<PAGE>   1


                                                                EXHIBIT 10.7











                                      92

<PAGE>   2
                            ASSET PURCHASE AGREEMENT

         THIS ASSET PURCHASE AGREEMENT ("Agreement') is made and entered into as
of this 25th day of March, 1997, by and between CHEMI-TROL CHEMICAL COMPANY, an
Ohio corporation having offices at 2776 C.R. 69, Gibsonburg, Ohio 43431
("Seller"), and TERRA INTERNATIONAL, INC., a Delaware corporation, having an
address of 600 Fourth Street, P.0. Box 6000, Sioux City, IA 51102-6000
("Purchaser").

                                    RECITALS

         WHEREAS, Seller, through its Cory Orchard & Turf Division ("Division")
has been engaged in, among other things, the business of selling wholesale and
retail turf and ornamental chemicals and fertilizer at locations in
Indianapolis, Indiana and Louisville, Kentucky (the "Locations"); and

         WHEREAS, the Seller owns and leases certain real property, rolling
stock, buildings, equipment and inventories at the Locations; and

         WHEREAS, Seller desires to sell and Purchaser desires to purchase
certain Division assets, subject to the terms and conditions hereinafter stated.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, it is hereby agreed as follows:


         1. AGREEMENT TO PURCHASE. On the Closing Date, as hereinafter defined,
and subject to the terms and conditions of this Agreement, Seller shall sell,
convey, grant, assign, transfer and deliver to Purchaser, and Purchaser shall
buy, accept and receive from Seller, all of the Seller's right, title and
interest in and to the following:

                  A.       The real property described in Exhibit A attached
                           hereto, together with all buildings, fixtures and
                           other improvements located thereon and all rights,
                           easements, hereditaments and appurtenances related
                           thereto (collectively the "Real Property").

                  B.       The machinery, equipment, motor vehicles, furniture
                           and fixtures and other personal property listed in
                           Exhibit B and attached hereto (the "Machinery and
                           Equipment").

                  C.       The Seller's customer information, credit files,
                           facility records and all other books and records
                           related to the Business Assets as hereinafter
                           described plus any and all patents, patent
                           applications, and other intangible assets relating to
                           "know-how", proprietary information and customer
                           lists that relate to Seller's Division assets (the
                           "Books and Records"). In addition, Seller shall
                           retain, preserve and maintain all bank and tax
                           records related to the Division or its assets and
                           provide Purchaser access to the same for four (4)
                           years from the date of this Agreement.

                  D.       All trade inventory owned by Seller to be identified
                           prior to closing and added to this Agreement prior to
                           closing as Exhibit C (the "Inventory").

                  E.       The contract and lease rights identified in Exhibit D
                           attached hereto (the "Contract Rights").

         The Real Property, Machinery and Equipment, Books and Records,
Inventory and Contract Rights related to the Division are herein sometimes
called the "Business Assets."



                                      93
<PAGE>   3
          2. CLOSING. Subject to the fulfillment of the closing conditions
contained in this Agreement, the closing (the "Closing") shall take place on
March 25, 1997, or on another mutually agreeable date (the "Closing Date"). The
Seller shall furnish marketable title to the Real Property and shall convey the
property free of liens, encumbrances, easements, restrictions, rights and
conditions of record or known to Seller, other than the following:(a) current
taxes not yet payable and liens arising therefrom, (b) convenants, conditions,
restrictions and public utility easements of record, if any, provided the same
do not render title unmarketable or prevent the present use of the property, (c)
matters which would be disclosed by inspection of the premises or by an accurate
survey of the premises, (d) any matter that a title insurance company would
ordinarily insure against without additional premium, (e) zoning regulations and
local ordinances. Seller shall furnish an owner's title insurance policy,
insuring the title in the amount of the purchase price, issued by a title
insurance company acceptable to the Purchaser. In the event of title objections,
either by Purchaser, Purchaser's attorney or by the title company, Seller shall
have a reasonable time within which to cure such objections. On Seller's failure
to furnish marketable title within a reasonable time, Purchaser may cancel this
Agreement. Conveyance shall be by general Warranty Deed, in proper statutory
form for record, and shall be duly executed and acknowledged so as to convey to
the Purchaser the fee simple title of the Real Property, free from all liens and
encumbrances, except as stated herein.

         Any taxes on the Real Property being transferred hereunder, for the
calendar year 1996, shall be paid by Seller by giving Purchaser a credit at the
time of Closing, unless the Seller shall present acceptable proof that such 1996
taxes have been paid. Any Real Property taxes for the calendar year 1997 shall
be pro-rated to the date of Closing, a credit shall be given Purchaser in such
pro-rated amount, and Purchaser agrees to any such taxes when they become due.

         3. Purchase Price

         The purchase price (the "Purchase Price") for the business Assets shall
be as follows:

                A. Real Property (land,      $1,320,000.00
                    land improvements
                    and buildings)

                B. Machinery and             $  180,000.00
                   Equipment,
                   Books and Records
                   Contract Rights

                C. Inventory (net            To be determined prior to closing
                   of customer               based upon Seller's cost.
                   prepays)

                D. Seller's Accounts         To be determined prior to closing
                   Receivable                based on the value of the
                                             accounts as mutually agreed
                                             by the parties.
                                             (Exhibit F)

         4. PAYMENT OF PURCHASE PRICE. On the Closing Date, Purchaser shall pay
an amount equal to the Purchase Price to Seller. Purchaser shall pay the sales
tax in respect of the transfer of the motor vehicles and shall pay the recording
fees in respect of the recording of the deeds to the Real Property.

          5. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller represents
and warrants to Purchaser that the representations and warranties contained in
this Section 5 are true and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date.

                  A.       Seller is a corporation duly incorporated, validly
                           existing and in good standing under the laws of the
                           State of Ohio. Seller has corporate power and
                           authority to make, execute and deliver this Agreement
                           and to perform its obligations hereunder. The
                           execution, delivery and performance of this Agreement
                           have been duly authorized and approved by all
                           necessary and proper corporate proceedings,
                           including, but not limited to, approval by the Board
                           of Directors of Seller.

                  B.       Since December 31, 1996, there have been no material
                           changes with respect to the condition of the Business
                           Assets, normal wear and tear excepted.




                                      94
<PAGE>   4

                  C.       The Seller has good and Marketable title to the
                           Business Assets, free and clear of all claims, liens,
                           security interests and other encumbrances, except as
                           disclosed to and accepted by Purchaser or as
                           specified herein.


                  D.       There is no litigation, proceeding unpaid judgment or
                           investigation, pending or threatened, against the
                           Division or the Business Assets. There is no
                           litigation, proceeding or investigation, pending or
                           threatened, against the Seller that would, if
                           adversely determined, affect the validity of this
                           Agreement or the ability of the Seller to complete
                           the transactions contemplated hereby.


                  E.       The execution and delivery of this Agreement, and the
                           completion of the transactions contemplated hereby,
                           do not violate or conflict with the articles of
                           incorporation or by-laws of Seller, any law to which
                           Seller is subject or any agreement by which the
                           Seller or the Business Assets are bound. No consent
                           of any third parties or governmental authorities is
                           required to complete the transactions contemplated by
                           this Agreement.


                  F.       The Seller has filed all required tax returns and
                           paid all taxes due or claimed to be due related to
                           the Division and the Business Assets.


                  G.       The Seller has delivered to Purchaser true and
                           complete copies of each contract listed on Exhibits D
                           and G. To Seller's knowledge, with respect to each
                           such contract: (i) the contract is legal, valid,
                           binding, enforceable and in full force and effect
                           (subject to bankruptcy and other laws affecting
                           creditors' rights generally); (ii) no party is in
                           breach or default, and no event has occurred which
                           with notice or lapse of time would constitute a
                           breach or default or permit termination,
                           modification, or acceleration under the contract; and
                           (iii) no party has repudiated any provision of the
                           contract.

                  H.       All improvements located on and the use presently
                           being made of the Real Property owned by the Seller
                           comply in all material respects with (i) all
                           applicable zoning and building code ordinances and
                           (ii) all applicable occupational safety and health
                           standards established by law or regulation under
                           current interpretations.


                  I.       No work has been performed nor any material provided
                           to the Seller during the ninety (90) days preceding
                           Closing which would give rise to any mechanics,
                           materialmen, artisans or other liens.


                  J.       Except for a fee to be paid to McDonald & Company
                           Securities, Inc. (which fee shall be paid by Seller),
                           the Seller has not committed or obligated itself or
                           Purchaser to the payment of any broker's fee or
                           finder's fee or commission in connection with the
                           transactions contemplated by this Agreement.


                  K.       This Agreement has been duly executed and delivered
                           by the Seller and, assuming due execution and
                           delivery by Purchaser, is a valid and binding
                           agreement of Seller, enforceable against Seller in
                           accordance with its terms subject to bankruptcy laws
                           affecting creditor's rights generally.


                  L.       The Seller is solvent and has sufficient assets to
                           discharge its liabilities as they come due.


                  M.       The Business Assets constitute all of the tangible
                           personal property held or used by the Seller in
                           connection with the manufacture, sale and marketing
                           of turf and ornamental fertilizer and chemicals. All
                           buildings and other improvements used by the Seller
                           in the conduct of its business are located entirely
                           on the Real Property described on Exhibit A or on the
                           leased premises in Louisville, Kentucky 13000
                           Middletown Industrial Blvd., Suite J-K and 13005
                           Middletown Industrial Blvd., Suite B ("Leased
                           Premises").


                  N.       Except as set forth on Exhibit I, or in the
                           environmental audits performed by Purchaser, on the
                           date hereof there are no hazardous or toxic materials
                           (as hereinafter defined) located in, on or under the
                           Real Property or the Leased Premises in violation of
                           any applicable law or regulation. Except as set forth
                           on Exhibit I, to the best of Seller's knowledge, on
                           the date hereof there are no subterranean tunnels,
                           cavities, wells, mines, sinkholes, springs or
                           concealed fill in, on or under




                                      95
<PAGE>   5

                           the Real Property or Leased Premises. "Hazardous or
                           toxic materials", as used in this Agreement,shall
                           include the following materials: (i) any "Hazardous
                           waste," as defined by the Resource Conservation and
                           Recovery Act of 1976 (42 U.S.C. Section 6901 et.
                           seq.), as amended from time to time, and regulations
                           promulgated thereunder, (ii) a "hazardous substance"
                           as defined by the Comprehensive Environmental
                           Response Compensation and Liability Act of 1980 (42
                           U.S.C. Section 9601 et. seq.), as amended from time
                           to time, and regulations promulgated thereunder,
                           (iii) asbestos, (iv) petroleum and petroleum based
                           products, flammables, explosives and radioactive
                           materials, (V) chemicals known to cause cancer or
                           reproductive toxicity, (vi) pollutants, (vii)
                           polychlorinated biphenyls, (viii) any substance the
                           presence of which on the Real Property is prohibited
                           by any governmental requirement, and (ix), other than
                           Inventory, any other substance which is declared to
                           be hazardous or toxic under any law or regulation or
                           which, under any governmental law or regulation,
                           requires special handling in its use, collection,
                           storage, treatment, or disposal. The parties agree
                           that Seller's warranties contained in this paragraph
                           5. N. shall cease and be of no further force or
                           effect beginning March 25, 2000.

                  O.       Exhibit F contains a complete and accurate list of
                           all of the accounts receivable of Seller relating to
                           the Business Assets and the amounts owed to Seller by
                           each purchaser. On the Closing Date, Purchaser shall
                           pay Seller the agreed value of the accounts
                           receivable listed on Exhibit F and shall undertake
                           reasonable efforts to collect such accounts. On
                           August 1, 1997, Purchaser shall return to Seller all
                           of Seller's accounts receivable remaining uncollected
                           and Seller shall pay Purchaser, no later than August
                           15, 1997, the value of all accounts remaining
                           uncollected. Purchaser shall not, in its efforts to
                           collect Seller's accounts receivable, take any action
                           which impairs Seller's right to collect the accounts.

                  P.       The Seller is the sole legal and equitable owner of
                           the Real Property and all interests therein, and has
                           the full and exclusive right, power and authority to
                           convey or assign its interest in the Real Property.
                           There are no adverse or other parties in possession
                           of the Real Property or any portion or portions
                           thereof. There are no pending or threatened
                           condemnation, eminent domain or similar proceedings
                           affecting the Real Property or any portion thereof.

         6. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents
and warrants to the Seller that the representations and warranties contained in
this Section 6 are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date.

                  A.       Purchaser is a corporation duly incorporated, validly
                           existing and in good standing under the laws of the
                           State of Delaware and is qualified to do business and
                           in good standing in the State of Indiana. Purchaser
                           has full corporate power and authority to make,
                           execute and deliver this Agreement, and to perform
                           its obligations hereunder. The execution, delivery
                           and performance of this Agreement have been duly
                           authorized and approved by all necessary and proper
                           corporate proceedings.

                  B.       There is no litigation, proceeding or investigation,
                           pending or threatened, against purchaser that would,
                           if adversely determined, affect the validity of this
                           Agreement or the ability of Purchaser to complete the
                           transactions contemplated hereby.

                  C.       The execution and delivery of this Agreement, and the
                           completion of the transactions contemplated hereby,
                           do not violate or conflict with the certificate of
                           incorporation or by-laws of Purchaser, any law to
                           which Purchaser is subject or any agreement by which
                           Purchaser is bound. No consent of any third parties
                           or governmental authorities is required to complete
                           the transactions contemplated by this Agreement.

                  D.       This Agreement has been duly executed and delivered
                           by Purchaser and is a valid and binding agreement of
                           Purchaser, enforceable against purchaser in
                           accordance with its terms.

                  E.       Purchaser has not committed nor obligated itself or
                           the Seller to the payment of any broker's or finder's
                           fee or commission in connection with the transaction
                           contemplated by this Agreement.


                                      96
<PAGE>   6


         7. PAYMENTS RECEIVED FOR UNDELIVERED GOODS . Any payments received from
customers by the Seller for goods which have not been delivered prior to the
date of this Agreement shall be assigned to Purchaser and Purchaser shall assume
the responsibility of delivering the goods ordered by the customer and shall
indemnify and hold Seller harmless from all claims, actions, damages, loss or
expense relating to or arising from Purchaser's failure to perform those
contracts or agreements. The customers who have made prepayments, the amounts of
prepayments and the goods ordered are specified on Exhibit G attached hereto,
and Purchaser shall receive a credit therefor at Closing.


         8. CONDITIONS TO CLOSING

                  A.       PURCHASER'S CONDITIONS. The obligations of
                           Purchaser under this Agreement shall be subject to
                           the fulfillment, on or prior to the Closing Date, of
                           each of the following conditions:

         Seller shall have agreed to indemnify and hold Purchaser harmless from
all claims, actions, damages, loss or expenses relating to or arising from the
Indiana Bulk Sales Act.

                  B.       SELLER'S CONDITIONS. The obligations of the Seller
                           under this Agreement shall be subject to the
                           fulfillment, on or prior to the Closing Date, of each
                           of the following conditions:

                           (1)      The representations and warranties of
                                    Purchaser under the Agreement shall be true
                                    and complete as of the Closing Date.

                           (2)      Purchaser shall have tendered the Purchase
                                    Price payable pursuant to Section 4 of the
                                    Agreement.

         9. DOCUMENTS TO BE PROVIDED AT CLOSING

                  A.       At the Closing, the Seller shall deliver to Purchaser
                           the following:

                           (1)      A warranty deed conveying good and
                                    marketable title to the Real Property.

                           (2)      A bill of sale conveying title to Purchaser
                                    to the Machinery and Equipment, Inventory
                                    and Books and Records.

                           (3)      Certificates of title to the motor vehicles.
                                    Conveyance of title shall be by assignment
                                    duly endorsed on certificates of title.

                           (4)      A certified copy of resolutions by Seller's
                                    Board of Directors authorizing the execution
                                    and performance of this Agreement.

                           (5)      All further conveyances, assignments,
                                    confirmations, satisfactions, releases,
                                    powers of attorney, instruments of further
                                    assurance, approvals, consents and any and
                                    all such further instruments and documents
                                    as may be reasonably necessary, expedient or
                                    proper in the opinion of Purchaser in order
                                    to complete any and all conveyances,
                                    transfers, sales and assignments herein
                                    provided.

                           (6)      Executed and delivered covenants not to
                                    compete by Seller in the form attached
                                    hereto as Exhibit H.

                           (7)      An Assignment and Assumption of Contract
                                    Rights.

                           (8)      Assignment and Assumption of Customer
                                    Prepayments and Assumption of Customer
                                    Orders.




                                      97
<PAGE>   7


                           (9)      Releases of all liens, security interests
                                    and other encumbrances on the Business
                                    Assets.

                           (10)     The Books and Records.

                  B.       Purchaser shall deliver to Seller the sum described
                           in Section 4, less any adjustments thereto under the
                           terms of this Agreement.

         10. DELIVERIES SUBSEQUENT TO CLOSING. The Seller, upon the request of
Purchaser, shall deliver such additional documents, instruments and materials
as may be necessary or advisable in order to carry out the provisions and
purposes of this Agreement or to report the transaction to appropriate
governmental authorities, including additional specific bills of sale and
instruments of assignment.

         11. OTHER. The parties agree to the following:

                  A.       At Closing, Seller's Division business shall cease
                           and Purchaser shall make or have made employment
                           offers to all of Seller's employees listed on Exhibit
                           J. The duties and compensation included in such
                           employment offers shall be in Purchaser's sole
                           discretion. If Seller's employees accept such offers,
                           they shall become at-will employees of Purchaser and
                           no additional rights or guarantees of employment is
                           granted to the employees by Purchaser.

         12. SURVIVAL. All of the respective representations, warranties,
covenants, indemnities, and other agreements of the Seller and Purchaser
hereunder or contained in any certificate or other document given in connection
herewith or contemplated hereby shall survive the Closing Date. The
representation and warranties of the Seller contained in this Agreement or any
document or certificate by or on behalf of the Seller delivered pursuant hereto
shall not be affected or deemed waived by reason of any investigation made by
Purchaser or its representatives.

         13. INDEMNIFICATION. Except as otherwise provided in this Agreement,
Seller shall indemnify and hold Purchaser free and harmless from and against any
actions, suits, proceedings, demands, claims, assessments, judgments,
liabilities, losses, damages, costs or expenses (including reasonable attorneys'
fees) incurred by Purchaser as a result of (a) any breach of any representation,
warranty, covenant or agreement of the Seller under this Agreement or any
agreement or instrument delivered by the Seller pursuant to this Agreement, (b)
the operation of the Business Assets prior to the date of this Agreement, except
to the extent expressly assumed by Purchaser under this Agreement. Purchaser
shall indemnify and hold Seller free and harmless from and against any actions,
suits, proceedings, demands, claims, assessments, judgments, liabilities,
losses, damages, costs or expenses (including reasonable attorneys' fees)
incurred by the Seller as a result of (c) any breach of any representation,
warranty, covenant or agreement of Purchaser under this Agreement or any
agreement or instrument delivered by Purchaser pursuant to this Agreement and
(d) the operation of the Business Assets after closing.

         14. MISCELLANEOUS. No waiver and no modification or amendment of this
Agreement shall be valid unless the same is in writing and signed by the party
against which the enforcement of such modification or amendment is sought. This
Agreement, including all documents, agreements and instruments delivered
pursuant hereto, constitutes the entire agreement between the parties and
supersedes any prior understandings, agreements, or representations by or
between the parties, written or oral, that may have related in any way to the
subject matter hereof. This Agreement shall be binding upon and inure to the
benefit of the parties named herein and their respective successors and
permitted assigns.

         15. NO ASSUMPTION OF LIABILITIES. Except with respect to obligations
(i) arising after the date of this Agreement under the contracts listed on
Exhibits D and G, (ii) prepayments received by Seller before the closing and
assigned to Purchaser and (iii) contracts for the delivery of inventory to be
performed by Purchaser after the closing, Purchaser does not assume or agree to
pay any liabilities, debts or obligations of the Seller. It is specifically
understood that Purchaser is not assuming any of the Seller's employment
contracts or other obligations to the Seller's employees and Seller shall defend
and indemnify Purchaser in respect to all claims or costs brought by employees
of Seller or the Division arising or relating to employment with Seller or the
Division.

         16. NOTICES. All notices, demands, requests and other communications
under this Agreement shall be in writing and shall be deemed properly served if
delivered by hand to the party to whose attention it is directed or if



                                      98
<PAGE>   8


sent by registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

                  A.       If intended for the Seller:

                           Mr. Robert W. Woolf, President
                           Chemi-Trol Chemical Company
                           2776 C.R. 69
                           Gibsonburg, OH 43431

                  B.       If intended for Purchaser:

                           Terra International, Inc.
                           600 Fourth Street
                           P.O. Box 6000
                           Sioux City, IA 51102-6000
                           Attention: General Counsel

or such other address of which any party entitled to receive notice hereunder
designates to the other in writing.

         17. GOVERNING LAW AND JURISDICTION. The validity, meaning and effect of
this Agreement shall be determined in accordance with the laws of the State of
Indiana applicable to contracts made and to be performed in that state.

         18. CAPTIONS. The captions in this Agreement are inserted for
convenience of reference only and in no way define, describe or limit the scope
or intent of this Agreement or any of the provisions hereof.

         19. ASSIGNABILITY. Neither this Agreement nor the right to receive any
payment from Purchaser hereunder shall be assignable without prior written
consent of Purchaser, and without such consent, there shall be no right to
designate a payee of such proceeds. Any attempt at assignment without such
consent shall be void.

         20. SEVERABILITY. Should any part or provision contained in this
Agreement be rendered or declared invalid by reason of any existing or
subsequently enacted legislation or by any decree of a court of competent
jurisdiction, the remaining provisions shall nevertheless remain in full force
and effect to the maximum extent permitted by law.

         21. COUNTERPARTS. This Agreement may he executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.


CHEMI-TROL CHEMICAL COMPANY                 TERRA INTERNATIONAL, INC.


By:    /s/ Robert W. Woolf                  By:    /s/ Mark A. Kalafut
      --------------------                        --------------------
Name:  Robert W. Woolf                      Name:  Mark A. Kalafut
      --------------------                        --------------------
Title: President                            Title: Vice President
      --------------------                        --------------------



                                      99

<PAGE>   9


                          SCHEDULE AND EXHIBIT SUMMARY

        Exhibit A                Real Property

        Exhibit B                Machinery, Rolling Stock and Equipment

        Exhibit C                Inventory

        Exhibit D                Contract Rights

        Exhibit E                Allocations of Purchase Price

        Exhibit F                List of Accounts Receivable

        Exhibit G                Prepayments by Customers and Items Purchased

        Exhibit H                Covenant Not to Compete

        Exhibit I                Exceptions to Environmental Representations and
                                 Warranties

        Exhibit J                Employee List








                                     100