SEC Info - Hach Co - ‘S-4’ on 3/26/98

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Hach Co – ‘S-4’ on 3/26/98

As of: Thursday, 3/26/98 · Accession #: 1047469-98-11768 · File #: 333-48729

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/26/98  Hach Co                           S-4                   11:891K                                   Merrill Corp/New/FA

Registration of Securities Issued in a Business-Combination Transaction — Form S-4
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: S-4         Registration of Securities Issued in a               215    905K 
                          Business-Combination Transaction                       
 2: EX-2.A      Plan of Acquisition, Reorganization, Arrangement,     72    289K 
                          Liquidation or Succession                              
 3: EX-5        Opinion re: Legality                                   2     13K 
 4: EX-8        Opinion re: Tax Matters                               15     51K 
 5: EX-10.M     Material Contract                                      8     30K 
 6: EX-10.N     Material Contract                                      4     18K 
 7: EX-10.O     Material Contract                                     15     61K 
 8: EX-21       Subsidiaries of the Registrant                         1      6K 
 9: EX-23.C     Consent of Experts or Counsel                          1      7K 
10: EX-23.D     Consent of Experts or Counsel                          1      7K 
11: EX-99       Miscellaneous Exhibit                                  2     12K

S-4 — Registration of Securities Issued in a Business-Combination Transaction
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Access to Information; Confidentiality Accounting Treatment Action Without a Meeting Additional Class A Merger Consideration Additional Class B Merger Consideration Additional Information Concerning Hach Additional Information Regarding ETS Additional Voting Rights of Hach Class A Common Stock Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option Values Agreements with Respect to Employee Benefits Following the Merger Amendment and Waiver Amendment of Corporate Charter Antitakeover Provisions Assets Authorized Stock Availability of Materials Available Information Average Market Price Background of the Merger Backlog Board of Directors' Recommendations Break-up Fee Business of Ets Business of Hach By-laws Calculation of Registration Fee Capitalization of Hach and Exchange of Shares; Fractional Shares Cautionary Statement Certain Federal Income Tax Consequences Certain Legal Matters Certain Provisions of the Hach Certificate and By-laws; Anti-Takeover Provisions Certain Transactions and Business Relationships Class A Protection Class A Protection Provision Closing Comparative Per Share Data Comparative Rights of Hach Stockholders and ETS Shareholders Competition Conditions to the Merger Conduct of Business Pending the Merger Conversion of ETS Common Stocks Delaware Business Combination Statute Description of the Hach Common Stocks Directors and Officers Dissenters' Rights Dividends Dividends and Distributions Effective Time Election and Removal of Directors Employee Benefit Plans Employees Environmental Test Systems, Inc Escrow Agreement Escrow Deposit Ets ETS Class A Common Stock ETS Class B Common Stock Ets Management's Discussion and Analysis of Financial Condition and Results of Operations ETS Products and Services ETS' Reasons for the Merger; Recommendation of ETS' Board of Directors and Other Factors ETS Special Meeting Executive Employment Agreements Exhibits and Financial Statement Schedules Expenses Experts Further Action; Consents; Filings General Hach Hach Acquisition Corp Hach Company Hach Company and Environmental Test Systems, Inc. Unaudited Proforma Condensed Combined Financial Statements Hach's Reasons for the Merger; Approval of Hach's Board of Directors Indemnification and Insurance Indemnification; Escrow Indemnification of Directors and Officers Information Incorporated by Reference Interests of Certain Persons in the Merger Introduction Limitation of Director Liability in Certain Circumstances Management of ETS after the Merger Marketing and Distribution Markets and Market Prices for ETS Common Stocks Markets and Market Prices for Hach Common Stocks Matters to Be Considered Merger Agreement, The Mergers and Consolidations Merger, The No Solicitation of Transactions Notices of Certain Events Opinion of ETS ESOP Financial Advisor Patents Plan of Reorganization Preemptive Rights Primary Markets Properties Proxies Recent Developments Record Date Regulatory Matters Representations and Warranties Required Vote for Authorization of Certain Actions Research Restrictions on Resale; Affiliate Agreements Risk Factors Seasonality Security Ownership of Certain Beneficial Owners and Management Selected Historical and Pro Forma Financial Information Special Meetings Stock Options Grants in Last Fiscal Year Subsequent Class A Merger Consideration Subsequent Class B Merger Consideration Summary Summary Compensation Table Table of Contents Termination The Merger The Merger Agreement Undertakings Voting Voting Agreements Voting; Vote Required 10.10 Governing Law 10.11 Accounting Terms 10.12 Severability 10.13 Specific Performance 10.14 Third Party Beneficiaries 10.15 Certain Interpretive Matters and Definitions 10.1 Modification or Amendment 10.2 Waiver of Conditions; Investigation 10.3 Payment of Expenses 10.4 Survival 10.5 Headings 10.6 Notices 10.7 Assignment 10.8 Complete Agreement 10.9 Counterparts 11.1 Indemnification by Surrendering Stockholders 11.2 Procedures 11.3 The Representative 11.4 Effectiveness of Section 11.1 11.5 Sole and Exclusive Remedy 1.1 The Merger 1.2 Effective Time of Merger 1.3 Certificate of Incorporation; By-Laws 1.4 Directors and Officers 1.5 Taking of Necessary Action; Further Action 2.1 Conversion of Shares 2.2 Dissenting Stockholders 2.3 Exchange of Certificate 3.1 Closing 4.10 Inventories 4.11 Accounts Receivable; Returns 4.12 Intellectual Property 4.13 Absence of Material Adverse Effect; Conduct of Business 4.14 Insurance 4.16 Labor Relations 4.17 Employee Compensation 4.18 Transactions with Insiders 4.19 Environmental Matters 4.1 Organization and Good Standing 4.20 ETS Products; Regulation 4.21 Customers and Suppliers 4.22 Opinion of Financial Advisor 4.23 No Existing Discussions 4.24 Brokers 4.25 Accuracy and Completeness of All Statements 4.2 Subsidiaries 4.3 Capitalization 4.4 Authority; Noncontravention 4.5 Financial Statements 4.6 Absence of Undisclosed Liabilities 4.7 Taxes 4.8 Legal Matters 4.9 Property 5.1 Organization and Good Standing 5.2 Authority; Noncontravention 5.3 Capitalization 5.4 SEC Filings; Financial Statements 5.5 Absence of Litigation 5.6 Ownership of Mergerco; No Prior Activities 5.7 Brokers 5.8 Accuracy and Completeness of All Statements 6.10 No Solicitation of Transactions 6.11 Closing Balance Sheet and Income Statement, ETS's Financial Managers' Report 6.12 Survey and Title Policy 6.13 Approval by Mergerco Board of Directors and Sole Stockholder 6.1 Registration Statement; Proxy Statement 6.2 Shareholders' Meeting 6.3 Access; Confidentiality 6.4 Conduct of Business of ETS Prior to the Effective Time 6.5 Consents; Cooperation 6.6 Additional Agreements 6.7 Interim Financial Statements; 1997 Audited Financials 6.8 Notification of Certain Matters 7.11 Harry Stephenson Agreements 7.12 Registration Statement 7.13 Tax Opinion 7.14 Listing of Hach Common Stocks; Compliance with State Blue Sky Laws 7.15 Investment Letters 7.16 Certificates 7.17 No Adverse Changes 7.18 Disposition of Certain ETS Agreements 7.1 Representations and Warranties; Agreements 7.2 Authorization of Merger; Consents 7.3 Approval of Hach Board of Directors 7.4 Opinion of ETS's Counsel 7.5 Report of ETS's Financial Managers 7.6 Absence of Litigation 7.8 Stockholder's Agreement and Escrow Agreement 7.9 Resignations 8.10 Employment Agreements 8.11 Harry Stephenson Agreements 8.12 Escrow Agreement 8.13 Certificates 8.14 No Adverse Change 8.1 Representations and Warranties; Agreements 8.2 Authorization of the Merger 8.3 Stockholder Approvals 8.4 Opinion of Hach's Counsel 8.5 Absence of Litigation 8.6 Registration Statement 8.7 Tax Opinion 8.8 Listing of Hach Common Stocks; Compliance with State Blue Sky Laws 8.9 Investment Letters 9.1 Termination 9.2 Fees and Expenses 9.3 Procedure and Effect of Termination
1	1st Page - Filing Submission
"	Hach Company
"	Calculation of Registration Fee
2	Environmental Test Systems, Inc
3	Table of Contents
"	Information Incorporated by Reference
"	Summary
4	ETS Special Meeting
"	Business of Ets
5	Hach Company and Environmental Test Systems, Inc. Unaudited Proforma Condensed Combined Financial Statements
"	Description of the Hach Common Stocks
"	Experts
7	Available Information
9	Cautionary Statement
10	Hach Acquisition Corp
19	Markets and Market Prices for Hach Common Stocks
20	Markets and Market Prices for ETS Common Stocks
21	Comparative Per Share Data
22	Selected Historical and Pro Forma Financial Information
24	Ets Management's Discussion and Analysis of Financial Condition and Results of Operations
27	Risk Factors
"	Competition
29	General
"	Matters to Be Considered
"	Board of Directors' Recommendations
"	Record Date
"	Voting; Vote Required
30	Proxies
"	Voting Agreements
31	The Merger
"	Conversion of ETS Common Stocks
"	Introduction
"	ETS Class A Common Stock
32	Additional Class A Merger Consideration
"	Subsequent Class A Merger Consideration
"	ETS Class B Common Stock
"	Additional Class B Merger Consideration
33	Subsequent Class B Merger Consideration
"	Average Market Price
"	Background of the Merger
34	ETS' Reasons for the Merger; Recommendation of ETS' Board of Directors and Other Factors
"	Opinion of ETS ESOP Financial Advisor
37	Hach's Reasons for the Merger; Approval of Hach's Board of Directors
"	Capitalization of Hach and Exchange of Shares; Fractional Shares
38	Management of ETS after the Merger
39	Interests of Certain Persons in the Merger
"	Certain Federal Income Tax Consequences
40	Accounting Treatment
"	Regulatory Matters
41	Restrictions on Resale; Affiliate Agreements
42	Dissenters' Rights
"	The Merger Agreement
"	Effective Time
"	Representations and Warranties
43	Ets
"	Hach
"	Conduct of Business Pending the Merger
"	Notices of Certain Events
44	Access to Information; Confidentiality
"	No Solicitation of Transactions
45	Plan of Reorganization
"	Further Action; Consents; Filings
"	Conditions to the Merger
46	Termination
"	Break-up Fee
47	Amendment and Waiver
"	Agreements with Respect to Employee Benefits Following the Merger
48	Indemnification; Escrow
49	Expenses
"	Business of Hach
51	ETS Products and Services
52	Primary Markets
54	Properties
"	Marketing and Distribution
55	Seasonality
"	Availability of Materials
"	Research
"	Patents
56	Backlog
"	Employees
"	Employee Benefit Plans
63	Voting
"	Dividends and Distributions
64	Mergers and Consolidations
"	Class A Protection
66	Additional Voting Rights of Hach Class A Common Stock
67	Preemptive Rights
"	Certain Provisions of the Hach Certificate and By-laws; Anti-Takeover Provisions
68	Comparative Rights of Hach Stockholders and ETS Shareholders
"	Authorized Stock
69	Election and Removal of Directors
"	Required Vote for Authorization of Certain Actions
70	Amendment of Corporate Charter
"	Special Meetings
71	Limitation of Director Liability in Certain Circumstances
"	Indemnification and Insurance
73	Antitakeover Provisions
74	Delaware Business Combination Statute
"	Class A Protection Provision
75	Action Without a Meeting
"	By-laws
"	Dividends
76	Additional Information Concerning Hach
"	Recent Developments
77	Directors and Officers
79	Security Ownership of Certain Beneficial Owners and Management
81	Certain Transactions and Business Relationships
82	Summary Compensation Table
84	Stock Options Grants in Last Fiscal Year
85	Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option Values
86	Executive Employment Agreements
87	Additional Information Regarding ETS
92	Certain Legal Matters
95	Assets
110	3.1 Closing
111	4.25 Accuracy and Completeness of All Statements
"	6.1 Registration Statement; Proxy Statement
112	9.1 Termination
"	10.1 Modification or Amendment
114	1.1 The Merger
115	1.2 Effective Time of Merger
"	1.3 Certificate of Incorporation; By-Laws
"	1.4 Directors and Officers
"	1.5 Taking of Necessary Action; Further Action
"	2.1 Conversion of Shares
118	2.2 Dissenting Stockholders
119	2.3 Exchange of Certificate
120	Closing
"	4.1 Organization and Good Standing
"	4.2 Subsidiaries
121	4.3 Capitalization
122	4.4 Authority; Noncontravention
123	4.5 Financial Statements
124	4.6 Absence of Undisclosed Liabilities
"	4.7 Taxes
"	4.8 Legal Matters
125	4.9 Property
126	4.10 Inventories
"	4.11 Accounts Receivable; Returns
127	4.12 Intellectual Property
128	4.13 Absence of Material Adverse Effect; Conduct of Business
129	4.14 Insurance
131	4.16 Labor Relations
132	4.17 Employee Compensation
134	4.18 Transactions with Insiders
135	4.19 Environmental Matters
137	4.20 ETS Products; Regulation
"	4.21 Customers and Suppliers
"	4.22 Opinion of Financial Advisor
138	4.23 No Existing Discussions
"	4.24 Brokers
"	5.1 Organization and Good Standing
"	5.2 Authority; Noncontravention
139	5.3 Capitalization
140	5.4 SEC Filings; Financial Statements
141	5.5 Absence of Litigation
"	5.6 Ownership of Mergerco; No Prior Activities
"	5.7 Brokers
"	5.8 Accuracy and Completeness of All Statements
144	6.2 Shareholders' Meeting
"	6.3 Access; Confidentiality
"	6.4 Conduct of Business of ETS Prior to the Effective Time
147	6.5 Consents; Cooperation
148	6.6 Additional Agreements
"	6.7 Interim Financial Statements; 1997 Audited Financials
149	6.8 Notification of Certain Matters
"	6.10 No Solicitation of Transactions
150	6.11 Closing Balance Sheet and Income Statement, ETS's Financial Managers' Report
151	6.12 Survey and Title Policy
"	6.13 Approval by Mergerco Board of Directors and Sole Stockholder
155	7.1 Representations and Warranties; Agreements
"	7.2 Authorization of Merger; Consents
156	7.3 Approval of Hach Board of Directors
"	7.4 Opinion of ETS's Counsel
"	7.5 Report of ETS's Financial Managers
"	7.6 Absence of Litigation
"	7.8 Stockholder's Agreement and Escrow Agreement
157	7.9 Resignations
"	7.11 Harry Stephenson Agreements
"	7.12 Registration Statement
"	7.13 Tax Opinion
"	7.14 Listing of Hach Common Stocks; Compliance with State Blue Sky Laws
158	7.15 Investment Letters
"	7.16 Certificates
"	7.17 No Adverse Changes
"	7.18 Disposition of Certain ETS Agreements
159	8.1 Representations and Warranties; Agreements
"	8.2 Authorization of the Merger
"	8.3 Stockholder Approvals
"	8.4 Opinion of Hach's Counsel
"	8.5 Absence of Litigation
160	8.6 Registration Statement
"	8.7 Tax Opinion
"	8.8 Listing of Hach Common Stocks; Compliance with State Blue Sky Laws
"	8.9 Investment Letters
"	8.10 Employment Agreements
"	8.11 Harry Stephenson Agreements
"	8.12 Escrow Agreement
161	8.13 Certificates
"	8.14 No Adverse Change
162	9.2 Fees and Expenses
163	9.3 Procedure and Effect of Termination
164	10.2 Waiver of Conditions; Investigation
"	10.3 Payment of Expenses
"	10.4 Survival
165	10.5 Headings
"	10.6 Notices
166	10.7 Assignment
"	10.8 Complete Agreement
"	10.9 Counterparts
"	10.10 Governing Law
"	10.11 Accounting Terms
"	10.12 Severability
167	10.13 Specific Performance
"	10.14 Third Party Beneficiaries
"	10.15 Certain Interpretive Matters and Definitions
171	11.1 Indemnification by Surrendering Stockholders
172	11.2 Procedures
176	11.3 The Representative
"	11.4 Effectiveness of Section 11.1
177	11.5 Sole and Exclusive Remedy
188	Escrow Agreement
198	Escrow Deposit
207	Item 20. Indemnification of Directors and Officers
208	Item 21. Exhibits and Financial Statement Schedules
211	Item 22. Undertakings

S-4 1st Page of 215 TOC ↑Top Previous Next ↓Bottom Just 1st
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 26, 1998
Registration Statement No. ______________

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

HACH COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

3826
(PRIMARY STANDARD INDUSTRIAL
CLASSIFICATION CODE NUMBER)

Delaware 42-0704420
(STATE OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NO.)

5600 Lindbergh Drive, Loveland, Colorado 80537
(970) 669-3050
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
PRINCIPAL EXECUTIVE OFFICES)

Gary R. Dreher
Vice President and Chief Financial Officer
Hach Company
5600 Lindbergh Drive
Loveland, Colorado 80537
(970) 669-3050
(NAME, ADDRESS INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
AGENT FOR SERVICE)

COPIES TO:

Robert O. Case, Esq. William R. Neale, Esq.
McBride Baker & Coles Krieg DeVault Alexander & Capehart
500 West Madison Street, 40th Floor One Indiana Square, Suite 2800
Chicago, IL 60661 Indianapolis, IN 46204-2017
(312) 715-5785 (317) 636-4341

Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after this Registration Statement becomes
effective and upon consummation of the Merger described in the enclosed Proxy
Statement/Prospectus.

CALCULATION OF REGISTRATION FEE
--------------------------------------------------------------------------------

[Download Table]

Title
of Each Proposed Proposed
Class of Maximum Maximum Amount
Securities Amount Offering Aggregate of
to be To Be Price Per Offering Registration
Registered Registered Share Price (1) Fee (2)
---------- -------------- ---------- ---------- ------------

Common Stock,
$1.00 Par Shares N/A N/A $9,121,600 $2,691.00

Class A Common Stock,
$1.00 Par Shares N/A N/A

(1) The estimated maximum aggregate offering price of shares of the
Registrant's Common Stocks which the Registrant expects to be issued in
connection with the Merger described in the enclosed Proxy
Statement/Prospectus.

(2) Calculated in accordance with Rule 457(o) under the Securities Act of
1933 on the basis of the maximum offering price of all shares of the
Common Stocks of the Registrant to be issued in connection with the Merger
described in the enclosed Proxy Statement/Prospectus.

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a),
may determine.

S-4 2nd Page of 215 TOC 1st Previous Next ↓Bottom Just 2nd
ENVIRONMENTAL TEST SYSTEMS, INC.
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
________________ __, 1998

HACH COMPANY
PROSPECTUS
SHARES OF COMMON STOCK AND CLASS A COMMON STOCK

This Proxy Statement/Prospectus is being furnished to the shareholders
of Environmental Test Systems, Inc., an Indiana corporation ("ETS"), in
connection with the solicitation of proxies by the Board of Directors of ETS
for use at a special meeting of the shareholders of ETS (the "ETS Special
Meeting") to be held on _________________ ____, 1998 at the principal office
of ETS, 23575 County Road 106, Elkhart, Indiana 46514. The meeting is being
held to consider and vote upon a proposal to approve and adopt an Agreement
and Plan of Merger dated as of January 21, 1998, as amended as of February
26, 1998 (the "Merger Agreement") and the transactions contemplated thereby.
A copy of the Merger Agreement is attached as Appendix I to this Proxy
Statement/Prospectus. Pursuant to the Merger Agreement, Hach Company, a
Delaware corporation ("Hach"), would acquire ETS by means of a merger (the
"Merger") of ETS into Hach Acquisition Corp., a Delaware corporation and
wholly-owned subsidiary of Hach ("HAC"). In the Merger, the holders of ETS
Class A Common Stock, no par value ("ETS Class A Common Stock"), would be
entitled to receive shares of Hach Common Stock, $1.00 par value ("Hach
Common Stock"), and the holders of ETS Class B Common Stock, no par value
("ETS Class B Common Stock", and together with the ETS Class A Common Stock,
the "ETS Common Stocks") would be entitled to receive cash and shares of Hach
Common Stock and non-voting Hach Class A Common Stock, $1.00 par value ("Hach
Class A Common Stock," and, together with the Hach Common Stock, the "Hach
Common Stocks").

The Merger is contingent upon, among other things, approval of the
holders of a majority of the shares of each of the ETS Class A Common Stock
and ETS Class B Common Stock, as described in this Proxy
Statement/Prospectus. The proposed Merger will be consummated as soon as
practicable after such approvals are obtained and the other conditions to the
Merger are satisfied or waived. Hach and ETS currently expect that the Merger
will become effective on ______________ ____, 1998.

All information concerning Hach contained in this Proxy
Statement/Prospectus has been supplied by Hach, and all information
concerning ETS contained in this Proxy Statement/Prospectus has been supplied
by ETS.

This Proxy Statement/Prospectus and the accompanying forms of proxy are
first being mailed to ETS shareholders on or about ____________, 1998.

SEE "RISK FACTORS" BEGINNING ON PAGE 26 FOR A DISCUSSION OF CERTAIN
RISKS THAT SHOULD BE CONSIDERED BY ETS SHAREHOLDERS.

THE SECURITIES TO BE ISSUED PURSUANT TO THIS PROSPECTUS HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE DATE OF THIS PROXY STATEMENT/PROSPECTUS IS ______________ ____, 1998

S-4 3rd Page of 215 TOC 1st Previous Next ↓Bottom Just 3rd
PROXY STATEMENT/PROSPECTUS

TABLE OF CONTENTS

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PAGE
----

AVAILABLE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

INFORMATION INCORPORATED BY REFERENCE. . . . . . . . . . . . . . . . . . . . . . . .6

CAUTIONARY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Environmental Test Systems, Inc.. . . . . . . . . . . . . . . . . . . . . . . .9
Hach Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Hach Acquisition Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Date, Time and Place of the ETS Special Meeting . . . . . . . . . . . . . . . .9
Shareholders Entitled to Vote . . . . . . . . . . . . . . . . . . . . . . . . 10
Security Ownership by Certain Beneficial Owners and Management of ETS . . . . 10
Purpose of the Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Recommendation of the ETS Board of Directors. . . . . . . . . . . . . . . . . 11
Opinion of Financial Advisor to ETS ESOP. . . . . . . . . . . . . . . . . . . 11
Approval of Hach's Board of Directors . . . . . . . . . . . . . . . . . . . . 11
Dissenters' Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
The Merger Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Conversion of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Escrow; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Exchange of Share Certificates. . . . . . . . . . . . . . . . . . . . . . . . 13
Accounting Treatment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . 14
Management of ETS after the Merger. . . . . . . . . . . . . . . . . . . . . . 14
Interests of Certain Persons in the Merger. . . . . . . . . . . . . . . . . . 14
Conditions to the Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Effective Time of the Merger. . . . . . . . . . . . . . . . . . . . . . . . . 16
Regulatory Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Resales of Hach Common Stocks . . . . . . . . . . . . . . . . . . . . . . . . 16
Comparison of Shareholder Rights. . . . . . . . . . . . . . . . . . . . . . . 17
Shareholders' Representative. . . . . . . . . . . . . . . . . . . . . . . . . 17
Markets and Market Prices for Hach Common Stocks. . . . . . . . . . . . . . . 18
Markets and Market Prices for ETS Common Stocks . . . . . . . . . . . . . . . 18
Comparative Per Share Data. . . . . . . . . . . . . . . . . . . . . . . . . . 20
Selected Historical and Pro Forma Financial Information . . . . . . . . . . . 21

ETS MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

S-4 4th Page of 215 TOC 1st Previous Next ↓Bottom Just 4th
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ETS SPECIAL MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Matters to Be Considered. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Board of Directors' Recommendations . . . . . . . . . . . . . . . . . . . . . 28
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Voting; Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Voting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Conversion of ETS Common Stocks . . . . . . . . . . . . . . . . . . . . . . . 30
Background of the Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ETS' Reasons for the Merger; Recommendation of ETS' Board of Directors and
Other Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Opinion of ETS ESOP Financial Advisor . . . . . . . . . . . . . . . . . . . . 33
Hach's Reasons for the Merger; Approval of Hach's Board of Directors. . . . . 36
Capitalization of Hach and Exchange of Shares; Fractional Shares. . . . . . . 36
Management of ETS after the Merger. . . . . . . . . . . . . . . . . . . . . . 37
Interests of Certain Persons in the Merger. . . . . . . . . . . . . . . . . . 38
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . 38
Accounting Treatment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Regulatory Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Restrictions on Resale; Affiliate Agreements. . . . . . . . . . . . . . . . . 40
Dissenters' Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

THE MERGER AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Effective Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Representations and Warranties. . . . . . . . . . . . . . . . . . . . . . . . 41
Conduct of Business Pending the Merger. . . . . . . . . . . . . . . . . . . . 42
Notices of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Access to Information; Confidentiality. . . . . . . . . . . . . . . . . . . . 43
No Solicitation of Transactions . . . . . . . . . . . . . . . . . . . . . . . 43
Plan of Reorganization. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Further Action; Consents; Filings . . . . . . . . . . . . . . . . . . . . . . 44
Conditions to the Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Break-up Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Amendment and Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Agreements with Respect to Employee Benefits Following the Merger . . . . . . 46
Indemnification; Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

BUSINESS OF HACH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

BUSINESS OF ETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ETS Products and Services . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Primary Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Marketing and Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . 53
Seasonality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Availability of Materials . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Research. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

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Backlog . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

HACH COMPANY AND ENVIRONMENTAL TEST SYSTEMS, INC. UNAUDITED PROFORMA CONDENSED
COMBINED FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 56

DESCRIPTION OF THE HACH COMMON STOCKS. . . . . . . . . . . . . . . . . . . . . . . 62
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Voting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Dividends and Distributions . . . . . . . . . . . . . . . . . . . . . . . . . 62
Mergers and Consolidations. . . . . . . . . . . . . . . . . . . . . . . . . . 63
Class A Protection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Additional Voting Rights of Hach Class A Common Stock . . . . . . . . . . . . 65
Preemptive Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Certain Provisions of the Hach Certificate and By-laws; Anti-Takeover
Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

COMPARATIVE RIGHTS OF HACH STOCKHOLDERS AND ETS SHAREHOLDERS . . . . . . . . . . . 67
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Authorized Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Election and Removal of Directors . . . . . . . . . . . . . . . . . . . . . . 68
Required Vote for Authorization of Certain Actions. . . . . . . . . . . . . . 68
Amendment of Corporate Charter. . . . . . . . . . . . . . . . . . . . . . . . 69
Dissenters' Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Special Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Limitation of Director Liability in Certain Circumstances . . . . . . . . . . 70
Indemnification and Insurance . . . . . . . . . . . . . . . . . . . . . . . . 70
Antitakeover Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Action Without a Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . 74
By-laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Preemptive Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

ADDITIONAL INFORMATION CONCERNING HACH . . . . . . . . . . . . . . . . . . . . . . 75
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Directors and Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Security Ownership of Certain Beneficial Owners and Management. . . . . . . . 78
Certain Transactions and Business Relationships . . . . . . . . . . . . . . . 80
Summary Compensation Table. . . . . . . . . . . . . . . . . . . . . . . . . . 81
Stock Options Grants in Last Fiscal Year. . . . . . . . . . . . . . . . . . . 83
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Executive Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . 84

ADDITIONAL INFORMATION REGARDING ETS . . . . . . . . . . . . . . . . . . . . . . . 86
Directors and Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Security Ownership of Certain Beneficial Owners and Management. . . . . . . . 88
Summary Compensation Table. . . . . . . . . . . . . . . . . . . . . . . . . . 89
Executive Employment Agreement. . . . . . . . . . . . . . . . . . . . . . . . 90
Stock Options Grants in Last Fiscal Year. . . . . . . . . . . . . . . . . . . 90
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Certain Transaction and Business Relationships. . . . . . . . . . . . . . . . 90

EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

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CERTAIN LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

FINANCIAL STATEMENTS OF ETS. . . . . . . . . . . . . . . . . . . . . . . . . . . .F-1
APPENDIX I MERGER AGREEMENT, AS AMENDED
APPENDIX II OPINION OF COMSTOCK VALUATION ADVISORS, INC.
APPENDIX III INDIANA BUSINESS CORPORATION LAW DISSENTERS' RIGHTS PROVISIONS
APPENDIX IV FORM OF ESCROW AGREEMENT

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AVAILABLE INFORMATION

Hach is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed with the Commission may be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the
regional offices of the Commission located at 7 World Trade Center, New York,
New York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such material can be obtained by mail from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates. In addition, Hach is required to file
electronic versions of such material with the Commission through the
Commission's Electronic Data Gathering, Analysis and Retrieval ("EDGAR")
System. The Commission maintains a World Wide Website, which contains
reports, proxy and information statements and other information regarding
registrants that, like Hach, file electronically with the Commission, at the
following address: http://www.sec.gov. Reports, proxy statements and other
information filed by Hach with The NASDAQ Stock Market may also be inspected
at the offices of the National Association of Securities Dealers, Inc. (the
"NASD"), Market Listing Section, 1735 K Street, N.W., Washington, D.C. 20006.

Hach has filed a registration statement on Form S-4 (together with all
exhibits and amendments, collectively, the "Registration Statement") under
the Securities Act of 1933 (the "Securities Act") with the Commission
covering the shares of Hach Common Stocks to be issued pursuant to the Merger
Agreement. This Proxy Statement/Prospectus, along with the documents and
portions of documents incorporated herein by reference, also constitutes the
prospectus of Hach filed as a part of the Registration Statement.

This Proxy Statement/Prospectus does not contain all of the information
set forth in the Registration Statement, certain portions of which have been
omitted pursuant to the rules and regulations of the Commission and to which
portions reference is hereby made. Such information may be obtained from the
office of the Commission at 450 Fifth Street, N.W., Washington D.C. 20549.
The Registration Statement is also available on the Commission's Website
described above.

Statements contained in this Proxy Statement/Prospectus concerning the
contents of any contract or other document referred to herein are not
necessarily complete, and in each instance reference is made to the copy of
the applicable contract or document as filed with the Commission, each such
statement being qualified in all respects by such reference.

This Proxy Statement/Prospectus is accompanied by copies of Hach's
Annual Report on Form 10-K for the fiscal year ended April 30, 1997, Hach's
Annual Report to Stockholders, and Hach's Quarterly Report on Form 10-Q for
the fiscal quarter ended January 31, 1998.

INFORMATION INCORPORATED BY REFERENCE

The following documents filed by Hach with the Commission under the
Exchange Act (Commission File No. 0-3947), are hereby incorporated by
reference into this Proxy Statement/Prospectus:

- Annual Report on Form 10-K for the fiscal year ended April 30, 1997 (the
"Hach 1997 10-K");

- Quarterly Reports on Form 10-Q for the fiscal quarters ended July 31,
1997, October 31, 1997 and January 31, 1998;

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- Current Report on Form 8-K dated June 27, 1997; and

- The descriptions of the Hach Common Stocks which are contained in Hach's
registration statements filed under the Exchange Act.

All documents filed by Hach with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Proxy
Statement/Prospectus and prior to the date of the ETS Special Meeting shall
be deemed to be incorporated by reference into this Proxy
Statement/Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Proxy Statement/Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Proxy Statement/Prospectus.

THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF ANY SUCH
DOCUMENTS, OTHER THAN EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY
INCORPORATED BY REFERENCE THEREIN, ARE AVAILABLE WITHOUT CHARGE TO ANY
PERSON, INCLUDING ANY ETS SHAREHOLDER OR HACH STOCKHOLDER, TO WHOM THIS PROXY
STATEMENT/PROSPECTUS IS DELIVERED UPON WRITTEN OR ORAL REQUEST TO GARY
DREHER, VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, HACH COMPANY, 5600
LINDBERGH DRIVE, LOVELAND, COLORADO 80537, TELEPHONE NUMBER (970) 669-3050.
IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE
MADE BEFORE _________________, 1998.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN AS CONTAINED HEREIN IN CONNECTION WITH THE MATTERS
DESCRIBED HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY ETS OR HACH. THIS PROXY
STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, ANY SECURITIES, OR THE SOLICITATION OF A PROXY, IN ANY
JURISDICTION TO OR FROM ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE ANY SUCH
OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROXY STATEMENT/PROSPECTUS NOR ANY DISTRIBUTION OF SECURITIES MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCE, CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF ETS OR HACH SINCE THE DATE HEREOF OR THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

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CAUTIONARY STATEMENT

Certain statements in this Proxy Statement/Prospectus constitute
"forward-looking statements" within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act. Hach intends that such
forward-looking statements be subject to the safe harbors created thereby.
Statements containing the words and phrases "looking ahead," "projected," "we
are confident," "should be," "will be," "predicted," "believe," "plans,"
"expect," "estimated," "anticipate" and similar expressions identify
forward-looking statements. These forward-looking statements reflect Hach's
current views with respect to future events and financial performance, but
are subject to many uncertainties and factors relating to Hach's operations
and business environment which could change at any time and which may cause
the actual results of Hach to be materially different from any future results
expressed or implied by such forward-looking statements. There are inherent
difficulties in predicting important factors. Potential risks and
uncertainties include, but are not limited to, changes in customer demand and
requirements, delays in introducing new products, foreign exchange rates, the
level of government funding, especially municipalities' funding for
water-related products, changes in federal income tax laws and regulations,
competition, unanticipated expenses and delays in the integration of any
newly-acquired business, unanticipated expenses relating to plant
construction and expansion, the timing and scope of technological advances,
the ability to attract and retain skilled technical, marketing and management
personnel, the ability to successfully implement its strategies and the
soundness of those strategies, conditions in the U.S. economy in general and
world wide economic and business conditions. The mix of products sold in a
quarter is a result of a combination of factors, including, but not limited
to, changes in customer demands and/or requirements, new product
announcements, price changes, changes in delivery dates, and price
competition from other suppliers. Additional factors that could cause or
contribute to such differences include, but are not limited to, those
discussed in the sections entitled "Risk Factors," "Management's Discussion
and Analysis of Financial Condition and Results of Operations," "Business"
and elsewhere in this Proxy Statement/Prospectus. Hach undertakes no
obligation to publicly update or revise any forward-looking statements
whether as a result of new information, future events or otherwise.

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SUMMARY

CERTAIN SIGNIFICANT MATTERS DISCUSSED IN THIS PROXY STATEMENT/PROSPECTUS
ARE SUMMARIZED BELOW. THIS SUMMARY IS NOT INTENDED TO BE COMPLETE AND IS
QUALIFIED IN ALL RESPECTS BY REFERENCE TO THE MORE DETAILED INFORMATION
APPEARING ELSEWHERE OR INCORPORATED BY REFERENCE IN THIS PROXY
STATEMENT/PROSPECTUS. SHAREHOLDERS ARE URGED TO REVIEW CAREFULLY THE ENTIRE
PROXY STATEMENT/PROSPECTUS INCLUDING THE APPENDICES AND THE DOCUMENTS
INCORPORATED HEREIN BY REFERENCE.

ENVIRONMENTAL TEST ETS is engaged in the production and marketing
SYSTEMS, INC. of reagent test strips for use in business,
industry and the home. ETS markets its products
world-wide from its domestic manufacturing
facilities and through its wholly-owned
subsidiary, ETS International, Inc. The address
of its principal executive offices is 23575
County Road 106, P.O. Box 4659, Elkhart, Indiana
46514-0659, and its telephone number at that
address is (219) 262-2060.

HACH COMPANY Hach manufactures and distributes laboratory
instruments, process analyzers and test kits, as
well as related analytical reagents and
chemicals, which are used to analyze the
chemical content and other properties of water
and other aqueous solutions. The address of its
principal executive offices is 5600 Lindbergh
Drive, Loveland, Colorado 80537, and its
telephone number at that address is (970)
669-3050.

HACH ACQUISITION CORP. HAC, a wholly-owned subsidiary of Hach, was
formed by Hach solely for the purpose of
effecting the Merger. HAC's principal executive
offices are located at 5600 Lindbergh Drive,
Loveland, Colorado 80537, and its telephone
number at that address is (970) 669-3050.

DATE, TIME AND PLACE OF A special meeting of shareholders of ETS is to
THE ETS SPECIAL MEETING be held on ________________, ______________,
1998 at the principal offices of ETS, 23575
County Road 106, Elkhart, Indiana 46514 (the
"ETS Special Meeting").

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SHAREHOLDERS ENTITLED Only holders of record of shares of ETS Class A
TO VOTE Common Stock and ETS Class B Common Stock at the
close of business on _____________, 1998 (the
"ETS Record Date"), are entitled to vote at the
ETS Special Meeting. On that date, 231,304
shares of ETS Class A Common Stock and 692,228
shares of ETS Class B Common Stock were
outstanding.

SECURITY OWNERSHIP BY Harry T. Stephenson, Chairman of the Board of
CERTAIN BENEFICIAL Directors of ETS, owns 476,756 shares of ETS
OWNERS AND MANAGEMENT Class B Common Stock, representing approximately
OF ETS 68.87% of the outstanding shares of ETS Class B
Common Stock. John Gildea, a director of ETS,
owns 125,472 shares of ETS Class B Common Stock
representing approximately 18.13% of the
outstanding shares of ETS Class B Common Stock.
All 231,304 outstanding shares of ETS Class A
Common Stock are held by the Environmental Test
Systems, Inc. Employee Stock Ownership Plan (the
"ETS ESOP"). See "Additional Information
Regarding ETS -- ETS Security Ownership by
Certain Beneficial Owners and Management."

PURPOSE OF THE MEETING To consider and vote upon a proposal to approve
and adopt the Merger Agreement and to approve
the Merger.

VOTE REQUIRED The Indiana Business Corporation Law, Ind. Code
23-1-17, ET SEQ. ("IBCL") requires the
affirmative vote of the holders of a majority of
the shares of each of the ETS Class A Common
Stock and ETS Class B Common Stock entitled to
vote at the ETS Meeting, voting as separate
classes, to approve the Merger Agreement.
Pursuant to the terms of the ETS ESOP, Peoples
Bank & Trust Company, Indianapolis, Indiana, the
trustee of the ETS ESOP (the "ESOP Trustee"),
has the right to vote the shares of ETS Class A
Common Stock owned by the ESOP. In compliance
with ERISA requirements, the Trustee intends to
solicit a direction from each ETS ESOP
participant to whom shares have been allocated
under the ETS ESOP with respect to the Merger
and intends to vote such shares in accordance
with the directions it receives. Subject to its
fiduciary duties, the Trustee will vote the
unallocated shares in the same proportion as the
votes directed by the holders of the allocated
shares. Pursuant to a Stockholder's Agreement
(the "Stockholder's Agreement") dated January
21, 1998 between Hach and Harry T. Stephenson,
the principal shareholder of ETS, Harry T.
Stephenson has agreed to vote his shares of ETS
Class B Common Stock for the approval and
adoption of the Merger Agreement, and has
granted a proxy to Hach to so vote such shares.
Mr. Stephenson's shares are sufficient to effect
approval of the Merger by the holders of ETS
Class B Common Stock. See "ETS Special
Meeting--Record Date"; - -"Voting Rights; Vote
Required" and "--Voting Agreements."

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RECOMMENDATION OF THE At a meeting held on December 30, 1997, the ETS
ETS BOARD OF DIRECTORS Board of Directors determined the Merger to be
in the best interests of ETS and its
shareholders and approved the Merger and the
Merger Agreement. THE BOARD OF DIRECTORS OF ETS
RECOMMENDS THAT ITS SHAREHOLDERS APPROVE THE
MERGER AGREEMENT AND THE MERGER. See "The
Merger-ETS' Reasons for the Merger;
Recommendation of the ETS Board of Directors and
Other Factors."

OPINION OF FINANCIAL ComStock Valuation Advisors, Inc. ("ComStock")
ADVISOR TO ETS ESOP has rendered an opinion to the ESOP Trustee and
the Benefits Committee (the "Committee") of the
ETS ESOP, which holds all of the ETS Class A
Common Stock, to the effect that, among other
things, the ETS Class A Merger Consideration is
fair to ETS ESOP participants from a financial
point of view. See "The Merger--Opinion of the
ETS ESOP Financial Advisor" and Appendix II,
"Opinion of ComStock Valuation Advisors, Inc.",
to this Proxy Statement/Prospectus.

APPROVAL OF HACH'S BOARD At a meeting held on December 30, 1997, Hach's
OF DIRECTORS Board of Directors determined the Merger to be
in the best interests of Hach and its
stockholders and approved the Merger and the
Merger Agreement. See "The Merger"--Hach's
Reasons for the Merger; Approval of Hach's Board
of Directors."

DISSENTERS' RIGHTS An ETS shareholder may assert dissenters' rights
only if (i) the shareholder delivers to ETS,
PRIOR TO THE VOTE TAKEN WITH RESPECT TO THE
MERGER AT THE ETS SPECIAL MEETING, written
notice of the shareholder's intent to demand
payment for the shareholder's shares if the
Merger is consummated; (ii) the shareholder does
not vote in favor of the Merger; and (iii) the
shareholder properly complies with certain
statutory procedures. See "The Merger - -
Dissenters' Rights" and Appendix III, "Indiana
Business Corporation Law Dissenter's Rights
Provisions."

THE MERGER AGREEMENT On January 21, 1998, ETS, Hach and HAC entered
into the Merger Agreement, which was amended as
of February 26, 1998. A copy of the Merger
Agreement, as amended, is attached to this Proxy
Statement/ Prospectus as Appendix I, providing
for the Merger of ETS with and into HAC. HAC
will be the "Surviving Corporation" for purposes
of the Merger, and will change its name upon the
Merger to "Environmental Test Systems, Inc."
See "The Merger -- General."

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CONVERSION OF SHARES At the Effective Time (i) each share of ETS
Class A Common Stock will be converted into the
right to receive $19.36845 in shares of Hach
Common Stock (as described below and including
$2.118424 per share of ETS Class A Common Stock
subject to escrow), and (ii) each share of ETS
Class B Common Stock will be converted into the
right to receive $16.641916 in cash and shares
of Hach Common Stocks (as described below and
including $1.82021 per share of ETS Class B
Common Stock subject to escrow).

At the Effective Time, by virtue of the Merger
and without any action on the part of Hach, HAC,
ETS or the holder of any of the following
securities:

(i) each share of ETS Class A Common
Stock issued and outstanding immediately prior
to the Effective Time shall be converted into
and become a right to receive per share (A) at
Closing that number of shares of Hach Common
Stock as shall have an aggregate value equal to
$17.250026, with each share of Hach Common Stock
valued at the average of its daily closing
prices on The NASDAQ Stock Market over a 20 day
period ending five business days prior to the
Effective Time and (B) a proportionate share of
the consideration delivered into escrow at
Closing, subject to the terms of the escrow; and

(ii) each share of ETS Class B Common Stock
issued and outstanding immediately prior to the
Effective Time shall be converted into and
become a right to receive per share (A) at
Closing (1) cash and (2) that number of shares
of Hach Common Stock and Hach Class A Common
Stock, as shall have an aggregate value equal to
$14.821706, with each of the Hach Common Stocks
valued at the average of its daily closing
prices on The NASDAQ Stock Market over a 20 day
period ending five business days prior to the
Effective Time and (B) a proportionate share of
the consideration delivered into escrow at
Closing, subject to the terms of the escrow.
Hach shall have the right, in its sole
discretion, to determine the allocation of the
components of the consideration to be paid to
the holders of ETS Class B Common Stock;
provided that (x) the aggregate values of the
Hach Class A Common Stock and Hach Common Stock
issued upon the Merger shall be equal and (y)
the cash to be paid will not be less than
$6,878,400 or greater than $7,343,875.

See "The Merger--Conversion of ETS Common
Stocks."

S-4 14th Page of 215 TOC 1st Previous Next ↓Bottom Just 14th
ESCROW; INDEMNIFICATION In order to provide for the payment and
satisfaction of certain indemnification
obligations contained in the Merger Agreement,
cash and Hach Common Stocks with an aggregate
value of $1,750,000 (allocated among the ETS
shareholders in the same proportion as the
consideration delivered to ETS shareholders at
Closing) will be held in escrow by an escrow
agent ("Escrow Agent") pursuant to the terms and
conditions of an escrow agreement to be signed
and delivered at Closing ("Escrow Agreement").
The form of the Escrow Agreement is attached as
Appendix IV to this Proxy Statement/Prospectus.
Subject to the satisfaction of the
indemnification obligations secured by the
escrow, the cash and shares of Hach Common
Stocks will be released from the escrow on the
third anniversary of the Effective Time.
Dividends and distributions with respect to the
Hach Common Stocks held in escrow will be paid
to the Escrow Agent and held as part of the
escrow deposit, subject to release from time to
time on terms and conditions as described in the
Escrow Agreement. See "The Merger
Agreement--Indemnification; Escrow."

EXCHANGE OF SHARE If the Merger is consummated, the exchange of
CERTIFICATES shares of ETS Common Stocks for shares of Hach
Common Stocks will be made upon surrender of
certificates for ETS Common Stocks to Harris
Trust and Savings Bank, as exchange agent. ETS
shareholders will be provided with transmittal
forms needed to exchange their shares. See "The
Merger--Capitalization of Hach and Exchange of
Shares; Fractional Shares."

ACCOUNTING TREATMENT The Merger will be accounted for as a purchase
under generally accepted accounting principles.
In conjunction with the purchase, Hach will
immediately expense costs which have been
identified with research and development
activities of ETS under generally accepted
accounting principles. Such costs are estimated
to be $3,000,000 and will have a dilutive effect
on Hach earnings in the period in which the
purchase is recorded. See "The Merger--Accounting
Treatment."

S-4 15th Page of 215 TOC 1st Previous Next ↓Bottom Just 15th
CERTAIN FEDERAL INCOME The Merger is designed to result in the
TAX CONSEQUENCES conversion of ETS Common Stocks held by ETS
stockholders into Hach Common Stocks on a
"tax-free" basis. ETS has received from its
counsel an opinion to the effect that, on the
basis of representations made in the Merger
Agreement and in certificates of ETS, Hach, HAC
and certain major stockholders of ETS, and
assuming that the Merger will be consummated as
described in this Proxy-Statement/Prospectus,
the Merger will constitute a tax-free
reorganization for federal income tax purposes.
Accordingly, no gain or loss will be recognized
by holders of ETS Common Stocks upon the
conversion of ETS Common Stocks into Hach Common
Stocks by reason of the Merger. However, any
cash received by holders of ETS Class B Common
Stock by reason of the Merger will be taxable to
such holders in an amount that will not exceed
the gain realized by such holders in the Merger.
ETS shareholders should read the discussion
under "The Merger--Certain Federal Income Tax
Consequences" and are urged to consult their own
tax advisors as to the specific tax consequences
to them of the Merger.

MANAGEMENT OF ETS Following the Merger, HAC will be the Surviving
AFTER THE MERGER Corporation and will continue as a wholly-owned
subsidiary of Hach. The Board of Directors of
the Surviving Corporation (to be renamed
"Environmental Test Systems, Inc.") will consist
of Bruce J. Hach and Gary R. Dreher. Bruce J.
Hach will be Chairman of the Surviving
Corporation, Mark J. Stephenson will be its
President, and Gary R. Dreher will be its Vice
President, Secretary and Treasurer. See "The
Merger--Management of ETS after the Merger. "

INTERESTS OF CERTAIN As a condition to the Merger, the Merger
PERSONS IN THE MERGER Agreement requires that ETS enter into
employment agreements prior to the Effective
Time of the Merger with certain of ETS' key
employees, which agreements will continue
following the Merger. Additionally, Hach will
enter into an employment agreement with Mark J.
Stephenson, the current President of ETS,
whereby Mark J. Stephenson will continue as
President of the Surviving Corporation and will
become a Vice President of Hach. Hach will also
enter into a consulting agreement and a
non-compete agreement with Harry T. Stephenson.
For a discussion of these matters see "The
Merger--Interests of Certain Persons in the
Merger."

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CONDITIONS TO THE MERGER Consummation of the Merger is subject to the
satisfaction of certain conditions, including,
without limitation, (i) the approval and
adoption of the Merger Agreement and the
approval of the Merger by the requisite vote of
the shareholders of ETS; (ii) the absence of any
restrictive court orders or any other legal
restraints or prohibitions preventing or making
illegal the consummation of the Merger; (iii)
the continuing accuracy of the representations
and warranties made in the Merger Agreement at
and as of the Effective Time; (iv) the receipt
by ETS and Hach of certain opinions regarding
tax matters and (v) receipt of regulatory
approval under the Hart-Scott-Rodino Antitrust
Improvements Act. Certain of the conditions to
the Merger run in favor of ETS or Hach only.
While neither ETS nor Hach and HAC currently
intends to waive any such conditions, if either
ETS or Hach and HAC were to elect to waive any
such conditions, assuming all other conditions
to the Merger had been satisfied, the Merger
would be consummated without the waived
conditions having been satisfied. See "The
Merger Agreement--Conditions to the Merger."

TERMINATION The Merger Agreement may be terminated at any
time prior to consummation of the Merger by
mutual consent of the parties and by any party
if (i) the parties are prohibited from
consummating the transactions contemplated by
the Merger Agreement by a permanent injunction,
(ii) if any governmental entity whose consent is
required to consummate the transactions
contemplated by the Merger Agreement determines
not to give its consent or (iii) if the average
per share values of the Hach Common Stocks used
to determine the numbers of shares to be
delivered at the Effective Time are less than
$9.00 in the case of Hach Common Stock or $7.00
in the case of Hach Class A Common Stock. The
Merger Agreement further provides that if the
ETS Board withdraws its recommendation of the
Merger Agreement or the Merger, or recommends
any other acquisition proposal or resolves to do
so, Hach may terminate the Merger Agreement and
abandon the Merger. ETS may terminate the
Merger Agreement under certain circumstances if
it receives an unsoliciated proposal for a
business combination with a third party. Hach
may terminate the Merger Agreement if ETS
receives a business combination proposal from a
third party. Additionally, either ETS or Hach
may terminate the Merger Agreement upon a breach
of any representations, warranties, covenants or
agreements by the other parties (subject to a
right to cure in favor of the breaching party).
Finally, Hach may terminate the Merger Agreement
in the event any update of disclosure schedules
provided by ETS discloses any material
liabilities between the signing of the Merger
Agreement and Closing. Upon termination of the
Merger Agreement, the Stockholder's Agreement
will also terminate. See "The Merger
Agreement--Termination."

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EXPENSES In the Merger Agreement, the parties have agreed
that the party incurring expenses in connection
with the Merger shall pay them; provided,
however, if the Merger is consummated, the
holders of ETS Class B Common Stock have agreed
to reimburse Hach for twenty-five percent (25%)
of all such costs and expenses incurred by ETS
following October 23, 1997, to the extent such
costs and expenses exceed the sum of Fifty
Thousand Dollars ($50,000); and provided further
that Hach has agreed to pay the costs and
expenses with respect to the filing of the
Registration Statement, the printing of the
Proxy Statement/Prospectus, the listing of the
Hach Common Stocks on The NASDAQ Stock Market,
compliance with Blue Sky Laws, and all filings
under the HSR Act (other than the fees and
disbursements of counsel, accountants and other
representatives of ETS relating to such
matters). The ETS ESOP will be solely
responsible for any fees and expenses due to its
independent trustee and to ComStock, relating to
the Merger and the related transactions, which
are properly payable by it consistent with its
fiduciary duties. See "The Merger
Agreement--Expenses."

EFFECTIVE TIME OF THE If the Merger Agreement is approved and adopted
MERGER at the ETS Special Meeting and all other
conditions to the Merger have been met or
waived, the parties expect the Merger to be
effective on the day of the meeting or shortly
thereafter upon the filing of a certificate of
merger with the Delaware Secretary of State and
articles of merger with the Indiana Secretary of
State. The time of such filing is referred to
herein as the "Effective Time."

REGULATORY MATTERS The Federal Trade Commission gave the parties
notice on February 13, 1998 that early
termination of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act had
been granted as of that date. No other material
governmental approvals are required in
connection with the Merger. See "The
Merger--Regulatory Matters."

RESALES OF HACH COMMON Shares of Hach Common Stocks received upon the
STOCKS Merger (other than those described in the next
sentence) will be freely transferable by the
holders thereof except for those shares held by
holders who may be deemed to be "affiliates" of
ETS under applicable federal securities laws
(generally including directors, certain
executive officers and ten percent or more
stockholders). Harry T. Stephenson has agreed
not to sell the shares of Hach Common Stocks he
receives upon the Merger for a period of six
months following the Effective Time (under and
subject to terms and conditions set forth in an
agreement to be signed and delivered at
Closing). See "The Merger--Restrictions on
Resales; Affiliate Agreements."

S-4 18th Page of 215 TOC 1st Previous Next ↓Bottom Just 18th
COMPARISON OF Holders of ETS Common Stocks who receive Hach
SHAREHOLDER RIGHTS Common Stocks upon the Merger will become
holders of Hach Common Stocks and will have
certain rights as Hach stockholders that are
different from those they had as ETS
shareholders. For a comparison of certain
provisions of the Hach Amended and Restated
Certificate of Incorporation, as amended, the
Hach By-Laws and Delaware corporate law
governing the rights of holders of Hach Common
Stocks with the ETS Amended and Restated
Articles of Incorporation, the ETS By-Laws and
Indiana corporate law governing the rights of
holders of ETS Common Stocks, see "Comparative
Rights of Hach Stockholders and ETS
Shareholders."

SHAREHOLDERS' The Merger Agreement provides for a
REPRESENTATIVE representative for the ETS shareholders for
purposes of the indemnification provisions of
the Merger Agreement and the Escrow Agreement.
Harry T. Stephenson is the initial Shareholders'
Representative. See "The Merger
Agreement--Shareholders' Representative. "

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MARKETS AND MARKET PRICES FOR HACH COMMON STOCKS

The Hach Common Stocks are traded on The NASDAQ Stock Market under the
symbols HACH (for Hach Common Stock) and HACHA (for Hach Class A Common
Stock). The table below sets forth the high and low sales prices per share of
the Hach Common Stocks as quoted on The NASDAQ Stock Market and the cash
dividends paid, for the periods indicated. Hach Class A Common Stock first
was made available for trading in October 1997.

[Enlarge/Download Table]

HACH COMMON STOCK HACH CLASS A COMMON
-----------------
STOCK
-------------------

High Low Dividends High Low Dividends

Fiscal Year Ended April 30, 1996
--------------------------------
1st Quarter 16 12-3/4 .05
2nd Quarter 20-3/8 12-3/4 .05
3rd Quarter 17-1/2 15 .06
4th Quarter 17-3/4 16-1/4 .06

Fiscal Year Ended April 30, 1997
--------------------------------
1st Quarter 17-1/2 14-1/2 .06
2nd Quarter 20 14-7/8 .06
3rd Quarter 19 16-1/4 .06
4th Quarter 19-3/4 14-1/2 .06

Fiscal Year Ended April 30, 1998
--------------------------------
1st Quarter 22-1/4 14-1/2 .06
2nd Quarter (1) 25-1/8 12-1/4 .03 12 9 .03
3rd Quarter 13-3/4 10 .03 10 8-7/16 .04
4th Quarter (through 11 9-3/4 -- 9-1/4 8-1/8 --
March 2, 1998)

The reported closing sale price of Hach Common Stocks on The NASDAQ
Stock Market on ____________, 1998, the last full trading day prior to the
date of this Proxy Statement/Prospectus, was $__________ per share for Hach
Common Stock and $___________ per share for Hach Class A Common Stock; on
January 20, 1998, the last full trading day prior to the execution of the Merger
Agreement, the closing price was $11.125 per share for the Hach Common Stock and
$8.50 per share for the Hach Class A Common Stock.

---------------------------

(1) On October 2, 1997, Hach stockholders were distributed a dividend of one
share of Hach Class A Common Stock for each share of Hach Common Stock held
by them on September 22, 1997.

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MARKETS AND MARKET PRICES FOR ETS COMMON STOCKS

There is no established trading market for ETS Common Stocks. In
July, 1996, the ETS ESOP purchased 231,304 shares of the then existing ETS
common stock at an average purchase price of $13.78 per share. Since the
inception of the ETS ESOP in July, 1996, it has purchased 97 shares of ETS
Class A Common Stock at an average purchase price of $14.70 per share
pursuant to repurchase obligations under the provisions of the ETS ESOP.

The terms of the ETS Class A Common Stock provide for aggregate
quarterly dividends in the amount of $55,772, commencing October 31, 1996
through July 31, 2001. Dividends of $55,772, $223,090 and $55,772 were paid
in 1996, 1997 and in the first quarter of 1998, respectively. Such dividends
were used by the ETS ESOP Trustee to pay principal on the ETS ESOP debt. The
loan agreement for the ETS ESOP debt contains restrictive covenants which
limit the ability of ETS to pay dividends. No dividends may be paid on ETS
Class B Common Stock if any dividends are in arrears on ETS Class A Common
Stock.

No dividends have ever been paid on ETS Class B Common Stock, and
ETS does not intend to pay dividends in the future other than required
dividends on the ETS Class A Common Stock.

S-4 21st Page of 215 TOC 1st Previous Next ↓Bottom Just 21st
COMPARATIVE PER SHARE DATA

The following table sets forth certain historical per share data of
Hach and ETS and combined per share data on an Unaudited Pro Forma basis
after giving effect to the Merger as a purchase, assuming that $7,344,000 in
cash, together with 641,000 shares of Hach Common Stock and 232,000 shares
of Hach Class A Common Stock are issued in exchange for the shares of ETS
Common Stocks in the Merger. The pro forma per share data presented below
combines Hach's per share data as of and for the year ended April 30, 1997
with ETS' per share data as of and for the twelve months ended April 30,
1997. This data should be read in conjunction with the financial information
of Hach and ETS and the notes thereto incorporated or included elsewhere in
this Proxy Statement/Prospectus. This information is not necessarily
indicative of the operating results or financial position that would have
been achieved had the Merger been consummated at the beginning of the periods
presented and should not be construed as representative of future operating
results.

[Enlarge/Download Table]

YEAR ENDED APRIL 30, 1997 NINE MONTHS ENDED
------------------------- JANUARY 31, 1998
-----------------
(UNAUDITED)

HISTORICAL - HACH (1):
Net income per common share . . . . . . . . . . . . . . . . . . . $ .55 --
Basic and diluted net income per share (2) . . . . . . . . . . . . -- $0.48
Book value per share . . . . . . . . . . . . . . . . . . . . . . . 3.84 2.06
Cash dividends per share of Hach Common Stock. . . . . . . . . . . 0.24 0.12
Cash dividends per share of Hach
Class A Common Stock . . . . . . . . . . . . . . . . . . . . . . -- 0.07

[Enlarge/Download Table]

YEAR ENDED DECEMBER 31,
1997
----------------------------

HISTORICAL - ETS:
Net income per share . . . . . . . . . . . . . . . . . . . . . . . $2.17
Book value per share . . . . . . . . . . . . . . . . . . . . . . . (1.42) N/A
Cash dividends per share . . . . . . . . . . . . . . . . . . . . . 0.96
[Enlarge/Download Table]

TWELVE-MONTH PERIOD ENDED NINE MONTHS ENDED
APRIL 30, 1997 JANUARY 31, 1998
------------------------- -----------------
(UNAUDITED) (UNAUDITED)

PRO FORMA COMBINED:
Net income per common share. . . . . . . . . . . . . . . . . . . . $0.45 --
Pro forma combined basic and diluted net income per share (2). . . -- $0.45
Pro forma combined book value per share. . . . . . . . . . . . . . N/A 1.96
Cash dividends per share of Hach Common Stock. . . . . . . . . . . 0.22 0.11
Cash dividends per share of Hach Class A Common Stock. . . . . . . -- 0.07

EQUIVALENT PRO FORMA COMBINED--PER ETS SHARE:
Net income per common share. . . . . . . . . . . . . . . . . . . . $0.28 --
Pro forma combined basic and diluted net income per
equivalent share(2). . . . . . . . . . . . . . . . . . . . . . . -- $0.24
Pro forma combined book value per equivalent share . . . . . . . . N/A 0.97
Cash dividends per equivalent share. . . . . . . . . . . . . . . . 0.07 0.04

(1) Restated for the two-for-one stock split effected in the form of a stock
dividend in October, 1997.

(2) Financial Accounting Standards ("FAS") No. 128, "Earnings per Share" was
adopted in fiscal year 1998.

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SELECTED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION

The following selected historical consolidated financial
information of Hach and ETS has been derived from their respective historical
consolidated financial statements, and should be read in conjunction with
such consolidated financial statements and the notes thereto, which are
incorporated by reference or included elsewhere in this Proxy
Statement/Prospectus. Selected historical consolidated financial information
of Hach is presented as of and for the fiscal years ended April 30, 1993,
1994, 1995, 1996 and 1997, and for the nine months ended January 31, 1998.
Selected historical consolidated financial information of ETS is presented as
of and for the fiscal years ended December 31, 1993, 1994, 1995, 1996 and
1997.

The following selected pro forma financial information of Hach and
ETS has been derived from the pro forma condensed combined financial
statements, which give effect to the Merger as a purchase, and should be read
in conjunction with such pro forma statements and the notes thereto, which
are included elsewhere in this Proxy Statement/Prospectus. See "Unaudited
Pro Forma Condensed Combined Financial Statements".

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

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NINE MONTHS NINE MONTHS
YEAR ENDED ENDED ENDED
APRIL 30, JANUARY JANUARY 31,
1997 31, 1998
YEARS ENDED APRIL 30 PRO FORMA(4) 1998 PRO FORMA(4)
------------------------------------------------ ------------ ---------- -------------
HACH 1993 1994 1995 1996 1997 (UNAUDITED)
---- ---- ---- ---- ---- ----

Historical Consolidated Statements
of Operations Data:
Net sales . . . . . . . . . . . . $94,001 $100,369 $105,269 $114,285 $121,480 $134,967 $94,293 $101,551
Income from operations . . . . . . 12,941 13,447 13,385 15,982 17,294 17,347 13,778 14,190
Net income . . . . . . . . . . . . 8,620 9,508 9,270 11,254 12,495 10,736 8,675 8,438
Net income per common
share (1) . . . . . . . . . . . . .38 .42 .41 .49 .55 .45 -- --
Basic and diluted net income
per share (1)(5). . . . . . . . . -- -- -- -- -- -- .48 .45

Shares used in computing basic
and diluted net income per
share(1)(5) . . . . . . . . . . . 22,724 22,772 22,771 22,736 22,730 23,603 18,011 18,884

[Enlarge/Download Table]

AS OF
AS OF JANUARY
JANUARY 31,
31, 1998
AS OF APRIL 30, 1998 PRO FORMA(4)
------------------------------------------------ ---------- ------------
1993 1994 1995 1996 1997 (UNAUDITED)
---- ---- ---- ---- ----

Historical Consolidated Balance
Sheet Data:
Total assets . . . . . . . . . . . $66,971 $74,358 $84,258 $93,655 $105,580 $80,866 $98,817
Long-term obligations . . . . . . 2,246 2,081 2,070 1,347 1,726 32,354 40,799
Stockholders' equity . . . . . . . 54,651 62,497 71,328 78,820 87,289 34,007 36,928
Book value per share (1) . . . . . 2.41 2.75 3.14 3.47 3.84 2.06

[Enlarge/Download Table]

YEARS ENDED DECEMBER 31
------------------------------------------------
ETS 1993 1994 1995 1996 1997
--- ---- ---- ---- ---- ----

Historical Consolidated Statements
of Operations Data:
Net sales . . . . . . . . . . . . $6,690 $8,702 $9,941 $13,501 $11,088
Income from operations . . . . . . 1,326 2,071 2,209 4,248 2,257
Net income . . . . . . . . . . . . 1,297 2,037 2,204 3,638 1,035
Pro forma net income (2) . . . . . 791 1,242 1,344 2,432 N/A
Pro forma basic and diluted
net income per share (2) . . . . . .79 1.24 1.34 2.78 1.45
Pro forma shares used in computing
net income per share (3) . . . . . 1,000 1,000 1,000 873 713

[Enlarge/Download Table]

AS OF DECEMBER 31
------------------------------------------------
1993 1994 1995 1996 1997
---- ---- ---- ---- ----

Historical Consolidated Balance
Sheet Data:
Total assets . . . . . . . . . . . $4,353 $5,070 $5,513 $7,010 $7,304
Long-term obligations . . . . . . 776 688 279 7,551 6,504
Stockholders' equity (deficiency). 2,615 3,687 4,284 (2,398) (1,028)
Book value per share . . . . . . . 2.62 3.69 4.28 (3.42) (1.42)

(1) Restated for the two-for-one stock split in the form of a stock dividend
distributed in October, 1997.
(2) Reflects federal and state income taxes (assuming a 39% effective tax
rate) as if ETS had been taxed as a C Corporation rather than an S
Corporation during 1993, 1994, 1995 and from January 1, 1996 thru July 31,
1996.
(3) Reflects outstanding shares as if the 1,000-for-1 stock split which
occurred on July 31, 1996 was done on January 1, 1993.
(4) Gives pro forma effect to the Merger. See "Unaudited Pro Forma
Condensed Combined Financial Statements."
(5) Reflects adoption of FAS No. 128.

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ETS MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS-1997 COMPARED TO 1996

Net sales in 1997 were $11,088,000, a decrease of $2,413,000 from net sales
of $13,501,000 in 1996. Sales of Coolant products decreased $1,353,000 from
1996. This was due to the loss of ETS' largest Coolant customer in 1997 and
price reductions put in place in 1997 to meet competitive pricing pressures.
Sales of Water Quality products decreased $933,000 in 1997 from 1996. The
decrease is attributable to a decrease in sales of promotional products that
traditionally have shown large year-to-year variability.

Cost of sales in 1997 was 39.3% of net sales compared to 34.8% in 1996. The
increase in cost of sales as a percentage of net sales is due to the larger
proportion of fixed and semi-fixed costs resulting from the decreased sales
volume and increases in engineering and maintenance personnel.

Research and development expenses increased to 9.2% of net sales in 1997 from
8.4% of net sales in 1996. The increase is due primarily to the impact of the
reduced sales volume on the proportion of fixed and semi-fixed costs to total
research and development expenses. Research and development expenses
decreased by $104,000 or 9.2% in 1997.

Marketing, general and administrative expenses increased to 31.1% of net
sales in 1997 from 25.3% in 1996. The increase is primarily due to the impact
of the reduced sales volume and the proportion of fixed and semi-fixed costs
to total marketing, general and administrative costs. Overall, marketing,
general and administrative costs increased approximately $27,000, or less
than 1%, from 1996. ETS ESOP compensation expense increased $221,000 in 1997
as the ETS ESOP was only in place for five months in 1996. This increase was
offset by reductions in bonus expense and 401(k) profit sharing plan
contributions.

Interest expense increased to $641,000 in 1997 from $312,000 in 1996 due to
the ETS ESOP note payable and the subordinated notes payable having been
outstanding for the full year in 1997 as compared to five months in 1996.

The effective income tax rate was 38.8% in 1997 vs. 9.1% in 1996. Prior to
July 31, 1996, as an S Corporation the taxable income of ETS was taxed to its
shareholders. ETS was a C Corporation effective August 1, 1996 and,
accordingly, ETS was taxable for only five months in 1996. The effective tax
rate was increased in 1997 by non-deductible merger-related expenses which
was partially offset by higher foreign sales subject to a lower tax rate
through the Foreign Sales Corporation subsidiary.

RESULTS OF OPERATIONS-1996 COMPARED TO 1995

Net sales in 1996 were $13,501,000, an increase of $3,560,000 or 35.8% from
net sales of $9,941,000 in 1995. While ETS experienced increases in sales in
almost all product lines in 1996, the most significant increases were in Pool
and Spa ($1,292,000, or 25.3%), Water Quality ($1,341,000, or 238.0%) and
Coolant ($627,000, or 33.3%). The increase in Pool and Spa sales was due to
new distributors and increases in market share. Water Quality sales were
significantly impacted by large, normally non-recurring, sales of promotional
products. The increase in Coolant sales was due to new Heavy-Duty Coolant
customers and increases in overseas distribution.

Cost of sales in 1996 was 34.8% of net sales compared to 36.7% in 1995.
Engineering and maintenance payroll related expenses increased in 1996 which
was offset by lower outside maintenance and maintenance

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supply expenses. ETS also experienced an increase in scrap costs in 1996. The
primary reason for the decrease in cost of sales as a percentage of net sales
is due to the lower proportion of fixed and semi-fixed costs resulting from
the increased sales volume.

Research and development expenses decreased to 8.4% of net sales in 1996 from
10.4% in 1995. The decrease is primarily due to the impact of the increased
sales volume on the proportion of fixed and semi-fixed costs to total
research and development expenses. Research and development expenses
increased in dollars by $94,000, or 9.1% in 1996 due to increases in
personnel and development activities.

Marketing, general and administrative expenses decreased to 25.3% of net
sales in 1996 from 30.7% in 1995. The decrease is primarily due to the impact
of the increased sales volume on the proportion of fixed and semi-fixed costs
to total marketing, general and administrative costs. Overall, marketing,
general and administrative costs increased $368,000, or 12% from 1995. ESOP
compensation expense for 1996 was $113,000. The ETS ESOP was established
July 31, 1996 and, therefore, there was no ESOP compensation expense in 1995.
Legal and professional fees increased $107,000 in 1996, primarily due to
establishing the ETS ESOP. Marketing product line expenses increased
$122,000 from 1995 to 1996.

Interest expense increased to $312,000 in 1996 from $52,000 in 1995. The ETS
ESOP note payable and subordinated notes payable borrowings were issued on
July 31, 1996.

Income tax expense for 1996 was $365,700. ETS was subject to income tax for
five months in 1996 and not at all in 1995. ETS converted to a C Corporation
from an S Corporation on July 31, 1996.

CAPITAL RESOURCES AND LIQUIDITY

At December 31, 1997 cash and temporary cash investments (overnight
investments in cash management funds) totaled $1,560,000, an increase of
$800,000 from $760,000 at December 31, 1996. Current assets exclusive of cash
and temporary cash investments totaled $2,813,000 at the end of 1997, a
decrease of $837,000 from the balance of $3,650,000 at the end of 1996.
Decreases in receivables ($370,000) and inventories ($523,000) were the main
causes of this change. Receivables and inventories were down due to lower
sales volumes. In addition, ETS undertook an effort in 1997 to reduce
inventories on hand and increase inventory turns. Current liabilities
decreased $29,000 from 1996 to 1997. The decrease in current liabilities can
be attributed to lower accounts payable due to attempts to maintain lower
inventory balances and lower sales volumes and no liability at the end of
1997 for matching contributions related to the 401(k) profit sharing plan as
no match was granted for 1997. These factors were offset by an increase in
current maturities of long-term debt. ETS mortgage note matures in December
1998 and therefore the entire balance due at December 31, 1997 is reflected
in current liabilities. Working capital at December 31, 1997 was $2,545,000
compared to $2,553,000 at December 31, 1996. Net cash provided by operating
activities decreased by $770,000 from $3,084,000 for 1996 to $2,314,000 for
1997. This decrease was due to the reduction in net income offset by
decreases in receivables and inventories noted above.

Payments for capital expenditures totaled $647,000 in 1997 compared to
$294,000 in the prior year. Capital expenditures during 1997 were made
primarily to expand manufacturing and laboratory capacity, adopt new
manufacturing processes and increase manufacturing efficiencies. Payments on
long-term debt were $849,000 in 1997, a $343,000 increase from $506,000 in
1996. Only one quarterly principal payment was made on the ETS ESOP note
payable and subordinated notes payable in 1996. Four quarterly payments were
made in 1997. Cash distributions of S Corporation earnings during 1996 were
$2,165,000.

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Total stockholders' deficiency was decreased by $1,370,000 in 1997. This was
due to net income of $1,035,000 and $340,000 of reductions of Unearned ETS
ESOP Shares for shares committed to be released for allocation to
participants, less $5,000 of dividends paid on ETS ESOP shares allocated to
participants.

At December 31, 1997 ETS had commitments for capital expenditures for
equipment under construction of approximately $75,000. ETS intends to finance
its future capital projects and working capital needs through existing cash
and cash equivalents and projected cash flow from operations.

EFFECTS OF INFLATION ON ETS

The consolidated financial statements of ETS reflect transactions in the
dollar values in which they were incurred and, therefore, do not attempt to
measure the impact of inflation. However, it is believed that inflation has
not had a material effect on its operations during the last three years. On a
long-term basis, the ability to adjust the selling prices of ETS' products in
reaction to changing costs due to inflation will be dependent on competitive
and other factors.

FORWARD-LOOKING INFORMATION

It is anticipated that future growth will come primarily from the core
businesses of Pool and Spa, Aquarium and Industrial testing as well as new
product lines such as Medical and Soil testing. See "BUSINESS OF ETS" for a
detailed description of the markets ETS serves and a breakdown of sales by
category.

The major accounting and operating software system used by ETS is believed to
be Year 2000 compliant. All other software used by ETS is in the process of
being analyzed for potential problems with the Year 2000 issue. It is not
expected at this time that the analysis and resolution of problems noted, if
any, will involve a significant cost to rectify.

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RISK FACTORS

In considering whether to approve the Merger Agreement and the Merger
and thereby become holders of Hach Common Stocks, the shareholders of ETS
should carefully consider the following risk factors, in addition to the
other information included and incorporated by reference elsewhere in this
Proxy Statement/Prospectus:

NEW PRODUCT DEVELOPMENT AND ACQUISITIONS. The water analysis industry
is characterized by ongoing technological developments and changing customer
requirements. As a result, Hach's success and continued growth depend, in
part, on its ability in a timely manner to develop or acquire rights to, and
successfully introduce into the marketplace, enhancements of existing
products or new products that incorporate technological advances, meet
customer requirements and respond to products developed by Hach's
competition. There can be no assurance that Hach will be successful in
developing or acquiring such rights to enhancements or new products on a
timely basis or that such enhancements or new products will adequately
address the changing needs of the marketplace.

TECHNOLOGICAL AND REGULATORY CHANGE. The water analysis industry is
characterized by changing technology, competitively imposed process standards
and regulatory requirements, each of which influences the demand for Hach's
products and services. Changes in legislative, regulatory or industrial
requirements may render certain of Hach's products and processes obsolete.
Acceptance of new products may also be affected by the adoption of new
government regulations requiring stricter standards. Hach's ability to
anticipate changes in technology and regulatory standards and to develop and
introduce new and enhanced products successfully on a timely basis will be a
significant factor in Hach's ability to grow and to remain competitive.
There can be no assurance that Hach will be able to achieve the technological
advances that may be necessary for it to remain competitive or that certain
of its products will not become obsolete. In addition, Hach is subject to
the risks generally associated with new product introductions and
applications, including lack of market acceptance, delays in development or
failure of products to operate properly.

COMPETITION. Hach experiences competition from a variety of sources
with respect to virtually all of its products, although Hach does not know of
any single entity that competes with it across Hach's full range of products
and systems. Competition in the markets served by Hach is based on a number
of factors, including price, technology, applications experience,
availability of financing, reputation, product warranties, reliability,
service and distribution. Certain of Hach's competitors have financial and
other resources greater than those of Hach. Several competitors manufacture
products similar to those of Hach, both domestically and internationally.

CONTROLLING OWNERSHIP INTEREST OF PRINCIPAL STOCKHOLDER. Kathryn
Hach-Darrow, Hach's Chairman and Chief Executive Officer, beneficially owns
approximately 55% of each class of the Hach Common Stocks. As a result,
Mrs. Hach-Darrow has the ability to approve or defeat any proposal requiring
approval by stockholders of Hach, and to elect or remove the entire Board of
Directors. By her voting power, Mrs. Hach-Darrow has the ability to delay or
prevent a change in control of Hach. Delaware corporate law and Hach's
Amended and Restated Certificate of Incorporation, as amended, contain
provisions that may discourage takeover bids for Hach that have not been
negotiated with the Board of Directors. Such provisions could limit the
price that investors might be willing to pay in the future for shares of the
Hach Common Stocks.

UNCERTAINTIES REGARDING INTERNATIONAL SALES. Hach's international sales
constituted 36%, 36%, and 34% of Hach's sales during fiscal 1997, 1996, and
1995, respectively. Hach expects that international sales will continue to
account for a similar portion of its revenues. International sales may be
subject to

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political and economic risks, including political instability, currency
controls, fluctuating exchange rates with respect to sales not denominated in
U.S. dollars, and changes in import/export regulations, tariffs and freight
rates.

UNCERTAINTY OF FUTURE ACQUISITIONS. Hach continues to actively pursue
the acquisition of companies and product lines which will complement its
existing product lines. Significant uncertainties accompany any acquisition
and its integration with Hach's existing operations, such that any
acquisition could have an adverse effect on Hach. There can be no assurance
that Hach will be able to locate appropriate acquisition candidates, that any
identified candidates will be acquired, or that acquired operations will be
effectively integrated or prove profitable.

FACTORS AFFECTING FUTURE RESULTS. Factors which management believes may
affect the future financial performance of Hach include but are not limited
to the degree to which Hach is able to: implement manufacturing and business
processes which will reduce costs and improve efficiency; invest in
engineering and marketing activities which lead to improved sales growth;
integrate acquisitions into Hach's operations; deal with the external
regulatory influences on Hach's primary markets; and deal with the effect on
the competitive environment resulting in the consolidation of companies
within the instrumentation industry. During fiscal 1997, Hach invested in
initiatives which, when fully implemented, are expected to improve the
effectiveness and efficiency of its business and manufacturing processes.
The investment in these initiatives has and will continue during fiscal 1998,
with the benefits of successful implementation to be realized fully beginning
in fiscal 1999.

POSSIBLE VOLATILITY OF STOCK PRICE; LIMITED TRADING VOLUME. Although
the Hach Common Stocks are listed on The NASDAQ Stock Market, the average
daily trading volume of the Hach Common Stocks has generally been limited
and, accordingly, the trading price is more vulnerable to significant
fluctuations. During the period of November 6, 1997 through March 20, 1998,
for example, the average daily trading volume for the Hach Common Stock and
the Hach Class A Common Stock has been 3,556 shares and 2,844 shares,
respectively. The trading price of the Hach Common Stocks may be volatile
and could be subject to significant fluctuations in response to variations in
Hach's quarterly operating results, general conditions in the industries in
which Hach operates and other factors. In addition, the stock market is
subject to price and volume fluctuations affecting the market price for the
stock of many companies generally, which fluctuations often are unrelated to
operating performance.

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ETS SPECIAL MEETING

GENERAL

This Proxy Statement/Prospectus is being furnished to stockholders of
ETS in connection with the solicitation by the Board of Directors of ETS of
proxies for use at the ETS Special Meeting to be held at the principal
offices of ETS located at 23575 County Road 106, Elkhart, Indiana, on
____________, 1998, at 8:00 a.m. local time, and at any adjournments or
postponements thereof, for the purpose set forth herein and in the
accompanying Notice of Special Meeting of Shareholders of ETS.

MATTERS TO BE CONSIDERED

At the ETS Special Meeting, shareholders of ETS will consider and vote
upon a proposal to approve and adopt the Merger Agreement and to approve the
Merger.

BOARD OF DIRECTORS' RECOMMENDATIONS

The Board of Directors of ETS has determined that the Merger is fair and
in the best interests of the shareholders of ETS and has therefore
unanimously approved and adopted the Merger Agreement and approved the Merger
and unanimously recommends that the shareholders of ETS vote FOR the approval
and adoption of the Merger Agreement and the approval of the Merger.

RECORD DATE

The close of business on ____________, 1998 (the "ETS Record Date") has
been fixed as the record date for determination of the holders of ETS Common
Stocks who are entitled to notice of, and to vote at, the ETS Special
Meeting. As of the ETS Record Date, there were 231,304 shares of ETS Class A
Common Stock and 692,228 shares of ETS Class B Common Stock outstanding.

VOTING; VOTE REQUIRED

The holders of record on the ETS Record Date of shares of ETS Common
Stocks are entitled to one vote per share on each matter submitted to a vote
at the ETS Special Meeting. The presence at the ETS Special Meeting in person
or by proxy of the holders of a majority of the outstanding shares of each
class of the ETS Common Stocks is necessary to constitute a quorum, and the
affirmative vote of the holders of a majority of each of the ETS Class A
Common Stock and ETS Class B Common Stock entitled to vote at the ETS
Meeting, voting as separate classes, is required to approve the Merger
Agreement. Shares of ETS Common Stocks that are voted "FOR," "AGAINST" or
"WITHHELD" at the ETS Special Meeting will be treated as being present at
such meeting for purposes of establishing a quorum and will also be treated
as votes eligible to be cast by the holders of ETS Common Stocks present in
person or represented by proxy at the meeting and entitled to vote on the
subject matter. Abstentions will be counted for purposes of determining both
the presence or absence of a quorum for the transaction of business and the
total number of votes cast with respect to a particular matter. Shares which
are not voted (whether by abstention, broker non-vote or otherwise) will have
the same effect as shares voted against approval of the Merger Agreement. A
shareholder list will be available for examination by holders of ETS Common
Stocks at the ETS Special Meeting and at the principal offices of ETS located
at 23575 County Road 106, Elkhart, Indiana for the 10 days preceding such
meeting.

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PROXIES

All properly executed proxies received at or prior to the ETS Special
Meeting and which have not been revoked prior to their exercise will be voted
at the ETS Special Meeting in accordance with the instructions contained
therein. Properly executed proxies which contain no instructions regarding
the proposal specified in the form of proxy will be voted FOR the approval
and adoption of the Merger Agreement and approval of the Merger. Execution
and delivery of a proxy will not prevent a shareholder from attending the ETS
Special Meeting and voting in person. A shareholder who has executed and
returned a proxy may revoke it at any time before it is voted, but only by
executing and returning a proxy bearing a later date, by giving written
notice of revocation to the Secretary of ETS bearing a later date than the
proxy or by attending the ETS Special Meeting and voting in person.
Attendance at the ETS Special Meeting will not by itself revoke the proxy.

The ETS ESOP Trustee under the ETS ESOP has dispositive power for the
shares of ETS Class A Common Stock it holds. In order to comply with
obligations under ERISA, the ETS ESOP Trustee intends to solicit a direction
from each ETS ESOP participant to whom shares of ETS Class A Common Stock
have been allocated under the ETS ESOP with respect to its vote on the Merger
and, subject to the Trustee's fiduciary duties, intends to vote such shares
in accordance with the directions it receives. The ETS ESOP Shares held by
the ETS ESOP for which the Trustee does not receive voting instructions on
the proposed Merger will, subject to the Trustee's fiduciary duties, be voted
for, against or in abstention in the same proportions as ETS ESOP Common
Stock for which the Trustee receives voting instructions.

If a quorum is not obtained, or if fewer shares are voted in favor of
approval and adoption of the Merger Agreement than the number required for
approval and adoption, the ETS Special Meeting may be adjourned for the
purpose of obtaining additional proxies for votes in favor of the proposal
and, at any subsequent reconvening of the ETS Special Meeting, all proxies
will be voted in the same manner as such proxies would have been voted at the
original meeting (except for any proxies which have theretofore effectively
been revoked or withdrawn), notwithstanding that they may have been
effectively voted on the same or any other matter at a previous meeting. The
cost of solicitation of the stockholders of ETS will be paid by ETS. Such
cost will include the reimbursement of the ETS ESOP Trustee for expenses of
forwarding solicitation materials to beneficial owners of shares. In
addition to the solicitation of proxies by use of the United States mail,
directors, officers and employees of ETS may solicit proxies personally or by
telephone or facsimile transmission. Such directors, officers and employees
will not be additionally compensated for such solicitation but may be
reimbursed for out-of-pocket expenses incurred in connection therewith.

SHAREHOLDERS SHOULD NOT SEND ANY STOCK CERTIFICATES WITH THEIR PROXY
CARDS.

VOTING AGREEMENTS

Pursuant to a Stockholder's Agreement dated January 21, 1998, Harry T.
Stephenson, a director of ETS and holder of 476,756 shares of ETS Class B
Common Stock, or approximately 68.87% of the outstanding shares of ETS Class B
Common Stock, has agreed to vote his shares in favor of the Merger Agreement.
Under the terms of the Stockholder's Agreement, Harry T. Stephenson has
agreed not to (i) grant any proxies or enter into any voting trust or other
agreement with respect to his shares of ETS Class B Common Stock, or (ii) sell
or otherwise dispose of his shares. If those shares are voted as indicated no
further votes of holders of ETS Class B Common Stock will be required to
approve the Merger and Merger

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Agreement. The Stockholder's Agreement expires on the first to occur of the
closing of the Merger or the termination of the Merger Agreement.

THE MERGER

The descriptions of the Merger and the Merger Agreement set forth below
do not purport to be complete and are qualified in their entirety by
reference to the Merger Agreement, as amended, which is attached as Appendix I
to this Proxy Statement/Prospectus and incorporated herein by reference.

GENERAL

The Merger Agreement provides that ETS will be merged with and into HAC.
As a result of the Merger, the separate corporate existence of ETS will cease
and HAC will continue as the surviving corporation after the Merger (the
"Surviving Corporation") and as a direct wholly-owned subsidiary of Hach.

The Surviving Corporation will hold and own all of the properties and
assets of ETS following the Merger. Upon the Merger, the Surviving
Corporation will change its name to "Environmental Test Systems, Inc." and
will continue to operate the business of ETS substantially as now conducted.
The Merger will take place as promptly as practicable after the adoption and
approval of the Merger Agreement and the approval of the Merger by the
shareholders of ETS, and the satisfaction or waiver of the other conditions
to the Merger set forth in the Merger Agreement. See "The Merger Agreement."

As a result of the Merger, the shareholders of ETS, an Indiana
corporation, will become stockholders of Hach, a Delaware corporation. See
"Comparative Rights of Hach Stockholders and ETS Shareholders."

CONVERSION OF ETS COMMON STOCKS

INTRODUCTION. At the Effective Time (i) each share of ETS Class A
Common Stock will be converted into the right to receive $19.36845 in shares
of Hach Common Stock (as described below and including $2.118424 per share of
ETS Class A Common Stock subject to escrow), and (ii) each share of ETS
Class B Common Stock will be converted into the right to receive $16.641916 in
cash and shares of Hach Common Stocks (as described below and including
$1.82021 per share of ETS Class B Common Stock subject to escrow).

ETS CLASS A COMMON STOCK. Each share of ETS Class A Common Stock issued
and outstanding immediately prior to the Effective Time shall be converted
into and become a right to receive (i) on the Closing Date that number of
shares of Hach Common Stock as shall have an aggregate value equal to
$17.250026 on the date which is five (5) business days prior to the Effective
Date or, if such date is not a trading day, the trading day immediately
preceding such date (the "Determination Date"), with each share of Hach
Common Stock valued at its Average Market Price (as described below) (the
"Class A Base Merger Consideration"); (ii) on the third anniversary of the
Effective Time (the "Escrow Release Date") or as soon thereafter as possible
in accordance with the Escrow Agreement, the Additional Class A Merger
Consideration (as defined below), if any; and (iii) from time to time after
the Escrow Release Date in accordance with the Escrow Agreement, the
Subsequent Class A Merger Consideration (as defined below), if any (the Class A
Base Merger Consideration, the Additional Class A Merger Consideration and the

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Subsequent Class A Merger Consideration are collectively referred to as the
"Class A Merger Consideration").

ADDITIONAL CLASS A MERGER CONSIDERATION. The Additional Class A Merger
Consideration shall consist of (A) that number of shares of Hach Common Stock
held in that portion of the Escrow Account which has been allocated to the
former holders of ETS Class A Common Stock ("Escrow Account-A") on the Escrow
Release Date (as defined in the Escrow Agreement) in excess of the number of
shares of Hach Common Stocks held in the Escrow Account -A in accordance with
the Escrow Agreement, equal to the amount ("Pending Claims Amount") of
damages being asserted in respect of all claims which have been made by Hach
or any other affiliate of Hach who has a right to indemnification under the
Merger Agreement pursuant to the Escrow Agreement which have not been
determined as of the Escrow Release Date ("Pending Claims") together with the
earnings thereon as provided in the Escrow Agreement, divided by (B) the
number of shares of ETS Class A Common Stock exchanged in connection with the
Merger.

SUBSEQUENT CLASS A MERGER CONSIDERATION. The subsequent Class A Merger
Consideration shall consist of, with respect to each Resolved Pending Claim
Amount, (A) the number of shares of Hach Common Stock held in the Escrow
Account-A with an aggregate value determined in accordance with the Escrow
Agreement equal to that Resolved Pending Claim Amount divided by (B) the
number of shares of ETS Class A Common Stock exchanged in connection with the
Merger. A "Resolved Pending Claim Amount" with respect to each Pending Claim
which is finally determined, is the amount, if any, by which (i) that portion
of the Pending Claims Amount which had been reserved for that Resolved
Pending Claim together with earnings thereon, exceeds (ii) the amount of
damages paid to and/or at the direction of Hach or the affiliate of Hach who
has the right to indemnification in connection with the determination of that
Resolved Pending Claim.

ETS CLASS B COMMON STOCK. Each share of ETS Class B Common Stock issued
and outstanding immediately prior to the Effective Time shall be converted
into and become a right to receive (i) at the Closing Date, (1) cash and
(2) that number of shares of Hach Common Stock and that number of shares of
Hach Class A Common Stock as shall have on the Determination Date an aggregate
value equal to $14.821706, with each of the Hach Common Stocks valued at its
Average Market Price (the "Class B Base Merger Consideration"); (ii) on the
Escrow Release Date or as soon thereafter as possible in accordance with the
Escrow Agreement, the Additional Class B Merger Consideration (as defined
below), if any; and (iii) from time to time after the Escrow Release Date in
accordance with the Escrow Agreement, the Subsequent Class B Merger
Consideration (as defined below), if any (the Class B Base Merger
Consideration, the Additional Class B Merger Consideration and the Subsequent
Class B Merger Consideration are collectively referred to as the "Class B
Merger Consideration"); provided that Hach shall have the right, in its sole
discretion, to determine the allocation of the components of the
consideration to be paid to the holders of ETS Class B Common Stock; provided
further that (x) the aggregate values of the Hach Class A Common Stock and
Hach Common Stock issued to holders of ETS Class B Common Stock upon the
Merger shall be equal and (y) the cash to be paid will not be less than
$6,878,400 or greater than $7,343,875.

ADDITIONAL CLASS B MERGER CONSIDERATION. The Additional Class B Merger
Consideration shall consist of (A)(1) the amount of cash in that portion of
the escrow account which has been allocated to be the former holders of ETS
Class B Common Stock ("Escrow Account-B") on the Escrow Release Date in
excess of the cash held in the Escrow Account-B allocated to the Pending
Claims Amount together with the interest thereon as provided in the Escrow
Agreement, divided by (2) the number of shares of ETS Class B Common Stock
exchanged in connection with the Merger and (B)(1) that number of shares of
Hach Common Stocks held in the Escrow Account-B on the Escrow Release Date in
excess of the number of

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shares of Hach Common Stocks held in the Escrow Account-B with an aggregate
value determined in accordance with the Escrow Agreement, equal to the
Pending Claims Amount together with the earnings thereon, divided by (2) the
number of shares of ETS Class B Common Stock exchanged in connection with the
Merger.

SUBSEQUENT CLASS B MERGER CONSIDERATION. The Subsequent Class B Merger
Consideration shall consist of, with respect to each Resolved Pending Claim
Amount, (A) the amount of cash and number of shares of Hach Common Stocks
held in the Escrow Account-B with an aggregate value, determined in
accordance with the Escrow Agreement, equal to that Resolved Pending Claim
Amount, in each case divided by (B) the number of shares of ETS Class B
Common Stock.

AVERAGE MARKET PRICE. For purposes of calculating the number of shares
of Hach Common Stocks to be distributed at Closing in connection with the
Merger, the value of one share of each of such class of stock shall be deemed
to be the average of the daily closing prices of one share of such class of
stock, as quoted on The NASDAQ Stock Market, for the 20 trading days
immediately preceding and including the Determination Date; provided that if
there is no reported closing price of the shares of Hach Common Stock or
Hach Class A Common Stock on The NASDAQ Stock Market for any such trading
day, the closing price for such day for such stock will be deemed to be the
mean of the closing bid and asked quotations on The NASDAQ Stock Market for
that day for such stock (the respective value for each class of stock being
referred to as the "Average Market Price"). At least two business days prior
to the Closing Date, Hach will calculate the number of shares of Hach Common
Stocks to be delivered at Closing in connection with the Merger, and Hach
will deliver to ETS a certificate signed by its Chief Financial Officer
setting forth such share amounts and providing all reasonable detail as to
their calculation.

BACKGROUND OF THE MERGER

ETS and Hach have had for a number of years a general familiarity with
each other's products and markets, and ETS' products have been marketed by
Hach.

During the period of April through September, 1997, representatives of
Hach and ETS met on a number of occasions to discuss the possibility of a
business combination of ETS and Hach, the rationale therefor, and the
principal issues that would arise in the context of negotiating and
consummating such a business combination. At these meetings, the parties
also had preliminary price discussions, reviewed valuation ranges and issues,
and explored the possibility of a mix of cash and stock consideration, and
discussed a possible schedule for completion of the acquisition process.

During October 1997, representatives of Hach and ETS and their
respective counsel negotiated a non-binding letter of intent which called for
the acquisition of ETS by Hach in the form of a merger of ETS into a Hach
subsidiary. The letter of intent was signed on October 23, 1997. The
parties also signed confidentiality agreements with respect to information to
be provided each other in connection with evaluation of the proposed
transaction. ETS and Hach have exchanged information regarding the respective
businesses of the companies, including information about markets, major
customers and financial statements.

On December 2, 1997 the parties publicly announced that they had reached
substantial agreement on the terms of the merger and on December 30, 1997,
the respective Boards of Directors of Hach and ETS, after consultation with
their professional advisors, approved the Merger Agreement.

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On January 21, 1998 the parties signed the definitive Merger Agreement,
following delivery by ComStock of its opinion to the ESOP Trustee and
Benefits Committee that the Merger was fair to the ETS ESOP participants from
a financial point of view. As of February 26, 1998 the parties amended the
Merger Agreement to reflect the effects of the payment of additional dividend
installments to the holders of ETS Class A Common Stock.

ETS' REASONS FOR THE MERGER; RECOMMENDATION OF ETS' BOARD OF DIRECTORS AND OTHER
FACTORS

The Board of Directors of ETS considered financial, managerial and other
information regarding Hach and its subsidiaries. In particular, the Board of
Directors evaluated the respective businesses, financial conditions and
future prospects of ETS and Hach. The earnings history and stock performance
of Hach were carefully reviewed and discussed with a view towards the
investment potential for shareholders of ETS.

Among other items considered in this evaluation were the prospects of
ETS and Hach, as separate corporations and as combined; the compatibility of
Hach's markets to those of ETS; the anticipated tax-free nature of the
transaction to ETS shareholders receiving Hach Common Stocks in exchange for
their shares of ETS Common Stocks; the timeliness of a transaction given the
state of the economy and the stock markets, as well as anticipated trends in
both; applicable regulatory requirements; an analysis of alternatives to
affiliating with Hach, including other potential acquirors; the dividend rate
that ETS shareholders who become Hach stockholders would be expected to enjoy
as a result of the transaction; the terms of the Merger Agreement; and the
fairness opinion to be issued by ComStock to the ETS ESOP.

The Board of Directors of ETS also considered the impact of the
transaction on customers and employees of ETS and the communities it serves.
Hach's historical relationship with its employees including competitive
salary and benefit programs was considered, as was the opportunity for
training, education, growth and advancement of ETS' employees within ETS,
Hach or one of Hach's subsidiaries. Further, from the standpoint of ETS'
customers, it was anticipated that more products would become available
because of Hach's greater resources.

The Directors considered the material terms of the Merger Agreement,
including, but not limited to, the aggregate merger consideration of
$16,000,000 (consisting of shares of Hach Common Stock and Hach Class A
Common Stock to be distributed to holders of ETS Class A Common Stock; and
cash, shares of Hach Common Stock and shares of Hach Class A Common Stock to
be distributed to holders of ETS Class B Common Stock), the escrow
provisions, closing conditions, representations of ETS and Hach, and
covenants of ETS and Hach. The Directors considered the importance of
providing for the disposition of the ETS employee benefit plans, the entry
into the Hach employee benefit plans by employees of ETS and the disposition
of the ETS ESOP.

OPINION OF ETS ESOP FINANCIAL ADVISOR

Peoples Bank & Trust Company, Indianapolis, Indiana as trustee of the
ETS ESOP (the "ETS ESOP Trustee"), and the Benefits Committee of the ETS ESOP
("Benefits Committee") retained ComStock Valuation Advisors, Inc.
("ComStock") to assess the fairness of the Merger to the ETS ESOP
participants from a financial point of view.

ComStock is a nationally recognized valuation firm and, as a part of its
activities, is regularly engaged in the valuation of businesses and their
securities in connection with mergers, acquisitions and

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negotiated underwritings. The ETS ESOP Trustee and Benefits Committee
selected ComStock because of ComStock's extensive experience in similar
transactions and its reputation generally.

At a meeting on January 21, 1998, ComStock gave the ETS ESOP Trustee and
the Benefits Committee its written opinion dated such date that, as of that
date, and based upon and subject to the assumptions, limitations and
qualifications set forth in its opinion letter, from the perspective of ETS
ESOP as a whole and solely from a financial point of view:

- the number of shares of Hach Common Stock to be delivered to the
ETS ESOP in the Merger is fair in relation to the ETS Class A
Common Stock held by the ESOP;

- the Class A Merger Consideration to be received by the ETS ESOP
in the Merger is equal to or greater than the fair market value
of the ETS Class A Common Stock held by the ETS ESOP;

- the terms of the Merger Agreement, including payment of expenses
in connection with the Merger by the ETS ESOP, are fair to the
ETS ESOP as a whole, given the consideration to be received by
the other ETS shareholders in the Merger; and

- the ultimate disposition of the ETS ESOP, as provided in the
Merger Agreement, is fair.

The full text of the opinion of ComStock dated January 21, 1998 is
attached to this Proxy Statement/Prospectus as Appendix II. Beneficial
owners of ETS Class A Common Stock are urged to read ComStock's opinion
carefully and in its entirety for a description of the assumptions made,
procedures followed, other matters considered and the limits of ComStock's
review.

ComStock's opinion was prepared for the ETS ESOP Trustee and the
Benefits Committee and is directed only to the fairness of the Class A Merger
Consideration to the beneficial owners of ETS Class A Common Stock from a
financial point of view. It does not constitute a recommendation to any
shareholder of ETS as to how such shareholder should vote at the ETS Special
Meeting nor does it constitute an opinion as to the price at which Hach
Common Stocks will actually trade at any time. ComStock was not requested to
and did not make any recommendation to the Board of Directors of ETS as to
the form or amount of the consideration to be received by shareholders of ETS
in the Merger, which was determined through arm's-length negotiations between
the parties. No restrictions or limitations were imposed by ETS, the ETS
ESOP Trustee or the Benefits Committee upon ComStock with respect to the
investigations made or the procedures followed by ComStock in rendering its
opinion.

In arriving at its opinion, ComStock reviewed a draft of the Merger
Agreement and various exhibits thereto, none of which differed materially
from the form of the Merger Agreement, together with the attached exhibits,
executed on January 21, 1998 and amended as of February 26, 1998. ComStock
also assumed that the consideration to be received by the ETS ESOP in
connection with the transaction, per the Merger Agreement, would be an
aggregate of $3,990,000 in Hach Common Stock delivered to the ETS ESOP at
closing, with an additional $490,000 of Hach Common Stock being delivered
into escrow. ComStock also reviewed financial and other information provided
during discussions with the respective management of ETS and Hach. In
addition, ComStock compared certain financial and securities data of ETS with
that of selected companies whose securities are traded in public markets;
reviewed the historical stock prices of ETS Common Stock and the historical
stock prices and trading volumes of the Hach Common Stocks; reviewed prices
and premiums paid in certain other selected business combinations; and

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conducted such other financial studies, analyses and investigations as
ComStock deemed appropriate for purposes of rendering its opinion.

In rendering its opinion, ComStock relied upon and assumed the accuracy
and completeness of all of the financial and other information that was
provided to it by ETS and Hach or their respective representatives, that was
available to it from public sources, or that it otherwise reviewed. ComStock
did not assume responsibility for making any independent evaluation of ETS'
assets or liabilities or for making an independent verification of any
information reviewed by it. ComStock further assumed that the Merger will
qualify as a tax-free reorganization under the Code.

ComStock's opinion states that it is based on economic, market,
financial and other conditions as they existed on, and on the information
made available to ComStock as of, the date of the opinion, and that, although
subsequent developments may affect its opinion, that ComStock is not
obligated to update, review or reaffirm its opinion except at the ETS Special
Meeting.

VALUATION ANALYSIS. ComStock determined the most appropriate and
relevant quantitative and qualitative methods of financial analyses and
applied these methods to the unique circumstances of ETS. ComStock advised
the ETS ESOP Trustee that the various methods employed should be considered
as a whole, and considering only a portion of such analyses could create a
misleading or incomplete view of the underlying valuation process and the
analysis of fairness.

ComStock's appraisal was prepared in accordance with the Uniform
Standards of Professional Appraisal Practice (USPAP), as promulgated by The
Appraisal Foundation. ComStock examined the financial performance of ETS and
applied generally accepted valuation methods to determine the fair market
value of the equity of ETS. ComStock selected its estimate of fair market
value from a range of values indicated by the Capitalized Cash Flow Method,
the Guideline Company Method, and the Discounted Cash Flow Method. The
various valuation methods reflect ETS' historical financial performance, its
forecasted financial performance, the strengths of its balance sheet and
working capital position, current prices of public stocks engaged in the same
or a similar line of business, and rates of returns required by independent
investors for investments having similar risk profiles as the ETS stock.

In performing its valuation analysis, ComStock reflected an appropriate
premium for control, and also took into consideration the marketability of ETS'
stock.

ComStock's valuation analysis also reflected ComStock's perception of ETS'
corporate strengths and weaknesses, as well as the risks and opportunities
currently facing the Company.

Current economic and industry conditions and trends were analyzed, and
incorporated into ETS' valuation.

Once ComStock assessed the fair market value of ETS, ComStock allocated
that value to the ETS ESOP and non-ETS ESOP shareholders, reflecting the right
of the ETS ESOP shareholders to receive dividend payments on their shares until
July 31, 2001.

FAIRNESS ANALYSIS. In rendering its preliminary fairness opinion to the
Trustee, ComStock took into consideration the following factors:

- The range of fair market values per share for the ETS ESOP stock;

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- The offer price from Hach;

- The remaining period over which the ETS ESOP would otherwise have
received dividend payments on its shares of ETS Class A Common Stock;

- The form of the consideration being received by the ETS ESOP vs. the
form of the consideration being received by the holders of ETS Class B
Common Stock;

- The portion of the consideration being received in the form of
escrowed shares of Hach Common Stock, and the risk regarding the value
of such consideration at the time it is released from escrow;

- The terms of the Escrow Agreement with Hach;

- The expenses related to the Merger that are being paid by the ETS ESOP
Trustee;

- The trading volume of Hach Common Stock, and potential liquidity
concerns for individual ETS ESOP participants.

HACH'S REASONS FOR THE MERGER; APPROVAL OF HACH'S BOARD OF DIRECTORS

The Hach Board of Directors has unanimously approved the Merger
Agreement. The Board of Directors' approval is based upon a number of
factors discussed in this Proxy Statement/Prospectus, such as, among other
things, the terms of the Merger and the Merger Agreement generally, including
the amount and form of consideration to be paid; the results of operations,
financial condition, business and competitive position of Hach and ETS, both
on an historical and prospective basis, and their respective business plans;
and the views of Hach's management.

Hach believes that ETS is a market leader in its niche of reagent
testing with an excellent reputation for quality and service. It is Hach's
opinion that the markets serviced by ETS will provide Hach with an important
diversification opportunity in a market which it believes offers significant
domestic and international growth opportunities. Hach believes its financial
capacity may be used to assist ETS in pursuing a more aggressive growth
strategy. In addition, Hach believes it has significant international
experience to assist ETS as it pursues international expansion.

In view of the variety of factors considered by Hach's Board of
Directors in connection with its evaluation of the Merger, the Board did not
find it practicable to, and did not, quantify or otherwise assign relative
weights to such factors. However, in reaching the decision to approve the
Merger Agreement, the Board was most strongly influenced by (i) the terms of
the Merger Agreement, particularly the amount and form of consideration to be
paid, (ii) the financial condition, business and competitive position of Hach
and ETS, (iii) the value of and future prospects for the ETS technology and
(iv) the views of Hach's management. Although the Board did not reach
specific conclusions regarding any of the individual factors, on balance each
such factor positively affected the Board's decision to approve the Merger.

CAPITALIZATION OF HACH AND EXCHANGE OF SHARES; FRACTIONAL SHARES

The authorized capital stock of Hach consists of 25,000,000 shares of
Hach Common Stock, and 20,000,000 shares of Hach Class A Common Stock. As of
March 2, 1998, 8,257,897 shares of Hach Common Stock and 8,243,137 shares of
Hach Class A Common Stock were issued and outstanding.

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If the Merger becomes effective, in addition to the cash consideration
to be paid holders of the ETS Class B Common Stock, Hach will issue to each
holder of outstanding shares of ETS Common Stocks at the Effective Time
certificates representing the number of whole shares of Hach Common Stocks
which such ETS shareholder shall be entitled to receive pursuant to the terms
of the Merger Agreement. The Exchange Agent will distribute certificates
representing the number of whole shares of Hach Common Stocks (and cash for
any fractional share interests, as described below) to each ETS shareholder
upon the surrender to the Exchange Agent for cancellation of stock
certificates representing such holder's shares of ETS Common Stocks
accompanied by prescribed transmittal forms. No interest will accrue or be
paid on any cash to be delivered to the ETS shareholders except as provided
pursuant to the Escrow Agreement.

All of the shares of Hach Common Stocks to be issued to ETS
shareholders will be fully paid and non-assessable. Hach will apply to list
the shares of Hach Common Stocks to be issued upon the Merger on The NASDAQ
Stock Market. The obligations of ETS and Hach to consummate the Merger are
conditioned upon such listing.

No scrip or fractional share certificates of Hach Common Stocks will
be issued. Instead, each ETS shareholder, upon surrender of a certificate or
certificates representing such holder's shares of ETS Common Stocks, will be
paid cash in an amount equal to any fractional shares such shareholder is
entitled to receive times the Average Market Price of such shares of Hach
Common Stocks.

Transmittal forms for use in effecting the surrender by ETS
shareholders of certificates representing shares of ETS Common Stocks to the
Exchange Agent in exchange for certificates representing Hach Common Stocks
and cash (in the case of holders of ETS Class B Common Stock or with respect
to fractional share interests) accompany this Proxy Statement/Prospectus and
ETS shareholders should follow the instructions included in those forms in
order to exchange their shares of ETS Common Stocks. Shares should not be
surrendered for exchange without using the transmittal forms. It will be
important for ETS shareholders to exchange their ETS certificates for Hach
certificates promptly after the Effective Time because ETS shareholders will
not be able to use certificates representing ETS Common Stocks to effect
trades of Hach Common Stocks on The NASDAQ Stock Market. Moreover, no
dividends or other distributions payable by Hach will be paid to former ETS
shareholders until their outstanding ETS certificates are surrendered for
exchange. Upon surrender of ETS certificates, any unpaid dividends or
distributions will be paid, without interest. Until so exchanged, ETS stock
certificates will evidence for all other purposes (including voting rights)
the number of whole shares of Hach Common Stocks into which they were
converted at the Effective Time.

MANAGEMENT OF ETS AFTER THE MERGER

Following the Merger, HAC will be the Surviving Corporation and a
wholly-owned subsidiary of Hach. The Certificate of Incorporation of HAC as
amended at the Effective Time will be the Certificate of Incorporation of the
Surviving Corporation after the Merger and the By-laws of HAC as amended at
the Effective Time will be the By-laws of the Surviving Corporation after the
Merger, in each case until amended in accordance with their terms and
applicable law.

The Board of Directors of the Surviving Corporation after the
Effective Time will consist of two directors: Bruce J. Hach and Gary R.
Dreher.

The officers of the Surviving Corporation after the Effective Time
will be Bruce J. Hach, Chairman, Mark J. Stephenson, President, Gary R.
Dreher, Vice President, Secretary and Treasurer and Robert O. Case, Assistant
Secretary.

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See "Additional Information Concerning Hach-Directors and Officers" and
"Additional Information Concerning ETS-Directors and Officers" for additional
information concerning these persons.

INTERESTS OF CERTAIN PERSONS IN THE MERGER

The Merger Agreement requires that ETS enter into two-year employment
agreements prior to the Merger with certain key employees, which agreements
will continue following the Merger.

Additionally, upon the Merger, Hach will enter into an employment
agreement with Mark J. Stephenson, the current President of ETS, whereby Mark
J. Stephenson will continue as President of the Surviving Corporation and
will become Vice President of Hach. This employment agreement, which has an
initial three-year term, provides for a first-year annual salary of $155,000,
and contains customary non-disclosure, employee invention and non-competition
provisions.

Hach will also enter into a consulting agreement and a non-compete
agreement with Harry T. Stephenson, the father of Mark J. Stephenson and
current Chairman of the Board of Directors of ETS. Pursuant to the
consulting agreement, Harry T. Stephenson will serve as a consultant to Hach
for an initial period of one year following the Merger. In exchange for his
making himself available to provide up to sixteen hours a month as a
consultant to Hach, Harry T. Stephenson will be paid a monthly retainer of
$2,000 by Hach. If Harry T. Stephenson provides more than sixteen hours of
consulting services in any month, he will be paid at the rate of $125 per
hour for such services. Under the terms of the non-compete agreement, in
exchange for his agreement not to compete with Hach or ETS or help a
competitor of Hach or ETS, for five years following the Merger, Harry T.
Stephenson will receive ten annual payments of $30,000 (which payments will
be paid to his wife upon his death should she survive him).

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

ETS has received from its counsel, Krieg DeVault Alexander & Capehart,
an opinion that, based on (i) representations made in the Merger Agreement
and in certificates of officers of ETS, Hach and HAC, and certain
shareholders of ETS, and (ii) the assumption that the Merger will be
consummated as described in this Proxy Statement/Prospectus:

1. The Merger will constitute a reorganization for federal income tax
purposes within the meaning of Section 368(a) of the Internal Revenue Code of
1986, as amended (the "Code").

2. No gain or loss will be recognized by ETS as a result of the Merger.

3. No gain or loss will be recognized by the ETS shareholders upon the
conversion of shares of ETS Common Stocks into shares of Hach Common Stocks
upon the Merger, except with respect to the cash to be received by the
holders of ETS Class B Common Stock.

4. The receipt of cash by a holder of ETS Class B Common Stock upon
the Merger will result in the recognition of gain for federal income tax
purposes, equal to the lesser of the gain realized, or the amount of cash
received, by such holder in the Merger.

The gain realized by each holder of ETS Common Stocks upon the Merger
will be measured by the excess of (a) the sum of the amount of cash received
and the fair market value of the Hach Common Stocks received for the ETS
Class B Common Stock in the Merger, over (b) such holder's tax basis of the
shares of ETS Class B Common Stock surrendered. Such gain will be capital
gain, provided that such shares of ETS Class B Common Stock were held as
capital assets at the Effective Time, and the receipt of cash in

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the Merger satisfies the "substantially disproportionate" standard of Code
Section 302(b)(2). Any capital gain will be long-term capital gain if the
surrendered shares of ETS Class B Common Stock were held by the ETS
shareholder for more than one year. (It should be noted that under current
law, the maximum tax rate applicable to such capital gain will be 20% if the
ETS Class B Common Stock was held for more than 18 months prior to the
Effective Time (10% for taxpayers in the 15% marginal Federal tax bracket),
but will be 28% if the ETS Class B Common Stock was held for more than 12
months, but not more than 18 months, before the Effective Time (15% for
taxpayers in the 15% tax bracket).) If the holder's receipt of cash does not
satisfy the standard of Code Section 302(b)(2), the holder's gain will be
treated as a dividend that will be taxable as ordinary income to the extent
of the holder's ratable share of ETS' accumulated earnings and profits.
Generally, no loss will be recognized by holders of ETS Class B Common Stock
who receive Hach Common Stocks and cash in the Merger.

THE FOREGOING DISCUSSION IS BASED UPON THE CODE, TREASURY REGULATIONS
THEREUNDER, AND ADMINISTRATIVE RULINGS AND COURT DECISIONS AS OF THE DATE OF
THE OPINION OF ETS' COUNSEL. ALL OF THE FOREGOING ARE SUBJECT TO CHANGE, AND
ANY SUCH CHANGE COULD AFFECT THE CONTINUING VALIDITY OF THE OPINION. THE
DISCUSSION DOES NOT TAKE INTO ACCOUNT ANY FACTS AND CIRCUMSTANCES PARTICULAR
TO THE SITUATION OF INDIVIDUAL ETS SHAREHOLDERS. EACH ETS SHAREHOLDER SHOULD
CONSULT SUCH HOLDER'S OWN TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES
OF THE PROPOSED TRANSACTION, INCLUDING THE APPLICATION AND EFFECT OF STATE,
LOCAL, FOREIGN AND OTHER TAX LAWS.

ACCOUNTING TREATMENT

The Merger will be accounted for as a "purchase" under generally
accepted accounting principles. Accordingly, ETS' results of operations will
be included in Hach's consolidated results of operations from and after the
Effective Time. For purposes of preparing Hach's consolidated financial
statements, Hach will establish a new accounting basis for ETS' assets and
liabilities based upon the fair values thereof and Hach's purchase price,
including the costs of the acquisition. A final determination of required
purchase accounting adjustments and of the fair value of the assets and
liabilities of ETS has not yet been made. Accordingly, the purchase
accounting adjustments made in connection with the development of the
Unaudited Pro Forma Condensed Combined Financial Statements appearing
elsewhere in this Proxy Statement/Prospectus are preliminary and have been
made solely for purposes of developing such Unaudited Pro Forma Condensed
Combined Financial Statements to comply with disclosure requirements of the
Commission. Hach will undertake a study to determine the fair value of
certain of ETS' assets and liabilities and will make appropriate purchase
accounting adjustments upon completion of that study. See "UNAUDITED PRO
FORMA CONDENSED COMBINED FINANCIAL STATEMENTS." In conjunction with the
purchase, Hach will immediately expense costs which have been identified with
research and development activities of ETS under generally accepted
accounting principles. Such costs are estimated to be $3,000,000 and will
have a dilutive effect on Hach earnings in the period in which the purchase
is recorded.

REGULATORY MATTERS

Pursuant to the Hart-Scott-Rodino Antitrust Improvements Act and the
rules promulgated thereunder (the "HSR Act"), on February 2 and February 3,
1998, respectively, ETS and Hach furnished notification of the Merger and
provided certain information to the Federal Trade Commission (the "FTC") and
the Antitrust Division of the Department of Justice. The FTC notified the
parties that early termination of the waiting period under the HSR Act was
granted effective February 13, 1998.

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At any time before or after the Effective Time, a private person or
entity could seek, under the antitrust laws, to enjoin the Merger or to cause
Hach to divest itself, in whole or in part, of ETS or of other businesses
conducted by ETS. There can be no assurance that a challenge to the Merger
will not be made or that, if such a challenge is made, ETS and Hach will
prevail. The obligations of ETS and Hach to consummate the Merger are subject
to the condition that there be no preliminary or permanent injunction or
other order by any court or governmental or regulatory authority prohibiting
consummation of the Merger. Each party has agreed to use reasonable efforts
to remove any such prohibition.

RESTRICTIONS ON RESALE; AFFILIATE AGREEMENTS

The shares of Hach Common Stocks to be issued to shareholders of ETS in
connection with the Merger will be registered under the Securities Act and,
as such, will be freely transferable under the Securities Act immediately
upon receipt, except for shares issued to any person who may be deemed an
"affiliate" of Hach for purposes of Rule 144 under the Securities Act or an
"affiliate" of ETS for purposes of Rule 145 under the Securities Act.
Persons who may be deemed affiliates of ETS or Hach generally include
individuals who, or entities which, control, are controlled by or are under
common control with ETS or Hach and will include directors and corporate
officers of ETS and Hach and may include major shareholders of ETS and Hach.

Rule 144 and Rule 145 will restrict the sale of shares of Hach Common
Stocks received in the Merger by affiliates and certain of their family
members and related interests. In general, under Rule 145, for one year
following the Effective Time, persons who are affiliates of ETS at the time
of the ETS Special Meeting, provided they are not affiliates of Hach at or
following the Effective Time, would be entitled to sell shares of Hach Common
Stocks acquired upon the Merger only through unsolicited "broker
transactions" or in transactions directly with a "market maker," as such
terms are defined in Rule 144 under the Securities Act. Additionally, during
such one-year period, the number of shares of Hach Common Stock or Hach Class
A Common Stock to be sold by such person (together with certain related
persons and certain persons acting in concert) within any three-month period
may not exceed the greater of one percent of the outstanding number of shares
of the class of Hach Common Stocks to be sold or the average weekly trading
volume of such shares during the four calendar weeks preceding such sale.
Rule 145 will remain available to affiliates only if Hach remains current
with its information filings with the Commission under the Exchange Act. One
year after the Effective Time, an affiliate would be able to sell such shares
of Hach Common Stocks without such manner of sale or volume limitations,
provided that Hach is then current with its Exchange Act information filings
and such person is not then an affiliate of Hach.

Affiliates also would be permitted to resell shares of Hach Common
Stocks received upon the Merger pursuant to an effective secondary offering
registration statement under the Securities Act or another available
exemption from the Securities Act registration requirements. The
Registration Statement of which this Proxy Statement/Prospectus is a part
does not cover resales of shares of Hach Common Stocks received by any person
who may be deemed an affiliate of ETS or Hach, and Hach is not obligated to
file any such registration statement for the benefit of such persons.

The Merger Agreement provides that ETS will use its best efforts to
cause each person who is an affiliate of ETS to deliver an investment letter
at Closing providing that such affiliate has no current intention to transfer
any shares of Hach Common Stocks received in the Merger.

Harry T. Stephenson will sign an agreement (the "Lock-Up Agreement") at
Closing in which he agrees not to sell the Hach Common Stocks he receives in
connection with the Merger for a period of six months following the Effective
Time. The Lock-Up Agreement contains certain exceptions which will

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allow Harry T. Stephenson to transfer Hach Common Stocks during the six-month
period, (i) upon his death, (ii) otherwise in connection with his estate
planning, (iii) if the value of the shares of Hach Common Stocks he receives
falls below 80% of the value attributed to such shares for purposes of the
Merger or (iv) there is a material breach of Hach's obligations under the
Merger Agreement.

DISSENTERS' RIGHTS

ETS shareholders are entitled to dissent from the Merger and receive
payment of the "fair value" of their shares in cash. Such entitlement is
governed by Section 11 of Chapter 44 of the IBCL ("I.C. 23-1-44"), a complete
copy of which is attached to this Proxy Statement/Prospectus as Appendix III.

Pursuant to I.C. 23-1-44, an ETS shareholder may assert dissenters'
rights only if (1) THE ETS SHAREHOLDER DELIVERS TO ETS, PRIOR TO THE VOTE
TAKEN WITH RESPECT TO THE MERGER AT THE ETS SPECIAL MEETING, WRITTEN NOTICE
OF THE ETS SHAREHOLDER'S INTENT TO DEMAND PAYMENT FOR THE ETS SHAREHOLDER'S
SHARES IF THE MERGER IS CONSUMMATED AND (2) THE ETS SHAREHOLDER DOES NOT VOTE
IN FAVOR OF THE MERGER. Any ETS shareholder contemplating the assertion of
dissenters' rights in connection with the Merger should review carefully the
complete provisions of I.C. 23-1-44. EACH STEP MUST BE TAKEN IN STRICT
COMPLIANCE WITH THE APPLICABLE PROVISIONS OF THE STATUTE IN ORDER TO PERFECT
DISSENTERS' RIGHTS. Any written objection, demand or notice required in
connection with the exercise of dissenters' rights should be sent or
delivered to ETS at its principal offices at 23575 County Road 106, P.O. Box
4659, Elkhart, Indiana 46514-0659, attention: Mark J. Stephenson, President.

The federal income tax consequences of a receipt of cash for dissenting
shares would differ materially from the federal income tax consequences of a
receipt of shares of Hach Common Stocks pursuant to the Merger Agreement.
SHAREHOLDERS CONTEMPLATING THE ASSERTION OF DISSENTERS' RIGHTS ARE URGED TO
CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES OF SUCH
ACTION.

THE FOREGOING SUMMARY DOES NOT PURPORT TO BE A COMPLETE STATEMENT OF THE
PROVISIONS OF THE IBCL RELATING TO THE RIGHTS OF DISSENTING SHAREHOLDERS OF
ETS, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE EXCERPTS FROM THE
IBCL INCLUDED HEREIN AS APPENDIX III.

THE MERGER AGREEMENT

EFFECTIVE TIME

The Merger will become effective upon the filing of a certificate of
merger with the Secretary of State of Delaware and articles of merger with
the Secretary of State of Indiana. ETS and Hach currently anticipate that
the Effective Time will occur on or about the date of the ETS Special
Meeting. However, there can be no assurance that the conditions to the Merger
will be satisfied by such date, or at all, or that the Merger Agreement will
not be terminated.

REPRESENTATIONS AND WARRANTIES

The Merger Agreement contains certain customary representations and
warranties on the part of ETS, Hach and HAC, including, without limitation, the
following representations and warranties :

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ALL PARTIES. The Merger Agreement contains representations and
warranties made by each party as to: (i) organization, qualification to do
business and subsidiaries, (ii) organizational documents, (iii)
capitalization, (iv) authority relative to the Merger Agreement, (v) no
conflict with organizational documents, legal requirements or material
agreements, (vi) financial statements, (vii) brokers, and (viii) completeness
and accuracy of all statements.

ETS. The Merger Agreement contains further representations and
warranties of ETS with respect to: (i) absence of undisclosed liabilities,
(ii) tax matters, (iii) legal matters, (iv) property, (v) inventories, (vi)
accounts receivable, (vii) intellectual property matters, (viii) absence of
certain changes or events since December 31, 1996, (ix) insurance matters,
(x) contracts and debt instruments, (xi) labor relations and employee
matters, (xii) transactions with ETS insiders, (xiii) environmental matters,
(xiv) matters relating to product regulation and product returns, (xv)
customers and suppliers, (xvi) receipt of the opinion of ComStock, and (xvii)
the absence of any discussions with other parties with respect to the
acquisition of the business of ETS.

HACH. The Merger Agreement contains further representations and
warranties of Hach with respect to its reporting obligations to the
Commission and its ownership of HAC.

CONDUCT OF BUSINESS PENDING THE MERGER

The Merger Agreement provides that, between the date of the Merger
Agreement and the Effective Time, ETS must conduct its business in the
ordinary course consistent with past practice and use all reasonable efforts
to preserve its business substantially intact. The Merger Agreement further
provides that ETS, without the prior written consent of Hach, between the
date of the Merger Agreement and the Effective Time, may not: (i) amend its
articles of incorporation or by-laws, (ii) issue any shares of capital stock,
(iii) sell any property or assets, except, in the ordinary course of business
consistent with past practice or in an aggregate amount not in excess of
$15,000, (iv) acquire any interest in, or any assets of, any person, (v)
incur any indebtedness for borrowed money or issue any debt securities or
assume, guarantee or endorse the obligations of any person for borrowed
money, (vi) terminate, cancel or request any material change in, or agree to
any material change in, any material contract or enter into any corporate
partnering transaction or similar arrangement or any other agreement material
to its business, (vii) make or authorize any capital expenditure in excess of
$25,000 above budgeted amounts, (viii) declare or pay any dividend or other
distribution with respect to any of its capital stock except that ETS may pay
cash dividends required to be made under the terms of the ETS Class A Common
Stock, (ix) reclassify, combine, split or subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock, (x)
increase the compensation payable to its officers, consultants or employees,
except for increases in accordance with past practice (including, without
limitation, annual merit increases and bonuses), or grant any rights to
severance or termination pay to, or enter into any employment or severance
agreement which provides benefits upon a change in control that would be
triggered by the Merger with any of its directors, officers, consultants or
other employees, establish or amend any employee benefit plan, policy or
arrangement for the benefit of any of its directors, officers, consultants or
other employees, except to the extent required by applicable law or the terms
of a collective bargaining agreement, or (xi) authorize or enter into any
formal or informal agreement or otherwise make any commitment to do any of
the foregoing.

NOTICES OF CERTAIN EVENTS

The Merger Agreement provides that each of Hach and ETS must give
prompt notice to the other of: (i) any notice or other communication from
any person alleging that the consent of such person is or

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may be required in connection with the Merger, (ii) any notice or other
communication from any governmental entity in connection with the Merger,
(iii) any actions, suits, claims, investigations or proceedings commenced or,
to its knowledge, threatened against, relating to or involving or otherwise
affecting Hach, ETS or their respective subsidiaries that relate to the
consummation of the Merger, (iv) the occurrence of a default or event that,
with the giving of notice or lapse of time or both, would become a default
under any material contract of such party, and (v) any change that could
reasonably be expected to have a material adverse effect on Hach or ETS or to
delay or impede the ability of either Hach or ETS to perform its obligations
pursuant to the Merger Agreement and to effect the consummation of the Merger.

ACCESS TO INFORMATION; CONFIDENTIALITY

The Merger Agreement provides that, from the date of the Merger
Agreement to the Effective Time, each of Hach and ETS must (and must cause
its respective subsidiaries to): (i) provide to the other access at
reasonable times to its and its subsidiaries' officers, employees, agents,
properties, offices and other facilities and to the books and records thereof
and (ii) promptly furnish such information concerning its and its
subsidiaries' business, properties, contracts, assets, liabilities and
personnel as the other party may reasonably request. In addition, the
obligations of Hach and ETS under the confidentiality agreements entered into
between them as of October 23, 1997 remain in effect.

NO SOLICITATION OF TRANSACTIONS

ETS has agreed that, prior to the Effective Time, neither it nor its
wholly-owned subsidiary, ETS International, Inc. (the "ETS Subsidiary"), nor
any of their respective directors and officers shall, and ETS will use all
reasonable efforts to cause its employees, agents and representatives not to,
initiate, solicit or encourage, directly or indirectly, any inquiries or the
making of any proposal with respect to a merger, consolidation, share
exchange or change of control or similar transaction involving ETS, the ETS
Subsidiary or any purchase of all or any significant portion of their assets,
or confidential information or data, or have discussions with any person
relating thereto, and ETS shall promptly advise Hach of any such inquiry or
proposal. However, the Board of Directors of ETS on behalf of ETS may furnish
information and participate in discussions and negotiations through its
representatives with persons who have sought the same if and only to the
extent that: (a) the ETS Board of Directors, after consultation with its
independent legal and financial advisors and taking into consideration the
advice of such advisors, determines in good faith that (i) such action is
required for the ETS Board of Directors to comply with its fiduciary duties
to shareholders imposed by applicable legal requirements and (ii) such
unsolicited proposal may be materially more favorable to the shareholders of
ETS than the transactions contemplated by the Merger Agreement and (b) prior
to furnishing such information to, or entering into discussions or
negotiations with, such person, ETS (i) gives Hach and HAC as promptly as
practicable prior written notice of the material terms of such proposal in
reasonable detail and of ETS' intention to furnish such information or begin
such discussions and (ii) receives from such person an executed
confidentiality agreement on terms no less favorable to ETS than those
contained in the Confidentiality Agreement dated as of October 23, 1997
between Hach and ETS. In addition, ETS may, but shall not be obligated to,
from time to time notify Hach as to any proposal or offer or any inquiry or
contact with any person with respect to a matter that does not meet the
standard of the preceding sentence. ETS agrees not to release any third party
from, or waive any provision of, any confidentiality or standstill agreement
to which ETS is a party. For purposes of the Merger Agreement, a proposal
that follows the procedure and satisfies the criteria set forth above is
considered a "Business Combination Transaction Proposal."

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PLAN OF REORGANIZATION

The Merger Agreement is intended to constitute a tax-free "plan of
reorganization" within the meaning of the income tax regulations promulgated
under the Code. Pursuant to the Merger Agreement, Hach and ETS have agreed
that, from and after the date of the Merger Agreement, they will use all
reasonable efforts to cause the Merger to qualify, and will not knowingly
take any actions or cause any actions to be taken which could reasonably be
expected to prevent the Merger from qualifying as a tax-free reorganization
under the Code. In the event that the Merger fails to qualify as a tax-free
reorganization under the Code, Hach and ETS have agreed to negotiate in good
faith to restructure the Merger so that it will qualify as a tax-free
transaction under the Code.

FURTHER ACTION; CONSENTS; FILINGS

The Merger Agreement provides that each of Hach and ETS must use all
reasonable efforts to (i) take, or cause to be taken, all appropriate action,
and do, or cause to be done, all things necessary, proper or advisable under
applicable law or otherwise to consummate and make effective the Merger, (ii)
obtain from governmental entities any consents, licenses, permits, waivers,
approvals, authorizations or orders required to be obtained or made by Hach,
HAC, ETS or the Surviving Corporation or any of their respective subsidiaries
in connection with the authorization, execution and delivery of the Merger
Agreement and the consummation of the Merger and (iii) make all necessary
filings, and thereafter make any other required or appropriate submissions,
with respect to the Merger Agreement and the Merger required under the rules
and regulations of the NASD, the Securities Act, the Exchange Act and any
other applicable federal or state securities laws and any other applicable
law.

CONDITIONS TO THE MERGER

CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES. The obligations of
Hach, HAC and ETS to consummate the Merger are subject to the satisfaction or
waiver of certain conditions, including, without limitation: (i) the
continuing effectiveness of the Registration Statement, (ii) the approval of
the Merger Agreement and the Merger by the shareholders of ETS, (iii) the
absence of any injunction or order making the Merger illegal or otherwise
prohibiting its consummation, (iv) the receipt of all material consents,
approvals and authorizations legally required to be obtained to consummate
the Merger, (v) the authorization for listing on The NASDAQ Stock Market,
subject to official notice of issuance, of the shares of Hach Common Stocks
into which shares of ETS Common Stocks will be converted pursuant to the
Merger Agreement, (vi) the receipt from Krieg DeVault Alexander & Capehart,
counsel to ETS, of its opinion to the effect that the Merger will be treated
for federal income tax purposes as a tax-free reorganization, (vii) receipt
by Hach and ETS of investment letters from certain shareholders of ETS, and
(viii) the execution and delivery of each of the employment agreements with
key employees, the employment agreement with Mark Stephenson, the consulting
agreement, non-compete agreement and lock-up agreements with Harry
Stephenson, and the Escrow Agreement.

CONDITIONS TO THE OBLIGATIONS OF HACH AND HAC. The obligations of
Hach and HAC to consummate the Merger are subject to the satisfaction or
waiver of certain additional conditions, including, without limitation: (i)
the accuracy at and as of the Effective Time of each of the representations
and warranties of ETS contained in the Merger Agreement, (ii) the performance
or compliance by ETS with all material agreements and covenants required by
the Merger Agreement to be performed or complied with by it on or prior to
the Effective Time, (iii) the receipt of a legal opinion of ETS counsel, (iv)
the receipt of a report from ETS' financial managers, (v) confirmation that
no addition rights to acquire ETS Common Stocks exist, (vi) confirmation of
the disposition of certain ETS contracts prior to Closing, (vii) approval of

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the Hach Board of Directors, and (viii) the absence of any adverse change in
the business or financial condition of ETS since December 31, 1996. Hach and
HAC have no current intention of waiving any such conditions. However, if
Hach and HAC were to elect to waive any such conditions, assuming all other
conditions to the Merger had been satisfied, the Merger would be consummated
without the waived conditions having been satisfied.

CONDITIONS TO THE OBLIGATIONS OF ETS. The obligations of ETS to
consummate the Merger are subject to the satisfaction or waiver of certain
additional conditions, including, without limitation: (i) the accuracy at and
as of the Effective Time of each of the representations and warranties of
Hach and HAC contained in the Merger Agreement, (ii) the performance or
compliance by Hach and HAC with all material agreements and covenants
required by the Merger Agreement to be performed or complied with by each of
them on or prior to the Effective Time, (iii) the receipt of a legal opinion
from Hach counsel, (iv) the absence of any adverse change in the business or
financial condition of Hach since April 30, 1997. ETS has no current
intention of waiving any such conditions. However, if ETS were to elect to
waive any such conditions, assuming all other conditions to the Merger had
been satisfied, the Merger would be consummated without the waived conditions
having been satisfied.

TERMINATION

The Merger Agreement may be terminated at any time prior to
consummation of the Merger by mutual consent of the parties and by any party
if (i) the parties are prohibited from consummating the transactions
contemplated by the Merger by a permanent injunction, (ii) if any
governmental entity whose consent is required to consummate the transactions
contemplated by the Merger determines not to give its consent or (iii) if the
average per share values of the Hach Common Stocks used to determine the
numbers of shares to be delivered at the Effective Time are less than $9.00
in the case of Hach Common Stock or $7.00 in the case of Hach Class A Common
Stock. The Merger Agreement also provides that Hach may terminate the Merger
Agreement if the ETS Board at any time prior to the Effective Time of the
Merger withdraws, modifies or changes any recommendation and declaration
regarding the Merger Agreement or the Merger. The Merger Agreement further
provides that, if the ETS Board withdraws recommendation of the Merger and
the Merger Agreement or has received a Business Combination Transaction
Proposal, Hach may terminate the Merger Agreement and abandon the Merger.
ETS, under certain circumstance, may terminate the Merger Agreement and
abandon the Merger, if the Board of Directors of ETS recommends a Business
Combination Transaction Proposal, subject to paying a break-up fee to Hach.
Either ETS or Hach may terminate the Merger Agreement upon a breach of the
other party's representation, warranty, covenant or agreement (subject to a
right to cure in favor of the breaching party). Finally, Hach may terminate
the Merger Agreement in the event any update of the disclosure schedules
provided by ETS in connection with the Merger Agreement discloses any new
material liabilities between the signing of the Merger Agreement and Closing.
Additionally, upon the termination of the Merger Agreement, the Stockholder's
Agreement will also terminate. See "The Merger-Conditions for Merger and
Other Provisions."

BREAK-UP FEE

If the Merger Agreement is terminated: (i) by Hach as a result of the
ETS Board's withdrawal of or resolution to withdraw its recommendation with
respect to the Merger Agreement or the Merger, (ii) by ETS in order to pursue
a Business Combination Proposal or (iii) by Hach following its receipt of
notice from ETS that it has received and is considering a Business
Combination Proposal, and if, within one (1) year of such termination ETS,
the ETS Subsidiary or any of their affiliates enters into a letter of intent
or similar agreement or a definitive agreement for a Business Combination
which relates to or results from the

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Business Combination Proposal which was the subject of Hach's termination,
ETS shall pay Hach a break-up fee in immediately available funds, equal to
all reasonable out-of-pocket expenses and fees actually incurred or accrued
by Hach or HAC, or on their respective behalf in transactions contemplated by
the Merger Agreement on and after September 1, 1997 and prior to the
termination of the Merger Agreement.

Hach is required to submit an accounting of its expenses comprising the
break-up fee within 15 days of receipt of notice from ETS relating to the
above termination events, and ETS is required to pay the break-up fee within
5 business days following the receipt by ETS of such accounting. No
break-up fee will be payable by ETS if the Merger is consummated.

AMENDMENT AND WAIVER

The Merger Agreement may be amended by the parties thereto by
agreement of their respective boards of directors at any time prior to the
Effective Time; provided, however, that, after the approval of the Merger
Agreement by the shareholders of ETS, no amendment may be made to modify the
consideration to be received by ETS shareholders or the dollar value of Hach
Common Stocks to be placed in escrow, except such amendments as have received
the requisite shareholder approval and such amendments are permitted to be
made without stockholder approval under the IBCL. The Merger Agreement may
not be amended except by an instrument in writing signed by the parties
thereto.

At any time prior to the Effective Time, any party to the Merger
Agreement may (i) extend the time for or waive compliance with the
performance of any obligation or other act of any other party thereto or (ii)
waive any inaccuracy in the representations and warranties contained in the
Merger Agreement or in any document delivered pursuant thereto. Any such
extension or waiver will be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.

AGREEMENTS WITH RESPECT TO EMPLOYEE BENEFITS FOLLOWING THE MERGER

Hach has agreed to provide those former ETS employees who continue as
employees of Hach or the Surviving Corporation following the Effective Time
("Continuing Employees"), substantially the same employee benefits under
substantially the same terms and conditions as Hach offers to its similarly
situated employees from time to time. Continuing Employees will be credited
with their years of service as an ETS employee for purposes of eligibility
under the Hach welfare benefit plans and eligibility and vesting (but not
benefit accrual or contributions under Hach's profit sharing plan). Hach
will also use commercially reasonable efforts to cause the appropriate health
care providers under Hach's benefit plans to waive pre-existing condition
exclusions for, and credit deductible amounts previously paid by, Continuing
Employees (subject to certain limitations). Hach has also agreed to take
certain actions with respect to the disposition of the ETS ESOP, and its
administration until such disposition. Until such time as the Continuing
Employees are covered by the Hach welfare benefit plans, they shall remain
subject to the existing ETS welfare benefit plans.

Notwithstanding the above, Hach or the Surviving Corporation will
administer the ETS 401(k) Plan as a separate plan until such time as the ETS
ESOP or the ETS ESOP loan (or any successor loan) is repaid. At that time,
the ETS 401(k) Plan will be merged into the Hach profit sharing Plan.

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INDEMNIFICATION; ESCROW

The Escrow Agreement provides that the ETS shareholders will indemnify
Hach, HAC and certain of their affiliates (each a "Hach Party") from and
against the amount of any loss, cost, claim, expense or damage (including,
without limitation, reasonable attorneys' fees and reasonable accountants'
fees incurred in investigating any matter of the nature indemnified against
under the Agreement) suffered or incurred by a Hach Party, as a result of any
incorrect, untrue or incomplete representation, warranty or covenant of ETS
made in the Merger Agreement, or any other written statement or written
agreement furnished pursuant to the Merger Agreement or of any breach by ETS
of any such representation, warranty or covenant. The Merger Agreement
provides that $1,750,000 in cash and Hach Common Stocks will be deposited by
Hach in escrow at the Effective Time with American National Bank and Trust
Company, as escrow agent (the "Escrow Agent"), under the terms of an Escrow
Agreement signed at the Closing (the "Escrow Agreement") in order to secure
the indemnification obligations of the ETS shareholders. A copy of the form
of Escrow Agreement is attached to this Proxy Statement/Prospectus as
Appendix IV.

Pursuant to the Merger Agreement, 28% of indemnifiable damages payable
to a Hach Party will be allocated to holders of ETS Class A Common Stock and
72% of such indemnifiable damages will be allocated to holders of ETS Class B
Common Stock. The Escrow Agent will maintain separate escrow accounts to
more easily allocate payments made from the escrow among the ETS shareholders
in accordance with their liability under the Merger Agreement. The Escrow
Agreement provides that the obligations of the ETS shareholders to pay
indemnifiable damages due to a Hach Party under the Merger Agreement are
limited in two respects: first, no such damages are to be paid unless the
cumulative amount of all such damages exceeds $100,000 (and then only damages
above such threshold are to be paid); and second, the aggregate of all
indemnifiable damages to be paid by ETS shareholders will not exceed the
amounts held under the Escrow Agreement. These limitations do not apply,
however, in the case of any fraud or intentional misrepresentation or
omission or with respect to indemnifiable damages which result from a breach
of ETS' representations with respect to: capitalization and ownership of its
shares, its authority to enter into the Merger Agreement and Merger, its
compliance with certain legal and contractual requirements; taxes, and the
information it provides which will be included in the Registration Statement.

A claim will become final under the Escrow Agreement: (i) as of the
date of a notice of claim given to the Shareholders' Representative (who will
initially be Harry T. Stephenson), if the Shareholders' Representative has
not objected to such claim prior to the 20th day after his receipt of such
notice, (ii) upon receipt by the Escrow Agent of a joint notice of claim from
Hach and the Shareholders' Representative, and (iii) upon receipt by the
Escrow Agent of an award of an arbitrator appointed in accordance with the
Escrow Agreement, if Hach and the Shareholders' Representative are unable to
resolve a claim within 20 days after the Shareholders' Representative has
objected to the claim.

Once a claim becomes final under the Escrow Agreement, the Escrow Agent
will use cash and Hach Common Stocks (allocated from among the separate
accounts available under the escrow in a manner to reflect both the agreed
upon liability among ETS shareholders and the proportion of the consideration
components at the commencement of the escrow) as is necessary to satisfy the
amount then due to Hach or any third party with respect to such claim or take
such other action with respect to the Hach Common Stocks as may be directed
by Hach. As necessary, the Escrow Agent may liquidate Hach Common Stocks to
generate necessary cash proceeds to fund indemnification payments, or, at the
request of Hach, with respect to payments to be made to Hach or HAC, may
deliver to Hach directly that number of shares of Hach Common Stocks (valued
at their Average Market Price, using the date the claim became final, or, if
such day is not a trading day, on the immediately preceding trading day, as
the "Determination Date" for purposes of calculation) whose value is equal to
the required indemnity payment.

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If, at the time any release of cash or Hach Common Stocks from any of
the accounts would otherwise become due, any amount is due to any Hach Party
with respect to matters or contingencies covered by such account, or there
are claims or matters then pending or threatened with respect to which any
Hach Party may be entitled to payment from such accounts, or events have
occurred which may be the basis for any such claim or matter which may
thereafter be asserted within 60 days of such proposed release, the Escrow
Agent will, upon notice from Hach, withhold from such release cash and Hach
Common Stocks (in the appropriate proportion) having a value equal to the
estimated amount involved as a result of such pending, threatened or
potential claims or matters. The balance, if any, of cash and Hach Common
Stocks so withheld, after the full amount due to the Hach Party has in fact
been ascertained and applied, will be promptly released from the escrow.

For the purposes of determining the amount of Hach Common Stocks to be
released from, or retained in, the escrow, Hach Common Stocks will be valued
at a price per share equal to their Average Market Price, using the day as of
which such shares are, or, but for the above discussed withholding provision,
would have been, released from the escrow as the "Determination Date" for
purposes of calculation. See, "The Merger -- Conversion of ETS Common Stocks
-- Average Market Price."

Hach will pay the scheduled fees of the Escrow Agent. The
Representative and Hach have also agreed to reimburse other reasonable fees
incurred by the Escrow Agent in connection with extraordinary services or any
disputes between Hach and the Representative. The Shareholders'
Representative shall be responsible for his expenses under the Escrow
Agreement to the effect that the fees and expenses will be paid from sources
other than the assets of ETS, or the Hach Common Stocks or cash held in
escrow; provided that up to $250,000 of the amounts held in escrow, if
available, may be used to reimburse costs and expenses incurred by the
Shareholders' Representative in defending third party claims in accordance
with the provisions of the Merger Agreement and the Escrow Agreement.

Stock dividends and shares resulting from stock splits in respect of
Hach Common Stocks held in escrow will be delivered to the Escrow Agent for
deposit in the escrow. Each former ETS shareholder will have the right to
vote those shares of Hach Common Stocks held in escrow in proportion to his
or her respective interest therein.

EXPENSES

Under the Merger Agreement, the parties have agreed that each party
shall pay its own expenses incurred in connection with the Merger; provided,
however, if the Merger is consummated, the holders of ETS Class B Common
Stock have agreed to reimburse Hach for 25% of all such expenses incurred by
ETS following October 23, 1997, to the extent such expenses exceed $50,000.
The cash and shares of Hach Common Stocks to be delivered to the holders of
ETS Class B Common Stock upon the Merger will be reduced to reflect the
amount of this reimbursement as agreed by Hach and ETS. Hach has agreed to
pay the expenses related to the filing of the Registration Statement, the
printing of this Proxy Statement/Prospectus, the listing of the Hach Common
Stocks on The NASDAQ Stock Market, compliance with Blue Sky Laws, and all
filings under the HSR Act (other than the fees and disbursements of counsel,
accountants and other representatives of ETS relating to such matters). The
ETS ESOP will be solely responsible for any fees and expenses due to its
independent trustee and to ComStock relating to the Merger and the related
transactions which are properly payable by it consistent with its fiduciary
duties.

BUSINESS OF HACH

Hach is engaged predominantly in a single industry segment
encompassing laboratory instruments, process analyzers and test kits which
are used to analyze the chemical content and other properties of water and
other aqueous solutions. This segment encompasses the analytical reagents and
chemicals

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manufactured and sold by Hach. Hach manufactures and sells a small amount of
chemicals for uses not associated with Hach's analytical systems for water
analysis.

SALES BY PRINCIPAL PRODUCT GROUP

(PERCENT OF NET SALES)

[Download Table]

1997 1996 1995
------ ------ ------

Analytical Reagents and Chemicals 31.7% 30.9% 31.3%
Laboratory and Portable Instruments 29.5% 29.7% 29.1%
Continuous Reading Process Analyzers 17.4% 16.8% 16.6%
Portable Test Kits and Replacements 12.2% 13.2% 13.7%
Other 9.2% 9.4% 9.3%
------ ------ ------
Total 100.0% 100.0% 100.0%
------ ------ ------
------ ------ ------

Analytical reagents and chemicals are manufactured and sold to support
the Hach testing systems of laboratory and portable instruments, process
analyzers and portable test kits. More stringent water quality standards and
a worldwide direction toward better control of processes - exhibited by ISO
(International Organization for Standardization) 9000 registration of many
industrial companies - drive the demand for Hach's products and their
continued use.

Laboratory and portable instruments consist of Hach-manufactured
analytical instruments in the following categories: spectrophotometers and
colorimeters, turbidimeters, pH and IS meters, pH electrodes, Ion Selective
Electrodes, DO (dissolved oxygen) meters, COD (chemical oxygen demand)
apparatus, digestion apparatus, conductivity meters, and precision
reagent-dispensing devices. These products are sold to municipal water and
wastewater utilities, chemical manufacturers, industrial water conditioning
firms and organizations, power utilities, commercial analytical laboratories,
and government agencies for the testing and monitoring of controlled
impurities in water systems.

Continuous-reading process analyzers consist of Hach-manufactured
products in the following categories: colorimetric analyzers, process
turbidimeters, pH controllers, and analyzer accessories. These products are
sold to municipalities for monitoring and controlling drinking water quality
and to ensure that wastewater treatment procedures comply with government
regulations. Steam-generating plants, including operations at electrical
utilities, petrochemical processors, heavy industry installations, and pulp
and paper factories, use Hach's continuous-reading process analyzers for
on-line monitoring of cooling-tower and boiler-feedwater quality. The
micro-electronics industry uses Hach's trace silica analyzers to monitor
ultrapure water systems used in processing electronic components.

Hach offers more than 200 different test kits for 12 different
application areas ranging from agriculture to water quality. These portable
test kits are recognized worldwide for ease of use, innovative chemistry,
field-oriented design and rugged construction. Test kits are sold to
municipalities for use in monitoring drinking water distribution systems; to
conservation groups to monitor for influences impacting the environment; to
educators for use in teaching environmental awareness; to customers
monitoring industrial processes; to the water conditioning industry to use in
testing water quality; and to environmental regulatory authorities for use in
checking compliance requirements.

No material part of the business of Hach is dependent upon a single
product or any customer or a small group of customers.

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BUSINESS OF ETS

Since 1985, ETS has been manufacturing reagent test strips for use in
business, industry, and the home. Today, ETS manufactures and sells over 200
products with distribution worldwide. ETS is an ISO 9001 certified company.

ETS' staff of research scientists, industrial engineers and
manufacturing and marketing experts develop products that employ
state-of-the-art medical diagnostic technology for numerous applications. The
product lines of ETS provide individuals, both technical and non-technical,
with the means to conduct reliable chemical tests on site, quickly,
conveniently, and economically.

ETS PRODUCTS AND SERVICES

GENERAL. ETS sells a variety of dip and read test devices for on-site
testing in the pool and spa, automotive and truck, industrial, medical, soil
and consumer test markets. Sales by principal product group for 1997 were as
follows:

[Download Table]

Pool and Spa 58%
Transportation 10%
Industrial 25%
Medical 4%
Soil 1%
All Other 2%
----
Total 100%
----
----

These test devices are manufactured with unique proprietary equipment.
In each niche business, ETS has a small market share with growth coming from
current product expansion of competing products, new chemistries in existing
markets, and new products in strategically defined markets.

COLORMETRIC TEST STRIPS. Dry reagent technology was developed in the
1950s for the medical diagnostics industry as a means to make certain types
of testing easier and faster (replacing liquid test methods). The process
involves impregnating a roll of specialty paper in a liquid reagent bath. The
paper is then pulled through a tunnel where it is dried, rewound on rolls and
stored in humidity-controlled conditions.

The dry reagent reels are then processed under low humidity/temperature
conditions. This process involves slitting the rolls and mounting the dry
reagent paper on sheet plastic and further slitting it into strips. Each test
strip may contain multiple test pads. The strips are put into desiccated
bottles and capped. The bottles are then moved out of the low humidity room
where labels with color charts are affixed. When a test strip is dipped into
an aqueous solution, the test pad(s) change color. The color on the test pad
is then compared to the color chart on the bottle, indicating the
concentration of a particular chemical.

QUANTAB-Registered Trademark- TEST STRIPS. Quantab test strips employ a
simplified alternative to conventionally used titration techniques and
provide test results in minutes. When the Quantab strip is placed in an
aqueous sample, fluid rises up the strip by capillary action and a colored
column appears. The length of the colored column is proportional to the
concentration of the substance being measured. The length of the column is
compared to a calibration chart on the bottle of strips to accurately read
the amount of the analyte that is being measured.

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PRIMARY MARKETS

TRANSPORTATION. Cooling systems are critical to healthy engines and
should be tested frequently to avoid costly damage. Whether the cooling
system uses an ethylene or a propylene glycol-based antifreeze, one
CoolTrak-Registered Trademark- test can be used. Because CoolTrak is quick
and inexpensive, it encourages routine monitoring of coolant levels. This
regular testing means that potential cooling system problems and costly
repairs can be avoided.

CoolTrak test strips are currently approved for use in fleet maintenance
programs by the military, the U.S. Postal Service and municipalities across
the country. For busy fleet maintenance and automotive service centers,
CoolTrak provides a convenient, reliable economical alternative to mechanical
measuring devices.

In addition, CoolTrak can provide an effective tool for selling cooling
system services. By routinely testing all vehicles brought into the shop, the
automotive service center can identify profitable service opportunities, and
the visible CoolTrak test results add instant credibility to service
recommendations.

CoolTrak also assists in coolant recycling. New EPA restrictions for
disposal of ethylene glycol have made recycling an attractive and
cost-effective alternative. For just pennies a test, CoolTrak can pre-screen
coolant for recycling viability.

ETS also sells to private label customers a line of heavy-duty coolant
test kits that measure the amount of SCA's (special coolant additives) that
are used in diesel engine coolants to protect cast iron cylinder liners.
Multi-parameter test strips that measure glycol as well as the SCA's (nitrite
and molybdate) make testing these chemistries easy for diesel mechanics and
operators.

INDUSTRIAL. The water quality product line from Environmental Test
Systems serves a diverse market of professionals and consumers who need a
fast, easy, and reliable way to monitor water quality on the job or in their
home.

AquaChek-TM- Nitrate/Nitrite is a test strip that measures
concentrations of nitrate and nitrite in surface and ground water. High
levels of nitrate adversely impact both human health and the aquatic
environment. Developed in cooperation with scientists from the former Soviet
Union, AquaChek Nitrate/Nitrite works in just 60 seconds to detect
concentration levels well below standards established by the Environmental
Protection Agency.

AquaChek 5 is a test strip that simultaneously conducts five important
water tests in 60 seconds or less: total chlorine, free chlorine, total
hardness, total alkalinity, and pH. These water conditions can affect the
taste of drinking water, cause scaling or corrosion of pipes and fixtures, or
reduce the cleaning power of soaps and detergents.

SofChek-TM- is a single-test strip that provides reliable measurements
for total hardness of water within 15 seconds. The product is packaged in
bottles of 50 strips for professionals who need a quick, reliable on-site
test. The strips are also packaged individually for use in direct mailings
and promotional giveaways.

An important use for ETS' Quantab-Registered Trademark- test strip is
the measurement of chloride in the production of concrete. In Japan and other
Pacific Rim countries, sand is dredged from the sea to be used as aggregate,
a practice which creates high levels of chloride in the concrete ore. The
chloride adversely affects the integrity of hardened concrete by causing
corrosion and expansion (cracking) problems in steel reinforcing

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materials, bolts, and anchors. In addition, chloride affects the setting time
of concrete. To easily and reliably monitor chloride levels in concrete
manufacturing, Quantab test strips are placed directly into wet concrete or
aqueous extraction solutions made from foundation core samples. If high
levels of chloride are detected, corrective measures can be taken. In
addition, the Quantab test strip becomes an important permanent record of the
test. Because Quantab is faster, easier, and less expensive than conventional
testing methods, concrete manufacturers are able to test more often, ensuring
more consistent product quality.

ETS' Quantab titration technology has many industrial applications. One
use is the processing of petroleum products. Because oil is often found or
stored in salt domes where high chloride levels may promote corrosion,
Quantab is used as an easy, reliable method of monitoring chloride levels.

Another principal market for Quantab is the food processing industry,
where the technology is used for testing any food substance containing salt
for flavor, curing, or preservation. Approved procedures are available for
the use of Quantab in testing meats, cheese, butter, cured or canned seafood,
vegetables, sauces, seasonings, chips and other snacks, cereals, dry mixes
and even animal feeds.

A test for the quality of industrial cutting fluids has been recently
introduced by a private label customer which is a major OEM supplier to
world-wide industry. This test makes testing the efficacy of cutting fluids
by machine operators much easier than previous test methods.

POOL AND SPA. Under the AquaChek name, ETS offers a complete line of
test strips for pool and spa water testing, including products specially
developed for both the owner and the pool care professional. Promoted by the
company's trademark cartoon character, Dr. H. Tueau (pronounced H20), the
strips provide a fast, easy, and reliable method of testing for a variety of
parameters.

The AquaChek pool and spa product line includes 6-way, 5-way and 3-way
test strips that measure multiple pool and spa water chemistries on a single
strip. The simple test strip procedure eliminates drop counting,
cross-contamination and other operator variables to produce reliable results.
Each packaged product is color-coded to help customers select the specific
product they need, such as:

- AquaChek Select, the premier test kit for the pool and spa owner,
tests for free chlorine, total chlorine, total alkalinity, pH, and
total hardness. An illustrated treatment book which accompanies the
kit gives the consumer detailed recommendations for correcting
water chemistry imbalances. The kit also includes a reusable
plastic color comparator.

- AquaChek Silver, created specifically for pool care professionals,
conducts six important pool tests on one strip: total chlorine,
free chlorine, total alkalinity, pH, cyanuric acid, and total
hardness.

- AquaChek Yellow for the pool and spa owner tests free chlorine, pH,
and total alkalinity, while AquaChek Red tests bromine, pH, and
total alkalinity.

- AquaChek Pink tests for nitrate. When levels of nitrate are too
high, rapid algae growth occurs, requiring additional amounts of
chlorine.

ETS also distributes the AquaChek product line to selective customers in
the pool and spa industry under their branded labels. These private label
brands are primarily sold to large chemical packagers who market their
products through pool and spa retailers as well as mass merchants throughout
North America.

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ETS has introduced a color scanner instrument under the ColorQuik-TM-
brand name that electronically reads a test strip and provides a pool
treatment prescription for the consumer. This product is marketed by ETS to
pool and spa retailers who offer in-store testing of their customers'
pool/spa water.

MEDICAL. ETS sells a residual chlorine test for use by medical
personnel in dialysis centers. This product is FDA 510K registered and
marketed under the SteriChek-Registered Trademark- brand name. This product
tests residual levels of chlorine in dialysis machine's rinse water prior to
patient treatment.

SOIL. In the fall of 1997, ETS introduced a line of easy-to-use
consumer soil test kits that capitalize on the dry reagent technology. This
line of products is designed to be marketed through lawn and garden
distributors and retail stores. These soil kits include pH, nitrogen,
phosphorous, and potassium tests. The AccuGrow-TM- test kits provide a major
breakthrough in reducing testing time and providing easy, on-site testing for
backyard gardeners.

PROMOTION. ETS has marketed its water hardness test as a promotional
product for several major corporations that are looking for an economical way
to reach consumers with an easy-to-use test. These promotions typically use
the ETS test attached to a promotional mailer to create an awareness on the
part of tens of millions of households of their water hardness. This
awareness, along with a promotional piece, tie in to the sale of a
complementary product that is sold by the marketing corporation.

PROPERTIES

ETS has one facility located at 23575 County Road 106, Elkhart, Indiana
46514 (the "Elkhart Facility"). The Elkhart Facility is a two-story
Varco-Pruden pre-engineered metal building that was constructed in three
phases as ETS grew. The Elkhart Facility currently comprises 40,000 square
feet, with 35,500 square feet of first floor manufacturing, office and
warehouse space and 5,300 square feet of second floor office space. The
facility is owned by ETS. The Elkhart Facility is anticipated to meet
capacity needs in the short and mid-term. The land at the Elkhart Facility
will support expansion of an additional 20,000 square feet.

The primary manufacturing location of ETS for all products is the
Elkhart Facility. ETS subcontracts out certain processes not currently
available at the Elkhart Facility.

MARKETING AND DISTRIBUTION

ETS' products are sold by three full-time ETS sales people located at
the Elkhart Facility. Each individual is responsible for a specified
market(s) and up to 40 manufacturer's representatives work under each such
person. These manufacturer representatives earn up to 10% commission on the
sale of ETS products and handle other related non-competitive products.

ETS communicates to its potential customers through trade publications,
direct mail, consumer advertising and trade shows. Approximately 50% of the
products ETS manufactures are sold under private labels with each
relationship varying to the degree of distribution knowledge ETS contributes.
In some cases, ETS serves as a contract manufacturer with very little
knowledge of distribution or customer uses. In certain cases, ETS customers
add packaging to finished product.

Foreign sales are handled directly by ETS with all transactions paid in
US dollars. Foreign sales were approximately 21% of total sales in the last
fiscal year.

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SEASONALITY

With pool and spa products representing nearly 60% of total ETS sales
and these products being tied to a seasonal activity, ETS sales could be
characterized as somewhat seasonal. 79% of pool and spa sales in 1997
occurred between January and July. Most of this product is sold to the U.S.
and Canadian markets. With this business seasonality, ETS' total sales during
the first half of 1997 represented 62% of the total year's sales in 1997. The
balance of the product line offerings of ETS show much less seasonality. The
only exception to this is sales of coolant products sold in the US where
volume is weighted more in the latter half of the year. Coolant products,
however, only represented 10% of total ETS sales in 1997 and are projected to
be 5% of sales in 1998.

AVAILABILITY OF MATERIALS

ETS has developed close working relationships with many of its key
vendors to assure an adequate and continuous supply of materials for ETS
products. There are some unique components that would cause temporary
stoppage of specific products if these components were not available.
However, since ETS believes it could obtain alternate sources of supply after
a reasonable period of time, the temporary stoppage would not have a material
adverse effect on ETS.

COMPETITION

Generally, ETS competes with the following types of competitors: (i)
test strip manufacturers; (ii) liquid</TAB>t test kit manufacturers; and
(iii) instrument/test lab manufacturers. ETS believes that its major
competitors include the following: Lamotte Company (manufactures test strips
and liquid</TAB>t test kits and instruments); Industrial Test Systems, Inc.
(manufactures test strips primarily for private label customers); Serim
Research Corporation (manufactures medical test strips); Taylor Technologies,
Inc. (manufactures liquid test kits and instruments); Luster Leaf Products,
Inc. (manufactures capsulated soil test kits); and Farnam Companies, Inc.
(manufactures tablet soil test kits).

Different competitive factors are of greater or lesser importance with
respect to each of the ETS product lines/markets although, overall, technical
sophistication, reliability, quality, relative ease of operation and price
probably are most important. ETS believes that it has no competitive
disadvantages with respect to any of these factors. In many instances ETS has
a competitive advantage due to the relative ease with which individuals
without technical backgrounds can use the ETS' products to perform analyses.
ETS' competition in international markets is less developed and therefore
offers opportunity for ground floor entrenchment.

RESEARCH

During fiscal 1997, 1996 and 1995, ETS spent $1,024,000, $1,128,000, and
$1,034,000, respectively, on ETS-sponsored research and development
activities.

PATENTS

ETS owns a number of patents. While ETS regards its patents as valuable,
it does not consider any of its business materially dependent upon any single
patent.

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BACKLOG

As of January 7, 1998 ETS had $2,800,000 in firm, open orders. A high
percentage of these open orders were represented by pool and spa products
destined for the North American market for the 1998 summer pool season. All
of these orders are expected to be filled in 1998. Data is not available from
1997 or 1996, but as of January 9, 1995, firm, open orders were $2,300,000.

EMPLOYEES

At December 31, 1997, ETS employed 80 people. The Company is not a party
to any collective bargaining agreements.

EMPLOYEE BENEFIT PLANS

ETS maintains the following employee benefit plans:

ENVIRONMENTAL TEST SYSTEMS, INC. INDIVIDUAL PROFESSIONAL DEVELOPMENT
PLAN ("IPDP BONUS PLAN"). The IPDP Bonus Plan allows all exempt personnel
grade 6 and over to earn up to 12% of salary if their individual goals are
achieved and ETS sales and profit goals are achieved. Each participant has
four to eight weighted goals. The IPDP Bonus Plan was established January 1,
1997.

ENVIRONMENTAL TEST SYSTEMS, INC. PROFIT SHARING AND SAVINGS AND
PROTECTION PLAN. This plan is a 401(k) profit sharing plan covering
substantially all employees. The Plan is a defined contribution plan under
which employees may voluntarily contribute a percentage of their
compensation. The Plan also permits ETS to make discretionary contributions
as the ETS Board of Directors determines by resolution adopted before the end
of the year.

ENVIRONMENTAL TEST SYSTEMS, INC. MAKE-UP BENEFIT PLAN. This Plan
provides benefits to Mark J. Stephenson identical to the benefits he would
have received under the ETS ESOP had he been eligible to participate.

EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST. Effective August 1, 1996, the
Company established the ETS ESOP for the benefit of ETS employees who meet
certain eligibility requirements, including having completed 1,000 hours of
credited service during the ESOP plan year. The ETS ESOP trust acquired
231,304 shares of ETS Class A Common Stock with the proceeds of a bank loan
that is guaranteed by ETS, recorded on the consolidated balance sheet of ETS,
and collateralized by the shares of the ETS Class A Common Stock purchased.
The contributions of ETS to the ETS ESOP, plus dividends paid on the shares
of ETS Class A Common Stock held by the ETS ESOP, are used to repay the loan
principal and interest. As the ETS ESOP debt is repaid, shares of the ETS
Class A Common Stock are released from collateral and allocated to qualified
ETS ESOP participants based on the proportion of principal paid during the
period to the original loan amount. As shares of ETS Class A Common Stock are
committed for release from collateral, ETS records contribution expense equal
to the market value (as determined annually by an independent valuation firm)
of the released shares.

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HACH COMPANY AND ENVIRONMENTAL TEST SYSTEMS, INC.
UNAUDITED PROFORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The following pro forma condensed combined financial statements of Hach
and ETS include the pro forma condensed combined balance sheet as of January
31, 1998 and the pro forma condensed combined statements of operations for
the year ended April 30, 1997 and the nine months ended January 31, 1998.

The pro forma condensed combined balance sheet as of January 31, 1998
gives effect to the acquisition of all of the outstanding ETS Common Stocks
for cash of approximately $7,344,000 and approximately 641,000 shares of Hach
Common Stock and approximately 232,000 shares of Hach Class A Common Stock
("the merger") as if such transaction had occurred on January 31, 1998. The
pro forma condensed combined statements of operations for the year ended
April 30, 1997 and nine months ended January 31, 1998 assume Hach and ETS had
completed the merger as of May 1, 1996.

The pro forma condensed combined financial statements have been derived
from: (i) the audited statement of operations of Hach for the year ended
April 30, 1997, (ii) the audited balance sheet of ETS as of December 31,
1997, (iii) the unaudited interim balance sheet and statement of operations
of Hach as of and for the nine months ended January 31, 1998, (iv) the
unaudited interim statement of operations of ETS for the nine months ended
December 31, 1997, (v) the unaudited statement of operations of ETS for the
twelve month period ended April 30, 1997, and (vi) pro forma adjustments
based on preliminary estimates. Actual adjustments will be made based upon
appraisals of asset and liability values of ETS. The pro forma condensed
combined financial statements do not contain all disclosures required by
generally accepted accounting principles.

The unaudited pro forma condensed combined financial statements should
be read in conjunction with the historical financial statements included and
incorporated by reference herein, and other financial data of ETS and Hach
included elsewhere in this Proxy Statement/Prospectus. The pro forma
condensed combined statements of operations may not be indicative of actual
results that would have been achieved if the transactions had occurred on the
dates indicated or the results which may be realized in the future.

S-4 58th Page of 215 TOC 1st Previous Next ↓Bottom Just 58th
HACH COMPANY AND ENVIRONMENTAL TEST SYSTEMS, INC.
UNAUDITED PRO FORMA CONDENSED
COMBINED BALANCE SHEET
(IN THOUSANDS OF DOLLARS)
HISTORICAL

[Enlarge/Download Table]

HACH ETS PRO FORMA
ADJUSTMENTS COMBINED
----------- -------------
ASSETS JANUARY DECEMBER DR(CR)
------ ------- --------
1998 1997
---- ----

Cash and cash equivalents . . . . . . . . . . . . $9,757 $1,560 (v) $2,000 $5,673
(1) (7,344)
(1) (300)
Marketable securities, held to maturity . . . . . 801 801
Accounts receivable . . . . . . . . . . . . . . . 16,981 1,315 18,296
Inventories, net . . . . . . . . . . . . . . . . . 13,765 1,218 14,983
Deferred tax assets and other current assets . . . 5,108 280 5,388
-------- -------- -------- --------

Total current assets. . . . . . . . . . . . . 46,412 4,373 (5,644) 45,141

Net property, plant and equipment, at cost . . . . 30,459 2,861 33,320

Acquired product technology . . . . . . . . . . . (1) 12,000 12,000
Goodwill and other intangibles . . . . . . . . . . 70 (1) 4,291 4,361
Marketable securities, held to maturity and other
assets . . . . . . . . . . . . . . . . . . . . . . 3,995 3,995
-------- -------- -------- --------
Total assets . . . . . . . . . . . . . . . . . . . $80,866 $7,304 $10,647 $98,817
-------- -------- -------- --------
LIABILITIES
-----------
Current maturities of long-term debt . . . . . . . $76 $1,076 $1,152
Accounts payable . . . . . . . . . . . . . . . . . 3,429 350 3,779
Accrued liabilities . . . . . . . . . . . . . . . 9,197 402 9,599
-------- -------- --------
Total current liabilities . . . . . . . 12,702 1,828 14,530

Long-term liabilities . . . . . . . . . . . . . . 2,354 38 2,392
Long-term debt . . . . . . . . . . . . . . . . . . 30,000 6,407 (v) (2,000) 38,407
Deferred income taxes . . . . . . . . . . . . . . 1,803 59 (1) (4,698) 6,560
-------- -------- -------- --------
Total liabilities . . . . . . . . . . . . . . . . 46,859 8,332 (6,698) 61,889
-------- -------- -------- --------

STOCKHOLDERS' EQUITY
--------------------
Common stocks . . . . . . . . . . . . . . . . . . 23,246 83 (1) 83 23,246
Additional paid-in capital . . . . . . . . . . . . 21 (1) 21 656
(1) (656)

Retained earnings . . . . . . . . . . . . . . . . 72,909 1,603 (1) 4,603 69,909
Unearned ESOP shares . . . . . . . . . . . . . . . (2,735) (2,735)
Cumulative currency translation adjustment . . . . (191) (191)
Less: Shares held in treasury, at cost . . . (61,957) (1) (8,000) (53,957)
-------- -------- -------- --------
Total stockholders' equity (deficiency). . . . . . 34,007 (1,028) (3,949) 36,928
-------- -------- -------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIENCY) . . . . . . . . . . . . . . . . . . . $80,866 $7,304 ($10,647) $98,817
-------- -------- -------- --------
-------- -------- -------- --------

The accompanying notes are an integral part of this unaudited
pro forma condensed combined balance sheet.

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HACH COMPANY AND ENVIRONMENTAL TEST SYSTEMS, INC.
UNAUDITED PRO FORMA CONDENSED
COMBINED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

[Enlarge/Download Table]

NINE MONTHS ENDED
HISTORICAL

PRO FORMA
HACH ETS ADJUSTMENTS COMBINED
January 31, December 31 ----------- ---------
----------- ----------- dr(cr)
1998 1997
---- ----

NET SALES . . . . . . . . . . . . . . . . $94,293 $7,258 $101,551
COST OF SALES . . . . . . . . . . . . . . 48,113 2,989 (i) $450 51,552
-------- -------- -------- --------
GROSS PROFIT . . . . . . . . . . . . . . 46,180 4,269 49,999

OPERATING EXPENSES
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSE . . . . . . . . 26,189 2,521 (ii) 108 28,818
RESEARCH AND DEVELOPMENT EXPENSE . . . . . 6,213 778 6,991
-------- -------- -------- --------
INCOME FROM OPERATIONS . . . . . . . . . 13,778 970 14,190

INVESTMENT INCOME . . . . . . . . . . . . 786 68 (iv) 201 653
INTEREST EXPENSE . . . . . . . . . . . . . (1,093) (482) (v) 102 (1,677)
-------- -------- -------- --------
INCOME BEFORE TAXES . . . . . . . . . . 13,471 556 13,166

INCOME TAX EXPENSE . . . . . . . . . . . . 4,796 196 (vi) (264) 4,728
-------- -------- -------- --------
NET INCOME . . . . . . . . . . . . . . . $8,675 $360 $597 $8,438
-------- -------- -------- --------

BASIC AND DILUTED EARNINGS PER EQUIVALENT
SHARE . . . . . . . . . . . . . . . . . . $0.48 $0.45
-------- -------- -------- --------
BASIC AND DILUTED EQUIVALENT SHARES . . . 18,011 (vii) 873 18,884
-------- -------- -------- --------
-------- -------- -------- --------

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS

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HACH COMPANY AND ENVIRONMENTAL TEST SYSTEMS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

[Enlarge/Download Table]

TWELVE MONTHS ENDED
HISTORICAL
PRO FORMA
HACH ETS ADJUSTMENTS COMBINED
APRIL 30, APRIL 30, ----------- --------
1997 1997 dr(cr)
--------- ---------

NET SALES . . . . . . . . . . . . . . . $121,480 $13,217 $134,697
COST OF SALES . . . . . . . . . . . . . 62,342 4,906 (i) $600 67,848
--------- --------- --------
GROSS PROFIT. . . . . . . . . . . . 59,138 8,311 66,849

OPERATING EXPENSES
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES . . . . . . 33,385 3,410 (ii) 144 36,939
RESEARCH AND DEVELOPMENT EXPENSE . . 8,459 1,104 (iii) 3,000 12,563
--------- --------- --------
INCOME FROM OPERATIONS . . . . . . 17,294 3,797 17,347

INVESTMENT INCOME . . . . . . . . . . . 1,799 71 (iv) 268 1,602
INTEREST EXPENSE . . . . . . . . . . . (13) (514) (v) 136 (663)
--------- --------- --------
INCOME BEFORE TAXES . . . . . . . . 19,080 3,354 18,286
INCOME TAX EXPENSE. . . . . . . . . . . 6,585 1,317 (vi) (352) 7,550
--------- --------- ------ --------
NET INCOME. . . . . . . . . . . . . $12,495 $2,037 $3,796 $10,736
--------- --------- ------ --------
--------- --------- ------ --------
NET INCOME PER COMMON SHARE . . . . $0.55 $0.45
--------- --------
--------- --------
EQUIVALENT SHARES . . . . . . . . . . . 22,730 (vii) 873 23.603
--------- --------
--------- --------

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS

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HACH COMPANY AND ENVIRONMENTAL TEST SYSTEMS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
STATEMENTS

1. BASIS OF PRESENTATION OF PRO FORMA CONDENSED COMBINED BALANCE SHEET

The accompanying pro forma condensed combined balance sheet as of
January 31, 1998 gives effect to the proposed merger as if such transaction
had occurred on January 31, 1998. See "The Merger."

Adjustments to reflect the acquisition of all of the outstanding
ETS Common Stocks for cash of approximately $7,344,000 and approximately
641,000 shares of Hach Common Stock and approximately 232,000 shares of Hach
Class A Common Stock based upon estimated market value. The accompanying pro
forma condensed combined balance sheet assumes that Hach will incur
$2,000,000 of debt to complete the transaction. The estimated cost of the
merger and purchase accounting adjustments as of January 31, 1998 are
summarized below:

COSTS OF THE MERGER (IN THOUSANDS)

[Download Table]

Issuance of 873,000 shares of Hach Company Common Stocks $ 8,656
Cash 7,344
Transaction costs 300
-------
$16,300
-------
-------

PURCHASE ACCOUNTING ADJUSTMENTS (IN THOUSANDS):

[Download Table]

Current assets acquired $ 4,373
Fixed assets acquired 2,861
Acquired product technology, at fair market value 12,000
Purchased research and development 3,000
Goodwill and intangibles 4,361
Deferred income taxes (4,698)
Liabilities assumed (8,332)
Unearned ESOP shares 2,735
-------
$16,300
-------
-------

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (CONTINUED)

2. PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS ADJUSTMENTS

The accompanying pro forma condensed combined statements of
operations assume that the proposed merger transaction had occurred on May 1,
1996. See "The Merger." The unaudited pro forma condensed combined
statement of operations for the nine months ended January 31, 1998 reflect
the adoption of FAS No. 128, "Earnings per Share".

Adjustments are as follows:

(i) To record amortization of acquired product technology over its
estimated remaining useful life of 20 years.
(ii) To record amortization of goodwill over its estimated life of 30
years.
(iii) To record the write-off of the purchased research and
development
(iv) To reflect estimated reduction in investment income due to cash
used in purchase.
(v) To record estimated debt and interest expense related to debt to
be incurred on the transaction of $2,000,000 at 6.78%
(vi) To reflect adjustment in income tax expense as a result of items
(i), (iv) and (v) assuming a tax rate of 35%
(vii) To reflect number of shares to be issued in the transaction.
Hach equivalent shares at April 30, 1997 of 22,730,000 have
been adjusted for the two-for-one stock split effected in
the form of a stock dividend in October, 1997.

The consummation of the merger is subject to customary conditions,
including negotiations and execution of mutually satisfactory definitive
documentation.

S-4 63rd Page of 215 TOC 1st Previous Next ↓Bottom Just 63rd
DESCRIPTION OF THE HACH COMMON STOCKS

GENERAL

The following summary description is subject to the detailed
provisions of Hach's Amended and Restated Certificate of Incorporation, as
amended ("Hach Certificate"), and Hach's By-laws, as amended, does not
purport to be complete, and is qualified in its entirety by reference thereto.

The authorized capital stock of Hach consists of 25,000,000 shares
of Hach Common Stock and 20,000,000 shares of Hach Class A Common Stock. The
Hach Common Stocks are listed on The NASDAQ Stock Market.

Except as otherwise required by the Delaware General Corporation
Law ("DGCL") or as otherwise provided in the Hach Certificate, each share of
Hach Common Stock and each share of Hach Class A Common Stock have identical
powers, preferences and rights in all respects. There are no redemption or
sinking fund provisions applicable to the Hach Common Stocks. Holders of
Hach Common Stocks are not subject to further calls or assessments by the
Company. All outstanding shares of Hach Common Stock are validly issued, and
fully paid and non-assessable.

VOTING

Holders of shares of Hach Common Stock are entitled to one vote on
any matter to be voted on by the stockholders of Hach. There is no provision
in the Hach Certificate permitting cumulative voting. The holders of shares
of Hach Class A Common Stock are not entitled to vote on any matter to be
voted on by the stockholders of Hach, except as required under the DGCL or
the Hach Certificate.

Under the Hach Certificate and the DGCL, the affirmative vote of
the holders of a majority of the outstanding shares of Hach Common Stocks
entitled to vote will be required to amend the Hach Certificate or to
authorize additional shares of Hach Common Stocks; and the affirmative vote
of the holders of a majority of the Hach Common Stocks entitled to vote will
be required to approve any merger or consolidation of Hach with or into any
other corporation or sale of substantially all its assets or to approve the
dissolution of Hach, subject to the provisions of Article Ninth of the Hach
Certificate which is described more fully below. Except in certain limited
circumstances described below, the holders of the Hach Common Stock will
elect the entire Hach Board of Directors. In addition, as permitted under
the DGCL, the Hach Certificate provides that the number of authorized shares
of either class may be increased or decreased, but not below the number of
shares then outstanding, by the affirmative vote of the holders of a majority
of Hach Common Stocks entitled to vote.

Under the DGCL, the holders of Hach Class A Common Stock will be
entitled to vote on proposals to change the par value of Hach Class A Common
Stock or to alter or change the powers, preferences or special rights of
shares of Hach Class A Common Stock, including the Class A Protection
Provision (as described below), which may affect them adversely.

DIVIDENDS AND DISTRIBUTIONS

Each share of Hach Common Stock and Hach Class A Common Stock are
equal in respect to dividends and other distributions in cash, stock or
property, including distributions in connection with any recapitalization and
upon liquidation, dissolution, or winding up of Hach, except that (i) a
dividend or

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distribution in cash or property on a share of Hach Class A Common Stock may
be greater than any dividend or distribution in cash or property on a share
of Hach Common Stock, and (ii) dividends or other distributions payable on
Hach Class A Common Stock and Hach Common Stock in shares of capital stock
shall be made to all holders of Hach Class A Common Stock and Hach Common
Stock and may be made (a) in shares of Hach Class A Common Stock to the
holders of Hach Class A Common Stock and in shares of Hach Common Stock to
the holders of Hach Common Stock, (b) in shares of Hach Class A Common Stock
to the holders of Hach Class A Common Stock and to holders of Hach Common
Stock, or (c) in any other authorized class or series of capital stock to the
holders of Hach Class A Common Stock and Hach Common Stock. In no event will
either the Hach Class A Common Stock or Hach Common Stock be split,
subdivided, or combined unless the other is proportionately split,
subdivided, or combined.

The Board of Directors of Hach has authority under the Hach
Certificate to pay dividends and make distributions on the Hach Class A
Common Stock in amounts greater than on the Hach Common Stock.

MERGERS AND CONSOLIDATIONS

Each holder of Hach Class A Common Stock and Hach Common Stock will
be entitled to receive the same per share consideration in the event of a
merger or consolidation.

CLASS A PROTECTION

The Hach Certificate contains a "Class A Protection Provision"
which provides that if any person or group (other than Hach), acquires
beneficial ownership of 15% or more of the then outstanding shares of Hach
Common Stock after September 10, 1997, the date the Amendment became
effective, and such person or group (a "Significant Stockholder") does not
immediately after such acquisition beneficially own an equal or greater
percentage of all then outstanding shares of Hach Class A Common Stock, such
Significant Stockholder must, within a 90-day period beginning the day after
becoming a Significant Stockholder, commence a public cash tender offer as
described below to acquire additional shares of Hach Class A Common Stock (a
"Class A Protection Transaction"). If a Significant Stockholder does not
undertake the required Class A Protection transaction, he loses the right to
vote the shares of Hach Common Stock shares acquired after September 10,
1997. For example, if a stockholder owned 4% of Hach Common Stock prior to
September 10, 1997 and thereafter purchased an additional 16% of Hach Common
Stock without purchasing any additional Hach Class A Common Stock, such
stockholder will not be allowed to vote the 16% of the Hach Common Stock
acquired after September 10, 1997 unless he commences a tender offer for an
additional 16% of the Hach Class A Common Stock at the prescribed price.
Alternatively, such stockholder could sell that number of shares equal to 2%
of the outstanding Hach Common Stock, thus dropping the percentage of Hach
Common Stock acquired by him after the September 10, 1997 to 14%, leaving him
with an aggregate of 18% of the Hach Common Stock, all of which he could vote.

The 15% Hach Common Stock ownership threshold which initially
triggers a Class A Protection Transaction may not be waived by the Board of
Directors of Hach, nor may the Board of Directors of Hach amend this
threshold in the Hach Certificate without stockholder approval, including
under the Hach Certificate, a majority vote of the holders of outstanding
Hach Class A Common Stock voting separately as a class.

In connection with the application of the Class A Protection
Provision, the following shares of Hach Common Stock are excluded from any
determination of the shares of Hach Common Stock owned by

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a person or group, but not for the purpose of determining shares outstanding:
(i) shares beneficially owned at September 10, 1997; (ii) shares acquired by
will, by laws of descent and distribution, by gift, or by foreclosure of a
bona fide loan; (iii) shares acquired from Hach; (iv) shares acquired by
operation of law (including a merger or consolidation effected for the
purpose of recapitalizing or reincorporating such person but not for the
purpose of acquiring another person); (v) shares acquired in exchange for
shares of Hach Class A Common Stock if the Hach Class A Common Stock were
acquired by the exchanging party directly from Hach in any stock split or as
a dividend on Hach Common Stock; and (vi) shares acquired by or from a
qualified employee benefit plan of Hach (collectively the "Excluded Shares").

In each Class A Protection Transaction, the Significant Stockholder
must make a public tender offer to acquire at least that number of additional
shares of Hach Class A Common Stock (the "Additional Shares") determined by
(i) multiplying the percentage of the number of shares of outstanding Hach
Common Stock beneficially owned and acquired after September 10, 1997 by such
Significant Stockholder by the total number of shares of Hach Class A Common
Stock outstanding on the date such person or group became a Significant
Stockholder; and (ii) subtracting therefrom the number of shares of Hach
Class A Common Stock beneficially owned by such Significant Stockholder on
the date such person became a Significant Shareholder which were acquired
after September 10, 1997. The Significant Stockholder must acquire all Hach
Class A Common Stock validly tendered or, if the number of shares tendered
exceeds the number determined pursuant to such formula, a pro-rata number of
Hach Class A Common Stock from each tendering holder (based on the number of
shares of Hach Class A Common Stock tendered by each tendering stockholder).

The offer price for any shares of Hach Class A Common Stock
required to be purchased by the Significant Stockholder pursuant to this
provision would be the greatest of: (i) the highest price per share paid by
the Significant Stockholder for any share of Hach Class A Common Stock or
Hach Common Stock in the six-month period ending on the date such person or
group became a Significant Stockholder (or such shorter period after
September 10, 1997 if the date such person or group became a Significant
Stockholder is not more than six months following September 10, 1997); (ii)
the highest reported sale price of a share of Hach Class A Common Stock or
Hach Common Stock on The NASDAQ Stock Market (or such other securities
exchange or quotation system as is then the principal trading market for such
shares) during the thirty-day period preceding the date such person or group
became a Significant Stockholder; or (iii) the highest reported sale price
for a share of Class A Common Stock or a share of Common Stock on The NASDAQ
Stock Market (or such other securities exchange or quotation system
constituting the principal trading market for such shares) on the business
day preceding the date the Significant Stockholder commences the required
tender offer.

A Class A Protection Transaction would also be required of any
Significant Stockholder that acquires an additional amount of Hach Common
Stock equal to or greater than the next higher multiple of 5% (e.g., 20%,
25%, 30%, etc.) of the outstanding Hach Common Stock (excluding Excluded
Shares) after September 10, 1997 if such Significant Stockholder does not
then own an equal or greater percentage of all then outstanding Hach Class A
Common Stock that such Significant Stockholder acquired after September 10,
1997. Such Significant Stockholder would be required to make a public cash
tender offer to buy that number of Additional Shares determined in accordance
with the formula set forth above in the second preceding paragraph at the
offer price described in the immediately preceding paragraph, even if a
previous Class A Protection Transaction resulted in fewer shares of Hach
Class A Common Stock being tendered than the Significant Stockholder was
required to offer to purchase in the previous offer.

The requirement to engage in a Class A Protection Transaction will
be satisfied by making the requisite offer and purchasing validly tendered
shares, even if the number of shares tendered is less than the

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number of shares the Significant Stockholder was required to offer to
purchase. If any Significant Stockholder fails to make the required tender
offer, or to purchase shares validly tendered (after proration, if any), the
voting rights of all Common Stock owned by such Significant Stockholder and
acquired after September 10, 1997 will be automatically suspended until
consummation of an offer as required by the terms of the Class A Protection
feature or until divestiture of the excess Hach Common Stock that triggered
the tender offer requirement. To the extent that the voting power of any
Hach Common Stock is so suspended, such shares will not be included in the
determination of aggregate voting shares for any purpose.

Neither the Class A Protection Transaction requirement nor the
related possibility of suspension of voting rights applies to any increase in
percentage ownership of Hach Common Stock resulting solely from a change in
the total number of shares of Hach Common Stock outstanding. All
calculations with respect to percentage ownership of outstanding shares of
either class of Common Stock shall be based upon the number of outstanding
shares reflected in either the records of or a certificate from Hach's stock
transfer agent or reported in the last to be filed of Hach's Annual Report on
Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or
definitive proxy statement.

Since the definition of Significant Stockholder is based on the
beneficial ownership percentage of Hach Common Stock acquired after September
10, 1997, a person or group who was a stockholder of Hach at September 10,
1997 will not become a Significant Stockholder unless such person or group
acquires an additional 15% of the then outstanding Hach Common Stock,
regardless of the number of shares of Hach Common Stock owned prior to the
Effective Time. For purposes of the Class A Protection feature, the terms
"beneficial ownership" and "group" generally have the same meanings as used
in Regulation 13D promulgated under the Exchange Act, subject to certain
exceptions set forth therein.

The Class A Protection provision does not prevent any person or
group from acquiring a significant or controlling interest in Hach, provided
such person or group acquires a proportionate percentage of the Hach Class A
Common Stock, undertakes a Class A Protection Transaction or incurs the
suspension of the voting rights of the Hach Common Stock as provided by the
Class A Protection feature. If a Class A Protection Transaction is required,
the purchase price to be paid in such offer may be higher than the price at
which a Significant Stockholder might otherwise be able to acquire an
identical number of Hach Class A Common Stock. Such requirement could make
an acquisition of a significant or controlling interest in Hach more
expensive and, if the Class A Protection Transaction is required, more time
consuming, than if such requirement did not exist. Consequently, a person or
group might be deterred from acquiring a significant or controlling interest
in the Company as a result of such requirement. However, by restricting the
ability of an acquirer to acquire a significant interest in the Hach Common
Stock by paying a "control premium" for such shares without acquiring, or
paying a similar premium for, Hach Class A Common Stock, the Class A
Protection feature is designed to help reduce or eliminate any discount on
either of these classes of Hach Common Stocks.

ADDITIONAL VOTING RIGHTS OF HACH CLASS A COMMON STOCK

The Hach Common Stocks are not convertible into another class of
common stock or any other security of Hach. However, the holders of
outstanding Hach Class A Common Stock will become entitled to one vote per
share of Hach Class A Common Stock on all matters presented to the
stockholders of Hach: (i) at any time when the number of outstanding shares
of Hach Common Stock falls below 10% of the aggregate number of outstanding
shares of Hach Common Stocks, and (ii) upon resolution of the Hach Board of
Directors if, as a result of the existence of the Hach Class A Common Stock,
either the Hach Common Stock or Hach Class A Common Stock, or both, are
excluded from trading on The NASDAQ

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Stock Market and other comparable quotation systems, and are excluded from
trading by the New York Stock Exchange ("NYSE"), American Stock Exchange
("AMEX") and all other principal national securities exchanges then in use.
Upon any such event, the voting interests of the holders of Hach Common Stock
would be diluted. In addition, to the extent that the market price of the
Hach Common Stock is higher or lower than the market price of the Hach Class
A Common Stock immediately prior to such change, the market price of the
shares held by particular holders may be adversely affected by the change.

PREEMPTIVE RIGHTS

None of the shares of Hach Common Stocks carry any preemptive
rights enabling a holder to subscribe for or receive shares of any class of
Hach capital stock or any other securities convertible into any class of Hach
capital stock.

CERTAIN PROVISIONS OF THE HACH CERTIFICATE AND BY-LAWS; ANTI-TAKEOVER
PROVISIONS

The Hach Certificate and By-laws and the DGCL contain certain
provisions that may enhance the likelihood of continuity and stability in the
composition of the Board of Directors of Hach and may discourage a future
unsolicited takeover of Hach. These provisions could have the effect of
discouraging certain attempts to acquire Hach or remove incumbent management,
including incumbent members of the Board of Directors of Hach, even if some
or a majority of Hach stockholders deemed such an attempt to be in their best
interests.

Article Ninth of the Hach Certificate requires, subject to certain
exceptions, the affirmative vote of the holders of at least 80% of all
outstanding shares of capital stock of Hach entitled to vote on all matters
that may come before a meeting of stockholders in order to: (i) effect a
merger or consolidation of Hach or any subsidiary with or into another
corporation or (ii) authorize the sale, lease, exchange or other disposition
by Hach or any subsidiary of all or a substantial part of the assets of Hach
or any subsidiary to any corporation, person or entity or (iii) authorize
Hach or its subsidiary to issue or transfer more than 10% of Hach's
outstanding voting securities or any securities of any subsidiary to any
other corporation, person or entity in exchange for securities, cash or other
property, if, in any of the above cases, such other corporation, person or
entity, including its affiliates and associated persons, is the beneficial
owner, directly or indirectly, of 5% or more of the outstanding shares of
capital stock of Hach entitled to vote on all matters that may come before
such meeting of stockholders (an "Interested Party"). The requirement for
approval by an 80% vote is not applicable to any of the above referenced
transactions if: (i) the Board of Directors of Hach by resolution has
approved a memorandum of understanding with the other party substantially
consistent with such transaction prior to the time such party became a holder
of more than 5% of the capital stock of Hach or (ii) Hach or any subsidiary
is at the time of the consummation of such transaction the beneficial owner
of (x) a majority, by vote, of the outstanding shares of all classes of
capital stock entitled to vote in elections for directors of such other
corporation or (y) a majority by voting interest in the other entity when the
transaction is consummated. Unless holders of Hach Class A Common Stock
become entitled to the additional voting rights described above, (i) holders
of Hach Class A Common Stock will not be entitled to vote on the approval of
a proposed transaction with an Interested Party and (ii) a person's ownership
of Hach Class A Common Stock will not be counted in determining whether such
person is an "Interested Party" under Article Ninth.

The Delaware Business Combination Statute which is applicable to
Hach is described below under "Comparative Rights of Hach Stockholders and
ETS Shareholders -- Antitakeover Provisions -- Hach -- Delaware Business
Combination Statute."

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COMPARATIVE RIGHTS OF HACH STOCKHOLDERS AND ETS SHAREHOLDERS

INTRODUCTION

ETS is incorporated under the laws of the State of Indiana, and
accordingly, the rights of the shareholders of ETS are governed by Indiana
law, primarily the IBCL, and by the ETS Amended and Restated Articles of
Incorporation (the "ETS Articles") and the ETS by-laws (the "ETS By-laws").
Hach is incorporated under the laws of the State of Delaware, and
accordingly, the rights of the stockholders of Hach are governed by Delaware
law, primarily the DGCL, and by the Hach Certificate and the Hach By-laws.
Upon consummation of the Merger, ETS shareholders will become Hach
stockholders and, as such, their rights will be governed by the Hach
Certificate and Hach By-laws. The following summary of certain differences
which may affect the rights and interests of ETS shareholders is not intended
to be an all-inclusive discussion of such differences, but provides a basis
for ETS shareholders to evaluate their rights as Hach stockholders after the
Effective Time. This summary is qualified in its entirety by reference to
the DGCL, the IBCL, the Hach Certificate and By-laws and the ETS Articles and
By-laws.

AUTHORIZED STOCK

ETS. The authorized capital stock of ETS consists of (i) 300,000
shares of Class A Common Stock of which 231,304 shares were outstanding as of
March 2, 1998; and (ii) 1,000,000 shares of Class B Common Stock, of which
692,228 shares were outstanding as of March 2, 1998. All or any portion of
the authorized but unissued capital stock of any class or series may be
issued by resolution of the Board of Directors of ETS without further action
by ETS shareholders. The IBCL permits a corporation's articles of
incorporation to provide that its board of directors may determine all rights
and preferences (including voting rights) of any class of stock prior to the
issuance of such stock, without obtaining shareholder approval of such terms.
However, the ETS Articles currently contain no such provision.

The ETS Articles provide that holders of ETS Class A Common Stock
shall be entitled to receive, between August 1, 1996 and August 1, 2001,
quarterly dividends at the rate of seven percent (7%) of the fair market
value of ETS Class A Common Stock on July 31, 1996 as determined by the ETS
ESOP Benefits Committee. No dividends or other distributions shall be paid,
declared or set apart for payment on the ETS Class B Common Stock unless the
full dividend on the ETS Class A Common Stock for such period and all prior
periods shall have been paid. If the ETS Board of Directors fails to declare
and pay the full dividend on the ETS Class A Common Stock in any such period,
the rights of the holders of ETS Class A Common Stock to dividends shall
cumulate and carry over to such time when the dividends may be lawfully
declared and paid on the ETS Class A Common Stock.

Effective August 1, 2001, each share of ETS Class A Common Stock
shall be automatically converted into one (1) share of Class B Common Stock
and all unpaid dividends on the ETS Class A Common Stock shall be paid in
full.

Except as provided above, all of the authorized shares of ETS Class
A Common Stock and ETS Class B Common Stock have the same rights, powers and
privileges, are equal in all respects and participate equally in all earnings
and profits of ETS, and on distribution of ETS' assets, whether on
liquidation, dissolution or otherwise.

HACH. The Hach Certificate authorizes the issuance of 25,000,000
shares of Hach Common Stock of which 8,257,897 shares were outstanding at
March 2, 1998 and 20,000,000 shares of Hach Class A Common Stock, of which
8,243,137 shares were outstanding at March 2, 1998. Hach has reserved for

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issuance from time to time an additional 330,000 shares of Hach Common Stock
and 531,000 shares of Hach Class A Common Stock under its employee benefits
plans. All or any portion of the authorized but unissued capital stock of
any class or series may be issued by resolution of the Board of Directors of
Hach without further action by Hach stockholders. Each share of Hach Class A
Common Stock and Hach Common Stock are equal in respect to dividends and
other distributions in cash, stock or property, including distributions in
connection with any and upon liquidation, dissolution or winding up of Hach,
except that: (i) shares of Hach Class A Common Stock may receive greater
dividends or distributions than shares of Hach Common Stock, (ii) holders of
Hach Class A Common Stock may receive dividends in the form of shares of Hach
Class A Common Stock or any other authorized class or series of capital stock
(other than Hach Common Stock) and (iii) holders of Hach Common Stock may
receive dividends in the form of Hach Class A Common Stock, Hach Common Stock
or any other authorized class or series of capital stock.

The holders of Hach Class A Common Stock will become entitled to
one vote per share on all matters: (i) when the number of outstanding shares
of Hach Common Stock falls below 10% of the aggregate number of outstanding
shares of Hach Common Stock and Hach Class A Common Stock, and (ii) upon
resolution of the Board of Directors of Hach if, as a result of the existence
of Hach Class A Common Stock, Hach Common Stock or Hach Class A Common Stock,
or both, are excluded from trading on The NASDAQ Stock Market and by the
NYSE, AMEX and other principal securities exchange.

ELECTION AND REMOVAL OF DIRECTORS

ETS. The ETS Board of Directors currently consists of three
directors. Shareholders are entitled to one vote in the election of directors
for each share recorded in the name of that shareholder on the books of ETS.
Cumulative voting for the election of directors is not permitted by the ETS
Articles. The ETS Articles also provide that a director, or the entire ETS
Board of Directors, may be removed with or without cause either by the
affirmative vote of the holders of a majority of the outstanding shares
entitled to vote for the election of directors or by the affirmative vote of
a majority of the directors elected and qualified other than the director
whose removal is at issue. Any vacancy in the Board is to be filled until
the next annual meeting of shareholders by a majority vote of the directors
then in office.

HACH. Hach currently has seven directors who serve for one-year
terms. Cumulative voting is not allowed in the election of directors to the
Hach Board, and each holder of Hach Common Stock may cast one vote in the
election of directors for each share held of record by such stockholder. Any
director or the entire Board of Directors of Hach may be removed, with or
without cause, by the affirmative vote of the holders of a majority of the
outstanding shares then entitled to vote at an election of directors.
Currently only holders of Hach Common Stock are entitled to vote in such
elections. Vacancies on the Board are filled until the next annual meeting
of stockholders by a majority vote of the directors then in office.

REQUIRED VOTE FOR AUTHORIZATION OF CERTAIN ACTIONS

ETS. The IBCL generally requires the affirmative vote of the
holders of a simple majority of the outstanding shares of each class entitled
to vote separately to approve a merger, consolidation, share exchange or
sale, lease, exchange or other disposition of all or substantially all of
ETS' assets.

HACH. Under Delaware law the vote of a simple majority of the
outstanding shares of Hach Common Stocks entitled to vote thereon is required
to approve a merger or consolidation, or the sale, lease, or exchange of
substantially all of Hach's corporate assets. Article Ninth of the Hach
Certificate modifies the foregoing voting requirement in one significant
respect. The Hach Certificate provides in the case of a

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transaction with a holder of 5% or more of outstanding shares of capital
stock of Hach entitled to vote on all matters that may come before any
meeting of Hach stockholders that the affirmative vote of or consent of the
holders of 80% of the outstanding shares of capital stock of Hach so
entitled to vote, voting together without regard to class, shall be required
with respect to certain business combinations and share issuances. This
provision of the Hach Articles is described above under "Description of the
Hach Common Stocks - certain provisions of the Hach Certificate and By-laws;
Delaware Antitakeover Provisions."

AMENDMENT OF CORPORATE CHARTER

ETS. Under Indiana law, any amendment to the ETS Articles requires
the affirmative vote of a simple majority of the holders of the outstanding
shares of ETS Class A Common Stock and ETS Class B Common Stock voting
together except for (i) certain amendments which may be made by the Board of
Directors as provided by the IBCL or (ii) amendments which have the effect of
altering the rights of a class of ETS Common Stock, in which case the holders
of a majority of such class must also approve the amendment.

HACH. Under Delaware law, the vote of a simple majority of the
holders of the outstanding shares of capital stock entitled to vote thereon
and a majority of the outstanding stock of each class entitled to vote
thereon as a class is required to effect an amendment of the Hach
Certificate. The Hach Certificate alters this provision in certain respects.
Any amendment to the provisions of Article Ninth of the Hach Certificate
relating to super majority voting requires the affirmative vote of at least
80% of all outstanding shares of capital stock entitled to vote, voting
together without regard to class. Under the DGCL the holders of Hach Class A
Common Stock will be entitled to vote on proposals to change the par value of
the shares, or alter or change the provisions, preferences, or special rights
of the Hach Class A Common Stock, including the Class A Protection Provision,
which may effect them adversely.

DISSENTERS' RIGHTS

ETS. See the description of dissenters' rights provided to ETS
shareholders by the IBCL above under "The Merger-Dissenters' Rights".

HACH. Under Delaware law, a stockholder of Hach is generally
entitled to receive payment of the appraised value of his capital stock if
such stockholder dissents from a merger or consolidation. However, appraisal
rights are not available in merger or consolidation transactions to holders
of: (a) shares listed on a national stock exchange or designated as a
national market system security on an interdealer quotation system by the
National Association of Securities Dealers, Inc. or held of record by more
than 2,000 persons, or (b) shares of the corporation surviving a merger
unless, in either case, holders of such stock are required by the terms of
the merger or consolidation to accept anything other than: (i) shares of the
surviving or resulting corporation; (ii) shares of stock of another
corporation so listed or held of record by not fewer than 2,000 persons; and
(iii) cash in lieu of fractional shares of such corporations. Appraisal
rights are not available for a sale of assets or an amendment to the
certificate. Because shares of Hach Common Stock and Hach Class A Common
Stock are listed on The NASDAQ Stock Market, Hach's stockholders are not,
subject to such express exceptions, currently entitled to any rights of
appraisal in connection with proposed mergers or consolidations involving
Hach.

SPECIAL MEETINGS

ETS. Under Indiana law and ETS' By-laws, a special meeting of the ETS
shareholders may be called by the ETS Board of Directors or its President and
shall be called by the President or Secretary of

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ETS upon the written demand of a majority of the ETS Board of Directors or of
the holders of not less than 25% of all of the outstanding shares of ETS
entitled to vote at the meeting.

HACH. Under Delaware law and the Hach By-laws, a special meeting
of stockholders may be called only by the Chairman of the Board of Hach or by
the Hach Board of Directors pursuant to a resolution adopted by a majority of
the total number of the Board of Directors which Hach would have if there
were no vacancies.

LIMITATION OF DIRECTOR LIABILITY IN CERTAIN CIRCUMSTANCES

ETS. Section 23-1-35-1 of the IBCL provides that a director of ETS
shall not be a liable for any action taken or not taken as a director except
for liability arising out of any breach or failure to perform the duties of
the director's office in good faith, with the care an ordinarily prudent
person in a like position would exercise under similar circumstances and in a
manner reasonably believed to be in the best interests of the corporation,
which breach or failure constitutes willful misconduct or recklessness.

HACH. Under Delaware law, absent a provision in the Hach
Certificate to the contrary, directors can be held liable for gross
negligence in connection with decisions made on behalf of the corporation in
the performance of their duty of care, but will not be liable for simple
negligence. As permitted by the DGCL, the Hach Certificate provides that a
director (including an officer who is also a director) of Hach shall not be
liable personally to Hach or its stockholders for monetary damages for breach
of fiduciary duty as a director, except for liability arising out of (a) any
breach of the director's duty of loyalty to Hach or its stockholders, (b)
acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (c) payment of a dividend or approval of a
stock repurchase in violation of Section 174 of the DGCL or (d) any
transaction from which the director derived an improper personal benefit.
This provision protects Hach directors against personal liability for
monetary damages from breaches of their duty of care. However, it does not
eliminate the director's duty of care. For example, this provision in the
Hach Certificate has no effect on the availability of equitable remedies,
such as an injunction or rescission, based upon a director's breach of his
duty of care.

INDEMNIFICATION AND INSURANCE

ETS. Under Section 23-1-37-1 ET. SEQ. of the IBCL and as mandated
by Article V, Section 3 of the ETS Articles, directors or officers,
employees, and agents of ETS shall be indemnified against expenses,
judgments, fines and actions, suits or proceedings, whether civil, criminal,
administrative or investigative if (i) they are wholly successful with
respect thereto; (ii) or if they acted in good faith and in a manner they
reasonably believed to be in, or not opposed to, the best interests of ETS,
and, regarding any criminal action or proceeding, had no reasonable cause to
believe their conduct was unlawful or had reasonable cause to believe their
conduct was lawful; and (iii) any action or failure to act by the director or
officer did not constitute willful misconduct or recklessness.

Article V, Section 3(d) of the ETS Articles provides that ETS will
not indemnify a director or officer (i) in a suit for an accounting of
profits made from the purchase and sale of securities pursuant to the
provisions of Section 16(b) of the Exchange Act or any similar federal, state
or local statutory law; (ii) when payment is made under a valid and
collectible insurance policy, subject to certain exemptions; and (iii) in a
suit arising out of or based on actions attributable to the director or
officer in which that person gained a personal profit or advantage they are
not legally entitled to.

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A claim, action, suit or proceeding includes any claim, action,
suit or proceeding that a person is threatened to be made a party to or is
involved in, because he is or was a director, officer or employee of ETS (or
was serving at the request of ETS as a director, trustee, officer, employee
or agent or another entity) while serving in such capacity.

Article V, Section 3(c) of the ETS Articles also provides that ETS
shall pay expenses incurred in defending the proceedings specified above in
advance of their final disposition. ETS may advance expenses to any director
or officer only upon receipt of an undertaking by the indemnified party to
repay all amounts, or appropriate portion thereof, so advanced if it is
ultimately determined that the person receiving such payments is not entitled
to be indemnified, or was not entitled to be fully indemnified.

Article V, Section 3(h) of the ETS Articles provides that ETS may
maintain insurance, at its expense, to protect itself and any of its
directors, officers, employees or agents against any expense, liability or
loss, regardless or whether ETS has the power or obligation to indemnify that
person against such expense, liability or loss under the ETS Articles.

The right to indemnification is not exclusive of any other right
which any person may have or acquire by contract, or as a matter of law.
Additionally, the obligations of ETS to indemnify a director or officer will
survive the term of such person and any amendment to the ETS Articles.

HACH. The DGCL provides that directors, officers and other
employees and individuals may be indemnified against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement in
connection with specified actions, suits or proceedings, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation -- a "derivative action") if they acted in good
faith and in a manner they reasonably believed to be in, or not opposed to,
the best interests of the corporation, and, regarding any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful. A
similar standard is applicable in the case of derivative actions, except that
indemnification only extends to expenses (including attorneys' fees) actually
and reasonably incurred in connection with the defense or settlement of such
actions. The DGCL requires court approval before there can be any
indemnification where the person seeking indemnification has been found
liable to the corporation. To the extent that a person otherwise eligible to
be indemnified is successful on the merits of any claim or defense described
above, indemnification for expenses (including attorneys' fees) actually and
reasonably incurred is mandated by the DGCL.

The Hach Certificate provides that Hach shall, to the fullest
extent authorized by the DGCL, indemnify all persons it may indemnify. The
Hach By-laws provide that indemnification in connection with a proceeding
brought by such person will be permitted only if the proceeding was
authorized by Hach's Board of Directors. The Hach By-laws also provide that
Hach must pay expenses incurred in defending the proceedings specified above
in advance of their final disposition provided that if so required by the
DGCL, such advance payments for expenses incurred by a director or officer
may be made only if he undertakes to repay all amounts so advanced if it is
ultimately determined that the person receiving such payments is not entitled
to be indemnified.

Pursuant to the Hach By-laws, Hach may maintain insurance, at its
expense, to protect itself and any directors, officers, employees or agents
of Hach or another entity against any expense, liability or loss, regardless
of whether Hach has the power or obligation to indemnify that person against
such expense, liability or loss under the DGCL.

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The right to indemnification is not exclusive of any other right
which any person may have or acquire under any statute, provision of the Hach
Certificate or By-laws, agreement, vote of stockholders or disinterested
directors or otherwise.

ANTITAKEOVER PROVISIONS

ETS

INDIANA CONTROL SHARE ACQUISITIONS STATUTE. Chapter 42 of the
IBCL, the Indiana Control Share Acquisitions Statute, restricts the voting
rights of certain shares ("control shares") that, except for Chapter 42 would
have voting power, of an issuing public corporation that, when added to all
other shares of such corporation owned by a person, would entitle that
person, immediately after the acquisition of such shares, to exercise or
direct the exercise of the voting power of such corporation in the election
of directors within any of the following ranges of voting power: (a)
one-fifth or more but less than one-third of all voting power; (b) one-third
or more but less than a majority of all voting power; and (c) a majority or
more of all voting power (a "control share acquisition"). The voting rights
of such control shares are restricted to those rights granted by a resolution
approved by the holders of a majority of the outstanding voting shares,
excluding the voting shares owned by the acquiring shareholder and certain
other "interested shares", including shares owned by officers of the issuing
corporation and employees of the issuing corporation that are also directors
of the issuing corporation.

Chapter 42 does not apply to the acquisition of shares of an
issuing public corporation if the acquisition is consummated (a) before
January 8, 1986; (b) pursuant to a contract existing before January 8, 1986;
(c) pursuant to the laws of descent and distribution; (d) pursuant to a
satisfaction of a pledge or other security interest created in good faith and
not for the purposes of circumventing the statute; or (e) pursuant to a
merger or plan of share exchange effected in compliance with IBCL Section
23-1-40 if the issuing public corporation is a party to the agreement of
merger or plan of share exchange. Because ETS is not an "issuing public
corporation" as defined in the Indiana Control Share Acquisitions Statute,
Chapter 42 of the IBCL is not applicable to ETS or the Merger.

INDIANA BUSINESS COMBINATION STATUTE. Chapter 43 of the IBCL, the
Indiana Business Combination Statute, is similar, but not identical, to
Section 203 of the DGCL. Chapter 43 prohibits Indiana corporations from
engaging in certain transactions (including mergers, consolidations, asset
sales, liquidations or dissolutions, reclassifications, recapitalizations,
disproportionate share conversions, loans, advances, other financial
assistance, or tax benefits not received proportionately by all shareholders)
(each, a "business combination") with a person that is the beneficial owner,
directly or indirectly, of 10% or more of the voting power of the outstanding
voting shares of the Indiana corporation (an "interested shareholder") for a
period of five years after such person becomes an interested shareholder
unless, prior to the date the interested shareholder becomes an interested
shareholder, the board of directors of the Indiana corporation approves
either the transaction in which such person becomes an interested shareholder
or such business combination. Following the five-year moratorium period, the
Indiana corporation may engage in certain business combinations with an
interested shareholder only if, among other things, (a) the business
combination is approved by the affirmative vote of the holders of a majority
of the outstanding voting shares not beneficially owned by the interested
shareholder proposing the business combination or (b) the business
combination meets certain criteria designed to ensure that the remaining
shareholders receive fair consideration for their shares. The Indiana
Business Combination Statute does not apply to the Merger because Hach and
HAC own no shares of ETS capital stock.

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OTHER PROVISIONS. The IBCL also specifically authorizes directors,
in considering the best interests of an Indiana corporation, to consider the
effects of an action on shareholders, employees, suppliers, and customers of
the corporation, and communities in which offices or other facilities of the
corporation are located, and any other factors the directors consider
pertinent. Under the IBCL, directors are not required to approve a proposed
business combination or other corporate action if the directors determine in
good faith that such approval is not in the best interest of the corporation.
In addition, the IBCL states that directors are not required to redeem any
rights under, or render inapplicable, a shareholder rights plan or to take or
decline to take any other action solely because of the effect such action
might have on a proposed change of control of the corporation or the amounts
to be paid to shareholders upon such change of control. The IBCL explicitly
provides that the different or higher degrees of scrutiny imposed in Delaware
and certain other jurisdictions upon director actions taken in response to
potential changes in control will not apply. The Delaware Supreme Court has
held that defensive measures in response to a potential takeover must be
"reasonable in relation to the threat posed."

In taking or declining to take any action or in making any
recommendation to a corporation's shareholder with respect to any matter,
directors are authorized under the IBCL to consider both the short-term and
long-term interests of the corporation as well as interests of other
constituencies and other relevant factors. Any determination made with
respect to the foregoing by a majority of the disinterested directors shall
conclusively be presumed to be valid unless it can be demonstrated that such
determination was not made in good faith after reasonable investigation.

Because of the foregoing provisions of the IBCL, the Board of
Directors of a Indiana corporation will have flexibility in responding to
unsolicited acquisition proposals, and accordingly it may be more difficult
for an acquirer to gain control of the corporation in a transaction not
approved by the Board.

HACH

DELAWARE BUSINESS COMBINATION STATUTE. Section 203 of the DGCL
("Section 203"), which applies to Hach, regulates transactions with major
stockholders after they become major stockholders. Section 203 prohibits a
Delaware corporation from engaging in any merger, dispositions of 10% or more
of its assets, issuances of stock and other transactions ("business
combinations") with a person or group that owns 15% or more of the voting
stock of the corporation (an "interested stockholder"), for a period of three
years after the interested stockholder crosses the 15% threshold. These
restrictions on transactions involving an interested stockholder do not apply
if (a) before the interested stockholder owned 15% or more of the voting
stock, the board of directors approved the business combination or the
transaction that resulted in the person or group becoming an interested
stockholder; (b) in the transaction that resulted in the person or group
becoming an interested stockholder, the person or group acquired at least 85%
of the voting stock other than stock owned by inside directors and certain
employee stock plans; (c) after the person or group became an interested
stockholder, the board of directors and at least two-thirds of the voting
stock other than stock owned by the interested stockholder approves the
business combination; or (d) certain competitive bidding circumstances.

CLASS A PROTECTION PROVISION. The Hach Certificate contains a
Class A Protection Provision as described above under "Description of the
Hach Common Stocks - Class A Protection."

SUPERMAJORITY VOTE ON CERTAIN ACTIONS. The Hach Certificate
contains certain provisions which might be characterized as having the effect
of discouraging certain attempts to acquire Hach as described above under
"Description of the Hach Common Stocks - Certain Provisions of the Hach
Certificate and By-laws; Antitakeover Provisions.

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ACTION WITHOUT A MEETING

ETS. Under Section 23-1-29-4 of the IBCL, any action required or
permitted to be taken at a shareholders' meeting may be taken without a
meeting by written consent signed by all of the shareholders entitled to vote
on such action.

HACH. Section 228 of the DGCL permits any action required or
permitted to be taken at a stockholder's meeting to be taken by written
consent signed by the holders of the number of shares that would have been
required to effect the action at an actual meeting of the stockholders.
Generally, holders of a majority of outstanding shares can effect such an
action. The DGCL also provides that a corporation's certificate of
incorporation may restrict or even prohibit stockholders' action without a
meeting. The Hach Certificate does not restrict or prohibit stockholders'
action without a meeting.

BY-LAWS

ETS. Article VIII of the ETS By-laws provides that the power to
amend the ETS By-laws is vested solely in the Board of Directors. This
corresponds with IBCL Section 23-1-39-1 which provides that the board of
directors have the exclusive power to amend by-laws unless the articles of
incorporation provide otherwise.

HACH. Section 109 of the DGCL places the power to adopt, amend or
repeal by-laws in the corporation's stockholders, but permits the
corporation, in its certificate of incorporation, also to vest such power
with the board of directors. The Hach Certificate contains such a provision.
Although the Board of Directors of Hach has been vested with such authority,
Hach's stockholders' power to adopt, amend or repeal by-laws remains
unrestricted.

PREEMPTIVE RIGHTS

ETS. IBCL Section 23-1-27-1 provides that the shareholders of a
corporation do not have a preemptive right to acquire a corporation's
unissued shares except to the extent the articles of incorporation so
provide. The ETS Articles of do not provide for any such preemptive rights.

HACH. Under Section 102 of the DGCL, stockholders have no
statutory preemptive rights unless a corporation's certificate of
incorporation specifies otherwise. The Hach Certificate does not provide for
any such preemptive rights.

DIVIDENDS

ETS. The IBCL does not permit dividend distributions if, after
giving effect to the proposed dividend, (a) the corporation would be unable
to pay its debts as they become due in the ordinary course of business, or
(b) the corporation's total assets would be less than the sum of its total
liabilities plus (unless the articles of incorporation permit otherwise) the
amount that would be needed, if the corporation were to be dissolved at the
time of distribution, to satisfy the preferential rights (if any) of
shareholders whose preferential rights are superior to those shareholders
receiving the distribution.

HACH. Delaware corporations may pay dividends out of surplus or,
if there is no surplus, out of net profits for the fiscal year in which
declared and for the preceding fiscal year. Section 170 of the DGCL also
provides that dividends may not be paid out of net profits if, after the
payment of the dividend, capital is less than the capital represented by the
outstanding stock of all classes having a preference upon the distribution of
assets.

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ADDITIONAL INFORMATION CONCERNING HACH

RECENT DEVELOPMENTS

SHARE REPURCHASE PROGRAM. On October 23, 1997, Hach announced that it
intended to repurchase shares of Hach Class A Common Stock , as well as Hach
Common Stock, as part of the stock repurchase program previously authorized
by the Hach Board of Directors. Since October 23, 1997, Hach has repurchased
19,000 shares of Hach Class A Common Stock (at an aggregate price of
$175,000) and 6,132 shares of Hach Common Stock (at an aggregate price of
$77,570). As of March 2, 1998, Hach has the remaining authority to purchase
up to approximately $240,000 of Hach Common Stocks in connection with that
program. The shares may be purchased from time to time in the open market or
in private transactions at prevailing market prices. In accordance with
federal securities laws, Hach will make no purchases of Hach Common Stocks
during the period that the Average Market Price of the Hach Common Stocks is
being determined for purposes of the Merger.

REPURCHASE OF LAWTER SHARES. On July 8, 1997, Hach completed the
purchase of 3,157,223 shares of its then single class of common stock held by
Lawter International, Inc., representing at that time approximately 27.38% of
the issued and outstanding shares of common stock of Hach, for a purchase
price of $19.00 per share pursuant to a Purchase and Standstill Agreement and
Mutual Release dated as of June 26, 1997 (the "Purchase Agreement"). The
Company used approximately $30 million of cash on hand, together with bank
borrowings, to fund the $59,987,237 aggregate purchase price required by the
Purchase Agreement.

REVOLVING CREDIT AGREEMENT. In connection with the funding of the
purchase of its shares from Lawter, Hach entered into an unsecured
$40 million revolving credit agreement with the Colorado National Bank dated
as of July 7, 1997. Some or all of the cash proceeds required to be provided
to the holders of ETS Class B Common Stock pursuant to the Merger Agreement
may be borrowed by Hach under that revolving credit agreement.

AUTHORIZATION AND ISSUANCE OF HACH CLASS A COMMON STOCK. On September 10,
1997, following approval by the Hach stockholders, Hach amended Article
Fourth of the Company's Restated Certificate of Incorporation to:
(i) authorize Hach Class A Common Stock, (ii) increase the number of authorized
shares of capital stock of Hach from 25,000,000 to 45,000,000, consisting of
25,000,000 shares of Hach Common Stock and 20,000,000 shares of Hach Class A
Common Stock; and (iii) establish the rights, powers and limitations of Hach
Class A Common Stock. On October 2, 1997, Hach distributed as a dividend one
share of Hach Class A Common Stock for each share of Hach Common Stock
outstanding on September 22, 1997. A total of 8,226,581 shares of Hach Class A
Common Stock were distributed on that date.

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DIRECTORS AND OFFICERS

[Download Table]

NAME AGE POSITION WITH HACH
---- --- ------------------

Kathryn Hach-Darrow 75 Chairman of the Board, Chief Executive
Officer, and Director

Bruce J. Hach 51 President and Chief Operating Officer
and Director

Gary R. Dreher 45 Vice President, Treasurer and Chief
Financial Officer and Director

Joseph V. Schwan 60 Director

Fred W. Wenninger 58 Director

John N. McConnell 58 Director

Linda O. Doty 47 Director

Loel J. Sirovy 58 Senior Vice President, Operations

Robert O. Case 76 Secretary and General Counsel

Jerry M. Churchill 58 Vice President, Domestic Sales

Larry D. Thompson 53 Vice President, Ames Chemical Operations

Kenneth Ogan 53 Vice President, Research and Development
and Chief Technical Officer

Brian K. Bowden 32 Vice President, Information Services and
Technology

Kathryn Hach-Darrow has been active in the business of Hach since its
inception. She has served on the Board of Directors and was responsible,
prior to May 6, 1977, as Executive Vice President for certain of Hach's
administrative and marketing matters. On May 5, 1977, the Board of Directors
elected Mrs. Hach-Darrow President and Chief Operating Officer. On April 28,
1983, she was elected Vice Chairman of the Board of Directors and on
February 28, 1986, she was elected Chairman of the Board, Chief Executive
Officer and Chairman of the Executive Committee and Director, and has served
in these capacities since that date.

Bruce J. Hach, son of Kathryn Hach-Darrow, joined Hach November 1, 1970
and has served the Company in various capacities. From August 27, 1985 to
February 28, 1986, he was an Assistant Vice President in charge of Human
Relations. He was elected Senior Vice President as of February 28, 1986. On
April 30, 1987, he was elected a Director and on August 27, 1987 he was
elected Executive Vice President. In August 1988, he was elected President
and Chief Operating Officer and has served in these capacities since that
date.

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Gary R. Dreher joined Hach on January 17, 1977. He has held a variety
of positions since then. In September 1985, he was named Controller. In
August 1990, he was elected Vice President and Treasurer. He was named Vice
President and Chief Financial Officer on November 22, 1994 and has served in
that capacity since that date. He was elected a Director at the Hach Annual
Meeting of Stockholders on August 30, 1994.

Joseph V. Schwan has served as a Director of Hach since 1987. He is
Chief Operating Officer and Executive Vice President of Standard Register
Company, which he joined in August, 1991. Standard Register Company is a
publicly held manufacturer and distributor of business forms.

Fred W. Wenninger has served as a Director of Hach since 1990.
Mr. Wenninger is an independent businessman. From September, 1995 to June,
1997, he was the President and CEO of Key Tronic Corporation, a publicly held
manufacturer of computer keyboards. From May, 1989 through December 1993 he
was President, CEO and a director of Iomegea Corporation, a publicly held
manufacturer of removable mass storage products for computers.

John N. McConnell has been a director of Hach since 1990. Mr. McConnell
is currently Chairman and President of Labconco Corporation, a laboratory
equipment manufacturer, where he has served as President since 1981.

Linda O. Doty has been a director of Hach since 1991. She is a
Certified Public Accountant and partner in Doty & Associates, Certified
Public Accountants, which she formed in January, 1990.

Loel J. Sirovy joined Hach on October 19, 1972. He has held a number of
management positions in Production and Human Relations. On September 1,
1985, he was elected Vice President of Instrument Operations. On April 28,
1989, he was elected Senior Vice President of Manufacturing. On August 25,
1992, he was elected Senior Vice President of Operations.

Robert O. Case has been Secretary of Hach since May 29, 1968. He was
named General Counsel to Hach on August 29, 1989. From September 1989 to
February 1991, he was a shareholder of the Chicago, Illinois law firm of
Schuyler, Roche & Zwirner and a member of its management committee. From
February 1, 1991 to April 30, 1993, he was of counsel to Schuyler, Roche &
Zwirner. Since May 1, 1993, Mr. Case has been of counsel to McBride Baker &
Coles in Chicago. Mr. Case was a director of Hach from May 29, 1968, until
his retirement as a Director effective at the August 30, 1994 Annual Meeting
of Stockholders.

Jerry M. Churchill joined Hach on December 1, 1977, as Marketing Manager
of Carle Instruments, Inc., which was a wholly-owned subsidiary of Hach
engaged in the manufacturing and sale of gas chromatographs. On April 2,
1981, he was elected Vice President of Carle Instruments, Inc. After Carle
Instruments, Inc. was merged into Hach, Mr. Churchill was made Assistant Vice
President of Chromatography Operations on September 18, 1983. On February 28,
1986, he was elected Vice President of Domestic Sales and Marketing. On
February 27, 1990, he was elected Senior Vice President of Marketing and
Sales. On August 25, 1992, he was elected Senior Vice President of Domestic
Sales. On August 24, 1993, he was named Senior Vice President of Sales. On
August 29, 1995 he was named Vice President of Domestic Sales, and has served
in that capacity since that date. Mr. Churchill was a Director of Hach from
August 28, 1990, until his retirement as a Director effective at the August 29,
1995 Annual Meeting of Stockholders.

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Larry D. Thompson joined Hach on April 6, 1964. He has held a variety
of positions in Chemical Operations. In April 1991, he was named Plant
Manager of the Ames, Iowa facility. On August 25, 1992, he was elected Vice
President of Ames Operations and has served in that capacity since that date.

Kenneth Ogan joined Hach in February 1996 as Vice President of Research
and Development and Chief Technical Officer and has served in that capacity
since that date. He most recently served as Principal Scientist, Sales and
Marketing Division and, prior to that, as Senior Manager, Advanced Technology
Group for Hitachi Instruments, Inc., where he was employed from 1989 through
January 1996. Prior to joining Hitachi Instruments, Inc., he was a Group
Manager in Instrumentation and Research and Development for Perkin-Elmer, Inc.

Brian K. Bowden joined Hach on January 4, 1988. He has held a number of
management positions in Research and Development, Production, Marketing and
Information Services. On January 7, 1997, he was elected Vice President of
Information Services. On November 25, 1997 he was elected Vice President of
Information Services and Technology and has served in that capacity since
that date.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of March 2, 1998
as to the beneficial ownership of outstanding shares by each person known by
Hach to own beneficially more than 5% of the outstanding shares of each class
of the Hach Common Stocks, by each director and named executive officer of
Hach, and by all directors and executive officers of Hach as a group.

[Enlarge/Download Table]

NAME HACH COMMON STOCK HACH CLASS A COMMON STOCK
---- ----------------- -------------------------
Number of Percent Number of Percent
Shares Shares

Kathryn C. Hach-Darrow................ 4,573,891(1)(2) 54.46 4,573,891(1)(2) 54.56%

Hach Company Employee Stock 702,762(3) 8.37 702,762(3) 8.38
Ownership Plan and Trust..............

Bruce J. Hach......................... 166,148(2)(4)(5) 1.98 166,148(2)(4)(5) 1.98

Gary R. Dreher........................ 40,925(2)(4)(6) * 40,925(2)(4)(6) *

Joseph V. Schwan...................... 28,326(2)(4) * 28,326(2)(4) *

Fred W. Wenninger..................... 11,089(2)(4) * 11,089(2)(4) *

John N. McConnell..................... 18,545(2)(4) * 19,246(2)(4) *

Linda O. Doty......................... 19,432(2)(4) * 19,423(2)(4) *

All current executive officers and 5,037,467(2)(4)(7) 59.98 5,039,275(2)(4)(7) 60.11
directors as a group..................

____________________
less than 1%

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(1) The shares listed in the table above opposite Kathryn Hach-Darrow's name
include 927,291 shares held in Mrs. Hach-Darrow's name. The shares listed
above also include 2,014,400 shares which are held in three trusts created
by the late Clifford C. Hach and which Mrs. Hach-Darrow has the power as
trustee to vote and dispose of, namely, the Kathryn C. Hach Marital Trust,
the Clifford C. Hach Generation Skipping Trust, and the Clifford C. Hach
Family Trust, all three of which Trusts were created under an agreement
dated August 30, 1988, by Clifford C. Hach. Mrs. Hach-Darrow has the power
to vote and dispose of the shares held in the Marital, Generation Skipping
and Family Trusts. In addition, the shares listed above opposite Mrs.
Hach-Darrow's name include 1,511,415 shares owned by C&K Enterprises, Ltd.,
as to which Mrs. Hach-Darrow and the Kathryn C. Hach Marital Trust have
voting and investment powers, 120,782 shares owned by the Hach Scientific
Foundation, a charitable foundation, and 3 shares allocated to
Mrs. Hach-Darrow's account under the Employee Stock Ownership Plan
(the "Hach ESOP"). Mrs. Hach-Darrow is President and a co-trustee of
the Foundation and shares voting and investment powers with respect
to the shares held by the Foundation. The business address of
Mrs. Hach-Darrow is 5600 Lindbergh Drive, Loveland, Colorado 80537.

(2) Excludes 147,979 shares owned by the Hach Company 401(k) Plan. Hach through
its board of directors has the power to vote such shares. In addition, the
co-trustees of the 401(k) Plan share investment power with respect to those
shares. Also excludes shares owned by the Hach ESOP, as to which Hach
through its Board of Directors, and the Hach ESOP's co-trustees, have
investment power. The co-trustees of each of the 401(k) Plan and the Hach
ESOP are Randall A. Petersen, Gary R. Dreher and Loel J. Sirovy. The Hach
ESOP as of March 2, 1998 held a total of 702,762 shares, all of which were
allocated to the accounts of plan participants. Shares accrued to the
individual accounts of Bruce J. Hach and Gary R. Dreher are reflected in
the table above and the amounts of the shares being held in said individual
accounts are given in footnotes 5 and 6 to the above table. See footnote 3
to the above table with reference to the power to vote ESOP shares.

(3) These shares are allocated to the accounts of the individual employees of
Hach Company who are participants in the Hach ESOP, and who have the power
to vote the shares. The Trustees and Hach have investment power over the
stock held in the Plan. The business address of the ESOP is 5600 Lindbergh
Drive, Loveland, Colorado 80537.

(4) The shares reported in the above table include shares of Hach Common Stocks
which can be acquired within 60 days of March 2, 1998 through the exercise
of options: Mr. Hach - 10,666 Common, 10,666 Class A; Mr. Dreher - 20,666
Common, 20,666 Class A; Mr. Schwan - 11,089 Common, 11,089 Class A; Ms.
Doty - 11,089 Common, 11,089 Class A; Mr. McConnell - 11,089 Common, 11,089
Class A; and Mr. Wenninger - 11,089 Common, 11,089 Class A; and Directors
and executive officers as a group - 140,270 Common, 140,270 Class A. Each
individual's option shares are also included in the number of shares of
Hach issued and outstanding for purposes of calculating the percentage
ownership of each individual in accordance with the rules and regulations
of the Securities Exchange Act of 1934, as amended. These persons also
have options not exercisable within 60 days of March 2, 1998 by which they
can acquire the following additional shares of Hach Common Stocks: Mr.
Hach - 9,334 Common, 27,334 Class A; Mr. Dreher - 9,334 Common, 27,334
Class A; and Directors and executive officers as a group - 57,337 Common,
164,337 Class A. These shares are not included in the above table or in
the percentage ownership calculations.

(5) Excludes 64,644 shares held by Robert O. Case and Bruce J. Hach as
co-trustees of eight irrevocable trusts for the benefit of the
grandchildren of Kathryn Hach-Darrow. Robert O. Case and Bruce J. Hach
have shared investment and voting powers with respect to those shares.
Three of the beneficiaries of the trusts are the children of Bruce J. Hach.
Also excludes 206,400 shares held in separate shares in an irrevocable
trust for the benefit of the grandchildren of Kathryn Hach-Darrow by Bank
One - Loveland under an agreement dated June 30, 1975, between Kathryn
Hach-Darrow and the late Clifford C. Hach as settlors, and The Northern
Trust Company, as initial trustee. The Trust is being held for the benefit
of the grandchildren of Kathryn Hach-Darrow and the late Clifford C. Hach,
three of whom are the children of Bruce J. Hach. Also excludes 87,047
shares held by a partnership composed of the children of
Kathryn Hach-Darrow and their spouses.

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Includes 5,612 shares held by the ESOP which are accrued to the
account of Bruce J. Hach and which he has the right to direct the
Plan trustee to vote.

(6) Includes 3,926 shares held by the Hach ESOP which are accrued to the
account of Mr. Dreher and which he has the right to direct the Plan trustee
to vote. Excludes an additional 698,836 shares owned by the Hach ESOP, for
which Mr. Dreher as a co-trustee of the ESOP shares investment power.

(7) Includes the shares listed in the table above opposite Kathryn
Hach-Darrow's name. Excludes (i) 144,300 shares held by Hach's 401(k) Plan
for the individual accounts of employees, other than executive officers and
directors of Hach, (ii) 678,700 shares held by the Hach ESOP, which are
allocated to the individual accounts of employees other than executive
officers or directors of Hach, (iii) 271,044 shares referred to in footnote
5 to the table above, and (iv) 87,047 shares held by a partnership composed
of the children of Kathryn Hach-Darrow and the late Clifford C. Hach and
their spouses, as to which Bruce J. Hach, the President and a Director of
Hach, is a partner. If all the shares referred to in the preceding
sentence were included, the shares beneficially owned by officers and
directors as a group would be 6,220,366 Common and 6,221,866 Class A, and
the percent of each class would be 74.05%, and 74.20%, respectively.

CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS

See "Executive Employment Agreements" below for a description of certain
transactions and business relationships involving management of Hach.

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SUMMARY COMPENSATION TABLE

The following table provides summary information concerning compensation
paid by Hach to its Chief Executive Officer and each of the four other most
highly compensated executive officers of Hach (hereafter referred to as the
"Hach named executive officers") for the fiscal years ended April 30, 1997,
1996 and 1995.

SUMMARY COMPENSATION TABLE

[Enlarge/Download Table]

Long Term Compensation
Awards
Annual --------------------------
Compensation Securities
-------------- Other Annual Underlying All Other
Name and Principal Position Year Salary Bonus Compensation(1) Options Compensation(5)
--------------------------- ---- ------ ----- --------------- --------- ----------------

Kathryn Hach-Darrow 1997 $126,278 $ 0 $ 0 0 $21,324
Chairman of the Board and 1996 126,089 0 0 0 20,237
Chief Executive Officer 1995 126,004 0 0 0 18,049

Bruce J. Hach 1997 $176,181 0 0 8,000 24,176
President and Chief 1996 173,449 0 0 12,000 20,004
Operating Officer 1995 160,280 0 0 0 17,513

Kenneth Ogan 1997 150,666 0 17,449(4) 8,000 23,968
Vice President and 1996 31,154 0 0 12,000 0
Chief Technical Officer (3) 1995 --- 0 0 0 0

Loel J. Sirovy 1997 134,412 15,750 0 8,000 27,824
Senior Vice President, 1996 127,848 0 0 12,000 21,512
Operations and Outbound 1995 122,285 0 0 0 18,312
Marketing

Gary R. Dreher 1997 128,585 14,375 0 8,000 25,286
Vice President and 1996 119,877 0 0 12,000 18,397
Chief Financial Officer 1995 109,774 0 0 0 15,366

------------------------

(1) The aggregate amount of perquisites and other personal benefits did
not exceed the lesser of $50,000 or ten percent of the total annual
salary and bonuses reported for any of the named executive officers,
and is therefore not included.

(2) No named executive officer had any restricted stock holdings as of
April 30, 1997. Hach has not granted any stock appreciation rights to
any named executive officer. Kathryn Hach-Darrow does not participate
in Hach's stock option plans.

(3) Mr. Ogan became an executive officer of Hach in February 1996.

(4) Reimbursement for certain relocation expenses consistent with Hach's
practice for similarly situated employees.

S-4 83rd Page of 215 TOC 1st Previous Next ↓Bottom Just 83rd
(5) The amounts reported as "All Other Compensation" include the following
payments or accruals under Hach's benefit and incentive plans:

(i) Company contributions during fiscal 1997 under Hach's Profit
Sharing Plan (including Company contributions made pursuant to Section
401(k) of the Internal Revenue Code) as follows: K. Hach-Darrow
$12,146 B. Hach $10,867, K. Ogan $10,867, L. Sirovy $13,867 and G.
Dreher $13,022. Under the Plan, all domestic full time employees of
Hach with six months of service are eligible to participate. Hach's
annual contribution (after allocation of the matching contribution
described below) is determined by the Board of Directors and is
proportionately allocated to participants' accounts based on their
annual compensation not in excess of $150,000. Participants' accounts
attributable to Hach's contribution vest at the rate of 10% for each
of the first four years of service and 20% for each of the next three
years of service. The Profit Sharing Plan includes a voluntary salary
reduction provision as authorized by Section 401(k) of the Internal
Revenue Code. All employee contributions and any contributions by
Hach that the Board of Directors determines are pursuant to Section
401(k), vest immediately. The Plan provides for a matching
contribution in the form of company stock for all contributions by
employees with one or more years of service in an amount of 50% of the
employee's yearly contribution up to a maximum of 2% of the employee's
yearly compensation. Matching contributions by Hach vest at the rate
of 10% for each of the first four years of service and 20% for each of
the next three years of service. All vested amounts allocated to the
participants' accounts are distributable upon retirement at or after
age 65, termination of employment, permanent disability or death.

(ii) Company contributions during fiscal 1997 to the Employee Stock
Ownership Plan ("ESOP") as follows: K. Hach-Darrow $4,079, B. Hach
$4,657, L. Sirovy $4,657 and G. Dreher $4,373. All domestic full time
employees of Hach with six or more months of service are eligible to
participate in the ESOP. Hach's annual contribution to the ESOP is
determined by the Board of Directors and is proportionately allocated
to participants' accounts based on their annual compensation not in
excess of $150,000. Participants' accounts in the ESOP vest at the
rate of 10% for each of the participant's first four years of service
with Hach and 20% for each of the participant's next three years of
service. The ESOP invests primarily in Company stock. All amounts in
the participants' accounts in the ESOP are distributable upon
retirement at or after age 65, termination of employment, permanent
disability or death.

(iii) Imputed compensation under Group Term Life Insurance Program as
follows: K. Hach-Darrow $5,099, B. Hach $1,152, K. Ogan $944, L.
Sirovy $1,800 and G. Dreher $391. The program, which is generally
available to all employees, provides coverage during employment equal
to twice salary (with a maximum benefit of $250,000). The above
amounts of premiums paid by Hach on behalf of named executive officers
under the program represent amounts imputed as compensation to such
executive officers under the Internal Revenue Code of 1986, as
amended.

(iv) Company contributions during the 1997 fiscal year to Hach's
Deferred Compensation Plan as follows: K. Hach-Darrow $0, B. Hach
$7,500, K. Ogan $7,500, L. Sirovy $7,500 and G. Dreher $7,500.
Company contributions on behalf of eligible key employees under the
Deferred Compensation Plan are determined on an annual basis in the
sole discretion of the Plan's administration committee, which is
appointed by the Board of Directors. The Deferred Compensation Plan
also allows all eligible key employees to defer up to 25% of their
base compensation and up to 100% of bonuses and certain other payments
on a tax favored basis into a tax exempt trust pursuant to Internal
Revenue Service guidelines. The employee accounts are invested by the
Plan trustee in an investment fund as directed by the administration
committee. The Deferred Compensation Plan is the result of March 1,
1995 amendment and reconstitution of Hach's Supplemental Executive
Benefits Plan, which was first established in 1988. Compensation
deferred under the Deferred Compensation Plan at the election of the
named executives are included above in the category (e.g., salary,
bonus) and year it would otherwise have been reported had it not been
deferred.

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STOCK OPTIONS GRANTS IN LAST FISCAL YEAR

Hach maintains the 1993 Stock Option Plan (the "Option Plan"). The
Option Plan is administered by the Compensation Committee of Hach's Board of
Directors which, in its sole discretion, determines the persons from among
salaried, full-time employees owning less than five percent of Hach's
outstanding stock to whom options, either incentive or non-incentive as
defined in Section 422 of the Internal Revenue Code, will be granted and the
terms and conditions of each grant within the limits imposed by the Option
Plan. The following table provides information relating to options granted
to the named executive officers during fiscal 1997.

OPTION GRANTS IN LAST FISCAL YEAR

[Enlarge/Download Table]

Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for Option Term
Individual Grants ----------------------------------
-----------------
Number of % of Total
Securities Options
Underlying Granted to
Options Employees in Exercise of
Granted Fiscal Base Price Expiration
Name (#)(2) Year ($/Sh) Date 0% 5% 10%
---- ------ ---- ------ ---- -- -- ---

Kathryn Hach-Darrow 0 -- -- -- -- -- --
Bruce J. Hach 8,000 10.5% $16.50 11/22/2001 $0 $36,480 $80,560
Kenneth Ogan 8,000 10.5% $16.50 11/22/2001 $0 $36,480 $80,560
Loel J. Sirovy 8,000 10.5% $16.50 11/22/2001 $0 $36,480 $80,560
Gary R. Dreher 8,000 10.5% $16.50 11/22/2001 $0 $36,480 $80,560
All Shareholders' Potential
Realizable Value (3) $0 50,621,000 111,866,000

-------------------------------
(1) Based on 76,000 options granted to employees in fiscal 1997.

(2) Each option entitles the optionee to one share of Hach Common Stock and one
share of Hach Class A Common Stock upon exercise.

(3) The potential realizable value to all shareholders at the stated
appreciation rates is based on shares outstanding at November 22, 1996,
assuming such shares were purchased for $16.50 on November 22, 1996 and
held until November 22, 2001.

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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES

The following table shows information concerning the exercise of stock
options by each of the named executive officers during fiscal 1997 and the
value of all remaining exercisable options at April 30, 1997, on a pre-tax
basis.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES

[Enlarge/Download Table]

Numer of Securities Underlying Value of Unexercised In-the-
Options at 4/30/97(#)(2) Money Options at 4/30/97($)(3)
------------------------ ------------------------------
Shares Value
Acquired on Realized
Name Exercise(#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------

Kathryn Hach-Darrow 0 $0 0 0 $0 $0
Bruce J. Hach 0 0 18,000 12,000 0 0
Kenneth Ogan 0 0 4,000 16,000 0 0
Loel J. Sirovy 0 0 24,000 16,000 0 0
Gary R. Dreher 0 0 24,000 16,000 0 0

------------------------
(1) The value realized on exercise of stock options is calculated by
subtracting the exercise price from the market value of Hach's Common Stock
as of the exercise date.

(2) Each option entitles the optionee to one share of Hach Common Stock and one
share of Hach Class A Common Stock upon exercise.

(3) The value of unexercised in-the-money options is equal to the market value
of the Common Stock at April 30, 1997 ($14.50 per share) less the per share
option exercise price multiplied by the number of exercisable options, as
the case may be.

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EXECUTIVE EMPLOYMENT AGREEMENTS

Each of the executive officers identified below has an employment
agreement with Hach which comes into effect only upon a "Change of Control"
of Hach (as defined in the agreement), and thereafter provides for continued
employment of such individual for a three year term (which is automatically
renewed annually for one year unless either party gives six months prior
written notice of termination) (the "Employment Period") at an annual
compensation rate, and with such employment benefits, as in effect at the
time of the commencement of the Employment Period. The agreement, once
triggered, further provides that, if the individual's employment is
terminated by Hach (except for "cause" as defined in the agreement) or if the
individual should resign under certain circumstances set forth in the
agreements, the individual shall be entitled to certain payments described
below. The executive officers who have these employment agreements are
Messers. Hach, Sirovy, Churchill, Dreher, Thompson, and Ogan, and their
current annual compensation rates range from $99,000 to $175,000.

The Board of Directors believes that these agreements assure fair
treatment of the executive officers in relation to their careers with Hach by
assuring them of some financial security. The Agreements also protect the
interests of Hach stockholders by encouraging the executive officers to
continue their attention to their duties without distraction in a potentially
disturbing circumstance and neutralizing any bias they might have in
evaluating proposals for the acquisition of Hach.

Under the agreements, upon the death of an executive officer, Hach is
obligated to make payments to the beneficiary or representative of the
deceased at a rate equal to one-half of the annual compensation rate in
effect on the date of death, until the end of the term of the agreement,
without reduction of any life insurance benefits payable directly to the
deceased's beneficiaries or estate.

If the executive officer's employment is terminated by Hach by reason of
such individual's disability, Hach is obligated to pay a salary to such
individual at the annual rate in effect upon termination for the remaining
term of the agreement.

The agreements entitle an executive officer to resign during the
Employment Period if, without his consent in any circumstance other than his
disability, his office in Hach or the geographical area of his employment
should be changed. Upon such resignation, the individual is entitled to a
lump sum payment equal to the aggregate cash compensation (based on the
annual compensation rate in effect at the time of termination) which would
have been payable to the individual over the remaining term of the agreement
had it not been terminated, plus any other benefits which would have been
payable to him during such period (including the fair market value of any
stock options or other stock rights granted under any stock plans of Hach).

Each agreement includes a covenant by the individual providing that, if
the individual's employment terminates for any reason, the individual will
not for a period of twelve months following the termination of his or her
employment engage directly or indirectly in any competitive business, nor
will the individual at any time following the termination use confidential
information of Hach.

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ADDITIONAL INFORMATION REGARDING ETS

DIRECTORS AND OFFICERS

[Download Table]

NAME AGE POSITION WITH ETS
---- --- -----------------

Harry T. Stephenson 68 Chairman of the Board and Director

John R. Gildea 58 Director

Mark J. Stephenson 39 President and Director

John P. Simon 46 Executive Vice President and Secretary

Michael J. Strycker 36 Vice President, Administration and Finance
and Treasurer

David A. N. Morris 53 Vice President, Research

Kenneth A. Blake 62 Vice President, Development

John L. Whetzell 54 Vice President, Operations

James A. Demarest 45 Vice President, Quality Assurance

Harry T. Stephenson founded ETS on September 1, 1985. Mr. Stephenson served
as ETS' President from its inception until August of 1996. He is currently
Chairman of the Board of Directors, a position he has held since ETS was
founded. Harry T. Stephenson is the father of Mark J. Stephenson.

Mark J. Stephenson joined ETS on October 31, 1988, as Director of Market
Development. On April 15, 1991, he was promoted to Vice President of
Marketing and Sales. Mr. Stephenson was named Senior Vice President on
January 1, 1995. He was named President in August of 1996 and also serves as
a member of the Board of Directors.

John R. Gildea was an original member of ETS Board of Directors, and served
as its Secretary. He joined ETS as a full time employee on September 30,
1991, as Vice President and General Counsel. Mr. Gildea served in these
capacities until August 30, 1996. He remains a member of the ETS Board of
Directors.

John P. Simon joined ETS in March of 1990 and is currently the Executive Vice
President of ETS, overseeing Sales, Marketing, Customer Service, and
Operations. He assumed this responsibility in February of 1997. Prior to that
he was Vice President of Marketing and Sales. He served in various sales and
marketing positions, including Director of these functions prior to his being
named a Vice President in January of 1995. Before joining ETS, he was the
Director of Sales Planning for Nabisco's Grocery Products Division in its New
Jersey headquarters. He worked at Nabisco Brands for 13 years, beginning as a
sales representative and ascending through multiple field sales and marketing
positions in different locations throughout the U.S.

S-4 88th Page of 215 TOC 1st Previous Next ↓Bottom Just 88th
Michael J. Strycker joined ETS on May 18, 1994 as Director of Finance. On
August 1, 1996 he was named Vice President of Finance and Administration and
appointed Treasurer. He is a Certified Public Accountant and previously
worked for Coopers & Lybrand L.L.P. for almost 11 years prior to joining ETS.
He started as a staff accountant at Coopers & Lybrand L.L.P. and after
several promotions, was an Audit Manager in charge of a variety of
manufacturing and financial clients when he left that firm.

Kenneth A. Blake joined ETS on December 1, 1986, after serving for 22 years
in the medical diagnostic arena with the Bayer Corporation in various
capacities. His major focus of activity at both Bayer and ETS has been in the
area of dry reagent strip technology. He is presently Vice President of
Product Development.

David A. N. Morris joined ETS on August 5, 1996 as Vice President of
Research. He is responsible for directing internal research activity towards
new product concepts, and for identifying outside product and technology
opportunities for maintaining ETS' product leadership position.

John L. Whetzell started at ETS in October of 1994 as a consultant in the
area of Operations and Regulatory Compliance. In July of 1997 he accepted the
full time position of Vice President of Operations.

James A. Demarest has an extensive background in quality systems management
and joined ETS on November 6, 1996 as Director of Quality Assurance. On June
2, 1997, he was promoted to the position of Vice President of Quality
Assurance. Prior to joining ETS, he worked for many years in the aerospace
industry for Allied Signal.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of March 1, 1998 as to
the beneficial ownership of outstanding shares of ETS Common Stocks by each
person known by ETS to own beneficially more than five percent of the
outstanding shares of each class of ETS Common Stocks, by each director and
ETS named executive officer (as defined below), and by all current directors
and executive officers of ETS as a group:

[Download Table]

NAME ETS CLASS A COMMON STOCK ETS CLASS B COMMON STOCK
---- ------------------------ ------------------------
Number of Percent Number of Percent
Shares Shares

Harry T. Stephenson(1)........ -- -- 476,756 68.87%

Environmental Test Systems -- --
Inc. Employee Stock
Ownership Plan and Trust(1).. 231,304 100%

John R. Gildea(1)............ -- -- 125,472 18.13%

Robert C. Boguslaski(1)....... -- -- 90,000 13.00%

Mark J. Stephenson............ -- -- -- --

John P. Simon(2).............. 227 * -- --

Kenneth A. Blake(2).......... 245 * -- --

David A.N. Morris............ -- -- -- --

All current executive officers 775 * 602,228 87.00%
and directors as a group.....

----------------------
*less than 1%

(1) The business address for each of Harry T. Stephenson, the ETS ESOP and John
Gildea is c/o Environmental Test Systems, Inc., 23575 County Road 106, P.O.
Box 4659, Elkhart, Indiana 46514-0659. The business address for Robert C.
Boguslaski is c/o Serim Research Corporation, 23565 Reedy Drive, Elkhart,
Indiana 46514.

(2) Represents shares allocated under the ETS ESOP in 1996. Allocations for
1997 are not calculable at this time.

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SUMMARY COMPENSATION TABLE

The following table provides summary information concerning compensation
paid by ETS to its Chief Executive Officer and each of the four other most
highly compensated executive officers of ETS (hereafter referred to as the
"ETS named executive officers") for the fiscal years ended December 31, 1997,
1996 and 1995.

SUMMARY COMPENSATION TABLE

[Enlarge/Download Table]

Long Term Compensation
Awards(2)
Annual ------------------------------
Compensation Securities
---------------- Other Annual Underlying All Other
Name and Principal Position Year Salary Bonus Compensation(1) Options Compensation(3)
--------------------------- ---- ------ ----- --------------- ------- ---------------

Harry T. Stephenson 1997 $ 95,004 $ 0 $ 1,707 0 $ 0
Chairman of the Board 1996 152,946 60,000 3,451 0 5,510
1995 178,358 160,000 2,923 0 9,240

Mark J. Stephenson 1997 132,802 0 4,035 0 38,300
President 1996 103,100 60,000 8,821 0 5,510
1995 86,643 80,000 9,111 0 9,240

John P. Simon 1997 97,636 0 0 0 0
Executive Vice President 1996 84,890 22,000 0 0 7,279
and Secretary 1995 80,080 15,000 0 0 4,805

Kenneth A. Blake 1997 88,643 0 0 0 0
Vice President of 1996 86,242 12,000 0 0 9,115
Product Development 1995 82,888 12,000 0 0 8,600

David A.N. Morris 1997 82,508 0 0 0 0
Vice President of 1996 31,858 5,000 6,950 0 0
Research 1995 0 0 0 0 0

(1) Includes tax return preparation fees and life insurance premiums of $3,000
per year on a policy on Mark J. Stephenson's life, the beneficiary of which
is his wife. Also included is the value of health insurance provided
during the time ETS was an S Corporation and such amounts were required to
be included in shareholders compensation for tax purposes. The amount for
1996 for David A.N. Morris represents moving and relocation expenses paid
by ETS. The aggregate amount of perquisites and other personal benefits
did not exceed the lesser of $50,000 or ten percent of the total annual
salary and bonuses reported for any of the named executive officers, and is
therefore not included.

(2) No named ETS executive officer had any restricted stock holdings as of
December 31, 1997. ETS has not granted any stock appreciation rights to
any named executive officer.

(3) The amounts reported as "All Other Compensation" include the following
payments or accruals under ETS' benefit and incentive plans: (i) ETS
contributions during 1996 and 1995 to ETS 401(k) Profit Sharing Plan were
as follows: Harry T. Stephenson $5,510 and $9,240, Mark J. Stephenson
$5,510 and $9,240, John P. Simon $3,939 and $4,805 and Kenneth A. Blake
$5,510 and $8,600, respectively; (ii) ETS contributions during 1996 to ETS
ESOP were as follows: John P. Simon $3,340, and Kenneth A. Blake $3,605
(contributions for 1997 are not calculable at this time); and (iii) Amounts
accrued during 1997 for the benefit of Mark J. Stephenson under the
Environmental Test Systems, Inc. Make-Up Benefit Plan were $38,300.

S-4 91st Page of 215 TOC 1st Previous Next ↓Bottom Just 91st
EXECUTIVE EMPLOYMENT AGREEMENT

ETS has an employment agreement with Harry T. Stephenson which provides
for a term of one year renewable automatically for successive one-year terms
at a current annual salary of $95,000. This agreement will be terminated
effective at the Effective Time of the Merger.

STOCK OPTIONS GRANTS IN LAST FISCAL YEAR

ETS issued no options in its last fiscal year.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES

No ETS options were exercised in its last fiscal year nor were any
unexercised options outstanding at December 31, 1997.

CERTAIN TRANSACTION AND BUSINESS RELATIONSHIPS

Harry T. Stephenson, Chairman of ETS, owns 25.7%, Mark J. Stephenson,
President of ETS, owns 5%, and John P. Simon, Executive Vice President and
Secretary of ETS, owns 3% of Serim Research Corporation ("Serim"). Serim is
a customer of ETS as well as a competitor in the medical market. Sales to
Serim by ETS for the last three years were: 1997 - $386,560, 1996 - $584,371
and 1995 - $678,754.

See "Additional Information Regarding ETS -- Executive Employment
Agreement" above, for a description of ETS's employment with Harry T.
Stephenson.

ETS provides the Environmental Test Systems, Inc. Make-Up Benefit Plan
for the benefit of Mark J. Stephenson. The purpose of this plan is to
provide Mark Stephenson with benefits comparable to those he would receive
under the ETS ESOP were he eligible to participate in that plan. See,
"Additional Information Concerning ETS -- Summary Compensation Table" above
with respect to amounts paid to Mark Stephenson under this plan.

On July 31, 1996, the ETS ESOP purchased then existing ETS common stock
for the amounts shown from Harry T. Stephenson ($47,500), John R. Gildea
($1,809,077), Horace B. Moyer, Trustee, u/d/t/dated February 4, 1994, f.b.o.
Horace B. Moyer ($517,563), Robert B. Moyer ($206,428), and Gary L. Moyer
($206,428).

ETS owes an aggregate principal amount of $4,445,000 as of December 31,
1997 to former and current stockholders, including Harry T. Stephenson
($2,311,400), and John Gildea ($1,333,500) and Robert C. Boguslaski
($400,050). These amounts are payable pursuant to subordinated notes issued
to each such person by ETS payable in quarterly installments through July 31,
2006. The notes are collaterized by certain assets of ETS pursuant to a
security agreement and are subordinated to the ETS ESOP Note.

ETS is a party to a Resignation and Release Agreement dated July 31,
1996 with John R. Gildea. Pursuant to the terms of that agreement, ETS has
agreed to allow Mr. Gildea to continue his coverage under ETS' medical,
dental and participating life insurance, at his expense, so long as he
continues as a director of ETS and is eligible to participate as such. The
agreement further provides that if Mr. Gildea ceases to be a director of ETS
as a result of his removal, failure to be reelected or resignation on account
of incapacity or disability, ETS will pay Mr. Gildea the amount he pays for
health coverage for himself and

S-4 92nd Page of 215 TOC 1st Previous Next ↓Bottom Just 92nd
his wife (up to a maximum of $333.33 a month), until his death or until he is
covered under an employer-provided health plan or Medicare. Finally, the
agreement provides that Mr. Gildea will be paid $500 for each meeting of the
Board of Directors of ETS (which he attends in person or by telephone) and
$15,500 as a severance payment on the last day of his employment with ETS.

EXPERTS

The consolidated financial statements and schedules of Hach and
subsidiaries for each of the three years in the period ended April 30, 1997
incorporated in this Proxy Statement/Prospectus have been incorporated by
reference herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.

The consolidated financial statements of ETS and subsidiary as of and
for the year ended December 31, 1997 included in this Proxy
Statement/Prospectus have been included herein in reliance upon the report of
Coopers & Lybrand L.L.P., independent accountants, given on the authority of
that firm as experts in accounting and auditing.

With respect to the unaudited interim financial information of Hach
for the periods ended in the Quarterly Reports on Form 10-Q for the quarters
ended July 31, 1997, October 31, 1997 and January 31, 1998, incorporated by
reference in this Proxy Statement/Prospectus, the independent accountants
have reported that they have applied limited procedures in accordance with
professional standards for a review of such information. However, their
separate reports included in the Company's quarterly reports on Form 10-Q for
the quarters ended July 31, 1997, October 31, 1997 and January 31, 1998, and
incorporated by reference herein, states that they did not audit and they do
not express an opinion of that interim financial information. Accordingly,
the degree of reliance on their report on such information should be
restricted in light of the limited nature of the review procedures applied.
The accountants are not subject to the liability provisions of Section 11 of
the Securities Act of 1933 for their report on the unaudited interim
financial information because that report is not a "report" or a "part" of
the registration statement prepared or certified by the accountants within
the meaning of Sections 7 and 11 of the Act.

CERTAIN LEGAL MATTERS

The legality of the Hach Common Stocks to be issued in connection with
the Merger are being passed upon for Hach by McBride Baker & Coles, counsel
to Hach. Robert O. Case, of counsel to McBride Baker & Coles, is Secretary
and General Counsel of Hach. As of March 1, 1998, Mr. Case and partners and
associates at McBride Baker & Coles owned an aggregate of 31,425 shares of
Hach Common Stock and 31,075 shares of Hach Class A Common Stock.

Certain of the tax consequences of the Merger to ETS shareholders (see "The
Merger-Certain Federal Income Tax Consequences") are being passed upon by
Krieg DeVault Alexander & Capehart, counsel to ETS. As of March 1, 1998,
partners and associates at Krieg DeVault Alexander & Capehart owned no shares
of ETS Common Stocks.

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ENVIRONMENTAL TEST SYSTEMS, INC. AND SUBSIDIARY YEAR ENDED
DECEMBER 31, 1997

CONTENTS

[Download Table]

Pages
-----

Report of Independent Accountants F-1

Consolidated Financial Statements:
Consolidated Balance Sheet F-2
Consolidated Statement of Income F-3
Consolidated Statement of Stockholders' Equity (Deficiency) F-4
Consolidated Statement of Cash Flows F-5
Notes to Consolidated Financial Statements F-6-F-13

S-4 94th Page of 215 TOC 1st Previous Next ↓Bottom Just 94th
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of
Environmental Test Systems, Inc.:

We have audited the accompanying consolidated balance sheet of Environmental
Test Systems, Inc. and subsidiary as of December 31, 1997, and the related
consolidated statements of income, stockholders' equity (deficiency) and cash
flows for the year then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Environmental Test
Systems, Inc. and subsidiary as of December 31, 1997, and the consolidated
results of their operations and their cash flows for the year then ended, in
conformity with generally accepted accounting principles.

As discussed in Note J to the consolidated financial statements, on January 21,
1998 the Company entered into an Agreement and Plan of Merger whereby the
Company will be acquired and become a wholly owned subsidiary of Hach Company.

South Bend, Indiana
February 6, 1998

Page F-1

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CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1997

[Download Table]

ASSETS

Current assets:
Cash and temporary/cash investments $ 1,559,815
Receivables, net of allowance for doubtful
receivables of $25,000 1,315,410
Refundable income taxes 141,000
Inventories 1,217,602
Deferred income taxes 88,000
Other current assets 50,828
-----------
Total current assets 4,372,655
-----------

Property, plant and equipment:
Land 103,200
Building and improvements 1,760,460
Equipment 2,631,272
Vehicles 31,306
Construction in process 396,730
-----------
4,922,968
Less, Accumulated depreciation 2,061,563
-----------

Property, plant and equipment, net 2,861,405
-----------
Intangibles, net of accumulated amortization of $27,922 70,375
-----------

Total assets $ 7,304,435
-----------
-----------

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities:
Current maturities of long-term debt $ 1,076,027
Accounts payable 350,119
Accounts interest payable 97,976
Account income taxes 24,073
Accrued wages, taxes and other 279,931
-----------

Total current liabilities 1,828,126

Long-term debt, less current maturities 6,406,922
Deferred income taxes 59,000
Accrual for non-qualified pension plan 38,300
-----------

Total liabilities 8,332,348
-----------

Commitments and contingent liabilities (Notes F, G and I)

Stockholders' deficiency:
Common stock, Class A, no par value; authorized
300,000 shares, issued and outstanding 231,304 shares 25,545
Common stock, Class B, no par value; authorized
1,000,000 shares, issued and outstanding 692,228 shares 57,455
Paid-in capital 21,317
Retained Earnings 1,603,275
Unearned Employee Stock Ownership Plan shares, 198,536 shares
of Class A common stock (2,735,505)
-----------
Total stockholders' deficiency (1,027,913)
-----------
Total liabilities and stockholders' deficiency $ 7,304,435
-----------
-----------

THE ACCOMPANYING NOTES ARE A PART OF THE CONSOLIDATED FINANCIAL STATEMENTS.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

CONSOLIDATED STATEMENT OF INCOME
AS OF DECEMBER 31, 1997

[Download Table]

Net sales:
Related party $ 386,560
Other 10,701,551
----------

11,088,111

Cost of sales 4,359,450
----------

Gross profit 6,728,661

Research and development expenses: 1,023,705

Marketing expenses 1,902,651

General and administrative expenses 1,545,794
----------

Income from operations 2,256,511

Interest expense (641,485)

Other income, net 76,408
----------

Income before income taxes 1,691,434

Income taxes 656,000
----------

Net income $1,035,434
----------
----------

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CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
FOR THE YEAR ENDED DECEMBER 31, 1997

[Enlarge/Download Table]

UNEARNED
EMPLOYEE TOTAL
CLASS A CLASS B STOCK STOCKHOLDERS'
COMMON COMMON PAID-IN RETAINED OWNERSHIP EQUITY
STOCK STOCK CAPITAL EARNINGS PLAN SHARES (DEFICIENCY)
---------- --------- ------- ---------- ------------ -------------

Balance, January 1, 1997 $ 25,545 $ 57,455 $ - $ 573,418 $ (3,054,205) $ (2,397,787)

Net Income - - - 1,035,434 - 1,035,434

Dividends on allocated
Class A shares ($.96 per
share) - - - (5,577) - (5,577)

Common stock committed to
be released for
allocation to Employee
Stock Ownership Plan
participants; 23,130,
shares of Class A common
stock - - 21,317 - 318,700 340,017
------- -------- ----------- ------------

Balance, December 31, 1997 $ 25,545 $ 57.455 21,317 $1,603,275 $ (2,735,505) $ (1,027,913)
---------- --------- ------- ---------- ------------ -------------
---------- --------- ------- ---------- ------------ -------------

THE ACCOMPANYING NOTES ARE A PART OF THE CONSOLIDATED FINANCIAL STATEMENTS.

Page F-4

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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1997

[Download Table]

Cash flows provided by (used in) operating activities: $ 1,035,434
Net income
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 371,318
Amortization of intangibles 11,408
Provision for non-qualified pension plan 38,300
Loss on sale of equipment 7,361
Deferred income taxes (18,000)
Contributions to Employee Stock Ownership Plan 334,440
Other (2,153)
(Increase) decrease in current assets:
Receivables 370,388
Refundable income taxes (32,300)
Inventories 522,609
Other current assets (12,533)
Increase (decrease) in current liabilities:
Accounts payable (175,443)
Other current liabilities (136,835)
----------

Net cash provided by operating activities 2,313,994
----------

Cash flows provided by (used in) investing activities:
Proceeds from sale of equipment 3,807
Purchase of property, plant and equipment (647,342)
Increase in intangibles (20,988)
----------

Net cash (used in) investing activities (664,523)
----------

Cash flows (used in) financing activities: (849,368)
----------
Payments of long-term debt

Increase in cash and temporary cash investments 800,103

Cash and temporary cash investments:
Beginning of year 759,712
----------

End of year $1,559,815
----------
----------

Supplemental cash flow information:
Cash paid during the year for:
Interest $ 679,557
Income taxes 693,627
Noncash investing and financing activities:
Property, plant and equipment additions included
in accounts payable 66,810

THE ACCOMPANYING NOTES ARE A PART OF THE CONSOLIDATED FINANCIAL STATEMENTS.
Page F-5

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

Environmental Test Systems, Inc. ("ETS") is primarily involved in
developing and manufacturing chemical test systems for water quality,
automotive and industrial applications. ETS sells its products worldwide.

PRINCIPLES OF CONSOLIDATION - The consolidated financial statements
include the accounts of ETS and its wholly owned subsidiary, ETS
International, Inc., a foreign sales corporation (individually and
collectively referred to as the "Company"). All intercompany accounts
and transactions have been eliminated in the consolidated financial
statements.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS - The
preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.

CONCENTRATIONS OF CREDIT RISKS - Financial instruments which potentially
subject the Company to concentrations of credit risk consist principally
of temporary cash investments and non-collateralized trade receivables.
At December 31, 1997, the Company's temporary cash investments were all
with one financial institution. This represents a potential credit risk,
since amounts on deposit are in excess of federally insured limits. The
Company has four customers which accounted for approximately 32% of net
sales for the year ended December 31, 1997. The largest of these
customers accounted for approximately 13% of net sales in 1997.

REVENUE RECOGNITION AND EXPORT SALES - Revenue from product sales is
recognized at time of shipment. Potential credit losses are provided
currently through the allowance for doubtful receivables and actual
credit losses are charged to the allowance when incurred. Export sales
aggregated $2,308,800 for the year ended December 31, 1997.

CASH AND CASH EQUIVALENTS - For purposes of the consolidated statements
of cash flows, cash and temporary cash investments include cash, cash
investments and highly liquid investments with original maturities of
three months or less.

INVENTORY VALUATION - Inventories are stated at cost, determined under
the first-in, first-out method, which is not in excess of market.

PROPERTY, PLANT AND EQUIPMENT - Property, plant and equipment are
carried at cost less accumulated depreciation. Depreciation is
calculated using the straight-line method over the estimated useful
lives as follows: buildings and improvements 15 - 39 years; equipment 3
to 7 years and vehicles 3 to 5 years. Upon sale or retirement of
property, plant and equipment, the asset cost and related accumulated
depreciation is removed from the accounts and any resulting gain or loss
is included in income. Expenditures for maintenance and repairs are
charged to operations as incurred. Betterments and major renewals are
capitalized and recorded in the appropriate asset accounts.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONCLUDED.

INTANGIBLES - Patents and trademarks are recorded at cost and amortized
on a straight-line method over the estimated useful lives of the
intangibles up to 17 years.

INCOME TAXES - Deferred federal income taxes are determined using the
liability method.

B. RECAPITALIZATION AND REVOCATION OF S-CORPORATION STATUS.

On July 30, 1996, the Board of Directors of ETS adopted a plan of
recapitalization and terminated ETS's S-Corporation status under the
Internal Revenue Code, both actions effective as of July 31, 1996.

In connection with the plan of recapitalization, the Company's Articles
of Incorporation were amended and restated to create two new classes of
common Stock, Class A and Class B. Three hundred thousand (300,000)
shares of Class A Common Stock and one million (1,000,000) shares of
Class B Common Stock were authorized for issuance. The Class A Common
Stock may only be held by the newly created Environmental Test Systems,
Inc. Employee Stock Ownership Plan and Trust ("ESOP"). See Note G.

Both classes of common Stock have the same rights, powers and privileges
with the exception of the dividend feature of the Class A Common Stock.
The holders of the Class A Common Stock are entitled to receive
quarterly dividends for five years commencing August 1, 1996 and ending
July 31, 2001. The dividend is cumulative and payable at 7% of the fair
market value of the Class A Common Stock effective July 31, 1996, or
$3,186,996. No dividends may be paid on the Class B Common Stock unless
all dividends payable on the Class A Common Stock have been paid.
Effective August 1, 2001, each outstanding share of Class A Common Stock
shall be automatically converted into one (1) share of Class B Common
Stock.

C. INVENTORIES.

Inventories as of December 31, 1997 consist of the following:

[Download Table]

Raw materials $ 708,276
Work-in-process 168,611
Finished goods 340,715

Total $1,217,602
----------

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

D. SHORT-TERM BORROWINGS.

At December 31, 1997, the Company has a $750,000 working capital bank
line of credit available at the bank's prime rate. The line of credit,
which is payable on demand and expires April 30, 1998, is collateralized
by receivables, inventories and equipment. There were no outstanding
borrowings under this line of credit as of December 31, 1997.

The line of credit is part of a general loan and security agreement (the
"Loan Agreement") which also includes all long-term bank debt (see Note
E). The Loan Agreement contains, among other provisions, certain
restrictive covenants including maintenance of a current ratio, minimum
debt coverage ratio and tangible net worth.

E. LONG-TERM DEBT.
Long-term debt as of December 31, 1997 consists of the following:

[Download Table]

ESOP note payable between the ESOP and the bank,
payable in quarterly installments of $79,675 plus
interest. The ESOP has the discretion of paying
interest based on 60 day LIBOR, 90 day LIBOR or 180
day LIBOR contracts plus 1.6%, or the bank's prime
rate (weighted average interest rate of 7.5% at
December 31, 1997). Final maturity is July 31, 2006,
collateralized by substantially all the assets of the
Company, a pledge of unallocated Class A Common stock
held in suspense and a guaranty by the Company to
the bank. $2,788,621

Note payable, bank, payable in monthly installments
of $1,889 plus interest at the bank's prime rate
(8.5% at December 31, 1997), final maturity in
December 1998, cross-collateralized with above
note payable. 249,328

Subordinated notes payable to former and current
stockholders, payable in quarterly installments
of $127,000 plus interest at the prime rate of
interest as quoted and announced by NBD Bank,
Elkhart, Indiana (8.5% at December 31, 1997),
final maturity July 31,2006, collateralized by
certain assets pursuant to a Security Agreement,
subordinated to the ESOP note. 4,445,000
----------

Total 7,482,949

Less, Current maturities 1,076,027
----------

Long-term debt $6,406,922
----------
----------

Annual maturities of long-term debt are as follows: 1998 - $1,076,027; 1999 -
$826,700; 2000 - $826,700; 2001 - $826,700 and 2002 - $826,700.

The long-term debt obligations are subject to the provisions and restrictive
covenants under the Loan Agreement described in Note D.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

F. PROJECT FUNDING AND CONTINGENT LIABILITY.

On December 12, 1986, the Company entered into an agreement (the "Funding
Agreement") with Indiana Corporation for Science and Technology, now known
as the Corporation for Business Modernization and Technology ("CBMT"). The
Funding Agreement provided for up to $626,200 of funds from CBMT in
installments over the period January 1, 1987 through June 30, 1989. The
funds were used for research and development expenses, acquisition of
equipment and other expenditures directly relating to specific projects
(the "Project") approved for funding by CBMT.

The Funding Agreement with CBMT provides that the Company will pay CBMT six
percent (6%) of the gross revenues received by the Company from the sale,
licensing or other commercial exploitation of products, processes and/or
technologies derived in whole or in part from the use of the funds or
developed pursuant to the Project until CBMT has received twice the amount
of its payments to the Company under this Funding Agreement.

The Company received the maximum funds available under the Funding
Agreement ($626,200), and accounted for the funds received from CBMT as
income in the periods the funds were received (which corresponds to the
periods in which Project expenditures were made).

During the year ended December 31, 1997, the Company had net sales of
$1,689,451 which were subject to the six percent royalty and, accordingly,
the Company recognized $101,367 of royalty expense.

As of December 31, 1997, the Company has a maximum liability to CBMT
aggregating $537,474. The liability is not reflected on the Company's
consolidated balance sheets, and is contingent upon future gross revenues
from the Project which are subject to the six percent royalty payments.

G. EMPLOYEE BENEFIT PLANS.

EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST ("ESOP")

Effective August 1, 1996, the Company established the ESOP for the benefit
of the Company's employees who meet certain eligibility requirements
including having completed 1,000 hours of credited service during the ESOP
plan year. The ESOP trust acquired 231,304 shares of Class A Common Stock
with the proceeds of a bank loan that is guaranteed by the Company and is
recorded in the Company's consolidated balance sheets.

The Company's contributions to the ESOP, plus dividends paid on the shares
of Class A Common stock held by the ESOP, are used to repay the loan
principal and interest. As the ESOP debt is repaid, shares of the Company's
Class A Common Stock are released from col-

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

G. EMPLOYEE BENEFIT PLANS, CONTINUED.

lateral and allocated to qualified ESOP participants based on the
proportion of principal paid during the period to the original loan amount.
The Company accounts for the ESOP in accordance with American Institute of
Certified Public Accountants Statement of Position 93-6, "Employers'
Accounting for Employee Stock Ownership Plans." Accordingly, the debt of
the ESOP is recorded as debt in the Company's consolidated balance sheets
and the unallocated shares pledged as collateral are reported as a
reduction of stockholders' equity in the consolidated balance sheets. As
shares are committed for release from collateral, the Company records
compensation expense equal to the fair value (as determined annually by an
independent valuation firm) of the released shares, except for the released
shares used to pay the dividend declared on the allocated shares which is
charged to dividends payable. Dividends on allocated shares are reported as
a reduction of retained earnings. Compensation expense related to the ESOP
was $334,440 for the year ended December 31, 1997. Contributions to the
ESOP for terminated vested participants were $1,423 for the year ended
December 31, 1997.

Following is a summary of shares held by the ESOP trust as of December 31,
1997:

[Download Table]

Allocated shares 28,913
Shares committed to be released 3,855
Unreleased shares 198,536
----------

Total ESOP shares 231,304
----------
----------

Fair value of unreleased shares at December 31,
1997 (based on the most recent valuation) $2,918,479
----------
----------

All shares acquired by the ESOP are subject to a put option exercisable by
participants upon death, disability, retirement or separation from service.
The put option provides that a participant has the right to require the
Company to purchase the participant's vested shares at their fair market
value as determined by the most recent independent valuation. The
participant can elect to exercise the put option in the year following
separation from service. The market value will then be determined by the
independent valuation performed at the end of THE year in which the
separation from service occurred. The fair value of shares vested and
subject to the repurchase obligation is $85,004 as of December 31, 1997.

401(k) PROFIT SHARING PLAN

The Company has a 401(k) profit sharing plan covering substantially all its
employees. The Plan is a defined contribution plan under which employees
may voluntarily contribute a percentage of their compensation. The plan
also permits the Company to make discretionary contributions as the Board
of Directors determines by resolution adopted before the end of the year.
The Company made no profit sharing plan contribution for the year ended
December 31, 1997.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

G. EMPLOYEE BENEFIT PLANS, CONCLUDED.

NON-QUALIFIED PENSION PLAN

On August 31, 1997, the Board of Directors of the Company approved the
Environmental Test Systems, Inc. Make-Up Benefit Plan (the "Plan"), a
non-qualified pension plan with an effective date of January 1, 1996. The
Plan covers the President of the Company who is not eligible to participate
in the ESOP. The purpose of the Plan is to provide the President with
benefits that are equal in value to the benefits that would have accrued to
him if he were a participant in the ESOP.

The amount of the benefits under the Plan for each year is determined by
calculating the number of shares the President would have received had he
been a participant in the ESOP. The number of shares are then multiplied by
the fair value of the shares as of the most recent valuation date. Benefits
under the Plan are payable at the same time and under the same methods as
are prescribed by the ESOP, except that benefit payments will be grossed-up
to pay the personal income taxes on the distribution to the President.
Expense under the Plan was $38,300 for the year ended December 31, 1997.

H. INCOME TAXES.

Income taxes for the year ended December 31, 1997 consist of the following:

[Download Table]

Federal:
Current $ 538,000
Deferred (18,000)
----------

520,000
State 136,000
----------

Total $ 656,000
----------
----------

The provisions for income taxes differ from the expected amounts (computed by
applying the federal statutory corporate income tax rate of 34% to income before
income taxes) as follows:

[Download Table]

Computed statutory provisions $ 575,100
Increases (decreases) resulting from:
State income taxes, net of federal
incomes tax benefit 89,800
Foreign Sales Corporation subject to
lower tax rate (34,100)
Research and experimentation credit (19,700)
Non-deductible merger related
expenses 33,800
Other, net 11,100
----------

Total $ 656,000
----------
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

H. INCOME TAXES, CONCLUDED.

The components of the net deferred tax asset and liability at December 3l, 1997
were as follows:

[Download Table]

Deferred tax asset:
Allowance for doubtful receivables $ 8,500
Inventories 40,000
Accrued liabilities 39,500
---------

Deferred tax asset $ 88,000
---------
---------

Deferred tax liability (asset):

Depreciation $ 86,000
Unearned ESOP shares (18,100)
Other, net (8,900)
---------

Deferred tax liability $ 59,000
---------
---------

I. RELATED PARTY TRANSACTIONS.

During the year ended December 31, 1997, the Company had sales to a related
party, Serim Research Corporation ("Serim") (the majority stockholder of
the Company is a principal stockholder of Serim).

[Download Table]

Amounts receivable, included in
receivables $ 61,131

Sales of manufactured products
(included in net sales) 386,560

The Company and Serim have entered into a Contract Manufacturing Agreement as
amended on April 1, 1996 (the "Agreement") whereby the Company agrees to
manufacture products for Serim and Serim agrees to purchase products from the
Company, under the terms and conditions set forth in the Agreement. The Company
manufactures and sells products to Serim at prices set forth in the Agreement,
although the Company can increase the product prices if the Company receives raw
material cost increases of ten percent or more in any contract year. Under the
terms of the Agreement, the Company received notification that Serim intends to
cancel the Agreement effective March 31, 1998.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONCLUDED

J. SUBSEQUENT EVENT.

On January 21, 1998, Hach Company ("Hach"), the Company and Hach
Acquisition Corp., a newly formed wholly owned subsidiary of Hach
("Mergerco"), executed an Agreement and Plan of Merger pursuant to which
the Company will be merged with and into Mergerco, with Mergerco being the
surviving corporation.

The merger of Hach and the Company has been approved by the Board of
Directors of both companies. The merger is subject to the approval of the
shareholders of the Company, by vote of a majority of the outstanding
shares of each class of the Company's Common stock voting as separate
classes. It is anticipated that the merger will be consummated during the
second quarter of 1998.

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APPENDIX I
CONFORMED COPIES

AMENDMENT

AGREEMENT AND PLAN OF MERGER

AMONG HACH COMPANY, HACH ACQUISITION CORP.

AND

ENVIRONMENTAL TEST SYSTEMS, INC.

This Amendment to the Agreement and Plan of Merger entered into among
Hach Company, a Delaware corporation ("Hach"), Hach Acquisition Corp., a
Delaware corporation and a wholly-owned subsidiary of Hach ("Mergerco") and
Environmental Test Systems, Inc., an Indiana corporation ("ETS") is entered into
as of the 26th day of February 1998.

WHEREAS, Hach, Mergerco and ETS entered into an Agreement and Plan of
Merger as of January 21, 1998 (the "Agreement"); and

WHEREAS, the relative conversion ratios of the ETS Class A Common Stock
and the ETS Class B Common Stock as between the two classes was established on
the assumption that the merger transaction would be consummated on or before
December 31, 1997; and

WHEREAS, the parties now anticipate that the merger transaction may not
be consummated until the latter part of April 1998 or in May 1998; and

WHEREAS, the delay in closing of the merger transaction will unfairly
prejudice the Class B shareholders of ETS unless the relative conversion ratios
are equitably adjusted since the ETS charter requires that mandatory dividends
must continue to be paid to the holders of ETS Class A Common Stock until the
Merger is consummated but no dividends may be paid during such period to the
Class B shareholders.

NOW THEREFORE, in consideration of the premises and the mutual promises
herein contained and for other good and valuable consideration, the parties
hereto agree as follows:

1. Section 2.1(a)(i)(A) of the Agreement is amended by deleting
$17.465651 and substituting therefor $17.250026.

2. Section 2.1(a)(ii)(A) of the Agreement is amended by deleting
$14.749656 and substituting therefor $14.821706.

3. The last sentence of Section 11.1(a) of the Agreement is amended
to read as follows:

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The liability for Damages hereunder shall be allocated among the holders
of ETS Class A Common Stock (the "CLASS A STOCKHOLDERS") and the holders
of ETS Class B Common Stock (the "CLASS B STOCKHOLDERS") in the Merger
(all such Class A Stockholders and Class B Stockholders, being
hereinafter collectively referred to as the "SURRENDERING STOCKHOLDERS"),
as follows:

Class A Stockholders 28%
Class B Stockholders 72%

4. All other provisions of the Agreement remain in full force and
effect.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the 26th day of February 1998.

HACH COMPANY

By: /s/ Bruce J. Hach
----------------------------------
Bruce J. Hach, President

HACH ACQUISITION CORP.

By: /s/ Gary R. Dreher
----------------------------------
Gary R. Dreher,Vice President,
Treasurer and Secretary

ENVIRONMENTAL TEST SYSTEMS, INC.

By: /s/ Mark J. Stephenson
----------------------------------
Mark J. Stephenson, President

The undersigned hereby agrees to be bound by all of the provisions of
ARTICLE 11 of the above Agreement which are binding on the Representative and
shall be deemed to be a party hereto for such purposes.

/s/Harry Stephenson
--------------------------------------------
Harry Stephenson, as Representative

S-4 109th Page of 215 TOC 1st Previous Next ↓Bottom Just 109th
AGREEMENT AND PLAN OF MERGER

AMONG HACH COMPANY, HACH ACQUISITION CORP.

AND

ENVIRONMENTAL TEST SYSTEMS, INC.

January 21, 1998

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TABLE OF CONTENTS

[Download Table]

ARTICLE 1

1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Effective Time of Merger . . . . . . . . . . . . . . . . . . . . . 2
1.3 Certificate of Incorporation; By-Laws. . . . . . . . . . . . . . . 2
1.4 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Taking of Necessary Action; Further Action . . . . . . . . . . . . 2

ARTICLE 2

2.1 Conversion of Shares . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Dissenting Stockholders. . . . . . . . . . . . . . . . . . . . . . 5
2.3 Exchange of Certificate. . . . . . . . . . . . . . . . . . . . . . 6

ARTICLE 3

3.1 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

ARTICLE 4

4.1 Organization and Good Standing . . . . . . . . . . . . . . . . . . 7
4.2 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.3 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.4 Authority; Noncontravention. . . . . . . . . . . . . . . . . . . . 9
4.5 Financial Statements . . . . . . . . . . . . . . . . . . . . . . .10
4.6 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . .11
4.7 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
4.8 Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . .12
4.9 Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
4.10 Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . .13
4.11 Accounts Receivable; Returns . . . . . . . . . . . . . . . . . . .13
4.12 Intellectual Property. . . . . . . . . . . . . . . . . . . . . . .14
4.13 Absence of Material Adverse Effect; Conduct of Business. . . . . .15
4.14 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
4.15 Contracts; Etc.. . . . . . . . . . . . . . . . . . . . . . . . . .17
4.16 Labor Relations. . . . . . . . . . . . . . . . . . . . . . . . . .19
4.17 Employee Compensation. . . . . . . . . . . . . . . . . . . . . . .19
4.18 Transactions with Insiders . . . . . . . . . . . . . . . . . . . .22
4.19 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . .22
4.20 ETS Products; Regulation . . . . . . . . . . . . . . . . . . . . .24
4.21 Customers and Suppliers. . . . . . . . . . . . . . . . . . . . . .24
4.22 Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . .25
4.23 No Existing Discussions. . . . . . . . . . . . . . . . . . . . . .25
4.24 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25

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4.25 Accuracy and Completeness of All Statements. . . . . . . . . . . .25

ARTICLE 5

5.1 Organization and Good Standing . . . . . . . . . . . . . . . . . .25
5.2 Authority; Noncontravention. . . . . . . . . . . . . . . . . . . .25
5.3 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . .27
5.4 SEC Filings; Financial Statements. . . . . . . . . . . . . . . . .27
5.5 Absence of Litigation. . . . . . . . . . . . . . . . . . . . . . .28
5.6 Ownership of Mergerco; No Prior Activities . . . . . . . . . . . .28
5.7 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
5.8 Accuracy and Completeness of All Statements. . . . . . . . . . . .29

ARTICLE 6

6.1 Registration Statement; Proxy Statement. . . . . . . . . . . . . .29
6.2 Shareholders' Meeting. . . . . . . . . . . . . . . . . . . . . . .31
6.3 Access; Confidentiality. . . . . . . . . . . . . . . . . . . . . .31
6.4 Conduct of Business of ETS Prior to the Effective Time . . . . . .31
6.5 Consents; Cooperation. . . . . . . . . . . . . . . . . . . . . . .35
6.6 Additional Agreements. . . . . . . . . . . . . . . . . . . . . . .35
6.7 Interim Financial Statements; 1997 Audited Financials. . . . . . .36
6.8 Notification of Certain Matters. . . . . . . . . . . . . . . . . .36
6.9 Public Announcements . . . . . . . . . . . . . . . . . . . . . . .37
6.10 No Solicitation of Transactions. . . . . . . . . . . . . . . . . .37
6.11 Closing Balance Sheet and Income Statement,
ETS's Financial Managers' Report. . . . . . . . . . . . . . . . .38
6.12 Survey and Title Policy. . . . . . . . . . . . . . . . . . . . . .38
6.13 Approval by Mergerco Board of Directors
and Sole Stockholder. . . . . . . . . . . . . . . . . . . . . . .39
6.14 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . .39

ARTICLE 7

7.1 Representations and Warranties; Agreements . . . . . . . . . . . .42
7.2 Authorization of Merger; Consents. . . . . . . . . . . . . . . . .42
7.3 Approval of Hach Board of Directors. . . . . . . . . . . . . . . .43
7.4 Opinion of ETS's Counsel . . . . . . . . . . . . . . . . . . . . .43
7.5 Report of ETS's Financial Managers . . . . . . . . . . . . . . . .43
7.6 Absence of Litigation. . . . . . . . . . . . . . . . . . . . . . .43
7.7 Options, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . .43
7.8 Stockholder's Agreement and Escrow Agreement . . . . . . . . . . .44
7.9 Resignations . . . . . . . . . . . . . . . . . . . . . . . . . . .44
7.10 Employment Agreements for Key Employees. . . . . . . . . . . . . .44
7.11 Harry Stephenson Agreements. . . . . . . . . . . . . . . . . . . .44
7.12 Registration Statement . . . . . . . . . . . . . . . . . . . . . .44
7.13 Tax Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . . .44
7.14 Listing of Hach Common Stocks; Compliance with
State Blue Sky Laws . . . . . . . . . . . . . . . . . . . . . . .45

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7.15 Investment Letters . . . . . . . . . . . . . . . . . . . . . . . .45
7.16 Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . .45
7.17 No Adverse Changes . . . . . . . . . . . . . . . . . . . . . . . .45
7.18 Disposition of Certain ETS Agreements. . . . . . . . . . . . . . .45

ARTICLE 8

8.1 Representations and Warranties; Agreements . . . . . . . . . . . .46
8.2 Authorization of the Merger. . . . . . . . . . . . . . . . . . . .46
8.3 Stockholder Approvals. . . . . . . . . . . . . . . . . . . . . . .46
8.4 Opinion of Hach's Counsel. . . . . . . . . . . . . . . . . . . . .46
8.5 Absence of Litigation. . . . . . . . . . . . . . . . . . . . . . .46
8.6 Registration Statement . . . . . . . . . . . . . . . . . . . . . .47
8.7 Tax Opinion. . . . . . . . . . . . . . . . . . . . . . . . . . . .47
8.8 Listing of Hach Common Stocks; Compliance with
State Blue Sky Laws . . . . . . . . . . . . . . . . . . . . . . .47
8.9 Investment Letters . . . . . . . . . . . . . . . . . . . . . . . .47
8.10 Employment Agreements. . . . . . . . . . . . . . . . . . . . . . .47
8.11 Harry Stephenson Agreements. . . . . . . . . . . . . . . . . . . .48
8.12 Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . .48
8.13 Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . .48
8.14 No Adverse Change. . . . . . . . . . . . . . . . . . . . . . . . .48

ARTICLE 9

9.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . .48
9.2 Fees and Expenses. . . . . . . . . . . . . . . . . . . . . . . . .49
9.3 Procedure and Effect of Termination. . . . . . . . . . . . . . . .50

ARTICLE 10

10.1 Modification or Amendment. . . . . . . . . . . . . . . . . . . . .51
10.2 Waiver of Conditions; Investigation. . . . . . . . . . . . . . . .51
10.3 Payment of Expenses. . . . . . . . . . . . . . . . . . . . . . . .51
10.4 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
10.5 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
10.6 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
10.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
10.8 Complete Agreement . . . . . . . . . . . . . . . . . . . . . . . .53
10.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . .53
10.10 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . .53
10.11 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . .54
10.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . .54
10.13 Specific Performance . . . . . . . . . . . . . . . . . . . . . . .54
10.14 Third Party Beneficiaries. . . . . . . . . . . . . . . . . . . . .54
10.15 Certain Interpretive Matters and Definitions . . . . . . . . . . .54

iii

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ARTICLE 11

11.1 Indemnification by Surrendering Stockholders . . . . . . . . . . .58
11.2 Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
11.3 The Representative . . . . . . . . . . . . . . . . . . . . . . . .63
11.4 Effectiveness of Section 11.1. . . . . . . . . . . . . . . . . . .64
11.5 Sole and Exclusive Remedy. . . . . . . . . . . . . . . . . . . . .64

EXHIBITS

Exhibit A Stockholders' Agreement
Exhibit B Form of Escrow Agreement
Exhibit C 1997 and 1998 Capital Expenditure Budgets
Exhibit D 1997 and 1998 Operating Budgets
Exhibit E Form of Non-competition Agreement
Exhibit F Form of Consulting Agreement
Exhibit G Form of Lock-up Letter

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AGREEMENT AND PLAN OF MERGER

AGREEMENT AND PLAN OF MERGER, dated as of January 21, 1998 (the
"AGREEMENT"), among Hach Company, a Delaware corporation ("HACH"), Hach
Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Hach
("MERGERCO"), and Environmental Test Systems, Inc., an Indiana corporation
("ETS").

The Boards of Directors of Hach and ETS each believe it is desirable and
in the best interests of their respective stockholders that ETS merge into
Mergerco and the holders of the outstanding shares of Class A Common Stock, no
par value, of ETS ("ETS CLASS A COMMON STOCK"), receive the Class A Common
Merger Consideration (as hereinafter defined), and all the holders of the
outstanding shares of Class B Common Stock, no par value, of ETS (the "ETS CLASS
B COMMON STOCK", and together with the ETS Class A Common Stock, the "ETS COMMON
STOCKS"), receive the Class B Merger Consideration (as hereinafter defined),
pursuant to the terms and conditions of this Agreement which provides, among
other things, for the merger of ETS into Mergerco (the "MERGER"), and have
directed that this Agreement and the Merger be submitted to ETS' stockholders
for approval. It is understood by the parties hereto, that the aggregate merger
consideration to the holders of ETS Class A Common Stock and ETS Class B Common
Stock outstanding as of the Effective Time (as defined in SECTION 1.2 hereof)
shall not exceed Sixteen Million Dollars ($16,000,000). In connection with the
execution and delivery of this Agreement, Harry T. Stephenson, the owner of a
majority of the ETS Class B Common Stock, has executed and delivered the
Stockholder's Agreement attached as EXHIBIT A to this Agreement (the
"STOCKHOLDER'S AGREEMENT") pursuant to which among other things, he has granted
Hach an irrevocable proxy to vote his ETS Class B Common Stock for the approval
of the Merger.

Accordingly, in consideration of the premises and the representations,
warranties and agreements contained herein, the parties hereto hereby agree as
follows:

ARTICLE 1

MERGER OF ETS INTO MERGERCO

1.1 THE MERGER. At the Effective Time, subject to the terms and
conditions of this Agreement and in accordance with the General Corporation Law
of the State of Delaware (the "DELAWARE CORPORATION LAW") and the Indiana
Business Corporation Law (the "INDIANA CORPORATION LAW"), (i) ETS shall be
merged with and into Mergerco and the separate existence of ETS shall cease;
(ii) Mergerco shall continue as the surviving corporation (the "SURVIVING
CORPORATION") under the name "ENVIRONMENTAL TEST SYSTEMS, INC."; and (iii) the
Merger shall have the effects set forth herein and in Sections 259, 260 and 261
of the Delaware Corporation Law and Section 7 of Chapter 40 of the Indiana
Corporation Law.

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1.2 EFFECTIVE TIME OF MERGER. The Merger shall become effective at the
time which is the later to occur of (i) a Certificate of Merger with respect to
the Merger in a form satisfactory to Hach and ETS is filed with the Secretary of
State of the State of Delaware in accordance with the Delaware Corporation Law
and (ii) Articles of Merger with respect to the Merger are filed with the
Secretary of State of Indiana in accordance with the Indiana Corporation Law.
Such time is referred to herein as the "EFFECTIVE TIME." This Agreement can be
terminated by either party prior to the filing of either the Certificate of
Merger or the Articles of Merger in accordance with ARTICLE 9 hereof.

1.3 CERTIFICATE OF INCORPORATION; BY-LAWS. The Certificate of
Incorporation and By-Laws of Mergerco, as in effect immediately prior to the
Effective Time, shall become the Certificate of Incorporation and By-Laws of the
Surviving Corporation upon the Merger, except that effective as of the Effective
Time, Article First of the Certificate of Incorporation of Mergerco shall be
amended to read in its entirety as follows:

"The name of the corporation is Environmental Test Systems, Inc."

1.4 DIRECTORS AND OFFICERS. The Board of Directors of the Surviving
Corporation shall be those persons who constitute the Board of Directors of
Mergerco at the Effective Time. The principal officers of the Surviving
Corporation shall be those persons who are the principal officers of ETS at the
Effective Time except for Harry Stephenson who shall hold no office with the
Surviving Corporation. Each such director or officer shall hold office until
such person's respective successor has been duly elected or appointed or
qualified pursuant to the By-Laws of the Surviving Corporation or as otherwise
provided under applicable law.

1.5 TAKING OF NECESSARY ACTION; FURTHER ACTION. Hach, Mergerco and
ETS, respectively, shall take all such lawful action as may be necessary or
appropriate in order to effectuate the transactions contemplated by this
Agreement. If, at any time after the Effective Time, any further action is
necessary or desirable to carry out the purposes of this Agreement and to vest
the Surviving Corporation with full right, title and possession to all assets,
properties, rights, privileges, powers and franchises of Mergerco or ETS, the
officers and directors of the Surviving Corporation are fully authorized in the
name and on behalf of Mergerco and ETS or otherwise to take, and shall take all
such lawful and necessary action.

ARTICLE 2

CONVERSION AND EXCHANGE OF SHARES

2.1 CONVERSION OF SHARES. (a) At the Effective Time, by virtue of the
Merger and without any action on the part of Hach, Mergerco, ETS or the holder
of any of the following securities:

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(i) Each share of ETS Class A Common Stock issued and
outstanding immediately prior to the Effective Time, and subject to
SECTION 9.1(i) shall be converted into and become:

(A) a right to receive that number of shares of Hach
Common Stock, $1.00 par value ("HACH COMMON STOCK"), as shall have
on the Determination Date an aggregate value equal to $17.465651,
with the Hach Common Stock valued as calculated in accordance
with, and subject to, SECTION 2.1(c) (the "CLASS A BASE MERGER
CONSIDERATION");

(B) a right to receive on the third anniversary of the
Effective Time (the "ESCROW RELEASE DATE") or as soon thereafter
as possible in accordance with the Escrow Agreement in
substantially the form of the attached EXHIBIT B (the "ESCROW
AGREEMENT") to be executed and delivered at or prior to the
Closing by and among Hach, Harry Stephenson as Representative (as
defined in Section 11.3) of the Surrendering Stockholders (as
defined in Section 11.1(a)), and American National Bank and Trust
Company of Chicago, as escrow agent (the "ESCROW AGENT"), the
Additional Class A Merger Consideration (as defined below), if
any; and

(C) a right to receive from time to time after the
Escrow Release Date in accordance with the Escrow Agreement, the
Subsequent Class A Merger Consideration (as defined below), if any
(the Class A Base Merger Consideration, the Additional Class A
Merger Consideration and the Subsequent Class A Merger
Consideration are collectively referred to as the "CLASS A MERGER
CONSIDERATION").

(ii) Each share of ETS Class B Common Stock issued and
outstanding immediately prior to the Effective Time shall be converted
into and become:

(A) a right to receive per share (1) cash, (2) that
number of shares of Hach Common Stock and (3) that number of
shares of Hach Class A Common Stock, $1.00 par value ("HACH CLASS
A COMMON STOCK" and together with the Hach Common Stock the "HACH
COMMON STOCKS"), with each of the Hach Common Stocks valued as
calculated in accordance with, and subject to, SECTION 2.1(c), as
shall have on the Determination Date an aggregate value equal to
$14.749656 (the "CLASS B BASE MERGER CONSIDERATION");

(B) a right to receive on the Escrow Release Date or as
soon thereafter as possible in accordance with the Escrow
Agreement, the Additional Class B Merger Consideration (as defined
below), if any; and

(C) a right to receive from time to time after the
Escrow Release Date in accordance with the Escrow Agreement, the
Subsequent Class B Merger Consideration (as defined below), if any
(the Class B Base Merger Consideration,

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the Additional Class B Merger Consideration and the Subsequent
Class B Merger Consideration are collectively referred to as the
"CLASS B MERGER CONSIDERATION").

(iii) Hach shall have the right, in its sole discretion, to
determine the allocation of the components of the Class B Merger Consideration
to be delivered pursuant to Section 2.1(a)(ii) as between the Hach Common Stocks
and cash (as applicable); provided that in no event will Hach be permitted to
deliver cash which is less than $6,878,400 or greater than $7,343,875; and
provided further that the aggregate value of the Hach Common Stock and Hach
Class A Common Stock delivered as part of the Class B Merger Consideration shall
be equal.

(b) For purposes of this Agreement, the following terms shall
have the following meanings:

(i) The "ADDITIONAL CLASS A MERGER CONSIDERATION" shall
be (A) that number of shares of Hach Common Stock held in the
Class A Escrow Fund (as defined in the Escrow Agreement) on the
Escrow Release Date in excess of the number of shares of Hach
Common Stock held in the Class A Escrow Fund (valued in accordance
with the Escrow Agreement) allocated to the aggregate amount
("PENDING CLAIMS AMOUNT") of Damages (as hereinafter defined)
being asserted in respect of all Claims (as hereinafter defined)
which have been made by Hach or any other Hach Party (as
hereinafter defined) pursuant to the Escrow Agreement for which no
Determination (as defined in the Escrow Agreement) has been made
as of the Escrow Release Date ("PENDING CLAIMS") together with the
interest thereon as provided in the Escrow Agreement, divided by
(B) the number of ETS Class A Common Shares;

(ii) The "ADDITIONAL CLASS B MERGER CONSIDERATION" shall
be (A)(1) the amount of cash in the Class B Escrow Fund (as
defined in the Escrow Agreement) on the Escrow Release Date in
excess of the cash held in the Class B Escrow Fund allocated to
the Pending Claims Amount together with the interest thereon as
provided in the Escrow Agreement, divided by (2) the number of
ETS Class B Common Shares and (B)(1) that number of shares of Hach
Common Stocks held in the Class B Escrow Fund on the Escrow
Release Date in excess of the number of shares of Hach Common
Stocks held in the Class B Escrow Fund (valued in accordance with
the Escrow Agreement) allocated to the Pending Claims Amount
together with the interest thereon as provided in the Escrow
Agreement, divided by (2) the number of ETS Class B Common
Shares.

(iii) The "SUBSEQUENT CLASS A MERGER CONSIDERATION" shall
be, with respect to each Resolved Pending Claim Amount (as defined
below), (A) the number of shares of Hach Common Stock held in the
Class A Escrow Fund (valued in accordance with the Escrow
Agreement) equal to that Resolved Pending Claim Amount divided by
(B) the number of ETS Class A Common Shares.

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(iv) The "SUBSEQUENT CLASS B MERGER CONSIDERATION" shall
be, with respect to each Resolved Pending Claim Amount, (A) the
amount of cash and number of shares of Hach Common Stocks held in
the Class B Escrow Fund (valued in accordance with the Escrow
Agreement) equal to the Resolved Pending Claim Amount, in each
case divided by (B) the number of ETS Class B Common Shares.

(v) A "RESOLVED PENDING CLAIM AMOUNT" shall be an
amount, with respect to each Pending Claim which becomes the
subject of a Determination (a "RESOLVED PENDING CLAIM"), equal to
the amount, if any, by which (i) that portion of the Pending
Claims Amount which had been reserved for that Resolved Pending
Claim together with interest thereon as provided in the Escrow
Agreement, exceeds (ii) the amount of Damages paid to and/or at
the direction of a Hach Party in connection with the Determination
of that Resolved Pending Claim.

(c) For purposes of calculating the number of shares of Hach
Common Stocks to be distributed pursuant to the provisions of SECTIONS 2.1(a)(i)
AND (ii) of this Agreement the value of one share of each of such classes of
stock shall be deemed to be the average of the daily closing prices of one share
of such class of stock, as quoted on The National Association of Securities
Dealers Automated Quotations - National Market System ("NASDAQ"), for the 20
NASDAQ trading days immediately preceding and including the Determination Date;
provided that if there is no reported closing price of such shares of Hach
Common Stock or Hach Class A Common Stock, on NASDAQ for any such trading day,
the closing price for such day for such stock will be deemed to be the mean of
the closing bid and asked quotations on NASDAQ for that day for such stock (the
respective value for each class of stock being referred to as the "AVERAGE
MARKET PRICE"). The term "DETERMINATION DATE" shall mean the date which is five
(5) business days prior to the Effective Date or, if such date is not a NASDAQ
trading day, the NASDAQ trading day first immediately preceding such date. At
least two (2) business days prior to the Closing Date, Hach will calculate the
number of shares of Hach Common Stocks to be delivered pursuant to SECTIONS
2.1(a)(i) AND 2.1(a)(ii) (subject to SECTION 9.1(i)) in accordance with the
provisions of this SECTION 2.1(c) and Hach will deliver to ETS a certificate
signed by its Chief Financial Officer setting forth such share amounts and
providing all reasonable detail as to their calculation.

2.2 DISSENTING STOCKHOLDERS. (a) Shareholders of ETS who properly
exercise and perfect statutory dissenters' rights shall have the rights accorded
to dissenting shareholders under Chapter 44 of the Indiana Corporation Law, as
amended (the shares of ETS Common Stocks of such shareholders are collectively
referred to as the "DISSENTING SHARES").

(b) ETS shall give Hach (i) prompt notice upon receipt by ETS,
at any time prior to the Effective Time, of any notice of intent to demand
payment of the fair value of shares of ETS Common Stocks in accordance with
Section 11 of Chapter 44 of the Indiana Corporation Law and withdrawals of any
such notice and (ii) the opportunity to participate in all negotiations

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and proceedings with respect to demands for fair value under Chapter 44 of the
Indiana Corporation Law. ETS shall not, except with the prior written consent of
Hach, make any payment with respect to any demands for the fair value of shares
of ETS Common Stocks or offer to settle or settle any such demands.

2.3 EXCHANGE OF CERTIFICATE.

(a) Those stockholders of ETS surrendering their
certificates representing outstanding shares of ETS Common Stocks at the
Closing shall be entitled to receive at the Closing from Hach the Class A
Base Merger Consideration or the Class B Base Merger Consideration, as
the case may be, in cash or other immediately available funds, with
respect to any cash consideration, or evidenced by stock certificates,
with respect to any stock consideration; PROVIDED, HOWEVER, that shares
of Hach Common Stocks constituting the Escrow Deposit shall be placed in
escrow under, and pursuant to, the Escrow Agreement. If any stockholder
of ETS fails to surrender all of their certificates representing
outstanding shares of ETS Common Stocks at the Closing, such certificates
until so surrendered will be deemed for all corporate purposes of Hach to
evidence ownership of a right to receive without interest thereon the
Class A Merger Consideration or the Class B Merger Consideration, as the
case may be, which shall be payable in accordance with this Agreement and
the Escrow Agreement to such stockholder upon surrender to Hach of such
stockholder's certificates formerly representing shares of ETS Common
Stocks. No dividends or other distributions otherwise payable subsequent
to the Effective Time on shares of Hach Common Stocks shall be paid to
any former stockholder of ETS entitled to receive the same until such
stockholder has surrendered to Hach such stockholder's certificates
formerly representing shares of ETS Common Stocks. Upon surrender of
such certificates, such stockholder shall be entitled to receive the
consideration provided in the first sentence of this subsection and Hach
shall pay in cash to the record holder of the new certificate evidencing
shares of Hach Common Stocks the amount of all dividends and other
distributions, without interest thereon, withheld with respect to such
shares of Hach Common Stocks.

(b) At the Closing, Hach shall deliver the Escrow
Deposit (as defined in SECTION 11.1) to the Escrow Agent which will be
held by the Escrow Agent subject to the terms and conditions of the
Escrow Agreement to provide the source of funds for the payment of
Damages in accordance with ARTICLE 11 hereof and the Escrow Agreement.

(c) No fractional shares of Hach Common Stocks will be
issued, but all fractions shall be settled in cash based upon the Average
Market Price of Hach Common Stocks calculated in accordance with SECTION
2.1(c).

(d) If payment of the Class A Base Merger Consideration
or Class B Base Merger Consideration is to be made to a person other than
the registered holder of the certificate surrendered in exchange
therefor, it shall be a condition of such payment that the certificate so
surrendered shall be properly endorsed and otherwise in proper form for
transfer and that the person requesting such exchange pay to Hach any
transfer or other taxes required by reason of the payment to a person
other than the registered holder of the certificate

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surrendered or establish to the satisfaction of Hach that such tax has
been paid or is not payable.

ARTICLE 3

CLOSING

3.1 CLOSING. Hach, Mergerco and ETS shall regularly communicate and
consult with each other with respect to the fulfillment of the various
conditions to the obligations of the parties under this Agreement. The exchange
of certificates, opinions and other documents contemplated by this Agreement in
connection with the consummation of the Merger (the "CLOSING") shall take place
at the offices of McBride, Baker & Coles, 500 West Madison Street, 40th Floor,
Chicago, Illinois (i) as promptly as practicable (and in any case within one
(1) business day) following the ETS Shareholders' Meeting (as defined in SECTION
6.2) or (ii) at such other time and date as may be agreed to by the parties. The
date on which the Closing occurs is referred to herein as the "CLOSING DATE". In
the event that at the Closing no party exercises any right it may have to
terminate this Agreement and no condition to the obligations of the parties
exists that has not been satisfied or waived, the parties shall (i) deliver to
each other at the Closing the certificates, opinions and other documents
required to be delivered under ARTICLES 7 AND 8 hereof and (ii) at the Closing
or as soon thereafter as practicable cause the Merger to be consummated by
filing with the Secretary of State of the State of Delaware and the Secretary of
State of the State of Indiana a Certificate of Merger and Articles of Merger,
respectively, in such form as required by, and executed in accordance with, the
Delaware Corporation Law and the Indiana Corporation Law.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF ETS

ETS hereby represents and warrants to Hach and Mergerco as follows:

4.1 ORGANIZATION AND GOOD STANDING. Each of ETS and the ETS
Subsidiary (as defined below) is a corporation duly organized, validly existing
and is current in filing all reports required to be filed under the laws of its
state or jurisdiction of incorporation and has all requisite corporate power and
authority to own, lease, and operate its properties and to carry on its business
as now being conducted. Each of ETS and the ETS Subsidiary is duly qualified to
do business and is in good standing as a foreign corporation in any state or
jurisdiction where it has an office, owns property or has resident employees.
ETS has previously delivered to Hach complete and correct copies of its Articles
of Incorporation and all amendments thereto to the date hereof.

4.2 SUBSIDIARIES. ETS International, Inc. is the only Subsidiary of
ETS (the "ETS SUBSIDIARY"), and ETS has had no other Subsidiary since January 1,
1993. SCHEDULE 4.2 sets

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forth with respect to the ETS Subsidiary, its jurisdiction of incorporation,
capitalization, and equity ownership. As used herein, the term "SUBSIDIARY"
of any person shall mean any corporation or other person in which such
person, directly or indirectly, owns beneficially securities or interests
representing 20% or more of (i) the aggregate equity or profit interests or
(ii) the combined voting power or voting interests ordinarily entitled to
vote for management or otherwise. Except as set forth in SCHEDULE 4.2, all
the outstanding shares of capital stock of the ETS Subsidiary have been duly
authorized and validly issued, are fully paid and non-assessable, have not
been issued in violation of any preemptive rights or of any federal or state
securities law, and are owned by ETS of record and beneficially free and
clear of any security interest, pledge, lien, charge, claim, option, right to
acquire, restriction on transfer, or encumbrance of any nature whatsoever
("SECURITY INTEREST"). ETS does not own, directly or indirectly, any
ownership, equity, profits or voting interest in any corporation,
partnership, joint venture or other entity (other than the ETS Subsidiary),
and has no agreement or commitment to purchase any such interest. ETS has
previously delivered to Hach complete and correct copies of the charter and
By-laws (including comparable governing instruments with different names) of
the ETS Subsidiary, as amended and presently in effect.

4.3 CAPITALIZATION.

(a) The authorized capital stock of ETS consists of (i) 300,000
shares of Class A Common Stock, of which, as of the date hereof, and as of the
Effective Time, 231,304 shares will be issued and outstanding, and (ii)
1,000,000 shares of Class B Common Stock, of which, as of the date hereof, and,
as of the Effective Time, 692,228 shares will be issued and outstanding. As of
the date hereof, no shares of ETS Class A Common Stock or ETS Class B Common
Stock are held in the treasury of ETS and as of the Effective Time, none will be
held in treasury. All outstanding shares of ETS Class A Common Stock and ETS
Class B Common Stock are duly authorized and validly issued, fully paid and
non-assessable and not issued in violation of any preemptive rights or, to the
knowledge of ETS, of any Federal or state securities law. Except as set forth in
SCHEDULE 4.3(a), and except for this Agreement and the transaction contemplated
hereby, there is no security, option, warrant, right (including preemptive
rights), put, call, subscription, agreement, commitment, understanding or claim
of any nature whatsoever, fixed or contingent, that directly or indirectly
(i) calls for the acquisition, issuance, sale, pledge or other disposition of
any shares of capital stock of ETS or the ETS Subsidiary or any securities
convertible into, or other rights to acquire, any shares of capital stock of ETS
or the ETS Subsidiary; (ii) relates to the voting or control of such capital
stock, securities or rights; or (iii) obligates ETS or the ETS Subsidiary to
grant, offer or enter into any of the foregoing. Except as set forth in SCHEDULE
4.3(a), there are no voting agreements or voting trusts among or irrevocable
proxies executed by, or other stockholder agreements between or among, holders
of ETS Class A Common Stock and/or ETS Class B Common Stock. Except as set forth
in SCHEDULE 4.3(a), neither ETS nor the ETS Subsidiary has granted or agreed to
grant any registration rights, including piggyback registration rights, to any
person or entity. No request for the registration of any securities pursuant to
any outstanding registration right has been received by ETS or the ETS
Subsidiary which is outstanding, and ETS agrees to notify Hach promptly after
receipt of any such request.

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(b) SCHEDULE 4.3(b) contains a complete and correct list of the
record and beneficial ownership of ETS Common Stocks by each stockholder and
designating whether such stockholder is an "officer" or "director" of ETS and
the current mailing address of each such stockholder. Except as set forth in
SCHEDULE 4.3(b) each of the stockholders owns the respective number of shares of
ETS Class A Common Stock and ETS Class B Common Stock listed in SCHEDULE 4.3(b)
free and clear of any Security Interest. At the Effective Time, Harry Stephenson
will be the record and beneficial owner of 476,756 shares of ETS Class B Common
Stock free and clear of all Security Interests.

4.4 AUTHORITY; NONCONTRAVENTION.

(a) ETS has the requisite corporate power and authority to
execute and deliver this Agreement and all other agreements required to be
executed by it pursuant to the terms hereof, to perform its obligations
hereunder and to consummate the transactions contemplated by this Agreement,
subject to the approval of the stockholders of ETS in accordance with the
Indiana Corporation Law. The execution and delivery of this Agreement by ETS and
the consummation by ETS of the transactions contemplated hereby, have been duly
authorized by the unanimous approval of ETS's Board of Directors, and no other
corporate actions or proceedings on the part of ETS are necessary to authorize
this Agreement or to consummate the transactions contemplated by this Agreement,
except for the Requisite ETS Stockholder Approval (as defined in SECTION 8.3),
in accordance with the Indiana Corporation Law and the Articles of Incorporation
and By-Laws of ETS. This Agreement has been duly executed and delivered by ETS
and constitutes the legal, valid and binding obligation of ETS, enforceable
against ETS in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws relating to or
affecting the rights and remedies of creditors generally and by general
principles of equity.

(b) Except as set forth in SCHEDULE 4.4, the execution,
delivery and performance of this Agreement by ETS and the consummation by ETS of
the transactions contemplated hereby do not and will not:

(i) contravene any provisions of the Articles of
Incorporation or by-laws of ETS or the charter or by-laws (or similar
documents with different names) of the ETS Subsidiary;

(ii) conflict with, result in a breach of any provision
of, constitute a default under, result in the modification or
cancellation of, or give rise to any right of termination or acceleration
in respect of, with or without the passage of time and/or giving of
notice, any ETS Agreement (as defined in SECTION 4.15 hereof), or require
any consent or waiver of any party to any ETS Agreement or cause ETS or
the ETS Subsidiary to lose any rights to Intellectual Property (as such
term is defined in SECTION 4.12);

(iii) result in the creation of any Security Interest
upon, or any person obtaining any right to acquire, any properties,
assets, or rights of ETS or the ETS

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Subsidiary (as used herein, "assets" of a party shall include in each
instance, but not be limited to, Intellectual Property as hereafter
defined);

(iv) violate or conflict with any Legal Requirements or
result in the termination or material modification of any Permit (as such
terms are defined in SECTION 4.8 hereof) applicable to ETS or the ETS
Subsidiary or any of their respective businesses or properties except for
such violations and conflicts which would not, in the aggregate, have a
material adverse effect on ETS' or the ETS Subsidiary's ability to
perform their obligations hereunder; and

(v) require any authorization, consent, order, permit or
approval of, or notice to, or filing, registration or qualification with,
any governmental, administrative or judicial authority except in
connection with or in compliance with the Indiana Corporation Law, and
the laws of certain foreign jurisdictions under which a filing may be
required in connection with the Merger, and the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and the rules and regulations
promulgated thereunder ("HSR Act").

4.5 FINANCIAL STATEMENTS.

(a) ETS previously has furnished to Hach true and complete
copies of (i) the audited consolidated balance sheets of ETS and the ETS
Subsidiary as of December 31, 1996, 1995 and 1994, and the related audited
consolidated statements of income, shareholders' equity and cash flows for ETS
and the ETS Subsidiary for the years then ended, (ii) the unaudited consolidated
balance sheets of ETS and the ETS Subsidiary as of October 31, 1997 and October
31, 1996 and the related unaudited consolidated statements of income and cash
flows for the ten months ended October 31, 1997 and October 31, 1996 (the
foregoing audited and unaudited financial statements are collectively referred
to as the "FINANCIAL STATEMENTS"). The Financial Statements have been prepared
in accordance with generally accepted accounting principles ("GAAP")
consistently applied and present fairly the consolidated financial position of
ETS and the ETS Subsidiary as of the dates indicated and the results of their
operations and their cash flows for the periods indicated (except as may be
indicated in the notes thereto and except that financial statements included
with interim reports do not contain all GAAP notes to such financial statements)
and each fairly presented in all material respects the consolidated financial
position, results of operations and changes in shareholders' equity and cash
flows of ETS and the ETS Subsidiary as at the respective dates thereof and for
the respective periods indicated therein (subject, in the case of unaudited
statements, to normal and recurring year-end adjustments which were not and are
not expected to be, individually or in the aggregate, material to the business,
operations, results of operations, assets, liabilities or condition (financial
or otherwise) of ETS and the ETS Subsidiary, taken as a whole.

(b) As of October 31, 1997, the maximum liability to the
Corporation for Business Modernization and Technology ("CBMT") aggregates
$638,841 which liability is not reflected on the balance sheets of ETS and is
not payable by ETS except from future gross revenues from the Project described
in Footnote F to the Balance Sheet (as defined in Schedule 4.6) and then only to
the extent of a 6% royalty applicable to such future revenues.

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4.6 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth in
SCHEDULE 4.6, ETS and the ETS Subsidiary have no liabilities or obligations of
any nature (whether due or to become due, absolute, accrued, contingent or
otherwise, and whether or not determined or determinable) and to the knowledge
of the directors of ETS after due inquiry there is no existing condition,
situation or set of circumstances which could reasonably be expected to result
in such a liability, including, without limitation any unfunded obligation under
any employee benefit plan or arrangements except for (i) liabilities or
obligations reflected or reserved against in the consolidated balance sheet of
ETS and the ETS Subsidiary as of December 31, 1996 or specifically disclosed in
the notes thereto (the "BALANCE SHEET") and (ii) liabilities incurred in the
ordinary course of business and consistent with past practice since December 31,
1996 which individually and in the aggregate are not material to the business,
operations, results of operations, assets, liabilities, condition (financial or
otherwise) or prospects of ETS and the ETS Subsidiary. Neither ETS nor the ETS
Subsidiary is a party to any ETS Agreement, or subject to any charter or other
corporate restriction or any Legal Requirement, which has, or, to its knowledge,
in the future can reasonably be expected to have, a material adverse effect on
the business, operations, results of operations, assets, liabilities, condition
(financial or otherwise) or prospects of ETS and the ETS Subsidiary.

4.7 TAXES. Except as set forth in SCHEDULE 4.7, ETS and the ETS
Subsidiary has duly and timely filed all federal, state, local and foreign tax
returns, reports and declarations (hereafter "TAX RETURNS") required to be filed
and has paid, or made adequate provision for the payment of, all Taxes (as
defined below) which are due pursuant to said Tax Returns or pursuant to any
assessment received by ETS or the ETS Subsidiary. All such Tax Returns are true
and correct in all material respects. As used herein, "TAXES" shall mean all
taxes, fees, levies or other assessments, including but not limited to income,
excise, property, sales, value added, franchise, capital, net worth,
withholding, social security, and unemployment taxes imposed by the United
States, any state, county, local or foreign government, or any subdivision or
agency thereof, together with any interest, additions to tax, fines or penalties
relating to such taxes, charges, fees, levies, or other assessments. ETS files a
consolidated federal income tax return with the ETS Subsidiary. Except to the
extent reserves therefor are reflected on the Balance Sheet, neither ETS nor the
ETS Subsidiary is liable, or will become liable, for any Taxes for any period
commencing prior to December 31, 1996. The federal income tax returns of ETS and
the ETS Subsidiary have not been audited by the Internal Revenue Service except
as disclosed in Schedule 4.7. Neither ETS nor the ETS Subsidiary has given or
been requested to give any waiver or extension of any statutes of limitations
relating to the payment of Taxes. To the knowledge of ETS after due inquiry
there is no basis for a deficiency assessment for Taxes against ETS or the ETS
Subsidiary. ETS has heretofore furnished Hach with accurate and complete copies
of all Tax Returns filed by ETS and the ETS Subsidiary for the past five years
as well as all revenue, agent and other audit reports, assessments, protests and
similar documents received or submitted with respect to Taxes of ETS or the ETS
Subsidiary for the past five years.

4.8 LEGAL MATTERS. Except as set forth on SCHEDULE 4.8 hereto,
(i) there is no claim, action, suit, litigation, investigation, inquiry, review,
or proceeding pending against, or, to the knowledge of ETS or the ETS Subsidiary
after due inquiry, threatened against or affecting ETS, the ETS Subsidiary, any
ETS Plan (as defined in SECTION 4.17) or any of their respective

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properties or rights before or by any court, arbitrator, panel, agency or other
governmental, administrative or judicial authority and (ii) neither ETS nor the
ETS Subsidiary is subject to any judgment, decree, writ, injunction or order of
any governmental, administrative or judicial authority which (a) individually or
in the aggregate, would reasonably be expected to have a material adverse effect
on the business, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of ETS and the ETS Subsidiary taken as a
whole or (b) seeks to delay or prevent the consummation of the Merger. Except
as set forth in SCHEDULE 4.8, the businesses of ETS and the ETS Subsidiary are
being conducted in compliance in all material respects with all laws,
ordinances, codes, rules, regulations, standards, judgments, decrees, writs,
rulings, injunctions, orders and other requirements of all governmental,
administrative or judicial authorities (collectively, "LEGAL REQUIREMENTS")
applicable to ETS or the ETS Subsidiary or any of their respective businesses or
properties. ETS and the ETS Subsidiary hold, and are in compliance in all
material respects with all franchises, licenses, permits, registrations,
certificates, consents, approvals or authorizations (collectively, "PERMITS")
required by all applicable Legal Requirements. ETS and the ETS Subsidiary own or
hold all Permits material to the conduct of its business. No event has occurred
and is continuing which permits, or after notice or lapse of time or both would
permit, any modification or termination of any Permit. Except as set forth in
SCHEDULE 4.8, neither ETS nor the ETS Subsidiary (i) has received any notice
asserting any noncompliance with any Legal Requirement or Permit, (ii) is
subject to any Legal Requirement or Permit which if enforced against or complied
with by ETS or the ETS Subsidiary would have a material adverse effect on the
business, operations, results of operations, assets, liabilities, condition
(financial or otherwise) or prospects of ETS and the ETS Subsidiary, taken as a
whole, or (iii) has any knowledge of any Legal Requirement proposed or under
consideration which if effective, could have a material adverse effect on the
business, operations, results of operation, assets, liabilities, condition
(financial or otherwise) or prospects of ETS and the ETS Subsidiary, taken as a
whole. To the knowledge of ETS, no governmental, administrative or judicial
authority has indicated any intention to initiate any investigation, inquiry or
review involving ETS, the ETS Subsidiary, any ETS Plan or any of their
respective properties or rights.

4.9 PROPERTY. ETS and the ETS Subsidiary own or lease all assets and
properties (including the ETS Real Property) necessary to the conduct of their
respective businesses as presently conducted.

(a) Except as set forth in SCHEDULE 4.9(a) hereto, ETS owns
good and marketable title to all of its assets, free and clear of all Security
Interests (other than for taxes not yet due and payable). The machinery and
equipment and other tangible property included in such assets which are
necessary for the conduct of the business of ETS and the ETS Subsidiary as
currently conducted are in all material respects in good condition and repair,
normal wear and tear excepted, and all leases of personal property to which ETS
is a party are fully effective and afford ETS peaceful and undisturbed
possession of the subject matter of each such lease.

(b) Except as set forth in SCHEDULE 4.9(b), all real property
owned in fee by ETS or the ETS Subsidiary is listed and described on SCHEDULE
4.9(b) and title to such property, together with all appurtenant easements
thereunto and all structures, fixtures, and improvements located thereon (the
"REAL PROPERTY"), is, and at Closing shall be, good and marketable, fee

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simple absolute, free and clear of all Security Interests, adverse claims, and
other matters affecting title to or possession of such ETS Real Property,
including, all encroachments, boundary disputes, covenants, restrictions,
easements, rights of way, mortgages, liens, leases, encumbrances, and title
objections (other than for taxes not yet due and payable). At Closing, title to
the Real Property shall be insurable by First American Title Company,
Indianapolis, Indiana at such company's regular rates, free of all exceptions
except the aforesaid easements, restrictions, and covenants and such other
exceptions as are not objectionable to Hach. ETS has delivered to Hach true,
correct and complete copies of all policies of title insurance and any surveys
in the possession of ETS or the ETS Subsidiary for the ETS Real Property.

(c) Neither ETS nor the ETS Subsidiary is a party to any lease,
sublease or other agreement under which ETS or the ETS Subsidiary uses or
occupies or has the right to use or occupy, now or in the future, any real
property.

(d) To its knowledge after due inquiry, ETS is not in violation
of any zoning, building, safety or environmental ordinance regulation or
requirement or other law or regulation applicable to the operation of owned or
leased properties (the violation of which would have a material adverse effect
on the business, operations, results of operations, assets, liabilities,
condition (financial or otherwise) or prospects of ETS and the ETS Subsidiary,
taken as a whole), and ETS has not received any notice of such violation with
which it has not complied or had waived.

4.10 INVENTORIES. The values at which inventories are carried on the
Balance Sheet reflect the normal inventory valuation policies of ETS, and such
values are in conformity with GAAP consistently applied. All inventories
reflected on the Balance Sheet or arising since the date thereof are in good and
usable or currently marketable condition and can reasonably be anticipated to be
used, consumed or sold at normal mark-ups within 120 days after the date hereof
in the ordinary course of business (subject to the reserve for obsolete,
off-grade or slow-moving items that is set forth on the Balance Sheet or as set
forth on SCHEDULE 4.10).

4.11 ACCOUNTS RECEIVABLE; RETURNS.

(a) All accounts receivable reflected on the Balance Sheet or
arising since the date thereof are good and have been collected or are
collectible, without resort to litigation or extraordinary collection activity,
within 90 days after the Closing Date (subject to the reserve for bad debts
reflected on the Balance Sheet or except as set forth on SCHEDULE 4.11(a)), and
are subject to no defenses, set-offs or counterclaims other than normal cash
discounts accrued in the ordinary course of business of ETS and the ETS
Subsidiary. Set forth on SCHEDULE 4.11(a) hereto is a list of all accounts
receivable of ETS and the ETS Subsidiary as of August 31, 1997 showing
separately those receivables which as of such date have been outstanding (i) 1
to 29 days, (ii) 30 to 59 days, (iii) 60 to 89 days, (iv) 90 to 119 days and (v)
more than 119 days.

(b) SCHEDULE 4.11(b) sets forth a complete description of the
policy of ETS and the ETS Subsidiary regarding product returns and revenue
recognition.

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4.12 INTELLECTUAL PROPERTY.

(a) SCHEDULE 4.12 contains a complete list and description by
category and indication of status (owned, licensed, completed or in process) of
the following items which are owned, licensed by, licensed to, used or held for
use in or necessary for the conduct of the business of ETS or the ETS Subsidiary
as such business is presently, and contemplated to be, conducted or as to which
ETS or the ETS Subsidiary has a contractual right to an assignment: (i) all
issued patents and pending patent applications (the "PATENTS"); (ii) all
registered and unregistered trademarks, service marks, logos, trade names and
all applications to register the same (the "TRADEMARKS"); (iii) all registered
and unregistered copyrights, and all applications to register the same (the
"COPYRIGHTS"); (iv) all software and databases owned or used by ETS or under
development for ETS (the "SOFTWARE"); and (v) all licenses and agreements
pursuant to which ETS has acquired rights in or to the Trademarks, Patents,
Copyrights or Software (the "LICENSES"). Except as set forth in SCHEDULE 4.12:
the rights of ETS in and to the Trademarks, the Patents, the Copyrights, the
Software, the Licenses, and the trade secrets, know-how, inventions, processes,
procedures and proprietary information owned or used or held for use by ETS or
the ETS Subsidiary (the "TECHNOLOGY") (collectively, the "INTELLECTUAL
PROPERTY") are owned outright by ETS free and clear of any Security Interests,
restrictions or limitations; and all of ETS's rights in and to the Intellectual
Property are freely assignable in its own name, including the right to create
derivatives. Except as set forth in SCHEDULE 4.12(a)(v), neither ETS nor the ETS
Subsidiary is under any obligation to pay any royalty or other compensation to
any third party or to obtain any approval or consent for use of any of the
Intellectual Property. To the knowledge of ETS, no person uses, or has the
right to use, the name "Environmental Test Systems" or any derivation thereof in
connection with the manufacture, sale, marketing or distribution of products and
services commonly associated with ETS and the ETS Subsidiary.

(b) The Intellectual Property covers all patents, trademarks,
trade names, service marks, copyrights and publicity rights, which are necessary
to operate the business of ETS and the ETS Subsidiary as it is presently being,
and contemplated to be, conducted. ETS has delivered to Hach copies of all
copyright and trademark registration certificates, all letters patents, and all
applications therefor and all administrative correspondence with respect
thereto.

(c) Except as set forth in SCHEDULE 4.8, no Intellectual
Property or Software used by either ETS or the ETS Subsidiary and no process,
Software, product or service practiced, offered, licensed by, sold or under
development by either ETS or the ETS Subsidiary infringes any trademark, trade
name, copyright, trade secret, patent, right of publicity, right of privacy or
other proprietary right of any person or would give rise to an obligation to
render an accounting to any person as a result of co-authorship, co-invention or
an express or implied contract for any use or transfer and neither ETS nor the
ETS Subsidiary has received notice of any threatened claim or suit or action
filed asserting any such infringement or asserting that ETS or the ETS
Subsidiary does not have the legal right to own, enforce, sell, license, lease
or otherwise use any such Intellectual Property, product or service and neither
ETS nor the ETS Subsidiary knows of any facts which should give it reason to
believe that there exists any reasonable basis for any such claim or that any
such claim may be asserted in the future based on the issuance of a patent upon
any patent application it knows or has reason to believe is pending. Neither ETS
nor the ETS

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Subsidiary has sent or otherwise communicated to any other person any notice,
charge, claim or assertion of, nor have they any knowledge of, any present,
impending or threatened infringement by such other person of any Intellectual
Property, by such other person. ETS and the ETS Subsidiary has the right to use
the Intellectual Property, to provide, sell and produce the services and
products provided, sold and produced by them, and to conduct its business as
heretofore conducted, and the consummation of the transactions contemplated
hereby will not alter or impair any such rights.

4.13 ABSENCE OF MATERIAL ADVERSE EFFECT; CONDUCT OF BUSINESS. Except
as set forth in SCHEDULE 4.13, since December 31, 1996, there has been no change
in or effect on ETS or the ETS Subsidiary and, to the knowledge of ETS, there is
no condition, development or contingency of any kind existing or in prospect
which, so far as reasonably can be foreseen at this time, may result in any
material adverse effect on the business, assets, liabilities, operations,
results of operations or condition (financial or otherwise) or prospects of ETS
and the ETS Subsidiary. Without limiting the foregoing, except as set forth on
SCHEDULE 4.13 hereto, since December 31, 1996 there has not been, occurred or
arisen:

(a) any damage, destruction or loss to any asset of ETS or the
ETS Subsidiary (whether or not covered by insurance) that, individually
or in the aggregate, would have a material adverse effect on the
business, assets, including, liabilities, results of operations,
operations, condition (financial or otherwise) or prospects of ETS and
the ETS Subsidiary;

(b) any change in any accounting principle or method used for
financial reporting purposes by ETS or the ETS Subsidiary;

(c) any commitment (including commitments for additions to
property, equipment or intangible capital assets), transaction or other
action by ETS or the ETS Subsidiary, including, without limitation, any
discharge or satisfaction of any obligation or liability or amendment,
termination or waiver of any claim or right of value, other than in the
ordinary course of business and consistent with past practice;

(d) any amendment or other change to the Articles of
Incorporation or By-Laws of ETS, or the charter or by-laws (or similar
organizational documents with different names) of the ETS Subsidiary;

(e) any declaration, setting aside, or payment of any dividend
or distribution (whether in cash, stock or property or any combination
thereof) in respect of capital stock of ETS or the ETS Subsidiary, or any
direct or indirect redemption, purchase, or other acquisition of shares
of such capital stock or any split, combination or reclassification of
such capital stock;

(f) any sale or other disposition of any right, title or
interest in or to any assets or properties of ETS or the ETS Subsidiary
or any revenues derived therefrom other than in the ordinary course of
business and consistent with past practice;

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(g) except as disclosed on SCHEDULE 4.17, any general increase
in any compensation or benefits payable to any class or group of
employees of ETS or the ETS Subsidiary, any increase in the compensation
payable or committed to become payable by ETS or the ETS Subsidiary to
any of the individuals listed on SCHEDULE 7.10 hereto (collectively, "KEY
EMPLOYEES") or any bonus, service award, percentage compensation, or
other benefit paid, granted or accrued to or for the benefit of any Key
Employee other than in accordance with an ETS Plan or Compensation
Commitment expressly disclosed on SCHEDULE 4.17 hereto as in effect on
the date hereof;

(h) any borrowing by ETS or the ETS Subsidiary;

(i) any capital expenditures (including any expenditures for
property, plant or equipment) except to the extent of the total amounts
and, to the extent indicated therein, at the times set forth in ETS's
1997 capital expenditure budget and 1998 capital expenditure budget which
are attached hereto as EXHIBIT C (together the "1997 AND 1998 CAPITAL
EXPENDITURE BUDGETS");

(j) any agreement, understanding or transaction for the
acquisition of the business (whether by merger, consolidation,
acquisition of stock or assets, or otherwise) of any corporation, joint
venture, partnership or other entity;

(k) any guarantee of any indebtedness for borrowed money or any
guarantee of any other obligation of any person or entity, in any case,
except in the ordinary course of business and consistent with past
practice;

(l) any write-off as uncollectible of any notes or accounts
receivable except for immaterial write-offs in the ordinary course of
business and consistent with past practice;

(m) any license, sale, transfer, grant of a Security Interest,
disposition, or acquisition of any right, title or interest in or to
Intellectual Property; and

(n) any authorization, approval, agreement or commitment to do
any of the foregoing.

4.14 INSURANCE. All of the properties and assets of ETS and the ETS
Subsidiary which are of an insurable character are insured against loss or
damage by fire and other risks to the extent and in the manner customary for
companies engaged in similar businesses or owning similar assets. Set forth on
SCHEDULE 4.14 hereto is a list of all insurance policies held by ETS or the ETS
Subsidiary (including, without limitation, errors and omissions insurance) and
ETS previously has furnished or made available to Hach true and complete copies
of all such policies. All such policies (i) are in full force and effect; (ii)
are, to ETS's knowledge after due inquiry, valid, binding and enforceable; (iii)
will not be modified or terminated or lapse by reason of the Merger (except as
set forth in SCHEDULE 4.14); and (iv) neither ETS nor the ETS Subsidiary has
received any notice of cancellation with respect thereto. ETS or the ETS
Subsidiary have not failed to give any

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notice of any claim under any Insurance Policy in due and timely fashion, nor to
the knowledge of ETS, has any coverage for claims been denied, which failure or
denial has had or would have a material adverse effect on the business,
operations, results of operations, assets, liabilities, condition (financial or
otherwise) or prospects of ETS and the ETS Subsidiary, taken as a whole.

4.15 CONTRACTS; ETC.. As used in this Agreement, the Term "ETS
AGREEMENTS" shall mean all mortgages, indentures, notes, agreements, contracts,
leases, licenses, franchises, obligations, instruments or other commitments,
arrangements or understandings of any kind, whether written or oral, whether or
not considered by ETS to be binding or non-binding (including all leases and
other agreements referred to on SCHEDULE 4.9 hereto) to which ETS or the ETS
Subsidiary is a party or by which ETS or the ETS Subsidiary or any of their
respective properties may be bound or affected. Except as listed in SCHEDULES
4.3(a), 4.12, 4.14 and 4.17, and except for the Stockholder's Agreement and
Escrow Agreement, set forth on SCHEDULE 4.15 hereto is a complete and accurate
list (as of the most recent practicable date prior to the date this
representation is being made) of each ETS Agreement material to the businesses,
operations, results of operations, assets, liabilities, condition (financial or
otherwise) or prospects of ETS and the ETS Subsidiary taken as a whole (other
than (a) individual purchase orders entered into in the ordinary course of
business for less than $25,000, (b) individual sales orders received in the
ordinary course of business for less than $25,000, and (c) such other contracts
that involve less than $25,000 over the term of such agreement and have a term
or remaining term of less than one year or are cancelable within one year),
including each of the following ETS Agreements:

(i) any mortgage, indenture, note, installment obligation or
other instrument, agreement or arrangement for or relating to any
borrowing of money by ETS or the ETS Subsidiary;

(ii) any guaranty, direct or indirect, by ETS or the ETS
Subsidiary of any obligation for borrowings or otherwise, excluding
endorsements made for collection in the ordinary course of business;

(iii) any ETS Agreement made other than in the ordinary course of
its business or providing for the grant of any preferential rights to
purchase or lease any of its assets;

(iv) any obligation to register any shares of capital stock of
ETS or the ETS Subsidiary or other securities with the Securities and
Exchange Commission or otherwise relating to such stock or other
securities;

(v) any obligation to make payments, contingent or otherwise,
arising out of the prior acquisition of the business, assets or stock of
other companies;

(vi) any collective bargaining agreement with any labor union;

(vii) any lease or similar arrangement for the use by ETS or the
ETS Subsidiary of personal property;

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(viii) any ETS Agreement to which any Insider (as defined in
SECTION 4.18 hereof) is a party;

(ix) any product development or licensing contracts;

(x) any ETS Agreement containing non-competition or other
limitations restricting the conduct of the business of ETS or the ETS
Subsidiary;

(xi) any partnership, joint venture or similar agreement;

(xii) any ETS Agreement with a term in excess of one (1) year and
providing for payments of $25,000 over the term of such agreement;

(xiii) any confidentiality agreements, independent contractor
agreements and assignments of rights to Intellectual Property; and

(xiv) any agreements or arrangement with other equipment
manufacturers (OEM) for the manufacture of products for sale by ETS under
ETS' label or the manufacture by ETS of ETS' products for sale by such
manufacturer under its label.

True and complete copies of all written ETS Agreements referred to on SCHEDULE
4.3(a), SCHEDULE 4.3(b), SCHEDULE 4.12, SCHEDULE 4.14, SCHEDULE 4.15 and
SCHEDULE 4.17 hereto have heretofore been delivered or made available to Hach,
and ETS has provided Hach with accurate written summaries of all such ETS
Agreements which are unwritten. Except as set forth in SCHEDULE 4.15, neither
ETS nor the ETS Subsidiary nor, to the knowledge of ETS after due inquiry, any
other party thereto is in breach of or default under any ETS Agreement, and to
the knowledge of ETS after due inquiry no event has occurred which (after notice
or lapse of time or both) would become a breach or default under, or would
permit modification, cancellation, acceleration or termination of, any ETS
Agreement or result in the creation of any Security Interest upon, or any person
obtaining any right to acquire, any properties, assets or rights of ETS or the
ETS Subsidiary. Except as disclosed in SCHEDULE 4.15, there are no unresolved
disputes involving ETS or the ETS Subsidiary under any ETS Agreement.

4.16 LABOR RELATIONS. As of October 31, 1997, ETS and the ETS
Subsidiary employed a total of 79 full-time employees and no temporary employees
and, as of the date hereof, except as set forth on SCHEDULE 4.16, (a) neither
ETS nor the ETS Subsidiary is delinquent in the payment (i) to or on behalf of
any past or present employees of any wages, salaries, commissions, bonuses,
benefit plan contributions or other compensation for all periods prior to the
date hereof or the Effective Time, as the case may be, (ii) of any amount which
is due and payable to any state or state fund pursuant to any workers'
compensation statute, rule or regulation or any amount which is due and payable
to any workers' compensation claimant or any other party arising under or with
respect to a claim that has been filed under state statutes and approved in the
ordinary course in accordance with ETS's policies regarding workers'
compensation and/or any applicable statute or administrative procedure;
(b) there is no unfair labor practice charge or complaint against ETS or the ETS
Subsidiary pending before the National Labor Relations Board or other

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Governmental Entity, and, to the knowledge of ETS, none is threatened; (c) there
is no labor strike, dispute, slowdown or stoppage actually in progress or, to
the knowledge of ETS, threatened against ETS or the ETS Subsidiary; (d) there
are no union or collective bargaining agreements in effect, and there are no
union organizational drives in progress and there has been no formal or informal
request to ETS or the ETS Subsidiary for collective bargaining or for an
employee election from any union or from the National Labor Relations Board;
(e) no union representation or jurisdictional dispute or question exists
respecting the employees of ETS or the ETS Subsidiary; and (f) no grievance or
arbitration proceedings are pending and no claim therefor has been asserted
against ETS or the ETS Subsidiary. Set forth on SCHEDULE 4.16 is the form of
confidentiality agreement signed by each employee of ETS or the ETS Subsidiary
who has access to Technology. Except as set forth on SCHEDULE 4.16, ETS has
complied with all of the requirements of the Immigration Reform and Control Act
of 1986, including without limitation completed and maintained all I-9 Forms.

4.17 EMPLOYEE COMPENSATION.

(a) Set forth on SCHEDULE 4.17 hereto is a true and complete
list of:

(i) each pension, profit-sharing, thrift, deferred
compensation, stock ownership, stock purchase, stock option, performance,
bonus, incentive, retirement, severance, welfare, hospitalization or
other medical, dental, disability, life or other insurance, or other
employee benefit plan, trust or arrangement of any kind, whether written
or oral, whether or not considered by ETS to be binding or non-binding
(including, but not limited to any such plan within the meaning of
Section 3 of the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder ("ERISA")),
which ETS or the ETS Subsidiary maintains or has maintained, has or ever
had in effect or is or ever was required to make contributions to
(collectively, "ETS PLANS");

(ii) each agreement, arrangement, commitment and
understanding of any kind, whether written or oral, whether or not
considered by ETS to be binding or non-binding, with any current or
former officer, director, employee or consultant of ETS or the ETS
Subsidiary or with any such consultant's employees pursuant to which
payments may be required to be made at any time following the date hereof
(including, without limitation, any employment, deferred compensation,
severance, termination and consulting agreements);

(iii) any other plan, agreement, arrangement, policy or
understanding, whether written or oral, whether or not considered by ETS
to be binding or non-binding, relating to any other compensation,
remuneration or benefits of any nature whatsoever (including, without
limitation, bonuses, incentives, vacation pay, holiday pay, insurance,
severance or retirement), in which any current or former officer,
director or employee of ETS or the ETS Subsidiary participates or has
participated since December 31, 1994 (all of the foregoing in clauses
(ii) and (iii) being referred to herein collectively as "COMPENSATION
COMMITMENTS"); or

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(iv) any loans between ETS and any current or former
officer, director, employee or consultant ("ETS LOANS").

True and complete copies of all written ETS Plans and Compensation Commitments
referred to in SCHEDULE 4.17 (including all documents governing obligations, and
the most recent valuation or actuarial reports, annual reports and determination
letters relating to any ERISA Plans (as defined below)), have heretofore been
delivered to Hach, and ETS has provided Hach with accurate written summaries of
all such ETS Plans and Compensation Commitments which are unwritten; provided,
that, as to customary, unwritten arrangements for payment of wages, ETS has
provided Hach a listing of all employees by position and current rate of pay
only. Neither ETS nor the ETS Subsidiary has made any express commitment or has
any formal plan, whether considered by ETS to be legally binding, or not, to
create any additional ETS Plan or Compensation Commitment or to modify or change
in any material respect any existing ETS Plan or Compensation Commitment, except
as described on SCHEDULE 4.17 hereto.

(b) With respect to the ETS Plans and Compensation Commitments
and Employee Loans:

(i) Neither the execution nor delivery of this
Agreement, nor the consummation of the transactions contemplated by this
Agrement,will, in and of itself, result in (A) an event of default under
any ETS Plan or Compensation Commitment; (B) a payment, restriction or
limitation upon the assets of any ETS Plan or Compensation Commitment, or
(C) acceleration of payment or vesting, increase in benefits or
compensation or required funding, with respect to any ETS Plan or
Compensation Commitment, or the forgiveness of any Employee Loan;

(ii) No compensation payable by ETS to any of its
employees, officers, or directors under any ETS Plan or Compensation
Commitment will be subject to disallowance under Section 162(m) of the
Code;

(iii) No employee and no beneficiary or dependent of any
employee is or may become entitled under any ETS Plan (other than the
distribution of benefits to eligible employees and beneficiaries under
the current terms of the ETS 401(k) Plan and the ETS ESOP) or
Compensation Commitment to post-employment benefits of any kind,
including without limitation, death or medical benefits, other than
continuation health care coverage required by Section 4980B of the Code;
and

(iv) All liabilities and obligations of ETS with respect
to each and every ETS Plan and Compensation Commitment as of the Closing
Date have been paid in full or accrued and reflected on the Financial
Statements.

(c) SCHEDULE 4.17 hereto indicates each ETS Plan which is an
"EMPLOYEE PENSION BENEFIT PLAN" or an "EMPLOYEE WELFARE BENEFIT PLAN" (as such
terms are defined in

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Section 3(3) of ERISA) maintained or contributed to by ETS or the ETS Subsidiary
(collectively, the "ERISA PLANS"). Except as set forth on SCHEDULE 4.17:

(i) each of the ERISA Plans (1) is currently in material
compliance, to the extent currently required to be in compliance, with
all applicable federal laws, including but not limited to ERISA, and the
Internal Revenue Code of 1986, as amended (the "CODE"), and (2) has been
administered in material compliance with the terms of such Plan and with
all applicable federal and state laws, including but not limited to ERISA
and the Code;

(ii) except as identified in SCHEDULE 4.17, none of the
ERISA Plans ever maintained by ETS or the ETS Subsidiary is or was ever
intended to be "QUALIFIED" within the meaning of Section 401(a) of the
Code;

(iii) none of the ERISA Plans is or has been a
"MULTIEMPLOYER PLAN" (as that term is defined in Section 3(37) of ERISA,
"MULTIEMPLOYER PLAN") and neither ETS nor the ETS Subsidiary has ever
contributed to or participated in a Multiemployer Plan;

(iv) neither ETS nor the ETS Subsidiary, nor any of the
ERISA Plans, nor any trust created thereunder, nor any trustee or
administrator thereof, has engaged in a transaction involving an ERISA
Plan in connection with which ETS or the ETS Subsidiary would be subject
to either a civil penalty assessed pursuant to Section 502(i) of ERISA,
or a tax imposed by Section 4975 of the Code.

(d) With respect to all group health plans (as such term is
defined in Section 5000(b)(1) of the Code, "GROUP HEALTH PLANS") maintained by
ETS or the ETS Subsidiary, ETS or such Subsidiary complied with the continuation
health care coverage requirements of Section 4980B of the Code and Sections 601
through 608 of ERISA (collectively, the "CONTINUATION COVERAGE REQUIREMENTS")
for all qualifying events within the meaning of Section 4980B(f)(3) of the Code
and Section 603 of ERISA ("QUALIFYING EVENTS"), affecting any current or former
employee of ETS or such Subsidiary and any qualified beneficiary related to such
employee or former employee (as defined in Section 4980B(g)(1) of the Code and
Section 607(3) of ERISA, "QUALIFIED BENEFICIARY"). Except as set forth on
SCHEDULE 4.17, there are no current or former employees of ETS or the ETS
Subsidiary or any Qualified Beneficiary related to any such employee or former
employee receiving or eligible to receive continued health care pursuant to the
Continuation Coverage Requirements.

4.18 TRANSACTIONS WITH INSIDERS. Set forth on SCHEDULE 4.18 hereto is
a complete and accurate list of (i) all ETS Agreements to which any Insider (as
defined below) is a party and (ii) a complete and accurate description of all
transactions between ETS, the ETS Subsidiary or any ETS Plan, on one hand, and
any Insider, on the other hand, that have occurred since January 1, 1994. For
purposes of this Agreement:

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(w) the term "INSIDER" shall mean Harry Stephenson and any
stockholder, any director or officer of ETS or the ETS Subsidiary, and
any Affiliate, Associate or Relative of any of the foregoing persons,

(x) an "AFFILIATE" of a specified person is a person that
directly or indirectly, through one or more intermediaries, controls, or
is controlled by, or is under common control with, the person specified,

(y) an "ASSOCIATE" of a specified person means (i) a
corporation or other organization other than ETS or the ETS Subsidiary of
which such person is an officer or partner or is, directly or indirectly,
the beneficial owner of 10% or more of any class of equity securities,
(ii) any trust or other estate in which such person has a substantial
beneficial interest or as to which such person serves as trustee or in a
similar capacity, and (iii) any Relative of such person who has the same
home as such person or who is a director or officer of ETS or the ETS
Subsidiary,

(z) a "RELATIVE" of a person shall mean such person's spouse,
such person's parents, sisters, brothers, children and the spouses of the
foregoing, and any member of the immediate household of such person.

4.19 ENVIRONMENTAL MATTERS. Except as set forth in SCHEDULE 4.19:

(a) the operations of ETS and the ETS Subsidiary are in
material compliance with all applicable Environmental Laws;

(b) ETS and the ETS Subsidiary have obtained and currently
maintain all Environmental Permits;

(c) there are no judicial or administrative actions,
proceedings, or investigations pending or, to the knowledge of ETS, threatened
against ETS or the ETS Subsidiary alleging the violation of, or liability
pursuant to, any Environmental Law or Environmental Permit;

(d) neither ETS nor the ETS Subsidiary, nor to ETS's knowledge,
any predecessor of ETS or the ETS Subsidiary, has filed any notice under any
Environmental Law indicating past or present treatment, storage, or disposal of
or reporting of a Release or threatened Release of Hazardous Material into the
environment;

(e) neither ETS nor the ETS Subsidiary, nor to the knowledge of
ETS, any of its past or current facilities and operations, or, to ETS's
knowledge, any predecessor of ETS or the ETS Subsidiary, is subject to any
outstanding written order, injunction, judgment, decree, ruling, assessment, or
arbitration award of any agreement with any Governmental Entity or other person
relating to Environmental Laws or the Release of Hazardous Materials;

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(f) there is not now, nor, to the knowledge of ETS, has there
been in the past, on, in, or under the Real Property or any other real property
currently or formerly owned, leased, or operated by ETS or the ETS Subsidiary or
any of its predecessors (i) any underground storage tanks, above-ground storage
tanks, dikes, or impoundments containing Hazardous Materials, (ii) any
asbestos-containing materials, (iii) any polychlorinated biphenyls, or (iv) any
radioactive substances; and

(g) neither ETS nor the ETS Subsidiary is subject to
Environmental Costs and Liabilities with respect to Hazardous Materials, and no
facts or circumstances exist that could reasonably be likely to result in ETS or
the ETS Subsidiary incurring Environmental Costs and Liabilities in excess of
$10,000 individually or $25,000 in the aggregate.

(h) For purposes of the foregoing SECTION 4.19:

"ENVIRONMENTAL COSTS AND LIABILITIES" shall mean any and all
losses, liabilities, obligations, damages, fines, penalties, judgments,
actions, claims, costs and expenses (including fees, disbursements, and
expenses of legal counsel, experts, engineers, and consultants and the
costs of investigation and feasibility studies, remedial or removal
actions, and cleanup activities) arising from or under any Environmental
Law or Environmental Claim or any order or agreement now in effect with
any Governmental Entity or other person.

"ENVIRONMENTAL LAW" means any applicable federal, state, local or
foreign law (including common law), statute, code, ordinance, rule,
regulation or other requirement relating to the environment, natural
resources, or public and employee health and safety and includes, the
Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. Section 9601, ET SEQ., the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801, ET SEQ., the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901, ET SEQ., the Clean Water Act, 33
U.S.C. Section 1251 ET SEQ., the Clean Air Act, 33 U.S.C. Section 2601,
ET SEQ., the Toxic Substances Control Act, 15 U.S.C. Section 2601, ET
SEQ., the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
Section 136, ET SEQ., the Oil Pollution Act of 1990, 33 U.S.C. Section
2701, ET SEQ., the Federal Safe Drinking Water Act, 42 U.S.C. Section
300F, ET SEQ., and the Occupational Safety and Health Act, 29 U.S.C.
Section 651, ET SEQ., as such laws have been amended or supplemented,
and the regulations promulgated pursuant thereto, and all analogous state
or local statutes.

"ENVIRONMENTAL PERMIT" means any permit, approval, authorization,
license, variance, registration, or permission required of ETS or the ETS
Subsidiary under any applicable Environmental Law.

"HAZARDOUS MATERIAL" means any substance, material, or waste which
is regulated by any Governmental Entity, including, any material,
substance or waste which is defined as a "hazardous waste," "hazardous
material," "hazardous substance," "extremely hazardous substance,"
"restricted hazardous waste," "contaminant," "toxic waste," or "toxic
substance" under any provision of Environmental Law, which includes,

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petroleum, petroleum products (including crude oil and any fraction
thereof), asbestos, asbestos-containing materials, urea formaldehyde, and
polychlorinated biphenyls.

"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, dumping, emptying, injection, deposit, disposal, discharge,
dispersal, leaching, or migration on or into the indoor or outdoor
environment or into or out of any property.

4.20 ETS PRODUCTS; REGULATION. Except as disclosed in SCHEDULE 4.20,
(a) there have been no written notices, citations or decisions by any
Governmental Authority that any product produced, manufactured, marketed or
distributed at any time by ETS or the ETS Subsidiary (the "ETS PRODUCTS") is
defective or fails to meet any applicable standards promulgated by any such
Governmental Authority; (b) ETS and the ETS Subsidiary have complied in all
material respects with the laws, regulations and specifications with respect to
design, manufacture, labeling, testing and inspection of ETS Products
promulgated by the Food and Drug Administration ("FDA"); (c) there have been no
recalls or seizures ordered or to the knowledge of ETS threatened by any such
Governmental Authority with respect to any of the ETS Products; and (d) neither
ETS nor the ETS Subsidiary have received any warning letter from the FDA.

4.21 CUSTOMERS AND SUPPLIERS. ETS has made available to Hach a list of
its customers. Except as set forth in SCHEDULE 4.21, no customer which,
individually or in the aggregate, accounted for more than 5% of ETS's
consolidated revenues during the 12 month period preceding the date hereof, and
no supplier or service provider or group of suppliers or service providers
which, individually or in the aggregate, accounted for more than 5% of ETS's
consolidated expenses during the 12 month period preceding the date hereof, has
canceled or otherwise terminated, or made any written threat to ETS or the ETS
Subsidiary to cancel or otherwise terminate, for any reason, including, without
limitation, the consummation of the transactions contemplated hereby, its
relationship with ETS or the ETS Subsidiary or has at any time on or after
December 31, 1996 decreased materially its services to ETS or the ETS Subsidiary
in the case of any such service provider, or its usage of the services or
products of ETS and the ETS Subsidiary. To the knowledge of ETS, no such
customer or supplier or service provider intends to cancel or otherwise
terminate its relationship with ETS or the ETS Subsidiary or to decrease
materially its services to ETS or the ETS Subsidiary or its usage of the
services or products of ETS and the ETS Subsidiary.

4.22 OPINION OF FINANCIAL ADVISOR. The Environmental Test Systems,
Inc. Employee Stock Ownership Plan ("ETS ESOP") has received the written opinion
of Comstock Valuation Advisors, Inc. ("COMSTOCK") on the date of this Agreement
to the effect that the Class A Merger Consideration to be received by the ETS
ESOP from Hach is not less than the "fair market value" of the ETS Class A
Common Stock held by the ETS ESOP and that the terms of the transactions
pursuant to this Agreement, including the disposition of the ETS ESOP, is fair
to the ETS ESOP and its participants from a financial point of view. ETS will
promptly, after the date of this Agreement, deliver a copy of such opinion to
Hach. A copy of the Comstock engagement letter, dated December 1, 1997, has
previously been delivered to Hach.

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4.23 NO EXISTING DISCUSSIONS. As of the date of this Agreement, ETS is
not engaged, directly or indirectly, in any discussions with any other party
with respect to any Business Combination Transaction (as defined herein).

4.24 BROKERS. Neither ETS, nor the ETS Subsidiary, nor any director,
officer or employee thereof has employed any broker or finder or has incurred or
will incur any broker's, finder's or similar fees, commissions or expenses, in
each case in connection with the transactions contemplated by this Agreement.

4.25 ACCURACY AND COMPLETENESS OF ALL STATEMENTS. Each representation
or warranty by ETS made pursuant hereto (including the schedules hereto) and all
closing certificates hereafter provided by ETS pursuant to the terms hereof will
be true and correct in all material respects as of the date hereof and as of the
Closing Date and does not, and will not as of the Closing Date, omit any
material fact required to make the statements contained therein not misleading.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF HACH AND MERGERCO

Hach and Mergerco hereby represent and warrant to ETS as follows:

5.1 ORGANIZATION AND GOOD STANDING. Each of Hach and Mergerco is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware.

5.2 AUTHORITY; NONCONTRAVENTION. Each of Hach and Mergerco has the
corporate power and authority to execute and deliver this Agreement, the
Stockholder's Agreement and the Escrow Agreement and to perform its obligations
hereunder and thereunder. The execution, delivery and performance of this
Agreement, the Stockholder's Agreement and the Escrow Agreement and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized and approved by the Board of Directors of each of Hach and Mergerco
(but with respect to Mergerco as to only the Merger Agreement) and by Hach as
the sole stockholder of Mergerco and no other corporate proceedings on the part
of Hach or Mergerco (but with respect to Mergerco as to only the Merger
Agreement) are necessary to authorize and approve this Agreement, the
Stockholder's Agreement and the Escrow Agreement and the transactions
contemplated hereby and thereby. This Agreement, the Stockholder's Agreement and
the Escrow Agreement have been duly executed and delivered by, and constitute
valid and binding obligations of, Hach and Mergerco (but with respect to
Mergerco as to only the Merger Agreement) enforceable against Hach and Mergerco
(but with respect to Mergerco as to only the Merger Agreement) in accordance
with their respective terms (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally or by the principles governing the
availability of equitable remedies). The execution, delivery and performance of
this Agreement, the Stockholder's Agreement and the Escrow Agreement by Hach and
Mergerco (but with respect to Mergerco as to only the Merger

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Agreement) and the consummation of the transactions contemplated hereby and
thereby do not and will not:

(i) contravene any provisions of the Certificate of
Incorporation or By-Laws of Hach or Mergerco;

(ii) violate or conflict with any Legal Requirements or result
in the termination or material modification of any Permit applicable to
Hach or Mergerco or any of their respective businesses or properties
except for such violations and conflicts which would not, in the
aggregate, have a material adverse effect on Hach's or Mergerco's ability
to perform their obligations hereunder; or

(iii) require any authorization, consent, order, permit or
approval of, or notice to, or filing, registration or qualification with,
any governmental, administrative or judicial authority to be made or
obtained by Hach or Mergerco, except in connection with or in compliance
with the provisions of the Delaware Corporation Law, the Securities Act
of 1933, ("Securities Act") the Securities and Exchange Act of 1934
("Exchange Act"), and the HSR Act under which a filing may be required in
connection with the Merger.

(iv) conflict with, result in a breach of, or constitutes a
default under any note, bond, indenture, mortgage, deed of trust,
license, contract, lease, agreement, arrangement, commitment or other
instrument to which Hach or Mergerco is a party or by which Hach or
Mergerco is subject or bound and which is material to Hach on a
consolidated basis;

(v) result in the creation of a Security Interest, upon any
right, property or asset of Hach or Mergerco; or

(vi) terminate or give any person, corporation or entity the
right to terminate, accelerate, amend, modify or refuse to perform under
any note, bond, indenture, mortgage, deed of trust, license, lease,
contract, agreement, arrangement, commitment or other instrument to which
Hach or Mergerco is bound or with respect to which Hach or Mergerco is to
perform any duties or obligations or receive any rights or benefits.

5.3 CAPITALIZATION. As of the date of this Agreement, the authorized
capital stock of Hach consists of 25,000,000 shares of Hach Common Stock and
20,000,000 shares of Hach Class A Common Stock. As of January 16, 1998,
8,238,001 shares of Hach Common Stock and 8,230,133 shares of Hach Class A
Common Stock were issued and outstanding, all of which were validly issued,
fully paid and nonassessable. The authorized capital stock of Mergerco consists
of 1,000 shares of Mergerco Common Stock, all of which, as of the date of this
Agreement, are issued and outstanding and held by Hach. Except as contemplated
by this Agreement and as set forth in this SECTION 5.3 and SCHEDULE 5.3, as of
the date of this Agreement, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character relating to the issued
or unissued capital stock of Hach or any Subsidiary of Hach, including Mergerco,
obligating Hach or any Hach Subsidiary to issue or sell any shares of capital
stock of, or other equity interests in Hach or any Hach Subsidiary. Between
October 31, 1997 and the date of this

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Agreement, no shares of Hach Common Stocks have been issued by Hach, except
pursuant to the exercise of the stock options and stock purchase rights
described above that were outstanding on September 30, 1997, in each case, in
accordance with their respective terms. There are no outstanding contractual
obligations of Hach or any Hach Subsidiary to repurchase, redeem or otherwise
acquire any shares of Hach Common Stocks, or any capital stock of, or any equity
interests in, any Hach Subsidiary. The shares of Hach Common Stocks to be
issued pursuant to the Merger will be duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights created by statute,
Hach's Amended and Restated Certificate of Incorporation or By-laws or any
agreement to which Hach is a party or by which Hach is bound and will, when
issued, be registered under the Securities Act and the Exchange Act and
registered or exempt from registration under applicable state securities laws
("Blue Sky Laws").

5.4 SEC FILINGS; FINANCIAL STATEMENTS.

(a) Hach has filed all forms, reports and documents required to
be filed by it with the Securities and Exchange Commission (the "SEC") since
December 31, 1994 (collectively, the "HACH SEC REPORTS"). The Hach SEC Reports
(i) were prepared in all material respects in accordance with the requirements
of the Securities Act and the Exchange Act, as the case may be, and the rules
and regulations thereunder and (ii) did not, at the time they were filed (or at
the effective date thereof in the case of registration statements), contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading. No
Subsidiary of Hach is currently required to file any form, report or other
document with the SEC under Section 12 of the Exchange Act.

(b) Each of the consolidated financial statements (including,
in each case, any notes thereto) contained in Hach SEC Reports, the consolidated
financial statements of Hach and its consolidated Hach Subsidiaries for the year
ended April 30, 1997 and the unaudited consolidated financial statements of Hach
and its consolidated Hach Subsidiaries for the quarter ended October 31, 1997
was prepared in accordance with GAAP consistently applied throughout the periods
indicated (except as may be indicated in the notes thereto and except that
financial statements included with interim reports do not contain all GAAP notes
to such financial statements) and each fairly presented in all material respects
the consolidated financial position, results of operations and changes in
shareholders' equity and cash flows of Hach and its consolidated subsidiaries as
at the respective dates thereof and for the respective periods indicated therein
(subject, in the case of unaudited statements, to normal and recurring year-end
adjustments which were not and are not expected to be, individually or in the
aggregate, material to the business, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of Hach and its Subsidiaries,
taken as a whole.

(c) For purposes of this SECTION 5.4 only, the term "material"
shall have the meaning used by courts and the SEC when applying the Securities
Act and the Exchange Act to particular facts and circumstances.

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5.5 ABSENCE OF LITIGATION. Except as disclosed in SCHEDULE 5.5 or the
Hach SEC Reports filed prior to the date of this Agreement, there is no claim,
action, suit, litigation, inquiry, review, proceeding or investigation pending
or, to the knowledge of Hach or any Hach Subsidiary after due inquiry,
threatened against or affecting Hach, any Hach Subsidiary, any Hach Benefit Plan
or any of their respective properties or rights before any court, arbitrator,
panel, agency or governmental, administrative or judicial, authority, which (a)
individually or in the aggregate, would reasonably be expected to have a
material adverse effect on the business, operations, results of operations,
assets, liabilities or condition (financial or otherwise) of Hach and its
Subsidiaries taken as a whole or (b) seeks to delay or prevent the consummation
of the Merger. Neither Hach nor any Hach Subsidiary nor any property or asset
of Hach or any Subsidiary is in violation of any Legal Requirement,
individually or in the aggregate, a material adverse effect on the business,
operations, results of operations, assets, liabilities or condition (financial
or otherwise) of Hach and its Subsidiaries, taken as a whole.

5.6 OWNERSHIP OF MERGERCO; NO PRIOR ACTIVITIES.

(a) Mergerco was formed solely for the purpose of engaging in
the transactions contemplated by this Agreement.

(b) As of the date hereof and the Effective Time, except for
obligations or liabilities incurred in connection with its incorporation or
organization and the Merger and except for this Agreement and any other
agreements or arrangements contemplated by this Agreement, Mergerco has not and
will not have incurred, directly or indirectly, through any subsidiary or
affiliate, any obligations or liabilities or engaged in any business activities
of any type or kind whatsoever or entered into any agreements or arrangements
with any person.

5.7 BROKERS. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Hach or Mergerco.

5.8 ACCURACY AND COMPLETENESS OF ALL STATEMENTS. Each representation
or warranty by Hach made pursuant hereto (including the schedules hereto) and
all closing certificates hereafter provided by Hach pursuant to the terms hereof
will be true and correct in all material respects as of the date hereof and as
of the Closing Date and does not, and will not as of the Closing Date, omit any
material fact required to make the statements contained therein not misleading.

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ARTICLE 6

ADDITIONAL AGREEMENTS

6.1 REGISTRATION STATEMENT; PROXY STATEMENT.

(a) As promptly as practicable after the execution of this
Agreement, Hach shall prepare and file with the SEC a registration statement on
Form S-4 or the appropriate form (together with all amendments thereto, the
"REGISTRATION STATEMENT") including therein a combined proxy statement to be
sent to the stockholders of ETS (the "PROXY STATEMENT") and Prospectus, in
connection with the registration under the Securities Act of the shares of Hach
Common Stocks to be issued to the shareholders of ETS pursuant to the Merger.
Hach and ETS each shall use all reasonable efforts to cause the Registration
Statement to become effective as promptly as practicable, and, prior to the
effective date of the Registration Statement, Hach shall take all or any action
required under any applicable federal or state securities laws in connection
with the issuance of shares of Hach Common Stocks pursuant to the Merger. ETS
shall furnish all information concerning ETS as Hach may reasonably request in
connection with such actions and the preparation of the Registration Statement
and Proxy Statement. As promptly as practicable after the Registration
Statement shall have become effective, ETS shall mail the Proxy Statement to its
shareholders. The Proxy Statement shall include the recommendation of the Board
of Directors of ETS in favor of the Merger, unless otherwise necessary due to
the applicable fiduciary duties of the directors of the Company, as determined
by such directors in good faith after consultation with independent legal
counsel (who may be such party's regularly engaged independent legal counsel),
subject to SECTION 6.10.

No amendment or supplement to the Proxy Statement or the Registration
Statement will be made by Hach or ETS without the approval of the other party,
which shall not be unreasonably withheld. Hach and ETS each will advise the
other, promptly after it receives notice thereof, of the time when the
Registration Statement has become effective or any supplement or amendment has
been filed, the issuance of any stop order, the suspension of the qualification
of the Hach Common Stocks issuable in connection with the Merger for offering or
sale in any jurisdiction, or any request by the SEC for amendment of the Proxy
Statement or the Registration Statement or comments thereon and responses
thereto or requests by the SEC for additional information.

Hach shall promptly prepare and submit to NASDAQ a listing application
covering the shares of Hach Common Stocks issuable in the Merger, and shall use
its reasonable best efforts to obtain, prior to the Effective Time, approval for
the listing of such Hach Common Stocks, subject to official notice of issuance
and ETS shall cooperate with Hach with respect to such listing.

(b) Hach represents, warrants and agrees that the information
supplied by Hach for inclusion in the Registration Statement and the Proxy
Statement shall not at (i) the time the Registration Statement is declared
effective, (ii) the time the Proxy Statement (or any amendment thereof or
supplement thereto) is first mailed to the shareholders of ETS, (iii) the time
of the ETS Shareholders' Meeting, and (iv) the Effective Time, contain any
statement which, at such time and in light of the circumstances under which it
is made, is false or misleading with

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respect to any material fact, or omits to state any material fact required to be
stated therein, or necessary in order to make the statements therein not false
or misleading or necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the ETS Shareholders' Meeting
which shall have become false or misleading. If at any time prior to the
Effective Time any event or circumstance relating to Hach or any Hach
Subsidiary, or their respective officers or directors, should be discovered by
Hach which should be set forth in an amendment or a supplement to the
Registration Statement or Proxy Statement, Hach shall promptly inform ETS.
Notwithstanding the foregoing, Hach and Mergerco make no representation or
warranty with respect to any information supplied by ETS or any of its
representatives which is contained in the Proxy Statement documents. All
documents that Hach is responsible for filing with the SEC in connection with
the transactions contemplated herein will comply as to form and substance in all
material aspects with the applicable requirements of the Securities Act and the
rules and regulations promulgated thereunder and the Exchange Act and the rules
and regulations promulgated thereunder.

(c) ETS represents, warrants and agrees that the information
supplied by ETS for inclusion in the Registration Statement and the Proxy
Statement shall not, at (i) the time the Registration Statement is declared
effective, (ii) the time the Proxy Statement (or any amendment thereof or
supplement thereto) is first mailed to the shareholders of ETS, (iii) the time
of the ETS Shareholders' Meeting, and (iv) the Effective Time, contain any
statement which, at such time and in light of the circumstances under which it
is made, is false or misleading with respect to any material fact, or omits to
state any material fact required to be stated therein, or necessary in order to
make the statements therein not false or misleading or necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the ETS Shareholders' Meeting which shall have become false or
misleading. If at any time prior to the Effective Time any event or
circumstance relating to ETS or any ETS Subsidiary, or their respective officers
or directors, should be discovered by ETS which should be set forth in an
amendment or a supplement to the Registration Statement or Proxy Statement, ETS
shall promptly inform Hach. Notwithstanding the foregoing, ETS makes no
representation or warranty with respect to any information supplied by Hach or
any of its representatives in the Proxy Statement documents. All documents that
ETS is responsible for filing with the SEC in connection with the transactions
contemplated herein will comply as to form and substance in all material
respects with the applicable requirements of the Securities Act and the rules
and regulations promulgated thereunder and the Exchange Act and the rules and
regulations promulgated thereunder.

(d) ETS, Hach and Mergerco each hereby (i) consents to the use
of its name and, on behalf of its Subsidiaries and Affiliates, the names of such
Subsidiaries and Affiliates and to the inclusion of financial statements and
business information relating to such party and its Subsidiaries and Affiliates
(in each case, to the extent required by applicable securities laws) in the
Registration Statement or the Proxy Statement; (ii) agrees to use all reasonable
efforts to obtain the written consent of any person or entity retained by it
which may be required to be named (as an expert or otherwise) in the
Registration Statement or the Proxy Statement; and (iii) agrees to cooperate,
and agrees to use all reasonable efforts to cause its Subsidiaries and
Affiliates to cooperate, with any legal counsel, investment banker, accountant
or other agent or representative retained by any of the parties specified in
clause (i) above in connection with the preparation of

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any and all information required, as determined after consultation with each
party's counsel, to be disclosed by applicable securities laws in the
Registration Statement or the Proxy Statement.

6.2 SHAREHOLDERS' MEETING. ETS shall use all reasonable efforts to
hold a meeting of its shareholders (the "ETS SHAREHOLDERS' MEETING") on or prior
to the 35th day following the date on which the Registration Statement becomes
effective, for the purpose of voting upon the approval of this Agreement and the
Merger. ETS shall take all action reasonably necessary or advisable to secure
the vote or consent of shareholders required by Indiana Corporation Law in favor
of such approval (including unanimously recommending such approval), unless
otherwise necessary and mandatory under the applicable fiduciary duties of the
directors of ETS, as determined by such directors in good faith after
consultation with independent legal counsel (who may be such party's regularly
engaged independent legal counsel).

6.3 ACCESS; CONFIDENTIALITY. Between the date hereof and the Closing
Date, ETS will and will cause the ETS Subsidiary to (i) provide, to the officers
and other authorized representatives of Hach full access, during normal business
hours, to any and all premises, properties, files, books, records, documents,
and other information of ETS and the ETS Subsidiary, and will cause its
respective officers to furnish to Hach or its authorized representatives any and
all financial, technical and operating data and other information pertaining to
the businesses and properties of ETS or the ETS Subsidiary as may be reasonably
requested by Hach and (ii) make available for inspection and copying by Hach
true and complete copies of any documents relating to the foregoing. All
information received by Hach pursuant to this SECTION 6.3 shall be held by it in
accordance with the terms of the Confidentiality Agreements dated October 23,
1997 between Hach and ETS.

6.4 CONDUCT OF BUSINESS OF ETS PRIOR TO THE EFFECTIVE TIME. ETS
agrees that from and after the date hereof until the Effective Time and except
as otherwise consented to or approved by Hach in writing:

(a) The business of ETS and the ETS Subsidiary shall be
conducted only in, and ETS and the ETS Subsidiary shall not take any action
except in, the ordinary course of business and consistent with past practice;

(b) No amendment or other change shall be made in the Articles
of Incorporation or By-Laws of ETS or in the charter or by-laws (or similar
organization documents with different names) of the ETS Subsidiary;

(c) Neither ETS nor the ETS Subsidiary shall (i) issue, grant,
sell or encumber any shares of its capital stock or (ii) issue, grant, sell, or
encumber any security, option, warrant, put, call, subscription or other right
of any kind, fixed or contingent, that directly or indirectly calls for the
acquisition, issuance, sale, pledge or other disposition of any shares of
capital stock of ETS or the ETS Subsidiary, (iii) enter into any agreement,
commitment or understanding calling for any transaction referred to in clause
(i) or (ii) of this paragraph (c), or (iv) make any other changes in its equity
capital structure;

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(d) No dividend shall be declared or paid or other distribution
(whether in cash, stock, property or any combination thereof) or payment
declared or made in respect of any capital stock of ETS or the ETS Subsidiary,
nor shall ETS or the ETS Subsidiary, directly or indirectly, purchase, acquire
or redeem or split, combine or reclassify any shares of the capital stock of ETS
or the ETS Subsidiary except that ETS may pay to its stockholders its normal and
customary quarterly cash dividend in an amount not to exceed $0.24112 per share
on the ETS Class A Common Stock for each such dividend until the Effective Time
and the ETS Subsidiary may pay to ETS a cash dividend in the ordinary course of
business in accordance with past practice.

(e) Except as set forth in SCHEDULE 6.4, neither ETS nor the
ETS Subsidiary shall make any capital expenditures (including expenditures for
additions to plant, property and equipment) or appropriations or commitments
with respect thereto, except (i) to the extent of the total dollar amounts and,
to the extent indicated therein, at the times set forth in ETS's 1997 and 1998
Capital Expenditure Budgets; provided, however, that ETS shall not be deemed to
have breached this clause (i) of this subsection (e) so long as ETS and the ETS
Subsidiary shall not have made any such expenditures, appropriations or
commitments in the aggregate in excess of more than $25,000 above the budgeted
amounts and (ii) such additional capital expenditures, appropriations or
commitments as ETS and Hach mutually may agree upon;

(f) Except as set forth in SCHEDULE 6.4, neither ETS nor the
ETS Subsidiary shall without the prior written consent of Hach which consent
shall be promptly considered and not unreasonably withheld:

(i) enter into any distribution agreements;

(ii) amend the 1997 and 1998 operating budgets of ETS, a
copy of each is attached hereto as EXHIBIT D (together the "1997 AND 1998
OPERATING BUDGETS");

(iii) pay, discharge or satisfy claims, liabilities or
obligations (absolute, accrued, contingent or otherwise and whether due
or to become due), other than (A) liabilities or obligations incurred in
the ordinary course of business and consistent with past practice, (B)
the payment or discharge of obligations as contemplated by this Agreement
and (C) scheduled repayments of current portions of principal and
interest on long-term indebtedness, the estimated amounts of which
payments (which in the case of interest payments on variable rate debt
have been projected on the basis of rates currently in effect) have prior
to the execution of this Agreement been disclosed by ETS to Hach in a
writing which specifically refers to this SECTION 6.4;

(iv) create, incur or assume any indebtedness including
purchase money indebtedness or guarantee any indebtedness for money
borrowed or guarantee any other obligation of any person or entity;

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(v) make any loans, advances or capital contributions
to, or investments in, any other person, other than short-term
investments in the ordinary course of business in obligations of the
United States of America for which the full faith and credit of the
United States of America is pledged to provide for the payment of
principal and interest or certificates of deposit issued by a commercial
bank or banks having at least $500 million or equivalent in other
currency in undivided capital and surplus;

(vi) other than to the extent provided for and at the
times, if indicated, in the 1997 and 1998 Operating Budgets, and other
than with respect to any ETS obligation to purchase ETS Class A Common
Stock from ETS ESOP participants whose employment is terminated prior to
the Closing, enter into any transaction or series of related
transactions, whether or not in the ordinary course of business,
involving total payments to or by ETS or the ETS Subsidiary of, or
involving the acquisition or disposition by ETS or the ETS Subsidiary of
property, assets, or rights having a value of, at least $15,000;
provided, however, that no transaction shall be permitted by this clause
(vi) which is otherwise prohibited by the terms of this Agreement.

Notwithstanding the foregoing, nothing in this subsection (f) shall prevent any
borrowing or advances between or among ETS and the ETS Subsidiary or the
endorsement of negotiable instruments in the ordinary course of business;

(g) Without the prior written consent of Hach which consent
shall be promptly considered and not unreasonably withheld, ETS will not, and
will not permit the ETS Subsidiary to (i) approve or put into effect any general
increase in any compensation or benefits payable to any class or group of
employees of ETS or the ETS Subsidiary, (ii) grant to any Key Employee any
increase in compensation, remuneration or benefits of any nature whatsoever
including, without limitation, new benefits, (iii) enter into any Compensation
Commitment with any Key Employee, (iv) pay any bonus or other special
compensation to any Key Employee (except pursuant to ETS Plans and Compensation
Commitments disclosed on SCHEDULE 4.17 hereto) or (v) hire any new Key
Employees;

(h) ETS will use, and will cause the ETS Subsidiary to use, its
best efforts to preserve its business organization intact, to keep available to
itself the present services of its Key Employees; and to preserve for itself the
goodwill of its suppliers, customers and others with whom business relationships
exist; PROVIDED that nothing in this subsection (h) shall permit ETS or the ETS
Subsidiary to make or agree to make any increase in compensation, or take any
other action with respect to employees, suppliers or customers, which is
inconsistent with present policies and practices of ETS or such Subsidiary or
with any other provisions of this Agreement without the prior written consent of
Hach which consent shall be promptly considered and not unreasonably withheld;

(i) ETS will not and will not permit the ETS Subsidiary to
adopt or amend in any material respect any ETS Plan (except to the extent
necessary to maintain the ETS Plans' compliance with applicable law) or any
collective bargaining agreement;

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(j) Neither ETS nor the ETS Subsidiary shall enter into or
approve any ETS Agreement to which an Insider is a party;

(k) Neither ETS nor the ETS Subsidiary shall reorganize,
restructure, recapitalize, liquidate or file a voluntary petition in bankruptcy
or enter into any composition with its creditors or file a voluntary winding up
petition;

(l) Neither ETS nor the ETS Subsidiary shall settle or
compromise any litigation involving the payment of, or any agreement to pay over
time, an amount, in cash, notes or other property, in excess of $15,000 in the
aggregate without the prior consent of Hach; provided, however, that in no event
shall ETS or the ETS Subsidiary settle or compromise any litigation involving
Intellectual Property;

(m) Neither ETS nor the ETS Subsidiary shall take any action or
fail to take any action which would result in any breach of any of its
representations, warranties or covenants contained herein;

(n) Neither ETS nor the ETS Subsidiary shall enter into any
license, sale, transfer, grant of Security Interest, disposition, or acquisition
of any right, title or interest in or to Intellectual Property;

(o) Without limiting any other provision of this Agreement,
neither ETS nor the ETS Subsidiary shall amend or terminate any ETS Agreement or
waive, release or cancel any debts, claims or rights, except in any such case in
the ordinary course of business and consistent with prior practice; or

(p) With respect to all Group Health Plans maintained by ETS or
the ETS Subsidiary, ETS will, and will cause the ETS Subsidiary to, comply with
the Continuation Coverage Requirements for all Qualifying Events affecting any
current or former employee of ETS or the ETS Subsidiary and any Qualified
Beneficiary related to any such employee or former employee. ETS will update
SCHEDULE 4.17 to include any current or former employee of ETS or the ETS
Subsidiary or any Qualified Beneficiary related to any such employee or former
employee who becomes eligible to receive continued health care pursuant to the
Continuation Coverage Requirements prior to the Closing Date.

6.5 CONSENTS; COOPERATION. Subject to the terms and conditions
hereof, ETS and Hach will, and ETS will cause the ETS Subsidiary to, and Hach
will cause Mergerco to use their respective best efforts at their respective own
expense:

(i) to obtain prior to the earlier of the date required (if so
required) or the Closing Date, all waivers, permits, licenses, approvals,
authorizations, qualifications, orders and consents of all third parties
and governmental authorities, and make all filings and registrations with
governmental authorities which are required on their respective parts for
the consummation of the transactions contemplated by this Agreement;

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(ii) to give the other parties prompt prior notice of and to
defend, consistent with applicable principles and requirements of law,
any lawsuit or other legal proceedings, whether judicial or
administrative, whether brought derivatively or on behalf of third
parties (including governmental authorities) challenging this Agreement
or the transactions contemplated hereby; and

(iii) to furnish each other such information and assistance as
may reasonably be requested in connection with the foregoing.

ETS, Hach and Mergerco will, to the extent permitted by applicable requirements
of law, supply the other parties hereto with copies of all correspondence,
filings or written communications between such party, its Subsidiaries (as
applicable), or its representatives and any governmental authority with respect
to this Agreement and the transactions contemplated hereby.

6.6 ADDITIONAL AGREEMENTS. Subject to the terms and conditions of
this Agreement, each of the parties hereto agrees to use its best efforts at its
own expense 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 to consummate and make effective the transactions contemplated by
this Agreement; provided, however, that the provisions of this SECTION 6.6 AND
OF SECTION 6.4 hereof shall not require Hach, ETS or Mergerco to divest
themselves of any assets or properties or agree to limit the ownership or
operation by Hach, ETS or the ETS Subsidiary of any of the assets, or
businesses of ETS or the ETS Subsidiary following the Effective Time.

6.7 INTERIM FINANCIAL STATEMENTS; 1997 AUDITED FINANCIALS.

(a) Within twenty days after the end of each calendar month
after the date of this Agreement and until the Effective Time, ETS will deliver
to Hach unaudited consolidated statements of income for such calendar month and
the corresponding calendar month of the preceding fiscal year. Within twenty
days after the end of each fiscal quarter after the date of this Agreement and
until the Effective Time, ETS will deliver to Hach an unaudited consolidated
balance sheet as at the end of such fiscal quarter and at the end of the
corresponding fiscal quarter of the preceding fiscal year, together with the
related unaudited consolidated statements of income and cash flows for the
fiscal quarter then ended. All such financial statements shall present fairly
the financial position, results of operations and cash flows of ETS and its
consolidated subsidiaries as at the date or for the periods indicated in
accordance with GAAP consistently applied (and shall be accompanied by a
certificate of the chief financial or accounting officer of ETS to such effect),
except as otherwise indicated in such statements and subject to normal and
recurring year-end audit adjustments which will not in the aggregate be material
to the business, operations, results of operations, assets, liabilities,
condition (financial or otherwise), or prospects of ETS and the ETS Subsidiary,
taken as a whole; PROVIDED, HOWEVER, that such financial statements need not
contain the footnote disclosures required by GAAP. All unaudited financial
statements delivered pursuant to this SECTION 6.7 shall be prepared on a basis
consistent with the audited financial statements for the year ended December 31,
1996.

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(b) Prior to the Effective Time, ETS will furnish Hach true and
complete copies of the audited consolidated balance sheets of ETS and the ETS
Subsidiary as of December 31, 1997, and the related audited consolidated
statements of income, shareholders' equity and cash flows for the year then
ended ("1997 AUDITED FINANCIALS") and from and after such delivery the 1997
Audited Financials shall be included as part of the "Financial Statements" for
purposes of the representations and warranties to be made by ETS at the
Effective Time in accordance with SECTION 7.1.

6.8 NOTIFICATION OF CERTAIN MATTERS. Between the date hereof and the
Effective Time, ETS will give prompt notice in writing to Hach of: (i) any
information that indicates that any representation and warranty contained herein
was not true and correct as of the date hereof or will not be true and correct
as of the Effective Time, (ii) the occurrence or failure to occur of any event
which occurrence or failure to occur will result, or has a reasonable prospect
of resulting, in the failure to satisfy a condition specified in ARTICLE 7
hereof, (iii) any notice or other communication from any third party alleging
that the consent of such third party is or may be required in connection with
the transactions contemplated by this Agreement, (iv) any notice or other
communication from any governmental or regulatory agency or authority in
connection with the transactions contemplated by this Agreement, (v) receipt of
any Business Combination Transaction Proposal (as defined below), (vi) any
actions, suits, claims, investigations or proceedings commenced or, to its
knowledge after due inquiry, threatened against, ETS or the ETS Subsidiary or
relating to or involving or otherwise affecting ETS or the ETS Subsidiary or
which relate to the consummation of the transactions contemplated by this
Agreement, and (vii) any notice of, or other communication relating to, any
default or event which, with notice or lapse of time or both, would become a
default under any ETS Agreement. ETS will (w) promptly advise Hach of any
material adverse change in the business, operations, assets, including,
Intellectual Property, liabilities, condition (financial or otherwise), results
of operations or prospects of ETS or the ETS Subsidiary, (x) confer on request
of Hach with one or more designated representatives of Hach to report
operational matters and to report the general status of ongoing operations, and
(y) notify Hach of any emergency or other change in the normal course of
business or in the operation of the properties of ETS or the ETS Subsidiary and
of any governmental complaints, investigations or hearings (or communications
indicating that the same may be contemplated) or adjudicatory proceedings
involving any property of ETS or the ETS Subsidiary, and will keep Hach fully
informed of such events and permit Hach's representatives access to all
materials prepared in connection therewith.

6.9 PUBLICITY. The parties hereto agree that they will consult with
each other concerning any proposed press release or public announcement
pertaining to the transactions contemplated hereby and shall use all reasonable
efforts to agree upon the text of any such press release or public announcement
prior to the publication of such press release or the making of such public
announcement.

6.10 NO SOLICITATION OF TRANSACTIONS. Neither ETS nor the ETS
Subsidiary directly or indirectly, through any officer, director, agent or
otherwise, shall solicit, initiate or encourage the submission of any proposal
or offer from any person relating to a Business Combination Transaction (as
hereinafter defined) with ETS or the ETS Subsidiary or participate in any

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negotiations regarding, or furnish to any person any information with respect
to, or otherwise cooperate in any way with, or assist or participate in,
facilitate or encourage, any effort or attempt by any other person to do or seek
any of the foregoing; PROVIDED, HOWEVER, that nothing contained in this SECTION
6.10 shall prohibit the ETS Board of Directors from authorizing ETS or the ETS
Board of Directors or its designees from furnishing information to, or entering
into discussions or negotiations with, any person in connection with an
unsolicited proposal in writing by such person for a Business Combination
Transaction with ETS or the ETS Subsidiary received by the ETS Board of
Directors after the date of the Agreement, if, and only to the extent that,
(a) the ETS Board of Directors, after consultation with its independent legal
and financial advisors and taking into consideration the advice of such
advisors, determines in good faith that (i) such action is required for the ETS
Board of Directors to comply with its fiduciary duties to shareholders imposed
by applicable Legal Requirements and (ii) such unsolicited proposal may be
materially more favorable to the shareholders of ETS than the transactions
contemplated by the Agreement and (b) prior to furnishing such information to,
or entering into discussions or negotiations with, such person, ETS (i) gives
Hach and Mergerco as promptly as practicable prior written notice of the
material terms of such proposal in reasonable detail and of ETS's intention to
furnish such information or begin such discussions and (ii) receives from such
person an executed confidentiality agreement on terms no less favorable to ETS
than those contained in the Confidentiality Agreement dated as of October 23,
1997 between Hach and ETS. In addition, ETS may, but shall not be obligated to,
from time to time notify Hach as to any proposal or offer or any inquiry or
contact with any person with respect to a matter that does not rise to the level
of a Business Combination Transaction Proposal. ETS agrees not to release any
third party from, or waive any provision of, any confidentiality or standstill
agreement to which ETS is a party. For purposes of this Agreement, a proposal
for a Business Combination Transaction that follows the procedure and satisfies
the criteria set forth above in subdivisions (a)(i) and (ii) as well as
subdivisions (b)(i) and (ii) of this Section is deemed to be a business
combination transaction proposal ("BUSINESS COMBINATION TRANSACTION PROPOSAL").
As used herein, the term "BUSINESS COMBINATION TRANSACTION" shall mean any of
the following involving ETS or the ETS Subsidiary: (1) any merger,
consolidation, share exchange, business combination or other similar transaction
(other than the Merger); (2) any sale, lease, exchange, transfer or other
disposition (other than a pledge or mortgage) of 25% or more of the assets of
ETS and the ETS Subsidiary taken as a whole, in a single transaction or series
of transactions; or (3) the acquisition by a person or entity or any "group" (as
such term is defined under Section 13(d) of the Exchange Act and the rules and
regulations thereunder) of beneficial ownership of 33% or more of the shares of
ETS Common Stock, whether by tender offer, exchange offer or otherwise.

6.11 CLOSING BALANCE SHEET AND INCOME STATEMENT, ETS's FINANCIAL
MANAGERS' REPORT.

(a) At least two (2) days prior to the Closing, ETS's Vice
President of Finance shall deliver to Hach a fluctuation analysis report
("FINANCIAL MANAGERS' REPORT") on the most recent statement of income and
balance sheet of ETS delivered pursuant to SECTION 6.7 which will compare actual
results to budgeted amounts and to prior year results for the same period. Any
variances over five percent shall be explained in such report.

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(b) Hach shall have the right to verify the findings of the
Financial Managers' Report and satisfy itself as to the procedures used to
prepare such analysis.

6.12 SURVEY AND TITLE POLICY. On or prior to the Closing Date, ETS
shall deliver to Hach a current "as-built" metes and bounds survey for each
parcel of ETS Real Property, including all easements that benefit such
properties (collectively, the "SURVEYS"), which shall (a) be made in accordance
with the "Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys"
jointly established and adopted by the American Land Title Association and the
American Congress on Surveying and Mapping Minimum Standards in 1992 (the
"ALTA/ACSM STANDARDS") and meet the accuracy requirements of an "Urban" survey
as defined therein, (b) be in form, scope, and substance reasonably satisfactory
to Purchaser, (c) contain optional survey requirements 1, 2, 3, 4, 6, 7(a),
7(b), 8, 9, 10, 11 and 13 as described on Table A of the ALTA/ASCM Standards,
(d) contain a survey certification reasonably acceptable to Hach and (e) not
reflect the existence of any Security Interests affecting or relating to the ETS
Real Property (other than for taxes not yet due and payable). In addition, the
Company shall deliver to Hach on or prior to the Closing Date an American Land
Title Association ("ALTA") title insurance policy (the "TITLE POLICY") insuring
title to each parcel of ETS Real Property, which Title Policy shall be (i) in an
amount reasonably acceptable to Hach, (ii) contain such endorsements thereto as
are available and as Hach shall deem necessary or desirable, and (iii) not
reflect the existence of any Security Interests affecting or relating to such
ETS Real Property (other than for taxes not yet due and payable).

6.13 APPROVAL BY MERGERCO BOARD OF DIRECTORS AND SOLE STOCKHOLDER.
Following approval by the Hach Board of Directors of this Agreement and the
other agreements and transactions contemplated hereby, Hach will:

(i) cause the Board of Directors of Mergerco to approve this
Agreement and the agreements and transactions contemplated hereby; and

(ii) in its capacity as the Sole Stockholder of Mergerco, vote
its shares of Mergerco to approve this Agreement and the agreements and
transactions contemplated hereby; and

(iii) cause all other action to occur which is necessary to give
effect to this Agreement and the agreements and transactions contemplated
hereby.

6.14. EMPLOYEE BENEFIT PLANS.

(a) As soon as practical following the Effective Time, Hach
shall make available to the employees of ETS who continue as employees of Hach,
the Surviving Corporation or any Hach Subsidiary after the Effective Time
("CONTINUING EMPLOYEES"), subject to this Section 6.14 and without duplication,
substantially the same employee benefits on substantially the same terms and
conditions that Hach may offer to similarly situated employees of Hach from time
to time, provided, however, that until such time as the ETS ESOP is terminated,
frozen or merged into Hach's ESOP, or the ETS ESOP loan or any successor loan is
repaid, the

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Environmental Test Systems, Inc. 401(k) Plan ("ETS 401(k) Plan") shall be
administered by Hach or the Surviving Corporation as a separate plan. Until such
time as the Continuing Employees become covered by the Hach welfare benefit
plans, the Continuing Employees shall remain covered by the welfare benefit
plans sponsored by ETS, subject to the terms of such plans.

(b) Subject to the provisions of Sections 6.14(c), 6.14(d) and
6.14(e), a Continuing Employee who becomes covered by a particular employee
benefit plan sponsored by Hach pursuant to Section 6.14(a) shall be credited
with his or her years of service (as defined in the applicable Hach employee
benefit plan) as an employee of ETS prior to the Effective Time, and of Hach,
the Surviving Corporation or any Hach Subsidiary after the Effective Time, for
purposes of (i) eligibility under the employee welfare benefit plans sponsored
by Hach; and (ii) eligibility and vesting, but not for purposes of benefit
accrual or contributions, under Hach's Profit Sharing Plan ("HACH PROFIT SHARING
PLAN").

(c) Subject to the requirements and limitations of applicable
law and the provisions of the benefit plans referenced below, Hach shall take or
cause to be taken the following actions regarding the disposition of The
Environmental Test Systems, Inc. "401(k)" Plan ("ETS 401(k) Plan"):

(i) The ETS 401(k) Plan, and all assets and liabilities
associated therewith, shall be merged with and into the Hach Profit
Sharing Plan at such time as Hach may determine but not later than the
date of the first to occur of (a) the termination or freezing of the ETS
ESOP, (b) the repayment of the loan to the ESOP by NBD Bank ("ETS ESOP
Loan") or any successor loan (should Hach determine to refinance the NBD
ESOP Loan or any successor loan) or (c) its merger into the Hach ESOP.
Until the effective date of such merger, eligible participants under the
ETS 401(k) Plan may continue to make salary deferral contributions
thereunder, subject to the terms of such plan but shall not participate
in the Hach Profit Sharing Plan or its 401(k) component.

(ii) Any outstanding loans to participants under the ETS 401(k)
Plan shall remain outstanding after the effective date of the merger of
the ETS 401(k) Plan into the Hach Profit Sharing Plan and shall be
serviced under the Hach Profit Sharing Plan pursuant to its terms.

(d) With respect to Continuing Employees, Hach will use
commercially reasonable efforts to cause the appropriate health care providers
under Hach's benefit plans to : (i) waive any preexisting condition exclusions
from coverage for such Continuing Employees; and (ii) credit such Continuing
Employees with amounts paid toward deductibles under their existing ETS
coverages, if coverage for the Continuing Employees under the relevant Hach plan
begins other than on the first day of the relevant Hach plan's plan year.

(e) (i) During the plan year of the ETS ESOP ending December
31, 1998, ETS shall pay dividends on the ETS Class A Common Stock held by the
ETS ESOP for the period commencing January 1, 1998 and ending on the Closing
Date in an amount equal to the lesser of:

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(A) The amount necessary to enable the ESOP to
make principal and interest payments on the NBD ESOP
Loan at the time such payments are due, and to satisfy
its liquidity needs with respect to distributions to
terminated participants; or

(B) The amount required to be paid with respect
to the ETS Class A Common Stock by the Articles of
Incorporation of ETS as in effect on the date hereof.

(ii) Subject to the requirements and limitations of
applicable law and the provisions of the ETS ESOP and Hach ESOP,
from and after the Effective Time, Hach shall take or cause to
be taken the following actions regarding the disposition of the
ETS ESOP:

(A) Until such time as Hach determines to
terminate, freeze or merge it into the Hach ESOP, Hach
will maintain the ETS ESOP as a tax-qualified "employee
stock ownership plan", within the meaning of Sections
401(a) and 4975(e)(7) of the Code from the Effective
Time through the date on which the ETS ESOP is frozen,
terminated or merged with the Hach ESOP or any successor
thereto.

(B) At such time or times as the then acting
Trustee determines, the Trustee may liquidate Hach
Common Stocks or other securities held in the "loan
suspense" account of the ETS ESOP to pay down or pay off
the ETS Loan. The proceeds from the sale of Hach Common
Stocks or other securities remaining in the loan
suspense account after the ETS Loan has been paid in
full and after the payment of all expenses incurred by
the ETS ESOP and the ETS ESOP Trustee shall be allocated
to the accounts of all active participants with account
balances under the ETS ESOP at the time of allocation,
and no part shall revert to Hach or any affiliate of
Hach or any other person unless required by law or
applicable regulations.

(C) In the event the ETS ESOP is terminated or
merged into the Hach ESOP or any successor stock
ownership plan, Hach will amend the Hach ESOP or such
successor plan, if then in existence, so that
contemporaneously with the termination or merger of the
ETS ESOP, all active participants in the ETS ESOP will
immediately participate in the Hach ESOP and they will
be credited with their years of service with ETS for
eligibility and vesting purposes under the Hach ESOP as
provided in SECTION 6.14(b).

(D) For so long as the ETS ESOP is in existence
and the ETS Loan is outstanding, Hach or the Surviving
Corporation will make contributions to the ETS ESOP
sufficient to enable the Trustee to meet its obligations
under the ETS

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Loan or any loan the proceeds of which are used to refinance the
ETS ESOP Loan.

(E) All expenses and costs associated with the
disposition of all ETS Plans which are incurred from and after the
Effective Time shall be paid by Hach or the Surviving Corporation
to the extent not paid by the Plans.

(f) The final valuation of the ETS Class A Common Stock held by
the ETS ESOP will be made by ComStock effective December 31, 1997. ComStock
must have issued to the ESOP Trustee and Benefits Committee its opinion dated
not later than the date of the ETS Stockholder Meeting called to approve the
Plan and Agreement of Merger. Such opinion shall be to the effect that the
Class A Merger Consideration to be received by the ETS ESOP from Hach is not
less than "adequate consideration", as defined in Section 3(18) of ERISA, for
the ETS Class A Common Stock exchanged by the ETS ESOP and that the terms of the
transactions pursuant to this Merger Agreement, including the disposition of the
ETS ESOP, is fair to the ETS ESOP and its participants from a financial point of
view.

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ARTICLE 7

CONDITIONS TO THE OBLIGATIONS OF HACH AND MERGERCO

The obligations of Hach and Mergerco to consummate the Closing and effect
the Merger shall be subject to the satisfaction, at or prior to the Closing, of
each of the following conditions, each of which may be waived by Hach and
Mergerco as provided herein except as otherwise required by applicable law:

7.1 REPRESENTATIONS AND WARRANTIES; AGREEMENTS.

(a) Each of the representations and warranties of ETS contained
in this Agreement shall be true and correct in all material respects as of the
date hereof and (having been deemed to have been made again at and as of the
Effective Time) shall be true and correct in all material respects as of the
Effective Time (subject to any updates to the Schedules hereto representing
matters arising between the time of execution of this Agreement and the
Closing); provided, however, if any such representation or warranty is already
qualified by materiality, for purposes of determining whether this condition has
been satisfied, such representation and warranty must be true and correct in all
respects. Each obligation of ETS under this Agreement required to be performed
by it at or prior to the Effective Time shall have been duly performed and
complied with in all material respects as of the Effective Time.

(b) Each of the representations and warranties contained in the
Stockholder Agreement shall be true and correct as of the date hereof and
(having been deemed to have been made again at and as of the Effective Time)
shall be true and correct as of the Effective Time. Each obligation under the
Stockholder's Agreement to be performed by Harry Stephenson at or prior to the
Effective Time shall have been duly performed and complied with in all respects
as of the Effective Time.

(c) At the Closing, Hach and Mergerco shall have received (i) a
certificate, dated the Closing Date and duly executed by the chief executive
officer and the chief financial officer of ETS, to the effect that the
conditions set forth in Subsection (a) above have been satisfied and (ii) a
certificate, dated the Closing Date and duly executed by Harry Stephenson, to
the effect that the conditions set forth in Subsection (b) above have been
satisfied.

7.2 AUTHORIZATION OF MERGER; CONSENTS. All corporate action necessary
to authorize the execution, delivery and performance of this Agreement, the
Escrow Agreement and the Stockholder's Agreement and the consummation of the
transactions contemplated hereby, and thereby shall have been duly and validly
taken by ETS including without limitation the approval of the stockholders of
ETS contemplated by SECTION 8.3 hereof. All notices to, and declarations,
filings and registrations with, and consents, authorizations, approvals and
waivers from, governmental and regulatory bodies required to consummate the
transactions contemplated hereby shall have been made or obtained. All notices,
consents, and waivers required to be obtained by ETS and the ETS Subsidiary and
listed on SCHEDULE 4.4 shall have been made or obtained.

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7.3 APPROVAL OF HACH BOARD OF DIRECTORS. The Board of Directors of
Hach shall have approved the Merger and the other transactions contemplated by
this Agreement.

7.4 OPINION OF ETS's COUNSEL. Hach shall have been furnished with
the opinion of Krieg DeVault, Alexander & Capehart, Indianapolis, Indiana,
counsel to ETS, dated the Closing Date, in form and substance reasonably
satisfactory to Hach and its counsel, which opinion may be in a form in
accordance with the Legal Opinion Accord of the American Bar Association
Section of Business Law (1991) ("ACCORD FORMAT").

7.5 REPORT OF ETS's FINANCIAL MANAGERS. ETS shall have delivered
to Hach the Financial Manager's Report referred to in Section 6.11.

7.6 ABSENCE OF LITIGATION. No order, stay, judgment or decree
shall have been issued and be in effect by any court restraining or
prohibiting the consummation of the transactions contemplated hereby or
requiring Hach or any of its Subsidiaries to divest any material assets or
properties or limiting the ownership or operation by Hach or any of its
Subsidiaries of any of the material assets or business of ETS or the ETS
Subsidiary. No statute, rule or regulation shall have been promulgated or
enacted by any federal, state or local government, governmental authority or
governmental agency which would prevent or make illegal the transactions
contemplated hereby. No action, suit or proceeding before any court or any
governmental or regulatory body shall be pending (or threatened by any
governmental or regulatory body), and no investigation by any governmental or
regulatory body shall have been commenced (and be pending) seeking (i) to
restrain or prohibit (or questioning the validity or legality of) the
consummation of the transactions contemplated by this Agreement, (ii)
material damages in connection therewith which Hach, in good faith and with
the advice of counsel, believes makes it undesirable to proceed with the
consummation of the transactions contemplated hereby, (iii) to limit the
ownership or operation by Hach or any of its Subsidiaries of any of the
assets or business of ETS or the ETS Subsidiary or (iv) to require Hach or
any of its Subsidiaries to divest any material assets or properties.

7.7 OPTIONS, ETC.. Hach shall have received assurances, to its
reasonable satisfaction, that at and after the Effective Time there shall not
exist any security, option, warrant, right (including preemptive rights),
put, call, subscription, agreement, commitment, understanding or claim of any
nature whatsoever, fixed or contingent that directly or indirectly calls for
ETS or the ETS Subsidiary to acquire or issue, pledge, deliver, sell or
otherwise dispose, or to cause to be acquired, issued, delivered, pledged,
sold or otherwise disposed, any shares of the capital stock of ETS or the ETS
Subsidiary or any securities convertible into or other rights to acquire any
shares of capital stock of ETS or the ETS Subsidiary or obligating ETS or the
ETS Subsidiary to grant, extend or enter into any of the foregoing.

7.8 STOCKHOLDER'S AGREEMENT AND ESCROW AGREEMENT. The Stockholder's
Agreement shall be in full force and effect, and there shall be no breach
thereunder as of the Effective Time. The Escrow Agreement shall be in full force
and effect, and there shall be no breach thereunder as of the Effective Time.

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7.9 RESIGNATIONS. Hach shall have received the resignations,
effective as of the Effective Time of each director of ETS and the ETS
Subsidiary.

7.10 EMPLOYMENT AGREEMENTS. (a) Prior to the Closing, ETS shall
have delivered to Hach copies of fully executed Employment Agreements with
each Key Employee listed on SCHEDULE 7.10 hereto in form and substance and
pursuant to such terms and conditions as are satisfactory to Hach in its sole
discretion.

(b) Prior to the Closing, Hach and Mark Stephenson shall have entered
into an Employment Agreement in form and substance and pursuant to such terms
and conditions as are mutually satisfactory to them.

7.11 HARRY STEPHENSON AGREEMENTS. (a) At the Closing, Harry Stephenson
shall have delivered to Hach a fully executed noncompetition agreement in the
form of EXHIBIT E hereto.

(b) At the Closing, Hach and Harry Stephenson shall have
entered into a Consulting Agreement in the form of EXHIBIT F.

(c) At the Closing, Harry Stephenson shall have executed and
delivered a Lock-up Letter in the form of EXHIBIT G, whereby he agrees not to
sell the shares of Hach Common Stocks he receives in the Merger for a period of
six months from the Closing Date.

(d) Prior to or effective at the Closing, the current
employment agreement between ETS and Harry Stephenson shall be terminated with
no continuing obligation on the part of ETS.

7.12 REGISTRATION STATEMENT. The Registration Statement shall have
been declared effective, and no stop order suspending the effectiveness of the
Registration Statement shall be in effect.

7.13 TAX OPINION. Hach and ETS shall each have received an opinion of
Krieg, DeVault, Alexander & Capehart, legal counsel to ETS, reasonably
satisfactory in form and substance to ETS and to Hach and its counsel McBride
Baker & Coles, to the effect that the Merger will be treated for federal income
tax purposes as a reorganization qualifying under the provisions of section
368(a)(1)(A) of the Code which shall be dated on or about the date that is two
business days prior to the date the Proxy Statement is first mailed to
shareholders of ETS and which shall be updated as of the Effective Time ("ETS
TAX OPINION").

7.14 LISTING OF HACH COMMON STOCKS; COMPLIANCE WITH STATE BLUE SKY
LAWS. Hach and ETS shall have received from NASDAQ evidence that the shares of
Hach Common Stocks to be issued to the shareholders of ETS in the Merger shall
be quoted on NASDAQ immediately following the Effective Time. Hach shall have
complied in all material respects with any state Blue Sky laws applicable to the
issuance of the Hach Common Stocks in connection with the Merger.

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7.15 INVESTMENT LETTERS. At the Closing, Hach and ETS shall have
received investment letters in form and substance satisfactory to Hach and ETS
from ETS shareholders representing at least 51% of the Hach Common Stock issued
as Merger Consideration, representing the agreement of such shareholders that,
notwithstanding their registration, all shares of Hach Common Stocks to be
received by ETS shareholders as Merger Consideration shall be held for
investment (the "ETS INVESTMENT LETTERS").

7.16 CERTIFICATES. ETS shall have furnished Hach with such
certificates of its officers and others as Hach may reasonably request to
evidence compliance with the conditions set forth in this ARTICLE 7.

7.17 NO ADVERSE CHANGES. No material adverse changes shall have
occurred in the assets, liabilities, business, financial (or other) condition or
results of operations or prospects of ETS or the ETS Subsidiary since December
31, 1996.

7.18 DISPOSITION OF CERTAIN ETS AGREEMENTS. Prior to the Closing, Hach
and ETS shall take such actions with respect to the Registration Rights
Agreement and Security Agreements among ETS and its stockholders as is described
on SCHEDULE 7.18.

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ARTICLE 8

CONDITIONS TO THE OBLIGATIONS OF ETS

The obligations of ETS to consummate the Closing and effect the Merger
shall be subject to the satisfaction, at or prior to the Closing, of each of the
following conditions, each of which may be waived by ETS as provided herein
except as otherwise provided by applicable law:

8.1 REPRESENTATIONS AND WARRANTIES; AGREEMENTS. Each of the
representations and warranties of Hach and Mergerco contained in this Agreement
shall be true and correct in all material respects as of the date hereof and
(having been deemed to have been made again at and as of the Effective Time)
shall be true and correct in all material respects as of the Effective Time;
provided, however, if any such representation or warranty is already qualified
by materiality, for purposes of determining whether this condition has been
satisfied such representation and warranty must be true and correct in all
respects. Each obligation of Hach and Mergerco under this Agreement required to
be performed by it at or prior to the Effective Time shall have been duly
performed and complied with in all respects as of the Effective Time. At the
Closing, ETS shall have received a certificate, dated the Closing Date and duly
executed by an officer of Hach to the effect that the conditions set forth in
this SECTION 8.1 have been satisfied.

8.2 AUTHORIZATION OF THE MERGER. All corporate action necessary to
authorize the execution, delivery and performance of this Agreement, the Escrow
Agreement and the Stockholder's Agreement and consummation of the transactions
contemplated hereby and thereby shall have been duly and validly taken by Hach
and Mergerco. All notices to, and declarations, filings and registrations with,
and consents, authorizations, approvals and waivers from, governmental and
regulatory bodies required to consummate the transactions contemplated hereby
shall have been made or obtained.

8.3 STOCKHOLDER APPROVALS. This Agreement and the transactions
contemplated herein shall have been duly approved by the stockholders of ETS in
accordance with all applicable Legal Requirements (the "REQUISITE ETS
STOCKHOLDER APPROVAL"). The affirmative vote of the holders of at least a
majority of the outstanding shares of each of ETS Class A Common Stock and ETS
Class B Common Stock voting each as a separate voting group are the only votes
of the holders of any class or series of capital stock of ETS necessary to
approve this Agreement and the Merger.

8.4 OPINION OF HACH'S COUNSEL. ETS shall have been furnished with
opinion of McBride, Baker & Coles, dated the Closing Date, in form and substance
reasonably satisfactory to ETS and its counsel, which opinion may be in the
Accord Format.

8.5 ABSENCE OF LITIGATION. No order, stay, judgment or decree shall
have been issued and be in effect by any court restraining or prohibiting the
consummation of the transactions contemplated hereby or requiring Hach or any of
its Subsidiaries to divest ownership or operations by Hach or any of its
Subsidiaries of, any of the assets or business of Hach or any of its

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Subsidiaries. No statute, rule or regulation shall have been promulgated or
enacted by any federal, state or local government, governmental authority or
governmental agency which would prevent or make illegal the transactions
contemplated hereby. No action, suit or proceeding before any court or any
governmental or regulatory body shall be pending (or threatened by any
governmental or regulatory body), and no investigation by any governmental or
regulatory body shall have been commenced (and be pending) seeking (i) to
restrain or prohibit (or questioning the validity or legality of) the
consummation of the transactions contemplated by this Agreement, (ii) material
damages in connection therewith which Hach, in good faith and with the advice of
counsel, believes makes it undesirable to proceed with the consummation of the
transactions contemplated hereby, (iii) to limit the ownership or operation by
Hach or any of its Subsidiaries of any of the assets or business of Hach or any
of its Subsidiaries or (iv) to require Hach or any of its Subsidiaries to divest
any material assets or properties.

8.6 REGISTRATION STATEMENT. The Registration Statement shall have
been declared effective, and no stop order suspending the effectiveness of the
Registration Statement shall be in effect.

8.7 TAX OPINION. Hach and ETS shall each have received the ETS Tax
Opinion, as provided in SECTION 7.13.

8.8 LISTING OF HACH COMMON STOCKS; COMPLIANCE WITH STATE BLUE SKY
LAWS. Hach and ETS shall have received from NASDAQ evidence that the shares of
Hach Common Stocks to be issued to the shareholders of ETS in the Merger shall
be quoted on NASDAQ immediately following the Effective Time. Hach shall have
complied in all material respects with any state Blue Sky Laws applicable to the
issuance of the Hach Common Stocks in connection with the Merger.

8.9 INVESTMENT LETTERS. (a) Hach and ETS shall have received the ETS
Investment Letters, as provided in SECTION 7.15.

(b) At the Closing, ETS shall have received from Hach an
investment letter in form and substance satisfactory to ETS in which Hach
represents that it has no present intention as of the Closing Date to direct the
ETS ESOP Trustee to sell any Hach Common Stocks to be received by the ETS ESOP
as a result of the Merger.

8.10 EMPLOYMENT AGREEMENTS. ETS shall have entered into Employment
Agreements with each Key Employee listed on SCHEDULE 7.10 and Hach shall have
entered into the Employment Agreement with Mark Stephenson, as provided in
SECTION 7.10.

8.11 HARRY STEPHENSON AGREEMENTS. Hach will have executed and
delivered the agreements as provided by SECTION 7.11.

8.12 ESCROW AGREEMENT. The Escrow Agreement shall have been executed
and delivered by each of the parties thereto.

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8.13 CERTIFICATES. Hach and Mergerco shall have furnished ETS with
such certificates of their officers and others as ETS may reasonably request to
evidence compliance with the conditions set forth in this ARTICLE 8.

8.14 NO ADVERSE CHANGE. No material adverse change shall have occurred
in the assets, liabilities, business, financial (or other) condition or results
of operations or prospects of Hach on a consolidated basis since April 30, 1997.

ARTICLE 9

TERMINATION: ABANDONMENT OF MERGER

9.1 TERMINATION. This Agreement may be terminated at any time prior
to the Effective Time, whether prior to or after approval by the stockholders of
ETS:

(a) By mutual consent duly authorized by the Boards of
Directors of Hach and ETS;

(b) By either Hach or ETS if a permanent injunction is entered,
enforced or deemed applicable to this Agreement, which prohibits the
consummation of the transactions contemplated hereby and all appeals of such
injunction shall have been taken and shall have been unsuccessful (the appealing
party or parties shall be responsible for their respective costs and expenses
relating to such appeals);

(c) By either Hach or ETS if any governmental entity, the
consent of which is a condition to the obligation of such party to consummate
the transactions contemplated hereby, shall have determined not to grant its
consent and all reasonable appeals of such determination shall have been taken
and shall have been unsuccessful (the appealing party or parties shall be
responsible for their respective costs and expenses relating to such appeals);

(d) By either Hach or ETS if, without fault of such terminating
party, the Merger has not been consummated except for routine filings with the
Secretary of State of Delaware and Indiana on or before the Closing Date;

(e) By Hach, (i) if the Board of Directors of ETS shall have
withdrawn its recommendation of this Agreement or the Merger or shall have
resolved to do so, or (ii) within five (5) business days of receipt by Hach of a
written notice from ETS that ETS has received a Business Combination Transaction
Proposal; provided that during such five (5) business day period, Hach shall
have the right to make a good faith counter-offer to ETS in response to the
Business Combination Transaction Proposal;

(f) By ETS, in the exercise of its good faith judgment (subject
to Section 6.10) as to its fiduciary duties under law, if (x) after receiving an
unsolicited proposal, the ETS Board of Directors has made the determinations
called for by Section 6.10(a)(i) and Section 6.10 (a)(ii),

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thus resulting in a Business Combination Transaction Proposal, (y) Hach has
received the notice called for by Section 6.10(b)(i) and (z) ETS has received
the confidentiality agreement referred to in Section 6.10(b)(ii); provided that
any termination of this Agreement by ETS pursuant to this Section 9.1(f) shall
not be effective until ETS has made payment of the full Break-up Fee required by
Section 9.2(a) hereof;

(g) By Hach, upon a breach of any representation, warranty,
covenant or agreement on the part of ETS set forth in this Agreement, or if any
representation or warranty of ETS shall have become untrue, in either case such
that the conditions set forth in Article 7 would not be satisfied (a
"TERMINATING ETS BREACH"); PROVIDED, HOWEVER, that, if such Terminating ETS
Breach is curable by ETS through the exercise of its best efforts and for so
long as ETS continues to exercise such best efforts, Hach may not terminate this
Agreement under this SECTION 9.1(g);

(h) By ETS, upon breach of any representations, warranty,
covenant or agreement on the part of Hach or Mergerco set forth in this
Agreement, or if any representation or warranty of Hach or Mergerco shall have
become untrue, in either case such that the conditions set forth in Article 8
would not be satisfied ("TERMINATING HACH BREACH"); PROVIDED, HOWEVER, that, if
such Termination Hach Breach is curable by Hach or Mergerco through best
efforts, and for so long as Hach or Mergerco continues to exercise such best
efforts, ETS may not terminate this Agreement under this SECTION 9.1(h);

(i) By either Hach or ETS, on the fifth business day following
the Determination Date if the Average Share Price on the Determination Date is
less then $9.00 for Hach Common Stock or $7.00 for Hach Class A Common Stock; or

(j) By Hach, in the event any updates of Schedules made
pursuant to Section 7.1 disclose any liabilities not disclosed at the time this
Agreement is executed and delivered or which arose after such execution or
delivery other than in the ordinary course of business, which liabilities are
individually or in the aggregate material.

9.2 FEES AND EXPENSES.

(a) ETS shall pay Hach a fee (a "BREAK-UP FEE") in immediately
available funds, equal to all of Hach's Expenses (as hereinafter defined), if:

(i) this Agreement is terminated pursuant to SECTION
9.1(e) OR 9.1(f); or

(ii) this Agreement is terminated pursuant to Section
9.1(e)(ii) and if, within one (1) year of such termination, ETS, the ETS
Subsidiary or any of their affiliates enters into a letter of intent or
similar agreement or a definitive agreement for a Business Combination
Transaction which relates to or results from the Business Combination
Transaction Proposal which was the subject of Hach's termination pursuant
to Section 9.1(e)(ii).

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ETS shall provide Hach with prompt written notice of the events described
in SECTIONS 9.2(a)(i) AND (ii). Hach shall submit an accounting of its expenses
comprising the Break-up Fee within 15 days of receipt of such notice from ETS,
and ETS will pay the Break-up Fee within 5 business days following the receipt
by ETS of such accounting.

(b) As used herein, "EXPENSES" means all reasonable
out-of-pocket expenses and fees actually incurred or accrued by Hach or
Mergerco, or on their respective behalf in transactions contemplated by this
Agreement on and after September 1, 1997 and prior to the termination of this
Agreement (including, without limitation, all fees and expenses of counsel,
financial advisors, accountants, environmental and other experts and
consultants, and all governmental filing and registration fees and expenses and
all printing expenses) and in connection with the negotiation, preparation,
execution, performance and termination of this Agreement, the structuring of the
transactions contemplated by this Agreement, any agreements relating thereto and
any filings to be made in connection therewith.

(c) Notwithstanding anything to the contrary in this SECTION
9.2, no Break-up Fee will be payable by ETS if the Merger is consummated.

9.3 PROCEDURE AND EFFECT OF TERMINATION. In the event of termination
of this Agreement as provided in this ARTICLE 9, notice thereof shall be
promptly given by the terminating party to the other parties and thereafter this
Agreement shall be of no further force or effect and there shall be no liability
on the part of any party with respect thereto except (i) the provisions of this
SECTION 9.3, SECTIONS 9.2, 10.3, 10.6, AND 10.10 and the Confidentiality
Agreement shall survive any termination and (ii) nothing herein will relieve any
party from any liability for any breach hereof (it being understood and agreed
that in the event of a termination of this Agreement in accordance with SECTION
9.1, neither Hach nor Mergerco, on the one hand, nor ETS, on the other hand,
shall be liable to the other hereunder as the result of the occurrence after the
date hereof of any event beyond such party's control which event results in the
inability of such party to bring down its representations as of the Closing in
accordance with the provisions of SECTION 7.1 OR 8.1 hereof, as the case may
be).

ARTICLE 10

MISCELLANEOUS

10.1 MODIFICATION OR AMENDMENT. At any time prior to the Effective
Time, the parties hereto may, by written agreement, make any modification or
amendment of this Agreement approved by their respective Boards of Directors;
provided, however, that the consideration to be received by holders of shares of
ETS Common Stocks in the Merger, as set forth in ARTICLE 2 hereof, and the
dollar amount of Hach Common Stocks to be placed in the Escrow as contemplated
in Article 11 hereof, shall not be amended or modified without the approval of
such holders at any time after such holders have approved this Agreement. This
Agreement shall not be

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modified or amended except pursuant to an instrument in writing executed and
delivered on behalf of each of the parties hereto.

10.2 WAIVER OF CONDITIONS; INVESTIGATION. The conditions to each of
the parties' obligations to consummate the Merger are for the sole benefit of
such party and may be waived by such party in whole or in part to the extent
permitted by applicable law. The respective representations and warranties of
the parties contained herein and any Party's rights to receive payments for
Damages in accordance with ARTICLE 11 hereof shall not be deemed waived or
affected by any investigation by any party except to the extent expressly
provided in SECTION 11.1(c) hereof.

10.3 PAYMENT OF EXPENSES. Except as provided in this SECTION 10.3 and
as set forth in SECTION 9.2, whether or not the Merger shall be consummated,
each party hereto shall pay its own expenses incident to preparing for, entering
into and carrying out this Agreement and the consummation of the Merger;
provided, however, that in the event the Merger is consummated, the holders of
ETS Class B Common Stock shall reimburse Hach for twenty-five percent (25%) of
all such costs and expenses incurred by ETS following October 23, 1997, to the
extent such costs and expenses exceed the sum of Fifty Thousand Dollars
($50,000) (twenty-five percent (25%) of such excess being referred to as the
"REIMBURSEMENT AMOUNT"). At the Closing, ETS shall provide Hach with a fair
estimate of the Reimbursement Amount, and the Merger Consideration to be
delivered to the ETS Class B Stockholders shall be reduced by an amount equal to
the Reimbursement Amount by adjusting the cash and/or the stock components in a
manner agreed to by Hach and ETS. As soon as practical after the Effective
Date, a final adjustment to reflect any material discrepancy between the
estimate of the Reimbursement Amount and the actual Reimbursement Amount shall
be made as provided in the Escrow Agreement. Notwithstanding the foregoing,
Hach alone shall pay the costs and expenses with respect to the filing of the
Registration Statement, the printing of the Proxy Statement, the listing of the
Hach Common Stocks on NASDAQ, compliance with Blue Sky Laws, and all filings
under the HSR Act (other than the fees and disbursements of counsel, accountants
and other representatives of ETS relating to such matters). The ETS Employee
Stock Ownership Plan will be solely responsible for any fees and expenses due to
its independent trustee and to Comstock, relating to the Merger and the related
transactions, which are properly payable by it consistent with its fiduciary
duties.

10.4 SURVIVAL.

(a) Except as to (i) the representations and warranties
contained in SECTION 4.3 AND 4.4, which shall survive the Effective Time and
remain in effect indefinitely, (ii) the representations and warranties contained
in SECTIONS 4.16 AND 4.17 which shall survive the Effective Time until the
expiration of the statute of limitations applicable thereto, (iii) the
representations and warranties in SECTION 4.7 which shall survive the Effective
Time until 60 days after the expiration of the applicable tax statute of
limitations with respect to the relevant taxable period (including all periods
of extension (whether automatic or permissive)) and (iv) the representations and
warranties contained in SECTIONS 4.12 AND 4.19 which shall survive the Effective
Time until the expiration of three (3) years after the Effective Time, the
representations

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and warranties of ETS shall survive the Effective Time until the expiration of
eighteen (18) months after the Effective Time; PROVIDED, HOWEVER, that such
representations and warranties and the liability of any person with respect
thereto including, without limitation, the indemnity referred to in ARTICLE 11
hereof, shall not terminate with respect to any claim, whether or not fixed as
to liability or liquidated as to amount, with respect to which the
Representative or Hach has been given written notice within such specified
period of survival in accordance with ARTICLE 11 hereof and the Escrow
Agreement.

(b) The covenants and agreements in this Agreement will survive
the Effective Time and remain in effect indefinitely, unless any covenant or
agreement provides that it will survive for a different period following the
Effective Time (in which event such different period shall apply.

10.5 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 of the provisions hereof.

10.6 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 ETS: 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

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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.

10.7 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, PROVIDED, HOWEVER, that neither
this Agreement nor any of the rights, interests, or obligations hereunder may be
assigned by any of the parties hereto without the prior written consent of the
other parties.

10.8 COMPLETE AGREEMENT. This Agreement (including the Schedules and
Exhibits hereto and the Stockholder Agreement, the Escrow Agreement, the
Confidentiality Agreements and the other agreements referred to herein) contains
the entire understanding of the parties with respect to the transactions
contemplated hereby and supersedes all prior written or oral commitments,
arrangements or understandings with respect thereto, including, without
limitation (except for Section 17 thereof which is incorporated herein by this
reference), the provisions of the Letter of Intent between ETS and Hach dated as
of October 23, 1997. There are no restrictions, agreements, promises,
warranties, covenants or undertakings other than those expressly set forth or
referred to herein.

10.9 COUNTERPARTS. This Agreement may be executed in two or more
counterparts all of which shall be considered one and the same agreement and
each of which shall be deemed an original.

10.10 GOVERNING LAW. This Agreement shall be governed by the laws of
the State of Delaware (regardless of the laws that might be applicable under
principles of conflicts of law) as to all matters, including but not limited to
matters of validity, construction, effect and performance.

10.11 ACCOUNTING TERMS. All accounting terms used herein which are not
expressly defined in this Agreement shall have the respective meanings given to
them in accordance with GAAP on the date hereof.

10.12 SEVERABILITY. If any one or more of the provisions of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity,
legality or enforceability of the remaining

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provisions of this Agreement shall not be affected thereby. To the extent
permitted by applicable law, each party waives any provision of law which
renders any provision of this Agreement invalid, illegal or unenforceable in any
respect.

10.13 SPECIFIC PERFORMANCE. Hach, Mergerco and ETS recognize that any
breach of the terms of this Agreement may give rise to irreparable harm for
which money damages would not be an adequate remedy, and accordingly agree that,
in addition to other remedies, any non-breaching party shall be entitled to
enforce the terms of this Agreement by a decree of specific performance without
the necessity of proving the inadequacy as a remedy of money damages.

10.14 THIRD PARTY BENEFICIARIES. Except and to the extent specifically
provided in SECTIONS 6.14(a) THROUGH (d) with respect to Continuing Employees,
SECTION 6.14 with respect to the ETS ESOP Trustee, and ARTICLE 11, with respect
to the Representative and the Hach Parties, this Agreement is not intended, and
shall not be construed, to confer any rights or remedies hereunder upon any
person other than the parties hereto and the Hach Parties.

10.15 CERTAIN INTERPRETIVE MATTERS AND DEFINITIONS. (a) Unless the
context otherwise requires, (i) all references to Sections, Articles, Exhibits
or Schedules are to Sections, Articles, Exhibits or Schedules of or to this
Agreement, (ii) each term defined in this Agreement has the meaning assigned to
it, (iii) "or" is disjunctive but not necessarily exclusive, (iv) words in the
singular include the plural and VICE VERSA, (v) the term "Affiliate" has the
meaning given to such term in Rule 12b-2 of Regulation 12B under the Exchange
Act, (vi) "including" and "includes" shall mean "including, without limitation,"
(vii) "person" or "Person" shall mean any individual, partnership, joint
venture, limited liability company, corporation, trust, unincorporated
association, governmental authority, or other entity, and (viii) words in the
masculine or neuter shall include the masculine, feminine or neuter as the
context requires. All references to "$" or dollar amounts will be to lawful
currency of the United States of America.

(b) No provision of this Agreement will be interpreted in favor
of, or against, any of the parties hereto by reason of the extent to which any
such party or its counsel participated in the drafting thereof or by reason of
the extent to which any such provision is inconsistent with any prior draft
hereof or thereof.

(c) The following terms defined elsewhere in this Agreement in
the Sections set forth below shall have the respective meanings therein defined.

[Download Table]

Term Definition
---- ----------

1997 and 1998 Capital Expenditure Budgets Section 4.13(i)
1997 and 1998 Operating Budgets Section 6.4(f)(ii)
1997 Audited Financials Section 6.7(b)
Accord Format Section 7.4
Additional Class A Merger Consideration Section 2.1(b)(i)
Additional Class B Merger Consideration Section 2.1(b)(ii)
Affiliate Section 4.18

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Agreement Recitals
ALTA Section 6.12
ALTA/ACSM Standards Section 6.12
Associate Section 4.18
Average Market Price Section 2.1(c)
Balance Sheet Section 4.6
Basket Amount Section 11.1(b)
Breach Notice Section 11.1(b)
Break-up Fee Section 9.2(a)
Business Combination Transaction Section 6.10
Business Combination Transaction Proposal Section 6.10
CBMT Section 4.5(b)
Claim Section 11.2(a)
Claim Notice Section 11.2(a)
Class A Base Merger Consideration Section 2.1(i)(A)
Class A Merger Consideration Section 2.1(i)(C)
Class A Stockholders Section 11.1(a)
Class B Base Merger Consideration Section 2.1(ii)(A)
Class B Merger Consideration Section 2.1(ii)(C)
Class B Stockholders Section 11.1(a)
Closing Section 3.1
Closing Date Section 3.1
Code Section 4.17(i)(i)
Compensation Commitments Section 4.17(a)(iii)
Comstock Section 4.22
Continuation Coverage Requirements Section 4.17(d)
Copyrights Section 4.12(a)
Damages Section 11.1(a)
Delaware Corporation Law Section 1.1
Determination of Claim Section 11.2(c)
Determined Claim Amount Section 11.2(c)
Determination Date Section 2.1(c)
Dissenting Shares Section 2.2(a)
Effective Time Section 1.2
Environmental Section 4.19(h)
Environmental Costs and Liabilities Section 4.19(h)
Environmental Law Section 4.19(h)
Environmental Permit Section 4.19(h)
Environmental Test Systems, Inc. Section 1.1
ERISA Section 4.17(a)(i)
ERISA Plans Section 4.17(c)
Escrow Agent Section 2.1(i)(B)
Escrow Agreement Section 2.1(i)(B)
Escrow Deposit Section 11.1(a)
Escrow Release Date Section 2.1(i)(B)

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Exchange Act Section 5.2(iii)
ETS Recitals
ETS 401(k) Plan Section 6.14(c)(i)
ETS Agreements Section 4.15
ETS Class A Common Stock Recitals
ETS Class B Common Stock Recitals
ETS Common Stocks Recitals
ETS Employee Loans Section 4.17(a)(iv)
ETS ESOP Section 4.22
ETS ESOP Loan Section 6.14(e)(i)(A)
ETS Investment Letters Section 7.15
ETS Plans Section 4.17(a)(i)
ETS Products Section 4.20
ETS Real Property Section 4.9(c)
ETS Shareholders' Meeting Section 6.2
ETS Subsidiary Section 4.2
ETS Tax Opinion Section 7.13
Exchange Agent Section 2.3(a)
Expenses Section 9.2(b)
FDA Section 4.20
Financial Managers' Report Section 6.11(a)
Financial Statements Section 4.5(a)
Group Health Plans Section 4.17(d)
Hach Recitals
Hach Class A Stock Section 2.1(i)(A)
Hach Common Stock Section 2.1(i)(A)
Hach Common Stocks Section 2.1(i)(A)
Hach Parties Section 11.1(a)
Hach Party Section 11.1(a)
Hach Profit Sharing Plan Section 6.14(b)
Hach SEC Reports Section 5.4(a)
Hazardous Material Section 4.19(h)
HSR Act Section 4.4(c)(v)
Indemnification Expense Section 11.2(b)(i)
Indiana Corporation Law Section 1.1
Insider Section 4.18
Intellectual Property Section 4.12(a)
Key Employees Section 4.13(vii)
Legal Requirements Section 4.8
Licenses Section 4.12(a)
Merger Recitals
Mergerco Recitals
Multiemployer Plan Section 4.17(c)(iii)
NASDAQ Section 2.1(c)
Patents Section 4.12(a)

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Pending Claims Section 2.1(b)(i)
Pending Claims Amount Section 2.1(b)(i)
Permits Section 4.8
Proposed Action Notice Section 11.2(b)(ii)
Proxy Statement Section 6.1(a)
Qualified Beneficiary Section 4.17(d)
Qualifying Events Section 4.17(d)
Real Property Section 4.9(b)
Real Property Leases Section 4.9(c)
Registration Statement Section 6.1(a)
Reimbursement Amount Section 10.3
Relative Section 4.18
Release Section 4.19(h)
Representative Section 11.3
Requisite ETS Stockholder Approval Section 8.3(b)
Resolved Pending Claim Section 2.1(b)(v)
Resolved Pending Claim Amount Section 2.1(b)(v)
SEC Section 3.1
Securities Act Section 5.2(iii)
Security Interest Section 4.2
Software Section 4.12(a)
Stockholder's Agreement Recitals
Subsequent Class A Merger Consideration Section 2.1(b)(iv)
Subsequent Class B Merger Consideration Section 2.1(b)(iv)
Subsidiary Section 4.2
Surrendering Stockholders Section 11.1(a)
Surveys Section 6.12
Surviving Corporation Section 1.1
Tax Returns Section 4.7
Taxes Section 4.7
Technology Section 4.12(a)
Terminating ETS Breach Section 9.1(g)
Terminating Hach Breach Section 9.1(h)
Third Anniversary Escrow Balance Section 2.1(b)(1)
Third Party Claim Section 11.2
Title Policy Section 6.12
Trademarks Section 4.12(a)
Treasury Shares Section 2.1(iii)

10.16. EXHIBITS AND SCHEDULES. All exhibits annexed hereto, and all
schedules referred to herein, are hereby incorporated in and made a part of this
Agreement as if set forth herein. Any matter disclosed on any schedule referred
to herein shall be deemed also to have been disclosed on any other applicable
schedule referred to herein. Capitalized terms used in any of the

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schedules annexed hereto that are not otherwise defined in such schedule, shall
have the same meanings ascribed to them in this Agreement.

ARTICLE 11

INDEMNIFICATION AND HOLDBACK

11.1 INDEMNIFICATION BY SURRENDERING STOCKHOLDERS. (a) Subject to the
provisions of this ARTICLE 11 and SECTION 10.4 hereof, the Surrendering
Stockholders (as defined below) jointly and severally agree to indemnify and
hold harmless Hach and its Affiliates and their respective officers, directors,
employees and agents (individually a "HACH PARTY" and collectively, the "HACH
PARTIES") 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 (hereinafter referred to as "DAMAGES") suffered or
incurred by Hach or any such other Hach Party by reason of, resulting from or
arising out of (i) the breach or inaccuracy as of the date of this Agreement or
as of the Effective Time of any representation or warranty of ETS which is
contained in or made pursuant to this Agreement or (ii) the breach of any
covenant or other agreement of ETS contained in this Agreement. The liability
for Damages hereunder shall be allocated among the holders of ETS Class A Common
Stock (the "CLASS A STOCKHOLDERS") and the holders of ETS Class B Common Stock
(the "CLASS B STOCKHOLDERS") in the Merger (all such Class A Stockholders and
Class B Stockholders, being hereinafter collectively referred to as the
"SURRENDERING STOCKHOLDERS"), as follows:

[Download Table]

Class A Stockholders 28.35%
Class B Stockholders 71.65%

(b) At the Effective Time, Hach will place in escrow cash and
shares of Hach Common Stocks having an aggregate value at Closing (valued in
accordance with, and subject to, SECTION 2.1(c)) of $1,750,000 (the "ESCROW
DEPOSIT"), in such amounts as set forth in Schedule A to the Escrow Agreement,
which Escrow Deposit, subject to the terms of this ARTICLE 11, SECTION 10.4 and
the Escrow Agreement, will be available together with the Escrow Earnings (as
defined in the Escrow Agreement) as the "Escrow Fund" to fund the Surrendering
Stockholders obligations under this SECTION 11.1. The Escrow Fund shall be paid
to a Hach Party and/or their designee, on the one hand, or to the Surrendering
Stockholders, on the other hand, in accordance with the terms of this Agreement
and the Escrow Agreement. The procedures pursuant to which the Hach Parties will
be entitled to payments for Damages are set forth in SECTION 11.2 hereof and in
the Escrow Agreement.

(c) Notwithstanding anything to the contrary contained herein,
(A) the Surrendering Stockholders shall not be responsible for any Damages under
SECTIONS 11.1(a)(i) AND 11.1(a)(ii) until the cumulative aggregate amount of all
such Damages exceeds One Hundred Thousand ($100,000) Dollars (the "BASKET
AMOUNT"), in which case the Surrendering Stockholders shall then be liable only
for such Damages in excess of the Basket Amount and (B)

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the Surrendering Stockholders' liability under this SECTION 11.1 shall be
limited to the Escrow Fund held pursuant to the Escrow Agreement; provided
however, that the limitations on recovery of Damages herein shall not apply in
the case of (i) fraud or any intentional misrepresentation or omission or (ii)
Damages arising from or related to the representations and warranties of ETS
contained in SECTIONS 4.3, 4.4, 4.7 AND 6.1.

11.2 PROCEDURES. (a) As promptly as practicable after any Hach Party
shall receive notice of or otherwise become aware of the commencement of any
action, suit or proceeding, the assertion of any claim, the occurrence of any
event, the existence of any fact or circumstance or the incurrence of any
Damages, in respect of which such Hach Party may be entitled to seek indemnity,
reimbursement or payment under SECTION 11.1 hereof (a "CLAIM"), Hach shall
notify the Representative in writing thereof (a "CLAIM NOTICE") and concurrently
therewith deliver a copy of such Claim Notice to the Escrow Agent; PROVIDED,
HOWEVER, that the failure of Hach to so promptly notify the Representative and
Escrow Agent shall not prevent any Hach Party from being indemnified or
reimbursed for any Damages arising out of any such Claim except to the extent
that the failure to so promptly notify actually materially damages the
Surrendering Stockholders. Each Claim Notice shall describe in reasonable detail
the basis of the Claim and shall indicate the estimated amount of the Damages
that have been or which may be suffered by Hach or any other Hach Party, which
estimate may be revised from time to time ("PENDING CLAIM AMOUNT"); provided,
however, that any revised estimate of the Damages for a Claim which is not a
Third Party Claim (as defined below), shall constitute a new Claim. The
Representative shall have a period of 20 days from the receipt of any Claim
Notice to dispute in whole or in part any Claim made in the aforesaid Claim
Notice in accordance with SECTION 11.2(d) hereof by delivering to Hach and the
Escrow Agent within such 20 day period a written notice (the "DISPUTE NOTICE")
describing in reasonable detail the basis for the objection.

(b)(i) If any Claim involves the claim of a third party (a "THIRD
PARTY CLAIM"), and the Representative confirms in writing to Hach within 20 days
after receipt of the Claim Notice the Surrendering Stockholders' responsibility
to indemnify, reimburse and hold harmless the applicable Hach Party therefor
(which shall be deemed to constitute a determination by the Representative not
to dispute the Third Party Claim vis a vis Hach or the Hach Parties pursuant to
this Agreement, the Escrow Agreement or otherwise; provided that such
confirmation shall not be deemed to constitute a determination not to dispute
such claim vis a vis the third party making such Claim) and within such 20 day
period demonstrates to Hach's reasonable satisfaction that there is a sufficient
amount of funds then remaining in the Escrow Fund after deducting an amount
equal to all Pending Claims Amount for which a Determination has not yet been
made, together with the interest thereon as provided in the Escrow Agreement, in
order to pay the full amount of any potential liability in connection with such
Third Party Claim, the Representative shall have sole control over (with counsel
reasonably acceptable to Hach), and with respect to, the defense, settlement,
adjustment or compromise of such Third Party Claim, PROVIDED that (A) Hach may,
if it so desires, employ counsel at its own expense to assist in the handling of
such Third Party Claim, (B) the Representative shall keep Hach advised of all
material events with respect to such Third Party Claim, (C) the Representative
shall obtain the prior written approval of Hach (which consent may be withheld
for any reason), before entering into any settlement, adjustment or compromise
of such Third Party Claim or ceasing to defend against such Third Party Claim
either

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of which could result in injunctive or other equitable relief being imposed
against any Hach Party or which could result in Damages to Hach or any other
Hach Party which would exceed the amount then remaining in the Escrow Fund after
deducting an amount equal to all Pending Claims Amount for which a Determination
has not yet been made, together with the Escrow Earnings (as defined in the
Escrow Agreement) thereon as provided in the Escrow Agreement; and provided
further that the costs, expenses, including but not limited to attorneys fees
("INDEMNIFICATION EXPENSES"), of all such defenses undertaken by the
Representative pursuant to this SECTION 11.2(b)(i) shall be payable from the
Escrow Fund, to the extent thereof, up to a maximum aggregate amount of Two
Hundred Fifty Thousand ($250,000) Dollars and thereafter all such costs and
expenses shall be paid by the Representative. In the event the Representative
becomes responsible for Indemnification Expenses in excess of the $250,000
limit, the Representative shall have a claim against the Escrow Fund which shall
be subordinate to the claims of the Hach Parties to be paid by a pro-rata charge
against the distributable share of the Surrendering Stockholders, if any, on
final termination of the Escrow Agreement. If Hach does not object to any
action that it is entitled to approve pursuant to the preceding clause (C)
within ten (10) business days after receipt from the Representative of a notice
(the "PROPOSED ACTION NOTICE") describing in reasonable detail the proposed
action (which objection shall be made in writing), Hach shall be deemed to have
approved the action described in the Proposed Action Notice. Notwithstanding
anything contained herein to the contrary, the Representative shall not be
entitled to control (but shall be entitled to assist, at its own expense, in the
defense of), and Hach shall be entitled to have sole control over, the defense
or settlement of any Third Party Claim (x) which seeks an order, injunction or
other equitable relief against any Hach Party which, if successful, could
materially interfere with the business, assets, liabilities, obligations,
prospects, financial condition or results of operations of Hach, ETS or any of
their Affiliates or (y) relating to taxes of Hach, ETS or any of their
Affiliates.

(ii) If the Representative does not timely assume sole control
over the defense or settlement of any Third Party Claim as provided in this
SECTION 11.2(b) or is not entitled to assume such control of any Third Party
Claim pursuant to this SECTION 11.2(b), Hach shall have the right to defend,
settle and compromise such Third Party Claim in such manner as it may deem
appropriate at the cost and expense of the Surrendering Stockholders (but solely
from the Escrow Fund), and to cause the Escrow Agent to pay, in accordance with
ARTICLE 11 hereof and the Escrow Agreement, out of the Escrow Fund to the
applicable Hach Party and/or any third party designated in writing by Hach to
the Escrow Agent, the cost of the defense and/or settlement of such Third Party
Claim; provided, however, that (A) Hach shall keep the Representative advised of
all material events with respect to such Third Party Claim, (B) and the
Representative shall be entitled to assist, at its own expense, in the defense
of such Third Party Claim and (C) Hach shall act in good faith with respect to
any settlement, adjustment or compromise of, and the conduct or cessation of the
defense of, such Third Party Claim.

(i) If the Claim Notice does not involve a Third Party
Claim then:

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(A) if the Representative does not dispute in whole or in part
any such Claim within the 20-day period provided in SECTION
11.2(a), such Claim or the portion thereof which is not
disputed shall be deemed to have resulted in a
Determination of the Claim in favor of the applicable Hach
Party, and the applicable Hach Party will be entitled to be
paid an amount out of the Escrow Funds equal to the amount
of such Claim as estimated by such Hach Party in the Claim
Notice or the portion thereof which is not disputed and the
earnings thereon from the date such Claim Notice was
delivered to the Representative; and

(B) if the Representative does dispute such Claim within the
20-day period provided in SECTION 11.2(a), such Claim or
portion thereof which is disputed shall be resolved in
accordance with SECTION 11.2(d) hereof, which resolution
shall constitute a Determination of the Claim.

(ii) If the Claim Notice involves a Third Party Claim
then:

(A) if the Representative does not dispute (i) that such Third
Party Claim is indemnifable under this ARTICLE 11 or (ii)
the merits of or amount claimed under the Third Party Claim
within the 20-day period provided in SECTION 11.2(a), such
Third Party Claim shall be deemed to have resulted in a
Determination of the Claim in favor of the applicable Hach
Party, and the applicable Hach Party will be entitled to be
paid and/or direct that the third party asserting such
Third Party Claim be paid, an amount out of the Escrow
Funds equal to the amount of Damages actually incurred by
the Hach Party in connection with such Third Party Claim
and the earnings thereon from the date the applicable Claim
Notice was delivered to the Representative; and

(B) if the Representative does not dispute whether such Third
Party Claim is indemnifiable under this ARTICLE 11 but does
dispute the merits of or amount claimed under the Third
Party Claim within the 20-day period provided in Section
11.2(a), such Third Party Claim shall be deemed to have
resulted in a resolution that the Third Party Claim is
indemnifiable, but the Determination of the Claim shall be
derived from the outcome of such Third Party Claim; and

(C) if the Representative disputes whether such Third Party
Claim is indemnifiable (whether or not he disputes the
merits of or amount claimed under the Third Party Claim)
within the 20-day period provided in SECTION 11.2(a), such
dispute shall be limited to the issue of whether such Third
Party Claim is indemnifiable under this ARTICLE 11, and
shall be resolved in accordance with SECTION 11.2(d)
hereof. If such resolution is that the Third Party Claim
is not indemnifiable, such resolution shall constitute a
Determination of the Claim. If such resolution is that the
Third Party Claim is indemnifiable, the Determination of
the Claim shall be derived from the outcome of such Third
Party Claim.

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The amount, if any, with respect to any Claim which is to be paid to Hach
following a Determination of the Claim as provided above is referred to herein
as a "DETERMINED CLAIM AMOUNT".

(d) Any dispute which may arise under this SECTION 11.2 or the
Escrow Agreement with respect to (i) any Claim asserted by Hach or any other
Hach Party pursuant to SECTION 11.2(a) hereof which is timely objected to by the
Representative in a Dispute Notice in accordance with SECTION 11.2 hereof, or
(ii) any other questions arising under this ARTICLE 11, shall be settled as
promptly as practicable either by mutual agreement of the parties to such
dispute (evidenced by appropriate instructions in writing to the Escrow Agent
signed by Hach or such other Hach Party and the Representative) or by a binding
and final arbitration award resulting from arbitration proceedings conducted by
a single arbitrator in accordance with the commercial arbitration rules of the
American Arbitration Association to determine whether the Claim which is being
challenged is permitted under this ARTICLE 11 (such arbitration to take place in
Chicago, Illinois). In connection with any arbitration proceeding hereunder
relating to a Third Party Claim, the parties agree to specifically direct the
arbitrator to refrain from addressing the underlying merits of the Third Party
Claim. The person in whose favor a final decision shall be entered shall be
entitled to receive from the losing person, such amount as the arbitrator may
determine to be reasonable attorney's fees and expenses related thereto for the
services rendered to the person prevailing in any such arbitration proceeding.
In addition, if Hach is the losing person, Hach will reimburse the
Representative for any reasonable extraordinary expenses charged by the Escrow
Agent to the Representative in connection with the resolution of such dispute,
as soon as practicable after receipt by Hach of the appropriate supporting
invoice, including the Representative's share of the Escrow Agent's expenses
under the Escrow Agreement. If Hach and the Representative are unable to reach
an agreement as to any matter contained in a Dispute Notice within 20 days after
receipt of such Dispute Notice by Hach, Hach and the Representative shall submit
the dispute for resolution by an arbitrator in accordance with this SECTION
11.2(d). Prior to the settlement of any dispute as provided in this SECTION
11.2(d), the Escrow Agent is authorized and directed to retain such portion of
the Escrow Fund which is the subject of or involved in the dispute.

(e) In determining the amount of Damages to be paid from the
Escrow Fund to Hach or a Hach Party in any particular instance, the amount of
Damages to be paid shall be reduced (or, as applicable, Hach or the appropriate
Hach Party shall repay the Escrow Fund) to the extent of:

(i) any tax savings (assuming a tax rate of 35%)
realized by Hach or any Hach Party less the amount of any Taxes Hach or any Hach
Party is obligated to pay by reason of the receipt of the related
indemnification amount from the Escrow Fund, or

(ii) any proceeds received by Hach or any Hach Party from
any insurance policy with respect thereto.

All payments or distributions to Hach or any Hach Party shall be treated
as adjustments to the purchase price.

Notwithstanding anything to the contrary contained herein, if Hach is not
acting in good faith with respect to any settlement, adjustment or compromise
of, or the conduct or cessation of

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the defense of, any Third Party Claim over which or to the extent to which it
has sole control, the Representative shall be entitled to exercise all legal and
equitable remedies related thereto. The Representative shall not be deemed to
control any Third Party Claim solely by reason of the fact that the
Representative assists at his own expense in the defense thereof as provided in
SECTION 11.2(b)(ii)(c).

(f) No new Claim may be brought after the Escrow Release Date,
except that notwithstanding anything to the contrary contained herein or in the
Escrow Agreement, Hach may revise any Pending Claim at anytime after the Escrow
Release Date.

11.3 THE REPRESENTATIVE.

(a) ETS hereby authorizes and directs Harry Stephenson to take
such action, and to exercise such rights, power and authority, as are
authorized, delegated and granted to the Representative hereunder and under the
Escrow Agreement in connection with the transactions contemplated hereby and
thereby, and to exercise such rights, power and authority, as are incidental
thereto. Approval of the Merger by the ETS stockholders shall constitute
ratification by the ETS stockholders of the appointment of the Representative in
accordance herewith and agreement to be bound by the actions of the
Representative taken hereunder and under the Escrow Agreement.

(b) Upon the resignation, death or inability of Harry
Stephenson to act as Representative, John Gildea shall be the successor
Representative. If John Gildea is unable or unwilling to act as successor
Representative, the Surrendering Stockholders shall vote to select a successor
Representative (with each Surrendering Stockholder or their heirs or personal
representatives having one vote for each share of ETS Common Stocks owned
immediately prior to the Effective Time). No appointment of a successor shall
be effective unless such successor agrees in writing to be bound by the terms of
ARTICLE 11 of this Agreement and the Escrow Agreement.

(c) ETS agrees that the provisions set forth in this SECTION
11.3 shall not limit in any respect the obligations of the Representative and
shall in no way impose any obligations on Hach other than those explicitly set
forth in this Agreement or the Escrow Agreement. In particular, notwithstanding
in any case any notice received by Hach to the contrary, Hach shall be fully
protected in relying upon and shall be entitled to (A) rely upon actions,
decisions and determinations of the Representative and (B) assume that all
actions, decisions and determinations of the Representative are fully authorized
and binding upon the Representative and the Surrendering Stockholders.

(d) The Representative shall not be liable to the Surrendering
Stockholders for the performance of any act or the failure to act so long as he
acted or failed to act in good faith and such action or inaction did not
constitute willful misconduct or gross negligence.

11.4 EFFECTIVENESS OF SECTION 11.1. The provisions of SECTION 11.1
hereof shall have no force and effect unless and until the Merger is
consummated.

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11.5 SOLE AND EXCLUSIVE REMEDY. Except as provided by the proviso in
Section 11.1(c) of this Agreement, a claim for indemnification pursuant to this
ARTICLE 11 will be Hach's, any Hach Party's and Mergerco's sole and exclusive
remedy at law for breach or non-fulfillment by ETS of any representation,
warranty, covenant, agreement, obligation and indemnity hereunder, and Hach and
Mergerco will not be able to avoid any limitations on indemnification set forth
in this Agreement by electing to pursue some other action or remedy; provided,
however, this Section 11.5 shall not limit Hach or any Hach Party seeking or
obtaining any equitable remedies with respect to this Agreement or any remedies
that may be available to it in the case of fraud or any intentional
misrepresentation or omission.

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IN WITNESS WHEREOF, Hach, Mergerco and ETS have caused this Agreement and
Plan of Merger to be duly executed as of the day and year first above written.

HACH COMPANY

By: /s/ Bruce J. Hach
--------------------------------
Bruce J. Hach, President

HACH ACQUISITION CORP.

By: /s/ Gary R. Dreher
--------------------------------
Gary R. Dreher,Vice President,
Treasurer and Secretary

ENVIRONMENTAL TEST SYSTEMS, INC.

By: /s/ Mark J. Stephenson
--------------------------------
Mark J. Stephenson, President

/s/Harry Stephenson
---------------------------------------------
Harry Stephenson, as Representative

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APPENDIX III

INDIANA BUSINESS CORPORATION LAW
DISSENTERS' RIGHTS

IC 23-1-44-1 "CORPORATION" DEFINED

As used in this chapter, "corporation" means the issuer of
the shares held by a dissenter before the corporate action,
or the surviving or acquiring corporation by merger or share
exchange of that issuer.

IC 23-1-44-2 "DISSENTER" DEFINED

As used in this chapter, "dissenter" means a shareholder who
is entitled to dissent from corporate action under section 8
of this chapter and who exercises that right when and in the
manner required by sections 10 through 18 of this chapter.

IC 23-1-44-3 "FAIR VALUE" DEFINED

As used in this chapter, "fair value," with respect to a
dissenter's shares, means the value of the shares immediately
before the effectuation of the corporate action to which the
dissenter objects, excluding any appreciation or depreciation
in anticipation of the corporate action unless exclusion
would be inequitable.

IC 23-1-44-4 "INTEREST" DEFINED

As used in this chapter, "interest" means from the effective
date of the corporate action until the date of payment, at
the average rate currently paid by the corporation on its
principal bank loans or, if none, at a rate that is fair and
equitable under all the circumstances.

IC 23-1-44-5 "RECORD SHAREHOLDER" DEFINED

As used in this chapter, "record shareholder" means the
person in whose name shares are registered in the records of
a corporation or the beneficial owner of shares to the extent
that treatment as a record shareholder is provided under a
recognition procedure or a disclosure procedure established
under IC 23-1-30-4.

IC 23-1-44-7 "BENEFICIAL SHAREHOLDER" DEFINED

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APPENDIX III

As used in this chapter, "beneficial shareholder" means the
person who is a beneficial owner of shares held by a nominee
as the record shareholder.

IC 23-1-44-7 "SHAREHOLDER" DEFINED

As used in this chapter, "shareholder" means the record
shareholder or the beneficial shareholder.

IC 23-1-44-9-8 RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES

(a) A shareholder is entitled to dissent from, and obtain
payment of the fair value of the shareholder's shares in
the event of, any of the following corporate actions:

(1) Consummation of a plan of merger to which the
corporation is a party if:

(A) shareholder approval is required for the
merger by IC 23-1-40-3 or the articles of
incorporation; and

(B) the shareholder is entitled to vote on the
merger

(2) Consummation of a plan of share exchange to which
the corporation is a party as the corporation whose
shares will be acquired, if the shareholder is
entitled to vote on the plan.

(3) Consummation of a sale or exchange of all, or
substantially all, of the property of the
corporation other than in the usual and regular
course of business, if the shareholder is entitled
to vote on the sale or exchange, including a sale
in dissolution, but not including a sale pursuant
to court order or a sale for cash pursuant to a
plan by which all or substantially all of the net
proceeds of the sale will be distributed to the
shareholders within one (1) year after the date of
sale.

(4) The approval of a control share acquisition under
IC 23-1-42.

(5) Any corporate action taken pursuant to a
shareholder vote to the extent the articles of
incorporation, bylaws, or a resolution of the board
of directors provides that voting or nonvoting
shareholders are entitled to dissent and obtain
payment for their shares.

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APPENDIX III

(b) This section does not apply to the holders of shares of
any class or series if, on the date fixed to determine
the shareholders entitled to receive notice of and vote
at the meeting of shareholders at which the merger, plan
of share exchange, or sale or exchange of property is to
be acted on, the shares of that class or series were:

(1) registered on a United States securities exchange
registered under the Exchange Act (as defined in IC
23-1-43-9); or

(2) traded on the National Association of Securities
Dealers, Inc. Automated Quotations system Over-the-
Counter Markets--National Market Issues or a
similar market.

(1) who is entitled to dissent and obtain payment for
the shareholder's shares under this chapter; or

(2) who would be so entitled to dissent and obtain
payment but for the provisions of subsection (b);
may not challenge the corporate action creating (or
that, but for the provisions of subsection (b),
would have created) the shareholder's entitlement.

IC 23-1-44-9 DISSENTERS' RIGHTS OF BENEFICIAL SHAREHOLDER

(a) A record shareholder may assert dissenters' rights as to
fewer than all the shares registered in the
shareholder's name only if the shareholder dissents with
respect to all shares beneficially owned by any one (1)
person and notifies the corporation in writing of the
name and address of each person on whose behalf the
shareholder asserts dissenters' rights. The rights of a
partial dissenter under this subsection are determined
as if the shares as to which the shareholder dissents
and the shareholder's other shares were registered in
the names of different shareholders.

(b) A beneficial shareholder may assert dissenters' rights
as to shares held on the shareholder's behalf only if:

(1) the beneficial shareholder submits to the
corporation the record shareholder's written
consent to the dissent not later than the time the
beneficial shareholder asserts dissenters' rights;
and

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APPENDIX III

(2) the beneficial shareholder does so with respect to
all the beneficial shareholder's shares or those
shares over which the beneficial shareholder has
power to direct the vote.

IC 23-1-44-10 PROPOSED ACTION CREATING DISSENTERS' RIGHTS; NOTICE

(a) If proposed corporate action creating dissenters' rights
under section 8 of this chapter is submitted to a vote
at a shareholders' meeting, the meeting notice must
state that shareholders are or may be entitled to assert
dissenters' rights under this chapter.

(b) If corporate action creating dissenters' rights under
section 8 of this chapter is taken without a vote of
shareholders, the corporation shall notify in writing
all shareholders entitled to assert dissenters' rights
that the action was taken and send them the dissenters'
notice described in section 12 of this chapter.

IC 23-1-44-11 PROPOSED ACTION CREATING DISSENTERS' RIGHTS; ASSERTION OF
DISSENTERS' RIGHTS

(a) If proposed corporate action creating dissenters' rights
under section 8 of this chapter is submitted to vote at
a shareholders' meeting, a shareholder who wishes to
assert dissenters' rights:

(1) must deliver to the corporation before the vote is
taken written notice of the shareholder's intent to
demand payment for the shareholder's shares if the
proposed action is effectuated; and

(2) must not vote the shareholder's shares in favor of
the proposed action.

(b) A shareholder who does not satisfy the requirements of
subsection (a) is not entitled to payment for the
shareholder's shares under this chapter.

IC 23-1-44-12 DISSENTERS' NOTICE; CONTENTS

(a) If proposed corporate action creating dissenter's rights
under section 8 of this chapter is authorized at a
shareholders' meeting, the corporation shall deliver a
written dissenters' notice to all shareholders who
satisfied the requirements of section 11 of this
chapter.

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APPENDIX III

(b) The dissenters' notice must be sent no later than ten
(10) days after approval by the shareholders, or if
corporate action is taken without approval by the
shareholders, then ten (10) days after the corporate
action was taken. The dissenters' notice must:

(1) state where the payment demand must be sent and
where and when certificates for certificated shares
must be deposited:

(2) inform holders of uncertificated shares to what
extent transfer of the shares will be restricted
after the payment demand is received;

(3) supply a form for demanding payment that includes
the date of the first announcement to news media or
to shareholders of the terms of the proposed
corporate action and requires that the person
asserting dissenters' rights certify whether or not
the person acquired beneficial ownership of the
shares before that date;

(4) set a date by which the corporation must receive
the payment demand, which date may not be fewer
than thirty (30) nor more than sixty (60) days
after the date the subsection (a) notice is
delivered; and

(5) be accompanied by a copy of this chapter.

IC 23-1-44-13 DEMAND FOR PAYMENT AND DEPOSIT OF SHARES BY SHAREHOLDER

(a) A shareholder sent a dissenters' notice described in IC
23-1-42-11 or in section 12 of this chapter must demand
payment, certify whether the shareholder acquired
beneficial ownership of the shares before the date
required to be set forth in the dissenters' notice under
section 12(b)(3) of this chapter, and deposit the
shareholder's certificates in accordance with the terms
of the notice.

(b) The shareholder who demands payment and deposits the
shareholder's shares under subsection (a) retains all
other rights of a shareholder until these rights are
canceled or modified by the taking of the proposed
corporate action.

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APPENDIX III

(c) A shareholder who does not demand payment or deposit the
shareholder's share certificates where required, each by
the date set in the dissenters' notice, is not entitled
to payment for the shareholders' shares under this
chapter and is considered, for purposes of this article,
to have voted the shareholder's shares in favor of the
proposed corporate action.

IC 1-44-14 UNCERTIFICATED SHARES; RESTRICTION ON TRANSFER; DISSENTERS;
RIGHTS

(a) The corporation may restrict the transfer of
uncertificated shares from the date the demand for their
payment is received until the proposed corporate action
is taken or the restrictions released under section 16
of this chapter.

(b) The person for whom dissenters' rights are asserted as
to uncertificated shares retains all other rights of a
shareholder until these rights are canceled or modified
by the taking of the proposed corporate action.

IC 23-1-44-15 PAYMENT TO DISSENTER

(a) Except as provided in section 17 of this chapter, as
soon as the proposed corporate action is taken, or, if
the transaction did not need shareholder approval and
has been completed, upon receipt of a payment demand,
the corporation shall pay each dissenter who complied
with section 13 of this chapter the amount the
corporation estimates to be the fair value of the
dissenter's shares.

(b) The payment must be accompanies by:

(1) the corporation's balance sheet as of the end of a
fiscal year ending not more than sixteen (16)
months before the date of payment, an income
statement for that year, a statement of changes in
shareholder's equity for that year, and the latest
available interim financial statements, if any;

(2) a statement of the corporation's estimate of the
fair value of the shares; and

(3) a statement of the dissenter's right to demand
payment under section 18 of this chapter.

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APPENDIX III

IC 23-1-44-16 FAILURE TO TAKE ACTION; RETURN OF CERTIFICATES; NEW ACTION BY
CORPORATION

(a) If the corporation does not take the proposed action
within sixty (60) days after the date set for demanding
payment and depositing share certificates, the
corporation shall return the deposited certificates and
release the transfer restrictions imposed on
uncertificated shares.

(b) If after returning deposited certificates and releasing
transfer restrictions, the corporation takes the
proposed action, it must send a new dissenters' notice
under section 12 of this chapter and repeat the payment
demand procedure.

IC 23-1-44-17 WITHHOLDING PAYMENT BY CORPORATION'S ESTIMATE OF FAIR VALUE;
AFTER-ACQUIRED SHARES

(a) A corporation may elect to withhold payment required by
section 15 of this chapter from a dissenter unless the
dissenter was the beneficial owner of the shares before
the date set forth in the dissenters' notice as the date
of the first announcement to news media or to
shareholders of the terms of the proposed corporate
action.

(b) To the extent the corporation elects to withhold payment
under subsection (a), after taking the proposed
corporate action, it shall estimate the fair value of
the shares and shall pay this amount to each dissenter
who agrees to accept it in full satisfaction of the
dissenter's demand. The corporation shall send with its
offer a statement of its estimate of the fair value of
the shares and a statement of the dissenter's right to
demand payment under section 18 of this chapter.

IC 23-1-44-18 DISSENTERS' ESTIMATE OF FAIR VALUE; DEMAND FOR PAYMENT;
WAIVER

(a) A dissenter may notify the corporation in writing of the
dissenter's own estimate of the fair value of the
dissenter's shares and demand payment of the dissenter's
estimate (less any payment under section 15 of this
chapter), or reject the corporation's offer under
section 17 of this chapter and demand payment of the
fair value of the dissenter's shares, if:

(1) the dissenter believes that the amount paid under
section 15 of this chapter or offered under section
17 of this chapter is less than the fair value of
the dissenter's shares;

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APPENDIX III

(2) the corporate fails to make payment under section
15 of this chapter within sixty (60) days after the
date set for demanding payment; or

(3) the corporation, having failed to take the proposed
action, does not return the deposited certificates
or releases the transfer restrictions imposed on
uncertificated shares within sixty (60) days after
the date set for demand payment.

(b) A dissenter waives the right to demand payment under
this section unless the dissenter notifies the
corporation of the dissenter's demand in writing under
subsection (a) within thirty (30) days after the
corporation made or offered payment for the dissenter's
shares.

IC 23-1-44-19 COURT PROCEEDING TO DETERMINE FAIR VALUE; JUDICIAL APPRAISAL

(a) If a demand for payment under IC 23-1-42-11 or under
section 18 of this chapter remains unsettled, the
corporation shall commence a proceeding within sixty
(60) days after receiving the payment demand and
petition the court to determine the fair value of the
shares. If the corporation does not commence the
proceeding within the sixty (60) day period, it shall
pay each dissenter whose demand remains unsettled the
amount demanded.

(b) The corporation shall commence the proceeding in the
circuit or superior court of the county where a
corporation's principal office (or, if none in Indiana,
its registered office) is located. If the corporation
is a foreign corporation without a registered office in
Indiana, it shall commence the proceeding in the county
in Indiana where the registered office of the domestic
corporation merged with or whose shares were acquired by
the foreign corporation was located.

(c) The corporation shall make all dissenters (whether or
not residents of this state) whose demands remain
unsettled parties to the proceeding as in an action
against their shares and all parties must be served with
a copy of the petition. Nonresidents may be served by
registered or certified mail or by publication as
provided by law.

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APPENDIX III

(d) The jurisdiction of the court in which the proceeding is
commenced under subsection (b) is plenary and exclusive.
The court may appoint one (1) or more persons as
appraisers to receive evidence and recommend decision on
the question of fair value. The appraisers have the
powers described in the order appointing them or in any
amendment to it. The dissenters are entitled to the
same discovery rights as parties in other civil
proceedings.

(e) Each dissenter made a party to the proceeding is
entitled to judgment:

(1) for the amount, if any, by which the court finds
the fair value of the dissenter's shares, plus
interest, exceeds the amount paid by the
corporation; or

(2) for the fair value, plus accrued interest, of the
dissenter's after-acquired shares for which the
corporation elected to withhold payment under
section 17 of this chapter.

IC 23-1-44-20 COSTS; FEES; ATTORNEY FEES

(a) The court in an appraisal proceeding commenced under
section 19 of this chapter shall determine all costs of
the proceeding, including the reasonable compensation
and expenses of appraisers appointed by the court. The
court shall assess the costs against such parties and in
such amounts as the court finds equitable.

(b) The court may also assess the fees and expenses of
counsel and experts for the respective parties, in
amounts the court finds equitable:

(1) against the corporation and in favor of any or all
dissenters if the court finds the corporation did
not substantially comply with the requirements of
sections 10 through 18 of this chapter or

(2) against either the corporation or a dissenter, in
favor of any other party, if the court finds that
the party against whom the fees and expenses are
assessed acted arbitrarily, vexatiously, or not in
good faith with respect to the rights provided by
this chapter.

(c) If the court finds that the services of counsel for any
dissenter were of substantial benefit to other
dissenters similarly situated and that the fees for
those services should not be assessed against the
corporation, the court may award to these counsel
reasonable fees to be paid out of the amounts awarded
the dissenters who were benefited.

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APPENDIX IV
FORM OF ESCROW AGREEMENT

ESCROW AGREEMENT

ESCROW AGREEMENT dated as of ______________ ____, 1998 (the "AGREEMENT"),
by and among Hach Company, a Delaware corporation ("HACH"), Harry T. Stephenson
as Representative (the "REPRESENTATIVE") of the holders of ETS Class A Common
Stock and ETS Class B Common Stock, and American National Bank and Trust Company
of Chicago, as escrow agent ("ESCROW AGENT"). All capitalized terms used herein
and not otherwise defined shall have the same respective meanings as in the
Agreement and Plan of Merger dated as of January ____, 1998 attached hereto as
EXHIBIT A (as it may be amended from time to time, the "MERGER AGREEMENT"),
among Hach, Hach Acquisition Corp., a wholly-owned subsidiary of Hach
("MERGERCO"), and Environmental Test Systems Inc. ("ETS").

WHEREAS, Hach, Mergerco and ETS have concurrently herewith entered into the
Merger Agreement pursuant to which ETS will, at the Effective Time, be merged
with and into Mergerco, which shall be the "Surviving Corporation" in the
Merger, and whose name shall be changed to Environmental Test Systems, Inc. at
the Effective Time;

WHEREAS, pursuant to the Merger Agreement, upon consummation of the Merger,
(i) each share of ETS Class A Common Stock (other than Dissenting Shares) will
be converted into the right to receive the Class A Merger Consideration and (ii)
each share of ETS Class B Common Stock (other than Dissenting Shares) will be
converted into the right to receive the Class B Merger Consideration;

WHEREAS, the Merger Agreement further provides, among other things, that at
the Closing Hach will deliver the Escrow Deposit (as defined herein) to the
Escrow Agent which amount will be held by the Escrow Agent subject to the terms
and conditions of this Escrow Agreement to provide a source of funds to
reimburse, indemnify and hold harmless the Hach Parties for Damages, and to pay
certain Indemnification Expenses, under Article 11 of 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:

1. ESTABLISHMENT OF ESCROW FUND; RIGHTS WITH RESPECT TO VOTING AND
DIVIDENDS.

1.1 Immediately following the Effective Time, Hach shall deliver to the
Escrow Agent (i) that number of shares of Hach Class A Common Stock identified
on SCHEDULE I to this Escrow Agreement, (ii) that number of shares of Hach
Common Stock identified on SCHEDULE I to this Escrow Agreement, and (iii) cash
in the amount identified on SCHEDULE I to this Escrow Agreement, which shares of
Hach Common Stocks (valued in accordance with Section 2.1(c) of the Merger
Agreement) and cash have an aggregate value at the Effective Time of One Million
Seven Hundred Fifty Thousand Dollars ($1,750,000) (the "ESCROW DEPOSIT"), and
the Escrow Agent acknowledges receipt of such

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amount. All certificates representing Hach Common Stocks delivered as part of
the Escrow Deposit (or otherwise made a part of the Escrow Fund (as described
below)) will be issued in the name of "American National Bank and Trust Company,
as Escrow Agent FBO Former ETS Shareholders." The Escrow Agent agrees to hold
and dispose of the Escrow Deposit, together with any shares issued in payment or
distribution of any stock dividend on or stock split or other recapitalization
of, or in respect of, any of the shares of Hach Common Stocks held as part of
the Escrow Deposit, cash dividends, distributions or other income or capital
appreciation received therefrom, and any interest or other return obtained from
the investment of any cash proceeds (hereinafter collectively referred to as the
"ESCROW FUND"), in accordance with the terms and conditions of this Escrow
Agreement.

1.2 Each of the Surrendering Shareholders shall be entitled to vote those
shares of Hach Common Stocks as are held from time-to-time for the benefit of
such Surrendering Stockholder in the Escrow Fund (as identified on SCHEDULE I)
as provided in Hach's Restated Certificate of Incorporation and otherwise in
accordance with Delaware corporation law.

2. INVESTMENT OF ESCROW FUND; ACCOUNTING.

2.1 The Escrow Agent shall hold any shares of Hach Common Stocks
delivered as part of the Escrow Fund subject to its obligations under this
Escrow Agreement. Any available funds which may become part of the Escrow Fund
shall be initially invested in a money market fund of a United States commercial
bank selected by Hach until further instructions are received from Hach and the
Representative.

2.2 The Escrow Agent shall segregate the Escrow Fund into two (2)
accounts: (i) Account-A which shall be composed of that portion of the Escrow
Deposit so identified on SCHEDULE I, together with all dividends, distributions,
interest and other income accumulation or capital appreciation attributable to
that portion of the Escrow Deposit (the "ESCROW EARNINGS"); (ii) Account-B which
shall be composed of that portion of the Escrow Deposit so identified on
SCHEDULE I, together with all Escrow Earnings attributable to that portion of
the Escrow Deposit. The Escrow Agent shall maintain a ledger setting forth the
amounts held in Account-A and Account-B.

2.3 The Escrow Agent shall deliver to Hach and the Representative a
monthly accounting in writing of property constituting the Escrow Fund and all
distributions therefrom during such month.

2.4 The Escrow Agent shall be responsible for reporting to the
Internal Revenue Service any information required regarding distributions from
the Escrow Fund to the Surrendering Stockholders and shall deliver annually to
the Surrendering Stockholders Form 1099 with respect to such distributions.

3. NOTICE OF CLAIMS. From time to time, as provided by and in accordance
with Article 11 of the Merger Agreement, the Hach Parties may provide the Escrow
Agent with copies of Claim Notices which have been provided to the
Representative, each of which shall identify a Pending Claim Amount.

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4. DELIVERY OF ESCROW FUNDS BY ESCROW AGENT.

The Escrow Agent shall hold the Escrow Funds in escrow until authorized
hereunder to deliver the same or any portion thereof, as follows:

4.1 As soon as practicable after each of the first five six-month
anniversary dates of the Effective Time (each an "INTERIM RELEASE DATE"), the
Escrow Agent shall deliver to each Surrendering Stockholder an amount equal to
such person's Escrow Share (as defined in Section 4.5 hereof) of all Escrow
Earnings earned on the portion of the Escrow Deposit being held in the Escrow
Fund on each such Interim Release Date having an Escrow Value (as defined in
Section 4.6(b)), in excess of all Pending Claim Amounts; provided that with
respect to any Pending Claim Amount for which a Claim Notice has been submitted
during the sixth month period prior to such Interim Release Date, the Escrow
Earnings attributable to such Pending Claim Amount from and after the date of
delivery of the applicable Notice of Claim shall be retained in escrow as part
of the Escrow Funds subject to the provisions of Section 4.3. For example, if
Hach submits its first Claim Notice for a $200,000 Claim on the third month
anniversary of the Effective Time and there has been no Determination with
respect to such Claim on the sixth month anniversary of the Effective Time and
no other Claims have been brought by a Hach Party as of such date, the Escrow
Agent would pay the Surrendering Stockholders interest on $1,650,000 for the
entire six month period and interest on $50,000 for the first three month
period. For purposes of this example, $100,000 of the $200,000 Claim was
applied to the Basket Amount.

4.2 The Escrow Agent shall continue to hold in escrow that portion of
the Escrow Deposit having an Escrow Value equal to any outstanding Pending Claim
Amounts, together with all Escrow Earnings attributable to such portions which
are then held as part of the Escrow Fund, until there has been a Determination
of the Claim with respect such Pending Claim Amounts and the underlying Claim in
accordance with the provisions of Section 11.2 of the Merger Agreement.

4.3 (a) Hach shall give notice of a Determination of the Claim
pursuant to Section 11.2(c)(i)(A) or Section 11.2(c)(ii)(A) of the Merger
Agreement to the Representative and the Escrow Agent within thirty days after
the date Hach is notified of the Determination of the Claim pursuant to such
subsection, which notice shall (i) contain a certification of an officer of Hach
to the effect that Hach is entitled to payment pursuant to Section 11.2(c)(i)(A)
or Section 11.2(c)(ii)(A), as applicable, of the Merger Agreement hereof and
(ii) include an invoice or other documentation supporting the Determined Claim
Amount to be paid.

(b) Hach shall give notice of a Determination of the Claim
pursuant to Section 11.2(c)(i)(B), Section 11.2(c)(ii)(B) or Section 11.2
(c)(ii)(C) of the Merger Agreement hereof to the Representative and the Escrow
Agent within thirty days after the date Hach is notified of the Determination of
the Claim pursuant to such subsection, which notice shall be accompanied by a
copy of any agreement, final arbitration award, final court order, judgment or
decree evidencing such Determination of the Claim and identifying the Determined
Claim Amount to be paid.

(c) On the third business day after receipt of the notice of a
Determination of the Claim from Hach referred to in Section 4.3(a) or Section
4.3(b) hereof the Escrow Agent shall

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deliver to Hach, such other Hach Party and/or any person designated by Hach,
that portion of the Escrow Deposit having a value equal to the Determined Claim
Amount, if any, relating to such Claim payable to Hach or such other Hach Party
pursuant to such notice or certificate plus an amount equal to the Escrowed
Earnings thereon accrued from and after the date of the delivery of the Notice
of Claim with respect to such Claim.

4.4 (a) As soon as practicable after the third anniversary of the
Effective Time ("ESCROW RELEASE DATE"), the Escrow Agent shall deliver to each
Surrendering Stockholder such person's Escrow Share of the Escrow Fund as of the
Escrow Release Date, less that portion of the Escrow Deposit having an Escrow
Value equal to the aggregate of all Pending Claims as of such date, together
with all Escrow Earnings attributable to such portion which are then held as
part of the Escrow Fund.

(b) Promptly after a Determination of the Claim with respect to
any Pending Claim which occurs after the Escrow Release Date and the delivery to
Hach or such other Hach Party and/or other third party of the required
distribution from the Escrow Fund in respect thereof in accordance with this
Escrow Agreement, the Escrow Agent shall deliver to each Surrendering
Stockholder such person's Escrow Share, if any, of that portion of the Escrow
Deposit having an Escrow Value equal to the difference between (i) the amount of
such Pending Claim and (ii) the Determined Claim Amount relating thereto,
together with any Escrow Earnings attributable to the amount of such difference
which have not been previously distributed. The Escrow Agent shall deliver to
the Surrendering Stockholders all amounts remaining in the Escrow Fund after the
resolution of the last Pending Claim.

4.5 For purposes of this Escrow Agreement, a Surrendering
Stockholder's Escrow Share shall be as set forth in SCHEDULE II.

4.6 (a) Any payments by the Escrow Agent to or on behalf of Hach or
a Hach Party and in satisfaction of a Determined Claim Amount shall be made (i)
28% from the Escrow Fund-Account A (ii) 72% from the Escrow Fund-Account B (with
_____% of the amounts due from such fund payable in cash, _____% in Hach Class A
Common Stock and _____% in Hach Common Stock). In the event payments are to be
made to third parties in satisfaction of any Determined Claim Amount, the Escrow
Agent is authorized to sell those shares of Hach Common Stocks which would
otherwise be delivered on the NASDAQ Stock Market in order to fund an all cash
payment; provided that the Escrow Agent may sell to Hach, and Hach may purchase,
such shares of Hach Common Stocks at their Escrow Value in lieu of a market
sale.

(b) For purposes of determining the "ESCROW VALUE" of the
components of the Escrow Fund (i) cash shall be attributed its dollar value and
(ii) the value of each share of Hach Common Stocks shall be deemed to be the
average of the daily closing prices of one share of such class of stock, as
quoted on The National Association of Securities Dealers Automated Quotations -
National Market System ("NASDAQ"), for the 20 NASDAQ trading days immediately
preceding and including the Valuation Date; provided that if there is no
reported closing price of such shares of Hach Common Stock or Hach Class A
Common Stock, on NASDAQ for any such trading day, the closing price for such day
for such stock will be deemed

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to be the mean of the closing bid and asked quotations on NASDAQ for that day
for such stock (the respective value for each class of stock being referred to
as the "AVERAGE MARKET PRICE"). The term "VALUATION DATE" shall mean the date
which is five (5) business days prior to the date a notice of Determination of
the Claim is delivered to the Escrow Agent (or if the Escrow Value is being
determined for purposes of Section 4.1, the Interim Release Date) or, if such
date is not a NASDAQ trading day, the NASDAQ trading day first immediately
preceding such date.

5. TERMINATION OF THE ESCROW AGREEMENT.

This Escrow Agreement, except for Section 6.4 hereof, which shall continue
in effect, shall terminate upon the distribution of all of the Escrow Fund in
accordance with Section 4 hereof.

6. DUTIES, ETC., OF ESCROW AGENT.

6.1 The Escrow Agent undertakes to perform only such duties as are
expressly set forth herein. The Escrow Agent shall not be bound by any waiver,
modification, amendment, termination, cancellation or revision of this Escrow
Agreement, unless any of the foregoing is in writing and signed by the other
parties hereto, and, if the Escrow Agent's duties hereunder are affected, unless
the Escrow Agent shall have given its prior written consent thereto. The Escrow
Agent shall not be bound by any assignment by any party hereto of rights
hereunder unless the Escrow Agent shall have received written notice thereof
from the assignor. The Escrow Agent shall perform any acts ordered by a court
of competent jurisdiction or an arbitrator pursuant to Section 11.2(d) of the
Merger Agreement.

6.2 The Escrow Agent makes no representation as to the validity,
value, genuineness or the collectability of any security or other document or
instrument held by or delivered to the Escrow Agent.

6.3 The Escrow Agent agrees to serve as Escrow Agent in accordance
with the fee schedule which has been delivered to the Representative prior to
the date of this Escrow Agreement and initialed by the Representative which fees
will be paid by Hach. The Representative and Hach also agree to reimburse the
Escrow Agent (each equally) for its reasonable fees and other expenses
(including reasonable legal fees and expenses) incurred by the Escrow Agent in
connection with extraordinary services required hereunder or on account of
disputes between or among Hach, the Representative and any third parties.

6.4 The Representative and Hach hereby agree (each equally) to
indemnify the Escrow Agent for, and to hold it harmless against, any and all
claims, suits, actions, proceedings, investigations, judgments, deficiencies,
damages, settlements, liabilities and expenses (including reasonable legal fees
and expenses of attorneys chosen by the Escrow Agent) as and when incurred,
arising out of or based upon any act, omission, alleged act or alleged omission
by the Escrow Agent or any other cause, in any case in connection with the
acceptance of, or performance or non-performance by the Escrow Agent of any of
the Escrow Agent's duties under this Escrow Agreement, except as a result of the
Escrow Agent's willful misconduct or gross negligence. The Escrow Agent is
hereby granted a lien on the Escrow Fund to secure the foregoing indemnity.
Except in cases of the Escrow

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Agent's willful misconduct or gross negligence, the Escrow Agent shall be fully
protected by acting in reliance upon any certificate, statement, request,
notice, advice, direction, other agreement or instrument or signature believed
by the Escrow Agent to be genuine, by assuming that any person purporting to
give the Escrow Agent any of the foregoing in accordance with the provisions
hereof, or in connection with either this Escrow Agreement or the Escrow Agent's
duties hereunder, has been authorized to do so, or by acting or failing to act
in good faith on the advice of any counsel retained by the Escrow Agent. The
Escrow Agent shall not be liable for any mistake or fact or law or any error of
judgment, or for any act or omission, except as a result of its willful
misconduct or negligence.

6.5 Hach and the Representative understand that (except for
applicable FDIC insurance) investments in the Escrow Fund are not insured by the
United States government or any agency or instrumentality thereof or of any
State or municipality and that such investments do not earn a fixed rate of
return. The Escrow Agent shall not be liable for any loss of the Escrow Fund or
depreciation in the value of the Escrow Fund. The Escrow Agent shall incur no
liability whatever in connection with its duties hereunder except for willful
misconduct or gross negligence so long as it acts in good faith. In the event
that the Escrow Agent shall be uncertain as to its duties or rights hereunder,
or shall receive any certificate, statement, request, notice, advice, direction
or other agreement or instrument from any other party with respect to the Escrow
Fund which, in the Escrow Agent's opinion is in conflict with any of the
provisions of this Escrow Agreement, or shall be advised that a dispute has
arisen with respect to the payment, ownership or right of possession of the
Escrow Fund or any part thereof (or as to the delivery, non-delivery or content
of any certificate statement, request, notice, advice, direction or other
agreement or instrument), the Escrow Agent shall be entitled without liability
to any person, to refrain from taking any action other than to use its best
efforts to keep safely the Escrow Fund until the Escrow Agent shall be directed
in accordance herewith, but the Escrow Agent shall be under no duty to institute
or defend any proceeding, although the Escrow Agent may, in its discretion and
at the expense of the Representative and Hach as provided in Section 6.4 hereof,
institute or defend such proceedings.

6.6 The parties hereto authorize the Escrow Agent, if the Escrow
Agent is threatened with litigation or is sued, to interplead all interested
parties in any court of competent jurisdiction and to deposit the Escrow Fund
with the clerk of that court.

6.7 All of the Escrow Agent's obligations hereunder are contained in
this Escrow Agreement. The Escrow Agent shall not have any responsibility under
the Merger Agreement.

7. RESIGNATION, SUCCESSOR ESCROW AGENT.

7.1 The Escrow Agent may resign and be discharged from its duties or
obligations hereunder at any time by giving no less than fifteen (15) business
days notice of such resignation to Hach and the Representative specifying the
date when such resignation shall take effect. Thereafter, the Escrow Agent
shall have no further obligation hereunder except to hold the Escrow Fund as
depositary. In such event, the Escrow Agent shall refrain from taking any
action until it shall receive joint written instructions from Hach and the
Representative designating a banking corporation, trust company, attorney or
other person as successor Escrow Agent. Upon receipt of such instructions, the
Escrow Agent shall promptly deliver the Escrow Fund to such successor Escrow
Agent and render the

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accounting required by Section 7.3 and shall thereafter have no further
obligations hereunder.

7.2 Hach and the Representative acting together shall have the right
to terminate the appointment of the Escrow Agent hereunder by giving notice in
writing of such termination to the Escrow Agent, specifying the date upon which
such termination shall take effect. In the event of such termination, Hach and
the Representative agree that they will jointly appoint a successor Escrow Agent
within fifteen (15) business days of such notice and the Escrow Agent hereby
agrees that it shall turn over and deliver to such successor Escrow Agent all of
the Escrow Fund and any other amounts held by it pursuant to this Escrow
Agreement and render the accounting required by Section 7.3. Upon receipt of
the funds and other amounts, the successor Escrow Agent shall thereupon be bound
by all of the provisions hereof.

7.3 In the event of the resignation or removal of the Escrow Agent or
upon the termination of the Escrow Agreement pursuant to Section 7, the Escrow
Agent shall render Hach and the Representative and to the successor Escrow
Agent, if any, an accounting in writing of the property constituting the Escrow
Fund and all distributions therefrom. If a successor Escrow Agent has not been
appointed and has not accepted such appointment by the end of the 15-day notice
period provided in Sections 7.1 and 7.2 above, the Escrow Agent may apply to a
court of competent jurisdiction for the appointment of a successor Escrow Agent,
and the costs, expenses and attorneys' fees which are incurred in connection
with such a proceeding shall be paid by the other parties to this Escrow
Agreement.

8. WAIVERS AND MODIFICATIONS.

Except as otherwise provided in Section 6.1, this Escrow Agreement may be
changed, extended, superseded or canceled, only by a written instrument executed
by Hach and the Representative, and no waiver of compliance with any term or
condition hereof shall be effected unless evidenced by an instrument in writing
duly executed, by the proper party.

9. NOTICES.

All notices or other communications required or permitted hereunder shall
be given in writing and shall be delivered or sent, (i) by personal delivery,
(ii) by telecopy (or like transmission) with a confirming copy by first-class
U.S. Mail, postage prepaid, (iii) by delivery, against receipt from the parties
to whom it is given, by registered or certified U.S. Mail, postage prepaid, or
(iv) by a nationally recognized overnight delivery service as follows:

If to Representative: Harry Stephenson
3201 East Lake Drive North
Elkhart, Indiana 46514
Fax No.________________

with a copy (which William R. Neale, Esq.
shall not constitute Krieg, DeVault, Alexander & Capehart
notice) to: One Indiana Square, Suite 2800

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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

If to Escrow Agent: American National Bank and Trust
Company of Chicago
33 North LaSalle Street
Chicago, Illinois 60690
Attn: Corporate Trust Department
Fax No.: (312) 661-6491

or such other address as a party may from time to time designate writing in
accordance with this Section. All such notices, requests or other
communications 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; (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 above; provided, that any notice or communication
that is received other than during regular business hours of the recipient shall
have been deemed to have been given on the opening of business on the next
business day of recipient.

10. GOVERNING LAW.

This Escrow Agreement shall be governed by the laws of the State of
Delaware without giving effect to its conflict of laws rules.

11. NO ASSIGNMENT; PAYMENTS.

(a) This Escrow Agreement shall be binding upon the successors and
permitted assigns of the parties hereto. No assignment of any rights or
delegation of any obligations provided for herein may be made by the
Representative, the Surrendering Stockholders or the Escrow Agent except that
the Escrow Agent may assign its rights and obligations hereunder in accordance
with the provisions of this Escrow Agreement and the Representative may assign
its rights and obligations hereunder to a successor Representative in accordance
with Section 11.3 of the Merger Agreement.

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Hach may assign any of its rights hereunder and delegate its obligations
hereunder to any purchaser of Hach or the business of Hach. Upon any assignment
by Hach or its assignees, the successor shall agree to be bound by all of the
provisions of this Escrow Agreement that were binding on its assignor. No
assignment of the interest of another party hereto shall be binding on the
Escrow Agent unless and until written evidence of such assignment is filed with
the Escrow Agent.

(b) As soon as practicable after the Effective Time, Hach and the
Representative shall deliver to the Escrow Agent a list of the names and
addresses of all Surrendering Stockholders together with their pro rata interest
in the Escrow Fund. The Escrow Agent shall make any payments owing to such
Surrendering Stockholders hereunder, by a check addressed to each such
Surrendering Stockholder at the address specified therein unless notified by the
Representative of a new address. Hach will deliver to the Escrow Agent copies of
all Letters of Transmittal it receives from the holders of ETS Class A Common
Stock and ETS Class B Common Stock in connection with the Merger.

12. FURTHER ASSURANCES.

If at any time the Escrow Agent shall consider or be advised that any
further agreements, assurances or other documents are reasonably necessary or
desirable to carry out the provisions hereof and the transactions contemplated
hereby, the parties hereto shall execute and deliver any and all such agreements
or other documents, and do all things necessary or appropriate to carry out
fully the provisions hereof.

13. COUNTERPARTS.

This Escrow Agreement may be executed in counterparts, each of which shall
be deemed an original and all of which together shall constitute one and the
same instrument.

14. SECTION HEADINGS.

The section headings contained in this Escrow Agreement are inserted for
purposes of convenience of reference only and shall not affect the meaning or
interpretation hereof.

15. REPRESENTATIVE.

Harry Stephenson has been designated as the initial Representative and in
such capacity shall act as representative of each of the Surrendering
Stockholders in connection with this Escrow Agreement. The Representative shall
serve on the terms set forth in the Merger Agreement including without
limitation all of Section 11.4 of the Merger Agreement. The Representative
shall have no liability to the Escrow Agent, Hach, the Hach Parties and the
Surrendering Stockholders arising out of or based upon any act, omission,
alleged act or alleged omission by the Representative as the result of its
services performed under this Escrow Agreement and Article 11 of the Merger
Agreement, except as a result of the Representative's willful misconduct or
gross negligence (not including ordinary negligence). The Representative shall
have the right to obtain contribution from the Surrendering Stockholders with
respect to any costs, fees, expenses, indemnity, reimbursements or other amount
paid to the Escrow Agent by the Representative under this Escrow Agreement which
are not otherwise

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reimbursed by Hach in amounts which reflect the proportionate share of the
aggregate Class A Merger Consideration and Class B Merger Consideration received
by each such Surrendering Stockholder.

16. ATTACHMENT OF ESCROW FUND; COMPLIANCE WITH LEGAL ORDERS.

In the event that any escrow property shall be attached, garnished, or
levied upon by any court order, or the delivery thereof shall be stayed or
enjoined by an order of a court, or any order, judgment or decree shall be made
or entered by any court order affecting the property deposited under this Escrow
Agreement, or any part thereof, the Escrow Agent is hereby expressly authorized,
in its sole discretion, to obey and comply with all writs, orders or decrees so
entered or issued, which it is advised by legal counsel of its own choosing is
binding upon it, whether with or without jurisdiction, and in the event that the
Escrow Agent obeys or complies with any such writ, order or decree it shall not
be liable to any of the parties hereto or to any other person, firm or
corporation, by reason of such compliance notwithstanding such writ, order or
decree be subsequently reversed, modified, annulled, set aside or vacated.

IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be duly executed as of the day and year first above written.

HACH COMPANY

By:
----------------------------------------
Name:
Title:

-------------------------------------------
Harry Stephenson, as Representative of the
former shareholders of Environmental Test
Systems, Inc.

AMERICAN NATIONAL BANK AND TRUST COMPANY OF
CHICAGO, AS ESCROW AGENT

By:
----------------------------------------
Name:
Title:

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SCHEDULE I

ESCROW DEPOSIT

ACCOUNT-A

__________ shares of Hach Common Stock

All shares of Hach Common Stock and Escrow Earnings in Account-A are held
for the benefit of the ETS ESOP as a Surrendering Stockholder.

ACCOUNT-B

_________ shares of Hach Class A Common Stock
_________ shares of Hach Common Stock
$_________ in cash ("Original Cash Deposit")

All shares of Hach Common Stocks, the Original Cash Deposit and all Escrow
Earnings in Account-B are held for the benefit of Harry T. Stephenson, John R.
Gildea, and Robert C. Boguslaski as Surrendering Stockholders in the following
proportions: Stephenson, 68.87%; Gildea, 18.13%; and Boguslaski, 13.0%.

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SCHEDULE II

ESCROW SHARE OF SURRENDERING SHAREHOLDERS

1. The Escrow Share of the ETS ESOP is 100% of the Escrow Fund-Account-A.

2. The Escrow Share of Harry T. Stephenson is 68.87% of the Escrow Fund-
Account-B.

3. The Escrow Share of John R. Gildea is 18.13% of the Escrow Fund-Account-B.

4. The Escrow Share of Robert C. Boguslaski is 13.00% of the Escrow Fund-
Account-B.

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[COMSTOCK VALUATION ADVISORS, INC. LETTERHEAD]

PRELIMINARY ESOP FAIRNESS OPINION

January 21, 1998

Peoples Bank & Trust Company
As Trustee of the Environmental Test Systems, Inc.
Employee Stock Ownership Plan
130 E. Market Street
Indianapolis, IN 46204

Benefits Committee of the Environmental Test Systems, Inc.
Employee Stock Ownership Plan
23575 County Road 106
Elkhart, IN 46514

Re: ETS ESOP Valuation and Fairness Opinions

Dear Trustee and Committee:

In accordance with the engagement letter between ComStock Valuation Advisors,
Inc. and Peoples Bank & Trust Company as Trustee (the "Trustee") of the
Environmental Test Systems, Inc. ("ETS", or the "Company") Employee Stock
Ownership Plan (the "ESOP"), the terms of which are incorporated herein by this
reference, we have performed a valuation of the common stock of Environmental
Test Systems, Inc. (the "Company") held by the Trustee of the ETS ESOP, and
other analyses of fairness, and herewith submits this opinion on our findings.

The purpose of our engagement is to assess the financial fairness of a proposed
merger of the Company with and into Hach Acquisition Corp., a wholly owned
subsidiary of Hach Company in a tax-free reorganization under the Internal
Revenue Code (the "Transaction"). The merger agreement for the Transaction was
signed on January 21, 1998, and the

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Peoples Bank & Trust Company
And ETS Benefits Committee
January 21, 1998 Page 2

Transaction is contemplated to take place in or around May, 1998. The
consideration to be received by the ETS ESOP is currently contemplated to be
a value of $3,990,000 of Hach Company voting stock, and $490,000 of escrowed
Hach Company voting stock.

BASIS OF VALUATION

Our fairness analysis included an in-depth review of the Company on a going
concern basis. We assessed the fair market value of the Company in
accordance with the following definition:

Fair market value is the price at which the Company's stock would
change hands between a willing buyer and a willing seller,
neither being under any compulsion to buy or sell and both having
reasonable knowledge of all relevant facts.

Our valuation study and fairness analyses were prepared in conformity with
the Uniform Standards of Professional Appraisal Practice as promulgated by
The Appraisal Foundation; and the Business Valuation Standards, Principles
of Appraisal Practice and Code of Ethics of the American Society of
Appraisers. Our analyses were designed to meet the requirements for an
independent appraisal under Section 401(a)(28)(C) of the U. S. Internal
Revenue Code and of proposed regulation 29 CFR 2510.3 - 18(b) of the U. S.
Department of Labor. Our analyses were also designed to conform with Title
I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), including the prudence requirements of Sections 404(a)(6)(A) and
(B) and the "adequate consideration" requirements of Sections 406(a) and
(b) of ERISA. In conducting our valuation, we acted solely on behalf of
the ETS ESOP and independent of the interests of Hach Company and the
Company and its other shareholders. A copy of our firm's Independent
Appraiser Certificate is attached as Exhibit A.

Among other things, we have reviewed the following information regarding the
Company and Hach Company:

1) financial data reflecting its current and proposed operations;

2) audited financial statements for the fiscal years 1993 through 1996;

3) internal financial statements prepared by Company management for
the 11 months ended November 30, 1996 and 1997;

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Peoples Bank & Trust Company
And ETS Benefits Committee
January 21, 1998 Page 3

4) the draft Agreement And Plan of Merger Among Hach Company, Hach
Acquisition Corp. and Environmental Test Systems, Inc. ("Merger
Agreement");

5) the draft Escrow Agreement;

6) income statements, balance sheets, and statements of cash flow
for Hach Company for the previous five years, and daily stock
trading price information for the voting and non-voting common
stock of Hach Company for the previous three years;

7) stock prices of publicly-traded guideline companies as of January 9,
1998;

8) ETS' ESOP & Trust Agreement, ETS' Articles and By-Laws (for terms
of Class A stock), and documents comprising ETS' ESOP transaction,
including the NBD Loan Agreement.

9) such other specific and industry data relating to the current and
proposed operations of the Company as was supplied to us by the
Company or made available to us from other sources.

Our analyses also included:

1) an interview with key Company executives;

2) an interview with key executives at Hach Company;

3) a visit to the Company's facilities in Elkhart, Indiana;

4) a review of the nature and history of the Company's business; the
outlook for the economy in general, and the prospects for the industry
in particular;

APPRAISAL OVERVIEW

Environmental Test Systems, Inc. manufactures reagent test strips for use in
business, industry, and the home. ETS manufactures over 200 products with
distribution worldwide.

The appraisal of the Company's stock held by the ETS ESOP was prepared in
accordance with the Uniform Standards of Professional Appraisal Practice
(USPAP), as promulgated by The Appraisal Foundation. We examined the financial
performance of the Company and

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Peoples Bank & Trust Company
And ETS Benefits Committee
January 21, 1998 Page 4

applied generally accepted valuation methods to determine the fair market
value of the Stock. We selected our estimate of fair market value from a
range of values indicated by the capitalized cash flow method, guideline
company method, and the discounted cash flow method. The chart below
summarizes the values obtained from each method, and the overall value
selected as of January 9, 1998.

Preparing valuation opinions requires that we determine the most appropriate and
relevant quantitative and qualitative methods of financial analyses and apply
these methods to the unique circumstances of Environmental Test Systems, Inc.
There is a range of possible values indicated through the application of the
various methods. These analyses must be considered as a whole. Considering
only a portion of such analyses could create a misleading or incomplete view of
the underlying valuation process.

[Download Table]
Value
-----------

Capitalized Cash Flow Method $13,240,000
Guideline Company Method $12,010,000
Discounted Cash Flow Method $15,590,000

Average Value $13,610,000
Median Value $13,240,000

SELECTED TOTAL VALUE FOR ETS $13,430,000
------------------------------------------------------
------------------------------------------------------

Based upon our valuation analysis of Environmental Test Systems, Inc., it is our
opinion that the fair market value of the equity of ETS as of January 9, 1998 is
$13,430,000, calculated on a controlling interest basis, after taking into
consideration the put option granted to the ETS ESOP participants. The
conclusion on value is based on the mid-point between the average and the median
results derived from the three methods employed.

In our opinion, the fair market value of the ETS stock held by the ETS ESOP is
$17.27 per share, as calculated in the chart below. This per share value is
calculated on a controlling interest basis after taking into consideration the
put right granted to the ETS ESOP participants.

[Download Table]

Selected Value of Company on Control $13,430,000
ETS ESOP'S ownership percentage 25.05%
-----------
ETS ESOP'S portion of common stock $3,364,000
Present Value of ETS ESOP Dividends 631,000
-----------
Total ETS ESOP Value $3,995,000
Number of ETS ESOP Shares Outstanding 231,304
-----------
Value per ETS ESOP Share $17.27
-----------
-----------

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Peoples Bank & Trust Company
And ETS Benefits Committee
January 21, 1998 Page 5

SUMMARY OF VALUATION METHODS

CAPITALIZED CASH FLOW METHOD

The capitalized cash flow method relies on the Company's historical performance
to estimate value. By taking an average of historical results, an estimate of
the normal level of earnings for the Company is achieved. Earnings are then
adjusted for working capital requirements and net investment in fixed assets to
determine the normalized level of cash flow for the Company.

Normalized cash flow is multiplied by a capitalization factor that is derived
from the Company's weighted-average cost of capital to produce a total asset
value on a minority interest basis. The current market value of the Company's
debt is deducted and the value of the ETS ESOP tax savings is added to produce a
market-based total equity value for the Company on a minority interest basis.
To this equity value is added a 20% control premium, and the present value of
the ETS ESOP dividends is deducted. The result was a value of $13,240,000 for
the Company.

GUIDELINE COMPANY METHOD

The guideline company method uses ratios from publicly-traded stocks of similar
businesses to estimate value. This method uses market capital together with
sales; earnings before interest and taxes; and earnings before interest,
depreciation, amortization and taxes in different calculations that result in a
range of value estimates. The pricing multiples are applied against the
appropriate financial figures for the Company and a total asset value is
computed. Next, the current market value of the Company's debt is subtracted
and the value of the ETS ESOP tax savings is added to produce a market-based
total equity value for the Company on a minority interest basis. To this equity
value is added a 20% control premium, and the present value of the ETS ESOP
dividends is deducted. An equity value of $12,010,000 is derived for the
Company.

DISCOUNTED CASH FLOW METHOD

The price of a security is a function of an investor's perception of the
expected future cash flow generated by an investment given alternative
investments of comparable risk. Because the discounted cash flow method uses
projected financial performance and risk-adjusted discount rates to estimate
value, it can be an extremely effective valuation tool when properly applied.

For the Company, we examined a cash flow forecast over a seven-year period
and discounted the expected annual cash flows to their present value using a
risk-adjusted discount rate. A terminal value was also computed and
discounted to its present value using an assumption of

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Peoples Bank & Trust Company
And ETS Benefits Committee
January 21, 1998 Page 6

constant cash flow growth at the end of the forecast period. The present
value of the forecasted cash flow stream was combined with the present value
of the terminal value before subtracting funded debt and adding the value of
ETS ESOP tax savings to produce a control interest equity value for the
Company. The present value of the ETS ESOP dividends is deducted to estimate
a value of $15,590,000 for the Company.

OTHER ISSUES: PREMIUM FOR CONTROL

Although the ETS ESOP owns approximately 25.05% of the total shares outstanding
as of January 9, 1998, we have assessed the value of the Company's stock held by
the ETS ESOP on a control basis. A control basis was utilized because the ETS
ESOP is expected to receive at least a pro-rata portion of any proceeds
resulting from the Transaction, and ETS is merging with and into Hach
Acquisition Corp, in exchange for the surrender by ETS shareholders, including
the ETS ESOP, of 100% of the issued and outstanding stock of ETS. In
recognition of this aspect, a premium of 20% has been added to the Company's
equity value when assessing the value of the ETS ESOP's stock.

OTHER ISSUES: DISCOUNT FOR LACK OF MARKETABILITY

No formal public market exists for the Company's stock, in contrast to the
national exchanges over which the guideline companies are traded. However, the
Company currently is legally obligated to repurchase the stock held by ETS ESOP
participants in certain circumstances. However, the ETS ESOP will receive
shares of Hach Company stock as proceeds from the Transaction, which stock is
publicly traded over the NASDAQ national stock exchange. In recognition of the
receipt of publicly traded stock as proceeds from the Transaction, no discount
for lack of marketability has been deducted in assessing the value of the ETS
ESOP's stock.

VALUATION AND FAIRNESS OPINION

Based on our preliminary analysis as presented in the attached financial
schedules, it is our opinion that, from the perspective of the ETS ESOP as a
whole and solely from a financial point of view:

1) the number of shares of Hach Common Stock to be delivered to the ETS
ESOP in the Transaction is fair in relation to the ETS Class A Common
Stock held by the ETS ESOP;

2) the proposed consideration to be received by the ETS ESOP in the
Transaction is equal to or greater than the fair market value of the
Company's stock currently held by the ETS ESOP;

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Peoples Bank & Trust Company
And ETS Benefits Committee
January 21, 1998 Page 7

3) the terms of the Transaction, including the payment of any expenses
incurred in connection with the Transaction by the ETS ESOP, are fair
to the ETS ESOP as a whole, given the consideration to be received by
the other ETS shareholders in the Transaction; and

4) the ultimate disposition of the ETS ESOP, as provided in the Merger
Agreement, is fair.

In accordance with recognized professional ethics, our fees for this service are
not contingent upon the opinions expressed herein, and neither ComStock
Valuation Advisors, nor any of its employees, has a present or intended
financial interest in ETS or Hach Company.

Sincerely,
COMSTOCK VALUATION ADVISORS, INC.

By: /s/ Bradley Van Horn
-------------------------------------
Bradley Van Horn, Managing Director

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PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company is subject to the Delaware General Corporation Law ("DGCL").
Subsection (a) of Section 145 of the DGCL empowers a corporation to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.

Subsection (b) of Section 145 of the DGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.

Section 145 of DGCL further provides that to the extent a director,
officer, employee or agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
subsections (a) and (b) of Section 145, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith; that
indemnification provided for by Section 145 shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled; that
indemnification provided for by Section 145 shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of such
person's heirs, executors and administrators; and empowers the corporation to
purchase and maintain insurance on behalf of a director, officer, employee or
agent of the corporation against any liability asserted against him and incurred
by him in any such capacity, or arising out of his status as such, whether or
not the corporation would have the power to indemnify him against such
liabilities under Section 145. The bylaws of the Registrant provide, in
substance that the Registrant will indemnify its directors and officers to the
full extent permitted by Section 145 of the DGCL.

Also, as permitted by the DGCL, Article 13 of the Registrant's Restated
Certificate of Incorporation eliminates the personal liability of each director
of the Registrant to the Registrant or its stockholders for monetary damages
arising out of or resulting from any breach of his fiduciary duty as a director,
except where such director (i) breached his duty of loyalty to the Registrant or
its stockholders, (ii)

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failed to act in good faith or engaged in intentional misconduct or a knowing
violation of the law, (iii) violated Section 174 of the DGCL or (iv) obtained an
improper personal benefit.

The Registrant maintains policies insuring its and its subsidiaries
officers and directors against certain liabilities for actions taken in such
capacities including, subject to certain exemptions, liabilities under the
Securities Act of 1933, as amended.

As permitted by Delaware law, the Company's Certificate of Incorporation
contains a provision limiting its directors' liability to the Company or its
stockholders for monetary damages. This provision provides that a director
shall not be personally liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director except for liability: (i)
for a breach of the director's duty of loyalty (for example, in a situation
involving a conflict of interest); (ii) for actions or omissions in bad faith or
involving intentional misconduct or a knowing violation of law; (iii) for
certain improper dividend transactions under Section 174 of the Delaware General
Corporation Law; or (iv) for any transaction where a director derives an
improper personal benefit. This provision would not apply to limit the
liability of a director for activities performed as an officer of the Company
and, since applicable by its terms only to monetary damage recoveries, would not
limit the ability of the Company or its stockholders to obtain injunctive or
other non-pecuniary relief against any or all of the directors of the Company.
A provision of this type can be expected to limit the ability of the Company or
its stockholders to recover damages in the event a director is negligent in the
performance of his or her duties unless such negligence involves any of the
above-described four circumstances.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) EXHIBITS.

Exhibit Number Description
-------------- ----------

2(a) First Amendment dated as of February 26, 1998 to
Agreement and Plan of Merger by and between the
Registrant, Hach Acquisition Corp. and Environmental
Test Systems, Inc.; Agreement and Plan of Merger by
and between the Registrant, Hach Acquisition Corp. and
Environmental Test Systems, Inc. dated as of
January 21, 1998

3(a) Restated Certificate of Incorporation of the Registrant
(as amended to date) (hereby incorporated by reference
to Exhibit (3)a. to the Registrant's Annual Report on
Form 10-K for the year ended April 30, 1993, Commission
File No. 0-3947)

3(b) Certificate of Amendment to Article Fourth of the
Restated Certificate of Incorporation of the Registrant
as filed with the Delaware Secretary of State on
September 10, 1997 (hereby incorporated by reference to
Exhibit 1.2 to the Company's Registration Statement on
Form 8-A, Commission File No. 0-3947, as filed with the
Commission on September 10, 1997)

3(c) By-laws of the Registrant as amended (incorporated by
reference to Exhibit 3(b) to the Registrant's Annual
Report on Form 10-K for the year April 30, 1996,
Commission File No. 0-3947)

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5 Opinion of McBride Baker & Coles as to the legality of
the securities being registered by this Registration
Statement

8 Opinion of Krieg DeVault Alexander & Capehart as to
certain tax matters

10(a) Hach Company 1993 Stock Option Plan -- hereby
incorporated by reference to Exhibit (10)c. to the
Registrant's Annual Report on Form 10-K for the year
ended April 30, 1994, Commission File No. 0-3947.

10(b) Form of Stock Option Agreement under 1993 Stock Option
Plan -- hereby incorporated by reference to Exhibit
(10)d. to the Registrant's Annual Report on form 10-K
for the year ended April 30, 1994, Commission file No.
0-3947.

10(c) Hach Company Restated 1983 Stock Option Plan -- hereby
incorporated by reference to Exhibit (10) d. to the
Registrant's Annual Report on Form 10-K for the year
ended April 30, 1993, Commission File No. 0-3947.

10(d) Form of Stock Option Agreements for 1983 Stock Option
Plan -- hereby incorporated by reference to Exhibit
(10)e. of the Registrant's Annual Report on Form 10-K
for the fiscal year ended April 30, 1991, Commission
File No. 0-3947.

10(e) Hach Company Restated director's Bonus Compensation
Plan -- hereby incorporated by reference to Exhibit
(10)f. of the Registrant's Annual Report on Form 10-K
for the fiscal year ended April 30, 1991, Commission
File No. 0-3947; Fifth Amendment to Directors Bonus
Compensation Plan -- hereby incorporated by reference
to Exhibit (10)g. to the Registrant's Annual Report on
Form 10-K for the year ended April 30, 1996, Commission
File No. 0-3947.

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10(f) Executive Employment Agreements between the Company and
each of Bruce J. Hach, Richard D. Vanous, Loel J.
irovy, Jerry M. Churchill, Gary R. Dreher, Randall A.
Petersen, Larry D. Thompson and John C. Privette --
hereby incorporated by reference to Exhibit 10(h). to
the Registrant's Annual Report on Form 10-K for the
year ended April 30, 1994, Commission File No. 0-3947;
Executive Employment Agreement between the Company and
Kenneth Ogan -- hereby incorporated by reference to
Exhibit (10)h. to the Registrant's Annual Report on
Form 10-K for the year ended April 30, 1996, Commission
File No. 0-3947.

10(g) Hach Company 1995 Employee Stock Purchase Plan --
hereby incorporated by reference to Exhibit (10)j. of
the Registrant's Annual Report on Form 10-K for the
fiscal year ended April 30, 1995, Commission File No.
0-3947.

10(h) Hach Company Deferred Compensation Plan (as amended
through March 1, 1995) -- hereby incorporated by
reference to Exhibit (10)j. of the Registrant's Annual
Report on Form 10-K for the fiscal year ended April 30,
1995, Commission File No. 0-3947.

10(i) Trust Under Hach Company Deferred Compensation Plan
dated as of April 10, 1995 between the Company and the
Dauphin Deposit Bank and Trust Company, as trustee
hereby incorporated by reference to Exhibit (10)k. of
the Registrant's Annual Report on Form 10-K for the
fiscal year ended April 30, 1995, Commission File No.
0-3947.

10(j) Hach Company 1995 Non-Employee Director Stock Plan --
hereby incorporated by reference to Exhibit (10)l. to
the Registrant's Annual Report on Form 10-K for the
year ended April 30, 1996, Commission File No. 0-3747.

10(k) Revolving Credit Agreement dated as of July 7, 1997
among the Registrant, Hach Europe S.A. and Colorado
National Bank--hereby incorporated by reference to
Exhibit (10)m. to the Registrant's Annual Report on
Form 10-K for the year ended April 30, 1997, Commission
File No. 0-3747.

10(l) Purchase and Standstill Agreement and Mutual Release
dated as of June 26, 1997 by and between the Registrant
and Lawter International, Inc.--hereby incorporated by
reference to Exhibit 10.1 to the Registrant's Current
Report on Form 8-K dated June 26, 1997 and filed with
the Commission on that date, Commission File No.
0-3747.

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10(m) Stockholder's Agreement with Harry T. Stephenson dated
as of January 21, 1998.

10(n) Form of Lock-up Agreement with Harry T. Stephenson.

10(o) Form of Employment Agreement with Mark Stephenson.

21 List of Subsidiaries

23(a) Consent of McBride Baker & Coles (contained in the
opinion filed as Exhibit 5 to this Registration
Statement)

23(b) Consent of Krieg DeVault Alexander & Capehart
(contained in the opinion filed as Exhibit 8 to this
Registration Statement)

23(c) Consent of Coopers & Lybrand, L.L.P., as independent
auditors, with respect to financial statements of
Registrant

23(d) Consent of Coopers & Lybrand L.L.P., independent
auditors, with respect to the financial statements of
Environmental Test Systems, Inc.

24 Power of Attorney (included on the signature page of
this Registration Statement)

99 Form of Notice of Special Meeting and Proxy of
Environmental Test Systems, Inc.

ITEM 22. UNDERTAKINGS

(a) The undersigned Registrant hereby undertakes:

(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:

(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");

(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the

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Commission pursuant to Rule 424(b) promulgated under the Securities Act if, in
the aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.

(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement, or any
material change to such information in this Registration Statement;

(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;

(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering; and

(b) (1) The undersigned registrant hereby undertakes as follows: that prior
to any public reoffering of the securities registered hereunder through use of a
prospectus which is part of this registration statement, by any person or any
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.

(2) The registrant undertakes that every prospectus: (i) that is filed
pursuant to the paragraph immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used in determining any
liability under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is again public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.

(d) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this form, within one business day of receipt for
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.

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(e) The undersigned registrant hereby undertakes to supply by means of
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included n the registration statement when it became effective.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Loveland, State of
Colorado, on this 26th day of March, 1998.

HACH COMPANY

By /s/Kathryn Hach-Darrow
----------------------------------
Kathryn Hach-Darrow, Chairman and
Chief Executive Officer

POWER OF ATTORNEY AND SIGNATURES

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below, in his or her capacity as an officer and/or director (as set forth below)
of Hach Company, a Delaware corporation (the "Corporation"), which is about to
file with the Securities and Exchange Commission (the "SEC"), Washington, D.C.,
under the provisions of the Securities Act of 1933 a Registration Statement on
Form S-4, hereby constitutes and appoints Bruce J. Hach, Gary R. Dreher and
Robert O. Case, each of them acting individually, as his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to act for the undersigned and in the name,
place and stead of the undersigned, in any and all capacities, to sign, or cause
to be signed electronically, said Registration Statement and any and all
amendments to the aforementioned Registration Statement and to file said
Registration Statement and amendments thereto so signed with all exhibits
thereto, as well as to prepare, execute and file any and all other documents in
connection with such Plan with the SEC, all state securities authorities under
the blue sky and securities laws of the States of the United States of America,
and The NASDAQ Stock Market, hereby granting unto said attorneys-in-fact and
agents, and each of them acting individually, full power and authority to do and
perform any and all acts and things requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his or her
substitutes, may lawfully do or cause to be done by virtue hereof.

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Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

[Download Table]

Signature Title Date
--------- ----- ----

/s/Kathryn Hach-Darrow Chairman, Chief Executive March 26, 1998
---------------------- Officer, Director
Kathryn Hach-Darrow

/s/Bruce J. Hach President, Chief Operating March 26, 1998
---------------------- Officer, Director
Bruce J. Hach

/s/Gary R. Dreher Vice President and March 26, 1998
---------------------- Chief Financial Officer, Director
Gary R. Dreher

/s/Linda O. Doty Director March 26, 1998
----------------------
Linda O. Doty

/s/John N. McConnell Director March 26, 1998
----------------------
John N. McConnell

/s/Joseph V. Schwan Director March 26, 1998
----------------------
Joseph V. Schwan

/s/Fred W. Wenninger Director March 26, 1998
----------------------
Fred W. Wenninger

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘S-4’ Filing	Date	First	Last	Other Filings

	7/31/06	91	101
	11/22/01	84
	8/1/01	68	100
	7/31/01	20	100
	12/31/98	152
	4/30/98	19	101	10-K, 8-K
	3/31/98	105
	3/27/98
Filed on:	3/26/98	1	215
	3/20/98	28
	3/2/98	19	80
	3/1/98	89	92
	2/26/98	2	208
	2/13/98	17	40
	2/6/98	94
	2/3/98	40
	1/31/98	7	92	10-Q
	1/21/98	2	211
	1/20/98	19
	1/16/98	139
	1/9/98	202	205
	1/7/98	56
	1/1/98	152
	12/31/97	21	154
	12/30/97	12	33
	12/2/97	33
	12/1/97	137
	11/30/97	201
	11/25/97	79
	11/6/97	28		S-8
	10/31/97	7	140
	10/23/97	17	166
	10/2/97	19	76
	9/30/97	140
	9/22/97	19	76
	9/10/97	64	208	8-A12G
	9/1/97	47	163
	8/31/97	104	126
	7/31/97	7	92
	7/8/97	76
	7/7/97	76	210
	6/27/97	8		8-K, SC 13D
	6/26/97	76	210	8-K
	6/2/97	88
	4/30/97	7	210	10-K
	1/7/97	79
	1/1/97	56	97
	12/31/96	22	158
	11/30/96	201
	11/22/96	84
	11/6/96	88
	10/31/96	20	123
	8/30/96	87
	8/5/96	88
	8/1/96	24	102
	7/31/96	23	100
	7/30/96	100
	5/1/96	57	62
	4/30/96	19	210	10-K405
	4/1/96	105
	1/1/96	23	104
	12/31/95	22	123
	8/29/95	78		DEF 14A
	4/30/95	22	210	10-K405
	4/10/95	210
	3/1/95	83	210
	1/9/95	56
	1/1/95	87
	12/31/94	22	140
	11/22/94	78
	8/30/94	78
	5/18/94	88
	4/30/94	22	210
	2/4/94	91
	1/1/94	134
	12/31/93	22
	8/24/93	78
	5/1/93	78
	4/30/93	22	209
	1/1/93	23	120
	8/25/92	78	79
				List all Filings

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Filing Submission 0001047469-98-011768 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Hach Co – ‘S-4’ on 3/26/98

As of: Thursday, 3/26/98 · Accession #: 1047469-98-11768 · File #: 333-48729

Registration of Securities Issued in a Business-Combination Transaction — Form S-4Filing Table of Contents

S-4 — Registration of Securities Issued in a Business-Combination TransactionDocument Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Registration of Securities Issued in a Business-Combination Transaction — Form S-4
Filing Table of Contents

S-4 — Registration of Securities Issued in a Business-Combination Transaction
Document Table of Contents