EXHIBIT 10.7


                   DATED                                 1998





                              TIOXIDE GROUP LIMITED

                                       and

                                 ICI OMICRON BV

                                       and

                               NL INDUSTRIES, INC.





                        SHARE SALE AND PURCHASE AGREEMENT



                                       OF



                               TIOXIDE CANADA INC.
















                               LINKLATERS & PAINES
                                 One Silk Street
                                 London EC2Y 8HQ

                             TEL: (+44) 171 456 2000

                                  Ref: AXT/TDAP


<PAGE>


        THIS AGREEMENT (this "AGREEMENT") is made on              1998  BETWEEN:


        (1) TIOXIDE  GROUP  LIMITED   (registered   number  249759),  a  company
            incorporated  under the laws of England,  whose registered office is
            at 137/143 Hammersmith Road, London W14 0QL, England ("TG");


        (2) ICI OMICRON BV  (registered  number  171649) a company  incorporated
            under  the laws of The  Netherlands  whose  registered  office is at
            Merseyweg 10, 3197 KB Rotterdam-Botlek,  Haven 5210, the Netherlands
            and  whose   statutory   domicile  is  Rotterdam,   the  Netherlands
            ("Omicron" and collectively with TG, the "SELLER"); and


        (3) NL INDUSTRIES,  INC., a corporation  incorporated  under the laws of
            the State of New  Jersey,  whose  principal  place of business is at
            16825 Northchase Drive, Suite 1200,  Houston 77060,  Texas, USA (the
            "PURCHASER").

        WHEREAS:

        (A) Tioxide  Canada Inc. is a company  incorporated  in Quebec,  Canada,
            short   particulars  of  which  are  set  out  in  Schedule  1  (the
            "Company").

        (B) The  Seller  holds all of the  issued  shares in the  capital of the
            Company (the "SALE  SHARES")  particulars  of which are contained in
            Schedule 1.

        (C) The  Seller  has  agreed  to sell and the  Purchaser  has  agreed to
            purchase the Sale Shares on the terms and subject to the  conditions
            set out in this agreement and the Framework Agreement.

        IT IS AGREED as follows:


      1 INTERPRETATION

    1.1 In this agreement:

        "ACCOUNTING  DATE" means the date of the audited accounts of the Company
        for the year ended 31 December 1997 (the "ACCOUNTS");

        "ADVERSE CONSEQUENCES" means all actions, suits, proceedings,  hearings,
        investigations,   charges,  claims,  demands,  injunctions,   judgments,
        orders,  decrees,  rulings,  damages,  dues,  penalties,  fines,  costs,
        amounts paid in settlement, liabilities,  obligations, liens (other than
        those  arising by operation of law or by statute)  losses,  expenses and
        fees, including court costs and reasonable attorneys' fees and expenses;

        "ACCOUNTING STANDARDS" means generally accepted accounting principles as
        in effect from time to time in Canada and applied as a basis  consistent
        with those of previous years;

        "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,  in
        relation  to ICI and its  subsidiary  companies,  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



<PAGE>


        reference  in  this  agreement  to an  Affiliate  of the  Seller  or the
        Purchaser  shall  exclude the Company,  and  references  to the Seller's
        Group or the Purchaser's Group shall be construed accordingly;

        "AGREED  FORM"  means,  in  relation to any  document,  the form of that
        document which has been initialled for the purpose of  identification by
        or on behalf of the parties to this agreement;

        "AMERICAS  LIABILITY  AGREEMENT" means the liability  agreement  between
        ICI and the Purchaser dated [           ];

        "ASSETS"  means all of the assets and rights of the Company  relating to
        the Business;

        "BUSINESS" means:

        (a) the  import,  export,  sale and  distribution  of  titanium  dioxide
            pigments and co-products and related products; and

        (b) the  manufacture  of finished  products  from the processes by which
            reactor  discharge from the chloride process and calciner  discharge
            from the sulphate  process are treated to produce  titanium  dioxide
            pigments

        and all other business and operations as carried on by the Company as at
        the date hereof but for the avoidance of doubt shall not include:

               (i) the  manufacture,  sale or  disposal  by way of  trade of any
                   organometallic  compounds  save  the  manufacture,   sale  or
                   disposal  of a pigment  which  incorporates  as an  essential
                   feature of its composition an  organometallic  compound shall
                   not be considered to be the manufacture,  sale or disposal of
                   an organometallic compound as such; and

               (ii)the  manufacture,  sale or  disposal  by way of  trade of any
                   form of  titanium  dioxide of  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 2; and

               (iii) any matter relating to the LPC Business.

        "BUSINESS  DATA" means the Company's  historical  and current  documents
        relating to the Business, including customer lists, product, distributor
        and supplier lists, catalogues,  literature, employee records, documents
        of title to the Assets (but excluding those relating to the Properties),
        sales targets,  sales  statistics,  market share  statistics,  marketing
        surveys and reports,  marketing  research and any  advertising  or other
        promotional  materials,  production  data,  safety  data and  accounting
        (including  management  account records) and other financial data (other
        than the  Canadian  Financial  Information),  whether in hard copy or in
        computer held form (including, for the avoidance of doubt, such media as
        microfilm and microfiche);

        "BUSINESS  DAY" means a day (other  than a Saturday  or Sunday) on which
        banks are generally open for normal business in each of London, Montreal
        and New York;

        "CANADIAN  FINANCIAL   INFORMATION"  means  the  financial   information
        attached as Schedule 7;

        "CANADIAN  SCHEMES" means the Company's  pension plans  described in the
        Disclosure Letter;

        "CANADIAN  TECHNOLOGY  AGREEMENTS"  means the  agreements and licence in
        the Agreed Form;

        "COMPLETION"  means  completion  of the  sale and  purchase  of the Sale
        Shares  in  accordance  with  Clause  7 which  shall  occur  immediately
        following signature and exchange of this agreement;

        "COMPLETION  DATE" means  [                       ]  on the date of this
        agreement;

<PAGE>

        "COMPUTER    SYSTEMS"   means   all   computer    hardware,    software,
        microprocessors  and  firmware  which  in  each  case  are  used  in the
        Business;

        "CONTRACTS"  means  all  contracts  and  arrangements  relating  to  the
        Business  entered into before  Completion by or on behalf of the Company
        in connection with the Business which remain (in whole or in part) to be
        performed  at  Completion  and,  in  addition,  means any  contracts  or
        arrangements  between  the  Company  and  the  Seller  (or  any  of  its
        Affiliates);

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

        "DISCLOSURE   LETTER"  means  the  letter  of  the  same  date  as  this
        agreement from the Seller to the Purchaser;

        "DUPONT" means E.I. du Pont de Nemours and Company;

        "EMPLOYEES"  means all those  individuals  employed  by the  Company  at
        Completion;

        "ENVIRONMENT" has the meaning in Schedule 5;

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

        "ENVIRONMENTAL LAWS" has the meaning given in Schedule 5;

        "ESTIMATED CONSIDERATION" has the meaning given in Clause 3;

        "FIELD OF ACTIVITY" means:

        (a) the  import,  export,  sale and  distribution  of  titanium  dioxide
            pigments and co-products and related products; and

        (b) the  manufacture  of finished  products  from the processes by which
            reactor  discharge from the chloride process and calciner  discharge
            from the sulphate  process are treated to produce  titanium  dioxide
            pigments

        and all other business and operations as carried on by the Company as at
        the date hereof but for the avoidance of doubt shall not include:

               (i) the  manufacture,  sale or  disposal  by way of  trade of any
                   organometallic  compounds  save  the  manufacture,   sale  or
                   disposal  of a pigment  which  incorporates  as an  essential
                   feature of its composition an  organometallic  compound shall
                   not be considered to be the manufacture,  sale or disposal of
                   an organometallic compound as such; and

               (ii)the  manufacture,  sale or  disposal  by way of  trade of any
                   form of  titanium  dioxide of  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 2.

        "FINAL CONSIDERATION" has the meaning given in Schedule 6;

        "FRAMEWORK  AGREEMENT"  means the agreement  dated o between ICI, DuPont
        and the Purchaser;



<PAGE>


        "GUARANTEES" means all guarantees and indemnities given by the Seller or
        Affiliates  of the Seller in respect of  obligations  of the  Company in
        relation to the Business,  short  particulars  of which are contained in
        the Disclosure Letter;

        "HAZARDOUS MATERIAL" has the meaning given in Schedule 5;

        "ICI" means Imperial Chemical Industries PLC;

        "ICI GROUP" means ICI and its Affiliates as at the Completion Date;

        "IMPLEMENTATION AGREEMENTS" means the documents in Schedule 4;

        "INDEPENDENT ACCOUNTANT" has the meaning given in Clause 11;

        "INTELLECTUAL  PROPERTY"  shall mean all  patents,  trademarks,  service
        marks,  trade  names and all  goodwill  associated  with the  foregoing,
        registered designs, copyrights,  copyrightable works (including, without
        limitation,  data,  documentation  and  databases)  registered  internet
        domain names,  and rights to inventions and  applications for and rights
        to apply for protection or registrations  of any of the same;  including
        any continuation, continuation-in-part, provisional, reissue, divisional
        and  re-examination  patent  applications  and all  rights in  Technical
        Information;

        "INTRA-GROUP  LOANS"  means  all Net Debt due  from the  Company  to the
        Seller or any  Affiliate  of the Seller or due to the  Company  from the
        Seller or any Affiliate of the Seller as  determined in accordance  with
        Schedule 6, and in both circumstances  relating only to those Affiliates
        of the Seller following Completion;

        "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 a.m.,  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  as if the  parties  had  specified  that  the  rate  for the
        Relevant  Date  will be  determined  on the  basis of the rates at which
        deposits in US Dollars are offered by Midland Bank plc at  approximately
        11.00 a.m.,  London  time,  on the  Relevant  Date to prime banks in the
        London  interbank  market for a period of one month  commencing  on that
        Relevant Date for amounts of US$10,000,000;

        "LPC" means the Louisiana Pigment Company Limited Partnership;

        "LPC BUSINESS"  means any sales sourced from LPC, any Stocks,  Operating
        Debtors, Operating Creditors less than one year (the definitions of such
        terms  in  Schedule  6  being  applied  to  LPC)  and  other  assets  or
        liabilities  relating to LPC as determined  and  distinguished  from the
        Business in accordance with Schedule 9;

        "MATERIAL CONTRACTS" means all Contracts (i) which at Completion have in
        excess of 12 months  to run and  which in that  time can  reasonably  be
        expected to involve  income or expenditure in respect of the Business in
        excess of US$200,000  per annum;  or (ii) which at Completion  have less
        than 12 months to run and which in that time can  reasonably be expected
        to involve income or expenditure in respect of the Business in excess of
        US$500,000;  or (iii) which relate to the treatment  and/or  disposal of
        waste; or (iv) which relate to contract  manufacturing  or processing of
        products  by  third  parties;   or  (v)  which  relate  to  third  party
        distribution  or agency in respect of  products;  or (vi) the absence of
        which  would  have a  material  negative  impact on the  conduct  of the
        Business;

        "NET DEBT" has the meaning in Schedule 6;

        "ORDINARY  COURSE OF  BUSINESS"  means the  ordinary  course of business
        consistent with past custom and practice including,  without limitation,
        quantity  and   frequency,   taking  into  account  the   relevance  and
        reasonableness  of the same and with  allowance  made for the inherently
        cyclical nature of the titanium dioxide industry;

<PAGE>


        "PARENT  UNDERTAKING"  shall have the meaning  given in  section 258  of
        the United Kingdom Companies Act 1985;

        "PERMITS" means all licences, permits, authorisations, registrations and
        approvals  required  by  law or  regulation  or  issued  or  granted  by
        statutory or other  authorities  to the Company for the operation of the
        Business  (but   excluding,   for  the  avoidance  of  doubt,   planning
        permissions   issued  by  relevant   planning   authorities   (save  for
        Environmental  Authorisations) and any licence, permit, authorisation or
        approval which falls within the definition of Regulatory Conditions);

        "PLANT AND EQUIPMENT" means the plant,  machinery,  spare parts,  tools,
        equipment,  chattels, motor vehicles,  furniture,  fixtures and fittings
        (to the extent they are not  included in the  Properties)  and all other
        tangible  personal property located at the Property  (including  without
        limitation  office equipment) which in each case is owned and/or used by
        the Company in relation to the Business as at Completion;

        "PROPERTY" means those properties shown in Schedule 2 Part I;

        "PURCHASER'S AUDITORS" means PriceWaterhouseCoopers;

        "PURCHASER'S  GROUP" means the Purchaser's  ultimate parent  undertaking
        and that parent undertaking's Affiliates;

        "REGULATORY  CONDITIONS"  means the  anti-trust or regulatory  approvals
        (other than Environmental Authorisations) necessary to complete the sale
        of the Company on the terms set out in this agreement;

        "SELLER'S AUDITORS" means KPMG;

        "SELLER'S GROUP" means TG and Omicron's ultimate parent undertakings and
        those parent undertakings' Affiliates as at the Completion Date;

        "STOCK"  means  the  stocks  of  fuels,   raw  materials,   ingredients,
        packaging,   office  and  laboratory   supplies,   engineering   spares,
        consumable  stores,  work-in-progress  and finished  goods at Completion
        held by the Company for the purposes of the Business;

        "TAX" has the meaning given in the Tax Deed of Covenant;

        "TAXATION" has the meaning given in the Tax Deed of Covenant;

        "TAX AUTHORITY" has the meaning given in the Tax Deed of Covenant;

        "TAX DEED OF  COVENANT"  means the tax deed of  covenant  in the  Agreed
        Form;

        "TAX LIABILITY" has the meaning given in the Tax Deed of Covenant;

        "TECHNICAL  INFORMATION"  shall mean 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, in such media as microfilm and microfiche);

        "TERRITORIES"  means the  United  States  of  America,  Canada,  Mexico,
        Central and South America;

        "TRACY  SITE"  means  1690 and  1694  Marie-Victorin  Boulevard,  Tracy,
        Quebec, J3R IM7, Canada;

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

<PAGE>


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

        "WARRANTIES" has the meaning given in Clause 5.1; and

        "WARRANTY CLAIM" has the meaning given in sub-Clause 5.4.

    1.2 Unless otherwise stated,  any express reference to an enactment includes
        references to:

        (a)    that  enactment  as amended,  extended or applied by or under any
               other enactment before or after this agreement;

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

        (c)    any subordinate legislation made (before or after this agreement)
               under any enactment, including one within (a) or (b) above,

        except to the extent that any of the  matters  referred to in (a) to (c)
        occurring  after the date of this agreement  would increase or alter the
        liability of any party under this agreement.

    1.3 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  permitted
        successors or assigns of such persons.

    1.4 Sub-Clauses 1.1 to 1.3 apply unless the contrary intention appears.

    1.5 The headings in this agreement do not affect its interpretation.

    1.6 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.

    1.7 Where any statement in this  agreement (or in the attached  Schedules or
        Annexes)  (other  than in  Schedule  3  paragraphs  H(2)  and  H(4))  is
        qualified  by the  expression  "SO FAR AS THE SELLER IS AWARE,"  "TO THE
        SELLER'S  KNOWLEDGE,  INFORMATION  AND BELIEF," "KNOWN TO THE SELLER" or
        any  similar  statement,  that  statement  shall be  deemed  to mean the
        knowledge,   after  reasonable   investigation,   of  the  officers  and
        operational  and functional  managers of ICI and its Affiliates who have
        direct  responsibility  for the subject  matter  concerned,  being those
        listed in Schedule 9.


      2 SALE AND PURCHASE OF THE SALE SHARES

    2.1 The Seller shall with full title  guarantee sell and the Purchaser shall
        purchase the Sale Shares together with all rights attaching to them.

    2.2 The Sale Shares shall be sold free from all liens, charges, equities and
        encumbrances and other rights exercisable by third parties or Affiliates
        of the Seller.


      3 CONSIDERATION AND ADJUSTMENTS

    3.1 Subject to sub-Clause 3.3 below, the  consideration  for the sale of the
        Sale  Shares  shall  be  US$[o]  payable  in  cash by the  Purchaser  on
        Completion (the "ESTIMATED CONSIDERATION").

    3.2 The payment under sub-Clause 3.1 shall be paid to the correspondent bank
        named below for credit to the US Dollar account of o (the "ICI ACCOUNT")
        referred to below:

         Correspondent bank:
         Bank account:
         Account name:
         Account no:
         Sort code:

<PAGE>


    3.3 Any payments to the Purchaser  under this agreement shall be paid to the
        correspondent  bank named below for credit to the US Dollar account of o
        (the "PURCHASER ACCOUNT") referred to below:

         Correspondent bank:
         Bank account:
         Account name:
         Account no:
         Sort code:

    3.4 The Final  Consideration  shall be determined and any difference between
        the Estimated Consideration and the Final Consideration shall be paid in
        accordance with the provisions of Schedule 6.


      4 PURCHASER'S WARRANTIES

        The Purchaser represents and warrants to the Seller that:

        (a)    it (and each of its Affiliates,  in respect of the Implementation
               Agreements to which such  Affiliate is a party) has the requisite
               power and  authority to enter into and to perform this  agreement
               and such Implementation Agreements;

        (b)    it (and each of its Affiliates,  in respect of the Implementation
               Agreements  to which such  Affiliate  is a party) has obtained or
               satisfied all corporate,  regulatory and other approvals,  or any
               other  significant  conditions,  necessary to execute and perform
               this agreement and such Implementation Agreements;

        (c)    this agreement and the Implementation Agreements constitute valid
               and  binding  obligations  of  the  Purchaser  (and  each  of its
               Affiliates,  in respect of the Implementation Agreements to which
               such Affiliate is a party)  enforceable in accordance  with their
               respective terms; and

        (d)    compliance  with the terms of this agreement by the Purchaser and
               the Implementation  Agreements by the Purchaser or its Affiliates
               (as appropriate) will:

               (i) not constitute a breach of any agreement or contract to which
                   the  Purchaser or such  Affiliate of the Purchaser is a party
                   or by which it is bound; and

               (ii)be in compliance  with the  Purchaser's  or such Affiliate of
                   the  Purchaser's  memorandum  and articles of  association or
                   other constitutional documents; and

               (iii) not contravene:

                   (a)any order, judgment or decree; or

                   (b)any statute, rule or regulation; or

                   (c)any other  restriction  of any kind by which the Purchaser
                      or such Affiliate of the Purchaser is bound.



<PAGE>


      5 SELLER'S WARRANTIES

    5.1 The Seller represents and warrants to the Purchaser in the terms set out
        in Part A.1 of Schedule 3.1 and that,  save as otherwise  stated in this
        agreement and subject to all matters and circumstances  fairly disclosed
        in the Disclosure  Letter,  each of the statements set out in Schedule 3
        Part A.2 to N (inclusive) to this agreement (the  "Warranties")  is true
        and  accurate  as  at  the  date  of  this   agreement  and  the  Seller
        acknowledges  that the  Purchaser  has entered  into this  agreement  in
        reliance upon the Warranties.

        The Purchaser  agrees that no warranty,  representation,  undertaking or
        indemnity,  or any other contractual  obligation or otherwise is made or
        given by the  Seller  to  either  the  Purchaser  or its  Affiliates  in
        relation to LPC.

    5.2 Each of the Warranties shall be separate and independent and no Warranty
        shall limit the scope or construction of any other Warranty or any other
        provision of this agreement.

    5.3 The Purchaser acknowledges and agrees that:

               (i) save  as  may  be  set  out  in  this  agreement  or  in  the
                   Implementation  Agreements,  except for the Warranties and in
                   relation to an allegation of fraud, no statement,  promise or
                   forecast  made by or on behalf of the Seller or any member of
                   the  Seller's  Group may form the basis of, or be  pleaded in
                   connection  with,  any  claim  by the  Purchaser  under or in
                   connection   with  this   agreement  or  the   Implementation
                   Agreements; and

               (ii)any claim by the Purchaser or any person  deriving title from
                   it in connection with the Warranties  shall be subject to the
                   following provisions of this Clause.

    5.4 The  liability of the Seller in respect of any breach of the  Warranties
        (a "WARRANTY  CLAIM") or the  indemnities  contained  in this  agreement
        shall be  governed  by the  terms of the  Americas  Liability  Agreement
        except as expressly provided therein.

    5.5 The  liability  of the Seller  under or in  respect of a Warranty  Claim
        shall also be limited in respect of any liability  which is  contingent,
        unless and until such liability  becomes an actual  liability and is due
        and payable  provided  that the Purchaser  shall not be prohibited  from
        bringing  a Warranty  Claim  pending  such  liability  becoming  due and
        payable.

    5.6 The Purchaser acknowledges and agrees that:

               (i) no  liability  shall  attach  to the  Seller by reason of any
                   breach of any of the Warranties or any indemnities  contained
                   in this  agreement to the extent that the loss  including all
                   relevant  costs  and  expenses  has  been  recovered  by  the
                   Purchaser  under  Schedule  5  or  any  other  term  of  this
                   agreement  or any  other  document  referred  to  herein  and
                   accordingly the Purchaser may only recover once in respect of
                   the same loss; and

               (ii)in calculating  the liability of the Seller for any breach of
                   the  Warranties  there shall be taken into account the amount
                   by which any  Taxation  for which the  Purchaser is now or in
                   the future accountable or liable to be assessed is reduced or
                   extinguished  as a result of the matter  giving  rise to such
                   liability.

    5.7 The Purchaser shall not be entitled to make any Warranty Claim:

               (i) to the extent  that the claim  arises as a result only of any
                   change after  Completion in the  accounting  bases upon which
                   the  Company  values its assets or  computes  its  profits or
                   arises as a result of the  taxation or  accounting  policies,
                   bases or



<PAGE>


                   practices of the Purchaser  being  different to those adopted
                   or used in preparing the Accounts; or

               (ii)to the extent  that the matter  which  constitutes  the claim
                   was specifically  consented to in writing by the Purchaser in
                   the  knowledge  that  such  matter  would  give  rise to such
                   Warranty Claim.

    5.8 The  Purchaser  shall not be  entitled  to  rescind  or  terminate  this
        agreement after Completion in any circumstances provided that nothing in
        this sub-Clause shall exclude or limit any right to rescind or terminate
        for fraud.

    5.9 Save as otherwise  provided in this  agreement,  the Seller shall not be
        liable in respect of any Warranty Claim to the extent that the liability
        of the Seller in respect thereof is incurred or increased as a result of
        any  legislation not brought into force at the date of this agreement or
        as a result of any change in or repeal of legislation  hereafter or as a
        result of the  introduction  or cessation of or change in the  published
        practice of any taxation authority after the date of this agreement.

   5.10 The Purchaser  shall not be entitled to make any claim in respect of any
        breach or alleged breach of the Warranties to the extent that:

               (i) the facts,  matters or circumstances  giving rise thereto (in
                   respect of which any such claim or alleged claim arises) have
                   been fairly disclosed in the Disclosure Letter; or

               (ii)such  claim  arises  or  is  incurred  as  a  result  of  any
                   voluntary  act or omission of the  Purchaser or any Affiliate
                   of the Purchaser  after the date of this agreement other than
                   any such act or omission  which is in the ordinary  course of
                   business  or is  required  by law or is pursuant to a legally
                   binding  commitment  of  the  Company  or any  member  of the
                   Seller's Group created or entered into before Completion.

   5.11 The  provisions of this Clause 5 shall have effect  notwithstanding  any
        other provisions of this agreement.


      6 SELLER'S INDEMNITY

    6.1 The Seller  undertakes to indemnify and keep  indemnified the Purchaser,
        its Affiliates and the Company (the  "INDEMNIFIED  PARTIES") against all
        claims  by  third  parties  (other  than  any  subsequent  purchaser  or
        purchasers  of either the Sale  Shares or the  business or assets of the
        Company and their successors in title or assigns) giving rise to Adverse
        Consequences  which  may be paid,  suffered  or  incurred  by any of the
        Indemnified  Parties  or to which  any of the  Indemnified  Parties  may
        become  subject,  and which  arise as a result of the  operation  of the
        Business by the Company  prior to  Completion  (unless and to the extent
        that the  circumstances  giving  rise to the Adverse  Consequences  were
        fairly  disclosed  in  the  Disclosure  Letter)  and  including  without
        limitation those Adverse Consequences arising:

        (a)    as a result of the failure by the Company to comply with relevant
               and  legally   enforceable   corporate  or  other  laws,   rules,
               ordinances or  regulations  with respect to the operations of the
               Business prior to Completion;

        (b)    as a result of the  failure  by the  Company  to obtain  required
               relevant  governmental  permits,  licences,   consents  or  other
               authorisations  with  respect to the  operation  of the  Business
               prior to Completion;



<PAGE>


        (c)    from or with respect to any breach of  contract,  tort or product
               liability  or  otherwise  arising  from,  or with respect to, the
               operation of the Business prior to Completion and asserted by any
               third party; and

        (d)    from or with respect to any suit,  action,  arbitration,  charge,
               governmental  investigation,  claim,  litigation  or  proceedings
               affecting the Business or the Company.

               Provided that the indemnity  contained in this Clause 6 shall not
               apply to:

               (i) liabilities  expressly  assumed by the Purchaser  pursuant to
                   this agreement or the Implementation Agreements; or

               (ii)to the  extent  that such  liabilities  have been  taken into
                   account in establishing the Final Consideration; or

               (iii) any Environmental  Liabilities,  any failure or omission to
                   obtain  or  comply  with  Environmental  Authorisations,  any
                   failure or omission to comply with any Environmental  Laws or
                   any claim by any person in  respect of any matter  concerning
                   the   Environment   (indemnity   for  which  is  provided  in
                   sub-Clause 9.2 and Schedule 5); or

               (iv) Taxation  (indemnity  for which is  provided  in the Tax
                   Deed of Covenant); or

               (v) LPC.

    6.2 The  Purchaser  agrees to give the  Seller  notice of any and all claims
        asserted  against the  Purchaser  for which  indemnification  under this
        Clause  6 is or may be  sought.  Such  notice  shall be given as soon as
        reasonably  practicable after the Purchaser becomes aware that it has or
        may have a claim  against  the Seller.  Under this Clause 6,  failure to
        give such notice shall not abrogate or diminish the Seller's  obligation
        under  this  Clause  if the  Seller  has or  receives  knowledge  of the
        existence  of any such claim by any other means or if such  failure does
        not prejudice the Seller's ability to defend such a claim.


      7 COMPLETION

    7.1 Completion shall take place at the offices of the [        ] immediately
        after the signature of this agreement when:

        (a)    each  party  shall  provide  to  the  others  evidence  in a form
               reasonably  satisfactory  to the others  that it (and each of its
               relevant  Affiliates  entering into an Implementation  Agreement)
               has  all  necessary  corporate  approvals  and  consents  and its
               signatories have necessary authority to enter into this agreement
               and the other agreements referred to herein;

        (b)    each party shall (or shall  procure that its relevant  Affiliates
               will) duly  execute and, to the extent  applicable,  complete the
               Implementation Agreements and the Tax Deed of Covenant;

        (c)    the Seller  shall  deliver to the  possession  and control of the
               Purchaser:

               (i) a duly  executed  transfer  or  transfers  in  favour  of the
                   Purchaser  (or  such   Affiliate  of  the  Purchaser  as  the
                   Purchaser may nominate) of all the Sale Shares;

               (ii)share  certificate(s) or other documents of title relating to
                   the Sale Shares (or an express indemnity in a form reasonably
                   satisfactory  to the  Purchaser  in the  case of any  missing
                   certificates or documents of title);



<PAGE>


               (iii) the  company  books  relating  to  the  Company,  including
                   certificates of  incorporation,  common seals,  minute books,
                   statutory  registers,   shareholders'  agreements  and  share
                   certificate books (duly written up to date);

               (iv) resignations  of all the  directors and secretary of the
                   Company;

               (v) the  written  resignation  of the  auditors of the Company to
                   take effect on  Completion,  with  acknowledgments  signed by
                   them to the  effect  that  they  have no  claim  against  the
                   Company  and to the effect  that  there are no  circumstances
                   connected with their  resignation  which they consider should
                   be brought to the notice of the  shareholders or creditors of
                   the Company;

               (vi)bank  statements  in  respect  of  every  account  which  the
                   Company has, dated two days prior to the Completion  Date and
                   the  relevant  reconciliation   statements  prepared  on  the
                   previous Business Day;

               (vii)the Business Data;

               (viii)the  documentation  and   title  deeds to the  Property  in
                   accordance with the provisions of Part II of Schedule 2;

               (ix)the  Implementation  Agreements  duly  executed by the Seller
                   and/or Affiliates of the Seller as applicable; and

               (x) the Disclosure Letter;

        (d)    the   Purchaser   shall   pay  to  the   Seller   the   Estimated
               Consideration;

        (e)    the Purchaser or another  member of the  Purchaser's  Group shall
               procure  that all  Intra-group  Loans due from the Company to the
               Seller or any  Affiliate  of the Seller are repaid by the Company
               and the  Seller or another  member of the  Seller's  Group  shall
               procure  that all  Intra-group  Loans due to the Company from the
               Seller or any Affiliate of the Seller are repaid by the Seller or
               its relevant Affiliates;

        (f)    the Seller shall take or shall  procure the taking of, such steps
               as may be necessary to:

               (i) approve  the  transfers   referred  to  in  Clause  7.1(c)(i)
                   (subject only to the Purchaser arranging and paying any taxes
                   or duties arising in relation to the transfer); and

               (ii)appoint such  directors  and  secretary as the  Purchaser may
                   specify as directors and the secretary of the Company; and

               (iii) release the securities,  guarantees, claims and indemnities
                   existing  immediately  prior to  Completion  other than those
                   arising in the Ordinary Course of Business, owed or due to or
                   claimed by the Seller or any  Affiliate  (being an  Affiliate
                   after  Completion)  from  the  Company,   true  and  complete
                   particulars of which are set out in Schedule 10;

        (g)    each party and the Purchaser shall deliver a copy of the Tax Deed
               of Covenant duly executed to the other parties.


      8 EMPLOYEES

    8.1 The  Purchaser  agrees to procure  that the Company for a period of four
        years from the Completion Date, will procure that:



<PAGE>


        (a)    the Employees will receive and enjoy contractual remuneration and
               benefits  (including  separation and other benefits  described in
               the Disclosure  Letter) which,  judged  objectively,  are no less
               favourable  overall  than  their  contractual   remuneration  and
               benefits at the Completion Date; and

        (b)    it  will  not  make  any  unilateral   material   change  to  the
               contractual terms and conditions of employment with the Employees
               without prior  consultation  and  concurrence  as required by any
               local  laws  or  agreements,   with   recognised   trade  unions,
               appropriate employee representatives, or the Employees.

    8.2 The Seller will procure that, on or before Completion,  the Company will
        discharge its  liability to Mr. Guy Gauthier in respect of  Supplemental
        Employment Terms.

    8.3 For the purposes of this clause,  "SUPPLEMENTAL  EMPLOYMENT TERMS" shall
        mean:

        8.3.1  the period of additional  notice (if any) due from the Company at
               the date such  liability  crystallises  under the  arrangement in
               force as at Completion  which is in excess of that which he would
               have received under the terms of his service  agreement  dated 25
               October 1990;

        8.3.2  the supplemental  retirement benefits that are in addition to the
               benefits to which Mr.  Gauthier  is entitled  under the TCI Staff
               Employees' Pension Plan; and

        8.3.3  any other  enhancements to his terms and conditions of employment
               granted  between 25 October 1990 and  Completion and which are in
               force as at  Completion  other than those granted in the Ordinary
               Course of Business.

    8.4 The Seller will  indemnify  the  Purchaser  (for itself and as agent and
        trustee  for the  Company)  on a  continuing  basis  against any and all
        losses or liabilities, costs (including without limitation legal costs),
        charges, expenses,  actions,  proceedings,  claims and demands which the
        Purchaser  or the Company may incur and which  relate to or arise out of
        the continuation after Completion of the Supplemental Employment Terms.

    8.5 The  Purchaser  acknowledges  and agrees that all of the funds set aside
        (or due at  Completion  to be set  aside) by the  Company  (in trust and
        including  related  refundable tax amounts with Revenue  Canada) for the
        purpose  of meeting  the  liability  of the  Seller  and the  Company to
        provide  supplemental  retirement benefits for Mr. Gauthier will be used
        for  this  purpose.  The  funds  held in trust  are held at Royal  Trust
        Company 1 Place Ville Marie Montreal in account nos.  554114673-001  and
        554 831932.  If these funds have not been used for this  purpose  before
        Completion,  the Purchaser  will procure that the Company  complies with
        any  directions  given by the Seller as to the use of these  funds after
        Completion for the purpose of providing such benefits for Mr. Gauthier.

    8.6 The Seller will  indemnify  the  Purchaser  (for itself and as agent and
        trustee  for the  Company)  on a  continuing  basis  against any and all
        losses or liabilities,  costs (including without limitation legal costs)
        charges, expenses,  actions,  proceedings,  claims and demands which the
        Purchaser  or the  Company  may  incur  as a  result  of  the  severance
        payments, pension entitlements, accelerated pension entitlements and any
        other  benefits  actually  paid  to any  employee  whose  employment  is
        terminated  after  Completion  if  and  to  the  extent  such  payments,
        entitlements  and/or  benefits  are in excess of those  which would have
        applied at any time in the period  prior to 10 September  1997  Provided
        always  that the  dismissal  which  results  in the excess  costs  being
        incurred  takes effect within four years of  Completion  and the regular
        salary figure used in the  calculations is one which has been prevailing
        in respect of the  relevant  employee  for at least six months  prior to
        termination.   This  indemnity   shall  not  extend  to  any  losses  or
        liabilities,  costs (including  without limitation legal costs) charges,
        expenses, actions,  proceedings,  claims and demands which the Purchaser
        or the  Company  may  incur as a result  of its or their  negligence  or
        default. Any claims under this indemnity must be made within 4 years and
        3 months of  Completion  following  which this  indemnity  shall have no
        effect.

<PAGE>


    8.7 The Seller shall not be required to make any payment under the indemnity
        set out in sub  clause 8.6  unless a draft  certificate  shall have been
        delivered to it by the Purchaser within 30 days after the date requiring
        the Seller to indemnify  the Purchaser  pursuant to  sub-clause  8.6 and
        certifying the amount payable thereunder.  In order to enable the Seller
        to review  the  certificate,  the  Purchaser  shall (to the extent it is
        permitted by law to do so) make  available and supply to the Seller and,
        at the Seller's request and expense,  the Seller's  auditors,  copies of
        all relevant  records and other working papers)  relating to the subject
        matter of the indemnity, during normal office hours.

    8.8 If the Seller  does not within 30 days after  presentation  to it of the
        draft  certificate  give notice to the Purchaser  that it disagrees with
        the certificate or any item thereof, such notice stating the reasons for
        the  disagreement  in reasonable  detail,  the draft  certificate  shall
        become final and binding on the parties for all purposes.

    8.9 If the Seller  gives a valid  notice  within  such 30 days,  the parties
        shall attempt in good faith to reach  agreement in respect  thereof and,
        if they are unable to do so within 21 days of such notification,  either
        party  may  by  notice  to  the  other  refer  the  certificate  to  the
        Independent  Accountants in accordance  with the provisions of clause 11
        of this agreement which shall apply mutatis mutandis,  references to the
        "COMPLAINANT"  being  deemed  to  be  references  to  the  "SELLER"  and
        references to the "OTHERS" being to the "PURCHASER".

   8.10 The Seller  shall pay interest at the rate of LIBOR plus 200 basis point
        compounded monthly on all payments pursuant to this clause from the date
        of delivery of the draft certificate.


      9 PROPERTY AND ENVIRONMENTAL

    9.1 The Seller and the Purchaser shall observe and perform the provisions of
        Schedule  2  expressed  to be  observed  and  performed  by each of them
        respectively.

    9.2 The Seller and the Purchaser  shall observe the provisions of Schedule 5
        expressed to be observed and performed by each of them respectively.


     10 PENSIONS

        The Purchaser  agrees to procure that the Company will,  commencing with
        the Completion Date,  respect and perform the provisions of the Canadian
        Schemes.

<PAGE>

     11 INDEPENDENT ACCOUNTANT

   11.1 If either party wishes to refer any matter in dispute in accordance with
        the  provisions of Clause 3 or Schedule 6 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 five
        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.

   11.2 If the Independent  Accountant  delays or becomes unwilling or incapable
        of acting or if for any other reason the President for the time being of
        the Institute of Chartered  Accountants  in England and Wales thinks fit
        he may  discharge  the  Independent  Accountant  and,  in the absence of
        agreement between the parties, appoint another in its place.

   11.3 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
        them and shall make its determination within 40 days of its appointment.

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


     12 PROTECTIVE COVENANTS

        The Seller  covenants  with the Purchaser that no member of the Seller's
        Group will:

        (a)    for a period of five years from Completion within any part of the
               Territories  carry on or be engaged or  involved  in the Field of
               Activity  (save as provided in  sub-Clause  12.4 below and as the
               owner for  investment  purposes  only of  securities  traded on a
               recognised  stock exchange and not exceeding one per cent. of the
               securities of that class); or

        (b)    without prior  approval from the  Purchaser,  for a period of two
               years  from  Completion,   directly  or  indirectly  solicit,  or
               endeavour to entice away from the Purchaser or its Affiliates any
               of the Employees.

   12.1 Each of the  restrictions  in sub-Clause 12.1 above shall be enforceable
        independently  and its  validity  shall not be  affected if the other is
        invalid.

   12.2 The Seller  acknowledges  that the  provisions  of this Clause 12 are no
        more extensive than is reasonable to protect the Company.

   12.3 Nothing in this Clause 12 or in this agreement shall prevent:

        (a)    the  Seller  or its  Affiliates  from  purchasing  shares  in any
               company or any  business  which has an  interest  in the Field of
               Activity  (the  ownership  of which  would  otherwise  contravene
               sub-Clause   12.1)   unless  the  turnover  of  such  company  or
               business in its last  accounting  year  generated by its interest
               in the Field of  Activity  was the  greater of 10 per cent of the
               aggregate  turnover  of  such  company  or  business  and  US$100
               million.  In the event that the  Seller or any of its  Affiliates
               within five years from  Completion  purchases any  corporation or
               business  which  does have  interests  in the Field of  Activity,
               the Seller or the relevant  Affiliate are  contractually  obliged
               to offer for sale such interests to DuPont.

<PAGE>


               If DuPont does not purchase  such  interests  from the Seller (or
               its relevant  Affiliate),  the Seller (or the relevant Affiliate)
               shall,  if  DuPont  shall  fail to or does not  accept  the offer
               referred to above  within such period to which it is entitled for
               such  purpose,  within 30 days of receipt,  from DuPont of notice
               that DuPont does not intend to purchase such interests  offer for
               sale such  interests to the  Purchaser on terms which are no less
               favourable by written notice ("OFFER NOTICE").

               If the Purchaser does not unconditionally purchase such interests
               from the Seller (or its relevant  Affiliates)  within a period of
               18 months after the date of the Offer Notice, then the Seller (or
               the relevant  Affiliate)  shall be free to retain such  interests
               with  the  consent  of  the  Purchaser  (such  consent  not to be
               unreasonably  withheld or delayed). If such consent is reasonably
               withheld,  then the Seller (or the relevant  Affiliate) shall use
               its best endeavours to divest such interests  within 12 months of
               such consent having been withheld; or

        (b)    the Seller or its Affiliates from carrying on or being engaged or
               involved in:

               (i) any  business  it  currently   carries  on  (other  than  the
                   Business);

               (ii)any  business  which  only  supplies  other  members  of  the
                   Seller's Group; or

               (iii) any  business  after  such  time  as the  Purchaser  or its
                   Affiliates  have ceased to carry on or be engaged or involved
                   in such business other than by way of trade sale; or


     13 ANNOUNCEMENTS

        The  parties  agree that no party shall make or permit any member of the
        Seller's Group or the Purchaser's Group, as the case may be, to make any
        announcement concerning this agreement or any ancillary matter except as
        required  by law or any  competent  regulatory  body or with  the  prior
        written  approval  of the other  party  which  will not be  unreasonably
        withheld or delayed.


     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 NOTICES

   15.1 Any notice or other document to be served under this agreement  shall be
        in writing and may be delivered by hand or by courier, sent by fax or by
        post  to the  party  to be  served  at its  address  appearing  in  this
        agreement  (and  marked for the  attention  of the person  whose name is
        referred  to in  sub-Clause  15.3  below) or at such other  address  (or
        marked for the  attention of such other  person) as it may have notified
        to the other  party in  accordance  with this  Clause  15. Any notice or
        other  document sent by post shall be sent by  registered  post (if both
        posted and for delivery within the same  jurisdiction)  or by registered
        airmail (if posted for delivery  outside the jurisdiction in which it is
        posted),  in either case return receipt  requested (or any substantially
        equivalent service).

   15.2 Any notice or document  delivered or sent in accordance  with sub-Clause
        15.1 shall be deemed to have been served:

        15.2.1 if delivered by hand or by courier, at the time of delivery; or

<PAGE>

        15.2.2 if sent by fax,  at the time of delivery  if sent  between  12.01
               a.m.  and 6.00 p.m.  (local  time at the  destination)  or on the
               Business Day after transmission, if sent at any other time;

        15.2.3 if posted,  at 10.00 a.m. on the second Business Day after it was
               put  into  the  post if  posted  for  delivery  within  the  same
               jurisdiction, or at 10.00 a.m. (local time at the destination) on
               the  fifth  Business  Day after it was put in the post if sent by
               registered airmail.

   15.3 The person to whom  notices or  documents  should be  addressed  for the
        purposes of sub-Clause 15.1 is:

        (a)    if to be served on TG or on Affiliates of TG:

               [               ]

               Fax:

               copy to the Company  Secretary  of Imperial  Chemical  Industries
               PLC of Imperial Chemical House, 9 Millbank, London, SW1P 3JF;

               Fax: (44) 171 798 5170

        (b) if to be served on Omicron or on Affiliates of Omicron:

               [             ]
               copy to the Company Secretary of Imperial Chemical Industries
               PLC of Imperial Chemical House, 9 Millbank, London SW1P 3JF;

               Fax: (44) 171 798 5170

        (c) if to be served on the Purchaser:

               General Counsel
               NL Industries, Inc.
               16825 North Chase Drive
               Suite 1200
               Houston, Texas USA TX 77060

               Fax: (1) 281 423 3333



   15.4 In proving  service of a notice or  document it shall be  sufficient  to
        prove  that  delivery  was  made by  hand,  courier  or fax or that  the
        envelope  containing  the notice or document was properly  addressed and
        posted (either by registered post or by registered  airmail, as the case
        may be, in accordance with the requirements of this Clause 15).


     16 GENERAL

   16.1 Each of the  obligations,  Warranties and  undertakings  set out in this
        agreement  which is not fully  performed at Completion  will continue in
        force after Completion.

   16.2 Unless  otherwise  expressly  stated all claims made and  payments to be
        made under this agreement  shall be made in US Dollars.  Payments to the
        Seller shall be made in  immediately  available  funds to the account of
        the Seller at such account as the Seller may notify to the Purchaser and
        to the Purchaser in immediately  available  funds to such account as the
        Purchaser  may notify to the Seller.  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  in US Dollars as
        published in the London  Edition of The  Financial  Times  published two
        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 6.



<PAGE>


   16.3 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.

   16.4 None of the rights or  obligations  under this agreement may be assigned
        or  transferred  without the written  consent of the other  parties (the
        "NON-ASSIGNING PARTIES") 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 Parties;

        (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  Parties 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   Parties  may
               reasonably require).

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

   16.6 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.

   16.7 No amendment,  variation or waiver of this agreement or any provision of
        this agreement shall be effective  unless it is in writing  specifically
        referring to this  agreement  and duly  executed by or on behalf of each
        party.

   16.8 Each party shall at their own expense at all times from the date of this
        agreement  do all  things  as may be  required  to give  effect  to this
        agreement including,  without limitation, the execution of all deeds and
        documents,  procuring the  convening of all meetings,  the giving of all
        waivers and consents and the passing of all  resolutions  and  otherwise
        exercising all powers and rights available to them.


     17 WHOLE AGREEMENT

   17.1 Subject  to  sub-Clause  17.2,  below  this  agreement,   the  Framework
        Agreement  and the  Implementation  Agreements  (if and  when  executed)
        contain the whole  agreement  between  the parties and their  respective
        Affiliates  relating to the transactions  contemplated by this agreement
        and the Implementation  Agreements and supersede all previous agreements
        between  the parties and their  respective  Affiliates  relating to such
        transactions.

<PAGE>

   17.2 A provision in another  agreement  between the parties to this agreement
        or between  the  respective  parent  undertakings  of the  parties  (and
        whether made before or after the date of this agreement) which refers to
        this  agreement and which extends or  supplements  any provision in this
        agreement  will be deemed for the purposes of  sub-Clause  17.1 above to
        form part of the whole  agreement  between the parties as referred to in
        that sub-Clause.

   17.3 Each of the parties to this agreement acknowledges on its own behalf and
        on behalf of each of its Affiliates that, in agreeing to enter into this
        agreement and the  Implementation  Agreements,  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  sub-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 for fraud.


     18 GOVERNING LAW

        This agreement is governed by and shall be construed in accordance  with
        English law.


     19 JURISDICTION

   19.1 The parties agree subject to sub-Clause  19.2 to submit to the exclusive
        jurisdiction  of the courts of the State of  Delaware  for all  purposes
        relating to this agreement.

   19.2 If the courts of the State of Delaware decline jurisdiction, the English
        courts shall have exclusive  jurisdiction  for all purposes  relating to
        this agreement.

   19.3 In both sub-Clause 19.1 and 19.2, neither party shall take any action to
        avoid,  dispute  or suggest  to such  court  that such  jurisdiction  is
        improper.

   19.4 The Seller appoints ICI American  Holdings Inc of 3411 Silverside  Road,
        Wilmington,  Delaware  19850,  USA as its  authorised  agent  upon  whom
        process may be served in any legal suit,  action or  proceeding  arising
        out of or based  upon  this  Agreement  which may be  instituted  in the
        courts of the State of Delaware.

   19.5 If the English courts have jurisdiction, the Seller irrevocably appoints
        Imperial Chemical Industries PLC of Imperial Chemical House 9, Millbank,
        London SW1P 3JF as its agent for  process in England  and the  Purchaser
        irrevocably appoints Herbert Smith (Ref 554) of Exchange House, Primrose
        Street, London, EC2A 2HS as its agent for process in
        England.

        AS  WITNESS  the  hands of the duly  authorised  representatives  of the
        parties on the date which first appears on page 1.




<PAGE>



                                       SCHEDULE 1
                               PARTICULARS OF THE COMPANY



Date and Place of           27 July 1959; Quebec, Canada
Incorporation:

Registered Office:          1690 Route Marie-Victorin,
                            Tracy, Quebec, J3R 1M7
                            Canada

Authorised Share Capital:   an  unlimited   number  of  Common   Shares  and  an
                            unlimited  number  of Class A  Special  Shares  both
                            without nominal or par value which may be issued for
                            an unlimited consideration


Shareholders and Issued     Tioxide Group Limited - 135,000 Common Shares
Share Capital:              ICI Omicron BV - 37,000 Class A Special Shares


Directors:                  Rene Lachance
                            Guy Gauthier
                            John A. Collingwood

Secretary:                  Rene Lachance



<PAGE>



                                       SCHEDULE 2
                                       PROPERTIES
                                       (CLAUSE 1)
                                         PART I





NO.     ADDRESS                       ESTATE OR INTEREST             USE

1       Factory at 1690 and 1694      Freehold                  Titanium dioxide
        Marie-Victorin Boulevard,                               finishing plant
        Tracy, Quebec.

2       Land at Lot 708-102 of the    Freehold                  Site for
        Official Cadastre of the                                titanium
        Parish of Notre-Dame-de-la-                             dioxide plant
        Nativite-de-Becancour
        and Lot 879-10 of the
        Official Cadastre of the
        Parish of Saint-Edouard-
        de-Gentilly.

3       9999 Cavendish Boulevard,     Leasehold                 Former offices
        Ville St. Laurent.                                      now sub-let

4       350 Burnhamthorpe Road West,  Leasehold                 Offices
        Suite 210, Mississaga.



                                        PART II

        On  Completion,  the Seller shall  deliver up to the Purchaser all title
        documentation  (and other  documentation  disclosed to the Purchaser) in
        connection with the Properties.






<PAGE>



                                       SCHEDULE 3
                                       WARRANTIES


                                       A. GENERAL



    A.1 CAPACITY AND CONDUCT OF BUSINESS

    (1) The Seller (and each of its Affiliates in respect of the  Implementation
        Agreements  to which  they are  parties)  has the  requisite  power  and
        authority to enter into and to (otherwise as provided in this agreement)
        perform this agreement and such Implementation Agreements.

    (2) The Seller (and each of its Affiliates, in respect of the Implementation
        Agreements  to which they are parties) has  obtained and  satisfied  all
        corporate,  regulatory  and other  approvals,  or any other  conditions,
        necessary  to execute and  (otherwise  as  provided  in this  agreement)
        perform this agreement and the Implementation Agreements.

    (3) This  agreement and the  Implementation  Agreements  constitute (or when
        executed will  constitute)  valid and binding  obligations of the Seller
        (and each of its Affiliates in respect of the Implementation  Agreements
        to which they are parties) enforceable in accordance with their terms.

    (4) The execution  and  compliance  with the terms of this  agreement by the
        Seller and the Implementation Agreements by the Seller or its Affiliates
        (as appropriate) will:

               (a) not constitute a breach of any material contract to which the
                   Seller (or any of its  Affiliates)  is a party or by which it
                   or they are bound or entitle any person to terminate or avoid
                   any such agreement or contract;

               (b) be  in  compliance   with  the  Seller's  and  the  Company's
                   memorandum    and   articles   of    association   or   other
                   constitutional documents (or those of any of its Affiliates);

               (c) not contravene:

                   (i)  any order, judgment or decree; or

                   (ii) any statute, rule or regulation; or

                   (ii) any other  restriction  of any kind by which the  Seller
                        or any of its Affiliates or the Company is bound; or

               (b) not result in the loss or  impairment of or any default under
                   any licence, authorisation or consent required by the Company
                   for the purposes of its business.

    (5) All factual  information  contained  in this  agreement  relating to the
        Company is true and accurate in all material respects.

    (6) There are no  outstanding  powers of attorney  executed on behalf of the
        Company.


    A.2 THE COMPANY

    (1) The  information  relating  to the  Company  contained  in Schedule 1 is
        true and accurate.



<PAGE>


    (2) Compliance has been made with all legal  requirements in connection with
        the  formation  of the  Company  and all  issues  and  grants of shares,
        debentures or other securities of the Company.


    A.3 OWNERSHIP OF THE SALE SHARES

    (1) The Seller is the sole legal and  beneficial  owner of the Sale  Shares.
        The Sale  Shares  constitute  the  entire  issued  share  capital of the
        Company.

    (2) The Seller is  entitled  to sell and  procure  the  transfer of the full
        legal  and  beneficial  ownership  in the  Sale  Shares  free  from  any
        encumbrance,  equity  or  third  party  right  of  any  kind  or  nature
        whatsoever,  from any  agreement  or contract to grant the same and from
        any claim to any of the same.

    (3) The Sale  Shares  are fully  paid up or  credited  as fully  paid up and
        constitute  the whole of the issued and allotted  share capital owned by
        the Seller in the Company.

    (4) No agreement  or contract  has been  entered into which  requires or may
        require the Company to allot or issue any share or loan  capital and the
        Company has not allotted or issued any securities  which are convertible
        into share or loan  capital and there are no voting  trusts,  proxies or
        other  agreements  or  understandings  with respect to the voting of the
        Sale Shares.


    A.4 SUBSIDIARIES

    (1) The Company is not the holder or beneficial  owner of (nor has agreed to
        acquire) any class of any shares or loan capital or other  securities of
        any other corporation (whether incorporated in Canada or elsewhere).

    (2) The  Company  is not  and has not  agreed  to  become  a  member  of any
        partnership  or  other  unincorporated  association,  joint  venture  or
        consortium (other than recognised trade associations).

    (3) The  Company   does  not  have  any  place  of  business  or   permanent
        establishment   (as  that  expression  is  defined  in  double  taxation
        conventions) outside Canada.


    A.5 OWNERSHIP OF ASSETS

    (1) Except for those Assets that are leased (as described in the  Disclosure
        Letter),  the Company has full legal and beneficial  title to all Assets
        (whether  tangible or  intangible)  reflected in the Accounts  (save for
        current  assets and fixed  assets  worth less than  US$100,000,  both as
        defined for the purposes of the Accounts,  disposed of by the Company in
        the Ordinary  Course of its Business since the  Accounting  Date) and to
        all assets acquired by the Company since 28 February 1998.

    (2) None of the  Assets is subject to any  encumbrance  (including,  without
        limitation,  any debenture,  mortgage, charge, lien (other than any such
        lien  arising  by  operation  of law or by  statute),  deposit by way of
        security,  bill of sale,  option or right of  pre-emption)  except those
        that arise in the Ordinary Course of Business and do not have a material
        adverse  effect  on the  Business.  All  significant  items of Plant and
        Equipment  have been  regularly  and  adequately  maintained  where such
        maintenance  is normally  required and are in  reasonable  working order
        having  regard to their age and use and taken as a whole are  capable of
        operating the Business fully and effectively as conducted by the Company
        prior to Completion.



<PAGE>


    (3) Save for  fluctuations  and  variations in Stock due to normal  business
        factors including,  without limitation,  production schedules and market
        demand  (including  seasonal  factors  affecting the same) the Stocks in
        aggregate comprise broadly the same mix of products as has been required
        and has been maintained at levels  sufficient to meet the level of sales
        of the  Business for the last four  quarters.  The Stock is owned by the
        Company free and clear of all liens,  claims,  charges and  encumbrances
        other than any such liens arising by operation of law or by statute. The
        Stock is located at the Tracy Site and as  disclosed  in the  Disclosure
        Letter.

    (4) The  Company  owns or has the right to use all the  property  rights and
        assets  necessary for the Company to carry on fully and  effectively the
        Business  in the  manner in and to the  extent to which it is  presently
        conducted.

    (5) The  Business  Data taking into  account the time,  purpose,  nature and
        context in which it was prepared is in all material respects a bona fide
        and  accurate  record  and  in  the  Seller's  opinion  is  collectively
        sufficient for the purposes of conducting the Company's  business in the
        Ordinary  Course  of  Business.  The  Business  Data  and the  Company's
        information,  and the means of access to them, are exclusively  owned by
        it and under its direct control or are under its authority.

    (6) The  Disclosure   Letter  contains  details  of  the  current  insurance
        arrangements  applicable to the Company.  Those arrangements are in full
        force and effect,  all  premiums  have been duly paid and, so far as the
        Seller is aware, nothing has been done or omitted to be done which would
        make any policy of insurance  of the Company void or voidable.  There is
        no claim outstanding under any such arrangement.


    A.6 COMPLIANCE WITH STATUTES

        The Company has complied  with all  applicable  laws  (including  rules,
        regulations  both  having  the  force  of law,  injunctions,  judgments,
        orders,  decrees,  rulings, and charges thereunder) of national,  local,
        and foreign governments (and all agencies thereof), and no action, suit,
        proceeding, hearing, investigation, charge, claim, demand, or notice has
        been filed or commenced  against the Company  alleging any failure so to
        comply.


    A.7 LICENCES AND CONSENTS

        The Company has all Permits  necessary to own and operate its Assets and
        to carry on the  Business  in the manner in which such  business  is now
        carried  on. All such  Permits  are valid and  subsisting  and have been
        complied  with in all material  respects.  The Company has paid all fees
        due under the same. A list of material  Permits has been  disclosed  and
        identified  in the  Disclosure  Letter  and the  list  identifies  those
        material  Permits which allow for  revocation on a change in controlling
        shareholder.


    A.8 LITIGATION

    (1) The Company is not engaged in any litigation or arbitration  proceedings
        except as plaintiff for  collection  of debts in the Ordinary  Course of
        Business which is likely to involve the Company  claiming or paying sums
        in excess of US$100,000 or which  otherwise will have a material  effect
        on the  operation  of the Company and the Business and there are no such
        proceedings pending and no letter before action has been received by the
        Company and so far as the Seller is aware  there are no facts  likely to
        give rise to any such  proceedings.  The  Seller  has  disclosed  in the
        Disclosure Letter a list (which is complete and accurate in all material
        respects)  which includes a description of each pending law suit,  claim
        (including    customer    complaints),    administrative    proceedings,
        arbitration,  labour dispute or governmental investigation or inspection
        to  which  the  Company  is a party or  involves  the  operation  of the
        Business or involves the Sale Shares and in each case which is likely to
        involve the Company claiming or paying sums in excess of US$100,000. The
        Seller has disclosed  all material  (individually  or in the  aggregate)
        product liability claims received by the Company or by the Seller during
        the last  three  years.  There  are no  orders,  decrees,  judgments  or
        agreements with any court or governmental authority to which the Company
        or the  Seller  (on  behalf of the  Company)  is a party or by which the
        Company or the Seller or the Sale Shares are bound and which will have a
        material effect on the operation of the Company and its business.

<PAGE>

    (2) No  administrator,  receiver  or  administrative  receiver  or any other
        equivalent  officer has been  appointed  in respect of the Company or in
        respect of any parts of the assets or undertakings of the Company.

    (3) No petition has been  presented,  no order has been made,  no resolution
        has been passed and no meeting has been  convened for the  winding-up of
        the Company or for an administration order to be made in relation to the
        Company nor has any such order been made.

    (4) No  voluntary  arrangement  has  been  approved  and  no  compromise  or
        arrangement  has been  sanctioned in respect of the Company  pursuant to
        any applicable bankruptcy or insolvency legislation.

    (5) The Company has not become unable to pay its debts.

    (6) No distress,  distraint,  charging order,  garnishee order, execution or
        other  process has been levied or applied for in respect of the whole or
        any  part  of any of the  Property,  Assets  and/or  undertaking  of the
        Company.


    A.9 ENVIRONMENTAL MATTERS

    (1) Environmental Authorisations

               (a) The  Company  has   lawfully   obtained   all   Environmental
                   Authorisations  and each such  authorisation is in full force
                   and effect and the Company has complied at all times with and
                   can continue to comply in the future with all  conditions  of
                   such authorisations.

               (b) No works or  costs  are or will be  necessary  to  obtain  or
                   secure compliance with or maintain any existing Environmental
                   Authorisations  or their  conditions  or  otherwise to comply
                   with Environmental Laws.

               (c) The Company  has  received  no  communication  in any form in
                   respect of any Environmental Authorisation varying, modifying
                   in any material respect,  revoking,  suspending or cancelling
                   the same or indicating an intention or  threatening  so to do
                   and there  are no facts or  circumstances  which  the  Seller
                   knows or ought  reasonably  to know which will  result in any
                   Environmental   Authorisation  being  so  varied,   modified,
                   revoked, suspended or which may prejudice their renewal.

               (d) The Seller or the Company has taken all  necessary  action in
                   connection with the renewal or extension of all Environmental
                   Authorisations.

               (e) The  Company is not  engaged in and,  so far as the Seller is
                   aware,  there are no facts which make it likely or  desirable
                   that it should be  engaged  in any  appeal in  respect of any
                   Environmental   Authorisation  or  any  conditions  contained
                   therein or any refusal of any Environmental Authorisation.

               (f) So far as the Seller is aware or ought to be aware,  there is
                   no reason  (other than reasons  relating to the  Purchaser or
                   its   Affiliates)   to  believe   that  those   Environmental
                   Authorisations which have been applied for but which have not
                   yet been granted or are pending will not be granted  within a
                   reasonable  period of time and on terms which are  acceptable
                   in order for the  Company to continue  its  current  business
                   operations.

               (g) So far as the  Seller  is aware or  ought  to be  aware,  the
                   execution and/or  performance of this agreement and all other
                   documents  which are to be  executed at  Completion  will not
                   result  in any  Environmental  Authorisations  being  varied,
                   modified, revoked, suspended, cancelled or not renewed, other
                   than for reasons relating to the Purchaser or its Affiliates.

<PAGE>

    (2) Compliance with Environmental Laws

               (a) The Company is in compliance with  Environmental Laws and the
                   state  and use of the  Property  have  been at all  times  in
                   conformity with Environmental Laws.

               (b) The Company has not  received any  communication  in any form
                   from any competent authority requiring the taking of remedial
                   or other steps in relation to the  pollution or protection of
                   the  Environment or the state or use of the Property.  So far
                   as the Seller is aware there are no circumstances which might
                   give  rise  to such  communications  being  received  and the
                   Seller is not aware of any  intention on the part of any such
                   authority to give such notice.

               (c) No proceedings or other action, claim or investigation are or
                   have been in  existence  or are so far as the Seller is aware
                   pending or threatened  against the Company arising from or in
                   relation to any  Environmental  Authorisations  or  otherwise
                   concerning Environmental Laws.

    (3) Liability

               (a) The Company or the Seller,  in relation to the Business,  has
                   not received  any notice or  intimation  of any  complaint or
                   claim from any person in respect of any matter concerning the
                   Environment.

               (b) The Company or the Seller,  in relation to the Business,  are
                   not and have  not been  engaged  in any  action,  litigation,
                   arbitration or dispute resolution  proceedings relating to or
                   concerning   any   actual  or   potential   liability   under
                   Environmental  Laws and the  Seller  is not aware of any such
                   matters pending or being  threatened or of any  circumstances
                   or facts likely to give rise to any such matters.

               (c) The Company or the Seller,  in relation to the Business,  are
                   not and have not been  subject to any  injunction  or similar
                   remedy or order by a court of competent  jurisdiction,  or to
                   any  undertakings  given  to such  court  in  respect  of any
                   matters relating to or concerning the Environment.

    (4) As far as the  Seller is aware,  there has not been in  relation  to the
        Business  in the last  three  years any  adverse  report,  complaint  or
        investigation   under  an  Act  Respecting   Industrial   Accidents  and
        Occupational  Diseases  (Quebec) or an Act Respecting  Labour  Standards
        (Quebec) or any prosecution, formal caution or warning for any violation
        of any applicable laws or regulations.



   A.10 DATA ROOM DOCUMENTS

        (1)    Save as disclosed in Schedule 7 of the Disclosure  Letter, so far
               as the Seller is aware, each licence,  permit, contract, list and
               report set out in Annex 6 and  disclosed  in the Data  Room,  and
               identified  on Annex 6 by reference to the  reference  number set
               out in the Data Room Index annexed to the Disclosure Letter:

               (a) other than where redacted, is a true copy of the original;

               (b) is the latest version thereof;

               (c) is complete; and

               (d) has not  been  altered,  amended  or  varied  since  the date
                   thereon.

<PAGE>


        (2)    To the extent that any note,  summary or response to questions of
               or in respect of the  documents set out in Annex 6 referred to in
               sub-Paragraph  A.10(1)  contains any expression of opinion of the
               ICI Group (not  including  the  opinion of third  parties),  such
               opinion  reflects  the  current  reasonably  held  opinion of its
               author  given in good faith  taking into  account the  respective
               author's knowledge and understanding.


                                      B. ACCOUNTS



    (1) Accounts

               (a) The Accounts (true and complete  copies of which are enclosed
                   with the Disclosure Letter):

                   (i)have  been  prepared  in  accordance  with the  historical
                      cost convention and with the Accounting Standards;

                   (ii) have been  prepared  on bases and  principles  which are
                      consistent  with  those  used  in the  preparation  of the
                      audited  statutory  accounts  of the Company for the three
                      financial years immediately  preceding that which ended on
                      the Accounting Date; and

                   (iii)show a true and fair view of the state of affairs of the
                      Company as at the  Accounting  Date and of the  results of
                      the Company for the financial year ended on that date;

               (b) Without  prejudice to the  generality of paragraph (a) above,
                   the Accounts make:

                   (i)adequate provisions or reserve (or note in accordance with
                      good accountancy  practice) for all actual liabilities and
                      capital commitments of the Company;

                   (ii) proper  provision or reserve (or note in accordance with
                      good  accountancy   practice)  for  all  known  contingent
                      liabilities    including    unquantified    or    disputed
                      liabilities;

                   (iii)provision  or reserve  reasonably  regarded  as adequate
                      for bad and doubtful debts; and

                   (iv) provision or reserve for taxation  liable to be assessed
                      on the  Company  or for  which  it may be  accountable  in
                      respect of the period ended at the Accounting Date.

               (c) True and  complete  copies of the Accounts and of the audited
                   accounts  for each  financial  year of the Company  preceding
                   that which ended on the Accounting Date have been laid before
                   the  Company in general  meeting  and the  auditors'  reports
                   thereon were unqualified.

               (d) The  Accounts   are  not   affected  by  any   extraordinary,
                   exceptional or non-recurring items.

               (e) The   profits  or  losses  of  the   Company  for  the  three
                   consecutive  financial  years ended on the Accounting Date as
                   shown by the  Accounts  (and by the  audited  accounts of the
                   Company for previous periods  delivered to the Purchaser) and
                   the trend of profits or losses thereby shown have not (except
                   as therein  disclosed)  been affected by  inconsistencies  of
                   accounting treatment, by the inclusion of non-recurring items
                   of  income  or  expenditure,  by  transactions  entered  into
                   otherwise  than on  normal  commercial  terms or by any other
                   factors  rendering  such  profits or losses for all or any of
                   such periods exceptionally high or low.

<PAGE>


               (f) Since the Accounting Date:

                   (i)there have been no material  change in any  accounting  or
                      stock valuation method used by the Company;

                   (ii) there have been no write downs or similar  reductions to
                      the book value of any of the Assets of the Company; and

                   (iii)there  have  been no  upward  revaluations  of  existing
                      Stocks.

    (2) Canadian Financial Information

               (a) The Canadian Financial  Information has been derived from the
                   books of the  Company,  which books have been  regularly  and
                   consistently   kept  and   maintained   using  ICI's   normal
                   accounting  policies and  practices as set out or referred to
                   in the ICI's Controller's Manuals (and the policies contained
                   in these Manuals are in  accordance  with UK GAAP) as applied
                   by the relevant  business on a consistent basis in accordance
                   with UK GAAP and,  on such basis,  represents  the Assets and
                   liabilities of the Business as at 28 February 1998.

               (b) The Canadian  Financial  Information  fairly  represents  the
                   matters presented therein.

               (c) Since 28 February 1998 there has been:

                   (i)no material  change in accounting  or inventory  valuation
                      methods  used  by  the  Company  in  connection  with  the
                      Assets;

                   (ii) no upward re-valuations of existing Stocks; and

                   (iii)no material  adverse change in the Business or financial
                      condition of the Company  which for this purpose shall not
                      include the  inherently  cyclical  nature of the  titanium
                      dioxide industry or economic conditions generally.

    (3) Since [date of Framework Agreement] 1998:

               (i)  the Company has not sold, leased,  transferred,  or assigned
                    any of its assets, tangible or intangible,  other than for a
                    fair consideration in the Ordinary Course of Business;

               (ii) the Company has not entered  into any  agreement,  contract,
                    lease,   or  licence  (or  series  of  related   agreements,
                    contracts,  leases and licences)  either involving more than
                    US$1,000,000  within  a  12  month  period  or  outside  the
                    Ordinary Course of Business;

               (iii)no party  (including  any of the Company's  Affiliates)  has
                    accelerated,   terminated,   modified,   or  cancelled   any
                    agreement, contract, lease, or licence (or series of related
                    agreements,  contracts, leases, and licences) involving more
                    than  US$250,000  within a 12  month  period  to  which  the
                    Company is a party or is bound;

               (iv) the Company has not imposed or  permitted  another to impose
                    any  encumbrance  upon  any  of  its  assets,   tangible  or
                    intangible  other than those  arising by operation of law or
                    statutes;

<PAGE>


               (v)  the Company has not made any capital  expenditure (or series
                    of related capital  expenditures) either involving more than
                    US$250,000 or outside the Ordinary Course of Business;

               (vi) the Company has not made any capital investment in, any loan
                    to, or any  acquisition  of the securities or assets of, any
                    other  person  (or series of  related  capital  investments,
                    loans  and   acquisitions)   either   involving   more  than
                    US$250,000 or outside the Ordinary Course of Business;

               (vii)other than to Affiliates of the Seller,  the Company has not
                    issued any note,  bond,  or other debt  security or created,
                    incurred,   assumed,  or  guaranteed  any  indebtedness  for
                    borrowed  money  or  capitalised   lease  obligation  either
                    involving more than US$250,000 singly or US$2,500,000 in the
                    aggregate;

               (viii) the Company has not  delayed or  postponed  the payment of
                    accounts  payable  and other  liabilities  other than in the
                    Ordinary Course of Business;

               (ix) the  Company  has not  cancelled,  compromised,  waived,  or
                    released any right or claim (or series of related rights and
                    claims) either involving more than US$250,000;

               (x)  the Company has not granted any licence or sublicence of any
                    rights under or with respect to any Intellectual Property;

               (xi) there  has  been  no  change  made  or   authorised  in  the
                    constitutional documents of the Company;

               (xii)the Company has not issued,  sold, or otherwise  disposed of
                    any of its capital stock, or granted any options,  warrants,
                    or other  rights  to  purchase  or  obtain  (including  upon
                    conversion, exchange, or exercise) any of its capital stock;

               (xiii) the  Company  has not  declared,  set  aside,  or paid any
                    dividend  or  made  any  distribution  with  respect  to its
                    capital  stock  (whether  in cash or in kind)  or  redeemed,
                    purchased, or otherwise acquired any of its capital stock;

               (xiv)the Company has not experienced any damage,  destruction, or
                    loss  (whether or not covered by  insurance) to its property
                    involving sums in excess of US$250,000;

               (xv) the Company  has not made or pledged to make any  charitable
                    contribution outside the Ordinary Course of Business;

               (xvi) the Company has not committed to any of the foregoing.


                            C. ANTI-COMPETITIVE ARRANGEMENTS

    (1) The  carrying on of the  Business  by the  Company  does not require any
        agreement, arrangement, concerted practice or course of conduct which is
        material to the Business and which:

               (a) is  subject  to   registration   under  the  Competition  Act
                   (Canada) but is not so registered;

               (b) is an offence or a  reviewable  matter  within the meaning of
                   Parts  VI and  VIII,  respectively,  of the  Competition  Act
                   (Canada).

    (2) The  Company  or the  Seller,  in  relation  to the  Business,  have not
        received in the last three years any process,  notice or  communication,
        formal or  informal,  from the  Director of  Investigation  and Research
        appointed   under  the   Competition  Act  (Canada)  or  any  anti-trust
        regulatory  authority,  relating  to any aspect of the  Business,  which
        alleges any illegal  practices in relation to the Business and so far as
        the Seller is aware no such process,  notice or  communication is likely
        to be received.

<PAGE>


                                 D. MATERIAL CONTRACTS



    (1) Particulars  of all  Material  Contracts  are annexed to the  Disclosure
        Letter.

    (2) The Company is not in breach of, or default  under,  any of the Material
        Contracts or any other  Contracts the  consequence of which would or may
        have a material  adverse effect on the Company and, so far as the Seller
        is aware, no state of facts exists or event has occurred,  is pending or
        is  threatened  which  after  the  giving of notice or the lapse of time
        would or may constitute or result in a breach or a default by the Seller
        or by the Company or any other person, firm, corporation or entity of or
        in  relation  to any  contract  the  consequences  of which would have a
        material effect on the operation of the Business. All Material Contracts
        are  legal,  valid  and  binding  obligations  of the  Company  and  are
        enforceable in accordance with their terms.


                                      E. EMPLOYEES



    (1) Particulars  of the material  terms of  employment  of all Employees and
        officers of the Company  are annexed to the  Disclosure  Letter and such
        particulars are true, complete and accurate.

    (2) No Employee  has given to the  Company and the Company has not  received
        from any Employee, nor has the Company given to any Employee,  notice of
        termination of any such Employee's employment.

    (3) Standard  form  consultancy  agreements,   agency  or  self-employed  or
        contracted  labour  agreements  or  contracts  where  sums in  excess of
        US$75,000  per annum are paid or are  payable by the  Company  have been
        disclosed in the Disclosure Letter.

    (4) So far as the Seller is aware, there is no material industrial action by
        the Employees  pending or threatened in relation to the Business nor has
        there been within the last 12 months.

    (5) Particulars  of all loans  made by the  Company to  Employees  and which
        shall remain  outstanding at Completion,  together with sums owed by the
        Company to any Employee (other than  remuneration and other  contractual
        or customary benefits), are disclosed in the Disclosure Letter.

    (6) No Employee of Grade 37 or above previously  employed by the Company has
        a right to return to work or any right to be reinstated or re-engaged by
        the Company, whether under statute or otherwise.

    (7) No Employees  previously  employed by the Company have a right to return
        to work or any right to be  reinstated  or  re-engaged  by the  Company,
        whether under statute or otherwise.

    (8) In relation to the  Employees,  there are no existing nor, so far as the
        Seller is aware,  threatened  arbitration  procedures  arising out of or
        under any union  recognition  or works  council  agreement  covering the
        Employees nor, so far as the Seller is aware,  does any basis  therefore
        exist  nor has the  Seller  or the  Company  received  any  request  for
        recognition  or   representation   by  any  trade  union  not  currently
        recognised on the Tracy Site.

    (9) The Company has complied in all  material  respects  with all  statutes,
        regulations,  orders and codes of conduct  relating  to  employment  and
        relations  with  Employees and trade unions and has  maintained  records
        required by law regarding the service of each of its Employees.

<PAGE>

   (10) The  Disclosure  Letter  contains a list of  Employees at the Tracy Site
        together with a list of Employees below Grade 37 and a list of Employees
        above Grade 37. The Disclosure  Letter also contains a list of Employees
        of the Company who are  employed  at  locations  other than at the Tracy
        Site.

   (11) So far as the Seller is aware here are no material complaints,  disputes
        or grievances pending or threatened against the Company of any nature in
        relation to its Employees or former Employees.

   (12) All of the Employees are employed by the Company.

   (13) The Company has discharged  such  obligations to Employees in respect of
        salaries, wages, commissions, bonuses, overtime pay and holidays as have
        accrued and become payable to Employees in accordance with the Company's
        normal policies, including the normal timing of such payments, as at the
        date hereof.

        For the purposes of this Part E, "GRADE 37" refers to a particular grade
        of employee, as determined by the Company,  using the Hay-MSL evaluation
        system.


                                      F. PENSIONS

        In this Part F, "SCHEME  DOCUMENTS" means the documents  relating to the
        Canadian Schemes identified in the Disclosure Letter.

    (1) Except  pursuant  to the  Canadian  Schemes,  the  Company has not paid,
        provided  or  contributed  towards,  and is  not  under  any  obligation
        (whether  or not  legally  enforceable)  to pay,  provide or  contribute
        towards any relevant  benefit  payable on death or retirement  for or in
        respect of any present or past officer or Employee (or any spouse, child
        or dependant of any of them) of the Company.

    (2) The Scheme Documents  comprise all the documents  governing the Canadian
        Schemes including financial statements for the preceding period of three
        years,  all  explanatory  booklets and  announcements  to the  Employees
        describing the terms of the Canadian Schemes (other than routine benefit
        statements) of current effect and full particulars of any enhancement of
        benefit and  contributions  payable to the Canadian Schemes and there is
        no obligation  to provide or continue to provide  benefits in respect of
        Employees or former  Employees of the Company under the Canadian Schemes
        other than as revealed in the Scheme Documents.

    (3) The Canadian  Schemes have been registered as required under  applicable
        legislation.

    (4) The Canadian  Schemes have at all times  complied with the provisions of
        all  relevant  statutes,  regulations  and  requirements  and have  been
        administered in accordance with the trusts, powers and provisions of the
        Canadian  Schemes  and with due regard to the  general  requirements  of
        trust law and the advisers to the  Canadian  Schemes have not had and do
        not have any cause to report any matter.

    (5) The Company has complied in all material  respects with its  obligations
        under  the  Canadian  Schemes  and  all  amounts  due to be  paid to the
        Canadian Schemes by it and its Employees have been paid.

    (6) There are no claims or actions in progress, pending or threatened (other
        than routine  claims for benefits)  against the trustees of the Canadian
        Schemes or the Company about benefits payable under the Canadian Schemes
        in respect of Employees or former Employees of the Company.

    (7) All  information  of a factual nature made available to the Purchaser or
        its  advisers  in  connection  with  the  Canadian  Schemes  is true and
        accurate in all material respects and there is no omission therefrom.

<PAGE>

    (8) No proposal  has been  announced  to alter or  discontinue  the Canadian
        Schemes nor has any proposal which is legally enforceable been announced
        to  establish  any   retirement,   death  or  disability   agreement  or
        arrangement of the nature  referred to in paragraph (1) above in respect
        of  Employees  which  proposal  remains  outstanding  and has  not  been
        implemented.

    (9) There is no amount which is due to the trustees of the Canadian Schemes.


                                     G. PROPERTIES

    (1) The  Property  constitutes  all of the  freehold or  leasehold  or other
        immovable  property  currently  owned by the  Company  or in  which  the
        Company has an ownership interest.

    (2) The  particulars of the Property shown in Schedule 2 are true,  complete
        and correct.  The use of the Property for the purpose stated in Schedule
        2  corresponds  to the use to  which  it is in fact  put or  (where  the
        Property  is not  presently  in use) to the use to  which it was last in
        fact put.

    (3) The  Company has a good and  marketable  title to the  Property  for the
        estate or interest stated in Schedule 2, free from any defects,  and has
        in its  possession,  or under its control,  all duly  stamped  deeds and
        documents  which are necessary to prove title to the Property,  and such
        title has already been fully deduced to the Purchasers.

    (4) The  Company  does not require  the use and is not in  occupation  of or
        entitled to any estate or  interest  in any land or premises  other than
        the Property. The Company is in exclusive occupation of the whole of the
        Property and on Completion shall be in exclusive occupation of the whole
        of the Property.

    (5) The Property is not affected by any of the following matters:

               (a) any    servitude,    easement,     reservation,     covenant,
                   restriction,   agreement,   licence,   franchise,   hypothec,
                   mortgage, charge, encumbrance, or third party right;

               (b) any notice, order, proposal, dispute or complaint relating to
                   it or its  present  use  under  any  legislation,  agreement,
                   covenant, condition, licence or consent; or

               (c) outgoings (other than uniform  business rates,  water charges
                   and other  standard  payments to the relevant  water  company
                   including,  without limitation,  insurance premiums and other
                   usual business expenses), whether of a periodically recurring
                   nature  or  otherwise  and  whether  payable  by the owner or
                   occupier of the relevant property.

    (6) All obligations,  restrictions,  conditions and covenants (including any
        imposed by or pursuant  to any lease but  excluding  any  referred to in
        paragraph  A.9 above)  affecting  the  Property  have been  observed and
        performed  so far as the  Seller is aware  and  there are no  subsisting
        allegations  of a breach of any thereof  relating to the Property or its
        present  use  under any  legislation,  agreement,  covenant,  condition,
        licence or consent  other than those  referred to in paragraph A.9 above
        or so far as the Seller is aware any circumstance  which might give rise
        to such a breach.

    (7) The Property is in a good and substantial  state of repair and condition
        and fit for the  purposes  for  which  they are  presently  used and the
        Company has not used in the Property any  substances  not in  conformity
        with  relevant  standards  or codes of practice  or which are  generally
        known  to  be  deleterious  to  health  and  safety  and  there  are  no
        uncompleted  works of any description at the Property other than routine
        maintenance.

    (8) There are no subsisting allegations that the use of the Property for the
        purpose  stated  in  Schedule  2 is not  the  permitted  use  under  the
        provisions of all relevant legislation.

<PAGE>

    (9) The Company has no liabilities or contingent  liabilities (but excluding
        any  matters  referred  to in  paragraph  A.9  above) in  respect of any
        properties  (other than the Property) (or any interest  therein) whether
        by privity of contract or by way of guarantee or surety or otherwise.

   (10) The Property has the benefit of all rights,  servitudes,  easements  and
        consents  required for the  occupation and operation of the Property for
        their present use and any plant,  machinery  and  processes  thereat and
        such  rights,  servitudes,  easements  and consents are enjoyed on terms
        which do not  permit  them to be  determined  by any  third  party or by
        effluxion of time.

   (11) There are no  outstanding  liabilities  to make  payments  in respect of
        rates,  water  charges,  or any other charges  payable in respect of the
        Property  to  any  governmental,   state,  municipal  or  other  similar
        authority.


                                H. INTELLECTUAL PROPERTY

    (1) The rights licensed to the Company  pursuant to the Canadian  Technology
        Agreements  in  combination  with all  rights  owned by the  Company  in
        Intellectual   Property   constitutes  all  the  Intellectual   Property
        necessary for the conduct of the Business by the Company as now
        conducted.

    (2) The Seller does not have actual notice of  infringement  by others or of
        attacks on the validity or  enforceability  of or on the Company's title
        to  any  Material  Intellectual  Property  used  in  the  Business.  The
        Disclosure   Letter   identifies  all  patents,   patent   applications,
        registrations   and   applications   for  registration  of  Intellectual
        Property,  all Material  unregistered  trademarks,  service marks, trade
        names and copyrights  owned by the Company.  "MATERIAL" in this Warranty
        H(2) means  Intellectual  Property  the  absence  of which  would have a
        significant negative impact on either (a) the revenue attributable to or
        derived from the  Intellectual  Property or (b) otherwise on the conduct
        of the Company's  business.  The Disclosure  Letter also  identifies the
        status  of the  relevant  patents  and,  so far as the  Seller is aware,
        whether or not such patents are currently being opposed.

    (3) The Disclosure Letter identifies all information  technology used by the
        Company  which is defined in the  Disclosure  Letter as being  "MATERIAL
        INFORMATION TECHNOLOGY".

    (4) The Seller does not have actual  knowledge and has not received  written
        notification   that  the   activities  of  the  Business   infringe  the
        Intellectual   Property  of  any  third  party  (the  Seller  having  no
        obligation to conduct  investigations  in relation to any such potential
        infringement).

    (5) So far as the  Seller  is  aware  or ought  to be  aware,  all  Material
        agreements relating to Intellectual  Property and Technical  Information
        to which the  Seller is a party and  which  relate to the  Business  are
        listed in the Disclosure Letter.  "MATERIAL" in this Warranty H(5) means
        agreements relating to Intellectual  Property the absence of which would
        have  a   significant   negative   impact  on  either  (a)  the  revenue
        attributable  to or  derived  from  the  Intellectual  Property  or  (b)
        otherwise on the conduct of the Company's business.

    (6) All  Intellectual  Property  material  to the  conduct  of the  Business
        immediately  prior to  Completion  will be owned or available for use by
        the  Company  immediately  after  Completion.  For the  purposes of this
        Warranty H(5), Material has the same meaning as in Warranty H(2).


                                       I. BROKERS

        Neither the Seller nor the Company has employed any  investment  banker,
        broker or finder or  incurred  any  liability  for any  brokerage  fees,
        commissions,  finders fees or similar  payments in  connection  with the
        transactions contemplated by this agreement for which the Purchaser, the
        Purchaser's Affiliates or the Company may be liable.

<PAGE>

                                      J. TAXATION

    (1) Tax Returns, disputes, records and claims etc.

               (a) The Company has made all proper  returns  required to be made
                   for any  Taxation  purpose  and has  supplied or caused to be
                   supplied  all  information  required by law to be supplied to
                   any revenue authority.

               (b) There is no dispute or  disagreement  (not including  routine
                   queries  relating  to the  Taxation  returns of the  Company)
                   outstanding  at the date of this  Agreement  with any revenue
                   authority  regarding  the  proper  method  of  computing  the
                   profits  of the  Company  (or any  part  of it) for  Taxation
                   purposes  or the  proper  treatment  of sales  and  goods and
                   services  tax of any  supplies of goods or services  made (or
                   treated  as made) by the  Company  or in respect of any other
                   Taxation matter and there are no  circumstances  of which the
                   Seller is aware which make it likely that any such dispute or
                   disagreement   will  commence.   Without   prejudice  to  the
                   generality   of   the   foregoing,   there   is  no   current
                   investigation being undertaken by any Taxation authority and,
                   so  far  as the  Seller  is  aware,  there  are  no  existing
                   circumstances  which make it likely,  in the event of such an
                   investigation taking place, that a liability will arise.

               (c) The amount of Taxation  chargeable on the Company  during any
                   accounting  period  ending  on or  within  six  years  before
                   Completion  has not to any  material  extent  depended on any
                   concession,   agreement,   dispensation   or   other   formal
                   arrangement with any revenue authority in circumstances where
                   either:

                   (i) the   availability  of  any  such   arrangement  will  be
                       prejudiced  as a result of the  change of  control of the
                       Company resulting from this agreement; or

                   (ii)the  Company has not acted in  accordance  with the terms
                       of the arrangement in question.

               (d) The Company has made all  Taxation  claims,  disclaimers  and
                   elections  and taken all other  action the making or doing of
                   which was  assumed  to have been made for the  purpose of the
                   Taxation provisions in the Accounts.

    (2) Duties etc.

        All customs duties and sales and goods and services taxes payable to any
        revenue  authority upon the  importation of any of the Company's  assets
        and all excise duties payable to any revenue authority in respect of any
        of these  assets  have  been paid in full,  and none of these  assets is
        liable to confiscation  or forfeiture  (whether by virtue of non-payment
        or underpayment  of any Taxation or duty or by virtue of  non-compliance
        with any  legislation or regulation  relating to any Taxation or duty or
        otherwise howsoever).

    (3) Stamp Duty

        All documents  which are in the possession or control of the Company and
        which are  subject to stamp duty or  similar  duty and which  confer any
        right  upon the  Company  have been duly  stamped  and all stamp duty or
        similar duty properly paid thereon.  The Company has never  incurred any
        liability to stamp duty reserve tax.

    (4) Contracts

        No  contracts to which the Company is a party and no  obligation  to any
        present  or former  director,  employee  or officer  involve  any future
        liabilities  of a  revenue  nature  which  when  incurred  will  not  be
        deductible in computing  profits for corporation tax purposes  otherwise
        than as a result of any future  changes in the law or as a result of any
        voluntary  act  after  Completion  of the  Purchaser  or of the  Company
        outside the Ordinary Course of Business of the Company.

<PAGE>

    (5) Distributions and payments

        The Company has  deducted and  properly  operated  and  accounted to the
        appropriate  revenue authority for all amounts which it has been obliged
        to deduct in respect of Taxation.

    (6) Employee benefits

               (a) The Company has made all required deductions and withholdings
                   from all payments made, or treated as made, to its directors,
                   Employees  or  officers  or former  directors,  Employees  or
                   officers or any person  required  to be treated as such,  and
                   accounting  to the taxation  authorities  for all Taxation so
                   deducted  and for all Taxation  chargeable  on the Company on
                   benefits  provided for its directors,  Employees or officers,
                   or former directors, Employees or officers.

               (b) The  Disclosure  Letter  contains  full  details of all share
                   incentive schemes,  profit sharing schemes and profit related
                   pay schemes established by the Company.

    (7) Residence and offshore interests

               (a) The  Company is and has at all times been  resident in Canada
                   for the purposes of all Taxation  Statutes and has not at any
                   time been  resident  outside  Canada for the  purposes of any
                   Taxation Statute or any double taxation arrangements.

               (b) The Company has not at any time had a branch  outside  Canada
                   or any permanent establishment (as that expression is defined
                   in any applicable  double taxation  treaties)  outside Canada
                   and  the  Company  has no  existing  entitlement  to  receive
                   royalties,  (or any sum treated as royalties for any Taxation
                   purposes)  which are paid  subject to  deduction  of Tax in a
                   jurisdiction outside Canada.


                                K. MILLENNIUM COMPLIANCE


    (1) For the purposes of this agreement "MILLENNIUM COMPLIANT" means that the
        Computer Systems are capable of the following  functions before,  during
        and/or after 1 January 2000:-

               (a) handling date information involving all and any dates before,
                   during and/or after 1 January 2000  including  accepting date
                   input, providing date output and performing date calculations
                   in whole or part;

               (b) operating  accurately without  interruption on and in respect
                   of any and all dates  before,  during  and/or after 1 January
                   2000 and without any change in performance;

               (c) responding  to and  processing  two digit year input  without
                   creating any ambiguity as to the century; and

               (d) storing and providing date input information without creating
                   any ambiguity as to the century.

    (2) The Disclosure  Letter  contains  material  details of the measures that
        have been  implemented  within the Business to  determine  the extent to
        which its Computer  Systems are not Millennium  Compliant,  and material
        details of any  programme  undertaken by the Business with a view to its
        Computer  Systems  achieving  Millennium  Compliance  (or  so  close  to
        Millennium Compliance as is practicable).

<PAGE>

                              L. INTRA-GROUP ARRANGEMENTS


    (1) There is no  indebtedness  or liability  (actual or contingent)  nor any
        security  owed by the  Company  to any member of the  Seller's  Group or
        ICI's Group (as constituted  following Completion) other than arising in
        the Ordinary Course of Business and as conducted on arm's length terms.

    (2) There is no agreement or contract to which the Company is a party and to
        which  any  member  of the  Seller's  Group  (as  constituted  following
        Completion)  is a  party  or in  which  any  such  member  is  otherwise
        interested  in any  way  whatsoever  which  shall  continue  beyond  the
        Completion Date.



                                       M. DEBTORS


    (1) The Company has not made,  or entered  into any contract or agreement to
        make any loan to, or other  arrangement  with, any person as a result of
        which it is or may be owed any money other than trade debts  incurred in
        the Ordinary Course of Business and cash at bank.

    (2) The Company is not entitled to the benefit of any debt otherwise than as
        the original  creditor and has not  factored or  discounted  any debt or
        agreed to do so.

    (3) All of the  debts  which  will  be  reflected  in the  Final  Completion
        Statement as owing to the Company  (apart from bad and doubtful debts to
        the extent to which they have been provided for in the Final  Completion
        Statement  (as defined in Schedule 6)) will realise  their full value as
        included in the Final  Completion  Statement  within the  payment  terms
        agreed with the respective creditors.


                             N. OTHER OPERATIONS AND ASSETS

    (1) During the 8 years prior to the date hereof,  neither the  Company,  nor
        any of its downstream Affiliates nor any entity to which the Company has
        succeeded  through merger or by operation of law, has engaged,  directly
        or  through  downstream  Affiliates  or agents or in  partnership,  in a
        business  other  than  the  manufacture,   import,   export,   sale  and
        distribution of titanium pigments, co-products and related products.

    (2) The Seller has disclosed to the  Purchaser  details of all real property
        owned,  leased  or  occupied  by the  Company  or any of its  downstream
        Affiliates  or any entity to which the  Company  has  succeeded  through
        merger or by  operation  of law at any time  during the 8 years prior to
        the date hereof.

    (3) The  Seller  has  disclosed  to  the  Purchaser  all  off-site  disposal
        locations of Hazardous  Materials  owned by the Company,  its downstream
        Affiliates  and any entity to which the  Company has  succeeded  through
        merger  or by  operation  of law  during  the 8 years  prior to the date
        hereof.

    (4) Neither the Company, nor any of its downstream Affiliates nor any entity
        to which the Company has succeeded through merger or by operation of law
        has owned or  controlled  a business for whose  liabilities  any of them
        could be  responsible  the business  records of which have not been made
        available in the Data Room.






<PAGE>



                                       SCHEDULE 4
                               IMPLEMENTATION AGREEMENTS



      1 Deed of Indemnity.






<PAGE>



                                       SCHEDULE 5
                                      ENVIRONMENT


      1 INTERPRETATION

        For the purposes of this Schedule,  words and expressions defined in the
        Share Sale  Agreement to which this Schedule is attached  shall have the
        same  respective  meanings  in  this  Schedule  and,  in  addition,  the
        following terms shall have the following respective meanings:

        "COMMERCIALLY  REASONABLE EXPENSES" are those costs and expenses which a
        reasonable person acting in a commercially  prudent manner,  taking into
        account  (but  without  imposing  an absolute  requirement)  the need to
        minimise his expenditure, would expend, in the case of any obligation to
        carry out the  remediation of  Environmental  Contamination  pursuant to
        Environmental Laws, to meet that obligation. For the avoidance of doubt,
        Commercially Reasonable Expenses shall not include any costs or expenses
        to the extent  that they are  incurred  as a result of the  adoption  or
        imposition of standards of clean-up materially more stringent than those
        which are provided for under Environmental Laws;

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

        "COUNTER  INDEMNITY" means the indemnity  defined in  sub-paragraph  3.1
        of this Schedule;

        "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;

        "ENVIRONMENTAL CONTAMINATION" means any discharge,  transport, emission,
        release, leakage,  spillage, escape or disposal of Hazardous Material at
        or from the Site(s) onto or into any part of the Environment;

        "ENVIRONMENTAL  LAWS"  means  any and all  legislation  (whether  civil,
        criminal or administrative),  statutes,  treaty,  statutory  instrument,
        directive, bylaw or judgment, regulations,  ordinances, notices, orders,
        government  circulars,  codes of practice,  policy and guidance notes or
        decisions  of any  competent  regulatory  body or common law relating to
        pollution  or  protection  of the  Environment  or harm to human  health
        arising from Environmental Contamination,  which as at Completion are in
        effect  and  legally  capable  of  enforcement  by legal  process in the
        country in which the Site(s) are situated;

        "ENVIRONMENTAL  LIABILITIES" means all claims, costs, damages,  expenses
        (including reasonable professional fees incurred),  losses,  liabilities
        (including  without  limitation  liability to third  parties),  fines or
        penalties  suffered or incurred by the  Company,  the  Purchaser  or its
        Affiliates  (or the Seller or its  Affiliates in the case of the Counter
        Indemnity)  in  relation to the  Company  (excluding  in the case of the
        Indemnity but not the Counter  Indemnity the LPC Interests and LPC) as a
        direct   consequence  of  or  in  connection   with  any   Environmental
        Proceeding;

        BUT EXCLUDING any claims, costs, damages, expenses, losses, liabilities:

               (i) in  respect  of capital  expenditure  on plant and  equipment
                   other than capital to carry out remediation of  Environmental
                   Contamination pursuant to Environmental Laws;

               (ii)in respect of loss of anticipated  profits,  loss of revenue,
                   or any other loss in respect of business  interruption  other
                   than such reasonably  foreseeable losses of third parties who
                   have themselves directly suffered the relevant  Environmental
                   Contamination  or  whose  use of  the  Environment  has  been
                   adversely and directly affected by the relevant Environmental
                   Contamination;

<PAGE>

               (iii)  where   applicable   to  the  extent  that  they  are  not
                   Commercially Reasonable Expenses;

        "ENVIRONMENTAL PROCEEDING" means in relation to the Company:

               (i) subject  to (ii)  and  (iii)  below,  any one or more  writs,
                   interim  or  final   judicial  or   administrative   decrees,
                   judgments, injunctions, orders, or notices:

                   (a)under which the Company,  the Purchaser or its  Affiliates
                      (or  the  Seller  or its  Affiliates  in the  case  of the
                      Counter  Indemnity) are obliged by  Environmental  Laws or
                      legal process pursuant to Environmental  Laws to undertake
                      or pay the cost of remediation or with which the aforesaid
                      parties are otherwise obliged to comply; or

                   (b)in  respect  of any  violation  or  alleged  violation  of
                      Environmental Laws; or

                   (c)in respect of:

                      (01)    any personal injury to any third party; or

                      (02)    damage to any property of any third party,

                      both pursuant to Environmental Laws;

                      Provided that in the case of the Indemnity only:

                       *  the  reference  to the Company  shall  exclude the LPC
                          Interests and LPC; and

                       *  in paragraphs  (i) (c) (01) and (02), the reference to
                          a  "THIRD  PARTY"  shall  not  include  any  employee,
                          contractor  or agent of the Company,  the Purchaser or
                          its Affiliates, except when:

                       -  the  personal   injury  other  than   asbestos-related
                          personal  injury  (in the  case of  paragraph  (i) (c)
                          (01)); and/or

                       -  the damage to property (in the case of (i) (c) (02)),

                          occurs after Completion and the Purchaser did not know
                          or   reasonably   ought  not  to  have  known  of  the
                          circumstances which gave rise to that personal injury,
                          or as the case may be, that damage; and

               (ii)any  agreement  between the Seller and  Purchaser  (or in the
                   event of disagreement any  determination by the Experts) that
                   it  is  Reasonably  Necessary  to  undertake  remediation  of
                   Environmental  Contamination,  which  would (but for the fact
                   that an  environmental  authority  is  unaware of it) be more
                   likely  than  not to  result  in an  environmental  authority
                   bringing  an  Environmental  Proceeding  under  (i)(a) in the
                   definition of Environmental Proceeding and which would result
                   in Environmental Liabilities;

               (iii) notwithstanding  sub-paragraph 4.1 hereafter, any agreement
                   by the  Purchaser  or its  Affiliates  with an  environmental
                   authority that the Purchaser or its Affiliates will undertake
                   remediation   of   Environmental    Contamination   if   such
                   remediation is required by such environmental  authority as a
                   condition  to the  granting,  surrender  or  variation  of an
                   Environmental  Authorisation  relating to the Site,  provided
                   that:

                   (a)the grant,  surrender or  variation  of the  Environmental
                      Authorisation  arises out of the  conduct of the  Business
                      by the Purchaser or its Affiliates; and

<PAGE>

                   (b)the subject matter of the agreement with the environmental
                      authority  shall relate to the Site  Provided  that if the
                      subject  matter of the  agreement  does not  relate to the
                      Site, the Purchaser shall have taken all such steps as may
                      be  reasonable  to  contest  the  relevant   environmental
                      authorities linkage of the subject matter of the agreement
                      to the Site; and

                   (c)the  remediation  is not required  because of any proposed
                      change  of  use of  the  Site  from  the  Business  of the
                      Company; and

                   (d)save in respect of  sub-paragraph  4.1.2  relating  to any
                      Site or part  thereof,  the  remediation  is not  required
                      because  of any  proposed  closure  of all or  part of the
                      Site, other than in relation to:

                      (I) any  material  change of process  within the  existing
                          plant and/or buildings on such Site; or

                      (II)any material  change to or development of the business
                          and/or  operations  carried  on at the Site which does
                          not  result in such Site (or any part)  ceasing  to be
                          used for  general  industrial/manufacturing  of a type
                          materially similar to the existing Site operation; and

                   (e)the  Purchaser  or  its   Affiliates  has  to  the  extent
                      practicable consulted in good faith with the Seller on the
                      agreement   or   arrangements   with   the   environmental
                      authority.

        "HAZARDOUS MATERIAL" means hazardous,  poisonous,  dangerous, noxious or
        toxic substances, pollutants or wastes including (to the extent they are
        hazardous,   poisonous,   dangerous,   noxious  or  toxic)   pesticides,
        contaminants,  petroleum products,  asbestos,  polychlorinated biphenyls
        and radiation;

        "INDEMNITY" means the indemnities contained in paragraph 2 below;

        "REASONABLY  NECESSARY" means reasonably  necessary to avoid or avert or
        mitigate the development of substantial  adverse and material  pollution
        of the  Environment  or harm to human  health  which will arise within a
        period of six months; and

        "SITES(S)" means the Properties.


      2 INDEMNITY

    2.1 Subject to the provisions of this  agreement,  the Seller  undertakes to
        the Purchaser (for the benefit of the Company, the Purchaser and each of
        its  Affiliates)  that it will  indemnify and hold harmless the Company,
        the Purchaser and each of the Purchaser's  Affiliates against:

        2.1.1  all Environmental  Liabilities arising at or from the Site(s), to
               the extent that such  Environmental  Liabilities  are a result of
               Environmental  Contamination  occurring on or before  Completion;
               and

        2.1.2  save  in  respect  of the  LPC  Interests  and  LPC,  all  costs,
               damages,   expenses,  losses,  fines  or  penalties  suffered  or
               incurred by the Company or the  Purchaser or its  Affiliates as a
               result of any  prosecutions  commenced or proceedings  taken,  or
               notices served or other formal  enforcement  action between [DATE
               OF SIGNATURE OF FRAMEWORK  AGREEMENT]  1998 and Completion by any
               competent  regulatory  body in connection with the Environment or
               health   and  safety  as  a  result  of  any   breaches   of  any
               Environmental  Laws  related  to the  operation  of  those  Sites
               which are  owned,  occupied  or used by the  Company  at [DATE OF
               SIGNATURE  OF  FRAMEWORK   AGREEMENT]  1998.  "DAMAGES"  in  this
               paragraph  2.1.2  includes  any  capital  expenditure  reasonably
               required to remedy such breaches; and

<PAGE>

    2.2 notwithstanding  sub-paragraphs  2.1 above and 4.1  below,  neither  the
        Seller nor any of its Affiliates  shall be liable under the Indemnity or
        otherwise  to  the  extent  that  such  liability   arises  from  or  is
        attributable  to the failure of the  Purchaser  to comply or procure the
        Company's compliance with the provisions of paragraphs 4.2, 6.1, 6.2, 7,
        8, 9, 10, 12 and 14 of this Schedule.


      3 THE COUNTER INDEMNITY

    3.1 The  Purchaser  undertakes  to the Seller (for the benefit of the Seller
        and each of its  Affiliates)  that,  subject to the  provisions  of this
        agreement, it will indemnify and hold harmless (the "COUNTER Indemnity")
        the  Seller  and  each  of  its  Affiliates  against  all  Environmental
        Liabilities  arising  at or from the  Site(s)  to the  extent  that such
        Environmental Liabilities are as a result of Environmental Contamination
        after Completion.

    3.2 Notwithstanding   sub-paragraph   3.1  above,   the  Purchaser  and  its
        Affiliates shall not be liable to the Seller under the Counter Indemnity
        or  otherwise  to the  extent  that  such  liability  arises  from or is
        attributable  to the failure of the Seller to comply with the provisions
        of  paragraphs  3.3,  4.2,  6.1,  6.2,  7, 8, 9,  10,  12 and 14 of this
        Schedule.

    3.3 The Seller  shall take all  reasonable  steps to avoid or  mitigate  any
        Environmental  Liabilities and potential Environmental Liabilities which
        may give rise to a claim under or in connection with this
        Counter Indemnity, howsoever arising.

    3.4 The  provisions  of  sub-paragraphs  4.2 and 12.1  shall  apply  equally
        mutatis mutandis in respect of the Seller and the Purchaser's  rights or
        obligations in respect of the Counter Indemnity.


      4 LIMITATIONS

        4.1.1  Neither  the  Seller  nor any of its  Affiliates  shall be liable
               under   the   Indemnity   to  the   extent   that   Environmental
               Liabilities have arisen,  been increased,  exacerbated,  enhanced
               or caused as a result of any act or omission  (whether  direct or
               indirect)  of the  Company,  the  Purchaser  or  any  Affiliates,
               employees,   agents  or  contractors   thereof  after  Completion
               (including,   without  limitation,  any  change  of  use  of  the
               Site(s)  including  closure  of all or any part of the  Sites but
               not  including  any  material   change  of  process   within  the
               existing  plant and/or  buildings  or any  material  change to or
               development  of the  business  and  operations  carried on at any
               Site  which  does not  result in any Site or any part of any Site
               ceasing  to be used  for  general  industrial/manufacturing  of a
               type materially similar to the existing Site operation.

        4.1.2  In connection with any Site or part thereof, the use of which had
               substantially   ceased  prior  to  Completion,   nothing  in  the
               provisions  of  paragraph  4.1.1  shall  apply  to  Environmental
               Liabilities  resulting from the  Purchaser's  or its  Affiliates'
               change of activities or demolition or closure thereon, save:

               (i) where  this  was  done  other  than  in  the  conduct  of the
                   Business by the Purchaser or its Affiliates; and

               (ii)so  long  as  and  to  the  extent  that  the   Environmental
                   Liabilities   have   not   otherwise   been   so   increased,
                   exacerbated,  enhanced  or caused as a result of any such act
                   or omission as aforesaid.

        4.1.3  The word  "OMISSION"  as used in this  paragraph  4.1  shall  not
               mean any  failure  by the  Company  or  Purchaser  to  carry  out
               remediation or preventative  action in circumstances  where it is
               not within  their  power to do so or where the  Purchaser  is not
               aware  or  could  not   reasonably   have   been   aware  of  the
               Environmental   Liabilities   in  question   or  where   (without
               prejudice to the  obligations  of the Purchaser  under  paragraph
               5) the  rights  of the  Purchaser  to  bring  a claim  under  the
               Indemnity would be prejudiced as a result thereof.

<PAGE>

    4.2 No  claim  may be  made  for any  Environmental  Liabilities  under  the
        Indemnity  or Counter  Indemnity  to the extent  that any  Environmental
        Liabilities arise:

        4.2.1  as a result  directly or  indirectly of  information  voluntarily
               given,  in the  case of the  Indemnity  by the  Purchaser  or the
               Company  (but only post  Completion  in the case of the  Company)
               or, in the case of the  Counter  Indemnity,  by the Seller  after
               Completion  to a  regulatory  authority  in  circumstances  other
               than  where  there is a  mandatory  reporting  requirement  under
               Environmental  Laws or where  information is given as required in
               the   context   of    applications    for   or    variations   to
               authorisations,   licences  and  other  forms  of   environmental
               consent  required by the Business in the course of the  Company's
               or the  Purchaser's or Seller's  normal  business  activities (as
               appropriate)  or where the other  party has  previously  proposed
               or approved this course of action in writing; and

        4.2.2  save where compelled by law, from any admission of liability by a
               representative of the Purchaser or Seller holding a rank not less
               than that of Senior  Vice  President  in respect of any  clean-up
               which needs to be done, except where the other party has approved
               such  admission in writing such  approval not to be  unreasonably
               withheld or delayed.

    4.3 No claim under the terms of the  Indemnity or Counter  Indemnity for any
        Environmental  Liabilities  shall be valid unless notice has been served
        in  accordance  with the  provisions  of  paragraph 7 and in the case of
        Indemnity,  but not the Counter  Indemnity,  said notice has been served
        within 10 years of Completion.

    4.4 The  Seller's   liability  under  the  Indemnity  shall  be  limited  in
        accordance  with the  provisions  of the Americas  Liability  Agreement,
        except for  sub-clauses  4.1.2 (save for the proviso to sub-clause  4.1)
        and 4.2 of the Americas Liability Agreement, the subject matter of which
        will be governed by the provisions of this Schedule.

    4.5 In the event that the  Indemnitor  (as defined in paragraph  6.1) either
        incurs external charges,  costs and expenses for environmental  services
        or internal charges for its own environmental  services,  in either case
        including but not limited to testing and/or  analytical  services and/or
        contaminated soil disposal facilities, in connection with or in relation
        to any actual or potential Environmental Liabilities under the Indemnity
        or Counter  Indemnity (as  appropriate)  then such external and internal
        charges,  costs and expenses  shall be deemed to be payments  made under
        the  Indemnity  or Counter  Indemnity  (as  appropriate).  Any  internal
        charges shall be made on the same basis as the Indemnitor charges to its
        own business or its Affiliates.

    4.6 It is hereby  expressly  agreed that, save where the Seller has accepted
        liability or becomes  otherwise liable under the terms of the Indemnity,
        all costs  incurred  by the  Purchaser  in  carrying  out  environmental
        analyses and tests of the Site(s) (and its (or their)  surrounds)  shall
        be borne by the  Purchaser,  other  than  costs in the  exercise  of the
        rights and  powers  given to the  Seller by  sub-paragraphs  9.1 and 9.2
        which shall be borne by the Seller unless the Purchaser  becomes  liable
        therefor under the terms of the Counter  Indemnity or unless the parties
        otherwise agree.

    4.7 The Seller shall be liable under the Indemnity for any  asbestos-related
        personal  injury  unless and to the extent that any works carried out by
        the Purchaser or its  Affiliates or the Company after  Completion,  were
        not carried out by a reputable contractor or contractors,  who were duly
        and properly  authorised or approved to undertake such works to at least
        the standards of the relevant  federal,  provincial or other  regulatory
        authorities  published  by or in  operation  (in  accordance  with  good
        industry practice) at all times during the carrying out of such works.

<PAGE>


      5 MITIGATION

        The  Seller and the  Purchaser  shall take all  reasonable  steps  after
        Completion  to avoid or mitigate any  Environmental  Liabilities  and/or
        potential  Environmental  Liabilities  to the  extent  it is  reasonably
        within their respective  powers to do so, which may give rise to a claim
        under or in  connection  with this  Indemnity or Counter  Indemnity,  as
        appropriate, howsoever arising. Such steps will include but shall not be
        limited to:

    5.1 in  the  case  of  the   Purchaser,   carrying  out  (where   reasonably
        practicable)  appropriate  soil tests before  taking any action which is
        likely to cause a material disturbance to soil;

    5.2 in the case of the Purchaser,  where reasonably  practicable carrying on
        its  activities  on the Site(s) so as to minimise  disturbance  to known
        areas of existing or probable soil contamination  (other than deliberate
        removal of such contaminated soil) without incurring abnormal unusual or
        excessive cost in so doing;

    5.3 where  relevant,  (with  the  approval  of  the  other  party  not to be
        unreasonably  withheld  or  delayed)  settling a claim of any party (not
        being an Affiliate of the  Purchaser in the case of the  Indemnity or of
        the Seller in the case of the Counter  Indemnity) which will or may fall
        within the terms of the Indemnity or Counter Indemnity,  as appropriate,
        the costs and expenses  associated  with such settlement (so approved by
        the other party) being deemed to be  Environmental  Liabilities  for the
        purposes  of  this  agreement,  provided  always  that  nothing  in this
        sub-paragraph 5.3 shall oblige the Purchaser or the Seller to enter into
        any settlement which it does not, in its sole discretion, consider to be
        in the best interests of its operations;

    5.4 making  reasonable and timely efforts to pursue claims against any third
        parties  (including  insurers) who may have some liability in respect of
        the matter in  question  under the  Indemnity  or Counter  Indemnity  as
        appropriate  provided  always  that this shall not limit or  restrict or
        operate  in any way as a  pre-condition  to the  rights  to make a claim
        under this Indemnity or Counter Indemnity, as appropriate; and

    5.5 in the case of the Purchaser,  using reasonable endeavours to avoid acts
        or  omissions  of the  nature  described  in  sub-paragraph  4.1 of this
        Schedule.


      6 NOTIFICATION

    6.1 As soon as  reasonably  practicable  after either party becomes aware of
        any actual or potential Environmental Liabilities which may give rise to
        a claim by it under the Indemnity or Counter  Indemnity (the "CLAIMANT")
        (whether or not the Claimant is of the opinion that it has a valid claim
        against the other party under the  Indemnity or Counter  Indemnity  (the
        "INDEMNITOR")),  the Claimant  shall give written  notice thereof to the
        Indemnitor (and  thereafter will use all reasonable  efforts to keep the
        Indemnitor  reasonably  informed of all material  developments  relating
        thereto).  Such written notice shall include  reasonable  details of all
        relevant  matters  relating  to any  actual or  potential  Environmental
        Liabilities.   Thereafter,   the  Claimant  will  promptly   advise  the
        Indemnitor orally of the Claimant's reasonable estimate of the extent of
        and,  where  reasonably  practicable,  the  cost of  remediation  of the
        Environmental  Liabilities,  as a  result  thereof),  provided  that the
        Indemnitor  shall have given the Claimant  written notice of the name of
        its representative to whom such oral communication shall be imparted.

    6.2 Neither  party shall admit,  settle or discharge  any claim or liability
        which might  constitute a claim against the other under the Indemnity or
        Counter Indemnity (as appropriate)  without having first served a notice
        under this  paragraph 6 and given the other a reasonable  opportunity to
        consider the circumstances referred to in the said notice.

<PAGE>

      7 CLAIMS

        In the  event  that the  Claimant  wishes  to make a claim  against  the
        Indemnitor  under the Indemnity or Counter  Indemnity  (as  appropriate)
        then it shall  do so by  giving  notice  in  writing  of the same to the
        Indemnitor  giving  such  details as are then in its  possession  of the
        relevant subject matter of such claim.


      8 CONDUCT

        If any notice is received by either  party under  paragraphs 6 or 7, the
        Claimant shall, if so requested by the Indemnitor,  take all steps which
        are necessary and  reasonable to avoid,  resist,  appeal,  compromise or
        defend any claim and any adjudication in respect thereof (subject to the
        Claimant  being  indemnified  against  all cost and  expenses  which may
        reasonably and necessarily be incurred in connection therewith), and the
        Indemnitor shall (subject to the provisions of this  paragraph),  at its
        request, be allowed to conduct any negotiations,  proceedings or appeals
        incidental  thereto  PROVIDED  ALWAYS  that if the claim  relates  to or
        arises  from a Site which at the time is owned,  occupied or used by the
        Company  and  which  is  operational  at the  date of the  notice  under
        paragraph 7 then the Purchaser  shall have conduct of all  negotiations,
        proceedings or appeals incidental thereto but shall nonetheless keep the
        Seller  fully  informed  of all  material  developments  relating to the
        subject matter of the claims.


      9 SITE ACCESS

        If any notice is received by the Seller under paragraphs 6 or 7:

    9.1 the  Seller  and/or its  agents  and  contractors  shall be free to have
        access  to any  Site(s)  to the  extent  it is  within  the power of the
        Company, the Purchaser or its Affiliates,  during normal business hours,
        and after reasonable prior notice, and, if so required by the Purchaser,
        in the presence of authorised representatives of the Purchaser to assess
        (including  but not limited to  assessment by soil sampling and testing)
        the   extent  of  the   Environmental   Liabilities   and/or   potential
        Environmental  Liabilities and to determine the action required in order
        to remediate such  liabilities  (such actions to be subject to the prior
        agreement of the Purchaser (including as to the action to be taken) such
        agreement not to be unreasonably withheld); and

    9.2 the Purchaser  shall (during normal  business hours) allow the Seller or
        its agents  access to inspect  and take copies of such books and records
        of the  business of the  Company  and/or the  Purchaser  relating to the
        Site(s)  as  may be  necessary  in  connection  with  any  Environmental
        Liabilities and/or potential Environmental Liabilities.

    9.3 The Seller shall exercise  proper care in the exercise of its powers and
        rights  pursuant to this  paragraph 9 and shall  indemnify the Purchaser
        for all  reasonably  incurred  losses or  liabilities  arising  from the
        Seller's failure to do so.


     10 DISCUSSIONS

        Upon either party having given a notice under  paragraphs 6 or 7, either
        the Seller or the Purchaser may request a meeting as soon as practicable
        to  discuss  the matter  (and if either  does so the other  party  shall
        comply  promptly with such request) and,  irrespective  of whether there
        has been any agreement on liability,  each party shall be fully involved
        but (save as  otherwise  agreed  between the parties) not as to make any
        admission or liability  not  permitted by the other  provisions  of this
        Schedule in any discussions and/or  negotiations with any party imposing
        or seeking to impose any Environmental Liabilities.

<PAGE>

     11 DISPUTE RESOLUTION

        Upon either party giving a notice in accordance with paragraph 7, in the
        event  that the Seller and the  Purchaser  are unable to agree  promptly
        upon any factual  matter  relevant to a claim  under this  Indemnity  or
        Counter  Indemnity (as  appropriate) or in the event of any other matter
        being referred to the Experts in accordance  with this Schedule then the
        following provisions of this paragraph 11 shall apply:

   11.1 a reputable  independent  firm of experts (the "EXPERTS") (who shall act
        as experts and not arbitrators) in relation to the Environment  relevant
        to the claim or  potential  claim  (having  at least ten years  relevant
        experience) shall be appointed by mutual agreement of the parties hereto
        (and the  parties  shall each be obliged  to use their  respective  best
        endeavours  to reach  agreement as soon as  practicable)  to resolve any
        factual  matter in dispute  between the parties  but not  including  any
        interpretation  of laws or  regulations  as they  apply to such  factual
        matters or any conclusions regarding  responsibility or liability for or
        in  relation to any factual  matters.  The Experts  shall be offered the
        appointment  within 15 Business Days of the parties reaching such mutual
        agreement  and  shall  be  notified  in  writing  of the  provisions  of
        sub-paragraph   11.7  below.   Failing  such  mutual  agreement  on  the
        appointment of Experts,  the parties shall promptly refer the issue,  at
        their  joint  cost,  to the  President  for the time  being of the Royal
        Institute of Chartered Surveyors in the United Kingdom with instructions
        to  appoint   suitable  Experts  within  14  days  of  receipt  of  such
        instructions;

   11.2 the said Experts shall only be dismissed by the mutual  agreement of the
        parties hereto;

   11.3 both parties shall promptly and simultaneously  exchange with each other
        and  submit  to the  Experts,  and in any event in  accordance  with the
        Experts'  written   directions,   their  arguments  and  submissions  in
        connection  with any matter of fact referred to them in accordance  with
        this paragraph 11;

   11.4 following  receipt by the  Experts of the  written  arguments  and other
        submissions of the parties pursuant to paragraph 11.3, the parties shall
        instruct  the Experts to issue,  as soon as  reasonably  practicable,  a
        formal  written  opinion  pertaining  to the matter of fact  referred to
        them. In any event,  the Experts shall be instructed to present the said
        opinion  within two months after  receiving  the written  arguments  and
        other submissions of the parties pursuant to sub-paragraph 11.3;

   11.5 the  formal  written   opinion  of  the  Experts   issued   pursuant  to
        sub-paragraph  11.4 shall be conclusive in any  proceedings  between the
        parties hereto as to the question of fact so determined;

   11.6 the fees and  expenses  of the  Experts  shall be borne  equally  by the
        Seller and the Purchaser (unless otherwise directed by the Experts); and

   11.7 the Experts,  and any company,  firm,  partnership or other organisation
        with  which the  Experts  are  connected,  shall not be  eligible  to be
        considered  to undertake  any clean-up  work in respect of the claim for
        which they have so acted on or around the Site(s) save where the parties
        hereto  mutually  agree to waive this  provision.  For the  avoidance of
        doubt, either party may withhold such consent in any event.


     12 ACCEPTANCE OF LIABILITY

        In the event that the Seller  admits  that it has any  liability  to the
        Purchaser  under the Indemnity (or where the Seller agrees to accept the
        Purchaser's  claim as falling within the Indemnity  notwithstanding  the
        fact  that no  Environmental  Liability  may at that  point in time have
        arisen):

   12.1 Subject to consulting with and paying  reasonable regard to the views of
        the  Purchaser,  the  Seller  shall  have  the  right  independently  to
        determine  whatever  measures  are  appropriate  in order  to  remediate
        pursuant to  applicable  Environmental  Laws the  subject  matter of the
        claim under the  Indemnity  and  furthermore  the Seller  shall have the
        right  independently  to carry out such  remediation  itself (or through
        suitable  third party agents or  contractors)  provided that in so doing
        the Seller (or its said agents or  contractors)  shall be obliged to use
        reasonable endeavours to avoid causing undue interruption to the conduct
        of the business of the Company and/or its Affiliates;

<PAGE>

   12.2 The Seller and/or its agents and  contractors  shall, in addition to the
        rights of access  provided  for in  paragraph  9 above,  be free to have
        access to the Site(s) if  currently  owned,  leased or, where within the
        power of the Company and its  Affiliates,  during normal  business hours
        after  reasonable prior notice,  and if so required,  in the presence of
        authorised   representatives   of  the  Purchaser,   to  carry  out  the
        remediation  referred to in  sub-paragraph  12.1 above provided that the
        Seller (or its agents or contractors) shall be obliged to use reasonable
        endeavours  to avoid causing  undue  interruption  to the conduct of the
        business of the Company and/or its Affiliates.

   12.3 The Seller shall exercise  reasonable care in the exercise of its powers
        and rights  pursuant to this paragraph 12 and shall exercise  reasonable
        skill,  care and  diligence  in carrying out any works and shall not use
        any materials  which are not in accordance with the  recommendations  of
        relevant  authorities  and codes of practice.  The Seller shall  procure
        that the contractors and consultants  engaged to carry out and advise on
        the works  are  bound by  obligations  in the same  terms of  reasonable
        skill,  care and  diligence as herein  before  mentioned  and  otherwise
        engaged  on  market  terms  at  the  time  and  shall  procure  suitable
        warranties  in accordance  with normal market  practice at the time from
        the contractors  and consultants in favour of the Purchaser.  The Seller
        shall not carry out the works  itself but shall always  engage  external
        contractors and consultants  approved by the Purchaser such approval not
        to be unreasonably withheld or delayed.


     13 STATEMENTS

        In the event of any  circumstances  arising which do or may give rise to
        Environmental  Liabilities  which  may  fall  within  the  terms  of the
        Indemnity or the Counter Indemnity (as appropriate) neither the Company,
        the Purchaser nor the Seller (nor any of their respective Affiliates) to
        the extent  practicable  shall make any public  statements which are not
        required  by law or  the  rules  of any  regulatory  authority  to  make
        regarding such  circumstances  without first  discussing  with the other
        party  and  reaching  written   agreement  (such  agreement  not  to  be
        unreasonably  withheld  or  delayed)  on the  text  of any  such  public
        statement before it is made.


     14 GENERAL

   14.1 Any  information,  records,  or other  material  of one  party  shall be
        treated as strictly  confidential  by the other party except when (a) it
        is  required to be used in order to comply with an order of the court or
        regulatory authority or (b) it is used by the other party to enforce its
        rights under this Schedule or so as to make an insurance  claim provided
        that, in the case of either (a) or (b), disclosure is made in accordance
        with this sub-paragraph  14.1. If either party becomes legally compelled
        (including  by   deposition,   interrogatory,   request  for  documents,
        subpoena, civil investigative demand or similar process) to disclose any
        of the  information,  records,  or other  material  referred  to in this
        sub-paragraph  14.1, the party so compelled shall provide the other with
        prompt prior written  notice of such  requirement  so that the other may
        seek a  protective  order or other  appropriate  remedy.  To the  extent
        lawfully  able to do so, each party  agrees to cooperate in each other's
        efforts to obtain a protective order or other reasonable  assurance that
        confidential  treatment shall be accorded any such information.  If such
        protective order or other remedy is not obtained, the party so compelled
        agrees to disclose  only that portion of the  information,  records,  or
        other  material  which it is advised  by  opinion of outside  counsel is
        legally  required to be disclosed  and to take all  reasonable  steps to
        preserve  the  confidentiality  of the  information,  records,  or other
        material referred to in this sub-paragraph 14.1. Any other disclosure by
        one party of information,  records or materials of the other party shall
        require the prior written  consent of such other party,  which shall not
        be unreasonably withheld or delayed.

<PAGE>

   14.2 The Purchaser's and its Affiliates' and the Seller's and its Affiliates'
        exclusive  remedies in respect of any claims which fall within the scope
        of the  Indemnity  or Counter  Indemnity,  as  appropriate,  shall be in
        accordance  with the provisions of this  Schedule,  and the Purchaser on
        behalf of itself and its Affiliates and the Seller,  on behalf of itself
        and  its  Affiliates,  hereby  waives  all  other  remedies  whether  in
        contract,  tort (including,  for the avoidance of doubt,  negligence) or
        howsoever  otherwise arising which it may have against the Seller or any
        of  its  Affiliates  or the  Purchaser  or  any  of  its  Affiliates  as
        appropriate  at law or in equity in  respect of the  matters  which fall
        within the scope of the  Indemnity or Counter  Indemnities  and, for the
        avoidance of doubt,  if such a claim under this Schedule could also give
        rise to a Warranty  Claim or a claim under any other  provision  of this
        agreement in respect of the same subject  matter,  the  Purchaser or the
        Seller as appropriate may only bring a claim under this Schedule.

   14.3 The Seller  undertakes to  co-operate  with the Purchaser and assist the
        Purchaser in achieving a transfer to the Purchaser (or as it directs) of
        all Environmental Authorisations held by the Seller at Completion.


     15 CO-OPERATION

        The Purchaser  undertakes that wherever  co-operation is required by the
        Company to ensure compliance with the Purchaser's obligations hereunder,
        the  Purchaser  will use its  reasonable  endeavours  to ensure that the
        Company provides the requisite co-operation.






<PAGE>



                                       SCHEDULE 6
                             CONSIDERATION ADJUSTMENT TEXT

                                      (Clause 3.3)

      1 Consideration and Adjustment


        SECTION 1

    (1) In this Schedule 3:

        "A FORM" means,  in relation to the  Company,  the  quarterly  financial
        reports  in the  format  set  forth in  Annex 3 which  are  prepared  in
        accordance   with  the   accounting   policies,   practices   and  other
        requirements  set out or  referred to in ICI's  Controller's  Manuals as
        applied by the Company (with the exception of pensions liabilities which
        are  accounted  for in  accordance  with  FAS  87) and  prepared  at the
        Completion  Date on a basis  consistent with that adopted by the Company
        in the A Form at 31  December  1997 (with the  exception  that  pensions
        liabilities shall be reported in Provisions;  and if the Completion Date
        does  not  fall on the due  date  for the  preparation  of an A Form,  a
        financial  report  prepared on the same basis for the  financial  period
        from the latest date at which an A Form was  prepared to the  Completion
        Date;

        "ACTUAL NET DEBT" means Net Debt as agreed or  determined  in accordance
        with paragraphs (4) to (6) below;

        "ACTUAL  NET  WORKING  CAPITAL"  means  Net  Working  Capital  as at the
        Completion Date as determined under paragraphs (4) to (6) below;

        "ESTIMATED CONSIDERATION" has the meaning given in sub-Clause 3.1;

        "ENTERPRISE VALUE" means US$16,733,000;

        "FINAL CONSIDERATION" has the meaning given in paragraph (3)(a) below;

        "FINAL  COMPLETION  STATEMENT" has the meaning given in paragraph (3)(b)
        below;

        "FINAL STOCKS" means the value of Stocks for the Company at Completion;

        "ICI'S  CONTROLLER'S  MANUALS" means the control manuals in existence at
        14 July 1997 and which are compiled in accordance  with UK GAAP used for
        accounting purposes within the Seller's Group, copies of which have been
        received by the  Purchaser or an Affiliate of the  Purchaser  (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);

        "INITIAL  STOCKS"  means the value of Stocks  for the  Company  as at 28
        February 1998;

        "INTEREST RATE" means LIBOR plus 25 basis points;

        "NET DEBT" means the amount  reported as "NET DEBT" on line 70090 of the
        A Form for the Company as described in ICI's Controller's Manuals which,
        for the avoidance of doubt,  can be either a negative or a  non-negative
        number;

        "NET WORKING CAPITAL" means the aggregate of:

        (a)    Operating Debtors; plus



<PAGE>


        (b)    Stocks  (for the  purposes  of this  definition  meaning  Initial
               Stocks when used for Net Working  Capital as at 28 February  1998
               and  meaning  Final  Stocks  when  used for  Actual  Net  Working
               Capital); less

        (b)    Operating Creditors less than 1 year;

        For the  purposes of (b) the Stocks shall be valued in  accordance  with
        the document headed "STOCKTAKING AND VALUATION PRINCIPLES" in the Agreed
        Form marked "NWC-S";

        "NET WORKING CAPITAL AS AT 28 FEBRUARY 1998" or "NWC28" means, the value
        shown in the column  headed NWC 28 in Section 2 of this Schedule 3 which
        is the amount which the parties  have agreed to  represent  the value of
        Net Working Capital at 28 February 1998 of the Company;

        "OPERATING  CREDITORS  LESS THAN 1 YEAR" means the absolute value of the
        amount  reported as creditors  of the Company  which are external to the
        Company (including without limitation creditors which are members of, or
        other  business  units  within,  the  ICI  Group  as at the  date of the
        relevant A Form) as defined by reference to  "OPERATING  CREDITORS  LESS
        THAN 1 YEAR" on line 70020 of the A Form for the Company as described in
        ICI's Controller's Manuals;

        "OPERATING  DEBTORS"  means debtors of the Company which are external to
        the Company  (including without limitation debtors which are members of,
        or other  business  units  within,  the ICI  Group as at the date of the
        relevant A Form) as defined by reference to "OPERATING  DEBTORS" on line
        70010 of the A Form for the Company as described  in ICI's  Controller's
        Manuals;

        "STOCKS"  means  the  stock  of  fuels,   raw  materials,   ingredients,
        packaging,  office and laboratory supplies,  revenue engineering spares,
        consumable  stores,  work in progress  and  finished  goods owned by the
        Company as  determined  on line  70000 of the A Form for the  Company or
        Business as described in ICI's Controller's Manuals;

    (2)

        (a)    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  in 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  Completion  Date  in
               relation to amounts in the Final Completion Statement.

        (b)    References to the absolute value of a number X shall be construed
               as follows:

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

               (ii)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.

        CALCULATION OF THE FINAL CONSIDERATION

    (3) In relation to this agreement:

        (a)    the Final  Consideration  for the Company  shall be determined by
               the following formula:

               Final Consideration = EV minus AND minus NWC 28 plus ANWC

               Where (in relation to the Company):

               EV = Enterprise Value

               AND = Actual Net Debt

               NWC28 = Net Working Capital as at 28 February 1998

               ANWC = Actual Net Working Capital

<PAGE>

        (b)    After  the   Completion   Date,   the  Seller  shall   prepare  a
               completion  statement  as at  the  Completion  Date  which  shall
               contain a  statement  of the Final  Consideration  in  accordance
               with  paragraph  3(a) above  based on the  Seller's  calculations
               (the  "FINAL   COMPLETION   STATEMENT").   The  Final  Completion
               Statement   shall  be   prepared   using  the   Seller's   normal
               accounting  policies  and  practices as set out or referred to in
               ICI's  Controller's  Manuals  as  applied  by  the  Company  on a
               consistent  basis and  shall be  submitted  by the  Seller to the
               Seller's Auditors for review.

    (4) Within 45 days of the Completion  Date, the Seller shall issue the Final
        Completion  Statement for the Company to the  Purchaser  together with a
        copy of a report by the  Seller's  Auditors  addressed to the Seller and
        substantially  in the  form set out in  Annex 3 to the  effect  that the
        Final  Completion  Statement has been  prepared in accordance  with this
        agreement.  Although it is the  Seller's  responsibility  to prepare the
        Final  Completion  Statement,  the Seller will require the assistance of
        the  employees  of the  relevant  Purchaser  Affiliates  to fulfil  this
        responsibility  and  the  Purchaser  shall  ensure  such  assistance  is
        provided  promptly and at no charge.  Immediately  after delivery of the
        Final  Completion  Statement,  the  Purchaser's  Auditors shall have the
        right,  subject to the Purchaser  delivering to the Sellers'  Auditors a
        signed  letter  in the  form set out in Annex  5, to  review  the  Final
        Completion  Statement and the Seller's  Auditors working papers relating
        to the Final  Completion  Statement.  Within 45 days of  delivery to the
        Purchaser of the Final  Completion  Statement and the Seller's  Auditors
        report (each of which shall be in English) to the Purchaser's designated
        location,  the  Purchaser  shall give notice to the Seller in writing of
        any item or items in the Final  Completion  Statement which they wish to
        dispute and the basis on which they dispute that item or those items and
        the  changes  to the Final  Completion  Statement  which  the  Purchaser
        believes  should be made and the  parties  shall  use  their  reasonable
        endeavors  to resolve  that  dispute.  Any items in respect of which the
        Purchaser does not give such notice will be deemed to have been accepted
        by the Purchaser.  Any written  resolution reached by the parties on any
        disputed item shall be final, conclusive and binding on the parties.

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

    (6) If the  parties  fail to agree on any  element  of the Final  Completion
        Statement within 14 days after the Purchaser has given notice in writing
        to the Seller of any item(s) in the Final Completion Statement which the
        Purchaser  wishes to dispute (in  accordance  with  paragraph (4) 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 sub-Clause 11.1 of this agreement and
        any  amounts  thereby  found  to be due  shall  be paid by the  relevant
        Affiliate not later than 7 days after such final determination.

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

        (a)    an  amount  equal to the  difference  between  (i) the  Estimated
               Consideration and (ii) the Final Consideration; and



<PAGE>


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

        which shall be paid by the Seller  Affiliate to the  Purchaser  (or vice
        versa, as appropriate).

    (8) In this Schedule, references to lines of A Forms have been chosen by the
        Seller 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 to another line reference (if any)
        which corresponds to the matter described or referred to.


        SECTION 2

                                                  VALUES FOR THE PURPOSE OF
                                                   ALLOCATION TO CLASSES OF
                                                             ASSET

                                                  NET                 ADDITIONAL
                                                WORKING                UPLIFT OF
                                  NWC28         CAPITAL           STOCKS TO FAIR
                             CANADIAN $           US$           MARKET VALUE US$

         Americas Business    7,444,000        5,200,000                  62,000
         LPC Business         2,575,000        2,000,000                     Nil





<PAGE>

                                       SCHEDULE 7
                             CANADIAN FINANCIAL INFORMATION

                                      (Clause 1.1)

                                   TCI BALANCE SHEET
                                     AT 28 FEBRUARY
                                          1998


                                            CANADIAN DOLLARS THOUSANDS
                                 AMERICAS
                                 BUSINESS   LPC BUSINESS         TOTAL

         Fixed Assets              12,167              -        12,167

         Investments                    -              -             -

         Stocks                    20,342          4,258        24,600

         Operating Debtors          7,216          1,425         8,641

         TAI Debtor                 2,515              -         2,515

         Operating
         Creditors less
         than 1 year              (22,629)        (1,109)      (23,738)

         TAI Creditor                   -         (1,999)       (1,999)

         Non Operating
         Debtors                        -              -             -

         Non Operating
         Creditors less
         than 1 year               (1,043)             -        (1,043)
                                   18,568          2,575        21,143
                                 --------       --------      --------

         Net Debt                 (20,824)             -       (20,824)

         Provisions                     -              -             -
                                        -
         Deferred Income
                                 --------       --------      --------
                                  (20,824)             0       (20,824)

         Shareholders'                                          41,967
         Equity                                               --------


                                                                21,143
                                                              --------
        Notes:
        1. Operating Debtors at 28 Feb 1998 have been split pro rata to sales
        in January and February 1998.
        2. TAI Debtors/TAI Creditors and TCI Debtors/TCI Creditors net out

<PAGE>





                                       SCHEDULE 8

                                      (Clause 1.7)

        John Collingwood

        Rene Lachance

        John Gush

        Michel Blais

        Guy Gauthier

        Michael Maughan



<PAGE>


                                       SCHEDULE 9
                                      LPC Business



-----------------------------------------------------------------------
                                       AMERICAS
                                       (SULPHATE)
                     LPC BUSINESS      BUSINESS          COMMENTS
-----------------------------------------------------------------------
-----------------------------------------------------------------------
FIXED ASSETS                           All
-----------------------------------------------------------------------
INVESTMENTS          N/A               N/A
-----------------------------------------------------------------------
                                                         - Based on
                                                         actual
                     Stocks                              quantities
                     manufactured by                     of stocks
                     LPC and Kronos                      from each
STOCKS               at Varennes       All other stocks  source
-----------------------------------------------------------------------
                                                         - Based on
                     Sales of                            detailed
                     material                            analysis of
OPERATING DEBTORS    manufactured by                     all open
Trade Debtors}       LPC and Kronos    All other trade   accounts
Intra Group Debtors} at Varennes       debtors           concerned
-----------------------------------------------------------------------
Other operating
debtors                                All
-----------------------------------------------------------------------
                                                         - Based on
OPERATING CREDITORS  Purchases of                        detailed
LESS THAN 1 YEAR     material          All other         analysis of
Trade Creditors}     manufactured by   operating         all open
Intra Group          LPC and Kronos    creditors less    accounts
Creditors}           at Varennes       than 1 year       concerned
-----------------------------------------------------------------------
Other operating
creditors                              All
-----------------------------------------------------------------------
NON OPERATING
DEBTORS/CREDITORS                      All
-----------------------------------------------------------------------
NET DEBT                               All
-----------------------------------------------------------------------
PROVISIONS                             All
-----------------------------------------------------------------------
DEFERRED INCOME                        All
-----------------------------------------------------------------------
                                                         - Calculated
NET ASSETS                                               by difference
-----------------------------------------------------------------------
        NOTES:

      1 Stocks/materials/product   manufactured   by  LPC  includes  items  made
        available to LPC under product swap  arrangements with Kronos's plant at
        Varennes


<PAGE>



                                      SCHEDULE 10
                                  (CLAUSE 7.1(F)(III))











<PAGE>



                                       SIGNATURES





         SIGNED by
         for and on behalf of
         TIOXIDE GROUP LIMITED      }




         SIGNED by
         for and on behalf of
         ICI OMICRON BV             }




        SIGNED by
        for and on behalf of
        [PURCHASER]                }



<PAGE>



                                        ANNEX 1
                             AGREED FORM DEED OF INDEMNITY