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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13D
INFORMATION TO BE INCLUDED IN STATEMENTS FILED
PURSUANT TO RULE 13D-1(A) AND AMENDMENTS THERETO FILED
PURSUANT TO RULE 13D-2(A)
(AMENDMENT NO. 5)1
Specialty Chemical Resources, Inc.
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(NAME OF ISSUER)
Common Stock, $.10 par value
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(TITLE OF CLASS OF SECURITIES)
847 487 20 4
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(CUSIP NUMBER)
Edwin M. Roth
9055 S. Freeway Drive
Macedonia, Ohio 44056
(330) 468-1380
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
February 11, 1998
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(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [ ].
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1 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 the disclosures provided in a prior cover page.
The information required in 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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CUSIP NO. 847 487 20 4 13D PAGE 2 OF 7 PAGES
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Edwin M. Roth
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
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7 SOLE VOTING POWER 1,552,584
NUMBER OF --------------------------------------------------------
SHARES
BENEFICIALLY 8 SHARED VOTING POWER 10,977
OWNED BY --------------------------------------------------------
EACH
REPORTING 9 SOLE DISPOSITIVE POWER 1,552,584
PERSON WITH --------------------------------------------------------
10 SHARED DISPOSITIVE POWER 10,977
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,563,561
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
30.7%
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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Page 3 of 7 pages
ITEM 1. SECURITY AND ISSUER.
The class of equity securities to which this Schedule relates is the
common stock, par value $.10 per share (the "Common Stock"), of the issuer,
Specialty Chemical Resources, Inc., a Delaware corporation (the "Company" or
"Specialty Chemical" ). The principal executive offices of the Company are
located at 9055 S. Freeway Drive, Macedonia, Ohio 44056.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is filed by Edwin M. Roth, an individual ("Edwin Roth").
Statements with respect to the acquisition of the Common Stock are being
simultaneously filed by CEW Partners ("CEW Partners") and Martin Trust ("Martin
Trust"). CEW Partners, Martin Trust and Edwin Roth are sometimes referred to
herein collectively as the "Reporting Persons."
The Reporting Persons may be deemed to constitute a group as such term
is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Edwin Roth disclaims beneficial ownership of the Common
Stock beneficially owned by the other Reporting Persons.
(a) Edwin Roth
(b) 9055 S. Freeway Drive, Macedonia, Ohio 44056
(c) Edwin Roth is the Chief Executive Officer and Chairman of the
Board of Directors of the Company. The Company is a custom
formulator of specialty chemical products in aerosol
containers primarily for the industrial and automotive
maintenance markets.
(d) During the last five years, Edwin Roth has not been convicted
in a criminal proceeding.
(e) During the last five years, Edwin Roth has not been a party to
a civil proceeding of a judicial or administrative body of
competent jurisdiction resulting in his being 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.
(f) U.S.A.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The Common Stock was issued to Edwin Roth as payment for accrued and
unpaid interest owing to Edwin Roth on a subordinated promissory note issued by
the Company to Edwin Roth. See Item 4.
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Page 4 of 7 pages
ITEM 4. PURPOSE OF TRANSACTION.
The Company and each of Edwin Roth, Martin Trust and CEW Partners
entered into subordinated promissory notes (the "Bridge Notes") dated June 15,
1998 and each in the principal amount of $500,000. The Bridge Notes were to
originally mature on December 15, 1998, but were extended until March 15, 1999
and bear interest at a rate equal to 12% per annum. The Company paid $112,500
aggregate accrued and unpaid interest on the Bridge Notes as of January 31, 1999
to Edwin Roth, Martin Trust and CEW Partners in shares of Common Stock using the
fair market value of the Common Stock. The fair market value was determined to
be $0.30 per share, which was the average closing price of the Common Stock for
the five consecutive trading days prior to the day immediately before the
payment date. Edwin Roth, Martin Trust and CEW Partners each received 125,000
shares of the Company's Common Stock as payment for this accrued and unpaid
interest through January 31, 1999 on the Bridge Notes. Edwin Roth acquired the
Common Stock pursuant to the terms of an Investment Letter dated January 29,
1999.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) See Item 11 of Page 2.
The 1,563,561 shares of Common Stock beneficially owned by
Edwin Roth include (i) 120,000 shares which Mr. Roth has, or
will have within 60 days after the date of this Amendment No.
5, the right to acquire upon the exercise of options, and (ii)
637,790 shares which Mr. Roth has the right to acquire upon
the conversion of the Company's 6% Convertible Subordinated
Notes due 2006 (the "Original Notes") as of the date of this
Amendment No. 5.2
(b) See Items 7, 8, 9 and 10 of Page 2.
Edwin Roth's 1,563,561 shares of Common Stock also include
shares of Common Stock that the Edwin M. Roth Family
Foundation, Inc. (the "Foundation"), a not-for-profit Ohio
corporation of which Edwin Roth is an officer and a trustee,
owns and has the right to acquire. The Foundation owns 6,249
shares of Common Stock and $6,300 principal amount of the
Bridge Notes, which are convertible into 4,728 shares of
Common Stock. Edwin Roth shares voting power with respect to
these shares with Corey B. Roth of 9100 S. Freeway Drive,
Macedonia, Ohio 44056.
Corey Roth is the President, Chief Operating Officer and a
director of the Company. During the last five years, Corey
Roth has not been convicted in a criminal proceeding. During
the last five years, Corey Roth has not been a party to a
civil proceeding of a judicial or administrative body of
competent jurisdiction resulting in
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2 The Original Notes are convertible into shares of Common Stock upon the
earlier of (i) December 31, 2001, (ii) a change of control of the Company or
(iii) a filing pursuant to Rule 14a-11 under the Exchange Act by any person or
group of persons for the purpose of opposing a solicitation by the Company with
respect to the election of directors of the Company.
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Page 5 of 7 pages
his being 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. Corey Roth is
a United States citizen.
(c) None, other than Edwin Roth's acquisition of the Common Stock
as described in Item 4.
(d) Except as described in Item 5(b) above, no other person is
known to 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 Edwin Roth.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
In connection with the issuance of the Original Notes in 1996, the
Reporting Persons entered into a voting agreement dated as of August 30, 1996
(the "Voting Agreement"). In the Voting Agreement, CEW Partners and Martin Trust
have agreed:
(1) to vote their shares of Common Stock in accordance with the
recommendation of Edwin Roth and Corey Roth or, absent such
recommendation, in accordance with the recommendation of
Specialty Chemical's board of directors;
(2) to vote their shares in favor of the nominees for the board
recommended by Edwin Roth and Corey Roth or, absent such
recommendation, for Specialty Chemical's nominees to the
board; and
(3) not to participate in certain activities which could be
related to a change of control of Specialty Chemical.
As part of the Voting Agreement, Edwin Roth and Corey Roth have both
agreed to vote their shares of Common Stock to elect Geoffrey Colvin and Terence
Conklin, as designees of CEW Partners and Martin Trust, to the board, each of
whom have been serving as directors of Specialty Chemical since 1996.
CEW Partners and Martin Trust also agreed not to participate in certain
change of control activities. The prohibited activities are:
(1) conducting, encouraging, soliciting or in any way
participating in, any solicitation of proxies or any election
contest with respect to Specialty Chemical; and
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Page 6 of 7 pages
(2) encouraging, soliciting or in any way participating in the
formation of any "person," as defined in Section 13(d)(3) of
the Exchange Act, which owns, or seeks to acquire beneficial
ownership of Specialty Chemical's voting stock.
The Voting Agreement also restricts the transferability of shares of
Common Stock or Original Notes owned by Edwin Roth and Corey Roth, CEW Partners
and Martin Trust. None of the parties to the Voting Agreement may sell any
shares or Original Notes owned by them without first offering the other parties
an opportunity to purchase the shares or Original Notes on the same terms as
those being offered by a third party. In addition, neither CEW Partners nor
Martin Trust may sell, transfer, assign, grant an option with respect to or
otherwise dispose of, any shares or Original Notes, or enter into any agreement
or understanding with respect to the foregoing, to any person or group (1) which
has filed, or intends to file, a Schedule 13D or 13G with the Commission with
respect to any class of shares of capital stock of Specialty Chemical or (2) is
known by either of them to be accumulating stock on behalf of or acting in
concert with any person or group contemplated by clause (1) above.
However, CEW Partners and Martin Trust may dispose of shares or
Original Notes through:
(1) a tender or exchange offer by a person other than CEW Partners
and Martin Trust or their respective affiliates if such person
has been approved by Edwin Roth and Corey Roth;
(2) a brokers' transaction meeting certain volume limitations;
(3) a bona fide pledge of shares to a major brokerage firm or
financial institution or an affiliate thereof not affiliated
with it for money borrowed;
(4) a transaction involving Specialty Chemical; or
(5) a transaction involving any one of their affiliates or a
tax-exempt charitable institution, provided that the
transferee must agree to be bound by the terms of the Voting
Agreement.
The Voting Agreement expires on the earliest of (1) March 31, 2000, (2)
the date Edwin Roth is no longer the Chief Executive Officer, or (3) the mutual
agreement of the parties.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The subordinated promissory note issued to Edwin Roth as described in
Item 4 is filed as Exhibit 99.1 hereto and incorporated herein.
The Investment Letter, dated as of January 29, 1999, executed by Edwin
Roth as described in Item 4 is filed as Exhibit 99.2 hereto and incorporated
herein.
The voting agreement among the Reporting Persons dated as of August 30,
1996 and described in Item 6 is incorporated by reference to Exhibit A to
Amendment No. 4 to Schedule 13D filed by Edwin M. Roth.
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Page 7 of 7 pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: February 26, 1999 /s/ EDWIN M. ROTH
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Edwin M. Roth
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EXHIBIT 99.1
[Roth]
SUBORDINATED PROMISSORY NOTE
$500,000.00 June 15, 1998
No. 1 Cleveland, Ohio
FOR VALUE RECEIVED, the undersigned, Specialty Chemical Resources, Inc., a
Delaware corporation ("Maker"), hereby promises to pay to Edwin M. Roth
("Payee") the principal sum of Five Hundred Thousand Dollars ($500,000.00) on
December 15, 1998 together with accrued and unpaid interest thereon. All
principal and interest under this Note shall be payable in lawful currency of
the United States of America, in cash or by check, to Payee at c/o Specialty
Chemical Resources, Inc., 9055 Freeway Drive, Macedonia, Ohio 44056. This Note
shall bear interest, commencing on the date hereof and payable at maturity at a
rate equal to twelve percent (12%) per annum, based on a 360 day year.
All or any part of the outstanding principal and interest due under this Note
may be prepaid at any time without penalty or premium.
Maker hereby waives presentment, demand, notice of dishonor, protest and notice
of nonpayment and protest.
The payment of principal under and interest on this Note is subordinated to the
prior payment in full of all Senior Debt (defined below) and the termination of
all financing arrangements between Maker and the holders of Senior Debt, as
provided herein.
(a) Upon maturity of any Senior Debt by lapse of time, acceleration or
otherwise, then all principal of, premium, if any, and interest on, and
any other amount due pursuant to the terms of the instruments or
agreements creating, relating to or evidencing all such matured Senior
Debt shall first be paid in full before any payment on account of
principal or interest or any other amount due is made upon this Note.
(b) In the event of any insolvency, bankruptcy, liquidation,
reorganization or other similar proceedings, or any receivership
proceedings in connection therewith, relative to Maker or its creditors
or its property, and in the event of any proceedings for voluntary
liquidation, dissolution, or other winding up of Maker, whether or not
involving insolvency or bankruptcy proceedings, then all principal,
premium, if any, and interest due on and any other amount due pursuant
to the terms of the instruments or agreements creating, relating to or
evidencing Senior Debt shall first be paid in full before any payment
on account of principal or interest or any other amount due is made
upon this Note. Except as may otherwise be ordered by a court of
competent jurisdiction, any payment or distribution of any kind or
character, whether in cash, property, stock, or obligations, which may
be payable or deliverable in respect of this Note in any of the
proceedings referred to in the first sentence hereof shall be paid or
delivered directly to the holders of Senior Debt for application in
payment thereof, unless and until all principal and interest on, and
any other amount due in respect of, Senior Debt shall have been paid in
full.
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(c) Maker shall not make any, and the Payee shall not accept or
receive, payment of principal or interest on, or any amounts in respect
of, or purchase or acquire for value (and Payee shall not offer for
sale or otherwise cause Maker to purchase or acquire for value) this
Note if, either immediately before or after any such payment is
received by Payee, an event of default as defined in any indenture,
agreement or instrument creating or evidencing Senior Debt shall exist
or any event which, with the passage of time or the giving of notice or
both, would constitute an event of default as defined in any indenture,
agreement or instrument creating or evidencing Senior Debt shall exist.
Maker shall give prompt written notice to Payee of any default or of
any event which, with the passage of time or the giving of notice or
both, would constitute an event of default, under any Senior Debt or
under any agreement pursuant to which Senior Debt may have been issued,
but failure to give such notice shall not affect the subordination of
this Note to the Senior Debt as provided herein. Should any payment or
distribution be received by Payee prior to the payment in full of all
Senior Debt and termination of all financing arrangements between Maker
and the holders of the Senior Debt, and such payment violates any
provision of this Note, Payee shall receive and hold the same in trust
for the benefit of the holders of the Senior Debt.
(d) The provisions of this Note are for the purpose of defining the
relative rights of the holders of Senior Debt, on the one hand, and
Payee on the other hand, and, as between Maker and Payee, nothing
herein shall impair the obligation of Maker, which is unconditional and
absolute, to pay Payee the principal of and interest on this Note in
accordance with the terms of this Note, nor shall anything herein
prevent Payee from exercising all remedies otherwise permitted by
applicable law upon a default under this Note, subject to the rights
under this Note of holders of Senior Debt in respect of cash, property,
stock or other securities received upon the exercise of such remedies.
(e) Subject to the payment in full of all Senior Debt, Payee shall be
subrogated to the rights of the holders of Senior Debt to receive
payments or distributions of assets of Maker payable or distributable
to the holders of Senior Debt until this Note shall be paid in full
and, as between Maker, its creditors, other than the holders of Senior
Debt, and Payee, no payments or distributions otherwise payable or
deliverable in respect of Payee, but, by virtue of the provisions
hereof, paid or delivered to the holders of Senior Debt, shall be
deemed to be a payment by Maker on account of Senior Debt, and no
payments or distributions paid to Payee, by virtue of the subrogation
herein provided for, shall be deemed to be a payment by Maker on
account of this Note. The holders of the Senior Debt shall be
subrogated to Payee with respect to their claims against Maker and
their rights, liens and security interests, if any, in any of the
Maker's assets and the proceeds thereof until all Senior Debt shall
have been paid and all financing arrangements between Maker and the
Holders of the Senior Debt have been terminated.
(f) No right of any present or future holder of Senior Debt to enforce
subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of
Maker or by any act or failure to act in good faith by any such holder,
or by any noncompliance by Maker with the terms, provisions, and
covenants of any agreement relating to Senior Debt, regardless of any
knowledge thereof any such holder may have or be otherwise
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charged with. Payee authorizes each holder of Senior Debt to (i) change
any terms relating to the Senior Debt or any agreement relating
thereto, (ii) make new loans or extend further credit to Maker, grant
renewals, increases or extensions for time of payment of the Senior
Debt, (iii) take or omit to take any action for the enforcement of, or
waive any rights with respect to, any Senior Debt, and (iv) enter into
such agreements as the holders of the Senior Debt may deem proper
affecting any collateral for the Senior Debt, or exchange, sell,
release, surrender or otherwise deal with such collateral, in each such
case without invalidating or impairing the subordination provided for
herein.
(g) Payee may not exercise any rights or remedies against Maker to
enforce or collect upon this Note or any amounts due in connection with
this Note, take possession of assets of or foreclose upon any such
assets, whether by judicial action or otherwise, unless and until all
of the Senior Debt shall have been fully and finally paid and satisfied
with interest and all financing arrangements between Maker and the
holders of Senior Debt have been terminated; provided, however, that,
subject to the right of the holders of Senior Debt to receive prior
payment in full under the terms hereof, if Maker defaults under this
Note, then Payee may exercise any and all rights and remedies in
respect of such Event of Default, but only after expiration of the
179-day period commencing upon actual receipt by the holder of the
Senior Debt of notice of such a default.
(h) "Senior Debt" means all principal of and interest on, and any other
payment due pursuant to the terms of instruments or agreements
creating, relating to or evidencing Indebtedness (defined below) of
Maker (other this Note), whether outstanding on the date hereof or
thereafter created, incurred, assumed or guaranteed by Maker for money
borrowed from others or in connection with the acquisition by it or any
subsidiary of any other business or entity or of any properties or
assets, and, in each case, all renewals, extensions, refinancings or
refundings thereof, unless the terms of the instrument or agreement
creating, relating to or evidencing such Indebtedness expressly provide
that such Indebtedness is not superior in right of payment to the
payment of principal and interest on this Note. Notwithstanding the
foregoing, Senior Debt shall not include (i) any Indebtedness or
liability for compensation to employees, or for goods or materials
purchased in the ordinary course of business or for services, and (ii)
any Indebtedness of Maker to a subsidiary, direct or indirect, of Maker
for money borrowed or advanced from such subsidiary.
(i) "Indebtedness" means (A) any indebtedness, obligation or liability
(whether matured or unmatured, liquidated or unliquidated, direct or
indirect, absolute or contingent or joint or several) of any person or
entity (i) for or in respect of borrowed money, (ii) evidenced by a
note, debenture or similar instrument (including a purchase money
obligation) given in connection with the acquisition of any property or
assets, including securities, (iii) for the payment of money relating
to any other transaction (including forward sale or purchase
agreements, capitalized lease obligations (but not operating leases)
and conditional sales agreements) having the commercial effect of a
borrowing of money entered into by such person or entity to finance its
operations or capital requirements; or (iv) for the maximum fixed
repurchase price of any equity securities of such person or entity
which by their terms or otherwise are required to be redeemed prior to
the
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maturity of this Note or at the option of the holder thereof; (B) any
liability of others described in the preceding clause (A) which the
person or entity has guaranteed or for which it is otherwise legally
liable; and (C) any deferral, renewal, refinancing, extension or
refunding of, or amendment, modification or supplement to, any
liability of the types referred to in clauses (A) and (B) above, but
shall not include indebtedness or amounts owed (except to banks or
other financing institutions) for compensation to employees, or for
goods or materials purchased, or services utilized, in the ordinary
course of business of any person or entity. For purposes hereof, the
"maximum fixed repurchase price" of any equity securities, which price
is based upon, or measured by, the fair market value of such equity
securities, means, as of any date, the fair market value thereof as
determined in good faith by the Board of Directors of Maker.
(j) Notwithstanding anything to the contrary contained herein, this
Note may be paid and satisfied in full in connection with the
refinancing hereof, whether before, at or after the maturity hereof, on
terms reasonably satisfactory to a majority in principal amount of the
holders of Senior Debt.
This Note is non-transferable prior to its December 15, 1998 maturity date;
provided, however, that the holder hereof may transfer this Note prior to such
date to an affiliate (as defined in the Securities Exchange Act of 1934) of such
holder.
This Note is part of a series of Subordinated Promissory Notes issued by Maker
on the date hereof aggregating One Million Five Hundred Thousand Dollars
($1,500,000) in principal amount (the "Series"). No payment of principal on this
Note shall be made or accepted unless and until a pro rata payment of principal
is made as to all Notes in the Series.
This Note may not be amended or modified unless and until all Notes in the
Series are subject to the same amendment or modification. Any such amendment or
modification requires the written approval of the holder of this Note and all
other Notes in the Series.
This Note shall be governed by and construed in accordance with the laws of
State of Ohio.
SPECIALTY CHEMICAL RESOURCES, INC.
/s/ DAVID SPINK
By: ___________________________________
CFO
Title: ________________________________
4
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EXHIBIT 99.2
INVESTMENT LETTER
Specialty Chemical Resources, Inc.
9055 S. Freeway Drive
Macedonia, OH 44056
Gentlemen:
The undersigned is a holder of shares of common stock, $.10 par value
("Common Stock"), of Specialty Chemical Resources, Inc., a Delaware corporation
(the "Company"). The undersigned will receive additional shares of Common Stock
as payment of the accrued interest as of January 31, 1999 under the Subordinated
Promissory Note dated June 15, 1998, as amended, issued by the Company in favor
of the undersigned.
The undersigned is acquiring the shares of Common Stock (the "Shares")
for the purpose of investment and not with a current view towards the resale or
distribution thereof within the meaning of the Securities Act of 1933, as
amended (the "Act"). The undersigned acknowledges and understands that the
Shares have not been registered under the Act or the securities laws of any
state and must be held indefinitely unless they are subsequently registered
under the Act or an exemption from such registration is available. The
undersigned further acknowledges that the undersigned is fully aware of the
applicable limitations on the resale of the Shares.
The undersigned acknowledges that he has had an opportunity to ask
questions of and receive answers from duly designated representatives of the
Company concerning the Company and the terms and conditions pursuant to which
the Shares will be acquired. The undersigned further acknowledges that he has
been afforded an opportunity to examine such documents and other information
which the undersigned has requested for the purpose of evaluating the
undersigned's acquisition of the Shares.
By reason of the undersigned's knowledge and experience in financial
and business matters in general, and investments in particular, the undersigned
is capable of evaluating the merits and risks of the acquisition of the Shares.
The undersigned's present financial condition is such that the
undersigned is under no present or contemplated future need to dispose of any
portion of the Shares to satisfy any existing or contemplated undertaking, need
or indebtedness.
The undersigned understands that the Company is under no obligation to
register the sale, transfer or other disposition of the Shares by the
undersigned or on behalf of the undersigned under the Act.
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The undersigned also understands that there will be placed on the
certificates for the Shares issued to the undersigned, or any substitutions
therefor, a legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED BY THE
HOLDER NOT WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY
DISTRIBUTION THEREOF WITHIN THE MEANING OF THE SECURITIES ACT OF 1933
AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED
TO THE SATISFACTION OF THE COMPANY."
The undersigned acknowledges that he has carefully reviewed this Letter
Agreement and understands the requirements hereof and the limitations imposed
upon the distribution, sale, transfer or other disposition of the Shares.
Very truly yours,
/s/ EDWIN M. ROTH
---------------------------------
Edwin M. Roth
Accepted as of the 29th day of January, 1999, by
SPECIALTY CHEMICAL RESOURCES, INC.
/s/ DAVID F. SPINK
By: ---------------------------------
David F. Spink
Name: -------------------------------
CFO
Title: ------------------------------
2
