EXHIBIT 10.17










                       ASSET AND STOCK PURCHASE AGREEMENT



                                     Between

                         AMCOL INTERNATIONAL CORPORATION

                                       and

                             BASF AKTIENGESELLSCHAFT



                             Dated November 22, 1999

* An asterisk  represents  certain material which has been omitted pursuant to a
request  for  confidential  treatment  filed with the  Securities  and  Exchange
Commission. Such omitted material has been filed separately with the SEC.

<PAGE>
TABLE OF CONTENTS

Section

<TABLE>
<CAPTION>
                                                               ARTICLE I
                                                              DEFINITIONS

<S>           <C>                                                                                                <C>
  1.01.       Certain Defined Terms...............................................................................2

                                                              ARTICLE II
                                                           PURCHASE AND SALE
  2.01.       Purchase and Sale of the Shares....................................................................13
  2.02.       Assets to be Sold..................................................................................13
  2.03.       Assumption and Exclusion of Liabilities............................................................15
  2.04.       Purchase Price; Allocation of Purchase Price.......................................................17
  2.05.       Closing............................................................................................18
  2.06.       Closing Deliveries by Parent.......................................................................18
  2.07.       Closing Deliveries by the Purchaser................................................................18
  2.08.       Statement of Working Capital.......................................................................19

                                                              ARTICLE III
                                               REPRESENTATIONS AND WARRANTIES OF PARENT
  3.01.       Organization, Authority and Qualification of the Sellers...........................................21
  3.02.       Organization, Authority and Qualification of the Company and SAP Thai..............................21
  3.03.       Capital Stock of the Company and SAP Thai; Ownership of the Shares.................................22
  3.04.       Corporate Books and Records........................................................................23
  3.05.       No Conflict........................................................................................23
  3.06.       Governmental Consents and Approvals................................................................23
  3.07.       Financial Statements...............................................................................23
  3.08.       No Undisclosed Liabilities.........................................................................24
  3.09.       Receivables........................................................................................24
  3.10.       Inventories........................................................................................25
  3.11.       Conduct in the Ordinary Course; Absence of Certain Changes,
                  Events and Conditions..........................................................................25
  3.12.       Litigation.........................................................................................27
  3.13.       Compliance with Laws...............................................................................28
  3.14.       Environmental Matters..............................................................................28
  3.15.       Material Contracts.................................................................................30
  3.16.       Intellectual Property..............................................................................31
  3.17.       Real Property......................................................................................34
  3.18.       Tangible Personal Property.........................................................................36
  3.19.       Assets.............................................................................................37
  3.20.       Employee Benefit Matters...........................................................................37
  3.21.       Labor Matters......................................................................................42
<PAGE>
Section                                                                                                        Page

  3.22.       Key Employees......................................................................................43
  3.23.       Taxes..............................................................................................43
  3.24.       Insurance..........................................................................................45
  3.25.       Brokers............................................................................................47
  3.26.       Disclaimer.........................................................................................47
  3.27.       Disclosure Schedule................................................................................47

                                                              ARTICLE IV
                                            REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
  4.01.       Organization and Authority of the Purchaser........................................................47
  4.02.       No Conflict........................................................................................48
  4.03.       Governmental Consents and Approvals................................................................48
  4.04.       Investment Purpose.................................................................................48
  4.05.       Litigation.........................................................................................48
  4.06.       Purchaser Financial Statements.....................................................................49
  4.07.       Brokers............................................................................................49
  4.08.       Disclaimer.........................................................................................49

                                                               ARTICLE V
                                                         ADDITIONAL AGREEMENTS
  5.01.       Conduct of Business Prior to the Closing...........................................................49
  5.02.       Access to Information..............................................................................50
  5.03.       Confidentiality....................................................................................51
  5.04.       Stockholders' Meeting..............................................................................51
  5.05.       Proxy Statement....................................................................................52
  5.06.       Regulatory and Other Authorizations; Notices and Consents..........................................52
  5.07.       Notice of Developments.............................................................................54
  5.08.       No Solicitation or Negotiation.....................................................................54
  5.09.       Use of Intellectual Property.......................................................................55
  5.10.       Non-Competition....................................................................................56
  5.11.       Release of Indemnity Obligations...................................................................57
  5.12.       Termination of Intercompany Agreements.............................................................57
  5.13.       Transition Services Agreement......................................................................57
  5.14.       CETCO Supply Agreement.............................................................................58
  5.15.       Acrylic Acid Supply Agreement......................................................................58
  5.16.       License Agreement..................................................................................58
  5.17.       SAP Subleases......................................................................................58
  5.18.       Product/Material Rebates...........................................................................58
  5.19.       ION Exchange License Agreement.....................................................................58
  5.20.       Mixed-Use Assets...................................................................................58
  5.21.       Termination of SAP Indebtedness....................................................................59
<PAGE>
Section                                                                                                        Page

  5.22.       Termination of the Celanese Supply Agreement.......................................................59
  5.23.       Uncashed Cheques...................................................................................59
  5.24.       Access to Insurance................................................................................59
  5.25.       Patent Opinions....................................................................................60
  5.26.       Thai Facility......................................................................................60
  5.27.       * Obligations......................................................................................60
  5.28.       * Regional Assistance Grants.......................................................................60
  5.29.       Thai Facility Construction Contracts...............................................................61
  5.30.       Further Action.....................................................................................61

                                                              ARTICLE VI
                                                           EMPLOYEE MATTERS
  6.01.       Transferred Employees..............................................................................61
  6.02.       Severance Obligations..............................................................................61
  6.03.       Employee Benefit Plans.............................................................................62
  6.04.       Pension Plans......................................................................................63
  6.05.       U.S. Employee Information..........................................................................64
  6.06.       Workers' Compensation Obligation for U.S. Transferred Employees....................................64
  6.07.       Provisions Relating to U.K. Employees..............................................................64
  6.08.       Provisions Relating to Thai Employees..............................................................65
  6.09.       Retained Obligations of Parent.....................................................................65
  6.10.       Employee Stock Options.............................................................................66

                                                              ARTICLE VII
                                                              TAX MATTERS
  7.01.       Indemnity..........................................................................................67
  7.02.       Returns and Payments...............................................................................68
  7.03.       Contests...........................................................................................69
  7.04.       Time of Payment....................................................................................70
  7.05.       Cooperation and Exchange of Information............................................................70
  7.06.       Conveyance Taxes...................................................................................71
  7.07.       Section 338 Election...............................................................................71
  7.08.       Miscellaneous......................................................................................72

                                                             ARTICLE VIII
                                                         CONDITIONS TO CLOSING
  8.01.       Conditions to Obligations of Parent................................................................73
  8.02.       Conditions to Obligations of the Purchaser.........................................................74
<PAGE>
Section                                                                                                        Page

                                                              ARTICLE IX
                                                            INDEMNIFICATION
  9.01.       Survival of Representations and Warranties.........................................................77
  9.02.       Indemnification by Parent..........................................................................77
  9.03.       Indemnification by the Purchaser...................................................................80
  9.04.       Indemnification Procedures.........................................................................81
  9.05.       Limits on Indemnification..........................................................................82
  9.06.       Waiver of Other Remedies...........................................................................83

                                                               ARTICLE X
                                                        TERMINATION AND WAIVER
  10.01.      Termination........................................................................................83
  10.02.      Effect of Termination..............................................................................85
  10.03.      Fees and Expenses..................................................................................85

                                                              ARTICLE XI
                                                          GENERAL PROVISIONS
  11.01.      Expenses...........................................................................................86
  11.02.      Notices............................................................................................86
  11.03.      Public Announcements...............................................................................87
  11.04.      Headings...........................................................................................88
  11.05.      Severability.......................................................................................88
  11.06.      Entire Agreement...................................................................................88
  11.07.      Assignment.........................................................................................88
  11.08.      Third Party Beneficiaries..........................................................................88
  11.09.      Amendment..........................................................................................88
  11.10.      Waiver.............................................................................................88
  11.11.      Governing Law......................................................................................89
  11.12.      Counterparts.......................................................................................89
  11.13.      Specific Performance...............................................................................89
</TABLE>
<PAGE>
EXHIBITS

Exhibit 1.01               -          Other Sellers
Exhibit 1.01(a)            -          SAP Thai Shareholders
Exhibit 1.01(b)            -          Executive Officers of the Other Sellers
Exhibit 1.01(c)            -          Managers/Persons with Knowledge
Exhibit 1.01(d)            -          SAP Real Property
Exhibit 1.01(e)            -          Thai Recordings
Exhibit 2.04(b)            -          Purchase Price Allocation
Exhibit 2.08               -          Working Capital
Exhibit 5.02               -          Access to Information
Exhibit 5.10(c)            -          Certain Employees
Exhibit 5.11               -          Release of Indemnity Obligations
Exhibit 5.12               -          Continuing Intercompany Agreements
Exhibit 5.13               -          Transition Services Agreement
Exhibit 5.14               -          CETCO Supply Agreement
Exhibit 5.15               -          Acrylic Acid Supply Agreement
Exhibit 5.16               -          License Agreement
Exhibit 5.17               -          SAP Subleases
Exhibit 5.19               -          ION Exchange License Agreement
Exhibit 5.26               -          Definition of Mechanically Complete
Exhibit 5.27               -          * Obligations
<PAGE>
     ASSET AND STOCK  PURCHASE  AGREEMENT  dated November 22, 1999 between AMCOL
International   Corporation,   a  Delaware  corporation  ("Parent"),   and  BASF
Aktiengesellschaft,  a  corporation  organized  under the laws of  Germany  (the
"Purchaser").

                              W I T N E S S E T H:

     WHEREAS,  Parent and its Subsidiaries (as defined herein) have been and are
engaged in various businesses,  including,  without limitation,  the business of
researching, developing,  manufacturing,  marketing, distributing, supplying and
selling   Superabsorbent   Polymers  (as  defined  herein)  and  other  products
comprising Superabsorbent Polymers (such business being, the "SAP Business") (it
being understood and agreed that the SAP Business does not include the Poly-Pore
Business (as defined herein));

     WHEREAS,  the  Purchaser  wishes to acquire the SAP  Business  conducted by
Parent,  its  subsidiaries,  Chemdal  Corporation,  a Delaware  corporation (the
"Company"),  and Chemdal Asia Ltd. (Thailand),  a Thai corporation ("SAP Thai"),
and the other sellers  listed on Exhibit 1.01 hereto (such other sellers  listed
on Exhibit 1.01 being, the "Other Sellers";  and the Other Sellers together with
Parent being, the "Sellers"; any of the Sellers individually being, a "Seller");

     WHEREAS,  Chemdal  International  Corporation,  a Delaware  corporation and
wholly owned subsidiary of Parent ("Chemdal International Sub"), owns all of the
issued and outstanding  shares (the "Company Shares") of common stock, $0.01 par
value per share (the "Company Common Stock"), of the Company;

     WHEREAS,  Chemdal Holdings B.V., a Netherlands corporation and wholly owned
subsidiary of Parent  ("Chemdal  Netherlands  Sub"),  and the Persons  listed on
Exhibit 1.01(a) hereto own all of the issued and outstanding  ordinary shares of
SAP Thai (the "Thai  Shares";  and the Thai  Shares  together  with the  Company
Shares being, the "Shares");

     WHEREAS,  Parent wishes to sell, and to cause the Other Sellers to sell, to
the  Purchaser,  and the Purchaser  wishes to purchase from Parent and the Other
Sellers,  the SAP Business  and the Shares,  as  applicable,  upon the terms and
subject to the conditions set forth herein;

     NOW, THEREFORE,  in consideration of the premises and the mutual agreements
and covenants  hereinafter  set forth,  the Purchaser and Parent hereby agree as
follows:

                                    ARTICLE I

                                   DEFINITIONS

     SECTION  1.01.  Certain  Defined Terms (a) As used in this  Agreement,  the
following terms shall have the following meanings:

     "Action"  means any claim,  action,  suit,  arbitration or proceeding by or
before any Governmental Authority.

     "Affiliate"  means, with respect to any specified Person,  any other Person
that directly,  or indirectly through one or more intermediaries,  controls,  is
controlled by, or is under common control with, such specified Person.

     "After-Tax  Basis"  means,  with  respect to any  payment to be received or
accrued by any  Person,  the amount of such  payment  supplemented  by a further
payment or  payments  (which  will be payable  simultaneously  with the  initial
payment  or, in the event that Taxes  resulting  from the  receipt or accrual of
such initial payment are not payable for the year of receipt or accrual,  at the
time or  times  that  such  Taxes  become  payable)  so that the sum of all such
initial and supplemental  payments,  after deduction of all Taxes imposed by any
taxing authority in respect of or
<PAGE>
attributable to the receipt or accrual of such initial and supplemental payments
(whether or not such Taxes are payable for the year of receipt or accrual),  and
after taking into account the net present  value of any Tax benefit  realized by
such  Person  with  respect to the loss or other  amount  that gave rise to such
initial  payment (using a discount rate of 10%),  will be equal to the amount of
the initial payment to be so received or accrued.

     "Agreement"  or "this  Agreement"  means  this  Asset  and  Stock  Purchase
Agreement  dated November 22, 1999 between  Parent and the Purchaser  (including
the Exhibits hereto and the Disclosure  Schedule) and all amendments hereto made
in accordance with the provisions of Section 11.09.

     "Assumption  Agreements" means the Assumption  Agreements to be executed by
the Purchaser or certain of its designated Affiliates on the Closing Date.

     "Bills of Sale" means the Bill of Sale to be  executed by Parent,  the Bill
of Sale to be executed by Chemdal Limited (U.K.),  a United Kingdom  corporation
and a wholly owned Subsidiary of Parent ("Chemdal U.K."),  and the Bills of Sale
to be executed  by any other  Persons  selling  assets to the  Purchaser  or its
designated Affiliates hereunder,  in each case, on the Closing Date; which Bills
of Sale  shall be  consistent  in all  respects  with,  and will not  impose any
liabilities  or  obligations  other than those imposed by, this Agreement or any
applicable Law.

     "Board"  means the board of directors of Parent or the  executive  board of
directors of the Purchaser, as applicable.

     "Business Day" means any day that is not a Saturday,  a Sunday or other day
on which banks are required or authorized by Law to be closed in The City of New
York.

     "Business  Intellectual Property" means all Intellectual Property in and to
which any Seller holds,  or has a right to hold,  any right,  title or interest,
and all Intellectual  Property  licensed or sublicensed to a Seller from a third
party,  in each case,  used primarily in,  developed  primarily for, or relating
primarily  to,  the  SAP  Business,  including  the  ION  Exchange  Intellectual
Property.

     "Code" means the Internal Revenue Code of 1986, as amended through the date
hereof.

     "Company  Intellectual  Property" means all Intellectual Property in and to
which the Company holds,  or has a right to hold, any right,  title or interest,
and all  Intellectual  Property  licensed or  sublicensed  to the Company from a
third party,  in each case,  used  primarily  in,  developed  primarily  for, or
relating primarily to, the SAP Business, including the ION Exchange Intellectual
Property.

     "control"  (including the terms  "controlled  by" and "under common control
with"),  with respect to the relationship  between or among two or more Persons,
means the possession,  directly or indirectly or as trustee or executor,  of the
power to direct or cause the direction of the affairs or management of a Person,
whether through the ownership of voting securities,  as trustee or executor,  by
contract or otherwise, including, without limitation, the ownership, directly or
indirectly,  of securities  having the power to elect a majority of the board of
directors or similar body governing the affairs of such Person.

     "Disclosure  Schedule" means the Disclosure Schedule attached hereto, dated
as of the date hereof, and forming a part of this Agreement.

     "Encumbrance"  means  any  security  interest,   pledge,   mortgage,   lien
(including,   without   limitation,   environmental  and  Tax  liens),   charge,
encumbrance,  written adverse claim,  preferential arrangement or restriction of
any kind,  including,  without  limitation,  any restriction on the use, voting,
transfer,  receipt of income or other  exercise of any  attributes of ownership,
except for any Encumbrance  arising from the  transactions  contemplated by this
Agreement or any action by the Purchaser.

     "Environment"  means surface waters,  groundwater,  surface water sediment,
soil, subsurface strata, ambient air and any other environmental medium.
<PAGE>
     "Environmental  Claims" means any and all Actions,  suits, demands,  demand
letters,  claims,  liens,  notices of  non-compliance  or violation,  notices of
liability or potential liability, investigations, proceedings, consent orders or
consent   agreements   relating  in  any  way  to  any  Environmental  Law,  any
Environmental  Permit or any  Hazardous  Material  or arising as a result of the
presence of gases occurring naturally, geologically or otherwise.

     "Environmental  Law" means any applicable Law, rule or regulation,  in each
case  in  effect  and  as  amended  as of  the  Closing,  and  any  judicial  or
administrative  interpretation thereof, including any judicial or administrative
order,  consent  decree or judgment,  relating to pollution or protection of the
Environment,  health,  safety  or  natural  resources  or to the use,  handling,
transportation,  treatment, storage, disposal, release or discharge of Hazardous
Materials; provided, however, that the term Environmental Law shall also include
the U.K. Environment Act of 1995, as amended.

     "Environmental  Permit" means any permit (or permit application pursuant to
which  comparable  operations may be conducted in compliance with  Environmental
Law), approval,  identification  number,  license or other written authorization
required  to  operate  the SAP  Business  or the SAP  Real  Property  under  any
applicable Environmental Law.

     "Governmental Authority" means any United States federal, state or local or
any non-U.S. government,  governmental,  regulatory or administrative authority,
state enterprise,  agency or commission or any court,  tribunal,  or judicial or
arbitral body.

     "Governmental Order" means any order, writ, judgment,  injunction,  decree,
stipulation,  determination  or  award  entered  by  or  with  any  Governmental
Authority.

     "Hazardous   Materials"   means  (a)  petroleum  and  petroleum   products,
by-products or breakdown products,  radioactive  materials,  asbestos-containing
materials and polychlorinated biphenyls, and (b) any other chemicals,  materials
or substances regulated as toxic or hazardous or as a pollutant,  contaminant or
solid waste, in each case, as regulated under any applicable Environmental Law.

     "HSR Act" means the Hart-Scott-Rodino  Antitrust  Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.

     "Indebtedness"  means, with respect to any Person,  (a) all indebtedness of
such Person, whether or not contingent,  for borrowed money, (b) all obligations
of such Person for the deferred purchase price of property or services,  (c) all
obligations  of such  Person  evidenced  by notes,  bonds,  debentures  or other
similar  instruments,   (d)  all  indebtedness  created  or  arising  under  any
conditional  sale or other title  retention  agreement  with respect to property
acquired by such Person (even though the rights and remedies of Parent or lender
under such agreement in the event of default are limited to repossession or sale
of such  property),  (e) all  obligations  of such Person as lessee under leases
that have been or should be, in accordance  with U.S. GAAP,  recorded as capital
leases,  (f) all  obligations,  contingent  or  otherwise,  of such Person under
acceptance,  letter of credit or similar  facilities,  (g) all  Indebtedness  of
others  referred  to in clauses (a)  through  (f) above  guaranteed  directly or
indirectly in any manner by such Person, and (h) all Indebtedness referred to in
clauses  (a)  through  (f) above  secured  by (or for  which the  holder of such
Indebtedness has an existing right,  contingent or otherwise,  to be secured by)
any  Encumbrance  on  property  (including,  without  limitation,  accounts  and
contract  rights) owned by such Person,  even though such Person has not assumed
or become liable for the payment of such Indebtedness.

     "Indemnified  Products" means any  Superabsorbent  Polymer (i) manufactured
prior to the Closing Date by the Sellers,  SAP Thai or the Company,  and/or (ii)
manufactured  subsequent to the Closing Date by the Purchaser in the same manner
as  manufactured  by the Sellers,  SAP Thai or the Company  prior to the Closing
Date;  provided,  however,  that (A) Indemnified Products shall also include any
Superabsorbent  Polymers  that  are  not  manufactured  in the  same  manner  as
manufactured  by the Sellers,  SAP Thai or the Company prior to the Closing Date
to the extent  any  difference  between  the  method of  manufacture  (including
processes and ingredients)  employed by a Purchaser  Indemnified Party after the
Closing Date and the method of manufacture used by the Sellers,  SAP Thai or the
Company  prior to the  Closing  Date is not the cause of  infringement,  and (B)
Indemnified  Products shall not include any Superabsorbent  Polymers (whether or
not  evaluated  by Parent  and/or one of the Sellers)  (x)  manufactured  by the
Purchaser prior to the Closing Date, or (y)  manufactured by the Purchaser after
the Closing Date to the extent
<PAGE>
that such products and  processes  are not directly  related to the SAP Business
acquired  by the  Purchaser  and  its  designated  Affiliates  pursuant  to this
Agreement.

     "Intellectual  Property" means United States,  international,  and non-U.S.
(i) patents and patent applications, (ii) registered and unregistered trademarks
and service  marks,  including,  without  limitation,  the  goodwill  associated
therewith,  (iii) registered and unregistered copyrights,  and (iv) confidential
and proprietary information,  including,  without limitation,  trade secrets and
know-how.

     "Inventories"   means   all   inventory,   merchandise,   finished   goods,
work-in-progress,  raw materials,  repair parts and supplies maintained, held or
stored for use in the SAP Business by or on behalf of the  Company,  SAP Thai or
the Sellers and any prepaid deposits for any of the same.

     "ION  Exchange   Intellectual   Property"   means  the   following   patent
applications,  together  with  any  patents  issuing  therefrom,  including  all
divisionals, continuations, continuations-in-part, reissues, reexaminations, and
global  counterparts  thereto,   together  with  the  proprietary   information,
know-how,  trade secrets,  data,  processes and formulae relating to the claimed
subject matter described therein, existing as of the Closing Date: *

     "IRS" means the Internal Revenue Service of the United States.

     "Law" means any federal, state, local or non-U.S.  statute, law, ordinance,
regulation, rule, code, order, other requirement or rule of law.

     "Liabilities" means any and all debts, liabilities and obligations, whether
accrued or fixed, absolute or contingent,  matured or unmatured or determined or
determinable,  including,  without  limitation,  those  arising  under  any  Law
(including, without limitation, any Environmental Law), Action, investigation or
Governmental Order and those arising under any contract,  agreement,  commitment
or undertaking.

     "Licensed  Intellectual  Property" means all Seller  Intellectual  Property
licensed to the Purchaser or one or more of its designated  Affiliates  pursuant
to Section 5.16 of this Agreement.

     "Material Adverse Effect" means any change or effect that (i) is reasonably
likely to be materially adverse to the business,  financial condition or results
of operations of the SAP Business, taken as a whole, or (ii) when taken together
with all other adverse changes,  effects or exceptions that are within the scope
of the  representations and warranties made by the Sellers in this Agreement and
which  are  not  individually  deemed  to have a  Material  Adverse  Effect,  is
reasonably likely to be materially adverse to the business,  financial condition
or results of operations of the SAP Business,  taken as a whole,  other than any
change,  effect,  event or occurrence to the extent  arising from or relating to
(x) actions taken pursuant to the obligations of the parties expressly set forth
in  this  Agreement,  or (y)  the  United  States,  the  global  economy  or the
securities market in general, or the Superabsorbent Polymer industry in general;
provided,  however,  that the SAP Business,  taken as a whole, is not materially
disproportionately  affected,  as  compared  to other  Persons  engaged  in such
industry, by such change, effect, event or occurrence.

     "* Patents"  means any patent  claiming  priority from *, together with all
worldwide counterparts thereto, including continuations,  continuations-in-part,
divisionals,  reissues and reexaminations  thereof,  issued either (i) as of the
Closing  Date or (ii) after the  Closing  Date,  provided  that the claim of any
patent  that  issued  after  the  Closing  Date  which  forms  the  basis of any
infringement claim or assertion of infringement against a Purchaser  Indemnified
Party is not broader in scope (in respect of a material claim  limitation)  than
any claim of any patent  claiming  priority  from the * issued as of the Closing
Date.

     "Offsite  Environmental  Liabilities"  means any  Liabilities  pursuant  to
Environmental Law that arise from the transportation, or arrangement thereof, on
or before the Closing  Date,  of any  Hazardous  Material  generated at SAP Real
Property to a site not at any time owned or operated by the  Company,  SAP Thai,
the Sellers  (with  respect to the SAP  Business)  or the SAP  Business  for the
purpose of disposal of such Hazardous Material at such site; provided,  however,
that such term shall not mean the Release of any Hazardous Material from the SAP
Real Property
<PAGE>
or any other  property at any time owned or operated by the  Company,  SAP Thai,
the Sellers  (with  respect to the SAP Business) or the SAP Business to any area
surrounding or in the vicinity of such property.

     "Parent's  Accountants"  means KPMG LLP,  the  independent  accountants  of
Parent.

     "Parent's Knowledge" means the actual knowledge of (i) any of the executive
officers of Parent who will not become  employees of Purchaser or its Affiliates
following the Closing pursuant to this Agreement,  and (ii) any of the executive
officers of the Other Sellers listed on Exhibit 1.01(b) attached hereto who will
not become  employees  of  Purchaser  or its  Affiliates  following  the Closing
pursuant  to this  Agreement,  in each case,  after  making  due  inquiry of the
Persons listed on Exhibit 1.01(c) attached hereto.

     "Permitted  Encumbrances"  means  such  of the  following  as to  which  no
enforcement,  collection,  execution,  levy or foreclosure proceeding shall have
been commenced:  (a) liens for Taxes,  assessments and  governmental  charges or
levies  not yet due and  payable  (i) which are not in excess of  $50,000 in the
aggregate or (ii) which are disclosed in the  Agreement,  disclosed or reflected
on the Financial  Statements  (as defined  below) or included in the  Disclosure
Schedule;  (b) Encumbrances  imposed by Law, such as materialmen's,  mechanics',
carriers',  workmen's and  repairmen's  liens and other similar liens arising in
the ordinary course of business  securing  obligations  that (x) are not overdue
for a period of more than 30 days and (y) are not in  excess of  $25,000  in the
case of a  single  property  or  $150,000  in the  aggregate  at any time or are
disclosed in the Agreement,  disclosed or reflected on the Financial  Statements
(as  defined  below) or  included  in the  Disclosure  Schedule;  (c) pledges or
deposits  to secure  obligations  under  workers'  compensation  Laws or similar
legislation or to secure public or statutory  obligations;  and (d) minor survey
exceptions,  reciprocal easement agreements and other customary  encumbrances on
title  to real  property  that  (i) were not  incurred  in  connection  with any
Indebtedness,  (ii) do not  render  title  to the  property  encumbered  thereby
unmarketable  and (iii) do not,  individually  or in the  aggregate,  materially
adversely affect the use of such property in the manner being currently utilized
by Parent.

     "Person" means any individual, partnership, firm, corporation, association,
trust,  unincorporated organization or other entity, as well as any syndicate or
group that would be deemed to be a person under Section 13(d)(3) of the Exchange
Act.

     "Poly-Pore  Business"  means  the  business  of  researching,   developing,
manufacturing, marketing, distributing, supplying and selling of microporus, oil
and/or water sorbent polymers capable of entrapping solids and liquids,  wherein
such polymers, their method of manufacture or use meet all of the limitations of
one or  more  claims  of  U.S.  Patent  Nos.  5,677,407;  5,830,967;  5,837,790;
5,608,005;   5,777,054;   5,712,358;   5,834,577;   5,830,960;   5,955,552;  and
divisionals,   continuations,   continuations-in-part,   reissues,   and  global
counterparts thereto  (collectively being, the "Poly-Pore  Patents"),  including
the Poly-Pore Patents and the proprietary information,  know-how, trade secrets,
data,  processes,  and formulae relating to the claimed subject matter described
in the Poly-Pore Patents.

     "Purchase  Price Bank Account" means a bank account in the United States to
be  designated  by Parent in a written  notice to the  Purchaser  at least  five
Business Days before the Closing.

     "Purchaser's  Accountants"  means  Deloitte & Touche LLP,  the  independent
accountants of the Purchaser.

     "Receivables"  means  any and all  accounts  receivable,  notes  and  other
amounts receivable from third parties, including, without limitation, customers,
arising from the conduct of the SAP Business before the Closing Date, whether or
not in the ordinary course,  together with all unpaid financing  charges accrued
thereon;  provided,  however,  that the term  shall not  include  any  rights to
refunds  for Taxes for any period,  or any  portion of any period,  ending on or
prior to the Closing Date.

     "Regulations"   means  the  Treasury   Regulations   (including   Temporary
Regulations)  promulgated  by the United  States  Department  of  Treasury  with
respect to the Code or other federal tax statutes.

     "Release"  means  disposing,  discharging,  injecting,  spilling,  leaking,
leaching, dumping, emitting,  escaping,  emptying, seeping, placing and the like
any Hazardous  Materials into or upon any land or water or air or otherwise into
the Environment in a manner subject to regulation under the Environmental Laws.


<PAGE>

     "Remco Businesses" means any of the businesses  conducted by Parent and its
Subsidiaries, other than the SAP Business.

     "Remedial  Action"  means  any   investigation,   assessment,   monitoring,
treatment, excavation, removal, remediation or cleanup of Hazardous Materials in
the Environment.

     "SAP Opinion" means any patent opinion prepared by counsel to Parent or its
Affiliates prior to Closing which relates to the Business Intellectual Property,
the Company Intellectual Property or the SAP Thai Intellectual Property.

     "SAP Real  Property"  means the real  property used in the SAP Business and
described in Exhibit 1.01(d) attached hereto.

     "SAP Thai Intellectual  Property" means all Intellectual Property in and to
which SAP Thai holds, or has a right to hold, any right, title or interest,  and
all  Intellectual  Property  licensed  or  sublicensed  to SAP Thai from a third
party,  in each case,  used primarily in,  developed  primarily for, or relating
primarily  to,  the  SAP  Business,  including  the  ION  Exchange  Intellectual
Property.

     "Seller  Intellectual  Property" means all Intellectual  Property in and to
which any Seller holds,  or has a right to hold, any right,  title and interest,
and all Intellectual Property licensed or sublicensed to a Seller, in each case,
other than the Business Intellectual Property.

     "Sellers'  Accountants"  means KPMG LLP,  the  independent  accountants  of
Parent.

     "Stock Option Plans" means,  collectively,  Parent's 1983  Incentive  Stock
Option  Plan,  1987  Non-Qualified  Stock  Option Plan (as amended and  restated
effective  as of January 1, 1993),  1993 Stock  Option  Plan and 1998  Long-Term
Incentive Stock Option Plan, and the Chemdal U.K. 1995 Share Option Scheme.

     "Subsidiaries" means, with respect to any Person, any and all corporations,
partnerships,  joint  ventures,  associations  and other  entities a majority of
whose outstanding  voting interests or other equity securities are owned by such
Person, directly or indirectly through one or more Subsidiaries.

     "Superabsorbent  Polymers" means, lightly cross linked, organic,  polymeric
materials  capable of  absorbing  more than ten (10) times their own weight of a
standard  sodium  chloride  solution  under  conditions  which are  specified in
Standard 440.199 of the European Disposable and Nonwovens Association which have
been evaluated by Parent and/or the Sellers for potential use in any Traditional
SAP Market Segments.

     "Superior Proposal" means any Acquisition  Proposal on terms which Parent's
Board  determines,  in its good faith judgment (after having received the advice
of a  financial  adviser  of  nationally  recognized  reputation),  to  be  more
favorable to Parent and its  stockholders  than the transaction  contemplated by
this  Agreement  and  for  which  financing,  to the  extent  required,  is then
committed  or, in the good faith  judgment  of  Parent's  Board,  based upon the
written advice of its financial adviser, is reasonably capable of being obtained
by the third party bidder.

     "Tax" or "Taxes" means any and all taxes,  fees, levies,  duties,  tariffs,
imposts,  and other  charges of any kind  (together  with any and all  interest,
penalties, additions to tax and additional amounts imposed with respect thereto)
imposed by any  government  or taxing  authority or arising under any tax law or
tax indemnity or tax sharing agreement,  including, without limitation: taxes or
other  charges  on or with  respect  to income,  franchises,  windfall  or other
profits,  gross  receipts,   property,   sales,  use,  capital  stock,  payroll,
employment,  social security, workers' compensation,  unemployment compensation,
or net worth;  taxes or other charges in the nature of excise,  withholding,  ad
valorem, stamp, transfer, value added, or gains taxes; license, registration and
documentation fees; and customs duties, tariffs, and similar charges.

     "Thai  Facility  Construction  Contracts"  means the  various  construction
contracts  listed on Section 3.15 of the Disclosure  Schedule entered into prior
to the Closing between SAP Thai or its Affiliates,  on the one hand, and certain
third parties,  on the other hand,  which relate to the construction of the Thai
Facility.
<PAGE>
     "Thai Recordings" means the recordings set forth on Exhibit 1.01(e).

     "Traditional  SAP Market  Segments"  means  disposable  hygienics  (such as
diapers, adult incontinence products, and feminine care products),  cable wraps,
fire retardants, freezer packs and food packaging liquid absorption.

     "Transaction   Agreements"   means  the  Bills  of  Sale,   the  Assumption
Agreements,  the Transition Services Agreement,  the License Agreement,  the Ion
Exchange License Agreement,  the CETCO Supply Agreement, the Acrylic Acid Supply
Agreement and the SAP Subleases.

     "Transaction   Intellectual   Property"  means  the  Business  Intellectual
Property,  the Company Intellectual Property, the SAP Thai Intellectual Property
and the Licensed Intellectual Property.

     "* Assistance Grants" means (i) the regional financial  assistance grant in
the amount of * evidenced  by a letter  dated * from the * and (ii) the regional
financial assistance grant in the amount of * evidenced * from the *.

     "U.S. GAAP" means United States generally  accepted  accounting  principles
and practices as in effect from time to time and applied consistently throughout
the periods involved.

           b)      The following terms have the meaning set forth in the
                   Sections set forth below:

Defined Term                                             Location of Definition

Acquisition Proposal                                                 5.08
Acrylic Acid Supply Agreement                                        5.15
Adjusted Statement of Working Capital                                2.08(b)(ii)
Allocation                                                           7.07(b)
Assumed Liabilities                                                  2.03(a)
Celanese Agreement                                                   5.22
CETCO Supply Agreement                                               5.14
Chemdal International Sub                                            Recitals
Chemdal Names                                                        5.09(a)
Chemdal Netherlands Sub                                              Recitals
Chemdal U.K.                                                         1.01
Closing                                                              2.05
Closing Date                                                         2.05
COBRA Benefits                                                       6.03(c)
Company                                                              Recitals
Company Common Stock                                                 Recitals
Company Shares                                                       Recitals
Confidentiality Agreement                                            5.03
Continuing Intercompany Indebtedness                                 2.04(c)
ERISA                                                                3.20(a)
Exchange Act                                                         5.05(a)
Excluded Assets                                                      2.02(b)
Excluded Liabilities                                                 2.03(b)
Expenses                                                             10.03(b)
FAS No. 87                                                           3.20(i)
Fee                                                                  10.03(a)
Financial Statements                                                 3.07
Foreign Benefit Plan                                                 3.20(i)

<PAGE>

Indemnified Party                                                    9.04
Indemnifying Party                                                   9.04
Independent Accounting Firm                                          2.08(b)(ii)
ION Exchange License Agreement                                       5.19
License Agreement                                                    5.16
Licensed Transaction Intellectual Property                           3.16(a)
Loss                                                                 9.02
Loss Event                                                           5.24
Material Contracts                                                   3.15(a)
Multiemployer Plan                                                   3.20(b)
Multiple Employer Plan                                               3.20(b)
* Application                                                        1.01
Other Sellers                                                        Recitals
Owned Transaction Intellectual Property                              3.16(b)
Parent                                                               Preamble
Plans                                                                3.20(a)
Poly-Pore Patents                                                    1.01(a)
Proxy Statement                                                      5.05(a)
Purchase Price                                                       2.04(a)
Purchaser                                                            Preamble
Purchaser Defined Contribution Plan                                  6.04
Purchaser Indemnified Party                                          9.02
Purchaser Objection                                                  2.08(b)(ii)
Purchaser's Scheme                                                   6.07(e)
Rebates                                                              5.18
Restricted Period                                                    5.10(a)
Returns                                                              7.02(a)
SAP Assets                                                           2.02(a)
SAP Business                                                         Recitals
SAP Subleases                                                        5.17
SAP Thai                                                             Recitals
SEC                                                                  5.05(a)
Seller                                                               Recitals
Seller Defined Benefit Plan                                          6.04
Seller Defined Contribution Plan                                     6.04
Seller Indemnified Party                                             9.03(a)
Seller Pension Plans                                                 6.04
Sellers                                                              Recitals
Shares                                                               Recitals
Signing Premium                                                      2.04(a)
Statement of Working Capital                                         2.08(a)
Stock Option                                                         6.10(a)
Stockholders' Meeting                                                5.04
Substituted Stock Option                                             6.10(b)(i)
Tangible Personal Property                                           3.18(a)
Terminating Purchaser Breach                                         10.01(c)
Terminating Sellers' Breach                                          10.01(b)
Thai Facility                                                        8.02(r)
Thai Shares                                                          Recitals
Thai Transferred Employee                                            6.08(a)
Third Party Claims                                                   9.04
Transfer Laws                                                        6.07(b)
Transferred Assets                                                   3.19(a)

<PAGE>

Transferred Employee                                                 6.01
Transition Services Agreement                                        5.13
U.K. Designated Employee                                             6.07(a)
U.K. Regulations                                                     6.07(d)
Unpaid SAP Cheques                                                   5.23
Unvested Stock Option                                                6.10(b)(i)
U.S. Transferred Employees                                           6.03(a)
WARN                                                                 3.20(h)
Working Capital                                                      2.08(a)

                                   ARTICLE II

                                PURCHASE AND SALE

     SECTION 2.01.  Purchase and Sale of the Shares.  Upon the terms and subject
to the conditions of this Agreement, at the Closing, Parent shall cause the sale
of the Shares to the Purchaser or one or more of its designated Affiliates,  and
the Purchaser or one or more of such  designated  Affiliates  shall purchase the
Shares.

     SECTION  2.02.  Assets  to be Sold.  (a) On the terms  and  subject  to the
conditions of this  Agreement,  Parent shall,  and shall cause the Other Sellers
to, on the  Closing  Date,  sell,  assign,  transfer,  convey and deliver to the
Purchaser  or one or  more of the  Purchaser's  designated  Affiliates,  and the
Purchaser or one or more of such designated  Affiliates  shall purchase from the
Sellers, on the Closing Date, all the assets, properties,  goodwill and business
of every  kind  and  description  and  wherever  located,  whether  tangible  or
intangible, real, personal or mixed, directly or indirectly owned by the Sellers
or to which they are directly or indirectly entitled and, in any case, belonging
to or used or intended to be used  primarily  in the SAP  Business or  primarily
related to the SAP  Business,  other than the Excluded  Assets (the assets to be
purchased by the Purchaser and its  designated  Affiliates  being referred to as
the "SAP Assets"), including, without limitation, the following:

                  (i)      the SAP Business as a going concern;

                  (ii)     all the SAP Real Property;

                  (iii)    all furniture, fixtures, equipment, machinery and
                  other tangible personal property used or held for use by
                  the Sellers at the locations at which the SAP Business is
                  conducted, or otherwise owned or held by a Seller at the
                  Closing Date for use in the conduct of the SAP Business and
                  not otherwise included in clause (ii) above;

                  (iv)     all Inventories;

                  (v)      all Receivables;

                  (vi)     all books of account, general, financial, tax and
                  personnel records, invoices, shipping records, supplier
                  lists, correspondence and other documents, records and files
                  and all computer software and programs and any rights thereto
                  owned by, primarily associated with, primarily used in, or
                  primarily relating to, the SAP Business at the Closing Date,
                  other than organization documents, minute and stock record
                  books and the corporate seal of each of the Sellers;

                  (vii)    all the Sellers' right, title and interest in, to and
                  under the Business Intellectual Property;

                  (viii)   all claims, causes of action, choses in action,
                  rights of recovery and rights of set-off of any kind
                  (including rights to insurance proceeds and rights under and
                  pursuant to all warranties, representations and guarantees
                  made by suppliers of products, materials or equipment, or
                  components thereof) primarily relating to the SAP Business;

                  (ix)     all sales and promotional literature, customer lists
                  and other sales-related materials owned by or primarily used,
                  associated with or employed by the Sellers in the SAP Business
                  at the Closing Date;

<PAGE>

                  (x)      all rights of the Sellers under all contracts,
                  licenses, sublicenses, agreements, leases, commitments, and
                  sales and purchase orders, and under all commitments, bids and
                  offers (to the extent such offers are transferable) primarily
                  relating to the SAP Business;

                  (xi)     all municipal, state and federal franchises, permits,
                  licenses, agreements, waivers and authorizations primarily
                  held or used by the Sellers in connection with, or required
                  for, the SAP Business, to the extent transferable;

                  (xii)    all refunds of any Taxes relating to any period, or
                  any portion of any period, ending on or prior to the Closing
                  Date to the extent any such refunds are reflected on the
                  Statement of Working Capital; and

                  (xiii)   all the Sellers' right, title and interest on the
                  Closing Date in, to and under all other assets, rights and
                  claims of every kind and nature primarily used or intended to
                  be primarily used in the operation of the SAP Business or
                  located on the SAP Real Property.

                  (b)      The SAP Assets shall exclude the following assets
                  owned by the Sellers (the "Excluded Assets"):

                  (i)     all cash, cash equivalents and bank accounts owned by
                  the Sellers at the Closing Date;

                  (ii)     all rights of the Sellers under this Agreement;

                  (iii)    except as otherwise provided in this Agreement, all
                  assets and properties of every kind and description and
                  wherever located, directly or indirectly, owned or held for
                  use by the Sellers and not primarily related to, or primarily
                  used in the conduct of, the SAP Business including, without
                  limitation, all of the assets and business of Parent and its
                  Subsidiaries used or intended to be used primarily in the
                  Poly-Pore Business;

                  (iv)     the name "AMCOL" and all related trademarks, logos,
                  tradenames, telephone numbers and internet domain names;

                  (v)      all of the Sellers' right, title and interest to an
                  under the Seller Intellectual Property;

                  (vi)     the right of the Seller to receive refunds of any
                  Taxes relating to any period, or any portion of any period,
                  ending on or prior to the Closing Date, except to the extent
                  any such refunds are reflected on the Statement of Working
                  Capital; and

                  (vii)    the right to receive any rebates and other refunds
                  arising in connection with amounts paid by Parent and its
                  Affiliates to the Purchaser and its Affiliates prior to the
                  Closing pursuant to any materials supply agreements between
                  the parties or their Affiliates.

     SECTION 2.03. Assumption and Exclusion of Liabilities. (a) On the terms and
subject  to the  conditions  of  this  Agreement,  the  Purchaser  or one of its
designated  Affiliates shall, on the Closing Date, assume and shall pay, perform
and  discharge  when  due  all  debts,  obligations,   contracts,   commitments,
agreements  and  liabilities  of the  Sellers,  of every  kind  and  description
primarily  related to the conduct of the SAP  Business  and arising by reason of
actions  or events  occurring  on or before  the  Closing  Date,  whether or not
existing on the Closing Date,  and whether  absolute or  contingent,  matured or
unmatured,  or known or unknown, except for the Excluded Liabilities (as defined
below) (the "Assumed Liabilities").

     (b) The Purchaser and its designated Affiliates,  as applicable,  shall not
assume  or have  any  responsibility  for  any  debts,  obligations,  contracts,
commitments, agreements or liabilities of the Sellers of any kind or description
not  primarily  related  to the  conduct  of the  SAP  Business  (the  "Excluded
Liabilities"). The Sellers shall
<PAGE>
retain, and shall be responsible for paying, performing and discharging when due
(provided that nothing herein shall preclude Parent from contesting or disputing
any such  Excluded  Liabilities)  all of the  Excluded  Liabilities,  including,
without limitation:

          (i) all Taxes now or hereafter owed by the Sellers, or attributable to
     the SAP Assets or the SAP Business,  to the extent  relating to any period,
     or any  portion  of any  period,  ending  on or prior to the  Closing  Date
     (excluding, for purposes of clarification,  any conveyance Taxes subject to
     Section 7.06 hereof, which shall be shared by the parties in the manner set
     forth therein);

          (ii) all Liabilities  (including  Taxes) relating to or arising out of
     the Excluded Assets or the Remco Businesses;

          (iii) all  Liabilities  arising from or relating to the  employment or
     termination of employment of any  Transferred  Employee or U.K.  Designated
     Employee  prior to the Closing Date  (including,  without  limitation,  any
     Liabilities   arising  under  any  Plan  or  other  compensation   program,
     arrangement or agreement of the Sellers,  the Company or SAP Thai except to
     the extent otherwise provided in this Agreement);

          (iv) any  Indebtedness  for borrowed  money other than the  Continuing
     Intercompany Indebtedness;

          (v) all debts,  Liabilities and obligations of the Sellers related to,
     or arising  out of, the  conduct of the SAP  Business  prior to the Closing
     Date to the extent  that the  existence  of such  Liability  or  obligation
     constitutes  a breach by the  Sellers of any of their  representations  and
     warranties in this Agreement;

          (vi) any  Liabilities  of, or  retained  by,  the  Sellers  under this
     Agreement;

          (vii) any and all  Liabilities  or Losses  suffered or incurred by the
     Sellers or the SAP Business,  including by reason of or in connection  with
     any claim or cause of action of any third party,  to the extent arising out
     of any action, inaction,  event, condition,  liability or obligation of the
     Remco Businesses occurring or existing before or after the Closing Date;

          (viii)  except  for  Offsite   Environmental   Liabilities,   and  the
     obligations  of the Purchaser as described in Exhibit 5.27 attached  hereto
     with  respect to the  specific  condition  described  therein,  any and all
     Losses or  Liabilities  pursuant  to any  Environmental  Law, or related to
     gases occurring naturally, geologically or otherwise, in each case, arising
     from or related to any action, event,  circumstance or condition related to
     the SAP Business and  occurring or existing on or before the Closing  Date,
     including,  without limitation, (A) any Release of Hazardous Materials into
     the  Environment  at,  to or from the SAP  Real  Property  or any  property
     formerly  owned or operated in connection  with the SAP  Business,  in each
     case on or  prior to the  Closing  (and any  additional  migration  of such
     Release  after the Closing Date) to the extent such Release is in violation
     of any  Environmental  Law or is in a quantity,  concentration or any other
     form that is reportable  or requires  investigation,  remediation  or other
     action pursuant to Environmental Law; (B) any and all Environmental  Claims
     arising  at any  time  that  relate  to the SAP  Business  or the SAP  Real
     Property on or prior to the  Closing;  and (C) any and all  non-compliances
     with or violations of any  applicable  Environmental  Law or  Environmental
     Permit  relating to the Sellers,  the SAP Real Property or the SAP Business
     on or prior to the Closing (and any continuance of such  non-compliance  or
     violation  after the Closing  Date,  except,  with  respect to this Section
     2.03(viii)(C),  to the extent  (i) the  Purchaser  was or should  have been
     aware of such non-compliance or violation on or before the Closing Date, or
     (ii) the condition constituting such non-compliance or violation is altered
     or changed by the Purchaser and its Affiliates after the Closing Date); and

          (ix)  any and all  costs  and  expenses  (including  attorneys'  fees)
     incurred by the Sellers in preparing and negotiating  this Agreement or the
     transactions  contemplated  hereby,  and any  Liabilities  with  respect to
     Actions  relating to,  resulting from, or arising out of, this Agreement or
     the transactions contemplated hereby.
<PAGE>



     SECTION 2.04. Purchase Price;  Allocation of Purchase Price. (a) Subject to
the adjustments set forth in Section 2.08, the purchase price for the Shares and
the SAP  Assets  shall be  U.S.$628,000,000,  less the  Continuing  Intercompany
Indebtedness  (as defined in Section 2.04(c) below) (the "Purchase  Price").  In
addition,  the  Purchaser  will cause the  payment to Chemdal  U.K. of an amount
equal to  U.S.$28,500,000  (the "Signing Premium") as consideration for entering
into the  Acrylic  Acid  Supply  Agreement  set  forth in  Section  5.15 of this
Agreement (it being understood that the Signing Premium shall be  non-refundable
for  any  reason,  including,   without  limitation,  on  account  of  an  early
termination  of the Acrylic  Acid Supply  Agreement  for any reason,  including,
without  limitation,   for  any  actual  or  alleged  breach  or  nonperformance
thereunder by Chemdal U.K.).

     (b) The sum of the  Purchase  Price and the  Assumed  Liabilities  shall be
allocated  among  the  Shares  and  the SAP  Assets  as of the  Closing  Date in
accordance with Exhibit 2.04(b) attached hereto.  Any subsequent  adjustments to
the sum of the Purchase Price and Assumed  Liabilities shall be reflected in the
allocation   hereunder  in  a  manner  consistent  with  Treasury  Regulation
1.1060-1T(f).  For all Tax purposes, each of the Purchaser, Parent and the Other
Sellers agrees to report the  transactions  contemplated  in this Agreement in a
manner  consistent  with the terms of this  Agreement,  including the allocation
under  Exhibit  2.04(b),  and to refrain from taking any  position  inconsistent
therewith  in any  Tax  return,  in any  refund  claim,  in any  litigation,  or
otherwise.

     (c) No less than 10 days prior to the Closing Date, Parent shall deliver to
the  Purchaser a  certificate  signed by the chief  financial  officer of Parent
indicating  the  amount  of  any  outstanding  intercompany   Indebtedness  (the
"Continuing  Intercompany  Indebtedness") of the SAP Business that will exist as
of the  Closing  Date (it being  understood  that  there  will be no  Continuing
Intercompany  Indebtedness  existing  as of the  Closing  Date that by its terms
cannot be prepaid in full or in part at any time without penalty).

     SECTION 2.05. Closing. Upon the terms and subject to the conditions of this
Agreement,  the sale and purchase of the Shares and the SAP Assets  contemplated
by this  Agreement  shall take place at a closing (the  "Closing") to be held at
the offices of Shearman & Sterling, 599 Lexington Avenue, New York, New York, at
10:00 A.M. New York time, on the tenth  Business Day following the  satisfaction
or waiver of all other conditions to the obligations of the parties set forth in
Article VIII, or at such other place or at such other time or on such other date
as Parent and the Purchaser may mutually agree upon in writing (the day on which
the Closing takes place being the "Closing Date").

     SECTION 2.06.  Closing  Deliveries by Parent. At the Closing,  Parent shall
deliver or cause to be delivered to the Purchaser:

          (i) stock  certificates  evidencing the Shares duly endorsed in blank,
     or accompanied by stock powers duly executed in blank,  in form  reasonably
     satisfactory  to the  Purchaser  and with all required  stock  transfer tax
     stamps affixed;

          (ii)  the  Bills  of  Sale  (or any  such  other  documents  as may be
     reasonably  requested  by the  Purchaser  to transfer the SAP Assets to the
     Purchaser or one or more of its  designated  Affiliates or to evidence such
     transfer on the public records),  customary instruments of transfer for the
     SAP Real Property,  and customary  instruments of transfer for the Business
     Intellectual  Property,  the  Company  Intellectual  Property  and the Thai
     Intellectual  Property,  all such  documents  to be in form  and  substance
     reasonably satisfactory to the parties;

          (iii) a receipt for the Purchase Price and the Signing Premium; and

          (iv) the  certificates  and other  documents  required to be delivered
     pursuant to Section 8.02.

          SECTION 2.07. Closing Deliveries by the Purchaser. At the Closing, the
     Purchaser shall deliver to Parent:

          (i) the Purchase Price by wire transfer in immediately available funds
     to the Purchase Price Bank Account;
<PAGE>

          (ii) the Signing  Premium by wire  transfer in  immediately  available
     funds to the Purchase Price Bank Account;

          (iii) the  Assumption  Agreements  and such other  documents as may be
     reasonably requested by Parent to effect the assumption by the Purchaser or
     one or more of its designated  Affiliates of the Assumed Liabilities and to
     evidence such assumption on the public records, all such documents to be in
     form and substance reasonably satisfactory to the parties; and

          (iv) the  certificates  and other  documents  required to be delivered
     pursuant to Section 8.01.

     SECTION 2.08. Statement of Working Capital. (a) As promptly as practicable,
but in any event within 30 Business  Days  following  the Closing  Date,  Parent
shall  deliver to the  Purchaser  (i) a  statement  (the  "Statement  of Working
Capital")  indicating  the amount of current trade accounts  receivable,  net of
allowance for doubtful accounts, SAP Thai Value Added Tax (VAT) receivables,  if
any, and Inventories,  less accounts payable and accrued current liabilities (it
being understood that (i) only those accrued current liabilities  actually being
transferred  to the Purchaser  pursuant to this  Agreement  shall be included in
this statement and that this statement  shall exclude any Receivables or rebates
due to the SAP Business from the Purchaser  and its  Affiliates  pursuant to any
materials supply agreements,  and (ii) to the extent there are any other current
Receivables  existing as of the Closing  Date that were not included in the June
30, 1999 statement of working  capital  (attached  hereto as Exhibit 2.08),  the
Purchaser  shall promptly advise Parent whether it wishes to acquire any of such
current  Receivables,  and should the  Purchaser  decide to acquire  any of such
current  Receivables,  then any of such current Receivables actually acquired by
the  Purchaser  will be  included  in the  Statement  of Working  Capital)  (the
"Working  Capital") of the SAP Business as of the Closing Date,  which Statement
of Working  Capital  shall be prepared  substantially  in the same manner as the
June 30, 1999 statement of working  capital  attached hereto as Exhibit 2.08 and
(ii) an  unqualified  report  thereon of Parent's  Accountants  stating that the
Statement  of Working  Capital  fairly  presents in all  material  respects  the
Working Capital of the SAP Business at the Closing Date.

     (b) (i) Subject to clause  (ii) of this  Section  2.08,  the  Statement  of
Working  Capital  delivered by Parent to the Purchaser shall be deemed to be and
shall be final, binding and conclusive on the parties hereto.

     (ii) The  Purchaser  may dispute any amounts  reflected on the Statement of
Working  Capital;  provided,  however,  that the  Purchaser  shall have notified
Parent and the Sellers' Accountants in writing of each disputed item, specifying
the estimated amount thereof in dispute and setting forth, in reasonable detail,
the basis for such dispute (the "Purchaser  Objection")  within 30 Business Days
of receipt of the  Statement of Working  Capital from Parent.  Parent shall then
have 30 Business Days from the receipt of the Purchaser  Objection to review and
respond to the  Purchaser  Objection.  If the Purchaser and Parent are unable to
resolve all of their  disagreements  with  respect to the  Statement  of Working
Capital  within 10 Business  Days  following  Parent's  review of the  Purchaser
Objection, they shall submit the items remaining in dispute for resolution to an
independent  accounting firm of international  reputation mutually acceptable to
the Purchaser and Parent (such  accounting  firm being referred to herein as the
"Independent  Accounting Firm"), which shall, within 30 Business Days after such
submission,  determine and report to the Purchaser and Parent upon such dispute,
and such written report shall be final,  binding and conclusive on the Purchaser
and Parent. The fees and disbursements of the Independent  Accounting Firm shall
be paid by the  Purchaser  and Parent in  inverse  proportion  to those  matters
submitted to the Independent  Accounting Firm which are resolved in favor of the
Purchaser and Parent,  as the case may be, as so allocated between the Purchaser
and Parent by the  Independent  Accounting  Firm in accordance with this Section
2.08  at the  time  of the  Independent  Accounting  Firm's  determination.  The
"Adjusted  Statement of Working  Capital"  shall be (i) the Statement of Working
Capital in the event that (x) no  Purchaser  Objection  is  delivered  to Parent
during the 30  Business  Day period  specified  above or (y) the  Purchaser  and
Parent so agree  during  such 30  Business  Day period;  (ii) the  Statement  of
Working Capital as adjusted in accordance with the Purchaser  Objection,  in the
event that the Purchaser  Objection is timely delivered to Parent and (x) Parent
does not respond to the  Purchaser  Objection  within the 30 Business Day period
following receipt by Parent of the Purchaser  Objection or (y) the Purchaser and
Parent so agree  during such 30 Business Day period;  or (iii) the  Statement of
Working  Capital as adjusted by either (x) the  agreement of the  Purchaser  and
Parent or (y) the Independent Accounting Firm.
<PAGE>
     (c) (i) Within 10 Business Days following the determination of the Adjusted
Statement of Working  Capital  pursuant to this  Section  2.08,  the  adjustment
payments,  if any,  payable  pursuant to this Section 2.08 shall be paid by wire
transfer of  immediately  available  funds to a bank account  designated  by the
Purchaser or Parent,  as the case may be, at least five  Business  Days prior to
the  expiration of such 10 Business Day period.  For the purposes of determining
which of the Purchaser's designated Affiliates will make or receive any required
adjustment payments hereunder, the amount of U.S.$34,175,000 referred to in (ii)
and (iii) below is assumed attributed as follows:  U.S.$ * to the Company, U.S.$
* to SAP U.K. and U.S.$ * to SAP Thai.

     (ii) Parent shall make an adjustment payment to the Purchaser or one of its
designated  Affiliates  in respect of Working  Capital in an amount equal to the
amount,  if any, by which the (x) Adjusted  Statement of Working Capital is less
than (y) U.S.$34,175,000.

     (iii) The Purchaser shall make, or cause to be made, an adjustment  payment
to Parent in respect of Working  Capital in an amount  equal to the  amount,  if
any, by which the (x) Adjusted  Statement of Working Capital is greater than (y)
U.S.$34,175,000.

                                   ARTICLE III

                    REPRESENTATIONS AND WARRANTIES OF PARENT

     As an inducement to the Purchaser to enter into this Agreement, each of the
Sellers hereby  represents  and warrants to the Purchaser as follows  (except as
set forth in the Disclosure Schedule):

     SECTION 3.01.  Organization,  Authority and  Qualification  of the Sellers.
Each of the Sellers is a corporation  duly  organized,  validly  existing and in
good standing under the Laws of its  jurisdiction of  incorporation  and, in the
case of  Parent,  has all  necessary  power  and  authority  to enter  into this
Agreement,  to  carry  out  its  obligations  hereunder  and to  consummate  the
transactions  contemplated  hereby.  Each of the  Sellers  is duly  licensed  or
qualified to do business and is in good standing in each  jurisdiction  in which
the properties owned or leased by it or the operation of its business makes such
licensing or qualification  necessary,  except to the extent that the failure to
be so  licensed  or  qualified  (i) would not  materially  adversely  affect the
ability of such Seller to carry out its obligations under, and to consummate the
transactions  contemplated  by, this Agreement,  or (ii) have a Material Adverse
Effect.  Except for  obtaining  the  necessary  approval  of  stockholders,  the
execution and delivery of this Agreement by Parent, the performance by Parent of
its obligations  hereunder and the  consummation  by Parent of the  transactions
contemplated  hereby have been duly  authorized by all  requisite  action on the
part of Parent.  This  Agreement has been duly executed and delivered by Parent,
and (assuming due  authorization,  execution and delivery by the Purchaser) this
Agreement   constitutes  a  legal,   valid  and  binding  obligation  of  Parent
enforceable against Parent in accordance with its terms,  subject to bankruptcy,
insolvency,  moratorium,  reorganization or similar Laws affecting the rights of
creditors generally and the availability of equitable remedies.

     SECTION 3.02. Organization,  Authority and Qualification of the Company and
SAP Thai.  Each of the Company  and SAP Thai is a  corporation  duly  organized,
validly  existing and in good  standing  under the Laws of its  jurisdiction  of
incorporation and has all necessary power and authority to own, operate or lease
the  properties  and assets now owned,  operated or leased by it and to carry on
the SAP  Business  as it has been and is  currently  conducted,  except  for the
failure to be so  organized,  existing or in good standing or to have such power
or authority as would not have a Material  Adverse  Effect.  Each of the Company
and  SAP  Thai is duly  licensed  or  qualified  to do  business  and is in good
standing in each  jurisdiction in which the properties  owned or leased by it or
the operation of its business makes such licensing or qualification necessary or
desirable,  except for  failures to be so qualified  or in good  standing  which
would not, in the  aggregate,  have a Material  Adverse  Effect.  All  corporate
actions  taken by the  Company  during the past five years and by SAP Thai since
the date of its incorporation have been duly authorized, and neither the Company
nor  SAP  Thai  has  taken  any  action  that  in any  respect  conflicts  with,
constitutes  a default  under or results in a violation of any  provision of its
Certificate of Incorporation or By-laws (or similar  organizational  documents),
except to the extent that the absence of such authority or the existence of such
conflict or default would not have a Material  Adverse Effect.  True and correct
copies  of  the   Certificate   of   Incorporation   and   By-laws  (or  similar
organizational  documents) of the Company and SAP Thai, each as in effect on the
date hereof,  have been delivered by Parent to the Purchaser.  As of the Closing
Date, neither the Company nor SAP Thai will have any Subsidiaries.
<PAGE>

     SECTION 3.03.  Capital Stock of the Company and SAP Thai;  Ownership of the
Shares.  (a) The  authorized  capital  stock of the Company  consists of 150,000
shares of Company  Common  Stock and the  authorized  capital  stock of SAP Thai
consists of 2,000,000  ordinary shares.  As of the date hereof,  2,000 shares of
Company  Common Stock and 2,000,000  ordinary  shares of SAP Thai are issued and
outstanding, all of which are validly issued, fully paid and nonassessable. None
of the issued and outstanding  Shares were issued in violation of any preemptive
rights. There are no options, warrants,  convertible securities or other rights,
agreements, arrangements or commitments of any character relating to the capital
stock of the Company or SAP Thai or  obligating  Parent,  Chemdal  International
Sub,  Chemdal  Netherlands  Sub,  the  Company  or SAP Thai to issue or sell any
shares of capital  stock of, or any other  interest in, the Company or SAP Thai.
There are no outstanding  contractual  obligations of the Company or SAP Thai to
repurchase,  redeem or otherwise  acquire any shares of Company  Common Stock or
shares of SAP Thai or to provide funds to, or make any  investment  (in the form
of a loan, capital  contribution or otherwise) in, any other Person. The Company
Shares  constitute all the issued and  outstanding  capital stock of the Company
and are owned of record and  beneficially  solely by Chemdal  International  Sub
free and  clear of all  Encumbrances,  and the Thai  Shares  constitute  all the
issued  and  outstanding  capital  stock of SAP Thai and are owned of record and
beneficially  solely by the Persons set forth on Exhibit 1.01(a) attached hereto
free and  clear  of all  Encumbrances.  Upon  consummation  of the  transactions
contemplated by this Agreement and registration of the Shares in the name of the
Purchaser in the stock records of the Company and SAP Thai, as  applicable,  the
Purchaser,  assuming it shall have  purchased the Shares for value in good faith
and without notice of any adverse claim, will own all the issued and outstanding
capital  stock of the Company  and SAP Thai free and clear of all  Encumbrances.
Upon consummation of the transactions contemplated by this Agreement, the Shares
will be fully paid and  nonassessable.  There are no voting trusts,  stockholder
agreements, proxies or other agreements or understandings in effect with respect
to the voting or transfer of any of the Shares.

     (b) The  stock  register  of each of the  Company  and SAP Thai  accurately
records:  (i) the name and address of each Person owning shares of capital stock
of the Company and SAP Thai, as applicable  and (ii) the  certificate  number of
each  certificate  evidencing  shares of capital stock issued by the Company and
SAP  Thai,  as  applicable,   the  number  of  shares  evidenced  by  each  such
certificate, the date of issuance thereof and, in the case of cancellation,  the
date of cancellation.

     SECTION  3.04.  Corporate  Books  and  Records.  Except as would not have a
Material  Adverse  Effect,  the minute books of the Company and SAP Thai contain
accurate records of all meetings and accurately  reflect all other actions taken
by the  stockholders,  the board of directors and all committees of the board of
directors  of the Company and SAP Thai,  as  applicable.  Complete  and accurate
copies of all such minute books and of the stock register of the Company and SAP
Thai have been provided by Parent to the Purchaser.

     SECTION  3.05.  No  Conflict.   Assuming  that  all  consents,   approvals,
authorizations  and other  actions  described in Section 3.06 have been obtained
and all  filings  and  notifications  listed in Section  3.06 of the  Disclosure
Schedule have been made,  except for any facts or circumstances  relating solely
to the Purchaser,  the execution,  delivery and performance of this Agreement by
Parent do not and will not (a) violate, conflict with or result in the breach of
any provision of the charter or by-laws (or similar organizational documents) of
Parent,  the  Company,  SAP Thai or any Other  Seller,  (b) cause an event which
could  reasonably be expected to have a Material  Adverse  Effect as a result of
any conflict with or violation of any Law or  Governmental  Order  applicable to
Parent,  the Company,  SAP Thai or any Other  Seller or any of their  respective
assets,  properties  or  businesses,  including,  without  limitation,  the  SAP
Business,  or (c)  except  as set forth in  Section  3.05(c)  of the  Disclosure
Schedule or as would not have a Material Adverse Effect,  conflict with,  result
in any breach of, constitute a default (or event which with the giving of notice
or lapse of time, or both,  would become a default)  under,  require any consent
under,  or give to others any rights of  termination,  amendment,  acceleration,
suspension,  revocation  or  cancellation  of, or result in the  creation of any
Encumbrance  on any of the  Company  Shares or the Thai  Shares or on any of the
assets or properties of the Company, SAP Thai or of the Sellers pursuant to, any
note,  bond,  mortgage  or  indenture,  contract,  agreement,  lease,  sublease,
license,  permit, franchise or other instrument or arrangement to which prior to
the Closing the  Company,  SAP Thai or the Sellers is a party or by which any of
the Shares or any of such assets or properties is bound or affected.

     SECTION 3.06. Governmental Consents and Approvals. The execution,  delivery
and  performance  of this  Agreement  by Parent do not and will not  require any
consent,  approval,  authorization  or other order of, action by, filing with or
notification to any Governmental  Authority,  except (a) as described in Section
3.06 of the Disclosure

<PAGE>
Schedule and (b) the  notification  requirements  of the HSR Act and  applicable
filings under  non-U.S.  merger control and  competition  Laws; or (c) where the
failure to obtain such consent,  authorization  or to make such filing would not
have a Material Adverse Effect.

     SECTION 3.07.  Financial  Statements.  True and complete  copies of (i) the
unaudited  balance sheets of the Company,  Chemdal  International  Sub,  Chemdal
Netherlands  Sub,  Chemdal U.K. and SAP Thai for the  nine-month  period  ending
September 30, 1999 and the related  statements  of income,  and, with respect to
the Company,  the related  statement of operations,  (ii) the unaudited  balance
sheets of the Company,  Chemdal  International Sub, Chemdal  Netherlands Sub and
Chemdal  U.K.  for the fiscal year ended as of December 31, 1998 and the related
statements of income, and, with respect to the Company and Chemdal International
Sub, the related statements of cash flows, and (iii) the unaudited balance sheet
of the Company,  Chemdal International Sub and Chemdal U.K. for the fiscal years
ended as of December 31, 1997 and  December 31, 1996 and the related  statements
of income,  and, with respect to the Company and Chemdal  International Sub, the
related  statements of cash flows ((i), (ii) and (iii) above being  collectively
referred to herein as the "Financial  Statements") have been delivered by Parent
to the  Purchaser  and are set forth  herein at Section  3.07 of the  Disclosure
Schedule.  The Financial  Statements  (i) were  prepared in accordance  with the
books of account and other financial records of the Company,  SAP Thai,  Chemdal
International Sub, Chemdal Netherlands Sub and Chemdal U.K., and in all material
respects and except as otherwise  indicated therein or described in Section 3.07
of the Disclosure  Schedule,  present fairly the financial condition and results
of  operations  of such  entities  as of the dates  thereof  or for the  periods
covered  thereby,  (ii) have been prepared on a basis  consistent  with the past
practices  of  the  Company,  SAP  Thai,  Chemdal   International  Sub,  Chemdal
Netherlands Sub and Chemdal U.K. and (iii) include all  adjustments  (consisting
only of normal recurring accruals) that are necessary for a fair presentation of
the financial  condition of the Company,  SAP Thai,  Chemdal  International Sub,
Chemdal  Netherlands  Sub and Chemdal U.K. and the results of the  operations of
such  entities  as of the  dates  thereof  or for the  periods  covered  thereby
(subject to, for the purposes  only of the financial  statements  for the period
ending  September 30, 1999, any normal year-end  adjustments  which were not and
are not expected,  individually or in the aggregate,  to have a Material Adverse
Effect). If adjusted to account for the disclosures  described in Paragraph 1 of
Section 3.07 of the  Disclosure  Schedule,  the results of the operations of the
SAP Business for the periods  covered by the  Financial  Statements  shall be no
worse than the results of the operations  reflected on the Financial  Statements
for such periods.

     SECTION 3.08. No Undisclosed Liabilities.  Except as disclosed elsewhere in
the Disclosure Schedule,  and except where the existence of such Liability would
not have a Material Adverse Effect, there are no Liabilities of the Company, SAP
Thai  or the  Sellers  relating  to the SAP  Business,  other  than  Liabilities
reflected on the Financial  Statements or incurred  since  September 30, 1999 in
the ordinary  course of the SAP Business  consistent  with the past  practice of
Parent, the Company, SAP Thai and the Other Sellers.

     SECTION 3.09. Receivables.  To Parent's Knowledge, all Receivables existing
on the Closing  Date will have arisen from the sale of  Inventory or services to
Persons not affiliated with Parent,  the Company,  SAP Thai or the Other Sellers
and in the ordinary course of the business consistent with past practice and, to
Parent's Knowledge,  in all material respects constitute or will constitute,  as
the case may be, only valid,  undisputed  claims of the SAP Business not subject
to valid claims of set-off or other defenses or counterclaims  other than normal
cash  discounts and rebates  accrued in the ordinary  course of the SAP Business
consistent with past practice.  Notwithstanding  the foregoing,  nothing in this
Agreement  shall  constitute a guaranty or warranty by Parent or its  Affiliates
that such Receivables will ultimately be collected.

     SECTION 3.10.  Inventories.  The Company,  SAP Thai or the Sellers,  as the
case may be, have good and marketable title to the Inventories free and clear of
all Encumbrances.  To Parent's Knowledge,  the Inventories do not consist of, in
any material amount, items that are obsolete or damaged.  Except as described in
Section 3.10 of the Disclosure  Schedule,  the Inventories do not consist of any
items held on consignment. Neither the Company, SAP Thai nor any Seller is under
any  obligation  or  liability  with  respect to  accepting  returns of items of
Inventory or merchandise in the possession of their  customers other than in the
ordinary  course  of  business  consistent  with  past  practice.   To  Parent's
Knowledge,  neither  the  Company,  SAP  Thai nor any  Seller  has  acquired  or
committed to acquire or manufacture Inventory for sale which is not of a quality
and  quantity  usable  in the  ordinary  course  of the SAP  Business  within  a
reasonable  period  of time  and  consistent  with  past  practice,  nor has the
Company,  SAP Thai or a Seller changed the price of any Inventory except for (i)
price reductions to reflect any reduction in the cost thereof to
<PAGE>
the Company,  SAP Thai or such Seller, (ii) reductions and increases  responsive
to normal competitive conditions and consistent with past sales practices, (iii)
increases to reflect any  increase in the cost thereof to the Company,  SAP Thai
or such Seller and (iv) increases and reductions  made with the written  consent
of the Purchaser.

     SECTION 3.11.  Conduct in the Ordinary Course;  Absence of Certain Changes,
Events and Conditions.  Since September 30, 1999, except as disclosed in Section
3.11 of the Disclosure  Schedule or as would not have a Material Adverse Effect,
the SAP Business has been conducted in the ordinary  course and consistent  with
past practice.  As amplification and not limitation of the foregoing,  except as
disclosed  in Section 3.11 of the  Disclosure  Schedule and except as relates to
the business  and assets of the Sellers  other than the SAP Business and the SAP
Assets,  since  September 30, 1999,  the Company,  SAP Thai and the Sellers have
not:

     (i) made any loan to, guaranteed any Indebtedness of or otherwise  incurred
any Indebtedness on behalf of any Person;

     (ii)  redeemed  any of the  capital  stock  or  declared,  made or paid any
dividends or  distributions  (whether in cash,  securities or other property) to
the holders of capital stock of the Company or shares of SAP Thai;

     (iii) to Parent's  Knowledge,  made any material  changes in the  customary
methods  of  operations  of the  Company,  SAP Thai or the  Sellers,  including,
without   limitation,   practices  and  policies   relating  to   manufacturing,
purchasing, Inventories, marketing, selling and pricing;

     (iv) merged with, entered into a consolidation with or acquired an interest
in any Person or acquired a substantial portion of the assets or business of any
Person or any division or line of business  thereof,  or otherwise  acquired any
material  assets other than in the ordinary  course of business  consistent with
past practice;

     (v) except as directly related to the construction of the SAP Thai facility
in Thailand,  issued any sales orders or otherwise  agreed to make any purchases
involving exchanges in value in excess of $500,000 individually;

     (vi) sold, transferred,  leased, subleased,  licensed or otherwise disposed
of any  properties  or  assets,  real,  personal  or mixed  (including,  without
limitation,  leasehold  interests  and  intangible  assets),  other  than in the
ordinary course of business consistent with past practice;

     (vii) issued or sold any capital stock,  notes,  bonds or other securities,
or any  option,  warrant or other  right to acquire  the same,  of, or any other
interest in, the Company, Chemdal U.K. or SAP Thai;

     (viii) entered into any agreement,  arrangement or transaction  with any of
the  directors,  officers,  employees  or  shareholders  (or with any  relative,
beneficiary, spouse or Affiliate thereof) of the SAP Business;

     (ix) (A) granted any increase,  or announced  any  increase,  in the wages,
salaries,  compensation,  bonuses, incentives, pension or other benefits payable
by the  Company,  SAP Thai or a Seller to any of the SAP  Employees,  including,
without  limitation,  any  increase  or  change  pursuant  to  any  Plan  or (B)
established or increased or promised to increase any benefits under any Plan, in
either case except as required by Law, or any collective  bargaining  agreement,
or  involving  ordinary  increases  consistent  with the past  practices  of the
Company, SAP Thai or a Seller, or a contractual  obligation existing on the date
hereof;

     (x)  written  down or  written  up (or  failed to write down or write up in
accordance  with  U.S.  GAAP  consistent  with past  practice)  the value of any
Inventories or  Receivables  or revalued any assets of the Company,  SAP Thai or
any of the SAP Assets,  other than in the ordinary course of business consistent
with past practice and in accordance with U.S. GAAP;

     (xi) amended,  terminated,  canceled or compromised  any material claims of
the Company,  SAP Thai or the Sellers or waived any other rights of  substantial
value to the SAP Business;
<PAGE>
     (xii) made any change in any method of accounting or accounting practice or
policy  used  by the  Company,  SAP  Thai  or the  Sellers  relating  to the SAP
Business,  other  than  such  changes  as are  required  by U.S.  GAAP (or other
applicable non-U.S. accounting principals or practices);

     (xiii)  made or revoked any  material  Tax  election,  or any change in any
method of Tax accounting;

     (xiv) compromised or settled any material Tax Liability;

     (xv)  failed  in any  material  respect  to  maintain  the  SAP  Assets  in
accordance  with good  business  practice and in good  operating  condition  and
repair;

     (xvi) incurred any Indebtedness;

     (xvii)  amended,  modified or consented to the  termination of any Material
Contract or the Company's, SAP Thai's or a Sellers' rights thereunder;

     (xviii) amended or restated the Certificate of Incorporation or the By-laws
(or similar organizational documents) of the Company, SAP Thai or the Sellers;

     (xix) suffered any Material Adverse Effect; or

     (xx) agreed,  whether in writing or  otherwise,  to take any of the actions
specified in this  Section  3.11 or granted any options to  purchase,  rights of
first refusal,  rights of first offer or any other similar rights or commitments
with respect to any of the actions  specified in this  Section  3.11,  except as
expressly contemplated by this Agreement.

     SECTION  3.12.  Litigation.  Except  as set  forth in  Section  3.12 of the
Disclosure  Schedule  (which,  with  respect to each  Action  and  investigation
disclosed  therein,  sets forth:  the parties,  nature of the  proceeding,  date
commenced,  relief  sought and, if  applicable,  paid or granted),  there are no
Actions or, to Parent's Knowledge, investigations by or against the Company, SAP
Thai or an Other Seller (or by or against  Parent or any  Affiliate  thereof and
relating to the SAP  Business,  the Company,  SAP Thai or an Other  Seller),  or
affecting  the SAP  Business or any of the SAP Assets,  pending (or, to Parent's
Knowledge,  threatened  to be  brought)  that has or has had a Material  Adverse
Effect  or  could  affect  the  legality,  validity  or  enforceability  of this
Agreement or the consummation of the transactions contemplated hereby. Except as
set forth in Section 3.12 of the Disclosure  Schedule,  none of the Company, SAP
Thai the Other  Sellers  nor any of the SAP  Assets nor Parent is subject to any
Governmental Order (nor, to Parent's Knowledge,  are there any such Governmental
Orders  threatened to be imposed by any  Governmental  Authority) which has, has
had or is reasonably likely to have, a Material Adverse Effect.

SECTION 3.13.  Compliance with Laws.  Except as set forth in Section 3.13 of the
Disclosure Schedule,  the SAP Business has been and continues to be conducted in
accordance with all Laws and Governmental Orders applicable to the SAP Business,
and neither the  Company,  SAP Thai nor the Sellers are in violation of any such
Law or  Governmental  Order,  except where the failure to be in compliance  with
such Laws and orders would not have a Material Adverse Effect.

     SECTION  3.14.  Environmental  Matters.  (a) Except as disclosed in Section
3.14(a)  of the  Disclosure  Schedule  or as would  not  have,  or as would  not
reasonably be expected to have, a Material Adverse Effect:

          (i) The SAP Business is in compliance with, and has been in compliance
     with, all applicable  Environmental Laws and all Environmental Permits. All
     past  non-compliance  with Environmental Laws or Environmental  Permits has
     been resolved without any pending,  on-going or future obligation,  cost or
     liability,   and  there  is  no   requirement   proposed  for  adoption  or
     implementation under any Environmental Law or Environmental Permit.
<PAGE>
          (ii) There are no  underground  or  aboveground  storage  tanks or any
     surface  impoundments,  septic  tanks,  pits,  sumps  or  lagoons  in which
     Hazardous  Materials are being or have been treated,  stored or disposed on
     any of the SAP Real  Property  or, to Parent's  Knowledge,  on any property
     formerly  owned,  leased or occupied by, or on behalf of, the Company,  SAP
     Thai, the Sellers or the SAP Business.

          (iii)  Hazardous  Materials  have not been  Released on any of the SAP
     Real Property or, during their period of ownership,  lease or occupancy, on
     any property  formerly  owned,  leased or occupied by, or on behalf of, the
     Company, SAP Thai, the Sellers or the SAP Business.

          (iv) Except as contemplated in Exhibit 5.27 attached  hereto,  neither
     the Company, SAP Thai nor the Sellers are conducting, and none of them have
     undertaken or  completed,  any Remedial  Action  relating to any Release or
     threatened  Release of Hazardous  Materials at the SAP Real Property or, on
     behalf of the SAP  Business,  at any other  site,  location  or  operation,
     either  voluntarily or pursuant to the order of any Governmental  Authority
     or the requirements of any Environmental Law or Environmental Permit.

          (v) There is no asbestos or asbestos-containing material on any of the
     SAP  Real  Property,   the  existence  of  which  is  a  violation  of  any
     Environmental Law.

          (vi) There are no Environmental  Claims pending or threatened  against
     the Company, SAP Thai, the Sellers (with respect to the SAP Business),  the
     SAP Business or the SAP Real Property,  and, to Parent's  Knowledge,  there
     are no circumstances that are reasonably  expected to form the basis of any
     such Environmental Claim,  including,  without limitation,  with respect to
     any off-site disposal location  currently or formerly used by, or on behalf
     of, the  Company,  SAP Thai,  a Seller or the SAP  Business or any of their
     predecessors   or  with  respect  to  any  previously   owned  or  operated
     facilities.

          (vii) The Company,  SAP Thai and the Sellers do not require any new or
     additional  Environmental  Permits  and  are not  required  to  modify  any
     existing Environmental Permits and will not require any increase in capital
     expenditures, in order to produce at present production levels with respect
     to the SAP Business in compliance with applicable Environmental Laws.

          (viii) None of the SAP Real  Property or, to Parent's  Knowledge,  any
     property formerly owned, leased or occupied by or on behalf of the Sellers,
     the  Company,  SAP Thai or the SAP  Business  is  listed  or  proposed  for
     listing,  or adjoins  any other  property  that is listed or  proposed  for
     listing, on the National Priorities List or the Comprehensive Environmental
     Response,  Compensation and Liability  Information System under the federal
     Comprehensive  Environmental Response,  Compensation,  and Liability Act or
     any analogous federal, state or local list.

     (b) The Company,  SAP Thai and the Sellers have provided the Purchaser with
copies or summaries of (i) all written environmental assessment or audit reports
and other  similar  studies or analyses  relating to the SAP Business or the SAP
Real  Property or the  operations  of the Company,  SAP Thai or the Sellers,  as
applicable,  and (ii) to Parent's Knowledge, all insurance policies issued since
December  31, 1995 that may provide  coverage  for the SAP  Business  related to
environmental  matters,  provided that no representations or warranties are made
by  Parent  that  such  policies  or the  rights  and  benefits  thereunder  are
transferable to the Purchaser.

     (c) Except as  disclosed  in Section  3.14(c) of the  Disclosure  Schedule,
neither the execution of this Agreement nor the consummation of the transactions
contemplated  in this Agreement will require any Remedial Action or notice to or
consent  of  Governmental  Authorities  or  any  third  party  pursuant  to  any
applicable Environmental Law or Environmental Permit.

     (d) The Purchaser  acknowledges that (i) the representations and warranties
contained in this Section 3.14 are the only representations and warranties being
made with respect to  compliance  with or  liability  under  Environmental  Laws
related  to  this   Agreement  or  its  subject   matter,   and  (ii)  no  other
representation  contained in this Agreement  shall apply to any such matters and
no other  representation  or  warranty,  express or implied,  is being made with
respect thereto.
<PAGE>
     SECTION 3.15.  Material  Contracts.  (a) Section  3.15(a) of the Disclosure
Schedule  lists  each of the  following  contracts  and  agreements  (including,
without  limitation,  oral agreements) of the Company,  SAP Thai and the Sellers
relating to the SAP Business (such contracts and  agreements,  together with all
contracts,  agreements,  leases  and  subleases  concerning  the  management  or
operation of any SAP Real Property to which the Company,  SAP Thai or any of the
Sellers is a party and all agreements  relating to Intellectual  Property being,
the "Material Contracts"):

          (i) each contract and  agreement for the purchase of Inventory,  spare
     parts,  other  materials or personal  property with any supplier or for the
     furnishing of services to the Company, SAP Thai or the Sellers or otherwise
     related to the SAP Business under the terms of which the Company,  SAP Thai
     or any of the Sellers: (A) is likely to pay or otherwise give consideration
     of more than  $500,000  in the  aggregate  during the  calendar  year ended
     December 31, 1999, or (B) cannot be canceled by the Company,  SAP Thai or a
     Seller  without  penalty or further  payment and without more than 30 days'
     notice;

          (ii) each  contract and  agreement  for the sale of Inventory or other
     personal  property or for the  furnishing  of services by the Company,  SAP
     Thai or the SAP Business which:  (A) is likely to involve  consideration of
     more than  $2,500,000  in the  aggregate  during  the  calendar  year ended
     December 31, 1999, or (B) cannot be canceled by the Company,  SAP Thai or a
     Seller  without  penalty or further  payment and without more than 30 days'
     notice;

          (iii)  all  material  broker,  distributor,   dealer,   manufacturer's
     representative,   franchise,  agency,  sales  promotion,  market  research,
     marketing consulting and advertising  contracts and agreements to which the
     Company, SAP Thai or any of the Sellers is a party;

          (iv)  all  employment   contracts  and  contracts   with   independent
     contractors or consultants (or similar  arrangements) to which the Company,
     SAP Thai or any of the  Sellers  is a party and  which are not  cancellable
     without penalty or further payment and without more than 30 days' notice;

          (v) all contracts and  agreements of the Company and SAP Thai relating
     to Indebtedness;

          (vi) all  material  contracts  and  agreements  with any  Governmental
     Authority to which the Company, SAP Thai or any of the Sellers is a party;

          (vii) all contracts and agreements  that limit or purport to limit the
     ability of the  Company,  SAP Thai or the  Sellers  (as it affects  the SAP
     Business)  to compete in any line of  business or with any Person or in any
     geographic area or during any period of time;

          (viii) all contracts and agreements between or among the Company,  SAP
     Thai or a Seller (as it affects  the SAP  Business),  on the one hand,  and
     Parent or any Affiliate of Parent (other than the Company, SAP Thai and the
     Other  Sellers)  on the  other  hand,  other  than tax  sharing  and  other
     intercompany agreements entered into in the ordinary course of business;

          (ix) all contracts  and  agreements  providing for benefits  under any
     Plan or any policy, including applicable Chemdal U.K. and SAP Thai employee
     life insurance contracts and other similar documents; and

          (x) all other  contracts  and  agreements,  whether or not made in the
     ordinary course of business, the absence of which would be expected to have
     a Material Adverse Effect.

     (b) Except as disclosed in Section 3.15(b) of the Disclosure  Schedule,  or
as would not have a Material  Adverse  Effect,  each Material  Contract:  (i) is
valid and  binding on the  respective  parties  thereto and is in full force and
effect  and (ii)  solely  by  reason  of the  consummation  of the  transactions
contemplated by this Agreement, except to the extent that any consents set forth
in Section 3.06 of the Disclosure Schedule are not obtained, shall not terminate
or impose a penalty or other material  adverse  consequence on the SAP Business.
To Parent's Knowledge,  neither the Company,  SAP Thai nor any of the Sellers is
in breach of, or default under, any Material Contract.

     (c) Except as disclosed in Section 3.15(c) of the Disclosure  Schedule,  to
Parent's  Knowledge,  no other  party to any  Material  Contract  is in material
breach thereof or material default thereunder.
<PAGE>
     (d) Except as  disclosed  in Section  3.15(d) of the  Disclosure  Schedule,
there is no  contract,  agreement or other  arrangement  granting any Person any
preferential  right to purchase,  other than in the ordinary  course of business
consistent  with past practice,  any of the properties or assets of the Company,
SAP Thai or the Sellers relating to the SAP Business.

     SECTION  3.16.   Intellectual  Property.  (a)  Section  3.16(a)(i)  of  the
Disclosure  Schedule sets forth a true and complete list and a brief description
of each patent and patent application,  and each registration or application for
registration,  of Business Intellectual Property, Company Intellectual Property,
and SAP Thai  Intellectual  Property and Section  3.16(a)(ii)  of the Disclosure
Schedule  sets forth a true and  complete  list and a brief  description  of all
Transaction Intellectual Property that is licensed by the Company, SAP Thai or a
Seller (the "Licensed Transaction Intellectual  Property").  Except as otherwise
described in Section 3.16(a)(i) of the Disclosure Schedule, in each case where a
registration  or patent or  application  for  registration  or patent  listed in
Section  3.16(a)(i)  of the  Disclosure  Schedule  is  held by  assignment,  the
assignment  has been duly recorded with each  Governmental  Authority from which
the  original   registration   issued  or  before  which  the   application  for
registration  is pending.  Except as  disclosed  in Section  3.16(a)(ii)  of the
Disclosure  Schedule,  to Parent's Knowledge,  the operation of the SAP Business
and the rights of the Company,  SAP Thai or a Seller,  as the case may be, in or
to the  Transaction  Intellectual  Property do not conflict with or infringe the
rights of any other  Person,  and none of Parent,  the Company,  SAP Thai nor an
Other Seller has received any written claim or written notice from any Person to
such  effect.  Except as  disclosed in Section  3.16(a)(iii)  of the  Disclosure
Schedule,  to  Parent's  Knowledge,  the  conduct of the SAP  Business  does not
conflict with or infringe on the rights of any other Person, and none of Parent,
the Company,  SAP Thai nor an Other  Seller has  received  any written  claim or
written  notice from any Person to such effect.  Notwithstanding  the foregoing,
Parent  makes no  representation  or  warranties  as to the adequacy of Parent's
programs to monitor,  use and protect  patents,  trademarks,  trade  secrets and
know-how.

     (b) Except as disclosed in Section  3.16(b) of the Disclosure  Schedule and
except as would not have a  Material  Adverse  Effect:  (i) all the  Transaction
Intellectual  Property  that is owned by the Company,  SAP Thai or a Seller (the
"Owned  Transaction  Intellectual  Property")  is owned  free  and  clear of any
Encumbrance  and (ii) to  Parent's  Knowledge,  no  Actions  have  been  made or
asserted or are pending  (nor,  to  Parent's  Knowledge,  (x) has there been any
written  notification  sufficient to result in reasonable  apprehension that any
such action might ensue,  nor (y) has any such Action been  threatened)  against
the  Company,  SAP Thai or a Seller  either  (A) based  upon or  challenging  or
seeking to deny or restrict the use by the Company,  SAP Thai or a Seller of any
of the  Transaction  Intellectual  Property or (B) alleging  that the use of the
Transaction  Intellectual  Property in connection with the SAP Business, or that
any services provided, or products manufactured or sold by the Company, SAP Thai
or a Seller  (with  respect to the  conduct of the SAP  Business  infringes  any
rights of any Person).  Except as disclosed in Section 3.16(b) of the Disclosure
Schedule,  to Parent's  Knowledge,  no Person is engaging in any  activity or is
using any  Intellectual  Property  that in any manner  infringes  upon the Owned
Transaction  Intellectual Property or Licensed Transaction Intellectual Property
or upon the  rights  of the  Company,  SAP Thai or a Seller  therein.  Except as
disclosed in Section  3.16(b) of the Disclosure  Schedule,  none of Parent,  the
Company,  SAP Thai nor an Other Seller has granted any license or other right to
any other  Person with respect to the  Transaction  Intellectual  Property.  The
consummation of the transactions  contemplated by this Agreement will not result
in  the  termination  or  impairment  of any  of  the  Transaction  Intellectual
Property.

     (c) With  respect to all  Licensed  Transaction  Intellectual  Property and
Owned  Transaction  Intellectual  Property,  except as would not have a Material
Adverse Effect,  the registered  user provisions  (required due to the manner in
which the  Transaction  Intellectual  Property is  currently  being used) of all
nations requiring such registrations have been complied with.

     (d) Parent has, or has caused to be, delivered to the Purchaser correct and
complete copies of all the licenses and sublicenses for the Licensed Transaction
Intellectual   Property  and  any  and  all  ancillary  documents  modifying  or
qualifying or otherwise material thereto  (including,  without  limitation,  all
amendments,  consents and evidence of commencement  dates and expiration dates).
With respect to each of such licenses and sublicenses:
<PAGE>
          (i) such license or sublicense,  together with all ancillary documents
     delivered pursuant to the first sentence of this Section 3.16(d),  is valid
     and  binding  and in full  force  and  effect  and  represents  the  entire
     agreement between the respective  licensor and licensee with respect to the
     subject matter of such license or sublicense;

          (ii)  except as  otherwise  set forth in  Section  3.16(d)(ii)  of the
     Disclosure Schedule,  such license or sublicense will not cease to be valid
     and  binding  and in full  force  and  effect on terms  identical  to those
     currently  in effect as a result of the  consummation  of the  transactions
     contemplated  by  this  Agreement,   nor  will  the   consummation  of  the
     transactions  contemplated by this Agreement constitute a breach or default
     under  such  license  or  sublicense  or  otherwise  give the  licensor  or
     sublicensor a right to terminate such license or sublicense;

          (iii) except as otherwise  disclosed  in Section  3.16(d)(iii)  of the
     Disclosure Schedule,  with respect to each such license or sublicense:  (A)
     none of Parent, the Company,  SAP Thai nor an Other Seller has received any
     written  notice of  termination  or  cancellation  under  such  license  or
     sublicense and no licensor or  sublicensor  has any right of termination or
     cancellation under such license or sublicense except in connection with the
     default of the Company, SAP Thai or an Other Seller thereunder, (B) none of
     Parent,  the Company,  SAP Thai nor an Other Seller has received any notice
     of a breach or default  under such license or  sublicense,  which breach or
     default has not been cured,  and (C) none of Parent,  SAP Thai, the Company
     nor an Other Seller has granted to any other Person any rights,  adverse or
     otherwise, under such license or sublicense;

          (iv)  none of the  Company,  SAP  Thai,  a  Seller,  nor (to  Parent's
     Knowledge)  any other party to such license or  sublicense  is in breach or
     default in any material respect,  and, to Parent's Knowledge,  no event has
     occurred that, with notice or lapse of time would  constitute such a breach
     or default or permit  termination,  modification or acceleration under such
     license or sublicense;

          (v) to Parent's  Knowledge,  no Actions  have been made or asserted or
     are  pending  (nor,  to  Parent's  Knowledge,  has  any  such  Action  been
     threatened,  nor has there been any  notification  sufficient  to result in
     reasonable  apprehension  that any such  Action  might  ensue)  against the
     Company,  SAP Thai or a Seller  either  (A) based  upon or  challenging  or
     seeking to deny or restrict the use by the Company, SAP Thai or a Seller of
     any of the Licensed Transaction  Intellectual Property or (B) alleging that
     any  Licensed   Transaction   Intellectual   Property  is  being  licensed,
     sublicensed or used in violation of any Intellectual Property rights of any
     Person, or (C) alleging that any services provided or products manufactured
     or sold by the Company, SAP Thai or a Seller using any Licensed Transaction
     Intellectual Property (with respect to the conduct of the SAP Business) are
     being  provided,  manufactured  or  sold in  violation  of any  patents  or
     trademarks or other rights of any Person; and

          (vi) to  Parent's  Knowledge,  no  Person  is using  any  Intellectual
     Property  that  in any  manner  infringes  upon  the  Licensed  Transaction
     Intellectual  Property  or upon the  rights of the  Company,  SAP Thai or a
     Seller therein.

     (e) Except as set forth in Section 3.16(e) of the Disclosure Schedule, with
respect to Transaction  Intellectual  Property,  Parent has not received written
notification that any pending applications to register trademarks, service marks
or  copyrights  or any pending  patent  applications  will not be granted or, if
granted, will not be valid and enforceable;  provided,  however, that rejections
to requested patents are customarily received from the U.S. Patent and Trademark
Office in connection with filed patent applications.  The patents and trademarks
included in the Transaction Intellectual Property have not been adjudged invalid
or  unenforceable  in whole or part,  and to Parent's  Knowledge,  are valid and
enforceable.  Parent makes no representation or warranty that any pending patent
applications relating to Transaction Intellectual Property will be granted.

     (f) The Transaction  Intellectual Property constitutes all the Intellectual
Property  used or held or  intended  to be used by the  Company,  SAP  Thai or a
Seller  or  forming  a part of,  used,  held or  intended  to be used in the SAP
Business and there are no other items of Intellectual Property owned or licensed
by Parent that are material to the Company, SAP Thai or the SAP Business.
<PAGE>
     SECTION 3.17. Real Property. (a) Section 3.17(a) of the Disclosure Schedule
lists: (i) the street address of each parcel of SAP Real Property, (ii) the date
on which each parcel of SAP Real  Property  was  acquired  or leased,  (iii) the
current  owner of each  such  parcel  of SAP  Real  Property,  (iv)  information
relating to the  recordation  of any deed  pursuant to which each such parcel of
SAP Real  Property  was  acquired and (v) the current use of each such parcel of
SAP Real Property.

     (b) The Sellers  will make  available  to the  Purchaser  true and complete
copies  of each  deed for each  parcel  of SAP Real  Property  and all the title
insurance policies, title reports, licensed surveys,  certificates of occupancy,
environmental  reports and audits,  appraisals,  Permits,  other  material title
documents  for the SAP Real Property  which are in their  possession or control.
Except as described in Section 3.17(b) of the Disclosure  Schedule,  or as would
not  have a  Material  Adverse  Effect,  (i)  there is no  violation  of any Law
(including,  without limitation, any building,  planning or zoning Law) relating
to any of the SAP  Real  Property,  (ii)  either  the  Company,  SAP Thai or the
Sellers,  as the case may be, is in peaceful and undisturbed  possession of each
parcel of SAP Real Property and there are no contractual  or legal  restrictions
that  preclude or restrict  the ability to use the premises for the purposes for
which they are  currently  being  used,  and (iii) to  Parent's  Knowledge,  all
existing water,  sewer, steam, gas,  electricity,  telephone and other utilities
required for the construction,  use, occupancy, operation and maintenance of the
SAP Real  Property  are adequate for the conduct of the business of the Company,
SAP Thai and the Sellers as it has been and currently is conducted and there are
no material latent defects or adverse physical conditions affecting the SAP Real
Property  or  any  of  the   facilities,   buildings,   structures,   erections,
improvements,  fixtures,  fixed  assets and  personalty  of a  permanent  nature
annexed,  affixed or  attached  to,  located on or forming  part of the SAP Real
Property  that  would  have a Material  Adverse  Effect.  Except as set forth in
Section 3.17(b) of the Disclosure  Schedule,  neither the Company,  SAP Thai nor
any of the  Sellers  has leased or  subleased  any parcel or any  portion of any
parcel of SAP Real Property to any other Person.

     (c) There are no condemnation  proceedings or eminent domain proceedings of
any kind of which Parent has received written notice nor, to Parent's Knowledge,
are there any such proceedings threatened against the SAP Real Property.

     (d) Except as set forth in Section 3.17 of the Disclosure Schedule, all the
SAP Real Property is occupied under a valid and current certificate of occupancy
or similar permit and, to Parent's Knowledge,  the transactions  contemplated by
this Agreement  will not require the issuance of any new or amended  certificate
of occupancy and, to Parent's  Knowledge,  there are no facts that would prevent
the SAP Real  Property  from  being  occupied  by the  Company,  SAP Thai or the
Purchaser,  as the case may be,  after the  Closing  in  substantially  the same
manner as occupied by the Company,  SAP Thai or the Sellers immediately prior to
the Closing.

     (e) Except as set forth in Section  3.17 of the  Disclosure  Schedule,  all
improvements  on the  SAP  Real  Property  constructed  by or on  behalf  of the
Company, SAP Thai or the Sellers or, to Parent's Knowledge, constructed by or on
behalf of any other Person were  constructed  in compliance  with all applicable
Laws  (including,  without  limitation,  any building,  planning or zoning Laws)
affecting  such SAP Real  Property,  except,  in each case,  as would not have a
Material Adverse Effect.

     (f) No  improvements  on the SAP Real Property and none of the current uses
and  conditions  thereof  violate  any  applicable  deed  restrictions  or other
applicable covenants,  restrictions,  agreements,  existing site plan approvals,
zoning or subdivision  regulations or urban  redevelopment  plans as modified by
any duly issued variances,  and no permits,  licenses or certificates pertaining
to the  ownership  or operation of all  improvements  on the SAP Real  Property,
other  than  those  required  to be  assigned  to  Purchaser  pursuant  to  this
Agreement,  are required by any Governmental  Authority having jurisdiction over
the SAP Real  Property,  except,  in each  case,  as would  not have a  Material
Adverse Effect.

     (g) Except for fences,  curbs,  gutters,  sidewalks  and light  fixtures or
signs,  all  improvements  on any SAP Real  Property  are wholly  within the lot
limits of such SAP Real Property and do not encroach on any adjoining  premises,
and there are no  encroachments  on any SAP Real  Property  by any  improvements
located on any  adjoining  premises,  except,  in each case, as would not have a
Material Adverse Effect.
<PAGE>
     SECTION  3.18.  Tangible  Personal  Property.  (a)  Section  3.18(a) of the
Disclosure  Schedule  lists,  as of the  date  thereof,  each  material  item or
distinct group of machinery,  equipment, tools, supplies,  furniture,  fixtures,
personalty,  vehicles,  rolling stock and other tangible personal property other
than  Inventories (the "Tangible  Personal  Property") used primarily in the SAP
Business  or owned or leased by the  Company,  SAP Thai or a Seller,  other than
certain Excluded Assets described therein.

     (b) Parent has, or has caused to be,  delivered to the  Purchaser  true and
complete  copies of all material  leases and  subleases  for  Tangible  Personal
Property and any and all material ancillary documents modifying or qualifying or
otherwise  material  thereto  (including,  without  limitation,  all amendments,
consents and evidence of commencement dates and expiration dates).  With respect
to each of such material leases and subleases:

          (i) such lease or  sublease,  together  with all  ancillary  documents
     delivered pursuant to the first sentence of this Section 3.18(b), is legal,
     valid, binding, enforceable and in full force and effect and represents the
     entire agreement  between the respective  lessor and lessee with respect to
     such property;

          (ii)  except  as set  forth  in  Section  3.18(b)  of  the  Disclosure
     Schedule,  such  lease or  sublease  will not  cease  to be  legal,  valid,
     binding,  enforceable  and in full force and effect on terms  identical  to
     those  currently  in  effect  as  a  result  of  the  consummation  of  the
     transactions  contemplated by this Agreement,  nor will the consummation of
     the  transactions  contemplated  by this  Agreement  constitute a breach or
     default  under such lease or sublease or otherwise  give the lessor a right
     to terminate such lease or sublease;

          (iii)  except  as  otherwise  disclosed  in  Section  3.18(b)  of  the
     Disclosure Schedule,  with respect to each such lease or sublease: (A) none
     of Parent,  the  Company,  SAP Thai nor an Other  Seller has  received  any
     written notice of cancellation or termination  under such lease or sublease
     and no lessor has any right of termination or cancellation under such lease
     or sublease  except as may be  provided  therein,  (B) none of Parent,  the
     Company,  SAP Thai nor an Other Seller has received any written notice of a
     breach or default  under such lease or  sublease,  which  breach or default
     has, to Parent's  Knowledge,  not been cured,  and (C) none of Parent,  the
     Company,  SAP Thai nor an Other  Seller has granted to any other Person any
     material rights, adverse or otherwise, under such lease or sublease; and

          (iv) none of the  Company,  SAP Thai,  the  Sellers  nor (to  Parent's
     Knowledge)  any  other  party to such  lease or  sublease,  is in breach or
     default in any material  respect and, to Parent's  Knowledge,  no event has
     occurred that, with notice or lapse of time, would constitute such a breach
     or default or permit  termination,  modification or acceleration under such
     lease or sublease.

     (c) Either the Company,  SAP Thai or the  Sellers,  as the case may be, has
the full right to  exercise  any  renewal  options  contained  in the leases and
subleases  pertaining  to  the  Tangible  Personal  Property  on the  terms  and
conditions  contained  therein and upon due exercise  would be entitled to enjoy
the use of each item of leased Tangible  Personal  Property for the full term of
such renewal options.

     SECTION 3.19. Assets.  (a) Except as disclosed in the Disclosure  Schedule,
either the Company,  SAP Thai or a Seller,  as the case may be, owns,  leases or
has the legal right to use all the  properties and assets used or intended to be
used in the conduct of the SAP Business and, with respect to contract rights, is
a party to and enjoys the right to the benefits of all contracts, agreements and
other  arrangements  used or intended to be used by the  Company,  SAP Thai or a
Seller in the  conduct of the SAP  Business  (all such  assets,  properties  and
contract rights being, the "Transferred Assets"); provided, however, that to the
extent   that   portions   of   the   representations   in   Sections   3.16(a),
3.16(d)(iv)through(vi)  and 3.16(e) are made to  Parent's  Knowledge,  then this
sentence  shall be  similarly  qualified as respects  such  portions of Sections
3.16(a),  3.16(d)(iv)through(vi)  and 3.16(e). Either the Company, SAP Thai or a
Seller, as the case may be, has good and marketable title to, or, in the case of
leased or subleased  assets,  valid and subsisting  leasehold  interests in, all
such  assets,  free and clear of all  Encumbrances,  except (i) as  disclosed in
Sections 3.15,  3.16,  3.17,  3.18 or 3.19(a) of the Disclosure  Schedule or the
Agreement, and (ii) Permitted Encumbrances.

     (b) The Transferred Assets constitute all the properties, assets and rights
used, held or intended to be used in, and all such properties, assets and rights
as are primarily related to, or necessary in the conduct of, the SAP Business as
currently conducted by the Company, SAP Thai or the Sellers, except as described
in Section 3.19(b) of the Disclosure Schedule.
<PAGE>
     SECTION 3.20.  Employee Benefit Matters.  (a) Plans and Material Documents.
Section 3.20(a) of the Disclosure  Schedule lists (i) each employee benefit plan
(as defined in Section 3(3) of the Employee  Retirement  Income  Security Act of
1974, as amended ("ERISA")), and each other bonus, stock option, stock purchase,
restricted  stock,  incentive,  deferred  compensation,  retiree medical or life
insurance,  supplemental retirement,  severance or other material benefit plans,
programs, policies or arrangements, and all employment,  termination,  severance
or other  contracts  or  agreements  (whether or not in  writing),  to which the
Company,  SAP Thai,  or a Seller (with  respect to the SAP Business) is a party,
with respect to which the Company,  SAP Thai,  or a Seller (with  respect to the
SAP Business) has any  obligations  or which are  maintained,  contributed to or
sponsored by the Company,  SAP Thai,  or a Seller for the benefit of any current
or former  independent  contractor  of the Company,  SAP Thai, or a Seller (with
respect  to the SAP  Business)  or any  current or former  employee,  officer or
director  of the  Company,  SAP  Thai,  or a  Seller  (with  respect  to the SAP
Business), (ii) each employee benefit plan for which the Company, SAP Thai, or a
Seller (with respect to the SAP Business)  could incur  liability  under Section
4069 of ERISA in the event  such plan has been or were to be  terminated,  (iii)
any plan in respect of which the Company, SAP Thai, or a Seller (with respect to
the SAP Business)  could incur liability under Section 4212(c) of ERISA and (iv)
any  contracts,  arrangements  or  understandings  between  Parent or any of its
Affiliates and any employee of the Company,  SAP Thai, or a Seller (with respect
to the SAP Business), including, without limitation, any contracts, arrangements
or understandings relating to the sale of the Company ((i), (ii), (iii) and (iv)
collectively,  the  "Plans").  Except  as  described  in  Section  3.20  of  the
Disclosure  Schedule,  each Plan is in  writing  and Parent  has  furnished  the
Purchaser  with a complete  and  accurate  copy of each Plan and a complete  and
accurate copy of each material  document  prepared in connection  with each such
Plan including,  without  limitation,  (i) a copy of each trust or other funding
arrangement,  (ii)  each  summary  plan  description  and  summary  of  material
modifications,  (iii) the IRS Form 5500  filed with  respect to the most  recent
plan year,  (iv) the most recently  received IRS  determination  letter for each
such Plan,  and (v) the most recently  prepared  actuarial  report and financial
statement  in  connection  with each such Plan.  Except as  disclosed in Section
3.20(a) of the Disclosure  Schedule,  there are no other employee benefit plans,
programs,  arrangements  or agreements,  whether formal or informal,  whether in
writing or not, to which the Company, SAP Thai, or a Seller (with respect to the
SAP  Business) is a party,  with respect to which the  Company,  SAP Thai,  or a
Seller  (with  respect  to the SAP  Business)  has any  obligation  or which are
maintained,  contributed  to or sponsored by the Company,  SAP Thai, or a Seller
for the benefit of any current or former independent  contractor of the Company,
SAP Thai,  or a Seller  (with  respect to the SAP  Business)  or any  current or
former employee, officer or director of the Company, SAP Thai, or a Seller (with
respect to the SAP Business). Neither the Company, SAP Thai nor any Seller (with
respect  to the SAP  Business)  has any  express or  implied  commitment  (i) to
create,  incur  liability  with respect to or cause to exist any other  employee
benefit  plan,  program  or  arrangement,  (ii) to enter  into any  contract  or
agreement  to provide  compensation  or benefits to any  individual  or (iii) to
modify, change or terminate any Plan, other than with respect to a modification,
change or termination required by ERISA or the Code.

     (b) Absence of Certain Types of Plans. None of the Plans is a multiemployer
plan  (within  the  meaning  of  Section   3(37)  or  4001(a)(3)  of  ERISA)  (a
"Multiemployer  Plan") or a single employer  pension plan (within the meaning of
Section 4001(a)(15) of ERISA) for which the Company, SAP Thai, or a Seller (with
respect to the SAP Business) could incur liability under Section 4063 or 4064 of
ERISA (a "Multiple  Employer Plan").  Except as described in Section 3.20 of the
Disclosure  Schedule,  none of the Plans provides for the payment of separation,
severance,  termination or similar-type benefits to any Person or obligates, the
Company,  SAP Thai,  or a Seller  (as it  relates  to the SAP  Business)  to pay
separation,  severance, termination bonus, retirement, enhanced benefits nor any
acceleration,  vesting,  distribution  or increase in benefits or obligations or
similar-type benefits solely as a result of any transaction contemplated by this
Agreement  or as a result of a "change in  control",  within the meaning of such
term under Section 280G of the Code.  None of the Plans  provides for or promise
retiree medical,  disability or life insurance benefits to any current or former
employee,  officer or  director  of the  Company,  SAP Thai,  or a Seller  (with
respect to the SAP Business), except to the extent required by Part 6 of Title I
of ERISA.

     (c)  Compliance  with  Applicable  Law.  Except  as would  not  result in a
Material Adverse Effect, (i) each Plan is operated in all respects in accordance
with the  requirements of all applicable  Law,  including,  without  limitation,
ERISA and the Code and, to Parent's  Knowledge,  all Persons who  participate in
the  operation of such Plans and all Plan  "fiduciaries"  (within the meaning of
Section  3(21) of ERISA)  are  acting in all  respects  in  accordance  with the
provisions of applicable Law, including, without limitation, ERISA and the Code;
(ii) the Company,  SAP Thai and each Seller (with  respect to the SAP  Business)
have performed all obligations  required to be performed by them under,  are not
in any respect in default under or in violation of, and have no knowledge of any
default or violation by

<PAGE>
any party to, any Plan;  and (iii) no legal action,  suit or claim is pending or
threatened  with  respect to any Plan  (other  than  claims for  benefits in the
ordinary  course)  and no fact or event  exists that could give rise to any such
action, suit or claim.

     (d)  Qualification  of Certain  Plans.  Each Plan which is  intended  to be
qualified  under  Section  401(a) of the Code or Section  401(k) of the Code has
received a favorable  determination  letter from the IRS that it is so qualified
and each trust  established in connection  with any Plan which is intended to be
exempt  from  federal  income  taxation  under  Section  501(a)  of the Code has
received  a  determination  letter  from the IRS that it is so  exempt  and,  to
Parent's  Knowledge,  no fact or  event  has  occurred  since  the  date of such
determination  letter from the IRS to adversely  affect the qualified  status of
any such Plan or the exempt status of any such trust.  Each trust  maintained or
contributed  to by, the  Company,  SAP Thai or a Seller  for the  benefit of any
current or former  independent  contractor of the Company,  SAP Thai or a Seller
(with respect to the SAP Business) or any current or former employee, officer or
director of the Company, SAP Thai or a Seller (with respect to the SAP Business)
which  is  intended  to  be  qualified  as a  voluntary  employees'  beneficiary
association  and which is  intended to be exempt from  federal  income  taxation
under  Section  501(c)(9)  of the Code has  received a  favorable  determination
letter  from the IRS that it is so  qualified  and so exempt  and,  to  Parent's
Knowledge, no fact or event has occurred since the date of such determination by
the IRS to adversely affect such qualified or exempt status.

     (e) Absence of Certain  Liabilities and Events.  With respect to the Plans,
no event has occurred and, to Parent's  Knowledge,  there exists no condition or
set of circumstances in connection with which the Company, SAP Thai, or a Seller
(with respect to the SAP Business) could reasonably be expected to be subject to
any  liability  under  the  terms of such  Plans,  ERISA,  the Code or any other
applicable Law, which in any such case would have a Material Adverse Effect.

     (f) Plan Contributions and Funding. All contributions, premiums or payments
required to be made with respect to any Plan are fully deductible for income tax
purposes.  Parent has not  received  notice that any such  deduction  previously
claimed has been challenged by any government entity.

     (g) Laws Relating to Disability.  Except as set forth in Section 3.20(g) of
the Disclosure Schedule,  the Company, SAP Thai and each Seller (with respect to
the SAP Business) are in compliance with the  requirements of the Americans With
Disabilities  Act,  the  U.K.  Disability   Discrimination  Act  1995,  and  any
applicable  Thai Law  including,  without  limitation,  the Cripples  Capability
Reformation  Act, B.E. 2534 (1991),  except to the extent that failure to comply
with such legislation would not have a Material Adverse Effect.

     (h) WARN Act. The  Company,  SAP Thai and each Seller have not incurred any
liability under,  and have complied in all respects with, the Worker  Adjustment
Retraining  Notification Act and the regulations  promulgated thereunder and all
similar state and local  "plant-closing"  Laws  ("WARN"),  and do not reasonably
expect to incur any such  liability  as a result of  actions  taken or not taken
prior to the  Closing  Date,  except to the extent  that such  liability  may be
incurred as a result of the transaction contemplated by this Agreement.  Section
3.20(h) of the  Disclosure  Schedule  lists (i) all the employees  terminated or
laid off by the Company during the 90 days prior to the date hereof and (ii) all
the  employees of the Company who have  experienced a reduction in hours of work
of more than 50%  during any month  during the 90 days prior to the date  hereof
and describes all notices given by the Company in connection  with WARN.  Parent
will,  by  written  notice  to the  Purchaser,  update  Section  3.20(h)  of the
Disclosure  Schedule  at Closing to include any such  terminations,  layoffs and
reductions  in hours from the date  hereof  through  the  Closing  Date and will
furnish the Purchaser  with any related  information  which they may  reasonably
request.  Parent will  indemnify and hold harmless the Purchaser with respect to
any liability  under WARN to the extent  arising from the actions or action,  of
the  Company,  SAP Thai or each Seller on or prior to the Closing Date except to
the extent relating to the transactions contemplated by this Agreement.

     (i) Foreign  Benefit Plans.  In addition to the foregoing,  with respect to
each Plan that is subject to or  governed by the Law of any  jurisdiction  other
than the United States or any State or Commonwealth of the United States (each a
"Foreign  Benefit Plan"),  and except for matters that would not have a Material
Adverse Effect:

<PAGE>
     (A) all employer and employee  contributions  to each Foreign  Benefit Plan
required by Law or by the terms of such Foreign Benefit Plan have been made, or,
if applicable, accrued in accordance with normal accounting practices, and a pro
rata  contribution  for the period prior to and  including  the Closing Date has
been made or accrued;

     (B) the fair  market  value of the assets of each  funded  Foreign  Benefit
Plan, the liability of each insurer for any Foreign  Benefit Plan funded through
insurance or the book reserve established for any Foreign Benefit Plan, together
with any  accrued  contributions,  is  sufficient  to procure or provide for the
benefits determined on an ongoing basis (actual or contingent) calculated to the
Closing Date using a methodology  consistent with Financial Accounting Standards
Board  Statement  No.  87 ("FAS  No.  87")  calculating  the  projected  benefit
obligations,  applying the  projected  unit credit  method,  with respect to all
current  participants under such Foreign Benefit Plan according to the actuarial
assumptions   and   valuations   most  recently   used  to  determine   employer
contributions to such Foreign Benefit Plan, and the transactions contemplated by
this Agreement  shall not cause such assets or insurance  obligations to be less
than such benefit obligations;

     (C) each Foreign Benefit Plan required to be registered has been registered
and has been maintained in good standing with applicable regulatory  authorities
and each Foreign  Benefit Plan is now and always has been operated in compliance
with all applicable non-U.S. Laws;

     (D) the Company,  the Sellers and SAP Thai have provided the Purchaser with
true and  complete  copies of all Foreign  Benefit  Plans (and in the case where
such Foreign  Benefit Plans are not in writing,  a written  description  of each
such Foreign Benefit Plan)  including all  information  relating to all benefits
payable or  prospectively  payable  under each Foreign  Benefit Plan  (including
supplemental benefits). Except as set forth in Section 3.20(i) of the Disclosure
Schedule, there are no Foreign Benefit Plans, programs,  schemes or arrangements
to pay any  pension  or make  any  other  payment  after  retirement,  death  or
otherwise  with respect to any  employee or former  employee of the SAP Business
and each Seller, SAP Thai and the Company do not sponsor, contribute or maintain
any scheme,  plan,  program or  arrangement  having as its purpose or one of its
purposes the making of such payments or the provision or such benefits;

     (E) the Company,  the Sellers and SAP Thai have provided the Purchaser with
a  complete  and  accurate  copy of all the  documentation  (including,  without
limitation,  the trust deeds, rules,  announcements and booklets) governing each
Foreign Benefit Plan;

     (F)  neither  the  Company,  SAP Thai nor any  Seller  are  engaged  in any
litigation,  arbitration  or mediation  proceedings  with respect to any Foreign
Benefit  Plan,  and  there  exists  no  condition  or  set of  circumstances  in
connection with which the Company, SAP Thai or a Seller (with respect to the SAP
Business)  could  reasonably  be  expected  to be  subject  to  any  litigation,
arbitration or mediation proceeding with respect to any Foreign Benefit Plan;

     (G) neither the Company,  SAP Thai nor any Seller (with  respect to the SAP
Business) are in violation of any non-U.S. Laws, including,  without limitation,
the U.K. Financial Services Act; and

     (H) with respect to any part-time employees employed by Chemdal U.K. at any
time within the preceding  12-month period,  to Parent's  Knowledge,  there have
been no  terminations  of such  part-time  employees  which could  result in any
Liability  under Article 119 of the Treaty of Rome or Section 62 of the Pensions
Act, 1995.

     SECTION  3.21.  Labor  Matters.  With  respect to the SAP  Business and the
Persons employed in connection with the SAP Business, and except as set forth in
Section 3.21 of the Disclosure  Schedule or as would not have a Material Adverse
Effect,  (a)  neither  the  Company,  SAP  Thai,  or a Seller  is a party to any
collective  bargaining  agreement or other labor union  contract  applicable  to
Persons employed by the Company, SAP Thai or a Seller and currently there are no
organizational  campaigns,  petitions or other  unionization  activities seeking
recognition of a collective  bargaining unit which could  reasonably  affect the
SAP  Business,  (b)  there  are no  controversies,  strikes,  slowdowns  or work
stoppages pending or, to Parent's Knowledge, threatened between the Company, SAP
Thai or a Seller and any of their respective employees, and neither the Company,
SAP Thai nor a Seller has experienced any

<PAGE>
such controversy, strike, slowdown or work stoppage within the past three years,
(c)  neither the  Company,  SAP Thai nor any Seller has  breached  or  otherwise
failed to comply with the provisions of any applicable  collective bargaining or
union  contract  and there are no written  grievances  outstanding  against  the
Company, SAP Thai or a Seller under any such agreement or contract,  (d) neither
the Company,  SAP Thai nor a Seller has committed unfair labor practices nor has
there been any unfair labor practice complaints pending against the Company, SAP
Thai or a  Seller  before  the  National  Labor  Relations  Board  or any  other
Governmental  Authority  involving  union  representation  or  employees  of the
Company,  SAP Thai or the Sellers, (e) the Company, SAP Thai and the Sellers are
currently in compliance  with all applicable  Laws relating to the employment of
labor,  including those related to wages, hours,  collective  bargaining and the
payment and  withholding of Taxes and other sums as required by the  appropriate
Governmental   Authority  and  have   withheld  and  paid  to  the   appropriate
Governmental  Authority  or  are  holding  for  payment  not  yet  due  to  such
Governmental Authority all amounts required to be withheld from employees of the
Company,  SAP Thai and each  Seller and are not liable for any arrears of wages,
Taxes,  penalties or other sums for failure to comply with any of the foregoing,
(f) the  Company,  SAP  Thai  and the  Sellers  have  paid in full to all  their
respective  employees or adequately accrued for in accordance with U.S. GAAP all
wages, salaries, commissions, bonuses, benefits and other compensation due to or
on behalf of such  employees,  (g) there is no  written  claim  with  respect to
payment  of  wages,  salary or  overtime  pay that has been  asserted  or is now
pending or, to Parent's Knowledge,  threatened before any Governmental Authority
with respect to any Persons currently or formerly  employed by the Company,  SAP
Thai or a Seller, (h) neither the Company,  SAP Thai nor a Seller is a party to,
or otherwise bound by, any consent decree with, or citation by, any Governmental
Authority relating to employees or employment practices, (i) there is no written
charge or proceeding with respect to a violation of any  occupational  safety or
health  standards  that has been  asserted  or is now  pending  or, to  Parent's
Knowledge,  threatened with respect to the Company,  SAP Thai or any Seller, and
(j) there is no written  charge of  discrimination  in  employment or employment
practices,   as  respects  any  legally  protected  category,  for  any  reason,
including,  without limitation,  age, gender,  race or religion,  which has been
asserted  or is now pending or, to  Parent's  Knowledge,  threatened  before the
United States Equal Employment Opportunity Commission, or any other Governmental
Authority in any jurisdiction in which the Company, SAP Thai or any Sellers have
employed or currently employ any Person.

     SECTION 3.22. Key Employees. All directors, officers, management employees,
and  technical  and  professional  employees of the  Company,  SAP Thai and each
Seller employed in the SAP Business are under an obligation to the Company,  SAP
Thai or a Seller to maintain  in  confidence  all  confidential  or  proprietary
information  acquired by them in the course of their employment and to assign to
the Company,  SAP Thai or a Seller all inventions  made by them within the scope
of  their  employment  during  such  employment  and  for  a  reasonable  period
thereafter.  The  Company,  SAP Thai and the  Sellers  shall use all  reasonable
efforts to assign such arrangements to the Purchaser as of the Closing Date.

     SECTION  3.23.  Taxes.  (a)  Except  as set  forth in  Section  3.23 of the
Disclosure Schedule, (i) all returns and reports in respect of Taxes required to
be filed by or with respect to the Company,  SAP Thai or the Sellers  (including
the  consolidated  federal  income Tax return of Parent and any state,  local or
foreign Tax return or report that  includes the  Company,  SAP Thai or any Other
Seller on a  consolidated  or combined  basis) have been timely filed,  (ii) all
Taxes  required to be shown on such  returns and reports or  otherwise  due have
been timely paid,  (iii) all such returns and reports (insofar as they relate to
the  activities  or income of the Company,  SAP Thai,  the SAP Assets or the SAP
Business)  are true,  correct and  complete in all  material  respects,  (iv) no
adjustment  relating to such  returns or reports has been  proposed  formally or
informally by any Tax authority  (insofar as either relates to the activities or
income of the  Company,  SAP Thai,  the SAP Assets or the SAP  Business or could
result in  Liability  of the  Company  or SAP Thai on the basis of joint  and/or
several  liability)  and, to Parent's  Knowledge,  no basis  exists for any such
adjustment,  (v) there are no  pending  or, to  Parent's  Knowledge,  threatened
actions or  proceedings  for the  assessment  or collection of Taxes against the
Company,  SAP Thai,  the SAP Assets or the SAP  Business  or  (insofar as either
relates to the activities or income of the Company,  SAP Thai, the SAP Assets or
the SAP  Business or could result in Liability of the Company or SAP Thai on the
basis of joint and/or several  liability) any  corporation  that was included in
the filing of a return with Parent,  the Company,  SAP Thai or the Other Sellers
on a consolidated or combined basis, (vi) no consent under Section 341(f) of the
Code has been filed with respect to the Company or SAP Thai,  (vii) there are no
Tax  liens on any  assets  of the  Company,  SAP Thai or any of the SAP  Assets,
(viii)  neither  Parent nor any  Subsidiary  or Affiliate of Parent or any Other
Seller is a party to any agreement or arrangement that would result,  separately
or in the aggregate,  in the payment of any "excess parachute payments",  within
the meaning of Section 280G of the Code (insofar as relates to the Company,  SAP
Thai or the SAP Business),  (ix) no acceleration of the vesting schedule for any
property that is  substantially  unvested  within the meaning of the Regulations
under  Section

<PAGE>
83 of the Code will occur in connection  with the  transactions  contemplated by
this  Agreement  (insofar  as  relates  to the  Company,  SAP  Thai  or the  SAP
Business),  except  for the  accelerated  vesting  of stock  options  and  other
benefits pursuant to Article VI hereof;  (x) from and after January 1, 1990, the
Company has been and  continues to be a member of the  affiliated  group (within
the  meaning  of  Section  1504(a)(1)  of the  Code) for  which  Parent  files a
consolidated  return as the common  parent,  and has not been  includible in any
other  consolidated  return  for any  taxable  period  for which the  statute of
limitations  has not expired,  (xi) neither the Company nor SAP Thai has been at
any  time a member  of any  partnership  or joint  venture  or the  holder  of a
beneficial  interest  in any trust for any  period  for  which  the  statute  of
limitations for any Tax has not expired, (xii) the Company has not been a United
States real property holding corporation within the meaning of Section 897(c)(2)
of the Code during the applicable  period specified in Section  897(c)(1)(A)(ii)
of the Code, (xiii) none of the SAP Assets held by SAP Thai or the Other Sellers
constitute U.S. real property  interests within the meaning of Section 897(c)(i)
of the  Code,  (xiv)  neither  the  Company,  nor  SAP  Thai is  subject  to any
accumulated  earnings Tax penalty or personal  holding company Tax, and (xv) SAP
Thai has  never  been  included  in the  filing  of a Tax  return or report on a
consolidated, combined or unitary basis.

     (b) Except as  disclosed in Section 3.23 of the  Disclosure  Schedule:  (i)
there  are no  outstanding  waivers  or  agreements  extending  the  statute  of
limitations  for any period with  respect to any Tax to which the Company or SAP
Thai may be subject;  (ii) the Company (A) has not and is not  projected to have
an amount  includible  in its income for the current  taxable year under Section
951 of the Code, (B) does not have an  unrecaptured  overall foreign loss within
the  meaning of Section  904(f) of the Code and (C) has not  participated  in or
cooperated  with an  international  boycott within the meaning of Section 999 of
the Code;  (iii) neither the Company nor SAP Thai has any (A) income  reportable
for a period  ending after the Closing Date but  attributable  to a  transaction
(e.g., an installment  sale) occurring in or a change in accounting  method made
for a period ending on or prior to the Closing Date which resulted in a deferred
reporting  of income from such  transaction  or from such  change in  accounting
method (other than a deferred intercompany transaction), or (B) deferred gain or
loss arising out of any  deferred  intercompany  transaction  (insofar as either
could  result  in  material  Taxes to the  Company  or SAP Thai for any  taxable
period,  or portion of any taxable period,  ending after the Closing Date); (iv)
there are no requests from any  governmental or taxing authority for information
currently  outstanding  that could  affect the Taxes of the Company or SAP Thai;
(v) there are no proposed  reassessments  of any property  owned by the Company,
SAP Thai or of any of the SAP Assets and there are no other  proposals  from any
governmental  or taxing  authority  that could increase the amount of any Tax to
which the  Purchaser (in respect of the SAP  Business),  the Company or SAP Thai
would be subject,  or which would be imposed, in respect of real property of the
Company,  SAP Thai or the SAP Business;  (vi) the Company is not obligated under
any  agreement  with  respect  to  industrial   development   bonds  or  similar
obligations,  with respect to which the  excludibility  from gross income of the
holder for federal  income Tax  purposes  could be affected by the  transactions
contemplated  hereunder;  and (vii) no power of attorney  that is  currently  in
force has been  granted  with  respect  to any  request  for a ruling or similar
matter relating to Taxes that could affect the Company, SAP Thai, the SAP Assets
or the SAP Business.

     (c) (i)  Section  3.23(c)  of the  Disclosure  Schedule  lists all  income,
franchise  and  similar  Tax returns  and  reports  (federal,  state,  local and
foreign)  filed with  respect to the Company  and SAP Thai for  taxable  periods
ended on or after  December  31, 1997,  indicates  for which  jurisdictions  Tax
returns and reports have been filed on the basis of a unitary  group,  indicates
the most  recent  income,  franchise  or  similar  Tax return or report for each
relevant  jurisdiction  for which an audit has been  completed or the statute of
limitations  has lapsed and indicates all Tax returns and reports that currently
are the subject of audit, (ii) Parent has delivered to the Purchaser correct and
complete copies of all federal, state and foreign income,  franchise and similar
Tax returns and reports,  examination  reports,  and statements of  deficiencies
assessed against or agreed to by the Company and SAP Thai since January 1, 1996,
(iii)  Parent has  delivered to the  Purchaser a true and  complete  copy of any
Tax-sharing or allocation agreement or arrangement  involving the Company or SAP
Thai and a true and  complete  description  of any such  unwritten  or  informal
agreement  or  arrangement,  and (iv)  Parent  has  delivered  to the  Purchaser
complete and correct  copies of all pro forma federal  income Tax returns of the
Company  prepared in  connection  with the  Parent's  or any other  consolidated
federal income Tax return,  accompanied by a schedule  reconciling  the items in
the pro forma Tax return to the items as included in the consolidated Tax return
for all taxable years ending on or after December 31, 1997.

<PAGE>
     SECTION 3.24.  Insurance.  (a) Section  3.24(a) of the Disclosure  Schedule
sets forth the  following  information  with  respect to each  insurance  policy
(including  policies  providing   property,   casualty,   liability,   including
directors' and officers' liability,  workers' compensation,  and bond and surety
arrangements)  under which the  Company,  SAP Thai,  an Other  Seller or the SAP
Business  has been an  insured,  a named  insured  or  otherwise  the  principal
beneficiary of coverage at any time within the past three years:

          (i) the name, address and telephone number of the agent or broker;

          (ii) the name of the  insurer and the names of the  principal  insured
     and each named insured;

          (iii) the policy number and the period of coverage;

          (iv) the type,  scope (including an indication of whether the coverage
     was on a claims  made,  occurrence  or other  basis) and amount  (including
     deductibles) of coverage; and

          (v) the premium charged for the policy, including, without limitation,
     a description of any retroactive  premium adjustments or other loss-sharing
     arrangements.

     (b) With respect to each such  insurance  policy:  (i) the policy is legal,
valid,  binding  and  enforceable  in  accordance  with its  terms,  subject  to
bankruptcy, insolvency, moratorium, reorganization or similar Laws affecting the
rights of creditors  generally and the  availability of equitable  remedies and,
except for policies that have expired under their terms in the ordinary  course,
is in full force and effect;  (ii) neither  Parent,  the Company,  SAP Thai,  an
Other Seller nor the SAP Business is in breach or default  (including any breach
or default with respect to the payment of premiums or the giving of notice) and,
to Parent's Knowledge,  no event has occurred which, with notice or the lapse of
time,  would  constitute  such a breach  or  default  or permit  termination  or
modification  under the policy;  and (iii) no party to the policy has repudiated
in writing,  or given written  notice of an intent to  repudiate,  any provision
thereof.

     (c) Section  3.24(c) of the  Disclosure  Schedule  sets forth all  material
risks against  which the Company,  SAP Thai, an Other Seller or the SAP Business
is self-insured  or which are covered under any risk retention  program in which
the Company, SAP Thai or an Other Seller participates, together with information
for the last three years of the Company's, SAP Thai's, the Other Sellers' or the
SAP Business' loss experience with respect to such risks.

     (d) To Parent's Knowledge, all material assets, properties and risks of the
Company,  SAP Thai,  each Other Seller and the SAP Business are covered by valid
and currently effective  insurance policies or binders of insurance  (including,
without limitation, general liability insurance, property insurance and workers'
compensation  insurance) issued in favor of the Company,  SAP Thai, the Sellers,
or the SAP Business, as the case may be, in each case, in such types and amounts
and  covering  such risks as are  specified  in Section  3.24 of the  Disclosure
Schedule or as otherwise are consistent  with customary  practices and standards
of  companies  engaged  in  businesses  and  operations  similar to those of the
Company, SAP Thai, the Sellers, or the SAP Business, as the case may be.

     (e) To Parent's  Knowledge,  at no time subsequent to June 30, 1999 has the
Company,  SAP Thai,  any of the Sellers or the SAP  Business (i) been denied any
material insurance or indemnity bond coverage which it has requested,  (ii) made
any material  reduction in the scope or amount of its  insurance  coverage,  or,
except as set forth in Section  3.24(e)  of the  Disclosure  Schedule,  received
written  notice from any of its insurance  carriers that any insurance  premiums
will be subject to  increase  in an amount  materially  disproportionate  to the
amount of the  increases  with  respect  thereto  (or with  respect  to  similar
insurance)  in prior  years or that any  insurance  coverage  listed in  Section
3.24(a)  of the  Disclosure  Schedule  will  not  be  available  in  the  future
substantially  on the same  terms as are now in  effect  or (iii)  suffered  any
extraordinary increase in premium for renewed coverage.  Since June 30, 1999, no
insurance  carrier  has  canceled,  failed to renew or  materially  reduced  any
insurance coverage for the Company, SAP Thai, the Sellers or the SAP Business or
given any notice or other  indication of its  intention to cancel,  not renew or
reduce any such coverage.

<PAGE>
     (f) No  insurance  policy  listed  in  Section  3.24(a)  of the  Disclosure
Schedule will cease to be legal, valid, binding,  enforceable in accordance with
its terms and in full force and effect as respects matters arising out of events
occurring  prior to the Closing Date on terms identical to those in effect as of
the date hereof as a result of the consummation of the transactions contemplated
by this Agreement.

     SECTION 3.25. Brokers. Except for Schroder & Co. Inc., no broker, finder or
investment  banker  is  entitled  to any  brokerage,  finder's  or other  fee or
commission in connection  with the  transactions  contemplated by this Agreement
based  upon  arrangements  made by or on  behalf  of  Parent.  Parent  is solely
responsible for the fees and expenses of Schroder & Co. Inc.

     SECTION 3.26.  Disclaimer.  Except for the  representations  and warranties
specifically  set forth in this Article III,  none of the Sellers,  the Company,
SAP Thai nor their  Affiliates  makes any (or shall in any manner  whatsoever be
deemed or be  construed  as having made any)  representation  or warranty to the
Purchaser or any other Person hereunder or otherwise, express or implied.

     SECTION 3.27. Disclosure Schedule.  The Parties hereto acknowledge that the
mere  inclusion  of an item in the  Disclosure  Schedule  as an  exception  to a
representation  or warranty shall not be deemed an admission by the Sellers that
such item represents a material exception or fact, event or circumstance or that
such item is reasonably likely to result in a Material Adverse Effect.

                                   ARTICLE IV

                 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

     As an inducement to Parent to enter into this Agreement,  the Purchaser, on
behalf of itself and any designated  Affiliate that will purchase any of the SAP
Assets or the SAP Business  pursuant to this  Agreement,  hereby  represents and
warrants to Parent as follows:

     SECTION 4.01. Organization and Authority of the Purchaser. The Purchaser is
a corporation  duly organized,  validly  existing and in good standing under the
Laws of its jurisdiction of incorporation and has all necessary  corporate power
and  authority  to enter  into  this  Agreement,  to carry  out its  obligations
hereunder and to consummate the transactions  contemplated hereby. The Purchaser
is duly  licensed or qualified  to do business  and is in good  standing in each
jurisdiction  in which the properties  owned or leased by it or the operation of
its business  makes such  licensing or  qualification  necessary,  except to the
extent  that the failure to be so licensed  or  qualified  would not  materially
adversely  affect the  ability  of the  Purchaser  to carry out its  obligations
under, and to consummate the transactions  contemplated by, this Agreement.  The
execution and delivery of this  Agreement by the Purchaser,  the  performance by
the Purchaser of its obligations hereunder and the consummation by the Purchaser
of the  transactions  contemplated  hereby  have  been  duly  authorized  by all
requisite  action on the part of the  Purchaser.  This  Agreement  has been duly
executed and  delivered  by the  Purchaser,  and  (assuming  due  authorization,
execution and delivery by Parent) this Agreement  constitutes a legal, valid and
binding  obligation  of the  Purchaser  enforceable  against  the  Purchaser  in
accordance  with its  terms,  subject  to  bankruptcy,  insolvency,  moratorium,
reorganization  or similar Laws affecting the rights of creditors  generally and
the availability of equitable remedies.

     SECTION  4.02.  No  Conflict.  Assuming  compliance  with the  notification
requirements  of the HSR  Act  and the  making  and  obtaining  of all  filings,
notifications, consents, approvals, authorizations and other actions referred to
in Section 4.03,  except as may result from any facts or circumstances  relating
solely to Parent,  the execution,  delivery and performance of this Agreement by
the  Purchaser do not and will not (a) violate,  conflict  with or result in the
breach of any  provision  of the  Certificate  of  Incorporation  or By-laws (or
similar organizational documents) of the Purchaser, (b) conflict with or violate
any Law or Governmental  Order applicable to the Purchaser or (c) conflict with,
or result in any breach of, constitute a default (or event which with the giving
of notice or lapse or time, or both, would become a default) under,  require any
consent  under,  or  give  to  others  any  rights  of  termination,  amendment,
acceleration,  suspension,  revocation,  or  cancellation  of,  or result in the
creation of any  Encumbrance on any of the assets or properties of the Purchaser
pursuant to, any note, bond, mortgage or indenture,  contract, agreement, lease,
sublease, license, permit, franchise or other instrument or arrangement to which
the Purchaser is a party or by which any of such assets or properties  are bound
or affected  which would have a materially  adverse effect on the ability of the
Purchaser to consummate the transactions contemplated by this Agreement.
<PAGE>
     SECTION 4.03. Governmental Consents and Approvals. The execution,  delivery
and  performance  of this Agreement by the Purchaser do not and will not require
any consent, approval,  authorization or other order of, action by, filing with,
or notification  to, any  Governmental  Authority,  except (a) as described in a
writing given to Parent by the  Purchaser on the date of this  Agreement and (b)
the  notification  requirements  of the HSR Act and certain  applicable  filings
under non-U.S. merger control and competition Laws.

     SECTION  4.04.  Investment  Purpose.  The Purchaser is acquiring the Shares
solely  for the  purpose of  investment  and not with a view to, or for offer or
sale in connection with, any distribution thereof.

     SECTION 4.05. Litigation.  Except as disclosed in a writing given to Parent
by the Purchaser on the date of this Agreement, no claim, action,  proceeding or
investigation  is pending or, to the  knowledge  of the  Purchaser,  threatened,
which  seeks  to  delay or  prevent  the  consummation  of,  or  which  would be
reasonably  likely to materially  adversely  affect the  Purchaser's  ability to
consummate,  the transactions  contemplated by this Agreement.  The Purchaser is
not subject to any continuing order of, consent decree,  settlement agreement or
similar written  agreement  with, or, to the knowledge of Purchaser,  continuing
investigation  by, any Governmental  Authority,  or any order,  writ,  judgment,
injunction,  decree,  determination  or award of any  Governmental  Authority or
arbitrator  that would  prevent  the  Purchaser  from  performing  its  material
obligations under this Agreement or prevent or materially delay the consummation
of any of the transactions contemplated hereby.

     SECTION 4.06. Purchaser Financial  Statements.  True and complete copies of
the  Purchaser's  audited balance sheet for the fiscal year ended as of December
31,  1998,  and the related  audited  statements  of income,  together  with all
related notes and  schedules  thereto,  have been  delivered by the Purchaser to
Parent and are set forth herein at Section 4.06 of the Disclosure Schedule.

     SECTION 4.07. Brokers.  No broker,  finder or investment banker is entitled
to any  brokerage,  finder's or other fee or commission  in connection  with the
transactions  contemplated by this Agreement based upon  arrangements made by or
on behalf of the Purchaser.

     SECTION 4.08.  Disclaimer.  Except for the  representations  and warranties
specifically  set  forth in this  Article  IV,  neither  the  Purchaser  nor its
Affiliates  makes  any (or  shall  in any  manner  whatsoever  be  deemed  or be
construed  as having  made any)  representation  or warranty to Parent or to any
other Person hereunder or otherwise, express or implied.

                                    ARTICLE V

                              ADDITIONAL AGREEMENTS

     SECTION  5.01.  Conduct  of  Business  Prior  to the  Closing.  (a)  Parent
covenants  and agrees that,  with respect to the SAP Business and the SAP Assets
and except as  described  in Section  5.01(a) of the  Disclosure  Schedule or as
contemplated  by this  Agreement,  between  the date  hereof and the time of the
Closing, Parent will, and will cause the Company, SAP Thai and each of the Other
Sellers to, conduct its business in the ordinary course and consistent with past
practice. Without limiting the generality of the foregoing,  except as described
in Section 5.01(a) of the Disclosure Schedule,  Parent will, with respect to the
SAP Business, and will cause each of the Company, SAP Thai and each of the Other
Sellers to, (i) continue its advertising and promotional activities, and pricing
and  purchasing   policies,   in  accordance   with  past  practice,   (ii)  not
intentionally  shorten or lengthen the customary  payment  cycles for any of its
payables or receivables,  (iii) use all reasonable  efforts consistent with past
practices to (A) preserve  intact its  business  organizations  and the business
organization  of the SAP  Business,  (B) keep  available  to the  Purchaser  the
services of the  employees of the Company,  SAP Thai and the SAP  Business,  (C)
continue in full force and effect  without  material  modification  all existing
policies or binders of insurance currently maintained in respect of the Company,
SAP Thai,  the Other  Sellers and the SAP  Business and (D) preserve the current
relationships with its customers,  suppliers and other Persons with which it has
significant business relationships,  (iv) exercise, but only after notice to the
Purchaser and receipt of the Purchaser's prior written  approval,  any rights of
renewal pursuant to the

<PAGE>
terms of any of the leases or subleases  relating to the SAP  Business  which by
their terms would otherwise expire, and (v) not engage in any practice, take any
action,  fail to take any action or enter into any transaction which could cause
any representation or warranty of the Sellers to be untrue or result in a breach
of any covenant made by the Sellers in this Agreement.

     (b) Except as  described  in Section  5.01(b) of the  Disclosure  Schedule,
Parent  covenants  and agrees  that,  prior to the  Closing,  without  the prior
written consent of the Purchaser,  neither the Company, SAP Thai nor the Sellers
(with respect to the SAP Business) will: (i) do any of the things  enumerated in
the second sentence of Section 3.11 (including,  without limitation, clauses (i)
through (xx) thereof,  except for those  actions  specifically  contemplated  by
Section 6.10  hereof);  or (ii) agree to employ any new hire on terms that would
pay any such  Person an annual base  salary in excess of  U.S.$50,000  or annual
aggregate compensation in excess of U.S.$75,000. Notwithstanding anything to the
contrary  contained in this Section  5.01(b),  prior to the Closing,  Parent may
cause the Company  and/or SAP Thai to convey to Parent or one of its  Affiliates
(i) any cash or cash  equivalents  owned by the  Company  or SAP Thai;  (ii) any
Intellectual  Property  (including  Intellectual  Property used in the Poly-Pore
Business)  owned by or  licensed  to the  Company  or SAP Thai  that is not used
primarily in, developed primarily for, or related primarily to, the SAP Business
(it being  understood  that Parent may not cause the Company  and/or SAP Thai to
convey to Parent or one of its Affiliates any Company  Intellectual  Property or
SAP Thai  Intellectual  Property);  and (iii) all rights to the name "AMCOL" and
all related trademarks, logos, tradenames, telephone numbers and internet domain
names.

     SECTION  5.02.  Access to  Information.  (a) From the date hereof until the
Closing,  upon reasonable notice,  Parent will, and will cause the Company,  SAP
Thai and the Other Sellers and each of its and the Company's, SAP Thai's and the
Other  Sellers'  officers,   directors,   employees,  agents,   representatives,
accountants  and counsel to: (i) afford the officers,  employees and  authorized
agents,  accountants,  counsel,  financing  sources and  representatives  of the
Purchaser  reasonable  access,  during normal  business  hours,  to the offices,
properties, plants, other facilities, books and records of Parent (to the extent
such offices, plants, facilities, books and records relate to the SAP Business),
the  Company,  SAP Thai,  the Other  Sellers and to those  officers,  directors,
employees,  agents, accountants and counsel of Parent, the Company, SAP Thai and
of each of the Other Sellers who have any knowledge relating to the Company, SAP
Thai,  the Other  Sellers or the SAP Business and (ii) furnish to the  officers,
employees and authorized  agents,  accountants,  counsel,  financing sources and
representatives  of the Purchaser such  additional  financial and operating data
and other  information  regarding  the assets,  properties  and  goodwill of the
Company,  SAP Thai,  the Other  Sellers and the SAP Business (or legible  copies
thereof) as the Purchaser may from time to time  reasonably  request;  provided,
however,  that the Company  shall not be required by this  provision to waive or
impair  its  right to assert  any  attorney-client  privilege  that may exist as
respects any Actions or other matters; provided,  further, however, that none of
the Purchaser or its  representatives  shall  contact or have any  communication
with any  employees  of  Parent  or any of its  Subsidiaries  without  the prior
written  approval  of  Parent,  except  for those  employees  of Parent  and its
Subsidiaries listed on Exhibit 5.02 attached hereto.

     (b) In order to  facilitate  the  resolution  of any claims made against or
incurred by Parent prior to the Closing,  or for any other  reasonable  purpose,
for a period of seven years after the Closing,  the  Purchaser  shall (i) retain
the books and records of the Company,  SAP Thai and the SAP Business relating to
periods prior to the Closing in a manner  reasonably  consistent  with the prior
practice  of the  Company,  SAP Thai and the  Sellers  (with  respect to the SAP
Business) and (ii) upon reasonable  notice,  afford the officers,  employees and
authorized agents and representatives of Parent reasonable access (including the
right to make, at Parent's expense, photocopies),  during normal business hours,
to such books and records.

     (c) In order to facilitate  the resolution of any claims made by or against
or incurred by the  Purchaser,  the Company,  SAP Thai or the SAP Business after
the  Closing or for any other  reasonable  purpose,  for a period of seven years
following  the Closing,  Parent shall (i) retain the books and records of Parent
which relate to the Company,  SAP Thai and the SAP Business for periods prior to
the Closing and which shall not otherwise  have been delivered to the Purchaser,
the Company or SAP Thai and (ii) upon  reasonable  notice,  afford the officers,
employees  and  authorized  agents and  representatives  of the  Purchaser,  the
Company or SAP Thai reasonable  access (including the right to make photocopies,
at the expense of the Purchaser or the Company),  during normal  business hours,
to such books and records.
<PAGE>
     SECTION 5.03.  Confidentiality.  All information  obtained by the Purchaser
pursuant  to Section  5.02 shall be kept  confidential  in  accordance  with the
confidentiality   agreement  (the   "Confidentiality   Agreement")  between  the
Purchaser and Parent, dated May 17, 1999.

     SECTION 5.04.  Stockholders'  Meeting.  Parent,  acting  through the Board,
shall, in accordance with  applicable Law and Parent's  Restated  Certificate of
Incorporation  and By-laws,  (i) duly call,  give notice of,  convene and hold a
meeting of its stockholders as soon as practicable following the date hereof for
the  purpose  of  considering  and  taking  action  on  this  Agreement  and the
transactions  contemplated hereby (the "Stockholders'  Meeting") and (ii) except
as the Board determines is required by its fiduciary duties under applicable Law
after having received advice from outside legal counsel (A) include in the Proxy
Statement  (as  defined  herein)  the  recommendation  of  the  Board  that  the
stockholders  of Parent  approve and adopt this  Agreement and the  transactions
contemplated  hereby,  (B) not  subsequently  withdraw,  modify or change in any
manner adverse to the Purchaser such recommendation,  and (C) use its reasonable
efforts to obtain such approval and adoption.

     SECTION 5.05.  Proxy  Statement.  (a) As promptly as practicable  after the
execution  of this  Agreement,  Parent  (i)  will  prepare  and  file  with  the
Securities and Exchange  Commission  (the "SEC") the Proxy Statement (as defined
below) relating to the Stockholders'  Meeting to be held to consider approval of
this Agreement and the transactions  contemplated hereby and (ii) mail the Proxy
Statement  to  its  stockholders.   The  Proxy  Statement  to  be  sent  to  the
stockholders of Parent in connection with the Stockholders'  Meeting (such proxy
statement or information statement,  as amended or supplemented,  being referred
to herein as the "Proxy  Statement")  shall not, at the date the Proxy Statement
(or any  amendment or  supplement  thereto) is first mailed to  stockholders  of
Parent,  and at the time of the  Stockholder's  Meeting,  contain any  statement
which, at the time and in light of the circumstances under which it was made, is
false or misleading  with respect to any material  fact, or which omits to state
any material fact necessary in order to make the statements therein not false or
misleading  or necessary to correct any  statement in any earlier  communication
with respect to the solicitation of proxies for the Stockholders'  Meeting which
shall have become false or misleading. Any information provided by the Purchaser
to Parent  which is  included  in the Proxy  Statement  shall  not,  on the date
provided to Parent, contain any statement which, at the time and in light of the
circumstances  under which it was made, is false or  misleading  with respect to
any material  fact, or which omits to state any material fact necessary in order
to make the  statements  therein not false or misleading or necessary to correct
any statement in any earlier  communication  with respect to the solicitation of
proxies  for  the  Stockholders'  Meeting  which  shall  have  become  false  or
misleading. The Proxy Statement shall comply in all material respects as to form
with the  requirements  of the Securities  Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations thereunder.

     (b) The Proxy Statement shall include the  recommendation of Parent's Board
to the  stockholders  of the Company in favor of approval of this  Agreement and
the transactions  contemplated hereby;  provided,  however,  that the Board may,
prior  to the  Stockholders'  Meeting,  withdraw,  modify  or  change  any  such
recommendation  only as it may  determine  is required by its  fiduciary  duties
under  applicable Law after having  received  advice from outside legal counsel;
provided,  further, that,  notwithstanding anything to the contrary contained in
this Agreement, such a withdrawal, modification or change in such recommendation
shall not relieve  Parent in any way whatsoever of its other  obligations  under
Section 5.04 or 5.05(a) of this Agreement.

     (c)  Parent  shall  advise  the  Purchaser  of any  request  by the SEC for
amendment of the Proxy  Statement or comments  thereon and responses  thereto or
requests by the SEC for additional information.

     SECTION 5.06.  Regulatory and Other  Authorizations;  Notices and Consents.
(a) Parent shall use all reasonable efforts to obtain (or cause the Company, SAP
Thai and the Other Sellers to obtain) all authorizations,  consents,  orders and
approvals of all  Governmental  Authorities  and officials that may be or become
necessary  for  its  execution  and  delivery  of,  and the  performance  of its
obligations  pursuant  to,  this  Agreement  and will  cooperate  fully with the
Purchaser  in  promptly  seeking  to obtain all such  authorizations,  consents,
orders and approvals. Each party hereto agrees to make an appropriate filing, if
necessary, pursuant to the HSR Act with respect to the transactions contemplated
by this Agreement  within five Business Days of the date hereof and to supply as
promptly  as  practicable  to  the  appropriate   Governmental  Authorities  any
additional  information and documentary  material that may be requested pursuant
to the HSR Act. In  addition,  each Party  agrees to make,  or cause to be made,
promptly any filing that the Purchaser  identifies  to Parent as being  required
under any other non-United States  antitrust,  merger control or competition Law
or by  any  other  antitrust,  merger  control  or  competition  authority.  The
Purchaser will be responsible

<PAGE>
for  paying the normal  filing  fees  incurred  by the  Purchaser  and Parent in
connection  with  the  HSR  Act  filings  and  the  similar  merger  control  or
competition  Law  filings  being made by the  parties in the United  Kingdom and
Germany;  provided,  however,  that the Purchaser  shall not be responsible  for
paying  any  other  fees or  expenses  incurred  by Parent  (including,  without
limitation, counsel fees) in connection with the preparation of such filings.

     (b)  Parent  shall,  or shall  cause  the  Company,  SAP Thai and the Other
Sellers to, give  promptly  such  notices to third  parties and use its or their
reasonable  efforts to obtain such third party  consents  as the  Purchaser  may
reasonably  deem  necessary  or desirable in  connection  with the  transactions
contemplated by this Agreement.

     (c) The Purchaser shall cooperate and use all reasonable  efforts to assist
Parent in giving such notices and obtaining such consents.

     (d) In  connection  with any  consent  that may be  requested  by Parent or
Purchaser, neither party to this Agreement shall have any obligation to give any
guarantee  or  other  financial  or  similar  consideration  of  any  nature  in
connection  with any  notice or consent or to consent to any change in the terms
of any  agreement  or  arrangement  which  either party in its sole and absolute
discretion  may deem adverse to the  interests of such party,  the Company,  SAP
Thai or the SAP Business.

     (e) Parent and the Purchaser agree that, in the event any consent, approval
or  authorization  necessary or desirable to preserve for the SAP Business,  the
Company or SAP Thai or any right or benefit under any lease, license,  contract,
commitment or other agreement or arrangement to which Parent,  the Company,  SAP
Thai or an Other Seller is a party is not obtained prior to the Closing (and the
parties acknowledge and agree that, except as set forth herein, no such consent,
approval or authorization shall be a condition to the Purchaser's  obligation to
close),  Parent will,  subsequent to the Closing,  cooperate with the Purchaser,
the  Company and SAP Thai in  attempting  to obtain  such  consent,  approval or
authorization as promptly thereafter as practicable.  If such consent,  approval
or authorization cannot be obtained,  except with respect to customer contracts,
Parent shall use its reasonable  efforts to provide the Purchaser,  the Company,
SAP Thai or the SAP  Business,  as the case may be, with the rights and benefits
of the affected  lease,  license,  contract,  commitment  or other  agreement or
arrangement for the term of such lease, license,  contract or other agreement or
arrangement,  and,  if  Parent  provides  any  such  rights  and  benefits,  the
Purchaser,  the  Company  or SAP  Thai,  as the case may be,  shall  assume  the
obligations and burdens thereunder.

     SECTION 5.07.  Notice of Developments.  Prior to the Closing,  Parent shall
promptly notify the Purchaser in writing of (i) all events, circumstances, facts
and occurrences arising subsequent to the date of this Agreement of which Parent
becomes aware and which could result in any material breach of a  representation
or warranty or covenant of the Sellers in this Agreement or which could have the
effect of making any representation or warranty of the Sellers in this Agreement
untrue or incorrect in any material  respect and (ii) all other  developments of
which Parent becomes aware and affecting the  Liabilities,  business,  financial
condition or prospects of the Company, SAP Thai or the SAP Business,  other than
changes affecting the economy or the SAP industry generally,  which developments
could have a Material Adverse Effect.

     SECTION 5.08. No Solicitation  or  Negotiation.  Parent agrees that between
the date of this  Agreement  and the  earlier  of (i) the  Closing  and (ii) the
termination of this Agreement,  none of Parent, the Company, SAP Thai, the Other
Sellers  nor  any  of  their   respective   Affiliates,   officers,   directors,
representatives  or agents will (a) solicit,  initiate,  consider,  encourage or
accept (except to the extent permitted below) any other proposals or offers from
any Person (i) relating to any  acquisition or purchase of all or any portion of
the  capital  stock of the  Company,  SAP Thai or an  Other  Seller  or all or a
substantial  portion of the assets of the Company,  SAP Thai, an Other Seller or
the SAP Business  (other than  Inventory  to be sold in the  ordinary  course of
business  consistent  with past  practice),  or (ii)  relating  to any  business
combination with the Company, SAP Thai or any Other Seller, or (iii) relating to
any other extraordinary  business transaction involving or otherwise relating to
the Company, SAP Thai, any Other Seller or the SAP Business, or (iv) relating to
(x) any  acquisition or purchase of, or tender offer or exchange offer for, more
than 20% of the equity securities of Parent, or (y) any merger, consolidation or
business  combination with Parent, or other extraordinary  business  transaction
involving or otherwise  relating to Parent that would result in any other Person
owning in excess of 20% of the outstanding  equity  securities of Parent (any of
the  events  described  in (i),  (ii),  (iii)  and (iv)  being an  ("Acquisition
Proposal")) (it being understood that any transaction, the sole purpose of which
is to  spin-off  the SAP  Business to the  shareholders  of Parent on a pro rata
basis,  shall not  constitute  an  Acquisition  Proposal  for  purposes  of this
Agreement provided that such spin-off is not part of a transaction, or series of
transactions, the

<PAGE>
intended  result of which is that a  controlling  interest  in the shares or the
assets of the SAP Business will be transferred to a  non-affiliated  third party
(other  than such  shareholders  of  Parent))  or (b) except as  required by the
fiduciary  duties of the Board of Directors of Parent as such duties would exist
in  the  absence  of any  limitations  in  this  Agreement,  participate  in any
discussions, conversations,  negotiations and other communications regarding, or
furnish to any other  Person  any  information  with  respect  to, or  otherwise
cooperate in any way,  assist or  participate  in,  facilitate  or encourage any
effort or attempt by any other Person to seek or to  consummate  an  Acquisition
Proposal;  provided,  however, that prior to the consummation of the transaction
contemplated hereby,  nothing contained in Section 5.08 shall prohibit the Board
from (i) furnishing information to, or entering into discussions or negotiations
with,  any Person that after the date hereof  makes an  unsolicited  Acquisition
Proposal,  if,  and  only to the  extent  that,  (A)  prior to  furnishing  such
information to, or entering into discussions or negotiations with such Person or
agreeing to or endorsing any Acquisition Proposal,  the Board determines in good
faith,  after  consultation  with and based  upon the  advice of  counsel  and a
financial advisor of a nationally recognized  reputation,  that such Acquisition
Proposal is, or may reasonably be expected to lead to, a Superior Proposal,  (B)
prior to  furnishing  such  information  to, or  entering  into  discussions  or
negotiations with, such Person,  Parent provides written notice to the Purchaser
to the effect that it is furnishing information to, or entering into discussions
or  negotiations  with,  such Person  and, in any such notice to the  Purchaser,
indicating in  reasonable  detail the terms and  conditions of such  Acquisition
Proposal,  offer,  inquiry or other contact,  and (C) such  information to be so
furnished has been previously  delivered to the Purchaser or (ii) complying with
Rule 14e-2  promulgated  under the  Exchange  Act with regard to an  Acquisition
Proposal.  Parent shall notify the  Purchaser  promptly if any such  Acquisition
Proposal or offer,  or any inquiry or other contact with any Person with respect
thereto is made.  Parent  agrees not to, and to cause the Company,  SAP Thai and
each Other Seller not to,  without the prior written  consent of the  Purchaser,
release any Person  from,  or waive any  provision  of, any  confidentiality  or
standstill  agreement to which Parent, the Company,  SAP Thai or an Other Seller
is a party, except in the event the Parent Board determines in good faith, after
consultation  with and based upon the advice of counsel and a financial  advisor
of a nationally recognized reputation, that such release or waiver is reasonably
expected to lead to a Superior  Proposal.  Except as  required by the  fiduciary
duties of the Board of Directors of Parent,  Parent  immediately shall cease and
cause to be terminated all existing discussions, conversations, negotiations and
other  communications with any Persons conducted  heretofore with respect to any
of the foregoing.

     SECTION 5.09. Use of Intellectual  Property.  (a) Parent  acknowledges that
from and after the Closing,  the name "Chemdal" and all similar names, marks and
logos (all of such names,  marks and logos being the "Chemdal  Names")  shall be
owned by the  Purchaser,  one of its designated  Affiliates,  the Company or SAP
Thai and that neither Parent nor any of its Affiliates  shall have any rights in
the  Chemdal  Names,  and that  neither  Parent nor any of its  Affiliates  will
contest the ownership or validity of any rights of the Purchaser, its designated
Affiliates, SAP Thai or the Company in or to the Chemdal Names.

     (b) Except as otherwise  provided in the ION Exchange License Agreement (as
defined in Section 5.19 of the Agreement),  from and after the Closing,  neither
the  Sellers  nor any of  their  Affiliates  shall  use or  disclose  any of the
Business  Intellectual  Property or the Company Intellectual Property or the SAP
Thai Intellectual Property.

     SECTION  5.10.  Non-Competition.  (a) For a period of three (3) years after
the Closing in the European  Community  and for a period of ten (10) years after
the Closing in every other location or, in each case, for such shorter period as
may be required  by  applicable  Law (in each case,  the  "Restricted  Period"),
Parent and its  Affiliates  shall not  engage,  directly or  indirectly,  in any
business anywhere in the world that researches, develops, manufactures, markets,
distributes,  sells,  produces  or  supplies  products  or  services of the kind
researched,  developed,  manufactured,  marketed, distributed, sold, produced or
supplied by the SAP  Business,  the Company or SAP Thai,  in each case,  for the
Traditional  SAP Market  Segments as of the Closing  Date or,  without the prior
written  consent of the Purchaser,  directly or indirectly,  own an interest in,
manage,  operate,  join,  control,  lend  money  or  render  financial  or other
assistance to or participate in or be connected  with, as an officer,  employee,
partner, stockholder, consultant or otherwise, any Person that competes with the
Company, SAP Thai or the SAP Business in researching, developing, manufacturing,
marketing, distributing, selling, producing or supplying products or services of
the kind  researched,  developed,  manufactured,  marketed,  distributed,  sold,
produced  or  supplied  by the  Company,  SAP Thai or the SAP  Business  for the
Traditional SAP Market Segments as of the Closing; provided,  however, that, for
the purposes of this
<PAGE>
Section 5.10,  ownership of securities  having no more than three percent of the
outstanding  voting  power of any  competitor  which are listed on any  national
securities exchange or traded actively in the national  over-the-counter  market
shall not be  deemed  to be in  violation  of this  Section  5.10 so long as the
Person owning such securities has no other connection or relationship  with such
competitor.

     (b)  As a  separate  and  independent  covenant,  Parent  agrees  with  the
Purchaser  that,  for a period  of three  (3) years  after  the  Closing  in the
European Community and for a period of ten (10) years after the Closing in every
other  location or, in each case,  for such shorter period as may be required by
applicable  Law,  Parent will not, and will not permit its Affiliates to, in any
way,  directly or  indirectly,  for the purpose of conducting or engaging in any
business that researches, develops,  manufactures,  markets, distributes, sells,
produces or supplies  products  or services of the kind  researched,  developed,
manufactured,  marketed,  distributed,  sold,  produced  or  supplied by the SAP
Business,  the Company or SAP Thai, in each case, for the Traditional SAP Market
Segments as of the  Closing,  call upon,  solicit,  advise or  otherwise  do, or
attempt  to do,  business  in the  Traditional  SAP  Market  Segments  with  any
customers of the SAP Business with whom the SAP Business had any dealings in the
Traditional  SAP  Market  Segments  during  the  period of time in which the SAP
Business,  the  Company  and SAP  Thai  was  owned by  Parent,  or take  away or
interfere or attempt to interfere with any custom,  trade, business or patronage
of the SAP Business in the Traditional SAP Market Segments.

     (c) Parent will not, and will not permit any of its Affiliates to, directly
or  indirectly,  solicit the  employment  of,  attempt to employ,  or employ any
Transferred Employee or U.K. Designated Employee during the period commencing on
the Closing Date and ending twelve months thereafter, and the Purchaser will not
and will not permit any of its  Affiliates to,  directly or indirectly,  solicit
the employment  of, attempt to employ,  or employ any employees of Parent or any
of is  Affiliates  during the period  commencing  on the Closing Date and ending
twelve months thereafter; provided, however, that the forgoing will not prohibit
a general solicitation to the public or general advertising;  provided, further,
that the  foregoing  will also not prohibit (i) Parent or one of its  Affiliates
from  employing any  Transferred  Employee or U.K.  Designated  Employee that is
terminated by the Purchaser or one of its Affiliates without cause following the
Closing Date or (ii) the Purchaser or one of its  Affiliates  from employing any
employee of Parent or any of its Affiliates  that is terminated by Parent or one
of its  Affiliates  without cause  following the Closing Date or (iii) Parent or
one of its  Affiliates  from  employing any Person listed on Exhibit  5.10(c) so
long as such employee accepts employment with Parent or one of its Affiliates on
or prior to the Closing Date.

     (d) The  Restricted  Period  shall be  extended by the length of any period
during which Parent or any of its  Affiliates  is in breach of the terms of this
Section 5.10.

     (e)  Parent  acknowledges  that the  covenants  of Parent set forth in this
Section 5.10 are an essential  element of this  Agreement and that,  but for the
agreement of Parent to comply with these covenants, the Purchaser would not have
entered  into  this  Agreement.  Parent  acknowledges  that  this  Section  5.10
constitutes an independent  covenant and shall not be affected by performance or
nonperformance of any other provision of this Agreement by the Purchaser. Parent
has independently  consulted with its counsel and after such consultation agrees
that the covenants set forth in this Section 5.10 are reasonable and proper.

     SECTION  5.11.  Release of  Indemnity  Obligations.  Parent  covenants  and
agrees, on or prior to the Closing, to execute and deliver to the Purchaser, for
the  benefit of the  Purchaser,  a general  release and  discharge,  in the form
attached as Exhibit 5.11 hereto, releasing and discharging the Company, SAP Thai
and the SAP Business from any and all obligations to indemnify  Parent or any of
its  Affiliates  or  otherwise  defend  it or them  or hold it or them  harmless
pursuant to any agreement or other  arrangement  (other than this  Agreement and
the agreements contemplated hereby) entered into prior to the Closing.

     SECTION  5.12.  Termination  of  Intercompany  Agreements.  Except  for the
contracts or arrangements set forth on Exhibit 5.12 attached hereto,  and except
for the Continuing Intercompany Indebtedness,  prior to the Closing Date, Parent
shall cause the termination of any contracts, arrangements or agreements between
or among the Company, SAP Thai or a Seller (as it affects the SAP Business),  on
the one hand,  and Parent or any  Affiliate of Parent (other than the Company or
SAP Thai) on the other hand, including any intercompany  agreements entered into
in the ordinary course of business.
<PAGE>
     SECTION 5.13. Transition Services Agreement. At the Closing, Parent and the
Purchaser  shall enter into a transition  services  agreement  (the  "Transition
Services Agreement"), substantially in the form attached hereto as Exhibit 5.13.

     SECTION  5.14.  CETCO  Supply  Agreement.  At the  Closing,  Parent and the
Purchaser or one of its designated  Affiliates shall enter into the CETCO supply
agreement (the "CETCO Supply  Agreement"),  substantially on the terms set forth
on Exhibit 5.14 attached hereto.

     SECTION 5.15. Acrylic Acid Supply Agreement.  Immediately prior to Closing,
Parent will cause  Chemdal U.K. to enter into an acrylic  acid supply  agreement
(the "Acrylic Acid Supply Agreement") with BASF (Antwerp), a Belgian corporation
and a wholly owned  Subsidiary of the Purchaser,  substantially on the terms set
forth on Exhibit 5.15  attached  hereto.  On the Closing Date,  but  immediately
following  the Closing,  the Acrylic Acid Supply  Agreement  will be assigned by
Chemdal  U.K.  to  one  of  the  Purchaser's  designated  Affiliates,  and  such
designated  Affiliate  will assume all of Chemdal U.K.'s  obligations  under the
Acrylic  Acid  Supply  Agreement  at such  time;  provided,  however,  that  the
designated  Affiliate shall not be entitled to and shall not receive any portion
of the Signing Premium and, simultaneously with such assignment, such designated
Affiliate  shall  deliver a release  and  novation to Parent  releasing  Parent,
Sellers and their Affiliates (including Chemdal U.K.) from any further Liability
or obligation under the Acrylic Acid Supply Agreement.

     SECTION 5.16. License Agreement.  At the Closing,  Parent and the Purchaser
shall enter into a license agreement (the "License Agreement"), substantially in
the form attached hereto as Exhibit 5.16.

     SECTION 5.17.  SAP  Subleases.  At the Closing,  Purchaser will execute and
deliver to Parent subleases (the "SAP Subleases") of certain properties utilized
by the Company and the Sellers in the SAP Business,  substantially  on the terms
set forth on Exhibit 5.17 attached hereto.

     SECTION 5.18.  Product/Material  Rebates.  Prior to December 31, 1999,  the
Purchaser  shall have paid Parent in full for all amounts due to Parent from the
Purchaser and its Affiliates on account of all rebates (the "Rebates") resulting
from the purchase of products and  materials by Parent and its  Affiliates  from
the  Purchaser  and such  Affiliates  during  calendar  year 1999 and,  prior to
Closing,  the Purchaser shall have paid Parent in full for all Rebates resulting
from the purchase of products and  materials by Parent and its  Affiliates  from
the Purchaser and such Affiliates from December 31, 1999 to the date of Closing.

     SECTION 5.19. ION Exchange License  Agreement.  At the Closing,  Parent and
the Purchaser  shall enter into a license  agreement (the "ION Exchange  License
Agreement"), substantially in the form attached hereto as Exhibit 5.19.

     SECTION  5.20.  Mixed-Use  Assets.  Except  as may be  provided  for in the
Transition  Services  Agreement and the License  Agreement,  to the extent that,
following the Closing,  the Sellers have retained any assets that were used, but
not primarily  used, in the operation of the SAP Business  prior to the Closing,
Parent will,  and will cause its  Subsidiaries  to,  permit the  Purchaser,  its
designated  Affiliates,  the  Company  and SAP  Thai to use such  assets  in the
operation of the SAP Business  following the Closing,  on substantially the same
terms as such assets were used in the conduct of the SAP  Business  prior to the
Closing and as may be reasonably  requested by the  Purchaser,  such  designated
Affiliates, the Company and SAP Thai.

     SECTION 5.21. Termination of SAP Indebtedness. Prior to the Closing, Parent
shall,  and  shall  cause  its  Subsidiaries  to,  take  all  necessary  action,
including,  without  limitation,  the repayment of any  outstanding  third-party
Indebtedness  relating to the Company, SAP Thai or the SAP Business, so that, at
the Closing Date, there is no outstanding  Indebtedness relating to the Company,
SAP  Thai  or  the  SAP  Business,   other  than  the  Continuing   Intercompany
Indebtedness.

     SECTION 5.22. Termination of the Celanese Supply Agreement. Upon receipt of
written  instructions  from the Purchaser or one of its Affiliates,  Parent will
promptly (but in no event later than seven  Business Days  following  receipt of
such  instructions)  cause the termination,  effective December 31, 2001, of the
Supply Agreement  (96-SMS-08) dated April 8, 1997, as amended,  between Celanese
Ltd. and the Company (the "Celanese Agreement"), such termination to be effected
in accordance with the terms of the Celanese Agreement;  provided,

<PAGE>
however, that should the Closing not occur for any reason whatsoever, and should
Celanese be  unwilling  to enter into a new supply  contract  with Parent or the
Company  on  substantially  similar  terms to those  contained  in the  Celanese
Agreement,  then the Purchaser will supply Parent with glacial acrylic acid from
December 31, 2001 until December 31, 2003 on terms and conditions  substantially
similar to those contained in the Celanese Agreement.

     SECTION 5.23.  Uncashed Cheques.  Parent understands and agrees that to the
extent any cheques (the "Unpaid SAP  Cheques") are drawn prior to the Closing on
the account of the Company,  SAP Thai or otherwise  relating to the SAP Business
and such cheques are presented for payment following the Closing (i) none of the
Purchaser, its Affiliates,  the Company, SAP Thai or the SAP Business shall have
any  obligation,  responsibility  or liability  for any such Unpaid SAP Cheques,
except to the extent that (i) Parent and its Affiliates  have delivered any cash
to the Purchaser at Closing or (ii) Parent has permitted the Company or SAP Thai
to retain any cash at Closing,  in each case, for the purpose of satisfying such
unpaid SAP Cheques and (ii) Parent and its Affiliates  shall be responsible  for
all such Unpaid SAP Cheques and shall indemnify the Purchaser,  the Company, SAP
Thai or any of their  Affiliates for any Losses or Liabilities  incurred by them
as a result of the Unpaid SAP Cheques,  except to the extent that (i) Parent and
its  Affiliates  have  delivered  any cash to the  Purchaser  at Closing or (ii)
Parent has permitted  the Company or SAP Thai to retain any cash at Closing,  in
each case, for the purpose of satisfying such unpaid SAP Cheques.

     SECTION 5.24. Access to Insurance. Notwithstanding anything to the contrary
contained in this Agreement, to the extent that the Purchaser,  the Company, SAP
Thai or the SAP  Business  suffer or incur any  Losses or  Liabilities  (a "Loss
Event") by reason of, or arising out of, any action, inaction, event, condition,
liability  or  obligation  of the  Company,  SAP Thai,  the  Sellers  or the SAP
Business which  occurred or existed prior to the Closing,  or by reason of or in
connection  with any claim or cause of action of any third party relating to the
conduct of the SAP Business  prior to Closing,  then upon receipt of notice from
the  Purchaser or one of its  Affiliates of such Loss Event,  Parent shall,  and
shall cause its Affiliates to, promptly (i) use all reasonable efforts to access
any of its (or any of its Affiliates) applicable insurance policies on behalf of
the Purchaser,  the Company,  SAP Thai or the SAP Business,  as  applicable,  in
connection with such Loss Event in a manner that is consistent with the terms of
such  policies,  all such  reasonable  efforts to include,  without  limitation,
Parent (or any of its  Affiliates)  using all  reasonable  efforts to pursue any
claims denied under such  applicable  insurance  policies and (ii) indemnify the
Purchaser,  the Company,  SAP Thai or the SAP Business,  as applicable,  for any
such Loss Event up to an amount  which is equal to the  aggregate  amount of any
proceeds  actually  received by Parent (or any of its Affiliates)  under any and
all of its  applicable  insurance  policies in connection  with such Loss Event;
provided that under no  circumstances  whatsoever shall Parent or its Affiliates
have any  obligation to indemnify the  Purchaser or its  Affiliates  pursuant to
this  provision  of the  Agreement by reason of any denial under the policies of
all or any portion of the claim or claims submitted under the policies by Parent
or their Affiliates. Any reasonable out-of-pocket expenses incurred by Parent in
pursuing  any claims  denied under the  applicable  policies  shall  promptly be
reimbursed by the Purchaser.

     SECTION 5.25. Patent Opinions.  Following the Closing,  the Purchaser shall
permit  Parent and its  Affiliates  to rely on the SAP  Opinions  as  reasonably
necessary  for the purpose of defending any claims of patent  infringement,  and
the Purchaser  shall provide the Patent Opinions to Parent and its Affiliates as
reasonably requested by Parent for such purpose.

     SECTION  5.26.  Thai  Facility.  At the  Closing,  Parent  shall  cause the
delivery of the Thai Facility to the  Purchaser,  which Thai  Facility  shall be
"Mechanically Complete" as defined in Exhibit 5.26 attached hereto.

     SECTION 5.27. * Obligations. Promptly following the date hereof, Parent and
the  Purchaser  will  undertake to satisfy  their  respective *  obligations  as
specifically  described  in, and in the manner  contemplated  by,  Exhibit  5.27
attached hereto.

     SECTION 5.28. * Assistance  Grants.  Parent understands and agrees that (i)
as a result of the execution of this Agreement and the transactions contemplated
hereby,  all or a  portion  of  the  financial  assistance  granted  by  certain
Governmental Authorities to the SAP Business pursuant to the * Assistance Grants
may become immediately due and payable to such Governmental Authorities and (ii)
in the  event any such  amounts  become  due and  payable  to such  Governmental
Authorities  pursuant  to the *  Assistance  Grants  solely  as a result  of the
entering

<PAGE>
into of this  Agreement or the  consummation  of the  transactions  contemplated
hereby,  (x) Parent will be responsible  for promptly paying such amounts to the
applicable Governmental Authority or (y) Parent will indemnify the Purchaser and
its  Affiliates  from any  Losses  or  Liabilities  incurred  as a result of the
failure of Parent to pay such  amounts  that become due and payable as described
in clause (ii) above.

     SECTION 5.29. Thai Facility Construction Contracts.  Following the Closing,
the  Purchaser  shall  permit  Parent  and its  Affiliates  to rely on the  Thai
Facility  Construction  Contracts  as  reasonably  necessary  for the purpose of
pursuing any rights and remedies thereunder against the counter-parties thereto,
to the extent the pursuit of such rights and  remedies is  necessary  to satisfy
any  obligations  and  Liabilities of Parent and its Affiliates to the Purchaser
and its Affiliates under this Agreement or the transactions  contemplated hereby
including,  without  limitation,  pursuant  to  Section  5.26  hereof  (it being
understood  that Parent and its  Affiliates  shall transfer to Purchaser and its
Affiliates any  recoveries and awards  resulting from the pursuit of such rights
and  remedies  to the extent  that such  recoveries  and  awards  exceed (i) the
aggregate  amounts  actually paid by Parent and its  Affiliates to Purchaser and
its Affiliates to satisfy the obligations and Liabilities  described  above, and
(ii) any  out-of-pocket  costs and amounts incurred by Parent and its Affiliates
in pursuing such rights and remedies,  including, without limitation, legal fees
and other costs of the suit;  provided that Parent and its Affiliates  shall not
be  entitled  to any  such  costs  and  amounts  to the  extent  Parent  has not
previously paid to Purchaser and its Affiliates all amounts owing to satisfy the
obligations described above).

     SECTION  5.30.  Further  Action.  Each of the parties  hereto shall use all
reasonable efforts to take, or cause to be taken, all appropriate  action, do or
cause to be done all things necessary, proper or advisable under applicable Law,
and execute and deliver such documents and other papers,  as may be necessary to
carry out the provisions of this Agreement and consummate and make effective the
transactions contemplated by this Agreement.


                                   ARTICLE VI

                                EMPLOYEE MATTERS

     SECTION 6.01. Transferred  Employees.  Each hourly and salaried employee of
the  Company  and SAP Thai (a list of which  employees  is  attached  hereto  at
Section 6.01 of the  Disclosure  Schedule) who is employed with the Purchaser or
its Affiliates  immediately  following the Closing shall hereinafter be referred
to as a "Transferred Employee".

     SECTION 6.02.  Severance  Obligations.  The Sellers and the Purchaser agree
that the  transactions  contemplated  by this  Agreement  shall not constitute a
severance  of  employment  of  any  Transferred  Employees  or  U.K.  Designated
Employees (as defined below) under any severance plan, program or arrangement of
any Seller,  SAP Thai or the Company and that such employees  shall be deemed to
have continuous and  uninterrupted  employment  before and immediately after the
Closing.  If any Transferred  Employee or U.K.  Designated Employee incurs or is
deemed  pursuant to Law or any severance  plan,  program or  arrangement to have
incurred a severance  of  employment  before the  Closing,  then Parent shall be
responsible  for all  severance  obligations  with  respect to each  Transferred
Employee and U.K.  Designated  Employee.  The Purchaser shall be responsible for
any severance  obligations  incurred  pursuant to any severance  plan,  program,
arrangement  or  agreement  of the  Company,  SAP Thai or any Other  Seller with
respect  to the  termination  of a  Transferred  Employee  or a U.K.  Designated
Employee  on or after the  Closing.  Except as provided  in this  Section  6.02,
Parent  agrees,  pursuant to Section  9.02,  to indemnify  and hold harmless the
Purchaser against any severance claim and against any loss, damage, liability or
expense,  including  attorney  fees,  incurred in connection  with any claim for
severance  benefits brought by any employees or former employees of Parent,  the
Company, SAP Thai or the Other Sellers.

     SECTION 6.03. (a) Employee  Benefit  Plans.  For a period of one year after
the Closing Date, the Purchaser shall provide the Transferred  Employees who are
employed  by the  Company  within  the  United  States  (the  "U.S.  Transferred
Employees")   with  a  level  of  employee   benefit   plans  and   arrangements
substantially  comparable  in the  aggregate  to the level of employee  benefits
provided to similar situated employees of the Purchaser.
<PAGE>
     To the extent  that  service  is  relevant  for  purposes  of  eligibility,
participation,  vesting or benefit  accrual  under any  employee  benefit  plan,
program  or  arrangement  established,  maintained  or  contributed  to  by  the
Purchaser  or  any  of its  Affiliates  (excluding  benefit  accrual  under  the
Purchaser  Defined Benefit Plan), U.S.  Transferred  Employees shall be credited
for service  prior to the Closing  with the Sellers or the Company to the extent
that such service was  recognized  under a  comparable  employee  benefit  plan,
program or arrangement under which such applicable U.S. Transferred Employee was
participating  immediately prior to the Closing;  provided,  however,  that such
crediting  of  service  does not result in the  duplication  of  benefits  or an
unintended windfall with respect to the accrual of benefits.

     (b) Medical,  Dental and Life Insurance Plans.  Effective as of the Closing
Date,  each U.S.  Transferred  Employee and their  eligible  dependents  who are
participating  in the Sellers'  welfare  benefit plans shall become  entitled to
participate in the medical,  dental,  life  insurance and other welfare  benefit
plans  sponsored by the Purchaser or its  Affiliates on the Closing Date. To the
extent  that any welfare  benefit  plan in which any U.S.  Transferred  Employee
participates  after the  Closing  Date (i) imposes  any  pre-existing  condition
limitation,  such condition shall be waived or (ii) has a deductible or requires
a  co-payment  by the U.S.  Transferred  Employee  that is  subject  to  maximum
out-of-pocket limitation, each U.S. Transferred Employee will receive credit for
any  co-payments  and  deductibles  for any costs paid during the portion of the
relevant  plan year or other period  preceding  the Closing in which the Closing
Date  occurs  which  have  been  submitted  to  the  plan  administrator  of the
Purchaser's welfare benefit plans as of the 90th day following the Closing Date.
The Purchaser shall provide  notification to all U.S.  Transferred  Employees if
any  co-payments  or  deductibles  for any period  preceding the Closing must be
submitted to the plan administrator of the Purchaser's  welfare benefit plans as
of the  90th  day  following  the  Closing  Date.  The  Purchaser  shall  not be
responsible for medical,  dental and other welfare benefit claims incurred,  but
not paid, in the ordinary course on or prior to the Closing Date with respect to
U.S.  Transferred  Employees,  which  shall  remain  the  responsibility  of the
Sellers.

     (c) COBRA.  The  Purchaser  shall assume all  responsibility  for providing
benefits required under Part 6 of Title I of ERISA ("COBRA Benefits") in respect
of qualifying events occurring after the Closing for U.S. Transferred  Employees
and their qualified beneficiaries.

     (d) Vacation. The Purchaser shall provide, without duplication of benefits,
all Transferred  Employees and U.K.  Designated  Employees who were employees of
the Sellers,  the Company or SAP Thai immediately prior to the Closing Date with
paid  vacation  time rather than cash in lieu of vacation  time for all vacation
earned and unpaid through the Closing Date.

     (e)  Miscellaneous.  No employee or any other Person (except the parties to
this Agreement) shall be entitled to assert any claim against the Purchaser, the
Company,   SAP  Thai  or  any  of  the  Sellers   relating  to  the  employment,
compensation, employee benefits or benefit plans or programs based on or arising
from any provisions of this Agreement.

     SECTION 6.04.  Pension  Plans.  Effective as of the Closing Date,  the U.S.
Transferred Employees shall be considered terminated  participants in accordance
with the terms of the Parent  Savings  Plan (the  "Seller  Defined  Contribution
Plan") and the Parent  Pension  Plan (the "Seller  Defined  Benefit  Plan";  and
together with the Seller Defined  Contribution Plan, the "Seller Pension Plans")
and as soon as  administratively  practical  following the Closing Date,  Parent
shall take all such action as may be required to achieve this result, including,
without  limitation,  advising  participants in the Seller Pension Plans who are
U.S.  Transferred  Employees  of their  right to elect  to  receive  a  rollover
distribution   of  their   individual   nonforfeitable   account   balances  and
nonforfeitable accrued benefits,  respectively,  in accordance with the terms of
the Seller  Pension  Plans by reason of the  transactions  contemplated  by this
Agreement,  which  distribution or distributions  may to the extent permitted by
Law be  transferred  by the  participant  to the Purchaser  Salaried  Employees'
Savings Plan (the "Purchaser Defined Contribution Plan") in a directed rollover;
provided, however, that the Seller Pension Plans shall not be required to permit
distributions or transfers by U.S. Transferred Employees to the extent that such
distributions  or transfers would adversely  affect the qualified  status of the
Seller Pension Plans.  Parent and the Purchaser may agree to allow  participants
to elect direct  rollover  distributions  from the Seller  Pension  Plans to the
Purchaser  Defined  Contribution  Plan.  U.S.  Transferred   Employees  who  are
participants  in the Seller  Pension Plans shall be 100% vested in their accrued
benefits and  individual  account  balances under the Seller Pension Plans as of
the Closing Date.  Effective as of the Closing Date,  the Purchaser  shall amend
the Purchaser  Defined  Contribution Plan to the extent necessary to enable U.S.
Transferred

<PAGE>
Employees who were participants in the Seller Pension Plans to elect
rollover  distributions,  which in the discretion of the plan  administrator for
the Purchaser Defined  Contribution Plan, may include any outstanding loan notes
from the Seller Defined  Contribution Plan in accordance with Section 402 of the
Code. In order to rollover an outstanding loan note, U.S. Transferred  Employees
shall be required to execute (i) an  acknowledgment  that the Purchaser  Defined
Contribution  Plan will be substituted for the Seller Defined  Contribution Plan
as the obligee of the loan note, (ii) a payroll authorization form and (iii) any
other forms deemed necessary by the plan administrator for the Purchaser Defined
Contribution  Plan. No other assets shall be transferred from the Seller Pension
Plans to the Purchaser Defined Contribution Plan other than as specified herein.
All  directed  rollovers  between  the Seller  Pension  Plans and the  Purchaser
Defined  Contribution  Plan  will be in the  form of cash.  Service  of the U.S.
Transferred  Employees prior to the Closing Date which was recognized  under the
Seller  Pension  Plans shall be credited to the U.S.  Transferred  Employees for
purposes of  eligibility  and vesting under the Purchaser  Defined  Contribution
Plan.

     SECTION 6.05. U.S.  Employee  Information.  No later than ten (10) calendar
days after the Closing Date, Parent shall furnish to the Purchaser the following
information with respect to each U.S. Transferred Employee, as applicable:

              (a)      social security number;

              (b)      years and months of service as of the Closing Date; and

              (c)      base salary and bonus for the three calendar years
        immediately preceding the Closing Date and current base salary.

     SECTION  6.06.  Workers'  Compensation   Obligation  for  U.S.  Transferred
Employees.  With respect to U.S. Transferred Employees, the Sellers shall retain
and  shall  assume  and be  responsible  for any and all  workers'  compensation
benefits in  connection  with claims which are incurred on or before the Closing
Date, and the Purchaser  shall assume,  bear and discharge all  liabilities  for
workers'  compensation  benefits in connection  with claims  incurred  after the
Closing Date.

     SECTION 6.07.  Provisions Relating to U.K. Employees.  (a) Each employee of
the Company and the Sellers with respect to the SAP Business  whose normal place
of work is the United  Kingdom who is listed on Section  6.07 of the  Disclosure
Schedule shall hereinafter be referred to as a "U.K. Designated Employee".

     (b) The Purchaser  acknowledges  that the Acquired Rights Directive (77/187
EEC) as enacted in the Member  States of the European  Union and similar Laws in
other  jurisdictions  which  safeguard  the rights of  employees in transfers of
undertakings,  businesses  or parts of businesses  (collectively,  the "Transfer
Laws") may operate to automatically  transfer all or some of the U.K. Designated
Employees to the Purchaser. If any contract of employment of a Person who is not
a U.K.  Designated  Employee of the Purchaser  has effect as if originally  made
between  the  Sellers  and such  Person  as a result of the  application  of the
Transfer  Laws:  (i) then such Seller may,  within  thirty (30) days of becoming
aware of the  application of the Transfer Laws to such contract,  give notice to
such Person to terminate  such contract and (ii) any losses arising out of or in
connection with such contract to the date of such  termination  shall be assumed
or retained by the Sellers and shall be Excluded Liabilities.

     (c) The  Sellers  and the  Purchaser  shall  comply  with their  respective
obligations  under  the  Transfer  Laws,  including,   without  limitation,  the
provision of information to and/or consultation with representatives of the U.K.
Designated  Employees in relation to the  transactions  contemplated  under this
Agreement  whether pursuant to the Transfer Laws or any other legal  requirement
as enacted in the Member States of the European  Union and similar Laws in other
jurisdictions or any collective agreement or otherwise.

     (d) The employment of each U.K.  Designated  Employee shall, at the Closing
Date,  be  transferred  to the  Purchaser  in  accordance  with the  Transfer of
Undertakings (Protection of Employment) Regulations 1981 (as amended) (the "U.K.
Regulations"),  which  are in force  in the  United  Kingdom  to  implement  the
Acquired Rights Directive in the United Kingdom.
<PAGE>
     (e) Effective as of the Closing Date, the U.K. Designated  Employees shall:
(i) be offered  membership  in a  retirement  benefits  scheme  nominated by the
Purchaser  (the  "Purchaser's  Scheme")  subject to satisfying  its  eligibility
provisions  and (ii) be  permitted  to transfer  the value of their past service
pension rights secured under the pension arrangements operated by the Sellers to
the  Purchaser's  Scheme,  provided  that  the  exempt  approved  status  of the
Purchaser's  Scheme  under  the  Income  and  Corporation  Taxes Act 1988 is not
adversely affected by such transfer.

     SECTION 6.08.  Provisions Relating to Thai Employees.  (a) Each Transferred
Employee  who is  employed  by SAP Thai  within  Thailand  (and who is listed on
Section 6.01 of the  Disclosure  Schedule)  shall  hereinafter be referred to as
a"Thai Transferred Employee".

     (b) The  Sellers  and the  Purchaser  shall  comply  with their  respective
obligations  under any Laws  relating to the transfer of  employment of the Thai
Transferred Employees.

     (c) The employment of each Thai Transferred  Employee shall, at the Closing
Date,  be  transferred  to the  Purchaser  in  accordance  with any  regulations
regarding such transfer which are in force in Thailand.

     SECTION 6.09.  Retained  Obligations of Parent.  Parent expressly agrees to
retain (i) all obligations or Liabilities  with respect to the employees who are
not Transferred  Employees or U.K. Designated Employees and (ii) any obligations
or  Liabilities  of Parent or any of its  Affiliates  with respect to any former
employee of the SAP  Business or as a result of actions  taken by, or  omissions
of,  Parent or any of its  Affiliates  prior to the Closing Date with respect to
any Transferred Employee or U.K. Designated Employee.

     SECTION  6.10  Employee  Stock  Options.  (a)  Effective on or prior to the
Closing  Date,  Parent  shall cause each  vested and  unvested  stock  option to
purchase  shares of Parent common stock (each a "Stock Option") that was granted
to Transferred  Employees and U.K.  Designated  Employees  pursuant to the Stock
Option Plans (other than unvested stock options granted  pursuant to the Chemdal
U.K.  1995 Share Option  Scheme) or otherwise  that remains  outstanding  on the
Closing Date to become fully vested and  exercisable  and to remain  exercisable
for a period of at least 90 days following the Closing Date; provided,  however,
that such 90 day period shall not extend  beyond the term of the Stock Option as
set forth in the relevant Stock Option Plan or stock option agreement.

     (b) To the extent any required U.K. Inland Revenue approvals can reasonably
be obtained prior to the Closing Date that will permit any and all amendments to
the Chemdal  U.K.  1995 Share  Option  Scheme  necessary to provide for the full
vesting  and  immediate  exercise  of  all  outstanding  Stock  Options  granted
thereunder,  then, effective on or prior to the Closing Date, Parent shall cause
each outstanding Stock Option that was granted to Transferred Employees and U.K.
Designated  Employees  pursuant to the Chemdal U.K.  1995 Share Option Scheme to
become fully vested and immediately  exercisable and to remain exercisable for a
period of at least 90 days following the Closing Date; provided,  however,  that
such 90 day period  shall not extend  beyond the term of the Stock Option as set
forth in the Chemdal U.K.  1995 Share Option  Scheme or the related stock option
agreement.  In the event  that  such U.K.  Inland  Revenue  approvals  cannot be
obtained at least 3 Business Days prior to the Closing Date,  Parent may, in its
discretion:

          (i) take such action as may be  necessary  to cause each Stock  Option
     granted  pursuant to the Chemdal U.K. 1995 Share Option Scheme that is held
     by a  Transferred  Employee or U.K.  Designated  Employee  and that remains
     outstanding  on  the  Closing  Date  (an  "Unvested  Stock  Option")  to be
     automatically replaced effective as of the Closing Date with a stock option
     granted  pursuant to another  Stock  Option Plan or any  successor  plan (a
     "Substituted Stock Option"). Such Substituted Stock Option shall be subject
     to the same terms and  conditions  as the  replaced  Stock  Option  granted
     pursuant to the Chemdal U.K. 1995 Share Option Scheme  (including,  without
     limitation,  the exercise price of such Stock Option);  provided,  however,
     that such  Substituted  Stock Option shall be fully vested and  immediately
     exercisable  as of the  Closing  Date and shall  remain  exercisable  for a
     period of at least 90 days  following  the  Closing  Date.  As  promptly as
     practicable  after the Closing Date, Parent shall issue to each holder of a
     Substituted  Stock  Option a document  evidencing  such  Substituted  Stock
     Option; or


<PAGE>
          (ii) within 3 Business Days  following the Closing Date, pay a special
     cash bonus to each  Transferred  Employee or U.K.  Designated  Employee who
     holds an Unvested Stock Option in an amount equal to the product of (y) the
     number of shares of Parent  common  stock  subject to such  Unvested  Stock
     Option and (z) the excess,  if any,  of the  closing  price on the New York
     Stock  Exchange of Parent common stock on the last trading day  immediately
     prior to the  Closing  Date  over the  exercise  price  per share of Parent
     common stock subject to such Unvested Stock Option.

          (c) Parent shall use all reasonable efforts to cause each holder of an
     Unvested Stock Option to consent to the cancellation of such Unvested Stock
     Option in consideration of the payment or the Substituted  Stock Option, as
     applicable,  and as provided for in subparagraph  (b)(i) and (ii) above and
     Parent  may  require  such  consent  as a  condition  to  such  payment  or
     Substituted  Stock  Option.  The  Company,  SAP Thai,  the  Sellers and the
     Purchaser  shall  cooperate  to take all such action as may be necessary to
     carry out the terms of Section 6.10.

                                   ARTICLE VII

                                   TAX MATTERS

     SECTION  7.01.  Indemnity.  (a) Parent  agrees to indemnify on an After-Tax
Basis and hold harmless the Purchaser, each of its Subsidiaries, the Company and
SAP Thai against the following Taxes and against any loss, damage,  liability or
expense,   including   reasonable  costs  for  in-house  or  outside  attorneys,
accountants  and other  consultants,  incurred in  contesting  or  otherwise  in
connection  with any such Taxes:  (i) Taxes imposed on the Company,  SAP Thai or
attributable  to the SAP  Assets or the SAP  Business  with  respect  to taxable
periods  ending on or before  the  Closing  Date;  (ii) with  respect to taxable
periods  beginning  before the Closing Date and ending  after the Closing  Date,
Taxes imposed on the Company,  SAP Thai or attributable to the SAP Assets or the
SAP Business which are allocable, pursuant to Section 7.01(b), to the portion of
such period ending on the Closing Date;  (iii) Taxes imposed on the Seller,  the
Other Sellers,  any of their  Subsidiaries or any member of any affiliated group
with  which  the  Company  or SAP Thai  files  or has  filed a Tax  return  on a
consolidated,  unitary or combined  basis for a taxable  period (or portion of a
taxable  period) ending on or before the Closing Date; (iv) Taxes imposed on the
Purchaser,  any of its Subsidiaries,  the Company or SAP Thai as a result of any
breach of  warranty  or  misrepresentation  under  Section  3.23;  and (v) Taxes
resulting from any election described in Section 7.07 of this Agreement.

     (b) In the case of Taxes that are payable with respect to a taxable  period
that begins before the Closing Date and ends after the Closing Date, the portion
of any such Tax that is  allocable  to the  portion of the period  ending on the
Closing Date shall be:

          (i) in the case of Taxes  that are either (x) based upon or related to
     income or  receipts  or (y)  imposed in  connection  with any sale or other
     transfer  or  assignment  of  property  (real  or  personal,   tangible  or
     intangible) (other than conveyances pursuant to this Agreement, as provided
     under Section  7.06),  deemed equal to the amount which would be payable if
     the taxable year ended with the Closing Date; and

          (ii) in the case of Taxes imposed on a periodic  basis with respect to
     the assets of the Company, SAP Thai or the SAP Assets or that are otherwise
     measured  by the level of any item,  deemed to be the  amount of such Taxes
     for the entire  period,  multiplied by a fraction the numerator of which is
     the number of calendar  days in the period  ending on the Closing  Date and
     the  denominator  of which is the  number of  calendar  days in the  entire
     period.

     (c) Refunds of any Taxes paid by Parent or its  Affiliates  by or on behalf
of the Company or SAP Thai relating to any taxable period, or any portion of any
taxable period, ending on or prior to the Closing Date, shall be for the account
of Parent and its  Affiliates  (and will  promptly be paid by Purchaser  and its
Affiliates,  if  received by them,  to  Parent),  except to the extent that such
refunds were reflected in the Statement of Working Capital.

     SECTION  7.02.  Returns and Payments.  (a) From the date of this  Agreement
through and after the Closing  Date,  Parent shall prepare and file or otherwise
furnish in proper form to the appropriate  governmental or taxing  authority (or
cause to be  prepared  and filed or so  furnished)  in a timely  manner  all Tax
returns,  reports and forms ("Returns")  relating to the Company,  SAP Thai, the
SAP  Assets  or the SAP  Business  that are due on or  before

<PAGE>
or relate to any taxable  period  ending on or before the Closing  Date (and the
Purchaser  shall do the same for any  Returns for which it or the Company or SAP
Thai are  responsible  for any taxable period that ends after the Closing Date).
Returns of the  Company or SAP Thai not yet filed for any  taxable  period  that
begins  before the Closing  Date shall be prepared in a manner  consistent  with
past  practices  employed with respect to the Company or SAP Thai (except to the
extent counsel for Parent or the Purchaser renders a legal opinion that there is
no  reasonable  basis in Law therefor or  determines  that a Return cannot be so
prepared and filed  without  being  subject to  penalties).  With respect to any
Return  required  to be filed by the  Purchaser  or Parent  with  respect to the
Company or SAP Thai or attributable  to the SAP Assets or the SAP Business,  and
as to which an  amount of Tax is  allocable  to the other  party  under  Section
7.01(b),  the filing  party shall  provide  the other  party and its  authorized
representatives  with a copy of such completed Return and a statement certifying
the amount of Tax shown on such  Return  that is  allocable  to such other party
pursuant to Section 7.01(b),  together with appropriate  supporting  information
and  schedules,  at least 20 Business Days prior to the due date  (including any
extension  thereof)  for the filing of such  Return.  Such  other  party and its
authorized  representatives  shall have the right to review and  comment on such
Return and  statement  prior to the filing of such  Return,  and the  reasonable
comments  of such  other  party  and its  authorized  representatives  shall  be
considered by the filing party in good faith.

     (b)  Parent  shall pay or cause to be paid when due and  payable  all Taxes
with respect to the Company or SAP Thai or attributable to the SAP Assets or the
SAP Business for any taxable  period ending on or before the Closing  Date,  and
the Purchaser shall so pay or cause to be paid Taxes with respect to the Company
or SAP Thai,  or for which the  Purchaser is  responsible  in respect of the SAP
Business or the SAP Assets, for any taxable period ending after the Closing Date
(subject to the Purchaser's right of indemnification from Parent by the date set
forth in Section  7.04 for Taxes  attributable  to the portion of any Tax period
that includes the Closing Date pursuant to Sections 7.01(a) and 7.01(b)).

     SECTION 7.03. Contests. (a) After the Closing, the Purchaser shall promptly
notify  Parent in writing of any notice  received by the Purchaser or any of its
Subsidiaries of a proposed  assessment or claim in an audit or administrative or
judicial  proceeding  of the  Purchaser  or any of its  Subsidiaries,  or of the
Company or SAP Thai,  which, if determined  adversely to the taxpayer,  would be
grounds for indemnification under this Article VII. If, following the receipt by
the Purchaser or any of its Subsidiaries of notice of such a proposed assessment
or claim,  the Purchaser  fails to give Parent the prompt notice required by the
preceding sentence of this Section 7.03, then (i) if Parent is precluded by such
failure from contesting the asserted Tax liability in question, Parent shall not
have any  obligation to indemnify  the Purchaser  under this Article VII for any
loss or damage arising out of such asserted Tax liability, and (ii) if Parent is
not precluded from  contesting the asserted Tax liability in question,  but such
failure  results in a monetary  detriment  to Parent,  any amount  which  Parent
otherwise  would be required to pay the  Purchaser  pursuant to this Article VII
with respect to such liability shall be reduced by the amount of such detriment.

     (b) In the case of an audit or administrative  or judicial  proceeding that
relates to periods  ending on or before the Closing  Date,  provided that Parent
acknowledges in writing its liability under this Agreement to hold the Purchaser
and its  Subsidiaries  and the  Company and SAP Thai  harmless  against the full
amount  of any  adjustment  which  may be made as a  result  of  such  audit  or
proceeding  that relates to periods ending on or before the Closing Date (or, in
the case of any  taxable  year  that  includes  the  Closing  Date,  against  an
adjustment allocable under Section 7.01(b) to the portion of such year ending on
or before the  Closing  Date),  Parent  shall  have the right at its  expense to
participate  in and control the conduct of such audit or proceeding  but only to
the  extent  that  such  audit  or  proceeding  relates  solely  to a  potential
adjustment for which Parent has acknowledged  its liability;  the Purchaser also
may  participate in any such audit or proceeding  and, if Parent does not assume
the defense of any such audit or  proceeding,  the Purchaser may defend the same
in such  manner  as it may  deem  appropriate,  including,  without  limitation,
settling such audit or proceeding  after giving five days' prior written  notice
to Parent  setting forth the terms and  conditions of  settlement.  In the event
that issues relating to a potential adjustment for which Parent has acknowledged
its liability  are required to be dealt with in the same  proceeding as separate
issues  relating  to a potential  adjustment  for which the  Purchaser  would be
liable, the Purchaser shall have the right, at its expense, to control the audit
or proceeding with respect to the latter issues.

     (c) With  respect to issues  relating to a potential  adjustment  for which
both Parent (as evidenced by its acknowledgment under this Section 7.03) and any
of the Purchaser,  one of its  Subsidiaries  or the Company or SAP Thai could be
liable,  (i) each party may  participate in the audit or proceeding and (ii) the
audit or  proceeding  shall be  controlled  by that party  which  would bear the
burden of the greater portion of the sum of the

<PAGE>
adjustment and any corresponding  adjustments that may reasonably be anticipated
for future Tax periods.  The  principle set forth in the  immediately  preceding
sentence  shall  govern also for  purposes  of  deciding  any issue that must be
decided jointly  (including,  without  limitation,  choice of judicial forum) in
situations in which separate issues are otherwise  controlled under this Article
VII by the Purchaser and Parent.

     (d) Neither the  Purchaser  nor Parent shall enter into any  compromise  or
agree to settle any claim  pursuant to any Tax audit or  proceeding  which would
adversely  affect the other party for such year or a subsequent year without the
written  consent  of the other  party,  which  consent  may not be  unreasonably
withheld.  The Purchaser and Parent agree to cooperate in the defense against or
compromise of any claim in any audit or proceeding.

     SECTION 7.04.  Time of Payment.  Payment by Parent of any amounts due under
this  Article VII in respect of Taxes shall be made (i) at least three  Business
Days before the due date of the applicable estimated or final Return required to
be filed by the  Purchaser  on which is  required  to be  reported  income for a
period  ending  after the Closing  Date for which  Parent is  responsible  under
Sections  7.01(a) and 7.01(b) without regard to whether the Return shows overall
net income or loss for such period and (ii) within three Business Days following
an  agreement  between  Parent and the  Purchaser  that an  indemnity  amount is
payable,  an assessment of a Tax by a taxing authority,  or a "determination" as
defined in Section  1313(a) of the Code. If liability  under this Article VII is
in  respect of costs or  expenses  other  than  Taxes,  payment by Parent of any
amounts due under this Article VII shall be made within five Business Days after
the date when  Parent  has been  notified  by the  Purchaser  that  Parent has a
liability for a determinable  amount under this Article VII and is provided with
calculations or other materials supporting such liability.

     SECTION  7.05.  Cooperation  and  Exchange of  Information.  Parent and the
Purchaser  will  provide each other with such  cooperation  and  information  as
either of them reasonably may request of the other in filing any Return, amended
Return or claim for refund,  determining  a liability  for Taxes or a right to a
refund of Taxes, participating in or conducting any audit or other proceeding in
respect  of Taxes or making  representations  to or  furnishing  information  to
parties subsequently desiring to purchase the Company or SAP Thai or any part of
the SAP Business from the Purchaser.  Such  cooperation  and  information  shall
include providing copies of relevant Returns or portions thereof,  together with
accompanying schedules, related work papers and documents relating to rulings or
other  determinations  by Tax  authorities.  Parent and the Purchaser shall each
make its employees  available on a basis mutually  convenient to both parties to
provide explanations of any documents or information provided hereunder. Each of
Parent and the  Purchaser  shall retain all Returns,  schedules and work papers,
records and other  documents  in its  possession  relating to Tax matters of the
Company  or SAP Thai or of the SAP  Assets  or SAP  Business,  for each  taxable
period first ending  after the Closing  Date and for all prior  taxable  periods
until the later of (i) the  expiration  of the  statute  of  limitations  of the
taxable periods to which such Returns and other documents relate, without regard
to  extensions  except to the extent  notified  by the other party in writing of
such  extensions for the respective Tax periods or (ii) six years  following the
due date (without  extension) for such Returns.  Any information  obtained under
this  Section  7.05  shall  be  kept  confidential  except  as may be  otherwise
necessary  in  connection  with the filing of Returns or claims for refund or in
conducting an audit or other proceeding.

     SECTION  7.06.  Conveyance  Taxes.  The Purchaser and Parent agree to share
equally any sales,  use,  transfer,  value added,  stamp,  stock transfer,  real
property   transfer  or  gains  and  any  similar  Taxes,   and  any  recording,
registration  and  other  fees,   incurred  as  a  result  of  the  transactions
contemplated hereby.

     SECTION 7.07. Section 338 Election. (a) Parent agrees to join the Purchaser
in making an election under Section 338(g) and 338(h)(10) of the Code, and under
any comparable  provisions of state, local or non-U.S.  Tax Law, with respect to
the sale of the  Company  to the  Purchaser.  On or prior to the  Closing  Date,
Parent  shall duly  execute  (or cause to be duly  executed  by the  appropriate
Subsidiary or Affiliate),  and shall deliver to the Purchaser, IRS Form 8023 (or
successor form), and any comparable forms that are required by applicable state,
local or non-U.S. Tax Laws, for purposes of making the elections contemplated by
this  Section  7.07.   Parent  shall  provide  the  Purchasers  with  reasonable
cooperation in the  preparation and filing of any and all such elections (and in
taking all steps  necessary to effectuate the same).  In accordance with Section
7.01 hereof,  Parent agrees to indemnify the Purchaser,  its  Subsidiaries,  the
Company or SAP Thai against all Taxes relating to such elections.

<PAGE>
     (b) For purposes of making the elections  required by paragraph (a) of this
Section  7.07,  the  Purchaser  shall  determine  the value of the  tangible and
intangible  assets of the  Company  and shall  provide  Parent  with a  proposed
allocation of the Purchaser's  "adjusted grossed-up basis" in the Company Shares
(within the meaning of the Treasury  Regulations  under Section 338 of the Code)
to such  assets  within 15 days of the due date for the  filing of the  election
under Section 338(g) and Section 338(h)(10) of the Code with respect to the sale
of the Company  Shares to the  Purchaser  (the  "Allocation").  For  purposes of
allocating  the "deemed  selling  price"  (within  the  meaning of the  Treasury
Regulations under Section 338 of the Code) among the assets of the Company,  (i)
if all disputes regarding the proposed Allocation are resolved by the parties on
or prior to the due date for the filing of the election under Section 338(g) and
Section 338(h)(10) of the Code with respect to the sale of the Company Shares to
the Purchaser, then the agreed-to Allocation shall be binding upon the Purchaser
and Parent, and (ii) if the parties are unable to resolve all disputes regarding
the proposed  Allocation,  then the Allocation shall be considered  binding upon
the Purchaser and Parent with respect to any items which are not in dispute, and
each of Purchaser and Parent shall be responsible  for determining its treatment
of any disputed items. In any case, appropriate adjustments shall be made to the
Allocation to reflect any Purchase Price adjustments  pursuant to this Agreement
or adjustments required by Law.

     SECTION 7.08.  Miscellaneous.  (a) Parent and the Purchaser  agree to treat
all  payments  made  by  either  of  them to or for  the  benefit  of the  other
(including  any  payments to the Company or SAP Thai)  under this  Article  VII,
under   other   indemnity   provisions   of   this   Agreement   and   for   any
misrepresentations  or breaches of warranties or covenants as adjustments to the
Purchase Price or as capital  contributions for Tax purposes,  and further agree
that such treatment  shall govern for purposes  hereof except to the extent that
the Laws of a  particular  jurisdiction  provide  otherwise,  in which case such
payments  shall be made in an amount  sufficient to indemnify the relevant party
on an After-Tax Basis.

     (b) Any Tax sharing agreement or arrangement  between Parent and any of its
Subsidiaries,  on the one hand,  and the Company or SAP Thai, on the other hand,
shall be terminated immediately prior to the Closing.

     (c)  Notwithstanding  any provision in this Agreement to the contrary,  the
obligations  of  Parent  to  indemnify  and hold  harmless  the  Purchaser,  its
Subsidiaries,  the Company and SAP Thai  pursuant to this  Article  VII, and the
representations and warranties contained in Section 3.23, shall terminate at the
close of business on the 120th day  following the  expiration of the  applicable
statute of limitations  with respect to the Tax liabilities in question  (giving
effect to any waiver, mitigation or extension thereof).

     (d) From and after the date of this Agreement, Parent shall not without the
prior  written  consent of the  Purchaser  (which may, in its sole and  absolute
discretion, withhold such consent) change, make or revoke, or cause or permit to
be changed,  made or revoked,  any Tax  election,  adopt or change,  or cause to
permit to be adopted or  changed,  any  method of Tax  accounting,  or settle or
compromise,  or cause or permit to be settled or compromised,  any Tax liability
that would  materially  affect the Company,  SAP Thai, the SAP Assets or the SAP
Business.

     (e)  Each  of  Parent  and the  Purchaser  shall  be  entitled  to  recover
professional  fees and related costs that it may reasonably incur to enforce the
provisions of this Article VII.

     (f) Parent  shall  cause the  Company to  deliver to the  Purchaser  at the
Closing a  statement  pursuant to  Regulation  Section  1.897-2(h),  in form and
substance  satisfactory  to  the  Purchaser,  duly  executed  and  acknowledged,
certifying that the Company Shares are not a U.S. real property  interest within
the meaning of Section  897(c)(i) of the Code,  and Parent or the Other  Sellers
shall provide the Purchaser  with  statements,  duly executed and  acknowledged,
certifying  as to the facts that  exempt the sale of SAP Thai and the SAP Assets
from withholding in accordance with Section 1445 of the Code.

                                  ARTICLE VIII

                              CONDITIONS TO CLOSING

     SECTION 8.01.  Conditions to  Obligations  of Parent.  The  obligations  of
Parent to consummate the  transactions  contemplated  by this Agreement shall be
subject to the fulfilment,  at or prior to the Closing, of each of the following
conditions:
<PAGE>
     (a)  Representations  and  Warranties.  Each  of  the  representations  and
warranties of the Purchaser contained in this Agreement shall have been true and
correct in all material  respects when made and shall be true and correct in all
material  respects as of the Closing Date,  with the same force and effect as if
made as of the Closing Date (other than such  representations  and warranties as
are made as of another  date,  which shall be true and  correct in all  material
respects  as of such date),  except  where the failure to be so true and correct
would not materially and adversely  effect the  consummation of the Closing,  or
otherwise  prevent the Purchaser from performing its material  obligations under
this Agreement,  and Parent shall have received a certificate from the Purchaser
to such effect signed by a duly authorized officer thereof;

     (b)  Covenants.  Each of the  covenants  and  agreements  contained in this
Agreement to be complied  with by the  Purchaser on or before the Closing  shall
have been complied with in all material respects, and Parent shall have received
a  certificate  from the  Purchaser to such effect  signed by a duly  authorized
officer thereof;

     (c) HSR Act. Any waiting  period (and any extension  thereof) under the HSR
Act or under the applicable  merger  control or competition  Laws of Germany and
the United  Kingdom  applicable to the purchase of the Shares and the SAP Assets
contemplated hereby shall have expired or shall have been terminated;

     (d) No Proceeding or Litigation.  No Action shall have been commenced by or
before any Governmental  Authority  against either the Sellers or the Purchaser,
seeking  to  restrain  or  materially  and  adversely  alter  the   transactions
contemplated  by  this  Agreement   which,   in  the   reasonable,   good  faith
determination  of  Parent,  is likely to render it  impossible  or  unlawful  to
consummate such  transactions;  provided,  however,  that the provisions of this
Section  8.01(d) shall not apply if Parent has directly or indirectly  solicited
or encouraged any such Action;

     (e)  Resolutions.  Parent  shall have  received a true and  complete  copy,
certified by the General  Counsel of the Purchaser,  of the written  approval of
the Board of Directors of the  Purchaser  evidencing  its  authorization  of the
execution  and  delivery  of  this  Agreement  and  the   consummation   of  the
transactions contemplated hereby;

     (f)  Incumbency  Certificate.  Parent  shall have  received a  certificate,
signed  by the  General  Counsel  of the  Purchaser,  certifying  the  names and
signatures of the employees of the Purchaser  authorized to sign this  Agreement
and the other  documents to be  delivered  hereunder  and to bind the  Purchaser
hereby;

     (g)  Stockholder  Approval.  This  Agreement  shall have been  approved and
adopted by the affirmative vote of the stockholders of Parent in accordance with
applicable Law and Parent's Restated Certificate of Incorporation and By-Laws;

     (h) Transition  Services  Agreement.  The Purchaser shall have executed and
delivered to Parent the Transition Services Agreement;

     (i) SAP Subleases.  The Purchaser or one of its designated Affiliates shall
have executed and delivered to Parent the SAP Subleases;

     (j) CETCO Supply Agreement. The Purchaser shall have executed and delivered
to Parent the CETCO Supply Agreement;

     (k) ION Exchange License  Agreement.  The Purchaser shall have executed and
delivered to Parent the ION Exchange License Agreement;

     (l) Certain  Rebates.  The Purchaser shall have paid Parent in full for the
Rebates;
<PAGE>
     (m) Acrylic Acid Supply  Agreement.  The Purchaser  shall have executed and
delivered to Chemdal U.K. the Acrylic Acid Supply  Agreement,  together with the
related release and novation described in Section 5.15 hereof; and

     (n) License  Agreement.  The Purchaser shall have executed and delivered to
Parent the License Agreement.

     SECTION 8.02.  Conditions to Obligations of the Purchaser.  The obligations
of the Purchaser to consummate the  transactions  contemplated by this Agreement
shall be subject to the fulfilment,  at or prior to the Closing,  of each of the
following conditions:

          (a)  Representations  and Warranties.  Each of the representations and
     warranties of the Sellers  contained in this Agreement shall have been true
     and correct in all respects  when made and shall be true and correct in all
     respects as of the Closing Date,  with the same force and effect as if made
     as of the Closing Date (other than such  representations  and warranties as
     are  made as of  another  date,  which  shall be true  and  correct  in all
     respects  as of such  date),  except  where the  failure  to be so true and
     correct would not have a Material  Adverse Effect,  and the Purchaser shall
     have received a certificate  from each of the Sellers to such effect signed
     by a duly authorized officer thereof;

          (b) Covenants.  Each of the covenants and agreements contained in this
     Agreement to be complied with by the Sellers on or before the Closing shall
     have been complied with in all material  respects,  and the Purchaser shall
     have received a certificate  from each of the Sellers to such effect signed
     by a duly authorized officer thereof;

          (c) HSR Act. Any waiting period (and any extension  thereof) under the
     HSR Act or under the  applicable  merger  control  or  competition  Laws of
     Germany and the United Kingdom applicable to the purchase of the Shares and
     the SAP Assets  contemplated  hereby  shall have expired or shall have been
     terminated;

          (d) No Proceeding or  Litigation.  No Action shall have been commenced
     or threatened by or before any Governmental  Authority  against the Sellers
     or the Purchaser, seeking to restrain or materially and adversely alter the
     transactions  contemplated  hereby  which,  in the  reasonable,  good faith
     determination  of the  Purchaser,  is likely to  render  it  impossible  or
     unlawful to consummate the  transactions  contemplated by this Agreement or
     which could have a Material  Adverse Effect;  provided,  however,  that the
     provisions  of this Section  8.02(d)  shall not apply if the  Purchaser has
     solicited or encouraged any such Action;

          (e)  Resolutions of the Sellers.  The Purchaser  shall have received a
     true  and  complete  copy,  certified  by  the  Secretary  or an  Assistant
     Secretary  of each of the  Sellers,  of the  resolutions  duly and  validly
     adopted by the board of  directors  of each of the Sellers  evidencing  its
     authorization  of the  execution  and  delivery of this  Agreement  and the
     consummation of the transactions contemplated hereby, as applicable;

          (f) Incumbency  Certificate of the Sellers.  The Purchaser  shall have
     received a certificate  of the Secretary or an Assistant  Secretary of each
     of the Sellers  certifying the names and signatures of the officers of such
     Sellers  authorized to sign this  Agreement  and the other  documents to be
     delivered hereunder, as applicable;

          (g)  Resignations  of the  Directors of the Company and SAP Thai.  The
     Purchaser  shall  have  received  the  resignations,  effective  as of  the
     Closing,  of all the  directors  and  officers of the Company and SAP Thai,
     except for such Persons,  if any, as shall have been  designated in writing
     prior to the Closing by the Purchaser to Parent;

          (h)  Release  of  Indemnity  Obligations.  The  Purchaser  shall  have
     received the general release and discharge from Parent described in Section
     5.11 of this Agreement;

          (i) Stockholder Approval.  This Agreement shall have been approved and
     adopted by the affirmative vote of the stockholders of Parent in accordance
     with applicable Law and Parent's Restated  Certificate of Incorporation and
     By-Laws;
<PAGE>
          (j) No  Material  Adverse  Effect.  No  event  or  events  shall  have
     occurred,  or be reasonably likely to occur, which,  individually or in the
     aggregate,  have,  or is  reasonably  likely to have,  a  Material  Adverse
     Effect,  it being  understood  and agreed that the  termination of customer
     contracts shall not be considered a Material Adverse Effect for purposes of
     this paragraph;

          (k)  Transition  Services  Agreement.  Parent shall have  executed and
     delivered to the Purchaser the Transition Services Agreement;

          (l) SAP Subleases.  Parent or one of its designated  Affiliates  shall
     have executed and delivered to the Purchaser the SAP Subleases;

          (m) CETCO Supply  Agreement.  Parent shall have executed and delivered
     to the Purchaser the CETCO Supply Agreement;

          (n) ION Exchange  License  Agreement.  Parent shall have  executed and
     delivered to the Purchaser the ION Exchange License Agreement;

          (o) License Agreement. Parent shall have executed and delivered to the
     Purchaser the License Agreement;

          (p) Acrylic Acid Supply  Agreement.  Chemdal U.K.  shall have executed
     and delivered to the Purchaser the Acrylic Acid Supply Agreement;

          (q) Tax Forms and Certificates.  The Purchaser shall have received the
     Tax forms and  certifications  required to be  delivered  by Parent and the
     Other Sellers pursuant to Sections 7.07(a) and 7.08(f) of this Agreement;

          (r) Thai Plant Facility.  The manufacturing facility being constructed
     by Parent and its  Affiliates  in Rayong,  Thailand  (the "Thai  Facility")
     shall be delivered to the Purchaser and shall be  Mechanically  Complete as
     defined in Exhibit 5.26 attached hereto; and

          (s) Thai Recordings. Parent shall have delivered, or shall have caused
     to be delivered,  to the  Purchaser,  certificates  from a duly  authorized
     officer of Parent as shall reasonably be required for the Purchaser to make
     the  Thai  Recordings,  each  in form  and  substance  satisfactory  to the
     Purchaser acting reasonably.

                                   ARTICLE IX

                                 INDEMNIFICATION

     SECTION   9.01.   Survival   of   Representations   and   Warranties.   The
representations  and warranties  contained in this Agreement and the obligations
of the parties pursuant to Sections 9.02(i), 9.02(v),  9.02(viii),  9.02(ix) and
9.03(a)(i)  hereof shall survive the Closing and remain in full force and effect
for a period of 15 months  following the Closing Date (it being understood that,
subject to Sections  9.01(a),  9.01(b) and  9.01(c)  hereof,  and subject to the
effect of any applicable statute of limitations,  the obligations of the parties
pursuant to the  remaining  provisions  of Sections  9.02 and 9.03 hereof  shall
survive Closing indefinitely);  provided,  however, that (a) the representations
and warranties  contained in Sections 3.20,  3.21 and 3.23 shall survive for the
period provided in Section 7.08(c) (it being understood that the representations
and warranties  contained in Sections 3.20 and 3.21 shall survive for the period
provided in Section  7.08(c) only to the extent of resulting Tax liabilities and
otherwise  shall  remain  in full  force  and  effect  for a period of 15 months
following the Closing Date); (b) the representations and warranties contained in
Section 3.14 and the  obligations of the parties  pursuant to Section  9.02(vii)
hereof  shall  survive the Closing and remain in full force and effect until the
fourth  anniversary of the Closing Date; and (c) the  obligations of the parties
pursuant to Section  9.02(x)  shall survive the Closing and remain in full force
and effect until the 120th day following

<PAGE>
the expiration of the applicable statute of limitations with respect to the Loss
or Liabilities in question (giving effect to any waiver, mitigation or extension
thereof). If written notice of a claim has been given prior to the expiration of
the applicable  representations and warranties by the Purchaser to Parent, or by
Parent to the Purchaser,  then the relevant representations and warranties shall
survive as to such claim, until such claim has been finally resolved.

     SECTION 9.02.  Indemnification by Parent. The Purchaser, its Affiliates and
their successors and assigns, and the officers, directors,  employees and agents
of the  Purchaser,  its  Affiliates  and their  successors  and assigns (each, a
"Purchaser  Indemnified Party") shall be indemnified and held harmless by Parent
for any and all  Liabilities,  losses,  damages,  claims,  costs  and  expenses,
interest,  awards,  judgments  and  penalties  (including,  without  limitation,
attorneys' and consultants' fees and expenses)  actually suffered or incurred by
them (including,  without  limitation,  any Action or  investigation  brought or
otherwise initiated by any of them) (hereinafter,  a "Loss"),  arising out of or
resulting from:

          (i) the breach of any  representation  or warranty made by the Sellers
     contained in this Agreement (it being  understood that for purposes of this
     Article IX, and except for the representations and warranties  contained at
     Section 3.15 of the Agreement,  such representations and warranties will be
     interpreted  without giving effect to any  qualifications or limitations as
     to "materiality" or "Material Adverse Effect"); or

          (ii) the breach of any covenant or agreement by the Sellers  contained
     in this Agreement; or

          (iii) the Excluded Liabilities; or

          (iv) all  Liabilities,  whether  arising  before or after the  Closing
     Date, arising from or relating to the Remco Businesses; or

          (v) any and all  Liabilities  or Losses  suffered  or  incurred by the
     Purchaser  or the  Company or SAP Thai or the SAP  Business,  including  by
     reason of or in  connection  with any claim or cause of action of any third
     party, to the extent arising out of any action, inaction, event, condition,
     liability or  obligation of the Company,  SAP Thai,  the Sellers or the SAP
     Business occurring or existing prior to the Closing, but only to the extent
     that the  existence of such  Liability or Loss  constitutes a breach by the
     Sellers of their representations and warranties in this Agreement; or

          (vi) the Excluded Assets; or

          (vii) except for any Offsite Environmental Liabilities, and except for
     the matter  specifically  described in Exhibit 5.27  attached  hereto which
     shall be resolved in the manner contemplated therein, any and all Losses or
     Liabilities  pursuant  to  any  Environmental  Law,  or  related  to  gases
     occurring naturally,  geologically or otherwise, in each case, arising from
     or related to any action,  event,  circumstance or condition related to the
     SAP  Business  and  occurring  or existing  on or before the Closing  Date,
     including,  without limitation, (A) any Release of Hazardous Materials into
     the  Environment  at,  to or from the SAP  Real  Property  or any  property
     formerly  owned or operated in connection  with the SAP  Business,  in each
     case on or  prior to the  Closing  (and any  additional  migration  of such
     Release  after the Closing Date) to the extent such Release is in violation
     of any  Environmental  Law or is in a quantity,  concentration or any other
     form that is reportable  or requires  investigation,  remediation  or other
     action  pursuant to any  Environmental  Law, (B) any and all  Environmental
     Claims  arising at any time that relate to the SAP Business or the SAP Real
     Property  on or prior to the  Closing  and (C) any and all  non-compliances
     with or violations of any  applicable  Environmental  Law or  Environmental
     Permit  relating  to the  Company,  SAP  Thai,  the  Sellers,  the SAP Real
     Property  or  the  SAP  Business  on or  prior  to  the  Closing  (and  any
     continuance  of such  non-compliance  or violation  after the Closing Date,
     except,  with respect to this Section  9.02(vii)(C),  to the extent (i) the
     Purchaser was or should have been aware of such  noncompliance or violation
     on or before the Closing  Date,  or (ii) the  condition  constituting  such
     noncompliance  or  violation  is altered or  changed by  Purchaser  and its
     Affiliates after the Closing Date); or

<PAGE>
          (viii) any Losses arising from claims made by any Person in connection
     with the transfer of the employment of the U.K. Designated Employees, or as
     a result of the  subsequent  expiry of notice given to them by the Sellers,
     or arising from any earlier termination of any Person's employment (whether
     such claim  shall be for  wrongful  or unfair  dismissal,  statutory  gross
     redundancy payments,  contractual or other redundancy payment, compensation
     for failure to consult,  pay in lieu of notice,  dismissal at common law or
     otherwise)  and  from and  against  all  actions,  losses,  costs,  claims,
     proceedings,  demands,  judgments,  liabilities  and  expenses  incurred or
     suffered  by  the  Purchaser  in  connection  with  or as a  result  of any
     liability or obligation to any U.K.  Designated Employee in relation to the
     foregoing  (it being  understood  that Parent shall have no  obligation  to
     indemnify a Purchaser Indemnified Party for any Losses specifically arising
     out of,  or  specifically  attributed  to,  the  Purchaser  satisfying  its
     obligations under Article VI hereof); or

          (ix) any Losses arising out of any breach prior to the Closing Date by
     the Sellers of the U.K. Regulations or of any obligation in connection with
     or under any contract of employment of any U.K.  Designated Employee to the
     extent that the event  giving rise to the cause of action in respect of any
     such claim arose prior to the Closing Date; or

          (x) any claim that the  manufacture,  use,  importation,  offering for
     sale  or  sale  of   Indemnified   Products   infringes   the  *   Patents,
     notwithstanding  the inclusion of such matters on the Disclosure  Schedule,
     but only to the extent of the Losses arising from the aggregate  volumes of
     Indemnified Products that the manufacturing  facilities included in the SAP
     Businesses were capable of manufacturing as of the Closing Date (including,
     for this purpose, the anticipated production capacity of 20,000 metric tons
     annually  in the Thai  Facility);  provided,  however,  that the  Purchaser
     agrees to reasonably cooperate with Parent, at Parent's cost, in responding
     to and defending any such assertion of infringement or infringement claims;
     and provided,  further,  however, that the Purchaser acts in a commercially
     reasonable  manner  (which  shall not  require the  Purchaser  to impair or
     jeopardize  the SAP  Business)  to mitigate  the Losses that result from or
     potentially could result from such infringement or alleged infringement; or

          (xi) any Loss or Liability  arising out of any expenditures or amounts
     payable in connection with  construction of the Thai Facility in accordance
     with the Thai Facility Construction Contracts.

     SECTION  9.03.  Indemnification  by  the  Purchaser.  (a)  Subject  to  the
provisions of Section 9.03(b),  Parent,  its Affiliates and their successors and
assigns,  and the  officers,  directors,  employees  and agents of  Parent,  its
Affiliates and their successors and assigns (each, a "Seller Indemnified Party")
shall be  indemnified  and held harmless by the Purchaser for any and all Losses
arising out of or resulting from:

          (i) the breach of any representation or warranty made by the Purchaser
     contained in this Agreement; or

          (ii)  the  breach  of any  covenant  or  agreement  by  the  Purchaser
     contained in this Agreement; or

          (iii) any Assumed Liabilities; or

          (iv) any third party claims to the extent arising primarily out of, or
     relating  primarily to, the conduct of the SAP Business before or after the
     Closing, except (i) to the extent that Parent is obligated to indemnify the
     Purchaser  with respect to such Losses  pursuant to Sections  9.02 and 7.01
     hereof,  or (ii) as  otherwise  contemplated  by this  Agreement  (it being
     understood  that the  Purchaser  shall have no  obligation  to  indemnify a
     Seller  Indemnified  Party  hereunder for any Losses to the extent actually
     paid, satisfied or resolved prior to the date hereof ); or

          (v) any claim  arising out of the  employment or discharge at any time
     on or after the Closing Date by the  Purchaser,  the Company or SAP Thai of
     any employee listed on Section 6.01 of the Disclosure  Schedule and Section
     6.08 of the Disclosure  Schedule  attached hereto or otherwise,  including,
     without limitation, any failure by the Purchaser to satisfy its obligations
     under Article 6 hereof, and any severance amounts payable to such employees
     arising as a result of his or her discharge or termination of employment by
     the Purchaser, the Company or SAP Thai following the Closing Date; or


<PAGE>
          (vi) subject to the terms of Section  9.02(viii),  any Losses  arising
     from claims made by any U.K.  Designated  Employees  against the Sellers in
     connection  with the  transfer  of their  employment  pursuant  to the U.K.
     Regulations or as a result of any  termination  of their  employment by the
     Purchaser  (whether  such claim shall be for wrongful or unfair  dismissal,
     redundancy  payment or  dismissal  at common law or  otherwise)  where such
     termination takes place after the Closing Date.

          (b)  Notwithstanding  anything to the  contrary  contained  in Section
     9.03(a)  herein,  in the event the  Purchaser  is required  to  indemnify a
     Seller  Indemnified  Party for any Loss  pursuant  to this  Article IX, the
     Purchaser shall not have any obligation or otherwise be required to pay any
     amount to such Seller  Indemnified Party on account of such Loss unless and
     until the  Seller  Indemnified  Party has used its  reasonable  efforts  to
     access any of its (or any of its Affiliate's) applicable insurance policies
     in a manner  that is  consistent  with the  terms  of such  policies,  such
     reasonable efforts to include,  without limitation,  the Seller Indemnified
     Party  using  reasonable  efforts to pursue any  claims  denied  under such
     applicable  insurance  policies;  provided,  however,  that, subject to the
     provisions of Section  9.05(b),  the Purchaser shall then only be obligated
     to pay the Seller  Indemnified  Party (i) the amount,  if any, equal to the
     difference  between  the amount the  Purchaser  would  otherwise  have been
     required  to pay  to  such  Seller  Indemnified  Party  hereunder  and  the
     aggregate  amount of any  insurance  proceeds  actually  paid to the Seller
     Indemnified  Party on account of the Loss  giving  rise to the  Purchaser's
     obligation  to  reimburse  the  Seller  Indemnified  Party,  and  (ii)  the
     aggregate  amount of any  deductible  payments  actually paid by the Seller
     Indemnified  Party to an insurance carrier in connection with accessing any
     applicable insurance policies.

     SECTION 9.04. Indemnification  Procedures. A Purchaser Indemnified Party or
a Seller Indemnified Party, as the case may be (for purposes of this Article IX,
an "Indemnified Party"), shall give the indemnifying party under Section 9.02 or
9.03,  as  applicable  (for  purposes of this  Section  9.04,  an  "Indemnifying
Party"),  prompt  written  notice of any matter which an  Indemnified  Party has
determined has given or could give rise to a right of indemnification under this
Agreement,  and in any case  within 60 days of such  determination,  stating the
amount of the claim, if known, and method of computation thereof, and containing
a reference to the  provisions of this  Agreement in respect of which such right
of  indemnification is claimed or arises. The obligations and Liabilities of the
Indemnifying  Party under this  Article IX with  respect to Losses  arising from
claims of any third party which are subject to the indemnification  provided for
in this Article IX ("Third Party  Claims")  shall be governed by and  contingent
upon the following  additional  terms and  conditions:  if an Indemnified  Party
shall receive notice of any Third Party Claim, the Indemnified  Party shall give
the  Indemnifying  Party written notice of such Third Party Claim within 30 days
of the  receipt  by the  Indemnified  Party of such  written  notice;  provided,
however,  that if  such  notice  of a  Third  Party  Claim  is in the  form of a
Complaint  (or  other  similar  legal  document  commencing   litigation),   the
Indemnified Party shall give the Indemnifying Party written notice of such Third
Party  Claim  within 15 days of the  receipt  by the  Indemnified  Party of such
Complaint (or other similar  document);  provided,  further,  however,  that the
failure to provide such written notice shall not release the Indemnifying  Party
from any of its  obligations  under  this  Article  IX except to the  extent the
Indemnifying  Party is  materially  prejudiced  by such  failure  and  shall not
relieve the  Indemnifying  Party from any other  obligation or Liability that it
may have to any  Indemnified  Party otherwise than under this Article IX. If the
Indemnifying  Party  acknowledges  in writing its  obligation  to indemnify  the
Indemnified  Party hereunder  against any Losses that may result from such Third
Party Claim, then the Indemnifying Party shall be entitled to assume and control
the defense of such Third Party Claim at its expense and through  counsel of its
choice if it gives written  notice of its intention to do so to the  Indemnified
Party within 90 days of the receipt of such written notice from the  Indemnified
Party (it being  understood  that,  during such 90 day period,  the Indemnifying
Party may assume and  control  the  defense of such Third Party Claim at its own
expense  and  through  counsel of its  choice,  and,  regardless  of whether the
Indemnifying  Party has assumed control of the defense during the 90 day period,
the  Indemnified  Party may not settle such Third Party Claim during such 90 day
period without the prior written consent of the Indemnifying Party, such consent
not to be unreasonably  withheld,  unless the Indemnifying Party is given a full
and complete  release of any and all liability by all relevant  parties relating
thereto);  provided,  however,  that if there exists or is reasonably  likely to
exist a conflict of interest that would make it inappropriate in the judgment of
the  Indemnified  Party, in its reasonable  discretion,  for the same counsel to
represent  both the  Indemnified  Party  and the  Indemnifying  Party,  then the
Indemnified  Party  shall  be  entitled  to  retain  its  own  counsel,  in each
jurisdiction for which the Indemnified Party determines counsel is required,  at
the expense of the  Indemnifying  Party.  If, prior to the expiration of such 90
day  period,  the  Indemnifying  Party  does  not  acknowledge  in  writing  its
obligation  to indemnify the  Indemnified  Party for any Losses which may result
from the Third Party Claim,  the  Indemnified  Party (i) may elect to assume and
control  the  defense  of such Third  Party  Claim at the  Indemnifying  Party's
expense;  and (ii) the  Indemnified  Party  shall have the right to settle  such
Third Party Claim without the consent of the Indemnifying Party

<PAGE>
after reasonable prior written notice to the Indemnifying  Party of the material
terms of such  proposed  settlement.  In the  event  the  Indemnified  Party is,
directly or  indirectly,  conducting  the  defense  against any such Third Party
Claim, the Indemnifying Party shall cooperate with the Indemnified Party in such
defense and make available to the Indemnified Party, at the Indemnified  Party's
expense,  all  such  witnesses,   records,  materials  and  information  in  the
Indemnifying  Party's  possession  or under  the  Indemnifying  Party's  control
relating  thereto as is reasonably  required by the  Indemnified  Party.  In the
event the  Indemnifying  Party  elects to control the defense of any Third Party
Claim by notifying  the  Indemnified  Party of such  decision  within the 90 day
period provided above,  then (x) the Indemnified  Party shall cooperate with the
Indemnifying Party in such defense and make available to the Indemnifying Party,
at the Indemnifying Party's expense, all witnesses, pertinent records, materials
and information in the Indemnified  Party's  possession or under the Indemnified
Party's control relating  thereto as is reasonably  required by the Indemnifying
Party and (y) the  Indemnifying  Party may not  settle  such Third  Party  Claim
without  the prior  consent of the  Indemnified  Party,  such  consent not to be
unreasonably withheld, unless the Indemnified Party is given a full and complete
release of any and all liability by all relevant  parties relating  thereto.  If
the Indemnifying  Party shall elect to assume the defense of a Third Party Claim
by notifying the  Indemnified  Party of its  obligation to indemnify  such party
during  the 90 day  period  as  provided  above,  then it shall do so at its own
expense;  provided,  however, that all other matters described above as being at
the  expense  of  the  Indemnifying  Party  shall  only  become  payable  by the
Indemnifying  Party if,  when and to the extent that the  Indemnifying  Party is
ultimately  determined  to be  obligated  to  indemnify  the  Indemnified  Party
pursuant to this Article IX.

     SECTION 9.05. Limits on Indemnification. (a) Any indemnity payment required
to be made under this Agreement  shall include any amount  necessary to hold the
Indemnified Party harmless on an After-Tax Basis.

     (b)  Notwithstanding  anything to the contrary contained in this Agreement,
(i) an Indemnifying Party shall not be liable for any claim for  indemnification
pursuant  to Section  9.02(i),  9.02(v),  9.02(vii)  or  9.03(a)(i)  hereof,  as
applicable,  unless  and until the  aggregate  amount of Losses  incurred  by an
Indemnified  Party or group of Indemnified  Parties  pursuant to all claims made
pursuant to all such  Sections in the  aggregate  equals or exceeds  $5,000,000,
after which the  Indemnifying  Party  shall be liable  only for those  Losses in
excess of $5,000,000,  (ii) no Losses shall be claimed under  Sections  9.02(i),
9.02(v), 9.02(vii) or 9.03(a)(i) by an Indemnified Party or group of Indemnified
Parties or shall be  reimbursable  by an  Indemnifying  Party  pursuant  to this
Article IX, or shall be included in calculating  the aggregate  Losses in clause
(i) of this  paragraph,  other than Losses in excess of $150,000  resulting from
any  single  or  aggregated  claims  arising  out of the  same  facts,  event or
circumstances  and (iii) in no event shall the Indemnifying  Party be liable for
aggregate Losses arising under Section  9.02(i),  9.02(v),  9.02(vii),  9.02(x),
9.02(xi) or 9.03(a)(i), as applicable, in excess of the Purchase Price.

     SECTION 9.06. Waiver of Other Remedies. The rights and remedies provided in
this Agreement are cumulative, but absent fraud, shall be the exclusive remedies
of the parties hereto with respect to claims for monetary damages related to the
matters  addressed  herein  and with  respect to the  transactions  contemplated
hereby,  and the parties shall have no other  liability for monetary  damages to
each other under any  statutory  or common law right;  provided,  however,  that
nothing  herein  shall be  construed  as limiting the right of a party hereto to
equitable relief,  other than monetary damages,  for a breach of this Agreement.
Any election of one  available  remedy by a party hereto shall not  constitute a
waiver  of  any  other  available   remedy.   An  Indemnified  Party  may  claim
indemnification hereunder for consequential damages; provided,  however, that an
Indemnified Party shall not claim indemnification for lost profits.

                                    ARTICLE X

                             TERMINATION AND WAIVER

     SECTION  10.01.  Termination.  This Agreement may be terminated at any time
prior to the Closing:

     (a) by the Purchaser if, between the date hereof and the time scheduled for
the Closing:  (i) an event or  condition  occurs that has resulted in or that is
reasonably  likely to result in a Material  Adverse  Effect or (ii) Parent,  the
Company,  SAP Thai or an Other Seller makes a general assignment for the benefit
of
<PAGE>
creditors,  or any  proceeding  shall be  instituted by or against  Parent,  the
Company,  SAP  Thai or an  Other  Seller  seeking  to  adjudicate  any of them a
bankrupt or insolvent,  or seeking  liquidation,  winding up or  reorganization,
arrangement,  adjustment,  protection,  relief or composition of its debts under
any  Law  relating  to  bankruptcy,  insolvency  or  reorganization,   and  such
proceeding is not dismissed within 90 days; or

     (b) by  the  Purchaser,  upon a  breach  of any  representation,  warranty,
covenant or agreement on the part of the Sellers set forth in this Agreement, or
if any  representation  or warranty of the Sellers shall have become untrue,  in
either case,  such that the conditions  set forth in Section  8.02(a) or Section
8.02(b)  would  not be  satisfied  ("Terminating  Sellers'  Breach");  provided,
however,  that, if such  Terminating  Sellers'  Breach is curable by the Sellers
through the exercise of their reasonable  efforts and for so long as the Sellers
continue to exercise such  reasonable  efforts,  the Purchaser may not terminate
this Agreement under this Section 10.01(b); or

     (c) by Parent upon a breach of any  representation,  warranty,  covenant or
agreement on the part of the  Purchaser set forth in this  Agreement,  or if any
representation  or warranty of the Purchaser shall have become untrue, in either
case such that the  conditions set forth in Section  8.01(a) or Section  8.01(b)
would not be satisfied  ("Terminating  Purchaser  Breach");  provided,  however,
that, if such Terminating  Purchaser Breach is curable by the Purchaser  through
the  exercise  of its  reasonable  efforts  and  for so  long  as the  Purchaser
continues to exercise such  reasonable  efforts,  Parent may not terminate  this
Agreement under this Section 10.01(c); or

     (d) by  either  Parent  or the  Purchaser  if the  Closing  shall  not have
occurred by May 31, 2000;  provided,  however,  that the right to terminate this
Agreement under this Section  10.01(d) shall not be available to any party whose
failure to fulfill any obligation under this Agreement shall have been the cause
of, or shall have  resulted  in, the failure of the Closing to occur on or prior
to such date; or

     (e) by the  Purchaser  or  Parent  if, at such  time as this  Agreement  is
submitted  for  approval  to a vote  of the  stockholders  of  Parent,  Parent's
stockholders vote against approval and adoption of this Agreement; or

     (f) by either the  Purchaser  or Parent in the event that any  Governmental
Authority shall have issued an order, decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree,  ruling or other action shall have become
final and nonappealable; or

     (g) by Parent in order to enter into a definitive agreement with respect to
a Superior  Proposal;  provided,  however,  that (x)  Parent  must  provide  the
Purchaser with written notice of such Superior Proposal,  including a reasonable
description  of the material  terms  thereof,  and (y) Parent shall not take any
action  in  respect  of  such  Superior  Proposal,  including  terminating  this
Agreement or entering into an agreement relating to the Superior Proposal, for a
period of five Business Days  following  receipt of such notice by the Purchaser
and until such time as Parent's  Board of Directors has  considered any response
to such notice provided by the Purchaser to Parent during such five Business Day
period; provided,  further, however, that no such termination by Parent pursuant
to this  Section  10.01(g)  shall be  effective  until after Parent has paid the
Purchaser  the Fee (as  defined  herein)  set  forth  in  Section  10.03 of this
Agreement; or

     (h) by the mutual written consent of Parent and the Purchaser.

     SECTION 10.02.  Effect of Termination.  In the event of termination of this
Agreement as provided in Section 10.01,  this Agreement shall  forthwith  become
void and there shall be no liability  on the part of either party hereto  except
(a) as set forth in Sections  5.03 and 10.03 and (b) that  nothing  herein shall
relieve either party from liability for any breach of this Agreement.

<PAGE>
     SECTION 10.03. Fees and Expenses. (a) In the event that:

     (i) (x) this Agreement is terminated pursuant to Section 10.01(e) and at or
prior to the time of the  vote of  Parent's  stockholders  with  respect  to the
Agreement,  an  Acquisition  Proposal shall have been made public and (y) Parent
enters  into  an  agreement  with  respect  to an  Acquisition  Proposal,  or an
Acquisition  Proposal is  consummated,  in each case within 12 months after such
termination of this Agreement; or

     (ii) this Agreement is terminated pursuant to Section 10.01(g); or

     (iii) (x) this Agreement is terminated for any reason,  other than pursuant
to Section 10.01(a)(i), Section 10.01(a)(ii), Section 10.01(c), Section 10.01(f)
or Section  10.01(h),  and (y) Parent enters into an agreement with respect to a
Superior Proposal, or a Superior Proposal is consummated, in each case within 12
months after such termination of this Agreement; then, in any such event, Parent
shall pay the Purchaser a fee of U.S.$20,000,000 (the "Fee"), which amount shall
be payable in immediately  available  funds,  plus all Expenses (as  hereinafter
defined).  Should the Fee and Expenses become payable to the Purchaser  pursuant
to (x) Section  10.03(a)(i),  then Parent shall pay such Fee and Expenses to the
Purchaser  promptly  (but  in  no  event  later  than  one  Business  Day  after
consummation of the Acquisition Proposal),  or (y) Section  10.03(a)(iii),  then
Parent  shall pay such Fee and  Expenses to the  Purchaser  promptly  (but in no
event later than one Business Day after  consummation of the Superior  Proposal)
or (z) Section 10.03(a)(ii),  then Parent shall pay such Fee and Expenses to the
Purchaser  prior to termination of the Agreement  pursuant to Section  10.01(g).
For  the  purposes  of  this  Section   10.03(a),   "Expenses"  shall  mean  all
out-of-pocket  expenses  and  fees  up  to  U.S.$3,000,000,   in  the  aggregate
(including,  without  limitation,  fees and  expenses  payable  to all banks and
investment  banking  firms and all fees of  counsel,  accountants,  experts  and
consultants to the Purchaser)  actually incurred or accrued by, or on behalf of,
the  Purchaser  in  connection   with  this   Agreement  and  the   transactions
contemplated hereby.

     (b) In the event that  Parent  shall  fail to pay the Fee and any  Expenses
when due, the term "Expenses"  shall be deemed to include the costs and expenses
actually incurred or accrued (including,  without limitation,  fees and expenses
of  counsel)  by the  Purchaser  in  connection  with the  collection  under and
enforcement  of this  Section  10.03,  together  with  interest  on such  unpaid
Expenses  and Fee,  commencing  on the date that the  Expenses  and such Fee, as
applicable,  became  due,  at a rate  equal  to the  rate of  interest  publicly
announced by Citibank, N.A., from time to time, in the City of New York, as such
bank's Base Rate plus 2%.

                                   ARTICLE XI

                               GENERAL PROVISIONS

     SECTION 11.01. Expenses.  Except as otherwise provided in Sections 5.06(a),
7.06, and 10.03,  and as otherwise may be contemplated  by this  Agreement,  all
costs and expenses,  including,  without  limitation,  fees and disbursements of
counsel,  financial  advisors and accountants,  incurred in connection with this
Agreement and the  transactions  contemplated  hereby shall be paid by the party
incurring  such  costs and  expenses,  whether  or not the  Closing  shall  have
occurred.

     SECTION 11.02. Notices. All notices,  requests,  claims,  demands and other
communications  hereunder  shall be in writing  and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in Person, by telecopy,
cable,  telegram or telex or by registered or certified  mail (postage  prepaid,
return receipt requested) to the respective  parties at the following  addresses
(or at such other address for a party as shall be specified in a notice given in
accordance with this Section 11.02):
<PAGE>
                  if to the Purchaser:

                           BASF Aktiengesellschaft
                           Carl-Bosch-Strasse 38
                           67056 Ludwigshafen
                           Germany
                           Telecopier No.:  011-49-621-609-2502
                           Attention:  Mr. Harald Schultheiss

                  with a copy to:

                           Shearman & Sterling
                           599 Lexington Avenue
                           New York, New York  10022
                           Telecopier No:  (212) 848-7179
                           Attention:  Peter D. Lyons, Esq.

                  with a copy to:

                           BASF Corporation
                           3000 Continental Drive North
                           Mount Olive, NJ  07828-1234
                           Telecopier No.:  (973) 426-3052
                           Attention:  Mr. Cenan Ozmeral

                  if to Parent:

                           AMCOL International Corporation
                           One North Arlington
                           1500 West Shure Drive
                           Arlington Heights, IL  60004
                           Telecopier No.:  (847) 394-8730
                           Attention:  Mr. Paul Shelton

                  with a copy to:

                           Lord, Bissell & Brook
                           115 South La Salle Street
                           Chicago, Illinois  60603
                           Telecopier No:  (312) 443-0336
                           Attention:  Clarence O. Redman, Esq.

     SECTION 11.03. Public Announcements. The Purchaser and Parent shall consult
with each other before issuing any press release or otherwise  making any public
statements  with respect to this  Agreement  and the  transactions  contemplated
hereby  and  shall  not issue any such  press  release  or make any such  public
statement prior to such consultation and agreement on such press release, except
as may be required by Law or any listing  agreement  with a national  securities
exchange to which the Purchaser or Parent is a party.

     SECTION  11.04.  Headings.  The  descriptive  headings  contained  in  this
Agreement are for  convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.

     SECTION  11.05.  Severability.  If any  term  or  other  provision  of this
Agreement  is  invalid,  illegal or  incapable  of being  enforced by any Law or
public  policy,   all  other  terms  and  provisions  of  this  Agreement  shall
nevertheless  remain in full force and effect so long as the  economic  or legal
substance of the transactions  contemplated hereby is not affected in any manner
materially  adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall  negotiate  in good  faith

<PAGE>
to modify this  Agreement so as to effect the original  intent of the parties as
closely as  possible  in an  acceptable  manner in order  that the  transactions
contemplated  hereby are consummated as originally  contemplated to the greatest
extent possible.

     SECTION  11.06.  Entire  Agreement.  This  Agreement  and  the  Transaction
Agreements constitute the entire agreement of the parties hereto with respect to
the  subject  matter  hereof and  thereof  and,  except for the  Confidentiality
Agreement,  supersede all prior  agreements and  undertakings,  both written and
oral, between Parent and the Purchaser with respect to the subject matter hereof
and thereof.

     SECTION  11.07.  Assignment.  This  Agreement  shall  not  be  assigned  by
operation of Law or  otherwise,  except that the Purchaser may assign all or any
of its rights and  obligations  hereunder  to any  Affiliate  of the  Purchaser,
provided,  however,  that no such assignment  shall relieve the Purchaser of its
obligations hereunder if such assignee does not perform such obligations.

     SECTION  11.08.  Third Party  Beneficiaries.  Except for the  provisions of
Article IX and Article VII relating to Indemnified  Parties,  (a) the provisions
of this Agreement are solely for the benefit of the parties and are not intended
to confer upon any Person  except the  parties any rights or remedies  hereunder
and (b)  there  are no third  party  beneficiaries  of this  Agreement  and this
Agreement shall not provide any third Person with any remedy, claim,  liability,
reimbursement,  claim of  action  or other  right in  excess  of those  existing
without reference to this Agreement.

     SECTION  11.09.  Amendment.  This  Agreement may not be amended or modified
except (a) by an  instrument  in writing  signed by, or on behalf of, Parent and
the Purchaser or (b) by a waiver in accordance with Section 11.10.

     SECTION  11.10.  Waiver.  Either party to this Agreement may (a) extend the
time for the  performance  of any of the  obligations or other acts of the other
party, (b) waive any inaccuracies in the  representations  and warranties of the
other party  contained  herein or in any  document  delivered by the other party
pursuant hereto or (c) waive compliance with any of the agreements or conditions
of the other party contained herein. Any such extension or waiver shall be valid
only if set forth in an  instrument  in writing  signed by the party to be bound
thereby,  and shall thereafter,  except as otherwise  specified in such writing,
operate as a waiver (or satisfaction) of such condition for all purposes of this
Agreement.  Any  waiver of any term or  condition  shall not be  construed  as a
waiver  of any  subsequent  breach  or a  subsequent  waiver of the same term or
condition,  or a waiver of any other term or condition,  of this Agreement.  The
failure of any party to assert any of its rights  hereunder shall not constitute
a waiver of any of such rights.

     SECTION  11.11.  Governing  Law. This  Agreement  shall be governed by, and
construed in accordance  with,  the laws of the State of Delaware  applicable to
contracts  executed  in and to be  performed  in that  State.  All  actions  and
proceedings  arising  out of or relating  to this  Agreement  shall be heard and
determined in any Delaware  state or federal court  sitting in  Wilmington.  The
parties hereto hereby (i) submit to the exclusive  jurisdiction  of any Delaware
state or federal  court  sitting  in  Wilmington  for the  purpose of any Action
arising  out of or relating to this  Agreement  brought by any party  hereto and
(ii) waive, and agree not to assert by way of motion,  defense, or otherwise, in
any such Action, any claim that it is not subject personally to the jurisdiction
of the above-named courts, that its property is exempt or immune from attachment
or  execution,  that the Action is brought in an  inconvenient  forum,  that the
venue of the Action is  improper,  or that this  Agreement  or the  transactions
contemplated hereby may not be enforced in or by any of the above-named courts.

     SECTION 11.12. Counterparts.  This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed  shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.

     SECTION  11.13.  Specific  Performance.   The  parties  hereto  agree  that
irreparable  damage would occur in the event any provision of this Agreement was
not performed in accordance  with the terms hereof and that the parties shall be
entitled to specific  performance of the terms hereof,  in addition to any other
remedy at law or equity.
<PAGE>
     IN WITNESS WHEREOF,  Parent and the Purchaser have caused this Agreement to
be  executed as of the date first  written  above by their  respective  officers
thereunto duly authorized.

                                     AMCOL INTERNATIONAL CORPORATION



                                     By:      /s/ John Hughes
                                         Name:       John Hughes
                                         Title:      Chairman & CEO


                                     BASF AKTIENGESELLSCHAFT



                                     By:      /s/ Jorg Buchmuller
                                          Name:       Jorg Buchmuller
                                          Title:      Director, Legal


                                     BASF AKTIENGESELLSCHAFT



                                     By:      /s/ Harald Schultheiss
                                            Name:       Harald Schultheiss
                                            Title:      Director
<PAGE>
                                          [Schroder & Co. Inc. Letterhead]


                                                     November 22, 1999



The Board of Directors
AMCOL International Corporation
1500 West Shore Drive
Suite 500
Arlington Heights, IL 60004

Members of the Board of Directors:

We understand that AMCOL International Corporation ("AMCOL" or the "Company") is
entering into a transaction  (the  "Transaction")  pursuant to which the Company
would sell substantially all of the assets and certain liabilities (as described
in the Agreement (as defined below)) associated with the Superabsorbent Polymers
Business  (the "SAP  Business")  to BASF AG ("BASF") for cash  consideration  of
$656.5  million,  subject  to  adjustment  as  provided  in the  Agreement  (the
"Transaction  Consideration").  The Agreement  provides for an adjustment of the
Transaction  Consideration  to the extent that the actual net working capital of
the SAP Business is greater or less than the targeted  working capital amount as
indicated by management of approximately $34,175,000.

You have requested that Schroder & Co. Inc. ("Schroders") render an opinion (the
"Opinion"), as investment bankers, as to the fairness to AMCOL, from a financial
point of view, of the Transaction Consideration being paid to AMCOL.

Schroders,  as part of its investment banking business,  is regularly engaged in
the  valuation of  businesses  and  securities  in  connection  with mergers and
acquisitions,  negotiated  underwritings,  secondary distributions of listed and
unlisted securities, private placements and valuations for estate, corporate and
other purposes.  Schroders has acted as financial  advisor to AMCOL with respect
to the  Transaction  for  which  we  will  receive  a fee for  our  services,  a
significant portion of which is contingent upon consummation of the Transaction.

In connection with the Opinion set forth herein, we have, among other things:

     1.   Reviewed certain publicly available business and financial information
          relating to AMCOL and the SAP Business that we deemed relevant;

     2.   Reviewed  certain   unaudited   historical   financial  and  operating
          information relating to the SAP Business provided to us by AMCOL;
<PAGE>
     3.   Reviewed certain other information,  including financial and operating
          forecasts of the SAP Business, provided to us by AMCOL;

     4.   Held discussions with senior management and  representatives  of AMCOL
          regarding the business,  operations  and prospects of the SAP Business
          and its products;

     5.   Reviewed a draft Asset  Purchase  Agreement  dated  November 19, 1999,
          between AMCOL and BASF relating to the Transaction (the "Agreement");

     6.   Performed various valuation analyses, as we deemed appropriate, of the
          SAP  Business  using  generally  accepted  analytical   methodologies,
          including  (i) the  application  to the  financial  results of the SAP
          Business of the public trading  multiples of companies which we deemed
          comparable;  (ii) the application to the financial  results of the SAP
          Business of the multiples reflected in recent mergers and acquisitions
          for businesses which we deemed comparable;  (iii) discounted cash flow
          analyses of the SAP Business'  operations  and (iv)  leveraged  buyout
          analysis of the SAP Business' operations;

     7.   Considered the results of solicitations of interest from third parties
          regarding potential business combinations  involving the SAP Business;
          and

     8.   Performed  such  other  financial  studies,  analyses,  inquiries  and
          investigations,  as we deemed  appropriate  including an assessment of
          the current economic and market conditions.

In  rendering  the  Opinion,  we have  assumed and relied upon the  accuracy and
completeness  of all  information  (including the  assumptions and bases used in
connection with preparation of forecasts and projections)  supplied or otherwise
made  available to us by the Company and the SAP Business or obtained by us from
publicly available sources,  and upon the assurance of the Company's  management
that  they  are not  aware  of any  information  or facts  that  would  make the
information  provided to us incomplete or misleading.  We have also assumed that
there will be no decrease in the  Transaction  Consideration  as a result of the
working  capital  adjustment  provided  for  in  the  Agreement.   We  have  not
independently verified such information,  undertaken an independent appraisal of
the assets or liabilities (contingent or otherwise) of the SAP Business, or been
furnished with any such appraisals.  With respect to financial forecasts for the
SAP Business, we have been advised by the Company, and we have assumed,  without
independent  investigation,  that they have been reasonably prepared and reflect
the best currently  available  estimates and judgment as to the expected  future
financial performance of the SAP Business.

You have  advised us that the Company does not  disclose  internal  forecasts or
projections  of the type provided to Schroders and therefore  such forecasts and
projections  were not prepared with expectation of public  disclosure.  You have
advised  us that  such  forecasts  and  projections  were  based  upon  numerous
variables and  assumptions  that are inherently  uncertain,  including,  without
limitation,  factors  related to general  economic and  competitive  conditions.
Accordingly,  actual  results could vary  significantly  from those set forth in
such projections.
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The Opinion is  necessarily  based upon  financial,  economic,  market and other
conditions as they exist,  and the  information  made available to us, as of the
date hereof. We disclaim any undertakings or obligations to advise any person of
any  change in any fact or matter  affecting  the  Opinion  which may come or be
brought to our attention after the date of the Opinion.

In the ordinary  course of our business,  we may hold and actively trade debt or
equity  securities  of AMCOL  for our own  account  or for the  accounts  of our
customers  and,  accordingly,  may at any time hold a long or short  position in
such securities.

The Opinion does not constitute a  recommendation  as to any action the Board of
Directors  of the  Company or any  stockholder  of the  Company  should  take in
connection  with the  Transaction  or any aspect  thereof.  The Opinion  relates
solely  to the  fairness  from a  financial  point  of view  of the  Transaction
Consideration  being paid to AMCOL.  We have not taken into  account  nor are we
opining on any tax  liabilities  related to or  resulting  from the  Transaction
which the Company may incur.  We express no opinion  herein as to the structure,
terms or effect of any other  aspect of the  Transaction  or as to the merits of
the underlying decision of the Company to enter into the Transaction.

This letter is for the information of the Board of Directors of AMCOL solely for
its  use in  evaluating  the  fairness  from a  financial  point  of view of the
Transaction  Consideration being paid to AMCOL. It may not be used for any other
purpose or referred to without our prior written consent.

Based  upon and  subject  to all of the  foregoing,  we are of the  opinion,  as
investment  bankers,  that as of the date hereof, the Transaction  Consideration
being paid is fair, from a financial point of view, to AMCOL.

                                      Very truly yours,


                                     /s/SCHRODER & CO. INC.