LIQUIDATION UPDATE – FINAL NOTICE

April 9, 2008

 

Company Name

Address

City, State  Zip

 

Ladies and Gentlemen:              Re:  Final Notice of Repayment Proposal

 

We are writing to you again to propose a payment plan to settle amounts PharmChem’s records show owing to you.  We wrote to you on September 24, 2007 and on December 18, 2007, but did not receive a response.

 

This will be PharmChem’s final offer to settle its indebtedness to you as PharmChem expects to conclude its voluntary liquidation by May 31, 2008.  There will be no further offers of settlement after that date. 

 

By way of background, we were forced to exit the laboratory-based drug testing business in September of 2004.  At that time, we laid off nearly all of our employees, closed our lab and began the process of a voluntary liquidation.  On November 16, 2004, the shareholders of the Company adopted a plan to voluntarily liquidate assets, certain liabilities and wind up its affairs.

 

Responses received from our creditors following the letters sent to all creditors (mentioned above) dated September 24 and December 18, 2007, were all affirmative in that those responding agreed to our settlement offer of 12 cents on each dollar of indebtedness.  Checks have been processed and mailed to those creditors accepting our offer. 

 

During our liquidation process, there have essentially been two options.  One was to file for bankruptcy.  Under this option, estimated fees incurred in connection with the collection of receivables, and fees of the bankruptcy would leave little or no cash available for distribution to creditors.  The second option is to pay all creditors a percentage of all amounts due them.

 

Please note that any lawsuits filed against the Company will jeopardize settlement payments proposed herein.

 

As of this date, PharmChem’s balance sheet is as follows:

The Company expects to have sufficient cash to meet the repayment of 12 cents per dollar owed through May 31, 2008.

 

I am prepared to meet with you or your representative to go over PharmChem’s financial information to verify its assets and liabilities.

 

Our records show PharmChem’s indebtedness to you is $        which would result in a settlement payment of $      .

 

If you agree, please so indicate by completing the lower portion below.  Also enclosed is a release (that is a condition of payment by PharmChem) which is to be signed and returned to us as well.  If both the letter and the release are returned to us by April 30, 2008, payment would be made within fifteen (15) days.

 

If you do not agree with our records of amounts owing to you, we will attempt to reconcile the differences but this will delay payment to you.

 

As mentioned earlier, the Company expects to wind up and finalize its liquidation plan by May 31, 2008.  Those creditors who do not respond by that date most likely will not be eligible to receive any payment from PharmChem.

 

The Company urges our creditors to accept this Final Settlement Offer and to return this letter and release by April 30, 2008.  You may fax it to us at (817) 590-4304. 

 

For your information, our attorneys in this matter are:  Terrie DePratt Khoshbin and Sander Esserman of Stutzman, Bromberg, Esserman & Plifka, 2323 Bryan Street, #2200, Dallas, Texas 75201.  You can contact them if you have any questions, but such action will only add to the expense of the Company.  Please be advised that as attorneys for PharmChem, they cannot provide you with legal advice.  Please do not call the attorneys regarding claim reconciliation, as all claim amounts are kept by PharmChem.

 

Inquiries to the Company can be mailed, e-mailed or faxed to the addresses or number on page 1.

 

Thank you for your help and patience in this matter.

 

                                                         * * * * * * * * * * * * * * * * * * * * * *

                                                  ACKNOWLEDGEMENT AND AGREEMENT

 

 

I (WE) AGREE TO THE FOREGOING

 

_____________________________                                                           _____________________

Name of Creditor/Vendor (Printed)         Authorized Signer (Printed)                  Title

 

                                                                                                                                                              

                  Date                                        Authorized Signature                      Federal Tax I.D. Number

CLAIMANT:                                                                        CLAIM AMOUNT: $                        

                                                                                               SETTLEMENT AMOUNT: $

                                                                                                                                                     

 

PHARMCHEM, INC.

 

ACKNOWLEDGMENT, RELEASE AND INDEMNITY AGREEMENT

 

      WHEREAS, the undersigned claimant, or representative of such claimant, (“Claimant”) claims PharmChem, Inc. (“PharmChem”) owes Claimant a sum certain for good or services provided to PharmChem; and

 

      WHEREAS, Claimant acknowledges and agrees that the above written Claim Amount represents the sum owed to Claimant; and

 

      WHEREAS, Claimant has agreed to accept from PharmChem a payment of twelve percent (12%) of such Claim Amount as full and final payment on such Claim Amount;

 

      NOW THEREFORE, Claimant agrees as follows:

 

      Claimant, for itself and its employees, agents, officers, directors, shareholders, successors, attorneys, and assigns, hereby fully and finally RELEASES, ACQUITS and FOREVER DISCHARGES PharmChem and its employees, agents, officers, directors, shareholders, successors, attorneys, and assigns, from any and all claims, damages, defenses, demands, actions and causes of action of whatsoever nature, whether in contract or in tort, by statute or otherwise, known or unknown, suspected or unsuspected, existing as of the Effective Date of this Agreement.

 

      Claimant further agrees to indemnify PharmChem from any and all lawful claims, demands, damages, debts, obligations, liabilities, liens or charges of any character brought by individuals or entities claiming by, through, or under Claimant.

 

      Claimant understands, represents and warrants this Release to be a full compromise of a claim and not an admission of liability by PharmChem.  Claimant represents that it has read and understands this Release Agreement, has either consulted with legal counsel, or had a full opportunity to consult with legal counsel, and understands that this Release constitutes a final and complete release of PharmChem.  This Agreement contains the entire agreement between the parties and is binding upon the parties hereto.  No oral understandings, statements, or promises or inducements contrary to the terms of this Agreement exist.   This Agreement cannot be changed, modified, amended or terminated orally.  This Agreement shall be governed by the laws of the State of Texas.  This Agreement shall be deemed to be effective as of the date it is executed by Claimant (the “Effective Date”).

 

EXECUTED:_______________, 2008  CLAIMANT:                                                                 

                                                                                       Signature of Claimant or Representative

 

                                                                   Title: