INVESTMENT AGREEMENT
AGREEMENT dated as of March 30, 1994 among Air & Water Technologies Corporation, a
Delaware corporation ("AWT"), Compagnie Generale des Eaux, a French corporation ("CGE")
and its indirectly wholly-owned subsidiary, Anjou International Company, a Delaware
corporation ("Anjou").
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. (a) The following terms, as used herein, have the following meanings:
"Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling,
controlled by, or under common control with such Person; provided that for purposes of this
Agreement (i) PSG and PSG Canada shall not be considered an Affiliate of CGE or Anjou, (ii)
CGE and AWT (and their respective Subsidiaries) shall not he considered Affiliates of one
another and (iii) any joint-venture or partnership by any party hereto with any other Person shall
be deemed not to be an Affiliate of any party hereto.
"Associate" means, when used to indicate a relationship with a Person, a corporation or other
entity of which such Person is, directly or indirectly, the beneficial owner of 15% or more of its
total voting power.
"AWT Benefit Arrangement" means any employment, severance or similar contract or
arrangement (whether or not written) or any plan, policy, fund, program or contract or
arrangement (whether or not written) providing for compensation, bonus, profit-sharing, stock
option, or other stock related rights or other forms of incentive or deferred compensation,
vacation benefits, insurance coverage (including any self-insured arrangements), health or
medical benefits, disability benefits, worker's compensation, supplemental unemployment
benefits, severance benefits and post-employment or retirement benefits (including
compensation, pension, health, medical or life insurance or other benefits) that (i) is not an AWT
Employee Plan, (ii) is entered into, maintained, administered or contributed to, as the case may
be, by AWT, any of its Affiliates or Subsidiaries and (iii) covers any employee or former
employee of AWT or any Subsidiary of A%VT employed in the United States.
"AWT Employee Plan" means any "employee benefit plan", as defined in Section 3(3) of
ERISA, that (i) is subject to any provision of ERISA, (ii) is maintained, administered or
contributed to by AWT or any of its Affiliates or Subsidiaries and (iii) covers any employee or
former employee of AWT or any Subsidiary of AWT.
"AWT International Plan" means any employment, severance or similar contract or arrangement
(whether of not written) or any plan, policy, fund, program or arrangement or contract providing
for compensation, bonus, profit-sharing, stock option, or other stock related rights or other forms
of incentive or deferred compensation, vacation benefits, insurance coverage (including any self-
insured arrangements), health or medical benefits, disability benefits, worker's compensation,
supplemental unemployment benefits, severance benefits and post-employment or retirement
benefits (including compensation, pension, health, medical or life insurance or other benefits)
that (i) is not an AWT Employee Plan or an AWT Benefit Arrangement, 00 is entered into,
maintained, administered or contributed to by AWT or any of its Affiliates and (iii) covers any
employee or former employee of AWT or any Subsidiary of AWT."AWT Proxy Materials" means each document filed by AWT with the Commission in
connection with the meeting of the stockholders of AWT described in Section 6.4 including,
without limitation, the proxy statement of AWT and any amendment or supplement thereto.
"Balance Sheet" means the balance sheet of the PSG Group as of December 31, 1993.
"Basket" means the amount at any time equal to (a) $250,000 plus the reserves for Taxes, if any,
provided for on the books and records of PSG and PSG Canada, minus (b) any reductions (in the
aggregate) made pursuant to Section 8.6(d) hereof.
"Class A Common Stock" means the Class A Common Stock of AWT, par value $.001 per
share.
"Closing Date" means the date of the Closing.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Commission" means the United States Securities and Exchange Commission.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any
successor statute thereto, and the rules and regulations promulgated thereunder.
"ERISA Affiliate" of any entity means any other entity which, together with such entity, would
be treated as a single employer under Section 414 of the Code.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
"Lien" means, with respect to any property or as t, any mortgage, lien, pledge, charge, security
interest, encumbrance or other adverse claim of any kind in respect of such property or sk t. For
the purposes of this Agreement, a Person shall be deemed to own subject to a Lien any property
or asset which it has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement relating to such
property or asset.
"Material Adverse Effect" means a material adverse effect on the condition (financial or
otherwise), business, assets or results of operations of AWT or the PSG Group, as the case may
be, and their respective Subsidiaries, taken as a whole; provided that any continuation of any
existing unfavorable business or financial trend without a material worsening thereof shall be
deemed not to give rise to any Material Adverse Effect."Multiemployer Plan" means each PSG Group Employee Plan or each AWT Employee Plan, as
the case may be, that is a multiemployer plan, as defined in Section 3(37) of ERISA.
“1934 Act" means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means each "defined benefit plan" within the meaning of Section 3(35) of ERISA
other than any such plan which is a Multiemployer Plan.
"Person" means an individual, corporation, partnership, limited liability company, association,
trust or other entity or organization, including a government or political subdivision or an agency
or instrumentality thereof.
"PSG Common Stock" means the Common Stock, par value $1.00 per share, of PSG.
"PSG" means PSG Professional Services Group, Inc., a Minnesota corporation and a wholly-
owned subsidiary of Anjou.
"PSG Group Benefit Arrangement" means any employment, severance or similar contract or
arrangement (whether or not written) or any plan, policy, fund, program or contract or
arrangement (whether or not written) providing for compensation, bonus, profit-sharing, stock
option, or other stock related rights or other forms of incentive or deferred compensation,
vacation benefits, insurance coverage (including any self-insured arrangements), health or
medical benefits, disability benefits, worker's compensation, supplemental unemployment
benefits, severance benefits and post-employment or retirement benefits (including
compensation, pension, health, medical or life insurance or other benefits) that (i) is not a PSG
Group Employee Plan, 00 is entered into, maintained, administered or contributed to, as the case
may be, by CGE. the PSG Group or any of their respective Affiliates and (iii) covers any
employee or former employee of the PSG Group or any Subsidiary of the PSG Group employed
in the United States.
“PSG Canada" means 2815869 Canada, Inc., a Corporation organized under the Canada
Business Corporations Act and a wholly-owned subsidiary of Anjou.
"PSG Group Employee Plan" means any "employee benefit plan", as defined in Section 3(3) of
ERISA, that (i) is subject to any provision of ERISA, (ii) is maintained, administered or
contributed to by CGE, the PSG Group or any of its Affiliates and (iii) covers any employee or
former employee of the PSG Group or any Subsidiary of the PSG Group.
"PSG Group” means, collectively, PSG and PSG Canada.
"PSG Group International Plan" means any employment, severance or similar contract or
arrangement (whether of not written) or any plan, policy, fund, program or arrangement or
contract providing for compensation, bonus, profit-sharing, stock option, or other stock related
rights or other forms of incentive or deferred compensation, vacation benefits, insurance
coverage (including any self-insured arrangements), health or medical benefits, disability
benefits, worker's compensation, supplemental unemployment benefits, severance benefits and
post-employment or retirement benefits (including compensation, pension, health, medical or life
insurance or other benefits) that (i) is not a PSG Group Employee Plan or a PSG Group Benefit
Arrangement, (ii) is entered into, maintained, administered or contributed to by Anjou, the PSG
Group or any of their respective Affiliates and (iii) covers any employee or former employee of
the PSG Group or any Subsidiary of the PSG Group.
"PSG Pension Plan" means the Anjou Pension Plan.
"Series A Preferred" means the Series A Convertible Exchangeable Preferred Stock of AWT, par
value $.01 per share, having the designations, rights and preferences substantially in the form of
Exhibit A hereto.
"Shares" means shares of Class A Common Stock, par value $.001, of AWT.
"Subsidiary" means any entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by PSG or AWT, as the case may be.
"Tax" (and, with correlative meaning, "Taxes" and "Taxable") means (i) any net income,
alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, value
added, transfer, franchise, profits, license, withholding on amounts paid to or by any Person,
payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or
windfall profit tax, custom, duty or other tax, governmental fee or other like assessment or
charge of any kind whatsoever, together with any interest or any penalty, addition to tax or
additional amount imposed by any governmental authority (a "Taxing authority") responsible for
the imposition of any such tax (domestic or foreign), (ii) liability of any Person for the payment
of any amounts of the type described in (i) as a result of being a member of any affiliated,
consolidated. combined or unitary, group or being a party to any agreement or arrangement
whereby liability of a Person for payments of such amounts was determined or taken into
account with reference to the liability of any other Person for any period, and (iii) liability of any
Person for the payment of any amounts of the type described in 0) as a result of any express or
implied obligation to indemnify any other Person.
"Tax Asset” means any net operating loss, net capital loss, investment tax credit, foreign tax
credit, charitable deduction or any other credit or tax attribute which could reduce Taxes
(including, without limitation, deductions and credits related to alternative minimum Taxes).
(b) Each of the following terms is defined in the Section set forth opposite such term:
Term Section
AWT Securities 4.5
Base Stockholder's Equity 2.5
Board 6.5
Closing 2.3
Closing Balance Sheet 2.4
Closing Stockholder's Equity 2.4
Company 10-K 4.6
Company 10-Q 4.6
Exon-Florio 3.3
Final Stockholder's Equity 2.5
Independent Director 7.2
PSG Securities 3.5
Takeover proposal 6.5
Utilities 3.7
ARTICLE 2
PURCHASE AND SALE; MERGER
2.1 Purchase and Sale. Upon the terms and subject to the conditions Of this Agreement:
(a) AWT agrees to sell and CGE agrees to purchase for cash 1,200,000 shares of
Series A Preferred for an aggregate purchase price of $60,000,000; and
(b) Anjou agrees to exchange (the "Exchange”) all of the Outstanding Capital
Stock of PSG Canada for, and AWT agrees to issue, 650,000 Shares of Class A Common
Stock.
The foregoing consideration shall be paid or exchanged in accordance with Section 2.3. The
Exchange consideration received by Anjou shall be adjusted as provided in Section 2.5.
2.2 The Merger. (a) At Closing, AWT and Anjo shall cause a newly formed Minnesota
subsidiary (the "Merger Subsidiary”) to be merged (the "Merger") with and into PSG in
accordance with the terms and provisions of a Plan of Merger, substantially in the form of
Exhibit B hereto, whereupon the separate existence of Merger Subsidiary shall cease, and the
PSG shall be the surviving corporation.
(b) As provided for in the Plan Of Merger, all PSG Common Stock outstanding immediately
prior to the effective time of the Merger shall, except as Otherwise provided therein, be
converted into the right to receive in the aggregate 5,850,000 shares Of Class A Common Stock.
(c) The merger consideration received by Anjou shall be adjusted as provided in Section 2.5.
2.3 Closing. The closing (the "Closing") of the transactions contemplated hereby shall take place
at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York as soon
as practicable, but in no event later than 10 business days, after satisfaction of the conditions set
forth in Article 10, or at such other time or place as AWT and CGE may agree. At the Closing:
(a) AWT shall deliver to (i) Anjou one or more certificates for the Class A
Common Stock received in connection with the Exchange and the Merger. registered in
the name of Anjou, and (ii) CGE one or more certificates for the Series A Preferred,
registered in the name of CGE (or such other Person as CGE may designate to AWT no
later than two business days prior to the Closing).
(b) CGE shall deliver to AWT $60,000,000 in immediately available funds by
wire transfer to an account of AWT designated by AWT, by notice to CGE, no later than
two business days prior to the Closing).
(c) Anjou shall deliver to AWT all outstanding capital stock of PSG Canada along
with duly endorsed stock powers in the name of AWT.
2.4 Closing Balance Sheet. (a) As promptly as practicable, but no later than 60 days, after the
Closing Date, Anjou will cause to be prepared and delivered to AWT, at Anjou's expense, the
Closing Balance Sheet, together with an unqualified report of Arthur Andersen & Co., Houston,
Texas office, thereon, and a certificate based on such Closing Balance Sheet setting forth Anjou's
calculation of Closing Stockholder's Equity. The Closing Balance Sheet ("Closing Balance
Sheet") shall (x) fairly present the financial position of the PSG Group as at the close of business
on the Closing Date in accordance with generally accepted accounting principles applied on a
basis consistent with those used in the preparation of the Balance Sheet, (y) include line items
substantially consistent with those in the Balance Sheet, and (z) be prepared in accordance with
accounting policies and practices consistent with those used in the preparation of the Balance
Sheet. "Closing Stockholder's Equity" means the stockholder's equity of the PSG Group as
shown on the Closing Balance Sheet (which shall exclude all intercompany accounts, which shall
be settled or capitalized pursuant to Section 7. 1), with the following adjustments: less all cash
and cash equivalents and all assets that in accordance with generally accepted accounting
principles would be classified as intangible assets, including but not limited to goodwill, patents,
trademarks and unamortized debt discount.
(b) If AWT disagrees with Anjou's calculation of Closing Stockholder's Equity delivered
pursuant to Section 2-4(a) and the amount of any such disagreement is in excess of $250,000,
AWT may, within 30 days after delivery of the documents referred to in Section 2.4(a), deliver a
notice to Anjou disagreeing with such calculation and setting forth AWT's calculation of such
amount. Amy such notice of disagreement shall specify those items or amounts as to which
AWT disagrees, and AWT shall be deemed to have agreed with all other items and amounts
contained in the Closing Balance Sheet and the calculation of Closing Stockholder's Equity
delivered pursuant to Section 2.4(a).
(c) If a notice of disagreement shall be delivered pursuant to Section 2.4(b), Anjou and AWT
shall, during the 10 days following such delivery, use their best efforts to reach agreement on the
disputed items or amounts in order to determine, as may be required, the amount of Closing
Stockholder's Equity, which amount shall not be more than the amount thereof shown in Anjou's
calculations delivered pursuant to Section 2.4(b) nor less than the amount thereof shown in
AWT’s calculation delivered pursuant to Section 2.4(b). If, during such period, Anjou and AWT
are unable to reach such agreement, they shall promptly thereafter cause independent
accountants of nationally recognized standing reasonably satisfactory to AWT and Anjou (who
shall not have any material relationship with AWT, Anjou or CGE), promptly to review this
Agreement and the disputed items or amounts for the purpose of calculating Closing
Stockholder's Equity. In making such calculation, such independent accountants shall consider
only those items or amounts in the Closing Balance Sheet or Anjou's calculation of Closing
Stockholder's Equity as to which AWT has disagreed. Such independent accountants shall
deliver to Anjou and AWT, as promptly as practicable, a report setting forth such calculation.
Such report shall be final and binding upon Anjou and AWT. The cost of such review and report
shall be borne equally by the parties.(d) Anjou and AWT agree that they will, and agree to cause their respective independent
accountants and the PSG Group to, cooperate and assist in the preparation of the Closing Balance
Sheet and the calculation of Closing Stockholder's Equity and in the conduct of the audits and
reviews referred to in this Section. including without limitation, the making available to the
extent necessary of books, records, work papers and personnel.
2.5 Adjustment of Purchase Price. (a) If Base Stockholder's Equity exceeds Final Stockholder's
Equity, Anjou shall pay to AWT, as an adjustment to the consideration received in the Exchange
and the Merger, in the manner and with interest as provided in Section 2-5(b), the amount of
such excess.*If Final Stockholder's Equity exceeds Base Stockholder's Equity, AWT shall pay to
Anjou, in the manner and with interest as provided in Section 2.5(b), the amount of such excess.
"Base Stockholder's Equity" calculated on the same basis as the Closing Stockholder's Equity is
$12,741,000. "Final Stockholder's Equity" means the Closing Stockholder's Equity (i) as shown
in Anjou's calculation delivered pursuant to Section 2.4(a), if no notice of disagreement with
respect thereto is duly delivered pursuant to Section 2.4(b); or (ii) if such a notice of
disagreement is delivered, (A) as agreed by AWT and CGE pursuant to Section 2.4(c) or (B) in
the absence of such agreement, as shown in the independent accountants' calculation delivered
pursuant to Section 2.4(c); provided that, in no event shall Final Stockholder's Equity be more
than Anjou's calculation of Closing Stockholder's Equity delivered pursuant to Section 2-4(a) or
less than AWT’s calculation of Closing Stockholder's Equity delivered pursuant to Section 2.4(b).
(b) Any payment pursuant to Section 2.5(a) shall be made at a mutually convenient time and
place within 10 days after the Final Stockholder's Equity has been determined by delivery (i) in
the case of AWT of shares of Class A Common Stock registered in the name of Amjou or (ii) in
the case of Anjou, of a certified or official bank check payable in immediately available funds to
AWT or by causing such payments to be credited to such account of AWT as may be designated
by AWT. The amount of any payment of cash or Class A Common Stock, as the case may be, to
be made pursuant to this Section shall bear interest from and including the Closing Date to but
excluding the date of payment at a rate per annum equal to the Prime Rate in effect from time to
time during the period from the Closing Date to the date of payment. The amount of such interest
shall be payable in cash or shares of Class A Common Stock, as applicable, at the same time as
the payment to which it relates and shall be calculated daily on he basis of a year of 365 days and
the actual number of days elapsed. The price per share of any Class A Common Stock delivered
by AWT pursuant to this Section 2.5 shall be $10. Notwithstanding anything to the contrary in
that Section 2.5, in no event shall AWT be required to pay an adjustment with respect to an
increase in the stockholder's equity of PSG Canada to the extent such adjustment exceeds
324,000 shares of Class A Common Stock.2.6 Legending of Securities. All securities to be issued to Anjou or CGE by AWT hereunder
shall bear the following legend:
"The securities represented hereby have not been registered under the Securities Act of
1933, as amended, and my not be offered, sold, transferred or otherwise disposed of
unless registered with the Securities and Exchange Common of the United States and the
securities regulatory authorities of applicable states or unless an exemption from such
registration is available."
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF ANJOU AND CGE
CGE and Anjou jointly and severally represent and warrant to AWT as of the date hereof and as
of the Closing Date that:
3.1 Corporate Existence and Power. Each of CGE, Anjou, PSG and PSG Canada is a corporation
duly incorporated, validly existing and in good standing under the laws of its jurisdiction of
incorporation and has all corporate powers and all governmental licenses, authorizations,
permits. consents and approvals required to carry on its business as now conducted, except for
those licenses, authorizations, permits, consents and approvals the absence of which would not,
individually or in the aggregate, have a Material Adverse Effect. Each of PSG and PSG Canada
is duly qualified to do business as a foreign corporation and is in good standing in each
jurisdiction where such qualification is necessary, except for those jurisdictions where failure to
be so qualified would not, individually or in the aggregate, have a Material Adverse Effect.
Anjou has heretofore delivered to AWT true and complete copies of the articles of incorporation
and bylaws of each of PSG and PSG Canada as currently in effect.
3.2 Corporate Authorization. The execution, delivery and performance by Anjou and CGE of this
Agreement are within their respective corporate powers and have been duly authorized by all
necessary corporate action on the part of each of Anjou and CGE. This Agreement constitutes a
valid and binding agreement of each of Anjou and CGE enforceable against it in accordance with
its terms.
3.3 Governmental Authorization. The execution, delivery and performance by each of CGE and
Anjou of this Agreement require no action by or in respect of, or filing with, any governmental
body, agency, or official other than (i) compliance with any applicable requirements of the HSR
Act; (ii) compliance with the provisions of the Omnibus Trade and Competitiveness Act of 1988,
as amended ("Exon-Florio"); (iii) any filings to be made in Minnesota or Delaware, as the case
may be, in connection with the Merger and the Certificate of Designations of the Series A
Preferred; and (iv) any such action or filing as to which the failure to make or obtain would not,
individually or in the aggregate, have a Material Adverse Effect.
3.4 Non-Contravention. The execution, delivery and performance by CGE and Anjou of this
Agreement do not and will not (i) violate the charter or bylaws of Anjou, PSG or PSG Canada or
the constituent documents of CGE, (ii) assuming compliance with the matters referred to in
Section 3.3, violate any applicable law, rule, regulation, judgment, injunction, order or decree or
(iii) require any consent or other action by any Person under, constitute a default under, or give
rise to any right of termination, cancellation or acceleration of any right or obligation of the PSG
Group or to a loss of any benefit to which the PSG Group is entitled under, any agreement or
other instrument binding upon the PSG Group or any license, franchise, permit or other similar
authorization held by the PSG Group, except in the case of clauses (ii) and (iii) to the extent that
any such violation, failure to obtain any such consent or other action, default, right, loss would
not, individually or in the aggregate, have a Material Adverse Effect.
3.5 Capitalization. (a) The authorized capital stock of PSG consists of 2,000 shares of Common
Stock, par value $1.00 per share. As of the date hereof, there were outstanding 1,250 shares of
Common Stock of PSG. The authorized capital stock of PSG Canada consists of unlimited shares
of Common Stock, par value Canadian $1.00 per share. As of the date hereof, there were
outstanding 190,000 shares of Common Stock of PSG Canada.
(b) All outstanding shares of capital stock of the PSG Group have been duly authorized and
validly issued and are fully paid and non-assessable. Except as set forth in this Section 3.5, there
are no outstanding (i) shares of capital stock or voting securities of the PSG Group, (ii) securities
of the PSG Group convertible into or exchangeable for shares of capital stock or voting securities
of the PSG Group or (iii) options or other rights to acquire from the PSG Group, or other
obligation of the PSG Group to issue, any capital stock, voting securities or securities convertible
into or exchangeable for capital stock or voting securities of the PSG Group (the items in clauses
(i), (ii) and (iii) being referred to collectively as the "PSG Securities"). There are no outstanding
obligations of the PSG Group to repurchase, redeem or otherwise acquire any PSG Securities.
3.6 Ownership of Shares. Except as disclosed in Schedule 3.6, Anjou is the registered and
beneficial owner of all outstanding shares of capital stock of the PSG Group, free and clear of
any Lien and any other limitation or restriction (including any restriction on the right to vote, sell
or otherwise dispose of such capital stock).
3.7 Subsidiaries. None of PSG and PSG Canada has any Subsidiaries, except for Utilities
Services Group, Inc., a Texas corporation ("Utilities"), which has no assets and is inactive.
3.8 Financial Statements. The audited balance sheets of the PSG Group as of December 31, 1992
and December 31, 1993 and the related statements of income and cash flows for each of the
years ended December 31, 1992 and December 31, 1993,.present fairly, in all material respects,
the financial position of the PSG Group as of the dates thereof and its results of operations and
changes in cash flows for the periods then ended in conformity with generally accepted
accounting principles applied on a consistent basis (except as may be indicated in the notes
thereto).
3.9 AWT Proxy Materials. The information with respect to CGE, Anjou or the PSG Group and
their subsidiaries that has been furnished to AWT in writing specifically for use in any AWT
Proxy Materials, each time an), AWT Proxy Materials are distributed to stockholders of AWT or
any other solicitation of stockholders of AWT is made by or on behalf of AWT or any Affiliate
of AWT, and at the time the stockholders of AWT vote on the issuance of AWT Securities
pursuant to this Agreement will not include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein, in the light of the
circumstances under which such statements were made, not misleading or necessary to correct
any statement in any earlier communication with respect to the solicitation of a proxy for the
same meeting or subject matter which has become false or misleading.
3. 10 Absence of Certain Changes. Except as set forth on Schedule 3. 10, since December 31,
1993, the business of the PSG Group has been conducted in the ordinary course consistent with
past practices and there has not been:
(i) any event, occurrence, development or state of circumstances or facts which
has had or would reasonably be expected to have a Material Adverse Effect;
(ii) any declaration, setting aside or payment of any dividend or other distribution
with respect to any shares of capital stock of the PSG Group, or any repurchase,
redemption or other acquisition by the PSG Group of any outstanding shares of capital
stock or other securities of, or other ownership interests' in, the PSG Group;
(iii) any amendment of any material term of any outstanding security of the PSG
Group;
(iv) any incurrence, assumption or guarantee by the PSG Group of any
indebtedness for borrowed money, except in the ordinary course of business consistent
with past practices;
(v) any sale, transfer or other disposition of a material amount of the assets of the
PSG Group;
(vi) any creation or assumption by the PSG Group of any Lien on any material a t
other than in the ordinary course of business consistent with past practices;
(vii) any damage, destruction or other casualty loss (whether or not covered by
insurance) affecting the business or assets of PSG which, individually or in the aggregate,
has had or would reasonably be expected to have a Material Adverse Effect;
(viii) any change in any method of accounting or application thereof by the PSG
Group;
(ix) except as previously disclosed to AWT, any (A) written employment,
deferred compensation, severance, retirement or other similar agreement entered into
with any director, officer or employee of the PSG Group (or any amendment to any such
existing agreement), (B) grant of any severance or termination pay to any director, officer
or employee of the PSG Group, or (C) change in compensation or other benefits payable
to any director, officer or employee of the PSG Group pursuant to any severance or
retirement plans or policies thereof, other than in the ordinary course of business
consistent with past practices; or(x) any labor dispute, other than routine individual grievances, or any activity or
proceeding by a labor union or representative thereof to organize any employees of the
PSG Group, which employees were not subject to a collective bargaining agreement at
December 31, 1993, or any lockouts, strikes, slowdowns, work stoppages or threats
thereof by or with respect to any employees of the PSG Group.
3.11 No Undisclosed Material Liabilities. There are no liabilities of the PSG Group of any kind
whatsoever, whether accrued, contingent, absolute or otherwise, and there is no existing
condition, situation or set of circumstances which would result in such a liability, other than:
(a) liabilities Provided for in the Balance Sheet or disclosed in the notes thereto:
(b) liabilities disclosed on Schedule 11; and
(c) other undisclosed liabilities which, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect.
3.12 Intercompany Accounts. Schedule 3.12 contains a complete list of all intercompany
balances as of December 31, 1993 between CGE, Anjou and their Affiliates, on the one hand,
and the PSG Group, on the other hand. Since December 31, 1993 there has not been any accrual
of liability by the PSG Group to CGE or Anjou or any of their respective Affiliates or other
transaction between the PSG Group and CGE or Anjou and any of their respective Affiliates,
except in the ordinary course of business of the PSG Group consistent with past practices.
3.13 Material Contracts. (a) Except as disclosed in Schedule 3.13, and except for any agreements
that are terminable on not more than 90 days notice and without the payment of any penalty by,
or any other material consequence to, the PSG Group, the PSG Group is not a party to or bound
by:
(i) any sales, distribution or other similar agreement providing for the sale by the
PSG Group of materials, supplies, goods, services, equipment or other assets that
provides for either (A) annual payments to the PSG Group of $2,000,000 or more or (B)
aggregate payments to the PSG Group of $2,000,000 or more;
(ii) any partnership, joint venture or other similar agreement or arrangement;
(iii) any agreement relating to indebtedness for borrowed money or the deferred
purchase price of property (in either case, whether incurred, assumed, guaranteed or
secured by any asset); or
(iv) any agreement that limits the freedom of the PSG Group to compete in any
line of business or with any Person or in an), geographic area or which would so limit the
freedom of the PSG Group after the Closing Date.
(b) Each agreement, commitment, arrangement or plan disclosed in any Schedule to this
Agreement or required to be disclosed pursuant to this Section is a valid and binding agreement
of the PSG Group and is in full force and effect, and the PSG Group is not nor, to the knowledge
of CGE or Anjou, is any other party thereto in default or breach in any material respect under the
terms of any such agreement, contract, plan, lease, arrangement or commitment.
3.14 Litigation. Except as set forth on Schedule 3.14, there is no action, suit, investigation or
proceeding pending against, or to the knowledge of CGE or Anjou threatened against or
affecting, CGE, Anjou or the PSG Group or any of their respective properties before any court or
arbitrator or any governmental body, agency or official (i) which would reasonably be expected
to have a Material Adverse Effect or 60 which in any manner challenges or seeks to prevent,
enjoin, alter or materially delay the transactions contemplated by this Agreement.
3.15 Compliance with Laws and Court Orders. No Defaults. (a) The PSG Group is not in
violation of any applicable law, rule, regulation, judgement, injunction, order or decree except
for violations that have not had and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
(b) The PSG Group is not in default under. and no condition exists that with notice or lapse of
time or both would constitute a default under, any agreement or other instrument binding upon
the PSG Group or any license, franchise, permit or similar authorization held by the PSG Group,
which defaults or potential defaults, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect.
3.16 Insurance Coverage. PSG has furnished to AWT a list of, and true and complete copies of,
all insurance policies and fidelity bonds relating to the assets, business, operations, employees,
offices or directors of the PSG Group. There is no claim by the PSG Group pending under any of
such policies or bonds as to which coverage has been questioned, denied or disputed by the
underwriters of such policies or bonds or in respect of which such underwriters have reserved
their rights, except for such claims which, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect. All premiums payable under all such policies and
bonds have been paid timely and the PSG Group has otherwise complied fully with the terms and
conditions of all such policies and bonds. Such policies of insurance and bonds (or other policies
and bonds providing substantially similar insurance coverage) have been in effect since January
1, 1994 and remain in full force and effect. Such policies and bonds are of the type and in
amounts customarily carried by Persons conducting businesses similar to those of the PSG
Group. The PSG Group shall after the Closing continue to have coverage under such policies and
bonds with respect to events occurring prior to the Closing.
3.17 Finders' Fees: Certain Payments. (a) Except for Lazard Freres & Co. whose fees will be
paid by CGE, there is no investment banker, broker, finder or other intermediary which has been
retained by or is authorized to act on behalf of CGE, Anjou or the PSG Group who might be
entitled to any fee or commission in connection with the transactions contemplated by this
Agreement.(b) All payments by or for the benefit of the PSG Group to agents, consultants and others have
been in payment of bona fide fees and commissions.
3.18 Employee Benefit Plans. (a) Schedule 3.18 identifies each PSG Group Employee Plan.
Anjou has furnished or made available to AWT copies of the PSG Group Employee Plans (and,
if applicable, related trust agreements) and all amendments thereto and written interpretations
thereof together with (i) the most recent annual report prepared in connection with any PSG
Group Employee Plan (Form 5500 including, if applicable, Schedule B thereto) and (ii) if
applicable, the most recent actuarial valuation report prepared in connection with any PSG
Group Employee Plan.
(b) Neither Anjou nor any of its ERISA Affiliates has incurred, or reasonably expects to incur
prior to the Closing Date, any liability under Title IV of ERISA arising in connection with the
termination of, or complete or partial withdrawal from, any plan covered or previously covered
by Title IV of ERISA that could become a liability of AWT or any of its ERISA Affiliates after
the Closing Date. To the best knowledge of Anjou, no condition exists that (i) could constitute
grounds for termination by the PBGC of any PSG Group Employee Plan that is subject to Title
IV of ERISA that is maintained solely by Anjou or any of its ERISA Affiliates or (ii) presents a
material risk of complete or partial withdrawal from any Multiemployer Plan under Title IV of
ERISA other than a complete or partial withdrawal that would not have a Material Adverse
Effect.
(c) Each PSG Group Employee Plan (other than a Multiemployer Plan) that is intended to be
qualified under Section 401(a) of the Code has been determined by the Internal Revenue Service
to be so qualified or can become so qualified within the remedial amendment period of Section
401(b) of the Code and to the best knowledge of Anjou, no event has occurred since the date of
such determination that would adversely affect such qualification or affect the ability to become
so qualified within the remedial amendment period of Section 401(b) of the Code; each trust
created under any such Plan has been determined by the Internal Revenue Service to be exempt
from tax under Section 501 (a) of the Code or can be so determined within the aforesaid remedial
amendment period and, to the best knowledge of Anjou, no event has occurred since the date of
such determination that would adversely affect such exemption or affect the ability to be
determined to be exempt within the aforesaid remedial amendment period. Anjou has furnished
or made available to AWT the most recent determination letter of the Internal Revenue Service
relating to each such PSG Group Employee Plan. To the best knowledge of Anjou, each PSG
Group Employee Plan (other than a Multiemployer Plan) has been maintained in substantial
compliance with its terms and substantially with the requirements prescribed by any and all
applicable statutes, orders, rules and regulations, including but not limited to ERISA and the
Code, except for any instance of non-compliance that would not have a Material Adverse Effect.
(d) Schedule 3.18 identifies each PSG Group Benefit Arrangement. Anjou has furnished or made
available to AWT copies or descriptions of each PSG Group Benefit Arrangement. To the best
knowledge of Anjou, each PSG Group Benefit Arrangement has been maintained in substantial
compliance with its terms and with the requirements prescribed by any and all applicable
statutes, orders, rules and regulations, except for any instance of non-compliance that would not
have a Material Adverse Effect.(e) Schedule 3.18 identifies each PSG Group International Plan. Anjou has furnished to AWT
copies of each PSG Group International Plan. To the best knowledge of Anjou, each PSG Group
International Plan has been maintained in substantial compliance with its terms and with the
requirements prescribed by any and all applicable statutes, orders, rules and regulations
(including any special provisions relating to qualified plans where such Plan was intended to so
qualify) and has been maintained in good standing with applicable regulatory authorities, except
for any instance of non-compliance or failure to be so maintained that would not, in either case,
have a Material Adverse Effect.
(f) All representations and warranties contained in the foregoing subsections of this Section 3.18
are subject to such limitations and exceptions as are specifically noted in Schedule 3.18.
3.19 Taxes. Except as set forth on the Balance Sheet (including the notes thereto) and except for
Taxes, the liability for which would not, individually or in the aggregate, reasonably -be
expected to have a Material Adverse Effect, (i) all material Tax returns, statements, reports and
forms required to be filed with any Taxing authority by or on behalf of PSG (collectively, the
"Returns"), have been or will be filed when due in accordance with all applicable laws except
where failure to so file would not subject PSG to liabilities or penalties; (ii) as of the time of
filing, the Returns correctly reflected in all material respects (and, as to any Returns not filed as
of the date hereof, will correctly reflect) the facts regarding the income, business, assets,
operations, activities and status of PSG; (iii) PSG has timely paid, withheld or made provision
for all Taxes shown as due and payable on the Returns that have been filed; (iv) the charges,
accruals and reserves for Taxes with respect to PSG for any Tax period (or portion thereof)
ending on or before the Closing Date (excluding any provision for deferred income taxes)
reflected on the books of PSG are adequate to cover such Taxes; (v) PSG is not delinquent in the
payment of any material Tax and has not requested any extension of time within which to file or
send any Return, which Return has not since been filed or sent; (vi) neither PSG (nor any
member of any affiliated or combined group of which PSG is or has been a member) has granted
any extension or waiver of the limitation period applicable to any Returns; (vii) there is no claim,
audit, action, suit, proceeding or investigation now pending or threatened against or with respect
to PSG of which PSG or Anjou is aware in respect of any material Tax or assessment; and (viii)
there are no material liens for Taxes upon the assets of PSG except liens for current Taxes not
yet due.
3.20 Environmental Matters. To the best of CGE's and Anjou's knowledge there are no liabilities
of the PSG Group which (a) arise under or relate to matters covered by Environmental Laws, (b)
are attributable to actions occurring or conditions existing on or prior to the Closing Date and (c)
would reasonably be expected to have a Material Adverse Effect.
"Environmental Laws” means any and all federal, state and local statutes, laws, regulations,
rules, judgments and orders relating to the environment, to emissions, discharges or releases of
pollutants, contaminants, hazardous substances or hazardous or toxic wastes into the
environment or to the handling, use, storage, transportation or disposal thereof.3.21 Properties. (a) The PSG Group has good title to, or in the case of leased property has valid
leasehold interests in, all property and assets (whether real or personal, tangible or intangible)
reflected on the Balance Sheet or acquired after December 31, 1993, except for property and
assets sold since December 31, 1993 in the ordinary course of business consistent with past
practices.
(b) The plants, buildings, structures and equipment owned or leased by the PSG Group (i) have
no material defects, are in good operating condition and repair and have been reasonably
maintained consistent with standards generally followed in the industry (giving due account to
the age and length of use of same, ordinary wear and tear excepted) and (ii) comply in all
material respects with applicable zoning and other applicable land-use regulations.
3.22 Receivables. All accounts receivable of the PSG Group are fully collectible in the aggregate
amount thereof, subject to normal and customary trade discounts, less any reserves for doubtful
accounts recorded on the Balance Sheet and subsequent to December 31, 1993 in the ordinary
course of business consistent with past practices.
3.23 Purchase for Investment. Each of CGE and Anjou is acquiring the Series A Preferred and
the Shares, respectively, for investment for its own account and not with a view to, or for sale in
connection with, any distribution any such shares. Each of CGE and Anjou (either alone or
together with its advisors) has sufficient knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks of its investments in AWT and is
capable of bearing the economic risks of such investment.
3.24 Other Information. None of the documents or information delivered to AWT by any of
CGE, Anjou or PSG in connection with its due diligence investigation of the PSG Group
contains any untrue statement of a material fact or omits to state a material fact necessary in
order to make the statements contained therein, in the light of the circumstances under which
such statements were made, not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF AWT
AWT represents and wan-ants to each of CGE and Anjou as of the date hereof and as of the
Closing Date that:
4.1 Corporate Existence and Power. AWT is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and has all corporate powers and
all governmental licenses, authorizations, permits, consents and approvals required to carry on its
business as now conducted, except for those licenses, authorizations, permits, consents and
approvals the absence of which would not, individually or in the aggregate, have a Material
Adverse Effect.
4.2 Corporate Authorization. (a) The execution, delivery and performance by AWT of this
Agreement are within the corporate powers of AWT and, except for any required approval by
AWT's stockholders, have been duly authorized by all necessary corporate action on the part of
AWL This Agreement constitutes a valid and binding agreement of AWT enforceable against it
in accordance with its terms.
(b) The Shares and the Series A Preferred, when issued and delivered to and paid for by Anjou
and CGE, as the case may be, pursuant to this Agreement, will be validly issued, fully paid and
non-assessable, and such Shares and Series A Preferred will be free of pre-emptive or similar
rights. The Shares reserved for issuance upon conversion of the Series A Preferred have been
duly authorized by AWT and reserved for issuance upon such conversion and, when issued upon
such conversion in accordance with the terms of the Certificate of Designations for the Series A
Preferred, will have been validly issued, fully paid and nonassessable, and such Shares will be
free of pre-emptive or similar rights.
4.3 Governmental Authorization. The execution, delivery and performance by AWT of this
Agreement require no action by or in respect of, or filing with, any governmental body, agency
or official other than (i) compliance with any applicable requirements of the HSR Act, (ii)
compliance with any applicable requirements of the 1934 Act; (iii) compliance with the rules and
regulations of the American Stock Exchange: (iv) any filings to be made in Minnesota or
Delaware, as the case may be, in connection with the Merizer and the Certificate of Designations
of the Series A Preferred; and (v) any such action or filing as to which the failure to make or
obtain would not, individually or in the aggregate, have a Material Adverse Effect.
4.4 Non-Contravention. The execution, delivery and performance by AWT of this Agreement do
not and will not (i) violate the certificate of incorporation or bylaws of AWT or (ii) assuming
compliance with the matters referred to in Section 4.3, violate any applicable law, rule,
regulation, judgment, injunction, order or decree except, in the case of clause (ii), to the extent
that any such violation would not, individually or in the aggregate, have a Material Adverse
Effect.
4.5 Capitalization. (a) The authorized capital stock of AWT consists of 100,000,000 shares of
Common Stock, par value 50.001 per share and 2,500,000 shares of preferred stock, par value
$0.01 per share. As of the date hereof, there were outstanding (i) 25,313,281 shares of Common
Stock, (ii) no shares of prefer-red stock, (iii) $115,000,000 aggregate principal amount of 8%
Convertible Subordinated Debentures, convertible into shares of Class A Common Stock at a
conversion price of $30.00 per share and (iv) employee stock options to purchase an aggregate of
2,197,025 Shares (of which options to purchase an aggregate of 891.580 Shares were
exercisable).
(b) All outstanding Shares have been duly authorized and validly issued and are fully paid and
nonassessable. Except as set forth in this Section 4.5, there are no outstanding (i) shares of
capital stock or voting securities of AWT, (ii) securities of AWT convertible into or
exchangeable for shares of capital stock or voting securities of AWT or (iii) options or other
rights to acquire from AWT, or other obligation of AWT to issue, any capital stock, voting
securities or securities convertible into or exchangeable for capital stock or voting securities of
AWT (the items in clauses (i), (ii) and (iii) being referred to collectively as the "AWT
Securities"). There are no outstanding obligations of PSG to repurchase, redeem or otherwise
acquire any A',VT Securities.4.6 SEC Filings. (a) AWT has delivered to CGE the annual report on Form 10-K for its fiscal
year ended October 31, 1993 (the "Company 10-K-) and the quarterly report on Form 10-Q for
its quarter ended January 31, 1994 (the "Company 10-Q”).
(b) As of its respective filing date, the Company 10-K and the Company 10-Q did not contain
any untrue statement of a material fact or omit to state any material fact necessary in order to
make the statements made therein, in the light of the circumstances under which they were made,
not misleading.
4.7 Financial Statements. (a) The audited consolidated financial statements for the fiscal years
ended October 31, 1992 and October 31, 1993 of AWT included in the Company 10-K and (b)
the unaudited consolidated financial statements for the quarter ended January 31, 1994 of AWT
included in the Company 10-Q as filed with the Commission fairly present, in conformity with
generally accepted accounting principles applied on a consistent basis (except as may be
indicated in the notes thereto and except for normal year-end adjustments), the consolidated
financial position of the Company and its consolidated subsidiaries as of the dates thereof and
their consolidated results of operations and statement of cash flows for the periods then ended.
4.8 Absence of Certain Changes. Except as set forth on Schedule 4.8, since January 31, 1994, the
business of AWT has been conducted in the ordinary course consistent with past practices and
there has not been.
(i) any event, occurrence, development or state of circumstances or facts which
has had or would reasonably be expected to have a Material Adverse Effect; (ii) any declaration, setting aside or payment of any dividend or other distribution
with respect to any shares of capital stock of AWT, or any repurchase, redemption or
other acquisition by AWT of any outstanding shares of capital stock or other securities
of, or other ownership interests in, AWT;
(iii) any amendment of any material term of any outstanding security of AWT;
(iv) any incurrence, assumption or guarantee by AWT of any indebtedness for
borrowed money, except in the ordinary course of business consistent with past practices;
(v) any creation or assumption by AWT of any Lien on any material asset other
than in the ordinary course of business consistent with past practices;
(vi) any damage, destruction or other casualty loss (whether or not covered by
insurance) affecting the business or assets of AWT which, individually or in the
aggregate, has had or would reasonably be expected to have a Material Adverse Effect;
(vii) any change in any method of accounting or accounting practice by AWT;
(viii) any (A) employment, deferred compensation, severance, retirement or other
similar agreement entered into with any director, officer or employee of AWT (or any
amendment to any such existing agreement), (B) grant of any severance or termination
pay to any director, officer or employee of AWL or (C) change in compensation or other
benefits payable to any director, officer or employee of AWT pursuant to any severance
or retirement plans or policies thereof, other than in the ordinary course of business
consistent with past practices; or
(ix) any labor dispute, other than routine individual grievances or any activity or
proceeding by a labor union or representative thereof to organize any employees of
AWT, which employees were not subject to a collective bargaining agreement at January
31, 1994, or any lockouts, strikes, slowdowns, work stoppages or threats thereof by or
with respect to any employees of AWT.
4.9 No Undisclosed Material Liabilities. Other than liabilities disclosed, or provided for, in the
Company 10-Q or otherwise disclosed to CGE in writing, (i) there exist no liabilities of AWT or
its consolidated Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute or
otherwise and (ii) there is no existing condition, situation or set of circumstances which would
result in such a liability, except in the case of each of clauses (i) and (ii) for liabilities that ,
individually or in the aggregate, have not had and would not reasonably be expected to have a
Material Adverse Effect.
4. 10 AWT Proxy Materials. (a) The AWT Proxy Materials will, when filed, comply as to form
in all material respects with the applicable requirements of the 1934 Act.
(b) Each time any AWT Proxy Materials are distributed to stockholders of AWT or any other
solicitation of stockholders of AWT is made by or on behalf of AWT or any Affiliate of AWT,
and at the time the stockholders of AWT vote on the issuance of AWT Securities pursuant to this
Agreement, the AWT Proxy Materials (as supplemented and amended, if applicable) will not
include an untrue statement of a material fact or omit to state any material fact necessary i n order
to make the statements made therein, in the light of the circumstances under which the
statements were made, not misleading, or necessary to correct any statement in any earlier
communication with respect to the solicitation of a proxy for the same meeting or subject matter
which has become false or misleading. The representations and warranties contained in this
Section 4.10 will not apply to statements or omissions included in the AWT Proxy Materials
based upon information furnished to AWT in writing by CGE, Anjou or PSG specifically for use
therein.
4.11 Compliance with Contracts. Neither AWT nor any of its Subsidiaries is in default under,
and no condition exists that with notice or lapse of time or both would constitute a default under,
(i) any mortgage, loan agreement, indenture or evidence of indebtedness, for borrowed money to
which AWT or any of its Subsidiaries is a party or by which AWT or any of its Subsidiaries or
any material amount of their assets is bound or (ii) any judgment, order or injunction of any
court, arbitrator or governmental body, agency, official or authority which defaults or potential
defaults under either clauses (i) or (ii), individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect.4.12 Litigation. Except as disclosed in Schedule 4.12, there is no action, suit, investigation or
proceeding pending against, or to the knowledge of AWT threatened against or affecting, AWT
before any court or arbitrator or any governmental body, agency or official (i) which would
reasonably be expected to have a Material Adverse Effect or (ii) which in any manner challenges
or seeks to prevent, enjoin, alter or materially delay the transactions contemplated by this
Agreement.
4.13 Compliance with Laws and Court Orders; No Defaults. (a) AWT is not in violation of any
applicable law, rule, regulation, judgement, injunction, order or decree except for violations that
have not had and would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(b) AWT is not in default under, and no condition exists that with notice or lapse of time or both
would constitute a default under, any agreement or other instrument binding upon AWT or any
license, franchise, permit or similar authorization held by AWT, which defaults or potential
defaults, individually or in the aggregate, would reasonably be expected to have a Material
Adverse Effect.
4.14 Insurance Coverage. AWT has furnished to Anjou a list of, and true and complete copies of,
all insurance policies and fidelity bonds relating to the assets, business, operations, employees,
officers or directors of AWT. There is no claim by AWT pending under any of such policies or
bonds as to which coverage has been questioned, denied or disputed by the underwriters of such
policies or bonds or in respect of which such underwriters have reserved their rights, except for
such claims which, individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect. All premiums payable under all such policies and bonds have been paid
timely and AWT has otherwise complied fully with the terms and conditions of all such policies
and bonds. Such policies of insurance and bonds (or other policies and bonds providing
substantially similar insurance coverage) have been in effect since November 1, 1993 and remain
in full force and effect. Such policies and bonds are of the type and in amounts customarily
carried by Persons conducting businesses similar to those of AWT. Except as disclosed in
Schedule 4.14, AWT shall after the Closing continue to have coverage under such policies and
bonds with respect to events occurring prior to the Closing.
4.15 Finders' Fees. Except for Allen & Company Incorporated, whose fees will be paid by AWT,
there is no investment banker, broker, finder or other intermediary which has been retained by or
is authorized to act on behalf of AWT who might be entitled to any fee or commission from
either CGE or Anjou or any of its Affiliates upon consummation of the transactions
contemplated by this Agreement.
4.16 Employee Benefit Plans. (a) Schedule 4.16 identifies each AWT Employee Plan. AWT has
furnished or made available to CGE copies of the AWT Employee Plans (and, if applicable,
related trust agreements) and all amendments thereto and written interpretations thereof together
with (i) the most recent annual report prepared in connection With any AWT Employee Plan
(Form 5500 including, if applicable, Schedule B thereto) and 60 if applicable, the most recent
actuarial valuation report prepared in connection with any AWT Employee Plan.(b) Neither AWT nor any of its ERISA Affiliates has incurred, or reasonably expects to incur
prior to the Closing Date, any liability under Title IV of ERISA arising in connection with the
termination of, or complete or partial withdrawal from, any plan covered or previously covered
by Title IV of ERISA that could become a liability of CGE or any of its ERISA Affiliates after
the Closing Date. To the best knowledge of AWT, no condition exists that (i) could constitute
grounds for termination by the PBGC of any AWT Employee Plan that is subject to Ti, V of
ERISA that is maintained solely by AWT or any of its ERISA Affiliates (ii) or presents a
material r )f complete or partial withdrawal from any Multiemployer Plan under Title IV of
ERISA other than a complete or partial withdrawal that would not have a Material Adverse
Effect.
(c) Each AWT Employee Plan (other than a Multiemployer Plan) that is intended to be qualified
under Section 401(a) of the Code has been determined by the Internal Revenue Service to be so
qualified or can become so qualified within the remedial amendment period of Section 401(b) of
the Code and, to the best knowledge of AWT, no event has occurred since the date of such
determination that would adversely affect such qualification or affect the ability to become so
qualified within the remedial amendment period of Section 401(b) of the Code; each trust created
under any such Plan has been determined by the Internal Revenue Service to be exempt from tax
under Section 501 (a) of the Code or can be so determined within the aforesaid remedial
amendment period and, to the best knowledge of AWT, no event has occurred since the date of
such determination that would adversely affect such exemption or affect the ability to be
determined to be exempt within the aforesaid remedial amendment period. AWT has furnished
or made available to CGE the most recent determination letter of the Internal Revenue Service
relating to each such AWT Employee Plan. To the best knowledge of AWT, each AWT
Employee Plan (other than a Multiemployer Plan) has been maintained in substantial compliance
with its terms and substantially with the requirements prescribed by any and all applicable
statutes, orders, rules and regulations, including but not limited to ERISA and the Code, except
for any instance of non-compliance that would not have a Material Adverse Effect.
(d) Schedule 4.16 identifies each AWT Benefit Arrangement. AWT has furnished or made
available to CGE copies or descriptions of each AWT Benefit Arrangement. To the best
knowledge of AWT, each AWT Benefit Arrangement has been maintained in substantial
compliance with its terms and with the requirements prescribed by any and all applicable
statutes, orders, rules and regulations, except for any instance of noncompliance that would not
have. a Material Adverse Effect.
(e) Schedule 4.16 identifies each AWT International Plan. AWT has furnished to CGE copies of
each AWT International Plan. To the best knowledge of AWT, each AWT International Plan has
been maintained in substantial compliance with its terms and with the requirements prescribed
by any and all applicable statutes, orders, rules and regulations (including any special provisions
relating to qualified plans where such Plan was intended to so qualify) and has been maintained
in good standing with applicable regulatory authorities, except for any instance of non-
compliance or failure to be so maintained that would not, in either case, have a Material Adverse
Effect.(f) All representations and warranties contained in the foregoing subsections of this Section 4.16
are subject to such limitations and exceptions as are specifically noted in Schedule 4.16.
4.17 Taxes. Except as disclosed in the financial statements included in the Company 10-K or the
Company I O-Q (including the notes thereto) or on Schedule 4.17 and except for Taxes, the
liability for which would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, (i) all material Tax returns, statements, reports and forms required to be
filed with any Taxing authority by or on behalf of AWT or any of its Subsidiaries (collectively,
the "Returns"), have been or will be filed when due in accordance with all applicable laws except
where failure to so file would not subject AWT or any AWT Subsidiary to liabilities or penalties;
(ii) as of the time of filing, the Returns correctly reflected in all material respects (and, as to any
Returns not filed as of the date hereof, will correctly reflect) the facts regarding the income,
business, assets, operations, activities and status of AWT and each AWT Subsidiary; (iii) AWT
and each of its Subsidiaries has timely paid, withheld or made provision for all Taxes shown as
due and payable on the Returns that have been filed; (iv) the charges, accruals and reserves for
Taxes with respect to AWT and its Subsidiaries for any Tax period (or portion thereof) ending on
or before the Closing Date (excluding any provision for deferred income taxes) reflected on the
books of AWT and its Subsidiaries are adequate to cover such Taxes; (v) neither AWT nor any
of its Subsidiaries is delinquent in the payment of any material Tax and has not requested any
extension of time within which to file or send any Return, which Return has not since been filed
or sent; (vi) neither AWT nor any of its Subsidiaries (or any member of any affiliated or
combined group of
