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TENDER AGREEMENT
TENDER AGREEMENT dated as of July _____, 2000 by and among
BioShield Technologies, Inc., a Georgia corporation ("Buyer"), and the holders
(the "Stockholders") of the shares of common stock, $0.10 par value (the
"Shares"), of Arrow-Magnolia International, Inc., a Texas corporation (the
"Company"), listed on the signature pages hereof.
In order to induce Buyer to enter into an Acquisition
Agreement (the "Agreement") with the Company, Buyer has requested that the
Stockholders, and the Stockholders have agreed, to enter into this Agreement.
The parties hereto agree as follows:
ARTICLE I
TENDER OFFER
SECTION 1.1. TENDER OF SHARES. (a) Each Stockholder hereby
agrees, pursuant to the terms and subject to the conditions set forth herein, to
tender for exchange in the Offer (as defined in the Agreement) all Shares
currently owned by such Stockholder as set forth on the signature page hereto
and any additional Shares acquired by such Stockholder (whether by purchase or
otherwise) after the date of this Agreement (such "Stockholder's Shares" and,
collectively, the "Stockholder Shares").
(b) Prior to the date Buyer shall first accept Shares pursuant
to the Offer, each Stockholder shall, as appropriate, (x) deliver to the
Exchange Agent (the "Exchange Agent") designated in the Offer (i) a letter of
transmittal with respect to such Stockholder's Shares complying with the terms
of the Offer together with instructions directing the Exchange Agent to make
payment for such Shares directly to the Stockholder, (ii) a certificate or
certificates representing such Stockholder's Shares and (iii) all other
documents or instruments required to be delivered pursuant to the terms of the
Offer (such documents in clauses (i) through (iii) collectively being
hereinafter referred to as the "Tender Documents"), and/or (y) instruct its
broker or such other person who is the holder of record of any Shares
Beneficially Owned (as defined herein) by such Stockholder to tender such Shares
for exchange in the Offer pursuant to the terms and conditions of the Offer.
(c) No Stockholder shall withdraw any tender effected in
accordance with Section 1.1(b).
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each of the Stockholders severally represents and warrants to
the Buyer that:
SECTION 2.1. VALID TITLE. Subject to any applicable community
property laws, such Stockholder is the sole, true, lawful and beneficial owner
of such Stockholder's Shares with no restrictions on such Stockholder's voting
rights or rights of disposition pertaining thereto, except for any such
restrictions contemplated herein. None of such Stockholder's Shares is subject
to any voting trust or other agreement or arrangement with respect to the voting
of such Shares.
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SECTION 2.2. NON-CONTRAVENTION. Subject to compliance with
state and federal securities laws, as applicable, the execution, delivery and
performance by such Stockholder of this Agreement and, the consummation of the
transactions contemplated hereby (i) are within such Stockholder's powers, have
been duly authorized by all necessary action (including any consultation,
approval or other action by or with any other person), (ii) require no action by
or in respect of, or filing with, any governmental body, agency, official or
authority and (iii) do not and will not contravene or constitute a default
under, or give rise to a right of termination, cancellation or acceleration of
any right or obligation of such Stockholder or to a loss of any material benefit
of such Stockholder under, any provision of applicable law or regulation or of
any agreement, judgment, injunction, order, decree, or other instrument binding
on such Stockholder or result in the imposition of any lien on any asset of such
Stockholder other than any such conflicts, breaches, violations, defaults,
obligations, rights or losses that individually or in the aggregate would not
(a) materially impair the ability of Stockholder to perform such Stockholder's
obligations under this Agreement or (b) prevent or delay the consummation of any
of the transactions contemplated hereby. No consent, approval, order or
authorization of, or registration, declaration or filing with or exemption by
any Federal, state or local government or any court, administrative or
regulatory agency or commission or other governmental authority or agency,
domestic or foreign, is required by or with respect to such Stockholder in
connection with the execution and delivery of this Agreement by such Stockholder
or the consummation by such Stockholder of the transactions contemplated by this
Agreement, except for applicable requirements, if any, of the Securities Act of
1933, as amended (the "Securities Act") and the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the rules and regulations thereunder. If
this Agreement is being executed in a representative or fiduciary capacity, the
person signing this Agreement has full power and authority to enter into and
perform such Agreement.
SECTION 2.3. BINDING EFFECT. This Agreement has been duly
executed and delivered by such Stockholder and, assuming that this Agreement
constitutes the valid and binding obligations of the other parties hereto, is
the valid and binding agreement of such Stockholder, enforceable against such
Stockholder in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and to general principles of
equity.
SECTION 2.4. TOTAL SHARES. Each Stockholder is the record and
Beneficial Owner of the number of Shares set forth beneath such Stockholder's
name on the signature pages hereto. Such Shares constitute all of the Shares
owned of record or Beneficially Owned by such Stockholder as of the date hereof.
Except as set forth on such signature pages, neither such Stockholder nor any
beneficial owner or owners of such Stockholder's Shares own any options to
purchase or rights to subscribe for or otherwise acquire any securities of the
Company. Each Stockholder has sole voting power, sole power of disposition, sole
power of conversion and sole power to agree to all of the matters set forth in
this Agreement, in each case with respect to all of the Shares beneficially
owned by such Stockholder with no limitations, qualifications or restrictions on
such rights, subject to applicable securities laws and the terms of this
Agreement. The terms "Beneficially Own" or "Beneficial Ownership" with respect
to any securities shall mean having "Beneficial Ownership" of such securities as
determined pursuant to Rule 13d-3 under the Exchange Act.
SECTION 2.5. FINDER'S FEES. No investment banker, broker or
finder is entitled to a commission or fee from Buyer in respect of this
Agreement based upon any arrangement or agreement made by or on behalf of such
Stockholder.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer represents and warrants to each of the Stockholders:
SECTION 3.1. CORPORATE POWER AND AUTHORITY. Buyer has all
requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution, delivery and performance by
Buyer of this Agreement and the consummation by Buyer of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Buyer. This Agreement has been duly executed and delivered by
Buyer and is a valid and binding agreement of Buyer, enforceable against it in
accordance with its terms.
SECTION 3.2. NON-CONTRAVENTION. The execution, delivery and
performance by Buyer of this Agreement and, subject to compliance with state and
federal securities laws, as applicable, the consummation of the transactions
contemplated hereby (i) require no action by or in respect of, or filing with,
any governmental body, agency, official or authority and (ii) do not and will
not contravene or constitute a default under, or give rise to a right of
termination, cancellation or acceleration of any right or obligation of Buyer or
to a loss of any material benefit of Buyer under, any provision of applicable
law or regulation or of any agreement, judgment, injunction, order, decree, or
other instrument binding on Buyer or result in the imposition of any lien on any
asset of Buyer other than any such conflicts, breaches, violations, defaults,
obligations, rights or losses that individually or in the aggregate would not
(a) materially impair the ability of Buyer to perform Buyer's obligations under
this Agreement or (b) prevent or delay the consummation of any of the
transactions contemplated hereby. No consent, approval, order or authorization
of, or registration, declaration or filing with or exemption by any Federal,
state or local government or any court, administrative or regulatory agency or
commission or other governmental authority or agency, domestic or foreign, is
required by or with respect to Buyer in connection with the execution and
delivery of this Agreement by Buyer or the consummation by Buyer of the
transactions contemplated by this Agreement, except for applicable requirements,
if any, of the Securities Act, and Sections 13 and 16 of the Exchange Act and
the rules and regulations thereunder.
ARTICLE IV
COVENANTS OF THE STOCKHOLDERS
Each of the Stockholders hereby covenants and agrees that:
SECTION 4.1. NO PROXIES FOR OR ENCUMBRANCES ON STOCKHOLDER
SHARES. Except pursuant to the terms of this Agreement or the Tender Documents,
such Stockholder shall not, without the prior written consent of Buyer, directly
or indirectly, (i) grant any proxies (other than proxies relating to the
election of management's slate of directors at an annual meeting of the
Company's stockholders, and other routine matters which would not require the
filing of a preliminary proxy statement under Rule 14a-6(a) of the Exchange Act)
or enter into any voting trust or other agreement or arrangement with respect to
the voting of any such Stockholder's Shares or (ii) sell, assign, transfer,
encumber or otherwise dispose of, or enter into any contract, option or other
arrangement or understanding with respect to the direct or indirect sale,
assignment, transfer, encumbrance or other disposition of, any such
Stockholder's Shares during the term of this Agreement. Except as permitted by
the preceding sentences, such Stockholder shall not seek or solicit any such
sale, assignment, transfer, encumbrance or other disposition or any such
contract, option or other arrangement or assignment or understanding and agrees
to notify Buyer promptly and to provide all details requested by Buyer if such
Stockholder shall be approached or solicited, directly or indirectly, by any
person with respect to any of the foregoing.
SECTION 4.2. NO SHOPPING. Such Stockholder, in the capacity as
a stockholder, shall not directly or indirectly (i) subject to the fiduciary
duty under applicable law of such Stockholder as a director of the Company (if
such Stockholder is such a director) as further provided in the Agreement,
solicit, initiate or encourage (or authorize any person to solicit, initiate or
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encourage) any inquiry, proposal or offer from any person to acquire the
business, property or capital stock of the Company or any direct or indirect
subsidiary thereof, or any acquisition of a substantial equity interest in, or a
substantial amount of the assets of, the Company or any direct or indirect
subsidiary thereof, whether by merger, purchase of assets, tender offer or other
transaction or (ii) subject to the fiduciary duty under applicable law of such
Stockholder as a director of the Company (if such Stockholder is such a
director) as further provided in the Agreement, participate in any discussion or
negotiations regarding, or furnish to any other person any information with
respect to, or otherwise cooperate in any way with, or participate in,
facilitate or encourage any effort or attempt by any other person to do or seek
any of the foregoing. Such Stockholder shall promptly advise Buyer of the terms
of any communications it may receive in the capacity as a stockholder relating
to any of the foregoing.
SECTION 4.3. CONDUCT OF STOCKHOLDERS. Such Stockholder will not
(i) take, agree or commit to take any action that would make any
representation and warranty of such Stockholder hereunder inaccurate in any
respect as of any time prior to the termination of this Agreement or (ii) omit,
or agree or commit to omit, to take any action necessary to prevent any such
representation or warranty from being inaccurate in any respect at any such
time.
SECTION 4.4. DISCLOSURE. Each Stockholder hereby permits Buyer to
publish and disclose in the offer documents (including all documents and
schedules filed with the SEC) their identity and ownership of the Shares and the
nature of their commitments, arrangements and understandings under this
Agreement.
ARTICLE V
COVENANTS OF THE BUYER
Buyer hereby covenants and agrees that:
SECTION 5.1. COMPANY OPTIONS. Buyer shall offer to each holder of an
outstanding option or right listed in the Company Disclosure Schedule (each, a
"Company Option") to purchase Shares granted under any stock option plan,
warrant, program or agreement to which the Company or any of its subsidiaries is
a party (collectively, the "Company Stock Plans") to purchase such Company
Option, and agrees to purchase all Company Options from the Stockholders and any
other holders who tender Company Options, upon the consummation of the Offer in
exchange for an amount in cash equal to the product of (A) the excess, if any,
of (x) the Cancellation Price (as hereinafter defined) over (y) the per share
exercise price of such Company Option multiplied by (B) the number of Shares
subject to such Company Option (whether or not then vested or exercisable). Any
such payment shall be further reduced by any income tax or employment tax
withholding required under the Internal Revenue Code of 1986, as amended (the
"Code"). The Cancellation Price shall be $4.75.
SECTION 5.2. BUYER'S OPTIONS. Buyer shall use its best reasonable
efforts to issue upon consummation of the Offer incentive stock options
qualified under Section 422 of the Internal Revenue Code (and, in the event that
such options can not, with such efforts, be so qualified, non-qualified stock
options) to each of the individuals named in the table below exercisable to
acquire the numbers of shares indicated opposite their names respectively. Such
options shall vest in equal increments of one-third annually over a period of
three years (subject to vesting provisions set forth in the Buyer's existing
stock option plan) and shall have an exercise price equal to the Average Closing
Bid Price (as defined in the Agreement). Each option shall be in form and
substance consistent with the Buyer's existing stock option plan.
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Name Number of Shares
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Xxxxxx Xxxxxx 100,000
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Xxxx X. Xxxxxx 100,000
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Xxxx Xxxxxx 100,000
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Xxxx Xxxxxx 100,000
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Xxxxxxxx Xxxxxxxx 10,000
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Xxxx Xxxxxxxx 10,000
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Xxxxx Xxxx 10,000
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Xxxxx Xxxxxx 10,000
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Xxxx Xxxxxxxx 10,000
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Xxxx Xxxxxxxx 10,000
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Xxxx Xxxxxxx 10,000
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Xxxxx Xxxxxx 5,000
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Xxx Xxxxxx 5,000
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Xxxxxx Xxx 10,000
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Xxxxxx Xxxxxxx, Xx. 5,000
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Xxxxxxx Xxxxx 5,000
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Xxxxxx Xxxxxxxx 10,000
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In the event that Xxxxxx Xxxxxx dies before full vesting in all of his stock
options in Buyer's stock as described in this Section 5.2 (the "Stock Options"),
he shall become fully vested. In the event that Xxxxxx Xxxxxx'x employment is
terminated by the Company, other than pursuant to Section 8(c) of his Executive
Employment Agreement to be executed as provided in the Agreement (the
"Employment Agreement"), the Stock Options shall continue to vest according to
its original vesting schedule. In the event that Xxxxxx Xxxxxx is terminated
pursuant to Section 8(c) of the Employment Agreement, all unvested Stock Options
shall terminate and be in no further force and effect as of the date of such
termination.
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ARTICLE VI
CONDITIONS TO CLOSING
The obligations of the Stockholders under this Tender Agreement shall
be subject to and conditioned upon the performance by Buyer of its covenants,
obligations and agreements under this Tender Agreement and the Agreement and the
truth and accuracy of the representations and warranties made by Buyer in this
Tender Agreement and the Agreement.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. EXPENSES. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost or
expense.
SECTION 7.2. ADDITIONAL AGREEMENTS. Subject to the terms and
conditions of this Agreement, each of the Buyer and each Stockholder, in the
capacity as a Stockholder, agrees to use all reasonable efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations and which
may be required under any agreements, contracts, commitments, instruments,
understandings, arrangements or restrictions of any kind to which such party is
a party or by which such party is governed or bound, to consummate and make
effective the transactions contemplated by this Agreement.
SECTION 7.3. TERMINATION. This Agreement will terminate
immediately upon the termination of the Agreement in accordance with its terms.
SECTION 7.4. SPECIFIC PERFORMANCE. The parties hereto agree
that the Buyer may be irreparably damaged if for any reason any Stockholder
failed to tender in the Offer, and to not withdraw, such Stockholder's Shares
(or other securities covered by this Agreement) in accordance with the terms of
this Agreement or to perform any of its other obligations under this Agreement,
and that the Buyer would not have an adequate remedy at law for money damages in
such event. Accordingly, the Buyer shall be entitled to specific performance and
injunctive and other equitable relief to enforce the performance of this
Agreement by each Stockholder. This provision is without prejudice to any other
rights that the Buyer may have against any Stockholder for any failure to
perform its obligations under this Agreement.
SECTION 7.5. NOTICES. All notices, requests, claims, demands
and other communications hereunder shall be deemed to have been duly given when
delivered in person, by telecopy, or by registered or certified mail (postage
prepaid, return receipt requested) to such party at its address set forth on the
signature page hereto.
SECTION 7.6. AMENDMENTS. This Agreement may not be modified,
amended, altered or supplemented, except upon the execution and delivery of a
written agreement executed by all the parties hereto.
SECTION 7.7. SUCCESSORS AND ASSIGNS. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that Buyer may assign its
rights and
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obligations to any affiliate of Buyer and provided, further, that no Stockholder
may assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement without the consent of the Buyer.
SECTION 7.8. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF GEORGIA WITHOUT
GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
SECTION 7.9. JURISDICTION. Each of the parties hereto (a)
consents to submit itself to the exclusive personal jurisdiction of any court of
the United States located in the State of Georgia or of any Georgia state court
in the event any dispute arises out of this Agreement or the transactions
contemplated by this Agreement, and (b) agrees that it will not attempt to deny
or defeat such personal jurisdiction by motion or other request for leave from
any such court.
SECTION 7.10. COUNTERPARTS; EFFECTIVENESS. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
SECTION 7.11. THIRD-PARTY BENEFICIARIES. Each holder of a
Company option and each of the persons named in the table under Section 5.2
shall be third-party beneficiaries of this Tender Agreement and shall be
entitled to enforce the provisions of Sections 5.1 and 5.2 for their benefit as
applicable.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
BIOSHIELD TECHNOLOGIES, INC.
By:
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Name:
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Title:
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Xxxxxx Xxxxxx,
Shares: 861,634
Options: 204,974
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Xxxx Xxxxxx
Shares: 557,805
Options: 193,261
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Xxxx Xxxxxx
Shares: 277,211
Options: 187,404
