8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 12, 2007

The Allied Defense Group, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

Delaware	1-11376	04-2281015
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
8000 Towers Crescent Drive, Suite 260, Vienna, Virginia		22182
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: (703) 847-5268

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On July 11, 2007, MECAR S.A., a subsidiary of The Allied Defense Group, Inc., entered into a contract with its distributor for the benefit of one of its principal country customers for the delivery of a diverse range of ammunition. The contract is for approximately $90 million and is part of $160 million of orders approved by the customer country. The balance is subject to formal award of a follow-on contract anticipated in early 2008.

A copy of the Press Release announcing this award and other minor awards is attached hereto as Exhibit 99.1 and incorporated hereby by reference.

Also attached hereto as Exhibit 99.2 is a MECAR Certificate which describes these matters and has been delivered to Allied’s senior secured convertible note holders as required by the recently announced Amended and Restated Securities Purchase Agreement. In accordance with the terms and conditions of the Amended and Restated Securities Purchase Agreement, Allied has requested that the senior secured converti ble note holders acquire an additional $10 million of senior secured convertible notes. Attached hereto as Exhibit 99.3 is a copy of the Additional Closing Notice provided by Allied to each of its senior secured convertible note holders.

Item 9.01 Financial Statements and Exhibits.

Exhibit 99.1 Press Release dated July 11, 2007.
Exhibit 99.2 MECAR Certificate dated July 11, 2007
Exhibit 99.3 Additional Closing Notice dated July 12, 2007

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS: This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Because statements iclude risks and uncertainties, actual results may differ materially from those expressed or implied and include, but are not limited to, those discussed in filings by the Company with the Securities and Exchange Commission.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	The Allied Defense Group, Inc.
July 12, 2007	By:	John J. Marcello
		Name: John J. Marcello
		Title: Chief Executive Officer and President

Exhibit Index

Exhibit No.	Description
99.1	Press Release dated July 11, 2007
99.2	MECAR Certificate dated July 11, 2007
99.3	Additional Closing Notice dated July 12, 2007

EX-99.1

The Allied Defense Group, Inc.

FOR IMMEDIATE RELEASE	For More Information, Contact:
July 11, 2007	Crystal B. Leiderman

Director, Investor Relations
800-847-5322

THE ALLIED DEFENSE GROUP RECEIVES AMMUNITION ORDERS EXCEEDING $170 MILLION

VIENNA, Virginia, July 11,, 2007 – The Allied Defense Group, Inc. (AMEX: ADG) today announced that its Ammunition and Weapon Effects (AWE) segment, has successfully negotiated several new orders with various clients in Europe, North America and other export markets, with a total expected value exceeding $170 million over a three year period. Of the $170 million, the segment has already received firm contracts totaling more than $90 million with for delivery during 2007 and 2008.

The firm contracts call for the delivery of a diverse range of ammunition, ranging from 25mm cannon and recoilless rifle ammunition to 105mm Howitzer projectiles. Also included are repeat orders for the proprietary 90mm MK8 and 120mm mortar rounds, as well as orders for many items won in open competition. AWE has also obtained a contract, with a new customer, for the development of ammunition for the 115mm tank gun.

The follow-on options, worth approximately $80 million, are subject to formal awards by our clients, and these are anticipated to occur during 2008.

Major General (Ret) John J. Marcello, President and Chief Executive Officer of The Allied Defense Group, stated, “We have been expecting these orders for a long time and are pleased to announce that they have been awarded to The Allied Defense Group. We believe that AWE’s propriety technologies and market position were an impetus for the contracts, validating AWE’s value as a critical ammunition supplier. We are emerging from a two year depressed business cycle due to a delay in the receipt of these large contracts, but during this time we have made progress to improve operational processes so that we can operate more profitably going forward. We have materially restructured operations at our largest subsidiary and continue to improve the efficiency of our other operations. These new orders are expected to drive strong revenue growth over the next three years, and the extended delivery period for a large portion of the orders will allow easier production planning and improved operational efficiency.

“The restructured AWE organization maintains key strategic advantages and continues to target new and exciting markets in an effort to improve both revenue and earnings performance. As militaries throughout the world search for lighter, more strategically mobile weapon systems, AWE, through its Belgian subsidiary, MECAR SA, provides attractive solutions in its complete family of modern 90mm and 105mm ammunition, as well as its 120mm high pressure mortar ammunition. Recently, the Company’s 90mm MK8 was selected by the Belgian government for its Armored Infantry Vehicle (AIV) program, which will begin service in 2008.”

Major General Marcello continued, “We are also proud to receive repeat orders from existing customers for the Company’s new non-incendiary smoke round technology, which improves safety when firing ammunition from short ranges and also reduces collateral damage in urban environments.

“AWE’s ability to bring new products to market faster than its competitors sets it apart. A great example is the 120mm Multi-Function Urban Combat tank round which will be available shortly. The Company continues to innovate and expects that new product introductions coupled with improved operational stability will help the Company grow its business on a go forward basis”, concluded Major General Marcello.

About The Allied Defense Group, Inc.
The Allied Defense Group, Inc. is a diversified international defense and security firm which: develops and produces conventional medium caliber ammunition marketed to defense departments worldwide; designs, produces and markets sophisticated electronic and microwave security systems principally for European and North American markets; manufactures battlefield effects simulators and other training devices for the military; and designs and produces state-of-the-art weather and navigation software, data, and systems for commercial and military customers. The AWE Division consists of MECAR SA, MECARUSA and Titan Dynamics.

For more Information, please visit the Company web site: www.allieddefensegroup.com

Certain statements contained herein are “forward looking” statements as such term is defined in the Private Securities Litigation Reform Act of 1995. Because statements include risks and uncertainties, actual results may differ materially from those expressed or implied and include, but are not limited to, those discussed in filings by the Company with the Securities and Exchange Commission.

-End-

THE ALLIED DEFENSE GROUP, INC.

MECAR CERTIFICATE

The undersigned, being the duly elected Chief Executive Officer and President of The Allied Defense Group, Inc., a Delaware corporation (the “Company”), hereby represents, warrants and certifies solely in his capacity as Chief Executive Officer and President (and not individually), to the Buyers pursuant to Paragraph 1(c) of the Securities Purchase Agreement, dated as of June 19, 2007 (the “Securities Purchase Agreement”), by and among the Company and the investors identified on the Schedule of Buyers attached thereto, as follows (capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Securities Purchase Agreement):

1. On July 11, 2007, Mecar S.A. (the “Supplier”) and Mecar LTD (E.C.) (the “Buyer”) signed and delivered that certain contract (the “MECAR Contract”), whereby the Buyer and the Seller have agreed on certain terms and conditions with respect to orders for the delivery of product for a minimum aggregate value of EUR 110,000,000, to be executed in two tranches, over a two-year period as follows:

(a) The first tranche of the MECAR Contract shall have a value of not less than EUR 60,000,000.

(b) The orders under the MECAR Contract shall have firm fixed price, and all currency risk shall be borne by the Supplier.

(c) For each tranche of the MECAR Contract, (i) the Buyer will provide a down payment of 15-20% against a Counter Bank Guarantee provided by the Supplier, (ii) the Buyer will pay 70-75% of the contract price for each partial shipment and (iii) the remaining 10% will be paid upon completion of the contract.

(d) In accordance with the MECAR Contract, the Buyer may inspect and accept/reject the supplied materials within three months from delivery.

(e) Under the MECAR Contract the maximum fine for delay in delivery is 12% of the total value of the goods not delivered.

(f) The terms of the MECAR Contract provide that costs of transport, shipping, and insurance will be paid by the Supplier to the port of entry.

2. As of the date hereof, the MECAR Contract has been executed and delivered on behalf of the Buyer and the Supplier and constitute the legal, valid and binding obligations of the Buyer and the Supplier enforceable against the Buyer and the Supplier in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

3. On July 11, 2007, the Company issued a press release announcing the execution and delivery of the MECAR Contract.

[The remainder of the page is intentionally left blank]

IN WITNESS WHEREOF, the undersigned has executed this certificate this 11th day of July, 2007.

John J. Marcello
Chief Executive Officer and President
The Allied Defense Group, Inc.
8000 Towers Crescent Drive, Suite 260
Vienna, VA 22182

[THE ALLIED DEFENSE GROUP, INC. LETTERHEAD]

July 12, 2007

By Facsimile and Federal Express

Portside Growth & Opportunity Fund c/o Ramius Capital Group, L.L.C. 666 3rd Avenue, 26th Floor New York, NY 10017 ATTN: Jeffrey Smith Facsimile No. 212-845-7999 Owen Littman Facsimile No. 212-845-7995
Kings Road Investments, Ltd. c/o Polygon Investment Partners LP 399 Park Avenue, 22nd Floor	Schulte Roth & Zabel LLP
New York, NY 10022	919 Third Avenue
ATTN: Erik M. W. Caspersen	New York, NY 10022
Brandon L. Jones	ATTN: Eleazer Klein, Esquire
Facsimile No. 212-359-7303	Facsimile No. 212-593-5955
Castlerigg Master Investment Ltd. c/o Sandell Asset Management 40 West 57th Street, 26th Floor New York, NY 10019 ATTN: Cem Hacioglu Matthew Pliskin Facsimile No. 212-603-5710 LB I Group Inc. c/o Lehman Brothers Inc. 399 Park Avenue	McDermott Will & Emery LLP
New York, NY 10022	340 Madison Avenue
ATTN: Will Yelsits	New York, NY 10173
Eric Salzman	ATTN: Stephen Older, Esquire
Facsimile No. 212-526-3376	Facsimile No. 212-547-5444

Re: Additional Closing Notice under Amended and Restated Securities Purchase

Agreement Dated as of June 19, 2007 (the “SPA”)

Gentlemen:

Pursuant to Section 1(c) of the SPA, The Allied Defense Group, Inc. hereby gives this Additional Closing Notice to each of you, as Buyers under the SPA, requiring each Buyer to purchase, at one closing, the principal amount of Additional Notes as is set forth opposite each Buyer’s name in Column (6) on the Schedule of Buyers to the SPA. The total principal amount of Additional Notes to be issued by the Company, and purchased by the Buyers, at the Additional Closing shall be $10 million, in accordance with the terms of the SPA and the Schedule of Buyers thereto.

The Company proposes that the Additional Closing Date shall be five (5) Business Days from the date of this Additional Closing Notice, which shall be Thursday, July 19, 2007. The principal amount of Additional Notes to be purchased by each Buyer at the Additional Closing is set forth in the attached Schedule.

We look forward to working with you towards consummation of these transactions.

Sincerely yours,

THE ALLIED DEFENSE GROUP, INC.

By:
John J. Marcello
Chief Executive Officer & President

cc: Irving E. Walker, Esquire
James E. Baker, Jr., Esquire

Saul Burian, Managing DirectorSCHEDULE OF ADDITIONAL NOTES
TO BE PURCHASED BY BUYERS

	PRINCIPAL AMOUNT
	OF
BUYER	ADDITIONAL NOTE
Kings Road Investment Ltd.	$	4,166,667
Portside Growth & Opportunity Fund	$	2,500,000
Castlerigg Master Investments Ltd.	$	2,000,000
LB I Group Inc.	$	1,333,333
TOTAL	$	10,000,000