Liquid Air Corporation and Subsidiaries - Page 3

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               The purchase price to be paid by petitioner was set forth in           
          paragraph 2 of the Contract as follows:                                     

               (i) $60,030,000 to be paid by the delivery to the                      
               Seller [Chemetron] of 3,335,000 original issue shares                  
               of the Buyer's [petitioner's] Common Stock, no par                     
               value, which shares have been valued by the parties at                 
               a fair market value of $60,030,000 based upon recent                   
               market values of the Buyer's Common Stock in the over-                 
               the-counter market, the present book value of the                      
               Buyer's Common Stock, the size of the block of shares                  
               to be issued to the Seller, the restrictions upon                      
               transfer of such shares and the limited size of the                    
               public market for the Buyer's shares, and (ii) the                     
               Buyer's assumption and agreement to pay or discharge                   
               the Seller's liabilities and obligations to the extent                 
               provided in Paragraph 4(a) hereof; the foregoing                       
               purchase price reflecting the fair market value of the                 
               assets of the Business as set forth in the report of                   
               Valuation Research Corporation, dated March 1, 1978,                   
               containing, among other things, an appraisal of the                    
               industrial gas assets of the Seller which are used in                  
               the Business, a copy of which has previously been                      
               delivered to the Buyer.                                                

               The parties to the Contract obtained two outside appraisals            
          in connection with the transaction.  First, in a letter dated               
          June 2, 1978, addressed to the board of directors of Allegheny,             
          Smith Barney, Harris Upham & Co. (Smith Barney) concluded that              
          the fair market value of 3,335,000 shares of petitioner's common            
          stock was approximately $60,000,000 as of May 18, 1978.  In so              
          concluding, Smith Barney considered the effect of the following             
          factors on the value of petitioner's common stock:  (1) The                 
          shares to be received by Allegheny in the transaction would be              
          restricted stock; (2) upon receipt of the stock, Allegheny would            
          hold a minority interest in petitioner equal to approximately 32            

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