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U.S. Securities and Exchange Commission

May 6, 2004

Jon S. Liland
Pierce Atwood
One Monument Square
Portland, Maine 04101

Re: Associated Grocers of Maine, Inc.
     File No. TP 04-44

Dear Mr. Liland:

In your letter dated May 5, 2004, as supplemented by conversations with the staff, you request an exemption from Rule 102(a) of Regulation M under the Securities Exchange Act of 1934 ("Exchange Act") to allow Associated Grocers of Maine, Inc. (the "Company") to conduct a rescission offer (the "Rescission Offer") while at the same time offering its Variable Rate Subordinated Debt Securities (the "Excess") to its member-shareholders at face value. We have attached a copy of your letter to this response to avoid reciting the facts. Unless otherwise noted, each defined term in this letter has the same meaning as defined in your letter.


The Rescission Offer is intended to rectify an oversale of Excess pursuant to an offering made in reliance on Regulation A under the Securities Act of 1933. In your correspondence, you make the following key representations:

  • It is highly unlikely that there will be a significant economic incentive for member-shareholders to accept the Rescission Offer and that very few member-shareholders will accept the Rescission Offer;
  • The Rescission Offer is not subject to the restrictions set forth in Rule 13e-4 under the Exchange Act;
  • The Rescission Offer will be directed at a limited number of member-shareholders, and an even more limited number of member-shareholders will be eligible to accept it, and the Rescission Offer will not be widely publicized to such member-shareholders;
  • If a member-shareholder elects to rescind the purchase, they will receive from the Company an amount equal to (i) their currently outstanding Excess balance, plus (ii) all interest accrued but not yet paid on such balance; and
  • There is no potential for price manipulation of the Excess because there is no trading market for the Excess, and it is not anticipated that one will develop.

Based on the facts and representations that you have made, the Rescission Offer does not appear to result in any of the abuses that Rule 102 is designed to prevent. Accordingly, on the basis of these facts and representations, but without necessarily concurring in your analysis, the Commission hereby grants the Company an exemption from Rule 102 of Regulation M pursuant to paragraph (e) thereof to permit the Company to conduct the Rescission Offer as described.

The foregoing exemption from Rule 102 is based solely on your representations and the facts presented to the staff, and is strictly limited to the application of this rule to the Rescission Offer. If any material change occurs with respect to any of those facts or representations, the Rescission Offer should be discontinued, pending presentation of the facts for our consideration.

In addition, your attention is directed to the anti-fraud and anti-manipulation provisions of the Exchange Act, particularly Sections 10(b) and 14(e), and Rule 10b-5 thereunder. Responsibility for compliance with these and any other applicable provisions of the federal securities laws must rest with the participants in the various transactions. The Division expresses no view with respect to any other questions that the Rescission Offer may raise, including, but not limited to, the adequacy of disclosure concerning, and the applicability of any other federal or state laws to, the Rescission Offer.

For the Commission, by the
Division of Market Regulation,
pursuant to delegated authority,

James A. Brigagliano
Assistant Director

Incoming Letter:

The Incoming Letter is in Acrobat format.


Modified: 05/11/2004