Air Water Technologies Corp Form Type 10-K405

INVESTMENT AGREEMENT

AGREEMENT dated as of among

, a corporation ("AWT"), , a French corporation ("CGE") and its indirectly wholly-owned subsidiary, , 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;

"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 or more of its total voting power.

"AWT Benefit Arrangement" means

"AWT Employee Plan" means

"AWT International Plan" means

"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

"Basket" means the amount at any time equal to plus reserves for Taxes, if any.

"Class A Common Stock" means the Class A Common Stock of AWT, par value 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.

"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

"Material Adverse Effect" means

"Person" means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization.

"PSG" means PSG Professional Services Group, Inc., a Minnesota corporation and a wholly-owned subsidiary of Anjou.

"Tax" means

"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.

ARTICLE 2

PURCHASE AND SALE; MERGER

2.1 Purchase and Sale.

(a) AWT agrees to sell and CGE agrees to purchase for cash shares of Series A Preferred for an aggregate purchase price of .

(b) Anjou agrees to exchange all of the Outstanding Capital Stock of PSG Canada for, and AWT agrees to issue, Shares of Class A Common Stock.

2.3 Closing. The closing (the "Closing") shall take place at

2.4 Closing Balance Sheet.

Closing Stockholder's Equity means

2.5 Adjustment of Purchase Price.

Base Stockholder's Equity is

Final Stockholder's Equity means

2.6 Legending of Securities.

All securities to be issued shall bear the following legend:

"The securities represented hereby have not been registered under the Securities Act of 1933..."

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF ANJOU AND CGE

3.1 Corporate Existence and Power.

3.2 Corporate Authorization.

3.3 Governmental Authorization.

3.4 Non-Contravention.

3.5 Capitalization.

3.6 Ownership of Shares.

3.7 Subsidiaries.

3.8 Financial Statements.

3.9 AWT Proxy Materials.

3.10 Absence of Certain Changes.

3.11 No Undisclosed Material Liabilities.

3.12 Intercompany Accounts.

3.13 Material Contracts.

3.14 Litigation.

3.15 Compliance with Laws and Court Orders; No Defaults.

3.16 Insurance Coverage.

3.17 Finders' Fees: Certain Payments.

3.18 Employee Benefit Plans.

3.19 Taxes.

3.20 Environmental Matters.

3.21 Properties.

3.22 Receivables.

3.23 Purchase for Investment.

3.24 Other Information.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF AWT

4.1 Corporate Existence and Power.

4.2 Corporate Authorization.

4.3 Governmental Authorization.

4.4 Non-Contravention.

4.5 Capitalization.

4.6 SEC Filings.

4.7 Financial Statements.

4.8 Absence of Certain Changes.

4.9 No Undisclosed Material Liabilities.

4.10 AWT Proxy Materials.

4.11 Compliance with Contracts.

4.12 Litigation.

4.13 Compliance with Laws and Court Orders; No Defaults.

4.14 Insurance Coverage.

4.15 Finders' Fees.

4.16 Employee Benefit Plans.

4.17 Taxes.

4.18 Purchase for Investment.

4.19 Other Information.

ARTICLE 5

COVENANTS OF CGE AND ANJOU

5.1 Conduct of the PSG Group.

5.2 Access to Information.

5.3 Notices of Certain Events.

5.4 Resignations.

5.5 Voting of Shares; Acquisitions of Shares.

5.6 Joint Efforts.

5.7 Other Agreements.

ARTICLE 6

COVENANTS OF AWT

6.1 Conduct of Business.

6.2 Access to Information.

6.3 Notices of Certain Events.

6.4 Stockholder Meeting; Proxy Materials.

6.5 No-Shop.

6.6 Access to Books and Records.

6.7 Registration Rights.

ARTICLE 7

COVENANTS OF AWT, ANJOU AND CGE

7.1 Intercompany Accounts; Bonding and Insurance.

7.2 Board Representation; Management.

7.3 Affiliate Transactions.

7.4 Filings; Consents; Best Efforts.

ARTICLE 8

TAX MATTERS

8.1 Tax Covenants.

8.2 Transfer Taxes.

8.3 Termination of Existing Tax Sharing Arrangements.

8.4 Tax Sharing.

8.5 Cooperation on Tax Matters.

8.6 Indemnification by Anjou.

8.7 Refunds.

8.8 Survival.

ARTICLE 9

EMPLOYEE BENEFITS

9.1 Pension Plan.

9.2 Other Employee Plans.

9.3 Third Party Beneficiaries.

ARTICLE 10

CONDITIONS TO CLOSING

10.1 Conditions to Obligations of AWT, CGE and Anjou.

10.2 Conditions to Obligation of AWT.

10.3 Conditions to Obligation of CGE and Anjou.

ARTICLE 11

TERMINATION

11.1 Grounds for Termination.

11.2 Effect of Termination.

ARTICLE 12

MISCELLANEOUS

12.1 Notices.

12.2 Amendments and Waivers.

12.3 Expenses.

12.4 Successors and Assigns.

12.5 Governing Law.

12.6 Counterparts; Third Party Beneficiaries.

12.7 No Survival.

12.8 Public Announcements.

12.9 Entire Agreement; Exhibits.

12.10 Headings.

12.11 Specific Performance.

Exhibit A

AIR & WATER TECHNOLOGIES CORPORATION

CERTIFICATE OF DESIGNATION

5½% SERIES A CONVERTIBLE EXCHANGEABLE PREFERRED STOCK

Number and designation of preferred stock:

Annual dividend rate:

Initial redemption date:

Signature section:

Attachment A to Certificate of Designation

AIR & WATER TECHNOLOGIES CORPORATION

5½% CONVERTIBLE SUBORDINATED NOTES

Principal amount:

Payee:

ARTICLE I - DEFINITIONS

SECTION 1.01. Definitions. Selected terms used in this Note:

"Business Day" means any day except a Saturday, Sunday or other day on which commercial banks in New York City are authorized by law to close.

"Maturity Date" means

"Interest Payment Date" means the last Business Day of each March, June, September and December.

"Conversion Ratio" and anti-dilution provisions apply as described in the Note.

ARTICLE II - PAYMENT OF PRINCIPAL AND INTEREST

SECTION 2.01. Mandatory Redemption.

SECTION 2.02. Interest Rate.

SECTION 2.03. Computation of Interest.

Interest rate:

Overdue interest rate:

ARTICLE III - SUBORDINATION

Subordination to Superior Indebtedness as described in Sections 3.01 through 3.08.

ARTICLE IV - CONVERSION

Conversion rights and procedures as described in Sections 4.01 through 4.08.

ARTICLE V - REDEMPTION

Initial redemption date:

Redemption threshold:

ARTICLE VI - VOTING RIGHTS

Voting rights are granted as described in Sections 6.01 through 6.03.

ARTICLE VII - DEFAULTS

Default provisions are as described in Article VII.

ARTICLE VIII - MISCELLANEOUS

Governing law: