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FORM 10-KSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended: December 31, 1996
Commission File Number: 0-15241
NYTEST ENVIRONMENTAL INC.
(Exact Name of Registrant as Specified in its Charter)
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Delaware 11-2725582
(State or other jurisdiction of incorporation or organization) (I.R.S Employer Identification No.
60 Seaview Boulevard, Port Washington, NY 11050
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: (516) 625-5500
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act: Common Stock,
$.01 par value
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements by
reference in Part III of this Form 10-KSB or any amendment to the Form 10-KSB.
[ ]
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ] No [ ]
As of April 1, 1997, the aggregate value of the registrant's voting stock
held by non-affiliates was approximately $838,153 (computed by multiplying the
last reported sale price on April 1, 1997 by the number of shares of common
stock held by persons other than officers, directors or by record holders of 10%
or more of the registrant's outstanding common stock. This characterization of
officers, directors and 10% or more beneficial owners as affiliates is for
purposes of computation only and is not an admission for any purposes that such
persons are affiliates of the registrant.
As of April 1, 1997, there were 6,705,230 shares of the registrant's
common stock, $.01 par value, issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
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Document Form 10-KSB Reference
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Portions of the Registrant's Proxy Statement for its 1997 Annual Meeting (to be
filed in definitive form within 120 days of the Registrant's Fiscal Year End) III
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This is page 1 of
Exhibit index on page
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PART I
ITEM 1. BUSINESS
GENERAL
Nytest Environmental Inc. (the "Company"), a Delaware corporation
organized in 1985, provides specialized analytical services for the accurate
measurement of hazardous wastes. The Company's executive offices are located at
60 Seaview Boulevard, Port Washington, New York 11050 and its telephone number
is (516) 625-5500.
In December 1995, NEI/GTEL Environmental Laboratories, Inc. ("NEI /GTEL"),
a wholly owned subsidiary of the Company acquired the business and substantially
all of the assets of GTEL Environmental Laboratories, Inc. ("GTEL"), a
subsidiary of Groundwater Technologies Inc. ("Groundwater"). The assets acquired
include equipment, leasehold improvements, customer contracts and other assets
relating to the business of GTEL, except for real estate owned in Wichita,
Kansas, and certain GTEL assets located in Tempe, Arizona and Concord,
California, cash and accounts receivable. NEI/GTEL, as part of the transaction,
entered into a long-term lease for the use of the GTEL Wichita facility and
assignment and assumption agreements for the leases of GTEL facilities in Tampa,
Florida and Milford, New Hampshire. NEI/GTEL also hired all of the active
employees of GTEL as of the effective date of the transaction. In exchange for
the assets acquired, the NEI/GTEL paid $3.2 million in a combination of cash,
assumption of liabilities and the issuance of a secured convertible note in the
amount of approximately $1.1 million.
Effective August 31, 1996, the Company closed the operations of NEI
Pennsylvania, Inc. ("NEIP"), a subsidiary which acquired certain assets of BCM
Laboratory from BCM Engineers, Inc. as subsidiary of Smith Technologies, Inc.
("Smith") in August 1995. On April 11, 1997, the Company and Smith agreed to
terminate facilities and equipment subleases and portions of the purchase
agreement pursuant to which Smith had agreed to implement a marketing
arrangement for the Company's services.
The Company's analytical services include obtaining and isolating samples
of industrial and other waste materials including potentially hazardous wastes;
analyzing samples by identifying and quantifying their toxic components; and
electronically archiving data. The Company advises its clients as to whether
regulatory limits are exceeded with respect to applicable federal and state
environmental regulations. The Company does not develop solutions for the
control of pollution. The public's awareness of environmental needs, supported
by legislation, has created a demand for services of the type performed by the
Company from industrial concerns and governmental agencies. The demand for the
Company's services is driven, in large part, by Federal and State regulations to
preserve the environment. See "Business - Government Regulation."
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THE COMPANY'S SERVICES
The Company performs analyses which must be used by regulatory authorities
and site owners to report the risks posed by the potential or actual presence or
release of hazardous substances at any site. The Company performs an analysis of
the waste materials to determine the chemical compounds present, organizes the
data obtained and presents a comprehensive report of this data. There may be a
myriad of potentially harmful chemical compounds present in wastes, and multiple
tests may be required to determine the levels of contaminants at a single site.
Results obtained indicate only the amount of contaminant at the time of the
test. To assess the probability of future hazards or the degree of correction of
the pollutants requires several tests at relatively constant intervals. There is
also the possibility that the hazardous waste may have migrated from its initial
site. In such event, additional analysis by the Company and remedial action by
the client at other locations may be required.
The first step in an analytical program is to define the goals of the
client. In so doing, the Company will ascertain the tests to be performed, as
well as advise the client of the proper procedures for collecting and storing
the samples to be tested.
Samples of the material to be tested are taken by either the Company's
clients or the Company's personnel and forwarded to the Company for analysis.
Where the client does the sampling, the Company provides a "Sample Pack,"
containing vials and bottles in which the samples to be tested are stored and
maintained at a constant temperature. The Company is required to establish the
authenticity of the test samples and therefore each "Sample Pack" is accompanied
by the Company's chain of custody form. The Company's technical staff utilizes
mobile sampling equipment and personnel for the sampling and testing of
hazardous waste sites, monitoring wells or industrial discharges.
Upon receipt of the testing samples, the Company prepares the samples and
performs one or more of the following tests:
Gas Chromatograph/Mass Spectrometry ("GC/MS") is utilized to aid in the
identification and quantification of toxic chemicals and complex organic
mixtures. Prior to the sample being introduced to the GC/MS system, it may be
extracted, concentrated and, where required, subjected to clean-up procedures to
eliminate extraneous compounds from the sample. The GC/MS testing itself
involves a three-step process. First, a test sample is introduced into the gas
chromatograph portion of the system which separates the individual chemical
compounds. The separated compound then elutes into the mass spectrometer portion
of the system where it is bombarded by an electron beam. Each compound gives off
a unique mass spectral pattern which is then automatically compared with known
mass spectral data from within the system's NIST (National Institute of Science
and Technology), NIH (National Institute of Health) and EPA library of spectral
patterns. If the system finds a match in its data bank, it calculates the amount
present and stores the information for analysis and retrieval. GC/MS is highly
complex and the results produced typically require sophisticated analysis and
interpretation to accurately identify
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the compounds present. Interpretation is presently performed in accordance with
Data Evaluation as described below.
Gas Chromatography is used when specific organic compounds are sought to
be identified and quantified. It separates complex mixtures into individual
components. This is accomplished by utilizing specific detectors which include
flame ionization, electron capture, thermal conductivity or flame photometric
detectors.
High Pressure Liquid Chromatography is utilized to screen and quantify
polynuclear aromatics such as chrysene, anthracene, pyrene, and other EPA
priority pollutants.
Inductively Coupled Argon Plasma and Atomic Absorption Spectrophotometry
is utilized to analyze liquids and solids for trace metals such as arsenic,
mercury, and lead.
The Company performs additional tests which involve the classification of
the chemical and physical properties of waste samples, and which include tests
for reactivity, corrosivity, ignitability, chemical oxygen demand and other
similar tests.
The Company's equipment consists of GC/MS systems; chromatographs;
spectrophotometers; auto analyzers; a computer system; a laboratory, data
management and a business information system; associated laboratory equipment
and office furnishings. All of such equipment is in good condition and adequate
for present requirements.
All of the Company's assets are pledged to State Bank of Long Island as
security for its indebtedness to the bank. See Note D of the Notes to Financial
Statements and Item 6 "Management's Discussion and Analysis of Financial
Condition and Results of Operation." See also Notes E and H of the Notes to
Financial Statements regarding obligations by the Company under capital leasing
agreements and equipment notes secured by chattel liens.
Data Evaluation
The Company's computers enable it to quickly evaluate the data generated
by its laboratory instruments. This data can then be compared to regulatory
requirements or stored for future statistical or trend analysis. Results are
presented in a comprehensive, certified test report which details test
protocols, analytical data and accepted limits for each parameter, as
applicable. The Company's customers generally utilize the data obtained in
determining its impact with regard to applicable environmental laws. As part of
its analytical services, the Company makes its staff available to assist its
customers and authorized third parties to comprehend the test results.
Laboratory Information Management System (L.I.M.S.)
Laboratory analysis generates substantial quantities of data, especially
where a client monitors for hazards created by discharges which may not be
readily discernible except over an extended period of time. Additionally, large
industrial clients with facilities in more than one
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state are often subject to multiple regulatory requirements. The Company has a
laboratory data management and business system, which has appropriate security
and data backup procedures, to process, track and invoice samples, and the
ability to store and manage analytical data.
Quality Assurance
The Company maintains strict quality control in all facets of testing and
analysis to insure accuracy of results. Internal quality assurance procedures,
formulated within EPA guidelines, govern how samples and controls are handled
and are monitored daily. Standards are used to calibrate the equipment on a
daily basis.
Test samples are periodically issued by both the quality control manager
and various federal, state and local certifying licensing agencies, to determine
whether laboratory analytical results from such samples furnished by the
agencies fall within acceptable limits.
SALES AND MARKETING
The Company presently markets its services through its sales personnel,
and utilizes direct mail, trade exhibitions and promotional literature. The
Company's revenues in 1995 were realized from clients in the greater New York
and Philadelphia metropolitan regions as well as from the northeast and eastern
part of the United States. As part of the Company's acquisition, through
NEI/GTEL of assets from Groundwater Technology Inc., the Company acquired
operating laboratories in Milford, NH, Tampa, FL and Wichita, KS. The expansion
of the Company's laboratory network resulted in revenues from a wider geographic
area, although a majority of revenue is still derived from clients located in
the Eastern half of the United States.
GOVERNMENT REGULATION
The United States Environmental Protection Agency ("EPA") is the principal
federal agency responsible for environmental matters, including the disposal and
discharge of hazardous substances. State and local governments are involved in
implementing environmental programs on a state and local level. EPA, state and
local policies can adversely affect the demand for the Company's services by
relaxing regulations requiring tests, by delaying the effective date of
regulations which require tests and by relaxing its enforcement efforts.
Furthermore, to the extent that the budgets of administrating agencies are
reduced, or funds not made available to them, the demand for the Company's
services can also be adversely affected. Applicable federal legislation includes
the Resource Conservation Recovery Act ("RCRA"), the Clean Water Act, the Safe
Drinking Water Act, the Clean Air Act, Toxic Substances Control Act, the
Comprehensive Environmental Response Compensation and Liability Act ("CERCLA"),
and the Superfund Amendments and Reauthorization Act ("SARA") and the Technical
Standards and Corrective Action Requirements for Owners and Operators of
Underground Storage Tanks Act ("UST").
The Company's activities and its facilities are subject to regulation
under federal, state and local laws, ordinances and rules and regulations
relating to the environment, environmental
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quality and occupational health and safety including RCRA, the federal
Occupational Safety and Health Act ("OSHA") and similar state laws and
regulations promulgated thereunder. The Company receives and uses various
hazardous chemicals in its environmental testing operations, and is licensed for
these activities. While the Company believes that its operations have at all
times been conducted in compliance with all federal, state and local
environmental laws and regulations, any business handling hazardous waste is
subject to potential contingent liabilities under certain of these laws. The
full impact of applicable laws and regulations on the Company is difficult to
predict because of their complex nature and the possibility of changes because
of political and economic pressures. In connection with the Company's business
of waste analysis, the Company believes it is acting in compliance with
applicable environmental laws.
The Company has obtained certifications from all jurisdictions in which it
does business as required to conduct its laboratory testing business. The
Company is required to pass proficiency tests and evaluations which are given on
a periodic basis to retain its certification and to participate in contracts
under the Federal Superfund Program. The Company believes, but there can be no
assurances, that it will be able to obtain the required certifications and
approvals in all jurisdictions where it does business and plans to do business
in the future. The inability of the Company to retain present, or obtain new,
certifications or approvals where required would adversely affect its business.
INSURANCE
The Company currently carries an annual errors and omission insurance
policy with an aggregate limit of $5,000,000 (each claim and aggregate) on a
claims made basis. This insurance is provided by an insurance company rated as
A+IX (Superior, Adjusted Policyholder's Surplus between $100,000,000 and
$250,000,000) by Best's Insurance Reports but which is not licensed by the State
of New York. The Company therefore is not protected in the event of the
insurer's insolvency by New York State Security Funds. The policy expires May,
1996, with a retroactive date to January 1, 1985 with respect to the Port
Washington facility, August 5, 1995 with respect to the Norristown PA facility
and December 31, 1995 for operations acquired from Groundwater Technology, Inc.,
covering errors and omissions liability for environmental and material testing
and analysis with a $50,000 deductible for each claim. The policy contains
various exclusions including exclusions for the discharge of pollutants. The
Company also maintains comprehensive general liability insurance on an
occurrence basis which expires April, 1996, with an annual limit of $1,000,000,
including completed operations coverage. In addition, the Company maintains an
umbrella insurance policy of $5,000,000 (each claim and aggregate). The general
liability policy contains various exclusions, including (1) claims related to
the discharge of pollutants, (2) professional liability and (3) asbestos related
claims. The umbrella policy contains substantially the same exclusions as the
liability policy. The Company intends to maintain the same coverage, either by
renewal or by obtaining similar coverage. However, no assurances can be given
that the Company will be able to maintain any or all of the above described
policies of insurance which may also be canceled before expiration in accordance
with the terms of each policy. Further, while management believes this coverage
is adequate, there can be no assurance that a recovery or settlement of a
material claim will not exceed the Company's coverage.
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BACKLOG
As of March 1, 1997, the Company had a backlog of orders it believed to be
firm of approximately $384,000 compared to approximately $654,000 as of March
1, 1996. All of the backlog as of March 1, 1997 is expected to be filled during
1997. In addition, the Company has entered into several contracts to provide,
upon request of several clients, laboratory services having a potential value of
up to $7,000,000 at fixed prices which are to be completed during 1997. The
actual dollar amount of laboratory services to be performed pursuant to these
contracts can not be accurately predicted at the present time and, accordingly,
has not been included in the of backlog above. See "Item 6. Management's
Discussion and Analysis of Financial Condition and Results of Operations."
COMPETITION
There are many independent analytical testing laboratories which compete
for the environmental and hazardous waste testing business nationwide. The
Company believes that the principal competitive factors in the analytical
testing of environmental and hazardous waste are customer service, expertise,
data accuracy, turn-around time and price.
EMPLOYEES
As of December 31, 1996, the Company had 172 full time employees. Of
these employees 7 were executives, 14 in sales, 138 in technical laboratory
activities and 13 were in administrative and support functions. In addition,
the Company employs 17 persons on a part-time basis.
The Company is not subject to any collective bargaining agreement and
management believes that its employee relations are good.
ITEM 2. PROPERTIES
The Company occupies office and laboratory facilities as follows:
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Approximate Size
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Port Washington, NY 18,600 Sq. Ft. Leased
Milford, NH 25,400 Sq. Ft. Leased
Tampa, FL 10,000 Sq. Ft. Leased
Wichita, KS 16,000 Sq. Ft. Leased
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The leased space has generally been improved to suit the office or
laboratory needs of the Company. The Company leases its facility in Wichita, KS
from Groundwater Technology, Inc. and recently terminated a sublease with Smith
for a facility in Norristown, PA.
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In addition to the above, the Company occupies sales offices in Concord,
CA and Atlanta, GA.
The Company believes that its office and laboratory facilities are
adequate for its present needs.
ITEM 3. LEGAL PROCEEDINGS
The Company initially reported in its Annual Report on Form 10-K for the
fiscal year ended December 31, 1987 that it was a third-party defendant to an
action commenced against it during February, 1988 and brought by Pebble Cove
Home Owners Association Inc. and Herbert Rubin in the Supreme Court of the State
of New York, County of Nassau against eight defendants. The Company's insurance
carriers are defending the case and a second related action. Management does not
anticipate liability because it believes that it has meritorious defenses to the
action and participated only to a limited extent in the matter. The Company
believes that its insurance will cover any liability, subject to provisions for
deductibility. Counsel defending the Company, appointed by the Company's
insurance carrier, has advised the Company that, based upon information
presently available to the firm, it believes both actions to be speculative and
unsubstantiated. Further, the matter has been inactive since 1990. Management
believes, although no assurances can be given, that in view of its insurance
coverage, this lawsuit will not have a material adverse effect upon the
Company's earnings or financial condition.
The Company initially reported in its Annual Report on Form 10-K for the
year ended December 31, 1989 that the Company commenced suit in the Superior
Court of New Jersey, Law Division, Hudson County, against Standard Tank Cleaning
Corp. ("Standard Tank") and three (3) other defendants for nonpayment of testing
services performed in the sum of $35,713 and that Standard Tank had served a
counterclaim against the Company for $450,000 in damages alleged to have
resulted from penalties assessed against it. Standard Tank filed for protection
under Chapter 11 of the U.S. Bankruptcy Code on September 18, 1990 and the
action has been inactive for several years. Management believes that the
counterclaim against the Company is without merit. Management also believes,
that due to its insurance coverage and subject to a $50,000 deductible, that the
counterclaim by Standard Tank will not have a material adverse effect upon the
Company's financial condition or earnings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
Prior to September 27, 1996, the Company's Common Stock was traded in the
NASDAQ Stock Markets' SmallCap Stock Market (the "NASDAQ Small-Cap Market"). The
common stock is currently traded over-the-counter on the National Association of
Securities Dealers, Inc. Automated Quotation Stock Market's Electronic Bulletin
Board (the "OTC Bulletin Board") under the symbol "NYTS." The following table
sets forth the high and low bid prices of shares of the Company's Common Stock
as reported on the NASDAQ Small Cap Market or the OTC Bulletin Board for the
calendar period indicated. The information represents inter-dealer quotations,
without retail mark-ups, mark-downs or commissions, and does not necessarily
represent actual quotations.
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High Low
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1996
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First Quarter 3/4 1/2
Second Quarter 9/16 3/8
Third Quarter 9/32 1/8
Fourth Quarter 5/16 1/8
1995
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First Quarter 25/64 1/4
Second Quarter 7/16 1/4
Third Quarter 1-1/2 15/32
Fourth Quarter 11/16 3/8
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The number of holders of record of the Company's common stock as of March
21, 1997 was 370.
No dividends have been paid during the past two years. The Company has no
present intention of paying any cash dividends in the foreseeable future and
intends to retain future earnings to finance its growth.
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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company was not able to complete its financial statements in
time to file this form 10-KSB report because the results of the
negotiations between the Company and Smith, which were concluded
April 11, 1997, will have a material effect on the Company's assets
and results of operations.
In August 1996, the Company reserved the full amount of real
estate and equipment leases of approximately $750,000 related to the
Company's acquisition of the assets of BCM Laboratories from Smith in
1995 and the discontinuation of these operations in August 1996. The
Company and Smith agreed to terminate the leases and release the
Company's NEIPA subsidiary from its obligations on April 11, 1997. As
a result, the Company will recoup approximately $600,000 of the
reserve reducing the Company's net loss for the year ended December
31, 1996 from approximately $3.8 million to $3.2 million. In
addition, the Company and Smith agreed to fix a payment schedule for
$681,082 of accounts receivable from Smith on or about April 18, 1997.
As a result of the resolution of these two matters, the Company
anticipates that its stockholder's equity at December 31, 1996 was
approximately $150,000 compared to a possible deficit of $(675,000) if
this matter was not resolved.
The foregoing discussion represents management's estimate at the
present time and has not been passed upon by the Company's independent
auditors. The Company intends to amend the form 10-KSB to include
unaudited financial statements and a full discussion of financial
condition and results of operations as soon as possible.
ITEM 7. FINANCIAL STATEMENTS
See Item 6, above.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
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PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with respect to executive officers and directors of the
Company will be set forth in the Company's definitive proxy statement which is
expected to be filed within 120 days of December 31, 1996 and is incorporated
herein by reference.
ITEM 10. EXECUTIVE COMPENSATION.
Information with respect to executive compensation will be set forth in
the Company's definitive proxy statement which is expected to be filed within
120 days of December 31, 1996 and is incorporated herein by reference.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information with respect to the ownership of the Company's securities by
certain persons will be set forth in the Company's definitive proxy statement
which is expected to be filed within 120 days of December 31, 1996 and is
incorporated herein by reference.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information with respect to transactions with management and others will
be set forth in the Company's definitive proxy statement which is expected to be
filed within 120 days of December 31, 1996 and is incorporated herein by
reference.
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PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
The following exhibits are filed as part of this report. Where such filing
is made by incorporation by reference to a previously filed statement or report
such report is identified in parenthesis:
(3) Articles of Incorporation and By-laws:
(a) Certificate of incorporation of Nytest Environmental Inc. dated
January 15, 1985 (Exhibit 3(a) to the Company's Form S-1
registration statement, File No. 33-2047)
(b) Amendment to the certificate of incorporation of Nytest
Environmental Inc. dated July 21, 1987 (Exhibit 3.1 to the
Company's Form 10-K Report dated December 31, 1987)
(c) By-laws of Nytest Environmental Inc., as amended through July 15,
1987 (Exhibit 3.2 to the Company Form 10-K Report dated December 31,
1987)
(d) Amendment to the Certificate of Incorporation of Nytest
Environmental Inc. dated April 7, 1997.
(4) Instruments defining the rights of security holders:
(a) Specimen Common Stock Certificate (Exhibit 4(a) to the Company's
Form S-1 registration statement, File No. 33-2047)
(b) Form of Underwriter's Warrant issued to Royce Investment Group,
Inc. (Exhibit 4.4 to the Company's Form S-2 registration
statement, File No. 33-40570)
(c) Subordinated Convertible Note of NEI/GTEL Environmental
Laboratories, Inc. dated December 31, 1995. (Exhibit 99.2 to the
Company's Form 8-K Report dated December 31, 1995)
(10) Material Contracts:
(a) Employment agreement between the Company and John Gaspari dated
January 1, 1989 (Exhibit 10.3 to the Company's Report on Form 10-Q
dated June 30, 1988)
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(b) Amendment dated May 14, 1991 to employment agreement between the
Company and John Gaspari (Exhibit 10.8 to the Company's Form S-2
Registration Statement, File No. 33-40570)
(c) 1991 Executive Option Plan (Exhibit 10.12 to the Company's Form
S-2 Registration Statement, File No. 33-40570)
(d) Form of Option Agreement under the 1991 Executive Option Plan
(Exhibit 10.14 to Amendment No. 1 to the Company's Form S-2
Registration Statement, File No. 33-40570)
(e) Employment Agreement dated November 2, 1992 between the Company
and James W. Shearard, Jr. (Exhibit 10(i) to the Company's Form
10-KSB dated December 31, 1994)
(f) Amendment to Employment Agreement dated January 18, 1993 between
the Company and James W. Shearard, Jr. (Exhibit 10(j) to the
Company's Form 10-KSB dated December 31, 1994)
(g) 1992 Employee Stock Incentive Plan (Exhibit 10(k) to the Company's
Form 10-KSB dated December 31, 1994)
(h) Asset and Business Purchase Agreement dated August 3, 1995
between NEI of Pennsylvania, Inc. and BCM Engineers, Inc.
(Exhibit 2.1 to the Company's Form 8-K Report dated August 5,
1995)
(i) Sublease dated August 3, 1995 between NEI of Pennsylvania, Inc.
and BCM Engineers, Inc. concerning 1850 Gravers Road, Norristown,
PA (Exhibit 99.1 to the Company's Form 8-K Report dated August 5,
1995)
(j) Equipment Subleases dated August 3, 1995 between BCM Engineers and
affiliates and NEI of Pennsylvania, Inc. (Exhibit 99.2 to the
Company's Form 8-K Report dated August 5, 1995)
(k) Guaranty dated August 3, 1995 by Smith Environmental Technology
Inc. in the form of NEI of Pennsylvania, Inc. (Exhibit 99.3 to
the Company's Form 8-K Report dated August 5, 1995)
(l) Guaranty dated August 3, 1995 by Nytest Environmental Inc. in
favor of BCM Engineers, Inc. (Exhibit 99.4 to the Company's Form
8-K Report dated August 5, 1995)
(m) Asset and Business Purchase Agreement dated December 28, 1995 and
effective as of December 31, 1995 between NEI/GTEL Environmental
Laboratories, Inc.
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and GTEL Environmental Laboratories, Inc. (Exhibit 2.1 to the
Company's Form 8-K Report dated December 31, 1995)
(n) Market and Supply Agreement dated December 31, 1995 between
NEI/GTEL Environmental Laboratories, Inc. and Groundwater
Technology, Inc. (Exhibit 99.1 to the Company's Form 8-K Report
dated December 31, 1995)
(o) Security Agreement dated December 31, 1995 among NEI/GTEL
Environmental Laboratories, Inc., GTEL Environmental
Laboratories, Inc. and Nytest Environmental Inc. (Exhibit 99.3 to
the Company's Form 8-K Report dated December 31, 1995)
(p) Registration Rights Agreement dated December 28, 1995 between
Nytest Environmental Inc. and Groundwater Technology, Inc.
(Exhibit 99.4 to the Company's Form 8-K Report dated December 31,
1995)
(q) Guaranty of Nytest Environmental Inc. dated December 31, 1995
(Exhibit 99.5 to the Company's Form 8-K Report dated December 31,
1995)
(r) Lease of 4211 West May, Wichita, KS, dated December 31, 1995
(Exhibit 99.6 to the Company's Form 8-K Report dated December 31,
1995)
(s) Assignment of Patent Rights dated December 31, 1995 (Exhibit 99.7 to
the Company's Form 8-K Report dated December 31, 1995)
(t) Promissory Note from Nytest Environmental, Inc. to State Bank of
Long Island dated July 18, 1995 (Exhibit 10(t) to the Company's
Form 10-KSB Report dated December 31, 1995)
(u) Commercial Security Agreement dated July 18, 1995 between Nytest
Environmental Inc. and State Bank of Long Island (Exhibit 10(u)
to the Company's Form 10-KSB Report dated December 31, 1995)
(v) Promissory Note in the amount of $300,000 from Nytest
Environmental Inc. to State Bank of Long Island (Exhibit 10(v) to
the Company's Form 10-KSB Report dated December 31, 1995)
(w) Commercial Security Agreement dated February 8 , 1996 between NEIP
and State Bank of Long Island (Exhibit 10(w) to the Company's Form
10-KSB Report dated December 31, 1995)
(x) Loan and Security Agreement dated April 22, 1996 between Nytest
Environmental Inc., NEI/GTEL Environmental Laboratories, Inc.,
NEI of Pennsylvania,
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<PAGE> 15
Inc. and The CIT Group/Credit Finance, Inc. (Exhibit 10.1 to the
Company's Form 10-QSB Report dated March 31, 1996)
(y) Term Note dated April 22, 1996 in the amount of $1,840,120 due
from Nytest Environmental Inc., NEI/GTEL Environmental
Laboratories, Inc. and NEI of Pennsylvania, Inc. to The CIT
Group/Credit Finance, Inc. (Exhibit 10.2 to the Company's Form
10-QSB Report dated March 31, 1996)
(z) General Intangibles Mortgage and Security Agreement dated April
22, 1996 between Nytest Environmental Inc. and The CIT
Group/Credit Finance, Inc. (Exhibit 10.3 to the Company's Form
10-QSB Report dated March 31, 1996)
(aa) Cross Corporate Guaranty of Nytest Environmental Inc. to The CIT
Group/Credit Finance, Inc. dated April 22, 1996. (Exhibit 10.4 to
the Company's Form 10-QSB Report dated March 31, 1996)
(bb) Cross Corporate Guaranty of NEI/GTEL Environmental Laboratories,
Inc. to The CIT Group/Credit Finance, Inc. dated April 22, 1996.
(Exhibit 10.5 to the Company's Form 10-QSB Report dated March 31,
1996)
(cc) Cross Corporate Guaranty of NEI of Pennsylvania, Inc. to The CIT
Group/Credit Finance, Inc. dated April 22, 1996. (Exhibit 10.6 to
the Company's Form 10-QSB Report dated March 31, 1996)
(dd) Subordination and Intercreditor Agreement dated April 22, 1996
among GTEL Environmental Laboratories, Inc., Nytest Environmental
Inc., NEI/GTEL Environmental Laboratories, Inc. and NEI of
Pennsylvania, Inc. and The CIT Group/Credit Finance, Inc.
(Exhibit 10.7 to the Company's Form 10-QSB Report dated March 31,
1996)
(ee) Subordination and Intercreditor Agreement among State Bank of
Long Island, GTEL Environmental Laboratories, Inc., Nytest
Environmental Inc., NEI/GTEL Environmental Laboratories, Inc. and
NEI of Pennsylvania, Inc. and The CIT Group/Credit Finance, Inc.
(Exhibit 10.8 to the Company's Form 10-QSB Report dated March 31,
1996)
(ff) Letter Agreement dated April 22, 1996 re: Permitted Rent among
Groundwater Technology, Inc., Nytest Environmental Inc., NEI/GTEL
Environmental Laboratories, Inc. and NEI of Pennsylvania, Inc.
and The CIT Group/Credit Finance, Inc. (Exhibit 10.9 to the
Company's Form 10-QSB Report dated March 31, 1996)
(gg) Termination and Waiver of Claims dated April 11, 1997 between NEI
of Pennsylvania, Inc., Nytest Environmental, Inc., BCM Engines,
Inc. and Smith Technology Corporation.
(16) Letter re: change in certifying accountant
None
15
<PAGE> 16
(18) Letter on change in accounting principles
None
(21) Subsidiaries of registrant
NEI of Pennsylvania, Inc. (Del.) 100% owned.
NEI/GTEL Environmental Laboratories, Inc. (Del.) 100% owned.
(23) Consents of experts and counsel
By Amendment.
(b) Reports of Form 8-K
None
16
<PAGE> 17
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed by the
undersigned, thereunto duly authorized.
NYTEST ENVIRONMENTAL INC.
By: /s/ John Gaspari
---------------------------------
John Gaspari, President and
Dated: April 15, 1997 Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934 this
report has been signed below by the following persons on behalf of the
registrant and in the capacities on the dates indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
- --------- -------- ----
<S> <C> <C>
/s/ John Gaspari President, Chief Executive April 15, 1997
- ----------------------------- Officer and Director
John Gaspari (Principal Executive Officer)
/s/ James W. Shearard, Jr. Vice President - Marketing and April 15, 1997
- ----------------------------- Sales, Secretary and Director
James W. Shearard, Jr.
/s/ Elliot J. Laitman Treasurer, Chief Financial Officer April 15, 1997
- ----------------------------- (Principal Accounting and
Elliot J. Laitman Financial Officer)
Director April 15, 1997
- -----------------------------
Anthony P. Towell
/s/ Thomas E. Lent Director April 15, 1997
- -----------------------------
Thomas E. Lent
Director April 15, 1997
- -----------------------------
Martin Fleisher
</TABLE>
17
<PAGE> 18
EXHIBIT INDEX
Item No. Description
- -------- -----------
The following exhibits are filed as part of this report. Where such filing
is made by incorporation by reference to a previously filed statement or report
such report is identified in parenthesis:
(3) Articles of Incorporation and By-laws:
(a) Certificate of incorporation of Nytest Environmental Inc. dated
January 15, 1985 (Exhibit 3(a) to the Company's Form S-1
registration statement, File No. 33-2047)
(b) Amendment to the certificate of incorporation of Nytest
Environmental Inc. dated July 21, 1987 (Exhibit 3.1 to the
Company's Form 10-K Report dated December 31, 1987)
(c) By-laws of Nytest Environmental Inc., as amended through July 15,
1987 (Exhibit 3.2 to the Company Form 10-K Report dated December 31,
1987)
(d) Amendment to the Certificate of Incorporation of Nytest
Environmental Inc. dated April 7, 1997.
(4) Instruments defining the rights of security holders:
(a) Specimen Common Stock Certificate (Exhibit 4(a) to the Company's
Form S-1 registration statement, File No. 33-2047)
(b) Form of Underwriter's Warrant issued to Royce Investment Group,
Inc. (Exhibit 4.4 to the Company's Form S-2 registration
statement, File No. 33-40570)
(c) Subordinated Convertible Note of NEI/GTEL Environmental
Laboratories, Inc. dated December 31, 1995. (Exhibit 99.2 to the
Company's Form 8-K Report dated December 31, 1995)
(10) Material Contracts:
(a) Employment agreement between the Company and John Gaspari dated
January 1, 1989 (Exhibit 10.3 to the Company's Report on Form 10-Q
dated June 30, 1988)
<PAGE> 19
EXHIBIT INDEX
Item No. Description
- -------- -----------
(b) Amendment dated May 14, 1991 to employment agreement between the
Company and John Gaspari (Exhibit 10.8 to the Company's Form S-2
Registration Statement, File No. 33-40570)
(c) 1991 Executive Option Plan (Exhibit 10.12 to the Company's Form
S-2 Registration Statement, File No. 33-40570)
(d) Form of Option Agreement under the 1991 Executive Option Plan
(Exhibit 10.14 to Amendment No. 1 to the Company's Form S-2
Registration Statement, File No. 33-40570)
(e) Employment Agreement dated November 2, 1992 between the Company
and James W. Shearard, Jr. (Exhibit 10(i) to the Company's Form
10-KSB dated December 31, 1994)
(f) Amendment to Employment Agreement dated January 18, 1993 between
the Company and James W. Shearard, Jr. (Exhibit 10(j) to the
Company's Form 10-KSB dated December 31, 1994)
(g) 1992 Employee Stock Incentive Plan (Exhibit 10(k) to the Company's
Form 10-KSB dated December 31, 1994)
(h) Asset and Business Purchase Agreement dated August 3, 1995
between NEI of Pennsylvania, Inc. and BCM Engineers, Inc.
(Exhibit 2.1 to the Company's Form 8-K Report dated August 5,
1995)
(i) Sublease dated August 3, 1995 between NEI of Pennsylvania, Inc.
and BCM Engineers, Inc. concerning 1850 Gravers Road, Norristown,
PA (Exhibit 99.1 to the Company's Form 8-K Report dated August 5,
1995)
(j) Equipment Subleases dated August 3, 1995 between BCM Engineers and
affiliates and NEI of Pennsylvania, Inc. (Exhibit 99.2 to the
Company's Form 8-K Report dated August 5, 1995)
(k) Guaranty dated August 3, 1995 by Smith Environmental Technology
Inc. in the form of NEI of Pennsylvania, Inc. (Exhibit 99.3 to
the Company's Form 8-K Report dated August 5, 1995)
(l) Guaranty dated August 3, 1995 by Nytest Environmental Inc. in
favor of BCM Engineers, Inc. (Exhibit 99.4 to the Company's Form
8-K Report dated August 5, 1995)
(m) Asset and Business Purchase Agreement dated December 28, 1995 and
effective as of December 31, 1995 between NEI/GTEL Environmental
Laboratories, Inc.
<PAGE> 20
EXHIBIT INDEX
Item No. Description
- -------- -----------
and GTEL Environmental Laboratories, Inc. (Exhibit 2.1 to the
Company's Form 8-K Report dated December 31, 1995)
(n) Market and Supply Agreement dated December 31, 1995 between
NEI/GTEL Environmental Laboratories, Inc. and Groundwater
Technology, Inc. (Exhibit 99.1 to the Company's Form 8-K Report
dated December 31, 1995)
(o) Security Agreement dated December 31, 1995 among NEI/GTEL
Environmental Laboratories, Inc., GTEL Environmental
Laboratories, Inc. and Nytest Environmental Inc. (Exhibit 99.3 to
the Company's Form 8-K Report dated December 31, 1995)
(p) Registration Rights Agreement dated December 28, 1995 between
Nytest Environmental Inc. and Groundwater Technology, Inc.
(Exhibit 99.4 to the Company's Form 8-K Report dated December 31,
1995)
(q) Guaranty of Nytest Environmental Inc. dated December 31, 1995
(Exhibit 99.5 to the Company's Form 8-K Report dated December 31,
1995)
(r) Lease of 4211 West May, Wichita, KS, dated December 31, 1995
(Exhibit 99.6 to the Company's Form 8-K Report dated December 31,
1995)
(s) Assignment of Patent Rights dated December 31, 1995 (Exhibit 99.7 to
the Company's Form 8-K Report dated December 31, 1995)
(t) Promissory Note from Nytest Environmental, Inc. to State Bank of
Long Island dated July 18, 1995 (Exhibit 10(t) to the Company's
Form 10-KSB Report dated December 31, 1995)
(u) Commercial Security Agreement dated July 18, 1995 between Nytest
Environmental Inc. and State Bank of Long Island (Exhibit 10(u)
to the Company's Form 10-KSB Report dated December 31, 1995)
(v) Promissory Note in the amount of $300,000 from Nytest
Environmental Inc. to State Bank of Long Island (Exhibit 10(v) to
the Company's Form 10-KSB Report dated December 31, 1995)
(w) Commercial Security Agreement dated February 8 , 1996 between NEIP
and State Bank of Long Island (Exhibit 10(w) to the Company's Form
10-KSB Report dated December 31, 1995)
(x) Loan and Security Agreement dated April 22, 1996 between Nytest
Environmental Inc., NEI/GTEL Environmental Laboratories, Inc.,
NEI of Pennsylvania,
<PAGE> 21
EXHIBIT INDEX
Item No. Description
- -------- -----------
Inc. and The CIT Group/Credit Finance, Inc. (Exhibit 10.1 to the
Company's Form 10-QSB Report dated March 31, 1996)
(y) Term Note dated April 22, 1996 in the amount of $1,840,120 due
from Nytest Environmental Inc., NEI/GTEL Environmental
Laboratories, Inc. and NEI of Pennsylvania, Inc. to The CIT
Group/Credit Finance, Inc. (Exhibit 10.2 to the Company's Form
10-QSB Report dated March 31, 1996)
(z) General Intangibles Mortgage and Security Agreement dated April
22, 1996 between Nytest Environmental Inc. and The CIT
Group/Credit Finance, Inc. (Exhibit 10.3 to the Company's Form
10-QSB Report dated March 31, 1996)
(aa) Cross Corporate Guaranty of Nytest Environmental Inc. to The CIT
Group/Credit Finance, Inc. dated April 22, 1996. (Exhibit 10.4 to
the Company's Form 10-QSB Report dated March 31, 1996)
(bb) Cross Corporate Guaranty of NEI/GTEL Environmental Laboratories,
Inc. to The CIT Group/Credit Finance, Inc. dated April 22, 1996.
(Exhibit 10.5 to the Company's Form 10-QSB Report dated March 31,
1996)
(cc) Cross Corporate Guaranty of NEI of Pennsylvania, Inc. to The CIT
Group/Credit Finance, Inc. dated April 22, 1996. (Exhibit 10.6 to
the Company's Form 10-QSB Report dated March 31, 1996)
(dd) Subordination and Intercreditor Agreement dated April 22, 1996
among GTEL Environmental Laboratories, Inc., Nytest Environmental
Inc., NEI/GTEL Environmental Laboratories, Inc. and NEI of
Pennsylvania, Inc. and The CIT Group/Credit Finance, Inc.
(Exhibit 10.7 to the Company's Form 10-QSB Report dated March 31,
1996)
(ee) Subordination and Intercreditor Agreement among State Bank of
Long Island, GTEL Environmental Laboratories, Inc., Nytest
Environmental Inc., NEI/GTEL Environmental Laboratories, Inc. and
NEI of Pennsylvania, Inc. and The CIT Group/Credit Finance, Inc.
(Exhibit 10.8 to the Company's Form 10-QSB Report dated March 31,
1996)
(ff) Letter Agreement dated April 22, 1996 re: Permitted Rent among
Groundwater Technology, Inc., Nytest Environmental Inc., NEI/GTEL
Environmental Laboratories, Inc. and NEI of Pennsylvania, Inc.
and The CIT Group/Credit Finance, Inc. (Exhibit 10.9 to the
Company's Form 10-QSB Report dated March 31, 1996)
(gg) Termination and Waiver of Claims dated April 11, 1997 between NEI
of Pennsylvania, Inc., Nytest Environmental, Inc., BCM Engines,
Inc. and Smith Technology Corporation.
(16) Letter re: change in certifying accountant
None
<PAGE> 22
EXHIBIT INDEX
Item No. Description
- -------- -----------
(18) Letter on change in accounting principles
None
(21) Subsidiaries of registrant
NEI of Pennsylvania, Inc. (Del.) 100% owned.
NEI/GTEL Environmental Laboratories, Inc. (Del.) 100% owned.
(23) Consents of experts and counsel
By Amendment.
<PAGE> 1
Certificate of Amendment of Certificate of Incorporation
of
NYTEST ENVIORNMENTAL INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "Corporation") is
Nytest Enviornmental Inc.
2. The certificate of incorporation of the corporation is hereby amended
by striking out Article FOURTH thereof and by substituting in lieu of said
Article the following new Article:
"FOURTH: The Corporation shall be authorized to issue the following
shares:
Class No. of Shares Par Value
----- ------------- ---------
Common 30,000,000 $.01
3. As of the date of this Certificate of Amendment there are 5,669,290
shares of Common Stock, $.01 par value issued and outstanding, and no shares of
Preferred Stock issued and outstanding. The foregoing amendment increases the
number of shares of authorized common stock from 10,000,000 to 30,000,000.
This Amendment shall not affect the rights of the holders of any outstanding
shares of Common Stock.
4. The amendment of the certificate of incorporation herein certified has
been duly adopted in accordance with the provisions of section 242 of the
General Corporation Law of the State of Delaware.
Signed and attested to on April 7, 1997.
/s/ John Gaspari
-----------------------
John Gaspari, President
/s/ Jay W. Shearard
- --------------------------
Jay W. Shearard, Secretary
<PAGE> 1
TERMINATION AND WAIVER OF CLAIMS
WHEREAS, NEI of Pennsylvania, Inc., as Buyer ("NEI or Buyer") and NYTEST
Environmental Inc., its parent corporation ("NYTEST"), entered into a contract
with BCM Engineers Inc., a Pennsylvania corporation ("BCM") and Smith
Technology Corporation ("SMITH") to the extent set forth in Section 7, for the
purchase of certain assets and the assumption by NEI of certain leases and
liabilities dated August 3, 1995, (the "Asset Agreement"), and
WHEREAS, NEI, pursuant to the Asset Agreement, entered into a sublease dated
August 3, 1995, of a portion of the improved real property leased by BCM from
the Gravers Company at 1850 Gravers Road in Norristown, Pennsylvania, commonly
referred to as the Laboratory Site (the "Sublease"), and
WHEREAS, NEI entered into two subleases dated August 3, 1995, of personal
property, wherein NEI assumed the obligations of the lease of personal property
supplied through Fideleor Services Inc. (the "Fideleor Sublease"), and for
personal property obtained through Tokai Financial Services, Inc. (the "Tokai
Sublease"), and
WHEREAS, various disputes as to the rights and obligations of BCM and Smith
Technology Corporation ("Smith"), NEI and NYTEST have arisen and the parties
desire to resolve such disputes, NOW THEREFORE, the parties enter into this
agreement (the "Termination Agreement") as follows:
1. TERMINATION OF SUBLEASE
The parties agree that the Sublease is terminated effective February 28,
1997, and that NEI and NYTEST forego and waive all claims of any right,
title, or interest in and to all fixtures, equipment, improvements,
installations, and the appurtenances in each case attached to the sublet
premises at commencement of the Sublease or which may have been attached
during the term thereof. The costs, removal and disposal of regulated
wares will be deducted from the amount due under paragraph 5.
2. TERMINATION OF FIDELEOR SUBLEASE AND TOKAI SUBLEASE
The parties agree that the Fideleor Sublease and the Tokai Sublease
including all future sublease obligations are terminated effective
February 28, 1997, with no continuing obligations as between the
parties. NEI agrees that it is, as of March 10, 1997, in possession of
all personal property and equipment to which it is entitled under the
terms of the Asset Agreement. NEI and NYTEST waive any right or interest
in and to any other property or equipment or proceeds of equipment
leased or which may have been acquired under the terms of the Fideleor
Sublease and Tokai Sublease.
3. NEI and NYTEST further agree that they waive all interest and any claim
of title in and to the assets described in paragraph 1.1e of the Asset
Agreement which remain at the Lab Site as of the date of this Agreement.
4. CREDITS AND OFFSETS
BCM, NEI and NYTEST acknowledge that BCM has received laboratory
services from NEI and its affiliated laboratories and that BCM has
offset amounts owned by BCM and Smith for laboratory services and NEI,
NYTEST and its affiliates have received credit for the amount of such
offsets
Page 1 of 4
<PAGE> 2
against amounts owed by NEI to BCM pursuant to the terms of the Asset Agreement.
The amount of such offset and credit is set forth as follows:
Invoices for Services through February 28, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
Hudson Chromate (the "Project") $692,847
Other Services 589,963
--------
Total for Services through February 28, 1997 $1,282,810
Last BCM Payments 108,466
----------
Balance for Services as of February 28, 1997 $1,174,344
Less Amounts due (offset) from NEI per
Asset Agreement through May 31, 1996 $493,262
Amount Due NEI $681,082
</TABLE>
5. Survivability of Claim
Notwithstanding the reciprocal waiver and release of claims by the parties
contained herein, the parties acknowledge that NYTEST has continued to perform
laboratory services for BCM at its request related to the Hudson County Chromate
Chemical Production Waste Site project (the "Project"). BCM agrees that it will
continue to use NYTEST as NEI's successor for laboratory services at the Project
on the basis of the contract for Laboratory Services dated September 14, 1995,
between BCM, NYTEST and NEI, subject to the continued approval of the New Jersey
Department of Environmental Protection (NJDEP) to use NEI or NYTEST.
The parties agree that NYTEST's and NEI's total amounts billed for services
identified in Section 4 above includes $692,847 relating to the Project and
performed prior to February 28, 1997. This obligation is subject to NJDEP's
approval and acceptance of NYTEST's analytical work, holding periods, and
acknowledgement that the laboratory services are in compliance with the
requirements of the NJDEP.
NYTEST accepts $681,082 as identified in Section 4 above is complete
satisfaction of amounts due for services rendered to February 28, 1997, and
acknowledges that NYTEST shall be subject to backcharge for the amount of any
services rejected by NJDEP due to actions or omissions by NYTEST and the cost of
resampling and reperformance incurred as a result of such rejection. Any such
backcharge shall be deducted from amounts due for future services and the
retainage.
BCM and SMITH shall pay the balance due in installments on the dates set forth
below:
<TABLE>
<CAPTION>
Installment Payment
Amount Date
----------- -------
<S> <C>
$681,082 A payment schedule to be mutually
agreed upon by both parties is
anticipated to be completed by
April 18, 1997
JS 4/14/97
</TABLE>
Page 2 of 4
<PAGE> 3
6. Waiver of Claims
a. Waiver of NEI AND NYTEST. For and in consideration of the promises
and covenants set forth in this Termination Agreement, NYTEST and
NEI, their successors, assigns and any and all persons claiming by,
through or under them, hereby release and forever discharge BCM and
its parent subsidiaries, affiliates, predecessors, successors,
related entities, directors, employees, agents, attorneys, and all
persons acting by and through, under or in concert with them, or any
of them, of and from any and all claims, demands, claims for relief,
obligations, rights, and/or liabilities of any nature, whether
anticipated or unanticipated, known or unknown, fixed or contingent,
past or present (hereinafter referred to as "Claims"), which NYTEST
and NEI now have or may hereinafter have against BCM and its parent,
subsidiaries, affiliates, predecessors, successors, related entities,
insurers and assigns, as well as its past and present officers,
directors, employees, agents, attorneys, and all persons acting by
and through, under or in concert with them, or any of them, by reason
of any matter, cause or thing arising out of, based upon, or relating
to the Asset Agreement and as amended by Smith letter dated August
22, 1996.
b. Waiver of BCM. For and in consideration of the promises and covenants
set forth in this Termination Agreement, BCM, its successors, assigns
and any and all persons claiming through or under it, hereby releases
and forever discharges NYTEST and NEI and its parents, subsidiaries,
affiliates, predecessors, successors, related entities, directors,
employees, agents, attorneys, and all persons acting by and through,
under or in concert with them, or any of them, of and from any and
all claims, demands, claims for relief, obligations, rights, and/or
liabilities of any nature, whether anticipated or unanticipated,
known or unknown, fixed or contingent, past or present (hereinafter
referred to as "Claims"), which BCM now has or may hereafter have
against NYTEST or NEI and its respective parent, subsidiaries,
affiliates, predecessors, successors, related entities, insurers and
assigns, as well as its past and present officers, directors,
employees, agents, attorneys, and all persons acting by and through,
under or in concert with them, or any of them, by reason of any
matter, cause or thing arising out of, based upon, or relating to the
Asset Agreement and as amended by Smith letter dated August 22, 1996.
c. Non-Admission of Liability. This Termination Agreement and the
releases and other terms provided for herein are made, executed,
given and accepted as a part of a compromise and resolution of
disputed claims. No provision(s) of the Termination Agreement, nor
the position herein, shall be excused or deemed to be evidence of an
admission of any fact, matter, thing or liability of any kind to any
other party. Each of the parties hereto denies any liability of any
kind to the other party for any purpose, and this Termination
Agreement is made solely and entirely as a compromise and for the
purpose of fully and finally resolving the disputed matters referred
to herein. Neither the Termination Agreement nor any term thereof
shall be offered or received as evidence for any proceeding in any
form as an admission of any liability or wrongdoing on the part of
any of the parties hereto.
d. No Assignment. Each party represents and warrants that there has been
no assignment or other transfer to any other person, firm or
corporation in any manner, including by way of subrogation or
operation of law or otherwise, of all or any portion of any claim,
demand, right, action or claim for relief that it had, has or might
have arising out of the matters released in the Termination
Agreement, nor of all or any portion of any claim, suit, recovery or
settlement to which it may be settled, in the event that any claim,
demand or suit should be made or instituted against a party because
of any such purported assignment, subrogation or transfer, each party
agrees to indemnify and hold the other party harmless against such
claims, demand, or suit, together with any costs,
Page 3 of 4
<PAGE> 4
expenses and attorneys' fees incurred by the other party as a result of any
person's assertion of any such assignment or transfer.
7. Smith Technology corporation has entered into this Agreement solely for the
purpose of participating as a party to the extent of the waiver of claims
provided the parties herein and for the purpose of acknowledging the offsets
and credits agreed to herein and to the extent of guarantee agreements as
provided in Article 5.16 of the Asset Agreement.
This Agreement is effective as of the date of the last party to sign.
Date: 4/14/97 NEI OF PENNSYLVANIA, INC.
------- By: /s/ John Gaspari
----------------
Its: President
----------------
Date: 4/14/97 NYTEST ENVIRONMENTAL INC.
------- By: /s/ John Gaspari
----------------
Its: President & CEO
----------------
Date: 4/11/97 BCM ENGINEERS INC.
------- By: /s/ Robert Swaverly
-------------------
Its: Vice President
----------------
Date: 4/11/97 SMITH TECHNOLOGY CORPORATION
------- By: /s/ William D. Nelson
---------------------
Its: Vice President
----------------
Page 4 of 4
