As filed with the Securities and Exchange Commission on April 30, 2004

Registration No. 333-105499

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 5

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

American Seafoods Corporation

(Exact name of registrant as specified in its charter)

Delaware

6719

01-0781250

(State or other jurisdiction of incorporation or organization)

(Primary Standard Industrial Classification Code Number)

(I.R.S. Employer

Identification Number)

Market Place Tower

2025 First Avenue

Suite 1200

Seattle, Washington 98121

(206) 374-1515

(Address, including zip code, and telephone number, including

area code, of registrant’s principal executive offices)

Co-Registrants

See Next Page

Brad Bodenman

Chief Financial Officer

American Seafoods Group LLC

Market Place Tower

2025 First Avenue

Suite 1200

Seattle, Washington 98121

(206) 374-1515

(Name, address, including zip code, and telephone

number, including area code, of agent for service)

Copies to:

Jeffrey J. Rosen, Esq.

Peter A. Furci, Esq.

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

(212) 909-6000

David J. Goldschmidt, Esq.

Skadden, Arps, Slate,

Meagher & Flom LLP

Four Times Square

New York, New York 10036

(212) 735-3000

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. ¨

If this Form is filed to register 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. ¨

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. ¨

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. ¨

If delivery of the prospectus is expected to be made pursuant to Rule 434 under the Securities Act, check the following box. ¨

CALCULATION OF REGISTRATION FEE


Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price(1)	Amount of Registration Fee

Income Deposit Securities (IDSs)(2)	$650,450,994	$518(3)

Shares of Common Stock, par value 0.01 per share(4)	39,661,646

% Notes(5)(6)	$263,161,379

Guarantees	*	None(7)

(1)	Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

(2)

Includes an indeterminate number of IDSs of the same series of the IDSs offered hereby, which may be received by holders of IDSs in the future on one or more occasions in replacement of the IDSs offered hereby in the event of a subsequent issuance of IDSs. The IDS units represent 39,661,646 shares of the common stock and $230.0 million aggregate principal amount of notes of American Seafoods Corporation, including 5,030,488 IDSs subject to the underwriters’ over-allotment option to purchase additional IDSs. Assuming the underwriters’ over-allotment option to purchase additional IDSs is exercised, 38,567,073 IDSs will be sold to the public in connection with this initial public offering, and 1,094,573 IDSs will be issued to certain affiliates and members of management in connection with the transactions described in this Registration Statement under “Detailed Transaction Steps.”

(3)

Pertains to $650,450,994 IDSs and $33.1 million notes sold separately and not in the form of IDSs. $36,405, $15,124, $3,400 and $536 were previously paid in connection with the initial filing of this Registration Statement on May 22, 2003, the filing of Amendment No. 1 on July 9, 2003, the filing of Amendment No. 2 on October 16, 2003 and the filing of Amendment No. 3 on February 19, 2004, respectively.

(4)

Including 5,030,488 common shares subject to the underwriters’ over-allotment option to purchase additional IDSs, 38,567,073 common shares will be sold to the public in connection with this initial public offering, and 1,094,573 IDSs will be issued to certain affiliates and members of management in connection with the transactions described in this Registration Statement.

(5)

Including $29.2 million principal amount of notes issued in the form of IDSs which are subject to the underwriters’ over-allotment option to purchase additional IDSs, $223.7 million principal amount of notes will be sold in the form of IDSs to the public in connection with this initial public offering; $6.3 million principal amount of notes will be issued in the form of IDSs to certain affiliates and members of management in connection with the transactions described in this Registration Statement. In addition, $33.1 million aggregate principal amount of notes of the same series will be sold separately (not represented by IDSs) to the public in connection with this initial public offering.

(6)

Includes an indeterminate principal amount of notes of the same series as the notes offered hereby, which will be received by holders of notes offered hereby in the future on one or more occasions in the event of a subsequent issuance of notes of the same series, or upon an automatic exchange of portions of the notes offered hereby for identical portions of such additional notes.

(7)	Pursuant to Rule 457(n), no separate filing fee is required for the guarantees.

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.


Exact Name of Co-Registrant as Specified in its Charter	State or Other Jurisdiction of Incorporation or Organization	Primary Standard Industrial Classification Code Number	I.R.S. Employer Identification No.	Code, and Telephone Number, Including Area Code, of Principal Executive Office
American Seafoods Holdings LLC	Delaware	6719	13-4097209	Market Place Tower 2025 First Avenue, Suite 1200 Seattle, WA 98121 Phone: (206) 374-1515

American Seafoods Group LLC	Delaware	6719	22-3702647	Market Place Tower 2025 First Avenue, Suite 1200 Seattle, WA 98121 Phone: (206) 374-1515

American Seafoods International LLC	Delaware	2092	22-3702872	40 Herman Melville Blvd. P.O. Box 2087 New Bedford, MA 02741 Phone: (508) 997-0031

New Bedford Seafoods LLC	Delaware	2092	22-3702925	40 Herman Melville Blvd. P.O. Box 2087 New Bedford, MA 02741 Phone: (508) 997-0031

The Hadley Group LLC	Delaware	2092	04-2918779	40 Herman Melville Blvd. P.O. Box 2087 New Bedford, MA 02741 Phone: (508) 997-0031

American Seafoods Processing LLC	Delaware	2092	04-3540757	40 Herman Melville Blvd. P.O. Box 2087 New Bedford, MA 02741 Phone: (508) 997-0031

American Seafoods Company LLC	Delaware	2092	22-3702875	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

American Challenger LLC	Delaware	0912	22-3702876	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

American Dynasty LLC	Delaware	0912	22-3702909	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

American Triumph LLC	Delaware	0912	22-3702882	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515


Exact Name of Co-Registrant as Specified in its Charter	State or Other Jurisdiction of Incorporation or Organization	Primary Standard Industrial Classification Code Number	I.R.S. Employer Identification No.	Code, and Telephone Number, Including Area Code, of Principal Executive Office

Ocean Rover LLC	Delaware	0912	22-3702880	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515
Northern Eagle LLC	Delaware	0912	22-3702900	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

Northern Hawk LLC	Delaware	0912	22-3702905	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

Northern Jaeger LLC	Delaware	0912	22-3702901	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

Katie Ann LLC	Delaware	0912	22-3702906	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

Pacific Longline Company LLC	Washington	6719	91-2136688	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

Deep Pacific, LLC	Washington	6719	91-2143982	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

Lilli Ann, LLC	Washington	6719	91-2143981	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

North Cape Fisheries, LLC	Washington	6719	91-2124370	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

Southern Pride Catfish LLC	Delaware	0912	42-1563059	1520 Centerville St. Greensboro, AL 36744 Phone: (334) 624-4021


Exact Name of Co-Registrant as Specified in its Charter	State or Other Jurisdiction of Incorporation or Organization	Primary Standard Industrial Classification Code Number	I.R.S. Employer Identification No.	Code, and Telephone Number, Including Area Code, of Principal Executive Office

Southern Pride Catfish Trucking, Inc.	Delaware	0912	42-1563057	1520 Centerville St. Greensboro, AL 36744 Phone: (334) 624-4021

ASC, Inc.	Washington	6719	91-1417098	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

Subject to Completion, Dated April 30, 2004

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is declared effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

33,536,585

Income Deposit Securities (IDSs)

Representing

33,536,585 Shares of Common Stock

$194.5 million % Notes due 2019

and

$33.1 million % Notes due 2019

LOGO

We are selling 33,536,585 IDSs in respect of 33,536,585 shares of our common stock and $194.5 million aggregate principal amount of our % notes due June 15, 2019, subject to earlier maturity as described herein. Each IDS represents:

one share of our common stock; and

a % note with $5.80 principal amount.

We are also selling separately (not represented by IDSs) $33.1 million aggregate principal amount of our % notes due 2019, subject to earlier maturity as described herein. The completion of the offering of separate notes is a condition to our sale of IDSs.

This is the initial public offering of our IDSs and notes. We anticipate that the public offering price of the IDSs will be between $15.50 and $17.30 per IDS and the public offering price of the notes sold separately (not represented by IDSs) will be % of their stated principal amount.

Holders of IDSs will have the right to separate IDSs into the shares of common stock and 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, holders of our common stock and notes may, at any time, unless the IDSs have automatically separated, combine the applicable number of shares of common stock and notes to form IDSs. Separation of IDSs will occur automatically upon the continuance of a payment default on the notes for 90 days, or a repurchase, redemption or maturity of the notes.

Upon a subsequent issuance by us of notes of the same series, a portion of your notes may be automatically exchanged for an identical principal amount of the notes issued in such subsequent issuance and, in such event, your IDSs or notes will be replaced with new IDSs or a unit consisting of your notes and new notes, as the case may be. In addition to the notes offered hereby, the registration statement of which this prospectus is a part also registers the notes and new IDSs to be issued to you upon any such subsequent issuance. For more information regarding these automatic exchanges and the effect they may have on your investment, see “Risk Factors—Subsequent issuances of notes pursuant to an offering by us or following an exercise of exchange or registration rights by partners of ASLP or exchange of Class A common stock may cause you to recognize original issue discount” and “Description of Notes—Additional Notes” on page 129 and “Material U.S. Federal Tax Considerations—Exchange Rights and Additional Issuances” on page 188.

We have applied to list our IDSs on the American Stock Exchange under the trading symbol “SEA”.

We are subject to foreign ownership provisions of the American Fisheries Act as a result of which each owner of 5% or more of our common stock (including purchasers in this offering) must certify to us that such person is a U.S. citizen, and at least 95% of all of our beneficial owners will be required to have U.S. addresses. These requirements, and the remedies we may need to invoke to satisfy them, may have an adverse effect on the market for and trading price of IDSs or shares of our common stock.

Investing in our IDSs and our 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	Total(2)
Public offering price	$	$	%	$
Underwriting discount	$	$	%	$
Proceeds to American Seafoods Corporation (before expenses)(3)	$	$	%	$

(1)	Comprised of $5.80 allocated to each note which represents 100% of its stated principal amount and $10.60 allocated to each share of common stock.

(2)	Represents the $33.1 million aggregate principal amount of notes sold separately (not represented by IDSs).

(3)	Approximately $186.4 million of those proceeds will be paid to the current owners of our business before this offering and approximately $34.7 million will be paid to a related party to repay indebtedness and redeem preferred stock.

We have granted the underwriters an option to purchase up to 5,030,488 additional IDSs at the public offering price, less the underwriting discount, within 30 days from the date of this prospectus to cover over-allotments to purchase additional IDSs. We will use all of the proceeds from the sale of any additional IDSs under the underwriters’ over-allotment option to purchase additional IDSs indirectly to redeem additional equity from the persons who owned our affiliate, American Seafoods, L.P., before this offering, which will increase our percentage ownership in our consolidated subsidiary, American Seafoods Holdings, L.P. (“Holdings”). This prospectus also relates to 1,646,099 IDSs being issued concurrently with this offering to certain indirect holders of equity interests in Holdings in exchange for a portion of those interests.

The underwriters expect to deliver the IDSs and the notes to purchasers on or about , 2004.

CIBC World Markets

Merrill Lynch & Co.

UBS Investment Bank

Credit Suisse First Boston

RBC Capital Markets

Legg Mason Wood Walker

KeyBanc Capital Markets

Incorporated

SunTrust Robinson Humphrey

Piper Jaffray

Wells Fargo Securities, LLC

Scotia Capital

Morgan Joseph & Co. Inc.

, 2004

Table Of Contents


		Page
Summary		1
Risk Factors		25
Cautionary Statement Regarding Forward-Looking Statements		41
Use of Proceeds		42
Dividend Policy and Restrictions		43
Capitalization		45
Pro Forma Dilution		46
Selected Historical Financial Information for Holdings and Selected Pro Forma Financial Information for the Issuer		48
Management’s Discussion and Analysis of Financial Condition and Results of Operations		51
Industry and Regulatory Overview		71
Business		78
Management		96
Security Ownership of Certain Beneficial Owners and Management		104
Related Party Transactions		107
Detailed Transaction Steps		112
Description of Certain Indebtedness		116
Description of IDSs		123
Description of Notes		127
Description of Capital Stock		177
IDSs Eligible for Future Sale		184
Material U.S. Federal Income Tax Considerations		185
Certain ERISA Considerations		194
Underwriting		196
Legal Matters		199
Change in Accountants		199
Experts		200
Where You Can Find More Information		200
Index to Financial Statements		F-1
Glossary		G-1

Summary

The following is a summary of the principal features of this offering of IDSs and 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 American Seafoods Corporation, a Delaware corporation, as the “Issuer.” The Issuer will be the sole general partner of American Seafoods Holdings, L.P., a Delaware limited partnership (together with its predecessor, American Seafoods Holdings LLC, “Holdings”), which owns the operating entities described below, including American Seafoods Group LLC, a Delaware limited liability company (“ASG”). References in this prospectus to “we,” “our” and “us” refer to the Issuer, Holdings and its direct and indirect subsidiaries and their predecessors, unless the context otherwise requires. The current owner of our business is American Seafoods, L.P., a Delaware limited partnership (“ASLP”), which is controlled by its general partner, ASC Management, Inc.

Our Company

We are one of the largest integrated seafood companies in the U.S. in terms of revenues. We harvest and process a variety of fish species aboard our sophisticated catcher-processor vessels, our freezer-longliner vessels and at our land-based processing facilities, and market our products to a diverse group of customers in North America, Asia and Europe. In the U.S., we are the largest harvester and at-sea processor of pollock and hake and the largest processor of catfish. Pollock is the world’s highest-volume whitefish harvested for human consumption and accounts for a majority of our revenues. According to the Food and Agriculture Organization of the United Nations, catfish accounted for approximately 50% of the value of all aquaculture in the U.S. in 2002. In addition, we harvest and/or process additional seafood, including cod, scallops and yellowfin sole. We maintain an international marketing network through our U.S., Japan and European offices and have developed long-term relationships with our U.S. and international customer base.

We own and operate a premier modern fleet of seven catcher-processor vessels, which average over 300 feet in length and carry crews of 90 to 125 persons. We also own and operate three freezer-longliners in the U.S. Bering Sea Pacific cod fishery. Each such vessel ranges in length from approximately 125 to 140 feet and carries approximately 20 crew members. We produce a variety of products at sea, such as pollock roe (fish eggs), surimi (a fish protein paste used in products such as imitation lobster and crabmeat), fillet blocks, headed and gutted fish and fishmeal. We harvest pollock in the U.S. Bering Sea pollock fishery. According to the Marine Conservation Alliance, this fishery is among the largest and most conservatively managed in the world.

We own and operate two catfish processing facilities in Alabama. We distribute fresh and frozen catfish products to both retailers and foodservice customers throughout several regions in the U.S. In addition, we conduct other seafood processing operations at our facility in Massachusetts, where we manufacture products such as breaded seafood portions, fillets and scallops.

We operate in two principal business segments, ocean harvested whitefish and other seafood products. The ocean harvested whitefish segment includes the harvesting and processing of pollock, cod, hake and yellowfin sole. Processing of ocean harvested whitefish occurs on our vessels while at sea and at our facilities in Massachusetts. The other seafood products segment includes the processing of catfish and scallops at our facilities in Alabama and Massachusetts.

Industry Overview

Our pollock harvesting and at-sea processing operations benefit from a favorable statutory and regulatory environment. The American Fisheries Act

specifically identifies the catcher-processor vessels that are eligible to participate in the U.S. Bering Sea pollock fishery, prohibits the entry of additional vessels and prohibits any single entity from harvesting more than 17.5% of the annual directed pollock catch. We own and operate seven of the 19 catcher-processor vessels permitted to participate in the catcher-processor sector of the U.S. Bering Sea pollock fishery. Under the American Fisheries Act, this sector is allocated 40% of the annual directed pollock catch. Within the catcher-processor sector, our allocation for pollock under the Pollock Conservation Cooperative agreement, a contractual arrangement among the seven companies that own the catcher-processors named in the statute, is nearly 2.5 times larger than that of the second largest Pollock Conservation Cooperative member. In addition to harvesting and processing pollock, we also participate in the catcher-processor sector of U.S. fisheries for hake and cod and in the freezer-longliners sector of the U.S. Bering Sea Pacific cod fishery.

Catcher-processors and freezer-longliners, such as the vessels we own, harvest and process fish into frozen products, such as roe, fillets, surimi and headed and gutted fish within hours of catching them.

As part of our other seafood products processing operations, we process approximately 100 million pounds of catfish per year, making us the largest catfish processor by volume in the U.S. We do not own any of the farms from which we source catfish, reducing our exposure to catfish price volatility. In the U.S., the catfish market has evolved over the last decade from being a regional commodity, locally produced and consumed predominantly in the southern U.S., to a large, commercial aquaculture industry serving major U.S. markets.

Competitive Strengths

Abundant, Stable Pollock Fishery. Our pollock harvesting operations target the U.S. Bering Sea pollock fishery, which, according to the Marine Conservation Alliance, is one of the healthiest and most responsibly managed fisheries in the world. The North Pacific Fishery Management Council set the 2004 U.S. Bering Sea pollock total allowable catch at a ten year historically high level while the 2004 Russian pollock quota declined by 20% from the 2003 level.

Attractive Regulatory Environment; Barriers to Entry. The American Fisheries Act provides us with key competitive benefits including, among other things, limiting participation in the catcher-processor sector of the U.S. Bering Sea pollock fishery to 19 specifically named catcher-processor vessels, of which we own and operate seven.

Efficient Large-Scale Operator. We own and operate the largest fleet of catcher-processors in the U.S. Bering Sea pollock fishery. In 2003, our fleet included the industry’s top five catcher-processors in terms of metric tons harvested. Each of our catcher-processors is a floating factory equipped with flexible manufacturing platforms and an integrated computer system, enabling constant communication among vessels, the corporate office and our sales representatives, and the ability to shift production based on current market demand.

Catfish Processor Leader. We are the largest catfish processor in the U.S., processing approximately 100 million pounds of catfish per year in our two Alabama facilities, which represents a leading market share in the catfish processing sector of over 16%.

Strong Customer Relationships and Distribution Network. We have established long-standing relationships with a diverse base of customers worldwide, including industrial importers, foodservice distributors, food retailers, restaurant chains and reprocessing companies.

Experienced Management Team. Our senior management team members average more than 20 years of industry experience.

Business Strategy

Over the past decade, we have become one of the largest integrated seafood companies in the U.S. Today, we are committed to building on our existing harvesting, processing and marketing platforms.

The primary components of our business strategy include the following:

Maximize Pollock Revenues. Our pollock harvesting and at-sea processing operations provide a majority of our revenues. Our strategy to maximize pollock revenues includes continuing to increase our share of the total allowable catch in the U.S. Bering Sea pollock fishery by purchasing community development quota from Alaska Community Development Groups and optimizing our product mix based on global demand and pricing.

Continue to Diversify Sources of Revenues. We participate in a number of other fisheries besides pollock, such as the hake, Pacific cod and yellowfin sole fisheries. With our acquisitions of Southern Pride and Pacific Longline Company, we became both the largest catfish processor in the U.S. and a participant in the cod freezer-longliners sector and therefore have significant market positions in pollock, catfish and cod, the top three whitefish species in terms of U.S. human consumption.

Pursue Strategic Acquisitions. We intend to evaluate and selectively pursue accretive opportunities that we believe are strategically important based on their potential to diversify our product and customer base, broaden our distribution network and increase cash flow.

New Credit Facilities

Simultaneously with consummating this offering, our subsidiaries, including Holdings and ASG, will enter into $300.0 million of senior secured debt facilities, which we refer to as the “new credit facilities.” We expect that the new credit facilities will include a credit agreement with a syndicate of financial institutions and Wells Fargo Bank, N.A., as administrative agent, which we refer to as the “new credit agreement,” providing for an $80.0 million senior secured revolving credit facility, which we refer to as the “new revolver,” and a term loan in a total principal amount of $80.0 million, which we refer to as the “new term loan.” In addition, the new credit facilities will include $140.0 million of senior secured notes, which we refer to as the “new senior notes,” which will be placed with institutional investors and will have covenants and certain other provisions substantially similar to the new credit agreement. The new credit facilities will be secured

by substantially all assets of Holdings and its subsidiaries. The Issuer will not be a party to the new credit facilities. The new credit facilities will contain restrictions on ASG’s ability to make distributions to Holdings and the Issuer. Such distributions are the projected sources of cash to allow the Issuer to make interest and dividend payments to IDS holders. We expect that the new credit facilities will mature on December 31, 2008. CIBC World Markets Corp., the lead underwriter of this offering, is also the sole placement agent, lead arranger and bookrunner of the new credit facilities. The closing of this offering is conditioned upon the closing of the proposed new credit facilities. See “Use of Proceeds” and “Description of Certain Indebtedness—New Credit Facilities.”

Existing Senior Subordinated Notes

In conjunction with this offering, ASG commenced a consent solicitation with respect to its outstanding $175.0 million 10¹/8% senior subordinated notes due 2010, which we refer to as our “existing senior subordinated notes” and a tender offer for such notes. As of April 30, 2004, all of our existing senior subordinated notes had been validly and irrevocably tendered. The tender offer will expire on May 3, 2004, unless we extend it. ASG intends to use a portion of the net proceeds from this offering and borrowings under the new credit facilities (1) to acquire our existing senior subordinated notes in the tender offer and (2) to pay fees, expenses and premiums associated with the consent solicitation and tender offer. The closing of the consent solicitation

and tender offer is conditioned on the consummation of this offering. Credit Suisse First Boston is the dealer manager of the tender offer and the solicitation agent in the consent solicitation.

The Transactions

Prior to and in connection with this offering, we will consummate various internal restructuring and realignment transactions to rationalize our existing structure and recapitalize ASLP’s equity interest in Holdings into an interest consisting of part equity and part notes issued by Holdings. In this offering, we expect that the Issuer will sell 33,536,585 IDSs and $33.1 million aggregate principal amount of % notes separately (not represented by IDSs). The completion of the offering of separate notes is a condition to our sale of IDSs. In addition, we expect that the Issuer will issue 1,646,099 IDSs to certain indirect holders of equity interests in Holdings as partial consideration for the exchange of those interests. The Issuer will become the managing general partner of Holdings.

In addition, in connection with the offering, the Issuer will recapitalize its capital stock into Class A common stock (which will be held by ASLP). ASLP will promptly distribute the 4,406,849 shares of Class A common stock to its partners. The Class A common stock will be exchangeable for IDSs after the second anniversary of the offering, subject to certain restrictions. If all such Class A common stock were exchanged, the holders of our Class A common stock would receive an aggregate of 2,848,329 IDSs representing 2,848,329 shares of the Issuer’s common stock and $16.5 million aggregate principal amount of notes. The Class A common stock will have one vote per share but will receive dividends at a higher rate than our common stock. See “Description of Capital Stock—Common Stock” and “Related Party Transactions—Agreements Relating to ASLP, Holdings and our Class A Common Stock.”

After giving effect to the offering and these transactions, the public IDS holders will hold approximately 65.2% of the economic interests in Holdings and the current direct or indirect owners will hold the remaining 34.8%.

In connection with the offering, the Issuer will issue to all ASLP partners and option holders exchange warrants permitting such holders, following the first anniversary of the closing of this offering, and subject to various conditions, to exchange their regular ASLP limited partnership units for IDSs. Upon any such exchange, the Issuer would then have the right to exchange the ASLP units received by it for equity interests in Holdings and Holdings notes. See “Related Party Transactions—Exchange and Registration Rights Agreement.” If all such exchange warrants, other than those associated with compensatory options, were exercised in full, the ASLP partners and option holders would receive an aggregate of 13,368,036 IDSs representing 13,368,036 shares of the Issuer’s common stock and $77.5 million aggregate principal amount of notes.

In addition, immediately following this offering, we will have outstanding one share of each of our Series A, Series B and Series C preferred stock, which will be held by Coastal Villages Pollock LLC, Bernt O. Bodal and Centre Partners Management LLC, respectively, or by their respective affiliates. The Series A preferred share will entitle Coastal to elect two members of our board of directors until Coastal’s direct and indirect ownership of Holdings falls below specified levels and one member of our board of directors thereafter, until such ownership falls below lower levels. The Series B and Series C preferred shares will entitle Mr. Bodal and Centre, respectively, to elect one director until their ownership falls below specified levels. The holders of the preferred stock will in effect be entitled to vote their ASLP units as though they were exchanged for IDSs. The preferred shares, the Class A common shares and the common shares will vote together as a class on all matters presented to the stockholders for a vote. In addition, holders of preferred shares will have class voting and other rights, including veto rights over compensation decisions and governance arrangements, all of which are described more fully elsewhere in this prospectus. See “Description of Capital Stock—Common Stock” and “Description of Capital Stock—Preferred Stock.”

For a detailed outline of our restructuring and realignment transactions, see “Detailed Transaction Steps.”

Use of Proceeds

We expect to receive net proceeds from this offering of approximately $554.6 million after underwriting

discounts, assuming an initial public offering price of $16.40 per IDS, which represents the mid-point of the range set forth on the cover page of this prospectus and an initial public offering price of % of the stated principal amount for each note sold separately (not represented by IDSs). These proceeds, together with approximately $245.0 million in borrowings we expect to receive under the new credit facilities, will be used to repay substantially all of our outstanding indebtedness and repurchase certain equity interests held by the existing owners of our business. Accordingly, none of the proceeds of this offering will be available for the growth of our business or for general corporate purposes.

The following chart reflects our capital structure immediately following this offering assuming no exercise of the over-allotment option to purchase additional IDSs:

LOGO

The Issuer was formed as a holding company under Delaware law in May 2003 and has not conducted any independent operations. Following this offering, Holdings will own 100% of the economic interests in ASG. The Issuer will not have direct operations but, as the sole general partner of Holdings, will have management responsibility for Holdings and its subsidiaries, including ASG.

Our principal executive office is located at Market Place Tower, 2025 First Avenue, Suite 1200, Seattle, Washington 98121, and our telephone number is (206) 374-1515. Our internet address is www.americanseafoods.com. www.americanseafoods.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.

The Offering

Summary of the IDSs and the Notes

We are offering 33,536,585 IDSs at an initial public offering price of $16.40 per IDS (comprised of $5.80 allocated to each note and $10.60 allocated to each share of common stock), which represents the mid-point of the range set forth on the cover page of this prospectus, and $33.1 million aggregate principal amount of notes sold separately (not represented by IDSs) at an initial public offering price of % of the stated principal amount for each note. As described below, assuming we make our scheduled interest payments and pay dividends in the amount contemplated by our current dividend policy, holders of IDSs will receive in the aggregate approximately $1.60 per year in dividends and interest on the common stock and notes represented by each IDS, and holders of our notes will receive $0.725 per year in interest per note.

What are IDSs?

IDS are securities comprised of common stock and notes. Each IDS represents:

one share of our common stock; and

a % note with $5.80 principal amount.

The ratio of common stock to principal amount of 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 common stock and the same principal amount of notes as it previously represented. Likewise, if we effect a recombination or reclassification of our common stock, each IDS will thereafter represent the appropriate number of shares of common stock on a recombined or reclassified basis, as applicable, and the same principal amount of notes as it previously represented.

What payments can I expect to receive as a holder of IDSs?

You will be entitled to receive quarterly interest payments at an annual rate of % of the aggregate principal amount of notes represented by your IDSs or approximately $0.725 per IDS per year, subject to our right, under specified circumstances, to defer interest payments on the Issuer’s notes for no more than 8 quarters in the aggregate and no later than , 2009; and subject further to our right, on up to two occasions for not more than 3 quarters on any occasion after , 2009, to defer interest payments on the Issuer’s notes; unless, in each case, a default in payment of interest, principal or premium, if any, on the notes has occurred and is continuing, or any other 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.

You will also receive quarterly dividends on the shares of our common stock represented by your IDSs, if and to the extent dividends are declared by our board of directors and are permitted by applicable law and the terms of our then existing indebtedness. The indenture governing the notes contains restrictions on our ability to declare and pay dividends on our common stock. We have adopted a dividend policy which contemplates that initial annual dividends will be approximately $0.875 per share of our common stock. However, our board of directors may, in its discretion, modify or repeal our dividend policy. We cannot assure you that we will pay dividends at this level in the future or at all.

We expect to make interest and dividend payments on or about the 15th day of each March, June, September and December to holders of record on the 5th day of such month or the immediately preceding business day. The cash used to make such interest and dividend payments is expected to come from interest payments and distributions by Holdings, and those are expected to be funded out of distributions made to Holdings by ASG. The new credit facilities will contain provisions limiting ASG’s ability to make distributions to Holdings in the event various financial tests are not met. See “Description of Certain Indebtedness—New Credit Facilities—Permitted Distributions by ASG and Holdings.”

Will my rights as a holder of IDSs be any different than the rights of a direct holder of the common stock and notes?

No. As a holder of IDSs you are the beneficial owner of the common stock and notes represented by your IDSs. As such, 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 notes indenture, ranking upon bankruptcy and rights to receive communications and notices as a direct holder of the common stock and notes, as applicable.

Will the notes represented by IDSs be the same as the notes sold separately (not represented by IDSs)?

Yes. The notes sold separately (not represented by IDSs) will be identical in all respects to the notes represented by IDSs and will be part of the same series of notes issued under the same indenture. Accordingly, holders of notes sold separately and holders of notes represented by IDSs will vote together as a single class, in proportion to the aggregate principal amount of notes they hold, on all matters on which they are eligible to vote under the indenture.

Will the IDSs be listed on an exchange?

Yes. We have applied to list the IDSs on the American Stock Exchange under the trading symbol “SEA”.

Will the notes and shares of our common stock be listed on an exchange?

The notes will not be listed on any exchange. Our shares of common stock will not be listed for separate trading on the American Stock Exchange until the number of shares of common stock held separately and not represented by IDSs is sufficient to satisfy applicable requirements for separate trading on such exchange. If more than such number of our outstanding shares of common stock is no longer held in the form of IDSs for a period of 30 consecutive trading days, we will apply to list the shares of our common stock for separate trading on the American Stock Exchange. The notes and shares of our common stock will be freely tradable without restriction or further registration under the Securities Act, unless they are purchased by “affiliates” as that term is defined in Rule 144 under the Securities Act of 1933.

In what form will IDSs and the securities represented by the IDSs be issued?

The IDSs and the securities 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 be entitled to 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.

How can I separate my IDSs into shares of common stock and notes or combine shares of common stock and notes to form IDSs?

Holders of IDSs, whether purchased in this offering or in subsequent offerings of IDSs of the same series, may, at any time after the earlier of 45 days from the closing of this offering or the occurrence of a change of control, through a broker or other financial institution, separate each of their IDSs into the shares of common stock and notes represented thereby. Similarly, any holder of shares of our common stock and notes may, at any time, through a broker or other financial institution, combine the applicable number of shares of common stock and notes to form IDSs unless the IDSs have previously been automatically separated as a result of the redemption or maturity of any notes or otherwise. Separation and recombination of IDSs may involve transaction fees charged by your broker and/or other financial intermediaries. See “Description of IDSs—Book Entry, Settlement and Clearance—Separation and Recombination.”

What will happen if we issue additional IDSs or notes of the same series in the future?

We may conduct future financings by selling additional IDSs of the same series. Additional IDSs will have terms that are identical to those of the IDSs being sold in this offering, except that if they are issued 45 days or more from the closing of this offering, they will be immediately separable, and if they are issued less than 45 days from the closing of this offering, they will be separable on the same date as the IDSs issued hereunder may separate. Additional IDSs will also represent the same proportions of common stock and notes as are represented by the then outstanding IDSs. In addition, we will be required to issue additional IDSs in the future upon the exercise of exchange or registration rights by our existing owners and upon exchange of our Class A common stock. In addition, we may conduct future financings by selling additional notes of the same series. Although the notes that may be issued in the future (whether or not represented by IDSs) will have terms that are substantially identical (except for the issuance date) to the notes being sold in this offering and will be part of the same series of notes for all purposes under the indenture, it is possible that the new notes will be sold with original issue discount (referred to as OID) for U.S. federal income tax purposes. If such notes are issued with OID, all holders of IDSs of the same series (including the IDSs being offered hereby) and of outstanding notes not held in IDSs will automatically exchange a ratable portion of their outstanding notes for a portion of the new notes, whether held directly or in the form of IDSs, and will thereafter hold a unit consisting of new notes and old notes with a new CUSIP number or a new IDS (consisting of such note unit and common stock) with a new CUSIP number. As a result of such exchanges, we intend to allocate and report the OID associated with the sale of the new notes among all holders of notes on a pro rata basis, which may adversely affect your tax treatment. See “What will be the U.S. federal income tax considerations in connection with a subsequent issuance of notes?” In addition, if such notes are issued with OID, holders of such notes may not be able to recover the portion of their principal amount treated as unaccrued OID in the event of an acceleration of the notes or a bankruptcy of the Issuer prior to the maturity of the notes. See “Risk Factors—Subsequent issuances of notes pursuant to an offering by us or following an exercise of exchange or registration rights by partners of ASLP or exchange of Class A common stock may cause you to recognize original issue discount” and “—Holders of Subsequently Issued Notes may not be able to collect their full stated principal amount prior to maturity.”

We will immediately file a Current Report on Form 8-K (or any other applicable form) to announce and quantify any changes in the ratio of IDS components or changes in OID attributed to the notes.

What will be the U.S. federal income tax considerations in connection with an investment in the IDSs?

Certain aspects of the U.S. federal income tax consequences of the purchase, ownership and disposition of IDSs in this offering are not entirely clear. The purchase of IDSs in this offering should be treated as the purchase of shares of our common stock and notes and, by purchasing IDSs, you will agree to such treatment. You must allocate the purchase price of the IDSs between those shares of common stock and notes in proportion to their respective initial fair market values, which will establish your initial tax basis. We expect to report the initial fair market value of each share of common stock as $10.60 and the initial fair market value of each $5.80 aggregate principal amount of our notes as $5.80 and, by purchasing IDSs, you will agree to and be bound by such allocation, assuming an initial public offering price of $16.40 per IDS, which represents the mid-point of the range set forth on the cover page of this prospectus.

We believe that the notes should be treated as debt for U.S. federal income tax purposes. If the notes were treated as equity rather than debt for U.S. federal income tax purposes, then the stated interest on the notes could be treated as a dividend, and interest on the notes would not be deductible by us for U.S. federal income tax purposes, which could materially increase our taxable income and significantly reduce our future cash flow. In addition, payments on the notes to foreign holders would be subject to U.S. federal withholding taxes at rates of up to 30%. Payments to foreign holders would not be grossed-up on account of any such taxes.

Dividends paid by us, to the extent paid out of our tax “earnings and profits,” will generally be taxable to you at long-term capital gains rates under recently-enacted legislation, which is scheduled to sunset in 2008. Interest income on the notes will generally be taxable to you at ordinary income rates. See “Material U.S. Federal Income Tax Considerations.”

What will be the U.S. federal income tax considerations in connection with a subsequent issuance of notes?

The U.S. federal income tax consequences to you of the subsequent issuance of notes with OID (or any issuance of notes thereafter) upon a subsequent sale of IDSs or notes pursuant to an offering by us, upon an exercise of exchange or registration rights by partners of ASLP or upon exchange of our Class A common stock are not entirely clear. The indenture governing the notes and the agreements with the Depository Trust Company, or DTC, will provide that, in the event there is a subsequent issuance of notes by the Issuer having substantially identical terms as the notes, each holder of notes or IDSs (as the case may be) agrees that a portion of such holder’s notes will be automatically exchanged for a portion of the notes acquired by the holders of such subsequently issued notes, and the records of any record holders of notes will be revised to reflect such exchanges. Consequently, following each such subsequent issuance and exchange, without any further action by such holder, each holder of notes or IDSs (as the case may be) will own an indivisible unit composed of notes of each separate issuance in the same proportion as each other holder (and, for any such holder of IDSs, such indivisible unit composed of notes will be included in such holder’s IDSs). However, the aggregate stated principal amount of notes owned by each holder will not change as a result of such subsequent issuance and exchange. It is unclear whether the exchange of notes for subsequently issued notes results in a taxable exchange for U.S. federal income tax purposes, and it is possible that the Internal Revenue Service, or the IRS, might successfully assert that such an exchange should be treated as a taxable exchange. Even if the exchange is not treated as a taxable event, such exchange may result in holders having to include OID in taxable income prior to the receipt of cash and other potentially adverse U.S. federal income tax consequences to holders. Because a subsequent issuance will affect the notes in the same manner regardless of whether the notes are held as part of IDSs or directly, the recombination of notes and shares of common stock to form IDSs or the separation of IDSs should not affect your tax treatment. See “Material U.S. Federal Income Tax Considerations.”

Following any subsequent issuance of notes with OID (or any issuance of notes thereafter) and resulting exchange, we (and our agents) will report any OID on the subsequently issued notes ratably among all holders of notes and IDSs, and each holder of notes and IDSs will, by purchasing IDSs, agree to report OID in a manner consistent with this approach. However, the IRS may assert that any OID should be reported only to the persons that initially acquired such subsequently issued notes (and their transferees) and thus may challenge the holders’ reporting of OID on their tax returns. Such a challenge could create significant uncertainties in the pricing of IDSs and notes and could adversely affect the market for IDSs and notes.

Because there is no statutory, judicial or administrative authority directly addressing the tax treatment of the IDSs or instruments similar to the IDSs, we urge you to consult your own tax advisor concerning the tax consequences of an investment in the IDSs. For additional information, see “Material U.S. Federal Income Tax Considerations.”

Summary of the Notes

Issuer

American Seafoods Corporation.

Notes to be outstanding following the offering

$237.2 million aggregate principal amount of % notes, which includes $204.1 million aggregate principal amount of notes included in IDSs and $33.1 million aggregate principal amount sold separately (not represented by IDSs) (or $263.2 million aggregate principal amount assuming the underwriters’ over-allotment option to purchase additional IDSs is exercised in full). Each offered note will have a principal amount of $5.80.

Interest rate

% per year.

Interest payment dates

Interest will be paid quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, commencing , 2004 to holders of record on the 5th day of such month or the immediately preceding business day.

Interest deferral

We will be permitted to defer interest payments on the notes if and for so long as the most recently calculated interest coverage ratio of Holdings for the twelve-month period ended on the last day of any fiscal quarter is less than the applicable interest deferral threshold described under “Description of Notes—Certain Definitions,” unless, in each case, a default in payment of interest, principal or premium, if any, on the notes has occurred and is continuing, or any other 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. Interest payments will not be deferred under this provision for more than 8 quarters in the aggregate or at any time after , 2009. In addition, on up to two occasions after , 2009, interest payments on the notes may again be deferred, at our option, unless a default in payment of interest, principal or premium, if any, has occurred and is continuing, or any other 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. Interest payments will not be deferred under this provision for more than 3 quarters on any occasion. Deferred interest on the notes will bear interest at an annual rate of %, which will be payable quarterly in arrears so long as no subsequent interest deferral is in effect. We will repay all interest deferred prior to , 2009 on , 2009. We may prepay deferred interest at any time, except when an interest deferral period is in effect. We will repay all interest deferred after , 2009 and on or before maturity, provided that we must pay all deferred interest and accrued interest on deferred interest in full prior to deferring interest for a second occasion or paying any dividends on our common shares.

If interest payments on the notes are deferred, you would be required to include 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.

Maturity date

The notes will mature on June 15, 2019, provided, that if the total leverage ratio of Holdings for the year ending December 31, 2013 is greater than to 1.00, then the notes shall automatically mature on December 31, 2014.

Ranking

The notes will be senior secured indebtedness of the Issuer and will rank pari passu in right of payment with all existing and future unsubordinated obligations, including trade payables, of the Issuer. As of December 31, 2003, after giving pro forma effect to this offering and the use of proceeds as contemplated in this prospectus, the Issuer had no indebtedness other than the notes. Because the Issuer is a holding company, the notes will be structurally subordinated to all indebtedness of the Issuer’s subsidiaries that do not guarantee the notes.

Acceleration Forbearance Periods

So long as the notes are guaranteed by at least one of the guarantors and until the earlier of , 2009 or the time when no designated senior indebtedness of any guarantors is outstanding, without in any way limiting the right of holders to exercise any other remedies they may have (including the right to bring suit against the Issuer or any guarantor for payment of all amounts of principal, premium and interest due and payable), upon the occurrence of an event of default (other than bankruptcy defaults), the principal of the notes may not be accelerated for a period of up to 90 days (subject to earlier termination in certain circumstances). See “Description of Notes—Acceleration Forbearance Periods.”

Note guarantees

The notes will be guaranteed by Holdings, ASG and its domestic subsidiaries on an unsecured subordinated basis on the terms set forth in the indenture. The note guarantees will be subordinated in right of payment to all existing and future senior indebtedness of the guarantors that does not expressly provide that it ranks pari passu with or subordinate to the guarantees, including indebtedness and guarantees of Holdings, ASG and its subsidiaries under our new credit facilities and interest rate and foreign exchange related derivatives entered into with the lenders under the new credit agreement (or their affiliates). The note guarantees issued by ASG and its subsidiaries will rank senior to our existing senior subordinated notes, if any, outstanding after the consummation of this offering, and related guarantees of such notes by ASG’s subsidiaries, and to all existing and future debt of our subsidiaries that expressly provides that it is subordinated to the guarantees. As of April 30, 2004, all of our existing senior subordinated notes had been validly and irrevocably tendered. The tender offer will expire on May 3, 2004, unless we extend it. See “Description of Notes—Guarantees and Pledge.”

As of December 31, 2003, after giving pro forma effect to this offering and the other transactions contemplated in this prospectus, including the tender offer and consent solicitation and the new credit facilities as well as the use of proceeds as contemplated in this prospectus, the guarantors had approximately $576.2 million of indebtedness, excluding trade payables, of which $245.0 million was indebtedness under our new credit facilities and other senior indebtedness of the guarantors.

Collateral

The Issuer will pledge all of its interest in the Holdings notes and related guarantees as security for the notes. We will be required to provide additional collateral of the same type if we issue additional notes in the future. The notes will not otherwise be secured, directly or indirectly.

Optional redemption

We may not redeem the notes prior to , 2011.

On and after June 15, 2011 and prior to June 15, 2016, we may redeem for cash all or part of the notes upon not less than 30 or more than 60 days’ notice by mail to the owners of notes, at a make-whole redemption price described under “Description of Notes—Optional Redemption.” After June 15, 2016 we may redeem the notes upon not less than 30 or more than 60 days notice by mail to the holders of notes at a redemption price of 100% of the principal amount to be redeemed. If we redeem the notes in whole or in part, the notes and common stock represented by each IDS will be automatically separated and cannot thereafter be recombined.

Change of control

Upon the occurrence of a change of control, as defined under “Description of Notes—Change of Control,” unless we have exercised our right to redeem all notes as described above, each holder of the notes will have the right to require us to repurchase that holder’s notes at a price equal to 101% of the principal amount of the notes being repurchased, plus any accrued but unpaid interest to the date of repurchase. To exercise this right, a holder of IDSs must separate the notes and common stock represented by such holder’s IDSs.

Procedures relating to subsequent issuances

The indenture governing the notes will provide that, in the event there is a subsequent issuance of notes by the Issuer having substantially identical terms as the notes but a different CUSIP number, each holder of notes or 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 automatically exchanged for a portion of the notes purchased by the holders of such subsequently issued notes, and the records of any record holders of notes will be revised to reflect such exchanges. Consequently, following each such subsequent issuance and automatic exchange, without any action by such holder, each holder of notes or IDSs (as the case may be) will own an

indivisible unit composed of notes of each separate issuance in the same proportion as each other holder. However, the aggregate stated principal amount of notes owned by each holder will not change as a result of such subsequent issuance and exchange.

The indenture governing the notes will permit issuances of additional notes upon the exercise of exchange warrants or registration rights by holders of ASLP units, upon the exchange of Class A common stock into IDSs and, subject to compliance with restrictive covenants contained in the indenture, for other permitted purposes. However, we may not issue additional notes if and for so long as an event of default with respect to the notes has occurred and is continuing. The automatic exchange of notes summarized above should not impair the rights any holder would otherwise have to assert a claim under applicable securities laws against the Issuer or any of its agents, including the underwriters, with respect to the full amount of notes purchased by such holder. However, any subsequent issuance of notes by the Issuer may adversely affect the tax and non-tax treatment of the holders of notes and IDSs. See “Risk Factors—Subsequent issuances of notes pursuant to an offering by us or following an exercise of exchange or registration rights by partners of ASLP or exchange of Class A common stock may cause you to recognize original issue discount” and “—Holders of subsequently issued notes may not be able to collect their full stated principal amount prior to maturity” and “Material U.S. Federal Income Tax Considerations—Exchange Rights and Additional Issuances.”

Restrictive covenants

The indenture governing the 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;

dividends or distributions on or redemptions 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;

consolidations, mergers and transfers of all or substantially all of our assets; and

certain restrictions on distributions from our restricted subsidiaries.

The limitations and prohibitions described above are subject to a number of other important qualifications and exceptions described under “Description of Notes—Certain Covenants.”

Intercompany Notes

The aggregate principal amount of the notes issued in the offering, including notes sold in the form of IDSs and notes sold separately (not represented by IDSs), will be approximately $237.2 million (or $263.2 million if the underwriters’ over-allotment option to purchase additional IDSs is exercised in full). The Issuer will lend $253.7 million (or $279.7 million if the underwriters’ over-allotment option to purchase additional IDSs is exercised in full) to Holdings pursuant to subordinated intercompany notes, which we refer to as the “Holdings notes” or the “intercompany notes.” Holdings will also issue identical intercompany notes to ASLP in redemption of a portion of the Holdings’ equity interests held by ASLP and may issue notes to ASLP in the future. The Holdings notes will be unsecured subordinated indebtedness of Holdings and will have the same payment and interest terms and substantially similar other provisions as the notes and contain cross-default provisions such that an event of default under the notes will trigger an event of default under the Holdings notes. The Holdings notes will be guaranteed by ASG and its domestic subsidiaries on the same basis as the notes. The Issuer will pledge all of its interest in the Holdings notes to secure the notes as described above. See “Description of Certain Indebtedness —Holdings Intercompany Notes.”

Summary of the Capital Stock

Issuer

American Seafoods Corporation.

Shares of common stock represented by IDSs offered in this offering

33,536,585 shares of common stock (or 38,567,073 shares of common stock assuming the underwriters’ over-allotment option is exercised in full).

Shares of common stock, Class A common stock and Class B common stock outstanding following this offering

35,182,684 shares of common stock (or 39,661,646 shares assuming the underwriters’ over-allotment option to purchase additional IDSs is exercised in full), which include 33,536,585 shares of common stock sold in this offering and 1,646,099 shares issued to certain of our existing equity investors upon consummation of this offering in connection with our internal restructuring and realignment transactions.

4,406,849 shares of Class A common stock which will be exchangeable for IDSs at any time, subject to certain conditions, after two years from the closing of this offering at an exchange rate of one IDS for each 1.547 shares of Class A common stock. If all such shares of Class A common stock were exchanged for IDSs, the holders of our Class A common stock would receive an aggregate of 2,848,329 IDSs representing 2,848,329 shares of the Issuer’s common stock and $16.5 million aggregate principal amount of notes.

Our common stock and Class A common stock are identical in all respects and are entitled to the same rights, preferences and privileges, and vote together as a single class on all matters upon which the stockholders vote, except (1) as to dividend rights as described under “Dividend Policy and Restrictions,” (2) that Class A common stock is not eligible to be included in IDSs and (3) that holders of Class A common stock may, subject to certain conditions, exchange their shares of Class A common stock for IDSs. See “Related Party Transactions—Agreements Relating to ASLP, Holdings and Our Class A Common Stock—Exchange and Registration Rights Agreement.” In addition, our by-laws provide that we may not issue any shares of common stock, or securities which, by their terms, are convertible or exchangeable for shares of common stock, unless, at or prior to the time of such issuance (or prior to the earliest possible time of any conversion or exchange) we issue a proportionate number of IDSs such that no holder of common stock will at any time have the right to hold common stock in the form of IDSs, unless such IDSs have been issued in transactions that are registered under the Securities Act of 1933. In addition, our Class A common stock may not be combined with notes to form IDSs.

No shares of Class B common stock will be outstanding upon the closing of this offering.

Shares of preferred stock outstanding following this offering

3 shares of preferred stock will be outstanding following the closing of this offering. The Issuer will issue one share of its Series A, Series B and Series C preferred stock respectively to, Coastal Villages Pollock LLC, Bernt O. Bodal and Centre Partners Management LLC.

The Series A preferred share will entitle Coastal to elect two members

of our board of directors until Coastal’s direct and indirect ownership of Holdings falls below specified levels and one member of our board of directors thereafter, until such ownership falls below lower levels. The Series B and Series C preferred shares will entitle Mr. Bodal and Centre, respectively, to elect one director of our board of directors until their ownership falls below specified levels. The preferred shares and the common shares will vote together as a class on all matters presented to the stockholders for a vote and, in any such vote, each share of preferred stock will be entitled to an aggregate number of votes equal to the number of shares of our common stock which the holder (together with certain affiliated parties) would be entitled to receive on an exchange or deemed exchange of its ASLP or Holdings units for IDSs. In addition, holders of preferred shares will have class voting and other rights, including rights to approve certain compensation matters and changes in our governance provisions, as described more fully elsewhere in this prospectus. See “Description of Capital Stock—Common Stock” and “Description of Capital Stock—Preferred Stock.”

Dividends

We will pay quarterly dividends on the shares of our common stock represented by your IDSs and on the shares of our Class A 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 existing indebtedness. We have adopted a dividend policy which contemplates that initial annual dividends will be approximately $0.875 per share of our common stock and approximately $1.034 per share of our Class A common stock. However, our board of directors may, in its discretion, modify or repeal our dividend policy. We cannot assure you that we will pay dividends at this level in the future or at all.

Our certificate of incorporation provides that on or after , 2006, the per share dividend rate on the Class A common stock will thereafter not exceed the per share dividend rate of the common stock under our dividend policy then in effect.

We expect to make dividend payments on or about March 15, June 15, September 15 and December 15 of each year, commencing , 2004 to holders of record on the 5th day of such month or the immediately preceding business day.

Holders of the preferred shares will not be entitled to receive dividends or distributions.

See “Dividend Policy and Restrictions.”

Voting rights

Subject to applicable law, each outstanding share of our common stock and our Class A common stock will carry one vote per share and each share of our preferred stock will be entitled to an aggregate number of votes equal to the number of shares of our common stock which the holder (together with certain affiliated parties) would be entitled to receive on an exchange or deemed exchange of its ASLP or Holdings units for IDSs.

Listing

Our shares of common stock will not be listed for separate trading on the American Stock Exchange until the number of shares of common stock held separately and not represented by IDSs is sufficient to satisfy applicable requirements for separate trading on such exchange. If such number of our outstanding shares of common stock is no longer held in the form of IDSs for a period of 30 consecutive trading days, we will apply to list the shares of our common stock for separate trading on the American Stock Exchange. The shares of common stock will be freely tradable without restriction or further registration under the Securities Act, unless they are purchased by “affiliates” as that term is defined in Rule 144 under the Securities Act of 1933.

Foreign ownership provisions

We are subject to complex foreign ownership limitations applicable to companies that participate in U.S. fisheries. We will put in place governance provisions (i) requiring each owner of 5% or more of the Issuer’s capital stock (including purchasers in this offering) to certify to us that such person is a U.S. citizen within the meaning of applicable statutory provisions, (ii) limiting to 20% the aggregate percentage ownership of the Issuer’s capital stock by non-U.S. citizens, (iii) requiring that at least 95% of all of the Issuer’s capital stock be held by beneficial owners with U.S. addresses, and (iv) declaring any holding in violation of the foregoing null and void, or voidable, and providing the Issuer with various remedies including mandatory redemptions and sales. See “Business—Government Regulation.”

Equity interest in Holdings

The Issuer will be the sole general partner of Holdings and, through Holdings, will have management control of all of its subsidiaries. Three wholly-owned subsidiaries of the Issuer will hold limited partnership interests in Holdings. The Issuer’s direct and indirect interests in Holdings at the closing of this offering will constitute 74.0% of the equity of Holdings. The balance of the equity of Holdings will be held by ASLP.

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 and notes.

General Information About This Prospectus

Unless we specifically state otherwise, the information and computations in this prospectus:

do not take into account the exercise by the underwriters of their over-allotment option to purchase additional IDSs;

assume (i) the purchase of all of our existing senior subordinated notes pursuant to the consent solicitation and tender offer for aggregate consideration of $210.2 million, (ii) a 12.5% interest rate on the notes, which is subject to change depending on market conditions and (iii) an initial public offering price of $16.40 per IDS (comprised of $5.80 allocated to each note and $10.60 allocated to each share of common stock); and

do not take into account the exercise by members of our management of compensatory options to acquire interests in ASLP that, if exercised, would cause ASLP to receive additional interests in Holdings, resulting in dilution for all holders of IDSs and ASLP units. If all of such options were exercised immediately following the offering, the Issuer’s percentage ownership in Holdings would decline from 74.0% to 69.9%.

Following the liquidation of ASLP, which will occur on or about the fourth anniversary of this offering, former ASLP unitholders will, subject to certain conditions, receive Holdings equity and notes in exchange for their interest in ASLP.

Unless the context otherwise requires, references in this prospectus to the “notes” refer collectively to the notes represented by IDSs and the notes sold separately, and references to the “offering” refer collectively to the offering of 33,536,585 IDSs to the public and 1,646,099 IDSs to certain of our affiliates and members of management, in each case, including the shares of common stock and notes represented thereby, and the offering of $33.1 million aggregate principal amount of notes to the public separately (not represented by IDSs).

Summary Consolidated Financial Information

The following summary historical consolidated financial information for Holdings for the years ended December 31, 2001, 2002 and 2003 has been derived from our audited consolidated financial statements included elsewhere in this prospectus. The following summary pro forma financial information has been derived by the application of pro forma adjustments to the Issuer’s historical consolidated financial statements included elsewhere in this prospectus. The summary pro forma consolidated balance sheet and statement of operations data gives effect to the financing transactions described under “Capitalization” and the application of the proceeds therefrom as if the Issuer was formed and all these transactions had been consummated on December 31, 2003 for the consolidated balance sheet data and January 1, 2003 for the consolidated statement of operations data.

Assumptions underlying the pro forma adjustments are described in the notes to the unaudited pro forma condensed consolidated financial statements, which should be read in conjunction with this summary pro forma financial information. We believe that the assumptions used provide a reasonable basis for presenting the significant effects directly attributable to these transactions; however, this summary pro forma financial information should not be considered indicative of actual results that would have been achieved had the financing transactions been consummated on the date or for the periods indicated and do not purport to indicate consolidated balance sheet data or results of operations as of any future date or for any future period.

This summary pro forma financial information should be read in conjunction with the information contained in “Selected Historical and Pro Forma Financial Information for Holdings,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Holdings’ consolidated financial statements and related notes included elsewhere in this prospectus.


	Year Ended(1)(2) December 31,									Pro Forma Issuer
	Year Ended(1)(2) December 31,									Year Ended December 31,
	2001			2002			2003			2003
	(dollars in thousands)
Statement of Operations Data:
Total revenue	$	336,839		$	332,872		$	411,363		$	411,363
Gross profit		127,239			126,481			132,066			132,066
Gross margin		37.8	%		38.0	%		32.1	%		32.1	%
Operating profit		35,436			58,975			62,895			62,895
Income before income taxes and minority interest		18,009			22,611			14,327			4,492
Net income		20,078			22,253			12,527			4,313
Statement of Cash Flows Data:
Cash flows from operating activities	$	84,588		$	96,678		$	47,154
Cash flows from investing activities		(13,648	)		(58,634	)		(14,652	)
Purchases of property, vessels and equipment		(9,171	)		(9,431	)		(12,323	)
Cash flows from financing activities		(73,014	)		(34,736	)		(32,399	)
Other Financial Data:
EBITDA(3)	$	121,385		$	102,865		$	101,023		$	101,023
Adjusted EBITDA(3)		108,765			113,012			113,087			113,087


	December 31, 2003			Pro Forma December 31, 2003
	(dollars in thousands)
Balance Sheet Data:
Current assets	$	119,126		$	119,127
Current liabilities		64,489			41,419
Property, vessels and equipment, net		225,971			225,971
Cooperative rights, net		81,831			81,831
Total assets		527,524			508,557
Total interest bearing obligations		555,749			559,718
Members deficit		(157,265	)		(177,005	)

(1)	Effective January 1, 2002, we changed our method of accounting for goodwill and other intangible assets. See Note 1 to the consolidated financial statements.

(2)	In October 2001, we reassessed the estimated useful lives of cooperative fishing rights increasing the amortization period. See Note 1 to the consolidated financial statements.

(3)

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.

We consider EBITDA to be a measure of liquidity. Accordingly, EBITDA is reconciled to operating cash flows as follows:


	Year Ended December 31,
	2001			2002			2003
	(dollars in thousands)

Cash flows from operating activities	$	84,588		$	96,678		$	47,154
Interest expense, net of non-cash interest		18,715			34,348			34,958
Net change in operating assets and liabilities		899			(15,077	)		29,886
Income tax provision (benefit)		(1,898	)		759			1,621
Deferred income tax provision (benefit)		6,607			(3,696	)		(1,202	)
Unrealized foreign exchange gains/losses, net		12,976			10,763			(10,915	)
Equity-based compensation		(527	)		(5,600	)		(672	)
Loss from debt repayment and related write-offs		—			(15,711	)		—
Other		25			401			193

EBITDA	$	121,385		$	102,865		$	101,023

Interest and Dividend Payments to IDS Holders

The table below shows certain information relating to our available cash in 2003 on a pro forma basis for the Issuer, reconciles Adjusted EBITDA to available cash, and shows the amount available for dividends as restricted by the new credit facilities. This information is presented assuming that this offering and related transactions contemplated by this prospectus had occurred on January 1, 2003 and that all ASLP units had been exchanged for IDSs on such date. The computation of available cash is based upon the definition of available cash contained in the new credit facilities. Available cash and Adjusted EBITDA are not measures determined in accordance with GAAP. Adjusted EBITDA is fully described and reconciled to our cash flows from operating activities under “Summary Consolidated Financial Information.” We present these non-GAAP financial measures here because they represent the maximum amount of dividends on our capital stock, including our common stock and Class A common stock, that we are allowed to declare and pay pursuant to the anticipated restricted payments covenant under the new credit facilities.

The information below is not intended to reflect our historical or future financial performance, financial position or cash-flow and is based upon certain assumptions and estimates made by management. Estimates and assumptions are, by their nature, subjective and, therefore, the information presented below is not necessarily indicative of amounts that would have been available for the payment of dividends during the period presented.


	Pro Forma Issuer
	Year Ended December 31, 2003
	(in thousands)
Adjusted EBITDA(1)	$	113,087
Cash interest expense on new credit facilities(2)		(11,912	)
Annual maintenance capital expenditures(3)		(9,500	)
Estimated additional public company administrative expenses(4)		(750	)

Available cash, as defined in our new credit facilities(5)		90,925
Interest expense on notes(6)		(39,340	)
Aggregate permitted dividends per dividend policy(7):
Dividends on shares of common stock		(42,482	)
Dividends on Class A common stock		(4,557	)

Amount of available cash in excess of interest expense on notes and maximum allowable dividend payments(8)	$	4,546

(1)

Adjusted EBITDA as defined in our note indenture and new credit facilities means net income from continuing operations before interest expense, income tax provision or benefit, depreciation, amortization, net unrealized foreign exchange gains or losses, net gains and losses from derivatives relating to our equity and debt, minority interest in income or loss of consolidated entities, equity-based compensation, fees and expenses related to acquisition, merger or restructuring transactions, and any loss from debt repayments and related write-offs. See Reconciliation of EBITDA to cash flows from operations and reconciliation of Adjusted EBITDA to EBITDA in the notes to “Summary Consolidated Financial Information.”

(2)

Assumes fixed interest at current swap rates, estimated as 4.95% average interest on $220.0 million outstanding borrowings under the new term loan and the new senior notes, 3.61% interest on an estimated average balance of $20.0 million under the new revolver and 0.5% commitment fee on the average unused balance of $60.0 million under the new revolver. The rate on all outstanding debt under our new credit facilities, other than our revolver, will be fixed at the closing of this offering through various derivative instruments. The information in the table above does not include any interest associated with our letters of credit.

(3)

Maintenance capital expenditures were $8.7 million in 2003. Annual maintenance capital expenditures as presented in the table above represent the anticipated level of expenditures following the completion of the offering. The term “maintenance capital expenditures” is defined in our new credit facilities and refers to costs we incur that meet capitalization requirements under accounting principles generally accepted in the U.S. that we consider recurring in nature. The majority of our maintenance capital expenditures relate to our catcher-processor fleet and include items such as fishing gear, improvements to vessel factory processing equipment and major scheduled vessel maintenance.

(4)

Consist of $50,000 of certain administrative fees being reimbursed to ASLP, estimated incremental audit fees, tax 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 fees, directors’ fees, additional legal fees, listing fees and miscellaneous fees.

(5)

Available cash of Holdings is defined in our new credit facilities as adjusted EBITDA (calculated excluding all non-wholly owned subsidiaries except to the extent of cash dividends received from such subsidiaries) less cash interest expense (excluding interest on the Holdings notes); maintenance capital expenditures, distributions to the Issuer and ASLP to pay certain public company and other administrative costs, fees and expenses related to acquisition, merger or restructuring transactions, scheduled principal payments on our indebtedness and income taxes or tax distributions, net of tax refunds or rebates. On a fully converted basis, available cash of the Issuer would equal to available cash of Holdings. Holdings aggregate interest and dividend payments are limited by our new credit facilities to total available cash as calculated in the manner set forth in this table plus an initial adjustment amount of $7.5 million (subject to various reductions, described elsewhere in this prospectus), investments in lieu of dividends, and plus cumulative available cash that could have been but was not distributed in prior periods. Available cash may not be indicative of the actual amount of cash that will be available for interest payments on the notes and dividends on our capital stock. Amounts available for interest on the notes and dividends on our capital stock will be dependent on various factors, including, but not limited to, our working capital requirements, growth capital expenditures and other factors.

(6)	Assumes 12.5% interest on $281.6 million of notes represented by the IDSs and 12.5% interest on $33.1 million of notes sold separately (not represented by IDSs).

(7)

The aggregate amount of dividends that we may pay in any fiscal quarter is limited by the indenture governing the notes, to ¹/4 of the sum of (A) the total number of shares outstanding (calculated on a fully converted basis) multiplied by the sum of $0.875 plus 90% of the Issuer’s distributable cash per share in excess of $0.875 for the most recently ended four-quarter period, plus (B) the class A common stock adjustment amount, which will initially be $ , provided that the aggregate amount of dividends paid in any twelve-month period may not exceed . In addition, we may not pay dividends if Holdings interest coverage ratio falls below certain levels. See “Description of Notes—Dividend Suspension.”

(8)	Under certain circumstances, the amount held back may be payable as dividends in subsequent years subject to the terms of the new credit facilities and the indenture governing the notes.

Dividend payments are discretionary. See “Dividend Policy and Restrictions.”

Interest payments on the notes may be deferred for up to 8 quarters in the aggregate prior to 2009 and may be deferred on up to two occasions for not more than 3 quarters on any occasion after 2009.

Based on the foregoing, aggregate payments to IDS holders and holders of notes sold separately (not represented by IDSs) for the year ended December 31, 2003 would have been as follows:


	Aggregate		Per IDS		Per Note
	(in thousands)
Interest on notes	$	39,340	$	0.725	$	0.725
Dividends on shares of common stock		42,482		0.875		—

Total	$	81,822	$	1.600	$	0.725

Risk Factors

An investment in our IDSs and our notes involves a number of risks. In addition to the other information contained in this prospectus, prospective investors should give careful consideration to the following factors.

Risks Relating to Our Industry and Its Regulation

The repeal of, or adverse amendments to, the American Fisheries Act and other industry regulations would likely impair our profitability.

The American Fisheries Act restricts the number of vessels operating in the catcher-processor sector of the U.S. Bering Sea pollock fishery to 19 named catcher-processor vessels, of which we own and operate seven, and by allocating 40% of the directed pollock catch to this sector (with 36.6% being allocated to these 19 catcher-processor vessels and 3.4% being allocated to catcher-vessels). In the event that the American Fisheries Act and other related industry regulations were repealed or modified to permit additional large vessels to operate in the catcher-processor sector of the U.S. Bering Sea pollock fishery, we could be subject to new competition that could adversely affect our profitability. In addition, our pollock harvesting rights and profitability would be adversely affected if the American Fisheries Act and other industry regulations were repealed or modified in a manner that decreases the percentage of the total pollock harvest allocated to the 19 catcher-processor vessels named in the Act. A repeal or modification of the American Fisheries Act or other industry regulations could result from changes in the political environment, a significant increase or decrease in the pollock biomass or other factors, all of which are difficult to predict and are beyond our control.

The relatively stable and predictable nature of our harvesting operations and our efficiencies would deteriorate if the Pollock Conservation Cooperative agreement were terminated or adversely changed.

The members of the Pollock Conservation Cooperative, which is comprised of all participants in the catcher-processor sector of the U.S. Bering Sea pollock fishery, have agreed that each member will catch only an agreed-upon share of the total allowable catch allocated to the catcher-processor sector in that fishery. By establishing allocations among all catcher-processors, the Pollock Conservation Cooperative, which we refer to as the Cooperative, ensures that members will have the opportunity to harvest a fixed percentage of the total pollock harvest and removes the incentives to harvest and process pollock as fast as possible, thereby giving each member a greater opportunity to optimize operational efficiencies. The Cooperative could be terminated as a result of an adverse change in the American Fisheries Act allocations, the bankruptcy of a Cooperative member or the decision of two or more Cooperative members. The termination of the Cooperative or any adverse change to the allocation system currently in place under the agreement could increase the volatility of our operations, cause us to lose operational efficiencies and have an adverse effect on our existing harvesting rights.

Growth in our core pollock harvesting operations and our profitability are limited by the American Fisheries Act.

The American Fisheries Act imposes a statutory limit on the maximum amount of pollock that we may independently harvest equal to 17.5% of the directed pollock catch. We are allocated 16.8% of the directed pollock catch under our Cooperative agreements, and we lease the right to harvest another 0.7% of the directed pollock catch from other vessels in our fishery, bringing us to the 17.5% limit.

Our business could be materially affected if the community development quota we purchase is significantly reduced or eliminated or offered to us at prices we consider unreasonable.

We supplement our pollock harvest through the purchase of community development quota, which plays an important part in our strategy of maximizing access to pollock. The primary agreements governing our current arrangements for purchasing community development quota expire at the end of 2005. The Alaska Community

Development Groups from which we purchase community development quota could decline to continue to sell their quota to us or could offer their quota at prices we consider unreasonable, which could materially adversely affect our business.

In addition, every three years the state of Alaska may re-allocate the community development quota allocation among the six Alaska Community Development Groups. The next reallocation is for the period beginning 2006. The Alaska Community Development Groups from which we purchase community development quota could have their quota allocation reduced below current levels. If any significant reduction were to occur, we could experience a significant decline in our revenues, earnings and profitability.

Our ocean harvested whitefish operations are subject to regulatory control and political pressure from interest groups that may seek to materially limit our ability to harvest fish.

Under the American Fisheries Act, the Magnuson-Stevens Fishery Conservation and Management Act and other relevant statutes and regulations, various regulatory agencies, including the National Marine Fisheries Service and the North Pacific Fishery Management Council, are endowed with the power to control our harvest of pollock and other groundfish in the fisheries of the North Pacific. These regulatory agencies have the authority to materially reduce the Alaska pollock total allowable catch allocated to the catcher-processor sector as well as our allocation of pollock and other groundfish without any compensation to us.

These regulators may decrease or eliminate our allocation of the fish supply from a broad spectrum of lobbying interests including:

native Alaskan groups seeking a greater allocation of the pollock harvest to be devoted to community development quotas;

other sectors of the pollock fishery, such as inshore processors who periodically seek an increased allocation of the pollock harvest devoted to the on-shore sector; and

environmental protection groups.

The laws and rules that govern the highly-regulated fishing industry could change in a manner that would have a negative impact on our operations. In addition, protests and other similar acts of politically-motivated third party groups could cause substantial disruptions to the ability of our vessels to engage in harvesting activities. These factors may affect a substantial portion of our harvesting and processing operations in any year, which could have a material adverse effect on our business, results of operations or financial condition.

Regulations related to our by-catch could impose substantial costs on our operations and reduce our operational flexibility.

The National Marine Fisheries Service imposes various operational requirements aimed at limiting our ability to discard unwanted species, or by-catch, in the North Pacific. Regulation regarding by-catch is from time to time debated in various forums, including the United Nations, and is the subject of public campaigns by environmental groups. Any significant change in the by-catch rules resulting from these debates or campaigns could materially increase our costs or decrease the flexibility of our fishing operations.

Efforts to protect endangered species, such as Steller sea lions, may significantly restrict our ability to access our primary fisheries and revenues.

There is a risk that access to certain areas of the primary fisheries in which we operate could be restricted due to constraints imposed by governmental authorities in response to the listing of endangered species, such as Steller sea lions, for purposes of the Endangered Species Act. Since 1990, the National Marine Fisheries Service has issued various biological opinions as to the impact on Steller sea lions of the pollock and other groundfish fisheries of the U.S. Bering Sea. These opinions have analyzed the effects of the various groundfish fisheries in the waters off Alaska and have recommended actions to avoid jeopardy for the western population of Steller sea

lions and the adverse modification of its habitat. Based upon these opinions, the National Marine Fisheries Service has adopted several regulations relating to the protection of Steller sea lions which have caused us to harvest our allocation of pollock and other groundfish from less than the full territory of the fisheries in which we have historically operated.

The regulations to protect endangered species, such as Steller sea lions, may significantly restrict our fishing operations and revenues. Further, whatever measures that are adopted may be found to be inadequate or not in compliance with the Endangered Species Act. Therefore, as has occurred in the past, a court may in the future force us to modify our fishing operations by restricting our access to certain areas of the primary fisheries in which we operate in order to ensure the protection of the Steller sea lions in compliance with the Endangered Species Act. These restrictions could have an impact on our fishing operations, profitability and revenues which may be material to our business.

In addition, the U.S. Fish and Wildlife Service is currently preparing a biological opinion on the effects of the Bering Sea/Aleutian Islands/Gulf of Alaska groundfish fisheries on bird species listed under the Endangered Species Act, in particular the short-tailed albatross. The National Marine Fisheries Service is also conducting an assessment of the potential interactions between short-tailed albatross and equipment used by trawl vessels in these fisheries. The measures that could be imposed as a result of these investigations could have an impact on our fishing operations, profitability and revenues which may be material to our business.

The National Marine Fisheries Service has determined that under certain circumstances, the short-tailed albatross do interact with longliners’ gear. There is a risk that additional measures to prevent short-tailed albatross mortality may be required. Such measures may include temporary time and area closures within the U.S. Bering Sea Pacific cod fishery.

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.

Our industry is subject to highly complex statutes, rules and regulations. For example, we are subject to statutory and contractual limitations on the type and amount of fish we may harvest, as well as restrictions as to where we may fish within our fisheries. If we or members of our crew violate maritime law or otherwise become subject to civil and criminal fines, penalties and sanctions, our vessels could be subject to forfeiture and our fishing rights could be revoked. The violations that could give rise to these consequences include operating a vessel with expired or invalid vessel documentation or in violation of trading restrictions, violating international fishing treaties or fisheries laws or regulations, submitting false reports to a governmental agency, interfering with a fisheries observer or improperly handling or discarding pollock roe. Because our vessels’ harvesting and processing activities take place at sea, outside the day-to-day supervision of senior management, members of the crews of our vessels may have been guilty of infractions or violations that could subject them or us to significant penalties, which could have a material and adverse effect on our results of operations and financial condition.

In 2001, we became aware of allegations that certain crew members may have tampered or attempted to tamper with measurement equipment on board one or more of our vessels, principally related to the 2001 fishing season. In 2002, we received additional tampering allegations relating to one of our vessels. The National Marine Fisheries Service conducted an investigation regarding these allegations, and in consultation with the National Marine Fisheries Service, we also conducted an internal investigation regarding these allegations. In 2004, we received additional tampering allegations relating to one of our vessels. We and the National Marine Fisheries Service are currently conducting an investigation regarding these allegations. It is possible that violations may have occurred or may occur in the future.

In addition, our vessels may become subject to liens imposed by operation of maritime law in the ordinary course of business. These include liens for unpaid crew wages, liens for damages arising from maritime torts, liens for various services provided to the vessel and liens arising out of the operation, maintenance and repair of the vessel. The holders of these liens may have the right to foreclose on the vessel if the circumstances giving rise to the liens are not adequately addressed.

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.

If the provisions and procedures we adopt prove to be inadequate, we could lose our eligibility to harvest pollock, which would have a material adverse effect on our business, financial condition or results of operations. See “Business—Government Regulation.”

In addition, the Maritime Administration expressly reserves the right to review the terms of our loan covenants and financing arrangements to determine if they constitute an impermissible shifting of control to a non-U.S. citizen lender. Based on discussions with counsel and with pertinent government officials, we believe the intention of the Maritime Administration is to prevent provisions couched as loan covenants from serving as a device to shift control to non-U.S. citizens, and not to impede conventional market based loans and credit facilities.

The American Fisheries Act is relatively new legislation. As a result, no reported judicial cases clearly interpret its meaning. For this reason, the full future impact of the American Fisheries Act on our ownership and debt capital structure remains uncertain.

Risks Relating to Our Business

Our products are subject to pricing volatility, and the prices of our pollock roe and pollock surimi products, which declined significantly in 2003, may remain at their current low levels or decline even further, which would significantly reduce our profitability.

The sale of pollock roe is our highest margin business. Pollock roe prices have experienced significant volatility in recent years and may continue to do so in the future. The average price of pollock roe that we sell is heavily influenced by the size and condition of roe skeins, its color and freshness, the maturity of the fish caught, the grade mix of the pollock roe and market perceptions of supply. In addition, pollock roe prices are influenced by anticipated Russian and U.S. production and Japanese inventory carry-over, as pollock roe is consumed almost exclusively in Japan. In addition, a decline in the quality of the pollock roe that we harvest or fluctuations in supply could cause a significant decline in the market price of pollock roe, which would reduce our margins and revenues.

In addition, during the second half of 2003, our financial results and liquidity were adversely affected by lower pollock surimi prices and lower sales volume. The quantity of pollock surimi inventories we held at December 31, 2003 was approximately 1.5 times higher than the average pollock surimi inventories we held over the last three years. Over the last five years, our seasonal average pollock surimi prices have fluctuated within a range of approximately 200 to 300 yen per kilogram. In the second half of 2003, our average pollock surimi price was at the low end of that range.

Partly as a result of these pricing factors, together with high inventories, our overall performance in 2003 was at a level that would have caused us to be in violation of certain of our financial bank covenants. To prevent this potential violation, during the third quarter of 2003, we cancelled 2003 management bonuses and reversed accruals of those bonuses through June 30, 2003, in accordance with the terms of some of our employment agreements and our general bonus policy, which does not require the payment of bonuses based on financial performance for any year in which there is or would be a violation of a covenant under our credit agreement. Despite the cancellation and reversal of these bonuses, we would have been in violation of those financial covenants under our existing credit agreement at the end of 2003 if we had not obtained a covenant modification

from our bank lenders. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Debt Covenants.” Prices and sales volume may remain at these low levels or decline even further, which would materially and adversely affect our results of operations and could impair our ability to meet our anticipated distributions to you.

High catfish prices charged by farmers would adversely impact our catfish operations if market prices for our catfish products do not increase proportionally.

If prices at which we purchase catfish increase without a proportionate increase in the prices at which we sell our catfish products, our ability to maintain profitability in our catfish processing operations will be adversely affected. In the second half of 2003, many of the farmers from whom we purchase catfish increased their prices to levels that jeopardized our ability to maintain satisfactory profit margins in the catfish processing operations. Partially as a result of these farm price increases, in September 2003, we temporarily closed our catfish processing plant in Demopolis, Alabama. Our Demopolis plant resumed full operations in October 2003. However, the prices charged by catfish farmers have remained at relatively high levels, which have adversely affected our catfish processing results. Prices at which farmers are willing or able to sell their catfish to us could remain at levels that do not enable us to maintain satisfactory margins and do not allow us to continue these operations without further shutdowns or interruptions.

A material decline in the population and biomass of pollock, other groundfish and catfish stocks in the fisheries in which we operate would materially and adversely affect our business.

The population and biomass of pollock and other groundfish stocks are subject to natural fluctuations which are beyond our control and which may be exacerbated by disease, reproductive problems or other biological issues. Pollock stocks are also largely dependent on proper resource management and enforcement. The overall health of a fish stock is difficult to measure and fisheries management is still a relatively inexact science. Since we are unable to predict the timing and extent of fluctuations in the population and biomass of the pollock stocks, we are unable to engage in any measures that might alleviate the adverse effects of these fluctuations. Any such fluctuation which results in a material decline in the population and biomass of the pollock stocks in the fisheries in which we operate would materially and adversely affect our business. Conversely, a significant increase in Russian pollock stocks could dramatically reduce the market price of our products.

Our catfish operations are also subject to the risk of variations in supply. For example, disease in catfish ponds could reduce catfish stocks and adversely affect our business.

Our business is subject to Japanese currency fluctuations that could materially adversely affect our financial condition and liquidity.

Our profitability depends in part on revenues received in Japanese yen as a result of sales in Japan. During 2003, our Japanese sales represented 24.9% of our total revenues. A decline in the value of the yen against the U.S. dollar would adversely affect our earnings from sales in Japan. Fluctuations in currency are beyond our control and are unpredictable. During the year ended December 31, 2002, the value of the dollar declined by 9.6% against the yen, from ¥131.3 per $1.00 to ¥118.6 per $1.00. During the year ended December 31, 2003, the value of the dollar declined by 9.9% against the yen, from ¥118.6 per $1.00 as of December 31, 2002 to ¥106.9 per $1.00, as of December 31, 2003. To hedge our exposure to Japanese currency fluctuations, we purchase derivative instruments; however, these instruments may not be sufficient to provide complete protection against loss and, accordingly, any such fluctuations could adversely affect our revenues.

In addition to our revenues being exposed to Japanese currency fluctuations, our liquidity can also be impacted by unrealized losses sustained to our portfolio of foreign exchange contracts. A majority of these contracts have been entered into with a financial institution that requires collateralization of unrealized losses sustained by the portfolio above a certain threshold. To mitigate our short-term liquidity risk with respect to these collateralization requirements, we have placed standing orders to forward purchase yen should the yen strengthen to certain spot

rates. With the yen strengthening, several of these standing orders have been executed and currently one remains outstanding. The orders are significant and of a shorter duration than the portfolio of our foreign contracts and, as a result, could have a significant adverse impact on our short-term liquidity should the yen strengthen in relation to the U.S. dollar.

The segments of the seafood industry in which we operate are competitive, and our inability to compete successfully could adversely affect our business, results of operations and financial condition.

We compete with major integrated seafood companies such as Trident Seafoods, Nippon Suisan and Maruha, as well as with inshore processors that operate inshore on fixed location processing facilities, relying on catcher-vessels to harvest and deliver fish for processing. We also compete with motherships that are solely at-sea processors, relying on catcher-vessels to harvest and deliver fish for processing. Additionally, we compete with other pollock fisheries, particularly the Russian pollock fishery in the Sea of Okhotsk. Some of our competitors have the benefit of marketing their products under brand names that have better market recognition than ours, or have stronger marketing and distribution channels than we do. In addition, other competitors may produce better quality products or have more advantageous pricing margins than we do. We may not be able to compete successfully with any of these companies. In addition, production and distribution of substitute products for pollock could have a significant adverse impact on our profitability. Increased competition as to any of our products could result in price reduction, reduced margins and loss of market share, which could negatively affect our profitability. An increase in imported products in the U.S. at low prices could also negatively affect our profitability.

All of our business activities are subject to a variety of natural risks, which could have a material adverse effect on our business, financial condition or results of operations.

The U.S. Bering Sea pollock fishery, which is the primary fishery in which we operate, is characterized by extreme sea conditions. Unusual weather conditions could materially and adversely affect the quality and quantity of the fish products we produce and distribute.

Our vessels are expensive assets that are subject to substantial risks of serious damage or destruction. The sinking or destruction of, or substantial damage to, any of our vessels would entail significant costs to us, including the loss of production while the vessel was being replaced or repaired. Our insurance coverage may prove to be inadequate or may not continue to be available to us. In the event that such coverage proves to be inadequate, the sinking or destruction of, or substantial damage to, any of our vessels could have a material adverse effect on our business, financial condition or results of operations.

Should any of our vessels be destroyed or otherwise become inoperable, the American Fisheries Act would limit our ability to replace that vessel. The statute permits the replacement of lost vessels only if the loss is due to an Act of God, an act of war, the result of a collision, or otherwise not an intentional act of the vessel’s owner. These rules would restrict our ability to replace our vessels on account of obsolescence and, accordingly, could cause us to incur increased costs of maintaining our vessels, including the substantial loss of capacity during times of such maintenance and rebuilding.

We may be required to pay significant damages in connection with litigation that is pending against us.

A pending lawsuit against us could require us to pay significant damages, which could have a material adverse effect on our business, results of operations or financial condition. See “Business—Litigation.”

We may be adversely affected by a pending IRS audit.

Currently, the IRS is conducting an audit of two of our subsidiaries, ASG and ASC, Inc., with respect to tax years 2000 for ASG and 1999 and 2000 for ASC, Inc. In addition, the IRS has indicated its intention to audit ASC, Inc. with respect to tax year 2001. We do not know what issues will be raised in the course of this audit and such audit could result in adjustments that could have a material adverse effect on our financial condition.

We may incur material costs associated with compliance with environmental regulations.

We are subject to foreign, federal, state, and local environmental regulations, including those governing discharges to water, the management, treatment, storage and disposal of hazardous substances, and the remediation of contamination. If we do not fully comply with environmental regulations, or if a release of hazardous substances occurs at or from one of our facilities or vessels, we may be subject to penalties and could be held liable for the cost of remediation. For example, an accident involving one of our vessels could result in significant environmental liability, including fines and penalties and remediation costs. If we are subject to these penalties or costs, we may not be covered by insurance, or any insurance coverage that we do have may not cover the entire cost. Compliance with environmental regulations could require us to make material capital expenditures and could have a material adverse effect on our results of operations and financial condition.

We produce and distribute food products that are susceptible to contamination and, as a result, we face the risk of exposure to product liability claims and damage to our reputation.

As part of the fish processing, small pieces of metal or other similar foreign objects may enter into some of our products. Additionally, our fish products are vulnerable to contamination by disease-producing organisms or pathogens. Shipments of products that contained foreign objects or were so contaminated could lead to an increased risk of exposure to product liability claims, product recalls, adverse public relations and increased scrutiny by federal and state regulatory agencies. If a product liability claim were successful, our insurance might not be adequate to cover all the liabilities we would incur, and we might not be able to continue to maintain such insurance, or obtain comparable insurance at a reasonable cost, if at all. If we did not have adequate insurance or contractual indemnification available, product liability claims relating to defective products could significantly increase our operating costs. In addition, even if a product liability claim was not successful or was not fully pursued, the negative publicity surrounding any such assertion could harm our reputation with our customers.

Our operations are labor intensive, and our failure to attract and retain qualified employees may adversely affect us.

The segments of the harvesting and processing industry in which we compete are labor intensive and require an adequate supply of qualified production workers willing to work in rough weather and potentially dangerous operating conditions at sea. Some of our operations have from time to time experienced a high rate of employee turnover and could continue to experience high turnover in the future. Labor shortages, the inability to hire or retain qualified employees or increased labor costs could have a material adverse effect on our ability to control expenses and efficiently conduct our operations. We may not be able to continue to hire and retain the sufficiently skilled labor force necessary to operate efficiently and to support our operating strategies, or we may not continue to experience favorable labor relations. In addition, our labor expenses could increase as a result of a continuing shortage in the supply of personnel. Changes in applicable state and federal laws and regulations could increase labor costs, which could have a material adverse effect on our business, results of operations and financial condition.

Risks Relating to the IDSs, our Notes, the New Credit Facilities and the Shares of our Common Stock

Our substantial indebtedness could restrict our ability to pay interest and principal on the notes, pay dividends with respect to shares of our common stock, and impact our financing options and liquidity position.

We have a significant amount of debt. For the year ended December 31, 2003, on a pro forma basis after giving the effect to this offering and related transactions as if they had occurred on January 1, 2003, our ratio of Adjusted EBITDA to interest expense would have been 2.07 times and our ratio of total debt to Adjusted EBITDA would have been 4.95 times. The degree to which we are leveraged on a consolidated basis could have important consequences to the holders of the IDSs, including:

it may be more difficult for us to satisfy our obligations under the notes and to the lenders under the new credit facilities, and to pay dividends on our common stock;

our ability in the future to obtain additional financing for working capital, capital expenditures or acquisitions may be limited;

we may not be able 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 future operations, capital expenditures and/or dividends on our common stock;

we may be more vulnerable to economic downturns and be limited in our ability to withstand competitive pressures; and

it may limit our flexibility to plan for and react to changes in our business or strategy.

We may be able to incur substantially more debt, which would increase the risks described above associated with our substantial leverage.

We may be able to incur substantial additional indebtedness in the future, including issuances of additional notes under the indenture. Any additional debt incurred by us could increase the risks associated with our substantial leverage.

We are subject to restrictive debt covenants that limit our business flexibility by imposing operating and financial restrictions on our operations.

Although credit facilities of similarly situated borrowers customarily prohibit payments of dividends on the shares of common stock, our new credit facilities will permit us to pay dividends on the shares of common stock represented by IDSs, so long as Holdings’ interest coverage ratio remain above certain established levels and no default or event of default exists under the new credit facilities. Because the payment of dividends will decrease the amount of cash available to service our senior debt, the new credit facilities will impose restrictions on our operations that are more restrictive than customary for credit facilities of similarly situated borrowers that prohibit or substantially limit payments of dividends. These restrictions prohibit or limit, among other things:

the incurrence of additional indebtedness and the issuance of preferred stock and certain redeemable capital stock;

the payment of dividends or distributions (including distributions by ASG to us to permit us to pay interest on the notes) on, and purchase or redemption of, capital stock;

a number of other restricted payments, including investments and acquisitions;

specified sales of assets;

specified transactions with affiliates;

the creation of liens on our assets;

consolidations, mergers and transfers of all or substantially all of our assets;

our ability to change the nature of our business; and

our ability to make capital expenditures (other than maintenance capital expenditures).

These restrictions could limit our ability to obtain future financing, make acquisitions or needed capital expenditures, withstand downturns in our business or take advantage of business opportunities. Furthermore, the new credit facilities will also require us to maintain specified financial ratios and satisfy financial condition tests,

including a minimum fixed charge coverage ratio, a maximum leverage ratio and a maximum senior leverage ratio. 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 facilities and/or the indenture. Upon the occurrence of an event of default under the new credit facilities, the lenders could elect to declare all amounts outstanding under the new credit facilities to be immediately due and payable. If the lenders accelerate the payment of the indebtedness under the new credit facilities, our assets may not be sufficient to repay in full this indebtedness and our other indebtedness, including the notes.

We may not be able to refinance our new credit facilities at maturity on favorable terms or at all.

The new credit facilities will mature in full in 2008. We may not be able to renew or refinance the new credit facilities, or if renewed or refinanced, the renewal or refinancing may occur on less favorable terms. In particular, some of the terms of the notes that may be viewed as favorable to the senior lenders, such as our ability to defer interest and acceleration forbearance periods, become less favorable in 2009, which may materially adversely affect our ability to refinance or renew our new credit facilities beyond such dates. If we are unable to refinance or renew our new credit facilities, our failure to repay all amounts due on the maturity date would cause a default under the new credit facilities. In addition, our interest expense may increase significantly if we refinance our new credit facilities on terms that are less favorable to us than the terms of our new credit facilities.

We will require a significant amount of cash, which may not be available to us, to service our debt, including the notes, and to fund our liquidity needs.

Our ability to make payments on, or to refinance or repay, our debt, including the notes, to fund planned capital expenditures and expand our business, will depend largely upon our future operating performance. Our future operating performance is subject to general economic, financial, competitive, legislative and regulatory factors, as well as other factors that are beyond our control. If we are unable to generate sufficient cash to service our debt requirements, we will be required to refinance our new credit facilities.

If we are unable to refinance our debt or obtain new financing, we would have to consider other options, including:

sales of assets to meet our debt service requirements;

sales of equity; and

negotiations with our lenders to restructure the applicable debt.

If we are forced to pursue any of the above options under distressed conditions, our business and or the value of your investment in our IDSs and notes could be adversely affected.

Compliance with rules regulating non-U.S. citizen ownership and control of fishing vessels may adversely affect the marketability or the price of our IDSs, shares of our common stock or notes.

The governance provisions we have adopted and the related steps we will take to comply with the foreign ownership restrictions imposed by federal law on companies that participate in U.S. fisheries are complex and burdensome. They may require beneficial owners of our common stock to execute complex affidavits and provide detailed ownership information and they could require trades of IDSs or shares of our common stock to be reversed or persons who hold IDSs or shares to dispose of them on unfavorable terms. These administrative burdens and requirements and the potential that trades could be unwound or sales required could have an adverse effect on the market for and trading price of IDSs, shares of our common stock or notes. See “Business—Government Regulation.”

Our governance arrangements provide our present owners with the ability to exercise substantial control over us, which will dilute your voting power and may create conflicts of interest.

As the holders of our Series A, Series B and Series C preferred stock, Coastal Villages Pollock LLC, Bernt O. Bodal (who is our chairman and chief executive officer), and Centre Partners Management LLC will be entitled directly to designate a total of four members of our nine member board. In addition, through their ownership of Class A common stock, IDSs and preferred shares (which will vote together with the common stock and Class A common stock based on the holders’ interests in ASLP and Holdings), Coastal, Mr. Bodal and Centre would, if they acted collectively, have the ability to elect two additional independent members of our board through the operation of cumulative voting, which applies to the election of our directors and has the effect of concentrating the voting power of significant holders. Accordingly, although they will hold only approximately 28.6% of the economic interests in Holdings, these three holders and their affiliates will have approximately 31.8% of the aggregate voting power in the Issuer and, effectively, the right to designate six of our nine directors. Our by-laws require that all directors other than the four designated by the holders of preferred stock must satisfy all applicable independence requirements including those of the American Stock Exchange.

While there is no certainty that Coastal, Mr. Bodal and Centre will agree on all matters or vote as a block, they would have the power to do so and therefore to substantially dilute your voting power. Further they may have views or interests that differ from those of the majority of IDS holders.

Coastal Villages Pollock LLC will have board representation, voting and veto rights substantially in excess of its economic ownership, which may create conflicts of interest.

Coastal Villages Pollock LLC, as the holder of the Series A preferred share, will have the right to elect two members of our board unless it sells its equity such that it is diluted below a 7% interest in Holdings (in which case it would be reduced to one director). In addition, for so long as it is entitled to two directors, Coastal has veto rights over changes to our governance arrangements and over certain compensation decisions made by the compensation committee of our board. Finally, by virtue of its ownership of IDSs, Class A common stock and the Series A preferred share, it will have a total of 14.0% of our combined voting power.

In addition, our nomination process will allow two or more directors who oppose any nominee for director proposed by our nominating and governance committee to propose an alternate nominee. So long as the alternative satisfies applicable independence and other requirements, we will be required to include disclosure about the alternate nominee in our annual proxy statement and processes. This mechanism, coupled with cumulative voting, would make it possible for Coastal to propose a candidate and use its cumulative voting rights to cast a significant number of votes in favor of such candidate. In our annual election of five directors, holders of approximately 16.7% of our voting power will have the ability to ensure the election of one director. After completion of this offering, Coastal will own approximately 14.0% of the voting power of our company or approximately 12.8% if the over-allotment option to purchase additional IDSs is exercised in full.

Coastal will also have the right (for so long as it is entitled to elect two directors) to designate one member of our audit committee, provided the member satisfies applicable independence and other requirements.

As a result of these various provisions, Coastal will have the ability to exert significant influence over our activities and decisions. Coastal is our largest supplier of community development quota and our current agreement with Coastal terminates on December 31, 2005. In addition, Coastal may, as an Alaska native organization, have goals or views that may differ from those of our other shareholders or our management and, accordingly, Coastal’s substantial influence over our affairs may create conflicts of interest.

Retained ownership by our existing owners may prevent you from receiving a premium in the event of a change of control.

Upon the completion of the transactions contemplated by this offering, the existing owners, through their ownership of ASLP, IDSs and Class A common stock, will own approximately 34.8% of the economic interests in the business described in this prospectus, or approximately 25.0% if the over-allotment option to purchase additional IDSs is exercised in full. If such existing owners, or their permitted transferees, exercise their rights to exchange all of their ownership in ASLP for IDSs and exchange their Class A common stock for IDSs, they will

own approximately 34.8% of the voting power of our company. This concentration of ownership could have the effect of delaying, deferring or preventing a change in control, merger or tender offer, which would deprive you of an opportunity to receive a premium for your IDSs and may negatively affect the market price of the IDSs. Moreover, our existing owners could effectively receive a premium for transferring ownership to third parties that would not inure to your benefit.

We are a holding company and rely on dividends, interest 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 and currently have no significant assets other than our equity interest in Holdings and our interest in the notes issued by Holdings. As a result, we will rely on interest and principal on the Holdings notes and on dividends, loans and other payments or distributions from our subsidiaries to meet our debt service obligations and enable us to pay interest and dividends. The ability of our subsidiaries to pay interest and dividends or make other payments or distributions to us will depend substantially on their respective operating results and will be subject to restrictions under, 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 facilities and the covenants of any future outstanding indebtedness we or our subsidiaries incur.

Our new credit facilities will contain significant limitations on distributions and other payments.

The new credit facilities will prohibit distributions from ASG and its subsidiaries to Holdings if, among other things, the interest coverage ratio of Holdings is less than the dividend suspension thresholds described under “Description of Certain Indebtedness—New Credit Facilities” (or if we fail to timely deliver financial statements calculating such ratio), or if Holdings has any deferred and unpaid interest outstanding on the Holdings notes, other than distributions to pay interest on the Holdings notes and other permitted payments, such as to pay taxes. In addition, if the interest coverage ratio of Holdings is less than the interest deferral thresholds described under “Description of Certain Indebtedness—New Credit Facilities” (or if we fail to timely deliver financial statements calculating such ratio), or if a default or event of default under the new credit facilities exists, the new credit facilities will prohibit distributions by ASG and its subsidiaries to Holdings to enable it to pay interest on the Holdings notes, as well as all other distributions from ASG to Holdings (other than distributions to pay taxes and certain administrative expenses). During any dividend suspension period or interest deferral period, ASG will be required to prepay the loans under the new credit facilities with a portion of its cash available after payments of taxes, scheduled principal and interest payments on its indebtedness, maintenance capital expenditures and other expenses, and such prepayments would reduce the amount of cash available for payments in respect of the notes.

If the interest coverage ratio of Holdings is less than the interest deferral thresholds described under “Description of Certain Indebtedness—New Credit Facilities,” the Issuer will be permitted to defer interest on the notes pursuant to the indenture governing the notes. However, the indenture provides that interest on the notes may not be deferred for more than eight quarters in the aggregate prior to 2009. If the Issuer may no longer defer interest on the notes but the interest coverage ratio of Holdings remains below the specified threshold and the new credit facilities prohibit ASG and its subsidiaries from making distributions to the Issuer, we will not have sufficient funds to pay interest on the notes, which would cause a default under the indenture governing the notes, entitling the holders of the notes to demand payment in full of all amounts outstanding under the notes, subject to an acceleration forbearance period of up to 90 days. The default and the acceleration of the notes under such circumstances would cause a default under our new credit facilities, and ASG and its subsidiaries might not have sufficient funds to repay all amounts outstanding under the new credit facilities and make distributions to us to repay all amounts outstanding under the notes.

You may not receive the level of dividends provided for in our existing dividend policy or any dividends at all.

Our board of directors may, in its discretion, amend or repeal our existing dividend policy. 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. Our board of directors may decrease the level of dividends provided for in our existing dividend policy or entirely discontinue the payment of dividends. The indenture governing the notes and our new credit facilities will contain limitations on our ability to pay dividends. See “Dividend Policy and Restrictions.” The reduction or elimination of dividends may negatively affect the market price of the IDSs or the notes.

Interest on the notes may not be deductible by us for U.S. federal income tax purposes, which could significantly reduce our future cash flow and impact our ability to make interest and dividend payments.

While we believe that the notes should be treated as debt for U.S. federal income tax purposes, this position may not be sustained if challenged by the IRS. If the notes were treated as equity rather than debt for U.S. federal income tax purposes, then the stated interest on the notes could be treated as a dividend, and interest on the notes would not be deductible by us for U.S. federal income tax purposes. Our inability to deduct interest on the notes could materially increase our taxable income and, thus, our U.S. federal and applicable state income tax liability. This would reduce our after-tax cash flow, which may result in a default under the new credit facilities, and would materially and adversely impact our ability to make interest and dividend payments. In the case of foreign holders, treatment of the notes as equity for U.S. federal income tax purposes would subject payments to such holders in respect of the notes to withholding or estate taxes in the same manner as payments made with regard to common stock and could subject us to liability for withholding taxes that were not collected on payments of interest.

You will be immediately diluted by $20.06 per share of common stock if you purchase IDSs in this offering.

If you purchase IDSs in this offering, you will experience an immediate dilution of $20.06 per share of common stock represented by the IDSs ($17.08 assuming all ASLP units and Class A common units have been exchanged for IDSs) which exceeds the entire price allocated to each share of common stock represented by the IDSs in this offering because there will be a net tangible book deficit for each share of common stock outstanding immediately after this offering. Our net tangible book deficit as of December 31, 2003, after giving effect to this offering, was approximately $332.9 million, or $9.46 per IDS ($6.48 assuming all ASLP units have been exchanged for IDSs). As a result of this deficit, the face amount of notes will exceed the net book value of tangible assets by $1,005 per $1,000 face amount of notes.

Deferral of interest payments would have adverse tax consequences for you and may adversely affect the trading price of the IDSs or the notes.

If interest payments on the notes are deferred, you will be required to recognize interest income for U.S. federal income tax purposes on an economic accrual basis in respect of the notes held by you before you receive any cash payment of this interest. See “Material U.S. Federal Income Tax Considerations—Deferral of Interest.” In addition, you will not receive this cash payment if you sell the IDSs or the notes before the end of any deferral period or before the record date relating to interest payments that are to be paid.

If interest is deferred, the IDSs may trade at a price that does not fully reflect the value of accrued but unpaid interest on the notes. In addition, the existence of the right to defer payments of interest on the notes under certain circumstances may mean that the market price for the IDSs or the notes may be more volatile than other securities that do not have these restrictions.

Your right to receive payments on the notes and the note guarantees is junior to all senior debt of ASG and its subsidiaries.

The Issuer and Holdings are holding companies and conduct all of their operations through ASG and its subsidiaries. The note guarantees and the guarantees of the Holdings notes issued by ASG and its subsidiaries

will be unsecured subordinated obligations, junior in right of payment to the senior debt of each subsidiary guarantor, respectively. As a result of the subordinated nature of these guarantees, upon any distribution to creditors of ASG or the subsidiary guarantors in bankruptcy, liquidation or reorganization or similar proceedings relating to ASG or the subsidiary guarantors or their property or assets, the holders of such entities’ senior indebtedness will be entitled to be paid in full in cash before any payment may be made with respect to the notes or the Holdings notes under the subordinated guarantees (and before any distribution may be made by ASG to Holdings or by Holdings to the Issuer). In the event of a bankruptcy, liquidation or reorganization or similar proceeding relating to ASG or the subsidiary guarantors, the Issuer, ASLP and the noteholders would participate under the subordinated guarantees with other holders of unsecured subordinated indebtedness after the payment in full of all senior indebtedness. However, because of the existence of the subordination provisions, including the requirement that you pay over distributions to holders of senior indebtedness, you may receive less, ratably, than our other unsecured creditors, including trade creditors. In any of these cases, there may not be sufficient funds to pay all of our creditors and the holders of the notes may receive less, ratably than the holders of senior indebtedness. In such event the Issuer and the guarantors would not be able to make all principal payments on the notes.

The subordination provisions of the indenture will also provide that payments to you under the subordinated note guarantees of Holdings, ASG and its domestic subsidiaries will be prohibited while a payment default exists under the senior indebtedness of these entities or if such senior indebtedness has been accelerated. In addition these payments to you may be blocked for up to 179 days by holders of designated senior indebtedness if a default other than a payment default exists under such senior indebtedness. During any period in which payments to you are prohibited or blocked in this manner, any amounts received by you with respect to the subordinated note guarantees, including as a result of any legal action to enforce such guarantees, would be required to be turned over to the holders of senior indebtedness. In addition, so long as the notes are guaranteed by at least one guarantor, upon the occurrence of an event of default under the indenture governing the notes, the principal of and premium, if any, on the notes may not be accelerated for a period of up to 90 days until , 2009. See “Description of Notes—Acceleration Forbearance Periods,” and “Description of Notes—Subordination of the Guarantees.”

On a pro forma basis as of December 31, 2003, the subordinated guarantees would have ranked junior to $245.0 million of our outstanding senior indebtedness of subsidiary guarantors on a consolidated basis, all of which would have been secured. In addition, as of December 31, 2003, on a pro forma basis, ASG would have had the ability to borrow up to an additional amount of $40 million under the new revolver, which would have been senior in right of payment to the subordinated guarantees.

The guarantees of the notes by our subsidiaries may not be enforceable because of fraudulent conveyance laws.

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; or

received less than reasonably equivalent value or fair consideration for issuing the guarantee and, at the time it issued the guarantee:

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 unencumbered assets constituted unreasonably small capital to carry on its business;

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.

The measures of insolvency for the purposes of fraudulent transfer laws vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a person would be considered insolvent if, at the time it incurred the debt:

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.

Whatever standard that a court uses to determine whether or not the subsidiary guarantors were solvent at the relevant time, the court could rule that such guarantors were not solvent.

If this were to occur, the guarantee of the notes by Holdings, ASG or any other subsidiary guarantor would be subject to the claim that, since the guarantee was incurred for the benefit of the noteholders, and only indirectly for the benefit of the guarantor or creditors of the guarantor, the guarantees were incurred for less than fair consideration. A court could therefore void the obligations of Holdings, ASG or the subsidiary guarantor under the guarantees or subordinate these obligations to Holdings, ASG’s or the subsidiary guarantor’s other debt or take action detrimental to holders of the notes. If the guarantee of Holdings, ASG or any subsidiary guarantor were voided, the holders of the notes would not have a debt claim against Holdings, ASG or that subsidiary guarantor.

Seasonality and variability of our businesses may cause volatility in the market value of your investment and may hinder our ability to make timely distributions on the IDSs and the notes.

Our business is seasonal in nature, and our net sales and operating results vary significantly from quarter to quarter. For example, our revenue per pound of fish harvested tends to be higher in the January-to-April season due to the harvesting of roe. Consequently, results of operations for any particular quarter may not be indicative of results of operations for future quarterly periods, which makes it difficult to forecast our results for an entire year. This variability may cause volatility in the market price of the IDSs and the notes.

In addition, the seasonality and variability of our business means that at certain times of the year our cash receipts are significantly higher than at other times. Our fishing seasons, including the important January-to-April season, straddle more than one quarter. As a result, the timing of the recognition of sometimes significant amounts of revenue from one quarter to another can be a function of unpredictable factors, such as the timing of roe auctions, weather, the timing of shipments to pollock roe customers, fishing pace and product delivery schedules, all of which are likely to vary from year to year. Given that we are required to make equal quarterly interest payments to note holders and expect to pay equal quarterly dividends as well as interest payments to IDS holders throughout the year, there is a risk that we will experience cash shortages, which could hinder our ability to make timely distributions to IDS holders or note holders.

Subsequent issuances of notes pursuant to an offering by us or following an exercise of exchange or registration rights by partners of ASLP or conversion of Class A common stock may cause you to recognize original issue discount.

The indenture governing the notes and the agreements with DTC will provide that, in the event there is a subsequent issuance of notes by the Issuer having substantially identical terms as the notes but with a different CUSIP number, each holder of notes or IDSs (as the case may be) agrees that a portion of such holder’s notes will be automatically exchanged for a portion of the notes acquired by the holders of such subsequently issued notes, and the records of any record holders of notes will be revised to reflect such exchanges. Consequently,

following each such subsequent issuance and exchange, without any further action by such holder, each holder of notes or IDSs (as the case may be) will own an indivisible unit composed of notes of each separate issuance in the same proportion as each other holder. However, the aggregate stated principal amount of notes owned by each holder will not change as a result of such subsequent issuance and exchange. It is unclear whether the exchange of notes for subsequently issued notes results in a taxable exchange for U.S. federal income tax purposes, and it is possible that the IRS might successfully assert that such an exchange should be treated as a taxable exchange. Even if the exchange is not treated as a taxable event, such exchange would result in holders having to include OID in taxable income prior to the receipt of cash as described below, and may result in other potentially adverse tax consequences to holders. See “Material U.S. Federal Income Tax Considerations—Notes—Exchange Rights and Additional Issuances.” In addition, the potential amount of OID that would be required to be included in taxable income by holders as a result of an automatic exchange (as described below) is indefinite and may be a significant amount, in part due to our ability to engage in numerous subsequent issuances.

Following the subsequent issuance and exchange, we (and our agents) will report any OID on the subsequently issued notes ratably among all holders of notes and IDSs, and each holder of notes and IDSs will, by purchasing IDSs, agree to report OID in a manner consistent with this approach. However, the IRS may assert that any OID should be reported only to the persons that initially acquired such subsequently issued notes (and their transferees) and thus may challenge the holders’ reporting of OID on their tax returns. Such a challenge could create significant uncertainties in the pricing of IDSs and notes and could adversely affect the market for IDSs and notes. For these and additional tax-related risks, see “Material U.S. Federal Income Tax Considerations.”

We may have to establish a reserve for contingent tax liabilities in the future, which could adversely affect our ability to make interest and dividend payments on the IDSs.

Even if the IRS does not challenge the tax treatment of the notes, it is possible that we will at some point need to establish a reserve for contingent tax liabilities associated with a disallowance of all or part of the interest deductions on the notes, although our present view is that no such reserve is necessary or appropriate. If we were required to maintain such a reserve, our ability to make interest and dividend payments could be materially impaired and the market for the IDSs or common shares would be adversely affected. In addition, any resulting restatement of our financial statements could lead to defaults under our senior credit facilities.

Holders of subsequently issued notes may not be able to collect their full stated principal amount prior to maturity.

Holders of subsequently issued notes having OID may not be able under New York and federal bankruptcy law to collect the portion of their principal amount that represents unaccrued OID in the event of an acceleration of the notes or a bankruptcy of the Issuer prior to the notes’ maturity date. As a result, an automatic exchange that results in a holder receiving an OID note could have the effect of ultimately reducing the amount such holder can recover from us in the event of an acceleration or bankruptcy.

Prior to the consummation of this offering, there was no public market for our IDSs, shares of our common stock or notes, which may cause the price of the IDSs, shares of our common stock or the notes to fluctuate substantially and negatively affect the value of your investment.

Our IDSs, the shares of our common stock and the notes have no public market history. In addition, there has not been an active market for securities similar to the IDSs. An active trading market for the IDSs, shares of our common stock or the notes might not develop in the future, which may cause the price of the IDSs, shares of our common stock or the notes to fluctuate substantially, and we currently do not expect that an active trading market for the shares of our common stock will develop until the notes mature. If the notes represented by your IDSs mature or are redeemed or repurchased, the IDSs will be automatically separated and you will then hold the

shares of our common stock. We will not apply to list our shares of common stock for separate trading on the American Stock Exchange or any other exchange until the number of shares held separately and not represented by IDSs is sufficient to satisfy applicable requirements for separate trading on such exchange. The common stock may not be approved for listing at such time. We do not intend to list our notes on any securities exchange.

The limited liquidity of the trading market for the notes sold separately (not represented by IDSs) may adversely affect the trading price of the separate notes.

We are separately selling (not represented by IDSs) $33.1 million aggregate principal amount of notes, representing approximately 10% of the total outstanding notes (assuming the underwriters do not exercise their over-allotment option). While the notes sold separately (not represented by IDSs) are part of the same series of notes as, and identical to, the notes represented by the IDSs at the time of the issuance of the separate notes, the notes represented by the IDSs will not be separable for at least 45 days and will not be separately tradeable until separated. As a result, the initial trading market for the notes sold separately (not represented by IDSs) will be very limited. Even after holders of the IDSs are permitted to separate their IDSs, a sufficient number of holders of IDSs may not separate their IDSs into shares of our common stock and notes to create a sizable and more liquid trading market for the notes not represented by IDSs. Therefore, a liquid market for the notes may not develop, which may adversely affect the ability of the holders of the separate notes to sell any of their separate notes and the price at which these holders would be able to sell any of the notes sold separately.

Future sales or the possibility of future sales of a substantial amount of IDSs, shares of our common stock or our notes may depress the price of the IDSs, the shares of our common stock and our 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 notes in the public market could adversely affect the prevailing market price of the IDSs, the shares of our common stock and our notes and could impair our ability to raise capital through future sales of our securities.

We may issue shares of our common stock and 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 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, notes or other securities in connection with any such acquisitions and investments.

Our organizational documents 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 by-laws 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 organizational documents provide that stockholders generally may not act by written consent and only stockholders representing at least 50% in voting power may request that our board of directors call a special meeting. Our organizational documents also authorize 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 preferred stock and any other class or series of preferred stock that may be issued in the future.

Cautionary Statement Regarding Forward-Looking Statements

All statements other than statements of historical fact are “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 “may,” “estimate,” “continue,” “expect,” “intend,” “plan,” “believe,” “project,” “anticipate” and similar statements of forward-looking nature identify forward-looking statements.

Although we believe that the expectations reflected in our forward-looking statements are reasonable, 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:

our high degree of leverage and significant debt service obligations;

any future changes in government regulation;

the highly competitive nature of the seafood industry;

the risk that the notes represented by the IDSs will not be treated as debt;

the risk of a significant decline in the market price of our products;

the risk of a decline in the population and biomass of pollock, other groundfish and catfish stocks in the fisheries in which we operate;

environmental conditions and regulations;

the risk of increased litigation against us;

the risk of a natural calamity affecting the U.S. Bering Sea and/or any of our vessels; and

the risk of Japanese currency fluctuations.

We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

Use of Proceeds

The table below sets forth, as of December 31, 2003, and based on the assumptions noted below, our estimate of the sources and uses of funds required to effect the transactions contemplated hereby. See “Detailed Transaction Steps.” Actual amounts will vary from the amounts shown below.

Sources and Uses

(In millions)


Sources

New credit facilities	$	245.0
Repayment of management loan		6.2
IDSs sold hereby		550.0
Notes sold separately (not represented by IDSs)		33.1

Total sources of funds	$	834.3


Uses
Repayment of existing credit facility(1)	$	352.3
Purchase of existing senior subordinated notes(2)		175.0
Payment of accrued interest on existing senior subordinated notes(3)		4.0
Tender premium for existing senior subordinated notes		35.2
Redemption of preferred equity units and subordinated notes of Holdings		34.7
Fees and expenses(4)		46.7
Proceeds to the current owners of ASLP and Holdings(5)		186.4

Total uses of funds	$	834.3

(1)	Represents $39.5 million outstanding on our existing variable rate revolving credit facility expiring in 2007 with a current effective interest rate of 4.61% and $312.8 million on variable rate term loans with current interest rates ranging from 4.17% to 4.42%.

(2)	Represents the $175.0 million aggregate principal amount of our outstanding 10¹/8% senior subordinated notes due 2010.

(3)	Represents the amount of accrued interest on our $175.0 million outstanding 10¹/8% senior subordinated notes.

(4)	Includes an estimated $28.5 million payable to the underwriters of this offering, approximately $6.0 million payable to the arrangers and lenders under our new credit facilities and approximately $12.2 million in other professional fees, excluding $4.8 million paid through December 31, 2003.

(5)

Includes approximately $43.5 million, $43.4 million and $68.6 million payable to Centre Partners, Bernt O. Bodal and Coastal Villages, respectively, out of the proceeds of this offering. These amounts will be adjusted at the closing of this offering depending on the balance of the credit facility, the size and price of the initial public offering and the actual fees and expenses.

Dividend Policy and Restrictions

Upon completion of this offering, our board of directors will adopt a dividend policy pursuant to which, in the event and to the extent we have cash that is available for distribution to the holders of shares of our capital stock as of the end of any fiscal quarter, and subject to applicable law and limitations described below, our board of directors will declare cash dividends per share on our common stock equal to ¹/4 of $0.875 per share and cash dividends per share on our Class A common stock equal to ¹/4 of $1.034 per share. The expected initial dividend rate on the Class A common stock is expected to produce an overall yield on the Class A common stock equivalent to the initial yield on the IDSs. We will pay those dividends on or about March 15, June 15, September 15 and December 15 of each year to holders of record on the 5th day of such month or the immediately preceding business day. To the extent that our subsidiaries have available cash for distribution, and subject to applicable law and the terms of their indebtedness, we will cause our subsidiaries to distribute funds to us in respect of our equity interests sufficient to permit us to pay the dividends described in the preceding sentence.

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. In the event that in any quarter available cash for distribution is insufficient to pay the targeted dividends on both the common stock and the Class A common stock, our organizational documents will provide that the dividends on each class would be reduced by the same percentage until the aggregate dividends paid in the quarter equaled the available cash for distribution. In the event that in any quarter available cash for distribution is greater than the targeted dividends on both the common stock and the Class A common stock, our organizational documents will provide that the dividends on each class would be increased by the same percentage.

The indenture governing the notes restricts our ability to declare and pay dividends as follows:

The maximum amount of dividends that we may pay for any fiscal quarter may not exceed ¼ of the sum of (A) the total number of the Issuer’s shares outstanding (calculated assuming all shares of class A common stock have been converted into IDSs and adjusted for stock splits and similar transactions) multiplied by the sum of (1) $0.875 plus (2) 90% of the Issuer’s Distributable Cash Per Share in excess of $0.875 for the twelve-month period ended on the last day of such fiscal quarter, plus (B) the Class A Common Stock Adjustment Amount, provided that the aggregate amount of dividends paid in any twelve-month period may not exceed . “Distributable Cash Per Share” will be defined in the Indenture as the ratio of (x) adjusted EBITDA of the Issuer for the twelve-month period ended on the last day of the most recent fiscal quarter less (i) consolidated interest expense of the Issuer for such period (exclusive of amortization of debt issuance costs and other non-cash interest expense), (ii) capital expenditures incurred in such period to replace old, worn-out, damaged or obsolete equipment, and (iii) income, value added and similar taxes and tax distributions paid in such period, divided by (y) the total number of shares of common stock outstanding on the last day of such period, all calculated assuming the conversion of all shares of Class A common stock and all ASLP units into IDSs; “Class A Common Stock Adjustment Amount” is defined as the total number of shares of the Issuer’s class A common stock outstanding at the time of determination (as adjusted for stock splits and similar transactions) multiplied by $0.04, and multiplied by the percentage of increase or decrease of dividends on the Issuer’s common stock in such fiscal quarter. See “Description of Notes—Certain Definitions.”

the Issuer may pay dividends for any fiscal quarter not less than 60 days after the end of such fiscal quarter if the interest coverage ratio of Holdings for the twelve-month period ended on the last day of such fiscal quarter is equal to or greater than the following dividend suspension thresholds:


Period Ended On		Dividend Suspension Threshold
Issue date through June 29, 2005		1.75 to 1
June 30, 2005 and thereafter		1.85 to 1

the Issuer may not pay any dividends while interest on the notes is being deferred or, after the end of any interest deferral period, so long as any deferred interest has not been paid in full; and

the Issuer may not pay any dividends if a default or an event of default under the indenture governing the notes has occurred and is continuing.

In addition, our new credit facilities will provide that ASG may not make distributions to enable us to pay dividends if and for so long as (a) a default or an event of default under the new credit facilities has occurred and is continuing, (b) Holdings has any deferred and unpaid interest outstanding on the Holdings notes, or (c) the interest coverage ratio of Holdings is less than the dividend suspension thresholds described under “Description of Certain Indebtedness—New Credit Facilities” (or Holdings fails to timely deliver financial statements demonstrating compliance with such ratio). The dividend suspension thresholds in our new credit facilities are on substantially similar levels as the thresholds contained in the indenture governing the notes.

Under our new credit facilities, the amount that may be distributed by ASG and Holdings as voluntary dividends for any fiscal quarter may not exceed (A) Holdings’ adjusted EBITDA for the twelve-month period ended on the last day of such quarter (calculated excluding all non-wholly-owned subsidiaries except to the extent of cash dividends received from such subsidiaries), less cash interest expense (exclusive on interest expense on the Holdings notes), maintenance capital expenditures (with a minimum deduction for maintenance capital expenditures of $6.0 million), certain administrative costs of the Issuer, Holdings and ASLP, fees and expenses related to acquisition, merger and consolidation transactions, scheduled principal payments on our indebtedness and income taxes or tax distributions net of tax refunds or tax rebates (we refer to the amount described in this clause (A) as “available cash”), minus (B) interest expense on the Holdings notes, minus (C) voluntary dividends paid in respect of the three immediately preceding fiscal quarters, plus (D) available cash that was accumulated after the closing date but was not distributed in a prior period, minus (E) investments in lieu of voluntary dividends, and plus (F) the initial adjustment amount that is initially set at $7.5 million, subject to reduction to $5.0 million on June 30, 2006, to $2.5 million on June 30, 2007, and to zero on June 30, 2008, and subject to reduction by all voluntary dividends in excess of amounts that would be permitted by clauses (A) through (E) above. See “Interest and Dividend Payments to IDS Holders” for a calculation of distributions to IDS holders on a pro forma basis.

Our board of directors may, in its discretion, amend or repeal our dividend policy. Future dividends with respect to shares of our capital stock 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, if any, for the then current and/or immediately preceding fiscal years. Our board of directors may decrease the level of dividends provided for in our existing dividend policy or discontinue entirely the payment of dividends.

During 2002 and 2003, Holdings distributed to its equity owners approximately $230.9 million and $4.8 million, respectively. The 2002 amount included $163.7 million distributed in connection with the April 2002 recapitalization of Holdings and its affiliates.

Capitalization

The following table sets forth our cash and cash equivalents and capitalization as of December 31, 2003 on an actual basis for Holdings and on a pro forma as adjusted basis for the Issuer to give effect to this offering, including the use of proceeds from this offering, our recapitalization and the consent solicitation and tender offer and to give effect to ASG’s new credit facilities.


	As of December 31, 2003
	Holdings			Adjustments			Pro Forma Issuer As Adjusted
	(in thousands)
Cash	$	5,706		$	1		$	5,707

Restricted cash	$	1,500		$	—		$	1,500

Long-term debt, including current portion
Current maturities of long-term debt	$	15,929		$	(15,929	)	$	—
Senior debt, net of current maturities		336,353			(336,353	)		—
New credit facilities		—			245,000			245,000
Existing senior subordinated notes		175,000			(175,000	)		—
% notes represented by the IDSs		—			204,060			204,060
% notes sold separately (not represented by IDSs)		—			33,123			33,123
% Holdings notes held by ASLP		—			77,535			77,535

Total long-term debt		527,282			32,436			559,718

Notes payable to related parties		28,467			(28,467	)		—

Exchangeable Class A common stock, $0.01 par value per share—issued and outstanding: 4,406,849 shares		—			16,520			16,520

Preferred stock $0.01 par value per share—issued and outstanding: 3 shares		—			—			—
Members’/shareholders’ deficit(1)(2)		(157,265	)		(19,740	)		(177,005	)

Total capitalization	$	398,484		$	749		$	399,233

(1)

The accumulated deficit includes the deficit balance of ASLP, the minority interest holder.

(2)

Includes 35,182,684 shares of common stock with a par value of $0.01 per share.

Pro Forma Dilution

Dilution is the amount by which the portion of the price paid by purchasers of IDSs in the offering that is allocated to our shares of common stock exceeds the net tangible book value or deficiency per share of our common stock after the offering. Net tangible book value or deficiency per share of our common stock is determined at any date by subtracting our total liabilities from the total book value of our tangible assets and dividing the difference by the number of shares of common stock deemed to be outstanding at that date.

For purposes of calculating dilution below, we have assumed that as of December 31, 2003 (a) all ASLP units and all Class A common shares had been exchanged for IDSs simultaneously with the closing of this offering and (b) 51,399,049 shares of our common stock were outstanding.

The net tangible book deficiency of Holdings as of December 31, 2003 was approximately $325.3 million, or $6.33 per share of the Issuer’s common stock. After giving effect to our receipt and intended use of approximately $539.1 million of estimated net proceeds (after deducting estimated underwriting discounts and commissions and offering expenses) from our sale of IDSs and notes in this offering, the increase in our aggregate consolidated indebtedness, and the issuance and redemption of Holdings units included in the transactions to be consummated in connection with this offering, our pro forma as adjusted net tangible book deficiency as of December 31, 2003 would have been approximately $332.9 million, or $6.48 per share. This represents an immediate decrease in net tangible book value of $0.15 per share of the Issuer’s common stock to existing owners and an immediate dilution of $17.08 per share of the Issuer’s common stock to new investors purchasing IDSs in this offering. As a result of this deficiency, the face amount of notes will exceed the net book value of tangible assets by $1,005 per $1,000 face amount of notes.

The following table illustrates this substantial and immediate dilution to new investors:


	Per Share of Common Stock
Assumed initial public offering price of common stock represented by IDSs	$	10.60
Net tangible book deficiency of Holdings as of December 31, 2003		(6.33	)
Decrease per share attributable to assumed exchange of ASLP units for IDSs		(3.68	)
Decrease per share attributable to loss on debt repayment, equity offering costs and reduction of deferred/financing costs, net of reduction of deferred tax liabilities		(0.93	)
Decrease per share attributable to the issuance of IDS notes on the assumed exchange of Class A common stock for IDS		(0.32	)
Decrease per share attributable to notes payable and derivative financial instruments distributed for ASLP		(2.18	)
Decrease per share attributable to cash distribution made to existing owners		(3.64	)

Pro forma as adjusted net tangible book value after this offering	$	(6.48	)

Dilution in net tangible book value per share to new investors	$	17.08

The following table summarizes on a pro forma basis as of December 31, 2003:

the total number of shares of our common stock represented by IDSs (assuming all ASLP units and shares of Class A common stock had been exchanged for IDSs);

the total consideration paid to us by our existing owners (net of distribution paid by us to our existing owners) and the total consideration paid to us by new investors, before deducting the estimated underwriting discounts and commissions and offering expenses payable by us in connection with the offering; and

the average price per share of common stock paid by new investors and our existing owners:


	Shares of Common Stock Purchased			Net Consideration			Average Price Per Share of Common Stock
	Number	Percent		Net Consideration			Average Price Per Share of Common Stock
New investors	33,536,585	65.2	%	$	355,487,801		$	10.60
Existing owners	17,862,464	34.8		$	0.00	(1)	$	0.00	(1)

	51,399,049	100.0	%

(1)	Our existing owners have invested approximately $73.8 million through December 31, 2003, and have received in excess of that amount in the form of distributions.

Selected Historical Financial Information for Holdings and Selected Pro Forma Financial Information for the Issuer

The following selected historical consolidated financial information for Holdings as of December 31, 2002 and 2003 and the years ended December 31, 2001, 2002 and 2003 has been derived from our audited consolidated financial statements included elsewhere in this prospectus. See Note 1 to Holdings’ audited consolidated financial statements. The following selected historical consolidated financial data for Holdings as of December 31, 2000 and 2001 and for the period January 28 through December 31, 2000 and for the predecessor business, the period January 1 through January 27, 2000, has been derived from our consolidated financial statements which are not included in this prospectus.

The following pro forma financial information for the Issuer has been derived by the application of pro forma adjustments to our historical consolidated financial statements included elsewhere in this prospectus. The pro forma consolidated statement of operations data assumes the Issuer was formed on January 1, 2003 and gives effect to the financing transactions described under “Capitalization” and the application of the proceeds therefrom as if all these transactions had been consummated on January 1, 2003. The unaudited pro forma balance sheet data assumes the financing transactions described under “Capitalization” and the application of the proceeds therefrom as if these transactions had been consummated on December 31, 2003.

The audited consolidated financial statements do not purport to project our results of operations or financial position for any future period or date. Assumptions underlying the pro forma adjustments are described in the notes to the unaudited pro forma condensed consolidated financial statements, which should be read in conjunction with this pro forma financial information. We believe that the assumptions used provide a reasonable basis for presenting the significant effects directly attributable to these transactions; however, this pro forma financial information should not be considered indicative of actual results that would have been achieved had the financing transactions been consummated on the date or for the periods indicated and do not purport to indicate consolidated balance sheet data or results of operations as of any future date or for any future period.

The following selected historical and unaudited pro forma financial information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Holdings’ consolidated financial statements and related notes and the unaudited condensed consolidated pro forma financial statements and related notes included elsewhere in this prospectus.

Selected Historical and Pro Forma Financial Information


	Predecessor Business(1)						American Seafoods Holdings LLC
																			Pro Forma
	Year Ended December 31,			January 1 Through January 27,			January 28 Through December 31,			Year Ended December 31,(2)(3)									Issuer Year Ended December 31,
	1999			2000			2000			2001			2002			2003			2003
	(dollars in thousands)						(dollars in thousands)
Statement of Operations Data:
Total revenue	$	240,715		$	9,719		$	252,346		$	336,839		$	332,872		$	411,363		$	411,363
Gross profit		89,346			(1,953	)		100,370			127,239			126,481			132,066			132,066
Gross margin		37.1	%		(20.1	)%		39.8	%		37.8	%		38.0	%		32.1	%		32.1	%
Operating profit		49,179			(4,334	)		29,596			35,436			58,975			62,895			62,895
Income before income taxes and minority interest		9,923			1,828			10,448			18,009			22,611			14,327			4,492
Net income		6,262			1,190			7,220			20,078			22,253			12,527			4,313
Basic and diluted income per share:
Common stock																				0.08
Class A common stock																				0.09
Statement of Cash Flows Data:
Cash flows from operating activities		18,510			20,685			44,174			84,588			96,678			47,154
Cash flows from investing activities		255			(626	)		(369,847	)		(13,648	)		(58,634	)		(14,652	)
Purchases of property, vessels and equipment		(6,506	)		(626	)		(7,363	)		(9,171	)		(9,431	)		(12,323	)
Cash flows from financing activities		(18,752	)		(4,973	)		330,042			(73,014	)		(34,736	)		(32,399	)
Other Financial Data:
EBITDA(4)		47,122			7,809			106,209			121,385			102,865			101,023			101,023
Adjusted EBITDA(4)		60,234			(2,572	)		86,221			108,765			113,012			113,087			113,087
Ratio of earnings to fixed charges(5)											1.51			1.57			1.32			1.08

	December 31,						December 31,												Pro Forma Issuer December 31,
	1999						2000			2001			2002			2003			2003
	(dollars in thousands)						(dollars in thousands)
Balance Sheet Data:
Property, vessels, and equipment, net	$	224,566					$	267,868		$	254,341		$	253,090		$	225,971		$	225,971
Total assets		321,746						527,179			522,846			529,550			527,524			508,557
Total interest bearing obligations		230,497						369,072			326,499			574,120			555,749			559,718
Members interest/Equity (deficit)		(1,948	)					92,959			119,235			(125,201	)		(157,265	)		(177,005	)

(1)

Our business was acquired by Centre Partners and others through ASLP in a transaction accounted for as a purchase on January 28, 2000. The purchase accounting resulted in all assets and liabilities being recorded at their estimated fair values. Also, the method of accounting for major scheduled vessel maintenance and derivative instruments was changed effective with the purchase. Accordingly, the predecessor business amounts are not comparable to Holdings amounts.

(2)	Effective January 1, 2002, we changed our method of accounting for goodwill and other intangible assets. See Note 1 to consolidated financial statements.

(3)	In October 2001, we reassessed the estimated useful lives of cooperative fishing rights increasing the amortization period. See Note 1 to consolidated financial statements.

(4)

We consider EBITDA to be a measure of liquidity. Accordingly, EBITDA is reconciled to operating cash flows as follows:


	Year Ended December 31,
	2001			2002			2003
	(dollars in thousands)
Cash flows from operating activities	$	84,588		$	96,678		$	47,154
Interest expense, net of non-cash interest		18,715			34,348			34,958
Net change in operating assets and liabilities		899			(15,077	)		29,886
Income tax provision (benefit)		(1,898	)		759			1,621
Deferred income tax benefit (provision)		6,607			(3,696	)		(1,202	)
Unrealized foreign exchange gains/losses, net		12,976			10,763			(10,915	)
Equity-based compensation		(527	)		(5,600	)		(672	)
Loss from debt repayment and related write-offs		—			(15,711	)		—
Other		25			401			193

EBITDA	$	121,385		$	102,865		$	101,023

The consummation of the transactions contemplated by this offering will not have a material impact on EBITDA before minority interest. EBITDA as calculated above differs from Adjusted EBITDA as defined in our note indenture and new credit facilities. Adjusted EBITDA as defined in our note indenture and new credit facilities means net income from continuing operations before interest expense, income tax provision or benefit, depreciation, amortization, net unrealized foreign exchange gains or losses, net gains and losses from derivatives relating to our equity and debt, minority interest in income or loss of consolidated entities, equity-based compensation, fees and expenses related to acquisition, merger or restructuring transactions, and any loss from debt repayments and related write-offs. If our Adjusted EBITDA were to decline below certain levels, covenants in our indebtedness that are based on Adjusted EBITDA, including our interest coverage ratio and fixed charge coverage ratio covenants, could result in, among other things, a default or mandatory prepayment under our new credit facilities, our inability to pay dividends or a requirement that we defer interest payments on the notes. These covenants are summarized under “Description of Certain Indebtedness” and “Description of Notes.” A reconciliation of EBITDA to Adjusted EBITDA is as follows:


									Pro Forma
	Year Ended December 31,								Year Ended December 31,
	2001			2002			2003		2003
	(dollars in thousands)
EBITDA	$	121,385		$	102,865		$	101,023	$	101,023
Unrealized foreign exchange gains/losses, net		(12,976	)		(10,763	)		10,915		10,915
Equity-based compensation		527			5,600			672		672
Loss from debt repayment and related write-offs		—			15,711			—		—
Transaction related costs		—			—			298		298
Minority interest in income (loss) of subsidiary		(171	)		(401	)		179		179

Adjusted EBITDA	$	108,765		$	113,012		$	113,087	$	113,087

(5)

Ratio of earnings to fixed charges is calculated as the total of income before income taxes, minority interest, fixed charges, amortization of capitalized interest, less interest capitalized, divided by the total of interest capitalized and interest expense, including amortization of deferred financing fees and discounts on debt securities.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with Holdings’ consolidated financial statements and the notes to those statements and other financial information appearing elsewhere in this prospectus. This prospectus contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those indicated in forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Statements.”

Business Overview

The most significant portion of our revenues and profitability is derived from our ocean harvested whitefish segment. The performance of our ocean harvested whitefish segment largely depends on the amount of pollock, cod and hake resources that we harvest each year. During 2003, we harvested approximately 328,000 metric tons in our ocean harvested whitefish segment.

Pollock represents the most significant portion of our harvest and the most significant portion of our net sales both in terms of volume and revenues. In 2003, we sold approximately 72,300 metric tons of flesh product, which represented approximately 82% of the flesh products produced in our ocean harvested whitefish segment. Some of our products exhibit commodity like pricing characteristics. These prices fluctuate from season to season and year to year as a result of factors such as market conditions, inventory levels and production volumes.

We operate in three primary U.S. fisheries, the U.S. Bering Sea pollock fishery, the U.S. Bering Sea Pacific cod fishery and the U.S. hake fishery. For each U.S. fishery, the fishery management council determines the annual total allowable catch, which is the total weight of fish that can be harvested. In addition to the amount of the total allowable catch that we harvest, we supplement our pollock and longline cod harvest by purchasing community development quota allocated to Alaska Community Development Groups.

2003 Overview

Our operating profit in 2003 increased $3.9 million, or 6.6%, compared to our operating profit in 2002 because lower pollock surimi and roe prices and slower ocean harvested whitefish sales in 2003 were more than offset by the positive effects of the addition of a full year of operations of Southern Pride, a reduction in equity-based compensation, higher pollock recovery rates and an increase in our purchases of community development quota. In addition, a decrease in the price of roe products from 2002 to 2003 was more than offset by an increase in 2003 of roe recovery rates, which resulted in more finished roe product being available for sale during 2003. Excluding the $4.9 million reduction in equity-based compensation, our operating profit for 2003 decreased $1.0 million, or 1.6%, compared to 2002.

More specifically, our average yen-denominated pollock surimi prices declined from 278 yen per kilogram in 2002 to 222 yen per kilogram in 2003, or approximately 20%. Carry-over ocean harvested whitefish inventories increased from approximately 6,900 metric tons as of December 31, 2002 to approximately 19,700 metric tons as of December 31, 2003. In addition, we included catfish sales for the entire year in 2003 compared to the inclusion of catfish sales for less than one month in 2002 as the Southern Pride acquisition was completed in December 2002. Metric tons produced per metric ton of round weight harvested increased in 2003 by approximately 8% compared to 2002, resulting in more finished product available for sale. We also had an 11,000 metric ton increase in 2003 in our Community Development Quota that we purchased from Alaska Community Development Groups.

Largely as a result of lower pollock surimi prices and higher carry-over ocean harvested whitefish inventories, we would have been in violation of our leverage covenant under our existing credit agreement at September 30, 2003 and December 31, 2003. However, our employee bonuses were cancelled because of that potential violation and we also obtained a covenant modification from our bank lenders.

Corporate Structure

The Issuer was formed under Delaware law in May 2003.

Upon the completion of the transactions contemplated by this offering, the Issuer will be the sole general partner of Holdings. The Issuer will own directly or indirectly 74.0% of the equity of Holdings and 76.6% of the notes issued by Holdings, and ASLP will own the remainder of the equity and the notes issued by Holdings. Holdings will own 100% of the economic interests of ASG. ASG’s subsidiaries include: American Seafoods Company LLC, through which we conduct our at-sea pollock harvesting and processing operations; Pacific Longline Company LLC, through which we conduct our at-sea cod freezer-longliner operations; Southern Pride Catfish LLC, through which we harvest and process catfish; American Seafoods International LLC, through which we conduct our secondary processing and certain seafood trading activities; and The Hadley Group LLC, or Hadley Group, through which we purchase frozen fish products and sell them in the U.S., Canadian and European markets.

Corporate History

In January 2000, ASLP purchased from Norway Seafoods all of the outstanding stock of American Seafoods Company (now referred to as ASC, Inc.). The acquisition also involved the purchase of six additional catcher-processors, one catcher-vessel and certain assets of Frionor USA (now called American Seafoods International LLC). ASG was formed in connection with the acquisition. The acquisition was accounted for as a purchase, and all of the debt, assets and goodwill relating to the acquisition have been “pushed down” to ASG’s and Holdings’ balance sheets. The purchase accounting resulted in all assets and liabilities being recorded at their estimated fair values on that date. The aggregate purchase price for the acquisition was $477.9 million, including acquisition costs. The acquisition was financed through short-term seller financing, long-term debt and seller long-term subordinated promissory notes. In addition, ASLP issued a warrant for the purchase, at a future date, of additional partnership interests in ASLP to an affiliate of Norway Seafoods. The warrant entitled the holder to purchase ASLP partnership units at a price per unit equal to the amount per unit contributed at that time by the ASLP partners. The warrant was redeemed on October 4, 2002.

In August 2001, we, along with two other partners, formed PLC in order to acquire three freezer-longliner vessels. Our initial ownership through this transaction was 60% of PLC. Effective January 1, 2004 we purchased the third party minority interest in PLC and increased our ownership to 100%. PLC harvests and processes ocean harvested whitefish, primarily cod, in the U.S. Bering Sea.

Effective December 16, 2002, we purchased substantially all of the assets of Southern Pride Catfish LLC and Southern Pride Catfish Trucking, Inc., or collectively Southern Pride. These entities are engaged in the business of catfish harvesting, processing and distribution. The acquired assets included, among other things, certain real

property, fixtures, equipment, accounts receivable, intellectual property, customer and other contracts, and cash on hand. The purchase price was approximately $41.8 million in cash. In addition, we assumed substantially all of the liabilities of Southern Pride, other than certain specifically excluded liabilities, and paid bank debt of Southern Pride in the amount of approximately $2.4 million. The acquisition was financed with additional indebtedness under our existing credit facility.

Revenues and Expenses

Ocean Harvested Whitefish Revenues. Revenues in our ocean harvested whitefish segment are primarily driven by the following factors:

the volume of pollock and other whitefish harvested annually by our catcher-processors and freezer-longliners;

the quantity of finished product we are able to produce (determined by the flesh and roe recovery rates);

the prevailing market prices for the pollock products we sell, such as roe, surimi (a fish protein paste used in products such as imitation lobster and crabmeat) and fillet block;

the yen-dollar exchange rate; and

volume throughput for our secondary processing of ocean harvested whitefish.

Harvest volumes. In addition to the portion of the directed pollock catch allocated to us under the Pollock Conservation Cooperative agreement, we historically have purchased additional pollock quota from other industry participants up to the 17.5% limit of the directed pollock catch. We supplemented our harvest in 2001, 2002 and 2003 by purchasing 28.0%, 28.0% and 36.4%, respectively, of the community development quota from Alaska Community Development Groups, which does not count against the 17.5% limitation. See “Industry and Regulatory Overview—Groundfish—Pollock Allocation.”

In October 2003, we entered into an agreement with Bristol Bay Economic Development Corporation, or Bristol Bay, one of the six Alaska Community Development Groups that is allocated community development quota and from whom we have purchased community development quota in the past. Under this agreement, Bristol Bay has granted us an exclusive license to harvest all of the pollock resource allocated to it under the Alaska Community Development Quota program for the 2004 and 2005 pollock seasons. Bristol Bay’s pollock quota for the 2004 and 2005 pollock seasons will be 2.1% of the total allowable catch, which represents approximately 21.0% of the community development quota. Our agreement with Bristol Bay is limited to a two-year period because the State of Alaska Community Development Quota program guidelines do not allow royalty agreements to extend beyond the term of the current Community Development Quota allocation cycle, which expires at the end of 2005.

In connection with the purchase of Community Development Quota from Bristol Bay, we have agreed to issue to Bristol Bay at the closing of this offering a warrant to purchase IDSs at an exercise price equal to the initial public offering price, subject to certain conditions. The warrant will be for a number of IDSs representing an indirect interest in approximately 1% of Holdings’ debt and equity at the closing of this offering. The warrant will be exercisable on one occasion during any period in which the exchange warrants issued to ASLP partners and option holders are otherwise exercisable, but no earlier than the first anniversary of the issuance of the warrant and no later than December 31, 2006, and only if Bristol Bay grants us an exclusive license to harvest all of the pollock total allowable catch allocated to it under the next Community Development Quota allocation cycle.

Purchases of fish quota from related parties comprised 72.4%, 79.7% and 62.6% of total fish purchases in 2001, 2002 and 2003, respectively. These related party purchases represented approximately 47,250 metric tons of quota in 2003.

Recovery rates. Increases in flesh and roe recovery rates, which represent the percentage of finished product produced from a whole fish, result in higher finished product volumes. Flesh recovery rate means the weight of at-sea processed products, other than fishmeal and roe, relative to the weight of fish harvested, expressed as a percentage. Roe recovery rate means the weight of at-sea processed roe, relative to the weight of fish harvested, expressed as a percentage.

Market prices. Market prices for our ocean harvested whitefish products are primarily influenced by the aggregate supply of products produced in any given year, the anticipated inventory carry over for that year and changes in demand.

Over the last five years, our seasonal average pollock surimi prices have fluctuated within a range of approximately 200 to 300 yen per kilogram. In the second half of 2003, our average pollock surimi price was at the low end of that range. In addition to the grade mix composition, some of the factors that influence pollock surimi prices are anticipated seasonal production, overall inventory levels and buyers’ speculation of anticipated price levels. See “Risk Factors—Risks Relating to Our Business—Our products are subject to pricing volatility, and the prices of our pollock roe and pollock surimi products, which declined significantly in 2003, may remain at their current low levels or decline further, which would significantly reduce our profitability.”

Prices for surimi and roe products generally fluctuate year to year and do not necessarily follow a typical price cycle trend. For example, a 29.7% increase in our surimi prices, denominated in Japanese yen, from 2001 to 2002 was primarily due to market conditions, but also to a slightly higher grade mix of surimi in 2002. During the second half of 2003, the average price of our yen denominated surimi sales had decreased approximately 28.9% compared to the same period in 2002 primarily due to market conditions and a lower grade mix produced. The 2003 “A” season roe price of ¥1,778 per kilogram declined from the 2002 “A” season roe price of ¥1,906 per kilogram due primarily to a lower grade mix produced in 2003. However, the decline in roe price in 2003 was more than offset by higher 2003 roe recovery rates as compared to 2002, which resulted in slightly higher roe revenues in 2003. While pollock roe prices have experienced volatility in recent years, on a grade by grade basis, roe prices have remained relatively stable with the exception of 2000, which was an unusual year due largely to market misperceptions of supply. With the introduction of long-term supply contracts for deepskin product in early 2000, the price for deepskin has dropped from an annual average price of $1.59 per pound in 1999, to $1.32 per pound in 2000, and has leveled out at about $1.25 per pound in 2001 through 2003. Average “B” season prices through December 31, 2003 for our pollock PBO (pin bone out) block product, which is predominately sold to European customers, declined approximately 13% compared to the same period in 2002, due primarily to market conditions.

Below is a chart illustrating our average prices achieved for the years 1999 through 2003 for pollock surimi, pollock roe, deepskin and pollock block (pin bone out) products. The surimi and roe prices are noted in yen per kilogram, which is the unit price we receive from our Japanese customers.


	Average price
	1999		2000		2001		2002		2003
Pollock surimi ¥/kg	¥	285	¥	218	¥	212	¥	278	¥	222
Pollock roe ¥/kg	¥	1,865	¥	2,856	¥	2,247	¥	1,906	¥	1,778
Deepskin $/lb	$	1.59	$	1.32	$	1.25	$	1.24	$	1.25
Pollock block pin bone out $/lb	$	1.33	$	0.80	$	0.89	$	1.06	$	1.04

Average roe prices are for “A” season only as this represents more than 95% of the total roe value for each year.

Exchange rate effects. Because we sell large quantities of roe and surimi to Japanese customers, a significant portion of our revenue is denominated in Japanese yen. This means that we could be at risk that any increase or decrease in the value of the yen relative to the dollar would increase or reduce, respectively, the amount of dollar revenues we record on the sales of our products in Japan. In order to mitigate the potentially adverse effect of

fluctuations in the yen to U.S. dollar spot exchange rate, we enter into forward currency contracts. It is our risk management policy to hedge approximately 80% of our forecasted yen sales over the next 12 months, 65% over months 13 to 24, 50% over months 25 to 36, and 35% over months 37 to 48.

Other Seafood Products Revenues. Revenues from our other seafood products segment are primarily a function of the volume of catfish and scallops that we process. The key performance driver for our other seafood products operations are the purchase price of raw materials, the volume of production and the market prices of our catfish and scallop products.

Ocean Harvested Whitefish Expenses. The operating cost structure of the ocean harvested whitefish operations include four main cost categories:

variable costs driven by revenue or product volume, such as crew compensation, quota purchases, product freight and storage, marketing commissions, packaging and additives;

vessel-related depreciation;

fixed costs that are assumed to be incurred whether or not the vessel is deployed, such as insurance, repair and maintenance, nets and gear supplies, moorage, equipment rental, crew travel and general supplies; and

daily operating costs driven by vessel operating days, such as fuel, galley supplies, observers and technicians.

Costs of sales includes operating costs such as crew and factory personnel compensation, fish purchases, vessel fuel, other raw material purchases, packaging, insurance, other operating related expenses and depreciation applicable to property, vessels and equipment used in production. Selling costs include product freight, storage, and marketing costs. General and administrative expenses include employee compensation and benefits, rent expense, professional fees, association dues and other expenses, such as business development, office equipment and supplies.

After depreciation expense, crew compensation represents the largest operating cost for the vessel operations and is a variable cost, structured to reward each crew member based upon a pre-season estimated value per product applied to actual production and actual roe value achieved by their vessel. Quota purchase costs, the second largest operating cost after depreciation expense, are calculated as an amount per ton harvested and are incurred when we purchase quota amounts from our Alaska Community Development Group partners, catcher vessel owners and other third party fishery participants. Product freight is incurred when we transport the product to either our customer or a cold storage facility. Storage costs are incurred for product entering a cold storage facility.

Other Seafood Products Expenses. Operating costs related to our other seafood products operations are principally comprised of the cost of raw material purchases and labor. In addition, these costs include depreciation expense related to equipment and facilities used for processing and transportation.

Results of Operations

Year Ended December 31, 2003 Compared to Year Ended December 31, 2002.

Revenues. Revenues for the year ended December 31, 2003 increased $78.5 million, or 23.6%, to $411.4 million from $332.9 million for the year ended December 31, 2002. This increase almost entirely resulted from the inclusion of catfish sales for the entire year in 2003 compared to the inclusion of catfish sales for less than one month in 2002. While total revenues increased 23.6% for the year ended December 31, 2003, ocean harvested whitefish revenues for the same period decreased $31.8 million to $280.5 million from $312.3 million for the year ended December 31, 2002, primarily due to lower sales of surimi resulting from an approximately 20% decrease in

the average yen per kilogram price of surimi sold. The decrease in the revenues of our ocean harvested whitefish segment also resulted from a 17.7% decrease in the volume of surimi sold because of lagging sales. Other seafood products revenues for such period increased $110.3 million to $130.9 million from $20.6 million for the year ended December 31, 2002, almost entirely due to the inclusion of catfish sales in our revenues for the current year as a result of the December 2002 acquisition of Southern Pride.

Cost of Sales. Cost of sales for the year ended December 31, 2003 increased $72.9 million, or 35.3%, to $279.3 million from $206.4 million for the year ended December 31, 2002. Ocean harvested whitefish cost of sales for the year ended December 31, 2003 decreased $23.4 million to $165.1 million from $188.5 million for the year ended December 31, 2002, primarily due to the lower sales of these products in 2003 when compared to 2002. Other seafood products cost of sales for the year ended December 31, 2003 increased $96.3 million to $114.2 million from $17.9 million for the year ended December 31, 2002, almost entirely due to the inclusion of catfish operations in 2003.

Gross profit for the year ended December 31, 2003 increased $5.6 million, or 4.4%, to $132.1 million from $126.5 million for the year ended December 31, 2002. Gross margins as a percent of sales for the year ended December 31, 2003 decreased to 32.1% from 38.0% for the year ended December 31, 2002, primarily due to a higher proportion of lower margin other seafood products sales in 2003 as compared to 2002. Ocean harvested whitefish gross margins increased in 2003 to 41.1% from 39.4% in 2002 primarily due to a higher proportion of higher margin roe sales to total sales, partially offset by lower margins on surimi sales. Other seafood products gross margins for the year ended December 31, 2003 remained relatively consistent at 12.8% compared to 13.2% for the year ended December 31, 2002.

Selling, General and Administrative Expenses. For the year ended December 31, 2003, selling, general and administrative expenses including equity-based compensation increased $1.0 million, or 1.6%, to $61.7 million from $60.7 million for the year ended December 31, 2002. This increase was primarily due to the addition of the Southern Pride operations, partially offset by a decrease in equity-based compensation charges. Equity-based compensation charges were higher in 2002 primarily as the result of the April 2002 recapitalization, and the vesting of certain options related to the partial sale of units held by one of our partners. Selling, general and administrative costs, other than equity-based compensation, as a percent of sales for the year ended December 31, 2003 decreased to 14.8% from 16.5% for the year ended December 31, 2002. This decline in selling, general and administrative costs, other than stock compensation, as a percentage of sales reflects increased sales volume in 2003 as compared to 2002 as a result of our acquisition of Southern Pride and the absence of management bonuses in 2003, as compared to $2.3 million of management bonus expenses in 2002. We eliminated our 2003 management bonuses in accordance with certain employment agreements and our general bonus policy, which does not require the payment of bonuses based on financial performance for any year in which there is or would be a covenant violation.

Amortization of Cooperative Rights and Intangibles, and Depreciation of Other Assets. Amortization includes the amortization related to cooperative rights and other intangibles. Amortization and depreciation of other assets for the year ended December 31, 2003 increased $0.7 million, or 10.3%, to $7.5 million from $6.8 million for the year ended December 31, 2002. This increase was primarily due to the amortization of other intangibles, which were purchased in connection with the acquisition of Southern Pride in December 2002 and the purchase of additional fishing rights in January 2003.

Interest Expense, Net (including related party interest). Net interest expense for the year ended December 31, 2003 increased $5.2 million, or 13.2%, to $44.7 million from $39.5 million for the year ended December 31, 2002. The increase in net interest expense was mainly attributable to the mezzanine financing entered into in October 2002, and the amendment to the term loan increasing amounts borrowed by $50.0 million related to the acquisition of Southern Pride, partially offset by a decline in interest rates.

Foreign Exchange Losses (Gains), Net. Net foreign exchange loss for the year ended December 31, 2003 was $4.0 million compared to a $19.0 million net foreign exchange gain for the comparable period in 2002. This

decrease of $23.0 was primarily attributable to unrealized losses, partially offset by unrealized gains recognized during the period related to the ineffective portion of our financial derivatives designated as hedges. The unrealized losses were primarily the result of a 9.9% decrease in the U.S. dollar versus the Japanese yen from 118.6 JPY per USD as of December 31, 2002 to 106.9 JPY per USD as of December 31, 2003 and a decrease in the forward points that result from the interest rate differential during the year ended December 31, 2003.

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001.

Revenues. Revenues for the year ended December 31, 2002 decreased $3.9 million, or 1.2%, to $332.9 million from $336.8 million for the year ended December 31, 2001. The decrease in revenues in 2002 was primarily due to lower roe pricing and lower Hadley Group related trade sales, partially offset by higher pricing of our block and surimi products. The price of roe achieved during our 2002 “A”-season was ¥1,906 as compared to ¥2,247 in 2001, or a decrease of approximately 15.2%. Hadley Group trade sales decreased by $13.8 million or approximately 49.5% due to global product supply constraints. We believe these same constraints that influenced the Hadley Group’s inability to obtain product for resale also contributed to our increased pricing for our pin bone out block products. Production of finished goods in metric tons decreased in 2002 compared to 2001 primarily as a result of lower hake production in 2002. Pollock production in 2002 decreased by less than 1% as compared to the 2001 pollock production.

Cost of Sales. Cost of sales for the year ended December 31, 2002 decreased $3.2 million, or 1.5%, to $206.4 million from $209.6 million for the year ended December 31, 2001. This decrease was primarily attributable to lower variable product costs such as packaging and additives resulting from selling approximately 9,300 fewer metric tons of at-sea processed finished product in 2002, as compared to a total of 100,200 metric tons in 2001, lower fuel costs due to a decrease in fuel prices, and lower fish cost for the Hadley Group due to a decline in fish purchases, partially offset by an increase in crew compensation due to the higher value per metric ton produced as a result of the higher surimi and block prices. The gross profit for the year ended December 31, 2002 decreased $0.7 million to $126.5 million from $127.2 million for the year ended December 31, 2001. Gross margin for the year ended December 31, 2002 increased to 38.0% from 37.8% for the year ended December 31, 2001 due principally to the decrease in Hadley Group trade sales which generate lower gross margins.

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the year ended December 31, 2002, including equity-based compensation, increased $2.8 million, or 4.8%, to $60.7 million from $57.9 million for the year ended December 31, 2001. These expenses increased primarily due to an increase in non-cash equity-based compensation expenses from $0.5 million for the year ended December 31, 2001 to $5.6 million for the year ended December 31, 2002, partially offset by lower freight related costs resulting from selling approximately 9,300 less metric tons of at-sea processed finished product in 2002 combined with lower logistical costs per unit achieved in 2002.

Amortization of Cooperative Rights, Intangibles and Goodwill and Depreciation of Other Assets. Amortization includes the amortization related to the cooperative rights, depreciation of office related assets and, through December 2001, amortization of goodwill recorded in connection with the January 2000 acquisition and depreciation of office related assets. Amortization expense for the year ended December 31, 2002 decreased $27.1 million, or 79.9%, to $6.8 million from $33.9 million for year ended December 31, 2001. This decrease was primarily attributable to an extension of the amortization schedule for cooperative rights, an intangible asset representing our allocation rights as a member of the Pollock Conservation Cooperative. From January 28, 2000 to October 31, 2001, the cooperative rights were amortized on a straight-line basis over 59 months, which was the remaining life of the Pollock Conservation Cooperative agreement. Beginning in November 2001, as a result of changes to the American Fisheries Act, we changed the amortizable life of the cooperative rights to 23.2 years, which matched the average remaining depreciable lives of our vessels. As of January 1, 2002, we adopted “Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets,” and ceased amortization of goodwill.

Interest Expense, Net (including related party interest). Interest expense is net of interest income of $0.2 million and $0.4 million in 2001 and 2002, respectively. Net interest expense for the year ended December 31,

2002 increased $4.6 million, or 13.2%, to $39.5 million from $34.9 million for the year ended December 31, 2001. The increase in net interest expense was mainly attributable to the increase in the principal balance on the senior bank debt resulting from the April 2002 recapitalization, the addition of $175.0 million principal amount related to the private offering of the existing senior subordinated notes, partially offset by declining variable interest rates applied to the senior bank debt. Interest expense for our revolving credit facility for the years ended December 31, 2002 and December 31, 2001 was $0.9 million and $1.6 million, respectively, including commitment fees. Interest expense for our two term loans was $14.1 million for the year ended December 31, 2002 and $15.1 million for the year ended December 31, 2001. In connection with the April 2002 recapitalization, we repaid all amounts outstanding under the bank credit facility that was in place at the time of the recapitalization, and entered into our existing credit facility. See “—Liquidity and Capital Resources—Our Indebtedness.”

Foreign Exchange (Losses) Gains, Net. Net foreign currency exchange gain for the year ended December 31, 2002 increased $1.3 million to $19.0 million from $17.7 million for the year ended December 31, 2001. Certain of our forward contracts are designated as hedges and the change in value related to the fluctuation in the value of the Japanese yen is not reflected in earnings. The net unrealized gains related to the ineffective portion (the time value) of the derivatives recognized in earnings for the years ended December 31, 2002 and December 31, 2001 were $18.3 million and $16.2 million, respectively. We recorded realized gains of $0.2 million and $3.0 million related to the change in the ineffective portion of the derivatives which settled during the years ended December 31, 2002 and December 31, 2001, respectively.

Seasonality

The U.S. Bering Sea pollock fishery is split into two distinct seasons, known as the “A” and “B” seasons. The “A” season opens in January and typically ends in April. During the “A” season pollock are spawning and therefore typically carry more high-value roe, making this season the more profitable one. During the “A” season we also produce other primary products such as surimi and fillet blocks, although yields on these products are slightly lower in “A” season compared to “B” season due to the prioritization of roe production during processing in the “A” season. Although the “A” season typically accounts for approximately 40% of our year’s total pollock harvest measured by weight, it represents a majority of our revenues generated in the same period due to the higher value of roe that is recovered during the “A” season.

The pollock “B” season occurs in the latter half of the year, typically beginning in July and extending through the end of October. The primary products produced in the “B” season are surimi and fillet blocks. The “B” season typically accounts for approximately 60% of our year’s total pollock harvest.

The freezer-longliner Pacific cod fishery is divided into two seasons. Of the annual quota, 60% is allocated to the “A” season and the remaining 40% is allocated to the “B” season. The “A” season begins January 1st and runs until the season quota is caught, and the “B” season begins in mid August and runs until the season quota is caught.

The table below shows our quarterly dispersion, in terms of percentage, for revenues and gross profit for the years ended December 31, 2001, 2002 and 2003:


	“A” Season				“B” Season
	Q-1		Q-2		Q-3		Q-4
Revenues:
2001	33	%	26	%	16	%	25	%
2002	25		30		22		23
2003	27		30		21		22
Gross profit:
2001	44	%	22	%	16	%	18	%
2002	33		29		24		14
2003	36		31		21		12

Our fishing seasons, including the important January-to-April pollock season, straddle more than one quarter. As a result, the timing of the recognition of significant amounts of revenue can vary from one quarter to another.

Financing Activities

On April 18, 2002, ASG issued and sold $175.0 million principal amount of 10¹/8% senior subordinated notes due 2010 (the existing senior subordinated notes) pursuant to Rule 144A and Regulation S of the Securities Act of 1933. The offering of these notes was part of a recapitalization involving Holdings and its affiliates. On November 20, 2002, ASG exchanged these notes through an exchange offer for notes registered with the SEC. Concurrently with the offering of these notes, ASG entered into its existing credit facility. Following the completion of the transactions contemplated by this offering, ASG will use the proceeds it receives from Holdings, together with borrowings under the new credit facilities, to repay substantially all outstanding borrowings under the existing credit facility and to repurchase all of the existing senior subordinated notes that are validly tendered and not withdrawn pursuant to the consent solicitation and tender offer. As part of the April 2002 recapitalization, we used the proceeds of the notes offering, together with borrowings of $325.9 million under the existing credit facility, to:

Repay all outstanding debt under our old credit facilities.

Repay all amounts outstanding (including accrued interest), under two senior subordinated promissory notes issued by our affiliates, ASC, Inc. and Holdings, to Norway Seafoods, the former owner of our business.

Pay related fees and expenses.

Distribute the remainder of the borrowed amounts to our equityholders.

In addition, we distributed to our equityholders any cash on hand on April 4, 2002 plus cash generated from our operations from April 4, 2002 to April 18, 2002. As a result, the aggregate amount of cash distributed to American Seafoods Consolidated LLC for distribution to the equity holders of its parent was approximately $203.8 million, including $5.7 million of fees paid out of the distribution.

On July 2, 2002, ASG loaned $6.0 million to Bernt O. Bodal to finance his purchase of equity interests in ASLP. The interest rate on this loan resets each January 1, April 1, July 1 and October 1 to the prime rate plus ¹/2 percent. The rate at December 31, 2003 was 4.50% per annum. Mr. Bodal is obligated to apply the amount of any proceeds, net of applicable taxes, of any dividends and distributions from ASLP or Holdings in connection with a public liquidity event or exercise of management options, whether currently owned or subsequently purchased and 25% of the gross amount of any management bonus paid, with any remaining balance due in 2012. The underlying loans are recourse to the assets of Mr. Bodal except that the recourse to assets other than ownership interests is eliminated in certain circumstances if the value of the underlying security becomes greater than four times the loan balance. In connection with the transactions contemplated by this offering, (i) all of ASG’s rights with respect to this loan will be distributed to Holdings and (ii) Mr. Bodal will repay this loan in full.

On October 4, 2002, three investment funds managed by Wasserstein & Co., which we refer to as the “U.S. Equity Partners Funds,” purchased from Holdings a combination of preferred equity securities and notes, and purchased from ASLP warrants to purchase ASLP units, for a total purchase price of $27.3 million. Proceeds from the sale were used by ASLP to redeem 44,828 ASLP units and a warrant to purchase 106,875 ASLP units, which were held by affiliates of Norway Seafoods. In the transactions contemplated by this offering, Holdings will use approximately $34.7 million of the proceeds received to redeem the preferred equity interests and notes held by the U.S. Equity Partners Funds. A portion of the U.S. Equity Partners Funds warrants will be exercised in connection with the offering and a portion will be amended to become exercisable for Holdings equity and then transferred to the Issuer in exchange for IDSs and cash. An aggregate of $6.6 million will be paid to the U.S. Equity Partners Funds in connection with the transfer or exercise of such warrants.

On October 28, 2002, Holdings loaned approximately $0.7 million to certain members of management of ASG to purchase ownership interests in ASLP from a selling partner. The loan bears an initial interest rate of 5.25% with

a requirement to reset the rate to the prime rate plus one-half percent per annum on January 1, April 1, July 1 and October 1 of each year that the loans are outstanding. The rate at December 31, 2003 was 4.50% per annum. Payments on the loans are required to be made from the net proceeds of any and all dividends and distributions with respect to the purchasers’ interests in ASLP and with 25% to 33% of the gross amount of any annual bonus paid or payable to such purchasers, and any outstanding balance is due in 2012. The underlying loans are full recourse to the assets of the purchasers, except that the recourse to assets other than ownership interests is eliminated if the value of the underlying security in ASLP becomes greater than four times the loan balance. All of the purchasers’ ownership interest in ASLP is pledged as collateral for the loans. In connection with the transactions contemplated by this offering, (i) immediately prior to the consummation of this offering, Holdings’ rights with respect to these loans will be distributed to ASLP and (ii) such members of management shall apply any distributions received by them on their ASLP units as a result of the transactions consummated in connection with this offering, after payment of applicable income taxes, to repay such loans. We expect these loans to be repaid in full as a result of the transactions consummated in connection with this offering.

On November 18, 2002, we forgave the exercise price on certain Series C options that had been repriced to $0.01 in connection with the recapitalization of Holdings and its affiliates in April 2002 and forced the conversion of these options into ASLP ownership units.

On December 16, 2002, ASG entered into the Second Amended and Restated Credit Agreement with Bank of America, N.A., as Administrative Agent, and various other lenders, which amended the existing credit facility, dated as of April 18, 2002. The amendment provided, among other things, for an increase in the principal amount of term B loans by $50 million, and consents to our acquisition of Southern Pride as other than a permitted acquisition. We used the borrowing of $50 million in additional term B loans to pay the purchase price for the acquisition, make certain payments related to the acquisition, pay related fees and expenses and for general corporate purposes. The assets we acquired from Southern Pride are included in the security interest of ASG’s indebtedness under the existing credit facility. As of December 31, 2003, after giving effect to the amendment, there was $352.3 million of outstanding indebtedness under the existing credit facility, $16 million of an open letter of credit and approximately $19.5 million of unused borrowing capacity under the revolving credit facility.

Following the completion of the transactions contemplated by this offering, ASG will use the proceeds it receives from Holdings, together with borrowings under the new credit facilities, to repay all outstanding borrowings under the existing credit facility and to repurchase all of the existing senior subordinated notes that are validly tendered and not withdrawn pursuant to the consent solicitation and tender offer.

Liquidity and Capital Resources

Our principal liquidity requirements are for working capital, consisting primarily of receivables, inventories, pre-paid expenses, reduced by accounts payable and accrued expenses; capital expenditures; and debt service. We will fund our liquidity needs primarily with cash generated from operations and, to the extent necessary, through borrowings under the new revolver that we will enter into in connection with this offering. As of December 31, 2003, we had $39.5 million outstanding under our existing revolving credit facility. In addition, there was an open letter of credit of $16.0 million at December 31, 2003, which decreases the amount of available borrowings under the credit facility on a dollar-for-dollar basis. The revolver is included in our financial statements as part of our long-term debt.

Following the completion of the transactions contemplated by this offering, our short-term and long-term liquidity needs will arise primarily from: interest payments, which are scheduled to be approximately between $50.0 million and $55.0 million in 2004. After the transaction, we expect to have no scheduled principal repayments on debt through 2007; $245.0 million in 2009 and $314.7 million thereafter; capital expenditures, which are expected to be approximately $10.0 to 12.0 million in both 2004 and 2005; potential acquisitions; and working capital requirements as may be needed to support business growth.

Following the completion of the transactions contemplated by this offering, we will use net proceeds received from this offering, together with approximately $245.0 million of borrowings under the new credit facilities, to repay all outstanding borrowings under the existing credit facility. We intend to use a portion of the net proceeds from this offering to acquire equity interests in and subordinated notes of Holdings.

Cash flow from operating activities was $84.6 million, $96.7 million and $47.2 million for the years ended December 31, 2001, 2002 and 2003, respectively. The decrease in cash flow from operating activities from 2002 to 2003 was due to a net increase in working capital, excluding the current portion of long-term debt, primarily related to carry-over ocean harvested whitefish inventories.

Cash flow used by investing activities was $13.6 million, $58.6 million and $14.7 million for the years ended December 31, 2001, 2002 and 2003, respectively. The increase in cash used by investing activities from 2001 to 2002 related principally to the acquisition of Southern Pride. The decrease in cash used by investing activities from 2002 to 2003 was related principally to the acquisition of Southern Pride during 2002.

Cash flows from financing activities were net cash outflows of $73.0 million, $34.7 million and $32.4 million in 2001, 2002 and 2003, respectively. We generally pay down our revolving debt to reduce our interest cost and improve our leverage ratio as cash becomes available from our operating activities.

During 2001, our cash flows from financing activities were primarily comprised of borrowings of long-term debt of $3.5 million, principal payments of long-term debt of $47.8 million, net repayments on our revolving debt of $16.0 million and distributions to a member of $11.2 million. The distributions to members were made based on estimated tax allocations.

During 2002, our cash flows from financing activities were primarily comprised of net borrowings and net payments of long-term and revolving debt. On April 18, 2002, we repaid all of our existing senior debt and seller notes in the amount of $305.6 million in connection with the April 2002 recapitalization. ASG entered into the existing credit facility in the amount of $445.0 million, which includes two term loans for $370.0 million and a revolving credit line of $75.0 million, and subordinated notes of $175.0 million. The total amount borrowed on the term loans and subordinated notes was $545.0 million, of which $9.5 million had been paid down at December 31, 2002. There was a $2.0 million outstanding balance on the revolver at December 31, 2002.

During 2003, our cash flows from financing activities were primarily comprised of principal payments of long-term debt of $55.5 million, net borrowings on our revolving debt of $37.5 million, payments on other obligations to related parties of $4.6 million, costs related to the in progress recapitalization transaction of $4.8 million, and distributions to members of $4.5 million. The distributions to members were made based on estimated tax allocations. As of December 31, 2003 there was a $39.5 million balance on the revolver, a portion of which was incurred to settle our obligation with Rebecca Ann Fisheries for a fishing right lease agreement, pay off all outstanding bank debt related to Pacific Longline Company LLC and costs related to the recapitalization transaction.

Following the completion of the transactions contemplated by this offering, we will repay all outstanding borrowings under existing credit facilities. For a discussion of the impact of this offering on our liquidity if certain events take place, see “—Critical Accounting Policies and Estimates—Income Taxes.”

We had $5.7 million of cash and cash equivalents at December 31, 2003 compared to $5.6 million at December 31, 2002 and $2.3 million at December 31, 2001. After giving effect to this offering, we believe that our cash, the cash flows we expect to generate from operations, and borrowing capabilities under our new credit facilities will be sufficient to meet our liquidity requirements in the foreseeable future, including our payment obligations under the notes and our anticipated dividend payments on our common stock and Class A common stock.

Our liquidity can also be impacted by unrealized losses in our portfolio of foreign exchange contracts. A majority of these contracts have been entered into with a financial institution that requires collateralization of unrealized losses sustained by the portfolio above $17.5 million (or $27.5 million subsequent to 2003 and

through May 2004). In order to mitigate our short-term liquidity risk with respect to these collateralization requirements, we have placed standing orders to forward purchase yen should the yen strengthen to certain spot rates. With the yen strengthening in late 2003 and early 2004, three of these standing orders were executed. Two of these executed orders have since been terminated with no significant cost, loss or gain to the Company. Both the executed and nonexecuted orders are significant and of a shorter duration than the portfolio of contracts and, as a result, could have a significant impact on our short-term liquidity should the yen strengthen in relation to the U.S. dollar. The impact of a 1% change in exchange rates is approximately $1.2 million for each executed contract.

Capital Expenditures. We use the term “maintenance capital expenditures” to refer to costs we incur that meet capitalization requirements under accounting principles generally accepted in the United States that we consider recurring in nature. The majority of our maintenance capital expenditures relate to our catcher-processor and longliner fleet and include items such as fishing gear, improvements to vessel factory processing equipment and major scheduled vessel maintenance. Major scheduled vessel maintenance costs relate principally to our periodic overhauls and replacements performed generally on a three- to five-year cycle. Capital expenditures reflected below were funded from cash flows from operations and borrowings under our existing credit facility.


	2001		2002		2003
	(dollars in millions)
Fishing gear	$	2.3	$	0.8	$	1.2
Machinery and equipment		4.1		5.2		9.7
Major scheduled vessel maintenance		0.9		2.7		0.3
Other		1.9		0.7		1.1

Total capital expenditures	$	9.2	$	9.4	$	12.3

We estimate that we will have capital expenditure requirements of approximately $11.0 million per year on average for the next five years (of which in each year approximately $9.5 million is anticipated to represent maintenance capital expenditures and the remainder for expansion of facilities and production). This moderate level of anticipated capital expenditures is primarily due to the fact that other significant costs of maintenance on our vessels are charged directly to our results from operations. In addition to our capital expenditures, we spend approximately $7.0 million per year on routine vessel maintenance, which is expensed in the year it is incurred. We also anticipate maintenance capital expenditures for our facilities in Alabama and Massachusetts to maintain these facilities at their current conditions.

Debt Covenants

The existing senior credit facility requires us to meet certain financial tests, including a maximum leverage ratio, a minimum interest coverage ratio and a minimum fixed charge coverage ratio. In addition, the senior credit facility contains certain covenants which, among other things, limit the incurrence of additional indebtedness, liens and encumbrances, changes in the nature of our business, investments, dividends and other restricted payments, prepayments of certain indebtedness, certain transactions with affiliates, asset sales, acquisitions, capital expenditures, mergers and consolidations, sales of receivables and other matters customarily restricted in such agreements. Such restrictions could limit our ability to respond to certain market conditions, meet our capital spending program, provide for unanticipated capital investments or take advantage of business opportunities. The indenture governing our existing senior subordinated notes also imposes similar restrictions on the operation of our business. At December 31, 2003, we held more ocean harvested whitefish product as compared to the prior year period as a result of increased production combined with slower sales. The quantity of pollock surimi inventories we held at December 31, 2003 was approximately 1.5 times higher than the average pollock surimi inventories we held over the last three years. These factors increased drawings on our existing revolving facility and lowered our EBITDA, which in turn increased our leverage. We eliminated our 2003 management bonuses in accordance with certain employment agreements and our general bonus policy, which does not require the payment of bonuses based on financial performance for any year in which there is or would

be a covenant violation. We also obtained an amendment to our bank covenants, which among other things, adjusted the required leverage ratio as of December 31, 2003 and March 31, 2004. We paid approximately $400,000 as a consent fee to our lenders in connection with this amendment. But for the elimination of the bonuses and the bank amendment, our leverage ratio as of December 31, 2003 would have exceeded the level required to remain in compliance with the leverage ratio covenant under our existing credit agreement. The leverage ratio is calculated for purposes of the existing credit agreement based on the ratio of adjusted EBITDA to outstanding debt (both as defined in the existing credit agreement).

Our Indebtedness

Old Credit Facility. In connection with our acquisition by Centre Partners and others through ASLP on January 28, 2000, we entered into a revolving credit and term loan agreement with a syndicate of lenders, the administrative agent of which was Bank of America, N.A. This agreement provided for $250.0 million in term loans ($175.0 million Term A and $75.0 million Term B) and $60.0 million in revolving credit. In connection with the recapitalization of Holdings and its affiliates in April 2002, we repaid all indebtedness under our old senior credit facility.

Existing Credit Facility. In connection with the April 2002 recapitalization, ASG entered into a senior credit agreement with a syndicate of banks, the administrative agent of which is Bank of America, N.A. ASG’s credit agreement consists of a $75.0 million revolving credit facility and $370.0 million in term loans ($90.0 million Term A and $280.0 million Term B). ASG’s obligations under the credit facility are secured by substantially all its assets. The agreement subjects ASG to various restrictive covenants, including limitations on its ability to prepay indebtedness (including its subordinated notes), incur additional indebtedness, and requirements that it maintains specified financial ratios, such as maximum total leverage, minimum interest coverage and minimum fixed charge coverage. Following the completion of the transactions contemplated by this offering, we will use net proceeds received from this offering, together with approximately $245.0 million of borrowings under the new credit facilities, to repay all outstanding borrowings under the existing credit facility.

U.S. Equity Partners Funds Equity Interests and Notes. On October 4, 2002, the U.S. Equity Partners Funds purchased from Holdings a combination of preferred equity securities and notes, and purchased from ASLP warrants to purchase ASLP units, for a total purchase price of $27.3 million. Proceeds from the sale were used by ASLP to redeem 44,828 ASLP units and a warrant to purchase 106,875 ASLP units, which were held by affiliates of Norway Seafoods. In the transactions contemplated by this offering, Holdings will use approximately $34.7 million of the proceeds received to redeem the preferred equity interests and notes held by the U.S. Equity Partners Funds. In addition a portion of the U.S. Equity Partners Funds warrants will be exercised in connection with the offering and a portion will be amended to become exercisable for Holdings equity and then transferred to the Issuer in exchange for IDSs and cash. A portion of the proceeds of this offering in the amount of $6.6 million will be paid to the U.S. Equity Partners Funds in connection with the transfer or exercise of these warrants.

PLC Credit Facility. In December 2001, PLC entered into an $8.0 million revolving term note agreement with a bank. PLC obligations under this credit facility were secured by substantially all of PLC’s assets. The agreement subjected PLC to various restrictive covenants, including limitations on PLC’s ability to incur additional indebtedness, and required PLC to maintain specified financial ratios. In December 2003, all outstanding balances on this note were repaid.

New Credit Facilities. Upon completion of this offering, our subsidiaries, including Holdings and ASG, will enter into $300.0 million of senior secured debt facilities, which we refer to as the “new credit facilities.” We expect that the new credit facilities will include a credit agreement with syndicate of financial institutions and Wells Fargo Bank, N.A., as administrative agent, which we refer to as the “new credit agreement,” providing for an $80.0 million senior secured revolving credit facility, which we refer to as the “new revolver,” and a term loan in a total principal amount of $80.0 million, which we refer to as the “new term loan.” In addition, the new credit

facilities will include $140.0 million of senior secured notes, which we refer to as the “new senior notes,” which will be placed with institutional investors and will have covenants and certain other provisions substantially similar to the new credit agreement. The new credit facilities will be secured by substantially all assets of Holdings and its subsidiaries. The Issuer will not be a party to the new credit facilities. The new credit facilities will contain restrictions on ASG’s ability to make distributions to Holdings and on Holdings’ ability to make distributions to the Issuer. Such distributions are the projected sources of cash to allow the Issuer to make interest and dividend payments to IDS holders. We expect that the new credit facilities will mature on December 31, 2008. See “Use of Proceeds” and “Description of Certain Indebtedness—New Credit Facilities.”

Our ability to comply in future periods with the financial covenants in the new credit facilities will depend on our ongoing financial and operating performance, which in turn will be subject to economic conditions and to financial, business and other factors, many of which are beyond our control, and will be substantially dependent on the selling prices for our products and our ability to successfully implement our overall business strategies.

Subordinated Seller Notes. In connection with the acquisition of our business by Centre Partners and others through ASLP on January 28, 2000, ASC, Inc. and Holdings each issued a note to the seller, Norway Seafoods. These notes were in the principal amounts of $50.0 million and $45.0 million, respectively, and bore interest at the rate of 10% per annum, increasing to 12% to the extent interest was not paid in cash. Any interest not paid in cash was added to the principal amounts of the notes. No cash interest was paid on these notes in 2000 or 2001. The notes were scheduled to mature on January 28, 2010. In connection with the recapitalization of Holdings and its affiliates in April 2002, we repaid these notes plus related accrued interest.

Existing Senior Subordinated Notes. On April 18, 2002, ASG completed a private offering of $175.0 million principal amount of 10¹/8% senior subordinated notes due 2010 (the existing senior subordinated notes). Following the completion of the transactions contemplated by this offering, we will repurchase all of the existing senior subordinated notes that are validly tendered and not withdrawn pursuant to the consent solicitation and tender offer. As of April 30, 2004, all of the existing senior subordinated notes had been validly and irrevocably tendered. The tender offer will expire on May 3, 2004, unless we extend it.

Contractual Obligations and Commercial Commitments

The following table provides aggregated information about our contractual obligations as of December 31, 2003.


	Payments Due by Period (in thousands)
Contractual Obligations	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Long-term debt	$	527,282	$	15,929	$	102,254	$	234,099	$	175,000
Operating leases		4,026		1,107		2,800		119		—
Unconditional purchase obligations(1)		52,082		26,134		25,948		—		—
Other long-term obligations to related parties		32,974		—		4,507		—		28,467

Total contractual cash obligations	$	616,364	$	43,170	$	135,509	$	234,218	$	203,467

(1)	Unconditional purchase obligations assume total allowable catch and allocated quotas at 2003 levels.

In addition to the above, we are obligated to purchase up to 5 million pounds of catfish per year (which is less than 5% of the total amount of catfish purchased by Southern Pride in 2003) from certain catfish farms owned or controlled by Southern Pride’s previous owner at a price that is based on a market index. The term of this obligation is ten years. As each year’s obligation is determined from a formula based on actual production and actual market price, future payments are indeterminate. Accordingly, the table above does not include amounts related to this purchase commitment. During 2003, our catfish purchases under this obligation totaled $1.3 million.

After the completion of the transactions contemplated by this offering, we expect our total long-term debt to be approximately $559.7 million, $245.0 million of which will mature after 5 years and $314.7 million of which will mature after 10 years.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of our financial condition and results of operations is based on Holdings’ consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our critical accounting policies and estimates and base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following critical accounting policies affect the most significant judgments and estimates used in the preparation of our consolidated financial statements:

Foreign exchange contracts. We record gains and losses on foreign currency transactions following Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities.” Foreign exchange contracts are used to hedge the variability of future cash flows associated with Japanese yen denominated sales due to changes in foreign currency exchange rates. The effectiveness of the hedged transactions is measured by changes in spot rates and the gain or loss resulting from the change in time value is recognized currently in earnings. The unrealized gains and losses resulting from the change in spot rates, or the effective portion, are recorded in other comprehensive income. These gains and losses are recognized in revenues when the forecasted sales have occurred. Gains and losses resulting from the ineffective portion of the hedge, including the time value component of the contract, are recognized currently in earnings. See “Risk Factors—Our business is subject to Japanese currency fluctuations that could materially adversely affect our financial condition and liquidity.”

Our profitability depends in part on revenues received in Japanese yen as a result of sales in Japan. Japanese sales represented 39.6% and 24.9% of our total revenues in 2002 and 2003, respectively. A decline in the value of the yen against the U.S. dollar would adversely affect our earnings from sales in Japan. Fluctuations in currency are beyond our control and are unpredictable. From January 1 through December 31, 2002, the value of the dollar decreased by 9.6% against the JPY, from 131.3 JPY per USD to 118.6 JPY per USD. In 2003, the value of the dollar decreased by 10% against the Japanese yen, from 118.6 JPY per USD to 106.9 JPY per USD. While we conduct hedging activities to mitigate the risk of currency fluctuations, these hedging activities may not be sufficient to provide complete protection against loss, and accordingly any such fluctuations could adversely affect our revenues.

Acquisition and pushdown accounting. On January 28, 2000, Centre Partners and others through ASLP acquired our business in a transaction accounted for as a purchase. Accordingly, all of our assets and liabilities were recorded at their estimated fair market values as of the date of the acquisition. In December 2002, we acquired the net assets of Southern Pride. A portion of the net book value of our property and equipment represents amounts allocated to those assets as part of the allocation of the purchase price in the acquisition. The allocation of the purchase price in a business combination under the purchase method of accounting is subjective. Management is required to estimate the fair values of assets and liabilities as of the acquisition date. The excess purchase price over the fair value of the net assets acquired was recorded as goodwill. We review the carrying value of goodwill annually and when events and changes in circumstances indicate that the carrying value of the asset may not be recoverable through future operations.

The goodwill resulting from the purchase by ASLP as well as from our acquisition of the assets of Southern Pride have also been recorded in our financial statements. In addition, expenses incurred by our parent have been recorded in our financial statements to the extent that such expenses related to or benefited our operations.

Cooperative rights. An identifiable intangible asset, cooperative rights, was recorded at its estimated fair value of $138.2 million in connection with the acquisition on January 28, 2000. This estimated fair value was determined using a cash flow analysis by comparing the expected discounted cash flows under the cooperative system to the cash flows under the former Olympic style system, which meant that any vessel licensed to operate in the fishery harvested as much fish as possible until the fishery’s aggregate seasonal quota allocation had been reached.

From January 2000 to October 2001, the cooperative rights intangible asset was amortized on a straight-line basis over 59 months, which was the remaining life of the sunset provision in the American Fisheries Act. Beginning in November 2001, as a result of changes to the American Fisheries Act, we changed the life of our cooperative rights to 23.2 years, which matched the average remaining lives of the vessels, as the American Fisheries Act specifies vessels to which the cooperative rights apply.

Vessel maintenance. A significant portion of our operations take place on our vessels. On January 28, 2000, the purchase of our vessels was part of the total acquisition. Our vessels were recorded at their estimated fair market values, with approximately 60% categorized as vessel equipment and machinery with an estimated useful life of seven years and approximately 40% as vessel hull with an estimated useful life of twenty-five years. We depreciate these assets on a straight-line basis over their estimated useful lives.

We incur expenses to repair and maintain our vessels. Repairs and ordinary maintenance are expensed as incurred. Significant additions and improvements are capitalized. As a condition to maintaining our Det Norske Veritas class certification, the highest vessel certification in the industry, the vessels must undergo scheduled major shipyard maintenance at intervals of three to five years. As a part of this scheduled maintenance, we may also have major vessel components overhauled. The costs for this major shipyard maintenance are capitalized and charged to operations on a pro-rata basis during the period through the next scheduled major shipyard maintenance.

Equity-Based Compensation. Certain employees of Holdings have equity-based compensation arrangements under which they received options to acquire units of ASLP. We follow the fair value recognition provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation, for equity-based employee compensation. The related compensation cost has been pushed down to Holdings’ financial statements, and the deferred compensation has been recorded as a related party payable.

Segment information. We operate in two principal business segments, ocean harvested whitefish and other seafood products. The ocean harvested whitefish segment includes the harvesting and processing of pollock, cod and hake. Processing of ocean harvested whitefish occurs on our vessels while at sea and at our facilities in Massachusetts. The other seafood products segment includes the processing of catfish and scallops at our facilities in Alabama and Massachusetts. Other seafood products sales were not significant prior to our acquisition of Southern Pride.

Valuation Accounts. We have three valuation accounts recorded on our balance sheet. The allowance for doubtful accounts reflects management’s estimate of potential losses inherent in the accounts receivable balance. Management determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. It is our policy to write off accounts as collectibility becomes remote. The allowance for doubtful accounts balance was approximately $0.7 million at December 31, 2003 and $0.5 million at December 31, 2002 and December 31, 2001. Total bad debt write-offs for the years ended December 31, 2001, 2002 and 2003 were $0.1 million in each year. We also had an allowance of $0.9 million, $1.8 million and $2.0 million recorded at December 31, 2001, 2002 and 2003, respectively, for a receivable due from one of our insurance providers, which filed for bankruptcy in March 2001. In addition, we established an allowance account

in 2003 related to a miscellaneous receivable from a fuel hedge provider that filed for bankruptcy in 2002. This allowance is recorded at $0.2 million, which represents approximately 80% of the related balance.

Income Taxes. We intend to account for our issuance of IDSs in this offering as representing an issuance of shares of common stock and notes as separate securities, and to allocate the proceeds received for each IDS between the common stock and notes represented thereby in proportion to their respective fair market values at . Accordingly, we will account for the notes represented by the IDSs as long-term debt bearing a stated interest rate of % maturing in unless we do not maintain a specified total leverage ratio at December 31, 2013, in which case the notes will become due on December 31, 2014. As discussed below, based on the opinion of tax counsel, we are of the view that the notes should be treated as debt for United States federal income tax purposes (although we have not sought a ruling from the IRS on this issue) and we intend to annually deduct interest expense of approximately $41.0 million on the notes from taxable income for United States federal and state income tax purposes. There can be no assurance that the classification of notes as debt, or the amount of interest expense deducted, will not be challenged by the IRS or will be sustained if challenged. If our treatment of the notes as debt is put at risk in the future as a result of a future determination by the IRS, including an adverse determination relating to IDSs issued by another entity or an adverse determination for our own IDSs, we will need to consider the effect of such developments on the determination of our future tax provisions and obligations. In the event the notes are required to be treated as equity for income tax purposes, then the cumulative interest expense associated with the 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 open to assessment for which we claim the interest expense deduction and would adversely affect our financial position, cash flow, and liquidity, and would likely affect our ability to make interest or dividend payments on the notes and the shares of common stock represented by the IDSs and may also affect our ability to continue as a going concern. In addition, non-U.S. holders of our IDS units could be subject to withholding taxes on the payment of interest treated as dividends on equity, which could subject us to additional liability for the withholding taxes that we do not collect on such payments. However, based on advice of counsel, we do not currently intend to record a tax liability for a potential disallowance of this interest expense deduction or for the potential imposition of these withholding taxes.

For more discussion of our (and our counsel’s) conclusion that the notes should be treated as indebtedness for United States federal income tax purposes, see “Material United States Federal Income Tax Consequences—Notes—Characterization of Notes.”

Accounting Treatment for IDS. Our IDSs include common stock, notes and certain embedded derivative features including a call option and a change of control put option. Generally accepted accounting principles require that the proceeds of the offering be allocated, based on relative fair value to the common stock, the notes and to any embedded derivatives which warrant separate accounting under Financial Accounting Standard No. 133 “Accounting for Derivative Instruments and Hedging Activities” (FAS 133). We have concluded that the call option and the change in control put option do not warrant separate accounting under FAS 133 because they are clearly and closely related to the economic characteristics of the host debt instrument. Therefore, we expect that we will allocate the entire proceeds of the offering to the common stock and the notes.

The common stock portion of each IDS will be included in shareholders’ deficit, net of related transaction costs, and dividends paid on the common stock will be recorded as an increase to shareholders deficit when declared by us. The notes portion of each IDS will be presented as long-term obligations, and the related transaction costs will be capitalized as deferred financing fees and amortized to interest expense over the term of the notes. Interest on the notes will be charged to expense as it is accrued. We intend to determine the fair value of the common stock and the notes through the utilization of a third party valuation firm and with reference to the price obtained on the sale of the separate notes which have the same terms as the notes included in the IDSs.

Accounting treatment for Class A common stock. Immediately following the closing of the offering, ASLP will distribute to its partners shares of Class A common stock. Under the Exchange and Registration Rights Agreement, these shares will be exchangeable for IDSs. For two years following issuance, dividends on the Class A common stock will be 1. times dividends on the common stock, which will cause the initial yield on the Class A common stock to approximate the initial yield on the IDSs for which each share of Class A common stock ultimately may be exchanged.

Following the second anniversary of the closing of the offering, at the option of the holder, a share of Class A common may be exchanged for 0.646 IDS (as may be adjusted for stock splits or stock dividends). Accordingly, at the date of issuance, the Class A common stock will be classified as temporary equity in the amount of senior subordinated debt that the holder will receive upon conversion. The issuance of Class A common stock is part of a common control transaction and the related shares will be issued in exchange for a deficit balance in equity.

The Class A stock holders’ right to exchange their shares of Class A common stock for a fixed number of IDSs is a derivative financial instrument subject to the accounting requirements of SFAS No. 133. We will account for these derivative financial instruments at fair value as a distribution to our unit holders on the transaction date and will mark them to market each subsequent balance sheet date with the change in fair value recorded through earnings for so long as the exchange rights are outstanding. On the date of such exchange, the amount representing the then fair value of the exchange right will be reclassified on the balance sheet as a discount on the notes to be amortized to earnings over the remaining note term. The fair value of these instruments will primarily reflect the difference in fair value between the IDS units and the Class A common shares.

Dividends on Class A common stock will be considered in the determination of earnings per share, using the two-class method, based on the relative dividend rights of common stock and Class A common stock. To the extent that holders exercise their exchange rights, the portion of Class A common stock included in temporary equity will be reclassified to debt and the associated interest payments will be included in interest expense.

Other derivative financial instruments. The exchange warrants held by ASLP security holders that entitle them to exchange ASLP units for IDSs, subject to certain conditions, and the arrangement under which Holdings will issue additional Holdings notes and equity to ASLP to the extent that certain ASLP options vest and are exercised, are derivative financial instruments subject to the accounting requirements of SFAS No. 133. Accordingly, we will account for these financial instruments at fair value as a distribution to ASLP unit holders on the transaction date and we will mark the instruments to market on each subsequent balance sheet date with the change in fair value recorded through earnings. The determination of fair value of these derivative financial

instruments will require us to make significant judgments and estimates. The fair value of the commitment to issue the Holdings securities will be determined based on estimates including our dividend rate, the volatility of the price of our securities and the probability as to the number of options which will ultimately vest, and the period of time until vesting occurs. The fair value of the exchange warrants, which is estimated based on the liquidity they provide to ASLP unit holders, is not expected to be significant on their issuance date.

Recently issued accounting pronouncements

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity (SFAS 150). SFAS 150 establishes standards for classifying and measuring certain financial instruments that embody obligations of the issuer and have characteristics of both liabilities and equity as liabilities. Generally, the provisions of SFAS 150 were effective for us beginning on July 1, 2003. In October 2003, the FASB deferred, indefinitely, the application of SFAS 150 related to classification and measurement requirements for mandatorily redeemable financial instruments that become subject to SFAS 150 solely as a result of consolidation. As a result of the FASB’s decision to defer these provisions of the standard, we have continued recording the 20% non-controlling interest in PLC that we did not own at that time as a minority interest in consolidated entity. We adopted SFAS 150, except for those provisions that have been indefinitely deferred by the FASB, as of July 1, 2003. Adoption of SFAS 150 did not have a material effect on our consolidated financial statements.

Quantitative and Qualitative Disclosures About Market Risk

Market Pricing. Prices for certain of our pollock products are subject to variability. For example, the sale of pollock roe is our highest margin business. The price of pollock roe is heavily influenced by the size and condition of roe skeins, color and freshness and the maturity of the fish caught. In addition, pollock roe prices are influenced by anticipated Russian and U.S. production and Japanese inventory carry-over, as pollock roe is consumed almost exclusively in Japan. A decline in the quality of the pollock roe that we harvest or fluctuations in supply could cause a decline in the market price of pollock roe, which would reduce our margins and revenues. Average roe prices per kilogram were 2,247 yen, 1,906 yen and 1,778 yen for the years ended 2001, 2002 and 2003, respectively. While pollock roe prices have experienced volatility in recent years, on a recovery and grade-mix adjusted basis, roe prices have remained relatively stable except in the year 2000, which was an unusual year due largely to market conditions. A decline in the market price for our pollock surimi product could also influence our revenue and margins unfavorably as pollock surimi is one of our major products. In addition to grade mix, pollock surimi prices are influenced by factors such as Japan inventory levels and seasonal production from the U.S. and Russian pollock fisheries. Over the last five years, our seasonal average pollock surimi prices have fluctuated within a range of approximately 200 to 300 yen per kilogram. Average surimi prices per kilogram for our yen denominated sales were 212 yen, 278 yen and 222 yen for the years ended 2001, 2002 and 2003, respectively. See “Risk Factors—Risks Relating to Our Business—Our products are subject to pricing volatility, and the prices of our pollock roe and pollock surimi products, which declined significantly in 2003, may remain at their current low levels or decline even further, which would significantly reduce our profitability.”

Catfish Market Conditions. During the second half of 2003, many of the farmers from whom we purchase catfish increased their prices to levels that jeopardized our ability to maintain satisfactory profit margins in the

catfish processing operations. As a result, in September 2003, we closed our catfish processing plant in Demopolis, Alabama for approximately three weeks, after which period the plant resumed full operations. The plant closure involved a layoff of approximately 270 employees, nearly all of whom were rehired on the plant’s reopening. See “Risk Factors—Risks Relating to Our Business—High catfish prices charged by farmers would adversely impact our catfish operations if market prices for our catfish products do not increase proportionally.”

Foreign Currency, Interest Rate and Commodity Hedging. We are exposed to cash flow and earnings market risk from certain changes in the yen foreign currency exchange rate, interest rates and diesel fuel prices. To mitigate the risk related to these factors, we utilize forward currency contracts, interest rate caps and other derivative commodity instruments, principally futures contracts. As of December 31, 2003, we had open foreign exchange contracts maturing through March 31, 2008 with total notional amounts of $642.1 million, including $150.0 million subject to extension agreements.

Prior to the acquisition of our business by Centre Partners in January 28, 2000, Aker RGI ASA, or Aker, the parent of Norway Seafoods, had entered into a currency forward transaction with Sparebanken NOR and a forward transaction with Den norske Bank ASA. On January 28, 2000, in connection with the acquisition of our business, Aker entered into an agreement with us whereby Aker is obligated to pay us all amounts less a nominal fee that Aker receives from Sparebanken NOR or Den norske Bank ASA, and we are obligated to pay Aker all amounts that Aker must pay to Sparebanken NOR or Den norske Bank ASA. Aker also had, as of December 31, 2003, exercisable foreign currency options with Sparebanken NOR with total notional amounts of $41.3 million relating to the period January 30, 2004 through July 28, 2005. Pursuant to the January 28, 2000 agreement, Aker is obligated to pay us all amounts less a nominal fee that Aker receives from Sparebanken NOR and we are obligated to pay Aker all amounts that Aker must pay to Sparebanken NOR. These options will become forward foreign currency exchange contracts at our election.

In connection with our foreign exchange contracts, we also have extension agreements to enter into foreign exchange contracts. Two of the extension agreements expire between March 2006 and December 2007, and September 2006 and March 2008 and would become binding and effective only if the spot rate falls to a rate

below a pre-specified level (the trigger) on or before December 2005 or March 2006, respectively. If the spot rate does not reach the trigger by December 2005, or March 2006, then neither we nor the counterparty shall have any right or obligation with respect to any of these extension agreements. The trigger for each of these two extension agreements is 99.0 JPY per USD and the notional amounts of these extension agreements are $150.0 million. We also had another extension agreement that had similar terms to the ones described above that expires between January 2007 and March 2007. The trigger was 110.0 JPY per USD and the notional amounts were $39.0 million with a trigger date of March 29, 2004. These 110.0 JPY per USD extensions were triggered on October 7, 2003.

At December 31, 2003, we prepared an analysis to determine the sensitivity of our forward foreign exchange contracts, which have total notional amounts of $642.1 million and are staggered over a rolling 48-month timeframe, to changes in exchange rates. A hypothetical adverse yen exchange rate movement of 1% against our forward foreign exchange contracts would have resulted in a potential loss in fair value of these contracts of approximately $6.6 million. All such losses on these forward foreign exchange contracts would be substantially offset by gains on the underlying Japanese yen sales that we have hedged. We have certain collateralization requirements with a bank representing the majority of these contracts. We are required to post collateral if the market value of our forward foreign exchange contracts drops below a certain level. As of December 31, 2003 we had posted a $16 million letter of credit as collateral and had made a $1.5 million restricted cash deposit.

We enter into fuel hedges whereby we pay a fixed price per gallon and receive a floating price per gallon with the payments being calculated on a notional gallon amount. Our policy is to hedge approximately 75% of our next 12 month estimated fuel usage and approximately 55% of months 13 through 24 estimated fuel usage. As of December 31, 2003, we had open contracts with terms through November 30, 2004. The objective of the swap agreements is to hedge the variability of future fuel prices. These instruments are considered to be substantially fully effective and, therefore, substantially all unrealized gains and losses at year-end are recognized as a component of accumulated other comprehensive income or loss. An adverse change in fuel prices, such as what has occurred in recent months, will not have a material or impact on the average fuel price we pay during the term of the open fuel hedge contracts. The average hedged price per gallon related to contracts maturing from January 2003 through November 2004 are lower than the 2003 average fuel price per gallon.

Interest Rates. The existing credit facility requires us to hedge the variable interest rate on a portion of the outstanding senior debt to convert such debt to fixed-rate debt. We are required to enter into hedging transactions such that no less than 50% of the aggregate principal amount of the term loans and the existing senior subordinated notes is effectively fixed rate debt until June 25, 2005.

We have interest rate caps with aggregate notional amounts of $93.5 million. The cap rate is 5.0% and the variable rate is the U.S. dollar three month LIBOR. The fair value of these instruments was, in the aggregate, not material at December 31, 2003. The objective of the agreements is to hedge the variability of future cash flows associated with changes in variable interest rates.

In addition to the interest hedges applicable to our senior debt, interest on the existing senior subordinated notes has a fixed rate. Approximately 51% of our total debt effectively has a fixed interest rate or is hedged by interest rate caps as of December 31, 2003. Interest rate changes generally do not affect the market value of floating rate debt but do impact the amount of our interest payments and, therefore, our future earnings and cash flows, assuming other factors are held constant.

Industry and Regulatory Overview

Overview

According to the Food and Agriculture Organization of the United Nations, or FAO, the worldwide production of seafood, excluding aquatic plants, has increased steadily at a compounded annual growth rate of approximately 4% from approximately 19 million metric tons in 1950 to approximately 130 million metric tons in 2001 and is projected to increase slightly from 2003 to 2010, resulting in large part from increasing world population and continued economic growth in developing countries. In 2001, the supply provided by marine and inland fisheries, or capture fisheries, accounted for approximately 92.4 million metric tons, or approximately 71% of that amount. Worldwide seafood production of capture fish has remained stable in recent years. The growth in worldwide seafood production is primarily related to increased fish farming, or aquaculture. From 1990 to 2001, the amount of seafood produced in aquaculture worldwide grew at a compounded annual growth rate of approximately 10% from approximately 13.1 million metric tons to approximately 37.9 million metric tons.

Due to its higher cost per ton of fish produced, aquaculture is used primarily to produce higher value fish species such as catfish and salmon. Aquaculture is not a cost effective alternative for lower value fish species such as pollock or hake.

Capture Fisheries

The following chart provides a brief overview of the different types of fish categories caught in the wild for human consumption and use in 2001, including the different species of groundfish which we harvest. The table indicates the percentage each species represents of the volume of each category harvested from capture fisheries.

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¹	Represents species each accounting for less than 5% of the volume of finished products produced from capture fisheries.

Source: FAO Fishstat Plus Database, 2003.

In 2001, approximately 16.9 million metric tons of whitefish was produced worldwide. The whitefish category includes groundfish (such as pollock, hake and cod), flatfish (such as sole), and the redfish, bass and conger species groups. From 1990 to 2001, the worldwide production of groundfish has fluctuated between 8.7 million

and 11.6 million metric tons. We are the largest harvester and at-sea processor of groundfish in the U.S. Pollock, the species representing a substantial majority of our harvest, is the most abundant whitefish and groundfish species in the world.

Aquaculture

The following chart provides a brief overview of the different types of fish categories produced by aquaculture in the U.S. in 2001. In 2001, approximately 28% of the seafood produced worldwide was produced in aquaculture. In 2001, according to the FAO, catfish accounted for approximately 59% of the volume of all aquaculture in the U.S., the primary market in which we sell catfish. We are the largest catfish processor in the U.S.

The following table outlines the percentage each segment represents of total U.S. aquaculture production.

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Groundfish

Pollock Fisheries

Pollock accounted for 34% of groundfish produced worldwide in 2001, representing 3.1 million metric tons, which is more than any other groundfish species. The two primary global pollock sources are the U.S. Bering Sea pollock fishery, the primary fishery in which we operate, and the Russian fishery in the Sea of Okhotsk. The pollock biomasses in these U.S. and Russian pollock fisheries are independent of one another, with virtually no co-mingling between these stocks. Pollock stocks in the U.S. Bering Sea pollock fishery have increased steadily since 1999, while pollock stocks in Russia have experienced a steep decline in recent years. According to TINRO, Wespestad & Ianelli, the Russian fisheries are expected to continue their decline over the next several years, which we believe is attributable to overfishing. As a result, approximately 44% of the pollock produced worldwide in 2001 came from the U.S. Bering Sea pollock fishery, up from 30% in 1999.

Since 2001, U.S. pollock quotas have continued to increase while Russian pollock quotas continue to decline. The total Russian pollock quota in 2004 was cut by 20% from the 2003 level, down to 909,450 metric tons. The quota in the Sea of Okhotsk, the primary Russian fishing area, has been reduced even more dramatically compared to 2003 level, by 34%, down to 420,000 metric tons.

The map below represents the U.S. Bering Sea pollock fishery and the Russian pollock fishery in the Sea of Okhotsk, our primary competing fishery.

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U.S. Pollock Fishery. According to the Marine Conservation Alliance, the U.S. Bering Sea pollock fishery is one of the healthiest and most responsibly managed fisheries in the world. In contrast to the general world trend of declining groundfish stocks, the U.S. Bering Sea pollock fishery is generally characterized by abundant fish stocks and conservative management. This fishery is highly regulated and only 19 specifically identified catcher-processor vessels, of which we own seven, can participate in the catcher-processor sector of the fishery. Pollock matures relatively quickly, with fish aged three to seven years contributing most significantly to the commercial fisheries. Rapid growth allows a relatively high portion of the pollock biomass to be harvested each year without impacting overall population. According to the National Marine Fisheries Service, the body that conducts pollock stock assessments and recommends sustainable harvest limits in this fishery, approximately 25% of this fishery’s 2003 pollock biomass could have been harvested without causing overfishing to occur. The federal government typically sets harvest limits in the 10% to 20% range, below the levels the National Marine Fisheries Service views as sustainable.

The National Marine Fisheries Service considers the current U.S. Bering Sea pollock population healthy and stable. The National Marine Fisheries Service’s population models for pollock in the U.S. Bering Sea pollock fishery show that between 1993 and 2004, the estimated biomass has averaged 12.3 million metric tons. The following graphic indicates the historical pollock total allowable catch and biomass in the U.S. Bering Sea pollock fishery:

U.S. Bering Sea Pollock Fishery Total Allowable Catch/Biomass

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¹	Source for 1993 to 1998: National Marine Fisheries Service; source for 1999 to 2004: North Pacific Fishery Management Council; Amounts for 1999 and thereafter refer to the total allowable catch for the Eastern Bering Sea only.

²	Source for 1993 to 2004: Eastern Bering Sea Walleye Pollock Stock Assessment from Alaska Fisheries Science Center and National Marine Fisheries Service, November 2003.

The pollock fishery in the U.S. Bering Sea is seasonal. The winter or “A” season takes place from January to April and the summer/fall or “B” season runs from June through October. Since 1998, the year the American Fisheries Act was passed, the National Marine Fisheries Services has permitted participants in the U.S. Bering Sea pollock fishery to harvest 40% of the annual quota during the “A” season and the remaining 60% during the “B” season. During the “A” season, spawning pollock produce large quantities of high-value roe, making this season the more profitable one.

Other Groundfish Fisheries

In addition to harvesting and processing pollock, we participate in the catcher-processor and mothership sectors of the U.S. hake fishery and in the catcher-processor and freezer-longlinger sector for the U.S. Bering Sea Pacific cod fishery. In 2001, the U.S. hake and cod fisheries represented 14% and 16% of the worldwide production of hake and cod, respectively. According to the FAO, from 1990 to 2001, the worldwide production of hake has varied from a low of approximately 1.1 million metric tons in 1992 to a high of approximately 1.7 million metric tons in 1996. Worldwide production of cod has dropped considerably over the last two decades (mostly attributable to a decline in Atlantic cod) from approximately 2.6 million metric tons in 1981 to approximately 1.4 million metric tons in 2001. We believe this decrease in cod led to the spike in cod pricing in the early 1990s and the conversion of most fillet customers to lower-priced, relatively more abundant pollock as a primary source of groundfish. Over the past three years, the Pacific cod quota has steadily increased over 14% from 188,000 metric tons in 2001 to 215,000 metric tons in 2004.

Harvesting by catcher-processors in the U.S. hake fishery is conducted on a cooperative basis similar to the system in place for pollock fishing; the mothership sector for hake is conducted on an “Olympic-style” or “open

access” basis, meaning that any vessel licensed to operate in the fishery may harvest as much fish as possible until the fishery’s seasonal quota allocation has been reached. Harvesting in the U.S. Pacific cod fishery is Olympic-style but with limited licenses allowed to participate in the fishery.

Groundfish Consumption

Pollock and cod are the first and third, respectively, largest whitefish species in terms of human consumption. There are three primary markets for groundfish products produced for human consumption: Asia, Europe and North America, representing 30%, 39% and 17%, respectively, of the market in 2001. The Japanese use groundfish primarily to produce surimi (a fish protein paste used in products such as imitation lobster and crabmeat), roe and a variety of fresh-fish products. Consumers in Western Europe and the United States generally purchase groundfish in the form of fresh and frozen fillets, products produced from blocks of fillets and headed and gutted fish.

According to the National Fisheries Institute, per capita consumption of pollock has experienced stable growth since 1987 at a compounded annual growth rate of approximately 2.3% per annum.

Groundfish Pricing

Each of the products produced from pollock has different pricing characteristics. The price of pollock roe is heavily influenced by the size and condition of roe skeins, color and freshness of the roe and the maturity of the fish caught. Catcher-processors are more likely to produce higher quality roe because they process the fish within hours of being caught, rather than several days later as is the case with inshore processors. In addition, roe prices are influenced by anticipated Russian and U.S. production and Japanese inventory carry-over, because roe is consumed almost exclusively in Japan. The U.S. Bering Sea pollock fishery commonly produces the highest quality roe.

The prices of surimi and fillets are influenced primarily by expected production in the U.S. and Russian pollock fisheries, and other factors such as carry-over inventories and changes in demand. Because surimi and fillet blocks often are composed of the same raw material, the demand for one product can influence the price of the other. Surimi and fillet blocks are also produced utilizing species of fish other than pollock, such as hake or itoyori species. However, due to differences in flesh attributes between pollock and other species, the surimi and block produced from other species are generally not used as substitutes for pollock products and thus have minimal influence on pollock pricing. Fillet blocks are often supplied by both the U.S. Bering Sea pollock fishery and the Russian fisheries.

Pollock Allocation

We operate within a favorable statutory and regulatory environment. The stable nature of the U.S. Bering Sea pollock fishery is partly a function of the regulatory and cooperative structure that governs its activities. The American Fisheries Act specifically identifies the catcher-processor vessels that are eligible to participate in the fishery, prohibits the entry of additional vessels and prohibits any single entity from harvesting more than 17.5% of the annual directed pollock catch.

The Act allocates the total allowable catch of pollock in the U.S. Bering Sea pollock fishery among the following sectors:

10% of the total allowable catch is allocated to six Alaska Community Development Groups (mostly native Alaskan villages and their residents) that sell or lease their community development quota to other participants, including us;

approximately 3.5% of the total allowable catch is set aside for pollock by-catch in other fisheries;

the remaining 86.5% of the total allowable catch (the “directed pollock catch”) is allocated as follows:

50% of the directed pollock catch is allocated to catcher-vessels delivering to inshore factories;

40% of the directed pollock catch is allocated to catcher-processors, and catcher-vessels that deliver to catcher-processors; and

10% of the directed pollock catch is allocated to the catcher-vessels that deliver to at-sea processor vessels called motherships, which do not harvest.

Catcher-processors, such as the vessels we own, harvest and process fish into products, such as roe, fillets and surimi, within hours of catching them, and operate offshore. Catcher-vessels harvest and deliver fish to catcher-processors, motherships and inshore processors for processing. Motherships are at-sea processors which rely on catcher-vessels to harvest and deliver fish to them. Inshore processors operate onshore at fixed-location processing facilities, relying on catcher-vessels to harvest and deliver fish to them.

We own and operate seven of the 19 catcher-processor vessels permitted to participate in the catcher-processor sector of the U.S. Bering Sea pollock fishery. Under the American Fisheries Act, this sector is allocated 40% of the annual directed pollock catch and, by the terms of the Pollock Conservation Cooperative agreement, a contractual arrangement among the seven companies that own the catcher-processors named in the statute, this percentage is further divided and allocated among the Cooperative members (with 3.4% being allocated to catcher-vessels). Within the catcher-processor sector, our allocation for pollock under the Cooperative agreement is nearly 2.5 times larger than that of the second largest Cooperative member.

In 2001, 2002 and 2003, we harvested an aggregate of 17.9%, 17.9% and 18.7%, respectively, of the total allowable catch in the U.S. Bering Sea pollock fishery. We are allocated 16.8% of the directed pollock catch under our Cooperative agreements, and we lease the right to harvest another 0.7% of the directed pollock catch from other vessels in our fishery, bringing us to 17.5% of the directed pollock catch (which is the maximum permitted harvesting allocation of the directed pollock catch by any single entity). Our share of the directed pollock catch represented 15.1% of the total allowable catch. We supplemented our share of the directed pollock catch in 2001, 2002, 2003 and 2004 by purchasing approximately 28%, 28%, 36% and 50%, respectively, of the community development quota (or 2.8%, 2.8%, 3.6% and 5.0%, respectively, of the total allowable catch) from Alaska Community Development Groups, two of which are equity investors in our company.

Catfish

Catfish production has grown steadily since the earliest commercial production began. According to the FAO, worldwide production of catfish was approximately 792,000 tons in 2001, up from 472,000 tons in 1990, representing an increase of approximately 68% over the last 11 years. Of this amount, approximately 55% came from aquaculture and approximately 45% came from capture fisheries.

A large amount of catfish produced in the U.S. comes from independently owned and operated local family farms. The catfish raised in these farms are typically sold to processors, such as ourselves. We do not own any of the farms from which we source catfish, and we are not controlled by or affiliated with catfish farmers or their co-operatives, reducing our exposure to catfish price volatility. The catfish is processed into various ready to consume products such as fillets, nuggets and marinated and breaded products.

Prior to 1999, the total amount of catfish imports in the U.S. was insignificant, representing less than 5% of the volume of catfish sold. Beginning in 1999, there was an increase in catfish-like imports from Vietnam. In November 2002, the Department of Commerce, or DOC, made a preliminary ruling that the Vietnamese were selling catfish-like products into the U.S. at unfairly low market prices. The DOC issued its final ruling in July 2003, imposing import duties on Vietnamese catfish and other aquaculture exports.

Worldwide catfish consumption is concentrated in the U.S., Asia, Africa and, to a lesser degree, in Central Europe. There is very little catfish consumption in Western Europe or Japan. According to the National Fisheries Institute, in the U.S., per capita catfish consumption has surpassed cod and is now the second largest selling whitefish, behind pollock. According to the National Fisheries Institute, U.S. per capita catfish consumption, like pollock consumption, has experienced stable growth since 1990 at a compounded annual growth rate of approximately 5% per annum since 1990. The majority of this growth has occurred in aquaculture, the sector in which we operate.

In the U.S., the catfish market has evolved over the last decade from being a regional commodity, locally produced and consumed predominantly in the southern U.S., to a large, commercial aquaculture industry serving major U.S. markets. In 2002, according to the FAO, catfish accounted for approximately 50% of the value and 75% of the volume of all aquaculture in the U.S. The U.S. catfish industry is concentrated in Alabama, the region in which we operate, as well as Mississippi, Arkansas and Louisiana. We are the largest catfish processor in the U.S., processing approximately 100 million pounds of catfish per year.

Catfish harvests are seasonal, following the warm weather-growing cycle of the fish. Farmers prefer to harvest their ponds at the end of the summer, after the period in which the fish experience their maximum weight gain and before the fish enter a period of slower growth during the winter. The harvest slows modestly during November and December due to reduced demand during the holiday season and picks up again in the beginning of the year. This leads to a seasonal abundance of fish between late summer and early winter, the time of year when catfish prices are usually at their lowest.

Business

We are one of the largest integrated seafood companies in the U.S. in terms of revenues. We harvest and process a variety of fish species aboard our sophisticated catcher-processor vessels, our freezer-longliner vessels and at our land-based processing facilities, and market our products to a diverse group of customers in North America, Asia and Europe. In the U.S., we are the largest harvester and at-sea processor of pollock and hake and the largest processor of catfish. Pollock is the world’s highest-volume whitefish harvested for human consumption and accounts for a majority of our revenues. In the U.S., catfish is the basis for a large, commercial aquaculture industry serving major U.S. markets, and according to the FAO, catfish accounted for approximately 50% of the value of all aquaculture in the U.S. in 2002. In addition, we harvest and/or process additional seafood, including cod, scallops and yellowfin sole. We maintain an international marketing network through our U.S., Japan and European offices and have developed long-term relationships with our U.S. and international customer base.

We own and operate a premier modern fleet of seven catcher-processor vessels, which average over 300 feet in length and carry crews of 90 to 125 persons. Our catcher-processors are capable of producing between 110 and 150 metric tons of frozen finished product daily. We produce a variety of products at sea, such as pollock roe (fish eggs), surimi (a fish protein paste used in products such as imitation lobster and crabmeat), fillet blocks, headed and gutted fish and fishmeal.

We own and operate three freezer-longliners, ranging in length from approximately 125 to 140 feet. We acquired the longliners in late 2001 and have since made extensive capital improvements upon all three vessels to increase their operational efficiency. These vessels carry an average of 20 crew members and operate in the U.S. Bering Sea/Aleutian Islands Pacific cod fishery, producing headed and gutted cod sold primarily in the European, Asian and North American markets.

We harvest pollock primarily in the U.S. Bering Sea pollock fishery. According to the Marine Conservation Alliance, this fishery is among the largest and most conservatively managed in the world. We benefit from the favorable regulatory system that governs pollock fishing in these waters. Under U.S. federal law, the fishery is subject to total allowable catch limitations, quota allocations among the different sectors of participants in the fishery, and rules that give exclusive harvesting rights to specifically identified vessels, with the result that any potential new competitors face significant barriers to entry. We own and operate seven of the 19 catcher-processor vessels permitted to participate in the catcher-processor sector of the fishery. Under the American Fisheries Act, this sector is allocated 40% of the annual directed pollock catch (with 3.4% being allocated to catcher-vessels that deliver to the catch-processors) and, by the terms of the Pollock Conservation Cooperative agreement, a contractual arrangement among the seven companies that own the catcher-processors named in the statute, this percentage is further divided and allocated among the Cooperative members. Within the catcher-processor sector, our allocation for pollock under the Cooperative agreement is nearly 2.5 times larger than that of the second largest Cooperative member.

The U.S. Pacific cod fishery is subject to total allowable catch limitations and quota allocation among the three primary sectors of participants in the fishery: community development quota groups, the fixed gear and the trawl sectors. We participate in the trawl sector with our catcher-processors and participate in the fixed gear sector with our freezer-longliners. Of the total quota, 51% is allocated to the fixed gear sector and of that portion, 80% is allocated to the freezer-longliners. A license limitation program is being enacted and it is expected that there will be 40 to 44 licenses issued to freezer-longliners once the program is finalized. Further efforts to rationalize the cod fishery, such as individual quotas, are currently in process.

We own and operate two catfish processing facilities in Alabama. We do not own any of the farms from which we source catfish, and we are not controlled by or affiliated with catfish farmers or their co-operatives, reducing our exposure to catfish price volatility. We distribute fresh and frozen catfish products to both retailers and foodservice customers throughout several regions in the U.S. In addition, we conduct other seafood processing operations at our facility in Massachusetts, where we manufacture products such as breaded seafood portions, fillets and scallops.

Competitive Strengths

Abundant, Stable Pollock Fishery. Our pollock harvesting operations target the U.S. Bering Sea pollock fishery, which, according to the Marine Conservation Alliance, is one of the healthiest and most responsibly managed fisheries in the world. Under federal law, the National Marine Fisheries Service is directed to set the total allowable catch at a level which ensures a healthy, abundant resource. The total allowable catch for pollock in the U.S. Bering Sea pollock fishery has grown from 1,139,000 metric tons in 2000 to 1,492,000 metric tons in 2004.

According to the National Marine Fishery Service, the biomass for pollock stocks in the U.S. Bering Sea pollock fishery has remained relatively stable and averaged 12.3 million metric tons between 1993 and 2004. According to recent data obtained from the National Marine Fisheries Service, we expect this biomass to remain stable, and we believe that the total allowable catch in this fishery will not fluctuate significantly for the next several years. In contrast, the Russian pollock fishery, our primary competing fishery, has recently experienced significant declines in its biomass and total catch.

Attractive Regulatory Environment; Barriers to Entry. We operate within a favorable statutory and regulatory environment primarily designed to ensure the long-term stability of the pollock biomass. The U.S. Congress in October 1998 enacted the American Fisheries Act, which provides us with the following key competitive benefits:

It ensures the catcher-processor sector in which we operate 40% of the annual directed pollock catch in the U.S. Bering Sea pollock fishery (with 36.6% being allocated to 19 catcher-processor vessels and 3.4% being allocated to catcher-vessels).

It creates a significant barrier to entry because participation in the catcher-processor sector of our fishery is limited to 19 specifically named catcher-processor vessels, of which we own seven.

It has facilitated the formation of the Pollock Conservation Cooperative, which allocates a fixed portion of the annual directed pollock catch to us, enabling us to increase the predictability and efficiency of our operations.

Efficient Large-Scale Operator. As one of the largest integrated seafood companies in the U.S., we believe that the scale and efficiency of our harvesting and processing operations, combined with the breadth of our marketing activities, give us substantial competitive advantages. We own and operate seven catcher-processors, the largest fleet of catcher-processors in the U.S. Bering Sea pollock fishery. In 2003, our fleet included the industry’s top five catcher-processors in terms of metric tons harvested. Each of our catcher-processors is a floating factory, averaging in excess of 300 feet in length and carrying a 90 to 125 person crew.

Our catcher-processors are capable of producing between 110 and 150 metric tons of frozen finished product daily and have flexible manufacturing platforms that enable them to operate both fillet and surimi production lines, giving us the ability to readily shift production based on current market demand and to mitigate pricing

volatility. Each vessel is also equipped with an integrated computer system enabling constant communication among vessels, the corporate office and our sales representatives, and real-time response to shifts in market demand. We have been able to improve our average pollock flesh recovery rate from approximately 17% in 1997 to over 25% in 2003, which we believe is better than our competitors. In addition, we believe that our size enables us to negotiate more favorable transportation rates and fuel contracts.

Catfish Processor Leader. We are the largest catfish processor in the U.S., processing approximately 100 million pounds of catfish per year in our two Alabama facilities, which represents a leading market share in the catfish processing sector of over 16%. Our catfish sales and marketing operations include a network of approximately 40 brokers capable of delivering fresh and frozen catfish products to both foodservice and retail customers throughout several regions in the U.S. We have relationships with approximately two hundred catfish farmers, most of whom run small farms in Alabama located close to our processing facilities. We operate our own harvest and live-haul departments, the largest in the nation.

Strong Customer Relationships and Distribution Network. We have established long-standing relationships with many customers worldwide. In 2003, our largest customer accounted for less than 6% of our total revenues. Our customer base includes industrial importers, foodservice distributors, food retailers, restaurant chains and reprocessing companies. We have established close relationships with major Japanese end-users. In the U.S., we have established long-term customer relationships, including multi-year or multi-season supply contracts with some of the largest U.S. pollock deepskin/block customers. As a result of our worldwide operating scale, we believe we have formed good relationships with major international transporters and distributors. Our logistics team continually evaluates shipping and storage alternatives in an effort to maintain the most cost-efficient and reliable logistical system available.

Experienced Management Team. Our senior management team has extensive experience in fishing and related industries. Our Chairman and CEO has worked in the fishing industry for over 25 years and our senior management team members average more than 20 years of industry experience. In addition, we have an experienced group of operational managers and vessel managers throughout our organization.

Business Strategy

Over the past decade, we have become one of the largest integrated seafood companies in the U.S. Today we are committed to building on our existing harvesting, processing and marketing platforms.

The primary components of our business strategy include the following:

Maximize Pollock Revenues. Our pollock harvesting and at-sea processing operations provide a majority of our revenues. Our strategy to maximize pollock revenues includes:

Maximize access to pollock resources. Over the last three years, we have increased our share of the total allowable catch in the U.S. Bering Sea pollock fishery by approximately 15%, largely through increasing our purchases of community development quota from Alaska Community Development Groups, from 5.0% of the total community development quota in 1999 to 50.0% in 2004. We will continue working to maximize our share of the total allowable catch within the applicable regulatory framework. In October 2003, we entered into an agreement with Bristol Bay, one of the six Alaska Community Development Groups that is allocated community development quota and from whom we have purchased quota in the past. Under this agreement, Bristol Bay has granted us an exclusive license to harvest all of the pollock total allowable catch allocated to it under the Alaska Community Development Quota program for the 2004 and 2005 pollock seasons. Bristol Bay’s pollock quota for the 2004 and 2005 pollock seasons will be 2.1% of the total allowable catch, which represents approximately 21.0% of the community development quota. Our agreement with Bristol Bay is limited to a two-year period because the State of Alaska Community Development Quota program guidelines do not allow royalty agreements to extend beyond the term of the current Community Development Quota allocation cycle, which expires at the end of 2005.

Optimize product mix to maximize profitability. We will continue our efforts to maximize revenues by optimizing product mix based on global demand and pricing. Each of our vessels is staffed with production managers who coordinate continuously with our marketing department to schedule production between blocks and surimi to optimize product mix and maximize our profitability.

Continue to Diversify Sources of Revenues. We generate most of our revenues from ocean harvested whitefish, primarily comprised of pollock-based products. In addition, we participate in a number of other fisheries, such as the hake, cod and yellowfin sole fisheries. We plan to continue expanding our operations in these and other fisheries. With our Southern Pride and Pacific Longline Company acquisitions, we became both the largest catfish processor in the U.S. and a participant in the cod freezer-longliners sector and therefore have significant market positions in pollock, catfish and cod, the top three whitefish species in terms of U.S. human consumption. In addition, we have state of the art processing facilities to produce scallops, a market we entered in 2001.

Leverage International Marketing Network. We are currently expanding our presence in worldwide seafood markets, with a particular focus on the Asian and European markets, to increase and diversify our customer base and global seafood market share. We have expanded our Japanese office in an effort to increase direct distribution to end-users and to gain an entryway into growing markets such as South Korea and China. We expect that over time, increasing local market presence in Asia will help maintain price stability through long-term contracts, improve production planning, strengthen customer relationships and provide us with marketing and sales advantages. Additionally, we believe that a strong local market presence will provide us with an opportunity to introduce new species and product forms into the Asian market and enhance relationships with distributors in Japan. In 2001, we established a sales office in Denmark to serve the growing European market for pollock block, which in the past has been supplied primarily with Russian pollock. As Russian pollock stocks and harvests decrease, we believe that our access to pollock resources in the U.S. Bering Sea pollock fishery will provide us with a competitive advantage in implementing our strategy to increase our presence in Europe. Seafood sales to customers in Europe increased from 2.1% of total revenues in 1999 to 20% of total revenues in 2003.

Continually Improve Operating Efficiencies. We believe that there may be synergies created by integrating our catfish processing operation and our national distribution network with our secondary processing operations in Massachusetts, leading to improved overall profitability. Synergies could be achieved by utilizing Southern Pride’s extensive distribution network along with our American Pride seafood brand to penetrate additional markets and increase sales of our secondary processed products to Southern Pride’s customer base. Southern Pride’s distribution network provides us with greater access to the retail, distributor and fresh seafood channels for all of our products.

Products

There are three steps in preparing pollock for retail sale: harvesting, primary processing and secondary processing. At sea catcher-processor vessels harvest fish and conduct primary processing to produce products such as fillets, surimi and roe. These products are further refined and packaged for retail sale by secondary processing companies in the United States, Asia (mainly Japan) and Europe, which produce products such as breaded seafood portions, imitation crabmeat and fish sticks.

The sale of pollock roe is our highest margin business. The fish we catch at-sea (after extraction of roe, if applicable) is either processed into surimi or fillet blocks. Each fish is first filleted and incremental flesh is removed from the carcass and sent to the surimi line. The fillets are then either inspected and frozen in block form, or minced and used to produce surimi. The manufacturing processes for surimi and fillet blocks generate different quantities of salable product from each fish.

We process fish into the following products:

Ocean harvested whitefish segment:

Roe. Roe is extracted from spawning fish, which are harvested primarily during the winter and spring. Egg sacs are sorted by size and quality and frozen on the vessels. The egg sacs are then salted and dyed by processors in Asia for sale to consumers. We produce roe primarily from pollock and to a lesser extent from cod. We sell roe primarily to large Japanese importers.

Block. We produce different types of block products such as skinless, boneless, pin bone out, pin bone in, deepskin and minced blocks. The frozen blocks are cut into different sizes, shapes and weights by our secondary processing operations for conversion into products such as breaded and battered fish sticks and fillets. We sell block produced from pollock, hake and cod. We sell most of our block products to foodservice customers, restaurant chains, retailers or large scale secondary processors in Asia, Europe and North America.

Surimi. Surimi is a tasteless fish paste used as the primary protein in numerous Asian dishes and, to a lesser extent in Europe and the U.S. We produce surimi from pollock and hake. We sell surimi as a commodity to importers and large-scale distributors, who then sell it to processors as a raw ingredient. Outside of Japan, the most recognized surimi products are imitation crab, shrimp, scallops and other similar products. Over 1,000 different products are made from surimi.

Fishmeal. Fishmeal is produced from fish by-products, primarily frames, guts and heads of pollock, hake and yellowfin sole. We sell fishmeal primarily in China, Taiwan and Japan, where it is used as the main ingredient in aquaculture feeds.

Other. We produce headed and gutted fish from cod and yellowfin sole and sell those products primarily to secondary processors in China for conversion into individual skinless, boneless fillets.

Other seafood products segment:

Fresh. We sell fresh catfish and scallops. Catfish is sold to foodservice customers and retailers in the U.S. Fresh scallops are sold in bagged form to wholesalers and high-end restaurants in the U.S.

Individually Quick Frozen. Individually quick frozen products are skinless fillets or scallops frozen into individual portions rather than blocks. The individually quick frozen portions are of various sizes and are processed for conversion into “center of the plate” and breaded and battered products. Most of our individually quick frozen products are produced from catfish and scallops. We sell most of our individually quick frozen products to foodservice customers and retailers in the U.S.

Our product sales value in dollars and as a percentage of total sales, broken out by product type and geographic region for 2002 and 2003 in our ocean harvested whitefish segment are as follows (pricing can vary from year to year):


	2002				2003
	Amount of Sales		Percent of Total Sales		Amount of Sales		Percent of Total Sales
	(dollars in millions)
Roe	$	85.7	27.5	%	$	85.1	30.5	%
Block		120.9	38.9			124.7	44.6
Surimi		83.9	26.9			54.2	19.4
Fishmeal		10.0	3.2			10.3	3.7
Other		11.0	3.5			5.0	1.8

Total	$	311.5	100.0	%	$	279.3	100.0	%


	2002				2003
	Amount of Sales		Percent of Total Sales		Amount of Sales		Percent of Total Sales
	(dollars in millions)
North America	$	92.5	29.7	%	$	82.1	29.4	%
Japan		131.5	42.2			102.0	36.5
Europe		55.6	17.9			55.9	20.0
Asia (other than Japan)		31.9	10.2			39.3	14.1

Total	$	311.5	100.0	%	$	279.3	100.0	%

We are continually designing and employing new factory technologies. We employ a full time technical engineer who investigates and designs processing factory improvements. We seek to increase the value of the products produced aboard our vessels and to reduce labor and associated costs wherever possible. One example of these efforts is a patented machine that successfully takes the fish head (which previously went entirely to fishmeal) and removes a relatively large section of meat used for higher-value surimi or minced products. We are also investigating new technology that will grade fillets automatically with the use of computers and scanners and that could potentially reduce our labor costs.

Sales, Marketing and Distribution

Overview. We have an international marketing network with offices in the United States, Japan and Denmark. We market, sell and distribute products for two distinct types of customers: the industrial market and the foodservice/retail market. The products we produce through primary processing on board our catcher-processor vessels are sold as a raw material into the industrial market and used by our customers to produce ready to consume end products. The products we produce through secondary processing at our facility in Massachusetts and at our catfish facilities in Alabama are sold in a ready to consume format to the foodservice/retail markets.

In 2003, industrial customers and foodservice/retail customers comprised approximately 56% and 44% of our revenues, respectively. Our industrial sales force consists of sales representatives and brokers targeting an international group of customers primarily in Asia, Europe and North America regions. Our foodservice and retail sales and marketing operations include a network of approximately 40 brokers throughout the U.S. This network sells and distributes on average in excess of one million pounds of processed, ready to consume catfish, scallops and breaded pollock or cod per week.

The opening of our Copenhagen, Denmark office in 2001 reflects our strategy to build a long-term presence in the European markets that will enable us to capitalize on seafood consumption growth trends in previously underserved markets such as France, Spain, Italy and Germany. In addition, we have recently expanded our Japanese office in an effort to increase direct distribution to end-users and to gain an entryway into growing markets such as South Korea and China.

Industrial Market. Our primary processing operations focus on products used as raw materials by secondary processors serving end markets throughout the world. We harvest, manufacture and market frozen at-sea products from the Bering Sea and North Pacific. The products produced onboard our catcher-processors and freezer-longliners are specifically made for industrial processors that convert the frozen fillet blocks, headed and gutted fish and surimi products into breaded portions, individual fillets and surimi-based products like imitation crab meat. Roe is salted and dyed by processors in Asia for sale to consumers. Roe is sold to consumers as fresh or frozen whole skeins, or as bags of eggs removed from the skeins. The whole skeins are considered a high-end gourmet food product and are used for gift giving in Japan. We develop annual marketing and sales plans for our products based on anticipated demand and market pricing. We review these plans continuously and, if necessary, adjust them during the season. Because most of our vessels can easily switch between producing surimi and fillet blocks, during each season we constantly monitor and adjust the product mix to meet market demand.

Depending on the product and customer, we negotiate either seasonal or long-term contracts. We have traditionally entered into revolving arrangements in which several larger customers commit to purchase all surimi produced on a specific vessel. Prior to each fishing season, we typically enter into sales commitments for 70% to 90% of our expected production. Final pricing usually occurs during the season or shortly thereafter, based on general pricing in the market. Over the years, we have built good relationships with our core customer base.

We generally sell our pollock roe through a combination of direct sales and silent auctions to Japanese industrial customers. Prior to the commencement of the pollock “A” season, we frequently enter into agreements to sell a specified percentage of the roe production from certain vessels to particular customers. In 2003, that percentage was 50% for each of our vessels. Under these agreements, the final sales price for the roe sold to the customers is generally identical to the price at which the remainder of the vessels’ production is sold at auction. Depending on the quantity of production, the roe of the pollock “B” season is sold through a similar procedure, entirely by auction or through direct negotiated sales with major customers.

Through our brand names “Pride of the Sea,” ”American Pride” and “Southern Pride Catfish,” we are a well recognized supplier of industrial and secondarily processed products, and we maintain a strong market position in Japan, the United States, parts of Europe and parts of Asia.

Foodservice and Retail Markets. We focus on selling, marketing and distributing seafood products produced in our three secondary processing facilities to the foodservice and retail channels utilizing our own scalable distribution system and a national broker network. We market products such as breaded portions, fresh and frozen fillets and single serve portions under our national brands “American Pride,” “Frionor,” “Arctic Cape” and “Southern Pride Catfish,” as well as under private label brands. The majority of our retail sales are in the foodservice channel and about one third of our products are sold retail through either seafood specialty shops, grocery or club stores. We market sea scallops in the retail grocery channel under the “Bayside Bistro” and private label brands. Additionally, we intend to capitalize on an industry trend toward fresh and chilled seafood by developing strategic alliances with seafood distributors to supply fresh and chilled seafood, primarily to the seafood counters of retail grocery and club stores. Product mix is about ²/3 frozen and ¹/3 fresh. Approximately 45% of our foodservice and retail products are delivered through our own fleet of trucks.

We are increasingly emphasizing direct selling, particularly to national restaurant chains in the growth segments of the foodservice industry. We focus our marketing efforts on a consultative selling approach featuring culinary and resource support that assists customers to develop their seafood businesses. We complement our marketing efforts by developing innovative high quality products that also solve specific customers’ challenges, such as scarce labor and food safety.

Customers

We have established long-term relationships with a number of key customers worldwide. Our customer base includes industrial importers, foodservice distributors, food retailers, restaurants and reprocessing companies.

For surimi and roe products, our customers have primarily been Japanese and South Korean importers and large scale distributors. Over the past few years, we have focused on broadening our customer base and have been building closer relationships directly with key Japanese food manufacturers. We have recently penetrated the growing European surimi market, particularly in France and Spain. The headed and gutted cod product produced aboard our freezer-longliners are primarily sold in the European, Asian and North American markets.

The United States is our primary market for pollock deepskin blocks and catfish products. For pollock deepskin product, we have established long-term customer relationships, including multi-year or multi-season supply contracts with three of the largest U.S. pollock deepskin customers. Our catfish products are sold to a diversified customer base made up of retail, foodservice and specialty seafood distributors.

With the decline of Russian pollock supply, we have increased production of pin bone out, pin bone in and minced pollock blocks to capture additional European market share. In addition to the United States, Europe is a primary market for these products. The growth in European block demand led to the establishment of our European office in Copenhagen, Denmark, which leverages our existing relationships with broker alliances.

The table below lists alphabetically our 15 largest customers by revenues in our ocean harvested whitefish segment in 2003:


Customer	Product	Market Segment	Country
Coland Development Ltd.	Fishmeal	Industrial	China
Con Agra Foods/Louis Kemp	Pollock & Hake surimi	Retail manufacturer	USA
Fishery Products Intl. Ltd.	Deepskin block	Retail manufacturer	USA
Gortons of Gloucester	Pollock block, deepskin/mince	Retail manufacturer/foodservice	USA
Jeka Fish Aps	Pollock & Cod block, Cod H&G	Processor/Distributor	Denmark
Kibun Foods USA Inc.	Surimi	Importer/retail manufacturer	Japan
Matsuoka Co. Ltd.	Surimi/roe	Importer	Japan
Nestle Grand Froid SA	Pollock block & mince	Retail manufacturer	France
Nichimo Co. Ltd.	Surimi/roe	Importer/retail manufacturer	Japan
Nichiro	Roe	Importer/distributor	Japan
Osaka Uoichiba Co Ltd.	Surimi/roe	Importer	Japan
Peter Pan Seafoods Inc.	Pollock & Hake surimi	Importer/retail manufacturer	Japan, USA
Samho America Inc.	Roe	Foodservice-quick service restaurants	Korea
Tokai Denpun-Japan	Surimi/roe, fishmeal	Importer	Japan
Youngs Bluecrest SFD	Pollock block, deepskin/mince	Retail manufacturer	United Kingdom

The table below lists alphabetically our 15 largest customers by revenues in our other seafood products segment in 2003:


Customer	Product	Market Segment	Country
Atlantic Cape Fisheries Cape May	Frozen scallops & shrimp	Processor	USA
Darden Restaurants, Inc.	Frozen catfish	Restaurant	USA
Dot Foods, Inc.	Frozen catfish	Distributor	USA
Gordon Foodservice	Frozen catfish	Foodservice distributor	USA
Midway Distributors	Fresh catfish	Foodservice distributor	USA
National 1 Mer France	Frozen scallops	Processor/distributor	France
Safeway	Fresh & frozen catfish	Retailer	USA
Schnucks Market, Inc.	Fresh & frozen catfish	Retailer	USA
Seacliff Seafood	Fresh & frozen catfish	Retail distributor	USA
Star Fisheries Inc.	Fresh & frozen catfish	Retail distributor	USA
State Street S’food/Rest. Sup.	Fresh & frozen catfish	Retail/FS distributor	USA
Sysco Foodservices	Frozen catfish	Foodservice distributor	USA
Tampa Bay Fisheries, Inc.	Fresh & frozen catfish	Retailer	USA
U.S. Foodservices	Frozen catfish	Foodservice distributor	USA
Winn Dixie	Fresh & frozen catfish	Retailer	USA

In 2003, our largest customer accounted for less than 6% of our total revenues.

Operations

Ocean harvested whitefish

Harvesting operations. Our catcher-processor vessel captain and fishmaster utilize highly sophisticated fish finding technology to identify the size of the fish and the location and density of the school, allowing the vessels to optimize the catch and resource value. Once the fishmaster identifies a fishing area, a mid-water trawl net, which includes cone-shaped nets, is towed behind the vessel. The fishing captain monitors the catch sensors attached along the portion of the net that holds the fish. When the optimal catch level is reached and the net is wound in, the fish are immediately dropped into tanks to await processing.

Aboard our freezer-longliners, we harvest cod using several long lines with baited hooks, which are released from the vessel and weighted on one end to allow the baited hooks to float in mid water. This method of fishing allows us to realize an optimal finish fish product that translates into higher market prices for the longline cod products.

Processing operations. Within hours, harvested fish are converted into primary processed products utilizing highly automated, continuous production processes. In the first phase of processing, fish are released from the holding tanks onto a conveyer, sorted according to size and diverted into hoppers at the head of one of the several processing lines. Headed and gutted pollock are run through an additional line which extracts roe skeins intact. These skeins are weighed, graded, packaged in groups according to grade and frozen. Fish that have been headed and gutted are either frozen as-is or filleted for conversion into either surimi or frozen fillets.

Breaded and battered operations. Pollock is the primary whitefish used in low cost, breaded and battered fish products for the foodservice and frozen product markets. We convert raw fish blocks, primarily pollock blocks produced by our harvesting operations, into market ready, frozen, cut or formed, breaded and battered portions. Our products include raw breaded, pre-cooked, batter fried, glazed and dusted products.

Shipping and cold storage logistics. We have established relationships with shipping agents throughout Europe and Asia to take advantage of favorable distribution and cold storage rates and service, and we have secured cold storage space in the U.S., Canada, Europe and South Korea to ensure timely delivery of quality products at the most cost efficient rate. Also, through our integrated structure, our harvesting operations utilize the cold storage facility of our secondary processing operations for East Coast shipments, further reducing storage costs.

Other seafood products

Catfish. The catfish we buy are raised in ponds by independent catfish farmers with whom we have contractual relationships. Prior to harvesting catfish, sample fish are tested. They are loaded into baskets and then placed in our aerated tank trucks for live shipment to our processing plants. Unlike a large number of our competitors that depend on farmers to deliver catfish to their plants, we operate our own in-house harvest and live-haul departments, the largest in the nation. Prior to the trucks being unloaded into our plant, sample fish are again tested. At the plant, live catfish are transferred from aerated trucks to the processing lines. The catfish are cleaned, processed, and placed on ice or frozen using an individually quick-frozen method that preserves the taste and quality of the catfish. The frozen catfish can also be breaded and battered. The processing lines and the production processes are highly automated and generally similar to those onboard our catcher-processor vessels, with the exception of some secondary processing operations.

Scallop processing operations. We operate a state-of-the-art wet-fish processing facility focused primarily on grading and processing scallops. We purchase scallops from scallop harvesters. Scallops are graded by size and quality and processed into either premium or standard products. We utilize industry leading processing equipment and food technology in the production of our scallops which significantly reduce production time and manual labor.

Vessels and Facilities

We own and operate the largest fleet, consisting of seven vessels, within the catcher-processor sector of the U.S. Bering Sea pollock fishery. Our catcher-processor vessels range in length from approximately 260 to 340 feet, generate between 6,500 and 10,000 horsepower in their main engines (allowing the vessels to operate under extreme sea conditions) and each carry between 90 to 125 crew members. Each of our catcher-processors meets the rigorous seaworthiness requirements of Det Norske Veritas, the highest vessel classification standard in the world. The catcher-processors targeting pollock have the capability to produce between 110 metric tons and 150 metric tons of frozen product daily and can harvest approximately 100 metric tons of fish per haul. An appraisal conducted in 2002 estimated that our fleet has a replacement cost of approximately $545.0 million.

We own and operate three freezer-longliners in the fixed gear sector of the U.S. Bearing Sea Pacific cod fishery, ranging in length from approximately 125 to 140 feet. Our freezer-longliners are coast guard inspected each year and are maintained under similar rigorous maintenance standards as our catcher-processors. These vessels carry an average of 20 crew members and operate in the U.S. Bering Sea/Aleutian Islands Pacific cod fishery, producing headed and gutted cod that is sold primarily in the European, Asian and North American markets.

Between 1996 and 1998, we made significant investments on our catcher-processor vessels immediately following their acquisition. Because of this previous capital investment, our annual capital expenditures are primarily made only to maintain our vessels at their current state-of-the-art condition. Our entire fleet is currently equipped with highly sophisticated instruments and we do not believe that any significant further capital expenditure is required to maintain the level of performance of our vessels. Within the pollock fishery, we believe that ours is the only catcher-processor fleet with significant incremental capacity. Each vessel is equipped with highly sophisticated instruments and equipment such as fish finding technology to locate schools of the targeted species, cod ends (nets) with volume sensors and an integrated computer system enabling constant, real-time communication between each vessel and the corporate office. Our port engineers oversee the maintenance of each vessel to help ensure deployment of fit vessels for every fishing trip. Our fleet consists of the following vessels:


Vessel	Vessel type	Built	Length (feet)
American Dynasty	Catcher-Processor	1989	272
American Triumph	Catcher-Processor	1991	285
Ocean Rover	Catcher-Processor	1990	256
Northern Hawk	Catcher-Processor	1991	341
Northern Eagle	Catcher-Processor	1988	341
Northern Jaeger	Catcher-Processor	1991	336
Katie Ann	Catcher-Processor	1986	295
Lilli Ann	Freezer-Longliner	1991	141
Deep Pacific	Freezer-Longliner	1991	125
North Cape	Freezer-Longliner	1989	123
American Challenger(1)	Catcher-Vessel	1992	106

(1)	Represents a vessel that is listed as a catcher-vessel in the American Fisheries Act and therefore may not process pollock in the U.S. Bering Sea pollock fishery. We do not operate this vessel.

All of our vessels targeting pollock are equipped with both surimi and fillet lines and fishmeal plants. Within hours, these flexible factory platforms can shift production plans between surimi and block products, allowing us to control daily output to meet changing market demands.

We own and operate two catfish processing facilities located in Greensboro and Demopolis, Alabama. Combined, these processing facilities operate a total of fifteen processing lines and are capable of processing approximately 425,000 pounds of live catfish per day. In 2003, we installed a new, state of the art trim line. The additional trim line utilizes advanced technology to increase both throughput and yield, producing an estimated additional 6 million pounds of catfish per year. We own live hauling equipment, including 15 aerated tank trucks used to harvest and transport the live catfish to our processing facilities. We own and operate a fleet of approximately 30 trucks used for distribution of our products.

We also own and operate a facility in New Bedford, Massachusetts comprised of a secondary processing facility for frozen and block products, a cold storage space for over 9,100 pallets and a corporate office. This facility also includes a state-of-the-art wet-fish processing facility focused primarily on grading and processing scallops.

Our corporate headquarters are located in Seattle, Washington. We benefit from a preferential docking agreement with the Port of Seattle which provides for the docking of all of our vessels during the off-season. We also lease

office space in Copenhagen, Denmark and Tokyo, Japan. Additionally, in Dutch Harbor, Alaska we lease office space and warehouse facilities and use several docking facilities during the fishing season.

We believe that our existing vessels and facilities are adequate for our current operations.

Capital Expenditures

In 2002 and 2003, our total capital expenditures were $9.4 million and $12.3 million, respectively. The majority of our capital expenditures relate to our catcher-processor fleet and include items such as fishing gear, improvements to vessel factory processing equipment and major scheduled vessel maintenance. Major scheduled vessel maintenance costs relate principally to our periodic overhauls and replacements performed generally on a three-year cycle. In addition to capital expenditures, we spend approximately $7 million per year on routine vessel maintenance, which is not capitalizable and which is expensed in the year it is incurred.

Between 1996 and 1998, we made significant investments on our vessels immediately following their acquisition. Our entire fleet is equipped with highly sophisticated instruments.

We estimate that we will have total capital expenditure of approximately $11.0 million per year, on average, for the next five years (of which in each year approximately $9.5 million is anticipated to represent maintenance capital expenditures and the remainder for expansion of facilities and production).

Government Regulation

Fisheries Regulation

All U.S. fisheries in which we operate are regulated and subject to total allowable catch limits. Participants in U.S. federal fisheries are required to obtain a federal government permit.

We operate in the groundfish fisheries within the U.S. Exclusive Economic Zone, 3 to 200 nautical miles off the coasts of Alaska, Washington and Oregon. According to the National Marine Fisheries Service, no species in the U.S. Bering Sea is deemed to be overfished. Credit for these healthy stocks and profitable fisheries can be attributed in large part to two pieces of federal legislation.

Magnuson-Stevens Fishery Conservation and Management Act. The Magnuson-Stevens Fishery Conservation and Management Act of 1976 provides the broad framework for conserving and managing marine fisheries within the U.S. Exclusive Economic Zone. The councils that oversee the fisheries in which we participate are the North Pacific Fishery Management Council in Alaska and the Pacific Fishery Management Council in Washington and Oregon. The councils’ two primary areas of responsibility are (1) the establishment of annual maximum catch levels and (2) the development of fishery management plans that regulate who can fish, when and how they can fish and how much they can catch. The fishery management plans are then implemented and given legal force through regulations promulgated by the National Marine Fisheries Service, a division of the Department of Commerce. These regulations are then strictly enforced by both the U.S. Coast Guard and the National Marine Fisheries Service.

Each of the fisheries in which we participate is managed on a maximum sustainable yield basis. At the end of each year, the councils’ Scientific and Statistical Committees, which are composed of scientists from federal, state and academic positions, make recommendations on acceptable biological catch by species or species group. The total allowable catch is then typically set by the council at a level equal to or less than the acceptable biological catch depending upon a variety of factors. The councils also set prohibited species catch limits to limit by-catch of non-target species. These limits are set mainly to protect and preserve crab, halibut, salmon and other non-target species for other fisheries. After being reviewed by the National Marine Fisheries Service, the councils’ recommendations are implemented.

American Fisheries Act. In 1998, Congress passed a second piece of legislation, the American Fisheries Act, which introduced several major changes in the management of the U.S. Bering Sea pollock fishery. In 2001, the North Pacific Fishery Management Council provided a report to Congress on the implementation and effects of the American Fisheries Act. In light of the extremely positive report, which described the positive impacts of the American Fisheries Act on almost all aspects of the U.S. Bering Sea pollock fishery, Congress passed legislation in 2001 permanently removing the original sunset provision of the American Fisheries Act. The American Fisheries Act and its implementing regulations include the following key provisions:

Limitation on participants in the U.S. Bering Sea pollock fishery:

Only a defined group of 20 named catcher-processors, of which 19 catcher-processors are currently eligible to operate in the fishery, and the catcher-vessels that historically delivered to them, are eligible to harvest pollock for processing by catcher-processors. As part of the implementation agreement, eight of our vessels were scrapped and one was permanently removed from the fishery, reducing the overall fleet from 29 to 20;

Only a defined group of catcher-vessels may harvest pollock for delivery to motherships, and only three named motherships may process pollock; and

Only inshore processors that processed more than 2,000 metric tons of pollock during each of 1996 and 1997 may receive an unlimited amount of pollock for processing; those that processed less during those years may only receive and process under 2,000 metric tons annually. Subsequently, the council imposed a processing cap limiting the amount of pollock that can be processed by any single entity to 30% of the directed pollock catch in any given year.

Prohibition on any entity harvesting more than 17.5% of the directed pollock catch in any given year. Allocations purchased from community development quota partners do not count against this percentage.

Prohibition on the entry of additional large fishing industry vessels into any U.S. fishery.

Reallocation of the pollock total allowable catch in the U.S. Bering Sea pollock fishery between the various sectors, increasing the community development quota and inshore allocations, while reducing the catcher-processor and the mothership sector allocations:

approximately 3.5% of the total allowable catch is set aside for pollock by-catch in other fisheries;

the remaining 86.5% of the total allowable catch (the “directed pollock catch”) is allocated as follows:

50% of the directed pollock catch is allocated to catcher-vessels delivering to inshore factories;

40% of the directed pollock catch is allocated to catcher-processors, and catcher-vessels that deliver to catcher-processors; and

10% of the directed pollock catch is allocated to the catcher-vessels that deliver to at-sea processor vessels called motherships, which do not harvest.

The American Fisheries Act requires that vessels engaged in U.S. fisheries be owned by entities that are at least 75% U.S. citizen owned and controlled. This requirement applies at each tier of ownership and must also be examined in the aggregate. The Maritime Administration made a favorable determination with respect to the U.S. citizenship of the entities owning our vessels in January 2002. In 2002, we applied for and obtained confirmation that after completion of the proposed changes in our ownership structure in connection with the recapitalization

of Holdings and its affiliates in April 2002, the Maritime Administration would issue a renewed U.S. citizenship determination. On December 17, 2002, we filed annual affidavits of U.S. citizenship and on February 21, 2003, the Maritime Administration made a favorable determination of continuing eligibility with respect to the citizenship requirements of the American Fisheries Act.

In order to maintain our eligibility to participate in U.S. fisheries, our existing governance documents contain restrictions on transfers of interests in ASLP or Holdings to non-U.S. citizens, as well as provisions allowing us to require evidence of U.S. citizenship from our equity owners and providing for the automatic redemption of interests held by non-U.S. citizens to the extent necessary to keep the percentage held by non-U.S. citizens below 22%, a safe harbor percentage we thought prudent to provide a margin of error beneath the 25% maximum. To maintain our eligibility following the consummation of this offering, we will put in place governance provisions (i) requiring each owner of 5% or more of the Issuer’s capital stock (including purchasers in this offering) to certify to us that such person is a U.S. Citizen, (ii) limiting to 20% the aggregate percentage ownership of the Issuer’s capital stock by non-U.S. citizens, (iii) requiring that at least 95% of all of the Issuer’s capital stock be held by beneficial owners with U.S. addresses, and (iv) declaring any holding in violation of the foregoing null and void, or voidable, and providing the Issuer with various remedies including mandatory redemptions and sales. Related provisions will permit us at any time to require record and beneficial owners of such common stock or IDSs to provide information and affidavits concerning citizenship status.

In addition, ASLP will adopt provisions and procedures to ensure that non-U.S. citizen ownership of ASLP does not exceed a percentage that, assuming 24.9% non-U.S. citizen ownership of the Issuer, would cause aggregate non-U.S. citizen ownership of Holdings to exceed 22%.

As a condition to the consummation of this offering, we must receive confirmation from the Maritime Administration, or suitable assurances of counsel, that adoption of and adherence to the foregoing procedures will satisfy the applicable requirements of the American Fisheries Act.

The determinations we have received from the Maritime Administration with respect to our equity ownership, and the confirmation we expect to receive in connection with this offering and the adoption of the provisions and procedures described above, do not extend to the citizenship status of lenders or the terms of any loan covenants and financing arrangements. Moreover, such determinations contain language in which the Maritime Administration expressly reserves the right to review these terms to determine if they constitute an impermissible shifting of control to a non-U.S. citizen lender. Based on discussions with counsel and with pertinent government officials, we believe the intention of the Maritime Administration is to prevent provisions couched as loan covenants from serving as a device to shift control to non-U.S. citizens, and not to impede conventional market based loans and credit facilities.

For purposes of the American Fisheries Act, a U.S. citizen is:

(i) Any individual who is a citizen of the United States by birth, naturalization or as otherwise authorized by law; or

(ii) Any entity (A) that is organized under the laws of the United States or of a State, (B) of which not less than 75% of the interest in such entity, at each tier of ownership of such entity and in the aggregate, is owned and controlled (including beneficial ownership and control) by U.S. citizens, and (C) with respect to which no voting or other agreements confer control to non-U.S. citizens.

Special rules applicable to corporations, limited liability companies, partnerships, trusts and other entities limit the number of non-U.S. citizen directors to a minority of a quorum of the board of directors, and require that certain principal officers and managers (including the chief executive officer, the chairman of the board of directors, trustees and general partners, and persons authorized to act in the absence or disability of such persons) be U.S. citizens.

On February 4, 2003, the Maritime Administration published final regulations implementing certain statutory requirements under the American Fisheries Act for lenders holding preferred mortgages on large U.S. flag fishing industry vessels directly or through qualified mortgage trustees. We expect that our secured lending arrangements will comply with these requirements.

The Pollock Conservation Cooperative. By limiting participation in the U.S. Bering Sea pollock fishery, the American Fisheries Act facilitated the formation of a cooperative agreement. In December 1998, the companies owning the 20 catcher-processors named in the American Fisheries Act formed the Pollock Conservation Cooperative. The Pollock Conservation Cooperative controls 36.6% of the directed pollock catch, with the remaining 3.4% of the sector’s 40.0% controlled by seven catcher-vessels that historically delivered to the catcher-processors. The original division of share among the companies was based primarily on historical performance and was reached by the mutual agreement of the participants. In December 1999, Alaska Trawl Fisheries, one of the original Pollock Conservation Cooperative members, agreed to sell its interest to the remaining Pollock Conservation Cooperative members and its vessel, Endurance, has been permanently removed from U.S. fisheries, leaving 19 eligible catcher-processors.

Under the terms of the Pollock Conservation Cooperative membership agreement, each participating company is allocated a percentage of the directed pollock catch by private contractual arrangement. Pollock and other groundfish allocation rights under the Pollock Conservation Cooperative are freely transferable to other participants pursuant to the membership agreement, without the prior consent or approval of the other participants. Participants can then harvest and process their quota shares at their own pace with vessels named in the American Fisheries Act, within certain seasonal restrictions. The stable nature of the U.S. Bering Sea pollock fishery is partly a function of the regulatory and cooperative structure that governs its activities. In addition, the change in fishery management introduced by the American Fisheries Act allowed the catcher-processor sector to: slow the harvesting pace in order to optimize the value per ton of harvested round fish; reduce operating costs; and minimize by-catch and discards.

In 2001, 2002 and 2003, we harvested an aggregate of 17.9%, 17.9% and 18.7%, respectively, of the total allowable catch. We are allocated 16.8% of the directed pollock catch under our Cooperative agreements, and we lease the right to harvest another 0.7% of the directed pollock catch from other vessels in our fishery, bringing us to 17.5% of the directed pollock catch (which is the maximum permitted harvesting allocation of the directed pollock catch by any single entity). Our share of the directed pollock catch represented 15.1% of the total allowable catch. We supplemented our share of the directed pollock catch in 2001, 2002, 2003 and 2004 by purchasing 28.0%, 28.0%, 36.0% and 50.0%, respectively, of the community development quota (or 2.8%, 2.8%, and 3.6% and 5.0%, respectively, of the total allowable catch) from Alaska Community Development Groups, two of which are equity investors in our company. The Alaska Community Development Groups are mostly comprised of native Alaskan villages and their residents.

The overall allocation of the total allowable catch, as well as our allocation and quota we have purchased, is illustrated in the following chart of the 2004 total allowable catch.

LOGO

The Pollock Conservation Cooperative membership agreement will continue through the remainder of the named vessels’ lives, unless certain events occur, none of which we expect is likely to occur in the foreseeable future.

The following is a summary of the Pollock Conservation Cooperative current members and their allocations for 2004:


Company	Vessels	% of Directed Pollock Catch
American Seafoods	7	16.572	%
Trident Seafoods	5	6.824
Arctic Storm/Fjord	2	3.633
Glacier Fish Ltd.	2	3.218
Alaska Ocean	1	3.004
Highland Light	1	1.764
Starbound Ltd.	1	1.585

Total	19	36.600	%

In December 1998, the owners of the seven catcher-vessels listed in the American Fisheries Act as eligible to deliver or sell pollock to the Pollock Conservation Cooperative members formed the High Seas Catchers’ Cooperative. As with the Pollock Conservation Cooperative, the 3.4% of the directed pollock catch allocated to the seven catcher-vessels was divided by private contractual arrangement based primarily on historical catch performance. The members of the High Seas Catchers’ Cooperative and their respective allocations are listed below:


Company	Vessels	% of Directed Pollock Catch
Sea Storm	1	0.8226	%
Neahkanie	1	0.6679
Tracy Anne	1	0.4642
Muir Milach	1	0.4538
Ocean Harvester	1	0.4325
American Seafoods	1	0.3149
Forum Star	1	0.2441

Total	7	3.4000	%

The Pollock Conservation Cooperative and the High Seas Catchers’ Cooperative have entered into an agreement that allows the High Seas Catchers’ Cooperative members to lease their allocations directly to the Pollock Conservation Cooperative members. As a result, 100% of the High Seas Catchers’ Cooperative allocation is now harvested directly by Pollock Conservation Cooperative members.

The agreement governing our current arrangements with the Alaska Community Development Groups for purchasing community development quota expires at the end of 2005. We believe that we should be able to continue to purchase such quota based on the relationships we have developed with those groups, of which two are equity investors in our company.

Food Safety

The manufacture, processing, packaging, storage, distribution and labeling of food products are subject to extensive foreign, federal, state and local regulation. We are regulated by the U.S. Food and Drug Administration, the U.S. Department of Agriculture, the U.S. Department of Commerce, European Union regulators and various U.S. State and local health and agricultural agencies. In addition, some of our facilities are subject to regular on-site inspections and our production and distribution facilities are subject to various federal, state and local environmental and workplace and food safety regulations. Failure to comply with all applicable laws and regulations could subject us to civil remedies, including fines, injunctions, recalls or seizures, and criminal sanctions, any of which or all of which could have a material adverse effect on our business, financial condition and results of operations. None of our products has been subject to such a recall. Additionally, we expect that the food safety regulatory environment in the U.S., Europe and Asia will become more stringent. We believe that we are in substantial compliance with all such laws and regulations. Compliance with current or future laws or regulations could require us to make material expenditures or otherwise adversely affect our business, prospects, results of operations and financial condition.

Environmental Matters

Our vessels and facilities are subject to numerous foreign, federal, state and local laws and regulations relating to the treatment, storage, handling, disposal, emission and discharge of materials into the environment, including the federal Clean Water Act, the Clean Air Act, the Resource Conservation and Recovery Act, the Emergency Planning and Community Right-To-Know Act, the Comprehensive Environmental Response, Compensation and Liability Act, and their state and local counterparts. Under some of these laws, the owner or operator of facilities may be held liable for the costs of removing or remediating of hazardous substances on or under property, regardless of whether the owner or operator knew of or was responsible for the presence of such hazardous

substance and regardless of whether the release or disposal of such substances was legal at the time it occurred. We believe that we are in substantial compliance with all such laws and regulations. We also believe that none of the environmental laws and regulations that regulate our business is expected to have a material impact on our business.

Under certain environmental laws and regulations, we will be required to expend capital in the future in order to remain in compliance. We do not believe that such capital expenditures required by environmental laws currently in effect will be material.

The National Marine Fisheries Service imposes various operational requirements that limit our ability to discard unwanted species, or by-catch, in the North Pacific. Regulation regarding by-catch is from time to time debated in various forums, including the United Nations, and is the subject of public campaigns by environmental groups. Any significant change in the by-catch rules resulting from these debates or campaigns could materially increase the costs or decrease the flexibility of our fishing operations.

Competition

Ocean Harvested Whitefish

Our main competitors in the ocean harvested whitefish segment are the other members of the Pollock Conservation Cooperative, including Trident Seafoods and Glacier Fish. We also compete with inshore processors, including Maruha and Nissui, and motherships, which rely on catcher-vessels to harvest and deliver fish. In addition, we compete with other pollock fisheries, particularly the Russian pollock fishery in the Sea of Okhotsk.

We compete in selling roe primarily on the basis of quality. The price of pollock roe is heavily influenced by the size and condition of roe skeins, color and freshness and the maturity of the fish caught. In addition, pollock roe prices are influenced by anticipated Russian and U.S. production and Japanese inventory carry-over, as pollock roe is consumed almost exclusively in Japan. Roe is primarily sold at auction, where we compete to sell into the Japanese market with other participants in our fishery, as well as with Russian producers. The prices of surimi and fillets are influenced primarily by expected production in the U.S. and Russian pollock fisheries, and other factors such as carry-over inventories and changes in demand. Because surimi and fillet blocks often are composed of the same raw material, the demand for one product can influence the price of the other. Surimi and fillet blocks are also produced utilizing species of fish other than pollock, such as hake or itoyori species. However, due to differences in flesh attributes between pollock and other species, the surimi and block produced from other species are generally not used as substitutes for pollock products and thus have minimal influence on pollock pricing.

In secondary processing, we compete both for raw materials and customers with numerous other processors. Competition for sales is based largely on price. Our competitors range from large volume, well established secondary processors to small independent importers and brokers. Our major competitors are Fishery Products International, Coldwater Seafoods, Iceland Seafood Corp. and Trident Seafoods.

Other Seafood Products

As of December 2003, there were approximately 24 U.S. catfish processing companies, including Confish, Heartland, America’s Catch and Delta Pride, our primary catfish competitors. We are the largest, processing over 16% of the U.S. farmed catfish market. In 2003, the top five and top ten U.S. catfish companies processed, in the aggregate, approximately 60% and 83% of the U.S. farmed catfish harvest, respectively.

Litigation

General. We are from time to time party to litigation, administrative proceedings and union grievances that arise in the ordinary course of our business. Except as described below, we do not have pending any litigation

that, separately or in the aggregate, would in the opinion of management have a material adverse effect on our results of operations or financial condition. However, given the inherent unpredictability of litigation, it is possible that an adverse outcome could, from time to time, have a material adverse effect on our operating results or cash flows in any particular quarterly or annual periods.

Crew Member Lawsuit. On October 19, 2001, a complaint was filed in the United States District Court for the Western District of Washington and the Superior Court of Washington for King County. An amended complaint was filed in both courts on January 15, 2002. The amended complaint was filed against us by a former vessel crew member on behalf of himself and a class of over 500 seamen, although neither the United States District Court nor the Superior Court certified this action as a class action. On June 13, 2002, the plaintiffs voluntarily dismissed the complaint filed in the Superior Court. The complaint filed alleged that we breached our contract with the plaintiffs by underestimating the value of the catch in computing the plaintiffs’ wages. The plaintiffs demanded an accounting of their crew shares pursuant to federal statutory law. In addition, the plaintiffs requested relief under a Washington statute that would render us liable for twice the amount of wages withheld, as well as judgment against us for compensatory and exemplary damages, plus interest, attorneys’ fees and costs, among other things. The plaintiffs also alleged that we fraudulently concealed the underestimation of product values, thereby preventing the discovery of their cause of action. The alleged conduct took place prior to January 28, 2000, the date our business was acquired by Centre Partners and others through ASLP. On September 23, 2003, the District Court ruled in our favor on our motion for summary judgment, finding that all of the plaintiffs’ claims were time-barred. The District Court directed the Clerk to enter judgment in our favor with prejudice and costs. The plaintiff has filed a motion for reconsideration of this order, which was also denied by the court. The plaintiffs have filed an appeal with the Ninth Circuit Court of Appeals. We have not recorded a liability related to this matter as of December 31, 2003 as the outcome is uncertain and the amount of loss, if any, is not estimable.

Insurance

We carry customary insurance coverage, including policies on each of our vessels which provide for the payment of an assessed amount corresponding to “fair market value” (generally approximately one-half of current replacement cost) in the event of a loss of a vessel. Additionally, all of our catcher-processor vessels have a further layer of umbrella insurance which provides coverage for 80% of the difference between such fair market value and the total replacement cost for one vessel during each one-year policy term. We also carry insurance covering product liability claims. We believe that we carry adequate insurance coverage for our business activities. However, such coverage may prove to be inadequate or may not continue to be available to us. If such coverage proves to be inadequate, the sinking or destruction of, or substantial damage to, any of our vessels could have a material adverse effect on our business, financial condition or results of operations.

Employees

As of December 31, 2003, we employed approximately 1,100 full-time personnel, including approximately 100 corporate staff employees and approximately 950 employees at our catfish and secondary processing facilities. In addition to the full-time personnel, we also employ a seasonal vessel crew, either full-time or part-time, of between 1,000 and 1,300 people, depending on the season. We have an annual retention rate of over 70% and we consider relations with our employees to be good.

In addition to their regular compensation, all corporate staff participate in an incentive plan to reward achievement of performance targets.

All vessel employees are compensated based upon a pre-season estimated value per product applied to actual production and actual roe value achieved by their vessel.

Management

Directors, Executive Officers and Key Employees

The following table identifies as of the completion of this offering the directors, executive officers and key employees of the Issuer.


Name	Age	Position
Bernt O. Bodal	50	Chairman and Chief Executive Officer, Director
Jeffrey Davis	54	Chief Operating Officer
Michael J. Hyde	48	General Counsel, President of American Seafoods Company LLC
Brad Bodenman	40	Chief Financial Officer and Treasurer
Amy Humphreys	38	Vice President of Finance and Corporate Development, and Secretary
Inge Andreassen	40	Vice President of Operations, American Seafoods Company LLC
John Cummings	47	President, American Seafoods International LLC and Southern Pride Catfish LLC
John E. Binkley	51	Director
William Bittner	58	Director
Morgen Crow	41	Director
Ren Jurgensen	59	Director, Chairman of the Audit Committee
George L. Majoros, Jr.	42	Director
Scott Perekslis	36	Director

Bernt O. Bodal. Mr. Bodal has been the Chairman and Chief Executive Officer of the Issuer since May 2003 and holds Series B preferred stock of the Issuer. He has been the President of ASC Management, Inc., the general partner of ASLP, the Chairman and Chief Executive Officer of ASG since January 2000, and a director of ASC Management, Inc. since January 2000. From 1994 to 1998, Mr. Bodal served as President and Chief Executive Officer of American Seafoods Company and RGI Seafoods, a subsidiary of Norway Seafoods. Between 1998 and 2000, Mr. Bodal pursued personal investment activities. Mr. Bodal is the board designee of the Series B preferred share.

Jeffrey Davis. Mr. Davis has been the Chief Operating Officer of the Issuer since May 2003. He has been the Chief Operating Officer of ASG, and the Chief Executive Officer of American Seafoods International LLC since January 2000. Mr. Davis was the President and Chief Executive Officer of Baader North America Corporation, a wholly-owned U.S. subsidiary of Baader Beteligungs GMBH, a manufacturer of fish and poultry processing machines, from 1980 to December 1999.

Michael J. Hyde. Mr. Hyde has been the General Counsel of the Issuer since May 2003. He has been the President and Chief Executive Officer of American Seafoods Company LLC and General Counsel of ASG since 2000. American Seafoods Company LLC is a subsidiary of ASG through which we conduct our at-sea pollock harvesting and processing operations. From 1998 to 2000, Mr. Hyde was President of American Seafoods Company. Prior to 1998, Mr. Hyde practiced law in Seattle at Mundt MacGregor LLP, where he was a partner from 1991 to 1998.

Brad Bodenman. Mr. Bodenman has been the Chief Financial Officer and Treasurer of the Issuer since May 2003. He has been the Chief Financial Officer of ASG since May 1, 2002 and Treasurer since March 2002. From April 2000 to December 2001, Mr. Bodenman was the Chief Financial Officer and Treasurer of Essential Markets, Inc., a developer of proprietary software, and from 1997 to 2000, Mr. Bodenman was the Chief Financial Officer and Treasurer of Muzak, LLC., a business music provider.

Amy Humphreys. Ms. Humphreys has been the Vice President of Finance and Corporate Development, and Secretary of the Issuer since May 2003. She has been the Vice President of Finance of ASG since 2002. Ms. Humphreys was the Vice President of Corporate Development of ASG from 2000 to 2002 and the Business Development Manager of American Seafoods Company from 1996 to 2000.

Inge Andreassen. Mr. Andreassen has been the Vice President of Operations of American Seafoods Company LLC since 2000. From 1996 to 2000, Mr. Andreassen was the Vice President of Operations of American Seafoods Company.

John Cummings. Mr. Cummings has been the President of American Seafoods International LLC since April 2002 and President of Southern Pride Catfish LLC since December 2003. From 2000 to 2002, Mr. Cummings was President of Gofish.com, a privately held service firm with online seafood trading, and from 1993 to 2000, Mr. Cummings was President of Fishery Products International, Inc., a subsidiary of FPI Ltd., a supplier of fresh and frozen seafood products.

John E. Binkley. Mr. Binkley will serve as a director of the Issuer upon the closing of this offering. Mr. Binkley has been President and Chief Executive Officer of Alaska Riverways, Inc. since 1990 and has served as Chairman of the board of directors of the Alaska Railroad Corporation since 1997.

William Bittner. Mr. Bittner will serve as a director of the Issuer upon the closing of this offering. Mr. Bittner practices law in Alaska at Birch, Horton, Bittner and Cherot where he has been a senior attorney since 1973. Mr. Bittner has been a shareholder in Birch, Horton, Bittner, Inc. since 1973 and has served on its board of directors since 1976.

Morgen Crow. Mr. Crow has served as a director of the Issuer since May 2003. He has been a director of ASC Management, Inc. since 2000. Mr. Crow has been the Executive Director of Coastal Villages Region Fund since 1998. Mr. Crow is a member of the board of directors of the Marine Conservation Alliance and the Pollock Conservation Cooperative. Mr. Crow is one of the two board designees of the Series A preferred share.

Ren Jurgensen. Mr. Jurgensen will serve as a director of the Issuer and Chairman of its Audit Committee once this registration statement is declared effective. Mr. Jurgensen was a partner at KPMG LLP from 1979 to 2002. Mr. Jurgensen pursued personal business ventures in 2003 and 2004. In addition, Mr. Jurgensen has been a director of BSQUARE Corporation and Tool Builders Corporation since 2003.

George L. Majoros, Jr. Mr. Majoros has served as a director of the Issuer since May 2003. He has served as a director of ASC Management, Inc. since 2002. Mr. Majoros has been President and Chief Operating Officer of Wasserstein & Co., L.P. since its inception in January 2001. Mr. Majoros was a Managing Director of Wasserstein Perella & Co., Inc. and the Chief Operating Officer of its Merchant Banking Group from 1997 to 2001. Mr. Majoros also serves on the board of directors of American Lawyer Media Holdings, Inc., American Lawyer Media, Inc. and numerous private companies.

Scott Perekslis. Mr. Perekslis has been a director of the Issuer since May 2003. Mr. Perekslis has been a director of ASC Management, Inc. since 2000. Mr. Perekslis has been a Managing Director of Centre Partners Management LLC, one of our equity investors, since 2001. He has served in various capacities for Centre Partners and its affiliates since 1991. Mr. Perekslis is the Chairman of Hyco International, Inc. and is a member of the board of directors of Firearms Training Systems, Inc. and KIK Corporation Holdings Inc. Mr. Perekslis is the board designee of the Series C preferred share.

We will have outstanding one share of each of our Series A, Series B and Series C preferred stock that will entitle the holder thereof to elect two members, one member and one member, respectively, of our board of directors. The share of our Series A preferred stock will be held directly or indirectly by Coastal Villages Pollock LLC. The share of our Series B preferred stock will be held directly or indirectly by Bernt O. Bodal, our chairman and chief executive officer. The share of our Series C preferred stock will be held directly or indirectly by Centre Partners Management LLC or by investment funds managed by Centre Partners Management LLC.

The right of the holder of the Series A preferred share to elect one of the two directors will be extinguished at the time that such holder’s direct and indirect equity interest in Holdings is either (i) reduced below 7% solely as a result of sales or other dispositions of shares of our common stock or equity in ASLP or Holdings, or (ii) reduced below 4% for any reason. The right of the holder of any preferred share to elect any director will be extinguished at the time that such holder’s direct and indirect equity interest in Holdings is either (i) reduced below 4% solely as a result of sales or other dispositions of shares of our common stock or equity in ASLP or Holdings, or (ii) reduced below 2% for any reason.

Such shares of preferred stock will also entitle the holders to vote together with the common shares as a class on all matters presented to the common stockholders for a vote and, in any such vote, each share of preferred stock will be entitled to an aggregate number of votes equal to the number of shares of our common stock which the holder (together with certain affiliated parties) would be entitled to receive on an exchange or deemed exchange of its ASLP or Holdings units for IDSs.

The size of our board is fixed at nine and may not be changed without the approval of a majority of the directors elected by the holders of the preferred shares. Directors, other than those elected by the holders of the preferred shares, will be required to satisfy applicable independence standards and will be elected by the holders of the common shares, the Class A common shares and the preferred shares voting together as a class. Cumulative voting will apply to the election of such directors. Unlike regular voting where a holder of shares votes those shares in favor of a candidate to fill each vacancy on the board, cumulative voting entitles a holder to pool or concentrate its votes by dividing among a smaller number of candidates, or casting for a single candidate, an aggregate number of votes equal to the number it would normally be entitled to cast multiplied by the number of directors to be elected. Thus, each common and preferred stockholder will be able to cast all of its votes for one nominee or distribute its votes among two or more nominees. Each of the directors will be elected annually.

We may redeem the preferred shares of any class for nominal consideration at any time after the holder thereof no longer holds any ASLP or Holdings units and is not entitled as a holder of the preferred shares to elect a director of our board. Holders of the preferred shares will not be entitled to receive dividends or distributions.

We will obtain insurance that indemnifies our directors and officers against certain liabilities.

Committees of the Board

The standing committees of our board of directors will consist of an audit committee, a compensation committee and a nominating and governance committee.

Audit Committee

The principal duties and responsibilities of our audit committee will be as follows:

to monitor our financial reporting process and internal control system;

to appoint and replace our independent outside auditors from time to time, determine their compensation and other terms of engagement and oversee their work;

to oversee the performance of our internal audit function; and

to oversee our compliance with legal, ethical and regulatory matters.

The audit committee will have the power to investigate any matter within the scope of its duties. It will also have the authority to retain counsel and advisors to fulfill its responsibilities and duties.

The audit committee will be comprised of three members. Two (one of whom will be a “financial expert” as defined in the federal securities laws) will be selected by the nominating and governance committee from among the directors not elected by holders of preferred stock. For so long as Coastal Villages Pollock LLC, as the holder

of the Series A preferred share, is entitled to elect two directors, the third member of the audit committee will be selected by the directors elected by Coastal. It is expected that Morgen Crow will initially serve as the third member of the audit committee so selected; provided that following the first anniversary of this offering Mr. Crow will be replaced by a member selected by the directors elected by Coastal. If Coastal is not entitled to elect two directors as the holder of the Series A preferred stock, the third member will be selected by the nominating and governance committee. All members of the audit committee must satisfy the criteria for membership on an audit committee established by the American Stock Exchange and the federal securities laws.

Compensation Committee

The principal duties and responsibilities of the compensation committee will be as follows:

to provide oversight on the development and implementation of the compensation policies, strategies, plans and programs for our key employees and outside directors and disclosure relating to these matters;

to review and approve the compensation of our chief executive officer and the other executive officers of us and our subsidiaries; and

to provide oversight concerning selection of officers, management succession planning, performance of individual executives and related matters.

The compensation committee will initially consist of the five directors not elected by holders of preferred stock. Vacancies on the committee may result only from a member either ceasing to serve on the board or voluntarily deciding not to serve on the committee. The nominating and governance committee will select an independent replacement to fill any vacancy. No director who is, or was formerly, elected to the board by any holder of preferred shares or is an affiliate of the preferred holders may serve on the compensation committee. Meetings of the compensation committee will be open to all directors provided that the Chief Executive Officer may not be present while his compensation is deliberated. For so long as Coastal Villages Pollock LLC, as the holder of the Series A preferred stock, is entitled to elect two directors, certain significant compensation decisions will require the concurrence of a majority of the directors elected by the holders of preferred shares.

Nominating and Governance Committee

The principal duties and responsibilities of the nominating and governance committee will be as follows:

to establish criteria for board and committee membership and recommend to our board of directors proposed nominees for election to the board of directors and for membership on committees of the board of directors;

to make recommendations regarding proposals submitted by our shareholders; and

to make recommendations to our board of directors regarding corporate governance matters and practices.

The nominating and governance committee will initially consist of the five directors not elected by holders of preferred stock. Vacancies on the committee may result only from a member either ceasing to serve on the board or voluntarily deciding not to serve on the committee. The remaining committee members will select a replacement to fill any vacancy. No director who is, or was formerly, elected to the board by any preferred holder or is an affiliate of the preferred holders may serve on the nominating and governance committee. Meetings of the nominating and governance committee will be open to all directors.

Nomination of Directors

Our organizational documents contain special provisions governing the process of nominating directors for election to the board. At least sixty days before we file our annual proxy statement with the Securities and Exchange Commission, the nominating and governance committee would conduct a review of the performance of the directors not elected by the preferred directors and, at least forty-five days before the filing date, would propose a slate of nominees to be included in the proxy statement. If any two directors oppose the nomination of any of the nominees, they may, at least thirty days before the filing of the proxy statement, designate for each nominee who is opposed, an alternate nominee who satisfies applicable independence standards and is not affiliated with any holder of preferred stock. Disclosure about the alternate candidates would be included in the

proxy statement together with disclosure about the nominees proposed by the nominating and governance committee. We would pay the reasonable and ordinary expenses related to the solicitation of proxies at the annual meeting and the election process at the annual meeting.

Directors’ and Executive Officers’ Compensation

Compensation of Directors

The members of the board of directors of the Issuer, except for any member who is an executive officer, will receive for serving as directors and for serving on each committee of our board of directors.

Compensation of Executive Officers

The following table sets forth information concerning the compensation of the chief executive officer and each of the four most highly compensated executive officers of the operating subsidiaries of Holdings during each of the last three fiscal years.

Summary Compensation Table


	Annual Compensation(1)					Long Term Compensation Awards Securities Underlying Options/ SARs⁽³⁾		All Other Compensation
Name and Principal Position	Fiscal Year	Salary		Bonus⁽²⁾				All Other Compensation
Bernt O. Bodal	2003	$	400,000		—	—		$	14,218	(4)
Chairman and Chief Executive Officer	2002	$	392,708	$	341,344	75,067	(5)	$	15,938
	2001	$	375,000	$	166,407	—		$	15,805

Michael J. Hyde	2003	$	340,000		—	—		$	76,345	(6)
General Counsel, President of ASC	2002 2001	$ $	335,625 325,000	$ $	290,142 186,907	15,666 —	(7)	$ $	72,114 63,931

Jeffrey Davis	2003	$	340,000		—	—		$	11,385	(8)
Chief Operating Officer	2002	$	335,624	$	290,142	27,900	(9)	$	6,669
	2001	$	325,000	$	15,447	—			—

Brad Bodenman	2003	$	185,000		—	—		$	4,940	(10)
Chief Financial Officer and Treasurer	2002	$	146,459	$	125,000	5,550	(11)		—
	2001		—		—	—			—

Amy Humphreys	2003	$	156,923		—	—		$	5,607	(12)
Vice President of Finance and Corporate Development, and Secretary	2002 2001	$ $	131,009 119,264	$ $	91,937 47,537	3,334 —	(13)	$ $	5,536 5,044

(1)

Includes amounts deferred under the American Seafoods Group Deferred Compensation Plan. The American Seafoods Group Deferred Compensation Plan also provides for a company match of $0.25 for each dollar deferred (up to a maximum of 15% of compensation) (for amounts, see “All Other Compensation” column).

(2)

In 2003, no management bonuses were paid in accordance with our employment agreements and our general bonus policy, which does not require the payment of bonuses based on financial performance for any year in which there is or would be a violation of a covenant under our existing credit agreement. But for the elimination of these bonuses in 2003, we would have been in violation of our leverage covenant under our existing credit agreement.

(3)	As of the date of this prospectus, ASLP held 99.4% of the beneficial interests in Holdings and had 810,842 units outstanding. Following the completion of the transactions contemplated by this offering, a unit of ASLP will be exchangeable for IDSs.

(4)	Includes a company match under the American Seafoods Group Deferred Compensation Plan of $11,719 and $2,500 for life insurance coverage provided pursuant to the American Seafoods Group Executive Life Insurance Plan.

(5)	Includes a grant under the Unit Option Plan of 8,250 Series E options and 66,817 repriced options.

(6)

Includes a payment under an agreement which provides that the company shall continue making annual $50,000 payments until 2005; company match under the American Seafoods Group Deferred Compensation Plan of $23,380 and $2,965 for life insurance coverage provided pursuant to the American Seafoods Group Executive Life Insurance Plan.

(7)	Includes a grant under the Unit Option Plan of 6,000 Series E options and 9,666 repriced options.

(8)	Includes a company match under the American Seafoods Group Deferred Compensation Plan of $10,318 and $1,067 for life insurance coverage provided pursuant to the American Seafoods Group Executive Life Insurance Plan.

(9)	Includes a grant of 6,000 Series E options under the Unit Option Plan and 21,900 repriced options.

(10)	Includes a company match under the American Seafoods Group Deferred Compensation Plan of $3,318 and $1,623 for life insurance coverage provided pursuant to the American Seafoods Group Executive Life Insurance Plan.

(11)	Includes grants under the Unit Option Plan of 1,850 Series A options; 1,850 Series E options and 1,850 Series F options.

(12)	Includes a company match under the American Seafoods Group Deferred Compensation Plan of $4,688 and $919 for life insurance coverage provided pursuant to the American Seafoods Group Executive Life Insurance Plan.

(13)	Includes a grant of 1,500 Series E options under the Unit Option Plan and 1,934 repriced options.

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Aggregated Option Exercises and Fiscal Year-End Option Value

There were no options exercised during 2003. The following table sets forth certain information regarding options in ASLP held by the named executive officers at December 31, 2003.


	Number of Securities Underlying Unexercised Options at FY End		Value of Unexercised In-the-Money Options at FY End
	Exercisable	Unexercisable	Exercisable		Unexercisable
Bernt O. Bodal	2,930	33,295	$	869,514	$	10,980,020
Jeffrey Davis	1,350	13,660	$	375,033	$	4,135,852
Michael J. Hyde	1,017	8,736	$	265,296	$	2,333,732
Brad Bodenman	185	5,365	$	37,579	$	1,089,793
Amy Humphreys	233	2,018	$	59,321	$	524,555

After completion of this offering, only the Issuer and its wholly-owned subsidiaries and ASLP will own equity interests in Holdings. In addition, members of management will have unvested options to acquire equity interests in ASLP, a portion of which will vest based either on the option holders’ continued employment or on a combination of such continued employment and the achievement by Holdings of performance targets. The options that vest in this compensatory manner will be structured so that the resulting dilution is shared ratably by the Issuer and ASLP. Other management options to acquire equity interests in ASLP will dilute only the owners of ASLP. See “—ASLP Unit Option Plan.”

Employment Agreements

Each of Bernt O. Bodal, Jeffrey Davis, Michael J. Hyde and Brad Bodenman has an employment agreement with ASLP and ASG, which will be amended in connection with the offering to include Holdings and the Issuer as employer parties. The employment agreements expire in 2005, and are subject to automatic extensions for succeeding terms of one year each unless terminated by delivery of notice by either party in accordance with the terms of the contract. Pursuant to these contracts, each executive may receive, in addition to his base salary, a discretionary and nondiscretionary bonus. Any discretionary bonus will be determined by the board of directors of the Issuer in its sole discretion. The nondiscretionary bonus will be awarded if the Adjusted EBITDA of Holdings exceeds certain targets, but the nondiscretionary bonuses will not be payable if, at the time of payment or at any time during the year of measurement, we are in default under any credit agreement relating to indebtedness for borrowed money.

If we terminate any of these executives’ employment with cause or if any of these executives terminates his employment without good reason, the executive is entitled only to payment of his unpaid base salary for the period prior to termination. If an executive’s employment terminates because of his death, or we terminate the executive’s employment upon his disability, then the executive is entitled to his unpaid salary and a pro-rated share of the nondiscretionary portion of the bonus to which he would otherwise have been entitled in respect of the year during which termination occurred. If we terminate an executive’s employment for any other reason or if the executive terminates for good reason, he is entitled to all of the foregoing, as well as severance compensation equal to the amount of his actual aggregate base salary for the 12 month period immediately prior to such termination payable over a 24 month period.

In addition to the generic terms described above, the executives’ particular employment agreements will provide the following specific terms:

Bernt O. Bodal. Mr. Bodal will serve as the Chairman and Chief Executive Officer of the Issuer. Under the terms of his employment agreement, Mr. Bodal will receive a base salary of $350,000, which may be adjusted but not decreased below $350,000. The employment agreement also provides, with certain exceptions, that Mr. Bodal may not participate in any entity that competes with us or any of our subsidiaries, or any line of

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business which we or any of our subsidiaries is contemplating, for a period between 12 months and 24 months after the employment term and severance pay period, if applicable, depending on the method of termination. In addition, the employment agreement imposes certain non-solicitation obligations on Mr. Bodal for a 36 month period after the employment term and severance pay period, if applicable.

Michael J. Hyde. Mr. Hyde will serve as the General Counsel of the Issuer and President of American Seafoods Company LLC. Under the terms of his employment agreement, Mr. Hyde will receive a base salary of $325,000, which may be adjusted but not decreased below $325,000. The employment agreement also provides, with certain exceptions, that Mr. Hyde may not participate in any entity whose primary business involves the catching, processing or selling of pollock for a period of 12 to 24 months after the employment term and severance pay period, if applicable, depending on the method of termination. However, the agreement does not prevent Mr. Hyde from providing independent legal services under certain circumstances. In addition, the employment agreement imposes certain non-solicitation obligations on Mr. Hyde for a 12 month to 36 month period after termination of employment and the severance pay period, if applicable, depending on the method of termination.

Jeffrey Davis. Mr. Davis will serve as the Chief Operating Officer of the Issuer. Under the terms of his employment agreement, Mr. Davis will receive a base salary of $300,000, which may be adjusted but not decreased below $300,000. The employment agreement also provides, with certain exceptions, that Mr. Davis may not participate in any entity that competes with us or any of our subsidiaries, or any line of business which we or any of our subsidiaries is contemplating, for a period between 12 months and 24 months after the employment term and severance pay period, if applicable, depending on the method of termination. In addition, the employment agreement imposes certain non-solicitation obligations on Mr. Davis for a 36 month period after the employment term and severance pay period, if applicable.

Brad Bodenman. Mr. Bodenman will serve as the Chief Financial Officer and Treasurer of the Issuer. Under the terms of his employment agreement, Mr. Bodenman will receive a base salary of $185,000, which may be adjusted but not decreased below $185,000. The employment agreement also provides, with certain exceptions, that Mr. Bodenman may not participate in any entity that competes with ASG or any of its subsidiaries, or any line of business which ASG or its subsidiaries is contemplating for a period of 12 months after the employment term and severance pay period, if applicable, depending on the method of employment termination. In addition, the employment agreement imposes certain non-solicitation obligations on Mr. Bodenman for a 36 month period after termination of employment and the severance pay period, if applicable, depending on the method of employment termination.

ASLP Unit Option Plan

ASLP adopted a Unit Option Plan on January 28, 2000, which was amended and restated effective December 16, 2002. Options to acquire units in ASLP were granted under the plan to officers and certain key employees. The purpose of the Unit Option Plan was to promote the success of ASLP and the interests of its partners by attracting, motivating, retaining and rewarding eligible participants.

The ASLP Unit Option Plan has been administered by the entire board of directors of ASC Management, Inc. The board has selected eligible participants for participation in the Unit Option Plan and determined the number of partnership units subject to each option granted thereunder, the exercise price of such option, the time and condition of exercise of such option and all other terms and conditions of such option, including the form of the option agreement setting forth the terms and conditions of such option.

As of February 29, 2004 there were a total of 103,814 options outstanding under the ASLP Unit Option Plan, of which 13,321 were vested. In addition, we expect that 14,006 options will vest immediately prior to the consummation of this offering. The unvested options will consist of 16,742 Series A Options (which vest based upon the passage of time), 10,081 Series C Options (which vest based upon sales of Centre Partners’ direct or indirect interests in Holdings), 6,856 Series D Options (which also vest based upon sales of Centre Partners’

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direct or indirect interests in Holdings), 34,068 Series E Options (which will vest based upon the achievement of certain specified EBITDA targets), and 8,773 Series F Options (which vest based upon the timing of Centre Partners’ exit and the returns achieved by Centre Partners).

Pursuant to the Holdings partnership agreement, ASLP will have the right to automatically receive additional Holdings equity and notes in amounts corresponding to a portion of the ASLP units received on exercises of the outstanding Series A Options and Series E Options (other than in respect of a portion of the Series A Options, the vesting of which will be accelerated immediately prior to the offering) in exchange for the corresponding proceeds received by ASLP upon exercise of the options. In addition, following the liquidation of ASLP, which will occur on or about the fourth anniversary of this offering, any unexercised Series A and Series E options will be converted into options to acquire Holdings equity and debt. The effect of these arrangements will be to cause these options, which vest based on term of employment and performance, respectively, to dilute holders of IDSs and holders of ASLP units ratably. If all such options vested and were exercised, following the offering, the Issuer’s percentage ownership in Holdings would decline from 74.0% to 69.9%. Following the consummation of this offering, the outstanding Series C Options, Series D Options and Series F Options will also remain outstanding at ASLP but ASLP will not receive any corresponding rights in Holdings. Thus, the dilution caused by exercise of these options will be borne by the holders of ASLP units.

We may in the future adopt a long-term incentive plan to provide incentive compensation for any new members of management or to supplant the existing options once they have been exercised or have lapsed.

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Security Ownership of Certain Beneficial Owners and Management

The following table and accompanying footnotes provide information regarding the direct or indirect beneficial ownership of equity interests in Holdings before the completion of this offering and in the Issuer after the completion of this offering as described below. The persons listed below include: (i) each person known to us to beneficially own 5% or more of the equity interests in Holdings; (ii) each named executive officer of the Issuer, Holdings and ASG; (iii) each director of the Issuer; (iv) all named executive officers and directors as a group; and (v) the U.S. Equity Partners Funds.

The persons listed on the following table own, prior to the completion of this offering, equity interests in Holdings directly or indirectly through ASLP and other entities. After the completion of this offering, only the Issuer and its wholly-owned subsidiaries and ASLP will own equity interests in Holdings; the current holders of direct interests in Holdings will have exchanged their interests in Holdings for interests in ASLP. Under the ASLP Unit Option Plan, certain members of management will have unvested options to acquire interests in ASLP which, in turn, represent, among other things, existing interests in debt and equity of Holdings. In addition, certain members of management will have unvested options to acquire interests in ASLP which will represent interests in debt and equity securities of Holdings that have not yet been issued. See “Management—ASLP Unit Option Plan.” And under the Exchange and Registration Rights Agreement, holders of interests in ASLP will have the right to exchange with the Issuer their interests in ASLP for IDSs. Upon any such exchange, the Issuer will have the right to direct ASLP to deliver to it, in redemption of the ASLP units received by the Issuer on such exchange, a ratable portion of the Holdings equity and the Holdings notes held by ASLP. See “Related Party Transactions—Exchange and Registration Rights Agreement.” Following the completion of this offering, the correlation between Holdings units held by the Issuer and IDSs will be one to one. As of the date of this prospectus, ASLP held 99.4% of the beneficial interests in Holdings and had 810,842 units outstanding.

The information in the “Before the Completion of the Offering” columns is based on the equity ownership of Holdings as of March 29, 2004 and the information in the “Pro Forma After the Completion of this Offering and Subsequent Exchange” columns is the projected ownership following completion of this offering and all transactions described herein. Because all outstanding and currently vested options may be exercised prior to the completion of this offering, both the “Before the Completion of this Offering,” “Percentage of Vote in Issuer After the Completion of this Offering” and the “Pro Forma After the Completion of this Offering and Subsequent Exchange” columns treat all such vested options as exercised to provide a clearer illustration of the potential effects of this offering. In addition, upon the consummation of the transactions contemplated by this offering, a portion of the currently outstanding and unvested options to acquire interests in ASLP will become vested. Accordingly, the “Percentage of Vote in Issuer After the Completion of this Offering” and “Pro Forma After the Completion of this Offering and Subsequent Exchange” columns were calculated based on the assumption that all such vesting options will be exercised, again to provide a clearer illustration of the potential effects of this offering. Further, because certain beneficial owners and members of management will receive the Issuer’s Class A common stock in connection with this offering and the Class A common stock is entitled to one vote per share, the “Percentage of Vote in Issuer After the Completion of this Offering” column shows the percentage of vote in the Issuer held by the beneficial owners and members of management following the completion of this offering. After a holding period of two years, the shares of Class A common stock may be exchanged for IDSs at a rate of 1.547 shares of Class A common stock per IDS. As described above, under the Exchange and Registration Rights Agreement, holders of interests in ASLP will have the right to exchange with the Issuer their interests in ASLP for IDSs. In addition to the assumed exercise of vested options described above, the “Pro Forma After the Completion of this Offering and Subsequent Exchange” columns were calculated based on the assumption that all shares of the Issuer’s Class A common stock were exchanged for their equivalent IDSs, and all holders of ASLP units exercised their rights to exchange with the Issuer their ASLP units for IDSs.

Coastal Village Pollock LLC, Mr. Bernt O. Bodal and Centre Partners as, respectively, the owners of the Issuer’s Series A, B and C preferred stock will have the initial right to elect two directors, one director and one director, respectively, of our board. Our board will consist of nine members following this offering, a majority of whom will be independent, and may not be expanded or contracted without the approval of a majority of the directors

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elected by the holders of the preferred shares. The preferred shares will vote together with the common shares and the Class A common shares as a class on all matters presented to the common stockholders for a vote and, in any such vote, each share of preferred stock will be entitled to an aggregate number of votes equal to the number of shares of our common stock which the holder (together with certain affiliated parties) would be entitled to receive on an exchange or deemed exchange of its ASLP or Holdings units for IDSs.


	Before the Completion of this Offering			Percentage of Vote in Issuer After the Completion of this Offering(5)		Pro Forma After the Completion of this Offering, exchange of ASLP units and assuming the exchange of Class A Common Stock for IDSs
Name of Beneficial Holder(1)	Number of Holdings Units (2)(3)	Percentage of Holdings Units(4)				Shares of Issuer’s Common Stock(3)(6)	Percent of Issuer’s Common Stock(7)
Centre Partners(8)	2,330,308	23.30	%	8.83	%	4,123,049	8.02	%
Coastal Villages(9)	3,670,360	36.70	%	14.04	%	6,494,023	12.63	%
Bernt O. Bodal(10)	2,239,514	22.40	%	8.89	%	4,107,880	7.99	%
U.S. Equity Partners Funds(11)	421,648	4.22	%	*		627,335	1.22	%
Jeffrey Davis	434,363	4.34	%	*		812,645	1.58	%
Inge Andreassen	125,866	1.26	%	*		230,702	*
Michael J. Hyde	91,470	*		*		176,262	*
Brad Bodenman	18,619	*		*		45,867	*
Amy Humphreys	63,685	*		*		115,564	*
John E. Binkley		—		—		—	—
William Bittner		—		—		—	—
Morgen Crow(12)		—		—		—	—
Ren Jurgensen		—		—		—	—
George L. Majoros, Jr.(13)		—		—		—	—
Scott Perekslis(14)		—		—		—	—
All directors and executive officers as a group (12 persons)	2,973,517	29.74	%	9.63	%	5,488,920	10.68	%

*	Less than 1%

(1)	Unless otherwise indicated below, the persons named in the table above have sole voting and investment power with respect to the number of securities set forth opposite their names.

(2)

Except for Mr. Bodal, who beneficially owns directly and indirectly through various entities 23.00% of the membership interests in Holdings, Mr. Davis, who beneficially owns indirectly through ASLP 4.55% of the membership interests in Holdings, and Mr. Andreassen, who beneficially owns indirectly through ASLP 1.29% of the units in Holdings, no director or executive officer beneficially owns 1% or more of the units in Holdings. In each case this percentage is based upon the assumed exercise by the pertinent holder of such holder’s options referenced in Note 3 below.

(3)

Includes indirect interests in Holdings resulting from the assumed exercise of currently exercisable options to purchase the following numbers of units in ASLP: Mr. Bodal—5,737 units; Mr. Davis—2,350 units; Mr. Hyde—1,572 units; Ms. Humphreys—345 units; Mr. Bodenman—185 units; other executive officers as a group—765 units and an estimated 36,279 units that would be issued on the assumed exercise of warrants by U.S. Equity Partners Funds.

(4)	Applicable percentage of ownership is based on 810,842 limited partnership units in ASLP and 10,000,000 units in Holdings outstanding as of March 28, 2004 plus 14,006 ASLP units that will be issued upon exercise of exercisable ASLP options.

(5)

Voting percentage includes Class A common shares as follows: Centre Partners— 909,609 shares of Class A common stock; Coastal Villages—1,632,297 shares of Class A common stock; Mr. Bodal—1,038,804 shares of Class A common stock; U.S. Equity Partners—143,991 shares of Class A common stock; Mr. Davis—220,839 shares of Class A common stock; Mr. Andreassen—62,694 shares of Class A common stock; Mr. Hyde—47,900—shares of Class A common stock; Mr. Bodenman—12,465 shares of Class A common stock; and Ms. Humphreys—31,405 shares of Class A common stock.

(6)

Includes indirect interests in Holdings resulting from the assumed exercise of options, which will vest and become exercisable in connection with this offering, to purchase the following numbers of units in ASLP Mr. Bodal—7,074 units; Mr. Davis—2,146 units; Mr. Hyde—701 units; Ms. Humphreys—140 units; Mr. Bodenman—628 units. Also assumes the full exchange of ASLP units for IDSs.

(7)	Applicable percentage is based on 51,399,049 shares of common stock outstanding, assuming the exchange of all ASLP units for IDSs, the exchange of Class A common stock into IDSs, and the net exercise of warrants by the U.S. Equity Partners Funds.

(8)

Consists of an aggregate of 200,502 limited partnership units in ASLP: (a) 153,181 limited partnership units in ASLP owned of record by Centre Capital Investors III, L.P. (“Investors III”), (b) 18,534 limited partnership units in ASLP owned of record by Centre Partners III Tax Exempt Holdings (“CPIII”), (c) 19,195 limited partnership units in ASLP owned of record by ASC Offshore Holding Corporation (“Holdings Corp.”), (d) 1,120 limited partnership units in ASLP owned of record by Centre Capital Individual Investors

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III, L.P. (“Individual III”), (e) 8,371 limited partnership units in ASLP owned of record by Centre Capital Partners Coinvestment III, L.P. (“Coinvestment III”). Investors III, Individual III and Coinvestment III are limited partnerships, of which the general partner of each is Centre Partners III, L.P., and (f) 100 limited partnership units in ASLP owned of record by ASC Management, Inc.

(9)

The columns include an aggregate of 23,706 partnership units in ASLP beneficially owned by Coastal Villages through its purchase of an interest in CPIII and Holdings Corp. Coastal Villages is shown as the beneficial owner of its proportionate share of the partnership units in ASLP held by CPIII and Holdings Corp. because Coastal Villages can vote the partnership units on certain important matters and CPIII and Holdings Corp. are special purpose entities formed solely to hold partnership units.

(10)

The columns include an aggregate of 13,873 interests in ASLP beneficially owned by Mr. Bodal through his purchase of an interest in CPIII. Mr. Bodal is shown as the beneficial owner of his proportionate share of the interests in ASLP held by CPIII because Mr. Bodal can vote the interests on certain important matters and CPIII is a special purpose entity formed solely to hold interests.

(11)	In addition to the U.S. Equity Partners warrants, the U.S. Equity Partners Funds own a preferred equity interest in Holdings for which they paid $20.2 million and a note with a principal amount of $4.3 million for which they paid $3.8 million.

(12)

Mr. Crow is a director of Coastal Villages Region Fund, the parent of Coastal Villages Pollock LLC, and as such may be deemed to beneficially own and share the power to vote or dispose of the limited partnership units held by Coastal Villages Pollock LLC. Mr. Crow disclaims beneficial ownership of such limited partnership units.

(13)	Mr. Majoros is President and Chief Operating Officer of Wasserstein & Co., LP and as such may be deemed to beneficially own and share the power to vote or dispose of the interests held by the U.S. Equity Partners Funds. Mr. Majoros disclaims beneficial ownership of such interests.

(14)	Scott Perekslis is Managing Director of Centre Partners and as such may be deemed to beneficially own and share the power to vote or dispose of the securities held by Investors III, Individual III and Coinvestment III. Mr. Perekslis disclaims beneficial ownership of such securities.

The addresses of the beneficial owners shown in the table above who are beneficial owners of five percent or more of Holdings’ membership interests are as follows: Centre Partners Management LLC, 30 Rockefeller Plaza, Suite 5050, New York, New York 10020; Coastal Villages Pollock LLC, 711 H Street, Suite 200, Anchorage, Alaska 99501; and Bernt O. Bodal, American Seafoods Corporation, Market Place Tower, 2025 First Avenue, Suite 1200, Seattle, Washington 98121.

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Related Party Transactions

Agreements Relating to ASLP, Holdings and our Class A Common Stock

Exchange and Registration Rights Agreement

Effective upon the consummation of this offering, the Issuer, Holdings and ASLP will enter into the Exchange and Registration Rights Agreement. Under the Exchange and Registration Rights Agreement, the Issuer will (i) issue exchange warrants to all ASLP partners and option holders permitting such holders after one year to exchange their ASLP limited partnership units for IDSs at certain times and under certain circumstances, (ii) provide such partners and option holders certain demand, piggyback and shelf registration rights and (iii) agree at certain times to use its reasonable best efforts to effect one or more offerings of IDSs in order to fund certain redemptions of Holdings equity and notes and/or ASLP units. The exchange warrants and registration and redemption rights give effect to and replace the registration rights provisions in the original ASLP Securityholders Agreement referenced below.

Under the exchange warrants, each holder of an exchange warrant may, following the first anniversary of this offering and at such holder’s option, exchange some or all of such holder’s ASLP units for IDSs. Following any exchange, the Issuer will have the right to direct ASLP to deliver to it, in redemption of the ASLP units received by the Issuer in such exchange, a ratable portion of the Holdings equity and notes held by ASLP. In the event of any such redemption, the Issuer will not receive any interest in assets or liabilities of ASLP other than the Holdings equity and notes so distributed. ASLP will indemnify the Issuer for any liabilities associated with such redemption.

The amount of IDSs delivered by the Issuer to an ASLP unit holder in any exchange will equal such holder’s indirect pro rata interest in Holdings equity and notes. Thus, the indirect pro rata ownership in Holdings of stockholders of the Issuer and holders of ASLP units will not change as the result of any exchange. Holders of IDSs who are former holders of ASLP units will generally be entitled to receive the same aggregate amount of quarterly dividend and interest payments from the Issuer as such holders would have been entitled to receive from ASLP absent such exchange, subject to incremental Issuer-level expenses, including taxes. The exchange warrants will expire upon the liquidation of ASLP, which will occur on or about the fourth anniversary of this offering.

Following the first anniversary of this offering, Centre Partners, Coastal Villages and Bernt O. Bodal will each have three demand rights. Following the first, but prior to the fourth, anniversary of this offering, those demand rights may be used to require the Issuer to use its reasonable best efforts to register for resale IDSs received in exchange for ASLP units pursuant to the exercise of an exchange warrant. Following the fourth anniversary of this offering, those rights may be used to require the Issuer to use its reasonable best efforts to effect an offering of IDSs to the public. To reduce administrative complexities, following the first anniversary of this offering, the Issuer will not be required to register IDSs for resale pursuant to any such demand right unless the amount of IDSs to be registered is at least $15 million.

Following the first, but prior to the fourth, anniversary of this offering, holders of exchange warrants may exercise all or a portion of their exchange warrants during either of the two annual exercise periods, provided that, with respect to the first of these two periods, exercise would result in the issuance to holders of exchange warrants of at least $10 million of IDSs. Although there is no similar threshold during the second of the two exercise periods, holders (other than Centre Partners, Coastal Villages and Bernt O. Bodal) may not exercise their exchange warrants if they would have been able to exercise at any time within the prior twelve months.

Following the liquidation of ASLP, which will occur on or about the fourth anniversary of this offering, holders (other than Centre Partners, Coastal Villages and Bernt O. Bodal) of Holdings equity and notes will have the right during either of two annual redemption periods to require the Issuer to use its reasonable best efforts to effect an offering of IDSs to the public to fund the redemption of Holdings equity and notes held by former

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ASLP unitholders, provided that with respect to the first of these two periods, at least $10.0 million of IDSs are issued and, with respect to the second of these two periods, which has no similar threshold, the demanding holders were not able to participate (directly or indirectly) in a public offering of IDSs by the Issuer within the prior eighteen months.

To the extent that after six-months but prior to the first anniversary or following the fourth anniversary of this offering the Issuer issues IDSs to the public upon the exercise of a demand right by holders of ASLP units or Holdings equity and notes, the Issuer will invest the net proceeds of such issuance in Holdings equity and notes. If the issuance occurs prior to the liquidation of ASLP, Holdings will use the net proceeds to redeem a corresponding amount of Holdings equity and notes held by ASLP, and ASLP will then redeem ASLP units from the demanding ASLP unitholders. If the issuance occurs after the liquidation of ASLP, Holdings will use the net proceeds to redeem a corresponding amount of Holdings equity and notes held by the former ASLP unitholder.

Following the liquidation of ASLP, which will occur on or about the fourth anniversary of this offering, the Issuer may, at any time at which less than $10 million of Holdings equity and notes is held by former ASLP unitholders (other than Centre Partners, Coastal Villages or Bernt O. Bodal), require Holdings to redeem for cash all or a portion of the Holdings equity and notes held by such former ASLP unitholders, on a pro rata basis.

The Exchange and Registration Rights Agreement will also require the Issuer to use its reasonable best efforts to furnish a shelf registration statement from and after the first anniversary of this offering covering IDSs issuable upon the exercise of exchange warrants, which registration statement will generally remain effective for at least two years, subject to customary exceptions.

The Issuer may postpone any issuance of IDSs upon the exercise of an exchange warrant or a demand right during the pendency of any suspension period or any default by the Issuer under the terms of its notes.

In addition, the Exchange and Registration Rights Agreement will permit holders of our Class A common stock to exchange their Class A common stock into IDSs. The Class A common stock will not be exchangeable into IDSs for two years following the closing of this offering. If all such Class A common stock were exchanged into IDSs, the holders of our Class A common stock would receive an aggregate of 2,848,329 IDSs representing 2,848,329 shares of the Issuer’s common stock and $16.5 million aggregate principal amount of notes. See “Description of Capital Stock—Class A Common Stock.”

The Exchange and Registration Rights Agreement will also (i) restrict the activities of the Issuer to those of a holding company and require that it conduct all business activities through Holdings unless otherwise agreed in writing by ASLP, (ii) restrict ASLP from incurring material liabilities and (iii) provide the Issuer with certain rights to enforce, and prevent the amendment of, the foreign ownership restrictions related to the ownership of ASLP units.

As a condition to our obligation to issue IDSs (i) to satisfy any demand by holders of ASLP units for redemption of such units, (ii) upon exercise of exchange warrants, or (iii) upon exchange of shares of Class A common stock:

we must be permitted by the indenture to issue the additional notes to be included in such IDSs, which requires, among other things, that

•

no event of default or deferral of interest has occurred and is continuing;

•

we have obtained a solvency opinion from an independent appraisal firm; and

•

our board of directors has determined that such issuance would not jeopardize the federal income tax status of the notes already outstanding;

such transaction must comply with applicable laws, including, without limitation, securities laws, laws relating to redemption of equity and laws relating to the issuance of debt;

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such issuance of IDSs must occur pursuant to an effective registration statement;

such transaction must not conflict with or cause a default under any material financing agreement;

such transaction 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 transaction; and

we must have received at least 30 but not more than 60 days advance notice of such transaction.

ASLP Securityholders Agreement

The holders of options and units in ASLP are party to a Securityholders Agreement that was originally entered into on January 28, 2000 and that has been amended from time to time. As in effect on the date of this prospectus, the ASLP Securityholders Agreement imposes restrictions on transfers of securities in ASLP, provides “first offer,” “tag-along” and “drag along” rights with respect to certain transfers of ASLP securities and deals with certain other governance matters. In addition, the ASLP Securityholders Agreement contains provisions specifying the composition of the board of directors of ASC Management, Inc., the general partner of ASLP. Under those provisions, Centre Partners currently has the right to elect a majority of that board.

In connection with this offering, the ASLP Securityholders Agreement will be amended to (i) add an ownership restriction intended to ensure that the indirect percentage ownership of Holdings held by non-U.S. citizens does not exceed 22%; (ii) provide that Centre Partners, Coastal Villages and Bernt O. Bodal will initially each have the right to elect two directors of ASC Management, Inc.; and (iii) make various conforming changes to reflect this offering and the new structure, including deleting many of the transfer restrictions currently contained in such agreement.

Holdings Partnership Agreement

Simultaneous with the application of proceeds from this offering, Holdings will convert to a limited partnership and the Issuer and ASLP will execute the Agreement of Limited Partnership of Holdings. Under this agreement, the Issuer will, as general partner, have management authority over Holdings and its subsidiaries, including authority over the business and the right to cause Holdings to issue additional notes and equity to the Issuer, which will be proportionate to any notes and equity issued by the Issuer. In addition, the agreement will require the consent of ASLP with respect to tax and other matters that could have a disparate impact on ASLP’s interests in Holdings.

Under the Holdings limited partnership agreement, ASLP, and following the liquidation of ASLP and the distributions of Holdings equity and notes to former ASLP partners, the Holdings partners, will have the right to require the Issuer to use its reasonable best efforts to effect one or more IDS offerings to the public. Issuances of IDSs by the Issuer under this provision will generally be limited to the same extent exchanges of ASLP units for IDSs are limited under the exercise of the exchange warrants. See “—Exchange and Registration Rights Agreement.”

All allocations of income, gain, loss and deduction under the Holdings partnership agreements will generally be made in a manner consistent with the distribution of cash.

Expense Reimbursement Agreement

Simultaneously with the application of proceeds from this offering, ASG, Holdings, ASLP and the Issuer will enter into our Expense Reimbursement Agreement under which ASG will reimburse the Issuer, Holdings and ASLP for their respective reasonable out-of-pocket operating and administrative expenses following the consummation of this offering. ASLP’s reimbursement will not exceed $50,000 per year.

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Agreement Relating to Coastal Villages

Coastal Villages Pollock LLC, a substantial equity holder of ASLP, will be a holder of our Series A preferred stock, and will be entitled to designate under certain conditions two of our directors. See “Description of Capital Stock—Preferred Stock.” We are party to an agreement with Coastal Villages Region Fund, pursuant to which Coastal Villages Region Fund has granted us an exclusive license to harvest and process the entire portion of the total allowable catch allocated to it under the Alaska Community Development Quota program through the 2005 pollock season. Pursuant to this agreement, we paid to Coastal Villages Region Fund $10.9 million in 2001 and $11.6 million in 2002 and 2003, respectively, based on tons harvested. Coastal Villages Region Fund’s quota for the 2004 season represents 2.4% of the total allowable catch. Under the agreement, we are also committed to certain job training and community development initiatives for the benefit of Coastal Villages Region Fund’s member communities. The agreement is scheduled to terminate on December 31, 2005. Our agreement with Coastal Villages Region Fund is on arm’s-length terms, which we believe are no less favorable to us than those that would have been obtained in a comparable transaction with an unaffiliated third party.

Transactions and Agreements Relating to Our Management

Loans. On January 28, 2000, in connection with the purchase of our company by ASLP, ASLP entered into a loan agreement with Bernt O. Bodal, pursuant to which ASLP loaned Mr. Bodal $3.8 million to finance his purchase of equity interests in ASLP. On August 21, 2000, we loaned $200,000 to Mr. Bodal for personal purposes and on January 31, 2002, Holdings loaned to Mr. Bodal $500,000 to finance Mr. Bodal’s purchase of equity interests in Holdings. These loans were fully repaid in connection with the recapitalization of Holdings and its affiliates in April 2002.

In July 2002, we loaned $6 million to Mr. Bodal to finance a purchase of equity interests in ASLP and in

October 2002, we loaned $0.7 million to various members of management to finance their purchase of equity

interests in ASLP. The management loans included loans to Brad Bodenman and to Amy Humphreys of approximately $200,000 and $119,000, respectively. The terms of all such loans are substantially equivalent. The loans bear interest at prime plus 0.5% (4.5% at December 31, 2003), reset each January 1, April 1, July 1, and October 1. Payment is required to be made from the proceeds, net of applicable taxes, of any and all dividends and distributions with respect to the obligors’ Holdings or ASLP interests in connection with a public liquidity event or exercise of management options, whether currently owned or subsequently purchased, and 25% to 33% of the gross amount of any management bonus paid, with any remaining balance due in 2012. The underlying loans are recourse to the assets of the obligor, except that the recourse to assets other than ownership interests is eliminated in certain circumstances if the value of the underlying security becomes greater than four times the loan balance. All of the obligors interest in ASLP and Holdings is pledged as collateral on the loan. We expect these loans to be repaid in full as a result of the transactions consummated in connection with this offering.

In connection with the transactions contemplated by this offering, (i) immediately prior to the consummation of this offering, Holdings’ rights with respect to these loans will be distributed to ASLP and (ii) such members of management shall apply any distributions received by them on their ASLP units as a result of the consummation of the transactions contemplated by this offering, after payment of applicable income taxes, to repay such loans.

Corporate Insurance Policies. We purchase corporate insurance policies from ABD Seattle-Sullivan & Curtis, or ABD, an insurance company in which Mr. Trond R. Bodal is the President. Mr. Trond R. Bodal is the brother of Mr. Bernt O. Bodal, our Chairman and Chief Executive Officer. We paid ABD approximately $1.9 million, $3.3 million and $2.7 million in 2001, 2002 and 2003, respectively. No amounts were paid directly to Mr. Trond R. Bodal with respect to these insurance policies. We believe that the terms of the insurance policies we have obtained from ABD are no less favorable to us than those that would have been obtained from another insurance company.

Aircraft Charters. From time to time, ASLP has chartered an aircraft owned and operated by BJ Aviation LLC and Seattle Jet Services, Inc., companies in which Bernt O. Bodal initially had a 50% equity interest. During 2002 Mr. Bodal’s interest in BJ Aviation LLC was increased to 100% and his interest in Seattle Jet Services, Inc.

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was eliminated. ASLP chartered these aircraft to transport its and ASG’s executive officers and financial advisors. ASG distributed cash to ASLP to pay BJ Aviation LLC and Seattle Jet Services, Inc. a total of $15,533 in 2000 and $552,204 in 2001. In 2002, ASLP paid BJ Aviation LLC and Seattle Jet Services, Inc. a total of $1,225,354. No amounts were paid directly to Mr. Bodal with respect to these charters, other than reimbursement of expenses incurred in the ordinary course of business. We believe that the foregoing transactions among ASLP and BJ Aviation LLC and Seattle Jet Services, Inc. were on arm’s-length commercial terms no less favorable than those that would have been obtained in comparable transactions with an unaffiliated third party. On December 31, 2002, the aircraft that ASLP had chartered was returned by BJ Aviation LLC to its lender and immediately thereafter leased on a long term basis by that lender to ASLP. In connection with that lease, Mr. Bodal agreed to indemnify and hold harmless ASLP from costs and losses associated with the extent to which that long term lease is at a notional cost or value in excess of $5.7 million. Also on December 31, 2002 ASG entered into a month to month charter arrangement with ASLP for use of the aircraft. ASG’s lease expense to ASLP under this arrangement was $773,000 in 2003. Prior to the consummation of this offering, ASG and ASLP will enter into a four-year operating lease under which ASG will lease this aircraft for a base rent of $62,000 per month. We believe the terms of this lease are no less favorable to ASG than those that would have been obtained from an unaffiliated third party.

Certain Payments Relating to the 2000 Acquisition and the 2002 Recapitalization

In 2000, in connection with the purchase of our company by ASLP, we paid Centre Partners, Norway Seafoods and Bernt O. Bodal $4.6 million, $460,000 and $116,664, respectively, for providing management and financial consulting services to us, and reimbursed them for out-of-pocket expenses they incurred.

In connection with the recapitalization of Holdings and its affiliates in April 2002, $5.7 million was paid to Centre Partners out of the distribution to our equityholders for providing management and financial consulting services to us. In addition, we reimbursed Centre Partners for out-of-pocket expenses they incurred in connection with the recapitalization.

Certain Payments Relating to this Offering

In connection with the consummation of the transactions contemplated by this offering, we expect that Centre Partners, Bernt O. Bodal and Coastal Villages will receive $43.5 million, $43.4 million and $68.6 million, respectively, of the proceeds from this offering. We expect that Jeffrey Davis, Michael J. Hyde, Brad Bodenman, Amy Humphreys, Inge Andreassen and John Cummings will receive approximately $8.6 million, $1.9 million, $0.5 million, $1.2 million, $2.4 million and $0.6 million, respectively, of the proceeds from this offering. In addition, all vested options issued by ASLP (including certain options that will vest in connection with this offering) will be exercised and the holders of such options will also receive distributions. See “Management—ASLP Unit Option Plan.”

On October 4, 2002, the U.S. Equity Partners Funds purchased from Holdings a combination of redeemable preferred equity securities and notes, and purchased from ASLP warrants to purchase ASLP units, for a total purchase price of $27.3 million. In the transactions contemplated by this offering, Holdings will use approximately $34.7 million of the proceeds received to redeem the preferred equity interests and notes held by the U.S. Equity Partners Funds. In addition, a portion of the U.S. Equity Partners Funds warrants will be exercised in connection with the offering and a portion will be amended to become exercisable for Holdings equity and then transferred to the Issuer in exchange for IDSs and cash. A portion of the proceeds of this offering in the amount of $6.6 million will be paid to the U.S. Equity Partners Funds in connection with the transfer or exercise of these warrants.

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Detailed Transaction Steps

Prior to and in connection with the consummation of this offering, ASLP and its subsidiaries and affiliates will take a number of steps to rationalize our structure and prepare for this offering. More particularly:

1.	Holdings’ wholly owned subsidiary, American Seafoods Consolidated LLC, will merge with and into Holdings.

2.	Two Delaware corporations that have no assets other than equity interests in ASLP will exchange those interests for equity interests in Holdings. We refer to these corporations as the “Corporate Partners.”

3.	A warrant to acquire equity interests in ASLP held by an investment fund managed by Wasserstein & Co. will be amended so that it becomes exerciseable for an equivalent equity interest in Holdings. We refer to this warrant as the “U.S. Equity Warrant.”

4.	All of the outstanding stock of the Issuer will be successively distributed by ASG to Holdings and by Holdings to ASLP.

5.	ASLP will contribute a portion of its Holdings equity interests to the Issuer as a contribution to capital.

6.	The Issuer will reclassify its capital stock into Class A common stock (which will be held by ASLP) and authorized but unissued common stock.

In this offering, we expect that the Issuer will sell 33,536,585 IDSs and $33.1 million aggregate principal amount of notes separately (not represented by IDSs) and receive approximately $554.6 million in proceeds, net of fees to underwriters and assuming an initial public offering price of $16.40 per IDS and % of the stated principal amount for each note sold separately (not represented by IDSs). Substantially simultaneously, but in the order set forth below, the following transactions will take place:

The Issuer will acquire from the shareholders of the Corporate Partners 100% of the stock of each such corporation for consideration consisting of a total of 1,548,624 IDSs and $16.2 million in cash. This amount of cash will equal the amount of cash that would have been payable in respect of the equity held by the Corporate Partners under step 7(iii) below.

2.	The Issuer will acquire the U.S. Equity Warrant for consideration consisting of a total of 97,475 IDSs and $1.0 million in cash. This amount of cash will equal the amount of cash that would have been payable in respect of the net equity covered by the U.S. Equity Warrant under step 7(iii) below.

The Issuer will use the remaining net proceeds from the offering to acquire from Holdings (i) a general partnership interest in Holdings (which will simultaneously convert from a limited liability company into a limited partnership) (approximately $181.7 million in net proceeds); (ii) 100% of the stock of ASC, Inc., a Delaware corporation that owns preferred and common interests in ASG (approximately $102 million in net proceeds); and (iii) $253.7 million principal amount of Holdings notes (approximately $253.7 million in net proceeds).

4.	ASC, Inc. will contribute its preferred and common interests in ASG to Holdings in exchange for approximately 18.7% of the limited partnership interests in Holdings.

5.	Two current Holdings equity holders, one of whom is our chairman and chief executive officer, will exchange their equity interests in Holdings for ASLP limited partnership units.

6.	Holdings will issue $77.5 million principal amount of Holdings notes to ASLP in redemption of a portion of the Holdings equity interests held by ASLP.

Holdings will use the proceeds it receives from the Issuer, as well as proceeds from the repayment of a management loan, to (i) make a contribution to ASG (approximately $339.6 million in net proceeds); (ii) redeem its outstanding preferred equity interests and subordinated notes (approximately $34.7 million in net proceeds); and (iii) make a distribution to ASLP in redemption of a portion of its equity interests

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outstanding prior to the transaction (other than the equity interests held by the Corporate Partners and those represented by the U.S. Equity Warrant) (approximately $169.2 million in net proceeds).

ASG will use the remaining net proceeds received, together with $245.0 million of borrowings under the new credit facilities, to repay all outstanding borrowings under the existing credit facility and to pay amounts due in connection with the repayment of the existing credit facility and the closing of the tender offer and consent solicitation.

Holdings will guarantee, on a subordinated basis, the Issuer’s notes represented by the IDSs and the separate notes. ASG and its principal operating subsidiaries will guarantee, on a subordinated basis, the Issuer’s notes represented by the IDSs and the separate notes, as well as the Holdings notes held by the Issuer and ASLP. ASG’s obligations under the new credit facilities will be senior to all such guarantees, and Holdings and all domestic subsidiaries of ASG will guarantee, on a senior basis, all of ASG’s obligations under the new credit facilities.

10.	ASLP will distribute to its partners its shares of Class A common stock, the proceeds it receives from Holdings (approximately $169.2 million) and amounts it receives in repayment of management loans and as the exercise price of various options (approximately $2.2 million).

After giving effect to these transactions, the Issuer will own directly or indirectly approximately 74.0% of the equity interests in Holdings and in ASG, and ASLP will own the remaining 26.0%. In addition, members of management will have unvested options to acquire equity interests in ASLP, a portion of which will vest based either on the option holders’ continued employment or on a combination of such continued employment and the achievement by Holdings of performance targets. The options that vest in this compensatory manner will be structured so that the resulting dilution is shared ratably by the Issuer and ASLP. Other management options to acquire equity interests in ASLP will dilute only the owners of ASLP.

In connection with the offering, the Issuer will issue to all ASLP partners and option holders exchange warrants permitting such holders to exchange their regular ASLP limited partnership units for IDSs. Upon any such exchange, the Issuer would then have the right to exchange the ASLP units received by it for equity interests in Holdings and Holdings notes. If all such exchange warrants, other than those associated with compensatory options, were exercised in full, the ASLP partners and option holders would receive an aggregate of 13,368,036 IDSs (or 26.0% of the total IDSs that would be outstanding following such exercise), and the Issuer would own 100% of the economic interests in Holdings. Following the liquidation of ASLP and distribution by ASLP of any remaining Holdings equity units and Holdings notes to its partners, which will occur on or about the fourth anniversary of this offering, all exchange warrants will terminate. Instead, holders of Holdings equity units will have the right in certain circumstances to require the Issuer to use its reasonable best efforts to effect offerings of IDSs and invest the net proceeds in Holdings equity units and notes, permitting Holdings to redeem a corresponding amount of equity units and notes held by such partners of Holdings. See “Related Party Transactions—Agreements Relating to ASLP and Holdings—Holdings Partnership Agreement.”

The Issuer will also issue preferred stock to three partners of ASLP—Coastal Villages Pollock LLC, Bernt O. Bodal, our chairman and chief executive officer, and Centre Partners that will initially entitle each such holder to elect two members, one member and one member, respectively, of the Issuer’s board of directors, which will consist of nine members following this offering and may not be expanded or contracted without the approval of a majority of the directors elected by the holders of the preferred shares. See “Description of Capital Stock —Common Stock” and “Description of Capital—Preferred Stock.”

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The following charts reflect our capital structure immediately prior to and after giving effect to the transactions contemplated hereby:

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Description of Certain Indebtedness

New Credit Facilities

Concurrently with the closing of this offering, Holdings, ASG and its subsidiaries are expected to enter into new secured credit facilities, which will replace our existing credit facility. CIBC World Markets Corp. will act as sole placement agent, lead arranger and bookrunner for the new credit facilities. We expect that the new credit facilities will consist of a credit agreement among us and a syndicate of financial institutions, with Wells Fargo Bank, N.A., as administrative agent, which we refer to as the “new credit agreement,” and senior secured notes that will be placed with institutional investors and will have covenants and certain other provisions substantially similar to the new credit agreement. ASG will be the borrower under the new credit facilities. As the terms of the new credit facilities have not been agreed upon, the final terms of the new credit facilities may differ from those described below, and such differences may be significant. The closing of this offering is conditioned upon the closing of the proposed new credit facilities.

We expect that the new credit facilities will consist of:

a revolving credit facility in a total principal amount of up to $80.0 million, which we refer to as the “new revolver”;

a term loan in a total principal amount of $80.0 million, which we refer to as the “new term loan”; and

senior secured notes in an aggregate principal amount of $140.0 million, which we refer to as the “new senior notes.”

The new revolver will have a swingline subfacility of $15.0 million and a letter of credit subfacility of $15.0 million allowing issuance of letters of credit for the account of ASG. The new credit facilities will also include interest rate and currency exchange swaps and derivatives that may be entered into by ASG or its subsidiaries with the lenders under the new credit agreement (or their affiliates).

Both the new term loan and the new senior notes will be drawn in full upon the closing of this offering. We intend to use the borrowings under the new credit facilities, together with proceeds of this offering, to repay the outstanding indebtedness under our existing senior subordinated notes and all amounts outstanding under our existing credit facility, and to consummate other transactions in connection with this offering described in this prospectus. See “Use of Proceeds.” We expect to borrow additional amounts under the new revolver from time to time as needed to provide for working capital and general corporate needs, including permitted acquisitions. Assuming completion of the transactions described in this prospectus, as of December 31, 2003, there would have been approximately $245 million of outstanding indebtedness under the new credit facilities and approximately $55 million of borrowing capacity under the new revolver.

We expect that the new credit facilities will mature on December 31, 2008.

We expect that the new credit facilities will have several features similar to credit facilities of this nature, including but not limited to:

Interest Rate and Fees. Borrowings will bear interest, at our option, for the new revolver and for the new term loan at either (a) LIBOR plus the LIBOR rate applicable margin or (b) the Base Rate, as such term will be defined in the new credit agreement, plus the base rate applicable margin. We expect that the new senior notes will bear interest at a rate per annum equal to the sum of the five-year U.S. Treasury rate which will be fixed as of the closing date plus a spread described below.

The initial LIBOR rate applicable margin and the initial base rate applicable margin are expected to be 2.0% and 1.0%, respectively, subject to subsequent adjustments depending on our total leverage ratio. We expect that the spread applicable to the new senior notes will be 3.0%, subject to potential adjustment. The interest on the new credit facilities will be payable monthly in arrears in respect of base rate loans, and on the last day of each interest period in respect of LIBOR loans. Interest on new senior notes will be paid quarterly. The interest rates

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on the new revolver, the new term loan and the new senior notes may increase by 2% following the end of the initial interest deferral period if our ratio of senior indebtedness (calculated using the average amounts drawn on the revolver) to adjusted EBITDA (the “senior leverage ratio”) exceeds 2.00:1.00 and distributions from ASG to Holdings to repay deferred interest on the Holdings notes exceed the cash accumulated in ASG and available for such distributions after payments in respect of ASG’s indebtedness, taxes and expenses. In addition, the interest rate on the new credit facilities will increase by 2% per annum during the continuance of an event of default, provided that the total increase of interest rate may not exceed 3%.

The new revolver will provide payment to the lenders of a commitment fee on any unused commitments equal initially to 0.50% per annum, payable quarterly in arrears, as well as other fees.

Mandatory Prepayments. The new credit facilities will require us to prepay outstanding loans under the new term loan and the new senior notes (provided that senior notes lenders may refuse such prepayments under certain circumstances), among other instances, (a) with, subject to certain conditions and exceptions, 100% of the net cash proceeds received by us from any sale, transfer or other disposition of any assets, 100% of net casualty insurance proceeds, 100% of the net cash proceeds received by Holdings or its subsidiaries from the incurrence of any indebtedness by the Issuer or any of its subsidiaries, 50% of the net proceeds received by Holdings or its subsidiaries in respect of any issuance or sale of equity or IDSs by the Issuer, ASLP or any of their subsidiaries (which will increase to 100% if an interest deferral period is in effect at the time of such issuance), and (b) with a portion of our available cash during any dividend suspension period or interest deferral period, as described below under “—Permitted Distributions by ASG and Holdings.” If an event of default exists at the time of prepayment, the amounts of prepayment will be applied ratably to repay the new term loans and the new senior notes and reduce the total revolving loan commitment. If no event of default exists at the time of prepayment, the amounts of prepayment will be applied ratably to prepay the new term loans and the new senior notes, and following repayment in full of the new term loans, the amounts of prepayments will be applied ratably to repay the new senior notes and reduce the revolver commitments.

Voluntary Prepayments. The new credit agreement will provide for voluntary prepayments of the new revolver and the new term loan and voluntary commitment reductions of the new revolver, subject to giving proper notice and compensating standard LIBOR breakage costs, if applicable. We expect that the new senior notes will permit voluntary prepayments at par value of the senior notes plus a make-whole price to be determined. If no event of default exists, we will have the right to offer to prepay the senior notes at par value, which any holder of the senior notes may reject. We expect that we will only be permitted to make simultaneous ratable prepayments of the new credit agreement and the new senior notes.

Covenants. We expect that the new credit facilities will contain the following financial covenants, calculated in respect of Holdings and its consolidated subsidiaries for each four-quarter period ended on the last day of any fiscal quarter (provided that financial covenants for each such period ended on March 31 will be calculated based on adjusted EBITDA for the five-quarter period then ended multiplied by 4/5):

The ratio of adjusted EBITDA to interest expense, cash taxes and tax distributions (the “fixed charge coverage ratio”) as of the last day of any fiscal quarter will not be less than the applicable ratio specified below:


Quarter Ended		Ratio
Closing – June 29, 2005		1.55 to 1
June 30, 2005 and thereafter		1.65 to 1

As of December 31, 2003, on a pro forma basis after giving effect to this offering, the fixed charge coverage ratio of Holdings would be 2.07 to 1.

The senior leverage ratio as of the last day of any fiscal quarter will not be greater than 2.75 to 1. As of December 31, 2003, on a pro forma basis after giving effect to this offering, the senior leverage ratio of Holdings would be 2.17 to 1.

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Holdings and its subsidiaries will be prohibited from incurring additional indebtedness, unless after giving pro forma effect to such incurrence the ratio of total debt to adjusted EBITDA (the “total leverage ratio”) is less than or equal to 5.5 to 1 and subject to other limitations, provided that Holdings and its subsidiaries will be permitted to incur indebtedness for permitted acquisitions regardless of the total leverage ratio covenant if, after giving pro forma effect to such acquisition and incurrence of such indebtedness, the fixed charge coverage ratio is increased and the senior leverage and total leverage ratios are decreased, and the entities remain solvent. As of December 31, 2003, on a pro forma basis after giving effect to this offering, the total leverage ratio of Holdings would be 4.95 to 1.

The new credit facilities will contain negative covenants and restrictions, including, among others, redeeming and repurchasing our other indebtedness, loans and investments, additional indebtedness, liens, sale-leaseback transactions, capital expenditures, changes in the nature of our business, mergers, acquisitions, asset sales, dividends, distributions and transactions with affiliates. Because our new credit facilities will permit under certain circumstances certain dividends and distributions from ASG to us (which will provide us with cash necessary to pay interest and dividends on the IDSs) as described below under “Permitted Distributions by ASG and Holdings,” and those distributions will decrease the amount of cash available to us to service our debt and meet our liquidity requirements, we expect that the new credit facilities will impose limitations on our ability to incur debt, make investments and development capital expenditures that are more restrictive than customary for credit facilities of comparable borrowers that prohibit or substantially limit payments on dividends. In particular, among other things, Holdings and its subsidiaries will not be allowed to have debt in excess of $10 million, other than indebtedness under the new credit facilities, the Issuer’s notes, the Holdings notes and debt in an amount of up to $22.5 million that is subordinated to the Issuer’s notes and related guarantees.

The new credit facilities will contain customary affirmative covenants.

Permitted Distributions by ASG and Holdings. We expect that, subject to certain conditions and restrictions, the new credit facilities will permit distributions by ASG to Holdings (and by Holdings to ASLP and the Issuer) to pay (1) taxes, (2) administrative expenses, (3) current interest on the Holdings notes and interest on deferred interest and (4) subject to minimum availability on the new revolver and other conditions described below, prepay deferred interest on the Holdings notes, provided that with respect to distributions described in clauses (3) and (4), no default or event of default exists and the Holdings’ ratio of adjusted EBITDA to interest expense (the “interest coverage ratio”) for the four-quarter period ended on the last day of any fiscal quarter (provided that such ratio for such period ended on any March 31 will be calculated based on adjusted EBITDA for the five-quarter period then ended multiplied by 4/5) is equal to or greater than the applicable interest deferral threshold listed below:


Quarter Ended		Interest Deferral Threshold
Closing – June 29, 2005		1.65 to 1
June 30, 2005 and thereafter		1.75 to 1

In addition, our new credit facilities will permit additional voluntary distributions from ASG and its subsidiaries to Holdings and from Holdings to ASLP and the Issuer (which will provide the Issuer with cash necessary to pay dividends on the common stock represented by the IDSs and Class A common stock) so long as, among other conditions and restrictions, no default or event of default has occurred under the new credit facilities, there is no outstanding deferred interest on the Holdings notes and the interest coverage ratio of Holdings for the four-quarter period ended on the last day of any fiscal quarter (provided that such ratio for such period ended on any March 31 will be calculated based on adjusted EBITDA for the five-quarter period then ended multiplied by 4/5) is equal to or greater than the applicable dividend suspension threshold listed below:


Quarter Ended		Dividend Suspension Threshold
Closing – June 29, 2005		1.75 to 1
June 30, 2005 and thereafter		1.85 to 1

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The amount that may be distributed by ASG and Holdings as voluntary dividends for any fiscal quarter may not exceed (A) Holdings’ adjusted EBITDA for the twelve-month period ended on the last day of such quarter (calculated excluding all non-wholly-owned subsidiaries except to the extent of cash dividends received from such subsidiaries), less cash interest expense (exclusive on interest expense on the Holdings notes), maintenance capital expenditures (with a minimum deduction for maintenance capital expenditures of $6.0 million), certain administrative costs of the Issuer, Holdings and ASLP, fees and expenses related to acquisition, merger and consolidation transactions, scheduled principal payments on our indebtedness and income taxes or tax distributions net of tax refunds or tax rebates (we refer to the amount described in this clause (A) as “available cash”), minus (B) interest expense on the Holdings notes, minus (C) voluntary dividends paid in respect of three immediately preceding fiscal quarters, plus (D) available cash that was accumulated after the closing date but was not distributed in a prior period, minus (E) investments in lieu of voluntary dividends, and plus (F) the initial adjustment amount that is initially set at $7.5 million, subject to reduction to $5.0 million on June 30, 2006, to $2.5 million on June 30, 2007, and to zero on June 30, 2008, and subject to reduction by all voluntary dividends in excess of amounts that would be permitted by clauses (A) through (E) above. See “Interest and Dividend Payments to IDS Holders” for a calculation of distributions to IDS holders on a pro forma basis.

As of December 31, 2003, on a pro forma basis after giving effect to this offering, the interest coverage ratio of Holdings would be 2.20 to 1.

The interest coverage ratio will be tested quarterly. Within 40 days after the end of each fiscal quarter we will be required to deliver to the senior lenders a compliance certificate demonstrating our interest coverage ratio for the period ended on the last day of that fiscal quarter, as well as compliance with financial and other covenants contained in the new credit facilities. Unless and until we deliver such certificate, no distributions will be permitted, other than distributions necessary to pay taxes and administrative expenses. Our failure to deliver such certificate within 10 days of the due date constitutes an event of default under the new credit facilities. After we deliver to the lenders a certificate demonstrating that our interest coverage ratio is above the dividend suspension threshold or the interest deferral threshold, as the case may be, and that we are in compliance with financial and other covenants, distributions will be permitted (including distributions to pay dividends, if our interest coverage ratio is equal to or exceeds the dividend suspension threshold described above) starting five business days after the date when we deliver such certificate and ending on the date when we are required to deliver the next quarterly compliance certificate.

If our interest coverage ratio is below the applicable dividend suspension threshold (or if we fail to timely deliver financial statements demonstrating compliance with such ratio) (a “dividend suspension period”), ASG will not be allowed to pay dividends to us, but it will be permitted to make other distributions described above, including distributions necessary to enable Holdings to pay interest (including interest on deferred interest, if any) on the intercompany notes (which would provide the Issuer with cash to pay interest on the Issuer’s notes), taxes and administrative expenses. During any dividend suspension period, ASG will be required to use 75% of its cash available after payments of accrued interest, and required principal repayments in respect of ASG’s indebtedness, administrative expenses, maintenance capital expenditures and taxes (“available cash”) in excess of distributions made or permitted to be made by it to allow Holdings to pay interest on the intercompany notes, to prepay the loans outstanding under the new credit facilities.

If our interest coverage ratio is below the applicable interest deferred threshold (or if we fail to timely deliver financial statements demonstrating compliance with such ratio), ASG will not be allowed to make distributions to Holdings, and Holdings will not be permitted to make distributions to ASLP and the Issuer, other than distributions to pay administrative expenses and taxes (an “interest deferral period”), which would leave us with insufficient cash to pay interest on the Issuer’s notes.

During any interest deferral period, in addition to mandatory prepayments required as a result of dividend suspension, ASG will be required to use 50% of the lesser of (i) the cash that would have been distributed to Holdings to enable it to pay interest on the Holdings notes (not including interest on accrued and deferred interest) and (ii) available cash accumulated during such period, to prepay the loans outstanding under the new

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credit facilities. When the interest coverage ratio of Holdings is such that an interest deferral period is required under the new credit facilities, interest will also be deferred on the Holdings’ intercompany notes and the Issuer’s notes because the interest deferral thresholds contained in the new credit facilities and in the Holdings notes and the Issuer’s notes are substantially identical. See “Description of Notes—Interest Deferral.” However, we expect that the interest deferral under our new credit facilities will continue as long as we do not meet the interest deferral thresholds, and will not be subject to the 8 quarter limitation that applies to deferral of interest on the Holdings’ intercompany notes and the Issuer’s notes. Accordingly, if Holdings and the Issuer no longer may defer interest on the Holdings’ intercompany notes and the Issuer’s notes but the interest coverage ratio of Holdings remains below a specified threshold and the new credit facilities prohibit ASG and its subsidiaries from making distributions to Holdings, Holdings will not have sufficient funds to pay interest on the Holdings notes and, consequently, the Issuer will not have sufficient funds to pay interest on the Issuer’s notes, which will cause a default under both the intercompany notes and the Issuer’s notes.

If a default or an event of default under the new credit facilities has occurred and is continuing, even if the interest coverage ratio of Holdings exceeds the applicable interest deferral threshold or dividend suspension threshold, ASG will not be permitted to make any distributions to Holdings, other than distributions to pay taxes and administrative expenses, which would leave us with insufficient cash to pay interest on the Issuer’s notes. If a default or event of default under the new credit facilities exists but the interest coverage ratio of Holdings is equal to or greater than the interest deferral threshold and no interest deferral is permitted under the Holdings notes and the Issuer’s notes, the failure of Holdings and the Issuer under such circumstances to pay interest on the Holdings notes and the Issuer’s notes, respectively, would cause a default under both the intercompany notes and the Issuer’s notes. See “Risk Factors—Our new credit facilities will contain significant limitations on distributions and other payments.”

ASG will not be permitted to make distributions to Holdings to prepay any deferred interest on the Holdings notes (which would provide the Issuer with cash to prepay deferred interest on the Issuer’s notes), unless no default or event of default exists under the new credit facilities and after giving pro forma effect to such distribution ASG has unused borrowing capacity under the new revolver in at least the following amounts:


Period		Revolver Borrowing Capacity
January 1-April 30, July 1-November 30 of each year		$15 million
May 1-June 30, December 1-December 31 of each year		$40 million

In addition, during a dividend suspension period, we may only prepay deferred interest on the Holdings Notes with amounts available after mandatory prepayments of the new credit facilities.

Collateral. The new credit facilities will be guaranteed by all domestic subsidiaries of ASG. Holdings will also guarantee the new credit facilities and pledge 100% of the equity interests in ASG to secure the facilities. In addition, ASG and its subsidiaries will provide to Wells Fargo Bank, N.A., as collateral agent for the benefit of the lenders under the new credit agreement and the new senior notes and certain derivatives counterparties, collateral consisting of, without limitation, 100% of the capital stock of all wholly-owned domestic subsidiaries of ASG, 65% of the capital stock of first-tier foreign subsidiaries of ASG, and a security interest in substantially all current and future tangible and intangible assets of ASG and its domestic subsidiaries, which will include preferred marine mortgages on all our marine vessels.

Events of Default. The new credit facilities will contain customary events of default, including but not limited to, failure to pay principal, interest or other amounts when due, breach of covenants or representations, cross-defaults to certain other material agreements and indebtedness in excess of specified amounts, judgment defaults in excess of specified amounts, certain ERISA and environmental defaults, failure of any guaranty or security document supporting the new credit facilities or the subordination provisions of the Holdings notes or the Issuer’s notes to be in full force and effect, a change of control, and certain events of bankruptcy and insolvency.

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Intercompany Notes

General. Upon the closing of this offering, the Issuer will lend $253.7 million of the proceeds from the offering to Holdings pursuant to subordinated intercompany notes (which we refer to as the “Holdings notes” or the “intercompany notes”), such that the aggregate principal amount of the Holdings notes issued to the Issuer will equal the sum of the principal amount of the Issuer’s notes plus the amount of notes which would be issued upon exchange of all Class A common stock for IDSs. Holdings will also issue identical intercompany notes to ASLP in an amount equal to $77.5 million in redemption of a portion of the Holdings’ equity interests held by ASLP. The Holdings notes will be issued pursuant to a note purchase agreement, to be entered into on the closing date of this offering, among Holdings, as borrower, the Issuer and ASLP, as lenders, and the intercompany guarantors. A form of the note purchase agreement will be filed as an exhibit to the registration statement of which this prospectus is a part. The intercompany notes will contain the same payment and interest terms and substantially similar other material provisions, including subordination provisions, as the Issuer’s notes and the note guarantees, with certain variations described below.

Principal, Interest, Maturity and Ranking. The initial aggregate principal amount of the Holdings notes will be $331.2 million, which will include $77.5 million of the Holdings notes issued to ASLP. The Holdings notes will bear interest at % per annum and will contain the same interest payment and interest deferral provisions as the Issuer’s notes. The Holdings notes will mature in 2019, provided that the notes may automatically become due in 2014 under certain circumstances. See “Description of Notes—General” and “Description of Notes—Interest Deferral.”

The Holdings notes will be unsecured subordinated obligations of Holdings, will rank pari passu in right of payment with Holdings’ guarantee of the Issuer’s notes, and will be subordinate in right of payment to the guarantee of the new credit facilities issued by Holdings and the pledge to secure those facilities. As of the closing of this offering, Holdings will have no indebtedness other than the Holdings notes, the guarantee of the Issuer’s notes, the guarantee of the new credit facilities and a pledge by Holdings of 100% of equity interests in ASG to secure the new credit facilities. The guarantees of the Holdings notes will be subordinated to all senior indebtedness of the guarantors, including indebtedness under the new credit facilities. Because Holdings is a holding company and conducts no independent operations, the Holdings notes will be structurally subordinated to all obligations of Holdings’ subsidiaries that have not guaranteed the Holdings notes. As of the closing of this offering, all domestic subsidiaries of Holdings will guarantee the Holdings notes and the foreign subsidiaries have no material indebtedness.

Additional Intercompany Notes. Holdings will issue additional intercompany notes in the future to the Issuer simultaneously with issuances of additional Issuer’s notes or to ASLP in an aggregate principal amount of up to $17.4 million upon exercise of management options to acquire units in ASLP. Such additional Holdings notes will be substantially identical to the Holdings notes issued upon the closing of this offering, but will not be subject to the automatic exchange provisions that apply to the Issuer’s notes.

Intercompany Guarantees. The Holdings notes will be guaranteed by ASG and its domestic subsidiaries on the same basis as the Issuer’s notes. We refer to these guarantees as the intercompany guarantees. See “Description of Notes—Guarantees and Pledge” and “Description of Notes—Certain Covenants—Future Guarantors” for a description of principal terms of the intercompany guarantees.

Allocation of Payments between the Issuer and ASLP. Holdings will make all payments on its notes to the Issuer and ASLP pro rata to the percentage of the Holdings notes held by each of them. The Issuer and ASLP will agree to allocate all amounts collected from Holdings under the intercompany notes or from Holdings’ subsidiaries under the intercompany guarantees between the Issuer and ASLP such that all amounts received by (i) the Issuer, together with all payments of principal of the Issuer’s notes collected by the trustee or the holders of the Issuer’s notes under the guarantees of the Issuer’s notes, and (ii) ASLP correspond to the pro rata percentage of outstanding intercompany notes held by the Issuer and ASLP, respectively. Accordingly, any amounts in respect of principal of the Issuer’s notes collected by the trustee or the holders of the Issuer’s notes will be deemed to reduce the obligations of Holdings or such subsidiary guarantor owed by it to the Issuer in respect of the principal of the Holdings notes.

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Covenants, Defaults and Other Provisions. The Holdings notes will contain substantially similar restrictive covenants, defaults and other provisions as the Issuer’s notes, except as described below. See “Description of Notes” for a description of provisions regarding ranking and subordination, certain covenants, merger, consolidation, or sale of all or substantially all assets, defaults and governing law that will be substantially similar to those of the Holdings notes. Holdings will be allowed to prepay the notes at any time without premium. The Issuer will covenant not to allow any such redemption by Holdings if the aggregate principal amount of the Holdings notes held by it after such redemption would be less than the aggregate principal amount of the Issuer’s notes outstanding (assuming all shares of Class A common stock were exchanged for IDSs). The Holdings notes will not contain mandatory redemption provisions as a result of a change of control or certain asset sales, and will not be subject to defeasance. In addition, pursuant to the cross-default and cross-acceleration provisions of the intercompany notes, an event of default under the Issuer’s notes will trigger an event of default under the intercompany notes, and acceleration of the Issuer’s notes will trigger automatic acceleration of the Holdings notes.

Pledge of the Intercompany Notes and the Intercompany Guarantees. The Issuer will pledge all of its interest in the Holdings notes and related guarantees by ASG and its subsidiaries and all proceeds therefrom to the trustee for the benefit of the holders of the Issuer’s notes to secure the Issuer’s notes. See “Description of Notes—Guarantees and Pledge—Pledge” for a description of other terms of the pledge.

Voting rights of the Issuer and ASLP. The intercompany loan agreement will provide that each of the Issuer and ASLP will have the right to vote on all matters requiring a vote of the holders of the intercompany notes based on the percentage of the aggregate principal amount of the outstanding intercompany notes held by it. Amendments, waivers and acceleration of the intercompany notes will generally require consent of the holders of a majority in principal amount of the outstanding intercompany notes, although some amendments will require consent of each affected holder, including changes to payment terms and extension of maturity. As of the closing of this offering, the Issuer will hold approximately 76.6% of the Holdings notes and therefore will be a majority noteholder, and that percentage may increase in the future upon issuances of additional intercompany notes to the Issuer and exchanges of ASLP units for the IDSs and the exercise of registration rights or decrease upon exercise of ASLP options. However, pursuant to the terms of the indenture governing the Issuer’s notes, so long as the Holdings notes held by the Issuer are pledged to secure the Issuer’s notes, the Issuer will not be permitted to consent to certain amendments and waivers in respect of the intercompany notes without consent of a majority of the holders of the Issuer’s notes, and for changes to payment terms and extension of maturity of the intercompany notes and similar amendments, that consent must be unanimous. See “Description of Notes—Certain Covenants—Covenants related to the pledge.” ASLP will be entitled to enforce payments due to it under the intercompany notes, but only the Issuer as the majority noteholder will be entitled to pursue other remedies under the Holdings notes on behalf of itself and ASLP.

Existing Senior Subordinated Notes

On September 15, 2003, we commenced a tender offer to purchase our existing senior subordinated notes and a related consent solicitation to amendments to the indenture governing such notes to eliminate substantially all of the restrictive covenants, certain repurchase rights and certain events of default and related provisions contained in such indenture. As of April 30, 2004, all of our existing senior subordinated notes had been validly and irrevocably tendered. The tender offer will expire on May 3, 2004, unless we extend it. The closing of the consent solicitation and tender offer with respect to these notes is a condition to this offering. See “Summary—Existing Senior Subordinated Notes.”

Existing Credit Facility

Holdings, ASG and various subsidiaries of Holdings and ASG entered into a senior credit facility with various financial institutions, with Bank of America, N.A. acting as the administrative agent, pursuant to which ASG borrowed $360.0 million in term loans and obtained a revolving credit facility of $75.0 million. All amounts outstanding under the existing credit facility will be repaid with the proceeds of this offering.

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Description of IDSs

General

We are offering 33,536,585 IDSs. Each IDS represents:

one share of our common stock; and

a % note with a $5.80 principal amount.

The ratio of common stock to principal amount of notes represented by an IDS is subject to change in the event of a stock split, recombination or reclassification of our common stock. 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 common stock to principal amount of notes as a result of such event.

Holders of IDSs are the beneficial owners of the common stock and notes represented by such IDSs and 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 notes indenture, ranking upon bankruptcy and rights to receive communications and notices as a direct holder of the common stock and notes, as applicable.

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. We urge you to consult with your broker or financial institution to find out what those procedures are.

Voluntary Separation

Holders of IDSs, whether purchased in this offering or in subsequent offerings of IDSs of the same series, may, at any time after the earlier of 45 days from the closing of this offering or the occurrence of a change of control under the indenture, through their broker or other financial institution, separate their IDSs into the shares of common stock and notes represented thereby. Unless the IDSs have been previously automatically separated as a result of redemption or maturity of the notes or otherwise, any holder of shares of our common stock and notes may, at any time, through their broker or other financial institution, combine the applicable number of shares of common stock and notes to form IDSs. See “—Book-Entry Settlement and Clearance” below for more information on the method by which delivery and surrender of IDSs and delivery of shares of common stock and our notes will be effected.

Automatic Separation

Upon the occurrence of any of the following, all outstanding IDSs will be automatically separated into the shares of common stock and notes represented thereby:

exercise by the Issuer of its right to redeem all or a portion of the notes, which may be represented by IDSs at the time of such redemption,

the date on which principal on the notes becomes due and payable, whether at the stated maturity date or upon acceleration thereof,

•

the continuance (without cure) of a payment default on the notes for 90 days, 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.

In addition, upon the exercise by the Issuer of its right to redeem shares of its common stock in order to comply with regulatory foreign ownership limitations, the IDSs that represent such shares subject to redemption will automatically separate.

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Following the automatic separation of the IDSs as a result of the redemption or maturity of any notes, shares of common stock and notes may no longer be combined to form IDSs.

The Class A common stock will be exchangeable for IDS after the second anniversary of the offering at the option of the holder, subject to certain restrictions. In addition, subject to certain conditions, the holders of Class A common stock will have the option to exchange the Class A common stock for common stock and notes at such time as the IDS are automatically separated.

Book-Entry Settlement and Clearance

DTC will act as securities depository for the IDSs, the notes and shares of common stock represented by the IDSs, which we refer to collectively as the “securities.” The notes and the shares of our 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 partnership 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 the transaction, as well as periodic statements of their holdings, from the DTC participant through which the beneficial owner entered into the transaction.

All interests in the securities will be subject to the operations and procedures of DTC. The operations and procedures of DTC’s settlement system may be changed at any time.

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 partnership nominee, Cede & Co. The deposit of securities with DTC and their registration in the 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 recombination. Holders of IDSs, whether purchased in this offering or in subsequent offerings of IDSs of the same series, may, at any time after 45 days from the closing of this offering or such earlier date

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upon a Change of Control, as defined in the indenture, through their broker or other financial institution, separate their IDSs into the shares of common stock and notes represented thereby. Similarly, any holder of shares of our common stock and notes may, at any time, through their broker or other financial institution, combine the applicable number of shares of common stock and notes to form IDSs. Any such separation or recombination will be effective as of the close of business on the trading day that DTC receives such instructions from a participant.

All outstanding IDSs will be automatically separated into the shares of common stock and notes represented thereby upon the occurrence of the following:

exercise by the Issuer of its right to redeem all or a portion of the notes, which may be represented by IDSs at the time of such redemption,

the date on which principal on the notes becomes due and payable, whether at the stated maturity date or upon acceleration thereof,

the continuance (without cure) of a payment default on the notes for 90 days, or

The Class A common stock will be exchangeable for IDSs after the second anniversary of the offering at the option of the holder, subject to certain restrictions. In addition, subject to certain conditions, the holders of Class A common stock will have the option to exchange the Class A common stock for common stock and notes at such time as the IDSs are automatically separated.

Any voluntary or automatic separation of IDSs and any subsequent combination of IDSs from notes and 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 recombination is effected, will be credited and debited for the applicable securities on DTC’s records. There may be certain transactional fees imposed upon you by brokers or other financial intermediaries in connection with separation or recombination of IDSs and you are urged to consult your broker regarding any such transactional fees. We have been informed by DTC that the current fee per transaction per participant account for any separation or recombination is $9.50.

Conveyance of notices and other communications, including notices relating to separation and combination of IDSs, between DTC and direct participants, between direct participants and indirect participants, and between participants and 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 us 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 (identified in a listing attached to the Omnibus Proxy).

We and the trustee 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 trustee, subject to any statutory or regulatory requirements as may be in effect from time to time.

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We or the trustee 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. We will remain responsible for any actions DTC and participants take in accordance with instructions we provide.

DTC may discontinue providing its service as securities depository with respect to the IDSs, the shares of our common stock or our notes at any time by giving reasonable notice to us or the trustee. 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 common stock or our notes and we are unable to obtain a successor securities depository, we will print and deliver to you certificates for those securities and you will automatically take a position in the other component securities.

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 common stock and 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 any 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, any ownership interest in the securities, or

any payments to, or the providing of notice, to participants or beneficial owners.

Procedures relating to subsequent issuances. The indenture governing the notes and the agreements with DTC will provide that, in the event there is a subsequent issuance of notes which are substantially identical to the notes offered hereby but having a different CUSIP number, each holder of notes or 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 for a portion of the notes acquired by the holders of such subsequently issued notes. Consequently, following each such subsequent issuance and exchange, each holder of notes or IDSs (as the case may be) will own 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 notes outstanding prior to the subsequent issuance and the notes issued in the subsequent issuance. Accordingly, the notes issued in the original offering cannot be separated from the notes issued in any subsequent offering. In addition, immediately following any exchange resulting from a subsequent offering, the IDSs will consist of the inseparable unit described above representing the proportionate principal amounts of each issuance of notes (but with the same aggregate principal amount as the note (or inseparable unit) represented by the IDSs immediately prior to such subsequent issuance and exchange) and the common stock. All accounts of DTC participants with a position in the securities will be automatically revised to reflect the new CUSIP numbers. In the event of any voluntary or automatic separation of IDSs following any such automatic exchange, holders will receive the then existing components which are the common stock and the inseparable notes unit. The automatic exchange of notes described above should not impair the rights any holder would otherwise have to assert a claim under applicable securities laws against us or any of our agents, including the underwriters, with respect to the full amount of notes purchased by such holder. However, if such notes are issued with OID, holders of such notes may not be able to recover the portion of their principal amount treated as unaccrued OID in the event of an acceleration of the notes or a bankruptcy of the issuer prior to the maturity of the notes. See “Risk Factors—Holders of subsequently issued notes may not be able to collect their full stated principal amount prior to maturity.” 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 notes as a result of such subsequent issuance.

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Description of Notes

The following is a description of the material terms of the Indenture under which our Notes will be issued, a copy of the form of which will be filed with the Commission as an exhibit to the registration statement of which this prospectus is a part. This description does not restate the Indenture in its entirety. We urge you to read the Indenture and the collateral documents. Capitalized terms used in this “Description of Notes” section and not otherwise defined have the meanings set forth in the section “—Certain Definitions” or in the Indenture.

General

The Notes are to be issued under an Indenture, to be dated as of , 2004 (the “Indenture”), among American Seafoods Corporation (the “Issuer”), the Guarantors and Wells Fargo Bank Minnesota, National Association, as Trustee (the “Trustee”). The Trustee will act as the initial paying agent and collateral agent.

The following summary of certain provisions of the Indenture is subject to, and is qualified in its entirety by reference to, all the provisions of the Indenture, including the definitions of certain terms therein and those terms made a part thereof by the Trust Indenture Act of 1939, as amended.

The Notes to be sold in this offering will be issued in an aggregate principal amount of $237.2 million (which includes $9.5 million aggregate principal amount of notes issued to certain of our existing direct and indirect equity investors upon consummation of this offering in connection with our internal restructuring and realignment transactions), of which $204.1 million will be represented by IDSs offered hereby and $33.1 million will be sold separately (not represented by IDSs). The Indenture will provide for the issuance of an unlimited aggregate principal amount of additional notes having substantially identical terms and conditions to the notes offered hereby (the “Additional Notes”) subject to compliance with the restrictive covenants contained in the Indenture. No Additional Notes will be issued if an Event of Default under the Indenture governing the Notes has occurred and is continuing. Any Additional Notes will be part of the same issue as the Notes offered hereby and 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 used up Acceleration Forbearance Periods, Payment Blockage Periods and interest deferral periods to the same extent as the Notes issued in this offering. See “—Additional Notes.”

Contemporaneously with the application of proceeds from this offering, the Issuer will lend $253.7 million to Holdings pursuant to intercompany notes and, substantially contemporaneously with issuing intercompany notes to the Issuer, Holdings will issue identical notes to ASLP in redemption of a portion of the Holdings’ equity interests held by ASLP. The aggregate principal amount of Holdings notes outstanding immediately after this offering will be $331.2 million. Such Holdings notes issued to the Issuer and ASLP, which are referred to herein as the “Intercompany Notes,” will be subordinated unsecured obligations of Holdings and will contain the same payment and interest terms and substantially similar other provisions as the Notes, will be guaranteed by ASG and its subsidiaries on the same basis as the Notes, and will contain cross-default and cross-acceleration provisions such that an Event of Default under the Notes will trigger an event of default under the Intercompany Notes, and acceleration of the Notes will trigger automatic acceleration of the Intercompany Notes, subject to acceleration forbearance provisions described below. See “Description of Certain Indebtedness—Holdings Intercompany Notes.” Furthermore, Holdings is required to issue additional notes to the Issuer upon issuances of Additional Notes and to ASLP upon exercise of certain management options to acquire ASLP units.

The Notes will be issued only in fully registered form, without coupons.

The Notes will be senior secured obligations of the Issuer. The Notes will be guaranteed on an unsecured subordinated basis by Holdings, ASG and various of its subsidiaries. The Notes will be secured by a pledge by the Issuer of all of the Intercompany Notes and related guarantees held by the Issuer. These arrangements are described under “Guarantees and Pledge.”

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The Notes will mature on June 15, 2019; provided that if the Total Leverage Ratio of Holdings for the year ending December 31, 2013 is greater than to 1.00, then the Notes shall automatically mature on December 31, 2014.

The Notes will bear interest at a rate per annum of % from , or from the most recent date to which interest has been paid or provided for, payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, to Holders of record at the close of business on the 5th day of such month or the immediately preceding business day, commencing , 2004.

If any interest payment date falls on a day that is not a business day, the interest payment shall be postponed to the next day that is a business day, and no interest on such payment shall accrue for the period from and after such interest payment date.

Interest Deferral

Prior to , 2009, the Issuer will be permitted to defer interest payments on the Notes if and for so long as the Interest Coverage Ratio of Holdings for the most recently ended twelve-month period ending on the last day of any fiscal quarter for which internal financial statements are available, is less than the applicable Interest Deferral Threshold, unless a default in payment of interest, principal or premium, if any, on the Notes has occurred and is continuing, or any other 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 (any such period, a “Mandatory Interest Deferral Period”). The interest payments will be deferred under this provision from the time the Issuer provides the Trustee with a calculation demonstrating that such deferral is permitted (provided, however, that such calculation shall be provided to the Trustee not later than 60 days after the end of the applicable quarter) until such time as the Issuer provides the Trustee with a calculation demonstrating that such deferral is no longer permitted (provided, however, that such calculation shall be provided to the Trustee not later than 60 days after the end of the applicable quarter) or, if earlier, until such time as a default in payment of interest, principal or premium, if any, on the Notes has occurred or any other 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. Interest payments on the Notes will not be deferred under this provision for more than 8 quarters in the aggregate or beyond , 2009.

In addition, after , 2009, the Issuer may at its election defer interest on the Notes on not more than two occasions for not more than 3 quarters per occasion (each, an “Optional Interest Deferral Period”) by delivering to the Trustee a copy of a resolution of the Issuer’s Board of Directors certified by an Officers’ Certificate of the Issuer to the effect that, based upon a good-faith determination of the Issuer’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 on the Designated Senior Indebtedness; provided no such deferral may be commenced, and any ongoing deferral shall cease, if a default in payment of interest, principal or premium, if any, on the Notes has occurred and is continuing, or any other 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. Interest payments may not be deferred under this provision for more than 3 quarters per occasion. After the end of the first Optional Interest Deferral Period, the Issuer may not defer interest on the Notes unless and until all deferred interest has been paid in full.

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Deferred interest on the Notes will bear interest at a rate per annum of % until paid in full. Following the end of any interest deferral period, the Issuer will be obligated to resume quarterly payments of interest on the Notes, including interest on deferred interest. All interest deferred prior to , 2009, must be repaid on , 2009. All interest deferred after , 2009 must be repaid on or before maturity, provided that we must pay all deferred interest and accrued interest thereon in full prior to deferring interest for the second occasion. The Issuer may prepay all or part of the deferred interest, at any time other than during an interest deferral period.

During any interest deferral period, or so long as any deferred interest remains unpaid, and under other circumstances described below, the Issuer will not be permitted to pay any dividends or make any distribution to holders of the Issuer’s common stock, or make certain other Restricted Payments. See “—Certain Covenants—Limitation on Restricted Payments—Dividend Suspension.” The Senior Credit Documents contain limitations on ASG’s and Holdings’ ability to make distributions to the Issuer to enable it to prepay deferred interest on the Notes. See “Description of Certain Indebtedness—New Credit Facilities.”

The Intercompany Notes will contain interest deferral provisions identical to those in the Notes and interest on the Intercompany Notes will be deferred at the same times and for the same periods as interest on the Notes.

Additional Notes

The Indenture will permit issuances of Additional Notes (a) upon exercise of exchange warrants by holders of ASLP units to acquire Notes and Common Stock of the Issuer, and upon exchange of Class A common stock for IDSs subject to compliance with clause (u) of the second paragraph of the covenant described under “—Certain Covenants—Limitations on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;” (b) upon exercise of warrants held by any CDQ Partner to acquire IDSs or Additional Notes and Capital Stock of the Issuer, subject to compliance with clause (w) of the second paragraph of the covenant described under “—Certain Covenants—Limitation of Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock;” (c) so long as the proceeds of such issuance are utilized to purchase from Holdings Intercompany Notes and equity units in Holdings, and Holdings uses such proceeds to redeem from ASLP, or from former ASLP partners following dissolution of ASLP, the Intercompany Notes and equity units in Holdings, in each case, in the same principal amounts and proportions as the Notes and Common Stock represented by the IDSs, provided such issuance complies with clause (x) of the second paragraph of the covenant described under “—Certain Covenants—Limitation of Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock,” and (d) for other purposes, provided that (1) no Event of Default has occurred and is continuing at the time of such issuance, (2) the Incurrence of Indebtedness evidenced by such Additional Notes is permitted under the covenant described under “—Certain Covenants—Limitations on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock,” (3) if such Additional Notes are issued in connection with issuances of IDSs or Common Stock, the ratio of the aggregate principal amount of such Additional Notes over the number of such additional shares of Common Stock shall be equal to the equivalent ratio with respect to the Notes and Common Stock represented by the IDSs outstanding immediately after the Issue Date, (4) the Issuer uses any cash or property received from the issuance of such Additional Notes to acquire additional Intercompany Notes in an aggregate principal amount equal to the aggregate principal amount of such Additional Notes, and (5) such additional Intercompany Notes are made subject to the Pledge. Any Additional Notes will be part of the same issue as the Notes offered hereby and 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 used up Acceleration Forbearance Periods, Payment Blockage Periods and interest deferral periods to the same extent as the Notes issued in this offering.

Each Holder of the Notes or the IDSs (as the case may be) agrees that, in the event there is a subsequent issuance of Additional Notes with a different CUSIP number, a portion of such Holder’s Notes (whether held directly in book-entry form or held as part of IDSs) will be automatically exchanged, without any action by 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 automatic exchange each Holder of the Notes or the IDSs (as the case may be) owns

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an indivisible unit composed of the Notes and Additional Notes of each issuance in the same proportion as each other Holder, and the records will be revised to reflect each such automatic exchange without any further action of such Holder. The aggregate stated principal amount of the Notes owned by each Holder will not change as a result of such automatic exchange. Any issuance of Additional Notes by the Issuer may affect the tax treatment of the Holders of the Notes and the IDSs. See “Material U.S. Federal Income Tax Considerations—Exchange Rights and Additional Issuances.”

The Issuer 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 Note Guarantees, the Issuer and the Guarantors are solvent. We are not obligated to issue new notes combinable into IDSs pursuant to the arrangements described above if our board of directors determines that it would jeopardize the federal income tax status of the notes already outstanding.

In addition, if such Notes are issued with original issue discount, Holders of such Notes may not be able to recover the portion of their principal amount treated as unaccrued original issue discount in the event of an acceleration of the Notes or a bankruptcy of the Issuer prior to the maturity of the Notes. See “Risk Factors—Holders of subsequently issued notes may not be able to collect their full stated principal amount prior to maturity.”

Optional Redemption

The Issuer may not redeem the Notes at its option prior to , 2011.

On or after June 15, 2011 and before June 15, 2016, the Issuer may redeem the Notes, at its option, at any time in whole and from time to time in part, for cash, at a “make-whole” redemption price equal to the greater of (1) the aggregate principal amount of the Notes being redeemed or (2) the sum of the present values of the remaining scheduled payments to the scheduled maturity of the Notes (assuming no subsequent extension thereof) of the principal and interest (other than accrued interest) on the Notes being redeemed, discounted to the redemption date on a quarterly basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 50 basis points, plus accrued and unpaid interest to but not including the redemption date.

After June 15, 2016, we may redeem the notes upon not less than 30 or more than 60 days notice by mail to the holders of notes at a redemption price of 100% of the principal amount to be redeemed.

Notice of any redemption will be mailed at least 30 days but not more than 60 days before the date of redemption to each holder of the Notes to be redeemed. Unless we default in payment of the redemption price, on and after the date of redemption, interest will cease to accrue on such Notes or the portions called for redemption so long as the Issuer has deposited with the Trustee funds (in U.S. Dollars) sufficient to pay the principal of, plus accrued and unpaid interest (if any) on, the Notes to be redeemed.

Any exercise by the Issuer of its option to redeem the Notes, in whole or in part, will result in an automatic separation of the IDSs upon the redemption date. See “Description of IDSs—Automatic Separation.”

Selection

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

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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 Redemption Date, interest will cease to accrue on Notes or portions thereof called for redemption, so long as the Issuer has deposited with the depositary funds sufficient to pay the principal of, plus accrued and unpaid interest on, the Notes to be redeemed.

Ranking

On the Issue Date, the Notes will be the only indebtedness of the Issuer. The Notes will rank pari passu in right of payment with any future Senior Indebtedness and trade payables of the Issuer, except for the impact of the contractual subordination provided in the Indenture which may have the effect of causing the Notes to receive less, ratably, than other creditors that are not subject to contractual subordination, and except for statutory priorities provided under the U.S. federal bankruptcy code or other applicable bankruptcy, insolvency and other laws dealing with creditors rights generally, and will rank senior in right of payment to all existing and future Subordinated Obligations for the Issuer. The Intercompany Notes and the Holdings Note Guarantee will be subordinated unsecured obligations of Holdings and will rank junior in right of payment to the guarantee and the pledge under the Senior Credit Documents. On the Issue Date, the Intercompany Notes, the Note Guarantee, and the guarantee of the obligations of ASG under the Senior Credit Documents and the pledge of ASG’s equity interests thereunder will be the only Indebtedness of Holdings.

The Indebtedness evidenced by each Guarantee will be unsecured subordinated indebtedness of the applicable Guarantor, and will be subordinated in right of payment, as set forth in the Indenture, to all existing and future Guarantor Senior Indebtedness of the applicable Guarantor and trade payables, except for the impact of the contractual subordination provided in the Indenture which may have the effect of causing the Notes to receive less, ratably, than other creditors that are not subject to contractual subordination, and except for statutory priorities provided under the U.S. federal bankruptcy code or other applicable bankruptcy, insolvency and other laws dealing with creditors rights generally, including Indebtedness under the Senior Credit Documents and Hedging Obligations with respect thereto, will rank pari passu in right of payment with all existing and future Pari Passu Indebtedness of the applicable Guarantor, and will be senior in right of payment to all existing and future indebtedness that is by its terms expressly subordinated to the Guarantee of such Guarantor. See “—Guarantees and Pledge — Subordination of the Guarantees.” The Issuer has agreed in the Indenture that it will not permit any Guarantor to incur any Indebtedness that is expressly subordinated in right of payment to the Guarantor Senior Indebtedness of the applicable Guarantor, unless such Indebtedness ranks pari passu with, or is subordinated in right of payment to, such Guarantor’s Guarantee. Because the Issuer is a holding company and conducts no independent operations, the Notes will be structurally subordinated to all obligations of the Issuer’s subsidiaries that do not guarantee the Notes, such as foreign subsidiaries. As of the Closing Date, Holdings and all domestic subsidiaries of Holdings will guarantee the Notes. The note guarantees issued by ASG and its subsidiaries will effectively rank senior to outstanding indebtedness, if any, in respect of the 10¹/8% senior subordinated notes due 2010 issued by ASG and the corporate co-issuer, and related guarantees of such notes by ASG’s subsidiaries. As of April 30, 2004, all of our existing senior subordinated notes had been validly and irrevocably tendered. The tender offer will expire on May 3, 2004, unless we extend it. 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 Guarantor Senior Indebtedness or subject to the restrictions described herein.

As of December 31, 2003, after giving pro forma effect to the transactions contemplated by this prospectus, including the tender offer and consent solicitation, the new credit facilities, this offering and, in each case, the use of the proceeds therefrom, as if such transactions had occurred on December 31, 2003, Holdings and its subsidiaries would have had approximately $601.1 million of Indebtedness and trade payables outstanding, including $314.7 million of Indebtedness associated with the Guarantees. Approximately $245.0 million of this amount would constitute Guarantor Senior Indebtedness, which would rank senior to the Guarantees, and approximately $41.4 million would rank pari passu with the Guarantees. Although the Indenture will contain limitations on the amount of additional Indebtedness and additional Guarantor Senior Indebtedness which the

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Issuer, Holdings and the Restricted Subsidiaries may Incur, these limitations are subject to important exceptions and qualifications, and the amount of such additional Indebtedness, including Guarantor Senior Indebtedness, could be substantial. See “—Limitations on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” below.

We will rely entirely on payments of interest and principal on the Intercompany Notes by Holdings and on dividends, distributions and other payments from Holdings, ASG and its subsidiaries to make payments on the Notes. The Senior Credit Documents contain limitations on the ability of ASG and its subsidiaries to make distributions to Holdings to enable it to make payments on the Intercompany Notes and on other dividends and distributions to Holdings. See “Description of Certain Indebtedness—New Credit Facilities.”

Guarantees and Pledge

Guarantees

Holdings and all of Holdings’ direct and indirect existing Wholly Owned Subsidiaries organized under the laws of any state of the United States of America on the Issue Date and certain future Subsidiaries of the Issuer (the “Guarantors”), as primary obligors and not merely as sureties, will irrevocably, jointly and severally, fully and unconditionally guarantee, subject to solvency restrictions, on an unsecured subordinated basis the performance and punctual payment when due, whether at stated maturity, by acceleration or otherwise, of all obligations of the Issuer under the Notes, whether for payment of principal of, premium, if any, or interest on the Notes, expenses, indemnification or otherwise (all such guarantee obligations by such Guarantors are referred to as the “Note Guarantees”). In addition, all Guarantors other than Holdings (the “Intercompany Guarantors”), as primary obligors and not merely as sureties, will irrevocably, jointly and severally, fully and unconditionally guarantee, subject to solvency restrictions, on an unsecured subordinated basis the performance and punctual payment when due, whether at stated maturity, by acceleration or otherwise, of all obligations of Holdings under the Intercompany Notes, whether for payment of principal of, premium, if any, or interest on the Intercompany Notes, expenses, indemnification or otherwise (all such guarantee obligations by such Guarantors are referred to as the “Intercompany Guarantees,” and, together with the Note Guarantees, the “Guarantees”). Pursuant to the note purchase agreement governing the Intercompany Notes, the Issuer and ASLP will agree to allocate all amounts collected from Holdings under the Intercompany Notes or from the Intercompany Guarantors under the Intercompany Guarantees in respect of principal of the Intercompany Notes between the Issuer and ASLP such that all amounts received by (i) the Issuer, together with all amounts collected by the Trustee or the Holders of the Notes under the Note Guarantees, and (ii) ASLP, correspond to the pro rata percentage of outstanding Intercompany Notes held by the Issuer and ASLP, respectively. See “Description of Certain Indebtedness—Holdings Intercompany Notes.”

Each Guarantee will be limited 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 Senior Credit Facilities) without rendering the guarantor insolvent or 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 date of issuance of the Notes, the Issuer will cause each Restricted Subsidiary organized under the laws of the United States of America or any state or territory thereof that guarantees the Senior Credit Facilities to execute and deliver to the Trustee, a Note Guarantee pursuant to which such Restricted Subsidiary will guarantee payment of the Notes. See “—Certain Covenants—Future Guarantors.” Pursuant to the terms of the Intercompany Notes, the Intercompany Guarantors will be required to issue Intercompany Guarantees to the Issuer and ASLP simultaneously with issuing the Note Guarantees.

Each Guarantee is a continuing guarantee and shall (i) remain in full force and effect until payment in full of all the Notes or the Intercompany Notes, as applicable, (ii) be binding upon each such Guarantor and its successors,

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and (iii) inure to the benefit of and be enforceable by the Holders, their successors, transferees and assigns, or, in the case of any Intercompany Guarantee, by the Issuer or the Trustee in accordance with the Pledge (as described below).

The Note Guarantee of a Guarantor will be released:

(1) in connection with any sale or disposition (by merger or otherwise) of such Guarantor or a Person which is the parent company of such Guarantor to a Person that is not (either before or after giving effect to such transaction) a Subsidiary of the Issuer in compliance with the Indenture; or

(2) if the Issuer properly designates any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary; or

(3) upon the merger or consolidation of a Guarantor with and into the Issuer or another Guarantor that is the surviving Person of such merger or consolidation; or

(4) upon legal defeasance of the Issuer’s and all Guarantors’ obligations under the Notes and the Note Guarantees or satisfaction and discharge of the Indenture, in each case, in accordance with the provisions of the Indenture. The Intercompany Notes will contain substantially similar provisions with respect to release of Intercompany Guarantees.

Pledge

Pursuant to the Indenture the Issuer will grant, assign and pledge (the “Pledge”) to the Trustee, for its benefit and for the benefit of the Holders of the Notes, a security interest in the Intercompany Notes held by the Issuer and related Intercompany Guarantees and all proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any of the foregoing (collectively, the “Collateral”), other than in each case such Collateral that may be released from the Pledge in accordance with the Indenture. The security interest in the Collateral shall be a first priority security interest. So long as the Notes are secured by the Pledge, the Issuer will covenant not to consent to certain amendments or waivers in respect of the Intercompany Notes without consent of the holders of a majority of the aggregate principal amount of the outstanding Notes. See “—Certain Covenants—Amendments and waivers with respect to the Intercompany Notes.”

Pursuant to the Indenture, all payments on and all other proceeds from the Intercompany Notes or the Intercompany Guarantees will be deposited into a collateral account held by the Trustee and used to make scheduled payments on the Notes as and when they become due. To the extent that any amounts remain in the collateral account after the Trustee makes a scheduled payment on the Notes, the Trustee will return such amounts to the Issuer.

The Indenture will require that additional Collateral be pledged in connection with the issuance of any Additional Notes and that such additional Collateral be of the same type as the existing Collateral and that such additional Collateral bears the same proportionate relationship to the principal amount of the Additional Notes as the then existing Collateral bears to the principal amount of the Notes then outstanding.

In connection with or after a redemption of Notes in part, or a purchase of Notes in part pursuant to the provisions described under “Change of Control” and the offer to purchase provisions under “Asset Sales,” the Indenture permits the Issuer to obtain a pro rata release of the Collateral, based on the percentage of the Notes redeemed or purchased. The Issuer will covenant not to allow any redemption of the Intercompany Notes by Holdings if the aggregate principal amount of Intercompany Notes held by it after such redemption would be less than the aggregate principal amount of the Notes outstanding. See “—Certain Covenants—Redemption of the Intercompany Notes.”

If an Event of Default occurs under the Indenture, the Trustee, on behalf of the Holders of the Notes, in addition to any rights or remedies available to it under the Indenture, may take such action as it deems advisable to protect

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and enforce its rights in the Collateral, including the institution of foreclosure proceedings. The proceeds received by the Trustee from any foreclosure will be applied by the Trustee first to pay the expenses of such foreclosure and fees and other amounts then payable to the Trustee under the Indenture and, thereafter, to make payments on the Notes.

Subordination of the Guarantees

The Indebtedness evidenced by each Guarantee will be subordinated in right of payment to the prior payment in full of all existing and future Guarantor Senior Indebtedness of the applicable Guarantor, will rank pari passu with any Pari Passu Indebtedness of such Guarantor, and will be senior in right of payment to all Subordinated Obligations. Under the subordination provisions of the Indenture with respect to the Note Guarantees and under the Intercompany Guarantees, no Guarantor may make any payment of principal of, or premium (if any) or interest on, the Guarantees or make any deposit of funds pursuant to the provisions described below under “—Defeasance” (collectively, “pay the Guarantees”) if (i) a default in the payment of the principal of, premium, if any, or interest on any Guarantor Senior Indebtedness shall have occurred and be continuing or any other amount owing in respect of any Guarantor Senior Indebtedness is not paid in full when due, or (ii) any other default on such Guarantor Senior Indebtedness occurs and the maturity of such Guarantor Senior Indebtedness is accelerated 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 Guarantor Senior Indebtedness has been paid in full. However, a Guarantor may pay the Guarantee without regard to the foregoing if the Issuer and the Trustee receive a written notice approving such payment from a Representative of Designated Senior Indebtedness with respect to which the default described in clause (i) or (ii) above 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, no Guarantor may pay the Guarantees for a period (a “Payment Blockage Period”) commencing upon the receipt by the Issuer (with a copy to the Trustee) of written notice (a “Blockage Notice”) of such default from the Representative of Designated Senior Indebtedness specifying an election to effect a Payment Blockage Period and ending on the earliest to occur of the following events: (a) 179 days shall have elapsed since such receipt of such Blockage Notice, provided, however, that in the event that there has been any Acceleration Forbearance Period in respect of the Notes in the immediately preceding 360-day period, such 179-day period will be automatically reduced by the cumulative duration of all Acceleration Forbearance Periods that occurred during such immediately preceding 360-day period, (b) such Payment Blockage Period is terminated by written notice to the Issuer (with a copy to the Trustee) from the Person or Persons who gave such Blockage Notice, (c) the repayment in full of Designated Senior Indebtedness, or (d) the 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 second sentence of this paragraph and in the succeeding paragraphs), unless the holders of such Designated Senior Indebtedness or the Representative of such holders have accelerated the maturity of such Designated Senior Indebtedness, the Guarantors may pay the Guarantees, after the end of such Payment Blockage Period. In no event may the total number of days during which any Payment Blockage Period is in effect extend beyond 179 days from the date of receipt by the Trustee of the relevant Blockage Notice, and in no event may the total number of days during which any Payment Blockage Period or any Acceleration Forbearance Period is in effect exceed 179 days 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.

During any period in which payments to you are prohibited or blocked in the manner described above, you may exercise any and all remedies under the Notes and Note Guarantees; however, any amounts received by you with respect to the Guarantees, including any amount you may receive in any legal action to enforce the Guarantees,

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would be required to be turned over to the holders of Guarantor Senior Indebtedness. Any payments turned over to the holders of Guarantor Senior Indebtedness will not, as between you and a Guarantor, satisfy such Guarantor’s obligations on its Guarantee.

“Designated Senior Indebtedness,” with respect to any Guarantor, means:

(1) any Indebtedness of such Guarantor under the Senior Credit Documents; and

(2) after payment in full of all obligations under either the Credit Agreement or the Note Purchase Agreement, any other Guarantor Senior Indebtedness permitted by the Indenture, the principal amount of which is $25 million or more and that has been designated by the Issuer or such Guarantor as “Designated Senior Indebtedness.”

After the occurrence of an Event of Default, the Issuer or the Trustee shall promptly notify the holders of the Designated Senior Indebtedness (or their Representative) of such occurrence. If any Designated Senior Indebtedness is outstanding, no Guarantor may pay the Guarantees until five Business Days after such holders or the Representative of the Designated Senior Indebtedness receives notice of such occurrence and, thereafter, may pay the Guarantees only if the provisions described above otherwise permit payment at that time.

Upon any payment or distribution of the assets of any Guarantor upon a total or partial liquidation or dissolution of a Guarantor or reorganization of or similar proceeding relating to the Guarantor or its property, the holders of Guarantor Senior Indebtedness will be entitled to receive payment in full of the Guarantor Senior Indebtedness before the Holders of Notes or Intercompany Notes are entitled to receive any payment under any Guarantee, and until the Guarantor Senior Indebtedness is paid in full, any payment or distribution on any Guarantee to which the Holders of Notes or Intercompany Notes would be entitled but for the subordination provisions of the Guarantees will be made to holders of the Guarantor Senior Indebtedness as their interests may appear (except that (i) Holders of Notes or Intercompany Notes may receive and retain Permitted Junior Securities, and (ii) Holders of Notes may receive and retain 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 in the Guarantees). If a distribution is made to the Holders or the Trustee for the benefit of the Holders, that due to the subordination provisions of the Guarantees should not have been made to them, the Holders or the Trustee, as applicable, will be required to hold it in trust for the holders of Guarantor Senior Indebtedness and pay it over to them as their interests may appear.

By reason of such subordination provisions contained in the Guarantees, in the event of insolvency, creditors of Holdings, ASG and the other Guarantors who are holders of Guarantor Senior Indebtedness may recover more, ratably, than the Holders of Notes.

Acceleration Forbearance Periods

So long as the Notes are guaranteed by at least one of the Guarantors, until the earlier of (a) the date on which no Designated Senior Indebtedness (including any guarantee of other Designated Senior Indebtedness) of any Guarantor shall be outstanding and (b) , 2009, if an Event of Default (other than an Event of Default described in clause (viii) or (ix) under “—Defaults”) has occurred and is continuing, without in any way limiting the right of any Holder to exercise any other remedy such Holder may have (including the right to bring suit against the Issuer or any Guarantor for payment of any and all amounts of principal, premium and interest due and payable), the principal of all the Notes may not be declared to be due and payable until the earliest of the following events: (a) the Acceleration Forbearance Period has expired, (b) the Designated Senior Indebtedness of any Guarantor shall be due and payable in full, or shall have been declared to be due in full, or there shall have been a demand for payment in full thereof, or any enforcement or collection action shall have been commenced with respect thereto, (c) holders of any Specified Pari Passu and Subordinated Indebtedness of the Issuer or one or more of the Guarantors exceeding $10.0 million in the aggregate principal amount, shall have commenced any enforcement or collection action with respect to such Indebtedness and (d) an Event of Default described in

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clause (viii) or (ix) under “—Defaults” shall have occurred. “Acceleration Forbearance Period” means the period commencing on the date when the Trustee or the Holders of at least 25% in principal amount of the Notes outstanding provide the Issuer with a notice of acceleration and expiring on the earliest of the date on which (a) 90 days shall have elapsed following the commencement of such Acceleration Forbearance Period, (b) the Designated Senior Indebtedness of any Guarantor shall be due and payable in full, or shall have been declared to be due in full, or there shall have been a demand for payment in full thereof, or any enforcement or collection action shall have been commenced with respect thereto, (c) holders of any Specified Pari Passu and Subordinated Indebtedness of the Issuer or one or more of the Guarantors exceeding $10.0 million in the aggregate principal amount, shall have commenced any enforcement or collection action with respect to such Indebtedness and (d) an Event of Default described in clause (viii) or (ix) under “—Defaults” shall have occurred; provided, however, that in the event that there has been any prior Acceleration Forbearance Period in the immediately preceding twelve-month period, the duration of the Acceleration Forbearance Period will be automatically reduced by the cumulative duration of all prior Acceleration Forbearance Periods that occurred during the preceding twelve-month period (it being understood that the Acceleration Forbearance Period may terminate immediately after commencing pursuant to this proviso). For the avoidance of doubt, the provisions set forth above shall not prevent the Holders or the Trustee from receiving payments on the Notes when due or exercising any other remedies under the Indenture governing the Notes while an Acceleration Forbearance Period is in effect. The Issuer 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 acting on behalf of the Holders of Notes in enforcing any rights under the Notes. The Intercompany Notes will be subject to acceleration forbearance provisions substantially similar to those described above.

Change of Control

Unless the Issuer has exercised its right to redeem all of the Notes as described under “—Optional Redemption”, upon the occurrence of any of the following events (each, a “Change of Control”), each Holder will have the right to require the Issuer to repurchase all or any part of 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 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, transfer or other disposition, in one or a series of related transactions, of all or substantially all assets of the Issuer and its Restricted Subsidiaries, taken as a whole, to any person or “group” (as such term is used in Section 13(d)(3) of the Exchange Act), (ii) the adoption of a plan relating to the liquidation or dissolution of the Issuer, (iii) the direct or indirect 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 the “beneficial ownership” (as such term is defined in Rules 13d-3 and 13d-5 under the Exchange Act) of a direct or indirect interest in more than 45% of ownership of the Issuer, the voting power of the voting stock of the Issuer, by way of purchase, merger or consolidation or otherwise, (iv) the merger or consolidation of the Issuer with or into another Person or the merger of another Person into the Issuer with the effect that immediately after such transaction the stockholders of the Issuer immediately prior to such transaction hold, directly or indirectly, less than 35% 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 or (v) the first day on which a majority of the members of the Board of Directors of the Issuer or of Holdings (if Holdings has a Board of Directors) are not Continuing Directors of such Person.

In the event that at the time of such Change of Control the terms of the Senior Credit Documents restrict or prohibit distributions from ASG and its subsidiaries to the Issuer to purchase the 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 Issuer shall (i) repay in full all amounts owing under the Senior Credit Documents or offer to repay in full all amounts owing under the Senior Credit Documents and repay each lender under the Senior Credit Documents who has accepted such offer or (ii) obtain the requisite consent under the agreements governing the Senior Credit Documents to permit distributions by ASG and Holdings to the Issuer which would in turn permit the repurchase of the Notes as provided for in the immediately following paragraph.

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Unless the Issuer has exercised its right to redeem all of the Notes as described under “— Optional Redemption,” within 30 days following any Change of Control (or, at the Issuer’s option, prior to such Change of Control but after public announcement thereof), the Issuer 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 or will occur and that such Holder has (or upon the occurrence will have) the right to require the Issuer 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 the date of purchase (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) the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); (4) the instructions determined by the Issuer, consistent with this covenant, that a Holder must follow in order to have its Notes purchased; and (5) if such Offer is made prior to such Change of Control, that payment is conditioned on the occurrence of such Change of Control. In order for a holder of IDSs to exercise its right to require the Issuer to repurchase the Notes, such holder must voluntarily separate its IDSs.

The Issuer 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 Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

The Issuer will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other applicable U.S. 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 Issuer 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 Change of Control purchase feature is a result of negotiations between the Issuer, the existing investors and the underwriters. The Issuer has no present intention to engage in a transaction involving a Change of Control, although it is possible that we would decide to do so in the future. Subject to the limitations discussed below, we could, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of Control under the Indenture, but that could increase the amount of indebtedness outstanding at such time or otherwise affect our capital structure or credit ratings.

The occurrence of events which would constitute a Change of Control would constitute a default under the Senior Credit Documents. In addition, the terms of the Senior Credit Documents will prohibit ASG and its subsidiaries from making distributions to Holdings if the interest coverage ratio of Holdings is lower than the thresholds described under “Description of Certain Indebtedness—New Credit Facilities,” or if Holdings has any deferred and unpaid interest outstanding on the Intercompany Notes, other than certain permitted distributions, such as to pay interest on the Intercompany Notes (which would provide the Issuer with cash to pay interest on the Notes) and to pay taxes. Furthermore, the Senior Credit Documents will prohibit all distributions from ASG to Holdings (other than distributions to pay taxes and administrative expenses) if a default or an event of default under the Senior Credit Documents has occurred. Any future credit agreements and other agreements relating to the senior indebtedness of our subsidiaries may contain similar restrictions and provisions or may require such indebtedness to be repurchased upon a Change of Control. In the event that a Change of Control occurs at a time when the Issuer’s Restricted Subsidiaries are prohibited from distributing funds to the Issuer to enable it to purchase the Notes, we would seek consent of the lenders under the Guarantor Senior Indebtedness to the purchase of the Notes or would attempt to refinance the borrowings that contain such prohibition, as described above. If we do not obtain such consent or refinance such borrowings, Holdings will be unable to repurchase the Intercompany Notes and, consequently, the Issuer will be unable to purchase the Notes. That would constitute an Event of Default under the Indenture, which would, in turn, constitute a default under the Guarantor Senior Indebtedness. In such circumstances, because of the structural subordination of the Notes to the Guarantor Senior Indebtedness and because the Guarantees are also subordinated in the Guarantor Senior Indebtedness, there can be no assurance that ASG and its subsidiaries will have sufficient funds to repay the Guarantor Senior Indebtedness and make sufficient distributions to Holdings to enable it to repay the Intercompany Notes held by the Issuer and

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ASLP or make an equity distribution to the Issuer and ASLP, which would be the source of cash for the Issuer to enable it to repay the Notes. Moreover, the exercise by the Holders of their right to require the Issuer to repurchase the Notes could cause a default under our Guarantor Senior Indebtedness, even if the Change of Control itself does not, due to the financial effect of such repurchase on the Issuer and its subsidiaries. Finally, the Issuer’s ability to pay cash to the Holders upon a repurchase may be limited by the Issuer’s then existing financial resources. Sufficient funds may not be available when necessary to make any required repurchases.

The definition of Change of Control includes a phrase relating to the sale, lease or transfer of “all or substantially all” of our assets and the assets of our 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 us to repurchase such Notes as a result of a sale, lease or transfer of less than all of our assets and the assets of our Subsidiaries taken as a whole to another Person or group may be uncertain.

Certain Covenants

The Indenture will contain covenants including, among others, the following:

Limitations on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. The Indenture will provide that (i) the Issuer 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 Issuer will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuer and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness), which may, but shall not be required to, be Incurred under the Senior Credit Documents, or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock if (a) if the Issuer or any Restricted Subsidiary of the Issuer that is not a Subsidiary of Holdings Incurs Indebtedness or issues Disqualified Stock, it shall contemporaneously with such Incurrence or issuance lend all proceeds therefrom to Holdings on terms substantially identical to the terms of such Indebtedness Incurred or Disqualified Stock issued by the Issuer, and (b) the Total Leverage Ratio of Holdings would be less than or equal to 5.50 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 period.

The foregoing limitations will not apply to:

(a) the Incurrence by the Issuer’s Restricted Subsidiaries of Indebtedness under the Senior Credit Documents 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), and, without limiting the foregoing, any refinancing or refunding indebtedness in respect thereof, up to an aggregate principal amount of $330 million outstanding at any one time (not including any Hedging Obligations);

(b) the Incurrence by the Issuer and the Restricted Subsidiaries of Indebtedness represented by the Notes (excluding Additional Notes), the Pledge, the Note Guarantees, the Intercompany Notes and the Intercompany Guarantees, as applicable;

(d) Indebtedness (including Capitalized Lease Obligations) Incurred by the Issuer or any of its Restricted Subsidiaries, which may, but shall not be required to, be Incurred under the Senior Credit Documents, 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

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Incurred pursuant to this clause (d) and all Refinancing Indebtedness (as defined below) Incurred to refund, refinance or replace any Indebtedness Incurred pursuant to this clause (d), does not exceed the greater of 5% of Total Assets at the time of Incurrence or $20 million;

(e) Indebtedness Incurred by the Issuer 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 and personal injury 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;

(f) Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the disposition of any business, assets or a Subsidiary of the Issuer 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 Issuer to a Restricted Subsidiary of the Issuer; provided that any such Indebtedness (other than Indebtedness held by a Guarantor) 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 Issuer or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case to be an Incurrence of such Indebtedness;

(h) The shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary of the Issuer; 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 or Disqualified Stock (except to the Issuer or another Restricted Subsidiary of the Issuer) shall be deemed, in each case, to be an issuance of shares of Preferred Stock or Disqualified Stock;

(i) Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary of the Issuer; provided that any such Indebtedness of a Restricted Subsidiary to the Issuer is made pursuant to a written instrument; 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 Issuer or another Restricted Subsidiary of the Issuer) shall be deemed, in each case, to be an Incurrence of such Indebtedness;

(j) Hedging Obligations that are incurred in the ordinary course of business (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 Issuer or any Restricted Subsidiary in the ordinary course of business;

(l) Indebtedness or Disqualified Stock of the Issuer and any Restricted Subsidiary not otherwise permitted hereunder (which may, but shall not be required to, be Incurred under the Senior Credit Documents) 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 Incurred pursuant to this clause (1), does not exceed the greater of 5% of Total Assets or $20 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, when aggregated with the principal amount of all other

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Indebtedness of Foreign Subsidiaries then outstanding and Incurred pursuant to this clause (l), shall not exceed $10 million (or the equivalent thereof in any other currency) at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (l) shall cease to be deemed Incurred or outstanding for purposes of this clause (l) 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 Issuer could have Incurred such Indebtedness under the first paragraph of this covenant without reliance upon this clause (l));

(m) any guarantee by the Issuer or a Restricted Subsidiary of Indebtedness or other obligations of the Issuer or any of its Restricted Subsidiaries so long as such Indebtedness Incurred by the Issuer or such Restricted Subsidiary is otherwise permitted under the terms of the Indenture;

(n) the Incurrence by the Issuer 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), (c), (d), (l), (n) and (o) of this paragraph, 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, the Guarantees or the obligations of the Restricted Subsidiaries that are obligors under the Intercompany Notes or Intercompany Guarantees, as applicable, such Refinancing Indebtedness is pari passu with the Notes, the Note Guarantees, or the obligations of such Subsidiaries under the Intercompany Notes or Intercompany 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 the Issuer or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary;

and provided further that subclauses (i) and (ii) of this clause (n) will not apply to any refunding or refinancing of any Guarantor Senior Indebtedness;

(o) Indebtedness or Disqualified Stock of Persons that are acquired by the Issuer 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 or Disqualified 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, that any such Indebtedness and Disqualified Stock shall be included in the calculation of the Fixed Charge Coverage Ratio, or the Adjusted Fixed Charge Coverage Ratio, as applicable, of Holdings; and provided, finally, that after giving effect to such acquisition and the Incurrence of such Indebtedness either (i) Holdings would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Total Leverage Ratio test set forth in the first sentence of this covenant or (ii) the Total Leverage Ratio of Holdings would be greater than immediately prior to such acquisition;

(p) Contribution Indebtedness;

(q) the Incurrence of the Issuer’s Unrestricted Subsidiaries of Non-Recourse Debt; provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an Incurrence of Indebtedness by a Restricted Subsidiary;

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(r) Indebtedness arising by reason of a Lien created or permitted to exist in compliance with the covenant “—Liens,” other than Liens permitted pursuant to clause (v) or (x) of the definition of “Permitted Liens”;

(s) Indebtedness arising from honoring a check, draft or similar instrument drawn against insufficient funds, provided that such Indebtedness is extinguished within five Business Days of its incurrence;

(t) the Incurrence by the Issuer or its Restricted Subsidiaries of obligations in respect of performance, appeal and surety bonds, completion guarantees, insurance bonds and other similar bonds provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;

(u) Indebtedness to be issued in the form of Additional Notes upon the exercise of any warrants to acquire IDSs or Additional Notes and Common Stock of the Issuer in exchange for ASLP Units or upon exchange of Class A common stock for IDSs, and Indebtedness evidenced by Intercompany Notes, if any, and Intercompany Guarantees, if any, issued in connection with Incurrence of such Indebtedness, provided that (i) no Event of Default has occurred and is continuing at the time of such issuance; (ii) the ratio of the aggregate principal amount of such Additional Notes over the number of such additional shares of Common Stock shall not exceed the equivalent ratio with respect to the Notes and Common Stock outstanding immediately after the Issue Date; and (iii) either (A) the Issuer makes the ASLP Units, if any, received by it in connection with such issuance subject to the Pledge or (B) if the Issuer redeems any ASLP Units received by it in connection with such issuance in exchange for Equity Interests in Holdings and the Intercompany Notes, such Intercompany Notes are made subject to the Pledge;

(v) Indebtedness in the form of Intercompany Notes issued to ASLP upon exercise of management options to acquire units in ASLP in an aggregate principal amount not to exceed $17.4 million;

(w) Indebtedness to be issued in the form of Additional Notes upon the exercise of any warrants held by any CDQ Partner to acquire IDSs or Additional Notes and Common Stock of the Issuer, and Indebtedness evidenced by Intercompany Notes, if any, and Intercompany Guarantees, if any, issued in connection with Incurrence of such Indebtedness, provided that (i) no Event of Default has occurred and is continuing at the time of such issuance; (ii) the ratio of the aggregate principal amount of such Additional Notes over the number of such additional shares of Common Stock shall not exceed the equivalent ratio with respect to the Notes and the Common Stock outstanding immediately after the Issue Date; (iii) the Issuer uses any cash or property received from the issuance of such Additional Notes to acquire additional Intercompany Notes in an aggregate principal amount equal to the aggregate principal amount of such Additional Notes; and (iv) such additional Intercompany Notes are made subject to the Pledge;

(x) Indebtedness to be issued in the form of Additional Notes in connection with the issuance of IDSs or Common Stock, and Indebtedness evidenced by Intercompany Notes, and Intercompany Guarantees issued in connection therewith, provided that (A) no Event of Default has occurred and is continuing at the time of such issuance, (B) the ratio of the aggregate principal amount of such Additional Notes over the number of additional shares of Common Stock issued contemporaneously therewith shall not exceed the equivalent ratio with respect to the Notes and the Common Stock represented by the IDSs outstanding immediately after the Issue Date, (C) the Issuer utilizes the proceeds of such issuance to purchase from Holdings Intercompany Notes and equity units in Holdings, and Holdings uses such proceeds to redeem from ASLP, or from former ASLP partners following dissolution of ASLP, Intercompany Notes and equity units in Holdings, in each case in the same principal amounts and proportions as the Common Stock and Notes represented by the IDSs, and (D) the Intercompany Notes issued in connection with such issuance of Additional Notes are made subject to the Pledge;

(y) Indebtedness of the Issuer or any Restricted Subsidiary Incurred to finance the acquisition (including without limitation by way of a merger) of Capital Stock of any Person engaged in, or assets used or useful in, a Similar Business, provided that after giving effect to such acquisition and the Incurrence of such Indebtedness (1) no Default or Event of Default has occurred and is continuing; (2) the Interest Coverage Ratio of Holdings calculated for the most recently ended twelve-month period for which internal financial

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statements are available is higher than immediately prior to giving effect to such acquisition and the Incurrence of such Indebtedness, and (3) the Total Leverage Ratio of Holdings calculated as of the last day of the most recently ended fiscal quarter for which internal financial statements are available is lower than immediately prior to giving effect to such acquisition and the Incurrence of such Indebtedness; and

(z) Seller Subordinated Debt.

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 (z) above or is entitled to be Incurred pursuant to the first paragraph of this covenant, the Issuer 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 pursuant to only one of such clauses or pursuant to the first paragraph hereof. Any other obligation of the obligor on such Indebtedness (or any other person who could have incurred such Indebtedness under this covenant) arising under any Guarantee, Lien or letter of credit supporting such Indebtedness shall be disregarded to the extent that such Guarantee, Lien or letter of credit secures the principal amount of such Indebtedness. The amount of Indebtedness issued at a price less than the principal amount thereof shall be equal to the amount of liability in respect thereof determined in accordance with GAAP. 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 Layering. The Indenture will provide that no Guarantor will Incur any Indebtedness that is expressly subordinated in right of payment to any Guarantor Senior Indebtedness of such Guarantor, unless such Indebtedness so Incurred ranks pari passu in right of payment with, or is subordinated in right of payment to, such Guarantor’s Note Guarantee. Unsecured Indebtedness is not deemed to be subordinate or junior to secured Indebtedness merely because it is unsecured, and Indebtedness that is not guaranteed by a particular Person is not deemed to be subordinate or junior to Indebtedness that is so guaranteed merely because it is not so guaranteed.

Limitation on Restricted Payments. The Indenture will provide that the Issuer 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 Issuer’s or any of its Restricted Subsidiaries’ Equity Interests or any Subordinated Obligations, including any payment made in connection with any merger or consolidation involving the Issuer (other than (A) dividends or distributions by the Issuer payable solely in Equity Interests (other than Disqualified Stock) of the Issuer 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 Issuer 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 or any Subordinated Obligations of the Issuer or any Restricted Subsidiary held by Persons other than the Issuer or another Restricted Subsidiary, other than exchanges of ASLP Units for the Issuer’s Common Stock and Notes pursuant to and in accordance with the Exchange and Registration Rights Agreement;

(iii) voluntarily purchase, repurchase, redeem, defease or otherwise voluntarily acquire or retire for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Subordinated Obligations (other than a purchase, repurchase, redemption, defeasance or other acquisition or retirement for value (x) of any Existing Notes or (y) in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such acquisition or retirement); or

(iv) make any Restricted Investment (all such payments and other actions set forth in this clause (iv) and clauses (i), (ii) and (iii) above being collectively referred to as “Restricted Payments”),

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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 Issuer 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 Issuer and its Restricted Subsidiaries after the Issue Date (including Restricted Payments permitted by clauses (1), (4), (5), (6) and (7) 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) 50% of the Consolidated Net Income of the Issuer for the period (taken as one accounting period) from the fiscal quarter that first begins after the Issue Date to the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, in case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit), plus

(ii) 100% 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 Issuer since the Issue Date from the issue or sale of Equity Interests of the Issuer (excluding Refunding Capital Stock (as defined below), Designated Preferred Stock, Excluded Contributions and Disqualified Stock), excluding Equity Interests issued upon the exercise of warrants to acquire the Issuer’s Equity Interests in exchange for ASLP Units or conversion of Indebtedness or upon exercise of warrants or options (other than an issuance or sale to a Subsidiary of the Issuer or an employee stock ownership plan or trust established by the Issuer or any of its Subsidiaries), plus

(iii) 100% of the aggregate amount of contributions to the capital of the Issuer 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) 100% 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 Issuer or a Restricted Subsidiary) of Restricted Investments made by the Issuer and its Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from the Issuer and its Restricted Subsidiaries by any Person (other than the Issuer or any of its Subsidiaries) and from repayments of loans or advances which constituted Restricted Investments, (B) the sale (other than to the Issuer 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 Issuer or a Restricted Subsidiary, the Fair Market Value (as determined in good faith by the Board of Directors) of the Investment of the Issuer 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, not to exceed, in the case of any Unrestricted Subsidiary, the amount of Investments previously made by the Issuer or any Restricted Subsidiary in such Unrestricted Subsidiary, which amount was included in the calculation of the amount of Restricted Payments, plus

(vi) the amount of all Specified Cash Contributions.

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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 Issuer and (A) in the event of property with a Fair Market Value in excess of $2.5 million, shall be set forth in an Officers’ Certificate or (B) in the event of property with a Fair Market Value in excess of $5 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”) or Subordinated Indebtedness of the Issuer or Holdings, in exchange for, or out of the proceeds of the substantially concurrent sale of, Equity Interests of the Issuer or Holdings, as applicable, or contributions to the equity capital of the Issuer or Holdings, as applicable (other than any Disqualified Stock or any Equity Interests sold to a Subsidiary of the Issuer or Holdings, as applicable, or to an employee stock ownership plan or any trust established by the Issuer or Holdings, as applicable, or any of their respective 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 Issuer or Holdings or to an employee stock ownership plan or any trust established by the Issuer or Holdings or any of their respective Subsidiaries) of Refunding Capital Stock;

(3) the purchase of Equity Interests by the Issuer or a Restricted Subsidiary on behalf of a long term incentive plan or of other employee benefit plans in an amount not to exceed $2 million in any 12 month period;

(4) the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Issuer 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”;

(5) 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, Holdings would have had a Total Leverage Ratio of less than or equal to 5.50 to 1.00 and (B) the aggregate amount of dividends declared and paid pursuant to this clause (5) does not exceed the net cash proceeds received by the Issuer from the sale of Designated Preferred Stock issued after the Issue Date;

(6) Investments in Unrestricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (6) that are at that time outstanding, not to exceed $2.5 million (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(7) the declaration and payment of dividends on the shares of the Issuer’s Capital Stock for any fiscal quarter payable not less than 60 days after the end of such fiscal quarter, provided that the maximum amount of dividends that may be paid for any fiscal quarter may not exceed ¼ of the sum of (A) the total number of the Issuer’s shares of Capital Stock outstanding (calculated assuming all shares of class A common stock have been converted into IDSs and adjusted for stock splits and similar transactions) multiplied by the sum of (1) $0.875 plus (2) 90% of the Issuer’s Distributable Cash Per Share in excess of $0.875 for the twelve-month period ended on the last day of such fiscal quarter, plus (B) the Class A Common Stock Adjustment Amount, provided that the aggregate amount of dividends paid in any twelve-month period may not exceed ;

(8) Investments that are made with Excluded Contributions;

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(9) repurchases of Equity Interests deemed to occur upon exercise of stock options and warrants if such Equity Interests represent a portion of the exercise price of such options or warrants, or cash paid in lieu of fractional Equity Interests in an aggregate amount not to exceed $50,000;

(10) the repurchase of the Issuer’s securities to the extent that any such repurchase is (a) permitted by the Issuer’s Certificate of Incorporation, and (b) has been determined by the Board of Directors of the Issuer to be necessary or advisable in order to satisfy the Foreign Ownership Rules, provided that the aggregate amount paid by the Issuer for such securities shall not exceed $1 million;

(11) Permitted Payments;

(12) the Transactions;

(13) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer, Holdings, ASLP or any Restricted Subsidiary of the Issuer held by any member of the Issuer’s (or any of its Restricted Subsidiaries’) or ASLP’s management pursuant to any management equity subscription agreement or stock option agreement in effect as of the date of the Indenture or adopted by the Board of Directors of the Issuer after the Issue Date, or dividends or distributions to effect such transactions; provided that the aggregate price paid, dividended or distributed for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed $2 million in any twelve-month period;

(14) the redemption or repurchase by Holdings of its Capital Stock and Intercompany Notes held by ASLP with the proceeds of an issuance of IDSs or Additional Notes and the Issuer’s Common Stock completed substantially contemporaneously with such redemption or repurchase, in the same proportion as the ratio of such Common Stock to such Additional Notes, provided that such transactions may only be consummated in accordance with the Exchange and Registration Rights Agreement; and

(15) the conversion of Class A common stock into IDSs.

provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (1), (2), (3), (4), (5), (6), (7), (13), (14) and (15) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; provided further, however, that for purposes of determining the aggregate amount expended for Restricted Payments in accordance with clause (c) of the immediately preceding paragraph, only the amounts expended under clauses (1), (4), (5), (6) and (7) shall be included.

As of the Issue Date, all of the Issuer’s Domestic Subsidiaries will be Restricted Subsidiaries. The Issuer will not permit any Restricted Subsidiary to become a Unrestricted 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 Issuer 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 (whether pursuant to the first paragraph of this covenant or under clause (6) or (8)) and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

Dividend Suspension

Notwithstanding the foregoing: (a) the Issuer may not make Restricted Payments described in clauses (i), (ii) and (iii) of the first paragraph of this covenant, and the Restricted Payments described in clauses (3), (4), (5), (7) and (9) above shall be prohibited, if and so long as the Interest Coverage Ratio of Holdings for the most recently ended twelve-month period for which internal financial statements are available, is less than the applicable Dividend Suspension Threshold, and (b) the Issuer may not make Restricted Payments described in clauses (i), (ii) and (iii) of the first paragraph of this covenant, and the Restricted Payments described in clauses (1), (2), (4), (5) and (7) above shall be prohibited, during any interest deferral period or, after the end of any interest deferral period, so long as any deferred interest and accrued interest thereon has not been paid in full. In addition, the Senior Credit Documents contain limitations on Holdings’ ability to make distributions to the Issuer which are

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the sole means by which the Issuer can pay dividends and make other distributions to the holders of the Issuer’s Capital Stock, and interest (including deferred interest) on the Notes. See “Description of Certain Indebtedness—New Credit Facilities.”

Dividend and Other Payment Restrictions Affecting Subsidiaries. The Indenture will provide that the Issuer 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 Issuer 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 Issuer or any of its Restricted Subsidiaries;

(b) make loans or advances to the Issuer or any of its Restricted Subsidiaries; or

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 Senior Credit Documents;

(2) the Indenture, the Notes, the Note Guarantees, the Intercompany Notes and the Intercompany Guarantees;

(3) applicable law or any applicable rule, regulation or order;

(4) any agreement or other instrument (a) relating to Indebtedness of a Person acquired by the Issuer 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 (b) with respect to any asset acquired, in existence at the time of the acquisition and not incurred in connection with or in contemplation of such acquisition;

(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) 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 agreements and instruments, including without limitation 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) purchase money obligations for property acquired in the ordinary course of business that impose restrictions on the property so acquired of the nature described in clause (c) above; or restrictions on the transfer of property or assets required by any regulatory authority having jurisdiction over the Issuer or any Restricted Subsidiary or any of their businesses; or

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(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, not materially 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 Issuer will not, and will not permit any of its Restricted Subsidiaries to, cause or make an Asset Sale, unless (x) the Issuer, 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 Issuer) 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 received by the Issuer, or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents; provided that the amount of:

(a) a

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