Acuity Specialty Products Group Inc.

GUILTY PLEA and PLEA AGREEMENTr!:ed St32S ::oeyKcr:"er" 1st1=t of Geo:;:aUNITED STATES DISTRICT COURTNORTHERN DISTRICT OF GEORGIAATLANTA DIVISIONCRIMINAL NO. 1 :0 7-CR- 223The United States Attorney for the Northern District of Georgia, the EnvironmentalCrimes Section of the Department of Justice (the "Government"), as counsel forthe United States, and Acuity Specialty Products Group, Inc. ("Defendant ASP"), acorporation organized and existing under the laws of Delaware, hereby enter intothe following Negotiated Plea Agreement pursuant to Rule 11 of the Federal Rulesof Criminal Procedure ("Fed. R. Crim. P."), and governed by Rule 11(c)(l)(C):1) ADMISSION OF GUlL TDefendant ASP agrees to waive indictment by a grand jury and to pleadguilty to a one-count CRIMINAL INFORMATION charging it under 33 U.S.C.§ 13 19( c )(2 )(A) with knowingly violating the requirements imposed in apretreatment program approved under the Clean Water Act.Defendant ASP ispleading guilty because it is in fact guilty of the crime charged under 33 U.S.C.§ 1319(c)(2)(A) in Count One of the CRIMINAL INFORMATION.2) WAIVER OF RIGHTS(a)The Government and Defendant ASP agree that if the Court does notaccept the Plea Agreement or the recommended sentence in Paragraph 5 below, thePlea Agreement shall be rendered null and void.If the Court rejects the Plea1

Agreement or the recommended sentence following a plea of guilty by DefendantASP, Defendant ASP will be free to withdraw its plea of guilty. Defendant ASPunderstands that if the Court accepts the Plea Agreement and imposes therecommended sentence, it will not be able to withdraw its plea of guilty.(b)If this Plea Agreement is rendered null and void or if Defendant ASPwithdraws its plea of guilty, the Plea Agreement, the guilty plea, and any statementmade by Defendant ASP in the course of proceedings under Fed. R. Crim. P. 11 orin the course of plea discussions with the Government shall not be admissibleagainst Defendant ASP in any subsequent proceedings.(c)Defendant ASP understands that by pleading guilty, it is giving up theright to plead not guilty and the right to be tried by a jury. At a trial, the defendanthas a right to be represented by an attorney. During the trial, the defendant wouldbe presumed innocent and the Government would have the burden of proving itguilty of every essential element of the crime charged beyond a reasonable doubt.The defendant would have the right to confront and cross-examine the witnessesagainst it. If the defendant wished, it could present evidence in its defense, and itcould subpoena witnesses to testify on its behalf. If, however, the defendant didnot wish to present evidence, that fact could not be used against it. If the defendantwere found guilty after a trial, it would have the right to appeal the conviction.Defendant ASP understands that by pleading guilty, it is giving up all of theserights, and there will not be a trial of any kind. Defendant ASP also understandsthat it ordinarily would have the right to appeal its sentence and, under somecircumstances, to attack the sentence in post-conviction proceedings. By enteringthis Plea Agreement, defendant ASP may be waiving some or all of those rights toappeal or collaterally attack its sentence, as specified below. Finally, DefendantASP understands that, to plead guilty, it may have to, through its duly authorizedagent, answer questions posed by the Court concerning the rights that it is giving2

1'1.up and the facts of this case, and answers, if untruthful, may be used m aprosecution for perjury or false statements.3) MAXIMUM STATUTORY SENTENCEDefendant ASP understands that, based on its plea of guilty to Count One ofthe Information, it will be subject to the following statutory maximum penalties:(a) Pursuant to 18 U.S.C. § 3571(c) and (d) and 33 U.S.C.§ 1319( c )(2)(A), the court may impose a fine up to the greater of: $50,000 per dayof violation; $500,000; or the greater of two times the gross gain or two times thegross loss;(b)Pursuant to 18 U.S.C. § 3561(c)(l), the Court may impose a term ofprobation of at least one year, but not more than five years;(c)Pursuant to 18 U.S.C. § 3563(b)(2) or 3663(a)(3), the Court may orderit to pay restitution to any victims of the offense; and(d)Pursuant to 18 U.S.C. § 30 13(a)(2)(B), the Court is required to orderthe defendant to pay a $400 special assessment upon conviction for the chargedcnme.Defendant ASP understands that, before imposing sentence in this case, theCourt will be required to consider, among other factors, the provisions of theUnited States Sentencing Guidelines. However, the Government and DefendantASP have agreed and consented to a binding plea agreement under Fed. R. Crim.P. 11 (c)( 1 )(C) as set forth in Paragraph 5 herein.4) LIMITATION OF CHARGESThe United States Attorney for the Northern District of Georgia and theEnvironmental Crimes Section of the Department of Justice agree not to bringfurther criminal charges against Defendant ASP, or any other affiliated or related3

entity of Defendant ASP, relating to, based on or arising out of any matters thatwere the subject of the Government's criminal investigation of Defendant ASP'sfacility located at 1310 Seaboard Industrial Boulevard, Atlanta, Georgia (the"Seaboard facility") and any matters from the Government's criminal investigationof Defendant ASP's Seaboard facility that were known to the Government as of thedate of this Plea Agreement. Defendant ASP understands that this provision doesnot bar prosecution by any other federal, state, or local jurisdiction.DefendantASP also understands that this Plea Agreement does not provide or promise anywaiver of any civil or administrative actions, sanctions, or penalties that mayapply, including but not limited to: fines, penalties, suspension, debarment, listing,licensing, injunctive relief or remedial action to comply with any applicableregulatory requirement.5) SENTENCING RECOMMENDATIONFor the purposes of proffering the relevant conduct to the Court in this case,Defendant ASP and the Government have executed a Joint Statement of Facts,attached hereto as Attachment A. Pursuant to Fed. R. Crim. P 11(c)(l)(C), theUnited States and Defendant ASP agree that the following sentence is anappropriate disposition of this case:(a)the payment of a criminal fine of three million eight hundred thousanddollars ($3,800,000.00) by ASP, due I 0 days after the date ofsentencing;(b)three years of unsupervised probation, the conditions of which will be:(i) Defendant ASP not commit another federal, state, or local crimeduring the term of probation, as provided by 18 U.S.C. § 3563(a)(l),(ii) Defendant ASP pay the criminal fine and special assessmentimposed by the Court, and (iii) pursuant to 18 U.S.C. § 3563(b )(22),4

the prov1s10ns set out mthe Compliance Agreement, executedbetween Defendant ASP and EPA, and attached hereto as AttachmentB; and(c)the payment of the special assessment of $400 for Count One, asrequired by 18 U.S.C. § 30 13(a)(2)(B), due 10 days after the date ofsentencing.The Government is not seeking restitution in this case. The Government andDefendant ASP further agree that the terms outlined in this Paragraph represent thefull and complete extent of the criminal sanctions to be imposed by the Court onDefendant ASP in this case and pursuant to the terms of this Plea Agreement. Ifthe Court accepts and imposes the aforesaid terms, Defendant ASP may notwithdraw this plea.6) WAIVER OF PRE-SENTENCE INVESTIGATIONThe Government and Defendant ASP request, pursuant to Fed. R. Crim. P.32( c )(1 )(A)(ii) and U.S.S.G. Section 6A 1. 1, that the Court waive a pre-sentenceinvestigation and the preparation of a pre-sentence report in the case.TheGovernment and Defendant ASP further request that the Court sentence DefendantASP at the time the plea of guilty is entered.7)WAIVER OF APPEALIf the Court accepts this Plea Agreement and imposes the recommendedsentence in Paragraph 5 above, Defendant ASP knowingly, voluntarily, andexpressly waives any right it may have to appeal its conviction and the sentenceimposed upon it and the manner in which the sentence is determined on anyground, including, without limitation, to the grounds set forth in Title 18, UnitedStates Code, Section 3742. Defendant ASP further understands and agrees that the5

IIword "sentence" appearing throughout this waiver provision is being used broadlyand applies to all aspects of the Court's sentencing authority, including, withoutlimitation, (1) Sentencing Guidelines rulings and determinations; (2) theimposition of fines, probation, and any specific terms and conditions thereof and(3) any orders of restitution. If the Court accepts this Plea Agreement and imposesthe recommended sentence in Paragraph 5 above, Defendant ASP also knowingly,voluntarily, and expressly waives its right to challenge its conviction and sentenceand the manner in which the sentence is determined, in any collateral reviewmotion, writ, or other procedure, including, without limitation, a motion broughtunder Title 28, United States Code, Section 2255.8) CORPORATE AUTHORIZATIONThis Plea Agreement has been submitted to the Board of Directors ofDefendant ASP, which has manifested its intention and agreement by corporateresolution, properly executed, to plead the corporation guilty in accord with thisagreement and directed its President, William Holl, and its counsel, Paul B.Murphy, Esq., to enter the Plea Agreement for defendant. A copy of this corporateresolution shall be attached hereto as Attachment C and made part of the record ofthis case at the time of the entry of the plea of guilty. Defendant ASP affirmativelystates that it has sufficient assets to pay the fine and special assessment and that ithas obtained and received the approval of its board of directors to make suchpayments.Defendant ASP states that its representative has read this agreement and hasdiscussed the agreement with its attorneys, and understands it.9) CONCLUSIONIf Defendant ASP fails in any way to fulfill each one of its obligations under6

this Plea Agreement, the Government may elect to be released from itscommitments under this Plea Agreement. The Government may then prosecute thedefendant for any and all Federal crimes that it has committed related to this caseand may recommend to the Court any sentence for such crimes up to and includingthe maximum sentence. The defendant expressly waives any statute of limitationsdefense and any constitutional or statutory speedy trial defense to such aprosecution, except to the extent that such a defense exists as of the date it signsthis Plea Agreement. In addition, the defendant agrees that, in such a prosecution,all admissions and other information that it has provided at any time, including allstatements it has made and all evidence it has produced during proffers, interviews,testimony, and otherwise, may be used against it, regardless of any constitutionalprovision, statute, rule, or agreement to the contrary.Notwithstanding theforegoing, no information or statements submitted by or made by counsel fordefendant during any meeting with or presentation to the government or in anycorrespondence or submission to the government shall be used against thedefendant. Finally, the defendant understands that its violation of the terms of thisPlea Agreement would not entitle it to withdraw its guilty plea in this case.[Remainder of page intentionally left blank.]7

IIThere are no other agreements, promises, representations, or understandingsbetween Defendant ASP and the Government.In Open Court this ___ day of June, 200 7.PAUL B. MURPHYAttorney for DefendantWILLIAM A. HOLLAcuity Specialty Products Group, Inc.Assistant United States AttorneySenior Trial AttorneyDepartment of JusticeEnvironmental Crimes SectionDATE8

CERTIFICATION OF ATTORNEY AND DEFENDANTI have read the Criminal Information against ASP and have discussed it withthe attorney for ASP. I understand the charge and the elements of the charge thatthe Government would have to prove to convict ASP at a trial. I have read theforegoing Plea Agreement and have carefully reviewed every part of it with theattorney for ASP. I understand the terms and conditions contained in the PleaAgreement, and as a representative for ASP, I voluntarily agree to them as theybind ASP. I also have discussed with ASP's attorney the rights ASP may have toappeal or challenge the sentence, and I understand that the appeal waiver containedin the Plea Agreement will prevent ASP, with the narrow exceptions stated, fromappealing the sentence or challenging the sentence in any post-convictionproceeding. No one has threatened or forced me to enter a plea guilty on behalf ofASP, and no promises or inducements have been made to me other than thosediscussed in the Plea Agreement. The discussions between ASP's attorney and theGovernment toward reaching a negotiated plea in this case took place with ASP'spermission. I am fully satisfied with the representation provided to ASP by itsattorney in this case.Authorized Representative forAcuity Specialty Products Group, Inc.DATEI am ASP's lawyer. I have carefully reviewed the charge and the PleaAgreement with my client. To my knowledge, my client is making an informedand voluntary decision to plead guilty and to enter into the Plea Agreement.DATE9

INFORMATION BELOW MUST BE TYPED OR PRINTEDPAUL B. MURPHYNAME (Attorney for Defendant)ACUITY SPECIALTYPRODUCTS GROUP, INC.NAME (Defendant)STREET'I Lj 0 I N v l(:flfJI 0 t jJ /}({I( lV+/STREET 111. -:fL .ATIAI\fTt4-614 5?; 0 a,CITY & STATE ZIP CODECITY & STATEZIP CODEPHONE NUMBER tftJt./--S72-'/7.StJPHONE NUMBER Lj()L/ 6Filed in Open Court j.:J.q Jt; 7rn·Byg , -10

ATTACHMENT A

IN THE UNITED STATES DISTRICT COURTFOR THE NORTHERN DISTRICT OF GEORGIAATLANTA DIVISIONUNITED STATES OF AMERICAv.CRIMINAL NO.I :0 7-CR-223ACUITY SPECIALTY PRODUCTSGROUP, INC.DefendantJOINT STATEMENT OF FACTSThis Factual Basis contains a joint statement of the facts that accompany thePlea Agreement in the above-referenced criminal case signed and dated this same daybetween the United States and Acuity Specialty Products Group, Inc. ("ASP") in theabove-captioned criminal prosecution.Background1. Defendant ASP operates a manufacturing facility located at 1310Seaboard Industrial Boulevard, Atlanta, Georgia (the "Seaboard facility''). Prior to2001, the Seaboard facility was operated by Zep Manufacturing, the predecessor toASP for purposes relevant to this Joint Statement of Facts. Through a series ofcorporate restructurings in 200 1, the Seaboard facility was transferred to a new

company, ASP. ASP is a Delaware corporation, registered to do business in Georgia.2. The Seaboard facility is a chemical blending facility that manufacturesnumerous detergent and cleaning products which are used for industrial and domesticpurposes. Within the facility were different plants, each of which produces a differenttype of detergent or cleaning product, including liquids, aerosols, powders and acids.3. At all relevant times, Defendant ASP employed an environmentalengineering and compliance manager, also known as the environmental engineer, atthe Seaboard facility. This individual was responsible for ensuring that the Seaboardfacility complied with federal, state and local environmental laws and regulations.The environmental engineer reported to and was supervised by various ASPmanagers, directors and vice presidents employed at the Seaboard facility.4. From in or about September 1998 until in or about August 2003,Employee A was employed at the Seaboard facility. From in or about September1998 until on or about September 30 , 2000, Employee A held the position ofEnvironmental Engineering and Compliance Manager. From on or about October 1,2000 until in or about November 2002, Employee A held the position of Director ofEnvironmental Compliance.From in or about September 1998 until in or aboutNovember 2002, Employee A was ASP's "authorized representative" for purposes ofsigning Self-Monitoring Reports and Permits for the Seaboard facility.2

CLEAN WATER ACT5. The Federal Water Pollution Control Act, 33 U.S.C. § 1251, et seq.,referred to as the Clean Water Act ("CW A"), was enacted by Congress to restore andmaintain the chemical, physical and biological integrity of the Nation's waters; toprevent, reduce and eliminate water pollution; and to conserve, protect and ensure thepropagation of fish and aquatic life and wildlife in the United States.6. The CW A prohibits, inter alia, the discharge of pollutants into the watersof the United States from any point source without a permit issued under the NationalPollutant Discharge Elimination System ("NPDES"). 33 U.S.C. §§ 131 1(a), 1342.7. The CW A also regulates the discharge of pollutants into sewagetreatment plants operated by municipal governments, known as publicly ownedtreatment works ("POTWs"), which discharge into waters of the United States.8. Under the NPDES program, some POTWs are required to establishpretreatment programs setting out requirements that must be met by industrial usersdischarging pollutants into the POTWs. 33 U.S.C. § 1342(b)(8); 40 C.F.R. § 40 3.8.9. A pretreatment requirement imposed on an industrial user includes anysubstantive or procedural requirement, other than a national pretreatment standard,which relates to discharges from an industrial user to a POTW.33 U.S.C.§ 1342(b)(8); 40 C.F.R. § 403.3.3

II10. The R.M. Clayton Reclamation Center POTW is located on Plant Road,Atlanta, Georgia, and is operated by the City of Atlanta Department of WatershedManagement ("City of Atlanta"). The City of Atlanta is authorized to operate theR.M. Clayton Reclamation Center POTW pursuant to a NPDES permit issued by theGeorgia Environmental Protection Division, which authorizes the discharge of treatedwastewater from the R.M. Clayton Reclamation Center POTW to the ChattahoocheeRiver.11. Under its NPDES permit, the City of Atlanta must require all industrialusers that discharge to the R.M. Clayton Reclamation Center POTW to comply withthe CWA, the General Pretreatment Regulations, and the City of Atlanta's State-Approved Pretreatment Program.The City of Atlanta's Pretreatment Programincorporates, inter alia, a Sewer Use Ordinance, and allows the City of Atlanta to issueIndustrial Wastewater Discharge Permits to Industrial Users.12. At all times relevant to the Information, phosphorus and pH fell withinthe definition of a pollutant pursuant to the Clean Water Act. 33 U.S.C. § 1362(6).THE SEABOARD FACILITY'SINDUSTRIAL WASTEWATER DISCHARGE PERMIT13. Wastewater resulting from the manufacturing processes at the Seaboardfacility contains several pollutants, including phosphorus, a common waste constituent4

for a chemical blending facility that manufactures detergent and cleaning products.14. Wastewater resulting from the manufacturing processes at the ASPfacility also included water with a highly acidic or basic composition. The acidic orbasic composition is referred to in the Permit as "pH." The scale for measuring pHranges from 0 to 14. Wastewater with a low pH is highly acidic, and wastewatercontaining high pH is considered to be basic. A pH of 7 is considered to be neutral.15. At all times relevant to the Information, the Seaboard facility was subjectto Industrial Wastewater Discharge Permit No. C128 (the "Permit"), which had beenissued to Zep Manufacturing, Inc. by the City of Atlanta. At all times relevant to theInformation, Permit No. C128 incorporated the City of Atlanta's Sewer UseOrdinance ("Sewer Use Ordinance") by reference.16. Permit No. C 128 allowed the Seaboard facility to discharge industrialwastewater effluent to the R.M. Clayton Reclamation Center POTW, from thefacility's Wastewater Pre-Treatment Plant, in accordance with effluent limitations setby the Permit.17. The Permit prohibited the discharge of wastewater containing aconcentration of phosphorous greater than 10 mg/L if the facility discharged 25,000gallons or more of wastewater per day. The Permit provided for an alternative massbasedphosphorus limit of 2.0 pounds of phosphorus per day if the facility discharged5

IIless than 25,000 gallons of wastewater per day.18. The Permit also required ASP to conduct sampling of its wastewatereffluent for, inter alia, phosphorus concentration and pH at specified intervals froma specified compliance point. The Permit required ASP to have the samples tested andto report the sample results every month to the City of Atlanta on a Self-MonitoringReport ("SMR"). The City conducted semi-annual monitoring at the Seaboard facilityto evaluate ASP's compliance with the conditions in the Permit.19. The Seaboard facility's Permit did not limit the number of gallons ofwastewater that ASP could discharge to the City sewer system. The Permit providedthat the Seaboard facility would be assessed a surcharge if the concentration of certainconstituents in its wastewater, such as Chemical Oxygen Demand, Total SuspendedSolids, and Total Kjeldahl Nitrogen, exceeded established thresholds.20. ASP's Permit required immediate reporting by ASP to the City of Atlantaand other regulatory authorities in the event of "a spill, dump or unavoidabledischarge of any substance to any stream, creek, ditch or storm sewer with the Cityof Atlanta."21. The City of Atlanta Sewer Use Ordinance, which is incorporated intoASP's Permit and is a requirement of the Permit, requires that SMRs be signed by an"authorized representative" of ASP. The term "authorized representative" is defined6

IIin the Sewer Use Ordinance as "the president, secretary, treasurer, or a vice-presidentof the corporation in charge of a principal business function, or any person whoperforms similar policy or decision-making functions for the corporation."22. The Sewer Use Ordinance, incorporated into the Permit, requires that allsampling conducted at the facility consist of "representative" samples. The Sewer UseOrdinance defines representative sampling as sampling that is "representative of dailyoperations."Holding and Reducing Wastewater From the Seaboard Wastewater Pre-TreatmentPlant and Skewing Sampling During City of Atlanta Monitoring Events23. Beginning at an unknown date, but before Employee A was hired at theSeaboard facility, until in or about November 2002, when City of Atlanta personnelwere conducting semi-annual monitoring at the Seaboard facility, ASP employees,including Employee A, requested or directed that plant supervisors instruct employeesat the various production plants at the Seaboard facility not to discharge wastewateror to reduce the amount of wastewater discharged from the facility's production plantsto the wastewater pre-treatment plant. These actions prevented City personnel fromtaking representative samples of ASP's wastewater during its semi-annual monitoring.24. Beginning in or about January 2000 until in or about June 200 2, whenCity of Atlanta personnel were conducting semi-annual monitoring at the Seaboardfacility, Employee A directed employees at the facility to dilute the wastewater being7

discharged to the R.M. Clayton Reclamation Center POTW by running water from asink in the wastewater pre-treatment plant, and by running water through a hose intoa drain box outside the wastewater pre-treatment plant known as the "V-notch weir."Selective Sampling in Violation of ASP's Permit25. From in or about September 1998 until in or about November 2002, onnumerous occasions, Employee A directed Seaboard facility wastewater pre-treatmentplant employees to take steps to obtain samples of wastewater that were not"representative" samples of the facility's wastewater, as required by the Sewer UseOrdinance. These steps included backdating chain of custody forms for samples thatwere sent to and received from ASP's testing lab, filling sample bottles with mostlysanitary or tap wastewater, and taking grab samples (samples gathered instantly andimmediately) rather than composite samples (samples gathered over a 24-hour timeperiod) as required by the Permit.26. From on or about August 10, 1999 until on or about December 10 , 2002,on numerous occasions, Employee A knowingly reported false test results forphosphorous sampling on SMRs submitted to the City of Atlanta, in violation of thePermit.27. From in or about October 200 1 until in or about September 2002, onnumerous occasions, Employee A knowingly reported false flow data on SMRs8

submitted to the City of Atlanta.28. On or about April 4, 2000, Employee A knowingly failed to report thedischarge of approximately 10,000 gallons of sludge into the City of Atlanta sewersystem.29. On or about March 23, 200 2, Employee A knowingly failed to report toany authorities that acid product and caustic wastewater had been discharged into aditch at the Seaboard facility, in violation of ASP's Permit.30. From in or about June 2002 until on or about October 1, 2002, the exactdates being unknown, Employee A reported pH data on SMRs submitted to the Cityof Atlanta which was false because the pH probe was not functioning. It is not knownwhether the actual pH of the facility's wastewater exceeded the permit limits.31. On or about November 7, 2002, Employee A caused a garden hose to beused to dilute wastewater pre-treatment plant effluent in the V-Notch weir area of thewastewater pre-treatment plant, in order to prevent City of Atlanta personnel fromobtaining a representative sample of the facility's wastewater while the City personnelwere conducting monitoring at the facility.32. On or about the dates listed below, Defendant ASP, through EmployeeA, knowingly failed to report accurate phosphorus sampling results on the SMRssubmitted to the R.M. Clayton Reclamation Center POTW:9

IIDateOctober 30, 200 1November 6, 2001anuary 8, 2002anuary 29, 2002September 5, 2002September 25, 2002!December 10, 200233. On or about the dates listed below, Defendant ASP, through EmployeeA, knowingly failed to report accurate pH results on the SMRs submitted to the R.M.Clayton Reclamation Center POTW:DateJune 2002July 2002August 2002September 200234. On or about the dates listed below, Defendant ASP, through EmployeeA, knowingly failed to report accurate flow data on the SMRs submitted to the R.M.Clayton Reclamation Center POTW:DateOctober 2001November 2001December 2001January 2002February 2002March 2002April2 002May 200210

IIDateAugust 2002September 200235. On or about the dates listed below, Defendant ASP employees knowinglyrendered inaccurate a monitoring device or method required under the Clean WaterAct, by holding wastewater, or not discharging wastewater from the Wastewater Pre-Treatment Plant during monitoring conducted by the City of Atlanta.DateOctober 200 1June 2002November 200236. On or about November 7, 2002, Defendant ASP, through Employee A,knowingly rendered inaccurate a monitoring device or method required under theClean Water Act, by diluting the facility's wastewater with a hose during monitoringconducted by the City of Atlanta.11

ATTACHMENT B

BEFORE THEUNITED STATES ENVIRONMENTAL PROTECTION AGENCYJUN ·18 2II11t,/lj7In the Matter ofACUITY BRANDS, INC. AND ACUITYSPECIALTY PRODUCTS GROUP, INC.,Respondents.)))) EPA Case No. 07-0095-00)))COMPLIANCE AGRER.'\fENTThis Compliance Agreement ("Agreement'') is made between the U.S. EnvironmentalProtection Agency ("EPA") and Acuity Brands, Inc. and its wholly-owned subsidiary, AcmtySpecialty Products Group, Inc. ("ASP") (hereinafter Acuity Brands ,Inc. and ASP are referred tocollectively us "Acuity" or the "Respondents") in order to resolve matters relating to statutorydisquahficatlOn pursuant to SectiOn 508 (a) of the Clean Water Act ("CWA"), 33 U.S.C. 1368(a)arising out of the conviction of ASP under the CWA.RECITALSA. Acu1ty Brands, Inc. 1 is a pubhcly traded company with a separate chemicalssubsidiary, Acuity Specialty Products Group, Inc. ASP is a leading provider of specialtychemical products in the institutional, industnal, and retail markets.B. ASP owns and operates a chemical blending facility, the Seaboard Facility, located at1310 Seaboard Industrial Boulevard, Atlanta, Georgia The Seaboard Facility blends chemicals1 Acuity Brand. Inc. has two subsidiaries, Acmty Brands Lighting and Acu1ty Specialty Products Gro:tp, IncAcuity Brands Lighting is not a party ro this Compliance Agreement.-I-

purchased from other companies to manufacture numerous detergent and cleaning productswhich are used for industrial and domestic purposes. Within the Seaboard Facihty are differentpJants, each of which produces a different type of detergent or cleaning product, includingliquids, aerosols, powders and acids.C. The Federal Water Pollution Control Act, 33 U.S.C. 251, et. .• referred to as theClean Water Act ("CWA") regulates , among other things, the discharge of pollutants into sewagetreatment plants operated by municipal governments, known as pubhcly owned treatment works("POTWs"), which discharge into waters of the United States.D. The CWA prohibits the discharge of pollutants into the waters of the United Statesfrom any point source without a permit issued under the National Pollutant DischargeElimination System ("NPDES").E. Under its NPDES permit, the City of Atlanta must require all industrial users thatdischarge to the relevant POTW to comply with the CW A, the General PretreatmentRegulations, and City of Atlanta's approved Pretreatment Program. The City of Atlanta'sPretreatment Program mcorporates, among other things, a Sewer Use Ordinance, and allows theC1ty of Atlanta to issue Industrial Wastewater Discharge Permits to industrial users.F. On or about March 8, 1994, the City of Atlanta issued ASP's predecessor, ZepManufactunng Inc., Industrial Wastewater Discharge Pennit No. C128 governing the dischargeof treated wastewater from the Seaboard Facility. The permit was re-issued on or about February15, 1999. The pennit allows the Seaboard Facility to discharge industnal wastewater effluent tothe relevant P01W from the Seaboard Facility's Wastewater Treatment Plant located at the-2-

Seaboard Facility, in accordance with effluent limitations set by the Industrial WastewaterDischarge Permit.G. The permit limits the Total Phosphorous in ASP's discharge to the City of Atlanta'ssewer to a maximum allowable concentration of 10 milligrams per liter (mgll) as measured by a24-hour composite sample, or a maximum allowable mass discharge of two pounds per day ofTotal Phosphorus when the volume of wastewater discharged to the City's sewer from theSeaboard Facihty IS less than 25,000 gallons per day.H. The United States charged that Daniel Schaffer, the former EnvironmentalEngineering Manager at the ASP Seaboard Facility, beginning in or about September 1998 andcontinuing through about January 2003, conspired with others to violate the Clean Water Act byknowingly discharging wastewater in violation of the Industrial Wastewater Discharge Permit,submitting false infonnation on Self-Monitoring Reports submitted to the City of Atlanta, andrendering inaccurate the methods required by the City of Atlanta for obtaimng representativesamples of the Seaboard facility's wastewater effluent.On February 27, 2006, Daniel Schafferpled guilty to these charges as contained in the Criminal Information in U.S. v. Daniel Schaffer,Case No. 1:06-CR-085.L The Criminal Information to which Mr. Schaffer pled guilty states at paragraph 29 (b):"From in or about September 1998 untllm or about November 2002, on a routmeand regular basis, when City of Atlanta personnel were conducting monitoring at theAcuity facility, Defendant Schaffer and coconspirator "A," a Vice-President ofEngineering at the Acuity facility, ordered supervisors at the various production plantsat the Acuity facility to not discharge wastewater from Acuity's production plants tothe wastewater treatment plant, in order to prevent City of Atlanta personnel from-3-

eceiving a representative sample of flow that the POTW would use to charge and assessa surcharge to Acuity under the Industrial Wastewater Discharge Pennit.J. ASP has accepted responsibility for the acts of its managers , supe:rtisors, andemployees and has agreed to plead guilty to a one count charge of a knowing violation of theClean Water Act, 33 U.S.C. 13l9(c)(2)(A), in the United States District Court for the NorthernDistrict of Georgia.K. This Agreement is expressly conditioned upon the prompt completion, signing, andexecution by ASP and approvaJ of the U.S. Government of Attachment A, the criminal PleaAgreement, and the continued implementation of these documents by ASP in accordance withtheir tenns. ASP agrees to pay a fine of Three Million Eight Hundred Thousand Dollars($3,800,000), and to a three year term of probation.L The criminal plea and surrounding misconduct of ASP described in paragraphs Hthrough J constitute cause for the statutory listing of ASP.M. Acuity, through its legal counsel, has met with representatives of EPA's Suspensionand Debarment Division ("SDD") and has advised EPA that the Respondents desire to resolvethe statutory listing action arising out of the above-mentioned facts. In support of its efforts toreso1ve this matter, Acuity has submitted documentation to SDD describing how it addressed thecondition which gave rise to the violation and its corporate compliance efforts.N. On January 16,2007, Joseph Camonaro and Marcella Black of EPA SDD toured theASP Seaboard Facility and were shown technical improvements implemented by ASP ascorrective actions.-4-

Conditions Giving Rise to the Offenses0. From in or about October 2001 until in or about November 2002, ASP knowinglyviolated requirements imposed in a pretreatment program approved under section1342(b)(8) of the Clean Water Act when its employees failed to report accurate sampling resultsfor flow, phosphorus and pH, and by knowingly causing the City of Atlanta to take sampleswh1ch were not representative of the facility's wastewater dunng its semi-annual monitoringevents, all in violation of Title 33, United States Code, Section 1319(c)(2)(A). This misconductoccurred despite the company's having in place an existing environmental program, traimngprogram, internal and external audits, and company code of conduct. All of which mdicates thatthe previous programs and policies, while perhaps sufficient on their face, lacked sufficientimplementation and enforcement and lacked sufficient mechanisms for corporate oversight andaccountability for managers, supervisors, operators , and employees to prevent these violations.Remedial MeasuresP. Acuity terminated Daniel Schaffer, the former Environmental Engineering Manager atthe Seaboard Facility. The former Vice President of Engineering retired in 2001. Otheremployees implicated in the misconduct are no longer employed by Acuity.Q. Promptly in response to the Circumstances, Acuity took steps to come into compliancewith the permit by shipping wastewater offsite while its consultant evaluated the wastewatertreatment plant. Acuity engaged its environmental consultant, Rindt-McDuff Associates, towork wtth the Seaboard staff to determine the cause of the high phosphorus levels and proposeremedial measures to return to compliance with the pennit. In addition, Acuity began-5-

IHIconstruction on improvements to the Seaboard Facility Wastewater Treatment Plant in early2003 and concluded this work in December 2003, investing more than $Llmillion in the project.Since that time Acuity has invested an additional $300,000 in the wastewater treatment plant.Acuity also instituted procedures to prevent inadequately treated wastewater from bemgdischarged to the City of Atlanta sewer and reinforced existing housekeeping and wasteminimization procedures to reduce the amount of wastewater generated by the manufacturingareas at the Seaboard Facility.R. Acuity began an internal investigation which uncovered a number of discrepancies inthe monthly self-monitoring reports. Acuity voluntarily disclosed 19 unreported phosphorusviolations to the United States Department of Justice and the City of Atlanta and four additionalphosphorus discrepancies and some anomalies in the way flow rates were reported on the selfmonitoringreports. Additional discrepanCies tn the self-monitoring reports have also been notedto the Department of Justice covering the time period of 1993-1997.S. On or about December 23, 2003, ASP entered into a Consent Order with the Crty ofAtlanta, Department of Watershed Management, Office of Environmental Compliance, whichamong other things , resolved severa1 self-reported and City-measured exceedances of the TotalPhosphorous limits contained in the Permit. Acuity paid $225,000 in settlement of the matter tothe City of Atlanta and agreed to install a "clear well" in the wastewater pre-treatment plant atthe Seaboard Facility with provisions for solids removal and allowance of visual observation andsample collection.-6 -

T. Acuity re-evaluated its existing compliance program. As a part of thls process, Acuityanalyzed virtually every facet of its compliance program, including the use of outside consultantsand auditors. A3 a result, a new envtronmental consulting firm, Environmental ResourcesManagement ("ERM'') was engaged to provide an independent and "fresh look" at Acuity's entireenvironmental management system, which included new, comprehensive audits of allmanufacturing facilities completed in 2004. Since April 2005, ERM audits of ASP facilitieshave demonstrated that all facilities are in substantJ.al comphance.U. Among the enhancements implemented to prevent a recurrence of such permitproblems include independent auditors now periodically examine the underlying sample data toensure that the facility is not violating any of its environmental permits and that the reports sentto regulatory agencies are correct. In additton, at the Seaboard Facility, two different indtvidualsreceive copies of the independent lab's data and verify that the self-monitoring reports areaccurate and complete .V. A new Vice President of Compliance ("VPC") was hlred by the parent company mFebruary 2004 to design and facilitate the implementation of a corporate-wtde environmentalprogram. ASP has hired a new Environmental Compliance Officer {"ECO") for ASP and a newFacility Environmental Coordinator ("EC") for the Seaboard Facility. There are also a number ofArea Environmental Coordinators who assist the Faetlity EC with compliance duties at eachfacility.W. Acuity increased environmental training for all employees, tncludmg a two-dayenvironmental conference for all managers and facility environmental coordinators.-7-

X. Acuity represents to EPA that ASP will pay in full the criminal fine of Three Mi llionEight Hundred Thousand Dollars ($3,800,000) to the United States as required in the PleaAgreement. Additionally, Acuity has accepted responsibility and represents that it will sincerelyand fully comply with all the terms of this Agreement, including but not limited to fullcompliance with all the terms of the Plea Agreement, which upon its completion will bemcorporated herein as Attachment A.Y. Acuity is continuously evaluating, enhancing, and updating its EnvironmentalCompliance Program ("ECP"). The ECP includes elements as set forth in this Agreement and inAttachment A to this Agreement. These elements include communications of Acuit y 's ethics,code of conduct, and environmental policies to management and employees and managementand employee responsibility for compliance, use of an independent hotline to report violations,disciplinary actions, management and employee training, and enhanced audits.z. Acuity has agreed to all the terms and conditions of this Agreement to promote futurecompliance with all federal, state, and local environmental laws. Acuity agrees not to violate theterms of any federal or state consent decree, consent order, plea agreement, or complianceagreement to which Acuity may be a party.AA. WHEREFORE, EPA and Acuity, in reliance upon the representations contained inthis Agreement, including the Recitals, the body of the Agreement and Attachments, and mconsideration of the mutual promises, covenants, and obligations in this Agreement, do herebyagree to the following terms and conditions.,-8-

IITERMS AND CONDnnONS1. Definitions and terms for this Agreement are as follows:a. The "Effective Date" of this Agreement shaU be the date the EPASuspending and Debarring Official signs the Agreement on behalf of EPA.b. "Government" and "federal government" will include any department,agency, division, or agents of the United States of America.c. "Acuity" is Acuity Brands, Inc. and Acuity Specialty ProductsGroup, Inc. and includes its headquarters, all of Acuity SpecialtyProducts' facilities, divisions, and projects in the United States and 1tsterritory.d. The period of this Agreement shall be three (3) years from its effectJvedate.e. All conditions and required documents under this Agreement to be meton specific dates will be from the Effective Date of this Agreement, unlessotherwise specified.f. Time requirements set forth in this Agreement unless otherwiseexpressed, are understood to mean "calendar days.''2. EPA will not initiate a listing action against Acuity and the Debarring Official willcertify that Acuity has corrected the condition which led to the violation by ASP, based on therepresentations of Acuity contained in this Agreement, all documentation submitted in support ofthts Agreement, and Acuity's compliance with the tenus and conditions of this Agreement.-9-

allegations of Acuity's corporate integrity and present responsibility, subj ect to compliance withParagraph 10 (b)((vii) below.For purposes of this Agreement, the Independent Ombudsmanshall have the authority to investigate the following types of "corporate integrity" or "businessethics": the theft of money or property, fraud or false statements, destruction or alteration ofrecords required to be maintained by law, bribery of government officials, illegal gifts orgratuities, antitrust violations, and any other non-compliance with federal, state or local laws(other than environmental laws except as specified herein). The Independent Ombudsman shallinvestigate the business ethics component of any Hotline calls involving alleged environmentalnoncompliance which involve allegations of any Acuity supervisor's, manager"s, or official'sconspiring, engaging, directing, or acquiescing in alleged environmental noncompliance.Furthennore, the Independent Ombudsman shall forward to the Acuity Audit Committeedesignee any information received concerning accounting and audit irregularities, conflict ofinterest, falsification of company records, improper loans to executives, insrder trading,retaliation, an d kickbacks, to aid in Acuity's compliance with Sarbanes-Oxley Act requirements.(ii) Notification.Actuity wi11 notify all employees of the name, address and Hotline telephone number ofthe Ombudsman in writing, on its company intranet, and by prominent display of posters withthis information in work areas and restrooms in each facility. The notification and posters willinfonn all employees that calls to the independent Hotline concerning Acuity's corporatebusiness ethics and present responsibility will be d1rected to the Ombudsman for investigation.Acuity shall fully support the Ombudsman in every way necessary.-1 5-

(iii) Reports of InvestigationsAt the conclusion of any investigation conducted by the Ombudsman, the Ombudsmanshall provide a written repon to the President of the parent company, Acuity Brands Inc., to thePresident of Acuity Specialty Products Group , Inc., and to EPA, SOD detailing the substance ofthe allegations, evidence revealed by the investigation, and the findings and recommendations.AcULty shall take corrective actions where appropriate.(iv). Semi-Annual Review and Report.The Ombudsman shall conduct a semi-annual review of Acuity's corporate integrity andattitude with respect to ethical concerns. The Ombudsman may consider the Acuity Code ofEthics and Business Conduct and other written materials and documents prepared or utilized inthe ordinary course of business by Acmty. The Ombudsman may also interview relevantpersonnel regarding Acuity's business ethics.The Ombudsman may also visit any Acui ty facilityor plant if the Ombudsman, in his or her reasonable discretion, believes that such a vis1t isnecessary in order to complete the review. Within 45 days of the semi-annual review, theOmbudsman shall furnish EPA a written report of the compliance review, w1th a copy to thePresident of Acuity Brands, Inc. and to the President of Acuity Spec1alty Products Group, Inc.The report may contain suggestions for improvement of the Code of Ethics and BusinessConduct, as appropriate.-16-

(v). Schedule.After submission of the first two semi-annual reports, the Ombudsman's reviews will beconducted on an annual basis, and the Ombudsman reports w11l be completed and submittedwithin 45 days after conclusion of each annual review.(vi) Consultation with EPAIf EPA becomes dissatisfied with the performance of the Ombudsman, then a newOmbudsman shall be appointed by Acuity in consultation with EPA.(vii) Affidavit.Acuity will provide EPA, SDD with an Ombudsman affidavit and separate corporateaffidavit, and annually thereafter during the period of this Agreement, certifyi ng that theOmbudsman has no financial interest in, or other relationship with, Acuity or its affiliates, exceptfor the receipt of fees for professional services rendered pursuant to this Agreement. Theaffidavit must certify that the Ombudsman does not currently have an adversarial relati onship toEPA. Affidavits are to be submitted to EPA SDD ten business days prior to the selection of theIndependent Ombudsman and shall be submitted to EPA, SDD annually thereafter. Any changesin relationsh1p during the effective period of this Agreement are to be reported to EPA prior tothe Ombudsman entering into such adversarial relat10nslnp or immediately upon theOmbudsman or the Respondents discovering that such a relationship has arisen.11. Environmental Staff(a) Acuity Environmental Compliance Team-17-

In furtherance of its commitment to environmental compliance, Acuity agrees to main tama staff of environmental personnel, and to seek their advice on environmental Issues affecting thecompany, as well as to seek the advice of outstde consultants, federal and state agencies as oftenas necessary m order to achieve full compliance. In February 2004, the parent company, AcuityBrands Inc., hired an attorney with substantial environmental experience as its Vice President ofCompliance ("VPC") with overall responsibility for designing and facilitating theimplementation of Acuity Brands, Inc. environmental program across the corporati on andchairing the Acuity Brands Environmental Council (comprised of environmental complianceofficers for both Acuity Brands Inc. subsicliaries, the Vice President of Compliance, andrepresentatives from the legal department). Acuity Environmental Council meeting minutes shallbe made available to EPA during its review of Acuity's compliance with this Agreement.The subs)(iJary company, Acuity Specialty Products Group, Inc., has a new Director,Environment & Safety Compliance and a new Facility Environmental Coordinator ("EC") hasbeen established at the Seaboard Facility. These positions report directly to Senior Managementand the Vice President of Compliance also has dotted line reporting to the parent company'sAudit Committee of the Board of Directors. There are also a number of Area EnvironmentalCoordinators who assist the Facility EC with compliance Issues at each facility.Acuity agreesthat it will maintain these or eqUivalent high level management positions with responsibility forenvironmental, health, and safety compliance throughout the duration of th1s Agreement. Thecompany will atso retain environmental and safety consultants, as needed, for complianceservices and other environmental, health, and safety support.-18-

(b) Vice President of Compliance/Duties/Notification(i) Acuity Brands has established the senior management position of VicePresident of Compliance. The Vice President of Compliance position isresponsible for:a. Deploying the ECP throughout Acuity;b. Leading Acuity's Environmental Compliance Department;c. Overseeing the development of environmental training standards and thecontent of Acuity's in-house environmental training material;d. Implementing and overseeing procedures to communicate Acuity'sexpectation of environmental regulatory compliance to on-s1te serviceproviders, commercia] tenants (as applicable), contractors, and sub-contractors;e. Maintaining Acuity's register of applicable environmental regulations;f. Maintaining a register of performance based environmental credentialsnecessary for environmental compliance-related jobs in the Corporation;g. Investigating reports of EPS or environmental concerns or violations;h. Acting as the routine point-of-contact with regulatory agencies regardingenvironmental disclosures and regulatory compliance;i. Providing an annual environmental report to the Acuity President/Board ofDirectors;j. Providing the annual report to EPA, SOD; and-19-

k. Maintaining all records and documentation to support and demonstratecompliance with the CA.(ii) Notification. To the extent it has not already done so, Acuity will notify allemployees at its facilities or plants of the name, address, and telephone number of theVPC in writing and by prominent display of posters with this infonnation in appropriatework areas. The letter and posters will inform all facility employees that the VPC isavailable and by prominent display of posters with this information in appropnate workareas. The letter and posters will inform all facility employees that the VPC is availablefor consultation on any questlons they may have regarding their responsibilities asemployees, that they are to report any alleged violation of Jaw, regulation byemployees, and that their identity may remain confidential, if requested.(iii) Authority. The VPC shall have complete authority to investigate anyallegations of suspected environmental violations. At the conclusion of suchinvestigation, a written report shall be prepared and provided to the President or theAcuity Audit Committee of the Board of Directors, detailing the substance of theallegations, evidence revea1ed by the investigation, and the findings andrecommendations. The VPC also coordinates with and supports the IndependentOmbudsman, as appropriate.(iv). Annual Report. Acuity shaH report annually to EPA through its President, asummary of the status of compliance with this Agreement as reported by VPC .-20-

....12. Training.(a) Environmental TrainingAcuity will continue its increased environmental training for aU facility managers, facilityenvironmental coordinators, and area environmental coordinators including an annual twdayenvironmental conference for all facility managers and facility and area environmentalcoordinators. Further, Acuity will ensure that all supervisors and operators of its wastewatersystem receive a mimmum of 2 hours of training annually conducted by an outside trainingprovider concerning proper industrial wastewater discharge requirements, including sampling,and reporting requirements. Acuity will also consult with federal , state, or local governmentagencies on available training.(b) Ethics Training.Acwty will ensure that all officers, managers, supervisors, operators, and employeesrece1ve a one (1) hour minimwn training in ethical conduct and corporate business integrityannually. The training will also include infoiDlation on how to report such ethics or corporateintegrity problems to the Independent Ombudsman via the Hotline.(c) ReportingAcuity will provide EPA, SDD with a written report on the status of the trainingdescribed in this paragraph withm SIX months of the effective date of this Agreement and everytwelve months during the term of this Agreement.13. Certification(a) President's Initial and Annual Certification.-21-

1'1.Within 90 days from the effective date of this Agreement, and annually each year of th1sAgreement, Acuity, by its President and Chief Executive Officer, shall furnish to EPA a writtencertification that the Environmental Compliance Program is fully implemented and that theRespondents are m full compliance with all terms and conditions of the Agreement. Failure tocertify within the period may result in immediate suspension and/or proposed debarment or reimpositionof Respondents' statutory ineligibility.(b) V1ce President of Compliance CertificationBegtnning on June 30, 2007, and m each subsequent year on June 30, throughout the tennof this Agreement, Acuity, through its Vice President of Comphance, or his equivalent, shallmake a report to EPA. The report shall include, among other matters:1. Acuity's compliance with the terms of this Agreement as well asnotification to EPA of significant non-compliance with the terms of this Agreement;2. the number of calls concerning alleged environmental violationsand the results of any investigative actions taken by Acuity as a result of suchcalls to the Hotline;3. that Acuity has maintained files of management and employeeacknowledgements or certifications and to the best of Acuity's knowledgeacknowledgements or certifications are complete for all employees;4. that Acuity has maintained high level management positions withresponsibility for environmental, health, and safety compliance; and,-22-

5. that the training requirements described in Paragraph 12 above have beencompleted by Acuity.14. Modifications.Any requirement unposed on the Respondents by this Agreement may be discontinued bythe EPA Debaning Official, in consultation with SDD. Other modifications to this Agreementmay only be made in writing upon mutual consent of the parties.GENERAL PROVISIONSG 1. Lirmtations on SettlementThis Agreement relates solely to suspension and debarment issues, pursuant to 48 C.P.R.Subpart 9.4 and 2 C.F.R. § 180.200 hy 2 C.F.R. § 1532.10, in conjunction with the circumstancesrecited herein and in no way waives any criminal, civil, contractual, or administrative remedy orright which the Government may have for the circumstances so described nor does thisAgreement restrict the authority, responsibility, or legal duty of EPA to consider and institutesuspension and/or debarment proceedings against Acuity if informahon 1s received whtchprovides a cause for suspension and/or debarment independent of the circumstances recited orreferenced herein.G2. Debarment ResolutionThe Parties agree that Respondents' entry mto and compliance with the terms of thisAgreement is a material consideration for soo•s recommendation to the Debarring Offtcial thatthe conditions giving rise to the Respondents' conviction have been corrected and, inconsideration of Respondents' compliance with all of the terms of this Agreement, EPA further-23-

agrees not to suspend or propose Respondents for Debarment based on the fac ts recited hereinand any criminal conviction or civil judgment resulting there from.G3. Finalirv of AgreementAcuity hereby waives all further notice and opportunity for hearing to which it mayotherwise be entitled to proceed according to the terms of the Agreement.G4. Breach of Agreement/ Survival of Cause for DebarmentThe Parties agree that any causes for debarment survive the execution of this Agreementand EPA may initiate suspension and/or debarment proceedings against Respondents on thesegrounds if there is a material breach of this Agreement. Any material breach of this Agreementmay also be regarded as an independent cause for suspension or debannent; the Parties agree thatrepeated violations of non-material provisions of this Agreement may cumulatively become amaterial breach of this Agreement. EPA may, upon evidence that Respondents have committeda material breach of the Agreement, suspend or propose Respondents for debarment. EPA w11lpromptly notify Respondents in wnting of the suspension or proposed debarment. Respondentswill have the right to contest the suspension or proposed debannent according to the proceduresset forth in 2 C.P.R. § 180.720 and 180.815 Jri 2 C.F.R. § 1532.10.G5. Release of liabtlityBy executton of thrs Agreement, Acuity releases and shall hold hannless the Uni tedStates, its mstrumentalities, agents, and employees, in their official and personal capacities, ofany and all liability or claims arising out of or otherwise related to the negotiations lending tothts Agreement and all matters contained herein.-24-

I IG6. Freedom of InformationRespondents acknowledge that this Agreement and the Attachment hereto 1s subject torelease by EPA m accordance with the provisions of the Freedom of Infonnation Act, 5 U.S.C.552 et .G7. Obey all LawsRespondents will obey all laws and regulations of the United States, the relevant state andthe local jurisdtction. Nothing m this Agreement shall be deemed to limit Respondents'obhgations under any Federal law or regulation nor does this Agreement limit m any manner thenghl of the EPA to apply to Respondents any provision of any regulation lawfully promulgatedby EPA or the right of EPA to modify or amend or add to such regulations from t1me to t.lme.G8. Reporting RequirementIn the event that Acuity is ever indicted, convicted, or otherwise fonnally charged withfraudulent activity or any environmental violation, whether civdly, criminally, or by any privateparty in a formal judicial complaint, Acuity agrees to notify EPA, at the address specified herem,within ten (10) calendar days; Acuity will likewise notify EPA upon the indictment of, or theentering of a gui lty plea or a plea of nolo contendere by any director, officer, employee, orconsultant for violation of any criminal statute where the violation occurred in connection withthe individua1's performance of duties for, or on behalf of, Acuity.G9. Restructuring or Acquisition of New BusinessesRespondent shall not, through a change of name, business reorganization, sale orpurchase of assets, or similar action, seek to avoid the obligations and conditions set forth m the-25-

""Agreement. If, during the period covered by this Agreement, Respondents acquire or gamcontrol of any business concerns, which performs or may perform work on projects funded byFederal assistance or procurement programs, EPA shall be notifi ed withm ten (10) calendar days.Such notice shall state the nature of the business concern, the address of the business concernand the names and addresses of the business shall be subject to the terms and conditions of thisAgreement.In the event that EPA determines that newly-acquired business concern shal1 besubject to the provisions of this Agreement, EPA shall notify Respondents m writing of itsdetermination.G 10. Successors and Sale of AssetsThe tenns, conditions and obligations of this Agreement shall survive the reorgaruzationof Respondents' corporate structure and shall be fully binding upon any organization which is asuccessor in interest to substantially all of the assets or shares of Respondents or which ISassociated or a.fftliated with Respondents, provided, however, that this Agreement is not intendedto restrict the lawful and legitimate sale of assets to a bona fide purchaser and would not bindsuch an asset pucchaser.Gl l. On-Site Compliance ReviewDuring the period of this Agreement, the EPA may audit Acuity's compliance with theterms of this Agreement Such audit may include the examination of relevant business recordsand reports, visits by a member or members of EPA, SDD or its designee to Acuity'sheadquarters and/or regional facilities or sites, and interviews with employees. Acuity agrees toreimburse the U.S. Treasury for the reasonable costs actually incurred of conducting such audits-26-

"during the term of this Agreement The Parties agree that "cost" shall include reasonableexpense for travel, transportation, lodging and meals, to the extent normally authorized underFederal rules governing government travel; as such expenses are actually tncurred by EPApersonnel or its authorized agents in conducting site visits for the purpose of venfyingcompliance with this Agreement.Gl2. Audirs not Conducted On-SiteAs an alternative to an on-site audit of Acuity's compliance with the tenns of thisAgreement, EPA may, at its sole election, conduct an audit by mail in which instance Acuityshall provide documentation of its compliance with this Agreement including, but not limited to,copies of documentation maintained as required in this Agreement and such additionaldocumentation and/or certi fications as may be requested by EPA.013. DocumentationRespondents shall maintain documentation sufficient to demonstrate compliance v.'ith therequirements of this Agreement.Gl4. Notifications AddressesAll notifications or submissions from the Respondent required by this Agreement Wlll bedelivered to the following addresses:Frank DawkinsInvestigation and OversightSuspension and Debarment DivisionU.S. E PA (3902R)1200 Pennsylvania Avenue, N.W.Washington, D.C. 20460orVia Federal Express toFrank DawkinsInvestigations and OversightSuspension and DebarmentU.S. EPA (3902R)1300 Pennsylvania Avenue, N.W.Washington, D.C. 20004-27-

andAngelia Souder BlackwellDistrict CounselSuspension and Debannent DivisionSoutheastern DistrictU.S. Environmental Protection Agency61 Forsyth StreetAtlanta, GA 30303Name, Address and Title of corporate official responsible for ensunng timelysubmissions to EPA and for receiving EPA communications made under thi s Agreement:David A. KornVice President of ComplianceAcuity Brands, Inc.1170 Peachtree Street, N.E., Suite 2400Atlanta, GA 30309-7676GIS. Tenn of the AgreementThis Agreement shall remain in force for three (3) years from its effective date.G 16. Endorsement by the Debanin g OfficialThis Agreement shall become effective only upon its acceptance by the DebarringOfficial, pursuant to 2 C.F.R. §§ 180.635, 710, 810 2Y 2 C.P.R. § 1520.10, as evidenced by h1sdated endorsement affixed hereto.G 17. Certifications as to Recited FactsBy signature hereto, the individuals executing this Agreement on behalf of Acuity certifypersonally and on behalf of Acuity Brands, Inc. and Acuity Specialty Products Group, Inc.,subject to criminal penalties of 18 U.S.C. 1001 that the facts recited herein and in the-28-

1111submissions to SOD through their counsel by letters dated January 8, 2007, January 10, 2007,1 anuary 17, 2007, and by electronic mail on I anuary 8, 12, and 18, 2007, and March 19 and 21,2007 are complete and accurate.ACUITY BRANDS, INC.DAVID A. KORNVice President of ComplianceDate:hJJ 16, Z,D7ACUITY SPECIALTY PRODUCTS GROUP, INC.WILLIAM A. HOLLPresident and Chief Executive OfficerPAll:!::;rrKing & Spalding ILPCounsel for Acuity Brands, Inc. andAcuity Specialty Products Group, Inc.Date:FOR THE U.S. ENVIRONMENTAL PROTECTION AGENCY-Lrf- JANGDistrict CounselASOUDER BLACKSuspension and Debarment DivisionSoutheastern DistrictU.S. Environmental Protection AgencyDate: "fa="'? 2udz-29-

!Illrn the Matter ofAcuity Brands Inc. andAcuity Specialty Products Group, Inc.Compliance AgreementEPA Case No. 07-0095-00ENDORSEMENT AND DETERMINATIONHaving reviewed the terms of the above Compliance Agreement between the C.S.Environmental Protection Agency and Acuity Brands, Inc. and Acuity Specialty Products, Inc., Ihereby approve these tenns as an appropriate disposition of this matter. In the event thisAg1eement resolves an existing or potential ineligibility under Section 306 of the Clean Act orSection 508 of the Clean Water Act, this approval also constitutes certification that thecondition(s) giving rise to the violations have been corrected. Th1s certification is cond1t1onedupon fulJ compliance with the material tenns of this Agreement. Failure to comply w1th theseterms may result in immediate imposition or reinstatement of ineligibihty under those statutes.In addition, a material violation of this Agreement may result in discretionary suspension and/ordebannentcuity as appropriate.Date:· ng Official· ce of Grants and Debannent-30-

ATTACHMENT C

CERTIFICATE OF THE SECRETARYOFACUITY SPECIALTY PRODUCTS GROUP, INC.The undersigned, being the duly elected and acting Secretary of Acuity SpecialtyProducts Group, Inc., a Delaware corporation (the "Corporation"), does hereby certify thatattached hereto as Exhibit A is a true and correct copy of the Resolutions of the Board ofDirectors of the Corporation adopted at a special meeting held on June 4, 2007 pursuant towaiver of notice, whtch are in full force and effect as of the date hereof.IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal ofthe Corporation as of this 4th day of June, 2007(SEAL){Y/Helen D. Haines, Secretary

EXHIBIT ARESOLUTIONSOFTHE BOARD OF DIRECTORSOFACUITY SPECIALTY PRODUCTS GROUP, INC.,a Delaware corporation (the "Corporation")RESOLVED, that the Board of Directors of Acuity Specialty Products,Inc. (the "Corporation") authorizes the Corporation to enter into a written pleaagreement with the United States of America, substantially in the form of Exhibit"A" attached hereto (the "Plea Agreement"); andFURTHER RESOLVED, that the Corporation is authorized to fund thepayment of certain fees and penalties pursuant to the Plea Agreement; andFURTHER RESOLVED, that the Executive Officers of the Corporationbe, and each of them individually hereby is, authorized to take any and all suchfurther actions, to do any and all such other things, and to execute any and alldocuments, instruments, certificates, and papers, as he may deem necessary,appropriate, or desirable in order to carry out the purpose and intent of theforegoing resolutions.

GUl:LTY PLEA and PLEA AGRE-EMENTUDited State• AttorneyNorthern Di•trict of GeorgiaUNITED STATES DISTRICT COURTNORTHERN DISTRICT OF GEORGIAATLANTA DIVISIONCRIMINAL NO. 1:07-CR-The United States Attorney for the Northern District of Georgia, the EnvironmentalCrimes Section of the Department of Justice (the "Government"), as counsel for the UnitedStates, and Acuity Specialty Products Group, Inc. ("Defendant ASP"), a corporation organizedand existing under the laws of Delaware, hereby enter into the following Negotiated PleaAgreement pursuant to Rule 11 of the Federal Rules of Criminal Procedure ("Fed. R. Crim. P."),and governed by Rule 1 1(c)(l)(C):1) ADMISSION OF GUILTDefendant ASP agrees to waive indictment by a grand jury and to plead guilty to a onecountCRIMINAL INFORMATION charging it under 33 U.S.C. § 1319(c)(2)(A) withknowingly violating the requirements imposed in a pretreatment program approved under theClean Water Act.Defendant ASP is pleading guilty because it is in fact guilty of the crimecharged under 33 U.S.C. § 1319(c)(2)(A) in Count One of the CRIMINAL INFORMATION.

2) WAIVER OF RIGHTS(a)The Government and Defendant ASP agree that if the Court does not accept thePlea Agreement or the recommended sentence in Paragraph 5 below, the Plea Agreement shallbe rendered null and void. If the Court rejects the Plea Agreement or the recommended sentencefollowing a plea of guilty by Defendant ASP, Defendant ASP will be free to withdraw its plea ofguilty. Defendant ASP understands that if the Court accepts the Plea Agreement and imposes therecommended sentence, it will not be able to withdraw its plea of guilty.(b)If this Plea Agreement is rendered null and void or if Defendant ASP withdrawsits plea of guilty, the Plea Agreement, the guilty plea, and any statement made by DefendantASP in the course of proceedings under Fed. R. Crim. P. 11 or in the course of plea discussionswith the Government shall not be admissible against Defendant ASP in any subsequentproceedings.(c)Defendant ASP understands that by pleading guilty, it is giving up the right toplead not guilty and the right to be tried by a jury. At a trial, the defendant has a right to berepresented by an attorney. During the trial, the defendant would be presumed innocent and theGovernment would have the burden of proving it guilty of every essential element of the crimecharged beyond a reasonable doubt. The defendant would have the right to confront and crossexaminethe witnesses against it.If the defendant wished, it could present evidence in itsdefense, and it could subpoena witnesses to testify on its behalf. If, however, the defendant didnot wish to present evidence, that fact could not be used against it. If the defendant were foundguilty after a trial, it would have the right to appeal the conviction. Defendant ASP understandsthat by pleading guilty, it is giving up all of these rights, and there will not be a trial of any kind.Defendant ASP also understands that it ordinarily would have the right to appeal its sentence2

and, under some circumstances, to attack the sentence in post-conviction proceedings.Byentering this Plea Agreement, defendant ASP may be waiving some or all of those rights toappeal or collaterally attack its sentence, as specified below.Finally, Defendant ASPunderstands that, to plead guilty, it may have to, through its duly authorized agent, answerquestions posed by the Court concerning the rights that it is giving up and the facts of this case,and answers, if untruthful, may be used in a prosecution for perjury or false statements.3) MAXIMUM STATUTORY SENTENCEDefendant ASP understands that, based on its plea of guilty to Count One of theInformation, it will be subject to the following statutory maximum penalties:(a)Pursuant to 18 U.S.C. § 3571(c) and (d) and 33 U.S.C. § 1319(c)(2)(A), the courtmay impose a fine up to the greater of: $50,000 per day of violation; $500,000; or the greater oftwo times the gross gain or two times the gross loss;(b)Pursuant to 18 U.S.C. § 3561(c)(l), the Court may impose a term of probation ofat least one year, but not more than five years;(c)Pursuant to 18 U.S.C. § 3563(b)(2) or 3663(a)(3), the Court may order it to payrestitution to any victims of the offense; and(d)Pursuant to 18 U.S.C. § 3013(a)(2)(B), the Court is required to order thedefendant to pay a $400 special assessment upon conviction for the charged crime.Defendant ASP understands that, before imposing sentence in this case, the Court will berequired to consider, among other factors, the provisions of the United States SentencingGuidelines. However, the Government and Defendant ASP have agreed and consented to abinding plea agreement under Fed. R. Crim. P. ll(c)(l)(C) as set forth in Paragraph 5 herein.3

4) LIMITATION OF CHARGESThe United States Attorney for the Northern District of Georgia and the EnvironmentalCrimes Section of the Department of Justice agree not to bring further criminal charges againstDefendant ASP, or any other affiliated or related entity of Defendant ASP, relating to, based onor arising out of any matters that were the subject of the Government's criminal investigation ofDefendant ASP's facility located at 1310 Seaboard Industrial Boulevard, Atlanta, Georgia (the"Seaboard facility") and any matters from the Government's criminal investigation of DefendantASP's Seaboard facility that were known to the Government as of the date of this PleaAgreement. Defendant ASP understands that this provision does not bar prosecution by anyother federal, state, or local jurisdiction.Defendant ASP also understands that this PleaAgreement does not provide or promise any waiver of any civil or administrative actions,sanctions, or penalties that may apply, including but not limited to: fines, penalties, suspension,debarment, listing, licensing, injunctive relief or remedial action to comply with any applicableregulatory requirement.5) SENTENCING RECOMMENDATIONFor the purposes of proffering the relevant conduct to the Court in this case, DefendantASP and the Government have executed a Joint Statement of Facts, attached hereto asAttachment A. Pursuant to Fed. R. Crim. P ll(c)(l)(C), the United States and Defendant ASPagree that the following sentence is an appropriate disposition of this case:a. the payment of a criminal fine of three million eight hundred thousanddollars ($3,800,000.00) by ASP, due 10 days after the date of sentencing;4

. three years of unsupervised probation, the conditions of which will be:(i) Defendant ASP not commit another federal, state, or local crime duringthe term of probation, as provided by 18 U.S.C. § 3563(a)(1), (ii)Defendant ASP pay the criminal fine and special assessment imposed bythe Court, and (iii) pursuant to 18 U.S.C. § 3563(b)(22), the provisions setout in the Compliance Agreement, executed between Defendant ASP andEPA, and attached hereto as Attachment B; andc. the payment of the special assessment of $400 for Count One, asrequued by 18 U.S.C. § 3013(a)(2)(B), due 10 days after the date ofsentencing.The Government is not seeking restitution in this case. The Government and DefendantASP further agree that the terms outlined in this Paragraph represent the full and complete extentof the criminal sanctions to be imposed by the Court on Defendant ASP in this case and pursuantto the terms of this Plea Agreement.If the Court accepts and imposes the aforesaid terms,Defendant ASP may not withdraw this plea.6) WAIVER OF PRE-SENTENCE INVESTIGATIONThe Government and Defendant ASP request, pursuant to Fed. R. Crim. P.32(c)(1)(A)(ii) and U.S.S.G. Section 6A l.l, that the Court waive a pre-sentence investigationand the preparation of a pre-sentence report in the case. The Government and Defendant ASPfurther request that the Court sentence Defendant ASP at the time the plea of guilty is entered.5

7) WAIVER OF APPEALIf the Court accepts this Plea Agreement and imposes the recommended sentence inParagraph 5 above, Defendant ASP knowingly, voluntarily, and expressly waives any right itmay have to appeal its conviction and the sentence imposed upon it and the manner in which thesentence is determined on any ground, including, without limitation, to the grounds set forth inTitle 18, United States Code, Section 3742. Defendant ASP further understands and agrees thatthe word "sentence" appearing throughout this waiver provision is being used broadly andapplies to all aspects of the Court's sentencing authority, including, without limitation, (1)Sentencing Guidelines rulings and detenninations; (2) the imposition of fines, probation, and anyspecific terms and conditions thereof and (3) any orders of restitution. If the Court accepts thisPlea Agreement and imposes the recommended sentence in Paragraph 5 above, Defendant ASPalso knowingly, voluntarily, and expressly waives its right to challenge its conviction andsentence and the manner in which the sentence is detennined, in any collateral review motion,writ, or other procedure, including, without limitation, a motion brought under Title 28, UnitedStates Code, Section 2255.8) CORPORATE AUTHORIZATIONThis Plea Agreement has been submitted to the Board of Directors of Defendant ASP,which has manifested its intention and agreement by corporate resolution, properly executed, toplead the corporation guilty in accord with this agreement and directed its President, WilliamHoll, and its counsel, Paul B. Murphy, Esq., to enter the Plea Agreement for defendant. A copyof this corporate resolution shall be attached hereto as Attachment C and made part of the recordof this case at the time of the entry of the plea of guilty. Defendant ASP affirmatively states that6

it has sufficient assets to pay the fine and special assessment and that it has obtained andreceived the approval of its board of directors to make such payments.Defendant ASP states that its representative has read this agreement and has discussedthe agreement with its attorneys, and understands it.9) CONCLUSIONIf Defendant ASP fails in any way to fulfill each one of its obligations under this PleaAgreement, the Government may elect to be released from its commitments under this PleaAgreement. The Government may then prosecute the defendant for any and all Federal crimesthat its has committed related to this case and may recommend to the Court any sentence forsuch crimes up to and including the maximum sentence.The defendant expressly waives anystatute of limitations defense and any constitutional or statutory speedy trial defense to such aprosecution, except to the extent that such a defense exists as of the date it signs this PleaAgreement.In addition, the defendant agrees that, in such a prosecution, all admissions andother mformation that it has provided at any time, including all statements it has made and allevidence it has produced during proffers, interviews, testimony, and otherwise, may be usedagainst it, regardless of any constitutional provision, statute, rule, or agreement to the contrary.Notwithstanding the foregoing, no information or statements submitted by or made by counselfor defendant during any meeting with or presentation to the government or in anycorrespondence or submission to the government shall be used against the defendant.Finally,the defendant understands that its violation of the terms of this Plea Agreement would not entitleit to withdraw its guilty plea in this case.There are no other agreements, promises, representations, or understandings betweenDefendant ASP and the Government.7

In Open Court thisday of June, 2007.PAUL B. MURPHYAttorney for DefendantWILUAM A. HOLLAcuity Specialty Products Group, Inc.PAUL R. JONESAssistant United States AttorneysRANDY CHART ASHChief, Economic CrimeDANIEL W. DOOHERSenior Trial AttorneyDepartment of JusticeEnvironmental Crimes SectionDATE8

Ii i'CERTIFICATION OF A TIORNEY AND DEFENDANTI have read the Criminal Information against ASP and have discussed it with the attorneyfor ASP.I understand the charge and the elements of the charge that the Government wouldhave to prove to convict ASP at a trial.I have read the foregoing Plea Agreement and havecarefully reviewed every part of it with the attorney for ASP.I understand the terms andconditions contained in the Plea Agreement, and as a representative for ASP, I voluntarily agreeto them as they bind ASP. I also have discussed with ASP's attorney the rights ASP may have toappeal or challenge the sentence, and I understand that the appeal waiver contained in the PleaAgreement will prevent ASP, with the narrow exceptions stated, from appealing the sentence orchallenging the sentence in any post-conviction proceeding. No one has threatened or forced meto enter a plea guilty on behalf of ASP, and no promises or inducements have been made to meother than those discussed in the Plea Agreement. The discussions between ASP's attorney andthe Government toward reaching a negotiated plea in this case took place with ASP'spermission. I am fully satisfied with the representation provided to ASP by its attorney in thiscase.Authorized Representative forAcuity Specialty Products Group, Inc.DATEI am ASP's lawyer. I have carefully reviewed the charge and the Plea Agreement withmy client. To my knowledge, my client is making an informed and voluntary decision to pleadguilty and to enter into the Plea Agreement.SIGNATURE (Defense Attorney)DATE9

Ii iINFORMATION BELOW MUST BE TYPED OR PRINTEDNAME (Attorney for Defendant)NAME (Defendant)STREETSTREETCITY & STATE ZIP CODE CITY &STATE ZIP CODEPHONE NUMBER __ __________ __PHONE NUMBER __ ___ ______STATE BAR OF GEORGIA NUMBER ___Filed in Open CourtBy: __________ ____ _ 10