As filed with the Securities and Exchange Commission on January 20, 1998.
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AlliedSignal Inc.
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(Exact name of registrant as specified in its charter)
Delaware 22-2640650
- ----------------------------- ---------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
101 Columbia Road
P.O. Box 4000
Morristown, New Jersey 07962-2497
- --------------------------------------- --------------
(Address of Principal Executive Offices) (Zip Code)
PETER M. KREINDLER, ESQ.
Senior Vice President, General Counsel and Secretary
AlliedSignal Inc.
101 Columbia Road
Morris Township, New Jersey 07962-2497
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(Name and address of agent for service)
(973) 455-2000
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(Telephone number, including area code, of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE
PUBLIC: FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS
REGISTRATION STATEMENT.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE
BEING OFFERED PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT
PLANS, PLEASE CHECK THE FOLLOWING BOX. [ ]
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE
TO BE OFFERED ON A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE
415 UNDER THE SECURITIES ACT OF 1933, OTHER THAN SECURITIES
OFFERED ONLY IN CONNECTION WITH DIVIDEND OR INTEREST REINVESTMENT
PLANS, CHECK THE FOLLOWING BOX. [X]
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
<PAGE>
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, PLEASE CHECK THE FOLLOWING BOX. [ ]
----------------
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of each class maximum maximum
of offering aggregate Amount of
securities Amount to be price offering registration
to be registered per price (1) fee
registered share (1)
Common Stock, 926,321 $35.90625 $33,260,713 $9,811.92
par value shares
$1.00 per share
(1) Estimated in accordance with Rule 457(h) of the Securities
Act of 1933 solely for the purpose of calculating the
registration fee based upon an assumed price of $35.90625, the
average of the high and low sales prices of the Common Stock of
AlliedSignal Inc. on the New York Stock Exchange Composite Tape
on January 12, 1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE
DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE
ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY
SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
Subject to completion, dated January 20, 1998.
PROSPECTUS
926,321 Shares
AlliedSignal Inc.
Common Stock, Par Value $1.00 Per Share
------------
This Prospectus relates to the offering for resale of
926,321 shares of Common Stock, par value $1.00 per share (the
"Common Stock"), of AlliedSignal Inc., a Delaware corporation
("AlliedSignal" or the "Company"). All of the Common Stock being
registered may be offered and sold from time to time by certain
selling stockholders of the Company. See "Selling Stockholders"
and "Manner of Offering". The Company will not receive any
proceeds from the sale of the Common Stock by the Selling
Stockholders.
The Company's Common Stock is traded on the New York Stock
Exchange under the symbol "ALD". On January 16, 1998, the last
reported sales price for the Common Stock was $36 5/16 per share.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------
No person has been authorized to give any information or
make any representation other than those contained in this
Prospectus (including material incorporated by reference therein)
and, if given or made, any such information or representation
must not be relied upon as having been authorized by the Company
or by any other person deemed to be an underwriter. Neither the
delivery of this Prospectus nor any sale made hereunder shall,
under any circumstances, create an implication that there has
been no change in the affairs of the Company since the date
hereof. This Prospectus does not constitute an offer or
solicitation by anyone in any jurisdiction in which such offer or
solicitation is not authorized or in which the person making such
offer or solicitation is not qualified to do so or to anyone to
whom it is unlawful to make such offer or solicitation.
------------
The date of this Prospectus is , 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934 (the "Exchange Act") and in
accordance therewith files reports and other information with the
Securities and Exchange Commission (the "Commission"). Reports,
proxy statements and other information filed by the Company with
the Commission can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, DC 20549 and at the following Regional
Offices of the Commission: 7 World Trade Center, New York, New
York 10048; and Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such material can be
obtained from the Public Reference Section of the Commission, 450
Fifth Street, N.W., Washington, DC 20549, at prescribed rates.
The Commission maintains an Internet web site at http://www.sec.gov/
that contains such reports, proxy statements and other information.
Such reports, proxy statements and other information of the Company
should also be available for inspection at the offices of the New York
Stock Exchange Inc., 20 Broad Street, New York, New York 10005; the
Chicago Stock Exchange, One Financial Place, 440 South LaSalle Street,
Chicago, Illinois, 60605; and the Pacific Stock Exchange, 301 Pine Street,
San Francisco, California 94104.
The Company has filed with the Commission a Registration
Statement on Form S-3 (including all amendments thereto, the
"Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Common Stock
offered hereby. As permitted by the rules and regulations of the
Commission, this Prospectus does not contain all the information
set forth in the Registration Statement and the exhibits thereto
and to which reference is hereby made.
-----------------------------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the
Company are incorporated by reference in this Prospectus:
(1) the Company's Annual Report on Form 10-K for the year
ended December 31, 1996;
(2) the Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, June 30 and September 30, 1997;
(3) the Company's Current Reports on Form 8-K filed on
January 15, February 20, March 18, April 15, May 22, June 19,
July 18, July 23, August 14, September 23, October 22, November
17 and December 18, 1997 and January 15, 1998; and
(4) the description of the Company's Common Stock contained
in the Company's registration statement on Form 8-B filed on
August 16, 1985, including any amendment or report filed for the
purposes of updating such description.
All reports and other documents filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act after the date of this Prospectus and prior to the
termination of the offering of the Common Stock shall be deemed
to be incorporated by reference in this Prospectus and to be
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<PAGE>
part hereof from the date of filing of such documents. Any
statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be modified
or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this
Prospectus.
A copy of the documents incorporated by reference (other
than exhibits thereto) will be forwarded without charge to each
person to whom this prospectus is delivered, upon such person's
written or oral request to AlliedSignal Inc., Office of the
Secretary, P.O. Box 4000, Morristown, New Jersey 07962, telephone
number (973)455-5067.
FORWARD-LOOKING STATEMENTS
This Prospectus contains, or incorporates by reference,
certain statements that may be deemed "forward-looking
statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. All statements, other
than statements of historical facts, that address activities,
events or developments that the Company intends, expects,
projects, believes or anticipates will or may occur in the future
are forward-looking statements. Such statements are based on
certain assumptions and assessments made by management of the
Company in light of its experience and its perception of
historical trends, current conditions, expected future
developments and other factors it believes to be appropriate.
The forward-looking statements included in this Prospectus are
also subject to a number of material risks and uncertainties,
including but not limited to economic, competitive, governmental
and technological factors affecting the Company's operations,
markets, products, services and prices, and other factors
discussed in the Company's filings under the Securities Act and
the Exchange Act. Prospective investors are cautioned that such
forward-looking statements are not guarantees of future
performance and that actual results, developments and business
decisions may differ from those envisaged by such forward-looking
statements.
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<PAGE>
THE COMPANY
The Company's operations are conducted in three principal
industries: aerospace; automotive; and engineered materials. The
Company's products are used by many major industries, including
textiles, construction, plastics, electronics, automotive,
chemicals, housing, telecommunications, utilities, packaging,
military and commercial aviation and aerospace and in agriculture
and the space program.
The principal executive offices of the Company are located
at 101 Columbia Road, Morris Township, New Jersey 07962. The
telephone number is (973)455-2000.
SELLING STOCKHOLDERS
The following table sets forth certain information, as of
January 20, 1998, with respect to the shares of Common Stock
beneficially owned and being offered hereby by the stockholders
listed below (the "selling Stockholders"). All of the shares of
Common Stock offered hereby were received by them as part of the
merger consideration in the acquisition by AlliedSignal of Gomar
Manufacturing Co., Inc. ("Gomar") on August 29, 1997. The offer
and sale of the shares of Common Stock offered hereby are being
registered pursuant to registration rights granted the Selling
Stockholders in connection with the Company's acquisition of
Gomar.
SHARES OF SHARES OF SHARES OF COMMON
COMMON STOCK COMMON STOCK STOCK BENEFICIALLY
BENEFICIALLY OFFERED OWNED FOLLOWING
NAME OWNED (1) HEREBY (1) OFFERING HEREBY (1)
Louis Friedman.... 483,039 477,539 5,500
Paul Marks........ 454,282 448,782 5,500
(1) Less than 1% of Common Stock outstanding.
Mr. Friedman became employed as a General Manager of
AlliedSignal's Polymers business unit at the time of the
acquisition of Gomar by AlliedSignal. In connection with the
acquisition of Gomar and such employment, Mr. Friedman and
AlliedSignal entered into a retention agreement.
MANNER OF OFFERING
The shares of Common Stock offered hereby may be sold from
time to time by the Selling Stockholders, or by pledgees, donees,
transferees or other successors in interest. Such sales may be
made on one or more stock exchanges or in the over-the-counter
market or otherwise, at prices and at terms then prevailing or at
prices related to the then current market price, or in negotiated
transactions. The shares of Common Stock may be sold in one or
more of the following: (a) a block trade in which the broker-
dealer so engaged will attempt to sell the shares as agent but
may position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker-dealer as
principal and resale by such broker-dealer for its account
pursuant to this Prospectus; (c) an exchange distribution in
accordance with
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<PAGE>
the rules of such exchange; and (d) ordinary brokerage
transactions and transactions in which the broker solicits
purchasers. In effecting sales, broker-dealers engaged by the
Selling Stockholders may arrange for other broker-dealers to
participate in resales.
In connection with distribution of the shares of Common
Stock offered hereby or otherwise, the Selling Stockholders may
enter into hedging transactions with broker-dealers. In
connection with such transactions, broker-dealers may engage in
short sales of shares of Common Stock registered hereunder in the
course of hedging the positions they assume with the Selling
Stockholders. The Selling Stockholders may also sell shares of
Common Stock short and redeliver the shares of Common Stock
registered hereunder to close out such short positions. The
Selling Stockholders may also enter into option or other
transactions with broker-dealers which require the delivery to
the broker-dealer of the shares of Common Stock registered
hereunder, which the broker-dealer may resell or otherwise
transfer pursuant to this Prospectus. The Selling Stockholder
may also loan or pledge the shares of Common Stock registered
hereunder to a broker-dealer and the broker-dealer may sell the
shares of Common Stock so loaned or upon default the broker-
dealer may effect sales of the pledged shares pursuant to this
Prospectus. The Selling Stockholders may also pledge shares of
Common Stock registered hereunder to a lender other than a broker-
dealer, and upon default such lender may sell the shares of
Common Stock so pledged pursuant to this Prospectus.
Broker-dealers or agents may receive compensation in the
form of commissions, discounts or concessions from the Selling
Stockholders in amounts to be negotiated in connection with the
sale of Common Stock. Such broker-dealers and any other
participating broker-dealers may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with such
sales and any such commission, discount or concession may be
deemed to be underwriting discounts or commissions under the
Securities Act. In addition, any securities covered by the
prospectus which qualify for sale under Rule 144 under the
Securities Act may be sold pursuant to Rule 144 rather than
pursuant to this Prospectus.
All costs, expenses and fees in connection with the
registration of the shares of Common Stock offered hereby shall
be borne by the Company. Commissions and discounts, if any,
attributable to the sales of shares of Common Stock hereunder
will be borne by the Selling Stockholders. The Selling
Stockholders may agree to indemnify any broker-dealer or agent
that participates in transaction involving sales of shares of
Common Stock against certain liabilities, including liabilities
arising under the Securities Act. The Company has agreed to
indemnify the Selling Stockholders and the Selling Stockholders
have agreed to indemnify the Company against certain liabilities
in connection with the offering of the shares of Common Stock
hereunder, including liabilities arising under the Securities Act.
LEGAL MATTERS
Certain legal matters in connection with the shares of
Common Stock issued hereby have been passed upon for the Company
by J. Edward Smith, Senior Counsel, Corporate and Finance, of AlliedSignal.
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<PAGE>
EXPERTS
The consolidated financial statements of the Company
incorporated in this Prospectus by reference to the Company's
Annual Report on Form 10-K for the year ended December 31, 1996
have been so incorporated in reliance on the report of Price
Waterhouse LLP ("Price Waterhouse"), independent accountants,
given on the authority of said firm as experts in auditing and
accounting.
With respect to the unaudited consolidated financial
information of the Company for the three month periods ended
March 31, the three- and six-month periods ended June 30 and the
three- and nine-month periods ended September 30, 1997 and 1996,
incorporated by reference in this Prospectus, Price Waterhouse
reported that they have applied limited procedures in accordance
with professional standards for a review of such information.
However, their separate reports dated April 24, 1997, July 25,
1997 and October 27, 1997 incorporated by reference herein, state
that they did not audit and they did not express an opinion on
that unaudited financial information. Price Waterhouse has not
carried out any significant or additional tests beyond those
which would have been necessary if their report had not been
included. Accordingly, the degree of reliance on their report on
such information should be restricted in light of the limited
nature of the review procedures applied. Price Waterhouse is not
subject to the liability provisions of section 11 of the
Securities Act for their report on the unaudited consolidated
financial information because that report is not a "report" or a
"part" of the registration statement prepared or certified by
Price Waterhouse within the meaning of sections 7 and 11 of the
Securities Act.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission Registration Fee..........$9,812
Printing..................................................... 1,000*
Accountants' Fees and Expenses............................... 5,000*
Miscellaneous Expenses....................................... 1,000*
------
Total..................................................$16,812*
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------
- -----------
*Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Article ELEVENTH of the Company's Restated Certificate
of Incorporation, each person who is or was a director or officer
of the Company, and each director or officer of the Company who
serves or served any other enterprise or organization at the
request of the Company, shall be indemnified by the Company to
the full extent permitted by the Delaware General Corporation
Law.
Under such law, to the extent that such a person is
successful on the merits or otherwise in defense of a suit or
proceeding brought against such person by reason of the fact that
such person is or was a director or officer of the Company, or
serves or served any other enterprise or organization at the
request of the Company, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably
incurred in connection with such action.
If unsuccessful in defense of a third-party civil suit or a
criminal suit, or if such a suit is settled, such a person shall
be indemnified under such law against both (1) expenses
(including attorneys' fees) and (2) judgments, fines and amounts
paid in settlement if such person acted in good faith and in a
manner such person reasonably believed to be in, or not opposed
to, the best interests of the Company, and with respect to any
criminal action, had no reasonable cause to believe such person's
conduct was unlawful.
If unsuccessful in defense of a suit brought by or in the
right of the Company, or if such suit is settled, such a person
shall be indemnified under such law only against expenses
(including attorneys' fees) actually and reasonably incurred in
the defense or settlement of such suit if such person acted in
good faith and in a manner such person reasonably believed to be
in, or not opposed to, the best interests of the Company except
that if such a person is adjudged to be liable in such suit to
the Company, such person cannot be made whole even for expenses
unless the court determines that such person is fairly and
reasonably entitled to indemnity for such expenses.
II-1
<PAGE>
In addition, the Company maintains directors' and officers'
reimbursement and liability insurance pursuant to standard form
policies. The risks covered by such policies include certain
liabilities under the securities laws.
ITEM 16. EXHIBITS.
EXHIBIT NO.
- -----------
2 Agreement and Plan of Merger by and among Louis
Friedman and Paul Marks, Gomar Manufacturing Co., Inc.
and the Company dated July 27, 1997.
4.1 The Company's Restated Certificate of
Incorporation (incorporated by reference to Exhibit
3(i) to the Company's Form 10-Q for the quarter ended
March 31, 1997).
4.2 The Company's By-laws, as amended (incorporated by
reference to Exhibit 3(ii) to the Company's Form 10-Q
for the quarter ended March 31, 1996).
5 Opinion of J. Edward Smith, Esq., with respect to
the legality of the securities being registered hereby.
15 Independent Accountants' Acknowledgment Letter as
to the incorporation of their reports relating to
unaudited interim financial information.
23.1 Consent of Price Waterhouse LLP.
23.2 The consent of J. Edward Smith, Esq. is contained
in his opinion filed as Exhibit 5 to this registration
statement.
24 Powers of Attorney.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such
information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration
statement.
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<PAGE>
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(4) For purposes of determining any liability under the
Act, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(b) under the Act shall
be deemed to be part of this registration statement as of the
time it was declared effective.
(5) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
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<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Township of Morris, State of New Jersey,
on the 19th day of January, 1998.
ALLIEDSIGNAL INC.
By: /s/ Richard F. Wallman
------------------------
Richard F. Wallman
Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following
persons in the capacities and on the dates indicated.
Name Title Date
* Director, Chairman of the
- ---------------------------- Board and Chief Executive Officer
(Lawrence A. Bossidy)
*
- ---------------------------- Director
(Hans W. Becherer)
*
- ---------------------------- Director
(Daniel P. Burnham)
*
- ---------------------------- Director
(Ann M. Fudge)
*
- ---------------------------- Director
(Paul X. Kelley)
*
- ---------------------------- Director
(Robert P. Luciano)
*
- ---------------------------- Director
(Robert B. Palmer)
<PAGE>
*
- ---------------------------- Director
(Russell E. Palmer)
*
- ---------------------------- Director
(Frederic M. Poses)
*
- ---------------------------- Director
(Ivan G. Seidenberg)
*
- ---------------------------- Director
(Andrew C. Sigler)
*
- ---------------------------- Director
(John R. Stafford)
*
- ---------------------------- Director
(Thomas P. Stafford)
*
- ---------------------------- Director
(Robert C. Winters)
*
- ---------------------------- Director
(Henry T. Yang)
/s/ Richard F. Wallman
- ---------------------------- Senior Vice President and January 19, 1998
(Richard F. Wallman) Chief Financial Officer
(Principal Financial Officer)
/s/ Nancy A. Garvey
- ---------------------------- Vice President and Controller January 19, 1998
(Nancy A. Garvey) (Principal Accounting Officer)
*By: /s/ Nancy A. Garvey
- ---------------------------- January 19, 1998
(Nancy A. Garvey,
Attorney-in-Fact)
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
1 Omitted (inapplicable).
2 Agreement and Plan of Merger by and among Louis
Friedman and Paul Marks, Gomar Manufacturing Co., Inc.
and the Company dated July 27, 1997.
4.1 The Company's Restated Certificate of Incorporation
(incorporated by reference to Exhibit 3(i) to the
Company's Form 10-Q for the quarter ended March 31, 1997).
4.2 The Company's By-laws, as amended (incorporated by
reference to Exhibit 3(ii) to the Company's Form 10-Q for
the quarter ended March 31, 1996).
5 Opinion of J. Edward Smith, Esq., with respect to
the legality of the securities being registered hereby.
8 Omitted (inapplicable).
12 Omitted (inapplicable).
15 Independent Accountants' Acknowledgment Letter as to
the incorporation of their reports relating to unaudited
interim financial information.
23.1 Consent of Price Waterhouse LLP.
23.2 The consent of J. Edward Smith, Esq. is contained in
his opinion filed as Exhibit 5 to this registration
statement.
24 Powers of Attorney.
25 Omitted (inapplicable).
26 Omitted (inapplicable).
27 Omitted (inapplicable).
28 Omitted (inapplicable).
99 Omitted (inapplicable).
Exhibit 2
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
LOUIS FRIEDMAN AND PAUL MARKS
(SHAREHOLDERS)
GOMAR MANUFACTURING CO., INC.
AND
ALLIEDSIGNAL INC.
DATED
JULY 27, 1997
TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS 2
ARTICLE II - THE MERGER AND THE EXCHANGE OF SHARES 9
2.1 THE MERGER 9
2.2 EFFECT OF THE MERGER 9
2.3 CERTIFICATE OF INCORPORATION AND RELATED MATTERS 10
2.4 EFFECTIVE TIME AND CLOSING 10
2.5 CONVERSION OF THE COMPANY STOCK 11
2.6 INITIAL ESCROW 14
2.7 CALCULATION OF NET WORKING CAPITAL AND DISTRIBUTION OR
RETURN OF ALLIED COMMON SHARES 14
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE COMPANY 17
3.1 ORGANIZATION 17
3.2. TITLE TO THE SHARES 18
3.3 AUTHORITY 18
3.4 NO BREACH 18
3.5 CONSENTS AND APPROVALS 19
3.6 ACQUISITION OF ALLIED COMMON STOCK 19
3.7 CAPITALIZATION 20
3.8 FINANCIAL STATEMENTS 21
3.9 NET WORTH 21
3.10 ABSENCE OF CERTAIN CHANGES 21
3.11 ABSENCE OF UNDISCLOSED LIABILITIES 22
3.12 COMPLIANCE WITH LAW 22
3.13 ENVIRONMENTAL HEALTH AND SAFETY 22
3.14 EMPLOYEE BENEFIT PLANS 23
3.15 LABOR AND EMPLOYMENT MATTERS 26
3.16 TAX MATTERS 27
3.17 INTELLECTUAL PROPERTY 28
3.18 MATERIAL AGREEMENTS 29
3.19 ASSETS 29
3.20 INSURANCE 30
3.21 LITIGATION AND PRODUCT TERMS 30
3.22 INVENTORY 31
3.23 CUSTOMERS 31
3.24 SUPPLIERS 31
3.25. BROKERS AND FINDERS 31
3.26. NO OTHER REPRESENTATIONS OR WARRANTIES 31
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF BUYER 32
4.1 ORGANIZATION AND AUTHORITY 32
4.2 ALLIED COMMON STOCK 33
4.3 NO BREACH 33
4.4 CONSENTS AND APPROVALS 33
4.5 SEC REPORTS; FINANCIAL STATEMENTS 33
4.6 BROKERS AND FINDERS 34
4.7 NO RELIANCE 34
ARTICLE V - CERTAIN COVENANTS 34
5.1 CONDUCT OF BUSINESS OF THE COMPANY 35
5.2 UPDATED SCHEDULES 37
5.3 PUBLIC ANNOUNCEMENTS 37
5.4 CONSENTS 38
5.5 HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT 38
5.6 INDUSTRIAL SITE RECOVERY ACT 38
5.7 FURTHER ASSURANCES 42
5.8 PROVISION OF RECORDS; RECORDS RETENTION 42
5.9 EMPLOYEE MATTERS 43
5.10 REGISTRATION OF BUYER'S COMMON STOCK 46
5.11 RESIGNATIONS 47
5.12 RISK OF LOSS 47
5.13 DISTRIBUTIONS TO SHAREHOLDERS OF CASH AND MARKETABLE
SECURITIES; BANK INDEBTEDNESS 47
5.14. CONSENTS; COOPERATION 48
5.15. ADDITIONAL AGREEMENT 49
5.16. NOTIFICATION OF CERTAIN MATTERS 49
5.17. ACTIONS TO PRESERVE TAX-FREE REORGANIZATION TREATMENT 50
ARTICLE VI - INDEMNIFICATION 50
6.1 INDEMNIFICATION BY SHAREHOLDERS 50
6.2 INDEMNIFICATION BY BUYER. 53
6.3 INDEMNIFICATION PROCEDURE. 55
6.4 CLAIMS BY THIRD PARTIES 55
6.5 PROCEDURES WITH RESPECT TO INDEMNIFIED LOSSES OF SHAREHOLDERS 58
ARTICLE VII - CONDITIONS TO CLOSING 59
7.1 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY, THE
SHAREHOLDERS AND ALLIED 59
7.2 CONDITIONS TO THE OBLIGATIONS OF THE SHAREHOLDERS 60
7.3 CONDITIONS TO OBLIGATIONS OF ALLIED 61
ARTICLE VIII - TERMINATION 62
8.1 TERMINATION 62
8.2. EFFECT OF TERMINATION 63
ARTICLE IX - MISCELLANEOUS 64
9.1 ENTIRE AGREEMENT 64
9.2 NOTICES 64
9.3 GOVERNING LAW 65
9.4 DISPUTES 66
9.5 DESCRIPTIVE HEADINGS 66
9.6 PARTIES IN INTEREST 66
9.7 COUNTERPARTS 67
9.8 EXPENSES 67
9.9 BINDING EFFECT; ASSIGNMENT 67
9.10 AMENDMENT 67
9.11 EXTENSION; WAIVER 67
SCHEDULES
3.1 Organization
3.2 Title to Shares and Encumbrance
3.4 No Breach
3.5 Consents and Approvals
3.7 Agreements Effecting the Voting of the Capital
Stock of the Company
3.8 Financial Statements
3.11 Undisclosed Liabilities
3.13 Environmental Health and Safety
3.14 Employee Benefit Plan
3.14(b) Changes to Existing Plans and Adoptions of New Plans
3.15 Labor and Employment Matters
3.16 Tax Matters
3.17 Intellectual Property
3.18 Material Agreements
3.19 Assets
3.20 Insurance
3.21 Litigation; Warranty Claims; Product Liability
3.22 Consignment Inventory
3.23 Customers
3.24 Suppliers
5.1 Exception to Post-Signing Covenants
5.9 Employee Matters
5.9(d) Stay-On Bonuses
6.1 Third Party Claims
EXHIBITS
Exhibit A Escrow Agreement
Exhibit B Louis Friedman Retention Agreement
Exhibit C Form of Opinion of Counsel for Company
Exhibit D Form of Opinion of Counsel for Allied
Exhibit E Registration Rights Agreement
Exhibit F Howard Friedman Confidentiality, Non-Compete and Non-
Disparagement Agreement
AGREEMENT AND PLAN OF MERGER
-----------------------------
This Agreement and Plan of Merger (this "Agreement"), dated
as of the 27th day of July, 1997, is made by and among Gomar
Manufacturing Co., Inc., a New Jersey corporation (the
"Company"), Paul Marks ("Marks"), whose address is 175 Forest
Road, West Orange, New Jersey 07052, Louis Friedman ("Friedman"),
whose address is 35 Templar Drive, Watchung, New Jersey 07060
(Marks and Friedman together, the "Shareholders"), and
AlliedSignal Inc., a Delaware corporation ("Allied").
RECITALS
WHEREAS, the Company is in the business of developing,
manufacturing and selling converted specialty films used in
packaging, industrial and miscellaneous other applications (the
"Business"); and
WHEREAS, Shareholders are the sole owners of all of the
outstanding capital stock of the Company; and
WHEREAS, Allied and the Company desire to adopt a plan of
reorganization within the meaning of Section 368(a)(1)(A) of the
Code, pursuant to which the Shareholders will receive shares of
Allied Common Stock in a merger; and
WHEREAS, Allied and the Company deem it advisable that the
Company be merged with and into Allied, with Allied as the
surviving corporation pursuant to this Agreement and in
accordance with the applicable statutes of the State of Delaware
and the State of New Jersey (the "Merger"); and
WHEREAS, the Company is an "S" corporation for purposes of
the Code and prior to the Merger the Company will distribute to
the Shareholders an amount equal to the accumulated adjustments
account of the Company (the "AAA Account") as defined in the
Code;
NOW, THEREFORE, in consideration of the foregoing and the
covenants, representations, warranties and agreements set forth
below, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
In this Agreement (including the recitals), except as the
context otherwise requires, the following capitalized terms shall
have the following meanings:
"Affiliate" means any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common
control with, such Person.
"Agreement" means this agreement including all recitals,
exhibits and the Disclosure Schedules relating hereto.
"Allied Common Stock" means common stock, $1.00 par value
per share, of Allied.
"Arbiter" means a nationally recognized accounting firm
mutually agreeable to Buyer and Shareholders.
"Business" has the meaning set forth in the Recital.
"Business Day" means any day which is not a Saturday, Sunday
or any other day on which banks in the States of New York or New
Jersey are authorized or required by law to close.
"Buyer" means Allied.
"Closing" and "Closing Date" have the meanings set forth in
Section 2.4.
"Code" means the Internal Revenue Code of 1986, as amended
at any time and from time to time.
"Company Agreement" means any mortgage, indenture, note,
agreement, contract, lease, license, franchise, obligation,
instrument or other commitment, arrangement or understanding of
any kind, to which the Company is a party or by which the Company
or any of its property may be bound or affected.
"Company Common Stock" has the meaning set forth in Section
2.5.
"Confidentiality Agreement" means the Non-Disclosure
Agreement between Buyer and the Company dated March 5, 1997.
"Current Assets" means solely trade accounts receivable,
employee advances, prepaid expenses and inventories of the
Company, less any reserves for doubtful accounts and for
obsolete, impaired or slow moving inventories. Current Assets
excludes cash equivalents, short-term investments and marketable
securities.
"Current Liabilities" means solely trade accounts payable,
income taxes due by the Company, other accrued liabilities and
prepayments made by customers on purchases of the Company's
Products. Current liabilities include accruals necessary under
GAAP for all Taxes. Current liabilities shall exclude the
principal amount of any indebtedness of the Company for borrowed
money.
"Disclosure Schedules" means the Company's disclosure
schedules delivered by the Company to the Buyer.
"Dispute Notice" has the meaning set forth in Section 2.7.
"Environmental Damage" means all claims, judgments, damages,
losses, penalties, fines, liabilities, costs and reasonable
expenses of investigation and defense of any claim, whether or
not such claim is ultimately successful, which are incurred as a
result of the existence of Hazardous Material upon, about, or
beneath any of the Company's properties or which are migrating or
threatening to migrate from any such property, or the existence
of a violation of Environmental Requirements pertaining to any
such property.
"Environmental Requirements" means all applicable statutes,
regulations, rules, ordinances, codes, licenses, permits, orders,
approvals, plans or authorizations of all governmental agencies
or instrumentalities, and all applicable judicial and
administrative and regulatory decrees, judgments and orders, in
each case relating to the protection of the environment, human
health, and safety of employees or the public; including, but not
limited to, the Occupational Safety and Health Act, Toxic
Substances Control Act, Resource Conservation and Recovery Act,
Clean Air Act, Comprehensive Environmental Response, Compensation
and Liability Act, and similar foreign, state or local laws and
regulations, all as enacted or amended from time to time up to
the date of Closing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Escrow Agent" means the agent selected by mutual agreement
of the parties prior to Closing to perform the duties of the
Escrow Agent under Section 2.6 hereof.
"Escrowed Initial Shares" has the meaning set forth in
Section 2.6.
"Escrow Market Value" means the Closing Price of Allied
Common Stock on the New York Stock Exchange as published in The
Wall Street Journal for the second business day prior to the date
of payment from the Escrow Agent of amounts due under the escrow
to Allied.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
"Financial Statements" has the meaning set forth in Section
3.8.
"GAAP" means United States generally accepted accounting
principles.
"Hazardous Material" means any chemical substance: (i) the
presence of which requires investigation or remediation under any
Environmental Requirements, or (ii) which is defined as a
"hazardous waste" or "hazardous substance" under any federal,
state or local statute, regulation or ordinance as in existence
up to the date of Closing or (iii) which is on or before the
Closing generally recognized to be toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic, or
otherwise hazardous and is regulated by any governmental
authority, or instrumentality of the United States or any state
or any political subdivision thereof; or (iv) the presence of
which on any property of the Company at or before the Closing is
generally recognized to cause or threaten to cause a nuisance
upon such property or to adjacent properties or poses or
threatens to pose a hazard to the health or safety of persons on
or about any such property, or (v) the presence of which on
adjacent properties would constitute under law existing at the
Closing a trespass by the Company.
"HIPAA" means the Health Insurance Portability and
Accountability Act of 1996.
"Insider" means, with respect to the Company, any
Shareholder or any Affiliate of such person.
"Intellectual Property" has the meaning set forth in Section
3.17.
"Knowledge of the Company or Knowledge of the Shareholders,"
or words of similar import, means actual knowledge of either of
the Shareholders but not of any other person.
"Liability" means any liability or obligation of any kind,
character or description, whether known or unknown, absolute or
contingent, accrued or unaccrued, matured or unmatured,
liquidated or unliquidated, secured or unsecured, insured or
uninsured, joint or several, due or to become due, vested or
unvested, executory, determined, determinable, fixed or otherwise
and whether or not GAAP requires that the same be reflected on
financial statements, and shall include, without limitation, any
debt, claim, judgment, litigation, proceeding, damage (including,
without limitation, actual, punitive, and consequential damages),
loss, penalty, fine, Tax, levy, impost, duty, deficiency,
assessment, charge, penalty, strict liability in tort, civil or
criminal violation of applicable law, Lien, cost of defending any
claim, amount or cost of any judgment or good faith settlement,
cost of any repair, recall, rework or replacement, and other
costs, fees and expenses, including without limitation
accounting, reasonable legal and similar fees and expenses.
"Lien" means, with respect to any asset (including, without
limitation, any security), any mortgage, lien, pledge, charge,
security interest, encumbrance or similar restriction or
limitation.
"Losses" means, in respect of Buyer or Shareholders, any and
all losses, liabilities, claims and reasonable expenses of
defense thereof (including, without limitation, fees and
disbursements of counsel, but excluding compensation paid to
employees of Buyer or Shareholders or their respective
Affiliates, as the case may be, in connection with such defense),
Liens or other obligations of any nature whatsoever.
"Material Adverse Effect" means any material adverse change
or effect on the business, operations, assets, financial
condition, properties or results of operations of the Company
taken as a whole.
"Material Agreement" means each Company Agreement that is
material to the business, operations, assets or financial
condition of the Company, including, without regard to
materiality, each of the following Company Agreements:
(a) any mortgage, indenture, note, installment
obligation or other instrument, agreement or arrangement for or
relating to borrowing of money by the Company in excess of
$100,000;
(b) any guaranty by the Company of any obligation of a
third party for borrowed money, excluding endorsements made for
collection in the ordinary course of business;
(c) any obligation to sell or to register the sale of
any of the Company Common Stock or other securities of the
Company;
(d) any obligation to make payments, contingent or
otherwise, arising out of the prior acquisition of the businesses
of any other Person;
(e) any collective bargaining agreement with any labor
union;
(f) any lease or similar arrangement for the use by
the Company of personal property involving payments in excess of
$100,000 per annum;
(g) any Company Agreement to which any Insider is a
party;
(h) any Company Agreement providing for aggregate
payments in excess of $100,000 per annum after the Closing that
is not terminable by the Company on less than 180 days' notice
without penalty;
(i) any Company Agreement containing non-competition
covenants binding on the Company;
(j) any partnership, joint venture or similar
agreement to which the Company is a party; and
(k) any employment contracts, arrangements,
commitments or understandings of any kind with any officer,
director, employee or consultant of the Company which may not be
terminated by the Company without penalty upon not more than 90
days' notice, pursuant to which payments may be required to be
made following the Closing.
"Net Working Capital" means Current Assets minus Current
Liabilities.
"Person" means and includes an individual, corporation,
partnership (limited or general), joint venture, association,
trust, any other unincorporated organization or entity and a
governmental entity or any department or agency thereto.
"Products" means converted specialty films of the type sold
or developed by the Company prior to the Closing Date, and any
material whose design is directly derived therefrom.
"Reference Balance Sheet" means the balance sheet of the
Company as of April 30, 1997, (including the notes and
explanations thereto) included in this Agreement as part of the
Financial Statements.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations thereunder.
"Shares" means the Company Common Stock as defined in
Section 2.5.
"Share Encumbrance" with respect to any security, means any
option, voting trust arrangement, right of first refusal,
transfer restriction under any Shareholders or similar agreement,
or any other agreement, arrangement, commitment or understanding
restricting or otherwise relating to voting rights, dividend
rights or disposition of Shares.
"Tax or Taxes" has the meaning set forth in Section 3.16.
"Trading Day" means any day on which the New York Stock
Exchange is open for business and Allied Common Stock is traded
thereon.
ARTICLE II
THE MERGER AND THE EXCHANGE OF SHARES
2.1 The Merger. Subject to the terms and conditions of
this Agreement, at the Effective Time (as hereafter defined), the
Company shall be merged with and into Allied (the "Merger") in
accordance with the Delaware General Corporation Law (the "DGCL")
and the New Jersey Business Corporation Act (the "NJBCA") and
Allied shall be the surviving corporation (the "Surviving
Corporation").
2.2 Effect of the Merger. At the Effective Time, the
Surviving Corporation shall be considered the same business and
corporate entity as each of Allied and the Company and thereupon
and thereafter, all the property, rights, privileges, powers and
franchises of each of Allied and the Company shall vest in the
Surviving Corporation and the Surviving Corporation shall be
subject to and be deemed to have assumed all of the debts,
liabilities, obligations and duties of each of Allied and the
Company and shall have succeeded to all of each of their
relationships, as fully and to the same extent as if such
property, rights, privileges, powers, franchises, debts,
liabilities, obligations, duties and relationships had been
originally acquired, incurred or entered into by the Surviving
Corporation. In addition, any reference to either of Allied and
the Company in any contract or document, whether executed or
taking effect before or after the Effective Time, shall be
considered a reference to the Surviving Corporation if not
inconsistent with the other provisions of the contract or
document; and any pending action or other judicial proceeding to
which either of Allied or the Company is a party shall not be
deemed to have abated or to have discontinued by reason of the
Merger, but may be prosecuted to final judgment, order or decree
in the same manner as if the Merger had not been made; or the
Surviving Corporation may be substituted as a party to such
action or proceeding, and any judgment, order or decree may be
rendered for or against either of Allied or the Company if the
Merger had not occurred.
2.3 Certificate of Incorporation and Related Matters. The
certificate of incorporation of Allied at the Effective Time
shall be the certificate of incorporation of the Surviving
Corporation and shall not otherwise be amended by this Agreement
or the Merger but thereafter may be amended as provided by law.
At the Effective Time, the By-laws of Allied shall be the By-laws
of the Surviving Corporation until otherwise amended as provided
by law, the directors of the Surviving Corporation shall be the
directors of Allied, and the officers of the Surviving
Corporation shall be the officers of Allied.
2.4 Effective Time and Closing. The Merger shall become
effective (and be consummated) upon the later of the filing of
certificates of merger, in form and substance satisfactory to
Allied and the Company, with the Secretary of State of the State
of New Jersey (the "New Jersey Certificate of Merger") and with
the Secretary of State of the State of Delaware (the "Delaware
Certificate of Merger"). The term "Effective Time" shall mean
the close of business on the first day when the certificates of
merger in both New Jersey and Delaware have been so filed. A
closing (the "Closing") shall take place prior to the Effective
Time at a time and on a date mutually agreeable and as soon as
practicable (but in any event within five business days)
following the receipt of all necessary regulatory and
governmental consents and the expiration of all statutory waiting
periods in respect thereof and the satisfaction or waiver of all
of the conditions to the consummation of the Merger specified in
Article VII hereof (other than the delivery of certificates,
opinions and other instruments and documents to be delivered at
the Closing) (the "Closing Date"), at the offices of Pitney,
Hardin, Kipp & Szuch, or at such other place, time or date as
Allied and the Company may mutually agree upon. Immediately
following the Closing, the New Jersey Certificate of Merger shall
be filed with the New Jersey Secretary of State and the Delaware
Certificate of Merger shall be filed with the Delaware Secretary of State.
2.5 Conversion of the Company Stock. Each share of common
stock, no par value, of the Company (the "Company Common Stock"),
issued and outstanding immediately prior to the Effective Time
(including fractional shares) shall, by virtue of the Merger and
without any action on the part of the holder thereof, be
converted as follows:
(a) Aggregate Merger Number. Subject to the
provisions of this Section 2.5, all of the shares of the Company
Common Stock issued and outstanding immediately prior to the
Effective Time shall be converted at the Effective Time into the
right to receive in the aggregate the number of shares (the
"Aggregate Merger Number") of Allied Common Stock, determined as
follows. The Aggregate Merger Number shall be determined by
dividing (i) $43,000,000 minus the principal amount and accrued
interest thereon after July 31, 1997 of any Bank Indebtedness (as
defined in Section 5.13(b) except that the Bank Indebtedness
shall be deemed increased to the extent that the Company uses
cash flow generated after July 31, 1997 to fund Shareholder
distributions) existing as of the Closing Date; by (ii) the Final
Per Share Price. The "Final Per Share Price" means the lesser of
(x) the Average Closing Price (as hereafter defined) or (y) the
Closing Price on the second Trading Day immediately preceding the
Closing Date. The Average Closing Price of Allied Common Stock
means the average of all of the Closing Prices of Allied Common
Stock during the first 30 of the 32 consecutive Trading Days
immediately preceding the Closing Date. The "Closing Price"
means the closing price of Allied Common Stock on the New York
Stock Exchange as published in The Wall Street Journal.
(b) Adjustment of Aggregate Merger Number Due to Net
Working Capital Changes. The Aggregate Merger Number shall be
increased or decreased in accordance with this section. For
purposes of this section, Net Working Capital shall be calculated
in accordance with Section 2.7 below.
Either (i) If Net Working Capital on the Closing
Statement as of July 31, 1997 exceeds Net Working Capital as
of April 30, 1997, the Aggregate Merger Number shall be
increased by the number calculated by dividing the amount of
such excess by the Final Per Share Price;
Or (ii) If the Net Working Capital on the
Closing Statement as of July 31, 1997 is less than the Net
Working Capital as of April 30, 1997, the Aggregate Merger
Number shall be decreased by the number calculated by
dividing the amount of such excess by the Final Per Share
Price.
And (iii) The Aggregate Merger Number shall be
increased by the number calculated by dividing the amount of
the Cash Capital Expenditures (as defined in Section 2.7
below) paid by the Company between April 30, 1997 and the
Closing Statement as of July 31, 1997, by the Final Per
Share Price.
(c) Allocation of Aggregate Merger Number; No
Fractional Shares. The shares of Company Common Stock of each
Shareholder issued and outstanding immediately prior to the
Effective Time shall be converted at the Effective Time into the
right to receive a number of shares of Allied Common Stock,
determined by multiplying the Aggregate Merger Number (as
adjusted) by a quotient, the numerator of which is the number of
issued and outstanding shares of Company Common Stock held by
such Shareholder and the denominator of which is the total issued
and outstanding shares of Company Common Stock as set forth on
Schedule 3.2 hereof as adjusted for additional shares of the
Company Common Stock issued to the Shareholders after the date
hereof through the Closing. No fractional shares of Allied
Common Stock shall be issued to either Shareholder hereunder.
The number of shares to which such holder is entitled shall be
rounded to the nearest whole number.
(d) Cash Dividends on Allied Common Stock if the
Record Date is Before the Closing Date; Adjustments for Capital
Changes. If the Closing Date falls after a record date for cash
dividends or other payments or distributions on Allied Common
Stock, but before the payment date, the Shareholders shall be
entitled to be paid such cash dividends or other payments or
distributions on Allied Common Stock. The Aggregate Merger
Number and the calculations of the Final Per Share Price shall be
approximately adjusted to take into account any capital changes
in Allied Common Stock, such as stock splits, stock dividends,
reorganizations, mergers, or consolidations which are effected
between the Trading Day used for the calculation of the Average
Closing Price and the Closing Date.
(e) Cancellation of the Company Certificates. After
the Effective Time, all shares of the Company Common Stock shall
no longer be outstanding and shall automatically be cancelled and
shall cease to exist. The Shareholders as holders of shares of
the Company Common Stock shall cease to have any rights with
respect to such shares of the Company Common Stock and shall be
entitled to receive certificates evidencing shares of Allied
Common Stock issued pursuant to this Article II. The shares of
Allied Common Stock outstanding prior to the Merger shall be
unaffected by the Merger.
2.6 Initial Escrow. At the Effective Time, Allied shall
deliver to the Escrow Agent from the shares issued under Section
2.5(a), a number of shares of Allied Common Stock having a Market
Value measured by the Final Closing Price equal to $2,000,000
(the "Escrowed Initial Shares"). The Escrowed Initial Shares
shall be held in escrow pursuant to the terms of the escrow
agreement, attached as Exhibit A (the "Escrow Agreement"), for a
period of three years after the Closing (and thereafter a
sufficient number of shares shall continue to be held until any
claims made by Allied within the three year period pursuant to
the provisions of Article VI are resolved) (the "Escrow Period")
and (a) shall serve as the source for the indemnification and
other obligations of the Shareholders contained in Article VI
(which obligations shall be charged against the Escrowed Shares
based upon the Escrow Market Value at the time the Escrowed
Shares are withdrawn), and (b) shall be subject to return to
Allied to the extent that the Shareholders are entitled to a
lesser number of shares of Allied Common Stock pursuant to the
provisions of Section 2.5 and 2.7. After conclusion of the
Escrow Period, any Escrowed Initial Shares then remaining in
escrow shall be delivered to the Shareholders as allocated under
Section 2.5(c).
2.7 Calculation of Net Working Capital and Distribution or
Return of Allied Common Shares.
(a) At or before the Closing, the Buyers and the
Shareholders shall mutually agree upon a statement of the
payments made on a cash basis by the Company for or related to
the installation of property, plant and equipment between the
close of business as of April 30, 1997 and 11:59 p.m. July 31,
1997 (the "Cash Capital Expenditures"). On or as soon as
practical after August 1, 1997, employees or agents of the
Company and Buyer shall jointly conduct a physical inventory (of
inventory) as of 11:59 p.m. July 31, 1997. Within sixty (60)
days after the Closing Date, Buyer, in consultation with Friedman
and his agents, shall prepare and deliver to Shareholders a
statement of Net Working Capital as of 11:59 p.m. July 31, 1997,
setting forth in detail all items of Net Working Capital
(collectively, the "Closing Statement"). The Closing Statement
shall be prepared in accordance with GAAP and in accordance with
the accounting practices and policies of the Company,
consistently applied as set forth on the Reference Balance Sheet
(except that the Closing Statement shall use the results of the
joint physical inventory) and otherwise consistent with the
calculation of Net Working Capital from the Reference Balance
Sheet and shall be adjusted to account for certain transaction
related expenses which were not accrued as of July 31, 1997 but
are thereafter paid before Closing in accordance with 5.1 (o).
If Shareholders are in disagreement with the Closing Statement,
Friedman shall notify Buyer of such disagreement, within thirty
(30) days of their receipt of the Closing Statement, setting
forth each item of disagreement, including the dollar amount for
each item of disagreement and the reasons therefor (the "Dispute
Notice"). Upon receipt of such Dispute Notice, Shareholders and
Buyer shall attempt in good faith to resolve such disagreement.
If either Shareholders or Buyer is dissatisfied with the progress
being made towards a resolution, such party may, by notice to the
other, refer the disagreement to the Arbiter. Not later than
thirty (30) days after the engagement of the Arbiter (as
evidenced by the date of its written acceptance by facsimile or
as otherwise designated by the Arbiter to both Buyer and
Shareholders), Buyer and Shareholders shall submit simultaneous
briefs to the Arbiter (with a copy to the other party) setting
forth their respective positions regarding the issues in dispute,
and not later than fifteen (15) days after the submittal of such
briefs Buyer and Shareholders shall submit simultaneous reply
briefs (with a copy to the other). If additional briefing, a
hearing, or other information is required by the Arbiter, the
Arbiter shall give notice thereof to Buyer and Shareholders as
soon as practicable, and Buyer and Shareholders shall promptly
respond with a view to minimize any delay in the decision. The
Arbiter shall make a determination with respect to the disputes
so submitted and the same shall be conclusive and binding upon
the parties hereto; provided, however, that in no event shall the
Arbiter determine an amount that is outside of the range of the
amounts submitted by Buyer and Shareholders. Such determination
shall be final and binding on the Buyer and the Shareholders.
The fees and expenses of the Arbiter shall be shared equally by
the Shareholders and Buyer.
(b) If the Aggregate Merger Number is increased
pursuant to Section 2.5(b), Buyer shall, within five business
days after the Closing Statement becomes final, pay to the
Shareholders, the additional shares of Allied Common Stock due
under Section 2.5(b). If the Aggregate Merger Number is
decreased pursuant to Section 2.5(b), within five business days
after the Closing Statement becomes final, a number of Escrowed
Initial Shares equal to the number of shares reflecting the
applicable amount of such decrease shall be released from Escrow
and returned to the Buyer for cancellation. If the Final Per
Share Price of all remaining Escrowed Initial Shares is less than
$2,000,000 after such adjustments, the Shareholders shall within
five business days after the Closing Statement becomes final
deposit with the Escrow Agent under the Escrow Agreement a number
of shares of Allied Common Stock so that, based upon the Final
Per Share Price, the Escrow Agent has shares with a value of
$2,000,000.
2.8 Accounting Date. The effective date for Buyer to
account for the Merger shall be August 1, 1997 (the "Accounting
Date"). From the Accounting Date to the Closing, any cash
generated by the Company or funding requirements of the Company,
except with respect to the Bank Indebtedness set forth in Section
5.13 below, shall accrue to Buyer's account.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company and the Shareholders hereby represent and
warrant to Allied as follows:
3.1 Organization.
(a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State
of New Jersey and has all requisite corporate power and authority
to own, lease and operate its properties and to carry on its
businesses as now being conducted. Attached hereto as Schedule
3.1 are accurate and complete copies of the Certificate of
Incorporation and Bylaws of the Company as in effect on the date
hereof.
(b) Except as set forth on Schedule 3.1, the Company
owns no capital stock, partnership interests, limited liability
company interests or other equity interests in any Person.
(c) The Company is duly qualified or licensed and in
good standing to do business in each jurisdiction in which the
property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or licensing
necessary, except where the failure to be so qualified would not
have a Material Adverse Effect.
3.2. Title to the Shares. Schedule 3.2 sets forth the
number of shares of Company Common Stock owned by each
Shareholders on the date hereof, which number may be increased as
a result of the Shareholders' contributions required by Section
5.8(e). The Shareholders have good and marketable title to the
Company Common Stock, free and clear of any Lien or Share
Encumbrance, except as set forth on Schedule 3.2.
3.3 Authority. The Company and the Shareholders have the
full right, power and authority to execute, enter into and
deliver this Agreement and to consummate the transactions
contemplated hereby. Except for filings required under the HSR
Act, consents or approvals required under ISRA or under any other
Environmental Requirement, or consents or approvals disclosed in
Schedule 3.5, all necessary action, corporate or otherwise,
required to have been taken by or on behalf of the Company to
authorize (i) the approval, execution and delivery on behalf of
the Company of this Agreement, and (ii) the performance by the
Company of its obligations under this Agreement and the
consummation of the transactions contemplated hereby has been
taken. Upon execution and delivery of this Agreement by the
Company and the Shareholders, this Agreement shall constitute a
valid and binding agreement of the Company and the Shareholders,
enforceable against them in accordance with their terms, except
(x) as the same may be limited by applicable bankruptcy,
insolvency, moratorium or similar laws of general application
relating to or affecting creditors' rights, including without
limitation, the effect of statutory or other laws regarding
fraudulent conveyances and preferential transfers, and (y) for
the limitations imposed by general principles of equity.
3.4 No Breach. Except as set forth on Schedule 3.4, the
execution and delivery of this Agreement by the Shareholders or
the Company does not, and the consummation of the transactions
contemplated hereby will not, (i) violate or conflict with the
Certificate of Incorporation or Bylaws of the Company, or (ii)
constitute a breach or default (or an event that with notice or
lapse of time or both would become a breach or default) or give
rise to any Lien, Share Encumbrance, third-party right of
termination, cancellation, material modification or acceleration
under any material agreement, understanding or undertaking to
which the Shareholders or the Company is a party or by which it
is bound or (iii) constitute a material violation of any statute,
law, ordinance, rule or regulation. Except as set forth on
Schedule 3.4, neither the Shareholders nor the Company is a party
to or bound by any agreement that restricts or purports to
restrict the ability of the Company to engage in the Business or
the Shareholders to work for the Company.
3.5 Consents and Approvals. Except as referenced in the
second sentence of Section 3.3, or as disclosed in Schedule 3.5,
neither the execution nor the delivery of this Agreement by the
Shareholders or the Company, nor the consummation by the Company
or the Shareholders of the transactions contemplated hereby will
require any consent, approval, authorization or permit of, or
filing with or notification to, any governmental or regulatory
authority or any other party.
3.6 Acquisition of Allied Common Stock. The Shareholders
have such knowledge and experience in financial and business
matters that they are capable of evaluating the merits and risks
of their investment in the shares of Allied Common Stock.
Shareholders confirm that Buyer has made available to
Shareholders the opportunity to ask questions of the officers and
management employees of Buyer and to acquire additional
information about the business, assets and financial condition of
Buyer. Shareholders are acquiring the shares of Allied Common
Stock to be received in the transaction for investment only,
except that Shareholders have the right from and after the
Closing to exercise their rights under the Registration Rights
Agreement to register the Allied Common Stock for resale and
furthermore the Shareholders shall be entitled to sell their
shares of Allied Common Stock in accordance with Rule 144 under
the Securities Act, commencing one year after Closing.
Shareholders acknowledge and agree that the shares of Allied
Common Stock may not be sold or offered for sale, or otherwise
disposed of, without registration under the Securities Act,
except pursuant to Rule 144 or another exemption from such
registration. Notwithstanding the foregoing, Allied acknowledges
that the Shareholders may pledge the Allied Common Stock and make
family gift transfers of such shares if the pledgee or transferee
acknowledges in writing to Allied that the Allied Common Stock
will remain in the hands of such pledgees or transferees subject
to the same restrictions.
3.7 Capitalization. The authorized capital stock of the
Company consists of 120,000 shares of common stock, which
represents all of the issued and outstanding shares of the
Company's common stock. All of the outstanding shares of the
Company's common stock have been duly and validly issued and are
fully paid and non-assessable and, except as set forth on
Schedule 3.2, are owned by the Shareholders free and clear of any
Lien or Share Encumbrance. There is outstanding (i) no share of
capital stock or other voting security of the Company except as
set forth above in this Section 3.7, (ii) no security of the
Company convertible into or exchangeable for shares of capital
stock or voting securities of the Company, (iii) no option or
other right to acquire from the Company, and no obligation or
commitment of any kind of the Company to issue any capital stock,
voting securities or securities convertible into or exchangeable
for capital stock or voting securities of the Company, and (iv)
no outstanding obligation or commitment of any kind of the
Company to repurchase, redeem or otherwise acquire any of the
Company's common stock. There is no voting trust or other
agreement or understanding to which the Shareholders or the
Company are a party with respect to the voting of capital stock
of the Company, except as set forth in Schedule 3.7. The Company
does not hold shares of its capital stock in its treasury, except
as set forth in the Financial Statements.
3.8 Financial Statements. Schedule 3.8 contains the
(i) statements of income, shareholder's equity and cash flow for
the years ended December 31, 1995 and 1996, (ii) the Reference
Balance Sheet, including notes on the accounting practices and
policies used to compile the Reference Balance Sheet, and
(iii) statements of income and cash flow for the four-months
ended April 30, 1997, (collectively, the "Financial Statements")
each of which, except as otherwise set forth on Schedule 3.8, (a)
has been prepared in accordance with GAAP and consistent with the
Company's accounting policies applied on a consistent basis
throughout the periods covered thereby, (b) presents fairly, in
all material respects, the operating results and financial
condition of the Company as of the dates indicated or the periods
indicated, and (c) is correct and materially complete and is
consistent with the financial books and records of the Company in
all material respects (which books and records are, in all
material respects, correct and complete).
3.9 Net Worth. Each Shareholder is a natural person with
net worth in excess of $1 million.
3.10 Absence of Certain Changes. From April 30, 1997, the
date of the Reference Balance Sheet to the date hereof, there has
not been any (i) material adverse change in the financial
position, assets, operations or prospects of the Company,
(ii) any damage, destruction or loss to any of the properties or
assets of the Company, whether or not covered by insurance, which
has materially and adversely affected or impaired or which may
materially and adversely affect or impair the ability to conduct
the Business consistent with the Company's past practice, or
(iii) other event or condition of any character that,
individually or in the aggregate, have or would reasonably be
expected to have a Material Adverse Effect.
3.11 Absence of Undisclosed Liabilities. To the
Shareholders' knowledge, except as and to the extent reflected,
disclosed or reserved against in the Financial Statements
(including the notes thereto) or except as set forth on Schedule
3.11, there are no liabilities or obligations of the Company,
either accrued, absolute, contingent or otherwise which were
required by GAAP (consistently applied) to be disclosed on the
Financial Statements.
3.12 Compliance With Law. Except as set forth on Schedule
3.12, the Company (i) holds all material licenses, franchises,
certificates, consents, permits and authorizations necessary for
the lawful conduct of its business, (ii) has not violated in any
material respect, or is in violation in any material respect of,
any such licenses, franchises, certificates, consents, permits or
authorizations, and (iii) has not received any notice of any such
violation.
3.13 Environmental Health and Safety. Except as disclosed
on Schedule 3.13:
(a) The business and properties of the Company have
been operated in material compliance with all Environmental
Requirements existing at the time and are currently operated in
material compliance with all present Environmental Requirements.
(b) There has been no discharge, emission, release,
disposal, offsite shipment of or exposure of employees to any
Hazardous Material not in compliance with Environmental
Requirements existing at the time at, on, under or from any
location owned, leased or otherwise used by the Company at any
time while owned or leased by the Company.
(c) The Company has not received notice of any alleged
violation of Environmental Requirements or liability for
Environmental Damages in connection with the present or past
business or properties of the Company, and there exists no writ,
injunction, decree, order or judgment outstanding, nor any
lawsuit, claim, proceeding, citation, directive, summons or, to
the knowledge of the Company, investigation, pending or
threatened, relating thereto.
(d) The Company has all permits and licenses required
under Environmental Requirements in respect of its business and
properties, and is in compliance in all material respects with
the terms and conditions of such permits and licenses.
(e) The Company has made available to Allied all
reports of environmental surveys, audits, investigations and
assessments relating to the properties or business of the
Company, of which Shareholders have knowledge. A preliminary
list has been delivered to Allied in the form of a supplement to
Schedule 3.13 and a final version of such Schedule will be
delivered to Allied on or before the Closing.
(f) None of the assets of the Company (i) to the
knowledge of the Company, is required to be materially upgraded
or modified to be in compliance with any existing Environmental
Requirements or (ii) includes any Hazardous Material in a
quantity exceeding that which is required for the operation of
the Business.
(g) There has been no treatment, storage or disposal
of, or arrangement for treatment, storage or disposal of, or
transportation of any Hazardous Material by the Company at, or to
any property or facility not owned or operated by the Company, in
violation of any Environmental Requirement.
3.14 Employee Benefit Plans.
(a) Schedule 3.14 contains a correct and complete list
of (i) each employee benefit plan, arrangement or policy (whether
or not written and whether or not subject to ERISA), including
without limitation, any stock option, stock purchase, stock
award, retirement, pension, deferred compensation, profit
sharing, savings, incentive, bonus, health, dental, hearing,
vision, drug, life insurance, cafeteria, flexible spending,
dependent care, fringe benefit, vacation pay, holiday pay,
disability, sick pay, workers compensation, unemployment,
severance pay, employee loan, educational assistance plan, policy
or arrangement, and (ii) any employment, indemnification,
consulting or severance agreement, under which any employee or
former employee of the Company has any present or future right to
benefits or under which the Company has any present or future
liability (the "Plans"). The Company has made available to Buyer
a current, accurate and complete copy, in all material respects
of: (q) each Plan document or a written description of any
unwritten plan; (r) any trust agreement or insurance contract
related to a Plan; (s) any employee handbook; (t) the most recent
summary plan description, if applicable; and (u) if applicable,
the two most recent (A) Forms 5500 and attached Schedules; (B)
audited financial statements; (C) actuarial valuation reports;
(D) PBGC Forms 1; and Forms 1-ES; and (F) the most recent IRS
determination letter.
(b) No Plan covers employees other than current
employees or former employees of the Company. Except as
disclosed in Schedule 3.14(b), or as required by law, the Company
has not communicated to present or former employees of the
Company, or adopted or authorized any change in the terms of an
existing plan or the adoption of any new plan.
(c) (i) Each Plan has been established and
administered, in all material respects, in accordance with its
terms and the applicable provisions of ERISA, the Code and other
applicable laws, rules and regulations; (ii) each employee
benefit plan that is a "group health plan" subject to the
continuation coverage requirements of Section 4980B of the Code
and Part 6 of Title I of ERISA ("COBRA") that is maintained by
the Company has been operated and administered in substantial
compliance with such requirements; (iii) each Plan intended to be
tax-qualified under Section 401(a) of the Code has received a
favorable determination letter from the Internal Revenue Service
as to its tax-qualified status and nothing has occurred since the
date of such favorable determination letter which would adversely
affect the qualified status of such plan; (iv) all contributions
and premiums required to have been paid under or with respect to
any Plan have been timely paid; (v) Schedule 3.14 identifies each
Plan which provides life or health benefits to retired or other
terminated employees of the Company other than continuation
coverage required by COBRA or other applicable law, and the
Company has the ability to amend or terminate any such plan; (vi)
with respect to any Plan, no actions, suits or claims (other than
routine claims for benefits in the ordinary course) are pending
or overtly threatened, and no facts or circumstances exist which
could be reasonably expected to give rise to any such actions,
suits or claims; (vii) no Plan is currently under governmental
investigation or audit and to the Company's knowledge, no such
investigation or audit is contemplated or under consideration;
and (viii) to the Company's knowledge, no event has occurred and
no condition exists that could be reasonably expected to subject
the Company or any Plan to any material tax, fine, penalty or
other liability arising under, or with respect to, any Plan or
any employee benefit plan of any Person that is or was a member
of a controlled group with, under common control with, or
otherwise required to be aggregated with, the Company as set
forth in Section 414(b) or (c) of the Code.
(d) The Company does not maintain and has not in the
last five years maintained any Plan or any other employee benefit
plan which is subject to Title IV of ERISA.
(e) No Plan is a "multiemployer plan" within the
meaning of Section 3(37)(A) of ERISA, and the Company has no
outstanding liability with respect to any such plan (contingent
or otherwise).
(f) The Company has not engaged in a transaction which
has or could reasonably be expected to result in liability to the
Company under Section 4069 or 4212(c) of ERISA.
(g) Except as set forth in Schedule 3.14 or as
specifically contemplated by this Agreement, no Plan exists which
would result in the payment to any employee of any money or other
property or rights or accelerate or provide any other rights or
benefits to any employee of the Company solely as a result of the
transaction contemplated by this Agreement, whether or not such
payment would constitute a parachute payment within the meaning
of Section 280G of the Code.
3.15 Labor and Employment Matters. Except as set forth in
Schedule 3.15, there is no collective bargaining agreement or
other labor agreement to which the Company is a party or by which
the Company is bound. The Company has complied in all material
respects with all applicable laws relating to the employment of
the employees of the Company, including without limitation, those
related to wages, hours, collective bargaining and the payment
and withholding of taxes and have withheld and paid, or are
holding for payment not yet due, all amounts required to be
withheld from the employees of the Company and are not liable for
any material arrears of wages, taxes, penalties or other sums for
failure to comply with any of the foregoing. Except as set forth
on Schedule 3.15, there is no pending claim, arbitration,
investigation or similar proceeding against, the Company
pursuant to any statute, law, ordinance, rule or regulation
relating to employment, labor, affirmative action, anti-
discrimination or civil rights (including provisions thereof
relating to wages, hours, collective bargaining and the payment
of social security and similar taxes).
3.16 Tax Matters. The Company is now, and will remain, an
"S" corporation as defined in Section 1361(a) of the Code until
the consummation of the Merger, and has been an "S" corporation
since March 1, 1987. All tax returns and reports required to be
filed by the Company (or any other corporation merged into or
consolidated with the Company) on or before the Closing Date with
respect to all foreign, Federal, state, county and local income,
ad valorem, excise, sales, use, withholding, unemployment, social
security, value-added and other taxes ("Tax or Taxes") have been
duly and properly prepared, computed and timely filed by the
Company (or any other corporation merged into or consolidated
with the Company), taking into account all extensions granted or
filed with respect to such due dates, and all Taxes shown to be
due on such returns and reports by the Company (or any other
corporation merged into or consolidated with the Company) have
been timely paid, or are being contested in good faith. Schedule
3.16 lists all of the unpaid assessments for Taxes which the
Company (or any other corporation merged into or consolidated
with the Company) is presently contesting, together with penalty,
interest and deficiency assessments ("Contested Tax
Assessments"). The Shareholders represent that Allied shall have
no liability for the Contested Tax Assessments, except to the
extent reflected on the Closing Statement consistent with Section
2.7(a). Except for the taxes listed on Schedule 3.16, all Taxes
not yet due and payable by the Company with respect to periods
ending on or before April 30, 1997 have been properly accrued on
the books of account of the Company in accordance with GAAP and
all unpaid Taxes not yet due and payable by the Company with
respect to periods ending on or before the Closing Date will be
properly accrued on the Closing Statement in accordance with
GAAP. There are no known or proposed penalty, interest or
deficiency assessments in respect to Federal income Tax returns
or other Tax returns filed by the Company, except as set forth on
Schedule 3.16. The Company will file all presently unfiled Tax
returns and reports (including amended returns or reports) for
periods through the Effective Time using accounting methods and
practices consistent with past methods and practices.
3.17 Intellectual Property. Schedule 3.17 sets forth a true
and complete list of all patents, trademarks (registered or
unregistered), trade names, service marks and copyrights and
applications therefor (collectively, "Intellectual Property")
owned, used, held for use or filed by the Company, and all
agreements related thereto, in each case as are material to the
operation of the Business. Except as disclosed on Schedule 3.17,
the Company solely owns the Intellectual Property and, to the
knowledge of the Company, all trade secrets, technology and know-
how related to the Products or used or held for use in the
Business (collectively, "Know-How"), and, to the knowledge of the
Company, there are no claims pending or threatened against the
Company by any person with respect to the ownership, validity,
enforceability or use of any Intellectual Property or Know-How.
Except as set forth in Schedule 3.17, to the knowledge of the
Company, the Company has the right to use any such Intellectual
Property and Know-How without payment to a third party. Except
as disclosed on Schedule 3.17 , neither the Company nor the
Shareholders has licensed or otherwise granted to any third party
the right to use or exploit any of the Intellectual Property or
Know-How, or otherwise transferred or assigned any Intellectual
Property or Know-How to any third party. Except as set forth on
Schedule 3.17, neither the Company nor the Shareholders has any
knowledge that the conduct by the Company of its Business
infringes in any material respect on any valid intellectual
property rights of any other person or that there are any claims
pending or threatened with respect to any such infringement.
3.18 Material Agreements.
(a) Attached as Schedule 3.18 are true, correct and
complete copies of all Material Agreements of the Company.
(b) Each Material Agreement is valid and enforceable
in accordance with its terms, and there is no material default
under any Material Agreement by the Company or, to Shareholders'
knowledge, by any other party thereto, and no event has occurred
that with the lapse of time or the giving of notice or both would
constitute a material default thereunder.
3.19 Assets. The Company has title to, or leases or
licenses to use, all property material to the conduct of the
Business, as it is now conducted. The Company has good and
marketable title to all personal property and real property
reflected on the Reference Balance Sheet or acquired by it after
April 30, 1997, except for personal property disposed by it in
the ordinary course of business, free and clear of all Liens,
except Liens which are being contested in good faith, Liens set
forth in the Financial Statements or which secure Bank
Indebtedness, or which are listed on Schedule 3.19, mechanics',
workmen's, repairmen's, warehousemen's and carriers Liens arising
in the ordinary course of business, Liens that would be disclosed
by an accurate survey of the Company's real property, Liens for
easements or rights of way granted by the Company in connection
with the construction of any capital improvements after the date
hereof, and, with respect to personal property, immaterial liens
created by statute. All real property used by the Company is
either owned by it or leased under the terms contained in the
Material Agreements.
3.20 Insurance. Schedule 3.20 contains a complete and
correct list of all material insurance policies maintained by the
Company. The Company has delivered to Buyer complete copies of
all such policies together with all material riders and
amendments thereto. Such policies as of the date hereof are, to
the knowledge of the Company, in full force and effect. The
Company has complied in all material respects with the terms and
provisions of such policies. Schedule 3.20 sets out all claims
made by the Company under any policy of insurance during the last
three (3) years with respect to the Business.
3.21 Litigation and Product Terms.
(a) Except as set forth in Schedule 3.21, there is no
existing (or, to the knowledge of the Company, threatened)
litigation, arbitration, or other proceedings against the Company
or written claims which are material to the business, nor to the
knowledge of the Company is there any judgment, decree,
injunction, ruling or order of any court, governmental authority,
arbitrator or any other person which binds the Company.
(b) Schedule 3.21 includes copies of (i) the standard
terms and conditions for sale of the Products, which standard
terms and conditions are those generally used as of the date
hereof by the Company wherever possible and (ii) any material non-
standard terms and conditions applicable to particular customers
(and lists such customers). Except for claims made in connection
with returned Products or listed on Schedule 3.21, the Company
has no knowledge of any existing or threatened breach of any
express or implied warranty in connection with any Product sold
by the Company .
3.22 Inventory. The Reference Balance Sheet reflects the
Company's present cost basis (on an unaudited basis and without a
physical inventory) for all of the inventory of the Company used
or held for use in the operation of the Business as of April 30,
1997. Since the date of the Reference Balance Sheet, the
inventory has been maintained, and orders for inventory items
have been made, in the ordinary course of business. Except as
set forth on Schedule 3.22, the Company has not delivered any
inventory to any customer on consignment and no supplier has
delivered to it any inventory on consignment.
3.23 Customers. Schedule 3.23 contains a current and
complete list of the names and addresses of all customers of the
Business since July 1, 1996. Except as set forth on Schedule
3.23, neither the Company or the Shareholders have any knowledge
that any significant customer of the Company has ceased, or will
cease to use the Products of the Business, or has materially
reduced or will substantially reduce, the use of Products, of the
Business.
3.24 Suppliers. Schedule 3.24 sets forth the name and
address of all suppliers to the Company who are material to the
operation of the Business. For these purposes, a supplier is
material if it is, to the knowledge of the Company, a sole source
of the material supplied or a source that could not be replaced
except upon materially adverse terms and conditions.
3.25. Brokers and Finders. Neither the Shareholders nor
the Company have employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finder's fees in
connection with the transactions contemplated herein.
3.26. No Other Representations or Warranties. Except for
the representations and warranties contained in this Section 3,
the Company and the Shareholders (the "Sellers") make no
representation or warranty, express or implied, written or oral,
and Sellers hereby disclaim any such representation or warranty
(including without limitation any warranty of merchantability or
of fitness for a particular purpose), whether by Sellers or the
Company or any of their officers, directors, employees, agents or
representatives or any other Person, with respect to the Company
or the execution and delivery of this Agreement or the
transactions contemplated hereby, notwithstanding the delivery or
disclosure to Buyer, any Affiliate of Buyer or any of their
officers, directors, employees, agents or representatives or any
other Person of any documentation or other information by
Shareholders or the Company or any of their Affiliates, officers,
directors, employees, agents or representatives or any other
Person with respect to any one or more of the foregoing. Without
limiting the generality of the foregoing, neither the
Shareholders or the Company makes any representation or warranty
to Allied with respect to: (a) any projections, estimates or
budgets heretofore delivered to or made available to Buyer of
future revenues or expenses or expenditures, or future results of
operations; or (b) any other information or documents made
available to Purchaser or its counsel, accountants or advisors
with respect to the Company, except as expressly covered by a
representation and warranty contained in this Article III.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Allied represents and warrants to the Shareholders as
follows:
4.1 Organization and Authority. Allied is a corporation
duly organized, validly existing and in good standing under the
laws of Delaware. Allied has all requisite corporate power and
authority to execute and deliver this Agreement and to consummate
the transactions contemplated hereby. Except for filings under
the HSR Act, all necessary corporate action required to have been
taken by or on behalf of Allied to authorize (i) the approval,
execution and delivery on behalf of it of this Agreement and (ii)
the performance by it of its obligations under this Agreement and
the consummation of the transactions contemplated hereby has been
taken. Upon execution and delivery by Allied, the Agreement
shall constitute the valid and binding agreement of Allied,
enforceable against it in accordance with its terms, except (x)
as the same may be limited by applicable bankruptcy, insolvency,
moratorium or similar laws of general application relating to or
affecting creditors' rights, including without limitation, the
effect of statutory or other laws regarding fraudulent
conveyances and preferential transfers, and (y) for the
limitations imposed by general principles of equity.
4.2 Allied Common Stock. The shares of Allied Common Stock
to be issued to the Shareholders pursuant to the terms of this
Agreement, upon their issuance in accordance with the terms of
this Agreement, will be duly authorized, validly issued, fully
paid and nonassessable.
4.3 No Breach. The execution and delivery of this
Agreement by Allied does not, and the consummation of the
transactions contemplated hereby will not, (i) violate or
conflict with Allied's Certificate of Incorporation or Bylaws or
(ii) constitute a violation of any statute, law, ordinance, rule
or regulation.
4.4 Consents and Approvals. Neither the execution and
delivery of this Agreement by Allied, nor the consummation of the
transactions contemplated hereby, will require any consent,
approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority or any
other party, except (i) filings required under the Securities
Act, (ii) filings required under the Exchange Act, (iii) filings
required under state securities or "blue sky" laws and (iv)
filings required under the HSR Act.
4.5 SEC Reports; Financial Statements. Allied has filed
all required forms, reports and documents with the SEC since
December 31, 1996, each of which has complied in all material
respects with all applicable requirements of the Securities Act
and the Exchange Act, each as in effect on the dates such forms,
reports and documents were filed. Allied has heretofore
delivered to Shareholders, in the form filed with the SEC
(including any amendments thereto), (i) its Annual Reports on
Form 10-K for the fiscal year ended December 31, 1996, (ii) all
definitive proxy statements relating to Allied's meetings of
Shareholders (whether annual or special) held since December 31,
1996 and (iii) all other reports or registration statements filed
by Allied with the SEC since December 31, 1996. No such reports
or registration statements filed by Allied with the SEC since
December 31, 1996, when filed, contained any untrue statement of
a material fact or omitted to state a material fact necessary to
make the statements therein not misleading.
4.6 Brokers and Finders. Allied has not employed any
broker or finder or incurred any liability for any brokerage
fees, commissions or finder's fees in connection with the
transactions contemplated herein.
4.7 No Reliance. Buyer has conducted its own investigation
and examination of the Company and its assets, liabilities
(actual, accrued and contingent), condition (financial and
otherwise), businesses, operations, affairs and prospects based
primarily upon its own knowledge and experience and upon
information and data provided by the Shareholders and management
of the Company and the Buyer has such knowledge and experience,
and has consulted with such legal, financial and other
professional advisers to review such information and data, in
order to enable Buyer, based upon such information and data and
upon Buyer's own knowledge and experience and such professional
advice, as has been necessary to evaluate the merits and risks
associated with the Merger and the purchase of the Shares thereby
and the completion of the transactions contemplated hereby.
ARTICLE V
CERTAIN COVENANTS
5.1 Conduct of Business of the Company. Except as set
forth in Schedule 5.1, or otherwise expressly permitted by this
Agreement, during the period from the date hereof to the Closing,
the Company shall not, and the Shareholders shall cause the
Company not to, without the prior written consent of Buyer:
(a) amend its certificate of incorporation or bylaws;
(b) sell, deliver or agree or commit to issue, sell or
deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or
otherwise) any stock of any class or any other securities or
amend any of the terms of any securities or agreements to issue
securities outstanding on the date hereof;
(c) split, combine or reclassify any shares of capital
stock, declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any
combination thereof) in respect of its capital stock, except as
permitted by Section 5.13(a) hereof, or redeem or otherwise
acquire any of its securities;
(d) (i) create, incur or assume any indebtedness not
currently outstanding, except as permitted by Section 5.13
hereof, other than trade payables and indebtedness to
shareholders that will be repaid at or before the Closing, (ii)
assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the
obligations of any other person, or (iii) make any loans,
advances or capital contributions to, or investments in, any
Person;
(e) acquire any assets except in the ordinary course
of business or pursuant to capital expenditures planned on the
date hereof or sell, lease or dispose of any assets, other than
in the ordinary and usual course of business consistent with past
practice;
(f) subject any of its properties or assets, tangible
or intangible, to any Lien, except in connection with Bank
Financing under Section 5.13 hereof or as permitted under Section
3.19 hereof;
(g) enter into any license with any third party for
any Intellectual Property or cease to reasonably safeguard any
Know-How;
(h) enter into any contract or other commitment for
the expenditure of more than $10,000, except expenditures in the
ordinary course of business in accordance with past practice or
expenditures consistent with the planned capital expenditures of
the Company existing on the date hereof and disclosed to the
Buyer;
(i) fail to continue to meet its obligations in all
material respects under all contracts to which it is a party or
fail to pay its obligations as they mature in the ordinary course
of business;
(j) fail to exercise good faith, reasonable efforts to
(i) maintain in all material respects, the Business intact, (ii)
retain the present employees, or (iii) preserve in all material
respects, the good relations of its suppliers, customers and
others with whom it has business relations;
(k) fail to maintain its assets in good working order
and repair in all material respects;
(l) consistent with past practice, fail to account
for, make appropriate filings with respect to, and pay all Taxes,
assessments and other governmental charges, as they become due,
except for Taxes, or assessments and other governmental charges
being contested in good faith;
(m) except as otherwise set forth in this Agreement
and except for increases in the ordinary course or those required
under any existing or new collective bargaining agreement,
increase the amount of compensation or benefits payable or
available or to become payable or available to any employee of
the Company and refrain from making or declaring any bonus
payment to any such employee;
(n) except as required by any existing labor
agreements or the expiration of such agreements, enter into any
labor agreement or into negotiations regarding any labor
agreement with any union; or
(o) incur any expenditures or expense in connection
with the execution, delivery or closing of this Agreement, nor
pay any such expenditures or expense, such as legal and
accounting fees for the transactions, or other matters
indemnified under Section 6.1(a)(iii)-(vi) such as the payment of
Contested Taxes and ISRA compliance costs plus the payment for
existing air pollution fines, except for the accounts payable or
reserves relating thereto reflected on the Closing Statement as
of July 31, 1997 which result in a reduction of Net Working
Capital;
5.2 Updated Schedules. At the Closing, Shareholders shall
deliver to Allied Schedules showing any changed facts or
circumstances from the matters disclosed in each of the Schedules
in which the Company or the Shareholders make disclosures
pursuant to Article III. For the purpose of determining the
satisfaction of the condition in 7.3(a), no supplement to the
Shareholders Disclosure Schedule shall cure or correct any
representation and warranty which was untrue when made, but shall
enable the disclosure of subsequent facts of events to maintain
the truthfulness of any representation and warranty.
5.3 Public Announcements. No party shall disclose the
existence or terms of this Agreement, without the consent of the
other parties hereto, except as otherwise required by law. The
parties shall cooperate to inform promptly the employees of the
Company after the execution of this Agreement.
5.4 Consents. Except as otherwise set forth in this
Agreement, prior to the Closing, the Shareholders shall obtain,
or cause the Company to obtain, all waivers, licenses,
agreements, permits, consents, approvals or authorizations of
third Persons which are material to the operation of the
business, or any modifications or amendments to existing Material
Agreements with third Persons that are required to be obtained by
the Shareholders or the Company as a consequence of the
transactions contemplated by this Agreement in a form acceptable
to Shareholders.
5.5 Hart-Scott-Rodino Antitrust Improvements Act. Each of
the parties hereto shall each promptly make required filings with
the Federal Trade Commission ("FTC") and U.S. Department of
Justice ("DOJ") pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act") (including,
without limitation, responses to requests for additional
information). The parties shall not consummate the transactions
contemplated by this Agreement unless and until all applicable
waiting periods under the HSR Act have expired or are otherwise
terminated and shall use good faith efforts to demonstrate that
such transactions should not be opposed by the FTC or DOJ.
5.6 Industrial Site Recovery Act.
(a) The Company shall have the responsibility,
pursuant to the terms of this Section 5.6, for compliance with
Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et seq. ("ISRA"),
including but not limited to giving the appropriate notice of
this Agreement to the New Jersey Department of Environmental
Protection ("NJDEP") within five (5) days of the date hereof. In
order to facilitate the closing, Company will deliver a copy to
Shareholders and the Buyer on or before the Closing Date of a
remediation agreement on a standard form between the Company and
NJDEP (the "Remediation Agreement"), which shall have as its
purpose the evidencing of NJDEP's approval of the transaction(s)
contemplated by this Agreement as the same relates to the real
property owned, leased or otherwise used by Company
(collectively, the "Premises") as required by ISRA. On the
Closing Date, the Company agrees to execute the Remediation
Agreement and Allied shall be financially responsible for all
financial assurances required by NJDEP and Allied agrees to
provide the Remediation Agreement and such documents as are
necessary to establish the financial assurance within the time
frames required by NJDEP.
(b) Prior to the Closing Date, the Company shall,
after prior consultation with and approval by Allied (which
approval shall not be unreasonably withheld), conduct such
activities as may be necessary or useful, in the time period
allotted, to develop an ISRA Preliminary Assessment Report, Site
Investigation Report or Remedial Investigation Workplan for each
property identified as being subject to the Remediation
Agreement. The Company shall conduct all such activities
pursuant to the requirements/guidelines set forth in the
Technical Requirements For Site Remediation, including the
provisions regarding variances, N.J.A.C. 7:26E ("Technical
Requirements"). The Company shall promptly provide Allied with
copies of all reports, data, correspondence, notices or similar
documents generated by or on behalf of the Company in connection
with these activities and received or sent by the Company from or
to NJDEP or any other governmental agency in connection with
these activities. Except for the notice identified in Section
5.6(a) above, no written submissions related to these or any
other ISRA related activities shall be made by the Company to
NJDEP without Allied's prior review and approval, which approval
shall not be unreasonably withheld. It shall be deemed
unreasonable to disapprove any plan, report, notice, submission
or similar documents for any reason unless the same does not
comply with the Technical Requirements and is not consistent with
the reasonable practice and experience of environmental
consultants and engineers having experience in ISRA compliance.
(c) After the Closing Date, Allied agrees to implement
the terms of the Remediation Agreement with the objective of
obtaining a No Further Action Letter issued by NJDEP for each
property subject to the Remediation Agreement and the
Shareholders shall, only to the extent of the Allied Common Stock
held by the Escrow Agent and pursuant to the Escrow Agreement and
Article VI of this Agreement, reimburse Allied for its reasonable
out-of-pocket expenses (excluding compensation paid to employees
of Buyer) incurred in connection with such implementation of the
Remediation Agreement (the "Remediation Costs"). Allied shall
conduct all activities required by the Remediation Agreement
pursuant to the minimum requirements/guidelines set forth in the
Technical Requirements. In the event that clean up of soil
and/or groundwater is required for a property subject to the
Remediation Agreement, Allied shall use its best efforts to
perform such clean up to the least stringent standards proposed,
adopted or recommended by NJDEP for the remediation of soils
and/or groundwater. Allied acknowledges that in the event
contamination to the groundwater is to remain, in lieu of or in
addition to remediating such contamination, Allied shall, if
required by NJDEP, request that NJDEP reclassify the property
subject to the Remediation Agreement as a classification
exemption area from and after the Closing.
(d) Prior to making any submission to NJDEP required
by the Remediation Agreement, Allied shall present to
Shareholders a reasonably detailed statement identifying the
activity proposed and a reasonably detailed cost estimate of same
for Shareholders' prior review and approval in accordance with
the procedure set forth below in this Section 5.6 (d), which
approval shall not be unreasonably withheld; provided, however,
that Allied's obligation to so notify and obtain the
Shareholders' approval shall continue for only so long as the
Escrow exists. In the event the submission and/or cost estimate
is not satisfactory to Shareholders, Shareholders shall so notify
Allied in writing of its objections to and comments on the same
within 30 days of Shareholders' receipt of the submission or
estimate. Provided the written objection of Shareholders is (1)
timely provided to Allied, (2) reasonably supportable by the
Technical Requirements and other cost estimates, (3) consistent
with the Requirements of the Remediation Agreement and (4)
consistent with reasonable practice and experience of
environmental consultants and engineers having expertise in the
development and implementation of submissions and cost estimates
under ISRA, the submission and/or cost estimate shall be revised
as necessary by Allied to incorporate said comments. Upon
submission to NJDEP or any governmental agency of any written
report, data, correspondence, submissions and/or notices with
respect to the ISRA compliance and submission to or receipt from
NJDEP or any governmental agency of any written correspondence,
notices, reports, etc. related thereto, Allied shall promptly
provide Shareholders with copies of same; provided, however, that
Allied's obligation to so provide the Shareholders with such
information shall continue for only so long as the Escrow exists.
Upon the completion of the terms and conditions of the
Remediation Agreement and the receipt by Allied of a No Further
Action Letter issued by NJDEP for all property subject to the
Remediation Agreement, Allied shall provide Shareholders with a
copy of such No Further Action Letter.
(e) Allied shall indemnify Shareholders for any fines,
penalties, or out-of-pocket costs related thereto (hereafter
"Fines and Penalties") which result from Allied's acts or
omissions after the Closing in connection with the requirements
set forth in the Remediation Agreement, and the Shareholders
shall indemnify Allied for any Fines and Penalties which result
from the Company's acts or omissions prior to Closing in
connection with the implementation of the activities required of
Company under Sections 5.6(a) and (b) above. Neither Allied on
the one hand or the Shareholders on the other, shall be
responsible for any consequential damages resulting from business
interruption in connection with the remediation efforts of the
Company and Allied, except that Friedman acknowledges that such
remediation efforts may adversely effect his incentive
compensation under his retention agreement if sales goals are not
met.
(f) Subject to the provisions of Article VI, the
provisions of this Section 5.6 shall survive the Closing.
5.7 Further Assurances. Each of the parties hereto shall
execute such documents and other instruments and take such
further actions as may be reasonably required or desirable to
carry out the provisions hereof and to consummate the
transactions contemplated hereby or, at and after the Closing, to
evidence the consummation of the transactions contemplated by
this Agreement. Upon the terms and subject to the conditions
hereof, each of the parties hereto shall take or cause to be
taken all actions and to do or cause to be done all other things
necessary, proper or advisable to consummate and make effective
as promptly as practicable the transactions contemplated by this
Agreement and to obtain in a timely manner all necessary waivers,
consents and approvals and to effect all necessary registrations
and filings.
5.8 Provision of Records; Records Retention.
(a) On the Closing Date, the Shareholders shall, or
shall cause the Company to, deliver to Buyer all minute books and
stock ownership records of the Company and all original
agreements, documents, books, records and files, relating to the
business and operations of the Business and the Company.
(b) After the Closing, upon reasonable advance written
notice, Allied and the Shareholders agree to furnish or cause to
be furnished to each other during normal business hours,
information relating to the Company as is necessary for financial
reporting and accounting matters, the preparation and filing of
any Tax returns, reports or forms, or for the defense of any Tax
claim or assessment.
(c) Pending the Closing, the Company and Shareholders
shall provide Buyer and its representatives with reasonable
access to the Company's operations and records, during normal
business hours.
(d) During the period from the date hereof to the
Closing, all information provided to Buyer or its representatives
by or on behalf of Sellers or the Company, or their
representatives (whether pursuant to this Section 5.8 or
otherwise) will be governed and protected by the Confidentiality
Agreement.
(e) On or before the Closing and without cost to the
Buyer, Marks shall transfer to the Company by a quit claim deed
his half interest in the real property used by the Company and be
indemnified by the Company for any claims arising out of or
related to such real estate and Friedman shall transfer (by bill
of sale without warranty) to the Company the equipment used by
the Company and owned by Loumar and shall be indemnified for any
claims relating to the equipment.
5.9 Employee Matters.
(a) Post-Closing Obligations to Employees. Effective
immediately after the Closing Date, Buyer will employ all the
Company's employees employed on the Closing Date (the
"Employees"), and will continue their compensation and benefits,
but as soon as practical after the Closing, will provide them
with the benefits as set forth in Schedule 5.9; provided,
however, that this Section shall not be construed as guaranteeing
employment to any particular employee and provided further that
this Section shall not be construed to govern the benefits of
union Employees whose benefits and wages shall be governed by the
applicable collective bargaining agreement. Buyer shall assume
the collective bargaining agreements applicable to the Company's
union Employees.
(b) Pension Benefit Plans With Respect to Non-Union
Employees. Effective as soon as practical after the Closing
Date, all non-union Employees shall be eligible to participate in
AlliedSignal Employee Retirement Program (previously relating to
Allied Salaried Employees) ("Buyer's Retirement Plan") in
accordance with the terms of such plan. Service completed by the
non-union Employees while employed by the Company shall be
recognized for purposes of determining eligibility to
participate, eligibility for early retirement benefits and
vesting, but not for purposes of benefit accrual, under Buyer's
Retirement Plan.
Effective as soon as practical after the Closing Date,
all non-union Employees shall be eligible to participate in the
AlliedSignal Savings Plan ("Buyer's Savings Plan") in accordance
with the terms of such plan. Service completed by the non-union
Employees while employed by the Company shall be recognized for
purposes of determining eligibility to participate and vesting of
benefits, unless otherwise specified on Schedule 5.9. The
Company maintains the Gomar Manufacturing Co., Inc. Savings Plan
and the National Metalizing 401(k) Plan ("Company's Savings Plans
"). As soon as practicable after the Closing Date, the Company
shall transfer the assets and liabilities attributable to the non-
union Employees in the Company's Savings Plans to the Buyer's
Savings Plan in cash, provided, however, that any loans shall be
transferred in-kind. The Buyer shall furnish the Shareholders
with copies of the favorable determination letters with respect
to the Buyer's Savings Plans in connection with the transfer.
(c) Welfare Benefit Plans With Respect to Non-Union
Employees. Buyer maintains medical, retiree medical, dental,
vacation, severance, life insurance, accidental death and
dismemberment, short-term disability and long-term disability
benefit plans ("Buyer's Welfare Plans") for its employees, as set
forth on Schedule 5.9. As soon as practical after the Closing
Date, all of the Company's non-union Employees shall be eligible
to participate in Buyer's Welfare Plans in accordance with the
terms of such plans and employment with the Company shall be
taken into account for purposes of determining eligibility to
participate in Buyer's Welfare Plans and for determining benefits
under all Buyer's Welfare Plans except retiree medical; provided,
however, that the non-union Employees shall participate in the
Buyer's Welfare Plans (i) without any waiting periods and without
any evidence of insurability; and (ii) Buyer shall count claims
arising prior to the Closing Date for purposes of satisfying
deductibles, out-of-pocket maximums and other similar
limitations.
Buyer shall assume coverage for any legally-mandated
continuation of health care coverage for former employees and/or
their covered dependents who had a loss of health coverage due to
a qualifying event that occurred prior to the Closing Date, and
shall be responsible for coverage for any legally-mandated
continuation of health care coverage for Employees and/or their
covered dependents who have a loss of health coverage due to a
qualifying event that occurs on or after the Closing Date. Buyer
shall assume all responsibility for providing Certificates of
Coverage to affected Employees on or after the Closing Date in
accordance with HIPAA. The Company shall make its records
available to the Buyer for this purpose.
(d) Stay on Bonuses. Buyer shall pay the Employees
set forth in Schedule 5.9(d) stay-on bonuses in the amount and
form set forth in such schedule, provided the Employee remains
with the Buyer for a period of time following the Closing Date,
as set forth on Schedule 5.9(d). The payment of such bonuses
shall be the responsibility of Buyer and no accrual for such
amounts shall be required on the Closing Statement. In addition,
after the date hereof the Company shall enter into an Agreement
with Howard Friedman in the form of Exhibit F, which the Buyer
will assume at Closing and perform thereafter. Payments
thereunder, if and when required, shall be in the responsibility
of Buyer and no accrual for such amounts shall be required on the
Closing Statement.
(e) Deferred Compensation Arrangement. Buyer
acknowledges that the Company has established a Deferred
Compensation Plan for the benefit of eligible Employees. Buyer
shall assume such plan as of the Closing Date without prejudice
to its right to amend or terminate it in accordance with its
terms. Prior to the Closing, the Company shall have the right to
either terminate the Plan or amend the Plan to provide for full
vesting upon Plan termination for any employees who remain with
the Company at the time of termination.
(f) No Rights to Continued Employment. Nothing herein
is intended to confer upon any continued employee any rights or
remedies of any nature or kind, including, without limitation,
any rights of employment with Buyer for a specified period of
time.
5.10 Registration of Buyer's Common Stock. Allied and the
Shareholders agree, as of the Closing, to enter into a
Registration Rights Agreement in the form of that contained as
Exhibit E. At the time the Shareholders receive their Allied
Common Stock, the shares will be listed on the New York Stock
Exchange.
5.11 Resignations. On the Closing Date, the Shareholders
shall cause to be delivered to Allied duly signed resignations,
effective immediately after the Closing, of each of them as
directors of the Company and shall take such other action as is
necessary to accomplish the foregoing.
5.12 Risk of Loss. During the period from the date of this
Agreement to July 31, 1997, the risk of loss or damage to any of
the Company's assets shall be borne by the Shareholders, provided
that if at or prior to the Closing, all or any material part of
such assets are destroyed or damaged and cannot be repaired or
replaced in 60 days or less, then Allied shall have the option,
exercisable in writing, to terminate this Agreement and
Shareholders shall have no liability for such loss if the Closing
occurs.
5.13 Distributions to Shareholders of Cash and Marketable
Securities; Bank Indebtedness.
(a) The Company may, prior to the Closing, distribute
to the Shareholders cash, cash equivalents including the
insurance policy on the life of Paul Marks and/or marketable
securities existing in or generated by the Company prior to the
Closing Date. The amount of such distributions may not exceed
the AAA Account of the Company as of 11:59 p.m. July 31, 1997
(the "Maximum Amount"). To the extent that the Company has
available cash, after the payment of such dividends, it shall
repay all indebtedness owed to third parties at or before the
Closing.
(b) To the extent that the Company will not have cash
available to pay for the construction of capital improvements
consisting of buildings, improvements or equipment or make
distributions equal to the AAA Account of the Company as of the
Closing, the Company after the date hereof may borrow money from
a bank and may secure such borrowing with Company assets, upon
prior written notice to the Buyer, in an amount sufficient to
permit the Company to pay for such capital improvements or to
distribute the Maximum Amount to the Shareholders at or before
Closing and at the Closing such indebtedness (such indebtedness,
together with bank indebtedness shown on the Reference Balance
Sheet which remains outstanding as of the Closing Date, is
referred to herein as "Bank Indebtedness"). At the Closing Date,
the Buyer shall cause any such bank to provide to the
Shareholders a written release of any personal pledge of assets
and/or the personal guarantee of the Shareholders. No Bank
Indebtedness shall have any prepayment penalty unless such
penalty is included as a liability on the Closing Statement.
Other than Bank Indebtedness, the Company will have no
indebtedness for borrowed money as of the Closing Date.
5.14. Consents; Cooperation. Subject to the terms and
conditions hereof, Sellers and Buyer will use their reasonable
efforts:
(a) to obtain prior to the earlier of the date
required (if so required) or the Closing Date, all
authorizations, consents, orders, permits or approvals of, or
notices to, or filings, registrations or qualifications with, any
governmental, administrative or judicial authority or any other
Person that are required on their respective parts, for the
consummation of the transactions contemplated by this Agreement,
provided that Sellers and Buyer, as the case may be, will use
their reasonable efforts to make or obtain the authorizations,
consents, orders, permits, approvals, notices, filings,
registrations and qualifications;
(b) to defend, consistent with applicable principles
and requirements of law, any lawsuit or other legal proceeding,
whether judicial or administrative, whether brought derivatively
or on behalf of third persons (including governmental
authorities) challenging this Agreement or the transactions
contemplated hereby;
(c) to furnish to each other such information and
assistance as may reasonably be requested in connection with the
foregoing; and
(d) to take, or cause to be taken, all action and to
do, or cause to be done, all things reasonably necessary, proper
or advisable under applicable laws and regulations to consummate
and make effective the transactions contemplated by this
Agreement.
5.15. Additional Agreement. Notwithstanding the provisions
of Section 5.14(a) hereof, Buyer will not be obligated to dispose
of any portion of its business to eliminate any concern on the
part of any court or government authority regarding the legality
of the proposed transactions contemplated hereby under applicable
antitrust and other laws and regulations regarding competition.
5.16. Notification of Certain Matters. Between the date
hereof and the Closing, the Company and Buyer will give prompt
notice in writing to the other of: (i) any information known to
the Company or Buyer that indicates that any representation or
warranty of the Company or Buyer, as the case may be, contained
herein will not be true and correct in any material respect as of
the Closing and (ii) the occurrence of any event known to the
Company or Buyer which will result, or has a reasonable prospect
of resulting, in the failure to satisfy a condition specified in
Section 7 hereof.
5.17. Actions to Preserve Tax-Free Reorganization
Treatment. Before the Effective Time, neither the Buyer nor the
Shareholders shall intentionally take or fail to take any action
within its control which would disqualify the Merger as a
"reorganization" within the meaning of Section 368(a) of the
Code. Subsequent to the Effective Time, neither the Buyer nor
the Shareholders shall take any action within their control that
would disqualify the Merger as a reorganization under the Code.
Nothing contained in this Section shall restrict the ability of
the Shareholders to sell or transfer Allied Common Stock unless
such sale or transfer would, in the opinion of counsel to the
Shareholders, cause the Merger not to qualify as a tax-free
reorganization under the Code.
ARTICLE VI
INDEMNIFICATION
6.1 Indemnification by Shareholders.
(a) Obligation to Indemnity. The Shareholders,
subject to the limitations set forth in this Section 6.1, shall
indemnify Buyer against any and all Losses suffered or incurred
by Buyer after the Closing Date, except and to the extent a Loss
is recoverable by Buyer under any applicable insurance policies
(only to the extent that insurance policies exist at the time of
Closing or thereafter and then excluding self-insured retentions,
deductibles and reimbursements to such insurance carrier) or
reserved against on the Closing Statement, arising from or
relating to (i) any breach of any representation or warranty made
by the Shareholders or the Company in this Agreement, (ii) any
breach of any covenant made by the Shareholders or the Company in
this Agreement, (iii) any liability the Buyer may have after the
Closing for Contested Tax Assessments listed in Schedule 3.16;
(iv) for Remediation Costs under Section 5.6(b) and (c) and
Fines and Penalties under Section 5.6(e); (v) the Losses of Buyer
incurred after the Closing in connection with Third Party claims
listed on Schedule 6.1; and (vi) Losses of Buyer resulting from
Environmental Damage which arises from any real property or
properties formerly owned or operated by the Company, or any
predecessor of the Company, but no longer owned or operated by
the Company at Closing
(b) Cap. Notwithstanding anything to the contrary in
this Agreement, the aggregate liability of Shareholders pursuant
to Subsections 6.1(a)(i)-(vi) will not exceed the Escrow Market
Value of the Escrowed Initial Shares, and will be paid by
withdrawing Allied Common Stock from the Escrow Account and
returning it to Allied at the Escrow Market Value; provided,
however, that this limitation shall not apply to (i) a breach of
the Shareholders' representation and warranty contained in
Section 3.2, for which the aggregate liability of Shareholders
shall in no event exceed the consideration received by them, or
(ii) any liability greater than $200,000 which the Buyer may have
after the Closing for Contested Tax Assessments listed in
Schedule 3.16.
(c) Survival. The representations, warranties and
covenants of the Company and the Shareholders in this Agreement
shall survive the Closing but only to the extent set forth in
this Section 6.1 (c). Buyer may make no claim for
indemnification pursuant to Subsections 6.1(a)(i)-(vi) unless
notice of such claim (describing the basic facts or events which
support the claim) has been given to Shareholders within three
years from the date of Closing. Notwithstanding anything herein
to the contrary, the limitations set forth in this Subsection 6.1
(c) shall not apply to Losses incurred by reason of a breach of a
representation and warranty contained in Section 3.2.
(d) Basket. Buyer may make no claim for
indemnification pursuant to Subsection 6.1(a)(i)-(vi) until such
claims for which Losses are otherwise covered hereunder by Buyer
are in excess of the aggregate of $100,000 (excluding Losses to
the extent recoverable by Buyer under any applicable insurance
policy and all reserves and accruals related thereto reflected on
the Financial Statements or the Closing Statement) and then only
for the amount which exceeds $100,000. Notwithstanding anything
herein to the contrary, the limitations set forth in this
Subsection 6.1 (d) shall not apply to Losses incurred by reason
of a breach of a representation and warranty contained in Section
3.2.
(e) Adjustment of Purchase Price. Any reimbursement
by Shareholders in connection with a claim made by Buyer pursuant
to Subsections 6.1(a)(i)-(vi) will be deemed an adjustment in the
Purchase Price and shall occur solely by the Buyer redeeming the
Escrowed Shares in accordance with the provisions of this
Agreement and the Escrow Agreement; provided that the limitation
set forth in this Subsection 6.1(e) shall not apply to Losses
incurred by the Buyer by reason of (i) a breach of the
representation and warranty contained in Section 3.2, or (ii) a
Loss with respect to Contested Tax Assessments in excess of
$200,000.
(e) No Other Claims. The rights of the Buyer under
this Section 6.1 shall be the exclusive remedy of the Buyer with
respect to breaches by Shareholders of any representation,
warranty or covenant contained in this Agreement. Buyer, on
behalf of itself and its Affiliates (and its shareholders,
partners, officers, directors and employees), hereby waives and
releases each of the Shareholders and their respective Affiliates
(and their shareholders, partners, officers, directors and
employees) from any statutory or other rights of contribution or
indemnity (except as set forth in this Section 6.1) with respect
to Shareholders' ownership of the Shares or operation of, or
otherwise relating to, the Company.
6.2 Indemnification by Buyer.
(a) Obligations to Indemnify. The Buyer, subject to
the limitations set forth in this Section 6.2, shall indemnify
Shareholders against any and all Losses suffered or incurred by
Shareholders, except and to the extent a Loss is recoverable by
either of the Shareholders under any applicable insurance
policies (excluding any deductibles or self-insured retentions),
arising from or relating to (i) any breach of any representation
or warranty made by the Buyer in this Agreement or in any
certificate, instrument or other document delivered pursuant
hereto, (ii) any breach of any covenant made by the Buyer in this
Agreement, (iii) the operations of the Company or Allied after
the Closing Date, and (iv) the operations of the Company prior to
the Closing and for which Shareholders would have been
indemnified and advanced expenses by the Company as directors or
officers of the Company if such indemnification and advancement
of expenses by the Company were mandatory under the provisions of
the New Jersey Business Corporation Act; and (v) Fines and
Penalties under Section 5.6(e).
(b) Notwithstanding anything to the contrary in this
Agreement, the aggregate liability of Buyer pursuant to
Subsection 6.2(a)(i) or (ii) will not exceed $2,000,000;
provided, however, that this limitation shall not apply to any
Loss suffered by the Shareholders as a result of the breach by
Allied of (i) its representations in Section 4.2 or the last
sentence of Section 4.5 or (ii) of its covenants contained in
Section 5.10 (or the Registration Rights Agreement) or 5.17 (the
limitations contained in this proviso being referred to as the
Share Representations and Covenants).
(c) Survival. The representations, warranties and
covenants of the Buyer contained in this Agreement shall survive
the Closing. However, Shareholders may make no claim for
indemnification pursuant to Subsection 6.2(a)(i) unless notice of
such claim describing the basic facts or events giving rise to
the claim has been given to Buyer within three years from the
date of Closing. Shareholders may make no claim for
indemnification pursuant to Subsection 6.2(a)(i) until such
claims for which Losses are otherwise covered hereunder by
Shareholders are in excess of the aggregate of $100,000
(excluding Losses to the extent recoverable by either of the
Shareholders under any applicable insurance policy), and then
only for the amount which exceeds $100,000; provided, however
that this limitation shall not apply to the Share Representations
and Covenants.
(d) The rights of the Shareholders under this Section
6.2 shall be the exclusive remedy of the Shareholders with
respect to breaches by Buyer of any representation, warranty or
covenant contained in this Agreement (excluding the collateral
agreements such as Registration Rights Agreement, the Friedman
Retention Agreement, and the Marks Consulting Agreement). This
limitation shall not preclude any claim by the Shareholders under
federal or state securities laws. Subject to the limitations
described above and as otherwise expressly stated in this
Agreement, Shareholders, on behalf of themselves and their
respective Affiliates (and their shareholders, partners,
officers, directors and employees), hereby waive and release the
Buyer and its Affiliates (and its shareholders, partners,
officers, directors and employees) from any statutory or other
rights of contribution or indemnity (except as set forth in this
Section 6.2) with respect to Buyer's purchase of the Shares, or
otherwise relating to the transactions contemplated by this
Agreement.
6.3 Indemnification Procedure.
(a) Any party seeking indemnification hereunder (the
"Indemnitee") shall notify the party liable for such
indemnification (the "Indemnitor") in writing of any event,
omission or occurrence which the Indemnitee has determined has
given or could give rise to Losses which are indemnifiable
hereunder (such written notice being hereinafter referred to as a
"Notice of Claim"). Any Notice of Claim shall be given promptly
after the Indemnitee becomes aware of such event, omission or
occurrence. Except with respect to claims governed by the
limitations contained in Subsections 6.1(c) and 6.2(c), the
failure of any Indemnitee to give notice as provided in this
Section 6.3 shall not relieve the Indemnitor of its obligations
hereunder, except to the extent that the Indemnitor is actually
prejudiced by such failure to give notice. A Notice of Claim
shall specify in reasonable detail the nature and any particulars
of the event, omission or occurrence giving rise to a right of
indemnification.
(b) This indemnity is conditioned upon and subject to
Indemnitee giving its full cooperation in complying with any
applicable foreign, federal, state or local laws, rules or
regulations or any discovery or testimony necessary to
effectively carry out Indemnitor's obligations hereunder. Such
cooperation shall be without charge to the Indemnitor.
6.4 Claims by Third Parties. If a party to this Agreement
seeks indemnity hereunder with respect to a claim by a third
party:
(a) For the purposes of this Section 6.4, "Third Party
Claim" means any demand which has been made on, or communicated
to Buyer or the Shareholders by or on behalf of any Person other
than the Buyer or Shareholders and which, if maintained or
enforced, might result in a claim for indemnification in the
nature described in Sections 6.1 or 6.2 of this Agreement being
made.
(b) Promptly upon receipt by Indemnitee of notice of
any Third Party Claim in respect of which the Indemnitee proposes
to demand indemnification from another party to this Agreement,
the Indemnitee shall forthwith give notice to that effect to the
Indemnitor.
(c) The Indemnitor shall have the right, exercisable
by giving notice to the Indemnitee not later than 30 days after
receipt of the notice described in Subsection 6.1(c) or 6.2(c)
for claims covered by those Subsections, and otherwise promptly,
as described in 6.4(b) hereto, as the case may be, to assume the
defense of the Third Party Claim.
(d) Upon the assumption of the defense by the
Indemnitor as aforesaid, the Indemnitor shall, at its expense,
diligently proceed with the defense of the Third Party Claim at
the Indemnitor's sole expense, including employment of counsel
satisfactory to the Indemnitee. In connection therewith, so long
as the Indemnitor is defending in good faith any such Third Party
Claim, the Indemnitee shall cooperate fully, but at the expense
of the Indemnitor, to make available to the Indemnitor all
pertinent information and witnesses under Indemnitee's control
and to make such assignments and take such other steps as in the
opinion of counsel for the Indemnitor are necessary to enable the
Indemnitor to conduct such defense, provided always that the
Indemnitee shall be entitled to reasonable security from the
Indemnitor for any expense, costs or other Liabilities to which
it may be or may become exposed by reason of such cooperation.
The Indemnitee shall have the right, but not the obligation, to
participate, at its own expense, in the defense thereof through
counsel of its own choice, and shall have the right, but not the
obligation, to assert any and all allowable crossclaims or
counterclaims it may have pursuant to this Article.
(e) With respect to the defense of a Third Party Claim
undertaken by an Indemnitor, any compromise or settlement of such
Third Party Claim by Indemnitor which would result in a payment
obligation of, or injunctive relief against the Indemnitee, shall
not be made or effective against Indemnitee without the prior
written consent of the Indemnitee.
(f) Should the Indemnitor fail to give notice to the
Indemnitee as provided in clause (c) hereof, or in the event the
Indemnitor fails to defend, contest or otherwise protect against
any Third Party Claim, the Indemnitee shall have the right, but
not the obligation, to defend, contest, or to otherwise protect
against the same, provided that the Indemnitee shall keep the
Indemnitor reasonably advised as to the current status and
progress thereof. The Indemnitee shall have the right, but not
the obligation, to make any compromise or settlement of any such
Third Party Claim, and, to the extent it is determined that the
Indemnitor is liable for the Loss in connection therewith, the
Indemnitee shall be entitled to all amounts paid as a result of
such Third Party Claim or any compromise of settlement thereof,
provided, however, that any such compromise or settlement which
would result in a payment obligation of or injunctive relief
against Indemnitor shall not be made or effective against
Indemnitor without the prior written consent of Indemnitor which
shall not be unreasonably withheld.
(g) From and after delivery of the notice referred to
in Section 6.4(c) above, the Indemnitor shall be relieved of the
obligations to reimburse the Indemnitee for any other legal,
accounting or other out-of-pocket costs and expenses thereafter
incurred by the Indemnitee with respect to the defense of such
claim, action or proceeding notwithstanding any participation by
the Indemnitee therein.
(h) If the Indemnitee subsequently recovers all or
part of the Third Party Claim from any other Person legally
obligated to pay the claim, the Indemnitee shall forthwith repay
to the Indemnitor the amounts recovered up to an amount not
exceeding the payment made by the Indemnitor to the Indemnitee by
way of indemnity.
(i) If Shareholders incur any costs or pays any Losses
of Buyer in connection with a Third Party Claim arising under
Subsections 6.1(a)(i)-(iii), except to the extent that the
Shareholders as Indemnitee under Section 6.4(g) should bear their
own costs, the Shareholders shall have an immediate right to have
released to them, from the Escrow Account, an amount of money
equal to Allied Shares valued at the Escrow Market Value to
reimburse them for such costs or for the payment of such Losses.
The Shareholders' obligations under Section 6.4 remain limited by
Sections 6.1 and 6.3. Buyer's obligations under Section 6.4
remain limited by Sections 6.2 and 6.3.
6.5 Procedures With Respect to Indemnified Losses of
Shareholders. With respect to any claims existing on the date
hereof or which result in Third Party Claims prior to Closing for
which the Shareholders are required to indemnify Buyer pursuant
to Section 6.1 hereof, Allied after the Closing shall cooperate
with the Shareholders in defending any such claim and promptly
advise Shareholders of developments or Shareholders shall
continue to control such claims as the Buyer and Friedman may
agree; provided however, with respect to Contested Taxes the
Shareholders shall control the matter and with respect to the
litigation listed on Schedule 6.1 or any other litigation arising
before Closing if Allied determines to control such matters by
appointing new counsel different than Company's prior counsel,
the costs of such new counsel shall not be a Loss or expense for
which Shareholders are obligated to indemnify Buyer hereunder.
Provided, however, Allied based on a change in circumstances and
after consultation with the Shareholders may appoint new counsel
if Allied agrees in writing to absorb all of the expenses
incurred by new counsel in learning the facts and the law
involved in the case and any other costs of the change in counsel
without seeking indemnification for such expenses from the
Shareholders.
ARTICLE VII
CONDITIONS TO CLOSING
7.1 Conditions to the Obligations of the Company, the
Shareholders and Allied. The respective obligations of the
Company and the Shareholders on the one hand, and Allied, on the
other hand, to consummate the Merger are subject to the
requirements that:
(a) At the Closing, the Shareholders will deliver to
Allied certificates evidencing the Company Common Stock duly
endorsed to Buyer (or with separate stock powers) and Allied will
deliver (i) to Shareholders a certificate evidencing the number
of shares of Allied Common Stock to be transferred to
Shareholders in accordance with Article II, and (ii) to the
Escrow Agent, certificates evidencing the number of shares of
Allied Common Stock to be transferred to the Escrow Agent
pursuant to Sections 2.6.
(b) The Escrow Agreement shall have been executed and
delivered by the parties thereto in substantially the form
thereof attached to this Agreement as Exhibit A.
(c) Any applicable waiting period under the HSR Act
and the rules and regulations promulgated thereunder will have
expired or been terminated.
(d) The NJDEP shall have issued an approval pursuant
to ISRA that will authorize the transactions contemplated by this
Agreement to be consummated and Allied and the Shareholders shall
have agreed in writing that Allied shall be responsible for all
costs and expenses associated with the implementation of the
approval after the Closing and shall fund such cost and expense
by transferring back to itself from the Shareholders the Allied
Common Stock held by the Escrow Agent, in accordance with the
terms of Section 5.6 hereof and Article VI.
(e) An employment agreement in substantially the form
set forth in Exhibit B shall have been executed and delivered by
Friedman and Allied on or before the Closing Date.
(f) The Registration Rights Agreement in substantially
the form set forth in Exhibit E shall have been executed and
delivered by Allied and the Shareholders.
(g) The Shareholders and Allied shall have mutually
agreed in writing on the items required by the first sentence of
paragraph 2.7(a).
(h) No order, stay, judgment or decree will have been
issued by any court and be in effect restraining or prohibiting
the consummation of the transactions contemplated hereby.
(i) The unresolved fines imposed by the NJDEP with
respect to the four AONCAPA'S issued to the Company for
violations of carbon monoxide limits in the Cranbury facilities
air pollution permits which in the aggregate exceed $100,000 have
been resolved.
7.2 Conditions to the Obligations of the Shareholders. The
obligations of the Company and the Shareholders to effect the
Merger are subject to the satisfaction or waiver, on or prior to
the Closing, of the following conditions:
(a) The representations and warranties of Allied
contained in this Agreement or in any other document delivered
pursuant hereto shall be true and correct, in all respects, on
and as of the Closing with the same effect as if made on and as
of the Closing and at the Closing Allied shall have delivered to
the Shareholders a certificate to that effect;
(b) Each of the covenants and obligations of Allied to
be performed on or before the Closing pursuant to the terms of
this Agreement shall have been duly performed on or before the
Closing and at the Closing Allied shall have delivered to the
Shareholders a certificate to that effect;
(c) Shareholders shall have received an opinion of
Gail E. Lehman, Assistant General Counsel, and counsel for
Allied, and/or Victor Patick, Associate General Counsel and
counsel for Allied, dated as of the Closing, in form and
substance reasonably satisfactory to Shareholders and its
counsel, covering the matters set forth in Exhibit D;
(d) Allied will have furnished the Shareholders and
the Company with such certificates of its officers and others as
the Company or the Shareholders may reasonably request to
evidence satisfaction of the conditions set forth in this Section
7.2 and elsewhere in this Agreement.
7.3 Conditions to Obligations of Allied. The obligation of
Allied to effect the Merger is subject to the satisfaction or
waiver, on or prior to the Closing, of the following conditions:
(a) Since the date of this Agreement, there have not
been any changes in the financial position, assets or operations
of the Company which would constitute a Material Adverse Effect;
(b) The representations and warranties of the
Shareholders contained in this Agreement or in any other document
delivered pursuant hereto shall be true and correct, in all
respects, on and as of the Closing with the same effect as if
made on and as of the Closing and at the Closing the Company and
the Shareholders shall have delivered to Allied a certificate to
that effect;
(c) Each of the covenants and obligations of the
Company and the Shareholders to be performed on or before the
Closing pursuant to the terms of this Agreement shall have been
duly performed in all respects on or before the Closing and at
the Closing the Shareholders shall have delivered to Allied a
certificate to that effect;
(d) Allied shall have received an opinion of Pitney,
Hardin, Kipp & Szuch, counsel for the Shareholders, dated as of
the Closing, in form and substance reasonably satisfactory to
Allied and its counsel, covering the matters set forth in
Exhibit C;
(e) Shareholders and the Company will have furnished
Allied with such certificates of its officers and others as
Allied may reasonably request to evidence satisfaction of the
conditions set forth in this Section 7.2 and elsewhere in this
Agreement.
ARTICLE VIII
TERMINATION
8.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time
prior to the Closing:
(a) by mutual written consent of the Shareholders and
Allied;
(b) by either Allied or the Shareholders, if Closing
has not occurred by September 31, 1997;
(c) by Buyer, on or after September 30, 1997, if any
condition contained in Section 7.1 or 7.5 (other than those
contained in Section 7.3 requiring a Closing Delivery), has not
been satisfied or waived; by the Shareholders, on or after
September 30, 1997, if any condition contained in Sections 7.1 or
7.2 (other than those contained in Section 7.2 requiring a
Closing Delivery), has not been satisfied or waived;
(d) by Buyer or the Shareholders, if any court of
competent jurisdiction or other governmental body has issued an
order, decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the transactions contemplated
by this Agreement, and such order, decree, ruling or other action
has become final and non-appealable;
(e) by Buyer, if any condition continued in Sections
7.1 and 7.3 shall become incapable of fulfillment (other than
through the death or permanent disability of either Shareholder);
(f) by the Shareholders, if any condition contained in
Sections 7.1 and 7.2 shall become incapable of fulfillment; or
(g) by Allied if it shall have received from a
qualified third party a good faith reasonable estimate and
opinion that the out-of-pocket costs it will incur in connection
with the Remediation Agreement and other Environmental Damage
related to the Company is more likely than not to exceed
$2,000,000.
If Buyer or Shareholders terminate this Agreement
pursuant to the provisions hereof, such termination will be
effected by written notice to the other party specifying the
provision thereof pursuant to which such termination is made.
8.2. Effect of Termination.
(a) Upon termination of this Agreement pursuant to
Section 8.1 hereof, except as provided in clauses (b) or (c)
below:
(i) this Agreement will forthwith become null and
void;
(ii) such termination will be the sole remedy with
respect to any breach of any representation or warranty
contained in or made pursuant to this Agreement; and
(iii) no party hereto or any of their
respective officers, directors, employees, agents,
consultants, stockholders or principals will have any
liability or obligation hereunder or with respect hereto.
(b) The provisions of clause (a) above
notwithstanding, no party will be relieved of liability for any
known breach (for this purpose knowledge shall be tested as of
the date hereof only) of any representation or warranty contained
herein or any breach of any covenant or agreement contained
herein or for any termination not made in good faith.
ARTICLE IX
MISCELLANEOUS
9.1 Entire Agreement. This Agreement constitutes the
entire agreement and understanding among the parties with respect
to the transactions contemplated hereby and supersedes all prior
written agreements, arrangements or understandings with respect
thereto except for certain letters executed on the date hereof.
9.2 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by telecopy (with an
additional copy by mail), or by registered or certified mail
(postage prepaid, return receipt requested) to the respective
parties as follows:
If to Buyer:
AlliedSignal Inc.
101 Columbia Turnpike
Morristown, New Jersey 07962
Telecopy: 201-455-6840
Attention: General Counsel
Engineered Materials
If to Shareholders:
Louis Friedman
35 Templar Drive
Watchung, New Jersey 07060
Paul Marks
175 Forest Hill Road
West Orange, New Jersey 07052
With Two Additional Copies to:
Pitney, Hardin, Kipp & Szuch
Mail to:
P.O. Box 1945
Morristown, New Jersey 07962-1945
Delivery to:
200 Campus Drive
Florham Park, New Jersey 07932-0950
Telecopy: 201-966-1550
Attention: Ronald H. Janis, Esq.
or to such other address as the party to whom notice is given may
have previously furnished to the other in writing in the manner
set forth above. Any notice or communication delivered in person
shall be deemed effective on delivery. Any notice or
communication sent by telecopy shall be deemed effective on the
first business day after such notice or communication was
received. Any notice or communication sent by registered or
certified mail shall be deemed effective on the fifth business
day at the place from which such notice or communication was
mailed following the day on which such notice or communication
was mailed.
9.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey
regardless of the laws that might otherwise govern under
principles of conflicts of laws applicable thereto.
9.4 Disputes. Except as relates to Section 2.7, any
dispute, controversy or claim arising out of or relating to this
Agreement or a breach of this Agreement, shall be finally
resolved by arbitration. Either party may initiate the
arbitration process by giving written notice to the other party.
Such notice shall contain a statement setting forth the nature of
the dispute, the amount involved, if any, and the remedy sought,
which may include, without limitation, specific performance or
other equitable relief. The arbitration shall be conducted in
New Jersey in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (the "Rules") by a single
arbitrator mutually agreed upon by the parties, or in the absence
of any such agreement, by an arbiter selected from a panel
provided by the office of the American Arbitration Association
located in New Jersey, in accordance with the Rules. In the
event of any conflict between the Rules and this Section, the
provisions of this section shall govern. The arbitration hearing
shall be held as promptly as is practicable. The arbitral award
shall be in writing and shall be final and binding upon the
parties, and neither party shall appeal the award to any court,
except that judgment upon the award may be entered in any court
having jurisdiction thereof. Each party shall pay its own costs
and attorney's fees and one-half the fee of the arbitrator.
9.5 Descriptive Headings. The descriptive headings herein
or in any Exhibit or Schedule hereto are inserted for convenience
of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.
9.6 Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and
nothing in this Agreement, express or implied, is intended to
confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
9.7 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original,
but all of which shall constitute one and the same agreement.
9.8 Expenses. Except as otherwise provided herein whether
or not the transactions contemplated herein are consummated, each
of the parties to this Agreement shall bear all costs and
expenses incurred by it in connection with the preparation,
execution and performance of this Agreement and the transactions
contemplated hereby.
9.9 Binding Effect; Assignment. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and
their respective legal representatives and successors. This
Agreement may not be assigned by any party hereto.
9.10 Amendment. This Agreement may not be amended or
modified except by an instrument in writing signed by Allied and
the Shareholders or, if it affects only Friedman, then by Allied
and Friedman.
9.11 Extension; Waiver. Any party hereto may (i) extend the
time for the performance of any of the obligations or other acts
of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties of any other party contained
herein or in any document, certificate or writing delivered
pursuant hereto by any other party, or (iii) waive compliance
with any of the agreements or conditions contained herein or any
breach thereof. Any agreement on the part of any party to any
such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed on the day and year first above written.
GOMAR MANUFACTURING CO., INC.
By: /s/ Louis Friedman
-----------------------------
Louis Friedman, President
ALLIEDSIGNAL INC.
By: /s/ M. Dekkers
-----------------------------
PAUL MARKS, SHAREHOLDER
/s/ Paul Marks
-----------------------------
LOUIS FRIEDMAN, SHAREHOLDER
/s/ Louis Friedman
-----------------------------
[Registrant hereby agrees to supplementally provide the Securities and
Exchange Commission with copies of any schedules or exhibits omitted from
this Agreement upon request.]
Exhibit 5
AlliedSignal Inc.
Law Department
P.O. Box 2245
Morristown, NJ 07962-2245
January 20, 1998
AlliedSignal Inc.
101 Columbia Road
Morristown, NJ 07962
Ladies and Gentlemen:
As Senior Counsel, Corporate and Finance, of
AlliedSignal Inc., a Delaware corporation (the "Company"), I
have examined the Certificate of Incorporation and Bylaws of
the Company as well as such other documents and proceedings
as I have considered necessary for the purposes of this
opinion. I have also examined and am familiar with the
Company's Registration Statement on Form S-3 (the
"Registration Statement") as filed with the Securities and
Exchange Commission under the Securities Act of 1933, as
amended (the "Act"), relating to 926,321 shares of the
Company's Common Stock, par value $1.00 per share (the
"Common Shares"), which may be offered or sold by the
selling stockholders referred to in the Registration Statement.
Based upon the foregoing, and having regard to legal
considerations which I deem relevant, I am of the opinion
that the Common Shares are legally issued, fully paid and
non-assessable.
I hereby consent to the inclusion of this opinion
letter as an exhibit to the Registration Statement and the
reference to me under the caption "Legal Matters". In
giving such consent, I do not thereby admit that I am in the
category of persons whose consent is required under Section
7 of the Act.
Very truly yours,
/s/ J. Edward Smith
J. Edward Smith
Senior Counsel
Corporate and Finance
Exhibit 15
January 20, 1998
Securities and Exchange Commission
450 Fifth Street, NW
Washington, D.C. 20549
Dear Ladies and Gentlemen:
We are aware that AlliedSignal Inc. has incorporated by reference our
reports dated April 24, 1997, July 25, 1997 and October 27, 1997
(issued pursuant to the provisions of Statement on Auditing Standards
No. 71) in the Prospectus constituting part of its Registration Statement
on Form S-3 to be filed on or about January 20, 1998. We are also aware
of our responsibilities under the Securities Act of 1933.
Yours very truly,
/s/ Price Waterhouse LLP
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectus constituting part of this Registration Statement on
Form S-3 of our report dated January 31, 1997, which appears
in the 1996 Annual Report to Shareowners of AlliedSignal
Inc. (the "Company"), which is incorporated by reference in
the Company's Annual Report on Form 10-K for the year ended
December 31, 1996. We also consent to the reference to us
under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Morristown, NJ
January 20, 1998
POWER OF ATTORNEY
I, Lawrence A. Bossidy, Chairman and Chief Executive Officer
and a director of AlliedSignal Inc., a Delaware corporation (the
"Company"), hereby appoint Peter M. Kreindler, Richard F.
Wallman, Robert F. Friel and Nancy A. Garvey, each with power to
act without the other and with power of substitution and
resubstitution, as my attorney-in-fact to sign on my behalf in my
capacity as an officer or director of the Company one or more
registration statements under the Securities Act of 1933, or any
amendment or post-effective amendment to any registration
statement heretofore or hereafter filed by the Company on Form S-
3 or other appropriate form for the registration of:
(i) debt securities of the Company (which may be
convertible into or exchangeable for or accompanied by warrants
to purchase debt or equity securities of the Company, its
subsidiaries, joint ventures or affiliates or another person or
entity, provided the number of shares of the Company's Common
Stock into or for which such debt securities may be converted or
exchanged or which may be issued upon exercise of such warrants
shall not exceed 66,800,000, as adjusted for stock splits and
dividends) with aggregate proceeds not to exceed $600 million (or
the equivalent thereof in any foreign currency), any accompanying
warrants and any guarantees by the Company of such debt
securities of its subsidiaries, joint ventures or affiliates;
(ii) preferred stock of the Company (which may be
convertible into or redeemable or exchangeable for Common Stock
or other securities or property of the Company) with proceeds not
to exceed $600 million;
(iii) debt securities, Common Stock or preferred
stock of the Company or warrants to purchase such securities to
be issued in exchange for debt or equity securities of the
Company, its subsidiaries, joint ventures or affiliates with an
aggregate principal amount, liquidation preference or value not
to exceed $600 million;
(iv) any securities into or for which any of the
securities specified in clauses (i), (ii) or (iii) are
convertible or exchangeable or which may be issued upon exercise
thereof; and
(v) shares of Common Stock of the Company sold or
otherwise disposed of to carry out transactions (a) which have
been specifically authorized by the Board of Directors, and any
warrants to purchase such shares, or (b) not requiring specific
authorization by the Board of Directors (not to exceed in any one
transaction the lesser of (1) two percent of the Common Stock of
the Company issued and outstanding at the end of the preceding
fiscal year, as adjusted for stock splits and stock dividends, or
(2) shares having a market value of $200,000,000), and any
warrants to purchase such shares, granting to each such attorney
full power and authority to perform every act necessary to be
done as fully as I might do in person.
I hereby revoke any or all prior appointments of attorneys-
in-fact to the extent that they confer authority to sign the
above-described documents.
/s/ Lawrence A. Bossidy
-----------------------
Lawrence A. Bossidy
Dated: January 16, 1998
<PAGE>
POWER OF ATTORNEY
I, Hans W. Becherer, a director of AlliedSignal Inc., a
Delaware corporation (the "Company"), hereby appoint Lawrence A.
Bossidy, Peter M. Kreindler, Richard F. Wallman, Robert F. Friel
and Nancy A. Garvey, each with power to act without the other and
with power of substitution and resubstitution, as my attorney-in-
fact to sign on my behalf in my capacity as a director of the
Company one or more registration statements under the Securities
Act of 1933, or any amendment or post-effective amendment to any
registration statement heretofore or hereafter filed by the
Company on Form S-3 or other appropriate form for the
registration of:
(i) debt securities of the Company (which may be
convertible into or exchangeable for or accompanied by warrants
to purchase debt or equity securities of the Company, its
subsidiaries, joint ventures or affiliates or another person or
entity, provided the number of shares of the Company's Common
Stock into or for which such debt securities may be converted or
exchanged or which may be issued upon exercise of such warrants
shall not exceed 66,800,000, as adjusted for stock splits and
dividends) with aggregate proceeds not to exceed $600 million (or
the equivalent thereof in any foreign currency), any accompanying
warrants and any guarantees by the Company of such debt
securities of its subsidiaries, joint ventures or affiliates;
(ii) preferred stock of the Company (which may be
convertible into or redeemable or exchangeable for Common Stock
or other securities or property of the Company) with proceeds not
to exceed $600 million;
(iii) debt securities, Common Stock or preferred
stock of the Company or warrants to purchase such securities to
be issued in exchange for debt or equity securities of the
Company, its subsidiaries, joint ventures or affiliates with an
aggregate principal amount, liquidation preference or value not
to exceed $600 million;
(iv) any securities into or for which any of the
securities specified in clauses (i), (ii) or (iii) are
convertible or exchangeable or which may be issued upon exercise
thereof; and
(v) shares of Common Stock of the Company sold or
otherwise disposed of to carry out transactions (a) which have
been specifically authorized by the Board of Directors, and any
warrants to purchase such shares, or (b) not requiring specific
authorization by the Board of Directors (not to exceed in any one
transaction the lesser of (1) two percent of the Common Stock of
the Company issued and outstanding at the end of the preceding
fiscal year, as adjusted for stock splits and stock dividends, or
(2) shares having a market value of $200,000,000), and any
warrants to purchase such shares, granting to each such attorney
full power and authority to perform every act necessary to be
done as fully as I might do in person.
I hereby revoke any or all prior appointments of attorneys-
in-fact to the extent that they confer authority to sign the
above-described documents.
/s/ Hans W. Becherer
------------------------
Hans W. Becherer
Dated: January 16, 1998
<PAGE>
POWER OF ATTORNEY
I, Daniel P. Burnham, a director of AlliedSignal Inc., a
Delaware corporation (the "Company"), hereby appoint Lawrence A.
Bossidy, Peter M. Kreindler, Richard F. Wallman, Robert F. Friel
and Nancy A. Garvey, each with power to act without the other and
with power of substitution and resubstitution, as my attorney-in-
fact to sign on my behalf in my capacity as a director of the
Company one or more registration statements under the Securities
Act of 1933, or any amendment or post-effective amendment to any
registration statement heretofore or hereafter filed by the
Company on Form S-3 or other appropriate form for the
registration of:
(i) debt securities of the Company (which may be
convertible into or exchangeable for or accompanied by warrants
to purchase debt or equity securities of the Company, its
subsidiaries, joint ventures or affiliates or another person or
entity, provided the number of shares of the Company's Common
Stock into or for which such debt securities may be converted or
exchanged or which may be issued upon exercise of such warrants
shall not exceed 66,800,000, as adjusted for stock splits and
dividends) with aggregate proceeds not to exceed $600 million (or
the equivalent thereof in any foreign currency), any accompanying
warrants and any guarantees by the Company of such debt
securities of its subsidiaries, joint ventures or affiliates;
(ii) preferred stock of the Company (which may be
convertible into or redeemable or exchangeable for Common Stock
or other securities or property of the Company) with proceeds not
to exceed $600 million;
(iii) debt securities, Common Stock or preferred
stock of the Company or warrants to purchase such securities to
be issued in exchange for debt or equity securities of the
Company, its subsidiaries, joint ventures or affiliates with an
aggregate principal amount, liquidation preference or value not
to exceed $600 million;
(iv) any securities into or for which any of the
securities specified in clauses (i), (ii) or (iii) are
convertible or exchangeable or which may be issued upon exercise
thereof; and
(v) shares of Common Stock of the Company sold or
otherwise disposed of to carry out transactions (a) which have
been specifically authorized by the Board of Directors, and any
warrants to purchase such shares, or (b) not requiring specific
authorization by the Board of Directors (not to exceed in any one
transaction the lesser of (1) two percent of the Common Stock of
the Company issued and outstanding at the end of the preceding
fiscal year, as adjusted for stock splits and stock dividends, or
(2) shares having a market value of $200,000,000), and any
warrants to purchase such shares, granting to each such attorney
full power and authority to perform every act necessary to be
done as fully as I might do in person.
I hereby revoke any or all prior appointments of attorneys-
in-fact to the extent that they confer authority to sign the
above-described documents.
/s/ Daniel P. Burnham
--------------------
Daniel P. Burnham
Dated: January 16, 1998
<PAGE>
POWER OF ATTORNEY
I, Ann M. Fudge, a director of AlliedSignal Inc., a Delaware
corporation (the "Company"), hereby appoint Lawrence A. Bossidy,
Peter M. Kreindler, Richard F. Wallman, Robert F. Friel and Nancy
A. Garvey, each with power to act without the other and with
power of substitution and resubstitution, as my attorney-in-fact
to sign on my behalf in my capacity as a director of the Company
one or more registration statements under the Securities Act of
1933, or any amendment or post-effective amendment to any
registration statement heretofore or hereafter filed by the
Company on Form S-3 or other appropriate form for the
registration of:
(i) debt securities of the Company (which may be
convertible into or exchangeable for or accompanied by warrants
to purchase debt or equity securities of the Company, its
subsidiaries, joint ventures or affiliates or another person or
entity, provided the number of shares of the Company's Common
Stock into or for which such debt securities may be converted or
exchanged or which may be issued upon exercise of such warrants
shall not exceed 66,800,000, as adjusted for stock splits and
dividends) with aggregate proceeds not to exceed $600 million (or
the equivalent thereof in any foreign currency), any accompanying
warrants and any guarantees by the Company of such debt
securities of its subsidiaries, joint ventures or affiliates;
(ii) preferred stock of the Company (which may be
convertible into or redeemable or exchangeable for Common Stock
or other securities or property of the Company) with proceeds not
to exceed $600 million;
(iii) debt securities, Common Stock or preferred
stock of the Company or warrants to purchase such securities to
be issued in exchange for debt or equity securities of the
Company, its subsidiaries, joint ventures or affiliates with an
aggregate principal amount, liquidation preference or value not
to exceed $600 million;
(iv) any securities into or for which any of the
securities specified in clauses (i), (ii) or (iii) are
convertible or exchangeable or which may be issued upon exercise
thereof; and
(v) shares of Common Stock of the Company sold or
otherwise disposed of to carry out transactions (a) which have
been specifically authorized by the Board of Directors, and any
warrants to purchase such shares, or (b) not requiring specific
authorization by the Board of Directors (not to exceed in any one
transaction the lesser of (1) two percent of the Common Stock of
the Company issued and outstanding at the end of the preceding
fiscal year, as adjusted for stock splits and stock dividends, or
(2) shares having a market value of $200,000,000), and any
warrants to purchase such shares, granting to each such attorney
full power and authority to perform every act necessary to be
done as fully as I might do in person.
I hereby revoke any or all prior appointments of attorneys-
in-fact to the extent that they confer authority to sign the
above-described documents.
/s/ Ann M. Fudge
----------------
Ann M. Fudge
Dated: January 16, 1998
<PAGE>
POWER OF ATTORNEY
I, Paul X. Kelley, a director of AlliedSignal Inc., a
Delaware corporation (the "Company"), hereby appoint Lawrence A.
Bossidy, Peter M. Kreindler, Richard F. Wallman, Robert F. Friel
and Nancy A. Garvey, each with power to act without the other and
with power of substitution and resubstitution, as my attorney-in-
fact to sign on my behalf in my capacity as a director of the
Company one or more registration statements under the Securities
Act of 1933, or any amendment or post-effective amendment to any
registration statement heretofore or hereafter filed by the
Company on Form S-3 or other appropriate form for the
registration of:
(i) debt securities of the Company (which may be
convertible into or exchangeable for or accompanied by warrants
to purchase debt or equity securities of the Company, its
subsidiaries, joint ventures or affiliates or another person or
entity, provided the number of shares of the Company's Common
Stock into or for which such debt securities may be converted or
exchanged or which may be issued upon exercise of such warrants
shall not exceed 66,800,000, as adjusted for stock splits and
dividends) with aggregate proceeds not to exceed $600 million (or
the equivalent thereof in any foreign currency), any accompanying
warrants and any guarantees by the Company of such debt
securities of its subsidiaries, joint ventures or affiliates;
(ii) preferred stock of the Company (which may be
convertible into or redeemable or exchangeable for Common Stock
or other securities or property of the Company) with proceeds not
to exceed $600 million;
(iii) debt securities, Common Stock or preferred
stock of the Company or warrants to purchase such securities to
be issued in exchange for debt or equity securities of the
Company, its subsidiaries, joint ventures or affiliates with an
aggregate principal amount, liquidation preference or value not
to exceed $600 million;
(iv) any securities into or for which any of the
securities specified in clauses (i), (ii) or (iii) are
convertible or exchangeable or which may be issued upon exercise
thereof; and
(v) shares of Common Stock of the Company sold or
otherwise disposed of to carry out transactions (a) which have
been specifically authorized by the Board of Directors, and any
warrants to purchase such shares, or (b) not requiring specific
authorization by the Board of Directors (not to exceed in any one
transaction the lesser of (1) two percent of the Common Stock of
the Company issued and outstanding at the end of the preceding
fiscal year, as adjusted for stock splits and stock dividends, or
(2) shares having a market value of $200,000,000), and any
warrants to purchase such shares, granting to each such attorney
full power and authority to perform every act necessary to be
done as fully as I might do in person.
I hereby revoke any or all prior appointments of attorneys-
in-fact to the extent that they confer authority to sign the
above-described documents.
/s/ Paul X. Kelley
------------------
Paul X. Kelley
Dated: January 16, 1998
<PAGE>
POWER OF ATTORNEY
I, Robert P. Luciano, a director of AlliedSignal Inc., a
Delaware corporation (the "Company"), hereby appoint Lawrence A.
Bossidy, Peter M. Kreindler, Richard F. Wallman, Robert F. Friel
and Nancy A. Garvey, each with power to act without the other and
with power of substitution and resubstitution, as my attorney-in-
fact to sign on my behalf in my capacity as a director of the
Company one or more registration statements under the Securities
Act of 1933, or any amendment or post-effective amendment to any
registration statement heretofore or hereafter filed by the
Company on Form S-3 or other appropriate form for the
registration of:
(i) debt securities of the Company (which may be
convertible into or exchangeable for or accompanied by warrants
to purchase debt or equity securities of the Company, its
subsidiaries, joint ventures or affiliates or another person or
entity, provided the number of shares of the Company's Common
Stock into or for which such debt securities may be converted or
exchanged or which may be issued upon exercise of such warrants
shall not exceed 66,800,000, as adjusted for stock splits and
dividends) with aggregate proceeds not to exceed $600 million (or
the equivalent thereof in any foreign currency), any accompanying
warrants and any guarantees by the Company of such debt
securities of its subsidiaries, joint ventures or affiliates;
(ii) preferred stock of the Company (which may be
convertible into or redeemable or exchangeable for Common Stock
or other securities or property of the Company) with proceeds not
to exceed $600 million;
(iii) debt securities, Common Stock or preferred
stock of the Company or warrants to purchase such securities to
be issued in exchange for debt or equity securities of the
Company, its subsidiaries, joint ventures or affiliates with an
aggregate principal amount, liquidation preference or value not
to exceed $600 million;
(iv) any securities into or for which any of the
securities specified in clauses (i), (ii) or (iii) are
convertible or exchangeable or which may be issued upon exercise
thereof; and
(v) shares of Common Stock of the Company sold or
otherwise disposed of to carry out transactions (a) which have
been specifically authorized by the Board of Directors, and any
warrants to purchase such shares, or (b) not requiring specific
authorization by the Board of Directors (not to exceed in any one
transaction the lesser of (1) two percent of the Common Stock of
the Company issued and outstanding at the end of the preceding
fiscal year, as adjusted for stock splits and stock dividends, or
(2) shares having a market value of $200,000,000), and any
warrants to purchase such shares, granting to each such attorney
full power and authority to perform every act necessary to be
done as fully as I might do in person.
I hereby revoke any or all prior appointments of attorneys-
in-fact to the extent that they confer authority to sign the
above-described documents.
/s/ Robert P. Luciano
---------------------
Robert P. Luciano
Dated: January 16, 1998
<PAGE>
POWER OF ATTORNEY
I, Robert B. Palmer, a director of AlliedSignal Inc., a
Delaware corporation (the "Company"), hereby appoint Lawrence A.
Bossidy, Peter M. Kreindler, Richard F. Wallman, Robert F. Friel
and Nancy A. Garvey, each with power to act without the other and
with power of substitution and resubstitution, as my attorney-in-
fact to sign on my behalf in my capacity as a director of the
Company one or more registration statements under the Securities
Act of 1933, or any amendment or post-effective amendment to any
registration statement heretofore or hereafter filed by the
Company on Form S-3 or other appropriate form for the
registration of:
(i) debt securities of the Company (which may be
convertible into or exchangeable for or accompanied by warrants
to purchase debt or equity securities of the Company, its
subsidiaries, joint ventures or affiliates or another person or
entity, provided the number of shares of the Company's Common
Stock into or for which such debt securities may be converted or
exchanged or which may be issued upon exercise of such warrants
shall not exceed 66,800,000, as adjusted for stock splits and
dividends) with aggregate proceeds not to exceed $600 million (or
the equivalent thereof in any foreign currency), any accompanying
warrants and any guarantees by the Company of such debt
securities of its subsidiaries, joint ventures or affiliates;
(ii) preferred stock of the Company (which may be
convertible into or redeemable or exchangeable for Common Stock
or other securities or property of the Company) with proceeds not
to exceed $600 million;
(iii) debt securities, Common Stock or preferred
stock of the Company or warrants to purchase such securities to
be issued in exchange for debt or equity securities of the
Company, its subsidiaries, joint ventures or affiliates with an
aggregate principal amount, liquidation preference or value not
to exceed $600 million;
(iv) any securities into or for which any of the
securities specified in clauses (i), (ii) or (iii) are
convertible or exchangeable or which may be issued upon exercise
thereof; and
(v) shares of Common Stock of the Company sold or
otherwise disposed of to carry out transactions (a) which have
been specifically authorized by the Board of Directors, and any
warrants to purchase such shares, or (b) not requiring specific
authorization by the Board of Directors (not to exceed in any one
transaction the lesser of (1) two percent of the Common Stock of
the Company issued and outstanding at the end of the preceding
fiscal year, as adjusted for stock splits and stock dividends, or
(2) shares having a market value of $200,000,000), and any
warrants to purchase such shares, granting to each such attorney
full power and authority to perform every act necessary to be
done as fully as I might do in person.
I hereby revoke any or all prior appointments of attorneys-
in-fact to the extent that they confer authority to sign the
above-described documents.
/s/ Robert B. Palmer
--------------------
Robert B. Palmer
Dated: January 16, 1998
<PAGE>
POWER OF ATTORNEY
I, Russell E. Palmer, a director of AlliedSignal Inc., a
Delaware corporation (the "Company"), hereby appoint Lawrence A.
Bossidy, Peter M. Kreindler, Richard F. Wallman, Robert F. Friel
and Nancy A. Garvey, each with power to act without the other and
with power of substitution and resubstitution, as my attorney-in-
fact to sign on my behalf in my capacity as a director of the
Company one or more registration statements under the Securities
Act of 1933, or any amendment or post-effective amendment to any
registration statement heretofore or hereafter filed by the
Company on Form S-3 or other appropriate form for the
registration of:
(i) debt securities of the Company (which may be
convertible into or exchangeable for or accompanied by warrants
to purchase debt or equity securities of the Company, its
subsidiaries, joint ventures or affiliates or another person or
entity, provided the number of shares of the Company's Common
Stock into or for which such debt securities may be converted or
exchanged or which may be issued upon exercise of such warrants
shall not exceed 66,800,000, as adjusted for stock splits and
dividends) with aggregate proceeds not to exceed $600 million (or
the equivalent thereof in any foreign currency), any accompanying
warrants and any guarantees by the Company of such debt
securities of its subsidiaries, joint ventures or affiliates;
(ii) preferred stock of the Company (which may be
convertible into or redeemable or exchangeable for Common Stock
or other securities or property of the Company) with proceeds not
to exceed $600 million;
(iii) debt securities, Common Stock or preferred
stock of the Company or warrants to purchase such securities to
be issued in exchange for debt or equity securities of the
Company, its subsidiaries, joint ventures or affiliates with an
aggregate principal amount, liquidation preference or value not
to exceed $600 million;
(iv) any securities into or for which any of the
securities specified in clauses (i), (ii) or (iii) are
convertible or exchangeable or which may be issued upon exercise
thereof; and
(v) shares of Common Stock of the Company sold or
otherwise disposed of to carry out transactions (a) which have
been specifically authorized by the Board of Directors, and any
warrants to purchase such shares, or (b) not requiring specific
authorization by the Board of Directors (not to exceed in any one
transaction the lesser of (1) two percent of the Common Stock of
the Company issued and outstanding at the end of the preceding
fiscal year, as adjusted for stock splits and stock dividends, or
(2) shares having a market value of $200,000,000), and any
warrants to purchase such shares, granting to each such attorney
full power and authority to perform every act necessary to be
done as fully as I might do in person.
I hereby revoke any or all prior appointments of attorneys-
in-fact to the extent that they confer authority to sign the
above-described documents.
/s/ Russell E. Palmer
---------------------
Russell E. Palmer
Dated: January 16, 1998
<PAGE>
POWER OF ATTORNEY
I, Frederic M. Poses, a director of AlliedSignal Inc., a
Delaware corporation (the "Company"), hereby appoint Lawrence A.
Bossidy, Peter M. Kreindler, Richard F. Wallman, Robert F. Friel
and Nancy A. Garvey, each with power to act without the other and
with power of substitution and resubstitution, as my attorney-in-
fact to sign on my behalf in my capacity as a director of the
Company one or more registration statements under the Securities
Act of 1933, or any amendment or post-effective amendment to any
registration statement heretofore or hereafter filed by the
Company on Form S-3 or other appropriate form for the
registration of:
(i) debt securities of the Company (which may be
convertible into or exchangeable for or accompanied by warrants
to purchase debt or equity securities of the Company, its
subsidiaries, joint ventures or affiliates or another person or
entity, provided the number of shares of the Company's Common
Stock into or for which such debt securities may be converted or
exchanged or which may be issued upon exercise of such warrants
shall not exceed 66,800,000, as adjusted for stock splits and
dividends) with aggregate proceeds not to exceed $600 million (or
the equivalent thereof in any foreign currency), any accompanying
warrants and any guarantees by the Company of such debt
securities of its subsidiaries, joint ventures or affiliates;
(ii) preferred stock of the Company (which may be
convertible into or redeemable or exchangeable for Common Stock
or other securities or property of the Company) with proceeds not
to exceed $600 million;
(iii) debt securities, Common Stock or preferred
stock of the Company or warrants to purchase such securities to
be issued in exchange for debt or equity securities of the
Company, its subsidiaries, joint ventures or affiliates with an
aggregate principal amount, liquidation preference or value not
to exceed $600 million;
(iv) any securities into or for which any of the
securities specified in clauses (i), (ii) or (iii) are
convertible or exchangeable or which may be issued upon exercise
thereof; and
(v) shares of Common Stock of the Company sold or
otherwise disposed of to carry out transactions (a) which have
been specifically authorized by the Board of Directors, and any
warrants to purchase such shares, or (b) not requiring specific
authorization by the Board of Directors (not to exceed in any one
transaction the lesser of (1) two percent of the Common Stock of
the Company issued and outstanding at the end of the preceding
fiscal year, as adjusted for stock splits and stock dividends, or
(2) shares having a market value of $200,000,000), and any
warrants to purchase such shares, granting to each such attorney
full power and authority to perform every act necessary to be
done as fully as I might do in person.
I hereby revoke any or all prior appointments of attorneys-
in-fact to the extent that they confer authority to sign the
above-described documents.
/s/ Frederic M. Poses
---------------------
Frederic M. Poses
Dated: January 16, 1998
<PAGE>
POWER OF ATTORNEY
I, Ivan G. Seidenberg, a director of AlliedSignal Inc., a
Delaware corporation (the "Company"), hereby appoint Lawrence A.
Bossidy, Peter M. Kreindler, Richard F. Wallman, Robert F. Friel
and Nancy A. Garvey, each with power to act without the other and
with power of substitution and resubstitution, as my attorney-in-
fact to sign on my behalf in my capacity as a director of the
Company one or more registration statements under the Securities
Act of 1933, or any amendment or post-effective amendment to any
registration statement heretofore or hereafter filed by the
Company on Form S-3 or other appropriate form for the
registration of:
(i) debt securities of the Company (which may be
convertible into or exchangeable for or accompanied by warrants
to purchase debt or equity securities of the Company, its
subsidiaries, joint ventures or affiliates or another person or
entity, provided the number of shares of the Company's Common
Stock into or for which such debt securities may be converted or
exchanged or which may be issued upon exercise of such warrants
shall not exceed 66,800,000, as adjusted for stock splits and
dividends) with aggregate proceeds not to exceed $600 million (or
the equivalent thereof in any foreign currency), any accompanying
warrants and any guarantees by the Company of such debt
securities of its subsidiaries, joint ventures or affiliates;
(ii) preferred stock of the Company (which may be
convertible into or redeemable or exchangeable for Common Stock
or other securities or property of the Company) with proceeds not
to exceed $600 million;
(iii) debt securities, Common Stock or preferred
stock of the Company or warrants to purchase such securities to
be issued in exchange for debt or equity securities of the
Company, its subsidiaries, joint ventures or affiliates with an
aggregate principal amount, liquidation preference or value not
to exceed $600 million;
(iv) any securities into or for which any of the
securities specified in clauses (i), (ii) or (iii) are
convertible or exchangeable or which may be issued upon exercise
thereof; and
(v) shares of Common Stock of the Company sold or
otherwise disposed of to carry out transactions (a) which have
been specifically authorized by the Board of Directors, and any
warrants to purchase such shares, or (b) not requiring specific
authorization by the Board of Directors (not to exceed in any one
transaction the lesser of (1) two percent of the Common Stock of
the Company issued and outstanding at the end of the preceding
fiscal year, as adjusted for stock splits and stock dividends, or
(2) shares having a market value of $200,000,000), and any
warrants to purchase such shares, granting to each such attorney
full power and authority to perform every act necessary to be
done as fully as I might do in person.
I hereby revoke any or all prior appointments of attorneys-
in-fact to the extent that they confer authority to sign the
above-described documents.
/s/ Ivan G. Seidenberg
----------------------
Ivan G. Seidenberg
Dated: January 16, 1998
<PAGE>
POWER OF ATTORNEY
I, Andrew C. Sigler, a director of AlliedSignal Inc., a
Delaware corporation (the "Company"), hereby appoint Lawrence A.
Bossidy, Peter M. Kreindler, Richard F. Wallman, Robert F. Friel
and Nancy A. Garvey, each with power to act without the other and
with power of substitution and resubstitution, as my attorney-in-
fact to sign on my behalf in my capacity as a director of the
Company one or more registration statements under the Securities
Act of 1933, or any amendment or post-effective amendment to any
registration statement heretofore or hereafter filed by the
Company on Form S-3 or other appropriate form for the
registration of:
(i) debt securities of the Company (which may be
convertible into or exchangeable for or accompanied by warrants
to purchase debt or equity securities of the Company, its
subsidiaries, joint ventures or affiliates or another person or
entity, provided the number of shares of the Company's Common
Stock into or for which such debt securities may be converted or
exchanged or which may be issued upon exercise of such warrants
shall not exceed 66,800,000, as adjusted for stock splits and
dividends) with aggregate proceeds not to exceed $600 million (or
the equivalent thereof in any foreign currency), any accompanying
warrants and any guarantees by the Company of such debt
securities of its subsidiaries, joint ventures or affiliates;
(ii) preferred stock of the Company (which may be
convertible into or redeemable or exchangeable for Common Stock
or other securities or property of the Company) with proceeds not
to exceed $600 million;
(iii) debt securities, Common Stock or preferred
stock of the Company or warrants to purchase such securities to
be issued in exchange for debt or equity securities of the
Company, its subsidiaries, joint ventures or affiliates with an
aggregate principal amount, liquidation preference or value not
to exceed $600 million;
(iv) any securities into or for which any of the
securities specified in clauses (i), (ii) or (iii) are
convertible or exchangeable or which may be issued upon exercise
thereof; and
(v) shares of Common Stock of the Company sold or
otherwise disposed of to carry out transactions (a) which have
been specifically authorized by the Board of Directors, and any
warrants to purchase such shares, or (b) not requiring specific
authorization by the Board of Directors (not to exceed in any one
transaction the lesser of (1) two percent of the Common Stock of
the Company issued and outstanding at the end of the preceding
fiscal year, as adjusted for stock splits and stock dividends, or
(2) shares having a market value of $200,000,000), and any
warrants to purchase such shares, granting to each such attorney
full power and authority to perform every act necessary to be
done as fully as I might do in person.
I hereby revoke any or all prior appointments of attorneys-
in-fact to the extent that they confer authority to sign the
above-described documents.
/s/ Andrew C. Sigler
-------------------
Andrew C. Sigler
Dated: January 16, 1998
<PAGE>
POWER OF ATTORNEY
I, John R. Stafford, a director of AlliedSignal Inc., a
Delaware corporation (the "Company"), hereby appoint Lawrence A.
Bossidy, Peter M. Kreindler, Richard F. Wallman, Robert f. Friel
and Nancy A. Garvey, each with power to act without the other and
with power of substitution and resubstitution, as my attorney-in-
fact to sign on my behalf in my capacity as a director of the
Company one or more registration statements under the Securities
Act of 1933, or any amendment or post-effective amendment to any
registration statement heretofore or hereafter filed by the
Company on Form S-3 or other appropriate form for the
registration of:
(i) debt securities of the Company (which may be
convertible into or exchangeable for or accompanied by warrants
to purchase debt or equity securities of the Company, its
subsidiaries, joint ventures or affiliates or another person or
entity, provided the number of shares of the Company's Common
Stock into or for which such debt securities may be converted or
exchanged or which may be issued upon exercise of such warrants
shall not exceed 66,800,000, as adjusted for stock splits and
dividends) with aggregate proceeds not to exceed $600 million (or
the equivalent thereof in any foreign currency), any accompanying
warrants and any guarantees by the Company of such debt
securities of its subsidiaries, joint ventures or affiliates;
(ii) preferred stock of the Company (which may be
convertible into or redeemable or exchangeable for Common Stock
or other securities or property of the Company) with proceeds not
to exceed $600 million;
(iii) debt securities, Common Stock or preferred
stock of the Company or warrants to purchase such securities to
be issued in exchange for debt or equity securities of the
Company, its subsidiaries, joint ventures or affiliates with an
aggregate principal amount, liquidation preference or value not
to exceed $600 million;
(iv) any securities into or for which any of the
securities specified in clauses (i), (ii) or (iii) are
convertible or exchangeable or which may be issued upon exercise
thereof; and
(v) shares of Common Stock of the Company sold or
otherwise disposed of to carry out transactions (a) which have
been specifically authorized by the Board of Directors, and any
warrants to purchase such shares, or (b) not requiring specific
authorization by the Board of Directors (not to exceed in any one
transaction the lesser of (1) two percent of the Common Stock of
the Company issued and outstanding at the end of the preceding
fiscal year, as adjusted for stock splits and stock dividends, or
(2) shares having a market value of $200,000,000), and any
warrants to purchase such shares, granting to each such attorney
full power and authority to perform every act necessary to be
done as fully as I might do in person.
I hereby revoke any or all prior appointments of attorneys-
in-fact to the extent that they confer authority to sign the
above-described documents.
/s/ John R. Stafford
--------------------
John R. Stafford
Dated: January 16, 1998
<PAGE>
POWER OF ATTORNEY
I, Thomas P. Stafford, a director of AlliedSignal Inc., a
Delaware corporation (the "Company"), hereby appoint Lawrence A.
Bossidy, Peter M. Kreindler, Richard F. Wallman, Robert F. Friel
and Nancy A. Garvey, each with power to act without the other and
with power of substitution and resubstitution, as my attorney-in-
fact to sign on my behalf in my capacity as a director of the
Company one or more registration statements under the Securities
Act of 1933, or any amendment or post-effective amendment to any
registration statement heretofore or hereafter filed by the
Company on Form S-3 or other appropriate form for the
registration of:
(i) debt securities of the Company (which may be
convertible into or exchangeable for or accompanied by warrants
to purchase debt or equity securities of the Company, its
subsidiaries, joint ventures or affiliates or another person or
entity, provided the number of shares of the Company's Common
Stock into or for which such debt securities may be converted or
exchanged or which may be issued upon exercise of such warrants
shall not exceed 66,800,000, as adjusted for stock splits and
dividends) with aggregate proceeds not to exceed $600 million (or
the equivalent thereof in any foreign currency), any accompanying
warrants and any guarantees by the Company of such debt
securities of its subsidiaries, joint ventures or affiliates;
(ii) preferred stock of the Company (which may be
convertible into or redeemable or exchangeable for Common Stock
or other securities or property of the Company) with proceeds not
to exceed $600 million;
(iii) debt securities, Common Stock or preferred
stock of the Company or warrants to purchase such securities to
be issued in exchange for debt or equity securities of the
Company, its subsidiaries, joint ventures or affiliates with an
aggregate principal amount, liquidation preference or value not
to exceed $600 million;
(iv) any securities into or for which any of the
securities specified in clauses (i), (ii) or (iii) are
convertible or exchangeable or which may be issued upon exercise
thereof; and
(v) shares of Common Stock of the Company sold or
otherwise disposed of to carry out transactions (a) which have
been specifically authorized by the Board of Directors, and any
warrants to purchase such shares, or (b) not requiring specific
authorization by the Board of Directors (not to exceed in any one
transaction the lesser of (1) two percent of the Common Stock of
the Company issued and outstanding at the end of the preceding
fiscal year, as adjusted for stock splits and stock dividends, or
(2) shares having a market value of $200,000,000), and any
warrants to purchase such shares, granting to each such attorney
full power and authority to perform every act necessary to be
done as fully as I might do in person.
I hereby revoke any or all prior appointments of attorneys-
in-fact to the extent that they confer authority to sign the
above-described documents.
/s/ Thomas P. Stafford
----------------------
Thomas P. Stafford
Dated: January 16, 1998
<PAGE>
POWER OF ATTORNEY
I, Robert C. Winters, a director of AlliedSignal Inc., a
Delaware corporation (the "Company"), hereby appoint Lawrence A.
Bossidy, Peter M. Kreindler, Richard F. Wallman, Robert f. Friel
and Nancy A. Garvey, each with power to act without the other and
with power of substitution and resubstitution, as my attorney-in-
fact to sign on my behalf in my capacity as a director of the
Company one or more registration statements under the Securities
Act of 1933, or any amendment or post-effective amendment to any
registration statement heretofore or hereafter filed by the
Company on Form S-3 or other appropriate form for the
registration of:
(i) debt securities of the Company (which may be
convertible into or exchangeable for or accompanied by warrants
to purchase debt or equity securities of the Company, its
subsidiaries, joint ventures or affiliates or another person or
entity, provided the number of shares of the Company's Common
Stock into or for which such debt securities may be converted or
exchanged or which may be issued upon exercise of such warrants
shall not exceed 66,800,000, as adjusted for stock splits and
dividends) with aggregate proceeds not to exceed $600 million (or
the equivalent thereof in any foreign currency), any accompanying
warrants and any guarantees by the Company of such debt
securities of its subsidiaries, joint ventures or affiliates;
(ii) preferred stock of the Company (which may be
convertible into or redeemable or exchangeable for Common Stock
or other securities or property of the Company) with proceeds not
to exceed $600 million;
(iii) debt securities, Common Stock or preferred
stock of the Company or warrants to purchase such securities to
be issued in exchange for debt or equity securities of the
Company, its subsidiaries, joint ventures or affiliates with an
aggregate principal amount, liquidation preference or value not
to exceed $600 million;
(iv) any securities into or for which any of the
securities specified in clauses (i), (ii) or (iii) are
convertible or exchangeable or which may be issued upon exercise
thereof; and
(v) shares of Common Stock of the Company sold or
otherwise disposed of to carry out transactions (a) which have
been specifically authorized by the Board of Directors, and any
warrants to purchase such shares, or (b) not requiring specific
authorization by the Board of Directors (not to exceed in any one
transaction the lesser of (1) two percent of the Common Stock of
the Company issued and outstanding at the end of the preceding
fiscal year, as adjusted for stock splits and stock dividends, or
(2) shares having a market value of $200,000,000), and any
warrants to purchase such shares, granting to each such attorney
full power and authority to perform every act necessary to be
done as fully as I might do in person.
I hereby revoke any or all prior appointments of attorneys-
in-fact to the extent that they confer authority to sign the
above-described documents.
/s/ Robert C. Winters
-------------------
Robert C. Winters
Dated: January 19, 1998
<PAGE>
POWER OF ATTORNEY
I, Henry T, Yang, a director of AlliedSignal Inc., a
Delaware corporation (the "Company"), hereby appoint Lawrence A.
Bossidy, Peter M. Kreindler, Richard F. Wallman, Robert F. Friel
and Nancy A. Garvey, each with power to act without the other and
with power of substitution and resubstitution, as my attorney-in-
fact to sign on my behalf in my capacity as a director of the
Company one or more registration statements under the Securities
Act of 1933, or any amendment or post-effective amendment to any
registration statement heretofore or hereafter filed by the
Company on Form S-3 or other appropriate form for the
registration of:
(i) debt securities of the Company (which may be
convertible into or exchangeable for or accompanied by warrants
to purchase debt or equity securities of the Company, its
subsidiaries, joint ventures or affiliates or another person or
entity, provided the number of shares of the Company's Common
Stock into or for which such debt securities may be converted or
exchanged or which may be issued upon exercise of such warrants
shall not exceed 66,800,000, as adjusted for stock splits and
dividends) with aggregate proceeds not to exceed $600 million (or
the equivalent thereof in any foreign currency), any accompanying
warrants and any guarantees by the Company of such debt
securities of its subsidiaries, joint ventures or affiliates;
(ii) preferred stock of the Company (which may be
convertible into or redeemable or exchangeable for Common Stock
or other securities or property of the Company) with proceeds not
to exceed $600 million;
(iii) debt securities, Common Stock or preferred
stock of the Company or warrants to purchase such securities to
be issued in exchange for debt or equity securities of the
Company, its subsidiaries, joint ventures or affiliates with an
aggregate principal amount, liquidation preference or value not
to exceed $600 million;
(iv) any securities into or for which any of the
securities specified in clauses (i), (ii) or (iii) are
convertible or exchangeable or which may be issued upon exercise
thereof; and
(v) shares of Common Stock of the Company sold or
otherwise disposed of to carry out transactions (a) which have
been specifically authorized by the Board of Directors, and any
warrants to purchase such shares, or (b) not requiring specific
authorization by the Board of Directors (not to exceed in any one
transaction the lesser of (1) two percent of the Common Stock of
the Company issued and outstanding at the end of the preceding
fiscal year, as adjusted for stock splits and stock dividends, or
(2) shares having a market value of $200,000,000), and any
warrants to purchase such shares, granting to each such attorney
full power and authority to perform every act necessary to be
done as fully as I might do in person.
I hereby revoke any or all prior appointments of attorneys-
in-fact to sign the above-described documents.
/s/ Henry T. Yang
-----------------
Henry T. Yang
Dated: January 16, 1998
