Item 1.01. Entry Into a Material Definitive Agreement.
On March 30, 2017, Empire Resources, Inc.,
a Delaware corporation (the “Company”), Ta Chen Stainless Pipe Co., Ltd., a Taiwan corporation (“Parent”),
and Ta Chen Investment Corporation., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), entered
into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which Merger Sub will commence a tender
offer (the “Offer”) to purchase all outstanding shares of common stock of the Company, par value $0.01 per share (the
“Common Stock”), at a price of $7.00 per share of Common Stock (the “Offer Price”), subject to any required
withholding of taxes, net to the selling stockholder in cash without interest. As soon as practicable following acceptance for
payment of the shares of Common Stock pursuant to the Offer, Merger Sub will be merged with and into the Company, on the terms
and subject to the conditions set forth in the Merger Agreement (the “Merger”), with the Merger to be effected pursuant
to Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”), with the Company surviving
the Merger as a wholly owned subsidiary of Parent. At the effective time of the Merger (the “Effective Time”), each
share of Common Stock not purchased in the Offer (other than shares of Common Stock for which the holder thereof has properly demanded
the appraisal of such shares in accordance with, and has complied in all respects with, the DGCL) will be converted into the right
to receive an amount, in cash and without interest, equal to the Offer Price and each option to acquire shares of Common Stock
will be converted into the right to receive the difference between the Offer Price and the exercise price of the stock option.
The board of directors of the Company (the
“Board”) unanimously approved the Merger Agreement and the transactions contemplated therein, including the Offer and
the Merger. The Board intends to file a Solicitation/ Recommendation Statement on Schedule 14D-9 with the U.S. Securities
and Exchange Commission (“SEC”) recommending that holders of Common Stock tender their shares of Common Stock in the
Offer.
Completion of the Offer is subject
to various conditions, including that a number of shares of Common Stock equal to at least a majority of the outstanding
shares of Common Stock on a fully diluted basis are validly tendered and not withdrawn prior to the expiration of the Offer.
Nathan and Sandra Kahn, Chief Executive Officer and Vice president and Chief Financial Officer, respectively, who jointly
own approximately 46.3% of the outstanding shares of Common Stock, have agreed to tender their shares (subject to the right
to contribute up to approximately 1% of the outstanding shares to charity). Parent and Merger Sub currently own approximately
5% of the outstanding shares of Common Stock. The Offer will expire on the twentieth business day following the commencement
of the Offer, unless extended in accordance with the terms of the Offer, the Merger Agreement and the applicable rules
and regulations of the SEC. The consummation of the Offer is subject to certain other customary conditions, including the
absence of any Company Material Adverse Effect (as defined in the Merger Agreement). The Offer is not subject to a
financing condition.
Concurrent with the execution of the Merger
Agreement, Merger Sub deposited $15,000,000 (the “Escrow Funds”) with JPMorgan Chase Bank, NA, as escrow agent.
The Escrow Funds will be used for the payment for shares in the Offer and the Merger or, in the event that Parent or Merger Sub
has any liabilities under the Merger Agreement, including for breaches hereof, the Escrow Funds shall be available for payment
of those liabilities or to meet their obligations under an order of specific performance.
The Merger Agreement includes various representations,
warranties and covenants of the parties customary for a transaction of this nature. Until the earlier of the termination of the
Merger Agreement and the Effective Time, the Company has agreed, among other things, to operate its business in the ordinary course
and has agreed to certain other operating covenants, as set forth more fully in the Merger Agreement.
The Company is subject to a “no-shop”
restriction on its ability to solicit alternative acquisition proposals, and to provide information to and engage in discussions
with third parties, subject to customary exceptions intended to allow the Board to fulfill its fiduciary duties. Prior to the consummation
of the Offer, the Company may terminate the Merger Agreement to enter into a definitive agreement with respect to a Superior Proposal
(as defined in the Merger Agreement), subject to compliance with certain terms and conditions in the Merger Agreement, including
the payment of a termination fee of $1 million.
The foregoing summary of the material terms
of the Merger Agreement is not complete and is qualified in its entirety by reference to the Merger Agreement, which is attached
hereto as Exhibit 2.1 and is incorporated herein by reference.
The representations, warranties and covenants
of the parties contained in the Merger Agreement have been made solely for the benefit of such parties. In addition, such representations,
warranties and covenants (i) have been made only for purposes of the Merger Agreement, (ii) have been qualified by confidential
disclosures made by the parties to each other in connection with the Merger Agreement, (iii) are subject to materiality qualifications
contained in the Merger Agreement which may differ from what may be viewed as material by investors, (iv) were made only as
of the date of the Merger Agreement or such other date as is specified in the Merger Agreement and (v) have been included
in the Merger Agreement for the purpose of allocating risk between the contracting parties rather than establishing matters as
facts. Accordingly, the Merger Agreement is included with this filing only to provide investors with information regarding the
terms of the Merger Agreement, and not to provide investors with any other factual information regarding the parties or their respective
businesses. Investors should not rely on the representations, warranties or covenants, or any descriptions thereof, as characterizations
of the actual state of facts or condition of the parties or any of their respective subsidiaries or affiliates. Moreover, information
concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent
information may or may not be fully reflected in the parties’ public disclosures. The Merger Agreement should not be read
alone, but should instead be read in conjunction with the other information regarding the parties, the Offer and the Merger that
is or will be contained in, or incorporated by reference into, a tender offer statement on Schedule TO, including an offer to purchase,
a letter of transmittal and related documents, that will be filed with the SEC by Merger Sub and Parent and a Solicitation/Recommendation
Statement on Schedule 14D-9 that will be filed with the SEC by the Company, and the other documents that the parties will file,
with the SEC.