Laundry Systems
    LLC's Form 10-K, dated March 28, 2001
    (file no. 333-56857)).
10
.53
Administration Agreement, dated November 28,
    2000, among Alliance Laundry Equipment Receivables Trust 2000-A
    and Alliance Laundry Systems LLC as administrator, and The Bank
    of New York as indenture trustee (Incorporated by reference
    to Exhibit 10.53 to Alliance Laundry Systems LLC's
    Form 10-K, dated March 28, 2001
    (file no. 333-56857)).
10
.54
Limited Liability Company Agreement of Alliance
    Laundry Equipment Receivables LLC, dated as of November 28,
    2000 (Incorporated by reference to Exhibit 10.54 to
    Alliance Laundry Systems LLC's Form 10-K, dated
    March 28, 2001 (file no. 333-56857)).
10
.55
Insurance and Indemnity Agreement, dated as of
    November 28, 2000, between AMBAC Assurance Corporation as
    insurer, Alliance Laundry Equipment Receivables Trust 2000-A as
    Issuer, Alliance Laundry Equipment Receivables LLC as Seller,
    Alliance Laundry Systems LLC and The Bank of New York as
    indenture trustee (Incorporated by reference to
    Exhibit 10.55 to Alliance Laundry Systems LLC's
    Form 10-K, dated March 28, 2001
    (file no. 333-56857)).
10
.59
Alliance Laundry Holdings LLC nonqualified
    deferred compensation plan, dated as of February 27, 2002
    (Incorporated by reference to Exhibit 10.1 to Alliance
    Laundry Systems LLC's Form 10-Q, dated
    November 6, 2002 (file no. 333-56857)).
10
.60
First amendment to the Alliance Laundry Holdings
    LLC nonqualified deferred compensation plan, dated as of
    June 21, 2002 (Incorporated by reference to
    Exhibit 10.2 to Alliance Laundry Systems LLC's
    Form 10-Q, dated November 6, 2002
    (file no. 333-56857)).
10
.61
Second amendment, Alliance Laundry Holdings LLC
    nonqualified deferred compensation plan, dated as of
    August 19, 2002 (Incorporated by reference to
    Exhibit 10.3 to Alliance Laundry Systems LLC's
    Form 10-Q, dated November 6, 2002
    (file no. 333-56857)).
10
.62
Amended and Restated Credit Agreement, dated as
    of August 2, 2002, among Alliance Laundry Holdings LLC,
    Alliance Laundry Systems LLC, the several banks or other
    financial institutions or entities from time to time parties to
    this Agreement, Lehman Commercial Paper Inc. as syndication
    agent, Fleet National Bank and LaSalle Bank National Association
    as documentation agents and General Electric Capital Corporation
    as administrative agent (Incorporated by reference to
    Exhibit 10.62 to Alliance Laundry Systems LLC's
    Form 10-K, dated March 12, 2003
    (file no. 333-56857)).
Table of Contents
10
.63
Intercreditor Agreement, dated as of
    November 26, 2002, by and between General Electric Capital
    Corporation as administrative agent and The Bank of
    New York as indenture trustee (Incorporated by reference to
    Exhibit 10.63 to Alliance Laundry Systems LLC's
    Form 10-K, dated March 12, 2003
    (file no. 333-56857)).
10
.64
Supply Agreement, effective January 1, 2003,
    by and among Coinmach Corporation, Super Laundry Equipment
    Corporation and Alliance Laundry Systems LLC (certain portions
    of this exhibit were omitted subject to a pending request for
    confidential treatment) (Incorporated by reference to
    Exhibit 10.64 to Alliance Laundry Systems LLC's
    Form 10-K, dated March 12, 2003
    (file no. 333-56857)).
10
.65
Indenture, dated as of November 26, 2002,
    among Alliance Laundry Equipment Receivables Trust 2002-A and
    The Bank of New York as indenture trustee (incorporated by
    reference to Exhibit 4.1 to Alliance Laundry Systems
    LLC's Form S-4, Amendment #1, dated July 2,
    1998 (file no. 333-56857)).
10
.66
Purchase Agreement, dated as of November 26,
    2002, between Alliance Laundry Equipment Receivables 2002 LLC as
    buyer and Alliance Laundry Systems LLC as seller (Incorporated
    by reference to Exhibit 10.66 to Alliance Laundry Systems
    LLC's Form 10-K, dated March 12, 2003
    (file no. 333-56857)).
10
.67
Pooling and Servicing Agreement, dated
    November 26, 2002, among Alliance Laundry Systems LLC as
    servicer and originator, Alliance Laundry Equipment Receivables
    2002 LLC as transferor and Alliance Laundry Equipment
    Receivables Trust 2002-A as issuer (Incorporated by reference to
    Exhibit 10.67 to Alliance Laundry Systems LLC's
    Form 10-K, dated March 12, 2003
    (file no. 333-56857)).
10
.68
Trust Agreement, dated November 26, 2002,
    between Alliance Laundry Equipment Receivables 2002 LLC as
    transferor and Wilmington Trust Company as owner trustee
    (Incorporated by reference to Exhibit 10.68 to Alliance
    Laundry Systems LLC's Form 10-K, dated March 12,
    2003 (file no. 333-56857)).
10
.69
Administration Agreement, dated November 26,
    2002, among Alliance Laundry Equipment Receivables Trust 2002-A,
    as insurer, and Alliance Laundry Systems LLC, as administrator,
    and The Bank of New York, as indenture trustee
    (Incorporated by reference to Exhibit 10.69 to Alliance
    Laundry Systems LLC's Form 10-K, dated March 12,
    2003 (file no. 333-56857)).
10
.70
Limited Liability Company Agreement of Alliance
    Laundry Equipment Receivables 2002 LLC, dated as of
    November 26, 2002 (Incorporated by reference to
    Exhibit 10.70 to Alliance Laundry Systems LLC's
    Form 10-K, dated March 12, 2003
    (file no. 333-56857)).
10
.71
Insurance and Indemnity Agreement, dated as of
    November 26, 2002, between AMBAC Assurance Corporation as
    insurer, Alliance Laundry Equipment Receivables Trust 2002-A as
    issuer, Alliance Laundry Equipment Receivables 2002 LLC as
    seller, Alliance Laundry Systems LLC and The Bank of
    New York as indenture trustee (Incorporated by reference to
    Exhibit 10.71 to Alliance Laundry Systems LLC's
    Form 10-K, dated March 12, 2003
    (file no. 333-56857)).
10
.72
Note Purchase Agreement, dated as of
    November 26, 2002, among Alliance Laundry Equipment
    Receivables Trust 2002-A as issuer, The Bank of New York as
    indenture trustee, Alliance Laundry Systems LLC as the servicer,
    Alliance Laundry Equipment Receivables 2002 LLC as the
    transferor, the Note Purchasers party hereto, Bear
    Stearns & Co. Inc. as co-administrative agent, and
    Canadian Imperial Bank of Commerce as co-administrative agent
    and agent (Incorporated by reference to Exhibit 10.72 to
    Alliance Laundry Systems LLC's Form 10-K, dated
    March 12, 2003 (file no. 333-56857)).
10
.73
Amendment No. 1 to Alliance Laundry Systems
    LLC Employment Agreement, dated as of July 23, 2003 by and
    between Alliance Laundry Systems LLC and Thomas F.
    L'Esperance (Incorporated by reference to Exhibit 10.1
    to Alliance Laundry Systems LLC's Form 10-Q, dated
    November 12, 2003 (file no. 333-56857)).
Table of Contents
10
.74
Amendment No. 1 to Alliance Laundry Holdings
    LLC Securityholders Agreement and Registration Rights Agreement,
    dated as of July 23, 2003 (Incorporated by reference to
    Exhibit 10.2 of Alliance Laundry Systems LLC's
    Form 10-Q, dated November 12, 2003 (file
    no. 333-56857)).
10
.75
Amendment No. 1 to Amended and Restated
    Limited Liability Company Agreement by Alliance Laundry Holdings
    LLC, dated as of July 23, 2003 (Incorporated by reference
    to Exhibit 10.3 to Alliance Laundry Systems LLC's
    Form 10-Q, dated November 12, 2003 (file
    no. 333-56857)).
10
.76
Amendment No. 2 to Securityholders Agreement
    and Registration Rights Agreement by and among Alliance Laundry
    Holdings LLC and Bain/RCL, L.L.C., dated as of
    September 12, 2003 (Incorporated by reference to
    Exhibit 10.11 to Alliance Laundry Systems LLC's
    Form 10-Q, dated November 12, 2003 (file
    no. 333-56857)).
10
.77
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Thomas F. L'Esperance
    (Incorporated by reference to Exhibit 10.5 to Alliance
    Laundry Systems LLC's Form 10-Q, dated
    November 12, 2003 (file no. 333-56857)).
10
.78
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and William J. Przybysz
    (Incorporated by reference to Alliance Laundry Systems
    LLC's Form 10-Q, dated November 12, 2003 (file
    no. 333-56857)).
10
.79
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and R. Scott Gaster
    (Incorporated by reference to Exhibit 10.7 to Alliance
    Laundry Systems LLC's Form 10-Q, dated
    November 12, 2003 (file no. 333-56857)).
10
.80
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Jeffrey J. Brothers
    (Incorporated by reference to Exhibit 10.8 to Alliance
    Laundry Systems LLC's Form 10-Q, dated
    November 12, 2003 (file no. 333-56857)).
10
.81
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Bruce P. Rounds (Incorporated
    by reference to Exhibit 10.9 to Alliance Laundry Systems
    LLC's Form 10-Q, dated November 12, 2003 (file
    no. 333-56857)).
10
.82
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Robert Wallace.
10
.83
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Robert Baudhuin.
10
.84
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and William Bittner.
10
.85
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Charles Eaves.
10
.86
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Todd Kaull.
10
.87
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Paul Larkin.
10
.88
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Gary Luckow.
10
.89
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Richard Pyle.
10
.90
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Todd Rice.
10
.91
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and William Quandt.
Table of Contents
10
.92
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Scott Spiller.
10
.93
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Timothy Studt.
10
.94
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Jeffrey Thoms.
10
.95
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Peter Toonen.
10
.96
Alliance Laundry Holdings LLC 2003 Executive Unit
    Agreement, dated as of August 1, 2003 by and between
    Alliance Laundry Holdings LLC and Daniel Agnello.
10
.97
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Richard Casey.
10
.98
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Lee Wilson.
10
.99
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Patti Andresen-Shew.
10
.100
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Scott Gaster.
10
.101
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Thomas F.
    L'Esperance.
10
.102
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Jay McDonald.
10
.103
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Albert Rios.
10
.104
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Bruce Rounds.
10
.105
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Kim Shady.
10
.106
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Scott Spiller.
10
.107
Alliance Laundry Holdings LLC Executive Unit
    Repurchase Agreement, dated as of February 24, 2004 by and
    between Alliance Laundry Holdings LLC and Robert Wallace.
10
.108
Amendment No. 2 to Amended and Restated
    Limited Liability Company Agreement by Alliance Laundry Holdings
    LLC, dated as of September 12, 2003 (Incorporated by
    reference to Exhibit 10.10 to Alliance Laundry Systems
    LLC's Form 10-Q, dated November 12, 2003
    (file no. 333-56857)).
10
.109
Indenture, dated as of May 5, 1998, among
    Alliance Laundry Corporation, the Guarantors and United States
    Trust Company of New York (Incorporated by reference to
    Exhibit 4.1 to Alliance Laundry Systems LLC's
    Form S-4, Amendment #1, dated July 2, 1998 (file
    no. 333-56857)).
10
.110
Agreement, dated as of February 23, 2004
    among Alliance Laundry Holdings LLC, TCW Shared Opportunity
    Fund IV, L.P., TCW Shared Opportunity Fund IVB, L.P.,
    TCW Shared Opportunity Fund III, L.P., TCW SHOP III
    Subsidiary Investment, Inc. and TCW SHOP IV Subsidiary
    Investment, Inc. and Sankaty Alliance Corp., Sankaty High
    Yield Partners II, L.P., Sankaty High Yield
    Partners III, L.P. and Sankaty Credit
    Opportunities, L.P.
21
.2
Subsidiaries of the Registrant.
23
.1
Consent of PricewaterhouseCoopers LLP.
23
.2
Consent of Kirkland & Ellis LLP
    (included in Exhibit 5.1).*
23
.3
Consent of Kirkland & Ellis LLP
    (included in Exhibit 8.1).*
Table of Contents
24
.1
Powers of Attorney (included on signature page).
25
.1
Form T-1 Statement of Eligibility under
    Trust Indenture Act of 1939, as amended,
    of           as
    Trustee.*
*
To be filed by amendment.