<PAGE>1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
SMITH ENVIRONMENTAL TECHNOLOGIES CORPORATION
(formerly known as Canonie Environmental Services Corp.)
________________________________________________________________________
(Name of Issuer)
Common Stock, par value $0.01 per share
________________________________________________________________________
(Title of Class of Securities)
832055 10 7
________________________________________
(CUSIP Number)
Richard M. Cashin, Jr. Philip H. Werner, Esq.
399 Venture Partners, Inc. Morgan, Lewis & Bockius
399 Park Avenue, 14th Floor 101 Park Avenue
New York, New York 10043 New York, New York 10178
(212) 559-1127 (212) 309-6000
________________________________________________________________________
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
June 9, 1995
________________________________________________________________________
(Date of Event which Requires Filing of this Statement on Schedule 13D)
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 schedule because of Rule 13d-1(b)(3) or (4), check the
following box / /.
Check the following box if a fee is being paid with the statement. / /
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five
percent of the class of securities described in Item 1; and (2) has
filed no amendment subsequent thereto reporting beneficial ownership of
five percent or less of such class.) (See Rule 13d-7.)
Note: Six copies of this statement on Schedule 13D, including all
exhibits, should be filed with the Securities and Exchange Commission.
See Rule 13d-1(a) for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class
of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
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SCHEDULE 13D
CUSIP No. 832055 10 7
_____________________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
399 Venture Partners, Inc.
_________________________________________________________________________
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 (e) / /
__________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
__________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 3,342,987 **and*** shares of Common Stock
SHARES __________________________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
0***
OWNED BY __________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
3,342,987 shares of Common Stock **and***
REPORTING __________________________________________________________
PERSON WITH 10 SHARED DISPOSITIVE POWER
0
__________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,342,987 shares of Common Stock **and***
_________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* /x/
***
_________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
36.5% **and***
_________________________________________________________________________
14 TYPE OF REPORTING PERSON*
CO
_________________________________________________________________________
<PAGE>
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* SEE INSTRUCTIONS BEFORE FILLING OUT!
** Assumes 5,811,105 shares of Common Stock outstanding as reported to
399 Venture Partners, Inc. by Smith Environmental Technologies
Corporation (formerly known as Canonie Environmental Services Corp.)
on May 19, 1995.
*** Does not include the 2,653,720 shares (45.7%) of Common Stock
beneficially owned by E. Brian Smith and Smith Holding
Corporation (formerly known as Smith Environmental
Technologies Corporation), which shares are to be voted in
favor of approving the terms of certain notes issued to 399
Venture Partners, Inc. and with respect to which shares of
Common Stock 399 Venture Partners, Inc. has been granted a
proxy and a "bring-along" right to participate in certain
sales of shares, in each case, as described herein. Does not
include the 371,493 shares of Common Stock owned by certain
employees (and affiliates of such employees) of 399 Venture
Partners, Inc., which shares may be subject to repurchase by
399 Venture Partners, Inc. upon termination of employment.
Does not include the 140,667 options to acquire shares of
Common Stock within 60 days which are attributable to Richard
M. Cashin, Jr., an officer of 399 Venture Partners, Inc. and a
director of the Company.
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SCHEDULE 13D
CUSIP No. 832055 10 7
___________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Citibank, N.A.
________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /x/
________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________
4 SOURCE OF FUNDS*
Not Applicable
________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or (e) / /
________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 3,342,987 shares of Common Stock **and***
__________________________________________________________
SHARES
8 SHARED VOTING POWER
BENEFICIALLY 0***
__________________________________________________________
OWNED BY 9 SOLE DISPOSITIVE POWER
3,342,987 shares of Common Stock **and***
EACH __________________________________________________________
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH 0
__________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,342,987 shares of Common Stock **and***
_________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* /x/
***
_________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
36.5%**and***
_________________________________________________________________________
14 TYPE OF REPORTING PERSON*
BK
_________________________________________________________________________
<PAGE>
<PAGE>5
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** Assumes 5,811,105 shares of Common Stock outstanding as reported to
399 Venture Partners, Inc. by Smith Environmental Technologies
Corporation (formerly known as Canonie Environmental Services Corp.)
on May 19, 1995.
*** Does not include the 2,653,720 shares (45.7%) of Common Stock
beneficially owned by E. Brian Smith and Smith Holding
Corporation (formerly known as Smith Environmental
Technologies Corporation), which shares are to be voted in
favor of approving the terms of certain notes issued to 399
Venture Partners, Inc. and with respect to which shares of
Common Stock 399 Venture Partners, Inc. has been granted a
proxy and a "bring-along" right to participate in certain
sales of shares, in each case, as described herein. Does not
include the 371,493 shares of Common Stock owned by certain
employees (and affiliates of such employees) of 399 Venture
Partners, Inc., which shares may be subject to repurchase by
399 Venture Partners, Inc. upon termination of employment.
Does not include the 140,667 options to acquire shares of
Common Stock within 60 days which are attributable to Richard
M. Cashin, Jr., an officer of 399 Venture Partners, Inc. and a
director of the Company.
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SCHEDULE 13D
CUSIP No. 832055 10 7
___________
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Citicorp
________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /x/
________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________
4 SOURCE OF FUNDS*
Not Applicable
________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or (e) / /
________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 3,342,987 shares of Common Stock **and***
__________________________________________________________
SHARES
8 SHARED VOTING POWER
BENEFICIALLY 0***
__________________________________________________________
OWNED BY
9 SOLE DISPOSITIVE POWER
EACH 3,342,987 shares of Common Stock **and***
__________________________________________________________
REPORTING
10 SHARED DISPOSITIVE POWER
PERSON WITH 0
__________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,342,987 shares of Common Stock **and***
_________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* /x/
***
_________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
36.5% **and***
_________________________________________________________________________
14 TYPE OF REPORTING PERSON*
CO and HC
_________________________________________________________________________
<PAGE>
<PAGE>7
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** Assumes 5,811,105 shares of Common Stock outstanding as reported to
399 Venture Partners, Inc. by Smith Environmental Technologies
Corporation (formerly known as Canonie Environmental Services Corp.)
on May 19, 1995.
*** Does not include the 2,653,720 shares (45.7%) of Common Stock
beneficially owned by E. Brian Smith and Smith Holding
Corporation (formerly known as Smith Environmental
Technologies Corporation), which shares are to be voted in
favor of approving the terms of certain notes issued to 399
Venture Partners, Inc. and with respect to which shares of
Common Stock 399 Venture Partners, Inc. has been granted a
proxy and a "bring-along" right to participate in certain
sales of shares, in each case, as described herein. Does not
include the 371,493 shares of Common Stock owned by certain
employees (and affiliates of such employees) of 399 Venture
Partners, Inc., which shares may be subject to repurchase by
399 Venture Partners, Inc. upon termination of employment.
Does not include the 140,667 options to acquire shares of
Common Stock within 60 days which are attributable to Richard
M. Cashin, Jr., an officer of 399 Venture Partners, Inc. and a
director of the Company.
<PAGE>
<PAGE>8
This Amendment No. 2 amends and restates the Amendment No. 1
to the Statement on Schedule 13D filed on December 5, 1994 and the
Statement on Schedule 13D filed on November 22, 1994 (the "Schedule
13D") by (i) 399 Venture Partners, Inc., a Delaware corporation ("399"),
by virtue of its direct beneficial ownership of the Common Stock, par
value $0.01 per share ("Common Stock"), of Smith Environmental
Technologies Corporation, a Delaware corporation (formerly known as
Canonie Environmental Services Corp.) (the "Company"), (ii) Citibank,
N.A., a national banking association ("Citibank"), by virtue of its
ownership of all of the outstanding common stock of 399 and (iii)
Citicorp, a Delaware corporation ("Citicorp"), by virtue of its
ownership of all of the outstanding common stock of Citibank.
The responses in each of Items 3, 4, 5 and 6 are incorporated
by reference into each of the other such Items, and should be read
together.
Item 1. Security and Issuer.
_______ ___________________
Item 1 is hereby amended and restated as follows:
This Statement on Schedule 13D relates to the Common Stock of
the Company.
The principal executive offices of the Company are located at
Galleria Tower II, 13455 Noel Road, Suite 1500, Dallas, Texas 75240.
Item 2. Identity and Background.
_______ _______________________
Item 2 is hereby amended and restated as follows:
(a) This Statement on Schedule 13D is being filed by each of
the following persons pursuant to Rule 13d-(1)(f) promulgated by the
Securities and Exchange Commission (the "Commission") pursuant to
Section 13 of the Securities Exchange Act of 1934, as amended (the
"Act"): (i) 399, (ii) Citibank and (iii) Citicorp (collectively, the
"Reporting Persons").
Attached as Schedule A is information concerning each
executive officer and director of each of the Reporting Persons; each
person controlling each of the Reporting Persons; and each executive
officer and director of any corporation or other person ultimately in
control of each of the Reporting Persons. Schedule A is incorporated
into and made a part of this Statement on Schedule 13D.
(b) The address of the principal business and principal
office of each of the Reporting Persons is 399 Park Avenue, New York,
New York 10043.
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<PAGE>9
(c) 399's principal business is providing debt and equity
financing to businesses in the United States. Citibank is engaged in
the business of banking. Citicorp is a bank holding company principally
engaged through its subsidiaries in the financial services business.
(d) During the last five years, none of 399, Citibank,
Citicorp, nor any of their respective executive officers, directors or
controlling persons 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, except as follows. In 1992, Citibank
consented to orders issued by the Commission and Comptroller of the
Currency, without admitting or denying allegations and findings, with
respect to the proper safeguarding and restriction of cancelled
securities certificates. The orders, and related facts and
circumstances, were described in Current Reports on Form 8-K, dated July
21, 1992, and January 19, 1993, that Citicorp previously filed with the
Commission.
(e) All persons named in Schedule A to this Statement on
Schedule 13D are citizens of the United States except that: Colin Crook
is a citizen of the United Kingdom, Alvaro A.C. de Souza is a citizen of
Portugal, H. Onno Ruding is a citizen of the Netherlands, Shaukat Aziz
is a citizen of Pakistan, Ernst W. Brutsche and Guenther E. Greiner are
citizens of Germany, Dionisio R. Martin and Hubertus M. Rukavina are
citizens of Argentina, Mario H. Simonsen is a citizen of Brazil, Victor
J. Menezes and Gurvirendra S. Talwar are citizens of India and Masamoto
Yashiro is a citizen of Japan.
Item 3. Source and Amount of Funds or Other Consideration.
_______ _________________________________________________
Item 3 is hereby amended and restated as follows:
On November 21, 1994, the Company issued to 399 $10,000,000 in
aggregate principal amount of the Company's Convertible Senior
Subordinated Notes Due 2004 (the "Senior Subordinated Notes") and
$2,000,000 in aggregate principal amount of the Company's Convertible
Senior Notes Due 2004 (the "Senior Notes," and collectively with the
Senior Subordinated Notes, the "Notes") pursuant to an Amended and
Restated Note Purchase Agreement, dated as of November 21, 1994 (the
"Note Purchase Agreement"). The source of funds to purchase the Notes
was internal working capital.
<PAGE>
<PAGE>10
Item 4. Purpose of Transaction.
_______ ______________________
Item 4 is hereby amended and restated as follows:
The Company entered into a Stock Purchase Agreement, dated as
of August 1, 1994, as amended by the First Amendment dated as of August
30, 1994, and the Second Amendment dated as of November 15, 1994,
providing for the purchase by the Company of all of the capital stock of
Riedel Environmental Services, Inc., an Oregon corporation ("RES") and a
wholly-owned subsidiary of Riedel Environmental Technologies, Inc., an
Oregon corporation ("RET") (the "Riedel Transaction"). The proceeds of
the Notes purchased by 399 pursuant to the terms of the Note Purchase
Agreement were used by the Company to consummate the Riedel Transaction.
The Note Purchase Agreement requires the Company to, among
other things, maintain its corporate existence and franchises; provide
399 with certain observer rights on the Company's Board of Directors;
and comply with certain covenants with respect to limitations on
indebtedness, affiliate transactions, restricted payments, liens,
mergers and sales of assets, dividend payments and amendments to its
organizational documents. The Notes are subject to acceleration upon
certain Events of Default (as defined), including, but not limited to, a
Change of Control of the Company (as defined). The Senior Subordinated
Notes mature on the tenth anniversary of their date of issuance but are
prepayable, in whole or in part, at any time at the option of the
Company, subject to certain prepayment premiums. Interest on the Senior
Subordinated Notes accrues at a rate of 10% per annum and is payable
semi-annually, subject to the Company's right to defer a minimum of
$25,000 of the interest payable on the first two interest payment dates
for a specified period of time. The Senior Subordinated Notes are
subordinated in right of payment to Senior Indebtedness (as defined).
The Senior Notes mature on the tenth anniversary of their date of
issuance but are prepayable, in whole or in part, at any time at the
option of the Company, subject to certain prepayment premiums if they
are repaid after October 21, 1995. Interest on the Senior Notes accrues
at the higher of 10% or a Base Rate (as defined) plus 1-3/4% per annum,
and is payable semi-annually. In no event shall any interest payable
under the Senior Notes exceed (i) any applicable usury law or (ii) the
maximum rate permitted under the Small Business Act of 1953, as amended,
the Small Business Investment Act of 1958, as amended, and the rules and
regulations of the Small Business Administration promulgated thereunder
(13 CFR 107 et. seq.; and 13 CFR 121 et. seq.) or any similar laws,
rules or regulations. The Senior Subordinated Notes are convertible at
any time into Junior Convertible Preferred Stock (the "Preferred
Stock"), par value $0.01 per share. The Senior Notes are convertible
into Preferred Stock at any time after October 21, 1995. The Notes are
convertible into Preferred Stock at the rate of 30.4878 shares of
Preferred Stock for each $1,000 in principal amount of Notes, subject to
certain antidilution adjustments. The Preferred Stock is convertible
into Common Stock at the rate of 10 shares of Common Stock for each
share of Preferred Stock, subject to certain antidilution adjustments.
The Preferred Stock is entitled to participate with the Common Stock, on
an as if converted basis, with respect to dividends, voting and upon
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<PAGE>11
liquidation, dissolution and winding up; provided, however, that, except
as required by law and as to matters which the Preferred Stock is
entitled to vote separately as a class, the total voting power of the
Preferred Stock will not represent more than 19.9% of the total voting
power of the then-outstanding Common Stock and Preferred Stock, taken
together.
Pursuant to Section 11.2 of the Note Purchase Agreement, the
Company agreed to use its best efforts to obtain the Nasdaq Waiver (as
described in the Note Purchase Agreement) or stockholder approval
necessary to approve the terms of the Notes within 90 days following the
closing of the acquisition of the Notes (the "Closing"). During such
90-day period, if such Nasdaq Waiver or approval is not obtained, 399
has agreed not to exercise any of its conversion rights under the Notes.
In addition, if during the 90-day period neither the Nasdaq Waiver nor
stockholder approval is obtained, 399 has agreed to negotiate with the
Company in good faith for a period of not more than 120 days to amend
the Notes to comply with the requirements of Nasdaq and structure an
additional investment arrangement which would provide 399 with the full
economic and investment equivalent of the Notes and the Preferred Stock
contemplated thereby (the "New Terms"). However, if 399 and the Company
fail to agree to the New Terms within such 120-day period, 399 may
convert the Notes into Preferred Stock, which is then convertible into
Common Stock, which could subject the Company's Common Stock to
delisting from the Nasdaq National Market. There is a meeting of
stockholders scheduled for this summer to ratify the issuance of the
Senior Subordinated Notes and the Senior Notes.
Except as described in this Statement on Schedule 13D, 399
acquired the Notes for investment purposes. Depending on market
conditions and other factors (including evaluation of the Company's
businesses and prospects, availability of funds, alternative uses of
funds and general economic conditions), 399 may from time to time
purchase additional securities of the Company or dispose of all or a
portion of its investment in the Company, including, but not limited to,
certain officers, employees or affiliates of 399.
In the event that all or any portion of the principal amount
of the Senior Subordinated Notes is repaid on any date prior to the
later of (i) the second anniversary of the date of issuance of the
Senior Subordinated Notes or (ii) the date following a period of 90
consecutive days during which period the Common Stock has traded on the
Nasdaq National Market in unsolicited brokers transactions on each
trading day of such 90-day period at a price per share of at least
$7.00, subject to appropriate adjustments, then 399 or its assignees has
the right to purchase from the Company up to the number of shares of
Preferred Stock which would have been issuable upon conversion of the
principal amount of the Senior Subordinated Notes so prepaid.
In the event that all or any portion of the principal amount
of the Senior Notes is repaid on any date after October 21, 1995 and
prior to the later of (i) the second anniversary of the date of issuance
of the Senior Notes or (ii) the date following a period of 90
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consecutive days during which period the Common Stock has traded on the
Nasdaq National Market in unsolicited brokers transactions on each
trading day of such 90-day period at a price per share of at least
$7.00, subject to appropriate adjustments, then 399 or its assignees has
the right thereafter to purchase from the Company up to the number of
shares of Preferred Stock which would have been issuable upon conversion
of the principal amount of the Senior Notes so prepaid.
As a condition to the Closing, E. Brian Smith ("Smith") and
Smith Holding Corporation, a Delaware corporation (formerly known as
Smith Environmental Technologies Corporation) ("SET"), entered into a
Stockholders Agreement with 399 (the "Stockholders Agreement"), which
Stockholders Agreement, among other things, (a) requires that Smith and
SET vote all of their shares of Common Stock in favor of all matters
presented by management of the Company at the stockholders meeting
(currently scheduled for June 20, 1995) to approve the terms of the
Notes and the Preferred Stock (the "Stockholders Meeting") and grants to
399 an irrevocable proxy coupled with an interest to vote all shares of
Common Stock owned by Smith and SET solely for the matters presented at
the Stockholders Meeting and (b) provides that if Smith, SET or any of
their permitted transferees (a "Transferor") proposes to transfer any
shares of Common Stock other than (i) to a permitted transferee, (ii) to
fund a Grace Obligation (as described therein), (iii) not more than
100,000 shares per year in accordance with Rule 144 or (iv) in a
publicly registered sale, the Transferor shall cause the buyer to
include an offer to 399 (and any successor or assign thereof) to sell to
the buyer a pro rata number of shares of Common Stock, determined as
provided therein.
The Reporting Persons disclaim beneficial ownership of the
shares of Common Stock beneficially owned by SET and Smith, except to
the extent that the Reporting Persons are deemed to have beneficial
ownership pursuant to the Stockholders Agreement.
The Company and SET entered into a Registration Rights
Agreement with 399 (the "Registration Rights Agreement"), which
Registration Rights Agreement provides 399 and SET with certain
registration rights with respect to their respective shares of Common
Stock, including demand registration rights and piggyback registration
rights as described therein.
On December 5, 1994, 399 sold to certain of its employees (and
affiliates of such employees) $200,000 in aggregate principal amount of
the Senior Notes and $1,000,000 in aggregate principal amount of the
Senior Subordinated Notes, representing, in each case, 10% of the
respective outstanding principal amounts thereof (the "December Sale"),
pursuant to a Purchase Agreement (the "Purchase Agreement"). Subject to
certain conditions, 399 may repurchase securities sold to such employees
(and affiliates of such employees) in the December Sale upon termination
of such employee's employment.
Richard M. Cashin, Jr., an officer of 399, became a director
of the Company following the acquisition of the Notes by 399. In
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<PAGE>13
addition, 140,667 options to acquire shares of Common Stock within 60
days are attributable to Mr. Cashin.
399 entered into a Securities Purchase Agreement ("Securities
Purchase Agreement"), dated as of June 9, 1995, with CCT Partners I,
L.P., a Delaware limited partnership (the "Partnership"), the general
partner of which is an affiliate or an officer of 399. The Securities
Purchase Agreement provides for the sale to the Partnership of $227,718
in aggregate principal amount of the Senior Notes and $1,138,590 in
aggregate principal amount of the Senior Subordinated Notes,
representing, in each case, 12.65% of the respective outstanding
principal amounts thereof. Pursuant to the Supplemental Agreement,
dated as of June 9, 1995, between the Partnership and 399 (the
"Supplemental Agreement"), subject to certain conditions, the
Partnership has assigned 399 (i) any voting rights it has with respect
to the Notes (including any voting rights with respect to Preferred
Stock and Common Stock acquired upon conversion of the Notes); (ii) any
management rights it may enjoy, including the right to nominate or
appoint directors or exercise any other rights with respect to the
business operations of the Company; (iii) the right to direct the sale
or other disposition of the Notes; and (iv) any other rights, other than
rights to dividends or interest on the Notes or the right to receive
cash or securities in exchange for the Notes in connection with any
sale, transfer, conversion or redemption thereof. The limited partners
of the Partnership are investment professionals employed by 399.
Accordingly, the Notes and securities into which the Notes may be
converted continue to be beneficially owned by the Reporting Persons.
The foregoing summaries of certain provisions of the Note
Purchase Agreement, the Notes, the terms of the Preferred Stock, the
Stockholders Agreement, the Registration Rights Agreement, the Purchase
Agreement, Securities Purchase Agreement and the Supplemental Agreement
are qualified in their entirety by the complete text of the Exhibits
hereto which are incorporated by this reference.
Except as described in this Statement on Schedule 13D, none of
the Reporting Persons nor, to the best of their knowledge, any of the
persons named in Schedule A to this Statement on Schedule 13D, has
formulated any plans or proposals which relate to or would result in:
(a) the acquisition by any person of additional securities of the
Company, or the disposition of securities of the Company; (b) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Company or any of its subsidiaries; (c) a
sale or transfer of a material amount of assets of the Company or any of
its subsidiaries; (d) any change in the present Board of Directors or
management of the Company, including any plans or proposals to change
the number or term of directors or to fill any existing vacancies on the
Board; (e) any material change in the present capitalization or dividend
policy of the Company; (f) any other material change in the Company's
business or corporate structure; (g) any changes in the Company's
charter or by-laws or other actions which may impede the acquisition or
control of the Company by any person; (h) causing a class of securities
of the Company to be delisted from a national securities exchange or
<PAGE>
<PAGE>14
cease to be authorized to be quoted in an interdealer quotation system
of a registered national securities association; (i) causing a class of
equity securities of the Company to become eligible for termination of
registration pursuant to Section 12(g)(4) of the Act; or (j) any action
similar to those enumerated above.
Item 5. Interest in Securities of the Issuer.
_______ ____________________________________
Item 5 is hereby amended and restated as follows:
(a) The aggregate number of shares of Common Stock
beneficially owned by the Reporting Persons as of June 9, 1995 is
3,342,987 shares, or approximately 36.5% of the class of securities
identified in Item 1, in each case, not including (i) the 2,653,720
shares of Common Stock beneficially owned by SET and Smith, (ii) the
371,443 shares of Common Stock beneficially owned by certain employees
(and affiliates of such employees) of 399 by reason of the December
Sale, and (iii) the 140,667 options to acquire shares of Common Stock
within 60 days which are attributable to Richard M. Cashin, Jr., an
officer of 399 and a director of the Company. The percentage of the
outstanding class stated in the preceding sentence is based upon
5,811,105 shares of Common Stock outstanding as of May 19, 1995 as
reported to 399 by the Company.
(b) The responses of 399, Citibank and Citicorp to Items (7)
through (11) of the portions of pages 2, 3 and 4 of this Statement on
Schedule 13D which relate to shares of Common Stock beneficially owned
are incorporated herein by reference.
(c) Except as otherwise disclosed in this Statement on
Schedule 13D, neither the Reporting Persons nor, to the best knowledge
of the Reporting Persons, any of the persons named in Schedule A to this
Statement on Schedule 13D, has effected a transaction in shares of
Common Stock during the past 60 days.
(d) Except as set forth in Items 3, 4 and 5 of this Statement
on Schedule 13D, no persons other than the Reporting Persons have the
right to receive or the power to direct the receipt of dividends from,
or the proceeds from the sale of, the Common Stock beneficially owned by
the Reporting Persons.
(e) Not applicable.
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<PAGE>15
Item 6. Contracts, Arrangements, Understandings or Relationships
With Respect to the Securities of the Issuer.
_______ ________________________________________________________
Item 6 is amended and restated as follows:
Except as set forth in Items 3 and 4 of this Statement on
Schedule 13D, to the best knowledge of the Reporting Persons, no
contracts, arrangements, understandings or relationships (legal or
otherwise) exist among the persons named in Item 2 or between such
persons and any other person with respect to any securities of the
Company, including but not limited to transfer or voting of any such
securities, finder's fees, joint ventures, loan or option arrangements,
puts or calls, guarantees of profits, divisions of profits or loss, or
the giving or withholding of proxies.
Item 7. Material Filed as Exhibits.
_______ __________________________
Exhibit A -- Amended and Restated Note Purchase
Agreement, dated as of November 15, 1994, by
and between Smith Environmental Technologies
Corporation (formerly known as Canonie
Environmental Services Corp.) and 399
Venture Partners, Inc. /without exhibits/.*
Exhibit B -- Form of Convertible Senior Subordinated Note
Due 2004.*
Exhibit C -- Form of Convertible Senior Note Due 2004.*
Exhibit D -- Form of Certificate of Designation for the
Junior Convertible Preferred Stock.*
Exhibit E -- Form of Stockholders Agreement, by and among
E. Brian Smith, Smith Holding Corporation
(formerly known as Smith Environmental
Technologies Corporation) and 399 Venture
Partners, Inc.*
Exhibit F -- Form of Registration Rights Agreement, by
and among Smith Environmental Technologies
Corporation (formerly known as Canonie
Environmental Services Corp.), Smith Holding
Corporation (formerly known as Smith
Environmental Technologies Corporation) and
399 Venture Partners, Inc.*
Exhibit G -- Form of Subsidiary Guaranty.*
Exhibit H -- Form of Purchase Agreement.*
Exhibit I -- Form of Securities Purchase Agreement.
<PAGE>
<PAGE>16
Exhibit J -- Form of Supplemental Agreement
* Previously Filed
<PAGE>
<PAGE>17
SIGNATURE
After reasonable inquiry and to the best of the knowledge and
belief of each of the undersigned, each of the undersigned certifies
that the information set forth in this statement on Schedule 13D with
respect to the undersigned is true, complete and correct and each of the
undersigned agrees that this statement on Schedule 13D may be filed
jointly.
Dated: June 9, 1995
399 VENTURE PARTNERS, INC.
By: /s/ Richard M. Cashin, Jr.
______________________________________
Name: Richard M. Cashin, Jr.
Title: Managing Director
CITIBANK, N.A.
By: /s/ John F. Rice
______________________________________
Name: John F. Rice
Title: Vice President
CITICORP
By: /s/ Martin A. Waters
______________________________________
Name: Martin A. Waters
Title: Vice President
<PAGE>
<PAGE>18
Schedule A
__________
399 VENTURE PARTNERS, INC.
DIRECTORS
_________
William T. Comfort
Michael J. Horgan
Thomas E. Jones
Frederick A. Roesch
OFFICERS TITLE
________ _____
William T. Comfort Chairman
David F. Thomas President
Byron L. Knief Senior Vice President
Stuart L. Agranoff Vice President and Chief Financial Officer
Richard M. Cashin Vice President
Michael A. Delaney Vice President
Peter G. Gerry Vice President
Carlton Klein Vice President
James L. Luikart Vice President
Richard E. Mayberry Vice President
Thomas F. McWilliams Vice President
Olivia Murray Vice President
M. Saleem Muqaddam Vice President
Kilin To Vice President
James A. Urry Vice President
All of the above officers are appointed to their respective offices
subject to any necessary approval by the Small Business Administration.
<PAGE>
<PAGE>19
Schedule A
__________
CITIBANK, N.A. AND CITICORP
DIRECTORS TITLE
_________ _____
D. Wayne Calloway+* Chairman and Chief Executive Officer
PepsiCo, Inc.
Colby H. Chandler+ Former Chairman and Chief Executive Officer
Eastman Kodak Company
Pei-Yuan Chia+* Vice Chairman
Citicorp and Citibank, N.A.
Paul J. Collins+* Vice Chairman
Citicorp and Citibank, N.A.
Kenneth T. Derr+ Chairman and Chief Executive Officer
Chevron Corporation
H.J. Haynes+* Senior Counselor
Bechtel Group, Inc.
John S. Reed+* Chairman
Citicorp and Citibank, N.A.
William R. Rhodes+* Vice Chairman
Citicorp and Citibank, N.A.
Rozanne L. Ridgway+* Co-Chair
The Atlantic Council of the United States
H. Onno Ruding+ Vice Chairman
Citicorp and Citibank, N.A.
Robert B. Shapiro+ President
Monsanto Companies
Frank A. Shrontz+* Chairman and Chief Executive Officer
The Boeing Company
Mario H. Simonsen+ Vice Chairman
Brazilian Institute of Economics
The Getulio Vargas Foundation
Roger B. Smith+ Former Chairman and
Chief Executive Officer
General Motors Corporation
Christopher J. Steffen+* Senior Executive, Vice President
Citicorp and Citibank, N.A.
Franklin A. Thomas+* President
The Ford Foundation
Edgar S. Woolard, Jr.+ Chairman and Chief Executive Officer
E.I. du Pont de Nemours and Company
+ Director of Citicorp.
* Director of Citibank, N.A.
<PAGE>
<PAGE>20
Schedule A
__________
CITIBANK, N.A. AND CITICORP
OFFICERS TITLE
________ _____
Roberta J. Arena Executive Vice President
Shaukat Aziz Executive Vice President
James L. Bailey Executive Vice President
Ernst W. Brutsche Executive Vice President
David J. Browning Executive Vice President
Pei-Yuan Chia Vice Chairman
Paul J. Collins Vice Chairman
Colin Crook Senior Technology Officer
Alvaro A.C. de Souza Executive Vice President
David E. Gibson Executive Vice President
Dennis O. Green Chief Auditor
Guenther E. Greiner Executive Vice President
Thomas E. Jones Executive Vice President, Principal Financial
Officer
Charles E. Long Executive Vice President and Secretary
Alan S. MacDonald Executive Vice President
Dionisio R. Martin Executive Vice President
Robert H. Martinsen Chairman, Credit Policy Committee
Robert A. McCormack Executive Vice President
Victor J. Menezes Executive Vice President
Lawrence R. Phillips Senior Human Resources Officer
John S. Reed Chairman
William R. Rhodes Vice Chairman
John J. Roche Executive Vice President
H. Onno Ruding Vice Chairman
Hubertus M. Rukavina Executive Vice President
Christopher J. Steffen Senior Executive Vice President
Gurvirendra S. Talwar Executive Vice President
David S. Van Pelt Executive Vice President
Alan J. Weber Executive Vice President
Masamoto Yashiro Executive Vice President
<PAGE>
<PAGE>21
Exhibit I
_________
SECURITIES PURCHASE AGREEMENT
_____________________________
AGREEMENT (this "Agreement") made as of this 9th day of June, 1995 by
and between 399 Venture Partners, Inc., a Delaware corporation, with its
principal offices at 399 Park Avenue, New York, New York and CCT
Partners I, L.P., (the "Partnership") a Delaware limited partnership,
with its principal offices at 399 Park Avenue, New York, New York.
WHEREAS, 399 is the beneficial owner of certain securities;
and
WHEREAS, based on the representations, warranties and
covenants herein contained, the Partnership wishes to purchase and CVC
desires to sell the said securities.
NOW, THEREFORE, in consideration of the mutual promises
hereinafter contained, the parties hereby agree as follows:
1. Purchase and Sale of the Securities
___________________________________
1.1 Subject to the terms and conditions hereof, the Partnership
hereby purchases for good and valuable consideration (the "Purchase
Price") from 399, and 399 hereby sells and assigns to the Partnership,
the securities listed on Schedule A attached hereto (the "Securities").
1.2 399 herewith delivers the Securities to the Partnership and
acknowledges receipt of the Purchase Price in accordance with the terms
of the General Agreement, dated as of April 28, 1995, among Citicorp
Venture Capital, Ltd., the Partnership, Citibank, N.A. and CCT I
Corporation.
2. Representations and Warranties by 399
_____________________________________
399 represents and warrants to the Partnership as follows:
(a) 399 is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with all necessary
power and authority to enter into and perform its obligations under this
Agreement;
(b) This Agreement has been duly and validly authorized, executed
and delivered by 399 and is binding on and enforceable against 399 in
accordance with its terms;
(c) 399 is the sole and exclusive beneficial owner of all rights,
title and interest in and to the Securities, free and clear of all
claims, encumbrances of any nature whatsoever; and
<PAGE>
<PAGE>22
(d) Upon the reissuance of the Securities in the name of the
Partnership and delivery of the Securities to the Partnership as
provided for herein, good title to the Securities, free and clear of all
security interests, liens, claims, charges, options and encumbrances of
every kind and nature whatsoever will pass to the Partnership, and 399
will execute and deliver to the Partnership such documents and take such
further action as may be reasonably requested by the Partnership in
order to transfer ownership of and title to the Securities to the
Partnership.
3. Representations and Warranties by the Partnership
_________________________________________________
The Partnership represents and warrants to 399 as follows:
(a) The Partnership is a limited partnership formed under the laws
of the State of Delaware, with all necessary power and authority to
enter into and perform its obligations under this Agreement;
(b) This Agreement has been duly and validly authorized, executed
and delivered by the Partnership and is binding on and enforceable
against the Partnership in accordance with its terms; and
(c) The Partnership is acquiring the Securities for investment
purpose and not for or with a view to or for resale in connection with
any distribution thereof within the meaning of the Securities Act of
1933, as amended.
4. Survival of Representations
___________________________
The parties hereto each agree that all representations, warranties,
covenants and agreements contained herein shall survive the execution
and delivery of the Agreement and any investigation or audit made by any
party hereto.
5. General
_______
This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof. It may not be altered,
amended or supplemented except by an agreement in writing signed by both
parties. It shall be governed by and construed in accordance with the
laws of the State of New York. It shall be binding upon the parties and
their respective successors and assigns. This Agreement may be executed
in counterparts, each of which shall be deemed an original and both of
which shall constitute one and the same instrument.
<PAGE>
<PAGE>23
399 VENTURE PARTNERS, INC.
By:____________________________________
Name: William T. Comfort
Title: Chairman
CCT PARTNERS I, L.P.
By: CCT I CORPORATION,
its general partner
By:____________________________________
Name: William T.Comfort
Title: President and Chairman
<PAGE>
<PAGE>24
SCHEDULE A
__________
Smith Environmental Technologies Corporation
(formerly known as Canonie Environmental Services Corp.)
Securities Description
______________________
Convertible Senior Subordinated Note in the amount of $1,138,590.00
Convertible Senior Note in the amount of $227,718.00
<PAGE>
<PAGE>25
Exhibit J
_________
SUPPLEMENTAL AGREEMENT
Supplemental Agreement (this "Agreement"), dated as of June 9,
1995, between CCT Partners I, L.P., a Delaware limited partnership (the
"Partnership"), and 399 Venture Partners, Inc., a Delaware corporation
("399").
W I T N E S S E T H:
WHEREAS, the Partnership has purchased as of the date hereof a
portion (the "Partnership Investment") of a venture capital investment
made by 399 (the "399 Investment") in Smith Environmental Technologies
Corporation, formerly Canonie Environmental Services Corp. ("Smith")
comprised of convertible debt instruments (such convertible debt
instruments, any security into which they are directly or indirectly
converted and any Smith security acquired by 399 in the future, the
"Securities"); and
WHEREAS, the parties now desire to set forth herein their
understanding and agreement with respect to certain matters related to
the powers of voting and disposition of
the Securities;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable
consideration the parties hereto hereby agree as follows:
1. At the written request of 399 or as required by the terms
of the underlying business transaction, the Partnership agrees to enter
into any applicable stockholder, stock purchase, voting, transfer or
other agreement that 399 agrees to enter, or has entered, at any time
covering the Securities and to which Smith or some or all of the other
holders of Securities are parties (an "Investment Agreement").
2. At the written request of 399, subject to any applicable
security interest granted by the Partnership in the Securities
constituting the Partnership Investment, the Partnership agrees to
assign to 399 (i) any voting rights it has with respect to the
Securities constituting the Partnership Investment; (ii) any management
rights it may enjoy by virtue of being a party to an Investment
Agreement, including any right, alone or in conjunction with 399 or one
or more of the other parties to the Investment Agreement, to nominate or
appoint directors of Smith or to exercise any other rights with respect
to the business or operations of Smith; (iii) the right to direct the
sale or other disposition of the Securities constituting a Partnership
Investment; provided, however, that, subject to Section 5, such sale or
other disposition shall be on the same terms and conditions, and in the
<PAGE>
<PAGE>26
same proportion, as the sale or other disposition of the Securities
constituting the remaining portion of the 399 Investment; and (iv) any
other rights it has acquired as a result of such Partnership Investment,
other than rights to dividends or interest on the Securities
constituting such Partnership Investment or the right to receive cash or
Securities in exchange for the Securities constituting the Partnership
Investment in connection with any sale, transfer, conversion or
redemption thereof.
3. If the rights described in Section 2 are not assigned to
399 in the manner set forth above, the Partnership agrees, if requested
in writing by 399, to exercise such rights in the manner directed by
399.
4. 399 shall have the right to exercise any and all voting,
management or other rights acquired as a result of the 399 Investment or
any future investment by 399 in Securities (including any rights
assigned or transferred to 399 hereunder) without the prior written
consent of the Partnership and in the same manner as if the
Partnership's share of such 399 Investment were owned directly by 399.
5. 399 and the Partnership agree that any transfer, sale or
other disposition (a "Sale") by 399 of any Securities held by 399 shall
include a Sale by the Partnership, on the same terms and conditions, of
an amount of Securities in each class bearing the same proportion to the
total amount of Securities in such class to be sold as the amount of
Securities in such class comprising the Partnership Investment bears to
the amount of Securities in such class comprising the 399 Investment.
6. If 399 determines to make an additional investment (the
"Total Additional Investment") prior to July 1, 1999 in Smith, the
Partnership shall make a portion of such investment. The amount that
the Partnership shall invest (the "Partnership's Follow-On Investment")
shall bear the same proportion to the Total Additional Investment as the
Partnership Investment bears to the 399 Investment. The amount that 399
shall invest shall be the difference between the Total Additional
Investment and the Partnership's Follow-On Investment.
7. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to
the choice of law provisions thereof.
<PAGE>
<PAGE>27
IN WITNESS WHEREOF, the undersigned have executed this
Agreement effective as of the date first written above.
399 VENTURE PARTNERS, INC.
By: _______________________________________
Title:
CCT PARTNERS I, L.P.
By: CCT I Corporation, its general partner
By: _______________________________________
Title: President and Chairman
