-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IW5lzKhGBxNQ0pOvfmpD34MaZD879gvRSEbaCbb3KcAlNl1pMw+fzcB3kBGalAfW JSgjpmWPRdCPbWhuoe6WCQ== 0000950152-99-001415.txt : 19990301 0000950152-99-001415.hdr.sgml : 19990301 ACCESSION NUMBER: 0000950152-99-001415 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19990226 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SPECIALTY CHEMICAL RESOURCES INC CENTRAL INDEX KEY: 0000703645 STANDARD INDUSTRIAL CLASSIFICATION: SPECIALTY CLEANING, POLISHING AND SANITATION PREPARATIONS [2842] IRS NUMBER: 341366838 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-34043 FILM NUMBER: 99552589 BUSINESS ADDRESS: STREET 1: 9055 FREEWAY DR CITY: MACEDONIA STATE: OH ZIP: 44056 BUSINESS PHONE: 2164681380 MAIL ADDRESS: STREET 1: 9055 FREEWAY DRIVE CITY: MACEDONIA STATE: OH ZIP: 44056 FORMER COMPANY: FORMER CONFORMED NAME: MOMENTUM INC DATE OF NAME CHANGE: 19920105 FORMER COMPANY: FORMER CONFORMED NAME: ELECTRONIC THEATRE RESTAURANTS CORP DATE OF NAME CHANGE: 19870120 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ROTH EDWIN M CENTRAL INDEX KEY: 0000946793 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 9100 VALLEY VIEW RD CITY: MACEDONIA STATE: OH ZIP: 44056 BUSINESS PHONE: 2164681380 MAIL ADDRESS: STREET 1: 9100 VALLEY VIEW RD CITY: MACEDONIA STATE: OH ZIP: 44056 SC 13D/A 1 SPECIALTY CHEMICAL RESOURCES--SCHEDULE 13D/AM.#5 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ------------------ 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. - ------------------------------------------------------------------------------- (NAME OF ISSUER) Common Stock, $.10 par value - ------------------------------------------------------------------------------- (TITLE OF CLASS OF SECURITIES) 847 487 20 4 - ------------------------------------------------------------------------------- (CUSIP NUMBER) Edwin M. Roth 9055 S. Freeway Drive Macedonia, Ohio 44056 (330) 468-1380 - ------------------------------------------------------------------------------- (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS) February 11, 1998 - ------------------------------------------------------------------------------- (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 [ ]. - ------------------- 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). 2 - ----------------------------------------------------------------------- CUSIP NO. 847 487 20 4 13D PAGE 2 OF 7 PAGES - ----------------------------------------------------------------------- - ----------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Edwin M. Roth - ----------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - ----------------------------------------------------------------------- 3 SEC USE ONLY - ----------------------------------------------------------------------- 4 SOURCE OF FUNDS* 00 - ----------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - ----------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A. - ----------------------------------------------------------------------- 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 - ----------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,563,561 - ----------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 30.7% - ----------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - ----------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! 3 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. 4 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 - -------------------- 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. 5 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 6 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. 7 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 ----------------------------------- Edwin M. Roth EX-99.1 2 EXHIBIT 99.1 1 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. 2 (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 2 3 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 3 4 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 EX-99.2 3 EXHIBIT 99.2 1 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. 2 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 -----END PRIVACY-ENHANCED MESSAGE-----