EXHIBIT 10.3



                  DATED [              ] 1998





                    TIOXIDE EUROPE LIMITED
                            - and -
                         NEWCO LIMITED



                           AGREEMENT

                        - relating to -

             the sale and purchase of part of the
              business of TIOXIDE EUROPE LIMITED




                          AGREED FORM






                           EVERSHEDS
                      S O L I C I T O R S

            Senator House, 85 Queen Victoria Street
                        London EC4V 4JL
             Tel: 0171 919 4500 Fax: 0171 919 4919
                           Ref : MTI

<PAGE>



                                      I N D E X

CLAUSE      DESCRIPTION                                             PAGE NO.

1.          INTERPRETATION                                                 1

2.          SALE                                                           8

3.          CONSIDERATION                                                  9

4.          COMPLETION                                                     10

5.          TITLE AND SUPPLEMENTARY PROVISIONS                             12

6.          DEBTORS,   MATERIALS  BUSINESS  DEBTORS,   RETAINED
            BUSINESS CLAIMS AND MATERIALS BUSINESS CLAIMS                  13

7.          NEWCO LIABILITIES                                              15

8.          TEL LIABILITIES                                                15

9.          EMPLOYEES                                                      16

10.         CONTINUING OBLIGATIONS OF TEL AND NEWCO                        16

11.         VAT                                                            17

12.         AVAILABILITY OF INFORMATION                                    19

13.         INDEPENDENT ACCOUNTANT                                         19

14.         DEFAULT INTEREST                                               20

15.         GENERAL                                                        20

16.         WHOLE AGREEMENT                                                21

17.         NON-MERGER AND SURVIVORSHIP                                    22

18.         NOTICES                                                        22

19.         GOVERNING LAW                                                  22

Schedule 1  DESCRIPTION OF THE BUSINESS                                    23

Schedule 2  THE PROPERTIES                                                 24

Schedule 3  EXCLUDED ASSETS AND EXCLUDED LIABILITIES                       26

Schedule 4  ALLOCATION  OF  CONSIDERATION  TO  BUSINESS  ASSETS
            PURCHASED                                                      29

Schedule 5  PROVISIONS RELATING TO THE PROPERTIES                          30


<PAGE>


CLAUSE      DESCRIPTION                                             PAGE NO.


Schedule 6  PROVISIONS RELATING TO THE CONTRACTS                           33

Schedule 7  PROVISIONS RELATING TO THIRD PARTY CONSENTS                    35

Schedule 8  NOTIFICATION, ASSISTANCE AND PROCEEDINGS                       39

Schedule 9  SUPPLIER CONTRACTS OF A MATERIAL NATURE                        42

Schedule 10 DOCUMENTS IN THE AGREED TERMS                                  43

Schedule 11 EMPLOYEES AND OTHER PERSONNEL                                  44

Schedule 12 SHARED SUPPLIER CONTRACTS                                      47

Schedule 13 TRANSFERRING EMPLOYEES                                         48

Schedule 14 ESTIMATED  CONSIDERATION,  FINAL  CONSIDERATION AND
            FINAL COMPLETION STATEMENT                                     49

Annex 1     Pharmacopeia

Annex 2     A Form

Annex 3     ICI's Controller's Manuals

Annex 4     ICI's Auditors Report

<PAGE>





THIS AGREEMENT is made on                   1998


BETWEEN:-

(1)   TIOXIDE EUROPE LIMITED (registered in England No. 832447) whose registered
      office is at [Lincoln House,  137/143  Hammersmith  Road,  London W14 OQL]
      ("TEL"); and

(2)   NEWCO LIMITED (registered in England No. [                 ])        whose
      registered office is at [                           ] ("NEWCO").

INTRODUCTION

(A)   TEL has agreed to sell and Newco has agreed to purchase  the Business as a
      going  concern and the  Business  Assets as at the Transfer  Time,  on the
      terms and conditions of this Agreement.

(B) Newco is a wholly owned subsidiary of TEL.

(C) The Business constitutes part of the undertaking of TEL.

IT IS AGREED:-

1.    INTERPRETATION

1.1   Definitions

      In this Agreement,  including its Schedules, the headings shall not affect
      its interpretation and, unless the context otherwise requires:-

      "AFFILIATES"  means with  respect to a  specified  entity,  an entity that
      directly or indirectly,  through one or more intermediaries,  Controls, or
      is Controlled  by, or is under common  Control with the entity  specified,
      provided that, without limiting the generality of the foregoing,  the term
      "AFFILIATES"  shall not  include  any entity in which a party has a 50 per
      cent. or less ownership interest. For the purposes hereof, "CONTROL" means
      possession,  directly or  indirectly,  of the power to direct or cause the
      direction  of the  management  and  operating  policies  of the  entity in
      respect of which the determination is being made, through the ownership of
      voting securities,  contract,  voting trust or otherwise but any reference
      in this Agreement to an Affiliate of TEL shall exclude Newco;

      "AGREED TERMS" means,  in relation to any document such  document,  in the
      terms agreed  between the parties and for the  purposes of  identification
      signed by or on behalf of the parties, and listed in Schedule 10;

      "BUSINESS" means the business shortly described in Schedule 1;

<PAGE>

      "BUSINESS ASSETS" means the property, assets and rights of and exclusively
      relating to or used in the Business as at the  Transfer  Time as specified
      in Clause 2.1 other than the Excluded Assets;

      "BUSINESS DATA" means all  information,  know-how and records  (whether or
      not  confidential  and no  matter  in what form  held)  of,  and  relating
      exclusively to or used  exclusively in, the Business (or otherwise used in
      the ordinary  course of the  operation of the Business) as at the Transfer
      Time  other  than  Commercial  and  Marketing  Know-how  and  Intellectual
      Property but,  subject  thereto,  including the Materials  Commercial  and
      Marketing Know-how, all manuals and instructions,  all accounting records,
      and all  correspondence,  orders and enquiries  whether in hard copy or in
      computer held or other  electronic  form  (including  for the avoidance of
      doubt,  such media as microfilm and  microfiche)  but for the avoidance of
      doubt shall  exclude  any matter  relating to the  Customer  Contracts  or
      Customers;

      "COMMERCIAL  AND MARKETING  KNOW-HOW"  means all  commercial and marketing
      information  of and relating to or used in the Business as at the Transfer
      Time,  other than the Materials  Commercial  and Marketing  Know-How,  but
      subject thereto,  including all designs,  specifications,  drawings, lists
      and   particulars  of  customers,   marketing   manuals  and   procedures,
      advertising copy and sales and promotional information;

      "CONTRACTS" means the Supplier  Contracts and the Materials  Customer
      Contracts;

      "CONTROLLED  WATERS"  means  waters  including  any ground or surface
      waters;

      "COSTS"  includes all and any penalties,  fines,  costs,  charges and
      expenses;

      "CUSTOMERS"  means the customers of the Business other than customers
      who are only customers of the Materials Business;

      "CUSTOMER  CONTRACTS"  means the contracts and commitments  with customers
      (other than in relation to  Intellectual  Property)  entered into prior to
      the Transfer Time by or on behalf of TEL in  connection  with the Business
      for the  manufacture  of goods,  or the supply of goods or services by TEL
      which  then  remain to be  performed  in whole or in part,  other than the
      Materials Customer Contracts;

      "DEBTORS" means the book and other debtors  accruing or owing to TEL as at
      the Transfer  Time  (whether or not due and payable) and arising out of or
      in connection with the Business  excluding the Materials  Business Debtors
      and the Employee Loans;

      "DEFAULT  INTEREST"  means  LIBOR  plus 200 basis  points  compounded
      monthly;

      "EMPLOYEE  LOANS" means all amounts  accruing or owing (whether or not due
      and payable) as at the Transfer Time to TEL by Transferring  Employees and
      Offer  Employees in respect of housing  assistance  loans or season ticket
      loans or any  other  loans or  advances  to  Transferring  Employees  of a
      similar nature;

      "ENVIRONMENT"  means air, Controlled Waters, land (whether on, in or below
      such land, excluding any buildings or other permanent structures on, in or
      below the land) but including the surface of any river bed, the surface of
      any sea bed or any other land  covered  by water,  and flora and fauna and
      all other natural resources;

<PAGE>

      "ENVIRONMENTAL   AUTHORISATIONS"  means  all  or  any  permits,  consents,
      licences,  approvals and other authorisations required under Environmental
      Law and all terms and conditions  thereof required under any Environmental
      Law for the operation of the Business;

      "ENVIRONMENTAL LAW" means any and all legislation (whether civil, criminal
      or administrative),  statutes,  treaty,  statutory instrument,  directive,
      bylaw  or  judgment  (including  any  judgment  by the  European  Court of
      Justice),  regulations,  notices,  orders,  government  circular,  code of
      practice,  and guidance note or decision of any competent  regulatory body
      or common law relating to pollution or protection of the Environment which
      as at the Transfer Time are in effect and capable of  enforcement by legal
      process in the country in which the Properties are situated;

      "EXCLUDED  ASSETS"  means the assets  excluded  from the sale and purchase
      pursuant to this Agreement and identified in Part I of Schedule 3;

      "EXCLUDED  LIABILITIES"  means  any  obligations  and  liabilities  of TEL
      excluded  from  the sale  and  purchase  pursuant  to this  Agreement  and
      identified in Part II of Schedule 3;

      "FINAL  COMPLETION  STATEMENT"  has the meaning set out in  paragraph
      1.5.2 of Schedule 14;

      "FINAL  CONSIDERATION"  has the meaning  given in paragraph  1.5.1 of
      Schedule 14;

      "FREEHOLD   PROPERTIES"   means   the   freehold   properties   short
      particulars of which are set out in Part I of Schedule 2;

      "GOODWILL"  means the goodwill in relation to the Business (but  excluding
      any rights  relating to the Excluded  Assets) and the right for Newco,  so
      far as TEL can grant the same,  to  represent  itself as  carrying  on the
      Business  in  succession  to TEL in  accordance  with such terms as may be
      agreed between TEL and/or its relevant Affiliate on the one hand and Newco
      and/or its relevant Affiliate on the other hand;

      "ICI" means Imperial Chemical Industries PLC;

      "INTELLECTUAL  PROPERTY"  means all Technical  Information and all rights,
      title or interest (including,  without limitation,  the benefit and burden
      of any licences of the same)  anywhere in the world in any patents,  trade
      marks,  service  marks,  registered  designs,  copyrights  and  rights  to
      inventions  and  applications  for and rights to apply for  protection  or
      registrations  of  any of  the  same  including  any  continuing  reissue,
      divisional and re-examination patent application;

      "LEASED  EQUIPMENT  CONTRACTS" means the agreements for the leasing to TEL
      of equipment used exclusively in connection with the Business;

      "LEASEHOLD PROPERTIES" means the leasehold properties short particulars of
      which are set out in Part II of Schedule 2;

<PAGE>

      "LIBOR"  means the rate for  deposits  in US  Dollars  for a period of one
      month which appears on the Reuters Screen ISDA Page (or such other page as
      the parties may agree) at  approximately  11.00 am.,  London time,  on the
      first  day of the  period  to  which  any  interest  period  relates  (the
      "RELEVANT  DATE"). If such rate does not appear on the Reuters Screen ISDA
      Page on the  Relevant  Date,  the  rate  for that  Relevant  Date  will be
      determined  on the basis of the rates at which  deposits in US Dollars are
      offered to Midland Bank plc at  approximately  11.00 am.,  London time, on
      the Relevant Date to prime banks in London  interbank  market for a period
      of  one  month   commencing   on  that   Relevant   Date  for  amounts  of
      US$10,000,000;

      "MATERIALS  BUSINESS" means all or any of the businesses shortly described
      in Part II of Schedule 1;

      "MATERIALS  BUSINESS CLAIMS" means the benefit of all rights and claims of
      TEL relating exclusively to the Business Assets or arising exclusively out
      of or in connection  with the Materials  Business as at, or the conduct of
      the  Materials  Business up to, the Transfer  Time to the extent that such
      rights and claims do not constitute Excluded Assets;

      "MATERIALS  BUSINESS DEBTORS" means the book and other debtors accruing or
      owing to TEL as at the Transfer  Time (whether or not due and payable) and
      arising exclusively out of or in connection with the Materials Business;

      "MATERIALS  COMMERCIAL  AND MARKETING  KNOW-HOW"  means all commercial and
      marketing  information of, and relating exclusively to or used exclusively
      in,  the  Materials   Business  as  at  the  Transfer  Time,   other  than
      Intellectual Property;

      "MATERIALS  CUSTOMER  CONTRACTS"  means the contracts and commitments with
      customers  (other than in relation to any Intellectual  Property)  entered
      into  prior to the  Transfer  Time by or on behalf of TEL  exclusively  in
      connection  with the Materials  Business for the  manufacture of goods, or
      the supply of goods or  services,  by TEL which  then  remain (in whole or
      part) to be performed by TEL;

      "NEWCO COMPLETION DATE" has the meaning given in Schedule 14;

      "NEWCO'S  GROUP" means Newco and its Affiliates from time to time but
      excluding any member of TEL's Group;

      "NEWCO LIABILITIES" means any liabilities  whether actual,  prospective or
      contingent or liquidated or  unliquidated  to the extent incurred or owing
      by TEL:-

      (a)   in connection  with the Business or the Business  Assets as at,
            or the conduct of the Business up to, the Transfer Time; or

      (b)   in  respect  of events  occurring  or  matters  existing  before the
            Transfer  Time which relate to the Business or the Business  Assets;
            or

      (c)   which are expressly deemed to constitute Newco Liabilities  pursuant
            to the terms of this Agreement;

<PAGE>

      including,  without  prejudice to the  generality  of the  foregoing,  any
      Operating Creditors less than 1 year relating exclusively to the operation
      of the  Business,  but for the  avoidance of doubt  excluding the Excluded
      Liabilities;

      "NEWCO PATENT AND KNOW-HOW  LICENCE" means the licence in the Agreed Terms
      to be entered into between E. I. du Pont de Nemours and Company and Newco;

      "NON EXEMPT  PROPERTY"  means any  Property  notified in writing by TEL to
      Newco at least 14 days prior to the Transfer Time;

      "OFFER  EMPLOYEES"  means  those  employees  of TEL  and/or  ICI  and  its
      Affiliates  who have been  offered  and  accepted  employment  with  Newco
      pursuant to Schedule 11;

      "OPERATING CREDITORS LESS THAN 1 YEAR" has the meaning set out in Schedule
      14;

      "PERMITS" means all licences, permits, authorisations and approvals issued
      or granted by  statutory or local  authorities  to TEL for the purposes of
      operation  of the Business  (but  excluding,  for the  avoidance of doubt,
      planning  permissions  (save for Environmental  Authorisations)  issued by
      relevant planning authorities);

      "PLANT AND  EQUIPMENT"  means the fixed and loose plant and  machinery and
      all other  fixtures and fittings,  spare parts,  equipment,  furniture and
      motor  vehicles owned by TEL and located at the Properties at the Transfer
      Time and used exclusively in the Business;

      "PROPERTIES" means the Freehold Properties and the Leasehold Properties;

      "REGULATIONS"  means the Value  Added Tax  (General)  Regulations  1985 as
      amended;

      "RETAINED  BUSINESS"  means all or any of the  businesses  of TEL's  Group
      other than the Business;

      "RETAINED  BUSINESS  CLAIMS" means the benefit of all rights and claims of
      TEL as at the Transfer Time except for the Materials Business Claims;

      "SHARED SUPPLIER  CONTRACTS" means contracts and commitments  entered into
      prior to the Transfer  Time by or on behalf of TEL for the supply of goods
      or services in connection with both the Business and the Retained Business
      (other than in relation to Intellectual  Property) which then remain to be
      performed in whole or in part and listed in Schedule 12;

      "STOCK-IN-TRADE"   means  the  stocks  of  raw   materials,   consumables,
      work-in-progress  and finished products owned by TEL relating  exclusively
      to the Business and located at any of the  Properties at the Transfer Time
      but excluding any finished products and work-in-progress  which is located
      at but has not been manufactured at any of the Properties;

      "SUPPLIER CONTRACTS" means contracts and commitments (including the Leased
      Equipment  Contracts)  entered  into prior to the  Transfer  Time by or on
      behalf of TEL for the supply to TEL of goods or  services  exclusively  in
      connection  with the  Business  (other than in  relation  to  Intellectual
      Property) which then remain to be performed in whole or in part,  those of
      material nature being listed in Schedule 9;

<PAGE>


      "TAXATION"  means all  forms of direct  and  indirect  taxation  including
      statutory,   governmental,   state,  provincial,   local  governmental  or
      municipal impositions in each case imposed on net income,  profits,  gains
      or net worth and whether of the United  Kingdom or  elsewhere in the world
      (including  interest,  costs or penalties  relating  thereto) and, for the
      avoidance of doubt, the term shall include rates or other taxes imposed on
      properties,  landfill taxes, customs duties,  national insurance payments,
      taxes  imposed on  payments  to, or income of,  third  parties  (including
      employees) or sales or value added taxes;

      "TECHNICAL INFORMATION" means all technical data and know-how,  industrial
      and  technical  information,   trade  secrets,  confidential  information,
      drawings,   formulations,   technical   reports,   operating  and  testing
      procedures,    instruction    manuals,    raw   material   or   production
      specifications,  the results of research and development work,  whether in
      hard copy or in computer held form (including, for the avoidance of doubt,
      such media as microfilm and microfiche) and existing computer software the
      Intellectual Property in which is owned by TEL (or TEL's Affiliates);

      "TEL'S GROUP means TEL and its Affiliates from time to time;

      "TEL LIABILITIES"  means any liabilities,  whether actual,  prospective or
      contingent or liquidated or  unliquidated  to the extent incurred or owing
      by TEL or any member of TEL's Group:-

      (a)   in  connection  with the Retained  Business as at, or the conduct of
            the Retained Business up to, the Transfer Time; or

      (b)   in  respect  of events  occurring  or  matters  existing  before the
            Transfer Time and relating to the Retained Business; or

      (c)   which constitute Excluded Liabilities; or

      (d)   which are expressly deemed to constitute TEL Liabilities pursuant to
            the terms of this Agreement; or

      (e)   in respect of any liability to Taxation of TEL;

      and, for the avoidance of doubt shall  include  Operating  Creditors  less
      than 1 year which do not relate exclusively to the Business;

      "TRANSFER  REGULATIONS" means the Transfer of Undertakings  (Protection of
      Employment) Regulations 1981;

      "TRANSFERRING  EMPLOYEES"  means those employees of TEL and/or ICI and its
      Affiliates who are immediately  prior to the Transfer Time employed in the
      Business whose names are set out in Schedule 13;

      "TRANSFER  TIME" means  immediately  after 00.00 hours London time on
      * 1998 [IE FIRST DAY OF THE MONTH];

<PAGE>

      "ULTRAFINE    TITANIUM    DIOXIDE"    means    titanium    dioxide   being
      ultraviolet-attenuating grade having a ratio of absorbance response at 308
      nm (A308) to  absorbance  response  at 524 nm (A524) of not less than 5 as
      defined in US  Pharmacopeia,  amendment  published in Pharmacopeia  Forum,
      Volume 22, Number 4, Page 2636 and attached hereto as Annex 1;

      "US DOLLARS",  "US$" or "$" means the lawful currency of the United States
      of America;

      "VAT"  means value  added tax  imposed by a Member  State of the  European
      Community  pursuant  to  the  Sixth  Council  Directive  (77/338/EEC)  and
      Supplemental Directives;

      "VATA" means the Value Added Tax Act 1994;

1.2   Any reference in this Agreement or any other agreement in the Agreed Terms
      or in any instrument executed pursuant hereto or thereto to any obligation
      assumed by TEL, or any intention of TEL or Newco, to give or vest in Newco
      the Business or the Business  Assets or the benefit of the Business or the
      Business  Assets shall be subject to Clause 2.2 and so that TEL shall not,
      by virtue of any such provision,  be obliged to transfer to Newco any such
      right,  title or interest in the Business or any  Business  Asset which is
      greater than such right, title or interest as TEL may have in the Business
      and the Business Assets.

1.3   Any express reference to an enactment includes references to:-

      1.3.1 that enactment as amended, extended or applied by or under any other
            enactment before or after this Agreement;

      1.3.2 any enactment  which that enactment  re-enacts (with or without
            modification); and

      1.3.3 any  subordinate  legislation  made (before or after this Agreement)
            under any  enactment,  including  one within  Clause  1.3.1 or 1.3.2
            above,

      except to the extent that any of the matters  referred to in Clauses 1.3.1
      to 1.3.3 occurring after the date of this Agreement  increase or alter the
      liability of TEL under this Agreement.

1.4   The singular  shall  include the plural and vice versa and words  denoting
      persons shall include bodies corporate and unincorporated  associations of
      persons and, unless otherwise stated,  shall include successors or assigns
      of such persons.

1.5   Clauses 1.1 to 1.3 apply unless the context otherwise requires.

1.6   The headings in this Agreement do not affect its interpretation.

1.7   Any Schedule or Annex to this Agreement shall take effect as if set out in
      this  Agreement  and  references  to  this  Agreement  shall  include  its
      Schedules and Annexes.

<PAGE>

2.    SALE

2.1   THE SALE

      Subject to the terms of this  Agreement,  TEL shall  sell and Newco  shall
      purchase  as a  going  concern  as  at  the  Transfer  Time  the  Business
      comprising  the  Business  Assets as specified in this Clause 2.1 below so
      far as TEL can sell or grant the same:

      2.1.1 the Properties;

      2.1.2 the Plant and Equipment;

      2.1.3 the Stock-in-Trade;

      2.1.4 the Employee Loans;

      2.1.5 the  benefit  (so  far as the  same  can  lawfully  be  assigned  or
            transferred to, or held in trust absolutely for, or can otherwise be
            given to, Newco) of the Materials Business Claims;

      2.1.6 the Goodwill;

      2.1.7 the Materials Commercial and Marketing Know-How;

      2.1.8 the benefit, subject to the burden of the Contracts;

      2.1.9 the Business Data; and

      2.1.10 the Materials Business Debtors;

      but excluding the Excluded  Assets.

      The Excluded Assets and all rights and benefits  relating thereto shall be
      retained  by TEL and are  excluded  from  the  sale  and  purchase  of the
      Business and the Business Assets to Newco under this Agreement.

2.2   WARRANTIES, INDEMNITIES AND REPRESENTATIONS

      Except as  otherwise  expressly  provided  in this  Agreement  (but having
      regard  to the  provisions  of  Clause  1.2) no  warranties,  indemnities,
      representations  or  undertakings  (in  any  case,  express,   implied  or
      otherwise)  with regard to the Business,  the Business Assets or the title
      of TEL thereto are given by TEL, nor are the same to be implied, by virtue
      of TEL entering into this Agreement,  or any other agreement in the Agreed
      Terms or executing any instrument  pursuant  hereto or thereto or selling,
      conveying or transferring or agreeing to sell, convey or transfer the same
      pursuant  hereto or thereto.  The Business  Assets are  purchased by Newco
      pursuant to this  Agreement on an "as seen" and "as is" basis.  TEL shall,
      and shall be obliged  to,  transfer,  to Newco only such  right,  title or
      interest as it may have subject to all liens, charges, impediments, claims
      and encumbrances as may exist thereon. Newco shall accept without enquiry,
      requisition  or  objection  such title as TEL may have in the Business and
      the Business Assets.

<PAGE>

2.3   THE PROPERTIES

      The  Properties  shall  be sold  and  purchased  on the  terms  set out in
      Schedule 5.

2.4   POST-TRANSFER TIME LIABILITIES

      2.4.1 Save  as  expressly  stated  otherwise  in  this  Agreement,   Newco
            undertakes  to indemnify  and hold harmless TEL from and against all
            liabilities  which may be  incurred  by TEL (or any  member of TEL's
            Group) or to which TEL (or any  member of TEL's  Group)  may  become
            subject,  and  which  arise  as a  result  of the  operation  of the
            Business  after  the  Transfer  Time  (other  than  any  liabilities
            expressly  retained  by TEL under  this  Agreement)  and any and all
            actions,  suits,  proceedings,   claims,  demands,  assessments  and
            judgments  with  respect to the  foregoing.  Any such  liability  in
            respect of which Newco shall be liable to indemnify TEL (and members
            of TEL's Group) as aforesaid  shall  constitute a "Newco  Liability"
            for the purposes of Clause 7 and Schedule 8.

      2.4.2 Save as expressly stated otherwise in this Agreement, TEL undertakes
            to  indemnify  and  hold   harmless   Newco  from  and  against  all
            liabilities which may be incurred by Newco (or any member of Newco's
            Group) or to which Newco (or any member of Newco's Group) may become
            subject,  and  which  arise  as a  result  of the  operation  of the
            Retained   Business   after  the  Transfer   Time  (other  than  any
            liabilities expressly assumed by Newco under this Agreement) and any
            and all actions, suits,  proceedings,  claims, demands,  assessments
            and judgments with respect to the foregoing.  Any such liability for
            which TEL shall be liable to indemnify Newco (and members of Newco's
            Group) as  aforesaid  shall  constitute  a "TEL  Liability"  for the
            purposes of Clause 8 and Schedule 8.

3.    CONSIDERATION

3.1   THE CONSIDERATION

      The consideration for the sale of the Business Assets shall be:-

      3.1.1 Subject  to  adjustment   pursuant  to  sub-clause  3.2  below,  US$
            118,410,000   ("THE  ESTIMATED   CONSIDERATION")   which  sum  shall
            constitute  a debt  owed by  Newco  to  TEL,  without  security  and
            repayable  forthwith  upon  demand  by  TEL  ("THE  ESTIMATED  NEWCO
            HIVEDOWN DEBT"); and

      3.1.2 an  obligation  on the  part  of  Newco  to  assume,  pay,  satisfy,
            discharge,  fulfil and indemnify  TEL against all Newco  Liabilities
            and Costs in respect  thereof in accordance  with the  provisions of
            Clause 7.

<PAGE>

3.2   The  Final   Consideration  shall  be  agreed  or  finally  determined  in
      accordance  with the provisions of Schedule 14 and any adjusting  payments
      between TEL and Newco shall be made in accordance  with the  provisions of
      Schedule 14.

3.3   ALLOCATION OF THE FINAL CONSIDERATION

      The Final  Consideration shall be allocated to each of the Business Assets
      as specified in Schedule 4.

4.    COMPLETION

4.1   TIME OF COMPLETION

      Completion of this Agreement shall take place at the Transfer Time.

4.2   DELIVERY BY TEL

      Except as  otherwise  provided in this  Agreement  and  specifically,  but
      without  limitation,  without  prejudice  to Clause  5.3, at or as soon as
      practicable  after the Transfer  Time,  TEL shall cause to be delivered or
      made available to Newco at such place as Newco may reasonably require:-

      4.2.1 such  documents  as Newco may  reasonably  require and which TEL has
            available  to it or  under  its  control  to  complete  the sale and
            purchase of the Business  Assets  (including  all documents of title
            which TEL has in its possession or control,  any requisite  consents
            or licences which TEL may have obtained,  such executed conveyances,
            transfers and assignments as Newco may reasonably require to vest in
            Newco the benefit of the properties, rights and assets hereby agreed
            to be sold) and shall permit Newco to enter into and take possession
            of the Business;

      4.2.2 possession  of  the  Properties  and of the  other  tangible  assets
            comprised in the  Business  Assets  including  all  inventories  and
            records (whether in computerised or other form) exclusively relating
            to the Business  (but not those  relating to the general  affairs of
            TEL or to any Excluded Assets or Excluded Liabilities or required by
            law to be retained by TEL, but insofar as any such documents  relate
            to the Business and are  reasonably  required by Newco,  Newco shall
            have the right to examine  the same at all  reasonable  times and to
            make copies thereof and to take extracts therefrom);

      4.2.3 insofar as the same have not already been  delivered  to Newco,  the
            documents  in  Agreed  Terms,  in  the  case  of  any  agreement  or
            instrument  to be delivered by TEL,  duly  executed by TEL or any of
            its Affiliates.

<PAGE>


4.3   DELIVERY BY NEWCO

      Newco shall deliver to TEL the documents in the Agreed Terms duly executed
      by Newco.

4.4   DELIVERY OF BUSINESS ASSETS

      TEL may at any time prior to the Transfer  Time,  execute and deliver,  or
      cause  to be,  or may  have,  or  may  have  caused  to be,  executed  and
      delivered,  to Newco such  documents  as shall be  required to transfer to
      Newco  (whether  or not  subject  to any  necessary  formalities  such  as
      stamping,  registration  in any  register,  production  to any  person  or
      otherwise)  legal title to any of the Business  Assets which execution and
      delivery  shall be carried  out,  in respect  of the  Business  Assets the
      subject thereof,  in discharge of, and shall  accordingly  discharge,  the
      obligations  of TEL under  Clause 4.2.  TEL and Newco agree and  undertake
      that the execution and delivery by TEL as  contemplated in this Clause 4.3
      of any conveyance, transfer or assignment in respect of any Property shall
      be made on the terms contained in Schedule 5.

4.5   DELIVERY OF CONSIDERATION

      Newco  shall  execute  and  deliver  to TEL  such  documents  as  TEL  may
      reasonably  require  evidencing  the  assumption  by  Newco  of the  Newco
      Liabilities pursuant to Clause 3.1.2.

4.6   PERMITS

      To the extent that the same has not been carried out prior to the Transfer
      Time,  as soon as possible  thereafter  Newco  and/or TEL (as the case may
      require) shall apply to the relevant governmental and/or local authorities
      to arrange for the transfer or  assignment to Newco or the re-issue in the
      name of  Newco  of each of the  Permits  (insofar  as they  relate  to the
      Business) with effect from the Transfer Time in each case upon terms which
      will enable Newco to continue to conduct the Business substantially in the
      manner in which the Business is currently  conducted at the Transfer Time.
      Furthermore,   each  of  Newco  and/or  TEL  shall  use  their  respective
      reasonable efforts to effect each such transfer, assignment or re-issue as
      promptly  as  practicable  after  the  date  of  this  Agreement.  For the
      avoidance  of doubt  nothing  in this  Clause  4.5 shall  give rise to any
      liability on the part of TEL for any additional cost as may be required on
      the  part of  Newco  in  connection  with  such  transfer,  assignment  or
      re-issue.

4.7   Newco  hereby  accepts  and  agrees  that TEL shall not be liable  for any
      failure or refusal by any  relevant  governmental  or local  authority  to
      arrange or effect the transfer or  assignment  to Newco or the re-issue in
      the name of Newco of any of the Permits as aforesaid.

<PAGE>

4.8   INVESTMENT GRANTS

      As soon as practicable  after the Transfer  Time,  Newco shall execute and
      deliver such undertakings and indemnities as TEL may reasonably require to
      ensure so far as may be possible that:-

      4.8.1 TEL will not (by reason of the sale under this Agreement or anything
            done or omitted to be done by Newco or its  successors  in title) be
            or become liable to repay any grants from any governmental, local or
            public authority received by TEL in relation to the Business; and

      4.8.2 TEL will be able to claim and to  receive  for its own  benefit  any
            additional  such grants in respect of expenditure  made prior to the
            Transfer  Time  to  which  it  would  have  become  entitled  had it
            continued to use the relevant assets in the Business.

5.    TITLE AND SUPPLEMENTARY PROVISIONS

5.1   TITLE TO THE PROPERTIES

      The provisions of Schedule 6 shall apply in respect of the Properties.

5.2   TITLE TO OTHER BUSINESS ASSETS

      Unless  otherwise  agreed  between  TEL and Newco,  title to all  Business
      Assets  which are capable of  transfer by delivery  shall pass on delivery
      thereof  and such  delivery  shall be  deemed to have  taken  place at the
      Properties (or such other  properties at which the Business is carried on)
      at and with effect from the Transfer Time.

5.3   BENEFICIAL OWNERSHIP AND RISK

      Save to the extent otherwise  provided in this Agreement and specifically,
      but without limitation,  in Clause 4.3,  beneficial  ownership and risk in
      respect of the Business  and the Business  Assets shall pass and be deemed
      to have passed to Newco at the Transfer Time. TEL shall,  subject to being
      fully indemnified by Newco, hold the relevant Business Assets on trust for
      Newco  absolutely as from the Transfer Time until the same shall have been
      delivered  and/or formally  transferred or assigned to Newco and TEL shall
      grant to Newco such powers of attorney as Newco may reasonably  require to
      enable  Newco to vest in itself or  otherwise to deal with such assets and
      shall deliver to Newco forthwith upon receipt any notice or other document
      concerning or relating to such assets.

<PAGE>

5.4   THIRD PARTY CONSENTS

      Subject to Clause 7, the  provisions  of Schedule 7 shall apply in respect
      of the  sale  and  purchase  of any  Business  Asset  referred  to in such
      Schedule and in respect of the assumption by Newco of any Newco  Liability
      referred to in such  Schedule and shall,  in respect of any such  matters,
      override any other provision of this Agreement (other than Clauses 1.3 and
      2.2 and 7 which shall override the provisions of such Schedule) .

6.    DEBTORS,  MATERIALS  BUSINESS  DEBTORS,  RETAINED BUSINESS CLAIMS AND
      MATERIALS BUSINESS CLAIMS

6.1   ASSIGNMENT OF PROCEEDS

      TEL shall  assign  or  procure  that  there is  assigned  to Newco any net
      proceeds  of  recovery  of any  Materials  Business  Debtor  or  Materials
      Business  Claim for Newco to retain  for its own  account.  Any  Materials
      Business  Debtor  received  by TEL shall be received by TEL as trustee for
      Newco  absolutely,  TEL shall record such payment  separately in its books
      and shall account to Newco for the same as soon as reasonably  practicable
      after receipt.  For the avoidance of doubt the net proceeds of recovery to
      be assigned shall be calculated  after  deducting any VAT for which TEL is
      liable to account to H M Customs & Excise in respect of the sum payable by
      the Materials Business Debtor.

6.2   MATERIALS BUSINESS DEBTORS AND MATERIALS BUSINESS CLAIMS

      If any Materials  Business  Debtor or Materials  Business Claim is not, or
      gives rise to a cause of action  which is not,  capable of  assignment  to
      Newco (in such  manner  as to permit  Newco to  prosecute  such  Materials
      Business  Debtor or Materials  Business  Claim in its own name) and in the
      case of any Materials Business Debtor or Materials Business Claim which is
      capable of assignment  to Newco in such manner and has not been  assigned,
      pending such assignment, Newco shall be entitled at its own expense in its
      absolute  discretion to take such action as Newco shall deem  necessary or
      desirable to  prosecute,  settle or  compromise  such  Materials  Business
      Debtor or Materials Business Claim, or to avoid, dispute,  resist, appeal,
      compromise  or contest any related  counter-claim  to the extent that such
      counter-claim  is a Newco  Liability,  in the name of TEL, and to have the
      conduct of any related proceedings, negotiations or appeals.

6.3   INDEMNITY

      Newco shall  indemnify TEL against all  liabilities and Costs which it may
      incur in  complying  with  Clauses 6.1 to 6.4  inclusive  or  otherwise in
      connection with any such Materials  Business Debtor or Materials  Business
      Claim or related counter claim to the extent that such  counter-claim is a
      Newco Liability.

<PAGE>

6.4   NOTIFICATION, ASSISTANCE AND PROCEEDINGS

      The provisions of Schedule 8 shall apply to:-

      6.4.1 the notification by one party to the other party of information with
            respect to Materials Business Debtors or Materials Business Claims;

      6.4.2 the  giving  of  assistance  by TEL to  Newco  for the  purposes  of
            recovering  any  amount  due in  respect  of, or  compromising,  any
            Materials  Business Debtor or Materials  Business Claim or avoiding,
            disputing,  resisting,  appealing,  compromising  or contesting  any
            related counter-claim to the extent that such
            counter claim is a Newco Liability; and

      6.4.3 the conduct of any proceedings in respect of any Materials  Business
            Debtor or Materials  Business Claim or any related  counter-claim to
            the extent that such counter-claim is a Newco Liability.

6.5   ACCOUNTING BY NEWCO FOR DEBTORS RECEIVED

      Any Debtor received by Newco shall be received by Newco as trustee for TEL
      absolutely,  Newco shall record such payment  separately  in its books and
      shall account to TEL for the same as soon as reasonably  practicable after
      receipt.

6.6   NOTIFICATION, ASSISTANCE AND PROCEEDINGS

      The provisions of Schedule 8 shall apply to:-

      6.6.1 the notification by one party to the other party of information with
            respect to Debtors or Retained Business Claims;

      6.6.2 the  giving  of  assistance  by  Newco  to TEL for the  purposes  of
            receiving any amount due in respect of, or comprising, any Debtor or
            Retained   Business   Claim  or  avoiding,   disputing,   resisting,
            appealing,  compromising or contesting any related  counter-claim to
            the extent that such counter claim is a TEL Liability; and

      6.6.3 the conduct of any  proceedings  in respect of any Debtor,  Retained
            Business Claim or any related  counter-claim to the extent that such
            counter-claim is a TEL Liability.

<PAGE>

7.    NEWCO LIABILITIES

7.1   ASSUMPTION OF NEWCO LIABILITIES

      Newco agrees to assume,  pay, satisfy,  discharge and fulfil all the Newco
      Liabilities and Costs in respect thereof.

7.2   CONDUCT OF NEWCO LIABILITIES

      Newco shall be entitled at its own expense in its absolute  discretion  to
      take  such  action  as it shall  deem  necessary  or  desirable  to avoid,
      dispute, defend, resist, appeal,  compromise or contest in the name of TEL
      any claims of, or proceedings instituted or threatened by, any third party
      whether before or after the date hereof, in respect of any Newco Liability
      and to have  the  conduct  of any  related  proceedings,  negotiations  or
      appeals.

7.3   INDEMNITY

      Newco shall indemnify:-

      7.3.1 TEL against all Newco Liabilities; and

      7.3.2 TEL  against  all  liabilities  and  Costs  which  it may  incur  in
            complying  with this Clause 7 or  otherwise in  connection  with any
            Newco Liability.

7.4   NOTIFICATION, ASSISTANCE AND PROCEEDINGS

      The provisions of Schedule 8 shall apply to:-

      7.4.1 the notification by one party to the other party of information with
            respect to Newco Liabilities;

      7.4.2 the giving of  assistance  for the purposes of avoiding,  disputing,
            resisting,   appealing,   compromising   or  contesting   any  Newco
            Liability; and

      7.4.3 the conduct of any proceedings in respect of any Newco Liability.

8.    TEL LIABILITIES

8.1   TEL LIABILITIES

      TEL shall be  entitled at its own expense in its  absolute  discretion  to
      take  such  action  as it shall  deem  necessary  or  desirable  to avoid,
      dispute,  defend, resist, appeal,  compromise or contest any claims of, or
      proceedings  instituted or threatened by, any third party,  whether before
      or after the date hereof,  in respect of any TEL Liability and to have the
      conduct of any related proceedings, negotiations or appeals.

<PAGE>

8.2   INDEMNITY

      TEL shall indemnify:-

      8.2.1  Newco against all TEL Liabilities; and

      8.2.2 Newco  against  all  liabilities  and  Costs  which it may  incur in
            complying with this Clause 8 or otherwise in connection with any TEL
            Liability.

8.3   NOTIFICATION, ASSISTANCE AND PROCEEDINGS

      The provisions of Schedule 8 shall apply to:-

      8.3.1 the notification by one party to the other party of information with
            respect to TEL Liabilities;

      8.3.2 the  giving  of  assistance  by  Newco  to TEL for the  purposes  of
            avoiding,   disputing,   resisting,   appealing,   compromising   or
            contesting any TEL Liability; and

      8.3.3 the conduct of any proceedings in respect of any TEL Liability.

9.    EMPLOYEES

      The  provisions  of  Schedule  11  shall  apply  in  relation  to  certain
      employment and related matters.

10.   CONTINUING OBLIGATIONS OF TEL AND NEWCO

10.1  FURTHER ASSURANCES

      TEL  shall  (at  Newco's  Cost)  from time to time  execute  such  further
      assurances  and afford to Newco such  assistance  as Newco may  reasonably
      require  which is within TEL's control for the purpose of vesting in Newco
      or its  nominee  the  benefit  of the  Business  and the  Business  Assets
      (including,  so far as consistent  with the terms of this  Agreement,  the
      benefit of any rights accruing against third parties,  whether such rights
      have or have not accrued or become  enforceable  as at the Transfer  Time)
      and of all the provisions of this Agreement.

<PAGE>

10.2  SHARED SUPPLIER CONTRACTS

      TEL agrees,  to the extent that it is able, to make onward supply of those
      goods or services  provided under Shared Supplier  Contracts to the extent
      that  those  goods or  services  would  have been  utilised  by TEL in the
      Business  had it not been  transferred  to Newco  pursuant to the terms of
      this Agreement on the basis that Newco shall bear its proportionate  share
      of the net cost and expenses under such Shared Supplier Contracts.

10.3  ENVIRONMENTAL AUTHORISATIONS

      TEL shall give all reasonable assistance (other than financial assistance)
      to  Newco  in  applying  for,  or  arranging  for  the  transfer  of,  the
      Environmental Authorisations.

10.4  CONTRACTS

      The provisions of Schedule 6 shall apply.

10.5  CUSTOMER CONTRACTS

      To the extent  that  payment  is made to Newco in respect of any  Customer
      Contract after the Transfer Time,  Newco shall receive the same as trustee
      for TEL absolutely,  shall record such payment separately in its books and
      shall account to TEL for the same as soon as reasonably  practicable after
      receipt.

10.6  NEWCO TAXATION LIABILITIES

      Newco shall be responsible  for all  liabilities  to Taxation  incurred or
      owing by it  (whether or not due and  payable) in respect of the  Business
      following the Transfer  Time  including any stamp duty arising as a result
      of this Agreement or its completion.

11.   VAT

11.1  TEL and  Newco  intend  that  article 5 of the  Value  Added Tax  (Special
      Provisions)  Order 1995  ("ARTICLE 5") shall apply to the sale or sales of
      the Business under, or procured under, this Agreement, so that the sale or
      sales are treated as neither supplies of goods nor supplies of services.

11.2  If  nevertheless  any VAT is  payable  on any  supply by TEL or any supply
      which is  procured  by TEL under this  Agreement,  Newco  shall pay it the
      amount  of that VAT in  addition  to the  price  (and if Newco  delays  or
      defaults in  complying  with its  obligations  under Clause 11.3 pay it an
      amount  equal to any  interest  and  penalties  imposed by HM Customs  and
      Excise  (whether on TEL or another person) arising out of the treatment by
      TEL and Newco of the sale as described in Clause 11.1 above).

<PAGE>

11.3  Without  limiting  Clause  11.2,  VAT shall be  treated  as  payable if HM
      Customs and Excise rule that it is payable  after full  disclosure  of all
      material  facts.  If they have done so before the Transfer  Time,  the tax
      shall be payable by Newco on the Transfer  Time against  issue of a proper
      VAT invoice (issued by TEL or other appropriate person) in respect of such
      VAT. If they do so on or after the Transfer Time, the tax shall be payable
      by Newco  within  five days after TEL gives  Newco  written  notice of the
      ruling  together  with a  proper  VAT  invoice  (issued  by  TEL or  other
      appropriate person) in respect of that VAT.

11.4  If Newco  fails to pay the amount of the tax on the due date under  Clause
      11.3, it shall pay Default Interest on that amount from the due date until
      actual payment (excluding any period for which interest  indemnified under
      Clause 11.2 runs) compounded  monthly except to the extent to which TEL is
      fully  compensated  for Newco's delay by reason of the indemnity in Clause
      11.2 extending to interest.

11.5  With a view to procuring that article 5 applies, Newco:

      11.5.1shall ensure that Newco is  registered  for VAT not later
            than the date of the Transfer Time;

      11.5.2warrants  that  the  Business  Assets  are to be  used by  Newco  in
            carrying on the same kind of  business  as that  carried on by TEL's
            Group and its Affiliates;

      11.5.3warrants  that  Newco  has,  or  will  by the  relevant  date  have,
            properly  made an  election  to waive  exemption  in respect of each
            Non-Exempt  Property  with  effect  from a day not  later  than  the
            relevant date (having obtained the written  permission of HM Customs
            and Excise if  necessary)  and has, or will by that date have,  duly
            given to HM  Customs  and  Excise the  written  notification  of the
            election required to make the election effective; and

      11.5.4covenants  that  Newco will not revoke  the  election  within  three
            months after the relevant date.

      In this paragraph "RELEVANT DATE" has the same meaning as in paragraph (2)
      of article 5.

11.6  TEL and Newco  envisage  that s. 49 of the Value Added Tax 1994 will apply
      to the sale and purchase of the Business  Assets under this  Agreement but
      intend that TEL should retain the records referred to in that section, and
      accordingly:

      11.6.1notwithstanding   anything  in  this  Agreement  TEL  shall  not  be
            required to deliver to Newco the records referred to in s.49;

<PAGE>

      11.6.2TEL shall  make a request to HM  Customs  and Excise  under s.49 for
            the records to be preserved by TEL;

      11.6.3if or for  so  long  as  that  request  is not  granted,  TEL  shall
            preserve  the  records on behalf of Newco for such  period as may be
            required  by  law,  and  shall  during  that  period   permit  Newco
            reasonable access to them to inspect or make copies of them; and

      11.6.4TEL may fulfil its  obligations  under  Clause  11.6.3 by  procuring
            that a  future  transferee  of its  business  or  any  other  person
            preserves the records and permits  reasonable access as mentioned in
            that paragraph,  in which case TEL shall notify Newco of the name of
            that person.

11.7  In respect of each Non-Exempt Property mentioned in Clause 11.5.1 either:

      11.7.1without  prejudice to that  subclause,  Newco shall on or before the
            Transfer Time give to TEL evidence  reasonably  satisfactory  to TEL
            that the election has been made and written  notification duly given
            in accordance with that subclause; or

      11.7.2if Newco  does not give  that  evidence,  it shall be  assumed  that
            those  things  have not been done and  notwithstanding  Clause  11.3
            Newco  shall  on the  Transfer  Time  pay to TEL the  amount  of VAT
            chargeable  in respect of the relevant  Non-Exempt  Property on that
            assumption but any  forbearance of TEL to insist on its rights under
            this  subclause  shall be without  prejudice to its rights under the
            preceding provisions of this clause.

11.8  References in Clause 11.5 to Newco shall be construed as references to the
      transferee within the meaning of the corresponding  provision of article 5
      if different.

12.   AVAILABILITY OF INFORMATION

      Each of TEL and Newco  shall  make  available  to the other free of charge
      upon written  request all  information  (or copies of any  information  in
      writing) which the other may reasonably  require  relating to the Business
      and the  Business  Assets  (including,  without  limitation,  any  records
      required  for the  purposes  of VATA or the  Regulations  or  relating  to
      taxation of any kind  (including  Taxation)  but not for the  avoidance of
      doubt the Customer Contracts or the Commercial and Marketing Know-How).

13.   INDEPENDENT ACCOUNTANT

13.1  If either party wishes to refer any matter in dispute in  accordance  with
      the  provisions  of Clause 3 or Schedule 14 for  determination  under this
      Clause it shall give notice to the other  requiring the  appointment of an
      independent accounting firm of international  reputation ("THE INDEPENDENT
      ACCOUNTANT")  excluding  accounting  firms who have acted as  auditors  of
      either  party or of any of their  Affiliates  in the last 5 years.  If the
      parties are unable to agree upon the Independent Accountant within 14 days
      of such notice, then the Independent  Accountant shall be appointed by the
      President for the time being of the Institute of Chartered  Accountants in
      England and Wales on the application of either party.

<PAGE>

13.2  The Independent Accountant shall act as an expert and not as an arbitrator
      and his  decision  shall (in the absence of  manifest  error) be final and
      binding  on the  parties.  The  Independent  Accountant  shall  afford the
      parties the opportunity of making written representations to him and shall
      make his determination within 40 days of his appointment.

13.3  The fees and expenses of the Independent  Accountant shall be borne by the
      parties  in equal  shares  unless  the  Independent  Accountant  otherwise
      determines.

14.   DEFAULT INTEREST

      Subject as otherwise  provided to the contrary in this  Agreement,  if any
      sum due for  payment  under  this  Agreement  or in  accordance  with this
      Agreement  is not paid on the due date the  party  in  default  shall  pay
      Default  Interest  on that sum from the due date  until the date of actual
      payment calculated on a day to day basis.

15.   GENERAL

15.1  Unless otherwise expressly stated, all claims made and payments to be made
      under this Agreement shall be made in US Dollars. Payments to TEL shall be
      made in immediately  available funds to the account of TEL at such account
      as TEL may notify to Newco and to Newco in immediately  available funds to
      such  account as Newco may notify to TEL.  All  payments  and values under
      this  Agreement  shall be in US Dollars  and where an amount is not itself
      calculated  in US Dollars,  it shall be  converted  into US Dollars at the
      mid-market  closing  exchange  rate for that  currency  into US Dollars as
      published  in the  London  Edition  of The  Financial  Times  published  2
      Business  Days prior to the date on which the  relevant  payment is due or
      where no such rate is published,  at the rate quoted by Citibank,  N.A. at
      the close of business in London on that date.  This  sub-clause  shall not
      apply to Schedule 14.

15.2  Save as otherwise provided to the contrary in this Agreement, each payment
      to be made under this Agreement shall be made in the currency in which the
      relevant  amount  is  payable,   free  and  clear  of  all  deductions  or
      withholdings  of any kind,  except for those  required by law,  and if any
      deduction or withholding must be made by law, an additional amount will be
      paid which is necessary to ensure that the recipient receives a net amount
      equal to the full amount  which it would have  received if the payment had
      been made without the deduction or withholding.

<PAGE>

15.3  None of the rights or obligations  under this Agreement may be assigned or
      transferred   without  the  written  consent  of  the  other  party  ("the
      Non-Assigning  Party") other than an assignment of the rights (but not the
      obligations) to an Affiliate of the assigning party provided that:

      (a)   such  assignment  shall only be permitted if the  assignment  has no
            adverse effect on the Non-Assigning Party;

      (b)   if the Affiliate to which the rights have been assigned ceases to be
            an  Affiliate  of the  assigning  party,  the rights which have been
            transferred  shall be  re-transferred  to the party which originally
            assigned  those  rights or to  another  Affiliate  of that  original
            assigning party; and

      (c)   it  shall be a  condition  of any such  assignment  that  reasonable
            notice  is  given  in  writing  to the  Non-Assigning  Party  of the
            proposal to assign, (identifying the rights proposed to be assigned,
            the  identity  of the  proposed  assignee  and  such  other  details
            relating thereto as the Non-Assigning Party may reasonably require).

15.4  Save as  otherwise  provided in this  Agreement,  each party shall pay the
      costs and expenses incurred by it in connection with the entering into and
      completion of this Agreement.

15.5  This Agreement may be executed in any number of counterparts, all of which
      taken together  shall  constitute one and the same agreement and any party
      may enter into this Agreement by executing a counterpart.

15.6  No  amendment,  variation or waiver of this  Agreement or any provision of
      this  Agreement  shall  be  effective  unless  it is in  writing  and duly
      executed by or on behalf of both parties.

16.   WHOLE AGREEMENT

16.1  This Agreement (if and when executed) contains the whole agreement between
      the parties relating to the transaction contemplated by this Agreement and
      supersedes all previous  agreements  between the parties  relating to such
      transaction.

16.2  Each of the parties to this Agreement acknowledges on its own behalf that,
      in  agreeing  to enter  into  this  Agreement,  it has not  relied  on any
      representation,  warranty,  collateral contract or other assurance (except
      those set out in this Agreement) and waives all rights and remedies which,
      but for this Clause,  might otherwise be available to it in respect of any
      such  representation,  warranty,  collateral  contract or other assurance,
      provided  that nothing in this Clause shall limit or exclude any liability
      or fraud.

<PAGE>

17.    NON-MERGER AND SURVIVORSHIP

      Anything contained in this Agreement to which effect has not been given on
      or prior to  completion  of the sale and  purchase of the Business and the
      Business  Assets or which,  by its terms is capable of taking effect after
      such completion or is a continuing obligation of the relevant party, shall
      remain  and  continue  in  full  force  and  effect  notwithstanding  such
      completion or otherwise.

18.   NOTICES

      Any notice,  claim or demand requiring to be served under or in connection
      with this Agreement shall be in writing and shall be sufficiently given or
      served  if  delivered,  in the  case of  TEL,  to  TEL,  addressed  to its
      secretary at its  registered  office and, in the case of Newco,  to Newco,
      addressed to its secretary at its registered office. Any such notice shall
      be  delivered  by hand or sent by fax or sent by prepaid  first class post
      and if  delivered by hand or sent by fax shall  conclusively  be deemed to
      have  been  given or served  at the time of  despatch  and if sent by post
      shall  conclusively be deemed to have been received 48 hours from the time
      of posting.

19.   GOVERNING LAW

      This  Agreement  shall be governed by and  construed  in  accordance  with
      English  law except in relation  to real  property  located in a territory
      outside  England and Wales,  in which case the  governing law shall be the
      law of that territory.  The parties  irrevocably  agree that the Courts of
      England are to have  exclusive  jurisdiction  to settle any disputes which
      may arise out of or in connection with this Agreement.

THIS AGREEMENT was entered into on the date stated on page 1.

<PAGE>

                                   SCHEDULE 1

DESCRIPTION OF THE BUSINESS

Part I - Business generally

The manufacture of titanium dioxide pigments and related  intermediate  products
(including  sulphuric  acid and  zirconia  frit),  as carried on by TEL from the
Properties but for the avoidance of doubt shall not include:-

      (i)   the  manufacture  by way of  trade of any  organometallic  compounds
            excepting  that  manufacture of a pigment which  incorporates  as an
            essential  feature of its  composition  an  organometallic  compound
            shall  not be  considered  to be  manufacture  of an  organometallic
            compound as such;

      (ii)  the  manufacture  (other  than for  subsequent  transfer  to Tioxide
            Specialties  Limited on agreed terms) by way of trade of any form of
            Ultrafine Titanium Dioxide.

Part II - Materials Business

The supply from the Properties of ferric  sulphate and copperas  manufactured as
co-products from the titanium dioxide process. The supply from the Properties of
white and red Gypsum  manufactured  as  co-products  from the  titanium  dioxide
process.



<PAGE>


                                   SCHEDULE 2
THE PROPERTIES

------------------ --------------------------------------- -----------------
PART I
------------------ --------------------------------------- -----------------
Address            Title No./Root of Title                 Present Use
------------------ --------------------------------------- -----------------
Factory at         HS40627; HS98246; (conveyance dated     Production of
Pyewipe Road       6.4.1946 and between RV Sutton's        titanium dioxide
Grimsby            Settled Estates and its Trustees (1)
                   and British Titan Products Company
                   Limited (2)
------------------ --------------------------------------- -----------------
Healing Cress      Conveyance dated 1.6.1971 made          Water
Beds               between British Titan Limited (1) and   extraction from
                   British Titan Products Company          cress beds
                   Limited (2)
------------------ --------------------------------------- -----------------
*Nettleton         Conveyance dated 01.06.78 made          Disused quarry
Bottom Quarry      between Roade Aggregates Limited (1)    -landfill of
                   and Appollo Site Services Limited (2)   neutralised
                                                           digester residue
------------------ --------------------------------------- -----------------
*Killingholme      Conveyance dated 31.12.1981 made        Drying Plant
                      between Glanford Borough Council (1)
                        and W T Scales & Son Limited (2)
------------------ --------------------------------------- -----------------
PART II
------------------ --------------------------------------- -----------------
ADDRESS            TITLE NO./ROOT OF TITLE
------------------ --------------------------------------- -----------------
Strip of land on   Lease dated 30.5.1989 made between      Pipeline site
the banks of the   ABP Limited (1) and Tioxide UK
River Humber       Limited (2)
------------------ --------------------------------------- -----------------
Gypsum Store of    Lease dated 4.9.1996 made between       Storage of
Ownby              Glentworth Bulb Co. Limited (1) and     gypsum
                   TEL (2)
------------------ --------------------------------------- -----------------

*  The  beneficial  interest in these two  Properties is owned by TEL. The legal
   title to the  Property  at  Nettleton  Bottom  Quarry  is held by  Broadcount
   Properties  Limited (an Affiliate of ICI) and the legal title to the Property
   at Killingholme is held by WT Scales Limited (an Affiliate of ICI).

<PAGE>


                                   SCHEDULE 3

EXCLUDED ASSETS AND EXCLUDED LIABILITIES

(Clause 1.1)

PART I

EXCLUDED ASSETS

1.    All cash of TEL in bank and in hand and the  benefit of all bank  accounts
      of TEL.

2.    Amounts due to TEL arising out of any payment  (including  overpayment) of
      Taxation  and any and all  other  rights  in  respect  of or  relating  to
      Taxation.

3.    Commercial and Marketing Know-How.

4.    Customer Contracts and any rights thereunder.

5.    The CO2 Liquefaction plant owned by ICI or any of its Affiliates currently
      at the Properties.

6.    Any right or action to which TEL may be  entitled  (whether  in  contract,
      tort or otherwise)  relating to the Excluded  Liabilities and the Excluded
      Assets.

7.    Debtors.

8.    Intellectual Property relating to the Business and any rights (contractual
      or otherwise) relating to Intellectual Property of the Business.

9.    Retained Business Claims.

10.   The  accounting  records  of TEL in so far as  they do not  relate  to the
      Business.

11.   Subject to the provisions of Clause 10.2 any rights and benefits under the
      Shared Supplier Contracts.

12.   Work-in-progress  and finished  products  owned by TEL which is located at
      but has not been manufactured at any of the Properties.

13.   Any assets,  rights or benefits  relating  to the  Business  not listed in
      Clause 2.1.

14.   The shares  held by TEL whilst TEL was an  Affiliate  of ICI in W T Scales
      Limited, E&A West Limited, Maidgold Limited and Broadcount
      Properties Limited.


<PAGE>


PART II

EXCLUDED LIABILITIES

1     Taxation  incurred  or owing by TEL  (whether  or not due and  payable) in
      respect of the Business up to the Transfer Time.

2     Liabilities relating to Customer Contracts.

3     The following matters:-

            Stiller Transport claim
            Personal injury claim (Mr R Hartley)


<PAGE>


                                   SCHEDULE 4

ALLOCATION OF CONSIDERATION TO BUSINESS ASSETS PURCHASED

(Clause 3.3)

Business Asset                      Allocation of the Final  Consideration (US$)

A.    Working Capital               (1)

B.    Materials Commercial and
      Marketing Knowhow             1,000,000

C.    Land                          (2)

D.    Buildings                     (2)

E.    Plant and Equipment           (3)

F.    Other Business Assets         Nil
                                    ------------------

G.    Total Consideration           Agreed Newco Value
                                    ------------------

(1)   Actual Net Working  Capital (as defined in Schedule 14) plus agreed uplift
      to Fair Market Value (US$215,000)

(2)   Net Book  Value of Land and  Buildings  as at the  Transfer  Time in TEL's
      A-Forms

(3)   G - (A+B+C+D+F)


<PAGE>


                                   SCHEDULE 5

PROVISIONS RELATING TO THE PROPERTIES

(Clause 2.3)

PART A

Provisions relating to the Properties

1.    Subject to  Paragraph 6 below,  TEL shall on the date  hereof  complete an
      assurance to Newco of each of the Freehold  Properties  and the  Leasehold
      Properties  in a form  previously  approved by the parties  (each of which
      shall be deemed for the  purposes of this  Agreement to be an agreement in
      Agreed  Terms)  and  shall on the date  hereof  deliver  (or  procure  the
      delivery of) each such  assurance or  disposition  to Newco and shall also
      deliver (or procure the delivery of)  possession of each of the Properties
      and  beneficial  ownership  of  each  of  the  Properties  shall  pass  on
      completion of any such assurance or disposition.

2.    On the date hereof TEL shall  either  deliver (or procure the delivery of)
      to Newco or hold to Newco's order the title deeds to the Properties.

3.    With effect on and from the date hereof until the Transfer Time, TEL shall
      procure  that the  interest of Newco is noted on all policies of insurance
      with respect to the Properties.

4.    In relation to all of the  Properties,  TEL shall be entitled to remain in
      occupation,  as licensee  only,  until but not after the Transfer Time and
      Newco shall make no charge in respect of the grant of any such licence.

5.    TEL shall co-operate with Newco to facilitate registration of title to any
      of the  Properties  once  vested in Newco and,  without  prejudice  to the
      generality of the foregoing,  shall assist in depositing any relevant land
      or other  certificates or documents at H M Land Registry or other relevant
      registry and in replying to any  requisitions  raised by H M Land Registry
      or other relevant registry.

6.    Landlords' Consents for Leasehold Properties

6.1   Failure to Obtain Consents

      6.1.1 Where a landlord's  consent is required and has not been obtained by
            the date hereof in respect of any of the  Properties,  such Property
            will  not,  unless  Newco so  elects  (an  "ELECTED  PROPERTY"),  be
            transferred  on the date  hereof but will be held in trust for Newco
            absolutely  from the date hereof  until such  landlord's  consent is
            obtained  or Newco  requires  the  transfer  or  assignment  of such
            Property to it in accordance  with  paragraph 6.3. TEL shall account
            to and be  indemnified  by Newco  accordingly  and shall  deliver to
            Newco forthwith upon receipt any notice or other document concerning
            or relating to such Property or, upon request from Newco, a power of
            attorney to enable Newco to deal with such Property.

<PAGE>

      6.1.2 TEL will co-operate in any reasonable arrangements proposed by Newco
            designed to provide for Newco the benefits of any such Property.

6.2   Subsequent Consents

      After the date hereof, TEL shall continue to use all reasonable endeavours
      (assisted  if  necessary  by Newco) to obtain any  outstanding  landlord's
      consent  at  Newco's  cost in  respect  of any  Property  (which is not an
      Elected  Property) and keep Newco  informed of progress in obtaining  such
      consents.

6.3   Notice to Transfer or Assign

      Following the date hereof, Newco may serve notice on TEL at any time after
      the relevant consent is obtained  requiring TEL to execute and deliver any
      transfer  or  assignment  to Newco of any  such  Property  which is not an
      Elected  Property and TEL will arrange for the  execution  and delivery of
      such  transfer or  assignment  (together  with the  relative  documents of
      title) to Newco not later than five working days after the receipt  either
      of such  notice  or of the  engrossment  of such  transfer  or  assignment
      whichever is the later.

6.4   Occupation by Purchaser

      Newco  may at any  time  after  the  Transfer  Time go into or  remain  in
      occupation of any Leasehold  Property for which necessary  consent has not
      been   obtained,   as  licensee  of  TEL  and  subject  to  the  following
      provisions:-

      (a)   Newco  shall pay,  or  indemnify  TEL  against,  all  outgoings  and
            expenses relating thereto arising after Newco's occupation begins;

      (b)   Newco shall be entitled to any income thereof  arising after Newco's
            occupation begins;

      (c)   Newco shall  indemnify TEL against all losses,  liabilities,  Costs,
            actions, proceedings, claims and demands arising from the possession
            or  occupation  of such  Property  by Newco and in  particular  (but
            without  limitation)  will observe and perform all the covenants and
            conditions  contained or referred to in the leases relating thereto;
            and

<PAGE>

      (d)   in the  event  that the  landlord  threatens  to  forfeit  the lease
            relating to any  Leasehold  Property  or  forfeits  such lease Newco
            shall forthwith vacate such Leasehold Property.

6.5   Terms of purchase

      The Properties  are sold together with all easements,  rights and licences
      appurtenant  thereto and all buildings and structures  thereon but subject
      to all easements,  rentcharges,  covenants,  leases, tenancies,  licences,
      agreements  and  other  matters  affecting  the  same  and  the  Leasehold
      Properties  are sold subject also to the rents,  covenants and  conditions
      reserved by or contained in the leases under which the same are held.



<PAGE>


                                   SCHEDULE 6

PROVISIONS RELATING TO THE CONTRACTS

(Clause 10.4)

1.    Newco shall with effect from the Transfer  Time carry out and complete for
      its  own  account  the  Supplier  Contracts  and  the  Materials  Customer
      Contracts to the extent that the same have not been  previously  performed
      (whether due for  performance  prior to, on or after the  Transfer  Time).
      Newco  shall  indemnify  TEL  against  all Costs,  claims and  liabilities
      arising  prior  to,  on or after  the  Transfer  Time by  reason  of or in
      connection  with  the   non-performance  or  the  defective  or  negligent
      performance  (whether by TEL or Newco) of the  Supplier  Contracts  or the
      Materials Customer Contracts.

2.    Newco shall be responsible  for and shall  indemnify TEL against any claim
      from  customers  for repair,  replacement,  damage or otherwise  duly made
      before or after the Transfer Time under any guarantees or warranties given
      expressly or by  implication of law by TEL in respect of any goods sold or
      service supplied by TEL prior to the Transfer Time in the Business.

3.    To the extent  that any  payment  is made to TEL in  respect of  Materials
      Customer  Contracts after the Transfer Time, TEL shall receive the same as
      trustee for Newco absolutely,  shall record such payment separately in its
      books  and  shall  account  to Newco  for the  same as soon as  reasonably
      practical after receipt. In determining the liability under this paragraph
      of TEL to account to Newco for amounts  received,  regard  shall be had to
      any  liability  of TEL to account to HM Customs  and Excise for any United
      Kingdom VAT in respect of the supply of goods and/or  services (made under
      any  Materials  Customer  Contract) to which such  amounts  relate and the
      liability of TEL under this paragraph shall be reduced accordingly.

4.    In  determining  the  liability of Newco to reimburse  TEL for any amounts
      paid by TEL to suppliers under Supplier Contracts,  regard shall be had to
      the  extent to which TEL has been or is able to  recover  payment of input
      tax for United Kingdom VAT purposes in respect of supplies of goods and/or
      services  (under a Supplier  Contract)  made to TEL to which such  amounts
      relate and the  liability of Newco under this  Agreement  shall be reduced
      accordingly.

5.    If TEL has prior to the Transfer Time  sub-contracted  the  performance of
      any  contracts  for the supply of goods or other  products  to any person,
      Newco shall  (unless TEL would have been  entitled  under the  contract to
      reject the same and Newco determines to reject the same), on behalf of the
      relevant customer seek or accept delivery from such person of the goods or
      other  products in respect of which such  contract was made and shall make
      the same available for collection by such customer.



<PAGE>


                                   SCHEDULE 7

PROVISIONS RELATING TO THIRD PARTY CONSENTS

(Clause 5.4)

1.    Where  any  Business  Asset,   including  any  Materials  Business  Claim,
      Materials Business Debtor, Materials Customer Contract,  Supplier Contract
      and any  property  or asset  leased  by TEL  relating  exclusively  to the
      Business (but excluding the Leasehold  Properties) requires the consent or
      agreement of any third party for the same to be assigned or novated to or,
      in the  case of any  leased  property,  to be  sub-leased  to,  Newco,  (a
      "RELEVANT  BUSINESS ASSET") or any Newco Liability requires the consent or
      agreement of any third party for the same to be  performed  by Newco,  and
      any such consent has not been  obtained  prior to the Transfer  Time,  the
      provisions of this Schedule shall apply.

2.    In  respect of any  Relevant  Business  Asset,  this  Agreement  shall not
      constitute an assignment or a purported assignment thereof, or a sub-lease
      or a  purported  sub-lease  thereof,  to Newco if any such  assignment  or
      sub-lease  would  constitute  a  breach  of  any  agreement,  contract  or
      undertaking  (a  "Relevant  Agreement")  of TEL with or to the third party
      from whom any such consent as is referred to in paragraph 1 is required to
      be obtained, pending such consent being obtained.

3.    TEL and Newco shall jointly use all  reasonable  endeavours  and render to
      each other all reasonable  assistance (not being  financial) to obtain the
      consent of such third party to an  assignment,  or novation  (whichever is
      available)  or (if  neither an  assignment  or novation  is  available)  a
      sub-lease of the Relevant Business Asset. During the period from and after
      the  Transfer  Time until any required  consent  shall be obtained and the
      Relevant Business Asset transferred,  or assigned or novated to Newco, any
      such  Relevant  Business  Asset  shall be held in  trust by TEL for  Newco
      absolutely  with effect from the  Transfer  Time until the same shall have
      been delivered and/or formally  transferred,  assigned or novated to Newco
      and TEL  shall  grant  to Newco  such  powers  of  attorney  as Newco  may
      reasonably  require to enable Newco to vest in itself or otherwise to deal
      with such Relevant  Business  Assets and shall deliver to Newco  forthwith
      upon receipt any notice or other  document  containing or relating to such
      Relevant Business Assets.

4.    This  Agreement   shall  not  constitute  an  assumption  or  a  purported
      assumption of any Newco Liability in respect of which performance  thereof
      by Newco would require the consent or agreement of any third party if such
      assumption  or  purported  assumption  would  constitute  a breach  of any
      Relevant Agreement  pursuant to which the obligation arises.  Newco shall,
      to the  extent  that the same  would not  result in any breach of any such
      Relevant Agreement perform as TEL's  sub-contractor all the obligations of
      TEL  thereunder and indemnify TEL against all  liabilities  (and all Costs
      reasonably incurred by TEL) arising in connection therewith.

<PAGE>

5.    Where  the  performance  by  Newco  of any  Relevant  Agreement  as  TEL's
      sub-contractor  would  result in a breach of any  agreement,  contract  or
      undertaking  with a third party (whether  under the Relevant  Agreement in
      respect of which the obligation  arises or under any other  agreement with
      any other person relevant to the  performance of such Relevant  Agreement)
      Newco shall not perform such obligations as TEL's  sub-contractor  but TEL
      shall continue to perform such obligations on behalf of and at the risk of
      Newco and Newco agrees to indemnify TEL against all  liabilities  (and all
      Costs reasonably incurred by TEL) arising in connection therewith.

6.    TEL agrees and acknowledges  that,  insofar as any Relevant Business Asset
      is  expressed  in  this  Schedule  to be held on  trust  by TEL for  Newco
      absolutely,  any  monies  received  by TEL in  respect  thereof  shall  be
      accounted for by TEL to Newco and any profit arising out of the conduct of
      the Business  utilising any such Business  Asset shall accrue to Newco and
      TEL agrees to pay forthwith to Newco any such  amounts,  less in each case
      an amount equal to the relevant Costs which TEL is entitled to recover and
      deduct from any such payment.

7.    Newco expressly  acknowledges  that insofar as any Newco Liability has not
      been effectively  assumed by Newco and, insofar as the same relates to the
      performance  of any  obligations  under any  Relevant  Agreement  and such
      obligations  are,  pursuant  to the  provisions  of this  Schedule,  to be
      performed by Newco as TEL's  sub-contractor  or by TEL on behalf of Newco,
      such  performance  is at the risk and cost of Newco and any loss and costs
      in relation  thereto  shall be offset  against any amounts to be accounted
      for to Newco  pursuant to paragraph 6. To the extent that any loss or Cost
      exceeds any such amount to be accounted for to Newco pursuant to paragraph
      6, Newco shall  indemnify  TEL against or reimburse TEL for any payment in
      respect thereof.

8.    Insofar as the provisions of this Schedule  provide for TEL to perform any
      Relevant  Agreement or otherwise  assume any  obligation,  Newco agrees to
      lease or licence  (so far as Newco is able to grant the same) to TEL,  for
      the period  during  which any such  obligation  exists as provided in this
      Schedule, any Business Assets acquired by Newco pursuant to this Agreement
      and necessary for the purposes of such performance.  The consideration for
      any  such  lease  or  licence  shall be TEL's  agreement  to  perform  any
      obligations  expressed to be performed by it in this Schedule in favour of
      and for the  account of Newco for any monies or  profits as  described  in
      paragraph  6 above  and so  that  TEL  shall  not be  required  to pay any
      additional amount in respect thereof.

<PAGE>

9.    Newco agrees to make  available  to TEL the  services of any  Transferring
      Employees or any Offer  Employees to enable TEL to perform any obligations
      expressed to be performed by it in this  Schedule:  PROVIDED that any such
      employees  shall continue to be employees of Newco and Newco shall perform
      and observe all the  obligations  of the employer  under or in  connection
      with the  contracts  of  employment  of such  persons  (including  without
      limitation  holiday  entitlement  and pay) and Newco shall  indemnify  TEL
      against or  reimburse  TEL for any payment  required to be made or made by
      TEL to any such Transferring Employees or Offer Employees.

10.   Upon any such consent as is referred to in paragraph 1 being obtained,  as
      a result of which any  assignment,  sub-lease or any other transfer of the
      benefit of any Relevant Business Asset to Newco or the assumption by Newco
      of any Newco  Liability  would  not  constitute  a breach of any  Relevant
      Agreement  of TEL with or to the third party from whom any such consent is
      obtained, such Relevant Business Asset shall pursuant to this paragraph be
      assigned,  sub-leased or the benefit thereof otherwise vested in Newco, or
      Newco shall assume the Newco Liability, as the case may be on the terms of
      this Agreement and:-

10.1  any lease or licence for any  Business  Assets  referred to in paragraph 8
      shall thereupon automatically terminate; and

10.2  insofar as the services of any  Transferring  Employees or Offer Employees
      have been made  available to TEL as provided in paragraph 9 in  connection
      with  such  Relevant   Business  Asset,   such  services  shall  thereupon
      automatically  cease to be made  available in any case,  without  Costs to
      TEL, and the provisions of this Schedule shall cease to apply with respect
      thereto.

11.   Without prejudice to the generality of the foregoing,  TEL shall,  without
      incurring any Cost,  take such actions as Newco may reasonably  request to
      procure that suppliers  under the Supplier  Contracts and customers  under
      the  Materials   Customer   Contracts   unconditionally   consent  to  the
      substitution  of Newco as a party  thereto  with effect from the  Transfer
      Time but,  in any case where such  consent  is  refused or  otherwise  not
      obtained, prior thereto:-

11.1  TEL shall  receive any goods  delivered to it by the supplier as agent for
      Newco and at Newco's  cost,  taking  reasonable  care,  shall deliver such
      goods to such address of Newco as Newco may specify; and

11.2  Newco shall put TEL in funds to enable TEL to pay in due time the supplier
      in respect thereof.

12.   If, on or before 6 weeks after the  Transfer  Time,  or such later date as
      TEL and Newco may agree,  any  consent  or  agreement  of any third  party
      referred to in paragraph 1 has not been  obtained or if, at any time,  the
      benefit  of any  Relevant  Business  Asset  cannot  be  vested in Newco or
      otherwise  dealt with by Newco,  TEL and Newco shall consider what action,
      if any, is to be taken in relation to the Relevant Business Asset.

<PAGE>

13.   TEL shall not be obliged to take any action pursuant to this Schedule 7 if
      such action  could not be lawfully  undertaken  by TEL, or would result in
      any breach of any  agreement  to which TEL is a party which  breach  would
      entitle the other  party  thereto to  terminate  such  agreement  or would
      result in TEL incurring any Costs of a material amount against which Newco
      has not agreed to indemnify it pursuant to this Agreement or otherwise. In
      so far as,  pursuant  to this  Agreement,  TEL is a trustee of, or acts as
      agent  for  Newco,  TEL  shall  act  with  such  care  and  skill as might
      reasonably  have  been  expected  of TEL in the  conduct  of the  Business
      assuming the sale and  purchase of the  Business  and the Business  Assets
      pursuant to this Agreement had not occurred but,  subject  thereto,  shall
      not have any duties or  responsibility to Newco in respect of so acting or
      have any  liability  to Newco  except to the  extent  that it is guilty of
      wilful  default  or of  acting  otherwise  than  with the  care and  skill
      referred to in this paragraph.

<PAGE>


                                   SCHEDULE 8

NOTIFICATION, ASSISTANCE AND PROCEEDINGS

(Clauses 6, 7 and 8)

1.    NOTIFICATION

      TEL shall  notify  Newco and Newco shall notify TEL, in either case if the
      notifying  party  reasonably  considers  the  subject  matter  thereof  to
      represent a potentially significant right or liability of the other party,
      promptly of receipt of any information,  in whatever form, relating to any
      Debtor,  Materials  Business Debtor,  Retained  Business Claim,  Materials
      Business  Claim,  Newco Liability or TEL Liability and shall supply copies
      of all such  information so received on request.  Either party may enquire
      of the other party if it has received any information  referred to in this
      paragraph and may request  further  details in respect  thereof  including
      copies  of any  materials  in  respect  thereof.  Such  notification  will
      describe the information received with sufficient  particularity to enable
      the  recipient  to assess its  significance  in relation  to such  Debtor,
      Materials  Business Debtor,  Retained Business Claim,  Materials  Business
      Claim, Newco Liability or TEL Liability.

2.    ASSISTANCE

2.1   TEL will promptly give or procure that there is given all such information
      and assistance as Newco shall reasonably  require (including access to any
      books,  correspondence or other documents or records and the right to copy
      the same and to any witnesses or potential  witnesses or officials of TEL)
      for the purpose of:-

      2.1.1 recovering  any  amount  due in  respect  of,  or  compromising  any
            Materials  Business Debtor or Materials  Business Claim or avoiding,
            disputing,  resisting,  appealing,  compromising,  or contesting any
            related counter-claim; or

      2.1.2 avoiding,   disputing,   resisting,   appealing,   compromising,  or
            contesting any Newco Liability.

2.2   Newco shall indemnify the relevant member of TEL's Group against all Costs
      and liabilities which it may incur in complying with paragraph 2.1.

2.3   Newco  will  promptly  give or  procure  that  there  is  given  all  such
      information  and  assistance as TEL shall  reasonably  require  (including
      access to any books,  correspondence or other documents or records and the
      right to copy the same and to any  witnesses  or  potential  witnesses  or
      officials of Newco) for the purpose of:-

<PAGE>

      2.3.1 recovering any amount due in respect of, or compromising  any Debtor
            or  Retained  Business  Claim  or  avoiding,  disputing,  resisting,
            appealing, compromising, or contesting any related counter-claim; or

      2.3.2 avoiding,   disputing,   resisting,   appealing,   compromising,  or
            contesting any TEL Liability.

2.4   TEL shall indemnify  Newco against all Costs and  liabilities  that it may
      incur in complying with paragraph 2.3.

2.5   Each of the parties  agrees to keep the other informed (to the extent that
      party reasonably believes the other party has an interest therein which is
      not insignificant or as reasonably requested by the other party) as to the
      progress of any Materials  Business Claim or Retained Business Claim or of
      any  claim,  demand or action in  respect  of any Newco  Liability  or TEL
      Liability.

3.    CONDUCT OF DISPUTES

3.1   This  paragraph  applies  as to the  conduct  of any  claim  made  by,  or
      proceedings  instituted or threatened by, any third party,  whether before
      or after the date hereof (including any counter-claim)  ("PROCEEDINGS") in
      relation to any  Debtor,  Materials  Business  Debtor,  Retained  Business
      Claim,  Materials  Business Claim, Newco Liability or TEL Liability by the
      party  (the  "CONDUCTING  PARTY")  specified  by this  Agreement  as being
      entitled to conduct  such  Proceedings.  In any case where this  Agreement
      does  not  specify  which  of  the  parties  is to  have  the  conduct  of
      Proceedings in any particular case,  including in circumstances  where the
      potential  responsibility for any liability the subject of any Proceedings
      has not been  allocated  between the parties,  the party  against whom the
      claim has been made, or proceedings  instituted or threatened,  shall have
      conduct of the Proceedings, or, if the claim has been made, or proceedings
      instituted or threatened, against both parties, TEL shall have the conduct
      of the  Proceedings  and, in either case,  accordingly  be the  Conducting
      Party in respect thereof for the purposes hereof.

3.2   The  Conducting  Party  shall  inform the party not having  conduct of the
      Proceedings (the "OTHER PARTY") promptly of all developments regarding the
      Proceedings,  shall consult it and have reasonable regard to its interests
      before  taking any  significant  step in relation to the  Proceedings  and
      shall not settle the  Proceedings  without the consent of the Other Party,
      such consent not to be  unreasonably  withheld or delayed.  The Conducting
      Party  shall  conduct  any  Proceedings  with  reasonable   diligence  and
      competence.  The  Other  Party  shall  render  all  assistance  reasonably
      required in connection with the Proceedings by the Conducting  Party,  and
      shall be  entitled  to payment in respect of that  assistance  only in the
      event that the  assistance it renders is  significantly  greater in extent
      than that provided by the Conducting Party.

<PAGE>

3.3   The Conducting Party may instruct legal advisers  reasonably  satisfactory
      to the Other  Party to  represent  any  member of the Other  Party (or any
      member of the Other  Party's  Group in the case of TEL which is a party to
      the Proceedings:  PROVIDED that in any Proceedings where the named parties
      to any such  Proceedings  (including any added  parties)  include both the
      Conducting  Party (or any  member of its Group in the case of TEL) and the
      Other  Party  (or  any  member  of its  Group  in the  case  of  TEL)  and
      representation  of both parties by the same legal  advisers  would not, in
      the opinion of the legal advisers  appointed by the Conducting  Party,  be
      proper due to actual or potential  conflict of interest  between them, the
      Conducting  Party  shall  instruct  separate  legal  advisers   reasonably
      satisfactory  to the Other Party to represent the Other Party (and members
      of its Group) in such  Proceedings and the Conducting  Party shall pay the
      fees and disbursements of such legal advisers.



<PAGE>


                                   SCHEDULE 9

SUPPLIER CONTRACTS OF A MATERIAL NATURE

(Clause 1.1)

[Details to follow]



<PAGE>


                                   SCHEDULE 10

DOCUMENTS IN THE AGREED TERMS

(Clause 1.1)

Newco Patent and Know-how Licence



<PAGE>


                                   SCHEDULE 11

EMPLOYEES AND OTHER PERSONNEL

(Clause 9)

1.    Newco undertakes to TEL that it will,  insofar as it has not done so prior
      to the date hereof:-

1.1   deliver to each of the Transferring  Employees,  a letter  confirming that
      the employee will  transfer  employment to Newco by reason of the transfer
      of the Business; and

1.2   deliver to each Offer Employee,  a letter  offering  employment with Newco
      with  effect  from the  Transfer  Time on their  terms and  conditions  of
      employment  immediately  prior  to the  Transfer  Time  (other  than as to
      employer).

2.    The parties  acknowledge  and agree that the sale of the Business from TEL
      to Newco is a  "relevant  transfer"  within the  meaning  of the  Transfer
      Regulations.

3.    The parties  further  acknowledge  and agree that pursuant to the Transfer
      Regulations,  the  contract  of  employment  of each  of the  Transferring
      Employees  (save  insofar  as  such  contract   relates   to/includes  any
      occupational pension scheme as defined for the purposes of Regulation 7 of
      the Transfer  Regulations)  shall be transferred to Newco with effect from
      the Transfer Time which shall be the "time of transfer" under the Transfer
      Regulations.

4.    As from the  Transfer  Time,  Newco  shall  perform  and  observe  all the
      obligations of the employer  under or in connection  with the contracts of
      employment  of  the   Transferring   Employees  and  the  Offer  Employees
      (including without limitation accrued holiday pay, holiday entitlement and
      pay) and shall  indemnify TEL and keep TEL  indemnified,  against each and
      every  action,  proceeding,  liability,  Costs,  claim,  or loss or demand
      arising from Newco's failure to perform and observe the said obligations.

5.    Notwithstanding  any  other  provision  in  this  Agreement,  Newco  shall
      indemnify TEL and keep TEL indemnified  against all actions,  proceedings,
      liabilities, Costs, claims, losses, and demands made by or arising from:-

5.1   any  Transferring   Employees  and  the  Offer  Employees  in  respect  of
      employment on or prior to the Transfer Time;

5.2   the dismissal (whether express, constructive or otherwise) of any employee
      in connection with the transfer of the Business to Newco;

<PAGE>

5.3   any change in the working  conditions  of the  Transferring  Employees  or
      Offer Employees or any of them occurring after the Transfer Time;

5.4   the change of employer  occurring  by virtue of the  Transfer  Regulations
      and/or this Agreement;

5.5   the  employment  by  Newco  on or after  the  Transfer  Time of any of the
      Transferring  Employees or Offer Employees other than on terms  (including
      terms  relating to any  occupational  pension  scheme) at least as good as
      those enjoyed immediately prior to the Transfer Time or the termination of
      the employment of any of them on or after the Transfer Time;

5.6   any claim by any  Transferring  Employee  or Offer  Employee  (whether  in
      contract or in tort or under statute (including the Treaty of Rome and any
      directives  made  under the  authority  of that  Treaty))  for any  remedy
      including, without limitation, in respect of unfair dismissal, redundancy,
      equal pay, sex, race or disability discrimination; or

5.7   any  claim  by any  employee  representatives,  trade  union  or  affected
      employee that there has been a failure to comply with any  requirement  of
      Regulation  10 of the Transfer  Regulations,  any failure to inform and/or
      consult  employees  imposed by any  collective  agreement,  European Works
      Council Agreement or other employee representative agreement.

6.    Newco  shall,  as from the  Transfer  Time,  perform  and  observe all the
      obligations  of TEL as  employer,  or host  (where the  employee  has been
      seconded to TEL but is not employed by TEL) under or in connection with:-

6.1   the contracts of employment of the Offer Employees; or

6.2   any contract relating to their secondment to TEL; or

6.3   any undertaking (whether legally binding or not) to employ any such person
      after a period of absence  (whether by reason of maternity,  career break,
      education,  training or otherwise) and Newco shall  indemnify TEL and keep
      TEL  indemnified  against each and every  action,  proceeding,  liability,
      Costs,  claim,  loss, and demands  arising from Newco's failure to perform
      and observe such obligations or undertakings.

      In accordance with its obligations under the Transfer  Regulations,  Newco
      shall  provide TEL in writing  with such  information  and at such time as
      will  enable  TEL to  carry  out its  duties  under  Regulation  10 of the
      Transfer Regulations concerning measures envisaged by Newco in relation to
      the Transferring Employees or the Offer Employees.

<PAGE>

7.    Newco shall be entitled at its own expense in its absolute  discretion  to
      take such action as Newco shall deem  necessary or desirable to prosecute,
      settle or  compromise  any claims  of, or  proceedings  instituted  by any
      Transferring  Employee or any other  person,  whether  before or after the
      date hereof,  in respect of the matters  expressed in this  Schedule to be
      obligations  of Newco or in respect of which Newco has agreed to indemnify
      TEL as  provided  herein  and  shall  have  the  conduct  of  any  related
      proceedings, negotiations or appeals in accordance with Schedule 8.

8.    Any  reference  in this  Schedule to contract of  employment,  employer or
      employee shall, unless the context otherwise requires, include contract of
      training  and  contract  of  apprenticeship,   trainer,  and  trainee  and
      apprentice, respectively.

9.    Newco agrees that for a period of four years from the Transfer Time:

9.1   the  Transferring  Employees  and Offer  Employees  will receive and enjoy
      contractual  remuneration  and benefits  (including  retirement  benefits)
      which,  judged  objectively  are no less  favourable  overall  than  their
      contractual remuneration and benefits at the Transfer Time;

9.2   it will not make any unilateral  material change to the contractual  terms
      and conditions of employment of the  Transferring  Employees and the Offer
      Employees,  (which includes those terms contained in a letter to employees
      dated 19 June 1991 from TEL) without prior  consultation where required by
      any local laws or agreements  with  recognised  trade unions,  appropriate
      employee   representatives   or  the  Transferring   Employees  and  Offer
      Employees.

<PAGE>


                                   SCHEDULE 12

SHARED SUPPLIER CONTRACTS

Contract for the supply of ilmenite  between (1) Tioxide  Group plc as agent for
Tioxide UK Ltd,  Tioxide  Australia  Ltd and  Tioxide  Espana SA (2)  Westralian
Sands.

<PAGE>


                                   SCHEDULE 13

TRANSFERRING EMPLOYEES

[Details to follow]















OFFER EMPLOYEES

[Details to follow of those  employees  currently  located at Billingham site in
connection with the Materials Business who are to relocate to Grimsby.]


<PAGE>


                                   SCHEDULE 14


ESTIMATED CONSIDERATION, FINAL CONSIDERATION AND FINAL
COMPLETION STATEMENT


1.    INTERPRETATION

1.1   In this Schedule:-

      "A FORM"                means in relation to Newco, a financial
                              report prepared in the format set forth in
                              Annex 2 and in accordance with the
                              accounting policies, practices and other
                              requirements set out or referred to in ICI's
                              Controller's Manual and prepared as at the
                              Newco Completion Date on a basis consistent
                              with that adopted by TEL for the preparation
                              of A Forms prior to the Transfer Time;

      "ACTUAL NET WORKING     means the Net Working Capital as at the Newco
      CAPITAL"                Completion Date as determined under
                              paragraphs 1.6 to 1.8 below;

      "ICI'S AUDITORS"        means KPMG Audit Plc of 8 Salisbury Square,
                              London, EC4Y 8BB;

      "ICI'S CONTROLLER'S     means the control manuals in effect as at 14
       MANUALS"               July 1997 and which are compiled in accordance
                              with UK GAAP used for accounting purposes
                              within the ICI Group and which are recorded
                              on disk form as attached and identified as
                              Annex 3 to this Agreement (and which
                              consists of an introduction to the Group
                              Controller's Manual, Bulletin Board,
                              Accounting Language, Bulletin Board
                              Reporting, Accounting Definitions and
                              Conventions, Accounting Policies and
                              Procedures, Controls, Reporting);

      "INTEREST RATE"         means LIBOR plus 25 basis points;

      "NET WORKING CAPITAL"   means:-

                              (a) Operating Debtors;  plus
                              (b) Stocks;  less
                              (c) Operating Creditors less than 1 year;

<PAGE>

                              For the purposes of (b) the Stocks shall be valued
                              in   accordance    with   the   document    headed
                              "Stocktaking  and  Valuation  Principles"  in  the
                              Agreed Terms marked "NWC-S"

      "NEWCO'S AUDITORS"      means [                                   ];

      "NEWCO COMPLETION DATE" means immediately after completion of this
                              Agreement;

      "OPERATING CREDITORS    means, in relation to Newco, the absolute
      LESS THAN 1 YEAR"       value of the  amount reported as
                              creditors of Newco which  are   external   to
                              Newco  as  defined  by reference  to
                              "operating  creditors  less  than 1
                              year" on line  70020  of the A Form  for  Newco as
                              described in ICI's Controller's
                              Manuals;

      "OPERATING DEBTORS"     means,  in relation to Newco,  debtors of
                              Newco  which are  external  to Newco as defined by
                              reference to "operating  debtors" on line 70010 on
                              the  A  Form  for  Newco  as  described  in  ICI's
                              Controller's Manuals;

      "STOCKS"                means the stock of fuels, raw materials, raw
                              materials, ingredients, packaging, office
                              and laboratory supplies, revenue engineering
                              spares, consumable stores, work in progress
                              and finished goods owned by Newco as
                              determined on line 70000 of the A Form for
                              Newco;

      "UK GAAP"               means generally accepted accounting
                              principles in the United Kingdom.

1.2   References  to the  absolute  value of a number  X shall be  construed  as
      follows:

      1.2.1 if X is greater than or equal to zero, the absolute value of X shall
            be equal to X; and

      1.2.2 if X is  less  than  zero,  the  absolute  value  of  X  shall  be X
            multiplied by -1

      so that,  for the purposes of  illustration,  the  absolute  value of 1 is
      equal to 1 and the absolute value of -1 is equal to 1.

1.3   The  definitions  used in this Schedule  relate only to this Schedule and,
      unless  expressly  stated to the  contrary,  shall  have no bearing on the
      interpretation of any other agreement entered into by TEL, Newco and their
      respective Affiliates.

<PAGE>

1.4   All  payments and values  under this  Schedule  shall be in US Dollars and
      where  an  amount  is not  itself  calculated  in US  Dollars  it shall be
      converted  into US  Dollars  at the mid market  closing  exchange  rate in
      London for the currency in which that amount is expressed  into US Dollars
      as published in the London Edition of the Financial  Times first published
      thereafter,  or where the  exchange  rate is not  published  in the London
      Edition of The  Financial  Times,  at the exchange rate quoted by Citibank
      N.A. as at the close of business in London for the  currency in which that
      amount is expressed on the Newco Completion Date in relation to amounts in
      the Final Completion Statement.

1.5   CALCULATION OF THE FINAL CONSIDERATION

      In relation to this Agreement:

      1.5.1 the  Final   Consideration  for  the  Business  Assets  ("THE  FINAL
            CONSIDERATION") shall be determined by the following formula:-

            Final  Consideration = US$  118,410,000  minus [U.S. $ EQUIVALENT OF
            GBP3,950,000 (REPRESENTING THE NET WORKING CAPITAL AS AT 28 FEBRUARY
            1998) CONVERTED INTO U.S. $ IN ACCORDANCE WITH PARAGRAPH 1.4 OF THIS
            SCHEDULE] plus Actual Net Working Capital.

      1.5.2 After  the Newco  Completion  Date TEL  shall  prepare a  completion
            statement  as at the Newco  Completion  Date which  shall  contain a
            statement of the Final  Consideration  in accordance  with paragraph
            1.5.1 above and a schedule of the Actual Net Working  Capital  based
            on TEL's calculations (the "FINAL COMPLETION STATEMENT").  The Final
            Completion Statement shall be prepared using ICI's normal accounting
            policies  and   practices  as  set  out  or  referred  to  in  ICI's
            Controller's Manuals and prepared as at the Newco Completion Date on
            a basis consistent with that adopted by TEL for the preparation of A
            Forms prior to the  Hivedown  and shall be submitted by TEL to ICI's
            Auditors for review.

1.6   Within 50 days of the Newco  Completion  Date,  TEL shall  issue the Final
      Completion  Statement to Newco  together  with a copy of a report by ICI's
      Auditors addressed to TEL and substantially in the form set out in Annex 4
      to the effect that the Final  Completion  Statement  has been  prepared in
      accordance  with this  Schedule.  Although it is TEL's  responsibility  to
      prepare the Final Completion Statement, TEL will require the assistance of
      the employees of Newco and its  Affiliates  to fulfil this  responsibility
      and Newco shall  ensure such  assistance  is provided  promptly  and at no
      charge.  Immediately  after  delivery of the Final  Completion  Statement,
      Newco's  Auditors  shall  have the  right to review  the Final  Completion
      Statement  and  ICI's  Auditors  working  papers  relating  to  the  Final
      Completion  Statement.  Within 30 days of  delivery  to Newco of the Final
      Completion  Statement and ICI's Auditors report (each of which shall be in
      English) to Newco's designated location, Newco shall give notice to TEL in
      writing of any item or items in the Final  Completion  Statement  which it
      wishes to dispute  and the basis on which it  disputes  that item or those
      items  and the  changes  to the Final  Completion  Statement  which  Newco
      believes  should  be made  and the  parties  shall  use  their  reasonable
      endeavours  to resolve that  dispute.  Any items in respect of which Newco
      does not give such notice  will be deemed to have been  accepted by Newco.
      Any written  resolution  reached by the parties on any disputed item shall
      be final, conclusive and binding on the parties.

<PAGE>

1.7   If the parties  agree the Final  Completion  Statement  then any adjusting
      payments  referred to in  paragraph  1.9 below shall be made by the paying
      party within 7 days of being agreed by the parties.

1.8   If the  parties  fail to  agree on any  element  of the  Final  Completion
      Statement within 24 days after Newco has given notice in writing to TEL of
      any  item(s)  in the Final  Completion  Statement  which  Newco  wishes to
      dispute (in  accordance  with paragraph 1.6 above) then any agreed amounts
      shall be paid in accordance  with the preceding  paragraph and any dispute
      may be referred by either party for final determination in accordance with
      Clause 14 of this Agreement and any amounts  thereby found to be due shall
      be paid by the  relevant  party not later  than 7 days  after  such  final
      determination.

1.9   When  the  Final  Consideration  is  agreed  or  otherwise  determined  in
      accordance  with the three  preceding  paragraphs the following  adjusting
      payments shall be made:-

      1.9.1 an  amount  equal  to  the  difference  between  (i)  the  Estimated
            Consideration   (namely   US$   118,410,000)   and  (ii)  the  Final
            Consideration; and

      1.9.2 interest  (compounded monthly) at the Interest Rate on the amount in
            paragraph 1.9.1 above from the Newco  Completion Date to the date of
            payment, calculated on a day to day basis;

      which  shall  be  paid  by TEL to  Newco  (or  vice  versa,  if the  Final
      Consideration exceeds the Estimated Consideration).

1.10  In this  Schedule,  references to lines of A-Forms have been chosen by TEL
      and are believed in good faith to  correspond to the matters to which they
      refer.  If,  however,  that  reference  when  compared  to the  matter  it
      describes or refers to is incorrect  then there shall be  substituted  for
      that line reference  another line reference (if any) which  corresponds to
      the matter described or referred to.


<PAGE>


SIGNED by [                  ]
for and on behalf of
TIOXIDE EUROPE LIMITED in the presence of:







SIGNED by [                  ]
for and on behalf of
NEWCO LIMITED
in the presence of: