UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 7)
AIR & WATER TECHNOLOGIES CORPORATION
--------------------------------------------------------
(Name of Issuer)
CLASS A COMMON STOCK
$.001 PAR VALUE
--------------------------------------------------------
(Title of Class of Securities)
009058108
--------------------------------------------------------
(CUSIP Number)
COMPAGNIE GENERALE DES EAUX
--------------------------------------------------------
(Name of Persons Filing Statement)
JOHN A. BICK
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NY 10017
(212) 450-4000
--------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
MARCH 18, 1994
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this statement because of Rule 13d-1(b)(3) or (4), check the
following: / /
Check the following box if a fee is being paid with this statement: / /.
SCHEDULE 13D
______________________________ ________________________________
| | | |
|CUSIP No.__009058 10 8_____ | | Page ____ of ____ Pages |
|____________________________| |______________________________|
___________________________________________________________________________
| 1 | NAME OF REPORTING PERSON |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | |
| | Compagnie Generale des Eaux |
|____|____________________________________________________________________|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* |
| | _ |
| | (a) | | |
| | _ |
| | (b) |x| |
| | |
|____|____________________________________________________________________|
| 3 | SEC USE ONLY |
| | |
|____|____________________________________________________________________|
| 4 | SOURCE OF FUNDS* |
| | WC |
|____|____________________________________________________________________|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED _ |
| | PURSUANT TO ITEMS 2(d) or 2(E) |_| |
| | |
|____|____________________________________________________________________|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | France |
|____|____________________________________________________________________|
| | 7 | SOLE VOTING POWER |
| | | 6,203,475 |
| NUMBER OF |____|_______________________________________________|
| SHARES | 8 | SHARED VOTING POWER |
| BENEFICIALLY | | -- |
| OWNED BY |____|_______________________________________________|
| EACH | 9 | SOLE DISPOSITIVE POWER |
| REPORTING | | 6,203,475 |
| PERSON |____|_______________________________________________|
| WITH | 10 | SHARED DISPOSITIVE POWER |
| | | -- |
|____________________|____|_______________________________________________|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | 6,203,475 |
|____|____________________________________________________________________|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES _ |
| | CERTAIN SHARES* |_| |
|____|____________________________________________________________________|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | 24.5% |
|____|____________________________________________________________________|
| 14 | TYPE OF REPORTING PERSON* |
| | CO |
|____|____________________________________________________________________|
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SEC 1746 (9-88) 2 of 7
Compagnie Generale des Eaux ("Generale des Eaux")
hereby amends and restates its report on Schedule 13D,
originally filed on May 23, 1990 (as amended, the
"Schedule 13D").
Item 1. Security and Company.
The class of equity securities to which this
statement relates is the Class A Common Stock, $.001
par value (the "Shares"), of Air & Water Technologies
Corporation, a Delaware corporation ("AWT" or the
"Company"). The principal executive offices of the
Company are located at U.S. Highway 22 West and
Station Road, Branchburg, New Jersey 08876.
Item 2. Identity and Background.
The name of the person filing this statement
is Compagnie Generale des Eaux.
The address of the principal business and
office of Generale des Eaux is 52 Rue d'Anjou, 75384
Paris Cedex 08, France. The name, business address,
present principal occupation or employment, and
citizenship of each director and executive officer of
Generale des Eaux is set forth on Schedule A.
Generale des Eaux and its subsidiaries are a
diversified group of local service companies primarily
engaged in providing a comprehensive range of public,
institutional and industrial service needs for water,
power, heating and urban maintenance. In France,
Generale des Eaux, together with its subsidiaries, is
one of the nation's largest cable broadcasters and
cellular telephone network operators and one of the
leading managers of private health clinics and parking
lots.
During the last five years, neither Generale
des Eaux, nor any other person controlling Generale
des Eaux nor, to the best of its knowledge, any of the
persons listed on Schedule A attached hereto, has been
convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or has been a
party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a
result of such proceeding was or is subject to a
judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or
finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
The purchase price for all the Shares held by
Generale des Eaux and reported on the Schedule 13D is
$137,734,190.00. Such purchases were funded through
internally generated funds.
Pursuant to the Letter Agreement described in
Item 4, Generale des Eaux has agreed, among other
things, to purchase from the Company for cash
$60,000,000 of the Company's Series A Convertible
Exchangeable Preferred Stock and to exchange all of
the outstanding capital stock of its indirect, wholly-owned
subsidiary, Professional Service Group, Inc. for
6,500,000 Shares. In connection therewith, Generale
des Eaux has acquired 500,000 Shares from the Company
for an aggregate cash purchase price of $5,000,000.
All cash purchases were funded through internally
generated funds.
Item 4. Purpose of Transaction.
On March 18, Generale des Eaux entered into a
binding letter agreement (the "Letter Agreement") with
the Company. Pursuant to the Letter Agreement, the
parties agreed to enter into an Investment Agreement
whereby (a) Generale des Eaux would purchase for cash
$60,000,000 of the Company's Series A Convertible
Exchangeable Preferred Stock (the "Series A
Preferred") and (b) Generale des Eaux would exchange
on a tax-free basis all of the outstanding capital
stock of PSG for 6,500,000 Shares. In connection
therewith, Generale des Eaux has acquired 500,000
Shares from the Company for an aggregate cash purchase
price of $5,000,000.
Under the terms of the Letter Agreement, AWT
and Generale des Eaux have agreed to enter into a
closer relationship designed to strengthen the
Company's competitive and financial position. Both
parties believe that these arrangements will enhance
the overall value of AWT and its ability to achieve
its objectives.
Generale des Eaux has agreed that AWT shall
become Generale des Eaux's exclusive vehicle in the
United States, its possessions and its territories for
its water and waste water management and air pollution
activities. Generale des Eaux has also agreed to
assist AWT in developing its water and waste water
management and air pollution activities in both Canada
and Mexico, subject to existing contractual agreements
and taking into account the respective interests of
both companies.
AWT will benefit from certain financial
undertakings from Generale des Eaux designed to
increase AWT's profitability and financial flexibility,
thereby permitting AWT to capitalize on growth
opportunities in its markets. This will include a
$125,000,000 commercial bank line as well as letter
of credit support.
Generale des Eaux and the Company have agreed
to cooperate and negotiate with each other in good
faith in the prompt preparation of definitive
documentation.
The obligations of the Company and Generale
des Eaux to consummate the transactions contemplated
by the Letter Agreement will be subject to
satisfaction, among other things, of the following
conditions: (a) approval of the issuance to Generale
des Eaux of the Series A Preferred Stock and the
Shares by the stockholders of AWT pursuant to the
rules and regulations of the American Stock Exchange;
(b) receipt of all necessary governmental and
regulatory approvals under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 ("HSR") and the
provisions of Section 5021 of the Omnibus Trade and
Competitiveness Act of 1988, as amended and (c) in the
case of AWT only, the receipt by AWT of a written
opinion from Allen & Company, AWT's independent
financial advisors, to the effect that the
transactions contemplated by the Investment Agreement
are fair, from a financial point of view, to the
shareholders of AWT (other than Generale des Eaux).
The Company has agreed to cause a meeting of
its stockholders to be duly called and held as soon as
reasonably practicable for the purpose of voting on
the approval of the transactions contemplated by the
letter agreement. The Directors of the Company have
agreed, subject to their fiduciary duties as advised
by counsel, to recommend approval by the Company's
stockholders of the transactions contemplated by the
letter agreement. Generale des Eaux has agreed to
vote all of its shares in favor of such transactions
at such meeting of stockholders.
AWT has also agreed to increase the size of
the Board of Directors by two Directors and shall
appoint as Directors of the Company (with terms
expiring at the next annual meeting of the Company's
stockholders) such persons designated by Generale des
Eaux. AWT has further agreed to place the two
Directors designated by Generale des Eaux on the
Executive Committee of the Board.
Upon consumation of the proposed
transactions, Generale des Eaux will have representation on the
Board (and all Committees thereof other than any
Special Committee of independent directors) that is
proportionate to the aggregate number of Shares it
holds on a fully diluted basis.
Immediately after closing of the proposed
transactions, the Board will initially consist of
eleven Directors, with three directors who are
employees of Generale des Eaux or its affiliates as
designated by Generale des Eaux, two independent
directors designated by Generale des Eaux, five
Directors consisting of Messrs. Beck, Costle, Dowd,
Morris and Senior (who currently are Directors of the
Company) and an additional independent director
satisfactory to Generale des Eaux. The Investment
Agreement will provide that the Board of Directors
must have at least three Directors who are not
employees of the Company or Generale des Eaux or any
of their respective affiliates (an "independent
director"). All independent directors must be
satisfactory to Generale des Eaux. The Chairman of
the Board will be designated by Generale des Eaux.
The Investment Agreement will also provide
that upon consummation of the proposed transactions
Generale des Eaux will have the right to designate the
Chief Executive Officer and the Chief Financial
Officer of the Company.
The Investment Agreement will provide that
all transactions between AWT and any of its
subsidiaries and Generale des Eaux or any of its
subsidiaries must be on an arms length basis, and (i)
any such transaction having a value in excess of
$1,000,000 and (ii) any settlement of the Company's
litigation in Puerto Rico with PRASA must be approved
by a majority of the independent directors.
A Stock Purchase Agreement, dated May 13,
1990, between Generale des Eaux and the Company (the
"Stock Purchase Agreement") and the Stock Purchase
Agreement dated June 22, 1990 between Generale des
Eaux and the Company (the "June 22, 1990 Agreement") give
the Company first refusal rights with respect to any
Shares sold by Generale des Eaux prior to May 13,
1995.
Except as set forth above, as of the date
hereof, Generale des Eaux has no plan or proposals
which relate to or would result in any of the
transactions described in subparagraphs (a) through
(j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Company.
(a) Based on information provided by the Company
with respect to the number of outstanding shares, Generale
des Eaux has acquired approximately 24.5% of the outstanding
Shares of the Company.
Except as set forth in this Item 5(a),
neither Generale des Eaux, nor any other person
controlling Generale des Eaux, nor, to the best of its
knowledge, any persons named in Schedule A to this
Amendment, owns beneficially any Shares.
(b) Generale des Eaux may be deemed pursuant
to Rule 13d-3 to have the power to vote or to direct
the vote, or to dispose or direct the disposition of
6,203,475 Shares.
(c) Generale des Eaux acquired 500,000
Shares from the Company on March 18, 1994 at a cash
purchase of $10.00 per share for an aggregate purchase
price of $5,000,000.
(d) Inapplicable
(e) Inapplicable
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of
the Company.
Under the terms of the Letter Agreement
described above under Item 4, Generale des Eaux has
agreed to purchase for cash $60,000,000 of Series A
Preferred. The Series A Preferred will have a
liquidation preference of $50.00 per share and will be
convertible into Shares in whole or in part, at the
option of the holder at any time into the Company's
Class A Common Stock at a conversion price equal to
$12.50 per share of Class A Common Stock, subject to
adjustment in certain circumstances. The Series A
Preferred will pay a cumulative dividend equal to 5 1/2%
per annum.
The Series A Preferred will have one vote
(voting as a class with the Class A Common Stock) for
each share of Class A Common Stock that the Series A
Preferred represents. In addition, the Series A
Preferred will vote separately as a class on (i) any
amendments to the terms of the Series A Preferred and
(ii) any merger, consolidation, reclassification or
similar transaction which will adversely affect the
rights and preferences of the Series A Preferred.
The Series A Preferred is exchangeable, in
whole or in part, into Convertible Debt having a
maturity of 10 years from the date of issuance of the
Series A Preferred, at the option of the Company at
any time after June 30, 1997, on not less than 30 nor
more than 60 days prior written notice. Each $50.00
liquidation value of Series A Preferred is
exchangeable for $50.00 face amount of Convertible
Debt.
The Series A Preferred is not redeemable
before June 30, 1997. Between June 30, 1997 and June
30, 2000, the Series A Preferred will be redeemable at
the option of the Company, on not less than 30 nor
more than 60 days prior written notice. The Company
may exercise this option during such time period only
if for 20 trading days within any period of 30
consecutive trading days, including the last trading
day of such period, the closing price of the Common
Stock exceeds $18.75, subject to adjustments. After
June 30, 2000, the Series A Preferred will be
redeemable at any time. The same redemption
provisions apply to the Convertible Debt. The
redemption price will be 103.85% after June 30, 1997
and will decrease by .55% each year until it reaches
100% where it will remain fixed. The Series A
Preferred is perpetual preferred stock.
Pursuant to the Stock Purchase Agreement and
the June 22, 1990 Agreement, Generale des Eaux has agreed,
for the period prior to May 13, 1995, that if it or
any of its affiliates (as such term is defined in the
Securities Act of 1933, as amended (the "Securities
Act") (collectively, the "Purchaser Group")) receives
a bona fide offer from an unaffiliated third party to
purchase any Shares then owned by the Purchaser Group
and the Purchaser Group desires to accept such offer,
Generale des Eaux will promptly notify the Company in
writing specifying the amount of the Shares proposed
to be sold, the proposed purchase price therefor and
the other material terms and conditions of the offer,
including the proposed date of the closing for such
sale. The Company may agree to purchase the Shares
referred to in the notice upon notification to
Generale des Eaux within ten business days of receipt
of the notice. Generale des Eaux is not, however,
obligated to notify the Company of third party offers
with respect to any sales proposed to be made by it in
accordance with the volume limitations specified in
Rule 144(e)(i) promulgated under the Securities Act.
Except as otherwise described above, to the
best knowledge of Generale des Eaux, there are no
contracts, arrangement, understandings or
relationships (legal or otherwise) among the persons
named in Item 2, and any other person, with respect to
the securities of the Company, including, but not
limited to, transfer or voting of any of the
securities, finder's fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of
profits, division of profits or loss, or the giving or
withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Exhibit 99.1: Stock Purchase Agreement dated as of
May 13, 1990 between the Company and
General des Eaux (filed as an
exhibit to the Schedule 13D on May
24, 1990).
Exhibit 99.2: Stock Purchase Agreement dated as of
June 22, 1990 among the Company, the
Selling Stockholders and Generale
des Eaux (filed as an exhibit to
Amendment No. 1 to the Schedule 13D
on June 22, 1990).
Exhibit 99.3: Letter Agreement dated March 18, 1994
between the Company and
Generale des Eaux.
Exhibit 99.4: Financial Undertaking dated March 18, 1994
of Generale des Eaux (included as Exhibit C
to Exhibit 99.3).
SIGNATURES
After reasonable inquiry and to the best
knowledge and belief of the undersigned, the
undersigned certifies that the information set forth
in this statement is true, complete and correct.
Dated: March 21, 1994
COMPAGNIE GENERALE DES EAUX
By: /s/ Jacques-Henri David
___________________________
Directeur General
Schedule A
DIRECTORS AND EXECUTIVE OFFICERS OF COMPAGNIE GENERALE DES EAUX
The name, business address, title, present principal occupation or
employment of each of the directors and executive officers of Compagnie
Generale des Eaux ("Generale des Eaux") are set forth below. If no
business address is given the director's or officer's business address is
c/o Compagnie Generale des Eaux, 52 Rue d'Anjou 75384 Paris, France.
Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to Generale des Eaux. All of the persons listed
below are citizens of France.
PRESENT PRINCIPAL OCCUPATION
INCLUDING NAME AND ADDRESS(1)
NAME AND BUSINESS ADDRESS OF EMPLOYER
- ------------------------- ------------------------------
Directors
- ---------
Guy Dejouany. . . . . . . . . Chairman of the Board and
Chief Executive Officer,
Compagnie Generale des Eaux
Jean-Louis Beffa. . . . . . . Chairman and Chief Executive Officer
c/o Compagnie Saint Gobain Compagnie de Saint-Gobain
les Miroirs Pont-a-Mousson
18 Avenue d'Alsace
92400 Courbevoie, France
Ambroise Roux. . . . . . . . Honorary Chairman of Alcatel Alsthom
8 Bis, rue Marguerite
75017 Paris, France
____________
(1) Same address as director's or officer's business address
except where indicated.
PRESENT PRINCIPAL OCCUPATION
INCLUDING NAME AND ADDRESS
NAME AND BUSINESS ADDRESS OF EMPLOYER
- ------------------------ ----------------------------
Jacques Calvet. . . . . . . . Chief Executive Officer of
c/o Peugeot S.A. Peugeot S.A.
75 Avenue de la Grand Armee
75116 Paris, France
Roland Genin. . . . . . . . . Retired
5, rue des Trois Epis
54600 Villers Les Nancy, France
Paul-Louis Girardot . . . . . General Manager of Compagnie
Generale des Eaux
Jacques-Henri Gougenheim. . . Chairman of Banque WORMS
c/o UAP International
9 Place Vendome
75052 Paris, Cedex 01
Loik Le Floch-Prigent . . . . Chairman and Chief Executive Officer
c/o Gaz de France of Gaz de France
23, rue Philibert Delorme
75840 Paris, France
Jean-Pierre Mallet. . . . . . Honorary Chairman of Banque de
c/o Banque de Neuflize Neuflize Schlumberger Mallet
Schlumberger Mallet
3 Avenue Hoche
75008 Paris, France
(2)Jacques Pillet-Will . . . . Honorary Chairman of Banque de
16 rue de Teheran Picardie
75008 Paris, France
Pierre Suard. . . . . . . . . Chairman of Alcatel Alsthom
c/o Alcatel Altshom
54 rue de Boetie
75008 Paris, France
Rene Thomas . . . . . . . . . Chairman and Chief Executive
c/o Banexi Officer of Banexi
16 Boulevard des Italiens
75009 Paris, France
____________
(2) Residence Address.
PRESENT PRINCIPAL OCCUPATION
INCLUDING NAME AND ADDRESS
NAME AND BUSINESS ADDRESS OF EMPLOYER
- ------------------------ ----------------------------
Marc Vienot . . . . . . . . . Chairman of Societe Generale
c/o Societe Generale
29 boulevard Haussman
75009 Paris, France
Executive Officers (Who Are Not Directors)
- -----------------------------------------
Jacques-Henri David . . . . . Directeur General
Jean-Dominique Deschamps. . . Directeur General Adjoint
Bernard Forterre. . . . . . . Directeur General Adjoint
Jean-Pierre Quinio. . . . . . Directeur General Adjoint
Michel Sage . . . . . . . . . Directeur General Adjoint
Jean-Marc Oury. . . . . . . . Directeur de la Compagnie
Henri Proglio . . . . . . . . Directeur de la Compagnie
Pierre Schulhof . . . . . . . Directeur de la Compagnie
Jean-Pierre Tardieu . . . . . Directeur de la Compagnie
Antoine Zacharias . . . . . . Directeur de la Compagnie
Andre Morange . . . . . . . . Directeur de la Compagnie
Alain Bravo . . . . . . . . . Directeur de la Compagnie
Michel Villaneau. . . . . . . Directeur de la Compagnie
Jean-Marc Espalioux . . . . . Directeur Financier de la
Compagnie
Christian Castaignet. . . . . Directeur du Personnel
Etienne Mallet. . . . . . . . Directeur de la Communication
et des Relations Exterieures
Bernard Portnoi. . . . . . . . Directeur Juridique et
Directeur des Services
Administratifs de la Compagnie
EXHIBIT INDEX
Exhibit Sequential
No. Description Page No.
- ------- ----------- ----------
99.1: Stock Purchase Agreement dated as of
May 13, 1990 between the Company and
General des Eaux (filed as an
exhibit to the Schedule 13D on May
24, 1990).
99.2: Stock Purchase Agreement dated as of
June 22, 1990 among the Company, the
Selling Stockholders and Generale
des Eaux (filed as an exhibit to
Amendment No. 1 to the Schedule 13D
on June 22, 1990).
99.3: Letter Agreement dated March 18, 1994
between the Company and
Generale des Eaux.
99.4: Financial Undertaking dated March 18, 1994
of Generale des Eaux (included as Exhibit C
to Exhibit 99.3).
March 18, 1994
Air & Water Technologies Corporation
U.S. Highway 22 West and Station Road
Branchburg, New Jersey 08876
Ladies and Gentlemen:
This letter agreement confirms the understanding between Air & Water
Technologies Corporation, a Delaware corporation ("AWT" or the "Company"),
and Compagnie Generale des Eaux, a French corporation ("Generale des Eaux"),
to effect the transactions set forth herein. As further described below,
AWT and Generale des Eaux have agreed to enter into a closer relationship
designed to strengthen the Company's competitive and financial position.
Both parties believe that these arrangements will enhance the overall value
of AWT and its ability to achieve its objective.
Subject to the terms and conditions set forth herein, the parties will
enter into an Investment Agreement (the "Investment Agreement") which
consists of the following (see Exhibit A hereto for further details):
o Generale des Eaux would purchase for cash $60,000,000 of the
Company's Series A Convertible Exchangeable Preferred Stock,
having the terms set forth on Exhibit B hereto (the "Series
A Preferred");
o Generale des Eaux would exchange on a tax-free basis all of
the outstanding capital stock of Professional Service Group,
Inc., a Michigan corporation ("PSG"), for 6,500,000 shares
of the Company's Class A Common Stock, par value $.01 per
share (the "Class A Common Stock");
o Upon execution of this letter agreement, Generale des Eaux
shall enter into the financial undertakings set forth on
Exhibit C hereto; and
o Generale des Eaux will agree in the Investment
Agreement that AWT shall become Generale des Eaux's exclusive
vehicle in the United States, its possessions and its
territories for its water and waste water management and air
pollution activities. Generale des Eaux will also assist AWT
in developing its water and waste water management and air
pollution activities in both Canada and Mexico, subject to
existing contractual agreements and taking into account the
respective interests of both companies.
Upon execution of this letter agreement, Generale des Eaux will
purchase 500,000 shares of Class A Common Stock for an aggregate purchase
price of $5,000,000. AWT represents and warrants that all such shares of
Class A Common Stock have been duly authorized, and upon issuance will be
validly issued, fully-paid and non-assessable, and such issuance is not
subject to any pre-emptive or similar rights.
AWT and Generale des Eaux will (a) cooperate with each other in good
faith in the preparation of definitive documentation providing for the
transactions contemplated by the Investment Agreement, the making of all
required governmental filings and the obtaining at the earliest practicable
date of all necessary approvals and consents from governmental entities and
third parties and (b) negotiate in good faith towards reaching agreement on
the definitive documentation providing for such transactions at the
earliest practicable date.
The obligations of AWT and Generale des Eaux to consummate the
transactions contemplated by this letter agreement (other than those set
forth on Exhibit C hereto) will be subject to satisfaction of the following
conditions, and as otherwise set forth in the Investment Agreement:
(a) approval of the issuance to Generale des Eaux
of the Series A Preferred Stock and the Class A Common
Stock by the stockholders of AWT pursuant to the rules
and regulations of the American Stock Exchange;
(b) receipt of all necessary governmental and
regulatory approvals under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 ("HSR") and the
provisions of Section 5021 of the Omnibus Trade and
Competitiveness Act of 1988, as amended ("Exon-
Florio"), containing no condition or restriction which,
in such party's reasonable opinion, would materially
diminish such party's rights and protections, taken as
a whole, under the Investment Agreement;
(c) in the case of AWT only, the receipt by AWT of
a written opinion form Allen & Co., ATW's independent
financial advisors, to the effect that the transactions
contemplated by the Investment Agreement are fair, from
a financial point of view, to the shareholders of AWT
(other than Generale des Eaux); and
(d) the absence of any injunctions or other
prohibiting consummation of the transactions
contemplated by the Investment Agreement.
Each of AWT and Generale des Eaux represent and warrant that such
party has or has caused to be taken any necessary corporate action to
authorize the execution, delivery and performance of this letter agreement
and that this letter agreement is a valid and binding agreement of such
party.
AWT represents and warrants that the unaudited consolidated financial
statements for the quarter ended January 31, 1994 of the Company included
in the Form 10-Q as filed with the Securities and Exchange Commission (the
"Commission") will 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 January 31, 1994 and the consolidated results of
operations and statement of cash flows for the quarter then ended. Other
than liabilities disclosed, or provided for, in the Form 10-Q or otherwise
disclosed to Generale des Eaux in writing, as of such date, (i) there
existed no liabilities of the Company or its consolidated subsidiaries of
any kind whatsoever, whether accrued, contingent, absolute or otherwise and
(ii) there was 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 in the business, properties or condition (financial
or otherwise) of the Company. Since January 31, 1994, there has been no
material adverse change in the business, properties or condition (financial
or otherwise) of the Company.
The Company shall cause a meeting of its stockholders to be duly
called and held as soon as reasonably practicable for the purpose of voting
on the approval of the transactions contemplated by this letter agreement.
The Directors of the Company shall, subject to their fiduciary duties as
advised by counsel, recommend approval by the Company's stockholders of the
transactions contemplated by this Agreement. In connection with such
meeting, the Company (i) will promptly prepare and file with the
Commission, will use its best efforts to have cleared by the Commission and
will thereafter mail to its stockholders as promptly as practicable the
proxy statement of the Company and all other proxy materials for such
meeting, (ii) will, subject to the provisions of the immediately preceding
sentence, use its best efforts to obtain the necessary approvals by its
stockholders of the transactions contemplated hereby and (iii)
will otherwise comply with all legal requirements applicable to such
meeting. Generale des Eaux agrees to vote all of its shares in favor of the
transactions contemplated by this letter agreement at such meeting of
stockholders.
AWT agrees to increase the size of the Board of Directors promptly
after execution of this letter agreement by two Directors and shall appoint
as Director of the Company (with terms expiring at the next annual meeting
of the Company's stockholders) such persons designated by Generale des Eaux.
AWT further agrees to place the two Directors designated by Generale des
Eaux on the Executive Committee of the Board promptly after execution of
this letter agreement.
AWT and Generale des Eaux shall agree on the form and content of any
public announcements which shall be made concerning this letter agreement
or the transactions contemplated hereby and neither AWT nor Generale des
Eaux shall make any such public announcement without the consent of the
other, except with respect to any public announcement or other public
disclosure, to the extent either party determines, in good faith and with
the advice of counsel, such announcement or disclosure is required by law
or the rules or regulations of any exchange on which such party's
securities are listed or to avoid undue risk that the transactions
contemplated hereby will be enjoined or that such party, its officers,
directors or representative will be liable for damages as a result thereof.
In connection with the preparation of the Investment Agreement and
subject to the terms of the Confidentiality Agreement dated October 22,
1992 between the parties, AWT will and Generale des Eaux will cause PSG to,
and each will cause its respective officers, directors, employees and
agents to, afford Generale des Eaux and AWT, as the case may be, and their
respective officers, employees, advisors and agents reasonable access at
all reasonable time to AWT's and PSG's respective officers, employees,
agents, properties, books, records and contracts and will furnish to AWT
and Generale des Eaux and their respective advisors all financial, operating
and other data and information as each of AWT and Generale des Eaux or their
respective advisors may reasonably request.
AWT shall not nor shall AWT permit any of its subsidiaries or any of
its or their respective officers, directors, employees, agents or advisers
to initiate, solicit or encourage, or take any other action to facilitate
(including by way of furnishing nonpublic information, except to the extent
determined in good faith by the Board of Directors of AWT (the "Board")
based on the advice of counsel to be legally required for the discharge by
the Board of its fiduciary duties), and inquiries or the making of any
proposal which constitutes, or may reasonably be expected to lead to, any
takeover proposal (as defined below) or, except to the extent determined in
good faith by the Board based on the advice of counsel to be legally
required for the discharge by the Board of its fiduciary duties, agree to
or endorse any takeover proposal, or participate in any
discussions or negotiations, or provide third-parties with any nonpublic
information, relating to any such inquiry or proposal. AWT shall promptly
inform Generale des Eaux orally and in writing of any such inquiry or
proposal. As used herein, "takeover proposal" shall mean any tender or
exchange offer, proposal for a merger, consolidation or other business
combination involving AWT or any of its subsidiaries (other than that
involving solely an acquisition of a business or assets by AWT or any of
its subsidiaries) or any proposal or offer to acquire in any manner a
significant (i.e., more than 10% of the then outstanding shares of AWT)
equity interest in, or a significant (i.e., more than 10% of the
consolidated total assets of AWT) portion of the assets of (including
the stock or assets of subsidiaries) AWT, but excluding the transactions
contemplated by the Investment Agreement.
AWT agrees not to (i) adopt any stockholder rights plan (or any
arrangement which is designed to disadvantage Generale des Eaux on the basis
of the size of its shareholding), (ii) make any material change in the
Company's capital structure or issue any capital stock except as provided
herein or (iii) modify or enter into any employee benefit arrangements or
any agreements with employees or grant any severance or termination
compensation rights to employees. The foregoing restrictions shall
terminate in the event that (i) Generale des Eaux materially breaches any of
its obligations or representations contained herein, in Exhibit C hereto or
in the Investment Agreement or (ii) Generale des Eaux commence a tender
offer for or acquires more than 1% of the outstanding shares of Class A
Common Stock (except as contemplated by this letter agreement) or commences
any solicitation of proxies from the Company's stockholders not approved by
the Company's Board of Directors. Generale des Eaux will give the Company
two days' prior written notice of any acquisition of more than 1% of the
outstanding shares.
In the event that Generale des Eaux materially breaches any of its
obligations or representations contained herein, in Exhibit C or in the
Investment Agreement, Generale des Eaux agrees that the provisions of
Article VI of the Stock Purchase Agreement dated May 13, 1990 shall be
reinstated for an additional three years period from the date hereof.
The parties hereto will be responsible for all of their own costs
incurred by them with respect to the investigation and negotiation of this
letter agreement and the transactions contemplated hereby.
This letter agreement may be terminated and the transactions
contemplated hereby may be abandoned or terminated by written notice to
that effect given by either party to the other on or after July 31, 1994, if
by such date the parties hereto shall not have executed definitive
documentation to effect the transactions contemplated by the Investment
Agreement. Except as expressly provided herein, upon any such termination,
the parties shall each be released from all further obligations and
liabilities hereunder; provided that each party shall remain liable for any
breach or violation of the terms hereof by such party prior to such
termination.
This letter agreement may be executed in one or more counterparts.
This letter agreement, which shall be governed by and construed in
accordance with the internal laws of the State of New York, is binding upon
the parties hereto and any of its terms may only be modified, waived or
supplemented in a written agreement executed by authorized representatives
of each of AWT and Generale des Eaux.
Sincerely,
COMPAGNIE GENERAL DES EAUX
By: /s/ Jacques-Henri David
___________________________
Title
Acknowledged and agreed:
AIR & WATER TECHNOLOGIES CORPORATION
By: /s/ Eckardt C. Beck
_________________________________
Title
Exhibit A
Term Sheet for Investment Agreement
1. Board of Directors Representation.
Generale des Eaux will have representation on the Board (and all Committees
thereof other than any Special Committee of independent directors) that is
proportionate to the aggregate number of shares of Class A Common Stock
(the "Shares") owned by Generale des Eaux on a fully diluted basis (rounded
down to the next whole number if Generale des Eaux owns in the aggregate
less than 50% of the outstanding shares on a fully diluted basis or, if
otherwise, rounded up to the next whole number).
Immediately after closing of the transactions contemplated by the
Investment Agreement, the Board shall initially consist of eleven
Directors, with three directors who are employees of Generale des Eaux or
its affiliates as designated by Generale des Eaux, two Independent
Directors (as defined below) designated by Generale des Eaux, five
Directors consisting of Messrs. Beck, Costle, Dowd, Morris and Senior and
an additional Independent Director satisfactory to Generale des Eaux. The
Board shall have at least three Directors who are not employees of the
Company or Generale des Eaux or any of their respective affiliates
("Independent Directors"). All Independent Directors shall be satisfactory
to Generale des Eaux. The Chairman of the Board shall be designated by
Generale des Eaux.
2. Management
Generale des Eaux shall have the right to designate the Chief Executive
Officer and the Chief Financial Officer of the Company. Current AWT
management would participate in the transition as mutually agreed upon. It
is Generale des Eaux's current intention to work with as many members of
current management as possible. Mr. Beck shall continue as Chairman and
Chief Executive Officer until the closing of the transactions contemplated
by the letter agreement. All agreements of AWT with employees will be
honored.
3. Affiliate Transactions
Any transactions (or series of related transactions in a chain) between AWT
and any of its subsidiaries and Generale des Eaux or any of its
subsidiaries shall be on an arms length basis, and (i) any such transaction
(or such series of transactions) having an aggregate value in excess of
$1,000,000 and (ii) any settlement of the PRASA litigation must be approved
by a majority of the Independent Directors or a Special Committee thereof.
After closing of the transactions contemplated by the Investment Agreement,
all actions by AWT with respect to the Investment Agreement shall be taken
by majority approval of such Independent Directors.
4. Joint Efforts
Generale des Eaux will agree in the Investment Agreement that AWT shall
become Generale des Eaux's exclusive vehicle in the United States, its
possessions and its territories for its water and waste water management
and air pollution activities. Generale des Eaux will also assist AWT in
developing its water and waste water management and air pollution
activities in both Canada and Mexico, subject to existing contractual
agreements and taking into account the respective interest of both
companies. AWT shall be offered an active participation in any new water
management investments by Generale des Eaux in the United States which are
too capital intensive for AWT to undertake on a stand-alone basis. In
addition, Generale des Eaux and AWT will establish a privileged commercial
relationship for the development of air pollution activities in Europe.
5. Representations
AWT and Generale des Eaux (including with respect to PSG) will make
representations and warranties to each other in connection with the
transactions contemplated hereby which are customary for transactions of
this nature, subject to standard materiality qualifications, which
representations (including, in the case of AWT and with respect to PSG,
with regard to the absence of any material adverse change in the business,
financial condition and results of operations of AWT and PSG and their
respective subsidiaries, taken as a whole) will be brought down to closing
but will not survive the closing.
6. Covenants
The transactions contemplated by the Investment Agreement will be dependent
upon performance of customary pre-closing covenants for similar
transactions, including:
(a) operation of the businesses of AWT and PSG in the ordinary
course consistent with past practice; and
(b) AWT would agree to the "no-shop" and other covenants
substantially similar to those contained in the letter agreement of
which this Exhibit A forms a part.
7. Purchase Price Adjustment
The purchase price for the capital stock of PSG shall be adjusted in cash
upwards or downwards, as the case may be, to the extent the consolidated
net worth (excluding any intercompany debt) of PSG as of closing of the
transactions contemplated by the Investment Agreement is greater or lower,
as the case may be, than the consolidated net worth (excluding any
intercompany debt) of PSG as of December 31, 1993.
8. Access
For so long as Generale des Eaux beneficially owns at least 26% of the
outstanding Shares on a fully diluted basis, it will have access on
reasonable terms to the books, records and employees of AWT and its
subsidiaries and provision by AWT of all information reasonably requested
by such party, subject to confidentiality obligations that at the time may
be owned by AWT to third parties, to appropriate confidentiality
arrangements and requirements of law.
9. Registration Rights
Four demand and unlimited piggyback registration rights for the Class A
Convertible Exchangeable Preferred Stock and the Shares held by
Generale des Eaux, subject to reasonable limits regarding the frequency of
exercises, blackout periods, and clawbacks and restriction on the size of
the offerings by underwriters.
Exhibit B
Term Sheet for Series A Preferred Stock
1. Securities Offered ......... Series A Convertible Exchangeable
Preferred Stock ("Series A
Preferred") exchangeable into
Convertible Subordinated Debt with
a maturity of 10 years from the
date of issuance of the Series
A Preferred ("Convertible Debt").
2. Dividends................... The amount of the Series A
Preferred dividend will be equal
to 5 1/2% per annum. If the Series
A Preferred is exchanged into
Convertible Debt, the interest
rate will be 5 1/2% per annum.
Annual cumulative dividends or
interest, accruing from the date
of issue, will be payable in cash
semi-annually.
3. Liquidation Preference ..... $50.00 per share, plus accrued and
unpaid dividends.
4. Exchange Provisions ........ The Series A Preferred is
exchangeable, in whole or in part,
into Convertible Debt, at the
option of the Company at any time
after June 30, 1997, on not less
than 30 nor more than 60 days
prior written notice. Each $50.00
liquidation value of Series A
Preferred is exchangeable for
$50.00 face amount of Convertible
Debt.
5. Conversion Rights ........... The Series A Preferred and
Convertible Debt are convertible,
in whole or in part, at the option
of the Holder at any time into the
Company's Class A Common Stock at
a conversion price equal to $12.50
per share of Class A Common Stock,
subject to adjustment as provided
below.
6. Anti-dilution .............. Customary provisions, including
adjustments (using a weighted average in
the case of items (iii), (iv), (v) and
(vi) so as to preserve the fully diluted
percentage of Common Stock into which
the Series A Preferred Stock is
convertible) in the event of:
(i) stock dividends, stock
reclassifications or
recapitalizations, stock
splits, reverse stock splits and
the like;
(ii) dividends or other distributions
of cash or assets or evidence of
indebtedness;
(iii) dividends or other distributions
of securities or rights
convertible into or exercisable
for shares of any class of common
stock of the Company at a purchase
price less than the conversion
price of such common stock;
(iv) issuance of shares of any class of
common stock of the Company at a
price less than the conversion
price of such common stock;
(v) issuance of securities or rights
convertible into or exercisable
for shares of any class of common
stock of the Company at a purchase
price less than the conversion
price of such common stock; and
(vi) repurchase by the Company,
directly or indirectly, of shares
of any class of common stock at
a price in excess of the
conversion price of such common
stock.
7. Redemption at Option of
the Company ............... The Series A Preferred is not redeemable
before June 30, 1997. Between June 30,
1997 and June 30, 2000, the Series A
Preferred will be redeemable at the
option of the Company, on not less than
30 nor more than 60 days prior written
notice. The Company may exercise this
option during such time period only if
for 20 trading days within any period
of 30 consecutive trading days,
including the last trading day of such
period, the closing price of the Common
Stock exceeds $18.75, subject to
adjustments. After June 30, 2000, the
Series A Preferred will be redeemable
at any time. The same redemption
provisions apply to the Convertible
Debt. The redemption price will be
103.85% after June 30, 1997 and will
decrease by .55% each year until it
reaches 100% where it will remain fixed.
8. Voting Rights .............. On all matters the Holders of the Series
A Preferred will have one vote (voting
as a class with the Common Stock) for
each share of Common Stock that their
Series A Preferred represents. In
addition, the Series A Preferred will
vote separately as a class on (i) any
amendments to the Certificate of
Designation of the terms of the Series A
Preferred and (ii) any merger,
consolidation, reclassification or
similar transaction which will
adversely affect the rights and
preferences of the Series A Preferred.
9. Ranking .................... The Series A Preferred will rank (1)
with respect to the payment of amounts
upon liquidation, dissolution or
winding up, senior to the Common Stock,
and pari-passu with any other Preferred
Stock and (2) with respect to the
payment of dividends, senior to the
Common Stock and pari-passu with any
other Preferred Stock. The Convertible
Debt will be subordinated to the
Company's senior debt and senior
subordinated debt.
10. Maturity .................. Perpetual
Exhibit C
March 18, 1994
The Board of Directors
Air & Water Technologies Corporation
U.S. Highway 22 West and Station Road
Branchburg, New Jersey 08876
Gentlemen:
As an inducement to Air & Water Technologies Corporation ("AWT")
entering into with us that certain letter agreement of even date herewith
(the "Letter Agreement"), Compagnie Generale des Eaux undertakes the
following:
1. If the transactions contemplated by such letter agreement are not
consummated on or before June 14, 1994 and AWT has not theretofore been
able to obtain up to $125,000,000 of debt financing to repay the Senior
Note held by The Prudential Insurance Company of America (the "Prudential
Note"), and subject to there not having occurred any material adverse
change or any event which would reasonably be expected to result in a
material adverse change in the business, properties or condition (financial
or otherwise) of AWT and subject to AWT not being in material breach of its
obligations or of any representation under the Letter Agreement or the
Investment Agreement, and provided that the shareholders of AWT shall not
have voted against approval of the transactions contemplated by the
aforementioned letter agreement, Generale des Eaux will provide any
assistance and support necessary for a bank or other financial institution
to provide bridge financing to AWT for up to $125,000,000 on a senior basis
at a rate equal to 3 month LIBOR + 325 basis points, any such loans to be
repaid as promptly as practicable, and in any event within six months, by
AWT, it being understood that such bridge financing would contain customary
covenants and events of default for loans of this type. Furthermore, should
such bridge financing not be repaid within 6 months, Generale des Eaux
will have the right to cause (i) the entire outstanding principal amount
(plus accrued interest) of such bridge debt to be exchanged for shares of
AWT or (ii) if any approval of the stockholders of AWT is required for the
issuance of such shares, and has not been obtained, an amount of bridge
debt to be exchanged for the maximum number of shares permitted to be
issued without stockholder approval, in each case such shares shall be
valued at the average of the closing bid price for such shares over the 20
trading days prior to any such exchange.
2. After consummation of the transactions contemplated by the Letter
Agreement, CGE will provide any assistance and support necessary to enable
AWT to obtain up to $125,000,000 of permanent bank debt financing on an
unsecured basis to repay the Prudential Note at an interest rate not in
excess of the market rate for a seven year fixed rate swap against 3 month
LIBOR + 125 basis points with a covenant package that does not include a
negative pledge restriction on AWT's assets and permits normal working
capital borrowing by AWT.
3. After consummation of the transactions contemplated by the Letter
Agreement, Generale des Eaux will co-sign on a case by case basis with AWT,
applications for letters of credit of AWT's water and waste water
management and air pollution projects, subject to approval by
Generale des Eaux, in accordance with its usual business practices of such
water and waste water management or air pollution projects. CGE
acknowledges (without thereby intending to imply a limitation) that its
support of letters of credit could reach or exceed the level of letters of
credit currently carried by AWT.
This letter is intended for the sole benefit of Air & Water
Technologies Corporation and not for the benefit of any other person,
including without limitation any creditor or shareholder of AWT.
Very truly yours,
COMPAGNIE GENERALE DES EAUX
By /s/ Jacques-Henri David
-------------------------
