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EXHIBIT 2.03
May 22, 1997
Specialty Chemical Resources, Inc.
0000 Xxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Attn: President
RE: CLOSING LETTER IN CONNECTION WITH THE SALE OF SUBSTANTIALLY ALL OF THE
NON-REAL ESTATE ASSETS OF HYSAN CORPORATION TO SPECIALTY CHEMICAL
RESOURCES, INC.
Dear Gentlemen:
Reference is made to that certain Asset Purchase Agreement dated May 22, 1997
(the "Purchase Agreement") between Hysan Corporation ("Seller") and Specialty
Chemical Resources, Inc. ("Buyer"). All capitalized terms not otherwise defined
herein shall have the meaning set forth in the Purchase Agreement. Buyer and
Seller hereby agree as follows:
1. Seller has introduced Buyer to the lessors of those certain equipment
leases which are being assigned to and assumed by Buyer as part of the
Assumed Liabilities. However, notwithstanding anything to the contrary
contained in Section 2.1.3, or elsewhere, in the Purchase Agreement,
Seller makes no representation or warranty as to whether all necessary
authorizations, consents, waivers and approvals of such lessors to the
assignment of such equipment leases have been obtained. Buyer shall
indemnify and hold Seller harmless as to any matter or claims made
against Seller in respect to or arising out of the said equipment
leases except for obligations of Seller arising prior to Closing.
2. Notwithstanding anything in Section 3.1 of, or elsewhere in, the
Purchase Agreement to the contrary, following the Closing, Seller
shall have the right, for such period of time as Seller deems
necessary, to sell, transfer, assign or otherwise dispose of any and
all currently existing Hysan label finished goods inventory and raw
materials inventory of Seller which is not included in the Acquired
Assets as part of the transaction contemplated by the Purchase
Agreement.
3. Buyer and Seller agree that the phrase "fair proportion to be
determined" of Seller's property (real and personal) taxes, utility
costs and security expenses as used in the second sentence of Section
9.3 of the Purchase Agreement shall mean fifty percent (50%) of such
property taxes,
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Specialty Chemical Resources, Inc.
May 22, 1997
Page 2
utility costs and security expenses. In addition, Buyer agrees to
install and pay for a separate telephone line for the use of it
employees, agents, suppliers and affiliates during the period that any
part or all of the Acquired Assets are stored on Seller's premises
pursuant to Section 9.3 of the Purchase Agreement.
4. There shall be inserted after the second sentence in Section 1.3(b) the
following language and the Purchase Agreement shall be deemed amended
by such addition:
"Qualified Inventory also shall not include, however, inventory that,
prior to Closing, is not saleable to existing customers of Seller or is
otherwise obsolete, as a result of label changes, changes in specific
product specifications or such inventory which is specific to a
customer of Seller who has indicated to Seller that such customer no
longer intends to purchase such product."
5. The Closing Purchase Price, as that term is defined in the Purchase
Agreement is $6,352,450.00.
If the foregoing accurately sets forth our agreement, please so signify by
signing this letter in the space provided below and returning it to Seller.
Very truly yours,
HYSAN CORPORATION
By:/s/ Xxxxx X. Xxxxxxxxxxx
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Title: President
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Accepted and agreed to this
22nd day of May, 1997
SPECIALTY CHEMICAL RESOURCES, INC.
By: /s/ Xxxxx Xxxx
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Title: Vice President
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HYSAN-ASI
ASSET PURCHASE
PAYMENT DUE AT CLOSING
COMPONENT OF VALUATION AMOUNT
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Accounts Receivable
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Receivables Balance as of 5/21/97 1,880,910
Inventory
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Perpetual Inventory as of 5/21/97 2,276,980
Increase for Labor & Overhead Allocation as of 5/22/97 __________
Increase for Inbound Freight Allocation as of 5/22/97 38,356
Increase for Labels and Supplies as of 4/30/97 359,000
Furniture, Fixtures, and Equipment
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Net book value as of 4/30/97 1,309,702
EPA Registration Expenses
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Net book value as of 4/30/97 156,220
Intangibles
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Value of all intangibles as of 5/22/97 250,000
Total 6,352,450
Less Escrow (500,000)
Less Deposit and Interest (101,265)
Net Payment 5,751,185
