EXHIBIT 10(m)
CONFORMED COPY
STOCKHOLDER AGREEMENT
AGREEMENT dated as of January 21, 1998 (the "Agreement"), by and
among Hach Company, a Delaware corporation ("Buyer"), and Harry Stephenson,
("Stockholder").
WHEREAS, Buyer, Hach Acquisition Corp. ("Mergerco") and
Environmental Test Systems, Inc. (the "Company" or "ETS") have concurrently
herewith entered into an Agreement and Plan of Merger dated as of January 21,
1998 (as it may be amended from time to time, the "Merger Agreement")
pursuant to which the Company will, at the Effective Time, be merged with and
into Mergerco a direct, wholly owned subsidiary of Buyer;
WHEREAS, the Stockholder is the holder of the majority of the
outstanding shares of common stock of the Company and desires that the
Company enter into the Merger Agreement;
WHEREAS, in furtherance of the purposes of the Merger Agreement and
as a condition to the willingness of Buyer and Mergerco to enter into the
Merger Agreement, the parties hereto intend to take certain actions related
to the Merger Agreement; and
WHEREAS, capitalized terms used herein without definition shall
have the meanings assigned to them in the Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE I
IRREVOCABLE PROXY
1.1 GRANT OF IRREVOCABLE PROXY. (a) Solely for the purpose of
securing the approval and adoption by the stockholders of the Company of the
Merger Agreement and the consummation of the transactions contemplated
thereby and to prevent any action including, without limitation, any other
merger, consolidation, sale of substantially all of the assets,
reorganization or recapitalization, liquidation or winding up of the Company
or any other extraordinary transaction involving the Company or any other
corporate action the consummation of which would, directly or indirectly, in
any way frustrate the purposes of, or prevent or delay the consummation of,
the transactions contemplated by this Agreement or the Merger Agreement (i)
all rights and powers of the Stockholder with respect to his shares of ETS
Class B Stock that he may acquire (collectively the "Proxy Shares"), to vote,
give approvals, consent, call meetings, give, receive and waive notices of
meetings, grant proxies to others and (ii) all other voting, approval,
consent, waiver or similar rights and powers which the Stockholder possesses
or may in the future possess as beneficial owner of the Proxy Shares, in such
manner as the Buyer may, in its sole discretion, deem appropriate or
desirable solely in order to accomplish such purpose;
provided, however, that the Stockholder hereby retains all other voting and
other rights with respect to the Proxy Shares, including without limitation,
the power to vote to elect or remove directors of ETS. By giving this proxy
the Stockholder hereby revokes any other proxy granted by him to vote any of
the Proxy Shares. The power and authority hereby conferred shall not be
terminated by any act of the Stockholder or by operation of law, by lack of
appropriate power or authority, or by the occurrence of any other event or
events except the termination of the Merger Agreement in accordance with its
terms and shall be binding upon all its beneficiaries, distributees,
successors, assigns and legal representatives.
(b) This proxy is irrevocable, is coupled with an interest,
is granted in consideration of Buyer's entering into the Merger Agreement and
does not constitute any transfer of shares of ETS Class B Common Stock. This
proxy shall terminate upon termination of the Merger Agreement in accordance
with its terms.
(c) The Stockholder shall not take any action to sell or
pledge or agree to sell or pledge any Proxy Shares to any Person (as defined
below) other than Buyer or to grant another proxy to any Person, to solicit,
initiate or encourage, or to vote any Proxy Shares in favor of the approval
of any merger, consolidation, sale of substantially all of the assets,
reorganization or recapitalization, liquidation or winding up of the Company
or any other extraordinary transaction involving the Company, or any other
corporate action the consummation of which would directly or indirectly, in
any way frustrate the purposes of, or prevent or delay the consummation of
the transactions contemplated by this Agreement and the Merger Agreement. The
Obligations of Stockholder under this paragraph shall terminate upon
termination of the Merger Agreement in accordance with its terms. For the
purposes of this Agreement, "Person" shall mean an individual, partnership,
corporation (including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
(d) If the proxy granted in Section 1.1(a) is invalid or is
ineffective for any reason, the Stockholder hereby irrevocably agrees to vote
in favor of the Merger Agreement at any meeting or meetings or in connection
with any action by consent of the stockholders of the Company.
1.2 ACTIONS WITH RESPECT TO AFFILIATES. The Stockholder agrees to
use his reasonable efforts to cause the Company to perform all obligations
and agreements and comply with all covenants and satisfy all conditions
required by the Merger Agreement to be performed, complied with or satisfied
by the Company.
1.3 DELIVERY OF PROXY. The Stockholder agrees that the Buyer may
deliver a copy of this Agreement to the Secretary of the Company and to any
inspector or judges of elections, transfer agents, registrars or others to
whom such notice may be necessary in order to accomplish the purpose
described in Section 1.1(a).
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to Buyer and
Mergerco as follows:
2.1 AUTHORITY RELATIVE TO THIS AGREEMENT. The Stockholder has
full right, power and authority to execute and deliver this Agreement and to
carry out his obligations hereunder including the right to grant an
irrevocable proxy with respect to the Proxy Shares and to enter into and
perform the Escrow Agreement and the Stockholder's agreement to be bound by
Article 11 of the Merger Agreement (the "Article 11 Agreement"). This
Agreement, the Escrow Agreement and the Article 11 Agreement have been duly
and validly executed and delivered by the Stockholder and constitute legal,
valid and binding agreements of the Stockholder, enforceable against the
Stockholder in accordance with their respective terms, except as the
enforceability thereof may be limited by (i) any applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other
similar laws now or hereafter in effect affecting creditors' rights
generally, and (ii) general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
2.2 CONSENTS AND APPROVALS; NO VIOLATION. None of the execution
and delivery and performance by the Stockholder of this Agreement, the Escrow
Agreement or the Article 11 Agreement nor the consummation by the Stockholder
of the transactions contemplated hereby or thereby or compliance by the
Stockholder with any of the provisions hereof (including the grant of the
irrevocable proxy with respect to the Proxy Shares) or thereof will (i)
require any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority or any court or any
other third party, except for those described in the Merger Agreement or the
Schedules thereto; (ii) violate or conflict with any judgment, order, writ,
injunction, decree, prohibition, statute, rule or regulation applicable to
the Stockholder; or (iii) result in a default or the breach of any note,
agreement or other instrument or obligation to which the Stockholder may be
bound.
2.3 OWNERSHIP. As of the date hereof and as of the Effective
Time, the Stockholder beneficially owns with power to vote 476,756 shares of
ETS Class B Common Stock, free and clear of any and all claims, liens,
charges, encumbrances, covenants, conditions, restrictions, voting trust
arrangements, options and adverse claims or rights whatsoever, except, for
those granted hereby. The Stockholder does not own of record or beneficially
any other shares of capital stock of the Company or other securities
representing or convertible into shares of capital stock of the Company
except as set forth in the previous sentence. There are no options, warrants,
calls, commitments or agreements of any nature whatsoever pursuant to which
any Person will have the right to purchase or otherwise acquire the Proxy
Shares; except as provided in this Agreement, the Stockholder has not granted
or agreed to grant any proxy or entered into any voting trust, vote pooling
or other agreement with respect to the right to vote or give consents or
approvals of any kind as to the Proxy Shares.
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2.4 FINDER'S FEES. Except as set forth in the Merger Agreement or
the Schedules thereto, there is no investment banker, broker, finder or other
similar intermediary which has been retained by or is authorized to act on
behalf, of the Stockholder or any of his Affiliates who might be entitled to
any fee or commission from Buyer, the Company or any of their Affiliates upon
consummation of the transactions contemplated by this Agreement or the Merger
Agreement.
2.5 ACCESS TO INFORMATION. The Stockholder has received all
information that he believes is necessary for him to evaluate the
transactions contemplated by this Agreement, the Escrow Agreement and the
Merger Agreement and to grant the proxy contemplated by Article I hereof.
2.6 COOPERATION. The Stockholder will take all action reasonably
necessary in order that his representations and warranties set forth in this
Agreement shall be true and correct at all times during the term of this
Agreement.
ARTICLE III
TERMINATION
3.1 TERMINATION. This Agreement may be terminated at any time by
mutual consent of all of the parties hereto, and this Agreement will
terminate automatically if the Merger Agreement is terminated in accordance
with the terms thereof.
ARTICLE IV
SURVIVAL; INDEMNIFICATION
4.1 SURVIVAL. All representations, warranties, covenants and
agreements contained in this Agreement shall survive (and not be affected in
any respect by) the Effective Time.
4.2 STOCKHOLDER'S INDEMNIFICATION. The Stockholder agrees to
indemnify, defend, and hold harmless Buyer and Mergerco and their Affiliates
and their respective officers, directors, employees and agents against and in
respect of any and all losses, damages, claims, liabilities, actions, suits,
proceedings, and costs and expenses of defense thereof, including reasonable
attorney's fees and expenses which fees and expenses will be payable at least
quarterly suffered or incurred by Buyer, Mergerco or any such other
indemnified person by reason of, resulting from or arising out of (i) the
breach or inaccuracy of any representation or warranty of Stockholder
contained in this Agreement, and (ii) the breach by Stockholder of any
covenant or other agreement which is contained in this Agreement.
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ARTICLE V
MISCELLANEOUS
5.1 NOTICES. All notices or other communications required or
permitted hereunder shall be given in writing and shall be delivered or sent,
by telecopy (or like transmission) with a conforming copy by first class U.S.
Mail, postage prepaid, by delivery against receipt from the parties to whom
it is given, by registered or certified U. S. Mail, or by overnight express
delivery service as follows:
If to the Representative: Harry Stephenson
Environmental Test Systems, Inc.
23575 County Road 106
P. O. Box 4659
Elkhart, IN 46514-0659
Fax No.: (219) 262-2495
with a copy (which William R. Neale, Esq.
shall not constitute Krieg, DeVault, Alexander & Capehart
notice) to: One Indiana Square, Suite 2800
Indianapolis, IN 46204-2017
Fax No. (317) 636-1507
If to Hach: Gary R. Dreher
Hach Company
5600 Lindbergh Drive
Loveland, CO 80538
Fax No. (970) 962-6740
with a copy (which Robert O. Case, Esq.
shall not constitute McBride, Baker & Coles
notice) to: 500 W. Madison St., 40th Floor
Chicago, IL 60661-2511
Fax No. (312) 993-9350
or such other address as a party may from time to time designate in writing
in accordance with this Section. All such notices, requests or other
communication shall be effective (a) if delivered by hand, when delivered;
(b) if mailed in the manner provided herein, five (5) business days after
deposit with the United States Postal Service except that confirmation copies
of telecopy notice shall be deemed to be effective on the date mailed; (c) if
delivered by overnight express delivery service, on the next business day
after deposit with such service; and (d) if by telecopier, on the next
business day if also confirmed by mail in the manner provided herein.
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5.2 HEADINGS. The article and section headings herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any provision hereof.
5.3 ASSIGNMENT. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns (which shall include any
successor by merger or consolidation, or by transfer or purchase of all or
substantially all the assets or business, of any party hereto); PROVIDED that
neither this Agreement nor any of the rights, interests, or obligations
hereunder may be assigned by either party without the prior written consent
of the other.
5.4 ENTIRE AGREEMENT. This Agreement, the Merger Agreement, the
Escrow Agreement and the Confidentiality Agreements and other agreements
referred to in the Merger Agreement embody the entire agreement and
understanding of the parties with respect to the transactions contemplated
hereby and thereby and supersede all prior written or oral commitments,
arrangements or understandings with respect thereto.
5.5 MODIFICATIONS, AMENDMENTS AND WAIVERS. (a) At any time, to
the extent permitted by law, (i) the parties hereto may, only by written
agreement, modify, amend or supplement any term or provision of this
Agreement and (ii) any term or provision of this Agreement may be waived only
in writing by the party which is entitled to the benefits thereof.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
5.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall be considered one and same agreement and
each of which shall be deemed an original. This Agreement shall become
effective when each party hereto shall have received counterparts hereof
signed by all of the other parties hereto.
5.7 NO THIRD PARTY BENEFICIARY. Nothing in this Agreement is
intended, or shall be construed, to confer upon or give any person other than
the parties hereto, the indemnified persons referred to in Section 4.2 and
their respective successors and permitted assigns, any rights or remedies
under or by reason of this Agreement.
5.8 SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement, or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction.
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5.9 SPECIFIC PERFORMANCE. Each of the parties hereto acknowledges
and agrees that irreparable injury would occur in the event any of the
provisions of this Agreement were not performed in accordance with its
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall, in addition to any other remedy to which they may be entitled
at law or in equity, be entitled to seek an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to seek to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court.
5.10 EXPENSES. Except as set forth herein, all costs and expenses
incurred in connection with this Agreement shall be paid by the party
incurring such cost or expense.
5.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE.
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[ SIGNATURE PAGE FOR STOCKHOLDER'S AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be duly
executed as of the day and year written above.
HACH COMPANY
By: /s/ Bruce J. Hach
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Bruce J. Hach, President
/s/ Harry Stephenson
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Harry Stephenson
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