UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported: October 26, 1998)
BCAM INTERNATIONAL, INC.
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(exact name of registrant as specified in its charter)
NEW YORK 0-18109 13-3228375
- ----------------------------- ------------------------ ----------------------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
1800 WALT WHITMAN ROAD, MELVILLE, NEW YORK 11747
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(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: (516) 752-3550
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(Former name or address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
Effective October 26, 1998, BCAM International, Inc. (the "Company"),
pursuant to a Stock Purchase and Restructure Agreement between the Company and
Impleo, LLC. ("Impleo"), sold 56.7% of the outstanding shares of its Drew Shoe
Corporation subsidiary ("Drew") to Impleo in exchange for approximately
$3,780,000 principal amount of the Company's 10%/13% Secured Convertible Notes
(Notes"). Impleo, which initially owned $5,000,000 principal amount of Notes,
purchased the remaining $1,000,000 principal amount (plus accrued interest) of
Notes, thereby making it the sole holder of the Notes. After this transaction,
the remaining principal balance on the Convertible Notes will be approximately
$2,220,000 plus an additional approximately $850,000 of accrued interest as of
October 26, 1998. The Notes are secured by all of the assets of the Company and
are due in April 1999. Impleo now owns approximately 67% of the common stock of
Drew. As a condition of the sale of the Drew shares to, and the redemption of
the Notes from, Impleo, Michael Strauss, Chairman, President and Chief Executive
Officer of BCAM International, Inc. has become the Chief Executive Officer of
Drew Shoe Corporation. Mr. Strauss is obliged to spend no less than 75% of his
time on the business of Drew. Mr. Strauss will continue to serve BCAM
International, Inc. as its Chairman, President and Chief Executive Officer and
has agreed to enter into a new employment agreement with the Company.
BCAM's redemption of approximately $3,780,000 of Notes and cancellation of
certain related warrants will eliminate approximately 6.8 million shares of
potential dilution to the BCAM common shareholders. This includes the
elimination of potential dilution which would result from conversion of the
Notes (approximately 5.5 million shares) and exercise of warrants to purchase
approximately 1.3 million shares of BCAM common stock.
In connection with the Stock Purchase and Restructure Agreement, the Company and
Impleo entered into a Second Amendment to the September 1997 Note Purchase
agreement which eliminates the requirement for Impleo to have representation of
25% or more on the Company's Board of Directors, among other matters. In
addition, the Company has been released from its guarantee of the secured
obligations of Drew to a bank.
The Company, Drew and Impleo have entered into a shareholders agreement relative
to the certain matters including disposition of shares and additional
investments in Drew.
The Company has entered into a separate Purchase and Sale Agreement with Impleo
in which it agreed to promptly submit to its shareholders a proposal to sell the
remaining 33.3% of Drew Shoe Corporation to Impleo in exchange for the
cancellation of the then remaining principal amount of Notes together with
accrued interest thereon (the "Second Sale"). If the BCAM shareholders approve
the proposal to sell the remaining 33.3% of Drew common stock, an aggregate of
approximately 10.75 million potentially dilutive securities will be eliminated.
Impleo is an affiliate of Wexford Management, LLP.
Separately, the Company has reached agreement with Charles G. Schuyler and Frank
Shyjka (the sellers of Drew to the Company in 1997) to: (i) cancel Mr.
Schulyer's employment contract and enter into a consulting agreement, (ii)
cancel approximately $200,000 of notes payable to Messrs. Schuyler and Shyjka,
(iii) forgive certain purchase price adjustments due from Messrs. Schuyler and
Shyjka and the assumption, by Drew, of certain contingent liabilities in
connection with the Ulin & Holland litigation (such litigation is discussed in
Item 3 of Form 10-KSB for the year ended December 31, 1997).
<PAGE>
Item 7. Financial Statements and Exhibits.
(i) Financial Statements:
(a) Pro-Forma Balance Sheet, as of June 30, 1998, and statement of
operations for the six months then ended, of the Company
reflecting the sale of 56.7% of Drew Shoe Corporation.
(ii) Exhibits:
(a) Stock Purchase and Restructuring Agreement between the Company
and Impleo, LLC.
(b) Second Amendment to Note Purchase Agreement between BCAM
International and Impleo, LLC.
(c) Shareholders agreement between the Company, Drew Shoe
Corporation and Impleo, LLC.
(d) Purchase and sale agreement between the Company and Impleo,
LLC
(e) Letter of agreement between the Company and Charles G.
Schuyler and Frank Shyjka.
(f) Release, Cancellation and Discharge of Guarantee Agreement of
BCAM International, Inc. by BankOne, National Association.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BCAM INTERNATIONAL, INC.
By: /s/ Michael Strauss
------------------------------------
Michael Strauss, President
Chairman of the Board and
Chief Executive Officer
Date: November 6, 1998
<PAGE>
The following pro-forma condensed consolidated balance sheet of BCAM
International and subsidiaries (the "Company") reflects the Company's financial
position at June 30, 1998 and pro-forma at that date to reflect the October 1998
sale of 56.7 % of the Company's Drew Shoe Corporation subsidiary in exchange for
the redemption of $3,780,000 of Notes. The pro-forma information is derived from
the unaudited financial statements of the Company at June 30, 1998. This
pro-forma information does not reflect the Second Sale of approximately 33% of
Drew agreed to between the Company and Impleo because such sale is subject to
shareholder approval. This information reflects the sale of 56.7% of Drew as
though it had occurred as of June 30, 1998 and does not reflect the effect of
operating losses since June 30, 1998. Such operating losses are expected to be
significant.
BCAM International, Inc.
Pro-Forma Condensed Consolidated Balance Sheet (Unaudited)
June 30, 1998
<TABLE>
<CAPTION>
Pro-Forma Adjustments
---------------------
Historical Dr. Cr. Pro-Forma
Assets ---------- --- --- ---------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 1,799,000 61,000a 1,488,000
250,000b
Accounts receivable, net 1,832,000 1,832,000a 0
Inventory 6,720,000 6,720,000a 0
Prepaid expenses and other current assets 285,000 235,000a 50,000
Current assets of discontinued operations 161,000 161,000
--------------------------------------------------------------
Total current assets 10,797,000 1,699,000
Property, plant, and equipment, net 3,020,000 3,020,000a 0
Investment in net assets of discontinued Drew Shoe 0 5,288,000a 3,293,000c 1,995,000
operations
Deferred finance costs, net 187,000 250,000b 275,000c 162,000
Other assets 374,000 200,000a 174,000
--------------------------------------------------------------
Total assets $ 14,378,000 4,030,000
==============================================================
Liabilities and shareholders' equity
Current liabilities:
Current portion of long term debt, net of $ 6,819,000 555,000a 128,000c 2,612,000
unamortized debt discount 3,780,000c
Accounts payable 922,000 664,000a 258,000
Accrued expenses and other current liabilities 1,238,000 842,000a 396,000
Current liabilities of discontinued operations 265,000 265,000
including Drew
--------------------------------------------------------------
Total current liabilities 9,244,000 3,531,000
Long term debt and convertible notes, net of current 4,143,000 3,918,000a
maturities 200,000d 25,000
Other non-current liabilities 206,000 202,000a 4,000
Minority interest 599,000 599,000a 0
Shareholders' equity
Common stock 214,000 214,000
Paid-in surplus 29,861,000 29,861,000
Unamortized charge for beneficial debt conversion (1,425,000) 900,000e (525,000)
Deficit (27,565,000) 900,000e 84,000c (28,181,000)
200,000d
--------------------------------------------------------------
1,085,000 1,369,000
Less 763,182 treasury shares (899,000) (899,000)
--------------------------------------------------------------
186,000 470,000
--------------------------------------------------------------
Total liabilities and shareholders' equity $ 14,378,000 4,030,000
==============================================================
</TABLE>
<PAGE>
Notes to Pro-Forma adjustments:
a. To deconsolidate the Drew assets and liabilities.
b. To record the payment of estimated transaction costs.
c. To record the disposition of 56.7% of Drew in exchange for $3,780,000 of
Notes
d. To reflect the disposition of $200,000 of Seller Notes.
e. To write off proportional share of unamortized charge.
<PAGE>
BCAM International, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
Six months ended June 30, 1998
<TABLE>
<CAPTION>
Pro-Forma Adjustments
---------------------
Historical Dr. Cr. Pro-Forma
---------- --- --- ---------
<S> <C> <C> <C> <C>
Revenue
Sales $ 8,065,000 $ 8,065,000a $ 0
License revenue 2,000 2,000
------------ ------------- ---------- ------------
Total 8,067,000 2,000
Cost of revenues 4,534,000 4,534,000a 0
------------ ------------- ---------- ------------
Gross profit 3,533,000 2,000
Selling, general and administrative 3,635,000 2,720,000a 915,000
Charge for compensatory element of
1997 options approved in 1998 858,000 -- 858,000c 0
Research & development 359,000 95,000a 264,000
------------ ------------- ---------- ------------
Income (loss) from operations (1,319,000) (1,177,000)
------------ ------------- ---------- ------------
Other income (expense):
Interest and financing costs (925,000) -- 233,000a (292,000)
400,000b
Charge for beneficial debt conversion (3,084,000) -- 1,942,000b (1,142,000)
------------ ------------- ---------- ------------
Write-off debt discount and financing
costs (1,651,000) -- 1,651,000c 0
Interest income 53,000 21,000a 32,000
------------ ------------- ---------- ------------
Interest and financing costs (5,607,000) 5,000 (1,402,000)
------------ ------------- ---------- ------------
Minority interests (47,000) -- 47,000a 0
------------ ------------- ---------- ------------
Loss from continuing operations $ (6,973,000) $ (2,579,000)
------------ ------------- ---------- ------------
Discontinued operations, including
estimated loss on disposal of
approximately $250,000 in 1998 (803,000) 803,000c 0
------------ ------------- ---------- ------------
Loss before extraordinary item $ (7,776,000) $ (2,579,000)
------------ ------------- ---------- ------------
Extraordinary item - charge for
restructure of debt (552,000) -- 552,000c --
------------ ------------- ---------- ------------
Net Loss $ (8,328,000) $ (2,579,000)
------------ ------------- ---------- ------------
Net loss per share:
Continuing operations $ (0.36) $ (0.14)
Discontinued operations $ (0.04) $ (0.00)
------------ ------------- ---------- ------------
Loss per share before extraordinary $ (0.40) $ (0.14)
Extraordinary item $ (0.03) $ --
------------ ------------- ---------- ------------
Net loss $ (0.43) $ (0.14)
------------ ------------- ---------- ------------
Weighted average number of common
shares outstanding 19,037,000 ,000 19,037,000
============ ============= ========== ============
</TABLE>
Notes to Pro-forma information:
a. To deconsolidate Drew
b. To reflect the reduced interest associated with redemption of 63% of the
Notes.
c. To eliminate non recurring items.
STOCK PURCHASE AND RESTRUCTURING AGREEMENT
STOCK PURCHASE AND RESTRUCTURING AGREEMENT (this "Agreement"), entered
into as of this 23rd day of October, 1998, by and between IMPLEO, LLC, a
Delaware limited liability company (the "Buyer" or "Impleo"), and BCAM
INTERNATIONAL, INC., a New York Corporation, ("BCAM");
W I T N E S S E T H:
WHEREAS, BCAM is the record and beneficial owner of 1538.846 shares of
common stock, without par value, of Drew Shoe Corporation ("Drew"), an Ohio
corporation (the "Drew Common Stock") which represents 90% of the issued and
outstanding shares of Drew Common Stock;
WHEREAS, pursuant to a Note Purchase Agreement dated September 19, 1997
and amended by a First Amendment to said agreement dated April 14, 1998, BCAM
issued to the Buyer, the Buyer purchased a BCAM 10%/13% convertible subordinated
promissory note in the aggregate principal amount of $5,000,000, plus accrued
interest thereon (the "$5 Million Note") and 1,666,667 warrants to purchase an
aggregate of 1,666,667 Shares of common stock of BCAM, $.01 par value per share
("BCAM Common Stock");
WHEREAS, pursuant to a third party transaction, the Buyer will, at the
time of the Closing hereunder acquire, among other things, (a) certain warrants
to purchase 333,333 Shares of BCAM Common Stock (which warrants, together with
the warrants referred to in the previous recital, are hereinafter referred to as
the "Warrants") and (b) certain additional BCAM 10%/13% Convertible Subordinated
Promissory Notes which notes, in the aggregate equal the principal amount of
$1,000,000, plus accrued interest thereon (the "$1 Million Notes," which,
together with the $5 Million Note, is hereinafter collectively referred to as
the "Subject Notes");
WHEREAS, BCAM wishes to transfer to the Buyer 63% of the Drew Common Stock
owned by BCAM in exchange for the cancellation of $3,780,000 of the aggregate
principal amount of the debt evidenced by the Subject Notes, and certain other
good and valuable consideration as more particularly provided for herein; and
WHEREAS, the Buyer desires to purchase from BCAM and BCAM desires to sell
to the Buyer, all upon the terms and subject to the conditions set forth in this
Agreement, 63% of the Drew Common Stock owned by BCAM.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereby agree as follows:
1. ACQUISITION OF THE STOCK.
1.1 Stock Purchase. Subject to the terms and conditions of this
Agreement, on the Closing Date (as such term is hereinafter defined), the Buyer
shall purchase and acquire from
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<PAGE>
BCAM, and BCAM shall sell and transfer to the Buyer, 969.47298 shares of the
Drew Common Stock (such shares being hereinafter collectively referred to as the
"Subject Stock"), for the consideration provided for in Section 2 below. In
furtherance thereof, BCAM shall, on the Closing Date, against delivery of such
consideration in accordance with Section 2 below, deliver to the Buyer the
certificates representing the Subject Stock, duly endorsed for transfer or
accompanied by stock powers executed in blank for transfer.
2. CONSIDERATION/DELIVERIES AT CLOSING.
At the Closing:
2.1 Purchase Price. The Buyer shall effectuate its cancellation of
$3,780,000 of indebtedness evidenced by the Subject Notes by delivering the
Subject Notes to BCAM for cancellation, and BCAM shall evidence its remaining
$3,073,663.90 indebtedness to the Buyer under the Subject Notes ($2,220,000 of
existing principal indebtedness plus $853,663.90 of accrued interest) by
executing and delivering to the Buyer a promissory note in the form attached
hereto as Exhibit A (the "Replacement Note").
2.2 Warrants. Buyer shall effectuate its cancellation of 63% of the
Warrants (1,260,000 Warrants) by delivering to BCAM for cancellation the warrant
certificates representing the Warrants, against delivery by BCAM to Buyer of a
new warrant certificate (in substantially the form of the surrendered warrant
certificates) in the amount of 740,000 Warrants (the "Remaining Warrants").
2.3 Shareholder Agreement. BCAM and the Buyer shall enter into a
Shareholders' Agreement in the form attached hereto as Exhibit B (the
"Shareholders' Agreement").
2.4 Voting Rights. BCAM and the Buyer shall enter into a Second
Amendment to the Note Purchase Agreement dated as of September 19, 1997 and as
amended by the First Amendment to said agreement dated April 14, 1998
(hereinafter collectively referred to as the "Purchase Agreement"), which Second
Amendment shall provide for the partial deletion of Section 4.1 of the Purchase
Agreement, to the extent necessary, to effectuate the Buyer's surrender of its
rights to nominate and/or appoint one-quarter of BCAM's Board of Directors.
2.5 Employment Agreement. BCAM shall cause Drew Shoe to enter into
and deliver an employment agreement with Michael Strauss, an individual and the
present chairman and chief executive officer of BCAM, in a form acceptable to
Impleo (the "Drew Shoe Employment Agreement", the "Drew Shoe Employment
Agreement"). In connection with said employment agreement, BCAM agrees to amend
its current employment agreement with Strauss, which agreement is dated January
1, 1997 (the "BCAM Employment Agreement"), to provide that Strauss' employment
by Drew Shoe, as contemplated by the Drew Shoe Employment Agreement, shall be
permissible under, and shall not be deemed as a breach by Strauss of his
obligations contained in, the BCAM Employment Agreement..
2
<PAGE>
2.6 Purchase and Sale Agreement. The parties shall enter into a
purchase and sale agreement in the form attached hereto as Exhibit C (the
"Purchase and Sale Agreement").
3. REPRESENTATIONS AND WARRANTIES OF BCAM.
In connection with the sale of the Subject Stock to the Buyer, BCAM
hereby represents and warrants to the Buyer as follows:
3.1 Title to the Stock. BCAM is the valid and lawful record and
beneficial owner of all of the Subject Stock, all of which has been duly
authorized and validly issued and is fully paid and non-assessable, and is free
and clear of all pledges, liens, claims, charges, options, calls, encumbrances,
restrictions and assessments whatsoever other than (a) the outstanding pledge
thereof to the Buyer, and (b) restrictions which may be created by operation of
state or federal securities laws. On the Closing Date, the Buyer shall receive
from BCAM good, valid and marketable title to all of the Subject Stock, free and
clear of all pledges, liens, claims, charges, options, calls, encumbrances,
restrictions and assessments whatsoever, other than the above-referenced pledge
and securities law restrictions.
3.2 Valid and Binding Agreement; No Breach. (a) BCAM has full legal
right, power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. BCAM has taken all necessary
corporate action to authorize its execution and delivery of this Agreement, the
Replacement Note, the Remaining Warrants and the Shareholders' Agreement and the
consummation of the transactions contemplated hereby and thereby. This Agreement
and, when executed and delivered by BCAM, the Replacement Note, the Remaining
Warrants and the Shareholders' Agreement, constitutes and will constitute the
legal, valid and binding obligations of BCAM, enforceable against BCAM in
accordance with their respective terms, except to the extent that such
enforceability may be limited by bankruptcy, insolvency, reorganization and
other laws affecting creditors' rights generally, and except that the remedy of
specific performance or similar equitable relief is available only at the
discretion of the court before which enforcement is sought.
(b) Neither the execution and delivery of this Agreement, the
Replacement Note, the Remaining Warrants and the Shareholders' Agreement by
BCAM, nor compliance with the terms and provisions of this Agreement, the
Replacement Note, the Remaining Warrants and the Shareholders' Agreement on the
part of BCAM, will: (i) violate any statute or regulation of any governmental
authority, domestic or foreign, applicable to BCAM; (ii) require the issuance of
any authorization, license, consent or approval of any federal or state
governmental agency, or any other person; or (iii) except for the pledge of the
Subject Stock in favor of the Buyer, conflict with or result in a breach of any
of the terms, conditions or provisions of any judgment, order, injunction,
decree, note, indenture, loan agreement or other agreement or instrument to
which BCAM is a party, or by which BCAM is bound, or constitute a default
thereunder.
3.3 Organization, Good Standing and Qualification. BCAM is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New York,
3
<PAGE>
with full corporate power and authority to own its assets and conduct its
business as owned and conducted on the date hereof.
3.4 Equity Ownership. The Drew Common Stock to be transferred to the
Buyer hereunder constitute not less than 56.7% of the total issued and
outstanding capital stock of Drew Shoe, on a fully diluted basis (after giving
effect to the exercise or conversion of any and all outstanding options,
warrants, convertible securities, subscription rights or other rights to acquire
any capital stock of Drew Shoe). For purposes of this representation and
warranty, Strauss' Options contained in the Drew Shoe Employment Agreement shall
be disregarded.
3.5 Litigation. There is no suit, action, arbitration, or legal,
administrative or other proceeding, or governmental investigation pending or, to
the best knowledge of BCAM, threatened against BCAM which would in any manner
prohibit, restrain, impair or otherwise adversely affect the ability of BCAM to
convey free and clear title to the Subject Stock in accordance with this
Agreement.
3.6 Financial Statements. Attached hereto as Exhibit 3.6 is Drew
Shoe's Balance Sheet as of August 31, 1998 and the Statement of Operations for
the month and eight months then ended. Other than misstatements relating to the
overstatement of inventories by no more than $200,000 and the failure to record
a contingent liability for that certain law suit captioned Ulin & Holland v.
Drew Shoe Corporation, (U.S. District Court- Massachusetts, Docket # GA98-10109
RCL), these Financial Statements have all been prepared in accordance with
Generally Accepted Accounting Principals, consistently applied, and presents
fairly the financial position of Drew Shoe at August 31, 1998 and its income for
the eight months then ended. As of August 31, 1998 Drew Shoe has neither
declared nor paid a dividend, or entered into any related party transactions
with an "Affiliate" (other than with BCAM in the ordinary course of business and
in accordance with past customs), as that term is defined in Federal Securities
Laws or entered into any transaction outside of its ordinary course of business.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
In connection with the Buyer's purchase of the Subject Stock from
BCAM, the Buyer hereby represents and warrants to BCAM as follows:
4.1 Valid and Binding Agreement. This Agreement and, when executed
and delivered by the Buyer, the Shareholders' Agreement, constitutes and will
constitute the legal, valid and binding obligations of the Buyer, enforceable
against the Buyer in accordance with their respective terms, except to the
extent that such enforceability may be limited by bankruptcy, insolvency,
reorganization and other laws affecting creditors' rights generally, and except
that the remedy of specific performance or similar equitable relief is available
only at the discretion of the court before which enforcement is sought. The
Buyer has taken all necessary company action to authorize its execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby.
4
<PAGE>
4.2 Organization, Good Standing and Qualification. The Buyer is a
limited liability company duly organized, validly existing and in good standing
under the laws of the State of Delaware, with full power and authority to own
its assets and conduct its business as owned and conducted on the date hereof.
4.3 No Breach of Statute or Contract. Neither the execution and
delivery of this Agreement by the Buyer, nor compliance with the terms and
provisions of this Agreement on the part of the Buyer, will: (a) violate any
statute or regulation of any governmental authority, domestic or foreign,
affecting the Buyer; (b) require the issuance of any authorization, license,
consent or approval of any federal or state governmental agency; or (c) conflict
with or result in a breach of any of the terms, conditions or provisions of any
judgment, order, injunction, decree, note, indenture, loan agreement or other
agreement or instrument to which the Buyer is a party, or by which the Buyer is
bound, or constitute a default thereunder.
4.4 Investment. The Buyer is purchasing the Subject Stock for its
own account for investment, and not with a view to the resale or distribution
thereof in violation of any applicable securities laws.
4.5 Disclaimer. The Buyer acknowledges that BCAM has not made any
representations or warranties relating to the value of the Drew Common Stock
transferred herein or the Business prospects of Drew.
5. BCAM'S OBLIGATIONS BEFORE THE CLOSING DATE.
BCAM covenants and agrees that, between the date hereof and the
Closing Date:
5.1 Access to Information. BCAM, as the 90% shareholder of Drew
Shoe, shall cause, to the fullest extent permissible by law, Drew Shoe to permit
the Buyer and its counsel, accountants and other representatives, upon
reasonable advance notice to Drew Shoe, during normal business hours and without
undue disruption of the business of the Drew Shoe, to have reasonable access to
all assets, properties, books, accounts, records, contracts, documents and
information relating to Drew Shoe, and BCAM shall cooperate with the Buyer and
its representatives in all respects in connection with all due diligence which
the Buyer and its representatives may undertake in connection with the
transactions contemplated by this Agreement.
5.2 Conduct of Business in Normal Course. BCAM, as the 90%
shareholder of Drew Shoe shall have caused Drew Shoe to carry on their business
activities in substantially the same manner as heretofore conducted, and not to
make or institute any unusual or novel methods of service, sale, purchase,
lease, management, accounting or operation that will vary materially from those
methods used by such company as of the date hereof, without in each instance
obtaining the prior written consent of the Buyer.
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<PAGE>
5.3 Corporate Matters. BCAM, as the 90% shareholder of Drew Shoe, to
the fullest extent permissible by law, shall use its best efforts not to allow
Drew Shoe to:
(a) amend its Certificate of Incorporation or By-Laws;
(b) issue any shares of such company's capital stock;
(c) issue or create any warrants, obligations, subscriptions,
options, convertible securities or other commitments under which any additional
shares of such company's capital stock might be directly or indirectly issued;
(d) amend, cancel or modify any material contract or enter
into any material new agreement, commitment or transaction except, in each
instance, in the ordinary course of business;
(e) pay, grant or authorize any salary increases or bonuses
except in the ordinary course of business and consistent with past practice, or
enter into any employment, consulting or management agreements;
(f) modify in any material respect any material agreement to
which such company is a party or by which it may be bound, except in the
ordinary course of business;
(g) make any change in such company's management personnel;
(h) except pursuant to commitments in effect on the date
hereof, make any capital expenditure(s) or commitment(s), whether by means of
purchase, lease or otherwise, or any operating lease commitment(s), in excess of
$5,000 in the aggregate;
(i) sell, assign or dispose of any capital asset(s) with a net
book value in excess of $5,000 as to any one item or $10,000 in the aggregate;
(j) materially change its method of collection of accounts or
notes receivable, accelerate or slow its payment of accounts payable, or prepay
any of its obligations or liabilities, other than prepayments to take advantage
of trade discounts not otherwise inconsistent with or in excess of historical
prepayment practices;
(k) declare, pay, set aside or make any dividend(s) or other
distribution(s) of cash or other property, or redeem any outstanding shares of
either company's capital stock;
(l) incur any liability or indebtedness except, in each
instance, in the ordinary course of business;
(m) subject any of the assets or properties of either company
to any liens or encumbrances not in existence on the date hereof;
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<PAGE>
(n) forgive any liability or indebtedness owed to either
company by BCAM or any of its affiliates; or
(o) agree to do, or take any action in furtherance of, any of
the foregoing.
To the extent that any one or more of the events described in Section 5.3 (a)
through (o) shall occur and BCAM, its officers or directors are or become aware
of such occurrence, BCAM shall immediately notify the Buyer of such occurrence.
5.4 Absence of Litigation. No action, suit or proceeding by or
before any court or any governmental body or authority, against BCAM or
pertaining to the transactions contemplated by this Agreement or their
consummation, shall be pending or threatened on the Closing Date, which action,
suit or proceeding would, if determined adversely, prohibit, restrain or impair
the consummation of the transactions contemplated by this Agreement, or have a
material adverse effect on Drew Shoe, its business or any material portion of
its assets.
5.5 Consents and Releases. All necessary disclosures to and
agreements and consents of (a) any parties to any material contracts and/or any
licensing authorities which are material to Drew Shoe's business and (b) any
governmental authorities or agencies to the extent required in connection with
the transactions contemplated by this Agreement, shall have been obtained and
true and complete copies thereof delivered to the Buyer. Without limitation of
the foregoing, the Buyer shall have received the written consent of Bank One,
National Association, a creditor and secured party of Drew Shoe, with respect to
the transactions contemplated by this Agreement, and the transfer of the Subject
Stock to the Buyer hereunder.
5.6 Proceedings and Instruments Satisfactory. All proceedings,
corporate or other, to be taken in connection with the transactions contemplated
by this Agreement, and all documents incidental thereto, shall be reasonably
satisfactory in form and substance to the Buyer and its counsel.
6. CONDITIONS PRECEDENT TO THE BUYER'S PERFORMANCE.
The obligations of the Buyer to consummate the transactions
contemplated by this Agreement are further subject to the satisfaction, at or
before the Closing Date, of all of the following conditions, any one or more of
which may be waived in writing by the Buyer:
6.1 Accuracy of Representations and Warranties. All representations
and warranties made by BCAM in this Agreement and/or in any written statement
delivered to the Buyer under this Agreement shall be true and correct in all
respects on and as of the Closing Date as though such representations and
warranties were made on and as of that date.
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6.2 Performance. BCAM shall have performed, satisfied and complied
with all covenants, agreements, and conditions required by this Agreement to be
performed, satisfied or complied with by BCAM on or before the Closing Date.
6.3 Certification. The Buyer shall have received a certificate,
dated the Closing Date, signed by the President of BCAM, certifying, in such
detail as the Buyer and its counsel may reasonably request, that the conditions
specified in Sections 6.1 and 6.2 above have been fulfilled.
6.4 Absence of Litigation. No action, suit or proceeding by or
before any court or any governmental body or authority, against BCAM or
pertaining to the transactions contemplated by this Agreement or their
consummation, shall be pending or threatened on the Closing Date, which action,
suit or proceeding would, if determined adversely, prohibit, restrain or impair
the consummation of the transactions contemplated by this Agreement, or have a
material adverse effect on either Drew Shoe, their business or any material
portion of their assets.
6.5 Consents and Releases. All necessary disclosures to and
agreements and consents of (a) any parties to any material contracts and/or any
licensing authorities which are material to Drew Shoe's business and (b) any
governmental authorities or agencies to the extent required in connection with
the transactions contemplated by this Agreement, shall have been obtained and
true and complete copies thereof delivered to the Buyer. Without limitation of
the foregoing, the Buyer shall have received the written consent of Bank One,
National Association, a creditor and secured party of Drew Shoe, with respect to
the transactions contemplated by this Agreement, and the transfer of Drew Common
Stock to the Buyer hereunder.
6.6 Condition of Property. Between the date of this Agreement and
the Closing Date, (a) assets of Drew Shoe having an aggregate fair market value
of $5,000 or more shall not have been lost, destroyed or irreparably damaged by
fire, flood, explosion, theft or any other cause, whether or not covered by
insurance, and (b) no other event, occurrence, condition or cause shall have
occurred, arisen or been discovered which has had or would reasonably be
expected to have a material adverse effect on the business, operations, assets
or condition (financial or otherwise) of Drew Shoe.
6.7 Third Party Transaction. Impleo shall simultaneously with the
closing of this Agreement, successfully consummate a third party transaction
with R. Weil & Associates, Strafe & Co. f/b/o David M. Kirr, Strafe & Co. f/b/o
Terry B. Marbach, Strafe & Co. f/b/o Gregg T. Summerville and others to acquire
their (a) interests in seven certain BCAM 10%/13% convertible subordinated
promissory notes, which notes in the aggregate total a principal amount of
$1,000,000 plus accrued interest; (b) interests in seven warrant instruments to
purchase an aggregate of 333,333 shares of BCAM Common Stock; (c) 28.4971 shares
of Drew Common Stock; and (d) 16.667 shares of $.01 par value common stock of
BCAM Technologies, Inc., a New York Corporation. In the event less than all of
the transactions contemplated by this third party transaction are not
consummated prior to the closing of this Agreement, for each $100,000 of
principal amount of notes and warrants not sold pursuant to this third party
transaction, BCAM shall have the right to withhold 1/60th of the shares of Drew
Common Stock transferred
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<PAGE>
hereunder; provided, however, that BCAM shall consummate the remaining terms of
this Agreement and, upon Buyer's tender of such "unsold notes," shall release to
Buyer the withheld shares of Drew Common Stock.
6.8 No Events. There shall not have occurred any one or more of the
events described in Section 5.3 above.
6.9 Proceedings and Instruments Satisfactory. All proceedings,
corporate or other, to be taken in connection with the transactions contemplated
by this Agreement, and all documents incidental thereto, shall be reasonably
satisfactory in form and substance to the Buyer and its counsel.
7. CONDITIONS PRECEDENT TO BCAM'S PERFORMANCE.
The obligations of BCAM to consummate the transactions contemplated
by this Agreement are further subject to the satisfaction, at or before the
Closing Date, of all of the following conditions, any one or more of which may
be waived in writing by BCAM:
7.1 Accuracy of Representations and Warranties. All representations
and warranties made by the Buyer in this Agreement and/or in any written
statement delivered by the Buyer under this Agreement shall be true and correct
in all respects on and as of the Closing Date as though such representations and
warranties were made on and as of that date.
7.2 Performance. The Buyer shall have performed, satisfied and
complied with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Buyer on or before
the Closing Date.
7.3 Certification. BCAM shall have received a certificate, dated as
of the Closing Date, signed by the Buyer, certifying, in such detail as BCAM and
its counsel may reasonably request, that the conditions specified in Sections
7.1 and 7.2 above have been fulfilled.
7.4 Proceedings and Instruments Satisfactory. All proceedings to be
taken in connection with the transactions contemplated by this Agreement, and
all documents incidental thereto, shall be reasonably satisfactory in form and
substance to BCAM and its counsel.
8. CLOSING.
8.1 Place and Date of Closing. Unless this Agreement shall be
terminated pursuant to Section 9 below, the consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of counsel for the Buyer, Greenberg Traurig, 200 Park Avenue, New York, New York
10166 or such other location as is agreed to between the Buyer and BCAM, at
10:00 A.M. local time on October 23, 1998 (the date of the Closing being
referred to in this Agreement as the "Closing Date"). Notwithstanding the
foregoing, if the Buyer shall not be prepared to effect the Closing on such
Closing Date, the
9
<PAGE>
Buyer shall have the right to extend the Closing Date for up to an additional
one (1) month through November 23, 1998.
8.2 Actions at Closing. At the Closing or prior thereto, the Buyer
and BCAM shall make all deliveries stated in this Agreement, which deliveries
are required to be made at the Closing and/or on or prior to the Closing Date.
9. TERMINATION OF AGREEMENT.
9.1 General. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing: (a) by
the mutual written consent of BCAM and the Buyer; (b) by the Buyer, or by BCAM,
if: (i) a material breach shall exist with respect to the written
representations and warranties made by the other party, (ii) the other party
shall take any action prohibited by this Agreement, if such action shall or may
have a material adverse effect on Drew Shoe and/or the transactions contemplated
hereby, (iii) the other party shall not have furnished, upon reasonable notice
therefor, such certificates and documents required in connection with the
transactions contemplated hereby and matters incidental thereto as it shall have
agreed to furnish, and it is reasonably unlikely that the other party will be
able to furnish such item(s) prior to the outside Closing Date specified below,
or (iv) any consent of any third party to the transactions contemplated hereby
(whether or not the necessity of which is disclosed herein) is reasonably
necessary to prevent a default under any outstanding material obligation of
either party, or Drew Shoe, and such consent is not obtainable without material
cost or penalty (unless the party or parties not seeking to terminate this
Agreement agree to pay such cost or penalty); or (c) by either party, at any
time on or after October 23, 1998 (or November 23, 1998 in the event of an
extension pursuant to Section 8.1 above), if the transactions contemplated
hereby shall not have been consummated prior thereto, and such party shall not
then be in breach or default of any obligations imposed upon it by this
Agreement.
10. INDEMNIFICATION.
10.1 General.
(a) BCAM shall defend, indemnify and hold harmless the Buyer
from, against and in respect of any and all claims, losses, costs, expenses,
obligations, liabilities, damages, recoveries and deficiencies, including
interest, penalties and reasonable attorneys' fees, that the Buyer may incur,
sustain or suffer as a result of (i) any misrepresentation or breach of warranty
by BCAM under this Agreement, and/or (ii) any failure by BCAM to perform any of
the covenants or agreements of BCAM contained in this Agreement.
(b) The Buyer shall defend, indemnify and hold harmless BCAM
from, against and in respect of any and all claims, losses, costs, expenses,
obligations, liabilities, damages, recoveries and deficiencies, including
interest, penalties and reasonable attorneys' fees, that BCAM may incur, sustain
or suffer as a result of (i) any misrepresentation or breach of
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warranty by the Buyer under this Agreement and/or (ii) any failure the Buyer to
perform, any of the covenants or agreements of the Buyer contained in this
Agreement.
11. POST-CLOSING EVENTS.
11.1 Further Assurances. From time to time from and after the
Closing Date, the parties will execute and deliver to each other any and all
further agreements, instruments, certificates and other documents as may
reasonably be requested by the other party in order more fully to consummate the
transactions contemplated hereby.
11.2 Additional Transaction. Provided such approval is necessary,
promptly after the Closing Date, and in any event no later than sixty (60) days
thereafter, BCAM will submit to its shareholders for their approval the
transactions contemplated by the Purchase and Sale Agreement. BCAM will use its
best efforts to obtain such shareholder approval (provided such approval is
necessary) as soon as reasonably possible, but if such approval is not obtained
or waived, and the transactions contemplated by the Purchase and Sale Agreement
are not consummated on or before January 15, 1999, said failure shall not affect
or impair the other transactions contemplated by this Agreement and neither
BCAM, nor Buyer shall have any further rights or obligations under this Section
11.2 or under the Purchase and Sale Agreement.
11.3 Continuing Security Interest. Pursuant to security and stock
pledge agreements dated April 14, 1998, BCAM's indebtedness to Impleo, as
evidenced by the Subject Notes (and, after the Closing, the Replacement Note)
are secured by security interests granted by BCAM to Impleo in BCAM's shares of
Drew Common Stock, its accounts, chattel paper, contracts, documents, equipment,
intangibles, and other assets. It is the intention of the parties to this
Agreement that said security interests continue in favor of Impleo as collateral
for the indebtedness under the Replacement Note and, accordingly, nothing
contained in this Agreement shall be construed as a waiver of, or Impleo's
consent or agreement to release, said security interests.
11.4 Assignment of Stock Purchase Agreement. To the fullest extent
permissible, BCAM hereby assigns to Buyer any and all rights it had or currently
has under that certain Stock Purchase Agreement dated March 20, 1997 and entered
into by and between BCAM, as Purchaser and Frank Shyjka and Charles Schulyer as
Sellers. BCAM agrees to execute any further documents and shall seek and, to the
extent feasible, obtain, in good faith such consents as may be necessary to
effectuate the intent of this Section 11.4.
12. COSTS.
12.1 Finder's or Broker's Fees. Each of the Buyer and BCAM
represents and warrants that neither they nor any of their respective affiliates
have dealt with any broker or finder in connection with any of the transactions
contemplated by this Agreement, and no broker or other person is entitled to any
commission or finder's fee in connection with any of these transactions.
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<PAGE>
12.2 Expenses. At the time of Closing or any termination of this
Agreement (as the case may be), or upon demand by the Buyer, BCAM shall pay all
costs and expenses incurred or to be incurred by BCAM and/or the Buyer in
negotiating and preparing this Agreement, all related agreements and
documentation, and in closing and carrying out the transactions contemplated by
this Agreement, regardless of whether such transactions ultimately close or are
consummated, which costs and expenses shall include, but not be limited to, all
reasonable legal fees and disbursements the parties may incur in connection
herewith.
13. FORM OF AGREEMENT.
13.1 Effect of Headings. The Section headings used in this Agreement
are included for purposes of convenience only, and shall not affect the
construction or interpretation of any of the provisions hereof.
13.2 Entire Agreement; Waivers. This Agreement, along with the
Exhibits hereto, and the other agreements and instruments referred to herein,
constitute the entire agreement between the parties pertaining to the subject
matter hereof, and supersede all prior agreements or understandings as to such
subject matter. No party hereto has made any representation or warranty or given
any covenant to the other except as set forth in this Agreement and the Exhibits
hereto. No waiver of any of the provisions of this Agreement shall be deemed, or
shall constitute, a waiver of any other provisions, whether or not similar, nor
shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.
13.3 Counterparts. This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
14. PARTIES.
14.1 Parties in Interest. Nothing in this Agreement, whether
expressed or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties to it and their
respective successors and permitted assigns, nor is anything in this Agreement
intended to relieve or discharge the obligations or liability of any third
persons to any party to this Agreement, nor shall any provision give any third
persons any right of subrogation or action over or against any party to this
Agreement.
14.2 Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally or by
telecopier on the party to whom notice is to be given, on the day after the
delivery thereof to a recognized overnight courier service for next-day delivery
with all charges prepaid or billed to the account of the sender, or on the third
day after mailing if mailed to the party to whom notice is to be given, by first
class mail, registered or certified, postage prepaid, and properly addressed as
follows:
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(a) If to BCAM:
BCAM International, Inc.
1800 Walt Whitman Road
Melville, New York, 17747
Attention: Michael Strauss, Chairman
and Chief Executive Officer
Fax: (516) 752-3558
with copy to:
Ruskin, Moscou, Evans et al.
170 Old Country Road
Mineola, NY 11501
Attention: Norman M. Friedland, Esq.
(b) If to the Buyer:
IMPLEO, LLC
c/o Wexford Management, LLC
411 West Putnam Avenue
Greenwich, Connecticut 06803
Attention: Joseph Jacobs, President
Fax: (203) 862-7320
with a copy to:
Greenberg, Traurig
200 Park Avenue
New York, New York 10166
Attention: Shahe Sinanian, Esquire
Fax: (212) 801-6400
or to such other address as either party shall have specified by notice in
writing given to the other party.
15. MISCELLANEOUS.
15.1 Amendments and Modifications. No amendment or modification of
this Agreement or any Exhibit hereto shall be valid unless made in writing and
signed by or on behalf of the party to be charged therewith.
15.2 Non-Assignability; Binding Effect. Neither this Agreement, nor
any of the rights or obligations of the parties hereunder, shall be assignable
by any party hereto without the
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<PAGE>
prior written consent of all other parties hereto. Otherwise, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
15.3 Governing Law; Jurisdiction. This Agreement shall be construed
and interpreted and the rights granted herein governed in accordance with the
laws of the State of New York applicable to contracts made and to be performed
wholly within such State.
15.4 Choice of Forum; Waiver of Trial by Jury. Any suit, action or
proceeding brought by either party against the other party for claims arising
out of this Agreement shall be brought and enforced exclusively in the United
States District Court for the Southern District of New York, or in the event
that court lacks jurisdiction to hear the claim, in the New York State Supreme
Court in New York County. In any such suit, action or proceeding, each party
waives, to the fullest extent it may effectively do so, its right to a trial by
jury.
IN WITNESS WHEREOF, the parties have executed this Agreement on and as of
the date first set forth above.
IMPLEO, LLC
By:
-----------------------------------
Joseph Jacobs,
---------------------
BCAM INTERNATIONAL, INC.
By:
-----------------------------------
Michael Strauss, Chairman &
Chief Executive Officer
14
SECOND AMENDMENT TO NOTE PURCHASE AGREEMENT
SECOND AMENDMENT dated as of October 23, 1998 (the "Second Amendment") to
the NOTE PURCHASE AGREEMENT (the "Agreement") dated as of September 19, 1997, as
amended by the First Amendment to the Note Purchase Agreement dated April 14,
1998 among BCAM INTERNATIONAL, INC., a New York corporation (the "Company"),
IMPLEO LLC, a Connecticut limited liability company (the "Purchaser") and
WEXFORD MANAGEMENT LLC, as agent for the Purchaser and the holders of Other
Notes (the "Agent").
W I T N E S S E T H:
WHEREAS, the Purchaser and the Company have heretofore entered into that
certain Note Purchase Agreement dated as of September 19, 1997, as amended by
the First Amendment to the Note Purchase Agreement dated April 14, 1998 (the
"Agreement"). The Company has heretofore issued, and the Purchaser has
heretofore purchased, the Company's 10%/13% convertible subordinated promissory
notes (the "Notes") in the aggregate principal amount of $5,000,000 pursuant to
the Agreement;
WHEREAS, as of even date herewith, the Purchaser and the Company have
entered into a Stock Purchase and Restructure Agreement (the "Purchase
Agreement"), pursuant to which, the Purchaser has agreed to waive certain rights
it has with respect to the election of the Company's board of directors.
NOW, THEREFORE, the Purchaser and the Company hereby agree as follows:
1. Amendment. Section 4.1 of the Agreement shall be and is hereby amended
by the deletion of the following language from the language contained therein:
"In addition, so long as the Notes are outstanding, the Purchaser
shall have the right to designate a number of directors of the
Company equal to at least 25% (and if the number of Directors is not
divisible by four, rounded up to the next whole number) of the
number of such directors. In the case that any nominee designated by
the Purchaser ceases to serve as a director of the Company, Drew or
BT for any reason, the Company agrees that it will nominate to its
board of directors or the board of directors of Drew or BT, as the
case may be, one or more replacement nominees designated by the
Purchaser and use its best efforts to cause such replacement
nominees to be elected."
2 Interpretation; Construction. This Second Amendment shall be construed
in connection with and as part of the Agreement, and except as modified and
expressly amended by this Second Amendment, all terms, conditions and covenants
contained in the Agreement, the First Amendment and the Notes are hereby
ratified and shall be and remain in full force and effect. From and after the
effective date of this Second Amendment, references to the Agreement shall mean
the Agreement as amended by the First Amendment and this Second Amendment.
<PAGE>
3. Effectiveness of the Agreement. The effectiveness of this Agreement is
conditioned upon the parties consummating the transactions contemplated by the
Purchase Agreement, and the exhibits thereto. In the such transactions are not
consummated by the parties hereof, this agreement shall be of no force or
effect.
4. Effect of Headings. The Section headings used in this Agreement are
included for purposes of convenience only, and shall not affect the construction
or interpretation of any of the provisions hereof.
5. Entire Agreement. This Agreement along with the other agreements and
instruments referred to herein, constitute the entire agreement between the
parties pertaining to the subject matter hereof, and supersede all prior
agreements or understandings as to such subject matter. No party hereto has made
any representation or warranty or given any covenant to the other except as set
forth in this Agreement.
6. Amendments and Modifications. No amendment or modification of this
Agreement shall be valid unless made in writing and signed by or on behalf of
the party to be charged therewith.
7. Governing Law; Jurisdiction. This Agreement shall be construed and
interpreted and the rights granted herein governed in accordance with the laws
of the State of New York applicable to contracts made and to be performed wholly
within such State.
8. Choice of Forum; Waiver of Trial by Jury. Any suit, action or
proceeding brought by either party against the other party for claims arising
out of this Agreement shall be brought and enforced exclusively in the United
States District Court for the Southern District of New York, or in the event
that court lacks jurisdiction to hear the claim, in the New York State Supreme
Court in New York County. In any such suit, action or proceeding, each party
waives, to the fullest extent it may effectively do so, its right to a trial by
jury.
IN WITNESS WHEREOF, the parties have executed this Second Amendment to the
Note Purchase Agreement as of the date first written above.
2
<PAGE>
BCAM INTERNATIONAL INC.
By:
--------------------------
Michael Strauss
President
IMPLEO LLC
By:
--------------------------
WEXFORD MANAGEMENT LLC
as Agent for Impleo LLC
By:
--------------------
Joseph Jacobs
President
WEXFORD MANAGEMENT LLC
as Agent
By:
--------------------------
Joseph Jacobs
President
SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT, dated as of October __, 1998 (this
"Agreement"), is entered into by and among DREW SHOE CORPORATION, an Ohio
corporation (the "Company"), BCAM INTERNATIONAL, INC., a New York corporation
("BCAM"), and IMPLEO, LLC, a Delaware limited liability company, ("Impleo") BCAM
and Impleo are hereinafter collectively referred to as the "Shareholders").
W I T N E S S E T H:
WHEREAS, BCAM and Impleo have entered into a Stock Purchase and
Restructuring Agreement dated of even date herewith (the "Purchase Agreement");
and
WHEREAS pursuant to the Purchase Agreement, BCAM and Impleo agreed
to enter into a Shareholders' Agreement setting forth the terms and conditions
by which they will hold and may sell their shares of stock in the Company; and
NOW, THEREFORE, in consideration of the premises and of the mutual
promises and obligations set forth herein and in the Purchase Agreement, the
parties hereto hereby agree as follows:
SECTION 1. Definitions. As used herein, the following terms shall
have the following respective meanings:
(a) Affiliate shall mean, with respect to any Shareholder, (i) a
person or entity, and any officers and directors of such person or entity, that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Shareholder and (ii) the
officers and directors of such Shareholder.
(b) Debt shall mean that certain indebtedness owed by BCAM to Impleo
which is evidenced by a certain BCAM 10%/13% Convertible Subordinated Promissory
Note in the aggregate principal amount of $3,073,663.90, together with accrued
interest thereon, dated of even date herewith and which is evidenced by the
"Replacement Note" as referred to in the Purchase Agreement.
(c) Sell, as to any Stock, shall mean to sell, or in any other way
directly or indirectly transfer, assign, distribute, encumber, pledge,
hypothecate or otherwise dispose of, either voluntarily or involuntarily, any
legal or beneficial interest in such Stock. The act of Selling is a Sale.
(d) Stock shall mean any issued and outstanding shares of common
stock, without par value, of the Company.
(e) Shareholders shall mean any shareholder listed above or and any
other holder of any shares of the Stock.
SECTION 2. BCAM's Restrictions on Transfer. The Shareholders agree
that
<PAGE>
BCAM may Sell any or all of its shares of Stock to a third party in a bona fide
cash transaction for a purchase price equal to or in excess of the
then-outstanding amount of the Debt, and upon the following terms and
conditions:
(a) Impleo Consent. For so long as any portion of the Debt and/or
accrued interest thereon shall remain outstanding, prior to BCAM's consummation
of a sale of its shares of Stock to a third party, BCAM, by virtue of the fact
that Impleo maintains a security interest in BCAM's Stock, shall be required to
obtain the prior written consent of Impleo, which consent may by withheld by
Impleo in its sole discretion; provided, however, that in the event the
aggregate proceeds of the sale of BCAM's shares of Stock equal or exceed the
then outstanding amount of the Debt, BCAM may consummate the Sale of such Stock
if, simultaneous with or prior to the closing of such Sale of Stock, BCAM pays
to Impleo, in immediately available funds, an amount sufficient to satisfy the
entire outstanding amount of the Debt, together with accrued interest thereon.
BCAM may neither pledge nor otherwise encumber its shares of Stock, nor shall it
dispose of such shares by gift, sale or otherwise, except with the prior written
consent of Impleo, which consent may be withheld by Impleo in its sole
discretion.
(b) Security Interest. With respect to the security interest
referred to in Section 2(a) above, as further described in the Purchase
Agreement, the Shareholders hereby agree that said security interest shall
continue in favor of Impleo until such time as the amount of the Debt, together
with accrued interest thereon, shall be paid in full by BCAM to Impleo and
Impleo shall formally release said security interest. Accordingly, nothing
contained in this Agreement shall be construed as a waiver of, or Impleo's
consent or agreement to, release said security interest.
(c) Notice of Offer; Right of Impleo. BCAM shall deliver written
notice of the proposed sale (the "Notice") to Impleo, which Notice shall state
the name, address, telephone number and principal line(s) of business of the
proposed purchaser or assignee (the "Third Party"), shall specify the number of
shares of Stock to be sold (the "Offered Shares"), the proposed purchase price
per share (the "Offer Price") and all other terms and conditions of the offer,
and shall include a copy of any writings between BCAM and the Third Party
relating to the proposed sale. Within 30 days following the delivery of the
Notice by BCAM to Impleo, Impleo may, by written notice to BCAM, elect to
purchase all or any portion of the Offered Shares at the Offer Price. In the
event Impleo elects to purchase less than all of the Offered Shares following
termination of the 30-day period referred to above, then BCAM may either (i)
withdraw its offer to sell the Offered Shares or (ii) for a period of 60 days
following the expiration of such 30-day period, sell all of the Offered Shares
or, at the option of BCAM, the portion of the Offered Shares not being purchased
by Impleo, to the Third Party at a price per share in cash equal to or greater
than the Offer Price; provided, however, that in the event BCAM exercises its
rights under Section 2(c)(ii) hereof, it shall comply with the notice provisions
of Section 2(a). Any Offered Shares which are not sold to the Third Party within
such time period and at such price shall again be subject to this Section 2.
(d) Time, Place and Manner of Sale. The closing of the Sale of any
Offered Shares to Impleo shall take place at the principal office of Impleo on
or before the expiration of the applicable option period pursuant to Section
2(c). At such closing, Impleo shall deliver to BCAM, against delivery of
certificates representing the Offered Shares being acquired by Impleo which
shall be duly endorsed or with appropriate stock powers attached, payment for
the Offered Shares in immediately available funds; provided, however, that
Impleo shall at all times have the right to apply, to
<PAGE>
the payment of the purchase price for the Offered Share, as a credit, all or any
portion of the then outstanding balance of the Debt, together with accrued
interest thereon, and the amount of any outstanding costs or expenses, if any,
that BCAM may have failed to pay pursuant to the Purchase Agreement, which costs
or expenses shall include, but not be limited to those costs contemplated by
Section 12 of the Purchase Agreement.
(e) Availability to Negotiate, etc. At all times following the
delivery of any Notice and until the expiration of the applicable option period,
each Shareholder agrees to negotiate in good faith a purchase and sale agreement
in respect of any Offered Shares to be purchased by Impleo (the "Purchase and
Sale Agreement"). Pursuant to said Purchase and Sale Agreement, BCAM shall
represent and warrant as to the following: (i) that BCAM is duly authorized to
enter into the Purchase and Sale Agreement, (ii) that BCAM owns the Offered
Shares free and clear of all pledges, liens, claims, encumbrances or any other
restriction or assessments whatsoever, and (iii) that BCAM has received all
necessary consents, authorizations and approvals to Sell the Offered Shares to
Impleo. Pursuant to said Purchase and Sale Agreement, Impleo will represent and
warrant as to the following: (A) that it is duly authorized to purchase the
Offered Shares and (B) that it is purchasing the Offered Shares for investment
purposes only.
(f) Third Party Agreement. Any Third Party purchaser of the Offered
Shares shall be obligated to enter into this Agreement (or a joinder agreement
whereby such Third Party purchaser agrees to be bound by and comply with the
terms and conditions of this Agreement, including the drag along provisions and
right of first refusal provisions in favor of Impleo) on the same terms and
conditions as BCAM is subject to hereunder. BCAM may not Sell any of its shares
of Stock to a Third Party until such time as the Third Party enters into such
joinder agreement or this Agreement and delivers an executed copy of said
agreement to Impleo.
SECTION 3. Drag-Along Rights. If Impleo shall Sell, other than to an
Affiliate of Impleo, all of its shares of Stock in a bona fide arm's length
transaction, Impleo, at its option, may require that (a) BCAM Sell its Stock in
the same transaction at the same price and on the same terms and conditions as
applicable to Impleo and (b) if shareholder approval of the transaction is
required, that BCAM shall vote its shares of Stock in favor thereof. For
purposes of this Section 3, a "Sale" shall also include a merger, consolidation
or similar combination or exchange, sale of assets of the Company followed by a
liquidation, or a combination thereof.
SECTION 4. Tag-Along Rights.
(a) With respect to any proposed Sale by Impleo of more than 50% of
the issued and outstanding Stock, which Proposed Sale is other than to an
Affiliate of Impleo, BCAM shall have the right to require Impleo to cause the
purchaser in such sale to purchase from BCAM a number of shares of Stock equal
to the product (rounded up to the nearest integer) of (i) the quotient
determined by dividing the number of shares of Stock held by BCAM by the
combined number of Shares owned by BCAM and Impleo and (ii) the number of shares
of Stock proposed to be sold in the contemplated Sale, and at the same price per
share and upon the same terms and conditions as to be paid and given to Impleo,
provided that BCAM shall make substantially the same representations,
warranties, covenants and indemnities and other similar agreements as Impleo
agrees to make in connection with
<PAGE>
the proposed Sale.
(b) Impleo shall give notice to BCAM of each proposed Sale giving
rise to the rights of BCAM set forth in Section 4 (a) at least 15 days prior to
the proposed consummation of such Sale, setting forth the number of shares of
Stock proposed to be Sold, the name and address of the proposed transferee, the
proposed amount and form of consideration and terms and conditions of payment
offered by such proposed assignee, the number of shares of Stock BCAM may sell
to such proposed transferee (in accordance with Section 4 (a)), and a
representation that the proposed transferee has been informed of the "tag-along"
rights provided for in this Section 4 and has agreed to purchase all shares of
Stock required to be so purchased in accordance with the terms hereof. In order
to exercise its tag-along rights under this Section 4, BCAM shall, within 15
days following receipt of the notice required by the preceding sentence, deliver
a written notice to Impleo indicating BCAM's desire to exercise its rights and
specifying the number of shares of Stock (up to the maximum number of Shares
owned by BCAM) that it desires to sell.
SECTION 5. Additional Financing. In the event that the Company shall
seek additional financing, whether in the form of equity or debt financing,
Impleo shall have the right, but not the obligation, to provide such financing
on such commercially reasonable terms as it shall see fit; provided, however,
that in the event that BCAM wishes to provide a portion of such financing on
such terms as are offered to the Company by Wexford, or the subject Affiliate of
Impleo, BCAM may provide a portion of such financing equal to or less than the
amount determined by multiplying (a) BCAM's Pro-Rata Percentage by (b) the total
amount of financing offered to the Company. For purposes of this Section, BCAM's
Pro-Rata Percentage shall mean the percentage arrived at by dividing (i) the
number of shares of Stock owned by BCAM by (ii) the number of shares of Stock
outstanding.
SECTION 6. Shareholder Vote. For so long as Impleo shall own a
majority of the Stock, and in connection with the nomination of members of the
Company's board of directors, BCAM agrees that in lieu of the calling of a
special meeting of the Shareholders, BCAM shall promptly execute such
shareholder resolutions as Impleo may propose.
SECTION 7. Term. This Agreement shall expire upon the earlier of
either (a) the date of the acquisition of either Shareholder and/or its
Affiliates acquiring 100% of the Stock or (b) the written termination hereof by
all Shareholders.
SECTION 8. Legend on Stock Certificates. Each certificate
representing shares of Stock held by each Shareholder who is a party to or bound
by this Agreement shall bear substantially the following legend, until such time
as the shares represented thereby are no longer subject to the provisions
hereof:
"THE RIGHTS OF THE HOLDER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF A
SHAREHOLDERS' AGREEMENT DATED AS OF OCTOBER __, 1998, AMONG THE
COMPANY AND ITS SHAREHOLDERS. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED AT NO COST BY WRITTEN REQUEST MADE TO THE COMPANY BY THE
HOLDER OF
<PAGE>
RECORD OF THIS CERTIFICATE."
SECTION 9. Severability; Governing Law. If any provision of this
Agreement shall be determined to be illegal and unenforceable by any court of
competent jurisdiction, the remaining provisions shall be severable and
enforceable in accordance with their terms. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York without
reference to such State's choice of law principles.
SECTION 10. Notices. All notices, or other communications to be
given or otherwise made to any party under this Agreement shall be deemed to be
sufficient if contained in a written instrument given by personal delivery,
telex, telecopier or telegram or duly sent by overnight courier or first class
registered or certified mail, return receipt requested, postage prepaid,
addressed to such party at the address set forth below or at such other address
as may hereafter be designated in writing by the addressee to the addressor
listing all parties:
If to the Company:
Drew Shoe Corporation
---------------------
---------------------
---------------------
If to BCAM:
BCAM International, Inc.
1800 Walt Whitman Road
Melville, New York, 17747
Attention: Michael Strauss, Chairman
and Chief Executive Officer
Fax: (516) 752-3558
If to Impleo:
IMPLEO, LLC
c/o Wexford Management, LLC
411 West Putnam Avenue
Greenwich, Connecticut 06803
Attention: Joseph Jacobs, President
Fax: (203) 862-7320
All such notices, and communications shall be deemed to have been delivered and
received (a) in the case of personal delivery, telex, telecopier, or telegram on
the date of such delivery, (b) in the case of overnight courier, on the next
business day after being deposited with the courier service, and (c) in the case
of mailing, on the third business day following such mailing; provided, that in
the case of delivery by mail to an address in a country other than the country
from which mailing is made, all such notices and communications shall be deemed
to have been delivered and received
<PAGE>
on the fourteenth business day following the date of such mailing.
SECTION 11. Amendments and Modifications. No amendment or
modification of this Agreement shall be valid unless made in writing and signed
by the Company and all Shareholders.
SECTION 12. Non-Assignability; Binding Effect. Neither this
Agreement, nor any of the rights or obligations of the parties hereunder, shall
be assignable by any party hereto without the prior written consent of all other
parties hereto.
SECTION 13. Effect of Headings. The Section headings used in this
Agreement are included for purposes of convenience only, and shall not affect
the construction or interpretation of any of the provisions hereof.
SECTION 14. Entire Agreement; Waivers. This Agreement constitutes
the entire agreement between the parties pertaining to the subject matter
hereof, and supersede all prior agreements or understandings as to such subject
matter. No party hereto has made any representation or warranty or given any
covenant to the other except as set forth in this Agreement. No waiver of any of
the provisions of this Agreement shall be deemed, or shall constitute, a waiver
of any other provisions, whether or not similar, nor shall any waiver constitute
a continuing waiver. No waiver shall be binding unless executed in writing by
the party making the waiver.
SECTION 15. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which taken together shall constitute one and the same instrument.
SECTION 16. Choice of Forum; Waiver of Trial by Jury. Any suit,
action or proceeding brought by either Shareholder against the other Shareholder
for claims arising out of this Agreement shall be brought and enforced
exclusively in the United States District Court for the Southern District of New
York, or in the event that court lacks jurisdiction to hear the claim, in the
New York State Supreme Court in New York County. In any such suit, action or
proceeding, each Shareholder waives, to the fullest extent it may effectively do
so, its right to a trial by jury.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Shareholders' Agreement as of the date first set forth above.
DREW SHOE CORPORATION
By:
-------------------------------------
Name:
Title:
IMPLEO, LLC
By:
-------------------------------------
Name:
Title:
BCAM INTERNATIONAL, INC.
By:
-------------------------------------
Name:
Title:
PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT (this "Agreement"), entered into as of this
23rd day of October, 1998, by and between IMPLEO, LLC, a Delaware limited
liability company (the "Buyer"), and BCAM INTERNATIONAL, INC., a New York
Corporation, ("BCAM");
W I T N E S S E T H:
WHEREAS, BCAM is the record and beneficial owner of 569.37302 shares of
common stock, without par value, of Drew Shoe Corporation ("Drew"), an Ohio
corporation (the "Subject Stock");
WHEREAS, pursuant to a Stock Purchase and Restructuring Agreement of even
date herewith, to which this Agreement is attached as an exhibit, the parties
have agreed to enter into this Agreement;
WHEREAS, the Buyer is the holder of a BCAM 10%/13% convertible
subordinated promissory note in the aggregate principal amount of $3,073,663.90
(the "Note") and, 740,000 warrants to purchase an aggregate of 569.37302 shares
of common stock of BCAM, $.01 par value per share (the "Warrants");
WHEREAS, conditioned upon shareholder approval of the transactions
contemplated by this Agreement, BCAM wishes to transfer to the Buyer the Subject
Stock in exchange for the cancellation of indebtedness evidenced by the Note,
and certain other good and valuable consideration as more particularly provided
for herein; and
WHEREAS, the Buyer desires to purchase from BCAM and BCAM desires to sell
to the Buyer, all upon the terms and subject to the conditions set forth in this
Agreement, the Subject Stock.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereby agree as follows:
1. ACQUISITION OF THE STOCK.
1.1 Stock Purchase. Subject to the terms and conditions of this
Agreement, on the Closing Date (as such term is hereinafter defined), the Buyer
shall purchase and acquire from BCAM, and BCAM shall sell and transfer to the
Buyer, the Subject Stock for the consideration provided for in Section 2 below.
In furtherance thereof, BCAM shall, on the Closing Date, against delivery of
such consideration in accordance with Section 2 below, deliver to the Buyer the
certificates representing the Subject Stock, duly endorsed for transfer or
accompanied by stock powers executed in blank for transfer.
1
<PAGE>
2. CONSIDERATION/DELIVERIES AT CLOSING.
At the Closing:
2.1 Purchase Price. The Buyer shall effectuate its cancellation of
the indebtedness evidenced by the Note by delivering the Note to BCAM for
cancellation.
2.2 Shareholder Agreement. That certain Shareholders' Agreement
dated of even date herewith and entered into by and between the Buyer, BCAM and
Drew, as referred to in the Restructuring Agreement, shall terminate pursuant to
its terms.
2.3 Note Purchase Agreement. The Buyer shall deliver such documents
to BCAM as BCAM may reasonably request, so as to evidence the termination of the
Note Purchase Agreement.
2.4 Security Agreement. The Buyer shall deliver such documents to
BCAM as BCAM may reasonably request, so as to evidence the termination of that
certain Security Agreement dated April 14, 1998, entered into by and among BCAM,
the Buyer and the Buyer's agent, in favor of the Buyer, along with any UCC-3
termination statements necessary to further effectuate the provisions of this
Section 2.4.
2.5 Warrants. Buyer shall effectuate its cancellation of the
Warrants by delivering to BCAM for cancellation the warrant certificates
representing the Warrants.
3. REPRESENTATIONS AND WARRANTIES OF BCAM.
In connection with the sale of the Subject Stock to the Buyer, BCAM
hereby represents and warrants to the Buyer as follows:
3.1 Title to the Stock. BCAM is the valid and lawful record and
beneficial owner of all of the Subject Stock, all of which has been duly
authorized and validly issued and is fully paid and non-assessable, and is free
and clear of all pledges, liens, claims, charges, options, calls, encumbrances,
restrictions and assessments whatsoever other than (a) the outstanding pledge
thereof to the Buyer, and (b) restrictions which may be created by operation of
state or federal securities laws. On the Closing Date, the Buyer shall receive
from BCAM good, valid and marketable title to all of the Subject Stock, free and
clear of all pledges, liens, claims, charges, options, calls, encumbrances,
restrictions and assessments whatsoever, other than the above-referenced pledge
and securities law restrictions.
3.2 Valid and Binding Agreement; No Breach. (a) BCAM has full legal
right, power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. BCAM has taken all necessary
corporate action to authorize its execution and delivery of this Agreement. This
Agreement constitutes the legal, valid and binding obligations of BCAM,
enforceable against BCAM in accordance with their respective terms, except to
the extent that such enforceability may be limited by bankruptcy, insolvency,
2
<PAGE>
reorganization and other laws affecting creditors' rights generally, and except
that the remedy of specific performance or similar equitable relief is available
only at the discretion of the court before which enforcement is sought.
(b) Neither the execution and delivery of this Agreement nor
compliance with the terms and provisions of this Agreement on the part of BCAM
will: (i) violate any statute or regulation of any governmental authority,
domestic or foreign, applicable to BCAM; (ii) require the issuance of any
authorization, license, consent or approval of any federal or state governmental
agency, or any other person; or (iii) except for the pledge of the Subject Stock
in favor of the Buyer, conflict with or result in a breach of any of the terms,
conditions or provisions of any judgment, order, injunction, decree, note,
indenture, loan agreement or other agreement or instrument to which BCAM is a
party, or by which BCAM is bound, or constitute a default thereunder.
3.3 Organization, Good Standing and Qualification. BCAM is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New York, with full corporate power and authority to own its
assets and conduct its business as owned and conducted on the date hereof.
3.4 Equity Ownership. The Subject Stock to be transferred to the
Buyer hereunder constitutes not less than 33.33% of the total issued and
outstanding capital stock of Drew Shoe, on a fully diluted basis (after giving
effect to the exercise or conversion of any and all outstanding options,
warrants, convertible securities, subscription rights or other rights to acquire
any capital stock of Drew Shoe). For purposes of this representation, the
options contained in the Drew Shoe Employment Agreement with Michael Strauss,
which Agreement is referred to in the Stock Purchase and Restructuring
Agreement, shall be disregarded.
3.5 Litigation. There is no suit, action, arbitration, or legal,
administrative or other proceeding, or governmental investigation pending or, to
the best knowledge of BCAM, threatened against BCAM which would in any manner
prohibit, restrain, impair or otherwise adversely affect the ability of BCAM to
convey free and clear title to the Subject Stock in accordance with this
Agreement.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
In connection with the Buyer's purchase of the Subject Stock from
BCAM, the Buyer hereby represents and warrants to BCAM as follows:
4.1 Valid and Binding Agreement. This Agreement constitutes the
legal, valid and binding obligations of the Buyer, enforceable against the Buyer
in accordance with their respective terms, except to the extent that such
enforceability may be limited by bankruptcy, insolvency, reorganization and
other laws affecting creditors' rights generally, and except that the remedy of
specific performance or similar equitable relief is available only at the
discretion of the court before which enforcement is sought. The Buyer has taken
all necessary company action to
3
<PAGE>
authorize its execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby.
4.2 Organization, Good Standing and Qualification. The Buyer is a
limited liability company duly organized, validly existing and in good standing
under the laws of the State of Delaware, with full power and authority to own
its assets and conduct its business as owned and conducted on the date hereof.
4.3 No Breach of Statute or Contract. Neither the execution and
delivery of this Agreement by the Buyer, nor compliance with the terms and
provisions of this Agreement on the part of the Buyer, will: (a) violate any
statute or regulation of any governmental authority, domestic or foreign,
affecting the Buyer; (b) require the issuance of any authorization, license,
consent or approval of any federal or state governmental agency; or (c) conflict
with or result in a breach of any of the terms, conditions or provisions of any
judgment, order, injunction, decree, note, indenture, loan agreement or other
agreement or instrument to which the Buyer is a party, or by which the Buyer is
bound, or constitute a default thereunder.
4.4 Investment. The Buyer is purchasing the Subject Stock for its
own account for investment, and not with a view to the resale or distribution
thereof in violation of any applicable securities laws.
4.5 Disclaimer. The Buyer acknowledges that BCAM has not made any
representations or warranties relating to the value of the Drew Common Stock
transferred herein or the Business prospects of Drew Shoe.
5. CONDITIONS PRECEDENT TO THE BUYER'S PERFORMANCE.
The obligations of the Buyer to consummate the transactions
contemplated by this Agreement are further subject to the satisfaction, at or
before the Closing Date, of all of the following conditions, any one or more of
which may be waived in writing by the Buyer:
5.1 Accuracy of Representations and Warranties. All representations
and warranties made by BCAM in this Agreement and/or in any written statement
delivered to the Buyer under this Agreement shall be true and correct in all
respects on and as of the Closing Date as though such representations and
warranties were made on and as of that date.
5.2 Performance. BCAM shall have performed, satisfied and complied
with all covenants, agreements, and conditions required by this Agreement to be
performed, satisfied or complied with by BCAM on or before the Closing Date.
5.3 Certification. The Buyer shall have received a certificate,
dated the Closing Date, signed by the President of BCAM, certifying, in such
detail as the Buyer and its counsel may reasonably request, that the conditions
specified in Sections 5.1 and 5.2 above have been fulfilled.
4
<PAGE>
5.4 Absence of Litigation. No action, suit or proceeding by or
before any court or any governmental body or authority, against BCAM or
pertaining to the transactions contemplated by this Agreement or their
consummation, shall be pending or threatened on the Closing Date, which action,
suit or proceeding would, if determined adversely, prohibit, restrain or impair
the consummation of the transactions contemplated by this Agreement, or have a
material adverse effect on Drew Shoe, its business or any material portion of
its assets.
5.5 Consents and Releases. All necessary disclosures to and
agreements and consents of (a) any parties to any material contracts and/or any
licensing authorities which are material to Drew Shoe's business and (b) any
governmental authorities or agencies to the extent required in connection with
the transactions contemplated by this Agreement, shall have been obtained and
true and complete copies thereof delivered to the Buyer. Without limitation of
the foregoing, the Buyer shall have received the written consent of Bank One,
National Association, a creditor and secured party of Drew Shoe, with respect to
the transactions contemplated by this Agreement, and the transfer of the Subject
Stock to the Buyer hereunder.
5.6 Proceedings and Instruments Satisfactory. All proceedings,
corporate or other, to be taken in connection with the transactions contemplated
by this Agreement, and all documents incidental thereto, shall be reasonably
satisfactory in form and substance to the Buyer and its counsel.
6. CONDITIONS PRECEDENT TO BCAM'S PERFORMANCE.
The obligations of BCAM to consummate the transactions contemplated
by this Agreement are further subject to the satisfaction, at or before the
Closing Date, of all of the following conditions, any one or more of which may
be waived in writing by BCAM:
6.1 Accuracy of Representations and Warranties. All representations
and warranties made by the Buyer in this Agreement and/or in any written
statement delivered by the Buyer under this Agreement shall be true and correct
in all respects on and as of the Closing Date as though such representations and
warranties were made on and as of that date.
6.2 Performance. The Buyer shall have performed, satisfied and
complied with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Buyer on or before
the Closing Date.
6.3 Certification. BCAM shall have received a certificate, dated as
of the Closing Date, signed by the Buyer, certifying, in such detail as BCAM and
its counsel may reasonably request, that the conditions specified in Sections
6.1 and 6.2 above have been fulfilled.
6.4 Shareholder Consent. Provided BCAM shall be required under the
New York Business Corporations Law, BCAM shall have submitted a copy of this
agreement to its shareholders and its shareholders shall have consented to the
terms of this Agreement and the transactions contemplated hereby.
5
<PAGE>
6.5 Proceedings and Instruments Satisfactory. All proceedings to be
taken in connection with the transactions contemplated by this Agreement, and
all documents incidental thereto, shall be reasonably satisfactory in form and
substance to BCAM and its counsel.
7. CLOSING.
7.1 Place and Date of Closing. Unless this Agreement shall be
terminated pursuant to Section 8 below, the consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of counsel for the Buyer, Greenberg Traurig, 200 Park Avenue, New York, New York
10166 or such other location as is agreed to between the Buyer and BCAM, at
10:00 A.M. local time on or before January 15, 1999 (the date of the Closing
being referred to in this Agreement as the "Closing Date").
7.2 Actions at Closing. At the Closing or prior thereto, the Buyer
and BCAM shall make all deliveries stated in this Agreement, which deliveries
are required to be made at the Closing and/or on or prior to the Closing Date.
8. TERMINATION OF AGREEMENT.
8.1 General. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing: (a) by
the mutual written consent of BCAM and the Buyer; (b) by the Buyer, or by BCAM,
if: (i) a material breach shall exist with respect to the written
representations and warranties made by the other party, (ii) the other party
shall take any action prohibited by this Agreement, if such action shall or may
have a material adverse effect on Drew Shoe and/or the transactions contemplated
hereby, (iii) the other party shall not have furnished, upon reasonable notice
therefor, such certificates and documents required in connection with the
transactions contemplated hereby and matters incidental thereto as it shall have
agreed to furnish, and it is reasonably unlikely that the other party will be
able to furnish such item(s) prior to or on the Closing Date specified below, or
(iv) any consent of any third party to the transactions contemplated hereby
(whether or not the necessity of which is disclosed herein) is reasonably
necessary to prevent a default under any outstanding material obligation of
either party, or Drew Shoe, and such consent is not obtainable without material
cost or penalty (unless the party or parties not seeking to terminate this
Agreement agree to pay such cost or penalty); or (c) by either party, at any
time on or after January 16, 1999, if the transactions contemplated hereby shall
not have been consummated prior thereto, and such party shall not then be in
breach or default of any obligations imposed upon it by this Agreement.
9. INDEMNIFICATION.
9.1 General.
(a) BCAM shall defend, indemnify and hold harmless the Buyer
from, against and in respect of any and all claims, losses, costs, expenses,
obligations, liabilities,
6
<PAGE>
damages, recoveries and deficiencies, including interest, penalties and
reasonable attorneys' fees, that the Buyer may incur, sustain or suffer as a
result of (i) any misrepresentation or breach of warranty by BCAM under this
Agreement, and/or (ii) any failure by BCAM to perform any of the covenants or
agreements of BCAM contained in this Agreement.
(b) The Buyer shall defend, indemnify and hold harmless BCAM
from, against and in respect of any and all claims, losses, costs, expenses,
obligations, liabilities, damages, recoveries and deficiencies, including
interest, penalties and reasonable attorneys' fees, that BCAM may incur, sustain
or suffer as a result of (i) any misrepresentation or any breach of warranty by
the Buyer under this agreement, and/or (ii) any failure by the Buyer to perform,
any of the representations, warranties, covenants or agreements of the Buyer
contained in this Agreement.
10. POST-CLOSING EVENTS.
10.1 Further Assurances. From time to time from and after the
Closing Date, the parties will execute and deliver to each other any and all
further agreements, instruments, certificates and other documents as may
reasonably be requested by the other party in order more fully to consummate the
transactions contemplated hereby.
11. COSTS.
11.1 Finder's or Broker's Fees. Each of the Buyer and BCAM
represents and warrants that neither they nor any of their respective affiliates
have dealt with any broker or finder in connection with any of the transactions
contemplated by this Agreement, and no broker or other person is entitled to any
commission or finder's fee in connection with any of these transactions.
11.2 Expenses. At the time of Closing or any termination of this
Agreement (as the case may be), or upon demand by the Buyer, BCAM shall pay all
costs and expenses incurred or to be incurred by BCAM and/or the Buyer in
negotiating and preparing this Agreement, all related agreements and
documentation, and in closing and carrying out the transactions contemplated by
this Agreement, regardless of whether such transactions ultimately close or are
consummated, which costs and expenses shall include, but not be limited to, all
reasonable legal fees and disbursements the parties may incur in connection
herewith.
12. FORM OF AGREEMENT.
12.1 Effect of Headings. The Section headings used in this Agreement
are included for purposes of convenience only, and shall not affect the
construction or interpretation of any of the provisions hereof.
7
<PAGE>
12.2 Entire Agreement; Waivers. This Agreement and the other
agreements and instruments referred to herein, constitute the entire agreement
between the parties pertaining to the subject matter hereof, and supersede all
prior agreements or understandings as to such subject matter. No party hereto
has made any representation or warranty or given any covenant to the other
except as set forth in this Agreement. No waiver of any of the provisions of
this Agreement shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a continuing
waiver. No waiver shall be binding unless executed in writing by the party
making the waiver.
12.3 Counterparts. This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
13. PARTIES.
13.1 Parties in Interest. Nothing in this Agreement, whether
expressed or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties to it and their
respective successors and permitted assigns, nor is anything in this Agreement
intended to relieve or discharge the obligations or liability of any third
persons to any party to this Agreement, nor shall any provision give any third
persons any right of subrogation or action over or against any party to this
Agreement.
13.2 Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally or by
telecopier on the party to whom notice is to be given, on the day after the
delivery thereof to a recognized overnight courier service for next-day delivery
with all charges prepaid or billed to the account of the sender, or on the third
day after mailing if mailed to the party to whom notice is to be given, by first
class mail, registered or certified, postage prepaid, and properly addressed as
follows:
(a) If to BCAM:
BCAM International, Inc.
1800 Walt Whitman Road
Melville, New York, 17747
Attention: Michael Strauss, Chairman
and Chief Executive Officer
Fax: (516) 752-3558
with copy to:
Ruskin, Moscou, Evans et al.
170 Old Country Road
Mineola, NY 11501
Attention: Norman M. Friedland, Esq.
8
<PAGE>
(b) If to the Buyer:
IMPLEO, LLC
c/o Wexford Management, LLC
411 West Putnam Avenue
Greenwich, Connecticut 06803
Attention: Joseph Jacobs, President
Fax: (203) 862-7320
with a copy to:
Greenberg, Traurig
200 Park Avenue
New York, New York 10166
Attention: Shahe Sinanian, Esquire
Fax: (212) 801-6400
or to such other address as either party shall have specified by notice in
writing given to the other party.
14. MISCELLANEOUS.
14.1 Amendments and Modifications. No amendment or modification of
this Agreement shall be valid unless made in writing and signed by or on behalf
of the party to be charged therewith.
14.2 Non-Assignability; Binding Effect. Neither this Agreement, nor
any of the rights or obligations of the parties hereunder, shall be assignable
by any party hereto without the prior written consent of all other parties
hereto. Otherwise, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
14.3 Governing Law; Jurisdiction. This Agreement shall be construed
and interpreted and the rights granted herein governed in accordance with the
laws of the State of New York applicable to contracts made and to be performed
wholly within such State.
14.4 Choice of Forum; Waiver of Trial by Jury. Any suit, action or
proceeding brought by either party against the other party for claims arising
out of this Agreement shall be brought and enforced exclusively in the United
States District Court for the Southern District of New York, or in the event
that court lacks jurisdiction to hear the claim, in the New York State Supreme
Court in New York County. In any such suit, action or proceeding, each party
waives, to the fullest extent it may effectively do so, its right to a trial by
jury.
9
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on and as of
the date first set forth above.
IMPLEO, LLC
By:
-----------------------------------
Joseph Jacobs,
---------------------
BCAM INTERNATIONAL, INC.
By:
-----------------------------------
Michael Strauss, Chairman &
Chief Executive Officer
10
October 16, 1998
Mr. Michael Strauss
BCAM International, Inc.
1800 Walt Whitman Road
Melville, New York 11747
Dear Mike:
I am confirming that the agreement that Frank and I have reached
with you relative to our future relationship with BCAM and Drew is as follows:
1. Effective immediately, neither Frank nor I shall have any
liability either past or future to BCAM or Drew under the Stock Purchase
Agreement dated March 20, 1997 ("Stock Purchase Agreement"), the First Addendum
to Stock Purchase Agreement dated September 19, 1997 ("First Addendum"), the
Agreement dated February 26, 1998 ("February Agreement"), the Piggy Back
Registration Rights Agreement dated September 19, 1997 ("Registration
Agreement"), or either of our Employment Agreements dated September 19, 1997. In
addition thereto, BCAM and Drew each release both Frank and me from any claims
which either BCAM or Drew may have or may in the future have for damages or
indemnification (I) under any of the aforesaid agreements, including, but not
limited to, damages arising from an action brought by Ulin & Holland (which was
the subject of the February Agreement), and/or (ii) as a result of any other
actions or non-actions of either Frank or me prior to the date hereof.
2. My Employment Agreement shall remain in full force and effect
until November 1, 1998, at which time it shall terminate and no longer be in
force and effect. Drew shall pay me in full for my services through that date.
Upon such termination, a severance arrangement set forth in an agreement to be
dated November 1, 1998 which you have agreed to execute contemporaneously with
your acknowledgment of this letter agreement will go into effect. This Severance
Agreement shall supersede my Employment Agreement in all respects.
3. Effective November 1, 1998, I shall resign as a member of the
Board of Directors of Drew and from Drew's Pension Committee.
4. Both Frank and I agree to forfeit and release our respective
right to receive from BCAM the final installment of $100,000 due to each of us
under the Non-Negotiable and Non-Assignable Promissory Notes dated September
19,1 997. Drew shall make the remaining twelve (12) monthly installments of
$4,166.67, plus interest, due to each of Frank and me under said notes. (The
first of the 12 installments is due to Frank and me on October 19,1 998). All of
the other terms and conditions of said notes
<PAGE>
shall remain in full force and effect until said 12 additional monthly
installments have been paid by Drew to Frank and me.
5. BCAM and Drew each agree that neither Frank nor I shall be
required to return any excess distributions made to us for income taxes under
Section 2.3 of the Stock Purchase Agreement.
6. Both Frank and I each agree to fully and unconditionally release
BCAM and Drew (and any officer, employee, director or shareholder of BCAM and
Drew) from any claims (whether known or unknown, contingent or mutual) which
either Frank or I have or in the future may have for damages or indemnification
for any reason arising out of any action or inaction during any point in time up
to the date hereof as a result of any of the representations or warranties made
in the Stock Purchase Agreement, or, in my case, for any failure of BCAM to
fulfill any of its obligations under the Registration Agreement, or the
Employment Agreement.
If the foregoing sets forth our agreement, please sign below on
behalf of both BCAM and Drew.
Sincerely,
Charles G. Schuyler
Accepted and agreed to on October 16, 1998.
BCAM International, Inc.
By:
----------------------- ------------------------
Michael Strauss Frank Shyjka
Drew Shoe Corp.
aka Drew Technologies, Inc.
By:
-----------------------
RELEASE, CANCELLATION AND DISCHARGE
OF
GUARANTY AGREEMENT
OF
BCAM INTERNATIONAL, INC.
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, BCAM International, Inc. ("BCAM") entered into a Continuing
Guaranty dated September 19, 1997 (the "Guaranty"), with Bank One, National
Association (the "Bank") to guarantee the payment of the obligations of Drew
Shoe Corporation (the "Company") pursuant to (a) a certain Loan and Security
Agreement by and between the Company and the Bank, dated as of September 19,
1997, and all amendments, modifications, and supplements thereto from time to
time, including but not limited to a certain First Amendment to Loan and
Security Agreement dated as of May 14, 1998, and (b) various promissory notes
executed by the Company dated various dates; and
WHEREAS, the Bank wishes to release, cancel and discharge the Guaranty.
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the Bank does hereby release, cancel and discharge BCAM
from all of its duties and obligations to the Bank under the Guaranty, and the
Guaranty is hereby released, cancelled and discharged.
IN WITNESS WHEREOF, the Bank has caused this instrument to be executed in
its corporate name, by its duly authorized officer as of the 23rd day of
October, 1998.
BANK ONE, NATIONAL ASSOCIATION
By:
Its:
