Company Name: Allied Telesyn Int'l. Corp.
Public Availability Date: 03-03-1995

INQUIRY LETTER

FENWICK & WEST
TWO PALO ALTO SQUARE
PALO ALTO, CALIFORNIA 94306
TELEPHONE (415) 494-0600

January 25, 1995

Rule 701 Under the Securities Act of 1933

Office of the Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: Allied Telesyn International Corp.; Rule 701

Gentlemen:

We are writing to request your confirmation of our interpretation that shares of stock originally issued under Rule 701 promulgated under the Securities Act of 1933, as amended ("Rule 701") may be resold in accordance with the resale provisions of Rule 701(c)(3) after such shares have been transferred by the original purchasers to a revocable living trust.

Our client Allied Telesyn International Corp. ("ATI") is a California corporation whose stock is not publicly traded. ATI has issued shares of its common stock to certain of its key officers pursuant to ATI's Key Contributor Stock Purchase Plan (the "Plan"). Under the Plan shares were issued to several of ATI's executive officers to afford them an opportunity to acquire an ownership interest in ATI and to provide an incentive for them to continue their employment with ATI. The shares of ATI common stock that were issued to its officers under the plan were issued under Rule 701 and were paid for by the tender of full recourse promissory notes in late 1993.

Recently, certain officers of ATI who purchased shares under the Plan have indicated their desire to transfer title to such shares to a revocable living trust for no consideration for estate planning purposes. The officers in question are the trustees of their respective trusts and the beneficiaries of such trusts are, in one case, the officer who is making the transfer of the shares to such trust, and in another case, the officer making such transfer, his spouse and children. The trusts will receive such shares subject to all the terms and conditions (including repurchase options and rights of refusal) that are currently imposed on such shares pursuant to the stock purchase agreements governing the purchase of such shares under the Plan.

Although shares issued under Rule 701 are "restricted securities" within the meaning of Rule 144, Rule 701(c)(3) provides that 90 days after an issuer becomes subject to the reporting requirements of the Securities Exchange Act of 1934 (the "1934 Act"), securities issued under Rule 701 can be resold by a non-affiliate without compliance with paragraphs (c), (d), (e) and (h) of Rule 144 and by an affiliate without compliance with paragraph (d) of Rule 144.

We are respectfully requesting that you confirm our opinion that, if the above-described trusts receive the shares of ATI's stock described above for no consideration from the officers who originally acquired such shares from ATI pursuant to Rule 701, then such trusts may resell such shares under Rule 701(c)(3) beginning 90 days after ATI becomes subject to the reporting requirements of the 1934 Act.

We believe that this interpretation of Rule 701(c)(3) is consistent with the staff's interpretive letters, Brobeck, Phleger & Harrison (available August 27, 1992) and Trimble Navigation (available January 29, 1991), copies of which we enclose for your reference. It seems to us that the transfer of the ATI shares to a trust for no consideration is directly analogous to the gift transactions described in the Brobeck interpretive letter and that the shares so transferred can thus be resold under Rule 701(c)(3) 90 days after ATI becomes subject to the reporting requirements of the 1934 Act.

As the officers of ATI who propose to transfer these shares to their trusts for estate planning purposes would like to do so as promptly as possible, we respectfully request your prompt consideration of this matter. If you have any questions, please feel free to call Kenneth A. Linhares at (415) 858-7235.

Pursuant to Securities Act Release No. 33-6269, seven copies of this letter are enclosed.

We would appreciate it if you would please acknowledge receipt of this letter by stamping the enclosed copy on the first page and returning it to us in the self-addressed, stamped envelope we are enclosing.

If for any reason you expect to provide a response that is unable to confirm our interpretation of Rule 701 set forth above, we would appreciate the opportunity to discuss this matter with you prior to delivery of your written response.

Very truly yours,

Kenneth A. Linhares

KAL/sf

STAFF REPLY LETTER

March 3, 1995

RESPONSE OF THE OFFICE OF SMALL BUSINESS POLICY
DIVISION OF CORPORATION FINANCE

Re: Allied Telesyn International Corp. ("ATI")
Incoming letter dated January 25, 1995

Based on the facts presented, the Division's views are as follows:

(1) Rule 144(a)(2)(ii) defines "person," when used in reference to a person for whose account securities are to be sold, to include any trust to which such person serves as a trustee or any similar capacity. As such, based upon the facts presented, each trust described (the "Trust") would be the same "person" as the officer of ATI (the "Officer") who established the Trust and acted as trustee with respect to that Trust.

(2) As each Trust and the establishing Officer are the same person within the meaning of Rule 144(a)(2)(ii), and assuming that each Officer would be able to resell the shares in accordance with Rule 701(c)(3) beginning 90 days after ATI becomes subject to the reporting requirements of the Securities Exchange Act of 1934, each Trust also may resell the shares in accordance with Rule 701(c)(3) beginning 90 days after ATI becomes subject to those reporting requirements.

Because this position is based upon the representations made to the Division in your letter, any different facts or conditions might require a different conclusion.

Sincerely,

William E. Toomey
Deputy Chief, Office of Small Business Policy