Cambridge Environmental Completes Transaction With Soiltech.

CALGARY, Alberta--(BUSINESS WIRE)--May 2, 1996-- (VSE: CVY NASDAQ: CNVSF ) CAMBRIDGE ENVIRONMENTAL SYSTEMS INC. announced today that it has completed a transaction with Soiltech Environmental Systems Canada Inc. which has resulted in a new cash equity investment in the Company of $3,250,000. The Company also completed a series of other transactions which will reduce the Company's existing debt by $2,835,243. All of these initiatives have received regulatory and shareholder approval.

The Soiltech transaction involves the issuance of 10,891,965 units of the Company for aggregate gross proceeds of $3,250,000. Two types of units were placed by the Company. Each unit of the first type ("Undiscounted Units") consists of one common share in the capital of the Company and one-half of one purchase warrant. Each full warrant will entitle the holder to purchase one common share of the Company at a purchase price of $0.30 per share, if the warrant is exercised within six months from the date of completion of the private placement and at a price of $0.50 per share, if the warrant is exercised after that six month period. The warrants will expire on the date that is twelve months from the date of completion of the private placement.

2,333,333 of the 10,891,965 units to be placed by the Company will be Undiscounted Units. Each unit of the second type ("Discounted Units") will consist of one common share of the Company and one full share purchase warrant. Each warrant will entitle the holder to purchase one common share in the capital of the Company at a purchase price of $0.20 per share, if the warrant is exercised within six months from the date of completion of the private placement and at a price of $0.50 per share if such warrant is exercised after that six month period. The warrants will expire on the date that is twelve months from the date of completion of the private placement. 8,558,632 of the 10,891,965 units placed by the Corporation are Discounted Units.

The Company has also entered into agreements with a number of its trade creditors with respect to the issuance of securities in settlement of outstanding indebtedness. $780,115 of existing debts were comprised in this manner. The agreements include two settlement mechanisms which were accepted by trade creditors at their option. Under the first option, trade creditors receive, for each $1.00 of outstanding indebtedness, $0.20 cash plus one unit of the Company. Under the second option, trade creditors receive 3.3 units of the company for each $1.00 of outstanding indebtedness. Each unit consists of one common share of the Company and one-half of one purchase warrant. Each full warrant will entitle the holder to purchase one common share of the Company at a price of $0.30 per share, if this warrant is exercised within six months from the date of completion of the private placement, and at a price of $0.50 per share, if this warrant is exercised after that six month period. The warrants will expire on April 28, 1997. A total of 2,044,283 will be issued in connection with these transactions.

The Company has also completed a transaction with the former shareholders of Skimmer Oil Separators Ltd., a wholly-owned subsidiary of the Company. The consolidated balance sheet of the Company reflects obligations to the former Skimmer shareholders in the aggregate amount of $1,402,000. Under the compromise agreement, the Company paid $100,000 cash to the former Skimmer shareholders and issued to such shareholders 666,667 units of the Company, those units to be identical to the units to be private placed with the trade creditors as described above.

Soiltech and Cambridge also completed agreements with respect to a number of shareholders who have made advances to the Company in the aggregate gross amount of $653,128. Soiltech has purchased the receivables owing to the various shareholders, and the Company has repaid those advances through the issuance of units on the basis of one unit for each $0.30 of indebtedness. The Company has distributed 2,177,095 units in satisfaction of this indebtedness. Each unit is identical to the units to be distributed to the trade creditors as described above.

The Company, which operates a heavy oil waste elimination and resource recovery facility at Marwayne, Alberta, in the heart of the Canadian heavy oil patch, is now in a position to efficiently pursue its business plans. The Company has developed and uses its own proprietary systems for recovering valuable resources and reducing the cost of waste disposal for its customers in the heavy oil production business. The initial focus of the Company is to complete the installation of processing facilities in time to take advantage of the strong market demand for waste elimination services during the summer season of 1996.

THE VANCOUVER STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE CONTENTS OF THIS NEWS RELEASE.

CONTACT: Cambridge Environmental Systems Inc.

Frank W. King

President and Chief Executive Officer

403/974-0220

or

Soiltech Environmental Systems Inc.

Jonathan Bianco

Director

212/808-3061