Document:

ARROW CAPITAL GROUP, INC.

                      2000 EMPLOYEE STOCK COMPENSATION PLAN

         1.       Purpose of the Plan.
                  --------------------
         This 2000  Employee  Stock  Compensation  Plan  ("Plan") is intended to
further the growth and advance the best interests of ARROW CAPITAL GROUP,  INC.,
a Nevada corporation ("Company"),  and any Affiliated Corporation, by supporting
and increasing the Company's ability to attract,  retain and compensate  persons
of  experience  and ability  and whose  services  are  considered  valuable,  to
encourage  the sense of  proprietorship  in such  persons,  and to stimulate the
active  interest of such persons in the  development  and success of the Company
and any Affiliate Corporation. This Plan provides for stock compensation through
the award of the Company's Common Stock.

         2.       Definitions.
                  ------------
         Whenever  used in this Plan,  except  where the context  might  clearly
indicate  otherwise,  the  following  terms shall have the meanings set forth in
this section:

         (a) "Act" means the U.S. Securities Act of 1933, as amended.

         (b)  "Affiliated  Corporation"  means any Parent or  Subsidiary  of the
Company.

         (c)  "Award"  or "grant"  means any grant or sale of Common  Stock made
under this Plan.

         (d) "Board of  Directors"  means the Board of Directors of the Company.
The term "Committee" is defined in Section 4 of this Plan.

         (e) "Code" means the Internal Revenue Code of 1986, as amended.

         (f) "Common Stock" or "Common Shares" means the common stock, $.001 par
value per share,  of the Company,  or in the event that the  outstanding  Common
Shares  are  hereafter  changed  into  or  exchanged  for  different  shares  or
securities of the Company, such other shares or securities.

         (g) "Date of Grant" means the day the Committee authorizes the grant of
Common Stock or such later date as may be specified by the Committee as the date
a particular award will become effective.

         (h) "Employee" means and includes the following persons:  (i) executive
officers,   officers  and  directors   (including  advisory  and  other  special
directors)  of the Company or an  Affiliated  Corporation;  (ii)  full-time  and
part-time employees of the Company or an Affiliated  Corporation;  (iii) natural
persons  engaged by the Company or an  Affiliated  Corporation  as a consultant,
advisor or agent; and (iv) a lawyer, law firm,  accountant or accounting firm or
other  professional or professional firm engaged by the Company or an Affiliated
Corporation.

         (i)  "Parent"  means any  corporation  owning  50% or more of the total
combined  voting  stock of all classes of the Company or of another  corporation
qualifying as a Parent within this definition.

                                      -1-
<PAGE>

         (j) "Participant" means an Employee to whom an Award of Plan Shares has
been made.

         (k)  "Plan  Shares"  means  shares of  Common  Stock  from time to time
subject to this Plan.

         (l)  "Subsidiary"  means a  corporation  more  than 50% of whose  total
combined  capital  stock of all  classes  is held by the  Company  or by another
corporation qualifying as a Subsidiary within this definition.

         3.       Effective Date of the Plan.
                  ---------------------------
     This  Plan  shall be  effective  as of  October  6,  2000,  the date of its
adoption by the Board,  and no ESO shall be granted  pursuant to this Plan after
its expiration. This Plan shall expire on October 6, 2010 except as to ESOs then
outstanding,  which  shall  remain in effect  until  they have  expired  or been
exercised.

         4.       Administration of the Plan.
                  --------------------------
     The ESC Compensation Committee of the Board of Directors ("Committee"), and
in default of the appointment or continued existence of such Committee the Board
of Directors,  will be responsible for the administration of this Plan, and will
have sole power to award Common  Shares under this Plan.  Subject to the express
provisions of this Plan,  the Committee  shall have full  authority and sole and
absolute  discretion to interpret  this Plan,  to  prescribe,  amend and rescind
rules and regulations relating to it, and to make all other determinations which
it believes  to be  necessary  or  advisable  in  administering  this Plan.  The
determination of those eligible to receive an award of Plan Shares shall rest in
the sole  discretion of the  Committee,  subject to the provisions of this Plan.
Awards  of Plan  Shares  may be  made as  compensation  for  services  rendered,
directly or in lieu of other compensation  payable, as a bonus in recognition of
past service or  performance  or may be sold to an Employee as herein  provided.
The  Committee  may correct any defect,  supply any  omission or  reconcile  any
inconsistency  in this Plan in such  manner  and to such  extent  it shall  deem
necessary to carry it into effect.  Any decision  made, or action taken,  by the
Committee  arising  out  of  or  in  connection  with  the   interpretation  and
administration of this Plan shall be final and conclusive.

         5.       Stock Subject to the Plan.
                  --------------------------
     The maximum  number of Plan Shares which may be awarded  under this Plan is
1,500,000 shares.

         6.       Persons Eligible to Receive Awards.
                  ----------------------------------
     Awards may be granted only to Employees (as herein defined).

         7.       Grants or Awards of Plan Shares.
                  -------------------------------
         Except as otherwise  provided herein, the Committee shall have complete
discretion  to  determine  when and to which  Employees  Plan  Shares  are to be
granted,  and the number of Plan Shares to be awarded to each Employee.  A grant
to an Employee may be made for cash,  property,  services rendered or other form
of payment  constituting lawful  consideration under applicable law; Plan Shares
awarded other than for services rendered shall be sold at not less than the fair
value thereof on the date of grant.

                                      -2-
<PAGE>

No grant will be made if, in the judgment of the  Committee,  such a grant would
constitute  a public  distribution  with the meaning of the Act or the rules and
regulations promulgated thereunder.

         8.       Delivery of Stock Certificates.
                  ------------------------------
         As promptly as practicable  after  authorizing an award of Plan Shares,
the Company  shall  deliver to the person who is the  recipient of the award,  a
certificate or certificates  registered in that person's name,  representing the
number of Plan  Shares  that were  granted.  Unless  the Plan  Shares  have been
registered under the Act, each  certificate  evidencing Plan Shares shall bear a
legend to indicate that such shares  represented by the certificate  were issued
in a transaction which was not registered under the Act, and may only be sold or
transferred in a transaction  that is registered under the Act or is exempt from
the registration  requirements of the Act. In the absence of registration  under
the Act,  any person  awarded Plan Shares may be required to execute and deliver
to the Company an investment  letter,  satisfactory in form and substance to the
Company,  prior to issuance  and  delivery  of the shares.  An award may be made
under this Plan  wherein the Plan  Shares may be issued only after  registration
under the Act.

         9.       Assignability.
                  --------------
         An award of Plan Shares may not be assigned. Plan Shares themselves may
be assigned only after such shares have been awarded, issued and delivered,  and
only in accordance with law and any transfer restrictions imposed at the time of
award.

         10.      Employment not Conferred.
                  -----------------------
         Nothing in this Plan or in the award of Plan Shares  shall  confer upon
any  Employee  the right to continue in the employ of the Company or  Affiliated
Corporation nor shall it interfere with or restrict in any way the lawful rights
of the Company or any  Affiliated  Corporation  to discharge any Employee at any
time for any reason whatsoever, with or without cause.

         11.      Laws and Regulations.
                  --------------------
         The  obligation  of the  Company  to  issue  and  deliver  Plan  Shares
following  an award under this Plan shall be subject to the  condition  that the
Company be satisfied that the sale and delivery thereof will not violate the Act
or any other applicable laws, rules or regulations.

         12.      Withholding of Taxes.
                  -------------------
         If  subject  to   withholding   tax,  the  Company  or  any  Affiliated
Corporation  may require that the Employee  concurrently  pay to the Company the
entire  amount  or a portion  of any  taxes  which  the  Company  or  Affiliated
Corporation  is required to withhold by reason of granting Plan Shares,  in such
amount as the Company or Affiliated Corporation in its discretion may determine.
In lieu of part or all of any such  payment,  the Employee may elect to have the
Company or Affiliated Corporation withhold from the Plan Shares issued hereunder
a sufficient number of shares to satisfy withholding obligations. If the Company
or  Affiliated  Corporation  becomes  required to pay  withholding  taxes to any
federal,  state or other  taxing  authority  as a result of the granting of Plan
Shares, and the Employee fails to provide the

                                      -3-
<PAGE>

Company  or  Affiliated  Corporation  with  the  funds  with  which  to pay that
withholding tax, the Company or Affiliated Corporation may withhold up to 50% of
each  payment of salary or bonus to the  Employee  (which will be in addition to
any  required  or  permitted  withholding),  until  the  Company  or  Affiliated
Corporation has been  reimbursed for the entire  withholding tax it was required
to pay in respect of the award of Plan Shares.

         13.      Reservation of Shares.
                  ---------------------
         The  stock  subject  to this  Plan  shall,  at all  times,  consist  of
authorized  but unissued  Common Shares,  or previously  issued shares of Common
Stock  reacquired or held by the Company or an Affiliated  Corporation  equal to
the  maximum  number of shares the Company may be required to issue as stated in
Section 5 of this Plan,  and such number of Common Shares hereby is reserved for
such purpose.  The  Committee may decrease the number of shares  subject to this
Plan,  but only the Board of  Directors  my increase  such  number,  except as a
consequence  of a  stock  split  or  other  reorganization  or  recapitalization
affecting all Common Shares.

         14.      Amendment and Termination of the Plan.
                  -------------------------------------
         The  Committee  may suspend or terminate  this Plan at any time or from
time to time, but no such action shall  adversely  affect the rights of a person
granted an Award under this Plan prior to that date. Otherwise,  this Plan shall
terminate on the earlier of the  terminal  date stated in Section 3 of this Plan
or the date when all Plan  Shares have been  issued.  The  Committee  shall have
absolute  discretion  to amend  this  Plan,  subject  only to those  limitations
expressly set forth herein;  however,  the Committee  shall have no authority to
extend the term of this Plan,  to increase the number of Plan Shares  subject to
award  under  this Plan or to amend the  definition  of  "Employee"  to  include
executive officers or directors of the Company or any Affiliated Corporation.

         15.      Delivery of Plan.
                  -----------------
         A copy or  synopsis  (for  which  copy the  prospectus  will  serve) or
description  of this Plan shall be delivered to every person to whom an award of
Plan Shares is made.  The  Secretary of the Company may, but is not required to,
also  deliver  a  copy  of  the  resolution  or  resolutions  of  the  Committee
authorizing the award.

         16.      Liability.
                  ----------
         No  member  of the  Board of  Directors,  the  Committee  or any  other
committee of directors,  or officers,  employees or agents of the Company or any
Affiliated  Corporation shall be personally  liable for any action,  omission or
determination made in good faith in connection with this Plan.

         17.      Miscellaneous Provisions.
                  ------------------------
         The  place of  administration  of this  Plan  shall be in the  State of
Nevada (or subsequently,  wherever the Company's principal executive offices are
located), and the validity, construction, interpretation and effect of this Plan
and of its rules,  regulations  and rights  relating to it, shall be  determined
solely in  accordance  with the laws of the State of  Nevada.  Without  amending
thisPlan,  the  Committee  may issue Plan Shares to employees of the Company who
are foreign  nationals or employed  outside the United States,  or both, on such
terms and conditions  different from those specified in this Plan but consistent
with the purpose of this Plan,  as it deems  necessary  and  desirable to create
equitable  opportunities  given differences in tax laws in other countries.  All
expenses of  administering  this Plan and issuing  Plan Shares shall be borne by
the Company.

                                      -4-
<PAGE>

         18.      Reorganizations and Recapitalizations of the Company.
                  -----------------------------------------------------
         (a) The shares of Common  Stock  subject to this Plan are shares of the
Common  Stock of the Company as currently  constituted.  If, and  whenever,  the
Company shall effect a subdivision or  consolidation  of shares or other capital
readjustment, the payment of a Common Stock dividend, a stock split, combination
of  shares  (reverse  stock  split) or  recapitalization  or other  increase  or
reduction  of the  number of  shares of the  Common  Stock  outstanding  without
receiving compensation therefor in money, services or property,  then the number
of shares  of Common  Stock  subject  to this Plan  shall (i) in the event of an
increase in the number of outstanding shares, be proportionately  increased; and
(ii) in the  event of a  reduction  in the  number  of  outstanding  shares,  be
proportionately reduced.

         (b) Except as  expressly  provided  above,  the  Company's  issuance of
shares of Common Stock of any class,  or securities  convertible  into shares of
Common  Stock of any  class,  for cash or  property,  or for labor or  services,
either upon direct sale or upon the  exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company convertible
into or exchangeable for shares of Common Stock or other  securities,  shall not
affect,  and no adjustment by reason  thereof shall be made with respect to, the
number of shares of Common Stock subject to this Plan.

By signature below, the undersigned  officers of the Company hereby certify that
the foregoing is a true and correct copy of the 2000 Employee Stock Compensation
Plan of the Company.

DATED:   October 6, 2000

                                              ARROW CAPITAL GROUP, INC.

                                              ----------------------
                                              James Season, President

                                              -------------------------
                                              Juan P. Martin, Secretary

                                      -5-
<PAGE>

                         CERTIFICATION OF PLAN ADOPTION

     I, the undersigned  Secretary of this corporation,  hereby certify that the
foregoing 2000 Employee Stock  Compensation  Plan of this  corporation  was duly
approved  by the  requisite  number of holders  of the  issued and  outstanding,
common stock of this corporation as of the below date.

Date of Approval:  October 6, 2000

(SEAL)
                                                       Juan P. Martin, Secretary

                                      -6-EXHIBIT 10.9

<PAGE>

                                   AGREEMENT

            THIS AGREEMENT made as of the 29th day of February, 2000.

B E T W E E N:

            STAKE TECHNOLOGY  LTD., a corporation  organized under the laws of
            Canada
            (hereinafter referred to as "Stake")

                                                             OF THE FIRST PART

                                    - and -

            GEORGE F. PETTINOS,  INC., a corporation  organized under the laws
            of the State of  Delaware,  one of the  United  States of  America
            (hereinafter referred to as the "Vendor")

                                                            OF THE SECOND PART

                                    - and -

            U.S.  SILICA  COMPANY,  a corporation  organized under the laws of
            the  State  of  Delaware,  one of the  United  States  of  America
            (hereinafter referred to as "U.S. Silica")

                                                             OF THE THIRD PART

                                    - and -

            GEORGE F.  PETTINOS  (CANADA)  LIMITED,  a  corporation  organized
            under the laws of the Province of Ontario
            (hereinafter referred to as the "Company")

                                                            OF THE FOURTH PART

            WHEREAS the Vendor owns all of the issued and outstanding shares of
the Company, being 200 common shares without par value;

            AND WHEREAS the Vendor wishes to sell such shares to Stake for
$4,700,000
<PAGE>

      NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
mutual covenants contained herein, and other good and valuable consideration
(the receipt and sufficiency of which is hereby acknowledged), the parties
hereto agree as follows:

1     DEFINED TERMS AND INTERPRETATION

1.1 Definitions. Whenever used in this Agreement, unless there is something in
the subject matter or context inconsistent therewith, the following words and
terms shall have the following meanings, respectively:

      (1)   "Assets" means, with respect to the Company, all the undertaking,
            property and assets of the Company as the case may be, including,
            without limitation, all proprietary rights, trade secrets and other
            property and assets, real and personal, applicable to or used in
            connection with the Business, whether owned, licensed or leased, of
            every kind and description and wheresoever situated;

      (2)   "Balance Sheet Date" means December 31, 1999;

      (3)   "Business" means the businesses carried on by the Company at the
            date hereof;

      (4)   "Best Knowledge" of the Vendor (or words of like import) means, when
            used in connection with a representation or warranty, and except as
            otherwise provided herein, the actual knowledge of the persons set
            forth in Schedule "I" hereto;

      (5)   "Business Day" means a day on which the principal commercial banks
            located at Toronto, Ontario and Berkely Spring, West Virginia are
            open for business during normal banking hours;

      (6)   "Closing" means the completion of the sale and purchase contemplated
            by this Agreement;

      (7)   "Closing Date" means February 29, 2000, or such earlier or later
            date as may be mutually acceptable to the Parties;

      (8)   "Company" means George F. Pettinos (Canada) Ltd.;

      (9)   "Company's Financial Statements" means the balance sheet of the
            Company as at December 31, 1999 and the accompanying statement of
            income for the period then ended, which balance sheet and
            accompanying income statement are annexed hereto as Schedule A;

                                       2
<PAGE>

      (10)  "Consents" means consents, approvals, authorizations, orders,
            registrations and filings, permits, or licences required by any
            applicable regulatory authority with relation to the transactions
            contemplated by this Agreement;

      (11)  "Contingent Liability" means any liability which, under Generally
            Accepted Accounting Principles, would be considered a contingent
            liability of the Company or a Person as the case may be hereunder
            and, without limiting the generality of the foregoing, includes any
            potential claim or liability under litigation or regulatory
            proceedings or in respect of any uninsured claim or in respect of
            any insured claim (such as co-insurance, a deductible or a policy
            limit);

      (12)  "Contractual or Other Right or Obligation" means any form of
            agreement, contract, instrument, license, permit, registration,
            judgment, order, decree, indenture, lease, engagement, commitment or
            franchise;

      (13)  "Debt" with respect to the Company hereunder means (i) any
            indebtedness, liability or obligation of such Person which, under
            Generally Accepted Accounting Principles, would be considered a
            liability for the purpose of balance sheet presentation, (ii) all
            indebtedness, liability or obligations of the Company or any such
            Person secured by any Encumbrance, whether or not the same is shared
            by the Company or any other Person, and (iii) all indebtedness,
            liability or obligation of the type referred to in (i) and (ii) of
            this definition of another Person which the Company has, directly or
            indirectly, guaranteed, acted as surety or indemnitee, endorsed,
            assumed, accepted, factored with recourse, agreed to purchase or
            repurchase, or in respect of which the Company or such Person has
            agreed to provide any other form of financial assistance (including,
            without limitation, supplying or advancing funds, or maintaining
            solvency or working capital or equity or "take-or-pay" agreements or
            "keep-well" agreements) under which the Company or that Person is or
            may become liable;

      (14)  "Encumbrance" means any form of mortgage, charge, security interest,
            lien, adverse claim, pledge, encumbrance or right or privilege
            affecting or capable of affecting the title or right of ownership or
            ability to transfer or convey any property or asset;

      (15)  "Environmental Laws" means all federal, provincial, municipal, local
            or foreign laws, statutes, ordinances, by-laws and regulations and
            orders, directives and decisions rendered by, and policies,
            instructions, guidelines and similar guidance of, any ministry,
            department or administrative or regulatory agency or other
            governmental authority, each as supplemented or amended from time to
            time and the common law to the extent relating to pollution or the
            protection of the environment or natural resources, occupational or
            public health and safety or the manufacture, processing,
            distribution, use, treatment, storage, disposal, discharge,
            packaging, transport, handling, containment, clean-up or other
            remediation or corrective action

                                       3
<PAGE>

            of any pollutants, contaminants, chemicals or wastes or substances,
            including, without limitation, industrial, toxic, hazardous or
            radioactive wastes or substances and including any admixture thereof
            and specifically including petroleum and all fractions and
            derivatives thereof or synthetic substitutes therefor and asbestos
            or asbestos containing materials;

      (16)  "Generally Accepted Accounting Principles" means with respect to the
            Company at any time, accounting principles, practices and procedures
            generally accepted in Canada, applied on a basis consistent with
            those applied in previous years, as authorized by the Canadian
            Institute of Chartered Accountants;

      (17)  "Material Adverse Effect" means such events or circumstances in the
            aggregate which has had or will have a material adverse effect on
            the property, assets, Business or financial condition of the
            Company;

      (18)  "Parties" means, collectively, the parties to this Agreement and
            "Party" means any of them;

      (19)  "Permitted Encumbrances" means:

            (a)   liens for taxes, assessments and governmental charges due and
                  being contested in good faith and diligently by appropriate
                  proceedings (and for the payment of which adequate provision
                  has been made);

            (b)   servitudes, easements, restrictions, rights-of-way and other
                  similar rights in real property or any interest therein,
                  provided the same are not of such nature as to materially
                  adversely affect the use of the property subject thereto by
                  the Company;

            (c)   liens for taxes either not due and payable or due but for
                  which notice of assessment has not been given;

            (d)   undetermined or inchoate liens, charges and privileges
                  incidental to current construction or current operations and
                  statutory liens, charges, adverse claims, security interests
                  or encumbrances of any nature whatsoever claimed or held by
                  any governmental authority which have not at the time been
                  filed or registered against the title to the asset or served
                  upon the Company pursuant to law or which relate to
                  obligations not due or delinquent;

            (e)   assignments of insurance provided to landlords (or their
                  mortgagees) pursuant to the terms of any lease and liens or
                  rights reserved in any lease for rent or for compliance with
                  the terms of such lease;

                                       4
<PAGE>

            (f)   security given in the ordinary course of the Business to any
                  public utility, municipality or government or to any statutory
                  or public authority in connection with the operations of the
                  Business, other than security for borrowed money; and

            (g)   the Permitted Encumbrances described in Schedule T;

      (20)  "Person" means in the context of the applicable provisions
            hereunder, Stake, the Vendor and the Company and any other
            individual, corporation, partnership, unincorporated syndicate,
            unincorporated organization, trust, trustee, executor,
            administrator, or other legal representative, government or
            governmental agency, department or instrumentality, or any group or
            combination thereof;

      (21)  "Premises" means the premises located at 62, 66 and 70 Brant Street,
            Hamilton, Ontario owned by the Company at which it conducts the
            Business;

      (22)  "Purchase Price" means the sum of $4,700,000 to be paid by Stake for
            the Purchased Shares;

      (23)  "Purchased Shares" means 200 common shares of the Company to be
            purchased by Stake hereunder;

      (24)  "Shares" means 200 common shares of the Company;

      (25)  "Stake" means Stake Technology Ltd., a Party to this Agreement;

      (26)  "Taxes" means any and all income, profits, use, occupancy, transfer,
            franchise, withholding, payroll, employment, corporate, capital,
            stamp, business, realty, sales, fuel, excise or other taxes, duties,
            fees, surtaxes, assessments, levies, imposts or charges payable to
            or exigible by any governmental agency, authority or
            instrumentality, domestic or foreign;

      (27)  "this Agreement", "herein", "hereto", "hereby", "hereunder",
            "hereof" and similar expressions refer to this Agreement and not to
            any particular clause, subclause, section, subsection or paragraph
            or other portion hereof, and include amendments hereto, any
            agreement which is supplementary to or an amendment or confirmation
            of this Agreement and any schedules hereto or thereto;

      (28)  "Time of Closing" means 10:00 a.m. (Hamilton time) on the Closing
            Date or such other time as may be mutually acceptable to the
            Parties;

1.2 Gender and Number. Any reference in this Agreement to gender shall include
all genders and words used herein importing the singular number only shall
include the plural and vice versa.

                                       5
<PAGE>

1.3 Headings, Etc. The division of this Agreement into Articles, Sections,
Subsections and other subdivisions and the insertion of headings are for
convenience of reference only and shall not affect or be utilized in the
construction or interpretation hereof.

1.4 Currency. All references in this Agreement to dollars, unless otherwise
specifically indicated, are expressed in Canadian currency.

1.5 Governing Law. This Agreement shall be construed, interpreted and the rights
of the Parties determined in accordance with the laws, other than the conflicts
of laws rules, of the Province of Ontario and the laws of Canada applicable
therein and shall be treated in all respects as an Ontario contract.

1.6 Schedules. The following are the Schedules attached to and incorporated in
this Agreement by reference and deemed to be a part hereof:

            Schedules             Documentation

            A                     Company's Financial Statements
            B                     Intentionally Deleted
            C                     Inventory Valuation Practices
            D                     Non-Realty Encumbrances
            E                     Real Property and Realty Encumbrances
            F                     Real Property Leases
            G                     Personal Property Leases
            H                     Contracts
            I                     Best Knowledge
            J                     Intellectual Property
            K                     Customers and Suppliers
            L                     Bank Accounts and Loan Agreements
            M                     Intentionally Deleted
            N                     Legal Opinions
            O                     Taxes
            P                     Intentionally Deleted
            Q                     Intentionally Deleted
            R                     Pre-Closing Activities
            S                     Distributorship Agreement and Supply Agreement
            T                     Permitted Encumbrances
            U                     Intentionally Deleted
            V                     Environmental Reports

1.7 Calculation of Time. When calculating the period of time within which or
following which an act is to be done or steps taken pursuant to this Agreement,
the date which is the reference date

                                       6
<PAGE>

in calculating such period shall be excluded. If the last day of such period is
not a Business Day, the period in question shall end on the next Business Day.
If the day on which an act is to be done or steps taken pursuant to this
Agreement is not a Business Day, such day shall be deemed to be the next
Business Day.

2     PURCHASE AND SALE OF PURCHASED SHARES

2.1 Purchase and Sale of Purchased Shares. Subject to the terms and conditions
hereof, the Vendor covenants and agrees to sell, assign and transfer to Stake,
and Stake covenants and agrees to purchase from the Vendor, at the Time of
Closing, all of the Purchased Shares..

2.2 Purchase Price. The aggregate purchase price payable by Stake to the Vendor
for the Purchased Shares (the "Purchase Price") shall be $4,700,000, which shall
be payable by certified cheque or bank draft or wire transfer on Closing.

3     REPRESENTATIONS AND WARRANTIES OF U.S. SILICA

      The Vendor represents and warrants to Stake as at the date hereof and at
the Time of Closing as follows, and U.S. Silica represents and warrants to Stake
as to Section 3.3:

3.1 Intellectual Property. All patents, patents pending, trade names, trade
marks, copyrights or other intellectual property owned by, or applied for, the
Company are set out in Schedule J and, to the Best Knowledge of the Vendor, no
claim of any infringement or breach of or in respect of any such property, has
been made against the Company.

3.2 Due Incorporation and Subsistence of the Company. The Company is a
corporation duly incorporated and validly subsisting and in good standing under
the Business Corporations Act (Ontario). The Company has all necessary corporate
power and authority to own or lease its property and assets and to carry on the
Business as now being conducted by it and is duly qualified, licensed or
registered to carry on the Business as now being conducted and is in good
standing in all jurisdictions in which the nature of the businesses conducted by
it or the property owned or leased by it makes such qualification, licensing or
registration necessary, where the failure to be so qualified, licensed or
registered would have a Material Adverse Effect.

3.3 Authorized Capital of the Company. The authorized capital of the Company
consists of 1,000 Shares, without par value, of which 200 Shares have been
validly issued and are outstanding as fully paid and non-assessable. 800 Shares
are held in the Treasury. Except for Stake pursuant to this Agreement, no Person
has any agreement or option or any right or privilege (whether by law,
pre-emptive or contractual) capable of becoming an agreement or option,
including convertible securities, warrants or convertible obligations of any
nature for the purchase, subscription, allotment

                                       7
<PAGE>

or issuance of any of the Shares or securities convertible into unissued Shares
in the capital of the Company.

3.4 Validity of Agreement.

      (1)   the Vendor has the necessary right, power and authority to enter
            into, execute and deliver this Agreement and to perform its
            obligations hereunder and Stake may rely on the signature of the
            Vendor as evidence thereof.

      (2)   The entry into, execution and delivery of this Agreement and all
            other agreements and documents required to be delivered by the
            Vendor hereunder, the performance by the Vendor of its obligations
            hereunder and the consummation of the transactions contemplated
            hereby: (i) have been and will be duly authorized by all necessary
            action, corporate or otherwise, on the part of the Vendor and (ii)
            do not or will not conflict with or constitute a breach of or a
            default under or create any Encumbrance under (or would not with the
            passage of time or the giving of notice, or both, conflict with or
            constitute a breach of or a default under or create any Encumbrance
            under, other than a Permitted Encumbrance) any of the terms or
            provisions of the constating documents ("constating documents" being
            the charter documents and by-laws of the Company) or resolutions of
            the Company or of any Contractual or Other Right or Obligation to
            which the Company or any of the Assets are bound or of any laws or
            regulations applicable to the Company or any of the Assets, where
            such breach or default would have a Material Adverse Effect.

      (3)   Each of this Agreement and all other agreements and documents
            required to be delivered by the Vendor constitutes, or on delivery
            will constitute, a legal, valid and binding obligation of the
            Vendor, enforceable against it in accordance with its terms, subject
            however to limitations with respect to enforcement imposed by law in
            connection with bankruptcy, insolvency and creditors' rights
            generally and to general principles of equity, including the
            availability of equitable remedies such as specific performance and
            injunctive relief which are in the discretion of the court from
            which they are sought.

3.5 Consents. There are no material Consents or filings that should be obtained
or made by the Vendor or the Company in order to complete the transactions
contemplated by this Agreement.

3.6 Changes since Balance Sheet Date. Except as disclosed in Schedule R, since
the Balance Sheet Date:

      (1)   there has been no material adverse change in the financial position
            of the Company, nor has there been any material adverse change in
            the affairs, liabilities, Assets, operations or condition, financial
            or otherwise, of the Company arising as a result of revocation of
            any license or right to do business, fire, explosion, accident,
            casualty,

                                       8
<PAGE>

            labour trouble, flood, drought, riot, storm, condemnation, act of
            God, except changes occurring in the ordinary course of business
            which changes, in the aggregate, have not had, and will not have a
            Material Adverse Effect;

      (2)   the Company has not entered into, agreed to enter into or authorized
            any material agreement, commitment or transaction other than in the
            ordinary course of business;

      (3)   the Company has not created, assumed or incurred, any Debt or
            Contingent Liability other than in the ordinary course of business;

      (4)   the Company has not, directly or indirectly, declared or paid any
            dividends or declared or made any other distribution on any of its
            Shares and has not, directly or indirectly, redeemed, purchased or
            otherwise acquired any of its Shares or agreed to do so;

      (5)   the Business has been carried on in the ordinary course; and

      (6)   no payments have been made or authorized by the Company and no
            benefits have been conferred or authorized to be conferred upon and
            no transactions have been entered into with or have otherwise
            involved any of the Company's current or former officers, directors,
            the Vendor or employees or any Person not dealing at "arm's length"
            with the Company or any of the foregoing or any Person who would be
            considered a "related party" of the Company under Generally Accepted
            Accounting Principles, except, in the case of employment-related
            items, in the ordinary course of business and at the regular rates
            payable to them as salary, pension, bonuses or other remuneration or
            reimbursement of any nature.

3.7 Litigation. There is no action, suit, proceeding, at law or in equity, claim
or demand by any Person or entity, or to the Best Knowledge of the Vendor any
investigation, arbitration or any administrative or other proceeding by or
before (or any investigation by) any governmental or other instrumentality or
agency, pending, or threatened against or affecting the Shares and the Vendor
does not know of any valid basis therefor. Neither of the Vendor nor the Company
is subject to any judgment, order or decree entered in any law suit or
proceeding which would, or with the elapse of time could, in any way affect the
title of the Vendor to the Shares or completion of the transaction contemplated
by this Agreement.

3.8 Company's Financial Statements. The Company's Financial Statements have been
prepared in accordance with Generally Accepted Accounting Principles (except for
the absence of notes) and present fairly in all material respects on a
consistent basis:

      (1)   the assets and liabilities (whether accrued, absolute, contingent or
            otherwise) of and all known claims against the Company as of the
            date of the statement;

                                       9
<PAGE>

      (2)   the financial position and condition of the Company as at the date
            of the statement; and

      (3)   the sales, earnings and results of operations of the Company for the
            periods ended at the date of the statements.

3.9 Inventories. To the Vendor's Best Knowledge, the inventories, raw materials,
in-process and finished products of the Company are currently in good condition,
are not obsolete, are useable or saleable in the ordinary course of business
consistent with past practice, and the amount and mix of items in the
inventories of supplies, in-process and finished products is consistent with the
Company's past business practices and are valued in accordance with Schedule C.8

3.10 Accounts Receivable. All accounts receivable, book debts and other debts
due to or accruing to the Company are bona fide.

3.11 Books and Records. All accounts, books, ledgers and other financial and
accounting records of the Company have been fully, properly and accurately kept
and completed and are in all material respects up-to-date. The Company has not
had any of its records, systems, controls, data or information recorded, stored,
maintained, operated or otherwise wholly or partly dependent upon or held by any
means (including any electronic, mechanical or photographic process, whether
computerized or not) which (including all means of access thereto and therefrom)
are not under the exclusive ownership and direct control of the Company, as the
case may be. The Company has taken reasonable steps to ensure that it has
recognized and dealt with all potential Year 2000 problems.

3.12 Assets.

      (1)   The Company has beneficial ownership or a valid leasehold interest
            in:

            (a)   all the Assets (real and personal, tangible and intangible,
                  including leasehold interests), including, without limitation,
                  all the properties and assets reflected in the balance sheets
                  forming part of the Company's Financial Statements, except as
                  indicated in the notes thereto, and

            (b)   all the Assets purchased by the Company since the Balance
                  Sheet Date,

            in each case subject to no Encumbrance of any kind or character
            except for:

            (a)   the Encumbrances described in Schedules D, E and L hereto,

            (b)   Permitted Encumbrances; or

            (c)   Assets disposed of in the ordinary course of Business.

                                       10
<PAGE>

Except for working capital, the Assets are adequate and sufficient for the
conduct of the Business substantially in the manner presently carried on by the
Company.

3.13 Leases. The Company is not a party to any lease, agreement to lease or
agreement in the nature of a lease, whether as lessor or lessee, except as set
forth in Schedules F and G hereto. The Company is exclusively entitled to all
rights and benefits as lessee under the leases and has not sublet, assigned,
licensed or otherwise conveyed any rights in the leases to any other Person,
except as noted in Schedules F and G hereto. The names of the other parties to
the leases, the term, rent and other amounts payable under the leases and all
renewal options available under the leases are accurately described in Schedules
F and G.

3.14 Contracts. Other than the leases of real and personal property set forth in
Schedules F, G, and contracts set forth in Schedule H or in the Company's
Financial Statements, there are no material contracts, agreements, engagements
or commitments to which the Company is a party or by which it is bound which
cannot be terminated on 30 days notice.

3.15 No Breach of Contracts. Each contract or agreement set forth in Schedules
F, G and H is in full force and effect and unamended, the Company is entitled to
all rights and benefits thereunder and there exists no material default or event
of default or event, occurrence, condition or act which, with the giving of
notice, the lapse of time or the happening of any other event or condition,
would become a material default or event of default thereunder and the terms and
conditions of such contracts and agreements will not be affected by the
completion of the transactions contemplated hereunder which default or event of
default would have a Material Adverse Effect. For the purposes of this Section
3.15, the term "material" shall include, without limitation, any event of
default or event, occurrence, condition or act which, with the giving of notice,
the lapse of time, or the happening of any further event or condition, would
entitle the other party to such contract or agreement to terminate same or
accelerate any payments due thereunder.

3.16 Restrictive Documents. Other than its loan arrangements with Banque
Nationale de Paris, which will be discharged on or before closing, as provided
in Schedule R, the Company is not subject to, or a party to, any charter or
by-law restriction, Encumbrance, Contractual or Other Right or Obligation, law,
rule, ordinance, regulation, or any other restriction of any kind or character
which would prevent the consummation of the transactions contemplated by this
Agreement, compliance by the Company with the terms, conditions and provisions
hereof .

3.17 Taxes. The Company has duly filed within the times it has filed such
returns in the past without objection from applicable taxing authorities and
within the manner prescribed by law, all federal, provincial, local and foreign
tax returns and tax reports which are required to be filed by or with respect to
the Company. The information contained in such returns and reports is true and
correct in all material respects and reflects accurately, in all material
respects, all liability for Taxes of the Company for the periods covered
thereby. All Taxes, assessments and reassessments (including charges, interest,
dues, fines, and penalties) payable by, or due from, the Company on or before
the date hereof have been fully paid or adequately disclosed and fully provided
for in the

                                       11
<PAGE>

books and financial statements of the Company as the case may be. No examination
by Revenue Canada of any tax return of the Company is currently in progress,
there are no outstanding agreements or waivers extending the statutory period
providing for an extension of time with respect to the assessment or
re-assessment of any Taxes or the filing of any tax return by, or any payment of
any Taxes by, or levying of any governmental charge against, the Company, and
there are no actions, audits, assessments, re-assessments, suits, proceedings,
investigations or claims now pending or threatened, against the Company in
respect of Taxes or governmental charges or any matters under discussion with
any governmental authority relating to Taxes or governmental charges asserted by
any such authority, except as set forth in Schedule O. The Company has withheld
from each payment made by it the amount of all Taxes and other deductions
required to be withheld therefrom and has paid the same to the proper taxing or
other authority within the time prescribed under any applicable legislation or
regulation except as set out in Schedule O. For the avoidance of doubt, this
representation does not extend to any tax return filed by Stake under Section
8.4.

3.18 Employment Relations.

      (1)   The Company is in all material respects in compliance with all
            federal, provincial, or other applicable laws respecting employment
            and employment practices, terms and conditions of employment and
            wages and hours.

      (2)   No unfair labour practice, complaint or grievance against the
            Company is pending or threatened in writing before any labour
            relations board or similar government tribunal or agency.

      (3)   There is no labour strike, dispute, slowdown or stoppage actually
            pending or threatened against or involving the Company.

      (4)   No grievance which would have a Material Adverse Effect exists, no
            arbitration proceeding arising out of or under any collective
            agreement is pending and no claim therefore has been asserted which
            would have a Material Adverse Effect.

      (5)   The Company has not made nor is it negotiating any collective
            agreements with any labour union or employee association involving
            its employees, except for the Collective Agreement with the United
            Steelworkers of America, Local 16506 effective February 14, 1999.

      (6)   No employee, except John V. Anderson, of the Company has any
            agreement as to length of notice required to terminate his or her
            employment, other than such as results by law from the employment of
            an employee without agreement as to such notice or as to length of
            employment.

3.19 No Loans to Officers or Directors. The Company does not have any loan or
Debt outstanding (other than the normal salaries, bonuses, year-end
distribution, fringe benefits and obligations to

                                       12
<PAGE>

reimburse for expenses incurred on behalf of the Company, as the case may be, in
the normal course of employment) which has been made to any director, officer,
shareholder, or employee, to any former director, officer, shareholder, or
employee of the Company or to any Person not dealing at "arm's length" with any
of the foregoing other than described in Schedules A or H hereto.

3.20 Customers and Suppliers. Annexed hereto as Schedule K is a list setting
forth the ten largest customers and suppliers of the Company, by dollar amount,
over the twelve month fiscal period ended December 31, 1999.

3.21 Vacation Pay. All required vacation pay, bonuses, commissions and other
employee benefit payments are reflected and have been accrued in the books of
account of the Company as at the Balance Sheet Date.

3.22 Copies of Documents. The Company has offered to deliver to Stake or caused
to be made available for inspection and copying by Stake and its counsel, true,
complete and correct copies of all contracts, leases and documents listed in all
Schedules hereto and all other documents referred to herein.

3.23 Subsidiaries. The Company does not have any subsidiaries nor are there any
agreements of any nature to acquire any subsidiary or to acquire or lease any
other business operations.

3.24 Bank Accounts. The only banks, trust companies or similar institutions in
which the Company has accounts or safe deposit boxes are listed in Schedule L.

3.25 Powers of Attorney. There are no Persons holding a general or special power
of attorney from the Company.

3.26 Compliance with Laws; Licences. Except to the extent such matters have been
specifically addressed in other representations and warranties contained herein,
the Company has complied with all laws, statutes, ordinances, regulations,
rules, judgments, decrees or orders applicable to the Business or the Company
where the failure to do so would have a Material Adverse Effect. The Company
holds all material licences, permits, approvals, consents, certificates,
registrations and authorizations (whether governmental, regulatory or otherwise)
(the "Licences") necessary to carry on the Business or to own or lease any of
the property or assets utilized by the Company. The Company is not in default or
breach of any Licence and, to the knowledge of the Vendor, no proceeding is
pending or threatened to revoke or limit any Licence, the revocation of which
would have a Material Adverse Effect.

3.27 Debts. There are no material Debts of any kind whatsoever in respect of
which the Company is liable at the date hereof or may become liable on or after
the consummation of the transactions contemplated by this Agreement other than:

                                       13
<PAGE>

      (1)   Debts disclosed on, reflected in or provided for in the Company's
            Financial Statements,

      (2)   Debts disclosed or referred to in this Agreement or in Schedules A,
            D and E or in the other Schedules attached hereto, and

      (3)   Debts incurred in the ordinary course of business and attributable
            to the period since the Balance Sheet Date.

3.28 Environmental Matters.

      (1)   To the Best Knowledge of the Vendor, except as set forth in the
            environmental reports listed in Schedule V:

            (i)   the Company is in full compliance with all applicable laws,
                  regulations and orders relating to the environment, storage
                  and transportation of goods and product safety;

            (ii)  the Company has complied with all reporting and inspection
                  requirements of all governmental authorities having
                  jurisdiction over the Company under all applicable laws,
                  regulations and orders relating to the environment; and

            (iii) the Company maintains all operating records and reports,
                  including environmental monitoring and reporting records, in
                  accordance with all applicable laws, regulations and orders
                  relating to the environment, storage and transportation of
                  goods and employee and product safety,

            where non-compliance or the failure to maintain such records, as the
            case may be, would have a Material Adverse Effect;

      (2)   To the Best Knowledge of the Vendor, except as set forth in the
            environmental reports listed in Schedule V:

            (i)   since July 23, 1998, there has not been release of any
                  hazardous substance into the environment from or deposit or
                  disposal of any hazardous substance on the Premises or any
                  other property owned or leased by the Company;

            (ii)  since July 23, 1998, there has not been any underground or
                  surface storage tanks, urea formaldehyde foam insulation
                  asbestos, polychlorinated biphenyls or radioactive substances
                  on the Premises;

            (iii) there are no restrictions of an environmental nature
                  specifically identifying

                                       14
<PAGE>

                  the Premises and limiting their use, whether arising under
                  private contract, public law or legislation of any nature or
                  kind; and

            (iv)  there is no hazardous substance originating from the Premises
                  and transported to or deposited at any unlicensed waste
                  disposal site or facility;

            which would have a Material Adverse Effect.

      (3)   For the purposes of this section, "hazardous substance" means any
            hazardous waste, dangerous substance or toxic waste or substance.

3.29 Title to Purchased Shares. The Vendor is the registered and beneficial
owner of the Purchased Shares and has a valid title to the Purchased Shares,
free and clear of any and all Encumbrances of any kind whatsoever other than
Permitted Encumbrances. No Person, other than the Vendor, has any interest,
direct or indirect, beneficial or otherwise, in the Purchased Shares.

      The foregoing representations and warranties (including, without
limitation, sections 3.26 and 3.27 shall not apply to, or be construed as
relating to, any compliance or non-compliance of the Company, the Business or
any properties or operations of the Company, or any violation of or Debts or
other liabilities under, any Environmental Law or the holding by the Company of
any licenses, permits, approvals, consents, certificates, registrations or other
authorizations under any Environmental Laws, it being understood and agreed that
the Purchaser is assuming all risks associated with matters relating to
Environmental Laws.

4     REPRESENTATIONS AND WARRANTIES OF STAKE

      Stake represents and warrants to the Vendor as of the date hereof and at
the Time of Closing as follows:

4.1 Due Incorporation and Subsistence. Stake is a corporation duly incorporated
and validly subsisting and in good standing under the laws of Canada.

4.2 Consents. There are no Consents or filings that should be obtained or made
by Stake in order to complete the transactions contemplated by this Agreement.

4.3 Authority. This Agreement has been duly executed and delivered by duly
authorized representatives of Stake.

4.4 Validity of Agreement.

                                       15
<PAGE>

      (1)   Stake has the necessary right, power and authority to enter into,
            execute and deliver this Agreement and to perform its obligations
            hereunder and the Vendor may rely on the signature of Stake as
            evidence thereof.

      (2)   The entry into, execution and delivery of this Agreement and all
            other agreements and documents required to be delivered by Stake
            hereunder, the performance by Stake of its obligations hereunder and
            the consummation of the transactions contemplated hereby: (i) have
            been and will be duly authorized by all necessary action, corporate
            or otherwise, on the part of Stake and (ii) do not or will not
            conflict with or constitute a breach of or a default under or create
            any Encumbrance under (or would not with the passage of time or the
            giving of notice, or both, conflict with or constitute a breach of
            or a default under or create any Encumbrance under, other than a
            Permitted Encumbrance) any of the terms or provisions of the
            constating documents ("constating documents" being the charter
            documents and by-laws of Stake) by-laws or resolutions of Stake to
            which Stake is bound or of any laws or regulations applicable to
            Stake. Any such breach or default would have a Material Adverse
            Effect.

      (3)   Each of this Agreement and all other agreements and documents
            required to be delivered by Stake constitutes, or on delivery will
            constitute, a legal, valid and binding obligation of Stake,
            enforceable against it in accordance with its terms, subject however
            to limitations with respect to enforcement imposed by law in
            connection with bankruptcy, insolvency and creditors' rights
            generally and to general principles of equity, including the
            availability of equitable remedies such as specific performance and
            injunctive relief which are in the discretion of the court from
            which they are sought.

5     CONDITIONS PRECEDENT

5.1 Conditions Precedent to Closing. The obligation of the Vendor or Stake to
complete the sale and purchase of the Purchased Shares hereunder shall be
subject to the satisfaction of, or compliance with, at or before the Time of
Closing, each of the following conditions precedent each of which is separate,
is provided for the exclusive benefit of Stake or the Vendor, as the case may
be, and may be waived by the Party for whose benefit the same is given.

      (1)   all corporate, legal and regulatory proceedings, approvals and
            consents as are reasonably considered necessary by the Vendor's or
            Stake's counsel as the case may be shall have been taken or obtained
            to permit the consummation of the transactions contemplated herein,
            including the acquisition of the Purchased Shares by Stake without
            adversely affecting, or resulting in the cancellation or termination
            or adverse variation thereof of any license, permit or material
            contract held by the Company;

                                       16
<PAGE>

      (2)   the Parties shall have fulfilled and/or complied with all terms,
            conditions, covenants and agreements herein contained to be
            performed or caused to be performed by them;

      (3)   all documentation relating to the due authorization (including,
            without limitation, the due authorization by and completion of the
            sale and purchase hereunder) of the Purchased Shares and all actions
            and proceedings taken on or prior to the Time of Closing in
            connection with the performance by the Parties of their obligations
            under this Agreement shall be satisfactory to each of the Parties
            and their respective counsel, both acting reasonably, and each of
            the Vendor and Stake shall have received copies of all such
            documentation or other evidence as they or it may reasonably request
            in order to establish the consummation of the transactions
            contemplated hereby and the taking of all corporate proceedings in
            connection therewith in compliance with these conditions, in form
            (as to certification and otherwise) and substance satisfactory to
            each of the Vendor and Stake, acting reasonably, and their counsel;

      (4)   the Vendor and Stake shall have received opinions dated the Closing
            Date, in form and substance as set forth in Schedule N attached;

      (5)   there shall have been no material adverse change in the business,
            affairs and conditions of the Company, whether financial or
            otherwise since the date of the Company's Financial Statements
            except as set out in Schedules Q and R;

      (6)   all Consents (including all required regulatory consents), licences,
            permits and certificates of any Persons and all filings and
            notifications to any Persons required in connection with the
            completion of the transactions contemplated by this Agreement, the
            execution and delivery of this Agreement, the Closing or the
            performance of any of the terms and conditions hereof shall have
            been obtained on or before the Time of Closing;

      (7)   the written consent (in form and substance satisfactory to counsel)
            of any lessor or landlord pursuant to all leases shall have been
            delivered insofar as such consent is required due to the change in
            shareholdings of the Company together with an estoppel certificate
            of each such lessor, landlord or other party to the effect that the
            respective lease agreement is in good standing, that all obligations
            of the Company thereunder have been performed to the Time of Closing
            and that the Company is not in default thereunder at the Time of
            Closing;

      (8)   the Vendor shall have executed and delivered such conveyances,
            assurances, assignments, transfers and other instruments of
            conveyance necessary or reasonably required effectively to transfer
            the Purchased Shares to Stake with a good marketable title free and
            clear of all Encumbrances of any kind whatsoever.

                                       17
<PAGE>

5.2 Additional Condition Precedent to Closing in Favour of the Vendor. The
obligation of the Vendor to complete the purchase and sale of the Purchased
Shares hereunder shall be subject to the satisfaction of or compliance with, at
or before the time of Closing, the following condition precedent, which is
provided for the exclusive benefit of the Vendor and may be waived by the
Vendor:

      (1)   Stake and the Company shall have executed and delivered a
            distributorship agreement ("Distributorship Agreement") and supply
            agreement ("Supply Agreement") substantially in the form of the
            draft distributorship agreement and draft supply agreement annexed
            as Schedule S to this Agreement.

5.3 Conditions to the Obligations of All Parties. The obligations of all Parties
to complete the transactions contemplated herein shall be subject to the
satisfaction of, or compliance with, at or before the Time of Closing each of
the following, each of which is a true condition precedent and may not be
waived:

      (1)   no action or proceeding, at law or in equity, and no investigation
            shall be pending or threatened by any Person to restrain, restrict
            or prohibit or materially adversely affect the consummation of any
            of the transactions contemplated hereby, or the right of Stake or
            the Company to carry on the Business in the same manner as it has
            been carried on in the past.

6     SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
      INDEMNIFICATION

6.1 Survival. All covenants, representations and warranties made herein or in
any agreement, certificate or other document delivered or given pursuant to this
Agreement (other than those which are expressly waived in writing as part of the
Closing herein) shall survive the execution and delivery of this Agreement and
the completion of the transactions contemplated by this Agreement and,
notwithstanding such completion or any investigation made by or on behalf of the
Party to whom or in whose favour such covenants, representations and warranties
were made, shall continue in full force and effect for the respective benefit of
Stake and the Vendor, as the case may be, for a period ending February 28, 2001,
excepting those representations and warranties given by the Vendor in Sections
3.4(1) and 3.4(3) and those given by Stake in Sections 4.4(1)and 4.4(3)which
never expire, after which period the respective Parties shall be released from
their respective obligations and liabilities hereunder, except in respect of
claims made in writing prior to expiry of such period.

6.2 Indemnification. Subject to the Limitation of Losses as discussed below,
each of the Parties agrees to indemnify and save the other Party and its
representatives, successors and assigns harmless of and from any liability,
obligation, cost, expenses, damage or loss whatsoever arising out of, under, or
pursuant to:

                                       18
<PAGE>

      (1)   any incorrectness in, or breach of, or default under, any
            representation or warranty or covenant made by such Party hereunder
            or in any certificate or other document delivered pursuant hereto;

      (2)   all claims, demands, suits, causes of action, proceedings,
            judgments, costs and expenses or other liabilities of any kind
            whatsoever in respect of the foregoing, including reasonable legal
            fees and disbursements in connection with the foregoing; and

      (3)   the non-fulfillment of any condition contained herein for which it
            is solely responsible (excluding therefrom the conditions precedent
            contained in Section 5 except to the extent such condition(s) are
            not met by reason of its default).

Stake will maintain in force the Company's present errors and omissions coverage
for officers and directors.

6.3 Limitation of Losses. No claim for indemnity under this Article 6 may be
made for loss of profits or consequential losses or damages, or exemplary or
punitive damages, it being the intention of the Parties to limit such claims to
direct liabilities, obligations, costs, expenses, damages or losses suffered as
a result of any breach, default or non-fulfillment contemplated by Articles 3
and 4.

6.4 Limitation of Indemnities. The obligations of the Vendor or U.S. Silica to
Stake pursuant to this Article 6, shall not apply until the claims and damages
of Stake (excluding any amount to be paid by U.S. Silica to Stake under the
agreement between U.S. Silica and Stake dated the date hereof relating to the
option granted to Joseph Ogden in respect of Part Lot 219, Plan 32, Part Reserve
No. 2, City of Hamilton, Regional Municipality of Hamilton-Wentworth) sought to
be indemnified exceed, in the aggregate, One Hundred Thousand ($100,000)
Dollars, and in such event, such obligations shall apply only to the extent of
the amounts over and above One Hundred Thousand ($100,000) Dollars, up to an
aggregate maximum of $1,000,000. The obligations of Stake to the Vendor pursuant
to this Article 6, shall not apply until the claims and damages of the Vendor
sought to be indemnified exceed, in the aggregate, One Hundred Thousand
($100,000) Dollars, and in such event, such obligations shall apply only to the
extent of the amounts over and above One Hundred Thousand ($100,000) Dollars.
Notwithstanding anything in this Agreement to the contrary: (i) the Indemnified
Party (as hereinafter defined) shall act in good faith and in a commercially
reasonable manner to mitigate any damages it may suffer and (ii) the Vendor
shall not be liable to Stake for any claims or damages (A) to the extent that
they relate to any act or omission of Stake or any of its affiliates or the
agents of any of them or (B) arising from any incorrectness in, breach of or
default under any representation or warranty referred to in section 6.2(1) and
to the extent that the primary cause of such incorrectness, breach or default
was a fact or circumstance known to Stake at or prior to the Time of Closing.

6.5 Notice of Claim.

                                       19
<PAGE>

      (1)   In the event that a party (the "Indemnified Party") shall become
            aware of any claim, proceeding or other matter (a "Claim") in
            respect of which it in good faith believes another party (the
            "Indemnifying Party") has agreed to indemnify the Indemnified Party
            pursuant to this Agreement, the Indemnified Party shall promptly
            give written notice thereof to the Indemnifying Party. Such notice
            shall specify whether the Claim arises as a result of a claim by a
            Person against the Indemnified Party (a "Third Party Claim") or
            whether the Claim does not so arise (a "Direct Claim"), and shall
            also specify with reasonable particularity (to the extent that the
            information is available) the factual basis for the Claim and the
            amount of the Claim, if known.

      (2)   If, through the fault of the Indemnified Party, the Indemnifying
            Party does not receive notice of any Claim in time to contest
            effectively the determination of any liability susceptible of being
            contested, the Indemnifying Party shall be entitled to set off
            against the amount claimed by the Indemnified Party the amount of
            any losses or damage incurred by the Indemnifying Party resulting
            from the Indemnified Party's failure to give such notice on a timely
            basis.

6.6 Direct Claims. With respect to any Direct Claim, following receipt of notice
from the Indemnified Party of the Claim, the Indemnifying Party shall have 60
days to make such investigation of the Claim as is considered necessary or
desirable. For the purpose of such investigation, the Indemnified Party shall
make available to the Indemnifying Party the information relied upon by the
Indemnified Party to substantiate the Claim, together with all such other
information as the Indemnifying Party may reasonably request. If both parties
agree at or prior to the expiration of such 60-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such Claim, the
Indemnifying Party shall immediately pay to the Indemnified Party the full
agreed upon amount of the Claim, failing which the matter shall be referred to
binding arbitration in such manner as the parties may agree or shall be
determined by a court of competent jurisdiction.

6.7 Third Party Claims. With respect to any Third Party Claim, the Indemnifying
Party shall have the right, at its expense, to participate in or assume control
of the negotiation, settlement or defence of the Claim. If the Indemnifying
Party elects to assume such control, the Indemnified Party shall have the right
to participate in the negotiation, settlement or defence of such Third Party
Claim and to retain counsel to act on its behalf, provided that the fees and
disbursements of such counsel shall be paid by the Indemnified Party unless the
named parties to any action or proceeding include both the Indemnifying Party
and the Indemnified Party and the representation of both the Indemnifying Party
and the Indemnified Party by the same counsel would be inappropriate due to a
conflict of interest not waived by the affected party. If the Indemnifying
Party, having elected to assume such control, thereafter fails to defend the
Third Party Claim within a reasonable time, the Indemnified Party shall be
entitled to assume such control, and the Indemnifying Party shall be bound by
the results obtained by the Indemnified Party with respect to such Third Party
Claim.

6.8 Settlement of Third Party Claims. If the Indemnifying Party fails to assume
control of the

                                       20
<PAGE>

defence of any Third Party Claim, the Indemnified Party shall have the exclusive
right to contest, settle or pay the amount claimed. Whether or not the
Indemnifying Party assumes control of the negotiation, settlement or defence of
any Third Party Claim, the Indemnifying Party shall not settle any Third Party
Claim (other than one involving only the payment of monies) without the written
consent of the Indemnified Party, which consent shall not be unreasonably
withheld or delayed; provided, however, that the liability of the Indemnifying
Party shall be limited to the proposed settlement amount if any such consent is
not obtained for any reason.

6.9 Co-operation. The Indemnified Party and the Indemnifying Party shall
co-operate fully with each other with respect to Third Party Claims, and shall
keep each other fully advised with respect thereto (including supplying copies
of all relevant documentation promptly as it becomes available).

6.10 Exclusivity. The provisions of this Article 6 shall apply to any Claim for
breach of covenant, representation, warranty or other provision of this
Agreement or any agreement, certificate or other document delivered pursuant
hereto (other than a claim for specific performance or injunctive relief) with
the intent that all such claims shall be subject to the limitations and other
provisions contained in this Article 6.

7     CLOSING ARRANGEMENTS AND TERMINATION

7.1 Closing. The Closing of the sale and purchase contemplated by this Agreement
shall take place at the Time of Closing on the Closing Date at Hamilton, Ontario
or at such other place and/or time as the Parties may mutually agree upon and in
such manner as the Parties may agree at such time. The Closing shall be deemed
effective as of the end of the Closing Date.

7.2 Closing Delivery. At the Time of Closing, the Vendor shall deliver or cause
to be delivered to Stake:

      (1)   share certificates representing the Purchased Shares duly endorsed
            in blank for transfer;

      (2)   the legal opinion referred to in subsection 5.1(4);

      (3)   evidence satisfactory to Stake that the Company has entered into a
            binding agreement with John V. Anderson that he will retire from the
            Company forthwith after Closing and deliver a full release of all
            claims against it;

      (4)   evidence satisfactory to Stake that it has repaid or arranged to
            repay all monies owing to the Company by it and all monies owed by
            the Company to Banque National de Paris as provided in Schedule R;

                                       21
<PAGE>

and upon the fulfillment of the foregoing provisions of this Section 7.2, Stake
shall deliver to the Vendor:

      (5)   its certified cheque or bank draft or wire transfer aggregating
            $4,700,000 to the Vendor or as directed;

      (6)   the legal opinion referred to in subsection 5.1(4); and

      (7)   executed copies of the Distributorship Agreement and Supply
            Agreement.

7.3 Following Closing. Immediately following the Closing, the Parties shall take
the following steps:

      (1)   all directors of the Company shall deliver resignations as directors
            seriatim and elect nominees of Stake to fill the vacancies thereby
            created and all directors and officers shall deliver releases of all
            claims against the Company (other than claims against the errors and
            omissions policy referred to in Section 6.2) and the Company shall
            deliver to such directors and officers a complete release of all
            claims against them.

8     MISCELLANEOUS

8.1 Publicity. Except as is required by law or by any stock exchange, none of
the Parties shall issue any press release or make any other public statement or
announcement relating to or connected with or arising out of this Agreement or
the matters contained herein without obtaining the prior written approval of the
Vendor, or Stake, as the case may be, which approval shall not be unreasonably
withheld. The provision of this section 8.1 expire on Closing.

8.2 Pre-Closing Activities. It is agreed that, notwithstanding any other
provision hereof, the Vendor and the Company may effect the steps set forth in
Schedule R hereto.

8.3 Use of Name. Stake covenants and agrees to cause the Company to change its
corporate name to a name that does not contain the words "George F. Pettinos"
within 30 Business Days after Closing. Stake further covenants and agrees to
cause the Company to cease to carry on business under, or otherwise use in the
Business, the name "George F. Pettinos" provided that the Company may,
subsequent to Closing, distribute in the ordinary course of business any
letterhead, invoices, brochures or other similar written materials in existence
at Closing bearing such name until they have been used up or it has obtained
replacements therefor which do not bear such name but in any event no longer
than 45 days after Closing. Stake may also continue to use "George F. Pettinos"
name on existing products for a period of up to 90 Business Days after Closing
and on all packaged products forming the inventory of the Company at Closing
until the supply of the same has become exhausted.

                                       22
<PAGE>

      Stake may continue to market all products under the name "Pecal" and the
Vendor and U.S. Silica agrees that it will not, individually or collectively,
market any products in Canada following Closing under the name "Pecal".

8.4 Tax Periods Ending on or Before the Closing Date. Stake shall prepare or
cause to be prepared and file or cause to be filed all Tax Returns for the
Company for all periods ending on or prior to the Closing Date which are filed
after the Closing Date. Stake shall permit the Vendor to review and comment on
each such Tax Return described in the preceding sentence prior to filing.

8.5 Further Assurances. To the extent reasonably practicable in the
circumstances or permitted by law each of the Parties upon the request of the
other shall do, execute, acknowledge and deliver or cause to be done, executed,
acknowledged or delivered all such further acts, deeds, documents, assignments,
transfers, conveyances, and assurances as may be reasonably necessary or
desirable to effect complete consummation of the transactions contemplated by
this Agreement.

8.6 Time. Time shall be of the essence hereof.

8.7 Successors in Interest. This Agreement and the provisions hereof shall enure
to the benefit of and be binding upon the Parties and their respective
successors and permitted assigns.

8.8 Notices. Any notice, document or other communication required or permitted
by this Agreement to be given by a party hereto shall be in writing and is
sufficiently given if delivered personally, or if transmitted by any form of
telecommunication (which is tested prior to transmission, confirms to the sender
the receipt of the entire transmission by the recipient and reproduces a
complete written version of the transmission at the point of reception) to such
party addressed as follows:

      (1)   in the case of the Vendor or the Company to them at:

            George F. Pettinos, Inc.
            P.O. BOX 187
            Berkeley Spring, West Virginia  2541
            U.S.A.

            with a copy to:
            Telecopy:   (304)258-3500

      (2)   in the case of Stake to it at:

            2838 Highway 7
            Norval, Ontario
            L0P 1K0

                                       23
<PAGE>

            Attention:    Jeremy N. Kendall
            Telecopy:     (905) 455-2529

            with a copy to:

            Lafleur Brown
            150 York Street
            14th Floor
            Toronto, Ontario
            M5H 3S5

            Attention:    M. Armstrong
            Telecopy:     (416) 362-5818

Notice transmitted by a form of recorded telecommunication or delivered
personally shall be deemed received on the day of transmission or personal
delivery, as the case may be or if not received or delivered on a Business Day,
on the next succeeding Business Day. Any party may from time to time notify the
others in the manner provided herein of any change of address which thereafter,
until changed by like notice, shall be the address of such party for all
purposes hereof.

8.9 Expenses. Except as otherwise expressly provided hereby, all costs and
expenses (including without limitation, the fees and disbursements of legal
counsel, investment advisers and auditors) incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the Party
incurring such expenses.

8.10 Broker's or Finder's Fees. Each of the Parties hereto covenants and agrees
with the other that it will pay and satisfy any commission or broker's or
finder's fee of any agent, broker, person or firm acting solely on its behalf in
connection with any of the transactions contemplated herein and agrees to
indemnify and save the other Parties harmless from and against any and all
costs, claims and expenses in connection therewith. Each of the Parties
represents and warrants to the other that it has not done, and is not aware of,
any act which might give rise to a claim for any finder's or brokerage fee in
connection with this Agreement or any of the transactions contemplated herein.

8.11 Assignment. This Agreement may not be assigned by any Party except by Stake
to a Designated Affiliate without the prior written consent of others.
Notwithstanding any such assignment, Stake shall remain responsible for all its
obligations hereunder.

8.12 Execution in Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts or duplicates each of which when so executed and
delivered shall be an original, but all such counterparts or duplicates shall
together constitute one and the same instrument.

8.13 Entire Agreement. This Agreement (including the Schedules hereto) together
with any agreements or other documents to be delivered pursuant hereto sets
forth the entire agreement among

                                       24
<PAGE>

the Parties pertaining to the specific subject matter hereof and replaces and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the Parties, and there are no warranties,
representations or other agreements, whether oral or written, express or
implied, statutory or otherwise, between the Parties in connection with the
subject matter hereof except as specifically set forth herein.

8.14 Amendments. No supplement, modification, waiver or termination of this
Agreement shall be binding unless executed in writing by the Party to be bound
thereby.

8.15 Waiver. No delay or failure of any party in exercising any right or remedy
hereunder and no partial exercise of any such right or remedy shall be deemed to
constitute a waiver of such right or remedy or any other rights or remedies of
such party hereunder. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provisions (whether or not
similar) nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided. Any consent by a party to or any waiver by a Party of any
breach of any provision of this Agreement shall not constitute a consent to or
waiver of any subsequent, further or other breach of the provisions of this
Agreement.

8.16 Severability. Each of the provisions of this Agreement (and each part of
each such provision) is severable from every other provision hereof (and every
other part thereof). In the event that any provision (or part thereof) contained
in this Agreement or the application thereof to any circumstance shall be
invalid, illegal or unenforceable, in whole or in part, in any relevant
jurisdiction and to any extent:

      (1)   the validity, legality or enforceability of such provision (or such
            part thereof) in any other relevant jurisdiction and of the
            remaining provisions contained in this Agreement (or the remaining
            parts of such provision, as the case may be) shall not in any way be
            affected or impaired thereby;

      (2)   the application of such provision (or such part thereof) to
            circumstances other than those as to which it is held invalid,
            illegal or unenforceable shall not in any way be affected or
            impaired thereby;

      (3)   such provision (or such part thereof) shall be severed from this
            Agreement and ineffective to the extent of such invalidity,
            illegality or unenforceability in such jurisdiction and in such
            circumstances; and

      (4)   the remaining provisions of this Agreement (or the remaining parts
            of such provision, as the case may be) shall nevertheless remain in
            full force and effect.

8.17 Consent to Transfer. The Company joins in this Agreement for the purpose of
providing its covenant to provide the required consent to the transfer of the
Shares contemplated hereby.

                                       25
<PAGE>

8.18 Third Party Beneficiaries. Each Party intends that this Agreement or any
agreement entered into pursuant to this Agreement shall not benefit or create
any right or cause of action in or on behalf of any Person, other than the
Parties, and no Person, other than the Parties, shall be entitled to rely on the
provisions hereof or any agreement entered into pursuant hereto in any action,
proceeding, hearing, or other forum.

            IN WITNESS WHEREOF the Parties have executed this Agreement as of
the date first above written.

SIGNED, SEALED & DELIVERED          )
                                    )
      in the presence of            )
                                    )     STAKE TECHNOLOGY LTD.
                                    )
                                    )
                                    )     Per: /s/ J.N. Kendall
                                    )         ------------------------------
                                    )
                                    )
                                    )     GEORGE F. PETTINOS, INC.
                                    )
                                    )
                                    )     Per: /s/ [ILLEGIBLE]
                                    )         ------------------------------
                                    )
                                    )     U.S. SILICA COMPANY
                                    )
                                    )
                                    )     Per: /s/ [ILLEGIBLE]
                                    )         ------------------------------
                                    )     GEORGE F. PETTINOS (CANADA)
                                    )     LIMITED
                                    )
                                    )
                                    )     Per: /s/ [ILLEGIBLE]
                                              ------------------------------

                                       26

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