Purchase Agreement

Exhibit 2.1

 

ASG Consolidated LLC

 

ASG Finance, Inc.

 

$196,000,000 Principal Amount at Maturity

($124,852,000 in Gross Proceeds)

 

11.50% Senior Discount Notes due 2011

 

Purchase Agreement

 

dated October 14, 2004

 

Banc of America Securities LLC

Goldman, Sachs & Co.

Table of Contents

 

 

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Purchase Agreement

 

October 14, 2004

 

BANC OF AMERICA SECURITIES LLC

GOLDMAN, SACHS & CO.

c/o Banc of America Securities LLC

       9 West 57th Street

       New York, New York 10019

As Initial Purchasers

 

Ladies and Gentlemen:

 

Introductory . ASG Consolidated LLC, a Delaware limited liability company (“ ASG LLC ”), and ASG Finance, Inc., a Delaware corporation and wholly owned subsidiary of LLC (“ ASG Inc. ” and, together with ASG LLC, collectively, the “ Companies ” and, each individually, a “ Company ”), propose to issue and sell to Banc of America Securities LLC and Goldman, Sachs & Co. (the “ Initial Purchasers ”), acting severally and not jointly, the respective amounts set forth in Schedule I of $196,000,000 aggregate principal amount at maturity of their 11.50% Senior Discount Notes due 2011 ($124,852,000 in gross proceeds) (the “ Securities ”). Banc of America Securities LLC and Goldman, Sachs & Co. have agreed to act as the Initial Purchasers in connection with the offering and sale of the Securities.

 

The Securities will be issued pursuant to an indenture, dated as of October 19, 2004 (the “ Indenture ”), between the Companies and Wells Fargo Bank, N.A., as trustee (the “ Trustee ”). Securities issued in book-entry form will be issued in the name of Cede & Co., as nominee of The Depository Trust Company (the “ Depositary ”) pursuant to a blanket issuer letter of representations, to be dated as of or prior to the Closing Date (as defined in Section 2) (the “ DTC Letter of Representations ”), among the Companies, the Trustee and the Depositary.

 

The holders of the Securities will be entitled to the benefits of a registration rights agreement, to be dated as of October 19, 2004 (the “ Registration Rights Agreement ”), between the Companies and the Initial Purchasers, substantially in the form of Exhibit A attached hereto, pursuant to which the Companies will agree to file, within 180 days of the Closing Date, a registration statement (the “ Registration Statement ”) with the Securities and Exchange Commission (the “ Commission ”) registering the Exchange Securities (as defined below) under the Securities Act of 1933, as amended (the “ Securities Act ”) (which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder).

 

The Companies understand that the Initial Purchasers propose to make an offering of the Securities on the terms and in the manner set forth herein and in the Offering Memorandum (as defined below) and agree that the Initial Purchasers may resell, subject to the conditions set forth herein, all or a portion of the Securities to

 

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purchasers (the “ Subsequent Purchasers ”) at any time after the date of this Agreement. The Securities are to be offered and sold to or through the Initial Purchasers without being registered with the Commission under the Securities Act, in reliance upon exemptions therefrom. The terms of the Securities and the Indenture will require that investors that acquire Securities expressly agree that Securities may only be resold or otherwise transferred, after the date hereof, if such Securities are registered for sale under the Securities Act or if an exemption from the registration requirements of the Securities Act is available (including the exemptions afforded by Rule 144A (“ Rule 144A ”) under the Securities Act or Regulation S under the Securities Act (“ Regulation S ”)).

 

The Companies have prepared and delivered to the Initial Purchasers copies of a Preliminary Offering Memorandum, dated October 12, 2004 (the “ Preliminary Offering Memorandum ”), and have prepared and will deliver to the Initial Purchaser, copies of the Offering Memorandum, describing the terms of the Securities, each for use by the Initial Purchasers in connection with its solicitation of offers to purchase the Securities. As used herein, the “ Offering Memorandum ” shall mean, with respect to any date or time referred to in this Agreement, the offering memorandum, dated October 14, 2004 including amendments or supplements thereto, any exhibits thereto, in the most recent form that has been prepared and delivered by the Companies to the Initial Purchasers in connection with their solicitation of offers to purchase Securities. Further, any reference to the Preliminary Offering Memorandum or the Offering Memorandum shall be deemed to refer to and include any Additional Issuer Information (as defined in Section 3(g)) furnished by the Companies prior to the completion of the distribution of the Securities.

 

All references in this Agreement to financial statements and schedules and other information which is “ contained ,” “ included ” or “ stated ” in the Offering Memorandum (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which are incorporated by reference in the Offering Memorandum. Capitalized terms used herein not otherwise defined shall have the meanings set forth in the Offering Memorandum.

 

Each of the Companies hereby confirms its respective agreement with the Initial Purchasers as follows:

 

SECTION 1. Representations and Warranties . Each of the Companies hereby jointly and severally represents, warrants and covenants to the Initial Purchasers as follows:

 

(a) No Registration Required . Subject to compliance by the Initial Purchasers with the representations and warranties set forth in Section 2(e) hereof and with the procedures set forth in Section 7 hereof, it is not necessary in connection with the offer, sale and delivery of the Securities to the Initial Purchasers and to each Subsequent Purchaser in the manner contemplated by this Agreement and the Offering Memorandum to register the Securities under the Securities Act or, until such time as the Exchange Securities are issued pursuant to an effective registration statement, to qualify the

 

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Indenture under the Trust Indenture Act of 1939 (the “ Trust Indenture Act ”, which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder).

 

(b) No Integration of Offerings or General Solicitation . Neither of the Companies has, directly or indirectly, solicited any offer to buy or offered to sell, and none of them will, directly or indirectly, solicit any offer to buy or offer to sell, in the United States or to any United States citizen or resident, any security which is or would be integrated with the sale of the Securities in a manner that would require the Securities to be registered under the Securities Act. None of the Companies, their respective affiliates (as such term is defined in Rule 501(b) under the Securities Act (each, an “ Affiliate ”) or any person acting on their behalf (other than the Initial Purchaser, as to whom neither of the Companies makes any representation or warranty) has engaged or will engage, in connection with the offering of the Securities, in any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act. With respect to those Securities sold in reliance upon Regulation S, (i) none of the Companies, their respective Affiliates or any person acting on their behalf (other than the Initial Purchaser, as to whom neither of the Companies makes any representation or warranty) has engaged or will engage in any directed selling efforts within the meaning of Regulation S and (ii) each of the Companies, their respective Affiliates and any person acting on their behalf (other than the Initial Purchaser, as to whom neither of the Companies makes any representation or warranty) has complied and will comply with the offering restrictions set forth in Regulation S and, in connection therewith, the Offering Memorandum will contain the disclosure required by Rule 902 under the Securities Act.

 

(c) Eligibility for Resale Under Rule 144A . The Securities are eligible for resale pursuant to Rule 144A and will not be, at the Closing Date, of the same class as securities listed on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”, which term, as used herein, includes the rules and regulations of the Commission promulgated thereunder) or quoted in a U.S. automated interdealer quotation system.

 

(d) The Offering Memorandum . The Offering Memorandum does not, and at the Closing Date will not, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that this representation, warranty and agreement shall not apply to statements in or omissions from the Offering Memorandum made in reliance upon and in conformity with information furnished to the Companies in writing by the Initial Purchaser, expressly for use in the Offering Memorandum. Each of the Preliminary Offering Memorandum and the Offering Memorandum, as of its date, contains all the information specified in, and meeting the requirements of, Rule 144A(d)(4). Neither of the Companies has distributed or will distribute, prior to the later of the Closing Date and the completion of the Initial Purchaser’s distribution of the Securities, any offering material in connection with the offering and sale of the Securities, other than the Preliminary Offering Memorandum or the Offering Memorandum.

 

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(e) The Purchase Agreement . This Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, each of the Companies, enforceable in accordance with its terms, except as rights to indemnification hereunder may be limited by applicable law and except as the enforcement hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.

 

(f) Amendment to Senior Credit Facility . At the Closing Date, the amendment to American Seafoods Group LLC’s (“ Group ”) senior credit facility (the “ Senior Credit Facility ”), as described in the Offering Memorandum under “Offering Memorandum Summary—Recent Developments —Amendment to Senior Credit Facility,” will have been duly authorized, executed and delivered by, and will be a valid and binding agreement of, each of Group and its Affiliates that are party thereto, enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.

 

(g) The Registration Rights Agreement . At the Closing Date, the Registration Rights Agreement will have been duly authorized, executed and delivered by, and will be a valid and binding agreement of, each of the Companies, enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles and except as rights to indemnification thereunder may be limited by applicable law. Pursuant to the Registration Rights Agreement, each of the Companies will agree to file with the Commission, under the circumstances set forth therein, (i) a registration statement under the Securities Act relating to another series of debt securities of the Companies with terms substantially identical to the Securities (the “ Exchange Securities ”) to be offered in exchange for the Securities (the “ Exchange Offer ”) and (ii) to the extent required by the Registration Rights Agreement, a shelf registration statement pursuant to Rule 415 under the Securities Act relating to the resale by certain holders of the Securities, and in each case, to use its reasonable best efforts to cause such registration statements to be declared effective.

 

(h) Authorization of the Securities and the Exchange Securities . (i) The Securities to be purchased by the Initial Purchasers from the Companies are in the form contemplated by the Indenture, have been duly authorized for issuance and sale pursuant to this Agreement and the Indenture and, at the Closing Date, will have been duly executed by the Companies and, when the Securities have been authenticated in the manner provided for in the Indenture and delivered against payment of the purchase price therefor, will constitute valid and binding agreements of the Companies, enforceable in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles and will

 

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be entitled to the benefits of the Indenture; and (ii) the Exchange Securities have been duly and validly authorized for issuance by each of the Companies, and when the Exchange Securities have been issued and authenticated in accordance with the terms of the Indenture, the Registration Rights Agreement and the Exchange Offer, will constitute valid and binding obligations of the Companies, enforceable against each of the Companies in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting enforcement of the rights and remedies of creditors or by general principles of equity and will be entitled to the benefits of the Indenture.

 

(i) Authorization of the Indenture . The Indenture has been duly authorized by each of the Companies and, at the Closing Date, will have been duly executed and delivered by each of the Companies and will constitute a valid and binding agreement of each of the Companies, enforceable against each of the Companies in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.

 

(j) The DTC Letter of Representations . At the Closing Date, the DTC Letter of Representations will have been duly authorized, executed and delivered by, and (assuming the due authorization, execution and delivery thereof by the other parties thereto) will be a valid and binding agreement of, each of the Companies, enforceable in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles.

 

(k) Description of the Securities and the Indenture . The Securities, the Indenture and the Exchange Securities conform or will conform in all material respects to the respective statements relating thereto contained in the Offering Memorandum and, if applicable, the Registration Statement at the time such Registration Statement becomes effective.

 

(l) No Material Adverse Change . Except as otherwise disclosed in the Offering Memorandum, subsequent to the respective dates as of which information is given in the Offering Memorandum: (i) there has been no material adverse change, or any development that could reasonably be expected to result in a material adverse change, in the condition, financial or otherwise, or in the earnings, business, operations, management or prospects, whether or not arising from transactions in the ordinary course of business, of ASG LLC and its subsidiaries, considered as one entity (any such change is called a “ Material Adverse Change ”); (ii) ASG LLC and its subsidiaries, considered as one entity, have not incurred any material liability or obligation, indirect, direct or contingent, not in the ordinary course of business nor entered into any material transaction or agreement not in the ordinary course of business; and (iii) there has been no dividend or distribution of any kind declared, paid or made on any class of membership interests and no redemptions or repurchases of membership interest by ASG LLC, except for dividends paid by a subsidiary to ASG LLC or other subsidiaries of ASG LLC, or redemptions or repurchases of membership interests by subsidiaries of ASG LLC.

 

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(m) Compliance with Sarbanes-Oxley Act of 2002 . ASG LLC and, to the best of its knowledge, its officers and directors are in compliance in all material respects with applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith that are effective as of the date hereof, in each case, insofar as such Act, rules or regulations are applicable to them.

 

(n) Independent Accountants . KPMG LLP (the “ Independent Accountants ”), who has expressed its opinion with respect to the financial statements (which term as used in this Agreement includes the related notes thereto) and supporting schedules included in the Offering Memorandum, are independent public or certified public accountants with respect to the Companies within the meaning of Regulation S-X under the Securities Act and the Exchange Act.

 

(o) Preparation of the Financial Statements . The financial statements of ASG LLC and Group, together with the related supporting schedules, included in the Offering Memorandum present fairly in all material respects the consolidated financial position of each of ASG LLC and Group and their respective subsidiaries as of and at the dates indicated and the results of their operations and cash flows for the periods specified. Such financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved, except as may be expressly stated in the related notes thereto. The financial data set forth in the Offering Memorandum under the captions “Offering Memorandum Summary—Summary Consolidated Financial Information” and “Selected Historical Financial Information” fairly present the information set forth therein on a basis consistent with that of the audited financial statements contained in the Offering Memorandum. The pro forma consolidated condensed financial statements of ASG LLC and its subsidiaries and the related notes thereto included under the caption “Offering Memorandum Summary—Summary Consolidated Financial Information” and elsewhere in the Offering Memorandum present fairly in all material respects the information contained therein, have been prepared in accordance with the Commission’s rules and guidelines with respect to pro forma financial statements and have been properly presented on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein.

 

(p) Incorporation of the Companies and their Subsidiaries . Each of the Companies and their respective subsidiaries has been duly incorporated, formed or organized and is validly existing as a corporation, limited liability company or other organization, as the case may be, in good standing under the laws of the jurisdiction of its incorporation, formation or organization and has corporate power and authority, limited liability company power and authority or organizational power and authority to own, lease and operate its properties and to conduct its business as described in the Offering Memorandum and, in the case of the Companies, to enter into and perform their

 

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respective obligations under each of this Agreement, the Registration Rights Agreement, the DTC Letter of Representations, the Securities, the Exchange Securities and the Indenture. Each of the Companies and their respective subsidiaries is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except for such jurisdictions where the failure to so qualify or to be in good standing would not, individually or in the aggregate, result in a Material Adverse Change.

 

Except as otherwise disclosed in the Offering Memorandum, all of the issued and outstanding capital stock of ASG Inc. has been duly authorized and validly issued, is fully paid and nonassessable and is owned by ASG LLC, free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim. Except as otherwise disclosed in the Offering Memorandum, all of the membership interests in each direct or indirect partnership, corporate or limited liability company subsidiary of ASG LLC are owned by ASG LLC, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim. ASG LLC does not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries listed on Schedule A hereto. ASG Inc. has no subsidiaries.

 

(q) Capitalization and Other Capital Stock Matters . At June 30, 2004, on a consolidated basis, after giving pro forma effect to the issuance and sale of the Securities pursuant hereto and the use of proceeds thereof as described in the Offering Memorandum, the Companies would have had an authorized and outstanding capitalization as set forth in the Offering Memorandum under the caption “Capitalization,” subject to the notes and assumptions included therein (other than for subsequent issuances of capital stock, if any, pursuant to employee benefit plans described in the Offering Memorandum or upon exercise of outstanding options or warrants described in the Offering Memorandum). None of the outstanding membership and other equity or economic interests in ASG LLC were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of ASG LLC. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any membership interest or capital stock of ASG LLC or any of its subsidiaries other than those accurately described in the Offering Memorandum. The description of ASG LLC’s and/or its subsidiaries’ stock option, stock bonus, unit option and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in the Offering Memorandum accurately and fairly describes such plans, arrangements, options and rights.

 

(r) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required . Neither of the Companies nor any of their subsidiaries (i) is in violation of its certificate of formation or incorporation, as the case may be, or by-laws or limited liability company agreement, as the case may be, or (ii) is in default (or, with the giving of notice or lapse of time, would be in default) (“ Default ”) under any indenture, mortgage, loan or credit agreement, note, contract, franchise, lease,

 

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license or other instrument to which either of the Companies or any of their subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Companies or any of their subsidiaries is subject (each, an “ Existing Instrument ”), except in the case of clause (ii) for such Defaults as would not, individually or in the aggregate, result in a Material Adverse Change. Each of the Companies’ execution, delivery and performance of this Agreement, the Registration Rights Agreement, the DTC Letter of Representations and the Indenture, and the issuance and delivery of the Securities or the Exchange Securities, and consummation of the transactions contemplated hereby and thereby and by the Offering Memorandum have been duly authorized by all necessary corporate action or limited liability company action, as the case may be, and (i) will not result in any violation of the provisions of the certificate of formation or certificate of incorporation, as the case may be, or by-laws or limited liability company agreement, as the case may be, of either of the Companies or any of their subsidiaries, (ii) will not conflict with or constitute a breach of, or constitute a Default or a Debt Repayment Triggering Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Companies or any of their subsidiaries pursuant to, or require the consent of any other party to, any Existing Instrument, except for such conflicts, breaches, Defaults, liens, charges, encumbrances or unobtained consents as would not, individually or in the aggregate, result in a Material Adverse Change, and (iii) will not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Companies or any of their subsidiaries, including, without limitation, pursuant to maritime law or the rules or regulations of the Maritime Administration of the Department of Transportation (the “ MarAd ”). Except as otherwise disclosed in the Offering Memorandum under the caption “Risk Factors—Risks Relating to Our Industry and its Regulation—If we do not comply with rules regulating non-U.S. citizen ownership and control of fishing vessels, we could lose our eligibility to participate in U.S. fisheries”, no consent, approval, authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority or agency, including, without limitation, pursuant to maritime law or the rules or regulations of the MarAd, is required for either of the Companies’ execution, delivery and performance of this Agreement, the Registration Rights Agreement, the DTC Letter of Representations or the Indenture, or the issuance and delivery of the Securities or the Exchange Securities, or consummation of the other transactions contemplated hereby and thereby and by the Offering Memorandum, except such as have been obtained or made by the Companies and are in full force and effect under the Securities Act, the Trust Indenture Act and applicable state securities or blue sky laws and except such as may be required by federal and state securities laws or the Trust Indenture Act with respect to the Companies’ obligations under the Registration Rights Agreement. As used herein, a “ Debt Repayment Triggering Event ” means any event or condition which gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by either of the Companies or any of their subsidiaries.

 

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(s) No Material Actions or Proceedings . Except as otherwise disclosed in the Offering Memorandum, there are no legal or governmental actions, suits or proceedings pending or, to the best of ASG LLC’s knowledge, threatened: (i) against ASG LLC or any of its subsidiaries or (ii) which has as the subject thereof any property owned or leased by, ASG LLC or any of its subsidiaries, where in any such case described in clause (i) or (ii) (A) there is a reasonable possibility that such action, suit or proceeding might be determined adversely to ASG LLC or such subsidiary and (B) any such action, suit or proceeding would reasonably be expected to result in a Material Adverse Change or adversely affect the consummation of the transactions contemplated by this Agreement.

 

(t) Intellectual Property Rights . ASG LLC and its subsidiaries own or possess sufficient trademarks, trade names, patent rights, copyrights, licenses, approvals, trade secrets and other similar rights (collectively, “ Intellectual Property Rights ”) reasonably necessary to conduct their businesses as now conducted, except where the failure to own or possess such Intellectual Property Rights would not result in a Material Adverse Change; and the expected expiration of any of such Intellectual Property Rights would not result in a Material Adverse Change. Neither ASG LLC nor any of its subsidiaries has received any notice of infringement or conflict with asserted Intellectual Property Rights of others, which infringement or conflict, if the subject of an unfavorable decision, ruling or finding would result in a Material Adverse Change and neither of the Companies nor any of their subsidiaries is in default under the terms of any license or similar agreement related to any Intellectual Property Rights necessary to conduct their business as now conducted or contemplated except where such a default would not result in a Material Adverse Change.

 

(u) All Necessary Permits, etc . Each of ASG LLC and its subsidiaries possess such valid and current certificates, authorizations, permits and licenses issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct their respective businesses (including all certificates, authorizations, permits and licenses relating to the ownership of fishing vessels and all fishing and fish processing rights, licenses, approvals, quotas, permits, entitlements and privileges of whatever nature necessary for ASG LLC and its subsidiaries to conduct their business as described in the Offering Memorandum) except where the failure to possess such certificates, authorizations, permits and licenses would not result in a Material Adverse Change, and neither of the Companies nor any of their subsidiaries has received any notice of proceedings relating to the revocation or modification of, or non-compliance with, any such license, certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Change.

 

(v) Title to Properties . Each of ASG LLC and its subsidiaries has good and marketable title to all the properties and assets reflected as owned in the financial statements referred to in Section 1(o) above (or elsewhere in the Offering Memorandum), in each case free and clear of any security interests, mortgages, liens, encumbrances, equities, claims and other defects, except such as do not materially and

 

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adversely affect the value of such property and do not materially interfere with the use made or proposed to be made of such property by ASG LLC or any such subsidiary and except for liens described in the Offering Memorandum under “Risk Factors—Risks Relating to Our Industry and its Regulation—If we and members of our crew fail to comply with applicable regulations, our vessels may become subject to liens, foreclosure risks and various penalties and our fishing rights could be revoked.” The real property, improvements, equipment and personal property held under lease by ASG LLC or any of its subsidiaries are held under valid and enforceable leases, with such exceptions as are not material and do not materially interfere with the use made or proposed to be made of such real property, improvements, equipment or personal property by ASG LLC or any such subsidiary.

 

(w) Material Agreements. The agreements, contracts or instruments listed in Schedule B attached hereto are the only material agreements, contracts or instruments binding upon any of ASG LLC and its subsidiaries on the date hereof that are material to the operation of the business of ASG LLC and its subsidiaries, taken as a whole.

 

(x) Tax Law Compliance . Except for any non-compliance that would not result in any Material Adverse Change, each of ASG LLC and its subsidiaries has filed all federal, state and foreign income and franchise tax returns required to have been filed and have paid all taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them, except, in each case, as may be being contested in good faith and by appropriate proceedings. Each of ASG LLC and its subsidiaries has made adequate charges, accruals and reserves in accordance with generally accepted accounting principles in the applicable financial statements referred to in Section 1(o) above in respect of all federal, state and foreign income and franchise taxes for all periods as to which the tax liability of ASG LLC or any of its subsidiaries has not been finally determined.

 

(y) Each Company Not an “Investment Company” . Each of the Companies has been advised of the rules and requirements under the Investment Company Act of 1940, as amended (the “ Investment Company Act ”). The Companies are not, and after receipt of payment for the Securities will not be, an “ investment company ” within the meaning of the Investment Company Act and each of the Companies will conduct its business in a manner so that it will not become subject to the Investment Company Act during the term of the Securities.

 

(z) Insurance . Except as described in the Offering Memorandum under the section “Business—Insurance”, each of ASG LLC and its subsidiaries is insured by recognized, and to ASG LLC’s knowledge, financially sound institutions with policies in such amounts and with such deductibles and covering such risks as are generally deemed adequate and customary for their businesses including, but not limited to, policies covering real and personal property owned or leased by ASG LLC and its subsidiaries against theft, damage, destruction and acts of vandalism. ASG LLC, in its reasonable judgment, has no reason to believe that it or any of its subsidiaries will not be

 

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able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be reasonably necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Change. Neither ASG LLC nor any of its subsidiaries has been denied any insurance coverage which it has sought or for which it has applied.

 

(aa) No Price Stabilization or Manipulation . Neither of the Companies has taken and will take, directly or indirectly, any action designed to or that might be reasonably expected to cause or result in stabilization or manipulation of the price of any security of the Companies to facilitate the sale or resale of the Securities.

 

(bb) Solvency . Each of the Companies is, and, after giving effect to the sale of the Securities and the application of the proceeds thereof as described in the Offering Memorandum, will be, Solvent. As used herein, the term “ Solvent ” means, with respect to each Company on a particular date, that on such date (i) the fair value of its assets is greater than the total amount of its liabilities (including contingent liabilities), (ii) the present fair salable value of its assets is greater than the amount that will be required to pay the probable liabilities on its debts as they become absolute and matured, (iii) it is able to realize upon its assets and pay its debts and other liabilities, including contingent obligations, as they mature and (iv) it does not have unreasonably small capital to carry on its business as conducted and as proposed to be conducted after giving due consideration to the prevailing practice in the industry in which it is engaged or is to engage.

 

(cc) No Unlawful Contributions or Other Payments . Neither ASG LLC nor any of its subsidiaries nor, to the best of the Companies’ knowledge, any employee or agent of ASG LLC or any of its subsidiaries, has made any contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any law or of the character necessary to be disclosed in the Offering Memorandum in order to make the statements therein not misleading.

 

(dd) Accounting System . ASG LLC and its subsidiaries maintain a system of accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles as applied in the United States and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

(ee) Compliance with Environmental Laws . Except as would not, individually or in the aggregate, result in a Material Adverse Change (i) neither ASG LLC nor any of its subsidiaries is in violation of any federal, state, local or foreign law or regulation relating to pollution or protection of human health or the environment

 

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(including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum and petroleum products (collectively, “ Materials of Environmental Concern ”), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern (collectively, “ Environmental Laws ”), which violation includes, but is not limited to, noncompliance with any permits or other governmental authorizations required for the operation of the business of ASG LLC or its subsidiaries under applicable Environmental Laws, or noncompliance with the terms and conditions thereof, nor has ASG LLC or any of its subsidiaries received any written communication, whether from a governmental authority, citizens group, employee or otherwise, that alleges that ASG LLC or any of its subsidiaries is in violation of any Environmental Law; (ii) there is no claim, action or cause of action filed with a court or governmental authority, no investigation with respect to which any of the Companies has received written notice, and no written notice by any person or entity alleging potential liability for investigatory costs, cleanup costs, governmental responses costs, natural resources damages, property damages, personal injuries, attorneys’ fees or penalties arising out of, based on or resulting from the presence, or release into the environment, of any Material of Environmental Concern at any location owned, leased or operated by either of the Companies or any of their subsidiaries, now or in the past (collectively, “ Environmental Claims ”), pending or, to the best of either of the Companies’ knowledge, threatened against ASG LLC or any of its subsidiaries or any person or entity whose liability for any Environmental Claim ASG LLC or any of its subsidiaries has retained or assumed either contractually or by operation of law; and (iii) to the best of either Companies’ knowledge, there are no past or present actions, activities, circumstances, conditions, events or incidents, including, without limitation, the release, emission, discharge, presence or disposal of any Material of Environmental Concern, that reasonably could result in a violation of any Environmental Law or form the basis of a potential Environmental Claim against ASG LLC or any of its subsidiaries or against any person or entity whose liability for any Environmental Claim ASG LLC or any of its subsidiaries has retained or assumed either contractually or by operation of law.

 

(ff) ERISA Compliance . Except for any non-compliance that would not result in any Material Adverse Change, each of ASG LLC and its subsidiaries and any “ employee benefit plan ” (as defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, “ ERISA ”)) established or maintained by ASG LLC, its subsidiaries or its “ERISA Affiliates” (as defined below) are in compliance in all respects with ERISA. “ ERISA Affiliate ” means, with respect to ASG LLC or a subsidiary, any member of any group of organizations described in Sections 414 of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (the “ Code ”) of which ASG LLC or such subsidiary is a member. No “reportable event” (as defined under ERISA which is not otherwise waived) has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained by ASG

 

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LLC, its subsidiaries or any of its ERISA Affiliates. No “employee benefit plan” established or maintained by ASG LLC, its subsidiaries or any of its ERISA Affiliates and which is covered by Title IV of ERISA, if such “employee benefit plan” were terminated, would have any “amount of unfunded benefit liabilities” (as defined under ERISA) which could reasonably result in material liability. Neither ASG LLC, its subsidiaries nor any of its ERISA Affiliates has incurred or reasonably expects to incur any material liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee benefit plan” established or maintained by either Company, their subsidiaries or any of their ERISA Affiliates that is intended to be qualified under Section 401 of the Code is the subject of a favorable determination letter issued by the Internal Revenue Service and nothing has occurred, whether by action or failure to act, which would cause the loss of such qualification.

 

(gg) Taxes; Fees . There are no stamp or other issuance or transfer taxes or duties or other similar fees or charges required to be paid in connection with the execution and delivery of this Agreement or the issuance or sale by the Companies of the Securities.

 

(hh) No Labor Disputes . No material labor dispute with the employees of ASG LLC or any of its subsidiaries exists or, to the knowledge of ASG LLC, is imminent; and ASG LLC is not aware of any existing, threatened or imminent labor disturbance by the employees of any of its principal customers, suppliers, manufacturers or contractors that would result in a Material Adverse Change.

 

(ii) ASG Finance, Inc. ASG Finance, Inc. has no subsidiaries and has conducted no business prior to the date hereof other than in connection with the transactions contemplated by this Agreement.

 

(jj) EBITDA . The consolidated adjusted EBITDA of Group and its subsidiaries for the last twelve months ended June 30, 2004 was not less than $114 million (with adjusted EBITDA to be determined as described in the Offering Memorandum under “Offering Memorandum Summary—Summary Consolidated Financial Information”), and the pro forma ratio of total debt of Group and its subsidiaries at June 30, 2004 to the consolidated adjusted EBITDA of Group and its subsidiaries for the last twelve months ended June 30, 2004 (which pro forma ratio shall be calculated after giving effect to the offering and sale of the Securities and the use of proceeds thereof and be satisfactory to Banc of America Securities LLC in its reasonable judgment) was not greater than 5.5:1.0.

 

Any certificate signed by an officer of either Company and delivered to the Initial Purchasers or to counsel for the Initial Purchasers shall be deemed to be a representation and warranty by such Company to each Initial Purchaser as to the matters set forth therein.

 

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SECTION 2. Purchase, Sale and Delivery of the Securities .

 

(a) The Securities . The Companies agree to issue and sell to the several Initial Purchasers all of the Securities upon the terms herein set forth. On the basis of the representations, warranties and agreements herein contained, and upon the terms but subject to the conditions herein set forth, the Initial Purchasers agree, severally and not jointly, to purchase from the Companies the aggregate principal amount at maturity of Securities set forth opposite their names on Schedule I , at a purchase price of 62.1075% of the principal amount at maturity thereof payable on the Closing Date.

 

(b) The Closing Date . Delivery of certificates for the Securities in definitive form to be purchased by the Initial Purchasers and payment therefor shall be made at the offices of Shearman & Sterling LLP, 599 Lexington Avenue, New York, NY 10022 (or such other place as may be agreed to by the Companies and the Initial Purchaser) at 9:00 a.m., New York City time, on October 19, 2004, or such other time and date as the Initial Purchasers shall designate by notice to the Companies (the time and date of such closing are called the “ Closing Date ”).

 

(c) Delivery of the Securities . The Companies shall deliver, or cause to be delivered, to Banc of America Securities LLC for the account of the several Initial Purchasers certificates for the Securities at the Closing Date against the irrevocable release of a wire transfer of immediately available funds for the amount of the purchase price therefor. The certificates for the Securities shall be in such denominations and registered in the name of Cede & Co., as nominee of the Depositary, pursuant to the DTC Letter of Representations, and shall be made available for inspection on the business day preceding the Closing Date at a location in New York City, as the Initial Purchasers may designate. Time shall be of the essence, and delivery at the time and place specified in this Agreement is a further condition to the obligations of the Initial Purchaser.

 

(d) Delivery of Offering Memorandum to the Initial Purchaser . Not later than 12:00 p.m. on the second business day following the date of this Agreement, the Companies shall deliver or cause to be delivered copies of the Offering Memorandum in such quantities and at such places as the Initial Purchasers shall reasonably request.

 

(e) Initial Purchasers as Qualified Institutional Buyers . Each Initial Purchaser severally and not jointly represents and warrants to, and agrees with, the Companies that (i) it is a “qualified institutional buyer” within the meaning of Rule 144A (a “ Qualified Institutional Buyer ”) and an “accredited investor” within the meaning of Rule 501(a) under the Securities Act (an “ Accredited Investor ”) and (ii) it will comply with all requirements of Rule 144A or Regulation S under the Securities Act including, without limitation, the terms and conditions of offers and sales set forth in Annex I.

 

(f) Initial Purchaser Representation . Each Initial Purchaser severally and not jointly represents and warrants to the Companies that (i) it will offer and sell the Securities only to investors on its existing “qualified institutional buyer” lists, and (ii) in connection with its solicitation of offers to purchase the Securities, it will not rely on any written offering material other than the Preliminary Offering Memorandum and the Offering Memorandum.

 

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SECTION 3. Additional Covenants . Each of the Companies further jointly and severally covenants and agrees with each Initial Purchaser as follows:

 

(a) Initial Purchaser’s Review of Proposed Amendments and Supplements . Prior to amending or supplementing the Offering Memorandum (including any amendment or supplement through incorporation by reference of any report filed under the Exchange Act), the Companies shall furnish to the Initial Purchasers for review a copy of each such proposed amendment or supplement, and the Companies shall not use any such proposed amendment or supplement to which the Initial Purchasers reasonably objects.

 

(b) Amendments and Supplements to the Offering Memorandum and Other Securities Act Matters . If, prior to the completion of the placement of the Securities by the Initial Purchasers with the Subsequent Purchasers, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Offering Memorandum in order to make the statements therein, in the light of the circumstances when the Offering Memorandum is delivered to a purchaser, not misleading, or if in the opinion of the Initial Purchasers or counsel for the Initial Purchasers it is otherwise necessary to amend or supplement the Offering Memorandum to comply with law, the Companies agree to promptly prepare (subject to Section 3(a) hereof), and furnish at their own expense to the Initial Purchaser, amendments or supplements to the Offering Memorandum so that the statements in the Offering Memorandum as so amended or supplemented will not, in the light of the circumstances when the Offering Memorandum is delivered to a purchaser, be misleading or so that the Offering Memorandum, as amended or supplemented, will comply with law.

 

Each of the Companies hereby expressly acknowledges that the indemnification and contribution provisions of Sections 8 and 9 hereof are specifically applicable and relate to each offering memorandum, amendment or supplement referred to in this Section 3(b).

 

(c) Copies of the Offering Memorandum . ASG LLC agrees to furnish the Initial Purchaser, without charge, as many copies of the Offering Memorandum and any amendments and supplements thereto as it shall have reasonably requested.

 

(d) Blue Sky Compliance . Each of the Companies shall cooperate with the Initial Purchasers and counsel for the Initial Purchasers to qualify or register the Securities for sale under (or obtain exemptions from the application of) the Blue Sky or state securities laws of those jurisdictions designated by the Initial Purchaser, shall comply with such laws and shall continue such qualifications, registrations and exemptions in effect so long as required for the distribution of the Securities. Neither of the Companies shall be required to qualify as a foreign corporation or to take any action that would subject it to general service of process in any such jurisdiction where it is not

 

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presently qualified or where it would be subject to taxation as a foreign corporation. ASG LLC will advise the Initial Purchasers promptly of the suspension of the qualification or registration of (or any such exemption relating to) the Securities for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the Companies shall use their best efforts to obtain the withdrawal thereof at the earliest possible moment.

 

(e) Use of Proceeds . The Companies shall apply the net proceeds from the sale of the Securities in the manner described under the caption “Use of Proceeds” in the Offering Memorandum.

 

(f) The Depositary . The Companies will cooperate with the Initial Purchasers and use their best efforts to permit the Securities to be eligible for clearance and settlement through the facilities of the Depositary.

 

(g) Additional Issuer Information . The Companies shall file, on a timely basis, with the Commission all reports and documents required to be filed under Section 13 or 15(d) of the Exchange Act prior to the completion of the placement of the Securities by the Initial Purchasers with the Subsequent Purchasers. Additionally, at any time when the Companies are not subject to Section 13 or 15(d) of the Exchange Act, for the benefit of holders and beneficial owners from time to time of Securities, the Companies shall furnish, at their expense, upon request, to holders and beneficial owners of Securities and prospective purchasers of Securities information (“ Additional Issuer Information ”) satisfying the requirements of subsection d(4) of Rule 144A.

 

(h) Future Agreement Not to Offer or Sell Additional Securities . During the period of 180 days following the date of the Offering Memorandum, neither Company will, without the prior written consent of Banc of America Securities LLC (which consent may be withheld at the sole discretion of Banc of America Securities LLC), directly or indirectly, sell, offer, contract or grant any option to sell, pledge, transfer or establish an open “put equivalent position” within the meaning of Rule 16a-1 under the Exchange Act, or otherwise dispose of or transfer, or announce the offering of, or file any registration statement under the Securities Act in respect of, any debt securities of either Company substantially similar to the Securities or securities exchangeable for or convertible into debt securities of either Company substantially similar to the Securities (other than as contemplated by this Agreement and to register the Exchange Securities).

 

(i) Future Reports to the Initial Purchaser . For so long as any Securities or Exchange Securities remain outstanding, the Companies will furnish to Banc of America Securities LLC as soon as practicable after the end of each fiscal year, copies of the Annual Report of ASG LLC containing the balance sheet of ASG LLC as of the close of such fiscal year and statements of income, stockholders’ equity or its equivalent and cash flows for the year then ended and the opinion thereon of ASG LLC’s independent public or certified public accountants; (ii) as soon as practicable after the filing thereof, copies of each proxy statement, Annual

 

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Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report filed by ASG LLC with the Commission, the NASD or any securities exchange; and (iii) as soon as available, copies of any report or communication of ASG LLC mailed generally to holders of its capital stock or debt securities (including the holders of the Securities).

 

(j) No Integration . Each of the Companies agrees that it will not and will cause its Affiliates not to make any offer or sale of its securities of any class if, as a result of the doctrine of “integration” referred to in Rule 502 under the Securities Act, such offer or sale would render invalid (for the purpose of (i) the sale of the Securities by the Companies to the Initial Purchaser, (ii) the resale of the Securities by the Initial Purchasers to Subsequent Purchasers or (iii) the resale of the Securities by such Subsequent Purchasers to others) the